Exhibit 4.5
--------------------------------------------------------------------------------
APACHE NORTH SEA LIMITED
AND
CAPITA IRG TRUSTEES LIMITED
--------------------------------------------------------------------------------
TRUST DEED AND RULES
OF THE
APACHE U.K.
SHARE INCENTIVE PLAN
APRIL 2003
--------------------------------------------------------------------------------
INLAND REVENUE REFERENCE A1777/MW
1
THE APACHE U.K.
SHARE INCENTIVE PLAN
1. PURPOSE
2. STATUS
3. DECLARATION OF TRUST
4. NUMBER OF TRUSTEES
5. INFORMATION
6. RESIDENCE OF TRUSTEES
7. CHANGE OF TRUSTEES
8. INVESTMENT AND DEALING WITH TRUST ASSETS
9. LOANS TO TRUSTEES
10. SHARES FROM QUALIFYING SHARE OWNERSHIP TRUSTS
11. TRUSTEES' OBLIGATIONS UNDER THE PLAN
12. POWER OF TRUSTEES TO RAISE FUNDS TO SUBSCRIBE FOR A RIGHTS ISSUE
13. POWER TO AGREE MARKET VALUE OF SHARES
14. PERSONAL INTEREST OF TRUSTEES
15. TRUSTEES' MEETINGS
16. SUBSIDIARY COMPANIES
17. EXPENSES OF PLAN
18. TRUSTEES' LIABILITY, INDEMNITY AND FEES
19. COVENANT BY THE PARTICIPATING COMPANIES
20. ACCEPTANCE OF GIFTS
21. TRUSTEES' LIEN
22. AMENDMENTS TO THE PLAN
23. TERMINATION OF THE PLAN
24. NOTICES
25. PROPER LAW
RULES OF THE APACHE U.K. SHARE INCENTIVE PLAN
2
THIS DEED made on 7th May 0000
XXXXXXX
XXXXXX XXXXX XXX LIMITED (registered number 04614761) whose registered office is
situated at Level 0, Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("the
Company")
and
CAPITA IRG TRUSTEES LIMITED (registered number 2729260) whose registered office
is situated at The Registry, 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxx XX0 0XX ("the
Trustees").
1. PURPOSE
The purpose of this Deed is to establish a trust for an employee share
ownership plan which satisfies Schedule 2 to the Income Tax (Earnings
and Pensions) Xxx 0000.
2. STATUS
The Plan consists of this Deed and the attached Rules. The definitions
in the Rules apply to this Deed. The Committee shall from time to time
determine which of parts A to D of the Rules shall have effect.
3. DECLARATION OF TRUST
3.1 The Participating Companies and the Trustees have agreed that all the
Shares and other assets which are issued to or transferred to the
Trustees are to be held on the trusts declared by this Deed, and
subject to the terms of the Rules. When Shares or assets are
transferred to the Trustees by the Participating Companies with the
intention of being held as part of the Plan they shall be held upon the
trusts and provisions of this Deed and the Rules.
3.2 The Trustees shall hold the Trust Fund upon the following trusts
namely:
(a) as to Shares which have not been awarded to Participants
("Unawarded Shares") upon trust during the Trust Period to
allocate those Shares in accordance with the terms of this
Deed and the Rules;
3
(b) as to Shares which have been awarded to a Participant ("Plan
Shares") upon trust for the benefit of that Participant on the
terms and conditions set out in the Rules;
(c) as to Partnership Share Money upon trust to purchase Shares
for the benefit of the contributing Qualifying Employee in
accordance with the Rules; and
(d) as to other assets ("Surplus Assets") upon trust to use them
to purchase further Shares to be held on the trusts declared
in (a) above, at such time during the Trust Period and on such
terms as the Trustees in their absolute discretion think fit.
3.3 The income of Unawarded Shares and Surplus Assets shall be accumulated
by the Trustees and added to, and held upon the trusts applying to,
Surplus Assets.
3.4 The income of Plan Shares and Partnership Share Money shall be dealt
with in accordance with the Rules.
3.5 The perpetuity period and the Trust Period in respect of the trusts and
powers declared by this Deed and the Rules shall be the period of 80
years from the date of this Deed.
4. NUMBER OF TRUSTEES
Unless a corporate Trustee is appointed, there shall always be at least
three Trustees. Where there is no corporate Trustee, and the number of
Trustees falls below three, the continuing Trustees have the power to
act only to achieve the appointment of a new Trustee.
4
5. INFORMATION
5.1 The Trustees shall be entitled to rely without further enquiry on all
information supplied to them by the Participating Companies with regard
to their duties as Trustees and in particular, but without prejudice to
the generality of the foregoing, any notice given by a Participating
Company to the Trustees in respect of the eligibility of any person to
become or remain a Participant shall be conclusive in favour of the
Trustees.
5.2 Except as otherwise provided, the Trustees may in their discretion
agree with the Committee, the Company or any of the Participating
Companies matters relating to the operation and administration of the
Trust as they may consider advisable in the interest of the Trust and
so that no person claiming an interest under this Trust shall be
entitled to question the legality or correctness of any arrangement or
agreement made between the Committee, the Company or any of the
Participating Companies and the Trustees in relation to such operation
or administration.
5.3 The decision of the Committee in any dispute affecting Participants or
Participating Companies shall be final and conclusive.
5.4 The Trustees may employ on such terms as the Committee may agree as to
remuneration, any agent or agents to transact all or any business of
whatsoever nature required to be done in the proper administration of
the Trust.
6. RESIDENCE OF TRUSTEES
Every Trustee shall be resident in the United Kingdom. The Committee
shall immediately remove any Trustee who ceases to be so resident and,
if necessary, appoint a replacement.
7. CHANGE OF TRUSTEES
The Company has the power to appoint or remove any Trustee for any
reason. The change of Trustee shall be effected by deed and shall take
effect from the date that written notice of such removal is delivered
to the Trustees, or such later date as the Committee and the Trustees
shall agree. Any Trustee may resign on three months notice given in
writing to the Company, provided that there will be at least three
Trustees or a corporate Trustee immediately after the retirement.
5
8. INVESTMENT AND DEALING WITH TRUST ASSETS
8.1 Save as otherwise provided for by the Plan the Trustees shall not sell
or otherwise dispose of Plan Shares.
8.2 The Trustees shall obey any directions given by a Participant in
accordance with the Rules in relation to his Plan Shares and any rights
and income relating to those Shares. In the absence of any such
direction, or provision by the Plan, the Trustees shall take no action.
If no directions are received from Participants in relation to the
action they wish the Trustees to take in voting their Plan Shares,
those Shares will not be voted.
8.3 The Participating Companies shall, as soon as practicable after
deduction from Salary, pass the Partnership Share Money to the Trustees
who will put the money into an account with:
(a) a person falling within section 840A(1)(b) of ICTA 1988;
(b) a building society; or
(c) a firm falling within section 840(1)(c) of ICTA 1988,
until it is either used to acquire Partnership Shares on the
Acquisition Date, or, in accordance with the Plan, returned to the
individual from whose Salary the Partnership Share Money has been
deducted. The Trustees shall pass on any interest arising on this
invested money to the individual from whose Salary the Partnership
Share Money has been deducted at least once in each calendar year. The
Trustees are, however, not obliged to keep monies in an interest
bearing account.
8.4 The Trustees may either retain or sell Unawarded Shares at their
absolute discretion. The proceeds of any sale of Unawarded Shares shall
form part of Surplus Assets.
8.5 The Trustees shall have all the powers of investment of a beneficial
owner in relation to Surplus Assets.
8.6 The Trustees shall not be under any liability to the Participating
Companies or to current or former Qualifying Employees by reason of a
failure to diversify investments, which results from the retention of
Plan Shares or Unawarded Shares.
8.7 The Trustees are not required to interfere in the management or conduct
of the business of the Parent Company regardless of the size of the
Trustees' holding of Shares, and will not be obliged to seek
information about the affairs of the Parent Company and may
6
leave the conduct of the Parent Company's business wholly to the
directors or management of the Parent Company.
8.8 The Trustees may delegate powers, duties or discretions to any persons
and on any terms. No delegation made under this Clause shall divest the
Trustees of their responsibilities under this Deed or under the
Schedule.
8.9 The Trustees may allow any Shares to be registered in the name of an
appointed nominee or custodian provided that such Shares shall be
registered in a designated account. Such registration shall not divest
the Trustees of their responsibilities under this Deed or the Schedule.
8.10 The Trustees may at any time, and shall if the Committee so decides,
revoke any delegation made under this Clause or require any Plan assets
held by another person to be returned to the Trustees, or both.
9. LOANS TO TRUSTEES
The Trustees shall have the power to borrow money, with the written
consent of the Company, for the purpose of:
(a) acquiring Shares; and
(b) paying any other expenses properly incurred by the Trustees in
administering the Plan.
Where a loan is to be provided by the Company or an Associated Company
then it shall be made pursuant to a written loan agreement.
10. SHARES FROM QUALIFYING SHARE OWNERSHIP TRUSTS
Where Shares are transferred to the Trustees in accordance with
paragraph 78 of the Schedule, they shall award such Shares only as Free
Shares and Matching Shares, and in priority to other available Shares.
7
11. TRUSTEES' OBLIGATIONS UNDER THE PLAN
NOTICE OF AWARD OF FREE SHARES AND MATCHING SHARES
11.1 As soon as practicable after Free Shares and Matching Shares have been
awarded to a Participant, the Trustees shall give the Participant a
notice stating:
(a) the number and description of those Shares;
(b) their Initial Market Value on the date of Award; and
(c) the Holding Period applicable to them.
NOTICE OF AWARD OF PARTNERSHIP SHARES
11.2 As soon as practicable after any Partnership Shares have been acquired
for a Participant and at least once in every six months, the Trustees
shall give the Participant a notice stating:
(a) the number and description of those Shares;
(b) the amount of money applied by the Trustees in acquiring those
Shares on behalf of the Participant; and
(c) the Market Value at the Acquisition Date.
NOTICE OF ACQUISITION OF DIVIDEND SHARES
11.3 As soon as practicable after Dividend Shares have been acquired on
behalf of a Participant, the Trustees shall give the Participant a
notice stating:
(a) the number and description of those Shares;
(b) their Market Value on the Acquisition Date;
(c) the Holding Period applicable to them; and
(d) any amount not reinvested and carried forward for acquisition
of further Dividend Shares.
NOTICE OF ANY FOREIGN TAX DEDUCTED BEFORE DIVIDEND PAID
11.4 Where any foreign cash dividend is received in respect of Plan Shares
held on behalf of a Participant, the Trustees shall give the
Participant notice of the amount of any foreign tax deducted from the
dividend before it was paid.
8
RESTRICTIONS DURING THE HOLDING PERIOD
11.5 During the Holding Period the Trustees shall not dispose of any Free
Shares, Matching Shares or Dividend Shares (whether by transfer to the
employee or otherwise) except as allowed by the following paragraphs of
the Schedule:
(a) paragraph 37 (power of Trustees to accept general offers);
(b) paragraph 77 (power of Trustees to raise funds to subscribe
for rights issue);
(c) paragraph 79 (meeting by Trustees of PAYE obligations); and
(d) paragraph 90(5) (termination of plan: early removal of shares
with Participant's consent).
PAYE AND OTHER TAX LIABILITIES
11.6 The Trustees may dispose of a Participant's Shares or accept a sum from
the Participant in order to meet any PAYE liability in the
circumstances provided in section 503 of ITEP 2003 (PAYE: shares
ceasing to be subject to the plan) and any employee's NICs liability.
11.7 Where the Trustees receive a sum of money which constitutes a Capital
Receipt in respect of which a Participant is chargeable to income tax
under section 501 of ITEP 2003, the Trustees shall pay to the employer
a sum equal to that on which income tax is so payable.
11.8 The Trustees shall maintain the records necessary to enable them to
carry out their PAYE and NICs obligations, and the PAYE and employee's
NICs obligations of the employer company so far as they relate to the
Plan.
11.9 Where the Participant becomes liable to income tax under ITEP 2003,
Case V of Schedule D, or Schedule F, the Trustees shall inform the
Participant of any facts which are relevant to determining that
liability.
9
MONEY'S WORTH RECEIVED BY TRUSTEES
11.10 The Trustees shall pay over to the Participant as soon as is
practicable, any money or money's worth received by them in respect of
or by reference to any shares, other than new shares within paragraph
86 of the Schedule (company reconstructions).
This is subject to:
(a) the provisions of Part 8 of the Schedule (reinvestment of cash
dividends);
(b) the Trustees obligations under sections 510 to 514 ITEP 2003
(PAYE: obligations to make payments to employer); and
(c) the Trustees' PAYE obligations.
GENERAL OFFERS
11.11 If any offer, compromise, arrangement or scheme is made which affects
the Plan Shares the Trustees shall notify Participants. Each
Participant may direct how the Trustees shall act in relation to that
Participant's Plan Shares. In the absence of any direction, the
Trustees shall take no action.
12. POWER OF TRUSTEES TO RAISE FUNDS TO SUBSCRIBE FOR A RIGHTS ISSUE
If instructed by a Participant in respect of his Plan Shares the
Trustees may dispose of some of the rights under a rights issue arising
from those Shares to obtain enough funds to exercise the remaining
rights. The rights referred to are the rights to buy additional shares
or rights in the same company.
13. POWER TO AGREE MARKET VALUE OF SHARES
Where the Market Value of Shares is to be determined for the purposes
of the Schedule, the Trustees may agree with the Inland Revenue that it
shall be determined by reference to such date or dates, or to an
average of the values on a number of dates, as specified in the
agreement.
10
14. PERSONAL INTEREST OF TRUSTEES
Trustees, and directors, officers or employees of a corporate Trustee,
shall not be liable to account for any benefit accruing to them by
virtue of their:
(a) participation in the Plan as a Qualifying Employee;
(b) ownership, in a beneficial or fiduciary capacity, of any
shares or other securities in any Participating Company;
(c) being a director or employee of any Participating Company,
being a creditor, or being in any other contractual
relationship with any such company.
15. TRUSTEES' MEETINGS
If and so long as there is more than one Trustee, the Trustees shall
hold meetings as often as is necessary for the administration of the
Plan. There shall be at least three Trustees present at a meeting and
the Trustees shall give due notice to all the Trustees of such a
meeting. Decisions made at such a meeting by a majority of the Trustees
present shall be binding on all the Trustees. A written resolution
signed by all the Trustees shall have the same effect as a resolution
passed at a meeting.
16. SUBSIDIARY COMPANIES
16.1 Any Subsidiary may with the agreement of the Committee become a party
to this Deed and the Plan by executing a deed of adherence agreeing to
be bound by the Deed and Rules.
16.2 A Participating Company shall cease to be a Participating Company on
the date that it ceases to be a Subsidiary or on such date as the
Company, acting by the Committee, by deed declares.
17. EXPENSES OF PLAN
The Participating Companies shall meet the costs of the preparation and
administration of this Plan.
18. TRUSTEES' LIABILITY, INDEMNITY AND FEES
18.1 The Participating Companies shall jointly and severally indemnify each
of the Trustees, and the directors, officers and employees of a
corporate Trustee, against any expenses and liabilities which are
incurred through acting as a Trustee of the Plan and which cannot
11
be recovered from the Trust Fund and in respect of indemnities
conferred upon the Trustees by law and the Trustee Xxx 0000. This does
not apply to expenses and liabilities which are incurred through fraud,
wilful wrongdoing or negligence or are covered by insurance under
Clause 18.3.
18.2 No Trustee shall be personally liable for any breach of trust (other
than through fraud, wilful wrongdoing or negligence) over and above the
extent to which the Trustee, and the directors, officers and employees
of a corporate Trustee, are indemnified by the Participating Companies
in accordance with Clause 18.1 above.
18.3 A non-remunerated Trustee may insure the Plan against any loss caused
by him or any of his employees, officers, agents or delegates. A
non-remunerated Trustee may also insure himself and any of these
persons against liability for breach of trust not involving fraud or
wilful wrongdoing or negligence of the Trustee or the person concerned.
18.4 A Trustee who carries on a profession or business may charge for
services rendered on a basis agreed with the Participating Companies. A
firm or company in which a Trustee is interested or by which he is
employed may also charge for services rendered on this basis and may,
unless otherwise agreed, act in accordance with its general terms and
conditions from time to time in force.
19. COVENANT BY THE PARTICIPATING COMPANIES
The Participating Companies hereby jointly and severally covenant with
the Trustees that they shall pay to the Trustees all sums which they
are required to pay under the Rules and shall at all times comply with
the Rules.
20. ACCEPTANCE OF GIFTS
The Trustees may accept gifts of Shares and other assets which shall be
held upon the trusts declared by Clause 3.1 or 3.2 as the case may be.
21. TRUSTEES' LIEN
The Trustees' lien over the Trust Fund in respect of liabilities
incurred by them in the performance of their duties (including the
repayment of borrowed money and tax liabilities) shall be enforceable
subject to the following restrictions:
12
(a) the Trustees shall not be entitled to resort to Partnership
Share Money for the satisfaction of any of their liabilities;
and
(b) the Trustees shall not be entitled to resort to Plan Shares
for the satisfaction of their liabilities except to the extent
that this is permitted by the Plan.
22. AMENDMENTS TO THE PLAN
The Committee may, with the Trustees' written consent, from time to
time amend the Plan provided that:
(a) no amendment which would adversely prejudice to a material
extent the rights attaching to any Plan Shares awarded to or
acquired by Participants may be made nor may any alteration be
made giving to Participating Companies a beneficial interest
in Plan Shares; and
(b) if the Plan is approved by the Inland Revenue at the time of
an amendment or addition, any amendment or addition to a "key
feature" (as defined in paragraph 84(6) of the Schedule) of
the Plan shall not have effect unless and until the written
approval of the Inland Revenue has been obtained in accordance
with paragraph 81 of the Schedule; and
(c) any amendment to the Deed shall be made by supplemental deed;
and
(d) any amendment to the Rules may be made by supplemental deed or
resolution of the Committee.
23. TERMINATION OF THE PLAN
23.1 The Plan shall terminate:
(a) in accordance with a Plan Termination Notice issued
by the Committee acting on behalf of the Company to
the Trustees under paragraph 89 of the Schedule; or
(b) if earlier, on the expiry of the Trust Period.
23.2 The Committee shall immediately upon executing a Plan Termination
Notice provide a copy of the notice to the Trustees, the Inland Revenue
and each individual for whom the Trustees hold Plan Shares or who has
entered into a Partnership Share
13
Agreement which was in force immediately before the Plan Termination
Notice was issued.
23.3 Upon the issue of a Plan Termination Notice or upon the expiry of the
Trust Period paragraph 90 of the Schedule shall have effect.
23.4 Any Shares or other assets which remain undisposed of after the
requirements of paragraph 90 of the Schedule have been complied with
shall be held by the Trustees upon trust to pay or apply them to or for
the benefit of the Participating Companies as at the termination date
in such proportion, having regard to their respective contributions, as
the Trustees shall in their absolute discretion think appropriate.
24. NOTICES
Each advice, request, or other communication to be given or made under
the Plan shall be in writing and delivered or sent to the relevant
party at its address as notified to the other party. To the extent
agreed by the Company and the Trustees, communications between the
parties to this Deed and to Participants may also be by electronic
means.
25. PROPER LAW
This Deed and the Rules of the Plan shall be governed by and construed
in accordance with the laws of England and Wales.
14
IN WITNESS whereof this deed has been executed and delivered the day and year
first above written.
Executed as a Deed on behalf of
APACHE NORTH SEA LIMITED
by:
Director /s/ Xxxx X. Xxxx
--------------------------------------------
Director/Authorised signatory /s/ Xxxx X. Xxxxx
-----------------------
Executed as a Deed on behalf of
CAPITA IRG TRUSTEES LIMITED
by:
Authorised Signatory /s/ [Name]
--------------------------------
Authorised Signatory /s/ [Name]
--------------------------------
15
RULES OF THE APACHE U.K.
SHARE INCENTIVE PLAN
1. DEFINITIONS
2. PURPOSE OF THE PLAN
3. ELIGIBILITY OF INDIVIDUALS
4. PARTICIPATION ON SAME TERMS
5. PARTNERSHIP SHARES (PART A)
6. MATCHING SHARES (PART B)
7. FREE SHARES (PART C)
8. DIVIDEND SHARES (PART D)
9. ACQUISITION OF SHARES
10. COMPANY RECONSTRUCTIONS
11. RIGHTS ISSUES
12. LEAVERS
16
RULES
OF THE
APACHE U.K.
SHARE INCENTIVE PLAN
1. DEFINITIONS
1.1 The following words and expressions have the following meanings:
"ACCUMULATION PERIOD" in relation to Partnership Shares, the
period during which the Trustees accumulate
a Qualifying Employee's Partnership Share
Money before acquiring Partnership Shares or
repaying it to the employee
"ACQUISITION DATE" (a) in relation to Partnership Shares, where
there is no Accumulation Period, the meaning
given by paragraph 50(4) of the Schedule;
(b) in relation to Partnership Shares, where
there is an Accumulation Period, the meaning
given by paragraph 52(5) of the Schedule;
and
(c) in relation to Dividend Shares, the
meaning given by paragraph 66(4) of the
Schedule
"ASSOCIATED COMPANY" the meaning given by paragraph 94 of the
Schedule
"AWARD DATE" in relation to Free Shares or Matching
Shares, the date on which such Shares are
awarded
"AWARD" (a) in relation to Free Shares and Matching
Shares, the appropriation of Free Shares and
Matching Shares in accordance with the Plan;
and
(b) in relation to Partnership Shares, the
acquisition of Partnership Shares on behalf
of Qualifying Employees in accordance with
the Plan
17
"CAPITAL RECEIPT" the same meaning as in section 502 of ITEP
2003
"CLOSE COMPANY" the same meaning as in paragraph 100 of the
Schedule
"COMMITTEE" the committee appointed and authorised by
the board of directors of the Company to
operate the Plan
"COMPANY" Apache North Sea Limited
"CONNECTED COMPANY" the same meaning as in paragraph 18(3) of
the Schedule
"CONTROL" the same meaning as in paragraph 100 of the
Schedule
"DEALING DAY" a day on which the Stock Exchange is open
for the transaction of business
"DEED" the trust deed constituting the Plan with
any subsequent amendment thereto
"DIVIDEND SHARES" Shares acquired on behalf of a Participant
from reinvestment of dividends under Part D
of the Plan and which are subject to the
Plan
"FREE SHARE AGREEMENT" an agreement in such form as is acceptable
to the Inland Revenue
"FREE SHARES" Shares awarded under Part C of the Plan
which are subject to the Plan
"GROUP PLAN" the Plan as established by the Company and
extending to its Subsidiaries which are
Participating Companies
"HOLDING PERIOD" (a) in relation to Free Shares, the period
specified by the Committee as mentioned in
Rule 7.12;
18
(b) in relation to Matching Shares, the
period specified by the Committee as
mentioned in Rule 6.5; and
(c) in relation to Dividend Shares, the
period of 3 years from the Acquisition Date
"ICTA 1988" the Income and Corporation Taxes Xxx 0000
"INITIAL MARKET VALUE" the Market Value of a Share on an Award
Date. Where the Share is subject to a
restriction or risk of forfeiture, the
Market Value shall be determined without
reference to that restriction or risk
"ITEP 2003" Income Tax (Earnings and Xxxxxxxx) Xxx 0000
"MARKET VALUE" (a) where the Shares are listed on the Stock
Exchange
(i) if, and only if, all the Shares acquired
for Award on an Acquisition Date or an Award
Date are purchased and awarded to all
Participants on the same day, the average of
the prices paid by the Trustees for those
Shares in Sterling
or
(ii) if all the Shares acquired for Award
are not purchased and awarded to all
Participants on the same day, the Sterling
equivalent of the closing price of a Share
on the immediately preceding Dealing Day (as
derived from the Stock Exchange)
(c) on any day where (a) above does not
apply, the market value of a Share
determined in accordance with the provisions
of Part VIII of the Taxation of Chargeable
Gains Xxx 0000 and agreed
19
for the purposes of the Plan with Inland
Revenue Shares Valuation on or before that
day
"MATCHING SHARES" Shares awarded under Part B of the Plan and
which are subject to the Plan
"MATERIAL INTEREST" the same meaning as in paragraph 19 of the
Schedule
"NICs" National Insurance Contributions
"PARENT COMPANY" Apache Corporation
"PARTICIPANT" an individual who has received under the
Plan an Award of Free Shares, Matching
Shares or Partnership Shares, or on whose
behalf Dividend Shares have been acquired
"PARTICIPATING COMPANY" the Company and such of its Subsidiaries as
have executed deeds of adherence to the Plan
under Clause 16 of the Trust Deed
"PARTNERSHIP SHARE an agreement in such form as is acceptable
AGREEMENT to the Inland Revenue
"PARTNERSHIP SHARES" Shares awarded under Part A of the Plan and
which are subject to the Plan
"PARTNERSHIP SHARE MONEY" money deducted from a Qualifying Employee's
Salary pursuant to a Partnership Share
Agreement and held by the Trustees to
acquire Partnership Shares or to be returned
to such a person
"PAYE" pay as you earn as described in Section 684
of ITEP 2003
"PERFORMANCE ALLOWANCES" The criteria for an Award of Free Shares
where:
(a) whether Shares are awarded; or
20
(b) the number or value of Shares awarded
is conditional on performance targets being
met
"PLAN" this plan, being the Apache U.K. Share
Incentive Plan
"PLAN SHARES" (a) Free Shares, Matching Shares or
Partnership Shares awarded to Participants;
(b) Dividend Shares acquired on behalf of
Participants; and
(c) shares in relation to which paragraph
87(2) (company reconstructions: new shares)
of the Schedule applies
that remain subject to the Plan
"PLAN TERMINATION NOTICE" a notice issued under paragraph 89 of the
Schedule
"PROFIT SHARING SCHEME" a profit sharing scheme approved by the
Board of Inland Revenue under Schedule 9 of
ICTA 1988
"QUALIFYING COMPANY" the same meaning as in paragraph 17 of the
Schedule
"QUALIFYING CORPORATE BOND" the same meaning as in section 117 of the
Taxation of Chargeable Gains Xxx 0000
"QUALIFYING EMPLOYEE" an employee who must be invited to
participate in an award in accordance with
Rule 3.6 and any employee who the Committee
has invited in accordance with Rule 3.7
"QUALIFYING PERIOD" a period as the Committee shall in their
absolute discretion so decide being:
21
(a) in the case of Free Shares a period not
exceeding 18 months before the Award is
made;
(b) in the case of Partnership Shares and
Matching Shares where there is an
Accumulation Period a period not exceeding
six months before the start of the
Accumulation Period; and
(c) in the case of Partnership Shares and
Matching Shares where there is no
Accumulation Period a period not exceeding
18 months before the deduction of
Partnership Share Money relating to the
Award
"REDUNDANCY" the same meaning as in the Employment Rights
Xxx 0000
"RELEVANT EMPLOYMENT" employment by the Company or any Associated
Company
"RETIREMENT AGE" for the purposes of this Plan, age 50
"RULES" these Rules together with any amendments
thereto effected in accordance with Clause
22 of the Deed
"SALARY" the same meaning as in paragraph 43(4) of
the Schedule
"SCHEDULE" Schedule 2 to the Income Tax (Earnings and
Xxxxxxxx) Xxx 0000
"SHARES" shares of common stock in the capital of the
Parent Company which comply with the
conditions set out in paragraph 25 of the
Schedule
"STOCK EXCHANGE" the New York Stock Exchange (or such
successor organisation)
"SUBSIDIARY" any company which is for the time being
under the Control of the Company
22
"TAX YEAR" a year beginning on 6 April and ending on
the following 5 April
"TRUSTEES" the trustees or trustee for the time being
of the Plan or any subsequent trustee or
trustees as provided for in accordance with
Clause 7 of the Deed
"TRUST FUND" all assets transferred to the Trustees to be
held on the terms of the Deed and the assets
from time to time representing such assets,
including any accumulations of income
"TRUST PERIOD" the period of 80 years beginning with the
date of the Deed
"UK RESIDENT TAXPAYER" the same meaning as in paragraph 8(2) of the
Schedule
1.2 References to any Act, or Part, Chapter, or section (including ICTA
1988 and ITEP 2003) shall include any statutory modification, amendment
or re-enactment of that Act, for the time being in force.
1.3 Words of the feminine gender shall include the masculine and vice versa
and words in the singular shall include the plural and vice versa
unless, in either case, the context otherwise requires or it is
otherwise stated.
2. PURPOSE OF THE PLAN
The purpose of the Plan is to enable employees of Participating Companies to
acquire Shares in the Parent Company which give them a continuing stake in the
Parent Company.
3. ELIGIBILITY OF INDIVIDUALS
3.1 Subject to Rule 3.4, individuals are eligible to participate in an
Award only if:
(a) they are employees of a Participating Company;
(b) they have been employees of a Qualifying Company at all times
during any Qualifying Period;
(c) they are eligible on the date(s) set out in paragraph
16(2)-(6) of the Schedule; and
23
(d) they do not fail to be eligible under either or both Rule 3.2
or Rule 3.3.
3.2 Individuals are not eligible to participate in an Award of Shares if
they have, or within the preceding twelve months have had, a Material
Interest in:
(a) a Close Company whose Shares may be appropriated or acquired
under the Plan; or
(b) a company which has Control of such a company or is a member
of a consortium which owns such a company.
3.3 Individuals are not eligible to participate in an Award of Free Shares
in any Tax Year if in that Tax Year:
(a) they have been awarded shares under a Profit Sharing Scheme
established by the Company or a Connected Company, or are to
be awarded such shares at the same time; or
(b) they have received (or are to receive at the same time) an
award under another plan established by the Company or a
Connected Company and approved under the Schedule, or if they
would have received such an award but for their failure to
meet a performance target (see Rule 7.5).
3.4 Individuals are not eligible to participate in an Award of Partnership
Shares or Matching Shares in any Tax Year if in that Tax Year they have
received (or are to receive at the same time) an award under another
plan established by the Company or a Connected Company (as defined in
paragraph 18(3) of the Schedule) and approved under the Schedule, or if
they would have received such an award but for their failure to meet a
performance target (see Rule 7.5).
3.5 Notwithstanding any provision of any other of these Rules whatsoever:
(a) the Plan shall not form part of any contract of employment
between the Company, the Parent Company, a Subsidiary or any
Associated Company and any Participant and it shall not confer
on any Participant any legal or equitable rights (other than
those constituted by the grant of Awards themselves)
whatsoever against the Company, the Parent Company, a
Subsidiary or an Associated Company directly
24
or indirectly or give rise to any cause of action at law or in
equity against the Company, the Parent Company, a Subsidiary
or any Associated Company;
(b) participation in an Award is a matter entirely separate from
any pension right or entitlement a Participant may have and
from his terms or conditions of employment and participation
in the Plan shall in no respect whatever affect his pension
rights or entitlements or terms or conditions of employment
and in particular (but without limiting the generality of the
foregoing) any Participant who ceases to be an employee of the
Company, the Parent Company, a Subsidiary or an Associated
Company shall not be entitled to any compensation for any loss
of any right or benefit or prospective right or benefit under
the Plan which he might otherwise have enjoyed whether such
compensation is claimed by way of damages for wrongful
dismissal or other breach of contract or by way of
compensation for loss of office or otherwise howsoever and
notwithstanding that he may have been dismissed wrongfully or
unfairly (within the meaning of the Employment Rights Act
1996).
EMPLOYEES WHO MUST BE INVITED TO PARTICIPATE IN AWARDS
3.6 Individuals shall be eligible to receive an Award of Shares under the
Plan if they meet the requirements in Rule 3.1 and are UK Resident
Taxpayers. In this case they shall be invited to participate in any
Awards of Free Shares, Partnership Shares or Matching Shares, and
acquisitions of Dividend Shares, as are set out in the Plan.
EMPLOYEES WHO MAY BE INVITED TO PARTICIPATE IN AWARDS
3.7 The Committee may also invite, at their discretion, any employee who
meets the requirements in Rule 3.1 to participate in any Award of Free
Shares, Partnership Shares or Matching Shares, and acquisitions of
Dividend Shares, as are set out in the Plan. The Committee shall notify
the Trustees of employees who participate under this Rule.
4. PARTICIPATION ON SAME TERMS
4.1 Every Qualifying Employee shall be invited to participate in an Award
on the same terms. All who do participate in an Award shall do so on
the same terms.
25
4.2 The Committee may make an Award of Free Shares to Qualifying Employees
by reference to their remuneration, length of service or hours worked.
4.3 The Committee may make an Award of Free Shares to Qualifying Employees
by reference to their performance as set out in Rule 7.5.
4.4 The Participating Companies shall make contributions to the Trustees to
finance any purchase by the Trustees of Free and/or Matching Shares for
award on an Award Date.
26
PART A
5. PARTNERSHIP SHARES
5.1 The Committee may at any time invite every Qualifying Employee to enter
into a Partnership Share Agreement, should the Committee decide to
offer Partnership Shares, in accordance with this Part of the Rules.
The Committee shall determine whether there is to be an Accumulation
Period. An Accumulation Period may be up to 12 months and shall apply
equally to all Qualifying Employees in the Plan.
5.2 Partnership Shares shall not be subject to any provision under which
they may be forfeit.
MAXIMUM AMOUNT OF DEDUCTIONS
5.3 The amount of Partnership Share Money deducted from an employee's
Salary shall not exceed L125 in any month (or such other amount
as may from time to time be permitted under paragraph 46(1) of the
Schedule and approved by the Committee). If the Salary is not paid
monthly, the applicable limit shall be calculated proportionately.
5.4 The amount of Partnership Share Money deducted from an employee's
Salary over an Accumulation Period shall not exceed 10% (or such other
percentage as may from time to time be permitted under paragraph 46(2)
of the Schedule and approved by the Committee) of the total of the
payments of Salary made to such employee over that Accumulation Period
or if there is no Accumulation Period, 10% (or such other percentage as
may be permitted under paragraph 46(2) of the Schedule) of the Salary
payment from which the deduction is made.
5.5 Any amount deducted in excess of that allowed by Rule 5.3 or Rule 5.4
shall be paid over to the employee, subject to both deduction of income
tax under PAYE and NICs, as soon as practicable.
MINIMUM AMOUNT OF DEDUCTIONS
5.6 The minimum amount to be deducted under the Partnership Share Agreement
in any month shall be the same in relation to all Partnership Share
Agreements entered into in response to invitations issued on the same
occasion. It shall not be greater than L10 (or such other amount
as may be permitted under paragraph 47(1) of the Schedule and approved
by the Committee).
27
NOTICE OF POSSIBLE EFFECT OF DEDUCTIONS ON BENEFIT ENTITLEMENT
5.7 Every Partnership Share Agreement shall contain a notice under
paragraph 48 of the Schedule.
RESTRICTION IMPOSED ON NUMBER OF SHARES AWARDED
5.8 The Committee may specify the maximum number of Shares to be included
in an Award of Partnership Shares.
5.9 The Partnership Share Agreement shall contain an undertaking by the
Company to notify each Qualifying Employee of any restriction on the
number of Shares to be included in an Award.
5.10 The notification in Rule 5.9 above shall be given:
(a) if there is no Accumulation Period, before the deduction of
the Partnership Share Money relating to the Award; and
(b) if there is an Accumulation Period, before the beginning of
the Accumulation Period relating to the Award.
PLAN WITH NO ACCUMULATION PERIOD
5.11 The Trustees shall acquire Shares on behalf of the Qualifying Employee
using the Partnership Share Money. They shall acquire the Shares on the
Acquisition Date. The number of Shares awarded to each employee shall
be determined in accordance with the Market Value of the Shares on that
date.
PLAN WITH ACCUMULATION PERIOD
5.12 If there is an Accumulation Period, the Trustees shall acquire Shares
on behalf of the Qualifying Employee, on the Acquisition Date, using
the Partnership Share Money.
5.13 The number of Shares acquired on behalf of each Participant shall be
determined by reference to the lower of:
(a) the Market Value of the Shares at the beginning of the
Accumulation Period; and
(b) the Market Value of the Shares on the Acquisition Date.
5.14 If a transaction occurs during an Accumulation Period which results in
a new holding of shares being equated for the purposes
28
of capital gains tax with any of the shares to be acquired under the
Partnership Share Agreement, the employee may agree that the
Partnership Share Agreement shall have effect after the time of that
transaction as if it were an agreement for the purchase of shares
comprised in the new holding.
SURPLUS PARTNERSHIP SHARE MONEY
5.15 Any surplus Partnership Share Money remaining after the acquisition of
Shares by the Trustees:
(a) may, with the agreement of the Participant, be carried forward
to the next Accumulation Period or the next deduction date;
and
(b) in any other case, shall be paid over to the Participant,
subject to both deduction of income tax under PAYE and NICs,
as soon as practicable.
SCALING DOWN
5.16 If the Company receives applications for Partnership Shares exceeding
the Award maximum determined in accordance with Rule 5.8 then the
following steps shall be taken in sequence until the excess is
eliminated.
Step 1. the excess of the monthly deduction chosen by each
applicant over the minimum amount provided in Rule
5.6 shall be reduced pro rata;
Step 2. all monthly deductions shall be reduced to the
minimum amount provided in Rule 5.6;
Step 3. applications shall be selected by lot, each based on
a monthly deduction of the minimum amount provided in
Rule 5.6.
Each application shall be deemed to have been modified or withdrawn in
accordance with the foregoing provisions, and each employee who has
applied for Partnership Shares shall be notified of the change.
STOPPING AND RE-STARTING DEDUCTIONS
5.17 An employee may stop and re-start deductions under a Partnership Share
Agreement at any time by notice in writing to their employing company.
Unless a later date is specified in the
29
notice, such notice shall take effect as soon as practicable but in any
event no later than 30 days after their employing company receives it.
WITHDRAWAL FROM PARTNERSHIP SHARE AGREEMENT
5.18 An employee may withdraw from a Partnership Share Agreement at any time
by notice in writing to their employing company. Unless a later date is
specified in the notice, such a notice shall take effect 30 days after
their employing company receives it. Any Partnership Share Money then
held on behalf of an employee shall be paid over to that employee as
soon as practicable. This payment shall be subject to income tax under
PAYE and NICs.
REPAYMENT OF PARTNERSHIP SHARE MONEY ON WITHDRAWAL OF APPROVAL OR TERMINATION
5.19 If approval to the Plan is withdrawn or a Plan Termination Notice is
issued in respect of the Plan, any Partnership Share Money held on
behalf of employees shall be repaid to them as soon as practicable,
subject to deduction of income tax under PAYE, and NICs.
30
PART B
6. MATCHING SHARES
6.1 The Partnership Share Agreement sets out the basis on which a
Participant is entitled to Matching Shares, should the Committee decide
to offer Matching Shares, in accordance with this Part of the Rules.
GENERAL REQUIREMENTS FOR MATCHING SHARES
6.2 Matching Shares shall:
(a) be Shares of the same class and carrying the same rights as
the Partnership Shares to which they relate;
(b) subject to Rule 6.4, be awarded on the same day as the
Partnership Shares to which they relate are acquired on behalf
of the Participant; and
(c) be awarded to all Participants on exactly the same basis.
RATIO OF MATCHING SHARES TO PARTNERSHIP SHARES
6.3 The Partnership Share Agreement shall specify the ratio of Matching
Shares to Partnership Shares for the time being offered by the Company
and that ratio shall not exceed 2:1 (or such other ratio as may from
time to time be permitted under paragraph 60(2) of the Schedule and
approved by the Committee). The Committee may vary the ratio before
Partnership Shares are acquired. Employees shall be notified of the
terms of any such variation before the Partnership Shares are awarded
under the Partnership Share Agreement.
6.4 If the Partnership Shares acquired on the day referred to in Rule
6.2(b) above are not sufficient to produce a Matching Share, the match
shall be made when sufficient Partnership Shares have been acquired to
allow at least one Matching Share to be appropriated.
HOLDING PERIOD FOR MATCHING SHARES
6.5 The Committee shall, in relation to each Award Date, specify a Holding
Period throughout which a Participant shall be bound by the terms of
the Partnership Share Agreement.
31
6.6 The Holding Period shall, in relation to each Award, be a specified
period of not less than 3 years nor more than 5 years (or such other
periods as may be from time to time be specified under paragraph 61 of
the Schedule and approved by the Committee), beginning with the Award
Date and shall be the same for all Participants who receive an Award at
the same time. The Holding Period shall not be increased in respect of
Matching Shares awarded under the Plan.
6.7 A Participant may during the Holding Period direct the Trustees:
(a) to accept an offer for any of their Matching Shares if the
acceptance or agreement shall result in a new holding being
equated with those original Shares for the purposes of capital
gains tax; or
(b) to accept an offer of a Qualifying Corporate Bond (whether
alone or with other assets or cash or both) for their Matching
Shares if the offer forms part of such a general offer as is
mentioned in paragraph (c) below; or
(c) to accept an offer of cash, with or without other assets, for
their Matching Shares if the offer forms part of a general
offer which is made to holders of shares of the same class as
their Shares or to the holders of shares in the same company,
and which is made in the first instance on a condition such
that if it is satisfied the person making the offer shall have
control of that company, within the meaning of section 416 of
ICTA 1988; or
(d) to agree to a transaction affecting their Matching Shares or
such of them as are of a particular class, if the transaction
would be entered into pursuant to a compromise, arrangement or
scheme applicable to or affecting;
(i) all of the ordinary share capital of the Parent
Company or, as the case may be, all the shares of the
class in question; or
(ii) all the shares, or all the shares of the class in
question, which are held by a class of shareholders
identified otherwise than by reference to their
employment or their participation in a plan approved
under the Schedule.
32
PART C
7. FREE SHARES
7.1 The Committee may at any time invite every Qualifying Employee to enter
into a Free Share Agreement, should the Committee decide to offer Free
Shares, in accordance with this Part of the Rules.
7.2 The Trustees, acting with the prior consent of the Committee, may from
time to time award Free Shares.
7.3 The number of Free Shares to be awarded by the Trustees to each
Qualifying Employee on an Award Date shall be determined by the
Committee in accordance with this Rule.
MAXIMUM ANNUAL AWARD
7.4 The Initial Market Value of the Shares awarded to a Qualifying Employee
in any Tax Year shall not exceed L3,000 (or such other amount as
may be permitted under paragraph 35 of the Schedule and approved by the
Committee).
ALLOCATION OF FREE SHARES BY REFERENCE TO PERFORMANCE
7.5 The Committee may stipulate that the number of Free Shares (if any) to
be awarded to each Qualifying Employee on a given Award Date shall be
determined by reference to Performance Allowances.
7.6 If Performance Allowances are used, they shall apply to all Qualifying
Employees.
7.7 (a) Performance Allowances shall be determined by reference to
such fair and objective criteria (performance targets)
relating to business results as the Committee shall determine
over such period as the Committee shall specify;
(b) performance targets must be set for performance units of one
or more employees; and
(c) for the purposes of an Award of Free Shares an employee must
not be a member of more than one performance unit.
7.8 Where the Committee decides to use Performance Allowances it shall, as
soon as reasonably practicable:
33
(a) notify each employee participating in the Award of the
performance targets and measures which, under the Plan, shall
be used to determine the number or value of Free Shares
awarded to him; and
(b) notify all Qualifying Employees of the Company or, in the case
of a Group Plan, of any Participating Company, in general
terms, of the performance targets and measures to be used to
determine the number or value of Free Shares to be awarded to
each Participant in the Award.
7.9 The Committee shall determine the number of Free Shares (if any) to be
awarded to each Qualifying Employee by reference to performance using
method 1 or method 2. The same method shall be used for all Qualifying
Employees for each Award.
PERFORMANCE ALLOWANCES: METHOD 1
7.10 By this method:
(a) at least 20% of Free Shares awarded in any performance period
shall be awarded without reference to performance;
(b) the remaining Free Shares shall be awarded by reference to
performance; and
(c) the highest Award made to an individual by reference to
performance in any period shall be no more than four times the
highest Award to an individual without reference to
performance.
If this method is used:
- the Free Shares awarded without reference to performance (paragraph
(a) above) shall be awarded on the same terms mentioned in Rule 4;
and
- the Free Shares awarded by reference to performance (paragraph (b)
above) need not be allocated on the same terms mentioned in Rule 4.
PERFORMANCE ALLOWANCES: METHOD 2
7.11 By this method:
(a) some or all Free Shares shall be awarded by reference to
performance;
34
(b) the Award of Free Shares to Qualifying Employees who are
members of the same performance unit shall be made on the same
terms, as mentioned in Rule 4; and
(c) Free Shares awarded for each performance unit shall be treated
as separate Awards.
HOLDING PERIOD FOR FREE SHARES
7.12 The Committee shall, in relation to each Award Date, specify a Holding
Period throughout which a Participant shall be bound by the terms of
the Free Share Agreement.
7.13 The Holding Period shall, in relation to each Award, be a specified
period of not less than 3 years nor more than 5 years (or such other
periods as may from time to time be specified under paragraph 36(2) of
the Schedule and approved by the Committee), beginning with the Award
Date and shall be the same for all Participants who receive an Award at
the same time. The Holding Period shall not be increased in respect of
Free Shares already awarded under the Plan.
7.14 A Participant may during the Holding Period direct the Trustees:
(a) to accept an offer for any of their Free Shares if the
acceptance or agreement shall result in a new holding being
equated with those Shares for the purposes of capital gains
tax; or
(b) to accept an offer of a Qualifying Corporate Bond (whether
alone or with other assets or cash or both) for their Free
Shares if the offer forms part of such a general offer as is
mentioned in paragraph (c) below; or
(c) to accept an offer of cash, with or without other assets, for
their Free Shares if the offer forms part of a general offer
which is made to holders of shares of the same class as their
Shares, or to holders of shares in the same company and which
is made in the first instance on a condition such that if it
is satisfied the person making the offer shall have control of
that company, within the meaning of section 416 ICTA 1988; or
(d) to agree to a transaction affecting their Free Shares or such
of them as are of a particular class, if the transaction would
be entered into pursuant to a compromise, arrangement or
scheme applicable to or affecting:
35
(i) all of the ordinary share capital of the Parent
Company or, as the case may be, all the shares of the
class in question; or
(ii) all the shares, or all the shares of the class in
question, which are held by a class of shareholders
identified otherwise than by reference to their
employment or their participation in a plan approved
under the Schedule.
7.15 The performance targets and measures referred to in this Rule 7 may be
relaxed, waived, or amended if an event occurs which causes the
Committee to consider that any of the existing targets or measures have
become unfair or impractical. Provided that any such relaxation, waiver
or amendment shall be fair and reasonable and any amended target or
measure shall not be any more difficult or any less difficult to
satisfy than the original target or measure.
36
PART D
8. DIVIDEND SHARES
REINVESTMENT OF CASH DIVIDENDS
8.1 The Free Share Agreement or Partnership Share Agreement, as
appropriate, shall set out the rights and obligations of Participants
receiving Dividend Shares under the Plan.
8.2 The Committee may decide to direct the Trustees to:
(a) apply all Participants' dividends, up to the limit specified
in Rule 8.5, to acquire Dividend Shares;
(b) to pay all dividends in cash to all Participants; or
(c) to offer Participants the choice of either paragraph (a) or
(b) above.
8.3 Dividend Shares shall be Shares:
(a) of the same class and carrying the same rights as the Shares
in respect of which the dividend is paid; and
(b) which are not subject to any provision for forfeiture.
8.4 The Committee may revoke any direction for reinvestment of cash
dividends.
8.5 The amount applied by the Trustees in acquiring Dividend Shares shall
not exceed L1,500 (or such other amount as may be permitted under
paragraph 64(1) of the Schedule) in each Tax Year in respect of any
Participant. For the purposes of this Rule, the Dividend Shares are
those acquired under this Plan and those acquired under any other plan
approved under the Schedule. In exercising their powers in relation to
the acquisition of Dividend Shares the Trustees must treat Participants
fairly and equally.
8.6 If the amounts received by the Trustees exceed the limit in Rule 8.5,
the balance shall be paid to the participant as soon as practicable.
8.7 If dividends are to be reinvested, the Trustees shall apply all the cash
dividend to acquire Shares on behalf of the Participant on the Acquisition
Date. The number of Dividend Shares acquired on
37
behalf of each Participant shall be determined by the Market Value of the
Shares on the Acquisition Date.
CERTAIN AMOUNTS NOT REINVESTED TO BE CARRIED FORWARD
8.8 Subject to Rule 8.6, any amount that is not reinvested:
(a) because the amount of the cash dividend is insufficient to
acquire a Share; or
(b) because there is an amount remaining after acquiring the
Dividend Shares;
may be retained by the Trustees and carried forward to be added to the
amount of the next cash dividend to be reinvested.
8.9 If, during the period of 3 years (or such other period as may from time
to time be specified under paragraph 68(4) of the Schedule) beginning
with the date on which the dividend was paid:
(a) it is not reinvested; or
(b) the Participant ceases to be in Relevant Employment; or
(c) a Plan Termination Notice is issued
the amount shall be repaid to the Participant as soon as practicable.
On making such a payment, the Participant shall be provided with the
information specified in paragraph 80(4) of the Schedule.
HOLDING PERIOD FOR DIVIDEND SHARES
8.10 The Holding Period shall be a period of 3 years (or such other period
as may from time to time be specified under paragraph 67 of the
Schedule), beginning with the Acquisition Date.
8.11 A Participant may during the Holding Period direct the Trustees:
(a) to accept an offer for any of their Dividend Shares if the
acceptance or agreement shall result in a new holding being
equated with those Shares for the purposes of capital gains
tax; or
(b) to accept an offer of a Qualifying Corporate Bond (whether
alone or with other assets or cash or both) for their Dividend
38
Shares if the offer forms part of such a general offer as is
mentioned in paragraph (c) below; or
(c) to accept an offer of cash, with or without other assets, for
their Dividend Shares if the offer forms part of a general
offer which is made to holders of shares of the same class as
their Shares or to holders of shares in the same company, and
which is made in the first instance on a condition such that
if it is satisfied the person making the offer shall have
control of that company, within the meaning of section 416 of
ICTA 1988; or
(d) to agree to a transaction affecting their Dividend Shares or
such of them as are of a particular class, if the transaction
would be entered into pursuant to a compromise, arrangement or
scheme applicable to or affecting:
(i) all of the ordinary share capital of the Parent
Company or, as the case may be, all the shares of the
class in question; or
(ii) all the shares, or all the shares of the class in
question, which are held by a class of shareholders
identified otherwise than by reference to their
employment or their participation in a plan approved
under the Schedule.
8.12 Where a Participant is charged to tax in the event of their Dividend
Shares ceasing to be subject to the Plan, they shall be provided with
the information specified in paragraph 80(4) of the Schedule.
9. ACQUISITION OF SHARES
Awards under the Plan may be satisfied by existing Shares which are purchased by
the Trustees on the open market or at arms length from any shareholder. The
Trustees shall not have the right to subscribe to the Parent Company for newly
issued Shares in order to satisfy an Award.
39
10. COMPANY RECONSTRUCTIONS
10.1 The following provisions of this Rule apply if there occurs in relation
to any of a Participant's Plan Shares (referred to in this Rule as "the
Original Holding"):
(a) a transaction which results in a new holding (referred to in
this Rule as "the New Holding") being equated with the
Original Holding for the purposes of capital gains tax; or
(b) a transaction which would have that result but for the fact
that what would be the new holding consists of or includes a
Qualifying Corporate Bond.
10.2 If an issue of shares of any of the following description (in respect
of which a charge to income tax arises) is made as part of a company
reconstruction, those shares shall be treated for the purposes of this
Rule as not forming part of the New Holding:
(a) redeemable shares or securities issued as mentioned in section
209(2)(c) of ICTA 1988 (distributions);
(b) share capital issued in circumstances such that section 210(1)
of ICTA 1988 (bonus issues) applies; or
(c) share capital to which section 249 of ICTA 1988 (stock
dividends) applies.
10.3 In this Rule:
"Corresponding Shares" in relation to any New Shares, means the Shares
in respect of which the New Shares are issued or which the New Shares
otherwise represent;
"New Shares" means shares comprised in the New Holding which were
issued in respect of, or otherwise represent, shares comprised in the
Original Holding.
10.4 Subject to the following provisions of this Rule, references in this
Plan to a Participant's Plan Shares shall be respectively construed,
after the time of the company reconstruction, as being or, as the case
may be, as including references to any New Shares.
10.5 For the purposes of the Plan:
(a) a company reconstruction shall be treated as not involving a
disposal of Shares comprised in the Original Holding; and
40
(b) the date on which any New Shares are to be treated as having
been appropriated to or acquired on behalf of the Participant
shall be that on which Corresponding Shares were so
appropriated or acquired.
10.6 In the context of a New Holding, any reference in this Rule to shares
includes securities and rights of any description which form part of
the New Holding for the purposes of Chapter II of Part IV of the
Taxation of Chargeable Gains Xxx 0000.
11. RIGHTS ISSUES
11.1 Any shares or securities allotted under Clause 12 of the Deed shall be
treated as Plan Shares identical to the shares in respect of which the
rights were conferred. They shall be treated as if they were awarded to
or acquired on behalf of the Participant under the Plan in the same way
and at the same time as those Plan Shares in respect of which they are
allotted.
11.2 Rule 11.1 does not apply:
(a) to shares and securities allotted as the result of taking up a
rights issue where the funds to exercise those rights were
obtained otherwise than by virtue of the Trustees disposing of
rights in accordance with this Rule; or
(b) where the rights to a share issue attributed to Plan Shares
are different from the rights attributed to other ordinary
shares of the Parent Company.
12. LEAVERS
A Participant who ceases to be in Relevant Employment must remove his Shares
from the trust. Unless the Participant provides the requisite funds to the
Company or the Trustees to cover any income tax and employee's NICs liability
that may arise due to his Shares ceasing to be subject to the Plan, the Trustees
shall have the discretion to dispose of sufficient of the Participant's Shares
to meet such liabilities on behalf of the Participant.
41
