Common use of Incentive Stock Options Clause in Contracts

Incentive Stock Options. ISOs granted under the Plan are subject to the applicable provisions of the Code, including Section 422 of the Code. If Shares are issued to you upon the exercise of an ISO, and if you make no “disqualifying disposition” (as defined in the Code) of such Shares within one year after the exercise of the ISO or within 2 years after the date the ISO was granted, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no income, for regular income tax purposes, at the date of exercise, (iii) upon sale of the Shares acquired by exercise of the ISO, any amount realized in excess of the exercise price will be taxed to you, for regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable capital gain tax rate will depend on how long the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal to the excess of the fair market value of the Shares purchased at the time of exercise (or, if less, the fair market value of the Shares at the time of sale) over the exercise price (the “Bargain Purchase Element”), and we will be entitled to a federal income tax deduction equal to such amount. The amount of any gain in excess of the Bargain Purchase Element realized upon a “disqualifying disposition” will be taxable as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation or depreciation after the date of exercise is treated as a capital gain or loss, in which case the applicable capital gain tax rate will depend on how long you held the Shares and on your income tax bracket.

Incentive Stock Options. ISOs If the Stock Options have been designated on page 1 of the Award Agreement as Incentive Stock Options, then no taxable income is realized by the Participant upon exercise of an Incentive Stock Option granted under the Plan are subject to the applicable provisions of the Code, including Section 422 of the Code. If Shares are issued to you upon the exercise of an ISOPlan, and if you make no “disqualifying disposition” (as defined in disposition of those Shares is made by the Code) of such Shares Participant within two years after the Grant Date or within one year after the exercise transfer of those Shares to the ISO or within 2 years after the date the ISO was grantedParticipant, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no income, for regular income tax purposes, at the date of exercise, (iiia) upon the sale of the Shares acquired by exercise of the ISOShares, any amount realized in excess of the exercise price Option Price will be taxed to you, for regular income tax purposes, as a long-term capital gain and any loss sustained will be taxed as a long-term capital loss, and (ivb) we no deduction will not be allowed to take any deduction the Company for federal income tax purposes. The applicable capital gain Upon exercise of an Incentive Stock Option, the Participant may be subject to alternative minimum tax rate will depend on how long certain items of tax preference. If the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” acquired upon the exercise of such Sharesan Incentive Stock Option are disposed of prior to the expiration of the two-years-from-grant/one-year-from-transfer holding period, you generally (a) the Participant will realize taxable ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value Fair Market Value of the Shares purchased at the time of exercise (or, if less, the fair market value amount realized upon disposition of the Shares at the time of saleShares) over the exercise price (the “Bargain Purchase Element”)price, and we (b) the Company will be entitled to a federal income tax deduction equal to deduct such amount. The amount of any Any additional gain in excess of the Bargain Purchase Element or loss realized upon a “disqualifying disposition” will be taxable taxed as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation short-term or depreciation after the date of exercise is treated as a long-term capital gain or loss, in which as the case may be, and may not be deducted by the applicable capital gain tax rate Company. If an Incentive Stock Option is exercised at a time when it no longer qualifies as an Incentive Stock Option, the option will depend on how long you be treated as a Non-Qualified Stock Option. In addition, if the aggregate fair market value of Shares (determined at the Grant Date) subject to Stock Options designated as Incentive Stock Options held by the Shares and on your income tax bracketParticipant that first become exercisable during any calendar year exceeds $100,000, then the portion of such Incentive Stock Options equal to such excess shall be treated as Non-Qualified Stock Options.

Incentive Stock Options. ISOs If the Stock Options have been designated on page 1 of the Award Agreement as Incentive Stock Options, then no taxable income is realized by the Director upon exercise of an Incentive Stock Option granted under the Plan are subject to the applicable provisions of the Code, including Section 422 of the Code. If Shares are issued to you upon the exercise of an ISOPlan, and if you make no “disqualifying disposition” (as defined in disposition of those Shares is made by the Code) of such Shares Director within two years after the Grant Date or within one year after the exercise transfer of those Shares to the ISO or within 2 years after the date the ISO was grantedDirector, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no income, for regular income tax purposes, at the date of exercise, (iiia) upon the sale of the Shares acquired by exercise of the ISOShares, any amount realized in excess of the exercise price Option Price will be taxed to you, for regular income tax purposes, as a long-term capital gain and any loss sustained will be taxed as a long-term capital loss, and (ivb) we no deduction will not be allowed to take any deduction the Company for federal income tax purposes. The applicable capital gain Upon exercise of an Incentive Stock Option, the Director may be subject to alternative minimum tax rate will depend on how long certain items of tax preference. If the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” acquired upon the exercise of such Sharesan Incentive Stock Option are disposed of prior to the expiration of the two-years-from-grant/one-year-from-transfer holding period, you generally (a) the Director will realize taxable ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value Fair Market Value of the Shares purchased at the time of exercise (or, if less, the fair market value amount realized upon disposition of the Shares at the time of saleShares) over the exercise price (the “Bargain Purchase Element”)price, and we (b) the Company will be entitled to a federal income tax deduction equal to deduct such amount. The amount of any Any additional gain in excess of the Bargain Purchase Element or loss realized upon a “disqualifying disposition” will be taxable taxed as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation short-term or depreciation after the date of exercise is treated as a long-term capital gain or loss, in which as the case may be, and may not be deducted by the applicable capital gain tax rate Company. If an Incentive Stock Option is exercised at a time when it no longer qualifies as an Incentive Stock Option, the option will depend on how long you be treated as a Non-Qualified Stock Option. In addition, if the aggregate fair market value of Shares (determined at the Grant Date) subject to Stock Options designated as Incentive Stock Options held by the Shares and on your income tax bracketDirector that first become exercisable during any calendar year exceeds $100,000, then the portion of such Incentive Stock Options equal to such excess shall be treated as Non-Qualified Stock Options.

Incentive Stock Options. ISOs granted under Under current U.S. tax law, an option holder generally will not realize taxable income upon the Plan are subject to the applicable provisions grant of the Codean incentive stock option. In addition, including Section 422 of the Code. If Shares are issued to you an option holder generally will not realize taxable income upon the exercise of an ISOincentive stock option. However, and if you make no “disqualifying disposition” (as defined in the Code) of such Shares within one year after the exercise of the ISO or within 2 years after the date the ISO was granted, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no an incentive stock option may affect an option holder’s alternative minimum taxable income, for regular income tax purposes, at the date of exercise, (iii) upon sale of the Shares acquired by . Upon exercise of an incentive stock option, the ISO, any amount realized in excess of the exercise price option holder will be taxed required to you, for regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable capital gain tax rate will depend on how long include the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal to the excess of the fair market value of the Shares purchased exercised shares on the date of exercise over the exercise price as an adjustment item in the determination of any alternative minimum tax. However, if the option holder disposes of the exercised shares in the same calendar year as the date of exercise of the incentive stock option, then no adjustment will be made in determining such alternative minimum tax. Except in the case of an option holder’s death or disability, if an option is exercised more than three months after the option holder’s termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to nonstatutory stock options. If an option holder sells the option shares acquired upon exercise of an incentive stock option, the tax consequences of the disposition depend upon whether the disposition is qualifying or disqualifying. The disposition of the option shares is qualifying if it is made: · more than two years after the date the incentive stock option was granted; and · more than one year after the date the incentive stock option was exercised. If the disposition of the option shares is qualifying, any excess of the sale price of the option shares over the exercise price of the option will be treated as long-term capital gain taxable to the option holder at the time of exercise the sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale. If the disposition is not qualifying, which we refer to as a “disqualifying disposition,” the excess of the fair market value of the option shares on the date the option was exercised (or, if less, the fair market value amount realized on the disposition of the Shares at the time of saleshares) over the exercise price (will be treated as ordinary income to the “Bargain Purchase Element”)option holder at the time of the disposition. Any additional gain generally will be taxable at long-term or short-term capital gain rates, and depending on whether the option holder has held the shares for more than one year. Unless an option holder engages in a disqualifying disposition, we will not be entitled to a deduction with respect to an incentive stock option. If an option holder engages in a disqualifying disposition, we generally will be entitled to a federal income tax deduction equal to such amount. The the amount of any gain in excess of the Bargain Purchase Element realized upon a “disqualifying disposition” will be ordinary income taxable as capital gain to the option holder. Nonstatutory stock options Under current U.S. tax law, an option holder (for which we generally will not be entitled realize taxable income upon the grant of a federal income tax deduction)nonstatutory stock option. Upon exercise of However, when an ISOoption holder exercises the nonstatutory stock option, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price of the option and the fair market value of the Shares shares subject to the option on the date of exerciseexercise generally will be compensation income taxable to the option holder. We generally will be entitled to a deduction equal to the amount of compensation income taxable to the option holder if we comply with eligible reporting requirements. Upon disposition of the exercised shares, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation any gain or depreciation after the date of exercise loss is treated as a capital gain or loss, in which case the applicable . The capital gain or loss will be long-term or short-term depending on whether the shares were held for more than 12 months. The holding period for the shares generally will begin just after the time the option holder recognized income. The amount of such gain or loss will be the difference between: (i) the amount realized upon the sale or exchange of the shares, and (ii) the value of the shares at the time the ordinary income was recognized. If the option holder was an employee at the time of the grant of the option, any income recognized upon exercise of a nonstatutory stock option generally will constitute wages for which withholding will be required. We recommend that you consult your tax rate will depend on how long you held adviser with respect to the Shares U.S. federal, state, and on your income local tax bracketconsequences of participating in the Offer.

Incentive Stock Options. ISOs granted under No income is recognized for federal income tax purposes by an optionee at the Plan are subject to the applicable provisions of the Codetime an Incentive Stock Option is granted, including Section 422 of the Code. If Shares are issued to you and, except as discussed below, no income is recognized by an optionee upon the his or her exercise of an ISOIncentive Stock Option. If the optionee makes no disposition of the Common Stock received upon exercise within two years from the date such option was granted or one year from the date such option is exercised, the optionee will recognize mid-term or long-term capital gain or loss when he or she disposes of his or her Common Stock depending on the length of the holding period. Such gain or loss generally will be measured by the difference between the exercise price of the option and if you make no “disqualifying the amount received for the Common Stock at the time of disposition” (as defined in . If the Code) optionee disposes of such Shares the Common Stock acquired upon exercise of an Incentive Stock Option within two years after being granted the option or within one year after acquiring the exercise Common Stock, any amount realized from such disqualifying disposition will be taxable as ordinary income in the year of disposition to the extent that (i) the lesser of (a) the fair market value of the ISO or within 2 years after shares on the date the ISO Incentive Stock Option was granted, then exercised or (ib) you will recognize no income the fair market value at the time of the grant of the ISO, such disposition exceeds (ii) you will recognize no income, for regular income tax purposes, at the date of exercise, (iii) upon sale of the Shares acquired by Incentive Stock Option exercise of the ISO, any price. Any amount realized upon disposition in excess of the fair market value of the shares on the date of exercise price will be taxed treated as long-term, mid-term or short-term capital gain, depending upon the length of time the shares have been held. The use of stock acquired through exercise of an Incentive Stock Option to you, for regular income exercise an Incentive Stock Option will constitute a disqualifying disposition if the applicable holding period requirement has not been satisfied. For alternative minimum tax purposes, as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable capital gain tax rate will depend on how long the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal to the excess of the fair market value of the Shares purchased at stock as of the time date of exercise (or, if less, the fair market value of the Shares at the time of sale) over the exercise price (the “Bargain Purchase Element”), and we will be entitled to a federal income tax deduction equal to such amount. The amount of any gain in excess of the Bargain Purchase Element realized upon a “disqualifying disposition” will be taxable as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to Incentive Stock Option is included in computing that year's alternative minimum taxtaxable income. Nonqualified Stock Options With However, if the shares are disposed of in the same year, the maximum alternative minimum taxable income with respect to NQSOs granted under those shares is the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) gain on disposition, appreciation or depreciation after the date of exercise . There is treated as no alternative minimum taxable income from a capital gain or loss, disqualifying disposition in which case the applicable capital gain tax rate will depend on how long you held the Shares and on your income tax bracketsubsequent years.

Incentive Stock Options. ISOs granted Under current law, an option holder will not realize taxable income upon the grant of an incentive stock option under the Plan are subject to the applicable provisions of the Codeour 1996 Stock Plan. In addition, including Section 422 of the Code. If Shares are issued to you an option holder generally will not realize taxable income upon the exercise of an ISOincentive stock option. However, and if you make no “disqualifying disposition” (an option holder's alternative minimum taxable income will be increased by the amount that the aggregate fair market value of the shares underlying the option, which is generally determined as defined of the date of exercise, exceeds the aggregate exercise price of the option. Except in the Code) case of such Shares within one year an option holder's death or disability, if an option is exercised more than three months after the option holder's termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to non-qualified stock options. If an option holder sells the option shares acquired upon exercise of an incentive stock option, the ISO tax consequences of the disposition depend upon whether the disposition is qualifying or within 2 disqualifying. The disposition of the option shares is qualifying if it is made: at least two years after the date the ISO incentive stock option was granted, then (i) you and at least one year after the date the incentive stock option was exercised. The two-year and one-year periods described above are referred to as "holding periods." If the disposition of the option shares is qualifying, any excess of the sale price of the option shares, over the exercise price of the option will recognize no income be treated as long-term capital gain taxable to the option holder at the time of the grant sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale. If the disposition of the ISOoption shares is not qualifying, (ii) you will recognize no income, for regular income tax purposes, at which we refer to as a "disqualifying disposition," the date of exercise, (iii) upon sale excess of the Shares acquired by exercise sale price of the ISO, any amount realized in excess of option shares over the exercise price will be taxed to you, for regular income tax purposes, at the time of the sale as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. follows: The applicable capital gain tax rate will depend on how long the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal up to the excess of the lower of (a) the fair market value of the Shares purchased shares at the time of exercise the option was exercised or (orb) the sale price, if less, the fair market value of the Shares at the time of sale) over the exercise price (will be ordinary income for income tax purposes and the “Bargain Purchase Element”)balance, and if any, will be long-term or short-term capital gain, depending upon whether or not the shares were sold more than one year after the option was exercised. Unless an option holder engages in a disqualifying disposition, we will not be entitled to a deduction with respect to an incentive stock option. If an option holder engages in a disqualifying disposition, we will be entitled to a federal income tax deduction equal to such amount. The the amount of any gain in excess of compensation income taxable to the Bargain Purchase Element realized upon a “disqualifying disposition” option holder. If you tender incentive stock options and those options are accepted for exchange, the new options will be taxable granted as capital gain incentive stock options to the holder (for which we will not be entitled a federal income tax deduction)maximum extent they qualify. Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exerciseHowever, you will recognize ordinary income begin a new holding period for purposes of determining whether any disposition of the underlying shares is a qualifying disposition as described above. For options to qualify as incentive stock options, the value of shares subject to options that first become exercisable in an amount equal any calendar year cannot exceed $100,000, as determined using the option exercise price. The excess value is deemed to be a non-qualified stock option. You should note that if the difference between the new options have a higher exercise price and the fair market value than some or all of the Shares your current options, or if a significant number of options are vested on the date of exercisegrant (to equal your current vesting schedule), the new options may exceed the limit for incentive stock options. We note that there is a risk that any incentive stock options you have may be affected by the Offer, even if you do not elect to exchange your options. We believe that you will not be subject to current U.S. federal income tax if you do not participate in the option exchange program. We also believe that the option exchange program will not change the U.S. federal income tax treatment of subsequent grants and we exercise of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate. However, the IRS may characterize the option exchange program as a "modification" of those incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of each incentive stock option eligible for exchange. This does not necessarily mean that our Offer will receive a tax deduction for be viewed the same amountway. Private letter rulings issued by the IRS represent the IRS's opinion as to the specific facts presented by a specific person or company. The person or company receiving the letter may rely on it, and (iii) but no other person or company may rely on dispositionthe letter ruling or assume the same opinion would apply to their situation, appreciation or depreciation after even if the date facts at issue are similar. However, such letters may indicate how the IRS will view a similar situation. Therefore, we do not know if the IRS will assert that the Offer constitutes a "modification" of exercise is treated all incentive stock options that are eligible to be tendered. If the IRS successfully asserts this position, the holding period for your options to qualify for favorable tax treatment could be extended. Accordingly, to the extent you sell your incentive stock option shares prior to the lapse of any extended holding period, your incentive stock option could be taxed as a capital gain or loss, in which case nonqualified stock option. You should consult your tax advisor about the applicable capital gain likely tax rate will depend on how long you held effects of the Shares and Offer on your income tax bracketoptions, whether or not they are exchanged.

Incentive Stock Options. ISOs granted under Under current U.S. tax law, an option holder generally will not realize taxable income upon the Plan are subject to the applicable provisions grant or repricing of the Codean incentive stock option. In addition, including Section 422 of the Code. If Shares are issued to you an option holder generally will not realize taxable income upon the exercise of an ISOincentive stock option. However, and if you make no “disqualifying disposition” (as defined in the Code) of such Shares within one year after the exercise of the ISO or within 2 years after the date the ISO was granted, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no an incentive stock option may affect an option holder’s alternative minimum taxable income, for regular income tax purposes, at the date of exercise, (iii) upon sale of the Shares acquired by . Upon exercise of an incentive stock option, the ISO, any amount realized in excess of the exercise price option holder will be taxed required to you, for regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable capital gain tax rate will depend on how long include the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal to the excess of the fair market value of the Shares purchased exercised shares on the date of exercise over the exercise price as an adjustment item in the determination of any alternative minimum tax. However, if the option holder disposes of the exercised shares in the same calendar year as the date of exercise of the incentive stock option, then no adjustment will be made in determining such alternative minimum tax. Except in the case of an option holder’s death or disability, if an option is exercised more than three months after the option holder’s termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to nonstatutory stock options. If an option holder sells the option shares acquired upon exercise of an incentive stock option, the tax consequences of the disposition depend upon whether the disposition is qualifying or disqualifying. The disposition of the option shares is qualifying if it is made: more than two years after the date the incentive stock option was granted (and the repricing date is deemed to be a repriced option’s grant date for this purpose); and more than one year after the date the incentive stock option was exercised. If the disposition of the option shares is qualifying, any excess of the sale price of the option shares over the exercise price of the option will be treated as long-term capital gain taxable to the option holder at the time of exercise the sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale. If the disposition is not qualifying, which we refer to as a “disqualifying disposition,” the excess of the fair market value of the option shares on the date the option was exercised (or, if less, the fair market value amount realized on the disposition of the Shares at the time of saleshares) over the exercise price (will be treated as ordinary income to the “Bargain Purchase Element”)option holder at the time of the disposition. Any additional gain generally will be taxable at long-term or short-term capital gain rates, and depending on whether the option holder has held the shares for more than one year. Unless an option holder engages in a disqualifying disposition, we will not be entitled to a deduction with respect to an incentive stock option. If an option holder engages in a disqualifying disposition, we generally will be entitled to a federal income tax deduction equal to such amount. The the amount of any gain in excess of the Bargain Purchase Element realized upon a “disqualifying disposition” will be ordinary income taxable as capital gain to the option holder. Nonstatutory stock options Under current U.S. tax law, an option holder (for which we generally will not be entitled realize taxable income upon the grant of a federal income tax deduction)nonstatutory stock option. Upon exercise of However, when an ISOoption holder exercises the nonstatutory stock option, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price of the option and the fair market value of the Shares shares subject to the option on the date of exerciseexercise generally will be compensation income taxable to the option holder. We generally will be entitled to a deduction equal to the amount of compensation income taxable to the option holder if we comply with eligible reporting requirements. Upon disposition of the exercised shares, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation any gain or depreciation after the date of exercise loss is treated as a capital gain or loss. The capital gain or loss will be long-term or short-term depending on whether the shares were held for more than 12 months. The holding period for the shares generally will begin just after the time the option holder recognized income. The amount of such gain or loss will be the difference between: (i) the amount realized upon the sale or exchange of the shares, and (ii) the value of the shares at the time the ordinary income was recognized. If the option holder was an employee at the time of the grant of the option, any income recognized upon exercise of a nonstatutory stock option generally will constitute wages for which withholding will be required. We recommend that you consult your tax adviser with respect to the U.S. (or non-U.S., as applicable) federal, state, and local tax consequences of participating in the Offer. Material income tax consequences and certain other considerations for eligible employees who reside outside the U.S. This discussion summarizes the likely tax consequences associated with the tender of eligible options for repricing by Xxxxxx. This summary assumes that you are and will continue to be resident in the relevant country and is based upon tax laws as well as administrative and judicial interpretations in effect as of September 2022. If these tax laws, or interpretations of these laws, change in the future, possibly with retroactive effect, the information provided in this summary may no longer be accurate. This summary is limited to a general description of the national tax laws, and is not intended to address local, city, regional, or other provincial tax laws that may be applicable to you. The tax consequences of the repricing are based on complex tax laws, which may be subject to varying interpretations, and the application of such laws may depend, in which case large part, on the applicable capital gain surrounding facts and circumstances. This discussion does not apply to every specific transaction that may occur in connection with the tender of eligible options for repricing. Moreover, it may not apply to your particular tax rate will depend on how long or financial situation, and we are not in a position to assure you held of any particular tax result. If you are a citizen or resident or are otherwise subject to the Shares tax laws of more than one country, you should be aware that there might be tax and on social insurance contribution consequences for more than one country that may apply to you. You should review the information carefully and consult your income own tax bracketadviser regarding your personal situation before deciding whether or not to participate in the offer.

Incentive Stock Options. ISOs granted under Under current law, you will not realize taxable income upon the Plan are subject to the applicable provisions grant of the Codean incentive stock option. In addition, including Section 422 of the Code. If Shares are issued to you generally will not realize taxable income upon the exercise of an ISOincentive stock option. However, and if you make no “disqualifying disposition” (your alternative minimum taxable income will be increased by the amount that the aggregate fair market value of the shares underlying the New Option, which is generally determined as defined of the date of exercise, exceeds the aggregate exercise price of the option. Except in the Code) case of such Shares within one year your death or disability, if an option is exercised more than 3 months after your termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to nonstatutory stock options. If you sell the option shares acquired upon exercise of an incentive stock option, the ISO tax consequences of the disposition depend upon whether the disposition is qualifying or within disqualifying. The disposition of the option shares is qualifying if it is made: • at least 2 years after the date the ISO incentive stock option was granted, then (i) you and • at least 1 year after the date the incentive stock option was exercised. If the disposition of the option shares is qualifying, any excess of the sale price of the option shares over the exercise price of the option will recognize no income be treated as long-term capital gain taxable to the option holder at the time of the grant sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale. If the disposition is not qualifying, which we refer to as a “disqualifying disposition,” the excess of the ISO, (ii) you will recognize no income, for regular income tax purposes, at fair market value of the option shares on the date of exercise, (iii) upon sale of the Shares acquired by exercise of the ISO, any amount realized in excess of New Option was exercised over the exercise price will be taxed taxable income to youyou at the time of the disposition. Of that income, for regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, and (iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable capital gain tax rate will depend on how long the Shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Shares, you will realize taxable ordinary income in an amount equal up to the excess of the fair market value of the Shares purchased shares at the time of exercise (or, if less, the fair market value of the Shares at the time of sale) New Option was exercised over the exercise price (will be ordinary income for income tax purposes and the “Bargain Purchase Element”)balance, and if any, will be long-term or short-term capital gain, depending upon whether or not the shares were sold more than 1 year after the New Option was exercised. Unless you engage in a disqualifying disposition, the Company will not be entitled to a deduction with respect to an incentive stock option. If you engage in a disqualifying disposition, we will be entitled to a federal income tax deduction equal to such amount. The the amount of any gain in excess of the Bargain Purchase Element realized upon a “disqualifying disposition” will be compensation income taxable as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation or depreciation after the date of exercise is treated as a capital gain or loss, in which case the applicable capital gain tax rate will depend on how long you held the Shares and on your income tax bracketyou.

Incentive Stock Options. ISOs granted under No taxable income is realized by the Plan are subject to optionee upon the applicable provisions grant or exercise of the Code, including Section 422 of the Codean incentive stock option. If Shares are Class A Common Stock is issued to you upon an optionee pursuant to the exercise of an ISOincentive stock option, and if you make no “disqualifying disposition” (as defined in the Code) disposition of such Shares stock is made by such optionee within two years after the date of grant or within one year after the exercise transfer of the ISO or within 2 years after the date the ISO was grantedsuch shares to such optionee, then (i) you will recognize no income at the time of the grant of the ISO, (ii) you will recognize no income, for regular income tax purposes, at the date of exercise, (iiia) upon the sale of such stock a long-term capital gain or loss will be realized in an amount equal to the Shares acquired by exercise of difference between the ISO, any option price and the amount realized in excess of by the exercise price will be taxed to you, for regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, optionee and (ivb) we no deduction will not be allowed to take any deduction the Company for federal income tax purposes. The applicable capital gain tax rate will depend excess (if any) of the fair market value of the shares on how long the Shares were held and on your date of exercise over the option price, however, is includable in alternative minimum taxable income tax bracketunless the shares are disposed of in the taxable year the option is exercised. If you make a “disqualifying disposition” Class A Common Stock acquired upon the exercise of such Sharesan incentive stock option is disposed of prior to the expiration of either holding period described above, you will realize taxable generally (i) the optionee realizes ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the Shares purchased at shares on the time date of exercise (or, if less, the amount realized on the disposition of the shares) over the option price paid for such shares and (ii) the Company will be entitled to deduct the amount realized as ordinary income by the optionee if the Company satisfies applicable federal withholding or reporting requirements. Any further gain (or loss) realized by the participant will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction for the Company. With respect to the exercise of an incentive stock option and the payment of the option price by the delivery of shares of Class A Common Stock, to the extent that the number of shares received does not exceed the number of shares surrendered, no taxable income will be realized by the optionee at that time, the tax basis of the shares received will be the same as the tax basis of the shares surrendered, and the holding period (except for purposes of the one-year period referred to above) of the optionee in shares received will include his holding period in the shares surrendered. To the extent that the number of shares received exceeds the number of shares surrendered, no-taxable income will be realized by the optionee at that time; such excess shares will be considered incentive stock option stock with a zero basis; and the holding period of the optionee in such shares will begin on the date such shares are transferred to the optionee. If the shares surrendered were acquired as the result of the exercise of an incentive stock option and the surrender takes place within two years from the date the option relating to the surrendered shares was granted or within one year from the date of such exercise, the surrender will result in a disqualifying disposition and the optionee will realize ordinary income at that time in the amount of the excess, if any, of the fair market value of the Shares at the time of sale) exercise of the shares surrendered over the exercise price (basis of such shares. If any of the “Bargain Purchase Element”)shares received are disposed of in a disqualifying disposition, and we the optionee will be entitled to a federal income tax deduction equal to such amount. The amount of any gain in excess treated as first disposing of the Bargain Purchase Element realized upon shares with a “disqualifying disposition” will be taxable as capital gain to the holder (for which we will not be entitled a federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum tax. Nonqualified Stock Options With respect to NQSOs granted under the Plan, (i) you will recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise, and we will receive a tax deduction for the same amount, and (iii) on disposition, appreciation or depreciation after the date of exercise is treated as a capital gain or loss, in which case the applicable capital gain tax rate will depend on how long you held the Shares and on your income tax bracketzero basis.