UK LTIP VESTING GUIDANCE NOTES 2014

Transcription

1 UK LTIP VESTING GUIDANCE NOTES 2014 Shares which were allocated to you under the Johnson Matthey Plc Long Term Incentive Plan in July 2011 are due to vest on Wednesday 23 July 2014 (the Vesting Date ). This document explains what action you need to take prior to the Vesting Date. It is important that you read this document before you take any action. As part of the vesting process, you will need to give an instruction to Computershare, our share plan administrator. You can only do this by logging on to the Johnson Matthey Employee Share Plan website at You may wish to print this document before proceeding as you may find it useful to refer to whilst you are submitting your instruction to Computershare. Section 9 in Part A of this document describes how to submit your instruction. IMPORTANT: YOU MUST GIVE YOUR INSTRUCTION TO COMPUTERSHARE BEFORE 9.00AM (UK TIME) ON FRIDAY 18 JULY CONTENTS This document is split into two sections as listed below. It is important that you read both sections. Part A Part B General Information on the LTIP Vesting - this explains the choices you have regarding your vested shares, tax information and information on the Johnson Matthey Plc Share Dealing Code etc. Information on the Vested Share Account - this is relevant to you if you are thinking of retaining some or all of your shares on the Vesting Date

2 PART A 1. What choices do I have regarding my shares on the Vesting Date? You have four choices regarding your shares on the Vesting Date: Sell All Sell to Cover Sell Specific Retain All (i) (ii) Sell All Shares All of your shares will be sold. Sale proceeds after deduction of income tax, national insurance contributions ( NIC ) and dealing fees will be remitted by Computershare to your personal bank account. Sell to Cover - sell a sufficient number of shares to cover income tax and NIC and retain the balance of shares A sufficient number of shares will be sold to cover your income tax and NIC liability. As your sale proceeds are unlikely to exactly match your income tax and NIC liability, it is likely that there will be a small amount of residual sale proceeds to pay into your bank account, after deduction of dealing fees. Note: Possible deduction from August 2014 salary When calculating how many shares need to be sold to cover your income tax and NIC liability, Computershare will use the income tax rate they currently hold for you, which will be based on an estimation of your income levels for the tax year. As such, there is a possibility that additional tax may be due if your actual income is higher than the estimation. Where this is the case the additional tax will be deducted from your August salary by JOHNSON MATTHEY PLC Payroll. You have two choices regarding your retained shares. You can either: receive a share certificate which means your name will appear on Johnson Matthey Plc s share register. Your share certificate will be sent, at your own risk, to the address that Computershare hold for you. Please ensure this address is correct by clicking on the My Details tab and then Personal Details on the Johnson Matthey Employee Share Plan website; or put your shares into a Vested Share Account managed by Computershare ( VSA ). The shares will be held electronically by Computershare on your behalf. You will not receive a share certificate

3 (iii) Sell Specific - sell a sufficient number of shares to cover income tax and NIC, plus an additional number of shares, and retain the balance of shares You may want to sell enough shares to cover your income tax and NIC liability plus an additional number of shares and retain the balance of shares. When you submit your online instruction you will need to insert the number of shares you wish to sell but first you will need to calculate how many shares must be sold as a minimum to cover your income tax and NIC liability (for example, if you are a 40% tax payer you will need to sell 42% of your shares to cover your income tax (40%) and NIC (2%) liability). You can then choose to sell any number of shares above this amount. You will need to ensure sufficient additional shares are being sold to cover your dealing fees. As described earlier, if the taxable value of your vested shares takes you into a higher tax bracket, the shortfall in tax will be deducted from your August 2014 salary by Johnson Matthey Plc Payroll. You have two choices regarding your retained shares - receive a share certificate or put the shares into the VSA. If you choose to receive a share certificate, your certificate will be sent, at your own risk, to the address that Computershare hold for you. Please ensure this address is correct by clicking on the My Details tab and then Personal Details on the Johnson Matthey Employee Share Plan website. (iv) Retain all Shares If you would like to retain all of your shares on the Vesting Date you will need to self-fund your income tax and NIC liability. This liability can only be calculated after the Vesting Date using a specific share price on that date. On the day after the Vesting Date, you will receive an from the Group Reward Department confirming the amount you owe. You will need to transfer this amount promptly to Johnson Matthey Plc (by bank transfer). If you are a current employee you have two choices regarding your retained shares - receive a share certificate or put the shares into the VSA. If you choose to receive a share certificate, your certificate will be sent, at your own risk, to the address that Computershare hold for you. If you are a former employee, your retained shares will be registered in your name and you will receive a share certificate for these shares. The share certificate will be sent, at your own risk, to the address that Computershare hold for you. You are not able to put your shares into the VSA. If you are to receive a share certificate, please ensure the address that Computershare hold for you is correct by clicking on the My Details tab and then Personal Details on the Johnson Matthey Employee Share Plan website

4 2. What tax liabilities will I incur? Tax liabilities which arise on the Vesting Date An income tax and NIC liability will arise at vesting on all of your vested shares. This is the case whether or not you choose to sell all, some or none of your shares. If you choose to sell some or all of your shares, income tax and NIC will be deducted from your sale proceeds before they are remitted to your bank account. If you choose to retain all of your shares, you will be required to send prompt payment to Johnson Matthey Plc for the income tax and NIC liability. If you are selling some or all of your shares, Computershare will deduct income tax and NIC from your sale proceeds based on the rates they currently hold for you. However, the taxable value of your vested shares may take you into a new income tax bracket and in which case Computershare will have under-deducted income tax. If this happens, the difference will be deducted from your August 2014 salary by Johnson Matthey Plc Payroll. Details of the LTIP vesting will appear on your August 2014 payslip. Tax liabilities if you choose to retain some or all of your shares at vesting If you choose to retain some or all of your shares on the Vesting Date and sell them at a later date, you may be subject to capital gains tax when you come to sell them, subject to your annual exemption. Any dividend income received on retained shares may be subject to income tax. Both capital gains tax and income tax on dividend income are paid the via self-assessment tax return. Johnson Matthey Plc is not responsible for collecting these taxes. Further Tax Information Please refer to the UK Employee Tax Sheet for further information on your tax liabilities at vesting, on the tax consequences of selling shares after the Vesting Date and on the tax consequences of receiving dividend income. This can be found on the Johnson Matthey Employee Share Plan website ( under Company Info - Plan Documentation - LTIP Release July Employee Tax Sheets. Please note that if you are an internationally mobile participant, there may be further tax considerations not covered by these employee tax sheets. If you receive tax assistance from PWC, they will be able to advise you on these matters. These UK LTIP Vesting Guidance Notes and the UK Employee Tax Sheet are general guides only and do not constitute tax advice. If you are in any doubt about your individual tax position, you should seek your own tax advice

5 3. At what price will my shares be sold on the Vesting Date? If you choose to sell some or all of your shares on the Vesting Date, your shares will be sold at the volume weighted average price on the Vesting Date. This will be the average price at which all Johnson Matthey Plc shares are sold in the market over the full day. The sale price will be posted on the Johnson Matthey Employee Share Plan website, for information, by 10.00am (UK time) on Thursday 24 July 2014 (under My Holdings - Portfolio ). The sale price will also appear on your Advice Note which you will receive from Computershare on Thursday 24 July 2014 (via the Johnson Matthey Employee Share Plan website). 4. What fees will I incur if I sell some or all of my shares on the Vesting Date? If you choose to sell some or all of your shares, dealing fees of 0.25% of the gross sale proceeds (minimum 12.50) will be deducted by Computershare from your sale proceeds before they are remitted to your bank account. 5. When will I receive my sale proceeds? Sale proceeds (net of income tax, NIC and dealing fees) will be paid into your bank account by Computershare on Wednesday 30 July Into which bank account will my sale proceeds be paid? Computershare may already hold your bank account details and, if this is the case, these details will appear on the screen when you submit your instruction. If you would like your sale proceeds to be paid to an alternative bank account you will need to provide Computershare with your alternative bank account details as part of the online LTIP instruction process. Likewise, if Computershare do not hold any bank account details for you, you will need to provide these. Sale proceeds can only be paid into a bank account in your name (or in a joint name). You will be asked to confirm your bank account details/submit new bank account details as part of the online LTIP instruction process. 7. What happens if I am covered by the Johnson Matthey Plc Share Dealing Code? If you are automatically covered by the Johnson Matthey Plc Share Dealing Code, Johnson Matthey Plc will arrange for you to receive advance clearance for sales of vested shares which take place on the Vesting Date. Therefore, for sales of vested shares on the Vesting Date you do not need to seek specific clearance. This advance clearance will cover vested share sales on the Vesting Date only. It will not cover: any sales you make after the Vesting Date in respect of shares which you have retained either by way of a share certificate or in the VSA; or - 5 -

6 any additional transactions in Johnson Matthey Plc shares you may wish to undertake on or around the Vesting Date (for example, the exercise of options). You will need to seek separate clearance for these in the usual manner. Former employees are not subject to the Johnson Matthey Plc Share Dealing Code but they need to have regard to the insider dealing legislation and the market abuse regime. If you have any questions on the Johnson Matthey Plc Share Dealing Code please contact the Johnson Matthey Plc Company Secretarial Department on +44 (0) The Johnson Matthey Plc Share Dealing Code can be found by clicking on the Company Info tab and then Plan Documentation on the Johnson Matthey Employee Share Plan website ( 8. I have left Johnson Matthey - what choices do I have? If you have left Johnson Matthey and have retained a pro-rated share allocation which is due to vest on the Vesting Date, you have the four choices described in Section 1 above. If you sell some or all of your shares, your sale proceeds, after deduction of income tax and, if applicable, NIC, will be paid to your bank account. Johnson Matthey Plc has supplied withholding rates for leavers to Computershare using an estimated value of the vested shares. Income tax will be deducted at 20%, 40% or 45% depending on these estimated values. If you are a leaver, it is possible that this rate of deduction could be higher than your marginal rate of income tax. If income tax is over-deducted from your sale proceeds, it is your responsibility to recover the overpayment through completion of a self-assessment tax return or by contacting HM Revenue and Customs. If you choose a sell to cover transaction, Computershare will use the rate provided by Johnson Matthey Plc to determine how many shares to sell. Again, this rate could be higher than your marginal rate of tax. In the event that income tax is under-deducted, it is your responsibility to report the details of the tax paid on your self-assessment tax return. If you elect to sell a specific number of shares in accordance with Section 1(iii) above and the number of shares you choose to sell is insufficient to cover your income tax (at the rate provided to Computershare by Johnson Matthey Plc), NIC liability and the dealing fees, Computershare will carry out a sell to cover transaction in accordance with Section 1(ii) above. The VSA is available to former employees of Johnson Matthey as well as current employees but it is not available to former employees who choose to self-fund their tax liabilities and retain all shares (in these circumstances, a share certificate will be issued)

7 9. How do I submit my instruction to Computershare? Once you are ready to submit your instruction to Computershare, please follow the procedures below: (1) Click on the flashing LTIP 2014 Vesting button on the right hand side of the Portfolio page. If you are a participant in more than one Johnson Matthey Plc share plan, select Long Term Incentive Plan in the drop down box and then click on Make Election. If you are in the LTIP only, there is no need to select from the drop down box, click directly on Make Election. (2) Follow the onscreen instructions thereafter. A web guide is available to help you submit your instruction. This is can be found under the Company Info tab of the Johnson Matthey Employee Share Plan website (under Plan Documentation - LTIP Release July General ). IMPORTANT: YOU MUST GIVE YOUR INSTRUCTION TO COMPUTERSHARE BEFORE 9.00AM (UK TIME) ON FRIDAY 18 JULY What if I fail to give my instruction? If you do not place an instruction before 9.00am (UK time) on Friday 18 July 2014, a sufficient number of shares will be sold on your behalf on the Vesting Date to cover your income tax and NIC liability (and dealing fees). The balance of shares remaining after the sale will be registered in your name. You will receive a share certificate for these shares. This certificate will be sent to you, at your own risk, to the address that Computershare hold for you. 11. I want to change my instruction - is this possible? If you submit an instruction and subsequently wish to change it, you will need to cancel your original instruction and submit a revised instruction before 9.00am (UK time) on Friday 18 July You can cancel your instruction by: (1) Selecting the My Holdings tab at the top of the page, then Transactions History. (2) Clicking Cancel under Pending Election. You will need to enter your PIN. Note that should you wish to cancel a Retain All instruction you cannot do this via the Johnson Matthey Employee Share Plan website. You will need to contact the Johnson Matthey Employee Share Plan Helpline referred to in Section 12 below before 5.00pm (UK time) on Thursday 17 July Your revised instruction will need to be submitted before 9.00am (UK time) Friday 18 July Any further questions? If you have any questions in respect of the LTIP vesting or the VSA, please contact the Johnson Matthey Employee Share Plan Helpline (operated by Computershare) on +44 (0) or - 7 -

8 The Helpline is open from 8.30am to 5.30pm (UK time) Monday to Friday. Johnson Matthey Plc 2 July

9 PART B Johnson Matthey Johnson Matthey Plc Long Term Incentive Plan LTIP Vesting 1. What is a Vested Share Account? Vested Share Account A Vested Share Account ( VSA ) is a nominee account managed by Computershare in the UK into which you can put shares which have vested under the Johnson Matthey Plc Long Term Incentive Plan ( LTIP ). The shares are held by Computershare and administered in the UK on your behalf. 2. If I want to retain my shares when they vest in July 2014 do I have to put them into the VSA? If you are a UK participant you do not have to put your vested shares into the VSA. You can, if you wish, hold your vested shares in certificated form. This means that you will receive a share certificate. If you are not a UK participant and you wish to retain your vested shares, they will be transferred to the VSA. It will not be possible for you to hold a share certificate. In all cases, before you can put your vested shares into the VSA, you may be required to sell a sufficient number of shares to cover any tax liabilities which arise at vesting. Please refer to the LTIP Vesting Guidance Notes relevant to your country for more information. 3. If I put shares into the VSA, does my name appear on Johnson Matthey Plc s share register? No. Shares held in the VSA are registered in the name of Computershare Company Nominees Limited (the Nominee ) and it is that name which appears on Johnson Matthey Plc s share register. Whilst you are not the registered holder of the shares, you are the beneficial holder of the shares which means you have full beneficial rights over the shares including the right to receive dividends and the right to direct the Nominee to vote on your behalf at Johnson Matthey Plc general meetings. 4. How are the shares held in the VSA? The shares are held in dematerialised form. This means they are held electronically, share certificates are not produced. 5. How will I know how many shares I hold in the VSA? You can view your VSA shareholding, along with your other share plan holdings, at any time on the Johnson Matthey Employee Share Plan website at To log on - 9 -

10 to this website you will need your User ID and PIN. On this website, shares held in the VSA are referred to as Vested Shares. 6. Is there a minimum holding period for VSA shares? No. You are free to sell your shares at any time (subject to any restrictions placed on you by the Johnson Matthey Plc Share Dealing Code). There is no minimum or maximum holding period. 7. If I choose to put my 2011 LTIP shares in the VSA, when will they credit my VSA account? Your shares will be put into the VSA on 24 July 2014, the day after the vesting date. 8. How soon can I sell my VSA shares after the vesting date? You can sell your shares at any time from (and including) 24 July Please note that if you are automatically covered by the Johnson Matthey Plc Share Dealing Code you will be required to obtain clearance to deal in advance of placing an instruction to sell your VSA shares. 9. How do I sell my VSA shares? You can only sell your VSA shares via the Johnson Matthey Employee Share Plan website administered by Computershare in the UK. Shares will be sold on the London Stock Exchange and can be sold at any time during London Stock Exchange trading hours (Monday to Friday 8.00am to 4.30pm UK time). If you submit an order to sell during these hours your order will normally be executed immediately. If you submit an order to sell outside of these hours, your order will be executed when the London Stock Exchange re-opens for business. 10. When selling my VSA shares can I specify a floor price? Currently it is not possible to specify a floor price when you sell your VSA shares. 11. How do I receive my sale proceeds? Your sale proceeds will be paid to the bank account that you specify at the time of placing your instruction to sell shares. 12. How do I receive dividends on my VSA shares? The Nominee receives cash dividends on your behalf and automatically reinvests this cash to buy further Johnson Matthey Plc shares which themselves are held in the VSA on your behalf. You cannot elect to receive a cash dividend. Charges will be applied when dividends are reinvested. Please refer to question Will I receive a dividend tax voucher? Within 14 days of each dividend payment, you will be sent an by Computershare directing you to your personalised Tax Voucher on the Correspondence area of the Johnson Matthey Employee Share Plan website. This Tax Voucher will show the amount of dividend received by the Nominee (in ) as well as the number of shares purchased by the Nominee, on your behalf, with this dividend

11 If you are a US participant, Computershare will send you a Form 1099-DIV which will be posted to your home address as it appears on the Johnson Matthey Employee Share Plan website. This form will be sent to you by the end of February following the calendar year in which dividends are received. 14. If I sell some or all of my VSA shares, when will I receive my Form 1099-B (US participants only)? If you are a US participant, Computershare will send you a Form 1099-B which will be posted to your home address as it appears on the Johnson Matthey Employee Share Plan website. This form will be sent to you by mid-march following the calendar year in which you have sold any shares. 15. Do I have voting rights at Johnson Matthey Plc general meetings? Yes. You do not have an automatic right to attend Johnson Matthey Plc general meetings but you can direct the Nominee to vote on your behalf at general meetings. Prior to general meetings, you will receive information from Computershare by describing how you can direct the Nominee to vote on your behalf. 16. What if I leave Johnson Matthey Plc, do I have to withdraw my shares from the VSA? Currently, there is no requirement for leavers to remove their shares from the VSA. The shares will remain in the VSA until such time that the leaver sells or transfers them. Leavers will still be able to access their accounts on the Johnson Matthey Employee Share Plan website and to sell their shares online should they wish to do so. 17. I have already left Johnson Matthey Plc, can I put my vested shares into the VSA? Yes, you can still put your vested shares into the VSA if you elect to sell to cover or sell a specific number of shares. However, it is not possible for former employees who choose to self-fund their tax liabilities and retain all shares to put shares into the VSA. In these circumstances, a share certificate will be issued. 18. Who is providing the VSA? Johnson Matthey Plc has engaged Computershare to provide the VSA service. The service will be administered in the UK. If you choose to put your vested shares in the VSA, you will be required to sign up to Computershare s terms and conditions. These terms and conditions are available to view under the Plan Documentation section of the Johnson Matthey Employee Share Plan website under Vested Share Account. You will be asked to sign up to Computershare s VSA terms and conditions when you log on to the Johnson Matthey Employee Share Plan website to submit your LTIP vesting instruction. 19. I currently hold share certificates for Johnson Matthey Plc shares, can I transfer these to the VSA? Currently, the VSA is only available for LTIP vestings. You cannot transfer to the VSA shares which are currently held in certificated form (even if they have arisen from previous LTIP vestings) or shares which are held in another Johnson Matthey Plc share plan (for example, the Share Incentive Plan)

12 In future, it might be possible for you to transfer shares which have previously arisen from Johnson Matthey Plc share plans (for example, shares arising from earlier LTIP vestings). We will let you know if this facility becomes available. 20. Can I transfer my shares out of the VSA? You can arrange for your shares to be transferred out of the VSA into certificated form. You can only do this via the Johnson Matthey Employee Share Plan website. Computershare will arrange (through Equiniti, Johnson Matthey Plc s registrar) for a share certificate to be sent to your registered address. If you are not in the UK the holding of a share certificate might not be permitted by local laws and it could be very difficult for you to eventually sell your shares if you hold them in this way. Therefore you may not be able to have your shares transferred to you in certificated form. 21. I may want to transfer my VSA shares to my personal brokerage account in the future, is this possible? Not directly. If you want to transfer shares to a personal brokerage account you will firstly need to request that they are transferred into certificated form. Once you receive your share certificate, you will be able to arrange a transfer to your broker. As mentioned above, if you are not in the UK the holding of a share certificate might not be permitted by local laws and it could be very difficult for you to eventually sell your shares if you hold them in this way. Therefore you may not be able to have your shares transferred to you in certificated form. 22. What charges apply to the VSA? There is no charge for holding shares in the VSA but charges do apply to certain transactions. These are as follows: Selling shares 0.25% of total sale proceeds, subject to a minimum of Sales proceeds paid to non-uk bank accounts in currencies other than sterling Dividend reinvestment A fixed administration fee and currency conversion commission. For further details on non-uk payments (including details of the currency conversion commission) please refer to Computershare s Global Payment Service Information Sheet which can be found on the Employee Share Plan website under Company Info - Plan Documentation - Global Payment Service Cash dividends received by the Nominee on your behalf are used to buy further Johnson Matthey Plc shares. Two amounts are payable on the total value of the shares acquired: 0.20% dealing fee (no minimum) 0.5% stamp duty It is worth noting that if you are in the UK and you choose to receive your shares in certificated form rather than putting them into the VSA, you will be required to pay a dealing fee/commission to your

13 broker when you sell your shares. The dealing fee payable on a sale of shares from the VSA may be lower than the fee payable to your broker if you sell shares held in certificated form. 23. Will I have to pay tax when I sell my shares from the VSA or when I receive dividends? As the VSA shares have already vested, Johnson Matthey Plc and Computershare are not required to withhold additional tax from your sale proceeds when you sell shares from the VSA. However, you may have a personal tax liability when you sell your VSA shares. It is your responsibility to comply with local tax legislation in this regard. Similarly, you may have a tax liability on dividend income received on your VSA shares even though it is automatically reinvested to buy further Johnson Matthey Plc shares. Again, it is your responsibility to comply with local tax legislation in this regard. Further information on the tax consequences of selling your VSA shares and receiving dividend income on your VSA shares can be found in the Employee Tax Sheet relevant to your country. Employee Tax Sheets can be found under the My Holdings - Correspondence area of the Johnson Matthey Employee Share Plan website Do I need to get clearance to deal if I want to sell my VSA shares? If you are automatically covered by the Johnson Matthey Plc Share Dealing Code you will need to obtain clearance to deal prior to placing your instruction to sell your VSA shares. 25. If I sell all of my shares out of the VSA (or transfer them), what will happen to my VSA account? If you sell all of your shares out of the VSA (or, if you are in the UK, transfer them into a share certificate), your VSA account will remain open should you want to use it for future LTIP vestings. If you want to close your account you will need to request this in writing to Computershare. 26. In which countries is the VSA not currently available? Currently, for legal, regulatory or tax reasons, the VSA is not currently available in the following countries: China Japan Macedonia Russia United Arab Emirates These countries will be kept under review and if we are able to offer the VSA in these countries in the future you will be notified. 27. What happens to my shares if I transfer my Johnson Matthey Plc employment to a country which does not offer a VSA? If you transfer employment to a country which does not offer a VSA, you will be required to withdraw your shares from the VSA. You will be able to sell your shares or, alternatively, it may be possible to transfer them into certificated form but this may depend on the legal, regulatory and tax rules of the country you are moving to. This applies if you relocate on a short-term assignment, expatriate assignment or on a permanent basis

14 28. Will the VSA run indefinitely? It is Johnson Matthey Plc s intention for the VSA service to be provided in the long-term. However, depending on the take-up rate and other factors, it may be necessary to withdraw the service in the future. You will be given plenty of notice of a withdrawal of the service. Issued July