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. 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. 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 granted under the Plan are subject to the applicable provisions of the Code, including Code Section 422 of the Code422. If Shares shares of our common stock 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 shares within one year after the exercise of the ISO or within 2 two 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 shares acquired by exercise of the ISO, any amount realized in excess of the exercise option 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 shares were held and on your income tax bracket. If you make a “disqualifying disposition” of such Sharesshares, you will realize taxable ordinary income in an amount equal to the excess of the fair market value of the Shares 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 option price (the “Bargain Purchase Elementbargain 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 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. 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 granted under In general, an optionholder will not recognize taxable income upon the Plan are subject grant or exercise of an incentive stock option. Instead, an optionholder will recognize taxable income with respect to an incentive stock option only upon the applicable provisions sale of the Code, including Section 422 of the Code. If Shares are issued to you upon shares acquired through the exercise of an ISOthe option, and if you make no “disqualifying disposition” (which we refer to as defined "ISO shares". Nevertheless, in the Codecase of an optionholder who has not been an employee at all times commencing on the date on which a particular option was granted and ending on the date that is three months before the date on which the option is exercised, an option generally will be treated as though it were a nonqualified stock option and taxed as described below under "Nonqualified Stock Options". Similarly, options will be treated as nonqualified stock options for purposes of the alternative minimum tax. While an optionholder will pay alternative minimum tax only to the extent of the excess of that tax over the optionholder's regular tax, the treatment of an option as a nonqualified stock option for purposes of the alternative minimum tax could create such an excess. Generally, the tax consequences of selling ISO shares will vary with the length of time that the optionholder has owned the ISO shares at the time they are sold. If the optionholder sells ISO shares more than two years after the applicable grant date (of the new options, if applicable) of such Shares within and more than one year after the applicable exercise of the ISO or within 2 years after the date the ISO was granteddate, then (i) you the optionholder 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 long-term 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 sale price of the Shares purchased at the time of exercise (or, if less, the fair market value of the Shares at the time of sale) ISO shares over the exercise price (price. If the “Bargain Purchase Element”)optionholder sells ISO shares prior to satisfying the above waiting periods, and which we will be entitled refer to as 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 ", then 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. 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 optionholder generally will recognize ordinary compensation 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.lesser of:

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. 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 In general, an optionholder will not recognize taxable income upon the Plan are subject grant or exercise of an incentive stock option. Instead, an optionholder will recognize taxable income with respect to an incentive stock option only upon the applicable provisions sale of the Code, including Section 422 of the Code. If Shares are issued to you upon shares acquired through the exercise of an ISOthe option, and if you make no “disqualifying disposition” (which we refer to as defined "ISO shares". Nevertheless, in the Codecase of an optionholder who has not been an employee at all times commencing on the date on which a particular option was granted and ending on the date that is three months before the date on which the option is exercised, an option generally will be treated as though it were a nonqualified stock option and taxed as described below under "Nonqualified Stock Options". Similarly, options will be treated as nonqualified stock options for purposes of the alternative minimum tax. While an optionholder will pay alternative minimum tax only to the extent of the excess of that tax over the optionholder's regular tax, the treatment of an option as a nonqualified stock option for purposes of the alternative minimum tax could create such an excess. Generally, the tax consequences of selling ISO shares will vary with the length of time that the optionholder has owned the ISO shares at the time they are sold. If the optionholder sells ISO shares more than two years after the applicable grant date (of the new options, if applicable) of such Shares within and more than one year after the applicable exercise of the ISO or within 2 years after the date the ISO was granteddate, then (i) you the optionholder 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 long-term 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 sale price of the Shares purchased at the time of exercise (or, if less, the fair market value of the Shares at the time of sale) ISO shares over the exercise price (price. If the “Bargain Purchase Element”)optionholder sells ISO shares before satisfying the above waiting periods, and which we will be entitled refer to as 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 ", then 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. 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 optionholder generally will recognize ordinary compensation 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.lesser of:

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. 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.