Partnership Share Scheme Share in the success you re helping to create

Transcription

1 Welcome About the Scheme About the Scheme part 1 About the Scheme part 2 How to join How does the Scheme work? What happens if? What about tax? What about tax part 1 What about tax part 2 Terms and Conditions Terms and Conditions part 1 Terms and Conditions part 2 For further information Partnership Share Scheme

2 Welcome About the Scheme British American Tobacco Partnership Share Scheme About the Scheme part 1 About the Scheme part 2 How to join How does the Scheme work? Dear Colleague British American Tobacco is pleased to offer you the opportunity to become a shareholder in the Company. The Partnership Share Scheme offers you the ability to increase your shareholding in British American Tobacco on a monthly basis and provides substantial tax savings. The future of our business depends on the skill, hard work and enthusiastic commitment of us all. I believe it is important that you have the opportunity to become a shareholder and thus share in the success, which you are helping to create. If you are employed by a participating Company, and you work in the UK, you are eligible to join the Partnership Share Scheme. I very much hope that you will take advantage of this opportunity. If you wish to apply to join the Scheme please visit and follow the online instructions. For this service you will need your User ID, which is shown at the top of your invitation , and your Personal Identification Number (PIN), which was sent to you under separate cover. British American Tobacco p.l.c. Registered in England and Wales no Registered office: Globe House 4 Temple Place London WC2R 2PG 01 Applications to join the Scheme can be made at any time, but must be made by the 20th of the month for inclusion in the following month s purchase. You can access the Employee Plan Members website with your User ID and PIN and will be able to view information on your employee plans, download forms for initiating changes and find answers to frequently asked questions. If you decide to participate in the Partnership Share Scheme you will also be able to see on the web how many shares have been purchased for you each month. If you require further information, please contact the British American Tobacco Employee Share Plans Helpline on Yours sincerely Nicandro Durante Chief Executive What happens if? What about tax? What about tax part 1 What about tax part 2 Terms and Conditions Terms and Conditions part 1 Terms and Conditions part 2 For further information

3 ABOUT THE SCHEME What is the British American Tobacco Partnership Share Scheme? About the Scheme part 1 The Partnership Share Scheme has been designed to help employees working in the UK to buy shares in British American Tobacco on a monthly basis. You can buy these shares using pre-tax pay and will not have to pay any tax provided the shares are held in trust for 5 years. What s in it for me? The Partnership Share Scheme - Share in the success you re helping to create. British American Tobacco offers you the opportunity to take part in the Partnership Share Scheme. This Scheme allows UK employees to buy shares in the Company on a monthly basis, using pre-tax pay. You become an immediate shareholder in British American Tobacco The moment you make your first investment, you become a shareholder with voting rights, possible dividends and potential capital growth. You use your pre-tax pay to buy the shares If you invest 100 as a basic rate tax payer, it will only cost you 70 of your net salary effectively a discount of 20% on the value of the shares you buy from your net salary. If you are a higher rate tax payer, even better. An investment of 100 will only cost you 60 effectively a discount of 40% on the value of the shares you buy from your net salary. You decide how much you want to invest You can save between 10 and 150 per month, provided this does not exceed 10% of your gross pay. You make your investment through easy payroll deductions No fuss. No hassle. Your monthly investment is automatically transferred to ees, Computershare Trustees Limited, who buy the British American Tobacco shares at the market price. Your shares are held in Trust for you Although the shares belong to you, ees will look after them until you decide to sell them. 02 Partnership Share Scheme

4 ABOUT THE SCHEME What is the British American Tobacco Partnership Share Scheme? You can stop or change the amount of your investment at any time Up to the limit of 150 per month or 10% of your gross pay. As a shareholder, you may have dividends The Trustees will invest the dividends to buy more shares for you. These are called Dividend Shares and can normally only be sold 3 years from the date they were acquired. Your shares have the potential for capital growth As long as you leave your shares in you will not have to pay any tax on them You can sell your Partnership Shares at any time If you keep them for 5 years, you will not have to pay tax. However, if you take them out of within 5 years of the Award Date you may lose the tax advantage. As a shareholder, you have access to shareholder information about the company You will receive the Company s Report & Accounts and other relevant information. Expatriates and Impatriates The Scheme is an HM Revenue & Customs taxadvantaged scheme which offers participation to UK employees of participating companies who are resident and ordinarily resident in the UK for tax purposes. You may not participate in the Scheme if you are: an expatriate i.e. working overseas on an Award Date; or an impatriate i.e. working in the UK but employed by an overseas subsidiary of British American Tobacco. About the Scheme part 2 03 Partnership Share Scheme

5 HOW TO JOIN Are you employed by a British American Tobacco participating company and based in the UK? No Yes Sorry, you cannot join the Partnership Share Scheme To help you understand the Partnership Share scheme quickly and easily, just follow this simple flow chart. Decide how much you want to invest- between 10 and 150 per month. This amount cannot exceed 10% of your gross pay. Log on to and follow the online instructions. Applications for the Partnership Share Scheme may be submitted at any time, but must be received by the 20th of the month to be effective for the following month. Payroll will deduct your investment from your pay and transfer it to ees. The Trustees then buy shares in British American Tobacco at the market price each month. These are called Partnership Shares and are held in Trust for you. From your first investment, you become a shareholder and have voting rights, potential capital growth and possibly dividends. The Trustees will invest any dividends to buy more shares for you these are called Dividend Shares. You can sell your Partnership Shares at any time, but if you sell within 5 years you may incur tax and National Insurance. If you sell your shares after 5 years you will not need to pay tax or National Insurance. 04 Partnership Share Scheme

6 HOW DOES THE SCHEME WORK? The Partnership Share Scheme works like this 1. First you need to decide on how much you wish to invest every month. This can be anything between 10 and 150 per month. The amount you invest, however, cannot exceed 10% of your gross pay. As long as you stay within the limits, you can stop or change the amount of your monthly investments at any time by completing the relevant form, available from ees. 2. After each payroll run your money is transferred to the independent Trustees, Computershare Trustees Limited, to buy British American Tobacco shares at the market price soon after. These are called Partnership Shares. They belong to you, but are held in Trust for you until you instruct otherwise, or until you leave employment with the Group. 3. You can sell your Partnership Shares at any time, or transfer them to your own name or that of a third party. However, once they are, they lose their tax advantages, particularly in the first 5 years. 4. Any dividends paid will be reinvested into shares for youcalled Dividend Shares. You will not be able to sell or transfer these shares for 3 years. Share ownership should be seen as a medium to long-term investment. As with any shares, the value of your British American Tobacco shares is subject to market fluctuations and may go down as well as up 05 Partnership Share Scheme

7 WHAT HAPPENS IF? I leave? I am made redundant? I have to leave work due to injury or disability? I retire? I leave for any other reason? I go on maternity leave or long-term absence? I can t afford to make my monthly investment? There is a change in control of British American Tobacco? I die? I want to sell my shares? I want to withdraw my shares from the Scheme? Any Partnership or Dividend Shares held in Trust for you will need to be withdrawn. You will have the option to ask ees to sell or retain these shares. Your Partnership and Dividend Shares will be transferred or sold tax-free. You will have to pay tax on any Partnership Shares held for less than 5 years and any Dividend Shares held for less than 3 years. The Trustees will sell a sufficient number of your shares to settle your PAYE and National Insurance liability. You can continue with your current level of investments subject to the overall 10% gross pay limit. You can stop, or vary, your payments at any time. Contact ees for the relevant form. This will depend on the circumstances of the change of control. If your shares become subject to a corporate event they will do so in the same way as for other shareholders. The Company will send you details at the relevant time. Any shares or cash will be transferred or paid to your estate. You may sell your Partnership Shares at any time but if you sell within 5 years, you may have to pay tax and National Insurance. You must leave your Dividend Shares in Trust for 3 years before you can sell them. You will need to notify ees in writing. Your shares will be transferred to you. However, if you take your shares out of, within 5 years, you may have to pay income tax, and/or National Insurance. 06 Partnership Share Scheme

8 WHAT ABOUT TAX? Event Partnership Shares Dividend Shares Income Tax National Insurance Capital Gains Tax Income Tax National Insurance Capital Gains Tax 1 Acquisition of Shares None: tax saving on the amount of the investment None: N.I saving on the amount of the investment Not applicable None Not applicable Not applicable 2 Sale or withdrawal of Shares from Trust within three years of acquisition other than as a result of the circumstances listed at 5 below Yes: on the market value of the Shares on the date of sale or withdrawal from Trust (whichever happens first) Yes: on the market value of the Shares on the date of sale or withdrawal from Trust (whichever happens first) None if you sell the shares directly from. sell the Shares Yes: on the dividends used to buy the Shares (however please note that Dividend Shares can only be withdrawn within that period if you cease to be employed within the Group) Not applicable None if you sell the shares directly from. sell the Shares What about tax part 1 3 Sale or withdrawal of Shares from Trust within three to five years of acquisition other than as a result of the circumstances listed at 5 below Yes: on the lowest of: investment used to buy Shares market value on date of sale or withdrawal from Trust (whichever happens first) Yes: on the lowest of: investment used to buy Shares market value of date of sale or withdrawal from Trust (whichever happens first) None if you sell the shares directly from. sell the Shares None Not applicable None if you sell the shares directly from. sell the Shares 4 Sale or withdrawal of Shares from Trust more than five years following acquisition None None None if you sell the Shares directly from. sell the shares None None None if you sell the Shares directly from. sell the shares 07 Partnership Share Scheme

9 WHAT ABOUT TAX? (Continued) 5 Sale or withdrawal of Shares from Trust at any time following termination of employment as a result of injury, disability, retirement, redundancy, sale by the Group of the business or company for which you work or death None None None if you sell the Shares directly from. sell the shares None None None if you sell the Shares directly from. sell the shares What about tax part 2 6 Sale of your Shares after you have instructed ee to withdraw them from at any time Not applicable (see above in relation to tax on the withdrawal of your shares from ) Not applicable (see above in relation to tax on the withdrawal of your shares from ) You make a capital gain equal to difference between the sale proceeds and the market value of the Shares on the date of withdrawal from. Capital gains tax is payable if total capital gains exceed the annual personal allowance. Not applicable (see above in relation to tax on the withdrawal of your shares from ) Not applicable (see above in relation to tax on the withdrawal of your shares from ) You make a capital gain equal to difference between the sale proceeds and the market value of the Shares on the date of withdrawal from. Capital gains tax is payable if total capital gains exceed the annual personal allowance. Any income tax and National Insurance that arises on your Partnership Shares (as set out above) will be settled by your employer through PAYE. In this case, ee will sell sufficient of your Shares to meet your income tax and National Insurance liability. Alternatively, you may provide funds to the Trustee to settle this liability. If income tax arises on your Dividend Shares and or any capital gains tax arises on the sales of your Shares after you have withdrawn them from the Plan (as set out above) it is your responsibility to complete a self-assessment tax return and pay the tax (your employer will not settle this tax liability). 08 Partnership Share Scheme

10 TERMS AND CONDITIONS The British American Tobacco p.l.c. Employee Share Ownership Plan ( Plan ) Partnership Share Agreement General This agreement sets out the terms on which a Participant agrees to take part in the Plan. This agreement is subject to the rules of the Plan. Certain expressions are defined in the rules of the Plan and have the same meaning as in the Plan. An explanation of these terms is set out below. PLEASE READ THE WHOLE OF THIS AGREEMENT BEFORE APPLYING TO PARTICIPATE IN THE PLAN Notice to the Participant about the possible effect on benefits The deductions from your pay to buy Partnership Shares under this agreement may affect your entitlement to, or the level of, some contributory social security benefits, statutory maternity pay and statutory sick pay. They may also have a similar effect in respect of some contributory social security benefits paid to your spouse or civil partner. With this agreement you should have been given information on the effect of deductions from your pay to buy Partnership Shares on entitlement to social security benefits, statutory sick pay and statutory maternity pay. The effect is particularly significant if your earnings are brought below the lower earnings limit for National Insurance purposes, and is explained in the information: it is therefore important that you read it. If you have not been given a copy, ask Computershare Investor Services. Otherwise a copy may be obtained from any office of HM Revenue and Customs, Department of Work and Pensions, or, in Northern Ireland, the Department for Social Development. You should take the information you have been given into account in deciding whether to buy Partnership Shares. Copies of the information on leaflet IR177 can also be downloaded from the HMRC website. Participant 1. I agree to allow my employer to deduct from my salary the amount per month or fortnight specified in my application. 2. I agree that these deductions will be used to buy Partnership Shares in British American Tobacco p.l.c. ( the Company ) for me. 3. The Company undertakes to notify me of any limit on the number of Partnership Shares available in the (or each) award. I agree that the deductions from my salary, or the number of Shares that I receive may be scaled down if the limit on the number of Shares set by the Company for an award is exceeded. 4. I agree that the full amount of cash dividends paid on my Shares will be used by ees to buy more shares in the Company for me ( Dividend Shares ) according to the rules of the Plan. I agree to accept the Dividend Shares bought for me and leave them in the hands of the Trustees, and not to assign, charge or otherwise dispose of my beneficial interest in the Divided Shares for the whole of the Holding Period of 3 years. 5. I understand that Shares may fall in value as well as rise and I may not get back the original amount invested. 6. I have read this agreement and agree to be bound by it and by the rules of the Plan. 7. I agree that it may be necessary to carry out several market transactions in order to acquire the number of Partnership Shares needed under the Plan. The Partnership Shares shall be acquired according to the Market Value of Shares on the Award Date. All purchases will be made on an execution only basis at a date agreed by the Company and ees which will be within 30 days of the end of the last monthly pay deduction date. I cannot specify a minimum or a maximum price at which the Shares will be purchased. 8. I direct that all cash amounts due to me under the Plan shall be paid, after deduction of any applicable withholdings. 9. A copy of Computershare s terms and conditions of dealing may be obtained from Computershare Plan Managers, Bridgwater Road, Bristol BS99 6AP. Company 9. The Company agrees to arrange for Partnership Shares to be bought for me according to the rules of the Plan. Trustee 10. The Trustee agrees to keep my salary deductions in The Royal Bank of Scotland plc (or such other bank or building society as is from time to time notified to me) until they are used to buy Partnership Shares. Rights and Obligations 1. I agree that taking part in the Plan does not affect my rights, entitlements and obligations under my contract of employment, and does not give me any rights or additional rights to compensation or damages if my employment ceases. 2. I may stop the deductions at any time, or begin them again, by writing to my employer, but I may not make up any amounts missed when deductions were stopped. I understand that any instruction to stop deductions would be implemented within 30 days of receipt of my instructions and that any instructions to restart deductions will be implemented on the first salary payment which happens more than 30 days after receipt of my instructions. 3. I agree to allow ee to sell some or all of my Plan Shares to pay any Income Tax or National Insurance Contributions in respect of my Partnership and Dividend Shares ceasing to be subject to the Plan, unless I Terms and Conditions part 1 09 Partnership Share Scheme

11 TERMS AND CONDITIONS The British American Tobacco p.l.c. Employee Share Ownership Plan ( Plan ) Partnership Share Agreement provide ee in advance with sufficient funds to pay these amounts. 4. I agree that any deductions not used to buy Partnership Shares will be carried forward to the following month s purchase. On leaving it will be repaid to me, via Payroll, after the deduction of any necessary Income Tax or National Insurance Contributions. 5. If there is a rights issue, I agree to allow ee to sell some of the rights attached to my Plan Shares, in order to fund the exercise of the rights attached to my other Plan Shares. 6. I can at any time withdraw from this agreement by contacting ee. Any unused deductions will be returned to me after the deduction of any necessary Income Tax or National Insurance Contributions. 7. I may at any time withdraw my Plan Shares by directing ees to either: (a) sell my Shares and account for the proceeds either to myself or to any other person as I may direct. I agree that the sale charge of will be deducted from the sale proceeds before being released; or (b) transfer my Shares either to myself or to any other person as I may direct, but I may have to pay Income Tax and National Insurance Contributions if they are taken out of the Plan within five years of being bought for me. 8. I agree that withdrawal from this agreement will not affect the terms on which I agreed to buy Shares already held for me under the Plan. 9. I understand that ee is under no obligation to keep the deductions in an interest bearing account, but if it does, ee will pay interest to me. 10. I understand that the Company will pay any associated costs incurred for the acquisition of my Partnership Shares. 11. Unless otherwise agreed between me and the Company, I agree that no Partnership Shares will be bought for me if either the Company s Shares cease to be listed on the Daily Official List of the London Stock Exchange or if the Company becomes a Subsidiary of another company. Dividend reinvestment and Dividend Shares 1. Any amount of a dividend insufficient to acquire a Share will be carried forward and added to the amount of the next dividend reinvested. 2. The Company may vary the amount of dividends that may be reinvested at any time by giving notice to ee. 3. I understand that my obligations during the Holding Period applicable to Dividend Shares will end: a) if I cease to be in Relevant Employment; or b) if the Company terminates the Plan in accordance with the Deed and I have consented to the transfer of the Shares to me. 4. I understand that my obligations under the Holding Period are subject to: a) the right of ees to sell my Shares to meet PAYE obligations; or b) ees accepting at my direction an offer for my Shares in accordance with the Plan. Complaints 1. Computershare has a procedure to help resolve complaints. Computershare is regulated by the Financial Conduct Authority in respect of investment business and is bound by its rules. If you have a complaint relating to the Plan please write to Computershare whose current address is Computershare Plan Managers, Bridgwater Road, Bristol BS99 6AP. 2. You may also complain directly to the Financial Ombudsman Service whose details can be obtained from Computershare. Computershare Investor Services is covered by the Financial Services Compensation Scheme (FSCS); further details of this scheme are available on request. Leavers 1. I understand that if I cease to be in Relevant Employment, any Partnership Share Money that has not been reinvested will be processed through payroll, with appropriate income tax and National Insurance Contribution deductions. 2. I understand that if I cease to be in Relevant Employment I will be sent a leaver pack by ees. If I do not return the leaver pack to the Trustees detailing my instructions, within 21 days, some or all of my Plan Shares may be sold to pay any Income Tax and National Insurance Contributions which may be due. Any remaining shares will be transferred into my name. Explanation of certain expressions Partnership Shares these are Shares bought with your savings. Plan Shares all Shares in the Plan held for you by ee. Relevant Employment employment by the Company or any member of the British American Tobacco Group or any company having the necessary degree of association with the Company. Shares ordinary shares in the capital of the Company. Trustee the trustees or trustees for the time being of the Plan. The current trustee is Computershare Trustees Limited. Terms and Conditions part 2 10 Partnership Share Scheme

12 For further information This booklet is a guide to the British American Tobacco Share Reward Scheme which forms part of the British American Tobacco p.l.c. Employee Share Ownership Plan. On all matters of interpretation the actual Rules of the Plan and current legislation will prevail. A copy of the Rules can be obtained from: Computershare Plan Managers Bridgwater Road Bristol BS99 6AP United Kingdom Telephone: +44 (0) Authorised and regulated by the Financial Conduct Authority You are advised to read this booklet carefully and, if you wish, consult your professional adviser about the implications of participation in the Scheme. British American Tobacco p.l.c. reserves the right to suspend, terminate or amend the terms of the Plan. You will be notified of any change to the Plan that may be relevant to you. Except with your prior consent, no amendments will be made that would adversely affect your existing rights in relation to your Free Share allocation under the Scheme unless such amendments are made to take account of proposed or existing legislation or reflect changes in the legislation. British American Tobacco p.l.c Partnership Share Scheme