THE COLT DEFERRED BONUS PLAN
----------------------------------------
Established by a resolution of a Committee
of the Board of Directors of the Company
dated 4th April, 2000 and approved by an
ordinary resolution of the Company passed
on
25th May, 2000
----------------------------------------
As amended up to 15th February, 2001
SLAUGHTER AND MAY (JZF)
35 Basinghall Street,
London EC2V 5DB
PN003683108
THE RULES OF THE COLT DEFERRED BONUS PLAN
CONTENTS
Page
1. INTERPRETATION AND CONSTRUCTION 1
1.1 Definitions 1
1.2 Construction 2
1.3 Governing law 3
2. ELIGIBILITY 3
3. GRANT OF AWARDS 3
3.1 Operation of the Plan 3
3.2 Grant of Awards 4
3.3 Value of Bonus Share Awards 4
3.4 Value of Matching Awards 5
3.5 Market value 5
3.6 Shares comprised in an Award 5
3.7 Adjustment 5
4. VESTING OF AWARDS 6
4.1 General 6
4.2 Deferred Amount 6
4.3 Vesting of Bonus Share Awards 6
4.4 Vesting of Matching Awards 6
4.5 Notification to Participant 7
5. RESTRICTIONS UPON VESTING 7
5.1 General 7
5.2 Satisfaction of Conditions 7
5.3 Meaning of "ceasing to be employed" 7
5.4 Cessation of employment 8
6. CHANGE IN CONTROL AND LIQUIDATION 9
7. REPLACEMENT AWARDS 10
7.1 Application 10
7.2 Release of Options 10
7.3 The conditions 10
7.4 Period for release 11
7.5 Consequences of release 11
7.6 Bonus Share Awards and Deferred Amounts 11
8. PROCEDURE ON VESTING 12
8.1 Exercise of Matching Awards 12
8.2 Issue or transfer of Shares 12
8.3 Payment of Deferred Amount 12
8.4 Withholding obligations 13
8.5 Provision of Shares 13
9. NON-TRANSFERABILITY OF AWARDS 14
10. LOSS OF OFFICE 14
11. VARIATION OF CAPITAL 14
11.1 General 14
11.2 Adjustment of Awards 14
11.3 Restrictions on adjustment 15
11.4 Notification of adjustment 15
12. GENERAL 15
12.1 Administration 15
12.2 Costs and expenses 15
12.3 Power of amendment 15
12.4 Grant of Options 16
12.5 Termination 17
13. PLAN LIMITS 17
13.1 General 17
13.2 Life of Plan 18
14. NOTICES 18
14.1 To Employees and Participants 18
14.2 To the Company 18
14.3 To the Trustee 18
1. INTERPRETATION AND CONSTRUCTION
1.1 Definitions
(A) In this Plan, the following definitions apply.
(B) The "Auditors" are the auditors for the time being of the Company.
(C) An "Award" is a Bonus Share Award or a Matching Award.
(D) The "Board" means the board of directors of the Company.
(E) A "Bonus Share Award" means an award of Shares granted under Rule
3.2 and designated as a Bonus Share Award.
(F) The "Committee" means the Compensation Committee of the Board or
such other committee or committees of the Board as the Board may
from time to time determine or, if the Board so determines, the
Board.
(G) The "Company" is COLT Telecom Group plc registered in England under
No.3232904.
(H) "Conditions" has the meaning given in Rule 3.1(C).
(I) "Control" has the meaning given to it by section 840 of the Income
and Corporation Taxes Act 1988.
(J) The "Date of Grant" of an Award is the date on which it is granted
or such earlier date as may be specified in the notification
referred to in Rule 3.2(D).
(K) A "Dealing Day" is a day on which the London Stock Exchange is open
for the transaction of business.
(L) "Deferred Amount" has the meaning given in Clause 2(B).
(M) "Employee" is any employee or salaried director of a member of the
Group.
(N) A "Financial Year" means a financial year of the Company as that
expression is defined in section 742 of the Companies Act 1985.
(O) The "Grantor" means the Company where an Award is or is to be
granted by the Company and the Trustee where an Award is or is to be
granted by the Trustee.
(P) The "Group" means the Company and its Subsidiaries and "member of
the Group" is to be construed accordingly.
2
(Q) "Group Share Plan" means the COLT Telecom Group Share Plan, as
amended from time to time.
(R) The "London Stock Exchange" means the London Stock Exchange Limited.
(S) The "Market Price" in relation to any share means the middle market
quotation for that share as shown in the Daily Official List of the
London Stock Exchange.
(T) A "Matching Award" means an award of Shares, taking the form of an
option, granted in accordance with Rule 3.2 and designated as a
Matching Award.
(U) A "Participant" is the holder of an Award or, where the context
admits or requires, the holder's personal representatives.
(V) The "Plan" means this scheme (and including the Schedules to the
Rules) as from time to time amended.
(W) The "Rules" means the rules of this Plan.
(X) "Shares" means fully-paid ordinary shares in the capital of the
Company.
(Y) "Subsidiary" has the meaning given to it by section 736 of the
Companies Act 1985.
(Z) The "Trust" means any trust for the benefit of, inter alia,
employees of the Group, from time to time designated by the
Committee.
(AA) The "Trustee" means the trustee or trustees for the time being of
the Trust or, if there is more than one, the trustee or trustees of
the Trust nominated by the Committee.
1.2 Construction
(A) Where the context so admits, any reference in the Plan to the
singular includes the plural and vice versa.
(B) Any reference in the Plan to an enactment includes the enactment as
for the time being amended or re-enacted.
(C) The headings to the Rules are for reference purposes only and shall
not affect the meaning or construction of the Rules.
3
1.3 Governing law
This Plan and any Award granted under it is governed by, and is to be
construed in accordance with, English law.
2. ELIGIBILITY
(A) The persons who are eligible to receive Awards are such Employees as
have been invited by the Committee to participate in the Plan and
who have agreed in writing to do so.
(B) Where an individual is to be offered participation in the Plan such
invitation will specify the percentage of the individual's
anticipated annual cash bonus and any other applicable cash bonus
which that individual may choose to defer and the proposed period of
such deferral. The amount which an individual so defers is referred
to in these Rules as the "Deferred Amount".
(C) To the extent that an individual chooses to defer a cash bonus, the
individual will not become entitled to receive that bonus on the
date on which the individual would otherwise have become entitled to
it. Instead the individual will only become entitled to receive that
cash bonus on the date referred to in Rule 4.2 (or such earlier date
as is provided in the Rules).
(D) In circumstances considered by the Committee to be appropriate
including, without limitation, where an individual is not entitled
to receive a cash bonus, Awards may be made on the basis of a
notional bonus determined by the Committee.
3. GRANT OF AWARDS
3.1 Operation of the Plan
(A) The Committee shall decide whether or not to operate the Plan in
relation to any period, whether Bonus Share Awards and Matching
Awards should be granted and whether such Awards should be granted
by the Company or the Trustee.
(B) All Awards must, save in circumstances determined by the Committee
to be exceptional, be granted as soon as is reasonably practicable
after the announcement of the Group's results for any period to the
London Stock Exchange.
(C) The Committee may determine that Matching Awards should be granted
on terms that they are subject to performance conditions, relating
to the underlying financial or other performance of the Company,
which must be satisfied before
4
such Awards vest and/or such other terms or conditions as the
Committee may determine (together "Conditions").
(D) The Committee shall ensure that the Plan is not operated at any
time, or in any circumstances, when to do so would contravene the
provisions of the Criminal Justice Act 1993, the Company's share
dealing code, the Listing Rules of the London Stock Exchange or any
other applicable laws or regulations.
3.2 Grant of Awards
(A) If Awards are to be granted by the Trustee, the Committee must
notify the Trustee of:
(i) the Employees eligible to participate in the Plan;
(ii) the Bonus Share Awards and Matching Awards which the Committee
recommends be granted to the Employee;
(iii) any Conditions which the Committee recommends should be
attached to Matching Awards
and, if the Trustee agrees to the Plan being operated in
relation to that period and those individuals, the Trustee
will grant Bonus Share Awards and Matching Awards to each
relevant Employee, in the case of a Matching Award on such
Conditions.
(B) If Awards are to be granted by the Company, the Company will grant
Bonus Share Awards and Matching Awards to each relevant Employee, in
the case of the Matching Award on those Conditions.
(C) If the Committee so determines, Matching Awards may be granted in
the form of options granted under the Rules of the Group Share Plan.
In those circumstances, that Matching Award may only be exercised in
accordance with and subject to the Rules of the Group Share Plan and
will lapse in the circumstances set out in the Group Share Plan. The
remaining provisions of these Rules, to the extent inconsistent with
the Rules of the Group Share Plan, will not apply to any such
Matching Award.
(D) Each Employee who receives an Award will be given written notice of
the Award and of any Conditions applying to the Matching Award.
3.3 Value of Bonus Share Awards
(A) Each Bonus Share Award shall have a cash value determined by the
Committee as a proportion of the cash bonus earned by the relevant
individual (or the
5
notional cash bonus determined by the Committee) in relation to a
specified period.
(B) The maximum number of Shares which a Participant may, subject to
Rule 4, acquire on vesting of a Bonus Share Award shall be
calculated by dividing the cash value of the Bonus Share Award by
the market value of a Share, as determined in accordance with Rule
3.5.
3.4 Value of Matching Awards
The number of Shares which are subject to the option represented by each
Matching Award shall be the number of Shares which is obtained by dividing
twice the Deferred Amount by the market value of a Share, as determined in
accordance with Rule 3.5, rounded down to the nearest whole number.
3.5 Market value
The "market value" of a Share for the purpose of Rules 3.3 and 3.4 is the
arithmetic average of the Market Prices, for the three Dealing Days
immediately before the Date of Grant or over such other period or periods
as the Committee may determine either generally or in any particular case.
3.6 Shares comprised in an Award
Participants will have no entitlement to or in respect of any Share
comprised in an Award until that Award vests or is exercised. In
particular, but without limitation, Participants will have no entitlement
to receive dividends in respect of such Shares or to exercise any other
rights in respect of them until the relevant Bonus Share Award vests or
the relevant Matching Award is exercised.
3.7 Adjustment
(A) In the circumstances mentioned in Rule 3.7(D), the Grantor may
change the Conditions imposed under Rule 3.1(C).
(B) The power to change includes both the power to adjust and also the
power to impose replacement Conditions.
(C) The Grantor's power is, however, restricted as follows -
(i) the change must not have the effect of making the Conditions
more onerous than they were immediately before the
circumstance in question, and
(ii) the change must not be made unless the Auditors (acting as
experts and not as arbitrators) have confirmed in writing to
the Committee (and to
6
the Trustee where the Award was made by the Trustee) that, in
their opinion, it is fair and reasonable, and
(iii) where the Award was made by the Trustee, the Committee has
approved the change.
(D) The circumstances are -
(i) any variation of the Company's capital,
(ii) such circumstances as were specified when the Award was
granted, and
(iii) any event or events as a result of which the Committee
considers it fair and reasonable to change the Conditions.
4. VESTING OF AWARDS
4.1 General
The extent to which an Award vests is to be determined by the Committee
(with the consent of the Trustee, if the Trustee is the Grantor) in
accordance with the following provisions of this Rule 4.
4.2 Deferred Amount
The Deferred Amount will become due at the end of the period of deferral
referred to in Rule 2(B) unless the Deferred Amount has ceased to be
payable in accordance with Rule 5.
4.3 Vesting of Bonus Share Awards
Bonus Share Awards will vest on such date or dates as may be determined by
the Grantor on or before the Date of Grant, unless they have previously
lapsed in accordance with the Rules.
4.4 Vesting of Matching Awards
Matching Awards will vest and become exercisable on the later of:
(i) the date or dates specified by the Grantor on or before the
Date of Grant; and
(ii) the date on which the Committee determines that any Conditions
imposed in accordance with Rule 3.1(C) have been satisfied,
unless they have previously lapsed in accordance with the Rules.
7
4.5 Notification to Participant
The Committee shall notify Participants as soon as reasonably practicable
that their Awards have vested.
5. RESTRICTIONS UPON VESTING
5.1 General
(A) This Rule 5 overrides the other Rules.
(B) If an Award lapses under any Rule, it will lapse for all purposes
and will not vest.
5.2 Satisfaction of Conditions
(A) If Conditions are imposed on Matching Options under Rule 3.1(C) the
Participant may not exercise that Matching Option except in
accordance with those Conditions.
(B) Rule 5.2(A) does not apply, however, if -
(i) the Committee considers that it is unlikely that the
Conditions will be satisfied in the reasonably foreseeable
future because of some unforeseen event or events, and
(ii) the Committee does not consider that it is appropriate to
change the Conditions in accordance with Rule 3.7, and
(iii) the Committee considers that it is fair and reasonable to
allow the Participant to exercise that Matching Option,
in each case following consultation with the Trustee, if the Option
was granted by the Trustee.
5.3 Meaning of "ceasing to be employed"
(A) Unless the Committee decides otherwise, a Participant shall for the
purposes of these Rules be treated as having ceased to be employed
within the Group on whichever is the earliest of the following -
(i) the date on which the Participant gives notice ending the
Participant's employment with the Group,
(ii) the date on which the Participant is given notice ending the
Participant's employment with the Group, and
8
(iii) the date on which the Participant's employment with the Group
otherwise ends without notice.
(B) A Participant's employment with the Group will, if the Grantor so
determines on or before the grant of an Award, be deemed for the
purpose of this Rule 5.3 not to end if on cessation of employment
with a member of the Group the Participant becomes or is to become
an employee or director of (i) a Holding Company of the Company; or
(ii) a company holding not less than 25 per cent. of the issued
ordinary share capital of the Company; or (iii) a Holding Company or
Subsidiary of any Company referred to in (ii) or any other company
that is a Subsidiary of the Holding Company of any such Holding
Company. If the Grantor so determines, that fact shall be set out,
or referred to, in the Option Certificate.
5.4 Cessation of employment
(A) If a Participant ceases to be employed within the Group the
Participant's Deferred Amount will, subject to Rule 5.4(D), become
due on the date on which employment ceases.
(B) If a Participant ceases to be employed within the Group in any
circumstance where the Committee so agrees, the Participant's Award
or Awards will vest and become exercisable if and to the extent that
the Committee so determines and subject to such conditions and on
such date(s) or for such period as the Committee may determine.
(C) Where a Participant ceases to be employed in any other
circumstances, any Award held by the Participant which has not then
vested will lapse immediately. Any Matching Award which has vested
but has not been exercised will be exercisable for a period of six
months (or such longer period as the Committee may allow) from the
date of cessation of employment and if not so exercised during that
period will lapse.
(D) Notwithstanding any provision of the Plan to the contrary, if the
Committee determines, after full consideration of the facts
presented on behalf of the Company and a Participant, that the
Participant has:
(i) been engaged in fraud, embezzlement or theft or has committed
a criminal offence or other dishonesty in the course of the
Participant's employment by or involvement with a member of
the Group, which has damaged any member of the Group; or
(ii) made unauthorised disclosure of trade secrets or other
proprietary information of any member of the Group or of a
third party who has entrusted such information to any member
of the Group; or
9
(iii) materially breached any non-competition covenant of the
Participant in favour of any member of the Group; or
(iv) violated the Code of Ethics adopted by the Company from time
to time,
any Award held by the Participant shall lapse, whether
or not that Award has already vested and the Participant
shall have no further rights in relation to any such
Award under the Plan. Any Deferred Amount which has not
already been paid (even if it has become due) will cease
to be due and will not be paid.
6. CHANGE IN CONTROL AND LIQUIDATION
6.1 If a person:
(A) obtains Control of the Company -
(i) as a result of making a general offer to acquire the whole of
the issued share capital of the Company (or such part of it as
is not already owned by it and/or by its holding company
and/or by its Subsidiaries or those of its holding company)
made on a condition such that if it is satisfied the acquiring
company will have Control of the Company, or
(ii) as a result of making a general offer to acquire all the
Shares (or such of the Shares as are not already owned by it
and/or by its holding company and/or by its Subsidiaries or
those of its Holding Company).
(B) obtains Control of the Company as a result of a compromise or
arrangement sanctioned by the court under section 425 of the
Companies Act 1985.
(C) becomes entitled to give notice to Shareholders under sections 428
to 430F of the Companies Act 1985
then, subject to Rule 7, in each such case:
- all Deferred Amounts will become due on the date on which that
person obtains Control or becomes so entitled (the "Relevant
Date"); and
- all Bonus Share Awards which have not then vested or lapsed
will, on the Relevant Date, vest in proportion to the period
which has elapsed between the Date of Grant and the vesting
date(s) specified in accordance with Rule 4.3; and
- all other Awards will lapse on the Relevant Date.
6.2 When an effective resolution is passed or an order is made for the
winding-up of the Company:
10
- all Deferred Amounts will become due on the date on which that
resolution is passed or order made;
- all Bonus Share Awards which have not then vested or lapsed
will vest on that date in proportion to the period which has
elapsed between the Date of Grant and the vesting date(s)
specified in accordance with Rule 4.3; and
- all other Awards will lapse on that date.
7. REPLACEMENT AWARDS
7.1 Application
(A) This Rule 7 applies where a company (the "acquiring company")
obtains Control of the Company -
(i) as a result of making a general offer to acquire the whole of
the issued share capital of the Company (or such part of it as
is not already owned by it and/or by its holding company
and/or by its Subsidiaries or those of its holding company)
made on a condition such that if it is satisfied the acquiring
company will have Control of the Company, or
(ii) as a result of making a general offer to acquire all the
Shares (or such of the Shares as are not already owned by it
and/or by its holding company and/or by its Subsidiaries or
those of its holding company).
(B) It also applies if the acquiring company obtains Control of the
Company as a result of a compromise or arrangement sanctioned by the
court under section 425 of the Companies Act 1985.
(C) It also applies if the acquiring company becomes bound or entitled
to acquire shares in the Company under sections 428 to 430F of the
Companies Act 1985.
7.2 Release of Options
With the agreement of the acquiring company and subject to the conditions
in Rule 7.3, a Participant may release any outstanding Matching Option
(the "old option") in consideration of the grant to him of another option
(the "new option").
7.3 The conditions
(A) The release and grant must happen within the period mentioned in
Rule 7.4.
(B) The total market value of the Shares subject to the old option
immediately before the release must be equal to the total market of
the shares subject to the
11
new option immediately after the release. For this purpose, market
value shall be determined by the Committee.
(C) The aggregate exercise price of the new option must be equal to the
aggregate exercise price of the old option.
7.4 Period for release
(A) In a case falling within Rule 7.1(A), the period is six months
starting with the time when the acquiring company obtains Control of
the Company and any condition subject to which the offer is made is
satisfied or waived.
(B) In a case falling within Rule 7.1(B), the period is six months
starting with the time when the court sanctions the compromise or
arrangement.
(C) In a case falling within Rule 7.1(C), it is the period during which
the acquiring company remains bound or entitled to acquire shares in
the Company.
7.5 Consequences of release
(A) This Rule 7.5 applies where a Participant is granted a new option in
accordance with this Rule 7.
(B) The new option is exercisable in the same manner as the old option
and the new option is subject to the provisions of the Rules as they
had effect in relation to the old option immediately before its
release.
(C) The Rules are to be construed in relation to the new option as if
references to Shares were references to the shares in respect of
which the new option is granted.
(D) The Rules are to be construed in relation to the new option as if
references to the Company were references to the company in respect
of whose shares the new option is granted.
7.6 Bonus Share Awards and Deferred Amounts
Where a Participant holds a Bonus Share Award or has a right to receive a
Deferred Amount, the Participant may agree to release any right to a Bonus
Share Award or right to receive a Deferred Amount in exchange for the
grant to the Participant of another share award or rights to another
deferred amount. In such case the provision of this Rule 7 shall apply to
such release and regrant with any necessary consequential amendments.
12
8. PROCEDURE ON VESTING
8.1 Exercise of Matching Awards
(A) To exercise a Matching Award, a Participant must give written notice
to the Company (where the Option was granted by the Trustees, as
agent for the Grantor) in such form, and with such other documents,
as the Committee may decide.
(B) Subject to Rule 8.1(C) and unless a later date is specified in the
notice of exercise, the date on which the notice of exercise,
complete in all respects, together with the payment due on exercise,
is received at such office as the Grantor may specify is the date of
exercise.
(C) Where the notice is sent by pre-paid post, the Grantor (following
consultation with the Committee where the Option was granted by the
Trustees) may accept that the date of posting, as evidenced by the
postmark on the envelope or in such other manner as the Grantor may
decide, or any later date prior to the date on which the notice of
exercise is received at such office, is the date of exercise.
8.2 Issue or transfer of Shares
(A) Within 30 days of the date on which a Bonus Share Award vests or a
Matching Award is exercised the Company will issue (or procure the
transfer) or (where the Award was granted by the Trustee) the
Trustee will transfer, to the Participant or at the Participant's
direction the number of Shares which have vested.
(B) This obligation is, however, subject to Rules 8.4 and 8.5.
(C) It is also subject to obtaining such consents or approvals as may be
required by any competent authority under regulations or enactments
for the time being in force. It is the responsibility of the
Participant to obtain such consents and approvals.
(D) Any stamp duty payable on the transfer of Shares under an Award
shall be paid by the Company.
8.3 Payment of Deferred Amount
Within 30 days of the date on which a Deferred Amount becomes due the
Company will, subject to Rule 8.4, pay or procure the payment of the
Deferred Amount to the Participant or at the Participant's direction.
13
8.4 Withholding obligations
(A) This Rule 8.4 applies if a Participant is liable to tax, duties or
other amounts on the vesting of an Award or the delivery of Shares
under it or the payment of the Deferred Amount and the Participant's
employer or former employer is liable to make a payment to the
appropriate authorities on account of that liability.
(B) Where a Bonus Share Award has vested or a Matching Award is
exercised either the Company or the Trustee will sell on behalf of
the Participant sufficient of the Shares which would otherwise be
issued or transferred to the Participant on that vesting or exercise
so that the net proceeds of sale equal the payment which the
employer or former employer is required to pay to the appropriate
authorities on behalf of the Participant or will make the necessary
deduction(s) from the Deferred Amount. Where such Shares are sold by
the Trustee, the Trustee will account to the employer or former
employer for the net proceeds of sale. The Company will procure that
an amount equal to the net proceeds of sale is remitted to the
appropriate authorities on behalf of the Participant.
(C) Rule 8.4(B) shall not apply, however, if the Participant makes
alternative arrangements to the satisfaction of the Participant's
employer or former employer.
(D) The Company or Trustee need not sell the Shares referred to in Rule
8.4(B) in whole or in part and may either not issue such Shares or
may retain them as assets of the Trust provided that an amount equal
to the payment required to be made to the appropriate authorities is
made by the Company or is accounted for by the Trustee to the
employer or former employer, derived from the other assets of the
Company or the Trustee, as the case may be.
8.5 Provision of Shares
(A) If and to the extent that a Bonus Share Award granted by the Trustee
vests or a Matching Award is exercised in accordance with the Rules
and
(i) the Trustee is unable to transfer Shares to the Participant,
whether due to it holding insufficient Shares or other assets
to enable it to meet the Bonus Share Award or Matching Award
or otherwise; or
(ii) any such transfer or payment would be unlawful in any relevant
jurisdiction; or
(iii) in making such a transfer or payment the Trustee would be in
breach of its duties under the Trust,
the obligations of the Trustee under the Plan and the Award shall
lapse.
14
(B) If the obligations of the Trustee so lapse, the Company shall
procure that any Shares not so transferred by the Trustee to which
the Participant is entitled under the Rules (ignoring Rule 8.5(A))
(or an amount equal to the proceeds of the sale of such number of
Shares) are issued by the Company or transferred to the relevant
Participant, either by the Trustee or by some other person, as soon
as reasonably practicable.
9. NON-TRANSFERABILITY OF AWARDS
(A) An Award is personal to the Participant and the Participant's
personal representatives.
(B) If a Participant transfers, assigns, charges, encumbers or otherwise
alienates an Award or creates in favour of any third party any
interest therein or, in any case, attempts so to do, or a bankruptcy
order is made in respect of the Participant (or any similar event
occurs under the laws of any other country), the Award shall lapse.
10. LOSS OF OFFICE
(A) The participation in the Plan by a Participant is a matter entirely
separate from, and shall not affect, the Participant's pension
rights and terms of employment.
(B) In particular (but without limitation), if a Participant for any
reason whatsoever ceases to be employed by a member of the Group
(whether or not such cessation involves breach, or alleged breach,
of contract by the Company) or to be entitled to exercise an Award,
the Participant is not entitled to any rights or benefits under the
Plan save as specifically provided elsewhere in these Rules and is
not entitled to any compensation by reference to the rights granted
to, or the benefits capable of being received by, the Participant
under this Plan or for any loss or diminution in value in such
rights or benefits.
11. VARIATION OF CAPITAL
11.1 General
This Rule 11 applies if there is a variation in the share capital of the
Company or in the event of a demerger or a special dividend by the Company
or upon the happening of any other event as a result of which the Grantor
(with the consent of the Committee where the Grantor is the Trustees)
considers that it is appropriate to do so.
11.2 Adjustment of Awards
(A) Subject to the rest of this Rule 11, the Grantor shall adjust each
Bonus Share Award or Matching Award in such manner as it decides to
be appropriate, with the consent of the Committee where the Grantor
is the Trustee.
15
(B) For the avoidance of doubt, the Grantor may make such adjustments to
such an Award which has vested or been exercised but in respect of
which Shares have not yet been transferred.
(C) The Grantor's decision shall be final and binding on each
Participant.
11.3 Restrictions on adjustment
Before making the adjustment, the Grantor must obtain the written
confirmation of the Auditors (acting as experts and not as arbitrators)
that the adjustment is, in their opinion, fair and reasonable.
11.4 Notification of adjustment
The Grantor must notify each Participant of any adjustment to an Award as
soon as reasonably practicable after the decision.
12. GENERAL
12.1 Administration
(A) Save as otherwise provided in the Rules, the Committee shall
administer the Plan.
(B) The Committee may from time to time make and amend such regulations
for the implementation and administration of Plan as it thinks fit.
(C) The Committee's decision on the construction of the Rules and on any
disputes arising under the Plan shall be final and binding on all
persons.
12.2 Costs and expenses
The costs of the preparation and operation of this Plan shall be borne by
the Company and the Subsidiaries in such proportions as the Committee from
time to time determines.
12.3 Power of amendment
(A) The Committee may at any time and from time to time amend the Plan
in any respect provided that:
(i) subject to Rule 12.3(B), no amendment may be made to the
advantage of Employees or Participants to any provision of the
Rules relating to:
(a) the persons to whom or for whom Shares are provided
under the Plan;
16
(b) limitations on the number or amount of Shares subject to
the Plan;
(c) the maximum entitlement for any one Participant; or
(d) the basis for determining a Participant's entitlement
to, and the terms of, Shares and for the adjustment
thereof,
without the prior approval of the Company in general meeting.
(ii) no amendment shall be made which would affect adversely any of
the subsisting rights of a Participant except either with the
Participant's consent in writing or the consent of the
majority of the Participants affected by the amendment or
addition.
(B) Notwithstanding the limitation contained in Rule 12.3(A), the
Committee may without the prior approval of the Company in general
meeting:
(i) amend the Plan in order to take account of any amendments to
any applicable legislation or to obtain or maintain favourable
tax, exchange control or regulatory treatment for Participants
or any member of the Group; or
(ii) make minor amendments to the Plan to benefits its
administration.
(C) The Committee must give written notice to all Participants of any
amendment made in accordance with this Rule 12.3 which affects their
rights in any material respect.
12.4 Grant of Options
(A) The Committee may determine in any particular case or from time to
time that the Plan should be operated on the basis that, in place of
Bonus Share Awards, Participants are granted options by the Company
or the Trustee entitling them to acquire the number of Shares that
would otherwise have been comprised in the relevant Bonus Share
Award.
(B) Any such option shall be exercisable for such period as the
Committee may determine following satisfaction of any conditions
imposed in accordance with Rule 3.1(C).
(C) The provisions of the Rules shall apply mutatis mutandis to any such
options and the Committee may make such amendments to the Rules as
may be necessary in order to implement the grant and exercise of any
such options.
17
12.5 Termination
The Committee may at any time suspend or terminate the operation of this
Plan and in such event no further Awards will be made for the time being
or, as the case may be, permanently but in all other respects the
provisions of this Plan shall remain in force.
13. PLAN LIMITS
13.1 General
(A) The Committee must ensure that the nominal amount of Shares issued
(whether directly to the Participant or to the Trustee) under the
Plan on any date does not exceed 10 per cent. of the nominal amount
of the Company's issued equity share capital on the day before the
date of issue, less the total nominal amount of -
(i) Shares issued on the exercise of options granted within the
previous 10 years under any share option scheme,
(ii) Shares remaining issuable in respect of options granted on the
same date or within the previous 10 years under any share
option scheme, and
(iii) Shares issued on the same date or within the previous 10 years
under any share incentive scheme in respect of moneys made
available by the Group.
(B) For the purposes of this Rule 13 -
(i) "equity share capital" has the meaning given to it by section
744 of the Companies Act 1985,
(ii) the word "issue" means, in relation to Shares, the allotment
and issue of Shares forming part of the authorised but
unissued share capital of the Company and derivative
expressions are to be construed accordingly,
(iii) a "share incentive scheme" is the Plan and any other scheme
(other than a share option scheme) for employees of the Group
which has been approved by the Company in general meeting and
provides for the subscription of Shares, and
(iv) a "share option scheme" is the Group Share Plan and any other
share scheme (other than a share incentive scheme) for
employees of the Group which has been approved by the Company
in general meeting and provides for the grant of options to
employees to acquire Shares.
18
13.2 Life of Plan
No Awards may be granted more than 10 years after the first grant of
Awards.
14. NOTICES
14.1 To Employees and Participants
(A) Any notice or document to be given to any Employee or Participant
may be given through normal internal communications or by personal
delivery or by sending it by ordinary post to the individual's last
known address or by e-mail or other electronic transmission.
(B) Where a notice or document is sent by post it shall be deemed to
have been received 72 hours after it was put into the post properly
addressed and stamped.
(C) All notices and documents sent by post will be sent at the risk of
the Employee or Participant concerned. Neither the Company nor any
of its Subsidiaries nor the Trustee shall have any liability
whatsoever to any Employee or Participant in respect of any notice
or document sent, nor shall the Company or any of its Subsidiaries
or the Trustee be concerned to see that any Employee or Participant
actually receives it.
14.2 To the Company
Any notice or document given by an Employee or a Participant to the
Company or the Committee shall be delivered or sent to the Company at its
registered office, marked for the attention of the Company Secretary (or
at such other place or places as the Committee may from time to time
determine and notify to Employees and Participants) and be effective upon
receipt. Notices may be sent by e-mail or other electronic transmission to
such address as the Company may from time to time specify.
14.3 To the Trustee
Any notice or document given by an Employee or a Participant to the
Trustee shall be delivered or sent to the Trustee, care of the Company at
its registered office (or at such other place or places as the Trustee may
from time to time determine and notify to Employees and Participants), and
be effective upon receipt.