Document:

Exhibit 4.1

 

 

PRUDENTIAL PLC

 

 

THE PRUDENTIAL GROUP PERFORMANCE SHARE PLAN

 

 

 

Approved by the Company in general
 meeting on 18 May 2006 and as amended by
 the Remuneration Committee on 17 June,
 2008 and 19 February 2009.

 

 

 

CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
DEFINITIONS
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
GRANT   OF PERFORMANCE SHARE AWARDS
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
PERFORMANCE   CONDITIONS
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
PLAN   LIMITS
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
INDIVIDUAL   LIMITS
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
DIVIDENDS
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
VESTING   OF PERFORMANCE SHARE AWARDS
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
LAPSE   OF PERFORMANCE SHARE AWARDS
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
CESSATION   OF EMPLOYMENT
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
RELEASE   OF PERFORMANCE SHARE AWARDS
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
GENERAL   OFFER FOR THE COMPANY
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
SCHEME   OF ARRANGEMENT
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
VOLUNTARY   WINDING-UP
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
DETERMINATION   OF VESTING LEVEL
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
EXCHANGE   OF PERFORMANCE SHARE AWARDS
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
DEMERGER
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
ADJUSTMENT   OF PERFORMANCE SHARE AWARDS
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
RIGHTS   ATTACHING TO SHARES ISSUED OR TRANSFERRED PURSUANT TO AWARDS
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
 
    	
AVAILABILITY   OF SHARES
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
 
    	
ADMINISTRATION   AND AMENDMENT
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.
    	
 
    	
GENERAL
    	
 
    	
16
    

 

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THE PRUDENTIAL GROUP PERFORMANCE SHARE PLAN

 

The Company and any of its Subsidiaries may nominate any of their employees to participate in the Plan and the Subsidiaries may bear the associated costs of any such participation as determined by the Company.

 

1.            DEFINITIONS

 

1.1           In this Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings, namely:

 

Adoption Date  means the date of the adoption of the Plan by the Company in general meeting;

 

Average Market Value means in relation to a Share, the average of the Market Value of such a Share during the month after the announcement of the Company’s results for the immediately preceding Financial Year (calculated on such appropriate basis as the Committee may determine);

 

Award Letter means the document setting out the rights and obligations attaching to a Performance Share Award and which may incorporate by reference the rules of the Plan;

 

Cause means (i) gross misconduct; (ii) gross negligence; (iii) insubordination; (iv) conviction of a criminal offence (other than a road traffic offence not subject to a custodial sentence); (v) continued substantial non-performance of duties; (vi) breach of any non-competition or non-solicitation provision in any agreement to which the Participant is a party; or (vii) any other ground which would entitle the employing company to terminate the Participant’s employment summarily and without notice under the terms of the employment contract or under the law of the jurisdiction applicable to the Participant’s employment at the time of such termination;

 

the Committee means the Remuneration Committee of the board of directors of the Company or any other duly authorised committee;

 

the Company means Prudential pIc;

 

Control has the meaning given to that word by section 840 of the Taxes Act;

 

Date of Grant means the date on which a Performance Share Award is granted;

 

Dealing Day means any day on which the London Stock Exchange is open for business;

 

Employee means any employee or executive director of a member of the Group whose terms of service require him to devote substantially the whole of his working time to the businesses of the Group and who has not given or been given notice terminating his employment;

 

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Executive Share Scheme means any employee share scheme adopted by the Company under which individuals may be selected for participation at the discretion of the body administering that scheme;

 

Financial Year means an accounting reference period of the Company as defined in accordance with section 224 of the Companies Act 1985;

 

Grant Period means the period of 42 days commencing on any of the following:

 

(a)           the Adoption Date;

 

(b)           the day on which the Company makes an announcement of its results for the last preceding Financial Year, half year, quarter or other period; or

 

(c)           any day on which the Committee resolves that exceptional circumstances exist which justify the grant of Performance Share Awards and for the avoidance of doubt the hire of a new Employee may fall to be treated as such an exceptional circumstance;

 

the Group means the Company and the Subsidiaries and member of the Group shall be construed accordingly;

 

Market Value means, in relation to a Share on any Dealing Day, the middle market quotation for a Share as derived from the Daily Official List of the London Stock Exchange for that Dealing Day;

 

Participant means any individual who holds a subsisting Performance Share Award (including, where the context permits, the legal personal representative of a deceased Participant);

 

Performance Conditions mean the conditions specified by the Committee at the Date of Grant in relation to a Performance Share Award or as amended from time to time;

 

Performance Period means unless foreshortened pursuant to Rules 9, 11, 12, 13 or 16 of this Plan a period of three years commencing on the Start Date during which the Performance Condition is to be satisfied or such longer period as the Committee may specify for specific Participants;

 

Performance Share Award means an award granted in the form referred to in Rule 2.2 of this Plan;

 

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

 

Share Plan Committee means the committee established by the board of the Company to administer the Plan;

 

Shares means fully paid ordinary shares in the capital of the Company (or shares representing those shares following any reorganisation of the share capital of the Company);

 

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Start Date means in relation to a Performance Share Award the beginning of the Financial Year in which the Award is granted or such later date as may be specified by the Committee on the Date of Grant;

 

Subsidiary means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985 over which the Company has Control;

 

Taxes Act means the Income and Corporation Taxes Act 1988;

 

Treasury Shares means any Shares held as treasury shares by the Company within the meaning of section 162A(3) of the Companies Act 1985;

 

Trustee means the trustee from time to time of any employee trust which the Committee selects to grant and/or satisfy Performance Share Awards; and

 

Vesting means the determination by the Committee of:

 

(a)           the extent to which the Performance Conditions attaching to a Performance Share Award have been satisfied; and

 

(b)           the number of Shares (if any) in respect of which a Performance Share Award shall be released

 

and Vest shall be construed accordingly.

 

1.2           Where the context permits the singular shall include the plural and vice versa and the masculine shall include the feminine. Headings shall be ignored in construing the Plan.

 

1.3           References to any act of Parliament shall include any statutory modification, amendment or re-enactment thereof.

 

2.            GRANT OF PERFORMANCE SHARE AWARDS

 

2.1           The Committee may, during a Grant Period, grant Performance Share Awards to Employees selected by the Committee in its absolute discretion.

 

2.2           The Committee may grant a Performance Share Award in the form of a nil cost option, a right to acquire Shares, a conditional allocation of Shares or in such other form as may confer on the Participant an equivalent economic benefit.

 

2.3           Nothing in this Plan or in any Employee’s contract of employment shall be construed as giving to any Employee a right to be considered for participation in the Plan or to receive the grant of any Performance Share Award.

 

2.4          The grant of a Performance Share Award and/or the delivery of Shares upon release thereof shall be conditional on the Participant agreeing to comply with any arrangements specified by the Company for the payment of taxation and any social security contributions in respect of the Performance Share Award (including without limitation the right of the Company to arrange the sale on his behalf of sufficient Shares

 

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to satisfy any taxation or social security liability on his part which the Company or any member of the Group may be liable to withhold).

 

2.5           A Participant shall not have any beneficial ownership of the Shares which are the subject of a Performance Share Award granted to him, and accordingly shall not have any right to any dividends or voting rights attaching to the Shares save as set out in Rule 6 below.

 

2.6           A Participant shall not be required to pay for the grant of a Performance Share Award.

 

2.7           An Employee to whom a Performance Share Award is granted may, by notice in writing to the Company given within 30 days after the Date of Grant, renounce in whole or in part his rights under the Performance Share Award.

 

2.8           As soon as practicable after the Date of Grant the Committee shall procure the issue to a Participant of an Award Letter in respect of the Performance Share Award. The Award Letter shall specify, inter alia, the following:

 

(a)           the dates on which the relevant Performance Period shall start and end;

 

(b)           the details of the Performance Conditions imposed in accordance with Rule 3.1 and the manner in which the Performance Conditions will determine the number of Shares that may be acquired on Vesting of the Performance Share Award; and

 

(c)           whether a Performance Share Award shall be enhanced in accordance with Rule 6.

 

2.9           No Performance Share Award shall be granted under the Plan later than the tenth anniversary of the Adoption Date.

 

2.10         Every Performance Share Award granted hereunder shall be personal to the Participant and, except in the event of the death of a Participant, neither the Performance Share Award nor the benefit thereof may be transferred, assigned, charged or otherwise alienated.  Any transfer or exercise otherwise than as permitted under this Rule 2.10 shall cause the Performance Share Award to lapse.

 

3.            PERFORMANCE CONDITIONS

 

3.1           Each Performance Share Award shall be subject to one or more Performance Conditions which will determine the number of Shares which the Participant will be entitled to acquire on Vesting of the Performance Share Award. The Committee may impose different Performance Conditions for Performance Share Awards granted to different Participants in the same Financial Year and to Participants in different Financial Years.

 

3.2           The Performance Conditions may be amended after the Date of Grant if:

 

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(a)           those circumstances which prevailed at the Date of Grant and which were relevant to the Performance Conditions when they were originally imposed have subsequently changed; and

 

(b)           the Committee is satisfied that any such amended Performance Conditions would be a fairer measure of performance and the Committee reasonably considers that such amended Performance Conditions are consistent with and no more or less demanding to satisfy than the original Performance Conditions.

 

4.            PLAN LIMITS

 

4.1           No Performance Share Award shall be granted on any day to the extent that the result of that grant would be that:

 

(a)           the aggregate number of Shares that could be issued on Vesting or release of that Performance Share Award when added to the number of Shares that:

 

(i)            could be issued on the exercise, vesting or release of any other subsisting Performance Share Award granted during the preceding ten years under the Plan;

 

(ii)           have been issued on Vesting or release of any subsisting Performance Share Award granted during the preceding ten years under the Plan;

 

(iii)          could be issued pursuant to any other awards, options or rights granted during the preceding ten years under any other employee share scheme adopted by the Company; and

 

(iv)          have been issued pursuant to any other awards, options or rights granted during the preceding ten years under any other employee share scheme adopted by the Company

 

would exceed 10 per cent of the ordinary share capital of the Company from time to time in issue;

 

(b)           the aggregate of the number of Shares that could be issued on Vesting or release of that Performance Share Award when added to the number of Shares that:

 

(i)            could be issued on Vesting or release of any other subsisting Performance Share Award granted during the preceding ten years under the Plan;

 

(ii)           have been issued on Vesting or release of any subsisting Performance Share Award granted during the preceding ten years under the Plan;

 

(iii)          could be issued pursuant to any other awards, options or rights granted during the preceding ten years under any other Executive Share Scheme adopted by the Company; and

 

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(iv)          have been issued pursuant to any other awards, options or rights granted during the preceding ten years under any other Executive Share Scheme adopted by the Company

 

would exceed 5 per cent of the ordinary share capital of the Company from time to time in issue.

 

4.2           Where Shares are transferred or to be transferred from treasury under this Plan or any other employee share scheme established by the Company and for as long as it remains best practice to do so in accordance with institutional shareholder guidelines, such Shares shall be treated, for the purpose of this Rule 4, as Shares that are issued or issuable.

 

5.            INDIVIDUAL LIMITS

 

5.1           A Performance Share Award shall not be granted to an Employee if such grant would cause the total Average Market Value of the maximum number of Shares that may be acquired upon exercise or release of the Performance Share Award (as measured at the Date of Grant) when aggregated with the total Average Market Value of the maximum number of Shares that may be acquired pursuant to any other Performance Share Award granted to the Employee under the Plan or any award granted under the Prudential Business Unit Performance Plan in the same Financial Year, to exceed 3.5 times the Employee’s annual basic salary in respect of his employment with the Group as at the Date of Grant.

 

5.2           In the case of an Employee who is working and based in the United States or such other jurisdiction as the Committee determines at the Date of Grant, the limit referred to in Rule 5.1 above shall be 5.5 times the Employee’s annual basic salary in respect of his employment with the Group as at the Date of Grant.

 

6.            DIVIDENDS

 

If a dividend is payable on Shares and the Committee has so determined at the Date of Grant of a Performance Share Award, the Performance Share Award shall be enhanced by increasing the number of Shares comprised in the Performance Share Award by an additional number of Shares having a Market Value at the time the dividend is paid equivalent to the gross or net of tax value of the dividend and the enhanced Performance Share Award shall be exercisable in accordance with these rules on the same basis as the original Performance Share Award, unless the Committee has determined otherwise at the Date of Grant.

 

7.            VESTING OF PERFORMANCE SHARE AWARDS

 

7.1           Save as otherwise permitted in the rules of the Plan, a Performance Share Award shall only Vest if the Participant remains an employee of a member of the Group until the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years).

 

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7.2           Notwithstanding Rule 7.1, a Performance Share Award shall not Vest unless the Committee is satisfied that the underlying financial performance of the Company during the Performance Period is such as to justify the Vesting of such award.

 

7.3           As soon as reasonably practicable after the end of the last Financial Year of the Performance Period the Committee shall determine whether and the extent to which the Performance Conditions imposed under Rule 3.1 and the requirement of Rule 7.2 have been satisfied and shall notify a Participant of its determination.

 

7.4           Save as otherwise provided in these rules, if a Performance Share Award Vests, the Participant shall be entitled to be issued or transferred such number of Shares as is determined by the Committee in accordance with the Performance Conditions imposed under Rule 3.

 

8.            LAPSE OF PERFORMANCE SHARE AWARDS

 

Notwithstanding any other provisions in these rules, a Performance Share Award shall lapse automatically on the earliest of:

 

(a)           the Participant being declared bankrupt or entering into any general composition with or for the benefit of his creditors, including a voluntary arrangement under the Insolvency Act 1986;

 

(b)           the dismissal of the Participant for Cause;

 

(c)           the date on which the Participant ceases to be an Employee for any reason mentioned in Rule 9.2 below where the Committee has not exercised its discretion under Rule 9 to allow the Performance Share Award to Vest or be retained;

 

(d)           the date on which the Participant ceases to be an Employee for any reason other than one referred to in Rule 9.2 below whether such cessation is lawful or unlawful;

 

(e)           the date on which the Committee determines that the Performance Conditions for a Performance Period have not been satisfied or the underlying performance of the Company does not justify Vesting; and

 

(f)            on a general offer for the Company, scheme of arrangement, winding-up of the Company or demerger in accordance with Rules 11.4, 12.2, 12.6, 13.2 and 16.2 below.

 

9.            CESSATION OF EMPLOYMENT

 

9.1           Save as otherwise provided in Rule 9.2 if a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years), the Performance Share Award shall lapse on the date of such cessation.

 

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9.2           If a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years) by reason of:

 

(a)           death;

 

(b)           injury or disability (as determined by the Committee);

 

(c)           retirement at or after the date on which he is bound or expected to retire under his contract of employment;

 

(d)           his employing company ceasing to be a member of the Group;

 

(e)           the business (or part of the business) in which he is employed being transferred to a transferee which is not a member of the Group; or

 

(f)            for any other reason at the Committee’s discretion

 

the relevant Performance Share Award shall lapse forthwith upon such cessation unless the Committee in its absolute discretion determines otherwise in which case Rules 9.3 to 9.6 shall apply to the award depending on the reason for the cessation.

 

9.3           If a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years) by reason of death, injury or disability (as determined by the Committee), the relevant Performance Period shall be treated as coming to an end and the Performance Share Award relating to that Performance Period shall Vest on cessation of employment. The Committee may determine the number of Shares in respect of which the Performance Share Award shall Vest in its absolute discretion having regard to the extent to which the relevant Performance Conditions have been satisfied at the date of the cessation of employment and the number of complete months that have elapsed during the Performance Period up to the cessation of employment.

 

9.4           If a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years) by reason of retirement at or after the date on which he is bound or expected to retire under his contract of employment, the Participant’s Performance Share Award shall continue and Vest at the end of the Performance Period to the extent that the Performance Conditions are satisfied at the end of the Performance Period. The number of Shares in respect of which the Performance Share Award shall Vest shall be the number derived from the measurement of the relevant Performance Conditions as at the end of the Performance Period multiplied by the fraction A/B (where A is that part of the Performance Period (measured in complete months) from the beginning of the Performance Period to the date of retirement and B is 36 (or such other greater number as equals the number of months in the full Performance Period)). Notwithstanding the above, the Committee may, in exceptional circumstances, determine that the Performance Share Award may Vest immediately upon the date of retirement or a later date before the end of the Performance Period

 

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and/or that it may Vest in respect of a greater or lesser number of Shares than is otherwise determined in accordance with this Rule 9.4.

 

9.5           If a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years) by reason of his employing company ceasing to be a member of the Group or the business (or part of the business) in which he is employed being transferred to a transferee which is not a member of the Group, the Committee may in its absolute discretion having regard to the circumstances and timing of the relevant transaction determine whether:

 

(a)           the relevant Performance Period shall be treated as coming to an end and the Performance Share Award relating to that Performance Period shall Vest on cessation of employment in which case the number of Shares in respect of which the Performance Share Award shall Vest shall be determined by the Committee in its absolute discretion having regard to the extent to which the relevant Performance Conditions have been satisfied at the date of the transfer or sale and/or, as the Committee considers appropriate, the performance of the Company and/or the circumstances of the relevant transaction and the number of complete months that have elapsed during the Performance Period before the transfer or sale; or

 

(b)           the Performance Share Award shall continue in which case the Committee will make arrangements to substitute the Shares which are the subject of a Performance Share Award for cash or shares or other securities of an appropriate company in the group to which the employing company or business (or part of the business) in which the Participant is employed has been sold or transferred having such value at the date of the sale or transfer as the Committee shall decide so that the Performance Share Award shall Vest at the end of the Performance Period and be subject to the terms of the Plan but subject to such amendments and variations to the rules of the Plan and the applicable performance conditions as the Committee determines is appropriate in the circumstances.

 

9.6           If a Participant ceases to be an Employee before the third anniversary of the Date of Grant (or such other date as may be determined by the Committee if the Performance Period exceeds three years) for any other reason at the Committee’s discretion, the Committee may determine in its absolute discretion when the relevant Performance Period shall be treated as coming to an end and the Performance Share Award relating to that Performance Period shall Vest (whether at the date of cessation of employment or later) and the number of Shares in respect of which the Performance Share Award shall Vest having regard to the extent to which the relevant Performance Conditions have been satisfied at the date determined by the Committee and the number of complete months that have elapsed from the beginning of the Performance Period up to the cessation of employment.

 

10.          RELEASE OF PERFORMANCE SHARE AWARDS

 

10.1         Subject to any necessary consents and to compliance by the Participant with the terms of this Plan, the Participant shall be entitled to and the Company shall procure within 30

 

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days after the Vesting of the Performance Share Award (or as soon as is practicable after such 30 - day period) the issue or transfer to the Participant (or to his nominee) of the full legal and beneficial ownership of the Shares to which he is entitled free from any liens, charges or encumbrances. The Company shall (unless the Shares are to be issued in uncertificated form) as soon as practicable deliver or procure the delivery to the Participant (or his nominee) of a definitive share certificate or other evidence of title in respect of such Shares.

 

10.2         Notwithstanding any other provision of this Plan, the Participant shall not be entitled and the Company shall not be obliged to issue or procure the transfer of Shares in connection with a Performance Share Award or take any other action under the Plan unless and until the Company is satisfied that any applicable securities law, any requirement under any listing agreement between the Company and any securities exchange, automated quotation system or any regulatory body or any other law, regulation or contractual obligation of the Company can be and have been complied with in full. The Company may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issue or transfer of Shares under this Plan. Certificates representing Shares will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations and other obligations of the Company, and a legend or legends may be placed thereon to reflect such restrictions.

 

10.3         The Company may decide, if it is appropriate for legal, regulatory or tax reasons, to make a cash payment to a Participant, in lieu of delivering Shares, of an equivalent value to the Shares but subject to any necessary deductions required by law.

 

11.          GENERAL OFFER FOR THE COMPANY

 

11.1         If any person (either alone or together with any person acting in concert with him) obtains Control of the Company as a result of making a general offer to acquire all or some of the Shares (other than those which are already owned by him and/or any person acting in concert with him) and such offer becomes or is declared unconditional in all respects, or having obtained Control, makes such an offer, the Committee may, acting fairly and reasonably and having regard to the circumstances of the general offer, determine in its discretion whether a Participant’s Performance Share Award:

 

(a)           shall be automatically exchanged for a new award under Rule 15; or

 

(b)           shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

11.2         If the Committee determines that a Performance Share Award Vests under Rule 11.1(b), the Performance Share Award shall be released in respect of the number of Shares determined under Rule 14 within one month of the offer becoming or being declared unconditional in all respects.

 

11.3         If the Committee determines that a Performance Share Award Vests under Rule 11.1(b) it may in addition determine in its discretion that the Participant may voluntarily agree to exchange his Performance Share Award for a new award under Rule 15.

 

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11.4         A Performance Share Award shall, without prejudice to the operation of Rule 15, lapse in respect of such number of Shares as to which it has not Vested as determined under this Rule 11 and Rule 14.

 

12.          SCHEME OF ARRANGEMENT

 

12.1         If a court shall direct that a meeting of the holders of Shares be convened pursuant to section 425 of the Companies Act 1985 for the purpose of considering a scheme of arrangement of the Company or its amalgamation with any other company or companies, the Committee may, acting fairly and reasonably and having regard to the circumstances of the scheme of arrangement, determine, in its discretion, whether upon the scheme of arrangement being sanctioned by the court (the Relevant Condition) a Participant’s Performance Share Award:

 

(a)           shall be automatically exchanged for a new award under Rule 15; or

 

(b)           shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

12.2         If the Relevant Condition is not satisfied, the Performance Share Award shall continue. If the Relevant Condition is satisfied, the Performance Share Award shall without prejudice to the operation of Rule 15 lapse automatically on the day immediately after the date on which the scheme of arrangement is sanctioned by the court.

 

12.3         If the Committee determines that a Performance Share Award Vests under Rule 12.1(b), the Committee shall endeavour to procure that the scheme of arrangement shall, so far as it relates to Shares, be extended to such Participant as if each Share determined under Rule 14 had been allotted and issued, or transferred, to him by that time.

 

12.4         If the Committee determines that a Performance Share Award Vests under Rule 12.1(b), it may in addition determine in its discretion that the Participant may voluntarily agree to exchange his Performance Share Award under Rule 15.

 

12.5         Performance Share Awards shall not Vest under the foregoing provisions of this Rule 12 if the purpose and effect of the scheme of arrangement is to create a new holding company for the Company, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the scheme of arrangement. A Performance Share Award will in such circumstances continue and be treated as an award over such number of Shares in the holding company as is determined to be appropriate by the Committee, and reference in this Plan to “the Company” shall be construed as references to such holding company as appropriate.

 

12.6         A Performance Share Award shall, without prejudice to the operation of Rule 15, lapse in respect of such number of Shares as to which it has not Vested as determined under this Rule 12 and Rule 14.

 

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13.          VOLUNTARY WINDING-UP

 

13.1         If notice is duly given of a resolution for a voluntary winding-up of the Company then the Committee, acting fairly, reasonably and objectively, may in its discretion allow Performance Share Awards to Vest. A Participant’s Performance Share Award shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

13.2         A Performance Share Award shall lapse in respect of such number of Shares as to which it has not Vested as determined under this Rule 13 and Rule 14.

 

14.          DETERMINATION OF VESTING LEVEL

 

Where a Performance Share Award Vests before the expiry of the relevant Performance Period under Rules 11 to 13, the number of Shares in respect of which the Performance Share Award shall Vest shall be such number as is determined by the Committee in its absolute discretion taking into account: (i) the performance of the Company (including, without limitation, the extent to which the Performance Conditions have been or are likely to be achieved as at the date of the relevant event to which Rules 11 to 13 refer) and (ii) the time elapsed between the Date of Grant and the relevant event to which Rules 11 to 13 refer and in this regard the Committee may, but shall not be obliged to, consider whether it is appropriate to apply one of the following percentages to a Performance Share Award to determine the extent to which a Performance Share Award shall Vest:

 

(a)           33 per cent if the relevant event occurs during the first year of the Performance Period;

 

(b)           67 per cent if the relevant event occurs during the second year of the Performance Period; or

 

(c)           100 per cent if the relevant event occurs during the third year of the Performance Period.

 

15.          EXCHANGE OF PERFORMANCE SHARE AWARDS

 

Where Performance Share Awards are to be exchanged under this Rule, any Performance Share Award (the Old Right) may (if the exchange is voluntary under Rule 11.3 or Rule 12.4 or shall (if the exchange is automatic under Rule 11.1(a) or Rule 12.1(a)) be surrendered by the Participant in consideration of the grant to the Participant of a new award (the New Right) which, in the opinion of the Committee, is equivalent to the Old Right but relates to shares in a different company. The provisions of the Plan shall be construed in relation to the New Right as if:

 

(a)           the New Right were a Performance Share Award granted under the Plan at the same time as the Old Right;

 

(b)           references to the Performance Conditions were references to such new performance conditions relating to the business or shares of the company whose shares are subject to the New Right (or any member of its group) as the Committee may consider appropriate in the circumstances;

 

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(c)           references to the Company and the Group were references to the company whose shares are subject to the New Right and its group; and

 

(d)           references to Shares were references to shares in the new grantor.

 

16.          DEMERGER

 

16.1         If the Committee becomes aware that the Company is or is expected to be affected by any demerger, dividend in specie, super-dividend or other transaction which, in the opinion of the Committee, would materially affect the current or future value of any Performance Share Awards (whether by increasing or reducing the value), the Committee, acting fairly, reasonably and objectively, may in its absolute discretion treat some or all of the Performance Share Awards as Vested to the extent to which the Performance Conditions have or are likely to have been met at that time. The Committee shall specify when such Vested Performance Share Award shall be released.

 

16.2         A Performance Share Award shall lapse in respect of such number of Shares as to which it has not Vested in accordance with this Rule 16.

 

17.          ADJUSTMENT OF PERFORMANCE SHARE AWARDS

 

In the event of:

 

(a)           any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation or rights issue or any consolidation, sub-division or reduction); or

 

(b)           the implementation by the Company of a demerger or the payment by the Company of a dividend in specie or a super-dividend which would otherwise materially affect the value of a Performance Share Award,

 

then the terms of a Performance Share Award (including, if relevant, the Performance Conditions applicable thereto) shall be adjusted in such manner as the Committee shall determine in its absolute discretion provided that no adjustment shall be made pursuant to this Rule 17 unless and until the auditors for the time being of the Company (acting as experts not arbitrators) shall confirm in writing to the Committee that such adjustment is in their opinion fair and reasonable.

 

18.          RIGHTS ATTACHING TO SHARES ISSUED OR TRANSFERRED PURSUANT TO AWARDS

 

18.1         All Shares issued or transferred pursuant to a Performance Share Award shall be of equal rank in all respects with the Shares in issue at the date of transfer or issue save as regards any rights attaching to such Shares by reference to a record date prior to the date of transfer or issue.

 

18.2        Any Shares acquired pursuant to a Performance Share Award shall be subject to the articles of association of the Company from time to time.

 

15

 

19.          AVAILABILITY OF SHARES

 

19.1         The Company shall at all times keep available for issue sufficient authorised but unissued Shares to satisfy all Performance Share Awards under which Shares may be allotted or shall otherwise procure that Shares or Treasury Shares are available for transfer in satisfaction of Performance Share Awards.

 

19.2         If and so long as the Shares are listed on The Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange, the Company shall make application to the UK Listing Authority and to the London Stock Exchange for any Shares allotted pursuant to a Performance Share Award to become admitted to such listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange.

 

20.          ADMINISTRATION AND AMENDMENT

 

20.1         Subject to Rules 20.2 and 20.3, the decision of the Remuneration Committee shall be final and binding in all matters relating to the Plan and it may at any time discontinue the grant of further Performance Share Awards or amend any of the provisions of the Plan in any way it thinks fit.

 

20.2         The Remuneration Committee shall not make any amendment that would materially prejudice the interest of an existing Participant except with the prior consent of the Participant.

 

20.3         No amendment to the advantage of Employees or Participants may be made to the basic structure of the Plan (as determined by the Committee but including, without limitation, the definition of Employee, the limits under Rules 4 and 5, the terms of Shares to be provided under the Plan, the adjustment provisions of Rule 17, the rights attaching to Shares and the amendment powers in this Rule 20) without the prior approval of the Company in general meeting except in the case of a minor amendment to benefit the administration of the Plan or an amendment to take account of any applicable legislation or change in law or to obtain or maintain favourable tax, exchange control or regulatory treatment for Employees or Participants or any member of the Group.

 

21.          GENERAL

 

21.1         The Plan constitutes an employee share scheme for the purposes of section 743 of the Companies Act 1985 (being a scheme for encouraging or facilitating the holding of Shares). Any member of the Group may provide money to the Trustee or any other person to enable them or him to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent not prohibited by section 151 of the Companies Act 1985.

 

21.2         Participation in the Plan by a Participant is a matter entirely separate from, and does not affect, the terms and conditions of his office or employment.

 

21.3         An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of his office or employment with any

 

16

 

company for any reason whatsoever (whether such cessation is lawful or unlawful) insofar as those rights arise, or may arise, from his ceasing to have rights under or be entitled to exercise any Performance Share Award under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s terms of employment shall be deemed to be varied accordingly.

 

21.4         Any notice or other document required to be given under or in connection with the Plan may be given to a Participant electronically, delivered to a Participant or sent by post to him at his home address according to the records of his employing company or such other address as may appear to the Company to be appropriate. Any notice or other document required to be given to the Company under or in connection with the Plan may be given to the Company electronically, delivered or sent by post to it at its registered office (or such other place or places as the Committee may from time to time determine and notify to Participants). Notices sent by post shall be deemed to have been given on the day following the date of posting.

 

21.5         Benefits under the Plan shall not be pensionable.

 

21.6         The Company, or where the Committee so directs any Subsidiary, shall pay the appropriate stamp duty on behalf of Participants in respect of any transfer of Shares on the exercise of Performance Share Awards.

 

21.7         The rules of the Plan shall be governed by, and construed in accordance with, the laws of England and Wales.

 

17

Exhibit 4.1

 

PRUDENTIAL PLC

 

THE PRUDENTIAL BUSINESS UNIT PERFORMANCE PLAN

 

 

Approved by the Company in general meeting on 18
 May 2006, amended by the board of directors 29
 September 2006 and further amended by the
 Remuneration Committee on 19 February 2009

 

 

 

CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS
    	
III
    
	
 
    	
 
    	
 
    
	
2.
    	
GRANT OF BUSINESS   PERFORMANCE AWARDS
    	
V
    
	
 
    	
 
    	
 
    
	
3.
    	
PERFORMANCE CONDITIONS
    	
VI
    
	
 
    	
 
    	
 
    
	
4.
    	
PLAN LIMITS
    	
VI
    
	
 
    	
 
    	
 
    
	
5.
    	
INDIVIDUAL LIMITS
    	
VII
    
	
 
    	
 
    	
 
    
	
6.
    	
DIVIDENDS
    	
VIII
    
	
 
    	
 
    	
 
    
	
7.
    	
VESTING OF BUSINESS   PERFORMANCE AWARDS
    	
VIII
    
	
 
    	
 
    	
 
    
	
8.
    	
LAPSE OF BUSINESS   PERFORMANCE AWARDS
    	
VIII
    
	
 
    	
 
    	
 
    
	
9.
    	
CESSATION OF EMPLOYMENT
    	
IX
    
	
 
    	
 
    	
 
    
	
10.
    	
RELEASE OF BUSINESS   PERFORMANCE AWARDS
    	
X
    
	
 
    	
 
    	
 
    
	
11.
    	
GENERAL OFFER FOR THE   COMPANY
    	
XI
    
	
 
    	
 
    	
 
    
	
12.
    	
SCHEME OF ARRANGEMENT
    	
XI
    
	
 
    	
 
    	
 
    
	
13.
    	
VOLUNTARY WINDING-UP
    	
XII
    
	
 
    	
 
    	
 
    
	
14.
    	
DETERMINATION OF VESTING   LEVEL
    	
XII
    
	
 
    	
 
    	
 
    
	
15.
    	
EXCHANGE OF BUSINESS   PERFORMANCE AWARDS
    	
XIII
    
	
 
    	
 
    	
 
    
	
16.
    	
DEMERGER
    	
XIII
    
	
 
    	
 
    	
 
    
	
17.
    	
ADJUSTMENT OF BUSINESS   PERFORMANCE AWARDS
    	
XIII
    
	
 
    	
 
    	
 
    
	
18.
    	
RIGHTS ATTACHING TO SHARES   ISSUED OR TRANSFERRED PURSUANT TO AWARDS
    	
XIV
    
	
 
    	
 
    	
 
    
	
19.
    	
AVAILABILITY OF SHARES
    	
XIV
    
	
 
    	
 
    	
 
    
	
20.
    	
ADMINISTRATION AND AMENDMENT
    	
XIV
    
	
 
    	
 
    	
 
    
	
21.
    	
GENERAL
    	
XIV
    
	
 
    	
 
    	
 
    
	
CONTENTS
    	
II
    
				

 

 

THE PRUDENTIAL BUSINESS UNIT PERFORMANCE PLAN

 

The Company and any of its Subsidiaries may nominate any of their employees to participate in the Plan and the Subsidiaries may bear the associated costs of any such participation as determined by the Company.

 

1.             DEFINITIONS

 

1.1           In this Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings, namely:

 

Adoption Date means the date of the adoption of the Plan by the Company in general meeting;

 

Average Market Value means in relation to a Share, the average of the Market Value of such a Share during the month after the announcement of the Company’s results for the immediately preceding Financial Year (calculated on such appropriate basis as the Committee may determine);

 

Award Letter means the document setting out the rights and obligations attaching to a Business Performance Award and which may incorporate by reference the rules of the Plan;

 

Business Performance Award means an award granted in the form referred to in Rule 2.1 of this Plan entitling a Participant to acquire a number of Shares and to be paid a cash sum subject to the terms of the Plan;

 

Cause means (i) gross misconduct; (ii) gross negligence; (iii) insubordination; (iv) conviction of a criminal offence (other than a road traffic offence not subject to a custodial sentence); (v) continued substantial non-performance of duties; (vi) breach of any non-competition or non-solicitation provision in any agreement to which the Participant is a party; or (vii) any other ground which would entitle the employing company to terminate the Participant’s employment summarily and without notice under the terms of the employment contract or under the law of the jurisdiction applicable to the Participant’s employment at the time of such termination;

 

the Committee means the Remuneration Committee of the board of directors of the Company or any other duly authorised committee;

 

the Company means Prudential plc;

 

Control has the meaning given to that word by section 840 of the Taxes Act;

 

Date of Grant means the date on which a Business Performance Award is granted;

 

Dealing Day means any day on which the London Stock Exchange is open for business;

 

Employee means any employee or executive director of a member of the Group whose terms of service require him to devote substantially the whole of his working time to the businesses of the Group and who has not given or been given notice terminating his employment;

 

Executive Share Scheme means any employee share scheme adopted by the Company under which individuals may be selected for participation at the discretion of the body administering that scheme;

 

Financial Year means an accounting reference period of the Company as defined in accordance with section 224 of the Companies Act 1985;

 

 

Grant Period means the period of 42 days commencing on any of the following:

 

(a)                                  the Adoption Date;

 

(b)                                 the day on which the Company makes an announcement of its results for the last preceding financial year, half year, quarter or other period; or

 

(c)                                  any day on which the Committee resolves that exceptional circumstances exist which justify the grant of Business Performance Awards and for the avoidance of doubt the hire of a new Employee may fall to be treated as such an exceptional circumstance;

 

the Group  means the Company and the Subsidiaries and member of the Group shall be construed accordingly;

 

Market Value means, in relation to a Share on any Dealing Day, the middle market quotation for a Share as derived from the Daily Official List of the London Stock Exchange for that Dealing Day;

 

Participant means any individual who holds a subsisting Business Performance Award (including, where the context permits, the legal personal representative of a deceased Participant);

 

Performance Conditions mean the conditions specified by the Committee at the Date of Grant in relation to a Business Performance Award or as amended from time to time;

 

Performance Period means unless foreshortened pursuant to Rules 9, 11, 12, 11.1 or 16 of this Plan a period of three years commencing on the Start Date during which the Performance Condition is to be satisfied or such longer period as the Committee may specify for specific Participants;

 

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

 

Share Plan Committee means the committee established by the board of the Company to administer the Plan;

 

Shares means fully paid ordinary shares in the capital of the Company (or shares representing those shares following any reorganisation of the share capital of the Company);

 

Start Date means in relation to a Business Performance Award the beginning of the Financial Year in which the Award is granted or such later date as may be specified by the Committee on the Date of Grant;

 

Subsidiary means any subsidiary of the Company within the meaning of section 736 of the Companies Act 1985 over which the Company has Control;

 

Taxes Act means the Income and Corporation Taxes Act 1988;

 

Treasury Shares means any Shares held as treasury shares by the Company within the meaning of section 162A(3) of the Companies Act 1985;

 

Trustee means the trustee from to time of any employee trust which the Committee selects to grant and/or satisfy Business Performance Awards;

 

 

US Taxpayer means a person who is subject to taxation under the tax rules of the United States of America;

 

Vesting means becoming entitled to the payment of cash or the issue or transfer of Shares pursuant to a Business Performance Award and Vest shall be construed accordingly; and

 

Vesting Date means the date of the determination by the Committee under rule 7 of:

 

(a)                                  the extent to which the Performance Conditions attaching to a Business Performance Award have been satisfied; and

 

(b)                                 the number of Shares (if any) in respect of which a Business Performance Award shall be released.

 

1.2           Where the context permits the singular shall include the plural and vice versa and the masculine shall include the feminine.  Headings shall be ignored in construing the Plan.

 

1.3           References to any act of Parliament shall include any statutory modification, amendment or re-enactment thereof.

 

2.             GRANT OF BUSINESS PERFORMANCE AWARDS

 

2.1           The Committee may, during a Grant Period, grant Business Performance Awards to Employees selected by the Committee in its absolute discretion. A Business Performance Award shall allow a Participant to be paid a cash sum and to acquire a number of Shares in such proportions as the Committee may determine at the Date of Grant of a Business Performance Award.

 

2.2           To the extent that a Business Performance Award comprises of Shares, the Committee may grant a Business Performance Award in the form of a nil cost option, a right to acquire Shares, a conditional allocation of Shares or in such other form as may confer on the Participant an equivalent economic benefit.

 

2.3           Nothing in this Plan or in any Employee’s contract of employment shall be construed as giving to any Employee a right to be considered for participation in the Plan or to receive the grant of any Business Performance Award.

 

2.4           The grant of a Business Performance Award and/or the payment of the cash sum and the delivery of Shares upon release thereof shall be conditional on the Participant agreeing to comply with any arrangements specified by the Company for the payment of taxation and any social security contributions in respect of the Business Performance Award (including without limitation the right of the Company to deduct any taxation or social security liability from the cash sum and to arrange the sale on his behalf of sufficient Shares to satisfy any taxation or social security liability on his part which the Company or any member of the Group may be liable to withhold).

 

2.5           A Participant shall not have any beneficial ownership of the Shares which are the subject of a Business Performance Award granted to him, and accordingly shall not have any right to any dividends or voting rights attaching to the Shares save as set out in Rule 6 below.

 

2.6           A Participant shall not be required to pay for the grant of a Business Performance Award.

 

2.7           An Employee to whom a Business Performance Award is granted may, by notice in writing to the Company given within 30 days after the Date of Grant, renounce in whole or in part his rights under the Business Performance Award.

 

 

2.8           As soon as practicable after the Date of Grant the Committee shall procure the issue to a Participant of an Award Letter in respect of the Business Performance Award. The Award Letter shall specify, inter alia, the following:

 

(a)                                  the dates on which the relevant Performance Period shall start and end;

 

(b)                                 the details of the Performance Conditions imposed in accordance with Rule 3.1 and the manner in which the Performance Conditions will determine the number of Shares that may be acquired on Vesting of the Business Performance Award;

 

(c)                                  whether a Business Performance Award shall be enhanced in accordance with Rule 6; and

 

(d)                                 the proportions of cash and Shares to which the Business Performance Award relates.

 

2.9           No Business Performance Award shall be granted under the Plan later than the tenth anniversary of the Adoption Date.

 

2.10         Every Business Performance Award granted hereunder shall be personal to the Participant and, except in the event of the death of a Participant, neither the Business Performance Award nor the benefit thereof may be transferred, assigned, charged or otherwise alienated Any transfer or exercise otherwise than as permitted under this Rule 2.10 shall cause the Business Performance Award to lapse.

 

3.             PERFORMANCE CONDITIONS

 

3.1           Each Business Performance Award shall be subject to one or more Performance Conditions which will determine the amount of cash which the Participant will be entitled to be paid and the number of Shares which the Participant will be entitled to acquire on Vesting of the Business Performance Award.  The Committee may impose different Performance Conditions for Performance Awards granted to different Participants in the same Financial Year or to Participants in different Financial Years.

 

3.2           The Performance Conditions may be amended after the Date of Grant if:

 

(i)             those circumstances which prevailed at the Date of Grant and which were relevant to the Performance Conditions when they were originally imposed have subsequently changed; and

 

(ii)          the Committee is satisfied that any such amended Performance Conditions would be a fairer measure of performance and the Committee reasonably considers that such amended Performance Conditions are consistent with and no more or less demanding to satisfy than the original Performance Conditions.

 

4.             PLAN LIMITS

 

4.1           No Business Performance Award shall be granted on any day to the extent that the result of that grant would be that:

 

(a)                                  the aggregate number of Shares that could be issued on Vesting or release of that Business Performance Award when added to the number of Shares that:

 

(i)             could be issued on the exercise, vesting or release of any other subsisting Business Performance Award granted during the preceding ten years under the Plan;

 

 

(ii)          have been issued on Vesting or release of any subsisting Business Performance Award granted during the preceding ten years under the Plan;

 

(iii)       could be issued pursuant to any other awards, options or rights granted during the preceding ten years under any other employee share scheme adopted by the Company; and

 

(iv)      have been issued pursuant to any other awards, options or rights granted during the preceding ten years under any other employee share scheme adopted by the Company

 

would exceed 10 per cent of the ordinary share capital of the Company from time to time in issue;

 

(b)                                 the aggregate of the number of Shares that could be issued on Vesting or release of that Business Performance Award when added to the number of Shares that:

 

(i)             could be issued on Vesting or release of any other subsisting Business Performance Award granted during the preceding ten years under the Plan;

 

(ii)          have been issued on Vesting or release of any subsisting Business Performance Award granted during the preceding ten years under the Plan;

 

(iii)       could be issued pursuant to any other awards, options or rights granted during the preceding ten years under any other Executive Share Scheme adopted by the Company; and

 

(iv)      have been issued pursuant to any other awards, options or rights granted during the preceding ten years under any other Executive Share Scheme adopted by the Company

 

would exceed 5 per cent of the ordinary share capital of the Company from time to time in issue.

 

4.2           Where Shares are transferred or to be transferred from treasury under this Plan or any other employees’ share scheme established by the Company and for as long as it remains best practice to do so in accordance with institutional shareholder guidelines, such Shares shall be treated, for the purpose of this Rule 4 as Shares that are issued or issuable.

 

5.             INDIVIDUAL LIMITS

 

5.1           A Business Performance Award shall not be granted to an Employee if such grant would cause the maximum cash sum payable and the total Average Market Value of the maximum number of Shares that may be acquired upon exercise or release of the Business Performance Award (as measured at the Date of Grant) when aggregated with the maximum cash sum payable and the total Average Market Value of the maximum number of Shares that may be acquired pursuant to any other Business Performance Award granted to the Employee under the Plan or any award granted under the Prudential Performance Share Plan in the same Financial Year, to exceed 3.5 times the Employee’s annual basic salary in respect of his employment with the Group as at the Date of Grant.

 

5.2           In case of an Employee who is working and based in the United States or such other jurisdiction as the Committee determines at the Date of Grant, the limit referred to in Rule 5.1 above shall be 5.5 times the Employee’s annual basic salary in respect of his employment with the Group as at the Date of Grant.

 

5.3           In the case of an Employee who is an executive director of the Company, the total Average Market Value of the maximum number of Shares that may be acquired upon

 

 

exercise or release of the Business Performance Award shall represent at least 50 per cent. of the sum of (i) the total Average Market Value (as measured at the Date of Grant); and (ii) the maximum cash sum payable to the Employee pursuant to the Business Performance Award.

 

6.             DIVIDENDS

 

If a dividend is payable on Shares and the Committee has so determined at the Date of Grant of a Business Performance Award, the Business Performance Award shall be enhanced by increasing the number of Shares comprised in the Business Performance Award by an additional number of Shares having a Market Value at the time the dividend is paid equivalent to the gross or net of tax value of the dividend and the enhanced Business Performance Award shall be exercisable in accordance with these rules on the same basis as the original Business Performance Award, unless the Committee has determined otherwise at the Date of Grant.

 

7.             VESTING OF BUSINESS PERFORMANCE AWARDS

 

7.1           Save as otherwise permitted in the rules of the Plan, a Business Performance Award shall only Vest if the Participant remains an employee of a member of the Group until the Vesting Date.

 

7.2           Notwithstanding rule 7.1, a Business Performance Award shall not Vest unless the Committee is satisfied that the underlying financial performance of the Company during the Performance Period is such as to justify the Vesting of such award.

 

7.3           As soon as reasonably practicable after the end of the last Financial Year of the Performance Period the Committee shall determine whether and the extent to which the Performance Conditions imposed under Rule 3.1 and the requirement of Rule 7.2 have been satisfied and shall notify a Participant of its determination.

 

7.4           Save as otherwise provided in these Rules, if a Business Performance Award Vests, the Participant shall be entitled to be paid such cash sum and issued or transferred such number of Shares as is determined by the Committee in accordance with the Performance Conditions imposed under Rule 3.

 

8.             LAPSE OF BUSINESS PERFORMANCE AWARDS

 

8.1           Notwithstanding any other provisions in these rules, a Business Performance Award shall lapse automatically on the earliest of:

 

(a)                                  the Participant being declared bankrupt or entering into any general composition with or for the benefit of his creditors, including a voluntary arrangement under the Insolvency Act 1986;

 

(b)                                 the dismissal of the Participant for Cause;

 

(c)                                  the date on which the Participant ceases to be an Employee for any reason mentioned in Rule 9.2 below unless the Committee exercises its discretion under Rule 9 to allow the Business Performance Award to Vest or be retained;

 

(d)                                 the date on which the Participant ceases to be an Employee for any reason other than one referred to in Rule 9.2 below whether such cessation is lawful or unlawful;

 

(e)                                  the date on which the Committee determines that the Performance Conditions for a Performance Period have not been satisfied or the underlying performance of the Company does not justify vesting; and

 

 

(f)                                    following a general offer for the Company, scheme of arrangement, winding-up of the Company or demerger in accordance with Rule 11.4, 12.2, 12.6, 13.2 and 16.2 below.

 

9.             CESSATION OF EMPLOYMENT

 

9.1           Save as otherwise provided in Rule 9.2 if a Participant ceases to be an Employee before the Vesting Date, the Business Performance Award shall lapse on the date of such cessation.

 

9.2           If a Participant ceases to be an Employee before the Vesting Date by reason of:

 

(a)                                  death;

 

(b)                                 injury or disability (as determined by the Committee);

 

(c)                                  retirement at or after the date on which he is bound or expected to retire under his contract of employment;

 

(d)                                 his employing company ceasing to be a member of the Group;

 

(e)                                  the business (or part of the business) in which he is employed being transferred to a transferee which is not a member of the Group; or

 

(f)                                    for any other reason at the Committee’s discretion

 

the relevant Business Performance Award shall lapse upon such cessation unless the Committee in its absolute discretion determines otherwise in which case Rules 9.3 to 9.6 shall apply to the Award depending on the reason for the cessation. The Committee shall exercise its discretion under this rule (if at all) within 90 days of the date of cessation.

 

9.3           If a Participant ceases to be an Employee before the Vesting Date by reason of death, injury or disability (as determined by the Committee), the relevant Performance Period shall be treated as coming to an end and the Business Performance Award relating to that Performance Period shall Vest on cessation of employment. The Committee may determine the cash sum payable to the Participant and the number of Shares in respect of which the Business Performance Award shall Vest in its absolute discretion having regard to the extent to which the relevant Performance Conditions have been satisfied at the date of the cessation of employment and the number of complete months that have elapsed during the Performance Period up to the cessation of employment.

 

9.4           If a Participant ceases to be an Employee before the Vesting Date by reason of retirement at or after the date on which he is bound or expected to retire under his contract of employment, the Participant’s Business Performance Award shall continue and Vest at the end of the Performance Period to the extent that the Performance Conditions are satisfied at the end of the Performance Period. The cash sum payable to the Participant and the number of Shares in respect of which the Business Performance Award shall Vest shall be the number derived from the measurement of the relevant Performance Conditions as at the end of the Performance Period multiplied by the fraction A/B (where A is that part of the Performance Period (measured in complete months) from the beginning of the Performance Period to the date of retirement and B is 36 (or such other greater number as equals the number of months in the full Performance Period)).  Notwithstanding the above, the Committee may, in exceptional circumstances, determine that the Business Performance Award may Vest immediately upon the date of retirement or a later date before the end of the Performance Period and/or that it may Vest in respect of a greater or lesser amount of cash and number of Shares than is otherwise determined in accordance with this Rule 9.4.

 

 

9.5           If a Participant ceases to be an Employee before the Vesting Date by reason of his employing company ceasing to be a member of the Group or the business (or part of the business) in which he is employed being transferred to a transferee which is not a member of the Group, the Committee may in its absolute discretion having regard to the circumstances and timing of the relevant transaction determine whether:

 

(a)                                  the relevant Performance Period shall be treated as coming to an end and the Business Performance Award relating to that Performance Period shall Vest on cessation of employment in which case the cash sum payable to the Participant and the number of Shares in respect of which the Business Performance Award shall Vest shall be determined by the Committee in its absolute discretion having regard to the extent to which the relevant Performance Conditions have been satisfied at the date of the transfer or sale and/or, as the Committee considers appropriate, the performance of the Company and/or the circumstances of the relevant transaction and the number of complete months that have elapsed during the Performance Period before the transfer or sale; or

 

(b)                                 the Business Performance Award shall continue in which case the Committee will make arrangements to substitute the Shares which are the subject of a Business Performance Award for a cash entitlement or shares or other securities of an appropriate company in the group to which the employing company or business (or part of the business) in which the Participant is employed has been sold or transferred having such value at the date of the sale or transfer as the Committee shall decide so that the Business Performance Award shall Vest at the end of the Performance Period and be subject to the terms of the Plan but subject to such amendments and variations to the rules of the Plan and the applicable performance conditions as the Committee determines is appropriate in the circumstances.

 

9.6           If a Participant ceases to be an Employee before the Vesting Date for any other reason at the Committee’s discretion, the Committee may determine in its absolute discretion when the relevant Performance Period shall be treated as coming to an end and the Business Performance Award relating to that Performance Period shall Vest (whether at the date of cessation of employment or later) and the cash sum and the number of Shares in respect of which the Business Performance Award shall Vest having regard to the extent to which the relevant Performance Conditions have been satisfied at the date determined by the Committee and the number of complete months that have elapsed from the beginning the Performance Period up to the cessation of employment.

 

10.          RELEASE OF BUSINESS PERFORMANCE AWARDS

 

10.1         Subject to any necessary consents and to compliance by the Participant with the terms of this Plan, the Participant shall be entitled to and the Company shall procure within 30 days after the Vesting Date or any earlier date on which the Business Performance Award Vests under these rules (or as soon as is practicable after such 30 day period, but for US Taxpayers in no event later than 2.5 months after the calendar year in which the Business Performance Award Vests(1) the payment of the cash sum to which the Participant is entitled and the issue or transfer to the Participant (or to his nominee) of the full legal and beneficial ownership of the Shares to which he is entitled free from any liens, charges or encumbrances.  The Company shall (unless the Shares are to be issued in uncertified form) as soon as practicable deliver or procure the delivery to the Participant (or his nominee) of a definitive share certificate or other evidence of title in respect of such Shares.

 

(1)          Operating note: if the Committee makes its determination in April/May as to the satisfaction of Performance Conditions and number of Shares that will be released in respect of a US Taxpayer’s Business Performance Award, any Shares or cash must be delivered by 15 March of the following year. This avoids a tax charge under section 409A of the US Internal Revenue Code 1986.

 

 

10.2         Notwithstanding any other provision of this Plan, the Participant shall not be entitled and the Company shall not be obliged to issue or procure the transfer of Shares or pay cash in connection with a Business Performance Award or take any other action under the Plan unless and until the Company is satisfied that any applicable securities law, any requirement under any listing agreement between the Company and any securities exchange, automated quotation system or any regulatory body or any other law, regulation or contractual obligation of the Company can be and have been complied with in full.  The Company may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issue or transfer of Shares under this Plan. Certificates representing Shares will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations and other obligations of the Company, and a legend or legends may be placed thereon to reflect such restrictions.

 

10.3         The Company may decide, if it is appropriate for legal, regulatory or tax reasons, to make a cash payment to a Participant, in lieu of delivering Shares, of an equivalent value to the Shares but subject to any necessary deductions required by law.

 

11.          GENERAL OFFER FOR THE COMPANY

 

11.1         If any person (either alone or together with any person acting in concert with him) obtains Control of the Company as a result of making a general offer to acquire all or some of the Shares (other than those which are already owned by him and/or any person acting in concert with him) and such offer becomes or is declared unconditional in all respects, or having obtained Control, makes such an offer, the Committee may, acting fairly and reasonably and having regard to the circumstances of the general offer, determine in its discretion whether a Participant’s Business Performance Awards:

 

(a)                                  shall be automatically exchanged for a new award under Rule 15; or

 

(b)                                 shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

11.2         If the Committee determines that a Business Performance Award Vests under Rule 11.1(b), the Business Performance Award shall be released in respect of the number of Shares determined under Rule 14 within one month of the offer becoming or being declared unconditional in all respects.

 

11.3         If the Committee determines that a Business Performance Award Vests under Rule 11.1(b) it may in addition determine in its discretion that the Participant may voluntarily agree to exchange his Business Performance Award for a new award under Rule 15.

 

11.4         A Business Performance Award shall, without prejudice to the operation of Rule 15, lapse in respect of such number of Shares as to which it has not Vested as determined under this Rule 11 and Rule 14.

 

12.          SCHEME OF ARRANGEMENT

 

12.1         If a court shall direct that a meeting of the holders of Shares be convened pursuant to section 425 of the Companies Act 1985 for the purpose of considering a scheme of arrangement of the Company or its amalgamation with any other company or companies, Business Performance Award the Committee may, acting fairly and reasonably and having regard to the circumstances of the scheme of arrangement, determine, in its discretion whether, upon the scheme of arrangement being sanctioned by the court (the Relevant Condition), a Participant’s Business Performance Award:

 

(a)                                  shall be automatically exchanged for a new award under Rule 15; or

 

 

(b)                                 shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

12.2         If the Relevant Condition is not satisfied, the Business Performance Award shall continue. If the Relevant Condition is satisfied, the Business Performance Award shall without prejudice to the operation of Rule 15 lapse automatically on the day immediately after the date on which the scheme of arrangement is sanctioned by the court.

 

12.3         If the Committee determines that a Business Performance Award Vests under Rule 12.1(b), the Committee shall endeavour to procure that the scheme of arrangement shall, so far as it relates to Shares, be extended to such Participant as if each Share determined under Rule 14 had been allotted and issued, or transferred, to him by that time.

 

12.4         If the Committee determines that a Business Performance Award Vests under Rule 12.1(b) it may in addition determine in its discretion that the Participant may voluntarily agree to exchange his Business Performance Award under Rule 15.

 

12.5         Business Performance Awards shall not Vest under the foregoing provisions of this Rule 12 if the purpose and effect of the scheme of arrangement is to create a new holding company for the Company, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the scheme of arrangement.  A Business Performance Award will in such circumstances continue and be treated as an award over such number of Shares in the holding company as is determined to be appropriate by the Committee, and reference in this Plan to “the Company” shall be construed as references to such holding company as appropriate.

 

12.6         A Business Performance Award shall, without prejudice to the operation of Rule 15, lapse in respect of such number of Shares as to which it has not Vested as determined under this Rule 12 and Rule 14.

 

13.          VOLUNTARY WINDING-UP

 

13.1         If notice is duly given of a resolution for a voluntary winding-up of the Company then the Committee, acting fairly, reasonably and objectively, may in its discretion allow Business Performance Awards to Vest.  A Participant’s Business Performance Award shall Vest to the extent determined by the Committee in its absolute discretion under Rule 14.

 

13.2         A Business Performance Award shall lapse in respect of such amount of cash and such number of Shares as to which it has not Vested as determined under Rule 11.1 and Rule 14.

 

14.          DETERMINATION OF VESTING LEVEL

 

Where a Business Performance Award Vests before the expiry of the relevant Performance Period under Rules 11 to 11.1, the cash sum payable to a Participant and the number of Shares in respect of which the Business Performance Award shall Vest shall be such amount of cash and number of Shares as is determined by the Committee in its absolute discretion taking into account: (i) the performance of the Company (including, without limitation, the extent to which the Performance Conditions have been or are likely to be achieved as at the date of the relevant event to which Rules 11 to 13 refer) and (ii) the time elapsed between the Date of Grant and the relevant event to which Rules 11 to 13 refer and in this regard the Committee may, but shall not be obliged to, consider whether it is appropriate to apply one of the following percentages to a Business Performance Award to determine the extent to which a Business Performance Award shall Vest:

 

(a)                                  33% if the relevant event occurs during the first year of the Performance Period;

 

 

(b)                                 67%  if the relevant event occurs during the second year of the Performance Period; and

 

(c)                                  100%  if the relevant event occurs during the third year of the Performance Period.

 

15.          EXCHANGE OF BUSINESS PERFORMANCE AWARDS

 

15.1         Where Business Performance Awards are to be exchanged under this Rule, any Business Performance Award (the Old Right) may (if the exchange is voluntary under Rule 11.3 or Rule 12.4 or shall (if the exchange is automatic under Rule 11.1(a) or Rule 12.1(a) be surrendered by the Participant in consideration of the grant to the Participant of a new award (the New Right) which, in the opinion of the Committee, is equivalent to the Old Right but relates to shares (or a combination of cash and shares) in a different company. The provisions of the Plan shall be construed in relation to the New Right as if:

 

(a)                                  the New Right were a Business Performance Award granted under the Plan at the same time as the Old Right;

 

(b)                                 references to the Performance Conditions were references to such new performance conditions relating to the business or shares of the company whose shares are subject to the New Right (or any member of its group) as the Committee may consider appropriate in the circumstances;

 

(c)                                  references to the Company and the Group were references to the company whose shares are subject to the New Right and its group; and

 

(d)                                 references to Shares were references to shares in the new grantor.

 

16.          DEMERGER

 

16.1         If the Committee becomes aware that the Company is or is expected to be affected by any demerger, dividend in specie, super dividend or other transaction which, in the opinion of the Committee, would materially affect the current or future value of any Business Performance Awards (whether by increasing or reducing the value), the Committee, acting fairly, reasonably and objectively, may in its absolute discretion treat some or all of the Business Performance Awards as Vested to the extent to which the Performance Conditions have or are likely to have been met at that time. The Committee shall specify when such Vested Business Performance Award shall be released.

 

16.2         A Business Performance Award shall lapse in respect of such amount of cash and the number of Shares as to which it has not Vested in accordance with this Rule 16.

 

17.          ADJUSTMENT OF BUSINESS PERFORMANCE AWARDS

 

In the event of:

 

(i)             any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation or rights issue or any consolidation, sub-division or reduction); or

 

(ii)          the implementation by the Company of a demerger or the payment by the Company of a dividend in specie or a super-dividend which would otherwise materially affect the value of a Business Performance Award,

 

then the terms of a Business Performance Award (including, if relevant, the Performance Conditions applicable thereto) shall be adjusted in such manner as the Committee shall determine in its absolute discretion provided that no adjustment shall be made pursuant to this Rule 17 unless and until the auditors for the time being of the Company (acting as

 

 

experts not arbitrators) shall confirm in writing to the Committee that such adjustment is in their opinion fair and reasonable.

 

18.          RIGHTS ATTACHING TO SHARES ISSUED OR TRANSFERRED PURSUANT TO AWARDS

 

18.1         All Shares issued or transferred pursuant to a Business Performance Award shall be of equal rank in all respects with the Shares in issue at the date of transfer or issue save as regards any rights attaching to such Shares by reference to a record date prior to the date of transfer or issue.

 

18.2         Any Shares acquired pursuant to a Business Performance Award shall be subject to the articles of association of the Company from time to time.

 

19.          AVAILABILITY OF SHARES

 

19.1         The Company shall at all times keep available for issue sufficient authorised but unissued Shares to satisfy all Business Performance Awards under which Shares may be allotted or shall otherwise procure that Shares or Treasury Shares are available for transfer in satisfaction of Business Performance Awards.

 

19.2         If and so long as the Shares are listed on the UK Listing Authority and admitted to trading on the Official List of the London Stock Exchange, the Company shall make application to the UK Listing Authority and to the London Stock Exchange for any Shares allotted pursuant to a Business Performance Award to become admitted to such listing on the Official List of the UK Listing Authority and to trading on the Official List of the London Stock Exchange.

 

20.          ADMINISTRATION AND AMENDMENT

 

20.1         Subject to Rules 20.2 and 20.3, the decision of the Remuneration Committee shall be final and binding in all matters relating to the Plan and it may at any time discontinue the grant of further Business Performance Awards or amend any of the provisions of the Plan in any way it thinks fit.

 

20.2         The Remuneration Committee shall not make any amendment that would materially prejudice the interest of an existing Participant except with the prior consent of the Participant.

 

20.3         No amendment to the advantage of Employees or Participants may be made to the basic structure of the Plan (as determined by the Committee but including, without limitation, the definition of Employee, the limits under Rules 4 and 5, the terms of Shares to be provided under the Plan, the adjustment provisions of Rule 17, the rights attaching to Shares and the amendment powers in this Rule 20) without the prior approval of the Company in general meeting except in the case of a minor amendment to benefit the administration of the Plan or an amendment to take account of any applicable legislation or change in law or to obtain or maintain favourable tax, exchange control or regulatory treatment for Employees or Participants or any member of the Group.

 

21.          GENERAL

 

21.1         The Plan constitutes an employees’ share scheme for the purposes of section 743 of the Companies Act 1985 (being a scheme for encouraging or facilitating the holding of Shares). Any member of the Group may provide money to the Trustee or any other person to enable them or him to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent not prohibited by section 151 of the Companies Act 1985.

 

 

21.2         Participation in the Plan by a Participant is a matter entirely separate from, and does not affect, the terms and conditions of his office or employment.

 

21.3         An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of his office or employment with any company for any reason whatsoever (whether such cessation is lawful or unlawful) insofar as those rights arise, or may arise, from his ceasing to have rights under or be entitled to exercise any Business Performance Award under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s terms of employment shall be deemed to be varied accordingly.

 

21.4         Any notice or other document required to be given under or in connection with the Plan may be given to a Participant electronically, delivered to a Participant or sent by post to him at his home address according to the records of his employing company or such other address as may appear to the Company to be appropriate.  Any notice or other document required to be given to the Company under or in connection with the Plan may be given to the Company electronically, delivered or sent by post to it at its registered office (or such other place or places as the Committee may from time to time determine and notify to Participants).  Notices sent by post shall be deemed to have been given on the day following the date of posting.

 

21.5         Benefits under the Plan shall not be pensionable.

 

21.6         The Company, or where the Committee so directs any Subsidiary, shall pay the appropriate stamp duty on behalf of Participants in respect of any transfer of Shares on the exercise of Business Performance Awards.

 

21.7         The rules of the Plan shall be governed by, and construed in accordance with, the laws of England and Wales.Exhibit 4.2

 

 

PRIVATE AND CONFIDENTIAL

 

 

DATED

 

8 December 2010

 

 

PRUDENTIAL SERVICES LIMITED (1)

 

 

and

 

 

JOHN FOLEY

 

 

and

 

 

PRUDENTIAL PLC (3)

 

 

 

EXECUTIVE DIRECTOR CONTRACT OF EMPLOYMENT

 

 

 

PARTIES

 

(1)              PRUDENTIAL SERVICES LIMITED of Laurence Pountney Hill, EC4R 0HH (“the company”) and

 

(2)              JOHN FOLEY (“the Executive”)

 

(3)              PRUDENTIAL PLC of Laurence Pountney Hill, London, EC4R 0HH (“Prudential”)

 

1.                  DEFINITIONS

 

In this Agreement unless the context otherwise requires:-

 

“Board” means the Board of Directors of Prudential;

 

“Commencement Date” means 1st January 2011

 

“Prudential Group” means Prudential and each of its subsidiaries where “subsidiaries” is defined by section 1159 of the Companies Act 2006.

 

2.                  APPOINTMENT

 

(1)              The Company shall employ the Executive and the Executive shall serve the Company as Group Chief Risk Officer of Prudential plc and in other such capacity as may be agreed (“the Appointment”).  The Executive shall report to the Group Chief Executive and to the Chair of the Risk Committee.

 

(2)              The Appointment is deemed to be effective from the Commencement Date and shall, without prejudice to the provisions of clause 9(2), continue unless and until terminated by the Company giving to the Executive not less than 12 months’ prior written notice to expire at any time or the Executive giving to the Company not less than 12 months’ prior written notice to expire at any time.

 

(3)              Notwithstanding Clause 2(2) above, the Appointment shall automatically terminate without notice on the Executive attaining the age of 65.

 

3.                  DUTIES OF THE EXECUTIVE

 

(1)              During the Appointment the Executive shall use his best endeavours to promote the interests of the Company and each company in the Prudential Group and shall carry out his duties with all due expertise, diligence and technical skill, giving at all times the full benefit of his knowledge and experience.

 

(2)              The Executive shall perform such duties and exercise such powers in relation to the conduct and management of the affairs of the Prudential Group as may from time to time reasonably be assigned or communicated to or vested in him by the Board consistent with the nature of the Appointment.

 

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(3)              Where notice of termination has been served by either the Company or the Executive whether in accordance with clause 2(2) or otherwise, the Company shall be under no obligation to provide work for or assign any duties to the Executive for the whole or any part of the relevant notice period and may require him:

 

(i)                 not to attend any premises of the Company or any other company in the Prudential Group; and/or

 

(ii)              to resign with immediate effect from any offices he holds with the Company or any other company in the Prudential Group (and any related trusteeships); and/or

 

(iii)           to refrain from business contact with any customers, clients or employees of the Company or any other company in the Prudential Group.

 

The provision of clause 4(2) shall remain in full force and effect during any period of suspension under this clause 3(3).  For the avoidance of doubt the Executive will continue to be bound by duties of good faith and fidelity to the Company in any period during which he is not required to attend work.

 

(4)              The Board may also suspend all or any of the Executive’s duties and powers during any period in which the Company and/or the Board is carrying out an investigation into any alleged act or default of the Executive.  Such a suspension shall be on such terms as the Board considers expedient (including a term that the Executive shall not attend at the Company’s premises during such suspension) providing that:

 

(i)                 the Board on or before such suspension notifies the Executive in writing of such grounds; and

 

(ii)              during such suspension the Executive shall be entitled to the remuneration and benefits due under this Agreement.

 

(5)              The Executive shall at all times promptly give to the Company and the Board (in writing if so required) all such information and explanations concerning the affairs of any company within the Prudential Group as the Company or the Board shall require and of which the Executive is aware.

 

(6)              The Executive shall comply with all instructions and directions from time to time laid down by the Company and/or the Board for senior executives including those rules relating to holding and dealing in the shares of Prudential Group.  The Executive shall also comply with the requirements laid down by all external regulatory bodies.

 

(7)              The Executive shall allow the Company supervised access on reasonable notice to all or any of the properties in which he resides from time to time in order for the Company to assess, and, if the Company considers it desirable, to carry out at its own expense those security measures which the Company may consider advisable for the protection of the Executive.

 

4.                  PERFORMANCE OF DUTIES

 

(1)             During the continuance of the Appointment, the Executive shall (unless prevented by ill-health or accident or otherwise directed by the Board) devote such of his  time, attention and abilities to the business and interests of the Company or any other company in the Prudential Group as the proper performance of his duties hereunder demands.

 

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(2)              The Executive shall not (unless otherwise agreed by the Company and/or the Board) undertake any other business or profession, or be, or become directly or indirectly concerned, or interested in any other business or profession except as holder or beneficial owner, for the purpose only of a passive minority investment, of securities dealt in or on any recognised stock exchange (not exceeding 5 per cent of the total number or value of such securities from time to time in issue).

 

(3)              The Executive shall perform his duties at such offices of the Company in London or at such other locations as the Company or the Board may from time to time reasonably require.

 

5.                  REMUNERATION

 

(1)              During the Appointment the Company will pay the Executive an annual salary as separately notified, to accrue from day to day and to be payable by equal monthly instalments in arrears to a bank nominated by the Executive.  The rate of salary shall be subject to periodic review but shall not be reduced without the prior written agreement of the Executive.  The Company reserves the right to withhold or deduct from the Executive’s salary any amount owed by the Executive to the Company or any company in the Prudential Group.

 

(2)              The Executive will have the choice of the following two options with regards to retirement benefit:

 

I.                     To remain with his current Defined Benefit Scheme and salary supplement arrangement, or

 

II.                 To withdraw from the Defined Benefit Scheme and receive a 25% salary supplement

 

In the event that the Executive chooses option (II), he would also be eligible to join the Defined Contribution Scheme.

 

(3)              The Executive must notify the Company as early as practicable on the first day of any absence due to sickness or other incapacity.  Subject to production, if requested, of medical certificates satisfactory to the Company, full remuneration will continue to be payable notwithstanding the Executive’s incapacity for work due to sickness or accident (unless and until the Appointment shall be determined under any terms hereof) for the first six months of such incapacity.  During this period of incapacity, the Company shall only give notice terminating the Appointment on grounds of redundancy, falling within section 139 of The Employment Rights Act 1996 or those circumstances as set out in clause 9(2). Thereafter the Company may at its discretion discontinue the payment of remuneration under this Agreement in which event the rules of the Prudential Staff Long Term Incapacity Scheme as from time to time in force, will apply to the Executive.

 

(4)              If the Executive needs to undergo a medical examination at the request of the Company, the cost of this will be met by the Company and the Company’s medical adviser will be entitled to receive a copy of any report produced, to discuss it with the doctor who produced it and to discuss its conclusions with the Company.

 

(5)              If the Executive is incapable of performing his duties by reason of injury sustained wholly or partly as a result of negligence, nuisance or breach of any statutory duty on the part of any third party, only when and to the extent that compensation is recovered for loss of earnings from that third party by legal action or otherwise in so far as it is not repayable to the Department of Social Security, the Executive shall (insofar as lawful) repay to the Company the amount of any sick pay he has received.

 

(6)              The Executive, his wife and his  unmarried children below the age of 18 (or 24 if in full time education) will be eligible free of charge to participate with effect from the Commencement

 

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Date until termination of employment in the Prudential Group medical insurance scheme currently established with PruHealth.

 

(7)              The Executive may be eligible to participate in the remuneration plans available from time to time to senior executives of the Prudential Group (subject to the rules governing the availability of those benefits generally) which currently include:

 

(a)              the Annual Incentive Plan (“AIP”);

 

(b)             the Group Performance Share Plan (“GPSP”)

 

(c)              the Prudential Services Ltd Share Incentive Plan (“SIP”); and

 

(d)             the Prudential Savings Related Share Option Scheme (SAYE Scheme”),

 

details of which have been supplied to the Executive.

 

Any benefits under these plans are non-pensionable.

 

(8)              Participation in the Prudential AIP, GPSP, SIP, SAYE and any other incentive arrangement and Savings Related Share Option Scheme is a matter entirely separate from the Executive’s terms and conditions of employment; the Company has no contractual obligation to invite the Executive’s participation in any plan cycle; and in particular if the Executive’s employment shall terminate for whatever reason (whether lawfully or in breach of contract) he shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under any scheme which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.

 

(9)              So far as permitted by law, the Executive shall be entitled to an interest free season ticket loan.

 

6.                  EXPENSES

 

The Company, on production of the relevant receipts and/or invoices, shall reimburse the Executive for all traveling, hotel, entertainment and other out-of-pocket expenses properly incurred by him from time to time in the execution of his duties hereunder in accordance with the relevant rules of the Company for the time being in force.

 

7.                  HOLIDAY

 

The Executive shall be entitled to paid time off for breaks away from work in each calendar year (in addition to statutory holidays) as the proper performance of his  duties hereunder permits and in accordance with the guidelines laid down by the Company from time to time. Under normal circumstances this is not expected to exceed six weeks in any year.

 

8.                  POST TERMINATION RESTRICTIONS

 

(1)              The Executive undertakes that during the Appointment and (subject to clause 8(2)) for a period of 12 months following the termination of the Appointment (the “Exclusion Period”) he shall not whether on his own account or otherwise and whether directly or indirectly:

 

(a)              solicit, interfere with, endeavour to entice away or induce to leave their employment any director or senior manager who is then or was at the date of termination of the Appointment an employee of or engaged by the Company or any other company within

 

5

 

the Prudential Group and with whom the Executive had business dealings during the course of his employment in the 12 month period immediately prior to the termination of the Appointment.  Nothing in this clause shall prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any company within the Prudential Group; or

 

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(b)              solicit, interfere with or endeavour to or actually entice away from the Company or any company within the Prudential Group business orders, or custom for products or services similar to those being provided by the Company or any company within the Prudential Group from any person, firm or corporation who was at the date of termination of the Appointment, or had been at any time within the year ending on that date, a customer or in the habit of doing business with the Company or any company in the Prudential Group and with whom the Executive was directly concerned in the twelve months before the termination of the Appointment.  Nothing in this clause shall prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any company within the Prudential Group; or

 

(c)               carry on, set up, be employed, engaged or interested in a business anywhere in the UK, Europe, US or Asia which is or is about to be in competition with the business of the Company or any company within the Prudential Group as at the date of termination  with which the Executive was actively involved during the 12 month period immediately prior to termination of the Appointment, including (but not limited to) the businesses of the companies listed in Schedule 1 (or such other companies as may, from time to time, carry on such businesses).  It is agreed that in the event that any such company ceases to be in competition with the Company and/or any company within the Prudential Group, this clause 8(1)(c) shall, with effect from that date, cease to apply in respect of such company.  The provisions of this clause 8(1)(c) shall not, at any time following the termination of the Appointment, prevent the Executive from holding shares or other capital not amounting to more than 3% of the total issued share capital of any company whether listed on a recognised stock exchange or not and, in addition, shall not prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any company within the Prudential Group.

 

(2)              The period during which the restrictions referred to in clause 8 shall apply following the termination of the Appointment shall be reduced by the amount of time during which, if at all, the Company suspends the Employee under the provision of clause 3(3).

 

(3)              The Executive acknowledges and agrees that:

 

(a)               each of sub-clauses 8(1)(a) (b) and (c) hereof constitute an entirely separate and independent restriction on him;

 

(b)              the duration extent and application of each of the restrictions are no greater than is necessary for the reasonable protection of the proper interests of the Prudential Group; and

 

(c)               if any such restriction is found by any court of competent jurisdiction to be void or unenforceable as going beyond what is reasonable in the circumstances for the protection of the interests of the Prudential Group but would be valid if part of the wording was deleted and/or the period thereof was reduced and/or the territory concerned was reduced the restriction shall apply within the jurisdiction of that court with such modifications as may be necessary to make it valid and effective.

 

9.                   TERMINATION OF EMPLOYMENT

 

(1)              The Appointment may be terminated by either party by notice given in accordance with Clause 2.  The Company may in its absolute discretion decide to terminate the employment by making a payment of salary in lieu of any unexpired period of notice and, if any payment by the

 

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Company is appropriate, to make the payment either in one lump sum on termination or for payment to be made in equal monthly installments on the usual salary payment dates over the notice period.  During the period of payment of these monthly installments the Executive will be expected to mitigate the position by seeking alternative employment.  Should the Executive secure alternative employment which commences while the monthly installments are being paid the Executive will be required to notify the Company.  Should the Executive’s new gross monthly pay be the same or more than the monthly installments the Company will cease to be liable to the Executive in respect of the remainder of the installments.  Should the Executive’s new gross monthly pay be less than the monthly installments the monthly installments will continue but may be reduced to take account of the Executive’s new gross monthly pay.

 

(2)               Notwithstanding the other provisions of this Agreement and without prejudice to the rights and remedies of the Company for any breach of this Agreement, and to the Executive’s continuing obligations under Clauses 8 and 11, the Company shall at any time be entitled by notice in writing to the Executive to terminate the Appointment immediately in any of the following circumstances, namely:

 

(a)               if he is or becomes bankrupt or has a receiving order made against him or compounds with his creditors or otherwise takes advantage of any statute for the time being in force offering relief for insolvent debtors; or

 

(b)              if  he is guilty of serious misconduct or behavior such as to bring any company in the Prudential Group into disrepute (including but without limitation the commission of a criminal offence (excluding Road Traffic offences for which a non custodial sentence is imposed) or commits any serious breach of any of his obligations to the Company or any other company in the Prudential Group (whether under this Agreement or otherwise) and such misconduct, behaviour or breach justifies summary dismissal; or

 

(c)               if he  refuses to comply with any lawful orders or directions reasonably given to him by the Company or the Board or neglects so to comply with material adverse consequences for the Prudential Group; or

 

(d)              if he fails or refuses to perform substantially the duties of the position which he holds under this Agreement or engages in willful or reckless conduct injurious to or damaging to the reputation of the Company or any other company within the Prudential Group; or

 

(e)               if he is prevented from carrying out his duties by reason of a personal disqualification by an industry regulator, caused by reasons attributable to the Executive; or

 

(f)                 if he commits any serious or repeated breach of any of his obligations under this Agreement or the Appointment.

 

(3)              The Executive shall have no claim against the Company for damages or otherwise by reason of termination pursuant to clause 9(2).  Any delay or forbearance by the Company in exercising any such right of termination shall not constitute a waiver of its rights in respect of any subsequent occurrence giving rise to such a right.

 

(4)             Without prejudice to the Transfer of Undertakings (Protection of Employment) Regulations 2006, if at any time during this Agreement the Executive’s employment is terminated by reason of reconstruction or amalgamation of the Company and the Executive is offered employment with any concern or undertaking resulting from such reconstruction or amalgamation upon terms and conditions no less favourable than the terms of this Agreement and of similar status then the Executive shall have no claim against the Company in respect of the termination of the Appointment.

 

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(5)               The Executive shall promptly deliver to the Company upon the date of termination:

 

(a)               any property provided by the Company or any other company within the Prudential Group; and

 

(b)              all lists of clients or customers, correspondence, books, and all other documents, papers and records which may have been prepared by him or have come into his possession in the course of his employment and the Executive shall not be entitled to and shall not retain any copies thereof: title and copyright therein shall at all times remain in the Company.  The Company will on request make available copies of board minutes and supporting documents which the Executive reasonably requires in connection with any legal or regulatory proceedings in which he is or may become involved.

 

10.            EXECUTIVE’S POSITION AS DIRECTOR

 

(1)               The duties of the Executive as a director of any company within the Prudential Group shall be subject to the Articles of Association of the relevant company for the time being and (subject to sub-clause (2) below) shall be separate from and additional to his duties pursuant to the Appointment.  The Executive’s salary under this Agreement is inclusive of any remuneration to which the Executive may be entitled as a director of Prudential or any other company within the Prudential Group.

 

(2)               If the Executive is removed from office as a director of Prudential during the Appointment by any resolution of a general meeting or of the Board or by not being re-elected after retiring by rotation pursuant to the Articles of Association of Prudential the Executive acknowledges and agrees that such removal or cessation shall not amount to a breach of the Appointment and shall not entitle the executive to bring a claim of constructive dismissal, but such removal or cessation shall automatically constitute the Company giving notice to terminate the Appointment within the provisions of clause 2(2).

 

(3)               Upon termination of the Appointment for whatever reason the Executive shall forthwith in writing resign his position as a director of Prudential and of any other company within the Prudential Group, without compensation for loss of office but without prejudice to any other claims the Executive may have for damages for breach of this Agreement.

 

(4)               If the Executive fails to comply with his obligations in sub-clause 10(3) hereof, he  hereby irrevocably authorises Prudential to appoint some person in his name and on his behalf to sign any documents and/or do all things necessary to give effect to the resignations referred to in sub-clause 10(3) above.

 

11.            CONFIDENTIAL INFORMATION

 

(1)              The Executive shall not, either during the continuance of the Appointment or thereafter, use to the detriment or prejudice of the Company or any other company within the Prudential Group or, except in the proper course of his duties, divulge to any person any Confidential Information concerning the business or affairs of the Company or any other company within the Prudential Group which may have come to his knowledge during his employment.  For the purposes of this Agreement “Confidential Information” shall include, without limitation,  details of suppliers and their terms of business, details of customers, prices charged to and terms of business with customers, marketing plans and sales forecasts, any proposals relating to the acquisition or disposal of a company or business or any part thereof, details of employees and officers and of the remuneration and other benefits paid to them and any other information which may reasonably be classified as confidential, but so that these instructions shall cease to apply to any information which

 

9

 

shall become available generally otherwise than through the fault of the Executive.  The restrictions in this clause shall not apply:

 

(i)                  to any disclosure or use authorised by the Board or required by law or by the Appointment; or

 

(iii)            so as to prevent the Executive from using his own personal skill in any business in which he may be lawfully engaged after the Appointment is ended, or

 

(iii)            to prevent the Executive making a protected disclosure within the meaning of s43A of the Employment Rights Act 1996.

 

(3)              The Executive shall maintain all necessary and proper security precautions when in the possession of Confidential Information and shall remove Confidential Information (in non-electronic form) from Prudential’s premises only to the extent it is strictly necessary for the proper performance of his duties hereunder. The Executive will comply with the Company’s standards relating to confidentiality of information in electronic form.

 

12.            GRATUITIES AND CODES OF CONDUCT

 

(1)              Without the Company’s permission the Executive shall not directly or indirectly accept any commission, rebate, discount or gratuity, in cash or in kind, from any person who has or is likely to have a business relationship with any company in the Prudential Group. Express permission is not required for reasonable business entertainment such as lunches, sporting, cultural or social events undertaken in the normal course of the Executive’s duties and in accordance with any directions given by the Company.

 

(2)              The Executive shall comply with all codes of conduct from time to time adopted by the Board and with all applicable rules and regulations of The Stock Exchange and any other relevant regulatory body.

 

13.            DATA PROTECTION

 

(1)              The Executive consents to the Company and any company within the Prudential Group processing data relating to him at any time (whether before, during or after the Employment) for the following purposes:

 

(i)                  performing its obligations under the Agreement (including remuneration, payroll, pension, insurance and other benefits, tax and national insurance obligations);

 

(ii)               the legitimate interests of the Company and any company within the Prudential Group including for the purposes of any sickness policy, working time policy, investigating acts or defaults (or alleged or suspected acts or defaults) of the Executive, security, management forecasting or planning and negotiations with the Executive;

 

(iii)            processing in connection with any corporate transaction in which the Company or any company within the Prudential Group is involved or any transfer of any business in which the Executive performs his duties; and

 

(iv)           transferring data to countries outside the European Economic Area for any of the purposes referred to in (i), (ii) or (iii) above.

 

(2)              The Executive explicitly consents to the Company and any company within the Prudential Group processing sensitive personal data (within the meaning of the Data Protection Act

 

10

 

1998) at any time (whether before, during or after the Appointment) for the following purposes:

 

(i)                  where the sensitive personal data relates to the Executive’s health, any processing in connection with the operation of the sickness policy of the Company (or any company within the Prudential Group) or any relevant pension scheme or monitoring absence;

 

(ii)               where the sensitive personal data relates to an offence committed, or allegedly committed, by the Executive or any related proceedings, processing for the purpose of the disciplinary purposes of the Company or of any company within the Prudential Group;

 

(iii)            for all sensitive personal data, any processing in connection with any merger, sale or acquisition of a company or business in which the Company or any company within the Prudential Group is involved or any transfer of any business in which the Executive performs his duties; and

 

(iv)           for all sensitive personal data, any processing in the legitimate interests of the Company or any company within the Prudential Group.

 

14.            ASSIGNMENT

 

The Company may assign its interest in this Agreement to any other company within the Prudential Group with the agreement of the Executive such agreement not to be unreasonably withheld.

 

15.            STATUTORY REQUIREMENTS

 

The Executive shall also be subject to the terms set out in the Schedule attached to this Agreement in connection with the Employment Rights Act 1996.

 

16.            NOTICES

 

Any notice or other document to be given hereunder shall either be delivered personally or be sent by first class recorded delivery or fax.  The address for service on the Company shall be its registered office for the time being and the address for service on the Executive shall be his last known place of residence.  A notice shall be deemed to have been served as follows:-

 

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

 

(b)              if posted, at the expiration of 48 hours after the envelope containing the same was delivered into the custody of the postal authorities;

 

(c)               if sent by fax, at the time of dispatch.

 

In proving such service it shall be sufficient to prove that personal delivery was made, or that the envelope containing such notice was properly addressed and delivered into the custody of the postal authorities as a pre-paid, first class, recorded delivery letter, or that the fax was properly addressed and dispatched as the case may be.

 

17.            MISCELLANEOUS

 

(1)               This Agreement forms the entire understanding of the parties as to its subject matter and both parties acknowledge that neither of them has entered into this Agreement in reliance upon any representation warranty or undertaking which is not set out in this Agreement as forming part of the contract of employment of the Executive.

 

11

 

(2)               Any reference in this Agreement to an Act of Parliament shall be deemed to include any statutory modification or re-enactment thereof whenever made.

 

(3)               The headings shall be disregarded in construing this Agreement.

 

IN WITNESS the hands of the Executive and of the duly authorised representative of the Company on the date first above written.

 

12

 

	
SIGNED by Tidjane Thiam
    	
 
    
	
on behalf of PRUDENTIAL CORPORATION PLC
    	
 
    
	
 
    	
 
    
	
/s/ Tidjane Thiam
    	
 
    
	
 
    	
 
    
	
In the presence of:-
    	
 
    
	
 
    	
 
    
	
/s/ P Vacassin
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date: 08/12/2010
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SIGNED by John Foley
    	
 
    
	
 
    	
 
    
	
/s/ John Foley
    	
 
    
	
 
    	
 
    
	
In the presence of:-
    	
 
    
	
 
    	
 
    
	
/s/ G Harrington
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date: 13/12/2010
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SIGNED by Tidjane Thaim
    	
 
    
	
on behalf of PRUDENTIAL SERVICES LIMITED
    	
 
    
	
 
    	
 
    
	
/s/ Tidjane Thiam
    	
 
    
	
 
    	
 
    
	
In the presence of:-
    	
 
    
	
 
    	
 
    
	
/s/ P Vacassin
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date: 08/12/2010
    	
 
    

 

13

 

DATED

 

 

Jackson National Life Insurance Company (1)

 

 

Michael Wells (2)

 

 

and

 

 

Prudential plc (3)

 

 

 

EXECUTIVE DIRECTOR CONTRACT OF EMPLOYMENT

 

 

PN100630016

 

 

PARTIES

 

(1)                                  JACKSON NATIONAL LIFE INSURANCE COMPANY, a Michigan Corporation whose address is 1 Corporate Way, Lansing, Michigan 48951 USA or its successor (“the Company”),

 

(2)                                  MICHAEL WELLS, (“the Executive”), and

 

(3)                                  PRUDENTIAL PLC a Company registered in England and Wales with number 1397169 whose registered office is at Laurence Pountney Hill, London, EC4R 0HH (“Prudential”).

 

WHEREAS

 

(1)                                  The Executive has served as Vice Chairman and Chief Operating Officer of the Company.

 

(2)                                  The Executive is now to assume the position of President and Chief Executive Officer of the Company and will also be appointed as an executive director of Prudential.

 

(3)                                  This Agreement sets out the terms and conditions of the Executive’s appointment as President and Chief Executive Officer of the Company and as executive director of Prudential.

 

1.                                      DEFINITIONS

 

In this Agreement unless the context otherwise requires:-

 

“Affiliate” means, with respect to any Person, any other Person Controlling, Controlled by or under common Control with such first Person.

 

“Board” means the Board of Directors of Prudential.

 

“Commencement Date” means 1 July, 2010.

 

“Company Group” means, collectively, the Company, each of its Subsidiaries and each of their respective Affiliates.

 

“Confidential Information” means any confidential or proprietary trade secrets, customer lists, distribution arrangements, contractual arrangements with suppliers for any type of services, programs, software, protocols, information regarding product development, design or packaging, marketing plans, sales plans, management organization information (including but not limited to data and other information relating to members of the board of directors of the Company or any company in the Company Group or to management of any company in the Company Group), operating policies or manuals, business plans, financial records, design or other financial, commercial, business or technical information (i) relating to any company in the Company Group or (ii) that any company in the Company Group may receive belonging to suppliers, customers or others who do business with any such company, but in each such case only to the extent that such information has not been previously disclosed to the public and is not in the public domain (other than by reason of the Executive’s breach of his obligations under this Agreement.

 

 

“Control” means, with respect to any Person, the possession, directly or indirectly, severally or jointly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise.

 

 “Person” means any individual, legal or personal representative, corporation, company, partnership or other entity.

 

“Restriction Period” means the period of one year following the expiration of the Term and the termination of the Executive’s employment with the Company Group for any reason or such shorter period as may result from the application of clause 7(6) or clause 7(7).

 

“Subsidiary” means, with respect to any Person, each Person in which the first Person owns or Controls, directly or indirectly, capital stock or other ownership interests representing 50% or more of the combined voting power of the outstanding voting stock or other ownership interests of such Person.

 

2.                                      APPOINTMENT

 

(1)                                  During the Term (as defined in clause 2(2) below), subject to clause 4(4), the Company shall employ the Executive and the Executive shall serve the Company as President and Chief Executive Officer of the Company, and in any other such capacity for the Company or any other company in the Company Group as may be agreed (“the Appointment”).  During the Term, the Executive shall report directly to the Group Chief Executive Officer of Prudential.

 

(2)                                  Unless the Executive’s employment shall sooner terminate pursuant to clause 2(3) or clause 8, the Company shall employ the Executive for a term commencing on the Commencement Date and ending on the first anniversary of the Commencement Date hereof (the “Initial Term”).  Effective upon the expiration of the Initial Term and of each Additional Term (as defined below), the Executive’s employment hereunder shall be renewed, upon the same terms and conditions, for an additional period of twelve (12) months (each, an “Additional Term”), in each such case, commencing upon the expiration of the Initial Term or the then current Additional Term, as the case shall be, unless the Company or the Executive delivers written notice (a “Non-Renewal Notice”) to the other electing not to renew such Initial Term or Additional Term, as the case may be, at least 90 days prior to the expiration of the Initial Term or such Additional Term.  Failure of both parties to deliver a Non-Renewal Notice will be deemed to constitute the election by both parties hereunder to renew the Initial Term or the then current Additional Term, as the case may be, as permitted hereunder.  The period during which Executive is employed pursuant to this Agreement in accordance with the preceding sentence, including any Garden Leave Period as defined in clause 4(4) below and any renewal period, shall be referred to as the “Term”.

 

(3)                                  Notwithstanding clause 2(2) above, the Term and the Executive’s employment hereunder shall automatically terminate on the earliest of (i) the termination of the Executive’s employment with the Company Group by reason of the Executive’s death,  and (ii) the termination of the Executive’s employment with the Company for any reason on the expiry of 12 months’ prior written notice of such termination served on the Company by the 

 

 

Executive or served on the Executive by the Company or (iii) without notice, on the Executive attaining the age of 65.

 

3.                                      DIRECTORSHIP OF PRUDENTIAL

 

(1)                                  Effective as soon as practicable following the Commencement Date the Executive shall serve as an executive director of Prudential.

 

(2)                                  The Executive’s appointment as an executive director of Prudential is subject to Prudential’s Articles of Association as amended from time to time (the “Articles”) and the Articles will prevail in the event of any conflict between them and the terms in this clause 3.  The Articles require that directors submit themselves for re-election periodically.  The Executive will be required to submit himself for re-election when requested to do so by the Board at which time he will be nominated for re-election by the Board.  If the Executive is removed from office as a director of Prudential during the Appointment by any resolution of a general meeting or of the Board or by not being re-elected after retiring by rotation pursuant to the Articles of Prudential the Executive acknowledges and agrees that such removal or cessation shall not amount to a breach of the Appointment or this Agreement and shall not entitle the Executive to bring a claim of constructive dismissal, but such removal or cessation shall automatically constitute the Company giving notice to terminate the Appointment within the provisions of clause 2(3).

 

(3)                                  During the period that the Executive serves as an executive director of Prudential the Executive will be required to devote such time to his duties as an executive director of Prudential as the Board or the Chief Executive of Prudential reasonably considers necessary.  The Executive will be required to use commercially reasonable efforts to attend the annual general meeting of Prudential, regular and emergency Board meetings, any extraordinary general meeting of Prudential and to serve on any committees of the Board to which the Executive is appointed.  Relevant dates and details will be notified to the Executive appropriately in advance.

 

(4)                                  The Executive will not receive any separate consideration in addition to the remuneration under this Agreement in respect of his appointment as a director of Prudential or the termination of the Executive’s service as a director.  Since the Executive will be a director of Prudential, the Remuneration Committee of Prudential may determine any future remuneration, along with that of the other directors of Prudential, in accordance with the requirements of good corporate governance and any codes, regulations and listing rules which are applicable to Prudential from time to time.

 

(5)                                  Prudential will reimburse the Executive for all reasonable out of pocket expenses necessarily incurred by the Executive in carrying out his duties as a director of Prudential in accordance with its reimbursement policies for directors.

 

(6)                                  During the period that the Executive serves as a director of Prudential the Executive will be covered by the directors and officers liability insurance covering other members of the Board in addition to the cover maintained for all senior executives of the Company.

 

 

(7)                                  The Executive will comply with the provisions of the UK Listing Authority’s Model Code for Securities Transactions by Directors of Listed Companies and any internal rules, regulations and policies laid down by Prudential from time to time in relation to such matters.

 

(8)                                  The Executive shall use commercially reasonable efforts to comply with all instructions, directions, codes and terms and conditions from time to time laid down by the Board relating to holding and dealing in the shares of Prudential or any other company in the Company Group (including local country requirements) and shall act in the best interests of Prudential.  The Executive shall also use commercially reasonable efforts to comply with the requirements laid down by all external regulatory bodies.  The Executive acknowledges and agrees that the timing of the grant and exercise of any options or awards to acquire ordinary shares or American Depository Receipts of Prudential to which the Executive may become entitled will be subject to the UK Listing Authority’s Model Code for Securities Transactions by Directors of Listed Companies and to any internal rules, regulations and policies laid down by Prudential from time to time in relation to such matters.

 

(9)                                  Without limiting the effect of clause 7, in view of the sensitive and confidential nature of the business of Prudential, the Executive agrees that as long as he is a director of Prudential and for the duration of the Term, if longer, he will not, without the prior consent of the Chairman and the Chief Executive Officer of Prudential, which shall not be withheld unreasonably, be engaged or interested in any capacity, directly or indirectly, in any business or with any individual company or other entity which is, in the reasonable opinion of the Chairman and the Chief Executive Officer of Prudential, competitive with the business of Prudential or the Company or any company in the Company Group except as holder or beneficial owner, for the purpose only of a passive minority investment, of securities dealt in or on any recognized stock exchange (not exceeding one per cent of the total number or value of such securities from time to time in issue).

 

(10)                            The Executive agrees that he will not, directly or indirectly, make use of, divulge or communicate to any Person any Confidential Information except:

 

(i)                                     with the prior written consent of the Board or its authorised representative

 

(ii)                                  to the extent required by law; and

 

(iii)                               as required in the appropriate performance of his duties hereunder during the Term.

 

The restrictions in this clause shall not apply to prevent the Executive from using his own personal skill in any business in which he may be lawfully engaged after the Appointment has ended.

 

(11)                            Upon notice of termination of the Appointment with the Company howsoever arising and whether or not any dispute exists concerning the termination, the Executive shall forthwith upon request of Prudential, resign from office as a director of Prudential and all other offices held by the Executive in any other companies in the Company Group at the direction of the Board.  The 

 

 

Executive will also forthwith resign any membership of any organisation to which he is appointed by virtue of his position in any company in the Company Group.  Should he fail to do so, Prudential is hereby irrevocably authorised to appoint some individual in the Executive’s name and on the Executive’s behalf to sign any documents and do anything necessary or requisite to effect such resignation and the Executive hereby acknowledges and agrees that any documents executed or things done by such individual to effect such resignations in the Executive’s name and on the Executive’s behalf shall have the same validity, force and effect as though executed or done directly by the Executive.  Any such resignation shall not prejudice the Executive’s rights under this Agreement.

 

4.                                      PERFORMANCE OF DUTIES AS CHIEF EXECUTIVE OFFICER

 

(1)                                  During the Term the Executive shall use his best endeavours to promote the interests of the Company and each other company in the Company Group and shall carry out his duties with all due expertise, diligence and technical skill, giving at all times the full benefit of his knowledge and experience.

 

(2)                                  During the Term, the Executive shall (except to the extent prevented by ill-health or accident, during any period of authorized vacation or to the extent otherwise directed by the Board or the Company) devote such of his  time, attention and abilities to the business and interests of the Company and any other company in the Company Group as the proper performance of his duties hereunder demands.

 

(3)                                  During the Term, the Executive shall perform such duties and exercise such powers in relation to the conduct and management of the affairs of the Company and any company in the Company Group as may from time to time reasonably be assigned or communicated to or vested in him consistent with the nature of the Appointment.

 

(4)                                  Where notice of termination has been served by either the Company or the Executive whether in accordance with clause 2(3) or otherwise or a Non-Renewal Notice has been served by either the Company or the Executive in accordance with clause 2(2), neither the Company nor any company in the Company Group shall be under any obligation to provide work for or assign any duties to the Executive for the whole or any part of the relevant notice period and may require him:

 

(i)                                     not to attend any premises of the Company or any other company in the Company Group; and/or

 

(ii)                                  to resign with immediate effect from any offices or positions he holds with the Company or any other company in the Company Group (and any related trusteeships or memberships held by him by virtue of his position with any company in the Company Group) or otherwise refrain from exercising any of the powers or duties of any such office or position; and/or

 

(iii)                               to refrain from business contact with any customers, clients or employees of the Company or any other company in the Company Group; and/or

 

 

(iv)                              to take any accrued holiday during any period of garden leave under this clause 4(4).

 

(5)                                  The Board may also require the Executive not to attend work during any period in which the Company, Prudential and/or the Board, either alone or in conjunction with any other Person, is carrying out an investigation into any alleged act or default of the Executive.  During this period the employment shall be on such terms as the Board considers expedient (including a term that the Executive shall refrain from business contact with any customers, clients or employees of the Company or any company in the Company Group during such period) providing that:

 

(i)                                     the Board on or before notifies the Executive in writing of the subject matter and grounds for initiating the investigation; and

 

(ii)                                  during such period the Executive shall be entitled to the remuneration and benefits due under this Agreement.

 

(6)                                  Any period during which the Executive is not attending work under either of clauses 4(4) or 4(5) shall be referred to herein as the “Garden Leave Period.”  During any Garden Leave Period, the Executive shall be entitled to the remuneration and benefits due under this Agreement.

 

The provision of clauses 4(1) and 4(2) will continue to apply to any services rendered by the Executive during any Garden Leave Period under clauses 4(4) or 4(5).

 

(7)                                  The Executive shall at all times use commercially reasonable efforts to promptly give to the Company and the Board (in writing if so required) all such information and explanations concerning the affairs of any company in the Company Group as the Company shall request and of which the Executive is aware.

 

(8)                                  The Executive shall use commercially reasonable efforts to comply with all instructions and directions from time to time laid down by the Company for senior executives.

 

(9)                                  During the Term, the Executive shall perform his duties at such offices of the Company in Lansing, Michigan and Nashville, Tennessee or at such other locations as may be agreed from time to time as the Company or any company in the Company Group, may from time to time reasonably require.

 

(10)                            During the Term, the Executive shall allow the Company (and its authorized agents) supervised access on reasonable notice to all or any of the properties in which he resides from time to time in order for the Company to assess, and, if the Company considers it desirable, to carry out at its own expense those security measures which the Company may reasonably consider advisable for the protection of the Executive.  Nothing herein shall require the Company to carry out any such security measures and the Company expressly disclaims any responsibility in respect of any act or failure to act by the Company pursuant to this subclause (10).

 

 

5.                                      REMUNERATION

 

(1)                                  During the Term, the Company will pay the Executive an annual salary as separately notified, to accrue from day to day and to be payable by equal monthly instalments in arrears to a bank nominated by the Executive.  The rate of salary shall be subject to periodic review but shall not be reduced without the prior written agreement of the Executive.

 

(2)                                  During the Term, the Executive will also be eligible to participate in the employee benefit plans of the Company in which its senior executives participate in accordance with the generally applicable terms and conditions of such plans as amended and in effect from time to time.

 

(3)                                  Participation in any Company Group incentive arrangement or scheme is a matter entirely separate from the Executive’s terms and conditions of employment.  In particular if the Executive’s employment shall terminate for whatever reason whether lawfully or unlawfully the Executive’s entitlements under such arrangements and schemes shall be determined in accordance with the relevant rules of any such incentive arrangement or scheme and at the discretion of the Remuneration Committee of Prudential.

 

6.                                      HOLIDAY

 

(1)                                  The Executive shall be entitled to such holiday with pay in each calendar year during the Term (in addition to statutory holidays) as the proper performance of his  duties hereunder permits and in accordance with the guidelines laid down by the Company from time to time for its senior executives.

 

7.                                      CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION COVENANTS OF EXECUTIVE

 

(1)                                  During the Term and following any termination of the Term or of the Appointment, except:

 

(i)                                     with the prior written consent of the Board or its authorised representative;

 

(ii)                                  to the extent required by an order of a court having jurisdiction or under subpoena from an appropriate government agency, in which event, the Executive will use his best efforts to consult with the Board prior to responding to any such order or subpoena; and

 

(iii)                               as required in the appropriate performance of his duties for the Company or any company in the Company Group during the Term,

 

the Executive will not use or disclose any Confidential Information to any third Person unless such Confidential Information has been previously disclosed to the public or is in the public domain (other than by reason of the Executive’s breach of this clause 7(1) or by reason of the breach by any other Person known by the Executive to be subject to a confidentiality obligation to any company in the Company Group).

 

(2)                                  During the Restriction Period, the Executive will not, directly or indirectly, solicit, interfere with or endeavour to entice away or induce to leave their employment any director or senior manager who is then, or was at the date of termination of the Appointment, an employee of or engaged by the Company

 

 

Group and with whom the Executive had business dealings during the course of his employment in the 12 month period immediately prior to the termination of the Appointment.  Nothing in this clause shall prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any Company Group member.

 

(3)                                  During the Restriction Period, the Executive will not, directly or indirectly, for his own account or for the account of any other Person, anywhere in the world, solicit or otherwise attempt to establish any business relationship of a nature that is competitive with the business or relationship of any member of the Company Group with any Person which is or was a customer, client, agent, broker or other distributor of any member of the Company Group at any time during the twelve-month period preceding the expiration of the Term.  This clause 7(3) will only apply if, after the Executive’s termination of employment, the Remuneration Committee elects to have this clause 7(3) apply..

 

(4)                                  During the Restriction Period, the Executive will not, without the prior consent of the Chairman and the Chief Executive Officer of Prudential, which shall not be withheld unreasonably, be engaged or interested in any capacity, directly or indirectly, in any business or with any individual company or other entity which is, in the reasonable opinion of the Chairman and the Chief Executive Officer of Prudential, competitive with the business of Prudential or the Company or any company in the Company Group except as holder or beneficial owner, for the purpose only of a passive minority investment, of securities dealt in or on any recognized stock exchange (not exceeding 5 per cent of the total number or value of such securities from time to time in issue).  Where the Term is terminated pursuant to clause 2(2) following delivery by the Company of a Non-Renewal Notice or by the Company giving notice pursuant to clause 2(3) the Executive shall be entitled to the continued payment of the salary and (to the extent reasonably practicable) benefits provided to the Executive pursuant to clauses 5(1) and 5(2) for the period during which the restriction in this clause 7(4) applies (subject to clause 7(7) below). This clause 7(4) will only apply if, after the Executive’s termination of employment, the Remuneration Committee elects to have this clause 7(4) apply..

 

(5)                                  The Executive acknowledges and agrees that the covenants, obligations and agreements of the Executive contained in this clause 7 and clauses 3(9) and 3(10) relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants, obligations or agreements will cause the Company and any other company in the Company Group irreparable injury for which adequate remedies are not available at law.  Therefore, the Executive agrees that the Company and any other company within the Company Group will be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain the Executive from committing any violation of such covenants, obligations or agreements.  These injunctive remedies are cumulative and in addition to any other rights and remedies the Company and any other company within the Company Group may have.  The Company and any other company within the Company Group and the Executive hereby irrevocably submit to the exclusive jurisdiction of the courts of Michigan and the Federal courts of the United States of America, in each case located in  Lansing, Michigan in respect of the injunctive remedies set forth in this clause 7 and the interpretation and

 

 

enforcement of this clause 7 insofar as such interpretation and enforcement relate to any request or application for injunctive relief in accordance with the provisions of this clause 7(5).

 

(6)                                  The period during which the restrictions referred to in clauses 7(2), 7(3) and 7(4) shall apply following the expiration of the Term shall be reduced by the actual amount of notice served as well as the length of any Garden Leave Period imposed under the provisions of clause 4(4) in existence at the Termination Date or the expiry of the Term.

 

(7)                                  In the event of (i) the Executive not being required to perform his normal duties pursuant to clause 4(4) during any Garden Leave Period or (ii) when the restriction in clause 7(4) above applies and the Executive is receiving his salary and, to the extent reasonably practicable his benefits then in each case the Company may waive, in whole or in part, enforcement of the restrictions referred to in clause 3(9) and/or clause 7(4), as applicable, upon the delivery of prior written notice of such waiver to the Executive.  Such waiver shall become effective on the date (the “Waiver Effective Date”) specified in the notice delivered by the Company under this clause 7(7).  If the Company elects to waive application of the restrictions referred to in clause 3(9) and/or 7(4) for any period pursuant to this clause 7(8), then notwithstanding the provisions of clause 4(4) and 7(4), the Company’s obligation to provide the Executive with salary and benefits pursuant to clause 4(4) and 7(4)  will automatically terminate effective immediately upon the Waiver Effective Date.

 

8.                                      TERMINATION OF EMPLOYMENT

 

(1)                                  The Appointment may be terminated by either party by a Non-Renewal Notice given under clause 2.2 or by notice given under clause 2(3).  The Appointment shall automatically terminate upon the Executive’s death.  The Term will expire on the date specified in any such notice (as the same may be amended by mutual agreement) or upon the Executive’s death, whichever is applicable.

 

(2)                                  Notwithstanding the other provisions of this Agreement and without prejudice to the rights and remedies of the Company for any breach of this Agreement, and to the Executive’s continuing obligations under clause 3(12) and clauses 7 and 11, the Company shall at any time be entitled by notice in writing to the Executive to terminate the Appointment immediately, whereupon the Term will immediately expire, in any of the following circumstances, namely:

 

(a)                                  if  he commits a criminal offence (excluding misdemeanour road traffic violations) and such offence justifies summary dismissal;

 

(b)                                 he is guilty of any serious misconduct in connection with his duties for any company in the Company Group or he commits any serious breach of any of his obligations to the Company or any other company in the Company Group (whether under this Agreement or otherwise); or

 

(c)                                  if he willfully fails or willfully refuses to perform substantially his duties for the Company or any other company within the Company Group under this Agreement or engages in wilful or reckless conduct

 

 

injurious to or damaging to the reputation of the Company or any other company within the Company Group; or

 

(d)                                 if he is prevented from carrying out his duties by reason of a personal disqualification by an industry regulator, caused by reasons attributable to the Executive.

 

(3)                                  The Executive shall have no claim against the Company or any other company in the Company Group for contractual damages by reason of any termination by the Company in accordance with this clause 8.  Any delay or forbearance by the Company in exercising any such right of termination shall not constitute a waiver of its rights in respect of any subsequent occurrence giving rise to such a right.

 

(4)                                  If at any time during the Term, the Appointment is terminated by reason of any reorganization of the Company Group or the businesses conducted thereby or by reason of the merger or consolidation of the Company with any other entity and the Executive is offered a position with any concern or undertaking resulting from such reorganization, merger or consolidation upon terms and conditions no less favorable than the terms of this Agreement and of similar status to the Executive’s status under the Appointment then the Executive shall have no claim against the Company or any company in the Company Group in respect of the termination of the Appointment or the change in his position.

 

(5)                                  The Executive shall promptly deliver to the Company upon the last day of his active employment with the Company Group:

 

(a)                                  any credit cards or any property provided by the Company or any other company within the Company Group; and

 

(b)                                 all lists of clients or customers, correspondence, books, and all other documents, papers and records which may have been prepared by him or have come into his possession in the course of his employment and the Executive shall not be entitled to and shall not retain any copies thereof, in any medium: title and copyright therein shall at all times remain in the Company.  The Company will on request make available copies of board minutes and supporting documents which the Executive reasonably requires in connection with any legal or regulatory proceedings in which he is or may become involved.

 

(6)                                  Notwithstanding the provisions of clauses 4(4) and 7(4), (i) payments of the Executive’s salary during any Garden Leave Period or period following the Executive’s termination of employment will be reduced, but not below zero, by the amount of any compensation earned by the Executive (whether paid currently or deferred) during any portion of such Garden Leave Period or post-termination period from any subsequent employer or other Person for which the Executive performs services, including but not limited to consulting services and including any such compensation earned in connection with the Executive’s self-employment, and (ii) any benefits to be provided to the Executive during such Garden Leave Period or period following the Executive’s termination of employment shall be reduced or cancelled if and to the extent that comparable benefits are provided or offered to the Executive

 

 

by any subsequent employer or Person for which the Executive performs services, including but not limited to consulting services.

 

(7)                                  The Company may decide in its absolute discretion to terminate the Executive’s employment summarily by making a payment following the Executive’s termination of employment. Any such payment by the Company may be made either in one lump sum on termination or in equal monthly installments on the usual salary payment dates over the unexpired period of the Term of up to 12 months.  During the period of payment of these monthly installments the Executive will be expected to mitigate the position by seeking alternative employment.  Should the Executive secure alternative employment which commences while the monthly installments are being paid the Executive will be required to notify the Company.  Should the Executive’s new gross monthly pay as detailed in clause 8(6) be the same as or more than the monthly installments the Company will cease to be liable to the Executive in respect of the remainder of the installments.  Should the Executive’s new gross monthly pay be less than the monthly installments the monthly installments will continue but may be reduced to take account of the Executive’s new gross monthly pay.

 

9.                                      CHANGE OF CONTROL

 

(1)                                  The Executive is currently entitled to participate in the Brooke Holdings Inc. Change of Control Severance Plan (“the Severance Plan”). Executive shall continue to participate in the Severance Plan only until June 30, 2010 and with effect from that date the Executive shall no longer participate in the Severance Plan.

 

(2)                                  Save as expressly set out in 9(1) above, the Executive’s entitlement under or with respect to the Severance Plan shall remain unaffected by this Agreement.

 

10.                               GRATUITIES

 

(1)                                  Without the Company’s permission the Executive shall not directly or indirectly accept any commission, rebate, discount or gratuity, in cash or in kind, from any Person who has or is likely to have a business relationship with any company in the Company Group.  Express permission is not required for reasonable business entertainment such as lunches, sporting, cultural or social events undertaken in the normal course of the Executive’s duties and in accordance with any directions given by the Company.

 

11.                               ASSIGNMENT

 

(1)                                  The Company may assign its interest in this Agreement to any other company within the Company Group with the agreement of the Executive such agreement not to be unreasonably withheld.

 

12.                               NOTICES

 

(1)                                  Any notice or other document to be given hereunder shall either be delivered personally or be sent by first class recorded delivery or fax.  The address for service on the Company or Prudential shall be its registered office for the time being and the address for service on the Executive shall

 

 

be his last known place of residence.  A notice shall be deemed to have been served as follows:-

 

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

 

(b)                                 if posted, at the expiration of 48 hours after the envelope containing the same was delivered into the custody of the postal authorities;

 

(c)                                  if sent by fax, at the time of dispatch.

 

(2)                                  In proving such service it shall be sufficient to prove that personal delivery was made, or that the envelope containing such notice was properly addressed and delivered into the custody of the postal authorities as a pre-paid, first class, recorded delivery letter, or that the fax was properly addressed and dispatched as the case may be.

 

13.                               MISCELLANEOUS

 

(1)                                  This Agreement forms the entire understanding of the parties as to its subject matter and supersedes all other agreements among the parties.  All parties acknowledge that neither of them has entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set out in this Agreement as forming part of the contract of employment of the Executive.

 

(2)                                  Any reference in this Agreement to an Act of Parliament or a law or statute of the U.S. Congress or the State of Michigan shall be deemed to include any statutory modification or re-enactment thereof whenever made.

 

(3)                                  The headings shall be disregarded in construing this Agreement.

 

14.          GOVERNING LAW

 

(1)                                  The terms of this Agreement will be governed by, and construed and enforced in accordance with, the laws of Michigan, without reference to its principles of conflicts of law save that the Executive’s service on the Board as provided in clause 3 of this Agreement shall be governed by the laws of England and Wales.

 

 

IN WITNESS the hands of the Executive and of the duly authorized representative of the Company and of Prudential plc on the date first above written.

 

	
SIGNED
    	
 
    
	
on   behalf of PRUDENTIAL PLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Tidjane Thiam
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SIGNED   AS A DEED AND DELIVERED
    	
 
    
	
by   Michael Wells
    	
 
    
	
 
    	
 
    
	
/s/   Michael Wells
    	
 
    
	
 
    	
 
    
	
In   the presence of:
    	
 
    
	
 
    	
 
    
	
/s/   T Parsons
    	
 
    
	
 
    	
 
    
	
Date:   15/10/2010
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SIGNED   by
    	
/s/   C Myers
    	
 
    
	
on   behalf of Jackson National Life   Insurance Company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:

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