Remuneration Information • Jun 12, 2023
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Download Source Filetitle: THE PEARSON REWARD PLAN
author: Robert Head
date: 2023-06-09 15:26:00+00:00
Preamble
THE BRITISH LAND COMPANY PLC LONG-TERM INCENTIVE PLAN 2013
Approved by shareholders on 19 July 2013
HM Revenue & Customs approved part of the Plan approved by HM Revenue & Customs on 31 October 2013
Amended by the Remuneration Committee on 16 March 2015 to incorporate amendments made with effect on and from 6 April 2014 by virtue of section 51 and Schedule 8 to the Finance Act 2014.
Amended by the Remuneration Committee on 5 November 2015 to incorporate amendments made in respect of Market-Price Options granted after 5 November 2015.
Amended pursuant to approval by shareholders on 19 July 2016 and further amended by the Remuneration Committee on 19 July 2019
Amended pursuant to approval by shareholders on [] 2023
CONTENTS
DESCRIPTION PAGE
Definitions 1
Grant of Awards 4
Plan Limits 4
Individual Limits 6
Specific Provisions relating to Performance Shares 6
Dividend Shares 7
Specific Provisions relating to Market-Price Options 8
Cessation of Employment – Market-Price Options and Performance Shares 9
Death of Participant – Market-Price Options and Performance Shares 11
General Offer for the Company, Etc – Market-Price Options and Performance Shares 11
Adjustment of Awards 15
Obligations During Holding Period 15
Malus and Clawback 16
Disciplinary proceedings 17
Allotment or Transfer of Shares on Exercise of Awards 17
Rights Attaching to Shares Allotted or Transferred Pursuant to Awards 18
Availability of Shares 18
data protection 19
Administration and Amendment 20
General 22
Appendix 1 Tax favoured part of the Plan 24
The Long-Term Incentive Plan 2013 has two elements:
the Performance Share element. This involves the award of conditional rights to receive Shares. The vesting of such awards will generally be subject to performance conditions; and
the Market-Price Option element. This involves the grant of options to acquire Shares, normally provided that the Participant remains an employee of a member of the Group until the Option Vesting Date, and will generally be subject to the satisfaction of performance conditions.
Definitions
In this Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings, namely:
Award means a right to acquire Shares under the rules of this Plan, comprising either Market-Price Option and/or Performance Share elements;
Award Certificate means a certificate which shall be in such form, whether paper or electronic, as the Committee, shall from time to time determine and include details of the key terms governing the Award;
Basic Salary means an Eligible Employee's annual gross basic salary in respect of his employment with the Group;
the Committee means the remuneration committee of the board of directors of the Company, or other duly authorised committee thereof;
the Company means The British Land Company plc;
Control has the meaning given to that word by section 995 of the Income Tax Act 2007;
Date of Grant means the date on which an Award is granted;
Dealing Day means any day on which the London Stock Exchange is open for business;
Directors means the directors of the Company from time to time;
Discretionary Share Plan means an Employees' Share Scheme in which participation is solely at the discretion of the Committee;
Dividend Shares means additional shares awarded to a Participant in respect of his Vesting Shares in accordance with rule 6.1 below;
Employees' Share Scheme has the meaning given by section 1166 of the Companies Act 2006;
Eligible Employee means any person who is an employee or executive director of the Company or a member of the Group;
Grant Period means the period of 42 days commencing on any of the following:
the day on which any amendment to the Plan is approved by shareholders of the Company in General Meeting;
the day immediately following the day on which the Company makes an announcement of its results for any year, half year or other period; or
any day on which the Committee resolves that exceptional circumstances exist which justify the grant of Awards;
the Group means the Company and the Subsidiaries and member of the Group shall be construed accordingly;
Holding Period means the two-year period following the Vesting Date during which certain Participants are subject to obligations as set forth in rule 12.
ITEPA means the Income Tax (Earnings and Pensions) Act 2003;
London Stock Exchange means the London Stock Exchange plc or any successor body thereto;
Market-Price Option means a right granted under the Plan to subscribe for or purchase Shares at the Option Exercise Price;
Market Value means, in relation to Shares on any day, for so long as such Shares are listed on a recognised stock exchange, their middle-market quotation as derived from the relevant stock exchange on which the Shares are listed or otherwise as determined by the Committee;
Option Exercise Price means the price per Share payable on the exercise of a Market-Price Option as determined by the Committee, being not less than the average of the Market Value of the Shares placed under Option on the three Dealing Days immediately preceding the relevant Date of Grant (subject to adjustment under rule 11) (provided that, in the case of any Market-Price Option under which Shares are to be issued, the Option Exercise Price shall also not be less than the nominal value of a Share);
Option Period means, in relation to a Market-Price Option, the period commencing on the Option Vesting Date and expiring on the tenth anniversary of the Date of Grant;
Option Vesting Date means the date specified by the Committee at the Date of Grant as the date on which a Market-Price Option normally becomes exercisable;
Participant means any individual who holds a subsisting Award (including, where the context permits, the legal personal representatives of a deceased Participant);
Performance Period means the period over which any performance condition attaching to an Award must be satisfied;
Performance Share means a conditional right granted under the Plan to receive Shares without payment;
Performance Share Vesting Date means (unless the Committee specifies otherwise at its Date of Grant), the third anniversary of the Date of Grant of the Performance Shares (or, if later, the date of publication of the final set of accounts of the Company which are relevant to the determination of the applicable performance condition);
Plan means this Long-Term Incentive Plan 2013 as amended from time to time;
Retirement means termination of employment within the Group in circumstances that the Committee considers to constitute retirement;
Shares means fully paid and irredeemable ordinary shares in the capital of the Company or shares representing those shares following any reorganisation of the share capital of the Company, and not subject to any restrictions other than restrictions which attach to all shares of the same class;
Subsidiary means any subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006 over which the Company has Control;
Treasury Shares means Shares held in accordance with sections 724-732 of the Companies Act 2006;
Trustee means the trustee from time to time of any employee benefit trust established by the Company that the Company wishes to operate in conjunction with the Plan from time to time;
TUPE means the Transfer of Undertakings (Protection of Employment) Regulations 2006;
Vesting Date means either Option Vesting Date or Performance Share Vesting Date, as applicable; and
Vesting Shares means that number of Shares under a Participant's Performance Share Award which vest in accordance with the rules of the Plan.
Where the context permits the singular shall include the plural and vice versa. Headings shall be ignored in construing the Plan.
References to any act shall include any statutory modification, amendment or re-enactment thereof.
Grant of Awards
The Committee may, during a Grant Period, grant Awards to Eligible Employees selected by the Committee in its absolute discretion. For the avoidance of doubt, no Eligible Employee shall have the right or expectation to participate in the Plan in any year.
Each Award shall comprise such Performance Shares or Market-Price Options or a combination of both Performance Shares and Market-Price Options in such proportions as the Committee thinks fit in its absolute discretion.
The grant of an Award and/or the delivery of Shares upon exercise or vesting thereof shall be conditional on the Eligible Employee agreeing to comply with any arrangements specified by the Company for the payment of taxation and social security contributions (including without limitation the right to sell on his or her behalf sufficient Shares to satisfy any taxation or social security contributions liability on his or her part for which any member of the Group may be liable) in respect of an Award.
On granting Awards, the Company shall enter into a deed poll or take such other steps as are necessary to evidence their legal enforceability. As soon as practicable after the Date of Grant, the Committee shall procure the issue to such Eligible Employee of an Award Certificate. The Award Certificate shall specify whether the Shares subject to the Awards shall be subject to the Holding Period.
No Award shall be granted under the Plan later than [] 2033.
Every Award granted hereunder shall be personal to the Participant and, except to the extent necessary to enable a personal representative to exercise the Award or receive Shares on the vesting of an Award following the death of a Participant, neither the Award nor the benefit thereof may be transferred, assigned, charged or otherwise alienated. Any transfer of an Award otherwise than as permitted under this rule 2.6 shall cause the Award to lapse.
Plan Limits
Awards may be satisfied using existing issued Shares, Treasury Shares or new Shares issued at the time of exercise to the Participant or to the Trustee.
To the extent that Awards are to be satisfied by the Trustee, the Company shall provide (and shall procure, where appropriate, that any member of the Group which employs Participants shall provide) sufficient monies to enable the Trustee to acquire sufficient Shares to satisfy all such Awards. Such monies shall be provided to the Trustee no later than the date on which the relevant Award vests or becomes exercisable.
No Award to subscribe for Shares shall be granted under the Plan to the extent that the result of that grant would be that:
the aggregate number of Shares that could be issued on vesting or exercise of that Award and any other Awards granted at the same time, when added to the number of Shares that:
could be issued on the vesting or exercise of any subsisting Awards granted during the preceding ten years under the Plan or any other Employees' Share Scheme established by the Company; and
have been issued on the vesting or exercise of any Awards granted during the preceding ten years under the Plan or any other Employees' Share Scheme established by the Company,
would exceed 10 per cent of the ordinary share capital of the Company for the time being in issue; or
the aggregate number of Shares that could be issued on vesting or exercise of that Award and any other Awards granted at the same time, when added to the number of Shares that:
could be issued on the vesting or exercise of any subsisting Awards granted during the preceding ten years under the Plan or any other Discretionary Share Plan established by the Company; and
have been issued on the vesting or exercise of any Awards granted during the preceding ten years under the Plan or any other Discretionary Share Plan established by the Company,
would exceed 5 per cent of the ordinary share capital of the Company for the time being in issue.
Reference in this rule 3 to the issue of Shares shall, for the avoidance of doubt, mean the issue and allotment (but not transfer) of Shares and shall include Treasury Shares so issued for so long as this is required by institutional investor guidelines.
For the purposes of the limits contained in rule 3.3:
the following shall be disregarded:
any Shares that have been or will be acquired on the market in order to satisfy options or rights; or
any Shares comprised in any option or rights which has lapsed or been cancelled;
any Shares which are issued pursuant to the grant of options or other rights to acquire Shares shall be taken into account once only on the date they are placed under option or the rights are granted, or if later, on the date it is determined that the options or rights as appropriate shall be satisfied with the issue of new Shares.
Individual Limits
Save as provided in this rule 4, no Eligible Employee shall be granted Awards which would cause the aggregate of the Market Value of the Shares he may acquire on exercise or vesting of those Awards granted to him under the Plan in any financial year (such values to be determined as at the respective dates of grant of the relevant Awards), to exceed 300 per cent of his Basic Salary.
For the purposes of rule 4.1:
the value of Awards granted as Performance Shares shall be the average of the total Market Value of the Performance Shares on the three Dealing Days immediately preceding the Date of Grant; and
the value of Awards granted as Market-Price Options shall be one quarter of the average of the Market Value of the Shares placed under Option on the three Dealing Days immediately preceding the relevant Date of Grant (or such other value as the Committee considers appropriate based on the application of economic models for the valuation of share options).
If the grant of any Award would have the result of breaching the limit in rule 4.1 that Award shall be treated as taking effect over the maximum number of Shares over which it could have been granted without breaching such limit.
The Committee may, at its discretion, determine that the limits in rule 4.1 shall be increased if the Eligible Employee is a new recruit to the Company, and the Awards relate to the buy-out of share awards granted by a previous employer that are forfeited on joining the Company. Any exercise of such discretion shall be notified to the Eligible Employee at the Date of Grant.
Specific Provisions relating to Performance Shares
A Performance Share Award consists of a conditional right to receive a number of Shares at no cost to the Participant on the terms referred to in these rules.
The Committee shall require that a performance condition must be satisfied prior to the vesting of the Performance Shares (provided that the Committee may at its discretion not impose a performance condition insofar as the grant relates to the buy-out of share awards granted by a previous employer that are forfeited on joining the Company). Such condition shall:
be determined by the Committee prior to the grant of the Performance Share Award; and
be subject to a minimum of a three year Performance Period commencing with the Date of Grant or such other date as shall be specified by the Committee at the Date of Grant.
The number of Shares that are capable of vesting under a Performance Share Award shall be determined by the extent to which an objective performance measure is satisfied over the Performance Period. The performance condition applicable to a Performance Share Award shall be determined by the Committee prior to the grant of the Award and shall be specified at the Date of Grant.
Performance Shares under an Award held by a Participant shall not grant the Participant any shareholder rights until the relevant Performance Share Vesting Date.
Following the vesting of a Performance Share Award, the Vesting Shares shall be delivered to a Participant as soon as practicable thereafter.
The Vesting Shares delivered to a Participant who was an executive director of the Company on the Date of Grant (or whose Award was granted subject to the Holding Period as provided in rule 2.4) shall be subject to the Holding Period (provided that the Committee may at its discretion choose not to impose a Holding Period insofar as the grant relates to the buy-out of share awards granted by a previous employer that are forfeited on joining the Company).
Where the delivery of Shares under the Plan would be prohibited by law, the Company's dealing rules or any other relevant regulations, the Shares shall be delivered to the Participant as soon as practicable after the prohibition has ceased to apply.
Dividend Shares
In addition to any Vesting Shares to which a Participant becomes entitled in relation to a Performance Share Award in accordance with the rules of this Plan, the Committee may in its discretion determine and document in the relevant Award Certificate that the Participant shall be awarded, with effect from the Performance Share Vesting Date, such number of Dividend Shares as is equal to the number of Shares which could have been purchased if each dividend (grossed up, where relevant, for any associated tax credit or tax withholding) paid on the Vesting Shares in the period between the Date of Grant and the Performance Share Vesting Date had been reinvested in additional Shares on the date of payment of each such dividend. The number of Dividend Shares shall be calculated on a cumulative basis, so that (for calculation purposes only, and without an interest in Shares arising prior to the Performance Share Vesting Date) Dividend Shares shall be notionally attributed to Vesting Shares as at each individual payment date. No special dividend that has led to an adjustment under rule 11 shall be brought into account for Dividend Share purposes.
Subject to rule 6.3, on the transfer to the Participant of the Vesting Shares under an Award in accordance with these rules, the Committee shall also arrange the transfer to the Participant of the Dividend Shares to which the Participant is entitled in relation to such Award under rule 6.1.
The Committee may in its absolute discretion elect to pay cash to a Participant instead of transferring Dividend Shares under rule 6.2. The amount of cash to be paid (subject to deduction of tax or similar liabilities) shall be equal to the aggregate amount of each dividend (grossed up, where relevant, for any associated tax credit or tax withholding) paid on the Vesting Shares in the period between the Date of Grant and the Performance Share Vesting Date.
Specific Provisions relating to Market-Price Options
At the time of granting Market-Price Options, the Committee shall specify the Option Vesting Date applicable to the Market-Price Option. The Committee shall also specify at the Date of Grant such other conditions as it determines shall be applicable to the Market-Price Option.
The Committee shall require that a performance condition be satisfied prior to the exercise of the Market-Price Options (provided that the Committee may at its discretion not impose a performance condition insofar as the grant relates to the buy-out of share awards granted by a previous employer that are forfeited on joining the Company). Such condition shall:
be determined by the Committee prior to the grant of the Market-Price Options; and
be subject to a minimum of a three year Performance Period commencing with the Date of Grant or such other date as shall be specified by the Committee at the Date of Grant.
To the extent that any performance conditions are not met at the end of the Performance Period, the Shares (or a relevant number thereof) under a Market-Price Option shall lapse on the date the determination of the performance conditions is made.
A Participant may exercise a Market-Price Option in whole or in part by giving notice in writing to the Company in the form prescribed by the Company specifying the Market-Price Option being exercised on that occasion, the number of Shares in respect of which the Option is being exercised and enclosing or arranging to provide cash payment in full of the aggregate Option Exercise Price in respect of those Shares. If the Market-Price Option is exercised in respect of some only of the Shares comprised in a Market-Price Option, the Company shall procure the issue of a revised Award Certificate to the Participant in respect of the balance or call in the original Award Certificate for endorsement.
A Market-Price Option (and Shares acquired from exercise of a Market-Price Option) held by a Participant who was an executive director of the Company on the Date of Grant (or whose Award was granted subject to the Holding Period as provided in rule 2.4) shall be subject to the Holding Period, provided that the Participant shall be permitted to exercise the Market-Price Option during the Holding Period (and provided that the Committee may at its discretion choose not to impose a Holding Period insofar as the grant relates to the buy-out of share awards granted by a previous employer that are forfeited on joining the Company).
Notwithstanding any other provision in these rules, a Market-Price Option shall lapse automatically on the earliest of:
the expiry of the Option Period;
the Participant ceasing to be an employee of a member of the Group (save as provided in rules 8 and 9);
any of the dates specified in rules 7.3 and 10; and
the Participant being declared bankrupt or entering into any general composition with or for the benefit of his or her creditors.
Where a Market-Price 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 in accordance with Rule 15.1, the Committee may, in its discretion, determine that, in substitution for the Participant's right to acquire such number of those Shares under the Market-Price Option, the Participant shall (in full and final satisfaction of his said right) be delivered Shares with a value equal to the settlement value (as determined in rule 7.8 below) of the Shares under the Market-Price Option.
For the purposes of rule 7.7, the settlement value of any Shares under a Market-Price Option is the amount by which the aggregate Market Value for the Shares on the Dealing Day immediately preceding the date on which the Market-Price Option was exercised, exceeds the aggregate Option Exercise Price at which those Shares may be acquired by the exercise of the Market-Price Option.
As soon as reasonably practicable after the Committee has made a determination under Rule 7.7:
the Company shall deliver, or procure the delivery of, the Shares to the Participant (net of Shares sales to meet a tax liability under rule 2.3), and a failure to deliver (or procure the delivery of) the Shares within 30 days shall invalidate the Committee's determination under Rule 7.7 and the Participant shall retain his right to receive the Shares under Market-Price Option; and
if the Participant has already paid the Company the Option Exercise Price to exercise his Option, the Company shall return to him the amount so paid.
Cessation of Employment – Market-Price Options and Performance Shares
Save as otherwise provided in these rules, an Award shall lapse automatically on the Participant ceasing to be an employee of a member of the Group.
Where a Participant ceases to be an employee of a member of the Group by reason of:
injury, disability or ill-health (as determined by the Committee);
Retirement;
redundancy (within the meaning of the Employment Rights Act 1996);
his or her employing company or business ceasing to be part of the Group;
a relevant transfer within the meaning of TUPE; or
any other reason if the Committee so decides in its absolute discretion, such discretion to be applied on a fair and reasonable basis,
then the following provisions shall apply:
subject to the provisions of rule 8.3 below, any Performance Shares which has not already vested or lapsed in accordance with these rules shall remain in force subject to any performance condition as if the Participant had not ceased employment. The Performance Shares shall vest on the Performance Share Vesting Date (if and to the extent that the relevant performance conditions are met), unless the Committee determines that the Performance Shares shall instead vest on the date the Participant ceases to be an employee of a member of the Group;
subject to the provisions of rule 8.3 below, any Market-Price Option which is subject to a performance condition (at the date the Participant ceases employment) shall continue subject to the performance condition as if the Participant had not ceased employment. The Market Price Option shall become exercisable (if and to the extent that the relevant performance conditions are met), for a period of six months from the original Option Vesting Date (or, if the Committee so determines, from the date the Participant ceases to be an employee of a member of the Group), at the end of which period the Market-Price Option will lapse; and
any Market-Price Option which has satisfied its performance conditions (or is not subject to a performance condition) may be exercised at any time within the period of six months following cessation of employment and will then lapse.
In determining the number of Shares which vest under an Award for the purposes of sub-paragraphs (i) and (ii) of Rule 8.2 the following shall apply:
the number of Shares over which the Award vests shall be multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to the Participant's leaving date, and B is the number of complete months from the Date of Grant to the relevant Performance Share Vesting Date or the Option Vesting Date (as the case may be). However, the Committee may in its absolute discretion determine that the Participant's entitlement should not be scaled down or should be scaled down in part only (the extent of scaling down being determined by the Committee, in its absolute discretion).
For the purposes of rules 8.1 and 8.2 a Participant on maternity, paternity, adoption or shared parental leave shall not be treated as ceasing to be an employee of a member of the Group until such Participant notifies his or her employer of his or her intention not to return to work or ceases to be entitled to exercise a right to return to work.
For the purposes of this rule 8, the Participant shall not be treated as having ceased to hold office or employment or as having given notice to cease office or employment if immediately following the cessation the Participant holds an office or employment with any member of the Group, or in respect of any notice of cessation if arrangements are in place that mean immediately following the notice becoming effective the Participant will hold an office or employment with any member of the Group.
Death of Participant – Market-Price Options and Performance Shares
If a Participant dies while in service (or at any time after leaving service when he or she holds an Award at the time of his or her death), the Committee shall determine in its absolute discretion what proportion (if any) of an Award may be exercised or shall vest early (taking into account the satisfaction of any performance conditions) and what time period for exercise of a Market-Price Option should be permitted.
For the avoidance of doubt, an Award exercisable under rule 9.1 may lapse at an earlier date by virtue of rule 10.
General Offer for the Company, Etc – Market-Price Options and Performance Shares
General Offer
If any person (either alone or together with any person acting in concert with him) obtains Control of the Company as a result of a general offer to acquire the whole of the share capital of the Company (other than those Shares which are already owned by him and/or any person acting in concert with him), then the following provisions shall apply:
subject to the provisions of rule 10.7, any Market-Price Option which is subject to a performance condition (whether or not it is already exercisable at the date on which the offer becomes unconditional in all respects) may be exercised at any time within the period in rule 10.2 (and will then lapse);
any Market-Price Option which has satisfied its performance condition (or is not subject to a performance condition) may be exercised at any time within the period in rule 10.2 (and will then lapse); and
subject to the provisions of rule 10.7, any Performance Shares shall vest on the date on which the offer becomes unconditional in all respects. The Shares shall be released to the Participant as soon as practicable after this date.
Following a change of Control pursuant to rule 10.1 any Market-Price Option which has not been exercised (including non-exercise by reason of performance conditions not being met) shall (unless validly exchanged under rule 10.8) lapse on the earlier of the following dates:
six months from the date on which the offer becomes unconditional in all respects; and
one month after the date on which any person becomes bound or entitled to give a notice under sections 979 to 982 of the Companies Act 2006 to acquire any Shares (or would be so entitled but for the fact that there were no dissenting shareholders).
Scheme of Compromise or Arrangement
If a court shall direct that a meeting of the holders of Shares be convened pursuant to Part 26 or 26A of the Companies Act 2006 for the purposes of considering a compromise or arrangement of the Company then (unless rule 10.4 applies) the following shall apply:
any Market-Price Option (whether or not it is already exercisable at the Relevant Date) may be exercised conditionally on either the compromise or arrangement being approved by the shareholders' meeting or sanctioned by the court (as determined by the Committee in its absolute discretion) (the Relevant Condition), between the date of the court's direction and twelve noon on the day immediately preceding the date for which the shareholders' meeting (the Relevant Date) is convened; and any Market-Price Option not exercised by twelve noon on the Relevant Date shall cease to be exercisable between that time and the first date on which it can be determined whether or not the relevant condition is satisfied. If the Relevant Condition is not satisfied, the Market-Price Options shall continue. If the Relevant Condition is satisfied Market-Price Options shall, unless validly exchanged under rule 10.8, lapse automatically on the date on which the compromise or arrangement is sanctioned by the court.
Any Market-Price Option which is subject to a performance condition may only be exercised subject to the provisions of rule 10.7.
Where new Shares would be issued on exercise of a Market-Price Option, the Committee shall endeavour to procure that, provided a Participant has conditionally exercised his or her Market-Price Option as described above prior to twelve noon on the Relevant Date, the compromise or arrangement shall be extended to such Participant as if each Share in respect of which the Market-Price Option was conditionally exercised had been allotted and issued to him or her by that time.
subject to the provisions of rule 10.7, any Performance Share Award shall vest on the date on which the compromise or arrangement is sanctioned by the Court and the Shares shall be released to the Participant as soon as practicable thereafter. If the compromise or arrangement is not sanctioned by the Court, the Performance Share Awards shall not vest but shall continue in force.
Unless the Committee determines otherwise, Awards shall not without the consent of the Committee be exercisable or vest early under rule 10.3 if the purpose and effect of the compromise or arrangement is to create a new holding company for the Company or its assets, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the compromise or arrangement. In that event, the Committee shall endeavour to procure that an exchange of Awards is effected under rule 10.8.
Voluntary Winding-up
If notice is duly given of a resolution for a voluntary winding-up of the Company then a Participant may take the following action:
subject to the provisions of rule 10.7, any Market-Price Option which is subject to a performance condition may be exercised at any time during the period starting from the date of the resolution until the date the resolution is passed, defeated or withdrawn, failing which exercise the Market-Price Option shall lapse automatically;
any Market-Price Option which has satisfied its performance condition (or is not subject to a performance condition) may be exercised at any time during the period starting from the date of the resolution until the date the resolution is passed, defeated or withdrawn, failing which exercise the Market-Price Option shall lapse automatically; and
subject to the provisions of rule 10.7, any Performance Share Award shall vest and the Shares shall be released to the Participant as soon as practicable thereafter.
Demerger or special dividend
If the Committee so determines, and following the announcement of a demerger of a substantial part of the Group's business, a special dividend or a similar event affecting the value of Shares to a material extent, a Participant may take the following action:
subject to the provisions of rule 10.7, any Market-Price Option which is subject to a performance condition may be exercised at any time during the during a period of two months (or such other period as the Board may determine) from the date specified by the Board, failing which exercise the Market-Price Option shall lapse automatically;
any Market-Price Option which has satisfied its performance condition (or is not subject to a performance condition) may be exercised at any time during the during a period of two months (or such other period as the Board may determine) from the date specified by the Board, failing which exercise the Market-Price Option shall lapse automatically; and
subject to the provisions of rule 10.7, any Performance Share Award shall vest and the Shares shall be released to the Participant as soon as practicable thereafter.
Application of performance conditions and pro-rating
Where any Performance Share Award or Market-Price Option becomes realisable before the end of the Performance Period under rules 10.1 to 10.6 the number of Shares which shall vest under the Performance Share Award or Market-Price Option shall be determined by the Committee by reference to the extent that the performance conditions are met as at the date of the relevant event SAVE THAT the Committee may, in its absolute discretion, modify the number of Shares which shall vest under the Performance Share Award or Market-Price Option Award if it considers that the performance condition would have been met to a greater or lesser extent at the end of the full performance period. Time pro rating shall then be applied so that, in the case of both Performance Share Awards and Market-Price Options, the number of Shares so determined shall then be multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to the date of the relevant event and B is the number of complete months from the Date of Grant to the relevant Performance Share Vesting Date or the Option Vesting Date (as the case may be). Notwithstanding the previous sentence the impact of time pro rating may be moderated in that the Committee may at its absolute discretion in appropriate circumstances (but not so as to result in an unjustifiably large vesting level) disapply or alter the A/B fraction stated above to release a greater number of Shares if it considers that the contribution of the Participant to the creation of shareholder value during the Performance Period would not otherwise be properly recognised.
Exchange of Awards
If any company (the Acquiring Company) obtains Control of the Company or its assets as a result of an event referred to in this rule 10, each Participant may, at any time within six months of the change of Control, with the agreement of the Acquiring Company, release any Market-Price Option or Performance Share Award which has not lapsed (the Old Right) in consideration of the grant to him or her of a new award, which in the opinion of the Committee and the Acquiring Company is equivalent to the Old Right but relates to shares in a different company (whether the Acquiring Company itself or another company its group). Any performance conditions to which the Market-Price Option Performance Share Award are subject shall cease to apply unless the Committee determines, in its absolute discretion, that they should continue to apply to the new award (subject to such alterations as the Committee deems appropriate).
Adjustment of Awards
In the event of:
any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation or rights issue or any consolidation, sub-division or reduction); or
the implementation by the Company of a demerger or the payment by the Company of a special dividend which would otherwise materially affect the value of an Award,
then
in relation to Market-Price Options, the Option Exercise Price and the number of Shares comprised in a Market-Price Option and any performance conditions to which the Market-Price Option is subject shall be adjusted in such manner as the Committee shall determine in its absolute discretion; and
in relation to Performance Shares, the number of Shares subject to the Performance Share Award and any performance conditions to which the Performance Shares are subject shall be adjusted in such manner as the Committee shall determine in its absolute discretion.
provided that in the case of Market-Price Options, no adjustment shall be made pursuant to this rule which would increase the aggregate amount payable on exercise of the Market-Price Options.
Obligations During Holding Period
With respect to the Awards and Shares subject to a Holding Period pursuant to rules 5.6 and 7.5, during the Holding Period:
subject to this rule 12.1, the Participant's rights under rule 16.1 shall not be affected;
the Participant shall comply with such arrangements as the Company shall specify for ensuring that the Shares subject to the Holding Period are not disposed of during the Holding Period including (without limitation) a requirement either that such Shares be held in the name of a nominee appointed by the Company or that Share certificates be retained by the Company or its appointed representative;
the Participant shall be permitted to sell the Shares to the extent necessary to satisfy the Option Exercise Price (in the case of a Market-Price Option), income tax, and employees' national insurance contributions liability resulting from the vesting or exercise of the Awards; and
if there occurs an event that would give rise to the adjustment under rule 11, the Shares subject to the Holding Period shall be treated in such manner as the Committee determines, with the objective that such Shares should be treated cash-neutrally in relation to the relevant event. In accordance with that principle, but without limitation to the foregoing:
in the event of a rights issue, the Participant shall be required to sell sufficient of the rights that are attributable to the Shares (at such time as the Committee shall determine) in order to take up the remaining rights with the proceeds of sale of such other rights; and
in the event of a reorganization which involves a return of cash or other assets to shareholders, the Participant shall be required to reinvest such cash or other assets in Shares.
Awards and Shares shall remain subject to the Holding Period after the Participant ceases to be an employee of a member of the Group, provided that if the Participant dies while in service (or at any time after leaving service), the Committee shall determine in its absolute discretion whether the Holding Period shall lapse.
Upon occurrence of events described in rules 10.1, 10.3 and 10.5, any existing Holding Periods shall lapse.
Malus and Clawback
The Committee may at any time prior to the later of the third anniversary of the Vesting Date of an Award and, in the case of a Market-Price Option, the exercise date, including prior to the Vesting Date, take any action under rule 13.2 or 13.3 in respect of an Award if the Committee, in its sole discretion, determines that:
the financial accounts of any member of the Group or relevant business unit used in assessing the value of the Award were materially misstated;
any other results or information relied on in assessing the value of the Award is incorrect, inaccurate or misleading or an erroneous calculation was made in assessing the value of such Award;
any information relied on in assessing the extent to which any condition imposed pursuant to Rule 5.3 or 7.2 was met is incorrect, inaccurate or misleading or an erroneous calculation was made in making such assessment;
the Participant has committed at any time, including prior to grant, an act or omission which constitutes fraud or justifies, or in the reasonable opinion of the Committee would have justified, summary dismissal or service of notice of termination of office or employment on the grounds of misconduct;
circumstances have arisen which may in the opinion of the Committee result in any member of the Group becoming insolvent; or
the Participant's behaviour has caused or contributed to a material extent to either the censure of any member of the Group by any regulatory authority or a significant detrimental impact to the reputation of any member of the Group.
The Committee may, in its discretion, determine at any time prior to the delivery of Shares in satisfaction of an Award to:
reduce (including to zero) the number of Shares to which an Award relates;
impose further conditions on an Award; or
suspend the vesting of the Award, exercise of a Market-Price Option or release of Shares.
The Committee may, in its discretion, determine at any time after the delivery of Shares to a Participant following the vesting of an Award or exercise of a Market-Price Option to:
require a Participant to make a cash payment to the Company in respect of the value of some or all of the Shares delivered to the Participant in respect of the Award; or
require a Participant to transfer for nil consideration to the Company (or as the Company directs) a number of Shares of up to the number of Shares delivered to the Participant in respect of the Award,
and the Committee will have the discretion to determine the basis on which the amount of cash or Shares is calculated, taking into account any Option Exercise Price paid by the Participant in respect of the exercise of a Market-Price Option, including whether and if so to what extent to take account of any tax or social security liability applicable to the Award.
By participating in the Plan, the Participant acknowledges that the Committee may lapse any Award to such extent as it determines to be necessary (including in full) in order to give effect to a claw-back under the terms of the Plan or any other incentive or bonus scheme operated from time to time by any member of the Group.
Disciplinary proceedings
Unless the Board determines otherwise, an Award shall not vest, a Market-Price Option may not be exercised and a Holding Period may be extended while a Participant is subject to a regulatory investigation process and/or formal disciplinary process (or similar), or where a Participant has been served with notice that such a process may be instigated without such notice having been rescinded, and vesting, exercise or the conclusion of the Holding Period, as applicable, shall (subject to the Award lapsing to any extent prior to or as a result of the conclusion of such process pursuant to rules 8 or 13) be delayed until the conclusion of such process.
Allotment or Transfer of Shares on Exercise of Awards
Subject to any necessary consents, to payment being made for the Shares (where applicable) and to compliance by the Participant with the terms of the Plan, not later than 30 days after receipt of any valid notice of exercise, the Company shall, subject to rule 12.2, either allot and issue or procure the transfer of Shares (including Treasury Shares) to the Participant (or to his or her nominee). The Company shall (unless the Shares are to be issued in uncertificated form) as soon as practicable deliver to the Participant (or his or her nominee) a definitive share certificate or other evidence of title in respect of such Shares.
The Company shall not be obligated to issue or deliver Shares in connection with any Award or take any other action under the Plan in a transaction subject to the requirements of any applicable securities law, any requirement under any listing agreement between the Company and any securities exchange or automated quotation system or any other law, regulation or contractual obligation of the company until the Company is satisfied that such laws, regulations, and other obligations of the Company have been complied with in full. The Company may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Shares under the Plan. Certificates representing Shares will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations and other obligations of the Company, and a legend or legends may be placed thereon to reflect such restrictions.
Rights Attaching to Shares Allotted or Transferred Pursuant to Awards
All Shares allotted or transferred upon the exercise or vesting of an Award shall rank pari passu in all respects with the Shares in issue at the date of exercise save as regards any rights attaching to such Shares by reference to a record date prior to the date of exercise.
Any Shares acquired on exercise or vesting of Awards shall be subject to the articles of association of the Company from time to time.
Availability of Shares
The Company shall at all times keep available for issue sufficient authorised but unissued Shares to satisfy Awards under which Shares may be allotted or shall otherwise procure that Shares are available for transfer in satisfaction of Awards. Treasury Shares may be used to satisfy Awards.
The Company will, at its expense, make application to The London Stock Exchange for admission to the Official List of Shares allotted pursuant to this Plan.
data protection
From time to time the personal data of the Participant will be collected, used, stored, transferred and otherwise processed for the purposes described in rules 18.2 and 18.3. The legal grounds for this processing will (depending on the nature and purpose of any specific instance of processing) be one of: (i) such processing being necessary for the purposes of the legitimate interests of the Company and each other member of the Group in incentivising their officers and employees and operating the Plan; (ii) such processing being necessary for the purposes of any relevant data controller in respect of such personal data complying with its legal obligations; and (iii) such processing being necessary for the performance of the contractual obligations arising under the Plan. The collection and processing of such personal data for such purposes is a contractual requirement of participation in the Plan.
The purposes for which personal data shall be processed as referred to in this Rule 18 shall be in order to allow the Company and any other relevant members of the Group to incentivise their officers and employees and to operate the Plan and to fulfil its or their obligations to the Participant under the Plan, and for other purposes relating to or which may become related to the Participant's office or employment, the operation of the Plan or the business of the Group or to comply with legal obligations. Such processing will principally be for, but will not be limited to, personnel, administrative, financial, regulatory or payroll purposes as well as for the purposes of introducing and administering the Plan.
The personal data to be processed as referred to in this Rule 18 may be disclosed or transferred to, and/or processed by:
any professional advisors of the Company or any member of the Group, HM Revenue & Customs or any other revenue, regulatory or governmental authorities;
the Trustee; any registrars, brokers, other third party administrator appointed in connection with any employee share or incentive plans operated by the Company or any member of the Group; any person appointed (whether by the Participant or the Company or any member of the Group) to act as nominee on behalf of (or provide a similar service to) the Participant;
subject to appropriate confidentiality undertakings, any prospective purchasers of, and/or any person who obtains control of or acquires, the Company or the whole or part of the business of the Group; or
any member of the Group and officers, employees or agents of such member of the Group.
The personal data collected or processed in accordance with this Rule 18 shall be stored until the expiry of a period of 7 years following the later of the time at which the Participant has ceased to hold office or employment with, or have any other direct or indirect contractual relationship (including any consultancy or similar relationship) with, the Company or any member of the Group and the time at which all obligations owed to the Participant or which arise in relation to a Participant's participation in the Plan have been fulfilled, and may further be stored for a period thereafter in the event of there being any commercial, legal or regulatory necessity to do so (such as any ongoing legal proceedings, investigations or audits), and shall also be stored during any longer period specified in the Information and Records Management Policy.
Further information in relation to the processing of personal data referred to in this Rule 18, including the details and identity of the data controller and of the Participant's rights to request access to or rectification or erasure or restriction of processing of such personal data and/or to object to such processing (in each case subject to the conditions attached to such rights), as well as details of the right to data portability, are available in the Employee Handbook (or otherwise on request to the General Counsel and Company Secretary).
To the extent that the processing of personal data of a Participant referred to in this Rule 18 is subject to the laws or regulations of any jurisdiction that is not the United Kingdom or an EU member state and under which the legal grounds for processing described in Rule 16.1 do not provide a sufficient legal basis under such other laws or regulations for the processing referred to in Rule 18.1 to 18.3, by participating in the Plan such Participant consents to such processing for the purposes of such other laws or regulations (but shall not be deemed to consent to such processing for the purposes of EU Regulation 2016/679 ("EU GDPR") or the UK Data Protection Act 2018 ("UK GDPR")).
In this Rule 18, "personal data" and "data controller" each have the meaning given in EU GDPR or UK GDPR as appropriate and the "Employee Handbook" means the handbook or handbooks available from time to time to Participants in connection with their holding of office or employment with a member of the Group.
The Participant may lodge a complaint to the Information Commissioner should the Participant consider there has been a breach of data privacy legislation. The Company is the relevant data controller.
Administration and Amendment
The decision of the Committee shall be final and binding in all matters relating to the Plan and it may at any time discontinue the grant of further Awards or amend any of the provisions of the Plan in any way it thinks fit provided that:
the performance conditions attaching to any Award may be amended following the Date of Grant but before the expiry of the Performance Period if:
events happen following the Date of Grant with the result that the circumstances which prevailed at the Date of Grant which were relevant to the conditions that were originally imposed regarding the exercise or vesting of the Award have subsequently changed;
the Committee considers that the performance conditions would not continue to achieve its original purpose and maintain the alignment of Participants' interests with those of shareholders; and
the Committee is satisfied that any such amended conditions would be a fairer measure of the performance of the Company, and the Committee reasonably considers that such amended conditions are no more difficult to satisfy than the original conditions;
where performance conditions have been amended in accordance with rule 19.1(a), the Committee shall issue to the Participants so affected a replacement Award Certificate or other notice including the details summarising the key terms affecting the Award;
the Committee shall not make any amendment that would materially prejudice the interests of existing Participants except with the prior consent or sanction of Participants who, if they exercised their Awards in full, would thereby become entitled to not less than three-quarters of all the Shares which would fall to be allotted or transferred upon exercise or vesting in full of all outstanding Awards;
no amendment to the advantage of Eligible Employees or Participants may be made to:
the definition of Eligible Employee in rule 1.1;
the limit on the number of Shares available for issue under the Plan;
the basis for determining the number of Shares comprised in either Market-Price Options or Performance Shares;
the terms of Shares to be provided under the Plan; and
the adjustment provisions of rule 11 of the Plan
without the prior approval of the Company in general meeting except in the case of minor amendments to benefit the administration of the Plan, to take account of a change in legislation or developments in the law affecting the Plan or to obtain or maintain favourable tax, exchange control or regulatory treatment for Eligible Employees and Participants or any member of the Group; and
without prejudice to any provision of the Plan which provides for the lapse of an Award, the Committee may not cancel an Award unless the Participant agrees in writing to such cancellation.
Notwithstanding any other provision of the Plan, the Committee may establish appendices to the Plan for the purpose of granting Awards to Eligible Employees who are or may become primarily liable to tax outside the United Kingdom on their remuneration, subject to such modifications as may be necessary or desirable to take account of overseas tax, exchange control or securities laws provided that any Shares made available under such appendices shall count towards the limit set out in rule 3 hereof.
The Committee may, from time to time, delegate its powers and duties under rules 8 and 9 of the Plan (other than as they are applied to executive directors of the Company) to the persons it designates. The terms of such delegation shall be set forth in written guidelines, which shall not be in contrary to the provisions of the Plan. Any decisions made by the designees pursuant to the guidelines shall be reported to, and deemed to be, decisions of the Committee.
For the avoidance of doubt, any appendices to the Plan established by the Committee pursuant to rule 19.2 above and any Shares under Awards granted pursuant to those appendices shall not form part of Appendix 1 (Tax Favoured Part of the Plan).
General
Any member of the Group may provide money to the Trustee or any other person to enable them to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent not prohibited by sections 678-680 of the Companies Act 2006.
The rights and obligations of a Participant under the terms and conditions of his or her office or employment shall not be affected by his or her participation in the Plan or any expectation or right which (notwithstanding rule 2.1) he or she believes he or she may have to participate in the Plan. An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of his or her office or employment with any company for any reason whatsoever insofar as those rights arise, or may arise, from his or her ceasing to have rights under or be entitled to exercise any Award under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant's terms of employment shall be deemed to be varied accordingly.
The existence of any Award shall not affect in any way the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company's capital structure, or any merger or consolidation of the Company, or any issue of shares, bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
Any notice or other document required to be given under or in connection with the Plan may be delivered to a Participant or sent by post to him or her at his or her home address according to the records of his or her employing company or such other address as may appear to the Company to be appropriate. Notices sent by post shall be deemed to have been given on the day following the date of posting. Any notice or other document required to be given to the Company under or in connection with the Plan may be delivered or sent by post to it at its registered office (or such other place or places as the Committee may from time to time determine and notify to Participants).
Benefits under the Plan shall not be pensionable.
The Company, or where the Committee so directs any Subsidiary, shall pay the appropriate stamp duty on behalf of Participants in respect of any transfer of Shares on the exercise of Awards.
These rules shall be governed by, and construed in accordance with, the laws of England.
Tax favoured part of the Plan
For any Eligible Employee to whom the Committee wishes to grant Market-Price Options under a Schedule 4 CSOP Scheme, the following provisions shall apply:
(A) Market-Price Options granted under this Appendix are granted under Schedule 4 to ITEPA.
(B) All the provisions of the Plan insofar as they apply to Market-Price Options shall apply to the grant of Market-Price Options under this Appendix and are incorporated into the rules of this Appendix subject to the modifications contained in the following paragraphs. The provisions of the Plan relating to Dividend Shares, Performance Shares and Vesting Shares, shall not apply to this Appendix.
(C) In the event of any conflict between the rules of the Plan and this Appendix, the rules of this Appendix shall prevail for Market-Price Options granted under Schedule 4 to ITEPA.
(D) The definition of Award Certificate shall be construed so that the details contained in the certificate shall state the Date of Grant of the Market-Price Option, the number and class of Shares over which the Market-Price Option is granted, the applicable Option Exercise Price, the times at which the Market-Price Option may be exercised (in whole or in part), the circumstances under which the Market-Price Option will lapse or be cancelled (in whole or in part), including any performance conditions, to which the exercise of the Market-Price Option is subject (in whole or in part), whether or not the Shares over which the Market-Price Option is granted may be subject to a Restriction and, if so, the details of any such Restriction, and any mechanism (applied fairly and reasonably) under which the Option Exercise Price or number of Shares under Market-Price Option may be varied under the terms of this Appendix;
(E) The definition of Eligible Employee shall be construed so that:
(i) no Market-Price Option may be granted under this Appendix to a director of any member of the Group unless such director is required to devote not less than 25 hours per week to the affairs of the Group; and
(ii) no Market-Price Option may be granted under this Appendix to an Eligible Employee who is ineligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.
(F) The definition of Market Value shall be amended so that the words "or otherwise as determined by the Committee" are removed and replaced with the following:
"or where such Shares are no longer listed on a recognised stock exchange, the meaning given to that term by paragraph 36 of Schedule 4 to ITEPA, in each case determining (if so required for the purposes of any relevant provision in Schedule 4 to ITEPA) the Market Value of a Share that is subject to any Restriction as if it were not subject to the Restriction"
(G) The definition of Option Vesting Date shall be construed so that the date on which a Market-Price Option normally becomes exercisable shall be no earlier than the third anniversary of the Date of Grant save where rule 8.2 applies.
(H) The definition of Retirement shall be removed and "Retirement" in Rule 8.2(b) shall be a non-defined concept of retirement.
(I) The definition of Shares shall be replaced with the following:
"Shares means fully paid ordinary shares in the capital of the Company which satisfies the conditions specified in paragraphs 16 to 20 (inclusive) of Schedule 4 to ITEPA;"
(IA) The below listed definitions shall be inserted in rule 1.1 as follows:
"Non-UK Company Reorganisation Arrangement has the meaning given to that term by paragraph 35ZA of Schedule 4 to ITEPA;
Restriction has the meaning given to that term by paragraph 36(3) of Schedule 4 to ITEPA;
Schedule 4 CSOP Scheme has the meaning given to that term by paragraph 1 of Schedule 4 to ITEPA;"
(J) Rule 2.3 shall not apply to a Market-Price Option granted under this Appendix.
(L) Rule 4.2(b) shall be amended so as to remove the following:
"(or such other value as the Committee considers appropriate based on the application of economic models for the valuation of share options)."
(M) A new rule 4.5 shall be inserted as follows:
"4.7 Notwithstanding any other provision of these rules, no Eligible Employee shall be granted a Market-Price Option which would, at the proposed Date of Grant, cause the aggregate of the market values (determined at their date of grant (in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992)) of subsisting Market-Price Options held by him pursuant to a grant under this Appendix and subsisting options held by him under any Associated Plan, to exceed £30,000 (or such other amount as shall be specified under paragraph 6 of Schedule 4 of ITEPA from time to time)."
For the purposes of this paragraph (E) Associated Plan means any Schedule 4 CSOP Scheme (other than the Plan) established by the Company or an associated company of the Company within the meaning of section 416 of the Income and Corporation Taxes Act.
(N) Any performance condition imposed under rules 7.1 or 7.2 must be objective and comply with the terms of Schedule 4 to ITEPA.
(O) Rules 7.7 to 7.9 shall not apply to this Appendix.
(P) A new Rule 7.9A shall be inserted as follows:
"7.9A A Market-Price Option granted under this Appendix may be granted subject to such conditions of exercise for payment of income tax, employees' national insurance contributions and employer's national insurance contributions liability as the Committee may at the grant date determine (including the right to sell on the Participant's behalf sufficient Shares to satisfy any liability to taxation or employee national insurance contributions or employer national insurance contributions) and if any condition is imposed relating to the assumption, payment or reimbursement by the Participant of employer's national insurance contributions liability, such conditions shall comply with any applicable legislation or regulations and the Committee shall be entitled to waive in whole or in part the Participant's obligation in respect of such liability. Such conditions shall only apply in the event that the Participant fails to make satisfactory arrangements (as determined by the Committee acting fairly and reasonably) to provide payment in respect of the income tax, employees' national insurance contributions and employer's national insurance contributions liability on exercise of the Market-Price Option."
(Q) Any Market-Price Option granted under this Appendix may only be exercised by a Participant who is not ineligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.
(R) Rule 9.1 shall not apply to this Appendix. Instead a new rule 9.1A shall be inserted as follows:
"9.1A If a Participant dies at any time when any Market-Price Option granted to him is outstanding, the Market-Price Option will be and remain capable of exercise in full for a period of one year following the date of death (and shall then lapse)."
(RA) With regards to a Market-Price Option granted on or after 6 April 2014 under this Appendix, Rule 9.2 shall not apply to this Appendix. Instead a new rule 9.1B shall be inserted as follows:
"9.1B A Market-Price Option shall not lapse prior to the expiry of the 12 month period by virtue of Rules 7.5 and 10."
(S) Rules 10.1, 10.2 and 10.3 shall not apply to a Market-Price Option granted under this Appendix. Instead new rules 10.1A, 10.2A, 10.3A, 10.3B and 10.3C shall be inserted as follows:
"General Offer
10.1A If any person (either alone or together with any person acting in concert with him) (i) makes a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that, if it is met, the person making the offer will have Control of the Company; or all the shares in the Company which are of the same class as those acquired by the exercise of a Market-Price Option; or (ii) is bound or entitled to acquire shares in the Company under sections 979 to 982 of the Companies Act 2006 (or would be so entitled but for the fact that there were no dissenting shareholders), then the following provisions shall apply:
(a) subject to the provisions of rule 10.7, any Market-Price Option which is subject to a performance condition (whether or not it is already exercisable at the date on which the offer becomes unconditional in all respects) may be exercised at any time within the period in rule 10.2A (and will then lapse); and
(b) any Market-Price Option which has satisfied its performance condition (or is not subject to a performance condition) may be exercised at any time within the period in rule 10.2A (and will then lapse).
10.2A Following a change of Control pursuant to rule 10.1A any Market-Price Option which has not been exercised (including non-exercise by reason of performance conditions not being met) shall (unless validly exchanged under rule10.7A) lapse on the earlier of the following dates:
(a) six months from the date on which the offer becomes unconditional in all respects; and
(b) one month after the date on which any person becomes bound or entitled to give a notice under sections 979 to 982 of the Companies Act 2006 to acquire any Shares.
Scheme of Compromise or Arrangement
10.3A If under Part 26 or 26A of the Companies Act 2006 a court sanctions a compromise or arrangement applicable to or affecting (i) all the ordinary share capital of the Company or all the shares of the same class as the shares to which the Market-Price Options relate; or (ii) all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP Scheme, then (unless rule 10.4 applies) the following shall apply:
(a) any Market-Price Option (whether or not it is already exercisable) may be exercised within six months of the date the compromise or arrangement is sanctioned by the court (the Relevant Date); and any Market-Price Option not exercised within 6 months of the Relevant Date shall, unless validly exchanged under rule 10.7A, lapse at the end of the 6 month period.
(b) Any Market-Price Option which is subject to a performance condition may only be exercised subject to the provisions of rule 10.7.
(c) Where new Shares would be issued on exercise of a Market-Price Option, the Committee shall endeavour to procure that, provided a Participant has conditionally exercised his or her Market-Price Option as described above prior to twelve noon on the Relevant Date, the compromise or arrangement shall be extended to such Participant as if each Share in respect of which the Market-Price Option was conditionally exercised had been allotted and issued to him or her by that time.
10.3B If any person obtains Control of the Company as a result of a Non-UK Company Reorganisation Arrangement applicable to or affecting (i) all the ordinary share capital of the Company or all the shares of the same class as the shares to which the Market-Price Options relate; or (ii) all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP Scheme, then (unless rule 10.4 applies) the following shall apply:
(a) any Market-Price Option (whether or not it is already exercisable) may be exercised within six months following the date the change of Control of the Company becomes binding on the shareholders covered by it (the Relevant Event); and any Market-Price Option not exercised within 6 months of the Relevant Event shall, unless validly exchanged under rule 10.7A, lapse at the end of the 6 month period; and
(b) any Market-Price Option which is subject to a performance condition may only be exercised subject to the provisions of rule 10.7.
10.3C Notwithstanding any provision to the contrary, where this Rule 10 applies or is expected to apply, and in consequence of an event mentioned in rule 10.1A, 10.3A or 10.3B (each an Event), the Shares that may be acquired on the exercise of a Market-Price Option no longer meet, or are not expected to meet, the requirements of paragraphs 16 to 18 (inclusive) and 20 of Part 4 of Schedule 4, the Committee may determine that Market-Price Options may be exercised within a period of 20 days ending on the Event (conditional upon and with effect from that Event occurring) or a period of 20 days after the Event. Any outstanding Market-Price Options granted after 6 April 2014 that are not so exercised within the 20 day period after the Event shall lapse automatically on the expiration of that period. Any outstanding Market-Price Options granted before 6 April 2014 that are not so exercised within the 20 day period after the Event shall lapse as provided for in rule 10.2A, 10.3A or 10.3B (as appropriate). The Committee shall act fairly and reasonably in exercising its discretion under this rule."
(T) References to the Committee's "absolute discretion" in rule 10.7 shall instead refer to its "discretion, acting fairly and reasonably".
(U) A new Rule 10.6A shall be inserted as follows:
"10.6A For the avoidance of doubt, where rule 10.7 applies, the maximum number of Shares for which Market-Price Options may be exercised where the Committee determines that the performance conditions have been met in full, is the number of Shares that were granted under the Market-Price Option at the Date of Grant."
(V) Rule 10.8 shall not apply to a Market-Price Option granted under this Appendix. Instead a new rule 10.7A shall be inserted as follows:
"10.7A If any company (the acquiring company):
(a) obtains Control of the Company as a result of making:
(i) a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the acquiring company will have Control of the Company; or
(ii) a general offer to acquire all the Shares; or
(b) obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the Court under Part 26 or 26A of the Companies Act 2006;
(c) becomes bound or entitled to give a notice under sections 979 to 982 of the Companies Act 2006 to acquire any Shares (or would be so entitled but for the fact that there were no dissenting shareholders); or
(d) obtains Control of the Company as a result of a Non-UK Company Reorganisation Arrangement which has become binding on the shareholders covered by it,
in each case, not including any Shares already held by the acquiring company or a person connected with that acquiring company, each Participant may at any time within the appropriate period (which expression shall be construed in accordance with paragraph 26(3) of Schedule 4 to ITEPA), by agreement with the acquiring company, release any Market-Price Option which has not lapsed (the old option) in consideration of the grant to him of an option (the new option) which (in accordance with rule 10.7B below) is equivalent to the old option but relates to shares in a different company (whether the acquiring company itself or another company falling within paragraph 16(b) or (c) of Schedule 4) (the new grantor).
10.7B The new option shall not be regarded for the purposes of rule 10.7A as equivalent to the old option unless the conditions set out in paragraphs 16 to 20 and paragraph 27(4) of Schedule 4 to ITEPA are satisfied and, in relation to the new option, the provisions of the Scheme shall be construed as if:
(a) the new option were an option granted under the Scheme at the same time as the old option;
(b) references to the Company in rules 8 to 17 and 20 and in the definition of Group were references to the new grantor;
(c) references to the Committee in rules 8 to 17 and 20 were references to the remuneration committee of the new grantor;
(d) references to Shares were references to shares in the new grantor; and
(e) any performance condition imposed under rule 7.2 has been satisfied."
(W) In construing rule 11.1(i) for the purposes of this Appendix the words "or reserves" shall be deleted therefrom.
(X) Rule 11.1(a) shall be amended so as to replace the words "in such manner as the Committee shall determine in its absolute discretion" with the following:
"as far as necessary to take account of the variation and no adjustment shall take effect unless the total Market Value of the Shares under the Market-Price Option is immediately after the adjustment or adjustments substantially the same as what it was immediately before the adjustment or adjustments and the aggregate Option Exercise Price of such Market-Price Option is immediately after the adjustment or adjustments substantially the same as what it was immediately before the adjustment or adjustments. No adjustment shall be made if it would result in the requirements of Schedule 4 to ITEPA not being met in relation to any Market-Price Option."
(Y) Rule 11.1(ii) shall not apply to a Market-Price Option granted under this Appendix.
(YA) Rule 13.2(b) shall not apply to a Market-Price Option granted under this Appendix.
(Z) In addition to its powers under rule 19.1, the Committee may make such amendments to this Appendix as are necessary or desirable to obtain or maintain the status of this Appendix as a Schedule 4 CSOP Scheme.
(AA) For as long as this Appendix is intended to continue to be a Schedule 4 CSOP Scheme, no amendment to the rules of the Plan or this Appendix may take effect as regards this Appendix where the amendment would result in the requirements of Schedule 4 to ITEPA not being met. If it is not intended to maintain this Appendix as a Schedule 4 CSOP, the first sentence of this paragraph (AA) shall not apply. The Committee shall provide such information and make such declarations in relation to any amendment of a key feature as is required for the purpose of Schedule 4.
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