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Exhibit 4.4
PEARSON
[logo]
RULES OF THE
PEARSON PLC
1988 EXECUTIVE
SHARE OPTION SCHEME
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PEARSON plc 1988 EXECUTIVE SHARE OPTION SCHEME
NORMALISED EARNINGS PER SHARE PERFORMANCE TARGET
The condition referred to in Rule 2(2) is that, at the Accounts Date of the
Company coincident with, or following the expiry of, a Prescribed Period
relating to an Option, the Company's average annual percentage growth in its
annualised Earnings per Share over that Prescribed Period (comparing the
Basis Year with the Latest Year) is at least 2 per cent per annum greater
than the percentage increase, if any, in the RPI Index, as adjusted (if
appropriate) pursuant to paragraph 2 below, over that Prescribed Period.
The following provisions apply for the purposes of determining whether the
condition set out in this Schedule has been satisfied.
1. The following expressions have the meanings respectively ascribed to them:
ACCOUNTS means the consolidated accounts of the Company for a Financial Year
drawn up on the historical cost basis modified by the revaluation of certain
fixed assets in accordance with generally accepted accounting principles
applied consistently;
ACCOUNTS DATE means the date on which the Accounts are published;
ANNUALISED EARNINGS PER SHARE means Earnings per Share adjusted
proportionately upwards or downwards in a case where the relevant Financial
Year is greater than one calendar year;
BASIS YEAR means, in relation to the Company, the Financial Year ending
immediately before the start of the Prescribed Period;
EARNINGS PER SHARE means, for any Financial Year of the Company, the earnings
per ordinary share of the Company calculated in accordance with Financial
Reporting Standard No. 3 issued by the Accounting Standards Board Limited or
any modification thereto provided that to ensure comparability of Financial
Years of the Company within a Prescribed Period the Directors (with the
approval of the Auditors) may:
(a) adjust the figure for earnings per share as calculated in accordance with
the relevant accounting standard to arrive at a figure which reflects the
underlying business performance of the Company (and may, without limitation,
adjust by excluding extraordinary items from the earnings per share
calculation);
(b) adjust the figure for any tax charge to ensure that the deduction for
taxation in respect of the Latest Year shall be at the average tax rate
applicable to the Basis Year; and
(c) ensure that the relevant accounting standard is applied on a consistent
basis in respect of years falling within any Prescribed Periods;
EXERCISE CONDITION means the exercise condition set out in this Schedule and
referred to in Rule 2(2) of the Scheme;
FINANCIAL YEAR means an accounting reference period as defined in accordance
with section 224 of the Companies Act 1985;
LATEST YEAR means, in relation to the Company, the latest Financial Year in a
Prescribed Period for which Accounts have been published:
PRESCRIBED PERIOD means any period of three consecutive Financial Years, the
first of which shall not in any event be earlier than the Financial Year
starting immediately before the Date of Grant of the relevant Option; and
RPI INDEX means the Index of Retail prices (All Items) published by H.M.
Government.
2. Where the Latest Year is greater than one calendar year, the percentage
increase in the RPI Index for that Latest Year shall be adjusted
proportionately upwards or downwards as appropriate in order to secure that
such percentage increase is annualised in a manner consistent with the
Annualised Earnings per Share.
3. As at each Accounts Date of the Company following the expiry of a
Prescribed Period, the Company shall procure that the Auditors shall
calculate for the Company the percentage growth between the Annualised
Earnings per Share for its Basis Year and for its Latest Year and shall
report whether that percentage growth is at least 2 percent per annum above
the percentage increase per annum, if any, in the RPI Index, as adjusted (if
appropriate), pursuant to paragraph 2 above and this paragraph, over that
Prescribed Period. In making such calculations the Auditors shall make such
adjustments as they may consider appropriate to take account of any
intervening capital reorganisation of the Company, including, without
limitation, any capitalisation issue, rights issue, sub-division or
consolidation of share capital, reduction of capital or demerger within the
meaning of Section 213 to 218 of the Act and any modifications to the
relevant accounting standard.
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4. If the composition of the RPI Index changes or the RPI Index is replaced
by another similar index, the Auditors may make such adjustments to any
calculations using the RPI Index (or any replacement index) as they consider
to be fair and reasonable.
5. The Auditors shall act hereunder as experts and not as arbitrators and
their calculations shall not be open to question and their determinations
hereunder, and in particular as to whether as at any Accounts Date the
Company's percentage growth in its Annualised Earnings per Share, comparing
the Basis Year with the Latest Year, does or does not exceed by at least 2
percent per annum the percentage increase, if any, in the RPI Index over that
period, shall be final and binding on all persons concerned in the absence of
fraud. The Auditors shall be under no liability to any such person by reason
thereof or of anything done or omitted by them for the purposes thereof or in
connection therewith.
6. An Option shall be exercisable in full without regard to the Exercise
Condition where the Option is exercisable under the provisions of Rule
4(3)(a) (death), Rule 4(3)(b)(i) (injury or disability), Rule 4(3)(c)
(cessation of employment in other circumstances) or Rule 5 (various
circumstances relating to the exercise of Options following a take-over,
reconstruction or winding-up). For the avoidance of doubt, the exercise
condition shall continue to apply where the Option is exercisable under Rule
4(3)(b)(ii) (retirement).
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THE PEARSON PLC 1988 EXECUTIVE SHARE OPTION SCHEME
The Scheme was adopted on 6th May 1988 and approved by the Inland Revenue on
28th July 1988 under Schedule 9 to the Taxes Act 1988.
1. DEFINITIONS
(1) In this Scheme unless the context otherwise requires the following
words and expressions shall have the following meanings, namely:--
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<S> <C>
"the Adoption Date" The date of the adoption of the Scheme by the Company in general meeting.
"the Appropriate Limit" L30,000 or such other amount as is the amount for the time being contained in paragraph
28(1) of Schedule 9.
"Associated Scheme" Any share option scheme other than the Scheme approved under Schedule 9 (but
excluding any savings-related share option scheme) and established by the Company or an
associated company of the Company within the meaning of section 416 of the Income and
Corporation Taxes Act 1988.
"the Auditors" The Auditors for the time being of the Company (acting as experts and not as arbitrators).
"the Board" The Board of Directors of the Company or a duly appointed committee thereof.
"Certified Provision" Provision for Option Holders which the Auditors shall have reported to the Board to be in
their opinion fair and reasonable, having regard (INTER ALIA) to the tax position of Option
Holders.
"the Company" Pearson plc.
"Control" The meaning given to that word by section 840 of the Income and Corporation Taxes Act
1988.
"the Date of Grant" In relation to an Option, the day on which the Board resolves to grant the Option.
"Exercise Price" The price per Share payable on the exercise of an Option.
"Executive" Any employee or director of any company within the Group:--
(i) whose terms of service require him to work for substantially the whole of his time for
the Group and in any event in the case of a director not less than 25 hours per week
(excluding meal breaks) and in the case of an employee who is not a director as
aforesaid 20 hours per week (excluding meal breaks); and
(ii) who is not excluded from participation by paragraph 8 of Schedule 9.
"Executive Scheme" Any share option scheme under which shares may be or have been issued (other than a
savings-related share option scheme approved under Schedule 9).
"the Group" The Company and the Subsidiaries.
"Normal Retirement Date" In relation to an Executive, the date on which he is bound to retire under his contract of
employment.
"Option" A right to acquire Shares granted under the Scheme.
"Option Holder" Any individual who holds a subsisting Option and who is not excluded from participation
by paragraph 8 of Schedule 9 (or, where the context permits, the legal personal
representatives of a deceased Option Holder).
"Option Period" The period commencing on the Date of Grant of an Option and expiring ten years
thereafter.
"Reorganisation" A "reorganisation" for the purposes of sections 78 to 81 of the Capital Gains Tax Act
1979.
"Schedule 9" Schedule 9 to the Income and Corporation Taxes Act 1988.
"the Scheme" This Scheme as amended from time to time.
"Shares" Fully paid and irredeemable Ordinary Shares of 25p each in the Company which comply
with the conditions in paragraphs 10 to 14 of Schedule 9.
"Subsidiary" Any subsidiary of the Company within the meaning of section 736 of the Companies Act
1985 over which the Company has Control (and any company being a company in which
the Company directly or indirectly beneficially owns not less than 50 per cent of the
equity share capital and which has received the prior approval of the Inland Revenue to
participate in the Scheme).
"year of assessment" A period commencing on 6th April in any year and ending on 5th April in the following
year.
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(2) Where the context permits--
(a) the singular shall include the plural and vice versa and the
masculine shall include the feminine; and
(b) references to approval by the Company are references to
approval by the Company in general meeting.
(3) References to any Act shall include any statutory modification,
amendment or re-enactment thereof.
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2. GRANT OF OPTIONS
(1) The Board may, in its absolute discretion, grant Options to
Executives selected by the Board: Provided that no Executive shall be granted
an Option less than 24 months before Normal Retirement Date. Such grants
shall be subject to the rules of the Scheme and shall be evidenced by option
certificates under the seal of the Company.
(2) In granting Options the Board may, at its discretion, impose such
conditions regarding the exercise of Options as the Board thinks fit (subject
only to the approval of any such condition in advance by the Inland Revenue).
(3) Grants shall be made, if at all, within the period of six weeks
from the date of publication of the Company's interim report or preliminary
results for any period.
(4) Any Executive to whom an Option is granted may, by notice in
writing to the Company given within 30 days after the Date of Grant,
renounce in whole or in part his rights under the Option. In such a case,
the Option shall PRO TANTO be treated, for all the purposes of the Scheme, as
never having been granted and (if already issued) the option certificate
shall be returned to the Company for cancellation or (in the case of
renunciation in part) for amendment. No consideration shall be payable by the
Company for any such renunciation.
3. LIMITS
(1) Subject to adjustment pursuant to rule 6, the number of Shares that
may be issued on the exercise of Options granted under the Scheme shall be
limited in aggregate to the lesser of (a) 20 million Shares (representing 9.2
per cent of the ordinary share capital of the Company at the Adoption Date),
and (b) 5 per cent of the ordinary share capital of the Company from time to
time in issue.
(2) No Option shall be granted if the result of that grant would be
that--
(a) the aggregate number of Shares that could be issued on the
exercise of that Option and any other Options granted at the same
time when added to the number of Shares that--
(i) could be issued on the exercise of any other subsisting share
options granted during the preceding ten years under any
Executive Scheme, or
(ii) have been issued on the exercise of any share option granted
during the preceding ten years under any Executive Scheme.
would exceed 5 per cent of the ordinary share capital of the
Company for the time being in issue;
(b) the aggregate number of Shares that could be issued on the
exercise of that Option and any other Options granted at the same
time, when added to the number of Shares that--
(i) could be issued on the exercise of any other subsisting share
options granted during the preceding ten years under any
share option scheme, or
(ii) have been issued on the exercise of any share option granted
during the preceding ten years under any share option
scheme, or
(iii) have been issued during the preceding ten years under any
profit sharing or other share incentive scheme (not being a
share option scheme),
would exceed 10 per cent of the ordinary share capital of the
Company for the time being in issue; or
(c) the aggregate number of Shares that could be issued on the
exercise of that Option and any other Options granted at the same
time when added to the number of Shares that--
(i) could be issued on the exercise of any other subsisting share
options granted after the Adoption Date during the preceding
four years under any Executive Scheme, or
(ii) have been issued on the exercise of any share option granted
after the Adoption Date during the preceding four years under
any Executive Scheme.
would exceed 2 1/2 per cent of the ordinary share capital of the
Company for the time being in issue.
(3) No Option shall be granted to any Executive if the result of that grant
would be that the aggregate exercise price under all options which are
subsisting under the Scheme or an Associated Scheme, would exceed the
Appropriate Limit.
4. TERMS OF OPTIONS
(1) EXERCISE PRICE
The Exercise Price shall be determined by the Board but shall not be less
than the middle market quotation for a Share on The Stock Exchange, as
derived from the Daily Official List, for the last business day before the
Date of Grant: Provided that in relation to an Option under which Shares may
be issued upon its exercise, the Exercise Price shall not be less than the
nominal value of a Share.
(2) EXERCISE OF OPTION
(a) Save as provided in rules 4(3) and 5, an Option shall be exercisable
in whole or in part only after the third anniversary of the Date of Grant and
not later than the expiry of the Option Period.
(b) If an Option Holder ceases to be employed within the Group for any
reason whatsoever, any Option granted to him shall, save as provided in rule
4(3), lapse and not be exercisable.
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(c) An Option may be exercised only by the Option Holder's giving notice
to the Company in the form for the time being prescribed by the Board,
specifying the number of shares in respect of which the Option is being
exercised and accompanied by payment in full of the aggregate Exercise Price
of those shares. Notice must be delivered to or sent by pre-paid post to the
Company at its registered office or at such other place as the Company shall
from time to time prescribe.
(d) Notwithstanding any other provision of the Scheme an Option may not
be exercised by an individual who is excluded from participation by paragraph
8 of Schedule 9.
(3) OPTION HOLDERS LEAVING EMPLOYMENT
(a) If an Option Holder dies while in service and before the expiry of
the Option Period, his legal personal representatives shall (notwithstanding
rule 4(2)(a)) be entitled to exercise his Options during the period ending
twelve months after the date of death.
(b) If an Option Holder ceases to be employed within the Group before
the expiry of the Option Period owing to:--
(i) injury or disability (as determined by the Board); or
(ii) retirement at or after Normal Retirement Date or the date when
he becomes entitled to an immediate pension under any pension
scheme operated by a company within the Group of which he is a
director or employee (or would have the right to such a pension
if he was a member of such a scheme, but has exercised his right
not to belong to the relevant scheme),
he shall be entitled to exercise his Options (notwithstanding rule 4(2) (a))
during the period ending on the later of (i) twelve months from the date of
cessation and (ii) 42 months from the Date of Grant or (if later) the date on
which he last exercised any option granted under the Scheme or under any
other share option granted under the Scheme or under any other share option
scheme approved under Schedule 9 in circumstances in which section 185(5) (a)
and (b) of the Income and Corporation Taxes Act 1988 applied: Provided that
he shall not in any event be entitled to exercise his Options after the end of
the Option Period.
(c) The Board may, at its discretion, allow an Option Holder who has
ceased to be employed within the Group for any reason other than those
referred to in paragraphs (a) and (b) above to exercise his Options during
the period ending on the later of (i) twelve months from the date of
cessation and (ii) 42 months from the Date of Grant or (if later) the date on
which he last exercised any option granted under the Scheme or under any
other share option scheme approved under Schedule 9 in circumstances in which
section 185(5) (a) and (b) of the Income and Corporation Taxes Act 1988
applied: Provided that he shall not in any event be entitled to exercise his
Options after the end of the Option Period.
(d) For the purposes of rule 4(2) (b) and rule 4(3)(b) and (c) an Option
Holder shall not be treated as ceasing to be employed within the Group until
(i) he ceases to hold an office or employment in the Company or any company
over which the Company has Control or any associated company of the Company
within the meaning of section 416 of the Income and Corporation Taxes Act 1988
or (ii) being a female employee who is absent from work wholly or partly
because of pregnancy or confinement, she cases to be entitled to exercise her
right to return to work.
(4) INALIENABILITY OF OPTIONS
Every Option granted hereunder shall be personal to the Option Holder and,
except to the extent necessary (a) to enable a personal representative to
exercise the Option following the death of an Option Holder, or (b) to effect
the grant of a New Right under rule 5, neither the Option nor the benefit
thereof may be transferred, assigned, charged or otherwise alienated.
(5) OVERRIDING LAPSE OF OPTIONS
(a) Save as provided in rule 4(3) (a), no Option shall be capable of
being exercised after the expiry of the Option Period.
(b) If a bankruptcy order is made in respect of an Option Holder, all
Options held by him shall lapse forthwith.
5. TAKEOVER OFFERS AND LIQUIDATION
(1) If any other company ("the Acquirer"):--
(a) obtains Control of the Company as a result of making:
(i) a general offer to acquire the whole of the issued share
capital of the Company which is made on a condition such that
if it is satisfied the person making the offer will have
control of the Company, or
(ii) a general offer to acquire all the shares in the Company
which are of the same class as the Shares, or
(b) obtains Control of the Company in pursuance of a compromise or
arrangement sanctioned by the court under section 425 of the
Companies Act 1985, or
(c) becomes bound or entitled to acquire shares in the Company under
sections 428 to 430 of the Companies Act 1985;
any Option Holder may, at any time within the appropriate period defined in
paragraph 15(2) of Schedule 9 ("the Appropriate Period"), by agreement with
the Acquirer release his Option in consideration of the grant to him of a
right which is equivalent to the Option but relates to shares in the Acquirer
or some other company falling within paragraph (b) or (c) of paragraph 10 of
Schedule 9 ("the New Right").
(2) The New Right shall not be regarded for the purpose of this rule 5 as
equivalent to the Option unless:--
(a) the shares to which it relates ("the Replacement Shares") satisfy
the conditions specified, in relation to scheme shares, in
paragraphs 10 to 14 of Schedule 9; and
(b) the New Right will be exercisable in the same manner as the Option
and subject (MUTATIS MUTANDIS) to the provisions of the Scheme as
it had effect immediately before the exchange; and
(c) the total market value, as defined for the purposes of Schedule
9, immediately before the exchange, of the Shares which were
subject to the Option is, as nearly as may be, equal to, but is
not less than, the total market value (defined as aforesaid),
immediately after the exchange, of the Replacement Shares; and
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(d) the total amount payable by the Option Holder for the acquisition
of the Replacement Shares is, as nearly as may be equal to, but
is not less than, the total Exercise Price of the Shares which
were subject to the Option immediately before the exchange.
(3) For the purpose of Schedule 9 and rule 5(2)(b) any New Right granted
shall be deemed to have been granted on the date on which the equivalent
Option was granted.
(4) In the application of the Scheme to the New Right:--
(i) references to the Shares (other than in rules 1, 2, 3, 4(1), 12,
13 and 14) shall be read as if they were references to the
Replacement Shares;
(ii) references to the Company (other than in rules 1, 2, 3, 4(1), 12,
13 and 14) shall be read as if they were references to the
company to whose shares the New Right relates;
(iii) rules 5(1), 5(2), 5(3), 5(4), 5(5) and 5(6) shall apply in
respect of any change of circumstance within the terms of rule
5(1) above affecting the company to whose shares the New Right
relates as if references to the Option were references to the New
Right as it related to the shares in that company and as if
references to the Shares were references to the Replacement
Shares in respect of which that New Right was granted.
(5) Subject to rule 5(6), if for any reason whatsoever any Option Holder
does not release an Option within the Appropriate Period in accordance with
and pursuant to rule 5(1), following occurrence of any of the events
specified in rule 5(1)(a), (b) and (c), an Option Holder may exercise such
Option within either (i) 6 months after the expiry of the Appropriate Period
or (ii) within the Appropriate Period with the consent in writing of the
Acquiree except that where such period elapses before the third anniversary
of the Date of Grant of the Option, the Option may also be exercised within 6
months of such third anniversary (and, if the Option is not released or
exercised by the expiry of the last applicable time limit, it shall thereupon
lapse).
(6) Notwithstanding the foregoing provisions of this rule 5, the Acquirer
may, subject to receiving the prior written consent of the Board given prior
to the Acquirer obtaining Control of the Company, elect to permit the Scheme
to continue following his general offer. If he does so, having received the
Board's written consent as aforesaid, the Board shall forthwith inform Option
Holders; outstanding Options which are not otherwise exercisable shall not
become exercisable merely by virtue of the general office being made or of
Control of the Company having been obtained or by virtue of the Offeror
becoming bound or entitled to acquire shares in the Company under section 428
of the Companies Act 1985; not shall they lapse at the expiry of the period
referred to in rule 5(1) and (5). Instead, they will be exercisable subject
to the other rules imposed by the Scheme. If the Acquirer so agrees, any
Option Holder may release his Option in consideration for a New Right in
accordance with and pursuant to rule 5(1), notwithstanding this rule 5(6).
(7) If notice is duly given of a resolution for the voluntary winding up
of the Company then, unless the winding up is for the purposes of a
reorganisation or reconstruction which makes Certified Provision outside the
terms of the Scheme for the compensation of the Option Holders or the grant
of new Options to them, the Option Holder (or where permitted his personal
representatives) may forthwith and until the commencement of the winding up
(or if earlier the day before the tenth anniversary of the date of grant of
the relevant Option) exercise an Option, but any Option exercised pursuant to
the provisions of this rule 5(7) shall be of no effect unless the said
resolution is duly passed. Upon commencement of the winding up all Options
shall lapse and cease to be exercisable except insofar as is necessary to give
effect to the provisions of this rule 5(7).
(8) Save as mentioned in rule 5(7), all Options shall automatically
lapse and cease to be exercisable in the event of an effective resolution
being passed or order being made for the winding up of the Company and,
subject to rule 5(6), to the except Options are not released under rule 5(1)
within the Appropriate Period not duly exercised under rule 5(5) within any
of the periods provided for under 5(5), Options shall automatically lapse and
cease to be exercisable on the expiry of such period.
6. ADJUSTMENT OF OPTION
In the event of any Reorganisation of the share capital of the Company, the
total number of Shares which may be issued under the Scheme, the Exercise
Price, the definition of "Shares" and the number of Shares comprised in an
Option may be adjusted in such manner as the Board may determine and such
decision of the Board shall be final and binding on the Option Holder and the
Company: Provided always that:--
(a) in relation to an Option under which Shares may be acquired on
its exercise, no adjustment to the Exercise Price shall be made
pursuant to the provisions of this rule which would result in the
Shares subject to any Option being issued at a price lower than
their nominal value and if in the case of any Shares such an
adjustment would, but for this proviso, have so resulted, the
Exercise Price of such Shares shall be the nominal amount
thereof;
(b) no adjustment shall be made pursuant to this rule unless and
until the Auditors shall have reported in writing to the Board
that such adjustment is in their opinion fair and reasonable;
(c) no adjustment shall be made pursuant to this rule without the
prior approval of the Board of Inland Revenue;
(d) no adjustment shall be made pursuant to this rule which would
increase the aggregate Exercise Price.
7. ISSUE OR TRANSFER OF SHARES ON EXERCISE OF OPTION
Subject to any necessary consents to payment being made for the Shares and to
compliance by the Option Holder with the terms of the Scheme, the Company
shall as soon as practicable and in any event not later than 28 days after
receipt of any notice of exercise in accordance with rule 4(2)(c) issue or
procure the transfer to the Option Holder (or his nominee) the number of
Shares specified in the notice at the Exercise Price and shall deliver to the
Option Holder (or his nominee) a definitive share
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certificate in respect thereof together with, in the case of a partial
exercise of an Option, an option certificate in respect of (or the original
option certificate endorsed so as to show) the unexercised part of the Option.
8. RIGHTS ATTACHING TO SHARES ALLOTTED OR TRANSFERRED PURSUANT TO OPTION
All Shares allotted or transferred pursuant to the exercise of any Option
shall, as to voting, dividend, transfer and other rights, including those
arising on a liquidation of the Company, rank PARI PASSU in all respects and
as one class with the Shares in issue at the date of such exercise save as
regards any rights attaching to such Shares by reference to a record date
prior to the date of such exercise.
9. AVAILABILITY OF SHARES
The Company shall (a) in relation to Shares which may be issued hereunder, at
all times keep available sufficient authorised but unissued Shares to permit
the exercise of all outstanding options, and (b) procure that sufficient
Shares are available for transfer to satisfy all options under which Shares
may be acquired by way of transfer.
10. LISTING
The Company shall, at its expense, make application for, and use its best
endeavours to obtain listing for, and permission to deal on The Stock
Exchange in, Shares allotted pursuant to the exercise of any Option.
11. LOSS OF OFFICE
If any Option Holder ceases to be an Executive for any reason he shall not be
entitled by way of compensation for loss of office or otherwise howsoever to
any sum or other benefit to compensate him for the loss of any rights under
the Scheme and by accepting an Option he shall be deemed irrevocably to have
waived any right or entitlement to any such sum or other benefit.
12. POWERS OF THE BOARD
The decision of the Board shall be final and binding in all matters relating
to the Scheme and it may at any time discontinue the grant of further Options
or amend any of the provisions of the Scheme in any way it thinks fit.
Provided that:--
(a) no amendment may be made for the benefit of Option Holders to rules
1, 2, 3, 4, 5, 6, 8, 12 or 14 without the prior approval of the
Company in general meeting except in the case of an amendment which
is necessary or desirable in order to obtain or maintain Inland
Revenue approval of the Scheme under Schedule 9 or any other
enactment, or to take advantage of new legislative provisions
relating to option schemes;
(b) the Board may not cancel an Option except where the Option Holder
shall have agreed in writing to such cancellation;
(c) except as herein provided, the Board shall not make any amendment
(not being an amendment that it may make by virtue of (a) above) that
would materially prejudice the interests of existing Option Holders
except with such prior consent or sanction of Option Holders as would
be required under the provisions for the alteration of class rights
contained in the Articles of Association of the Company for the time
being if the shares to be allotted on the exercise of the outstanding
Options constituted a separate but single class of shares (or two or
more classes of shares according to their respective Dates of Grant,
as the Board may consider appropriate) and such shares were entitled
to such rights;
(d) no amendment may be made at a time when the Scheme is approved by the
Inland Revenue without the prior approval of the Inland Revenue.
13. PROVISION OF INFORMATION
The Company shall provide to the Inland Revenue, within such time as the
Inland Revenue may direct, information requested by the Inland Revenue under
paragraph 6 of Schedule 9 and an Option Holder shall:--
(a) provide to the Company in timely fashion such information as the
Company shall reasonably request; and
(b) consent to the Company's providing information concerning him to the
Inland Revenue, for the purpose of complying with such a request from
the Inland Revenue.
14. DURATION OF THE SCHEME
Notwithstanding any other provision in the Scheme no Option may be granted
under the Scheme later than ten years after the approval of the Scheme by the
Company.
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SCHEDULE
(THIS SCHEDULE, WHICH WAS ADOPTED BY THE BOARD ON 7 AUGUST 1996, DOES NOT
FORM PART OF THE SCHEME APPROVED BY THE INLAND REVENUE UNDER SCHEDULE 9. THIS
SCHEDULE APPLIES TO OPTIONS GRANTED AFTER THE DATE ON WHICH THE FINANCE ACT
1996 IS ENACTED WHERE THE BOARD WISHES TO CATEGORISE THOSE OPTIONS AS
UNAPPROVED.)
GRANT OF UNAPPROVED OPTIONS
1. Save as provided in paragraph 2 below; the provisions of the Scheme
shall apply to Executives to whom Options are granted under this Schedule.
2. With effect from the date on which the Finance Act 1996 is enacted:
(a) Rule 3(3) (as amended on 7 August 1996 to reflect the L 30,000
individual limit imposed via section 105(2) and (3) of the Finance Act 1996
in the Rules) shall not apply for the purposes of grants of Options under
this Schedule.
(b) Notwithstanding the alternation by statute of Rule 3(3) referred to
above (to impose the L 30,000 individual limit), the following provisions
shall apply for the purposes of this Schedule (reflecting Rule 3(3) in its
unamended form):
(i) No Options (but excluding for these purposes any Replacement
Option) shall be granted to any Executive if the result of that grant
would be that the aggregate exercise price under all options (other
than Replacement Options and options granted to him under a savings-
related share option scheme approved under Schedule 9) which were
granted to him during the preceding 10 years under the Scheme or any
other share option scheme established by the Company or a Subsidiary,
would exceed four times his total annual emoluments as at the proposed
Date of Grant.
(ii) A Replacement Option may be granted in excess of the limit in
paragraph (i) above provided that the aggregate exercise price under
all options (other than options granted to him under a savings-
related share option scheme approved under Schedule 9) which are
subsisting under the Scheme or any other share option scheme
established by the Company or a Subsidiary; would not exceed four
times his total annual emoluments as at the proposed Date of Grant.
(iii) For the purposes of this paragraph 2(b), the following words and
expressions shall have the following meanings:
REPLACEMENT OPTION means an Option Granted to an Executive who
could not be granted an option (not being a Replacement Option) by
reason of the limit contained in (i) above and who has before the
proposed Date of Grant thereof exercised an Option under any
Executive Scheme.
(c) If a grant of Options has been made under the Inland Revenue approved
body of the Scheme then such a grant will be taken into account when
assessing the number of Options which may be granted under this Schedule to
the Scheme so that the total of grants under both the body of the Scheme and
this Schedule does not exceed the limits set out in paragraphs 2(b)(i) and
(ii) above.
