Common use of Failure to Qualify Clause in Contracts

Failure to Qualify. To the extent the Option should fail to qualify as an ISO under the federal tax laws, Optionee will recognize compensation income in connection with the acquisition of one or more Option Shares upon exercise of the Option, and Optionee must make appropriate arrangements for the satisfaction of all federal, state or local income tax withholding requirements and federal social security employee tax requirements applicable to such compensation income.