Presentation to IDC Conference 24 – 25 June 2012 The impact of various legislative frameworks on Effective and Sustainable Employee Ownership Model (US, UK and Australia examined)

2 Key Impacts on Employee Share Ownership  Securities and Corporations Law  Foreign Exchange requirements  Tax legislation  Market sentiment  Executive remuneration structures

3 The Regulatory Landscape

4 The Tax Landscape S423/ESPP implemented in 1964 ESOP implemented in 1974 SAYE/APSS implemented in 1980 CSOP implemented in 1984 EMI & SIP start APSS tax effectiveness removed Tax exempt and Tax deferred plans start 1995 Exemption raised to $1,000

5 Number of Plans in Operation

6 Participant Numbers By Country

7 Percentage of the Labour Force that Participate

8 The UK Landscape

9 UK Participation Numbers Per Plan

10 UK Trends in Plan Types

11 The US Landscape

12 US Current Trends

13 US Option Plans Changes Type of ChangePercentage of Companies Reduce the number of employees receiving options 48% Reduce the total number of options granted 44% Replace some/all options with restricted stock 33% Replace some/all options with performance based stock 19% Replace some/all options with long term cash incentives 13% Replace some/all options with stock appreciation rights5% Replace some/all options with shares1% Other change 8%

14 US ESPP Trends

15 ESPP Trends Type of ChangePercentage of Companies Eliminate the “look-back” feature26% Reduce the discount on stock purchase24% Eliminate the plan entirely17% Other7%

16 The Australia Landscape

17 Australia – The Number of Plans that Companies Operate

18 Employee Plan Types Used in Australia

19 Executive Plan Types - Australia

20 Conclusions  The biggest impacts:  Employee taxation  Executive remuneration sentiment  Market sentiment, costs for a company  Securities law can be the killer

Discussion