Notice of Meeting

Page turn

Appendix 1 - Taylor Wimpey Performance

Share Plan ('TW Performance Share Plan')

Introduction

The TW Performance Share Plan will be administered by the Remuneration Committee (the 'Committee') of the Company's Board of Directors (the 'Board'). The TW Performance Share Plan provides for the Committee to grant conditional awards over Ordinary Shares in the Company ('Shares') and phantom awards, which entitle the participants to cash payments equivalent to the market value of a specified number of Shares on the vesting of the awards. No consideration is payable by the participant either for the grant or the vesting of awards.

Eligibility

Awards may only be made to Executive Directors or other employees of the Company and its subsidiaries (the 'Group'), selected at the discretion of the Committee.

Timing of grants

The Committee may grant awards within 42 days of the approval of the TW Performance Share Plan by shareholders or following the announcement date of the Company's annual or half-yearly results. The Committee may also grant awards at other times, where there are exceptional circumstances which it considers justify the granting of awards.

No awards may be granted more than 10 years after the approval of the TW Performance Share Plan by shareholders.

Individual grant limit

Except in circumstances which the Committee, after consulting the Board, considers to be exceptional, an individual may not be granted awards in any financial year over Shares having a market value at the award date in excess of 300% of the individual's annual base salary (200% in the case of Executive Directors).

The maximum expected value of awards under both the TW Performance Share Plan and the TW Share Option Plan combined in any financial year for Executive Directors will not exceed the expected value of a TW Performance Share Plan award of 200% of salary (face value).

The Remuneration Committee will retain discretion to determine in exceptional circumstances (such as attracting new hires) an award quantum for Executive Directors in excess of the above maximum quantum. Any enhanced awards made pursuant to such discretion will not exceed 300% base salary.

Share capital limits

Awards may be granted over new issue Shares, treasury Shares or Shares purchased on the market through an employee benefit trust.

No award may be granted under the TW Performance Share Plan if the maximum number of Shares issuable under the award, together with the maximum number of Shares issuable or issued pursuant to awards or options granted under the TW Performance Share Plan or any other employee share plan operated by any Company in the Group in the previous 10 years (excluding any rights which have lapsed or been forfeited under such plans) would exceed 10% of the Company's issued ordinary share capital at the time.

No award may be granted under the TW Performance Share Plan if the maximum number of Shares issuable under the award, together with the maximum number of Shares issuable or issued pursuant to awards or options granted under the Performance Share Plan or any other discretionary share plan operated by any Company in the Group in the previous 10 years (excluding any rights which have lapsed or been forfeited under such plans) would exceed 5% of the Company's issued ordinary share capital at the time.

The above limits include new issue Shares and treasury Shares but not Shares purchased on the market through an employee benefit trust.

Vesting of awards and performance conditions

Awards will normally vest at the end of a performance period of not less than three years, as soon as the Committee has determined the extent to which the applicable performance conditions have been met.

For the first awards granted under the TW Performance Share Plan to Executive Directors, the proportion of each award which vests will depend on two measures of the Company's performance.

Up to half of the Shares subject to the award will vest depending on the Company's total shareholder return ('TSR') over a three-year period compared with two groups of companies:

  • The following 12 industry peer companies: Barratt Developments, Bellway, Berkeley Group, Bovis Homes Group, Galliford Try, Kier Group, Marshalls, Persimmon, Redrow, SIG, Travis Perkins and Wolseley
  • The companies which comprise the FTSE 100 index at the start of the performance period

Equal weighting will be given to each comparator group. The proportion of this portion of the award which vests will be determined according to the following table:

Company's
TSR ranking
Proportion of this
portion of the award vesting
Below median 0%
Median 25%
Between median and
75th percentile 25%-100% pro rata
75th percentile or higher 100%

Up to half of the Shares subject to the award will vest depending on the Company's earnings per share ('EPS') growth over a three-year period compared with the increase in the Retail Prices Index ('RPI') determined according to the following table:

Company's annualised
EPS growth in excess of
annualised RPI increase
Proportion of this
portion of the award vesting
Below 3 percentage points 0%
3 percentage points 25%
Between 3 and 6
percentage points 25%-100% pro rata
6 percentage points or more 100%

The Committee may review the performance conditions for each grant of awards and may apply different conditions to future awards, provided they remain no less challenging and are aligned with the interests of shareholders.

Cessation of employment

As a general rule, an award will lapse if a participant ceases to be employed within the Group before the vesting date. However, if a participant leaves employment because of:

  • the participant's death
  • disability
  • injury
  • the Company or business in which the participant is employed ceasing to be part of the Group
  • other reasons, at the discretion of the Committee

then a part of the participant's award will vest, which will be determined by the Committee depending on the Company's performance and the proportion of the performance period which has elapsed at the date of cessation.

Corporate events

In the event of a takeover, scheme of arrangement or voluntary winding up of the Company (other than an internal corporate reorganisation), all awards will vest immediately. The part of each award which vests will be determined by the Committee depending on the Company's underlying financial performance and the proportion of the performance period which has elapsed.

In the event of an internal corporate reorganisation, awards will be replaced by equivalent new awards over shares in a new holding Company unless the Committee decides that awards should vest on the basis which would apply in the case of a takeover.

Variation of share capital

In the event of any variation of the Company's share capital, a demerger or payment of a special dividend, or such other circumstances as the Committee consider appropriate, the Committee may make such adjustment as it considers fair and reasonable to the number of Shares subject to an award.

Participants' rights

Awards are not transferable, except to a participant's legal personal representatives on the participant's death.

Awards will not confer any shareholder rights until the awards have vested and the participants have received their Shares. However, at the discretion of the Committee, participants may receive a payment (in cash and/or Shares) on or shortly following the vesting of their awards of an amount equivalent to the dividends that would have been paid on those Shares between the time when the awards were granted and the vesting date.

Any Shares allotted when an award vests will rank equally with Shares then in issue, except for rights arising by reference to a record date prior to their allotment.

Awards do not count as part of participants' pensionable salaries for the purpose of employers' contributions to any Group pension schemes or other benefits.

Alterations to the TW Performance Share Plan

The Board, on the recommendation of the Committee, may at any time amend the provisions of the Performance Share Plan in any respect, provided that the prior approval of Shareholders is obtained for any amendments that are to the benefit of participants in respect of the rules governing eligibility, limits on participation, the overall limits on the issue of Shares, the basis for determining a participant's entitlement to, and the terms of, the Shares to be acquired and the adjustment of awards.

The requirement to obtain the prior approval of shareholders will not, however, apply to any minor alteration made to benefit the administration of the TW Performance Share Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control, securities law or regulatory treatment for participants or for any Company in the Group.

Overseas plans

The Board may at any time, without further shareholder approval, establish further plans in overseas territories.

Any such plan must be similar to the TW Performance Share Plan but may be modified to take account of local tax, exchange control, securities law or regulations. Any Shares made available under such plans shall be counted towards the limits on individual and overall participation in the TW Performance Share Plan.

Notice of Meeting