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This excerpt taken from the NXTM DEF 14A filed Apr 24, 2009. Federal
Income Tax Consequences
The following is a summary of the federal income tax
consequences that generally apply to U.S. employees who
participate in the 2005 purchase plan as well as the tax
consequences to us. This summary assumes that all awards are
exempt from, or comply with, Section 409A of the Code
relating to non-qualified deferred compensation. Changes to the
tax laws could alter the tax consequences described below.
Tax Consequences to the Employee. Generally,
U.S. employees will not have income when they enroll in the
2005 purchase plan or when they purchase shares of common stock
at the end of an offering. Employees may have both ordinary
compensation income and a capital gain or loss when they sell
stock acquired under the plan. The amount and type of income and
loss will depend on when the employee sells his or her shares.
If shares of stock are sold at a profit (the sales proceeds
exceed the purchase price) more than two years after the
commencement of the offering during which the employee purchased
the stock and more than one year after the date that the
employee purchased the stock, then the employee will have
compensation income equal to the lesser of:
Any excess profit will be long-term capital gain. If the
employee sells the stock at a loss after satisfying these
waiting periods, then the loss will be a long-term capital loss.
If the employee sells the stock prior to satisfying these
waiting periods, then the employee will have engaged in a
disqualifying disposition. Upon a disqualifying disposition, the
employee will have compensation income equal to the value of the
stock on the day he or she purchased the stock less the purchase
price. The employee also will have a capital gain or loss equal
to the difference between his or her sales proceeds and the
value of the stock on the day he or she purchased the stock.
This capital gain or loss will be long-term if the employee has
held the stock for more than one year and otherwise will be
short-term.
Withholding. The amount that an employee
elects to have deducted from his or her base pay for the
purchase of stock under the 2005 purchase plan constitutes
compensation income and is subject to withholding
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for income, medicare and social security taxes, as applicable.
There is no withholding of income, medicare or social security
taxes upon the purchase of stock under the 2005 purchase plan or
upon the sale of stock acquired under the plan.
Tax Consequences to NxStage. There will be no
tax consequences to us except that we will be entitled to a
deduction when an employee has compensation income upon a
disqualifying disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the Code.
This excerpt taken from the NXTM DEF 14A filed Apr 29, 2008. Federal
Income Tax Consequences
The following is a summary of the federal income tax
consequences that generally apply to U.S. employees who
participate in the 2005 purchase plan as well as the tax
consequences to us. This summary assumes that all awards are
exempt from, or comply with, Section 409A of the Code
relating to non-qualified deferred compensation. Changes to the
tax laws could alter the tax consequences described below.
Tax Consequences to the Employee. Generally,
U.S. employees will not have income when they enroll in the
2005 purchase plan or when they purchase shares of common stock
at the end of an offering. Employees may have both ordinary
compensation income and a capital gain or loss when they sell
stock acquired under the plan. The amount and type of income and
loss will depend on when the employee sells his or her shares.
If shares of stock are sold at a profit (the sales proceeds
exceed the purchase price) more than two years after the
commencement of the offering during which the employee purchased
the stock and more than one year after the date that the
employee purchased the stock, at a profit, then the employee
will have compensation income equal to the lesser of:
Any excess profit will be long-term capital gain. If the
employee sells the stock at a loss after satisfying these
waiting periods, then the loss will be a long-term capital loss.
If the employee sells the stock prior to satisfying these
waiting periods, then the employee will have engaged in a
disqualifying disposition. Upon a disqualifying disposition, the
employee will have compensation income equal to the value of the
stock on the day he or she purchased the stock less the purchase
price. The employee also will have a capital gain or loss equal
to the difference between his or her sales proceeds and the
value of the stock on the day he or she purchased the stock.
This capital gain or loss will be long-term if the employee has
held the stock for more than one year and otherwise will be
short-term.
Withholding. The amount that an employee
elects to have deducted from his or her base pay for the
purchase of stock under the 2005 purchase plan constitutes
compensation income and is subject to withholding for income,
medicare and social security taxes, as applicable. There is no
withholding of income, medicare or social security taxes upon
the purchase of stock under the 2005 purchase plan or upon the
sale of stock acquired under the plan.
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Tax Consequences to NxStage. There will be no
tax consequences to us except that we will be entitled to a
deduction when an employee has compensation income upon a
disqualifying disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the Code.
This excerpt taken from the NXTM DEF 14A filed Apr 30, 2007. Federal
Income Tax Consequences
The following is a summary of the federal income tax
consequences that generally apply to U.S. employees who
participate in the 2005 purchase plan as well as the tax
consequences to us. Changes to the tax laws could alter the tax
consequences described below. This summary assumes that all
awards are exempt from, or comply with, section 409A of the
Code relating to nonqualified deferred compensation.
Tax Consequences to the Employee. Generally,
U.S. employees will not have income when they enroll in the
2005 purchase plan or when they purchase shares of common stock
at the end of an offering. Employees may have both ordinary
compensation income and a capital gain or loss when they sell
stock acquired under the plan. The amount and type of income and
loss will depend on when the employee sells his or her shares.
If shares of stock are sold at a profit (the sales proceeds
exceed the purchase price) more than two years after the
commencement of the offering during which the employee purchased
the stock and more than one year after the date that the
employee purchased the stock, then the employee will have
compensation income equal to the lesser of:
Any excess profit will be long-term capital
gain. If the employee sells the stock at a loss
after satisfying these waiting periods, then the loss will be a
long-term capital loss.
If the employee sells the stock prior to satisfying these
waiting periods, then the employee will have engaged in a
disqualifying disposition. Upon a disqualifying disposition, the
employee will have compensation income equal to the value of the
stock on the day he or she purchased the stock less the purchase
price. The employee also will have a capital gain or loss equal
to the difference between his or her sales proceeds and the
value of the stock on the day he or she purchased the stock.
This capital gain or loss will be long-term if the employee has
held the stock for more than one year and otherwise will be
short-term.
Withholding. The amount that an employee
elects to have deducted from his or her base pay for the
purchase of stock under the 2005 purchase plan constitutes
compensation income and is subject to withholding for income,
medicare and social security taxes, as applicable. There is no
withholding of income, medicare or social security taxes upon
the purchase of stock under the 2005 purchase plan or upon the
sale of stock acquired under the plan.
Tax Consequences to NxStage. There will be no
tax consequences to us except that we will be entitled to a
deduction when an employee has compensation income upon a
disqualifying disposition. Any such deduction will be subject to
the limitations of Section 162(m) of the Code.
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