2. International Hot Spots Bob Grayson International Hot Spots Bob Grayson, Lawyer Janet Cooper, Head of Employee Incentives Linklaters & Alliance Topic Summary: During this presentation a conceptual model will be introduced to identify key considerations in designing, operating, and managing stock/share plans around the world. After firmly establishing our conceptual framework we will discuss specific issues that may be encountered in operating plans around the world. We will discuss potentially troublesome stock plan issues in over a dozen countries and provide attendees with a balanced presentation of specific compliance regulations and real life practice.

3. International Hot Spots Bob Grayson ROBERT GRAYSON Bob is a senior solicitor in the Linklaters & Alliance employee incentives team. He qualified in 1989. Before specialising in employee share plans he worked for Linklaters in Hong Kong and Tokyo as an international finance lawyer. He has worked on all aspects of international share plans. Bob is heavily involved in the management of the Linklaters’ Internet based share plan service, BLUE FLAG ® ESP and also the other legal and tax databases used for employee incentives. The Linklaters & Alliance employee incentives team is one of the largest of any UK law firm which acts regularly for over 100 quoted companies. Telephone: (44-020) 7456 2590 Email: robert.grayson@linklaters.com JANET COOPER Janet has been a partner and head of the employee incentives team since 1991. She has been involved in all aspects of international employee and executive share plans, including design and implementation, and advising on the implications for share plans of corporate transactions like takeovers and demergers. She also advises on corporate governance issues. She has worked on innovative incentives for new technology businesses and led the team which developed Blue Flag ESP, the firm’s online legal database for employee share plans. She is a director of the Global Equity Organisation the Employee Share Ownership Centre, a committee member of the Share Schemes Lawyers Group and founder member of the Share Schemes Advanced Studies Group. She has published a book, “Directors’ Remuneration” with Tolley’s and has written many articles and spoken at conferences around the world. Telephone (44-20) 7456 3662 E-mail:janet.cooper@linklaters.com

4. International Hot Spots Bob Grayson Around the world… in 80 minutes 4

5. International Hot Spots Bob Grayson Global means global! 5

6. International Hot Spots Bob Grayson Around the world… in 80 minutes Planning the trip Preparing for the trip Hot spots  latest news  countries to watch  issues to watch  sense of adventure?  cool places! Snapshots! 6

7. International Hot Spots Bob Grayson Planning the trip Who are you going to go with? - get your party together  HR, Company Secretarial, Legal, Treasury  Legal advisers, bankers, communication designers, software, administration and benefit consultants 7

8. International Hot Spots Bob Grayson Planning the trip What vehicle will you use? Options Free Shares Depends on objectives budget } Share Purchases Cash awards Derivative based incentives Other? 8

9. International Hot Spots Bob Grayson Preparing for the trip Let’s get organised! 9

10. International Hot Spots Bob Grayson Preparing for the trip The success of all global plans depends on... EXPERT PROJECT MANAGEMENT 10

11. International Hot Spots Bob Grayson Preparing for the trip Need to know: timeframe cost what decisions need to be made what information is needed what internal consents/checks what external consents/checks 11

12. International Hot Spots Bob Grayson Preparing for the trip Need to manage Plan maturity (vesting, share dealing, cashless exercise facility) Plan maturity (vesting, share dealing, cashless exercise facility) Company event (rights issue/reorganisation) Company event (rights issue/reorganisation) Plan design Plan documentation Plan launch ? Legal feasibility: Country reports Home country legal requirements Legal feasibility: Country reports Home country legal requirements Plan rules and other documents Project manage legal checks and filings Project manage legal checks and filings Advice on “e-commerce” and other legal issues Advice on “e-commerce” and other legal issues Annual trawls Country reports Legal checks Country reports Legal checks Legal feasibility Legal checks and filings Legal feasibility Legal checks and filings 12

13. International Hot Spots Bob Grayson Preparing for the trip Get the guide book! 13

14. International Hot Spots Bob Grayson 14

15. International Hot Spots Bob Grayson 15

16. International Hot Spots Bob Grayson Preparing for the trip Any guide book - check it out useful manageable correct readily available covers your countries good value 16

17. International Hot Spots Bob Grayson Preparing for the trip Get the “visas” 17

18. International Hot Spots Bob Grayson Preparing for the trip Financially and Legally Undeveloped Countries No prohibitions on share offerings General prohibition on public offers General exemptions Specific exemption 18

19. International Hot Spots Bob Grayson Legal Risk Legal requirements Comply Risk Analysis  likelihood of enforcement  penalties 19

20. International Hot Spots Bob Grayson Exchange controls Outward fund flow  Savings  Domestic savings  No savings Foreign Share Ownership  Consent procedure 20

21. International Hot Spots Bob Grayson Beware of culturally hostile countries Ideology - communist or post communist Financial sophistication - relatively undeveloped Priorities - other pressing matters 21

22. International Hot Spots Bob Grayson Preparing for the trip Taking Stock Cover important countries Break the trip, phased launches Barriers in some countries 22

23. International Hot Spots Bob Grayson Preparing for the trip Take stock Appropriate vehicle: is it the right global plan design for all countries? Is it manageable  in budget  in timeframce  with assigned resources? Is everyone pulling their weight? So let’s get going 23

24. International Hot Spots Bob Grayson The Hot Spots latest news countries to watch issues to watch sense of adventure cool places! 24

25. International Hot Spots Bob Grayson The Hot Spots - Latest News India Recognise economic stimulus value Liberalisation  Exchange controls  Favourable tax 25

26. International Hot Spots Bob Grayson The Hot Spots - Latest News Korea - Tax Enforcement International revenue co-operation Perceived revenue source Legal risk increased Ensure compliance! 26

27. International Hot Spots Bob Grayson The Hot Spots - Latest News Italy - Unfortunate developments Old Regime  always minor filings New Regime  less than 200 - liberalised  more than 200 - prospectus 27

28. International Hot Spots Bob Grayson The Hot Spots - Latest News UK - NI Uncapped liability for employer  transfer  capping 28

29. International Hot Spots Bob Grayson The Hot Spots - Latest News Spain - Securities Laws Liberalisation  clearer definition of “non public”  higher numerical limit 29

30. International Hot Spots Bob Grayson The Hot Spots - Latest News Netherlands - Taxable moment Grant  theory Exercisable  possibility of cash Exercise (election)  when have money  maximise tax 30 Complexity!

31. International Hot Spots Bob Grayson The Hot Spots - Countries to watch UK - ASB proposals are options a company cost? who has the IASB and politician’s ears? 31

32. International Hot Spots Bob Grayson The Hot Spots - Countries to watch Ireland - Budget 2001 maintain tax haven status very beneficial taxation 32

33. International Hot Spots Bob Grayson The Hot Spots - Countries to watch Belgium - Tax on Grant odd one out surrounded by difference 33

34. International Hot Spots Bob Grayson The Hot Spots - Issues to watch Electronic Communications Legal regime is “behind the bus” Things which cannot be done electronically - wage deductions Enabling legislation Securities laws  incompatibility net and the law  gatekeeper provisions  self-certification 34

35. International Hot Spots Bob Grayson The Hot Spots - Issues to watch Tax Favourable Regimes Benefits  deliver maximum value  minimise cost  cultural attractions Costs  money  HR resource  ongoing complication 35

36. International Hot Spots Bob Grayson The Hot Spots - Issues to Watch European Union No coherent European policy  Securities laws  Taxation  Cultural issues  Employment/data protection/works councils Must be considered state by state 36

37. International Hot Spots Bob Grayson The Hot Spots - Issues to watch Canada and the United States Federalism is real!  Securities laws - California or Quebec  Language Must be considered state by state 37

38. International Hot Spots Bob Grayson The Hot Spots - Issues to Watch Data Protection issues No rules Consent Informed consent and right to correct Licensing 38

39. International Hot Spots Bob Grayson The Hot Spots - Sense of Adventure China Ideological barriers Undeveloped legal and financial system Strong bureaucracy and harsh penalties  General prohibition on share offers  No procedures  No exemptions 39

40. International Hot Spots Bob Grayson The Hot Spots - Sense of Adventure Canada Federal securities laws issues Tight banking laws Cultural language issues 40

41. International Hot Spots Bob Grayson The Hot Spots - Sense of Adventure Japan Securities issues depend on value and numbers Social Security depends on type of plan Plans using Japanese shares 41

42. International Hot Spots Bob Grayson The Hot Spots - Sense of Adventure United States Limited federal securities exemption State securities laws Range of local tax beneficial plans Cost! 42

43. International Hot Spots Bob Grayson The Hot Spots - Sense of Adventure Belgium Securities filings Translations Tax on grant 43

44. International Hot Spots Bob Grayson The Hot Spots - Cool Places! UK Securities exemptions Tax breaks Well developed infrastructure 44

45. International Hot Spots Bob Grayson The Hot Spots - Cool Places! Taiwan No securities law problems No tax No social security 45

46. International Hot Spots Bob Grayson The Hot Spots - Cool Places! Bermuda No securities law issues Virtually no tax Excellent legal and banking 46

47. International Hot Spots Bob Grayson Snapshots 47

48. International Hot Spots Bob Grayson Happy and safe travelling! 48