Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 277

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 277
---
 to amend the Bermuda NewCo equity plan, will extend beyond such date.

Amendment, Modification and Termination of the Bermuda NewCo Equity Plan — The Bermuda NewCo board may, at any time and from time to time, modify or amend the Bermuda NewCo equity plan, except that such action will not be taken without shareholder approval if such modification or amendment materially increases the benefits accruing to participants, increases the maximum number of shares which may be issued under the Bermuda NewCo equity plan (except for the permissible adjustments described above) or materially modifies the requirements as to eligibility for participation in the Bermuda NewCo equity plan or exercise of an option. No action taken with respect to the Bermuda NewCo equity plan will affect the rights of a participant without the consent of the affected participant, unless such action is necessary to qualify any or all options under the Bermuda NewCo equity plan for favorable tax treatment under Section 422 of the Code.

#### U.S. Federal Income Tax Consequences
Generally, there will be no U.S. federal income tax consequences to the participant or Bermuda NewCo upon the grant of an option under the Bermuda NewCo equity plan. Upon exercise of an option that is not an incentive stock option, a participant generally will recognize ordinary income in an amount equal to (i) the fair market value, on the date of exercise, of the acquired shares; less (ii) the exercise price of the option. Bermuda NewCo will generally be eligible to receive a tax deduction in the same amount.

Upon the exercise of an incentive stock option, a participant generally recognizes no immediate taxable income and income recognition is generally deferred until the participant sells the shares. However, the excess of the fair market value of the shares acquired upon exercise of an incentive stock option over the exercise price constitutes a tax preference item for purposes of computing the “alternative minimum tax” under the Code. If an incentive stock option is exercised no later than three months after the termination of the participant’s employment, and the participant does not dispose of the shares acquired pursuant to such exercise within two years from the date the option was granted or within one year after the date on which the shares acquired pursuant to the exercise are transferred to the participant, any gain or loss on the sale will be treated as long-term capital gain or loss. Bermuda NewCo is not eligible to receive any tax deduction with respect to the grant or exercise of incentive stock options, except that if the shares are not held for the full term of the holding period described above, then an amount equal to the lesser of: