Company: ALGN
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0001097149-25-000021
Chunk: 108

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 108
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, and any additional gain or loss recognized upon any later disposition of the shares generally will be capital gain or loss.

#### Stock Appreciation Rights
A participant generally will not recognize taxable income upon the grant of a stock appreciation right with a per share exercise price equal to the fair market value of a share of the underlying stock on the date of grant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash and the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares generally will be capital gain or loss.

#### Restricted Stock
A participant generally will not recognize taxable income at the time an award of restricted stock is granted. Instead, he or she will recognize ordinary income in the first taxable year in which the shares underlying the award becomes transferable or no longer subject to a substantial risk of forfeiture at the then fair market value of the shares. However, the recipient of a restricted stock award may elect to recognize income at the time he or she receives shares under the award in an amount equal to the then-current fair market value of the shares less any amount paid for the shares. Any gain or loss recognized upon any later disposition of shares acquired through the grant of restricted stock generally will be treated as capital gain or loss.

Restricted Stock Units, Performance Units and Performance Shares

A participant generally will not recognize taxable income at the time an award of restricted stock units, performance shares or performance units are granted. Instead, he or she will recognize ordinary income in an amount equal to the fair market value of shares issued to the participant at the end of the applicable vesting period or, if later, the settlement date of the award. Any gain or loss recognized upon any later disposition of shares acquired through the grant of restricted stock units, performance shares or performance units generally will be treated as capital gain or loss.

#### Cash Payments
A participant will recognize ordinary income upon receipt of a cash payment pursuant to any award in an amount equal to the cash received.

#### Tax Effects for Align
Align generally will be entitled to a tax deduction in connection with an award under the Incentive Plan in an amount equal to the ordinary income recognized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option). Pursuant to Section 162(m) of the Internal Revenue Code for federal income tax purposes, a publicly traded corporation is not permitted to deduct compensation in excess of $1 million paid in any taxable year to its covered employees for