Remuneration Information • Apr 4, 2023
Remuneration Information
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Approved by shareholders of the Company on [11 May] 2023
Adopted by the board of the Company on 1 March 2023
Registered with HMRC on [DATE] under reference [ERS REGISTRATION NUMBER]
Expiry date: [11 May] 2033
The Plan is a discretionary benefit offered by the Clarkson group for the benefit of its employees. Its main purpose is to increase the interest of the employees in Clarkson'slong-term business goals and performance through share ownership. The Plan is an incentive for the employees' future performance and commitment to the goals of the Clarkson group.
Shares purchased under the Plan, any cash received under the Plan and any gains made by exercising options granted under the Plan are not part of salary for any purpose (except to any extent required by statute).
The remuneration committee of the board of Clarkson PLC shall have the right to decide, in its sole discretion, whether or not further option will be offered and to which employees those options will be granted.
Participating in the Plan is an investment opportunity distinct from any employment contract. Participation in the Plan entails the risks associated with an investment. An individual who participates in the Plan is treated as being aware of such risks and accepts such risks of his own free will.
The detailed rules of the Plan are set out in this document.
| Part A - Schedule 4 Tax-Advantaged Options 1 |
|
|---|---|
| 1. | Definitions And Interpretation1 |
| 2. | Eligibility2 |
| 3. | Grant Of Options3 |
| 4. | Limits5 |
| 5. | Exercise Of Options7 |
| 6. | Leavers And Deceased Participants9 |
| 7. | Takeovers And Other Corporate Events11 |
| 8. | Adjustment Of Options15 |
| 9. | Alterations 16 |
| 10. | Miscellaneous17 |
| Part B - Non Tax-Advantaged Options19 |
|
| 1. | Definitions And Interpretation19 |
| 2. | Eligibility20 |
| 3. | Grant Of Options20 |
| 4. | Limits22 |
| 5. | Exercise Of Options23 |
| 6. | Leavers And Deceased Participants27 |
| 7. | Takeovers And Other Corporate Events28 |
| 8. | Adjustment Of Options31 |
| 9. | Clawback 31 |
| 10. | Alterations 33 |
| 11. | Miscellaneous34 |
| Schedule 1 - Share Appreciation Rights 36 |
1.1 In this Part A of the Plan, unless the context otherwise requires:
"Board" means the board of directors of the Company or a duly authorised committee of the Board or a duly authorised person;
"Committee" means the remuneration committee of the Board or, on and after the occurrence of a corporate event described in Rule 7 (Takeovers and other corporate events), the remuneration committee of the Board as constituted immediately before such event occurs;
"Company" means Clarkson PLC (registered in England and Wales with registered number 01190238);
"Control" means control within the meaning of section 995 of the Income Tax Act 2007;
"Grant Date" means the date on which an Option is granted;
"Group Member" means:
"HMRC" means HM Revenue & Customs;
"ITEPA" means the Income Tax (Earnings and Pensions) Act 2003;
"Listing Rules" means the Listing Rules published by the Financial Conduct Authority;
"London Stock Exchange" means London Stock Exchange plc or any successor to that company;
"Option" means a right to acquire Shares granted under the Plan;
"Participant" means a person who holds an Option including his personal representatives;
"Participating Company" means the Company or any Subsidiary;
"Performance Condition" is a condition related to performance which is specified by the Committee under Rule 3.1 (Terms of grant);
"Plan" means this Part A of the Clarkson PLC 2023 Share Option Plan as amended from time to time;
"Restriction" means any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 ITEPA (Restricted securities) would apply if the references in those subsections to the employment-related securities were to Shares and the 'restriction' is such provision;
"Rule" means a rule of the Plan;
"Schedule 4" means Schedule 4 to ITEPA;
"Schedule 4 plan" means a share option plan which meets the requirements of Parts 2 to 6 of Schedule 4;
"Shares" means fully paid ordinary shares in the capital of the Company which satisfy the requirements of paragraphs 16 to 18 and paragraph 20 of Schedule 4 (fully paid up, ordinary share capital) unless Rule 7.5 (Exercise following disqualifying event) applies;
"Subsidiary" means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006) of the Company and of which the Company has Control;
"Tax Liability" means any amount of tax or social security contributions for which a Participant would or may be liable and for which any Group Member or former Group Member would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority.
Subject to Rule 2.3 (Individuals not eligible), an individual is eligible to be granted an Option only if he is a full-time director or qualifying employee as defined in Rule 2.2 (Individuals eligible).
For the purposes of Rule 2.1:
An individual is not eligible to be granted an Option at any time when he is not eligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 (material interest in a close company). An individual is not eligible to be granted an Option at any time when they are an executive director of the Company.
to any person who is eligible to be granted an Option under Rule 2 (Eligibility).
An Option shall be granted by deed executed by the Company.
Unless specified to the contrary by the Board at the time of grant of an Option, an Option may be satisfied:
(c) by the transfer of Shares (other than the transfer of treasury Shares).
The Committee may decide to change the way in which it is intended that an Option may be satisfied after it has been granted, having regard to the provisions of Rule 4 (Limits).
The Committee shall decide before an Option is granted the price at which Shares may be acquired by the exercise of that Option, but the price shall not be less than:
For the purposes of determining the minimum Option price under this Rule 3.4, any Restrictions applying to the Shares shall be ignored.
Subject to Rule 3.7 (Approvals and consents), an Option may only be granted:
but an Option may not be granted after [10 May] 2033 (that is, the expiry of the period of 10 years beginning with the date on which the Plan is approved by shareholders of the Company).
An Option granted to any person:
The grant of any Option shall be subject to obtaining any approval or consent required under the Listing Rules, any relevant share dealing code of the Company, the City Code on Takeovers and Mergers, or any other relevant UK or overseas regulation or enactment.
Each Participant shall be sent or notified of employee communication materials as soon as practicable after the grant of the Option, which shall include the information set out in Rule 3.1(c) above.
An Option shall not be granted in any calendar year if, at the time of its proposed Grant Date it would cause the number of Shares allocated (as defined in Rule 4.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other executive share plan adopted by the Company to exceed such number as represents 5 per cent of the ordinary share capital of the Company in issue at that time.
An Option shall not be granted in any calendar year if, at the time of its proposed Grant Date, it would cause the number of Shares allocated (as defined in Rule 4.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents 10 per cent of the ordinary share capital of the Company in issue at that time.
For the purposes of Rules 4.1 and 4.2:
For the purposes of Rule 4.3:
(a) where:
the unissued Shares or treasury Shares which consequently cease to be subject to the option, award or other contractual right shall not count as allocated; and
(b) the number of Shares allocated in respect of an option, award or other contractual right shall be such number as the Board shall reasonably determine from time to time.
Treasury Shares shall cease to count as allocated Shares for the purposes of Rule 4.3 if institutional investor guidelines cease to require such Shares to be so counted.
Subject to Rule 4.7 (Schedule 4 limit), the maximum total market value of Shares (calculated as set out in this Rule) over which Options may be granted to any employee during any financial year of the Company is 150 per cent of his salary (as defined in this Rule), unless the Committee decides that exceptional circumstances exist, such as in relation to the recruitment or retention of an eligible employee, in which case the maximum total market value of Shares over which Options may be granted to that employee during a financial year of the Company is 200 per cent. of his salary (as defined in this Rule).
For the purpose of this Rule 4.6:
For the purposes of calculating the market value under this Rule 4.6(b), any Restriction applying to the shares under option shall be ignored.
No person shall be granted an Option which would, at the time it is granted, cause the total market value (as defined in paragraph 36(1) of Schedule 4) of the shares (calculated as set out in Rule 4.6(b)) which he may acquire as a result of options granted to him (and not exercised, surrendered or lapsed) under:
to exceed £30,0001 (or such other limit as may from time to time be imposed by Schedule 4).
Any Option shall be limited and take effect so that the limits in this Rule 4 are complied with.
An Option may only be exercised on the later of:
except where Rule 6 (Leavers and deceased Participants), Rule 7.1 (General offers), Rule 7.2 (Schemes of arrangement or non-UK arrangement), Rule 7.3 (Compulsory acquisition), Rule 7.6 (Winding up) or Rule 7.7 (Demergers and similar events) applies.
An Option may only be exercised to the extent:
The Option shall lapse regardless of any other Rule to the extent any Performance Condition is not satisfied.
1 At the date the Plan was adopted the limit under paragraph 6 of Schedule 4 was £30,000. The UK government has announced that it intends to introduce legislation to increase the limit to £60,000 in early 2023. The Plan will automatically benefit from the increased limit (and any further changes).
Where, under Rule 6 (Leavers and deceased Participants) or Rule 7 (Takeovers and other corporate events), an Option would (subject to the satisfaction of any Performance Condition) become exercisable before the end of the full period over which performance would otherwise be measured under any Performance Condition then, unless provided to the contrary by the Performance Condition, the extent to which the Performance Condition has been satisfied in such circumstances shall be determined by the Committee on such objective, fair and reasonable basis as it decides.
An Option may not be exercised unless the following conditions are satisfied:
For the purposes of this Rule 5.3, references to Group Member include any former Group Member.
A Participant shall not be eligible to exercise an Option at any time when he is not eligible to participate in Part A of the Plan by virtue of paragraph 9 of Schedule 4 (material interest in close company).
Except as provided in Rule 6.1 (Deceased Participants), an Option may not in any circumstances (and regardless of any other Rule) be exercised after the expiry of 10 years beginning with the Grant Date (or such shorter period beginning with the Grant Date as the Committee may have decided on or before the grant of that Option) and if not exercised shall lapse at the end of such period.
An Option must be exercised to the maximum extent possible at the time of exercise unless the Committee, acting fairly and reasonably, decides that a Participant may exercise his Option in respect of such fewer number of Shares as it decides.
The exercise of any Option shall be effected in the form and manner prescribed by the Board. Any notice of exercise shall, subject to Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company) take effect only when the Company receives it, together with:
No Shares may be issued or treasury Shares transferred to satisfy the exercise of any Option to the extent that such issue or transfer would cause the number of Shares allocated (as defined in Rule 4.3 (Meaning of "allocated") and adjusted under Rule 4.4 (Post-grant events affecting numbers of "allocated" Shares)) to exceed the limits in Rules 4.1 (5 per cent in 10 years limit) and 4.2 (10 per cent in 10 years limit) except where there is a variation in the share capital of the Company which results in the number of Shares so allocated exceeding such limits solely by virtue of that variation.
Within 30 days after an Option has been exercised by a Participant, the Board shall allot to him (or a nominee for him) or, if appropriate, transfer or procure the transfer to him (or a nominee for him) of the number of Shares in respect of which the Option has been exercised.
All Shares allotted under the Plan shall rank equally in all respects with Shares then in issue except for any rights attaching to such Shares by reference to a record date before the date of allotment.
Where Shares are transferred under the Plan after the exercise of an Option, Participants will be entitled to any rights attaching to such Shares by reference to a record date on or after the date of such transfer.
If a Participant dies at a time when either he is a director or employee of a Group Member or he is or may be entitled to exercise the Option under Rule 6.2 (Good leavers), the following provisions apply:
(a) any Option granted to him that is already capable of exercise at the time of death shall, subject to Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company), continue to be capable of exercise by his personal representatives for a period of 12 months after his death and if not exercised shall lapse at the end of that period;
If a Participant ceases to be a director or employee of a Group Member in the following circumstances:
the following provisions apply:
2 Please note that tax-relief is not available for a 'good leaver' in circumstances such as ill-health, transfer of a business (not including a TUPE transfer) or as a result of Committee discretion. It is recommended that advice is taken to confirm the tax treatment if it is proposed that good leaver status is to be conferred for these circumstances.
(iii) subject to Rule 6.1 (Deceased Participants), in both cases (i) and (ii) above, the period for exercise shall be shortened if Rule 5.5 (Long stop date for exercise), Rule 7.1 (General offers), Rule 7.2 (Schemes of arrangement or non-UK arrangement), Rule 7.3 (Compulsory acquisition), Rule 7.6 (Winding up) or Rule 7.7 (Demergers and similar events) applies.
If a Participant ceases to be a director or employee of a Group Member for any reason other than those specified in Rule 6.1 (Deceased Participants) and Rule 6.2 (Good leavers), any Option held by him shall immediately lapse on such cessation.
A Participant shall not be treated for the purposes of this Rule 6 as ceasing to be a director or employee of a Group Member until such time as he is no longer a director or employee of any Group Member. Any Participant who ceases to be such a director or employee before exercising an Option in circumstances where he retains a statutory right to return to work shall be treated as not having ceased to be such a director or employee until such time (if at all) as he ceases to have such a right while not acting as an employee or director.
The reason for the termination of office or employment of a Participant shall be determined by reference to Rules 6.1 to 6.3 regardless of whether such termination was lawful or unlawful.
In the event that any person (or any group of persons acting in concert):
and, as a result of such offer, that person (and any others acting in concert) obtains Control of the Company and any condition subject to which the offer was made has been satisfied (the "Relevant Event"), then subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise), Rule 5.5 (Long stop date of exercise), Rule 6 (Leavers and deceased Participants), Rule 7.5 (Exercise following disqualifying event) and Rule 7.10 (Internal reorganisations), any Option may be exercised within the period of one month (or such other period not exceeding six months as the Committee may permit) following the date of the Relevant Event but to the extent that the Option is not exercised within that period it shall, regardless of any other provision of the Plan except Rule 6.1 (Deceased Participants), lapse at the end of that period.
For the purposes of this Rule 7.1, "connected" has the meaning within section 993 of the Income Tax Act 2007.
In the event that:
and it is applicable to or affecting:
an Option may, subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company), Rule 5.5 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants), Rule 7.5 (Exercise following disqualifying event) and Rule 7.10 (Internal reorganisations), be exercised within one month of such Relevant Event. To the extent that the Option is not exercised within that period, it shall, regardless of any other provision of the Plan except Rule 6.1 (Deceased Participants), lapse at the end of that period.
In the event that any person becomes bound or entitled to acquire Shares in the Company under sections 979 to 982 or 983 to 985 of the Companies Act 2006 (the "Relevant Event"), an Option may, subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company), Rule 5.5 (Long stop date of exercise), Rule 6 (Leavers and deceased Participants), Rule 7.5 (Exercise following disqualifying event) and Rule 7.10 (Internal reorganisations), be exercised at any time during the period when that person is so bound or entitled. To the extent that the Option is not exercised within that period, it shall, regardless of any other provision of the Plan except Rule 6.1 (Deceased Participants), lapse at the end of that period.
If a Relevant Event under any of Rules 7.1 (General Offers), 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition) is anticipated the Committee may notify Participants that any Option may, subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company), Rule 5.5 (Long stop date for exercise) and Rule 6 (Leavers and deceased Participants), be exercised in anticipation of such Relevant Event in the period of 20 days ending with the date of the Relevant Event and shall be treated as if it had been exercised in accordance with the relevant Rule 7.1 (General Offers) or 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition).
If the anticipated Relevant Event does not occur within a period of 20 days beginning with the date of exercise of an Option under this Rule 7.4 then any such exercise shall be treated as having had no effect.
If as a consequence of a person obtaining Control of the Company in any of the circumstances in Rules 7.1 (General Offers) (ignoring whether any condition subject to which an offer was made has been satisfied), 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition) the Shares no longer meet the requirements of Part 4 of Schedule 4, any Option may be exercised in accordance with the relevant Rule no later than 20 days after the day on which the person obtains Control of the Company notwithstanding that the Shares no longer meet such requirements, but to the extent that the Option is not exercised within that period it shall (regardless of any other provision of the Plan except Rule 6.1 (Deceased Participants)) lapse at the end of that period.
This Rule 7.5 shall not authorise the exercise of any Option at a time outside the relevant period of exercise within any of Rules 7.1 (General Offers) or 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition).
In the event that:
an Option may, subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Restriction on exercise: material interest in a close company), Rule 5.5 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants), Rule 7.5 (Exercise following disqualifying event) and Rule 7.10 (Internal reorganisations), be exercised within one month of such event. To the extent that the Option is not exercised within that period, it shall, regardless of any other provision of the Plan lapse at the end of that period.
If a demerger, special dividend or other similar event (the "Relevant Event") is proposed which, in the opinion of the Committee, would affect the market price of an Option to a material extent, then the Committee may, at its discretion and acting fairly and reasonably, decide that the following provisions will apply:
If any company (the "acquiring company"):
any Participant may, at any time within the relevant period specified under paragraph 26(3) of Schedule 4, by agreement with the acquiring company, release any Option granted under Part A of the Plan (the "Old Option") in consideration of the grant to him of an option (the "New Option") which for the purposes of paragraph 27 of Schedule 4 is equivalent to the Old Option but relates to shares in a different company (whether the acquiring company itself or some other company falling within paragraph 16(b) or (c) of Schedule 4).
For the avoidance of doubt, if this Rule 7.8 applies, no further Options may be granted under Part A of the Plan other than the New Options granted in accordance with this Rule 7.8.
For the purposes of this Rule 7.8:
Where a New Option is granted under Rule 7.8 (Option rollover: general provisions) the following terms of Part A of the Plan shall, in relation to the New Option, be construed:
(c) the Company will remain the scheme organiser of the Plan (as defined in paragraph 2(2) of Schedule 4) following the release of Old Options and the grant of New Options under Rule 7.8 (Option rollover: general provisions).
In the event that:
then an Option granted under Part A of the Plan (the "Original Option") shall not become exercisable under Rule 7.1 (General offers) or Rule 7.2 (Schemes of arrangement or non-UK arrangement) (as applicable) and, if the Option is not released pursuant to Rule 7.8 (Option rollover: general provisions), it shall lapse at the end of the relevant period specified under paragraph 26(3) of Schedule 4.
Subject to Rule 8.2 (Adjustment which may be made), in the event of any variation of the share capital of the Company (whether by way of capitalisation or rights issue, or a reduction, subdivision, consolidation or other variation), the Committee, acting fairly and reasonably, may make such adjustment so far as necessary to take account of such variation under Rule 8.3 (Method of adjustment).
An adjustment may only be made under Rule 8.1 provided that:
An adjustment made under this Rule 8.3 shall be to one or more of the following:
An adjustment under Rule 8.3 (Method of adjustment) may reduce the price at which Shares may be subscribed for on the exercise of an Option to less than their nominal value, but only if and to the extent that the Board is authorised:
so that on exercise of any Option in respect of which such a reduction shall have been made the Board shall capitalise that sum (if any) and apply it in paying up that amount.
Except as described in Rule 9.3 (Shareholder approval) and Rule 9.5 (Alterations to disadvantage of Participants), the Committee may at any time, acting fairly and reasonably, alter the Plan or the terms of any Option.
No alteration may be made under Rule 9.1 to any provision of the Plan that is necessary to meet the requirements of Schedule 4.
Except as described in Rule 9.4 (Exceptions to shareholder approval), no alteration to the advantage of an individual to whom an Option has been or may be granted shall be made under Rule 9.1 (General rule on alterations) to the provisions concerning:
without the prior approval by ordinary resolution of the members of the Company in general meeting.
Rule 9.3 (Shareholder approval) shall not apply to:
Except as described in Rule 9.6 (Exceptions to Participant approval), no alteration to the material disadvantage of any Participant (other than a technical change to any Performance Condition) shall be made under Rule 9.1 (General rule on alterations) unless:
Rule 9.5 (Alterations to disadvantage of Participants) shall not apply to any alteration which is required in accordance with paragraph 28I(2)(b) of Schedule 4 or which is otherwise required in order that the Plan complies with the requirements of Schedule 4.
The Committee may amend any Performance Condition without prior shareholder approval if:
The rights and obligations of any individual under the terms of his office or employment with any Group Member shall not be affected by his participation in the Plan or any right which he may have to participate in it. An individual who participates in the Plan waives any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever insofar as those rights arise or may arise from his ceasing to have rights under or be entitled to exercise any Option as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon any individual who participates in it. The grant of an Option does not imply that any further Options will be granted nor that a Participant has any right to be granted any further Options.
In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or relating to the Plan, the decision of the Committee shall be final and binding upon all persons.
The exercise of any power or discretion by the Committee shall not be open to question by any person and a Participant or former Participant shall have no rights in relation to the exercise of or omission to exercise any such power or discretion.
Any notice or other communication under or in connection with the Plan may be given:
No third party has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan.
Benefits provided under the Plan shall not be pensionable.
For the purpose of operating the Plan, the Company will collect and process information relating to Participants (and any eligible employees under Rule 2) in accordance with the privacy notice which is available on the Company intranet.
The Plan and all Options shall be governed by and construed in accordance with the law of England and Wales and the Courts of England and Wales have exclusive jurisdiction to hear any dispute.
1.1 In this Part B of the Plan, unless the context otherwise requires:
"Board" means the board of directors of the Company or a duly authorised committee of the Board or a duly authorised person;
"Clawback" means an obligation to repay the amounts referred to in Rule 9.4 of Part B of the Plan;
"Committee" means the remuneration committee of the Board or, on and after the occurrence of a corporate event described in Rule 7 (Takeovers and other corporate events), the remuneration committee of the Board as constituted immediately before such event occurs;
"Company" means Clarkson PLC (registered in England and Wales with registered number 01190238);
"Control" means control within the meaning of section 995 of the Income Tax Act 2007;
"Grant Date" means the date on which an Option is granted;
"Group Member" means:
"ITEPA" means the Income Tax (Earnings and Pensions) Act 2003;
"Listing Rules" means the Listing Rules published by the Financial Conduct Authority;
"London Stock Exchange" means London Stock Exchange plc or any successor to that company;
"Option" means a right to acquire Shares granted under the Plan;
"Participant" means a person who holds an Option including his personal representatives;
"Participating Company" means the Company or any Subsidiary;
"Performance Condition" is a condition related to performance which is specified by the Committee under Rule 3.1 (Terms of grant);
"Plan" means the Clarkson PLC 2023 Share Option Plan as amended from time to time;
"Rule" means a rule of the Plan;
"Shares" means fully paid ordinary shares in the capital of the Company;
"Subsidiary" means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006) of the Company;
"Tax Liability" means any amount of tax or social security contributions for which a Participant would or may be liable and for which any Group Member or former Group Member would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority.
An individual is eligible to be granted an Option only if he is at the time of grant of the relevant Option an employee of a Participating Company (including an executive director other than an executive director of the Company).
Subject to Rule 3.5 (Timing of grant), Rule 3.7 (Approvals and consents) and Rule 4 (Limits), the Committee may resolve to grant an Option on:
to any person who is eligible to be granted an Option under Rule 2 (Eligibility).
On or before the Grant Date, the Committee shall determine the date on which an Option may become exercisable for the purposes of Rule 5.1 (Timing of exercise) and the applicability of Clawback to an Option under Rule 9.1 (Applicability of Clawback).
An Option shall be granted by deed executed by the Company.
Unless specified to the contrary by the Board at the time of grant of an Option, an Option may be satisfied:
(c) by the transfer of Shares (other than the transfer of treasury Shares).
The Committee may decide to change the way in which it is intended that an Option may be satisfied after it has been granted, having regard to the provisions of Rule 4 (Limits).
The Committee shall decide before an Option is granted the price at which Shares may be acquired by the exercise of that Option, but the price shall not be less than:
Subject to Rule 3.7 (Approvals and consents), an Option may only be granted:
but an Option may not be granted after 10 May 2023 (that is, the expiry of the period of 10 years beginning with the date on which the Plan is approved by shareholders of the Company).
An Option granted to any person:
The grant of any Option shall be subject to obtaining any approval or consent required under the Listing Rules, any relevant share dealing code of the Company, the City Code on Takeovers and Mergers, or any other relevant UK or overseas regulation or enactment.
An Option shall not be granted in any calendar year if, at the time of its proposed Grant Date, it would cause the number of Shares allocated (as defined in Rule 4.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other executive share plan adopted by the Company to exceed such number as represents 5 per cent of the ordinary share capital of the Company in issue at that time.
An Option shall not be granted in any calendar year if, at the time of its proposed Grant Date, it would cause the number of Shares allocated (as defined in Rule 4.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents 10 per cent of the ordinary share capital of the Company in issue at that time.
For the purposes of Rules 4.1 and 4.2:
For the purposes of Rule 4.3:
the unissued Shares or treasury Shares which consequently cease to be subject to the option, award or other contractual right shall not count as allocated; and
(b) the number of Shares allocated in respect of an option, award or other contractual right shall be such number as the Board shall reasonably determine from time to time.
Treasury Shares shall cease to count as allocated Shares for the purposes of Rule 4.3 if institutional investor guidelines1 cease to require such Shares to be so counted.
The maximum total market value of Shares (calculated as set out in this Rule) over which Options may be granted to any employee during any financial year of the Company is 150 per cent of his salary (as defined in this Rule), unless the Committee decides that exceptional circumstances exist, such as in relation to the recruitment or retention of an eligible employee, in which case the maximum total market value of Shares over which Options may be granted to that employee during a financial year of the Company is 200 per cent. of his salary (as defined in this Rule).
For the purpose of this Rule 4.6:
Any Option shall be limited and take effect so that the limits in this Rule 4 are complied with.
Where the grant of an Option under Part A of the Plan is limited solely by virtue of Rule 4.7 of that Part (Schedule 4 limit) the grant shall be effective under this Part B of the Plan subject to the limits set out in this Part.
An Option may only be exercised on the later of:
except where Rule 6 (Leavers and deceased Participants), Rule 7.1 (General offers), Rule 7.2 (Schemes of arrangement or non-UK reorganisation), Rule 7.3 (Compulsory acquisition), Rule 7.5 (Winding up) or Rule 7.6 (Demerger and similar events) applies.
An Option may only be exercised to the extent:
The Option shall lapse regardless of any other Rule to the extent that any Performance Condition is not satisfied.
Where, under Rule 6 (Leavers and deceased Participants) or Rule 7 (Takeovers and other corporate events), an Option would (subject to the satisfaction of any Performance Condition) become exercisable before the end of the full period over which performance would otherwise be measured under any Performance Condition then, unless provided to the contrary by the Performance Condition, the extent to which the Performance Condition has been satisfied in such circumstances shall be determined by the Committee on such reasonable basis as it decides.
An Option may not be exercised unless the following conditions are satisfied:
For the purposes of this Rule 5.3, references to Group Member include any former Group Member.
An Option may not in any circumstances (and regardless of any other Rule) be exercised after the expiry of 10 years beginning with the Grant Date (or such shorter period beginning with the Grant Date as the Committee may have decided on or before the grant of that Option) and if not exercised shall lapse at the end of such period.
An Option must be exercised to the maximum extent possible at the time of exercise unless the Committee decides that a Participant may exercise his Option in respect of such fewer number of Shares as it decides.
The exercise of any Option shall be effected in the form and manner prescribed by the Board. Unless the Board, acting fairly and reasonably determines otherwise, any notice of exercise shall, subject to Rule 5.3 (Restrictions on exercise: regulatory and tax issues), take effect only when the Company receives it, together with:
No Shares may be issued or treasury Shares transferred to satisfy the exercise of any Option to the extent that such issue or transfer would cause the number of Shares allocated (as defined in Rule 4.3 (Meaning of "allocated") and adjusted under Rule 4.4 (Post-grant events of affecting numbers of "allocated" Shares)) to exceed the limits in Rules 4.1 (5 per cent in 10 years limit) and 4.2 (10 per cent in 10 years limit) except where there is a variation in the share capital of the Company which results in the number of Shares so allocated exceeding such limits solely by virtue of that variation.
Within 30 days after an Option has been exercised by a Participant, the Board shall allot to him (or a nominee for him) or, if appropriate, transfer or procure the transfer to him (or a nominee for him) of the number of Shares in respect of which the Option has been exercised.
All Shares allotted under the Plan shall rank equally in all respects with Shares then in issue except for any rights attaching to such Shares by reference to a record date before the date of allotment.
Where Shares are transferred under the Plan after the exercise of an Option, Participants will be entitled to any rights attaching to such Shares by reference to a record date on or after the date of such transfer.
The Participant authorises the Company to sell or procure the sale of sufficient Shares on or following the exercise of his Option on his behalf to ensure that any relevant Group Member or former Group Member receives the amount required to discharge the Tax Liability which arises on such exercise except to the extent he agrees to fund all or part of the Tax Liability in a different manner.
Subject to Rule 5.11(d), where an Option has been exercised by a Participant in respect of any number of Shares, and those Shares have not yet been allotted or transferred to him (or his nominee), the Committee may determine that, in substitution for his right to acquire such number of those Shares as the Committee may decide (but in full and final satisfaction of that right), he shall be paid by way of additional employment income a sum equal to the cash equivalent (as defined in Rule 5.11(a)) of that number of Shares in accordance with the following provisions of this Rule 5.11.
and the Company shall allot or transfer to him (or his nominee) or procure the transfer to him (or his nominee) of the Shares so subscribed for or purchased.
This Rule 5.11 shall not apply in relation to Options made into any jurisdiction where the presence of this Rule would cause:
If a Participant dies at a time when either he is a director or employee of a Group Member or he is or may be entitled to exercise the Option under Rule 6.2 (Good leavers), the following provisions apply:
If a Participant ceases to be a director or employee of a Group Member in the following circumstances:
the following provisions apply:
(i) any Option granted to him that is already capable of exercise at the date of cessation shall, subject to Rule 5.3 (Restrictions on exercise: regulatory and tax issues) and Rule 6.1 (Deceased Participants), continue to be capable of exercise for a period of six months after the date of cessation and if not exercised shall lapse at the end of that period;
If a Participant ceases to be a director or employee of a Group Member for any reason other than those specified in Rule 6.1 (Deceased Participants) and Rule 6.2 (Good leavers), any Option held by him shall immediately lapse on such cessation.
A Participant shall not be treated for the purposes of this Rule 6 as ceasing to be a director or employee of a Group Member until such time as he is no longer a director or employee of any Group Member. Any Participant who ceases to be such a director or employee before exercising an Option in circumstances where he retains a statutory right to return to work then be treated as not having ceased to be such a director or employee until such time (if at all) as he ceases to have such a right while not acting as an employee or director.
The reason for the termination of office or employment of a Participant shall be determined by reference to Rules 6.1 to 6.3 regardless of whether such termination was lawful or unlawful.
In the event that any person (or any group of persons acting in concert):
and, as a result of such offer, that person (and any others acting in concert) obtains Control of the Company and any condition subject to which the offer was made has been satisfied (the "Relevant Event"), then subject to Rule 5.2 (Performance Condition), Rule 5.3 (Restrictions on exercise: regulatory and tax issues), Rule 5.4 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants) and Rule 7.7 (Internal reorganisations), any Option may be exercised within the period of one month (or such other period not exceeding six months as the Committee may permit) following the date of the Relevant Event but to the extent that the Option is not exercised within that period it shall, regardless of any other provision of the Plan, lapse at the end of that period.
For the purposes of this Rule 7.1, "connected" has the meaning within section 993 of the Income Tact Act 2007.
In the event that:
and it is applicable to or affecting:
an Option may, subject to Rule 5.2 (Performance Condition), Rule 5.3 (Restrictions on exercise), Rule 5.4 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants) and Rule 7.7 (Internal reorganisations), be exercised within one month of such Relevant Event. To the extent that the Option is not exercised within that period, it shall (regardless of any other provision of the Plan) lapse at the end of that period.
In the event that any person becomes bound or entitled to acquire Shares in the Company under sections 979 to 982 or 983 to 985 of the Companies Act 2006 (the "Relevant Event"), an Option may, subject to Rule 5.2 (Performance Condition), Rules 5.3 (Restrictions on exercise: regulatory and tax issues) and 5.4 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants) and Rule 7.7 (Internal reorganisations), be exercised at any time during the period when that person is so bound or entitled. To the extent that the Option is not exercised within that period, it shall, regardless of any other provision of the Plan, lapse at the end of that period.
If a Relevant Event under any of Rules 7.1 (General Offers), 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition) is anticipated the Committee may notify Participants that any Option may, subject to Rule 5.2 (Performance Condition and other exercise conditions), Rule 5.3 (Restrictions on exercise: regulatory and tax issues), Rule 5.4 (Long stop date for exercise) and Rule 6 (Leavers and deceased Participants), be exercised in anticipation of such Relevant Event in the period of 20 days ending with the date of the Relevant Event and shall be treated as if it had been exercised in accordance with the relevant Rule 7.1 (General Offers) or 7.2 (Schemes of arrangement or non-UK arrangement) or 7.3 (Compulsory acquisition).
If the anticipated Relevant Event does not occur within a period of 20 days beginning with the date of exercise of an Option under this Rule 7.4 then any such exercise shall be treated as having had no effect.
In the event that:
an Option may, subject to Rule 5.2 (Performance Condition), Rule 5.3 (Restrictions on exercise: regulatory and tax issues), Rule 5.4 (Long stop date for exercise), Rule 6 (Leavers and deceased Participants) and Rule 7.7 (Internal reorganisations), be exercised within one month of such event. To the extent that the Option is not exercised within that period, it shall, regardless of any other provision of the Plan, lapse at the end of that period.
If a demerger, special dividend or other similar event (the "Relevant Event") is proposed which, in the opinion of the Committee, would affect the market price of Shares to a material extent, then the Committee may, at its discretion, decide that the following provisions will apply:
In the event that:
then an Option granted under Part B of the Plan (the "Original Option") shall not become exercisable under Rule 7.1 (General offers) or Rule 7.2 (Schemes of arrangement or non-UK arrangement) (as applicable) but shall be automatically surrendered in consideration for the grant of a new Option which the Committee determines is equivalent to the Original Option it replaces except that it will be over shares in the new company or some other company.
The Rules shall apply to any new Option granted under this Rule 7.7 as if references to Shares were references to shares over which the new Option is granted and references to the Company were references to the company whose shares are subject to the new Option.
In the event of:
the Committee may make such adjustment as it considers appropriate under Rule 8.2 (Method of adjustment).
An adjustment made under this Rule 8.2 shall be to one or more of the following:
An adjustment under Rule 8.2 (Method of adjustment) may reduce the price at which Shares may be subscribed for on the exercise of an Option to less than their nominal value, but only if and to the extent that the Board is authorised:
so that on exercise of any Option in respect of which such a reduction shall have been made the Board shall capitalise that sum (if any) and apply it in paying up that amount.
This Rule 9 shall apply to all Options granted under this Part B of the Plan to such individuals (if any) as the Committee decides on or before the Grant Date and applies to those Options regardless of any of the other provisions of Part B of the Plan.
The Committee may decide at any time within the period commencing on the date on which an Option becomes exercisable and ending on the day on which the Company's audited results in respect of the financial year in which that Option became exercisable are available, that the individual to whom the Option was granted (the "relevant individual") shall be subject to Clawback if:
The amount to be subject to Clawback shall be the additional value which the Committee considers has been received by the relevant individual as a result of the misstatement or error referred to in Rule 9.2 above but if the relevant individual is required to repay all or part of such additional value pursuant to Rule 9.4(b) below then the amount (or remaining amount if applicable) subject to Clawback shall be limited to the net (post-tax) amount of such additional value.
The Clawback shall be satisfied in the following ways:
relevant individual's salary or from any other payment to be made to the relevant individual by any Group Member), such amount as is required for the Clawback to be satisfied in full.
The Committee may decide at any time to reduce the number of Shares subject to an Option granted under Part B of the Plan (including, if appropriate, reducing to zero) to give effect to a clawback provision of any form contained in any incentive plan (other than the Plan) or any bonus plan operated by any Group Member. The value of the reduction shall be in accordance with the terms of the clawback provision in the relevant plan or, in the absence of any such term, on such basis as the Committee, acting fairly and reasonably, decides is appropriate.
If, within the period set out in Rule 9.1 above, it is discovered that a misstatement or error as described in Rule 9.2 has resulted in an Option granted under Part B of the Plan becoming exercisable over a lower number of Shares than would have been the case had the misstatement or error not occurred, the Committee shall award an additional number of Shares to the relevant individual to reflect the shortfall on such basis as it decides.
Except as described in Rule 10.2 (Shareholder approval) and Rule 10.4 (Alterations to disadvantage of Participants), the Committee may at any time alter the Plan or the terms of any Option.
Except as described in Rule 10.3 (Exceptions to shareholder approval), no alteration to the advantage of an individual to whom an Option has been or may be granted shall be made under Rule 10.1 (General rule on alterations) to the provisions concerning:
without the prior approval by ordinary resolution of the members of the Company in general meeting.
Rule 10.2 (Shareholder approval) shall not apply to:
No alteration to the material disadvantage of any Participant (other than a technical change to any Performance Condition) shall be made under Rule 10.1 (General rule on alterations) unless:
The Committee may amend any Performance Condition without prior shareholder approval if:
The rights and obligations of any individual under the terms of his office or employment with any Group Member shall not be affected by his participation in the Plan or any right which he may have to participate in it. An individual who participates in the Plan waives any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever insofar as those rights arise or may arise from his ceasing to have rights under or be entitled to exercise any Option as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon any individual who participates in it. The grant of any Option does not imply that any further Options will be granted nor that a Participant has any right to be granted any further Options.
In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or relating to the Plan, the decision of the Committee shall be final and binding upon all persons.
The exercise of any power or discretion by the Committee shall not be open to question by any person and a Participant or former Participant shall have no rights in relation to the exercise of or omission to exercise any such power or discretion.
Any notice or other communication under or in connection with the Plan may be given:
No third party has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan.
Benefits provided under the Plan shall not be pensionable.
For the purpose of operating the Plan, the Company will collect and process information relating to Participants (and any eligible employees under Rule 2) in accordance with the privacy notice which is available on the Company intranet.
The Plan and all Options shall be governed by and construed in accordance with the law of England and Wales and the Courts of England and Wales have exclusive jurisdiction to hear any dispute.
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