SCHEDULE 1 KENYA AIRWAYS PLC THE KENYA AIRWAYS 2017 GROUP EMPLOYEE SHARE OWNERSHIP SCHEME RULES OF THE PERFORMANCE SHARES SCHEME (SUBJECT TO CMA APPROVAL) - 1 -
1. DEFINITIONS AND INTERPRETATION 1.1 In this Scheme, in addition to the terms defined in the Settlement, the following definitions shall apply: 1.1.1 Allocation Notice means the notice given to an Eligible Employee in the form set out in Appendix A hereto setting out the terms and conditions on which Units have been allocated to such person and the Units stated therein may be acquired; 1.1.2 Eligible Employee means an employee of the Group, whether situate in Kenya or overseas who has completed 12 months of continuous service with the Group and who is in permanent employment of the Goup and may include a dull time service or executive director or such other employee as the Board may decide from time to time; 1.1.3 Taxes mean all forms of taxation, duties, imposts, levies and rates whenever imposed and applicable pursuant to the laws of Kenya; 1.1.4 Trustees means the trustees of the Settlement; 1.1.5 Vested, Vesting or Vest means Units which have vested in the Unitholder pursuant to these Rules; 1.1.6 Vesting Conditions means any conditions as to timing, performance criteria, goals, parameters, eligibility, payment amounts or payment terms, pricing, value or such other pre-requisite as may be specified from time to time by the Board as to when the Units allocated shall Vest in an Eligible Employee. 1.1.7 Vesting Date means the date or dates on which Units shall Vest in an Eligible Employee, as specified in an Allocation Notice, during the Vesting Period; 1.1.8 Vesting Period means the period during which the Units shall Vest in the Employee as specified in the Allocation Notice. 1.2 Except in so far as the context otherwise requires: 1.2.1 words denoting the singular shall include the plural and vice versa; 1.2.2 words denoting the masculine gender shall include the feminine gender; and 1.2.3 a reference to any enactment shall be construed as a reference to that enactment as from time to time amended extended or re-enacted. 2. CONTROL OVER DEALINGS AND LIMITS 2.1 So long as the Shares are admitted to the Official List of the NSE the Board shall, in deciding the timing of making invitations to the Eligible Employees, have regard to whether there is unpublished price sensitive information regarding the Company and/or the Group which will, or is likely in its reasonable opinion, materially to - 2 -
affect the price of Shares. No Allocation Notices shall be issued at a time when to do so would make any person giving or receiving them (including the Trustees) an insider within the meaning of that term in the CM Act. 2.2 The Board may determine the periods during which dealings in the Company s Shares and in Units shall be prohibited and it shall notify the Trustees, the Capital Markets Authority and the NSE of such closed periods. 2.3 The Board and the Trustees shall not be bound at any time to accept instructions or to agree to requests for redemption of Units or other dealings in the Units or in Shares under this Scheme, in particular whenever in its or their absolute discretion they consider that conditions within the securities market for the Shares are not conducive to redemption of Units or to other dealings in the Shares. 2.4 This Scheme shall continue until it is terminated by a resolution of the Board or a resolution of the Company in general meeting. 2.5 The maximum number of Units that may be the granted to a single Eligible Employee shall be subject to the Board s discretion but in any case shall not exceed 10% of the total amount outstanding of all Units granted by the Board. 3. ALLOCATION OF UNITS 3.1 On the instructions of the Board, the Trustees may allocate Eligible Employee with Units in accordance with such terms and upon such conditions, including the terms related to the Vesting Date, the Vesting Period and the Vesting Conditions and holding periods, as the Board may from time to time prescribe. 3.2 The Allocation Notice shall be in writing and in the form set out in Appendix A or in such form as the Board may from time to time prescribe, and shall: 3.2.1 notify an Eligible Employee that he or she has been allocated Units; 3.2.2 specify the Vesting Conditions; 3.2.3 confirm that a corresponding number of Shares have been allotted or allocated or transferred to the Trustees; and 3.2.4 specify the number of Units allocated. 3.3 During the Vesting Period the Units and the corresponding Shares may not be sold or transferred. 4. VESTING OF UNITS 4.1 Units allocated under the ESOS shall vest on the Vesting Date. 4.2 Vesting of the Units shall be subject to continued employment of the Eligible Employee with the Company or the Group during the Vesting Period. 4.3 In case the contract of employment of the Eligible Employee is terminated or if the Employee ceases to be an employee of the Company or the Group for any reason whatsoever (including retirement or death) before the end of the Vesting Period, - 3 -
any Units that have not as of such dated Vested they shall be forfeited by the Eligible Employee. 4.4 Notwithstanding anything contained herein, the Board shall have right to amend, alter and modify any of the provisions of these Performance Shares Rules including but not limited to the Vesting Conditions and the Vesting Period. 5. UNITHOLDER S RIGHTS IN RESPECT OF UNITS 5.1 With effect from the Vesting Date and for so long as the Unitholder holds Units he or she shall be entitled to be paid the income in the form of dividends received by the Trustees on the ESOS Shares held by the Trustees and corresponding to the Units and the Trustees shall determine the date on which income of the Trust Fund shall be distributed to Unitholders provided that such sums shall be paid not later than thirty (30) days following receipt by the Trustees of income on the Units, whether in the form of interim dividends or final dividends or in any other manner received by them. 5.2 A Unit shall not entitle a Unitholder to attend general meetings of any Group Company or to vote on any resolution put to the shareholders of such Company or to any right to any corresponding ESOS Shares. 5.3 A Unitholder may not transfer, assign, encumber, grant rights over or otherwise dispose of Units whether as security for a loan or otherwise and the Trustees shall not be bound to take notice of any mortgage, charge, equitable deposit of certificates or other encumbrance whatsoever. 6. REDEMPTION OF UNITS 6.1 A Unitholder who ceases to be employed by the Company or the Group (Exiting Employee) shall upon such cessation be deemed to have surrendered his or her Units and corresponding Unit Certificate and shall request the Trustees in writing ( notice of redemption ) to either: 6.1.1 transfer in a private transaction in accordance with the prescribed procedure for private transactions set out in the CM Act, to the name of the Exiting Employee, the number of Shares corresponding in value to the Units represented in the surrendered Units and cause the Exiting Employee s name to be registered as the owner of such shares in the register of members of the Company; or 6.1.2 purchase the surrendered Units for a cash sum equal to the value of the corresponding Shares. 6.2 The Trustees shall effect the Unitholder s request under paragraph 6.1 within thirty (30) days of receipt of the Unitholder s request. 6.3 A notice of redemption shall be accompanied by a Unitholder s certificate for the Units to be redeemed. On a partial redemption the Trustees shall issue the Unitholder with a certificate for the balance of Units held. - 4 -
7. UNIT CERTIFICATES 7.1 As soon as is practicable after the Vesting Date the Trustees shall issue to the Unitholder a Unit Certificate in respect of such Units in the form set out in Appendix B, or in such other form as the Trustees may from time to time prescribe. 7.2 The Unit Certificate(s), the Performance Shares Rules and the Settlement Deed shall be the only documents the Unitholder is entitled to receive in relation to his or her participation in the ESOS. 7.3 The Unit Certificate shall state the number of Units allocated and the Vesting Date applicable to each Unit. 8. DEATH IN SERVICE 8.1 Upon the death of a Unitholder any Units held by that Unitholder shall devolve to the estate of the deceased Unitholder. 8.2 The estate of the deceased Unitholder may surrender the deceased Unitholder s Certificate and request the Trustees in writing for the: 8.2.1 transfer in a private transaction in accordance with the prescribed procedure for private transactions in the CM Act, to the name of the Unitholder, the number of Shares corresponding in value to the Units surrendered and cause the Unitholders name to be registered as the owner of such Shares in the register of the Company; or 8.2.2 redemption of the surrendered Units for cash. 8.3 The Trustees shall effect the estate of the deceased Unitholder s election under paragraph 8.2 within thirty (30) days of receipt of the estate of the deceased Unitholder s request and the relevant date for determination of the Price shall be the date of receipt of the estate of the deceased Unitholder s request by the Trustees. 9. RECONSTRUCTION OR WINDING-UP BEFORE VESTING 9.1 If prior to Vesting of the Units the High Court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation pursuant to Part XXXIV of the Companies Act any Units not Vested shall not Vest. 9.2 If the Company passes a resolution for voluntary winding-up any Units not Vested shall not Vest. 9.3 Any Units that have not Vested shall not Vest upon the commencement of a compulsory winding-up of the Company. 10. ADMINISTRATION AND AMENDMENT 10.1 The Board, shall have power from time to time to make and vary such regulations (not being inconsistent with this ESOS) for the implementation and administration of this ESOS as it thinks fit. - 5 -
10.2 The decision of the Board shall be final and binding in all matters relating to this ESOS. 10.3 This ESOS may be amended in any respect by the Board provided that no amendment shall be made which would make the terms on which Units may be granted materially more generous without the prior approval of the Board 10.4 Written notice of any material amendment to this ESOS shall be given to all Unitholders. 10.5 The costs of establishing and administering this ESOS shall be borne by the Company jointly or in such other manner as they may agree between themselves. The Company shall be entitled to charge a proportionate and proportional amount to any Group Company in respect of costs incurred for the benefit of that company s Eligible Employees. 10.6 The Company shall not be obliged to provide Unitholders with copies of any notices, circulars or other documents sent to shareholders of the Company or any Group Company. 11. NOTICES 11.1 Except as provided otherwise in this ESOS, any notice or document which is required to be given to or served upon: 11.1.1 the Trustees shall be delivered or addressed to the Trustees at the registered office for the time being of the Company or, if a trust corporation shall be the sole Trustee, at the place of business of such trust corporation; 11.1.2 an Eligible Employee or Unitholder shall be delivered or addressed to the Unitholder at the address for the time being recorded by the Company or in the Register. 11.2 Any notice shall be given in writing and shall be deemed to have been received on the next or following day if delivered by hand or at the time of successful transmission if sent by email or on the fifth day after posting by prepaid post and no means other than delivery, email or posting shall be employed for the service of any notice hereunder. 12. MISCELLANEOUS 12.1 Any financial assistance afforded by a Company to an Employee shall be given in compliance with the Companies Act. 12.2 The issue of an Allocation Notice or the holding of Units shall not form part of a Unitholder s entitlement to remuneration or benefits pursuant to his or her contract of employment nor does the existence of a contract of employment between any person and a Group Company give such person any right or entitlement to have Units granted to him or her in respect of any number of Units or any expectation that a Unit might be granted to him or her, whether subject to any conditions or at - 6 -
all. 12.3 Nothing in these Performance Scheme Rules shall in any way restrict the right of a Group Company (as applicable) to terminate the employment of any Eligible Employee and the existence of any actual or prospective or possible benefit under the Settlement and /or under these Rules shall not increase or affect the damages in any action brought against such company in respect of any termination of employment or otherwise. 12.4 The rights and obligations of a Unitholder under the terms of his or her contract of employment with a Group Company shall not be affected by the allocation of or issue of Units. 12.5 A Unitholder shall not be entitled to any compensation or damages for any loss or potential loss which he or she may suffer by reason of being or becoming unable to acquire Units in consequence of the loss or termination of his or her office or employment with a Group Company or any Subsidiary or former Subsidiary for any reason (including, without limitation, any breach of contract by his or her employer) or in any other circumstances whatsoever. 13. UNITS AND PROCEEDS NON-ASSIGNABLE 13.1 The Units may not be assigned by a Unitholder nor shall they be capable of transmission by a Unitholder in a will or other testamentary disposition. A Unitholder may give directions as to the application of the Redemption Proceeds arising on his or her Unit by way of a letter of wishes. 13.2 Any Distribution Proceeds or Redemption Proceeds payable or to be paid under these Rules are not assignable and shall automatically cease to be payable if the recipient Unitholder alienates or charges the same or any part thereof or does or suffers any act or thing whereby whether by operation of law or otherwise it would be or become wholly or in part payable to another person or to a company. 13.3 Any residual sums arising by reason of the operation of these Rules shall be held by and form part of the Trust Fund and be disposed of in such manner as the Trustees, in consultation with the Board, in their discretion think fit. 14. TAX, DUTIES AND OTHER DUES 14.1 If the Trustees or the Company or any of them are accountable for Taxes, duties or other dues on any income benefit payable under these Rules, an appropriate deduction to meet the same may be made and the amount of distribution of income and Redemption Proceeds will be reduced accordingly. 14.2 Each Eligible Employee and the Company (as applicable) shall bear full responsibility for any and all Tax liabilities owed by the Eligible Employee or the Company that may arise in relation to this ESOS, and the Eligible Employee or the Company agrees that he/it shall fully indemnify and hold the Trustees harmless from any tax liability owed by Eligible Employee or the Company arising from or related to the transactions set forth herein (including, but not limited to, the Trustees deduction of the Taxes due on any income benefit payable under these Rules), including, but not limited to, any taxes, penalties, fines, and/or interest that - 7 -
are assessed by any tax authority against Eligible Employee or the Company and further including all attorneys fees and costs incurred by the Trustees in response to any claims or assessments by any tax authority against the Eligible Employee or the Company (as applicable). 15. LAW 15.1 This ESOS and all Units granted under it shall be governed by and construed in accordance with the laws of Kenya. - 8 -
16. APPENDIX A KENYA AIRWAYS PLC THE KENYA AIRWAYS 2017 GROUP EMPLOYEE SHARE OWNERSHIP SCHEME ALLOCATION NOTICE (date) Dear (name of employee) The Trustees on behalf of the Board have decided to allocate *[ ] Units under the terms of the Kenya Airways 2017 Group Employee Share Ownership Scheme Performance Shares Scheme ( the Scheme ). Number of Units offered: Vesting Date: Vesting Period: Other Vesting Conditions: The Units will not Vest in the event that you do not fulfil the performance criteria and Vesting Conditions that are approved by the Board. Any Units acquired by you pursuant to the Scheme will be subject to the provisions of the Settlement dated [[ ] 2017 and the Rules of this Scheme. Yours sincerely, [Trustees] - 9 -
APPENDIX B KENYA AIRWAYS PLC THE KENYA AIRWAYS 2017 GROUP EMPLOYEE SHARE OWNERSHIP SCHEME PERFORMANCE SHARES SCHEME UNIT CERTIFICATE (clause 5.1) Unit Cert. no (Insert details) Vesting Date Vesting Conditions THIS IS TO CERTIFY that the Unitholder named above was on the above date issued the number of Units stated above in accordance with the above Scheme. The Units are personal to the Unitholder and cannot, save as otherwise be specifically provided for in this Scheme, be transferred, assigned or charged. (signature of duly authorised officer) For and on behalf Trustees - 10 -
APPENDIX C KENYA AIRWAYS PLC THE KENYA AIRWAYS 2017 GROUP EMPLOYEE SHARE OWNERSHIP SCHEME PERFORMANCE SHARES SCHEME REQUEST FOR REDEMPTION OF UNITS To: The Trustees of the Kenya Airways 2017 Group Employee Share Ownership Scheme (A) I, being the holder of the number of Units specified on the attached certificate(s) for Units, having completed the boxes below: EITHER OR *(I) having retired/resigned from my employment with [insert name of Group Company] request you to transfer to me the Shares represented by such Units; desire such Shares to be registered in my name and agree to hold such Shares subject to the Articles of the Company; and request you to arrange for the Secretary of the Company to enter my name in the Register of Members of the Company and to transfer such Shares to [ ], my nominated central depository agent (as defined in the Central Depositories Act, 2000). *(II) request you to sell some/all of the Shares represented by such Units and to arrange for the net sale proceeds to be paid to me by cheque, transfer or electronic funds transfer. * complete as necessary (B) I/We, being the personal representatives of [ ] the holder of the number of Units specified on the attached certificate(s) for Units, having completed the boxes below confirm I/we hold letters of administration/probate for the estate of [ ] and request you to transfer to me/us the Shares represented by such Units; desire such Shares to be registered in my/our names and agree to hold such Shares subject to the Memorandum and Articles of the Company; and request you to arrange for the Secretary of the Company to enter my/our name in the Register of Members of the Company and to issue and send to me/us at the address below at my/our risk a certificate in respect of such Shares. Number of Units to be redeemed and certificate number (Insert details) Number of Shares to be transferred to my/our name (only if you have left employment) (Insert details) Number of Shares to be sold - 11 -
(Insert details) Name of Employee: Dated: Signed by Unitholder/personal representatives: Full name and address: (in block capitals) Note: During employment with the Company /Group it is not permitted for an employee to exchange Units for Shares. - 12 -