I: Taxable income

I.-The net gain realised on the sale of securities subscribed for in exercise of warrants allocated under the conditions defined in II to III is taxed under the conditions laid down in Article 150-0 A and in 1 or 2 of Article 200 A.

By way of derogation from the provisions of the first paragraph, the aforementioned net gain is taxed under the conditions set out in article 150-0 A and at a rate of 30% when the beneficiary has been working or, where applicable, has held office in the company in which he has benefited from the allocation of the warrants for less than three years on the date of the sale. To assess whether this period has been respected, account is taken, for the beneficiaries mentioned in the first paragraph of II, of any period of activity or, where applicable, of any term of office held within a subsidiary, within the meaning of the second paragraph of II, and, for the beneficiaries mentioned in the same second paragraph, of any period of activity or, where applicable, of any term of office held within the parent company.

II.Joint stock companies may allocate non-transferable business creator share warrants issued under the conditions provided for in articles L. 228-91 and L. 228-92 of the French Commercial Code, to members of their salaried staff, to their managers subject to the employee tax regime and to members of their board of directors, their supervisory board or, in the case of simplified joint stock companies, any equivalent statutory body.

They may also allocate these warrants to members of the salaried staff, managers subject to the employee tax regime and members of the board of directors, the supervisory board or, in the case of simplified joint stock companies, any equivalent statutory body of companies in which they hold at least 75% of the capital or voting rights.

For the application of the first two paragraphs of this II, the companies mentioned in the first paragraph must comply with the conditions set out in 1 to 5. The subsidiaries mentioned in the second paragraph must comply with these same conditions with the exception of that provided for in 2.

1. The company must be liable for corporation tax in France;

2. At least 25% of the company's capital must be held directly and continuously by individuals or by legal entities that are themselves at least 75% directly held by individuals. For the purposes of determining this percentage, the holdings of venture capital companies, regional development companies and financial innovation companies are not taken into account provided that there is no arm's length relationship within the meaning of 12 of Article 39 between the company receiving the contribution and the latter companies. Similarly, this percentage does not take into account the holdings of venture capital mutual funds, specialised professional funds covered by article L. 214-37 of the Monetary and Financial Code in its version prior to Order no. 2013-676 of 25 July 2013 amending the legal framework for asset management, professional private equity funds, sociétés de libre partenariat, local investment funds or innovation investment funds. The same applies, under the same conditions, to holdings in structures equivalent to the companies or funds mentioned in the second and third sentences, established in another Member State of the European Union or in a State or territory that has concluded a tax treaty with France that contains an administrative assistance clause with a view to combating tax fraud or evasion;

3. The company has not been created as part of a merger, restructuring, expansion or takeover of pre-existing activities, unless it meets the conditions set out in I of article 39 quinquies H as it stood prior to the article 30 of finance law no. 2018-1317 of 28 December 2018 for 2019;

4. For companies whose securities are admitted to trading on a French or foreign financial instruments market operated by a market undertaking or an investment services provider other than a portfolio management company or any other similar foreign body, or are admitted to trading on such a market of a State party to the Agreement on the European Economic Area, the market capitalisation of the company, valued in accordance with procedures laid down by decree by the Conseil d'Etat, particularly in the case of an initial listing or a corporate restructuring operation, by reference to the average opening price over the sixty trading days preceding the day on which the warrants are issued, is less than €150 million;

5. The company has been registered in the Trade and Companies Register for less than fifteen years.

II bis.Notwithstanding the provisions of II:

1° When they no longer meet the conditions mentioned in II solely because the market capitalisation threshold of 150 million euros is exceeded, the companies concerned may, for a period of three years following the date on which the threshold is exceeded and subject to meeting all the other conditions mentioned above, continue to allocate warrants;

2° In the event of the death of the beneficiary, his heirs may exercise the warrants within six months of the death;

3° A company created as part of a merger, restructuring, expansion or takeover of pre-existing activities may allocate warrants, subject to the following conditions:

a) All the companies taking part in the transaction meet the conditions set out in 1 to 5 of II;

b) Compliance with the condition mentioned in 4 of II is assessed, following the transaction, by aggregating the capitalisation of all the companies resulting from the transaction that meet the conditions of this article...;

c) Compliance with the condition referred to in 5 of II is assessed, for the companies resulting from the transaction, by taking into account the date of registration of the oldest of the companies involved in the transaction;

4° In the event that a company allocates warrants to the persons mentioned in the second paragraph of II, compliance with the condition mentioned in 4 of the same II is assessed by aggregating the capitalisation of the allocating company and that of its subsidiaries whose employees received distributions from the allocating company over the last twelve months.

III.-The acquisition price of the shares subscribed to on exercise of the warrant is set on the day of allocation by the Extraordinary General Meeting, on the basis of the report of the Board of Directors or the Management Board and the special report of the Statutory Auditors, or, by delegation of the Extraordinary General Meeting, by the Board of Directors or the Management Board as the case may be. If, in the six months preceding the allocation of the warrant, the issuing company has carried out a capital increase by issuing securities conferring rights equivalent to those resulting from the exercise of the warrant, the price shall be at least equal to the issue price of the securities concerned at the time, less, where applicable, a discount corresponding to the loss in economic value of the security since the issue. Where the rights of the securities resulting from the exercise of the warrant are not at least equivalent to those of the securities issued at the time of such a capital increase, this issue price may also, in order to determine the acquisition price of the security subscribed to on exercise of the warrant, be reduced, where applicable, by a discount corresponding to this difference.

The Extraordinary General Meeting, which determines the period during which the warrants may be exercised, may delegate to the Board of Directors or the Management Board, as the case may be, the task of determining the list of beneficiaries of warrants to subscribe for business creators' shares. In this case, the Board of Directors or the Management Board shall indicate the names of the beneficiaries of the said warrants and the number of shares allocated to each of them.

III bis.I to III apply to warrants for business creator shares allocated, under the same conditions, by a company whose registered office is established in a Member State of the European Union or in a State or territory that has concluded a tax treaty with France containing an administrative assistance clause with a view to combating tax evasion or avoidance.

For the companies referred to in the first paragraph of I to III, the number of shares allocated to each beneficiary must be indicated. For the companies mentioned in the first paragraph of this III bis, the condition provided for in 1 of II is deemed to be met if the company is liable in the State or territory where its registered office is located for a tax equivalent to corporation tax.

IV.-A decree specifies the terms and conditions for the application of this article, in particular the reporting obligations incumbent on holders of warrants and issuing companies.