Document:

eh1300877_ex0407.htm

EXHIBIT 4.7

 

 

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

Between

 

CANADIAN PACIFIC RAILWAY LIMITED

 

(the “Corporation”)

 

And

 

PERSHING SQUARE CAPITAL MANAGEMENT, L.P.

 

(“Pershing Square”)

 

July 29, 2013

 

 

 

 

 

  

  

  

 

TABLE OF CONTENTS

 

Page

TABLE OF CONTENTS

 

	
ARTICLE 1 INTERPRETATION

	
1

	  	
1.1

	
Definitions

	
1

	  	
1.2

	
Interpretation Not Affected by Headings, etc.

	
4

	  	
1.3

	
Accounting References

	
4

	  	
1.4

	
Number, etc.

	
5

	  	
1.5

	
Statutory References

	
5

	  	
1.6

	
Date for Any Action

	
5

	
ARTICLE 2 REGISTRATION RIGHTS

	
5

	  	
2.1

	
Required Registration

	
5

	  	
2.2

	
Selection of Underwriters

	
7

	  	
2.3

	
Registration Expenses

	
7

	
ARTICLE 3 REGISTRATION PROCEDURES

	
8

	  	
3.1

	
Procedures

	
8

	  	
3.2

	
Obligations of the Holders

	
11

	
ARTICLE 4 DUE DILIGENCE; INDEMNIFICATION

	
12

	  	
4.1

	
Preparation; Reasonable Investigation

	
12

	  	
4.2

	
Indemnification

	
12

	
ARTICLE 5 LOCK-UP AGREEMENT

	
15

	  	
5.1

	
Secondary Registration Lock-Up

	
15

	  	
5.2

	
Additional Lock-up Agreements

	
15

	  	
5.3

	
Holders Lock-up Agreements

	
16

	
ARTICLE 6 GENERAL

	
16

	  	
6.1

	
Blackout Periods.

	
16

	  	
6.2

	
No Inconsistent Agreements

	
16

	  	
6.3

	
Remedies

	
16

	  	
6.4

	
Amendments

	
17

	  	
6.5

	
Assignment

	
17

	  	
6.6

	
Term

	
17

	  	
6.7

	
Severability

	
17

	  	
6.8

	
Delays or Omissions

	
17

	  	
6.9

	
Descriptive Headings

	
18

	  	
6.10

	
Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

	
18

	  	
6.11

	
Notices

	
18

 

 

 

 

 

  

i

  

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement is made on July 29, 2013 between Canadian Pacific Railway Limited (the “Corporation”), a corporation governed by the laws of Canada, and Pershing Square Capital Management, L.P. (“Pershing Square”), a Delaware limited partnership, on behalf of the undersigned investment funds managed by Pershing Square (each a “Holder”, and together the “Holders”).

 

WHEREAS the Corporation intends on filing a preliminary short form base shelf prospectus and a final short form base shelf prospectus (together, the “Base Prospectus”) with the Commissions (as hereinafter defined), and, in conjunction therewith, intends on filing a registration statement with the United States Securities and Exchange Commission (the “SEC”) on Form F-10 (the “Registration Statement”), covering the Registrable Securities (as hereinafter defined);

 

WHEREAS the parties desire to enter into this Agreement to provide inter alia for the right of the Holders to require the Corporation, from time to time, to prepare and file a preliminary prospectus supplement and a final prospectus supplement (together, a “Prospectus Supplement”) with the Commissions, and, in conjunction therewith, to prepare and file the Prospectus Supplement with the SEC, to permit the sale of the Registrable Securities in such manner as the Holders may designate on the terms and conditions of this Agreement.

 

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants, agreements, representations, warranties and indemnities of the parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the parties agree as follows:

 

ARTICLE 1

INTERPRETATION

 

	
1.1

	
Definitions

 

In this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

 

	
  

	
(a)

	
“1933 Act” means the United States Securities Act of 1933, as amended, including the rules and regulations adopted by the SEC thereunder.

 

	
  

	
(b)

	
“Affiliate” has the meaning ascribed thereto in the 1933 Act.

 

	
  

	
(c)

	
“Business Day” means a day, other than a Saturday, Sunday or statutory holiday, when banks are generally open in the City of Calgary or the City of New York for the transaction of banking business and the SEC is open for business.

 

  

  

  

 

	
  

	
(d)

	
“Commissions” means the securities commissions or other securities regulatory authorities in each of the provinces and territories of Canada.

 

	
  

	
(e)

	
“Common Shares” means the Corporation’s common shares, without par value, and any securities into which such common shares may hereinafter be reclassified.

 

	
  

	
(f)

	
“Corporation” means Canadian Pacific Railway Limited and any corporation resulting from the amalgamation or merger of the Corporation with another corporation or other corporations.

 

	
  

	
(g)

	
“Demand Registrable Securities” shall have the meaning set out in subsection 2.1(a).

 

	
  

	
(h)

	
“Demand Registration” shall have the meaning set out in subsection 2.1(a).

 

	
  

	
(i)

	
“Designated Registrable Securities” shall have the meaning set out in subsection 2.1(d).

 

	
  

	
(j)

	
“Distribution Period” has the meaning ascribed thereto in subsection 3.1(d).

 

	
  

	
(k)

	
“Holders” means the undersigned investment funds managed by Pershing Square.

 

	
  

	
(l)

	
“misrepresentation” means (i) an untrue statement of material fact, or (ii) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

 

	
  

	
(m)

	
“MJDS” means the multijurisdictional disclosure system adopted by the Commissions through National Instrument 71-101 - The Multijurisdictional Disclosure System and adopted by the SEC or any successor multijurisdictional disclosure system adopted by the Commissions and the SEC from time to time.

 

	
  

	
(n)

	
“Person” means an individual, body corporate with or without share capital, partnership, joint venture, unincorporated association, syndicate, sole proprietorship, trust, pension corporation, union, governmental agency, board, tribunal, ministry, commission or department and the heirs, beneficiaries, executors, legal representatives or administrators of an individual.

 

	
  

	
(o)

	
“Piggy Back Registrable Securities” shall have the meaning set out in subsection 2.1(d).

 

  

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(p)

	
“Piggy Back Registration” shall have the meaning set out in subsection 2.1(d).

 

	
  

	
(q)

	
“Prospectus” means, collectively, the Base Prospectus and the Prospectus Supplement.

 

	
  

	
(r)

	
“Registrable Securities” means (i) Common Shares held by the Holders as of the date of this Agreement and (ii) any Common Shares or other securities of the Corporation issued as a dividend, distribution, exchange, share split , recapitalization, or other corporate event in respect of such Common Shares, it being understood and agreed by the parties hereto that the Holders may sell pursuant to this Agreement and the Prospectus no more than seven million (as adjusted pursuant to (ii) above) Common Shares and once the Holders have sold seven million Common Shares pursuant to this Agreement and the Prospectus the remaining Common Shares held by the Holders shall no longer be Registable Securities.

 

	
  

	
(s)

	
“Registration” means the qualification or registration, as applicable, of securities under the Securities Laws so as to permit the distribution of such securities to the public in any or all of the provinces and territories of Canada and in the United States subject to the limitations contained herein.

 

	
  

	
(t)

	
“Registration Expenses” means all expenses incurred in connection with the distribution of the Registrable Securities pursuant to this Agreement including, without limitation, the following:

 

	
  

	
(i)

	
all fees, disbursements and expenses payable to counsel of the Holders;

 

	
  

	
(ii)

	
all fees or commissions payable to an underwriter, investment banker, manager or agent;

 

	
  

	
(iii)

	
all fees, disbursements and expenses of counsel and auditors to the Corporation;

 

	
  

	
(iv)

	
all expenses in connection with the preparation, translation, printing and filing of any preliminary prospectus, prospectus, registration statement or any other offering document and any amendments and supplements thereto and the mailing and delivering of copies thereof to any underwriters and dealers;

 

	
  

	
(v)

	
all filing fees of any Commission, of the SEC and of any applicable U.S. state regulator;

 

	
  

	
(vi)

	
all transfer agents’, depositaries’ and registrars’ fees and the fees of any other agent appointed by the Corporation;

 

  

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(vii)

	
all expenses relating to the preparation of certificates;

 

	
  

	
(viii)

	
all fees and expenses of any securities exchange or over-the-counter market on which the Common Shares are then listed; and

 

	
  

	
(ix)

	
all expenses of the Corporation relating to “road shows” and marketing activities and all travel and lodging expenses of the Corporation in connection with such “road shows” and marketing activities.

 

	
  

	
(u)

	
“Registration Period” means the period commencing on the date of this Agreement and terminating on the earlier of (i) such time as the Corporation delivers an opinion of counsel reasonably acceptable to the Holders that the Holders may sell in a single transaction all of the Registrable Securities then held by them without being subject to the volume or manner of sale limitations of Rule 144 under the 1933 Act and the notice requirements of section 2.8 of National Instrument 45-102, (ii) such time as all Registrable Securities covered by such Registration Statement have been sold pursuant to such Registration Statement or (iii) 25 months from the day a receipt is received from the Commissions for the Base Prospectus.

 

	
  

	
(v)

	
“SEC” means the United States Securities and Exchange Commission.

 

	
  

	
(w)

	
“Secondary Registration” shall have the meaning set out in subsection 2.1(d).

 

	
  

	
(x)

	
“Securities Laws” means the applicable securities legislation of each of the provinces and territories of Canada, as well as the applicable federal and state securities legislation of the United States, and all published rules, regulations, instruments, policy statements, orders, rulings, communiqués and interpretation notes issued thereunder or in relation thereto, as the same may hereafter be amended or replaced.

 

	
1.2

	
Interpretation Not Affected by Headings, etc.

 

The division of this Agreement into Articles, sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof.  Unless otherwise indicated, all references to “section” or “subsection” followed by a number and/or a letter refer to the specified section of this Agreement.  The terms “this Agreement”, “hereof”, “herein” and “hereunder” and similar expressions refer to this Agreement and not to any particular Article, section or other portion hereof and include any agreement or instrument supplementary or ancillary hereto.

 

	
1.3

	
Accounting References

 

  

4

  

 

All accounting terms not expressly defined herein shall be construed in accordance with United States generally accepted accounting principles, except where the context otherwise requires.

 

	
1.4

	
Number, etc.

 

Unless the context otherwise requires, words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders.

 

	
1.5

	
Statutory References

 

Except as otherwise expressly provided in this Agreement, any references to a statute or regulation shall be construed as a reference to such statute or regulation in effect on the date of this Agreement as it may be amended, re-enacted or superseded from time to time.

 

	
1.6

	
Date for Any Action

 

In the event that any date on which any action is required to be taken hereunder by any of the parties hereto is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day.

 

ARTICLE 2

REGISTRATION RIGHTS

 

	
2.1

	
Required Registration

 

	
  

	
(a)

	
Subject to the provisions hereof, at any time and from time to time during the Registration Period, the Holders may request the Corporation to file a Prospectus Supplement offering all or part of the Registrable Securities (such offering being hereinafter referred to as a “Demand Offering”).  Such a request shall be in writing and shall specify the number of Registrable Securities to be sold (the “Demand Registrable Securities”), the intended method of disposition and the jurisdictions (which may only include Canada or any province or territory thereof and/or the United States) in which the Holders, acting reasonably, request that the Demand Offering be effected (provided that if the Holders request the Demand Offering to be effected only in the United States, then the Corporation shall also file the Prospectus Supplement in one province of Canada solely to the extent required for the purposes of MJDS qualification).  Subject to Section 2.1(d), the Corporation shall not be obligated to effect more than four underwritten Demand Offerings in total during the Registration Period.  For the purposes of this subsection, a Demand Offering will not be considered as having been effected until either (i) a Prospectus Supplement has been filed with the Commissions and/or the SEC, as applicable, pursuant to which the Demand Registrable Securities are to be sold, (ii) the Holders have withdrawn their request or (iii) the Holders have failed to fulfill their obligations under this Agreement with respect to 

 

  

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such request.  In the event that the Corporation proposes to offer and sell its securities as part of any Demand Offering initiated by the Holders under this Agreement, and if the managing underwriter or underwriters advise the Corporation in good faith that the inclusion of securities requested by the Corporation to be included in such offering may, in their opinion, have an adverse effect on the distribution or sales price of the Demand Registrable Securities in such offering, then the number of securities to be offered by the Corporation for its own account in such offering shall be reduced as necessary to avoid such adverse effect.

 

	
  

	
(b)

	
The Corporation shall be entitled to postpone the filing of a Prospectus Supplement otherwise required to be prepared and filed by it pursuant hereto (or withdraw any Prospectus Supplement that has been filed by it pursuant hereto) if, at the time it receives the Demand Offering request or before the Demand Offering has been effected, the Board of Directors, in its good faith judgment, determines that the Demand Offering should not be effected or continued because (i) it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other transaction involving the Corporation, (ii) it would require the Corporation to disclose any material nonpublic information which would reasonably be likely to be detrimental to the Corporation and gives prompt notice of such determination to the Holder, (iii) any offering documents require amendment or supplement to comply with the Securities Laws, provided that such postponement shall be limited to the period of time reasonably required for the Corporation to make such amendment or supplement or (iv) the Corporation has contractually agreed to a blackout in connection with a primary distribution, provided that such blackout shall be limited to a period not exceeding 120 days from the time of a request from Pershing Square.

 

	
  

	
(c)

	
The Corporation shall not be required to effect a Demand Offering in connection with an underwritten offering of Registrable Securities unless the Demand Registrable Securities have an aggregate market price of at least $150 million.  Market price for the purposes of the foregoing shall be calculated on the basis of the average of the volume weighted average trading prices of the Common Shares over the New York Stock Exchange on each of the 15 trading days immediately preceding the delivery to the Corporation of the request for the Demand Offering.

 

	
  

	
(d)

	
If during the Registration Period the Corporation  proposes to file a Prospectus Supplement in Canada and/or the United States in order to permit the issuance of its Common Shares pursuant to an underwritten offering for its own account, in a form and manner that, with appropriate changes, would permit the offering of Registrable Securities under such Prospectus Supplement, the Corporation shall give reasonably prompt notice of its intention to do so to the Holders and shall use reasonable efforts to include in the proposed distribution such number of Registrable

 

  

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Securities (the “Piggy Back Registrable Securities”, and together with the Demand Registrable Securities, the “Designated Registrable Securities”) as the Holders shall request (such offering hereinafter referred to as a “Piggy Back Registration”, and together with a Demand Offering, a “Secondary Registration”) within ten days after the giving of such notice, upon the same terms (including the method of distribution) as such distribution; provided that (i) the Corporation shall not be required to include all such Piggy Back Registrable Securities in any such distribution by the Corporation if the Corporation is advised in good faith by its managing underwriter or underwriters that the inclusion of any such Piggy Back Registrable Securities may, in their opinion, have an adverse effect on the distribution or sales price of the securities being offered by the Corporation, in which case the number of Piggy Back Registrable Securities shall be reduced as necessary, and (ii) the Corporation may at any time, at its sole discretion and without the consent of the Holders, withdraw such Prospectus Supplement and abandon the proposed distribution in which the Holders requested to participate; provided, that the Corporation will pay the Registration Expenses in connection with such withdrawn Prospectus Supplement.  The failure of the Holders to respond within the periods referred to in the immediately preceding sentence shall be deemed to be a waiver of the Holders’ rights under this Section 2.1(d) with respect to such Piggy Back Registration.  The Holders may also waive their rights under this Section 2.1(d) by giving written notice to the Corporation.  No offering of Registrable Securities under this subsection 2.1(d) shall relieve the Corporation of its obligations to effect Demand Offerings pursuant to subsection 2.1(a) hereof.

 

	
2.2

	
Selection of Underwriters for Underwritten Demand Offerings

 

Upon requesting a Demand Registration for an underwritten offering of Registrable Securities, the Holders shall, with the approval of the Corporation (not to be unreasonably withheld), select the investment banker(s) and manager(s) to effect the distribution in connection with such underwritten Demand Offering, it being acknowledged by the Holders that the participation of a registrant shall be required in Canada and a registered broker-dealer in the United States in connection with each underwritten Secondary Registration hereunder and it being further acknowledged that the investment banker(s) and/or manager(s) selected by the Holder must be of nationally recognized standing in the United States and/or Canada (as applicable). Notwithstanding the foregoing, the Holders acknowledge that the Corporation shall have the sole right to select the investment banker(s) and manager(s) to effect the distribution in connection with any Piggy Back Registration and shall have no obligation to consult with the Holders with respect to such selection.

 

	
2.3

	
Registration Expenses

 

Except as expressly provided below and in section 2.1(d), the Holders will pay all Registration Expenses; provided, that (i) the Corporation shall be solely responsible for 

 

  

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the expenses related to the Base Prospectus and any other Registration Expenses that it would have incurred even in the absence of a request for a Secondary Registration under this Agreement (ii) the Corporation shall be solely responsible for the expenses payable in connection with registration of securities of the Corporation issuable in primary offerings by the Corporation (iii) Registration Expenses payable in connection with any Piggy Back Registration or any Demand Offering in which the Corporation offers unissued securities pursuant to Section 2.1(a) shall be allocated pro rata between the Holders and the Corporation, provided that, any Registration Expenses in respect of fees, disbursements and expenses payable to counsel of the Holders shall at all times be the sole responsibility of the Holders.

 

ARTICLE 3

REGISTRATION PROCEDURES

 

	
3.1

	
Procedures

 

Upon receipt of a request from the Holders pursuant to section 2.1, the Corporation will, subject to section 2.1, effect the Secondary Registration as requested.  In particular, the Corporation will, in each case as applicable:

 

	
  

	
(a)

	
as expeditiously as reasonably possible, prepare and file in the English language and, if required, French language, a Prospectus Supplement under and in compliance with the Securities Laws of each Canadian jurisdiction in which the Secondary Registration is to be effected and such other related documents as may be reasonably necessary to be filed in connection with such Prospectus Supplement and take all other steps and proceedings that may be reasonably necessary in order to permit an underwritten public offering of the Designated Registrable Securities by the Holders in the applicable Canadian jurisdictions;

 

	
  

	
(b)

	
as expeditiously as reasonably possible, prepare and file with the SEC a Prospectus Supplement, covering the distribution of the Designated Registrable Securities (subject to the terms of Section 2.1) and such other related documents as may be reasonably necessary to be filed in connection with such Prospectus Supplement and take all other steps and proceedings that may be reasonably necessary in order to permit an underwritten public offering of the Designated Registrable Securities by the Holders in the United States;

 

	
  

	
(c)

	
use commercially reasonable efforts to prepare and file with the applicable Commissions in the Canadian jurisdictions in which the Secondary Registration is to be effected and with the SEC such amendments and supplements to the Prospectus Supplement, as may be reasonably necessary to comply with the provisions of the applicable Securities Laws with respect to the Registration of Designated Registrable Securities, and take such steps as are reasonably necessary to maintain the effectiveness

 

  

8

  

	
  

	
 

	
of the Prospectus and the Registration Statement during the Registration Period;

 

	
  

	
(d)

	
use commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by the Holders of the Designated Registrable Securities covered by the Prospectus Supplement under such other securities or “blue sky” laws of such jurisdictions of the United States as designated by the Holders, acting reasonably, in the request for Demand Registration, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be reasonably necessary to maintain the effectiveness until the time at which the distribution of the Designated Registrable Securities is completed (the “Distribution Period”), (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Distribution Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Designated Registrable Securities for sale in such jurisdictions; provided, however, that the Corporation shall not be required in connection therewith or as a condition thereto to (A) qualify to do business as a foreign corporation or dealer in any jurisdiction where it would not otherwise be required to qualify but for this subsection 3.1(d), (B) subject itself to any taxation in any such jurisdiction, or (C) consent to general service of process in such jurisdiction.  The Corporation shall promptly notify the Holders of the receipt by the Corporation of any notification with respect to the suspension of the registration or qualification of any of the Designated Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction of the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose;

 

	
  

	
(e)

	
furnish to the Holders and any underwriter or underwriters of any such distribution, upon their request, such number of copies of the Prospectus, the Registration Statement and any amendment and supplement thereto (including any documents incorporated therein by reference) and such other relevant documents as the Holders may reasonably request in order to facilitate the distribution of the Designated Registrable Securities;

 

	
  

	
(f)

	
furnish to the Holders and any underwriter or underwriters of any such distribution and such other persons as the Holders may reasonably specify:

 

	
  

	
(i)

	
an opinion of counsel to the Corporation (including a statement that in the opinion of such counsel the Prospectus and the Registration Statement do not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading) addressed to the Holders and the underwriter or underwriters of such distribution and dated the closing date of the distribution, in

 

  

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form and substance as is customarily given by company counsel to the underwriters in an underwritten public offering;

 

	
  

	
(ii)

	
a non-statutory “cold comfort” letter addressed to the Holders (subject to the auditors’ receipt of required representation letters from the Holders) and the underwriter or underwriters dated the date of the prospectus and the closing date of the distribution signed by the auditors of the Corporation, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing underwriter reasonably requests;

 

	
  

	
(iii)

	
if a Prospectus Supplement is filed in Quebec, opinions of Quebec counsel to the Corporation and the auditors of the Corporation addressed to the Holders and the underwriter or underwriters of such distribution relating to the translation of the Prospectus and compliance with French language laws, such opinions being dated the dates of the preliminary prospectus supplement, the final prospectus supplement and closing; and

 

	
  

	
(iv)

	
such corporate certificates as are customarily furnished in securities offerings, and, in each case, covering substantially the same matters as are customarily covered in such documents in the relevant jurisdictions and such other matters as the Holders may reasonably request;

 

	
  

	
(g)

	
as expeditiously as possible following actual knowledge by the Corporation thereof, notify the Holders of the happening of any event during the Distribution Period as a result of which the Prospectus or the Registration Statement, as then in effect, would include a misrepresentation;

 

	
  

	
(h)

	
otherwise use its commercially reasonable efforts to comply with all applicable published policies, rules and regulations of the applicable Commissions and any stock exchange and over-the-counter market on which the Common Shares are then listed or quoted;

 

	
  

	
(i)

	
provide a transfer agent and registrar for such Common Shares no later than the closing date of the offering;

 

	
  

	
(j)

	
enter into an underwriting agreement with the underwriter or underwriters for such distribution, such agreement to contain such representations and warranties by the Corporation and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions and indemnification agreements substantially consistent with section 4.2 and such other documents on such terms and conditions as are customary in secondary offerings and take all such other actions as permitted by law as the Holders or the underwriter or

 

  

10

  

 

	
  

	
 

	
underwriters, if any, reasonably request in order to expedite or facilitate the distribution of the Designated Registrable Securities;

 

	
  

	
(k)

	
in the event of the issuance of any order or ruling suspending the effectiveness of a prospectus receipt or the Registration Statement or any order suspending or preventing the use of the Prospectus or the Registration Statement or suspending the Registration of any of the Designated Registrable Securities by such prospectus or registration statement or cease trading the distribution in any applicable province or territory of Canada or in the United States, the Corporation will, as expeditiously as possible after actual knowledge by the Corporation thereof, notify the Holders of such event and use its commercially reasonable efforts promptly to obtain the withdrawal of such order or ruling; and

 

	
  

	
(l)

	
during the Registration Period, the Corporation will promptly prepare and file French translations of all documents incorporated by reference into the Prospectus.

 

	
3.2

	
Obligations of the Holders

 

In connection with any Secondary Registration, the Holders shall:

 

	
  

	
(a)

	
provide, in writing, such information with respect to the Holders including the number of securities of the Corporation held by the Holders as may be required by the Corporation to comply with the applicable Securities Laws in each jurisdiction in which the Secondary Registration is to be effected;

 

	
  

	
(b)

	
if required under applicable Securities Laws, execute any certificate forming part of a preliminary prospectus, final prospectus, registration statement or similar document to be filed with the applicable Commissions or the SEC;

 

	
  

	
(c)

	
as expeditiously as possible following actual knowledge by the Holder thereof, notify the Corporation of the happening of any event during the Distribution Period, as a result of which the Prospectus or the Registration Statement, as in effect, would include a misrepresentation;

 

	
  

	
(d)

	
comply with all applicable published policies, rules and regulations of the applicable Commissions and the SEC and any stock exchange and over-the-counter market on which the Common Shares are then listed or quoted and to otherwise comply with applicable Securities Laws; and

 

	
  

	
(e)

	
not effect or permit to be effected sales of Designated Registrable Securities pursuant to the Prospectus or deliver or permit to be delivered the Prospectus or the Registration Statement in respect of such sale after notification by the Corporation of any order or ruling suspending the effectiveness of the Prospectus or the Registration Statement or after

 

  

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notification by the Corporation under subsection 3.1(g), until the Corporation advises the Holders that such suspension has been lifted or that it has filed an amendment to the Prospectus or the Registration Statement and has provided copies of such amendment to the Holders.  The Holders shall, if so directed by the Corporation, deliver to the Corporation (at the Corporation’s expense) all copies, other than permanent file copies, then in the Holders’ possession of the Prospectus covering the Designated Registrable Securities that was in effect at the time of receipt of such notice.

 

ARTICLE 4

DUE DILIGENCE; INDEMNIFICATION

 

	
4.1

	
Preparation; Reasonable Investigation

 

In connection with the preparation and filing of a Prospectus Supplement as herein contemplated, the Corporation will give the Holders and the underwriter or underwriters of such distribution and their respective counsel, auditors and other representatives, the opportunity to participate in the preparation of such documents and each amendment thereof or supplement thereto, and shall insert therein such material relating to the Holders furnished to the Corporation in writing, which in the reasonable judgment of the Holders and its counsel should be included, and will, subject to the prior execution and delivery to the Corporation of reasonable confidentiality agreements, give each of them such reasonable and customary access to the Corporation’s books and records and such reasonable and customary opportunity to discuss the business of the Corporation with its officers and auditors as shall be necessary in the reasonable opinion of the Holders and the underwriter or underwriters and their respective counsel, and to conduct all reasonable and customary due diligence which the Holders and the underwriter or underwriters and their respective counsel may reasonably require in order to conduct a reasonable investigation for purposes of establishing, to the extent permitted by law, a due diligence defense as contemplated by the Securities Laws and in order to enable such underwriters to execute any certificate required to be executed by them in Canada or the United States for inclusion in each such document.

 

	
4.2

	
Indemnification

 

	
  

	
(a)

	
By Corporation

 

The Corporation agrees to indemnify, to the extent permitted by law, the Holders and each Person who participates as an underwriter in the offering or sale of the Designated Registrable Securities, their respective directors, officers, employees and agents and each Person who controls any Holder or any such underwriter (within the meaning of any applicable Securities Laws) against all losses, claims, damages, liabilities and expenses arising out of or based upon: (i) any information  or  statement  contained  in  the Prospectus or the Registration Statement, any filing made in connection with the Registration under the securities or other “blue sky” rules or any 

 

  

12

  

 

amendment thereto which at the time and in light of the circumstances under which it was made contains or is alleged to contain a misrepresentation; (ii) any order made or inquiry, investigation or proceedings commenced or threatened by any applicable Commission, court or other competent authority based upon any misrepresentation or alleged misrepresentation in the Prospectus, the Registration Statement or any amendment thereto or based upon any failure or alleged failure to comply with applicable Securities Laws (other than any failure to comply with applicable Securities Laws by the Holder or the underwriter or underwriters which is not as a result of a failure or alleged failure of the Corporation to comply with applicable Securities Laws); and (iii) non-compliance by the Corporation with any of the Securities Laws in connection with a Secondary Registration and the distribution effected thereunder, except in the case of any of the foregoing insofar as (A) any information or statement referred to in clause (i) or (ii) of this subsection 4.2(a) has been furnished to the Corporation by the Holders or the underwriter or underwriters expressly for use therein pursuant to subsection 3.2(a) or Section 4.1; (B) caused by the Holders’ or any underwriter’s failure to deliver to a purchaser of Designated Registrable Securities, a copy of the Prospectus or the Registration Statement or any amendments or supplements thereto or to otherwise comply with applicable Securities Laws in a manner which is not a result of a failure or alleged failure of the Corporation to comply with applicable Securities Laws or (C) any amounts paid in settlement of any claim have been paid if such settlement is effected without the prior written consent of the Corporation, which consent shall not be unreasonably withheld or delayed.

 

	
  

	
(b)

	
By Holders

 

The Holders agree to indemnify, to the extent permitted by law, the Corporation and each Person who participates as an underwriter in the offering or sale of the Designated Registrable Securities, their respective directors, officers, employees and agents and each Person who controls such underwriter (within the meaning of any applicable Securities Laws) against all losses, claims, damages, liabilities and expenses arising out of or based upon: (i) any information  or  statement  contained  in  the  Prospectus or the Registration Statement, any filing made in connection with the Registration under the securities or other “blue sky” rules or any amendment thereto which has been furnished to the Corporation by the Holders in writing expressly for use therein pursuant to subsection 3.2(a) or Section 4.1 which at the time and in light of the circumstances under which it was made contains a misrepresentation or alleged misrepresentation; (ii) any order made or inquiry, investigation or proceedings commenced or threatened by any applicable Commission, court or other competent authority based upon (A) any misrepresentation or alleged misrepresentation in the Prospectus or Registration Statement or any amendment thereto based upon any information or statement which 

 

  

13

  

 

has been furnished to the Corporation by the Holders in writing expressly for use therein pursuant to subsection 3.2(a) or Section 4.1, or (B) any failure or alleged failure to comply with applicable Securities Laws by the Holders which is not as a result of a failure or alleged failure of the Corporation to comply with applicable Securities Laws; and (iii) the Holders’ failure to deliver to a purchaser of Designated Registrable Securities, a copy of the Prospectus or the Registration Statement or any amendments or supplements thereto or to otherwise comply with applicable Securities Laws in a manner which is not a result of a failure or alleged failure of the Corporation to comply with applicable Securities Laws, except in the case of any of the foregoing insofar as (A) caused by the Corporation or any underwriter’s failure to deliver to a purchaser of Designated Registrable Securities a copy of the Prospectus or the Registration Statement or any amendments or supplements thereto or to otherwise comply with applicable Securities Laws; (B) any amounts paid in settlement of any claim have been paid if such settlement is effected without the prior written consent of the Holders, which consent shall not be unreasonably withheld or delayed.

 

	
  

	
(c)

	
Procedure

 

Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel satisfactory to the indemnified party, acting reasonably.  If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.  No indemnifying party may settle any claims without the express written consent of an indemnified party (such consent not to be unreasonably withheld where such consent does not contain any admission of liability).

 

	
  

	
(d)

	
Survival; Contribution

 

The indemnification provided for under this Agreement will survive the expiry of this Agreement and will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified 

 

  

14

  

 

party and will survive any transfer of securities pursuant thereto.  In the event the indemnification is unavailable in whole or in part for any reason under this section 4.2, the Corporation and the Holders shall contribute to the aggregate of all losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the Corporation and the Holders in connection with the event giving rise to liability.

 

	
  

	
(e)

	
Holder is Trustee

 

The Corporation hereby acknowledges and agrees that, with respect to this Section 4.2, each Holder is contracting on its own behalf and as agent for the other indemnified persons referred to in Section 4.2(a).  In this regard, each Holder will act as trustee for such indemnified persons of the covenants of the Corporation under this Section 4.2 with respect to such indemnified persons and accepts these trusts and will hold and enforce those covenants on behalf of such indemnified persons.

 

	
  

	
(f)

	
Corporation is Trustee

 

The Holders hereby acknowledge and agree that, with respect to this Section 4.2, the Corporation is contracting on its own behalf and as agent for the other indemnified persons referred to in Section 4.2(b).  In this regard, the Corporation will act as trustee for such indemnified persons of the covenants of the Holders under this Section 4.2 with respect to such indemnified persons and accepts these trusts and will hold and enforce those covenants on behalf of such indemnified persons.

 

 

ARTICLE 5

LOCK-UP AGREEMENT

 

	
5.1

	
Secondary Registration Lock-Up

 

  With respect to any Secondary Registration and offering of Designated Registrable Securities that takes the form of an underwritten public offering, the Corporation shall not (except as part of such offering) effect any transfer of Common Shares, or any securities convertible into or exchangeable or exercisable for such Common Shares (except pursuant to a Registration Statement on Form S-8), during the period beginning on the date the Holders deliver their request pursuant to Section 2.1 and ending on the date that is 90 days after date of the final prospectus supplement relating to such offering, except as part of such Secondary Registration.  Upon request by the underwriters or dealers (as the case may be), the Corporation shall, from time to time, enter into customary lock-up agreements (“Lock-up Agreements”) on terms consistent with the preceding sentence.

 

	
5.2

	
Additional Lock-up Agreements

 

  

15

  

 

With respect to each relevant offering, the Corporation shall use its reasonable best efforts to cause all of its officers, directors and holders of more than 5% of the Common Shares (or any securities convertible into or exchangeable or exercisable for such Common Shares) (but excluding any Holder) to execute lock-up agreements that contain restrictions that are no less restrictive than the restrictions contained in the Lock-up Agreements executed by the Corporation.

 

	
5.3

	
Holders Lock-up Agreements

 

In respect of any offering of securities by the Corporation, upon request by the underwriters or dealers (as the case may be) in connection with such offering, the Holders agree to execute customary lock-up agreements, in each case for a period ending no later than 90 days, or such other term as the underwriters may reasonably request consistent with lock-up agreements entered into by the officers and directors of the Corporation, after date of the final prospectus supplement relating to such offering, on terms required by the underwriters and consistent with those entered into by the officers and directors of the Corporation.

 

 

ARTICLE 6

GENERAL

 

	
6.1

	
Blackout Periods.

 

In connection with any sales of Common Shares held by the Holders, until the Holders are no longer Affiliates of the Corporation, the Holders agree to comply with the Corporation’s blackout period policies applicable to officers and directors of the Corporation.

 

	
6.2

	
No Inconsistent Agreements

 

The Corporation represents and warrants to the Holders that it has not entered into, and covenants with the Holders that it will not enter into, any agreement granting registration rights in respect of any equity securities of the Corporation which is inconsistent with or violates the rights granted to the Holders pursuant to this Agreement.

 

	
6.3

	
Remedies

 

Any Person having rights under any provision of this Agreement will be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.  The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

 

  

16

  

 

	
6.4

	
Amendments

 

This Agreement shall not be amended or varied in its terms by oral agreement or by representations or otherwise without the prior written consent of each of the Corporation and the Holders.

 

	
6.5

	
Assignment

 

This Agreement and the rights and obligations of the parties hereto shall bind and enure to the benefit of each of the parties hereto, the other parties indemnified under Section 4.2 and their respective successors.  Neither party shall have the right to transfer or assign any of its rights or obligations under this Agreement.

 

	
6.6

	
Term

 

This Agreement shall expire upon the earlier of:

 

	
  

	
(a)

	
the end of the Registration Period; and

 

	
  

	
(b)

	
the date that is three months after the later of (i) Pershing Square and its direct or indirect subsidiaries collectively cease to be the beneficial holders of more than 10% of the outstanding Common Shares, and (ii) the Corporation delivering an opinion of counsel reasonably acceptable to the Holders that Pershing Square and its direct or indirect subsidiaries cannot reasonably be considered for Securities Law purposes to be either Affiliates of the Corporation or “control persons” (as defined in the Securities Act (Ontario)) of the Corporation,

 

provided that in all cases the obligations of the parties under section 4.2 hereof shall survive the expiry of this Agreement.

 

	
6.7

	
Severability

 

If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms.

 

	
6.8

	
Delays or Omissions

 

No delay or omission to exercise any rights, power or remedy accruing to any party to this Agreement, upon the breach or default of the other party shall impair any such rights, power or remedy of such non-breaching party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of the party of any 

 

  

17

  

 

provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to the parties, shall be cumulative and not alternative.

 

	
6.9

	
Descriptive Headings

 

The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

 

	
6.10

	
Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

 

	
  

	
(a)

	
This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.  Each of the parties hereby irrevocably attorns and submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts.

 

	
  

	
(b)

	
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

	
6.11

	
Notices

 

All notices, requests, demands or other communications required or permitted to be given by one party to another under this Agreement shall be given in writing and delivered by personal delivery or delivery by recognized commercial courier, sent by facsimile, email or delivered by registered mail, postage prepared, addressed as follows:

 

(a)          For the Holders to:

 

Pershing Square Capital Management, L.P.

888 Seventh Avenue

 

  

18

  

 

42nd Floor

New York, NY  10019

 

Attention:         Roy J. Katzovicz

Email:        rjk@persq.com

Fax No:             212.286.1133

 

With a copy (which shall not constitute notice) to:

 

Davies, Ward, Phillips & Vineberg LLP

155 Wellington Street West

Toronto, Ontario  M5V 3J7

 

Attention:         Patricia L. Olasker

Email:        polasker@dwpv.com

Fax No:             416.863.0871

 

And with a copy (which shall not constitute notice) to:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

 

Attention:         Alan Sinsheimer

Email:               SinsheimerA@sullcrom.com

Fax No:             212-291-9144

 

 

(b)          For the Corporation:

 

Canadian Pacific Railway Limited

401 – 9th Avenue S.W., Suite 500

Calgary, Alberta  T2P 4Z4

 

Attention:         Karen Fleming

Email:               karen_fleming@cpr.ca

Fax No.:            (403) 319-6770

 

With a copy (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

 

  

19

  

 

Attention:         Andrew J. Foley

Email:               afoley@paulweiss.com

Fax No.:            (212) 492-0078

 

And with a copy (which shall not constitute notice) to:

 

Norton Rose Fulbright Canada LLP

400 – 3rd Avenue S.W., Suite 3700

Calgary, Alberta  T2P 4H2

 

Attention:         Don Tse

Email:               Don.Tse@nortonrosefulbright.com

Fax No.:            (403) 264-5973

 

or at such other address, email or fax number of which the addressee may from time to time may notify the addressor.  Any notice delivered by personal delivery or by courier to the Party to whom it is addressed as provided above shall be deemed to have been given and received on the day it is so delivered at such address.  If such day is not a Business Day, or if the notice is received after 4:00 p.m. (addressee’s local time), then the notice shall be deemed to have been given and received on the next Business Day.  Any notice sent by prepaid registered mail shall be deemed to have been given and received on the sixth Business Day following the date of its mailing.  In the event of any disruption, strike or interruption in the Canadian or United States’ postal service after mailing and prior to receipt and deemed receipt of any such notice, notice will be deemed to be received on the sixth Business Day following full resumption of the postal service.  Any notice transmitted by facsimile or email shall be deemed to have been given and received on the day in which transmission is confirmed.  If such day is not a Business Day or if the facsimile or email transmission is received after 4:00 p.m. (addressee’s local time), then the notice shall be deemed to have been given and received on the first Business Day after its transmission.

 

 

 

 

 

  

20

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

By the Corporation

 

CANADIAN PACIFIC RAILWAY LIMITED

 

 

	
By:

	 /s/ Paul Haggis
	  	
Name:  Paul Haggis 

	  	
Title:    Chairman of the Board of Directors

	
 

	
  

	

By:

	/s/ Tony Melman
	  	

Name:  Tony Melman

	  	

Title:    Chairman of the Finance Committee

 

 

 

 

[Signature page for Registration Rights Agreement]

  

  

  

 

By the Holders:

On behalf of:

PERSHING SQUARE, L.P.,

PERSHING SQUARE II, L.P.,

PERSHING SQUARE INTERNATIONAL, LTD.,

PERSHING SQUARE HOLDINGS, LTD.

	
By:

	
PERSHING SQUARE CAPITAL MANAGEMENT, L.P.

	  	
By:

	
PS MANAGEMENT GP, LLC, its General Partner

	  	  	  	  	  
	  	  	  	  	  
	  	  	
By:

	 /s/ William A. Ackman	  
	  	  	  	
Name:  William A. Ackman 

	  
	  	  	  	
Title:     Managing Member

	  
	  	  	  	  	  

 

 

 

 

 

  

[Signature page for Registration Rights Agreement]eh1300953_ex0402.htm

EXHIBIT 4.2

 

 

 

 

 

 

 

	 	 	 
	 	 	
CSR plc

The CSR plc 2013

Long-Term

Incentive Plan

Rules

 

 

 

Approved by

Shareholders on 22

May 2013

 

Applying to Awards

made on or after 1

January 2014

 

 

 

 

 

  

  

  

Table of Contents

 

	
1

	
Making of Awards

	
1

	
1.1

	
Awards made by the Board

	
1

	
1.2

	
Terms of Awards

	
1

	
1.3

	
Procedure for making of Awards and Award Date

	
1

	
1.4

	
Contents of Award Certificate

	
1

	
1.5

	
When Awards can be made

	
1

	
1.6

	
When Awards may not be made

	
2

	
1.7

	
Who can be made Awards

	
2

	
1.8

	
Right to refuse Awards

	
2

	
1.9

	
Awards non-transferable

	
2

	
2

	
Plan Limits

	
2

	
2.1

	
General

	
2

	
2.2

	
Ten per cent in ten years

	
2

	
2.3

	
Calculation

	
2

	
2.4

	
Scaling down

	
3

	
3

	
Individual Limits

	
3

	
3.1

	
General

	
3

	
3.2

	
Limit

	
3

	
3.3

	
Scaling down

	
3

	
4

	
Award Price

	
3

	
5

	
Performance Target

	
4

	
5.1

	
Setting of Performance Target

	
4

	
5.2

	
Nature of Performance Target

	
4

	
5.3

	
Substitution, variation or waiver of Performance Target

	
4

	
5.4

	
Notification of Award Holders

	
4

	
6

	
Vesting and Exercise of Awards

	
4

	
6.1

	
Earliest date for Vesting of Awards

	
4

	
6.2

	
Effect of Award Vesting

	
5

	
6.3

	
No Vesting or Exercise while Dealing Restrictions apply

	
5

	
6.4

	
Effect of Cessation of Relevant Employment

	
5

	
6.5

	
Options may be exercised in whole or in part

	
5

	
6.6

	
Procedure for exercise of Options

	
5

	
6.7

	
Issue or transfer of Plan Shares

	
5

 

 

 

i

 

 

	
6.8

	
Settlement of Phantom Shares or Phantom Market Value Option or Phantom Nominal Cost Option

	
6

	
6.9

	
Net or Cash Settling

	
6

	
6.10

	
Dividend Equivalents

	
6

	
6.11

	
US Taxpayers

	
6

	
7

	
Vesting and Exercise of Awards in Special Circumstances

	
7

	
7.1

	
Death

	
7

	
7.2

	
Injury, disability, redundancy, retirement etc

	
7

	
7.3

	
Award Holder relocated abroad

	
8

	
7.4

	
Meaning of ceasing to be in Relevant Employment

	
8

	
7.5

	
Interaction of Rules

	
8

	
8

	
Takeover, Reconstruction, Amalgamation or Winding-up of Company

	
8

	
8.1

	
Takeover

	
8

	
8.2

	
Compulsory acquisition of Company

	
9

	
8.3

	
Reconstruction or amalgamation of Company

	
9

	
8.4

	
Winding-up of Company

	
9

	
8.5

	
Demergers and Other Events

	
9

	
8.6

	
Meaning of “obtains Control of the Company”

	
10

	
8.7

	
Notification of Award Holders

	
10

	
8.8

	
Vesting of Awards and corporation tax deduction

	
10

	
9

	
Exchange of Awards

	
10

	
9.1

	
Where Exchange applies

	
10

	
9.2

	
Terms of Exchange

	
10

	
10

	
Lapse of Awards

	
10

	
11

	
Adjustment of Awards on Reorganisation

	
11

	
11.1

	
Power to adjust Awards

	
11

	
11.2

	
Notification of Award Holders

	
11

	
12

	
Accounting for Tax and Social Security Contributions

	
11

	
12.1

	
Deductions

	
11

	
12.2

	
Transfer of Employer’s NIC

	
11

	
12.3

	
Execution of Document by Award Holder

	
11

	
13

	
Issue and Listing of Plan Shares

	
11

	
13.1

	
Rights attaching to Plan Shares

	
11

	
13.2

	
Listing of Plan Shares

	
11

	
14

	
Relationship of Plan to Contract of Employment

	
12

 

 

ii

 

 

	
14.1

	
Contractual Provisions

	
12

	
14.2

	
Deemed Agreement

	
12

	
15

	
Administration of Plan

	
12

	
15.1

	
Responsibility for administration

	
12

	
15.2

	
Conflict of Interest

	
12

	
15.3

	
Board’s decision final and binding

	
12

	
15.4

	
Discretionary nature of Awards

	
12

	
15.5

	
Provision of information

	
12

	
15.6

	
Cost of Plan

	
13

	
15.7

	
Data protection

	
13

	
15.8

	
Third party rights

	
13

	
16

	
Amendment of Plan

	
13

	
16.1

	
Power to amend Plan

	
13

	
16.2

	
Amendments to Plan

	
13

	
16.3

	
Rights of existing Award Holders

	
13

	
17

	
Notices

	  14
	
17.1

	
Notice by Board or Company

	
14

	
17.2

	
Notice to Board or Company

	
14

	
18

	
Governing Law and Jurisdiction

	
14

	
18.1

	
Plan governed by English Law

	
14

	
18.2

	
English courts to have jurisdiction

	
14

	
18.3

	
Jurisdiction agreement for benefit of Company

	
14

	
18.4

	
Award Holder deemed to submit to such jurisdiction

	
14

	
19

	
Interpretation

	
14

	
19.1

	
Definitions

	
14

	
19.2

	
Interpretation

	
17

	
Schedule A: UK Approved Addendum

	
18

	
    A1.

	
ligibility to be granted CSOP Options

	
18

	
    A2.

	
Contents of Award Certificate

	
18

	
    A3.

	
Earliest date of grant of CSOP Options

	
18

	
    A4.

	
Shares subject to a CSOP Option

	
18

	
    A5.

	
Award Price

	
18

	
    A6.

	
HMRC limit

	
18

	
    A7.

	
Plan Shares subject to a Restriction

	
19

	
    A8.

	
Variations in share capital, demergers and special distributions

	
19

  

iii

  

	
    A9.

	
Restrictions on exercise of a CSOP Option

	
19

	
    A10.

	
Discretion on exercise and lapse of CSOP Options

	
19

	
    A11.

	
Exchange of CSOP Options

	
19

	
    A12.

	
Changing the terms of CSOP Options

	
20

	
    A13.

	
Substitution, variation or waiver of Performance Target

	
20

	
    A14.

	
Accounting for PAYE and National Insurance Contributions

	
20

	
    A15.

	
Disapplication of certain Plan rules and provisions

	
20

 

 

 

  

iv

  

 

	
1

	
Making of Awards

 

	
1.1

	
Awards made by the Board

 

Subject to Rules 1.5, 1.6, and 1.7 the Board may from time to time make Awards to Eligible Employees.

 

	
1.2

	
Terms of Awards

 

Subject to the Rules, the Board will in its absolute discretion decide whether or not any Awards are made at any particular time and, if they are, who they are made to and the terms of such Awards.

 

	
1.3

	
Procedure for making of Awards and Award Date

 

An Award shall be made by the Board passing a resolution. The Award Date shall be the date on which the

 

Board passes the resolution or such later date as specified in the resolution and allowed by Rule 1.5. The making of an Award shall be evidenced by a deed executed by or on behalf of the Board. An Award Certificate shall be issued to each Award Holder as soon as practicable following the making of the Award.

 

	
1.4

	
Contents of Award Certificate

 

An Award Certificate shall state:

 

	
  

	
a.

	
whether the Award comprises:

 

	
  

	
i.

	
a Contingent Share Award

	
  

	
ii.

	
a Phantom Share

	
  

	
iii.

	
a Nominal Cost Option

	
  

	
iv.

	
a Phantom Nominal Cost Option

	
  

	
v.

	
a Market Value Option or

	 	
vi.

	
a Phantom Market Value Option

 

	
  

	
b.

	
details of any Performance Target attached to the Award;

	
  

	
c.

	
the Award Date;

	
  

	
d.

	
the number of Plan Shares subject to the Award;

	
  

	
e.

	
the Award Price (if any);

	
  

	
f.

	
the date or dates on which the Award will Vest;

	
  

	
g.

	
whether any dividend equivalents will be payable under Rule 6.10. For the avoidance of doubt, if the Award Certificate does not specifically state that dividend equivalents will be payable then they shall not be payable; and

	
  

	
h.

	
any further conditions attached to the Award.

 

	
1.5

	
When Awards can be made

 

Subject to Rule 1.6, the Board may make Awards only during the forty-two days beginning on:

 

	
·

	
the date of shareholder approval of the Plan;

	
·

	
the day after the announcement of the Company’s results, including a preliminary announcement, for

	
·

	
any period through a Regulatory Information Service;

	
·

	
any day on which the Board determines that circumstances are sufficiently exceptional to justify the making of the Award at that time;

	
·

	
the day on which the person to whom the Award is made first becomes an Eligible Employee; or

	
·

	
the day after the lifting of any Dealing Restrictions which prevented the making of Awards during any of the times described above.

 

 

	 CSR      	 1

 

  

  

  

 

	
1.6

	
When Awards may not be made

 

Awards may not be made:

 

	
·

	
when prevented by any Dealing Restrictions; or

	
·

	
after the tenth anniversary of shareholder approval of the Plan.

 

	
1.7

	
Who can be made Awards

 

An Award may not be made to an individual who is not an Eligible Employee at the Award Date. Unless the Board decides otherwise, an Award will not be made to an Eligible Employee who on or before the Award Date has given or received notice of termination of employment (whether or not lawful).

 

The Board may not grant a Contingent Share Award or Nominal Cost Option to an Executive Director.

 

	
1.8

	
Right to refuse Awards

 

An Award Holder may, by notice in writing to the Company within thirty days after the Award Date, say he does not want the Award in whole or part. In such a case, the Award shall to that extent be treated as never having been made. No payment is required from the Award Holder or the Company.

 

	
1.9

	
Awards non-transferable

 

An Award shall be personal to the Award Holder and, except in the case of the death of an Award Holder, shall not be capable of being transferred, charged or otherwise alienated and shall lapse immediately if the Award Holder purports to transfer, charge or otherwise alienate the Award.

 

	
2

	
Plan Limits

 

	
2.1

	
General

 

The aggregate number of Plan Shares over which Awards may be made shall be limited as set out in this Rule 2.

 

	
2.2

	
Ten per cent in ten years

 

An Award may not be made if the result of making the Award would be that the aggregate number of Plan Shares issued or committed to be issued under Awards under the Plan or under options, or awards granted in the preceding ten year period under any other Employees’ Share Scheme (whether or not discretionary) operated by the Group would exceed ten per cent of the Company’s issued ordinary share capital at that time.

 

	
2.3

	
Calculation

 

For the purpose of the limit contained in this Rule 2:

 

	
·

	
treasury shares shall be included in the limit as if they were new issue shares;

	
·

	
there shall be disregarded any Plan Shares where the right to acquire the Plan Shares has lapsed or been renounced;

	
·

	
there shall be disregarded any Plan Shares which have been purchased by the Trustees, or which the Trustees have determined that they will purchase, in order to satisfy an Award or the exercise of an option or the vesting of other rights of an employee under any other Employees’ Share Scheme operated by the Group;

	
·

	
any Plan Shares issued in relation to an Award, or on the exercise of an option or the vesting of other rights of an employee under any other Employees’ Share Scheme operated by the Group shall be taken into account once only (when the Award is made or the option is granted or the right awarded) and shall not fall out of account when the Award Vests, the option is exercised or other rights vest;

	
·

	
there shall be disregarded any Plan Shares relating to Awards granted under a Legacy Plan.

 

 

	 CSR      	 2

 

  

  

  

 

For the purposes of Rule 2, Trustees means the trustees of any trust created by a Group Member which, when taken together with the Plan, constitutes an Employees’ Share Scheme.

 

	
2.4

	
Scaling down

 

If the making of an Award would cause the limit in this Rule 2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the limit to be exceeded. If more than one Award is made on the same Award Date, the number of Plan Shares which would otherwise be subject to each Award shall be reduced pro rata.

 

	
3

	
Individual Limits

 

	
3.1

	
General

 

The number of Plan Shares over which Awards may be made to any Eligible Employee shall be limited as set out in this Rule 3.

 

	
3.2

	
Limit

 

An Award may not be made to an Eligible Employee if the result of making the Award would be that, at the proposed Award Date, the Market Value of the Plan Shares subject to that Award, when aggregated with the Market Value of the Plan Shares subject to all awards made or options granted to him (whether under the Plan or any other discretionary Employees’ Share Scheme operated by the Group) in the same Financial Year would exceed the following percentage of his Annual Remuneration:

 

	
·

	
% if the Award is a Market Value Option or a Phantom Market Value Option; or

	
·

	
% for any other type of Award

 

Save that the figure of 300% shall be up to 400% of Annual Remuneration and the figure of 100% shall be up to 200% of Annual Remuneration where the grant of the Award in question is made in circumstances which the Board determines to be exceptional such as the recruitment or retention of the individual concerned. For the purpose of this Rule 3.2

 

Annual Remuneration means the higher of:

 

	
(a)

	
basic salary paid by the Group expressed as an annual rate as at the Award Date;

 

	
(b)

	
basic salary paid by the Group for the period of 12 months ending on the last day of the month immediately preceding the month in which the Award is made.

 

Financial Year means the financial year of the Company as defined in section 390 of the Companies Act 2006.

 

the Market Value of Plan Shares subject to an award or option shall be measured on the date on which the award was made or the option was granted.

 

	
3.3

	
Scaling down

 

If the making of an Award would cause any of the limits in Rule 3.2 to be exceeded, such Award shall take effect as an Award over the maximum number of Plan Shares which does not cause the relevant limit to be exceeded.

 

	
4

	
Award Price

 

The Award Price for a Market Value Option or a Phantom Market Value Option shall be determined by the Board and shall not be less than the Market Value of a Plan Share on the Award Date.

 

 

	 CSR      	 3

 

  

  

  

 

The Award Price for any other Award shall be determined by the Board and may be nil or any other price.

 

Where an Award will be satisfied by the issue of new shares and the Award Price is less than the nominal value of a Plan Share, the Company will ensure that, at the time of the issue of the Plan Shares, arrangements are in place to pay up the nominal value of the relevant Plan Shares.

 

	
5

	
Performance Target

 

	
5.1

	
Setting of Performance Target

 

	
A:

	
Executive Directors

 

If the Board makes an Award to an Executive Director, the Board shall attach a Performance Target and may attach any other condition in relation to the Vesting of that Award.

 

	
B:

	
Other Employees

 

If the Board makes an Award to any other Eligible Employee, the Board may at its discretion attach a Performance Target or any other condition in relation to that Award.

 

	
5.2

	
Nature of Performance Target

 

The Performance Target, if any, and any further condition imposed under Rule 5.1 shall be:

 

	
·

	
objective; and

	
·

	
set out in, or attached in the form of a schedule to, the Award Certificate.

 

	
5.3

	
Substitution, variation or waiver of Performance Target

 

If an event occurs which causes the Board to consider that the Performance Target, or any other condition imposed under Rule 5.1 subject to which an Award has been made, is no longer appropriate, the Board may substitute, vary or waive the Performance Target or the condition in such manner (and make such consequential amendments to the Rules) as:

 

	
·

	
is reasonable in the circumstances; and

	
·

	
except in the case of waiver produces a fairer measure of performance and is not materially less difficult to satisfy.

 

The Award shall then take effect subject to the Performance Target or the other condition as substituted, varied or waived.

 

	
5.4

	
Notification of Award Holders

 

The Board shall, as soon as reasonably practicable, notify each Award Holder concerned of any determination made by it under this Rule 5.

 

	
6

	
Vesting and Exercise of Awards

 

	
6.1

	
Earliest date for Vesting of Awards

 

Subject to Rules 7 and 8, an Award will Vest on the latest of:

 

	
·

	
in relation to an Executive Director, the third anniversary of the Award Date, unless the Board determines otherwise;

 

 

	 CSR      	 4

 

  

  

  

 

	
·

	
the relevant date specified in the Award Certificate under Rule 1.4; and

	
·

	
the date on which the Board determines that the Performance Target and any further condition imposed under Rule 5.1 have been satisfied.

 

	
6.2

	
Effect of Award Vesting

 

Subject to the Rules, the effect of an Award Vesting shall be:

 

	
·

	
in the case of an Option, that the Award Holder is entitled to exercise the Option up to the tenth anniversary of the Award Date to the extent that it has Vested;

	
·

	
in the case of a Contingent Share Award, that the Award Holder shall become entitled to the Plan Shares to the extent that the Award has Vested; and

	
·

	
in the case of a Phantom Share, that the Award Holder is entitled to a cash payment equal to the Market Value of the Plan Shares in relation to which the Award has Vested.

 

	
6.3

	
No Vesting or Exercise while Dealing Restrictions apply

 

No Award shall Vest, and Plan Shares may not be issued or transferred to an Award Holder (nor, in the case of an Option, may the Option be exercised), while Dealing Restrictions apply. If an Award would otherwise have Vested while Dealing Restrictions apply, the Award will Vest as soon as they cease to apply.

 

	
6.4

	
Effect of Cessation of Relevant Employment

 

Subject to Rule 7, an Award shall Vest and an Option may be exercised only while the Award Holder is in Relevant Employment and if an Award Holder ceases to be in Relevant Employment, any Award granted to him shall lapse on cessation of Relevant Employment. This Rule 6.4 shall apply where the Award Holder ceases to be in Relevant Employment in any circumstances (including, in particular, but not by way of limitation, where the Award Holder is dismissed unfairly, wrongfully, in breach of contract or otherwise).

 

An Executive Director who has given or received notice of termination of employment (whether or not lawful) may not exercise an Option during any period when the notice is effective and an Award granted to him shall not Vest during this period. If an Award would otherwise have Vested during this period, and the notice is withdrawn, the Award will Vest if the notice is withdrawn.

 

	
6.5

	
Options may be exercised in whole or in part

 

A Vested Option may be exercised in whole or in part. If exercised in part, the unexercised part of the Option shall not lapse as a result and shall remain exercisable.

 

	
6.6

	
Procedure for exercise of Options

 

The Board shall specify the procedure applying to the exercise of Options, including the arrangements for paying the Award Price and any payment or documentation required under Rule 12.

 

For the avoidance of doubt, the date of exercise of an Option shall be the date of the receipt of the notice of exercise and compliance with the first paragraph of this Rule 6.6.

 

	
6.7

	
Issue or transfer of Plan Shares

 

Subject to Rules 6.9 and 12 and to any necessary consent and to compliance by the Award Holder with the Rules, the Company shall, as soon as practicable and in any event not later than thirty days after:

 

	
·

	
the exercise date in the case of a Market Value Option or a Nominal Cost Option arrange for the issue or transfer to the Award Holder of the number of Plan Shares specified in the notice of exercise;

 

 

	 CSR      	 5

 

  

  

  

 

	
·

	
the Vesting of a Contingent Share Award, arrange for the issue or transfer to the Award Holder of the number of Plan Shares in respect of which the Award has Vested.

 

	
6.8

	
Settlement of Phantom Shares or Phantom Market Value Option or Phantom Nominal Cost Option 

 

 

Subject to Rule 12 and to any necessary consent and to compliance by the Award Holder with the Rules, the Company shall, as soon as practicable and in any event not later than thirty days after the Vesting of an Award of Phantom Shares or the exercise of a Phantom Market Value Option or Phantom Nominal Cost Option, arrange for the payment to the Award Holder of an amount of cash equal to:

 

	
·

	
in the case of Phantom Shares, the Market Value of the Plan Shares in relation to which the Award has Vested; or

	
·

	
in the case of a Phantom Market Value Option, the Gain on the Plan Shares in relation to which the Award has been exercised; or

	
·

	
in the case of a Phantom Nominal Cost Option, the Market Value of the Plan Shares in relation to which the Award has been exercised;

	
·

	
in each case minus the nominal value of such Plan Shares and any liability to taxes and/or social security contributions.

 

	
6.9

	
Net or Cash Settling

 

Subject to Rule 12, the Board may on exercise of a Market Value Option:

 

	
·

	
make a cash payment to the Award Holder equal to the Gain on the date of exercise of the Option; or

	
·

	
arrange for the transfer or issue to the Award Holder of Plan Shares with a Market Value equal to the Gain on the date of exercise of the Option (rounded down to the nearest whole Plan Share). The Award Holder shall not be required to make payment for the Plan Shares.

 

Subject to Rule 12, the Board may on the Vesting of a Contingent Share Award make a cash payment to the Award Holder equal to the Market Value of the Plan Shares in respect of which the Award has Vested.

 

Where the Board settles an Award in the manner described in this Rule 6.9, this shall be in full and final satisfaction of the Award Holder’s rights under the Award.

 

	
6.10

	
Dividend Equivalents

 

An Award may include the right to receive an amount (in cash or Plan Shares) on Vesting equal in value to the dividends which were payable to ordinary shareholders of the Company on the number of Plan Shares in respect of which the Award has Vested during the period between the Award Date and Vesting. The payment shall not include any associated tax credit.

 

The Board may decide at any time not to apply this Rule 6.10 to all or any part of a special dividend or dividend in specie.

 

	
6.11

	
US Taxpayers

 

The Plan is intended to and shall be construed and operated in all respects to meet the requirements of the short-term deferral exception from Section 409A of the United States Internal Revenue Code of 1986.

 

Notwithstanding anything to the contrary contained in the Plan, no US Taxpayer may exercise an Option later than 2.5 calendar months after the end of the Taxable Year in which the Option first becomes exercisable, provided that the Option shall lapse on the date it would have lapsed had this rule not applied. The Rules of the Plan shall be interpreted accordingly.

 

 

	 CSR      	 6

 

  

  

  

 

For the purposes of this Rule 6.11,

 

Taxable Year means the 12 month period in respect of which the Option Holder is obliged to pay US Tax or, if it would result in a longer exercise period, the 12 month period in respect of which the Option Holder’s employing company is obliged to pay tax.

 

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

 

	
7

	
Vesting and Exercise of Awards in Special Circumstances

 

	
7.1

	
Death

 

Notwithstanding Rule 6.1, if an Award Holder dies, a proportion of his Awards shall Vest immediately. Unless the Board determines otherwise, the proportion of the Awards which shall Vest shall be determined by reference to:

 

	
  

	
a.

	
the extent to which the Performance Target (if any) has been achieved; and

	
  

	
b.

	
the number of complete months from the Award Date until death as a proportion of the original Vesting Period.

 

In the case of Options, the Award Holder’s personal representatives shall be entitled to exercise his Vested Options at any time during the period ending six months after death or during such longer period as the Board determines. If not so exercised, the Option shall lapse at the end of such period.

 

	
7.2

	
Injury, disability, redundancy, retirement etc

 

Notwithstanding Rule 6.1, if an Award Holder ceases to be in Relevant Employment by reason of:

 

	
·

	
ill-health, injury or disability;

	
·

	
retirement by agreement with his employer;

	
·

	
the company which employs him ceasing to be a Group Member;

	
·

	
the transfer or sale of the undertaking or part undertaking in which he is employed to a person who is not a Group Member;

	
·

	
redundancy within the meaning of the Employment Rights Act 1996; or

	
·

	
any other circumstances if the Board decides, within one month of the Award Holder ceasing to be in Relevant Employment, in any particular case a proportion of his Awards shall Vest.

 

The following provisions shall apply to determine the proportion of the Awards which shall Vest and when they shall Vest:

 

	
  

	
a.

	
Either the Awards will Vest immediately in which case the proportion shall be determined by reference to the extent to which the Performance Target (if any) has been achieved at the date of cessation; or

	
  

	
b.

	
Where the Award Holder is an Executive Director, the Board may decide that the Award will continue until the Vesting date specified under Rule 1.4(f) with the satisfaction of the Performance Target being determined at the time of Vesting;

	
  

	
c.

	
In both cases, the number of Plan Shares will be reduced pro rata to reflect the number of complete months from the Award Date until cessation as a proportion of the original Vesting Period.

 

In the case of Options, the Award Holder shall be entitled to exercise the Vested proportion of his Options at any time during the period ending six months after the date of cessation of his employment or during such other longer period as the Board determines. If not so exercised, the Options shall lapse at the end of such period.

 

 

	 CSR      	 7

 

  

  

  

 

	
7.3

	
Award Holder relocated abroad

 

Notwithstanding Rule 6.1, if it is proposed that an Award Holder, while continuing to be in Relevant Employment, should work in a country other than the country in which he is currently working and, by reason of the change, the Award Holder would:

 

	
·

	
suffer less favourable tax treatment in respect of his Awards; or

	
·

	
become subject to a restriction on his ability to exercise an Option, to have issued or transferred to him the Plan Shares subject to an Award or to hold or deal in such Plan Shares or the proceeds of sale of such Plan Shares

 

his Awards may, at the discretion of the Board, Vest immediately either in full or to the extent determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the time the Award has been held by the Award Holder and having regard to the Performance Target and any further condition imposed under Rule 5.1. Where the Award is an Option, the Award Holder may exercise his Vested Option at any time during the period beginning three months before the proposed date of his transfer and ending three months after the date of his actual transfer. If not so exercised, the Option shall not lapse but shall cease to be treated as having Vested and shall continue in force in accordance with the Rules of the Plan.

 

	
7.4

	
Meaning of ceasing to be in Relevant Employment

 

For the purposes of the Plan, an Award Holder shall not be treated as ceasing to be in Relevant Employment until he no longer holds any office or employment with any Group Member.

 

	
7.5

	
Interaction of Rules

 

In the case of an Option:

 

	
·

	
If the Option has become exercisable under Rule 7.2 and, during the period allowed for the exercise of the Option under Rule 7.2 the Award Holder dies, the period allowed for the exercise of the Option shall be the period allowed by Rule 7.1;

	
·

	
If the Option has become exercisable under Rule 7 and, during the period allowed for the exercise of the Option under Rule 7, the Option becomes exercisable under Rule 8 also (or vice versa), the period allowed for the exercise of the Option shall be the shorter of the period allowed by Rule 7 and the period allowed by Rule 8.

 

	
8

	
Takeover, Reconstruction, Amalgamation or Winding-up of Company

 

	
8.1

	
Takeover

 

Subject to Rule 9, where a person obtains Control of the Company as a result of making an offer to acquire Plan Shares, Awards shall Vest on the date the person obtains Control as set out below.

 

The proportion of the Awards which shall Vest will be determined by the Board having regard to the extent to which the Performance Target (if any) has been achieved. Further, unless the Board determines otherwise, the number of Plan Shares will be reduced pro rata to reflect the number of complete months from the Award Date until the date the person obtains Control as a proportion of the original Vesting Period.

 

In the case of Options, the Vested proportion of the Options may be exercised at any time during the period of six months beginning with the time when the person making the offer has obtained Control. If not so exercised, the Options shall lapse at the end of such period unless the Committee determines otherwise, in which case the Options shall continue in force until such time as they lapse in accordance with the Rules.

 

 

	 CSR      	 8

 

  

  

  

 

	
8.2

	
Compulsory acquisition of Company

 

Subject to Rule 9, if a person becomes entitled or bound to acquire shares in the Company under section 979 of the Companies Act 2006, a proportion of the Awards shall Vest as set out below.

 

The proportion of the Awards which shall Vest will be determined by the Board having regard to the extent to which the Performance Target has been achieved. Further, unless the Board determines otherwise, the number of Plan Shares will be reduced pro rata to reflect the number of complete months from the Award Date until the date the person becomes so entitled or bound as a proportion of the original Vesting Period.

 

In the case of Options, the Vested proportion of the Options may be exercised at any time during the period beginning with the date the person serves a notice under section 979 and ending seven clear days before the date on which the person ceases to be entitled to serve such a notice. If not so exercised, the Options shall lapse at the end of the seven days.

 

	
8.3

	
Reconstruction or amalgamation of Company

 

Subject to Rule 9, if a person proposes to obtain Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899 of the Companies Act 2006 Awards will Vest on the date of the court sanction as set out below.

 

The proportion of the Awards which shall Vest will be determined by the Board having regard to the extent to which the Performance Target has been achieved. Further, unless the Board determines otherwise, the number of Plan Shares will be reduced pro rata to reflect the number of complete months from the Award Date until the date of the court sanction as a proportion of the original Vesting Period.

 

A Vested Option may be exercised at any time during the period of six months from the compromise or arrangement being sanctioned by the court and if not exercised within that period it shall lapse.

 

	
8.4

	
Winding-up of Company

 

Subject to Rule 9, if notice is given of a resolution for the voluntary winding-up of the Company Awards will Vest on the date notice is given.

 

The proportion of the Awards which shall Vest will be determined by the Board having regard to the extent to which the Performance Target has been achieved. Further, unless the Board determines otherwise, the number of Plan Shares will be reduced pro rata to reflect the number of complete months from the Award Date until the date notice is given as a proportion of the original Vesting Period.

 

A Vested Option may be exercised at any time during the period of six months from the date of the notice and if not exercised within that period it shall lapse.

 

	
8.5

	
Demergers and Other Events

 

Subject to Rule 9, the Board may determine that Awards Vest if it becomes aware that the Company will be affected by a demerger, distribution (which is not an ordinary dividend) or other transaction not otherwise covered by the Rules.

 

The proportion of the Awards which shall Vest will be determined by the Board having regard to the extent to which any Performance Target has been achieved. Further, unless the Board determines otherwise, the proportion of Awards which shall Vest will be reduced after taking into account the time the Award has been held by the Award Holder as a proportion of the Vesting Period.

 

A Vested Award may be exercised at any time during the period determined by the Board and if not exercised within that period it shall lapse.

 

 

	 CSR      	 9

 

  

  

  

 

	
8.6

	
Meaning of “obtains Control of the Company”

 

For the purpose of Rule 8 a person shall be deemed to have obtained Control of the Company if he and others Acting In Concert with him have together obtained Control of it.

 

	
8.7

	
Notification of Award Holders

 

The Board shall, as soon as reasonably practicable, notify each Award Holder of the occurrence of any of the events referred to in this Rule 8 and explain how this affects their position under the Plan.

 

	
8.8

	
Vesting of Awards and corporation tax deduction

 

Where the Board is aware that an event is likely to occur under Rule 8 in respect of which Awards will Vest in circumstances where the conditions for relief under Part 12 of the Corporation Tax Act 2009 may not be satisfied, the Board may determine that the Awards Vest and Options are deemed to be exercised, in accordance with Rule 8, immediately prior to the event taking place.

 

	
9

	
Exchange of Awards

 

	
9.1

	
Where Exchange applies

 

An Award will not Vest under Rule 8 but will be exchanged for a new award (“New Award”) under this Rule to the extent that:

 

	
·

	
an offer to exchange the Award for a New Award is made and accepted by the Award Holder; or

	
·

	
the Board, if relevant, with the consent of the persons acquiring Control, decide that Awards will be automatically exchanged for New Awards.

 

	
9.2

	
Terms of Exchange

 

The following applies in respect of the New Award:

 

	
1.

	
The Award Date of the New Award shall be deemed to be the same as the Award Date of the Award.

	
2.

	
The New Award will be in respect of the shares in a company determined by the Board.

	
3.

	
In the application of the Plan to the New Award, where appropriate, references to “Company” and “Plan Shares” shall be read as if they were references to the company to whose shares the New Award relates.

	
4.

	
The New Award must be equivalent to the Award and subject to paragraph 5 below it will Vest at the same time and in the same manner as the Award.

	
5.

	
Either the Vesting of the New Award must be subject to performance conditions and other conditions which are so far as possible equivalent to the Performance Target and conditions applying to the Award or no performance conditions will apply but the value of shares comprised in the New Award shall be the value of the number of Plan Shares which would have Vested under Rule 8 as applicable.

 

	
10

	
Lapse of Awards

 

Notwithstanding any other provision of the Rules, an Award shall lapse on the earliest of:

 

	
·

	
in the case of an Option, the tenth anniversary of the Award Date;

	
·

	
the Board determining that the Performance Target or any further condition imposed under Rule 5.1 has not been satisfied either in whole nor in part in respect of the Award and can no longer be satisfied in whole or in part in which case the Award shall lapse either in whole or as to such part in relation to which the Performance Target or other conditions imposed under Rule 5.1 can no longer be satisfied;

	
·

	
subject to Rule 7, the Award Holder ceasing to be in Relevant Employment;

	
·

	
any other date provided for under these Rules;

 

 

	 CSR      	 10

 

  

  

  

 

	
·

	
the date on which the Award Holder becomes bankrupt or enters into a compromise with his creditors generally.

 

	
11

	
Adjustment of Awards on Reorganisation

 

	
11.1

	
Power to adjust Awards

 

In the event of a Reorganisation, the number of Plan Shares subject to an Award which is an Award, the description of the Plan Shares, the Award Price, or any one or more of these, may be adjusted in such manner as the Board shall determine.

 

	
11.2

	
Notification of Award Holders

 

The Board shall, as soon as reasonably practicable, notify each Award Holder of any adjustment made under this Rule 11 and explain how this affects their Award.

 

	
12

	
Accounting for Tax and Social Security Contributions

 

	
12.1

	
Deductions

 

Unless the Award Holder discharges any liability that may arise himself, the Board, the Company or any Group Member (as the case may be) may withhold such amount, or make such other arrangements as it may determine appropriate, for example, to sell or withhold Plan Shares, to meet any liability to taxes or social security contributions in respect of Awards.

 

	
12.2

	
Transfer of Employer’s NIC

 

The Board may, at its discretion, require the Award Holder to pay all or any part of the Employer’s NIC in relation to an Award under the Plan, to the extent that it is lawful to do so.

 

Employer’s NIC means employer’s national insurance contributions liability or any local equivalent.

 

	
12.3

	
Execution of Document by Award Holder

 

The Board may require an Award Holder to execute a document in order to bind himself contractually to any such arrangement as is referred to in Rules 12.1 and 12.2 and return the executed document to the Board by a specified date. It shall be a condition of Vesting of the Award that the executed document be returned by the specified date unless the Board determines otherwise.

 

	
13

	
Issue and Listing of Plan Shares

 

	
13.1

	
Rights attaching to Plan Shares

 

All Plan Shares issued and/or transferred under the Plan shall, as to voting, dividend, transfer and other rights, including those arising on a liquidation of the Company, rank equally in all respects and as one class with the Plan Shares of the same class in issue at the date of issue or transfer save as regards any rights attaching to such Plan Shares by reference to a record date prior to the date of such issue or transfer.

 

	
13.2

	
Listing of Plan Shares

 

If and so long as Plan Shares are listed on the Official List and traded on the London Stock Exchange, the Company will apply for the listing of any Plan Shares issued under the Plan as soon as practicable.

 

 

	 CSR      	 11

 

  

  

  

 

	
14

	
Relationship of Plan to Contract of Employment

 

	
14.1

	
Contractual Provisions

 

Notwithstanding any other provision of the Plan:

 

	
·

	
the Plan shall not form part of any contract of employment between any Group Company and an Eligible Employee;

	
·

	
unless expressly so provided in his contract of employment, an Eligible Employee has no right to be made an Award and the receipt of an Award in one year is no indication that the Award Holder will be made any subsequent Awards;

	
·

	
the Plan does not entitle any Award Holder to the exercise of any discretion in their favour;

	
·

	
the benefit to an Eligible Employee of participation in the Plan (including, in particular but not by way of limitation, any Awards held by him) shall not form any part of his remuneration or count as his remuneration for any purpose and shall not be pensionable; and

	
·

	
if an Eligible Employee ceases to be in Relevant Employment for any reason, he shall not be entitled to compensation for the loss or diminution in value of any right or benefit or prospective right or benefit under the Plan (including, in particular but not by way of limitation, any Awards held by him which lapse by reason of his ceasing to be in Relevant Employment) whether by way of damages for unfair dismissal, wrongful dismissal, breach of contract or otherwise.

 

	
14.2

	
Deemed Agreement

 

By accepting the making of an Award, an Award Holder is deemed to have agreed to the provisions of these Rules, including this Rule 14.

 

	
15

	 	
Administration of Plan

 

	
15.1

	
Responsibility for administration

 

The Company and the Board where appropriate, shall be responsible for, and shall have the conduct of, the administration of the Plan. The Board may from time to time make, amend or rescind regulations for the administration of the Plan provided that such regulations shall not be inconsistent with the Rules.

 

	
15.2

	
Conflict of Interest

 

Where the Board has to make any decision under the Plan which affects the personal interests of an Executive Director, that decision shall be taken by the Remuneration Committee of the Board.

 

	
15.3

	
Board’s decision final and binding

 

The decision of the Board shall be final and binding in all matters relating to the Plan, including but not limited to the resolution of any dispute concerning, or any inconsistency or ambiguity in the Rules or any document used in connection with the Plan.

 

	
15.4

	
Discretionary nature of Awards

 

All Awards shall be made entirely at the discretion of the Board.

 

	
15.5

	
Provision of information

 

The Award Holder shall provide to the Company as soon as reasonably practicable such information as the Company reasonably requests for the purpose of complying with its statutory reporting obligations.

 

 

	 CSR      	 12

 

  

  

  

 

	
15.6

	
Cost of Plan

 

The cost of introducing and administering the Plan shall be met by the Company. The Company shall be entitled, if it wishes, to charge an appropriate part of such cost to a Subsidiary.

 

	
15.7

	
Data protection

 

By accepting the making of an Award, an Award Holder is deemed to consent to the holding, processing and transfer of personal data in relation to the Award Holder by or to the Company, any Group Member, any third party broker, registrar or administrator or any future purchaser of the Company or relevant Group Member employing the Award Holder for all purposes relating to the operation of the Plan.

 

	
15.8

	
Third party rights

 

Nothing in these Rules confers any benefit, right or expectation on a person who is not an Award Holder. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of these Rules.

 

	
16

	
Amendment of Plan

 

	
16.1

	
Power to amend Plan

 

Subject to Rules 16.2 and 16.3, the Board may from time to time amend the Rules (including, for the purposes of establishing a sub-plan or sub-plans).

 

	
16.2

	
Amendments to Plan

 

Without the prior approval of the Company in general meeting, an amendment may not be made for the benefit of existing or future Award Holders to the Rules relating to:

 

	
·

	
the basis for determining an Eligible Employee’s entitlement (or otherwise) to be made an Award and/or to acquire Plan Shares on the exercise of an Award and/or to become absolutely entitled to Plan Shares subject to an Award (as the case may be) under the Plan;

	
·

	
the persons to whom an Award may be made;

	
·

	
the limit on the aggregate number of Plan Shares over which Awards may be made;

	
·

	
the limit on the number of Plan Shares over which Awards may be made to any Eligible Employee;

	
·

	
the price at which Plan Shares may be acquired pursuant to an Award;

	
·

	
the adjustment of Awards on a Reorganisation;

	
·

	
this Rule 16.2

 

except for:

 

	
·

	
an amendment which is of a minor nature and benefits the administration of the Plan; or

	
·

	
an amendment which is of a minor nature and is necessary or desirable in order to take account of a change of legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants in the Plan, the Company or some other Group Member.

 

	
16.3

	
Rights of existing Award Holders

 

An amendment may not adversely affect the rights of an existing Award Holder except where the Award Holder has approved the amendment.

 

 

	 CSR      	 13

 

  

  

  

 

	
17

	
Notices

 

	
17.1

	
Notice by Board or Company

 

Save as provided for by law, any notice, document or other communication given by, or on behalf of, the Board or Company to any person in connection with the Plan shall be deemed to have been duly given if delivered to him at his place of work, if he is in Relevant Employment if sent by e-mail to such e-mail address as may be specified by him from time to time, or sent through the post in a pre-paid envelope to the postal address last known to the Company to be his address and, if so sent, shall be deemed to have been duly given on the date of posting.

 

	
17.2

	
Notice to Board or Company

 

Save as provided for by law any notice, document or other communication given to the Board or the Company in connection with the Plan shall be delivered by hand or sent by email, fax or post to the Company Secretary at the Company’s registered office or such other e-mail or postal address as may from time to time be notified to Award Holders but shall not in any event be duly given unless it is actually received at the registered office or such e-mail or postal address.

 

	
18

	
Governing Law and Jurisdiction

 

	
18.1

	
Plan governed by English Law

 

The formation, existence, construction, performance, validity and all aspects whatsoever of the Plan, any term of the Plan and any Award made under it shall be governed by English law.

 

	
18.2

	
English courts to have jurisdiction

 

The English courts shall have jurisdiction to settle any dispute which may arise out of, or in connection with, the Plan.

 

	
18.3

	
Jurisdiction agreement for benefit of Company

 

The jurisdiction agreement contained in this Rule 18 is made for the benefit of the Company only, which accordingly retains the right to bring proceedings in any other court of competent jurisdiction.

 

	
18.4

	
Award Holder deemed to submit to such jurisdiction

 

By accepting the making of an Award, an Award Holder is deemed to have agreed to submit to such jurisdiction.

 

	
19

	
Interpretation

 

	
19.1

	
Definitions

 

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

 

Acting In Concert has the meaning given to that expression in The City Code on Takeovers and Mergers in its present form or as amended from time to time;

 

Award means an Award under the Plan, being a Contingent Share Award, a Phantom Share, a Market Value Option, a Phantom Market Value Option, a Nominal Cost Option, or a Phantom Nominal Cost Option granted under the Plan;

 

 

	 CSR      	 14

 

  

  

  

 

Award Certificate means a statement in a form determined by the Company setting out details of the Award as set out in Rule 1.4;

 

Award Date means the date on which an Award is made in accordance with Rule 1.3;

 

Award Holder means an individual who holds an Award or, where the context permits, his legal personal representatives;

 

Award Price means the amount (if any) per Plan Share payable in British Pound Sterling on the exercise of an Option and/or Vesting of an Award, determined in accordance with Rule 4;

 

Board means the board of directors of the Company;

 

British Pound Sterling or £ means the lawful currency of the UK;

 

Company means CSR plc incorporated in England and Wales under company number 04187346;

 

Contingent Share Award means a conditional right under the Plan to acquire Plan Shares;

 

Control has the meaning given to it by section 995 of ITA 2007;

 

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

 

Dealing Restrictions means restrictions on dealings imposed by statute, order or regulation or Government directive, or by the Model Code or any code adopted by the Company based on the Model Code;

 

Eligible Employee means an individual who at the Award Date is an employee of a Group Member;

 

Employees’ Share Scheme has the meaning set out in section 1166 of the Companies Act 2006;

 

Executive Director means any person who is a member of the board of directors of the Company and who is an employee of a Group Member;

 

Gain means the difference between (i) the Market Value of a Plan Share on the date of exercise of an Option and (ii) the Award Price, multiplied by the number of Plan Shares in respect of which the Option is being exercised;

 

Group means the Company and its Subsidiaries from time to time and Group Member shall be interpreted accordingly;

 

ITA 2007 means the Income Tax Act 2007;

 

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

 

Legacy Plan means any Employees’ Share Scheme which has the following characteristics:

 

	
·

	
the Company has assumed under it an obligation to deliver Plan Shares to Eligible Employees;

	
·

	
it was established by a Group Member before it became a Subsidiary; and

	
·

	
the Company in general meeting has resolved that Plan Shares issued under it should be excluded from the limit in Rule 2;

 

London Stock Exchange means London Stock Exchange plc or any successor body;

 

Market Value on any day means

 

(a)           if at the relevant time Plan Shares are listed in the Daily Official List of the London Stock Exchange (or any other recognised stock exchange within the meaning of section 1005 of ITA 2007 or the Alternative 

 

 

	 CSR      	 15

 

  

  

  

 

Investment Market of the London Stock Exchange),the middle market quotation (as derived from that List) on the preceding Dealing Day, or if the Board determines, the average of the closing middle market quotations over the three immediately preceding Dealing Days; or

 

(b)           where Plan Shares are not so listed, the market value of a Plan Share calculated as described in the Taxation of Chargeable Gains Act 1992;

 

Market Value Option means a right to acquire Plan Shares with an Award Price which is no less than the Market Value of a Plan Share on the Award Date;

 

Model Code means the Model Code on directors’ dealings in securities as set out in Listing Rule 9, Annex 1 of the London Stock Exchange Listing Rules;

 

Nominal Cost Option means the right to acquire Plan Shares with an Award Price which is equal to the nominal value of a Plan Share;

 

Option means a Market Value Option, a Nominal Cost Option, a Phantom Market Value Option or a Phantom Nominal Cost Option;

 

Performance Target means a performance target imposed as a condition of the Vesting of an Award under Rule 5.1 and as substituted or varied in accordance with Rule 5.3;

 

Phantom Market Value Option means a subsisting right granted under the Plan which, when exercised, entitles the Award Holder to be paid a cash amount equal to the Gain on a Market Value Option;

 

Phantom Nominal Cost Option means a subsisting right granted under the Plan which, when exercised, entitles the Award Holder to be paid a cash amount equal to the Market Value of a Plan Share;

 

Phantom Share means a subsisting right which, when Vested, entitles the Award Holder to be paid the Market Value of a Plan Share;

 

Plan means the CSR 2013 Long-Term Incentive Plan as amended from time to time;

 

Plan Shares means ordinary shares in the capital of the Company (or any shares representing them);

 

Regulatory Information Service means a service that is approved by the Financial Services Authority on meeting the Primary Information Provider criteria and is on the list of Regulatory Information Services maintained by the Financial Services Authority (or any overseas equivalent);

 

Relevant Employment means employment with any Group Member;

 

Reorganisation means any variation in the share capital of the Company, including but without limitation a capitalisation issue, rights issue, demerger or other distribution, a special dividend or distribution, rights offer or bonus issue and a sub-division, consolidation or reduction in the capital of the Company;

 

Rules mean the rules of the Plan;

 

Subsidiary has the meaning set out in section 1159 of the Companies Act 2006;

 

Vest

 

	
·

	
in relation to an Option means an Award Holder becoming entitled to exercise the Option;

	
·

	
in relation to a Contingent Share Award means an Award Holder becoming entitled to have the Plan Shares transferred to him; and

	
·

	
in relation to a Phantom Share means an Award Holder becoming entitled to be paid the Market Value of a Plan Share minus its nominal value; and

 

 

	 CSR      	 16

 

  

  

  

 

Vesting Period means the period starting with the Award Date and ending with the date specified in accordance with Rule 1.4 (f) on which the Award shall Vest.

 

	
19.2

	
Interpretation

 

In the Plan, unless otherwise specified:

 

	
·

	
save as provided for by law a reference to writing includes any mode of reproducing words in a legible form and reduced to paper or electronic format or communication including, for the avoidance of doubt, correspondence via e-mail or via an internet portal;

	
·

	
words importing the masculine gender include the feminine and vice versa;

	
·

	
words in the singular include the plural and vice versa;

	
·

	
references to an enactment include that enactment as re-enacted or amended from time to time; and

	
·

	
the Interpretation Act 1978 applies to the Plan in the same way as it applies to an enactment.

 

 

 

 

	 CSR      	 17

 

  

  

  

 

Schedule A: UK Approved Addendum

 

The Board may designate any Market Value Option as a CSOP Option on the Award Date. If the Board does, the provisions of the rules relating to Options will apply to the CSOP Option, subject to this Addendum. Only Options may be granted under this Addendum and references in the Rules to Contingent Share Awards, Nominal Cost Options, Phantom Shares, Phantom Market Value Options and Phantom Nil Cost Options shall not apply to this Addendum.

 

The terms of CSOP Options have been approved by Her Majesty’s Revenue and Customs (“HMRC”) under Schedule 4 of ITEPA 2003 under reference number [       ]. References to Schedule 4 in this Addendum are references to Schedule 4 to ITEPA 2003.

 

	
A1.

	
Eligibility to be granted CSOP Options

 

CSOP Options may not be granted under this Addendum to anybody who is;

 

	
·

	
excluded from participation because of paragraph 9 of Schedule 4 (material interest provisions);

 

	
·

	
a director who is required to work less than 25 hours a week (excluding meal breaks) for the Company; or

 

	
·

	
not an employee or director of the Company or a Subsidiary which has been nominated by the Board as a constituent company for the purposes of paragraph 3 of Schedule 4.

 

	
A2.

	
Contents of Award Certificate

 

In addition to the items specified in Rule 1.4, the Award Certificate for a CSOP Option shall state:

 

	
·

	
that the Option is intended to be a CSOP Option and;

	
·

	
whether or not the Plan Shares which may be acquired by the exercise of the CSOP Option may be subject to any Restriction and, if so, the details of the Restriction.

 

	
A3.

	
Earliest date of grant of CSOP Options

 

No CSOP Options may be granted prior to the approval of the Addendum by HMRC.

 

	
A4.

	
Shares subject to a CSOP Option

 

The definition of “Plan Shares” is modified to mean “ordinary shares in the capital of the Company which satisfy the conditions in paragraphs 16 to 20 of Schedule 4”.

 

The Plan Shares subject to a CSOP Option must satisfy paragraphs 16 to 20 of Schedule 4 at the Award Date and the exercise date. If they cease to satisfy paragraphs 16 to 20 of Schedule 4 and the Board notifies HMRC that they wish the terms of CSOP Options to be disapproved, the definition of the Option will continue in effect but HMRC may withdraw its approval of this Addendum.

 

	
A5.

	
Award Price

 

The Award Price of a CSOP Option will be not less than the Market Value of a Share on the Award Date or such other date as HMRC may agree in advance. Where Plan Shares are not admitted to the Official List then the Market Value shall be as set out in Rule 19.1 (as modified by the deletion of the phrase “or the Alternative Investment Market of the London Stock Exchange”) and agreed in advance with HMRC Shares and Assets Valuation.

 

	
A6.

	
HMRC limit

 

The Board must not grant a CSOP Option to an Eligible Employee which would cause the aggregate market value of:

 

	
·

	
the Plan Shares subject to that CSOP Option: and

 

 

	 CSR      	 18

 

  

  

  

 

	
·

	
the Plan Shares which he may acquire on exercising other CSOP Options; and

 

	
·

	
the shares which he may acquire on exercising his options under any other HMRC approved discretionary scheme established by the Company or by any of its associated companies (as defined in paragraph 35 of Schedule 4) to exceed the amount permitted under paragraph 6(1) of Schedule 4 (currently £30,000). For the purposes of this paragraph, market value is calculated as at the grant date of the options as described in the relevant plan rules.

 

If the grant of an Option would cause this limit to be exceeded, such Option shall take effect as an Option over the maximum number of Plan Shares which does not cause the limit to be exceeded. If more than one Option is granted on the same Grant Date, the number of Plan Shares which would otherwise be subject to each Option shall be reduced pro rata.

 

	
A7.

	
Plan Shares subject to a Restriction

 

If the Plan Shares subject to a CSOP Option are subject to a Restriction, then for the purposes of Rules A5 and A11, the Market Value of those Plan Shares shall be determined as if they were not subject to the Restriction.

 

For the purposes of this Addendum, “Restriction” has the meaning given in paragraph 36(3) of Schedule 4.

 

	
A8.

	
Variations in share capital, demergers and special distributions

 

	
·

	
Adjustments may not be made to CSOP Options under Rule 11 (Adjustment of Awards on Reorganisation) where there is a demerger (in whatever form), an exempt distribution by virtue of Chapter 5 or Part 23 of the Corporation Tax Act 2010 or a special dividend or distribution.

	
·

	
No adjustment of CSOP Options may be made under Rule 11 without the prior approval of HMRC.

 

	
A9.

	
Restrictions on exercise of a CSOP Option

 

An Award Holder may not exercise a CSOP Option while he is excluded from participation under paragraph 9 of Schedule 4 (material interest provisions).

 

	
A10.

	
Discretion on exercise and lapse of CSOP Options

 

Rule 7 (Vesting and Exercise of Awards in Special Circumstances) shall take effect on the basis that the proportion of the Awards which shall Vest will be determined by the Board taking into account as at the time of cessation of the satisfaction of the Performance Target and any further condition imposed under Rule 5.1, and the number of Plan Shares will be reduced pro rata to reflect the number of whole months from the Award Date until cessation as a proportion of the original Vesting period.

 

If any discretion is exercised under Rules 7 (Vesting and Exercise of Awards in Special Circumstances) or 8 (Takeover, Reconstruction, Amalgamation or Winding-up of Company) in relation to a CSOP Option, it must be exercised fairly and reasonably.

 

	
A11.

	
Exchange of CSOP Options

 

The second bullet of Rule 9.1 shall not apply to CSOP Options.

 

If the person who obtains Control of the Company under Rule 8 is a company of which 90% or more of the ordinary shares are held in substantially the same proportions by substantially the same persons who previously held the Company’s ordinary shares, then the Board may determine that Rule 8 shall not apply.  Instead, if that person makes an offer to exchange the Award for a new Award which meets the requirements set out below, any CSOP Options that are not exchanged within the period referred to in paragraph 26 of Schedule 4

 

CSOP Options can only be exchanged, as described in Rule 9.2, if the Acquiring Company:

 

	 CSR      	 19

 

  

  

  

 

	
·

	
obtains Control of the Company as a result of making a general offer to acquire:

 

	
  

	
‒

	
the whole of the issued ordinary share capital of the Company (other than that which is already owned by it and its subsidiary or holding company) made on a condition such that, if satisfied, the Acquiring Company will have Control of the Company; or

 

	
  

	
‒

	
all the Plan Shares (or all those Plan Shares not already owned by the Acquiring Company or its subsidiary or holding company); or

 

	
·

	
obtains Control of the Company under a compromise or arrangement sanctioned by the court under Section 899 of the Companies Act 2006; or

	
·

	
becomes bound or entitled to acquire Plan Shares under Sections 979 to 982 or 983 to 985 of the Companies Act 2006.

 

CSOP Options must be exchanged within the period referred to in paragraph 26 of Schedule 4 and with the agreement of the company offering the exchange.

 

Paragraph 5 of Rule 9.2 shall be construed as if the words “which would have Vested under Rule 8 as applicable” were replaced by the words “subject to the original Award”.

 

The new Award must be equivalent to the old Award by satisfying the conditions of paragraph 27 of Schedule 4 and must be in respect of shares which satisfy the conditions of paragraph 27 of Schedule 4, in a body corporate falling within paragraph 16(b) or (c) of Schedule 4.

 

	
A12.

	
Changing the terms of CSOP Options

 

The Board need not obtain the approval of the Company in general meeting for any minor changes which are necessary or desirable in order to obtain or maintain HMRC approval for the terms of CSOP Options under Schedule 4 any other enactment.

 

If HMRC approval of this Addendum is to be maintained, any change to a key feature (within the meaning of paragraph 30(4) of Schedule 4) of the Plan (including this Addendum) under Rule 16 (Amendment of Plan) and which is made after it has been approved under Schedule 4 will only have effect when it is approved by HMRC.

 

	
A13.

	
Substitution, variation or waiver of Performance Target

 

No amendment to the Performance Targets or other conditions for CSOP Options can be made which makes the Performance Targets or other conditions more difficult to satisfy.

 

	
A14.

	
Accounting for PAYE and National Insurance Contributions

 

Rule 12.1 (Deductions) shall be replaced by the following:

 

“If the Board, the Company or any Group Member (as the case may be) is obliged in any jurisdiction to account for tax and national insurance contributions for which the Award Holder is liable by virtue of the exercise of the Award and such company has not received from the Award Holder the necessary amount, then such company shall be entitled to discharge such liability by selling sufficient Plan Shares in respect of which the Award has been validly exercised and allotting or procuring the transfer of the balance of the Plan Shares to the Award Holder.”

 

Rule 12.2 (Transfer of Employer’s NIC) shall be limited so that it may be a condition of exercise of a CSOP Option that the Award Holder agrees to pay all or any part of the Employer’s NIC, but it may not be a condition of the grant of the CSOP Option or the allotment of Plan Shares.

 

	
A15.

	
Disapplication of certain Plan rules and provisions

 

The following rules and provisions do not apply to CSOP Options:

 

Rule 1.4, paragraph 1.g (Contents of Award Certificate - dividend equivalents) and 6.10 (Dividend equivalent);

 

Rule 6.9 (Net or Cash Settling).

 

 

 

 

 

 

 

 

	 CSR      	 20

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