Exhibit 4(c)
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THE TIMKEN COMPANY
AND
TIMKEN UK LIMITED
AND
MOURANT ECS TRUSTEES LIMITED
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TRUST DEED AND RULES
OF THE
TIMKEN SHARE INCENTIVE PLAN
OCTOBER 2002
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INLAND REVENUE REFERENCE A1654
THE TIMKEN 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 TIMKEN SHARE INCENTIVE PLAN
THIS DEED made on the day of 2002
BETWEEN
THE TIMKEN COMPANY whose principal place of business is situated at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇, being a company incorporated under the
laws of the State of Ohio, USA ("the Company")
and
TIMKEN UK LIMITED (registered number 3392504) whose registered office is
situated at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇ (together with the Company called "the Participating Companies")
and
MOURANT ECS TRUSTEES LIMITED (registered number 576832) whose registered office
is situated at ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the
Trustees").
1. PURPOSE
The purpose of this Deed is to establish a trust for an employee share
ownership plan which satisfies Schedule 8 to the Finance ▇▇▇ ▇▇▇▇.
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. It shall
also specify whether there is to be an Accumulation Period of up to 12
months, which shall apply equally to all Qualifying Employees in the Plan.
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;
(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 this Deed and 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
two Trustees. Where there is no corporate Trustee, and the number of
Trustees falls below two, the continuing Trustee has the power to act only
to achieve the appointment of a new Trustee.
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 appointment or 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 two Trustees or a corporate Trustee immediately
after the retirement.
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 in 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) an institution authorised under the Banking ▇▇▇ ▇▇▇▇;
(b) a building society; or
(c) a relevant European institution,
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 Company regardless of the size of the Trustees'
holding of Shares, and will not be obliged to seek information about the
affairs of the Company and may leave the conduct of the Company's business
wholly to the directors or management of the 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
76 of the Schedule, they shall award such Shares only as Free Shares and
Matching Shares, and in priority to other available Shares.
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.
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 32 (power of Trustees to accept general offers);
(b) paragraph 72 (power of Trustees to raise funds to subscribe for rights
issue);
(c) paragraph 73 (meeting PAYE obligations); and
(d) paragraph 121(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 paragraph 95 of the Schedule (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 Schedule E, 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 Schedule E, Case
V of Schedule D, or Schedule F, the Trustees shall inform the Participant
of any facts which are relevant to determining that liability.
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 115 of the Schedule (company reconstructions).
This is subject to:
(a) the provisions of Part VII of the Schedule (dividend reinvestment);
(b) the Trustees obligations under paragraphs 95 and 96 of the Schedule
(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.
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 two 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 in addition to those Subsidiaries which are parties to this
Deed 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 that ceases to be a Subsidiary shall cease to be a
Participating Company.
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 be recovered from the
Trust Fund and in respect of indemnities conferred upon the Trustees by
law and the Trustee ▇▇▇ ▇▇▇▇. 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:
(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 118(3)(a) 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 4 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 Company shall have absolute discretion to terminate the Plan.
23.2 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 120 of
the Schedule; or
(b) if earlier, on the expiry of the Trust Period.
23.3 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 Agreement which was in force immediately before the
Plan Termination Notice was issued.
23.4 Upon the issue of a Plan Termination Notice or upon the expiry of the
Trust Period paragraph 121 of the Schedule shall have effect.
23.5 Any Shares or other assets which remain undisposed of after the
requirements of paragraph 121 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.
IN WITNESS whereof this deed has been executed and delivered the day and year
first above written.
Executed as a Deed on behalf of
THE TIMKEN COMPANY
by:
Director................................
Director/Secretary......................
Executed as a Deed on behalf of
TIMKEN UK LIMITED
by:
Director................................
Director/Secretary......................
Executed as a Deed on behalf of
MOURANT ECS TRUSTEES LIMITED
by:
Authorised Signatory....................
Authorised Signatory....................
RULES
OF THE
TIMKEN 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
RULES
OF THE
TIMKEN 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 40(2) of the Schedule;
(b) in relation to Partnership Shares, where
there is an Accumulation Period, the meaning
given by paragraph 42(3) of the Schedule; and
(c) in relation to Dividend Shares, the meaning
given by paragraph 56(3) of the Schedule
"ASSOCIATED COMPANY" the meaning given by paragraph 126 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
"CAPITAL RECEIPT" the same meaning as in paragraph 79 of the
Schedule
"CLOSE COMPANY" the same meaning as in section 414 of ICTA 1988
"COMMITTEE" the committee appointed and authorised by the
board of directors of the Company to operate the
Plan
"COMPANY" The Timken Company
"CONNECTED COMPANY" the same meaning as in paragraph 16(4) of the
Schedule
"CONTROL" the same meaning as in section 840 of ICTA 1988
"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;
(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 ▇▇▇ ▇▇▇▇
"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
"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)
(b) 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 ▇▇▇ ▇▇▇▇ and
agreed 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 15 of the
Schedule
"NICS" Employees' Class 1 National Insurance
Contributions
"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 are
parties to this Deed or have executed deeds of
adherence to the Plan under Clause 16 of the
Trust Deed
"PARTNERSHIP SHARE AGREEMENT" an agreement in such form as is acceptable 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 (in relation to income tax
assessable under Schedule E) as described in
section 203 of ICTA 1988
"PERFORMANCE ALLOWANCES" The criteria for an Award of Free Shares where:
(a) whether Shares are awarded; or
(b) the number or value of Shares awarded
is conditional on performance targets being met
"PLAN" this plan, being the Timken 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 115(5)
(company reconstructions: new shares) of the
Schedule applies
that remain subject to the Plan
"PLAN TERMINATION NOTICE" a notice issued under paragraph 120 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 14 of the
Schedule
"QUALIFYING CORPORATE BOND" the same meaning as in section 117 of the
Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇
"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:
(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 ▇▇▇
▇▇▇▇
"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 48 of the
Schedule
"SCHEDULE" Schedule 8 to the Finance ▇▇▇ ▇▇▇▇
"SHARES" shares of common stock in the capital of the
Company which comply with the conditions set out
in paragraph 59 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
"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 Deed 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
1.2 References to any Act, or Part, Chapter, or section (including ICTA 1988)
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 Company which give them a continuing stake in the 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 13(1) of the
Schedule; and
(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
16(4) 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, 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, a Subsidiary or an Associated Company directly or
indirectly or give rise to any cause of action at law or in equity
against the 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 any Company, Subsidiary or 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 chargeable to income tax
in respect of their employment under Case I of Schedule E. 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.
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.
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 (pound sterling)125 in any month (or such other amount as
may from time to time be permitted under paragraph 36(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 36(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 36(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 (pound sterling)10.
NOTICE OF POSSIBLE EFFECT OF DEDUCTIONS ON BENEFIT ENTITLEMENT
5.7 Every Partnership Share Agreement shall contain a notice under paragraph
38 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 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
(pound)5 or any other minimum amount included in the Partnership
Share Agreement shall be reduced pro rata;
Step 2. all monthly deductions shall be reduced to(pound)5 or any other
minimum amount included in the Partnership Share Agreement;
Step 3. applications shall be selected by lot, each based on a monthly
deduction of (pound)5 or any other minimum amount included in the
Partnership Share Agreement.
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 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.
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) 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 51(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.
HOLDING PERIOD FOR MATCHING SHARES
6.4 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.
6.5 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 52 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.
6.6 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 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.
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 (pound sterling)3,000 (or such other amount
as may be permitted under paragraph 24 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:
(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;
(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 31(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:
(i) all of the ordinary share capital of the 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.
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 (pound sterling)1,500 (or such other amount as may be permitted
under paragraph 54(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
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 57 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 90 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 57 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
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 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 93(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 Company for newly issued
Shares in order to satisfy an Award and the Trustees may not acquire treasury
shares from the Company to satisfy an Award. The Trustees may purchase the
beneficial interest in Shares at the best consideration in money that can
reasonably be obtained at the time of sale from a Participant who has submitted
a sale request.
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;
(b) share capital issued in circumstances such that section 210(1) of ICTA
1988 applies; or
(c) share capital to which section 249 of ICTA 1988 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
(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 ▇▇▇ ▇▇▇▇.
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
Company.
12. LEAVERS
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.