Speaker: Adrian Moorhouse, Olympic Gold Medal Swimmer (UK)

Speaker: Carol Rutlen, Expat Edge, Inc. (US)
Speaker: Barbara Wallace, Oracle (US)
Speaker: Danyle Anderson, Tech Data (US)
Speaker: Denise Girdlestone, Bayer CropScience (Germany)

Complying with the withholding and reporting requirements for mobile employees with stock options is challenging. This session identifies the key challenges and panelists highlight their practical solutions. The best practices from the 2005 ExpatEdge Survey on Compliance Issues for Mobile Employees with Stock Options will be reviewed.

Speaker: Derek Steptoe, Vodafone (UK)
Speaker: Gráinne O'Connell, Vodafone (UK)

In 2004 Vodafone launched two new global share plans – a management share plan and an all-employee plan. The management plan incorporated the use of both performance shares and share options whilst the all-employee plan utilised restricted stock. Over 56,000 employees now participate in these share plans. Vodafone faced significant challenges when designing both plans which needed to meet both central and local requirements. This presentation will focus on the strategic design of each plan and the challenges faced when designing two plans, which are aimed at different employee populations. We will also review the merits of the alternative solutions that were considered but discounted and will discuss the reasons why the final designs were adopted.

Speaker: Robert Klein, Citigroup (US)
Speaker: Vishal Khosla, Citigroup (UK)
Speaker: Lucy Tavella, Citigroup (US)
Speaker: Mike Bussa, Ernst & Young (US)

Citigroup has successfully implemented Global Equity Programs worldwide. In order to optimize the tax and financial benefits from these programs, and with the assistance of Ernst & Young, Citigroup has instituted a process of cross charging its affiliates outside of the United States for equity awards granted to employees of these affiliates. In many countries, this process has translated into local corporate income tax deductions and positive financial benefits. The key players in implementing this process will join as a panel and share with workshop participants the energy, effort and methodology that can be harnessed to ensure a successful equity cross charge program. Participants will gain a clear understanding of: Financial benefits from claiming a corporate tax deduction outside of the United States; Requirements and possible obstacles to claiming these deductions; Citigroup’s process for evaluating the financial benefit, feasibility and implementation of specific chargeback arrangements; Country-specific case studies; Regulatory and administrative requirements.

Speaker: William Franklin, Pinsent Masons (UK)
Speaker: Anna Wordsworth, Pinsent Masons (UK)

This session will cover accounting, commercial, institutional shareholder and transfer pricing aspects. In particular it will explore the way in which various changes in the last few years, including the new share plan accounting regime and the application of transfer pricing to share plans, have altered the balance of advantage between issuing and buying shares, and how companies are addressing the maze of issues in a multinational context.

French Perspectives: Update on the New French Share Mechanisms. German Perspectives: (1) German participants in non-German Plans - Different tax treatment; Different benefits; Communication is key (2) German Plans and international implementation - German broad based share plans; German stock option plans; Corporate law considerations, Corporate governance considerations, Typical structures, German experience, Trends.

Panelists from both US and UK companies will describe their administrative challenges and solutions to provide an outsourced environment for their company sponsored share plans. This presentation will include practical guidance in how to prepare data for expensing.

Despite changing accounting rules and the complexity of administration, employee stock purchase plans remain a powerful tool for global companies to motivate their employees and provide them with a mechanism to accumulate wealth. Honeywell recently significantly expanded its global employee stock purchase plan into many new countries. Honeywell is a diversified technology and manufacturing leader of aerospace products and services; control technologies; automotive products; power generation systems; specialty chemicals and advanced materials with operations spanning the globe. The speakers will discuss the design and implementation of the plan from its conception to its launch and explain how the various tax, legal and human resource challenges around the world were addressed.

An increasing number of governments are auditing employee share plans for compliance with local tax laws. Many are taking advantage of international tax cooperation treaties and working with the tax authorities of country in which the issuing company is headquartered. At the same time, enactment of corporate governance legislation in the wake of well-publicized scandals has heightened corporate concerns with compliance on a number of fronts, including employee share plan compliance. For these reasons, ensuring that your global stock plan is in compliance with local tax, securities laws, exchange controls, employment law and data protection is more important than ever before. We will discuss what strategies have worked well for issuers and what they have experienced as the major obstacles to securing and maintaining global compliance. We will present the strategies that have and have not worked in overcoming these obstacles.  Examples are: performing due diligence by sampling vs. a complete audit; the discovery of fraud vs. negligence; in the midst of due diligence, the tax authorities inform the company of an upcoming audit; the company has retirees or expatriates who have escaped the compliance system; how to negotiate with government authorities to minimize penalties; what to do when the foreign subsidiary provides verbal assurances that it is in compliance and refuses to cooperate; designating a responsible party for managing global compliance; what to do when share plan compensation issued by the parent company is confidential to the foreign subsidiary; how to stay abreast of and respond to tax and legal changes; and developing processes for disseminating updated information.

Implementing international share plans is a daunting task for anyone new to the stock plan arena. Key steps must be followed to ensure successful implementation around the world. First, it is critical to gather facts and understand legal requirements: Where are your employees? What countries have the strictest regulatory environments? What filings are required? What are the tax withholding and reporting obligations and corporate tax issues? Once facts are gathered and compliance requirements are known, you must work with advisors to set priorities and plan filings. Meet with your stakeholders to review and plan filings well before they are due. (Several country-specific examples will be discussed.) Many countries have strict tax withholding and reporting rules. They may define the moment of taxation at grant, vest, exercise, or sale. Furthermore, tax-qualified plans, often straightforward to implement, may benefit the corporation as well as employees. As with filings, determine who will perform tax withholding and reporting functions and how the process will work. Well-structured communication efforts are also critical to successful execution. Implementing global share plans seems like an overwhelming task. With proper planning and advice, companies can ensure successful delivery of share plans to employees around the world.

The panel will discuss the prospectus and registration requirements applicable to employee stock programs in various countries, any available exemptions, the timing and cost of compliance, and the risks and costs of noncompliance. In addition, the session will cover the requirements in these countries regarding the use of broker/stock plan administrators acting as intermediaries between the offering company and the local country plan participants, and any direct or indirect liability for the local employer.

This presentation will examine the choices available to companies and present the arguments for and against: In house administration; Co-sourced administration; Outsourced administration.

Until recently, the ubiquitous use of stock options made competitive comparisons and evaluation of alternative forms of awards a relatively easy process.  Given the rapid and significant changes in plan design - triggered by changes in accounting rules, the corporate governance climate, and emerging "standards" from a variety of constituencies - the old metrics don't work any more.  Overhang, run rate, Black-Sholes values, and other metrics give an inaccurate view of award values, leading to misguided decisions.  As companies reconsider the use of stock options and assess alternative forms of share-based awards - SARs, restricted stock and RSUs, performance shares - and changes in the mix between equity and cash, the decision process requires a series of assumptions about the "value" and "cost" of each type of award.  Similarly, as firms attempt to understand their competitive position using survey data and their compliance with investor requirements, there are new challenges  given the dated methodologies being used.  This session reveals the emerging metrics and techniques being used by leading companies in understanding the value and cost of share-based awards in this new environment.

Critical Developments 2005: This session will focus in detail on the 10 most significant international developments that multinational issuers must deal with in 2005 and provide suggested strategies for dealing with each issue. Speakers will represent various regions and offer global perspective on these issues.

Practical tips for companies which extend their plans internationally but have limited budgets. Drawing on experience of smaller listed companies who may have relatively few people in some of their locations as well as of companies with sizable overseas populations. If possible involving a contribution from one or two of the companies involved

The impact of the new accounting standard, the Australian Stock Exchange's corporate governance principles, the Government's corporate law reform, and investor association requirements on the disclosure of executive remuneration in Australia are shaping the type and amount of compensation being provided.  What was once an art form in designing executive compensation is now becoming more of a science. Martin and Arthur will lead their audience through the global and Australian issues that are impacting executive compensation and draw on their practical experience using case studies to demonstrate what they see as the future of executive compensation in Australia, and the learnings for other countries. Martin, as Chairman of the EOG, and Arthur representing the NAB on that organisation have met with many of Australia’s most senior politicians and political advisers to advocate reform of the corporations law and tax law on employee share schemes. They are ideally placed to provide their insight on the future growth of equity compensation in Australia.

In the light of recent litigation trends with respect to equity compensation plans, our panel will provide practical suggestions to multinational employers regarding what should be specifically included in the language or specifically excluded from the language of their equity compensation plans for purposes of avoiding litigation in various jurisdictions. We intend to discuss terms and provisions of a typical equity compensation plan and link those terms and provisions with the interpretation problems which arise in different countries. In conjunction with this, we will provide our audience with a reasonable and practical way to draft those provisions around the problems with an emphasis on minimizing the impact of varied judicial rulings around the globe. Examples of litigatable situations we will address include those arising from (1) voluntary OR involuntary termination of employment, (2) amending or changing the terms of the equity compensation plan at a later point in time, and (3) terminating the equity compensation plan itself at a future point in time.

This topic examines the impact changes in the regulatory/governance regime have had on employee equity provision, both in terms of equity delivered and the way that plans are operated. Introduction: Overview of recent changes in the environment. This would include new regulations (such as s404 of the SEC regulations) and also changing practices (for example the rise in shareholder interest in employee equity plans, particularly senior employees) Key issues: This would develop the topic and seek to show how companies are now responding and able to show compliance. Case study: international share plans - A major potential area of difficulty is in the treatment of international share plans. We would work through a case study to identify what are the key issues which arise in operating such a plan and how companies are addressing them. Market review/ key trends: Analysis of public filings/annual reports/market data to identify what other major companies have done (if anything) in respect of employee equity plans and are considering doing. This would cover both discretionary and broad participation plans. Q&A

The EU Financial Services Action Plan will be in full flow by June 2005 which will impact on all aspects of corporate life throughout the 25 member states of Europe. Anyone operating share plans in Europe will be affected by many of the directives from the EU Prospectus Directive (which many of us know about) but also the Consultation Directive, Savings Directive, Takeovers Directive, MIF Directive (previously Investment Services), Transparency Directive, Market Abuse, Money Laundering. Companies, whether they are within the EU or outside, if they are operating their share plans in the EU will be affected. Similarly those offering services to companies operating share plans in the EU, whether they are EU providers or US or Swiss service providers will be affected by the regulations affecting their products. This session will: bring everyone up to speed with the directives and their effect on share plans (for both the company and the providers); outline the implementation of the directives in member states; identify any issues still to be resolved.

Join representatives from  PricewaterhouseCoopers (PwC) and Halifax to learn from recent survey results relevant to stock plan designers. Results from the 2005 Global Stock Plan Survey's  from  PwC (focusing on multinational companies around the world) will highlight recent design and compliance trends. Halifax will highlight how employee financial education and knowledge can affect increased participation and success in global stock plans.

This panel will discuss the steps taken in evaluating whether to continue using stock options on a global basis and how to determine which alternative equity vehicles are appropriate in today’s changing global equity plan landscape. The discussion will include the various issues encountered in the decision making process including tax, accounting, and financial implications while balancing the role of equity-based compensation in the company’s total compensation mix, including the twists presented by global stock offerings. The panel will discuss their experiences related to the accounting expense issues presented under FAS 123, cash flow, and dilution implications. The panel will share experiences, including barriers encountered in dealing with the compensation committee as well as shareholders, regulators, and other key stakeholders, and plan participants. In addition, the panel will discuss the practical issues and administrative considerations associated with implementing a new global equity compensation strategy. A shift in philosophy from a “one-size-fits-all” approach to a more “analytical” approach, (resulting from the level playing field option expensing promises), presents issuers and administrators with new and unique challenges. The panel will explore the role of technology, potential pitfalls and practical solutions related to this shifting paradigm.

Trust in companies is as low as it has been for many years. But there are ways to rebuild public confidence in what we do and how we do it. The solution is not yet more regulation (though it clearly has a part to play) but clearly articulated high standards inside and outside the business which stand up to scrutiny in the press and elsewhere. Easy to say. Hard to do. But very important.

Many companies are motivated to deliver compensation programs that are equivalent around-the globe. The increasing mobility of employees results in many share plan participants being resident in more than one country during the life of a share option or other equity award. For employers, this can lead to a number of practical problems. Two or more countries may seek to collect tax in relation to the award. Reporting and withholding obligations can arise in a country long after an employee has left the local jurisdiction. Exposure on incorrect withholding and reporting of share related events can result in significant costs to organizations. This course will introduce several mechanisms which can be used to address equity award plans within a mobile population. Three key points the attendees will learn from the presentation: Techniques for minimizing risk associated with individual and corporate reporting and withholding non-compliance; Trends in tracking global mobile employees and their equity-based compensation awards; and Using a variety of HRIS tools to effectively manage administration.

Roger Fairhead, Director Compensation and Benefits at The Rank Group Plc will present an insight into the trends in equity compensation, with particular focus on the responsibilities and challenges facing both the employer and employees. Michael Byron is a director of Abacus Global, and has work extensively in providing financial consulting services to senior executives and participants of maturing compensation plans. The presentation will be both practical and entertaining, and will focus on the developing trends in global executive compensation

For non-US companies, there are several important issues to consider before granting equity awards to employees in the US. These issues include: (i) designing equity awards to ensure that they provide value and incentivize US employees, (ii) complying with the federal and state securities registration requirements; and (iii) structuring the equity awards to provide the most favorable tax treatment possible. In this session, we will address these important issues and focus on:

• The types of equity awards that employees in the US expect;
• The benefits and consequences of the various equity awards in the US;
• The federal and state securities registration and disclosure requirements and available exemptions; and
• The US tax laws that will impact the structure of equity awards, including the American Jobs Creation Act.

Throughout this session, we will provide suggestions and guidance on how a non-US company should tailor its existing equity award plans in order to offer equity awards in the US.

The company is going through a major Corporate Action affecting three key areas. Firstly, they are de-listing in the US, which will allow them to change their name from mmo2 to O2 plc. Secondly, they are seeking authority to pay dividends in the future and thirdly, they are seeking to reduce the number of small shareholders on their register. It is the last part that has impacted the employee schemes. The company has put aside a sum of money to purchase shares back from shareholders who have received documentation allowing them to keep or sell their holdings. The company will buy back shares starting with the smallest shareholders who elect to sell, working up to an amount where they have used all the funds allocated. This impact on their employee plans where Stock Purchase plan participants have a right of sale, but subject to a tax liability on any proceeds. Options granted are mostly transferred to the new company but some have a right of exercise with a rollover default. This session will look at both the practical implications of implementing the changes as well as the challenges faced in communicating effectively with their staff.

This session will focus on the implementation of overseas equity plans in the UK and Ireland. In particular, consideration will be given to the direct implementation of a plan and also mirroring a non-UK/Irish plan with the Revenue approved plans in both the UK and Ireland (for example, the Inland Revenue approved Share Incentive Plan, sharesave options and executive options), including how to obtain and maintain approved status. Examples of instances where plans from jurisdictions (US, France, etc.) where equity participation is well developed will be used to identify aspects of UK/Irish plans which mirror those offered in the home jurisdiction (e.g. UK SIP to mirror US stock purchase plan or French FCPE "Classic" Plan). Securities and tax considerations for both participants and the employing company, including transfer pricing and corporation tax deductions, which arise on the implementation of a share plan in the UK and Ireland will be considered, and the session will also point to some of the pitfalls and dangers of maladministration from a tax point of view, for instance charges for late operation of tax withholding and penalties for late submission of share plan returns.

In order to successfully manage its Transferable and Non-Transferable Stock Option Plans, Nokia selected both a local and global service provider to manage its stock option plans. While Citigroup was selected as the single record-keeping agent for all of the stock option plans, the trade execution services for the Transferable Plans were split between two banks. Nordea was chosen as the preferred bank for Finnish participants in the Transferable plan and Citigroup was selected as the preferred agent for the Non-Finnish employee accounts. Nokia prepared a Mass Transfer campaign to encourage participants to move their Transferable Stock Option accounts into one of the two preferred banks. Nokia will discuss the challenges in communication in a complex data migration effort, while at the same time communicating its overall stock plan design changes. Citigroup and Nordea will also present to discuss their part in the plan.

Global attitudes to performance measures in equity plans. Discussion around performance metrics and performance conditions, Cultural and historic differences in UK, Europe, US and Australia - (are EPS and TSR all there is?)

Option expensing is now a fact rather than a topic for discussion.  The panelists will discuss various option pricing models, including Black Scholes and various forms of the binomial model as well as utility-based models. The presenters will also challenge conventional wisdom and debate whether a more sophisticated model will provide you with a lower expense and highlight empirical evidence from the largest study ever conducted on exercise behavior. In addition, the presenters will discuss the importance of developing accurate assumptions and how to work with your auditors to ensure your numbers are easily reviewed.

In February 2005, Roche launched a new global long term incentive program using stock-settled SARs and made awards to 2,000 employees in over 50 countries. Lisa Teverson of Roche, Alan Judes of Hewitt, Bacon and Woodrow and Aidan Langley of Deloitte & Touche will present a case study, explaining why Roche chose to use stock-settled SARs and discussing the practical issues that arose during implementation. The countries covered are: Argentina, Austria, Australia, Belgium, Brazil, Bulgaria, Canada, Chile, China (PRC), Colombia, Croatia, Czech Republic, Denmark, Ecuador, Germany, Finland, France, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Morocco, Mexico, Malaysia, Netherlands, Norway, New Zealand, Pakistan, Peru, Philippines, Poland, Portugal, Russian Federation, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, Taiwan, United Kingdom, United States, Uruguay and Venezuela.

Hot Spots: Review of key issues developing in various countries focusing on: Trends and securities laws; Trends in labor law issues (this is the hottest area of development, focusing on recent case law in the various countries which gives employees overriding rights on termination); Data privacy; Changes in tax treatment, for example withholding, social taxes, etc.

Topic: Charlie McCreevy, European Commissioner for Internal Market and Services (Ireland)

Session 1: Corporate Governance Development in the UK, US, and Europe

This session will focus on how corporate governance is developing in the UK, US and Europe, covering the recent changes and the impact in designing and implementing equity incentive plans. Includes a case study of the changes made by various multinational corporations to their executive compensation practices in response to recent corporate governance concerns.

This session will examine executive compensation levels and pay mix - current practices and prospective changes to practice in the light of: commercial pressures; accounting for options; investors views; performance vesting; trans- in differed compensation and pensions; problems of perceived value; public disclosure and shareholder votes. The session will consider the proximate factors which are reshaping the executive compensation landscape. It will also consider some of the longer term trends, governance issues and pay philosophy models. In particular, is equity causing dysfunctional executive behaviours or not?

Many issuing companies have not gone through the exercise of recharging share plan costs to their foreign affiliates.  Others have started the process, but have only implemented the recharge for their largest foreign subsidiaries.  We will discuss actual case studies that illustrate what works and what to avoid.  The "do's" and "don'ts" will include, amongst other issues: performing the cost/benefit analysis from the start; selecting an authoritative implementation team; what communications strategies work with local affiliates; heightened exposure to payroll tax and other regulations; practical difficulties of tracking expatriates; favorable impact on the financial statements and local income tax return; why companies need more than a recharge agreement to achieve their objectives; and what to do when an income tax deduction is not available.

Operating Global Share Plans - the real truth from 3 major European Financial Institutions chaired by KPMG. Includes a discussion with clients from financial services sector, real life applications, and operations of Global Share Plans. The objective of the session is to be issuer focused from the perspective of 3 different European issuers, with KPMG facilitating.

This session will focus on the regulatory, tax and legal rules affecting the operation of employee share plans in China, Hong Kong, and India.  This will include an overview of: Complexities in operating plans in China, in particular securities and exchange control requirements and how to overcome them; The impact of recent securities law developments in Hong Kong; Plan design trends in this region. There will also be a round-up of recent developments affecting the operation of employee share plans elsewhere in Asia, including Japan, Singapore and India. It will also include the latest equity compensation practice which is a pioneering move in the Indian IT Industry, elaborating on the following highlights of Restricted Stock Units grants: A hybrid compensation vehicle with blended features of Option & a stock grant; Optimum utilization of the Grant budget to achieve maximum retention thrust; Customization of the program design to cater to the needs of diverse employee groups; Attractiveness of the program through exceptional  wealth creation possibility.