Exhibit 10.14.2
T. ROWE PRICE GROUP, INC.
2004 STOCK INCENTIVE PLAN
HM REVENUE AND CUSTOMS APPROVED RULES FOR UK EMPLOYEES
(“THE SUB-PLAN”)
Adopted by the Company on:
Approved by the HM Revenue and Customs on:
HM Revenue and Customs reference no:
PricewaterhouseCoopers
Plumtree Court
London
EC4A 4HT

 

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SCHEDULE
T. ROWE PRICE GROUP, INC. 2004 STOCK INCENTIVE PLAN
HM REVENUE AND CUSTOMS APPROVED RULES FOR UK EMPLOYEES
(“THE SUB-PLAN”)

1.   General       This schedule to T. Rowe Price Group, Inc. 2004 Stock
Incentive Plan (“the Plan”) and appended Statement of Additional Terms and
Conditions regarding the Annual Option Grants (“the Terms”) sets out the HM
Revenue and Customs Approved Rules for UK Employees (together referred to as
“the Sub-Plan”).   2.   Establishment of Sub-Plan     T. Rowe Price Group, Inc.
(“the Company”) has established the Sub-Plan under Section 3 of the Plan1 which
authorises the Administrator to adopt and interpret such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan.   3.
  Purpose of Sub-Plan       The purpose of the Sub-Plan is to enable the grant
to, and subsequent exercise by, employees and directors in the United Kingdom,
on a tax favoured basis, of options to acquire shares in the Company under the
Plan.   4.   HM Revenue and Customs approval of Sub-Plan       The Sub-Plan is
intended to be approved by HM Revenue and Customs under Schedule 4 to ITPEA
2003.   5.   Rules of Sub-Plan       The rules of the Plan, in their present
form and as amended from time to time, shall, with the modifications set out in
this schedule, form the rules of the Sub-Plan. In the event of any conflict
between the rules of the Plan and this schedule, the schedule shall prevail.  
6.   Relationship of Sub-Plan to Plan       The Sub-Plan shall form part of the
Plan and not a separate and independent plan.   7.   Interpretation       In the
Sub-Plan, unless the context otherwise requires, the following words and
expressions have the following meanings:

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Acquiring Company
  a company which obtains Control of the Company in the circumstances referred
to in rule 26;
 
   
Approval Date
  the date on which the Sub-Plan is approved by HM Revenue and Customs under
Schedule 4 to ITEPA 2003;
 
   
Associated Company
  the meaning given to that expression by paragraph 35 of Schedule 4 to ITEPA
2003;2
 
   
Close Company
  the meaning given to that expression by 414(1) of ICTA as referred by
paragraph 37 of Schedule 4 to, ITEPA 2003;3
 
   
Consortium
  the meaning given to that word by paragraph 36(2) of Schedule 4 to ITEPA
2003;4
 
   
Control
  the meaning given to that word by section 719 of ITEPA 2003 and “Controlled”
shall be construed accordingly;5
 
   
Date of Grant
  the date on which an Option is granted to an Eligible Employee determined in
accordance with Section 6(b) of the Plan;
 
   
Eligible Employee
  an individual who falls within Section 5 of the Plan and who is:
 
   
 
 
(a)   an employee (other than a director) of the Company or a company
participating in the Sub-Plan; or
 
   
 
 
(b)   a director of the Company or a company participating in the Sub-Plan who
is contracted to work at least 25 hours per week for the Company and its
subsidiaries or any of them (exclusive of meal breaks)
 
   
 
  and who, in either case, does not have at the Date of Grant of an Option, and
has not had during the preceding twelve months, a Material Interest in a Close
Company which is the Company or a company which has Control of the Company or a
member of a Consortium which owns the Company;
 
   
Grantee
  An individual who holds an Option, or where

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  the context permits, his legal personal representatives;
 
   
ITA 2007
  The Income Tax Act 2007;
 
   
ITEPA 2003
  the Income Tax (Earnings and Pensions Act 2003);
 
   
Market Value
  notwithstanding Section 2(k) of the Plan
 
   
 
 
(a)   in the case of an Option granted under the Sub Plan:
 
   
 
 
(i)   if at the relevant time the Shares are listed on The NASDAQ Stock Market,
the NASDAQ Official Closing Price (NOCP) for the Date of Grant of the Option, or
if no reported price for that day, the preceding day for which there was a
reported price (or in the event Shares are no longer listed on The NASDAQ Stock
Market but instead are listed on another stock exchange registered with the
Securities and Exchange Commission of the United States as a national securities
exchange, the comparable last or closing selling price on that exchange);6
 
   
 
 
(ii)   if paragraph (i) does not apply, the market value of a Share as
determined in accordance with Part VIII of the Taxation of Chargeable Gains Act
1992 and agreed in advance with HM Revenue and Customs Shares Valuation on the
Date of Grant of the Option or such earlier date or dates as may be agreed with
HM Revenue and Customs;
 
   
 
 
(b)   in the case of an option granted under any other share option scheme, the
market value of an ordinary share in the capital of the Company determined under
the rules of such scheme for the purpose of the grant of the option;
 
   
Material Interest
  The meaning given to that expression by

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  paragraphs 9 to 14 of Schedule 4 to ITEPA 2003;7
 
   
New Option
  an option granted by way of exchange under rule 26.1;
 
   
New Shares
  the shares subject to a New Option referred to in rule 26.1;
 
   
Option
  a subsisting right to acquire Shares granted under the Sub-Plan;
 
   
Ordinary Share Capital
  the meaning given to that expression by section 989 of ITA 2007;
 
   
Shares
  ordinary shares of Common Stock of the Company, par value twenty cents ($0.20)
per share.

          In this schedule, unless the context otherwise requires:

  •   words and expressions not defined above have the same meanings as are
given to them in the Plan;     •   the rule headings are inserted for ease of
reference only and do not affect their interpretation;     •   a reference to a
rule is a reference to a rule in this schedule;     •   the singular includes
the plural and vice-versa and the masculine includes the feminine; and     •   a
reference to a statutory provision is a reference to a United Kingdom statutory
provision and includes any statutory modification, amendment or re-enactment
thereof.

8.   Companies participating in Sub-Plan       The companies participating in
the Sub-Plan shall be the Company and any company Controlled by the Company
which has been nominated by the Company to participate in the Sub-Plan.   9.  
Shares used in Sub-Plan       The Shares shall form part of the Ordinary Share
Capital of the Company and shall at all times comply with the requirements of
paragraphs 16 to 20 of Schedule 4 to ITEPA 2003.8   10.   Grant of Options

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    An option granted under the Sub-Plan shall be granted under and subject to
the rules of the Plan as modified by this schedule.   11.   Identification of
Options       A Grant Agreement issued in respect of an Option shall expressly
state that it is issued in respect of an Option. An option which is not so
identified shall not constitute an Option.   12.   Contents of Grant Agreement  
    A Grant Agreement, being the Sub-Plan, Terms and Notice taken together, also
referred to in the Sub-Plan as the “Agreement”, will be issued in respect of an
Option and shall state:

  •   that it is issued in respect of an Option;     •   the date of grant of
the Option;     •   the number of Shares subject to the Option;     •   the
exercise price under the Option;     •   any performance target or other
condition imposed on the exercise of the Option;     •   the date(s) on which
the Option will ordinarily become exercisable; and     •   the period during
which an Option shall remain exercisable following termination of employment.

13.   Earliest date for grant of Options       An Option may not be granted
earlier than the Approval Date.   14.   Persons to whom Options may be granted  
    Notwithstanding the provisions of Section 5 of the Plan, an Option may not
be granted to an individual who is not an Eligible Employee at the Date of
Grant.   15.   Options non transferable       An Option shall be personal to the
Eligible Employee to whom it is granted and, subject to rule 25, shall not be
capable of being transferred, charged or otherwise alienated and shall lapse
immediately if the Grantee purports to transfer, charge or otherwise alienate
the Option.       Reference in Section 7(b) of the Plan to transfers by a
Grantee otherwise than by will or the laws of descent and distribution shall be
disapplied for the purposes of the Sub-Plan.

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16.   Limit on number of Shares placed under Option under Sub-Plan       For the
avoidance of doubt, Shares placed under Option under the Sub-Plan shall be taken
into account for the purpose of Section 4 of the Plan.   17.   HM Revenue and
Customs limit (£30,000)       An Option may not be granted under this Sub-Plan
to an Eligible Employee if the result of granting the Option would be that the
aggregate Market Value of the shares subject to all outstanding options granted
to him under the Sub-Plan or any other share option scheme established by the
Company or an Associated Company and approved by HM Revenue and Customs under
Schedule 4 to ITEPA 2003 (other than a savings related share option scheme)
would exceed sterling £30,000 or such other limit as may from time to time be
specified in paragraph 6 of Schedule 4 to ITEPA 20039. For this purpose, the
United Kingdom sterling equivalent of the market value of a share on any day
shall be determined by taking the spot sterling/US dollar exchange rate for that
day as shown in the Wall Street Journal. If the grant of an Option would
otherwise cause the limit in this rule 17 to be exceeded, it shall take effect
as the grant of an option under the Plan.   18.   Exercise price under Options  
    The amount payable per Share on the exercise of an Option shall not be less
than the Market Value of a Share on the Date of Grant and shall be stated on the
Date of Grant.   19.   Performance target or other condition imposed on exercise
of Option       Any performance target or other condition imposed on the
exercise of an Option under Sections 3(b)(ii) (D) and 6(a) of the Plan, shall
be:

  19.1   objective;     19.2   such that, once satisfied, the exercise of the
Option is not subject to the discretion of any person; and     19.3   stated on
the Date of Grant.

    If an event occurs as a result of which the Administrator considers that a
performance target or other condition imposed on the exercise of an Option is no
longer appropriate and substitutes, varies or waives under Section 3(c) of the
Plan the performance target or condition, such substitution, variation or waiver
shall:

  19.4   be reasonable in the circumstances; and     19.5   produce a fairer
measure of performance and be neither more nor less difficult to satisfy.

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20.   Exercise of Options by leavers       The period during which an Option
shall remain exercisable following termination of employment, shall be stated in
the Grant Agreement.   21.   Latest date for exercise of Options      
Notwithstanding rule 25 the period during which an Option shall remain
exercisable shall be stated in the Grant Agreement and any Option not exercised
by that time shall lapse immediately.   22.   Material Interest       An Option
may not be exercised if the Grantee then has, or has had within the preceding
twelve months, a Material Interest in a Close Company which is the Company or
which is a company which has Control of the Company or which is a member of a
Consortium which owns the Company.   23.   Manner of payment for Shares on
exercise of Options       Paragraph 3 of the Terms provides for the method of
exercising the Option and payment of the exercise price, together with any
amounts due under rule 30. Notwithstanding any provisions of the Plan, the
amount may not be paid by the transfer to the Company of Shares or any other
shares or securities.   24.   Issue or transfer of Shares on exercise of Options
      Subject to compliance by the Grantee with the rules of the Sub-Plan and to
any delay necessary to complete or obtain:

  24.1   the listing of the Shares on any stock exchange on which Shares are
then listed; or     24.2   such registration or other qualification of the
Shares under any applicable law, rule or regulation as the Company determines is
necessary or desirable.

    The Company shall, as soon as reasonably practicable and in any event not
later than thirty days after the date of exercise of an Option, issue or
transfer to the Grantee, or procure the issue or transfer to the Grantee of, the
number of Shares specified in the notice of exercise and shall deliver to the
Grantee, in the case of the partial exercise of an Option, a Grant Agreement in
respect of, or the original Grant Agreement endorsed to show, the unexercised
part of the Option, subject only to:

  24.3   the making of provision for the payment or withholding of any taxes
required to be withheld in accordance with any applicable law in respect of the
exercise of the Option or the receipt of the Shares.

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  24.4   Notwithstanding Section 6(a) of the Plan, deferral of the individual’s
delivery of Shares that would otherwise be due to such individual by virtue of
the exercise of the Option is disapplied for the purposes of the Sub-Plan.

    Unless and until the Grantee requests the Company to deliver a share
certificate to the Grantee, or deliver Shares electronically or in certificate
form to the Grantee’s designated broker, bank or nominee on the Grantee’s
behalf, the Company will retain the Shares that the Grantee purchased through
exercise of the Option in uncertificated book entry form.   25.   Death of
Grantee       If a Grantee dies, his personal representatives shall be entitled
to exercise his Options for the period stated in the Grant Agreement, but in no
event later than the twelve month period following his death. If not so
exercised, the Options shall lapse immediately.   26.   Change in Control of
Company   26.1   Exchange of Options       If a company (“Acquiring Company”)
obtains Control of the Company as a result of making:

  26.1.1   a general offer to acquire the whole of the issued ordinary 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     26.1.2   a
general offer to acquire all the shares in the Company of the same class as the
Shares

    a Grantee may, at any time during the period set out in rule 26.2, by
agreement with the Acquiring Company, release his Option in whole or in part in
consideration of the grant to him of a new option (“New Option”) which is
equivalent to the Option but which relates to shares (“New Shares”) in:

  26.1.3   the Acquiring Company;     26.1.4   a company which has Control of
the Acquiring Company; or     26.1.5   a company which either is, or has Control
of, a company which is a member of a Consortium which owns either the Acquiring
Company or a company having Control of the Acquiring Company.

26.2   Period allowed for exchange of Options       The period referred to in
rule 26.1 is the period of six months beginning with the time when the person
making the offer has obtained Control of the Company and any condition subject
to which the offer is made has been satisfied.   26.3   Meaning of “equivalent”

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    The New Option shall not be regarded for the purpose of this rule 26 as
equivalent to the Option unless:

  26.3.1   the New Shares satisfy the conditions in paragraphs 16 to 20 of
Schedule 4 to ITEPA 2003; and     26.3.2   save for any performance target or
other condition imposed on the exercise of the Option, the New Option will be
exercisable in the same manner as the Option and subject to the provisions of
the Sub-Plan as it had effect immediately before the release of the Option; and
    26.3.3   the total market value, immediately before the release of the
Option, of the Shares which were subject to the Option is equal to the total
market value, immediately after the grant of the New Option, of the New Shares
(market value being determined for this purpose in accordance with Part VIII of
the Taxation of Chargeable Gains Act 1992); and     26.3.4   the total amount
payable by the Grantee for the acquisition of the New Shares under the New
Option is equal to the total amount that would have been payable by the Grantee
for the acquisition of the Shares under the Option.

26.4   Date of grant of New Option       The date of grant of the New Option
shall be deemed to be the same as the Date of Grant of the Option.   26.5  
Application of Sub-Plan to New Option       In the application of the Sub-Plan
to the New Option, where appropriate, references to “Company” and “Shares” shall
be read as if they were references to the company to whose shares the New Option
relates and the New Shares, respectively, save that in the definition of
“Administrator” the reference to “Company” shall be read as if it were a
reference to T. Rowe Price Group, Inc.   27.   Rights attaching to Shares issued
on exercise of Options       All Shares issued on the exercise of an Option
shall, as to any voting, dividend, transfer and other rights, including those
arising on a liquidation of the Company, rank equally 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.   28.   Adjustment of Options       Notwithstanding
Sections 3(b)(ii)(E) and 7(c) of the Plan, no adjustment of an Option made
pursuant to rule 8 of the Terms shall take effect until it has been approved by
HM Revenue and Customs.

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29   Tax and social security withholding   29.1   Where, in relation to the
exercise of an Option granted under the Sub-Plan the Company or, if different,
the Grantee’s employing company, is liable, or is in accordance with current
practice believed to be liable, to account to any revenue or other authority for
any sum in respect of any tax or social security liability of the Grantee, the
Option may not be exercised unless the Grantee has beforehand paid to the
Company or such employing company an amount sufficient to discharge the
liability. Alternatively, the Grantee may, by agreement with the Company, enter
into some other arrangement to ensure that such amount is available to it (for
example, by authorising the sale of some or all of the Shares subject to his
Option and the payment to the Company or such employing company of the requisite
amount out of the proceeds of sale). .Where this is the case the Option shall
not be treated as exercised until the Company determines that such arrangements
are satisfactory to it.   29.2   The Company may, at its discretion, impose
requirements for the payment by the Grantee of all or any part of the employer’s
National Insurance Contributions liability that may arise as a result of the
exercise of his Option (“Employer’s NIC”). Such requirements may include in
particular, but not by way of limitation, a determination that the Option may
not be exercised unless the Grantee has beforehand paid to the Company (or, if
different, the Grantee’s employing company) an amount sufficient to discharge
all or any part of the Employer’s NIC, as appropriate. Alternatively, the
Grantee may, by agreement with the Company enter into some other arrangement to
ensure that such amount is available to them or it (for example, by authorising
the sale of some or all of the Shares subject to his Option and the payment to
the Company of the requisite amount out of the proceeds of sale). Where this is
the case the Option shall not be treated as exercised until the Company
determines that such arrangements are satisfactory to it.   29.3   The Company
may require a Grantee to execute a copy of the Grant Agreement or some other
document in order to bind himself contractually to any such arrangement as is
referred to in rule 29.1 and/or 29.2 and return the executed document to the
Company by a specified date. Failure to return the executed document by the
specified date being no more than 30 days after the Date of Grant shall cause
the Option to lapse.   30.   Exercise of discretion by Administrator       In
exercising any discretion which it may have under the Sub-Plan, the
Administrator shall act fairly and reasonably.   31.   Disapplication of certain
provisions of Plan   31.1   The provisions of the Plan dealing with:

  •   stock appreciation rights;

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  •   stock awards;     •   incentive stock options (unless an Option is also
designated to be an incentive stock option at the Date of Grant under Clause 15
of the Statement of Additional Terms and Conditions relating to Option grants
under the Sub-Plan);     •   the authority of the Administrator to accelerate or
otherwise change the time in which an Option may be exercised or becomes payable
and waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Option, as outlined in section 3(b)(ii)(D) of the
Plan;     •   awards in substitution for stock options granted by other
entities, as outlined in Section 7(d) of the Plan; and     •   reference in
Section 7(c)(i) of the Plan to “... or the payment of a stock dividend”;     •  
the provisions of 7(c)(ii) of the Plan;     •   the provisions of 3(b)(ii)(E) of
the Plan; and     •   the provisions of 3(b)(ii)(F) of the Plan

    shall not form part of, and no such rights may be granted under, the
Sub-Plan   31.2   In rule 6 (a) of the Plan (“Awards in General”) the words “The
Administrator may permit or require a recipient of an Award to defer such
individual’s receipt of the payment of cash or the delivery of Common Stock that
would otherwise be due to such individual by virtue of the exercise of, payment
of, or lapse or waiver of restrictions respecting, any Award. If any such
payment deferral is required or permitted, the Administrator shall, in its sole
discretion, establish rules and procedures for such payment deferrals.” shall be
disapplied and of no effect.

  Notes    1   The Company is the “scheme organiser” as defined in paragraph 2
of Schedule 4 to ITEPA 2003 because it has established the Sub-Plan. In most
cases, it will also be the Company which grants options under the Sub-Plan,
although this is not a requirement of UK tax legislation.   2   A company is
treated as another’s “associated company” at a given time if, at that time or at
any other time within one year previously, one of the two has control of the
other, or both are under the control of the same person or persons. A person is
taken to have control of a company if he exercises, or is able to exercise or is
entitled to acquire, direct or indirect control over the company’s affairs and,
in particular, if

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    he possesses or is entitled to acquire the greater part of the company’s
issued share capital or the voting power in the company. UK tax legislation
contains two definitions of control: the definition of control here is different
from that in paragraph 4 below.   3   A close company is a company which is
under the control (as defined in paragraph 1 above) of five or fewer
participators (eg shareholders) or of any number of participators who are
directors. There are attributed to a participator all the rights and powers (eg
shares, voting power) of, inter alia, a company which he controls or of an
“associate” (eg relative) of his. Ordinarily, a company is excluded from being a
close company if it is non UK resident or 35% of the voting power in the company
is held by the public and its shares have been listed, and the subject of
dealings, on a recognised stock exchange within the preceding 12 months.
However, for the purpose of the material interest test (see paragraph 5 below),
this exclusion does not apply with the result that the normal definition of a
“close company” is extended.   4   A company is a member of a consortium owning
another company if it is one of a number of companies which between them
beneficially own not less than three-quarters of the other company’s ordinary
share capital and each of which beneficially owns not less than one-twentieth of
that capital.   5   In relation to a body corporate (company A), “Control” means
the power of a person (P) to secure:

(a)   by means of the holding of shares or the possession of voting power in or
in relation to that or any other body corporate; or   (b)   as a result of any
powers conferred by the articles of association or other document regulating
that or any other body corporate   that the affairs of company A are conducted
in accordance with P’s wishes.   6    In accordance with paragraph 29026 of the
HM Revenue and Customs Employee Share Schemes Manual, unless the relevant
overseas recognised stock exchange is the NYSE, NASDAQ or the American Stock
Exchange then clearance is required from HM Revenue and Customs Shares Valuation
before the quoted price on the relevant stock exchange may be used to determine
the market value of the listed share.   7     A person has a material interest
in a company if he, either on his own or with one or more associates, or if any
associate of his with or without such other associates:   (a)   is the
beneficial owner of, or able, directly or through the medium of other companies,
or by any other indirect means to control, more than 10 per cent of the ordinary
share capital of the company; or   (b)   where the company is a close company,
possesses, or is entitled to acquire, such rights as would, in the event of the
winding-up of the company or in any other circumstances, give an entitlement to
receive more than 10 per cent of the assets which would then be available for
distribution among the participators.   8     The shares used in the scheme must
be:   (a)   ordinary shares;   (b)   fully paid up;   (c)   not redeemable; and

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(d)   save for certain limited exceptions, not subject to any restrictions which
do not apply to all shares of the same class.

The shares used in the scheme must be:

(a)   of a class listed on a recognised stock exchange; or

(b)   shares in a company which is not under the control of another company; or

(c)   shares in a company which is under the control of another company (other
than a company which is, or would if resident in the UK be, a close company)
whose shares are listed on a recognised stock exchange.

The shares used in the scheme form part of the ordinary share capital of:

(a)   the grantor (ie the company which has established the scheme); or

(b)   a company which has control of the grantor; or

(c)   a company which either is, or has control of, a company which is a member
of a consortium owning either the grantor or a company having control of the
grantor.

Where the company whose shares are to be used in a scheme has more than one
class of ordinary share, the majority of the issued shares of the same class as
those which are to be used must be either employee control shares (see below)
or:

(a)   must not be held by persons (including trustees holding shares on behalf
of such persons) who acquired their shares in pursuance of a right conferred on
them or opportunity offered to them as directors or employees of any company,
and not in pursuance of an offer to the public; and

(b)   if the shares are not listed on a recognised stock exchange and the
company is under the control of another company whose shares are so listed, must
not be held by companies which have control of the company whose shares are in
question or of which that company is an associated company.

Shares are employee control shares if:

(a)   the persons holding them are, by virtue of their holding of shares of that
class, together able to control the company; and

(b)   those persons are, or have been, employees or directors of the company or
of another company which is under the control of the company.

9   UK tax legislation imposes a limit (currently £30,000) on the “value” of the
outstanding options which may be held by an individual participant in an HM
Revenue and Customs approved executive share option scheme.

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