Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USAPortugalPortugal1. Securities law1.1 Offer of securities 1 : Although the offer of securities to the public generallyrequires the publication of a prospectus, 2 there is an exemption from thatrequirement where securities are offered to existing or former directors oremployees by their employer (or an affiliated company) which has securitieslisted on an EU regulated market, provided that a document is made availablecontaining information on the number and nature of the securities and thereasons for and details of the offer.There is also an exclusion from the prospectus requirements for an offer to fewerthan 100 non-qualified investors in Portugal (as this is not treated as a publicoffer), even if the offer is being made to more than 100 individuals in a differentEU state.1.2 Regulatory issues: There are no other regulatory issues which affect the offerof securities to employees.1.3 Disclosure: Where the securities are offered to fewer than 100 employeesthere are no disclosure requirements unless the offer is made by a Portuguese12The Prospectus Directive was implemented into Portuguese law in March 2006.Where an offer of securities qualifies as a public offer, a prospectus must be published. An offer will beclassed as a public offer where the offer is:• addressed to undefined addressees;• addressed to the existing shareholders of an "Open Company" (i.e. a public company);• publicly advertised or there is any solicitation of undefined addressees; or• addressed to at least 100 non-qualified investors resident or established in Portugal.Article 30 of the Securities Code lists the entities considered "qualified investors", which includesbanks, investment companies, insurance companies, investment and pensions funds and otherfinancial institutions, Governments, central banks etc.Any advertisement material relating to a public offer is subject to the prior approval of the SecuritiesRegulator (CMVM).Where the total consideration under the offer is less than €2.5 million (this limit is calculated over a 12month period), a prospectus is not required (even if the offer is made to more than 100 addressees).This is relevant where the shares are offered to employees for free as CMVM's view is that this fallswithin this exclusion.Public offers to acquire shares (i.e. a public takeover) are subject to a mandatory prior registrationrequirement with the CMVM.UK/1729295/03 151 September 2010
Employee Share Plans in Europe and the USAPortugalpublic company classified as an open company 3 or by a company whosesecurities are traded on a securities market, 4 in which case the Portuguesesecurities regulator (the CMVM) must be notified for statistical purposes only.2. Exchange controlsThere are no applicable exchange controls.3. Financial assistance3.1 Portuguese company: A company may not make loans or issue guarantees tomembers of its board of directors. Although under Portuguese law members ofthe board of directors are not considered employees of the company, it is usualfor members of the board of directors to be included in employee share plans.Subject to certain restrictions a Portuguese employer may, however, make loansor issue guarantees to enable its employees to acquire its own shares, or sharesin its parent company, provided that as a result of such loans, the net assetvalue of the company does not fall below its issued share capital plus its nondistributablereserves.3.2 Portuguese subsidiary of non-Portuguese company: The financialassistance position for a Portuguese subsidiary of a non-Portuguese parentcompany is the same as described in paragraph 3.1 above.3An "Open Company" is basically a public company, legally defined in article 13 of the Securities Codeas being a company:• incorporated through a public offer of subscription addressed specifically to entities resident orestablished in Portugal;• whose shares or other securities grant the right to the subscription or acquisition of shares whichhave been the object of a public offer of subscription addressed specifically to entities resident orestablished in Portugal;• issuer of shares or other securities granting the right to its subscription or acquisition, which are orhave been listed in a ruled market placed or operating in Portugal;• where more than 10% of its shares have been disposed in a public offer of sale or exchangeaddressed specifically to entities resident or established in Portugal;• resulting from the spin-off of an open company;• which acquires, by merger, all or part of the assets of an open company.4Although there are no formal rulings, it is understood that the CMVM's view is that disclosure is notrequired where a company's securities are listed in a market outside Portugal.UK/1729295/03 152 September 2010
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Employee Share Plans in Europe and the USA - Sorainen

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