Registration and Opening Reception Exhibit Hall Opens

Transcription

1 S U N D A Y 6 A P R I L Registration and Opening Reception Exhibit Hall Opens M O N D A Y 7 A P R I L Opening Address Ryan Weeden, Global Equity Organization Keynote 1 Corporate Governance, Investor Confidence, and The Economy Workshop 1.1 Objectives and Obstacles for Global Share Plans Workshop 1.2 What s Next for Global Executive Incentives Workshop 1.3 Celtic Pride Ownership in Ireland Workshop 1.4 The French Connection Stock Purchase Plans in France and Beyond Workshop1.5 The Impact of Data Privacy on Global HR and Benefits Workshop 2.1 Equity Compensation in Canada Workshop 2.2 Outsourcing Stock Plan Administration How Satisfied Are Sponsors Workshop 2.3 Improving Accountability and Corporate Governance of Employee Stock Plans Workshop 2.4 Wipro Case Study Employee Ownership in India Workshop 2.5 Streamlining Share Settlement, Delivery, and Ownership Workshop 3.1 Administrative Roundtable Your Place or Mine A Discussion on Outsourcing and In-House Administration Workshop3.2 Smith & Nephew: An International Case Study With a Twist Workshop 3.3 Revisiting Stock Option Grant Allocation Practices Workshop 3.4 Changing Stock/Share Compensation from the Thames to Silicon Valley Workshop 3.5 Performance Based Equity Compensation Issues and Trends in Europe and the US General Session 1 International Hot Spots T U E S D A Y 8 A P R I L Workshop 4.1 Update on Asia Workshop 4.2 Getting the Most Out of Technology Share Plan Administration and Technological Alternatives Workshop 4.3 Impact of U.S. Corporate Governance Reform on Global Equity Compensation Plans Workshop 4.4 You say Share Plan I say Stock Plan. Workshop 4.5 How to Successfully Implement Global Stock Chargebacks: Global Perspective General Session 2 View From the Inside - Panel Discussion on Future and Direction of Equity Compensation W E D N E S D A Y 9 A P R I L General Session 3 View From the Top - CEO Panel of Leading Companies on How Equity Compensation and Employee Ownership Will be Used in the Future Workshop 5.1 The Michelin Guide to Share Administration A Case Study Workshop 5.2 Employee Risk Through Equity Compensation Participation Workshop. 5.3 What To Do With Expensing Workshop 5.4 International Issues in Formulating Equity Compensation Strategies in an Uncertain Market Workshop 5.5 Roundtable on European Stock Plans and Developments Part I Workshop 6.1 The Changing Role of Stock in Total Rewards Workshop 6.2 Stock Plans in Emerging Economies India, South Africa, and Beyond Workshop 6.3 The Power of Communication International Paper Case Study Workshop 6.4 Roundtable on Best Practices in Global Share Plan Administration Workshop 6.5 Roundtable on European Stock Plans and Developments Part II Workshop 7.1 Do You Know Where Your Employee s Are? Equity Compensation and Expatriate Issues Workshop 7.2 Is Your Firm at Risk? Workshop 7.3 Hewlett-Packard/Compaq Merger Case Study on Combining Global Equity Plans

2 Hewlett-Packard Company/Compaq Computer Corporation Merger Case Study Greg Gillas Hewlett-Packard Company Deborah Luby PricewaterhouseCoopers LLP

3 ISS Reported The single process most important to the success or failure of a merger is integration. Half a million man-hours of work have thus far been devoted to integration planning, which surely makes the HP- Compaq one of the most exhaustively planned combinations ever.

4 Integration Achievements Employee Focused A single was universally available at launch for 150,000 employees to access information. On average, the site continues to receive more than 2 million hits per day. Pre-merger HP and pre-merger Compaq networks were interconnected and secure at launch. Intranet and access from any site, anywhere on Day 1.

5 Integration Achievements Customer and partner focused The new hp.com website, available in 21 languages in 72 countries, was up and running on Day 1 with more than 3 million pages and 10,000 SKUs available online. More than 800 senior managers including region and country leaders were named at launch. On Day 1, product roadmaps and the overall strategy were in place and communicated.

6 Integration Organization Executive Steering Committee Legal Team HR/Organization Design Team Communications Team Program Management Leadership Team Program Office CFO Value Capture Team Personal Systems Group Enterprise Systems Group Imaging & Printing Group Services Supply Chain Support Functions (IM, HR, Finance, Facilities)

7 C&B Project Infrastructure Team Leads Drive project forward Facilitate team meetings Communicate project progress, accomplishments and issues Develop Framework HR Integration Core Team C&B Team Lead Global C&B Core Team HR PMO Provide high level support and input Review and approve recommendations Core Team Meet weekly to develop strategy and move forward platforms Drive implementation and changes as appropriate Benefits Executive Comp Sales Compensation Equity Base Pay Variable Pay Communications Extended C&B Core Team Country C & B Teams Functional C&B Teams Stock Administration Extended Core Team Support data gathering efforts within required timelines Participate in periodic conference calls Support and provide feedback to Core Team and key stakeholders Support and implement changes as appropriate Project Mgmt, Legal, Finance, HRIT and Communications Support

8 HR Program Management Office Tools Process Timeline Integration Milestone Plans for the business and infrastructure, global functions, systems, culture/change management, communications and regions/countries Integration Project Plans for the business and infrastructure, global functions, systems, culture/change management, communications and regions/countries Dashboards Develop integration plans, using the provided templates Utilize the PWC resource provided to manage plans, issues, reporting and coordination Report progress weekly to the Integration Office For each business: ID program lead for your business & region to be the key contact for Program Office, PWC, global functions, region/countries, etc. Weekly schedule (Program Office) Project Plan timeline for integration planning definition of operations on close/plan day, close day and operational day, milestone identification, project plans Project Plan timeline for implementation define operational and business program goals, integrated plans, The new HP - moving forward

9 Guiding Principles Do it fast and good enough Adopt & Go Decide then act and get results Once a decision is made, stick to it Strong integration structure Dedicated resources/teams are essential virtual teams will work Active two-way communication process central point for questions Program management with defined structure and timelines for the integration place to document issues and solutions Take ownership for creating new culture (e.g., calling into question our perceptions about our current natural tendencies) Goal: Create ONE great new company!

10 Americas Population Blue = High population Yellow = Medium population Red = Low population

11 EMEA/Asia Pacific - Population Blue = High Yellow = Medium Red = Low

12 Global Equity Conversion 56 Countries to Prioritize and Analyze Options over Compaq shares granted from 12 plans Merger agreement provided.6325 HP shares for each Compaq share--same treatment as Compaq shareholders No cash pure stock exchange Countries divided based on population in each country and anticipated conversion issues Most Compaq options vesting fully accelerated upon shareholder approval of merger additional issues in tax at vesting countries

13 Employee Stock Purchase Plan Both HP and Compaq sponsoring ESPPs globally Timing of transaction close uncertain Administratively impractical to add entire Compaq ESPP population to HP plan immediately after the close Failure to allow Compaq employees an offering date/price equivalent to HP employees created potential HR retention problems with employees if HP stock price rose post-close before Compaq employees would be allowed to enroll and lock in offering price for discount Final solution: Compaq employees enrolled in HP ESPP with shortened purchase period

14 Countries with Tax Issues Country Population Issue Australia France Netherlands Singapore Switzerland Belgium Denmark Finland Ireland Sweden >1,000 >1,000 >1,000 >1,000 >1,000 >500 <500 <500 >1,000 >500 Taxable event underwater options as well Disqualifies favourable tax treatment or restarts holding period Taxable event Taxable event in-the-money only Taxable event underwater options as well Taxable event underwater options as well Taxable event underwater options as well Taxable event in-the-money only Taxable event in-the-money only Taxable event underwater options as well

15 Australia Issue of taxation at cessation time Underwater options potentially taxed at conversion based on Black Scholes value Australian government openly seeking revenues from stock option income

16 France Tax treatment of option conversion heavily dependent upon whether the transaction was deemed Qualifying merger under French law The reverse triangular form of this U.S. merger created concerns in France that the resulting wholly-owned subsidiary (Compaq) of HP was not equivalent to a straight in merger No precedent for French tax authorities that the merger was in substance equivalent to straight-in merger

17 Netherlands Rulings in place for most options providing for taxation at exercise Accelerated vesting upon change of control triggered tax on some options

18 Singapore Singapore taxation of options triggered by exercise, assignment or release of a right or benefit to acquire shares in a company Taxation potential of intrinsic value at risk without a ruling

19 Switzerland Risk of conversion being considered a new grant and taxed based on Black Scholes value Many of the options were underwater which increased the need to confirm the non-taxable conversion to avoid inequitable result

20 Belgium High risk that Belgian tax authorities would view the conversion as a new grant, thus subjecting optionees to double taxation Reverse triangular form of merger creates issues with tax authorities negotiations Compaq becoming a wholly-owned subsidiary for a period of time before upstream merger into HP - no precedent for such transactions

21 Denmark No existing case law addressing this type of transaction Taxable conversion would create withholding and reporting obligation at conversion Underwater options would have been taxed at conversion based upon an interest formula similar to Black Scholes

22 Finland Existing case law confirmed that in the case of a clear merger (i.e., merging company dissolves into acquiring company) conversion of shares to optionees is not be a taxable event No judicial precedent for exchange of shares for reverse triangular merger where target company continues to exist as wholly-owned subsidiary of parent Taxable amount upon conversion potentially the intrinsic value of options

23 Ireland Compaq had Approved Share Participation Scheme in place in Ireland Under this approved scheme, a paper for paper exchange will not normally create a taxable event

24 Sweden Options typically taxed at exercise Vested options -- acceleration of vesting prior to conversion put the options at risk for being treated as disposed thereby deemed exercised by optionees Unvested options still at risk for taxation at conversion based upon a Black Scholes type of formula

25 Administration Issues - Before Human Resources Management Systems Stock Administration Systems Pre-merger Compaq Processes & policies Pre-merger Compaq 50 payrolls Pre-merger HP Processes & policies Pre-merger HP 50 payrolls

26 Administration After Integration Human Resources Management Systems Stock Administration Systems New HP New HP 50 payrolls