Federation of Associations of staff Shareholders of Thales Fédération des Associations des actionnaires Salariés de Thales Presentation to FEAS/EFES by.

Federation of Associations of staff Shareholders of Thales

Fédération des Associations des actionnaires Salariés de Thales

Presentation to FEAS/EFES by Robert Scallon

June 16th 2005

To facilitate participation in Thales employee share schemes and thus greater involvement in the life of the company.

This means helping employees and management before, during and after investment in a scheme.

To act as the link between the company and the national associations and to create where possible synergies.

FAST MISSION

1 Presentation to FEAS/EFES – June 16th 2005

HEAD OFFICE – Brussels

Federation of Associations of staff Shareholders of Thales

Fédération des Associations des actionnaires Salariés de Thales

FAST is a member of the European Federation of Employee Share Ownership

(EFES/FEAS).

Chairman – Robert Scallon

2 Presentation to FEAS/EFES – June 16th 2005

EUROPEEUROPE

France

United Kingdom

Holland

Germany

Switzerland

Belgium

Italy

Spain

Norway

Greece

PARTICIPATING COUNTRIES IN 2002 SCHEME

3

AFRICAAFRICA

South Africa

ASIAASIA

Singapore

Japan

Korea

Australia

AMERICASAMERICAS

Canada

United States

Presentation to FEAS/EFES – June 16th 2005

Promote employee share-ownership (without acting as financial or tax advisers)

Create a second line of communication to employee shareholders, complementing the first line (their direct reporting line)

Allow issues to be raised informally

Provide feed-back to management at any level, according to importance of issue (right up to main board, where there is a representative)

Enhance the common identity across the group

OBJECTIVES OF ASSOCIATIONS

4 Presentation to FEAS/EFES – June 16th 2005

Employer tends to treat shareholders as employees rather than shareholders (but employees have risked their own money and therefore expect personal treatment)

Trustee/registrar provides a service to employees under a contract with the company (trustee has split loyalties)

Falling share price can be demotivating

French withholding tax depresses investment returns, and partial recovery of that tax takes time and effort

For investors outside the Eurozone the investment is subject to fluctuations of exchange rate as well as of share price (and indeed different and less advantageous tax regimes)

PROBLEMS WITH SCHEMES

5 Presentation to FEAS/EFES – June 16th 2005

In 2005 the chairman organized a FAST video-conference in which 30 Thales sites participated from all over the world.

He meets every year the chairmen of the national associations, a good opportunity to meet representatives of the employee shareholders outside the management structure and in a geographic rather than sector-based context.

The employee-ownership shareholding (5-6%of total) is a unifying force for Thales employees, many of them far from France.

The 2002 offer was carried out in the framework of a global fund, FCPE (based on French rules), a novelty which binds together all the Thales countries (the 1998 and 2000 schemes had separate arrangements for each country).

The motivations of the employee shareholders vary, but in the “Anglo-Saxon” countries the return on investment carries weight.

POINTS TO NOTE

6 Presentation to FEAS/EFES – June 16th 2005

There were elections in March 2005 to select representatives of the employee shareholders for the supervisory board of the FCPE. One elected person will represent the investors of nine countries outside France

Nevertheless the non-French employee investors under the 1998 and 2000 schemes retain their rights of a direct vote and a presence in Thales general assemblies.

The statutes of associations vary from country to country. In certain countries, the members pay a subscription, but it is not always the case.

In certain countries, every employee shareholder is automatically a member of the association but in other countries not.

POINTS TO NOTE

7 Presentation to FEAS/EFES – June 16th 2005

An association established in 1998

Largest Thales employee shareholder group outside France (4200)

Committee of 14 representatives from various Thales UK companies

Meets quarterly near London

Chairman - Robert Scallon

Website and e-mail used as main communications channels

TUES -THALES UK EMPLOYEE SHAREHOLDERS

8 Presentation to FEAS/EFES – June 16th 2005

Daily stock market share price

Graphs of share performance (over last 5 years)

Forms and guidelines for selling shares

Guidelines for completing tax-forms

Change of Circumstances forms (for the trustee)

Calendar of events effecting share schemes

Reference material from all share schemes

Contact details for the TUES committee members and 18 more correspondents

TUES WEBSITE – www.tues.org.uk

9 Presentation to FEAS/EFES – June 16th 2005

Hereafter slides from our associations in the following countries:

SingaporeSwitzerland

BelgiumCanadaNorway

AustraliaS Africa

Japan

OTHER THALES ASSOCIATIONS

10 Presentation to FEAS/EFES – June 16th 2005