employee stock option -- cross border mechanism

ESOS Cross-border Produced by: Kaushik Pramanik

Produced by: Kaushik PramanikDate: 25.05.2010 Slide 2

ESOS Cross-border: Content

The purpose of this short presentation is to provide:

Introduction of ESOS Cross-border program.

Overview of ESOS function.

Glance of ESOS business landscape.

Current business challenges faced by ESOS.

ESOS business challanges to IT actions.

IT Context diagram.

ESOS business & IT alignment: A joint effort to help our clients to thrive.

Open questions.

ESOS Cross-border:

Entry Point..


ESOS Cross-border: Introduction of the program

Introduction..

Employee Share Ownership Service (ESOS): Engage best people of a company to be

part of company‘s growth and success by providing share options.

Bank to provide state of the art, lucrative, competitive, tailored, sustainable

employee participation plan to global corporate institutions beyond the national boundary.

Provide end to end solution; starting from initial advice to plan execution, policy,

operational support, dividend payment, pricing, accounting, TAX efficient advice, reporting,

etc.

Meet the individual need of global employees of global corporate institutions and

establish the robust and sustainable relationship with each employee.

Bank to be a trusted partner and advisor of the institutional corporate client and it‘s

employee in terms of providing best possible ESO service and TAX efficient future

growth of vested options through financial products and off-shore banking.


ESOS Cross-border: ESOS function

1. Bank lends money to Bank

ESOS trust with company

guarantee.

2. Bank trust buys share

from the company or existing

shareholders.

3. Company makes annual

payment to bank ESOS trust,

which in turn pays the bank.

4. Bank ESOS trust grants

shares (As per request from

company) to employees with

initial blocking period at a

discounted price. Employee

can receive stock or cash after

vesting date.

5. Employee can avail premium

banking facility and off-shore

banking.

ESOS – At a glance..


ESOS Cross-border: Business landscape...1

High level view..


ESOS Cross-border: Business landscape...2

Detailed view – Many dots..


Summary of Challenges..

ESOS Cross-border: Current Business Challenges..

Challenges/ Issues

ESOS Cross-border has the capability to fetch multi billion dollar business in the bank.

Unavailability of global, state of the art, functionality rich, sustainable & extendable

ESOS specific IT solution can hinder the progress.

Bank does not have the banking license in many countries where employees of participant

company are based. It is a legal obstacle for bank to provide online ESO service to employees of

the global participant company as ESOS client is embedded with online Banking.

Every country has different taxation system, rules and regulation about ESO. It makes

difficult to build standardized ESO solution.

The ESO product solution is very much tailored as every participant company has different needs

about ESO.

Ability to attract employees of participant company into Off-shore banking.

Provide creative & sustainable ESO plan to the corporate and institutional client.

Pricing and hedging of ESOs are debatable issues, which need to be addressed.


ESOS Cross-border: Business challenges to IT actions...1

IT Objectives..

Unavailability of global, state of the art, functionality rich, sustainable & extendable ESOS specific IT solution.

Business Challenges IT ObjectivesLeverage on global components.

Usage of international components for regional ESOS IT Solution.

Integration of ESOS IT components with Direct Net & IBIP.

Market research on ESOS specific software product.

Enhance ESOS components & CORBA services t o handle detailed

ESOS related functionality.

Swiss does not have banking license in many countries.

Disintegrate ESOS solution from Online Banking solution, so that

bank can portray as ESO service provider rather than a banking

Institution in non-licensed countries.

Use white labeled (Removal of branding & banking functionality)

internal components (WES/EBVV) in disintegrated ESOS solution.

Special bank disclaimer related to ESO service will be shown in

all pages.


ESOS Cross-border: Business challenges to IT actions...2

Provide creative and sustainable ESO plan along with pricing and hedging functionality.

Built ESO IT platform to cover most complicated business

functions including hedging and pricing module.

Different taxation system, rules ad regulation about ESO in different countries.

IT Objectives..

Enhance ESO IT solution, so that it is flexible enough to

incorporate different rules and regulations easily.

Tailored ESO product solution.

ESOS IT solution should be flexible enough to cope-up with

tailored ESO product.

Ability to attract employees in Off-shore banking.

ESOS IT solution should be integrated with off-shore banking IT

solution as applicable.


ESOS Cross-border: IT Context Diagram

ESOS Swiss IT Solution...


ESOS Cross-border: Business & IT Alignment (..1)

ESOS 3 Pillar Model



ESOS Cross-border: Business & IT Strategy Alignment

ESOS Cross-border: Business & IT Objective Synchronization

ESOS Cross-border: Business & IT Collaboration

Functionality Rich, Sustainable

& Reliable IT Product Solution

Helping Clients to Thrive

Strategy, Objectives & Collaboration...



IT Product as foundation of business..


ESOS Cross-border: Open questions.

Questions..

Who are our major competitors?

Do we have any benchmark company?

Where do we stand (Ranking) in the market in terms of ESOS business?

What are our competitive advantages over our competitors?

Which region has the highest potential of ESOS business?

How ESOS business is structured globally and how is it governed?

Are we developing financial products related to ESOS business?

How many types of ESO plan currently we have?

How big is the current ESOS IT team? Are there any documents available on current ESOS IT

function?

What are the legal & compliance issues related to internationalizations of ESOS business?

What are the alternatives if the participant company does not want to be part of off-shore or on-

line banking?

Many more questions to be asked in the future as the subject will be much clearer.


Thank you very much for reading this presentation..

ESOS Cross-border: End of presentation.

employee stock option -- cross border mechanism

Economy & Finance