Document:

aviva_20f-ex0403.htm

Exhibit 4.3

 

AVIVA plc

 

 

RULES OF THE AVIVA ANNUAL BONUS PLAN 2011

    

	
Shareholders’ Approval:

	
4 May 2011

	  	  
	
Directors’ Adoption

	
2 March 2011

	  	  
	
Expiry Date:

	
4 May 2021

 

 

Linklaters

 

 

Linklaters LLP

One Silk Street

London EC2Y 8HQ

 

 

Telephone (+44) 20 7456 2000

 

Facsimile (+44) 20 7456 2222

 

Ref 01/140/R Berglund

 

  

343

  

Table of Contents

 

	
Contents

	
Page

	 	 	 
	Introduction	345
	  	  	  
	
1

	
Granting Deferred Share Awards

	
345

	  	  	  
	
2

	
Before Vesting

	
347

	  	  	 
	
3

	
Vesting

	
348

	  	  	  
	
4

	
Consequences of Vesting

	
348

	  	  	  
	
5

	
Vesting in other circumstances - personal events

	
349

	  	  	  
	
6

	
Vesting in other circumstances - corporate events

	
350

	  	  	  
	
7

	
Changing the Plan and termination

	
351

	  	  	  
	
8

	
General

	
352

	  	  	  
	
9

	
Definitions

	
354

    

  

344

  

 

Rules of the Aviva Annual Bonus Plan 2011

   

Introduction

 

This Plan operates in conjunction with the Company’s annual cash bonus arrangements. It is intended that a proportion of any annual cash bonus payable under such bonus arrangements will be compulsorily applied in the acquisition of Shares under this Plan. This introduction does not form part of the rules of the Plan, but is a brief description and overview of how the rules operate and link in with the annual cash bonus arrangements.

	
1.  

	
Granting Deferred Share Awards

   

	
1.1  

	
Grantor

 

The Grantor of a Deferred Share Award must be:

 

	
1.1.1  

	
the Company;

 

	
1.1.2  

	
any other Member of the Group; or

 

	
1.1.3  

	
a trustee of any trust set up for the benefit of Employees.

 

A Deferred Share Award granted under the Plan, and the terms of that Deferred Share Award, must be approved in advance by the Directors.

   

	
1.2  

	
Eligibility

 

The Grantor may grant a Deferred Share Award to anyone who is an Employee on the Award Date in accordance with any selection criteria that the Directors in their discretion may set. However, unless the Directors consider that special circumstances exist, a Deferred Share Award may not be granted to an Employee who on the Award Date has given or received notice of termination of employment, whether or not such termination is lawful.

   

	
1.3  

	
Timing of award

 

Awards may not be granted at any time after the Expiry Date. Awards may only be granted within 42 days starting on any of the following:

 

	
1.3.1  

	
the date of shareholder approval;

 

	
1.3.2  

	
the day after the announcement of the Company’s results for any period;

 

	
1.3.3  

	
any day on which the Directors resolve that exceptional circumstances exist which justify the grant of Awards;

 

	
1.3.4  

	
any day on which changes to the legislation or regulations affecting share plans are announced, effected or made; or

 

	
1.3.5  

	
the lifting of Dealing Restrictions which prevented the granting of Awards during any period specified above.

   

	
1.4  

	
Terms of Deferred Share Awards

 

Deferred Share Awards are subject to the rules of the Plan and must be granted by deed. The terms of the Deferred Share Award must be determined by the Grantor and approved by the Directors. The terms must be set out in the deed or other document (which may be in electronic form), including:

 

	
1.4.1  

	
whether the Deferred Share Award is:

   

  

345

  

	
(1)  

	
a Conditional Award;

 

	
(2)  

	
an Option;

 

or a combination of these;

 

	
1.4.2  

	
the number of Shares subject to the Deferred Share Award or the basis on which the number of Shares subject to the Deferred Share Award will be calculated;any condition specified under rule 1.6 (Conditions);

 

	
1.4.3  

	
the expected date of Vesting, which will normally be the third anniversary of the Award Date;

 

	
1.4.4  

	
whether the Participant is entitled to receive any Dividend Equivalent;

 

	
1.4.5  

	
the Award Date; and

 

	
1.4.6  

	
the Option Price (if relevant).

   

	
1.5  

	
Conditions

 

The Grantor may impose conditions when granting a Deferred Share Award. Any condition must be objective, specified at the Award Date and may provide that a Deferred Share Award will lapse if it is not satisfied. The Grantor, with the consent of the Directors, may waive or change a condition imposed under this rule 1.6 (Conditions).

   

	
1.6  

	
Award certificates

 

Each Participant will receive a certificate setting out the terms of the Deferred Share Award as soon as practicable after the Award Date. The certificate may be the deed referred to in rule 1.4 (Terms of Deferred Share Awards) or any other document (which may be in electronic form), including a statement. If any certificate is lost or damaged the Company may replace it on such terms as it decides.

   

	
1.7  

	
No payment

 

A Participant is not required to pay for the grant of any Deferred Share Award.

 

	
1.8   

	
Administrative errors

 

If the Grantor grants a Deferred Share Award which is inconsistent with rule 1.2 (Eligibility), it will lapse immediately. If the Grantor tries to grant a Deferred Share Award which is inconsistent with rules 1.10 (Individual limit for Deferred Share Awards), 1.11 (Plan limits - 10 per cent) or 1.12 (Plan limits - 5 per cent), the Deferred Share Award will be limited and will take effect from the Award Date on a basis consistent with those rules.

   

	
1.9  

	
Individual limit for Deferred Share Awards

 

The maximum amount of the cash bonus which can be deferred and subject to a Deferred Share Award is two thirds of any annual cash bonus.

   

	
1.10  

	
Plan limits - 10 per cent

 

A Grantor must not grant a Deferred Share Award if the number of Shares committed to be issued under that Deferred Share Award exceeds 10 per cent of the ordinary share capital of the Company in issue immediately before that day, when added to the number of Shares which have been issued, or committed to be issued, to satisfy Deferred Share Awards under the Plan, or options or awards under any other employee share plan operated by the Company, granted in the previous 10 years.

     

  

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1.11  

	
Plan limits - 5 per cent

 

A Grantor must not grant a Deferred Share Award if the number of Shares committed to be issued under that Deferred Share Award exceeds 5 per cent of the ordinary share capital of the Company in issue immediately before that day, when added to the number of Shares which have been issued, or committed to be issued, to satisfy Deferred Share Awards under the Plan, or options or awards under any other discretionary employee share plan adopted by the Company, granted in the previous 10 years.

   

	
1.12  

	
Scope of Plan limits

 

Where the right to acquire Shares is released or lapses, the Shares concerned are ignored when calculating the limits in rules 1.11 (Plan limits - 10 per cent) and 1.12 (Plan limits - 5 per cent). As long as so required by the Association of British Insurers, Shares transferred from treasury are counted as part of the ordinary share capital of the Company, and as Shares issued by the Company.

 

	
2.  

	
Before Vesting

   

	
2.1  

	
Rights

 

A Participant is not entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of Shares subject to a Deferred Share Award until the Shares are issued or transferred to the Participant.

   

	
2.2  

	
Transfer

 

A Participant may not transfer, assign or otherwise dispose of a Deferred Share Award or any rights in respect of it. If he does, whether voluntarily or involuntarily, then it will immediately lapse. This rule 2.2 (Transfer) does not apply:

 

	
2.2.1  

	
to the transmission of a Deferred Share Award on the death of a Participant to his personal representatives; or

 

	
2.2.2  

	
to the assignment of a Deferred Share Award, with the prior consent of the Directors, subject to any terms and conditions the Directors impose.

   

	
2.3  

	
Adjustment of Deferred Share Awards

 

If there is:

 

	
2.3.1  

	
a variation in the equity share capital of the Company, including a capitalisation or rights issue, sub-division, consolidation or reduction of share capital;

 

	
2.3.2  

	
a demerger (in whatever form) or exempt distribution by virtue of Section 1075 of the Income and Corporation Taxes Act 2010;

 

	
2.3.3  

	
a special dividend or distribution; or

 

	
2.3.4  

	
any other corporate event which might affect the current or future value of any Deferred Share Award,

 

the Directors may adjust the number or class of Shares or securities subject to the Deferred Share Award and, in the case of an Option, the Option Price.

   

	
2.4  

	
Reduction or cancellation of Deferred Share Awards

 

The Directors may decide that a Deferred Share Award which has not Vested (or, in the case of Options, been exercised) will lapse wholly or in part if they consider that:

   

  

347

  

    

	
2.4.1  

	
the Participant or his team has, in the opinion of the Directors, engaged in misconduct which ought to result in the complete or partial lapse of his Award; and/or

 

	
2.4.2  

	
there is a materially adverse misstatement of the Company’s financial statements.

   

	
3.  

	
Vesting

   

	
3.1  

	
Timing of Vesting

 

Subject to rules 1.6 (Conditions), 5 (Vesting in other circumstances - personal events) and 6 (Vesting in other circumstances - corporate events), a Deferred Share Award Vests on the date set by the Directors on the grant of the Deferred Share Award or, if on that date a Dealing Restriction applies, a date determined by the Directors which is on or after the first date on which Vesting is not prohibited by a Dealing Restriction.

   

	
3.2  

	
Lapse

 

If a Deferred Share Award lapses under the Plan it cannot Vest and a Participant has no rights in respect of it.

   

	
4.  

	
Consequences of Vesting

   

	
4.1  

	
Conditional Award

 

Within 30 days of a Conditional Award Vesting, the Grantor will arrange (subject to rules 4.4 (Alternative ways to satisfy Deferred Share Awards), 0 (Withholding) and 8.8 (Consents)) for the transfer (including a transfer out of treasury) or issue, to, or to the order of, the Participant, of the number of Shares in respect of which the Conditional Award has Vested.

   

	
4.2  

	
Options

 

	
4.2.1  

	
A Participant may exercise his Option on any day after Vesting on which no Dealing Restriction applies by giving notice in the prescribed form to the Grantor or any person nominated by the Grantor and paying the Option Price (if any). The Option will lapse six months after Vesting (unless the reason for Vesting is the Participant’s death, in which case the Option will lapse 12 months after Vesting) or, if earlier, on the earliest of:

 

	
(1)

	
the date the Participant ceases to be an Employee by reason of dismissal for misconduct; or

 

	
(2)

	
six months after an event which gives rise to Vesting under rule 5.2 (“Good leavers”), 5.4 (Overseas transfer), 6 (Vesting in other circumstances - corporate events) or, if earlier, the date six weeks after the date on which a notice to acquire Shares under section 979 of the Companies Act 2006 is first served.

 

	
4.2.2  

	
Subject to rules 4.4 (Alternative ways to satisfy Deferred Share Awards),  0 (Withholding), and 8.8 (Consents), the Grantor will arrange for Shares to be transferred to or issued to, or to the order of, the Participant within 30 days of the date on which the Option is exercised.

 

	
4.2.3  

	
If an Option Vests under more than one provision of the rules of the Plan, the provision resulting in the shortest exercise period will prevail.

   

	
4.3  

	
Dividend Equivalent

 

Awards will not include any rights in respect of dividends on the Shares comprised in the Deferred Share Award before Vesting, unless the Grantor, in its discretion, decides otherwise at the Award Date. The Grantor may determine that a Deferred Share Award includes the right to receive a Dividend Equivalent. Dividend Equivalents will be paid to any relevant Participant as soon as practicable after Vesting.

    

  

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The Grantor will exercise the discretions in this rule 4.3 (Dividend Equivalent) subject to the consent of the Directors.

   

	
4.4  

	
Alternative ways to satisfy Deferred Share Awards

 

The Grantor may, subject to the approval of the Directors, decide to satisfy an Option or a Conditional Award by paying an equivalent amount in cash (subject to rule 0 (Withholding)). For Options, the cash amount must be equal to the amount by which the market value of the Shares in respect of which the Option is exercised exceeds the Option Price. Alternatively, the Grantor may decide to satisfy an Option by procuring the issue or transfer of Shares to the value of the cash amount specified above.

 

The Company may determine that a Deferred Share Award will be satisfied in cash at the Award Date or at any time before satisfaction of the Deferred Share Award, including after Vesting or, in the case of an Option, after exercise.

 

In respect of Awards which consist of a right to receive a cash amount, the Directors may decide instead to satisfy such Awards (and any Dividend Equivalents) by the delivery of Shares (subject to rule 0 (Withholding)). The number of Shares will be calculated by reference to the market value of the Shares on the date of Vesting for Conditional Awards and the date of exercise for Options.

 

For the purpose of this rule 4.4 (Alternative ways to satisfy Deferred Share Awards) and unless the Directors determine otherwise, “market value” means the closing middle market quotation for a Share taken from the Daily Official List of the London Stock Exchange (or, in the case of an ADR, the closing price on the New York Stock Exchange as reported in the Wall Street Journal) on the date of Vesting or, in the case of an Option, the date of exercise.

   

	
4.5  

	
Withholding

 

The Company, the Grantor, any employing company or trustee of any employee benefit trust may withhold such amount and make such arrangements as it considers necessary to meet any liability to taxation or social security contributions in respect of Deferred Share Awards. These arrangements may include the sale or reduction in number of any Shares on behalf of the Participant.

    

	
5.  

	
Vesting in other circumstances - personal events

   

	
5.1  

	
General rule on leaving employment

 

Subject to rule 5.2 (“Good leavers”), a Deferred Share Award which has not Vested will cease to be capable of Vesting on the date on which the Participant gives or receives notice of termination of his employment with any Member of the Group (whether or not such termination is lawful), unless the Directors decide otherwise.

 

A Deferred Share Award will lapse on the date the Participant ceases to be an Employee unless one of the reasons in rule 5.2 applies.

 

This rule 5.1 will not apply where the Vesting of a Deferred Share Award is delayed due to a Dealing Restriction, unless the Participant ceases to be an Employee by reason of dismissal for misconduct.

   

	
5.2  

	
“Good leavers”

 

If a Participant ceases to be an Employee for any of the reasons set out below, then his Awards will Vest as described below. The reasons are:

 

	
(i)  

	
retirement with the agreement of the Participant’s employer;

 

	
(ii)  

	
ill-health, injury or disability, as established to the satisfaction of the Company;

   

  

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(iii)  

	
the Participant’s employing company ceasing to be a Member of the Group;

 

	
(iv)  

	
a transfer of the undertaking, or the part of the undertaking in which the Participant works, to a person which is not a Member  of the Group;

 

	
(v)  

	
redundancy, but only in circumstances which give rise to a redundancy payment;

 

	
(vi)  

	
death; and

 

	
(vii)  

	
any other reason, if the Directors so decide in any particular case,

 

then all the Shares under his Deferred Share Award will Vest on the cessation date (or, if on that date a Dealing Restriction applies, a date determined by the Directors which is on or after the first date on which any Dealing Restriction ceases to apply).

 

	
5.3  

	
Exercise of discretion

 

The Directors must exercise the discretion provided for in rule 5.2(ix) within 30 days after cessation of the relevant Participant’s employment. The Deferred Share Award will lapse or Vest (as appropriate) on the earlier of the date on which the discretion is exercised and the end of the 30 day period.

 

	
5.4  

	
Overseas transfer

 

If a Participant remains an Employee but is transferred to work in another country or changes tax residence status and, as a result he would:

 

	
5.4.1  

	
suffer a tax disadvantage in relation to his Deferred Share Awards (this being shown to the satisfaction of the Directors); or

 

	
5.4.2  

	
become subject to restrictions on his ability to exercise his Deferred Share Awards or to hold or deal in the Shares or the proceeds of the sale of the Shares acquired on exercise because of the security laws or exchange control laws of the country to which he is transferred,

 

then the Directors may decide that his Deferred Awards will Vest on a date they choose before or after the transfer takes effect. The Deferred Share Award will Vest to the extent they permit and the Directors will decide whether any balance of the Deferred Share Award will lapse.

 

	
5.5  

	
Meaning of “ceasing to be an Employee”

 

For the purposes of rules 5 (Vesting in other circumstances - personal events) and 4.2 (Options), a Participant will not be treated as ceasing to be an Employee until he is no longer an Employee of any Member of the Group or if he recommences employment with a Member of the Group within 14 days or such other period and on such other basis as the Directors decide.

 

	
6.  

	
Vesting in other circumstances - corporate events

 

	
6.1  

	
Time of Vesting

 

	
6.1.1  

	
In the event of a Change of Control, to the extent that a Deferred Share Award is not exchanged under rule 6.3 (Exchange), it will Vest on the date of Change of Control.

 

	
6.1.2  

	
If the Company is or may be affected by any demerger, delisting, distribution (other than an ordinary dividend) or other transaction, which, in the opinion of the Directors, might affect the current or future value of any Deferred Share Award, the Directors may allow a Deferred Share Award to Vest. The Directors may impose other conditions on Vesting.

   

  

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6.2  

	
Exchange

 

A Deferred Share Award will not Vest under rule 6.1 (Time of Vesting) but will be exchanged under rule 6.6 (Exchange terms) to the extent that:

 

	
6.2.1  

	
an offer to exchange the Deferred Share Award is made and accepted by a Participant; or

 

	
6.2.2  

	
the Directors, with the consent of the Acquiring Company, decide before Change of Control that the Deferred Share Award will be automatically exchanged.

   

	
6.3  

	
Directors

 

In this rule 6 (Vesting in other circumstances - corporate events), “Directors” means those people who were members of the remuneration committee of the Company immediately before the Change of Control.

   

	
6.4  

	
Timing of exchange

 

Where a Deferred Share Award is to be exchanged under rule 6.3 (Exchange), the exchange is effective immediately following the relevant event.

   

	
6.5  

	
Exchange terms

 

Where a Participant is granted a new award in exchange for an existing Deferred Share Award, the new Deferred Share Award:

 

	
6.5.1  

	
must confer a right to acquire shares in the Acquiring Company or another body corporate determined by the Acquiring Company;

 

	
6.5.2  

	
must be equivalent to the existing Deferred Share Award;

 

	
6.5.3  

	
is treated as having been acquired at the same time as the existing Deferred Share Award and Vests in the same manner and at the same time;

 

	
6.5.4  

	
is governed by the Plan, excluding rule 7.2 (Shareholder approval), as if references to Shares were references to the shares over which the new award is granted and references to the Company were references to the Acquiring Company or the body corporate determined under rule 6.6.1 above.

 

	
7.  

	
Changing the Plan and termination

 

	
7.1  

	
Directors’ powers

 

Except as described in the rest of this rule 7 (Changing the Plan and termination), the Directors may at any time change the Plan in any way.

	
7.2  

	
Shareholder approval

 

	
7.2.1  

	
Except as described in rule 7.2.2, the Company in general meeting must approve in advance by ordinary resolution any proposed change to the Plan to the advantage of present or future Participants, which relates to:

 

	
(i)

	
the Participants;

 

	
(ii)

	
the limits on the number of Shares which may be issued under the Plan;

 

	
(iii)

	
the individual limit for each Participant under the Plan;

 

	
(iv)

	
the basis for determining a Participant's entitlement to, and the terms of, securities, cash or other benefit to be provided and for the adjustment thereof (if any) if there is a capitalisation issue, rights issue or open offer, sub-division or consolidation of shares or reduction of capital or any other variation of capital; or

   

  

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(v)  

	
the terms of this rule 7.2.1.

 

	
7.2.2  

	
The Directors can change the Plan and need not obtain the approval of the Company in general meeting for any minor changes:

 

	
(i)  

	
to benefit the administration of the Plan;

 

	
(ii)  

	
to comply with or take account of the provisions of any proposed or existing legislation;

 

	
(iii)  

	
to take account of any changes to legislation; or

 

	
(iv)  

	
to obtain or maintain favourable tax, exchange control or regulatory treatment of the Company, any Subsidiary or any present or future Participant.

 

	
7.2.3  

	
The Directors may, without obtaining the approval of the Company in general meeting, establish further plans based on the Plan but modified to take account of local tax, exchange control or securities laws in non-UK territories.

 

	
7.3  

	
Notice

 

The Directors are not required to give Participants notice of any changes.

 

	
7.4  

	
Termination

 

The Plan will terminate on the Expiry Date, but the Directors may terminate the Plan at any time before that date. The termination of the Plan will not affect existing Awards.

 

	
8.  

	
General

 

	
8.1  

	
Terms of employment

 

	
8.1.1  

	
This rule 8.1 (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.

 

	
8.1.2  

	
Nothing in the rules 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 his employer 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.

 

	
8.1.3  

	
No Employee has a right to participate in the Plan. 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.

 

	
8.1.4  

	
The terms of the Plan do not entitle the Employee to the exercise of any discretion in his favour.

 

	
8.1.5  

	
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 even if it is unreasonable, irrational or might otherwise be regarded as being in breach of the duty of trust and confidence (and/or any other implied duty) between the Employee and his employer.

 

	
8.1.6  

	
No Employee has any right to compensation for any loss in relation to the Plan, including any loss in relation to:

 

	
(i)  

	
any loss or reduction of rights or expectations under the Plan in any circumstances (including lawful or unlawful termination of employment);

 

	
(ii)  

	
any exercise of a discretion or a decision taken in relation to a Deferred Share Award or to the Plan, or any failure to exercise a discretion or take a decision;

   

  

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(iii)  

	
the operation, suspension, termination or amendment of the Plan.

 

	
8.2  

	
Directors’ decisions final and binding

 

The decision of the Directors on the interpretation of the Plan or in any dispute relating to a Deferred Share Award or matter relating to the Plan will be final and conclusive.

 

	
8.3  

	
Third party rights

 

Nothing in this Plan confers any benefit, right or expectation on a person who is not a Participant. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999, or any equivalent local legislation, to enforce any term of this Plan. This does not affect any other right or remedy of a third party which may exist.

 

	
8.4  

	
Documents sent to shareholders

 

The Company is not required to send to Participants copies of any documents or notices normally sent to the holders of its Shares.

 

	
8.5  

	
Costs

 

The Company will pay the costs of introducing and administering the Plan. The Company may ask a Participant’s employer to bear the costs in respect of a Deferred Share Award to that Participant.

 

	
8.6  

	
Employee trust

 

The Company and any Subsidiary may provide money to the trustee of any trust or any other person to enable them or him to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent permitted by Section 682 of the Companies Act 2006 or any applicable law.

 

	
8.7  

	
Data protection

 

By participating in the Plan the Participant consents to the holding and processing of personal information provided by the Participant to any Member of the Group, trustee or third party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to:

 

	
8.7.1  

	
administering and maintaining Participant records;

 

	
8.7.2  

	
providing information to Members of the Group, trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;

 

	
8.7.3  

	
providing information to future purchasers or merger partners of the Company, the Participant’s employing company, or the business in which the Participant works;

 

	
8.7.4  

	
transferring information about the Participant to a country or territory outside the European Economic Area that may not provide the same statutory protection for the information as the Participant’s home country.

 

The Participant is entitled, on payment of a fee, to a copy of the personal information held about him and, if anything is inaccurate, the Participant has the right to have it corrected.

 

	
8.8  

	
Consents

 

All allotments, issues and transfers of Shares will be subject to any necessary consents under any relevant enactments or regulations for the time being in force in the United Kingdom or elsewhere. The Participant is responsible for complying with any requirements he needs to fulfil in order to obtain or avoid the necessity for any such consent.

   

  

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8.9  

	
Share rights

 

Shares issued to satisfy Awards under the Plan will rank equally in all respects with the Shares in issue on the date of allotment. They will not rank for any rights attaching to Shares by reference to a record date preceding the date of allotment. Where Shares are transferred to a Participant, including a transfer out of treasury, the Participant will be entitled to all rights attaching to the Shares by reference to a record date on or after the transfer date. The Participant will not be entitled to rights before that date.

 

	
8.10  

	
Listing

 

If and so long as the Shares are listed and traded on a public market, the Company will apply for listing of any Shares issued under the Plan as soon as practicable.

 

	
8.11  

	
Notices

 

	
8.11.1  

	
Any information or notice to a person who is or will be eligible to be a Participant under or in connection with the Plan may be posted, or sent by electronic means, in such manner to such address as the Company considers appropriate, including publication on any intranet.

 

	
8.11.2  

	
Any information or notice to the Company or other duly appointed agent under or in connection with the Plan may be sent by post or transmitted to it at its registered office or such other place, and by such other means, as the Directors or duly appointed agent may decide and notify Participants.

 

	
8.11.3  

	
Notices sent by post will be deemed to have been given on the second day after the date of posting. However, notices sent by or to a Participant who is working overseas will be deemed to have been given on the seventh day after the date of posting. Notices sent by electronic means, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending.

 

	
8.12  

	
Governing law and jurisdiction

 

English law governs the Plan and all Deferred Share Awards and their construction. The English courts have non-exclusive jurisdiction in respect of disputes arising under or in connection with the Plan or any Deferred Share Award.

    

	
9.  

	
Definitions

 

In these rules:

 

“Acquiring Company” means a person who has or obtains control (within the meaning of Section 995 of the Income Tax Act 2007) of the Company;

 

“Award Date” means the date on which a Deferred Share Award is granted by deed under rule 1.4 (Terms of Deferred Share Awards);

 

“Change of Control” means

 

(i)when a general offer to acquire Shares made by a person (or a group of persons acting in concert) becomes wholly unconditional; or

 

(ii)when, under Section 895 of the Companies Act 2006 or equivalent procedure under local legislation, a court sanctions a compromise or arrangement in connection with the acquisition of Shares; or

 

(iii)a person (or a group of persons acting in concert) obtaining control (within the meaning of Section 995 of the Income Tax Act 2007) of the Company in any other way.

 

“Company” means Aviva plc;

 

“Conditional Award” means a conditional right to acquire Shares granted under the Plan;

   

  

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“Dealing Restrictions” means restrictions imposed by statute, order, regulation or Government directive, or by the Model Code or any code adopted by the Company based on the Model Code and for this purpose the Model Code means the Model Code on dealings in securities set out in Listing Rule 9, annex 1 (of the London Stock Exchange), as varied from time to time;

 

“Deferred Share Award” means a Conditional Award or an Option;

 

“Directors” means, subject to rule 6.4 (Directors), the board of directors of the Company or a duly authorised person or group of persons;

 

“Dividend Equivalent” means a right to receive cash or Shares in respect of dividends (as determined from time to time by the Grantor), on such basis as the Grantor may, in its discretion, determine;

 

“Employee” means any employee of a Member of the Group (including an executive director);

 

“Expiry Date” means 4 May 2021, the tenth anniversary of shareholder approval;

 

“Grantor” means, in respect of a Deferred Share Award, the entity which grants that Award under the Plan;

 

“London Stock Exchange” means London Stock Exchange plc;

 

“Member of the Group” means:

 

	
(i)  

	
the Company;

 

	
(ii)  

	
its Subsidiaries from time to time; or

 

	
(iii)  

	
any other company which is associated with the Company and is so designated by the Directors;

 

“Option” means a right to acquire Shares granted under the Plan;

 

“Option Period” means a period starting on the grant of an Option and ending at the end of the day before the tenth anniversary of the grant, or such shorter period as may be specified under rule 4.2 (Options) on the grant of an Option;

 

“Option Price” means zero, or the amount payable on the exercise of an Option, as specified under rule 1.4.8;

 

“Participant” means a person holding a Deferred Share Award or his personal representatives;

 

“Plan” means these rules known as “The Aviva Annual Bonus Plan 2011”, as changed from time to time;

 

“Shares” means fully paid ordinary shares in the capital of the Company or any American Depositary Share or American Depositary Receipt (ADR) representing ordinary shares;

 

“Subsidiary” means a company which is a subsidiary of the Company within the meaning of Section 1159 of the Companies Act 2006;

 

“Vesting” in relation to an Option, means an Option becoming exercisable and in relation to a Conditional Award, means a Participant becoming entitled to have the Shares transferred to him subject to the Plan.

  

355

  

 

Schedule 1

France

    

The purpose of this schedule is to make certain variations to the terms of the Plan, in order to satisfy French securities laws, exchange control, corporate law and tax requirements (in particular the provisions of Articles L. 225-177 et seq. of the French Code de commerce, if the Award is an Option, and the provisions of L. 225-197-1 et seq. of the French Code de commerce, if the Award is a Conditional Award) to qualify for favourable income tax and social security treatment in France.

   

The rules of the Plan shall apply subject to the modifications contained in this Schedule 1 whenever the Grantor decides to grant a qualifying Award to an Employee under this Schedule 1.

 

	
1  

	
Rule 1 (Granting Awards)

 

1.1 Rule 1.1 (Grantor)

 

Rule 1.1.3 is deleted.

 

 

1.2  Rule 1.3 (Timing of Awards)

 

The following paragraph is added to the end of rule 1.3:

 

“No Option may be granted: (i) in the period of twenty business days after the day on which the Shares are last traded cum-dividend, cum-rights, or cum-any other distribution; or (ii) during any Closed Period.”

    

1.3 Rule 1.4 (Terms of Deferred Share Awards)

 

1.3.1 Rule 1.4.1 is supplemented with the following:

 

“If the Deferred Share Award is an Option to acquire existing Shares, the Company shall acquire and/or hold enough Shares to satisfy the transfer of Shares on the exercise of the Options before the Vesting date and until expiry of the Option Period.“

 

1.3.2 Rule 1.4.5 is deleted.

 

1.33 Rule 1.4.7 is supplemented with the following:

 

“The Option Price will not be less than:

 

(i) if the Shares subject to the Options are to be issued, 80% of the arithmetical average of the market value of the Shares as quoted for the twenty trading days last preceding the Award Date.

 

	
(ii)  

	
if the Shares subject to the Options are to be transferred from treasury, the higher of (a) 80% of the arithmetical average of the market value of the Shares as quoted for the twenty trading days last preceding the Award Date, or (b) 80% of the arithmetical average acquisition price of the entire treasury share position for the Company.”

 

	
  

	
1.4 Rule 1.5 (Conditions)

 

The following words are added at the end of rule 1.5:

 

“provided that such amendment does not affect the qualifying status of the Awards for tax and social security purposes, and provided further that no such amendment shall adversely affect the right of any Participant without such Participant’s consent”

 

1.5 Rule 1.8 (Administrative errors)

 

Rule 1.8 is deleted and replace with the following:

 

“If the Grantor grants a Deferred Share Award which is inconsistent with rules 1.2 (Eligibility), 1.9 (Individual limit for Awards), 1.10 (Plan limits - 10 per cent) or 1.11 (Plan limits - 5 per cent), it will lapse immediately.”

   

  

356

  

1.6 Rule 1.9 (Individual limit for Deferred Share Award)

 

Rule 1.9 is supplemented with the following:

 

“No Option shall be granted to an Employee who holds 10 per cent or more of the share capital of the Company in issue at the Award Date.

 

No Conditional Award shall be granted to an Employee who holds 10 per cent or more (taking into account any unvested Conditional Award under the Plan or any other plan subject to provisions of Articles L.225-197-1 et seq. of the French Code de commerce) of the share capital of the Company, or who may hold, as the result of this Award, 10 per cent or more of the share capital of the Company.”

   

	
  

	
1.7 Rule 1.10 (Plan limits – 10 per cent)

 

Rule 1.11 is supplemented with the following:

 

“The total number of Shares subject to options granted under the Plan or any other plan subject to provisions of Articles L.225-177 et seq. of the French Code de commerce shall not exceed one third of the share capital of the Company in issue at the Award Date.

 

The total number of Shares granted under the Plan or any other plan subject to provisions of Articles L.225-197-1 et seq. of the French Code de commerce shall not exceed 10 per cent of the share capital of the Company in issue at the Award Date.”

   

	
2  

	
Rule 2 (Before Vesting)

   

	
2.1  

	
Rule 2.2 (Transfer)

 

Rule 2.2.2 is deleted.

 

	
2.2  

	
Rule 2.3 (Adjustment of Awards)

 

Rule 2.3 is deleted and replaced with the following:

 

“On the occurrence of one of the events specified under Article L.225-181 of the French Code de commerce, the Company:

 

	
(iii)  

	
shall make such adjustments as its consider appropriate to restore the value of the granted Options; and

 

	
(iv)  

	
may make such adjustments as its consider appropriate to restore the value of the granted Conditional Awards.

 

An adjustment made under this rule shall only be permissible to the extent that it is intended to, and that its sole effect is to, restore the value of the granted Deferred Share Awards and it is made in compliance with the rules set out in the French Code de commerce.“

   

	
2.3  

	
Rule 2.4 (Reduction or cancellation of Awards)

 

Rule 2.4 is deleted. 

       

  

357

  

 

	
3  

	
Rule 3 (Vesting)

 

	
3.1  

	
Rule 3.1 (Timing of Vesting) is supplemented with the following:

 

“Notwithstanding any rule other than rule 5.6 (Death or Defined Disability), a Conditional Award shall not vest prior to the second anniversary of the Award Date. If a Conditional Award would vest, in accordance with any rule in the Plan other than rule 5.6, prior to the second anniversary of the Award Date, the Conditional Award will not so vest but will continue until the second anniversary of the Award Date and at such time only, it will vest, and the Holding Period will apply from this date.

   

	
4  

	
Rule 4 (Consequences of Vesting)

   

4.1.1 Rule 4.1 (Conditional Award)

 

Rule 4.1 is deleted and replaced with the following:

 

	
“4.1.1 

	
Within 30 days of a Conditional Award Vesting, the Grantor will arrange for the transfer (including a transfer out of treasury) or issue of the number of Shares in respect of which the Conditional Award has vested to a share account administered in the name and for the benefit of the Participant by an account keeper (teneur de compte) designated by the Directors.

   

Except as provided under rule 5.6 (Death or Defined Disability), the Shares will be held by the account keeper on behalf of the Participant, for the duration of the Holding Period, in accordance with the provisions of the Holding Agreement. The Participant shall have full shareholder voting and dividend rights on the transferred shares during the Holding Period.

   

The Participant will be free to dispose of the Shares upon expiry of the Holding Period, except during the Closed Periods during which the sale of the Shares is prohibited.

   

	
4.1.2

	
Shares transferred to Participants holding the duties of chairman of the board, general manager, deputy general manager, member of the directory board, or manager (respectively président du conseil d’administration, directeur général, directeur général délégué, membre du directoire or gérant) in the Company or any Member of the Group shall not be disposed before termination of the Participant’s executive duties. Alternatively, the Directors may decide that a fraction of the Shares transferred to Participants holding the duties of chairman of the board, general manager, deputy general manager, member of the directory board, or manager (respectively président du conseil d’administration, directeur général, directeur général délégué, membre du directoire or gérant) in the Company or any Member of the Group will be in a registered (nominatif) form and will not be available for sale or transfer before termination of the Participant’s executive duties.”

   

	
4.2  

	
Rule 4.2 (Options)

 

4.2.1 In rule 4.2.1, the words “(unless the reason for Vesting is the Participant’s death, in which case the Option will lapse 12 months after Vesting)” are deleted. Any reference to a 12-month exercise period applicable in case of death is deleted accordingly.

 

4.2.2 The following is inserted as rule 4.2.4:

 

“Notwithstanding any rule other than rule 4.2.5, the Shares acquired following the exercise of an Option may not be sold by a Participant or otherwise transferred before the fourth anniversary of the Award Date. The Company or Member of the Group may take such steps as it/they consider appropriate to ensure the Participant’s compliance with this rule, including (without limitation) the blocking of any account into which the Shares have been issued or transferred."

 

4.2.3 The following is inserted as rule 4.2.5:

   

  

358

  

   

“Rule 4.2.4 shall not apply where a Participant leaves employment for reason of:

 

(i)death,  or

 

(ii)Defined Disability.”

    

4.3 Rule 4.3 (Dividend Equivalent)

 

Rule 4.3 is deleted. Any reference to Dividend Equivalent is deleted accordingly.

    

4.4 Rule 4.4 (Alternative ways to satisfy Deferred Share Awards)

 

Rule 4.4 is deleted. Any reference to rule 4.4 is deleted accordingly.

   

4.5 Rule 4.5 (Withholding)

 

Rule 4.5 is supplemented with the following:

 

“The Participants (or heirs, if applicable) are responsible for reporting the receipt of any income under the Plan, however made, to the appropriate tax authorities.

 

The Member of the Group with whom a Participant is or was in employment on the date the Shares are transferred will communicate the name of the Participant and the number of Shares being transferred to the social security authorities competent for that Member of the Group, in accordance with the provisions of Article L. 242-1 of the French Code de la sécurité sociale.”

 

	
5  

	
Rule 5 (Vesting in other circumstances - personal events)

    

	
5.1  

	
Rule 5.2 (”Good leavers”)

 

The following is added at the end of rule 5.2:

 

“, subject to rule 3.1 (Timing of Vesting)”

   

	
5.2  

	
Rule 5.4 (Overseas transfer)

 

Rule 5.4 is deleted.

   

	
5.3  

	
The following is inserted as rule 5.6 (Death or Defined Disability):

 

“Notwithstanding any other rule of the Plan, where a Participant leaves employment for reason of death, his personal representatives may require, within six (6) months from the date of death, Vesting of the deceased’s Conditional Award and the transfer of the underlying Shares. The Shares will be transferred to the personal representatives of the Participant as soon as practicably possible following their request, and shall not be subject to any Holding Period.

 

Notwithstanding any other rule of the Plan, where a Participant suffers from a Defined Disability, he can request at any time the Vesting of its Conditional Award and the transfer of the underlying Shares. The Shares shall be transferred to the Participant suffering from a Defined Disability as soon as practicably possible following his request, and shall not be subject to any Holding Period.”

   

	
6  

	
Rule 6 (Vesting in other circumstances - corporate events)

 

Rule 6 (Vesting in other circumstances - corporate events) shall apply in accordance with Articles L. 225-197-1-III of the French Code de commerce and 80 quaterdecies and 163 bis C-I bis of the French Code général des impôts to the extent that the Directors intend the Awards to maintain favourable tax treatment under this Schedule 1. However, in the event the Directors do not intend the Awards to maintain such favourable tax treatment, rule 6 of the Plan will prevail notwithstanding any potential detrimental tax or social security consequences for the Participant.

   

  

359

  

   

	
7  

	
Rule 7 (Changing the Plan and termination)

 

Rule 7.1 shall be supplemented with the following:

 

“Except as provided in rule 6 (Vesting in other circumstances - corporate events), changes may affect Deferred Share Awards already granted provided that (i) the changes do not affect the qualifying status of the Deferred Share Awards for tax and social security purposes and provided that (ii) no such changes shall adversely affect the rights of any Participant without such Participant’s prior consent.”

   

	
8  

	
Rule 9 (Definitions)

 

The definitions of “Member of the Group”, “Employee” and Option Price stated in rule 9 of the Plan shall be deleted and replaced by the following definitions:

 

“Member of the Group” means (i) a company in which the Company holds, directly or indirectly, at least 10 per cent of the share capital or voting rights; (ii) a company holding directly or indirectly at least 10 per cent of the share capital or voting rights of the Company; or (iii) a company for which at least 50 per cent of the share capital or voting rights are held by a company which holds at least 50 per cent of the share capital of the Company.

 

“Employee” means a salaried employee of the Company or any Member of the Group, or a corporate officer of the Company or any Member of the Group holding the duties of chairman of the board, general manager, deputy general manager, member of the directory board, or manager (respectively président du conseil d’administration, directeur général, directeur général délégué, membre du directoire or gérant).

 

“Option Price” means the amount payable on the exercise of an Option, as specified under rule 1.4.7.

 

For the purpose of Awards granted under this Schedule 1, the following new definitions shall be added to those stated in rule 1 of the Plan:

 

“Closed Period” means (i) the 10 trading days preceding and following the date on which the Company’s consolidated accounts or, failing that, the annual accounts, are made public; and (ii) the period between (x) the date on which the management bodies of the Company have knowledge of information which, if made public, could have a significant impact on the price of the Share and (y) the end of the tenth trading day following the date on which this information has been made public.

 

“Defined Disability” means the circumstance where a Participant is recognised as a disabled employee of the second or third category under the meaning of Article L.341-4 of the French Code de la sécurité sociale;

 

“Holding Agreement” means an agreement between the Participant, the Company and an account keeper (teneur de compte) designated by the Company, in such form as determined by the Company and delivered by the Participant, in which the Participant undertakes not to sell or transfer Shares before expiry of the Holding Period, and the account keeper undertakes not to perform any such order before expiry of the Holding Period.

 

“Holding Period” means a two-year period following the transfer of the Shares to the Participant, during which the Shares cannot be sold, transferred or otherwise disposed.

 

All capitalised terms used in this Schedule 1 and not otherwise defined herein shall have the meaning ascribed to them in the Plan.

      

  

360

  

	
9  

	
Severability

 

The terms and conditions provided in the Plan as amended by this Schedule 1 are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable under French law, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

 

 

 

 

 

 

 

  

361

  

 

Schedule 2

Canada

 

The purpose of the Schedule 2 is to make certain variations of the terms of the Plan, in the case of its operation for Employees in Canada, to take into account Canadian tax rules. The grant of Options under the Plan is not available to Employees in Canada pursuant to this Schedule 2.

 

The rules of the Plan will apply to grants made under this Schedule 2, subject to the following:

   

	
1  

	
Rule 1.4 (Terms of Deferred Share Awards)

 

Rule 1.4.1 is deleted and replaced by the following:

 

“any Deferred Share Award granted to Employees in Canada will take the form of a Conditional Award;”

	
2  

	
Rule 4.1 (Conditional Awards)

 

The following paragraphs are added to the end of rule 4.1 (Conditional Awards):

 

“Notwithstanding the foregoing, Deferred Share Awards shall only be satisfied with newly issued Shares or Shares transferred out of treasury. No Conditional Awards shall be satisfied with Shares sourced from any trust.

   

	
3  

	
Rule 4.4 (Alternative ways to satisfy Deferred Share Awards)

 

Rule 4.4 (Alternative ways to satisfy Deferred Share Awards) shall not apply to Deferred Share Awards.

    

	
4  

	
Rule 8.6 (Employee trust)

 

The following paragraph is added to the end of rule 8.6 (Employee trust):

 

“Notwithstanding the foregoing, Deferred Share Awards shall only be satisfied with newly issued Shares or Shares transferred out of treasury.”

  

362

  

   

Schedule 3

USA

 

This Schedule 3 shall apply to any Participant who is, or who becomes or may become, subject to taxation under the laws of the United States of America (“US Tax”).  This Schedule 3 applies to any Deferred Share Award granted.

 

To the extent that a Participant confirms to the Company (to its satisfaction) that he is no longer subject to US Tax and will not be subject to US Tax in respect of any Deferred Share Award (or portion thereof), this US Schedule shall cease to apply to any outstanding Deferred Share Award (or portion thereof) from such time as determined by the Company.

 

For the purpose of Deferred Share Awards subject to this Schedule 3, all of the rules of the Plan shall apply subject to the following amendments:

    

	
1  

	
Rule 5.2 (“Good leavers”)

 

Rule 5.2 is deleted and replaced by the following:

 

“If a Participant ceases to be an Employee for any of the reasons set out below, then his Awards will Vest as described below. The reasons are:

 

	
(v)  

	
disability, as established to the satisfaction of the Company;

 

	
(vi)  

	
death; and

 

	
(vii)  

	
any other reason, if the Directors so decide in any particular case,

 

then all the Shares under his Deferred Share Award will Vest on the cessation date.”

   

	
2  

	
Rule 9 (Definitions)

 

The definition of “Options Price” in rule 9 (Definitions) is deleted and replaced by the following:

 

““Option Price” means the fair market value of the Shares subject to the Option on the Award Date (as determined in a manner consistent with section 409A of the US Internal Revenue Code 1986 and the regulations promulgated thereunder);”.

 

 

363aviva_20f-ex0406.htm

Exhibit 4.6

   

AVIVA IRELAND SAVE AS YOU EARN SCHEME

Scheme Rules

 

	
1.

	
Definitions

1.1   In these Rules the following words and expressions shall have the following meanings:

 

“Act” the Taxes Consolidation Act, 1997

 

“Adoption Date” the date in 2007 on which the board of Aviva plc adopted a shareholder resolution, in general meeting to approve such schemes.

“Announcement Date” (i) in relation to the first issue of invitation to apply for Options, such date as the Board may decide and, (ii) in relation to subsequent invitations the date of the announcement to the London Stock Exchange of the results of the group for any period.

“Appropriate Period” has the meaning given to it in paragraph 16 (2) of Schedule 12A, to the Act.

 

“Associated Company” has the meaning assigned to it by paragraph 1 (1) of Schedule 12A, to the Act.

 

“Auditors” the auditors for the time being of the Company or in the event of there being Joint Auditors such one of them as the Company shall select.

 

“Board” the Board of Directors of the Company or, except in Rule 12.4, a duly constituted com

 

“Bonus” the aggregate investment return received on your savings under a completed Savings Contract.

 

“Bonus Date” has the meaning assigned to it by paragraph 18 of Schedule 12A, to the Act.

 

“Company” Aviva Plc, registered in the United Kingdom, Number 2468686.

 

“Control” has the meaning assigned to it in section 432 tothe Act.

 

“Date of Grant” the date on which an application for an Option is, was or may be accepted in accordance with Rule 4.

 

“Eligible Employee” means every person who:

(i)(a) is an employee of any Participating Company, including a full-time director,

(b) is chargeable to tax under Schedule E in respect of that employment, and

(c) is on the date invitations to participateissue under Rule 2.1 such an employee or director continuously for the Qualifying Period, or (ii) is any other employee or director of a Participating Company, nominated by the Board to be an Eligible Employee, provided, that no person shall be an Eligible Employee if that person is ineligible to participate in the Scheme by virtue of paragraph 8 , Schedule 12A to the Act.

    

  

364

  

   

“Full-time director” a director who is required to devote not less than 25 hours a week to the service of the Company (exclusive of meal breaks).

 

“Interest” the investment return earned on the withdrawal of your savings if you do not complete the full term of the chosen Savings Contract.

 

“Market Value” has the meaning assigned to it by Section 548 to the Act.

 

“Option” a right to acquire Shares granted (or to be granted) in accordance with the Rules of the Scheme.

 

“Option Price” means the price at which a Participant may acquire a Share on the exercise of an Option.

 

“Normal Retirement Age” 60th Birthday.

 

“Participating Companies” means all Irish companies, over which The Company has control and which have been nominated by the Board as Participating Companies.

 

“Qualification Date” means such date as the Board may select.

 

“Qualifying Period” in relation to any qualification date means a period of 3 years (or such shorter period as the Board may decide) ending on that Qualification Date provided that the period from commencement of the Qualifying Period to the date upon which Options are granted pursuant to invitations made by reference to that Qualification Date may not be greater than 3 years.

 

“Savings Contract” a contract under a certified contractual savings scheme, within the meaning of Schedule 12B,to the Act.

 

“The Scheme” means the Aviva Ireland Save As You Earn Scheme constituted and governed by these rules as from time to time amended.

 

“Shares” fully paid up ordinary shares of the Company which comply with the provisions of paragraphs10 to 15, of Schedule 12A , to the Act.

   

  

365

  

   

“Specified Age” is the Normal Retirement Age or any other age between 60 and 66 years of age.

 

“Subscription Price” the price at which each Share subject to an Option may be acquired on the exercise of that Option being subject to Rule 8, the higher of:

 

(i) the nominal value of a share, or

 

(ii) 80% of the Market Value of a Share on the day that the invitation to apply for that Option was issued pursuant to Rule 2.

 

“Subsisting Option” an Option which has neither lapsed nor been exercised.

 

1.2   Words importing the singular shall include the plural, and vice versa, and words importing the masculine shall include the feminine.

 

1.3   Any reference to any statute (or a particular Part, Chapter or Section thereof) shall mean and include any statutory modification or re-enactment thereof for the time being in force, and any regulations made thereunder.

 

	
2.

	
Invitations to Apply for Options

 

2.1   The Board may invite every Eligible Employee to apply for the grant of an Option to acquire shares in the Company on any one occasion within each of the following periods:

 

(i) on any occasion on which the Board decides to operate the Scheme, the Company shall invite each person who will be or who was an Eligible Employee on the Announcement Date to apply for the grant of an Option.

 

(ii) subject to Rule 2.1 (iii), invitations may only be issued within the period starting three weeks before and ending six weeks after an Announcement Date.

 

(iii) in circumstances determined by the Board to be exceptional, invitations may be issued at times other than those provided for in Rule 2.1 (ii) in which event such dates as the Board may select shall be deemed for the purposes of the Rules to be the Announcement Date.

2.2.1   Each invitation shall specify

 

(i) the date, not being less than 14 days after the issue of the invitation, by which the application must be received by the Company.

 

(ii) the Option Price or, if the Option Price is not known, the Dealing Day (or the first of the three Dealing Days) by reference to which the Option Price will be determined in accordance with Rule 6.1 (Option Price) and

 

(iii) the minimum and maximum permitted aggregate monthly savings contribution, as specified in paragraph 25 of Schedule 12A to the Act or as subsequently amended, not being less than or greater than the Board decides shall apply to every Eligible Employee in respect of that invitation.

 

(iv) for weekly paid employees a total of 4 weekly deductions shall be made per month, giving an annual total of 48 deductions.

2.2.2   Where the Option Price is not known when the invitation is issued Eligible Employees shall be sent notification of the Option Price no less than 7 days prior to the date referred to in Rule 2.2.1 (i).

 

2.3   Each invitation shall be accompanied by a proposal form for a Savings Contract, and an application form which will provide for the applicant to state:

 

(i) the monthly savings contribution (being a multiple of IR£1 where savings commence on or before 31 December 2001 and €1 where savings commence on or after 1 January 2002) and not less than the minimum permitted monthly savings contribution, as specified inparagraph 25 of Schedule 12A to the Act or as subsequently amended which the applicant wishes to make under the related Savings Contract

  

  

366

  

    

(ii) that t he applicant’s proposed monthly savings contribution, when added to any monthly savings contributions then being made under any other Savings Contract linked to an Option granted under the Scheme or any other savings related share option scheme approved by the Revenue Commissioners, will not exceed the maximum permitted aggregate monthly savings contributions specified in the invitation and to authorise the Board to enter on the Savings Contract proposal form such monthly savings contribution, not exceeding the maximum stated on the application form as shall be determined subject to Rule 3 (Scaling Down) below.

 

2.4   Each application shall be deemed to be for an Option over the largest whole number of Shares which can be bought at the Option Price with the expected repayment under the related Savings Contract at the appropriate Bonus Date. In circumstances where an Option is exercised the appropriate funds shall be paid direct by the Savings Contract Provider to the Company.

 

2.5   Scheme Limits

 

2.5.1    General

 

(i) On or before the date upon which Options are granted on any occasion the Board may determine a limit on the number of Shares over which Options will be granted on that occasion.

 

2.5.2   Limit on new Shares to be placed under Option on any date

 

(i) The nominal amount of Shares over which the Board may grant Options to subscribe on any date shall be limited so that it does not exceed either the limit set out in Rule 2.5.2 (ii) or the limit set out in Rule 2.5.2(iii).

 

(ii) The limit for this Rule is 10 per cent of the nominal amount of the Company’s Equity Share Capital on the day preceding the date of Grant less the aggregate of the nominal amounts of:

 

(a) Shares issued on the exercise of Options granted within the previous 10 years under any Share Option Scheme,

 

(b) Shares remaining issuable in respect of Options granted on the same date or within the previous 10 years under any Share Option Scheme, and

 

(c) Shares issued on the same date or within the previous 10 years under any Share Incentive Scheme.

(iii) The limit for this Rule is 5 per cent of nominal amount of the Company’s Equity Share Capital on the day preceding the Date of Grant, less the aggregate of the nominal amounts of :

 

(a) Shares issued on the exercise of Options granted within the previous five years under any Share Option Scheme,

 

(b) Shares remaining in respect of Options granted on the same date or within the previous five years under any Share Option Scheme, and

 

(c) Shares issued on the same date or within the previous five years under any Share Incentive Scheme.

 

	
3.

	
Scaling Down

 

3.1   If the total number of Shares over which Options would otherwise be granted to Eligible Employees on any Date of Grant would result in any limit imposed pursuant to Rule 2.5 (Scheme Limits) being exceeded, the Grantor shall to the extent necessary to ensure that the relevant limit is not exceeded scale down applications by one or more of the following methods (or by such other methods as may be agreed in writing with the Revenue Commissioners):

      

  

367

  

   

(i) by reducing each application with a monthly contribution above a specified amount to that specified amount.

  

(ii) by reducing each application by the same monetary amount; or

(iii) by reducing each application on a pro rata basis to the nearest multiple of IR£1 where scaling down is required on or before 31 December 2001 and €1 where scaling down is required on or after 1 January 2002, but no application may be reduced to below the minimum permitted monthly savings contribution, as specified in paragraph 25 of Schedule 12A to the Act or as subsequently amended, or such other sum as may be the minimum monthly contribution permitted under a Savings Contract at that time.

Each application shall be deemed to have been modified or withdrawn in accordance with the application of the foregoing provisions and the Board shall complete each Savings Contract proposal form to reflect any reduction in monthly savings contribution resulting therefrom.

 

	
4.

	
Grant of Options

 

4.1   No later than the 30 days or if Rule 3 (Scaling Down) applies 40 days following the day on which the invitations were issued pursuant to Rule 2 (Invitation to Apply for Options), the Board shall grant to each applicant who is still an Eligible Employee and is not precluded from participation in the Scheme by virtue of paragraph 8 of Schedule 12A to the Act, an Option over the number of Shares for which, pursuant to Rule 2.4 and subject to Rule 3, the applicant is deemed to have applied.

 

As soon as possible after Options have been granted the Board shall issue an Option certificate in respect of each Option in such form, not inconsistent with these Rules, as the Board may determine.

No Option may be transferred, assigned or charged, and any purported transfer, assignment or charge shall cause the Option to lapse forthwith. Each Option certificate shall carry a statement to this effect.

 

	
5.

	
Limitations on Grants

 

5.1   The Board may, before issuing invitations on any occasion, determine a limit on the number of Shares which are to be available in respect of that invitation in order to ensure that Shares remain available for subsequent invitations.

 

5.2   No Option shall be granted to an Eligible Employee if the monthly savings contribution under the related Savings Contract, when added to the monthly savings contributions then being made under any other Savings Contract, would exceed the maximum specified in paragraph 25 of Schedule 12A to the Act.

 

	
6.

	
Option Price

 

6.1    General

   

The Option Price shall be determined by the Board on a date (the “relevant date”) but shall not be less than the higher of:

 

(i) the nominal value of a Share on the Date of Grant, and

 

(ii) if shares of the same class as those Shares are listed on the London Stock Exchange, an amount equal to such percentage as may be permitted by the Act of either :

 

(a) the middle market quotation of a share, as derived from the Daily Official List of the London Stock Exchange, on the Dealing Day immediately before the relevant date; or

 

(b) the arithmetic average of the middle market quotations of a Share, as derived from the Daily Official List of the London Stock Exchange, for the three consecutive Dealing Days ending with the Dealing Day immediately before the relevant date, as the Board shall, subject to Rule 6.2, determine on or before the relevant date.

    

  

368

  

   

6.2    Dealing Days

 

The Dealing Days selected by the Board in accordance with Rule 6.1 shall fall within the period of six weeks following the Announcement Date and shall not begin earlier than the thirtieth (or, if Rule 3 (Scaling Down) applies, the fortieth) day preceding the Date of Grant.

 

	
7.

	
Exercise of Options

7.1   Subject to Rule 11 (Manner of Exercise of Options) any Subsisting Option may be exercised in whole or in part at any time within 6 months where :

(i) the relevant Bonus Date if, on the day of exercise, the Option holder is an employee or director of a Participating Company:

 

(ii) the death of the Option holder;

 

(iii) the Option holder ceases to be a director or employee of any Participating Company by reason of injury, disability, redundancy within the meaning of the Redundancy Payments Acts, 1967 to 1991 or retirement on reaching the Specified Age;

 

(iv) the Option holder ceases to be a director or employee of any Participating Company by reason only that:

 

(a) that office or employment is in a company which the Company ceases to have Control, or

 

(b) that office or employment relates to a business or part of a business which is transferred to a person who is neither an associated company nor a company of which the Company has Control.

 

(iv) the relevant Bonus Date, where an Option holder holds an office or employment in a company which is not a Participating Company but which is:an Associated Company of the Company, or

 

(b) a company of which the Company has control

 

7.2   An Option shall lapse on the earliest of the following events:

 

(i) except where the Option holder has died, the expiry of six months following the Bonus Date;

 

(ii) where the Option holder died during the six months following the Bonus Date the first anniversary of the Bonus Date;

 

(iii) where the Option holder has died before the Bonus Date, the first anniversary of his death;

 

(iv) unless the Option holder has died, the expiry of six months after the Option has become exercisable by virtue of paragraph (iii) of Rule 7.1;

 

(v) the expiry of six months after the Option has become exercisable by virtue of paragraph (iv) of Rule 7.1 or in accordance with Rule 8 (Takeovers and Liquidations);

 

(vi) the Option holder ceasing to be a director or employee of any Participating Company by reason of being dismissed or resigning within three years of the commencement of the savings contract. If three years have elapsed since the commencement of the savings contract then the Option may be exercised with the aggregate of the savings contributions plus interest earned at the termination date - In such circumstances theOption must be exercised within six months of the termination date.

 

(vii) the Option holder becoming bankrupt.

   

  

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7.3   No person shall be treated for the purposes of this Rule 7 as ceasing to be employed by a Participating Company until he is no longer employed by the Company, any Associated Company or a company of which the Company has Control.

7.4   If an Option holder continues to be employed by a Participating Company after the date on which he reaches the Specified Age, he may exercise any Subsisting Option within six months following that date.

 

	
8.

	
Take-overs and Liquidations

 

8.1   If any person obtains Control of the Company as a result of making

 

(i) a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on condition such that if it is satisfied theperson making the offer will have Control of the Company, or

 

(ii) a general offer to acquire all the shares in the Company which are of the same class as the Shares,then any Subsisting Option may be exercised within six months of the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied.

 

8.1.2   If the person, as a result of so obtaining Control becomes entitled to give notice to holders of Shares, all Options shall, subject to Rule 9 (Substitute Options following change in Control), be exercisable at any time when that person remains so bound or entitled.

8.2   Scheme of arrangement

If the Court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, then each Participant may exercise his Options at any time in the period starting with the date on which the compromise or arrangement is sanctioned by the court and ending with the date which is six months after the date on which it is sanctioned.

 

8.3    Liquidation

 

8.3.1   If an effective resolution is passed for the voluntary winding-up of the Company, each Participant may forthwith and until the expiry of the period of six months after the passing of the resolution exercise his Option and at the end of that period all Options shall, subject to Rule 9 (Substitute Options following change in Control), lapse.

 

8.3.2   Where a Participant exercises his Option in accordance with Rule 8.3.1 he shall be entitled to share in the assets of the Company with existing holders of Shares in the same manner as he would have been entitled had the shares been registered in his name before the resolution was passed.

 

8.3.3   Subject to Rules 8.3.1 and 9 (Substitute Options following change in Control), all Options, to the extent unexercised, shall automatically lapse in the event of an effective resolution being passed or an order being made for the winding-up of the Company.

 

9.    Substitute Options following change in Control

 

9.1   Application

 

This Rule 9 applies where a company (the “Acquiring Company”)

 

(i) obtains Control of the Company as a result of making -

(a) a general offer to acquire all the Shares (or such of the Shares as are not already owned by the Acquiring Company and/or by its Holding Company and/or by the Subsidiaries of it or of its Holding Company), made on a condition such that if it is satisfied the Acquiring Company will have Control of the Company, or

   

  

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(b) a general offer to acquire all the Shares (or such of the Shares as are not already owned by the Acquiring Company and/or by its Holding Company and/or by the Subsidiaries of it or of its Holding Company), or

(ii) obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the court, or

(iii) becomes bound or entitled to acquire shares in the Company.

9.2   Release of Options

Subject to the conditions referred to in Rule 9.3, where this Rule 9 applies, a Participant may within the period referred to in Rule 9.4 release his Option (the “Old Option) in consideration of the grant to him of an Option (the “New Option”) over shares in the Acquiring Company or some other company falling within paragraph 16 of Schedule 12A to the Act.

 

9.3   The Conditions

 

The conditions referred to in Rule 9.2 are as follows :

 

(1) The shares over which the New Option is granted must comply with the conditions of paragraphs 10 to 15 (inclusive) of Schedule 12A to the Act.

(2) The total market value of the Shares subject to the Old Option must be equal to the total market value of the shares subject to the New Option immediately after the release. For this purpose, market value shall be determined in accordance with the Taxation of Chargeable Gains as contained in the Taxes Consolidated Act 1997 as at the date of release or such other date as may be agreed in advance in writing with the Revenue Commissioners.

(3) The aggregate exercise price payable by the Participant upon the exercise in full of his New Option must be equal to the aggregate Option Price which would have been payable by him had he exercised in full his Old Option.

9.4   Period for release

 

The period referred to in rule 9.2 is -

(i) in a case falling within Rule 9.1(i), six months beginning with the time when the Acquiring Company obtains Control of the Company and any condition subject to which the offer is made is satisfied or waived,

 

(ii) in a case falling within Rule 9.1(ii), six months beginning with the time when the court sanctions the compromise or arrangement, and

 

(iii) in a case falling within Rule 9.1(iii), the period during which the Acquiring Company remains so bound or entitled.

 

9.5   Consequences of release

Where a Participant is granted a New Option in consideration of the release of his Old Option in accordance with this Rule 9, then -

   

  

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(i) the New Option shall be exercisable in the same manner as the Old Option,

(ii) the New Option shall be subject to the provisions of the Scheme as it had effect in relation to the Old Option immediately before the release,

(iii) with effect from the release, the Rules (with the exception of Rules 2 (Invitation to Apply for Options) and 4 (Granting of Options)) shall in relation to the New Option apply as if references to Shares were references to the shares in respect of which the New Option is granted, and

(iv) with effect from the release, Rules 8.1.2 (Takeovers and Liquidations) and 12 (Administration and Amendment) shall in relation to the New Option be construed as if references to the Company (including any such references as occur in expressions which are defined in rule 1 and used in those Rules) were references to the company in respect of whose shares the New Option is granted.

 

	
10.

	
Variation of Share Capital

 

In the event of any variation in the share capital of the Company by way of capitalisation or rights issue or any consolidation, sub-division or reduction or otherwise, the number of Shares subject to any Option and the Subscription Price for each of those shares shall be adjusted in such manner as the Auditors confirm to be fair and reasonable provided that:

 

(i) the aggregate amount payable on the exercise of an Option in full is neither materially changed nor increased beyond the expected repayment under the Savings Contract at the appropriate Bonus Date,

 

(ii) the Subscription Price for a Share is not reduced below its nominal value,

 

(iii) no adjustment shall be made without the prior written approval of the Revenue Commissioners, and

 

(iv) following the adjustment the Shares continue to satisfy the conditions specified in Paragraphs 11 to 15 inclusive, Schedule 12A to the Act.

	
11.

	
Manner of Exercise of Options

 

11.1   No Option shall be exercised by an individual at any time when he is, or by the personal representatives of an individual who at the date of his death was, precluded by Paragraph 8, of Schedule 12A to the Act from participating in the Scheme

 

11.2   No Option shall be exercised at any time when the shares which may thereby be acquired are not Shares as defined in Rule 1.1.

 

11.3   An Option shall only be exercised over the number of Shares which may be purchased with the sum obtained by way of repayment under the related Savings Contract.

 

11.4   An Option shall be exercised by the Option holder, or as the case may be, his personal representatives, giving notice to the Company in writing of the number of Shares in respect of which he wishes to exercise. The appropriate funds will be paid direct by the Savings Contract provider to the Company (which shall not exceed the sum saved and bonus received under the related Savings Contract). The exercise by the Option holder shall be effective on the date of its receipt by the Company.

 

11.5   Shares shall be allotted and issued pursuant to a notice of exercise within thirty days of the date of exercise. Save for any rights determined by reference to a date preceding the date of allotment, such Shares shall rank pari passu with the other Shares of the same class in issue at that date of allotment.

 

11.6   When an Option is exercised only in part, it shall lapse to the extent of the unexercised balance.

 

11.7   For the purposes of Rules 11.3 and 11.4 above, any repayment under the related Savings Contract shall exclude the repayment of any contribution the due date for payment of which falls more than one month after the date on which repayment is made.

 

	
12.

	
Administration and Amendment

 

12.1   The Scheme shall be administered by the Board whose decision on all disputes shall be final.

   

  

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12.2   The Board may from time to time amend these Rules provide that:

 

(i) no amendment shall materially affect an Option holder as regards an Option granted prior to the amendment being made,

 

(ii) no amendment shall be made which would make the terms on which Options may be granted materially more generous or would increase the limit specified in Rule 5.1 without the prior approval of the Company in general meeting, and

 

(iii) no amendment shall be made without the prior written approval of the Revenue Commissioners.

 

12.3   The costs of establishing and operating the Scheme shall be borne by the Participating Companies in such proportions as the Board shall determine.

12.4   The Board may establish a committee consisting of not less than three persons to whom any or all of its powers in relation to the Scheme may be delegated. The Board may at any time dissolve the committee, alter its constitution or direct the manner in which it shall act.

 

12.5   Any notice or other communication under or in connection with the Scheme may be given in such manner as the Board consider to be appropriate which may include by personal delivery, by email or intranet or by post, in the case of a Company to its registered office or to such other address notified for this purpose to the person giving the notice, and in the case of an individual to his last known address, or, where he is an employee of a Participating Company, either to his last known postal address, to the postal address of the place of business at which he performs the whole or substantially the whole of the duties of his employment or in the absence of there being such a place, the place of business to which regular correspondence in connection with his employment is sent, or to his allocated corporate email address. Unless otherwise stated in these Rules, where any such notice or other communication is given by an Eligible Employee or an Option holder to the Company, it shall be effective only on receipt by the Company.

 

12.6   The Company shall at all times keep available sufficient authorised and unissued Shares to satisfy the exercise to the full extent still possible of all Options which have neither lapsed nor been fully exercised, taking account of any other obligations of the Company to issue unissued Shares.

 

	
13.

	
General

 

13.1   All eligible employees shall be eligible to participate in the Scheme on similar terms.

 

13.2   This Scheme is subject to the laws of Ireland.

 

 

 

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