EMPLOYEE STOCK PURCHASE PLANS

EMPLOYEE STOCK PURCHASE PLANS: EMPLOYMENT

Labor Concerns

It is becoming more common for employees to claim they have entitlements under Plans. Standard waiver and consent provisions may be unenforceable. Payroll deductions for a purchase plan are prohibited under Mexican law, except under specific circumstances. If payroll deductions are used, special employee communications and enrollment forms should be prepared. Alternatively, the Plan may be amended to provide alternative means of making contributions.

Communications

Translation of Plan documents for employees is not required, but it is recommended. Government filings must be made in Spanish. Under certain circumstances, the electronic execution of enrollment forms may be acceptable.

EMPLOYEE STOCK PURCHASE PLANS: REGULATORY

Securities Compliance

In general terms, there are no applicable securities compliance requirements, provided that the offer of securities is a private offer. To qualify as a private offer, the offer must be made through a Plan applicable to employees or groups of employees of the Issuer or entities controlled by it, or entities that control such Issuer.

Foreign Exchange

There are no foreign exchange restrictions applicable to purchase plans.

Data Protection

An employer is obliged to inform an employee of the information that the employer receives and the purposes for which such information is being obtained (through a physical or electronic privacy notice). Transfer of personal data of the employee among entities controlled by the same entity (e.g., affiliates, subsidiaries, holding companies), or any other entity within the same group as the recipient of personal data that operates under the same internal processes and policies, is permitted and will not require the express consent of the employee. Conversely, financial information or sensitive information (i.e., such information of the owner that, if misused, could cause discrimination or pose a risk to the owner) may only be transferred with the owner's prior consent.

Data Protection Rules are not applicable to business cards (e.g. (i) surnames and last names; (ii) the functions performed or positions held; (iii) physical domicile; (iv) e-mail address; and (v) telephone and fax numbers).

EMPLOYEE STOCK PURCHASE PLANS: TAX

Employee Tax Treatment

Employees will be taxed on the spread at the time the purchase rights are exercised. The employees will be subject to tax at the time of sale on the difference between the sale proceeds and the acquisition price.

Any sale of Stock traded through the Mexican Stock Exchange, carried out by a person or a group of persons that directly or indirectly hold 10% or more of the Stock of an Issuer that, in a 24-month period sell 10% or more of the Stock of the relevant Issuer in one or more simultaneous or subsequent transactions, is not exempt from taxes. The tax exemption will also not apply where a person or persons having control of an Issuer, sell it through one or more simultaneous or subsequent transactions in a 24-month period.

Social Insurance Contributions

Benefits received under Plans may be subject to social security contributions. However, in most cases, the relatively low social security ceiling will have been exceeded through regular salary.

Tax Favored Program

None.

Withholding and Reporting

The Subsidiary may be required to withhold taxes and report the benefits received under the Plan

Employer Tax Treatment

A deduction may be permitted provided the cost of Plan benefits is reimbursed by the Subsidiary to the Issuer.

Tax Rates

Income tax is charged at rates of up to 35% on the difference between the market value of the securities at the time the purchase right vests, and the acquisition price established on the date the purchase right is granted.

A recharge of costs may trigger social security charges and a withholding obligation. The rates vary depending on a number of factors (including, without limitation, salary, subsidiary risk, and other benefits). In any event, in most cases, the relatively low social security ceiling will have been exceeded through regular salary, and thus, no additional withholdings or charges would be incurred by the Subsidiary.

Any gain made on the sale of shares is taxed at rates of up to 35%.

RESTRICTED STOCK and RSUs

RESTRICTED STOCK and RSUs: EMPLOYMENT

Labor Concerns

It is becoming more common for employees to claim they have entitlements under restricted stock or RSU plans. Standard waiver and consent provisions may be unenforceable.

Communications

Translation of Plan documents for employees is not required, but it is recommended. Government filings must be made in Spanish.

RESTRICTED STOCK and RSUs: REGULATORY

Securities Compliance

In general terms, there are no applicable securities compliance requirements, provided that the offer of restricted stock or RSUs is a private offer. To qualify as a private offer, the offer must be made through a Plan applicable to employees or groups of employees of the Issuer or entities controlled by it, or entities that control such Issuer.

Foreign Exchange

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

Data Protection

An employer is obliged to inform an employee of the information that the employer receives and the purposes for which such information is being obtained (through a physical or electronic privacy notice). Transfer of personal data of the employee among entities controlled by the same entity (e.g., affiliates, subsidiaries, holding companies), or any other entity within the same group as the recipient of personal data that operates under the same internal processes and policies, is permitted and will not require the express consent of the employee. Conversely, financial information or sensitive information (i.e., such information of the owner that, if misused, could cause discrimination or pose a risk to the owner) may only be transferred with the owner's prior consent.

Data Protection Rules are not applicable to business cards (e.g. (i) surnames and last names; (ii) the functions performed or positions held; (iii) physical domicile; (iv) e-mail address; and (v) telephone and fax numbers).

RESTRICTED STOCK and RSUs: TAX

Employee Tax Treatment

The employee will likely not be taxed when restricted stock is granted. However, since there are no specific rules pertaining to this issue, the Mexican tax authorities may subject the employee to tax on the value of the Stock when the restricted stock is granted. The employee may be subject to tax on the value of the Stock when an RSU award vests.

The employee is taxed upon the sale of the Stock. The amount taxed is likely to be the difference between the fair market value of the Stock at the time of sale and the fair market value at the time of vesting. However, since there are no specific rules pertaining to this issue, the Mexican Tax Authorities may tax the entire sale proceeds.

Any sale of Stock traded through the Mexican Stock Exchange, carried out by a person or a group of persons that directly or indirectly hold 10% or more of the Stock of an Issuer, and in a 24-month period such person or persons sell 10% or more of the Stock of the relevant Issuer in one or more simultaneous or subsequent transactions, is not exempt from taxes. The tax exemption will also not be applicable where a person or persons having control of an Issuer, sell it through one or more simultaneous or subsequent transactions in a 24-month period.

Social Insurance Contributions

Benefits received under Plans may be subject to social security contributions. However, in most cases, the relatively low social insurance ceiling will have been exceeded through regular salary.

Tax Favored Program

None.

Withholding and Reporting

The Subsidiary may be required to withhold taxes and to report the benefits received under the Plan.

Employer Tax Treatment

A deduction may be permitted provided the cost of the Plan is reimbursed by the Subsidiary to the Issuer.

Tax Rates

Income tax is charged at rates of up to 35% on the market value of the securities at the time the restricted stock / RSU vests less the price paid by the employee, if any, for the securities.

A recharge of costs may trigger social security charges and a withholding obligation. The rates vary depending on a number of factors (including, without limitation, salary, subsidiary risk, and other benefits). In any event, in most cases, the relatively low social security ceiling will have been exceeded through regular salary, and thus, no additional withholdings or charges would be incurred by the Subsidiary.

Any gain made on the sale of shares is taxed at rates of up to 35%.

STOCK OPTIONS PLANS

STOCK OPTIONS PLANS: EMPLOYMENT

Labor Concerns

It is becoming more common for employees to claim they have entitlements under Plans. Standard waiver and consent provisions may be unenforceable.

Communications

Translation of Plan documents for employees is not required, but it is recommended. Government filings must be made in Spanish. Under certain circumstances, the electronic execution of award agreements is acceptable.

STOCK OPTIONS PLANS: REGULATORY

Securities Compliance

In general terms, there are no applicable securities compliance requirements, provided that the offer of securities is a private offer. To qualify as a private offer, the offer must be made through a Plan applicable to employees or groups of employees of the Issuer or entities controlled by it, or entities that control such Issuer.

Foreign Exchange

There are no foreign exchange restrictions applicable to option plans.

Data Protection

An employer is obligated to inform an employee of the information that the employer receives and the purposes for which such information is being obtained (through a physical or electronic privacy notice). Transfer of personal data of the employee among entities controlled by the same entity (e.g., affiliates, subsidiaries, holding companies), or any other entity within the same group as the recipient of personal data that operates under the same internal processes and policies, is permitted and will not require the express consent of the employee. Conversely, financial information or sensitive information (i.e., such information of the owner that, if misused, could cause discrimination or pose a risk to the owner) may only be transferred with the owner's prior consent.

Data Protection Rules are not applicable to business cards (e.g. (i) surnames and last names; (ii) the functions performed or positions held; (iii) physical domicile; (iv) e-mail address; and (v) telephone and fax numbers).

STOCK OPTIONS PLANS: TAX

Employee Tax Treatment

It is not clear under Mexican law if the employee will be taxed on grant. Employees will be taxed on the spread at exercise. The employee will be subject to tax at the time of sale on the difference between the sale price and the exercise price.

If the underlying Stock is traded through the Mexican Stock Exchange, any profits derived from its sale may be exempt from Mexican taxes.

Any sale of Stock traded through the Mexican Stock Exchange, carried out by a person or a group of persons that directly or indirectly hold 10% or more of the Stock of an Issuer that, in a 24-month period sell 10% or more of the Stock of the relevant Issuer in one or more simultaneous or subsequent transactions, is not exempt from taxes. The tax exemption will also not apply where a person or persons having control of an Issuer, sell it through one or more simultaneous or subsequent transactions in a 24-month period.

Social Insurance Contributions

Benefits received under Plans may be subject to social security contributions. However, in most cases, the relatively low social security ceiling will have been exceeded through regular salary.

Tax Favored Program

None.

Withholding and Reporting

The Subsidiary may be required to withhold taxes and report the benefits received under the Plan.

Employer Tax Treatment

A deduction may be permitted provided the cost of Plan benefits is reimbursed by the Subsidiary to the Issuer.

Tax Rates

Income tax is charged at rates of up to 35% on the difference between the market value of the securities at the time the option vests, and the exercise price established on the date the option is granted.

A recharge of costs may trigger social security charges and a withholding obligation. The rates vary depending on a number of factors (including, without limitation, salary, subsidiary risk, and other benefits). In any event, in most cases, the relatively low social security ceiling will have been exceeded through regular salary, and thus, no additional withholdings or charges would be incurred by the Subsidiary.

Any gain made on the sale of shares is taxed at rates of up to 35%.