MORGAN STANLEY
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OF THE
MORGAN STANLEY UK SHARE OWNERSHIP PLAN
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12 October 2007
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HMRC Ref
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A100879
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Contents
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Page
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Part A - Definitions
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2
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1
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Meaning of words used
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2
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2
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Operation of the Plan
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4
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3
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Joining the Plan
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4
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4
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Bonus Shares
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6
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5
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Purchased Shares
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8
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6
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Dividends
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11
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7
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General rules about Shares
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14
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8
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Leaving Employment
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16
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9
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General rules relating to the Plan
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17
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10
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Assets of the Plan
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19
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11
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Trustees
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20
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12
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Participating Companies
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21
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13
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Changing the Rules
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22
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14
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Termination
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22
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15
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Governing Law
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23
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(1)
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Morgan Stanley International Incorporated a company incorporated in
Delaware of 1585 Broadway, New York, New York (the
“Company”) and
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(2)
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Hill Samuel ESOP Trustees Limited of 25 Gresham Street, London, EC2V
7HN (the “Trustees”)
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1
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Meaning of words used
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2
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Operation of the Plan
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2.1
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Purpose of the Plan
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2.2
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Time of Operation
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3
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Joining the Plan
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3.1
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Employees to be invited
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3.1.1
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are UK resident taxpayers (within the meaning of paragraph 8(2) of
Schedule 2); and
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3.1.2
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have been employees of a qualifying company (within the meaning of
paragraph 17 of Schedule 2) throughout any qualifying period of service
set under Rule
3.5.
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3.2
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Prohibited invitations
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3.2.1
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who is to participate at the same time in another Share Incentive Plan
approved under Schedule 2 which has been established by the Company or
a connected company (within the meaning of paragraph 18(3) of Schedule
2) or would have so participated but for the failure to meet a
performance target; or
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3.2.2
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who is excluded from participating under paragraph 19 of Schedule 2 (no
material interest requirement).
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3.3
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Bonus share invitations - Employees under
notice
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3.4 |
Form of invitation and application
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3.5
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Qualifying period of service
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3.6
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Submission of Applications
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4
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Bonus Shares
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4.1
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Limit
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4.1.1
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If the Plan is operated to provide Bonus Shares, Bonus Shares awarded
to each Employee participating in the Plan must not have an initial
market value of more than £3,000 in any tax year, or any greater
amount specified for the purposes of paragraph 35(1) of Schedule
2.
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4.1.2
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Where, in a tax year, an Employee participating in the Plan has been
awarded Bonus Shares and has, in the same tax year, been awarded Bonus
Shares under any Connected Share Incentive Plan, those Bonus Shares
will count, for the purposes of this Rule
4.1
as if they were Bonus Shares awarded under this Plan.
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4.1.3
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“Initial market value” means the Market Value of the Bonus
Shares on the Award Day and, the market value of Shares subject to
restrictions or risk of forfeiture shall be determined as if there were
no restriction or risk.
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4.2
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Terms relating to Bonus Shares
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4.2.1
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the Award System for that operation of the Plan;
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4.2.2
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the Holding Period, which must be at least three years but not more
than five years beginning with the Award Day, must be the same for all
Bonus Shares in an award and cannot be increased once that award has
been made; and
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4.2.3
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any forfeiture provisions under Rule
4.3.
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4.3
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Forfeiture of
Bonus Shares
(not currently used)
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4.4
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Payments by Participating Companies and acquiring
Shares
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4.5
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Awards of Bonus Shares
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4.6 |
Award Eligibility Requirement
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4.7
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Notification by Trustees
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4.8
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Transfer of legal title
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5
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Purchased Shares
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5.1
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Application for Purchased Shares
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5.2
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Amount of Contributions
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5.2.1
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The Plan Administrators will determine the maximum Contribution which
will apply in relation to that operation of the Plan which will not be
more than the lower of:
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(i)
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10% of Salary for that tax year; or
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(ii)
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£1,500 in any tax year; or
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(iii)
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a greater percentage or amount specified for the purposes of paragraph
46 of Schedule 2 from time to time.
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5.2.2
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If Contributions exceed these limits, the excess amount will be repaid
to the Participant as soon as practicable (after deducting any income
tax and national insurance contributions due).
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5.2.3
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If a Participant makes Contributions under this Plan in a tax year and,
in the same tax year, has made contributions under any Connected Share
Incentive Plan, those Contributions will count, for the purposes of
this Rule
5.2, as if they were Contributions under this Plan.
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5.3
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Minimum Contribution
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5.4
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Limit on Purchased Shares
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5.5
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Scaling down
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5.5.1
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reduce the excess of Contributions over any set minimum amount for
Contributions proportionately; then
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5.5.2
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reduce all monthly Contributions to any set minimum amount for
Contributions; then
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5.5.3
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select applications to contribute the minimum amount for Contributions
by lot.
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5.6
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Holding Contributions
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5.6.1
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a person falling within section 840A(1)(b) of the Taxes Act; or
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5.6.2
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a building society; or
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5.6.3
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a firm falling within section 840A(1)(c) of the Taxes Act.
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5.7
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Repayment of Contributions
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5.7.1
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they receive a termination notice under Rule
14.1
(Termination); or
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5.7.2
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HMRC notifies the Company that it has withdrawn the approval of the
Plan under Schedule 2; or
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5.8
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Excess Contributions
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5.9
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Stopping and re-starting Contributions
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5.10
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Varying Contributions
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5.11
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Withdrawal from agreement to make Contributions
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5.12
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Allocating shares
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5.12.1
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The Trustees must allocate Purchased Shares to the Participants by a
date set by the Trustees. This date must be not later than 30 days
after the last day on which the relevant deduction of Contributions
takes place.
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5.12.2
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If all the Purchased Shares to be allocated to Employees on that
occasion are purchased by the Trustees on the date of allocation or
over five or fewer consecutive dealing days ending on the date of
allocation or the immediately preceding dealing day, and provided the
Company is quoted on NYSE and/or the Daily Official List of the London
Stock Exchange, the number of Shares allocated to each Participant will
be calculated using the average price actually paid by the Trustees for
the Shares.
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5.12.3
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If all the Purchased Shares to be allocated to Employees on that
occasion are not purchased by the Trustees on the date of allocation or
over five or fewer consecutive dealing days ending on the date of
allocation or the immediately preceding dealing day, the number of
Shares allocated to each Participant will be calculated using the
Market Value on the date of allocation.
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5.12.4
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All Purchased Shares must be allocated on the same date.
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5.13
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Allocation Eligibility Requirement
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5.14
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Notification by Trustees
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5.15
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Access to Purchased Shares
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6
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Dividends
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6.1
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Dividend Shares
(not currently used)
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6.1.1
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The Plan Administrators may from time to time decide that instead of
Participants receiving cash dividends:
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(i)
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the Trustees must re-invest cash dividends they receive in respect of
Plan Shares in additional Shares to be held on behalf of Participants;
or
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(ii)
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the Trustees must re-invest cash dividends as set out in Rule
6.1.1
but only in respect of Plan Shares of Participants who have chosen this
by completing the relevant section on the application.
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6.1.2
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The total amount so reinvested cannot exceed £1,500 in each tax
year (or such greater amount specified for the purposes of paragraph
64(1) of Schedule 2).
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6.1.3
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If a Participant reinvests an amount under this Rule
6.1
in a tax year and, in the same tax year, has reinvested an amount in
dividend shares under any Connected Share Incentive Plan, that amount
will count, for the purposes of this Rule
6.1.2, as if it were reinvested under this Plan.
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6.1.4
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If the Plan Administrators have not made such decisions, or to the
extent that the cash dividends exceed the limit, the Trustees must pay
over cash dividends to the relevant Participant as soon as
practicable.
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6.2
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Allocating Dividend
Shares
(not currently used)
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6.2.1
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If all the Dividend Shares to be allocated to Employees on any occasion
are purchased by the Trustees on the date of allocation or over five or
fewer consecutive dealing days ending on the date of allocation or the
immediately preceding dealing day, and provided the Company is quoted
on NYSE and/or the London Stock Exchange then the number of Dividend
Shares allocated to each Participant will be calculated using the
average price actually paid by the Trustees for the Shares.
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6.2.2
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If all the Dividend Shares to be allocated to Employees on any occasion
are not purchased by the Trustees on the date of allocation or over
five or fewer consecutive dealing days ending on the date of allocation
or the immediately preceding dealing day, then the number of Dividend
Shares allocated to each Participant will be calculated using the
Market Value on the date of allocation.
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6.2.3
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Dividend Shares must be allocated on or before a date set by the
Trustees. This date must be no later than 30 days after the date they
receive cash dividend.
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6.3
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Cash dividends carried forward and
paid
(not currently used)
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6.3.1
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which are not reinvested in Dividend Shares within 3 years of payment
of the dividend; or
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6.3.2
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if the Participant ceases to be in Employment; or
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6.3.3
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if the Trustees receive a termination notice under Rule
14.1.
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6.4
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Notification
(not currently used)
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6.5
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Rights and restrictions
(not currently used)
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6.6
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Transfer of legal title
(not currently used)
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6.7
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Other dividends
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6.8 |
Scrip dividends
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7
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General rules about
Shares
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7.1
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Listing
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7.2
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Rights
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7.3
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Acquisition of Shares
(not currently used)
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7.4
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Restrictions on disposals of Shares
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7.5
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Voting
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7.6
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Offers
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7.7
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Fractional entitlements
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7.8
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Capital Receipts and other amounts
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7.9
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Tax liabilities
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8
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Leaving Employment
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8.1
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Leaving Employment
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8.1.1
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Subject to Rule
4.3
(dealing with forfeiture), if a Participant leaves Employment, his Plan
Shares will cease to be subject to the Plan.
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8.1.2
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Subject to Rule
4.3
(dealing with forfeiture), unless the Plan Administrators decide
otherwise, the Plan will operate on the basis that if a Participant
leaves Employment for any reason, the Trustees will transfer the
Participant’s Plan Shares to the Participant or as he may direct
(or, if the Participant has died, to the personal representatives) as
soon as reasonably practicable.
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8.1.3
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If a Participant leaves Employment during the acquisition period
relating to an allocation of Purchased Shares, he shall:
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(i)
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for the purpose of awards of Purchased Shares be treated as ceasing to
be in Employment immediately after the allocation of Purchased Shares;
and
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(ii)
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for the purpose of determining when his Plan Shares cease to be subject
to the Plan, be treated as ceasing to be in Employment immediately
after the allocation of Purchased Shares.
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8.1.4
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For the purposes of this Rule
8.1“acquisition period” has the meaning given to it in
paragraph 97(3) of Schedule 2.
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8.2
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Tax free withdrawal of Plan Shares
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8.2.1
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because of injury or disability;
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8.2.2
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on being dismissed by reason of redundancy;
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8.2.3
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by reason of a transfer to which the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (S.I. 1981/1794)
applies;
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8.2.4
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if the relevant employment is employment by an associated company (see
paragraph 95(2) of Schedule 2), by reason of a change of control or
other circumstances ending that company’s status as an associated
company;
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8.2.5
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by reason of the Participant’s retirement on or after reaching
the specified retirement age of 50; or
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8.2.6
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on the Participant’s death.
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9
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General rules relating to the Plan
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9.1
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Notices
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9.2
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Documents sent to Shareholders
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9.3
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Plan Administrators’ and Trustees’
decisions
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9.4
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Regulations
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9.5
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Terms of employment
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9.5.1
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For the purposes of this Rule
9.5, “Employee” means any Participant, any Employee (within
the meaning of Rule
1) or any other person.
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9.5.2
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This Rule
9.5
applies during an Employee’s employment and after the termination
of an Employee’s employment, whether or not the termination is
lawful.
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9.5.3
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Nothing in the Rules or the operation of the Plan forms part of the
contract of employment of an Employee. The rights and obligations
arising from the employment relationship between the Employee and the
Company are separate from, and are not affected by, the Plan.
Participation in the Plan does not create any right to, or expectation
of, continued employment.
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9.5.4
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Operation of the Plan on a particular basis in any year does not create
any right to or expectation of operation of the Plan or the award or
allocation of Plan Shares on the same basis, or at all, in any future
year. In particular, a company which has
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9.5.5
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The terms of the Plan do not entitle the Employee to the exercise of
any discretion in his favour.
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9.5.6
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Without prejudice to an Employee’s right to receive any Bonus
Shares awarded to him or any Purchased Shares or Dividend Shares
allocated to him subject to and in accordance with the express terms of
the Rules, no Employee has any rights in respect of the exercise or
omission to exercise any discretion, or the making or omission to make
any decision, relating to the Plan. Subject to the provisions of
Schedule 2, any and all discretions, decisions or omissions relating to
the invitation and application of Employees to join the Plan on any
particular occasion may operate to the disadvantage of the Employee,
even if this could be regarded as in breach of any implied term between
the Employee and his employer, including any implied duty of trust and
confidence. Any such implied term is excluded and overridden by this
Rule
9.5
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9.5.7
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Participation in the Plan is permitted only on the basis that the
Participant accepts all the provisions of the Rules, including this
Rule
9.5. By participating in the Plan, an Employee waives all rights under
the Plan, other than the right to receive any Bonus Shares awarded to
him or any Purchased Shares or Dividend Shares allocated to him subject
to and in accordance with the express terms of the Rules, in
consideration for, and as a condition of, his participation in the
Plan.
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9.5.8
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Nothing in this Plan confers any benefit, right or expectation on a
person who is not an Employee. No such third party has any rights under
the Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this Plan. This does not affect any other right or remedy of a third
party which may exist.
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9.5.9
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Each of the provisions of this Rule
9.5
is entirely separate and independent from each of the other provisions.
If any provision is found to be invalid then it will be deemed never to
have been part of these Rules and to the extent that it is possible to
do so, this will not affect the validity or enforceability of any of
the remaining provisions.
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9.6
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Beneficiary who is incapable
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9.7
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Setting up costs
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9.8
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Errors and omissions
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9.9
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Data protection
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9.9.1
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administering and maintaining records;
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9.9.2
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providing information to the Company, any Participating Company, the
Trustees, registrars, brokers or third party administrators of the
Plan;
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9.9.3
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providing information to future purchasers of the Company or the
business in which the Participant works;
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9.9.4
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transferring information about the Participant to a country or
territory outside the European Economic Area that may not provide the
same statutory protection for the information as the
Participant’s home country.
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10
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Assets of the Plan
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10.1
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Assets held on trust
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10.2
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Use of assets
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10.3
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Plan expenses
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10.4
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Trustees’ duties relating to Shares
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10.4.1
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if a Participant instructs this as described in Rule
7.7; or
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10.4.2
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to obtain sufficient funds to secure rights arising under a rights
issue affecting Plan Shares; or
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10.4.3
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to discharge PAYE obligations under Rule
7.9; or
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10.4.4
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if they receive a termination notice as described in Rule
14.1.
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10.5
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Trustees holding Shares
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11
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Trustees
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11.1
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Appointment and removal
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11.2
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Retirement
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11.3
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Exercise of powers
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11.4
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Trustees’ charges
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11.5
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Limit of Liability
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11.6
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Indemnity
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11.7
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Insurance
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11.8
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Personal Interest
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12
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Participating Companies
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12.1
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Inclusion in the Plan
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12.2
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Ceasing to participate
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12.2.1
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when it ceases to be a Subsidiary; or
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12.2.2
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if and during any times when the Plan Administrators decide that the
Plan will not apply to it. (But in making this decision the Plan
Administrators must ensure that the conditions in paragraph 10 of
Schedule 2 are still satisfied. These conditions are that the Plan must
not have any features which may discourage certain employees from
participating and that the Plan cannot benefit mainly directors or
higher paid employees).
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13
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Changing the Rules
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13.1
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Before HMRC approval
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13.2
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After HMRC approval
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14
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Termination
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14.1
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Termination notice
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14.1.1
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HMRC;
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14.1.2
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the Trustees; and
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14.1.3
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all individuals who have Plan Shares, and all Employees who have
returned valid application forms but have not been awarded or allocated
any Shares.
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14.2
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Effect of termination notice
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14.3
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Surplus Assets
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14.4 |
Perpetuity Period
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15
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Governing Law
|
Executed as a deed by
Morgan Stanley
International Incorporated by:
Authorised Signatory
Authorised Signatory
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THE COMMON SEAL of Hill Samuel
ESOP Trustees Limited
was put onto
this deed in the presence of:
Director
Secretary
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