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This excerpt taken from the MDT DEF 14A filed Jul 17, 2009. Federal Income
Tax Consequences
The following is a summary of certain U.S. federal income
tax consequences of awards we may make under the Stock Award and
Incentive Plan. The discussion is general in nature; we have not
taken into account a number of considerations which may apply in
light of the circumstances of a particular participant. The
income tax consequences under applicable state and local tax
laws may not be the same as under U.S. federal income tax
laws.
Non-Qualified Stock Options. The participant
will not recognize taxable income at the time of a grant of a
non-qualified stock option, and we will not be entitled to a tax
deduction at that time. A participant will recognize
compensation taxable as ordinary income (and be subject to
income tax withholding) upon exercise of a nonqualified stock
option; the recognized compensation will be equal to the excess
of the fair market value of the shares purchased over their
exercise price. We generally will be entitled to a corresponding
deduction upon exercise of a nonqualified stock option.
Incentive Stock Options. The participant will
not recognize taxable income at the time of a grant of an
incentive stock option. The participant will also not recognize
taxable income (except for purposes of the alternative minimum
tax) upon exercise of an incentive stock option.
If the shares acquired by exercise of an incentive stock option
are held for the longer of (1) two years from the date the
option was granted and (2) one year from the date the
shares were purchased, any gain or loss arising from disposition
of those shares, based on the excess of the amount realized upon
the disposition over the original exercise price, will be taxed
as a long term capital gain or loss, and we will not be entitled
to any deduction. If, however, the shares acquired are not held
for the periods described above, then in the year of disposition
the recipient will recognize compensation taxable as ordinary
income equal to the excess of the fair market value of such
shares on the date the stock is substantially vested less the
exercise price. We generally will be entitled to a corresponding
deduction at that time. The excess of any amount realized in the
disposition over the fair market value of the stock on the
exercise date will be treated as a capital gain. If the amount
realized upon disposition of the stock is less than the value at
exercise, the amount the recipient will recognize as ordinary
income will be equal to the fair market value of the stock at
the date of exercise less the exercise price of the stock.
Stock Appreciation Rights. The recipient will
not recognize taxable income at the time of a grant of a stock
appreciation right, and we will not be entitled to a tax
deduction at that time. Upon exercise, however, the recipient
will recognize compensation taxable as ordinary income (and
subject to income tax withholding) equal to the fair market
value of any shares delivered and the amount of cash paid by us
in settlement of the rights, and we generally will be entitled
to a corresponding deduction at that time.
Table of Contents
Restricted Stock. The recipient of restricted
stock will not recognize taxable income at the time of a grant
of shares of restricted stock, and we will not be entitled to a
tax deduction at such time, unless the participant makes an
election under Section 83(b) of the Internal Revenue Code
to be taxed at that time. If that election is made, the
participant will recognize compensation taxable as ordinary
income (and subject to income tax withholding) at the time of
the grant, equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. If such election is not made, the participant will
recognize compensation taxable as ordinary income (and subject
to income tax withholding) at the time the restrictions lapse,
in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. We will generally be entitled to a corresponding
deduction at the time the ordinary income is recognized by the
recipient, except to the extent that the deduction limits of
Section 162(m) apply.
In addition, a participant receiving dividends with respect to
restricted stock for which the above-described election has not
been made, and prior to the time the restrictions lapse, will
recognize compensation taxable as ordinary income (and subject
to income tax withholding) rather than dividend income. We will
generally be entitled to a corresponding deduction, except to
the extent that the deduction limits of Section 162(m)
apply.
Restricted Stock Units. The recipient will not
recognize taxable income at the time of a grant of a restricted
stock unit, and we will not be entitled to a tax deduction at
that time. The recipient will recognize compensation taxable as
ordinary income (and subject to income tax withholding),
however, at the time of the settlement of the award, equal to
the fair market value of any shares delivered and the amount of
cash paid by us. We will be entitled to a corresponding
deduction, except to the extent that the deduction limits of
Section 162(m) apply.
Unrestricted Stock. The recipient of
unrestricted stock, and of restricted stock subject only to
restrictions on transferability, will recognize compensation
taxable as ordinary income (and subject to income tax
withholding) at the time of the grant, equal to the excess of
the fair market value of the shares at such time over the
amount, if any, paid for such shares. We will generally be
entitled to a corresponding deduction at that time, except to
the extent that the deduction limits of Section 162(m)
apply.
The foregoing general tax discussion is intended for the
information of our shareholders considering how to vote with
respect to this proposal, and not as tax guidance to
participants in the Stock Award and Incentive Plan. We strongly
urge participants to consult their own tax advisors regarding
the federal, state, local, foreign, and other tax consequences
of participating in the Stock Award and Incentive Plan.
Table of Contents
This excerpt taken from the MDT DEF 14A filed Jul 18, 2008. Federal Income
Tax Consequences
The following is a summary of certain U.S. federal income
tax consequences of awards we may make under the Stock Award and
Incentive Plan. The discussion is general in nature; we have not
taken into account a number of considerations which may apply in
light of the circumstances of a particular participant. The
income tax consequences under applicable state and local tax
laws may not be the same as under U.S. federal income tax
laws.
Non-Qualified Stock Options. The participant
will not recognize taxable income at the time of a grant of a
non-qualified stock option, and we will not be entitled to a tax
deduction at that time. A participant will recognize
compensation taxable as ordinary income (and be subject to
income tax withholding) upon exercise of a nonqualified stock
option; the recognized compensation will be equal to the excess
of the fair market value of the shares purchased over their
exercise price. We generally will be entitled to a corresponding
deduction upon exercise of a nonqualified stock option.
Incentive Stock Options. The participant will
not recognize taxable income at the time of a grant of an
incentive stock option. The participant will also not recognize
taxable income (except for purposes of the alternative minimum
tax) upon exercise of an incentive stock option.
If the shares acquired by exercise of an incentive stock option
are held for the longer of (1) two years from the date the
option was granted and (2) one year from the date the
shares were purchased, any gain or loss arising from disposition
of those shares, based on the excess of the amount realized upon
the disposition over the original exercise price, will be taxed
as a long term capital gain or loss, and we will not be entitled
to any deduction. If, however, the shares acquired are not held
for the periods described above, then in the year of disposition
the recipient will recognize compensation taxable as ordinary
income, equal to the excess of the lesser of (1) the amount
realized upon such disposition and (2) the excess of the
fair market value of such shares on the date of exercise over
the exercise price. We generally will be entitled to a
corresponding deduction at that time. The excess of any amount
realized in the disposition over the fair market value of the
stock on the exercise date will be treated as a capital gain.
Table of Contents
Stock Appreciation Rights. The recipient will
not recognize taxable income at the time of a grant of a stock
appreciation right, and we will not be entitled to a tax
deduction at that time. Upon exercise, however, the recipient
will recognize compensation taxable as ordinary income (and
subject to income tax withholding) equal to the fair market
value of any shares delivered and the amount of cash paid by us
in settlement of the rights, and we generally will be entitled
to a corresponding deduction at that time.
Restricted Stock. The recipient of restricted
stock will not recognize taxable income at the time of a grant
of shares of restricted stock, and we will not be entitled to a
tax deduction at such time, unless the participant makes an
election under Section 83(b) of the Internal Revenue Code
to be taxed at that time. If that election is made, the
participant will recognize compensation taxable as ordinary
income (and subject to income tax withholding) at the time of
the grant, equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. If such election is not made, the participant will
recognize compensation taxable as ordinary income (and subject
to income tax withholding) at the time the restrictions lapse,
in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such
shares. We will generally be entitled to a corresponding
deduction at the time the ordinary income is recognized by the
recipient, except to the extent that the deduction limits of
Section 162(m) apply.
In addition, a participant receiving dividends with respect to
restricted stock for which the above-described election has not
been made, and prior to the time the restrictions lapse, will
recognize compensation taxable as ordinary income (and subject
to income tax withholding) rather than dividend income. We will
generally be entitled to a corresponding deduction, except to
the extent that the deduction limits of Section 162(m)
apply.
Restricted Stock Units. The recipient will not
recognize taxable income at the time of a grant of a restricted
stock unit, and we will not be entitled to a tax deduction at
that time. The recipient will recognize compensation taxable as
ordinary income (and subject to income tax withholding),
however, at the time of the settlement of the award, equal to
the fair market value of any shares delivered and the amount of
cash paid by us. We will be entitled to a corresponding
deduction, except to the extent that the deduction limits of
Section 162(m) apply.
Unrestricted Stock. The recipient of
unrestricted stock, and of restricted stock subject only to
restrictions on transferability, will recognize compensation
taxable as ordinary income (and subject to income tax
withholding) at the time of the grant, equal to the excess of
the fair market value of the shares at such time over the
amount, if any, paid for such shares. We will generally be
entitled to a corresponding deduction at that time, except to
the extent that the deduction limits of Section 162(m)
apply.
The foregoing general tax discussion is intended for the
information of our shareholders considering how to vote with
respect to this proposal, and not as tax guidance to
participants in the Stock Award and Incentive Plan. We strongly
urge participants to consult their own tax advisors regarding
the federal, state, local, foreign, and other tax consequences
of participating in the Stock Award and Incentive Plan.
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