You will not be subject to tax when the performance-based restricted units are granted to you. Vesting
You will be subject to income tax and social insurance contributions (to the extent you have not exceeded the applicable contribution ceiling) at the end of the performance period when shares are released to you. You will be taxed on the fair market value of the shares on the date of release.
Sale of Shares
Please note the following information applies to shares acquired on or after January 1, 2011. The tax treatment upon the sale of shares acquired prior to this date is different and you should consult with your personal tax advisor if you have any questions about the sale of such shares. When you subsequently sell the shares that you acquired under the SIP, any capital gain (i.e., the difference between the sale price and the fair market value of the shares at the time of purchase) will be subject to capital gains tax at a flat rate of 25%.
Dividends
If you hold HP shares and HP declares a dividend on the shares, you will be subject to tax on dividends that you receive, provided you exceed the tax exemptions available for dividends and other forms of income not subject to wage tax withholding. If you exceed both of these exemptions, the dividends will be subject to tax in Austria at a flat rate of 25% or, upon application, at progressive tax rates. In addition, the dividends will be subject to U.S. federal income withholding tax. You may be entitled to an Austrian tax credit for the U.S. withholding taxes paid, provided certain conditions are met.
Withholding and Reporting
According to Austrian tax authorities, your employer is obliged to withhold and report income tax when the performance-based restricted units vest. It is your responsibility to pay and report any taxes due when you sell shares acquired under the SIP and if dividends are paid.
Social Security
According to Austrian Social Security authorities, your employer is obliged to withhold social security employee contributions (to the extent that you have not exceeded the applicable ceiling for social security contributions) on the fair market value of the shares released to you on the date that the shares are released.
Exchange Controls
If you hold shares obtained through the SIP outside of Austria (even if you hold them outside of Austria with an Austrian bank), you must submit a report to the Austrian National Bank using the form “Standmeldung/Wertpapiere”. An exemption applies if the value of the shares as of any given quarter does not meet or exceed €30,000,000, or as of December 31 does not meet or exceed €5,000,000. If the former threshold is met or exceeded, quarterly obligations are imposed; if the latter threshold is met or exceeded, annual reports must be given. The quarterly reporting date is as of the last day of the respective quarter; the deadline for filing the quarterly report is the 15th day of the month following the end of the respective quarter. The annual reporting date is as of December 31; the deadline for filing the annual report is January 31 of the following year.
The report should be filed at the following postal address: Österreichische Nationalbank
Büro für Devisenstatistik Postfach 61
1011 Wien
The forms can be obtained at the Austrian National Bank: Österreichische Nationalbank
Otto-Wagner-Platz 3 1090 Wien
Tel: +43 1 404 20-0 Fax: +43 1 404 20-94 00
When shares are sold there may be exchange control obligations if the cash received is held outside of Austria. If the transaction volume of your cash accounts abroad meets or exceeds €3,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the 15thday of the following month by filing the form “Meldungen SI-Forderungen und/oder SI-Verpflichtungen”.
Consumer Protection Notification
You are aware that you may be entitled to revoke your acceptance of this grant from HP (the “Agreement”) on the basis of the Austrian Consumer Protection Act according to the following conditions:
(i) The revocation must be made within one week of the day you previously accepted the Agreement.
(ii) The revocation must be in written form to be valid. It is sufficient if you return the Agreement to HP or HP’s representative with language that can be understood as your refusal to conclude or honor the Agreement. It is sufficient if the revocation is sent within the period discussed above.
STOCK APPRECIATION RIGHTS (Stock-Settled): Grant
Vesting
You will not be subject to tax when your SARs vest. Exercise
When you exercise your SARs, you will receive the number of shares that is obtained by dividing the excess of the fair market value of the exercised SARs on the date of exercise over the exercise price (i.e., the fair market value of the shares on the grant date) by the fair market value of a share on the date of exercise. You will be subject to income tax and social insurance contributions (to the extent you have not already exceeded the applicable contribution ceiling) on the fair market value of the shares delivered to you upon exercise.
Sale of Shares
Please note the following information applies to shares acquired on or after January 1, 2011. The tax treatment upon the sale of shares acquired prior to this date is different and you should consult with your personal tax advisor if you have any questions about the sale of such shares. When you subsequently sell the shares that you acquire under the SIP, any capital gain (i.e., the difference between the sale price and the fair market value of the shares at the time of exercise) will be subject to capital gains tax at a flat rate of 25%.
Dividends
If you hold HP shares and HP declares a dividend on the shares, you will be subject to tax on dividends that you receive, provided you exceed the tax exemptions available for dividends and other forms of income not subject to wage tax withholding. If you exceed both of these exemptions, the dividends will be subject to tax in Austria at a flat rate of 25% or, upon application, at progressive tax rates. In addition, the dividends will be subject to U.S. federal income withholding tax. You may be entitled to an Austrian tax credit for the U.S. withholding taxes paid, provided certain conditions are met.
Withholding and Reporting
According to Austrian tax authorities, your employer is obliged to withhold and report income tax when SARs are exercised under the SIP. It is your responsibility to report and pay any taxes due when you sell shares required under the SIP and if dividends are paid.
Social Security
According to Austrian Social Security authorities, your employer is obliged to withhold social security employee contributions (to the extent that you have not exceeded the applicable ceiling for social security contributions) when SARs are exercised under the SIP.
Exchange Controls
If you hold shares obtained through the SIP outside of Austria (even if you hold them outside of Austria with an Austrian bank), you must submit a report to the Austrian National Bank using the form “Standmeldung/Wertpapiere”. An exemption applies if the value of the shares as of any given quarter does not meet or exceed €30,000,000, or as of December 31 does not meet or exceed €5,000,000. If the former threshold is met or exceeded, quarterly obligations are imposed; if the latter threshold is met or exceeded, annual reports must be given. The quarterly reporting date is as of the last day of the respective quarter; the deadline for filing the quarterly
report is the 15th day of the month following the end of the respective quarter. The annual reporting date is as of December 31; the deadline for filing the annual report is January 31 of the following year.
The report should be filed at the following postal address: Österreichische Nationalbank
Büro für Devisenstatistik Postfach 61
1011 Wien
The forms can be obtained at the Austrian National Bank: Österreichische Nationalbank
Otto-Wagner-Platz 3 1090 Wien
Tel: +43 1 404 20-0 Fax: +43 1 404 20-94 00
When shares are sold there may be exchange control obligations if the cash received is held outside of Austria. If the transaction volume of your cash accounts abroad meets or exceeds €3,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the fifteenth day of the following month by filing the form “Meldungen SI-Forderungen und/oder SI-Verpflichtungen”.
Consumer Protection Notification
You are aware that you may be entitled to revoke your acceptance of this grant from HP (the “Agreement”) on the basis of the Austrian Consumer Protection Act according to the following conditions:
(iii) The revocation must be made within one week of the day you previously accepted the Agreement.
(iv) The revocation must be in written form to be valid. It is sufficient if you return the Agreement to HP or HP’s representative with language that can be understood as your refusal to conclude or honor the Agreement. It is sufficient if the revocation is sent within the period discussed above.
STOCK APPRECIATION RIGHTS (Cash-Settled): Grant
You will not be subject to tax when the SARs are granted to you. Vesting
You will not be subject to tax when your SARs vest. Exercise
When you exercise your SARs, you will receive a cash payment equal to the excess of the fair market value of the exercised SARs on the date of exercise over the exercise price (i.e., the fair market value of the shares on the grant date). You will be subject to income tax and social
insurance contributions (to the extent you have not already exceeded the applicable contribution ceiling) on the amount of the cash payment delivered to you upon exercise.
Withholding and Reporting
According to Austrian tax authorities, your employer is obliged to withhold and report income tax when SARs are exercised under the SIP.
Social Security
According to Austrian Social Security authorities, your employer is obliged to withhold social security employee contributions (to the extent that you have not exceeded the applicable ceiling for social security contributions) when SARs are exercised under the SIP.
Exchange Controls
If you hold cash obtained through the SIP outside of Austria, there may be exchange control obligations. If the transaction volume of your cash accounts abroad meets or exceeds €3,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the fifteenth day of the following month by filing the form “Meldungen SI-Forderungen und/oder SI-Verpflichtungen”.
Consumer Protection Notification
You are aware that you may be entitled to revoke your acceptance of this grant from HP (the “Agreement”) on the basis of the Austrian Consumer Protection Act according to the following conditions:
(v) The revocation must be made within one week of the day you previously accepted the Agreement.
(vi) The revocation must be in written form to be valid. It is sufficient if you return the Agreement to HP or HP’s representative with language that can be understood as your refusal to conclude or honor the Agreement. It is sufficient if the revocation is sent within the period discussed above.