SEC Filings

10-12G
AMSURG CORP filed this Form 10-12G on 03/11/1997
Entire Document
 
<PAGE>   66
 
     Federal Income Tax Aspects of the 1997 Incentive Plan.  The following is a
brief summary of the federal income tax aspects of awards made under the 1997
Incentive Plan based upon the federal income tax laws in effect on the date
hereof. This summary is not intended to be exhaustive, and does not describe
state or local tax consequences.
 
     1. Incentive Stock Options.  No taxable income is realized by the
participant upon the grant or exercise of an ISO. If Class A Common Stock is
issued to a participant pursuant to the exercise of an ISO, and if no
disqualifying disposition of the shares is made by the participant within two
years of the date of grant or within one year after the transfer of the shares
to the participant, then: (a) upon the sale of the shares, any amount realized
in excess of the option price will be taxed to the participant as a long-term
capital gain, and any loss sustained will be a capital loss, and (b) no
deduction will be allowed to AmSurg for federal income tax purposes. The
exercise of an ISO will give rise to an item of tax preference that may result
in an alternative minimum tax liability for the participant unless the
participant makes a disqualifying disposition of the shares received upon
exercise.
 
     If Class A Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of the holding periods described above, then
generally: (a) the participant will realize ordinary income in the year of
disposition in an amount equal to the excess, if any, of the fair market value
of the shares at exercise (or, if less, the amount realized on the disposition
of the shares) over the option price paid for such shares, and (b) AmSurg will
be entitled to deduct any such recognized amount. Any further gain or loss
realized by the participant will be taxed as short-term or long-term capital
gain or loss, as the case may be, and will not result in any deduction by
AmSurg.
 
     Subject to certain exceptions for disability or death, if an ISO is
exercised more than three months following the termination of the participant's
employment, the option will generally be taxed as a non-qualified stock option.
 
     2. Non-Qualified Stock Options.  Except as noted below, with respect to
non-qualified stock options: (a) no income is realized by the participant at the
time the option is granted; (b) generally upon exercise of the option, the
participant realizes ordinary income in an amount equal to the difference
between the option price paid for the shares and the fair market value of the
shares on the date of exercise and AmSurg will be entitled to a tax deduction in
the same amount; and (c) at disposition, any appreciation (or depreciation)
after date of exercise is treated either as short-term or long-term capital gain
or loss, depending upon the length of time that the participant has held the
shares. See "Restricted Stock" for tax rules applicable where the spread value
of an option is settled in an award of restricted stock.
 
     3. SARs.  No income will be realized by a participant in connection with
the grant of an SAR. When the SAR is exercised, the participant will generally
be required to include as taxable ordinary income in the year of exercise an
amount equal to the amount of cash and the fair market value of any shares
received. AmSurg will be entitled to a deduction at the time and in the amount
included in the participant's income by reason of the exercise. If the
participant receives Class A Common Stock upon exercise of an SAR, the post-
exercise appreciation or depreciation will be treated in the same manner
discussed above under "Non-Qualified Stock Options."
 
     4. Restricted Stock.  A participant receiving restricted stock generally
will recognize ordinary income in the amount of the fair market value of the
restricted stock at the time the stock is no longer subject to forfeiture, less
the consideration paid for the stock. However, a participant may elect, under
Section 83(b) of the Code within 30 days of the grant of the stock, to recognize
taxable ordinary income on the date of grant equal to the excess of the fair
market value of the shares of restricted stock (determined without regard to the
restrictions) over the purchase price of the restricted stock. Thereafter, if
the shares are forfeited, the participant will be entitled to a deduction,
refund, or loss, for tax purposes only, in an amount equal to the purchase price
of the forfeited shares regardless of whether he made a Section 83(b) election.
With respect to the sale of shares after the forfeiture period has expired, the
holding period to determine whether the participant has long-term or short-term
capital gain or loss generally begins when the restriction period expires and
the tax basis for such shares will generally be based on the fair market value
of such shares on such date. However, if the participant makes an election under
Section 83(b), the holding period will commence on the
 
                                       59