Global Employee Stock Purchase Plans 2001 Global Equity Compensation Forum Boston, Massachusetts October 29, 2001

1. Global Employee Stock Purchase Plans2001 Global Equity Compensation ForumBoston, MassachusettsOctober 29, 2001 Edward D. Burmeister Baker & McKenzie Two Embarcadero Center, Suite 2400 San Francisco, California 94111 (415) 576-3029 edward.d.burmeister@bakernet.com

2. NEW DEVELOPMENTS AFFECTING GLOBAL STOCK PURCHASE PLANS • India • New Exchange Control Law (3/2/01) Permits Stock Purchase by Employees of up to $20,000 Per Year (up From $10,000 in Five Years) • Pakistan • Liberalization of Exchange Control Laws May Permit Stock Purchase Plans in Pakistan (Circular No. 12 Dated September 1, 2001) but Prior Approval of State Bank of Pakistan Required

3. NEW DEVELOPMENTS AFFECTING GLOBAL STOCK PURCHASE PLANS (Con’t) Russia • New Law Effective July 6, 2001 Liberalizes Exchange Control Rules. Permits Transfers of Foreign Currency Out of Russia and Purchase of Shares in Non-Russian Companies • Transfers May Not Exceed $75,000 Per Year • Payments Must Be Made Through Authorized Bank • Tax Authorities Must Be Notified Within 10 Days of Transfer

4. NEW DEVELOPMENTS AFFECTING GLOBAL STOCK PURCHASE PLANS (Con’t) • Thailand • Liberalization of Exchange Control Laws • Until Recently, Limit of 5% of Pay • Recently, We Obtained Approval From Bank of Thailand for Purchases up to 20% of Pay • U.K. • Possible Transfer of Employer NIC Liability to Employees

5. GENERAL OBSERVATIONS • U.S. 423 ESPP Tax Benefits Not Relevant Outside the U.S., Except With U.S. Expats • 423 Rules May Prove Overly Restrictive • Steps to Implement a More Flexible Plan Design Through Plan Amendment

6. Employee Stock Purchase Plans (ESPP) • Employee’s Tax Consequences for ESPP • Amounts Deducted for Payroll Deduction Are on “After-Tax Basis” • Grant - No Tax • Purchase - No Ordinary Income Tax • Sale - Ordinary Income Tax Due on Spread and Capital Gains Tax on Gain If Holding Period Met (2 Years From Grant and 1 Year From Purchase) • Company Gets Deduction Only If There Is a “Disqualifying Disposition” Producing Ordinary Income for Participant

7. ESPPs – U.S. Tax Considerations • Essential Features of ESPP • Plan Provides Rights Granted Only to Employees of Employer Corporation or Parent/subsidiary Corporations • Plan Approved by Shareholders Within 12 Months Before or After Adoption • 5% Shareholders Excluded • Requires All Employees Are Eligible to Participate, With Certain Limited Exceptions - Less Than 2 Years Service, Less Than 20 Hours Per Week, Less Than 5 Months Per Year, & Highly Compensated (414(q))

8. ESPPs – U.S. Tax Considerations (Con’t) • Essential Features of ESPP • Must Provide “Equal Rights & Privileges” to Participants • Plan Must Limit Number of Shares Which Can Be Issued • 85% Look Back Discount Formula Allowed • Maximum Option Term -- 27 Months If Look Back or 5 Years If Price Determined at Purchase Date • $25,000 Worth of Shares (FMV at Grant) Can Be Purchased in Each Calendar Year • Rights Non-transferable Except on Death

9. ESPPs – Other Considerations • U.S. Securities Law Issues - S-8, Plan Prospectus, Blue Sky • Company’s By-laws and Other Governing Corporate Documents

10. ESPPs – Typical U.S. Design • Purpose Is to Be Solely 423 Plan • No Discussion of Type of Shares Used • Employees of Corporation, Parent and Subsidiaries Only • Rights Non-transferable, Except on Death • Part-time Employees Excluded • Participation Solely by Payroll Deductions • Deductions Over Purchase Period, Typically at 1-15% of Salary Rate, and If Funds Not Withdrawn by Period End, Automatic Purchase of Shares

11. ESPPs – Typical U.S. Design • No Interest on Accumulated Payroll Deductions • Lesser Of: 85% of FMV at Grant and 85% of FMV at Purchase • Purchase Period (3, 6 or 12 Months; Or 24 Months With Intermittent Periods) • Powers of Board/Committee Limited to U.S. Considerations

12. International Tax and Other Considerations • Tax Considerations • Social Insurance Contributions • Securities Law Compliance • Exchange Controls • Labor Law Considerations • Banking Law Considerations • Data Privacy Restrictions • Other Considerations -- Electronic Documents, Retirement Programs, Etc.

13. ESPPs – International Tax and Social Insurance Considerations • A Favorable Tax Regime May Be Available • Rights to Newly Issued v. Treasury Shares May Change the Tax Treatment of the Employee And/or Whether the Local Entity Can Take a Local Tax Deduction for the Costs of the Plan • Withholding and Reporting by Issuer And/Or Employer May Be Required • Social Insurance Contributions May Be Due From Local Entity and Employee

14. ESPPs – International Securities Law Compliance • Use of Newly Issued v. Treasury Shares May Minimize or Eliminate Securities Law Compliance • Using Certain Offering Materials Which Describe the Terms and Conditions May Minimize or Avoid Securities Law Filings • Certain Countries May Require a Separate Bank or Trust Account Be Established to Hold Payroll Contributions and Interest Be Paid

15. ESPPs – International Labor Law Considerations • If Grant Is Clearly From U.S. Issuer, Not Local Employer, and Not Part of Employee’s Compensation, It May Avoid Termination Indemnities and End of Service Benefits • EU Directive on Part-time Work (97/81/EC). Adopted 12/15/97 and Obligatory by 1/20/00

16. ESPPs – International Labor Law Considerations (Con’t) • Maternity Leave May Require Participation to Continue • Some Countries Guarantee Employees a Minimum Wage And/Or Restrict the Employer’s Right to Make Payroll Deductions From Compensation, Except for Certain Designated Purposes

17. ESPPs – International Banking Laws • Certain Banking Laws May Require the Creation of Separate Bank or Trust Accounts to Hold Accumulated Payroll Deductions • There May Also Be Restrictions on the Payment of Interest in Connection With Such Accounts

18. ESPPs – International Data Privacy Restrictions • EU Directive on Processing of Personal Data (95/46/EC). Adopted 10/24/95 and Obligatory by 10/25/98 • Other Countries May Also Have Laws - Hong Kong

19. ESPPs – International Design Features • Create Omnibus Design - 423 and Non-423 Plan (or Mirror Plan) • Board/Committee Permitted to Make Plan Modifications and Adopt Sub-plans for Grants Outside U.S. • Include Provisions for Employees Working at Affiliated Companies

20. ESPPs – International Design Features (Con’t) • Board/Committee Has Authority To: • Include Part-time Employees Where Required by Law • Allow Participation by Check or Bank Debit Where Deductions Not Permitted by Law • Permit Interest on Accumulated Payroll Deductions and Separate Bank/Trust Account for Funds Where Required by Law

21. International Implementation - ESPPs 10 Basic Questions: • When Is the Plan to Be Offered to Employees? • Will Participation Start in Every Country on the Same Day? Or Staggered Entrance? Branches, Check-the-box Considerations • What Is the Purchase Period, Discount on Shares, and Amount Employees Can Contribute? • What Countries? • How Many People in Each Country Will Be Offered the Right to Participate in ESPP? (Canada by Province; Switzerland by Canton)

22. International Implementation - ESPPs 10 Basic Questions: (Con’t) • What Entities Will Be Included and Where Do They Fall on Organizational Chart? • Will Company Wire Transfer the Accumulated Payroll Deductions to U.S. Or Use a Book Entry System? • Does the Local Entity Want to Take a Local Tax Deduction for Plan Expenses? • Who Will Administer the Plan? Company Itself, Plan Administrator/Broker, Etc. • Is There an Automatic Dividend Reinvestment Program?

23. Brazil ESPP • Exchange Controls May Mean Implementation Not Feasible • Circular Limitation of US$20,000 Over 12 Months • Filing Each Time Funds Transferred

24. Germany ESPP • Tax Considerations • Tax at Purchase on the Spread • No Tax on Sale If Shares Held 12 Months & Other Conditions Met • Withholding and Reporting Required • Social Insurance Contributions • Due on the Spread at Purchase (Employer and Employee)

25. Germany ESPP (Con’t) • Securities Law Compliance • None, Unless Listed on German Exchange • Exchange Controls • Minor Reporting Requirements

26. Germany ESPP (Con’t) • Labor Law Compliance • Separate Bank Account Holding the Employees’ Accumulated Payroll Deductions Required • Avoid Entitlement Issues by Stating U.S. Law Governing Law • Part-time Workers Must Be Included - Equal Treatment • No Discrimination Against Employees on Maternity Leave - Parental Leave (up to Age 3) Different • Consult Works Council Regarding ESPP

27. Germany ESPP (Con’t) • Data Privacy Restrictions • Employee Consent Must Be As Specific As Possible • Consent Required to Transfer Data Abroad - Unless to Fulfill Employment Agreement

28. Japan ESPP • Tax Considerations • Tax on Spread at Purchase - Remuneration Income • Tax on Sale of Shares • No Withholding or Reporting Unless “Significant Involvement” by Subsidiary • No Social Insurance Contributions Because No Wages for Labor

29. Japan ESPP (Con’t) Securities Law Compliance • Under 50 People, No Registration Unless Over ¥100,000,000 • Over 50 People: • Form 6 - ¥10,000,001 - ¥99,999,999 • Form 7 - ¥100,000,000 (3-6 Months; $120,000) • Compliance - Forms 8 and 10

30. Japan ESPP (Con’t) • Exchange Controls • Unregulated Unless Over ¥100,000,000 in Transaction • Labor Law Compliance • Do Not Describe ESPP in Work Rules to Avoid Vested Rights • Kyotei Agreement Between “Representative” and Company Necessary for Payroll Deductions - Do Not Need Separate Bank Account

31. Japan ESPP (Con’t) • Data Privacy Restrictions • No Mandatory Laws or Regulations • Guidelines by Ministry of International Trade - Just and Reasonable Administrative Reason • Written Consent Recommended

32. Malaysia ESPP • Tax Considerations • Tax at Grant on Discount If Amount Known - Otherwise at Purchase • Submit Form to Inland Revenue Board Within 30 Days of Grant • No Tax at Sale Unless in Business of Buying Shares • Not Clear If Withholding Required, So Tax Ruling Might Be Useful • No Social Insurance Contributions

33. Malaysia ESPP (Con’t) • Securities Law Compliance • Information Memorandum Due Within 7 Days of Grant and Purchase • Exchange Controls • Bank Negara Approvals Required • Remittance of Funds Over RM10,000 • Remittance Must Be Made in Approved Currencies • Must Repatriate Proceeds

34. Malaysia ESPP (Con’t) • Labor Law Compliance • Director-general of Labor Approval of Payroll Deductions - for Employees Earning Wages Less Than RM1,500 (US$395) Per Month or Those Engaged in Manual Labor • Data Privacy Restrictions • Employee Consent to Collection, Use and Transfer