Exhibit 4.8
RULES OF THE VODAFONE GLOBAL INCENTIVE PLAN | ||
Shareholders' Approval: | 26 July 2005 | |
Directors' Adoption: | 8 November 2005 | |
Expiry Date: | 25 July 2015 | |
Inland Revenue reference | A1514 |
One Silk Street
London EC2Y 8HQ
Telephone (44-20) 7456 2000
Facsimile (44-20) 7456 2222
Ref Graham Rowlands-Hempel
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General terms
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General terms
“Dealing Restrictions” means restrictions imposed by statute, order, regulation or Government directive, or by the Model Code or any code adopted by the Company based on the Model Code; | ||
“Director” means any director of the Company, any member of the Group Executive Committee and, any other person designated, from time to time, by the Committee; | ||
“Expected Value” means the value of an Award on the Award Date using a valuation methodology determined by the Committee, which takes account of the sum of all various possible performance outcomes at Vesting and which reflects the probabilities of achieving different performance outcomes, rather than the maximum outcome only; | ||
“Forfeitable Shares” means Shares held in the name of or for the benefit of a Participant subject to the Forfeitable Share Agreement ; | ||
“Forfeitable Share Agreement”means the agreement referred to in rule 16.1 (Forfeitable Share Agreement); | ||
“Grantor” means the Company or any other Member of the Group which grants Awards under the Plan with the approval of the Committee; | ||
“ITEPA” means Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003; | ||
“London Stock Exchange” means London Stock Exchange plc; | ||
“JV Company” means any company or undertaking: | ||
(a) | in the ordinary share capital of which the Company has an interest in shares of any class of at least five per cent in nominal value of the allotted shares of that class; and | |
(b) | which is not a Subsidiary; and | |
(c) | which is designated by the Committee as a JV Company (for some or all purposes under the Plan) | |
or any undertaking which is a subsidiary undertaking of such a company or undertaking. | ||
For the purpose of this definition, “undertaking” shall have the meaning given to it by Section 259 of the Companies Act 1985 and, in this definition, that section shall apply to the references to “shares” and to “ordinary share capital” in the same way as it applies to references to “shares” in Part VII of that Act. “Subsidiary undertaking” shall have the meaning given to it by Section 258 of the Companies Act 1985. | ||
“Market Value Option” means an Option the Option Price of which is sent by reference to the market value of a Share or an American Depository Share (ADS) on or around the Award Date; | ||
“Member of the Group” means: | ||
(a) | the Company; and | |
(b) | its Subsidiaries from time to time; | |
(c) | any JV Company and | |
(d) | any other company which is associated with the Company and is so designated by the Committee (for some or all purposes under the Plan); |
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General terms
3
General terms
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General terms
5
General terms
6
General terms
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General terms
a × | b – c |
where: | |||
a = | the number of Shares subject to the Award; | ||
b = | the number of complete calendar months from the start of the Performance Period (or, if there is no Performance Condition, from the Award Date) until the date of Termination of Employment; | ||
c = | the number of complete calendar months from the start of the Performance Period (or, if there is no Performance Condition, from the Award Date) until the end of the Performance Period (or if there is no Performance Condition, the Vesting Date). | ||
The Award shall immediately lapse as to the balance. |
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General terms
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General terms
10.1.3 | An Award will not Vest under rule 10.1.1 but will be exchanged under rule 11 (Exchange of Awards): | ||
See also Approved Options | |||
(i) | if a Participant accepts an offer to exchange his Award; or | ||
(ii) | if the Committee, with the consent of the Acquiring Company, decides, before the person obtains Control, that the Awards will be automatically exchanged; | ||
(iii) | if the shareholders of the Acquiring Company, immediately after it has obtained Control, are substantially the same as the shareholders of the Company before it obtained Control. | ||
Rule 10.1.3(iii) will not apply if the Committee considers that there are exceptional circumstances. | |||
10.2 | Scheme of arrangement | ||
10.2.1 | If, under section 425 of the Companies Act 1985, a court sanctions a compromise or arrangement in connection with the acquisition of Shares, an Award will Vest on the date of court sanction but only to the extent that any Performance Condition has been satisfied. The Award will lapse as to the balance. This rule 10.2 also applies where there is an equivalent procedure under any non-UK legislation. | ||
10.2.2 | Where an Award vests under rule 10.2.1, the Committee will determine the extent to which any Performance Condition has been satisfied in the manner specified in the Performance Condition or, if this is not specified in the Performance Condition, in such manner as they consider reasonable. In addition, the Committee may decide that the number of Shares in respect of which the Award will Vest will be reduced pro rata to reflect the acceleration of Vesting. | ||
10.2.3 | An Award will not Vest under rule 10.2.1 but will be exchanged under rule 11 (Exchange of Awards): | ||
See also Approved Options | |||
(i) | if the Participant accepts an offer to exchange his Award; or | ||
(ii) | if the Committee, with the consent of the Acquiring Company, decides before court sanction, that the Awards will be automatically exchanged; | ||
(iii) | if the shareholders of the Acquiring Company, immediately after the effective date of the compromise, arrangement or procedure, are substantially the same as the shareholders of the Company before the effective date. | ||
Rule 10.2.3(iii) will not apply if the Committee considers that there are exceptional circumstances. | |||
10.3 | Demerger or other corporate event | ||
10.3.1 | If the Committee becomes aware that the Company is or is expected to be affected by any demerger, distribution (other than an ordinary dividend) or other transaction not falling within rules 10.1 (Takeover), or 10.2 (Scheme of arrangement) which, in the opinion of the Committee, would affect the current or future value of any Award, the Committee may allow an Award to Vest but only to the extent that any Performance Condition has been satisfied and subject to any other conditions the Committee may decide to impose. The Award will lapse as to the balance. |
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General terms
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General terms
11.2.5 | must either: | ||
(i) | be subject to a Performance Condition which is, in the opinion of the Committee, equivalent to any Performance Condition applying to the existing Award; or | ||
(ii) | not be subject to any Performance Condition but be in respect of the number of shares which is equivalent to the number of Shares comprised in the existing Award which would have Vested under rule 10.1, 10.2 or 10.3 (in which case, the Award will lapse as to the balance); | ||
11.2.6 | will be governed by the Plan as if references to Shares were references to the shares over which the new award is granted and references to the Company were references to the Acquiring Company or the body corporate determined under rule 11.2.1. | ||
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General terms
13.4 | Terms of employment | ||
13.4.1 | For the purposes of this rule 13.4, “Employee” means any person who is or will be eligible to be a Participant or any other person. | ||
13.4.2 | This rule 13.4 applies: | ||
(i) | whether the Company has full discretion in the operation of the Plan, or whether the Company could be regarded as being subject to any obligations in the operation of the Plan; | ||
(ii) | during an Employee’s employment or employment relationship; and | ||
(iii) | after the termination of an Employee’s employment or employment relationship, whether the termination is lawful or unlawful. | ||
13.4.3 | Nothing in the rules or the operation of the Plan forms part of the contract of employment or employment relationship of an Employee. The rights and obligations arising from the employment relationship between the Employee and the Company 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 or a continued employment relationship. | ||
13.4.4 | The grant of Awards on a particular basis in any year does not create any right to or expectation of the grant of Awards on the same basis, or at all, in any future year. | ||
13.4.5 | No Employee is entitled to participate in the Plan, or be considered for participation in it, at a particular level or at all. Participation in one operation of the Plan does not imply any right to participate, or to be considered for participation in any later operation of the Plan. | ||
13.4.6 | Without prejudice to an Employee’s right in respect of an Award subject to and in accordance with the express terms of the Plan and the Performance Condition, no Employee has any rights in respect of the exercise or omission to exercise any discretion, or the making or omission to make any decision, relating to the Award. Any and all discretions, decisions or omissions relating to the Award may operate to the disadvantage of the Employee, even if this could be regarded as capricious or unreasonable, or could be regarded as in breach of any implied term between the Employee and his employer, including any implied duty of trust and confidence. Any such implied term is excluded and overridden by this rule 13.4. | ||
13.4.7 | No Employee has any right to compensation for any loss in relation to the Plan, including: | ||
(i) | any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of employment or the employment relationship); | ||
(ii) | any exercise of a discretion or a decision taken in relation to an Award or to the Plan, or any failure to exercise a discretion or take a decision; | ||
(iii) | the operation, suspension, termination or amendment of the Plan. | ||
13.4.8 | Participation in the Plan is permitted only on the basis that the Participant accepts all the provisions of its rules, including in particular this rule 13.4. By participating in the Plan, an Employee waives all rights under the Plan, other than the right to acquire shares subject to and in accordance with the express terms of the Plan and the Performance Condition, in consideration for, and as a condition of, the grant of an Award under the Plan. |
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General terms
13.4.9 | Nothing in this 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 this Plan. This does not affect any other right or remedy of a third party which may exist. | |
13.4.10 | Each of the provisions of this rule 13.4 is entirely separate and independent from each of the other provisions. If any provision is found to be invalid then it will be deemed never to have been part of these rules and to the extent that it is possible to do so, this will not affect the validity or enforceability of any of the remaining provisions. | |
13.5 | Employee trust | |
Subject to rule 13.6, the Company and any Subsidiary of the Company may provide money to the trustee of any trust or any other person to enable them or him 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 permitted by Section 153 of the Companies Act 1985. | ||
13.6 | Satisfying Awards to employees of JV Companies | |
Notwithstanding the terms of any Award or any other term of the Plan, no Award made to an employee of a JV Company shall be satisfied in any way which would involve the Company or any Subsidiary giving financial assistance (as defined in Chapter VI of Part V of the Companies Act 1985) directly or indirectly for the purpose of satisfying the Award, unless that financial assistance is permitted under UK legislation at that time. | ||
13.7 | Data protection | |
By participating in the Plan the Participant consents to the holding and processing of personal data provided by the Participant to the Company or a Member of the Group for all purposes relating to the operation of the Plan. These include, but are not limited to: | ||
13.7.1 | administering and maintaining Participant records; | |
13.7.2 | providing information to trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan; | |
13.7.3 | providing information to future purchasers of the Company or the business in which the Participant works; | |
13.7.4 | transferring information about the Participant to a country or territory outside the European Economic Area. | |
13.8 | Consents | |
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 he needs to fulfil in order to obtain or avoid the necessity for any such consent. |
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General terms
15
General terms
16
Forfeitable Shares
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Forfeitable Shares
16.6 | Variations in share capital, rights issues, demergers etc | |
If there is: | ||
16.6.1 | a variation in the equity share capital of the Company, including a capitalisation, sub-division, consolidation or reduction of share capital; or | |
16.6.2 | a rights issue; or | |
16.6.3 | a demerger (in whatever form) or exempt distribution by virtue of Section 213 of the Income and Corporation Taxes Act 1988; or | |
16.6.4 | a special dividend or distribution, | |
the Participant will, subject to the Forfeitable Share Agreement, have the same rights as any other shareholder in respect of his Forfeitable Shares. Any shares, securities or rights allotted to a Participant as a result of such an event shall be: | ||
16.6.5 | treated as if they were awarded to the Participant under the Plan in the same way and at the same time as the Forfeitable Shares in respect of which the rights were conferred; and | |
16.6.6 | subject to the rules of the Plan and the terms of the Forfeitable Share Agreement. | |
However, securities bought by a Participant pursuant to a rights issue will not be treated as described in rules 16.6.5 and 16.6.6 except to the extent they are bought using the proceeds of sale of rights under that rights issue. | ||
16.7 | Consequences of Vesting for Forfeitable Shares | |
To the extent that an Award of Forfeitable Shares Vests, the Forfeitable Share Agreement will cease to apply to the Shares. If the Shares are held by any person for the benefit of the Participant, that person may transfer the Shares to or to the order of the Participant. | ||
16.8 | Consequences of lapse for Forfeitable Shares | |
To the extent that an Award of Forfeitable Shares lapses, the Participant shall transfer his interest in the Shares as described in the Forfeitable Share Agreement. |
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Options
17.2.1 | a variation in the equity share capital of the Company, including a capitalisation, sub-division, consolidation or reduction of share capital; or | |
17.2.2 | a rights issue; or | |
17.2.3 | a demerger (in whatever form) or exempt distribution by virtue of Section 213 of the Income and Corporation Taxes Act 1988; or | |
17.2.4 | a special dividend or distribution; | |
the Committee may: |
17.2.5 | adjust the number of type of shares or securities comprised in an Option; and/or | |
17.2.6 | adjust the Option Price; and/or | |
17.2.7 | change of identity of the Company or Companies whose Shares are subject to the Option. | |
This may include retrospective adjustments. | ||
The Option Price of a Market Value Option to subscribe for Shares may be adjusted to a price less than nominal value only if the Committee resolves to capitalise the reserves of the Company, subject to any necessary conditions. This capitalisation will be of an amount equal to the difference between the adjusted Option Price payable for the Shares to be issued on exercise and the nominal value of such Shares on the date of allotment of the Shares. If, at the time of exercise, the Committee does not resolve to capitalise the reserves of the Company for this purpose then the adjustment under this rule 17.2 will be deemed not to have taken place. |
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Options
17.3 | Voting and dividends | |
AParticipant shall not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of Shares subject to an Option until the Shares are issued or transferred to the Participant. | ||
17.4 | Dividend equivalent | |
An Option may include the right (subject to rule 12 (Tax)) to receive cash or Shares (as determined by the Grantor) equal in value to the amount per Share of any dividend the record date for which falls between the Award Date and the date of exercise and multiplied by the number of Shares subject to the Option. These payments may be made: | ||
17.4.1 | to the extent only and as soon as practicable after the Option is exercised; or | |
17.4.2 | as soon as practicable after the relevant dividend is paid. | |
Unless otherwise specified at the Award Date, the amount paid will be calculated on the basis of the amount paid to an individual shareholder who is resident and domiciled in the UK for all tax purposes. | ||
17.5 | Consequences of Vesting for Options | |
A Participant may exercise an Option, to the extent it has Vested, at any time after it has Vested. | ||
17.6 | Periods for exercise of Options | |
Subject to rule 17.7, an Option which has Vested will be exercisable: | ||
17.6.1 | where it has Vested as a result of the Participant ceasing to be an employee (seerule 9), for twelve months from the date of Termination of Employment; | |
17.6.2 | where it has Vested as a result of the Participant’s death (see rule 9.2.1(ii)), for 12 months from his death; | |
See also Approved Options | ||
17.6.3 | where the Option has Vested under rule 10 (e.g. as a result of a takeover orreconstruction), for six months from the date of Vesting or, if earlier, the date six weeks after the date on which a notice to acquire Shares under section 429 of the Companies Act 1985 or any other equivalent local legislation is first served; and | |
17.6.4 | in all other cases for six months from the date of Vesting of a Nil-Cost Option or for 10 years after the Award Date of a Market Value Option (or such shorter period as the Committee may specify on grant). | |
17.7 | Lapse of Options | |
An Option will lapse at the end of any exercise period specified in rule 17.6. | ||
For the avoidance of doubt: | ||
17.7.1 | an Option can lapse under rule 9.1 even though it may have previously Vested; |
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Options
17.7.2 | in the event of any conflict, the provision of these rules (including any schedules) which results in the Option ceasing to be exercisable or lapsing earliest shall take precedence. | |
17.8 | Manner of exercise | |
Options must be exercised by notice in writing or in a form specified by the Company and delivered to the Company or other duly appointed agent or by telephone or by other electronic means approved by the Company. The notice of exercise of the Option must be completed, signed (in manuscript or in any other form that may be specified by the Company) by the Participant or by his appointed agent, and must be accompanied by: | ||
17.8.1 | the relevant option certificate (if required by the Company); and | |
17.8.2 | correct payment in full of the Option Price for the number of Shares being acquired or details of arrangements agreed between the Participant and the Company made for the payment of the Option Price for the number of Shares being acquired. | |
17.9 | Issue or transfer of Shares after exercise | |
Subject to rule 12 and 18.5, Shares will be issued or transferred (from treasury or otherwise) to or to the order of the Participant within 30 calendar days of the date of receipt of payment of the Option Price and the documents required under rule 17.8. | ||
However, if the issue or transfer is prevented by any Dealing Restrictions, the Shares will be issued or transferred as soon as is practicable following the lifting of the Dealing Restrictions. | ||
See also Approved Options | ||
17.10 | Other ways of satisfying an Option (e.g. SARs) | |
The Grantor, subject to the approval of the Committee, may decide to satisfy an Option by: | ||
See also special provisions for US employees | ||
17.10.1 | paying (subject to rule 12 (Tax)) a cash amount which is equal to the amount by which the market value of the Shares in respect of which the Option is exercised, as at date of exercise, exceeds the Option Price; or | |
17.10.2 | procuring the issue or transfer of Shares to the value of the cash amount specified above. | |
If the Committee does this, the Participant need not pay the Option Price or, if he has paid it, the Company will repay it to him. | ||
The Grantor may determine that Awards will be satisfied in cash at the Award Date or at any time subsequently. |
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Conditional Awards
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Conditional Awards
18.5 | Cash alternative |
The Grantor, subject to the approval of the Committee, may decide to satisfy a Conditional Award by paying (subject to rule 12 (Tax)) a cash amount equal to the market value of the Shares subject to the Conditional Award. |
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Special Provisions for Directors
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Schedule 1
United Kingdom – Tax-Favoured Options
The Grantor may designate any Market Value Option (which is not capable of satisfaction as a SAR or in cash) as an Approved Option. If it does, the provisions of the rules relating the Market Value Options will apply to the Approved Option, subject to this Schedule. No other types of Awards may be designated as Approved Options under this Schedule. | |
The terms of Approved Options have been approved by the Inland Revenue under Schedule 4 of ITEPA under reference number[ ]. | |
1 | Eligibility to be granted Approved Options |
Approved Options may only be granted to an employee of: | |
1.1 | the Company; |
1.2 | Subsidiary; |
1.3 | any jointly-owned company (within the meaning of paragraph 34 ITEPA) designated by the Committee; or |
1.4 | any other entity designated by the Committee and agreed by the Inland Revenue, and cannot be granted to anybody who is: |
1.5 | excluded from participation because of paragraph 9 of ITEPA (material interest provisions); or |
1.6 | a director who is required to work less than 25 hours a week (excluding meal breaks) for the Company. |
2 | Shares subject to an Approved Option |
The Shares subject to an Approved Option must satisfy paragraphs 16 to 20 of ITEPA. If they cease to satisfy paragraphs 16 to 20 of ITEPA and the Committee notify the Inland Revenue that they wish the terms of Approved Options to be disapproved, the definition of the Option will continue in effect but the Option will cease to be an Approved Option and will be treated, for the purposes of the rules, as a Market Value Option. | |
3 | Individual limit on Approved Options |
The Committee must not grant an Approved Option to an Eligible Employee which would cause the aggregate market value of: | |
3.1 | the Shares subject to that Approved Option; and |
3.2 | the Shares which he may acquire on exercising other Approved Options; and |
3.3 | the shares which he may acquire on exercising his options under any other Inland Revenue approved discretionary scheme established by the Company or by any of its associated companies (as defined in paragraph 35 of ITEPA) |
to exceed the amount permitted under paragraph 6(1) of ITEPA (currently £30,000). For the purposes of this paragraph, market value is calculated as at the date of grant of the options as described in the relevant plan rules. |
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If the Committee tries to grant an Approved Option which is inconsistent with this paragraph 3, the Approved Option will be limited and will take effect from the Award Date on a basis consistent with that rule. | |||
4 | Transferring Approved Options | ||
An Approved Option cannot be transferred, assigned or otherwise disposed of, except on the transmission of the Approved Option on the death of a Participant to his personal representatives. | |||
5 | Variations in share capital, demergers and special distributions | ||
5.1 | Adjustments may not be made to Approved Options under rule 17.2 where there is a demerger (in whatever form), an exempt distribution by virtue of Section 213 of the Income and Corporation Taxes Act 1988 or a special dividend or distribution. | ||
5.2 | The Committee cannot treat an Approved Option as being over shares in any other company under rule 17.2. | ||
5.3 | No adjustment of Approved Options may be made under rule 17.2 without the prior approval of the Inland Revenue. | ||
6 | Restrictions on exercise of an Approved Option | ||
AParticipant may not exercise an Approved Option while he is excluded from being granted an Approved Option under paragraph 9 of ITEPA (material interest provisions). | |||
7 | Specified Age and redundancy | ||
For the purposes of paragraph 35A of ITEPA, the specified age is 55 and redundancy, for the purposes of rule 9.2.1(i), has the meaning given to that term by the Employment Rights Act 1996. | |||
8 | Death | ||
If the Participant dies, the Approved Option may be exercised by his personal representatives within 12 months after his death, after which it will lapse. | |||
9 | Discretion on exercise and lapse of Approved Options | ||
9.1 | The Committee may extend the period during which an Approved Option may be exercised where it has Vested as a result of the Participant ceasing to be an employee (see rule 9) up to 42 months from the Award Date. | ||
9.2 | If the Committee exercise any discretion under rules 9 or 10 in relation to an Approved Option or under paragraph 9.1 above, they must do so fairly and reasonably. | ||
10 | Exchange of Approved Options | ||
10.1 | If Inland Revenue approval of the terms of Approved Options is to be maintained, Approved Options can only be exchanged, as described in rule 11, if the Acquiring Company: | ||
10.1.1 | obtains Control of the Company as a result of making a general offer to acquire: | ||
(i) | the whole of the issued ordinary share capital of the Company (other than that which is already owned by it and its subsidiary or holding company) made on a condition such that, if satisfied, the Acquiring Company will have Control of the Company; or |
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(ii) | all the Shares (or all those Shares not already owned by the Acquiring Company or its subsidiary or holding company); or | ||
10.1.2 | obtains Control of the Company under a compromise or arrangement sanctioned by the court under Section 425 of the Companies Act 1985 or other local sanction procedure which the Inland Revenue agrees is equivalent; or | ||
10.1.3 | becomes bound or entitled to acquire Shares under Sections 428 to 430F of the Companies Act 1985 or other local legislation which the Inland Revenue agrees is equivalent. | ||
10.2 | Approved Options must be exchanged within the period referred to in paragraph 26(2) of ITEPA and with the agreement of the company offering the exchange. |
10.3 | The new Award will be in respect of shares which satisfy the conditions of paragraph 27(4) of ITEPA, in a body corporate falling within paragraph 16(b) or (c) of ITEPA). |
11 | Takeovers and Restructurings |
11.1 | Rules 10.1.3(ii) and 10.2.3(ii) do not apply. |
11.2 | The words “subject to any other conditions the Committee may decide to impose” in rule 10.3.1 do not apply. |
12 | Cash alternative |
Rule 17.10 does not permit any cash amount to be made on exercise of an Approved Option. | |
13 | Changing the terms of Approved Options |
13.1 | The Committee need not obtain the approval of the Company in general meeting for any minor changes which are necessary or desirable in order to obtain or maintain Inland Revenue approval for the terms of Approved Options under ITEPA any other enactment. |
13.2 | If Inland Revenue approval of the terms of Approved Options is to be maintained, any change to the Plan under rule 14 which requires Inland Revenue approval and which is made after it has been approved under ITEPA will only have effect when it is approved by the Inland Revenue. |
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Italy
Schedule 2
Option Price for Options granted to Italian employees
The Option Price for a Market Value Option granted to any employee who may be subject to tax in Italy may, if the Committee so decides, be the average closing middle market quotation of a Share (as derived from the Official List of the London Stock Exchange) over the 30 calendar days preceding and including the Award Date or such other price determined by the Directors so as to ensure that such employee does not suffer a tax disadvantage.
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United States
Schedule 3
Special provisions for US employees
1 | Awards are intended not to constitute “non-qualified deferred compensation” within the meaning of Section 409A of the US Internal Revenue Code of 1986, as amended (the “Code”). |
2 | However, notwithstanding anything to the contrary in the Plan or the grant of any Award, if and to the extent the Committee shall determine that the terms of the grant, substitution or exercise of any Award may result in the failure of the such Award to comply with the requirements of Section 409A of the Code, or any applicable regulations or guidance promulgated by the US Secretary of the Treasury in connection therewith, the Committee shall have authority to take such action, in its sole discretion, to amend, modify, cancel or terminate the Plan or any grant of any Award as it deems necessary or advisable either for the Awards to be exempt from the application of Section 409A of the Code or to satisfy the requirements of Section 409A of the Code, including adding conditions with respect to the Vesting of the Awards, irrespective of the adverse affect of such action on and without the consent of any Participant. |
3 | The following rules shall not apply to any Award if the Committee determines that the application of those rules would or could cause the Award to become subject to Section 409A of the Code: |
3.1 | rule 17.1.2(i) (which relates to the Option Price); and |
3.2 | rule 17.10.1 (which allows for an Option to be cashed out). |
4 | If the disposition of Shares acquired pursuant to any Award is not covered by a then current registration statement under the Securities Act and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act of 1933, and the Committee may require any person receiving Shares pursuant to an Award, as a condition precedent to receipt of such Shares, to represent to the Company in writing that the Shares acquired by such individual are acquired for investment only and not with a view to distribution and that such Shares will be disposed of only if registered for sale under the Securities Act of 1933 or if there is an available exemption for such disposition. |
5 | Notwithstanding anything else in the Plan, the Company shall not be required to take any action which it, in its discretion, considers could reasonably be deemed to result in a violation of Section 13(k) of the US Securities Exchange Act of 1934, as amended. |
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United States – tax-favoured options
Schedule 4
United States – Tax-favoured options
The Grantor may, on the Award Date, designate any Market Value Option as an Incentive Stock Option within the meaning of Section 422 of the Code (an “ISO”). If it does so, the provisions of the rules relating the Market Value Options will apply to the ISO, subject to this Schedule. | |
1 | Definitions |
“Code”means the United States of America Internal Revenue Code of 1986, as amended; | |
“Disability”means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; | |
“Subsidiary Corporation”means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 per cent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; | |
2 | Eligibility to be granted ISOs |
An ISO may only be granted to an Eligible Employee who is: | |
2.1 | is an employee of the Company or a Subsidiary Corporation; and |
2.2 | on the Award Date is not within 2 years of his normal retirement date. |
3 | Exercise period for ISOs |
Notwithstanding anything in the rules, an ISO will lapse, at the latest, 10 years (or five years, in the case of an individual described in Section 422(b)(6) of the Code (relating to certain 10% owners)) after the Award Date. | |
4 | Individual Limit on ISOs |
To the extent that the aggregate Market Value (determined as of the Award Date) of the Shares subject to ISOs held by any Participant which first Vest during any calendar year under the Plan (or any of the stock option plan required to be taken into account under Section 422(d) of the Code) exceeds US$100,000, the portion of such grant that exceeds US$100,000 shall not be an ISO but shall continue in effect as a Market Value Option governed by the rules, not including this Schedule. | |
5 | Option Price for an ISO |
The Option Price of an ISO will not be less than 100% (or 110%, in the case of an individual described in Section 422(b)(6) of the Code (relating to certain 10% owners)) of the Market Value of a Share on the date the ISO is granted. | |
6 | Overall limit on number of ISOs |
The aggregate number of Shares subject to ISOs will not exceed the lower of the limits set out in rule 7 and 63,000,000 Shares. The Committee may make such adjustments as it sees fit to this limit to take account of any transaction described in rules 10.3, 16.6, 17.2 or 18.1 (which deal with demergers, rights issues and variations in capital). |
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United States – tax-favoured options
7 | Transferring ISOs |
An ISO may not be transferred, assigned or otherwise disposed of other than by will or the laws of descent and distribution and, during the lifetime of such individual, must not be exercisable by any other person. | |
8 | Holding requirement |
If a Participant disposes of Shares acquired upon exercise of an ISO in a “disqualifying disposition” within the meaning of Section 422 of the Code less than: | |
8.1 | two years after the Award Date of the ISO; or |
8.2 | one year from the issue or transfer of Shares to the Participant on exercise, |
or in any other disqualifying disposition within the meaning of Section 422 of the Code, the Participant shall notify the Company in writing as soon as practicable of the date and terms of such disposition. Rule 12 (Tax) will apply to any resulting federal, state or local tax or social security contributions. | |
9 | Disability |
A Participant’s ISO will lapse 12 months after the Participant’s Termination of Employment by reason of his Disability. | |
10 | Governing law |
English law governs the ISOs and their construction but ISOs will be construed in accordance with the provisions of Section 422 of the Code so as to preserve their status as Incentive Stock Options. | |
11 | Failure to comply with the Code in relation to an ISO |
To the extent that an ISO fails to meet any of the requirements of Section 422 of the Code, it shall cease to be an ISO but shall, from the date of the failure, continue in effect as a Market Value Option governed by the rules, not including this Schedule. |
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