The Hunger Games: Surviving Global Administration Challenges Rachel Meyers, Product Communication Lead, E*TRADE Financial, US Sarah Papagelis, Sr. Corporate Paralegal, Sapient, US Jewon Wee, Managing Director, ISP Advisors, US
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Agenda Cultural Differences Tax & Regulatory Requirements Administrative Systems Country-specific Challenges
Stock Plans at Sapient Traded on NASDAQ Outstanding stock options, RSUs & RSAs Awards granted to directors & above Global RSU Agreement Country-specific riders As of today, 100 mobile participants Most travel between 2-3 countries
Cultural Differences
Introduction of equity compensation Grant type preferences Cultural expectation vs. company policy Perception and value Understanding stock Lack of investment experience
The knowledge gap Technology Online brokerage account Electronic delivery The IRS relationship W8-BEN
Cultural Expectations at Sapient US, UK, Canada, India, Germany, China, Singapore, HK, Australia, Switzerland, Sweden, Netherlands, Russia, Dubai... Special treatment -- what is unique? Expectation vs. requirement Education and communication is key
Tax & Regulatory Requirements
Country-specific tax withholding compliance Country-specific tax reporting compliance European Union Prospectus Directive ("EUPD") and other securities filing obligations
Acquired rights concerns Data privacy compliance Translation of plan and ancillary documentation into local language
Stock Plans at Sapient Compliance China filings Circular 35 filing only (no PRC Nationals) Singapore audit Australia audit/filing/statement UK ongoing audit(s) US audits (PWC, Deloitte and internal)
Administrative Systems
Broker system getting started Localization Language translation Currency conversion Account activation W-8 BEN assistance
Broker system Holding period requirements Repatriation of funds Tax-time information
Transfer Agent System Restricted Stock Awards Dividends SSN or W-8 BEN Information Tax form information Mailing address updates French-qualified RSUs (if held at Transfer Agent)
Administrative system Local tax rates Personal vs. general Mobility tracking Multiple tax rates by % Blended tax rate
Stock Plans at Sapient Administration Accurate database information Updated tax tables Accounting for mobility System limitations Global payroll reporting Tax apportionment process & communication Internal information sharing
Information Access Administrator Education Global requirements Systems abilities Participant Education Introduction to stock Plan parameters Tax treatment
Stock Plans at Sapient Participant Education Internal web-based portal Keeping it current Avoiding tax advice Email blasts Mobile participants making the extra effort M&A: joining a public company...now what?
Country-Specific Challenges
Australia - reporting Employee Share Scheme (ESS) statement To employee by July 14 Annual report to the ATO by August 14
Australia Key Challenges Compiling data for reporting Valuations at vest may be required Mobile employee tracking and reporting Individual s residency status and factors Grant date
Belgium stock option taxation For stock options grants made on or after January 10, 2003 the timing of taxation is driven by the date of the participant s acceptance of the offer 60 days
Belgium stock option taxation Acceptance within 60 days of offer employee taxed at grant Taxable benefit is equal to a valuation formula at grant
Belgium stock option taxation Acceptance after 60 days of offer Employee taxed at exercise. Taxable benefit is the difference between the fair market value of the shares and the exercise price paid by the employee.
China - State Administration of Foreign Exchange (SAFE) Remittances Initial Registration Circular 78 / Circular 7 registration Listed companies must register all stock plans offered to domestic employees
China - SAFE Remittances Repatriation Transaction proceeds must be remitted through the SAFE approved account before settlement into employee bank accounts
China - SAFE Remittances Ongoing Reporting All stock plans require quarterly reporting to SAFE
France qualified plans General Requirements Timing of Grant Limitations Pricing at Grant Limitations 20 trading day opening price prior to grant
France qualified plans Employer reporting Individual statement to employee and tax authorities by February 15 following exercise Where holding period is not met, additional individual statement at sale of shares Holding period requirements Typically handled by Transfer Agent or French Trustee
UK Form 42 Approved plans Employer reporting requirement All unapproved share plan activity (grant, vest, exercise, cancellation, etc.) on Form 42 in UK Pounds Sterling before July 7
Questions?
Rachel Meyers Phone: (678) 319-7297 Email: rachel.meyers@etrade.com Sarah Papagelis Phone: (310) 264-2290 Email: spapagelis@sapient.com Jewon Wee Phone: (781) 295-3252 Email: jewon.wee@ispadvisors.com