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EXHIBIT 4.4
TRUST DEED
CONSTITUTING THE
BAY NETWORKS IRELAND SHARE PARTICIPATION SCHEME
BETWEEN
BAY NETWORKS (IRELAND) LIMITED
AND
XXXXXX TRUSTEES LIMITED
AS TRUSTEES
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THIS TRUST DEED is made the 7th day of July
One thousand nine hundred and ninety nine
BETWEEN:-
(1) BAY NETWORKS (IRELAND) LIMITED a company incorporated in Ireland whose
registered office is situated at Xxxxxx Xxx Xxxxxxxx, Xxxxxxxxx Xxxxxxx,
Xxxxxx 0 (hereinafter referred to as "the Company") and
(2) XXXXXX TRUSTEES LIMITED (a company incorporated in Ireland) whose
registered office is at Xx. Xxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxx 0
(hereinafter called "the Trustees" which expression shall include the
trustee or trustees for the time being hereof)
WHEREAS
(A) By a resolution of the Board of Directors of the Company passed on the
31st March, 1999 the Directors determined to establish the Bay Networks
Ireland Share Participation Scheme, as an employees' share scheme which is
to be approved by the Revenue Commissioners in accordance with Chapter I
of Part 17 and Schedule 11 of the Taxes Consolidation Act 1997 ("the Act")
for the purpose of providing for employees and directors the benefits in
the nature of interests in shares.
(B) The Company is wholly owned by Bay Networks Inc. (hereinafter defined as
"the Parent Company") and is controlled (within the meaning of that
expression contained in Section 432 of the Act) by the Parent Company.
(C) The Trustees have agreed to act as the first trustees of the Scheme.
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(D) The Scheme will be operated and administered in accordance with the Trust
Deed and Rules.
NOW THIS DEED WITNESSETH and it is hereby agreed as follows:-
1. (a) IN this Deed unless the context otherwise requires:-
(i) "the Scheme" means the Bay Networks Ireland Share
Participation Scheme established by this Trust Deed and the
Rules as from time to time in force;
(ii) The "Rules" mean the Rules set out in the first Schedule
hereto, which shall be deemed to include the Second and Third
Schedules hereto, with, and subject to, any modifications,
alterations, amendments, or extensions thereto for the time
being in force;
(iii) "Share Fund" means all Scheme Shares for the time being
held by the Trustees;
(iv) "Residual Fund" means all moneys or Ordinary Shares directed
to be held as part of the Residual Fund or for which no
specific provision is made (other than under Clause 13) and
the income (if any) arising therefrom all of which shall be
held in accordance with Clause 13;
(v) Other words and expressions defined in the Rules shall bear
the same meanings herein where the context so admits and the
provisions of Rule 1 shall be deemed to be incorporated
herein.
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(b) The Bay Networks Ireland Share Participation Scheme is
hereby established.
2. (a) Each Participating Company shall pay to the Trustees the
amount due from it pursuant to Rule 4 for the purpose of the
acquisition of Ordinary Shares by the Trustees in accordance
with the Scheme together with any other amount required to
cover any costs, charges and expenses incurred in such
acquisition and any other expenses and charges incurred by the
Trustees in the operation of the Scheme.
(b) Each Participating Company shall provide the Trustees with all
information which is necessary for the purposes of the Scheme
and the Trustees shall be entitled to rely on such information
in good faith without further enquiry.
(c) Subject as hereafter provided the Trustees hereby covenant
with each Participating Company to apply such sums received
for that purpose in the acquisition in accordance with the
Rules of Ordinary Shares and to hold the same once
appropriated upon trust for the respective Participants
entitled thereto subject to the provisions of the Scheme.
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(d) The Trustees shall in accordance with Rule 4(h) sell or hold
so many of the Ordinary Shares acquired by them and which have
not been appropriated but will in any event appropriate any
shares held within eighteen months of acquisition.
(e) The Trustees shall hold
(i) the net proceeds of any sale made pursuant to paragraph
(d) above; and
(ii) any income therefrom,
to be applied in accordance with Clause 13.
3. THE Trustees shall hold Scheme Shares upon trust for the benefit of
the Participants to whom Scheme Shares have been appropriated in
accordance with the Rules provided always that the Trustees
(a) shall not dispose of any Scheme Share whether by transfer to a
Participant or otherwise before the end of the Period of
Retention applicable thereto except in the circumstances
mentioned in Section 511 (6) (a) (b) or (c) of the Act; and
(b) shall not dispose of any Scheme Share after the end of the
Period of Retention and before the Release Date applicable
thereto except
(i) pursuant to Rule 5 (a) and
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(ii) by a transaction which would not involve a breach of
that Participant's obligations under Section 511 (4) (c)
or (d) of the Act; and
(c) shall deal with any rights conferred in respect of Scheme
Shares to be allotted other shares, securities or rights of
any description in accordance with Paragraph 17(b) of
Schedule 11 of the Act.
4. SUBJECT to any such direction as is referred to in Section 513(3) of
the Act, the Trustees shall pay over to a Participant any money or
money's worth received by them in respect of or by reference to any of
his Scheme Shares other than money consisting of a sum referred to in
Section 511(4)(c) of the Act or money's worth consisting of New Shares
within the meaning of Section 514 of the Act.
5. AS soon as practicable after any Scheme Shares have been appropriated
to a Participant the Trustees shall give him notice in writing of
the appropriation:-
(a) specifying the number and description of those shares; and
(b) stating their Initial Market Value and their Appropriation Date.
6. THE Trustees shall prepare and keep all such accounts and records as
may be required for the purpose of the Scheme and shall once at least
in every year submit accounts to the Company and the Company may cause
such
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accounts to be made up and audited by qualified accountants. In
particular the Trustees shall:-
(a) maintain such records as may be necessary to enable them to
carry out their obligations under Chapter I of Part I7 and
Schedule 11 of the Act; and
(b) inform a Participant who becomes liable to income tax under
Schedule E in relation to the operation of the Scheme of any facts
relevant to the determination of that liability.
7. (a) The Directors may at any time direct that any Subsidiary, not
being a party to this Deed but otherwise eligible to be a
Participating Company, shall, upon entering into a Deed
supplemental hereto in such form as the Directors and the Trustees
shall require, become bound by the provisions hereof; or
(b) A Participating Company may by Deed declare that it shall no
longer be bound by the provisions of this Deed and shall thereupon
cease to be a Participating Company. Where any such Deed is
executed a copy thereof shall be furnished to the Trustees
forthwith upon the execution thereof.
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8. THE Trustees shall not be liable to satisfy any monetary obligations
under the Scheme (including but without prejudice to the generality of
the foregoing any monetary obligations to Participants) beyond the sums
of money (including income) from time to time in their hands or under
their control as Trustees of the Scheme and properly applicable for
that purpose.
9. (a) THE costs, charges, expenses and other liabilities of the
establishment of the Scheme and of the preparation and
execution of this Deed shall be borne by the Company.
(b) All costs, charges, expenses and other liabilities of, and
incidental to, the administration, operation and determination
of the Scheme (including any remuneration of the Trustees and
any tax or duty for which the Trustees may be accountable to
the Revenue Commissioners arising from or in connection with
the Scheme) shall be borne by the Participating Companies in
proportion to the number of Scheme Shares for the time being
appropriated to their respective Participants or otherwise as
the Directors may determine if and to the extent that the same
cannot properly be paid by the Trustees out of funds in their
hands available for the purpose. Provided that the Trustees
shall be liable for any liability to tax, properly incurred by
the Trustees, in the course of the operation of the Scheme.
10 (a) No Trustee for the time being of the Scheme and no director or
employee of any corporate trustee shall be responsible
chargeable or liable in any manner whatsoever for or in
respect of any loss of or
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any depreciation in or default upon any of the investments
securities stocks or policies in or upon which any part of the
Scheme may at any time be invested or for any delay which may
occur from whatever cause in the investment of any moneys
belonging thereto or for the safety of any securities or
documents of title deposited by the Trustees for safe custody
or for the exercise of any discretionary power vested in the
Trustees by this Deed (including any act or omission by any
committee appointed by the Trustees) or by reason of any other
matter or thing except fraud or deliberate culpable disregard
of the interests of all or of any of the beneficiaries under
the Scheme PROVIDED THAT a corporation which is a Trustee of
the Scheme and which is engaged in the business of providing a
trustee service for a fee shall be liable for negligence.
(b) Each of the Trustees and each director and employee of any
corporate trustee shall be indemnified by the Participating
Companies against all liabilities incurred by such Trustee in
the execution of the trusts of and in the management and
administration of the Scheme other than liabilities arising as
a consequence of fraud or deliberate and culpable disregard of
the interests of all or of any of the beneficiaries under the
Scheme or (in the case of a corporate trustee which is engaged
in the business of providing a trustee service for a fee)
negligence and to the extent that the Participating Companies
fail to indemnify each such Trustee he shall be indemnified
out of the Scheme.
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11. (a) The Trustees shall have full power and discretion to agree
with the Company all matters relating to the operation and
administration of the trusts of this Deed so that no person
claiming any interest under such trusts shall be entitled to
question the legality and correctness of any arrangement or
agreement made between the Company and the Trustees in
relation to such operation and administration.
(b) The Company hereby declares and confirms the independence of
the trustees in the exercise of all their functions and
obligations under the Scheme and undertakes that it shall not
seek to influence them in any manner, save in such manner as
specifically provided for in the Rules or the Trust Deed. The
Trustees shall administer the Scheme impartially and in strict
accordance with the Trust Deed and Rules hereof.
(c) The Trustees shall comply with any directions given by the
Directors pursuant to the Trust Deed and Rules and shall not
be under any liability in respect thereof to any Participating
Company. In no event may the Directors direct the Trustees to
distribute any Ordinary Share or Scheme Share to any
Participating Company. Each Participating Company agrees to
indemnify the Trustees in respect of any liability arising to
any participant as a result of the Trustees complying with any
directions given by the Directors pursuant to the Trust Deed
and Rules.
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12. (a) ANY Trustee may retire from the trusts hereby constituted
at any time by giving to the Company and the remaining
Trustees (if any) written notice and the Company shall accept
such written notice within the following three months and the
retiring Trustee shall thereupon retire and shall not be
responsible for any costs occasioned by such retirement.
(b) Where a body corporate is acting as sole Trustee the Company
may by resolution of the Directors, with the prior written
approval of the Revenue Commissioners, remove that Trustee or
any of them from office and forthwith upon the passing of such
resolution such removal shall be immediately effective.
(c) The Company may by Deed appoint a new Trustee or Trustees in
place of any Trustee or Trustees who retire or are removed
from office under sub-clause (a) or sub-clause (b) of this
Clause and may by Deed appoint an additional Trustee or
Trustees.
(d) The minimum number of Trustees shall be three unless a body
corporate shall be a Trustee in which case that body
corporate may be sole Trustee.
(e) If the Company shall not appoint a new Trustee or new Trustees
with effect from the date of expiry of the notice referred to
in sub-clause (a) of this Clause the Trustees may exercise
such power by executing
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an instrument in writing signed by them as is necessary to
appoint a new Trustee or new Trustees.
(f) The Trustees (as a body of persons) shall be resident in the
Republic of Ireland for the purposes of the Taxes Acts.
13. THE Trustees shall hold and apply the Residual Fund as follows:-
(i) in paying the costs, charges and expenses incurred in the
operation of the Scheme as they in their absolute discretion
shall determine; and
(ii) subject thereto, if so instructed by the Directors in
accordance with Rule 4 to acquire Ordinary Shares and to hold
the same until they are appropriated in accordance with
the provisions of the Scheme; and
(iii) subject as aforesaid any moneys at any time which are not
immediately required to be applied by the Trustees in a
particular manner may be placed on deposit (either with or
without interest) with any bank or other deposit taking
institution in Ireland as the Trustees may determine; and
(iv) upon the determination of the Scheme and to the extent that
the Residual Fund has been applied as aforesaid the Trustees
shall convert the Residual Fund to moneys and shall pay or
transfer any moneys then comprised in the Residual Fund to any
companies which at the date of such determination were
Participating Companies in proportion to the total moneys
provided by each of them to the Trustees. In the event of any
dispute as to the persons entitled to any part of the Residual
Fund the Trustees shall convert
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such part into cash and pay the cash into Court and shall
thereupon be discharged from all obligations in relation
thereto. In no event may any Ordinary Shares which are part of
the Residual Fund be distributed to a Participating Company
under this Trust Deed.
14. (a) ANY Trustee being an individual shall be entitled to receive
and retain as remuneration for his service hereunder such sum
or sums as may from time to time be agreed with the Company.
(b) Any Trustee, being a solicitor, accountant, stockbroker, or
engaged in any other profession or business, shall be entitled
to be paid all reasonable professional or proper charges for
services rendered including acts which such Trustee, not being
engaged as aforesaid, could have done personally.
(c) Any Trustee, being a body corporate, (whether or not a trust
corporation) may charge and be paid such reasonable
remuneration or charges as shall from time to time be agreed
in writing between the Company and such body corporate and any
such body corporate (being a bank) shall be entitled (without
being liable to account for any profit or advantage so
obtained) to act as banker and perform any services in
relation to the Scheme on the same terms as would be made with
a customer in the ordinary course of its business as banker.
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15 (a) ANY Trustee, otherwise eligible to be a Participant, may
be so and may retain for his absolute benefit all the interest
to which he is entitled as a Participant in any Scheme Shares
acquired or received for him and any other money or money's
worth accruing to him as such and exercise all rights to which
he is entitled as a Participant.
(b) No decision of or exercise of a power by the Trustees shall be
invalidated or questioned on the ground that the Trustees or
any individual trustees of the Scheme or any member of the
Board of Directors of a corporate trustee of the Scheme had a
direct or personal interest as a beneficiary under the Scheme
in the result of any such decision or in the exercising of
such power.
16. ANY Trustee, who shall be or become a director of or holder of any
other office or employment in any Participating Company, may retain for
his own absolute benefit any fees or remuneration received by him in
connection with such office or employment notwithstanding that his
appointment to or retention of such office or employment may be
directly or indirectly due to the exercise or non-exercise of any votes
in respect of shares or other securities in the Company held by the
Trustees or other persons on their behalf under the trusts of the
Scheme.
17. NO Trustee, nor any holding company of a corporate Trustee, nor any
subsidiary of such holding company, nor any director or officer of a
body corporate acting as Trustee shall be precluded from underwriting,
purchasing, holding, dealing in and disposing of any stock, shares or
other securities whatsoever of any Participating Company or any
subsidiary or
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holding company thereof or any subsidiary of any such holding company
or from otherwise at any time contracting or entering into any
insurance, financial or other transaction with any such company or
being interested in any such transaction or accepting and holding the
trusteeship of any debenture stock or other securities of any such
company neither shall such Trustee be liable to account for any profit
made by him thereby or in connection therewith.
18. (a) IN the event of the appointment of Trustees other than a body
corporate as sole Trustee:-
(i) the Trustees (which in this Clause shall include the
duly authorised officer of a body corporate which is
a Trustee) may at any time but shall at least once in
every year meet together for the despatch of business
and may adjourn and otherwise regulate their meetings
as they think fit and the Trustees may elect one of
their number to be chairman of their meeting provided
that in the event of equality of votes on the
election of a chairman he shall be chosen by lots;
(ii) all business brought before a meeting of the Trustees
shall be decided by a majority of the votes of the
Trustees present and voting thereon and, in the case
of equality of votes, the chairman of the meeting
shall have a second or casting vote;
(iii) a resolution in writing signed by all of the Trustees
shall be as effectual as if it had been passed at a
meeting of the
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Trustees and may consist of one or more documents in
similar form each signed by one or more of the
Trustees; and
(iv) two Trustees present at a meeting of the Trustees of
which notice has been given to all Trustees shall
form a quorum.
(b) The Trustees shall cause proper minutes to be kept and entered
in a book provided for the purpose of all their resolutions
and proceedings and any such minutes shall be signed by the
chairman of the next succeeding meeting.
19. (a) Subject to sub-Clause 9(b) the Trustees may, in any particular
case or cases, decide not to commence or pursue proceedings
for the recovery of any moneys due to them from any
Participant and shall not be responsible for any loss incurred
by their so doing.
(b) Valid and effectual receipts and discharges for any moneys or
other property payable, transferable, or deliverable to the
Trustees or any of them may be given by a Trustee who is a
body corporate or by any one Trustee to whom such duty may
have been delegated pursuant to sub-Clause (d) below or by any
person from time to time nominated by the Company and
authorised in writing for the purpose by all the Trustees.
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(c) The Trustees may from time to time appoint for the proper
administration and management of the Scheme such secretarial
or executive officers or staff or other persons as they
consider desirable and the Directors shall approve on such
terms as they think fit.
(d) The Trustees may from time to time in writing delegate any
business and the exercise of any of the duties imposed on them
by the Scheme to any one or more of their number.
(e) The Trustees may employ and pay for the services of such
registrars, solicitors or other professional or business
advisers as they consider desirable to advise on any business
to be done in connection with the Scheme or for the proper
administration and management of the Scheme or otherwise in
connection therewith.
(f) The Trustees may at any time cause any part of the trust
property to be deposited for safekeeping with any one or more
of the Trustees or any other persons (including any company or
corporation) on behalf of the Trustees and may pay any
expenses in connection therewith.
(g) The Trustees shall not be liable or responsible for any loss
to the trust property which may be occasioned as a result of
the exercise of the foregoing powers except to the extent that
such loss arises as a result of any fraud, wilful default or
negligence on the part of such Trustees.
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20. (a) THE Company with the concurrence of the Trustees may at
any time and from time to time, in the case of this Deed, by
deed supplemental hereto and, in the case of the Rules, by
resolution of the Directors modify, alter, amend or extend the
Scheme in any respect (such modification, alteration,
amendment or extension being referred to in this Clause as an
"amendment") provided that
(i) no amendment shall alter to the disadvantage of a
Participant his rights in respect of any Scheme
Shares appropriated before the date of such
amendment;
(ii) no amendment shall be made which would or might
infringe any rule against perpetuities or which could
result in the Scheme ceasing to be an employees'
share scheme;
(iii) no amendment shall take effect unless the prior
written approval of the Revenue Commissioners to the
Scheme as amended thereby shall have first been
obtained.
(iv) no amendment shall be made which would entitle a
Participating Company to receive a distribution of
or have any rights in an Ordinary Share or Scheme
Share under this Deed.
(b) The Directors may, by resolution, subject to proviso (ii) of
sub-Clause (a) of this Clause but notwithstanding the
remaining provisions of that sub-clause and without otherwise
obtaining the
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prior approval thereto of any other person, modify or alter or
amend the Scheme in any way which may be necessary in order to
secure the initial approval of the Scheme by the Revenue
Commissioners under Chapter I of Part I7 of the Act and
Schedule 11 to that Act.
21. THE Scheme and the trusts hereby created shall be determined on the
happening of either of the following:-
(i) the date on which the Directors resolve to terminate the Scheme
which they shall be entitled to do only on a date on which there
is no Scheme Share or Ordinary Share held pursuant to this
Trust Deed; or
(ii) the expiry of twenty one years after the death of the last
survivor of the issue living on the date of this Deed of the late
President of Ireland Xxxxx xx Xxxxxx.
22. Neither the Trustees nor any Participating Company shall be obliged to
perform any obligation under this Deed or the Rules to the extent that
such action would be contrary to any enactment or Exchange Control or
other regulation for the time being in force in Ireland.
23. The Trustees shall make all such returns as the Revenue Commissioners
may from time to time require.
24. All disputes and differences arising out of the Scheme or otherwise in
connection therewith may be referred by the Trustees to arbitration
pursuant
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to the provisions of the Arbitration Acts of 1954 and 1980 and any
Participant so affected shall submit to such arbitration.
25. THIS Deed shall be governed by and construed in accordance with the
Laws of Ireland.
IN WITNESS whereof the Deed has been executed by each of the parties the day and
year first before written.
EXECUTED on behalf of BAY NETWORKS (IRELAND) LIMITED
_____________________________ Director/Secretary
_____________________________ Director
Present when the Common Seal of XXXXXX TRUSTEES LIMITED was affixed hereto
_____________________________ Director
_____________________________ Director/Secretary
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THE FIRST SCHEDULE
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RULES OF THE
BAY NETWORKS IRELAND SHARE PARTICIPATION SCHEME
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1. DEFINITIONS
In these Rules and in the Trust Deed:-
(a) the following words and expressions shall have the following
meanings:-
"ACT" the Taxes Consolidation Xxx 0000;
"ANNOUNCEMENT DATE" the day or days following the Cut-Off
Dates in each year on which the Company notifies each Eligible
Employee of his Entitlement under the Scheme;
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"APPROPRIATE PERCENTAGE" the meaning given to that expression
by Section 511(3) of the Act;
"APPROPRIATION DATE" in respect of any Scheme Share not being
a New Share, the date on which it is appropriated to an
Eligible Employee pursuant to Rule 4(f), and in respect of any
New Share the date on which it is deemed to have been
appropriated pursuant to Rule 6(d);
"APPROVED SCHEME" a scheme approved by the Revenue
Commissioners for the purposes of Chapter I of Part I7 of the
Act, and Schedule 11 to that Act;
"AUDITORS" the auditors for the time being of the Company;
"CAPITAL RECEIPT" the meaning given to that expression by
Section 513 of the Act;
"COMPANY" Bay Networks (Ireland) Limited;
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"CORRESPONDING SHARES" the meaning given to that expression by
Section 514(1) of the Act;
"CUT-OFF DATE" 1st of April in each year or such other date or
dates as the Company shall from time to time, with the
approval of the Revenue Commissioners decide;
"DIRECTORS" the board of directors for the time being of the
Company or a duly authorised committee or officer appointed by
them for the purposes of administering the scheme;
"ELIGIBLE EMPLOYEE" at any Cut-Off Date any person who
(i) (A) is, and has been for a period of at least six
months ending on the Cut-Off Date, an employee
or director of a Participating Company;
(B) is chargeable to tax under Schedule E in respect
of that employment; or
(ii) is any other employee of a Participating Company
including a Director who has a contract of employment
with such a Participating Company and has been
nominated by the Directors for Participation in the
Scheme;
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Provided that any such person is not ineligible to become a
Participant by virtue of the provisions of Part 4 of Schedule
11 to the Act.
"ENTITLEMENT" the amount of each Eligible Employee's entitlements shall
be determined in accordance with the Third Schedule to the Trust Deed
or on such other basis as may, from time to time, be agreed in writing
with the Revenue Commissioners provided that
(i) an Eligible Employee shall only have such entitlement if he is
employed by a Participating Company on the relevant Appropriation
Date; and
(ii) an Eligible Employee who, on the relevant Appropriation Date is
ineligible to participate by virtue of Part 4 of Schedule 11 to
the Act shall have no such entitlement; and
(iii) all Eligible Employees shall be entitled to participate in this
Scheme on similar terms subject to Paragraph 4(2) of Part 2 of
Schedule 11 to the Act;
"INITIAL MARKET VALUE" means the market value within the meaning of
Section 548 of the Act of Ordinary Shares to be appropriated to an
Eligible Employee on an Appropriation Date or such other date as may,
from time to time, be agreed in writing between the Revenue
Commissioners and the Trustee pursuant to Section 510(2) of the Act;
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"INVITATION PERIOD" such period following the relevant Cut-Off Date as
the Directors shall prescribe for the purposes of Rule 2 for the
completion and return of contracts being not less than 14 days;
"LOCKED-IN VALUE" the meaning given to that expression by Section
512(1) of the Act;
"NEW SHARES" the meaning given to that expression by Section 514(1) of
the Act;
"ORDINARY SHARES" Common Stock of or such other Security of the Parent
Company which satisfy the provisions of Part 3 of Schedule 11 to the
Act.
"PARENT COMPANY" Bay Networks Inc. whose registered office is at 0000
Xxxxx Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, XX 00000, XXX;
"PARTICIPANT" any individual in respect of whom the beneficial interest
in Scheme Share is held;
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"PARTICIPATING COMPANY" any company being the Company or a Subsidiary
which is for the time being bound by the provisions of the Trust Deed
other than in its capacity as Trustee hereof;
"PERIOD OF RETENTION" the meaning given to that expression by Section
511(1) of the Act;
"PROFIT SHARING PERIOD" any period not exceeding 12 months commencing
on a Cut-Off Date and ending on the next following Cut-Off Date;
"RELEASE DATE" the meaning given to that expression by Section 511(2)
of the Act;
"RESIDUAL FUND" the meaning given to that expression by Clause 1(a)(iv)
of the Trust Deed;
"RULES" the meaning given to that expression by Clause 1(a)(ii) of the
Trust Deed;
"SCHEME" the Scheme constituted by the Trust Deed of which these Rules
form part;
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"SCHEME SHARE" any Share of Common Stock or other security of the
Parent Company which has been appropriated in accordance with Rule 4(f)
or has been deemed to have been appropriated in accordance with Rule
6(d) and is for the time being held by the Trustees on behalf of a
Participant;
"SUBSIDIARY" any subsidiary of the Company which is controlled by the
Company control being construed in accordance with Section 432 of the
Act;
"TAXABLE AMOUNT"
(i) on a disposal of Scheme Shares pursuant to a direction given
by a Participant under Rule 5(a)(i), the Appropriate
Percentage of whichever is the lesser of the Locked-in Value
of the Scheme Shares so disposed of or an amount equal to the
proceeds of disposal;
(ii) on a transfer of Scheme Shares pursuant to a direction given
by a Participant under Rule 5(a)(ii), the appropriate
percentage of the Locked-in Value of the Scheme Shares so
transferred;
(iii) in the case of a Capital Receipt, the amount chargeable to
income tax in accordance with the provisions of Section 513 of
the Act;
"TRUST DEED" the trust deed constituting the Scheme to which these
Rules are scheduled together with these Rules and any modification and
variations thereto for the time being in force;
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"TRUSTEES" the trustee or trustees for the time being of the Scheme;
"YEAR OF ASSESSMENT" the meaning given to that expression by Section 2
of Part 1 of the Act;
(b) words importing the singular shall include the plural and
vice versa and words importing the masculine shall include the
feminine;
(c) any reference to any statute (or a particular Chapter, Part or
Section thereof) shall mean and include any statutory
modification or re-enactment thereof for the time being in
force and any regulations made thereunder.
2. CONDITIONS OF PARTICIPATION
Each Eligible Employee shall, on each occasion on which the Directors
intend to operate the Scheme, be offered participation by the Directors
in the Scheme as soon as is practicable after the relevant Cut-Off
Date. If he shall accept such offer he shall be required to complete a
contract of participation in the form set out in the Second Schedule to
the Trust Deed (or such Schedule as amended from time to time with the
concurrence of the Trustees and the prior written approval of the
Revenue Commissioners) (the "contract") which will confirm that he
wishes to participate in respect of the relevant Appropriation Date.
The contract shall be addressed to the
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Company and the Trustees not later than the expiry of the Invitation
Period. An Eligible Employee shall not be entitled to an Appropriation
of Scheme Shares unless he has completed a contract in respect of the
relevant Appropriation Date.
The signed contract shall bind each Eligible Employee in contract with
the Company and the Trustees in accordance with its terms in
consideration of any subsequent appropriation to him of Scheme Shares
unless he shall have previously varied its terms by notice in writing
addressed to the Company and the Trustees.
3. RIGHTS OF EMPLOYEES
Participation in this Scheme by an Eligible Employee is a matter
entirely separate from any pension right or entitlement he may have
from his terms or conditions of employment and participation in this
Scheme shall in no respects whatever affect in any way an Eligible
Employee's pension rights or Entitlements or terms or conditions of
employment and in particular (but without limiting the generality of
the foregoing words) any Eligible Employee who leaves the employment of
the Company shall not be entitled to any compensation for any loss of
any right or any benefit or prospective right or benefit under this
Scheme 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.
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3. ALLOCATION, ACQUISITION OF SHARES AND APPROPRIATION
(a) As soon as practicable following the Cut-Off Dates in each
year in which the Directors intend to operate the Scheme the
Directors shall determine the amount (if any) of the
Entitlements.
On each announcement date the Company shall issue a notice in
the form set out the Second Schedule (or such other forms as
may be approved by the Company) to each Eligible Employee of
the amount of his Entitlement. The Company shall notify each
Eligible Employee that if he wishes to have all or part of his
Entitlement paid to him in cash, then he must elect to do so
by notice in writing to the Company not later than 14 days
after the Announcement Date or within such longer period as
the Company may allow. If the Eligible Employee so elects then
the amount covered by such election shall be paid to the
Eligible Employee by the Company through its payroll system.
If no such election is made such amount shall be paid to the
Trustees to be applied by them in acquiring on his behalf
Ordinary Shares. Each Eligible Employee may increase his
Entitlement by an amount equal to a maximum of 7.5 % of his
basic gross salary, by giving appropriate instructions to the
Company no later than the date he submits a contract of
participation in respect of each relevant Appropriation Date.
(b) Each Participating Company shall as soon as practicable after
the expiry of the Invitation Period to which the Entitlements
relate pay to the Trustees the appropriate aggregate amounts
due following the completion and return of contracts in
accordance with Rule 2 by Eligible Employees employed by it
less any amount of the Residual Fund which the Directors may
have directed the Trustees to apply in
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the acquisition of Ordinary Shares for appropriation to such
Eligible Employees and any Ordinary Shares forming part of the
Residual Fund which the Directors may have directed the
Trustees to appropriate to such Eligible Employees.
(c) As soon as reasonably practicable after the confirmed receipt
from the Participating Companies of the amounts referred to in
paragraph (b) of this Rule the Trustees will apply the
aggregate of such amounts together with any amount of the
Residual Fund directed by the Directors to be so applied in
accordance with paragraph (b) of this Rule in the acquisition
of Ordinary Shares for appropriation to each such Eligible
Employee in accordance with the provisions of this Rule on the
basis that the aggregate Initial Market Value of the Ordinary
Shares appropriated to him is as nearly as possible pro rata
to the amount of his Entitlement that has been paid to the
Trustees. Provided that in the case of any Eligible Employee
in any Year of Assessment neither the total of the
Entitlements nor the aggregate Initial Market Value of Scheme
Shares appropriated shall exceed the amount for the time being
specified as being the limit on individual appropriations for
the purposes of paragraph 3(4) of Schedule 11 to the Act.
(d) Where, due to circumstances outside their control the Trustees
are unable to acquire sufficient Ordinary Shares by the
purchase or subscription of Ordinary Shares as directed by the
Directors to satisfy in full appropriations pursuant to Rule
4(c) the Trustees shall reduce the appropriations pro-rata.
This shall not preclude the
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Trustees from taking whatever time they and the Directors feel
is reasonable in the particular circumstances to acquire
ordinary shares subject to the provisions of Rule 4(f) and
Rule 4(g) below.
(e) If the basis on which the Ordinary Shares are appropriated
would otherwise give rise to the appropriation of a fraction
of an Ordinary Share the Trustees shall round such
appropriation up or down to the next whole Ordinary Share as
they in their absolute discretion think fit. In the event that
a portion of the Ordinary Shares acquired by the Trustees
carries the right to receive any dividends which have been
declared the Trustees shall appropriate those dividends among
Eligible Employees in the same proportions as provided in
paragraph (c) of this Rule.
(f) The Trustees shall appropriate the Ordinary Shares so
acquired on one day within thirty days of the expiry of the
Invitation Period.
(g) To the extent that the Trustees have not applied the whole of
the amount received by them in the acquisition of Ordinary
Shares in accordance with paragraph (c) of this Rule within
thirty days of the confirmed receipt from the Participating
Companies of the amounts referred to in paragraph (b) of this
Rule, they shall pay the balance thereof to the Participating
Companies who provided the same.
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(h) The Trustees shall at the discretion of the Directors either
sell for the best consideration in money reasonably obtainable
at the time any Ordinary Shares which they do not appropriate
under this Rule and retain the net proceeds of sale or retain
such Ordinary Shares as part of the Residual Fund.
(j) If following the date on which the Trustees are entered on the
Parent Company's register of members but before the
Appropriation Date of any Ordinary Shares the Trustees shall
become entitled in respect of such shares to
(i) any dividends or other distribution they shall
retain same as part of the Residual Fund; or
(ii) any other rights to be allotted securities in the
Parent Company (other than an issue of capitalisation
shares of the same class as Ordinary Shares then held
by the Trustees pending an appropriation which
capitalisation shares shall be retained by the
Trustees and shall form part of the Ordinary Shares
to be appropriated) they shall use their best
endeavours to sell those rights for the best
consideration in money reasonably obtainable at the
time and the Trustees shall retain the proceeds as
part of the Residual Fund.
(k) No Ordinary Shares shall be appropriated to any Eligible
Employee after a date three years prior to the expiry of the
period specified in
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Clause 21 (ii) of the Trust Deed or other such earlier date as
the Directors by resolution decide.
(l) The Directors may determine at any Cut-Off Date that there
shall be no Entitlements and may so decide at any subsequent
Cut-Off Date.
5. CONDITIONS OF RETENTION AND DISPOSAL
(a) Scheme Shares shall subject as hereinafter provided in this
Rule be held by the Trustees until the date on which the
Participant concerned directs the Trustees:-
(i) to sell Scheme Shares; or
(ii) to transfer the legal ownership of Scheme Shares to
himself;
provided that as soon as may be practical following the
Release Date applicable thereto the Trustees will transfer the
legal ownership of Scheme Shares to the Participant.
(b) In the event of the death of a Participant prior to the
Release Date the Trustees will transfer the legal ownership of
Scheme Shares to the estate of the Participant.
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(c) A Participant shall not be entitled to give any direction
under paragraph (a) of this Rule or to assign or charge or
otherwise dispose of his beneficial interest in any Scheme
Shares before the end of the Period of Retention applicable to
such Scheme Shares except in the circumstances mentioned in
Sections 511(6) (a), (b) or (c) of the Act.
Subject to paragraph (b) of this Rule during the Period of Retention,
the Trustees shall disregard any direction given in respect of the
disposal or transfer of a Participant's Scheme Shares and shall not be
required or bound to act in accordance therewith if to their knowledge
such Participant is or would following implementation of such direction
be in breach of his obligations in respect of such Scheme Shares under
paragraph (c) of this Rule.
6. RIGHTS ISSUE OR REORGANISATION
(a) In the event of the Parent Company proposing to make a rights
issue in respect of any class of its share capital which
includes Scheme Shares, and subject to the parent Company
complying with Part XII of the Companies Xxx 0000 and the
European Communities (Transferable Securities and Stock
Exchange) Regulations 1992, the Trustees shall, immediately
upon receipt of the offer from the Parent Company, notify each
Participant of the following options in respect of the Scheme
Shares held by the Trustees on his behalf:-
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(i) to instruct the Trustees to exercise the rights in
respect of all his Scheme Shares provided that such
instruction is accompanied by payment in cash of the
amount necessary to exercise such rights; or
(ii) to instruct the Trustees to exercise the rights in
respect of some only of his Scheme Shares and to
dispose of the rights nil paid in respect of the
remainder and either
(A) to pay to the Trustees any amount in excess of
the amount of the disposal proceeds necessary to
exercise such rights; or
(B) to instruct the Trustees to pay to him any
amount of the disposal proceeds in excess of the
amount necessary to exercise such rights; or
(iii) to instruct the Trustees to dispose of the rights nil
paid in respect of all his Scheme Shares and pay the
proceeds to the Participant.
The Participant shall instruct the Trustees accordingly within
any period of time specified by the Trustees and shall, if
appropriate, pay to the Trustees in cash any amounts necessary
in order to carry out such instructions. The Trustees shall
subject to receipt of the cash as aforesaid carry out the
instructions of the Participants within the period of time
allowed by the Parent Company, or as the case may
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be, the Company for exercise of the rights. If a Participant
shall fail to give any direction to and shall not otherwise
have authorised the Trustees, they shall sell all rights in
respect of the Participants Scheme Shares nil paid and pay the
proceeds to that Participant.
(b) In the event that the Trustees do not receive what they
consider sufficient notice of the offer to enable them to
operate the provisions of Rule 6(a) above from the Parent
Company or from any third party by whom the shares are held on
behalf of the Trustees, they may (subject of Part XII of the
Companies Xxx 0000 and the European Communities (Transferable
Securities and Stock Exchange) Regulations 1992) take such
action as they deem to be appropriate in the circumstances
including the disposal of the rights nil paid in respect of
the Scheme Shares and payment of the proceeds to the
Participants and no liability shall attach to the Trustees
consequent on taking such action, and in particular any
disposal of rights pursuant to this sub-clause shall be deemed
to be a disposal of rights pursuant to a direction given on
behalf of a Participant within the meaning of the Act.
(c) In the event of an offer being made or a transaction being
proposed in any of the circumstances described in Section
511(6) (a), (b) or (c) of the Act, the Trustees shall
forthwith notify each Participant and shall act in accordance
with the instructions of the Participant in dealing with his
Scheme Shares and in the absence of any such instructions
shall take no action.
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(d) Any New Shares allotted to the Trustees pursuant to paragraphs
(a) or (c) of this Rule or on a capitalisation issue shall be
deemed to have been appropriated to a Participant on the
Appropriation Date of the Scheme Shares in respect of which
they were allotted.
(e) In the event that any Participant shall on the Trustees
receiving any securities as provided in this Rule be entitled
in respect of his Scheme Shares to a fraction of any such
security, the Trustees shall use their best efforts to sell
such securities as represent the aggregate of the fractions so
arising and shall distribute the proceeds of sale (after
deducting any expenses of sale and any taxation which may be
payable by the Trustees in respect thereof) to the
Participants concerned provided that any such entitlement
which is less than IR(pound)1 shall be retained by the
Trustees and held as part of the Residual Fund.
6. PAYMENTS AND TRANSFERS TO PARTICIPANTS
(a) If any amount falls to be paid to a Participant prior to the
Release Date in respect of his Scheme Shares being:-
(i) the proceeds of a sale of Scheme Shares pursuant to
a direction given by the Participant under
Rule 5(a)(i); or
(ii) a Capital Receipt
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the Trustees shall pay such amount to the Participant.
(b) If a Participant directs the Trustees to transfer the
ownership of any Scheme Shares to himself pursuant to Rule
5(a)(ii) before their Release Date, he shall pay to the
Trustees, before the transfer takes place, a sum equal to
income tax at the standard rate on the Taxable Amount at the
time of the direction.
(c) If, following a company reconstruction as defined in Section
514(2) of the Act, the Trustees are allotted any shares or
other securities which are not New Shares they shall forthwith
transfer the same to the Participant.
(d) Any stamp duty involved in any transfer of Scheme Shares or
other shares or securities by the Trustees into the name of
the Participant concerned shall be payable in the case of
(i) a transfer as referred to in Rule 5(a); or
(ii) a transfer following the death of a Participant; or
(iii) a transfer as referred to in paragraph (c) of this
Rule
by the Trustees out of the Residual Fund or in the
case of a deficiency out of funds made available for
the purpose by the Participant's Participating
Company and, in any other case, shall be payable by
the Participant concerned.
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8. REPURCHASE BY TRUSTEES
(a) At the time a Participant directs the Trustees to dispose of
any Scheme shares the Trustees may offer to purchase the
beneficial interest in such Scheme Shares from the Participant
at the best consideration in money that can reasonably be
obtained at the time of the sale and such disposal shall for
the purposes of Rule 8 be regarded as a disposal in accordance
with Rule 5(a)(i).
(b) If, at the time of the proposed purchase of Scheme Shares
under paragraph (a), the Trustees do not have sufficient funds
to purchase such Scheme Shares they may apply to any
Participating Company for such funds. If any funds are so
provided by a Participating Company they shall reduce pro
tanto the liability of the Participating Company making that
payment in respect of the payment to be made by that
Participating Company pursuant to Rule 3 following the next
Invitation Period.
(c) The Trustees shall hold any Ordinary Shares purchased pursuant
to paragraph (a) upon trust for appropriation to Eligible
Employees employed by the Participating Company which provided
the funds used in the purchase of such Ordinary Shares and,
subject thereto, shall hold such Ordinary Shares as part of
the Residual Fund.
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9. PAYMENT OF DIVIDENDS
Any dividends paid by the Parent Company to the Trustees in respect of
Scheme Shares shall be forwarded to the Participants on whose behalf
the Trustees hold such Scheme Shares together with particulars of the
related tax credit.
10. GENERAL MEETINGS OF THE PARENT COMPANY AND VOTING RIGHTS
Participants have no right to attend or vote at a General Meeting of
the Parent Company. The voting rights in respect of Scheme Shares
shall, on a poll, be exercised only in accordance with any directions
in writing by the Participants concerned to the Trustees. In the
absence of any such direction, the Trustees shall abstain from voting.
11. NOTICES
(a) All notices required to be given to a Participant by the
Trustees under the Scheme shall be in writing and shall either
be delivered to the Participant at his place of work or be
sent by post to the address shown on the records of the
Trustees or of the Participating Company by which such
Participant is employed.
Any notice or document, sent by post as aforesaid, shall be
deemed to have been received on the expiry of 48 hours from
the time at which it was posted and to prove such service it
shall be sufficient to prove that the envelope containing the
notice or document was properly pre-paid, addressed and put
into the post.
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(b) Any notice or document delivered or sent by the Trustees in
the manner described in paragraph (a) of this Rule shall be
deemed for all purposes to have been sufficiently served on
the Participant and all persons claiming through or under such
Participant and accordingly service in manner aforesaid shall
operate to exonerate the Trustees from all or any liability
for the non-receipt by a Participant or other person as
aforesaid of any such notice or document.
(c) To be valid any direction to the Trustees in respect of a
Participants Scheme Shares must be given in writing by or on
behalf of such Participant and shall be effective only when it
is received by the Trustees and shall be subject to Rule 5(c).
(d) A direction once duly given and received as mentioned in
paragraph (c) of this Rule and subject to Rule 5(c) shall be
carried out by the Trustees as soon as practicable in
accordance with its terms unless prior to their acting in
respect thereof the Trustees receive written notice from the
Participant revoking the direction.
The Trustees shall incur no liability to a Participant if they
fail to act upon a direction or revocation which purports to
have been duly given as aforesaid but which had not been
received by them.
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12. THE AUDITORS
In giving any advice or opinion or in determining any value or making
any adjustment or calculation under the Scheme, the Auditors shall be
deemed to be acting as experts and not as arbitrators.
13. MISCELLANEOUS
If any matter arises on or in connection with this Scheme or its
operation for which specific provision is not made under these
rules, such matter shall be resolved, dealt with or provided for in
such manner as the Directors shall consider appropriate after taking
into account the respective interests of the Company and of the
Eligible Employees and the requirements of the Revenue Commissioners.
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THE SECOND SCHEDULE
-----------------------------
BAY NETWORKS IRELAND SHARE PARTICIPATION SCHEME
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BAY NETWORKS IRELAND LIMITED SHARE PARTICIPATION SCHEME
EMPLOYEES BOOKLET
The Bay Networks Ireland Limited Share Participation Scheme has been introduced
to enable employees to acquire shares in our parent company, Northern Telecom
Limited in a tax efficient way. Northern Telecom Limited is a public company,
quoted on the Toronto Stock Exchange.
You may use part of your Bay Pounds entitlement under the Bay Core Plus Plan
which are not allocated for other benefits to acquire shares. The amount of the
Bay Pounds which may be used for this purpose is based on the allocation to a
single person, i.e. the extra (pound)540 paid to family members is not available
for investment in shares.
You can also increase your share entitlement by foregoing salary. There is a
limit to the amount of salary that can be foregone and an overall limit of
(pound)10,000 (currently) on the value of the shares that can be allocated to
you in any tax year.
The shares will be held by the Trustees of the Scheme on your behalf. Shares
cannot normally be sold for two years from the date of allocation.
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You are not taxed on the value of the shares when they are allocated to you and,
provided the shares are left with the Trustees for three years, no subsequent
charge to income tax will arise.
This booklet gives a summary of the main provisions of the Scheme which is
governed by rules designed to meet the requirements of the Revenue
Commissioners. In the event of any discrepancy or inconsistency between this
booklet and the rules the latter will prevail.
If you require further information or wish to see a copy of the Rules you should
ask Xxxxxx Xxxxxx.
You should note that although the shares are potentially a very good investment
they could also go down in value as with any investment in company shares. You
should bear this in mind when deciding how much to invest in the Scheme.
JANUARY 1999
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1. WHO IS ELIGIBLE TO PARTICIPATE IN THE SCHEME?
You are eligible to participate if:-
i. you are employed in the Republic of Ireland by Bay Networks Ireland
Limited and are liable to income tax on your earnings from that
employment; and
ii. you have completed at least six months service with Bay Networks
Ireland Limited at the "cut-off date", i.e. the 1st April each year
iii. you are not serving notice of termination of your contract of
employment
2. WHEN CAN I PARTICIPATE?
You normally have two opportunities each year to participate in the Scheme.
I. BAY POUNDS
At the beginning of each Flex Plan year you can opt to invest part of
your Bay Pounds to acquire shares. Details of the amounts available for
this purpose will be provided to you at this time.
At the end of the Plan year you will be asked to confirm your decision
by completing an Application Form. A specimen form is attached.
II. SALARY FOREGOING
In any year in which you opt to invest any of your Bay Pounds to
acquire shares you may also increase your share entitlement by
foregoing salary.
Salary foregoing involves opting for a reduced salary with the amount
of reduction used to purchase shares. If you opt for salary foregoing
your salary will be reduced on the first paydate after the 6th April
each year. Should the amount foregone be greater than is available for
investment in shares the excess will be paid to you through the
payroll.
The maximum amount which can be used to purchase shares under salary
foregoing is the lesser of (i) the amount allocated from Bay Pounds and
(ii) 7 1/2% of salary. In addition the total value of your share
purchases in any one tax year cannot exceed the legal maximum
(currently (pound)10,000).
If you opt for salary foregoing you will be asked to complete an
Acceptance Letter at the start of the initial tax year agreeing to the
reduction in salary - a specimen form is attached. Any monies available
under salary foregoing to purchase shares will be invested at the end
of the tax year.
III.INITIAL PARTICIPATION
When you decide to participate in the Scheme initially you must sign a
Form of Acceptance and a Contract of Participation addressed to the
Company and the Trustees of the Scheme. A specimen form is attached.
3. HOW MANY SHARES WILL BE ALLOCATED TO ME?
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The number of shares allocated to you will depend on the amount of Bay
Pounds which you decide to use to purchase shares, any salary foregone for
shares and the price of the shares at the date of allocation. The sum
available will be used to purchase ordinary shares in Northern Telecom
Limited which will be held on your behalf by the Trustees. Details of all
purchases will be sent to you by the Trustees.
4. HOW LONG MUST I LEAVE MY SHARES WITH THE TRUSTEES?
Your shares must normally be held by the Trustees for a minimum period of
two years from the date on which they are allocated to you. During this
period you may not deal with your shares in any way, e.g. you may not sell
them, give them away or pledge them as security unless within that period:-
i. You cease to be employed by the Company because of injury,
disability or redundancy; or
ii. You reach State Pension Age (66 years).
In either of these circumstances your shares may be sold or transferred to
you. In the event of your death your shares may be sold or transferred to
your legal personal representatives.
5. WHEN CAN I SELL MY SHARES OR HAVE THEM TRANSFERRED INTO MY NAME?
At any time after the end of the two years from the date the shares were
allocated to you, you may instruct the Trustees to sell your shares for you
or to transfer them into your name so that you may keep them or deal with
them as you wish. However, as you will see from question 7 below, if you
instruct the Trustees to do either of these things within three years from
the date your shares were allocated to you, you will have to pay some
income tax. Therefore, unless you instruct them to do otherwise, the
Trustees will continue to hold your shares for you until three years from
the date of allocation.
6. WILL I ENJOY THE RIGHTS OF A SHAREHOLDER WHILE MY SHARES ARE HELD BY
THE TRUSTEES?
Yes, through the Trustees who hold the shares on your behalf and who will
carry out your instructions. You will receive any dividends declared and be
eligible to participate in any bonus or rights issues of new shares.
However, until your shares are transferred into your own name, or are sold
by the Trustees on your instructions, they will appear on the Northern
Telecom Limited register of shareholders in the name of the Trustees. It is
therefore, the Trustees, as the holders of the shares, who will have the
legal right to attend and vote at general meetings.
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7. WHEN AM I TAXED ON MY SHARES?
I. ON ALLOCATION OF SHARES
You are not taxed on the value of your shares when they are first
allocated to you
II. ON SALE OR TRANSFER
After the initial period of two years mentioned in question 4 you can
ask the Trustees either to sell your shares, or transfer them into your
name.
If the sale or transfer takes place before the Trustees have held the
shares for three years the Trustees are obligated to deduct income tax
at the standard rate on 100% of the lesser of the then value of the
shares or the amount you paid for them originally.
If you leave the shares with the Trustees for 3 years before asking for
them to be sold or transferred you will have no liability for income
tax on the value of the shares.
III. CAPITAL GAINS TAX
If your shares are sold by the Trustees or later by yourself for more
than their original value you may be liable to capital gains tax on any
increase over that value. However, under present tax law there is no
capital gains tax on any gain, calculated after indexation relief, you
make on the sale provided your capital gains from all sources in the
year do not exceed the current personal exemption limit of
(pound)1,000. (A separate limit of (pound)1,000 available to spouses
cannot be offset against any such gains).
The (pound)1,000 exemption applies to your capital gains from all
sources. Tax law changes from time to time and you should confirm the
position before the shares are sold.
8. HOW DO I RECEIVE DIVIDENDS?
Any dividends declared on the ordinary shares of Northern Telecom Limited
will be paid to you with tax deducted at source. If you are liable to
income tax at the higher rate you must declare the amount of dividends on
your tax returns and you may be liable for additional tax depending on your
marginal rate of tax.
9. WHAT IF I LEAVE THE COMPANY?
If you leave the Company other than because of retirement at State Pension
Age, injury, disability or redundancy, your shares will continue to be held
by the Trustees as if you were still employed by the Company and at any
time after two years from the date the shares were first allocated to you,
you can instruct the Trustees to sell the shares or transfer them into your
name.
10. WHAT HAPPENS IS I LEAVE BECAUSE OF INJURY, DISABILITY OR REDUNDANCY OR I
REACH STATE PENSION AGE?
If you leave the Company at any time because of injury, disability or
redundancy, or if you reach age 66 (whether or not you also leave the
Company), you may ask the Trustees to sell your shares or transfer them
into your name. If the sale or
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transfer occurs within three years from the date shares were first
allocated to you, then in these particular circumstances the proportion
liable to income tax (see question 7) is only 50%. If the sale or transfer
occurs later, then as previously indicated no income tax will be payable.
In either case there may be some capital gains tax to pay on a sale - see
question 7 (iii).
11. WHAT HAPPENS IF I DIE?
In the event of your death your shares may be transferred to your legal
personal representatives or they may be sold and the proceeds paid to them.
No income tax or capital gains tax will be payable at the time of transfer
or sale (regardless of how long the shares have been held in trust).
12. WHAT IF NORTHERN TELECOM LIMITED HAS A RIGHTS ISSUE?
Your position in the event of a rights issue is fairly complex. Should
Northern Telecom Limited make a rights issue full details of your rights
and your consequential tax position will be notified to you.
13. WHAT IF NORTHERN TELECOM LIMITED MAKES A BONUS ISSUE?
Bonus shares issued in respect of shares held on your behalf by the
Trustees will be treated for all purposes of the Scheme as if they had been
allocated to you at the same time as the original shares to which they
relate.
14. WHAT IF THERE IS A TAKEOVER BID FOR THE NORTHERN TELECOM LIMITED?
In the event of a takeover bid full details of the bid, your rights and
your consequential tax position will be notified to you.
15. WHO ARE THE TRUSTEES OF THE SCHEME?
Xxxxxx Trustees Limited are Trustees of the Scheme. They are responsible
for the management and administration of the Scheme and for looking after
your interests as a shareholder.
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SPECIMEN
PART 1
(TO BE COMPLETED WHEN AN EMPLOYEE FIRST OPTS TO PARTICIPATE IN THE SCHEME)
FORM OF ACCEPTANCE AND
CONTRACT OF PARTICIPATION
TO: BAY NETWORKS IRELAND LIMITED ("THE COMPANY")
and
TO: XXXXXX TRUSTEES LIMITED ("THE TRUSTEES")
FROM: SURNAME_______________________________________________________
FORENAME(S)___________________________________________________
HOME ADDRESS _________________________________________________
______________________________________________________________
1. I have read a copy of the Employee Booklet describing the Scheme.
2. I wish to participate in the Scheme and in consideration thereof and of any
appropriation to me of Scheme Shares in accordance with the provisions of
the Scheme I bind myself in contract with the Company and the Trustees and
I agree to be bound by the Rules of the Scheme (including any amendments or
additions made thereto in accordance with the provisions of the Scheme and
in particular:
a) to permit Scheme Shares appropriated to me to be held by the Trustees
throughout the applicable Period of Retention (normally two years after
the Appropriation Date on which shares are allocated to me by the
Trustees);
b) not to assign, charge or otherwise dispose of my beneficial interest
in the said Shares during the Period of Retention;
c) not to direct the Trustees to dispose of the said Shares before the
applicable Release Date (at present three years after the Appropriation
Date) in any other way except by sale for the best consideration in
money that can reasonably be obtained at the time of the sale; and
d) if I direct the Trustees of the Scheme to transfer the ownership of any
of the said Shares into my name before the applicable Release Date, I
undertake to pay the Trustees, before the transfer takes place, a sum
equal to the income tax at the standard rate on the appropriate
percentage of the Locked-in Value (the initial value except in special
circumstances which will be notified to you) of the said Shares at the
time of the direction as notified to me by the Trustees.
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3. I accept that the dividend tax voucher which I will receive from the
Trustees in respect of any of my Scheme Shares will be in full satisfaction
of any rights I have to a tax deduction certificate from the Trustees.
4. I undertake to notify the Trustees of any change in my address.
5. I understand that this contract is binding in respect of all appropriation
of Scheme Shares to me at any time unless I have previously varied its
terms in writing to the Company and the Trustees and they have consented to
such variation.
Signed : ______________________________
Date : ________________________________
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SPECIMEN
PART 2
(TO BE COMPLETED EACH TIME AN ALLOCATION FROM BAY POUNDS IS MADE
TO ACQUIRE SHARES)
APPLICATION FORM
TO : BAY NETWORKS IRELAND LIMITED ("THE COMPANY")
and
TO : XXXXXX TRUSTEES LIMITED ("THE TRUSTEES")
FROM : SURNAME__________________________________________________________
FORENAME(S)_____________________________________(MR./MRS./MISS)
HOME ADDRESS_____________________________________________________
I have received notification of the amount of Bay Pounds available to me
to acquire shares as set out in the Company letter dated ... and I wish to
allocate (pound).... of these Pounds to acquire shares under the Share
Participation Scheme.
Signed : ______________________________
Date : ________________________________
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SPECIMEN
PART 3
(TO BE COMPLETED THE FIRST TIME SALARY FOREGOING IS REQUIRED)
ACCEPTANCE LETTER FOR NEW PAY AND BENEFIT TERMS
AS A RESULT OF SALARY FOREGOING.
HR MANAGER
BAY NETWORKS IRELAND LIMITED
With effect from ... I accept the following changes to my pay and benefit terms:
i) My basic salary is reduced by ...% (between 1/2% and 7 1/2% of salary - do
not use fractions other than 1/2%).
ii) I will have an entitlement to shares under the Bay Networks Ireland Limited
Share Participation Scheme each year equivalent to the amount by which my
salary is foregone (in addition to any other entitlement as a result of any
Bay Pounds used to purchase shares).
I also acknowledge that I have read notes 1-4 below.
Signed: ____________________________________________________________________
Date: ____________________________________________________________________
Name: ____________________________________________________________________
Address: ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
PRSI No.: ____________________________________________________________________
NOTES:
1. Your total share allocation in respect of any tax year cannot exceed the
limit permitted by legislation - currently (pound)10,000. If you insert a
percentage in (i) above, which with any Bay Pounds allocated to shares will
produce a sum in excess of (pound)10,000, your share allocation will be
limited to this amount and the percentage under (i) above will be adjusted
accordingly in the next available payroll.
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2. Salary foregoing cannot apply in any tax year in which you do not use any
of your Bay Pounds to purchase shares.
3. All your benefits and future reviews will be calculated by reference to
salary before foregoing. However salary foregoing could have an impact on
your retirement benefits if you are close to retirement; if you are paying
maximum Additional Voluntary Contributions (AVCs) it may also be necessary
to restrict the amount that can be paid. In either case you should seek
advice on your position.
4. Subject to 1 and 2 above the amount of any salary foregone will be applied
to purchase shares at the same time that any Bay Pounds is also being
applied (usually in March of each year).
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THE THIRD SCHEDULE
-----------------
BAY NETWORKS IRELAND
SHARE PARTICIPATION SCHEME
--------------------------------
BASIS OF CALCULATION OF ENTITLEMENTS
1. The entitlement of each Eligible Employee under the Scheme shall be
calculated as such total amount of Bay Pounds, if any, allocated by the
Company under the Bay Networks Core Plus Plan (currently 2.5.% of basic
gross salary plus (pound)140) and which may be applied by an employee
to provide such benefits as are provided under that Plan including
shares, and
2. Each Eligible Employee shall have the option to forego between 0.5% and
7.5% of basic gross salary towards Ordinary Shares subject to this
election not exceeding the amount applied to shares under 1 above.
Provided that, in the case of any Eligible Employee the total of the
Entitlements in any Year of Assessment shall not exceed the amount for the time
being specified as being the limit on individual appropriations for the purposes
of paragraph 3(4) of Schedule 11 to the Act.
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