Remuneration Information • Mar 20, 2023
Remuneration Information
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Haleon Plc
Directors' adoption: 23 May 2022
Expiry Date: 20 April 2033
(as amended by the Committee on 13 March 2023)
Shareholder approval: [●] April 2023
Slaughter and May One Bunhill Row London EC1Y 8YY
PJC/IAB/RXQS
575783507
| Contents | Page | |
|---|---|---|
| The Haleon plc Deferred Annual Bonus Plan 2023 | 1 | |
| Introduction | 1 | |
| 1. | Meaning of words used | 1 |
| 2. | Granting Awards | 3 |
| 3. | Dividends and dividend equivalents | 4 |
| 4. | Vesting of Awards | 5 |
| 5. | Malus and Clawback | 6 |
| 6. | Leaving employment | 10 |
| 7. | Corporate Events | 11 |
| 8. | Tax | 12 |
| 9. | General Terms | 13 |
| 10. | Amendment and termination of the Plan | 16 |
| 11. | Governing Law | 17 |
| Schedule 1 United States | 18 |
An Award under the Plan can take the form of:
Grant and Vesting of the different types of Award work in similar ways but there are some differences in the mechanics of how they are granted and what happens after they Vest.
Following Vesting, Awards will be satisfied by the issue of new Shares or the transfer of "market purchase" Shares or treasury Shares to the Participant.
This introduction does not form part of the rules.
In these rules:
"Award" means a conditional right to acquire Shares (which may be a Conditional Award or a Nil-Cost Option) which is granted in respect of annual bonus foregone, as described in Rule 2.3;
"Award Date" means the date on which an Award is granted or any other date which the Committee sets in relation to an Award;
"Committee" means the remuneration committee of the board of directors of the Company or any person or group of persons to whom some or all of such body's functions under the Plan are delegated;
"Company" means Haleon plc (registered no. 13691224);
"Conditional Award" means a conditional right to acquire Shares following Vesting;
"Dealing Restrictions" means any restriction on dealing in securities imposed by law, statute, regulation, order, government directive or any dealing code adopted by the Company as varied from time to time;
"Directors' Remuneration Policy" means the directors' remuneration policy within the meaning of section 421(2A) of the Companies Act 2006;
"Dividend Equivalents" means a right to cash or Shares as described in Rule 3.2;
"Executive" means an executive director of the Company or any member of the Executive Team of the Company;
"Grantor" means the Member of the Group or other entity which has agreed to satisfy an Award as required by these rules or, if no entity has so agreed, the Company;
"Malus and Clawback Policy" means the Company's policy from time to time on the recoupment of value from current or former employees in connection with the Plan which is applicable to the Participant;
"Market Value" means, in respect of any day, the closing middle market quotation of a Share quoted on the London Stock Exchange for the immediately preceding day (or such other day selected by the Committee or the average closing price of up to five consecutive trading days selected by the Committee) on which the relevant market was open or, in the case of an American depositary share, the closing price quoted on the New York Stock Exchange for that same immediately preceding day (or such other day selected by the Committee or the average closing price of up to five consecutive trading days selected by the Committee), unless Conditional Awards Vest or Nil-Cost Options are exercised under Rule 7.1, in which case the Committee may determine that the market value of a Share is the price payable to acquire a Share in connection with a Takeover under Rule 7.1;
"Member of the Group" means the Company, its subsidiaries from time to time or any other company which the Committee determines should be treated as a Member of the Group for some or all purposes;
"Nil-Cost Option" means a right to acquire Shares granted under the Plan following exercise;
"Participant" means a person who has been granted an Award or, following the death of a Participant, their personal representatives;
"Plan" means this plan known as "The Haleon plc Deferred Annual Bonus Plan 2023" as amended from time to time;
"Recovery Period" has the meaning given to it in Rule 5.1;
"Relevant Employee Share Plan" means an employee share plan operated by a Member of the Group, other than an employee share plan which has been registered with HM Revenue & Customs for the purposes of the Income Tax (Earnings and Pensions) Act 2003 under Schedules 2 to 4;
"Share" means a fully paid ordinary share in the capital of the Company, and, where the context requires, includes an American depositary share representing Shares;
"Takeover" has the meaning given to it in Rule 7.1;
"Vesting" means a Participant becoming entitled to receive the Shares comprised in their Award and "Vest" shall be construed accordingly; and
"Vesting Date" means the date on which an Award would normally Vest which will be set by the Committee on the grant of the Award under Rule 2.2.
The Committee may select any employee (including an executive director) of the Company or any one of its subsidiaries to be granted an Award.
When granting an Award the Committee will decide:
The Grantor will grant to the Participant an Award over a number of Shares with a Market Value on the Award Date equal to the gross amount of bonus foregone (or, if the Committee so decides, the net amount of bonus foregone).
Additional Shares may be made subject to the Award in order to compensate the Participant for having agreed to pay or repay any employer national insurance or social security liability.
Awards may not be granted at any time after 20 April 2033.
The Award Date for an Award must be within the 42 days starting on any of the following:
Awards may also be granted on any other day on which the Committee resolves that exceptional circumstances exist which justify the grant of Awards.
Each Award will be granted by deed. Each Participant will receive or be directed to a certificate or statement (electronically or in hard copy) summarising the principal terms of the Award.
The Committee may establish additional schedules to the Plan for the benefit of employees outside the UK, based on the Plan but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any Shares made available under such further sub-plans are treated as counting against the limits set out in Rule 9.2.
A Participant shall not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of Shares subject to an Award unless and until the Shares are issued or transferred to the Participant.
If an Award carries Dividend Equivalents:
(A) unless the Committee decides otherwise, with effect from the payment date of each ordinary dividend declared on Shares between the Award Date and the Vesting Date, the number of Shares subject to the Award will be increased by the number of Shares which could be bought with the amount of the dividend payable on that number of Shares (including any previously added under this Rule 3.2) on the basis of the market value of a Share on the payment date; or
For the avoidance of doubt, the amount of a dividend, for these purposes, does not include the tax credit.
For the purposes of this Rule 3, "market value" means Market Value or, if the Committee so decides, the closing middle market quotation of a share quoted on the London Stock Exchange for the dividend payment date or, in the case of an American depositary share, the closing price quoted on the New York Stock Exchange for that day.
This will not apply to any dividend in respect of which an adjustment is made under Rule 7.4.
For the avoidance of doubt, a Participant is not entitled to receive Dividend Equivalents with respect to the time period between the Vesting Date and the date that the relevant Shares are issued or transferred to the Participant.
Subject to Rules 4.6, 5, 6 and 7, an Award will Vest on the Vesting Date (or, if there is more than one, as to the relevant number of Shares on each of the Vesting Dates).
Subject to Rules 4.5 and 4.6(B), as soon as practicable after the Vesting of an Award which takes the form of a Conditional Award , the Grantor shall procure that:
A Nil-Cost Option will become exercisable, in respect of the number of Shares in respect of which it has Vested, from the date on which it Vests for a period up to the tenth anniversary of the Award Date, unless the Grantor determined on the Award Date that a shorter period should apply or if Rules 6 (Leavers) or 7.1 (Takeovers) apply.
The Grantor will procure that the Participant is paid any amount due under Rule 3.2(B) (Dividend Equivalents) as soon as practicable after the Vesting Date.
A Nil-Cost Option may be exercised by the Participant giving written notice to the Company in such form as the Company may prescribe. A Nil-Cost Option will be deemed exercised on the last business day before the date on which it will lapse by virtue of this Rule 4.3.
Subject to Rules 4.5 and 4.6(B), within 30 days of the receipt of the notice (or of the deemed exercise), the Grantor shall procure that the number of Shares in respect of which the Nil- Cost Option has been exercised are issued or transferred to the Participant.
Any fractional number of Shares accrued as a result of Rule 3.2 (or any other reason) shall be aggregated as at the Vesting Date, and rounded up to the nearest whole Share, unless the Committee determines otherwise.
The Committee may, if it is necessary or desirable for regulatory, exchange control, compliance, administrative or other similar reason, decide to satisfy an Award or the exercise of a Nil-Cost Option by paying to the Participant an amount equal to the Market Value of the number of Shares which would otherwise be issued or transferred on the Vesting Date (or exercise, in the case of a Nil-Cost Option).
(A) The period during which the Committee may undertake any of the actions specified in Rules 5.3, 5.4 and 5.5 (the "Recovery Period") will, subject to Rule 5.1(A), be the period beginning on the Award Date and ending on the second anniversary of the day on which the Award Vests, unless the relevant provisions of any applicable law, rule, regulation or stock exchange rule as set out in Rule 5.6 below require otherwise (in which case the Recovery Period shall be the period specified in such law, rule, regulation or stock exchange rule).
Notwithstanding any other rule of the Plan, at any time before the end of the Recovery Period, the Committee may, on such basis as it considers in its absolute discretion to be fair, reasonable and proportionate, undertake any of the actions specified in Rules 5.3, 5.4 and 5.5, if the Committee considers there to be exceptional circumstances, including (without limitation):
(iii) reduce the number of Shares over which a vested but unexercised share award granted under any Relevant Employee Share Plan and held by the relevant Participant may be exercised,
on such basis that the Committee considers in its absolute discretion to be fair, reasonable and proportionate.
(B) The Committee may take any action referred to in Rule 5.3(A) to give effect to the operation of any withholding or recovery provisions similar to this Rule 5 in any Relevant Employee Share Plan, discretionary bonus plan or other incentive arrangement operated by a Member of the Group.
The provisions set forth in this Rule 5 are in addition to, and not in lieu of, any malus and clawback requirements imposed by any applicable law, rule or regulation or applicable stock exchange rule, including, without limitation, Section 304 of the U.S. Sarbanes-Oxley Act of 2002, Section 954 of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act, Section 10D of the U.S. Securities Exchange Act of 1934, Rule 10D-1 thereunder and any applicable stock exchange listing rule adopted pursuant thereto, as may be reflected in an applicable malus and clawback policy adopted by the Company. Further, the provisions in this Rule 5 shall apply notwithstanding anything to the contrary in this Plan, the Malus and Clawback Policy or any other applicable policy of the Company. By accepting an Award hereunder, the Participant expressly agrees that the Company may take such actions as are necessary or appropriate to effectuate the foregoing (as applicable to the Participant) or applicable law without further consent from the Participant (including requiring Awards to be repaid to the Company after they have been distributed to the Participant).
then their Award will lapse on the date they leave employment.
(C) A Nil-Cost Option which Vests on or after a Participant leaving employment will, subject to Rule 7, be exercisable for a period of twelve months following such Vesting and shall be automatically exercised at the end of that period to the extent it remains unexercised.
(D) A Nil-Cost Option which is already exercisable on a Participant leaving employment will, unless Rule 6.1(B) or 7 applies, continue to be exercisable for a period of twelve months following such leaving and shall be automatically exercised at the end of that period to the extent it remains unexercised.
For the purposes of this rule, a Participant will be treated as 'leaving employment' when they are no longer an employee or executive director of any Member of the Group and not before.
If there is a Takeover, each Award will Vest on the date of the Takeover.
Any Nil-Cost Option which Vests or is already exercisable on the date of the Takeover will be exercisable for a period of six weeks following such date and shall be automatically exercised at the end of that period to the extent it is unexercised.
Alternatively, the Committee may decide that some or all Awards will be automatically exchanged in accordance with Rule 7.2 or may allow the Participant to choose Vesting or exchange.
There is a "Takeover" if:
"Control" has the meaning given to it by Section 995 of the Income Tax Act 2007.
If an Award is to be exchanged, the following provisions will apply:
(E) With effect from the exchange, the rules will be construed in relation to the new award as if references to Shares were references to the shares over which the new award is granted and references to the Company were references to the body corporate determined under Rule 7.2(A).
If the Committee becomes aware that the Company is or is expected to be affected by any variation in share capital, demerger, distribution (other than an ordinary dividend) or other transaction (other than a Takeover) which, in the opinion of the Committee could affect the current or future value of Shares, the Committee may allow Awards to Vest in whole or in part, subject to any conditions the Committee may decide to impose, or may require them to be exchanged under Rule 7.2.
If there is:
the Committee may adjust the number or class of Shares or the identity of the securities subject to the Award in such manner as it see fit.
In this Rule 7, "Committee" means those people who were members of the Committee immediately before the event by virtue of which this rule applies.
The Participant will be responsible for all taxes, social security contributions or other levies arising in connection with an Award and will, if required to do so, agree to the transfer of liability for employer national insurance or social security contributions to them.
The Company, any employing company or trustee of any employee benefit trust, will withhold any amounts or make such arrangements as it considers necessary to meet any liability it has to pay or account for any such taxation or social security contributions or other levies. These arrangements may include the sale of or reduction in the number of Shares to which a Participant would otherwise be entitled or the deduction of the amount of the liability from any cash amount payable to the Participant under the Plan or otherwise.
The Participant will promptly do all things necessary to facilitate such arrangements and, notwithstanding anything to the contrary in the Plan, Vesting or the issue or transfer of Shares may be delayed until they do so. Without prejudice to the above, each Participant authorises the Company, any Member of the Group or trustee of any employee benefit trust to sell or procure the sale of sufficient Shares following the Vesting or exercise of the Award on the Participant's behalf to obtain sufficient funds to enable the Company, any Member of the Group, any former Member of the Group or trustee of any employee benefit trust to discharge any obligation it may have to pay tax or social security contributions (including employer's social security contributions where appropriate) or levies arising in respect of the Vesting or exercise of the Award to the relevant tax authorities.
Awards may be satisfied with newly issued Shares, treasury Shares or Shares purchased in the market in conjunction with an employee benefit trust.
The number of Shares which may be allocated under the Plan on any day will not exceed 10% of the ordinary share capital of the Company in issue immediately before that day, when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other employee share scheme adopted by the Company.
The number of Shares which may be allocated under the Plan on any day will not exceed 5% of the ordinary share capital of the Company in issue immediately before that day when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other discretionary share scheme adopted by the Company.
"Allocate" means granting a right to acquire unissued Shares or the issue and allotment of Shares. Rights which have lapsed or been surrendered will not count towards these limits.
For so long as required under institutional shareholder guidelines, the transfer of treasury Shares shall be treated as the issue of new Shares for the purposes of this limit.
A Participant may not transfer, assign or otherwise dispose of an Award or any rights in respect of it. This Rule 9.3 does not apply to the transmission of an Award on the death of a Participant to their personal representatives.
The Company is not required to send to any Participant a copy of any documents which the Company is required to send to its shareholders.
The decision of the Committee in connection with any interpretation of the rules of the Plan or in any dispute relating to any matter relating to the Plan will be final and conclusive.
The Committee has power from time to time to make or vary regulations for the administration and operation of the Plan.
Awards do not form part of a Participant's remuneration for the purpose of determining entitlement to any benefit of employment including any pension or retirement benefit, life assurance, permanent health insurance or other similar benefit, whether existing or subsequently introduced.
All issues or transfers of Shares will be subject to any necessary consents under any relevant enactments or regulations for the time being in force and it will be the Participant's responsibility to comply with any requirements to be fulfilled in order to obtain or obviate the necessity for any such consent.
Any notice or other document which has to be given to a Participant under or in connection with the Plan may be delivered or sent by post to them at their home address according to the records of their employing company or sent by e-mail or fax to any e-mail address or fax number which according to the records of their employing company is used by them, or in either case such other address which the Company considers appropriate.
Any notice or other document which has to be given to the Company or other duly appointed agent under or in connection with the Plan may be delivered or sent by post to it at its respective registered office (or such other place as the Committee or duly appointed agent may from time to time decide and notify to Participants) or sent by e-mail or fax to any e-mail address or fax number notified to the sender.
Notices sent by post will be deemed to have been given on the second day after the date of posting. However, notices sent by or to a Participant who is working outside the United Kingdom and outside the United States of America will be deemed to have been given on the seventh day after the date of posting.
Notices sent by e-mail or fax, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending.
If any documents relating to the Plan or any Award are provided in any language other than English, in the event of any conflict between that version and the English version, the English version shall prevail.
Except as described in the rest of this Rule 10, the Committee may at any time change the Plan in any way. Changes may affect Awards already granted.
The Committee is not required to give notice of any changes made to any Participant affected.
The Committee may terminate the Plan at any time but it will terminate automatically on 20April 2033. The termination of the Plan will not affect existing Awards.
The Plan will be governed by and construed in accordance with English law. Any Member of the Group and all Participants shall submit to the exclusive jurisdiction of the English Courts as regards any matter arising under the Plan.
The rules of this Schedule are made under and amend and supplement (as applicable) the terms of the Plan and any related Schedules. The rules of this Schedule apply to those Participants who are employees of a Member of the Group and are subject to U.S. taxation ("US Participants"). Awards made under this Schedule are intended to comply with Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). In the event of any conflict, this Schedule shall override or modify (as applicable) the rules of the Plan and/or any other applicable Schedule.
The words and expressions used in this Schedule which have capital letters have the same meaning as they have in the rules of the Plan and/or any other applicable Schedule unless defined in or modified by this Schedule.
Awards granted to US Participants shall not include any Nil-Cost Option.
If an Award carries Dividend Equivalents, with effect from the payment date of each ordinary dividend declared on Shares between the Award Date and the date an Award is paid, the number of Shares subject to the Award will be increased by the number of Shares which could be bought with the amount of the dividend payable on that number of Shares (including any previously added under this paragraph 4) on the basis of the Market Value of a Share on the payment date of such dividend.
Awards granted to US Participants may only be satisfied with newly issued Shares, Shares transferred from treasury or Shares and/or cash from a trust which satisfies the following characteristics:
The Shares or cash underlying an Award granted to a US Participant under this Schedule shall be distributed to that US Participant only on one or more of the following events, as shall be designated by the Committee as of the Award Date or such earlier date as may be required by Section 409A of the Code:
The Committee shall inform theParticipant of the applicable distribution events no later than on the Award Date or, if earlier, the date that any US Participant obtains a legally binding right, whether or not contingent, to an Award under this Schedule. No provision of this Schedule or the Plan that accelerates or extends the period for making a distribution will apply to an Award under this Schedule except to the extent that such acceleration or extension complies with Section 409A of the Code. Further, until the delivery of suchShares or cash, the rights of a US Participant with respect to an Award granted under this Schedule shall only be those of a general unsecured creditor of the Company.
Unless otherwise determined by the Committee, any modification of an Award pursuant to Rule 5.3(A)(ii) or 5.3(A)(iii) of the Plan rules will not be made if it would cause adverse tax consequences under Section 409A of the Code.
Although neither the Committee nor any Member of the Group guarantees any particular tax treatment to a US Participant, Awards granted pursuant to this Schedule are intended to comply with Section 409A of the Code and the Plan, all Rules thereunder and all such Awards shall be limited, construed, interpreted and administered in accordance with such intent. Further, notwithstanding any provision of the Plan to the contrary, the Committee may adopt such amendments to the Plan and any applicable Award certificate or statement issued to the US Participant or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, including amendments or actions that would result in a reduction to the benefits payable under an Award, in each case, without the consent of the US Participant, that the Committee determines are necessary or appropriate to (A) preserve the intended tax treatment of the benefits provided with respect to the Award, or (B) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section. Neither the Company nor any Member of the Group shall have any liability to a US Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee.
All income, social security or other taxes (excluding the employer portion of social security taxes) of any kind (including penalties and interest) relating to the Awards subject to Section 409A of the Code made under this Schedule will be borne by the USParticipant.The Company or another Member of the Group may withhold from any payment (including, to the extent permitted by law, any salary, bonus, commissions or any payment of any kind otherwise due to the US Participant) or delivery of Shares any tax and social security contributions that are required to be withheld under any applicable law, rule or regulation.
The Committee may amend or terminate this Schedule at any time.
The terms of this Schedule shall be binding upon and inure to the benefit of the Company and its successors and assigns.
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