Untitled - David Kronemyer

. TERMS
Ordinary Shareholders who were on the register at the close ofbusiness on l4 July, l9B8 are
entitled to elect to receive one new Ordinary Share credited as fully paid for every 40.05
Ordinary Shares registered in their names on such date ("the fomula") instead ofthe final
dividend of l6p per Share.
['or the purpose of this election, the price ofeach new Ordinary Share has been taken as
640.8p being the average of the middle market quotations for the Company's Ordinary Shares
on The Stock Exchange for the five business days commencing 4 July' 1988 (the day on which
the quotation became ex-dividend), as derived from the Daily Official List.
New Ordinary Shares issued pursuant to the Scrip Dividend Scheme ("Scrip Shares") will
be identical to and will rank as from issueparipossu in all respects with the existing Ordinary
Shares in issue,
Scrip Shares issued in lieu ofthe final dividend will not themselves rank for the final
dividend recommended on 29 June, 1988.
Shareholders with an existing holding ofless than 4l Ordinary Shares should not
complete the Notice ofElection.
The enclosed Notice ofElection will apply only to the final dividend recommended on
29 June, 1988 and may be exercised by Shareholders in respect ofthe whole or any part of
their holdings but such election may be exercised only in respect ofa whole number ofShares.
Although in applying the formula, fractions ofScrip Shares will not be issued, it is open
to any holder of Ordinary Shares to exercise the election in respect ofthat number of Ordinary
Shares which produces the smallest possible fraction and to receive a cash dividend on the
balance ofthe holding on which no election has been made.
Exarnples of effect of election :
Shareholder A has l6l Ordinary Shares and would be entitled to receive a total cash dividend
of f25.76. He elects to receive Scrip Shares in respect ofthe whole ofhis holding ofOrdinary
Shares. He will receive 4 Scrip Shares.
Shareholder B has 500 Ordinary Shares. He elects to receive Scrip Shares in respect of
ll2l out ofhis holding ofOrdinary Shares. He will receive 8 Scrip Shares and a dividend of
f,28.64 in cash which comprises the dividend payable in respect ofthose Ordinary Shares for
which he has made no election-
No dividends will be payable in respect offractions ofOrdinary Shares. However, a
dividend will be paid on any whole share or shares subject to a notice ofelection which do not
qualify forthe issue ofa Scrip Share.
2. TAXATION
The Board has been advised that, under current United Kingdom legislation, the taxation
consequences forcertain shareholders ofelectingto receive Scrip Shares instead ofa cash
dividend will broadly be as outlined below.
Individuals:
Individuals electing to take Scrip Shares instead ofa cash dividend will be treated as having
received gross payments ofan amount which, when reduced by income tax at the basic rate,
(currently 25%), is equal to the "Cash Equivalent" ie. the cash dividend which would have
been received had they not elected to take up Scrip Shares. Thus, ifan individual receives
Scrip Shares worth f75 he will be treated as receiving gross income of5100 and as having paid
income tax off25 on that gross amount. The Inland Revenue may substitute as the Cash
Equivalent the market value ofthe Scrip Shares on the day of first dealing on The Stock
Exchange ifthis is subsrantially different from the amount ofthe Cash Equivalent