E-x-p-a-n-d-i-n-g the Horizons of

Your Global ESPP

Connie Bao, Manager, Equity Plans, Kinross Gold Corporation

June Davenport, Executive Director, Corporate Services, Solium

Jon F. Doyle, Managing Shareholder, International Law Solutions, PC

Erin Madison, Sr. Manager, Shareholder Services, Broadcom

Agenda • Introductions

– Overview of Broadcom and Kinross Tax Qualified Plans

• Getting Started – Planning Strategies

– Advice & Experience from the Front Lines

• Compliance Considerations – Dealing with Regulations outside your Home Country

• Communicating – Educating your Participants

– Approaches to Consider

• Administrative Considerations – Working with your Service Provider

– What worked well, what to avoid

• Lessons Learned

• Appendix – Country Overview/Challenges

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Introductions Connie Bao, Manager, Equity Plans, Kinross Gold Corporation

June Davenport, Executive Director, Corporate Services, Solium

Jon F. Doyle, Managing Shareholder, International Law Solutions, PC

Erin Madison, Sr. Manager, Shareholder Services, Broadcom

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Kinross Gold Corporation Plan Overview

Founded in 1993, Kinross has quickly grown to become

one of the world's leading gold mining companies.

The company has operations and offices in Canada,

the United States, the Russian Federation, Brazil, Chile,

Spain, Ghana, and Mauritania.

Listing on TSX and NYSE

Revenue in 2013: $3.8 billion

Employees in 2013: 9,100

RSUs and Options plan:

• Brazil, Canada, Chile, Ghana, Russia, Spain, USA

Employee share purchase plan (ESPP):

• Canada, Ghana, USA, Spain (in 2014), Expats in all

operating countries

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Broadcom Corporation Plan Overview

• ~13,000 employees in 26 countries (22 eligible)

• US §423 plan and mirror non-US plan

• Two-year fixed offering periods

• Six-month purchase intervals

• Quarterly enrollment

• 15% discount with look back to enrollment date

• Reset provision

• 89% participation rate

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Getting Started……..

• Planning Strategies

‾ Common Approach

• Corporate strategy to expand plans worldwide

• Foreign management and employees inquiry about Plan

Participation

• Admin Team requests Home Country Management

consideration

• Advice & Experience from the Front Lines

– Kinross Approach

– Broadcom Approach

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• Plan Structure

– Tax qualified/approved in home country?

• Impact to global expansion

– Tax qualified in each jurisdiction

• Consider cost and expertise

– Non Tax qualified component

• May allow for different eligibility/features in non home country

locations

– Consider making plan as broad as possible

Getting Started……..

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Getting Started……..

• Review each entity and compliance issues

individually

‾ Separate offering may be more feasible

‾ May exclude part-time employee participation

‾ Could allow exclusion of some countries

‾ Helps to avoid ‘tainting’ Home Country Tax Qualified Plan

‾ Ensure Board resolution outlines any separate offerings

• Determine if shareholder approval is required

• Consider Shareholder Advisory Firm Viewpoint

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Compliance Considerations

• Review local country compliance regulations for

limitations or restrictions

‾ Determine complexities and time involved to comply

‾ Foreign Exchange

‾ Employment Law

‾ Securities Law

‾ Payroll deduction restrictions on employee’s behalf

‾ Data Privacy

‾ Holding of Payroll Deductions

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Compliance Considerations - Kinross

Administration

Communication & Education

Planning & Compliance

2013 – Ghana

2014 – Spain

2015 – Chile? Russia?

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• Work with external consultant and review issues that may

• Legally prohibit the company from extending the ESPP to local

employees

• Create significant administrative burdens for the company

• Suggest issues relating to the design of the ESPP

• Provide a compliance checklist to the local HR team

• They review the requirements along with local tax, finance and legal

colleagues to ensure a good understanding of requirements and any

potential issues

• Corporate teams review the results and provides sign off, following

consultation with local functional leads

Compliance Considerations - Kinross

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Compliance Considerations- Broadcom • Exclude countries due to regulatory issues or if administrative

costs outweigh benefits to employees

– Currently exclude Brazil, Italy, Japan, and Turkey

• Excluded China until November 2013

– Included ESPP with original SAFE filing in Shanghai in 2008

– Did not implement because could not transfer contributions to US parent

– After Circular 7 in 2012, began reevaluation of ESPP in China

– Waived tax rulings to spread ESPP income over purchase period

– Contributions required to be passed through broker

– Included non-PRC nationals in SAFE filing

– Forced sale provision six months after termination

– Extensive communication effort in local language

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Other Considerations • Consider beyond the requesting country

• How prior decisions were made

‾ What was successful vs What was not

• Preliminary Analysis of Share Pool

• Establish Authority for Decisions

• Don’t Forget -

‾ Time frame

‾ Priorities

• Currency fluctuation

• Eligible compensation

• Translations

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• Mobile Employees ‾ Employee moves from Tax Qualified to non-Tax Qualified

Jurisdiction • Tax Qualified at grant

• Impact when purchase occurs under non-Tax Qualified

component

• Employees moves from eligible country to non-eligible

country

Other Considerations

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Communicating

• Educating Participants

– Corporate Team vs Local Team Plan Roll Out

• Determine who is better to communicate Key Plan Components

– Provide Participants with required information

• Risks involved in investing

• Foreign Exchange

• Approaches to Consider

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Communicating – Kinross’ Approach

• Corporate HR works with local HR to develop a thorough roll out plan, considering:

– Timelines for communication relative to enrollment deadlines, etc.

– Appropriate media and materials, adapted to the local audience

– Local understanding of such plans, and the population being included

• Ensure it was “sold” locally as such, from a retention and engagement point of view;

• Be thorough on the education as there are a number of elements that an employee

needs to understand and consider prior to enrolling

– In particular, want to ensure employees are aware of the risks associated with investing in

shares, and resulting from foreign exchange;

• Educate and train the local HR team so they are able to manage the process:

– The actual roll out and communication

– Ongoing plan management including enrolments, contribution changes and/or suspension,

addressing questions and concerns, helping employees to access their online accounts, etc.

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• Onsite presentations, WebEx, e-mail, intranet

• Consider costs/benefits of translation

• Broadcom rollout in China

– Team member located in China

– Onsite presentations in Mandarin

– All printed materials in English

• Recent acquisition in Finland/India

– Due to timing, unable to travel onsite to Finland, WebEx only

– Onsite and WebEx in India

– Noticeable decreased enrollment from new employees (80%)

– Average enrollment in India

• Creating video snippets

Communicating – Broadcom’s Approach

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Administrative Considerations

• Working with Your Service Provider

– Coordinate Prior to Plan Roll Out

• May Require Changes by Service Provider

– What Worked Well

– Access to administrator system for non home countries

• May drive greater ownership and enrolment levels

– Potential Challenges

• Money movement ‘in’ for market purchases in different currency

• Money movement out – participant proceeds

• F/X & Restricted currencies

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Administrative Considerations - Kinross

• Select the service provider

– Can the service provider offer equity administration services if your stock is traded

in a non-US stock exchange?

– Can the system handle the purchases and dividends the way your plan requires?

– Any advantages to use the same service provider who administers the RSUs /

options plans?

– Does the service provider’s website or call center offer multi-languages?

– Is the web design easy of use for participants and administrators?

• Establish the processes with service provider and internal teams

– Enrollment and contribution change processes

– Purchase process

– Suspension and termination processes

– Taxation and accounting reporting processes

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• Timing of currency conversion

• Online enrollment, electronic acceptance of Stock Purchase

Agreement not legal in all jurisdictions

• Fractional shares, small refunds, or carry-forwards

• Collecting tax withholding, if required

– One pay period or multiple

– Terminated employees

• Segregated bank accounts

• Korea – Power of Attorney to authorize payroll deductions

• Hong Kong – no payroll deductions

Administrative Considerations- Broadcom

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Lessons Learned • Plan Structure

‾ Shareholders asked to approve

‾ Additional shares to be requested

• Consider additional countries

• Prepare Tax Summaries by country

• Continue to monitor compliance,

‾ Preview impact of acquisitions (e.g. EU prospectus filing)

‾ Regulatory Changes by Country

‾ Population growth (including M&A)

‾ New Country Analysis

• Educate Management

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Lessons Learned • Manage Expectations

• Budget for Compliance

• Involve All Stakeholders

• Check lists

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Appendix

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Compliance Challenges -European Issues • EU Prospectus Directive

• Data Privacy Compliance

• Belgium ‾ Translation required

• Denmark – Stock Option Act ‾ Forfeiture generally prohibited upon termination

‾ Bigger concern with equity grants, but does apply to ESPP –

may want to exclude Denmark as a participating entity

‾ Translated stock plan statement required

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• Italy - “Financial Intermediary” requirement

• Russia ‾ Foreign exchange restrictions

‾ Securities law requirements

Compliance Challenges -European Issues

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Compliance Challenges - Latin & South American

• Argentina ‾ Foreign exchange restrictions

• Bolivia ‾ Payroll deductions are not permitted

• Brazil ‾ ESPP benefits may be included in severance benefits

calculations

‾ Continued vesting may be claimed by terminated employees

• Colombia - Securities law requirements

• Venezuela - Foreign exchange restrictions

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Compliance Challenges - Asia

• China - Exchange Controls (“SAFE” filing required)

- Same day sale often required, to reduce risk of employee

grievances (public offering issue)

• Hong Kong - Payroll deductions not allowed

• India - Merchant bank involvement still required

- Lower compensation will likely result in low participation

- 90-day time limit to repatriate monies from date of sale

• Japan - Onerous & costly securities filings required (if > 50 EEs)

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Compliance Challenges - Asia

• Malaysia - Approval required for payroll deductions

- Securities filing requirement

• Philippines ‾ Securities filing requirement

• Singapore and Malaysia ‾ Approval required for payroll deductions

• Vietnam ‾ Exchange control restrictions

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Compliance Challenges - Australia / New Zealand

• Australia ‾ Securities exemption must be satisfied

‾ Special holding of payroll deductions

• New Zealand ‾ Payroll deductions must be placed in a special account

‾ Significant securities compliance issues – filings must include

financials stated in accordance with NZ GAAP

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Compliance Challenges - Africa & Middle East

• Angola - Foreign exchange control restrictions

- Payroll deduction restrictions

• Mozambique - Obtain approval from Bank of Mozambique prior to grant

- Notify Bank of Mozambique upon issuance of shares

- Employees must repatriate proceeds from sale of shares

• Morocco - Foreign exchange restrictions

• Saudi Arabia - Must engage a financial intermediary

- Filings with the Capital Market Authority are required,

simple on their face but may be difficult in practice 30

Contact Information

Connie Bao June Davenport

Kinross Gold Corporation Solium

(416) 365-5123 +44(0)20 3475 7106

Connie.Bao@Kinross.com june.davenport@solium.com

Jon F. Doyle Erin Madison

International Law Solutions, PC Broadcom Corporation

(415) 789-5660 (949) 926-7211

jdoyle@ilawsolution.com emadison@broadcom.com

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