AeANET : AeA Monthly News, May 2006

AeA Chairman Leads Senior Executive Delegation to Beijing & Shenzhen, China

For the fifth consecutive year, AeA organized a trip to China for senior executives from member companies that took place April 4-6. This year�s delegation of 11 senior executives was led by AeA's Chairman Tom Edman, CEO, Applied Films, Corporation (bio), and William T. Archey, President and CEO, AeA (bio). In a variation on past trips, the group visited Shenzhen for the first time in addition to the customary stop in Beijing.

The AeA delegation leveraged meetings with the U.S. Embassy and the Chinese Ministry of Commerce to raise ongoing industry concerns over intellectual property protection, troublesome developments on standards, and the lack of movement on China joining the World Trade Organization Government Procurement Agreement. They also discussed the work of AeA on competitiveness and how this paralleled many of the ideas included in the most recent five year plan of the Chinese government as well as its 15 year science and technology plan.

The delegation once again heard from a number of business people with substantial on-the-ground experience in China about the economic and political environment. The senior executives were able to engage these local experts on the full range of issues confronting U.S. companies doing business or seeking to do business in China. Some of the takeaways for the delegation included:

China�s economy is expected to continue growing at a rate of about 9 percent for 2006;
Maintaining social stability remains the number one priority for the Chinese government which is leading to initiatives aimed at the rural areas. A small but growing group of leaders are raising questions about the current economic approach;
U.S.-China trade relations have worsened in recent months with concern over the trade deficit, the Chinese currency, and continuing problems with IPR. The JCCT meeting and the visit of President Hu to the U.S. in April will determine which direction relations trend;
Chinese focus on �self-reliant innovation� has heightened concerns that the government will use standards to hinder U.S. business in China;
Finding and keeping good talent, especially middle managers, remains one of the most pressing challenges for U.S. companies in China. Turnover, with extensive poaching, is about 14 percent;
Chinese high-tech companies, such as ZTE, are moving quickly up the value chain and aggressively branching into international markets; and
Shenzhen is a dynamic high-tech center where business enjoys strong support from local government.

To learn more about the wealth of information gathered during our three days of meetings, panel discussions, and facility tours, please read the Chairman�s trip report which provides a more detailed summary of the program.

Rob Mulligan (bio)
Senior Vice President, International

AeA delegation meets with the Shenzhen City Government	AeA delegation tours a Chinese factory

AeA tours ZTE facility in Shenzhen	AeA delegation meets with Chinese Ministry of Commerce in Beijing

AeA Represents Members at 37th Session of World Customs Organization�s Harmonized System Committee in Brussels

37th WCO's Harmonized System Committee
Carlos Halasz, HP; Ken Montgomery, AeA; and Richard Uschyk, ICC (L-R)

Carlos Halasz, Global Trade, HP, and the East Coast Chair of the AeA Customs Committee, and Ken Montgomery, Director, International Trade Regulation, AeA, represented AeA at the 37th WCO Harmonized System Committee in Brussels, Belgium, on March 20-24. Also in attendance was Mr. Richard Uschyk, International Chamber of Commerce (ICC) Representative, to the WCO...read more.

For more information on the International Issues affecting your company, visit:

Progress on SOX 404 Relief for Up to 80% of Public Companies

Proposed Relief: On April 20, the SEC's Advisory Committee on Smaller Public Companies met and voted in support of recommendations to improve Sarbanes-Oxley Section 404. The overwhelming majority of committee members, including Alex Davern, CFO of National Instruments and the chairman of AeA's SOX 404 committee, voted in support of the proposals.

It is now up to the SEC to decide whether to act on the proposals; however, it is unlikely the SEC will do anything before mid-May. If adopted by the SEC, the Advisory Committee's recommendations would provide substantial relief from Section 404 and would affect nearly 80 percent of public companies. AeA commented on the Advisory Committee's Exposure Draft in April and expressed strong support for the recommendations pertaining to internal controls.

SEC and PCAOB Roundtable: On May 10, the SEC and PCAOB will host a roundtable on internal controls in Washington, DC, to discuss the second-year experiences related to companies� internal control over financial reporting. Roundtable participants will include issuers, auditors, investors, and other interested parties. This is going to be a very important event, which will likely have a substantial impact on any future SOX 404 actions taken by the SEC, PCAOB, and Congress.

IRS Seeks Comments on Cross-Licensing Arrangements

In Notice 2006-34, the Treasury Department and IRS formally requested feedback regarding the treatment of cross-licensing arrangements. They are soliciting a great deal of information on the broad range of circumstances involved in a cross-licensing agreement. This Notice suggests that the IRS is considering guidance on the possible taxation of cross-licensing arrangements and the potential withholding tax consequences if a foreign party is involved.

A cross-licensing agreement is essentially an agreement between two patent holders in which each party agrees not to sue the other for patent infringement. These agreements allow companies to advance their products to the next level of technology without the constant threat of being sued by their competitors.

The deadline for submitting comments is May 31. AeA plans to submit comments. If you are interested in participating in this effort, please contact Marie Lee at marie_lee@aeanet.org or 202.682.4448.

John Palafoutas (bio)
Senior Vice President, Domestic Policy and Congressional Affairs

AeA/SGA State Policy Action Network Conference Heading to Nashville this August

Join us August 14-15th in Nashville, Tennessee for AeA/SGA's State Policy Action Network (SPAN) Conference, timed to coincide with the National Conference of State Legislature's (NCSL) 32^nd Annual Meeting in Nashville

High-tech state government affairs professionals from all over the nation are planning to attend this semi-annual meeting - timed to both recap all that went on in the 2006 legislative session, and plan for the upcoming 2007 session. We'll engage in discussions on important policy issues surrounding high tech at the state level, and fine-tune AeA's State Government Affairs program to address member company legislative needs.

Our policy discussion will be kicked off with a keynote federal update by Bill Archey, AeA's President & CEO. Issue tutorials covered will include E-Commerce & Online Safety, E-Waste, and Municipal Broadband issues at the State Level.

When registering at the Sheraton Music City Hotel, please mention the AeA SPAN Meeting for the special $135 room rate. For more agenda information, and to register, visit our website at www.aeanet.org/span2006.

For information on how you can get involved with AeA's State Policy Action Network, please contact Marc-Anthony Signorino, AeA's Director of State Government Affairs at Marc-Anthony_Signorino@aeanet.org or at 202.682.4428.

Marc-Anthony Signorino (bio)
Director, State Government Affairs

Network Appliance and Plantronics' CEOs to Speak at the
AeA/Stanford Executive Institute, August 13-24

Daniel Warmenhoven
CEO
Network Appliance

Ken Kannappan
Director, President, & CEO
Plantronics

AeA and Stanford University are pleased to announce that Daniel Warmenhoven, CEO of Network Appliance (bio), and Ken Kannappan, Director, President and CEO, of Plantronics (bio), will be the 2006 Keynote speakers at the 2006 AeA/Stanford Executive Institute, August 13-24. Each year, AeA selects two prominent CEO guest speakers who helped drive their company's success to share their insights and leadership perspectives with attending executives.

In addition to hearing from CEO speakers, participants will work with industry experienced faculty to identify practical solutions to the technology industry's critical business and leadership challenges. The AeA/Stanford Institute draws over 100 senior executives from around the word and brings faculty from Stanford University's prestigious Graduate School of Business and School of Engineering, University of California at Berkeley, IMD, and Keck Graduate School.

This acclaimed program has advanced the careers of more than 3,300 executives over the past 3 decades. To reserve seats or request more information, visit www.aeanet.org/stanford.

Training for New and Mid-Level Managers

Seats are filling fast for the 2006 AeA/Santa Clara University Management Development Program, June 12-15. Nominate or register your managers to attend this four-day intensive course designed for new and mid-level leaders from any functional area within high-tech. Participants learn broad business skills and team leadership techniques from technology experienced Santa Clara University business faculty.

This year, guest speaker and leadership guru Dr. Barry Posner, author of The Leadership Challenge: How to Keep Getting Extraordinary Things Done in Organizations, will introduce participants to the five practices of exemplary leadership.

To reserve seats in either program call Jeannine Seremi-Banayat at 408.987.4276 or visit www.aeanet.org/education for more information.

AeA Technology for Government Dinner

RIM Chairman & Co-CEO to Keynote Annual AeA Technology for Government Dinner - Register Today!

Wednesday, June 7, 2006
Washington, DC

The annual AeA Technology for Government (T4G) Dinner is a premier event bringing hundreds of industry, congressional, and government leaders together at one venue in Washington, DC. Last year, more than 500 people attended the dinner, including:

Members of Congress;
30 Chief Information Officers;
procurement officials from over 20 different Federal agencies;
officials from the Bush Administration; and
dozens of executives representing high-tech companies.

Sponsorship and table sponsorships are still available. For more information please contact Goldy Kamali, Manager, Government Procurement & Events, at 202.682.4432, or register for a table or individual seat online today!

Keynote Speaker

Jim Balsillie

Jim Balsillie is Chairman and Co-CEO at Research In Motion (RIM), manufacturer of the Blackberry. He is responsible for directing RIM's strategy, business development, and finance.

Previous Speakers
2005: Anne M. Mulcahy, Chairman and CEO, Xerox
2004: Bruce Chizen, President and CEO, Adobe
2003: Christopher Galvin, former CEO, Motorola

Current Sponsors

Platinum Sponsor

Gold Sponsor

Silver Sponsors

Table Sponsors & Dinner Patrons

Aetna | Agilent Technologies | Ciena Corporation | FSI | Intel Corporation

Stratus Technologies | Texas Instruments | Viisage

In Partnership with Avis and Hertz

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To order free coupons or request more information on AeA�s Car Rental Programs, click here.

Wednesday, May 17 - Friday, May 19, 2006
La Cantera Resort in San Antonio, Texas

AeA's second annual CEO Leadership Retreat will attract the top executives from some of America's most successful technology-related companies. They will learn from experts in their field and share practical, real-world insights on how their companies can be more competitive.

At this important event AeA brings together world-class, highly relevant, insightful speakers with CEOs, giving them an opportunity to participate in small group discussions designed to spark debate and foster the growth of new ideas. All while enjoying the company of peers, gourmet food, and relaxing golf deep in the heart of Texas' hill country at the beautiful La Cantera Resort in San Antonio.

World Class Speakers and Presentations including:

Emmitt Smith,
Chairman of the Board, Prova Group Inc.,
President, Smith Cypress Partners,
NFL All-Time Leading Rusher
�From NFL Champion to RFID Champion�

Tom Shelman, CIO, Northrop Grumman, �The Future CIO: Five Keys to Success�

Bill Archey, President and CEO, AeA, "Competitiveness-How Washington and the Nation Woke up to the Challenges"
Julie England, Vice President, Texas Instruments, "TI Envisions RFID at the Edge of Evolving Wireless and Sensor Networks"

For more information regarding the retreat or registration, please contact Jessica Acuna at 512.474.4403 or jessica_acuna@aeanet.org.

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Virginia Is the Fastest Growing Tech State Nationwide
AeA Releases New Cyberstates 2006 report

Fastest Growing Cyberstates by Tech Employment
2003 - 2004

Twenty-five cyberstates saw their technology industry employment grow in 2004, with the largest growth in Virginia, adding 9,100 tech jobs. Florida was the second fastest growing cyberstate with an increase of 6,700 tech jobs.

For more details on the technology industry in your state, see AeA's recently released report, Cyberstates 2006: A Complete State-by-State Overview of the High-Technology Industry. This ninth annual edition provides comprehensive information on the high-tech industry nationally and state-by-state by:

high-tech employment
high-tech wages
high-tech payroll
high-tech establishments
technology exports
venture capital investments
research and development expenditures

Source: Cyberstates 2006

For more information on Industry Data and AeA Publications visit
www.aeanet.org/research

AeA Senior Delegation to China

AeA's Annual China Trip brought eleven senior executives from U.S. high-tech companies to Beijing & Shenzhen, China, for meetings with Chinese government officials, Chinese business leaders, and staff from the U.S. embassy between April 4-6. Issues discussed ranged from Intellectual Property protection to the U.S.-China trade relationship. The delegation visits ZTE in the above picture.

Armond Mascelli, Vice President of Domestic Disaster Response Operations for the American Red Cross

On April 6, local and state government officials and Florida technology executives convened at Terremark's NAP of the Americas facility in Miami, FL, to discuss best practices / technical solutions to enable IT and communications continuity during and after a disaster. Pictured is Armond Mascelli, Vice President of Domestic Disaster Response Operations for the American Red Cross , who gave the event's afternoon keynote address.

David Wennergren, Chief Information Officer, Dept. of the Navy

David Wennergren (pictured), Chief Information Officer, Dept. of the Navy, discussed the Navy's IT Goals for FY06-FY07 at AeA's April Technology for Government (T4G) Taskforce meeting to 50+ member companies at AeA's DC headquarters on April 11. Additional speakers included Charlie Armstrong, Deputy Chief Information Officer, Dept. of Homeland Security, and Dr. Robert. M. Kolodner, MD, Chief Health Informatics Officer, Veterans Health Administration.

AeA Midwest E-Waste Event

On April 11, Becky Linder, Director, International Trade Policy, AeA; Mike Loch, Director, EHS Strategic Initiatives, Motorola; James Lovegrove, Managing Director, AeA Europe; Ed Longanecker, Executive Director, AeA Midwest (L-R); and others presented the latest developments in EU and China RoHS/WEEE environment requirements at Motorola's corporate headquarters in Schaumburg, IL.

Frank Orlendella Cyberstates 2006 presentation

AeA presented its new Cyberstates 2006 data in a presentation, "The United States and the High-Tech Industry" to the press and 30+ U.S. Congressional staff members on April 20, in Washington, DC, on Capitol Hill. Pictured is AeA's National Government Affairs Committee Chairman Frank Orlendella, Agilent Technologies, opening the event and presenting the Cyberstates report. A special thanks to Agilent for sponsoring this event.

Gov. Perdue (R-GA) Signs AeA Telework Bill into Law

On April 20, Governor Sonny Perdue (R-GA) signed into law a historic bill that provides tax credits for businesses in Georgia for employees who telework. The Telework Bill (HB 194) was sponsored by Rep. Chuck Martin (R-Alpharetta) - (5th person from left). On hand for the ceremony were also Randy Keith, Chair of the AeA's Technology Leadership Coalition and CEO of Synthis, Inc. (7th person from left behind Governor); Carlos Cardoso, SE Regional Government Affairs Manager for HP (3rd person from the left); and Mike Levin, AeA SE Council Executive Director (directly behind Governor).