Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USAPolandPoland1. Securities law1.1 Offer of securities 1 : In accordance with the Prospectus Directive, the Polishlegislation provides an exemption from the obligation to prepare, to obtainapproval for, and to publish a prospectus in respect of an offer of securities toexisting or former directors or employees by their employer (or an affiliatedundertaking) which has its securities already admitted to trading on an EUregulated market. 2 3 Under this exemption, Polish legislation requires thepreparation of an information memorandum, which must be in Polish. 4 5There is also an exemption for offers where the total consideration under theoffer is less than €2.5 million (calculated over a period of 12 months). In the12345The Prospectus Directive was implemented into Polish law in October 2005.The Polish legislation contains a reference to accounting provisions in relation to the definition of anaffiliate undertaking. The definition contained in the accounting provisions is very broad, but will requirea detailed check each time an affiliate undertaking is proposing to offer securities to employees ordirectors in Poland.The view of the Polish Financial Supervisory Authority ("PFSA"') is that the offer of non-transferableoptions and the exercise of such options should be assessed as part of a single financial operation. Inaccordance with this view, when an offer of non-transferable share options is launched, there is asimultaneous announcement of an offering (the execution of which will be deferred) of the shareswhich the person will be entitled to acquire when the options are exercised. Therefore, the obligationto prepare an information memorandum applies (see footnote 4 below). Otherwise a prospectusshould be submitted for approval by the competent authority.In October 2005 the Minister of Finance published an ordinance specifying the requirements to besatisfied by the information memorandum, which should reflect some of the requirements set out for aprospectus in the Commission Regulation (EC) 809/2004. In particular, an information memorandumshould include the issuer's identification data (and indicate where additional information on the issuerand its corporate documents may be found), key details regarding the legal nature of the offeredsecurities, the date and place of the preparation of the information memorandum and the terms anddate of issue of the offered securities. The information memorandum does not need to be approved bythe PFSA.There is also a corresponding exemption concerning admission to trading on a regulated market,provided that shares of the same type as ones having been recently offered within the framework of anoffer to existing or former directors or employees, are already admitted to trading on the sameregulated market as that intended for the shares offered. If this is not the case and the issuer intendsto introduce its shares to trading on a regulated market, it may rely on another exemption which appliesif the offer consists of shares representing, over a period of 12 consecutive months, less than 10% ofthe issuer's shares of the same type admitted to trading on the same regulated market.UK/1729295/03 145 September 2010
Employee Share Plans in Europe and the USAPolandcase of this exemption, Polish legislation requires the preparation of aninformation memorandum, which must be in Polish. 6A further exemption is available in Poland if, under the strict interpretation ofPolish law, the offer is addressed to fewer than 100 individuals in each EU statein which the offer is being made. In this case, the offer is deemed not to be apublic offering and therefore there is no obligation to prepare either a prospectusor an information memorandum. Note that, in practice, the Polish Regulator willallow the application of the exemption if the offer is to fewer than 100 individualsin Poland, regardless of the number of offerees in other EU states. However,this is only an interpretation of the law by the Polish regulator and therefore maybe subject to change.1.2 Regulatory issues: If the share plan is directed at Polish employees, the plandocumentation addressed to them should be translated into Polish.1.3 Disclosure: If the securities offering requires the publication of a prospectus,the issue of shares must comply with detailed disclosure requirements.2. Exchange controlsThere are generally no exchange controls relevant to employee share plans inPoland, although there may be restrictions where transactions take place withcompanies or persons that are outside the EU, EEA or OECD. There are somenotification requirements for statistical purposes.3. Financial assistance3.1 Polish company: Generally, joint stock companies may not provide financialassistance, directly or indirectly, for the purchase or subscription of their ownshares. This does not apply to payments made to the company's employees oremployees of its subsidiaries to facilitate the purchase of or subscription for thecompany's shares if those payments are made from a special capital reserve ofthe company. 767Approval from the PFSA is not required for this memorandum. Please note however that in the case ofthe €2.5 million exemption there is no corresponding exemption concerning admission to trading on aregulated market. Thus, if the issuer plans to introduce shares to trading, it has to prepare aprospectus. The prospectus will not have to be prepared if another exemption were to simultaneouslyapply, i.e. the offer were to consist of shares representing, over a period of 12 consecutive months,less than 10% of the issuer's shares of the same type admitted to trading on the same regulatedmarket.This special capital reserve should previously have been created from accumulated profits.UK/1729295/03 146 September 2010
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Employee Share Plans in Europe and the USA - Sorainen

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