Exhibit 10.2
AMENDED AND RESTATED
CARNIVAL PLC 2005 EMPLOYEE SHARE PLAN
(As adopted by the board of directors of Carnival plc on 18 January 2005 and
approved by shareholders of Carnival plc in general meeting on 13 April 2005;
amended by the Compensation Committee of the board of directors on 5 July 2005)
1. PURPOSE
The purpose of the Plan is to provide a means through which each member of the
plc Group may attract able persons to enter and remain in the employ of members
of the plc Group and to provide a means whereby employees and executive
directors of each member of the plc Group can acquire and maintain Share
ownership, or be paid incentive compensation measured by reference to the value
of Shares, thereby strengthening their commitment to the welfare of the members
of the plc Group and promoting an identity of interest between shareholders and
these persons. It is intended that the Plan will be an employees' share scheme
within the meaning of section 743 of the Companies Act 1985.
The Plan provides for the granting of Options (Incentive Share Options,
Nonqualified Share Options, Unapproved Options and Approved Options), Restricted
Shares and Restricted Share Units to eligible employees. Inland Revenue Approved
Options may be granted under an Appendix to the Plan approved by the Inland
Revenue.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan;
ADRs means American Depositary Receipts evidencing American Depositary Shares
deposited by the Company with a depositary pursuant to a depositary agreement;
Affiliate means:
(a) any entity that directly or indirectly is Controlled by, Controls or is
under common Control with the Company or Carnival Corporation; and
(b) to the extent provided by the Committee, any entity in which the Company or
Carnival Corporation has a significant equity interest.
Approved Option means an Option granted under an Inland Revenue approved share
plan contained in the Appendix to this Plan;
Award means, individually or collectively, any Incentive Share Option,
Nonqualified Share Option, Unapproved Option, Approved Option, Restricted Share
Award or Restricted Share Unit Award;
Award Agreement means a Share Option Agreement, Restricted Share Agreement or
Restricted Share Unit Agreement;
Board means the board of directors of the Company;
Capital Reorganisation means any variation in the share capital or reserves of
the Company (including, without limitation, by way of capitalisation issue,
rights issue, sub-division, consolidation, or reduction);
Carnival Corporation means Carnival Corporation, a corporation organised under
the laws of the Republic of Panama;
Cause means a member of the plc Group having a right to terminate a
Participant's employment summarily either in accordance with the terms of the
Participant's contract of employment with that member or otherwise at common law
including without limitation:
(a) the determination by the Committee that the Participant has ceased to
perform his duties to a member of the plc Group (other than as a result of
his incapacity due to physical or mental illness or injury), which failure
amounts to an intentional and extended neglect of his duties to his
employer;
(b) the Committee's determination that the Participant has engaged or is about
to engage in wilful misconduct or conduct which causes or may reasonably
be expected to cause substantial damage to a member of the plc Group;
(c) the Participant having been convicted of, or pleaded guilty to, an offence
involving as a material element fraud or dishonesty; or
(d) the failure of the Participant to follow the lawful instructions of the
Board or any of his superiors;
Change of Control means the occurrence of any of the following:
(a) a person (either alone or together with any person acting in concert with
him) obtaining Control of the Company as a result of a general offer or
otherwise for the whole of the share capital of the Company (other than
those shares which are already owned by him and/or any person acting in
concert with him);
(b) a person (either alone or together with any person acting in concert with
him) acquiring 50% or more (on a fully diluted basis) of either:
(i) the then outstanding Shares taking into account as outstanding for
this purpose such Shares as are issuable upon the exercise of
options or warrants, the conversion of convertible shares or debt
and the exercise of any similar right to acquire such Shares (the
"Outstanding Shares"); or
(ii) the combined voting power of the then outstanding voting shares or
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Plan, the following
acquisitions shall not constitute a Change of Control:
(A) any acquisition by the Company or any Affiliate,
(B) any acquisition by any employee benefit plan sponsored or
maintained by the Company or any Affiliate,
(C) any acquisition by Marilyn B. Arison, Micky Arison, Shari
Arison, Michael Arison or their spouses or lineal descendents,
any trust established for the benefit of any of the
aforementioned Arison family members, or any person directly
or indirectly controlling, controlled by or under common
control with any of the aforementioned Arison family members
or any trust established for the benefit of any of the
aforementioned Arison family members or any charitable trust
or non-profit entity established by any person or entity
described in this sub-paragraph (C); or
(D) any acquisition by any person which falls within the proviso
to paragraph (e) below or sub-paragraphs (i), (ii) and (iii)
of paragraph (h) below;
and for the purposes of this Plan an event falling within sub-paragraphs
(a) or (b) of this definition shall be referred to as an Acquisition;
(c) individuals who, on the date this Plan is approved by shareholders in
general meeting, constitute the board of directors of the Company (the
"Incumbent Directors") ceasing for any reason to constitute at least a
majority of the board, provided that any person who becomes a director
subsequently and whose election or nomination for election was approved by
a vote of at least two-thirds of the Incumbent Directors then on the board
(either by a specific vote of the directors or by approval of the proxy
statement or annual report and accounts of the Company in which such
person is nominated for election by shareholders, without written
objection to such nomination) shall be an Incumbent Director; and for the
purposes of this Plan an event falling within this sub-paragraph (c) shall
be referred to as a Board Change;
(d) a person becoming bound or entitled to give notice under sections 428 to
430F of the Companies Act 1985 to acquire Shares (a "Compulsory
Acquisition Procedure");
(e) a Court directing that a meeting of the holders of Shares be convened
pursuant to section 425 of the Companies Act 1985 for the purposes of
considering a scheme of arrangement of the Company or its amalgamation
with any other company or companies and the scheme of arrangement being
approved by the shareholders' meeting or sanctioned by the Court (as the
Committee may determine) (the "Relevant Condition") provided, however,
that the Committee may determine that the scheme of arrangement shall not
constitute a Change of Control if the purpose and effect of the scheme of
arrangement is to create a new holding company for the Company, such
company having substantially the same shareholders with the same
proportionate shareholdings as the Company had immediately prior to the
scheme of arrangement, and for the purposes of this Plan an event falling
within this sub- paragraph (e) shall be referred to as a Scheme of
Arrangement;
(f) notice being duly given of a resolution for the voluntary winding-up of
the Company (a "Voluntary Winding Up");
(g) the sale, transfer or other disposition of all or substantially all of the
business or assets of the Company (a "Sale"); or
(h) the completion of a reorganization, recapitalization, merger,
consolidation, share exchange or similar form of corporate transaction
involving the Company that requires the approval of the Company's
shareholders, whether for such transaction or the issuance of securities
in the transaction (a "Business Combination"), unless immediately
following such Business Combination:
(i) more than 50% of the total voting power of:
(A) the company or body corporate resulting from such Business
Combination (the "Surviving Company"); or
(B) if applicable, the ultimate parent company or body corporate
that directly or indirectly has beneficial ownership of
sufficient voting securities eligible to elect a majority of
the directors of the Surviving Company (the "Parent Company"),
is represented by the Outstanding Company Voting Securities
that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into
which the Outstanding Company Voting Securities were converted
pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same
proportion as the voting power of the Company's Voting
Securities among the holders thereof immediately prior to the
Business Combination,
(ii) no person, is or becomes the beneficial owner, directly or
indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Parent Company (or, if there is no Parent Company, the Surviving
Company); and
(iii) at least a majority of the members of the board of directors of the
Parent Company (or, if there is no Parent Company, the Surviving
Company) following the completion of the Business Combination were
members of the board of directors of the Company at the time of the
board's approval of the execution of the initial agreement providing
for such Business Combination
and for the purposes of this Plan a transaction falling within this
sub-paragraph (h) shall be referred to as a Corporate Transaction;
Code means the United States Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section;
Combined Group means the plc Group and Carnival Corporation and any subsidiary
of Carnival Corporation as that term is defined in section 736 of the Companies
Act 1985;
Committee means the Compensation Committee of the board of directors. Unless the
Board determines otherwise, each member of the Committee shall, at the time he
takes any action with respect to an Award under the Plan, be an Eligible
Director. However, the mere fact that a Committee member shall fail to qualify
as an Eligible Director shall not invalidate any Award which is otherwise
validly granted under the Plan;
Company means Carnival plc, a company incorporated under the laws of England and
Wales;
Control has the meaning given to it by section 840 of ICTA;
Date of Grant means the date on which the granting of an Award is authorized, or
such other date as may be specified in such authorization or, if there is no
such date, the date indicated on the applicable Award Agreement;
Dealing Day means any day on which the London Stock Exchange is open for the
transaction of business;
Discretionary Share Plan means an Employee Share Plan in which participation is
solely at the discretion of the Board including the P&O Princess Cruises
Deferred Bonus & Co-Investment Matching Plan;
Effective Date means the date on which the Plan is approved by the Company's
shareholders in general meeting;
Eligible Director means a person who is a "non-employee director" within the
meaning of Rule 16b-3 under the Exchange Act, or a person meeting any similar
requirement under any successor rule or regulation;
Employee means any employee (including an executive director) of a member of the
plc Group whose terms of service require him to devote substantially the whole
of his working time to the affairs of a member of the Combined Group;
Employee Share Plan means any share option plan or other employees' share
incentive plan established by the Company including the P&O Princess Cruises
Deferred Bonus & Co-Investment Matching Plan;
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended;
Fair Market Value means, on a given date:
(a) for so long as the Shares are traded on the London Stock Exchange, the
closing middle market quotation for a Share as derived from the Daily
Official List of the London Stock Exchange for that day; or
(b) subject to (a) above, its market value determined in accordance with Part
VIII of the Taxation of Chargeable Gains Act 1992 and in the case of any
Award under which Shares are to be issued, the nominal value of a Share;
ICTA means the United Kingdom Income and Corporation Taxes Act 1988;
ITEPA means the United Kingdom Income Tax (Earnings and Pensions) Act 2003;
Incentive Share Option means an Option granted by the Committee to a US
Participant under the Plan which is designated by the Committee as an incentive
stock option as described in Section 422 of the Code and which otherwise meets
the requirements set forth herein;
the London Stock Exchange means London Stock Exchange plc or any successor body
thereto;
Nonqualified Share Option means an Option granted by the Committee to a US
Participant under the Plan, which is not designated by the Committee as an
Incentive Share Option;
Option means an Award granted under Section 7 being either an Incentive Share
Option, a Nonqualified Share Option, an Unapproved Option or an Approved Option;
Option Holder means any individual who holds a subsisting Option (including,
where the context permits, the legal personal representatives of a deceased
Option Holder);
Option Period means such period commencing on the Date of Grant and not
exceeding ten years, as the Committee may be determine under Section 7.6 in
respect of an Option or portions of an Option;
Option Price means the exercise price of an Option as described in Section 7.3;
Participant means an Employee who has been selected by the Committee to
participate in the Plan and to receive an Award;
Performance Goals means the performance objectives which may be established by
the Committee for the purpose of determining whether, and to what extent, Awards
will vest or be subject to a Restricted Period.
Plan means this Carnival plc 2005 Employee Share Plan, as amended from time to
time;
the plc Group means the Company and the Subsidiaries and member of the Group
shall be construed accordingly;
Registered Holder means any person or persons nominated by the Committee to hold
Restricted Shares on behalf of a Participant;
Relevant Period means in the case of:
(a) an Acquisition, the period of three months from the date of completion of
the acquisitions and if the acquisitions occur as a result of an offer
which is made subject to conditions, the period of three months from the
date when the offer becomes or is declared unconditional in all respects;
(b) a Board Change, the period of three months from the date that the relevant
majority no longer subsists;
(c) a Compulsory Acquisition Procedure, the period of 30 days from the date on
which a notice of compulsory acquisition is first issued;
(d) a Scheme of Arrangement, the period between the date of the Court's
direction and twelve noon on the day immediately preceding the date for
which the shareholders' meeting is convened or such longer period up to
the date on which the Court sanctions the Scheme of Arrangement as the
Committee may determine;
(e) a Voluntary Winding Up, the period of two months from the date the
resolution;
(f) a Sale, the period of three months from the date of completion of the
relevant transaction; and
(g) a Corporate Transaction, the period of three months from the date of
completion of the relevant transaction;
Restricted Period means, with respect to any Restricted Shares or any Restricted
Share Unit, the period of time determined by the Committee during which such
Award is subject to the restrictions set forth in Section 9 (unless
foreshortened pursuant to the rules of this Plan);
Restricted Shares means Shares issued or transferred to a Participant subject to
forfeiture and the other restrictions set forth in Section 9;
Restricted Share Award means an Award of Restricted Shares granted under Section
9;
Restricted Share Unit means a hypothetical investment equivalent to one Share
granted in connection with an Award made under Section 9;
Restricted Share Unit Award means an Award of Restricted Share Units granted
under Section 9;
Retirement means the cessation of a Participant's employment with a member of
the plc Group on or after the earlier of:
(a) age 65 with at least five years of service with a member of the plc Group;
or
(b) age 55 with at least 15 years of service with a member of the plc Group;
Retirement Age means age 55 for the purposes of paragraph 35A of Schedule 4 to
ITEPA;
Securities Act means the Securities Act of 1933, as amended;
Shares means fully paid and irredeemable ordinary shares in the capital of the
Company or shares representing those shares following any Capital
Reorganisation;
Share Option Agreement means any agreement between the Company and a Participant
who has been granted an Option pursuant to Section 7 which evidences the grant
of an Option and in the case of an Option granted by way of a share option
certificate, shall mean the share option certificate;
Subsidiary means any subsidiary of the Company, as defined in Section 736 of the
Companies Act 1985, of which the Company has Control;
UKLA means the United Kingdom Listing Authority;
Unapproved Option means an Option granted to a Participant other than a US
Participant under the Plan which is not designated by the Committee as an
Approved Option; and
Vested Unit shall have the meaning assigned to it in Section 9.12.
3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL
3.1 The Plan is effective as of the Effective Date, and the Plan was approved by
shareholders at a general meeting held on 13 April 2005 in a manner intended to
comply with the shareholder approval requirements of Sections 422(b)(1) of the
Code and the New York Stock Exchange.
3.2 The expiration date of the Plan, on and after which no Awards may be granted
hereunder, shall be the tenth anniversary of the Effective Date; provided,
however, that the administration of the Plan shall continue in effect until all
matters relating to Awards previously granted have been settled.
4. ADMINISTRATION
4.1 The Committee shall administer the Plan.
4.2 Subject to the provisions of the Plan and applicable law, the Committee
shall have the power, in addition to other express powers and authorizations
conferred on the Committee by the Plan, to:
(a) designate Participants;
(b) determine the type or types of Awards to be granted to a Participant;
(c) determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection
with, Awards;
(d) determine the terms and conditions of any Awards;
(e) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or
other property, or cancelled, forfeited or suspended and the method or
methods by which Awards may be settled, exercised, cancelled, forfeited or
suspended;
(f) determine whether, to what extent, and under what circumstances the
delivery of cash, Shares, other securities, other Awards, other property
and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee;
(g) interpret, administer, reconcile any inconsistency, correct any defect
and/or supply any omission in the Plan and any instrument or agreement
relating to, or Award granted under, the Plan;
(h) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of
the Plan; and
(i) make any other determination and take any other action specified under the
Plan or that the Committee deems necessary or desirable for the
administration of the Plan.
4.3 Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award or any documents evidencing Awards shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all parties, including, without limitation, each
member of the Combined Group, any Participant, any holder or beneficiary of any
Award, and any shareholder.
5. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
5.1 The Committee may, from time to time, grant Awards of Options, Restricted
Shares or Restricted Share Units to one or more Employees provided that no Award
to subscribe for Shares shall be granted to the extent that the aggregate number
of Shares that could be issued pursuant to that Award and any other Awards
granted at the same time when added to the number of Shares that:
(a) could be issued on the exercise of any other subsisting share options or
awards granted during the preceding ten years under the Plan or any other
Employee Share Plan; and
(b) have been issued on the exercise of any share options or awards granted
during the preceding ten years under the Plan or any other Employee Share
Plan; and
(c) have been issued during the preceding ten years under any Employee Share
Plan or any profit sharing or other employee share incentive plan
established by the Company;
would exceed 10% of the ordinary share capital of the Company for the time being
in issue.
5.2 Shares delivered by or on behalf of the Company in settlement of Awards may
be authorized and unissued Shares or Shares held in the treasury of the Company
or purchased on the open market or by private purchase.
5.3 Any member of the plc Group may provide money to the trustees 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 not prohibited by section 151 of the Companies Act 1985.
6. ELIGIBILITY
Participation shall be limited to Employees who have received written
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan.
7. TERMS OF OPTIONS
7.1 The Committee is authorized to grant one or more Approved Options,
Unapproved Options, Incentive Share Options or Nonqualified Share Options to any
Employee. Each Option so granted shall be subject to the conditions set forth in
this Section 7, or to such other conditions consistent with this Plan as may be
reflected in the applicable Share Option Agreement.
Option Price
7.2 The Option Price per Share for each Option shall be set by the Committee at
the Date of Grant but shall not be less than the Fair Market Value of a Share on
the Date of Grant and, if the Shares are to be issued, the nominal value of a
Share.
Manner of Exercise and Form of Payment
7.3 No Shares shall be delivered pursuant to any exercise of an Option until
payment in full of the Option Price therefor is received by the Company or the
Participant has made arrangements acceptable to the Company for the payment of
the Option Price. Options which have become exercisable may be exercised by
delivery of written notice of exercise to the Company accompanied by payment of,
or an undertaking to pay, the aggregate Option Price. The Option Price shall be
payable in cash.
Conditions of Grant
7.4 An Option may be granted subject to such conditions for payment of taxation,
employees' National Insurance contributions and employer's National Insurance
contributions liability as the Committee may determine (including without
limitation the right to sell on an Option Holder's behalf sufficient Shares to
satisfy any taxation or National Insurance contributions) and if any condition
is imposed relating to the assumption, payment or reimbursement by the Option
Holder of employer's National Insurance contributions liability, such conditions
shall comply with any applicable legislation or regulations and the Company
shall be entitled to waive in whole or in part the Option Holder's obligation in
respect of such liability.
Vesting, Option Period and Expiration
7.5 Subject to Sections 8 and 13, Options shall vest and become exercisable in
such manner and on such date or dates as the Committee may determine at the Date
of Grant and set out in a vesting schedule (a "Vesting Schedule") in the
applicable Share Option Agreement or share option certificate. The Committee may
determine that an Option may vest in full on one date only or may vest partially
as to different portions on different dates so that an Option may have one
Option Period or a number of Option Periods applying to determine when each
portion shall vest. Subject to Sections 8 and 13 Options shall lapse on the
earlier of:
(a) the expiry of the Option Period; and
(b) the Option Holder being declared bankrupt or entering into any general
composition with or for the benefit of his creditors including a voluntary
arrangement under the Insolvency Act 1986;
provided, however, that notwithstanding any vesting dates set by the Committee,
the Committee may, in its sole discretion, accelerate the exercisability of any
Option, which acceleration shall not affect the terms and conditions of such
Option provided for in this Plan other than with respect to exercisability. If
an Option is exercisable in instalments, such instalments or portions thereof
which vest and become exercisable shall remain exercisable until the Option
lapses but subject to any earlier lapse provisions under Sections 8 and 13.
Performance Goals
7.6 The Committee shall determine prior to the Date of Grant whether any
Performance Goals shall apply to the vesting of an Option and if so these shall
be set out in the applicable Share Option Agreement or share option certificate.
Other Terms and Conditions
7.7 Each Option granted under the Plan shall be evidenced by a Share Option
Agreement or a share option certificate. Immediately prior to the granting of
any Options, the Committee may, in its absolute discretion, enter into a deed
poll recording its intention to be bound by the share option certificates to be
issued to the Option Holder in respect of such Option. Except as specifically
provided otherwise in a Share Option Agreement or a share option certificate,
each Option granted under the Plan shall be subject to the following terms and
conditions:
(a) each Option or portion thereof that is exercisable shall be exercisable
for the full amount or for any part thereof;
(b) each Share acquired through the exercise of an Option shall be treated as
fully paid up at the time of issue or transfer. Each Option shall cease to
be exercisable, as to any Share, when the Participant acquires the Share
or when the Option lapses;
(c) subject to Sections 11.9 and 11.10, Options shall not be transferable by
the Participant except by will or the laws of inheritance and shall be
exercisable during the Participant's lifetime only by him;
(d) each Option shall vest and become exercisable by the Participant in
accordance with the Vesting Schedule established by the Committee and set
forth in the Share Option Agreement;
(e) at the time of any exercise of an Option, a Participant must take whatever
action is reasonably required by the Committee to ensure compliance with
applicable securities laws; and
(f) each Participant awarded an Incentive Share Option under the Plan shall
notify the Company in writing immediately after the date he makes a
disqualifying disposition of any Shares acquired pursuant to the exercise
of such Incentive Share Option. A disqualifying disposition is any
disposition (including any sale) of such Shares before the later of (i)
two years after the Date of Grant of the Incentive Share Option or (ii)
one year after the date the Participant acquired the Shares by exercising
the Incentive Share Option.
Incentive Share Option Grants to 10% Shareholders
7.8 Notwithstanding anything to the contrary in this Section 7, if an Incentive
Share Option is granted to a Participant who owns shares representing more than
ten percent of the voting power of all classes of shares of the Company or of a
Subsidiary or a parent of the Company, the Option Period shall not exceed five
years from the Date of Grant of such Option and the Option Price shall be at
least 110 percent of the Fair Market Value (on the Date of Grant) of the Shares
subject to the Option.
Time of Grant
7.9 The Committee shall not grant Options at any time when it would be
prohibited from doing so by the Model Code for Securities Transactions by
Directors of Listed Companies (or the Company's dealing code).
$100,000 Per Year Limitation for Incentive Share Options
7.10 To the extent the aggregate Fair Market Value (determined as of the Date of
Grant) of Shares for which Incentive Share Options are exercisable for the first
time by any Participant during any calendar year (under all plans of the
Company) exceeds $100,000, such excess Incentive Share Options shall be treated
as Nonqualified Share Options.
8. EXERCISE AND LAPSE OF OPTIONS - CESSATION OF EMPLOYMENT
8.1 Save as otherwise provided in these rules, an Option shall lapse
automatically on the Option Holder ceasing to be an employee of the plc Group
(whether lawfully or unlawfully).
8.2 Where an Option Holder ceases to be an employee of the plc Group before the
end of the Option Period by reason of his employment with a member of the plc
Group being terminated by a member of the plc Group without Cause or by the
Participant for any reason other than Retirement, the Option shall lapse on the
earlier of:
(a) the last day of the Option Period; and
(b) the date that is three months after the date of such termination;
provided, however, that any Participant whose employment with a member of the
plc Group is terminated and who is subsequently re-hired or re-engaged by a
member of the plc Group prior to the lapse of the Option shall not be treated as
if his employment had terminated.
In the event of a termination described in this Section 8.2, the Option shall
remain exercisable by the Participant until its lapse only to the extent the
Option was exercisable at the time of such termination.
8.3 Where an Option Holder ceases to be an employee of the plc Group before the
end of the Option Period by reason of his death or his disability (as determined
by the Committee) while still in the employment of a member of the plc Group, or
he dies following a cessation of employment described in this Section 8.2, the
Option shall lapse on the earlier of:
(a) the last day of the Option Period; and
(b) the date that is one year after the date of such death or cessation on
account of disability of the Participant, as applicable.
In such event, the Option shall remain exercisable by the Participant or his or
her personal representatives or beneficiaries determined in accordance with
Section 11, as applicable, until its lapse only to the extent the Option was
exercisable by the Participant at the time of such event.
8.4 Where the Participant ceases to be an employee of a member of the plc Group
by reason of Retirement prior to the end of the Option Period, the Option shall:
(a) lapse at the end of the Option Period; and
(b) continue vesting in accordance with the Vesting Schedule set forth in the
share option certificate or Share Option Agreement (as applicable),
without regard to any requirement that the Participant remain employed
with a member of the plc Group as a condition to vesting.
8.5 For the avoidance of doubt, an Option exercisable under Sections 8.2 to 8.4
may lapse at an earlier date by virtue of Section 13 and may not be exercised
after the expiry of the Option Period.
8.6 For the purposes of Sections 8.1 to 8.5 a female Option Holder shall not be
treated as ceasing to be an employee of a member of the plc Group if absent from
work wholly or partly because of pregnancy or confinement until she ceases to be
entitled to exercise any statutory or contractual right to return to work.
8.7 Where any exercise of an Option under Sections 8.2 to 8.5 would be
prohibited by law or the Model Code for Securities Transactions by Directors of
Listed Companies (or the Company's dealing rules) the period during which the
Option Holder may exercise his Options shall be extended by an additional period
equal to the length of the period of prohibition but not beyond the expiry of
the Option Period.
9. RESTRICTED SHARE AWARDS AND RESTRICTED SHARE UNIT AWARDS
Awards of Restricted Shares and Restricted Share Unit Awards
9.1 The Committee shall have the authority:
(a) to grant Restricted Share Awards and Restricted Share Unit Awards to
Employees;
(b) to issue or transfer Restricted Shares to Registered Holders on behalf of
Participants; and
(c) to establish terms, conditions and restrictions applicable to such
Restricted Shares and Restricted Share Units, including the Restricted
Period, which may differ with respect to each Participant, the time or
times at which Restricted Shares or Restricted Share Units shall become
vested and the number of Shares or units to be covered by each grant and
whether the Award shall be subject to Performance Goals.
No Restricted Share Awards or Restricted Share Unit Awards shall be granted at
any time when the Committee is prohibited from doing so by the Model Code for
Securities Transactions by Directors of Listed Companies (or the Company's
dealing rules).
9.2 The Committee may require a Participant granted a Restricted Share Award to
execute and deliver to the Company a Restricted Share Agreement with respect to
the Restricted Shares setting forth the restrictions applicable to such
Restricted Shares. The Committee shall determine whether:
(a) the Restricted Shares shall be held in escrow rather than delivered to the
Participant pending the release of the applicable restrictions, in which
case the Committee may require the Participant to additionally execute and
deliver to the Company an escrow agreement satisfactory to the Company; or
(b) the Restricted Shares shall be registered in the name of the nominated
Registered Holder during the Restricted Period; or
(c) other arrangements shall apply to the holding of Restricted Shares during
the Restricted Period, the terms of such arrangements being consistent
with the terms of this Plan.
9.3 If an escrow arrangement is used, the Committee shall cause a share
certificate registered in the name of the Participant to be issued and, if it so
determines, deposited together with the share powers with any escrow agent
designated by the Committee. The Committee may cause the escrow agent to issue
to a Participant a receipt evidencing any share certificate held by it
registered in the name of the Participant.
9.4 If a nominated Registered Holder is used, the Committee shall cause a share
certificate registered in the name of the Participant to be issued and, if it so
determines, deposited together with the share powers with any Registered Holder
nominated by the Committee. The Participant shall not be entitled to delivery of
the share certificate until the Restricted Period has expired and the Registered
Holder shall retain custody of such shares during the Restricted Period.
9.5 Subject to the restrictions set forth in Section 9.7 to 9.9, the Participant
generally shall have the rights and privileges of a beneficial owner as to such
Restricted Shares, including the right to direct the Registered Holder how to
vote such Restricted Shares. At the discretion of the Committee, cash dividends
and share dividends with respect to the Restricted Shares may be either
currently paid to the Participant or withheld by the Company or the Registered
Holder for the Participant's account, and interest may be credited on the amount
of cash dividends withheld at a rate and subject to such terms as determined by
the Committee. The cash dividends or share dividends so withheld by the
Committee and attributable to any particular Restricted Shares (and earnings
thereon, if applicable) shall be distributed to the Participant upon the release
of restrictions on such Restricted Shares and, if such Restricted Share is
forfeited, the Participant shall have no right to such cash or share dividends.
9.6 The terms and conditions of a grant of a Restricted Share Unit Award will be
reflected in a written Restricted Share Unit Award Agreement. The Committee may
determine that a Restricted Share Unit Award be granted in the form of a nil
cost option or a conditional or contingent right to acquire shares. Where a
Restricted Share Unit Award is granted in the form of a nil cost option, any
reference to the Restricted Period expiring in respect of Restricted Share Units
shall be construed as meaning that a Participant may call for the Restricted
Share Units within the period determined by the Committee. A Participant shall
not have any beneficial interest in any Shares during the Restricted Period as a
result of being granted a Restricted Stock Unit Award. The Company will not be
required to set aside a fund for the payment of any such Award. At the
discretion of the Committee, each Restricted Share Unit (representing one Share)
awarded to a Participant may be credited with cash and share dividends paid in
respect of one Share ("Dividend Equivalents"). At the discretion of the
Committee, Dividend Equivalents may be either currently paid to the Participant
or withheld by the Company for the Participant's account, and interest may be
credited on the amount of cash Dividend Equivalents withheld at a rate and
subject to such terms as determined by the Committee. Dividend Equivalents
credited to a Participant's account and attributable to any particular
Restricted Share Unit
(and earnings thereon, if applicable) shall be distributed to the Participant
upon settlement of such Restricted Share Unit and, if such Restricted Share Unit
is forfeited, the Participant shall have no right to such Dividend Equivalents.
Restrictions
9.7 Restricted Shares comprised in a Restricted Share Award granted to a
Participant shall be subject to the following restrictions until the expiration
of the Restricted Period and the attainment of any other vesting criteria
established by the Committee, and to such other terms and conditions as may be
set forth in the applicable Restricted Share Award Agreement:
(a) the Participant shall not be entitled to delivery of the share
certificate;
(b) the Restricted Shares shall be subject to the restrictions on
transferability set forth in the Restricted Share Award Agreement; and
(c) the Restricted Shares shall be subject to forfeiture to the extent
provided in the Rules and the applicable Restricted Share Agreement and,
to the extent such Restricted Shares are forfeited, the share certificates
shall be returned to the Company, and all rights of the Participant to
such Restricted Shares and as a shareholder shall terminate without
further obligation on the part of the Company.
9.8 Restricted Share Units awarded to any Participant shall be subject to:
(a) forfeiture until the expiration of the Restricted Period and the
attainment of any other vesting criteria established by the Committee, to
the extent provided in these Rules and the applicable Restricted Share
Unit Agreement, and to the extent such Restricted Share Units are
forfeited, all rights of the Participant to such Restricted Share Units
shall terminate without further obligation on the part of the Company; and
(b) such other terms and conditions as may be set forth in the applicable
Restricted Share Unit Agreement.
9.9 The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Shares and Restricted Share Units whenever it may
determine that such action is appropriate by reason of changes in applicable
laws or other exceptional circumstances determined by the Committee (including,
without limitation, the circumstances permitted in Section 10 in relation to a
Participant's Retirement or death, or in relation to the termination of a
Participant's employment lawfully or unlawfully, or disability) arising after
the date of the Restricted Share Award or Restricted Share Unit Award.
Restricted Period
9.10 The Restricted Period applicable to Restricted Shares and Restricted Share
Units comprised in an Award shall commence on the Date of Grant and shall expire
from time to time as to that part of the Restricted Shares and Restricted Share
Units indicated in a schedule (the "Vesting Schedule") established by the
Committee and set out in the applicable Restricted Share Agreement or Restricted
Share Unit Agreement.
(a) The minimum Restricted Period applicable to Restricted Share Awards or
Restricted Share Unit Awards which are subject to Performance Goals shall
be one year from the Date of Grant.
(b) The minimum Restricted Period applicable to Restricted Share Awards or
Restricted Share Unit Awards which are not subject to Performance Goals,
and which are to vest in full on a single date shall be three years from
the Date of Grant.
(c) The minimum Restricted Period applicable to Restricted Shares and
Restricted Share Units comprised in the Award which are to vest in parts
over a period of more than one year shall be five years from the Date of
Grant, in which case the Restricted Period shall be treated as expiring in
respect of equal parts of the Restricted Shares on Restricted Share Units
on each anniversary of the Date of Grant until the end of the overall
Restricted Period.
Delivery of Restricted Shares and Settlement of Restricted Share Units
9.11 Upon the expiration of the Restricted Period with respect to any Restricted
Shares covered by a Restricted Share Award and the attainment of any other
vesting criteria established by the Committee, the restrictions set forth in
Section 9.7 to 9.9 and the Restricted Share Agreement shall be of no further
force or effect with respect to the Restricted Shares which have not then been
forfeited. The Company shall deliver or procure the delivery to the Participant,
or his beneficiary, without charge, the share certificate evidencing the
Restricted Shares which have not then been forfeited and with respect to which
the Restricted Period has expired and any other vesting criteria established by
the Committee has been attained (to the nearest full share) and any cash
dividends or share dividends credited to the Participant's account with respect
to such Restricted Shares and the interest thereon, if any.
9.12 Upon the expiration of the Restricted Period and the attainment of any
other vesting criteria established by the Committee, with respect to any
Restricted Share Units covered by a Restricted Share Unit Award, the Company
shall determine whether the Award shall be settled in Shares or cash. If the
Committee determines that the Award shall be settled in Shares, the Company
shall procure the delivery to the Participant, or his beneficiary, without
charge, one Share for each Restricted Share Unit which has not then been
forfeited and with respect to which the Restricted Period has expired and any
other such vesting criteria are attained ("Vested Unit"). If the Committee has
elected to pay cash (or part cash and part Shares) for Vested Units, the amount
of such payment shall be equal to the Fair Market Value of the Shares as of the
date on which the Restricted Period lapsed with respect to such Vested Unit.
Conditions of Grant
9.13 Restricted Share Awards and Restricted Share Unit Awards may be granted
subject to such conditions for payment of tax and employees' National Insurance
contributions and employer's National Insurance contributions as the Committee
may determine, including that, with respect to Awards of Restricted Shares which
qualify as employment related restricted securities under Chapter 2 of Part VII
of ITEPA, any member of the plc Group may require a Participant to enter into an
election under section 430 or section 431 of ITEPA.
10. FORFEITURE
Restricted Shares
10.1 Save as otherwise provided in these rules and unless otherwise stated in
the applicable Restricted Share Award Agreement, Restricted Shares shall be
forfeited automatically on the Participant ceasing to be an employee of the plc
Group (whether lawfully or unlawfully) before the end of the Restricted Period.
10.2 Where a Participant ceases to be an employee of the plc Group before the
end of the Restricted Period by reason of Retirement, the Restricted Shares
shall not be forfeited and the restrictions attaching to the Restricted Shares
shall continue and shall lapse in accordance with the terms of the Restricted
Share Award provided, however, that the Committee may in its discretion
determine that some or all of the Restricted Shares may be released early.
10.3 Where a Participant ceases to be an employee of the plc Group before the
end of the Restricted Period by reason of his death while still in the
employment of a member of the plc Group, or he dies following a cessation of
employment described in Section 10.2 the Restricted Shares shall not be
forfeited and the Restricted Period shall expire forthwith and the restrictions
shall lapse.
Restricted Share Units
10.4 Save as otherwise provided in these rules and unless otherwise stated in
the applicable Restricted Share Unit Award Agreement, Restricted Share Units
shall be forfeited automatically on the Participant ceasing to be an employee of
the plc Group (whether lawfully or unlawfully) before the end of the Restricted
Period.
10.5 Where a Participant ceases to be an employee of the plc Group before the
end of the Restricted Period by reason of Retirement, the Restricted Share Units
shall not be forfeited and the restrictions attaching to the Restricted Share
Units shall continue and shall lapse in accordance with the terms of the
Restricted Share Unit Award provided, however, that the Committee may in its
discretion determine that some or all of the Restricted Share Units may be
released early.
10.6 Where a Participant ceases to be an employee of the plc Group before the
end of the Restricted Period by reason of his death while still in the
employment of a member of the plc Group, or he dies following a cessation of
employment described in Section 10.2 the Restricted Share Units shall not be
forfeited and the Restricted Period shall expire forthwith and the restrictions
shall lapse.
10.7 For the avoidance of doubt, an Award that is retained under this Section 10
may lapse at an earlier date by virtue of Section 13.
10.8 For the purposes of Sections 10.1 to 10.6 a female Participant shall not be
treated as ceasing to be an employee of a member of the plc Group if absent from
work wholly or partly because of pregnancy or confinement until she ceases to be
entitled to exercise any statutory or contractual right to return to work.
10.9 Where any release or exercise of an Award under this Section 10 would be
prohibited by law or the Model Code for Securities Transactions by Directors of
Listed Companies (or the Company's dealing rules) the period during which the
Restricted Shares or Restricted Share Units may be released
to a Participant shall be extended by an additional period equal to the length
of the period of prohibition.
11. GENERAL
Additional Provisions of an Award
11.1 Awards granted to a Participant under the Plan also may be subject to such
other provisions (whether or not applicable to Awards granted to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the acquisition of
Shares upon the exercise of Options (provided that the Committee determines that
providing such financing does not violate the Sarbanes-Oxley Act of 2002 and
applicable UK law), provisions for the forfeiture of or restrictions on resale
or other disposition of Shares acquired under any Award, provisions giving the
Company the right to repurchase Shares acquired under any Award in the event the
Participant elects to dispose of such Shares, provisions allowing the
Participant to elect to defer the receipt of Shares upon the exercise of Awards
for a specified period or until a specified event, and provisions to comply with
US Federal and state securities laws and US Federal and state tax withholding
requirements. Any such provisions shall be reflected in the applicable Award
Agreement.
Privileges of Share Ownership
11.2 Except as otherwise specifically provided in the Plan, no person shall be
entitled to the privileges of ownership in respect of Shares which are subject
to Awards hereunder until such Shares have been issued or transferred to that
person.
Government and Other Regulations
11.3 The obligation of the Company to issue Shares upon the exercise of Options
or otherwise settle Awards in Shares shall be subject to all applicable laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required.
Tax Withholding
11.4 A Participant may be required to pay to a member of the Combined Group, and
each member of the Combined Group shall have the right and is hereby authorized
to withhold from any Shares or other property deliverable under any Award or
from any compensation or other amounts owing to a Participant the amount (in
cash, Shares or other property) of any required tax withholding and payroll
taxes in respect of an Award, its exercise, or any payment or transfer under an
Award or under the Plan and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
11.5 Without limiting the generality of Section 11.4 above, the Committee may,
in its sole discretion, permit a Participant to satisfy, in whole or in part,
the foregoing withholding liability (but no more than the minimum required
withholding liability if using method (b) or (c) of this subsection) by:
(a) payment in cash;
(b) delivery of Shares owned by the Participant with a Fair Market Value equal
to such withholding liability;
(c) having the Company withhold from the number of Shares otherwise issuable
pursuant to the exercise of the Award a number of Shares with a Fair
Market Value equal to such withholding liability; or
(d) authorising the Company to arrange the sale of sufficient Shares to
generate proceeds sufficient to discharge any withholding liability.
Claim to Awards and Employment Rights
11.6 The rights and obligations of an Employee under the terms and conditions of
his office or employment shall not be affected by his participation in the Plan
or any right he may have to participate in the Plan. An individual who
participates in the Plan waives all and any rights to compensation and damages
in consequence of the termination of his office or employment with any company
for any reason whatsoever (whether lawfully or unlawfully) insofar as those
rights arise, or may arise, from his ceasing to have rights under or his
entitlement to an Award under the Plan as a result of such termination or from
the loss or diminution in value of such rights or entitlements. In the event of
conflict between the terms of this Section 11.6 and the Employee's terms of
employment, this Section will take precedence.
Governing Law
11.7 The Plan shall be governed by, and construed in accordance with, the laws
of England. All disputes arising out of or in connection with the rules shall be
subject to the exclusive jurisdiction of the courts of England and Wales.
Funding
11.8 No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
Nontransferability
11.9 Each Award shall be exercisable only by a Participant during the
Participant's lifetime, or, if permissible under applicable law, by the
Participant's legal guardian or personal representative. No Award may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of inheritance
and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against each member of
the plc Group.
11.10 Notwithstanding the foregoing, the Committee may, in its sole discretion,
permit Awards other than Incentive Share Options to be transferred by a
Participant, without consideration, subject to such rules as the Committee may
adopt consistent with any applicable Award Agreement to preserve the purposes of
the Plan, to:
(a) any person who is a spouse or child or step child under the age of 18 of
the Participant (an "Immediate Family Member");
(b) a trust solely for the benefit of the Participant and his or her Immediate
Family Members;
(c) a partnership or limited liability company whose only partners or
shareholders are the Participant and his Immediate Family Members;
(each transferee described in sub-sections (a), (b) and (c) above is hereinafter
referred to as a "Permitted Transferee"); provided that the Participant gives
the Committee advance written notice describing the terms and conditions of the
proposed transfer and the Committee notifies the Participant in writing that
such a transfer would comply with the requirements of the Plan.
11.11 The terms of any Award transferred in accordance with Section 11.10 shall
apply to the Permitted Transferee and any reference in the Plan, or in any
applicable Award Agreement or share option certificate, to a Participant shall
be deemed to refer to the Permitted Transferee, except that:
(a) Permitted Transferees shall not be entitled to transfer any Award, other
than by will or the laws of inheritance;
(b) Permitted Transferees shall not be entitled to exercise a transferred
Nonqualified Share Option unless there shall be in effect a registration
statement on an appropriate form covering the Shares to be acquired
pursuant to the exercise of such Nonqualified Share Option if the
Committee determines, consistent with any applicable Share Option
Agreement, that such a registration statement is necessary or appropriate,
(c) the Committee or any member of the plc Group shall not be required to
provide any notice to a Permitted Transferee, whether or not such notice
is or would otherwise have been required to be given to the Participant
under the Plan or otherwise; and
(d) the consequences of a Participant no longer being employed by, or in the
services of, a member of the plc Group under the terms of the Plan and the
applicable Award Agreement or share option certificate shall continue to
be applied with respect to the Participant, including, without limitation,
that a Nonqualified Share Option shall be exercisable by the Permitted
Transferee only to the extent, and for the periods, specified in the Plan
and the applicable Share Option Agreement.
Relationship to Other Benefits
11.12 No payment under the Plan shall be taken into account in determining any
benefits under any pension, retirement, profit sharing, group insurance or other
benefit plan of a member of the Combined Group except as otherwise specifically
provided in such other plan.
Expenses
11.13 The expenses of administering the Plan shall be borne by the plc Group.
Gender and Number
11.14 Where the context admits, masculine pronouns and other words of masculine
gender shall refer to both men and women, words in the singular shall include
the plural and words in the plural shall include the singular.
Termination of Employment
11.15 For all purposes herein, a person who transfers from employment with a
member of the plc Group to employment or service with a member of the Combined
Group shall not be deemed to have terminated employment or service with a member
of the plc Group.
Titles and Headings
11.16 The titles and headings of the sections in the Plan are for convenience of
reference only, and in the event of any conflict, the text of the Plan, rather
than such titles or headings shall control.
Severability
11.17 If any provision of the Plan or any Award Agreement is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or Award, such provision shall be stricken as to such
jurisdiction, person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
12. CHANGES IN CAPITAL STRUCTURE
12.1 In the event of any:
(a) Capital Reorganisation;
(b) Corporate Transaction; or
(c) the implementation by the Company of a demerger, or the payment by the
Company of a dividend in specie or a super dividend or other transaction
or any change in applicable laws or any change in circumstances which in
the opinion of the Committee (acting fairly and reasonably and taking into
account any criteria it may consider to be relevant) would materially
affect (whether by increasing or reducing) the current or future value of
an Award
the number or type of shares subject to an Award and the Option Price per Share
may be adjusted or the Awards may be subject to substitution in such manner as
the Committee may determine is fair and reasonable, PROVIDED THAT:
(i) in respect of an Award under which Shares are to be transferred,
prior notification shall be given to the person holding the Shares
to which the Award relates;
(ii) no adjustment shall be made pursuant to this Section which would
decrease the aggregate Option Price of any Option; and
(iii) except as provided in this sub-paragraph (iii), no adjustment may
have the effect of reducing the Option Price of any Option to less
than the nominal value of a Share. Where an Option subsists over
both issued and unissued Shares, any such adjustment may only be
made if the reduction of the Option Price of Options over both
issued and unissued Shares can be made to the same extent. Any
adjustment to the Option Price of Options over unissued Shares shall
only be made if and to the extent that the Committee shall be
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
Option Price. The Company may apply such sum in paying up such
amount on such Shares and so that, on exercise of any Option in
respect of which such reduction shall have been made, the Company
shall capitalise such sum (if any) and apply the same in paying up
such amount as aforesaid; and
(iv) any adjustment in Incentive Share Options under this Section 12
shall be made only to the extent not constituting a "modification"
within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 12 shall be made in a manner which
does not adversely affect the exemption provided pursuant to Rule
16b-3 under the Exchange Act.
12.2 Notwithstanding the above, in the event of any of the following:
(a) the Company is merged or consolidated with another company or body
corporate and, in connection therewith, consideration is received by
shareholders of the Company in a form other than shares or other equity
interests of the surviving entity;
(b) a Sale;
(c) the reorganization or liquidation of the Company; or
(d) the Company enters into a written agreement to undergo an event described
in sub-paragraphs (a), (b) or (c) above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and cause the
holders thereof to be paid, in cash or shares, or any combination thereof, the
value of such Awards based upon the price per share of the shares or other
consideration received or to be received by shareholders of the Company in the
event.
12.3 The Company shall give each Participant notice of an adjustment hereunder
and, upon notice, such adjustment shall be conclusive and binding for all
purposes.
13. EFFECT OF CHANGE OF CONTROL
13.1 In the event of a Change of Control which is not a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Option Period may not have commenced nor the Performance Goals been
satisfied, an Option shall forthwith vest and become exercisable with respect to
100 per cent of the Shares subject to such Option. An Option Holder may exercise
his Options during the Relevant Period. Failing any permitted exercise the
Options shall without prejudice to the operation of Section 13.7, cease to be
exercisable and shall automatically lapse upon the expiry of the Relevant
Period, and if more than one Relevant Period is running concurrently,
the Option shall cease to be exercisable and lapse upon the expiry of whichever
of those periods is the first to expire.
13.2 In the event of a Change of Control which is a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Option Period may not have commenced nor the Performance Goals been
satisfied, an Option shall forthwith vest and become exercisable with respect to
100 per cent of the Shares subject to such Option conditionally upon
satisfaction of the Relevant Condition. An Option Holder may exercise his
Options during the Relevant Period. Failing any permitted exercise the Options
shall cease to be exercisable between the last date upon which permitted
exercises may occur and the first date when it can be determined whether or not
the Relevant Condition is satisfied. If the Relevant Condition is not satisfied
the Options shall continue subject to the terms of this Plan. If the Relevant
Condition is satisfied the Options shall, without prejudice to the operation of
Section 13.7, lapse automatically on the date upon which the scheme of
arrangement is sanctioned by the Court.
13.3 In the event of a Change of Control which is not a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Restricted Period may not have expired nor any Performance Goals been
satisfied, the Restricted Period shall forthwith expire with respect to 100 per
cent of the Shares comprised in a Restricted Stock Award or a Restricted Stock
Unit Award. The Restricted Period shall expire immediately upon the commencement
of the Relevant Period and the Company shall satisfy its obligations under
Section 9.11 and 9.12 of this Plan in respect of the Restricted Share Awards and
Restricted Share Unit Awards within 30 days thereof at the end of which period,
without prejudice to the operation of Section 13.7, the Awards shall lapse.
13.4 In the event of a Change of Control which is a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Restricted Period may not have expired nor any Performance Goals been
satisfied, the Restricted Period shall expire with respect to 100 per cent of
the Shares comprised in a Restricted Stock Award or a Restricted Stock Unit
Award conditionally upon satisfaction of the Relevant Condition. If the Relevant
Condition is not satisfied the Restricted Period shall not expire and the
Restricted Share Awards and Restricted Share Unit Awards shall continue subject
to the terms of this Plan. If the Relevant Condition is satisfied the Restricted
Period shall expire on the date upon which the scheme of arrangement is
sanctioned by the Court and the Company shall satisfy its obligations under
Section 9.11 and 9.12 of this Plan in respect of the Restricted Share Awards and
Restricted Share Unit Awards within 30 days thereof at the end of which period,
without prejudice to the operation of Section 13.7, the Awards shall lapse.
Cancellation of Awards
13.5 In the event of a Change of Control, the Committee may in its discretion
and upon at least 10 days' advance notice to the affected persons, cancel any
outstanding Award and pay to the holders thereof, in cash or shares, or any
combination thereof, the value of such Awards based upon the price per Share
received or to be received by other shareholders of the Company in the event.
Demerger
13.6 If the Committee becomes aware that the Company is or is expected to be
affected by any demerger, dividend in specie, super-dividend or other
transaction which, in the opinion of the Committee, would materially affect
(whether by increasing or reducing) the current or future value of any Awards,
the Committee (acting fairly and reasonably and taking into account criteria it
may
consider to be relevant) may, in its absolute discretion, allow Options to be
exercised (whether or not the Option Period has commenced) and the Restricted
Period to expire in respect of Restricted Shares and Restricted Share Units, in
each case in respect of such number of Shares as the Committee may determine in
its discretion. The Committee shall specify the period in which such Options
shall be exercisable and whether such Options shall lapse at the end of the
specified period. The Committee shall notify any Participant who is affected by
the discretion exercised under this Section.
Roll-over of Awards
13.7 In the event of a Change of Control the Committee may, in its absolute
discretion, with the consent of any acquiring company determine that:
(a) Options shall not be exercisable and that the Restricted Period shall not
expire in respect of Restricted Shares and Restricted Share Units but that
Participants shall be required within the Relevant Period to release any
outstanding Awards (whether vested or unvested) in consideration for the
grant of equivalent Awards over shares or restricted shares or restricted
share units in the capital of the acquiring company or any company which
Controls such acquiring company, on such terms as the Committee may
determine; or
(b) Participants may at any time within the Relevant Period by agreement with
the acquiring company, release any outstanding Awards (whether vested or
unvested) in consideration for the grant of equivalent Awards over shares
or restricted shares or restricted share units in the capital of the
acquiring company or any company which Controls such acquiring company, on
such terms as the Committee may determine.
14. NON EXCLUSIVITY OF THE PLAN
Neither the adoption of this Plan by the Committee nor the submission of this
Plan to the shareholders of the Company for approval shall be construed as
creating any limitations on the power of the Committee to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of share options otherwise than under this Plan, and such
arrangements may be either applicable generally or only in specific cases.
15. AMENDMENTS AND TERMINATION
15.1 The Committee may at any time discontinue the grant of further Awards.
15.2 The Committee may amend any of the provisions of the Plan in any way it
thinks fit, provided that:
(a) the Committee shall not make any amendment that would materially prejudice
the interests of existing Participants except with the prior consent or
sanction of Participants who, if they exercised their Options in full or
the Restricted Period in respect of their Award expired, would thereby
become entitled to not less than three-quarters of all the Shares which
would fall to be allotted, transferred or released upon exercise in full
of all outstanding Options and expiry of the Restricted Period; and
(b) no amendment to the advantage of Employees or may be made to:
(i) the definition of Employee in Section 2;
(ii) the limitations on the number of Shares subject to the Plan;
(iii) the basis for determining an Executive's entitlement to Shares under
the Plan;
(iv) the terms of Shares to be provided under the Plan;
(v) the adjustment provisions of Section 12 of the Plan; or
(vi) the Option Price applicable to an Option (other than in the
circumstances permitted in Rule 12),
without the prior approval of the Company in general meeting except in the
case of minor amendments to benefit the administration of the Plan, to
take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for Employees or
any member of the Combined Group; and
(c) without prejudice to any provision of the Plan which provides for the
lapse of an Option, the Committee may not cancel an Option unless the
Option Holder agrees in writing to such cancellation.
15.3 At any time during an Option Period where the Option Price applicable to an
Option is higher than the Fair Market Value of a Share (an "Underwater Option"),
the Committee shall not permit a Participant to exchange an Underwater Option in
consideration of the grant of an Option with a lower Option Price, without the
prior approval of the Company in general meeting other than in the circumstances
permitted in Section 13.7.
15.4 Notwithstanding any other provision of the Plan, the Committee may
establish appendices to the Plan for the purpose of granting Approved Options to
Employees who are primarily liable to tax in the United Kingdom and Awards to
Employees who are or may become primarily liable to tax outside the United
Kingdom on their remuneration, subject to such modifications as may be necessary
or desirable to take account of overseas tax, exchange control or securities
laws provided that any shares made available under such appendices shall count
towards the limit set out in Section 5.1.
15.5 Benefits under the Plan shall not be pensionable.
APPENDIX 1
United States Part of the Plan
For any Employee whose remuneration is (or, at the time of Option exercise, is
expected wholly to be) subject to taxation in the United States of America and
to whom the Committee wishes to grant Options under this Plan which will be
treated as Incentive Share Options, the following provisions shall apply:
(A) All the provisions of the Plan shall apply to the grant of Options subject
to the modifications contained in the following paragraphs.
(B) The number of Shares issued or transferred pursuant to the exercise of
Incentive Share Options shall not, in aggregate, exceed 40 million Shares.
The number of Shares available for issuance pursuant to the preceding
sentence shall not exceed the limit in Section 5.1 and shall be subject to
appropriate adjustment on the occurrence of any event described in Section
12.
(C) The term "disability" in Section 8.3 shall have the meaning given by
Section 22(e)(3) of the Code.
APPENDIX 2
Inland Revenue approved part of the Scheme
In relation to any Employee whose remuneration is subject to taxation in the UK
and to whom the Committee wishes to grant Approved Options, the following
provisions relating to Options shall apply:
(D) Sections 1 to 15 of the Plan shall apply to the grant of Approved Options
under this Appendix 2 subject to the modifications contained in the
following paragraphs.
(E) This Appendix 2 shall not apply to Awards of Restricted Shares and
Restricted Share Units and, accordingly, Sections 9 to 10 shall not apply
to this Appendix 2.
(F) The definition of Employee in Section 2 shall be construed so that:
(i) no Option may be granted under this Appendix 2 to a director of any
member of the plc Group unless such director is required to devote
not less than 25 hours per week to the affairs of the plc Group; and
(ii) no Option may be granted under this Appendix 2 to an employee
(including one who is a director) who is ineligible to participate
in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.
(G) Part (b) of the definition of Fair Market Value shall not apply to the
grant of Options under this Appendix 2. In its place, a new paragraph (b)
shall be inserted as follows:
"(b) subject to (a) above, the value as agreed between the Inland Revenue
and the Company in writing in advance of the Date of Grant;"
(H) The definition of Shares shall be subject to the condition that they
satisfy paragraphs 16 to 20 of Schedule 4 to ITEPA. For the avoidance of
doubt, Options may not be granted over ADRs under this Appendix 2.
(I) In addition to its powers under Section 4, the Committee may make such
amendments to this Appendix 2 without the approval of shareholders in
general meeting as are necessary or desirable to obtain or maintain Inland
Revenue approval of this Appendix 2.
(J) Any Option granted under this Appendix 2 may only be exercised by an
Option Holder who is not ineligible to participate in the Plan by virtue
of paragraph 9 of Schedule 4 to ITEPA.
(K) Section 4.2(e) shall not apply to the grant of Options under this Appendix
2.
(L) Section 4.2(f) shall not apply to the grant of Options under this Appendix
2.
(M) Any correction pursuant to Section 4.2(g) to an Option granted under this
Appendix 2 shall be subject to the exercise of the amendment power under
Section 15, as modified by this Appendix 2.
(N) Section 6 shall not apply to the grant of Options under this Appendix 2.
In its place a new Section 6 shall be inserted as follows:
"6. ELIGIBILITY
6.1 No Employee shall be granted an Option unless:
(a) he has received written notification from the Committee, or from a
person designated by the Committee, that he has been selected to
participate in the Plan; and
(b) immediately following such grant the aggregate Fair Market Value of
the Shares which he may acquire by exercise of the Option and any
Shares which he may acquire by exercise of any other options granted
under the Plan or any other approved CSOP scheme (within the meaning
of section 521(4) of ITEPA) established by the plc Group will not
exceed (pound)30,000 or such other amount as may be specified
pursuant to paragraph 6 of Schedule 4 to ITEPA and for this purpose
Fair Market Value shall be determined on the date on which the
relevant Option is granted."
(O) Section 7.4 shall not apply to the grant of Options under this Appendix 2.
In its place a new Section 7.4 shall be inserted as follows:
"Conditions of Exercise
7.4 The exercise of an Option may be subject to such conditions for
payment of taxation, employees' National Insurance contributions and
employer's National Insurance contributions liability as the
Committee may determine (including without limitation the right to
sell on an Option Holder's behalf sufficient Shares to satisfy any
taxation or National Insurance contributions) and if any condition
is imposed relating to the assumption, payment or reimbursement by
the Option Holder of employer's National Insurance contributions
liability, such conditions shall comply with any applicable
legislation or regulations and the Company shall be entitled to
waive in whole or in part the Option Holder's obligation in respect
of such liability."
(P) Section 7.6 shall not apply to the grant of Options under this Appendix 2.
In its place a new Section 7.6 shall be inserted as follows:
"Performance Goals
7.6 The Committee shall determine prior to the Date of Grant whether any
Performance Goals shall apply to the vesting of an Option and if so
these shall be set out in the applicable Share Option Agreement or
share option certificate. Any Performance Goals applied by the
Committee must be objective. If events subsequently occur which
cause the Committee to consider that a different Performance Goal
would be a fairer measure of the performance of the job-holder, an
amendment may be made to the extent that the Committee reasonably
consider would result in the Performance Goal being no more nor less
difficult to satisfy than it would have been without such
amendment."
(Q) Section 7.8(c) shall not apply to the grant of Options under this Appendix
2. In its place a new Section 7.8(c) shall be inserted as follows:
"Options shall not be transferable by the Participant other than to the
Option Holder's personal representative on his death and shall be
exercisable during the Participant's lifetime by him alone;"
(R) Section 11.1 shall not apply to Options granted under this Appendix 2. In
its place, a new Section 11.1 shall be inserted as follows:
"Additional Provisions of an Award
11.1 Awards granted to a Participant under the Plan may also be subject
to such other provisions (whether or not applicable to other Awards
granted to any such Participant) as the Committee determines
appropriate to be offered to a Participant to assist the Participant
in financing the acquisition of Shares upon the exercise of Options
(provided that such financing does not violate the Sarbanes-Oxley
Act of 2002 and applicable UK law). Any such arrangements are
subject to the prior approval of the Inland Revenue"
(S) Sections 11.4 and 11.5 shall not apply to the grant of Options under this
Appendix 2. In their place new Sections 11.4 and 11.5 shall be inserted as
follows:
"Tax Withholding
11.4 Subject to Section 11.5 below, a Participant may be required to pay
to a member of the Combined Group, and each member of the Combined
Group shall have the right and is hereby authorized to withhold from
any Shares or other property deliverable under any Award or from any
compensation or other amounts owing to a Participant, the amount (in
cash) of any required tax withholding and payroll taxes in respect
of an Award, its exercise, or any payment or transfer under an Award
or under the Plan and to take such other action as may be necessary
in the opinion of the Company to satisfy all obligations for the
payment of such taxes.
11.5 Prior to the exercise of an Option, the Committee shall offer a
Participant the opportunity to elect to satisfy, in whole or in
part, any withholding liability by the methods set out in this
subsection (but no more than the minimum required withholding
liability if using method (b) or (c) of this subsection):
(a) payment in cash;
(b) delivery of Shares owned by the Participant with a Fair Market
Value equal to such withholding liability;
(c) authorising the Company to arrange the sale of sufficient
Shares to generate proceeds sufficient to discharge any
withholding liability.
In the event that the Participant fails to satisfy the liability within 7
days, the Committee shall be authorised to arrange the sale of sufficient
Shares to generate proceeds sufficient to discharge."
(T) Sections 11.9, 11.10 and 11.11 shall not apply to Options granted under
this Appendix 2.
(U) Section 12.1 shall be amended so that the Committee shall not have power
to adjust Options granted under this Appendix 2 in the circumstances
envisaged by sub-sections (b) or (c) of Section 12.1, nor to adjust the
type of Shares subject to an Option. Any adjustment pursuant to Section
12.1 to an Option granted under this Appendix 2 shall not take effect
without the prior approval of the Inland Revenue.
(V) Section 13.5 shall not apply to Options granted under this Appendix 2.
(W) Section 13.7 shall not apply to Options granted under this Appendix 2. In
its place, a new Section 13.7 and a new Section 13.8 shall be inserted as
follows:
"Roll-over of Options
13.7 If any event occurs which falls within sub-section (a), (d) or (e)
of the definition of Change of Control, each Participant who holds
an Option granted under this Appendix 2 may at any time within the
appropriate period (which expression shall be construed in
accordance with paragraph 26(3) of Schedule 4 of ITEPA), by
agreement with the acquiring company, release any Option which has
not lapsed (the "Old Option") in consideration of the grant to him
of an option (the "New Option") which (in accordance with Section
13.8 below) is equivalent to the Old Option but relates to shares in
a different company (whether the acquiring company itself or another
company falling within paragraph 27(2)(b) of Schedule 4 of ITEPA)
(the "New Grantor").
13.8 The New Option shall not be regarded for the purposes of Section
13.7 as equivalent to the Old Option unless the conditions set out
in paragraph 27(4) of Schedule 4 of ITEPA are satisfied and, in
relation to the New Option, the provisions of the Plan shall be
construed as if:
(i) the New Option were an option granted under the Plan at the
same time as the Old Option;
(ii) references to any Performance Goals were references to such
new Performance Goals (if any) relating to the business of the
New Grantor or any member of the New Grantor's group as the
Committee may consider are appropriate in the circumstances;
(iii) references to the Company in Sections 2 to 15 and in the
definition of plc Group were references to the New Grantor;
(iv) references to the Committee in Sections 7.7(e), 8.3, 11.1,
11.5, 11.17, 12, 13, and 15.2 were references to the board of
directors of the New Grantor or any duly authorised committee
thereof; and
(v) references to Shares were references to shares in the New
Grantor."
(X) Section 15.3 shall not apply to Options granted under this Appendix 2.
(Y) At a time when this Appendix 2 is approved by the Inland Revenue, and if
such approved status is to be maintained, no amendment to any key feature
(as defined by paragraph 30(4) of Schedule 4 to ITEPA) of the rules of the
Plan or this Appendix 2 may take effect as regards this Appendix 2 without
the prior approval of the Inland Revenue (and if such approved status is
not to be maintained, the Company shall notify the Inland Revenue of the
relevant amendment).
(Z) All Shares allotted or transferred upon the exercise of an Option granted
under this Appendix 2 shall rank pari passu in all respects with the
Shares in issue at the date of exercise save as regards any rights
attaching to such Shares by reference to a record date prior to the date
of exercise.