Company: CRD-A
Filing Date: 2025-04-07
Form Type: DEF 14A
Source: 0001558370-25-004509
Chunk: 70

Company: CRAWFORD & CO
Filing Date: 2025-04-07
Form: DEF 14A
Chunk 70
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 to specific questions relating to tax consequences of participation in the Plan.

Tax Consequences for Employees.No taxable income will be recognized by a participant upon enrolling in the 2016 Employee Stock Purchase Plan or as a result of the grant or exercise of the purchase rights issued under the Plan.

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Taxable income will not be recognized until there is a sale or other disposition of the shares purchased under the Plan or in the event a participant should die while still owning any shares purchased under the Plan.

If a participant holds the shares for both one year or more after the purchase date and two years or more after the offering date (referred to as the Code Section 423 holding period), or if the participant dies while owning the shares, the participant will generally recognize ordinary income upon the sale or other disposition of the shares equal to the difference between the purchase price and the fair market value of the shares on the date of disposition, or 15% of the fair market value of the shares on the offering date, whichever is less. Any additional gain will be taxed as long-term capital gain. If the shares are sold for less than the purchase price, there is no ordinary income, and the participant will have a long-term capital loss for the difference between the purchase price and the sale price.

Otherwise, if a participant sells or otherwise disposes of the shares before the end of the Code Section 423 holding period, the participant will generally have ordinary income equal to the difference between the purchase price and the fair market value on the purchase date (in this case, the 15% discount on the purchase price). The difference between the sale price and the fair market value on the purchase date will be a capital gain or loss, which will be long-term if the shares have been held for more than one year.

Tax Consequences for the Company. The Company is not allowed a deduction for federal income tax purposes in connection with the grant or exercise of the right to purchase common shares under the Plan, provided there is no disposition of shares by a participant before the end of the Code Section 423 holding period. If a disposition occurs before the end of the Code Section 423 holding period, the Company will be entitled to a deduction in the same amount and at the same time that the participant realizes ordinary income.

Shareholder Approval

In order to be effective, the proposed amendment to the Plan must be approved by the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the Annual Meeting.