Company: PRME
Filing Date: 2025-07-02
Form Type: PRE 14A
Source: 0001193125-25-155000
Chunk: 19

Company: Prime Medicine, Inc.
Filing Date: 2025-07-02
Form: PRE 14A
Chunk 19
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 of the federal income tax consequences to us and to U.S. participants for options
granted under the Plans. The federal tax laws may change and the tax consequences for any participant will depend upon his or her individual circumstances. Tax consequences for any particular individual may be different. This summary does not
purport to be complete, and does not discuss state, local or non-U.S. tax consequences.

Incentive Stock Options

For income tax purposes, the repricing of an Eligible Option that is an incentive stock option (“ISO”) is treated as a new
option granted as of the Repricing Date and certain options previously denominated as ISOs may be converted to non-qualified stock options as a result of the Option Repricing.

The grant (including the deemed grant as a result of the repricing) or exercise of an ISO under the Plans is not expected to result in any
federal income tax consequences to the participant or to the Company. However, the amount by which the fair market value of the shares at the time of exercise exceeds the exercise price will be an “item of adjustment” for participants for
purposes of the alternative minimum tax, unless the shares are sold or otherwise disposed of in the same year the ISO is exercised. Gain realized by participants on the sale of shares underlying an ISO is taxable at capital gains rates, and no tax
deduction is available to the Company, unless the participant disposes of the shares within (i) two years after the date of grant of the option or (ii) within one year of the date the shares were transferred to the participant. If the
shares are sold or otherwise disposed of before the end of the one-year and two-year periods specified above, the difference between the option exercise price and the
fair market value of the shares on the date of the option’s exercise (or the date of sale, if less) will be taxed at ordinary income rates, and the Company will be entitled to a deduction to the extent that the participant recognizes ordinary
income.

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Non-QualifiedStock Options

The grant or repricing of a non-qualified stock option under the Plans is not expected to result in any
federal income tax consequences to the participant or to the Company. Generally, upon exercise of a non-qualified stock option, the participant will realize ordinary income, and the Company will be entitled to
a tax deduction, in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise