Speechly Bircham has completed an unusual major restructuring transaction for longstanding client PA Consulting Group. PA, a management, systems and technology consulting company, instructed Speechlys corporate partner Tom Shaw to help develop a structure to ensure the fair allocation of gains from its investments in venture activities to its employees. The transaction marked the further development of a new structure introduced at PA in 1997, on which Speechlys also advised. Prior to 1997, the bulk of PA's equity was held by a trust on behalf of employees. But for staff incentive purposes, it was replaced by a system whereby all staff are now offered equity. Since then, PA has invested in venture activities as a significant adjunct to its main consultancy activity. Pieces of intellectual property are spun out into special purpose venture companies and returns are realised some time after the initial investment. Consistent with its ownership culture, PA wanted to achieve a fair allocation of gains between the generation of ordinary shareholders who bore the cost of investment in each venture and the generation of shareholders who hold ordinary shares at the time the venture is realised. The structure devised to achieve this involved inserting a Bermuda-based intermediate holding company within the group that issues so-called 'alphabet shares', to be held by PA's shareholders in addition to their existing shares. The economic rights attached to each class of alphabet shares relate to the success of the venture to which they 'track'. Implementation was in three key stages: a reorganisation of the group to insert the intermediate Bermuda holding company; the creation and distribution of alphabet shares in the Bermuda company; and a listing of preference shares on the Luxembourg Stock Exchange, on which Speechlys senior assistant Justin Starling led, working with Luxembourg's De Bandt van Hecke Lagae & Loesch (now Linklaters Loesch). Maxine Drabble, PA company secretary, said: "Speechlys' in-depth knowledge of our governance structure and remuneration philosophy made it an invaluable member of the team on this complex project." Advice on tax and securities law was obtained from more than 20 law firms around the world, coordinated by Speechlys. Tax partner James Carter advised jointly with Ernst & Young. Stephen Brandon QC of 24 Old Buildings was also consulted on UK tax. Last minute problems cropped up, with the US Securities and Exchange Commission refusing to give a securities filing "no action" letter late last year. This required a change of approach, creating UK corporate law problems, which were overcome with help from Martin Moore of Erskine Chambers. The New York office of Loeb & Loeb handled the US securities law aspects. Bermuda firm Conyers Dill & Pearman provided the Bermuda law input, while Travers Smith Braithwaite advised PA's employee benefit trust on the impact of the restructuring.