Remuneration Information • Apr 5, 2024
Remuneration Information
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Morgan Advanced Materials plc
Shareholder approval: 9 May 2024 Directors' adoption: 9 May 2024 Expiry date: 9 May 2034
Certified to HMRC on [certification date] 2025
SLAUGHTER AND MAY One Bunhill Row London EC1Y 8YY
Ref: POM/IAB
583857587
| 1 | Definitions and purpose 1 | |
|---|---|---|
| 2 | Invitations to apply for Options 6 | |
| 3 | Scaling down 9 | |
| 4 | Grant of Options 9 | |
| 5 | Limit 10 | |
| 6 | Exercise and lapse of Options 12 | |
| 7 | Terms of exercise of Options 14 | |
| 8 | Adjustment of Options 15 | |
| 9 | Takeovers and corporate events 16 | |
| 10 | Exchange of Options 18 | |
| 11 | Terms of employment 19 | |
| 12 | General 20 | |
| 13 | Amending the Plan 22 | |
| 14 | Governing law and jurisdiction 23 |
The purpose of the Morgan Advanced Materials Sharesave Plan 2024 is to provide, in accordance with Schedule 3, benefits for employees and directors in the form of Options over Shares in the Company if they save for a period of three or five years under a Savings Contract. The Plan may not provide benefits to employees or directors otherwise than in accordance with Schedule 3.
The Exercise Price may be set at up to 20% below the Market Value of the Shares subject to the Option. Options are normally exercisable after three or five years (depending upon the length of the Savings Contract) but special rules apply on a Participant's cessation of employment and if there is a Corporate Event.
The Plan is intended to be registered with HMRC under Schedule 3 and to be a "Schedule 3 SAYE option scheme" for the purposes of Schedule 3. In order to be a "Schedule 3 SAYE option scheme" and registered with HMRC, the Company must notify HMRC of the first grant of Options by 6 July following the end of the tax year in which the relevant Grant Date occurs in accordance with Schedule 3 and then make annual filings with HMRC by each subsequent 6 July detailing the operation of the Plan.
This introduction does not form part of the Plan rules.
In these rules:
"Acquiring Company" has the meaning given to it by paragraph 38 of Schedule 3;
"Associated Company" has the meaning given by paragraph 47(1) of Schedule 3, except in relation to rules 6.4.5 and 6.5, where it has the meaning given by paragraph 35(4) of Schedule 3;
"Board" means the board of directors of the Company, or any committee or person duly authorised by it;
"Bonus" means any sum payable by way of terminal bonus under a Savings Contract being any additional payment made by the nominated Savings Authority when repaying contributions under a Savings Contract;
"Bonus Date" means the earliest date on which the relevant Bonus is payable under the Savings Contract applicable to the Option;
"Business Day" means a day on which the London Stock Exchange (or, if relevant and if the Board determines, any other stock exchange nominated by the Board on which the Shares are traded) is open for the transaction of business;
"Company" means Morgan Advanced Materials plc, a company incorporated in England and Wales with registered number 00286773;
"Control" means, in relation to a body corporate, the power of a person to secure by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or as a result of any powers conferred by the articles of association, or other document regulating that or any other body corporate, that the affairs of the first mentioned body corporate are conducted in accordance with the wishes of that person;
"Controlling Company" has the meaning given by paragraph (b) or (c) of paragraph 18 of Schedule 3;
"Dealing Restrictions" means any restrictions relating to dealing in Shares imposed by law, order, regulation, Government directive or any dealing code adopted by the Company;
"Eligible Employee" means:
"Employment" means, subject to rule 6.5, the Participant's employment or directorship by reference to which the Participant is or was an Eligible Employee;
"Exercise Date" has the meaning given in rule 7.4;
"Exercise Period" means the period beginning on the Bonus Date and ending six months after that date;
"Exercise Price" means, subject to rule 8, the price at which each Share subject to an Option may be acquired on the exercise of that Option, being not manifestly less than:
"Expiry Date" means 9 May 2034, being the tenth anniversary of the date the Plan is approved by the Company's shareholders;
"Full-Time Director" means a director of any Participating Company who normally devotes not less than 25 hours per week (excluding meal breaks and normal holiday entitlements or such other number of hours as may be required by HMRC for the purposes of paragraph 6 of Schedule 3) to their duties;
"Grant Date" means the date on which an Option is granted;
"Group Member" means the Company and its Subsidiaries from time to time and "Group" will be construed accordingly;
"HMRC" means HM Revenue & Customs;
"Invitation Date" means the date on which invitations are issued to Eligible Employees in accordance with rule 2.1;
"ITEPA" means the Income Tax (Earnings and Pensions) Act 2003, as amended from time to time;
"London Stock Exchange" means the London Stock Exchange or any successor body;
"Maximum Contribution" means the maximum aggregate Monthly Contribution which a Participant may make under all Savings Contracts linked to options granted to that Participant under the Plan or any other savings-related share option plan registered with HMRC under Part 8 of Schedule 3, being £500 per month or any other maximum amount specified for the purposes of paragraph 25(3) of Schedule 3 from time to time;
"Minimum Contribution" means £5 per month or any other minimum amount specified for the purposes of paragraph 25(3) of Schedule 3 from time to time;
"Monthly Contribution" means the monthly contribution agreed to be paid by a Participant under the relevant Savings Contract;
"Non-UK Company Reorganisation Arrangement" has the meaning given by paragraph 47A of Schedule 3;
"Official List" means the list maintained by the Financial Conduct Authority for the purposes of section 74(1) of the Financial Services and Markets Act 2000;
"Option" means a right to acquire Shares granted under the Plan;
"Option Certificate" means a certificate in such form as the Board may determine evidencing the grant of an Option;
"Participating Company" means the Company and any other Group Member of which the Company has Control and which the Board has determined will be a participating company for the purposes of the Plan;
"Participant" means a person holding an Option or that person's personal representatives;
"Plan" means the plan constituted by these rules known as the Morgan Advanced Materials Sharesave Plan 2024, as amended from time to time;
"Restriction" means any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 of ITEPA would apply if the references in those subsections to the employment-related securities were to the Shares;
"Savings Authority" means the bank, building society or European authorised institution chosen by the Board from time to time for the purpose of receiving Monthly Contributions under Savings Contracts;
"Savings Contract" means a savings contract under a certified SAYE savings arrangement (within the meaning of section 703(1) of the Income Tax (Trading and Other Income) Act 2005) approved by HMRC for the purposes of Schedule 3 and "Three Year Savings Contract" and "Five Year Savings Contract" will be construed accordingly;
"Schedule 3" means Schedule 3 to ITEPA;
"Shares" means fully paid ordinary shares in the capital of the Company which satisfy the requirements of paragraphs 18 to 20 and 22 of Schedule 3, unless rule 9.3 applies;
"Subsidiary" means a company which is a subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006;
"Treasury Shares" means Shares which are governed by Chapter 6 of Part 18 of the Companies Act 2006.
References in these rules to any statutory provision are to that provision as amended or re-enacted and any regulations made under it, and, unless the context otherwise requires, words in the singular include the plural and vice versa. The wording "to the extent" means "if, but only to the extent".
The purpose of the Plan is to provide, in accordance with Schedule 3, benefits for employees and directors in the form of share options. The Plan may not provide benefits to employees or directors otherwise than in accordance with Schedule 3.
At any time after the date the Plan is approved by the Company's shareholders, the Board may, in its absolute discretion, decide if and when to invite all Eligible Employees to apply for the grant of Options.
Any invitation must be made in writing (including by email or by any other electronic means) to all Eligible Employees and must include details of the following matters which will be determined by the Board:
Each invitation will be accompanied by:
An application form will be in such form as the Board may from time to time determine, but it must provide for the Eligible Employee to state:
When determining the Market Value by reference to which the Exercise Price is calculated, the Board will only use the closing middle-market quotation of a Share for Business Days which occur:
703(1) of the Income Tax (Trading and Other Income) Act 2005) that has been approved by HMRC for the purposes of Schedule 3;
provided that such day(s) do not fall within any period when Dealing Restrictions apply.
An Eligible Employee must not complete an application to receive an Option on a day that the Eligible Employee is subject to Dealing Restrictions in respect of that application and if the Company receives an application purporting to be completed on such a day, it will not take effect until such time as the Dealing Restrictions cease to apply.
Each application will provide that, in the event of scaling down in accordance with rule 3, the Board is authorised by the Eligible Employee to modify their application to reflect such scaling down.
Subject to rules 2.2.7, 2.7, 2.9 and 3, each application will be deemed to be for an Option over such number of whole Shares as can be acquired at the Exercise Price with the expected repayment under the related Savings Contract at the appropriate Bonus Date.
If an application for a Savings Contract specifies a Monthly Contribution which exceeds the maximum Monthly Contribution that the Eligible Employee may make in respect of the relevant invitation, the Board may reduce the proposed Monthly Contribution to the maximum amount permitted.
If valid applications are received in excess of any maximum number of Shares determined by the Board in accordance with rule 2.2.5, the Board will scale down applications in the same manner in order to eliminate the excess by:
Where applications are scaled down in accordance with rule 3.1 all relevant applications will be deemed to have been amended or withdrawn, as the case may be.
If the number of Shares is insufficient to enable an Option based on a Monthly Contribution of the Minimum Contribution per month to be granted to each Eligible Employee who has made a valid application, the Board may, as an alternative to selecting by lot, determine in its absolute discretion that no Options will be granted.
If an Eligible Employee applies for more than one Option, the Eligible Employee must be treated for the purposes of this rule 3 as if they had applied for a single Option. The Board may make such adjustments as it considers appropriate to make sure that the Eligible Employee is treated no more favourably than an Eligible Employee who had applied for a single Option.
An Option will only be granted to a person if:
Each Participant will receive an Option Certificate specifying the terms of the Option as soon as reasonably practicable after its Grant Date including:
The Option Certificate may be distributed in hard copy by email or by any other electronic means. If any Option Certificate is lost or damaged the Board may replace it on such terms as it determines.
The number of Shares over which the Board may grant Options on any date will be limited so that it does not exceed the limit specified in rule 5.2. The limit specified in rule 5.2 only applies to Options which are to be satisfied (directly or indirectly) by the issue of new Shares or the transfer of Treasury Shares.
The limit is the number of Shares representing ten per cent. of the Company's equity share capital on the Grant Date less the aggregate of:
For the purposes of this rule 5:
Where an individual is granted two awards on terms that the exercise, vesting or release of one will automatically result in a reduction to the extent to which the other may be exercised, vest or be released and vice versa, then for the purposes of this rule 5 it will only be necessary to take into account that number of Shares which could be acquired in respect of those awards having regard to those terms.
The Board may adjust the limit specified in rule 5.2 in the event of a variation of the equity share capital of the Company.
An Option may only be exercised, subject to any Dealing Restrictions, during the
Exercise Period, or, if rule 6.3, 6.4, 6.6 or 9 applies, the periods specified in those rules. Subject to rule 6.3 and any earlier lapse in accordance with the Plan rules, the Option will lapse at the end of the Exercise Period.
Subject to rule 9.2.2, the personal representatives of a deceased Participant may exercise that Participant's Option:
after which time, it will lapse.
Subject to rule 6.3, if a Participant ceases Employment because of:
the Option may be exercised within the period of six months after the date of such cessation or, if it ends earlier, the Exercise Period applicable to that Option after which time it will lapse.
If the Participant ceases to hold Employment but continues to hold any office or employment with the Company or an Associated Company of the Company then the Participant will be regarded as ceasing to be in Employment when the Participant ceases to hold that office or employment.
If a Participant is an employee or director of an Associated Company of the Company on the Bonus Date, the Participant may exercise their Option within six months of the Bonus Date, after which time it will lapse.
An Option will lapse if, before an Option has become capable of being exercised, the Participant:
unless it may be exercised at that time under rule 6.3, 6.4, 6.6 or 9.
An Option may only be exercised with monies not exceeding the amount of the repayment (including any Bonus or interest) made under the related Savings Contract. For the purpose of this rule 7.1, a repayment under the Savings Contract will exclude the repayment of any Monthly Contribution the due date for payment of which falls after the date on which repayment is made.
An Option may be exercised in whole or in part but only on one occasion. If the Option is exercised in part, it lapses in respect of the balance.
A Participant may, subject to any Dealing Restrictions, exercise their Option in accordance with these rules by:
7.3.1 giving notice in the prescribed form (in such form as the Board may determine) to the Company or any person nominated by the Board;
The "Exercise Date" will be the date of receipt (as determined by the Board) by the Company or its duly appointed agent of the notice and, if relevant, the Option Certificate, payment and/or instruction referred to in rule 7.3. However, if an exercise notice is delivered at a time when any Dealing Restrictions would prohibit the exercise of Options by the Participant, the Exercise Date will be, subject to the Plan rules, the first Business Day when such Dealing Restrictions cease to apply.
Subject to rule 12.8 and any Dealing Restrictions, the Company will, within 30 days of the Exercise Date, arrange for the transfer (including a transfer out of treasury) or issue to, or to the order of, the Participant, of the number of Shares in respect of which the Option has been exercised.
Shares issued or transferred on the exercise of an Option will rank equally in all respects with the Shares in issue at the point of issue or transfer, except as specified in the Plan rules. They will not rank for any rights attaching to Shares by reference to a record date before the date of issue or transfer. Where Shares are transferred (including a transfer out of treasury) on the exercise of an Option the Participant will be entitled to all rights attaching to the Shares by reference to a record date on or after the transfer date.
If there is a variation of the equity share capital of the Company, including a capitalisation or rights issue, sub-division, consolidation or reduction of share capital, the Board may adjust the number or description of Shares subject to, and the Exercise Price of, an Option as it considers appropriate, provided that:
8.2.1 Any adjustment made to the Exercise Price for unissued Shares which would have the effect of reducing the Exercise Price to less than the nominal value of the Shares will only be made if and to the extent that the Board is authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Shares in respect of which the Option is exercisable exceeds the adjusted Exercise Price. The Board may apply such sum in paying up such amount on such Shares so that on the exercise of any Option in respect of which such a reduction will have been made, the Board will capitalise such sum (if any) and apply the same in paying up such amount.
8.2.2 Where an Option subsists over both issued and unissued Shares, an adjustment may only be made under rule 8 if the reduction of the Exercise Price in relation to Options over both issued and unissued Shares can be made to the same extent.
The Company will notify Participants of any adjustment made under this rule 8 as soon as reasonably practicable thereafter.
If, as a result of a Corporate Event (other than a Corporate Event to which rule 9.1.1(vi) applies), Shares will no longer satisfy the requirements of Part 4 of Schedule 3, Options may be exercised within the period of 20 days after the date on which the change of Control occurs, provided that the date of exercise falls within the Rule 9 Period.
If the Board reasonably expects a Corporate Event (other than a Corporate Event to which rule 9.1.1(vi) applies to occur, the Board may, acting fairly and reasonably, make arrangements permitting Options to be exercised during a period of 20 days ending with the date on which the Corporate Event occurs. If an Option is exercised under this rule 9.4, it will be treated as having been exercised in accordance with rule 9.2.
If the Board makes arrangements for the exercise of Options under rule 9.4, if the relevant Corporate Event does not occur within 20 days of the date of purported exercise, the Option will be treated as not having been exercised.
If:
then Options which would become exercisable under rule 9.2 (but for this rule 9.6) may not be exercised and, if they are not exchanged in accordance with rule 10 within the Rule 9 Period, will lapse at the end of that period.
If a Corporate Event occurs other than a Corporate Event under rule 9.1.1(iii) where there is no change of Control or under rule 9.1.1(vi), any Participant may at any time within the Rule 9 Period, by agreement with the Acquiring Company, release their Option (the "Old Option") in consideration of the grant to the Participant of a new option (the "New Option") which is equivalent to the Old Option because it satisfies the requirements of paragraph 39 of Schedule 3 but relates to shares in the Acquiring Company or the Controlling Company.
Where the New Options are granted in accordance with rule 10.1 they will be regarded for the purposes of the subsequent application of the rules of the Plan as having been granted at the time when the corresponding Old Options were granted and, with effect from the date on which the New Options are granted:
construed as if references to the Company were references to Morgan Advanced Materials plc (registered no 00286773);
For the purposes of this rule 11, "Employee" means any employee of a Group Member. This rule 11 applies during an Employee's employment and after the cessation of an Employee's employment, whether or not such cessation is lawful.
Nothing in the Plan rules or the operation of the Plan forms part of the Employee's contract of employment. The rights and obligations arising from the employment relationship between the Employee and the Employee's employer are separate from, and are not affected by, the Plan. Participation in the Plan does not create any right to, or expectation of, continued employment of the Employee.
No Employee has a right to participate in the Plan. Participation in the Plan or the grant of Options on a particular basis in any year does not create any right to or expectation of participation in the Plan or the grant of Options on the same basis, or at all, in any future year.
No Employee has any right to compensation for any loss in relation to the Plan, including any loss in relation to:
Participation in the Plan is permitted only on the basis that the Participant accepts all the provisions of the Plan rules, including this rule 11.5. By participating in the Plan, an Employee waives all rights under or in connection with the Plan, other than the right to acquire Shares subject to and in accordance with the express terms of the Plan and any conditions applicable to their Option, in consideration for, and as a condition of, the grant of the Option.
Nothing in the Plan confers any benefit, right or expectation on a person who is not an Employee. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan or any condition applicable to an Employee's Option. This does not affect any other right or remedy of a third party which may exist.
A Participant will not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of Shares subject to an Option until the Participant has received the underlying Shares as a result of the exercise of an Option.
A Participant may not transfer, assign or otherwise dispose of an Option or any rights in respect of it. If the Participant does, whether voluntarily or involuntarily, then it will immediately lapse. This rule 12.2 does not apply to the transmission of an Option on the death of a Participant to the Participant's personal representatives.
None of the benefits received under the Plan is pensionable.
The decision of the Board on the interpretation of the Plan or in any dispute relating to an Option or matter relating to the Plan will be final, conclusive and binding on all persons.
The Company may send to Participants copies of any documents or notices normally sent to the holders of its Shares.
The Board has the power from time to time to make or vary regulations for the administration and operation of the Plan but these must be consistent with its rules and with applicable law. The Board may correct any defect or supply any omission or reconcile any inconsistency or ambiguity in the Plan.
12.7.1 During the Participant's participation in the Plan, the Company will have access to and process, or authorise the processing of, personal data (as defined in the Data Protection Act 2018, the EU General Data Protection Regulation 5419/16 in such form as incorporated into the law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) and any regulations thereunder and/or any implementing legislation (together, the "Data Protection Laws")) held and controlled by any Group Member and relating to employees or customers of any Group Member, or other individuals. Each Group Member will comply with the terms of the Data Protection Laws, and the Company's data protection policies issued from time to time, in relation to such data.
12.7.2 Any Group Member and its employees and agents may from time to time hold, process and disclose Participants' personal data in accordance with the terms of the Company's employee privacy notice and the data protection policy in force from time to time.
All allotments, issues and transfers of Shares will be subject to any necessary consents under any relevant enactments or regulations for the time being in force in the United Kingdom or elsewhere. The Participant will be responsible for complying with any requirements the Participant needs to fulfil in order to obtain or avoid the necessity for any such consent.
If and so long as the Shares are traded on the London Stock Exchange, the Company will apply for listing of any Shares issued under the Plan as soon as reasonably practicable.
Subject to the rest of this rule 13, the Board may at any time amend the Plan and the terms of any Option in any way.
If the Board proposes an amendment to the Plan rules or the terms of any Option which would be to the material disadvantage of Participants in respect of subsisting rights under the Plan, then:
13.3.1 the Board will invite each so disadvantaged Participant to indicate whether or not they approve the amendment; and
13.3.2 such amendment will only take effect if the majority (assessed by reference to the size of affected Options) of the Participants who respond to an invitation made in accordance with rule 13.3.1 consent to the amendment.
The Board may (but is not obliged to) give written notice of any amendments made to any Participant affected.
English law governs the Plan and all Options and their construction. The courts of England and Wales will have exclusive jurisdiction in respect of disputes arising under or in connection with the Plan or any Option.
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