EXHIBIT 10.40
DATED 3rd November 1997
Morgan Stanley, Dean Witter, Discover & Co.
and
Morgan Stanley UK Group
and
Morgan Stanley International, Inc
and
Noble Lowndes Settlement Trustees Limited
TRUST DEED
and
RULES OF THE MORGAN STANLEY UK GROUP
PROFIT SHARING PLAN
(approved under the Income and Corporation Taxes Act 1988 as amended)
September 1997 (iv)
THIS TRUST DEED is made the 3rd day of November 1997
BETWEEN:
(1) Morgan Stanley, Dean Witter, Discover & Co. whose registered office is at
1209 Orange Street, Wilmington, Delaware, DE 19801 ("the Company"); and
(2) The Companies whose respective names and registered offices are specified
in Schedule 1 hereto (together with the Company "the Participating
Companies"); and
(3) Noble Lowndes Settlement Trustees Limited whose registered office is at PO
Box 144, Norfolk House, Wellesley Road, Croydon CR9 3EB ("the Trustees")
WHEREAS:
(A) The Company wishes to establish a scheme approved in accordance with the
provisions of Schedules 9 and 10 of the Income and Corporation Taxes Act
1988 (as amended) for the provision by the Participating Companies of funds
for the acquisition by the Trustees of Shares in the Company to be known as
the Morgan Stanley UK Group Profit Sharing Plan or "the Plan".
(B) The Company has accordingly by resolution of the Directors resolved to
establish the Plan aforesaid.
(C) The Trustees have agreed to be the first trustees of the Plan.
NOW THIS DEED WITNESSETH as follows:
1 Construction
(a) Words or phrases defined in Schedule 2 shall apply throughout this
deed.
(b) Reference to any statutory provision shall be to that provision as
modified or re-enacted.
(c) The Interpretation Act 1978 shall apply to this deed mutatis mutandis
as if it
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were an Act of Parliament.
(d) Headings in this deed (and the Rules) are intended for convenience
only and shall in no way affect its construction.
2 Rules
(a) Schedule 2 to this deed constitutes the Rules of the Plan and contains
definitions of words and phrases for the purposes of the Plan;
(b) Schedule 3 of this deed constitutes the documents for the creation of
a contract between the Directors of the Company, the Trustees and the
Participant;
(c) Schedule 4 to this deed sets out the form of the supplemental trust
deed referred to in clause 10 of this deed.
3 The Trusts of the Plan - General
The Trustees hereby declare that all Plan Shares and Employee Shares held
by them will be held UPON TRUST for the beneficiary respectively entitled
thereto under the Plan subject to the provisions hereinafter set out and to
the power of the Trustees to transfer or cause to be transferred to the
person beneficially entitled thereto any Employee Shares.
4 The Trusts of the Plan
Subject as hereinafter provided the Trustees hereby covenant to apply the
monies received by them from the Participating Companies in the acquisition
of Shares for the purpose of appropriation under the Plan or for the
purposes of Clause 5(a) of this deed and to hold such Shares once
appropriated and all other trust property deriving therefrom on trust for
the Participants to whom such Shares have been appropriated and to apply
and deal with the same in accordance with the Plan.
Provided always that:
(a) The Trustees shall not dispose of any of a Participant's Plan Shares
during the Retention Period (whether by transfers to the Participant
or otherwise) except as provided in the Rules of the Plan;
(b) The Trustees shall not (subject to Rules 6 and 7 of the Plan) dispose
of any of a Participant's Plan Shares after the end of the Retention
Period applicable thereto except pursuant to a direction validly given
by or on behalf of the Participant or any person in whom the
beneficial interest in those Shares is for the time being vested and
by a transaction which would not involve a breach of the Participant's
obligations as expressed in the rules of the Plan;
(c) The Trustees shall deal with any right conferred in respect of any of
such Shares to be allotted other shares securities or rights of any
description only pursuant to a written direction given by or on behalf
of the Participant or any person in whom the beneficial interest in
that Participant's Plan Shares is for the time being vested or his
legal personal representatives.
5 Unused Funds
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(a) Where pursuant to the Plan the Trustees hold any monies shares
securities or other assets of whatever nature which represent or
represent income derived from:
(i) any monies or assets received by them from Participating
Companies for the purposes of the Plan but which have not been
applied in the acquisition and appropriation of Shares to a
Participant; or
(ii) any Capital Receipt of less than (Pounds)3 which would be
distributable to a Participant save for the provisions
concerning sums of that order contained in the Rules of the
Plan; or
(iii) any assets relating to the Plan (including any amounts
specifically paid to the Trustees as a contribution to any costs
charges and expenses incurred in connection with the
establishment and operation thereof) which are not held for the
benefit of (but subject to the Rules of the Plan) a Participant
in consequence of an appropriation to him;
then the Trustees shall apply such assets or the sale proceeds thereof
in or towards any reasonable costs charges and expenses of the Plan
and may during the Trust Period and subject to the law relating to
accumulations accumulate any income thereon and hold the same for the
general purposes of the Plan. The Trustees shall notify the Company on
request of all amounts and assets held for such purposes.
(b) If at any time the Plan is terminated the Trustees shall thereupon
account to the Company and the Participating Companies for any monies
then held by them on the trusts of Clause 5(a) of this deed and
remaining so unused. Notwithstanding such termination the Trustees
shall continue to administer the Plan in accordance with this deed and
the Rules of the Plan. At the earlier of the expiry of the Trust
Period and the third anniversary of such termination the Trustees
shall convert into money any trust property held subject to the trusts
of the Plan and not appropriated to Participants and shall pay such
money to the Participating Companies as nearly as practicable in
proportion to their respective payments of monies or if such payment
shall prove impracticable to such person or persons for such
charitable objects as the Trustees may determine.
6 Right to deal with reconstructions, etc
(a) The Trustees may at any time or times on behalf of any Participant who
has given such a direction to the Trustee as is permitted by Rule 7 of
the Plan (but not otherwise) enter into any compromise or arrangement
with respect to or may release or forbear to exercise all or any of
its rights as shareholder whether in connection with a plan of
reconstruction or amalgamation or otherwise and may accept in or
towards satisfaction of all or any of such rights such consideration
as such Participant shall direct whether in the form of cash or stock
shares debentures debenture stock or obligations or securities without
the Trustees being in any way liable or responsible for any loss
resulting from complying with any such direction or any liability or
increased liability of such Participant to tax or in respect of any
inadequacy or alleged inadequacy
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in the nature or amount of such consideration.
(b) The Trustees shall not be liable or responsible for any loss or any
liability or increased liability of a Participant to tax arising out
of the failure of such Participant to give a direction to the Trustees
or the failure of such Participant to give a direction to the Trustees
within a particular time or if the Participant has directed the
Trustees to use their discretion in any way arising out of the bona
fide exercise by the Trustees of that discretion.
7 Accountability for PAYE and other deductions
The Participating Companies or the Trustees shall account to the Inland
Revenue or other authority concerned for any amounts deducted from payments
made pursuant to the Plan in respect of income tax or any other deductions
required by statute in accordance with paragraph 7 of Schedule 10 to the
Act.
8 Maintenance of trust records
(a) The Trustees shall make proper arrangements for the preparation and
preservation of all necessary accounts (including the accounts of
individual employees) records and other documents necessary to carry
out their obligations in connection with the proper administration of
the Plan and the Participating Companies hereby undertake to make
available to the Trustees all facilities and information necessary to
ensure that full compliance is made with the provisions of the Plan.
(b) The Trustees shall submit to the Company such reports or other
information as it may reasonably require for the purpose of ensuring
that the Plan is properly administered and without prejudice to the
generality of the foregoing the Trustees shall submit to the Company
copies of all documents including the annual returns which have been
supplied to the Inland Revenue within twenty-one days of their being
so supplied.
9 Securities may be placed in custody
(a) The Trustees may place the documents of title to any securities for
the time being in their possession in connection with the trusts
hereof in any bank or safe deposit and shall not be responsible for
any losses incurred by so doing.
(b) At any time when there is more than one Trustee, the Trustees shall be
entitled to procure that any one or more of them may be registered as
proprietor of any property held by them upon the trusts of this deed.
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10 Extension of the Plan to other Subsidiaries
(a) The Plan may with the consent of the Company be extended to any
Subsidiary by the adherence of such Subsidiary to this deed by
supplemental deed in the form set out in Schedule 4.
(b) The Plan shall forthwith cease to extend to any Participating Company
other than the Company when:
(i) that company ceases to be a Subsidiary; or
(ii) a notice is served by the Company upon the
Trustees and the Participating Company that the Plan shall
thereafter cease to apply to that Participating Company; or
(iii) a Participating Company withdraws from the
Plan on such conditions as may be agreed by the Company;
but such cessation shall not affect the subsisting
rights of beneficiaries under the Plan which may have arisen
hereunder prior to such cessation and shall in no circumstances
cause the Company to breach the provisions of paragraph 2(3)(b)
of Schedule 9 to the Act.
(c) The Company shall notify the Board of Inland Revenue of any
changes in Participating Companies pursuant to Clause 10(a) or
10(b) as soon as is practicable thereafter.
11 Duties of Participating Companies
(a) If and so long as any company is a Participating Company it shall:
(i) contribute and pay to the Trustees in accordance with
Rule 4 such sums as are required by the Trustees to acquire
Shares to be appropriated as Plan Shares for Eligible Employees
of that Participating Company together with that proportion of
the sums required to meet the reasonable expenses of the Trustees
in operating and administering the Plan in respect of the
Eligible Employees of that Participating Company; and
(ii) provide the Trustees with all information reasonably
required from it for the purposes of the administration and
operation of the Plan in such form as the Trustees may reasonably
require.
(b) Any company which ceases to be a Participating Company shall remain
liable to meet its fair proportion of the expenses of the Trustees.
12 Indemnities
(a) The Trustees shall not be liable to satisfy any monetary obligations
under the Plan (including but without prejudice to the generality of
the foregoing any monetary obligations to Participants) beyond the
sums of money (including income) from time to time in their hands or
under their control as Trustees of
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the Plan and properly applicable for that purpose.
(b) The Trustees shall comply with any directions given by the Company
pursuant to the Rules of the Plan and shall not be under any liability
in respect thereof to the Company or to any Participant.
(c) The Trustees their officers and employees shall have the benefit of
all indemnities conferred upon trustees generally by law and the
Company shall indemnify and keep the Trustees their officers and
employees indemnified against all claims losses demands actions
charges expenses costs taxes duties and other liabilities arising out
of or in connection with anything lawfully done or caused to be done
by the Trustees their officers and employees in the exercise of the
powers and discretions vested in the Trustees by this trust deed or
otherwise arising howsoever out of or in connection with the proper
administration and operation of the Plan other than when due to the
Trustees' own negligence fraud or misfeasance or that of their
servants or agents.
13 Additional powers given to Trustees
(a) The Trustees shall have the following powers and discretions in
addition to those conferred by the general law:
(i) power and discretion to agree with the Company
all matters relating to the operation and administration of the
trusts of this deed and so that no person claiming an interest
under this trust shall be entitled to question the legality or
correctness of any arrangement or agreement made between the
Company and the Trustees in relation to such operation and
administration;
(ii) the Trustees may from time to time in writing
authorise such other person or persons whether or not a Trustee
as the Trustees shall think fit to draw and endorse cheques and
to give receipts and discharges for any monies or other property
payable transferable or deliverable to the Trustees and every
such receipt or discharge shall be as valid and effectual as if
such receipt or discharge were given by the Trustees;
(iii) the production of a written authority of the
Trustees given pursuant to sub-paragraph (a)(ii) of this Clause
shall be a sufficient protection to any person taking any such
receipt or discharge as is mentioned in sub-paragraph (a)(ii) of
this Clause and (unless that person shall have received express
notice in writing of the revocation of the authority) he shall be
entitled to assume and act upon the assumption that the authority
remains unrevoked.
(b) Monies not held for the benefit of any particular Participant may
be invested or laid out in the purchase of or at interest upon the
security of such stocks shares securities or other short-term
investments as the Trustees shall in their absolute discretion think
fit to the extent that (subject to the overriding obligation of the
Trustees to fulfil their obligations under the Rules of the Plan) the
Trustees shall have the same full and unrestricted powers of
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investing and transposing investments and laying out monies in all
respects as if they were absolutely entitled thereto beneficially and
without regard to any requirement as to diversification and in the
professed execution of this power the Trustees shall not be liable for
any loss arising from any investment or purchase made in good faith.
14 Administration
(a) So long as there is no sole corporate Trustee:
(i) the Trustees may meet together for the
despatch of business adjourn and otherwise regulate their
meetings as they think fit. The quorum for any meeting of the
Trustees shall be two and questions arising shall be decided by a
majority of votes and in case of equality of votes the chairman
or if there is no permanent chairman the chairman of the meeting
(who shall be elected by the meeting) shall have a second or
casting vote;
(ii) a resolution in writing signed by all the
Trustees for the time being shall be as valid and effectual as a
resolution passed at a meeting of the Trustees. Such resolution
may be contained in one document or in several documents in like
form each signed by one or more of the Trustees for the time
being;
(iii) a meeting of the Trustees at which a quorum is
present shall be competent to exercise all the powers and
discretions exercisable by the Trustees generally;
(iv) the Trustees may from time to time delegate
any business to any one or more of their number.
(b) A Trustee being a company may in its capacity as a Trustee hereof
act by its officers and may by such officers have and exercise all
powers trusts and discretions vested in it hereunder.
(c) The Trustees shall cause proper minutes to be kept and entered in
a book provided for the purpose of all their resolutions and
proceedings and any such minutes of any meeting of the Trustees if
purported to be signed by the chairman of such meeting or by the
chairman of a subsequent meeting shall be admissible as prima facie
evidence of the matters stated in such minutes.
(d) The Trustees may employ and act on the advice or opinion of any
solicitor broker actuary accountant or other professional or business
person whether such advice was obtained by the Trustees or by the
Company and shall not be responsible for any loss occasioned by their
so acting. The Company shall meet the expenses of such advice or
opinions to the extent that it, in its sole discretion, considers such
expenses to be reasonable.
(e) The Trustees may employ and fix the proper remuneration of any
agent or agents to transact all or any business of whatsoever nature
required to be done in the administration of the trusts powers and
provisions hereof.
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(f) The Trustees may execute or authorise the execution or delivery by
any agent of theirs of any deeds documents or other instruments by the
impression of the Trustees' signatures in writing printing lithograph
photocopying and other modes of representing or reproducing words in a
visible form.
15 Remuneration of Trustees
(a) Any individual Trustee shall be entitled to receive and retain as
remuneration for his services hereunder such sum or sums as the Company
may from time to time resolve to pay to him.
(b) Any Trustee being a solicitor broker actuary accountant or other
person engaged in any profession or business shall be entitled to be paid
all usual professional or proper charges for business transacted time
expended and acts done by him or by any employee or partner of his firm
in connection with the Plan including acts which a Trustee not being in
any profession or business could have done personally.
(c) Any Trustee being a company may charge and be paid such reasonable
remuneration or charges as shall from time to time be agreed in writing
between the Company and such company and any such company (being a bank)
shall be entitled subject to the written consent of the Company, to act
as banker and perform any services in relation to the Plan on the same
terms as would be made with a customer in the ordinary course of its
business as a banker, without accounting for any resultant profit
including without prejudice to the generality of the foregoing clause
retention of its customary share of brokerage commission.
16 Permitted dealings of Trustees
A Trustee and any director or other officer of a company acting as a
Trustee hereof shall not be precluded thereby from acquiring holding or
dealing with any debentures debenture stock shares or securities whatsoever
of the Company or any Participating Company or any other company in which
the Trustees may be interested or from entering into any contract or other
transaction with the Company or any Participating Company or any such
transaction and shall not be in any way liable to account to any
Participant or to the Trustees or the Company or any Participating Company
for any profits made or benefits obtained in connection therewith.
17 Appointment Resignation and Removal of Trustees
(a) The Company may at any time by supplemental deed:
(i) remove without notice any Trustee being an
individual from the office of trustee without assigning any
reason therefor;
(ii) remove without assigning any reason therefor
any Trustee being a company from the office of trustee upon
giving to such Trustee not less than three months' written
notice or such shorter notice as such Trustee may accept.
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(b) The minimum number of Trustees shall be three (unless a company
shall be a trustee hereof in which case the minimum number shall be
one) except in the case of the death incapacity or resignation of a
Trustee in which case the minimum number shall be two until such time
as a new Trustee be appointed.
(c) The Company shall ensure that one Trustee or any sole corporate
Trustee shall at all times be resident for tax purposes in the United
Kingdom.
(d) A Trustee may resign from the trusts hereby constituted at any
time by giving to the Company written notice and the Company shall
accept such written notice within the following three months and the
retiring Trustee shall thereupon resign and shall not be responsible
for any costs occasioned by such resignation or be under any liability
whatsoever in relation to the trusts hereof or the Plan or any monies
or other property subject thereto or any matter arising hereunder in
relation to the trusts hereof or the Plan or any monies in relation
hereto except in the case of fraud wilful wrongdoing or gross
negligence on the part of the resigning Trustee.
(e) The Trustees shall be entitled to rely without further enquiry on
all information supplied to the Trustees by the Company or where
relevant a Participating Company for the purposes of the Plan.
18 Delegation of administration by the Company and other matters
(a) The Company may at any time with the consent of the Trustees
delegate in writing to any other Participating Company or that
Participating Company's duly authorised officers any of its powers and
duties hereunder or any business including the exercise of any
discretion or the formation of any opinion to any person or company
provided always that the Company shall not delegate the duties imposed
on it:
(i) under Clause l0(a) of this deed;
(ii) under Clause 12(c) of this deed;
(iii) under Clause 17(a) of this deed;
(iv) under Clause l9(a) of this deed;
(v) under Clause 20(a) of this deed;
(vi) under Rule 15.
(b) Except as otherwise provided in this deed or in the Rules of the
Plan the powers and discretions exercisable by any Participating
Company in relation to the Plan shall be exercisable in the case of
the Company by the Committee and otherwise by resolution of the
directors of such Participating Company and a copy of any resolution
signed or purporting to be signed by the secretary or any director of
such company shall be sufficient authority to the Trustees to act
thereunder.
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(c) The Trustees shall be entitled to rely without further enquiry on
all information supplied to the Trustees by the Company or where
relevant a Participating Company for the purposes of the Plan.
19 Duration and Winding up of the Plan
(a) The Plan shall terminate on the expiry of the Trust Period or on
the expiry of thirty days' notice in writing to the Trustees following
a resolution to that effect by the Company and references throughout
this deed to a termination of the Plan shall be taken to be a
termination as here provided.
(b) On or after the termination of the Plan no further sums shall be
paid to the Trustees by the Participating Companies save that all
Participating Companies shall remain liable to pay their just
proportion of the costs charges and expenses of the Plan.
(c) Following any termination of the Plan the Trustees shall remain
responsible for the completion of their obligations thereunder.
(d) The perpetuity period applicable to this deed shall be the period
of eighty years from the date hereof.
20 Modification of the Deed and Rules of the Plan
(a) The Company with the consent of the Trustees may at any time and
from time to time in the case of this deed by deed supplemental hereto
and in the case of the Rules of the Plan by resolution of the
Directors modify or extend the Plan in any respect (such modification
or extension being referred to in this Clause as a "modification")
provided that:
(i) no modification shall alter to the
disadvantage of any Participant his rights in respect of any Plan
Shares appropriated before the date of such modification as the
case may be;
(ii) no modification shall impose onerous
obligations on the Trustees or vary modify or alter to the
disadvantage of the Trustees the provisions for their protection
and indemnity contained herein or in the Rules without the
written agreement of the Trustees;
(iii) no modification shall be made which would or
might infringe any rule against perpetuities;
(iv) no modification to the Plan shall take effect
unless the approval of the Board of Inland Revenue to the Plan as
amended thereby shall have first been obtained.
(b) The Company may subject to provisos (ii) and (iii) of sub-Clause
(a) of this Clause but notwithstanding the remaining provisions of
that sub-Clause and without otherwise obtaining the prior approval
thereto of any other person amend the Plan in any way which may be
necessary in order to secure the initial approval of the Plan by the
Board of Inland Revenue under Part I of Schedule 9 to the Act.
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(c) Any amendment made in accordance with the provisions of this
Clause shall be binding upon all persons from time to time interested
in the Plan including the Company and any Participating Company.
21 Supremacy of Trust Deed over Rules
The Trustees' rights duties and powers are regulated by this deed and by
the Rules and in the case of inconsistency or conflict between the
provisions of the deed and of the Rules the provisions of this deed shall
prevail.
22 Governing Law
This deed is to be construed in accordance with the laws of England.
IN WITNESS WHEREOF these presents have been entered into the day and year first
above written.
THE COMMON SEAL of
Morgan Stanley, Dean Witter, Discover & Co.
was hereunto affixed in the
presence of:
Director
Secretary
THE COMMON SEAL of
Morgan Stanley UK Group
was hereunto affixed in the
presence of:
Director
Secretary
THE COMMON SEAL of
Morgan Stanley International, Inc.
was hereunto affixed in the
presence of:
Director
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Secretary
THE COMMON SEAL of
NOBLE LOWNDES SETTLEMENT
TRUSTEES LIMITED
was hereunto affixed in the
presence of:
Director
Authorised Signatory
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SCHEDULE 1
(List of Participating Companies)
Name Registered Office
Morgan Stanley UK Group 25 Cabot Square
Canary Wharf
London E14 4QA
Morgan Stanley International, Inc 1013 Center Road
Wilmington
Delaware DE 19805
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SCHEDULE 2
MORGAN STANLEY UK GROUP
PROFIT SHARING PLAN
RULES
1 Definitions
In this Plan except where the context otherwise requires, the following
expressions shall have the following meanings:
"the Act" the Income and
Corporation Taxes Act 1988;
"to appropriate" to vest a beneficial
interest in Shares (subject to the provisions of
the deed and the Rules of this Plan) in an
Eligible Employee and the expression
"Appropriation" shall be construed accordingly;
"Appropriate Percentage" the percentage of the
Locked-in Value charged to income tax under
Schedule E computed in accordance with the
provisions of paragraph 3 of Schedule 10 to the
Act;
"Appropriation Date" such date on which
Plan Shares are appropriated to a Participant
pursuant to Rule 4(a)(iv);
"the Auditors" the auditors of the
Company for the time being or in the event of
there being joint auditors such one of them as the
directors shall select;
"Base Salary" such part of an individual's
annual remuneration as is expressed by his
original offer letter (as amended or varied by the
Company from time to time orally or in writing) to
be his annual base pay excluding overtime night
premium bonuses commissions quarterly compensation
profit pools expense allowance and any other form
of special compensation provided always that where
an individual becomes an Eligible Employee during
a Qualifying Period his Base Salary for the
purposes of this Plan for that
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Qualifying Period shall be that part of his annual
base pay earned by him from the date he became an
Eligible Employee to the end of that Qualifying
Period;
"the Brokers" the firm or company which is
appointed for the time being by the Trustees to
act as stockbrokers for the purposes of this Plan;
"Capital Receipt" a
receipt by the Trustees of money or money's worth
in respect of Plan Shares as defined in section
186(3) of the Act;
"the Company" Morgan Stanley, Dean Witter, Discover & Co. ;
"the Committee" the
United Kingdom Profit Sharing Committee comprising
such persons as the Board of Directors of the
Company may determine from time to time;
"Continuous Service" continuous service
within the meaning of the Employment Rights Act
1996;
"Control" the meaning given
by section 840 of the Act;
"Eligible Employee" an individual (not
being a person who is ineligible to participate in
this Plan by virtue of paragraphs 8 or 35(1) or
35(2) of Schedule 9 to the Act) who:
(a) is a director or employee of a Participating
Company who (if a director) normally devotes
to his duties 25 hours or more per week
(excluding meal breaks); and
(b) not less than one month before the
Qualification Date had Qualifying Service;
and
(c) is chargeable to tax under Case I of
Schedule E; or
(d) is such other person as the Committee
may in its absolute discretion determine
substantially to have qualified within this
definition but who strictly would not
otherwise qualify because of a temporary
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change of employer or for another reason)
provided that no individual shall be
determined to have qualified unless he is an
employee or director of a Participating
Company;
"Employee Shares" all Shares which
are not Plan Shares by reason only of the passing
of the Release Date;
"Initial Market Value" the Relevant Value
as defined herein;
"Letter of Acceptance" a letter in the
form (or substantially in the form) of Schedule 3
Part B;
"Letter of Offer" a letter in the form (or
substantially in the form) of Schedule 3 Part A;
"Locked-in Value" the locked-in value
as defined in section 186(5) of the Act but so
that references in that section to "initial market
value" shall be taken as references to Initial
Market Value as defined herein;
"Participant" an Eligible Employee to
whom shares have been appropriated pursuant to
this Plan;
"Participating Company" (a) the
Company;
(b) the company or companies listed in Schedule
1 hereof; and
(c) any other Subsidiary of the Company to which
this Plan is extended by deed supplemental
hereto in accordance with Clause l0(a) of
the deed;
"Participation Level" in respect of
Eligible Employees such percentage of their Base
Salary as the Committee shall determine provided
that the percentage so determined shall be the
same for all Eligible Employees;
"PAYE deduction" a deduction made
pursuant to paragraph 7 of Schedule 10 to the Act;
17
"this Plan" Morgan Stanley UK
Group Profit Sharing Plan;
"Plan Shares" Shares appropriated
to Eligible Employees in accordance with the
provisions of this Plan provided always that such
Shares shall cease to be Plan Shares at the later
of the expiry of the Retention Period and the
passing of the Release Date;
"Qualification Date" 31 December in any
year;
"Qualifying Service" one year's Continuous
Service as an employee or director of any one or
more companies under the Control of the Company
which for the purpose of this Plan shall be taken
to have been so served on the first day of the
month following the completion of twelve complete
months' service aforesaid;
"Qualifying Period" the period commencing
1 January in any year and ending on 31 December in
the same year or such other accounting reference
period of the Company or such part thereof as may
be determined by the Committee;
"Release Date" the date prescribed
by section 187(2) of the Act;
"Relevant Value" the value arrived at by dividing the aggregate
consideration paid in Pounds Sterling (excluding
the amount attributable to the expenses of
acquisition) by the Trustees to acquire Shares by
purchase through the New York Stock Exchange
within the thirty days immediately prior to the
Appropriation Date by the total number of Shares
so acquired or such other value as may, from time
to time, be agreed between the Board of Inland
Revenue and the Trustees pursuant to paragraph
30(4)(b) of Schedule 9 to the Act;
"Retention Period" in relation to any
Share appropriated as a Plan Share the period
commencing on the date such Plan Share is
appropriated and ending on the occurrence of the
earliest of the following events:
(i) the second anniversary of the date such
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Plan Shares were appropriated;
(ii) the date the Participant ceases to be an
employee of a Participating Company by
virtue of the occurrence of any of the
following:
(a) death;
(b) injury or disability;
(c) redundancy (within the meaning of the
Employment Rights Act 1996);
(iii) the date the Participant reaches age 60;
"Shares" Shares of Common
Stock in the capital of the Company satisfying the
provisions of paragraphs 10 to 12 and 14 of
Schedule 9 to the Act;
"Subsidiary" a company under the
Control of the Company;
"the Trustees" the trustees or
such other persons who are the trustees from time
to time;
"Trust Period" the period of 79
years from the date hereof;
"Working Day" any day other than
Saturdays Sundays public holidays and any date on
which the Company is closed for business;
"Year of Assessment" a year starting on 6
April and ending on the following 5 April.
2 Annual implementation
As soon as practicable and in any event no later than the end of each
Qualifying Period the Committee shall:
(a) determine whether the Plan is to operate in respect of that relevant
Qualifying Period; and
(b) determine the Participation Level for Eligible Employees.
3 Admission to the Plan
Within the period of three months before the end of a Qualifying Period for
which the
19
Plan is to operate Eligible Employees shall be issued by the Committee
with:
(a) a Letter of Offer; and
(b) a Letter of Acceptance to be completed signed and returned to the
Company or if the Company shall so determine to the Committee on behalf of
the Company within such period as shall be specified by the Committee or
such person as may be designated by the Committee for such purpose being
not less than 10 days from such issue. An Eligible Employee must complete a
new Letter of Acceptance on each occasion on which he wishes to receive an
appropriation of Shares under the Plan.
4 Appropriations
(a) So soon as is practicable prior to each Appropriation Date:
(i) the Trustees shall be notified by the Committee of the
names of those Eligible Employees who have properly executed and
delivered a Letter of Acceptance and shall also notify their Base
Salaries the Participation Level and such further information as the
Trustees may reasonably require to comply with their duties under Rule
5;
(ii) the Committee shall notify the Trustees of the total
contributions to be made to the Trustees pursuant to this Rule by
aggregating the amounts obtained by multiplying each Eligible
Employee's Base Salary by the Participation Level and shall also
notify each Participating Company of its share thereof in respect of
each such Participating Company's Eligible Employees;
(iii) the Committee shall procure that each Participating
Company contributes its relative proportion of the amount required by
the Trustees to purchase the number of Shares which are to be
appropriated as Plan Shares to its Eligible Employees and each
Participating Company shall pay its respective contribution to the
first named Participating Company which shall pay all such
contributions as agent of the other Participating Companies together
with its own contribution to the Trustees;
(iv) the Trustees shall acquire as promptly as practicable
following the making of such contributions to them such whole number
of Shares as may be acquired out of the contributions made to them in
accordance with the following procedures:
(aa) where the Trustees have howsoever been
offered Shares they may or they may instruct the Brokers to
purchase such Shares provided that such purchase shall be at
arm's length at a fair market value which shall be deemed to
be the average of the high and low prices of a Share on the
New York Stock Exchange on the next preceding day on which
transactions are made on that exchange;
20
(bb) where no such offer as is mentioned in
Rule 4(a)(iv)(aa) has been received by the Trustees or they
have not acquired through any purchase pursuant to Rule
4(a)(iv)(aa) sufficient Shares they shall instruct the
Brokers to acquire as promptly as practicable at the best
available price such whole number of Shares as may be
acquired out of the contributions or any balance of the
contributions remaining as the case may be;
(v) immediately following the relevant Qualification Date
the Committee shall if necessary notify the Trustees of any
Eligible Employee who was not a director or employee of a
Participating Company on that Qualification Date and no Shares
shall be appropriated in respect of a Qualifying Period to any
such Eligible Employee.
(b) As an alternative to the procedures described in Rule 4(a), as soon as
reasonably practicable prior to each Appropriation Date, the Committee
shall advise the Trustees of the names and addresses of such Eligible
Employees and the extent of their respective participation on the relevant
Appropriation Date. As soon as reasonably practicable after the Committee
has advised the Trustees of the Entitlements, the Trustees shall acquire
the number of Shares necessary for appropriation to such Eligible Employees
less the number of unappropriated Shares held. Within three working days of
the acquisition of such Shares, the aggregate of the amounts due shall be
paid to the Trustees by each Participating Company (or by the first named
Participating Company acting as its agent) in respect of such Eligible
Employees employed by it. The Shares shall be appropriated to each such
Eligible Employee on the basis described in Rule 4(e).
(c) Shares not appropriated within 18 months after the date of acquisition
by the Trustees shall be sold for the best consideration in money that can
reasonably be obtained and the net proceeds shall be applied in the
discharge of the administrative expenses of this Plan. For this purpose
Shares acquired at an earlier time shall be taken to be appropriated before
Shares of the same class acquired at a later time.
(d) Where the Trustees acquire Shares to be held as Plan Shares and some
of those Shares carry rights not carried by every other Share such Shares
shall so far as practicable be appropriated pro-rata to each Eligible
Employee entitled to an Appropriation of Plan Shares on the relevant
Appropriation Date. Plan Shares shall rank pari passu with all other shares
of the same class.
(e) On the Appropriation Date the Trustees shall appropriate to each
Eligible Employee such number of Shares as is obtained by dividing
(i) the product of that Eligible Employee's Base Salary and
the Participation Level by
(ii) the Relevant Value and
21
(iii) rounding the resultant number of Shares down to
the next nearest whole number of Shares.
(f) Shares appropriated to Eligible Employees pursuant to Rule
4(e) shall be appropriated at the Relevant Value.
(g) The Trustees shall as soon as practicable notify each
Eligible Employee to whom Plan Shares have been appropriated of:
(i) the number and description of the Plan Shares;
(ii) their Relevant Value; and
(iii) their Appropriation Date.
5 Limits on Appropriations of Plan Shares
No Eligible Employee shall be entitled to have Shares appropriated to the
extent that the aggregate of their Initial Market Value and the Initial
Market Value of all other Shares appropriated to him under this Plan during
that Year of Assessment would exceed the limit imposed for the time being
in paragraph 30(3) of Schedule 9 to the Act. For this purpose a
Participant's salary shall be where expressed in a currency other than
sterling converted by taking the United Kingdom sterling equivalent of such
currency (ascertained by taking the highest buying rate of the spread for
that day shown in the Financial Times) on the Working Day immediately
preceding the Appropriation Date. If the Financial Times shall not be
published for that day then the United Kingdom sterling equivalent shall be
ascertained at the rate of exchange ruling in London at or about 11.00 am
on the Working Day immediately preceding the Appropriation Date.
6 Restrictions on Dealings in Shares
(a) Except as provided in Rule 7 below the Trustees:
(i) shall not dispose of any Plan Shares (whether by
transfer to a Participant or otherwise) before the expiry of the
Retention Period;
(ii) subject to (i) above shall not dispose of any Plan
Shares before the Release Date except:
(aa) pursuant to a direction given by or on
behalf of the Participant or any person in whom the
beneficial interest in his Plan Shares is for the time being
vested; and
(bb) by any transaction which would not involve
a breach of the Participant's obligations under Rules
6(b)(iii) and (iv) below;
(iii) shall at all times deal with any right conferred
in respect of a Participant's Plan Shares to be allotted other
shares securities or rights of any description only pursuant to a
direction given by or on behalf of the Participant or any person
in whom the beneficial interest
22
in his Plan Shares is for the time being vested;
(iv) shall continue to hold the Plan Shares on behalf
of each Participant after the Release Date until such Participant
shall otherwise direct and upon receipt of such direction the
Trustees shall sell the Participant's Plan Shares or transfer
them into his name or the name of his nominee and the posting of
a cheque or the relevant share certificate as the case may be to
the Participant's last known address shall be a sufficient
discharge for the Trustees.
(b) Except as provided in Rule 7 below a Participant:
(i) shall permit his Plan Shares to remain in the
hands of the Trustees until the expiry of the Retention Period;
(ii) shall not assign charge or otherwise dispose of
his beneficial interest in his Plan Shares until the expiry of
the Retention Period;
(iii) shall not direct the Trustees to transfer the
ownership of his Plan Shares to him at any time before the
Release Date unless he shall pay to the Trustees before the
transfer takes place a sum equal to income tax at the basic rate
on the Appropriate Percentage of the Locked-in Value of the Plan
Shares at the time of the direction; and
(iv) shall not direct the Trustees to dispose of his
Plan Shares at any time before the Release Date in any other way
except by sale for the best consideration in money that can
reasonably be obtained at the time of the sale.
(c) The obligation placed on a Participant pursuant to Rule 6(b)(iii)
above shall not bind his personal representatives.
7 Permitted Dealings in Plan Shares
(a) Where it appears to the Trustees that directions to them will be
made under Rules 7(a) (i) to (iii) they may give to Participants such
notices and information as they in their absolute discretion deem
appropriate and a Participant notwithstanding Rules 6(a) and (b) above:
(i) may direct the Trustees to accept an offer for any of his
Plan Shares in the circumstances mentioned in paragraph 1(1)(a), (b),
(c) and (cc) of Schedule 10 to the Act; and
(ii) may direct the Trustees to agree to a transaction
affecting his Plan Shares if the transaction would be entered into
pursuant to a compromise, arrangement or plan applicable to or
affecting:
(aa) all the ordinary share capital of the Company or,
as the case may be, all the shares of the class in question;
or
23
(bb) all the Shares or the shares of the class in
question which are held by a class of shareholders
identified otherwise than by reference to their employment
or their participation in any other plan which is approved
under Schedule 9 to the Act or this Plan; and
(iii) may direct the Trustees to accept an offer of cash,
with or without other assets, for his Plan Shares if the offer
forms part of a general offer which is made to all holders of
shares of the same class as himself or of other shares in the
Company and which is made in the first instance on a condition
such that if it is satisfied the person making the offer will
have Control of the Company; and
(iv) may direct the Trustees (but only if the Trustees are
able to do so and signify their consent accordingly) after the
expiry of the Retention Period to sell the beneficial interest in
his Plan Shares to the Trustees for the same consideration as in
accordance with Rule 6(b)(iv) above would be required to be
obtained for the Plan Shares themselves.
(b) Where an offer is made or a compromise, arrangement or plan is
proposed, whether or not falling within Rule 7(a) conferring any
rights upon Participants to receive additional securities, the
Trustees shall:
(i) allocate such rights among the Participants concerned
on a proportionate basis and if such allocation shall give rise
to a right in respect of a security shall round such allocation
down to the next whole security;
(ii) use their best endeavours to sell any rights which are
not allocated and distribute the net proceeds of sale (after
deducting therefrom any expenses of sale and any taxation which
may be payable by the Trustees in respect thereof)
proportionately among Participants whose allocation was rounded
down.
8 Receipts by Trustees
Subject to their obligations under Rule 10 and Rule 13 below and to any
such direction as is referred to in paragraph 4(2) of Schedule 10 to the
Act the Trustees shall pay or transfer to the Participant any money or
money's worth other than money or money's worth of (Pounds)3 or less
received by them in respect of or by reference to, any of his Shares other
than money's worth consisting of "new shares" as defined in paragraph 5(3)
of Schedule 10 to the Act.
9 Company reconstruction
(a) Where the Company allots any new securities by way of
capitalisation to the Trustees in respect of any Participant's Plan
Shares the Trustees shall:
(i) allocate such securities amongst the Participants concerned
on a proportionate basis and if such allocation shall give rise to
a fraction of a security shall round down to the next whole
security; and
24
(ii) use their best endeavours to sell any securities which are
not allocated and distribute the net proceeds of sale (after
deducting therefrom any expenses of sale and any taxation which
may be payable by the Trustees in respect thereof)
proportionately amongst the Participants whose allocation was
rounded down.
(b) Where the Company makes an offer or invitation conferring any
rights upon its members to acquire against payment additional
securities in the Company the Trustees shall:
(i) allocate such rights amongst the Participants concerned on
a proportionate basis and, if such allocation shall give rise to
a right in respect of a fraction of a security shall round such
allocation down to the next whole security;
(ii) use their best endeavours to sell any rights which are not
allocated and distribute the net proceeds of sale (after
deducting therefrom any expenses of sale and any taxation which
may be payable by the Trustees in respect thereof)
proportionately amongst the Participants whose allocation was
rounded down;
(iii) comply with any direction from the Participant concerning
the exercise or sale of any rights attributable to that
Participant's Plan Shares provided that the Trustees shall not be
required to exercise any such rights except to the extent that
they have been provided with the full amount payable on such
exercise either by the Participant concerned or with his
authority out of the net proceeds of the sale nil paid of another
part of the rights attributable to his Plan Shares and provided
also that the Trustees may ignore and take no action in respect
of any direction from a Participant which is received by them
less than seven days before the last date for acceptance and
payment of the rights.
(c) Where the Trustees receive any securities which consist of "new
shares" as defined in paragraph 5(3) of Schedule 10 to the Act in
relation to any of a Participant's Plan Shares, then the Trustees
shall allocate the securities to the Participant by reference to the
relative times of the Appropriation of his Plan Shares and, if any
such allocation should give rise to a fraction of a security, the
Trustees shall subject to the Act round such allocation up or down to
the next whole security as they in their absolute discretion think
fit and any such new shares allocated as aforesaid shall be deemed to
have been appropriated to the Participant on the day when the original
holding was appropriated to him and shall be held by the Trustees on
the same terms provided that this Rule shall apply subject to the
restrictions contained in paragraph 5(2) of Schedule 10 to the Act.
10 Payments of Dividends
Any dividends paid by the Company to the Trustees in respect of Plan Shares
shall be forwarded as soon as practicable to the Participants on whose
behalf the Trustees hold such Plan Shares together with particulars of the
related credit.
25
11 Voting Rights
In the event of a general meeting of the stockholders of the Company or any
class meeting the Trustees shall notify each Participant of any resolution
on which holders of any Shares held on his behalf are entitled to vote and
shall invite the Participant to direct the Trustees as to how they should
vote on his behalf subject to any restrictions which may be imposed by the
Act. The Trustees shall not be obliged to attend and may only attend and
vote on a show of hands if all specific directions received from
Participants in respect of a particular resolution are identical and on a
poll shall vote or lodge proxy cards only in accordance with any directions
of the Participants in respect of any Shares which directions must have
been returned to the Trustees in accordance with the instructions
accompanying the notification. In the absence of any such direction the
Trustees shall abstain from voting.
12 Rights of Employees
Participation in this Plan is a matter entirely separate from any pension
right or entitlement which the Eligible Employee may have and from his
terms or conditions of employment and participation in the Plan shall in no
respects whatever affect in any way his pension rights or entitlement or
terms or conditions of employment and in particular (but without limiting
the generality of the foregoing words) any Eligible Employee who leaves the
employment of the Company or a Participating Company shall not be entitled
to any compensation for any loss of any right or benefit or prospective
right or benefit under this Plan which he might otherwise have enjoyed
whether such compensation is claimed by way of damages for wrongful or
unfair dismissal or other breach of contract or by way of compensation for
loss of office or otherwise howsoever.
13 Duty to Account for PAYE etc
(a) Where the Trustees receive a sum of money which constitutes (or
forms part of):
(i) the proceeds of a disposal of Plan Shares falling before
the Release Date; or
(ii) a Capital Receipt falling within Rule 8 above then
in accordance with the provisions of paragraph 7 of
Schedule 10 to the Act they shall pay out of that sum of money to:
(i) the Participating Company of which the Participant is a
director or employee at the time of the receipt or if more than one such
one of them as the Board of Inland Revenue may direct pursuant to
paragraph 7(3) of Schedule 10 to the Act; or
(ii) such other company as may be directed by the Board of
Inland Revenue pursuant to paragraph 7(5) of Schedule 10 to the Act
26
with the consent of the Trustees and the relevant companies
an amount equal to that on which income tax is payable and the
company to which the amount is paid shall then pay over that amount to
the Participant but in so doing shall make a PAYE deduction provided
that if the Participant shall not be employed by that company he shall
be treated as a former employee. If the Participant is not an
employee or director of any Participating Company or the Board of
Inland Revenue makes a direction under paragraph 7(4) of Schedule 10
to the Act the Trustees shall pay over the amount to the Participant
but in so doing shall deduct United Kingdom income tax at the basic
rate for the time being in force on an amount equal to that on which
income tax is payable.
(b) Where the Trustees receive from a Participant who has directed
them to transfer the ownership of his Plan Shares to him at any time
before the Release Date the sum calculated in accordance with Rule
6(b)(iii) above that sum shall be treated as a PAYE deduction by the
Trustees.
(c) Where a Participant disposes of his beneficial interest in any of
his Plan Shares to the Trustees and the Trustees are deemed by section
186(9) of the Act to have disposed of the Shares in question this Rule
13 shall apply as if the consideration payable by the Trustees to the
Participant on disposal had been received by the Trustees as the
proceeds of disposal of shares falling within section 186(4) of the
Act.
(d) The Trustees shall maintain records of all payments to the
Company and sums deducted by the Trustees falling within Rule 13(a)
and of all sums received from Participants falling within Rule 13(b).
(e) The Trustees shall inform each Participant in writing of any
facts known to them which are relevant to determining his liability
(if any) to income tax under Schedule E by reason of an occurrence of
an event relating to any Plan Shares appropriated to him.
14 Notices
Any notice which the Trustees are required to give to any Participant in
pursuance of this Plan shall be sufficiently given if delivered to him by
hand or forwarded to him with his earnings if he is an Eligible Employee or
in any case if sent through the post in a prepaid cover addressed to the
Participant at his address last known to the Trustees including any address
supplied by the Company or a Subsidiary as being his address. Any notice
required to be given to the Company a Subsidiary or the Trustees shall be
properly given if sent to or delivered to the secretary of the Company the
secretary of the Subsidiary concerned or the first named Trustee at their
respective registered or principal offices or in the case of an individual
Trustee his last known address.
15 Disputes
If any matter arises on or in connection with this Plan or its operation
for which specific provision is not made in the Rules or in the deed to
which they are scheduled or in any deed supplemental to it such matter
shall be resolved dealt with or provided
27
for in such manner as the Committee shall in its absolute discretion
consider appropriate after taking into account the respective interests of
the Company and of the Participants.
16 Alterations
No modification alteration or amendment to these Rules shall be made except
in accordance with Clause 20 of the deed.
28
SCHEDULE 3
(PART A)
MORGAN STANLEY UK GROUP
PROFIT SHARING PLAN
LETTER OF OFFER
(to be printed on Morgan Stanley letterhead)
DATE:
TO:
You are invited to participate in Morgan Stanley UK Group Profit Sharing Plan
("the Plan") with effect from [ ].
The Plan is approved by the Board of Inland Revenue under the provisions of the
Income and Corporation Taxes Act 1988 ("the Act").
It is a condition of participation in the Plan that you enter into a contract
with the Company in the terms of paragraph 3 of the enclosed Letter of
Acceptance, which complies with the provisions of paragraph 2(2) of Schedule 9
to the Act. The Letter of Acceptance should be returned to [ ] no later
than [ ]
A number of other matters are referred to in this letter which are fully covered
in the explanatory documentation.
SIGNED:
(for and on behalf of
[ ])
29
SCHEDULE 3
(PART B)
MORGAN STANLEY UK GROUP
PROFIT SHARING PLAN
LETTER OF ACCEPTANCE
To: The Directors of Morgan Stanley, Dean Witter, Discover & Co.
For: The Trustees of the Morgan Stanley UK Group Profit Sharing Plan
("the Trustees")
From: Name (surname) :
(forename) :
Personnel No :
Location :
Extension No :
1 I have received the Company's letter dated 19 and
the explanatory booklet explaining the Morgan Stanley UK Group Profit
Sharing Plan ("the Plan").
2 I accept the invitation to participate in the Plan and agree to be bound by
the Rules (including any amendments or additions which may subsequently be
made thereto).
3 As required by the conditions of the trust deed constituting the Plan and
in consideration of the right to participate in the Plan and receive Plan
Shares I bind myself in contract with the Company and I agree to comply
with the provisions of paragraph 2(2) of Schedule 9 to the Income and
Corporation Taxes Act 1988 (as amended from time to time) ("the Act") in
respect of all Plan Shares held by the Trustees for me so that in
particular:
(a) Subject to the Rules of the Plan I agree my Plan Shares shall remain
in the hands of the Trustees until the expiry of the Retention Period
as defined in those Rules and I agree not to assign charge or
otherwise dispose of my beneficial interest in any Plan Shares until
the expiry of such period;
(b) If it is permitted under the Rules of the Plan for me to direct the
Trustees to transfer the ownership of any Plan Shares to me before the
applicable Release Date I will pay to the Trustees before any such
transfer takes place a sum equal to income tax at the basic rate on
the Appropriate
30
Percentage of the Locked-in Value of such Plan Shares (as defined in
the Act and explained in the explanatory booklet) at the time of such
direction as notified to me by the Trustees;
(c) If it is permitted under the Rules of the Plan for me to direct
the Trustees to dispose of any Shares appropriated to me at any time
before the applicable Release Date I will not so direct the Trustees
to sell other than for the best cash price then reasonably obtainable.
4 I accept that any dividend tax credit voucher (made out in the Trustees'
name but representing the tax credit to which I am beneficially entitled)
received by me in respect of any of my Shares will be in full satisfaction
of any rights I have to the voucher under the Act.
5 I authorise and require the Trustees subject to any subsequent direction
which I may give and subject to my leaving the Company other than by
retirement to continue to hold my Plan Shares after the Release Date as
unrestricted shares.
6 I undertake to notify the Trustees of any change in my home/external
address.
7 I confirm that I am to the best of my knowledge and belief resident/not
resident* for tax purposes in the United Kingdom and undertake to notify
you immediately of any event which may result in a change in my residential
status for tax purposes.
Signed:
Dated:
Note: This letter should be returned to [ ]
* delete whichever is not applicable.
31
SCHEDULE 4
THIS DEED is made the day of One thousand nine hundred and
BETWEEN
(1) Morgan Stanley, Dean Witter, Discover & Co. whose registered office is at
1209 Orange Street, Wilmington, Delaware, DE 19801 (the "Company");
(2) Noble Lowndes Settlement Trustees Limited whose registered office is at PO
Box 144 Norfolk House Wellesley Road Croydon CR9 3EB ("the Trustees"); and
(3) whose registered office is at
("the Subsidiary").
WHEREAS
(A) This Deed is supplemental to a Deed dated
and made between the Company and the Trustees (hereinafter called the
"Principal Deed") whereby the Company established Morgan Stanley UK Group
Profit Sharing Plan (hereinafter called "the Plan").
(B) The Subsidiary is controlled by the Company within the meaning of section
840 of the Income and Corporation Taxes Act 1988.
(C) In pursuance of the power contained in Clause 10 of the Principal Deed the
Company has agreed that subject to its entering into this Supplemental Deed
the Subsidiary may become a Participating Company for the purposes of the
Plan.
32
NOW THIS DEED WITNESSETH as follows:
1. The Company hereby agrees that the Subsidiary shall be a Participating
Company for the purposes of the Plan provided that it shall be deemed not
to be such a Participating Company for the purposes of the operation of
Rules 3 and 4 of the Plan as from the date it ceases to be a Subsidiary
within the meaning of the Plan or as from such other date as the Company
may by deed declare.
2. The Subsidiary hereby covenants with the Company and with the Trustees that
subject to the proviso to Clause 1 above it will observe and perform all
covenants conditions and provisions contained in the Principal Deed and all
the provisions of the Plan applicable to Participating Companies.
IN WITNESS whereof the parties have caused this Deed to be executed the day and
year first before written
33