1. Stock Plan Administration: Where do we go from here? NASPP – July 9, 2008 Michael Bendorf – Principal, Buck Consultants Robin Silke – Manager, Global Shares

2. About the Survey In February, 2008, Global Shares and Buck conducted their second annual survey of Stock Plan Administrators Responses from 325 companies from 11 countries Focus on the survey was on stock administration practices, not on plan design Buck Consultants provides a separate survey to focus on stock plan design trends (2008 Buck Consultants Global Long-Term Incentive Practices Survey)

3. Survey represents a diversity of organizations… Organizational StatusIndustry Revenue Range

4. …and people Respondents by Title

5. The Results [ essential intelligence ]

6. Administrators came from various backgrounds Human Resources provides the most common career path for stock plan professionals 16% of stock plan administrators started their careers specifically as stock plan professionals Path Followed into Current Position

7. Educational experience Almost 30% of respondents have a graduate degree 91% of respondents have a minimum of a 2 year college degree Educational Experience

8. Professional certifications are also common Almost half of survey respondents report having some certification or other professional qualification 25% 12% 8% 11% 6% 40% Certified Equity Professional CEP Exam Level II CEP Exam Level I Certified Compensation Professional PHR/SPHROther Certification Professional Qualification Prevalence of Certifications/Professional Qualifications

9. Continuing Education Respondents take ongoing education seriously, with 96% indicating they regularly participated in educational activities 79% participated in at least one annual conference in the past year –NASPP - 72.7% –E*Trade - 28.2% –WorldatWork - 25.7% –CEP Symposium - 15.1% –GEO Annual Conference - 14.3% 55% also participated in at least one local chapter meeting –NASPP - 81.0% –E*Trade User Group - 26.8% –GEO - 14.4%

10. Other forms of education are less formal Other Sources of Continuing Education

11. Types of company plans administered Stock options are still the most popular, but more than half of the respondents are responsible for administering restricted stock plans. Additionally, more than half still administer a type of purchase plan (which can include ESPP, SAYE, SIP, etc.) 95% 23% 54% 59% 41% 54% 50% Stock OptionsSARsRestricted Stock Units Performance- based Plans Stock Purchase Plans Outside Director Plans Prevalence of Equity Plan Type

12. Stock plans still have an international nature 71% of respondents are responsible for plans operating in multiple countries –Technology - 91% –Manufacturing - 86% –Services & Life Sciences - 81% 35% operate plans in more than 15 countries Only 8% of companies with international plans use different administrators outside of their home country

13. Organizational home for stock administration A majority of stock plan professionals find themselves in the HR department, with over half reporting HR as their home department The next most popular department is Finance (including treasury, accounting and payroll) and Legal (including corporate secretary) 52% 29% 11% 8% Human ResourcesFinanceLegalOther Responsibility for Admin Function

14. Department census The size of the stock plan department ranged from one to 10 or more The most common number was one employee supporting the plans (52%) with two-three persons in the department the second most common Number of People in Admin Function

15. Cost of the plan(s) On average, across all respondents (large and small), companies spent an average of $213,565 to support their stock plans. Over half that amount went to paying service providers (administrators) 56% 8% 13% 20% 3% Service ProvidersCommunications Systems/TechnologyProfessional Fees Training Share of Total Cost of Plan

16. Cost of the plan(s) Average cost per plan participant across all companies was $28.32 Evidence that economies of scale have tremendous impact on per participant cost Average Cost per Participant by Employee Population

17. Impact of Issues on Responsibilities The most influential activity to impact the daily life of the stock plan administrator is management reporting, followed closely by monitoring government regulations We are pleased to see that internal politics ranks low in terms of time-consuming activities. High Impact ActivitiesLow Impact Activities 1 Management Reporting 5 Changing Jobs 2 Government Regulations 4 Internal Investigations 3 Internal/External Auditors 3 Internal Politics 4 Participant Education 2 Budget Justification 5 Employee Satisfaction 1 Employee Turnover in Dept.

18. Utilization of time We were surprised to see that work unrelated to stock administration took up 35% of people’s time. When asked what that time was spent on, it related either to plan design/participation selection or unrelated activities. Unfortunately, twice as much time is spent on reporting (22%) than on training and communication (11%).

19. Commercial software licensing 58% of respondents utilize a commercially available software package, regardless of whether they outsource or not. We did not include proprietary software owned by administrators (that were unable to be licensed by end users) in our questionnaire. Most Popular Software Packages

20. Little movement to new software platforms 10% of respondents had moved to a new software platform (either purchased or at an administrator) 15% were not convinced it had been a good idea, although 85% felt it had been worth the effort

21. Participant websites Over 80% of respondents provide a website in support of their administrative services Customized company websites are most prevalent in technology industries Broker-provided websites are most prevalent in hospitality and retail/wholesale 51% 21% 9% 19% Broker WebsiteSoftware Provider Website Custom WebsiteNo Website Source of Equity Participant Websites

22. Outsourcing prevalence varies 52% of companies surveyed report outsourcing some or all of their stock plan administration programs Larger companies appear more likely to outsource administration Outsourcing Prevalence by Company Revenue

23. Types of plan outsourced 17% of respondents have outsourced all their equity plans Larger plans (e.g., Stock Options, Purchase Plans) appear to be outsourced more frequently than smaller plans 46% 32% 40% 43% 32% 46% 21% Stock OptionsSARsRestricted Stock Units Performance- based Plans Stock Purchase Plans Outside Director Plans Percent of Equity Plan Types Outsourced

24. History with Service Provider We found a wide range in terms of the length of the relationship with the providers We did find a bump in the number of companies using their providers between 2 and 10 years and feel this may be explained in the rise of outsourcing over the past 10 years 45% have what are considered long term relationships (i.e., more than 4 years) Number of Years with Current Service Provider

25. Additional services provided by outsourcing The trend for brokerage firms to provide outsourcing is supported with 92% of respondents reporting that their outsourcer provides brokerage services Only 11% reported that their administrator also provides transfer agent/registrar services

26. Perceived value of outsourcing initiative The most important attribute an administrator can provide is accuracy. Surprisingly, reporting was seen, by comparison, to have the least value to survey participants. Reporting Customer Service for Company Timeliness Administration Customer Service for Participants Accuracy Level of Satisfaction with Service Deliverables

27. Losing control of data is still a major issue Of companies not currently outsourcing stock plan administration services, 1/3 rd report considering doing so. However the most common reason companies don’t is their fear of losing control of their data. Pricing also appears to be an issue, with 38% challenged by the cost. Reasons for Not Outsourcing

28. Stock Plan Administration: Where do we go from here? NASPP – July 9, 2008 Michael Bendorf – Principal, Buck Consultants Robin Silke – Manager, Global Shares