EMPLOYEE STOCK PURCHASE PLANS

EMPLOYEE STOCK PURCHASE PLANS: EMPLOYMENT

Labor Concerns

Employee rights to receive Plan benefits after termination are not restricted by law. However, as a precaution, standard consent and waiver provisions in the enrollment form are recommended.

Communications

The translation of Plan documents for employees is not legally required but is recommended. Government filings may generally be made in English.

EMPLOYEE STOCK PURCHASE PLANS: REGULATORY

Securities Compliance

There are no securities or prospectus requirements provided: (i) the offer of participation in the Plan and publicity about the purchase rights are confined to employees; (ii) employees cannot assign their purchase rights; and (iii) the offering documentation contains a prescribed form of wording to take advantage of available exemptions from the prospectus and investment advertisements regime.

Foreign Exchange

There are no foreign exchange restrictions.

Data Protection

The Personal Data (Privacy) Ordinance imposes registration, notification and consent requirements on the collection, holding, processing, use and transfer of personal data. Employee consent to the cross-border transfer of personal data is a recommended method of compliance with existing data privacy requirements.

EMPLOYEE STOCK PURCHASE PLANS: TAX

Employee Tax Treatment

An employee is likely to be taxed on receipt of any Stock to the extent that income that may arise therefrom would constitute income arising in or derived from Hong Kong. Tax is charged on the spread at a sliding rate of tax with a top rate of 17%, subject to a standard rate of 15% for employees whose income exceeds an annual level. There will be no tax charge at the time the Stock is sold.

Social Insurance Contributions

Benefits awarded under a Plan are not subject to contributions under the Mandatory Provident Fund Schemes Ordinance (being the sole form of social insurance- contribution payable in Hong Kong).

Tax Favored Program

None.

Withholding and Reporting

Withholding obligations do not apply. Annual reporting on the benefits received under a Plan is required alongside the employee salary statement. Employees are responsible for reporting the benefit deemed received by them as income on the receipt of any Stock and for paying the applicable tax.

Employer Tax Treatment

Generally, a corporation tax deduction is available if the Subsidiary reimburses the Issuer to the extent that the reimbursement is in respect of expenses incurred by the Issuer in the production of profits which are subject to Hong Kong profits tax. However, a deduction may not be available in all situations.

Tax Rates

Assuming that the employee pays the standard rate of salaries tax, tax on the benefit will be charged at a rate of 15%.

RESTRICTED STOCK and RSUs

RESTRICTED STOCK and RSUs: EMPLOYMENT

Labor Concerns

Employee rights to restricted stock and RSU plan benefits after termination are not restricted by law. However, as a precaution, standard consent and waiver provisions in the restricted stock or RSU agreement are recommended.

Communications

The translation of Plan documents for employees is not legally required but is recommended. Government filings may generally be made in English.

RESTRICTED STOCK and RSUs: REGULATORY

Securities Compliance

There are no securities or prospectus requirements provided that: (i) the offer of participation in the Plan and publicity about the offer are confined to employees; (ii) employees cannot assign their restricted stock or RSUs; and (iii) the offering documentation contains a prescribed form of wording to take advantage of available exemptions from the prospectus and investment advertisements regime.

Foreign Exchange

There are no foreign exchange restrictions.

Data Protection

The Personal Data (Privacy) Ordinance imposes registration, notification and consent requirements on the collection, holding, processing, use and transfer of personal data. Employee consent to the cross-border transfer of personal data is a recommended method of compliance with existing data privacy requirements.

RESTRICTED STOCK and RSUs: TAX

Employee Tax Treatment

The employee may be subject to tax upon the grant of a restricted stock award and is likely to be subject to tax upon the vesting of an RSU award, to the extent that, in either case, income that may arise therefrom would constitute income arising in or derived from Hong Kong. Tax is charged on the spread at a sliding rate of tax with a top rate of 17%, subject to a standard rate of 15% for employees whose income exceeds an annual level. There is no tax imposed at the time the Stock is sold.

Social Insurance Contributions

Benefits awarded under an RSU Plan are not subject to contributions under the Mandatory Provident Fund Schemes Ordinance (being the sole form of social insurance- contribution payable in Hong Kong).

Tax Favored Program

None.

Withholding and Reporting

Withholding obligations do not apply. Annual reporting of the benefits received under a restricted stock or RSU Plan is required alongside the employee salary statement. Employees are responsible for reporting the benefit deemed received by them as income on the vesting of an RSU award and for paying the applicable tax.

Employer Tax Treatment

Generally, a corporation tax deduction is available if the Subsidiary reimburses the Issuer to the extent that the reimbursement is in respect of expenses incurred by the Issuer on the production of profits which are subject to Hong Kong profits tax. However, a deduction may not be available in all situations.

Tax Rates

Assuming that the employee pays the standard rate of salaries tax, tax on the benefit will be charged at a rate of 15%.

STOCK OPTIONS PLANS

STOCK OPTIONS PLANS: EMPLOYMENT

Labor Concerns

Employee rights to receive Plan benefits after termination are not restricted by law. However, as a precaution, standard consent and waiver provisions in the enrollment form are recommended.

Communications

The translation of Plan documents for employees is not legally required but is recommended. Government filings may generally be made in English.

STOCK OPTIONS PLANS: REGULATORY

Securities Compliance

There are no securities or prospectus requirements provided: (i) the offer of participation in the Plan and publicity about the options are confined to employees; (ii) employees cannot assign their options; and (iii) the offering documentation must contain a prescribed form of wording to take advantage of available exemptions from the prospectus and investment advertisements regime.

Foreign Exchange

There are no foreign exchange restrictions.

Data Protection

The Personal Data (Privacy) Ordinance imposes registration, notification and consent requirements on the collection, holding, processing, use and transfer of personal data. Employee consent to the cross-border transfer of personal data is a recommended method of compliance with existing data privacy principles.

STOCK OPTIONS PLANS: TAX

Employee Tax Treatment

The employee may be subject to tax on exercise of an option to the extent that income that may arise therefrom would constitute income arising in or derived from Hong Kong. Tax is charged on the spread at a sliding rate of tax with a top rate of 17%, subject to a standard rate of 15% for employees whose income exceeds an annual level. There is no tax charge at the time the Stock is sold.

Social Insurance Contributions

Benefits awarded under a Plan are not subject to contributions under the Mandatory Provident Fund Schemes Ordinance (being the sole form of social insurance- contribution payable in Hong Kong).

Tax Favored Program

None.

Withholding and Reporting

Withholding obligations do not apply. Annual reporting of the benefits received under a Plan is required alongside the employee salary statement. Employees are responsible for reporting the income deemed received by them on the exercise of options and for paying the applicable tax.

Employer Tax Treatment

Generally, a corporation tax deduction is available if the Subsidiary reimburses the Issuer to the extent that the reimbursement is in respect of expenses incurred by the Issuer in the production of profits which are subject to Hong Kong profits tax. However, a deduction may not be available in all situations.

Tax Rates

Assuming that the employee pays the standard rate of salaries tax, tax on the benefit will be charged at a rate of 15%.