LR 9.4 Documents requiring prior approval

1. (1)

   This rule applies to the following schemes of a listed company incorporated in the United Kingdom and of any of its major subsidiary undertaking (even if that major subsidiary undertaking is incorporated or operates overseas):

   1. (a)

      an employees' share scheme if the scheme involves or may involve the issue of new shares or the transfer of treasury shares; and

   2. (b)

      a long-term incentive scheme in which one or more directors of the listed company is eligible to participate.

2. (2)

   The listed company must ensure that the employees' share scheme or long-term incentive scheme is approved by an ordinary resolution of the shareholders of the listed company in general meeting before it is adopted.

LR 9.4.1 R does not apply to the following long-term incentive schemes:

1. (1)

   an arrangement where participation is offered on similar terms to all or substantially all employees of the listed company or any of its subsidiary undertakings whose employees are eligible to participate in the arrangement (provided that all or substantially all employees are not directors of the listed company); and

2. (2)

   an arrangement where the only participant is a director of the listed company (or an individual whose appointment as a director of the listed company is being contemplated) and the arrangement is established specifically to facilitate, in unusual circumstances, the recruitment or retention of the relevant individual.

For a scheme referred to in LR 9.4.2R (2), the following information must be disclosed in the first annual report published by the listed company after the date on which the relevant individual becomes eligible to participate in the arrangement:

1. (1)

   all of the information prescribed in LR 13.8.11 R;

2. (2)

   the name of the sole participant;

3. (3)

   the date on which the participant first became eligible to participate in the arrangement;

4. (4)

   an explanation of why the circumstances in which the arrangement was established were unusual;

5. (5)

   the conditions to be satisfied under the terms of the arrangement; and

6. (6)

   the maximum award(s) under the terms of the arrangement or, if there is no maximum, the basis on which awards will be determined.

1. (1)

   This rule applies to the grant to a director or employee of a listed company or of any subsidiary undertaking of a listed company of an option to subscribe, warrant1 to subscribe or other similar right to subscribe for shares in the capital of the listed company or any of its subsidiary undertakings.

2. (2)

   A listed company must not, without the prior approval by an ordinary resolution of the shareholders of the listed company in a general meeting, grant the option, warrant or other right if the price per share payable on the exercise of the option, warrant1 or other similar right to subscribe is less than whichever of the following is used to calculate the exercise price:

   1. (a)

      the market value of the share on the date when the exercise price is determined; or

   2. (b)

      the market value of the share on the business day before that date; or

   3. (c)

      the average of the market values for a number of dealing days within a period not exceeding 30 days immediately before that date.

LR 9.4.4 R does not apply to the grant of an option to subscribe, warrant to subscribe or other similar right to subscribe for shares in the capital of a listed company or any of its subsidiary undertakings:

1. (1)

   under an employees' share scheme if participation is offered on similar terms to all or substantially all employees of the listed company or any of its subsidiary undertakings whose employees are entitled to participate in the scheme; or

2. (2)

   following a take-over or reconstruction, in replacement for and on comparable terms with options to subscribe, warrants to subscribe or other similar rights to subscribe held immediately before the take-over or reconstruction for shares in either a company of which the listed company thereby obtains control or in any of that company's subsidiary undertakings.