Company: GURE
Filing Date: 2025-07-25
Form Type: DEF 14A
Source: 0001193805-25-001103
Chunk: 43

Company: GULF RESOURCES, INC.
Filing Date: 2025-07-25
Form: DEF 14A
Chunk 43
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 Participant generally does not recognize
taxable income upon the grant of a NQSO if structured to be exempt from or comply with Code Section 409A. Upon the exercise of a NQSO,
the U.S. Participant generally recognizes ordinary compensation income in an amount equal to the excess, if any, of the fair market value
of the shares acquired on the date of exercise over the exercise price thereof, and the Company generally will be entitled to a deduction
for such amount at that time. If the U.S. Participant later sells shares acquired pursuant to the exercise of a NQSO, the U.S. Participant
recognizes a long-term or short-term capital gain or loss, depending on the period for which the shares were held. A long-term capital
gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital
losses is subject to certain limitations.

A U.S. Participant generally does not recognize
taxable income upon the grant or, except for purposes of the U.S. alternative minimum tax (“AMT”) the exercise, of an ISO.
For purposes of the AMT, which is payable to the extent it exceeds the U.S. Participant’s regular income tax, upon the exercise
of an ISO, the excess of the fair market value of the shares subject to the ISO over the exercise price is a preference item for AMT purposes.
If the U.S. Participant disposes of the shares acquired pursuant to the exercise of an ISO more than two years after the date of grant
and more than one year after the transfer of the shares to the U.S. Participant, the U.S. Participant generally recognizes a long-term
capital gain or loss, and the Company will not be entitled to a deduction. However, if the U.S. Participant disposes of such shares prior
to the end of either of the required holding periods, the U.S. Participant will have ordinary compensation income equal to the excess
(if any) of the fair market value of such shares on the date of exercise (or, if less, the amount realized on the disposition of such
shares) over the exercise price paid for such shares, and the Company generally will be entitled to deduct such amount.

A U.S. Participant generally does not recognize
income upon the grant of a SAR. The U.S. Participant recognizes ordinary compensation income upon exercise of the SAR equal to the increase
in the value of the underlying shares, and the Company generally will be entitled to a