BUSINESS DAY
FOLLOWING THE VESTING DATE.
IF THE PARTICIPANT ELECTS TO PAY THE REQUIRED TAX
WITHHOLDING BY CHECK BUT FAILS TO MAKE SUCH PAYMENT AS REQUIRED BY THE PRECEDING
SENTENCE, THE COMPANY IS HEREBY AUTHORIZED AT ITS DISCRETION, TO SATISFY THE TAX
WITHHOLDING OBLIGATIONS THROUGH ANY OTHER MEANS AUTHORIZED BY THIS SECTION 7,
INCLUDING BY EFFECTING A SALE OF SOME OR ALL OF THE SHARES BECOMING VESTED
SHARES ON THE VESTING DATE, OR WITHHOLDING FROM PAYROLL AND ANY OTHER AMOUNTS
PAYABLE TO THE PARTICIPANT
7.2
ELECTION UNDER SECTION 83(B) OF THE CODE.
(A)
THE PARTICIPANT UNDERSTANDS THAT SECTION 83 OF THE CODE TAXES AS
ORDINARY INCOME THE DIFFERENCE BETWEEN THE AMOUNT PAID FOR THE SHARES, IF
ANYTHING, AND THE FAIR MARKET VALUE OF THE SHARES AS OF THE DATE ON WHICH THE
SHARES ARE "SUBSTANTIALLY VESTED," WITHIN THE MEANING OF SECTION 83.
IN THIS
CONTEXT, "SUBSTANTIALLY VESTED" MEANS THAT THE RIGHT OF THE COMPANY TO REACQUIRE
THE SHARES PURSUANT TO THE COMPANY REACQUISITION RIGHT HAS LAPSED.
THE
5
PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY ELECT TO HAVE HIS OR HER TAXABLE
INCOME DETERMINED AT THE TIME HE OR SHE ACQUIRES THE SHARES RATHER THAN WHEN AND
AS THE COMPANY REACQUISITION RIGHT LAPSES BY FILING AN ELECTION UNDER
SECTION 83(B) OF THE CODE WITH THE INTERNAL REVENUE SERVICE NO LATER THAN THIRTY
(30) DAYS AFTER THE DATE OF ACQUISITION OF THE SHARES.
THE PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE A TIMELY FILING UNDER SECTION 83(B) WILL RESULT
IN HIS OR HER RECOGNITION OF ORDINARY INCOME, AS THE COMPANY REACQUISITION RIGHT
LAPSES, ON THE DIFFERENCE BETWEEN THE PURCHASE PRICE, IF ANYTHING, AND THE FAIR
MARKET VALUE OF THE SHARES AT THE TIME SUCH RESTRICTIONS LAPSE.
THE PARTICIPANT
FURTHER UNDERSTANDS, HOWEVER, THAT IF SHARES WITH RESPECT TO WHICH AN ELECTION
UNDER SECTION 83(B) HAS BEEN MADE ARE FORFEITED TO THE COMPANY PURSUANT TO ITS
COMPANY REACQUISITION RIGHT, SUCH FORFEITURE WILL BE TREATED AS A SALE ON WHICH
THERE IS REALIZED A LOSS EQUAL TO THE EXCESS (IF ANY) OF THE AMOUNT PAID (IF
ANY) BY THE PARTICIPANT FOR THE FORFEITED SHARES OVER THE AMOUNT REALIZED (IF
ANY) UPON THEIR FORFEITURE.
IF THE PARTICIPANT HAS PAID NOTHING FOR THE
FORFEITED SHARES AND HAS RECEIVED NO PAYMENT UPON THEIR FORFEITURE, THE
PARTICIPANT UNDERSTANDS THAT HE OR SHE WILL BE UNABLE TO RECOGNIZE ANY LOSS ON
THE FORFEITURE OF THE SHARES EVEN THOUGH THE PARTICIPANT INCURRED A TAX
LIABILITY BY MAKING AN ELECTION UNDER SECTION 83(B).
(B)
THE PARTICIPANT UNDERSTANDS THAT HE OR SHE SHOULD CONSULT WITH HIS
OR HER TAX ADVISOR REGARDING THE ADVISABILITY OF FILING WITH THE INTERNAL
REVENUE SERVICE AN ELECTION UNDER SECTION 83(B) OF THE CODE, WHICH MUST BE FILED
NO LATER THAN THIRTY (30) DAYS AFTER THE DATE OF THE ACQUISITION OF THE SHARES
PURSUANT TO THIS AGREEMENT.
FAILURE TO FILE AN ELECTION UNDER SECTION 83(B), IF
APPROPRIATE, MAY RESULT IN ADVERSE TAX CONSEQUENCES TO THE PARTICIPANT.
THE
PARTICIPANT ACKNOWLEDGES THAT HE OR SHE HAS BEEN ADVISED TO CONSULT