302 Notice of Disqualifying Disposition Clause Examples for Any Agreement
A Notice of Disqualifying Disposition clause requires an employee to inform their employer if they sell stock acquired through an incentive stock option (ISO) or employee stock purchase plan (ESPP) before meeting the required holding periods for favorable tax treatment. Typically, this means the employee must notify the company if they dispose of the shares within one year of purchase or two years from the grant date, as such a sale triggers different tax consequences. The core function of this clause is to ensure the employer receives timely information needed for accurate tax reporting and compliance with IRS regulations.
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Notice of Disqualifying Disposition.ÌýTo the extent the Option has been designated as an Incentive Stock Option, to obtain certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for two years after the Grant Date and one year after the date of exercise. You may be subject to the alternative minimum tax at the time of exercise. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the date you exercise all or part of the Option or within two years from the Grant Date.
Notice of Disqualifying Disposition.ÌýIf the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two (2) years of the Date of Option Grant.
Notice of Disqualifying Disposition.ÌýIf Grantee makes a disposition (as that term is defined in §424(c) of the Code) of any Shares acquired pursuant to the exercise of an Incentive Stock Option within two (2) years of the Grant Date or within one (1) year after the Shares are transferred to Grantee, Grantee shall notify the Committee of such disposition in writing, setting forth, in reasonable detail, the terms and circumstances of such disposition.
Notice of Disqualifying Disposition.ÌýIf the Option is an Incentive Stock Option, the Purchaser agrees to promptly notify the Secretary at the Company if he or she transfers any of the Shares purchased pursuant to this Exercise Agreement within one (1) year from the date of exercise of the Option or within two (2) years from the Grant Date.
Notice of Disqualifying Disposition.ÌýIf any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10) days thereof.
Notice of Disqualifying Disposition.ÌýTo obtain certain tax benefits afforded to Incentive Options, an Optionee must hold the shares issued upon the exercise of an Incentive Option for two years after the date of grant of the Option and one year from the date of exercise. By executing this Agreement, Optionee hereby agrees to promptly notify the Company’s Chief Financial Officer of any disposition of Shares within one year from the date this Option is exercised or within two years of the date of grant of this Option.
Notice of Disqualifying Disposition.ÌýIf the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the exercise of the Incentive Option on or before the later of (i) the date that is two years after the date of grant of the Incentive Option, and (ii) the date that is one (1) year after the transfer of the Shares to the Optionee upon exercise of the Incentive Option, the Optionee shall make the information regarding such disposition available to the Company upon the Company’s request.
Notice of Disqualifying Disposition.ÌýThe Optionee shall promptly notify the Company if the Optionee disposes of any of the Shares acquired pursuant to the Option within one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the Grant Date of Option. Until such time as the Optionee disposes of such Shares in a manner consistent with the provisions of this Agreement, unless otherwise expressly authorized by the Company, the Optionee shall hold all Shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after the Grant Date of the Option. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to notify the Company of any such transfers. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.
Notice of Disqualifying Disposition.ÌýIf the Employee makes a disposition (as that term is defined in Code section 424(c)) of any shares of Common Stock acquired pursuant to this Option within two years of the Grant Date or within one year after the shares of Common Stock are transferred to the Employee, the Employee shall notify the Administrator of such disposition in writing within 30 days of the disposition.
Notice of Disqualifying Disposition.ÌýIn order to enable the Corporation to avail itself of any income tax deduction to which it may be entitled, the Holder shall notify the Corporation of his intent to dispose of any of the Shares purchased pursuant to this Incentive Stock Option within two (2) years from the date of the grant of the Incentive Stock Option and one (1) year from the date of exercise of the Incentive Stock Option. Promptly after such disposition the Holder shall notify the Corporation of the number of Shares disposed of, the dates of acquisition and disposition of such shares, and the consideration, if any, received on such disposition. If, in connection with any such disposition, the Corporation becomes liable for withholding taxes and has no amounts owing the Holder with which to discharge its withholding obligation, the Holder shall provide the Corporation with the amount needed to discharge the Corporation's withholding obligation and shall indemnify the Corporation against any penalties it may incur through its inability to apply amounts owing the Holder in discharge of its withholding obligations. Nothing in this Paragraph 14 shall give the Holder any right to dispose of the Shares in a manner that is inconsistent with any Paragraph of this Agreement, the Plan, or any stock transfer restriction agreement entered into by the Holder.