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  • Restricted stock and RSUs

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to restricted stock or RSUs.

    Tax

    Employee

    The employee is taxed on restricted stock upon grant and on RSUs upon vesting (may include personal assets tax).

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5% on the gross sale price by non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon grant for restricted stock and upon vesting of RSUs.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer also is required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Labor

    Benefits received from restricted stock or RSUs may be considered part of the employment relationship and included in a severance payment if the awards are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued vesting and other rights with respect to his or her award. In order to reduce the risk of employee claims, the award agreement signed by an employee should provide, among other things, that vesting of restricted stock or RSUs ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Stock options

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to option plans.

    Tax

    Employee

    The employee is taxed on the spread upon exercise (including personal assets tax, if applicable). 

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or alternatively 13.5% on the gross sale price by non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon exercise.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer when an option is exercised.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer is also required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Labor

    Benefits received from an option may be considered part of the employment relationship and included in a severance payment if options are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued vesting and other rights with respect to his or her option. In order to reduce the risk of employee claims, the award agreement signed by an employee should provide, among other things, that vesting of an option ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Stock purchase rights

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to stock purchase rights.

    Tax

    Employee

    The employee is taxed on the spread upon purchase.

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5% on the gross sale price for non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon purchase.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer when the shares are purchased.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer also is required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment if purchase rights are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued participation in the plan. In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    In light of restrictions on payroll deductions, alternative arrangements may be necessary for contributions to the plan.

    Labor

    Not applicable.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Key contacts
    Guillermo Cabanellas
    Guillermo Cabanellas
    Senior Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Augusto Nicolás Mancinelli
    Augusto Nicolás Mancinelli
    Of Counsel DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Dean Fealk is the global contact for Global Equity.
    Dean Fealk is the global contact for Global Equity.
    [email protected] View bio

Stock purchase rights

Labor

Argentina

Not applicable.

Australia

Generally, payroll deductions must be held in a separate bank account.

Upon involuntary termination of employment, an employee may be entitled to continued participation and other rights with respect to his or her purchase right depending upon the terms of participation. In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation ceases upon termination of employment, and that the plan and any awards under it are discretionary.

Austria

Benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment if purchase rights are regularly granted to an employee. Upon termination of employment, an employee may be entitled to continued participation in the plan and other rights with respect to his or her purchase rights. In order to reduce the risk of claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary. In addition, anti-discrimination rules need to be considered when awarding purchase rights. If the Austrian employer has a works council, prior notice should be given to them before an offer is made.

Belgium

Payroll deductions should be deposited in a separate bank account in the name of the employees, or the purchase price should be paid by the employee, rather then be deducted by the employer from the employee's remuneration.

In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary and non-recurring. In addition, anti-discrimination rules need to be considered when awarding purchase rights.

The remark made above in relation to holiday pay on RSU's also applies in relation to holiday pay on stock purchase rights or stock granted for free.

Brazil

Benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment. Labor Courts tend to consider purchase rights as salary, especially when the employee does not participate in any risk of the transaction (eg, if the award is granted for free or with a very reduced cost). Upon involuntary termination of employment, an employee may assert that he or she is entitled to continued participation in the plan and other rights with respect to his or her purchase rights. In order to reduce the risk of claims, the offer documents signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

Canada

There is no "at will" employment in Canada. Generally, if an employee is terminated without just cause, the employee is entitled to reasonable notice of termination of employment at common law unless expressly limited to statutory or other minimums by contract, or pursuant to civil law in Quebec. Therefore, where an employee is offered stock purchase rights as a term and condition of employment, if the employee is later terminated without just cause, the employee may claim the benefit of the stock purchase rights over the reasonable notice period. This may give rise to an award of damages for the loss of the benefit. To avoid this and to reduce the risk of employee claims, employers should make clear in any employment documents, including contracts, policies and the applicable award plan, that an award of stock purchase rights is discretionary, and, among other things, that participation in any awards plan terminates upon termination of employment (subject to the statutory minimum notice period during which participation may  be required to continue or for which damages may otherwise be awarded). 

Chile

Offering purchase rights may trigger certain employer obligations and employee claims. For instance, benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment if such benefits are routinely offered. Upon involuntary termination of employment, an employee may assert that he or she is entitled to continued participation in the plan and other rights with respect to his or her purchase right. In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

China

The payment of wages is restricted to cash, and employers are prohibited from paying wages in the form of negotiable securities. Provided that purchase rights are not characterized as wages, this restriction should not be problematic. In addition to the concern about wages, benefits received from a purchase right may be considered part of the employment relationship, and may be included in a severance payment. Recent labor legislation may provide employees with greater rights to stock plan benefits. In order to reduce the risk of entitlement claims, the offer documents signed by an employee should provide, among other things, that the award of a purchase right is not employment compensation, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

Colombia

Not applicable for this jurisdiction.

Czech Republic

Plan benefits may be considered part of the employment relationship and included in a severance payment if purchase rights are repeatedly granted to an employee. In order to reduce the risk of employee entitlement claims, the offer document signed by an employee should provide, among other things, that the award of purchase rights is not employment compensation, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

Denmark

Genuine Stock Purchase Programs that entitles the employee to an instant Stock Purchase (no vesting period) are not covered by the Danish Stock Option Act or similar employee protective legislation. Such programs may in principle be entered under contract of freedom.

Before January 1, 2019

Stock Purchase Rights ie, rights to purchase shares in the future are normally regulated by the 2004 Danish Stock Option Act. According to the Act, an employee has unwaivable rights to granted Stock Options in the event that his or her employment is terminated by the company, except in the cases of misconduct. An employee may maintain the right to receive a proportionate share of the Stock Purchase Rights that the employee would have been entitled to, had he or she still been employed at the time of the allotment or at the end of the current financial year. If the Act applies, employers must provide their employees with a translated summary of their rights concerning the Stock Purchase Rights. In addition, anti-discrimination rules need to be considered when awarding the Stock Purchase Rights.

After January 1, 2019

The Danish Stock Option Act was amended in 2018 (applicable from 1 January 2019). The amendments entail that the good and bad leaver limitations no will longer apply allowing for the employer and the employee to freely decide on the terms of Stock Options programs in connection with a termination of the employment. The employer may therefore determine such terms to the effect that non-exercised Stock Options will lapse in connection with a termination of the employment regardless of the reasons for the termination of the employment, ie, also regardless of the employee being a "good leaver" according to the current rules.

The amendments also entail it in the award agreement can be agreed that the employer is entitled to repurchase awarded Stock Options at a "fair market value" when the employee leaves the employer.

Ecuador

Although it is not common, purchase rights may be considered part of the employment relationship, and may be included in a severance payment, if repeatedly granted to an employee.  In order to reduce the risk of claims, the offer document signed by an employee should provide, among other things, that the award of a purchase right is not employment compensation, that participation ceases upon termination of employment, and that the plan and any purchase rights under it are discretionary.

Egypt

Although it is not common, purchase rights may be considered part of the employment relationship and may be included in a severance payment if repeatedly granted to an employee. In order to reduce the risk of employee entitlement claims, the offer documents signed by an employee should provide, among other things, that the award of a purchase right is not employment compensation, that participation ceases upon termination of employment, and that the plan and any purchase rights under it are discretionary.

Finland

Purchase right benefits may be considered part of the employment relationship, and may be included in a severance payment, if repeatedly granted to an employee. In order to reduce the risk of employee entitlement claims, the offer document signed by an employee should provide, among other things, that the award of a purchase right is not employment compensation, that participation ceases upon termination of employment, and that the plan and any purchase rights under it are discretionary.  In addition, anti-discrimination rules need to be considered when awarding purchase rights.

France

Purchase rights may be considered part of the employment relationship, and may be included in a severance payment if repeatedly granted to an employee. In order to minimize the risk of employee entitlement claims, the offer documents signed by an employee should provide, among other things, that the award of a purchase right is not employment compensation, that participation ceases upon termination of employment, and that the plan, and any purchase rights under the plan, are discretionary. In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Germany

Payroll deductions should be deposited in a separate bank account held in trust for employees.

Purchase rights may be considered part of the employment relationship, and, depending on negotiations between the parties, may be included in a severance payment. However, please note that there are no mandatory severance payments in Germany. In order to avoid the fact that the purchase rights are considered part of the employment remuneration, we recommend that they are not granted by the German employer, but by a foreign company, in which case it is also possible to agree that the contract shall be governed by foreign law (eg, purchase rights being granted by a US parent company and a choice of law being US law). If German law governs the agreement, it will not be possible to grant the purchase rights on a discretionary basis. In addition, anti-discrimination rules need to be considered when awarding purchase rights. In light of German banking laws, which may be interpreted to pose restrictions on payroll deductions, alternative arrangements may be considered for contributions to the plan. Also, if German law applies and one exists, the German works council has to be notified in advance of the planned offering's terms and conditions as the works council has an enforceable co-determination right with respect to the way the purchase rights are granted. This can also be avoided if the purchase rights are being offered by a US parent company and the contract is governed by US law.

Greece

Purchase rights may be considered part of the employment relationship, and may be included in a severance payment if repeatedly granted to an employee. In order to reduce the risk of employee entitlement claims, the offer documents signed by an employee should provide, among other things, that the purchase right is not employment compensation, that participation ceases upon termination of employment, and that the plan and any awards under it are discretionary. In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Hong Kong

Payroll deductions are not permitted, except with the written request of the employee and approval of the Commissioner for Labor.

Benefits from exercise of stock purchase rights are generally considered as part of the employment relationship. They are normally counted towards wages and all related benefits of employees (including the Mandatory Provident Fund).

Hungary

To reduce the risk of claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

India

To reduce the risk of entitlement claims from stock purchase rights, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Benefits from stock purchase rights are shown separately from the usual income of the employee, as the same is received from the parent company. This split, when reflected, mitigates the risk of the stock purchase benefits forming a part of damages on unlawful termination, or being included in the calculation of severance or retirement payments.

Indonesia

Offering purchase rights may trigger certain employer obligations and employee claims. For instance, benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment, if such benefits are routinely offered. Upon involuntary termination of employment, an employee may assert that he or she is entitled to continued participation and other rights with respect to his or her purchase right. In order to reduce the risk of employee claims, the offer documents and enrollment forms signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

Ireland

Plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should be notified in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights
  • The plan is separate to the employee's employment

In addition, anti-discrimination rules need to be considered when awarding stock purchase rights.

Israel

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

The chances of an employee making a successful claim are also reduced if the award is contingent upon, for instance, the performance of the employee or the company and if the awards are not regularly granted.

Italy

Plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. However, a case by case analysis is recommended. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights. Further specific requirements are provided for, in case of stock purchase rights granted to certain categories of employees of banks, financial intermediaries and asset management companies.

Japan

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, employers should prepare documents concerning the plan separately from employment contracts and work rules.

Malaysia

Employment "at will" is not applicable in Malaysia. Generally, if an employee is terminated from employment, the employee has the right to make representations of unjust dismissal to the Industrial Relations Department and such cases are eventually heard by the Industrial Court. Where entitlement to stock purchase rights are incorporated as part of the employee's benefits in the employment contract, the employees would generally have a right to make claims for the value of the stock as part of the compensation to be awarded by the Industrial Court. As the Industrial Court of Malaysia has no extra-territorial jurisdiction, there may be difficulties for an employee to make such claims if the stocks are in a foreign parent company. 

In this regard, employers in Malaysia are advised to be cautious about various aspects when issuing stock options or rights to employees. Some of the more critical areas to take note of are:

  • Corresponding with employees via the correct entity. Where stock entitlements are in relation to a foreign based parent company, correspondences about entitlement should be between that foreign company and the employee. This is to ensure that the local employer is not seen as the entity that is making promises for the entitlement that would in turn render the claim enforceable against the local employer
  • Carving out the stock entitlement. The stock entitlement where possible should not be made part of the employment contract but granted through separate agreements or correspondences that are separate and distinct subject to the relevant stock entitlement documents
  • Making forfeiture rights clear. The plan documents for the stock entitlement should always make clear the parties' rights upon termination of employment. This can include forfeiture in the case of dismissal with cause, accelerated vesting upon retirement or termination without cause or even call options exercisable upon termination

Mexico

Although not common, plan benefits may be considered part of the employment relationship and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In light of restrictions on payroll deductions, alternative arrangements may be necessary for contributions to the plan.

Netherlands

In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.  In addition, anti-discrimination rules need to be considered when awarding purchase rights.  If the Dutch employer has a works council, it may be necessary to notify it prior to an award.  The approval of the works council may be needed to terminate a plan.

New Zealand

In order to reduce the risk of employee claims, the offering document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

It will be fact-dependent as to whether the benefit is deemed as "salary" for employment law reasons and/or "gross earnings" for calculating holiday pay. The benefit should not give rise to additional superannuation / KiwiSaver contribution obligations.

Norway

It is recommended that the conditions of the awards be included in a separate plan, rather than in the employment agreement. In such cases, it is less likely that the awards will be considered to be individual rights of the employee. The employer will have more flexibility to adopt changes. In order to reduce the risk of employee claims, the plan should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary. In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Philippines

In order to reduce the risk of employee claims, the offer document signed by employees should provide, among other things, that participation in the purchase plan ceases upon termination of employment, and that the plan, and any awards under it, are discretionary.

Poland

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Portugal

Plan benefits may be considered part of the employee's remuneration. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary and may be revoked at any time by the employer, without the need to present a justification
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Russia

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

If stock awards are provided by an affiliated company of a Russian employer, it is essential to ensure that the employment agreement entered into between such Russian company and its employee does not contain any references to the stock awards.

Saudi Arabia

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Singapore

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Approval from the Ministry of Manpower is required for payroll deductions.

Slovak Republic

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

South Africa

In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

South Korea

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Spain

Spanish labor courts have ruled favorably for employee claims for stock plan benefits. To reduce (not eliminate) the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Spanish labor courts have added that the benefit derived from the exercised options must be considered salary in cash. Due to the foregoing, the benefit (for the employee) derived from the exercised options must be included in the salary for the purpose of calculation of severance payments.

Sweden

Plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

Switzerland

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Taiwan

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Thailand

Generally, plan benefits will neither be considered part of the employment relationship, nor be included in the calculation of severance or retirement payments. However, to reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Turkey

There is a risk that the plan benefits may be considered part of the employment relationship and included in the calculation of severance payments. In order to reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the forfeiture of unvested rights and the repayment of accumulated funds

In addition, anti-discrimination rules need to be considered when awarding purchase rights.

United Kingdom

Plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights

In addition, anti-discrimination rules need to be considered when awarding purchase rights and drawing up plan rules.

Venezuela

Although not common, option benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of claims, employees should expressly agree in writing that:

  • Participation in the option plan is discretionary
  • Termination of employment will result in the loss of unvested rights

Vietnam

Although not common, plan benefits may be considered part of the employment relationship, and may be included in the calculation of severance or retirement payments. To reduce the risk of entitlement claims, employees should expressly agree in writing that:

  • Participation in the plan is discretionary
  • Termination of employment will result in the loss of unvested rights