Memorandum on Stock Option plans
Social security contribution (ONSS/RSZ)

Social security contributions for salaried persons (employee 13.07%, employer 35%) are in principle assessed on the positive difference, if any, between the fair market value of the stock and the exercise price of the option ("discount") or any certain guaranteed benefit under the option agreement. The possible 13.07% employee's social charge is deductible for income tax purposes. Appropriate advice should be sought to identify whether all conditions to assess social security contributions on the discount or any certain guaranteed benefit are met.

There is no social security contribution due on the "taxable time value" of the option or upon the subsequent exercise of the option or sale of the shares except if a certain guaranteed benefit would then be granted.