Deposit of Grants Under Section 102 of the Tax Ordinance Urgent Reminder Deadline 5/11/2013

Grants After July 25, 2012

Within 45 days from the Board or Comp. Comity decision, notify the trustee on any new grants. Within 90 days from the grant, the Trustee should receive signed grant agreement or participant’s consent to a grant under the plan. Grants After July 25, 2012

Grants Prior to July 25, 2012

Within 90 days from the Board or Comp. Comity decision, notify the trustee on any new grants. If deposited after 90 days: (a) Request a pre-ruling from the ITA to effect a "Change of Track”. (b) Request a "New Grant Arrangement" by completing and submitting the form letter of notification to the ITA. Grants Prior to July 25, 2012

Alternative A Change of Track

Change of Track – main provisions (a)The company should submit a request to the ITA for the tax arrangement no later than November 5, (b)The two-years holding period will be deemed to have started from the date on which the trustee was notified of the details of the grant. Grants Prior to July 25, 2012

(c) For awards vested on the date of request – the employee will be subject to a linear tax rate, i.e. the income from the exercise and sale of the award will be split into two portions - one taxed as employment income, and the other as capital gain. The employment income part will be calculated as follows: Total gain X (No. days from grant till deposit – 90 days) No. of days from grant till sale of the shares Grants Prior to July 25, 2012

Change of Track – Example for Vested Options Grant Date – January 1, 2009 Date of Deposit with Trustee -June 1, 2009 Date of Exercise and Sale -January 1, 2014 Gain at Sale - USD 100,000 No. of Days between Grant till Deposit – 151 days No. of Days of delay – = 61 days No. of Days between Grant till Sale - 1,826 days Grants Prior to July 25, 2012

Change of Track – Example for Vested Options Employment Income – USD 100,000 X 61/1826 = USD 3,340 (approx. 3.3%) Capital Gain – USD 100,000 – USD 3,340 = 96,660 Grants Prior to July 25, 2012

Alternative B New Grant Arrangement

New Grant Arrangement – main provisions (a)The company should submit a notice (not request for ruling) to the ITA no later than November 5, (b)The two-years holding period will be deemed to have started from the date of submission to the ITA. (c)In case of M&A within 90 days from submission – grants will be subject to Employment Income tax rates. Grants Prior to July 25, 2012

In conclusion, if there were grants deposited with the trustee following the 90 day period, please consult with your advisors ASAP. Trustee should confirm such deposits were made and at what time. Grants Prior to July 25, 2012

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