GLOBAL LTIP VESTING GUIDANCE NOTES (VSA) 2013 FOR PARTICIPANTS IN ALL JM COUNTRIES EXCEPT AUSTRALIA, CHINA, JAPAN, RUSSIA, UK AND US Shares which were allocated to you under the Johnson Matthey Long Term Incentive Plan in July 2010 are due to vest on Thursday 25 July 2013 (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 www.computershare.com/jmshareplans. 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 10 in Part A of this document describes how to submit your instruction. IMPORTANT: YOU MUST GIVE YOUR INSTRUCTION TO COMPUTERSHARE BY 9AM (UK TIME) ON MONDAY 22 JULY 2013. 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, information on the JM 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. - 1 -
PART A 1. What choices will I have regarding my shares on the Vesting Date? Depending on which country you are in, you can elect to sell all shares, sell a sufficient number of shares to cover your tax liability (this is known as a sell to cover ) or retain all shares, these are explained more fully below. Some countries are withholding countries and some are non-withholding countries. Please see Section 2 below for a list of withholding and non-withholding countries. (i) Sell All Shares - this applies to all countries Computershare will sell all of your shares on the Vesting Date. Withholding Countries As your employer is required to withhold tax and/or social security from your sale proceeds, the sale proceeds, after deduction of dealing fees, will be sent to your employer for processing through payroll. The net amount, after deduction of tax and/or social security, will be paid to you by your employer. Non-withholding Countries As your employer is not required to withhold tax and/or social security from your sale proceeds, the sale proceeds, after deduction of dealing fees, will be sent directly by Computershare to your personal bank account. You will be asked to provide your personal bank details when you submit your instruction. (ii) Sell to Cover - sell a sufficient number of shares to cover your income tax and/or social security liability and retain the balance of shares in a Vested Share Account held with Computershare - this applies to withholding countries only Computershare will sell a sufficient number of vested shares to cover your income tax and/or social security liability and will transfer the remaining shares to the Vested Share Account ( VSA ). Computershare has been provided with your income tax and/or social security rates by your employer. Based on these rates, Computershare will calculate how many vested shares will need to be sold on the Vesting Date to cover your income tax and/or social security liability. As your sale proceeds are unlikely to exactly match this liability, it is possible that there will be a small amount of residual sale proceeds to pay to you after deduction of dealing fees. This will be paid to you by your employer. (iii) Retain all Shares - this applies to non-withholding countries only As your employer is not required to withhold income tax and/or social security on the Vesting Date, you can retain all of your vested shares which will be put into the VSA. 2. Is my employer required to withholding income tax and/or social security when my shares vest? A tax and/or social security liability may arise on the Vesting Date on the value of all of your vested shares. Your employer may be required to withhold this tax and/or social security liability. Alternatively, you may - 2 -
be required to meet your tax liability via your personal tax return and in which case your employer will not be required to make any withholding. Withholding Countries If you are a participant in one of the following countries, your employer will be required to withhold tax and/or social security: Argentina Belgium Brazil Canada Finland France Germany India Ireland Italy Malaysia Mexico Netherlands South Africa South Korea Sweden Non-withholding Countries If you are a participant in one of the following countries, your employer will not be required to withholding tax and/or social security and you may be required to meet your tax liabilities via your personal tax return: Denmark Hong Kong Switzerland Taiwan Further Tax Information - Vesting Please refer to the country-specific Employee Tax Sheets for more detailed tax information. Each country has its own Employee Tax Sheet; please ensure you refer to the correct Employee Tax Sheet for your country. The Employee Tax Sheets can be found on the Johnson Matthey Employee Share Plan website under Company Info - Plan Documentation - LTIP Release July 2013 - Employee Tax Sheets. These LTIP Vesting Guidance Notes and the Employee Tax Sheets 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. 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 JMPLC 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 Friday 26 July 2013 (under My Holdings - Portfolio ). The sale price will also appear on your Advice Note which you will receive on Friday 26 July 2013 (via the Johnson Matthey Employee Share Plan website). 4. What dealing fees will I incur if I sell shares on the Vesting Date? Dealing fees of 0.25% of the gross sale proceeds of shares sold (minimum 15.00) will be deducted by Computershare from your sale proceeds before they are remitted either to your employer or to your personal bank account. Dealing fees are payable whether you sell some or all of your shares. - 3 -
5. In what currency will I receive my sale proceeds? The sale proceeds will be converted from sterling into your local currency. Withholding Countries If you are in a withholding country, the sale proceeds will be remitted by Computershare to Johnson Matthey UK. Johnson Matthey UK will convert the proceeds into the relevant local currency before sending them to your employer. The exchange rate used by Johnson Matthey UK to convert the sale proceeds to your local currency will be posted on the Johnson Matthey Employee Share Plan website (under Company Info - Plan Documentation - LTIP Release July 2013 - General ), for information, on or before Tuesday 30 July 2013. Non-Withholding Countries If you are in a non-withholding country, the sale proceeds will be converted to your local currency by Computershare. The exchange rate used by Computershare to convert the sale proceeds to your local currency can be found on the Johnson Matthey Employee Share Plan website (under Transaction History ) three or four business days after the Vesting Date. 6. If my proceeds are being paid to a non-uk bank account, what fees will I incur? Withholding Countries There will be no fees payable as you are receiving your sale proceeds from your employer. Non-Withholding Countries Computershare will deduct a fixed administration fee of 17.50 from your sale proceeds. For further details on payments made to non-uk bank accounts by Computershare (including details of the currency conversion commission) please refer to Computershare s Global Payment Service Information Sheet which can be found on the Johnson Matthey Employee Share Plan website under Company Info - Plan Documentation - Global Payment Service. 7. What is the Vested Share Account? The Vested Share Account ( VSA ) is a nominee account administered by Computershare in the UK and is available to participants who may wish to retain some or all of their shares. More information on the VSA can be found in Part B. Withholding Countries If you instruct Computershare to sell a sufficient number of your shares on the Vesting Date to cover your income tax and/or social security liability, the balance of shares will be put into the VSA. Non-withholding Countries If you instruct Computershare to retain all of your shares they will be put into the VSA. - 4 -
Tax impact if you choose to retain shares 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. Any dividend income received on retained shares may be subject to tax. Further Tax Information - Dividends and Sale of Shares from VSA Please refer to the country-specific Employee Tax Sheets for more detailed tax information. Each country has its own Employee Tax Sheet; please ensure you refer to the correct Employee Tax Sheet for your country. The Employee Tax Sheets can be found on the Johnson Matthey Employee Share Plan website under Company Info - Plan Documentation - LTIP Release July 2013 - Employee Tax Sheets. 8. What happens if I am automatically covered by the JM Share Dealing Code? If you are automatically covered by the Johnson Matthey Share Dealing Code, Johnson Matthey 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 in the VSA; or any additional transactions in JMPLC 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. Leavers are not subject to the Johnson Matthey 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 Share Dealing Code please contact the Johnson Matthey Company Secretarial Department, City Office, London on +44 (0) 20 7269 8431. The Johnson Matthey 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 www.computershare.com/jmshareplans 9. I have left Johnson Matthey - what choices will 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 will need to give your instruction to Computershare as described above. You have the same choices as employees. The VSA is available to former employees of Johnson Matthey as well as current employees. 10. How do I submit my instruction to Computershare? Once you are ready to submit your instruction to Computershare, please follow the procedures below: - 5 -
(1) Click on the flashing LTIP 2013 Vesting button on the right hand side of the Portfolio page. If you are a participant in more than one JM 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 can be found under the Company Info tab of the JM Employee Share Plan website (under Plan Documentation - LTIP Release July 2013 - General ). IMPORTANT: YOU MUST GIVE YOUR INSTRUCTION TO COMPUTERSHARE BY 9.00AM (UK TIME) ON MONDAY 22 JULY 2013. 11. What if I fail to give my instruction? Withholding Countries If you do not place an instruction before 9.00am (UK time) on Monday 22 July 2013, a sufficient number of shares will be sold on your behalf on the Vesting Date to cover your income tax and/or social security liability (and dealing fees). The balance of shares remaining after the sale will be transferred to the VSA. Non-withholding Countries If you do not place an instruction before 9.00am (UK time) on Monday 22 July 2013, all of your shares will be transferred to the VSA. 12. 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 by 9.00am (UK time) on Monday 22 July 2013. 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 Elections. You will need to enter your PIN. 13. 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 in the UK) on +44 (0)870 703 6305 or johnson.matthey@computershare.co.uk. The Helpline is open from 8.30am to 5.30pm (UK time) Monday to Friday. Johnson Matthey 4 July 2013-6 -
PART B Johnson Matthey JM Long Term Incentive Plan - July 2013 Vesting Vested Share Account 1. What is a 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 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 2013 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 JMPLC 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 JMPLC 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 JMPLC 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. - 7 -
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 www.computershare.com/jmshareplans. To log on 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 Share Dealing Code). There is no minimum or maximum holding period. 7. If I choose to put my July 2013 LTIP shares in the VSA, when will they credit my VSA account? Your shares will be put into the VSA on 26 July 2013, 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) 26 July 2013. Please note that if you are automatically covered by the JM 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 JMPLC 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 22. - 8 -
13. Will I receive a dividend tax voucher? Within 14 days of each dividend payment, you will be sent an email 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. 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 JMPLC general meetings? Yes. You do not have an automatic right to attend JMPLC 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 email describing how you can direct the Nominee to vote on your behalf. 16. What if I leave JM, 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 JM, can I put my vested shares into the VSA? Yes, even though you have left JM you can still put your vested shares into the VSA. 18. Who is providing the VSA? JM 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 JMPLC 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 JM share plan (for example, the Share Incentive Plan). - 9 -
In future, it might be possible for you to transfer shares which have previously arisen from JM 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 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 15.00 Sales proceeds paid to non-uk bank accounts in currencies other than sterling A fixed 17.50 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 Dividend reinvestment Cash dividends received by the Nominee on your behalf are used to buy further JMPLC shares. Two amounts are payable on the total value of the shares acquired: 0.20% dealing fee (no minimum) 0.5% stamp duty - 10 -
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 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, JM 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 JMPLC 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 www.computershare.com/jmshareplans. 24. Do I need to get clearance to deal if I want to sell my VSA shares? If you are automatically covered by the JM 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: Australia 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 JM 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 - 11 -
country you are moving to. This applies if you relocate on a short-term assignment, expatriate assignment or on a permanent basis. 28. Will the VSA run indefinitely? It is JM 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 2013-12 -