Document:

Exhibit 10.4

 

FRANCESCA’S SERVICES CORPORATION

 

July 1, 2019

 

Re: Employment Letter Agreement

 

Dear Cindy:

 

Subject to the terms
and conditions of this letter agreement (this “Agreement”), Francesca’s Services Corporation, a Delaware
corporation (“FSC”), Francesca’s Holdings Corporation, a Delaware corporation (“Parent”)
and Francesca’s Collections, Inc., a Texas corporation (“FCI” and, collectively with FSC and Parent, the
“Company”) desires to employ you as the Company’s Chief Financial Officer on the terms and conditions
of this Agreement. This Agreement shall be effective as of the Effective Date.

 

1.     
Employment; Compensation and Benefits.

 

(a)  
Position and Duties. You shall serve as the Company’s Executive Vice President and Chief Financial Officer
(“CFO”), reporting to the Company’s Chief Executive Officer. During your Period of Employment (as defined
below) with the Company, you agree to (i) devote substantially all of your business time, energy and skill to the performance
of your duties for the Company, (ii) perform such duties in a faithful, effective and efficient manner and (iii) hold
no other employment.

 

(b)  
Period of Employment. Your appointment as CFO is effective July 19, 2019 (the “Effective Date”).
Your “Period of Employment” hereunder begins on the Effective Date and is for an indefinite term, until terminated
as provided in Section 2(a).

 

(c)  
Base Salary. Your base salary (the “Base Salary”) shall be at an annualized rate of Three Hundred
Twenty-Five Thousand Dollars ($325,000.00) and shall be paid in accordance with the Company’s regular payroll practices in
effect from time to time.

 

(d)  
Annual Bonus. You may be eligible for an annual incentive bonus based on the Company’s annual bonus plan that
may exist from time to time. Your target annual incentive bonus amount for a particular fiscal year of the Company during the Period
of Employment shall equal Fifty Percent (50%) of your Base Salary for that fiscal year.

 

(e)  
Retirement, Welfare and Fringe Benefits. During the Period of Employment you shall be entitled to participate in
all employee savings and welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company
to the Company’s employees generally, in accordance with the eligibility and participation provisions of such plans and as
such plans or programs may be in effect from time to time. You will be eligible for 21 days of paid-time-off.

 

(f)   
Promotion RSU Grant. Effective as of the Effective Date, in connection with and contingent on your appointment as
CFO, you will be granted an award (the “Promotion Grant”) of Parent restricted stock units (“RSUs”)
under the Francesca’s Holdings Corporation 2015 Equity Incentive Plan (the “Plan”). The aggregate number
of RSUs covered by the Promotion Grant (the “Promotion Grant RSUs”) will equal the quotient obtained by dividing
(i) an amount (not less than zero) equal to (A) Two Hundred Thousand Dollars ($200,000), minus (B) the product obtained by multiplying
(x) the closing price of a share of Parent’s common stock (in regular trading) on the Effective Date (the “Parent
Stock Price”) by (y) the aggregate number of time-based and performance-based RSUs that were granted to you by Parent
on April 5, 2019 (which you and Parent hereby agree was 14,422 RSUs, after giving effect to Parent’s one-for-twelve reverse
stock split effective July 1, 2019); by (ii) the Parent Stock Price. Fifty percent (50%) of the total number of Promotion Grant
RSUs will vest in one installment on the third anniversary of the Effective Date, subject to your continued employment or service
with the Company through the vesting date. The remaining fifty percent (50%) of the total number of Promotion Grant RSUs will be
subject to vesting based on achievement of the same Company performance goals for the three-year period consisting of the Company’s
2019, 2020 and 2021 fiscal years as apply to the performance stock units granted to you on April 5, 2019, as well as your continued
employment or service through the third anniversary of the Effective Date. The Promotion Grant will be evidenced by a Restricted
Stock Unit Award Agreement and a Performance Stock Unit Award Agreement and will be subject to the approval of the Compensation
Committee of the Parent’s Board of Directors and made in accordance with the terms and conditions of the Plan. For purposes
of clarity, if the amount determined under clause (i) of this Section 1(f) is zero or a negative number, you will not be entitled
to receive any Promotion Grant.

 

     

     

    

 

2.     
Termination and Severance.

 

(a)  
Termination. Your employment by the Company may be terminated by the Company: (i) immediately upon notice, with
Cause (as defined below), or (ii) with no less than thirty (30) days’ advance written notice to you, without Cause,
or (iii) immediately in the event of your Disability (as defined below) or your death. In the event that you are provided
with notice of termination without Cause pursuant to clause (ii) above, the Company will have the option to place you
on administrative leave during the notice period. You may terminate your employment by the Company for any reason with no less
than thirty (30) days’ advance written notice to the Company. Any termination of your employment (by you or by the Company)
must be communicated by written notice from the terminating party to the other party. Such notice of termination must be hand delivered
(if to the Company, to the Company’s Chief Executive Officer) and must indicate the specific provision(s) of this Agreement
relied upon in effecting the termination. The date your employment by the Company terminates is referred to herein as your “Severance
Date.”

 

(b)  
Benefits upon Termination. Regardless of the reason for the termination of your employment with the Company, in connection
with such termination the Company will pay you (on or within 30 days following your Severance Date) your accrued and unused vacation
(if any) and you will be entitled to any benefits that are due to you under the Company’s 401(k) plan in accordance with
the terms of that plan. If you hold any stock options or other equity or equity-based awards granted by the Company, the terms
and conditions applicable to those awards will control as to the consequences of a termination of your employment on those awards.
In addition to the foregoing, if your employment with the Company terminates as a result of a termination by the Company of your
employment without Cause (as defined below), you will (subject to the other conditions set forth in Section 2(c) below) be
entitled to the following benefits: the Company will pay you, subject to tax withholding and other authorized deductions, an aggregate
amount equal to six (6) months (or twelve (12) months if your Severance Date occurs on or after the date that is six (6) months
after the Effective Date) of your Base Salary at the monthly rate in effect on the Severance Date (the “Severance Benefit”).
Subject to Section 5, the Company will pay this benefit to you in substantially equal installments (each in the applicable
fraction of the aggregate benefit) in accordance with the Company’s standard payroll practices over a period of six (6) months
(or twelve (12) months, as applicable), with the first installment payable in the month following the month in which your Separation
from Service (as such term is defined below) occurs.

 

    	 	2	 

     

    

 

(c)  
Conditions for Receipt of Severance Benefit. Notwithstanding anything to the contrary herein, if the Severance Benefit
is otherwise due to you and, at any time, you breach any obligation under Section 6 of this Agreement, from and after the
date of such breach and not in any way in limitation of any right or remedy otherwise available to the Company, you will no longer
be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Benefit. In addition,
in order to receive any Severance Benefit, you must, upon or promptly following your Severance Date (and in all events within twenty-one (21)
days after the Company provides the separation agreement to you, unless a longer period of time is required by applicable law),
provide the Company with a separation agreement which shall contain a valid, executed general release agreement in a form acceptable
to the Company, and such release shall have not been revoked. The Company will provide the separation agreement to you no later
than seven (7) days after your Separation Date. In the event a period longer than twenty-one (21) days is required by applicable
law, then the first installment of the Severance Benefit shall remain payable in the month following the month in which your Separation
from Service (as such term is defined below) occurs, provided that if you fail to provide the Company with the executed general
release agreement described above (or have otherwise revoked the release), any further instalments of the Severance Benefit shall
cease at such time and shall no longer be payable to you. You agree and acknowledge that such separation agreement may contain
additional restrictive covenants, including, without limitation, non-solicitation covenants and non-disparagement covenants.

 

(d)  
Exclusive Remedy. You agree that should your employment by the Company terminate for any reason, the payments and
benefits contemplated by this Agreement with respect to the circumstances of such termination shall constitute the exclusive and
sole remedy for any such termination of your employment and you agree not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment. You agree that, in the event of a termination of your employment, you are
not and will not be entitled to severance benefits under any other agreement, plan, program, or policy of the Company.

 

3.     
Certain Defined Terms. As used in this Agreement, the following terms shall be defined as follows:

 

(a)  
“Cause” shall mean that one or more of the following has occurred: (i) you have committed a felony
(under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant
foreign jurisdiction); (ii) you have engaged in acts of fraud, dishonesty or other acts of material misconduct in the course
of your duties; (iii) your abuse of narcotics or alcohol that has or may reasonably harm the Company; (iv) any violation
by you of the Company’s written policies; (v) your failure to perform or uphold your duties and/or you fail to comply
with reasonable directives of the Company’s Chief Executive Officer or Board of Directors, as applicable; or (vi) any
breach by you of any provision of Section 6, or any material breach by you of this Agreement or any other contract you are
a party to with the Company.

 

(b)  
“Disability” shall mean a physical or mental impairment which renders you unable to perform the essential
functions of your employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the
Company, for more than 180 days in any 12-month period, unless a longer period is required by federal or state law, in which case
that longer period would apply.

 

    	 	3	 

     

    

 

(c)  
“Separation from Service” occurs when you die, retire, or otherwise have a termination of employment
with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1),
without regard to the optional alternative definitions available thereunder.

 

4.     
Limitation on Benefits. Notwithstanding anything contained in this Agreement to the contrary, to the extent
that any payment, benefit or distribution of any type to you or for your benefit by the Company or any of its affiliates, whether
paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise
(collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced (but not below
zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which
would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code. Unless you shall have
given prior written notice to the Company to effectuate a reduction in the Total Payments if such a reduction is required, any
such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest
thereunder, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits
(with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting
of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards,
then by reducing or eliminating any other remaining Total Payments. The preceding provisions of this Section 4 shall take
precedence over the provisions of any other plan, arrangement or agreement governing your rights and entitlements to any benefits
or compensation.

 

5.     
Section 409A. It is intended that any amounts payable under this Agreement and the Company’s and
your exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty or interest under
Section 409A of the Code. This Agreement shall be construed and interpreted consistent with that intent. If you are a “specified
employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your Separation from Service
and you are entitled to the Severance Benefit, you shall not be entitled to any payment or benefit pursuant to Section 2(b)
until the earlier of (i) the date which is six (6) months after your Separation from Service for any reason other than
your death, or (ii) the date of your death. The provisions of the preceding sentence shall only apply if, and to the extent,
required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise
payable to you upon or in the six (6) month period following your Separation from Service that are not so paid by reason of
such 6-month delay provision shall be paid (without interest) as soon as practicable (and in all events within thirty (30)
days) after the date that is six (6) months after your Separation from Service (or, if earlier, as soon as practicable, and
in all events within thirty (30) days, after the date of your death).

 

6.     
Protective Covenants.

 

(a)  
Confidential Information.

 

(i)   You shall not disclose or use at any time, either during the Period of Employment or thereafter, any Trade Secrets and Confidential
Information (as defined below) of which you become aware, whether or not such information is developed by you, except to the extent
that such disclosure or use is directly related to and required by your performance in good faith of duties for the Company. You
will take all appropriate steps to safeguard Trade Secrets and Confidential Information in your possession and to protect it against
disclosure, misuse, espionage, loss and theft. You shall deliver to the Company at the termination of your employment, or at any
time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Trade Secrets and Confidential Information or the Work Product (as hereinafter defined)
of the business of the Company or any of its affiliates which you may then possess or have under your control. Notwithstanding
the foregoing, you may truthfully respond to a lawful and valid subpoena or other legal process, but shall give the Company the
earliest possible notice thereof.

 

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(ii) 
For purposes of this Agreement, “Trade Secrets and Confidential Information” means information that is
not generally known to the public and that is used, developed or obtained by the Company in connection with its business, including,
but not limited to, information, observations and data obtained by you while employed by the Company or any predecessors thereof
concerning (i) the business or affairs of the Company (or such predecessors), (ii) products or services, (iii) fees,
costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer
software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data
bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists,
(xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all
similar and related information in whatever form. Trade Secrets and Confidential Information will not include any information that
has been published (other than a disclosure by you in breach of this Agreement) in a form generally available to the public prior
to the date you propose to disclose or use such information. Trade Secrets and Confidential Information will not be deemed to have
been published merely because individual portions of the information have been separately published, but only if all material features
comprising such information have been published in combination.

 

(iii)  For
purposes of this Agreement, “Work Product” means all inventions, innovations, improvements, technical information,
systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable, copyrightable, registerable as a trademark, reduced to
writing, or otherwise) which relates to the Company’s or any of its affiliates’ actual or anticipated business, research
and development or existing or future products or services and which are conceived, developed or made by you (whether or not during
usual business hours, whether or not by the use of the facilities of the Company or any of its affiliates, and whether or not
alone or in conjunction with any other person) while employed by the Company (including those conceived, developed or made prior
to the Effective Date) together with all patent applications, letters patent, trademark, trade name and service mark applications
or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. All Work Product that
you may have discovered, invented or originated during your employment by the Company or any of its affiliates prior to the date
hereof, that you may discover, invent or originate during your employment or at any time following the termination of your employment
with the Company, shall be the exclusive property of the Company and its affiliates, as applicable, and you hereby assign all
of your right, title and interest in and to such Work Product to the Company or its applicable affiliate, including all intellectual
property rights therein. You shall promptly disclose all Work Product to the Company, shall execute at the request of the Company
any assignments or other documents the Company may deem necessary to protect or perfect its (or any of its affiliates’,
as applicable) rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing
the Company’s (or any of its affiliates’, as applicable) rights therein. You hereby appoint the Company as your attorney-in-fact
to execute on your behalf any assignments or other documents deemed necessary by the Company to protect or perfect the Company,
the Company’s (and any of its affiliates’, as applicable) rights to any Work Product.

 

    	 	5	 

     

    

 

(b)  
Restriction on Competition. During your employment with the Company and twelve (12) months following the termination
of your employment with the Company (regardless of the reason for such termination and regardless of whether or not you are entitled
to the Severance Benefit) (the “Restricted Period”), you shall not directly or indirectly, individually or on
behalf of any other person or entity, manage, participate in, work for, consult with, render services for, or take an interest
in (as an owner, stockholder, partner or lender) any Competitor. For purposes of this Agreement, “Competitor”
means a Person anywhere in North America (the “Restricted Area”) that at any time during the period of time
during which you are employed by the Company, or any time during the Restricted Period engages in the business of operating retail
stores and/or websites for the sale of women’s apparel, jewelry, accessories, gifts, greeting cards, picture frames and related
items or any other business that the Company is engaged in, or reasonably anticipates becoming engaged in. The parties hereto agree
that the Company intends to engage in business throughout the Restricted Area, even if it does not currently do so, and therefore
its scope is reasonable. Nothing herein shall prohibit you from being a passive owner of not more than 2% of the outstanding stock
of any class of a corporation which is publicly traded, so long as you have no active participation in the business of such corporation.
The term “Person” as used in this Agreement shall be construed broadly and shall include, without limitation,
an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(c)  
Non-Solicitation of Employees and Consultants. During your employment with the Company and during the Restricted
Period, you will not, and should be enjoined (if necessary) from being able to directly or indirectly through any other Person:
(i) induce or attempt to induce any employee or independent contractor of the Company or any affiliate of the Company to leave
the employ or service, as applicable, of the Company or such affiliate, or in any way interfere with the relationship between the
Company or any such affiliate, on the one hand, and any employee or independent contractor thereof, on the other hand, or (ii) hire
any person who was an employee of the Company or any affiliate of the Company until twelve (12) months after such individual’s
employment relationship with the Company or such affiliate has been terminated.

 

(d)  
Non-Solicitation of Customers; Non-Disparagement. During your employment with the Company and during the Restricted
Period, you will not, and should be enjoined (if necessary) from being able to directly or indirectly through any other Person:
(i) influence or attempt to influence customers, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants,
agents, or partners of the Company or any affiliate of the Company to divert their business away from the Company or such affiliate;
and (ii) interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company
or any affiliate of the Company, on the one hand, and any of its or their customers, suppliers, vendors, lessors, licensors, joint
venturers, associates, officers, employees, consultants, managers, partners, members or investors, on the other hand.

 

    	 	6	 

     

    

 

You agree that you will
not disparage, ridicule or criticize the Company or its affiliates and its and their present and former employees, directors and
officers, or make any remarks or statements that could reasonably be construed as disparaging, ridiculing or criticizing any of
them; provided, however, the foregoing shall not prohibit you from giving truthful testimony in any legal proceeding
pending before any agency or court of the United States or state government or in any arbitration proceeding relating to this Agreement.

 

(e)  
Understanding of Covenants. You acknowledge and agree that the Company would not have entered into this Agreement,
providing for severance protections to you on the terms and conditions set forth herein, but for your agreements herein. You agree
that the foregoing covenants set forth in this Section 6 (the “Restrictive Covenants”) are reasonable,
including in temporal and geographical scope, and in all other respects, and necessary to protect the Company’s and its affiliates’
Trade Secrets and Confidential Information, good will, stable workforce, and customer relations. The parties hereto intend that
Restrictive Covenants shall be deemed to be a series of separate covenants, one for each county or province of each and every state
or jurisdiction within the Restricted Area and one for each month of the Restricted Period. You understand that the Restrictive
Covenants may limit your ability to earn a livelihood in a business similar to the business of the Company and any of its affiliates,
but you nevertheless believe that you have received and will receive sufficient consideration and other benefits as an employee
of the Company and as otherwise provided hereunder or as described in the recitals hereto to clearly justify such restrictions
which, in any event (given your education, skills and ability), you do not believe would prevent you from otherwise earning a living.
You agree that the Restrictive Covenants do not confer a benefit upon the Company disproportionate to your detriment.

 

(f)   
Enforcement. You agree that a breach by you of any of the covenants in this Section 6 would cause immediate
and irreparable harm to the Company that would be difficult or impossible to measure, and that damages to the Company for any such
injury would therefore be an inadequate remedy for any such breach. Therefore, you agree that in the event of any breach or threatened
breach of any provision of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other
remedies the Company may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive relief and/or
other appropriate relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions
of this Section 6, or require you to account for and pay over to the Company all compensation, profits, moneys, accruals,
increments or other benefits derived from or received as a result of any transactions constituting a breach of this Section 6,
if and when final judgment of a court of competent jurisdiction is so entered against you.

 

7.     
Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause
there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal,
state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

    	 	7	 

     

    

 

8.     
Successors and Assigns. This Agreement is personal to you and without the prior written consent of the Company
shall not be assignable by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

 

9.     
Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED.

 

10. 
Severability. If any provision of this Agreement is found by any court of competent jurisdiction to be invalid
or unenforceable for any reason, such finding shall not affect, impair or invalidate the remainder of this Agreement. If any aspect
of any restriction herein is too broad or restrictive to permit enforcement to its fullest extent, you and the Company agree that
any court of competent jurisdiction shall modify such restriction to the minimum extent necessary to make it enforceable and then
enforce the provision as modified.

 

11. 
Entire Agreement, Amendment and Waiver. This Agreement constitutes the entire agreement between you and the
Company with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications
respecting such subject matter. This Agreement shall not be modified, amended or in any way altered except by written instrument
signed by you and the Company’s Chief Executive Officer. A waiver by either party hereto of any rights or remedies hereunder
on any occasion shall not be a bar to the exercise of the same right or remedy on any subsequent occasion or of any other right
or remedy at any time.

 

12. 
Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

13. 
Remedies. Each of the parties to this Agreement and any such person or entity granted rights hereunder whether
or not such person or entity is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to
recover damages and costs for any breach of any provision of this Agreement and to exercise all other rights existing in its favor.
The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that each party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific
performance, injunctive relief and/or other appropriate equitable relief (without posting any bond or deposit) in order to enforce
or prevent any violations of the provisions of this Agreement. Each party shall be responsible for paying its own attorneys’
fees, costs and other expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding
or any judgment or verdict thereon is entered against either party.

 

14. 
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed
an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument.

 

[Signature page follows]

 

    	 	8	 

     

    

 

IN WITNESS WHEREOF,
you and the Company have executed this Agreement as of July 1, 2019.

 

	 	Francesca’s Services Corporation
	 	 	a Delaware corporation
	 	Francesca’s Collections, Inc.
	 	 	a Texas corporation
	 	Francesca’s Holdings Corporation
	 	 	a Delaware corporation
	 	 	 
	 	By: 	/s/ Michael Prendergast
	 	 	Michael Prendergast
	 	 	Interim Chief Executive Officer
	 	 	 
	 	 	 
	 	AGREED BY:
	 	 
	 	/s/ 	Cynthia Thomassee
	 	 	Cynthia Thomassee

 

    	 	9a190823ccepplcuksharepla

                           RULES AND TRUST DEED                                                OF THE   COCA-COLA EUROPEAN PARTNERS PLC UK SHARE PLAN                              Board Adoption:             20 August 2019                             HMRC Registered:                             HMRC Reference:    www.tapestrycompliance.com  

 

Table of Contents   1.    Meaning of words used ........................................................................................................................... 1  2.    Purpose ................................................................................................................................................... 5  3.    Eligible Employees .................................................................................................................................. 5  4.    Invitations ................................................................................................................................................ 6  5.    Free Share Awards.................................................................................................................................. 6  6.    Partnership Share Awards ...................................................................................................................... 9  7.    Matching Share Awards ........................................................................................................................ 13  8.    Dividend Share Awards ......................................................................................................................... 15  9.    Corporate events ................................................................................................................................... 16  10.   Withholding ............................................................................................................................................ 16  11.   General .................................................................................................................................................. 16  12.   Changing the Plan and termination ....................................................................................................... 19  13.   Governing law and jurisdiction .............................................................................................................. 20  Coca-Cola European Partners plc UK Share Plan Trust ................................................................................. 21  1.    Meaning of words used ......................................................................................................................... 21  2.    Background ........................................................................................................................................... 21  3.    Declaration of Trust ............................................................................................................................... 22  4.    Trustee’s general powers and duties .................................................................................................... 22  5.    Plan Shares ........................................................................................................................................... 24  6.    Effect of Holding Period ......................................................................................................................... 25  7.    Cash dividends ...................................................................................................................................... 25  8.    Entitlements ........................................................................................................................................... 26  9.    Information and accounting for tax ........................................................................................................ 26  10.   Voting rights ........................................................................................................................................... 27  11.   Power to make regulations .................................................................................................................... 27  12.   Trustee’s indemnity and expenses ........................................................................................................ 27  13.   Appointment, removal and retirement of Trustee .................................................................................. 28  14.   Residence of the Trustee ...................................................................................................................... 28  15.   Number of trustees ................................................................................................................................ 28  16.   Termination ............................................................................................................................................ 29  17.   Counterparts .......................................................................................................................................... 29  18.   General .................................................................................................................................................. 29                                      Coca-Cola European Partners plc UK Share Plan                                                    (i)  

 

                         Coca-Cola European Partners plc UK Share Plan   1.    Meaning of words used   1.1   General         In these rules:         “Accumulation Period” means the period determined by the Board in accordance with rule 6.5 (Board        to determine whether an Accumulation Period is to apply);         “Associated Company” means a company which is an associated company (within the meaning in        paragraph 94 of Schedule 2) of the Company;         “Award” means:         (i)   an appropriation of Free Shares or Matching Shares to a Participant by the Trustee; and/or         (ii)  an acquisition of Partnership Shares or Dividend Shares on behalf of a Participant,         and “awarded” and “awarding” will be understood accordingly;         “Award Date” means the date on which Plan Shares are awarded, which, in the case of Partnership        Shares or Dividend Shares, is in accordance with paragraphs 50(4), 52(5) or 66(4) of Schedule 2, as        appropriate;         “Award Notice” means a notice in such form as agreed between the Company and the Trustee from        time to time;         “Board” means the board of directors of the Company or, as appropriate, a committee duly authorised        to carry out that board’s functions under the Plan;         “Capital Receipt” has the meaning in section 502 of ITEPA;         “Companies Act” means the UK Companies Act 2006;         “Company” means Coca-Cola European Partners plc with registered company number 9717350;         “Connected Company” has the meaning in paragraph 18(3) of Schedule 2;         “Control” has the meaning in section 719 of ITEPA;         “Dealing Day” means a day on which the New York Stock Exchange (or, if the Board determines, any        other stock exchange on which the Shares are traded) is open for the transaction of business;         “Dealing  Restrictions”  means  any  internal  or  external  restrictions  on  dealings  or  transactions  in        securities;         “Deed”  means  the  trust  deed  entered  into  between  the  Company  and  the  Trustee  dated        ......23  August 2019, establishing the Trust for the purposes of the Plan and a copy of which is attached        as a Schedule to these rules;         “Dividend  Shares”  means  Shares  which  are  awarded  to  Participants  in  accordance  with  rule  8        (Dividend Share Awards) and held by the Trustee upon the terms of the Plan;         “Eligibility Date” means, in the case of:         (i)   Free Shares, the applicable Award Date;         (ii)  Partnership  Shares  where  no  Accumulation  Period  applies,  the  date  of  the  deduction  of              Partnership Share Money;                                      Coca-Cola European Partners plc UK Share Plan                                                (Page 1 of 31)  

 

(iii)  Partnership  Shares  where  an  Accumulation  Period  applies,  the  date  of  the  first  deduction  of        Partnership Share Money; and   (iv)  Matching Shares, the same date as for the Partnership Shares to which they relate;   “Eligible Employee” means any person who meets the requirements of rule 3.1 (Eligibility);   “Forfeiture Period” means the period (if any) beginning on the applicable Award Date and ending on  such date as the Board determines, and which will apply to all Free Shares and/or Matching Shares in  the same Award;   “Free Shares” means Shares which are awarded to Participants in accordance with rule 5 (Free Share  Awards) and held by the Trustee upon the terms of the Plan;   “Free Share  Agreement”  means an agreement in respect of Free Shares,  in such form as may be  agreed by the Company and the Trustee from time to time, which complies with Schedule 2;   “Free Share Limit” means the amount specified in paragraph 35(1) of Schedule 2 from time to time;   “Good Leaver Reason” means:   (i)   injury or disability;   (ii)  redundancy within the meaning of the UK Employment Rights Act 1996;   (iii)  a  relevant  transfer  within  the  meaning  of  the  UK  Transfer  of  Undertakings  (Protection  of        Employment) Regulations 2006;   (iv)  if the Relevant Employment is employment by an Associated Company, a change of Control or        other circumstances ending the Associated Company status;   (v)   retirement;   (vi)  death; or   (vii)  becoming an employee of The Coca-Cola Company, or of an employer that is a franchisee of The        Coca-Cola Company, immediately following ceasing Relevant Employment;   “Group” means all Participating Companies and Associated Companies at the relevant time;   “HMRC” means Her Majesty’s Revenue & Customs in the UK;   “Holding Period” means:   (i)   in relation to Free Shares or Matching Shares, a period of between 3 and 5 years, beginning with        the Award Date, as specified by the Board; and   (ii)  in relation to Dividend Shares, a period of 3 years, beginning with the Award Date,   which must be the same for all Free Shares or Matching Shares in the same Award and which may not  be increased in respect of Free Shares and Matching Shares already awarded under the Plan;   “Initial Market Value” means the Market Value of a Share on the Award Date;   “ITEPA” means the UK Income Tax (Earnings and Pensions) Act 2003;   “Market Value” means in relation to a Share on any date:   (i)   where Shares  are  acquired on  behalf of  Participants under  the Plan  on the open market, the        average price paid (excluding stamp duty, stamp duty  reserve tax and  all fees  and  expenses        incurred  in  connection  with  the  purchase)  by  the  Trustee  to  acquire  all  such  Shares  for  the                                 Coca-Cola European Partners plc UK Share Plan                                          (Page 2 of 31)  

 

      purposes of the Plan on that day or where Shares are acquired over more than one consecutive        day, the average of such prices over up to five consecutive days; or otherwise   (ii)  the relevant value of the following on the day prior to that date:         (a)   which is a day when the New York Stock Exchange is open, the lower of the 2 prices shown              as the closing price for the Shares on that day plus one-half of the difference between those              2 figures, or where only one value is shown as the closing price for the Shares, that closing              price; or         (b)   which  is  a  day  when  the  New  York  Stock  Exchange  is  closed,  the  price  determined  in              accordance with paragraph (ii)(a) above for the Shares on the latest previous day on which              it was open; or   (iii)  save as mentioned above, its market value as determined in accordance with Part VIII of the UK        Taxation of Chargeable Gains Act 1992 and agreed in advance with HMRC,   and if Shares are subject to a Restriction, Market Value will be determined as if the Shares were not  subject to a Restriction;  “Matching  Shares”  means  Shares  which  are  awarded  to  Participants  in  accordance  with  rule 7  (Matching Share Awards) and held by the Trustee upon the terms of the Plan;   “New Shares” means shares which satisfy the requirements of paragraph 87(7) of Schedule 2;   “NICs” means UK national insurance contributions;   “Participant” means any individual  who has entered into a  Partnership  Share  Agreement and/or on  whose behalf the Trustee holds Plan Shares or, where the individual has died, the Participant’s personal  representatives;   “Participating Company” means the Company and any company which is:   (i)   a Subsidiary of which the Company has Control; and   (ii)  designated by the Board (at the relevant time) as a participating company for the purposes of the        Plan;   “Partnership  Shares”  means  Shares  which  are  awarded  to  Participants  in  accordance  with  rule 6  (Partnership Share Awards) and held by the Trustee upon the terms of the Plan;   “Partnership  Share  Agreement”  means  an  agreement  in  respect  of  Partnership  Shares  and  (if  relevant) Matching Shares, and in such form as may be agreed by the Company and the Trustee from  time to time, which complies with Schedule 2;   “Partnership Share Annual Limit” means the annual limit specified from time to time in paragraphs  46(1) and 46(2) of Schedule 2;   “Partnership Share Minimum Limit” means an amount determined by the Board and set out in the  Partnership Share Agreement, which will not be more than £10 or, if different, such amount specified  from time to time in paragraph 47(2) of Schedule 2;   “Partnership Share Money” means money deducted from a Participant's Salary in accordance with a  Partnership Share Agreement, to be held in accordance with the Plan and used for the acquisition of  Partnership Shares;   “PAYE” means pay as you earn;                                 Coca-Cola European Partners plc UK Share Plan                                          (Page 3 of 31)  

 

“Performance  Unit” means an Eligible Employee, the Company, the Group, any member of the Group  or an Eligible Employee's business unit;   “Plan” means the plan constituted by these rules and the Deed and known as the Coca-Cola European  Partners plc UK Share Plan, as amended from time to time;   “Plan Shares” means Shares held by the Trustee on behalf of Participants upon the terms of the Plan  comprising Free Shares, Partnership Shares, Matching Shares and/or Dividend Shares and any shares  treated as “Plan Shares” in accordance with paragraphs 87 or 88 of Schedule 2;   “Qualifying  Deposit  Taker”  means  a  deposit  taker  that  satisfies  the  requirements  of  paragraphs  49(3)(a) to (c) of Schedule 2;   “Reconstruction or Takeover” means a transaction or an event affecting any Plan Shares which:   (i)   is an offer for those Plan Shares which, if accepted, would result in a new holding being equated        with those Plan Shares for the purposes of capital gains tax;   (ii)  is an offer of a qualifying corporate bond (whether alone or with other assets or cash or both) for        those Plan Shares if the offer forms part of a general offer as is mentioned in paragraph 37(5) of        Schedule 2;   (iii)  is an offer of cash, with or without other assets, for those Plan Shares if the offer forms part of a        general offer as is mentioned in paragraph 37(5) of Schedule 2;   (iv)  would  be  entered  into  pursuant  to  a  compromise,  arrangement  or  scheme  which  meets  the        requirements in paragraph 37(3) of Schedule 2; or   (v)   is the exercise of a right to sell the Plan Shares in connection with a takeover offer and which        arises in accordance with paragraph 37(8) of Schedule 2;   “Relevant Employment” means employment by the Company or any Associated Company;   “Restriction” has the meaning given by paragraph 99(4) of Schedule 2;   “Salary” has the meaning given by paragraph 43(4) of Schedule 2;   “Schedule 2” means Schedule 2 to ITEPA;   “Schedule 2 SIP” means a share incentive plan in relation to which Parts 2 to 9 of Schedule 2 are met;   “Share” means a share in the Company that meets the requirements of paragraphs 26 to 29 of Schedule  2;   “SIP Code” has the meaning given in section 488(3) of ITEPA;   “Subsidiary” means any company which is a subsidiary of the Company within the meaning of section  1159 of the Companies Act;   “Taxation”  means  any  tax,  NICs  and  other  social  security  charges  (and/or  any  similar  charges),  wherever  arising,  in  respect  of  a  Participant’s  Award  or  otherwise  arising  in  connection  with  a  Participant’s participation in the Plan, including the repayment of any Partnership Share Money to a  Participant;   “Tax Year” means a UK tax year beginning on 6 April and ending on the following 5 April;   “Termination Period” means a period of 3 months (or such other “notice period” specified in paragraph  90(4) of Schedule 2) commencing on the day on which all the termination notices required under rule  12.3 (Termination of Plan) have been sent out;                                 Coca-Cola European Partners plc UK Share Plan                                          (Page 4 of 31)  

 

      “Trust” the Coca-Cola European Partners plc UK Share Plan Trust, set up and regulated by the Deed;         “Trust Fund” has the meaning given in the Deed;         “Trustee” means the trustee(s) of the Trust at the relevant time and/or from time to time (as appropriate);        and         “UK” means the United Kingdom.   1.2   Interpretation         In  the  Plan,  the  singular  includes  the  plural  and  the  plural  includes  the  singular.  References  to  any        enactment or statutory requirement will be understood as references to that enactment or requirement        as  amended  or  re-enacted  and  they  include  any  subordinate  legislation  made  under  it.  Unless  the        context requires otherwise, words and expressions used in the Plan will have the meanings given in the        SIP Code.   1.3   Interpretation consistent with Schedule 2         This Plan will be interpreted so as to be consistent with Schedule 2.   2.    Purpose         The Plan is intended to operate as a Schedule 2 SIP and also as an “employees' share scheme” as        defined in section 1166 of the Companies Act. The Company has established the Plan to provide benefits        to Eligible Employees and/or Participants in the form of Shares which give them a continuing stake in        the Company. The Plan will not provide benefits to Eligible Employees and/or Participants otherwise        than in accordance with Schedule 2.   3.    Eligible Employees   3.1   Eligibility         A person is an Eligible Employee if and to the extent that person:         3.1.1    is a UK resident taxpayer, within the meaning of paragraph 8(2) of Schedule 2;         3.1.2    has continuous employment with a qualifying company (or several qualifying companies in                 succession), within the meaning given in paragraph 17 of Schedule 2, over such qualifying                 period as the Board may determine in accordance with rule 3.3 (Qualifying period);         3.1.3    is an employee of any Participating Company on the Eligibility Date;          3.1.4    is eligible at the time referred to in paragraph 14(1) of Schedule 2; and         3.1.5    is not excluded as result of rule 3.2 (Excluded employees).         The Board may permit any other employee who satisfies rules 3.1.2, 3.1.3, 3.1.4 and 3.1.5 to participate        in the Plan as an Eligible Employee.   3.2   Excluded employees         A person will not be eligible to participate in an Award of Free Shares, Partnership Shares or Matching        Shares if that person is at the same time to participate in another Schedule 2 SIP established by the        Company or a Connected Company or would otherwise have participated in accordance with paragraph        18(2) of Schedule 2.         Where a Participant participates in an Award of Free Shares or Partnership Shares in a Tax Year in        which the Participant has already participated in an award of shares under one or more other Schedule                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 5 of 31)  

 

      2  SIPs  established  by  the  Company  or  a  Connected  Company,  then  the  Free  Share  Limit  and  the        Partnership Share Annual Limit apply as if the Plan and the other Schedule 2 SIPs were a single plan        as required by paragraph 18A of Schedule 2.   3.3   Qualifying period         The Board may require satisfaction of a qualifying period in order to be an Eligible Employee. Qualifying        periods must not be longer than:         3.3.1    in the case of Free Shares, 18 months ending on the Award Date;         3.3.2    in the case of Partnership Shares and any Matching Shares which relate to them, where no                 Accumulation  Period  applies,  18  months  ending  with  the  deduction  of  Partnership  Share                 Money; and         3.3.3    in the case of Partnership Shares and any Matching Shares which relate to them, where an                 Accumulation Period applies, 6 months ending with the start of the Accumulation Period.         In relation to an Award, the same qualifying period must apply in relation to all Eligible Employees but        different qualifying periods may apply to different Awards.   4.    Invitations   4.1   Share offers         The Board may decide from time to time to issue invitations to Eligible Employees to participate in any        one or more of the following Awards:         4.1.1    Free Shares;         4.1.2    Partnership Shares; and         4.1.3    Matching Shares (if Partnership Shares are being awarded).   4.2   All Eligible Employees to be invited         On  each  occasion  that  the  Board  decides  to  issue  invitations  to  participate  in  the  Plan,  all  Eligible        Employees must be invited to participate.   4.3   Participation on same terms         Except for any differences caused by the application of rule 5.4 (Determining Free Share Awards) or        rule 5.6.1(ii), on each occasion that the Board decides to issue invitations to participate in the Plan, all        Eligible Employees must:         4.3.1    be invited to participate on the same terms; and         4.3.2    for those Eligible Employees who do participate, actually participate on the same terms.   5.    Free Share Awards   5.1   Number of Free Shares awarded         Where the Board has determined that invitations will be issued to Eligible Employees to participate in        an Award of Free Shares, the Board may specify that:         5.1.1    each Participant receives a certain number or value of Free Shares, which will be the same                 for all Participants;                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 6 of 31)  

 

      5.1.2    the number or value of Free Shares received by each Participant is determined in accordance                 with rules 5.4 (Determining Free Share Awards) and 5.5 (Free Share entitlements); or         5.1.3    the number or value of Free Shares received by each Participant is determined in accordance                 with rule 5.6 (Performance allowances – methods).   5.2   Accepting Free Share Awards         An Eligible Employee who wishes to participate in an Award of Free Shares must enter into a Free Share        Agreement that will either:         5.2.1    ask the Eligible Employee to agree to the Free Share Award by completing and accepting the                 Free Share Agreement, in such form (including electronic) as the Board determines, by the                 date specified, which is at least 14 days after the date of issue of the Free Share Agreement,                 but in any event prior to the relevant Award Date; or         5.2.2    state that the Eligible Employee will be deemed to have agreed to the Free Share Award on                 the terms of the Free Share Agreement unless the Eligible Employee opts out in the manner                 and by the date specified, which is at least 25 days after the date of issue of the Free Share                 Agreement, but in any event prior to the relevant Award Date.         References  in  the  Plan  to  “entering  into”  a  Free  Share  Agreement  (or  words  to  that  effect)  will  be        interpreted accordingly. References in the Plan to “signing and returning” a Free Share Agreement (or        words to that effect) may include electronic acceptance and submission.   5.3   Free Share Agreements         A Free Share Agreement will bind the relevant Participant in contract with the Company:         5.3.1    to permit the Participant’s Free Shares to remain in the hands of the Trustee throughout the                 applicable Holding Period;         5.3.2    so that the Participant agrees not to assign, charge or otherwise dispose of the Participant’s                 beneficial interest in those Free Shares during the applicable Holding Period; and         5.3.3    to  ensure  that  any  Free  Shares  ceasing  to  be  subject  to  the  Plan  are  subject  to  rule  10                 (Withholding).         A Free Share Agreement will also specify any Forfeiture Period that will apply to the Free Shares.   5.4   Determining Free Share Awards         The Board may determine that Free Shares will be awarded to Eligible Employees who have entered        into a Free Share Agreement using one or more of the following methods:         5.4.1    by reference to the Eligible Employee’s remuneration;         5.4.2    by reference to the Eligible Employee’s length of service; and/or         5.4.3    by reference to the hours worked by the Eligible Employee.         The same method or methods must be used for all Free Shares awarded to Eligible Employees on the        same Award Date.                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 7 of 31)  

 

5.5   Free Share entitlements         Where Free Shares are awarded by reference to more than one of the methods set out in rules 5.4.1 to        5.4.3:         5.5.1    each method must give rise to a separate entitlement to Free Shares related to the level of                 remuneration, length of service or the number of hours worked (as the case may be); and         5.5.2    the total entitlement to Free Shares will be the sum of those separate entitlements.   5.6   Performance allowances – methods         The Board may determine that the number or value of Free Shares to be awarded to Eligible Employees        who have entered into a Free Share Agreement will be conditional on performance targets being met. If        this is the case, rule 5.6.1 or rule 5.6.2 will apply so that either:         5.6.1    method 1 applies, which means:                  (i)   at least 20% of the Free Shares must be awarded without reference to the achievement                       of performance targets but consistent with rule 4.3 (Participation on same terms) and, if                       relevant, rules 5.4 (Determining Free Share Awards) and 5.5 (Free Share entitlements);                  (ii)  the  remaining  Free  Shares  must  be  awarded  by  reference  to  the  achievement  of                       performance targets; and                  (iii)  the highest number of Free Shares within rule 5.6.1(ii) awarded to a Participant must                       not be more than 4 times the highest number of Shares within rule 5.6.1(i) awarded to                       a Participant; or         5.6.2    method 2 applies, which means:                  (i)   some or all of the Free Shares must be awarded by reference to the achievement of                       performance targets;                  (ii)  Free Shares must be awarded to all members of the same Performance Unit consistent                       with rule 4.3 (Participation on same terms) and, if relevant, rules 5.4 (Determining Free                       Share Awards) and 5.5 (Free Share entitlements); and                  (iii)  whilst there is no requirement for Free Shares to be awarded to members of different                       Performance Units on the same terms, the performance targets must be viewed by the                       Board as being comparable in terms of the likelihood of being met by the Performance                       Units.   5.7   Performance allowances – application         Where rule 5.6 (Performance allowances – methods) applies:         5.7.1    the same method (either method 1 or method 2) will be used for all Participants who take part                 in that Award;         5.7.2    the performance measures will be based on business results or other objective criteria;         5.7.3    the  performance  targets  (set  by  reference  to  the  performance  measures)  must  be  set  for                 Performance Units of one or more employees and will be determined over or by reference to                 such period as the Board determines;         5.7.4    the performance measures will be based on fair and objective measures of performance of                 the relevant Performance Unit;                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 8 of 31)  

 

      5.7.5    an employee must not be a member of more than one Performance Unit for the purposes of                 an Award;         5.7.6    the Company must notify every Eligible Employee who has accepted an invitation to participate                 in a Free Share Award of the performance measures and performance targets to be used to                 determine the number or value of Free Shares that will apply to that Eligible Employee;         5.7.7    the  Company  must  notify  all  Eligible  Employees,  in  general  terms,  of  the  performance                 measures to be used to determine the number or value of Free Shares to be awarded to each                 Participant in the Award. The Company does not have to disclose information it reasonably                 considers would prejudice commercial confidentiality; and         5.7.8    the  Company  must  give  the  notifications  referred  to  in  rules  5.7.6  and  5.7.7  as  soon  as                 reasonably practicable.   5.8   Free Share Limit         The total Initial Market Value of all Free Shares awarded to a Participant in any Tax Year will not exceed        the Free Share Limit.   5.9   Withdrawal of Free Shares         A Participant may direct the Trustee to withdraw the Participant’s Free Shares from the Plan at any time        on or after the later of the expiry of the Holding Period and the expiry of any Forfeiture Period, subject        to the terms of the Free Share Agreement. The Trustee will then withdraw the Free Shares from the        Plan as soon as practicable in accordance with the Participant’s instructions.         If a Participant withdraws Free Shares during any Forfeiture Period, the Participant will forfeit such Free        Shares.   5.10  Ceasing Relevant Employment (Free Shares)         If a Participant ceases Relevant Employment, the Holding Period in respect of the Participant’s Free        Shares will cease to apply, the Participant’s Free Shares will cease to be subject to the Plan and, as        soon  as  practicable,  those  Free  Shares  will  be  dealt  with  in  accordance  with  the  Participant’s        instructions.         However,  if  a  Participant  ceases  Relevant  Employment  before  the  end  of  any  applicable  Forfeiture        Period, other than for a Good Leaver Reason, the Participant’s Free Shares will be forfeited and the        Participant will have no further entitlement to them.   6.    Partnership Share Awards   6.1   Terms of Partnership Share Agreements         If the Board decides to offer Partnership Shares, a Partnership Share Agreement will be issued to each        Eligible Employee which will:         6.1.1    specify the start date and length of the Accumulation Period, if any;         6.1.2    specify the amount of Partnership Share Money to be deducted;         6.1.3    specify the intervals at which Partnership Share Money will be deducted;         6.1.4    include a notice containing prescribed information as to the possible effect of deductions on                 certain benefits, as required by paragraph 48 of Schedule 2;                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 9 of 31)  

 

      6.1.5    if an Accumulation Period will apply, specify the basis for calculating the number of Shares to                 be awarded to each Participant in accordance with rule 6.7.4 and, if relevant, specify that the                 Accumulation Period will come to an end on the occurrence of a specified event; and         6.1.6    include an undertaking by the Company to notify the Eligible Employee of any restriction on                 the  number  of  Shares  to  be  included  in  an  offer  in  accordance  with  rule  6.3  (Maximum                 Partnership Share offers).   6.2   Effect of Partnership Share Agreements         A Partnership Share Agreement will bind the relevant Participant in contract with the Company:         6.2.1    so that the employing company is permitted to deduct from the Eligible Employee’s Salary:                  (i)   not less than the Partnership Share Minimum Limit on any occasion; and                  (ii)  not more than the Partnership Share Annual Limit,                  for the purpose of acquiring Partnership Shares;         6.2.2    so that the Company undertakes to arrange for Partnership Shares to be awarded and for                 them to be held in accordance with the Plan; and         6.2.3    to ensure that any Partnership Shares ceasing to be subject to the Plan are subject to rule 10                 (Withholding).   6.3   Maximum Partnership Share offers         The Board may specify the maximum number of Shares to be included in an offer of Partnership Shares,        in which case it will notify all relevant Eligible Employees:         6.3.1    if there is no Accumulation Period, before the first deduction of the Partnership Share Money                 relating to the offer, and         6.3.2    if there is an Accumulation Period, before the beginning of that Accumulation Period.   6.4   Regular offers         The Board will determine whether Partnership Shares are to be offered at regular intervals or on a one-       off basis (or both at regular intervals and on a one-off basis). The Board may offer Partnership Shares        on one or more occasions in any year, whether at regular intervals or not.   6.5   Board to determine whether an Accumulation Period is to apply         The Board will determine whether an Accumulation Period will apply and, if so, its start date, length and        whether the Accumulation Period will terminate on the occurrence of a specified event.         If an Accumulation Period applies:         6.5.1    it must not exceed 12 months;         6.5.2    the  beginning  of  the  first  Accumulation  Period  must  not  be  later  than  the  date  of  the  first                 deduction of Partnership Share Money; and         6.5.3    it must be the same for all Eligible Employees in the same Award.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 10 of 31)  

 

6.6   Acquisitions where there is no Accumulation Period         If no Accumulation Period applies:         6.6.1    all Partnership Share Money deducted in accordance with the Partnership Share Agreement                 will be transferred to the Trustee as soon as practicable;         6.6.2    the Trustee will then hold the Partnership Share Money on behalf of the Participant until such                 time as it is applied by the Trustee to acquire Partnership Shares on behalf of the Participant;         6.6.3    within 30 days after the last date on which the Partnership Share Money was deducted from                 a Participant’s Salary, the Trustee will use it to Award Partnership Shares;         6.6.4    the number of Partnership Shares to be awarded to each Participant will be determined in                 accordance with the Initial Market Value; and         6.6.5    any Partnership Share Money remaining in the Trustee’s hands after Partnership Shares have                 been awarded will be paid to each Participant as soon as practicable unless the Participant                 agrees  that  the  remaining  Partnership  Share  Money  may  be  retained  by  the  Trustee  and                 added to the next amount of Partnership Share Money deducted from the relevant Participant’s                 Salary.   6.7   Acquisitions where there is an Accumulation Period         If an Accumulation Period applies:         6.7.1    all Partnership Share Money deducted in accordance with the Partnership Share Agreement                 during the Accumulation Period will be transferred to the Trustee as soon as practicable;         6.7.2    the Trustee will then hold the Partnership Share Money on behalf of the Participant until such                 time as it is applied by the Trustee to acquire Partnership Shares on behalf of the Participant;         6.7.3    within 30 days after the end of the Accumulation Period, the Trustee will use the Partnership                 Share Money to Award Partnership Shares;         6.7.4    the number of Partnership Shares to be awarded to each Participant will be determined by                 reference to whichever of the following is specified in the Partnership Share Agreement:                  (i)   the Market Value on the first day of the Accumulation Period;                  (ii)  the Initial Market Value; or                  (iii)  the lower of rules 6.7.4(i) and 6.7.4(ii); and         6.7.5    any Partnership Share Money remaining in the Trustee’s hands after Partnership Shares have                 been awarded will be paid to each Participant as soon as practicable unless the Participant                 agrees  that  the  remaining  Partnership  Share  Money  may  be  retained  by  the  Trustee  and                 carried forward to the next Accumulation Period.   6.8   Holding and application of Partnership Share Money         Partnership Share Money must be held by the Trustee in an account with a Qualifying Deposit Taker        until it is either:         6.8.1    used by the Trustee to Award Partnership Shares; or         6.8.2    repaid to the Participant under any other rule of the Plan.                                       Coca-Cola European Partners plc UK Share Plan                                                (Page 11 of 31)  

 

6.9   Treatment of excess deductions         Any amount deducted in excess of that specified in the Partnership Share Agreement will be paid over        to the Participant as soon as practicable.   6.10  Scaling back         If  the  Company  receives  applications  for  Partnership  Shares  exceeding  the  maximum  specified  in        accordance with rule 6.3 (Maximum Partnership Share offers) then the following steps will be taken in        sequence until the excess is eliminated:         6.10.1   the excess of each Participant’s deduction over the Partnership Share Minimum Limit will be                 reduced pro rata;         6.10.2   each deduction will be reduced to the Partnership Share Minimum Limit; and         6.10.3   applications will be selected by lot, on the basis that each deduction is of the Partnership Share                 Minimum Limit.         Each application will be deemed to be modified or withdrawn in accordance with these provisions, and        each Eligible Employee who has applied for Partnership Shares will be notified of the change.   6.11  Transaction during an Accumulation Period         If, during an Accumulation Period, a transaction occurs in relation to any of the Partnership Shares (the        “Original Holding”) to be awarded under a Partnership Share Agreement which results in a new holding        of shares being equated with the Original Holding for the purposes of capital gains tax, the Participant        may agree that the Partnership Share Agreement is to have effect after the time of the transaction as if        it were an agreement for the purchase of shares in the new holding.   6.12  Stopping and restarting deductions         A Participant:        6.12.1   may give notice to the Company to stop deductions of Partnership Share Money at any time.                 Unless  a  later  date  is  specified  in  the  notice,  the  Company  must  ensure  that  no  further                 deductions are made within 30 days after it receives the notice;         6.12.2   who has stopped deductions of Partnership Share Money may subsequently give notice to the                 Company to restart deductions under the Participant’s Partnership Share Agreement. Unless                 a later date is specified in the notice, the Company must ensure that deductions are restarted                 no later than the date of the first deduction due under the Partnership Share Agreement that                 falls more than 30 days after the Company receives the notice;         6.12.3   who restarts deductions may not make up any deductions that have been missed while the                 deductions were stopped; and         6.12.4   may not restart deductions more than once during any Accumulation Period.   6.13  Varying deductions         A Partnership Share Agreement may include provisions allowing the Participant to vary deductions from        the Participant’s Salary subject to the limits set out in the Plan and the Partnership Share Agreement.   6.14  No forfeiture         Partnership Shares cannot be forfeited.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 12 of 31)  

 

6.15  Withdrawal from Partnership Share Agreement         A Participant may withdraw from a Partnership Share Agreement at any time by notice to the Company.        Unless a later date is specified in the notice, it will take effect 30 days after the Company receives it.         Any  Partnership  Share  Money  held  on  behalf  of  a  Participant  at  the  time  of  withdrawal  from  the        Partnership Share Agreement will be repaid to the Participant as soon as practicable.   6.16  Right to withdraw Partnership Shares         A Participant may direct the Trustee to withdraw that Participant’s Partnership Shares from the Plan at        any time, in accordance with the Partnership Share Agreement, but this may result in the Participant        forfeiting some or all of the corresponding Matching Shares in accordance with rule 7.5 (Forfeiture on        withdrawal of related Partnership Shares).         The  Trustee  will  then  withdraw  the  Partnership  Shares  from  the  Plan  as  soon  as  practicable  in        accordance with the Participant’s instructions.   6.17  Ceasing Relevant Employment (Partnership Shares)         If a Participant ceases Relevant Employment:         6.17.1   the Participant’s Partnership Shares will cease to be subject to the Plan;         6.17.2   as  soon  as  practicable,  the  Partnership  Shares  will  be  dealt  with  in  accordance  with  the                 Participant’s instructions; and         6.17.3   any Partnership Share Money will be transferred to the Participant as soon as practicable after                 such cessation, including where the cessation occurs during an Accumulation Period.   6.18  Time of ceasing employment         If a Participant ceases Relevant Employment at any time during the acquisition period, the Participant        will  be  treated  as  ceasing  Relevant  Employment  for  these  purposes  immediately  following  the        Partnership  Shares  being  awarded  following  the  end  of  the  acquisition  period  and  the  Plan  will  be        interpreted accordingly. For these purposes, “acquisition period” in relation to an Award of Partnership        Shares means:         6.18.1   where  there  was  no  Accumulation  Period,  the  period  beginning  with  the  deduction  of  the                 Partnership Share Money and ending with the Award Date; and         6.18.2   where  there  was  an  Accumulation  Period,  the  period  beginning  with  the  end  of  the                 Accumulation Period and ending immediately before the Award Date.   7.    Matching Share Awards   7.1   Matching Shares         Matching Shares must be:        7.1.1    of the same class and carry the same rights as the Partnership Shares to which they relate;         7.1.2    awarded on the same day as the Partnership Shares to which they relate; and         7.1.3    awarded to all Eligible Employees participating in the Matching Shares Award on exactly the                 same basis.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 13 of 31)  

 

7.2   Terms of Partnership Share Agreement         If the Board decides to  Award Matching Shares to  Eligible  Employees  who enter into a  Partnership        Share  Agreement,  the  Partnership  Share  Agreement  issued  to  each  Eligible  Employee  will  contain        information about the number of Matching Shares that will be awarded for each Partnership Share (being        not more than 2 Matching Shares for every Partnership Share or not more than such other ratio as may        be permitted by paragraph 60(2) of Schedule 2 from time to time).        The Partnership Share Agreement will bind the relevant Participant in contract with the Company:        7.2.1    to permit the Participant’s Matching Shares to remain in the hands of the Trustee throughout                 the applicable Holding Period;         7.2.2    so that the Participant agrees not to assign, charge or otherwise dispose of the Participant’s                 beneficial interest in those Matching Shares during the applicable Holding Period; and         7.2.3    to ensure that any Matching Shares ceasing to be subject to the Plan are subject to rule 10                 (Withholding).         The Partnership Share Agreement will also specify the Forfeiture Period that will apply to the Matching        Shares.   7.3   Matching ratio         The Board, in its absolute discretion, may alter the ratio of Matching Shares to Partnership Shares at        any time. However, the Company must give notice of any such change to all affected Eligible Employees        as soon as possible (and in any event before an Award of Partnership Shares is made under the varied        terms).   7.4   Withdrawal of Matching Shares         A Participant may direct the Trustee to withdraw the Participant’s Matching Shares from the Plan at any        time on or after the later of the expiry of the Holding Period that applies to them and the expiry of the        Forfeiture Period, subject to the terms of the Partnership Share Agreement. The Trustee will withdraw        the relevant Matching Shares as soon as practicable in accordance with the Participant’s instructions.         If a Participant withdraws Matching Shares during the Forfeiture Period, the Participant will forfeit such        Matching Shares.   7.5   Forfeiture on withdrawal of related Partnership Shares         If a Participant withdraws the Partnership Shares from the Plan before the end of the Forfeiture Period        which  applies  to  the  corresponding  Matching  Shares,  the  Participant  will  immediately  forfeit  the        corresponding Matching Shares and the Participant will have no further entitlement to them.   7.6   Ceasing Relevant Employment (Matching Shares)         If a Participant ceases Relevant Employment, the Holding Period in respect of the Participant’s Matching        Shares will cease to apply, the Participant’s Matching Shares will cease to be subject to the Plan and,        as soon as practicable, those Matching Shares will be dealt with in accordance with the Participant’s        instructions.         However,  if  a  Participant  ceases  Relevant  Employment  before  the  end  of  the  applicable  Forfeiture        Period, other than for a Good Leaver Reason, the Participant’s Matching Shares will be forfeited and        the Participant will have no further entitlement to them.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 14 of 31)  

 

8.    Dividend Share Awards   8.1   Reinvestment of dividends         The Board may at any time direct the Trustee to use some or all of the cash dividends paid in respect        of Plan Shares to Award Dividend Shares on behalf of:         8.1.1    all Participants; or         8.1.2    those Participants who have been invited to, and elected to, reinvest their dividends.         The Board may at any time revoke or amend this direction.         Any direction given or amended under this rule 8.1 (Reinvestment of dividends) must set out the amount        of cash dividends to be applied by the Trustee in awarding Dividend Shares, or how that amount is to        be determined.   8.2   Cash dividends         Any cash dividends in respect of Plan Shares that are not being reinvested in Dividend Shares will be        paid to the Participant as soon as practicable.  8.3   Dividend Shares         Where dividends are to be re-invested in Dividend Shares the Trustee will, within 30 days of receipt of        the dividends, use them to Award Dividend Shares and, in doing so, must treat Participants fairly and        equally.         Dividend Shares must be shares in the same company, of the same class and carry the same rights as        the Plan Shares in respect of which the dividend is paid.   8.4   Number of Dividend Shares         The  number  of  Dividend  Shares  to  be  acquired  on  behalf  of  each  Participant  will  be  determined  in        accordance with the Initial Market Value.   8.5   Terms for agreements         Where  dividends  are  to  be  re-invested  in  Dividend  Shares,  the  Free  Share  Agreement  and/or        Partnership  Share  Agreement,  as  appropriate,  will  bind  the  relevant  Participant  in  contract  with  the        Company:         8.5.1    to permit the Participant’s Dividend Shares to remain in the hands of the Trustee throughout                 the applicable Holding Period;         8.5.2    so that the Participant agrees not to assign, charge or otherwise dispose of the Participant’s                 beneficial interest in those Dividend Shares during the applicable Holding Period; and         8.5.3    so that any amount of dividend remaining in the Trustee’s hands after Dividend Shares have                 been awarded will be paid to each Participant as soon as practicable unless the Participant                 agrees that the remaining amount of dividend may be retained by the Trustee, held on such                 basis as to be separately identifiable, and added to the next dividends paid in respect of the                 Participant’s Plan Shares.   8.6   No forfeiture         Dividend Shares cannot be forfeited.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 15 of 31)  

 

8.7   Withdrawal of Dividend Shares         A Participant may direct the Trustee to withdraw the Participant’s Dividend Shares from the Plan at any        time on or after the expiry of the Holding Period, subject to the terms of the Free Share Agreement        and/or  Partnership  Share  Agreement,  as  appropriate.  The  Trustee  will  then  withdraw  the  Dividend        Shares from the Plan as soon as practicable in accordance with the Participants instructions.   8.8   Ceasing Relevant Employment (Dividend Shares)         If a Participant ceases Relevant Employment:         8.8.1    the Holding Period in respect of the Participant’s Dividend Shares will cease to apply;         8.8.2    the Participant’s Dividend Shares will cease to be subject to the Plan;         8.8.3    as  soon  as  practicable,  the  Dividend  Shares  will  be  dealt  with  in  accordance  with  the                 Participant’s instructions; and         8.8.4    any  dividend  amounts  carried  forward  will  be  transferred  to  the  Participant  as  soon  as                 practicable after such cessation.   9.    Corporate events         A Participant may, during any applicable Holding Period, direct the Trustee to accept a Reconstruction        or Takeover.   10.  Withholding         Any member of the Group or former or existing employing company or the Trustee may withhold such        amounts and make such arrangements as it considers necessary or desirable to meet any liability to        pay or account for Taxation. These arrangements may include deductions from any cash payment owed        to the Participant and/or the sale of the Participant’s Plan Shares and the retention of all or part of the        sale proceeds to meet such liability.  11.  General   11.1  Award of Shares         Free Shares, Partnership Shares, Matching Shares and Dividend Shares will be awarded by purchasing        Shares in the market or allocating Shares already held by the Trustee which are not Plan Shares. Shares        will not be awarded by issuing new Shares or transferring Shares out of treasury.   11.2  Stamp duty         Any stamp duty or other expenses involved in any transfer of Shares by the Trustee will be payable:         11.2.1   where it arises in connection with an Award of Plan Shares into the name of the Participant,                 by the Trustee (and reimbursed by the Company); and         11.2.2   in  any  other  case,  by  the  Participant  concerned  or  the  purchaser  from  the  Participant                 concerned.   11.3  Dealing Restrictions         Each  person  will  have  regard  to  Dealing  Restrictions  when  operating,  interpreting,  administering,        participating in and/or taking any other action in relation to the Plan.                                      Coca-Cola European Partners plc UK Share Plan                                               (Page 16 of 31)  

 

11.4  Terms of employment         For the purposes of this rule 11.4 (Terms of employment), “Employee” means any employee or director        (existing or former) of a member of the Group (existing or former).         This  rule  11.4  (Terms  of  employment)  applies  during  an  Employee’s  employment  and  after  the        termination of an Employee’s employment, whether or not the termination is lawful.         Nothing in the provisions, or the operation, of the Plan forms part of the contract of employment of an        Employee. The rights and obligations arising from the employment relationship between the Employee        and the relevant member of the Group are separate from, and are not affected by, the Plan. Participation        in the Plan does not create any right to, or expectation of, continued employment.         Participation in the Plan or the grant of Awards on a particular basis in any year does not create any        right to or expectation of participation in the Plan or the grant of Awards on the same basis, or at all, in        any future year.         The terms of the Plan do not entitle the Employee to the exercise of any discretion in the Employee’s        favour.         The Employee will have no claim or right of action in respect of any decision, omission or discretion,        which may operate to the disadvantage of the Employee.         No Employee has any right to compensation or damages for any loss (actual or potential) in relation to        the Plan, including any loss in relation to:         11.4.1   any loss or reduction of rights or expectations under the Plan in any circumstances (including                 lawful or unlawful termination of employment);         11.4.2   any exercise of a discretion or a decision taken in relation to an Award or to the Plan, or any                 failure to exercise a discretion or take a decision; or         11.4.3   the operation, suspension, termination or amendment of the Plan.         By participating in the Plan, an Employee waives all rights which might otherwise arise under the Plan,        other than the right to acquire Shares subject to and in accordance with the express terms of the Plan,        in consideration for an Award.   11.5  Not pensionable         None of the benefits received under the Plan are pensionable.   11.6  Data protection         Awards will be subject to:         11.6.1   any data protection policies applicable to any relevant member of the Group; and         11.6.2   any applicable privacy notices.   11.7  Consents and filings         All transfers of Shares or cash payments will be subject to the Company’s articles of association and        any necessary consents or filings required in any relevant jurisdiction. The Participant will be responsible        for complying with any requirements needed in order to obtain, or to avoid the necessity for, any such        consents or filings.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 17 of 31)  

 

11.8  Notices         Any notice or other communication required under the Plan will be given in writing, which may include        electronic means.         Any notice or other communication to be given to an Eligible Employee or Participant may be delivered        by electronic means (including by email, through the Group’s, or a member of the Group’s, intranet or a        share plan portal), personally delivered or sent by ordinary post to such address as the Board reasonably        considers appropriate.         Any notice or other communication to be given to the Company or its agents may be delivered or sent        to its registered office or such other place and by such means as the Board or the Company’s agents        may specify and notify to Eligible Employees and/or Participants, as relevant.         Notices or other communications:         11.8.1   sent electronically will be deemed to have been received immediately (if sent during usual                 business hours) or at the opening of business on the next Dealing Day (if sent outside usual                 business hours);         11.8.2   that are personally delivered will be deemed to have been received when left at the relevant                 address (if left during usual business hours) or at the opening of business on the next Dealing                 Day (if left outside usual business hours); and         11.8.3   sent by post will be deemed to have been received 24 hours after posting to a UK address or                 3 days after posting to an address outside the UK,         unless there is evidence to the contrary.   11.9  Third party rights         Except as otherwise expressly stated to the contrary, nothing in the Plan confers any benefit, right or        expectation on any persons other than an Eligible Employee, Participant, the Trustee or member of the        Group. No such third party has any rights under the UK Contracts (Rights of Third Parties) Act 1999 or        any similar legislation in another jurisdiction to enforce any rule of the Plan.   11.10 Administration         The Plan will be administered by the Board, which has authority to make such rules and regulations for        the administration of the Plan as it considers necessary or desirable. The Board may delegate all or any        of its rights and powers under the Plan.         All decisions of the Board are final and binding in all respects. The Board will decide any question or        dispute as to the interpretation of the Plan, any rules, regulations or procedures relating to the Plan        and/or in relation to an Award or any other matter relating to the Plan. When making any such decisions,        the Board will exercise its discretion in a manner which is fair and reasonable. Decisions of the Board        will be conclusive.  11.11 Shareholder rights         Participants will only be entitled to rights attaching to Shares by reference to a record date on or after        the Award Date.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 18 of 31)  

 

12.  Changing the Plan and termination   12.1  General power to alter rules         The Board may change the Plan in any way at any time with the agreement of the Trustee. Any changes        to the Deed must be effected by a deed.         No change to the Plan will be effective if, as a result, the Plan would:         12.1.1   cease to be an employees' share scheme as defined in section 1166 of the Companies Act;         12.1.2   infringe the rule against perpetuities;         12.1.3   enlarge the obligations or restrict the rights of any Participant in respect of Plan Shares; and/or         12.1.4   no longer be a Schedule 2 SIP (unless the Board determines otherwise).   12.2  Participant consent         If a proposed change would be to the material disadvantage of one or more Participants in respect of        existing  rights  under  the  Plan,  then  the  Board  must  obtain  the  written  consent  of  the  affected        Participant(s).   12.3  Termination of Plan         The Board may (and will, in the event of the Company’s insolvency) terminate the Plan at any time.        Termination will not affect subsisting rights under the Plan.         In  the  event  of  the  termination  of  the  Plan  by  resolution  of  the  Board,  the  Board  will  ensure  that  a        termination notice is sent in respect of the Plan without delay to:         12.3.1   the Trustee;         12.3.2   each Participant who has Plan Shares; and         12.3.3   each  Participant  who  has  entered  into  a  Partnership  Share  Agreement  that  was  in  force                 immediately before the termination notice was issued.   12.4  Termination Period         Once the Company has issued a Plan termination notice under rule 12.3 (Termination of Plan):         12.4.1   no further Shares will be awarded;         12.4.2   the Trustee must remove each Participant’s Plan Shares from the Plan as soon as practicable                 after the end of the Termination Period or, if later, the first date on which that Participant’s Plan                 Shares may be removed from the Plan without income tax liabilities arising for the Participant                 under sections 501 to 507 of ITEPA, by either:                  (i)   transferring the Participant’s Plan Shares to the Participant, or in accordance with the                       Participant’s instructions; or                  (ii)  disposing  of such Shares  and  accounting (or holding itself ready  to account) for the                       proceeds to the Participant, or in accordance with the Participants instructions;         12.4.3   the Trustee may remove a Participant’s Plan Shares from the Plan at an earlier date than that                 specified under rule 12.4.2 with the Participant’s consent; and         12.4.4   the Trustee must, as soon as practicable, ensure that any Partnership Share Money, cash                 dividend amount being carried forward or other money held on behalf of a Participant is paid                 to the Participant.                                      Coca-Cola European Partners plc UK Share Plan                                               (Page 19 of 31)  

 

12.5  HMRC notice of termination         Where HMRC issues a notice under paragraphs 81H or 81I of Schedule 2 that the Plan is not a Schedule        2  SIP,  any  Partnership  Share  Money,  and  any  dividends  held  by  the  Trustee  for  the  purposes  of        acquiring Dividend Shares, held on behalf of a Participant must be paid over to the Participant. This        payment  must  be  made  as  soon  as  practicable  after  the  relevant  day,  within  the  meaning  given  in        paragraph 56 of Schedule 2.   13.  Governing law and jurisdiction         The laws of England and Wales govern the Plan and all Awards. The courts of England and Wales have        exclusive jurisdiction in respect of any disputes arising in connection with the Plan or any Award.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 20 of 31)  

 

                  Coca-Cola European Partners plc UK Share Plan Trust   THIS DEED is made on ......23   August 2019   BETWEEN   (1)   Coca-Cola European Partners plc, registered in England and Wales with registered number 9717350,        whose registered office is at Pemberton House, Bakers Road, Uxbridge UB8 1EZ (the “Company”); and   (2)   Solium Trustee (UK) Limited, incorporated in England and Wales with registered number 9154605,        whose registered office is at New Penderel House, 4th Floor, 283-288 High Holborn, London WC1V        7HP (the “Original Trustee”).   THIS DEED PROVIDES as follows:   1.    Meaning of words used   1.1   General         In this Deed:         “Foreign Cash Dividend” means a cash dividend paid in respect of Plan Shares of a company not        resident in the United Kingdom;         “Property”  means  any  property,  including  any  chose  in  action  and  any  interest  in  real  or  personal        property;         "Trust" means the trust established by this Deed (as amended from time to time) and known as the        Coca-Cola European Partners plc UK Share Plan Trust;         “Trust Fund” will comprise of:         (i)   the sum of £10 (referred to in clause 3.1 (Receipts));         (ii)  Property added to it at any time through accumulation of income or capital, payment, transfer,              gift, loan or otherwise; and         (iii)  all money, investments and other Property representing, or derived from (i) and (ii) above;         “Trustee Act” means the UK Trustee Act 1925; and         “Unallocated Shares” means the Shares that constitute the Trust Fund.   1.2   Interpretation         Words and expressions defined in the rules of the Coca-Cola European Partners plc UK Share Plan will        have the same meaning in this Deed, unless the context requires otherwise.        References to a “clause" mean a clause of this Deed and "rules" mean the rules of the Plan.  2.    Background         The Company has decided to establish a trust, to be constituted as an employees’ share scheme under        section 1166 of the Companies Act, on the terms of this Deed.         The Trust created by this Deed is intended to facilitate the acquisition and holding of Shares under the        Plan and to comply with the requirements of Schedule 2.         The Original Trustee has agreed to act as the first trustee of the Trust on the terms of this Deed.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 21 of 31)  

 

3.    Declaration of Trust   3.1   Receipts         The Property transferred to the Trustee is to be held on the trusts declared by this Deed, and subject to        the rules of the Plan. The Company intends to pay £10 to the Original Trustee to be held upon the trusts        set out in this Deed.   3.2   General trust         The Trustee will hold the Trust Fund upon trust for the benefit of Eligible Employees in accordance with        the Plan.         The income arising from Property will be accumulated by the Trustee and will form part of the Trust        Fund.         Any income relating to Plan Shares and Partnership Share Money will be dealt with in accordance with        the rules of the Plan.   3.3   Directions concerning the Trust Fund         Any  Unallocated  Shares  or  cash  comprised  in  the  Trust Fund  not,  from  time  to  time,  immediately        required in order for the Trustee to make Awards may, if the Company so directs, cease to be part of        the Trust Fund.         If the Company makes such a direction under this clause 3.3, the Trustee will:         3.3.1    hold the Unallocated Shares on trust and transfer them as directed by the Company;         3.3.2    hold the cash on trust; and         3.3.3    pay or apply the net transfer proceeds (if any) of Unallocated Shares and the cash to or for                 the  benefit  of  the  Company  and  any  Participating  Companies  (or  former  Participating                 Companies) whose employees are Participants, in such proportions (having regard to their                 respective contributions to the Trust Fund) as the Company will direct.   4.    Trustee’s general powers and duties   4.1   Trustee obligations         The Trustee agrees to comply with its obligations under the Plan and Schedule 2.   4.2   Holding Shares         The Trustee will hold and deal with all Plan Shares awarded to any Participant only in accordance with        the Plan.   4.3   Participants’ directions         The Trustee will dispose of a Participant's Plan Shares and deal with any rights conferred in respect of        any of a Participant’s Plan Shares, to be allotted other shares, securities or rights, only in accordance        with directions given by or on behalf of the Participant.   4.4   Receipt of money or money’s worth         If the Trustee receives any money or money's worth in respect of a Participant's Plan Shares, the Trustee        will pay such amount over to the Participant as soon as practicable:         4.4.1    unless it consists of New Shares;                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 22 of 31)  

 

      4.4.2    unless paragraphs 62 to 69 of Schedule 2 require otherwise;         4.4.3    subject to the Trustee’s obligations under sections 510 – 514 of ITEPA; and         4.4.4    subject to the Trustee’s PAYE obligations, as defined in Schedule 2.   4.5   Purchase of Unallocated Shares         The Trustee has the power to apply the Trust Fund for the purchase of further Shares to be held as        Unallocated Shares on the trusts declared in clause 3.2 (General trust):         4.5.1    for the purposes of providing benefits to employees in the form of shares in accordance with                 Schedule 2;         4.5.2    at any time prior to the termination of the Plan; and         4.5.3    on such terms as the Trustee in its absolute discretion thinks fit.   4.6   Unallocated cash receipts and income         The Trustee will hold:         4.6.1    the net proceeds of any sale of Unallocated Shares;         4.6.2    any income from such sale; and         4.6.3    any Capital Receipt of less than £3 otherwise distributable to a particular Participant,         in all cases, upon trust to apply the same in or towards any reasonable expenses of administering and        operating the Plan (including any provision for Taxation for which the Trustee is liable) and the Trustee        will notify the Company on request of the amounts so held by it. The Trustee will not be under any duty        to invest any monies of which it holds under this clause 4.6 (Unallocated cash receipts and income).   4.7   Acquisition of Shares         Shares to be used pursuant to the Plan must be acquired by the Trustee by market purchase.   4.8   Borrowing         The Trustee has the power, with the agreement of the Company on each occasion (which will not be        unreasonably withheld), to borrow funds to acquire Shares for the purposes of the Plan and/or to pay        any other expenses properly incurred by the Trustee in administering the Plan.   4.9   Manner of voting by the Trustee         In  respect  of  any  Plan  Shares  held  by  the  Trustee,  if  the  Trustee  does  not  receive  in  writing  a        Participant’s directions by any deadline specified by the Trustee for that purpose, the Trustee will abstain        from voting in relation to those Plan Shares.         The Trustee will not be entitled to vote on a show of hands on a particular resolution in respect of any        Plan Shares unless all directions received from the Participants, who have given directions in respect        of that resolution, are identical. The Trustee will not be under any obligation to call for a poll.   4.10  Delegation of powers and duties         Except as otherwise provided by Part 9 of Schedule 2, the Trustee may delegate any of its powers and        duties  under  this  Deed  or  any  business  including  the  exercise  of  any  discretion  to  any  person  or        company, including any Participating Company.         If the Trustee delegates any administrative powers or duties in relation to the Plan, that delegation will        not relieve the Trustee of any duty imposed on the Trustee under this Deed.                                      Coca-Cola European Partners plc UK Share Plan                                               (Page 23 of 31)  

 

5.    Plan Shares   5.1   Partnership Shares         If the Company instructs the Trustee to make an Award of Partnership Shares in accordance with the        Plan, the Trustee will comply with the Company's instructions.   5.2   Holding and application of Partnership Share Money         The Trustee will:         5.2.1    accept any  Participant's Partnership Share  Money  and hold  those funds upon  trust for the                 benefit of the Participant, but will not be obliged to deposit those funds in an interest-bearing                 account;         5.2.2    deal with each Participant's Partnership Share Money only in accordance with the Plan;         5.2.3    apply  each  Participant's  Partnership  Share  Money  in  awarding  Partnership  Shares  in                 accordance with the Plan; and         5.2.4    hold each Participant's Partnership Shares upon trust for the benefit of the Participant and will                 deal with those Shares and any rights attaching to those Shares in accordance with the Plan.         The Trustee will keep any Partnership Share Money in an account with a person, firm or building society        as set out in paragraph 49(3) of Schedule 2. If the account is an interest-bearing account, the Trustee        must account to each Participant for any interest earned on the Participant’s Partnership Share Money.   5.3   Surplus Partnership Share Money         The Trustee may, with the agreement of the Participant, carry forward any surplus Partnership Share        Money remaining after the acquisition of Partnership Shares but in any other case must pay the surplus        Partnership Share Money to the Participant as soon as practicable.         However,  any  Partnership  Share  Money  held  on  the  Participant’s  behalf  will  be  paid  over  to  the        Participant as soon as practicable if the Participant ceases Relevant Employment, withdraws from a        Partnership Share Agreement or if the Company issues a Plan termination notice.   5.4   Partnership Shares Award Notice         As soon as practicable after the Trustee has awarded any Partnership Shares, the Trustee will give the        relevant Participant an Award Notice, including:         5.4.1    the number and description of the Shares;         5.4.2    the amount of Partnership Share Money applied by the Trustee in acquiring the Shares;         5.4.3    the Initial Market Value of the Shares;         5.4.4    if the Shares are subject to a Restriction, details of the Restriction; and         5.4.5    the amount of any surplus Partnership Share Money carried forward.   5.5   Free and Matching Shares         If  the  Company  instructs  the  Trustee  to  make  an  Award  of  Free  Shares  or  Matching  Shares  in        accordance with the Plan, the Trustee will comply with the Company’s instructions to the extent that the        Trust Fund is sufficient to permit such compliance.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 24 of 31)  

 

5.6   Free or Matching Shares Award Notice         As soon as practicable after the Trustee has awarded any Free Shares or Matching Shares, the Trustee        will give each relevant Participant an Award Notice, including:         5.6.1    the number and description of the Shares;         5.6.2    the Initial Market Value of the Shares;         5.6.3    if the Shares are subject to a Restriction, details of the Restriction; and         5.6.4    the Holding Period applicable to the Shares.   5.7   Dividend Shares         If the Company or, with the agreement of the Company, a Participant instructs the Trustee to use cash        dividends paid  in respect  of Plan Shares in awarding Dividend  Shares, the Trustee  will comply  with        those instructions. The Trustee will be under no obligation to deposit such cash dividends in an interest-       bearing account.   5.8   Dividend Shares Award Notice         As soon as practicable after the Trustee has awarded any Dividend Shares, the Trustee will give each        relevant Participant an Award Notice, including:         5.8.1    the number and description of the Shares;         5.8.2    the Initial Market Value of the Shares;         5.8.3    if the Shares are subject to a Restriction, details of the Restriction;         5.8.4    the Holding Period applicable to the Shares; and         5.8.5    the amount of any surplus dividend carried forward.   6.    Effect of Holding Period         The Trustee will not dispose of any Free Shares, Matching Shares or Dividend Shares held on behalf of        a Participant during the applicable Holding Period, unless the Participant has at that time ceased to be        in Relevant Employment or as allowed by paragraphs 37, 79 and 90(5) of Schedule 2.   7.    Cash dividends   7.1   Retained dividends         To the extent that cash dividends have been retained for re-investment in Dividend Shares but are not        reinvested because the amount is not sufficient to acquire a Share, the Trustee may carry forward the        portion  not  reinvested  to  be  added  to  the  amount  of  the  next  cash  dividend  to  be  reinvested.  If  so        retained, the Trustee must hold such amount so as to be separately identifiable. Any amount retained        under this clause 7.1 (Retained dividends) will be paid over to the Participant as soon as practicable if,        during that period, the Participant ceases Relevant Employment or if the Plan is terminated.         To  the  extent  that  a  Participant’s  cash  dividends  are  not  (or  no  longer  required  to  be)  retained  for        reinvestment  in  Dividend  Shares,  such  amounts  will  be  paid  over  to  the  Participant  as  soon  as        reasonably practicable.   7.2   Foreign Cash Dividends         If the Trustee receives any Foreign Cash Dividend in respect of a Participant’s Plan Shares, it will give        the Participant notice of the amount of any foreign tax already deducted.                                      Coca-Cola European Partners plc UK Share Plan                                               (Page 25 of 31)  

 

7.3   Dividend waiver         Until the Company directs the Trustee otherwise, the Trustee will waive its entitlement to dividends on        any Unallocated Shares.   8.    Entitlements   8.1   Rights issues         If the Company makes an offer conferring any rights on its members to acquire (for payment) additional        shares, securities or rights, the Trustee will allocate such rights in relation to Plan Shares amongst the        Participants in direct proportion to the number of Plan Shares held by the Trustee on behalf of each        Participant.   8.2   Directions of Participants         The Trustee will not be required to exercise any rights attributable to a Participant’s Plan Shares as        mentioned in clause 8.1 (Rights issues) unless:         8.2.1    the Participant has paid the full amount payable (if any) for exercise; or         8.2.2    the Participant has authorised the Trustee to sell sufficient of the rights, nil paid, to pay the full                 amount to acquire the balance of such rights.         The Trustee will take no action in relation to such rights unless it has received instructions from the        Participant at least five Dealing Days before the last day on which such rights may be exercised.   8.3   Other entitlements         Where in respect of Plan Shares, new securities by way of capitalisation are to be allotted, the Trustee        will allocate such rights or securities amongst the Participants concerned on a proportionate basis.   8.4   Best endeavours         The Trustee will use its best endeavours to sell any securities relating to Plan Shares which are not able        to be allocated and distribute the net proceeds of sale (after deducting any expenses of sale and any        Taxation which may be payable) among the Participants whose allocation was rounded down.   8.5   Treatment of new securities         In any circumstances in which the Trustee receives new securities which are deemed to be Plan Shares,        the Trustee will allocate the securities to the Participants by reference to the Award Date(s) of the Plan        Shares to which they relate and if any such allocation would give rise to a fraction of a security the        Trustee will round such allocation down to the next whole security.   9.    Information and accounting for tax   9.1   Requirement to maintain records         The Trustee will maintain such records as may be necessary to enable it or an employing company to        carry out its PAYE obligations, including under sections 510 to 514 of ITEPA.         The  Trustee  will  provide  to  any  member  of  the  Group  and/or  other  employing  company  all  such        information as the Company will reasonably require.   9.2   PAYE accounting         Unless  section  511  or  514  of  ITEPA  applies,  the  Trustee  will  ensure  that  the  relevant  Participating        Companies (and/or other employing companies) receive any amounts deducted from payments made                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 26 of 31)  

 

      pursuant to the Plan or any Capital Receipt that constitutes employment income in respect of PAYE        withholdings in sufficient time for them to account for such amounts to HMRC.   9.3   Duty to notify Participants in relation to tax         The Trustee will inform each Participant of any facts relevant to determining the liability (if any) of that        Participant to income tax under ITEPA or Chapter 3 or Chapter 4 of Part 4 of the UK Income Tax (Trading        and Other Income) Act 2005 or to NICs by reason of an occurrence of an event.   9.4   Power to sell assets to meet tax obligations         If a PAYE obligation is imposed on the Trustee including in accordance with the provisions of sections        510 to 512 of ITEPA:         9.4.1    the Trustee may sell, including to itself, any or all of the Participant’s Plan Shares; or         9.4.2    the Participant may pay to the Trustee a sum equal to the amount required to discharge the                 PAYE obligation.   9.5   Duty to maintain records concerning other Schedule 2 SIPs         The Trustee will maintain records of Participants who are or have participated in:         9.5.1    other Schedule 2 SIPs established by the Company or a Connected Company; and         9.5.2    the Plan.   10.  Voting rights   10.1  Voting         The Trustee will abstain from voting at any general meeting of the Company on any Unallocated Shares,        unless the Company directs otherwise, in which case:         10.1.1   the Company cannot direct the manner in which the Trustee exercises its vote; and         10.1.2   the Trustee may, in its absolute discretion, vote (or abstain from voting) in the manner in which                 it thinks fit.  11.  Power to make regulations         The Trustee may make such regulations as it considers appropriate relating to the administration of the        Plan, subject to, and in accordance with, the provisions of the Plan.   12.  Trustee’s indemnity and expenses   12.1  Expenses and indemnity         The Company will pay to or reimburse the Trustee upon demand for all expenses properly incurred by        it in the course of the operation of the Plan and will keep the Trustee (and the directors, officers and        employees of a corporate trustee), fully indemnified against all actions, claims, expenses, and all other        liabilities to which it is (or becomes) liable as Trustee because of any act, event or thing except where        such actions, claims, expenses and other liabilities are attributable to fraud, misconduct or negligence        by that person (including the directors, officers and employees of a corporate trustee) and in addition        the Trustee will have the benefit of all indemnities conferred upon trustees generally by law and by the        Trustee Act.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 27 of 31)  

 

12.2  No requirement to account for profit as banker         Any bank which is banker to any Participating Company may act as Trustee without being required to        account for any profit resulting from being a banker of the Participating Company.   12.3  Professional expenses         Any person  acting as Trustee in its professional capacity  as trustee may charge and  be paid for its        services as agreed with the Company.   13.  Appointment, removal and retirement of Trustee   13.1  Appoint and remove Trustee         The Company may at any time by deed:         13.1.1   appoint a new Trustee including a corporate Trustee; and         13.1.2   remove a Trustee from office (but not so as to reduce the number of trustees of the Trust to                 below the minimum set out at clause 15 (Number of trustees)) without assigning any reason                 for such removal and such removal will (in the absence of any other date specified in the deed)                 take place when such deed is dated.   13.2  Residual rights of appointment and removal         All powers of appointment and removal will be vested in the Trustee in the event that the Company        ceases to exist otherwise than in consequence of a Reconstruction or Takeover.   13.3  Retirement of Trustee         A Trustee may retire by giving to the Company notice of its desire to retire and such notice will take        effect at the expiry of 3 months (or such other period as may be agreed with the Company) from the        date of such notice provided that the retirement will not take effect if it would reduce the number of        trustees of the Trust to below the minimum set out at clause 15 (Number of trustees). The Trustee will        not be obliged to pay and will not be responsible for any costs arising from such retirement but  will        execute all documents and do all things as may be necessary to give effect to such retirement.   13.4  Trustee’s actions required         Immediately upon removal or retirement as Trustee, a Trustee will transfer all trust property held by it        and deliver all documents in its possession relating to the Plan and/or the Trust to the continuing or new        Trustee or otherwise as the Company may direct.   13.5  Trustee Act         The provisions of sections 37 and 39 of the Trustee Act will apply to this Deed as if any references in        that statute to a trust corporation were references to any corporation.   14.  Residence of the Trustee         The Trustee will at all times be resident in the UK for UK tax purposes.   15.  Number of trustees         The number of trustees of the Trust will not be less than 2 persons unless a company is appointed as        sole Trustee.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 28 of 31)  

 

16.  Termination   16.1  Perpetuity period         Subject to clause 16.2 (Termination of Plan), the trusts established by this Deed will continue for a period        of 125 years commencing on the date of this Deed.   16.2  Termination of Plan         If the Plan is terminated under rule 12 (Changing the Plan and termination), the trusts established by        this Deed will be wound up, subject to the Trustee’s compliance with rule 12 (Changing the Plan and        termination). After a Plan termination notice has been issued, the Trustee:         16.2.1   will remove the Plan Shares from the Plan as soon as practicable after whichever is the later                 of:                  (i)   the end of the notice period; or                  (ii)  the first date on which the Plan Shares may be removed from the Plan without giving                       rise to a charge to income tax under sections 501 to 507 of ITEPA on the Participant on                       whose behalf they are held;         16.2.2   may remove a Participant's Plan Shares from the Plan at an earlier date with the Participant's                 consent; and         16.2.3   will pay any money held on a Participant’s behalf to the Participant as soon as practicable after                 the Plan termination notice has been issued.         The notice period referred to in clause 16.2.1(i) means the period of 3 months beginning with the date        on which the requirements of rules 12.3.1 to 12.3.3 are met in respect of the Plan termination notice.   17.  Counterparts         This Deed may be executed in any number of counterparts, each of which when executed and delivered        will constitute a duplicate original, but all the counterparts will together constitute the one deed.         Transmission of an executed counterpart of this Deed by email will take effect as delivery of an executed        counterpart of this Deed. If this method of delivery is adopted, each party will provide the other(s) with        the original of such counterpart as soon as reasonably practicable, if requested.         This Deed will not take effect until it has been executed and delivered by all parties.   18.  General   18.1  Irrevocability         The trusts declared in this Deed are irrevocable.   18.2  Assignment and other dealing         This Deed is personal to the parties and no party will assign, transfer, charge, subcontract, declare a        trust over or deal in any other manner with any of its rights and obligations under this Deed.   18.3  Governing law and jurisdiction         The laws of England and Wales govern the Deed and its construction.         The courts of England and Wales have exclusive jurisdiction in respect of disputes arising under or in        connection with this Deed.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 29 of 31)  

 

This document has been  executed as  a  Deed  and is delivered and takes effect on the  date stated at the  beginning of it.                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 30 of 31)  

 

EXECUTED AND DELIVERED AS                 ) A DEED on behalf of COCA-COLA             )  EUROPEAN PARTNERS PLC, acting by:  )                                                 A Director                                                  The Company Secretary    EXECUTED AND DELIVERED AS                       ) A DEED on behalf of SOLIUM TRUSTEE  ) (UK) LIMITED, acting by:                        )                                                   A Director                                                   A Director                                       Coca-Cola European Partners plc UK Share Plan                                               (Page 31 of 31)

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