New employer (10%) and employee (2.5%) levies on stock options and free shares

Article 13 of the 2008 Social Security Financing Act creates two levies for health insurance. The employer levy (Article L. 137-13 of the Social Security Code), at 10%, is based, at the employer's choice, on the fair value of the options or on 25% of the value of the underlying shares, and on the value of free shares granted. The employee levy (Article L. 137-14), at 2.5%, applies to the gain on exercising options and the gain on acquiring free shares. They apply to grants made from 16 October 2007.