Document:

EXHIBIT 10.6

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WALGREENS BOOTS ALLIANCE, INC.

 

2013 OMNIBUS INCENTIVE PLAN

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

These materials, which may include descriptions of company stock plans, prospectuses and other information and documents, and the information they contain, are provided by Walgreens Boots Alliance, Inc., not by Fidelity, and are not an offer or solicitation by Fidelity for the purchase of any securities or financial instruments. These materials were prepared by Walgreens Boots Alliance, Inc., which is solely responsible for their contents and for compliance with legal and regulatory requirements. Fidelity is not connected with any offering or acting as an underwriter in connection with any offering of securities or financial instruments of Walgreens Boots Alliance, Inc. Fidelity does not review, approve or endorse the contents of these materials and is not responsible for their content.

 

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WALGREENS BOOTS ALLIANCE, INC.

2013 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

Participant Name:

Participant ID:

Grant Date:

Units Granted:

Vesting: Acceptance Date:

Electronic Signature:

            This document (referred to below as this “Agreement”) spells out the terms and conditions of the Restricted Stock Unit Award (the “Award”) granted to you by Walgreens Boots Alliance, Inc., a Delaware corporation (the “Company”), pursuant to the Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan (the “Plan”) on and as of the Grant Date designated above. Except as otherwise defined herein, capitalized terms used in this Agreement have the respective meanings set forth in the Plan. For purposes of this Agreement, "Employer" means the entity (the Company or the Affiliate) that employs you on the applicable date. The Plan, as it may be amended from time to time, is incorporated into this Agreement by this reference.

You and the Company agree as follows:

1.            Grant of Restricted Stock Units. Pursuant to the approval and direction of the Compensation Committee of the Company’s Board of Directors (the “Committee”), the Company hereby grants you the number of Restricted Stock Units specified above (the “Restricted Stock Units”), subject to the terms and conditions of the Plan and this Agreement.

2.            Restricted Stock Unit Account and Dividend Equivalents. The Company will maintain an account (the “Account”) on its books in your name to reflect the number of Restricted Stock Units awarded to you as well as any additional Restricted Stock Units credited as a result of Dividend Equivalents. The Account will be administered as follows:

(a)            The Account is for recordkeeping purposes only, and no assets or other amounts shall be set aside from the Company’s general assets with respect to such Account.

(b)            As of each record date with respect to which a cash dividend is to be paid with respect to shares of Company common stock par value US$.01 per share (“Stock”), the Company will credit your Account with an equivalent amount of Restricted Stock Units determined by dividing the value of the cash dividend that would have been paid on your Restricted Stock Units if they had been shares of Stock, divided by the value of Stock on such date.

(c)            If dividends are paid in the form of shares of Stock rather than cash, then your Account will be credited with one additional Restricted Stock Unit for each share of Stock that would have been received as a dividend had your outstanding Restricted Stock Units been shares of Stock.

 

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(d)            Additional Restricted Stock Units credited via Dividend Equivalents shall vest or be forfeited at the same time as the Restricted Stock Units to which they relate.

3.            Restricted Period. The period prior to the vesting date with respect each Restricted Stock Unit is referred to as the “Restricted Period.” Subject to the provisions of the Plan and this Agreement, unless vested or forfeited earlier as described in Section 4, 5, 6 or 7 of this Agreement, as applicable, your Restricted Stock Units will become vested and be settled as described in Section 8 below, as of the vesting date or dates indicated in the introduction to this Agreement, provided the performance goal in this Section 3 (“Performance Goal”) is satisfied as of the end of the applicable performance period. The Performance Goal will be established and certified by the Committee and cover one or more Company performance goals over the course of the second half of the Company’s 2015 fiscal year. If the Performance Goal is not attained as of the end of this performance period, the Restricted Stock Units awarded hereunder shall be thereupon forfeited.

4.            Disability or Death. If during the Restricted Period you have a Termination of Service by reason of Disability or death, then the Restricted Stock Units will become fully vested as of the date of your Termination of Service and the Vesting Date shall become the date of your Termination of Service. Any Restricted Stock Units becoming vested by reason of your Termination of Service by reason of Disability or death shall be settled as provided in Section 8.

5.            Retirement. If during the Restricted Period you have a Termination of Service by reason of retirement from the Company’s Board of Directors, as reasonably determined by the Committee, then, subject to satisfaction of the Performance Goal, the Restricted Stock Units will become fully vested as of the later of the end of the performance period for the Performance Goal and the date of your Termination of Service, and the Vesting Date shall become that date of full vesting. Any Restricted Stock Units becoming vested by reason of your retirement shall be settled as provided in Section 8.

6.            Termination of Service Following a Change in Control. If during the Restricted Period there is a Change in Control of the Company and within the one-year period thereafter you have a Termination of Service initiated by your Employer other than for Cause (as defined in Section 7), then your Restricted Stock Units shall become fully vested, and they shall be settled in accordance with Section 9. For purposes of this Section 6, a Termination of Service initiated by your Employer shall include a Termination of Employment for Good Reason under - and pursuant to the terms and conditions of – the Walgreens Boots Alliance, Inc. Executive Severance and Change in Control Plan, but only to the extent applicable to you as an eligible participant in such Plan.

7.            Other Termination of Service. If during the Restricted Period you have a voluntary or involuntary Termination of Service for any reason other than as set forth in Section 4, 5 or 6 above or Section 9 below, as determined by the Committee, then you shall thereupon forfeit any Restricted Stock Units that are still in a Restricted Period on your termination date. For purposes of this Agreement, “Cause” means any one or more of the following, as determined by the Committee in its sole discretion:

(a)            your commission of a felony or any crime of moral turpitude;

(b)            your dishonesty or material violation of standards of integrity in the course of fulfilling your duties to the Company or any Affiliate;

 

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(c)            your material violation of a material written policy of the Company or any Affiliate violation of which is grounds for immediate termination;

(d)            your willful and deliberate failure to perform your duties to the Company or any Affiliate in any material respect, after reasonable notice of such failure and an opportunity to correct it; or

(e)            your failure to comply in any material respect with the United States (“U.S.”) Foreign Corrupt Practices Act, the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the U.S. Sarbanes-Oxley Act of 2002, the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the U.S. Truth in Negotiations Act, or any rules or regulations thereunder.

8.            Settlement of Vested Restricted Stock Units. Subject to the requirements of Section 13 below, as promptly as practicable after the applicable Vesting Date, whether occurring upon your Separation from Service or otherwise, but in no event later than 75 days after the Vesting Date, the Company shall transfer to you one share of Stock for each Restricted Stock Unit becoming vested at such time, net of any applicable tax withholding requirements in accordance with Section 10 below; provided, however, that, if you are a Specified Employee at the time of Separation from Service, then to the extent your Restricted Stock Units are deferred compensation subject to Section 409A of the Code, settlement of which is triggered by your Separation from Service (other than for death), payment shall not be made until the date which is six months after your Separation from Service.

Notwithstanding the foregoing, if you are resident or employed outside of the U.S., the Company, in its sole discretion, may provide for the settlement of the Restricted Stock Units in the form of:

(a)            a cash payment (in an amount equal to the Fair Market Value of the Stock that corresponds with the number of vested Restricted Stock Units) to the extent that settlement in shares of Stock (i) is prohibited under local law, (ii) would require you, the Company or an Affiliate to obtain the approval of any governmental or regulatory body in your country of residence (or country of employment, if different), (iii) would result in adverse tax consequences for you, the Company or an Affiliate or (iv) is administratively burdensome; or

(b)            shares of Stock, but require you to sell such shares of Stock immediately or within a specified period following your Termination of Service (in which case, you hereby agree that the Company shall have the authority to issue sale instructions in relation to such shares of Stock on your behalf).

9.            Settlement Following Change in Control. Notwithstanding any provision of this Agreement to the contrary, the Company may, in its sole discretion, fulfill its obligation with respect to all or any portion of the Restricted Stock Units that become vested in accordance with Section 6 above, by:

(a)            delivery of (i) the number of shares of Stock that corresponds with the number of Restricted Stock Units that have become vested or (ii) such other ownership interest as such shares of Stock that correspond with the vested Restricted Stock Units may be converted into by virtue of the Change in Control transaction;

 

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(b)            payment of cash in an amount equal to the Fair Market Value of the Stock that corresponds with the number of vested Restricted Stock Units at that time; or

(c)            delivery of any combination of shares of Stock (or other converted ownership interest) and cash having an aggregate Fair Market Value equal to the Fair Market Value of the Stock that corresponds with the number of Restricted Stock Units that have become vested at that time.

Settlement shall be made as soon as practical after the Restricted Stock Units become fully vested under Section 6, but in no event later than 30 days after such date.

10.            Responsibility for Taxes; Tax Withholding.

(a)            You acknowledge that, regardless of any action taken by the Company or your Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you ("Tax-Related Items"), is and remains your responsibility and may exceed the amount actually withheld by the Company or your Employer. You further acknowledge that the Company and/or your Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of shares of Stock acquired pursuant to such settlement and the receipt of any Dividend Equivalents and/or dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company and/or your Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)            Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or your Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company, your Employer or its agent to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (i) withholding from your wages or other cash compensation paid to you by the Company and/or your Employer; (ii) withholding from proceeds of the sale of shares of Stock acquired upon settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or (iii) withholding from the shares of Stock to be delivered upon settlement of the Award that number of shares of Stock having a Fair Market Value equal to (but not in excess of) the minimum amount required by law to be withheld.

Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable statutory minimum withholding rates (as determined by the Company in good faith and in its sole discretion) or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the share equivalent. If the obligation for Tax-Related Items is satisfied by withholding from the shares of Stock to be delivered upon settlement of the Award, for tax purposes, you are deemed to have been issued the full number of shares of Stock subject to the vested Award, notwithstanding that a number of the shares of Stock are held back solely for the purpose of paying the Tax-Related Items.

 

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You agree to pay to the Company or your Employer any amount of Tax-Related Items that the Company or your Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares of Stock (or cash payment) or the proceeds from the sale of shares of Stock if you fail to comply with your obligations in connection with the Tax-Related Items.

11.            Nontransferability. During the Restricted Period and thereafter until Stock is transferred to you in settlement thereof, you may not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Restricted Stock Units whether voluntarily or involuntarily or by operation of law, other than by beneficiary designation effective upon your death, or by will or by the laws of intestacy.

12.            Rights as Shareholder. You shall have no rights as a shareholder of the Company with respect to the Restricted Stock Units until such time as a certificate of stock for the Stock issued in settlement of such Restricted Stock Units has been issued to you or such shares of Stock have been recorded in your name in book entry form. Until that time, you shall not have any voting rights with respect to the Restricted Stock Units. Except as provided in Section 9 above, no adjustment shall be made for dividends or distributions or other rights with respect to such shares for which the record date is prior to the date on which you become the holder of record thereof. Anything herein to the contrary notwithstanding, if a law or any regulation of the U.S. Securities and Exchange Commission or of any other body having jurisdiction shall require the Company or you to take any action before shares of Stock can be delivered to you hereunder, then the date of delivery of such shares may be delayed accordingly.

13.            Securities Laws. If a Registration Statement under the U.S. Securities Act of 1933, as amended, is not in effect with respect to the shares of Stock to be delivered pursuant to this Agreement, you hereby represent that you are acquiring the shares of Stock for investment and with no present intention of selling or transferring them and that you will not sell or otherwise transfer the shares except in compliance with all applicable securities laws and requirements of any stock exchange on which the shares of Stock may then be listed.

14.            Not a Public Offering. If you are resident outside the U.S., the grant of the Restricted Stock Units is not intended to be a public offering of securities in your country of residence (or country of employment, if different). The Company has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and the grant of the Restricted Stock Units is not subject to the supervision of the local securities authorities.

15.            Insider Trading/Market Abuse Laws. Your country of residence may have insider trading and/or market abuse laws that may affect your ability to acquire or sell shares of Stock under the Plan during such times you are considered to have “inside information” (as defined in the laws in your country). These laws may be the same or different from any Company insider trading policy. You acknowledge that it is your responsibility to be informed of and compliant with such regulations, and you are advised to speak to your personal advisor on this matter.

 

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16.            Repatriation; Compliance with Law. If you are resident or employed outside the U.S., as a condition of the Award, you agree to repatriate all payments attributable to the shares of Stock and/or cash acquired under the Plan in accordance with applicable foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you agree to take any and all actions, and consent to any and all actions taken by the Company and its Affiliates, as may be required to allow the Company and its Affiliates to comply with local laws, rules and/or regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal obligations under local laws, rules and/or regulations in your country of residence and country of employment, if different).

17.            No Advice Regarding Grant. No employee of the Company is permitted to advise you regarding your participation in the Plan or your acquisition or sale of the shares of Stock underlying the Restricted Stock Units. You are hereby advised to consult with your own personal tax, legal and financial advisors before taking any action related to the Plan.

18.            Change in Stock. In the event of any change in Stock, by reason of any stock dividend, recapitalization, reorganization, split-up, merger, consolidation, exchange of shares, or of any similar change affecting Stock, the number of Restricted Stock Units subject to this Agreement shall be equitably adjusted by the Committee.

19.            Nature of the Award. In accepting the Award, you acknowledge, understand and agree that:

(a)            the Plan is established voluntarily by the Company, it is discretionary in nature and limited in duration, and it may be modified, amended, suspended or terminated by the Company, in its sole discretion, at any time;

(b)            the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

(c)            all decisions with respect to future Awards or other grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of the Award, the number of shares subject to the Award, and the vesting provisions applicable to the Award;

(d)            the Award and your participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company or any Affiliate and shall not interfere with the ability of the Company, your Employer or an Affiliate, as applicable, to terminate your employment or service relationship;

(e)            you are voluntarily participating in the Plan;

(f)             the Award and the shares of Stock subject to the Award are not intended to replace any pension rights or compensation;

(g)            the Award, the shares of Stock subject to the Award and the value of same, is an extraordinary item of compensation outside the scope of your employment (and employment contract, if any) and is not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

 

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(h)            the future value of the shares of Stock underlying the Award is unknown, indeterminable and cannot be predicted with certainty;

(i)              unless otherwise determined by the Committee in its sole discretion, a Termination of Service shall be effective from the date on which active employment or service ends and shall not be extended by any statutory or common law notice of termination period;

(j)              no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from a Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of the Award to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, your Employer or any Affiliate, waive your ability, if any, to bring any such claim, and release the Company, the Employer and all Affiliates from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim;

(k)             unless otherwise provided herein, in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of Stock of the Company; and

(l)              neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. dollar that may affect the value of the Award or of any amounts due to you pursuant to the settlement of the Award or the subsequent sale of any shares of Stock acquired upon settlement of the Award.

20.            Committee Authority; Recoupment. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, including the enforcement of any recoupment policy, all of which shall be binding upon you and any claimant. Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.

21.            Consent to Collection/Processing/Transfer of Personal Data. Pursuant to applicable personal data protection laws, the Company hereby notifies you of the following in relation to your personal data and the collection, processing and transfer of such data in relation to the Company's grant of the Restricted Stock Units and your participation in the Plan. The collection, processing and transfer of personal data is necessary for the Company’s administration of the Plan and your participation in the Plan, and your denial and/or objection to the collection, processing and transfer of personal data may affect your participation in the Plan. As such, you voluntarily acknowledge and consent (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein:

 

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(a)            The Company and your Employer hold certain personal information about you, including (but not limited to) your name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company, details of all entitlements to shares of Stock awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan ("Data"). The Data may be provided by you or collected, where lawful, from the Company, its Affiliates and/or third parties, and the Company and your Employer will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan. The Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence (or country of employment, if different). Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. Data will be accessible within the organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the participation in the Plan.

(b)            The Company and your Employer will transfer Data internally as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company and/or your Employer may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. You hereby authorize (where required under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, as may be required for the administration of the Plan and/or the subsequent holding of the shares of Stock on your behalf, to a broker or other third party with whom you may elect to deposit any shares of Stock acquired pursuant to the Plan.

(c)            You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the right to (i) obtain confirmation as to the existence of the Data, (ii) verify the content, origin and accuracy of the Data, (iii) request the integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data, (iv) oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and your participation in the Plan, and (v) withdraw your consent to the collection, processing or transfer of Data as provided hereunder (in which case, your Restricted Stock Units will become null and void). You may seek to exercise these rights by contacting your Human Resources manager or the Company's Human Resources Department, who may direct the matter to the applicable Company privacy official.

22.            Addendum to Agreement. Notwithstanding any provision of this Agreement to the contrary, the Restricted Stock Units shall be subject to any special terms and conditions for your country of residence (and country of employment, if different) as set forth in the addendum to the Agreement, attached hereto as Exhibit A (the “Addendum”). Further, if you transfer your residence and/or employment to another country reflected in the Addendum, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). The Addendum shall constitute part of this Agreement.

 

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23.            Additional Requirements. The Company reserves the right to impose other requirements on the Restricted Stock Units, any shares of Stock acquired pursuant to the Restricted Stock Units and your participation in the Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

24.            Amendment or Modification, Waiver. Except as set forth in the Plan, no provision of this Agreement may be amended or waived unless the amendment or waiver is agreed to in writing, signed by you and by a duly authorized officer of the Company. No waiver of any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.

25.            Electronic Delivery. The Company may, in its sole discretion, deliver by electronic means any documents related to the Award or your future participation in the Plan. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

26.            Governing Law and Jurisdiction. This Agreement is governed by the substantive and procedural laws of the state of Illinois. You and the Company shall submit to the exclusive jurisdiction of, and venue in, the courts in Illinois in any dispute relating to this Agreement without regard to any choice of law rules thereof which might apply the laws of any other jurisdictions.

27.            English Language. If you are resident in a country where English is not an official language, you acknowledge and agree that it is your express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Award, be drawn up in English. If you have received this Agreement, the Plan or any other documents related to the Award translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

28.            Conformity with Applicable Law. If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

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29.            Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon your death, acquire any rights hereunder.

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This Agreement contains highly sensitive and confidential information. Please handle it accordingly.

Please read the attached Exhibit A. Once you have read and understood this Agreement and Exhibit A, please click the acceptance box to certify and confirm your agreement to be bound by the terms and conditions of this Agreement and Exhibit A, and to acknowledge your receipt of the Prospectus, the Plan and this Agreement and your acceptance of the terms and conditions of the Award granted hereunder.

 

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EXHIBIT A

ADDENDUM TO THE

WALGREENS BOOTS ALLIANCE, INC. 2013 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

In addition to the terms of the Plan and the Agreement, the Award is subject to the following additional terms and conditions to the extent you reside and/or are employed in one of the countries addressed herein. Pursuant to Section 22 of the Agreement, if you transfer your residence and/or employment to another country reflected in this Addendum, the additional terms and conditions for such country (if any) will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Company may establish alternative terms as may be necessary or advisable to accommodate your transfer). All defined terms contained in this Addendum shall have the same meaning as set forth in the Plan and the Agreement.

FRANCE

Use of English Language. You acknowledge that it is your express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Vous reconnaissez avoir expressément exigé la rédaction en anglais de la présente Convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaires intentées, directement ou indirectement, relatifs à, ou suite à, la présente Convention.

MEXICO

1.            Commercial Relationship. You expressly recognize that your participation in the Plan and the Company’s grant of Restricted Stock Units does not constitute an employment relationship between you and the Company. You have been granted the Restricted Stock Units as a consequence of the commercial relationship between the Company and the Affiliate in Mexico that employs you, and the Company’s Affiliate in Mexico is your sole employer. Based on the foregoing, you expressly recognize that (a) the Plan and the benefits you may derive from your participation in the Plan does not establish any rights between you and the Company’s Affiliate in Mexico that employs you, (b) the Plan and the benefits you may derive from your participation in the Plan are not part of the employment conditions and/or benefits provided by the Company’s Affiliate in Mexico that employs you, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with the Company’s Affiliate in Mexico that employs you.

2.            Extraordinary Item of Compensation. You expressly recognize and acknowledge that your participation in the Plan is a result of the discretionary and unilateral decision of the Company, as well as your free and voluntary decision to participate in the Plan in accordance with the terms and conditions of the Plan, the Agreement and this Addendum. As such, you acknowledge and agree that the Company, in its sole discretion, may amend and/or discontinue your participation in the Plan at any time and without any liability. The Award, the shares of Stock subject to the Award and the value of same is an extraordinary item of compensation outside the scope of your employment contract, if any, and is not part of your regular or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any similar payments, which are the exclusive obligations of the Company’s Affiliate in Mexico that employs you.

 

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MONACO

Use of English Language. You acknowledge that it is your express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Vous reconnaissez avoir expressément exigé la rédaction en anglais de la présente Convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaires intentées, directement ou indirectement, relatifs à, ou suite à, la présente Convention.

NETHERLANDS

Exclusion of Claim. You acknowledge and agree that you will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from your ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of your Termination of Service (whether such termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the grant of Restricted Stock Units, you shall be deemed irrevocably to have waived any such entitlement.

SPAIN

1.            Acknowledgement of Discretionary Nature of the Plan; No Vested Rights. This provision supplements the terms of the Agreement:

In accepting the Award, you acknowledge that you consent to participation in the Plan and have received a copy of the Plan.

You understand that the Company has unilaterally, gratuitously and in its sole discretion granted Restricted Stock Units under the Plan to individuals who may be employees of the Company or its Affiliates throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Affiliates on an ongoing basis. Consequently, you understand that the Restricted Stock Units are granted on the assumption and condition that the Restricted Stock Units and the shares of Stock acquired upon settlement of the Restricted Stock Units shall not become a part of any employment contract (either with the Company or any of its Affiliates) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, you understand that this grant would not be made to you but for the assumptions and conditions referenced above; thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, the Award shall be null and void.

Further, you understand and agree that the vesting of the Restricted Stock Units is expressly conditioned on your continued and active rendering of service, such that upon a Termination of Service, the Restricted Stock Units may cease vesting immediately, in whole or in part, effective on the date of your Termination of Service (unless otherwise specifically provided in Section 4, 5 or 6 of the Agreement). This will be the case, for example, even if (a) you are considered to be unfairly dismissed without good cause; (b) you are dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) you terminate service due to a change of work location, duties or any other employment or contractual condition, (d) you terminate service due to a unilateral breach of contract by the Company or an Affiliate. Consequently, upon a Termination of Service for any of the above reasons, you may automatically lose any rights to Restricted Stock Units that were not vested on the date of your Termination of Service, as described in the Plan and Agreement.

 

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(ORSU15)

You acknowledge that you have read and specifically accept the conditions referred to in the Agreement regarding the impact of a Termination of Service on your Award.

2.            Termination for Cause. “Cause” shall be defined as indicated in Section 7 of the Agreement, irrespective of whether the termination is or is not considered a fair termination (i.e., “despido procedente”) under Spanish legislation.

UNITED KINGDOM

1.            Responsibility for Taxes; Tax Withholding. The following provision supplements Section 10 of the Agreement:

If payment or withholding of the income tax due in connection with the Award is not made within ninety (90) days after the end of the U.K. tax year in which the event giving rise to the income tax liability occurred or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the “Due Date”), the amount of any uncollected income tax shall constitute a loan owed by you to your Employer, effective as of the Due Date. You agree that the loan will bear interest at the then-current official rate of Her Majesty’s Revenue & Customs (“HMRC”), it shall be immediately due and repayable, and the Company or Employer may recover it at any time thereafter by any of the means referred to in Section 10 of the Agreement. Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), will not be eligible for a loan to cover the income tax liability. In the event that you are a director or executive officer and the income tax is not collected from or paid by you by the Due Date, the amount of any uncollected income tax may constitute a benefit to you on which additional income tax and national insurance contributions (“NICs”) will be payable. You will be responsible for paying and reporting any income tax due on this additional benefit directly to HMRC under the self-assessment regime, and for reimbursing the Company or your Employer (as applicable) the value of any employee NICs due on this additional benefit.

2.            Exclusion of Claim. You acknowledge and agree that you will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from your ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of your Termination of Service (whether such termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the grant of Restricted Stock Units, you shall be deemed irrevocably to have waived any such entitlement.

***   ***   ***   ***   ***

 

13

(ORSU15)

By clicking the acceptance box for this grant agreement, I acknowledge receipt of the Restricted Stock Unit Award Agreement to which this Addendum is attached as Exhibit A, and I agree to the terms and conditions expressed in this Addendum.

 

 

14EXHIBIT 10.11

 

RULES OF THE

ALLIANCE BOOTS 2012 LONG TERM INCENTIVE PLAN

(Adopted by the Board of

AB Acquisitions UK Topco Limited

on 22 May 2013)

(Amended by the Board of

AB Acquisitions UK Topco Limited

on 24 December 2014)

ALLEN & OVERY

Allen & Overy LLP

 

CONTENTS

	
Clause

	 	
Page

	 	 	 
	
1.

	
Definitions and interpretation

	
1

	
2.

	
Grant of Awards

	
1

	
3.

	
Conditions

	
2

	
4.

	
Vesting of Awards

	
3

	
5.

	
Lapse of Awards

	
6

	
6.

	
Consequences of Vesting

	
7

	
7.

	
Adjustment of Awards

	
8

	
8.

	
Administration

	
8

	
9.

	
Amendment

	
9

	
10.

	
General

	
10

	
11.

	
Governing Law

	
12

Appendices

	
1.

	
Definitions

	
13

	
2.

	
Phantom Awards

	
17

 

	1.	DEFINITIONS AND INTERPRETATION

	1.1	Definitions

The words and expressions used in the Rules which have initial capital letters have the meanings set out in Appendix 1.

	1.2	Interpretation

The headings in the Rules are for convenience and should be ignored when construing the Rules. Unless the context requires otherwise, words in the singular are deemed to include the plural and vice versa and words implying either gender are deemed to include both genders.

Reference in the Rules to any statutory provisions are to those provisions as amended or re-enacted from time to time, and include any regulations or other subordinate legislation made under them.

	2.	GRANT OF AWARDS

	2.1	Operation of the Plan

The Board will, from time to time, set the policies for the Company's operation and administration of the Plan within the terms of the Rules. The policies may include the determination of:

		(a)	the Eligible Employees who may be granted Awards;

		(b)	the value, at its Date of Grant, of an Eligible Employee's Award;

		(c)	what performance condition(s) (if any) will apply to the vesting of an Award or Part of an Award and how the performance condition(s) will be measured; and

		(d)	how Awards are granted.

	2.2	Eligible Employees

An Eligible Employee may be recommended from time to time for the grant of an Award. The grant of an Award to an Eligible Employee does not create any right or expectation of the grant of a further Award in the future.

	2.3	Grant of Awards

The Board will determine:

		(i)	which Eligible Employees will be granted Awards under the Plan; and

		(ii)	the value of an Award at its Date of Grant.

An Award will be granted so that it constitutes a binding agreement between the Participant and the Company. A single deed of grant may be executed in favour of any number of Participants. There will be no payment for the grant of an Award. The first Awards granted under the Plan will be granted to take effect from 1 August 2012.

 

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	2.4	When Awards can be granted

Awards may be granted at any time that the Board determines appropriate, but subject always to any restrictions imposed by any applicable statute, order or regulation. No Award can be granted after the Plan Period.

	2.5	Approvals and consents

The grant of an Award will be subject to obtaining any approval or consent required under any applicable regulations or enactments.

	2.6	Notification of grant

A Participant will be notified of the grant of an Award and be advised of the Date of Grant, the number of Shares under the Share Part of the Award, the condition to which any Part of the Award is subject (or when those conditions will be set) and the Performance Period of the Award. Participants may also be advised where the information relating to their Awards can be accessed or obtained electronically.

	2.7	Awards personal to Participants

An Award is personal to the Participant to whom it is granted and may not, nor may any rights in respect of it, be transferred, assigned, charged or otherwise disposed of to any person except that, on the death of a Participant, an Award may be transmitted to the Participant's personal representatives. The grant of an Award is confidential to a Participant and may not be disclosed to any person other than the Participant's spouse or legal or financial adviser or to comply with any applicable laws or regulations.

	2.8	Disclaimer of Awards

A Participant may disclaim all or part of an Award by notice in writing to the Grantor within 30 days after the Date of Grant. No consideration will be paid for the disclaimer of the Award. To the extent that an Award is disclaimed, it will be treated for all purposes as never having been granted.

	3.	CONDITIONS

	3.1	General

Each Part of an Award will, unless the Board decides otherwise, be subject to a condition selected by the Board which will normally have to be met before the relevant Part of the Award can vest. Any condition:

		(a)	must be stated in writing either at the Date of Grant or any later date determined by the Board;

		(b)	may be amended or substituted if one or more events occur which cause the Board to consider that an amended or substituted condition would be more appropriate; and

		(c)	may be waived if anything happens which causes the Board reasonably to consider that it should be waived.

 

2

	3.2	Group Target

The Group Target Part of an Award will be subject to a performance condition based on the trading profit performance of the Group excluding profits and costs directly attributed to the synergy programme (the TP Target), for each of the years (or other shorter periods) comprised in the Performance Period of the Award (with the first Performance Period commencing 1 April 2012). Such percentage of the value of the Group Target Part as is determined by the Board will be subject to the TP Target for any year (or other period) in the Performance Period. As soon as reasonably practicable following:

		(a)	the start of any year in the Performance Period the Board will determine the TP Target for that year; and

		(b)	the end of the any year (or other period) in the Performance Period the Remuneration Committee will determine whether the TP Target for that year (or other period) has been met and whether that element of the Group Target Part of an Award allocated to that year (or other period) will vest on the Normal Vesting Date.

	3.3	Synergy Target

The Synergy Target Part of an Award will be subject to a performance condition based on the synergy targets set for each year (or other shorter periods) (the Synergy Target), comprised in the Performance Period of the Award. Such percentage of the value of the Synergy Target Part of an Award as is determined by the Board will be subject to the Synergy Target for any year (or other period) in the Performance Period. As soon as reasonable practicable following:

		(a)	the start of any year in the Performance Period the Board will determine the Synergy Target for that year; and

		(b)	the end of any year (or other period) in the Performance Period the Board will determine whether the Synergy Target for that year (or other period) has been met and whether that element of the Synergy Target Part of an Award allocated to that year (or other period) will vest on the Normal Vesting Date.

	3.4	Share Part

Notwithstanding any other Rule the Share Part of an Award will only vest:

		(a)	if the Participant remains in Employment on the date of the Second Step Acquisition; or

		(b)	pursuant to Rule 4.5 (Death).

	3.5	No Re-testing

There will be no re-testing of the condition applicable to any Part of an Award.

	4.	VESTING OF AWARDS

	4.1	Normal rule for vesting

Subject to Rule 4.9 and except as otherwise provided in this Rule 4 and in Rule 5, an Award will vest:

		(a)	in respect of the Group Target Part and the Synergy Target Part on the earlier of:

 

3

		(i)	its Normal Vesting Date; and

	 	
(ii)

	
the day immediately before the date of the Second Step Acquisition; and

		(b)	in respect of the Share Part only on the day immediately before the date of the Second Step Acquisition,

provided that, in each case, the Participant is then in Employment and subject to the additional vesting conditions in Rules 6.1 and 6.2. A Participant's Award will not vest under this Rule 4 if, at the time it would otherwise have vested, the Participant has been suspended from Employment pending an investigation under the disciplinary procedures applicable to the Participant. The Award may vest, subject to the Rules, following the resolution and dependent on the outcome of the disciplinary procedures.

	4.2	Vesting following ceasing to be in Employment (Good Leaver)

Subject to Rules 4.9, 4.10 and 5, if a Participant ceases to be in Employment before an Award has vested due to:

		(a)	disability, ill health or injury;

		(b)	Retirement;

		(c)	Redundancy;

		(d)	the company which employs the Participant ceasing to be a Group Company;

		(e)	the transfer or sale of the undertaking or part-undertaking in which the Participant is employed to a person who is not a Group Company; or

		(f)	any other circumstances determined by the Board,

the Share Part of the Participant's Award(s) will, unless the Board, in its absolute discretion, determines otherwise, be forfeited in its entirety and the Group Target Part and the Synergy Target Part may, at the discretion of the Board, vest either on the Normal Vesting Date or immediately on the Participant ceasing to be in Employment, provided that to the extent Vested, a US Award will be payable only with respect to the Normal Vesting Date or, if the Participant ceases to be in Employment after the Second Step Acquisition, on the first anniversary of the Second Step Acquisition. If the Board determines that the Share Part of a Participant’s Award(s) will not be forfeited it may impose any condition(s) on the continuance of the Share Part that it deems appropriate.

	4.3	Cessation of Employment in other circumstances

If a Participant ceases to be in Employment in any circumstances other than those referred to in Rule 4.2 or 4.5 the Participant's Award(s) will not vest and will lapse on the Participant ceasing to be in Employment.

	4.4	Pregnancy

For the purposes of Rules 4.2 and 5, a Participant who leaves Employment because of pregnancy will cease Employment on the date on which she indicates either that she does not intend to return to work or that she will not be returning to work. If the Participant gives no indication, she will cease Employment on the date specified under any applicable law or in the terms of her Employment, if she has not then returned to work.

 

4

	4.5	Death

If a Participant dies:

(a) the Group Target Part and the Synergy Target Part of the Award(s) held by the Participant will, subject to Rules 4.9 and 4.10, vest on the date of death; and

(b) the Share Part of the Award(s) may vest to the extent determined by the Board,

and any consequent cash and Shares will be transferred to the Participant's personal representatives.

	4.6	Corporate transactions

Subject to Rules 4.9, 4.10 and 5 the Group Target Part and the Synergy Target Part (but not the Share Part) of an Award will vest on the date:

		(a)	Takeover: on which an offeror (together with others, if any, acting in concert with the offeror) obtains Control of the Company as a result of (i) making a general offer to acquire all of the issued ordinary shares of the Company or all of the shares of the Company which are of the same class as the Shares and which, in either case, are not at the time owned by the offeror or any company Controlled by the offeror and/or persons acting in concert with the offeror; or (ii) obtaining Control of the Parent or ultimate holding company of the Company as a result of making a general offer to acquire all of the issued ordinary shares of the relevant company;

		(b)	Section 979 notice: a person first becomes bound or entitled to acquire Shares under sections 979 to 982 of the Companies Act 2006, or would be so entitled but for the fact that there were no dissenting shareholders; and

		(c)	Compromise or arrangement under section 899: when the court sanctions a compromise or arrangement between the Company and its shareholders under section 899 of the Companies Act 2006.

	4.7	Reorganisation

Other than in the event of the Second Step Acquisition, if a company (the Successor Company) has obtained Control of the Company, and the shareholders of the Successor Company immediately after it has obtained Control are substantially the same as the shareholders of the Company immediately before that event Awards will not vest pursuant to Rule 4.6 but will continue unaffected.

	4.8	Winding up

Subject to Rules 4.9, 4.10 and 5, 5 the Group Target Part and the Synergy Target Part (but not the Share Part) of an Award will vest:

		(a)	immediately before the passing of a resolution for the voluntary winding-up of the Company; or

		(b)	on the Court making an order for the winding-up of the Company.

 

5

This Rule 4.8 will not apply where the winding-up in either case is for the purpose of a reconstruction or amalgamation.

	4.9	Conditions

An Award will only vest under Rules 4.1, 4.2, 4.5, 4.6 or 4.8 if, and to the extent that, the conditions imposed under Rule 3 have been satisfied at the date of the relevant event, or any earlier date determined by the Board, unless those conditions are waived pursuant to Rule 3.1(c). Where the Board is required to determine the extent of vesting of an Award following the occurrence of an event under which the Award vests before its Normal Vesting Date, the Board will be as constituted before the occurrence of the relevant event.

	4.10	Pro rata reduction

The number of Shares in respect of which the Share Part of an Award will vest pursuant to Rules 4.2, 4.5 and 4.6, will be reduced on a pro rata basis to take account of the time that has elapsed between the Date of Grant and the date of the relevant event as a proportion of the period between the Date of Grant and the expiry of the Performance Period. However, the Board will have discretion to determine that an Award will vest as to either a greater or lesser number of Shares than it would otherwise have done pursuant to this Rule 4.10 if it believes that there are circumstances that warrant such a determination.

	4.11	Reduction of number of Shares subject to an Award

If, subsequent to the grant of an Award, facts become known to the Board which, in its opinion, would justify a reduction in the value of an Award, the Board can reduce the cash payable and/or the number of Shares subject to the Award to take account of this. If the Board exercises its discretion under this Rule 4.11, it will confirm this in writing to the affected Participant and, if necessary, the Trustee. For the avoidance of doubt:

		(a)	if the Board exercises this discretion, the Award will be deemed to have been granted over the lower cash amount and/or number of Shares and the vesting of the Award in accordance with the Rules will be by reference to this reduced cash amount and number of Shares; and

		(b)	the discretion under this Rule 4.11 will only be capable of exercise by the Board if there has been no change of Control of the Company. However, if, as a result of any change of Control, the Company has a new holding company which immediately after the change of Control has substantially the same shareholders and proportionate shareholdings as the Company did before, the discretion under this Rule 4.11 will be capable of exercise by the remuneration committee of the board of directors of the new holding company.

	5.	LAPSE OF AWARDS

	5.1	Lapse of Awards

An Award will lapse on the earliest of:

		(a)	the date on which a Participant ceases to be in Employment in any circumstances other than those referred to in Rules 4.2 and Rule 4.5;

		(b)	the Participant being deprived of the legal or beneficial ownership of the Award by operation of law, or doing or omitting to do anything which causes him to be so deprived or being declared bankrupt; or

 

6

		(c)	the Participant breaching or attempting to breach Rule 2.7.

	5.2	Lapse where no or partial vesting

Where, as a result of the application of Rules 3 or 4.9, an Award has not vested or has only vested in part, the part of the Award that has not vested will lapse immediately.

	6.	CONSEQUENCES OF VESTING

	6.1	Consequences of vesting of Awards

Subject to the remainder of this Rule 6 and Rule 10.7, the cash and/or Shares subject to any Part of an Award in respect of which that Part of the Award has vested in accordance with Rule 4.1 will be paid or delivered, as appropriate, to the Participant (or the Participant's nominee) within 30 days following the date of vesting of that Part of an Award. For a US Award, to the extent of vesting under section 4.6 or 4.8, the portion of such Award that has vested will be paid or delivered within 30 days of such date if the event triggering vesting constitutes a Change in Control as defined in section 409A of the US Code or a liquidation event, in either case allowing for a termination of all US Awards for purposes of Treas. Reg. 1.409A-3(j)(4)(ix) (or a successor provision), or, in all other circumstances, within 30 days of Normal Vesting Date.

	6.2	Vesting of Group Target Part and Synergy Target Part following the Second Step Acquisition

If the Group Target Part and Synergy Target Part of an Award vest as a consequence of the Second Step Acquisition one third of the cash in respect of which each of those Parts has vested will be deferred and become payable on the first anniversary of the Second Step Acquisition, provided the relevant Participant remains in Employment on that date. For Awards other than US Awards the amount of cash deferred may be paid earlier, at the discretion of the Board, if the Participant ceases to be employed in any of the circumstances specified in Rule 4.2 before the due date for payment.

	6.3	Delivery of net number of Shares

Before the vesting of the Share Part of an Award the Company may determine to reduce the number of Shares in respect of which that Part of the Award will vest by a number that has a value at least (in its estimation) equal to the liability of the Participant to any income tax and social contributions that would have arisen in connection with the vesting of the Share Part of the Award, so that the Award becomes an entitlement to receive both the reduced number of Shares and a cash amount (the Cash Amount) equal to the value of the number of Shares by which the Share Part of the Award is reduced (the Adjusted Award) and procure that the relevant Group Company) applies such of the Cash Amount as is necessary in making a payment directly to the relevant taxing authority to discharge the liability of the Participant to income tax and social security contributions that arises as a result of the vesting of the Adjusted Award (with any surplus cash being returned to the Participant).

This Rule 6.3 will not apply to Awards made in any jurisdiction where the application of this Rule would cause:

		(a)	the grant of the Award to be unlawful or for it to fall outside any applicable securities law exemption; or

		(b)	adverse tax consequences for the Participant and/or any Group Company.

 

7

	6.4	Satisfaction of Share Part in cash

Subject to Rule 10.7, the Company may, following the vesting of the Share Part of an Award, make a cash payment equal to the Market Value of the Shares in respect of which the Award had vested in lieu of the Participant's right to receive Shares pursuant to Rule 6.1.

	6.5	Consents

The delivery of any Shares or cash under the Plan will be subject to obtaining any approval or consent required under any applicable regulations or enactment.

	6.6	Ranking of Shares

Shares acquired by a Participant under the Plan will rank equally in all respects with the Shares then in issue, except that they will not be entitled to any rights attaching to Shares by reference to a record date falling before the day on which the Participant is entered on Walgreen's register of shareholders in respect of those Shares.

	7.	ADJUSTMENT OF AWARDS

	7.1	Variation in shares

If there is a Variation, the number and/or type of Shares over which an Award is granted may be adjusted in the manner the Company determines but so that the underlying economic value of the Share Part of the Award remains unchanged.

	7.2	Notifying Participants

The Company will take any steps it considers necessary to notify Participants of any adjustments made under Rule 7.1.

	8.	ADMINISTRATION

	8.1	Administration of the Plan

The Plan will be administered by the Board. The Board has full authority, consistent with the Rules, to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt any regulations for administering the Plan and any documents it thinks necessary or appropriate. The Board’s decision on any matter concerning the Plan will be final and binding.

	8.2	Costs

The Participating Companies will bear the costs of introducing and operating the Plan (including, but not limited to, stamp duty, stamp duty reserve tax and any other costs relating to the transfer of Shares on the vesting of the Share Part of an Award) in the proportions determined by the Company. The Company may require any Participating Company to enter into an agreement which obliges that company to reimburse the Company for any costs borne by the Company, directly or indirectly, in respect of Participants who are employed by the Participating Company.

	8.3	Shares to cover Awards

The Company will ensure that sufficient Shares are available to satisfy all outstanding Awards.

 

8

	8.4	Notices

Any notice or other communication in connection with the Plan will be in writing and may be given:

		(a)	by personal delivery; or

		(b)	by sending it by post:

		(i)	in the case of a company, to its registered office or other address that it notifies in writing; and

		(ii)	in the case of an individual, to the individual's last known address or, where the individual is a director or employee of a Group Company, either to the individual's last known address or to the address of the place of business at which the individual performs the whole or substantially the whole of the duties of the individual's office or employment; or

		(c)	by sending it by email or any form of electronic transfer acceptable to the Board:

		(i)	in the case of a company, to the email address or other number or address that the company notifies; and

		(ii)	in the case of an individual, to the individual's last known email address or, where the individual is a director or employee of a Group Company, to the individual's workplace email address.

	8.5	Time of service of notice

Any notice under Rule 8.4 will be given:

		(a)	if delivered, at the time of delivery;

		(b)	if posted, at 10.00am on the second business day after it was put into the post; or

		(c)	if sent by email or any other form of electronic transfer, at the time of despatch.

In proving service of notice, it will be sufficient to prove that delivery was made or that the envelope containing it was properly addressed, prepaid and posted or that the email or other form of electronic transfer was properly addressed and despatched, as appropriate.

	8.6	Local currency equivalent

The Board may determine for any relevant jurisdiction the exchange rate between UK £ Sterling and the relevant currency to be applied where it is necessary to convert from UK £ Sterling to that currency or vice versa for the purposes of the Plan.

	9.	AMENDMENT

	9.1	Board's power to amend the Plan

Subject to the provisions of this Rule 9, the Board can at any time amend any of the provisions of the Plan in any respect.

 

9

	9.2	Participants' approval

No amendment will be made under Rule 9.1 which would abrogate or materially affect adversely the subsisting rights of a Participant unless it is made:

		(a)	with the written consent of Participants who hold Awards under the Plan to acquire 75 per cent. of the Shares which would be delivered if all of the Awards granted and subsisting under the Plan vested; or

		(b)	by a resolution of a meeting of Participants passed by not less than 75 per cent. of the Participants who attend and vote either in person or by proxy,

and, for the purposes of this Rule 9.2, the provisions of the articles of association of the Company and of the Companies Act 2006 relating to shareholder meetings will apply with the necessary changes.

	9.3	Permitted amendments

Rule 9.2 will not apply to any amendment which is:

		(a)	minor and to benefit the administration of the Plan;

		(b)	to take account of any changes in legislation; or

		(c)	to obtain or maintain favourable tax, exchange control or regulatory treatment for the Company, any Group Company or any present or future Participant.

	9.4	Overseas Eligible Employees

The Board may adopt additional sections of the Plan applicable in any jurisdiction, under which Awards may be subject to additional and/or modified terms and conditions, having regard to any securities, exchange control or taxation laws, regulations or practice which may apply to the Participant, the Company or any Group Company. Any additional section must conform to the basic principles of the Plan. Any additional section and all Awards granted under that section will be governed by and construed in accordance with the laws of England. The Plan is intended to comply with section 409A of the US Code with respect to any US Awards and should be interpreted in accordance with that intention.

	9.5	Notice of amendments

Participants will be given written notice of any material amendments to the Plan made under this Rule 9 which affect them as soon as reasonably practicable after they have been made.

	10.	GENERAL

	10.1	Termination of the Plan

The Plan will terminate at the end of the Plan Period or at any earlier time determined by the Board. Termination of the Plan will not affect Awards granted before termination.

 

10

	10.2	Funding the Plan

The Company and any Group Company may provide money to the Trustees or any other person to enable them 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 any applicable law.

	10.3	Rights of Participants and Eligible Employees

Nothing in the Plan will give any officer or employee of any Group Company any right to participate in the Plan. Participation in one grant does not imply a right to participate or be considered for participation in a later grant. The rights and obligations of any individual under the terms of his office or employment with a Group Company will not be affected by the individual's participation in the Plan nor any right which he may have to participate under it. A Participant holding an Award will not have any rights of a shareholder of Walgreens with respect to that Award or the Shares subject to it.

	10.4	No rights to compensation or damages

A Participant waives all and any rights to compensation or damages for the termination of his office or employment with a Group Company for any reason whatsoever (including unlawful termination of employment) insofar as those rights arise or may arise from his ceasing to have rights under the Plan as a result of that termination or from the loss or diminution in value of such rights or entitlements. Nothing in the Plan or in any document executed under it will give any person any right to continue in employment or will affect the right of any Group Company to terminate the employment of any Participant or Eligible Employee or any other person without liability at any time, with or without cause, or will impose on the Company, any Group Company, the Board, the Remuneration Committee or the Trustees or their respective agents and employees any liability in connection with the loss of a Participant's benefits or rights under the Plan or as a result of the exercise of a discretion under the Plan for any reason as a result of the termination of the Participant's Employment.

	10.5	The benefits of Rules 10.3 and 10.4

The benefit of Rules 10.3 and 10.4 is given to the Company, for itself and as trustee and agent of all the Group Companies. The Company will hold the benefit of these Rules on trust and as agent for each of them and may assign the benefit of this Rule 10.5 to any of them.

	10.6	Share Rights

Any Shares acquired on the exercise of Awards will be subject to the governing documents of Walgreens from time to time.

	10.7	Withholding for tax and social security contributions

Any Group Company, former Group Company or Trustee may withhold such amounts and/or make such arrangements as it considers necessary to meet any liability to taxation or social security contributions for which it or any other Group Company or former Group Company is liable to account in connection with the vesting of Awards, including the delivery of a reduced number of Shares pursuant to Rule 6.3 or the sale of Shares on behalf of a Participant, unless the Participant discharges the liability.

 

11

	10.8	Severability

The invalidity or non-enforceability of one or more provisions of the Plan will not affect the validity or enforceability of the other provisions of the Plan.

	10.9	Third parties

The Plan confers no benefit, right or expectation on an individual who is not a Participant. No third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan. Any other right or remedy which a third party may have is unaffected by this Rule 10.9.

	10.10	Data protection

All Eligible Employees agree, as a condition of their participation in the Plan, that any personal data in relation to them may be held by a Group Company and/or the Trustees and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside the European Economic Area.

	
10.11

	
Value of benefit

Any benefits received under the Plan are not pensionable. No benefit or value associated with or received in respect of an Award granted to a Participant under the Plan will be included or otherwise taken into account as part of any calculation undertaken for severance purposes.

	11.	GOVERNING LAW

These Rules will be governed by and construed in accordance with the laws of England. All Participants, the Company and any other Group Company will submit to the jurisdiction of the English courts in relation to any dispute arising under the Plan.

 

12

APPENDIX 1

DEFINITIONS

 

	
Appendix 1

	
this Appendix 1 which forms part of the Rules;

	 	 
	
Award

	
an award will be comprised of three parts, being the rights to receive:

 

(a)                a cash amount based on the achievement of performance relating to the Group excluding synergies, which will comprise approximately 50 per cent. of the value of the Award at its Date of Grant (the Group Target Part);

 

(b)               a cash amount based on the achievement of synergy targets, which will comprise approximately 25 per cent. of the value of the Award at its Date of Grant (the Synergy Target Part); and

 

(c)               a number of Shares based on continued employment with the Group to the date of the Merger, which will comprise approximately 25 per cent. of the value of the Award at its Date of Grant (the Share Part),

 

and Part of an/the Award will be construed accordingly;

	 	 
	
Board

	
the board of directors of Alliance Boots International Limited, registered in England and Wales under no. 6166738 or a duly authorised committee of that board;

	 	 
	
Company

	
AB Acquisitions UK Topco Limited, registered in England and Wales under no. 06166727;

	 	 
	
Control

	
in relation to a body corporate, the power of a person to secure:

 

(a)               by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or

 

(b)               by virtue of any power conferred by the articles of association or other document regulating that or any other body corporate,

 

that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person, and Controlled will be construed accordingly;

             

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Date of Grant

	
with respect to an Award, the date on which it is granted under Rule 2;

	 	 
	
Dealing Day

	
any day on which the New York Stock Exchange is open for the transaction of business;

	 	 
	
Eligible Employee

	
any person who, at the Date of Grant, is an employee of a Group Company;

	 	 
	
Employment

	
employment as an employee of a Group Company;

	 	 
	
Group Company

	
the Parent, and any company which is either a subsidiary undertaking of the Parent or an associate of the Parent (where subsidiary undertaking has the meaning given in section1162 of the Companies Act 2006 and associate is as defined in International Accounting Standard 28 Investments in Associates and joint ventures (as amended));

	 	 
	
Group Target Part

	
has the meaning given in the definition of Award;

	 	 
	
Market Value

	
in relation to a Share on any day means an amount equal to its middle market quotation as derived from the New York Stock Exchange;

	 	 
	
Second Step Acquisition

	
the date of completion of the Second Step Acquisition as defined in the Purchase and Option Agreement by and among Alliance Boots GmbH, AB Acquisitions Holdings Limited and Walgreen Co dated 18 June 2012. If the Second Step Acquisition does not constitute a Change in Control for the purposes of section 409A of the US Code, all US Awards will vest as otherwise provided in these Rules, but will be payable only with respect to the Normal Vesting Date;

	 	 
	
Normal Vesting Date

	
with respect to an Award means the date when the Remuneration Committee or the Board, as appropriate, determines whether the conditions applicable to the Group Target Part and the Synergy Target Part have been met for the last Financial Year of the Performance Period of the Award;

	 	 
	
Parent

	
Alliance Boots GmbH;

	 	 
	
Participant

	
an individual who has been granted an Award including, if relevant, the Participant's personal representatives;

	 	 
	
Participating Company

	
a Group Company whose Eligible Employee(s) have been granted or are proposed to be granted (an) Award(s);

             

14

	
Performance Period

	
with respect to an Award the period of consecutive years (or other periods) for which the Award is expressed to be granted;

	 	 
	
Phantom Award

	
an Award granted pursuant to Appendix 2;

	 	 
	
Plan

	
the Alliance Boots 2012 Long Term Incentive, as amended from time to time in accordance with the Rules;

	 	 
	
Plan Period

	
the period starting on 1August 2012 and ending on the tenth anniversary of that date;

	 	 
	
Redundancy

	
the termination of a Participant's Employment attributable wholly or mainly to the fact that:

 

(a)                 the employer has ceased or intends to cease:

 

(i)                 to carry on the business for the purpose of which the employee was employed; or

 

(ii)                to carry out that business in the place the employee was employed; or

 

(b)                the requirements of that business:

 

(i)                  for employees to carry out work of a particular kind; or

 

(ii)                to carry out that work in the place where the employee was employed,

 

have ceased or diminished or are expected to cease or diminish;

	 	 
	
Remuneration Committee

	
the remuneration committee of the board of directors of Alliance Boots GmbH;

	 	 
	
Retirement

	
retirement with the agreement of the Participant's employing company;

	 	 
	
Rules

	
the rules of the Plan as amended from time to time;

	 	 
	
Share

	
a fully paid ordinary share in the capital of Walgreens;

	 	 
	
Share Part

	
has the meaning given in the definition of Award;

	 	 
	
Synergy Target Plan

	
has the meaning given in the definition of Award;

             

15

	
Trustees

	
the trustee or trustees of any employee benefit trust which operates in conjunction with the Plan;

	 	 
	
US Award

	
the portion of any Award that is subject to US income tax and not otherwise exempt from section 409A;

	 	 
	
US Code

	
the United States Internal Revenue Code of 1986, as amended;

	 	 
	
Variation

	
in relation to the equity share capital of Walgreens, a capitalisation issue, an offer or invitation made by way of rights, a subdivision, consolidation, reduction, demerger, or distribution in specie or any other variation in its share capital; and

	 	 
	
Walgreens

	
Walgreen Co.

 

16

APPENDIX 2

PHANTOM AWARDS

This Appendix 2 constitutes the schedule to the Plan under which Awards may be granted to Participants over a number of notional Shares, giving those Participants the right to a payment in cash only in respect of the Share Part of the Award, calculated in accordance with this Appendix 2, and subject to the terms and provisions of this Appendix 2.

	1.	The Rules shall apply to the grant of Awards under this Appendix 2, except as specified in this Appendix 2.

	2.	The following Rules shall be deleted:

		2.1	Rule 6.3.

		2.2	Rule 6.4.

		2.3	Rule 6.6.

		2.4	Rule 8.3.

		2.5	Rule 9.4.

		2.6	Rule 10.2.

		2.7	Rule 10.6

and the Rules will be renumbered accordingly.

	3.	Rule 6.1 will be deleted and replaced by the following:

"Subject to the remainder of this Rule 6 and Rule 10.7, within 30 days following the date of vesting of an Award, the Participant will receive a cash sum equal to the Market Value of the Shares, calculated on the date of vesting, subject to the Share Part of the Award in respect of which it has vested."

	4.	Rule 6.5 will be deleted and replaced by the following:

"The delivery of any cash under the Plan will be subject to obtaining any necessary approval or consent required under any applicable regulations or enactment."

	5.	Rule 8.2 will be deleted and replaced by the following:

"The Participating Companies will bear the costs of introducing and operating the Plan. The Company may require any Participating Company to enter into an agreement which obliges that company to reimburse the Company for any costs borne by the Company, directly or indirectly, in respect of Participants who are employed by the Participating Company."

	6.	Rule 10.7 will be deleted and replaced with the following:

"Any Group Company, former Group Company or the Trustee may withhold such amounts and/or make such arrangements as it considers necessary to meet any liability to taxation or social security contributions for which it or any other Group Company or former Group Company is liable to account in connection with the vesting of Awards."

 

17

	7.	In Appendix I (Definitions) the following will apply:

(a)           The definition of " Award" will be amended by deleting the wording in (c) and replacing it with the following wording:

"a cash sum by reference to a number of Shares based on continued employment with the Group to the date of the Merger, which will comprise approximately 25 per cent. of the value of the Award at its Date of Grant (the Share Part);"

(b)           The definition of "Share" will be deleted and replaced by:

"a notional fully paid ordinary share in the capital of Walgreens;".

 

 

18

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