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Exhibit 10.16
 
WALGREENS BOOTS ALLIANCE, INC.
 
2013 OMNIBUS INCENTIVE PLAN (AS AMENDED AND RESTATED)
 
UK SUB-PLAN
 
Adopted by the Committee on October 13, 2015
 

1. INTRODUCTION

 

1.1 The Committee has established this UK Sub-Plan (the "UK Sub-Plan") of the
Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan (as may be amended or
restated from time to time) (the "Plan") pursuant to Section 10.14 of the Plan
for the purpose of granting Tax-advantaged Options (as defined below) to
eligible employees of Walgreens Boots Alliance, Inc. (the "Company") and its
Subsidiaries (as defined in Rule 2 below), who are or may be subject to United
Kingdom taxation.  Except as otherwise defined herein, capitalized terms used in
this UK Sub-Plan have the respective meanings set forth in the Plan.

 

1.2 The UK Sub-Plan is intended to be a CSOP Scheme compliant with the
requirements of Schedule 4 to the (UK) Income Tax (Earnings and Pensions) Act
2003 ("Schedule 4").  Specifically, the purpose of the UK Sub-Plan shall be as
described in paragraph 5 of Schedule 4 and is to provide, in accordance with
Schedule 4, benefits for Employees (as defined in Rule 2 below) in the form of
Tax-advantaged Options.  This UK Sub-Plan does not permit benefits to be
provided to employees or directors otherwise than in accordance with Schedule
4.  The Company makes no undertaking nor representation that the UK Sub-Plan
will qualify as a CSOP Scheme, nor that it will maintain the UK Sub-Plan's
status as a CSOP Scheme.

 

1.3 The terms of the Plan shall form part of the UK Sub-Plan insofar as they
have not been replaced, disapplied or modified by the Rules of this UK Sub-Plan
and insofar as such terms are compliant with the requirements of Schedule 4. All
provisions of the Plan which form part of this UK Sub-Plan shall be construed,
interpreted and applied in accordance with and subject to the Rules of this UK
Sub-Plan.  Where any section of the Plan refers to the Plan, for the purposes of
the UK Sub-Plan such section shall be read and construed as modified by the UK
Sub-Plan.  In the event of any conflict between the Plan and the UK Sub-Plan,
the UK Sub-Plan will prevail.

 

1.4 Where the Committee wishes to grant Options to Employees (as defined below)
in the United Kingdom, such Options may be granted subject to and in accordance
with the Rules of this UK Sub-Plan.

 

1.5 Options granted under this UK Sub-Plan shall be rights to purchase Shares
subject to the Rules of this UK Sub-Plan and shall be referred to as
"Tax-advantaged Options".  Only Tax-advantaged Options, a type of Nonstatutory
Option, may be granted under the UK Sub-Plan and accordingly references in the
Plan to "ISOs" and any other types of award shall be disregarded for the
purposes of the UK Sub-Plan.

 

1.6 The provisions of the UK Sub-Plan shall apply only to Tax-advantaged Options
granted under the UK Sub-Plan.

 

1.7 The endnotes contained in this UK Sub-Plan are provided for information
purposes only.

 

2. DEFINITIONS (SECTION 3 OF THE PLAN)

 

2.1 Unless defined herein, capitalized words or phrases shall have the meaning
given to them in the Plan.  For the purposes of the UK Sub-Plan:

 
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(a) "Control" has the meaning given in section 995i of the (UK) Income Tax Act
2007.

 

(b) "CSOP Scheme" means a CSOP scheme compliant with the requirements of
Schedule 4 (thus qualifying as a 'Schedule 4 CSOP scheme' under paragraph 1(A1)
of Schedule 4).

 

(c) "Employee" means (i) any person employed by the Company or any Subsidiary
(other than a director) and (ii) any "full-time" director of the Company or any
Subsidiary, being a director required to work at least 25 hours or more per week
(excluding meal breaks).

 

(d) "Fair Market Value" means, as at any date, the value of a Share determined
as follows:

 

(i) if the Shares are listed on NASDAQ Stock Market or other United States
national securities exchange registered under the Exchange Act which constitutes
a recognised stock exchange for HMRC's purposes, the closing price for the
Shares (or if more than one closing price is shown, the lower price plus
one-half of the difference between those two figures) on that day (or on the
previous trading day, if the applicable date is not a trading day); or

 

(ii) if the Shares are not so listed, the market value as determined by the
Committee in good faith in accordance with the provisions of Part VIII of the
Taxation of Chargeable Gains Act 1992 and agreed in advance for the purposes of
the UK Sub-Plan with HMRC Shares and Assets Valuation,

 
in either case determined without regard to the effect of any restrictions that
may apply to the Shares within the meaning of paragraph 36(3)ii of Schedule 4.
 

(e) "HMRC" means the United Kingdom's HM Revenue & Customs.

 

(f) "Optionee" means an individual who has been granted a Tax-advantaged Option
in accordance with the Rules of the UK Sub-Plan.

 

(g) "Rules" means the rules of this UK Sub-Plan.

 

(h) "Share" means a share of Common Stock in the Company, which satisfies the
conditions of paragraphs 16 to 18 (inclusive) and 20iii of Schedule 4 at all
material times.

 

(i) "Subsidiary" means any company over which the Company has Control and which
meets the definition of Affiliate in the Plan.

 

(j) "Subsisting Option" means a Tax-advantaged Option which has neither lapsed
nor been exercised.

 

2.2 Any reference in this UK Sub-Plan to any enactment includes a reference to
that enactment as from time to time modified, extended or replaced.

 

3. ADMINISTRATION (SECTION 4 OF THE PLAN)

 

3.1 AUTHORITY OF THE COMMITTEE. The UK Sub-Plan shall be administered in
accordance with and subject to the Rules of this UK Sub-Plan, and the Plan
(including, without limitation, Section 4 of the Plan) shall be interpreted
accordingly. Any discretion that the Committee and any delegated body has with
respect to Tax-advantaged Options may only be exercised fairly and reasonably
and not in breach of this UK Sub-Plan, Schedule 4 or any other requirements
applicable to CSOP Schemes.

 
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3.2 Without limitation to the foregoing, the discretions set out in Section
4.01(e) of the Plan shall not apply to Tax-advantaged Options granted under the
UK Sub-Plan.  Tax-advantaged Options may be granted only over Shares and may not
be settled in cash nor any other property other than Shares (other than shares
in a Successor Entity, as defined in Rule 8.2 below, pursuant to an exchange of
Tax-advantaged Options pursuant to Rule 8.2 below).

 

3.3 The Committee shall not have any right to extend the exercise period of a
Tax-advantaged Option beyond the time at which it would otherwise lapse under
the Rules of the UK Sub-Plan or the terms of the applicable Award Agreement, and
the Plan shall be interpreted accordingly.

 

4. SHARES SUBJECT TO THE PLAN (SECTION 5 OF THE PLAN)

 

4.1 NUMBER OF SHARES. In addition to the per person award limits stated in
Section 5.03 of the Plan, the following shall apply for the purposes of the UK
Sub-Plan:

 
Tax-advantaged Options granted to any person shall be limited and take effect so
that the aggregate Fair Market Value of the Shares subject to the Tax-advantaged
Option, when aggregated with the Fair Market Value of Shares subject to
Subsisting Options, shall not exceed £30,000 or such other limit as may be
specified in paragraph 6 of Schedule 4. For the purposes of this paragraph,
Subsisting Options shall include all outstanding Tax-advantaged Options granted
under this UK Sub-Plan and all outstanding tax-advantaged options granted under
any other CSOP Scheme which has or may be established by the Company or any
associated company within the meaning of paragraph 35 of Schedule 4. This limit
shall be determined on the basis of the Fair Market Value of Shares as at the
date(s) of grant of the relevant Tax-advantaged Options and the market value of
the Shares as at the date(s) of grant of the options granted under the rules of
any other relevant CSOP Scheme, converted from US dollars into pounds sterling
at the rate of exchange applicable as at the date(s) of grant.
 

4.2 ADJUSTMENTS. The following shall replace Section 5.04 of the Plan for the
purposes of the UK Sub-Plan:

 
Tax-advantaged Options may not be re-priced or adjusted otherwise than in
accordance with this Rule 4.2. In the event of any variation in the share
capital of the Company within paragraph 22(3) of Schedule 4, including (without
limitation) any change to the capitalization, rights issue, consolidation,
subdivision or reduction of share capital within paragraph 22(3) of Schedule 4,
the number and description of Shares subject to a Tax-advantaged Option and the
exercise price for each of those Shares may be adjusted in such manner as the
Committee considers to be fair and reasonable provided that:
 

(a) the aggregate amount payable on the exercise of a Tax-advantaged Option in
full immediately after the variation or variations is substantially the same as
what it was immediately before the variation or variations;

 

(b) the total market value of the Shares which may be acquired by the exercise
of the Tax-advantaged Option immediately after the variation or variations is
substantially the same as what it was immediately before the variation or
variations;

 

(c) following the adjustment the Shares continues to satisfy the conditions
specified in paragraphs 16 to 18 (inclusive) and 20 of Schedule 4; and

 

(d) the variation does not result in the requirements of Schedule 4 not being
met in relation to the Tax-advantaged Option.

 
For the purposes of this Rule 4.2, the market value of Shares subject to a
restriction (within the meaning of paragraph 36(3) of Schedule 4) is to be
determined as if they were not subject to the restriction.
 
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5. ELIGIBILITY AND GENERAL CONDITIONS (SECTION 6 OF THE PLAN)

 

5.1     ELIGIBILITY.  The following shall replace the first sentence of Section
6.01 of the Plan for the purposes of the UK Sub-Plan:

 
Tax-advantaged Options may be granted only to Employees (as defined in this UK
Sub-Plan), and not to non-employees or consultants.  No Tax-advantaged Option
may be granted to any Employee who is precluded by paragraph 9iv of Schedule 4
from participating in a CSOP Scheme.
 

5.2     TERMS AND CONDITIONS.   The terms and conditions of Tax-advantaged
Options must be consistent with the UK Sub-Plan and must be set out in the
applicable Award Agreement at the time of grant, and Section 6.02 of the Plan
shall be interpreted accordingly.

 

5.3 The terms and conditions of a Tax-advantaged Option may not be amended or
supplemented following grant other than (i) pursuant to the Rules of this UK
Sub-Plan (including, without limitation, Rules 4.2 and 9.10(f)), (ii) where such
amendment or supplement is not to the advantage or disadvantage of the Options
and the requirements of Schedule 4 are still met in relation to the Option, or
(iii) as required by law or applicable regulatory rules, and the Plan
(including, without limitation, Section 6.02 of the Plan) shall be interpreted
accordingly.

 

5.4 The following terms of a Tax-advantaged Option shall be stated at the time
the Tax-advantaged Option is granted, and shall be notified to the Optionee who
was granted the Tax-advantaged Option as soon as practicable after the grant of
such Tax-advantaged Option:

 

(a) the exercise price;

 

(b) the number and description of the Shares which may be acquired by the
exercise of the Tax-advantaged Option;

 

(c) the restrictions (within the meaning of paragraph 36(3) of Schedule 4) to
which the Shares which may be acquired by the exercise of the Tax-advantaged
Option may be subject (if any);

 

(d) the times at which the Tax-advantaged Option may be exercised (in whole or
in part);

 

(e) the circumstances under which the Tax-advantaged Option will lapse or be
cancelled (in whole or in part), including any conditions to which the exercise
of the Tax-advantaged Option is subject (in whole or in part); and

 

(f) any mechanism for amending the terms stated pursuant to Rules 5.4(b) to
5.4(e) (inclusive).

 

5.5 Any mechanism for amending the terms stated pursuant to Rules 5.4(b) to
5.4(e) (inclusive) shall, if applied, be applied in a way that is fair and
reasonable and shall be consistent with the Rules of the UK Sub-Plan and
Schedule 4.

 

5.6 TERMINATION OF SERVICE. In the event of the Optionee's death, an outstanding
Tax-advantaged Option shall become fully vested and exercisable (to the extent
not already vested and exercisable and not already lapsed) and may be exercised
during a period of up to 12 months after the date of death, but may not be
exercised more than 12 months after the date of death and may only be exercised
by the personal representative(s) of the Optionee.

 

5.7 For the purposes of the UK Sub-Plan and without limitation, Section 6.04(a)
of the Plan shall apply in the event of the Optionee's Termination of Service by
reason of disability or injury (provided this is evidenced to the satisfaction
of the Committee).

 
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5.8 For the purposes of the UK Sub-Plan, Section 6.04(c) of the Plan shall
apply, without limitation, where the Optionee's Termination of Service is by
reason of retirement or where the Optionee's Termination of Service is due to
involuntary termination by the Company or any Affiliate by reason of:

 

(a) redundancy (within the meaning of the Employment Rights Act 1996 or the
Employment Rights (Northern Ireland) Order 1996);

 

(b) a relevant transfer within the meaning of the Transfer of Undertakings
(Protection of Employment) Regulations 2006; or

 

(c) the company with which the Optionee holds office or employment ceasing to be
controlled by the Company,

 
or in any other circumstance where the Optionee's Termination of Service is due
to involuntary termination by the Company or any Affiliate.
 

5.9 For the purposes of the UK Sub-Plan, the definitions of "Retire" and
"Retirement" in the Plan shall not apply.

 

5.10 The Optionee's rights to exercise a Tax-advantaged Option pursuant to
Section 6.04 of the Plan in the circumstances referred to in section 524(2B) of
the UK Income Tax (Earnings and Pensions) Act 2003 or upon death shall be set
out in the Plan and/or the applicable Award Agreement and shall not be subject
to any discretion.

 

5.11 Section 6.04(e) of the Plan (Automatic Extended Exercisability in Certain
Cases) shall be disapplied for the purposes of the UK Sub-Plan.

 

5.12 The discretions contained in Section 6.04(g) of the Plan (Waiver by
Committee) may only be exercised fairly and reasonably and not in breach of this
UK Sub-Plan, Schedule 4 or any other requirements applicable to CSOP Schemes.

 

5.13 NON-TRANSFERABILITY.  The following shall replace Section 6.05 of the Plan
for the purposes of the UK Sub-Plan:

 
Notwithstanding any other provision of the UK Sub-Plan, a Tax-advantaged Option
may not be sold, pledged, assigned, hypothecated, alienated, transferred,
disposed of or encumbered in any manner, and the Plan shall be interpreted
accordingly. A Tax-advantaged Option may be exercised during the life of the
Optionee, in accordance with the UK Sub-Plan and applicable Award Agreement,
only by the Optionee.  A Tax-advantaged Option may be exercised after the
Optionee's death by the Optionee's personal representative(s) in accordance with
Rule 5.6 of the UK Sub-Plan.
 

5.14 Section 10.03 of the Plan (Designation of Beneficiary) shall be disapplied
for the purposes of the UK Sub-Plan.

 

5.15 SETTLEMENT, DEFERRAL AND CANCELLATION. Tax-advantaged Options may be
granted only over Shares and may not be settled in cash nor any other property
other than Shares, and the Plan (including, without limitation, Sections 4 and 6
of the Plan) shall be interpreted accordingly.

 

5.16 The Company may not net settle the exercise of Tax-advantaged Options by
withholding Shares, including for the purpose of satisfying the exercise price
or any taxes due in respect of the Tax-advantaged Option.

 
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5.17 Tax-advantaged Options may not be automatically exercised using a net
settlement method and Section 6.04(f) (Automatic Exercise in Certain Cases)
shall be disapplied accordingly.

 

5.18 Tax-advantaged Options shall be settled in accordance with Rule 6.4 of the
UK Sub-Plan and shall not be deferred, and Section 6.08 of the Plan (Deferred
Awards) shall be disapplied accordingly.

 

5.19 Tax-advantaged Options may not be cancelled in return for cash or any other
property pursuant to any provision in the Plan.

 

5.20 STANDALONE OPTIONS. Tax-advantaged Options may be granted as standalone
awards only and may not be granted in tandem with any other award.  Section 6.07
of the Plan (Standalone, Tandem and Substitute Awards) shall be disapplied for
the purposes of the UK Sub-Plan.

 

6. SPECIFIC PROVISIONS REGARDING EXERCISE (SECTION 7 OF THE PLAN)

 

6.1 EXERCISE PRICE.  The exercise price of a Tax-Advantaged Option shall not be
less than the Fair Market Value of a Share as at the date of grant of the
Tax-advantaged Option. The applicable Award Agreement may not provide for the
exercise price to be changed after grant other than in accordance with Rule 4.2.

 

6.2 PAYMENT OF EXERCISE PRICE. The exercise price of a Tax-advantaged Option may
only be paid by cash, cheque, and/or (to the extent permitted by the applicable
Award Agreement) through a cashless exercise, and Section 7.01 of the Plan shall
be interpreted accordingly.  The exercise price may not be paid using previously
acquired Shares nor any other property. No Shares shall be retained by the
Company upon exercise of a Tax-advantaged Option in order to satisfy the
exercise price (nor any taxes due).

 

6.3 EXERCISABILITY. No Tax-advantaged Option may be exercised by any Optionee
who is precluded by paragraph 9v of Schedule 4 from participating in a CSOP
Scheme.

 

6.4 ISSUE/TRANSFER OF SHARES TO OPTIONEE: Subject to applicable laws and any
applicable regulatory rules, Shares shall be allocated or issued to the Optionee
within 30 days of exercise. Except for any rights determined by reference to a
date preceding the date of allotment or transfer, such Shares shall rank equally
and as one class with other Shares of the same class already in issue.

 

6.5 POST-EXERCISE RESTRICTIONS ON SHARES.  The Shares acquired on exercise may
be subject to such restrictions as the Board or Committee may determine and/or
such restrictions that may apply to all Shares. The details of any restrictions
applying to the Shares must be stated at the time of grant and notified to the
Optionee in accordance with Rule 5.4 of the UK Sub-Plan.

 

6.6 DIVIDEND EQUIVALENTS. Dividend Equivalents shall not be paid to Optionees in
respect of  Tax-advantaged Options and Section 7.05 of the Plan (Dividend
Equivalents) shall be disapplied accordingly.

 

6.7 OTHER AWARDS. Sections 7.02, 7.03, 7.04, 7.06, 7.07, 7.08 and 7.09 of the
Plan shall be disapplied for the purposes of the UK Sub-Plan.

 

7. PERFORMANCE OPTIONS (SECTION 8 OF THE PLAN)

 

7.1 Any performance conditions imposed on the exercise of a Tax-advantaged
Option:

 

(a) must be objective and set at the date of grant of the Tax-advantaged Option;
and

 
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(b) cannot be waived or amended unless events occur which cause the Committee to
consider that the performance conditions will not achieve their original purpose
(in which case the Committee may make such alterations or additions to the
performance conditions as are fair and reasonable provided that the amended
performance conditions are no more difficult to meet than those originally
imposed).

 

8. CHANGE IN CONTROL (SECTION 9 OF THE PLAN)

 

8.1 Section 9.01(c) of the Plan and the last sentence of Section 9.01 of the
Plan shall not apply for the purposes of the UK Sub-Plan.    

 

8.2 A Tax-advantaged Option may be exchanged for another option only in
accordance with this Rule 8.2, and Section 9.01(a) of the Plan shall be
interpreted accordingly.  If any company (the "Successor Entity"):

 

(a) obtains Control of the Company as a result of making a general offer (i) 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 (ii) to acquire all the shares in the
Company which are of the same class as the Shares subject to Subsisting Options;

 

(b) obtains Control of the Company as a result of a compromise or arrangement
sanctioned by the court under section 899 of the Companies Act 2006;

 

(c) becomes bound or entitled to acquire shares in the Company under sections
979 to 982 or 983 to 985  of the Companies Act 2006; or

 

(d) obtains Control of the Company as a result of a non-UK company
reorganization arrangement (within the meaning of paragraph 35ZA of Schedule 4)
which has become binding on the shareholders covered by it,

 
the Optionee may agree with the Successor Entity to release the Tax-advantaged
Option (the "Old Option") in consideration of the grant of a new option (the
"New Option") which satisfies the conditions below.
 

8.3 For the purposes of Rule 8.2(a)(i), the reference to the issued ordinary
share capital of the Company does not include any capital already held by the
person making the offer or a person connected with that person, and for the
purposes of Rule 8.2(a)(ii), the reference to the shares in the Company does not
include any shares already held by the person making the offer or a person
connected with that person. For the purposes of Rule 8.2(a), it does not matter
if the general offer is made to different shareholders by different means.

 

8.4 The conditions are that the New Option:

 

(a) is over shares in the Successor Entity or in a company which has Control
over the Successor Entity which satisfies the conditions specified in paragraphs
16 to 18 (inclusive) and 20 of Schedule 4;

 

(b) is a right to acquire shares which, on acquisition of the New Option, have
an aggregate market value which is substantially the same as the aggregate Fair
Market Value of the shares subject to the Old Option on its disposal;

 

(c) has a purchase price per share such that the aggregate price payable on
complete exercise substantially the same as the aggregate price which would have
been payable on complete exercise of the Old Option; and

 
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(d) is otherwise identical in terms to the Old Option.

 

8.5 For the purposes of Rule 8.4:

 

(a) the market value of any Shares is to be determined using a methodology
agreed by HMRC; and

 

(b) the market value of Shares subject to a restriction (within the meaning of
paragraph 36(3) of Schedule 4) is to be determined as if they were not subject
to the restriction.

 

8.6 Where any New Option is granted pursuant to Rule 8.2, the provisions of the
UK Sub-Plan shall, in relation to the New Option, be construed as if references
to the Company and the Shares were references to the Successor Entity or, as the
case may be, to the other company to whose shares the New Option relates and to
the shares in the Successor Entity or that other company. The New Option shall,
for all other purposes of the UK Sub-Plan, be treated as having been acquired at
the same time as the Old Option, which is released in consideration for the
grant of the New Option.

 

8.7 The agreement to release the Old Option in exchange for the grant of a New
Option under Rule 8.2 must take place within the period of six months beginning
with the time when, as the case may be, Control of the Company has been obtained
and any conditions subject to which the offer is made is met, the court
sanctions the compromise or arrangement, or the non-UK reorganisation
arrangement becomes binding on the shareholders covered by it, or within the
period during which the Successor entity remains bound or entitled in accordance
with Rule 8.2(c) above.

 

8.8 If an event has occurred pursuant to Rule 8.2, the UK Sub-Plan remains that
of the Company and no further Tax-advantaged Options may be granted under the UK
Sub-Plan.

 

9. GENERAL PROVISIONS (SECTION 10 OF THE PLAN)

 

9.1 BENEFICIARIES.  Section 10.03 of the Plan (Designation of Beneficiary) shall
be disapplied for the purposes of the UK Sub-Plan.

 

9.2 WITHHOLDING TAXES.  The following shall replace Section 10.04 of the Plan
for the purposes of the UK Sub-Plan:

 
If the Company or any Subsidiary is liable to withhold and account to HMRC for
any sum in respect of income tax or national insurance contributions ("Taxes")
in connection with the Tax-advantaged Option, and the Optionee has not
accompanied the notice of exercise with a sufficient amount to cover the Taxes
arising on exercise, the Company shall be entitled to withhold or collect such
Taxes:
 

(a) by deduction from salary or any other amount payable to the Optionee at any
time, including proceeds acquired upon a cashless exercise;

 

(b) directly from the Optionee by payment in cash or cleared funds; or

 

(c) by arranging, on behalf of the Optionee, for the sale of a sufficient number
of the Shares that the Optionee is entitled to receive on the exercise of the
Tax-advantaged Option.

 
A withholding liability may not be satisfied by the Company withholding Shares
otherwise due to be received by the Optionee on the exercise of the
Tax-advantaged Option.
 
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If the Company or any Subsidiary is liable to withhold and account to any other
tax authority for any sum in respect of tax or social security contributions in
connection with the Tax-advantaged Option, the Company shall be entitled to
withhold or collect such amounts using any of the methods referred to in this
Rule 9.2.
 

9.3 The applicable Award Agreement may provide that it is a condition of
exercise that the Optionee agrees to accept any liability for secondary Class 1
National Insurance contributions which may be payable by the Company or
Subsidiary on the exercise of the Tax-advantaged Option ("Employer NICs"). The
Optionee may also be required to execute a joint election with the Company or
the Optionee's employer in relation to the Employer NICs, the form of such
election being formally approved by HMRC, and any other joint election which may
be required between the Optionee and any successor to the Company or the
Optionee's employer.

 

9.4 The applicable Award Agreement may provide that it is a condition of
participation in the UK Sub-Plan that the Optionee enter into a joint election
within section 431 of the (UK) Income Tax (Earnings and Pensions) Act 2003 in
respect of computing any tax charge on the acquisition of "restricted
securities" (as defined in sections 423 and 424 of the (UK) Income Tax (Earnings
and Pensions) Act 2003).

 

9.5 LIMITATION ON BENEFITS.  Section 10.05 of the Plan (Limitation on Benefits)
shall be disapplied for the purposes of the UK Sub-Plan.

 

9.6 REPRICING. Section 10.07 of the Plan (No Repricing) shall be subject to
Rules 4.2 and 5.19 of the UK Sub-Plan, for the purposes of the UK Sub-Plan.

 

9.7 FORFEITURE AND RECOUPMENT. The first sentence of Section 10.08 of the Plan
(Clawback) shall be disapplied for the purposes of the UK Sub-Plan, except to
the extent that a provision is included in the applicable Award Agreement in a
manner consistent with the requirements of Schedule 4. The remainder of Section
10.08 of the Plan (Clawback; Right of Setoff) shall be disapplied for the
purposes of the UK Sub-Plan.

 

9.8 Section 10.01 of the Plan shall be replaced by the following for the
purposes of the UK Sub-Plan:

 
The Committee may provide in the applicable Award Agreement that the Committee
has the right to cause a Tax-advantaged Option to lapse in the event that the
Optionee does not comply with specified conditions relating to non-competition,
confidentiality of information relating to the Company, non-solicitation of
customers, suppliers, and employees of the Company, cooperation in litigation,
non-disparagement of the Company and its officers, Directors and Affiliates, or
other requirements applicable to the Participant, as determined by the
Committee, including during specified periods following Termination of Service.
 

9.9 For the purposes of the UK Sub-Plan, the words from and including "and
provided further that" to the end of that sentence in Section 10.16 shall be
disapplied.

 

9.10 MISCELLANEOUS. The following provisions shall be added to Section 10 of the
Plan:

 

(a) The rights and obligations of any individual under the terms of that
person’s employment with the Company or any Affiliate shall not be affected by
participation (or non-participation) in the UK Sub-Plan. An individual who is
granted a Tax-advantaged Option shall have no right to compensation or damages
in consequence of the loss or diminution in value of the Tax-advantaged Option
or Shares acquired pursuant to the Tax-advantaged Option for any reason
including, but not limited to, as a result of the termination of that person’s
employment with the Company or Affiliate for any reason whatsoever and whether
or not in breach of contract. If an individual did acquire any such rights, that
person would be deemed to have waived them irrevocably by not renouncing the
Tax-advantaged Option.

 
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(b) The UK Sub-Plan shall terminate in accordance with the termination of the
Plan or such earlier time as the Board or Committee may decide.

 

(c) Subject to Rule 9.10(d) below, the Board or Committee may amend, suspend or
terminate the UK Sub-Plan at any time and for any reason.

 

(d) For as long as the UK Sub-Plan is intended to qualify as a CSOP Scheme, no
amendment may be made to the UK Sub-Plan that would result in the UK Sub-Plan
not meeting the requirements of Schedule 4.

 

(e) The Board or Committee may make any amendment which it considers necessary
or desirable in order for the UK Sub-Plan to qualify or continue to qualify as a
CSOP Scheme, including (without limitation) to reflect any legislative
amendments to Schedule 4 or pursuant to the issuance by HMRC to the Company of a
notice under paragraph 28I of Schedule 4 requiring that the Company secure that
the requirements of Schedule 4 are met in the relation to the UK Sub-Plan.

 

(f) Further, the Board or Committee may make amendments to Tax-advantaged
Options granted under the UK Sub-Plan without the consent of the affected
Optionees in order to comply or continue to comply with the provisions of, or
reflect any legislative amendments to, Schedule 4, and/or to enable the Company
to comply with any notice issued by HMRC to the Company under paragraph 28I of
Schedule 4.

 

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i  Section 995 of the Income Tax Act 2007: Control means the power of a person
to secure, by holding sufficient shares or voting rights or as a result of other
powers conferred, that the affairs of a company are conducted in accordance with
that person's wishes.
 
ii Paragraph 36(3) of Schedule 4: Shares are subject to a restriction if there
is any contract, agreement, arrangement or condition which may provide for:

● a transfer, reversion or forfeiture of the shares for less than market value;

● a restriction on the freedom of the holder to dispose of or hold onto the
shares; or

● a disadvantage due to the disposal or retention of the shares.

 
iii Paragraphs 16 to 18 and 20 of Schedule 4 (as they apply to the Company): The
Shares must:

● form part of the ordinary share capital of the Company, as the scheme
organiser;

● be in a company listed on a recognised stock exchange (such as NASDAQ) or be
in a company which is not under the control of another company;

● be fully paid up and not redeemable; and

● unless the ordinary share capital consists of one class only, the majority of
the issued shares of the same class as the Shares must be "open market" shares
(i.e. if the persons holding the shares are not (a) persons who acquired their
shares as a result of a right conferred on them or an opportunity afforded to
them as a director or employee of the scheme organiser or any other company, and
not as a result of an offer to the public, or (b) trustees holding shares on
behalf of persons who acquired their beneficial interests in the shares as
mentioned in (a)).

 
iv Paragraph 9 of Schedule 4: A Tax-advantaged Option may not be granted to or
exercised by an individual holding an interest of more than 30% of the ordinary
share capital of the Company, if the Company is a close company.  A close
company is one that is controlled by its directors or five or fewer persons.
 
v See note iv.
 
 
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