Remuneration Information • Apr 18, 2023
Remuneration Information
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| Shareholders' Approval: | 20 May 2014 | |
|---|---|---|
| Amended: | 24 January 2017 | |
| Amended: | 17 January 2020 | |
| Amended: | 29 January 2022 | |
| Renewal approved by shareholders: | ● May 2023 | |
| Expiry Date: | ● May 2033 |
| Contents Page |
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|---|---|
| 1 | Granting Awards 3 |
| 2 | Terms of Awards to be set by Grantor 3 |
| 3 | Form of Awards 4 |
| 4 | No transfer of Awards 5 |
| 5 | Limits on the use of newly issued shares and treasury shares 5 |
| 6 | Variations in share capital, demergers and special distributions 6 |
| 7 | Voting, dividends and dividend equivalents 6 |
| 8 | Vesting of Awards 7 |
| 9 | Consequences of Vesting or Exercise 8 |
| 10 | Cash alternative and net settlement 8 |
| 11 | Holding Period 8 |
| 12 | Leaving employment 9 |
| 13 | Death 11 |
| 14 | Clawback and malus 12 |
| 15 | Takeovers and restructurings 13 |
| 16 | Withholding of tax 15 |
| 17 | Relationship with terms of a Participant's employment 15 |
| 18 | General 16 |
| 19 | Changing these Rules 19 |
| 20 | Governing law and jurisdiction 20 |
| 21 | Language of the Rules 20 |
| 22 | Section 409A of the US Internal Revenue Code 20 |
| 24 | Meaning of Words 20 |
| Schedule 1 Forfeitable Share Awards……………………………………………………………23 |
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| Schedule 2 Awards to US Participants……………………………………………………………27 |
Not all Eligible Employees will be made an Award. The Grantor will select which Eligible Employees will be made Awards and will determine the number of Shares subject to those Awards and the terms of those Awards. The selection criteria, the size of the Awards made, and the terms of the Awards made may change from time to time.
A Member of the Group (other than the Company) may only grant an Award with the approval of the Directors.
Subject to any applicable Dealing Restrictions, Awards may only be granted within 42 days starting on any of the following:
No Awards may be granted after ● May 2033.
taking into account such factors as the Grantor considers relevant.
The Grantor may impose other conditions when granting an Award. Any condition must be specified at the Award Date and may provide that an Award will lapse to the extent it is not satisfied.
The Grantor may change a condition in accordance with its terms or if anything happens which causes the Grantor, acting reasonably and in good faith, to consider it appropriate but not so as to make the condition materially more difficult to satisfy.
When granting an Award, the Grantor will decide:
Awards will be granted by deed or in any other manner which is legally enforceable in the relevant jurisdiction.
Each Participant will be informed of the terms of the Award (to the extent that they are not set out in these rules) as soon as practicable after the Award Date. They may be informed of the terms by being given a copy of the deed referred to above or by any other means (including the updating of any personalised webpage or other electronic means).
A Participant may be required to enter into an agreement in writing with the Grantor which provides that the Participant agrees to the Award being granted to them subject to the rules (and any other terms set by the Grantor). In such case, and notwithstanding rule 3.3, the Award will not be valid until the agreement has been signed.
A Participant is not required to pay any Member of the Group for the grant of any Award.
Any Participant may reject all or part of their Award within 90 days after the Award Date (or, if earlier, before the date on which the Award Vests) by notice in writing to any person nominated by the Grantor. If this happens, the Award, or such part of it, will be deemed never to have been granted. A Participant is not required to pay any Member of the Group for the rejection.
If the Participant does not reject their Award as described above, the Participant will (subject to rule 3.1) be deemed to have unconditionally accepted the Award as of the Award Date.
An Award and any rights in respect of it are personal to the Participant and only the Participant may enforce those rights. No Award nor any rights in respect of it can be transferred, pledged, encumbered, assigned or otherwise disposed of.
A Participant must not create, buy or sell any derivative instrument involving an Award or any Shares subject to it. If an Award or any rights in respect of it are transferred or if such a derivative instrument is created, bought or sold or if the Participant otherwise ceases to be the sole beneficiary of the Award or any rights in respect of it (including by operation of law), the Award will lapse except to the extent that the Directors decide otherwise.
This rule 4 does not apply to the transmission of an Award on the death of a Participant to their personal representatives (or to or its subsequent enforcement by them).
The number of Shares which may be allocated under these Rules on any day must not exceed 10 per cent 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 these Rules and any other employee share plan operated by the Company.
The number of Shares which may be allocated under these Rules on any day must not exceed 5 per cent 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, other than on an all-employee basis, in the previous 10 years under these Rules and any other employee share plan adopted by the Company.
Where the right to acquire Shares is released or lapses, the Shares concerned are ignored when calculating the limits in this rule 5.
For these purposes, shares may be allocated or offered on similar terms even though the terms on which they are offered or allocated may vary by reference to the employees' remuneration or length of service etc.
5.4.2 For the purposes of this rule, shares are "allocated" if they have been issued or must be issued for the purposes of satisfying an Award. For so long as the Directors consider that it is best practice to count treasury shares for the purposes of the limits in this rule 5, shares are also "allocated" if they have been or must be transferred out of treasury for the purposes of satisfying Awards.
If there is:
the Directors may, acting reasonably and in good faith:
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 until the Shares are issued or transferred to the Participant or to another person to hold the Shares for the benefit of the Participant.
However, the Grantor, with the approval of the Directors, may grant an Award (other than an Award in the form of an Option with an Exercise Price equal to the Market Value of a Share at the Award Date) on the basis that, on Vesting, the Grantor shall procure that the Participant receives an amount equal to the amount per Share of all dividends the record date for which falls between the Award Date and the date of Vesting, multiplied by the number of Shares in respect of which the Award is Vesting assuming full dividend reinvestment. However, in the case of a Participant's death, the relevant period will be extended to the date of issue or transfer in respect of the Participant.
This amount may be paid in cash or in Shares. The cash will be paid or Shares issued or transferred on the same date as cash is paid or Shares are issued or transferred with respect to the underlying Award and the payment, issue or transfer will be subject to rule 16 (Withholding of tax).
To the extent that an Award has not lapsed or Vested on that date, it will lapse on that date.
the Grantor, with the approval of the Directors and subject to any HR policy adopted by the Company from time to time, may determine that Vesting will be subject to such conditions as it may determine, which may include restrictions on the disposal of some or all of the Shares acquired pursuant to the Award for such a period as the Grantor may determine, and that any Shares so restricted may be forfeited if the Participant ceases to be an employee of a Member of the Group during such period in circumstances in which their Award would have lapsed if it had not Vested in accordance with this rule 8.1.2 and that any such Shares remain subject to clawback and malus under rule 14. The Grantor may make the Vesting of an Award or exercise of an Option conditional upon the Participant taking any action (including entering into any agreement) reasonably required by the Grantor in relation to such conditions. For the avoidance of doubt, this rule 8.1.2 does not apply to Executive Committee members.
Subject to rules 10 and 11, the Grantor will procure that Shares are issued or transferred (from treasury or otherwise) at the Grantor's discretion to the Participant or to a nominee, trustee or other entity designated by the Grantor for the Participant's benefit or to any other entity acceptable to the Grantor.
In the case of an Option with an Exercise Price, the exercise of the Option will be conditional upon the Participant paying the Exercise Price or entering into arrangements acceptable to the Directors to pay the Exercise Price.
Such issue or transfer will be made, subject to any Dealing Restriction which prevents such issue or transfer, as soon as reasonably practicable and will normally be made within 45 days of the date of Vesting (in the case of a Conditional Award) or the date of exercise (in the case of an Option).If, however, any Dealing Restriction would delay such issue or transfer beyond the relevant deadline set out in this rule, then the Vested Award, may, in the Grantor's discretion, be paid in cash pursuant to rule 10 not later than such relevant deadline.
The Grantor may, with the approval of the Directors, satisfy an Award by paying (subject to rule 16 (Withholding of tax)) a cash amount equal to (i) in the case of a Conditional Award, the Market Value of the Shares in respect of which the Award has Vested or (ii) in the case of an Option, the Market Value of the Shares in respect of which the Award would have been exercised less any Exercise Price. This amount will be paid as provided in rule 9.
An Award may be granted on the basis that it will only ever be satisfied by paying a cash amount in the manner described in this rule 10.1.
At any time before Shares in respect of which an Option that has been exercised have been issued or transferred to a Participant, the Grantor may, with the approval of the Directors, determine that, in substitution for the Participant's right to acquire some or all of those Shares, the Participant will receive a reduced number of Shares calculated as "A" in the following formula (rounded down to the nearest whole Share):
A = N x ((MV-EP)/MV)
Where: N means the number of Shares in respect of which the Option is exercised;
EP means the Exercise Price of the Option; and
MV means the market value (as determined by the Board) of a Share on the date of exercise.
An Award may be granted on the basis that it will only ever be satisfied in the manner described in this rule 10.2.
This rule 11 will apply where the Grantor decides that an Award is subject to a Holding Period under rule 2.4 or one is imposed under rule 14.
Following Vesting or exercise, the Holding Shares will be issued or transferred to the Participant (or a nominee selected by the Grantor) in accordance with rule 9 but on the condition that they be held on the basis set out in this rule 11. The Grantor may require the Participant to take any actions as it considers necessary or desirable to give effect to this rule.
The balance of the Shares in respect of which a Conditional Award Vests or an Option is exercised, if any, will be issued or transferred as described in rule 9.
Subject to rule 14, and to any contrary provision specified at the Award Date, the Holding Period will end on the earliest of the following:
At the end of the Holding Period, the restrictions in rule 11.2 will cease to apply.
If a Participant ceases to be an employee of a Member of the Group before the Qualifying Date, the Participant's Award will lapse on the date of cessation except as otherwise provided in this rule 12 or rule 13.
For the avoidance of doubt if a Participant ceases to be an employee of a Member of the Group on or after the Qualifying Date, the Award will continue and, if it is an Option, will be exercisable for the period determined in accordance with rule 12.6.
Where the Award is subject to a Holding Period the Holding Shares will, unless the Directors determine otherwise, continue to be subject to such Holding Period after cessation of employment.
Subject to rules 12.3 and 12.4, if the Participant ceases to be an employee of a Member of the Group before the Qualifying Date because of:
the Participant's Award will continue and will Vest in accordance with rule 8, provided however, that the Directors may reduce the Award pro rata to reflect the time which has elapsed during the Performance Period.
Where rule 12.2 applies, the Grantor may decide that instead of the Award continuing, the Award will Vest on cessation of employment with a Member of the Group or on a later date chosen by it, but not later than the latest of the dates set out in rules 8.1.1(i) or 8.1.1(ii).
Where rule 12.2 applies, the Directors will determine the extent to which any Performance Condition or other condition under rule 2.3 has been satisfied in the manner specified in the Performance Condition or other condition or, if this is not specified in the Performance Condition or other condition, in such manner as they consider reasonable.
the Participant's Award will, subject to rule 2.2, Vest on the date of cessation. Where the Award (or part of the Award) is subject to a Performance Condition it will Vest to the extent to which the Directors determine that any Performance Condition or other condition under rule 2.3 has been satisfied in the manner specified in the Performance Condition or other condition or, if this is not specified in the Performance Condition or other condition, in such manner as they consider reasonable. The Directors may reduce the Award pro rata to reflect the time which has elapsed during the Performance Period.
12.5.2 Where this rule 12.5 applies and if the Directors determine that equivalent rights to the Award have been granted or offered to the Participants, then the Awards will not Vest under this rule to the extent that the Directors so determine. To the extent that the Directors determine that any Awards do not Vest under this rule then they will lapse.
or such later date as the Directors may determine, after which time it will lapse.
For the purposes of this rule 12 a Participant will be treated as continuing to be an employee of a Member of the Group:
been determined, the Participant's Award will, unless the Directors determine otherwise, Vest to the extent only that the Performance Condition or other condition is satisfied.
If the Directors determine that an Adjustment Event has occurred, they may decide that one or more of the following will apply to one or more of a Participant's Awards:
If the action or conduct of any Participant, Member of the Group or relevant business unit is under investigation as a result of circumstances that could amount to an Adjustment Event and such investigation has not yet been concluded by the date on which the Award would Vest under rule 8, the Award will Vest on such later date as the Directors consider appropriate to allow such investigation to be concluded.
14.3.1 For the avoidance of doubt, rule 14.1 can apply in relation to a Participant's Award:
14.3.2 The Directors may decide that Rules 14.1.5 and 14.1.6 will only apply for a period of time, prescribed by the Directors from time to time, after the acquisition of the Shares by the Participant or the receipt of the cash amount in respect of the Award by the Participant, or after such other date as the Directors determine.
Where rule 14.1.5 or 14.1.6 applies, the Directors may decide that the number of Shares to be transferred or the amount to be paid will be reduced by reference to any income tax or social security contributions paid by or withheld for the Participant in respect of the Award and/or by reference to any Exercise Price paid in the case of an Option.
The Directors may take any of the actions set out in rule 14.1 in order to effect the recovery of sums paid or Shares delivered under any malus or clawback provisions that are included in any incentive plan (including this plan) operated by any Member of the Group.
This rule 15 applies where:
If rule 15.1 applies, each Award will be automatically exchanged, in full, for a new award in accordance with this rule 15.2, to the extent that:
The new award:
15.2.4 will, if the existing award was subject to a Performance Condition or other condition set under rule 2.3, be subject to an equivalent Performance Condition or equivalent other condition which, in both cases and in relation to any Participant who is a US taxpayer only, gives rise to a substantial risk of forfeiture;
15.2.5 will, unless the Directors determine otherwise, be subject to an equivalent Holding Period in respect of any Holding Shares (again as determined by the Directors);
provided, however, that the Award will be reduced pro rata to reflect the time which has elapsed during the Performance Period to the date of the relevant event (unless the Directors determine otherwise) and will lapse as to the balance.
All Options, whether Vesting under this rule 15 or already Vested, will lapse after a period of one month (or such other period as the Directors may determine) from the date of the relevant event.
If the Directors consider that the offer or sanction is an Internal Reorganisation, then unless they (the Directors) determine otherwise, each Award will be exchanged, as described in rule 15.2, (except for rule 15.2.4). The Award will be exchanged in full and (i) any Performance Condition and/or other condition set under rule 2 which applied to the original Award will apply to the new award, subject to such adjustments as the Directors consider reasonable to take account of the reconstruction or reorganisation and the exchange of Awards; and (ii) any Holding Period will continue to apply.
The Directors will determine the extent to which any Performance Condition and any other condition set under rule 2 has been satisfied on the relevant date applicable under this rule 15 in such manner as they consider reasonable.
If there is:
(b) a rights issue; or
(c) a demerger (in whatever form); or
the Directors may allow an Award to Vest (subject to rule 2.2) but, if there is a Performance Condition and/or other condition set under rule 2, only to the extent that it has been satisfied and subject to any other conditions the Directors may decide to impose and the Award will be reduced pro rata to reflect the time which has elapsed during the Performance Period to the date of the transaction (unless the Directors determine otherwise). The Award will lapse as to the balance.
If the Directors permit Awards to Vest the Directors will also determine the period of time during which any Option, whether Vesting under this rule 15.6 or already Vested, may be exercised, after which time it will lapse.
The Company, the Grantor, any employing company or trustee of any employee benefit trust may withhold such amount and make such arrangements as it considers necessary to meet any liability to tax, social security contributions, levy, charge or other payroll deductions required by law. These arrangements may include the sale of Shares on behalf of a Participant or a reduction in the number of Shares to which the Participant would otherwise be entitled. Where applicable, the amount of an Award will be subject to deductions for hypothetical tax and/or social security consistent with Company or Grantor policies.
The Participant must enter into any elections required by the Grantor in relation to Shares subject to an Award or Holding Shares including elections under Part 7 of the Income Tax (Earnings and Pensions) Act 2003 or relevant local legislation.
and/or any other condition set under rule 2.3, no Employee has any right to have any decision or discretion exercised in a particular manner (or at all).
The decision of the Directors, in their sole and absolute discretion, on the interpretation of these Rules or in any dispute relating to an Award or matter relating to these Rules or the terms of any Award will be final and conclusive.
The Directors can make or vary regulations for the administration and operation of these Rules, but these must be consistent with its rules.
The personal data of any Eligible Employee, Participant or former Participant may be processed in connection with the operation of the plan in accordance with the Group's prevailing data protection policy and as notified to Eligible Employees pursuant to a privacy notice or otherwise. If an Eligible Employee, Participant or former Participant is employed outside the European Economic Area and outside the United Kingdom and consent is needed for processing of their personal data in connection with the operation of the plan, by participating in the plan, they consent to such processing of their personal data.
All allotments, issues and transfers of Shares will be subject to any necessary consents under any relevant enactments or regulations for the time being in force. The Participant will be responsible for complying with any requirements the Participant needs to fulfil in order to obtain or avoid the necessity for any such consent.
Nothing in these rules or the terms of any Award will oblige the Grantor or any other person to issue or transfer any shares or make payment (including any remuneration payment or payment for loss of office) which would be inconsistent with:
and to the extent that any Award is so inconsistent, the Directors may, acting reasonably and in good faith, adjust (retrospectively or otherwise) the number or class of shares or securities comprised in an Award and/or impose additional conditions on the Vesting of such Award.
No Member of the Group will be obliged to seek the approval of any regulator or of its members in general meeting for any such issue, transfer or payment but may make such changes as the Committee considers are necessary or desirable to the terms of the issue, transfer or payment to ensure that consistency.
Any Shares acquired under these Rules are subject to the articles of association of the Company from time to time in force.
Shares issued pursuant to an Award will rank equally in all respects with the Shares in issue on the date of allotment. They will not rank for any rights attaching to Shares by reference to a record date preceding the date of allotment.
Where Shares are transferred, including transferred out of treasury, the Participant will be entitled to all rights attaching to the Shares by reference to a record date on or after the transfer date. The Participant will not be entitled to rights before that date.
If and so long as the Shares are listed on any stock exchange, the Company will apply for listing of any Shares issued under these Rules on any such exchange as soon as practicable.
Where it is necessary to make any currency conversion under these rules, the exchange will be at such rate and at such time as the Company decides.
Awards shall be unfunded and no Member of the Group shall be required to segregate any assets which may at any time be represented by an Award. Any liability of any Member of the Group to any person with respect to an Award shall be based solely upon any contractual obligations which may be created by these Rules. No such obligation shall be deemed to be secured by any pledge or other encumbrance on any property of any Member of the Group or funded or secured in any way.
The Company shall indemnify (or procure that any relevant Member of the Group indemnifies) each Indemnitee to the fullest extent permitted under applicable laws and under its constitution, against all or any portion of liability and/or costs and expenses reasonably incurred by such Indemnitee, in connection with, arising out of, or resulting from, any claim, suit or proceeding in which the Participant may be involved by reason of having been an Indemnitee; provided however, no Member of the Group shall be obliged to indemnify any Indemnitee against any liability, costs or expenses in connection with any act or omission to act in respect of which the Indemnitee shall be finally adjudged in any action, suit or proceeding to have been guilty of fraud or wilful misconduct in the performance of the Indemnitee's duties. "Indemnitee", for the purposes of this rule 18.11 means an individual who, while an employee or director of any Member of the Group and acting with respect to these Rules, acts as a fiduciary, agent, director of that or any other Member of the Group, or in any other capacity exercises administrative responsibility with respect to these Rules.
Each of the provisions of these Rules is entirely separate and independent from each of the other provisions. If any provision of any rule is found to be invalid, illegal or unenforceable, in whole or in part, in relation to an Award or a Participant, the provision shall apply to that Award or Participant with whatever deletion or modification is necessary so that the provision is legal, valid and enforceable and so far, as reasonably practicable, gives effect to the commercial intention of the Grantor.
To the extent it is not possible to delete or modify the provision in whole or in part then such provision or part of it will be deemed, to the extent that it is illegal, invalid or unenforceable, never to have been part of these Rules in relation to that Award or that Participant and to the extent that it is possible to do so, this will not affect the validity or enforceability of any of the remaining provisions of that or any other rule.
Any notice or other document which has to be given to a person who is or will be eligible to be a Participant may be delivered or sent by post to the Participant at their home address according to the records of the Participant's employing company; or sent by e-mail to any email address which according to the records of the Participant's employing company is used by the Participant 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 these Rules may be delivered or sent by post to it at its registered office (or such other place as the Directors or duly appointed agent may from time to time decide and notify to Participants) or sent by e-mail to any e-mail address notified to the Participant.
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 overseas will be deemed to have been given on the seventh day after the date of posting. Notices sent by e-mail, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending.
If for whatever reason a small payment would otherwise be due to a Participant, the Company may in its absolute discretion decide instead not to pay that amount and in such a case the Participant will lose any right to receive the relevant amount.
In this context a small payment is a payment of less than the value of one Share as at the date of the proposed payment or an amount which would be reduced to less than the value of one Share once any charges and foreign exchange costs had been taken into account.
Except as described in the rest of this rule 19, the Directors may, at any time, change these Rules in any way, including retrospective amendments and amendments to the terms of Awards already made.
(iv) to obtain or maintain favourable (or avoid unfavourable) tax, exchange control or regulatory treatment of the Company, any Affiliate or any present or future Participant.
The Directors may (but need not) give notice of any changes made to any Participant affected and the absence of any such notification will not affect the validity of any such change.
English law governs these Rules and all Awards and their construction. The English Courts have exclusive jurisdiction in respect of disputes arising under or in connection with these Rules or any Award.
The language of these Rules is English. In the event of any conflict, the English language version will prevail.
Notwithstanding any provision of these Rules to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the US Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder as in effect from time to time ("Section 409A"), the Company reserves the right to make amendments to these Rules as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, the Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of the Participant in connection with these Rules or any Award hereunder (including any taxes and penalties under Section 409A), and neither the Company nor any affiliate shall have any obligation to indemnify or otherwise hold the Participant harmless from any or all of such taxes or penalties.
In these rules:
"Adjustment Event" means an event by virtue of which rule 14 applies, which will be set, in relation to each Award, by the Grantor under rule 2.4;
"Affiliate" means the Company and any entity which either the Employer or the Company directly or indirectly controls. For this purpose:
"Award" means a Conditional Award or an Option granted under these Rules;
"Award Date" means the date which the Grantor sets for the grant of an Award;
"Business Day" means a day on which any stock exchange which is nominated by the Directors (for some or all purposes under these Rules) and on which the Shares are traded is open for the transaction of business;
"Company" means Shell plc;
"Conditional Award" means a right to receive Shares automatically at no cost subject to the Rules;
"Control" has the meaning given to it by Section 995 of the Income Tax Act 2007;
"Dealing Restrictions" means restrictions imposed by any law, order, regulation or Government directive, the rules applying to any listing of the Company, any code adopted by the Company regulating dealings in shares by employees or directors or any restriction imposed by the Company's compliance officer;
"Directors" means the board of directors of the Company or any committee of the board of directors or other person or body to whom the board of directors delegates any function under these rules or, where rule 15 applies, those people who were the Directors immediately before the event by virtue of which that rule applies;
"Eligible Employee" means any employee of any Member of the Group;
"Employer" means the employing company of a Participant;
"Exercise Price" means the price per Share payable to exercise an Option which will be either:
as determined by the Directors on or before the Award Date;
"Grantor" means, in relation to any Award, the Company or other Member of the Group which granted the Award under rule 1.1;
"Holding Shares" means the Shares in respect of which an Award has Vested, and which are subject to a Holding Period as determined under rule 2.4 or imposed under rule 14;
"Holding Period" means a period during which Shares received on Vesting of an Award must be held in accordance with rule 11;
"Internal Reorganisation" means where immediately after a change of Control of the Company, all or substantially all of the share capital of the acquiring company is owned directly or indirectly by the persons who were shareholders in the Company immediately before the change of Control;
"Market Value" means the price of a Share determined using any reasonable method selected by the Directors;
"Member of the Group" means:
(c) any other company, partnership or limited liability company which is associated with the Company and is so designated by the Directors (for some or all purposes under these Rules) and "Group" will be construed accordingly;
"Option" means a right to acquire Shares subject to these Rules for nil cost or for an Exercise Price;
"Participant" means a person holding an Award or their personal representatives;
"Performance Condition" means any performance condition imposed under rule 2.1;
"Performance Period" means:
"Policy" means the Company's directors' remuneration policy that has most recently been approved by the Company's shareholders and any relevant HR policy adopted by the Company from time to time;
"Rules" means these rules (including any schedules) as amended from time to time;
"Shares" means, subject to rules 6 and 15, fully paid ordinary shares in the capital of the Company or American Depository Receipts representing those shares;
"Vest" and "Vesting" means a Participant becoming entitled to have the Shares issued or transferred to the Participant or to another person to hold the Shares for the Participant's benefit subject to these Rules;
"Qualifying Date" means a date set by the Grantor which shall not normally be earlier than the third anniversary of:
However, the Grantor may, in its absolute discretion, determine that it shall be any other date. If the Grantor does not set the Qualifying Date, it shall be the third anniversary of the Award Date; and
Words of, or implying, one gender shall include the other gender.
The purpose of this Schedule 1 is to set out the terms on which an Award under the plan may be granted in the form of a Forfeitable Share Award.
1.1 The rules of the plan will apply to any Forfeitable Share Award granted under this Schedule 1, as amended by the terms of this Schedule 1.
2.4.1 any provision of the plan or the Forfeitable Share Agreement, including
2.4.2 any other terms of or action required in relation to the Forfeitable Share Award.
the Company will issue or procure the transfer of the Shares comprised in the Forfeitable Share Award to the Participant or to another person to be held for the benefit of the Participant under the terms of the plan and the Forfeitable Share Agreement.
The Company may retain the share certificates relating to any Shares which are comprised in a Forfeitable Share Award.
from the Award Date.
5.1 Subject to the Forfeitable Share Agreement, a Participant will have the same rights as any other shareholders in respect of Shares which are comprised in a Forfeitable Share Award where there is a rights issue, a variation of the share capital of the Company or other event of the sort described in rule 15.6. Any shares, securities or rights allotted to a Participant as a result of such an event will be:
6.1 A Participant may dispose of Shares comprised in a Forfeitable Share Award or any interest in such Shares to fund any tax due in accordance with rule 16.
7.1 Rule 9 (Consequences of Vesting or Exercise) does not apply to any Forfeitable Share Award.
Subject to paragraph 7.4 of this Schedule 1 and rule 11 of the plan, on the Vesting of a Forfeitable Share Award the Forfeitable Share Agreement will cease to apply.
Rule 10 (Cash alternative and net settlement) does not apply to any Forfeitable Share Award.
7.2 To the extent a Forfeitable Share Award lapses under the plan, the Shares which are comprised in the Forfeitable Share Award are forfeit and the Participant will immediately transfer their interest in those Shares for nil or nominal consideration to the Company or to any person specified by the Company.
the reduction or adjustment shall take effect by the lapse of the Forfeitable Share Award to the necessary extent and the Participant will immediately transfer their interest in the appropriate number of Shares comprised in the Forfeitable Share Award for nil or nominal consideration to the Company or to any person specified by the Company.
8.1 If Shares are allocated (as referred to in rule 5 of the plan) for the purposes of a Forfeitable Share Award which subsequently lapses, notwithstanding rule 5.3 those Shares shall not be ignored when calculating the limits in rule 5.
In this Schedule 1:
"Forfeitable Share Agreement" means an agreement entered into between an Eligible Employee and the Company, which sets out the terms on which the Shares comprised in a Forfeitable Share Award will be held; and
"Forfeitable Share Award" means an award of Shares held in the name of or for the benefit of a Participant on the terms of the applicable Forfeitable Share Agreement and in accordance with the rules of the plan.
The purpose of this Schedule 2 is to set out the terms on which an Award under the plan may be granted to or continue to be held by a US Participant (as defined below).
1.1 The Rules of the plan will apply to any Award (other than a Forfeitable Share Award subject to Schedule 1) granted to a US Participant under this Schedule 2, as amended by the terms of this Schedule 2.
2.1 To the extent that an Award is not subject to a Performance Condition, the Grantor shall designate at the Award Date (or in any case not later than the date the Award holder becomes a US Participant), whether the Award (or portion thereof) that is not subject to a Performance Condition is a 409A Exempt Award subject to the terms of paragraph 6.2.1 and paragraph 7.1 below or, alternatively, a 409A Compliant Award subject to the terms of paragraph 6.2.2 and paragraph 7.2 below.
3.1 Rule 8.1.2 shall not apply to any Award (or portion thereof) of a US Participant that is subject to Section 409A. However, if a Participant is expected by the Grantor to become a US Participant, then Rule 8.1.2 may apply so that the Participant will cease to hold an Award, which would otherwise become subject to this Schedule 2, prior to becoming a US Participant.
Further, in the event delayed issue or transfer beyond the relevant deadline (under Rule 9) due to a Dealing Restriction would not comply with US Treasury Regulation section 1.409A-2(b)(7)(ii), then the Vested Award will instead be paid in cash pursuant to rule 10 not later than such relevant deadline.
5.1 Subject to paragraph 6.2 of this Schedule 2, rule 12.2 shall apply to an Award of a US Participant; provided that for purposes of clarity, rule 12.2 shall not apply in the case of a cessation for a reason described in any of rules 12.2.1, 12.2.3, 12.2.4, or 12.2.5 unless it resulted from an employer-initiated termination.
then, unless the Directors determine otherwise, the Award (or portion thereof) which is a 409A Compliant Award not subject to Performance Conditions will continue and will Vest in accordance with Rule 9. The Directors may reduce the Award pro rata to reflect the time which has elapsed between the Award Date and the date of cessation.
7.2.2 Where this paragraph 7.2 applies and to the extent that the Directors determine that equivalent rights have been granted or offered to US Participants, then the Award (or portion thereof) which is a 409A Compliant Award not subject to Performance Conditions will not Vest under this paragraph to the extent that the Directors so determine. To the extent that the Directors determine that any such Awards (or portions thereof) do not Vest under this paragraph, then they will lapse.
8.1 No delay in Vesting of any Award of a US Participant under Rule 14.2 shall result in a delay of issue, transfer, or pay-out past the latest date for such issue, transfer, or pay-out that would otherwise have applied under this Schedule 2.
as such other terms and conditions, not inconsistent therewith, as the Grantor may consider appropriate.
It is intended that the Awards under the Rules subject to this Schedule 2 comply with or are exempt from Section 409A, and all provisions of the Rules shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. If for any reason, such as imprecision in drafting, any provision of these Rules does not accurately reflect its intended establishment with an exemption from (or compliance with) Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of Company.
For the avoidance of doubt, neither the Participant nor any creditor or beneficiary of the Participant shall, if the Participant is subject to tax in the United States, have the right to subject any deferred compensation (within the meaning of Section 409A) payable under
these Rules to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. In no event shall the recipient of Shares or other pay-out of any Award be permitted to designate the taxable year of the delivery or payment. It is intended that each instalment of the payments (including deliveries of Shares) provided under these Rules shall be treated as a separate "payment" for purposes of Section 409A. Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to or for the benefit of the Participant under these Rules may not be reduced by, or offset against, any amount owing by the Participant to the Company or any affiliate.
If, at the time of the Participant's separation from service (x) the Participant shall be a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time) and (y) the Company shall make a good faith determination that an amount payable (including Shares) under these Rules constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the Company (or an affiliate, as applicable) shall not pay such amount (or issue or transfer Shares) on the otherwise scheduled payment date but shall instead accumulate such amount and pay it (or issue or transfer Shares), without interest, during the seventh month following such separation from service. Further, to the extent an amount payable (including Shares) under these Rules constitutes deferred compensation subject to Section 409A, (i) any termination of a Participant's employment triggering payment (including delivery of Shares) under these Rules must constitute a "separation from service" under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before payment (including Share delivery) can commence; and (ii) to the extent that the termination of the Participant's employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by the Participant to the service recipient at the time the Participant's employment terminates), payments (including deliveries of Shares) under these Rules that constitute deferred compensation under Section 409A shall be delayed until the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this section shall not cause any forfeiture of an Award on the Participant's part but shall only act as a delay until such time as a "separation from service" occurs. For the purposes of this paragraph, the term "separation from service" means, with respect to a Participant, the Participant's termination of employment with the service recipient due to death, retirement or otherwise as provided in US Treasury Regulation § 1.409A-1(h), subject to the following: (a) the service recipient shall be determined without substituting "at least 50 percent" for "at least 80 percent" each place it appears in Sections 1563(a)(1), (2) and (3) of the Code and in US Treasury Regulation § 1.414(c)-2 (i.e., the "at least 80 percent" standard shall apply in determining the businesses under common control/controlled group); and (b) if no action is taken to exercise the discretion under US Treasury Regulation § 1.409A-1(h)(4) to specify whether Participants have experienced a separation from service in connection with certain asset purchase transactions, a separation from service shall be treated as having occurred.
Notwithstanding any provision of these Rules to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, the Company reserves the right to make amendments to these Rules as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, the Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of the Participant in connection with these Rules or any Award hereunder (including any taxes and penalties under Section 409A), and neither the Company nor any affiliate shall have any obligation to indemnify or otherwise hold the Participant harmless from any or all of such taxes or penalties.
In this Schedule 2:
"409A Compliant Award" means an Award (or portion thereof) that is not subject to a Performance Condition and, due to its terms, is subject to Section 409A.
"409A Exempt Award" means an Award (or portion thereof) that is not subject to a Performance Condition and, due to its terms, is exempt from Section 409A as a "short-term deferral."
"US Participant" means any Participant who is or becomes subject to United States federal income taxation in connection with the Award (a US taxpayer) at any time during the Performance Period.
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