Business News The Official Newsletter of the American Chamber of Commerce in Denmark Member of the AmCham Network

No. 10 Vol. 3

Dec 2004

U.S. ELECTIONS Happy Holidays! AmCham Denmark wishes our friends and colleagues a safe and happy holiday season and a prosperous 2005.

Inside this issue: Events Calendar . . . . . . . . .2 Chamber News . . . . . . . . . .2 HR Roundtable . . . . . . . . . .3 Election 2004 . . . . . . . . . . .4 New Taxation Committee . .5

Americans and Danes watched the democratic process in action at the U.S. Embassy’s Election Night Party and Election Breakfast sponsored by AmCham Denmark. Election Breakfast Prime Minister Anders Fogh Rasmussen joined U.S. Ambassador to Denmark Stuart Bernstein, other ministers, diplomats and executives at the exclusive breakfast at the Copenhagen Marriott. Danish media broadcast live from the site.

Stock Options Ruling Q & A 6 AmCham 3rd Family Thanksgiving Dinner . . . . .7 New Members . . . . . . . . . .8

2004

Rasmussen called U.S.-Danish ties “old, strong, and intense,” and added that shared values far outweigh any current rifts in the transAtlantic relationship. Bernstein agreed.

Ambassador Bernstein and Prime Minister Anders Fogh Rasmussen at the election breakfast. (Photo courtesy of Flemming Olsen)

Experts said to expect some tough decisions for the second Bush administration about the budget and entitlements. They also said they expect to see a reinvigorated White House with a mandate to enact a conservative agenda. cont on page 4

AmCham Denmark welcomes new members:

Corporate: Haldor Topsøe Randstad Associate: Nordic Asset Mgt. The Hennessy Group For complete company listings, see last page.

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Important news of note inside this issue: • New Tax Legislation to Impact Companies . . . . . . . . . . . . . . . . . 5 • Implications of Supreme Court Stock Option Ruling . . . . . . . . . . 6

Sponsors:

Chamber News AmCham Calendar: For a complete “Events Calendar” visit our website: www.amcham.dk December OSAC Steering Group Meeting Tuesday, December 14 9:00 to 10:30 U.S. Embassy January 2005 Patron Member Dinner at Rydhave Friday, January 7 19:00 to 22:00 By Invitation Jutland Committee Roundtable Tvilum – Scanbirk, Fårvang Tuesday, January 11 10:30 to 12:30 Membership 101 – Get Oriented Friday, January 14 15:30 to 17:00 AmCham Office Business Breakfast Review of Stock Option Survey Results Tuesday, January 18 08:00 to 10:00 Venue TBD February Membership 101 – Get Oriented Friday, February 4 15:30 to 17:00 AmCham Office

The 2004-2005 AmCham Denmark Yearbook & Membership Directory is now available. AmCham members should have received their copy. Others wishing to request a copy should contact the chamber office.

AmCham Jutland Committee The Jutland Committee, chaired by AmCham board member Ole Lund Andersen, is holding a roundtable planning session on Tuesday, January 11. The meeting will be hosted by Tvilum-Scanbirk in Fårvang. AmCham Denmark is committed to developing a vibrant network of companies, located west of the Great Belt, with ties to American business. To this end, we are looking to our members and potential members in this region for input in setting goals and programs for 2005 and beyond. For details, contact the AmCham office.

AmCham Adds New Staff Stephanie Frye joins AmCham Denmark as a member relations specialist. She comes to us after having worked with the U.S. Missions in Vienna, Brussels and Stockholm. She earned her B.A. in International Studies and History from Kalamazoo College, Michigan, and her M.A. in Peace and Development Studies from the University of Innsbruck, Austria.

New for 2005 – AmCham Presents: Membership 101 – Get Oriented Are you a new member who would like to learn more about your membership benefits? As an existing member, are you utilizing all of the benefits your AmCham membership has to offer? This seminar will inform new and legacy members alike about the benefits of AmCham membership. Topics include a review of AmCham’s business services, the Mutual Benefits & Services Program, and the advantages of participation in our extensive and expanding committee system. All seminars are held at AmCham and are followed by a Thank Goodness It’s Friday (TGIF) reception. Enroll now. Visit www.amcham.dk/events

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Chamber News HR Committee Roundtable “HR is not lycra.” In other words, human resource management programs should not be thought of as “one size fits all.” International HR programs need to fit local market conditions, not the other way around. And it’s important to communicate that back to the home office. That’s the opinion of Chris Brewster, Professor of International Human Resource Management, Henley College of Management, UK. He made his remarks to 33 specialists and diplomats at a Business Breakfast meeting of AmCham’s Human Resources Committee, December 2 at the U.S. Embassy. U.S. parent companies may be less aware of HR differences throughout Europe, Brewster said. Subsidiaries implementing long-term HR strategies need to educate parent companies about the unique conditions they face and what HR practices would work best.

A Henley survey found that certain HR practices are commonplace in Europe, including: flexible time, more investment in training and development, more communication with employees, and compensation packages such as shares, profit, group performance bonuses (commonplace in Scandinavia). But while commonplace, these are not practiced in the same way or to the same degree across borders, said Brewster. Also, the survey found no evidence of any headlong rush toward outsourcing, although some cases have generated headlines, he said. Across Europe, HR departments are shrinking relative to workforce. The average is now 1.5 HR people per 100 employees, and there is not much variance across borders or sectors, according to Brewster.

U.S. Embassy Regional Senior Commercial Officer, Keith Curtis; Chris Brewster, Professor, Henley Management College, UK; and Torben Juul Andersen , Professor, CBS; at the HR Event.

Peter Dissing, HR Director for Saxo Bank, and Tim Sandholdt Jensen, Intel’s HR Manager, at the HR Roundtable event.

New Managing Director at DaimlerChrysler

L to R: Ellen Hertz Bilberg, U.S. Embassy; DCM Sally Light; Christopher Wilson, Trade Attaché; Greg Burton, U.S. Embassy.

U.S. Trade Official Visits Denmark DCM Sally Light welcomed Christopher Wilson, Trade Policy Attaché at the Mission of the U.S. to the E.U., several members of the business community and embassy personnel, to her home on Tuesday, December 1. Mr. Wilson serves as the Mission’s point of contact for bilateral and multilateral trade policy issues at stake in the U.S. – E.U. relations.

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DaimlerChrysler held a reception on December 3 to bid farewell to Managing Director Anders Sundt Jensen, who will now head the Smart division in their Stuttgart, Germany headquarters. At the same time, they gave a warm welcome to new Managing Director, Peter Roos. Roos assumed his new responsibilities Monday, December 6. Peter Roos, incoming Managing Director for DaimlerChrylser Denmark (left) and Anders Sundt Jensen, now head of the Smart division in Stuttgart.

Event Review cont from page 1

Blair Hall, Counselor for Political and Economic Affairs at the U.S. Embassy, moderated a panel discussion about the election outcome. Panelist Charlotte Lindholm, a financial and business affairs anchor for national DR-TV, said the Bush administration’s federal budget and trade deficits, a weakened dollar, and a “jobless recovery” may spell economic trouble in coming years. Lindholm doubts that the federal budget deficit could be cut in half in four years. Panelist Svend Auken, a member of the Danish Parliament, suggested that Bush could repair relations with Western Europe with a visit to the December meeting of the European Council. David Gress, an Århus University professor and conservative commentator, expects Bush to forge ahead with a conservative agenda.

Election Night Party “Friends of America, welcome!” That was U.S. Ambassador to Denmark Stuart Bernstein’s greeting at the U.S. Embassy’s November 2 Election Eve Party sponsored by AmCham Denmark at the Copenhagen Marriott. Partiers streamed into the event – the crowd at one point totaled more than 1,000 – which lasted through the night. Dozens waited as long as two hours to get in. The lively event echoed traditional U.S. election eve celebrations. Partiers networked, enjoyed refreshments, and kept tabs on election results via a laptop computer station and giant projection screens displaying American election programming via satellite. Danish broadcast crews from DR 1 and TV 2 circulated through the crowd.

They agreed that American voters made their choice based more on the fear of terrorism than on economic issues.

Ambassador Bernstein noted the intensive Danish interest in the U.S. election and thanked partiers for their support of “this great expression of freedom and democracy.”

Election Breakfast Panelists: Charlotte Lindholm, DR TV; David Gress, Aarhus University; Svend Auken, Member of Parliament; and moderator Blair Hall, US Embassy Political Affairs Counselor.

Prime Minister Anders Fogh Rasmussen speaks to the ministers, diplomats and executives attending the Election Breakfast.

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Julie Scott, International Relations Coordinator for Denmark’s International Study Program (DIS), enjoys the party. (Photo courtesy of Gregers Overvad)

Ambassador Bernstein with AmCham members Flemming Dehn Jespersen, MCI (left) and Jakob Stengel Hansen, Chubb (right), at the Election Night Party.

Ambassador Bernstein greets partiers prior to opening the doors to the Election Breakfast.

Danish Defense Minister Søren Gade and Deputy Chief of Mission Sally Light at the breakfast.

Policy News

Members to Establish Taxation Committee

Stephen Brugger, Executive Director, AmCham Denmark

This past year we have seen numerous legislative proposals, that have potentially far reaching consequences for American and International companies operating in Denmark: Stock options; Taxation of holding companies; and now a new “Joint Taxation” proposal. Often these initiatives are aimed at closing loopholes in Danish legislation, but at the expense of international business. Our concern is not only for our member companies operating in Denmark but also with the general message being sent to the international business community, which

could impact the decision on where to establish your business in Northern Europe. We welcome the formation of an AmCham Taxation Committee, which will disseminate Danish taxation legislation for the benefit of AmCham Members and will also be a source of important policy information, which will be utilized by the AmCham board to bring key issues to the attention of Danish decision makers. For more information on this committee, please contact the AmCham office.

Important Tax Notes From AmCham Working Group Tax Consolidation Rules The AmCham Taxation Committee Working Group wants Chamber members to know that Danish rules on tax consolidation are scheduled to undergo major changes. The changes are designed to prevent the use of tax consolidation rules for tax avoidance purposes. The rules state that a Danish or foreign subsidiary operating at a loss may only be covered by Danish tax consolidation if all Danish and foreign affiliated companies are covered. For example, if a Danish subsidiary of a U.S. multinational owns a lossmaking German subsidiary, Danish tax consolidation, if selected, will require that all affiliated entities, including the U.S. parent company, are covered by the Danish tax consolidation. The proposal could adversely affect U.S. companies that wish to invest in Danish companies covered by

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Danish tax consolidations. All such companies should review their Danish tax position to determine whether any action should be taken to mitigate any damage the proposal may cause. The proposal is set to be presented to Parliament on December 15, 2004. The legislation will likely be enacted in the spring of 2005, retroactively effective from January 1, 2005. New Income Tax Legislation: OK to File in USD Effective January 1, 2005, companies will be allowed to prepare their Danish income tax returns in a currency other than the Danish Kroner, if pending legislation is adopted. The implications are that all future foreign exchange gains/losses will be determined with reference to the chosen functional currency (e.g. USD, GBP, DKK etc) and the foreign exchange exposure previously

borne as a result of translations to Danish Kroner will either be eliminated or mitigated. Companies that want to convert to a new functional currency, would be required to apply with the Danish Tax Authorities before the start of the income year in which the new currency is to be adopted. This means that companies need to select their functional currency for 2005 before December 31, 2004. Authorities are reviewing a possible extension to this deadline. In addition, the exchange rate applied to assets and liabilities making the transition to the new functional currency will be at set exchange rates. Accordingly, companies should carefully consider the timing and indirect implications of switching to a new currency. For additional information, contact AmCham Denmark.

Chamber News

Stock Options Ruling Impacts U.S. Companies in Denmark Jette H. Ronøe,Partner, Bech-Bruun Dragsted

How will the Danish Supreme Court’s stock options ruling on November 23 affect U.S. subsidiaries and other companies in Denmark? Jette H. Ronøe, Partner, Bech-Bruun Dragsted, who tried the case for Intel, gives her perspective on the implications of the ruling. Q: What exactly was the Supreme Court Judgement in the Intel case? A: The Danish Supreme Court held in the Intel case that employees are, under Danish labor law, entitled to keep already granted stock options regardless of whether they are vested at the time they leave employment with the granting company or subsidiary of the granting company. This applied regardless of the fact that the agreement was entered into with the US parent company. The Danish subsidiary was held liable despite the fact that the stock option agreement was between the employee and the US parent company. Q: What do AmCham Denmark Members, particularly U.S. subsidiaries, need to know about the judgment? A: The main point is that stock options granted from a U.S. compa-

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ny to Danish employees are considered as pay from the Danish subsidiary. We had hoped that if a company had a general U.S. program, it would not be subject to Danish employment law because it was not granted from a Danish company. The whole notion of group company law is eliminated because such stock options are considered as salary directly from the Danish company, even in general programs. This applies for grants made before July 1, 2004. The ruling impacts the provision 17A of the Danish Salaried Employees Act in that now, in my opinion, you cannot create an alternative program in Denmark that would not be considered as pay. Stock options are considered as pay whether it is pay for work performed or intended as an incentive tool. Q: What does new legislation say about the conditions under which employees can retain their stock options? A: Danish parliament passed a law effective for grants made on or after July 1, 2004 as a remedy for future case law developing. Under the Danish Act on stock options granted to employees, an employee that resigns will lose all granted stock options unless the resignation is due to breach on the part of the employer. Conversely, the employee will be entitled to keep granted stock options if he/she is terminated unless the termination is due to breach on part of the employee.

Q: How might U.S. companies with subsidiaries and employees in Denmark react? A: We are concerned that the ruling will create a significant change in the attitudes of U.S. companies seeking to attract, retain, and motivate highly qualified employees in Denmark. Will these companies scale back or cancel stock option programs? How may this impact such operations here? Does the ruling allow for any viable alternatives to help such companies continue to attract and keep such jobs in Denmark? We are looking forward to working with AmCham Denmark to gauge the views of U.S. subsidiaries. Go to www.amcham.dk for a summary of the ruling and English translations of the ruling itself, and the related legislation. If you have more questions, email us at [email protected]

AmCham Needs Your Input A newly revised stock option survey taking into account the Intel ruling, is now available online. Please have your HR manager contact AmCham, 33 932 932 or via email at [email protected]. Results of the survey will be discussed at the January 18, 2005 stock option meeting at the U.S. Embassy.

Event Review

Members Enjoy AmCham Family Thanksgiving Carrie Nieman, a DIS student and the evening’s guest speaker, with AmCham’s Chairman, Paul Coleman and DCM Sally Light.

More than 260 Americans, Danes, Swedes, and others of all ages enjoyed 30 sumptuous roasted turkeys, plenty of trimmings and desserts, and live music at AmCham’s Third Annual Family Thanksgiving Dinner, November 27 at the Copenhagen Marriott. This was an exuberant family event, teeming with good cheer and great food.

Grand Prize winner Patricia Dorn-Lopez accepts her round-trip airline tickets to the U.S. courtesy of Icelandair from AmCham Executive Director Stephen Brugger (left) and Chairman Paul Coleman (right).

Steffen Ring, Motorola, enjoys the Thanksgiving event with his family.

Chairman Paul Coleman presents Jakob Høedt Larsen, Primetime Communications, with his prize: A one-night stay in a suite with breakfast in the Alberto K Restaurant’ compliments of the SAS Radisson Royal Hotel.

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Guest of Honor Sally Light, Deputy Chief of Mission of the U.S. Embassy, greeted the celebrants and described the tribulations and hope of the Pilgrims, painting a vivid, fresh picture of the traditional Thanksgiving story. Pastor Tim Stewart, International Church of Copenhagen, offered a blessing of the dinner, including a prayer of

thanks for the “fellowship, laughter, music, and joy” of this very special American holiday. After dinner, Carrie Nieman, student representative of Denmark’s International Study Program, made insightful and witty remarks about how she, as an American new to Denmark, “found Thanksgiving” here. She received a standing ovation. In addition, the G-Force Gospel Choir, directed by Susanne Lindeborgh, returned for its second AmCham Thanksgiving to sing a rousing medley of spirituals. AmCham Chairman Paul Coleman joined in the festivities, greeting the crowd and participating in the evening’s impressive gift raffle, which included two roundtrip tickets to the U.S. on Icelandair.

AmCham Denmark thanks the generous sponsors of its 3rd Annual Family Thanksgiving Dinner:

New Members AmCham Welcomes 4 New Members Corporate:

Associate:

Søren Lund Sørensen

Haldor Topsøe A/S Nymøllevej 55 2800 Lyngby Tel: 45 27 87 05 Website: www.topsoe.dk Main Areas of Business: Catalyst & Technology Business Markets: U.S.A., Asia, & Europe Contact: Søren Lund Sørensen, HR Director Roberto Biondi, Director Admin & Finance

Kees Stroomer

Randstad Gothersgade 45 1123 Copenhagen K Tel: 33 93 08 00 Fax: 33 93 41 56 Website: www.randstad.dk Main Areas of Business: Flexible Labor Business Markets: Denmark Contact: Kees Stroomer, General Manager

From the Embassy American and Danish holidays observed by the U.S. Embassy in 2005: Jan. 17 Feb. 21 March 24 March 25 March 28 April 22 May 15 May 16

Martin Luther King’s Day President’s Day Maundy Thursday Good Friday Easter Monday Prayer Day Ascension Day American Whit Monday

AmCham Denmark is the leading association representing American-Danish business interests in Denmark. Founded in 1999, AmCham Denmark is a not-for-profit, nongovernmental association that promotes and facilitates better business relations between the two countries.

Printed on:

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May 30 July 4 Sept. 5 Oct.10 Nov. 11 Nov. 24 Dec. 26 Dec. 31

Memorial Day Independence Day Labor Day Columbus Day Veteran’s Day Thanksgiving Boxing Day New Year’s Eve

AmCham Business News Managing Editor: Stephen Brugger Writer and Editor: Scott Berman Layout & Design: Woer|Gregorius

Contact Information: AmCham Denmark • Christians Brygge 28 DK - 1559 Copenhagen V Phone (+45) 33 932 932 Fax (+45) 33 130 517 [email protected] http://www.amcham.dk/

Nordic Asset Management Christians Brygge 28 1559 Copenhagen V Tel: 33 69 7204 Fax: 33 69 72 20 Website: www.nordicam.dk Main Areas of Business: Asset Management Business Markets: World-wide Contacts: Jack Austern, Partner Claus Gregersen, Partner The Hennessy Group Copenhagen Europe Center Vesterbrogade 149 1620 Copenhagen V Tel: 33 27 04 07 Fax: 33 23 73 03 Website: www.thehennessygroup.com Main Areas of Business: Executive Search Business Markets: World-wide Contact: Henrik Kaiser Aarre, Managing Director

New Book by Swett Greenway Communications reports that Former Ambassador to Denmark Richard Swett’s new book, Leadership By Design: An Architecture of Trust, is “a groundbreaking book about the unique civic leadership strengths of the architecture profession. Swett is the only architect to serve in Congress in the 20th century. He co-authored the book with Colleen M. Thornton, a friend and former colleague at AmCham. To order this book, go to: www.amcham.dk/dl/oth/ leadership_by_design.pdf