Bunzl plc Irish Sharesave Plan Explanatory Guide For Employees March 2015
How the Bunzl Irish Sharesave Plan works.... You are invited to join the Bunzl Irish Sharesave Plan This document is your invitation and guide to the Bunzl Irish Sharesave Plan ( the Plan ). To be eligible to join the Plan you must be a full or part-time employee or executive director of Bunzl plc or any participating subsidiary. You must also have been continuously employed for at least 3 months at the date of grant. What is a sharesave plan? It is an agreement whereby you save a fixed amount from your net pay of between 12 and 500 each month for three years. The savings will be held on your behalf by Ulster Bank Ireland Limited and at the end of the three year period you have the option to use your savings and the bonus earned to purchase the Company's shares at the option price. This price (in UK ) is 20% less than the market value of the shares shortly before the issue of this invitation. All savings will be held in a Bunzl bank account. Ulster Bank Ireland Limited has a legal obligation to participants to account for this money. If the share price at the end of the three year period does not make using your savings to buy shares ( exercising your option ) worthwhile (i.e. the share price at the time of exercise is lower than the option price), there is no risk as you can simply withdraw your savings together with the tax-free bonus. Please note that the value of shares can fall as well as rise. How does the Plan work? There are two parts to the Plan: (A) THE SAVINGS CONTRACT During the three year savings period you will make 36 monthly contributions. At the end of the three year savings period Ulster Bank Ireland Limited will add to your account a tax-free bonus equal to 0.18 times your monthly contribution. You then have up to six months to make the following choices: (i) purchase the shares using all of your savings and bonus; (ii) purchase the shares and arrange for the immediate sale of all or some of the shares allotted; or (iii) withdraw your savings and the bonus. If you purchase the shares, but do not sell them immediately, you can sell them at any time subject to the Company's rules on share dealing.
(B) THE SHARE OPTION When you join the Plan you will be granted an option to buy a number of the Company's shares in the future at a price fixed before this invitation was issued. The maximum number of shares you can purchase at the end of your savings contract is calculated by dividing your total savings and bonus by the UK / exchange rate set for the offer (stated in your invitation letter) and then by dividing the result by the fixed UK sterling option price (stated in your invitation letter). When the option is granted you will be sent an option certificate which confirms the price that you will pay for the shares, when you will be able to buy them and the amount of money required to buy them. You must keep the option certificate in a safe place as you will need it when you come to buy your shares. The number of shares over which the Company can grant options is limited. If applications are received for more than the permitted number there will be a scaling down, which may result in you saving less than you intended and so receiving a right to buy fewer shares. Once an option is exercised and you become a shareholder, you will have all the rights associated with being a shareholder for the time you keep such shares (including voting rights and a right to dividends). The shares received may be either newly issued shares or existing shares purchased by the Company. What is the option price? This is the fixed price that you will pay for your shares, should you decide to purchase them. It will be shown on your invitation letter and is calculated by taking the UK midmarket price of a Bunzl ordinary share shortly before the issue of the invitation, discounted by 20%. This is the price that you will pay for the Bunzl shares in three years' time. How much can you save? You may save a fixed amount between 12 and 500 per month in multiples of 1. Please note that the maximum contribution you may make at any one time across all savings contracts linked to the Irish Sharesave Plan is 500 per month. The amount could change in the event of your option being scaled down, which will occur only if the applications received are excessive. Once you have decided how much you wish to save this cannot be changed, so you should choose an amount which you feel you will be able to afford. Your monthly contribution is taken directly from your net pay and paid over to Ulster Bank Ireland Ltd. Deductions from pay for a May contribution will commence in April.
You contribute over the savings period You can miss up to six monthly contributions over the time that you save. To do so, you need to ask your payroll department not to make a deduction from your salary. If you do miss a payment, the end of your savings contract will be put back a month for each month that you miss, so the earliest date you can receive the bonus and exercise your option is delayed accordingly. If you miss more than six monthly contributions, you will lose your right to buy the shares and to receive the tax-free bonus. However, you will be entitled to withdraw your savings plus any interest. You can withdraw from the Plan at any time but your option to buy shares will normally be forfeited and you will not receive the tax-free bonus. If you withdraw after 12 monthly contributions have been made, all your contributions will be returned to you plus tax-free interest accrued at a rate of 0.15% per annum. If you withdraw from the Plan before 12 months, all your contributions will be returned to you, but no interest will be payable. If you leave the Company before the end of the savings contract you will not normally be able to buy shares. However you can buy the shares if you leave because: you are injured; you are disabled; you are made redundant; you retire with the agreement of Bunzl (between the age of 60 to 66 provided this is at your contractual retirement age) or reach 65; or the business employing you or the company for which you work is sold out of the Bunzl Group. In such circumstances the number of shares that you will be able to buy will depend on the amount of your monthly savings and the date of your leaving. You will be able to buy the shares during the six months after your leaving date and continue your contributions during the six month period. In the event of your death whoever you choose to look after your estate can buy the shares for the person or persons named in your will. The number of shares that will be available will depend on the amount of your monthly savings and the date of your death. Your representative will have 12 months from the date of your death, or maturity date if you die within 6 months following the maturity date, during which they can buy the shares. If they decide not to buy the shares, the savings and any interest will go to your beneficiaries, as part of your estate.
How many shares will you be able to buy in three years time? This depends on: The amount you save each month plus the bonus The UK sterling discounted option price that has been set for the invitation The UK sterling/euro exchange rate that has been set for the invitation and the rate prevailing at the time you come to exercise your option To perform the calculation: (1) multiply the amount you wish to save each month by 36 (the number of monthly payments that you will be required to make) and add the bonus payable after 3 years; (2) divide this by the number of Euros equivalent to UK 1 (stated in your invitation letter); (3) divide the result by the fixed UK sterling option price (stated in your invitation letter); and (4) round down to the nearest whole number of shares. Here are two examples: You wish to save 100 every month You wish to save 350 every month (1) 100 x 36 = 3,600 (1) 350 x 36 = 12,600 (2) Add bonus after 3 years (0.18 x monthly contribution) = 3618 (2) Add bonus after 3 years (0.18 x monthly contribution) = 12,663 (3) Divide by exchange rate ( 1.30 in example) (4) Divide by option price ( 14.50 in this example) = 2,783.07 (3) Divide by exchange rate ( 1.30 in example) = 191 shares (4) Divide by option price ( 14.50 in this example) = 9,740.76 = 671 shares The option will be over 191 Bunzl shares at an option price of 14.50 per share. The option will be over 671 Bunzl shares at an option price of 14.50 per share. Assuming an exchange rate of UK 1 = 1.30 when the assumed discounted option price of UK 14.50 is set Please remember that the option price and exchange rate stated in your invitation letter will be used in place of the assumed figures. Please note that the maximum number of shares you can buy will be set at the outset by reference to the exchange rate stated in your invitation letter. Any fluctuation in the to
exchange rate in favour of the will not increase the number of shares you may acquire under option. Furthermore, you may only exercise your option to the extent the accumulated savings and bonus permit (i.e. should the to exchange rate move to the detriment of the as a result of which your savings and bonus is worth fewer UK, the extent to which you may exercise your option will be scaled back accordingly). What is your tax position? Under current legislation all interest and bonuses paid into the Sharesave account are taxfree. On the grant of the Option There is no tax payable on the grant of the Option. Exercise of the Option On the exercise of your Option, you will be liable for the Universal Social Charge (normally at progressive rates of up to 8%) and employee's Pay Related Social Insurance (normally at a rate of 4%) on the difference between the value of the shares you acquire and the price you pay for them. It is your employer s obligation to account for this to the Revenue on your behalf. More information on the choices available to you regarding satisfying your tax liability will be provided closer to the maturity date. On the sale of shares When you sell your shares, you may also become liable to Capital Gains Tax (currently at a rate of 33%) if the gains (the profit from the sale of your shares) you make along with other gains in the tax year are more than a certain amount (currently 1,270). Remember, tax legislation can be changed by the Government and the rules that apply today may be different when you come to sell your shares. Only in exceptional circumstances will income tax be payable on the exercise of an option. This occurs for example if your employing company leaves the Group within three years of the date of grant. How do you join? Just complete the application form with the amount you wish to save and send it to your Plan Manager. If you are unsure who your Plan Manager is, please ask your manager. It is your responsibility to ensure that you understand the rules of the Plan and the conditions of your Sharesave contract before sending in your application. If you have any queries, please contact your Plan Manager.
It is also your responsibility to ensure that the application form (which includes the Ulster Bank Ireland Ltd savings contract) is returned to your Plan Manager by 12 noon on 23 March 2015. Bunzl cannot be responsible for late applications received after the closing date. Important note This leaflet contains a brief explanation of the rules of the Plan but does not override those rules, which are the legal document governing your participation. In the event of any conflict between this leaflet and the rules, the rules will take precedence. You can get a copy of the rules from your local Plan Manager. Your rights will be governed by Irish law. Please note that your rights and obligations under the terms of your office or employment with Bunzl will not be affected by your participation in the Plan or any right which you may have to participate in it and participation in the Plan does not confer on you additional rights under your contract of employment and does not constitute part of your remuneration. The offer of options under the Plan is discretionary and the Plan may be withdrawn without notice and without prejudice to existing options. Further information Further information can be obtained, in the first instance, from your local Plan Manager whose details will be available from your employing company. Further information on the Company can be obtained from the Company s website www.bunzl.com.