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Marks & Spencer Group PLC — AGM Information 2022
Jun 7, 2022
5232_rns_2022-06-07_651e5275-2275-4b2b-ab5e-de3b47d26b9d.pdf
AGM Information
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The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
The Marks and Spencer Group p.l.c. Share Incentive Plan
Approved by shareholders: 19 July 2000
Adopted by the Company: 26 March 2003
Approved by HMRC: 10 June 2003
Amendments approved by the Company: 14 March 2012 and 4 September 2013
Renewed by shareholders: 10 July 2012
Amendments approved by HMRC 16 July 2012
HMRC reference: A1508
As amended by deeds of amendment dated: 26 June 2012, 24 February 2014, 22 September 2017, 28 March 2022 and [●] 2022
Renewed by shareholders: [5 July] 2022
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
CONTENTS
| Rule | Page |
|---|---|
| 1. Definitions | 1 |
| 2. Purpose Of The Plan | 5 |
| 3. Eligibility Of Individuals | 5 |
| 4. Invitations | 6 |
| 5. Participation On Same Terms | 6 |
| 6. Limits And Last Date For Making Awards | 7 |
| 7. Alterations | 8 |
| 8. Miscellaneous | 9 |
| 9. General | 11 |
| 10. Maximum Annual Award | 11 |
| 11. Allocation Of Free Shares By Reference To Performance | 11 |
| 12. Performance Allowances: Method 1 | 12 |
| 13. Performance Allowances: Method 2 | 12 |
| 14. Holding Period For Free Shares | 12 |
| 15. General | 15 |
| 16. Maximum Amount Of Deductions | 15 |
| 17. Minimum Amount Of Deductions | 15 |
| 18. Notice Of Possible Effect Of Deductions On Benefit Entitlement | 15 |
| 19. Restriction Imposed On Number Of Shares Awarded | 15 |
| 20. Payment Of Deductions To The Trustees | 16 |
| 21. No Accumulation Period | 16 |
| 22. Accumulation Period | 16 |
| 23. Surplus Partnership Share Money | 17 |
| 24. Scaling Down | 17 |
| 25. Withdrawal From Partnership Share Agreement | 17 |
| 26. Repayment Of Partnership Share Money On Ceasing To Be A Schedule 2 SIP Or Termination | 17 |
| 27. Stopping And Re-Starting Deductions | 18 |
| 28. Access To Partnership Shares | 18 |
| 29. General | 19 |
| 30. General Requirements For Matching Shares | 19 |
| 31. Ratio Of Matching Shares To Partnership Shares | 19 |
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
- Holding Period For Matching Shares... 19
- General... 21
- Reinvestment Of Cash Dividends... 21
- Certain Amounts Not Reinvested To Be Carried Forward... 21
- Holding Period For Dividend Shares... 22
- General... 23
- Rights Issues... 24
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
The Marks and Spencer Group p.l.c. Share Incentive Plan
PART 1
GENERAL REQUIREMENTS
1. DEFINITIONS
1.1 In this Plan, unless the context otherwise requires:
"Accumulation Period" means in relation to Partnership Shares, a period specified by the Board not exceeding twelve months during which the Trustees accumulate Partnership Share Money before acquiring Partnership Shares or repaying it to the employee;
"Acquisition Date" means:
(a) in relation to Partnership Shares, where there is no Accumulation Period, the date set by the Trustees in relation to the Award, being a date not later than 30 days after the last date on which the Partnership Share Money to be applied in acquiring the Partnership Shares was deducted;
(b) in relation to Partnership Shares, where there is an Accumulation Period, the date set by the Trustees in relation to the Award, being a date not later than 30 days after the end of the Accumulation Period which applies in relation to the Award; and
(c) in relation to Dividend Shares, the date set by the Trustees in relation to the acquisition of such Shares, being a date not later than 30 days after the dividend is received by them;
"Associated Company" has the same meaning as in paragraph 94 of Schedule 2;
"Award" means:
(a) in relation to Free Shares and Matching Shares, the appropriation of Free Shares and Matching Shares in accordance with the Plan; and
(b) in relation to Partnership Shares, the acquisition of Partnership Shares on behalf of Qualifying Employees in accordance with the Plan;
"Award Date" means in relation to Free Shares or Matching Shares, the date on which such Shares are awarded;
"the Board" means the board of directors of the Company or a duly authorised committee of it or appointed by it or a duly authorised person;
"Capital Receipt" has the same meaning as in section 502 ITEPA 2003;
"the Company" means Marks and Spencer Group p.l.c. (registered in England and Wales No. 4256886);
"Connected Company" has the same meaning as in paragraph 18(3) of Schedule 2;
"Control" has the same meaning as in section 719 ITEPA 2003;
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
"CTA 2010" means the Corporation Tax Act 2010;
"Dealing Day" means a day on which the London Stock Exchange is open for the transaction of business;
"the Deed" means the trust instrument intended to be made following the adoption of the Plan by the Company in connection with the Plan;
"Dividend Shares" means Shares acquired on behalf of a Participant from reinvestment of dividends under Part 5 of the Plan and which are subject to the Plan;
"Forfeiture Period" means in relation to an Award of Free or Matching Shares, the period of three years (or such other period as the Board may determine when the Award is made) beginning with the Award Date;
"Free Share Agreement" means an agreement relating to Free Shares which complies with Part 5 of Schedule 2 and is entered into between a Qualifying Employee and the Company;
"Free Shares" means Shares awarded under Part 2 of the Plan which are subject to the Plan;
"HMRC" means Her Majesty’s Revenue and Customs;
"Holding Period" means:
(a) in relation to Free Shares, the period specified by the Board as mentioned in Rule 14.1;
(b) in relation to Matching Shares, the period specified by the Board as mentioned in Rule 32.1; and
(c) in relation to Dividend Shares, the period of three years from the Acquisition Date;
"Initial Market Value" means the Market Value of a Share on an Award Date;
"ITA 2007" means the Income Tax Act 2007;
"ITEPA 2003" means the Income Tax (Earnings and Pensions) Act 2003;
"ITTOIA 2005" means the Income Tax (Trading and Other Income) Act 2005;
"the London Stock Exchange" means London Stock Exchange plc or any successor to that company;
"Market Value" means on any day:
(a) if the Shares have been admitted to the Daily Official List of the London Stock Exchange, the average of the closing middle market quotations of a Share as derived from the Daily Official List of the London Stock Exchange for the 5 immediately preceding Dealing Days;
(b) if the Shares have not been admitted to the Daily Official List of the London Stock Exchange, the Market Value of a Share determined in accordance with the provisions of Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed for the purposes of the Plan with HMRC Shares and Assets Valuation on or before that day; or
2
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
(c) unless the Board determines otherwise (in which case sub-paragraph (a) or (b) above shall apply, as appropriate), in relation to Shares purchased with Partnership Share Money other than by way of subscription, the actual purchase cost of the Shares provided that all the Shares are acquired on the same date as they are awarded as Partnership Shares;
provided that, where the Shares are subject to a Restriction, their Market Value shall be determined as if they were not subject to such Restriction;
"Matching Shares" means Shares awarded under Part 4 of the Plan and which are subject to the Plan;
"NICs" means National Insurance Contributions;
"Participant" means an individual who has received under the Plan an Award of Free Shares, Matching Shares or Partnership Shares, or on whose behalf Dividend Shares have been acquired;
"Participating Company" means the Company and such of its Subsidiaries as have executed deeds of adherence to the Plan under clause 13 of the Deed;
"Partnership Shares" means Shares awarded under Part 3 of the Plan and which are subject to the Plan;
"Partnership Share Agreement" means an agreement relating to Partnership Shares (and if appropriate Matching Shares) which complies with Part 6 of Schedule 2 and is entered into between a Qualifying Employee and the Company;
"Partnership Share Money" means money deducted from a Qualifying Employee's Salary pursuant to a Partnership Share Agreement and held by the Trustees to acquire Partnership Shares or to be returned to such a person;
"PAYE" means the requirements of Pay As You Earn as prescribed by Part 11 of ITEPA 2003 or PAYE regulations under section 684 ITEPA 2003;
"Performance Allowances" means the criteria for an Award of Free Shares where:
(a) whether Shares are awarded; or
(b) the number or value of Shares awarded
is conditional on performance targets being met;
"the Plan" means the Marks and Spencer Group p.l.c. Share Incentive Plan as amended from time to time;
"Plan Shares" means:
(a) Free Shares, Matching Shares or Partnership Shares awarded to Participants;
(b) Dividend Shares acquired on behalf of Participants; and
(c) shares in relation to which paragraph 87 of Schedule 2 applies,
in each case that remain subject to the Plan;
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
"Plan Termination Notice" means a notice issued under paragraph 89 of Schedule 2;
"Qualifying Company" means
(a) a company that is a Participating Company at the end of the Qualifying Period; or
(b) a company that when the individual was employed by it was a Participating Company; or
(c) a company that when the individual was employed by it was an Associated Company of
(i) a company qualifying under paragraph (a) or (b); or
(ii) another company qualifying under paragraph 17 of Schedule 2;
"Qualifying Corporate Bond" has the same meaning as in section 117 of the Taxation of Chargeable Gains Act 1992;
"Qualifying Employee" means an employee who must be invited to participate in an Award in accordance with Rule 4.1.1 and any employee who the Company has invited in accordance with Rule 4.1.2;
"Qualifying Period" means:
(a) in the case of Free Shares, a period of 18 months ending with the date on which the Award is made or such shorter period as the Board may determine in relation to the Award;
(b) in the case of Partnership Shares and Matching Shares where there is an Accumulation Period, a period of 6 months ending with the start of the Accumulation Period or such shorter period as the Board may determine in relation to the Award; and
(c) in the case of Partnership Shares and Matching Shares where there is no Accumulation Period, a period of 18 months ending with the deduction of Partnership Share Money relating to the Award or such shorter period as the Board may determine in relation to the Award;
"Redundancy" has the same meaning as in the Employment Rights Act 1996;
"Relevant Employment" means employment by the Company or any Associated Company;
"Restriction" has the same meaning as in paragraph 99(4) of Schedule 2;
"Salary" has the same meaning as in paragraph 43(4) of Schedule 2;
"Schedule 2" means Schedule 2 to ITEPA 2003;
"Schedule 2 SIP" means a share incentive plan which meets the requirements of Parts 2 to 9 of Schedule 2;
"Shares" means ordinary shares in the capital of the Company which comply with the conditions set out in paragraphs 26 to 29 of Schedule 2;
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
"Subsidiary" means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006) of the Company and of which the Company has Control;
"Tax Year" means a year beginning on 6 April and ending on the following 5 April;
"the Trustees" means the trustees or trustee for the time being of the Deed;
"the Trust Fund" means all assets transferred to the Trustees to be held on the terms of the Deed and the assets from time to time representing such assets, including any accumulations of income;
"the Trust Period" means the period of 80 years beginning with the date of the Deed;
and expressions not otherwise defined in the Plan have the same meanings as they have in Schedule 2.
1.2 Any reference in the Plan to any enactment includes a reference to that enactment as from time to time modified, extended or re-enacted.
1.3 Words of the feminine gender shall include the masculine and vice versa and words in the singular shall include the plural and vice versa unless, in either case, the context otherwise requires or it is otherwise stated.
1.4 Expressions in italics are for guidance only and do not form part of the Plan.
2. PURPOSE OF THE PLAN
The purpose of the Plan is to enable employees of Participating Companies to acquire Shares which give them a continuing stake in the Company.
3. ELIGIBILITY OF INDIVIDUALS
3.1 General rule on eligibility
Individuals may participate in an Award only if:
3.1.1 they are employees of a Participating Company;
3.1.2 they have been employees of a Qualifying Company at all times during any Qualifying Period;
3.1.3 they are eligible on the relevant date(s) as set out in Rule 3.4; and
3.1.4 they do not fail to be eligible under either or both Rules 3.2 or 3.3.
3.2 No awards under another Schedule 2 SIP at the same time
Individuals are not eligible to participate in an Award of Free Shares, Matching Shares or Partnership Shares under the Plan in any Tax Year if they are at the same time to participate in an award of shares under another Schedule 2 SIP established by the Company or a Connected Company (or if they would have participated in an award of free shares under such a Schedule 2 SIP but for their failure to meet the relevant Performance Allowances).
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
3.3 Participation in another connected Schedule 2 SIP in same Tax Year
If an individual receives an Award of Shares or acquires Partnership Shares in any Tax Year in which they have already participated in an award of Shares under one or more other Schedule 2 SIPs established by the Company or a Connected Company, Rule 10 of Part 2 and Rule 16 of Part 3 shall apply as if the Plan and the other Schedule 2 SIP or Schedule 2 SIPs were a single plan.
3.4 Relevant dates of eligibility
The relevant dates mentioned in Rule 3.1.3 are:
3.4.1 in the case of an Award of Free Shares, the date on which the Award is made;
3.4.2 in the case of an Award of Partnership Shares or an Award of Matching Shares awarded in respect of such Partnership Shares where there is no Accumulation Period, the date on which the Partnership Share Money relating to the Award is deducted; and
3.4.3 in the case of an Award of Partnership Shares or an Award of Matching Shares awarded in respect of such Partnership Shares where there is an Accumulation Period, the date on which the Partnership Share Money relating to the Award is first deducted.
4. INVITATIONS
4.1 Employees who must and may be invited to participate in Awards
Subject to Rule 8.5 (Board to determine whether and when Awards shall be made),
4.1.1 individuals shall be invited to participate in the Plan if they meet the requirements in Rule 3.1 and are UK resident taxpayers (as defined in paragraph 8(2) of Schedule 2); and
4.1.2 the Board may also invite any other employee who meets the requirements in Rule 3.1 to participate in the Plan.
5. PARTICIPATION ON SAME TERMS
5.1 Same terms participation
Subject to Rules 5.2, 5.3, 12.1, 12.2 and 13, every Qualifying Employee who is invited to participate in the Plan shall be invited to participate on the same terms and those who do participate shall do so on the same terms.
5.2 Awards of Free Shares – remuneration, length of service or hours worked
The Company may make an Award of Free Shares to Qualifying Employees by reference to their remuneration, length of service or hours worked.
5.3 Awards of Free Shares – Performance Allowances
The Company may make an Award of Free Shares to Qualifying Employees by reference to their performance as set out in Rule 11.1.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
6. LIMITS AND LAST DATE FOR MAKING AWARDS
6.1 10 per cent. in 10 year rule
An Award shall not be made in any calendar year if, at the time of its proposed Award Date (in the case of Free Shares or Matching Shares) or proposed Acquisition Date (in the case of Partnership Shares), it would cause the number of Shares allocated (as defined in Rule 6.2) in the period of 10 calendar years ending with that calendar year under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents 10 per cent. of the ordinary share capital of the Company in issue at that time.
6.2 Meaning of “allocated”
For the purposes of Rule 6.1:
(a) Shares are allocated:
(i) when an option, award or other contractual right to acquire unissued Shares or treasury Shares is granted; and/or
(ii) where Shares are issued or treasury Shares are transferred otherwise than pursuant to an option, award or other contractual right to acquire Shares, when those Shares are issued or treasury Shares transferred;
(b) any Shares which have been issued or which may be issued (or any Shares transferred out of treasury or which may be transferred out of treasury) to any trustees to satisfy the exercise of any option, award or other contractual right granted under any relevant employee share plan shall be treated as allocated; and
(c) for the avoidance of doubt, existing Shares other than treasury Shares that are transferred or over which options, awards or other contractual rights are granted shall not count as allocated.
6.3 Post-grant events affecting numbers of “allocated” Shares
For the purposes of Rule 6.2:
(a) where:
(i) any option, award or other contractual right to acquire unissued Shares or treasury Shares is released or lapses (whether in whole or in part); or
(ii) after the grant of an option, award or other contractual right the Board determines that:
(aa) where an amount is normally payable on its exercise it shall be satisfied without such payment but instead by the issue of Shares and/or the transfer of treasury Shares and/or the payment of cash equal to the gain made on its exercise; or
(bb) it shall be satisfied wholly or partly by the transfer of existing Shares (other than Shares transferred out of treasury),
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
the unissued Shares or treasury Shares which consequently cease to be subject to the option, award or other contractual right from time to time or absolutely (as appropriate) shall not count as allocated; and
(b) the number of Shares allocated in respect of an option, award or other contractual right shall be such number as the Board shall reasonably determine from time to time.
6.4 Changes to investor guidelines
Treasury Shares shall cease to count as allocated for the purposes of Rule 6.2 if institutional investor guidelines cease to require such Shares to be so counted.
6.5 Last date on which Awards may be made
No Awards can be made prior to the date on which the Plan is approved by HMRC under Schedule 2 and no Awards shall be made after 5 July 2032.
7. ALTERATIONS
7.1 General rule on alterations
Subject to Rule 7.2, the Board may, with the Trustees' written consent, at any time alter the Plan in any respect.
If during a Tax Year an alteration is made to a “key feature” (as defined in paragraph 84(6) of Schedule 2), the return for the Tax Year must contain a declaration that the alteration to the “key feature” has not caused the requirements of Parts 2 to 9 of Schedule 2 to be met, made by such persons as HMRC may require.
7.2 Shareholder approval
Subject to Rule 7.3 below, no alteration to the advantage of the persons who participate or may participate in the Plan shall be made under Rule 7.1 above to the provisions concerning:
7.2.1 eligibility;
7.2.2 the individual limits on participation;
7.2.3 the overall limits on the issue of Shares or transfer of treasury Shares under the Plan;
7.2.4 the basis for determining a Participant’s entitlement to, and terms of, Shares provided under the Plan;
7.2.5 the adjustments that may be made following a rights issue or any other variation of capital
without the prior approval by ordinary resolution of the members of the Company in general meeting.
7.3 Exceptions to shareholder approval
Rule 7.2 shall not apply to any minor alteration to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable tax,
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
exchange control or regulatory treatment for Participants, the Company, the Trustees or any Subsidiary.
8. MISCELLANEOUS
8.1 Employment
The rights and obligations of any individual under the terms of their employment with a Qualifying Company shall not be affected by their participation in the Plan or any right which they may have to participate in it, and an individual who participates in it shall waive any and all rights to compensation or damages in consequence of the termination of their employment for any reason whatsoever (and regardless of whether such termination is lawful or unlawful) insofar as those rights arise or may arise from their ceasing to have rights under the Plan as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon any individual who participates in it. The making of an Award does not imply that any further Awards will be made or that any individual has a right to receive an Award.
8.2 Remuneration
Except where required by law, no money or money's worth received by any individual under the Plan shall form part of their remuneration for any purpose whatsoever. Benefits provided under the Plan shall not be pensionable.
8.3 Disputes
In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or related to the Plan, the decision of the Board shall be final and binding upon all persons.
8.4 Notices
Any notice or other communication under or in connection with the Plan may be given in such manner as the Board consider to be appropriate which may include communication by email, intranet, internet, portal or by personal delivery or by sending the same by post, in the case of a company to its registered office or to such other address as may from time to time be notified to an individual, and in the case of an individual to their last known address, or, where they are an employee of a Qualifying Company, either to their last known address or to the address of the place of business at which they perform the whole or substantially the whole of the duties of their employment. Where any such notice or other communication is given by a Qualifying Employee or Participant to the Company or the Trustees, it shall be effective only on receipt by the Company or, as the case may be, the Trustees.
8.5 Board to determine whether and when Awards shall be made
The Board shall determine when (if at all) Awards shall be made, the type of Awards that shall be made at that time, and, subject to the Rules of the Plan, the terms of those Awards, and nothing in these Rules shall be interpreted as conferring any obligation on the Company to make Awards on a regular basis or replicate the terms of Awards previously made under the Plan.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
8.6 Share rights
All Shares allotted under the Plan shall rank equally in all respects with shares of the same class then in issue except for any rights attaching to such Shares by reference to a record date prior to the date of the allotment.
Where the Shares to be the subject of Awards of a particular type (that is to say Free Shares, Partnership Shares or Matching Shares) on any day do not all carry the same rights, the Trustees shall so far as possible ensure that the number of Shares carrying any particular rights which are so awarded to any individual on that day bears to the number of Shares so awarded to them on that day the same proportion as the total number of Shares carrying those rights which are so awarded on that day bears to the total number of Shares so awarded on that day.
8.7 Errors and omissions
If in the consequence of an error or omission it is ascertained following an Award Date that:
8.7.1 a Qualifying Employee has not been given the opportunity to participate in the Plan in respect of any type of Award to which they should have been entitled under the Plan; or
8.7.2 the number of Shares expressed to be awarded to any Qualifying Employee on any occasion is found to be incorrect
any Award expressed to have been made in respect of more than the correct number of Shares shall be void as to the excess, any Award expressed to have been made in respect of fewer than the correct number of Shares shall relate to the correct number of Shares if the Trustees hold unallocated Shares that could otherwise have been used to make that Award and the Company and the Trustees may do all acts and things as they consider necessary to rectify such error or omission notwithstanding that such actions may not otherwise be in accordance with the Rules of the Plan.
8.8 Third parties
No third party has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan except where these rights arise under any rule of the Plan for any employer or former employer of a Participant that is not a party to an Award.
8.9 Data protection
For the purposes of operating the Plan, the Company's Colleague Privacy Policy ("Privacy Policy") will inform the Participant how their personal data is processed and shall comply with the UK Data Protection Regulation including Articles 12 and 13. The relevant basis/bases for processing such data is/are set out in the Privacy Policy.
8.10 Governing law and jurisdiction
The Plan and all Awards shall be governed by and construed in accordance with the law of England and Wales and the parties hereto agree to submit to the exclusive jurisdiction of the Courts of England and Wales.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
PART 2
FREE SHARES
9. GENERAL
9.1 Every Qualifying Employee shall be invited to enter into a Free Share Agreement (which may include by means of an opt out process).
9.2 The Trustees, acting with the prior consent of the Board, may from time to time award Free Shares.
9.3 The number of Free Shares to be awarded to each Qualifying Employee on an Award Date shall be determined by the Board in accordance with this Part 2.
10. MAXIMUM ANNUAL AWARD
10.1 The Initial Market Value of Free Shares awarded to a Qualifying Employee in any Tax Year shall not exceed £3,600 or such other limit as may be permitted by paragraph 35 of Schedule 2 from time to time.
11. ALLOCATION OF FREE SHARES BY REFERENCE TO PERFORMANCE
11.1 The Board may stipulate that the number of Free Shares (if any) to be awarded to each Qualifying Employee on a given Award Date shall be determined by reference to Performance Allowances.
11.2 If Performance Allowances are used, they shall apply to all Qualifying Employees.
11.3 Where Performance Allowances are used:
11.3.1 they shall be determined by reference to such fair and objective criteria (performance targets) relating to business results or such other objective criteria as the Board shall determine over such period as the Board shall specify; and
11.3.2 performance targets shall be set for performance units of one or more employees (provided that an employee shall not be a member of more than one performance unit).
11.4 Where the Board decides to use Performance Allowances it shall, as soon as reasonably practicable:
11.4.1 notify each employee participating in the Award of the performance targets and measures which, under the Plan, shall be used to determine the number or value of Free Shares awarded to them; and
11.4.2 notify all Qualifying Employees of any Participating Company, in general terms, of the performance targets and measures to be used to determine the number or value of Free Shares to be awarded to each Participant in the Award,
provided that the Board may exclude from such notice any information as mentioned in Rule 11.4.2 the disclosure of which the Board reasonably considers would prejudice commercial confidentiality.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
11.5 The Board shall determine the number of Free Shares (if any) to be awarded to each Qualifying Employee by reference to performance using Method 1 (Rule 12) or Method 2 (Rule 13). The same method shall be used for all Qualifying Employees for each Award.
12. PERFORMANCE ALLOWANCES: METHOD 1
12.1 Subject to Rule 12.2 by this method:
12.1.1 at least 20% of Free Shares awarded in any performance period shall be awarded without reference to performance;
12.1.2 the remaining Free Shares shall be awarded by reference to performance; and
12.1.3 the highest Award made to an individual by reference to performance in any period shall be no more than four times the highest Award to an individual without reference to performance.
12.2 If this method is used:
12.2.1 the Free Shares awarded without reference to performance (Rule 12.1.1) shall be awarded on the same terms as mentioned in Rule 5; and
12.2.2 the Free Shares awarded by reference to performance (Rule 12.1.2) need not be allocated on the same terms as mentioned in Rule 5.
13. PERFORMANCE ALLOWANCES: METHOD 2
13.1 By this method:
13.1.1 some or all Free Shares shall be awarded by reference to performance;
13.1.2 the Award of Free Shares to Qualifying Employees who are members of the same performance unit shall be made on the same terms, as mentioned in Rule 5; and
13.1.3 Free Shares awarded for each performance unit shall be treated as separate Awards and there is no requirement for Awards of Free Shares made to members of different performance units to be on the same terms.
13.2 If this method is used, the performance targets set in connection with the Award of Free Shares must be consistent targets which, at the time they are set, can reasonably be viewed as being comparable in terms of the likelihood of their being met by the performance units to which they apply.
14. HOLDING PERIOD FOR FREE SHARES
14.1 The Board shall, in relation to each Award Date, specify a Holding Period throughout which a Participant shall be bound by the terms of the Free Share Agreement.
14.2 The Holding Period shall, in relation to each Award, be a specified period of not less than three years nor more than five years (or such other periods required by paragraph 36 of Schedule 2 from time to time), beginning with the Award Date and shall be the
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
same for all Participants who receive an Award at the same time. The Holding Period shall not be increased in respect of Free Shares already awarded under the Plan.
14.3 A Participant may during the Holding Period direct the Trustees:
14.3.1 to accept an offer for any of their Free Shares if the acceptance or agreement shall result in a new holding being equated with those shares for the purposes of capital gains tax; or
14.3.2 to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Free Shares if the offer forms part of such a general offer as is mentioned in Rule 14.3.3; or
14.3.3 to accept an offer of cash, with or without other assets, for their Free Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their shares, or to holders of shares in the same company and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 CTA 2010 notwithstanding such an offer may be made to different shareholders by different means; or
14.3.4 to agree to a transaction affecting their Free Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting:
(a) all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
(b) all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a plan (including the Plan) which is a Schedule 2 SIP; or
14.3.5 to exercise any rights arising under section 983 of the Companies Act 2006 to require the offeror to acquire their Free Shares, or such of them as are of a particular class, in the event of a takeover offer (as defined in section 974 of that Act).
14.4 The Board may in its absolute discretion award Free Shares subject to forfeiture if the Participant ceases to be in Relevant Employment at any time in the Forfeiture Period, provided that any provision for forfeiture shall apply equally to all Free Shares included in the same Award under the Plan but shall not apply if the Participant ceases Relevant Employment:
(a) because of injury or disability;
(b) on being dismissed by reason of Redundancy;
(c) by reason of a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply;
(d) by reason of a change in control or other circumstances ending the Associated Company status of the company by which they are employed;
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(e) by reason of retirement; or
(f) on their death.
14.5 Any Free Shares forfeited in accordance with Rule 14.4 shall be held by the Trustees subject to the Plan and, subject to Clause 1.6 of the Trust Deed, be available for future awards of Free Shares or Matching Shares for other eligible individuals.
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PART 3
PARTNERSHIP SHARES
15. GENERAL
15.1 The Board may at any time invite every Qualifying Employee to enter into a Partnership Share Agreement.
15.2 Partnership Shares shall not be subject to any provision under which they may be forfeited.
16. MAXIMUM AMOUNT OF DEDUCTIONS
16.1 The amount of Partnership Share Money deducted from a Participant's Salary shall not exceed £1,800 in any Tax Year (or such other maximum amount as may for the time being be permitted by paragraph 46(1) of Schedule 2).
16.2 The amount of Partnership Share Money deducted from a Participant's Salary for any Tax Year shall not exceed 10% (or such other maximum amount as may for the time being be permitted by paragraph 46 of Schedule 2) of the total of the payments of Salary made to the Participant for that Tax Year.
16.3 The Board may specify lower limits than those specified in Rule 16.1 and/or Rule 16.2.
16.4 A lower limit set by the Board in respect of the limit in Rule 16.2 may be framed:
(a) by substituting a lower percentage than that specified in Rule 16.2; or
(b) by specifying that a particular description of earnings is not be regarded as forming part of the Qualifying Employee’s Salary for the purposes of the limit.
16.5 Any amount deducted in excess of that allowed by Rule 16.1 or 16.2 shall be paid over to the relevant Participant, subject to both deduction of income tax under PAYE and NICs, as soon as practicable.
17. MINIMUM AMOUNT OF DEDUCTIONS
17.1 The minimum amount to be deducted under the Partnership Share Agreement on any occasion shall be the same in relation to all Partnership Share Agreements entered into in response to invitations issued on the same occasion. It shall not be greater than £10 (or such other minimum amount as may for the time being be permitted by paragraph 47(2) of Schedule 2).
18. NOTICE OF POSSIBLE EFFECT OF DEDUCTIONS ON BENEFIT ENTITLEMENT
18.1 Every Partnership Share Agreement shall contain a notice under paragraph 48 of Schedule 2.
19. RESTRICTION IMPOSED ON NUMBER OF SHARES AWARDED
19.1 Subject to Rules 16.1 and 16.2, the Board may specify the maximum number of Shares to be included in, or the maximum amount of individual deductions relating to, an Award of Partnership Shares.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
19.2 The Partnership Share Agreement shall contain an undertaking by the Company to notify each Qualifying Employee of any restriction on the number of Shares or the maximum amount of individual deductions to be included in an Award.
19.3 The notification in Rule 19.2 shall be given:
19.3.1 if there is no Accumulation Period, before the deduction of the Partnership Share Money relating to the Award; and
19.3.2 if there is an Accumulation Period, before the beginning of the Accumulation Period relating to the Award.
- PAYMENT OF DEDUCTIONS TO THE TRUSTEES
20.1 The Participating Companies shall, as soon as practicable after deduction from Salary, pass the Partnership Share Money to the Trustees.
- NO ACCUMULATION PERIOD
21.1 If there is no Accumulation Period, the Trustees shall apply Partnership Share Money to acquire Shares on behalf of the Qualifying Employee on the Acquisition Date. The number of Shares awarded to each Qualifying Employee shall be determined in accordance with the Market Value of the Shares on that date.
- ACCUMULATION PERIOD
22.1 If there is an Accumulation Period, the Trustees shall apply the Partnership Share Money to acquire Shares on behalf of the Qualifying Employee on the Acquisition Date.
22.2 The number of Shares acquired on behalf of each Qualifying Employee shall in respect of Partnership Share Agreements entered into before 17 July 2013 be determined by reference to the lower of:
22.2.1 the Market Value of the Shares at the beginning of the Accumulation Period; and
22.2.2 the Market Value of the Shares on the Acquisition Date,
and in respect of Partnership Share Agreements entered into on or after 17 July 2013, shall be determined by reference to whichever of the following is specified in the Partnership Share Agreement:
22.2.3 the Market Value of the Shares at the beginning of the Accumulation Period,
22.2.4 the Market Value of the Shares on the Acquisition Date; or
22.2.5 the lower of the Market Values of the Shares set out in Rules 22.2.3 and 22.2.4.
22.3 If a transaction occurs during an Accumulation Period which results in a new holding of shares being equated for the purposes of capital gains tax with any of the Shares to be acquired under the Partnership Share Agreement, the Participant may agree that the Partnership Share Agreement shall have effect after the time of that transaction as if it were an agreement for the purchase of shares comprised in the new holding.
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23. SURPLUS PARTNERSHIP SHARE MONEY
23.1 Any surplus Partnership Share Money remaining after the acquisition of Shares by the Trustees:
23.1.1 may, with the agreement of the Participant, be carried forward to the next deduction (where there is no Accumulation Period) or to the next Accumulation Period (where there is an Accumulation Period); and
23.1.2 in any other case, shall be paid over to the Participant, subject to both deduction of income tax under PAYE and NICs, as soon as practicable.
24. SCALING DOWN
24.1 If the Company receives applications for Partnership Shares exceeding the Award maximum determined in accordance with Rule 19.1 then the following steps shall be taken in sequence until the excess is eliminated.
Step 1. the excess of the monthly deduction chosen by each applicant over the amount specified in accordance with Rule 17.1 shall be reduced pro rata;
Step 2. all monthly deductions shall be reduced to the amount specified in accordance with Rule 17.1;
Step 3. no such Awards shall be made for that period.
Each application shall be deemed to have been modified or withdrawn in accordance with the foregoing provisions, and each employee who has applied for Partnership Shares shall be notified of the change.
25. WITHDRAWAL FROM PARTNERSHIP SHARE AGREEMENT
25.1 A Participant may withdraw from a Partnership Share Agreement at any time by notice in writing to the Company. Unless a later date is specified in the notice, such a notice shall take effect 30 days after the Company receives it. Any Partnership Share Money then held on behalf of a Participant shall be paid over to that Participant as soon as practicable, subject to deduction of income tax under PAYE and NICs.
26. REPAYMENT OF PARTNERSHIP SHARE MONEY ON CEASING TO BE A SCHEDULE 2 SIP OR TERMINATION
26.1 If the Plan ceases to be a Schedule 2 SIP by virtue of paragraphs 81H or 81I of Schedule 2, any Partnership Share Money held on behalf of Participants shall be repaid to them as soon as practicable after the relevant day (as defined in paragraph 56 of the Schedule), subject to deduction of income tax under PAYE and NICs.
26.2 If a Plan Termination Notice is issued in respect of the Plan, any Partnership Share Money held on behalf of Participants shall be repaid to them as soon as practicable after the Plan Termination Notice is notified to the Trustees, subject to deduction of income tax under PAYE and NICs.
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27. STOPPING AND RE-STARTING DEDUCTIONS
27.1 A Participant may at any time give notice to the Company to stop deductions under the Partnership Share Agreement. A Participant may vary their deductions under the Partnership Share Agreement with the agreement of the Company. Unless a later date is specified in the notice the Company will ensure within 30 days of receiving the notice that either no such further deductions are made by it or that such variation of deductions shall take effect.
27.2 A Participant who has stopped deductions may subsequently give notice in writing to the Company to restart deductions under the Partnership Share Agreement but the employee may not make up any deductions that have been missed. A Participant may not restart deductions more than such number of times in any Accumulation Period as the Board shall determine before the beginning of that period. On receipt of a restart notice the Company will ensure that deductions are restarted under the Partnership Share Agreement not later than the re-start date within the meaning of paragraph 54(6) of the Schedule (the date of the first deduction due under the Partnership Share Agreement more than 30 days after receipt of the notice to restart deductions).
28. ACCESS TO PARTNERSHIP SHARES
28.1 When Partnership Shares have been awarded to a Participant, the Participant may at any time withdraw any or all of the Partnership Shares from the Plan subject to the deduction of income tax under PAYE and NICs.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
PART 4
MATCHING SHARES
29. GENERAL
29.1 The Partnership Share Agreement sets out the basis on which a Participant is entitled to Matching Shares in accordance with this Part 4 of the Plan.
30. GENERAL REQUIREMENTS FOR MATCHING SHARES
30.1 Matching Shares shall:
30.1.1 be Shares of the same class and carrying the same rights as the Partnership Shares to which they relate;
30.1.2 subject to Rule 31.1, be awarded on the same day as the Partnership Shares to which they relate are acquired on behalf of the Participant; and
30.1.3 be awarded to all Participants on exactly the same basis.
31. RATIO OF MATCHING SHARES TO PARTNERSHIP SHARES
31.1 The Partnership Share Agreement shall specify the ratio of Matching Shares to Partnership Shares for the time being offered by the Company and that ratio shall not exceed 2:1 (or such other ratio as may for the time being be permitted by paragraph 60 of Schedule 2). The Board may vary the ratio before Partnership Shares are acquired. Employees shall be notified of the terms of any such variation before the Partnership Shares are awarded under the Partnership Share Agreement.
31.2 If the calculation of the number of Matching Shares to be awarded to a Participant on the date of an Award of Partnership Shares gives a number that it not a whole number of Matching Shares, only the maximum whole number that is less than the number calculated shall be awarded as Matching Shares and the entitlement to less than one Matching Share shall be carried forward and added to the entitlement to Matching Shares in the next (and, if necessary, any subsequent) dates of Awards of Partnership Shares.
32. HOLDING PERIOD FOR MATCHING SHARES
32.1 The Board shall, in relation to each Award Date, specify a Holding Period throughout which a Participant shall be bound by the terms of the Partnership Share Agreement.
32.2 The Holding Period shall, in relation to each Award, be a specified period of not less than three years nor more than five years (or such other periods required by paragraph 61 of Schedule 2 from time to time), beginning with the Award Date and shall be the same for all Participants who receive an Award at the same time. The Holding Period shall not be increased in respect of Matching Shares awarded under the Plan.
32.3 A Participant may during the Holding Period direct the Trustees:
32.3.1 to accept an offer for any of their Matching Shares if the acceptance or agreement shall result in a new holding being equated with those original Shares for the purposes of capital gains tax; or
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
32.3.2 to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Matching Shares if the offer forms part of such a general offer as is mentioned in Rule 32.3.3; or
32.3.3 to accept an offer of cash, with or without other assets, for their Matching Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their Shares or to the holders of shares in the same company, and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 CTA 2010 notwithstanding such an offer may be made to different shareholders by different means; or
32.3.4 to agree to a transaction affecting their Matching Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting;
(a) all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
(b) all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a Schedule 2 SIP; or
32.3.5 to exercise any rights arising under section 983 of the Companies Act 2006 to require the offeror to acquire their Matching Shares, or such of them as are of a particular class, in the event of a takeover offer (as defined in section 974 of that Act).
32.4 The Board may in its absolute discretion award Matching Shares subject to forfeiture if the Participant withdraws the Partnership Shares in respect of which the Matching Shares were awarded from the Plan (other than following, and by reason of, an event referred to in Rule 32.3) or the Participant ceases to be in Relevant Employment at any time in the Forfeiture Period, provided that any provision for forfeiture shall apply equally to all Matching Shares included in the same Award under the Plan and shall not apply if the Participant ceases Relevant Employment:
(a) because of injury or disability;
(b) on being dismissed by reason of Redundancy;
(c) by reason of a transfer to which the Transfer of Undertaking (Prohibition of Employment) Regulations 2006 apply;
(d) by reason of a change in control or other circumstances ending the Associated Company status of the company by which they are employed;
(e) by reason of retirement; or
(f) on their death.
32.5 Any Matching Shares forfeited in accordance with Rule 32.4 shall be held by the Trustees subject to the Plan and, subject to Clause 1.6 of the Trust Deed, be available for future awards of Free Shares or Matching Shares for other eligible individuals.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
PART 5
DIVIDEND SHARES
33. GENERAL
33.1 The Free Share Agreement or Partnership Share Agreement, as appropriate, shall set out the rights and obligations of Participants receiving Dividend Shares under the Plan.
34. REINVESTMENT OF CASH DIVIDENDS
34.1 The Board may direct that some or all of the cash dividend in respect of Plan Shares held on behalf of Participants may be applied in acquiring further Plan Shares on their behalf. Any such direction of the Board shall set out (a) the amount of the cash dividends to be applied in the acquisition of Dividend Shares or (b) how that amount is to be determined.
34.2 Dividend Shares shall be Shares:
34.2.1 of the same class and carrying the same rights as the Shares in respect of which the dividend is paid; and
34.2.2 which are not subject to any provision for forfeiture.
34.3 The Board may determine that the Trustees shall:
34.3.1 apply some or all Participants' dividends to acquire Dividend Shares;
34.3.2 to pay all or some dividends in cash to all Participants; or
34.3.3 to offer Participants the choice of either 34.3.1 or 34.3.2.
34.4 The Board may modify or revoke any direction for reinvestment of cash dividends.
34.5 In exercising their powers in relation to the acquisition of Dividend Shares the Trustees must treat Participants fairly and equally.
34.6 The Trustees shall apply any cash dividend to acquire Shares on behalf of the Participant on the Acquisition Date. The number of Dividend Shares acquired on behalf of each Participant shall be determined by the Market Value of the Shares on the Acquisition Date.
34.7 Any cash dividends which are not directed by the Board to be reinvested under the Plan in respect of Plan Shares held on behalf of a Participant must be paid over to a Participant as soon as practicable.
35. CERTAIN AMOUNTS NOT REINVESTED TO BE CARRIED FORWARD
35.1 Any amount that is not reinvested because it is insufficient to acquire a Share may be retained by the Trustees and carried forward to be added to the amount of the next cash dividend to be reinvested.
35.2 If:
35.2.1 a Participant ceases to be in Relevant Employment; or
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
35.2.2 a Plan Termination Notice is issued,
the amount referred to in Rule 35.1 shall be repaid to the Participant as soon as practicable.
36. HOLDING PERIOD FOR DIVIDEND SHARES
36.1 The Holding Period shall be a period of three years, beginning with the Acquisition Date.
36.2 A Participant may during the Holding Period direct the Trustees:
36.2.1 to accept an offer for any of their Dividend Shares if the acceptance or agreement shall result in a new holding being equated with those shares for the purposes of capital gains tax; or
36.2.2 to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Dividend Shares if the offer forms part of such a general offer as is mentioned in paragraph 36.2.3; or
36.2.3 to accept an offer of cash, with our without other assets, for their Dividend Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their shares or to holders of shares in the same company, and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 CTA 2010 notwithstanding such an offer may be made to different shareholders by different means; or
36.2.4 to agree to a transaction affecting their Dividend Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting;
(a) all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
(b) all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a Schedule 2 SIP (including the Plan); or
36.2.5 to exercise any rights arising under section 983 of the Companies Act 2006 to require the offeror to acquire their Dividend Shares, or such of them as are of a particular class, in the event of a takeover offer (as defined in section 974 of that Act).
36.3 Where a Participant is charged to tax in the event of their Dividend Shares ceasing to be subject to the Plan, they shall be provided with the information specified in paragraph 80(4) of Schedule 2.
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PART 6
COMPANY RECONSTRUCTIONS
37. GENERAL
37.1 The following provisions of this Rule 37 apply if there occurs in relation to any of a Participant's Plan Shares (referred to in this Rule 37 as "the Original Holding"):
37.1.1 a transaction which results in a new holding (referred to in this Rule 37 as "the New Holding") being equated with the Original Holding for the purposes of capital gains tax; or
37.1.2 a transaction which would have that result but for the fact that what would be the new holding consists of or includes a Qualifying Corporate Bond.
37.2 If an issue of Shares of any of the following description (in respect of which a charge to income tax arises) is made as part of a company reconstruction, those Shares shall be treated for the purposes of this Rule as not forming part of the New Holding:
37.2.1 redeemable shares or securities issued as mentioned in section 1000(1)C or D of CTA 2010;
37.2.2 share capital issued in circumstances such that section 1022(3) CTA 2010 applies; or
37.2.3 share capital to which section 410 ITTOIA 2005 applies.
37.3 In this Rule 37:
"Corresponding Shares" in relation to any New Shares, means the Shares in respect of which the New Shares are issued or which the New Shares otherwise represent;
"New Shares" means shares comprised in the New Holding which were issued in respect of, or otherwise represent, shares comprised in the Original Holding.
37.4 Subject to the following provisions of this Rule 37, references in the Plan to a Participant's Plan Shares shall be respectively construed, after the time of the company reconstruction, as being or, as the case may be, as including references to any New Shares.
37.5 For the purposes of the Plan:
37.5.1 a company reconstruction shall be treated as not involving a disposal of Shares comprised in the Original Holding; and
37.5.2 the date on which any New Shares are to be treated as having been appropriated to or acquired on behalf of the Participant shall be that on which Corresponding Shares were so appropriated or acquired.
37.6 In the context of a New Holding, any reference in this Rule 37 to shares includes securities and rights of any description which form part of the New Holding for the purposes of Chapter II of Part IV of the Taxation of Chargeable Gains Act 1992.
The Marks and Spencer Group p.l.c. Share Incentive Plan rules – AGM version
38. RIGHTS ISSUES
38.1 Any shares or securities allotted under clause 9 of the Deed shall be treated as Plan Shares identical to the shares in respect of which the rights were conferred. They shall be treated as if they were awarded to or acquired on behalf of the Participant under the Plan in the same way and at the same time as those shares.
38.2 Rule 38.1 does not apply:
38.2.1 to shares and securities allotted as the result of taking up a rights issue where the funds to exercise those rights were obtained otherwise than by virtue of the Trustees disposing of rights in accordance with this rule; or
38.2.2 where the rights to a share issue attributed to Plan Shares are different from the rights attributed to other ordinary shares of the company.