Shell + BG = An interesting time for share plans Pam Roffe (Shell), Nick Hipwell (Deloitte), Matt Stephen (Deloitte), Paul Churchill (Computershare), Andy Willis (Computershare) 1
The panel 2
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Computershare Plan Managers Laying the right foundations Designing your solution Working with you and your advisors to design and deliver practical solutions across global, countryspecific, executive and all-employee share plans Developing strategies to encourage shareownership Giving you access to the Computershare community to learn and network meeting with industry experts, advisory groups and client peers Servicing 1,500 clients In 2,700+ share plans Across 190 countries With 4.8 million participants Team of experts for you Largest team of industry experts taking care of your share plans Global service and local expertise More than 770 share plans specialists across 16 countries Utilise our experience to achieve the results for your business 4
Agenda The transaction Key share plan implications of the transaction Communications to employees How did the stakeholders work together Questions? 5
The transaction 6
The transaction 7
The share plans and awards involved A long list The offer Company Share Option Scheme Performance Share Award Group Share Award 3.83 in cash and 0.4454 Shell B Shares for every BG share. Elect to receive more Shell B shares or more cash. Elect to receive A Shares instead of B Shares. Deferred Bonus Plan Sharesave Nil cost options Discounted options Voluntary Deferred Bonus Plan Global Partnership Plan Traders Plan Market value options Conditional awards 8
What were the requirements? Scope of transaction work 8 April Announcement of the proposed Combination. 22 The scheme of arrangement was produced by Freshfields and made public. The Rule 15 letters (produced by Freshfields) and accompanying tax guides (produced by Deloitte) were made available online. 26 Voting Record Time. 28 BG Court Meeting and General Meeting. 4 Last day for receipt of exercises and elections. 12 Scheme Record Date. December January 23 Employee plan election tool and E-proxy voting tool for employee shareholders went live. 27 Shell General Meeting (GM). February 11 Court Sanction Date (CSD). Originally intended to be on the same day, however, the timeline was extended by a day. 15 Effective Date. 9
Key share plan implications of the transaction 10
What happened to the plans at Court Sanction Three alternatives Accelerated vesting Awards under some plans had the vesting date accelerated to the date of Court Sanction. Six month exercise window Some stock options could be exercised up to six months following Court Sanction, otherwise they would lapse. Exchanged Certain plans were automatically exchanged into equivalent awards over Shell shares. Other plans had awards where participants could elect to exchange. 11
The numbers involved Transaction statistics Over 12 billion settled. Total share plan gains of c. 100m 45m in tax withholding calculated across 25 countries 6,023 GA Incentives calculations processed. All tax calculations processed within 2 hours 12
Analysing the impacts of the transaction Work streams Modelling Performing modelling calculations to determine the number of shares required to satisfy awards. Integration Ongoing tax integration work including harmonisation of tax policies, impact of rolled over awards and GA Incentives positions. Share plans Understanding the rules and practical operation of eight different share plans. Tax guides Producing tax summary documents for each country and share plan/award combination (227 separate guides in total). Tax due diligence Tax implications Advising on the tax implications of the transaction for each share plan (including capital gains tax implications). Providing an assessment of the risks and key tax issues arising from the transaction. Australia and Singapore class rulings? 13
The numbers - Computershare Court Sanction Date 16,098 retrospective dividends built onto our system 10,861,655 total shares processed 23 Plan variations 7,000+ awards accelerated / processed 25 hours from Court Sanction to complete all system updates a long night! 14
The numbers - Computershare Effective Date Calculate and apply all Mix & Match elections and Scale-backs to underlying holders. 16,700 conversion records processed (from BG to Shell shares) 3,786 Awards Exchanged to Shell (SAYE and Exec) 47,484,043 cash consideration 15
Communications to employees 16
Communications to employees Organising for Court Sanction Design of complex letters and forms Distributing documentation Complex Business rules Collation and distribution of complex documentation Helpline for queries Creation of bespoke dynamic website Moving target - adjusting timelines weekly! Website design Helpline for queries 17
Communications to employees Statistics Rule 15 letters Population of 3,873 (Employee and Leavers) 31 unique letter designs created 10,100 personalised Rule 15 letters 237 tax summaries produced across 28 countries 3,873 personalised statements 846 physical mail packs 18
Communications to employees Statistics Dynamic Website Bespoke dynamic website created to show each participants specific election options 71 unique Share plan awards to collect elections over 14,916 total individual elections to collect and apply 23 individual elections The highest number of elections any one individual could make! 19
How did the stakeholders work together? 20
Success in working together Integrated approach Slaughter and May Shell Deloitte Slaughter & May Freshfields Equiniti BG Computershare 21
Working together to success Challenges and lessons learnt Preparation Complexity Timing Get prepared it is never too early! As soon as the deal is announced, get share plans on the radar. Do lots of home work. Get all parties together early, particularly share plan administrator and third party advisers. In a complex deal there are many moving parts. Essential for all parties to work together. Build partnerships and work together Document all decisions which are made. Don t underestimate how long things take! Build in contingency if you can. Decisions on change in control take time. Some long hours, but don t forget to sleep! 22
Questions? 23
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