EMPLOYEE STOCK PURCHASE PLANS

EMPLOYEE STOCK PURCHASE PLANS: EMPLOYMENT

Labor Concerns

Employees may have rights to additional vesting or other benefits under the Plan in cases of involuntary termination. To reduce the risk of potential claims from employees that they have entitlements under the Plan, the Plan should expressly state that participation in the Plan is discretionary and that termination of employment will result in the loss of unvested Stock.

Communications

Additional Australia-specific employee communications may be necessary depending on the securities exemption relied upon (see below). Electronic execution of award agreements may be acceptable under certain conditions.

EMPLOYEE STOCK PURCHASE PLANS: REGULATORY

Securities Compliance

Certain disclosure requirements apply to companies that offer securities unless such an offer falls within: (i) a specific exemption under the Corporations Act; (ii) a Class Order exemption issued by the Australian Securities & Investments Commission (the "ASIC"); or (iii) an individual exemption granted by the ASIC. Filings and disclosure obligations may apply even if an exemption is relied upon. Additional requirements may attach to savings arrangements.

Foreign Exchange

There are no foreign exchange restrictions applicable to the Plan.

Data Protection

Employee consent for the processing and transfer of personal data is the recommended method of compliance with existing data privacy requirements. The Subsidiary and Issuer should implement safeguards so that (i) the use of the employees' tax identification information is restricted to tax purposes; and (ii) the use of other personal data is restricted to specific purposes disclosed in a written consent.

EMPLOYEE STOCK PURCHASE PLANS: TAX

Employee Tax Treatment

Where a real risk of forfeiture or an effective salary sacrifice arrangement exists, tax is payable at the deferred taxing point, which is broadly the earliest of: (i) there no longer being a real risk of forfeiture (for example when Stock is actually acquired, although this will not apply to effective salary sacrifice arrangements); (ii) there no longer being a restriction on disposal; (iii) cessation of employment; and (iv) the fifteenth anniversary of grant. Otherwise, tax is payable on the market value of the Stock purchased at the time of acquisition less the amount, if any, paid for the shares. If the Stock is sold within 30 days of the deferred taxing point, the sale date becomes the taxing point instead (and CGT will not apply in these circumstances). In any other circumstance, when the Stock is sold, a 50% discount on the capital gains (after allowing for capital losses) is available if the Stock has been held for 12 months or more.

Social Insurance Contributions

The benefits received under a purchase plan are subject to a Medicare levy and, in some cases, an additional surcharge.

Withholding and Reporting

There is no obligation on the employer to withhold tax, unless an employee has failed to supply a tax file number. Employers are required to report annually following the tax year in which a taxing point in respect of Stock occurs (the tax market value of the Stock must be reported, amongst other things).

Employer Tax Treatment

In all Australian States and Territories, the Plan benefit is included in the calculation of the employer's payroll tax. If the Subsidiary reimburses the Issuer for the cost of Plan benefits under a reimbursement agreement, the Subsidiary should generally be permitted to claim a tax deduction provided the reimbursement/recharge is structured correctly.

RESTRICTED STOCK and RSUs

RESTRICTED STOCK and RSUs: EMPLOYMENT

Labor Concerns

Employees may have rights to additional vesting or other benefits under a restricted stock or RSU plan in cases of involuntary termination. To reduce the risk of potential claims from employees that they have entitlements under the Plan, the Plan should expressly state that participation in the Plan is discretionary and that termination of employment will result in the loss of unvested rights/restricted stock.

Communications

Additional Australia-specific employee communications may be necessary depending on the securities exemption relied upon (see below). Electronic execution of award agreements may be acceptable under certain conditions.

RESTRICTED STOCK and RSUs: REGULATORY

Securities Compliance

Certain disclosure requirements apply to companies that offer securities unless such an offer falls within: (i) a specific exemption under the Corporations Act; (ii) a Class Order exemption issued by the Australian Securities & Investments Commission ("ASIC"); or (iii) an individual exemption granted by the ASIC. Filings and disclosure obligations may apply even if an exemption is relied upon.

Foreign Exchange

There are no foreign exchange restrictions applicable to restricted stock and RSU plans.

Data Protection

Employee consent for the processing and transfer of personal data is the recommended method of compliance with existing data privacy requirements. The Subsidiary and Issuer should implement safeguards so that (i) the use of the employees' tax identification information is restricted to tax purposes; and (ii) the use of other personal data is restricted to specific purposes disclosed in a written consent.

RESTRICTED STOCK and RSUs: TAX

Employee Tax Treatment

Where either (i) a real risk of forfeiture exists in relation to restricted stock, (ii) the RSUs are non-transferable and a compliant tax matrix is included in the Plan documents, or (iii) RSUs are provided under an effective salary sacrifice arrangement, then tax is payable at the deferred taxing point. The deferred taxing point is broadly the earliest of: (i) there no longer being a real risk of forfeiture (i.e vesting); (ii) there no longer being a restriction on disposal of the Stock (provided the restriction existed at grant); (iii) cessation of employment; and (iv) the fifteenth anniversary of grant. Otherwise, tax is payable on the market value of restricted stock or an RSU at the time of issue or grant. If the underlying Stock is sold within 30 days of the deferred taxing point, the sale date becomes the taxing point instead (and CGT does not apply in these circumstances). In any other circumstance, when the Stock is sold, a 50% discount on capital gains is available (after allowing for capital losses) if the Stock has been held for 12 months or more.

Social Insurance Contributions

The benefits received under a restricted stock or RSU plan are subject to a Medicare levy, and in some cases, an additional surcharge.

Withholding and Reporting

There is no obligation on the employer to withhold tax, unless an employee has failed to supply a tax file number. Employers are required to report annually following the tax year in which a taxing point occurs (the tax market value of RSUs must be reported, amongst other things).

Employer Tax Treatment

In all Australian States and Territories, the Plan benefit is included in the calculation of the employer's payroll tax. If the Subsidiary reimburses the Issuer for the cost of the Plan benefits pursuant to a written reimbursement agreement, the Subsidiary should generally be permitted to claim a tax deduction provided the reimbursement/recharge arrangement is structured correctly.

STOCK OPTIONS PLANS

STOCK OPTIONS PLANS: EMPLOYMENT

Labor Concerns

Employees may have rights to additional vesting or other benefits under the Plan in cases of involuntary termination. To reduce the risk of potential claims from employees that they have entitlements under the Plan, the Plan should expressly state that participation in the Plan is discretionary, and that termination of employment will result in the loss of unvested options.

Communications

Additional Australia-specific employee communications may be necessary depending on the securities exemption relied upon (see below). Electronic execution of award agreements may be acceptable under certain conditions.

STOCK OPTIONS PLANS: REGULATORY

Securities Compliance

Certain disclosure requirements apply to companies that offer securities unless such an offer falls within: (i) a specific exemption under the Corporations Act; (ii) a Class Order exemption issued by the Australian Securities & Investments Commission ("ASIC"); or (iii) an individual exemption granted by the ASIC. Filings and disclosure obligations may apply even if an exemption is relied upon.

Foreign Exchange

There are no foreign exchange restrictions applicable to option plans.

Data Protection

Employee consent for the processing and transfer of personal data is the recommended method of compliance with existing data privacy requirements. The Subsidiary and Issuer should implement safeguards so that (i) the use of the employees' tax identification information is restricted to tax purposes; and (ii) the use of other personal data is restricted to specific purposes disclosed in the written consent.

STOCK OPTIONS PLANS: TAX

Employee Tax Treatment

If a real risk of forfeiture exists, or the options are non-transferrable and a compliant tax matrix is included in the Plan documents, tax is payable at the deferred taxing point, which is broadly the earliest of: (i) when the options are exercised (ii) when there is no longer a restriction on disposal of the underlying shares (provided the restriction existed at grant of the options); (iii) cessation of employment; and (iv) the fifteenth anniversary of grant. Otherwise, tax is payable on the market value of an option at the time of grant. If tax is paid on grant, but the option subsequently lapses, the tax is generally recoverable. If the shares are sold within 30 days of the deferred taxing point, the sale date becomes the taxing point (and CGT does not apply in these circumstances). In any other circumstance, when the Stock is sold, a 50% discount on capital gains (after allowing for capital losses) is available if the Stock has been held for 12 months or more.

Social Insurance Contributions

The benefits received under option plans are subject to a Medicare levy and, in some cases, an additional surcharge.

Withholding and Reporting

There is no obligation on the employer to withhold tax, unless an employee has failed to supply a tax file number. Employers are required to report annually following the tax year in which a taxing point in respect of an employee's options occurs (the tax market value of the options must be reported, amongst other things).

Employer Tax Treatment

In all Australian States and Territories, the Plan benefit is included in the calculation of the employer's payroll tax. If the Subsidiary reimburses the Issuer for the cost of Plan benefits pursuant to a written reimbursement agreement, the Subsidiary should generally be permitted to claim a tax deduction provided any reimbursement/recharge arrangement is structured correctly.