1998 Share Issue

Key Dates

Share Offer Reference Price

The offer reference price was FF205.33 and the exchange rate was fixed at FF9.94 to the . This gives a reference price of 20.66 per share.

From 1 January 1999, the Thomson-CSF Closing Share Price has been quoted in Euros. 1E = FF 6.55957, making the original share offer price of FF205.33, 31.30E

Share Allocation

The 1998 Employee share issue was oversubscribed. A scale back approach was implemented and administered by IRG (the independent trustees). Allocation statements and refund cheques will now be sent to employees as soon as possible, and beneficial ownership of the shares will pass to purchasers with effect from 11 September 1998.

The French Government reduced the allocations according to the following formula.

Shares applied for Percentage allocated
1 to 40 100%
41 to 200 40%
201 to 2000 10.77%
2001+ none

Where applications have been made under more than one formula (e.g. ThomClassic and ThomExpress) the shares will be allocated on a pro-rata basis.

Example 1

Person A applied for 300 shares under ThomClassic:

They will receive (40 x 100%)+(160 x 40%)+(100 x 10.77%) = 114.77, rounded to 114 shares.

Example 2

Person B applied for 200 shares, split between ThomClassic (60 shares) and ThomExpress (140 shares):

They will receive (40 x 100%)+(160 x 40%)+(0x 10.77%) = 104 shares in total.

These will be allocated under the different schemes as follows:

ThomClassic (60/200) x 104 = 31.2, rounded to 31 shares

ThomExpress the balance, i.e. 104 - 31 = 73 shares

Tax Position

The taxable benefit is based upon the discount offered against the market value. In the final event, the Inland Revenue agreed to take the market value on 11 September 1998 as the basis for this calculation which was a sterling value of 21.70 per share.

There is then a concession from the Inland Revenue based upon the length of time an employee is required to keep the shares. This is 5% for Thomexpress (provided that the shares are not transferred within one year of allocation), 20% for Thomclassic and 25% for Thomclassic UK.

So the calculation is:

Market Value - Discount - Amount paid = Taxable Benefit

For example, an employee who bought 30 shares under Thomclassic UK :

Market Value = 651.00 (A)
Tax-free discount @ 25% = 162.75 (B)
Amount paid = 354.13 (C)
Taxable benefit = (A) - (B) - (C) = 134.12

Please note that no taxable benefit arises for individuals who purchased shares under the Thomexpress offer as long as they retain the shares for twelve months from 11 September 1998.

The calculation is shown on your payslip. In order to achieve the correct result, the amount of the benefit "SHAREBEN" is shown in the first column under "Pay and Allowances". The system then calculates the tax and National Insurance payable, a nd the benefit amount is added to "Taxable Gross" in the third column under "Balances and Totals to date". A counterbalancing deduction called "SHAREDED" is then made in the second column. The result should be your normal pay, with a higher tax (and in some cases National Insurance) deduction than usual.

If you have any queries, please contact your local HR department who will try to resolve your query.