Document:

EX-4.12

 Exhibit 4.12 

DATED                     
                        
  

RESIDEO TECHNOLOGIES, INC. 

- and - 

COMPUTERSHARE TRUSTEES LIMITED 

 
  

TRUST DEED 

- of the - 

RESIDEO TECHNOLOGIES UK SHAREBUILDER PLAN 

 
  
  

 
 

 
 Matter ref: C7/KK/7142724 

Hogan Lovells International LLP 

Atlantic House, Holborn Viaduct, London EC1A 2FG 

 CONTENTS 

 

							
	CLAUSE	  	 	  	PAGE	 
			
	1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	 
			
	2.	  	TRUSTS OF THE PLAN	  	 	8	 
			
	3.	  	COMPANY’S AND PARTICIPATING COMPANIES’ OBLIGATIONS	  	 	8	 
			
	4.	  	INVESTMENT	  	 	9	 
			
	5.	  	TRUSTEES’ OBLIGATIONS	  	 	9	 
			
	6.	  	APPLICATION OF THE PLAN TO SUBSIDIARIES	  	 	12	 
			
	7.	  	VOTING RIGHTS AND DIRECTIONS AND WAIVER OF DIVIDEND	  	 	13	 
			
	8.	  	TRUSTEES’ ADMINISTRATION AND POWERS	  	 	13	 
			
	9.	  	TRUSTEES’ PROTECTION AND CHARGES	  	 	14	 
			
	10.	  	APPOINTMENT, REMOVAL, RETIREMENT AND RESIDENCE OF TRUSTEES	  	 	15	 
			
	11.	  	AMENDMENT OF THE PLAN	  	 	16	 
			
	12.	  	TERMINATION OF THE PLAN	  	 	17	 
			
	13.	  	GOVERNING LAW	  	 	18	 
			
	14.	  	COUNTERPARTS	  	 	18	 
		
	 SCHEDULE
	  	 	19	 
			
		  	The Rules	  	 	19	 
			
	1.	  	INVITATIONS TO PARTICIPATE IN THE PLAN	  	 	19	 
			
	2.	  	PARTICIPATION – HOLDING PERIOD, FORFEITURE AND GROUP PLANS TREATED AS A
SINGLE PLAN	  	 	19	 
			
	3.	  	FREE SHARES	  	 	20	 
			
	4.	  	PARTNERSHIP SHARES	  	 	22	 
			
	5.	  	MATCHING SHARES	  	 	24	 
			
	6.	  	DIVIDEND SHARES	  	 	25	 
			
	7.	  	LIMITS ON PARTICIPATION	  	 	26	 
			
	8.	  	SHARES	  	 	26	 
			
	9.	  	RIGHTS ISSUES AND CAPITALISATION ISSUES	  	 	26	 
			
	10.	  	RECONSTRUCTION AND TAKEOVER	  	 	27	 
			
	11.	  	SCRIP DIVIDENDS	  	 	27	 
			
	12.	  	FRACTIONAL ENTITLEMENTS	  	 	28	 
			
	13.	  	CIRCULARS AND NOTICES	  	 	28	 
			
	14.	  	DISPOSALS AND PAYMENTS	  	 	28	 
			
	15.	  	NOTICES	  	 	28	 

							
			
	16.	  	INFORMATION	  	 	29	 
			
	17.	  	DISPUTES	  	 	29	 
			
	18.	  	TERMS OF EMPLOYMENT	  	 	29	 

  
 - 2 - 

 THIS DEED is made
the             day of                     2018 

BETWEEN: 
  

	(1)	 RESIDEO TECHNOLOGIES, INC. a Delaware incorporated company
whose principal executive offices are at 115 Tabor Road, Morris Plains, New Jersey 07950, U.S.A.(the “Company”); and 

  

	(2)	 COMPUTERSHARE TRUSTEES LIMITED
(Registered Number 2045938) whose registered office is at The Pavilions, Bridgwater Road, Bristol, BS13 8AE (the “Trustees”). 

BACKGROUND: 
  

	(A)	 The Company agreed to establish a Schedule 2 SIP to be called the Resideo Technologies UK Sharebuilder
Plan (the “Plan”). 

  

	(B)	 The Plan is established as an employees’ share scheme as defined in section 1166 of the Companies Act 2006
to enable eligible employees of the Company and of its subsidiaries to acquire shares of Common Stock in the capital of the Company under this Deed and in the rules contained in the Schedule and as a Schedule 2 SIP under Schedule 2 to the Income Tax
(Earnings and Pensions) Act 2003 (Share Incentive Plans) (“Schedule 2”). 

  

	(C)	 The Trustees have agreed to be the original trustees of the Plan on the terms of this Deed and the rules
contained in the Schedule. 

  

	(D)	 The purpose of the Plan is to provide benefits for employees in the form of shares in the Company which gives
them a continuing stake in the Company. The Plan does not provide benefits to employees otherwise than in accordance with Schedule 2. 

OPERATIVE TERMS: 
  

	1.	 DEFINITIONS AND
INTERPRETATION 

  

	1.1	 In this Plan: 

“Accumulation Period” means in relation to Partnership Shares, a period determined by the Board not exceeding 12 months (or
any other period specified in Schedule 2) during which the Trustees accumulate an Eligible Employee’s Partnership Share Money before acquiring Partnership Shares on behalf of the Eligible Employee or repaying it to the Eligible Employee; 

“Acquisition Date” means: 
  

	 	(a)	 in relation to Partnership Shares with no Accumulation Period, the date selected by the Trustees in their
absolute discretion being a date within 30 days (or any other period specified in Schedule 2) after the last date on which the Partnership Share Money in relation to the Partnership Shares is deducted; 

 

	 	(b)	 in relation to Partnership Shares with an Accumulation Period, the date selected by the Trustees in their
absolute discretion being a date within 30 days (or any other period specified in Schedule 2) after the end of the Accumulation Period; and 

  
 1 

	 	(c)	 in relation to Dividend Shares, the date selected by the Trustees in their absolute discretion being a date
within 30 days (or any other period specified in Schedule 2) after the date on which the cash dividend is received by the Trustees in respect of Plan Shares; 

“Any Other Plan” means any plan other than the Plan adopted by the Company which provides for the acquisition of Shares by or
on behalf of employees or directors; 
 “Appropriation” means a gift by way of the transfer of the beneficial ownership of
Shares to an Eligible Employee by the Trustees under the Plan and the expression “appropriated” is construed accordingly; 

“Appropriation Date” means any day on which Free Shares or Matching Shares are appropriated to an Eligible Employee by
the Trustees under the Plan; 
 “Associated Company” means an associated company as defined in paragraph 94 of Schedule 2
(Meaning of “associated company”); 
 “Award” means: 

 

	 	(a)	 in relation to Free Shares and/or Matching Shares the Appropriation of Shares in accordance with the Plan; and

  

	 	(b)	 in relation to Partnership Shares, the acquisition of Shares in accordance with the Plan,

 and the expression “awarded” is construed accordingly; 

“Board” means the board of directors of the Company or a duly authorised committee of the board of directors of the
Company; 
 “Capital Receipt” means a capital receipt within the meaning given to that expression in section 502 of ITEPA
(Meaning of “capital receipt” in section 501); 
 “Chapter 6” means Chapter 6 of Part 7 of ITEPA (share
incentive plans); 
 “Contract of Participation” means a contract in respect of Free Shares entered into by the
Participant, the Company and the Trustees as contemplated by Part 5 (Free Shares) of Schedule 2 in a form determined by the Board which complies with the provisions of Schedule 2; 

“Control” means the control of a company within the meaning of section 995 of the Tax Act and a person is deemed to have
control of a company if he or she and others acting in concert with him or her have together obtained control of the company within the meaning of section 995 of the Tax Act; 

“Dealing Day” means a day on which transactions take place on the New York Stock Exchange; 

“Deed” means this Deed as amended in accordance with its provisions; 

  
 2 

 “Dividend Shares” means Shares which are: 

 

	 	(a)	 acquired on behalf of a Participant by the Trustees using cash dividends received in respect of the
Participant’s Plan Shares and reinvested in accordance with Rule 6; 

  

	 	(b)	 for the time being held by the Trustees on behalf of the Participant under the Plan; 

 

	 	(c)	 of the same class and carry the same rights as the Plan Shares in respect of which the cash dividend is paid;
and 

  

	 	(d)	 not subject to forfeiture, 

and, if relevant, includes any New Shares held by the Trustees on the Participant’s behalf under the Plan; 

“Eligible Employee” means any person who: 
  

	 	(a)	 is an employee of a Participating Company on the Qualifying Date or, if the Qualifying Date is not the
Appropriation Date or the Acquisition Date, is an employee of a Participating Company on the Appropriation Date or Acquisition Date; 

  

	 	(b)	 a UK resident tax payer within the meaning of paragraph 8(2) of Schedule 2 (All-employee nature of plan) except that this requirement may be waived by the Board in any particular case; 

  

	 	(c)	 does not at the same time participate in an award of shares in another Schedule 2 SIP established by the
Company or by a connected company as provided in and within the meaning of paragraph 18 of Schedule 2 (Requirement not to participate in other SIPs); and 

 

	 	(d)	 has on the Qualifying Date the Qualifying Period (if any) of continuous employment with the Company or any
Qualifying Company determined by the Board; 

 “Free Shares” means Shares appropriated to a Participant
under Rule 3 for the time being held by the Trustees on his or her behalf under the Plan and, if relevant, includes any New Shares held by the Trustees on his or her behalf under the Plan; 

“Group” means the Company and all of its Subsidiaries and “member of the Group” is construed accordingly; 

“HMRC” means HM Revenue and Customs; 

“Holding Period” means the period which begins on the Appropriation Date or the Acquisition Date as the case may be and which
ends: 
  

	 	(a)	 in the case of Free Shares and Matching Shares, at least three years and no later than five years from their
Appropriation Date (or any other period permitted by Schedule 2) as specified by the Board in accordance with Rule 2; and 

  

	 	(b)	 in the case of Dividend Shares, three years from their Acquisition Date, (or any other period specified by
Schedule 2), 

  
 3 

 except that: 
  

	 	(i)	 in each case, the period ends on the date on which the Participant ceases to be an employee of the Company or
an Associated Company if earlier; and 

  

	 	(ii)	 for the purposes of this definition a Participant is not be treated as ceasing to be an employee of the Company
or an Associated Company until he or she is no longer an employee of the Company or of any Associated Company; 

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003; 

“Initial Market Value” means: 
  

	 	(a)	 if and for so long as the Shares are admitted to trading on the New York Stock Exchange: 

 

	 	(i)	 in relation to Free Shares, Matching Shares, Partnership Shares with no Accumulation Period and Dividend Shares
which are: 

  

	 	(1)	 acquired wholly or partly by the Trustees by subscription, the middle market quotation of a Share of the same
class on the New York Stock Exchange on the Dealing Day before the Appropriation Date or the Acquisition Date as determined by the Trustees converted into Pounds Sterling; or 

 

	 	(2)	 acquired by the Trustees by purchase, the average purchase price per Share paid by the Trustees (excluding the
costs of purchase and stamp duties) to purchase Shares on the Appropriation Date or the Acquisition Date converted into Pounds Sterling except that if the Shares: 

 

	 	(aa)	 are not all acquired on the relevant Appropriation Date or Acquisition Date; or 

 

	 	(bb)	 are acquired otherwise than by means of a purchase of Shares on a regulated market, 

the average purchase price per Share will be the middle market quotation of a Share of the same class on the New York Stock Exchange on the
Dealing Day immediately before the relevant Appropriation Date or Acquisition Date as determined by the Trustees converted into Pounds Sterling; or 
  

	 	(3)	 acquired by the Trustees by subscription and/or by purchase, the value per Share calculated on the other basis
agreed by the Trustees and HMRC in accordance with paragraph 92 of Schedule 2 (Determination of market value) converted into Pounds Sterling; 

  

	 	(ii)	 in relation to Partnership Shares with an Accumulation Period, the market value specified in the relevant
Partnership Share Agreement for that Accumulation Period as required by paragraph 52 of Schedule 2 which must be one of the following: 

  
 4 

	 	(1)	 the lower of the market value of a Share: 

 

	 	(aa)	 at the beginning of the Accumulation Period; and 

 

	 	(bb)	 on the Acquisition Date; 

 

	 	(2)	 the market value of a Share at the beginning of the Accumulation Period; or 

 

	 	(3)	 the market value of a Share on the Acquisition Date. 

Market value for these purposes means: 
  

	 	(A)	 on any day the middle market quotation of a Share of the same class on the New York Stock Exchange on the
Dealing Day before that day as determined by the Trustees converted into Pounds Sterling; or 

  

	 	(B)	 the value per Share calculated on any other basis agreed between the Trustees and HMRC in accordance with
paragraph 92 of Schedule 2 (Determination of market value) before the beginning of the Accumulation Period converted into Pounds Sterling; and 

  

	 	(b)	 if the Shares are not admitted to trading on the New York Stock Exchange: 

 

	 	(i)	 in relation to Free Shares, Matching Shares, Partnership Shares with no Accumulation Period and Dividend
Shares, on any day the market value of a Share determined in accordance with the provisions of Part VIII of the Taxation of Chargeable Gains Act 1992, converted into Pounds Sterling and agreed for the purposes of the Plan with HMRC Shares and Assets
Valuation on or before that day; and 

  

	 	(ii)	 in relation to Partnership Shares with an Accumulation Period, the market value specified in the relevant
Partnership Share Agreement for that Accumulation Period as required by paragraph 52 of Schedule 2 which must be one of the following: 

  

	 	(1)	 the lower of the market value of a share: 

 

	 	(aa)	 at the beginning of the Accumulation Period; and 

 

	 	(bb)	 on the Acquisition Date; 

 

	 	(2)	 the market value of a Share at the beginning of the Accumulation Period; or 

 

	 	(3)	 the market value of a Share on the Acquisition Date. 

Market value for these purposes means the market value determined as described in paragraph (b)(i) above. 

“New York Stock Exchange” means the New York Stock Exchange or any successor body; 

  
 5 

 “Matching Shares” means Shares appropriated to a Participant under Rule 5
for the time being held by the Trustees on his or her behalf under the Plan and which are of the same class and carry the same rights as the Partnership Shares to which they relate and, where the context so admits, includes any New Shares held by
the Trustees on his or her behalf under the Plan; 
 “New Shares” means new shares within the meaning of paragraph 87 of
Schedule 2 (Consequences of company reconstructions); 
 “Participant” means any Eligible Employee to whom the
Trustees have awarded Shares; 
 “Participating Company” means the Company and any Subsidiary which participates in the Plan
in accordance with clause 6.1 and which is bound by the provisions of the Plan; 
 “Partnership Shares” means Shares
which are acquired on behalf of a Participant by the Trustees under Rule 4 and are registered in the name of the Trustees (or any other person nominated by the Board) to be held by the Trustees on behalf of the Participant under the Plan and where
the context so admits includes any New Shares held by the Trustees on his or her behalf under the Plan; 
 “Partnership Share
Agreement” means an agreement in any form determined by the Board which complies with the provisions of Schedule 2 made between the Company, the Trustees and an Eligible Employee under which: 

 

	 	(a)	 the Eligible Employee authorises the Company to deduct (or procure that his or her employing Participating
Company deducts) part of his or her Salary for the purchase of Partnership Shares; and 

  

	 	(b)	 the Company agrees to give effect to the agreement by making (or procuring that the relevant Participating
Company makes) deductions from the employee’s Salary of the agreed amount and at the agreed intervals (so that the limits in paragraph 46 of Schedule 2 (Maximum amount of deductions) are not infringed) and undertakes to arrange for the
acquisition of Partnership Shares by the Trustees on behalf of the Eligible Employee in accordance with the Plan using the amounts so deducted; 

“Partnership Share Money” means amounts deducted from an Eligible Employee’s Salary under the terms of a
Partnership Share Agreement; 
 “Plan” means the Resideo Technologies UK Sharebuilder Plan established by this Deed
including the Schedule and any Partnership Share Agreement or Contract of Participation issued to Eligible Employees or Participants in accordance with the Schedule each as amended in accordance with the provisions of this Deed; 

“Plan Shares” means Free Shares, Matching Shares, Partnership Shares and Dividend Shares; 

“Qualifying Company” means a company which: 
  

	 	(a)	 is a Participating Company at the end of the Qualifying Period; or 

 

	 	(b)	 when the individual was employed by it was: 

 

	 	(i)	 a Participating Company; or 

  
 6 

	 	(ii)	 an Associated Company of a Participating Company or any other Company qualifying under paragraph 17 of Schedule
2 (Meaning of “qualifying company”); 

 “Qualifying Date” means the date on which
eligibility to participate in the Plan is determined being: 
  

	 	(a)	 in the case of Free Shares the Appropriation Date; 

 

	 	(b)	 in the case of Partnership Shares or Matching Shares; 

 

	 	(i)	 if there is no Accumulation Period, the date that Partnership Share Money is deducted in respect of the
Partnership Shares; and 

  

	 	(ii)	 if there is an Accumulation Period, the date of the first deduction of Partnership Share Money in respect of
the Partnership Shares in the Accumulation Period, 

 or subject to the definition of “Qualifying Period” any
other date consistent with the provisions of Schedule 2 determined by the Trustees; 
 “Qualifying Period” means: 

 

	 	(a)	 in the case of Free Shares, a period of not more than 18 months ending on the Appropriation Date;

  

	 	(b)	 in the case of Partnership Shares with or without Matching Shares where there is an Accumulation Period, a
period of not more than six months ending with the start of the Accumulation Period; and 

  

	 	(c)	 in the case of Partnership Shares with or without Matching Shares where there is no Accumulation Period, a
period of not more than 18 months ending with the deduction of the Partnership Share Money relating to the Partnership Shares, 

but in each case so that in respect of an Award the same Qualifying Period applies to all Eligible Employees for each type of Award; 

“Reconstruction or Takeover” means any transaction affecting Plan Shares as mentioned in paragraph 37 of Schedule 2
(Holding period: power of participants to direct trustees to accept general offers etc.); 
 “Relevant Amount” means
£3,600 or any other sum prescribed in paragraph 35 of Schedule 2 (Maximum annual award); 
 “Rules” means the
rules of the Plan set out in the Schedule as amended from time to time in accordance with the provisions of this Deed; 

“Salary” means salary within the meaning of paragraph 43(4) of Schedule 2 (Partnership shares introduction”); 

“Schedule” means the schedule to this Deed; 

“Schedule 2 SIP” means a share incentive plan which meets the requirements of Parts 2 to 9 of Schedule 2; 

  
 7 

 “Share” means a share of Common Stock in the capital of the Company which
satisfies the conditions set out in Part 4 of Schedule 2 (Types of shares that may be awarded) or, if relevant, in the event of a Reconstruction or Takeover of the Company, shares, securities or rights of any description which form part of
any new holding as defined in paragraph 87 of Schedule 2 (Consequences of company reconstructions); 
 “Subsidiary”
means any company which is under the Control of the Company and which is a subsidiary within the meaning given by section 1159 of the Companies Act 2006; 

“Tax Act” means the Income Tax Act 2007; 

“Termination Date” means the date three months following the date on which a Termination Notice has been distributed in
accordance with clause 12.1; 
 “Termination Notice” means notice given under clause 12.1 to terminate the Plan; 

“Trust Period” means the period of 125 years from the date of this Deed which is the perpetuity period or any other perpetuity
period prescribed by statute; 
 “Trustees” means the Trustees referred to in this Deed or any other person or persons who
is or are the trustee or trustees of the Plan; and 
 “Year of Assessment” means a year beginning on any 6 April and
ending on the following 5 April. 
  

	1.2	 In this Deed any reference to a statutory provision is to that provision as amended, extended or re-enacted under it. The singular includes the plural and the other way round and the masculine includes the feminine and the other way round. 

 

	1.3	 In this Deed and the Rules, references to clauses are to the provisions of this Deed and references to Rules
are to the provisions of the Rules. 

  

	2.	 TRUSTS OF THE PLAN

 Unless this Deed provides otherwise, the Trustees declare that they hold any Partnership Share Money, Shares once
awarded and all other trust property deriving therefrom upon trust for the Participants and must apply and deal with them in accordance with the provisions of the Plan. 
  

	3.	 COMPANY’S AND PARTICIPATING
COMPANIES’ OBLIGATIONS 

  

	3.1	 The Company covenants with the Trustees to fulfil all obligations expressed to be binding on the Company under
this Deed and in particular to pay to the Trustees: 

  

	 	(a)	 any sums required to enable the Trustees to acquire Free Shares and/or Matching Shares; and

  

	 	(b)	 any additional expenses incurred in acquiring Partnership Shares where the Initial Market Value of the
Partnership Shares exceeds the Partnership Share Money paid by Eligible Employees to acquire the Partnership Shares. 

  

	3.2	 Each Participating Company binds and obliges itself to pay to the Trustees any sums described in clauses 3.1(a)
and (b) in respect of the acquisition of Free Shares, Matching Shares or Partnership Shares by the Trustees on behalf of Eligible Employees employed by that Participating Company together with any other amounts required to cover any

  
 8 

	 	
costs, charges and expenses incurred in that acquisition and any other expenses and charges incurred by the Trustees in the establishment, operation and termination of the Plan except that:

  

	 	(a)	 a Participating Company must only contribute to the Trustees sums that are required in connection with the
acquisition of Free Shares, Matching Shares or Partnership Shares by the Trustees to be awarded to Eligible Employees who are for the time being employees of that Participating Company or, where applicable, former employees of that Participating
Company; and 

  

	 	(b)	 contribution of sums to be made by each Participating Company to the Trustees to fund any acquisition of Free
Shares, Matching Shares or Partnership Shares by the Trustees must be paid not later than the fifth Dealing Day immediately before the relevant Appropriation Date or Acquisition Date or on any other date the Trustees determine.

  

	4.	 INVESTMENT 

 

	4.1	 The Trustees may in their absolute discretion invest any monies other than Partnership Share Money from time to
time held by them and not required immediately for the acquisition of Shares in accordance with clauses 4.3(a)-(c) inclusive unless the Trustees in their absolute discretion resolve otherwise in which case they will have the power conferred by
section 3 of the Trustee Act 2000. Any income arising on any investments must be used for the purposes of acquiring further Shares or to meet taxation or other liabilities or expenses incurred from time to time in the operation and administration of
the Plan. 

  

	4.2	 The Trustees must hold Partnership Share Money on behalf of an Eligible Employee until the Trustees use the
money in the acquisition of Partnership Shares for the Eligible Employee save that following the withdrawal by a Participant from his or her Partnership Share Agreement or on termination of the Plan in accordance with clause 12, or otherwise in
accordance with Rule 4, the Trustees must pay any uninvested Partnership Share Money to the Participant as soon as practicable. 

  

	4.3	 The Trustees must keep any monies required to be held by them under clause 4.2 in an account (interest bearing
or otherwise) with: 

  

	 	(a)	 a person falling within section 991(2)(b) of the Tax Act; 

 

	 	(b)	 a building society; or 

 

	 	(c)	 a firm falling within section 991(2)(c) of the Tax Act. 

 

	4.4	 The Trustees are under no duty to invest trust property. 

 

	4.5	 The Trustees have the power to borrow monies to acquire Shares for the purposes of the Plan and to satisfy
their obligations under this Deed on any terms they think fit. 

  

	5.	 TRUSTEES’ OBLIGATIONS 

 

	5.1	 The Trustees must apply all monies received for the acquisition of Free Shares, Partnership Shares or Matching
Shares in acquiring those Shares and awarding them to Eligible Employees under the Plan. 

  
 9 

	5.2	 The Trustees must, if the Board directs under Rule 6 that: 

 

	 	(a)	 all of the cash dividends received in respect of Plan Shares must be reinvested in acquiring more Shares; or

  

	 	(b)	 all of the cash dividends received in respect of Plan Shares of those Participants who so elect must be so
reinvested, 

 apply cash dividends received in respect of a Participant’s Plan Shares in acquiring Dividend Shares on
behalf of that Participant in accordance with the Plan. If any amount of a cash dividend is not reinvested in accordance with Rule 6.5, for the time it is retained by the Trustees it must be held by them so as to be separately identifiable for the
purpose of complying with Rule 6.5. 
  

	5.3	 The Trustees must: 

  

	 	(a)	 as soon as practicable after any Free or Matching Shares have been appropriated by the Trustees to a
Participant in accordance with the Rules, notify the Participant of the Appropriation specifying the number and description of those Shares, the Appropriation Date, their Initial Market Value and the Holding Period applicable to them;

  

	 	(b)	 as soon as practicable after any Partnership Shares have been acquired by the Trustees on behalf of a
Participant in accordance with the Rules, notify the Participant of the acquisition specifying the number and description of those Shares, the amount of Partnership Share Money applied by the Trustees in the acquisition and their Initial Market
Value; 

  

	 	(c)	 as soon as practicable after any Dividend Shares have been acquired by the Trustees on behalf of a Participant
in accordance with the Rules, notify the Participant of the acquisition specifying the number and description of those Shares, their Initial Market Value, the Holding Period applicable to them and any amount of uninvested cash dividends held by the
Trustees on behalf of the Participant under Rule 6; and 

  

	 	(d)	 as soon as practicable after any foreign cash dividend is received in respect of Plan Shares, notify the
Participant of the amount of any foreign tax deducted from the dividend before it was paid. 

  

	5.4	 Subject to clause 5.5, clause 5.6, clause 8.1(e), clause 12 and Rules 9 and 10 the Trustees may only dispose of
a Participant’s Plan Shares and deal with any right conferred in respect of any of his or her Plan Shares to be allotted other Shares securities or rights of any description under a direction given by notice by or on behalf of the Participant
in any form prescribed by the Trustees. 

  

	5.5	 The Trustees must not dispose of a Participant’s Free Shares, Matching Shares or Dividend Shares during
the Holding Period (whether by transfer to the Participant or otherwise) unless the Participant has at that time ceased to be in employment with the Company or an Associated Company except that: 

 

	 	(a)	 the Trustees may dispose of a Participant’s Free Shares, Matching Shares or Dividend Shares during the
Holding Period: 

  

	 	(i)	 under a direction under clause 5.4 or a notice under clause 12 given by or on behalf of a Participant;

  

	 	(ii)	 in accordance with clause 8.1(e); or 

  
 10 

	 	(iii)	 in accordance with Rule 9 or Rule 10; and 

 

	 	(b)	 if a Participant ceases at any time to be in employment with the Company or an Associated Company or dies while
in employment with the Company or an Associated Company, the Trustees may unless within one month from cessation of employment with the Company or an Associated Company or his or her death the Participant (or his or her representatives) directs the
Trustees either to transfer his or her Plan Shares to him or her (or to his or her personal representatives) or to another person at his or her (or their) direction or to dispose of his or her Plan Shares: 

 

	 	(i)	 transfer the Participant’s Plan Shares to him or her (or his or her personal representatives) or to
another person at his or her (or their) direction; or 

  

	 	(ii)	 dispose of the Participant’s Plan Shares and account (or hold themselves ready to account) to him or her
(or his or her personal representatives) or to another person at his or her direction for the net sale proceeds of the Participant’s Plan Shares within a reasonable time. 

 

	5.6	 In the event of a Reconstruction or Takeover and in accordance with Rule 10, the Trustees must dispose of any
Plan Shares acquired on behalf of the Participant upon receipt by the Trustees of a notice to this effect signed by the Participant (or his or her personal representatives) and subject to the payment of any income tax under Chapter 6 must account to
the Participant for the net sale proceeds for the Participant’s Plan Shares within a reasonable time. 

  

	5.7	 Subject to their obligations under section 510 of ITEPA (Payments by trustees to employer company on shares
ceasing to be subject to plan), section 511 of ITEPA (PAYE deductions to be made by trustees on shares ceasing to be subject to plan), section 512 of ITEPA (Disposal of beneficial interest by participant), section 513 of ITEPA
(Capital receipts: payments by trustees to employer company) and section 514 of ITEPA (Capital receipts: PAYE deductions to be made by trustees), any direction referred to in clause 5.4 and the provisions of Rule 6, Rule 9, Rule 11
and Rule 12, the Trustees must pay over to the Participant any money or money’s worth received by them in respect of, or by reference to, any of the Participant’s Plan Shares other than money’s worth consisting of New Shares.

  

	5.8	 On any acquisition of Free Shares for the purpose of an Appropriation, if it is not possible to appropriate all
the Free Shares without fractional entitlements arising for individual Participants, or, if for any other reason the Trustees hold Shares which are not to be awarded, the Trustees may retain as many of the Shares as the Company directs or otherwise
sell any of the Shares. If the Trustees sell any of the Shares they must apply the proceeds to meet any expenses. If the proceeds are not required to meet any expenses, the Trustees must pay to the Participating Companies the proceeds in the same
proportion as they were provided or as the Trustees determine. 

  

	5.9	 If the Trustees become entitled in respect of any unawarded Shares to any rights to be allotted, or to
subscribe, further securities in the Company (other than an issue of capitalisation shares of the same class as Shares then held by the Trustees pending any Appropriation, which capitalisation shares must be retained by the Trustees and must form
part of the Shares to be appropriated among the Participants on the relevant Appropriation Date), the Trustees may at their discretion take up those rights or sell them for the best consideration in money reasonably obtainable at the time or sell
sufficient of them nil paid to enable the Trustees to subscribe in full for the balance of any unsold rights or allow them to lapse. 

  
 11 

	5.10	 The Trustees must hold any unawarded Shares or unutilised cash balances arising under clauses 5.8 or 5.9 and
any income arising from them on trust to apply the same in or towards the future subscription or purchase of Shares for the purposes of the Plan and/or their expenses of administering the same, and must notify the Company from time to time of the
amounts and number of Shares so held by them and their application. 

  

	5.11	 The Trustees must maintain any records necessary to enable the Trustees to carry out their obligations under
paragraph 79 of Schedule 2 (Meeting by trustees of PAYE obligations) and paragraph 80 of Schedule 2 (Other duties of trustees in relation to tax liabilities). Where a Participant becomes liable to income tax under Chapter 2 of Part 2
of ITEPA (Tax on employment income) or Chapter 3 or Chapter 4 of Part 4 Income Tax (Trading and Other Income) Act 2005 (Savings and Investment Income) by reason of the occurrence of any event, the Trustees must inform the Participant
of any facts relevant to determining that liability. 

  

	5.12	 The Trustees must, in accordance with paragraph 71A of Schedule 2 (Duty to monitor participants in connected
schemes) maintain records of Participants who have participated in one or more Schedule 2 SIPs established by the Company or a connected company within the meaning of paragraph 18 of Schedule 2 (Requirement not to participate in other
SIPs). 

  

	5.13	 The Trustees must make available to any of the Participating Companies and Participants on reasonable notice
and to HMRC information relevant to them in connection with the Plan as they may reasonably require and must comply with their obligations to make payments to any of the Participating Companies and to make the deductions required under Chapter 6.

  

	5.14	 The Trustees must take all reasonable steps to notify Participants of the principal terms of any offer,
compromise, arrangement or scheme affecting any of a Participant’s Plan Shares (to the extent the Trustee has itself received sufficient notice of the same). If a Participant does not direct the Trustees how they should act in respect of his or
her Plan Shares following any offer, compromise, arrangement or scheme the Trustees must not take any action in relation to the Participant’s Plan Shares. 

 

	5.15	 Upon the termination of the Plan the Trustees must deal with the Plan Shares in accordance with clause 12.

  

	6.	 APPLICATION OF THE PLAN TO
SUBSIDIARIES 

  

	6.1	 Any Subsidiary may with the consent of the Company and the Trustees become a party to this Deed and participate
in the Plan by entering into a deed supplemental to this Deed agreeing to be bound in all respects by this Deed for as long as it is a Subsidiary. 

  

	6.2	 A company ceases to be a Participating Company if it ceases to be a Subsidiary or if the Board serves a notice
on the Trustees that the company will cease to be a Participating Company if: 

  

	 	(a)	 paragraph 10 of Schedule 2 (No preferential treatment for directors and senior employees) is not
breached; and 

  
 12 

	 	(b)	 the rights of Participants employed by the company to Plan Shares appropriated to them or acquired on their
behalf while the company was a Participating Company are not affected. 

  

	6.3	 A company which is or has been a Participating Company must provide the Trustees with all information required
from it for the purposes of the administration and termination of the Plan and must do so in any form the Trustees reasonably require and the Trustees may in good faith rely on that information without further enquiry. 

 

	7.	 VOTING RIGHTS AND
DIRECTIONS AND WAIVER OF DIVIDEND 

  

	7.1	 A Participant may direct the Trustees in writing to exercise any voting rights attaching to the
Participant’s Plan Shares in accordance with the Participant’s wishes. The Trustees will not be entitled to vote on a show of hands in respect of Plan Shares unless all directions received from Participants in respect of the particular
resolution are identical. The Trustees will not be under an obligation to call for a poll. If there is a poll, the Trustees must vote only in accordance with the directions of Participants. The Trustees must not exercise voting rights in respect of
Plan Shares in the absence of directions. The Trustees may not vote in respect of Shares which have not been awarded under the Plan. Nothing in this clause or otherwise shall be deemed to oblige the Trustees to seek the directions of any
Participant. 

  

	7.2	 Whilst and for so long as any Shares are held by the Trustees and no beneficial interest in such Shares has
been vested in any Participant the Trustees shall waive any right to dividend payments in respect of such Shares and the Trustees shall not be liable for any loss to the Trust as a result of such waiver. 

 

	8.	 TRUSTEES’ ADMINISTRATION AND
POWERS 

  

	8.1	 The Trustees may: 

  

	 	(a)	 except as otherwise provided by Schedule 2, delegate any of their powers and duties or any business including
the exercise of any discretion to any person or company including the Company or any Subsidiary; 

  

	 	(b)	 at any time revoke any delegation or arrangement made under this clause or any other power and/or require any
trust property held by another person to be returned to the Trustees and must consider any request from the Company to take any action contemplated in this clause 8.1(b)); 

 

	 	(c)	 employ and pay a registrar, solicitor, broker, actuary, accountant, banker or any other person, and may appoint
any person as their agent to transact all or any business, and may act on the advice or opinion of any solicitor, broker, actuary, accountant or other professional or business person, and will not be responsible for anything done or omitted or
suffered in good faith in reliance on that advice or opinion; 

  

	 	(d)	 execute or authorise any of their directors, officers or employees on their behalf to execute any deeds,
documents, cheques or other instruments by the impression of any signature on behalf of, or as witness of any sealing by, the Trustees of any writing, printing, lithography, photocopying and other modes of representing or reproducing words in a
visible form; 

  
 13 

	 	(e)	 make any arrangements they consider appropriate to facilitate the acquisition of Partnership Shares and/or
Dividend Shares or the sale of Plan Shares for Participants who wish to dispose of their holdings; 

  

	 	(f)	 in accordance with the provisions of this Deed convene meetings and make any regulations they consider
appropriate relating to the administration of the Plan; 

  

	 	(g)	 where a PAYE obligation is imposed on the Trustees under Chapter 6 as a result of a Participant’s Plan
Shares ceasing to be subject to the Plan (including under this clause) and/or where an obligation is imposed on the Trustees to account for employee’s National Insurance contributions meet that obligation by: 

 

	 	(i)	 disposing of any of the Participant’s Plan Shares; or 

 

	 	(ii)	 the Participant paying to the Trustees a sum equal to the amount needed to discharge the obligation, and

 dispose of a Participant’s Plan Shares under this clause 8.1(g) by acquiring some or all of those Shares for the
purposes of the Plan; 
  

	 	(h)	 arrange for the relevant Participating Company to account to HMRC or other authority concerned for any amounts
deducted from payments made under the Plan in respect of income tax or any other deductions required in accordance with Chapter 6; and 

  

	 	(i)	 where there is no relevant Participating Company in respect of a Participant, account to HMRC or any other
authority concerned for any amounts of income tax or other deductions required to be made in accordance with Chapter 6. 

  

	8.2	 Any two Trustees or a body corporate acting as a Trustee may give a valid and effectual receipt or discharge
for the payment or transfer of any money or other property receivable by the Trustees. 

  

	8.3	 In the case of a Participant who is a minor, the receipt by a parent, grandparent or guardian is a good
discharge to the Trustees. 

  

	9.	 TRUSTEES’ PROTECTION AND
CHARGES 

  

	9.1	 The Participating Companies must keep the Trustees (and, in the case of individual Trustees, their estates and
effects) fully indemnified (both before and after any removal or retirement of any Trustee) against all actions, claims, losses, damages, proceedings, charges, expenses, costs, damages, taxes, duties and other liabilities whatsoever but so that no
Trustees are indemnified or exonerated in respect of any fraud or wilful default on his or her part or (in the case of a Trustee engaged in the business of providing a trustee service for a fee) his or her negligence. In addition, the Trustees will
have the benefit of all indemnities conferred upon trustees generally including without limitation pursuant to the Trustee Acts of 1925 and 2000. 

  

	9.2	 Neither the Trustees nor any of their officers or employees are liable to account to Participants for any
remuneration or other benefit received in connection with the Plan and no Trustee or officer or employee of the Trustees is liable to account to other Participants for any profit derived from the Award to him or her of Shares held under the Plan.

  
 14 

	9.3	 Any person acting as a Trustee in the course of any profession or business carried on by him or her may charge
and be paid reasonable remuneration, charges or disbursements, whether in connection with the Plan or otherwise, as are agreed between him or her and the Board. 

 

	9.4	 Any Trustee that is a corporate body will be entitled to charge and be paid any proper and reasonable charges
and expenses agreed between the Trustee and the Company. If the Trustee is a trust corporation, it may, unless otherwise agreed with the Company, act in accordance with its general terms and conditions. 

 

	9.5	 Any Trustee (and any director or officer of a body corporate or a trust corporation acting as a Trustee) will
not on his or her own account be precluded from acquiring, holding or dealing with any debentures, debenture stock, shares or securities whatsoever of the Company or any Subsidiary or any other company in the shares of which the Company or any
Subsidiary may be interested, or from entering into any contract or other transaction with the Company or any Subsidiary or any other company, or from being interested in any contract or transaction, and nor will he or she be in any way liable to
account to the Company or any Subsidiary or any Participant for any profits made, fees, commissions, shares of brokerage, discounts allowed or advantages obtained by him or her from or in connection with that acquisition, holding, dealing, contract
or transaction whether or not in connection with his or her duties hereunder. 

  

	9.6	 The Trustees are entitled in the absence of any obvious error to rely without further enquiry on information
supplied to them by any Participating Company, former Participating Company, or Associated Company for the purposes of the Plan. The Trustees are entitled to rely in the absence of any obvious error on any direction, notice or document purporting to
be given or executed by or with the authority of any Participating Company, former Participating Company or Associated Company or by any Participant as having been so given or executed. 

 

	9.7	 In the professed execution of the trusts and powers contained in this Deed, no Trustee, or director or other
officer of a body corporate acting as Trustee, shall be liable for any loss arising by reason of: 

  

	 	(a)	 the negligence or fraud of any other Trustee or director or other officer or employee of a body corporate
acting as such other Trustee; or 

  

	 	(b)	 any mistake or omission made in good faith by any other Trustee or any such other person.

  

	10.	 APPOINTMENT, REMOVAL, RETIREMENT AND
RESIDENCE OF TRUSTEES 

  

	10.1	 (a)        No person may be a Trustee of the Plan unless that person is
resident in the United Kingdom for tax purposes; and 

  

	 	(b)	 the Board must immediately remove in accordance with clause 10.3 any Trustee who ceases to be so resident.

  

	10.2	 The number of Trustees must be not less than two unless a body corporate is appointed as sole Trustee and if at
any time the number of the Trustees falls below this limit the surviving or continuing Trustee will have power to act only for the purpose of doing all things necessary to concur in or secure the appointment of a new Trustee or Trustees.

  
 15 

	10.3	 Except as provided in clause 10.1(a), the Board may at any time by notice given to the Trustees:

  

	 	(a)	 appoint a new or additional Trustee, including a corporate Trustee (to the exclusion of the Trustees’
statutory power of appointment); and 

  

	 	(b)	 remove a Trustee from office (but not so as to leave in office less than two Trustees, unless the Trustee is a
corporate Trustee), without assigning any reason for the removal and the removal must (in the absence of any later date specified in the notice) take place on the date falling six calendar months from the date of receipt of the notice by the
relevant Trustee or such other date as the Company and the relevant Trustee may agree in writing. 

 On receipt of the
notice, the existing Trustees must execute such documents and do everything reasonably necessary to give effect to the appointment or removal provided always that the Trustees shall be entitled to seek indemnities from the Company or any subsequent
trustee to its reasonable satisfaction. 
  

	10.4	 The powers of appointment and removal will be vested in the Trustees if the Company ceases to exist otherwise
than in consequence of a Reconstruction or Takeover when the successor company (or, if more than one, those successor companies nominated by the Company) will have these powers. 

 

	10.5	 A Trustee may retire at any time by giving to the Company notice of his or her desire to retire and the notice
will take effect at the expiry of six months (or any other period agreed with the Company) from the date of the notice provided that there will be at least three Trustees or a corporate Trustee immediately after the retirement. If this will not
be the case without the appointment of an additional Trustee, the Company will, within the three months after the giving of such notice, appoint such additional Trustee(s) to rectify this. If the Company fails to do so within such three months
period, the retiring Trustee may by deed appoint an additional Trustee(s) and its retirement will become effective on the execution of this deed. The retiring Trustee will not be obliged to give any reason for its retirement and will not be
responsible for any costs occasioned by the retirement but must execute all those documents and do everything reasonably necessary to give effect to the retirement provided always that the Trustees shall be entitled to seek indemnities from the
Company or any subsequent trustee to its reasonable satisfaction. 

  

	10.6	 On his or her removal or retirement, a Trustee must transfer all trust property held by him or her and deliver
all documents in his or her possession relating to the Plan as the Company may direct and hereby authorises the continuing Trustees, in the absence of this transfer, to effect the transfer on his or her behalf. 

 

	10.7	 A person is not disqualified from acting as a Trustee of the Plan because he or she is or has been an employee
of a Participating Company or is or has been a Participant. 

  

	11.	 AMENDMENT OF THE PLAN

  

	11.1	 Except as provided in clause 11.2, the Board is with the prior written consent of the Trustees entitled by
resolution to amend all or any of the provisions of the Plan, except that at any time when the Plan is a Schedule 2 SIP: 

  

	 	(a)	 no amendment may be made to the Plan which would prejudice its status as a Schedule 2 SIP;

  
 16 

	 	(b)	 any amendment to this Deed excluding the Schedule for the purposes of this clause 11.1(b) will only become
effective if effected by a deed supplemental to this Deed executed by the Company and the Trustees; and 

  

	 	(c)	 any amendment to any of the provisions of the Plan made under this clause 11 will bind the Participating
Companies (including where appropriate any former Participating Company), the Trustees and the Participants. 

  

	11.2	 Except as provided in the definitions of “Eligible Employee”, “Relevant Amount”, this
clause 11, and the limits in Rule 3.2, Rule 3.3, Rule 4.4, Rule 5.3, Rule 6.2, Rule 7.1, Rule 7.2 and Rule 8 may not be amended to the advantage of existing or future Participants without the prior approval by ordinary resolution of the members
of the Company in general meeting. 

  

	11.3	 Clause 11.2 does not apply to any amendment which: 

 

	 	(a)	 is necessary to secure and maintain the status of the Plan as a Schedule 2 SIP, to ensure that the status of
the Plan as a Schedule 2 SIP is not withdrawn under any statutory modification of ITEPA or the Tax Acts, or to comply with or take account of the provisions of any proposed or existing legislation, or to obtain or maintain favourable taxation,
exchange control or regulatory treatment of the Company, any Subsidiary or any Participant; and 

  

	 	(b)	 is a minor amendment which is necessary or desirable to benefit or facilitate the administration of the Plan.

  

	11.4	 No amendment may be made to the Plan which: 

 

	 	(a)	 would cause the provisions of this Deed to conflict or be inconsistent with the Rules; 

 

	 	(b)	 would materially and adversely affect the beneficial interests of Participants in Shares already awarded to
them under the Plan; 

  

	 	(c)	 would cause the Plan to cease to be an employees’ share scheme within the meaning of section 1166 of the
Companies Act 2006; 

  

	 	(d)	 unless made with the written consent of the Trustees, would impose on the Trustees any obligations more onerous
than their obligations under this Deed prior to the amendment; and 

  

	 	(e)	 would unless made with the written consent of the Subsidiary involved impose on a Subsidiary any obligations
more onerous than its obligations under this Deed. 

  

	12.	 TERMINATION OF THE PLAN

  

	12.1	 The Board may at any time in its absolute discretion issue a notice (the “Termination Notice”)
in the form the Board determines to terminate the Plan except that if no Termination Notice has been issued by the one hundred and twentieth anniversary of the date of this Deed or, if different, 5 years before the expiry of the Trust Period, the
Board must issue a Termination Notice on that date. A copy of the Termination Notice must be provided without delay to: 

  

	 	(a)	 HMRC; 

  
 17 

	 	(b)	 the Trustees; 

  

	 	(c)	 each Participant; and 

 

	 	(d)	 each Eligible Employee who is party to a Partnership Share Agreement at the date of the Termination Notice.

  

	12.2	 The Trustees must not award any Shares under the Plan following the date of the Termination Notice.

  

	12.3	 The Trustees must remove all Plan Shares from the Plan, as soon as practicable after: 

 

	 	(a)	 the Termination Date; or 

 

	 	(b)	 if later, the date on which the Plan Shares may be removed from the Plan without giving rise to a charge to
income tax under Chapter 6 for a Participant or any earlier date which the Participant agrees to in writing after receipt of the Termination Notice. 

  

	    	 In either case the Trustees may remove Plan Shares from the Plan following the issue of the Termination Notice
by: 

  

	 	(c)	 transferring Plan Shares to the relevant Participant or to another person at his or her direction (or where the
Participant has died to his or her personal representatives); or 

  

	 	(d)	 disposing of the Plan Shares and accounting (or holding themselves ready to account) for the proceeds to the
Participant or to another person at his or her direction. 

  

	12.4	 The Trustees must as soon as practicable after the Termination Notice is issued pay to a Participant any money
held on his or her behalf by the Trustees. 

  

	12.5	 The Trustees must convert any assets which have not been appropriated to Participants into cash on the
Termination Date and distribute the same to the Participating Companies in proportion to the aggregate amounts provided by each of them (if any) to the Trustees. 

 

	13.	 GOVERNING LAW 

 

	    	 This Deed and all non-contractual obligations arising in any way
whatsoever out of or in connection with it are governed by English law. The courts of England have exclusive jurisdiction to settle any claim, dispute, matter or difference which may arise in any way whatsoever out of or in connection with this Deed
or the legal relationship established by it. 

  

	14.	 COUNTERPARTS 

 

	    	 This Deed may be executed in any number of counterparts, each of which when executed and delivered shall
constitute a duplicate original, but all the counterparts shall together constitute the one deed. 

 EXECUTED
BY THE PARTIES AS A DEED. 

  
 18 

 SCHEDULE 

The Rules 
  

	1.	 INVITATIONS TO PARTICIPATE
IN THE PLAN 

  

	1.1	 The Board may at any time following the date on which the Deed is executed in its absolute discretion resolve
to invite participation in the Plan or stop inviting participation in the Plan in respect of any or all of Free Shares, Partnership Shares with or without Matching Shares or Dividend Shares in accordance with the provisions of the Plan.

  

	1.2	 If the Board exercises its discretion in Rule 1.1 and resolves to operate the Plan: 

 

	 	(a)	 the Board must invite every Eligible Employee to participate in the Plan on the same terms in respect of any
Award and every Eligible Employee who participates in the Plan must do so on the same terms; and 

  

	 	(b)	 the Board must issue an invitation in accordance with the Rules in the form the Board determines to:

  

	 	(i)	 each Eligible Employee who is not a Participant; 

 

	 	(ii)	 if applicable, to each Eligible Employee who has since the Plan was operated, revoked a notice previously
served by him or her under Rule 1.3; and 

  

	 	(iii)	 all employees who at the next Qualifying Date are expected to be Eligible Employees, 

and an Eligible Employee may consent to the Appropriation of Free Shares or accept the opportunity to acquire Partnership Shares and/or
Matching Shares by returning duly executed, a Contract of Participation or a Partnership Share Agreement by the date specified in the letter of invitation. If the Trustees do not receive a Contract of Participation or Partnership Share Agreement by
the date specified in the invitation the Eligible Employee will be deemed to have declined to participate in the Plan at that time. 
  

	1.3	 An individual may by notice given to the Company before an Appropriation Date or an Acquisition Date direct
that Free Shares or Partnership Shares with or without Matching Shares will not be appropriated to him or her or acquired on his or her behalf on that Appropriation Date or Acquisition Date or on any subsequent Appropriation Date or Acquisition
Date. A notice given by an individual under this Rule may be revoked by that individual giving the Company a notice of revocation. 

  

	2.	 PARTICIPATION – HOLDING PERIOD,
FORFEITURE AND GROUP PLANS TREATED AS A SINGLE PLAN

  

	2.1	 The Board must specify a Holding Period in respect of each Appropriation of Free Shares or Matching Shares. The
Holding Period must be specified in the Contract of Participation or the Partnership Share Agreement except that: 

  

	 	(a)	 once a Holding Period has been specified in relation to an Appropriation of Free Shares or Matching Shares, it
may not be increased for that Appropriation; 

  
 19 

	 	(b)	 the Board may specify different Holding Periods; and 

 

	 	(c)	 the Holding Period must be the same for all Shares in the same Appropriation. 

 

	2.2	 Except as provided in clause 5.5, clause 8.1(e), clause 12 and Rule 10 a Participant must during the Holding
Period: 

  

	 	(a)	 permit his or her Free Shares, Matching Shares and/or Dividend Shares to be held by the Trustees; and

  

	 	(b)	 not assign, charge or otherwise dispose of his or her beneficial interest in the Free Shares, Matching Shares
and/or Dividend Shares. 

  

	2.3	 The Board may in its absolute discretion resolve that an Appropriation of Free Shares or Matching Shares may be
subject to provision for forfeiture. The Contract of Participation or Partnership Share Agreement must state the extent to which the Free Shares or Matching Shares are forfeitable. 

 

	2.4	 Partnership Shares are not subject to any provisions for forfeiture. However, the Board may in its absolute
discretion resolve that Partnership Shares may be subject to provision requiring Partnership Shares acquired on behalf of an employee to be offered for sale but only if the consideration at which the Partnership Shares must be offered for sale is at
least equal to the lower of: 

  

	 	(a)	 the amount of the Partnership Share Money applied in acquiring the Partnership Shares on behalf of the
Participant; and 

  

	 	(b)	 the market value of the Partnership Shares at the time they are offered for sale. 

 

	2.5	 Dividend Shares are not subject to any provisions for forfeiture. However, the Board may in its absolute
discretion resolve that Dividend Shares may be subject to provision requiring Partnership Shares acquired on behalf of an employee to be offered for sale but only if the consideration at which the Dividend Shares must be offered for sale is at least
equal to the lower of: 

  

	 	(a)	 the amount of the cash dividends applied in acquiring the Dividend Shares; and 

 

	 	(b)	 the market value of the Dividend Shares at the time they are offered for sale. 

 

	2.6	 If an Eligible Employee participates in an Award under the Plan in a Year of Assessment in which he or she has
already participated in an award of shares under one or more other Schedule 2 SIPs established by the Company or a connected company within the meaning of paragraph 18 of Schedule 2 (Requirement not to participate in other SIPs), then the
limits specified in Rules 3.3(g) and 4.4 apply as if the Plan and the other plan or plans were a single plan as required by paragraph 18A of Schedule 2 (Participation in more than one connected SIP in a tax year). 

 

	3.	 FREE SHARES 

 

	3.1	 If the Board resolves to invite participation in the Plan for Free Shares the Board must determine the maximum
amount which may be paid to the Trustees for the acquisition of Shares and must notify the Participating Companies and the Trustees accordingly. 

  

	3.2	 If the Board resolves to make an Appropriation of Free Shares to Eligible Employees the Appropriation may be
made by reference to an Eligible Employee’s remuneration, length 

  
 20 

	 	
of service or hours worked or by reference to performance allowances within the meaning of and in accordance with paragraphs 38-42 of Schedule 2
(Performance allowances: general application). If performance allowances are used the Company must as soon as practicable notify each Eligible Employee of the performance targets and measures to be used to determine the number of Free Shares
to be appropriated to him or her and the same performance allowance will apply to all Eligible Employees in relation to that Appropriation. 

  

	3.3	 Except as provided in Rule 3.5 and any reduction or limit imposed by Rule 7, the Board must determine in
accordance with any one or more of the following formulae the number of Free Shares to be appropriated by the Trustees to each Eligible Employee on any Appropriation Date for which funds have been allocated in accordance with Rule 3.1:

  

	 	(a)	 each Eligible Employee receives a fixed number of Free Shares or a number of Shares with an Initial Market
Value equal to a fixed sum; 

  

	 	(b)	 each Eligible Employee receives Free Shares having an Initial Market Value equal to a percentage of his or her
remuneration as determined by the Board; 

  

	 	(c)	 each Eligible Employee receives a number of Free Shares depending on his or her length of service with a
Qualifying Company; 

  

	 	(d)	 each Eligible Employee receives a number of Free Shares depending on the number of hours worked;

  

	 	(e)	 if the Board decides that performance allowances are to be used, each Eligible Employee receives a number of
Free Shares which is conditional on performance targets and measures notified as soon as practicable to each Eligible Employee having been met; or 

  

	 	(f)	 any other formula determined by the Board which may be agreed with HMRC and satisfies the requirements of
Schedule 2; 

 except that: 
  

	 	(g)	 the aggregate Initial Market Value of all Free Shares which may be appropriated to any Participant in any Year
of Assessment must not exceed the Relevant Amount; and 

  

	 	(h)	 where the number of Free Shares depends on more than one of the formulae in
sub-paragraphs (b), (c) and (d) above each factor must give rise to a separate entitlement and the total entitlement is the sum of those separate entitlements. 

 

	3.4	 The Participating Companies must pay to the Trustees any sums required by the Trustees to purchase Shares to be
appropriated to Eligible Employees as Free Shares under this Rule. 

  

	3.5	 Where the Trustees appropriate Free Shares a proportion of which rank for any dividend or other distribution or
other rights attaching to Shares by reference to a record date before the relevant Appropriation Date and a proportion of which do not, then the Shares must be appropriated to each Eligible Employee as far as practicable in the same proportions.

  

	3.6	 The Free Shares to which each Eligible Employee is entitled as a result of the calculations described in Rule
3.3 must be appropriated to him or her on the Appropriation Date by the Trustees but must be registered in the name of the Trustees on his or her behalf. 

  
 21 

	3.7	 As soon as practicable after any Free Shares have been appropriated by the Trustees to a Participant in
accordance with these Rules, the Trustees must notify the Participant of the Appropriation in a form determined by the Trustees specifying the Appropriation Date, the number and description of those Shares, their Initial Market Value and the Holding
Period applicable to those Shares. 

  

	4.	 PARTNERSHIP SHARES 

 

	4.1	 The Board may in its absolute discretion invite Eligible Employees to acquire Partnership Shares with or
without an Accumulation Period. To participate in an Award of Partnership Shares each Eligible Employee must first enter into a Partnership Share Agreement with the Company and the Trustees to be given effect by deductions from the Eligible
Employee’s Salary. 

  

	4.2	 If the Board resolves to invite Eligible Employees to participate in an Award of Partnership Shares with an
Accumulation Period: 

  

	 	(a)	 the Accumulation Period must be the same for all Eligible Employees participating in that Award; and

  

	 	(b)	 the Partnership Share Agreement must specify: 

 

	 	(i)	 the length of the Accumulation Period; 

 

	 	(ii)	 when the Accumulation Period begins which must not be later than the date on which the first deduction of
salary is made under the Partnership Share Agreement; 

  

	 	(iii)	 when the Accumulation Period ends and whether or not the Accumulation Period will end before that date on the
occurrence of a specified event in which case the Partnership Share Agreement may also provide that where an Accumulation Period comes to an end on the occurrence of a specified event, the Partnership Share Money deducted in that period must be paid
over to the individual as soon as practicable instead of being applied in acquiring Shares except that specified events must be the same for all Eligible Employees participating in that Award; and 

 

	 	(iv)	 how the Initial Market Value will be determined. 

 

	4.3	 The Company may not enter into a Partnership Share Agreement with an Eligible Employee unless the agreement
contains a notice in the form prescribed in paragraph 48 of Schedule 2 (Notice of possible effect of deductions on benefit entitlement). 

  

	4.4	 The amount of Partnership Share Money which may be deducted from an Eligible Employee’s Salary must not
exceed the limits contained in paragraph 46 of Schedule 2 (Maximum amount of deductions) and the minimum amount of Partnership Share money which may be deducted from an Eligible Employee’s salary on any occasion must not be greater than
£10 (or any other minimum amount specified in paragraph 47 of Schedule 2 (Minimum amount of deductions)). 

  

	4.5	 Partnership Share Money must be paid to the Trustees, once deducted by the Company or any Participating
Company, as soon as practicable. 

  
 22 

	4.6	 Except as provided in Rule 4.11, Partnership Share Money must be held by the Trustees until it is applied in
acquiring Partnership Shares on behalf of the relevant Eligible Employee under clause 4.3 of the Trust Deed and any interest arising on Partnership Share Money held by the Trustees in an interest-bearing
account must be accounted for to the relevant Eligible Employee by the Trustees. 

  

	4.7	 An Eligible Employee’s Partnership Share Money must be applied by the Trustees in the acquisition of
Partnership Shares on behalf of the relevant Eligible Employee on the Acquisition Date. 

  

	4.8	 The Company may specify a maximum number of Shares over which an Award of Partnership Shares may be made on any
one occasion. The Partnership Share Agreement will require the Company to notify relevant Eligible Employees of any maximum before the deduction of Partnership Share Money for that Award if there is no Accumulation Period and before the beginning of
the Accumulation Period if there is an Accumulation Period. 

  

	4.9	 If the Company receives applications for Partnership Shares in excess of the maximum determined by the Board in
accordance with Rule 4.8 the Board must adjust individual applications downwards either: 

  

	 	(a)	 on a pro-rata basis; or 

 

	 	(b)	 on any other basis the Board may determine and agree in advance with HMRC, 

except that: 
  

	 	(i)	 if possible, each applicant who so wishes should be able to participate at least to the extent represented by
the minimum monthly amount under Rule 4.4; and 

  

	 	(ii)	 if there are insufficient Shares available to allow full participation based on the minimum monthly amount,
then participation based on the minimum monthly amount will be afforded to those applicants who are selected at random in a ballot conducted by the Board. 

  

	4.10	 The number of Partnership Shares awarded to each Eligible Employee must be determined in accordance with their
Initial Market Value. As soon as practicable after any Partnership Shares have been acquired by the Trustees on behalf of a Participant, the Trustees must notify the Participant of the acquisition in a form which the Trustees determine and which
must specify the number and description of those Shares, the amount of Partnership Share Money applied by the Trustees in their acquisition and their Initial Market Value. 

 

	4.11	 Any surplus Partnership Share Money following the acquisition of Partnership Shares by the Trustees must be
paid over to the Participant as soon as practicable or may with the agreement of the Participant in the Partnership Share Agreement be carried forward and added to the amount of the next deduction where there is no Accumulation Period or to the next
Accumulation Period. 

  

	4.12	 Except as provided in clause 8.1(e), Partnership Shares may be withdrawn from the Plan at any time.

  
 23 

					
	4.13	  	(a)	  	A Participant may at any time give notice to the Company to stop deductions under a Partnership Share Agreement. A Participant may subsequently give notice to the Company to restart deductions by giving notice to the Company (but
not so as to make up missed payments). If a notice is received stopping deductions, deductions will be stopped no later than 30 days (or any other period specified in Schedule 2) following the date of receipt unless a later date is specified in the
notice. If a notice to re-start deductions is received, deductions will be restarted no later than the first deduction due following 30 days (or any other period specified in Schedule 2) from the date of
receipt of the notice unless a later date is specified in the notice.

  

	 	(b)	 The Company may at any time give notice to the Participant to stop deductions under a Partnership Share
Agreement to acquire Partnership Shares without an Accumulation Period. The Company may subsequently give notice to the Participant to restart deductions (but not so as to make up missed payments). 

 

	 	    	 If a notice is given stopping deductions, deductions will be stopped no later than 30 days (or any other period
specified in Schedule 2) following the date the notice is given unless a later date is specified in the notice. If a notice to restart deductions is given under this Rule 4.13, deductions will be restarted no later than the first deduction due
following 30 days (or any other period specified in Schedule 2) from the date the notice is given unless a later date is specified in the notice. 

  

	4.14	 A Participant may withdraw from a Partnership Share Agreement at any time by notice to the Company. Unless a
later date is specified any notice will take effect 30 days from the date of receipt. 

  

	4.15	 If a Participant withdraws from a Partnership Share Agreement or if the Trustees receive a Termination Notice
from the Board or if the Plan ceases to be a Schedule 2 SIP the Trustees will return all Partnership Share Money held by the Trustees to the relevant Participant or Eligible Employee as soon as practicable. 

 

	5.	 MATCHING SHARES 

 

	5.1	 If the Board in its absolute discretion decides to offer Matching Shares with an invitation to acquire
Partnership Shares in accordance with Rule 4, the following provisions apply. 

  

	5.2	 The Participating Companies must pay to the Trustees any sums required by the Trustees to acquire Shares to be
appropriated to Eligible Employees as Matching Shares under this Rule. 

  

	5.3	 The number of Matching Shares to be appropriated to each Eligible Employee when Partnership Shares are acquired
on behalf of each Eligible Employee will be calculated by applying the ratio specified in the Partnership Share Agreement to the number of Partnership Shares to be acquired on that occasion. The ratio must be the same for all Eligible Employees for
that Award and must not exceed two Matching Shares for each Partnership Share (or any other ratio specified from time to time in Schedule 2). If the Partnership Shares on that day are not sufficient to produce a Matching Share the match may be made
when enough Partnership Shares have been acquired to allow at least one Matching Share to be appropriated and so that if there are any unmatched Partnership Shares, these may be counted for the purposes of the next available occasion when Matching
Shares may be appropriated to an Eligible Employee who is also a Participant. 

  
 24 

	5.4	 Matching Shares must be appropriated by the Trustees on the same day as the Partnership Shares to which they
relate are awarded and on exactly the same basis to all Eligible Employees who participate in the Award and Rule 3.5 applies amended as necessary. 

  

	5.5	 As soon as practicable after any Matching Shares have been appropriated by the Trustees to the Participant, the
Trustees must notify the Participant of the Appropriation in a form which the Trustees determine and which must specify the Appropriation Date, the number and description of those Shares, their Initial Market Value and the Holding Period applicable
to them. 

  

	6.	 DIVIDEND SHARES 

 

	6.1	 The Board may, in its absolute discretion, direct that: 

 

	 	(a)	 some or all of the cash dividends received in respect of Plan Shares must be reinvested in acquiring Shares;

  

	 	(b)	 some or all of the cash dividends received in respect of Plan Shares of those Participants who so elect must be
reinvested by the Trustees in acquiring Shares on behalf of those Participants; or 

  

	 	(c)	 cash dividends may not be reinvested in acquiring Shares. 

If the Board issues a direction under clause 6.1(a) or 6.1(b), the direction must set out the amount of the cash dividend which may be applied
or how that amount is to be determined. The Company may specify a maximum number of Shares over which an Award of Dividend Shares may be made under clause 6.1(a) or may be made under clause 6.1(b). The Company must notify relevant Eligible Employees
of any maximum before any acquisition of Dividend Shares. 
  

	6.2	 If Rule 6.1(a) applies or a Participant makes an election under Rule 6.1(b), any cash dividend received by the
Trustees in respect of Plan Shares held on behalf of a Participant must be applied by the Trustees in acquiring more Shares on his or her behalf on the Acquisition Date and the number of Dividend Shares acquired on his or her behalf must be
determined by the Trustees in accordance with their Initial Market Value. 

  

	6.3	 As soon as practicable after any Dividend Shares have been acquired on behalf of a Participant, the Trustees
must notify the Participant of the acquisition in a form which the Trustees determine and which must specify the number and description of those Shares, their Initial Market Value, the Holding Period applicable to them and any amount of uninvested
cash dividends held by the Trustees on behalf of the Participant. 

  

	6.4	 The Trustees must reinvest dividends in a way that is fair and equal between Participants.

  

	6.5	 Any amount of a cash dividend which is not reinvested under Rule 6.2 because it is insufficient to acquire a
Share must unless the Trustees determine otherwise be retained by the Trustees and carried forward to be added to the amount of the next cash dividend to be reinvested except that any amount so retained must be paid to a Participant as soon as
practicable: 

  

	 	(a)	 if or to the extent that it is not reinvested within the period of three years beginning with the date on which
the cash dividend was paid; 

  
 25 

	 	(b)	 if within the said period of three years the Participant ceases employment with the Company or any Associated
Company; 

  

	 	(c)	 if a Termination Notice is issued; or 

 

	 	(d)	 if the Trustees determine that the amount will not be retained. 

 

	6.6	 If the Board does not make a direction under Rule 6.1(a) or a Participant does not make an election under Rule
6.1(b), the Trustees must pay the cash dividend or any remaining balance to the Participant as soon as practicable. 

  

	6.7	 The Board may from time to time in its absolute discretion by notice given to all Eligible Employees revoke a
direction given under Rule 6.1 in which case any election made by a Participant under Rule 6.1(b) would immediately cease to have effect. 

  

	7.	 LIMITS ON PARTICIPATION

  

	7.1	 The number of Free Shares and Matching Shares to be appropriated to an Eligible Employee must be reduced in
accordance with the provisions of Rule 7.2 if the total number of Free and Matching Shares acquired by way of subscription by the Trustees and appropriated under the Plan during the previous ten years when aggregated with any other Shares issued or
capable of being issued under Any Other Plan during that period would otherwise exceed ten per cent of the Company’s ordinary share capital then in issue. 

 

	7.2	 If it is not possible to appropriate to all Eligible Employees Free Shares and Matching Shares to meet the
allocation basis described in Rule 3.3 because of any provision of this Rule 7, the number of Free Shares and/or Matching Shares to be appropriated to each Eligible Employee must be scaled down on a proportionate basis or in any other manner
determined by the Board which complies with the requirements of paragraph 9 of Schedule 2 (Participation on same terms). 

  

	8.	 SHARES 

Shares subscribed for by the Trustees (whether or not appropriated under the Plan) will rank pari passu in all respects with Shares then in
issue except they will not rank for any rights attaching to the Shares by reference to a record date preceding the date of issue. 
  

	9.	 RIGHTS ISSUES AND CAPITALISATION
ISSUES 

  

	9.1	 Whenever any rights to acquire New Shares are granted by a company to the holders of any class of shares of
which some are Plan Shares the Trustees shall sell sufficient rights nil paid to the extent necessary to enable the Trustees to subscribe in full for the balance of any unsold rights. 

 

	9.2	 Except as provided in Rule 12, any New Shares taken up by the Trustees on behalf of any Participant under Rule
9.1 will form part of the Participant’s Plan Shares and will be deemed to have been appropriated to, or acquired on behalf of the Participant, in the same way and at the same time as the Participant’s Plan Shares to which they relate
except that this Rule 9.2 does not apply in relation to rights arising under a rights issue to subscribe shares in a company unless similar rights are conferred in respect of all ordinary shares in the company. 

  
 26 

	9.3	 Nothing in this Rule requires the Trustees to act in any manner which would involve them in any liability
unless indemnified to their satisfaction by the Participant against that liability. 

  

	9.4	 If any New Shares are allotted by way of capitalisation to the Trustees in respect of any Participant’s
Plan Shares, those New Shares will form part of that Participant’s Plan Shares and will be deemed to have been appropriated at the same time as the Participant’s Plan Shares in respect of which they are allocated. 

 

	10.	 RECONSTRUCTION AND TAKEOVER

  

	10.1	 If there is a Reconstruction or Takeover affecting Plan Shares, Participants must be notified of the
Reconstruction or Takeover by the Trustees and any Participant may give notice to the Trustees instructing them on the action to be taken and, if appropriate, exercise any right to elect to receive any particular form of consideration available in
respect of any of his or her Plan Shares. 

  

	10.2	 If there is a Reconstruction or Takeover affecting Plan Shares, the consideration received will if it consists
of cash or securities which cannot be held under the Plan be treated as the proceeds of a disposal under Rule 14.1 and if it consists of New Shares be held by the Trustees as Plan Shares under the Rules applied, with the necessary changes, as if
they were the Shares in respect of which they are issued or which they otherwise represent. 

  

	10.3	 If notices to acquire compulsorily any Plan Shares are issued under section 979 of the Companies Act 2006 by
another company for a consideration consisting of cash and/or shares, Participants must be notified of this by the Trustees as soon as practicable after receipt of the notices by the Trustees and the Participant give notice of his or her
instructions to the Trustees in relation to the consideration. The provisions of Rules 10.1, 10.2 and 12 apply, with the necessary changes. 

  

	10.4	 If a transaction occurs during an Accumulation Period by virtue of which the Shares to be acquired under the
Partnership Share Agreement would result in a new holding of shares equating to the original holding of shares for capital gains tax purposes, the Board must with the consent of the relevant Eligible Employee allow the Partnership Share Agreement to
continue in effect as if it were an agreement to purchase the shares comprising the new holding. 

  

	11.	 SCRIP DIVIDENDS 

 

	11.1	 Except as provided in Rule 6, this Rule 11 applies where the holders of any class of shares of which some are
Plan Shares are offered the right to elect to receive shares, credited as fully paid in whole or in part, in place of a cash dividend. Within five Dealing Days or any other period decided by the Trustees before the closing of the offer, the
Participant may: 

  

	 	(a)	 instruct the Trustees to elect to receive shares; or 

 

	 	(b)	 instruct the Trustees to elect to receive cash, 

which instructions may be of particular or of general application and relate to Plan Shares awarded before and after the relevant date of the
scrip dividend. If neither Rule 6.1(a) nor Rule 6.1(c) applies the Trustees must notify Participants of their right to elect for shares or cash. 

  
 27 

	11.2	 Any shares taken up by the Trustees on behalf of any Participant under this Rule will not form part of the
Participant’s Plan Shares to which they relate and they will belong to the Participant and the Trustees must take all reasonable steps to procure that the Shares so acquired are vested in the Participant without delay. 

 

	12.	 FRACTIONAL ENTITLEMENTS 

 

	12.1	 If a company makes an offer or invitation conferring any rights upon its members including the Trustees to
acquire, against payment, additional securities in that company or if that company allots any new securities by way of capitalisation, the Trustees must allocate those rights or securities amongst the Participants concerned on a proportionate basis
and, if the allocation will give rise to a fraction of a security or a transferable unit thereof (in this Rule a “unit”), must round the allocation down to the next whole unit and the Trustees must aggregate the fractions not allocated and
use their best endeavours to sell any rights or units which are not allocated and distribute the net proceeds of sale (after deducting any expenses of sale and any tax payable) proportionately among the Participants whose allocation was rounded
down, except that any sum of less than £3 otherwise distributable to a particular Participant may be retained by the Trustees. 

  

	12.2	 If when the Trustees allocate the New Shares received in respect of Plan Shares in accordance with Rules 9 and
10, the allocation would give rise to a fraction of a New Share, the Trustees must, subject to Schedule 2 and the Tax Act, round the allocation up or down to the next whole unit as they think fit. 

 

	13.	 CIRCULARS AND NOTICES 

The Company may provide or make available (or procure that the Company’s registrars may provide or make available) to a Participant upon
request copies of any notices, circulars and other documents sent to the shareholders of the Company. 
  

	14.	 DISPOSALS AND PAYMENTS

  

	14.1	 Upon receipt of a sum of money being or being part of the proceeds of any disposal or Capital Receipt in
respect of any Plan Shares, the Trustees must, subject to compliance with the provisions of Schedule 2, Chapter 6 and the Tax Act, account as soon as reasonably practicable to the Participant for any balance remaining in their hands and relating to
those Plan Shares by paying the same to the Participating Company or Subsidiary (if any) by which he or she is employed, except that: 

  

	 	(a)	 any Capital Receipt of less than £3 distributable to a particular Participant may be retained by the
Trustees; and 

  

	 	(b)	 if section 514 of Chapter 6 (Capital receipts: PAYE deductions to be made by trustees) applies the
Trustees must in paying over to the Participant the Capital Receipt make a PAYE deduction for an amount equal to that on which income tax is payable as if the Participant were a former employee of the Trustees. 

 

	14.2	 Any Participating Company or Subsidiary to which the Trustees pay or account for any part of any sum referred
to in Rule 14.1 must subject to compliance with the Tax Act account to the Participant for the balance remaining in its hands. 

  

	15.	 NOTICES  

 

	15.1	 The Trustees will not be bound to act upon any notice given by or on behalf of a Participant or any person in
whom the beneficial interest in his or her Plan Shares is for the time being vested under the Plan 

  
 28 

	 	
unless that notice is received by the Trustees in writing signed by the relevant person except that: 

  

	 	(a)	 “in writing” includes email, notification through any on-line
communication channels established by the Trustees as part of the electronic system for operating the Plan, writing on or transmitted via the screen of a visual display unit or other similar device including facsimile; and 

 

	 	(b)	 the Trustees or the Board as appropriate may specify that a notification may be given by any other means
permitted under Schedule 2. 

  

	15.2	 Any notice which the Trustees are required or may desire to give to any Eligible Employee or Participant under
the Plan or a Termination Notice given by the Board to any Eligible Employee or Participant must be in writing except that: 

  

	 	(a)	 “in writing” includes email, notification through any on-line
communication channels established by the Trustees as part of the electronic system for operating the Plan, writing on or transmitted via the screen of a visual display unit or other similar device including facsimile; and 

 

	 	(b)	 the Trustees or the Board as appropriate may specify from time to time that a notification may be given by any
other means permitted under Schedule 2, 

 and notice is given if delivered to the Eligible Employee personally or sent
first class through the post pre-paid addressed to the Eligible Employee or Participant at his or her address last known to the Trustees (including any address supplied by the relevant Participating Company or
any Subsidiary as being his or her address) or if sent through the Group’s internal postal service. If so personally delivered, notice is deemed to have been given on delivery at the relevant address and if sent by post is deemed to have been
given on the day following the date the notice is posted or if sent through the Group’s internal postal service is deemed to have been given three working days after the date of posting. Any document so sent to an Eligible Employee or a
Participant will be deemed to have been delivered even if the Participant is dead (whether or not the Trustees have notice of his or her death) except where his or her personal representatives have established their title to the satisfaction of the
Trustees and supplied to the Trustees an address to which documents are to be sent. 
  

	16.	 INFORMATION 

The Trustees must maintain any records necessary to comply with the requirements of paragraph 80 of Schedule 2 (Other duties of trustees in
relation to tax liabilities), and must give to each Participant any information in their possession that will enable the Participant to determine and quantify any liability he or she may have to income tax under Chapter 2 of Part 2 of ITEPA
(Tax on Employment Income). 
  

	17.	 DISPUTES 

The decision of the Board in any dispute or question affecting any Eligible Employee or Participant under the Plan is final and conclusive.

  

	18.	 TERMS OF EMPLOYMENT 

 

	18.1	 Nothing in the Deed or the Plan will in any way be construed as imposing upon a Participating Company a
continuing contractual obligation as between that Participating Company and an employee to contribute or to continue to contribute to the Plan. 

  
 29 

	18.2	 In no circumstances will any person who has ceased to be an employee of any member of the Group or who is under
notice of termination of his or her employment be entitled to claim as against any member of the Group or the Trustees any compensation for or in respect of any consequential loss he or she may suffer by reason of the operation of the terms of the
Plan, the provisions of Schedule 2, ITEPA or the Tax Act. 

 EXECUTED as a deed
by                                      ) 

RESIDEO TECHNOLOGIES,
INC.                           ) 

acting
by:                                         
                       ) 
 Director 

Director/Secretary 
 EXECUTED as deed
by                                       ) 

COMPUTERSHARE TRUSTEES
LIMITED              ) 
 acting
by:                                         
                     ) 
 Director 

Director/Secretary 

  
 30Exhibit 10.1

 

 

Purchase and Sale Contract

 

Chailease Finance
Co., Ltd. (CFC)                    (hereinafter
referred to as "Party A")

 

Contracting Party

Prime World International
Holdings Ltd., Taiwan Branch (hereinafter referred to as "Party B")

 

WHEREAS in consideration of the following
Subject Matter purchased by Party A from Party B, the Parties agree to enter into the Agreement as follows:

 

Section 1 Subject Matter, Specifications,
and Quantity: 

	Name, Label, Specification, Type, Quantity, and Unit
	

 

Section 2 Contract Price: Two
Hundred and Sixty-Seven Million, Three Hundred and Forty Thousand, Four Hundred and Sixty-Eight New Taiwan Dollars ($267,340,468),
Tax not Included

 

Section 3 Place of delivery: upon
the date of signing, both parties agree that title to the Subject Matter shall be transferred to Party A, provided that the Subject
matter is still under Party B's possession and placed at its original location or delivered by Party B to any third party designated
by Party A; and any expense for its installation and transportation shall be at Party B's expense.

 

Section 4 Payment: upon
transfer of the Subject Matter to Party A, Party A shall make payment of goods to Party B or any third party designated by Party
B.

 

Section 5 Party
B agrees that, when purchasing the Subject Matter back from Party A after the sale of the Subject Matter is closed, in case of
any defect or nonconforming in its design or manufacture, resulting in loss of general or desired utility or malfunction, Party
B will repair it at its own expense without any dispute.

 

 

 

    	 	1	 

     

    

 

Section 6 Party
B warrants that the title to the Subject Matter belongs to Party B without any mortgage, conditional sale, interest in possession
trust, or any other encumbrance created by any third party, or any involvement in any other liability, if the warranty is breached,
Party B shall assume all civil or criminal liability. 

 

Section 7 Party
B warrants that, selling of the Subject Matter to Party A must be in compliance with Section 185.1.2 of the Company Act, which
provides that such action requires attendance of shareholders representing more than two thirds of total shares issued at the
annual general meeting and consent of more than half of voting rights by shareholders present or, in case of a public-listed company,
attendance of shareholders representing more than half of total shares issued and consent of more than two thirds of voting rights
by shareholders present. 

 

Section 8: Party B fully understands
and agrees the following: because Party A accommodates Party B on the time for contract signing and identity verification, Party
B agrees to officially seal this contract and related claim instrument prior to the contract; before Party A officially seals the
aforementioned contract and claim instrument, Party A is not legally bound by this contract and reserves the right to make final
decisions.

 

Section 9: The
Subject Matter of this contract is purchased by Party A from Party B based on the request and stipulation specified in the finance
lease agreement. If another finance lease agreement between Party A and Party B becomes void or revoked, Party A may revoke or
terminate this sale contract. Party B shall ensure the Subject Matter does not have any defects of goods or title.

 

Section 10: Party
B shall strictly abide by Party A's operating-with-integrity principle and other regulations. Party B shall, by no means, tempt,
promise, scheduled-pay, deliver, or provide inappropriate benefits (such as commission, kickback, gift, and bribes) to Party A
personnel (including but not limited to the person in charge, employee, or other people involved). In the event of a breach of
the aforementioned provisions, Party A may claim for indemnification and deduct the specific amount from the payment or guarantee
deposit that Party A shall make or return according to this contract. In
the case that such deduction is insufficient Party B shall satisfy the balance. Party A may also unconditionally terminate or revoke
this contract. If Party B is aware of any Party A personnel requesting, promising, scheduled-paying,
accepting, or providing inappropriate benefits (such as commission, kickback, gift, and bribes), Party B shall immediately notify
Party A of the person's identity, request, promise, scheduled payment, way of accepting or providing benefits, cash amount, or
other form of benefits; meanwhile, Party B shall provide related evidence for Party A to investigate.

 

Section 11 In
witness whereof, this Agreement is executed in duplicate and the Parties each are provided with one copy. 

 

Section 12 In
case of any dispute arising out of the Agreement, the Parties agree to accept Shihlin District Court in Taiwan as the trial court.

 

Contracting Parties

 

Party A: Chailease Finance Co., Ltd.

 

Legal Representative:

 

 

/s/ Chi-Chung Chen

Project Branch
Manager, Chen, Chi-Chung

 

Party B: Applied Optoelectronics, Inc.,
Taiwan Branch

 

/s/ Chih-Hsiang (Thompson) Lin

Legal Representative: Lin, Chih-Hsiang (Thompson)

 

November 29th, 107 Year of Republic
of China

Repurchase after Sale (L08) /Lease back
after Sale (sb08) /2017.06

 

 

 

 

    	 	2	 

     

    

 

Finance
Lease Agreement No. :XXXXXXXXXX

 

The contracting party, Applied Optoelectronics,
Inc., Taiwan Branch (hereinafter referred to as the "Lessee"), together with the joint guarantor (hereinafter referred
to as the "Guarantor") apply with Chailease Finance Co., Ltd. (CFC) including
the parent company and its subsidiaries (hereinafter referred to as the "Lessor") for finance lease. The Parties agree
to enter into an agreement as follows:

 

Section 1 Leased Property:

The Lessor desires to lease to the Lessee,
and the Lessee desires to lease from the Lessor, the Subject Matter contained in the Leased Items page in this Agreement, including
all auxiliary spares, additional works, improvements, and fixtures and fittings.

 

Section 2 Delivery and Acceptance:

The delivery and acceptance of the leased
property must be subject to any of the following:

		2.1	The Lessor shall require the seller to deliver the leased property used by the Lessee to the place
as specified in the Leased Items page and notify the seller to make such delivery on the specified date of delivery or earlier.

		2.2	In case of failure to deliver on specified day for any reason including force majeure or nonconformity
of the leased property or any other defect, the Lessee agrees to hold the Lessor harmless against any risk or damage arising thereof.

		2.3	Upon receipt of shipping documents by the bank issuing letter of credit, the Lessor shall deliver
B/L to the Lessee. The Lessee shall be responsible for the following procedures such as importing and receiving of goods; delivery
of B/L must be deemed as completion of delivery and acceptance of the leased property, regardless of the status of the leased property
or its place. The Lessee shall issue the Certificate of Delivery and Acceptance of Leased Property to the Lessor.

		2.4	In case of delivery in specie by the Seller, the Lessee shall on its own expense conduct detailed
inspections and required tests on the leased property; if the leased property is free from any defect, the Lessee is hereby authorized
by the Lessor to conduct acceptance and immediately notify the Lessor of its result in writing.

		2.5	The Lessor may exercise simple delivery, transfer of possession or tender of delivery in accordance
with Section 761 of the Civil Law.

 

Section 3 Lease Period and Rent

		3.1.	The validity of the Agreement during the lease period may not be affected by delay of delivery
or the acceptance provision as set forth in Subsection 2.2 and 2.3. The rent must be calculated starting on the payment date specified
in the Leased Items page and ending on the final installment of rent and satisfaction of all expenses paid to the Lessor hereunder

		3.2.	The Lessee shall pay the Lessor the rent specified in the Leased Items page. The installments,
amount, denomination, foreign exchange rate, and payment date for each installment shall be subject to the Leased Items.

		3.3.	Payment of rent for each installment and other expense as specified herein is the essence of the
Agreement. In case of late payment of rent for any installment or any other required payment or any part thereof, the Lessee shall
be liable for default and shall make an additional payment equaling 20% of annual interest rate for period starting on the date
of default and ending on the date of repayment.

 

Section 4 Place of Use, Labeling and
Security of Leased Property

		4.1.	The Lessee shall place the leased property in the place of use as specified in the Leased Items,
and its relocation may not be made until written consent from the Lessor.

		4.2.	The Lessee shall separate any leased property categorized as movable property from any other property,
and the leased property may not be fixed at any other immovable property or be attached or fixed to any other movable property
without written consent from the Lessor.

		4.3.	Without consent from the Lessor, the Lessee may not sell, sublease, transfer, make mortgage or
treatment, or create lien on, the leased property or for any interest in the Agreement, the leased property or its interest on
the Agreement.

		4.4.	The Lessee shall maintain in good repair any brand, logo, plate, label, post and legend appeared
in the leased property, and may not remove, deface or clear them.

 

 

 

    	 	3	 

     

    

 

		4.5.	To the extent to facilitate the performance of the obligations hereunder and is necessary to examine
the leased property, the Lessor or its authorized employee, with prior notice, has right of access to the place where the leased
property is located to examine the status of use of the leased property within the business period.

 

Section 5 Usage and Tax 

		5.1.	The Lessee shall operate the leased property in accordance with any guideline or rules prepared
by the manufacturer to comply with applicable regulations set forth by government agencies; in case of failure resulting in damage,
destruction, forfeiture or seizure, the joint guarantor's liability will not be exempted. All the obligations aforementioned are
immediately due and the contracting party agrees to satisfy all obligations owned to the Lessor without condition and indemnify
the Lessor for losses incurred.

		5.2.	The Lessee shall bear any expense arising out of use of the leased property including but not limited
to taxes, sales tax on leased property, fees, penalties, fines, oil fee and maintenance fee, and cost for required spare parts.

		5.3.	Where any leased property is imported equipment, if the Lessee is required to pay additional duties
or any other expense due to change of regulations or any other reason after the Lessor clears account of costs and the rent starts
to accrue, the Lessee shall unconditionally charge such additional payment into leasing costs and immediately pay the Lessor.

 

Section 6 Maintenance, Improvement,
Alteration and Change 

		6.1.	The Lessee shall at its own expense maintain, repair and keep in good repair any leased property;
it shall provide accessories, tools, and services required for maintenance, and designate qualified staff to conduct maintenance.

		6.2.	Without written consent from the Lessor, the Lessee may not make any alteration, change or additional
parts to any leased property.

		6.3.	In the case that any part or accessory attached to the leased property is replaced by the Lessee
for any reason, the new one must be identical to the replaced one as to their value and utility, and such new item shall be owned
by the Lessor upon the date of replacement.

 

Section 7 Damage and Destruction 

The Lessee shall be
liable for damage or permanent loss of useful value of any part of any leased property caused by its loss, stealing, destruction
or damage, or its impairment or loss of title due to forfeiture, confiscation, seizure, expropriation, or condemnation. Any payment
obligation as provided herein will not be deducted or exempted for circumstances stated above.

 

Section 8 Insurance 

		8.1.	Prior to the execution hereof, the Lessee shall insure any leased property against risks upon both
parties agreement; the coverage and the insurer shall be designated by the Lessor and the premium shall be borne by the Lessee;
its insurance policy must designate the Lessor as the insured and the beneficiary and stipulate that the insurer may not pay any
claim to the lessee or any third party except that the Lessor's interest in leased property is satisfied and the insurer has been
notified in writing. Under the circumstance that during the period of the Agreement, the risks of impairing the value of leased
property or the change of circumstances occur, the Lessor may enter into the discussion with the Lessee, based on the purpose of
secure the value of leased property or disperse risks, insure any leased property against risks, and the insurance policy must
designate the Lessor as the insured and the beneficiary and the premium shall be borne by the Lessee.

		8.2.	The Lessor shall deliver a copy of the insurance agreement to the Lessee and the Lessee is obligated
to honor obligations provided therein.

		8.3.	In the case that any covered event occurs, the Lessee shall notify the insurer and the Lessor,
of such event within 24 hours, and prepare documents and go through procedures required by the insurer.

		8.4.	In the case that any part of any leased property is lost, stolen, destructed or damaged to the
extent that the insurer is of opinion that such property is financially unrecoverable, the insurance benefit paid by the insurer
must be transferred to the Lessor to deduct the Lessee's obligation under Section 3 hereof; in the case that such deduction is
insufficient the Lessee shall satisfy the balance.

		8.5.	In the case that the Lessor, for purposes of securitization or any other financing purpose, transfers
to any third party the Agreement and any right or obligation thereunder in part or in full, the Lessee agrees that the Lessor may
notify the insurance company or go through relevant procedures which change the beneficiary as such transferee under the insurance
agreement which insures such leased property; and the Lessee further agrees to assist the Lessor unconditionally or to do the same
as related insurer requires.

 

 

 

    	 	4	 

     

    

 

Section 9 Lessor's Discharge from Liability

		9.1.	The Lessee agrees to assume any liability of risk from using or utilizing any leased property.

		9.2.	The Lessee agrees to hold the Lessor harmless against any damage, indemnification, expense or indebtedness
arising out of design, manufacture, delivery, possession, use, transfer or hand-over of any leased property.

		9.3.	The Lessor agrees that, to the extent permitted by law, it will transfer to the Lessee its claim
on warranty of the manufacturer or seller of any leased property.

		9.4.	The Lessor disclaims any representation for, or any express or implied warranty of, merchantability
or fitness or validity for a particular purpose and disclaim any liability for any warranty in connection with any leased property.

		9.5.	Any leased property herein is chosen by the Lessee of its own free will, and the Lessee promises
to the Lessor with respect to its responsibility for maintenance, service and valid use.

 

Section 10 Service Charge

Upon execution of
the Agreement, the Lessee shall pay the Lessor a service fee in cash or any other commercial note consented by the Lessor under
the service procedures as specified in the Leased Items; and the Parties agree that the Lessee may not claim a refund of such service
fee for any reason.

 

Section 11 Breach 

In case of any of
the following circumstances, the Lessor may terminate the Agreement and request return of any leased property and the Lessee shall
immediately satisfy all rent including rent for undue period, damages and any other expense:

		11.1.	Failure to satisfy indebtedness in accordance with the Agreement, dishonoring of bill, or material
deterioration of financial position.

		11.2.	Filing for compromise, insolvency, restructuring, winding up, or liquidation in accordance with
bankruptcy law.

		11.3.	Any enforcement, provisional seizure, preliminary injunction, or any other preservation of any
leased property or any asset of the Lessee.

		11.4.	Announcement of forfeiture of material assets due to criminal liability.

		11.5.	Lessee's disposition or transfer of its material assets without consent from the Lessor.

		11.6.	Damage or destruction of leased property provided, resulting in impairment of value or its net
value is insufficient to cover claims and failure to refill despite delivery of notice of refilling within specified period.

		11.7.	There is material breach in dealing with financial institutions.

		11.8.	Upon death, his/her successor declares entailment or abandonment of succession.

		11.9.	The Lessee fails to comply with or perform any provision hereof.

 

In case of one of the aforementioned circumstances,
the Lessee shall, starting on the date of breach and ending on the date of repayment, pay a penalty equaling 0.05% of the amount
for breach each day.

 

Section 12 Miscellaneous 

		12.1.	In the case that the Lessee neglects to perform any right hereunder, resulting in any damage to
the Lessor, the Lessee shall be liable for damages to the extent within damage to the Lessor's interest.

		12.2.	The Lessee and its joint guarantor shall issue a copy of promissory note to the Lessor as security.
In case of any breach by the Lessee, the Lessee and its joint guarantor agree to authorize the Lessor or any other holder to complete
information of maturity date in person or exercise any other right to complete such information in accordance with other laws concerning
promissory notes; and the Lessor is authorized to use such promissory note for repayment of any indebtedness in accordance with
the Agreement in case of breach by the Lessee.

		12.3.	In case of breach by the Lessee, the Lessor may dispose any leased property for indemnification
without notice. If the Lessee has any other claim on the Lessor, the Lessee agrees that the Lessor may directly conduct disposition
or set-off regardless of whether repayment of such claim is due.

		12.4.	Save as stipulated herein, in the case that the Lessee is indebted to the Lessor several obligations,
where the Lessee's payment fails to satisfy all of its indebtedness, the sequence of repayment for such obligations shall be determined
by the Lessor at its discretion.

		12.5.	Any agreement and any book, voucher, or instrument separately entered into by the Lessee and the
Lessor, constitutes an integral part of the Agreement and is equally binding under law with the Agreement.

 

 

 

    	 	5	 

     

    

 

		12.6.	The Lessee and its joint guarantor agree to allow the Lessor to collect, process and use their
information in relation to the Agreement, including but not limited to credit information obtained by query from the Joint Credit
Information Center (JCIC) and receive such information on behalf of them.

		12.7.	In the case that the Lessee and its joint guarantor have authorized the Lessor to apply online
for their credit report from JCIC, the Lessor is entitled to, in accordance with its agreement with JCIC, deliver to JCIC information
regarding agreements entered into between the Lessor and them, including but not limited to essential information, credit information,
financial information including the types of transactions between the Lessor and them, overall payment amount required in the Agreement,
guarantee deposit, residual payment amount that the Lessor shall receive, leased property, amount of the per-month installment,
claim and obligation status, and how distressed debt is handled. In accordance with the purpose of incorporation, articles of association,
and applicable laws, JCIC may give their information to members who participate in and use credit information exchange or any government
agency which supervises any business engaged in finance lease or financial business or other people who are legally permitted to
collect, process, and use the information.

		12.8.	The Lessee and its joint guarantor fully understand and agree the following: because the Lessor
accommodates them on the time for contract signing and identity verification, they agree to officially seal this Agreement and
related claim instrument prior to the Agreement; before the Lessor officially seals the Agreement and claim instrument, the Lessor
is not legally bound by this Agreement and reserves the right to approve the Agreement.

		12.9.	The Lessee and its joint guarantor shall strictly abide by the Lessor's operating-with-integrity
principle and other regulations. The Lessee and its joint guarantor shall, by no means, tempt, promise, scheduled-pay, deliver,
or provide inappropriate benefits (such as commission, kickback, gift, and bribes) to the Lessor's personnel (including but not
limited to the person in charge, employee, or other people involved). In the event of a breach of the aforementioned provisions,
the Lessor may claim for indemnification and deduct the specific amount from the payment or guarantee deposit that the Lessor shall
make or return according to this Agreement. In the case that such deduction is insufficient, the Lessee and its joint guarantor
shall satisfy the balance. The Lessor may also unconditionally terminate or revoke this Agreement. If the Lessee and its joint
guarantor are aware of any Lessor's personnel requesting, promising, scheduled-paying, accepting, or providing inappropriate benefits
(such as commission, kickback, gift, and bribes), they shall immediately notify the Lessor of the person's identity, request, promise,
scheduled payment, way of accepting or providing benefits, cash amount, or other form of benefits; meanwhile, they shall provide
related evidence for the Lessor to investigate.

		12.10.	In the event that any of terms hereof to be invalid, all the remaining terms hereof shall remain
in full force and effect.

 

Section 13 Return of Leased Property

Upon early termination
of the Agreement due to the Lessee's breach of the contract, the Lessee shall bear any risk and expense and recover any leased
property to their original status, send them to such place as designated by the Lessor and return to the Lessor.

 

Section 14 Assignment and Hypothecation

		14.1.	The Lessee may not transfer to any third party any right arising out of the Agreement or sublease,
create encumbrance upon, or permit any third party to use or possess, any leased property.

		14.2.	Within the validity of this Agreement, the Lessee shall not transfer to any third party the ownership
of the leased property and shall not create a right in rem over it.

		14.3.	Without Lessee’s prior written consent, the Lessee shall no transfer any rights or obligations
to any third party in whole or in part for the purposes of financial asset securitization or financing.

 

Section 15 Lessee's Obligations 

		15.1.	The Lessee hereby agrees that, its obligation to pay rent and any other expense in accordance with
the Agreement is, at all event, an absolute obligation without any condition and the Lessee may not unilaterally terminate the
Agreement; and the Lessee may not, for any reason, claim refund in part or in full of any installment of rent and any other expense
in accordance with the Agreement.

		15.2.	Where leased property is a transportation vehicle, the Lessee shall employ qualified members with
driver license and lawfully use it in accordance with applicable government regulations; in case of occurrence of any accident,
the Lessee shall be fully liable and make indemnification in full.

		15.3.	If the Lessor requires to review the financial position of the Lessee or the joint guarantor, they
shall send information, including but not limited to audited financial statements, statement of income, schedule of liabilities,
and schedule of assets as required by the Lessor, to the Lessor for review upon their legal execution.

 

 

 

    	 	6	 

     

    

 

Section 16 Early Termination

When the Lessee performs
the Agreement normally and has no overdue rent, if the Lessee desires to make early termination of the Agreement and make repayment
on a lump-sum basis, the Lessee shall pay off all rent undue in the following ways:

		18.1	Within 18 months after the lease term begins, if the Lessee applies for early termination of the
contract, the Lessee shall pay the total amount of the undue loan of each installment plus the penalty calculated according to
1.5% of the total amount of all undue rent from the early termination date.

		18.2	Over 18 months after the lease term begins, if the Lessee applies for early termination of the
contract, the Lessee shall pay the total amount of the undue loan of each installment.

 

Section 17 Joint Guarantor

		17.1	The Joint Guarantor warrants that the Lessee shall perform all provisions hereunder; in case of
breach by the Lessee, the Joint Guarantor shall be jointly liable for satisfaction and will abandon any defense in accordance with
Section 24 of the Civil Procedures, Indebtedness Section and is willing to be bound by the following:

17.1.1             
The Lessee's liability for warranty covers any rent, note amount, advanced payment, service fee arising out of lease by
the Lessee, and any liquidated damages, interest, late interest, costs, damages, and any other obligation subordinate to principal
debts.

17.1.2             
During the period of validity of the Agreement, where the Lessee desires to make alternation to provisions of the Agreement
with consent from the Lessor as the Lessee thinks practical, the guarantor shall still be jointly and severally liable for her,
whether the Insurer is notified or not.

17.1.3             
Where the Lessor may abandon security interest provided by the Lessee or allow the Lessee to extend payment or replace any
leased property or the assumption of debt by any third party without consent of or notice to the joint guarantor, the joint guarantor
may not make defense or disclaim its liability for warranty for such reason.

17.1.4             
In case of absence of any element in the lease agreement or note, or in completion of procedures or defective title on leased
property, the joint guarantor shall be still fully liable.

17.1.5             
The joint guarantor's liability may not be released until obtaining written consent from the Lessor.

17.2 If
the Lessor is of opinion that credit of the Lessee's joint guarantor is severally damaged or its capability to provide guaranty
is insufficient, the Lessor may request the Lessee to choose another joint guarantor accepted by the lessor for replacement and
the Lessee may not decline such request.

 

Section 18 Choice of Law and Competent
Court 

In the case that the
Lessee or the joint guarantor is foreigner or foreign entity, their obligations under the Agreement, creation, method and validity
of their legal activities, must be governed by the law of Republic of China. The Agreement shall be executed at the place where
the lessor resides. In case of any dispute arising out of the Agreement by the Lessee and the joint guarantor, they agree that
Taiwan District Court shall be the trial court as stipulated in the leased Items, provided that any law sets forth jurisdiction
of such case, such law shall prevail.

 

Section 19 Delivery 

The place of delivery
designated in the Agreement shall be taken as accurate. In the case that the Lessee or the joint guarantor changes its name, organization,
articles of association, seal, legal representative, authority of legal representative, notice address or any other matter, they
shall immediately notify the Lessor of such change in writing and apply for change or deregistration of original seal. The original
seal kept by the Lessor will remain effective until the Lessor agrees to do the same. If the Lessee and the joint guarantor fails
to perform their duty of notice of change of address as stated above, where the Lessor givens any notice at the address specified
in the Agreement or the latest address of notice given by the Lessee and the joint guarantor, three days of such giving shall be
deemed as legal delivery.

 

Section 20 Transfer of Ownership of
Leased Property

Upon expiration of
the lease period of the Agreement or early termination of the Agreement according to Section 16 and the Lessee pay off all rent
and related taxes and fees without any breach, the Lessor shall agree to transfer ownership of any leased property to the Lessee
and the Lessee acquires such ownership upon the date of payment of rent, taxes and fees.

 

 

 

    	 	7	 

     

    

 

Section 21 The Parties have executed
the Agreement in duplicate and each is provided with one copy. 

 

Leased Items

	 	Name, Label and Specification, Manufacturer, Unit and Quantity 
	1.
    Leased Subject Matter 	
	2.
    Seller 	Prime World International Holdings Ltd., Taiwan Branch
	3.
    Place of Use 	No.
    18,Gong 4th Rd., Linkou Dist., New Taipei City 24452, Taiwan (R.O.C.)
	4.
    Lease Period	As of November 29th , 107 Year of Republic of China to October November 30th, 110 Year of Republic of China
	5.
    Service Fee	Zero New Taiwan Dollars (NTD$0)
	6.
    Rent and Payment 	

 

 

 

    	 	8	 

     

    

 

	7.
    Place to Pay Rent	Where the Lessor’s company resides 
	8.
    Foreign Exchange Converter	
        Rent denominated in foreign currency X
        Exchange rate issued by banks on the 7th day before rent payment date =NTD

        Exchange rate issued by banks on the
        7th day         before rent payment date: shall mean spot selling rate of foreign exchange on the
        7th day starting on the 1st         day before the rent payment date; where the 7th day is
        public holiday, memorial day, or rest day, the 7th         day shall be the banking day before public holiday,
        memorial day, or rest day.

	9.
    Competent Court 	Shihlin District Court in Taiwan

 

Contracting Parties

 

Party A: Chailease Finance Co., Ltd.

 

Legal Representative:

 

/s/ Chi-Chung Chen

Project Branch Manager,
Chen, Chi-Chung

 

Party B: Applied Optoelectronics, Inc.,
Taiwan Branch

 

Legal Representative:

 

/s/ Chih-Hsiang (Thompson) Lin

Lin, Chih-Hsiang (Thompson)

 

Joint Guarantor: Co-Guarantor Joint Guarantor:

  

	Joint Guarantor: 	Co-Guarantor Joint Guarantor: 
	 	 
	Address:	Address: 
	 	 
	Tel: 	Tel: 
	 	 
	Joint Guarantor:	Co-Guarantor
Joint Guarantor: 
	 	 
	Address:	Address: 
	 	 
	Tel: 	Tel: 
	 	 
	Joint Guarantor: 	Co-Guarantor Joint Guarantor: 
	 	 
	Address: 	Address: 
	 	 
	Tel: 	 Tel: 

 

 

November 29th, 107 Year of Republic
of China

 

  

 

 

 

 

 

 

    	 	9	 

     

    

 

  

	Promissory Note
	 	 
	 	 
	Note payable to bearer on DD/MM/YYYY of Republic of China

 

Chailease Finance Co., Ltd. or its nominee

 

Two Hundred And Ten Million, Six Hundred And One Thousand, Six Hundred And Five New Taiwan Dollars ($210,601,605)

 

This note is exempted from preparation of dishonoring certificate and obligation of notice as provided in Section 89 of the Negotiable Instruments Act

The annual interest rate is calculated at 20% starting on maturity date

The drawer of the note irrevocably authorize the bearer, its agent, employee or its nominee to complete the maturity date and any other required information

Place of payment: 8F~12F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

 

 

Drawer: Prime World International Holdings
Ltd., Taiwan Branch Drawer:

	Address:  	Address: 
	 	 
	 	 
	Drawer:    	Drawer: 
	Address:     	Address: 
	 	 
	Drawer:   	Drawer: 
	Address:   	Address: 
	 	 
	Drawer:   	Drawer: 
	Address:   	Address:

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