MDT » Topics » TAX CONSEQUENCES

This excerpt taken from the MDT 10-Q filed Mar 4, 2008.

TAX CONSEQUENCES

 

 

8.1.

To the extent permitted by Applicable laws, any tax consequences arising from the grant or exercise of any Award, from the payment for Shares covered thereby or from any other event or act (of the Company, and/or its Affiliates, and/or the Trustee or the Participant), hereunder, shall be borne solely by the Participant. The Company and/or its Affiliates and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Participants agrees to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Participant.

 

 

 

 

8.2.

The Company and/or the Trustee shall not be required to release any Share certificate to a Participant until all required payments have been fully made by the Participant.

 

 

 

 

8.3.

In accordance with the Income Tax Rules (Tax Benefits Upon Issues of Shares to Employees) 2003, the Grantee warrants and represents to the Company, the Trustee and the Israeli Income Tax Authorities that it agrees to the provisions of Section 102 of the Income Tax Ordinance shall apply to it and that it will not transfer the Option Shares nor any other shares received subsequently following any realization of rights, by a way of tax-exempt transfer or a transfer under sections 104 (a), 104 (b) or 97 (a) of the Income Tax Ordinance.



 

 

 

 

8.4.

The Company and the Trustee shall be entitled to apply to the Israeli Income Tax Authorities for the purpose of ascertaining the income tax liability of the Grantee with respect to the Option Shares.

 

 

 

 

8.5.

The Grantee acknowledges that, under the current law, if the date of termination of employment shall be prior to the second anniversary of the date of the issue of the Shares then (i) the tax benefits of Section 102 shall not apply (except in the opinion of the Israeli Income Tax Authorities the employment of the Grantee was ceased under special circumstances which were beyond its control) and (ii) the Grantee will be responsible to immediately settle on its own account all of the tax issues and liabilities that are related to the Options or the Option Shares.

 

 

 

 

8.6.

The Grantee further acknowledges that the income that may be earned in connection with the issue of the Option Shares, their transfer in the name of the Grantee or sale thereof shall not be taken into account in calculation of the entitlement of the Grantee to any social benefits. Such social benefits shall include, without limitation, national insurance, managers’ insurance, study funds, pension funds, and severance pay and vacation payments. In the event that the Company or any of its subsidiaries shall be obligated by applicable law to include social benefits as income or profits of the Grantee then the Grantee shall indemnify and hold harmless the Company and the Trustee for any cost that they may incur in this regards.

 

 

 

9.

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