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Global Stock Options Survey Bonn Schmitt Steichen Luxembourg CONTACT INFORMATION:

Alex Schmitt and Anne Morel Bonn Schmitt Steichen 44, rue de la Vallée L-2661 Luxembourg Email: [email protected], [email protected] Telephone: 352.45.58.58 1. Are there any corporate actions that need to be taken by the Committee or the shareholders to establish the plan? Yes, corporate authorizations, i.e. managers’ or directors’ resolutions (depending on the form of the company and its articles of associations) resolutions delegating the Committee to establish and implement the Plan. 2. Are there any requirements in your jurisdiction about the composition or authority of the Committee? No. 3. What does the Committee have to publicly disclose about its Plan-related decisions and when must those disclosures be made? There is no legal requirement on whether the Committee must disclose any Plan-related decisions. 4. Is a participant subject to taxation: on receipt of the option; on exercise; or otherwise?

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There is no specific legislation in Luxembourg, except a circular letter issued by the Tax administration under which a distinction between virtual options and tradable options is made. For potential options, there shall be no liability to income tax and social security contributions at grant or vesting while for tradable options, there shall be an income tax liability but no social security contributions will be due by the employee on the grant if the option is granted at a discount. 5. Does the tax treatment vary depending on where the Participant resides or habitually exercises his duties (i.e. outside your jurisdiction)? The tax treatment will depend on where the Participant habitually carries out his duties: indeed, all professional income received by a Luxembourg employee is subject to Luxembourg direct income tax. 6. Does the tax treatment vary depending on the type of option or specific Plan provisions concerning the option? See our answer under question 4: the tax treatment will depend on whether freely tradable options or virtual options have been granted to the Participant. 7. Is Company X entitled to claim a deduction from (or other reduction of) taxable income with respect to the option and, if so, when and how is this calculated? Company X will be entitled to deduct from its corporate profits the costs related to implementing and administering the Plan. The right to deduct extends also to the costs of sourcing the shares or options, provided they are intended for Company X employees. If costs are borne by a foreign entity such as the Parent, the costs will be tax-deductible in Luxembourg only to the extent the Parent has a permanent establishment or branch in Luxembourg to which these costs may be allocated. 8. Does the tax treatment under 7 vary depending on where the Participant resides or habitually exercises his duties (i.e. outside your jurisdiction?) No, it does not. 9. Are there special rules for significant shareholders (for example, more than 10% shareholders of the Company)? a) Every time a shareholder acquires or disposes of shares, where Luxembourg is the home Member State of Company X and those shares are admitted to trading on a regulated market in Luxembourg, so that the proportion of shares held by that shareholder reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 1/3rd, 50% or 2/3rd, he must notify Company X of the held proportion of voting rights. b) Shareholders’ meetings of Company X

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may be convened at the request of shareholders representing at least one-fifth of the capital of Company X.

10. What are the other principal tax considerations, if any, such as withholding for social insurance, employment taxes, unemployment taxes, etc., for Company X or its local subsidiary or branch office in your jurisdiction, and the participant? Company X as employer shall be legally required to withhold from the employee’s payroll check an amount corresponding to the tax and social security liabilities arising out of the granted taxable benefit. This obligation to withhold arises at the time of taxation: that is, at the time of vesting for tradable options, and at the time of exercise for virtual options. The level is set according to the taxation class to which the employee belongs, which is determined mainly by the number of dependents. The rate varies from 0% to 38,95%. 11. What needs to be done, if anything, under your local law so that Participants obtain the favorable tax treatment offered by your jurisdiction? Virtual options are those that are not freely negotiable or whose value is not directly available to the employee, and which are taxable only at their exercise. The assessable income is based on the difference in value between the prices paid by the employee to acquire the shares and the official listed price or estimated value of the shares at the time of exercise. If the acquired shares are subject to restrictions on disposal, the tax administration will discount the assessable income by 5% for each year during which the shares are restricted, without exceeding a total discount of 20%. 12. What securities law or other regulatory (or exchange) requirements are there, if any, such as: filing requirements; prospectus requirements; offering exemptions; size of offering limitations; and currency requirements? The obligation to publish a prospectus shall not apply to offers of securities allotted or to be allotted to existing or former directors or employees by their employer, provided that a document is made available containing information on the number and nature of securities and the reasons for and details of the offer. The granting of options to employees of an issuer or of the issuer’s group to subscribe to securities, is not, in principle to be considered as an offer to the public of securities and do not therefore entail any obligation to publish a prospectus as defined by law, as far as the options are not negotiable on the capital markets and are exclusively linked to the employment. 13. Is a cashless exercise permissible? Yes.

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14. Are there any rules in your jurisdiction that prohibit or discourage a foreign subsidiary of Company X from granting options to acquire shares of common stock of Company X to the subsidiary's executives? There are no provisions setting out who may or may not be granted options under stock option plans, provided the anti-discrimination rules are not breached and that the choice of participants in a plan is determined on an objective basis. 15. Are the rules addressed in this survey applied differently based on whether the multinational operates in a particular jurisdiction as a branch office or as a domestic subsidiary? If so, what are these differences? No. 16. Do executive employees in other jurisdictions need to be covered by a plan of the subsidiary or a plan separate from your Plan to comply with your jurisdiction's law? No, there is no legal requirement imposing that executive employees in other jurisdictions be covered by a plan of the subsidiary, or that a plan be implemented separately. 17. If known, please comment on the accounting issues which are relevant for this Plan. We do not deal with accounting issues. 18. List any other requirements of importance in your jurisdiction. There are no other requirements of importance in our jurisdiction. 19. Severance Risks: Will the value of granted options legally need to be included in severance calculations? Severance pay is payable to employees with seniority exceeding five years. It is based on the gross salary paid in the twelve months preceding the termination. Overtime compensation, regular bonuses, and extra pay are included in the remuneration for purposes of calculating the severance payment, but extraordinary bonuses are excluded. Accordingly, the benefits deriving from equity-based plans would be included when determining the severance payment only to the extent they had been granted in the twelve months preceding the termination of the employment contract, or constitute a vested right. 20. Acquired Rights: Will Plan participants become legally entitled to future grants or immediate vesting at termination of employment or service? Participation in the stock option plan does not become a vested right if the plan terms expressly states that the benefits are granted exclusively on a discretionary basis and that the employer may

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at any time decide to suspend, terminate or amend the plan without the employee’s consent. Under Luxembourg law and case-law, a vested right is either constituted by way of a written agreement or when the benefit is granted to the employee on a general, fixed and constant basis. 21. Data Privacy: Will Company X or the local subsidiary or branch office need to take any additional measures to adhere to local data privacy laws? As far as the processing of data relates exclusively (i) to personal data necessary for the administration of the salaries of employees, or (ii) to the administration of shareholders, debenture holders and partners, inasmuch as the processing covers solely the data necessary for such administration, the data related only to those persons, and the data is not communicated to any third party, Company X shall be exempted from the obligation to notify to the supervisory authority such a processing.