Document:

exv4w3

 

Exhibit 4.3

 

BANK OF IRELAND

GROUP

EXECUTIVE STOCK OPTION SCHEME — 2004

 

Established by the Annual General Court on 7 July 2004

 

 

CONTENTS

	 	 	 	 	 
	 	 	 	Page
	PART ONE
	 	 	1	 
	1.    DEFINITIONS AND INTERPRETATION
	 	 	1	 
	2.    ELIGIBILITY
	 	 	2	 
	3.    GRANT OF OPTIONS
	 	 	2	 
	4.    LIMITS
	 	 	3	 
	5.    EXERCISE OF OPTIONS; TERMINATION OF OPTIONS
	 	 	4	 
	6.    TAKEOVER, RECONSTRUCTION AND WINDING-UP
	 	 	7	 
	7.    VARIATION OF CAPITAL
	 	 	8	 
	8.    ALTERATIONS
	 	 	9	 
	9.    MISCELLANEOUS
	 	 	10	 
	10.  GOVERNING LAW AND JURISDICTION
	 	 	10	 
	11.  TERMINATION OF THE SCHEME
	 	 	10	 
	PART TWO
	 	 	11	 
	1.    DEFINITIONS AND INTERPRETATION
	 	 	11	 
	2.    ELIGIBILITY
	 	 	12	 
	3.    GRANT OF OPTIONS
	 	 	12	 
	4.    LIMITS
	 	 	14	 
	5.    EXERCISE OF OPTIONS; TERMINATION OF OPTIONS
	 	 	15	 
	6.    TAKEOVER, RECONSTRUCTION AND WINDING-UP
	 	 	18	 
	7.    VARIATION OF CAPITAL
	 	 	21	 
	8.    ALTERATIONS
	 	 	21	 
	9.    MISCELLANEOUS
	 	 	22	 
	10.  GOVERNING LAW AND JURISDICTION
	 	 	23	 
	11.  TERMINATION OF THE SCHEME
	 	 	23	 

 

 

PART ONE

	1.	 	DEFINITIONS AND INTERPRETATION

	(1)	 	In this Scheme, unless the context otherwise requires:
	 
	 	 	“Accounting Period” means any period in respect of which the Bank prepares an annual report
and financial statements;
	 
	 	 	“the Bank” means The Governor and Company of the Bank of Ireland;
	 
	 	 	“Code of Conduct for Group Employees” means guidelines that specify the periods during which
senior management of a Group Company may deal in Bank Stock;
	 
	 	 	“Control” means control within the definition given by section 432 of the Taxes
Consolidation Act 1997;
	 
	 	 	“the Court” means the Court of Directors of the Bank or a duly authorised committee thereof;
	 
	 	 	“the Grant Date” means the date on which an option was granted;
	 
	 	 	“Group Company” means the Bank or any other company of which the Bank has Control;
	 
	 	 	“the Group Remuneration Committee” means the group remuneration committee of the Court save
that upon the occurrence of any of the corporate events described more fully in Rule 6, then
the term means the Group Remuneration Committee of the Court as constituted immediately
before such event occurs;
	 
	 	 	“Internal Reorganisation” means an event contemplated by sub-rule (1) or (3) of Rule 6, the
result of which is that the Bank will be under the Control of another company or the business
of the Bank is carried on by another company and the persons who owned stock in the Bank
immediately before the change of Control will immediately afterwards own more than 75% of the
shares in that other company;
	 
	 	 	“Participant” means a person who holds an option granted under the Scheme;
	 
	 	 	“Performance Condition” is the Performance Condition in the Schedule to the Scheme or such
other conditions as may be specified by the Group Remuneration Committee under sub-rule (1)
of Rule 3 provided that any material change shall only be made following discussion with the
Irish Association of Investment Managers;
	 
	 	 	“Performance Period” unless the Group Remuneration Committee determines otherwise on the
Grant Date means the three consecutive Accounting Periods of which the first is the
Accounting Period in which the Grant Date falls (or such shorter period as may be specified
in Rules 5 or 6);
	 
	 	 	“the Scheme” means for options granted under this Part One, the Bank of Ireland Group
Executive Stock Option Scheme — 2004 as herein set out comprising Rules 1 to 11 of this Part
One but subject to any alterations or additions made under Rule 8;
	 
	 	 	“the Trustee” means the trustee or trustees for the time being of any trust established for
the benefit of all or most of the employees of the Bank and/or its subsidiaries;
	 
	 	 	“Unit of Stock” means a unit of Ordinary Stock in the capital of the Bank and “Units of
Stock” and “Stock” and “Ordinary Stock” shall be construed accordingly.

 

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	(2)	 	Any reference in the Scheme to any enactment includes a reference to that enactment as from
time to time modified, extended or re-enacted.
	 
	(3)	 	Where the context so permits, the singular shall include the plural and vice versa.
	 
	(4)	 	Headings and words in italics are for guidance only and do not form part of the Scheme.
	 
	(5)	 	The attached Schedule forms part of the Scheme.

	2.	 	ELIGIBILITY

	(1)	 	Subject to sub-rule (2) of this Rule 2, a person is eligible to be granted an option if (and
only if) he or she is on the Grant Date an executive director, an officer or an employee of a
Group Company and is required to devote the whole or substantially the whole of his or her
working time to his office or employment with a Group Company.
	 
	(2)	 	A person is not eligible to be granted an option under the Scheme if at the proposed Grant
Date he or she is within three years of his or her anticipated retirement date or such shorter
period (being not less than six months) as may be specified from time to time by the
guidelines issued by the Irish Association of Investment Managers.

	3.	 	GRANT OF OPTIONS

	(1)	 	Subject to sub-rule (3) of this Rule 3 and Rule 4, the Group Remuneration Committee may at
its absolute discretion grant to any person who is eligible in accordance with Rule 2 an
option to acquire Units of Stock in the Bank, upon the terms set out in this Part One of the
Scheme and subject to the Performance Condition or such other objective conditions as the
Group Remuneration Committee may specify on the Grant Date.
	 
	(2)	 	The Group Remuneration Committee may adopt such procedures as it thinks fit for granting
options, whether by issuing invitations or without issuing invitations.
	 
	(3)	 	An option may only be granted under the Scheme:

	 	(a)	 	within the period of 6 weeks beginning with:

	 	(i)	 	the date on which the Scheme is adopted by the Bank at the Annual
General Court; or
	 
	 	(ii)	 	the dealing day next following the date on which the Bank announces
its results for any period; or
	 
	 	(iii)	 	the removal of any restriction imposed under statute, order or
regulation (including any regulation, order or requirement imposed by any
regulatory authority) which had previously prevented the grant of an option under
sub-paragraph (ii) above; or

	 	(b)	 	at any other time when the circumstances are considered by the Group Remuneration
Committee to be sufficiently exceptional to justify its grant; and
	 
	 	(c)	 	within the period of 10 years beginning with the date on which the Scheme is
adopted by the Bank.

	(4)	 	The price at which Units of Stock may be acquired by the exercise of an option granted under
the Scheme shall be determined by the Group Remuneration Committee before it is granted, but
shall not be less than the higher of:

 

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	 	(a)	 	the average of the closing prices of Units of Stock of that class (as derived
from The Irish Stock Exchange Daily Official List or any successor to that Stock
Exchange) for the three dealing days immediately preceding the Grant Date, provided that
no such dealing day shall fall before the day on which the Bank last announced its
results for any period; and
	 
	 	(b)	 	the closing price of Units of Stock of that class (as derived from The Irish
Stock Exchange Daily Official List or any successor to that Stock Exchange) on the Grant
Date; and
	 
	 	(c)	 	in the case of an option to acquire Units of Stock only by subscription, the
price shall not be less than the nominal value of those Units of Stock.

	(5)	 	An option granted under the Scheme:

	 	(a)	 	shall not, except on the death of a Participant, be capable of being transferred,
assigned, charged or pledged by him or her and any purported transfer, assignment,
charge or pledge shall cause the option to lapse forthwith; and
	 
	 	(b)	 	shall lapse forthwith if he or she is adjudged bankrupt.

	(6)	 	There shall be no monetary consideration for the grant of an option under the Scheme.
	 
	(7)	 	The Bank shall execute an Award in such form and manner as it considers appropriate and shall
issue to each Participant an Option Certificate which shall be in such form as the Group
Remuneration Committee shall from time to time determine. The Option Certificate shall
include details of:

	 	(a)	 	the Grant Date in relation to the option;
	 
	 	(b)	 	the number of Units of Stock subject to the option;
	 
	 	(c)	 	the exercise price in relation to the option; and
	 
	 	(d)	 	the Performance Conditions to be satisfied as a condition of the exercise of the
option.

	4.	 	LIMITS

	(1)	 	No person shall be granted an option which would, at the time it is granted, cause the
aggregate price at which he or she may acquire Units of Stock in pursuance of options granted
to him or her in the same Accounting Period under either Part One or Part Two of the Scheme to
exceed 100% of his or her salary; and for the purposes of this sub-rule a person’s salary
shall be taken to be his or her basic salary before tax (excluding bonuses and benefits in
kind) expressed as an annual rate, payable to him or her at that time by the Group Company by
which he or she is employed.
	 
	(2)	 	No options shall be granted which would, on the date they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the options (or other awards) are granted or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 10% of the Units of Stock of the Bank in issue at that time.
	 
	(3)	 	No options shall be granted which would, on the date they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the options (or other awards) are granted, or been issued in that period,

 

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	 	 	under this Scheme or under any other executive stock scheme adopted by the Bank, to exceed
such number as represents 5% of the Units of Stock of the Bank in issue at that time.
	 
	(4)	 	No options shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of five years
ending with the date the options (or other awards) are granted, or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 5% of the Units of Stock of the Bank in issue at that time.
	 
	(5)	 	No options shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of three years
ending with the date the options (or other awards) are granted, or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 3% of the Units of Stock of the Bank at that time.
	 
	(6)	 	Where any option or award relating to unissued Units of Stock:

	 	(a)	 	lapses pursuant to sub-rule (5) of Rule 3 or pursuant to Rules 5 or 6, the Units
of Stock concerned will be ignored when calculating the limits in sub-rules (2), (3),
(4) and (5) of this Rule 4;
	 
	 	(b)	 	is disclaimed, the Units of Stock concerned will be included when calculating the
limits in sub-rules (2), (3), (4) and (5) of this Rule 4.

	(7)	 	Any treasury Stock transferred under the Scheme shall be deemed to be newly issued Stock when
calculating the limits in sub-rules (2), (3), (4) and (5) of this Rule 4.
	 
	(8)	 	Any Units of stock in the Bank which have been issued or which may be issued to the Trustee
to satisfy the exercise of any Award shall be included for the purposes of the limits set out
in sub-rules (2), (3), (4) and (5) of this Rule 4.

	5.	 	EXERCISE OF OPTIONS; TERMINATION OF OPTIONS

	(1)	 	The exercise of any option granted under the Scheme shall be effected in such form and manner
as the Group Remuneration Committee may from time to time prescribe and any notice of exercise
shall take effect only when received by the Bank together with the relevant exercise monies or
an agreement to provide such monies pursuant to arrangements acceptable to the Bank.
	 
	(2)	 	Subject to sub-rule (5) of this Rule 5 and to sub-rules (1) and (3) of Rule 6, an option
granted under the Scheme may not be exercised before the third anniversary of the Grant Date.
	 
	(3)	 	The following provisions apply in relation to the Performance Condition and other conditions
imposed by the Group Remuneration Committee pursuant to sub-rule (1) of Rule 3:

	 	(a)	 	an option granted under the Scheme may only be exercised to the extent that:

	 	(i)	 	the Performance Condition is satisfied as at the date of exercise
(including where it is deemed to be satisfied under sub-rule (3) of this Rule 5);
and
	 
	 	(ii)	 	as permitted by any other condition specified under sub-rule (1) of
Rule 3;

	 	(b)	 	in relation to an option (or any part of an option) which would, except for
sub-rule (3)(a) of this Rule 5, become exercisable before the end of the performance
period specified in the Performance Condition only by reason of sub-rule (5) of this
Rule 5 or Rule 6, the Group Remuneration Committee may, at its absolute discretion, and
acting

 

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	 	 	 	fairly and reasonably, determine whether and to what extent the Performance Condition
shall be deemed to be satisfied having regard to the performance of the Bank since the
Grant Date, unless the Group Remuneration Committee determines that exceptional
circumstances have arisen in which case an option may be exercised to the extent (if
any) permitted by the Group Remuneration Committee notwithstanding that the
Performance Condition has not been satisfied; and
	 
	 	(c)	 	if the Performance Condition is not (and is not deemed to be) satisfied and
exceptional circumstances have not arisen in accordance with sub-rule (3)(b) of this
Rule 5, the option shall immediately and regardless of any other Rule of this Scheme
cease to be capable of exercise and lapse.

	(4)	 	Subject to sub-rules (5) and (6) of this Rule 5, if any Participant ceases to be an executive
director, an officer or an employee of a Group Company for any reason, including (without
limitation) resignation, early retirement or dismissal, any option granted to him or her under
the Scheme will lapse upon the date of such cessation.
	 
	(5)	 	If any Participant ceases to be an executive director, an officer or an employee of a Group
Company by reason of:

	 	(a)	 	death;
	 
	 	(b)	 	injury, ill-health or disability (each proved to the satisfaction of the Group
Remuneration Committee); or
	 
	 	(c)	 	redundancy within the meaning of the Redundancy Payments Acts 1967 to 2003; or
	 
	 	(d)	 	retirement on or after reaching contractual retirement age; or
	 
	 	(e)	 	his office or employment is in a company which ceases to be a Group Company, or
relates to a business or part of a business which is transferred to a person who is not
a Group Company; or
	 
	 	(f)	 	any other reason and the Group Remuneration Committee in its absolute discretion
so permits,

	 	 	 	then any option held by him or her may be exercised during the period of 12 months
commencing on the date of cessation of office or employment, subject to the
following proviso. Unless the Group Remuneration Committee decides otherwise in
exceptional circumstances:

	 	(i)	 	the maximum number of Units of Stock subject to an option which
may be issued or transferred shall be (rounded up to the nearest whole Unit of
Stock):

	 	 	 	 	 	 	 
	 	A	 	x	 	 B 
	 	 	 	 	 	N

	 	where A  = 	 	the number of Units of Stock subject to an
option, after taking account of paragraph (ii) below,
	 
	 	B  = 	 	the number of complete months which
have elapsed at the date of death or cessation of office or
employment for a reason specified in Rule 5(5)(a)-(f) of this Rule
5 since the Grant Date, and
	 
	 	N  = 	 	36, and

 

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	 	(ii)	 	Units of Stock subject to an option may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured over such period as the Group Remuneration Committee may decide).

	(6)	 	A Participant shall not be treated for the purposes of sub-rule (5) of this Rule 5 above as
ceasing to be an executive director, an officer or an employee of a Group Company until such
date as he or she is no longer an executive director, an officer or an employee of any Group
Company.
	 
	(7)	 	Notwithstanding any other provision of the Scheme, an option granted under the Scheme may not
be exercised after the expiration of the period of ten years (or such shorter period as the
Group Remuneration Committee may have determined before its grant) beginning with the Grant
Date.
	 
	(8)	 	Within 30 days after an option under the Scheme has been exercised by any person, the Court
on behalf of the Bank shall procure the issue or transfer to him or her (or a nominee for him
or her) of the number of Units of Stock in respect of which the option has been exercised
unless the Group Remuneration Committee considers that the issue or transfer thereof would not
be lawful in the relevant jurisdiction.
	 
	(9)	 	It is a condition of exercise of any option that, if the Court so requires, the Participant
has entered into such joint election under Section 431 of the Income Tax (Earnings and
Pensions) Act 2003 of the United Kingdom with the relevant Group Member as required by the
Court or such other form of tax election as required by the Court to achieve similar effect
and in a case where a Group Company and/or the Trustee is obliged to (or would suffer a
disadvantage if it were not to) account for any tax (in any jurisdiction) for which the person
in question is liable by virtue of the exercise of the option and/or for any social security
contributions or similar contributions payable or assessable in respect of that Award
(together, the “Tax Liability”), that person has either:

	 	(a)	 	made a payment to the Group Company and/or the Trustee of an amount equal to the
Bank’s estimate of the Tax Liability; or
	 
	 	(b)	 	entered into arrangements acceptable to that or another Group Company and/or the
Trustee to secure that such a payment is made (whether by authorising the sale of some
or all of the Units of Stock on his or her behalf and the payment to the relevant person
of the relevant amount out of the proceeds of sale or otherwise).

	(10)	 	All Units of Stock allotted under the Scheme shall rank pari passu in all respects with the
Units of Stock of the same class for the time being in issue save as regards any rights
attaching to such Units of Stock by reference to a record date prior to the date of the
allotment.
	 
	(11)	 	If Units of Stock of the same class as those allotted under the Scheme are listed in The
Irish Stock Exchange Official List or The London Stock Exchange Official List (or any
successor to these Stock Exchanges), the Bank shall apply to the Irish Stock Exchange or the
London Stock Exchange (or any successor to these Stock Exchanges) for any Units of Stock so
allotted to be admitted to the appropriate list.
	 
	(12)	 	Options may only be exercised if the Participant is not subject to the additional embargo on
dealings in Units of Stock by virtue of the Code of Conduct for Group Employees, or any
replacement guidelines, in relation to transactions in securities by directors and relevant
employees, on the proposed date of exercise of the option.

 

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	6.	 	TAKEOVER, RECONSTRUCTION AND WINDING-UP

	(1)	 	Subject to sub-rule (6) of this Rule 6 if any person obtains Control of the Bank as a result
of making a general offer to acquire Units of Stock in the Bank, or having obtained Control
makes such an offer, the Group Remuneration Committee shall notify every Participant thereof
and an option may be exercised, to the extent permitted by sub-rule (7) of this Rule 6, within
one month (or such longer period, not exceeding 60 days of the offer being declared
unconditional in all respects, as the Group Remuneration Committee may permit) of such
notification, and to the extent that it is not exercised within that period shall
(notwithstanding any other provision of the Scheme) lapse on the expiration thereof.
	 
	(2)	 	For the purposes of sub-rule (1) of this Rule 6, a person shall be deemed to have obtained
Control of the Bank if he or she and others acting in concert with him or her have together
obtained Control of it.
	 
	(3)	 	If:

	 	(a)	 	any proposal for the reorganisation of the capital of the Bank or for the
reconstruction or amalgamation of the Bank involving a material change in the nature of
the Stock comprised in any option becomes unconditional (and for the purposes of this
sub-rule the determination of the Court of a material change in the nature of Stock in
any particular case shall be final and conclusive); or
	 
	 	(b)	 	an order is made for the compulsory winding up of the Bank,

	 	 	subject to sub-rule (6) of this Rule 6 the Group Remuneration Committee shall forthwith
notify every Participant thereof and an option granted under the Scheme may be exercised, to
the extent permitted by sub-rule (7) of this Rule 6, within one month of such notification,
and to the extent that it is not exercised within that period shall (notwithstanding any
other provision of the Scheme) lapse on the expiration thereof.
	 
	(4)	 	Where a company (the “Acquiring Company”) obtains Control of the Bank as a result of making a
general offer to acquire Units of Stock in the Bank, or having obtained Control makes such an
offer, a Participant may at any time within a period of six months following the date on which
the Acquiring Company obtained Control, by agreement with the Acquiring Company, release any
option granted to him or her under the Scheme in consideration of the grant to him or her of a
new option (the “New Option”) over stock or shares in the Acquiring Company, or a subsidiary
or holding company of the Acquiring Company, as such phrases are defined in Section 155 of the
Companies Act 1963.
	 
	(5)	 	Where a Participant is granted a New Option in consideration of the release of an option
granted to him or her under the Scheme, the New Option will be treated as having been acquired
at the same time as the option he or she has released and the New Option shall be subject to
the provisions of the Scheme as it had effect in relation to the option immediately before the
release, and references in the Scheme to the Bank and Units of Stock, or Stock or Ordinary
Stock shall be construed as references to the Acquiring Company and its stock or shares as
appropriate or, as the case may be, the other company in respect of whose stock or shares the
New Option is granted and its stock or shares.
	 
	(6)	 	Upon the occurrence of an Internal Reorganisation, an Option shall not become exercisable
(unless the Group Remuneration Committee, in its discretion, determines otherwise) but shall
instead be replaced by a new option over shares in the company which Controls the Bank or
which carries on the business of the Bank (as the case may be) that have equivalent market

 

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	 	 	values and exercise prices as the Stock to which the option relates immediately prior to the
Internal Reorganisation (such market values to be determined by the Group Remuneration
Committee) and the Rules shall continue to apply to the new award mutatis mutandis to take
account of this alteration as the Group Remuneration Committee shall reasonably determine.
	 
	(7)	 	The extent to which an option becomes exercisable pursuant to sub-rules (1) or (3) of this
Rule 6 shall unless the Group Remuneration Committee decides otherwise in exceptional
circumstances be as follows:

	 	(i)	 	the maximum number of Units of Stock over which an option may
be exercised shall be (rounded up to the nearest whole Unit of Stock):

	 	 	 	 	 	 	 
	 	A	 	x	 	 B 
	 	 	 	 	 	N

	 	where A  = 	 	the number of Units of Stock subject to an
option, after taking account of paragraph (ii) below,
	 
	 	B  = 	 	the number of complete months which have
elapsed at the date of the first to occur of the events specified in
sub-rule (1) above since the Grant Date, and
	 
	 	N  = 	 	36, and

	 	(ii)	 	Units of Stock subject to an option may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured up to the first to occur of the events specified in this sub-rule).

	7.	 	VARIATION OF CAPITAL

	(1)	 	In the event of any variation in the capital structure of the Bank, including a
capitalisation issue, a rights issue, a sub-division or consolidation of Stock, or a reduction
in capital, and a demerger, a payment of a capital dividend or other similar event, the Group
Remuneration Committee may make such adjustments as it considers appropriate under sub-rule
(2) of this Rule 7.
	 
	(2)	 	An adjustment made under this sub-rule shall be to one or more of the following:

	 	(a)	 	the number and/or nominal value of Units of Stock in respect of which an option
granted under the Scheme may be exercised;
	 
	 	(b)	 	the price at which Units of Stock may be acquired by the exercise of an option
(provided that in the event that any alteration of capital results in the reduction of
the option price to less than the nominal value of the Stock, the option price shall be
the nominal value of such Units of Stock); or
	 
	 	(c)	 	where an option has been exercised but no Units of Stock have been allotted or
transferred pursuant to such exercise, the number of Units of Stock which may be so
allotted or transferred and the price at which they may be acquired.

	(3)	 	The Group Remuneration Committee shall not be precluded from making any adjustment made
pursuant to sub-rule (2) of this Rule 7 retrospectively where any variation in the Bank’s
capital structure occurs after the date of exercise of an option but the relevant record date
upon

 

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	 	 	which any Stockholder must duly appear in the register of members preceded the date of
allotment of the relevant Stock.
	 
	(4)	 	As soon as reasonably practicable after making an adjustment under sub-rule (2) of this Rule
7, the Group Remuneration Committee shall give notice in writing to any Participant affected
by it.

	8.	 	ALTERATIONS

	(1)	 	Subject to sub-rules (2), (4) and (5) of this Rule 8, the Group Remuneration Committee may at
any time alter this Scheme, or the Performance Condition, or the terms of any option granted
under the Scheme.
	 
	(2)	 	Subject to sub-rule (3) of this Rule 8, no alteration to the advantage of the persons to whom
options have been or may be granted may be made under sub-rule (1) of this Rule 8, to Rule 2
(the eligibility of Participants), sub-rule (1) of Rule 3 (mandatory performance conditions),
sub-rule (4) of Rule 3 (calculation of the option price), sub-rule (5) of Rule 3
(non-assignability of options), Rule 4 (the limits on individual participation and the number
of Units of Stock which may be issued under the Scheme), Rules 5 and 6 (the terms of exercise
and the rights attaching to the Units of Stock acquired) and Rule 7 (adjustment of options on
a variation of capital), or this Rule 8, without the prior approval by ordinary resolution of
the Bank in general meeting.
	 
	(3)	 	Sub-rule (2) of this Rule 8 shall not apply to:

	 	(a)	 	any alteration to benefit the administration of the Scheme, to take account of a
change in legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Participants or any Group Company; or
	 
	 	(b)	 	any alteration or addition solely relating to a Performance Condition, subject to
sub-rule (5) of this Rule 8.

	(4)	 	No alteration to the disadvantage of any Participant shall be made under sub-rule (1) of this
Rule 8 unless:

	 	(a)	 	the Court shall have invited every relevant Participant to give an indication as
to whether or not he or she approves the alteration, and
	 
	 	(b)	 	the alteration is approved by a majority of those Participants who have given
such an indication.

	(5)	 	No alteration which solely relates to a Performance Condition shall be made unless:

	 	(a)	 	an event has occurred which has caused the Group Remuneration Committee,
following discussion with the Irish Association of Investment Managers, reasonably to
consider that the Performance Condition would not, without the alteration, achieve its
original purpose;
	 
	 	(b)	 	the altered Performance Condition is in the view of the Group Remuneration
Committee no more difficult to satisfy than the original Performance Condition was
intended to be when granted; and
	 
	 	(c)	 	the Group Remuneration Committee shall act fairly and reasonably in making the
alteration.

 

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	(6)	 	As soon as reasonably practicable after making any alteration under this Rule 8, the Group
Remuneration Committee shall give notice in writing to any Participant affected by it.

	9.	 	MISCELLANEOUS

	(1)	 	The rights and obligations of any individual under the terms of his office or employment with
any Group Company shall not be affected by his participation in the Scheme or any right which
he or she may have to participate in it
	 
	(2)	 	If a Participant shall cease for any reason to be in the office or employment of a Group
Company, he/she shall not be entitled, by way of compensation for loss of office or otherwise
howsoever, to any sum or any benefit to compensate him for the loss of any right or benefit
accrued or in prospect under the Scheme.
	 
	(3)	 	In the event of any dispute or disagreement as to the interpretation of the Scheme, or as to
any question or right arising from or related to the Scheme, the decision of the Group
Remuneration Committee, ratified by the Court, shall be final and binding upon all persons.
	 
	(4)	 	Any notice or other communication under or in connection with the Scheme may be given by
personal delivery or by post, in the case of a company to its registered office, and in the
case of an individual to his last known address, or, where he or she is a director, officer or
employee of a Group Company, either to his or her last known address or to the address of the
place of business at which he or she performs the whole or substantially the whole of the
duties of his office or employment or in an electronic communication to an address for the
time being notified for that purpose to the person giving the notice.
	 
	(5)	 	No benefit received by a Participant under the Scheme shall be pensionable.
	 
	(6)	 	All costs, charges and expenses (including any capital or stamp duty) incurred in introducing
and administering the Scheme shall be borne by the Group Companies as determined by the Group
Remuneration Committee.
	 
	(7)	 	Any stamp duty chargeable on the instruments of transfer entered into pursuant to each option
shall be borne by the Bank, or where relevant, any Group Company in respect of Participants
employed by it.
	 
	(8)	 	A Participating Company may provide money to the Trustee or to any other person to enable
that person to acquire Stock to be held for the purposes of the Scheme, or enter into any
guarantee or indemnity for these purposes, to the extent permitted by law.

	10.	 	GOVERNING LAW AND JURISDICTION

	(1)	 	This Part One of the Scheme and all options granted under it shall be governed and construed
in accordance with Irish law and the Courts of Ireland shall have exclusive jurisdiction to
hear any dispute.

	11.	 	TERMINATION OF THE SCHEME

	(1)	 	This Scheme shall terminate on the tenth anniversary of the date on which it is approved by
the stockholders of the Bank in general court or at any earlier time by the passing of a
resolution by the Court. Termination of the Scheme shall be without prejudice to the
subsisting rights of Participants.

 

-10-

 

PART TWO — UK INLAND REVENUE APPROVED SCHEME

	1.	 	DEFINITIONS AND INTERPRETATION

	(1)	 	In this Scheme, unless the context otherwise requires:
	 
	 	 	“Accounting Period” means any period in respect of which the Bank prepares an annual report
and financial statements;
	 
	 	 	“the Bank” means The Governor and Company of the Bank of Ireland;
	 
	 	 	“Code of Conduct for Group Employees” means guidelines that specify the periods during which
senior management of a Group Company may deal in Bank Stock;
	 
	 	 	“Control” means control within the definition given by section 719 of the UK Income Tax
(Earnings and Pensions) Act 2003;
	 
	 	 	“the Court” means the Court of Directors of the Bank or a duly authorised committee thereof;
	 
	 	 	“the Grant Date” means the date on which an option was granted;
	 
	 	 	“Group Company” means the Bank or any other company of which the Bank has Control;
	 
	 	 	“the Group Remuneration Committee” means the group remuneration committee of the Court save
that upon the occurrence of any of the corporate events described more fully in Rule 6, then
the term means the Group Remuneration Committee of the Court as constituted immediately
before such event occurs;
	 
	 	 	“Internal Reorganisation” means an event contemplated by sub-rules (1) or (3) of Rule 6 the
result of which is that the Bank will be under the Control of another company or the business
of the Bank is carried on by another company and the persons who owned the shares in the Bank
immediately before the change of Control will immediately afterwards own more than 75% of the
shares in that other company;
	 
	 	 	“Participant” means a person who holds an option granted under the Scheme;
	 
	 	 	“Participating Company” means the Bank or any Subsidiary to which the Scheme is expressed by
the Group Remuneration Committee to extend for the time being;
	 
	 	 	“Performance Condition” is the Performance Condition in the Schedule to the Scheme or such
other conditions as may be specified by the Group Remuneration Committee under sub-rule (1)
of Rule 3 provided that any material change shall only be made following discussion with the
Irish Association of Investment Managers;
	 
	 	 	“Performance Period” unless the Group Remuneration Committee determines otherwise on the
Grant Date means the three consecutive Accounting Periods of which the first is the
Accounting Period in which the Grant Date falls (or such shorter period as may be specified
in Rules 5 or 6);
	 
	 	 	“Schedule 4” means Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 of the
United Kingdom;
	 
	 	 	“the Scheme” means for options granted under this Part Two, the Bank of Ireland Group
Executive Stock Option Scheme — 2004 as herein set out comprising Rules 1 to 11 of this Part
Two but subject to any alterations or additions made under Rule 8;

 

-11-

 

	 	 	“Subsidiary” means a body corporate which is a subsidiary of the Bank within the meaning of
Section 736 of the UK Companies Act 1985 and is under the Control of the Bank;
	 
	 	 	“the Trustee” means the trustee or trustees for the time being of any trust established for
the benefit of all or most of the employees of the Bank and/or its subsidiaries;
	 
	 	 	“Unit of Stock” means a unit of Ordinary Stock in the capital of the Bank and “Units of
Stock” and “Stock” and “Ordinary Stock” shall be construed accordingly; and
	 
	 	 	expressions not otherwise defined in the Scheme have the same meanings as they have in
Schedule 4.
	 
	(2)	 	Any reference in the Scheme to any enactment includes a reference to that enactment as from
time to time modified, extended or re-enacted.
	 
	(3)	 	Where the context so permits, the singular shall include the plural and vice versa.
	 
	(4)	 	Headings and words in italics are for guidance only and do not form part of the Scheme.
	 
	(5)	 	The attached Schedule forms part of the Scheme.

	2.	 	ELIGIBILITY

	(1)	 	Subject to sub-rule (3) of this Rule 2, a person is eligible to be granted an option if (and
only if) he or she is on the Grant Date a full-time director or a qualifying employee of a
Participating Company.
	 
	(2)	 	For the purposes of sub-rule (1) of this Rule 2:

	 	(a)	 	an individual shall be treated as a full-time director of a Participating Company
if he or she is obliged to devote to the performance of the duties of his office or
employment with Participating Companies not less than 25 hours a week (excluding meal
breaks).
	 
	 	(b)	 	a qualifying employee, in relation to a Participating Company, is an employee
whether full-time or part-time of a Participating Company (other than one who is a
director of a Participating Company).

	(3)	 	A person is not eligible to be granted an option under the Scheme:

	 	(a)	 	if at the proposed Grant Date he or she is within three years of his or her
anticipated retirement date, or such shorter period (being not less than six months) as
may be specified from time to time by the guidelines issued by the Irish Association of
Investment Managers; or
	 
	 	(b)	 	when he or she is not eligible to participate in the Scheme by virtue of
paragraph 9 of Schedule 4 (material interest in a close company).

	3.	 	GRANT OF OPTIONS

	(1)	 	Subject to sub-rule (3) and (4) of this Rule 3 and Rule 4, the Group Remuneration Committee
may at its absolute discretion grant to any person who is eligible in accordance with Rule 2
above an option to acquire Units of Stock in the Bank which satisfy the requirements of

 

-12-

 

	 	 	paragraphs 16 to 20 of Schedule 4 (fully paid up, unrestricted ordinary share capital) on the
Grant Date (and, subject to sub-rule (6) of Rule 7, at the date of exercise of the option)
upon the terms set out in this Part Two of the Scheme and subject to the Performance
Condition or such other objective conditions as the Group Remuneration Committee may specify
on the Grant Date.
	 
	(2)	 	The Group Remuneration Committee may adopt such procedures as it thinks fit for granting
options, whether by issuing invitations or without issuing invitations.
	 
	(3)	 	An option may not be granted under this Part Two of the Scheme unless and until the UK Inland
Revenue has approved this Part Two of the Scheme under Schedule 4.
	 
	(4)	 	An option may only be granted under the Scheme:

	 	(a)	 	within the period of 6 weeks beginning with:

	 	(i)	 	the date on which the Scheme is adopted by the Bank at the Annual
General Court; or
	 
	 	(ii)	 	the dealing day next following the date on which the Bank announces
its results for any period; or
	 
	 	(iii)	 	the removal of any restriction imposed under statute, order or
regulation (including any regulation, order or requirement imposed by any
regulatory authority) which had previously prevented the grant of an option under
sub-paragraph (ii) above; or

	 	(b)	 	at any other time when the circumstances are considered by the Group Remuneration
Committee to be sufficiently exceptional to justify its grant; and
	 
	 	(c)	 	within the period of 10 years beginning with the date on which the Scheme is
adopted by the Bank.

	(5)	 	The price at which Units of Stock may be acquired by the exercise of an option granted under
the Scheme shall be determined by the Group Remuneration Committee before it is granted, but
shall not be less than the higher of:

	 	(a)	 	the average of the closing mid-market prices of Units of Stock of that class (as
derived from The London Stock Exchange Daily Official List or any successor to this
Stock Exchange) for the three dealing days immediately preceding the Grant Date,
provided that no such dealing day shall fall before the day on which the Bank last
announced its results for any period; and
	 
	 	(b)	 	the closing price of Units of Stock of that class (as derived from The London
Stock Exchange Daily Official List or any successor to this Stock Exchange) on the Grant
Date; and
	 
	 	(c)	 	if Units of Stock of the same class as those Units of Stock are not quoted in the
Official List of The London Stock Exchange, the market value within the meaning of Part
VII of the UK Taxation of Chargeable Gains Act 1992 of Units of Stock of that class, as
agreed in advance with Shares Valuation of the UK Inland Revenue, on the Grant Date; and
	 
	 	(d)	 	in the case of an option to acquire Units of Stock only by subscription, the
price shall not be less than the nominal value of those Units of Stock.

 

-13-

 

	(6)	 	An option granted under the Scheme:

	 	(a)	 	shall not, except on the death of a Participant, be capable of being transferred,
assigned, charged or pledged by him or her and any purported transfer, assignment,
charge or pledge shall cause the option to lapse forthwith; and
	 
	 	(b)	 	shall lapse forthwith if he or she is adjudged bankrupt.

	(7)	 	There shall be no monetary consideration for the grant of an option under the Scheme.
	 
	(8)	 	The Bank shall execute an Option in such form and manner as it considers appropriate and is
in accordance with Irish law and shall issue to each Participant an Option Certificate which
shall be in such form as the Group Remuneration Committee shall from time to time determine.
The Option Certificate shall include details of:

	 	(a)	 	the Grant Date in relation to the option;
	 
	 	(b)	 	the number of Units of Stock subject to the option;
	 
	 	(c)	 	the exercise price in relation to the option; and
	 
	 	(d)	 	the Performance Conditions to be satisfied as a condition of the exercise of the
option.

	4.	 	LIMITS

	(1)	 	No person shall be granted options under Part Two of the Scheme which would at the time they
are granted, cause the aggregate market value of the Units of Stock which he or she may
acquire in pursuance of options granted to him or her under Part Two of the Scheme or under
any other share option scheme, not being a savings-related share option scheme, approved under
Schedule 4 and established by the Company or any associated company of the Company (and not
exercised) to exceed or further exceed £30,000 or such other limit as may apply from time to
time for the purposes of paragraph 6(1) to Schedule 4.
	 
	(2)	 	For the purposes of the limit in sub-rule (1) of Rule 4 of the market value of the Units of
Stock in relation to which an option was granted shall be calculated:

	 	(a)	 	in the case of an option granted under this Scheme, as on the day by reference to
which the price at which Units of Stock may be acquired by the exercise thereof was
determined in accordance with sub-rule (4) of Rule 3;
	 
	 	(b)	 	in the case of an option granted under any other approved scheme, as at the time
when it was granted or, in a case where an agreement relating to the Units of Stock has
been made under paragraph 22(2) of Schedule 4, such earlier time or times as may be
provided in the agreement; and
	 
	 	(c)	 	in the case of any other option, as on the day or days by reference to which
the price at which shares may be acquired by the exercise thereof was determined.

	(3)	 	No person shall be granted an option which would, at the time it is granted, cause the
aggregate price at which he or she may acquire Units of Stock in pursuance of options granted
to him or her in the same Accounting Period under either Part One or Part Two of the Scheme to
exceed

 

-14-

 

	 	 	100% of his or her salary; and for the purposes of this sub-rule a person’s salary shall be
taken to be his or her basic salary before tax (excluding bonuses and benefits in kind)
expressed as an annual rate, payable to him or her at that time by the Group Company by which
he or she is employed.
	 
	(4)	 	No options shall be granted which would, on the date they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the options (or other awards) are granted or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 10% of the Units of Stock of the Bank in issue at that time
	 
	(5)	 	No options shall be granted which would, on the date they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the options (or other awards) are granted, or been issued in that period,
under this Scheme or under any other executive stock scheme adopted by the Bank, to exceed
such number as represents 5% of the Units of Stock of the Bank in issue at that time.
	 
	(6)	 	No options shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of five years
ending with the date the options (or other awards) are granted, or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 5% of the Units of Stock of the Bank in issue at that time.
	 
	(7)	 	No options shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of three years
ending with the date the options (or other awards) are granted, or been issued in that period,
under this Scheme or under any other employees’ stock scheme adopted by the Bank, to exceed
such number as represents 3% of the Units of Stock of the Bank at that time.
	 
	(8)	 	Any option granted under the Scheme shall take effect so that the above limits are complied
with.
	 
	(9)	 	Where any option or award relating to unissued Units of Stock:

	 	(a)	 	lapses pursuant to sub-rule (6) of Rule 3 or pursuant to Rules 5 or 6, the Units
of Stock concerned will be ignored when calculating the limits in sub-rules (4), (5),
(6) and (7) of this Rule 4;
	 
	 	(b)	 	is disclaimed, the Units of Stock concerned will be included when calculating the
limits in sub-rules (4), (5), (6) and (7) of this Rule 4.

	(10)	 	Any treasury Stock transferred under the Scheme shall be deemed to be newly issued Stock when
calculating the limits in sub-rules (4), (5), (6) and (7) of this Rule 4.
	 
	(11)	 	Any Units of Stock in the Bank which have been issued or which may be issued to the Trustee
to satisfy the exercise of any Award shall be included for the purposes of the limits set out
in sub-rules (4), (5), (6) and (7) of this Rule 4.

	5.	 	EXERCISE OF OPTIONS; TERMINATION OF OPTIONS

	(1)	 	The exercise of any option granted under the Scheme shall be effected in such form and manner
as the Court may from time to time prescribe and any notice of exercise shall take effect only
when received by the Bank together with the relevant exercise monies or an agreement to
provide such monies pursuant to arrangements acceptable to the Bank.

 

-15-

 

	(2)	 	Subject to sub-rule (5) of this Rule 5 and to sub-rules (1) and (3) of Rule 6, an option
granted under the Scheme may not be exercised before the third anniversary of the Grant Date.
	 
	(3)	 	The following provisions apply in relation to the Performance Condition and other conditions
imposed by the Group Remuneration Committee pursuant to sub-rule (1) of Rule 3:

	 	(a)	 	an option granted under the Scheme may only be exercised to the extent that:

	 	(i)	 	the Performance Condition is satisfied as at the date of exercise
(including where it is deemed to be satisfied under sub-rule (3) of this Rule 5);
and
	 
	 	(ii)	 	as permitted by any other condition specified under sub-rule (1) of
Rule 3;

	 	(b)	 	in relation to an option (or any part of an option) which would, except for
sub-rule (3)(a) of this Rule 5, become exercisable before the end of the performance
period specified in the Performance Condition only by reason of sub-rule (5) of this
Rule 5 or Rule 6, the Group Remuneration Committee may, at its discretion, and acting
fairly and reasonably, determine whether and to what extent the Performance Condition
shall be deemed to be satisfied having regard to the performance of the Bank since the
Grant Date, unless the Group Remuneration Committee determines that exceptional
circumstances have arisen in which case an option may be exercised to the extent (if
any) permitted by the Group Remuneration Committee notwithstanding that the Performance
Condition has not been satisfied; and
	 
	 	(c)	 	if the Performance Condition is not (and is not deemed to be) satisfied and
exceptional circumstances have not arisen in accordance with sub-rule (3)(b) of this
Rule 5, the option shall immediately and regardless of any other Rule of this Scheme
cease to be capable of exercise and lapse.

	(4)	 	Subject to sub-rule (5) of this Rule 5, if any Participant ceases to be an executive director
or employee of a Group Company for any reason, including (without limitation) resignation,
early retirement or dismissal, any option granted to him or her under the Scheme will lapse
upon the date of such cessation.
	 
	(5)	 	If any Participant ceases to be an executive director or an employee of a Group Company by
reason of:

	 	(a)	 	death;
	 
	 	(b)	 	injury, ill-health or disability (each proved to the satisfaction of the Group
Remuneration Committee); or
	 
	 	(c)	 	redundancy within the meaning of the Employment Rights Act 1996 of the United
Kingdom; or
	 
	 	(d)	 	retirement after reaching the age at which he or she is bound to retire in
accordance with his or her contract of employment; or
	 
	 	(e)	 	his office or employment is in a company which ceases to be a Group Company, or
relates to a business or part of a business which is transferred to a person who is not
a Group Company; or
	 
	 	(f)	 	any other reason and the Group Remuneration Committee in its discretion acting
fairly and reasonably so permits,

 

-16-

 

	 	 	 	then any option held by him or her may be exercised during the period of 12 months
commencing on the date of cessation of office or employment, subject to the
following proviso. Unless the Group Remuneration Committee acting fairly and
reasonably decides otherwise in exceptional circumstances:

	 	(i)	 	the maximum number of Units of Stock subject to an option
which may be issued or transferred shall be (rounded up to the nearest whole
Unit of Stock):

	 	 	 	 	 	 	 
	 	A	 	x	 	 B 
	 	 	 	 	 	N

	 	where A  = 	 	the number of Units of Stock subject to an option, after taking account of paragraph (ii) below,
	 
	 	B  = 	 	the number of complete months which
have elapsed at the date of death or cessation of office or
employment for a reason specified in sub-rule (5)(a)-(f) of this
Rule 5 since the Grant Date, and
	 
	 	N  = 	 	36, and

	 	(ii)	 	Units of Stock subject to an option may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured over such period as the Group Remuneration Committee may decide).

	(6)	 	A Participant shall not be treated for the purposes of sub-rule (5) of this Rule 5 as ceasing
to be an executive director or an employee of a Group Company until such date as he or she is
no longer an executive director or an employee of any Group Company.
	 
	(7)	 	Notwithstanding any other provision of the Scheme, an option granted under the Scheme may not
be exercised after the expiration of the period of ten years (or such shorter period as the
Group Remuneration Committee may have determined before its grant) beginning with the Grant
Date.
	 
	(8)	 	A Participant shall not be eligible to exercise an option under the Scheme at any time when
he or she is not eligible to participate in the Scheme by virtue of paragraph 9 of Schedule 4
(material interest in a close company).
	 
	(9)	 	Within 30 days after an option under the Scheme has been exercised by any person, the Court
on behalf of the Bank shall procure the issue or transfer to him or her (or a nominee for him
or her) of the number of Units of Stock in respect of which the option has been exercised
unless the Group Remuneration Committee considers that the issue or transfer thereof would not
be lawful in the relevant jurisdiction.
	 
	(10)	 	It is a condition of exercise of any option that, in a case where a Group Company and/or the
Trustee is obliged to (or would suffer a disadvantage if it were not to) account for any tax
(in any jurisdiction) for which the person in question is liable by virtue of the exercise of
the option and/or for any social security contributions or similar contributions payable or
assessable in respect of that Award (together, the “Tax Liability”), that person has either:

	 	(a)	 	made a payment to the Group Company and/or the Trustee of an amount equal to the
Bank’s estimate of the Tax Liability; or

 

-17-

 

	 	(b)	 	entered into arrangements acceptable to that or another Group Company and/ or the
Trustee to secure that such a payment is made (whether by authorising the sale of some
or all of the Units of Stock on his or her behalf and the payment to the relevant person
of the relevant amount out of the proceeds of sale or otherwise).

	(11)	 	All Units of Stock allotted under the Scheme shall rank pari passu in all respects with the
Units of Stock of the same class for the time being in issue save as regards any rights
attaching to such Units of Stock by reference to a record date prior to the date of the
allotment.
	 
	(12)	 	If Units of Stock of the same class as those allotted under the Scheme are listed in The
Irish Stock Exchange Official List or The London Stock Exchange Official List (or any
successor to these exchanges), the Bank shall apply to the Irish Stock Exchange or the London
Stock Exchange (or any successor to these exchanges) for any Units of Stock so allotted to be
admitted to the appropriate list.
	 
	(13)	 	Options may only be exercised if the Participant is not subject to the additional embargo on
dealings in Units of Stock by virtue of the Code of Conduct for Group Employees, or any
replacement guidelines, in relation to transactions in securities by directors and relevant
employees, on the proposed date of exercise of the option.
	 
	(14)	 	For the purposes of paragraph 35A of Schedule 4 the specified retirement age shall be 55.

	6.	 	TAKEOVER, RECONSTRUCTION AND WINDING-UP

	(1)	 	Subject to sub-rule (6) of this Rule 6 if any person obtains Control of the Bank as a result
of making a general offer to acquire Units of Stock in the Bank, or having obtained Control
makes such an offer, the Group Remuneration Committee shall notify every Participant thereof
and an option may be exercised, to the extent permitted by sub-rule (7) of this Rule 6, within
one month (or such longer period, not exceeding 60 days of the offer being declared
unconditional in all respects, as the Group Remuneration Committee may permit) of such
notification, and to the extent that it is not exercised within that period shall
(notwithstanding any other provision of the Scheme) lapse on the expiration thereof.
	 
	(2)	 	For the purposes of sub-rule (1) and (6) of this Rule 6, a person shall be deemed to have
obtained Control of the Bank if he or she and others acting in concert with him or her have
together obtained Control of it.
	 
	(3)	 	If:

	 	(a)	 	any proposal for the reorganisation of the capital of the Bank, or the
reconstruction or amalgamation of the Bank including a material change in the nature of
the Stock comprised in any option becomes unconditional (and for the purposes of this
sub-rule the determination of the Court of a material change in the nature of Stock in
any particular case shall be final and conclusive); or
	 
	 	(b)	 	the Bank passes a resolution for voluntary winding up; or
	 
	 	(c)	 	an order is made for the compulsory winding up of the Bank,

	 	 	subject to sub-rule (6) of this Rule 6 the Group Remuneration Committee shall forthwith
notify every Participant thereof and an option granted under the Scheme may be exercised, to
the extent permitted by sub-rule (7) of this Rule 6, within one month of such notification,
and to the extent that it is not exercised within that period shall (notwithstanding any
other provision of the Scheme) lapse on the expiration thereof.

 

-18-

 

	(4)	 	Where a company (the “Acquiring Company”) obtains Control of the Bank as a result of making a
general offer to acquire Units of Stock in the Bank, or having obtained Control makes such an
offer, a Participant may at any time within a period of six months following the date on which
the Acquiring Company obtained Control, by agreement with the Acquiring Company, release any
option granted under the Scheme (the “Old Option”) in consideration of the grant to him or her
of a new option (the “New Option”) which, within the meaning ascribed by paragraph 26(3) of
Schedule 4, is equivalent to the Old Option but relates to stock or shares in a different
company (within the Acquiring Company or some other company falling within paragraph 16(b) or
(c) of Schedule 4).
	 
	(5)	 	The New Option shall not be regarded for the purposes of sub-rule (4) of this Rule 6 as
equivalent to the Old Option unless the conditions set out in paragraph 27(4) of Schedule 4
are satisfied, but so that the provisions of the Scheme shall for this purpose be construed as
if:

	 	(a)	 	the New Option was an option granted under the Scheme at the same time as the Old
Option;
	 
	 	(b)	 	except for the purposes of the definitions of “Group Company”, “Participating
Company” and “Subsidiary”, the expression “the Company” was defined as “a company whose
shares may be acquired by the exercise of options granted under this Scheme”; and
	 
	 	(c)	 	Sub-rule (2) of Rule 8 of the Scheme was omitted.

	(6)	 	Upon the occurrence of an Internal Reorganisation where a new option is offered pursuant to
sub-rule 4 of this Rule 6, an option shall not become exercisable but shall instead be
replaced by a new option over shares in the company which Controls the Bank or which carries
on the business of the Bank (as the case may be) that have equivalent market values and
exercise prices as the Stock to which the option relates immediately prior to the Internal
Reorganisation (such market values to be determined by the Group Remuneration Committee) and
the Rules shall continue to apply to the new award mutatis mutandis to take account of this
alteration as the Group Remuneration Committee shall reasonably determine.
	 
	(7)	 	The extent to which an option becomes exercisable pursuant to sub-rules (1) or (3) of this
Rule 6 shall unless the Group Remuneration Committee acting fairly and reasonably decides
otherwise in exceptional circumstances be as follows:

	 	(i)	 	the maximum number of Units of Stock over which an option may
be exercised shall be (rounded up to the nearest whole Unit of Stock):

	 	 	 	 	 	 	 
	 	A	 	x	 	 B 
	 	 	 	 	 	N

	 	where A  = 	 	the number of Units of Stock subject to an option, after taking account of paragraph (ii) below,
	 
	 	B  = 	 	the number of complete months which have
elapsed at the date of the first to occur of the events specified in
sub-rule (1) above since the Grant Date, and
	 
	 	N  = 	 	36, and

 

-19-

 

	 	(ii)	 	Units of Stock subject to an option may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured up to the first to occur of the events specified in this sub-rule).

	 	 	 

-20-

 

	7.	 	VARIATION OF CAPITAL

	(1)	 	In the event of any variation of the share capital of the Bank, the Group Remuneration
Committee may make such adjustments as it considers appropriate under sub-rule (2) of this
Rule 7.
	 
	(2)	 	An adjustment made under this sub-rule shall be to one or more of the following:

	 	(a)	 	the number and/or nominal value of Units of Stock in respect of which an option
granted under the Scheme may be exercised;
	 
	 	(b)	 	the price at which Units of Stock may be acquired by the exercise of an option
(provided that in the event that any variation of capital results in the reduction of
the option price to less than the nominal value of the Stock, the option price shall be
the nominal value of such Units of Stock); or
	 
	 	(c)	 	where an option has been exercised but no Units of Stock have been allotted or
transferred pursuant to such exercise, the number of Units of Stock which may be so
allotted or transferred and the price at which they may be acquired.

	(3)	 	At a time when the Scheme is approved by the UK Inland Revenue under Schedule 4, no
adjustment under sub-rule (2) above shall be made without the prior approval of the UK Inland
Revenue.
	 
	(4)	 	The Group Remuneration Committee shall not be precluded from making any adjustment made
pursuant to sub-rule (2) of this Rule 7 retrospectively where any variation in the Bank’s
capital structure occurs after the date of exercise of an option but the relevant record date
upon which any Stockholder must duly appear in the register of members preceded the date of
allotment of the relevant Stock.
	 
	(5)	 	As soon as reasonably practicable after making an adjustment under sub-rule (2) of this Rule
7, the Group Remuneration Committee shall give notice in writing to any Participant affected
by it.
	 
	(6)	 	If the Units of Stock subject to any option cease to satisfy the requirements of paragraphs
16 to 20 of Schedule 4 at any time after the Grant Date then:

	 	(a)	 	the Court shall as soon as practicable notify the UK Inland Revenue of this;
	 
	 	(b)	 	the grantor of the option will not be required to allot, transfer or procure the
allotment or transfer of shares which satisfy those requirements upon the exercise of an
option;
	 
	 	(c)	 	for the avoidance of doubt, all unexercised options shall continue to exist; and
	 
	 	(d)	 	the Scheme shall continue to exist but if the UK Inland Revenue withdraw their
approval of the Scheme under Schedule 4 it shall continue to exist as an unapproved
share option scheme.

	8.	 	ALTERATIONS

	(1)	 	Subject to sub-rules (2), (4) and (5) of this Rule 8, the Group Remuneration Committee may at
any time alter this Scheme, or the Performance Condition. When this Scheme is approved by the
UK Inland Revenue under Schedule 4, no alteration to the Scheme made under this Rule shall
have effect unless and until the Inland Revenue have approved the alteration.

 

-21-

 

	(2)	 	Subject to sub-rule (3) of this Rule 8, no alteration to the advantage of the persons to whom
options have been or may be granted may be made under sub-rule (1) of this Rule 8, to any of
the provisions concerning Rule 2 (the eligibility of Participants), sub-rule (1) of Rule 3
(mandatory performance conditions), sub-rule (4) of Rule 3 (calculation of the option price),
sub-rule (5) of Rule 3 (non-assignability of options), Rule 4 (the limits on individual
participation and the number of Units of Stock which may be issued under the Scheme), Rules 5
and 6 (the terms of exercise and the rights attaching to the Units of Stock acquired) and Rule
7 (adjustment of options on a variation of capital), or this Rule, without the prior approval
by ordinary resolution of the Bank in general meeting.
	 
	(3)	 	Sub-rule (2) of this Rule 8 shall not apply to:

	 	(a)	 	any minor alteration to benefit the administration of the Scheme, to take account
of a change in legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Participants or any Group Company; or
	 
	 	(b)	 	any alteration or addition solely relating to a Performance Condition.

	(4)	 	No alteration to the disadvantage of any Participant shall be made under sub-rule (1) of this
Rule 8 unless:

	 	(a)	 	the Court shall have invited every relevant Participant to give an indication as
to whether or not he or she approves the alteration, and
	 
	 	(b)	 	the alteration is approved by a majority of those Participants who have given
such an indication.

	(5)	 	No alteration which solely relates to a Performance Condition shall be made unless:

	 	(a)	 	an event has occurred which has caused the Group Remuneration Committee,
following discussion with the Irish Association of Investment Managers, reasonably to
consider that the Performance Condition would not, without the alteration, achieve its
original purpose;
	 
	 	(b)	 	the altered Performance Condition is no more difficult to satisfy than the
original Performance Condition was intended to be when granted; and
	 
	 	(c)	 	the Group Remuneration Committee shall act fairly and reasonably in making the
alteration.

	(6)	 	As soon as reasonably practicable after making any alteration under this Rule 8, the
Remuneration Committee shall give notice in writing to any Participant affected by it.

	9.	 	MISCELLANEOUS

	 	(1)	 	The rights and obligations of any individual under the terms of his office or employment with
any Group Company shall not be affected by his participation in the Scheme or any right which
he or she may have to participate in it.
	 
	 	(2)	 	If a Participant shall cease for any reason to be in the office or employment of a Group
Company, he shall not be entitled, by way of compensation for loss of office or otherwise
howsoever, to any sum or any benefit to compensate him for the loss of any right or benefit
accrued or in prospect under the Scheme.

 

-22-

 

	(3)	 	In the event of any dispute or disagreement as to the interpretation of the Scheme, or as to
any question or right arising from or related to the Scheme, the decision of the Remuneration
Committee, ratified by the Court, shall be final and binding upon all persons.
	 
	(4)	 	Any notice or other communication under or in connection with the Scheme may be given by
personal delivery or by post, in the case of a company to its registered office, and in the
case of an individual to his last known address, or, where he or she is a director, officer or
employee of a Group Company, either to his/her last known address or to the address of the
place of business at which he or she performs the whole or substantially the whole of the
duties of his office or employment or in an electronic communication to an address for the
time being notified for that purpose to the person giving the notice.
	 
	(5)	 	No benefit received by a Participant under the Scheme shall be pensionable.
	 
	(6)	 	All costs, charges and expenses (including any capital or stamp duty) incurred in introducing
and administering the Scheme shall be borne by the Group Companies as determined by the Group
Remuneration Committee.
	 
	(7)	 	Any stamp duty chargeable on the instruments of transfer entered into pursuant to each option
shall be borne by the Bank, or where relevant, any Group Company in respect of Participants
employed by it.
	 
	(8)	 	A Participating Company may provide money to the Trustee or any other person to enable that
person to acquire Stock to be held for the purposes of the Scheme, or enter into any guarantee
or indemnity for these purposes, to the extent permitted by law.

	10.	 	GOVERNING LAW AND JURISDICTION

	(1)	 	This Part Two of the Scheme and all options granted under it shall be governed and construed
in accordance with Irish law and the Courts of Ireland shall have exclusive jurisdiction to
hear any dispute.

	11.	 	TERMINATION OF THE SCHEME

THIS SCHEME SHALL TERMINATE ON THE TENTH ANNIVERSARY OF THE DATE ON WHICH IT IS APPROVED BY THE
STOCKHOLDERS OF THE BANK IN GENERAL COURT OR AT ANY EARLIER TIME BY THE PASSING OF A RESOLUTION BY
THE COURT. TERMINATION OF THE SCHEME SHALL BE WITHOUT PREJUDICE TO THE SUBSISTING RIGHTS OF
PARTICIPANTS.

-23-

 

 

 

 

 

 

 

 

BANK OF IRELAND GROUP

 

 

LONG TERM INCENTIVE PLAN — 2004

 

 

 

 

 

 

 

 

Established by the Bank in General Court

On 7 July 2004

 

 

CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1.     DEFINITIONS AND INTERPRETATION
	 	 	1	 
	2.     ELIGIBILITY
	 	 	2	 
	3.     GRANT OF AWARDS
	 	 	2	 
	4.     LIMITS
	 	 	3	 
	5.     ISSUE OR TRANSFER OF SHARES TO PARTICIPANTS; TERMINATION OF AWARDS
	 	 	4	 
	6.     TAKE-OVER, RECONSTRUCTION AND WINDING — UP
	 	 	6	 
	7.     VARIATION OF CAPITAL
	 	 	7	 
	8.     ALTERATIONS
	 	 	7	 
	9.     MISCELLANEOUS
	 	 	8	 
	10.   GOVERNING LAW AND JURISDICTION
	 	 	9	 
	11.   TERMINATION OF THE PLAN
	 	 	9	 

 

 

	1.	 	DEFINITIONS AND INTERPRETATION

	(1)	 	In this Plan, unless the context otherwise requires:

	 	 	“Accounting Period” means any period in respect of which the Bank prepares an annual report
and financial statements;
	 
	 	 	“Award” means a conditional right to receive Units of Stock granted pursuant to sub-rule (1)
of Rule 3;
	 
	 	 	“the Bank” means The Governor and Company of the Bank of Ireland;
	 
	 	 	“Code of Conduct for Group Employees” means guidelines that specify the periods during which
senior management of a Group Company may deal in Bank Stock;
	 
	 	 	“Control” means control within the definition given by Section 432 of the Taxes Consolidation
Act 1997;
	 
	 	 	“the Court” means the Court of Directors of the Bank or a duly authorised committee thereof;
	 
	 	 	“the Grant Date” means the date on which an Award was granted;
	 
	 	 	“Group Company” means the Bank or any other company of which the Bank has Control;
	 
	 	 	“the Group Remuneration Committee” means the group remuneration committee of the Court save
that upon the occurrence of any of the corporate events described more fully in Rule 6, then
the term means the Group Remuneration Committee of the Court as constituted immediately
before such event occurs;
	 
	 	 	“Internal Reorganisation” means an event contemplated by sub-rule (1) of Rule 6 the
result of which is that the Bank will be under the Control of another company or the business
of the Bank is carried on by another company and the persons who owned the shares in the Bank
immediately before the change of Control will immediately afterwards own more than 75% of the
            shares in that other company;
	 
	 	 	“Participant” means a person who holds an Award granted under the Plan;
	 
	 	 	“the Performance Conditions” are the performance conditions in the Schedule to the Plan or
such other conditions as may be specified by the Group Remuneration Committee under sub-rule
(1) of Rule 3 provided that any material change shall only be made following discussion with
the Irish Association of Investment Managers;
	 
	 	 	“the Performance Period” unless the Group Remuneration Committee determines otherwise on the
Grant Date means the three consecutive Accounting Periods of which the first is the
Accounting Period in which the Grant Date falls (or such shorter period as may be specified
in Rules 5 or 6);
	 
	 	 	“the Plan” means the Bank of Ireland Group Long Term Incentive Plan — 2004 as herein set out
but subject to any alterations or additions made under Rule 8;
	 
	 	 	“the Trustee” means the trustee or trustees for the time being of any trust established for
the benefit of all or most of the employees of the Bank and/or its subsidiaries;
	 
	 	 	“Units of Stock” means a unit of Ordinary Stock in the capital of the Bank and “Units of
Stock” and “Stock” and “Ordinary Stock” shall be construed accordingly.

-1-

 

	(2)	 	Any reference in the Plan to any enactment includes a reference to that enactment as from
time to time modified, extended or re-enacted.
	 
	(3)	 	Where the context so permits, the singular shall include the plural and vice versa.
	 
	(4)	 	Headings and words in italics are for guidance only and do not form part of the Plan.
	 
	(5)	 	The attached Schedule forms part of the Plan.

	2.	 	ELIGIBILITY

	(1)	 	Subject to sub-rule (2) of this Rule 2, a person is eligible to be granted an Award if (and
only if) he or she is on the Grant Date an executive director, an officer or an employee of a
Group Company and is required to devote the whole or substantially the whole of his or her
working time to his or her office or employment with a Group Company.

	(2)	 	A person is not eligible to be granted an Award if at the proposed Grant Date he or she is
within three years of his or her anticipated retirement date or such shorter period (being not
less than six months) as may be specified from time to time by the guidelines issued by the
Irish Association of Investment Managers.

	3.	 	GRANT OF AWARDS

	(1)	 	Subject to sub-rule (3) of this Rule 3 and Rule 4, the Group Remuneration Committee may at
its absolute discretion grant to any person who is eligible in accordance with Rule 2 an Award
upon the terms set out in the Plan and subject to the Performance Conditions or such other
objective conditions as the Group Remuneration Committee may specify on the Grant Date.
	 
	(2)	 	The Group Remuneration Committee may adopt such procedures as it thinks fit for granting
Awards, whether by issuing invitations or without issuing invitations.
	 
	(3)	 	An Award may only be granted:

	 	(a)	 	within the period of 6 weeks beginning with:

	 	(i)	 	the date on which the Plan is adopted by the Bank at the Annual
General Court; or
	 
	 	(ii)	 	the dealing day next following the date on which the Bank
announces its results for any period; or
	 
	 	(iii)	 	the removal of any restriction imposed under statute, order or
regulation (including any regulation, order or requirement imposed by any
regulatory authority) which had previously prevented the grant of an Award
under sub-paragraph (ii) above; or

	 	(b)	 	at any other time when the circumstances are considered by the Group Remuneration
Committee to be sufficiently exceptional to justify its grant; and
	 
	 	(c)	 	within the period of 10 years beginning with the date on which the Plan is
adopted by the Bank.

-2-

 

	(4)	 	An Award:

	 	(a)	 	shall not, except on the death of a Participant, be capable of being transferred,
assigned, charged or pledged by him or her and any purported transfer, assignment,
charge or pledge shall cause the Award to lapse forthwith; and
	 
	 	(b)	 	shall lapse forthwith if he or she is adjudged bankrupt.

	(5)	 	There shall be no monetary consideration for the grant of an Award.
	 
	(6)	 	No Award shall confer any beneficial interest in any Unit of Stock prior to the Participant
(or his or her personal representatives) being registered as the holder of the Unit of Stock
and for the avoidance of doubt, no Participant shall be entitled to any dividends paid or
other distribution made, or to exercise or direct the exercise of any votes or any other
rights in respect of any Units of Stock by reference to a record date before he or she or his
or her nominee is registered as the holder of those Units of Stock.
	 
	(7)	 	The Bank shall issue to each Participant an Award Certificate which shall be in such form as
the Group Remuneration Committee shall from time to time determine. The Award Certificate
shall include details of:

	 	(a)	 	the Grant Date in relation to the Award;
	 
	 	(b)	 	the number of Units of Stock subject to the Award; and
	 
	 	(c)	 	the Performance Conditions to be satisfied as a condition of the vesting of the
Award.

	4.	 	LIMITS
	 
	(1)	 	No person shall be granted an Award under the Plan which would, at the time it is granted,
cause the aggregate market value of all the Units of Stock over which Awards have been made to
him or her under the Plan in the same Accounting Period to exceed 100% of his or her salary,
or in the case of the Group Chief Executive, 150% of his or her salary; and for the purpose of
this sub-rule, a person’s salary shall be taken to be his or her basic salary before tax
(excluding bonuses and benefits in kind) expressed as an annual rate, payable to him or her at
that time by the Group Company by which he or she is employed.
	 
	(2)	 	For the purposes of sub-rule (1) of this Rule 4, the market value of the Units of Stock over
which an Award is made shall be taken to be an amount equal to the price of Units of Stock of
the same class (as derived from the Official List of the Irish Stock Exchange or any successor
to that Stock Exchange) on the Grant Date or, if higher, the average of the prices of Units of
Stock of that class for the three dealing days preceding the Grant Date as derived from the
Official List of the Irish Stock Exchange or any successor to that Stock Exchange.
	 
	(3)	 	No Awards shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the awards are granted, under the Plan or under any other employees’
stock scheme adopted by the Bank, to exceed such number as represents 10% of the Units of
Stock of the Bank in issue at that time.
	 
	(4)	 	No Awards shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of ten years
ending with the date the awards are granted, under the Plan or under any other executive stock
scheme adopted by the Bank, to exceed such number as represents 5% of the Units of Stock of
the Bank in issue at that time.

-3-

 

	(5)	 	No Awards shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of five years
ending with the date the awards are granted under this Plan or under any other employees’
stock scheme adopted by the Bank, to exceed such number as represents 5% of the Units of Stock
of the Bank in issue at that time.
	 
	(6)	 	No Awards shall be granted which would, at the time they are granted, cause the number of
Units of Stock in the Bank which shall have been or may be issued in the period of three years
ending with the date the awards are granted, under this Plan or under any other employees’
stock scheme adopted by the Bank, to exceed such number as represents 3% of the Units of Stock
of the Bank in issue at that time.
	 
	(7)	 	Where any Award or option relating to unissued Units of Stock:

	 	(a)	 	lapses pursuant to sub-rule (4) of Rule 3 or pursuant to Rules 5 or 6, the Units
of Stock concerned will be ignored when calculating the limits in sub-rules (3), (4),
(5) and (6) of this Rule 4;
	 
	 	(b)	 	is disclaimed, the Units of Stock concerned will be included when calculating the
limits in sub-rules (3), (4), (5) and (6) of this Rule 4.

	(8)	 	Any treasury Stock transferred under the Plan shall be deemed to be newly issued Stock when
calculating the limits in sub-rules (3), (4), (5) and (6) of this Rule 4.
	 
	(9)	 	Any Units of Stock in the Bank which have been issued or which may be issued to the Trustee
to satisfy the exercise of any Award shall be included for the purposes of the limits set out
in sub-rules (3), (4), (5) and (6) of this Rule 4.
	 
	5.	 	ISSUE OR TRANSFER OF SHARES TO PARTICIPANTS; TERMINATION OF AWARDS
	 
	(1)	 	Subject to sub-rules (2), (3), (5) and (6) of this Rule 5 and Rule 6, the Units of Stock
subject to an Award shall be issued or transferred to a Participant or his or her nominee on
or as soon as reasonably practicable after the third anniversary of the Grant Date, but only
to the extent the Performance Conditions have been satisfied, and to the extent that the
Performance Conditions are not satisfied by the last date on which they may be satisfied, an
Award shall immediately lapse.
	 
	(2)	 	Subject to sub-rule (3) of this Rule 5, if any Participant ceases to be an executive
director, an officer or an employee of a Group Company for any reason, including (without
limitation) resignation, early retirement or dismissal, any Award held by him or her shall
lapse upon the date of such cessation.
	 
	(3)	 	If any Participant ceases to be an executive director, an officer or an employee of a Group
Company by reason of:

	 	(a)	 	death; or
	 
	 	(b)	 	injury, ill health or disability (each proved to the satisfaction of the Group
Remuneration Committee); or
	 
	 	(c)	 	redundancy within the meaning of the Redundancy Payment Acts 1967 to 2003; or
	 
	 	(d)	 	retirement on or after reaching contractual retirement age; or

-4-

 

	 	(e)	 	his or her office or employment is in a company which ceases to be a Group
Company, or relates to a business or part of a business which is transferred to a
company, corporation or person other than a Group Company; or
	 
	 	(f)	 	any other reason the Group Remuneration Committee in its absolute discretion so
permits,

	then the Units of Stock subject to an Award shall be issued or transferred to him or her,
his or her nominee or his or her personal representatives as soon as reasonably practicable
after he or she dies or ceases to be an executive director, officer or employee of a Group
Company, subject to the following proviso. Unless the Group Remuneration Committee decides
otherwise in exceptional circumstances:

	 	(i)	 	the maximum number of Units of Stock subject to an Award which
may be issued or transferred shall be (rounded up to the nearest whole Unit of
Stock):

	 	 	 
	 

	 	A x B
	 

	 	       N

	 	where A	 	= the number of Units of Stock subject to an
Award, after taking account of paragraph (ii) below,
	 
	 	B	 	= the number of complete months which
have elapsed at the date of death or cessation of office or
employment for a
    reason specified in sub-rule (3)(a)-(f) of this
Rule 5 since the Grant Date, and
	 
	 	N	 	= 36, and

	 	(ii)	 	Units of Stock subject to an Award may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured over such period as the Group Remuneration Committee may decide).

	(4)	 	A Participant shall not be treated for the purposes of sub-rules (2) and (3) of this Rule 5
as ceasing to be an executive director, an officer or an employee of a Group Company until
such date as he or she is no longer an executive director, an officer or an employee of any
Group Company.
	 
	(5)	 	No Units of Stock shall be issued or transferred unless:

	 	(a)	 	the Group Remuneration Committee considers that the issue or transfer of the
Units of Stock would be lawful in the relevant jurisdiction; and
	 
	 	(b)	 	if the Court so requires, the Participant has entered into such joint election
under Section 431 of the Income Tax (Earnings and Pensions) Act 2003 of the United
Kingdom with the relevant Group Member as required by the Court or such other form of
tax election as required by the Court to achieve similar effect and in a case where a
Group Company and/or the Trustee is obliged to (or would suffer a disadvantage if it
were not to) account for any tax (in any jurisdiction) for which the person in question
is liable by virtue of the issue or transfer of Units of Stock pursuant to an Award
and/or for any social security contributions or similar contributions payable or
assessable in respect of the Award (together, the "Tax Liability"), that person has
either:

-5-

 

	 	(i)	 	made a payment to a Group Company and/or the Trustee of an
amount at least equal to the Bank’s estimate of the Tax Liability; or
	 
	 	(ii)	 	entered into arrangements acceptable to that or another Group
Company and/or the Trustee to secure that such a payment is made (whether by
authorising the sale of some or all of the Units of Stock on his or her behalf
and the payment to the relevant person of the relevant amount out of the
proceeds of sale or otherwise).

	(6)	 	The issue or transfer of any Units of Stock under the Plan pursuant to an Award shall be
effected in the form and manner prescribed by the Group Remuneration Committee and shall be
subject to the provisions of the Code of Conduct for Group Employees, or any replacement
guidelines, in relation to transactions in securities by directors and relevant employees or
any other regulation or enactment. Where the issue or transfer of Units of Stock pursuant to
an Award is prohibited at any time, such issue or transfer shall instead take place as soon as
reasonably practicable after it is no longer prohibited.
	 
	(7)	 	All Units of Stock allotted under the Plan shall rank pari passu in all respects with the
Units of Stock of the same class for the time being in issue save as regards any rights
attaching to such Units of Stock by reference to a record date prior to the date of the
allotment.
	 
	(8)	 	If Units of Stock of the same class as those allotted under the Plan are listed in The Irish
Stock Exchange Official List or The London Stock Exchange Official List (or any successor to
these exchanges), the Bank shall apply to the Irish Stock Exchange or the London Stock
Exchange (or any successor to these exchanges) for any Units of Stock so allotted to be
admitted to the appropriate list.

	6.	 	TAKE-OVER, RECONSTRUCTION AND WINDING — UP
	 
	(1)	 	Subject to sub-rule (3) of this Rule 6, if:

	 	(a)	 	any person obtains Control of the Bank as a result of making a general offer to
acquire Units of Stock, or having obtained Control makes such an offer; or
	 
	 	(b)	 	any proposal for the reorganisation of the capital of the Bank or for the
reconstruction or amalgamation of the Bank involving a material change in the nature of
the Stock comprised in any Award becomes unconditional (and for the purposes of this
sub-rule) the determination of the Court of a material change in the nature of Stock in
any particular case shall be final and conclusive; or
	 
	 	(c)	 	an order is made for the compulsory winding up of the Bank;
	 
	 	 	 	then the Units of Stock subject to an Award shall be issued or transferred to a
Participant or his or her nominee as soon as reasonably practicable after the first
to occur of these events, subject to the following proviso. Unless the Group
Remuneration Committee decides otherwise in exceptional circumstances:

	 	(i)	 	the maximum number of Units of Stock subject to an Award which
may be issued or transferred shall be (rounded up to the nearest whole Unit of
Stock):

	 	 	 
	 

	 	A x B
	 

	 	       N

-6-

 

	 	where A  = 	 	the number of Units of Stock subject to an Award, after
taking account of paragraph (ii) below,
	 
	 	B  = 	 	the number of complete months which have
elapsed at the date of the first to occur of the events specified in
sub-rule (1) above since the Grant Date, and
	 
	 	N  = 	 	36, and

	 	(ii)	 	Units of Stock subject to an Award may only be issued or
transferred to the extent the Performance Conditions have been satisfied (but
measured up to the first to occur of the events specified in this sub-rule).

	(2)	 	For the purposes of sub-rule (1) of this Rule 6, a person shall be deemed to have obtained
Control of the Bank if he or she and others acting in concert with him or her have together
obtained Control of it.
	 
	(3)	 	Upon the occurrence of an Internal Reorganisation, an Award shall not vest (unless the Group
Remuneration Committee, in its discretion, determines otherwise) but shall instead be replaced
by a new award over shares in the company which Controls the Bank or which carries on the
business of the Bank (as the case may be) that have an equivalent market value as the Stock to
which the Award relates immediately prior to the Internal Reorganisation (such market values
to be determined by the Group Remuneration Committee) and the Rules shall continue to apply to
the new award mutatis mutandis to take account of this alteration as the Group Remuneration
Committee shall reasonably determine.
	 
	7.	 	VARIATION OF CAPITAL
	 
	(1)	 	In the event of any variation in the capital structure of the Bank, including a
capitalisation issue, a rights issue, a sub-division or consolidation of Stock, or a reduction
in capital, a demerger, a payment of a capital dividend, or other similar event, the Group
Remuneration Committee may make such adjustments to the number of Units of Stock in respect of
which any Award is subject as it considers appropriate.
	 
	(2)	 	As soon as reasonably practicable after making any adjustment under sub-rule (1) of this Rule
7, the Group Remuneration Committee shall give notice in writing to any Participant affected
by it.
	 
	8.	 	ALTERATIONS
	 
	(1)	 	Subject to sub-rules (2), (4) and (5) of this Rule 8, the Group Remuneration Committee may at
any time alter the Plan, or the Performance Conditions, or the terms of any Award granted
under it.
	 
	(2)	 	Subject to sub-rule (3) of this Rule 8, no alteration to the advantage of the persons to whom
Awards have been or may be granted may be made under sub-rule (1) of this Rule 8, to Rule 2
(the eligibility of Participants), sub-rule (1) of Rule 3 (mandatory performance conditions),
sub-rule (4) of Rule 3 (the non-assignability of Awards), Rule 4 (the limits on individual
participation and the number of Units of Stock which may be issued under the Plan), Rules 5
and 6 (the terms of exercise and the rights attaching to the Units of Stock acquired), Rule 7
(adjustment of Awards on a variation of capital), or this Rule, without the prior approval by
resolution of the members of the Bank in general meeting.
	 
	(3)	 	Sub-rule (2) of this Rule 8 shall not apply to:

-7-

 

	 	(a)	 	any alteration to benefit the administration of the Plan, to take account of a
change in legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Participants or any Group Company; or
	 
	 	(b)	 	any alteration solely relating to the Performance Conditions, subject to sub-rule
(5) of this rule 8.

	(4)	 	No alteration to the disadvantage of any Participant in respect of any Award granted to him
or her shall be made under sub-rule (1) of this Rule 8 unless:

	 	(a)	 	the Group Remuneration Committee shall have invited every relevant Participant to
give an indication as to whether or not he or she approved the alteration, and
	 
	 	(b)	 	the alteration is approved by a majority of those Participants who have given
such an indication.

	(5)	 	No alteration which solely relates to the Performance Conditions shall be made unless:

	 	(a)	 	an event has occurred which has caused the Group Remuneration Committee,
following discussion with the Irish Association of Investment Managers, reasonably to
consider that the Performance Conditions would not, without the alteration, achieve
their original purpose; and
	 
	 	(b)	 	the altered Performance Conditions are in the view of the Group Remuneration
Committee no more difficult to satisfy than the original Performance Conditions were
intended to be when granted; and
	 
	 	(c)	 	the Group Remuneration Committee shall act fairly and reasonably in making the
alteration.

	(6)	 	As soon as reasonably practicable after making any alteration under this Rule 8, the Group
Remuneration Committee shall give notice in writing to any Participant affected by it.
	 
	9.	 	MISCELLANEOUS
	 
	(1)	 	The rights and obligations of any individual under the terms of his or her office or
employment with any Group Company shall not be affected by his or her participation in the
Plan or any right which he or she may have to participate in it.
	 
	(2)	 	If a Participant shall cease for any reason to be in the office or employment of a Group
Company, he or she shall not be entitled, by way of compensation for loss of office or
otherwise howsoever, to any sum or any benefit to compensate him or her for the loss of any
right or benefit accrued or in prospect under the Plan.
	 
	(3)	 	In the event of any dispute or disagreement as to the interpretation of the Plan, or as to
any question or right arising from or related to this Plan, the decision of the Group
Remuneration Committee ratified by the Court shall be final and binding upon all persons.
	 
	(4)	 	Any notice or other communication under or in connection with this Plan may be given by
personal delivery or by post, in the case of a company to its registered office, and in the
case of an individual to his or her last known address, or, where he or she is a director,
officer or an employee of a Group Company, either to his or her last known address, or to the
address of the place of business at which he or she performs the whole or substantially the
whole of the duties of his or her office of employment or in an electronic communication to an
address for the time being notified for that purpose to the person giving the notice.

-8-

 

	(5)	 	No benefit received by a Participant under the Plan shall be pensionable.
	 
	(6)	 	All cost, charges and expenses (including any capital or stamp duties) incurred in
introducing and administering the Plan shall be borne by the Group Companies as determined by
the Group Remuneration Committee.
	 
	(7)	 	Any stamp duty chargeable on the instruments of transfer entered into pursuant to each Award
shall be borne by the relevant Group Company in respect of Participants employed by it.
	 
	(8)	 	A Participating Company may provide money to the Trustee or to any other person to enable
that person to acquire Stock to be held for the purposes of the Plan, or enter into any
guarantee or indemnity for these purposes, to the extent permitted by law.
	 
	10.	 	GOVERNING LAW AND JURISDICTION
	 
	(1)	 	This Plan and all Awards granted under it shall be governed and construed in accordance with
Irish law and the Courts of Ireland shall have exclusive jurisdiction to hear any dispute.
	 
	11.	 	TERMINATION OF THE PLAN
	 
	(1)	 	The Plan shall terminate on the tenth anniversary of the date on which it is approved by the
stockholders of the Bank in general court or at any earlier time by the passing of a
resolution by the Court. Termination of the Plan shall be without prejudice to the subsisting
rights of Participants.

-9-exv4w4

 

Exhibit 4.4

TERMS & CONDITIONS OF APPOINTMENT

FOR NON-EXECUTIVE DIRECTORS OF

THE GOVERNOR & COMPANY OF THE BANK OF IRELAND

The following terms and conditions of appointment to the Court are designed to establish
clarity of expectations between Non-Executive Directors (NEDs) and the Bank. For avoidance of
doubt, it is agreed that this appointment is a contract for services and is not a contract of
employment.

	1.	 	Term of appointment
	 
	 	 	Appointment as a Non-Executive Director is for a specific three year term; it is accepted that
earlier termination may arise under the provisions of the Bye-Laws or other applicable law or,
at the discretion of either party.
	 
	 	 	NEDs are typically expected to serve a second three year term subject to satisfactory
performance, the needs of the business and stockholder re-election as required at Annual
General Courts (AGCs). In exceptional circumstances, you may be invited to serve a further and
final term of up to three years.
	 
	 	 	In accordance with the Bye-Laws, you are required to make and sign the declarations referred to
in Bye-Laws 76 and 141 concerning stockholding and secrecy, in the presence of the Governor and
before attending your first meeting.
	 
	2.	 	Role & Responsibilities
	 
	 	 	NEDs have the same general legal responsibilities to the company as any other director. The
board as a whole is collectively responsible for the success of the company by:-

	 	•	 	Providing entrepreneurial leadership of the company within a framework of prudent and
effective controls which enable risk to be assessed and managed;
	 
	 	•	 	Setting the company’s strategic aims, ensuring that the necessary financial and human
resources are in place for the company to meet its objectives, and reviewing management
performance; and
	 
	 	•	 	Setting the company’s values and standards and ensuring that its obligations to its
shareholders and others are understood and met.

All directors must take decisions objectively in the interests of the company.

In addition to these requirements of all directors, the role of the non-executive director has
the following key elements:-

	 	•	 	Strategy — NEDs should constructively challenge and help develop proposals on strategy;
	 
	 	•	 	Performance — NEDs should scrutinise the performance of management in meeting agreed
goals and objectives and monitor the reporting of performance;
	 
	 	•	 	Risk — NEDs should satisfy themselves on the integrity of financial information and
that financial controls and systems of risk management are robust and defensible; and
	 
	 	•	 	People — NEDs are responsible for determining remuneration policy, appropriate levels
of remuneration of executive directors, have a prime role in appointing, and where
necessary removing, the Chief Executive and in succession planning.

 

 

	3.	 	Meetings
	 
	 	 	Directors are expected, in so far as is reasonably possible, to attend all meetings of the
Court which usually meets on the second Tuesday of each month, and on other occasions should
the need arise; normally meetings run from 8 a.m. to lunchtime. In addition, NEDs are required
to sit on at least one Committee of the Court. Responsibilities in respect of any such
Committee will be the subject of separate correspondence between the relevant chairman and
yourself.
	 
	 	 	In compliance with the new Combined Code, the Annual Report will in future state the number of
meetings of the Court and its principal Committees and individual attendance by Directors.
	 
	 	 	The agenda and supporting papers for regular meetings are despatched to each NED’s nominated
address in advance of meetings.
	 
	4.	 	Time Commitment
	 
	 	 	On average, it is anticipated that NEDs will be required to devote at least 2 days per month to
the business of the Group. This will include attendance at regular meetings, preparation time
for meetings and site visits.
	 
	 	 	Acceptance of appointment will be taken as confirmation that you are committed to allocating
sufficient time to meet the demands of the role.
	 
	5.	 	Induction Arrangements
	 
	 	 	A comprehensive induction briefing pack will be provided to you on acceptance of this
appointment and your particular attention is drawn to the Guidelines for Directors of the
Court.
	 
	 	 	In addition, a full, formal induction programme will be agreed with you by the Group Secretary.
This will be designed to meet your own particular needs and to familiarise you quickly with
the Group’s business and governance arrangements. Newly appointed Directors are required to
avail of a series of familiarisation briefings with key managers and will be offered the
opportunity to meet with a number of stockholders. New Directors are also offered the option
of attending a suitable external event or conference — designed to provide an overview of
current issues of relevance to Directors.
	 
	6.	 	Access to independent professional advice
	 
	 	 	Your induction pack includes a booklet detailing several specific corporate governance issues
and your particular attention is drawn to the fact that at all times, members of the Court have
full access to the advice and support of the Group Secretary and, in addition, may access
independent professional advice on the basis set out.
	 
	7.	 	Outside Interests
	 
	 	 	It is accepted and acknowledged that you have business interests other than those of the Group
and have declared any actual or potential conflicts that are apparent at present. In the event
that you become aware of any further potential conflicts of interest, these should be disclosed
to the Governor and Group Secretary as soon as possible.

 

 

	8.	 	Review Process
	 
	 	 	The performance of individual Directors, the Court and its Committees is evaluated annually.
If, in the interim, there are any matters which cause you concern about your role or the
operation of the Court and its Committees you should take an early opportunity to discuss them
with the Governor or the Group Secretary.
	 
	9.	 	Indemnity/Insurance
	 
	 	 	The Group indemnifies each Director to the fullest extent permitted by law, against all costs,
charges, expenses, losses and liabilities incurred by him or her in the conduct of the business
of the Group or in the discharge of his or her duties in good faith and without wilful default
or neglect, in accordance with Bye-Law 142.
	 
	 	 	The Group has Directors’ and Officers’ liability insurance and it is intended to maintain such
cover for the full term of your appointment. A copy of the policy document is available from
the Group Secretary if required.
	 
	10.	 	Fees
	 
	 	 	The fee paid to Non-Executive Directors is designed as a “composite fee” to cover all Court and
Committee work. This fee (currently €80,000 p.a.) is paid monthly in arrears and is not
pensionable. Currently, 10% of the fee (after tax and other deductions) is paid in the form of
Bank Stock which must be held until a NED has retired from the Court.
	 
	 	 	The Group will reimburse you for all reasonable and properly documented expenses incurred by
you in performing the duties of your office.

July 2005

I hereby confirm my acceptance of this appointment.

 

[Name]

 

Date

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