Information Statements Must Be Provided by 01-31-08, to Employees & Former Employees Who Exercised Incentive Stock Options or Transferred Stock Acquired Pursuant to an Employee Stock Purchase Plan

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This is a reminder to public and private companies that grant incentive stock options (“ISOs”) or maintain an employee stock purchase plan (“ESPP”). Under IRS regulations, these companies must provide information statements no later than January 31, 2008, to any employee or former employee who either exercised an ISO during 2007 or transferred stock during 2007 that was previously

acquired pursuant to the ESPP. Companies that fail to provide such statements on a timely basis may be liable for penalties of $50 per statement, up to a maximum of $100,000 per year.

Content of Information Statements. The IRS has prescribed the required content (although not the format) of the information statements that must be provided to employees and former employees with respect to ISO exercises and transfers of ESPP stock. The required content of each statement differs depending on whether it relates to an ISO or an ESPP.

New Information Return Requirement. Companies that must provide statements to employees or former employees will also be required to provide generally the same information to the IRS with respect to exercises and transfers that occur beginning in 2008.

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