SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Learmonth & Burchett Management Systems Plc
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[Learmonth & Burchett Management Systems Plc Letterhead]
October 16, 1996
To the holders of our ordinary shares and American Depositary Receipts ("ADRs"):
It is our pleasure to invite you to the Annual General Meeting of
Learmonth & Burchett Management Systems Plc to be held on Friday, November 15,
1996 at 11:00 a.m. central standard time ("CST"), at the Company's executive
offices located at 1800 West Loop South, Suite 900, Houston, Texas 77027.
Whether or not you plan to attend, and regardless of the number of
shares or ADRs you own, it is important that your shares be represented at the
meeting. You are accordingly urged to sign, date and return your proxy promptly.
To be effective, holders of ordinary shares must return the proxy to the
Company's registered office at Evelyn House, 62 Oxford Street, London W1N 9LF
England by 4:00 p.m. London time (11:00 a.m. CST) on Wednesday, November 13,
1996. ADR holders should return the ADR proxy to the depositary, Morgan Guaranty
Trust Company of New York ("Morgan"), by 3:00 p.m. eastern standard time on
Monday, November 11, 1996 in the envelope provided by Morgan, which requires no
postage if mailed in the United States. U.S. holders of ordinary shares may
return the proxy so that it is received at the Company's executive offices in
Houston by 5:00 p.m. CST on Monday, November 11, 1996; the Company has made
arrangements to send the materials via courier to its U.K. offices by the
deadline. Your return of a proxy in advance will not affect your right to vote
in person at the meeting.
We hope that you will be able to attend the meeting. The officers and
directors of Learmonth & Burchett Management Systems Plc look forward to seeing
you at that time.
Sincerely,
GERALD N. CHRISTOPHER
Chairman of the Board
of Directors
MICHAEL S. BENNETT
Director and
Chief Executive Officer
-1-
<PAGE>
LEARMONTH & BURCHETT
MANAGEMENT SYSTEMS PLC
1800 West Loop South
Suite 900
Houston, Texas 77027
---------------------
NOTICE OF ANNUAL GENERAL MEETING
To be held November 15, 1996
---------------------
The Annual General Meeting of Learmonth & Burchett Management Systems
Plc (the "Company") will be held at the Company's executive offices located at
1800 West Loop South, Suite 900, Houston, Texas, on Friday, November 15, 1996 at
11:00 a.m. central standard time ("CST") for the following purposes:
As ORDINARY BUSINESS:
1. To receive and adopt the Directors' Report and the audited
accounts for the year ended April 30, 1996.
2. To re-elect Gerald N. Christopher, who was appointed as a
Director on August 2, 1996.
3. To re-elect Michael S. Bennett, who was appointed as a
Director on August 2, 1996.
4. To re-elect David B. Rodway, who retires as a Director by
rotation.
5. To re-elect Rainer H. Burchett, who retires as a Director by
rotation.
6. To re-appoint the auditors Price Waterhouse to hold office
until the next Annual General Meeting and to authorize the
Directors to fix their remuneration.
7. To approve the payment of fees to the non-Executive Directors
of the Company of an aggregate of up to (pound)55,000 in the
year to April 30, 1997 (being in excess of the (pound)40,000
limit currently set forth in the Company's Articles of
Association).
As SPECIAL BUSINESS, to consider, and if thought fit to pass, the
following resolutions, of which Resolutions 8, 9, 10, 11 and 12 will be proposed
as Ordinary Resolutions and Resolution 13 will be proposed as a Special
Resolution:
8. To approve the adoption of the 1996 Equity Incentive Plan.
9. To approve the adoption of the 1996 U.S. Employee Stock
Purchase Plan.
-1-
<PAGE>
10. To approve the adoption of the 1996 Non-employee Directors'
Share Option Plan.
11. To approve an amendment to the Executive Share Option Scheme
and to certain option certificates relating to options granted
thereunder.
12. To authorize the Directors to allot shares.
13. To approve disapplication of preemptive rights of holders of
ordinary shares.
The full verbatim text of each of the resolutions numbered 12 and 13
above is set out on pages 36-37 of the accompanying Proxy Statement and should
be deemed to be incorporated in this Notice.
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE SIGN AND DATE THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
A shareholder who is entitled to be present and vote at the Annual
General Meeting may appoint a proxy to attend and vote in his/her stead. Any
proxy so appointed need not be a shareholder. To be effective, forms of proxy
must be deposited at the Company's registered office by 11:00 a.m. CST (4:00
p.m. London time) on Wednesday, November 13, 1996. The registered office of the
Company is located at Evelyn House, 62 Oxford Street, London W1N 9LF England.
For the convenience of U.S. holders of ordinary shares (not ADRs), the Company
will send to its registered office all proxies received at its Houston
headquarters by 5:00 p.m. CST on Monday, November 11, 1996. ADR holders should
return the ADR proxy to the depositary, Morgan Guaranty Trust Company of New
York ("Morgan"), by 3:00 p.m. eastern standard time on Monday, November 11, 1996
in the envelope provided by Morgan, which requires no postage if mailed in the
United States. Completion of the proxy card does not preclude a shareholder from
attending and voting at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Stephen E. Odom
Company Secretary
October 16, 1996
-2-
<PAGE>
LEARMONTH & BURCHETT
MANAGEMENT SYSTEMS PLC
1800 West Loop South
Suite 900
Houston, Texas 77027
---------------------
PROXY STATEMENT
ANNUAL GENERAL MEETING
---------------------
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Learmonth & Burchett Management Systems Plc (the "Company") for use
at the Annual General Meeting ("AGM") to be held at the Company's executive
offices located at 1800 West Loop South, Suite 900, Houston, Texas 77027 on
Friday, November 15, 1996 at 11:00 a.m. CST and any adjournments thereof.
Holders of ordinary shares of 10 pence each in the capital of the
Company ("Ordinary Shares") on the Register of Members at the date of the AGM
will be entitled to vote at the AGM. On October 10, 1996 (being the latest
practicable date prior to the printing of this document), there were 25,538,720
Ordinary Shares in issue, the holders of which are entitled on a poll to one
vote per share on each matter to come before the AGM. Proxies properly executed
and returned will be voted at the AGM in accordance with any directions noted
thereon or, if no direction is indicated, proxies will be voted FOR receiving
and adopting the Report and Accounts, FOR election of each of the directors, FOR
appointment of the auditors, FOR approval of the increase in the aggregate level
of the non-Executive Directors' remuneration, FOR adoption of 1996 Equity
Incentive Plan (the "Equity Incentive Plan"), FOR adoption of 1996 U.S. Employee
Stock Purchase Plan, FOR adoption of 1996 Non-employee Directors' Share Option
Plan, FOR approval of amendment to Executive Share Option Scheme and to certain
option certificates relating to options granted thereunder regarding new vesting
arrangements, FOR authorizing the Directors to allot shares and FOR
disapplication of preemptive rights. Proxies will be voted in the discretion of
the holders of the proxy with respect to any other business that may properly
come before the meeting and all matters incidental to the conduct of the
meeting. Any shareholder signing and delivering a proxy may revoke it at any
time before it is voted by delivering to the Company Secretary a written
revocation or a duly executed proxy bearing a later date than the date of the
proxy being revoked. Any shareholder attending the meeting in person may revoke
his or her proxy and vote his or her shares at the meeting. In accordance with
the terms of the Company's American Depositary Receipts, holders of ADRs may
instruct the Depositary, Morgan Guaranty Trust Company of New York, how the
American Depositary Shares (each of which represents two ordinary shares)
underlying their ADRs should be voted.
This Proxy Statement was mailed to shareholders on or about October 16,
1996.
-1-
<PAGE>
PROPOSAL NUMBER 1
RECEIVING AND ADOPTING THE REPORT AND ACCOUNTS
In accordance with the requirements of the UK Companies Act 1985, the
Company has prepared a Directors' Report and Audited Accounts, a copy of which
is enclosed with this Proxy Statement and which is required to be laid before
the Company in General Meeting. Proposal Number 1 is to adopt the Directors'
Report and Audited Accounts.
THE BOARD OF DIRECTORS RECOMMENDS
RECEIVING AND ADOPTING THE REPORT AND ACCOUNTS
-2-
<PAGE>
PROPOSAL NUMBERS 2 THROUGH 5
ELECTION OF DIRECTORS
Four directors are to be proposed for election at the 1996 AGM. Unless
instructions are given to the contrary, it is the intention of the persons named
as proxies to vote the shares to which each proxy relates FOR the election of
each of the nominees listed below. All of the nominees named below are presently
serving as directors of the Company and are anticipated to be available for
election and able to serve. Two of the nominees were first elected to the Board
at a meeting of the Board of Directors in Houston, Texas on August 2, 1996, and,
in accordance with the Company's Articles of Association, must be re-elected by
the Shareholders at the AGM.
Set forth below is certain information concerning the nominees and
incumbent directors:
- --------------------------------------------------------------------------------
New Nominees for Election at the 1996 Annual General Meeting
- --------------------------------------------------------------------------------
Gerald N. Christopher - Mr. Christopher has served as Chairman and
Director of Learmonth & Burchett Management Systems Plc since August 2, 1996. He
previously held the positions of President and Chief Executive Officer of Amber
Wave Systems, Inc., Extension Technology and Channel Computing. Additionally, he
was the Chief Financial Officer of Bachman Information Systems, Inc.
Michael S. Bennett - Mr. Bennett has served as the President, Chief
Executive Officer and Director since August 2, 1996. Mr. Bennett served as the
President and Chief Executive Officer of Summagraphics until the time of its
acquisition by Lockheed Martin's CalComp subsidiary. Prior to Summagraphics, Mr.
Bennett served as Senior Executive with Dell Computer and Chief Executive
Officer of several high technology organizations. He also has spent over 12
years in various capacities with Digital Equipment Corporation in both domestic
and international positions.
- --------------------------------------------------------------------------------
Current Directors Whose Terms Expire in 1996 and
Nominees for Election at the 1996 Annual General Meeting
- --------------------------------------------------------------------------------
David B. Rodway - Mr. Rodway has served as Senior Vice
President-Development of the Company since 1994 and as a Director since 1991.
Mr. Rodway joined the Company in 1990 as Associate Director. Prior to joining
the Company, Mr. Rodway served as Research and Development Director of Hugin
Sweda International, a supplier of retail information systems, and prior to that
was Director of Software Sciences, a systems contractor and subsidiary of Thorn
EMI, a U.K.-based conglomerate, responsible for research and development.
-3-
<PAGE>
Rainer H. Burchett - Mr. Burchett has served as a Director of the
Company since 1977 and as its Chairman until his resignation as such on August
2, 1996. Mr. Burchett co-founded the Company in 1977. Prior to founding the
Company, he was employed by BIS Applied Systems, a consulting company.
- -------------------------------------------------------------------------------
Incumbent Directors (Not Up for Re-election)
- -------------------------------------------------------------------------------
G. Felda Hardymon - Mr. Hardymon has served as a Director since 1994.
Mr. Hardymon has served as a General Partner of Bessemer Venture Partners, a
group of venture capital funds, since 1981. Prior to joining Bessemer, Mr.
Hardymon was Vice President of Business Development Services, Inc., the venture
capital subsidiary of General Electric Company. He serves on the board of Video
Server, Inc., a supplier of networking equipment and associated software for
multimedia conferences.
Roger A. Learmonth - Mr. Learmonth has served as a Director since
co-founding the Company in 1977. Mr. Learmonth served as the Company's Chief
Executive Officer until October 1994. Prior to founding the Company, Mr.
Learmonth was employed by BIS Applied Systems.
Information Concerning the Board and Its Committees
The Board of Directors held 21 meetings in the fiscal year ended April
30, 1996. The Board has two standing committees: the Audit Committee and the
Remuneration Committee.
The members of the Audit Committee in the fiscal year ended April 30,
1996 were Messrs. O'Hara (Chairman), Burchett and Tebbs and for the fiscal year
ended April 30, 1997 are Messrs. Hardymon and Christopher.1 The Audit Committee
meets from time to time and the independent accountants of the Company may, at
any time they consider appropriate, request a meeting. The responsibilities of
the Audit Committee are to consider and recommend the appointment of the
Company's independent accountants, approve the audit fee, consider any questions
of resignation or dismissal of the auditors, discuss with the independent
accountants the nature and scope of the audit, review the quarterly, half-year
and annual financial statements before submission to the Board, discuss problems
and reservations arising from the quarterly and interim unaudited accounts and
annual audits and any other matters the independent accountants may wish to
discuss, review the independent accountants' management letter and management's
response, review the Company's statement on internal control systems and
consider the major findings of internal investigations and management's
response.
- --------
1 Messrs. O'Hara and Tebbs resigned as Directors in January and July, 1996,
respectively.
-4-
<PAGE>
The members of the Remuneration Committee in the fiscal year ended
April 30, 1996 were Messrs. Tebbs (Chairman), Burchett, Hardymon and O'Hara. On
August 2, 1996, the Board of Directors of the Company voted to reconstitute the
Remuneration Committee with Board members Messrs. Christopher, Hardymon and
Burchett. The Remuneration Committee meets from time to time to approve and
recommend to the Board the remuneration of the Executive Directors (Messrs.
Burchett, Bantleman (1996), Rodway and Bennett (1997)) and key personnel. In
particular, the Remuneration Committee is required to approve any new service
agreement entered into between the Company and any of the Executive Directors.
During fiscal 1996, both committees met without the presence of Mr. Burchett
from time to time, for example, when determining Mr. Burchett's own
remuneration. The Remuneration Committee also sets and approves share
allocations under the Company's Executive Share Option Scheme.
In fiscal 1996, each of the Directors who was not an Executive Director
was entitled to compensation from the Company for serving on the Board of
Directors equal to an annual fee of (pound)13,000, plus an additional
(pound)1,275 per meeting for meetings of the Board of Directors which were
outside a Director's home country. (Article 84 of the Company's Articles of
Association limits the compensation payable to all non-Executive Directors to
(pound)40,000 in the aggregate, without shareholder approval. See Proposal
Number 7). Additionally, the Company reimburses each of these Directors for
expenses incurred in attending meetings of the Board of Directors.
From time to time the Company engages non-Executive Directors to
perform consulting services for the Company on a limited basis. As compensation
for the performance of such services (which are generally outside of the scope
of their duties as a director), such non-Executive Directors receive a
consulting fee equal to (pound)850 per day. During fiscal 1996, Mr. Tebbs
received (pound)4,714 in consulting fees from the Company.
Copies of the service contracts between each of the Directors and the
Company or any of its subsidiaries and the register of Director's interests in
shares will be available for inspection during normal business hours at the
registered office from October 16 to November 11, 1996. They will also be
available at the place of the AGM from 15 minutes prior to its commencement
until its close.
THE BOARD OF DIRECTORS RECOMMENDS
ELECTION OF THE NOMINEES
DESCRIBED ABOVE
-5-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information
with respect to the beneficial ownership of the Ordinary Shares as of October
10, 1996 by (i) each person who is known to the Company to beneficially own more
than 5% of the outstanding Ordinary Shares of the Company; (ii) each Named
Executive Officer and each director of the Company; (iii) each current executive
officer and (iv) all officers and directors of the Company as a group. Except as
otherwise indicated, each of the shareholders named below has sole voting and
investment power with respect to the Ordinary Shares beneficially owned:
Ordinary Shares
Beneficially Owned(1)
Officers, Directors and 5% Shareholders Number Percent
Rainer H. Burchett............................. 1,500,000(2) 5.8%
c/o Learmonth & Burchett
Management Systems Plc
Evelyn House
62 Oxford Street
London W1N 9LF England
Roger A. Learmonth............................. 1,049,749(3) 4.1%
c/o Learmonth & Burchett
Management Systems Plc
Evelyn House
62 Oxford Street
London W1N 9LF England
Bessemer Venture Partners III L.P. 2,035,801(4) 7.9%
83 Walnut Street
Wellesley Hills, MA 02181
The Kaufman Fund............................... 2,030,000 7.9%
140 E. 45th Street
New York, NY 10017
LBMS Trustee Company Ltd....................... 1,024,241(5) 4.0%
c/o Learmonth & Burchett
Management Systems Plc
Evelyn House
62 Oxford Street
London W1N 9LF England
Gerald N. Christopher.......................... 2,000 *
Michael S. Bennett............................. 0 *
Stephen E. Odom................................ 0 *
Peter Combe................................... 16,500(6) *
David B. Rodway................................ 44,500(7) *
Rick Pleczko................................... 24,400(8) *
Felda Hardymon................................. 65,262(9) *
All current directors and executive officers
as a group (10)........................ 4,672,950 18.1%
- ----------------
-6-
<PAGE>
* Less than one percent.
(1) Applicable percentage of ownership as of October 10, 1996 is based upon
25,538,720 Ordinary Shares outstanding. Gives effect to the Ordinary
Shares issuable within 60 days of October 10, 1996 upon the exercise of
options beneficially owned by the indicated shareholder on that date.
Unless otherwise indicated, the persons named in the table have sole
voting power and sole investment control with respect to all Ordinary
Shares beneficially owned. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
includes voting and investment power with respect to such Ordinary
Shares.
(2) Includes 692,000 Ordinary Shares held by 9 trusts for which Mr.
Burchett is a co-trustee. Does not include 1,024,241 Ordinary Shares
owned of record by LBMS Trustee Company Limited of which Mr. Burchett
is a shareholder and a director. Mr. Burchett disclaims beneficial
ownership in all shares held by LBMS Trustee Company Limited.
(3) Includes 600,000 Ordinary Shares held in a trust for which Mr.
Learmonth serves as co- trustee. Also includes 2,850 Ordinary Shares
held by his daughter. Does not include 1,024,241 Ordinary Shares owned
of record by LBMS Trustee Company Limited of which Mr. Learmonth is a
director. Mr. Learmonth disclaims beneficial ownership in all shares
held by LBMS Trustee Company Limited.
(4) Includes 38,903 Ordinary Shares owned by BVP III Special Situations
L.P. and 92,643 owned beneficially by certain present or former
officers of Bessemer Securities Corporation, the sole owner of the sole
limited partner of Bessemer Venture Partners III L.P. Under certain
circumstances Bessemer Venture Partners III L.P. may direct the voting
of such shares.
(5) Ordinary Shares held by the Executive Share Option Trust are controlled
by the Trustee, LBMS Trustee Company Limited, of which Mr. Burchett is
a shareholder and director and Mr. Learmonth is a director. Messrs.
Burchett and Learmonth each disclaim beneficial ownership of all
Ordinary Shares held by the Trust. Options representing 692,850
Ordinary Shares have been designated to be satisfied by Ordinary Shares
held by the Trust.
(6) Includes 12,500 Ordinary Shares issuable upon exercise of a share
option.
(7) Includes 37,000 Ordinary Shares issuable upon exercise of a share
option.
(8) Includes 11,300 Ordinary Shares issuable upon exercise of a share
option.
(9) Excludes 1,996,898 Ordinary Shares owned by Bessemer Venture Partners
III LP. Mr. Hardymon is a general partner of the general partner of
Bessemer Venture Partners III LP.
-7-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by
or paid for services rendered to the Company in all capacities during fiscal
1996 and fiscal 1995 by (i) the Company's Chief Executive Officer and (ii) each
of the four most highly paid executive officers who received compensation in
excess of $100,000 for the fiscal year 1996 (together, the "Named Executive
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards of
Securities
Annual Compensation Underlying All Other
Name and Principal Position Year (7) Salary($) Bonus($) Options Compensation (4)
- --------------------------- -------- --------- -------- ------------ ----------------
<S> <C>
John P. Bantleman (1) 1996 $189,272 $ 55,000 100,000 $ 1,133
Chief Executive Officer 1995 $151,073 $100,000 564,000 $ 2,719
Stephen Odom (2) 1996 $150,000 $ 50,000 100,000 $ 0
Chief Financial Officer 1995 N/A N/A 200,000 N/A
and Secretary
Peter Combe 1996 $153,412 $ 73,770 100,000 $ 1,547
Senior Vice President 1995 $121,183 $104,423 199,000 $ 1,414
Rainer H. Burchett 1996 $134,463 $ 0 0 $66,330 (5)
Chairman (3) 1995 $134,560 $ 0 0 $62,595 (6)
Rick Pleczko 1996 $137,100 $ 77,540 100,000 $ 2,070
Vice President 1995 $107,831 $ 59,873 143,000 $ 1,863
</TABLE>
(1) John P. Bantleman resigned as President and Chief Executive Officer and
as a Director of the Company in August, 1996.
(2) Stephen E. Odom joined the Company in April 1995, just prior to the
fiscal year end. For fiscal 1995 Mr. Odom's annual salary would have
been $150,000 and Mr. Odom would have been entitled to bonus
compensation of up to $50,000. In addition Mr. Odom was granted an
option to purchase 200,000 Ordinary Shares.
(3) Rainer H. Burchett resigned as Chairman of the Board of Directors in
August, 1996.
(4) Represents Company contributions to the Company's 401(k) Plan, a
defined contribution plan available to U.S. employees only. Except with
respect to Mr. Burchett, other compensation in the form of perquisites
and other personal benefits has been omitted as the aggregate amount of
such perquisites and other personal benefits constituted the lesser of
$50,000 or 10% of the total annual salary and bonus of the Named
Executive Officer for such year.
(5) Includes $38,750 to The Equitable Life Assurance Company Limited,
$5,167 to M&G Pension and Annuity Company Limited and $22,413 in car
allowance.
-8-
<PAGE>
(6) Represents Company contributions of $39,250 and $5,233 to The Equitable
Life Assurance Company Limited and M&G Pension and Annuity Company
Limited, respectively, for money purchase retirement plans maintained
for Mr. Burchett. Also includes $18,122 received by Mr. Burchett for
car allowance.
(7) The periods covered by this table are the fiscal years ended in April
1996 and 1995.
Share Option Information
The following table sets forth certain information regarding the option
grants made pursuant to the Company's Executive Share Option Scheme and ESOP
Share Option Scheme (the "Share Option Plans") during fiscal 1996 to each of the
Named Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Number of Value at Assumed
Ordinary Shares Percentage Exercise Annual Rates of
Underlying of Total Price Stock Price
Options Options in Pounds Expiration Appreciation for
Name Granted Granted (3) Sterling (4) Date Option Term (5)
- ---- ------- ----------- -------------- ------------ ---------------
5% 10%
-----------------
<S> <C>
John P. Bantleman (1) 100,000 12% 3.23 3/29/06 $331,463 $527,800
Stephen Odom 100,000 12% 1.33 3/29/06 $331,463 $527,800
Peter Combe 100,000 12% 1.33 3/29/06 $331,463 $527,800
Rainer H. Burchett (2) N/A 0% N/A N/A N/A N/A
Rick Pleczko 50,000 6% 1.33 3/29/06 $165,731 $263,900
</TABLE>
- ------------------
(1) John P. Bantleman resigned as President and Chief Executive Officer and
as a Director of the Company in August, 1996. Upon Mr. Bantleman's
resignation, 520,500 unvested options previously granted to him expired
as of such date. 209,750 vested stock options will remain exercisable
until May 31, 1997 but shall be held as collateral against past
advances from Learmonth & Burchett Management Systems, Inc. to Mr.
Bantleman.
(2) Rainer H. Burchett resigned as Chairman of the Board of Directors in
August, 1996.
(3) Based on an aggregate of 814,000 options granted to employees in fiscal
1996, including options granted to the Named Executive Officers.
(4) The market value at the date of grant was(pound)1.33 per Ordinary
Share. The exchange rate at the date of grant was $1.53/(pound).
(5) Amounts represent hypothetical gains that could be achieved for the
respective options at the end of the ten-year option term. The assumed
5% and 10% rates of share appreciation are mandated by rules of the
Securities and Exchange Commission and do not represent the Company's
estimate of the future market price of the Ordinary Shares.
-9-
<PAGE>
OPTION EXERCISES AND YEAR-END INTERESTS
The following table sets forth for each of the Named Executive Officers
certain information concerning the value of unexercised options at the end of
fiscal 1996 (including options granted in fiscal 1996) and the value of options
exercised in fiscal 1996.
Aggregate Option Exercises in Last Fiscal year
and Fiscal year-End Option Values
<TABLE>
<CAPTION>
Ordinary Shares Number of Net Values of Unexercised
Acquired Value Unexercised Options In-the-Money Options (3)
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C>
John P. Bantleman (1) N/A N/A 42,000 688,250 $91,915 $694,945
Stephen Odom N/A N/A N/A 300,000 N/A 229,500
Peter Combe 4,000 $18,085 6,000 310,500 11,819 369,227
Rainer H. Burchett (2) N/A N/A N/A N/A N/A N/A
Rick Pleczko 12,000 37,668 5,600 202,900 11,567 253,467
</TABLE>
- ----------------
(1) John P. Bantleman resigned as President and Chief Executive Officer and
as a Director of the Company in August, 1996. Upon Mr. Bantleman's
resignation, 520,500 unvested options previously granted to him expired
as of such date. 209,750 vested stock options will remain exercisable
until May 31, 1997 but shall be held as collateral against past
advances from Learmonth & Burchett Management Systems, Inc. to Mr.
Bantleman.
(2) Rainer H. Burchett resigned as Chairman of the Board of Directors in
August, 1996.
(3) Based on the estimated fair value of the Company's Ordinary Shares at
the end of fiscal 1996 (as determined by the price per Ordinary Share
of (pound)1.93 on the USM at April 30, 1996), less the exercise price
payable for such Ordinary Shares. The exchange rate at April 30, 1996
was $1.53/(pound).
Compliance with Section 16(a) of the Exchange Act
Rainer Burchett, a Director, Director-elect and, until his resignation
on August 2, 1996, Chairman of the Company, failed to file the Form 4 or Form 5
required to be filed pursuant to Section 16(a) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), with respect to one transaction during the
fiscal year ended April 30, 1996 that was reportable on Form 4 or, belatedly, on
Form 5. Mr. Burchett will disclose such transaction on the Form 4.
Roger A. Learmonth, a Director of the Company, failed to file the Form
4 or Form 5 required to be filed pursuant to Section 16(a) of the 1934 Act with
respect to one transaction
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<PAGE>
during the fiscal year ended April 30, 1996 that was reportable on Form 4 or,
belatedly, on Form 5. Mr. Learmonth will disclose such transaction on the Form
4.
Rick Pleczko, a Vice President of the Company, failed to file the Form
4 or Form 5 required to be filed pursuant to Section 16(a) of the 1934 Act with
respect to a grant of options during the fiscal year ended April 30, 1996 that
was reportable on Form 4 or, belatedly, on Form 5. Mr. Pleczko will disclose
such grant on the Form 4.
David B. Rodway, a Senior Vice President and Director of the Company,
failed to file the Form 5 required to be filed pursuant to Section 16(a) of the
1934 Act with respect to an exercise of options during the fiscal year ended
April 30, 1996 that was reportable on Form 5. Mr. Rodway will disclose such
exercise on the Form 5.
Mr. Combe, Senior Vice President of the Company, failed to amend his
Form 3 which underreports by 2,000 his direct holdings in ordinary shares; he
also failed to file the Form 4 or Form 5 required to be filed pursuant to
Section 16(a) of the 1934 Act with respect to a grant of options during the
fiscal year ended April 30, 1996 that was reportable on Form 4 or, belatedly, on
Form 5. Mr. Combe will file an amended Form 3 and will disclose such grant on
the Form 4.
Mr. Odom, Secretary to the Company, failed to file the Form 4 or Form 5
required to be filed pursuant to Section 16(a) of the 1934 Act with respect to a
grant of options during the fiscal year ended April 30, 1996 that was reportable
on Form 4 or, belatedly, on Form 5. Mr. Odom will disclose such grant on the
Form 4.
Mr. Bantleman, Chief Executive Officer and a Director of the Company
until his resignation on August 2, 1996, failed to file the Form 4 or Form 5
required to be filed pursuant to Section 16(a) of the 1934 Act with respect to a
grant of options during the fiscal year ended April 30, 1996 that was reportable
on Form 4 or, belatedly, on Form 5. Mr. Bantleman will disclose such grant on
the Form 4.
Employment Arrangements With Executive Officers
Michael S. Bennett and the Company are parties to an agreement pursuant
to which Mr. Bennett serves as President and Chief Executive Officer of the
Company and a member of the Company's Board of Directors. The agreement has an
effective date of August 2, 1996 with no initial fixed term and no termination
notification requirement as Mr. Bennett is an employee at will. The initial
salary payable under the agreement is $200,000 per year. Pursuant to the
agreement, the initial salary may be adjusted by the Board of Directors at an
annual review. The Company has also issued to Mr. Bennett options to purchase
400,000 Ordinary Shares at an exercise price of $1.185. Mr. Bennett is also
entitled to a bonus of $100,000 at target performance and to participate in
certain of the Company's benefit plans. In the event of a change of control of
the Company, Mr. Bennett will be entitled to a severance payment of $300,000 and
all of his then unvested share options will become immediately vested.
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Gerald N. Christopher and the Company are parties to an agreement
pursuant to which Mr. Christopher serves as Chairman of the Board of Directors
of the Company. The agreement has an effective date of August 2, 1996 with no
initial fixed term and no termination notification requirement as Mr.
Christopher is an employee at will. The initial salary payable under the
agreement is $3,000 per week, subject to adjustment effective January 1, 1997,
when Mr. Christopher's yearly salary is set at a rate of $1,000 per week. The
Company has also issued to Mr. Christopher options to purchase 250,000 Ordinary
Shares at an exercise price of $1.185. Mr. Christopher is also entitled to
reimbursement for the cost of an apartment and reasonable living expenses in the
Houston area, as well as for reasonable travel expenses.
John P. Bantleman resigned as President and Chief Executive Officer and
as a Director of the Company on August 2, 1996. Under the terms of a termination
agreement with the Company, Mr. Bantleman received a lump sum of $106,000 (less
payroll deductions and taxation withholding), representing six months salary
continuation and an automobile allowance. Health benefits were continued for six
months. Upon Mr. Bantleman's resignation, the Board voted to accelerate 154,000
of his unvested options resulting in his holding 209,750 vested stock options
exercisable through May 31, 1997. Such options are held as collateral against
Mr. Bantleman's advances of $90,000 from the Company. The balance of his
unvested options expired upon his resignation.
CERTAIN TRANSACTIONS
In August 1995, as part of the acquisition of Corporate Computing, Inc.
by the Company, the Company issued an aggregate of 700,000 Ordinary Shares, of
which 315,000 Ordinary Shares were issued to Christine Comaford, the principal
shareholder of CCI, and the balance were issued to other equity interest holders
of CCI. At that time, the Ordinary Shares issued to Ms. Comaford had a market
value on the USM of (pound)945,000.
On August 2, 1996, at a meeting of the Board of Directors of the
Company, it was unanimously voted that, subject to the approval of the 1996
Equity Incentive Plan, Messrs. Christopher and Bennett were granted options to
purchase 250,000 and 400,000 Ordinary Shares, respectively, equivalent to
125,000 and 200,000 American Depositary Shares, respectively. The aggregate
purchase prices are $296,250 and $474,000, respectively. On September 26, 1996
Messrs. Odom, Combe, Rodway and Pleczko were each granted options to purchase
150,000 Ordinary Shares, equivalent to 75,000 American Depositary Shares for an
aggregate purchase price of $177,750.
Remuneration Committee Report
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph on page 8 shall not be incorporated by
reference into any such filings.
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<PAGE>
REPORT OF THE LEARMONTH & BURCHETT MANAGEMENT
SYSTEMS PLC BOARD OF DIRECTORS
REMUNERATION COMMITTEE
The Company's executive compensation program is administered by the
Remuneration Committee of the Board of Directors (the "Committee"). The
Committee, which is composed of a majority of independent directors, makes
recommendations to the Board of Directors on the three key components of the
executive compensation program: base salary, annual incentive awards and
long-term incentives.
The Committee establishes individual compensation awards based on the
contribution the executive has made in attaining the Company's short term and
strategic performance objectives as well as the executive's anticipated future
contribution. The Company's executive compensation program consists primarily of
the following integrated components:
1. Base Salary - which is designed to compensate executives
competitively within the industry and marketplace.
2. Annual Incentives - which provide a direct link between executive
compensation and annual Company performance against predetermined measures.
3. Long-Term Incentives - which consist of stock options designed to
link management decision making with long-term Company performance and
shareholder interests.
Base Salary. Base salary levels for executive officers of the Company
are reviewed annually by the Remuneration Committee. Executive officers of the
Company are paid salaries in line with their responsibilities.
Annual Incentives. All executive officers are eligible to receive
incentive cash bonuses. Awards are based on the attainment of performance
measures established by the Remuneration Committee at the beginning of the
fiscal year. These performance measures are keyed to management's annual
operating plan and are based on the achievement of targeted operating profit and
revenue growth. As Company performance for fiscal 1996 did not meet the targeted
measures, the incentive cash bonuses actually paid were below targeted amounts.
Long-Term Incentives. The Company provides long-term incentives through
its two share option plans (the "Share Option Plans"). Under the Executive Share
Option Scheme, options may be granted within each period of six weeks following
the date on which the Company announces its annual, half-yearly or quarterly
results. Under the ESOP Share Option Scheme, options may be granted within the
six weeks following the announcement by the Company of its annual, half-yearly
or quarterly results, or otherwise in exceptional circumstances. Share options
are intended to offer an equity incentive for superior performance and to foster
the retention of key personnel through
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<PAGE>
awards structured to vest and become exercisable over time provided that the
individual remains employed by the Company. There is no set formula for the
award of options. Factors considered in making option awards to officers and
employees of the Company include industry practices and norms, prior grants to
such officers or employees, the importance of retaining such officer's or
employee's services, such officer's or employee's potential to contribute to the
success of the Company and such officer's or employee's past contributions to
the Company. Because the receipt of value by an executive officer under the
Share Option Plans is dependent upon an increase in the price of the Company's
Ordinary Shares, this portion of the executives' compensation is directly
aligned with an increase in shareholder value.
The Board of Directors approves the compensation of the Chief Executive
Officer. The Chief Executive Officer and the Company are parties to a Service
Agreement pursuant to which Michael S. Bennett serves as Chief Executive Officer
of the Company. The salary payable under the agreement may be adjusted by the
Board of Directors at any time. The Committee believes Mr. Bennett is paid a
reasonable salary. Mr. Bennett is also entitled to bonuses as determined by the
Board of Directors of the Company and to participate in the Company's benefit
plans. The bonuses payable and option grants are determined generally using the
same measurements employed in determining such awards for other executive
officers described above.
Remuneration Committee
Rainer Burchett
Gerald Christopher
Felda Hardymon
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<PAGE>
PERFORMANCE GRAPH
Comparison of cumulative total return among Learmonth & Burchett Management
Systems PLC, S&P Midcap 400 Index and S&P Midcap Computer
Software and Services Index*
[GRAPH HERE]
<TABLE>
<CAPTION>
Base
Period
Company/Index 16-Nov-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96
<S> <C>
LEARMONTH & BURCHETT MANAGEMENT SYS. 100 102.63 93.42 103.95 48.68 40.79 61.84
S&P MIDCAP COMPUTER (SOFTWARE & SVC.) 100 106.29 103.86 94.24 100.28 98.34 108.59
S&P MIDCAP 400 INDEX 100 101.73 101.47 102.94 106.44 107.72 111.01
</TABLE>
S&P Midcap 400 Index and S&P Midcap Computer Software and Services Index*
Figure 1
- -------
* Assumes $100 invested in the Company's American Depositary Shares, S&P
Midcap 400 Index and S&P Midcap Computer Software & Services Index on
November 16, 1995, the date of the Company's initial public offering in
the United States. Assumes reinvestment of dividends.
The stock prices on the foregoing Performance Graph are not necessarily
indicative of future stock price performance. Each of the Report of the
Remuneration Committee of the Board of Directors set forth above under "Report
of the Remuneration Committee" and the Performance Graph shall not be deemed
incorporated by reference by any general statement incorporating this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or under
the Exchange Act, except to the extent that the Company specifically
incorporates such information by reference, and shall not otherwise be deemed
filed under such Acts.
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<PAGE>
OTHER INFORMATION
Share Option Plans
The Company has established two share option plans (the "Share Option
Plans") for its employees. In connection with the Share Option Plans, the
Company established the Executive Share Option Trust in 1984, to hold trust
assets for the benefit of employees and former employees of the Company and its
subsidiaries (the "Group Companies"). The present Trustee of the Trust is LBMS
Trustee Company Limited (the "ESOP Trustee"), a subsidiary of the Company, whose
board of directors currently consists of Messrs. Learmonth and Burchett. The
ESOP Trustee has the power to borrow money and enter into other financing
arrangements for the purpose of acquiring any holding of Ordinary Shares on
behalf of the beneficiaries, and in particular to make any such Ordinary Shares
available to satisfy options exercised under the Share Option Plans. The
borrowings of the Trust and the expenses and liabilities of the ESOP Trustee are
guaranteed or indemnified by the Company.
A summary of the terms of the Share Option Plans is set out below:
Executive Share Option Scheme. The Executive Share Option Scheme (the
"Executive Plan") was originally adopted by the Company in 1984 and has been
amended on a number of occasions. Options are outstanding both under the terms
currently in force and under the terms of previous versions of the Executive
Plan. Under the terms of the Executive Plan, options may be granted to any
employee of the Company and its subsidiaries (each, a "Group Company") who works
full time (at least 25 hours per week in the case of directors, and at least 20
hours per week in the case of employees) and who does not have a material
interest in the Company. Options may be granted at the discretion of the
Directors or by a committee approved by the Directors (the "Committee"). The
exercise price for an option is determined by the Committee at the date of
grant, but may not be less than the market value of an Ordinary Share at the
date of grant. Options may be granted within a period of six weeks following the
date on which the Company announces its annual, half-yearly or quarterly
results.
The Executive Plan contains a number of limits on the grant of options.
In particular, as at any date, the aggregate number of Ordinary Shares which may
be issued pursuant to options granted in the ten years ending on that date under
the Executive Plan and any other employees' share plan of the Company may not
exceed 10% of the then issued Ordinary Share capital. Subject to certain
adjustments under the Executive Plan, the aggregate number of Ordinary Shares
over which options may be granted under the Executive Plan, from and including
April 12, 1995, shall not exceed 5,000,000.
The Executive Plan is divided into two parts, one part of which has
been approved by the U.K. Inland Revenue and one part of which has not. The
effect of such approval is that options granted to U.K. employees under the
approved portion of the Executive Plan ("Approved Options") attract more
favorable tax treatment for the employee under U.K. tax laws.
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<PAGE>
The rules for the unapproved section of the Executive Plan are
substantially the same as those for the approved section, except that:
(a) options granted under the unapproved section are not
subject to the U.K. Inland Revenue requirement that an individual's
entitlement to options should be limited originally to the greater of
(i) (pound)100,000 and (ii) four times annual U.K. taxable remuneration
and, since July 1995, following a change of law, to (pound)30,000;
(b) options granted under the unapproved section are not
automatically exercisable on a reorganization or change of control of
the Company in circumstances where a replacement option is available.
Proposal Number 11 would change this by amending the Executive Plan to
make these options immediately exercisable in full upon a change in
control.
An option may not be exercised more than 10 years after the date of
grant and an option may only be exercised by the person to whom it is granted or
his personal representative and is not transferable.
Options may be satisfied on exercise either by the allotment and issue
of new Ordinary Shares, or by the transfer of existing fully paid Ordinary
Shares. Ordinary Shares allotted and issued under the Executive Plan rank pari
passu in all respects with Ordinary Shares then in issue, but do not participate
in any dividend or other rights attaching to Ordinary Shares by reference to a
record date preceding the date of exercise of the option. Application will be
made for any Ordinary Share so issued to be admitted to listing or quotation on
any stock exchange or securities market on which the Ordinary Shares are then
listed or quoted.
Generally, the options vest over three to five years. Subject to
approval of Proposal Number 11, options may be exercised at the time vested.
All options may also be exercised in full for a limited period after a
takeover, reconstruction or amalgamation (a reorganization), or voluntary
winding up of the Company, except where the option holder elects to accept a
replacement option offered by the acquiring company.
In the event of any capitalization or rights issue, or subdivision,
consolidation or reduction of capital, the Directors may make such adjustments
as they consider appropriate to the number and/or the exercise price of any
outstanding options. Any such adjustment will require prior approval of the U.K.
Inland Revenue insofar as it affects any Approved Option. Except in limited
circumstances, the Executive Plan may not be amended without the prior approval
of shareholders in general meeting and, as regards the approved section, the
U.K. Inland Revenue.
As of October 10, 1996, options for the purchase of a total of
1,170,000 Ordinary Shares were outstanding under the Executive Plan, at exercise
prices ranging from (pound)0.4425 per share to (pound)1.48 per share. Such
options are exercisable, and expire, at varying dates. The Executive Plan
expires on June 24, 1997 after which no more options can be granted under this
scheme.
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<PAGE>
ESOP Share Option Scheme. The ESOP Share Option Scheme (the "ESOP
Plan") was adopted by the Company on July 2, 1993 and expires on the tenth
anniversary of such date. Under the terms of the ESOP Plan, options may be
granted within the six weeks following the announcement by the Company of its
annual, quarterly or half-yearly results, or otherwise in exceptional
circumstances.
Options may be granted at any price, and are satisfied by the transfer
of shares held by the ESOP Trustee. No grant of an option may be made under the
ESOP Plan if it would cause the number of shares under option to exceed the
number of shares held by the ESOP Trustee. An option may not be exercised more
than ten years, after the date of grant. Unexercised options will lapse on the
option holder's ceasing to be a director or employee of a Group Company, except
to the extent that the ESOP Trustee permits otherwise.
The ESOP Plan may be altered by the Company with the consent of the
ESOP Trustee. As of the record date, options for a total of 692,850 Ordinary
Shares were outstanding under the ESOP Plan, at exercise prices ranging from
(pound)0.85 per Ordinary Share to (pound)1.33 per Ordinary Share. Such options
are exercisable, and expire, at varying dates.
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<PAGE>
PROPOSAL NUMBER 6
RE-APPOINTMENT OF AUDITORS
Proposal Number 6 is to re-appoint Price Waterhouse as the auditors of
the Company until the next AGM, and to authorize the Board of Directors to fix
their remuneration.
THE BOARD OF DIRECTORS RECOMMENDS
THE RE-APPOINTMENT OF PRICE WATERHOUSE TO HOLD
OFFICE UNTIL THE NEXT ANNUAL GENERAL MEETING AND THE
AUTHORIZATION OF THE DIRECTORS TO FIX THEIR REMUNERATION
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<PAGE>
PROPOSAL NUMBER 7
APPROVAL OF INCREASE
IN THE AGGREGATE LEVEL OF THE
NON-EXECUTIVE DIRECTORS' REMUNERATION
Article 84 of the Company's Articles of Association imposes a limit of
an aggregate total of (pound)40,000 on the payment of fees to Directors for the
performance of their duties. Each year the actual amount of fees paid to
Directors is reviewed by the Remuneration Committee of the Board of Directors.
The Company's current policy is to pay fees only to non-Executive Directors. The
non-Executive Directors' compensation during the last fiscal year was set in May
1995 at (pound)13,000 per Director, a (pound)1,000 increase over the previous
fiscal year's compensation. Such increase in fees for non-Executive Directors
was the first such increase after a two-year standstill. In order to properly
compensate and retain qualified members of the Board of Directors and in
consideration of the Directors' increased responsibility and liability due to
the Company's securities current listing on both the USM and NASDAQ, the
shareholders are being asked to approve an increase in the amount of fees
payable by the Company for the services of Directors during the current fiscal
year of an aggregate additional sum not to exceed (pound)15,000 in the current
fiscal year. This increase shall be effective only during the current fiscal
year.
THE BOARD OF DIRECTORS RECOMMENDS
APPROVAL OF THE INCREASE IN THE
AGGREGATE LEVEL OF THE NON-EXECUTIVE
DIRECTORS' REMUNERATION
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<PAGE>
COMPENSATION PROPOSALS
Proposals Number 8 through 11 involve the adoption of new incentive
plans and the amendment to existing plans. The Board of Directors considers
these proposals to be extremely important to the Company's ability to retain and
attract talented employees, particularly in light of the Company's recent
financial performance and restructuring, and the highly competitive market for
talented employees in the U.S. software market.
PROPOSAL NUMBER 8
APPROVAL OF THE COMPANY'S
1996 EQUITY INCENTIVE PLAN
On August 2, 1996, the Board of Directors of the Company (the "Board")
unanimously adopted the Equity Incentive Plan subject to the approval of such
plan by the shareholders of the Company, as more particularly described below.
The Company is adopting the Equity Incentive Plan at this time to attract or
retain employees who are in a position to make significant contributions to the
success of the Company and its subsidiaries through ownership of the Company's
Ordinary Shares ("Shares").
Grants of awards in the form of Options ("Awards") under the Equity
Incentive Plan may be made prior to approval of the plan by shareholders (but
after Board adoption of the Equity Incentive Plan), subject to such approval of
the Equity Incentive Plan. No Award of an incentive stock option may be granted
under the Equity Incentive Plan after ten years from the date of shareholder
approval but Awards previously granted may extend beyond that date.
Summary of the Equity Incentive Plan
The full text of the Equity Incentive Plan is set forth in Appendix A
to this Official Circular / Proxy Statement, and the following summary
description of certain features of the Equity Incentive Plan is qualified in its
entirety by such reference.
The Equity Incentive Plan is designed to advance the Company's
interests by enhancing its ability to attract and retain employees who are in a
position to make significant contributions to the success of the Company and its
subsidiaries through ownership of Shares. A total of 2,500,000 Shares, plus that
number of Shares as may become available by reason of forfeiture of Options
under the Company's Executive Share Option Scheme on or after August 2, 1996,
are reserved and available for Awards made under the Equity Incentive Plan,
subject to adjustment for Share dividends and similar events. From August 2,
1996 to October 10, 1996, 993,400 options under the Executive Share Option
Scheme were forfeited. The Equity Incentive Plan provides for the grant of both
"incentive stock options," as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") (any Option intended to qualify as an
incentive stock option being
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<PAGE>
hereinafter referred to as an "ISO"), and Options that are not incentive stock
options. ISOs shall be awarded only to persons in the employ of the Company or
any of its subsidiaries ("Employees").
The Equity Incentive Plan will be administered by a committee of the
Board (the "Committee"). Only persons currently or formerly in the employ of the
Company or any of its subsidiaries ("Employees") and members of their families
(except without limitation non-Employee (non-Executive) directors of the Company
or a subsidiary of the Company) who, in the opinion of the Committee, are in a
position to make a significant contribution to the success of the Company or its
subsidiaries will be eligible to receive Awards under the Equity Incentive Plan
("Participants").
The exercise price of an Option granted under the Equity Incentive Plan
may not be less than 100% (110% in the case of an ISO granted to a ten-percent
shareholder) of the fair market value of the Shares subject to the Option,
determined as of the time the Option is granted. A "ten- percent shareholder" is
any person who at the time of grant owns, directly or indirectly, or is deemed
to own by reason of the attribution rules of Section 424(d) of the Code, Shares
possessing more than 10% of the total combined voting power of all classes of
Shares of the Company or of its parent or subsidiary corporation. On October 10,
1996 the closing sales price of the Company's American Depositary Shares
("ADS"), equivalent to two (2) Ordinary Shares, on the NASDAQ National Market
was $2.625 per ADS. In no case may the exercise price paid for Shares which is
part of an original issue of authorized Shares be less than the par value per
Share. The Committee may not reduce the exercise price of an Option at any time
after the time of grant unless the duration of such option were limited to seven
years. The term of each Option may be set by the Committee but cannot exceed 10
years from the day immediately preceding the date the Option was granted, or
such earlier date as may have been specified by the Committee at the time the
Option was granted (five years from the day immediately preceding such grant
date in the case of an ISO granted to a ten-percent shareholder).
Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by any documents
required by the Committee and payment in full for the number of Shares for which
the Option is exercised. The Option price may be paid in cash or by check
acceptable to the Company, bank draft or money order payable to the order of the
Company, or by delivery of an unconditional and irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or if so permitted by the instrument evidencing the Option (or in the
case of an Option which is not an ISO, by the Committee on or after grant of the
Option), by delivery of a promissory note of the Option holder to the Company,
payable on such terms as are specified by the Committee, or by any combination
of the permissible forms of payment.
The Company may make a loan to any Participant other than a Director of
a U.K. Group Company ("Loan"), either on the date of or after the grant of any
Award to such Participant. A Loan may be made either in connection with the
purchase of Shares under the Award or with the payment of any Federal, state and
local income tax with respect to income recognized as a result of the Award. No
Loan may have a term (including extensions) exceeding ten years in duration.
Furthermore, in connection with any Award, Learmonth & Burchett Management
Systems, Inc., a Company subsidiary, may at the time such Award is made or at a
later date, provide for and grant a
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<PAGE>
cash award to the Participant ("Supplemental Grant") not to exceed an amount
equal to the amount of any Federal, state and local income tax on ordinary
income for which the Participant may be liable with respect to the Award plus an
additional amount on a grossed-up basis intended to make the Participant whole
on an after-tax basis after discharging all the Participant's income tax
liabilities arising from all Awards.
Each Option will be exercisable at such time or times, and on such
conditions, as the Committee may specify. The Committee may at any time and from
time to time accelerate the time at which all or any part of the Option may be
exercised.
Except as otherwise provided by the Committee, if a Participant dies,
Options exercisable immediately prior to death may be exercised by the
Participant's executor or administrator or, if the Shareholder is not a citizen
of the United Kingdom, by the Participant's transferee, during a period of one
year following such death (or such shorter or longer period as the Board may
determine). Except as otherwise determined by the Committee, Options not
exercisable at a Participant's death terminate upon such death.
In the case of termination of a Participant's employment with the
Company for reasons other than death, except as otherwise provided by the
Committee, to the extent Options were exercisable immediately prior to such
termination, they remain exercisable for three months following such
termination, or such longer period as the Committee at the time may determine
(or for the remainder of their original term, if less), unless the Award
provides otherwise by its terms. Otherwise, all Options terminate to the extent
not exercisable immediately prior to such termination of the Participant's
employment with the Company. If any such termination of employment is due to the
Participant's discharge for cause, such Participant's Options may be terminated
immediately.
In the event of a "Change in Control," as defined in the Equity
Incentive Plan to include a new majority on the Board within eighteen months
after a tender or exchange offer or a proxy solicitation, all outstanding
Options shall become immediately exercisable in full.
In the event of the sale of all or substantially all of the assets of
the Company, all outstanding Options shall remain exercisable for a period of
six months following such sale, or for such shorter period (but in no event less
than 30 days) as may be provided in any plan or liquidation of the Company.
Certain U.S. Federal Income Tax Consequences
The following discussion, which is based on the law as in effect on
October 10, 1996, summarizes certain U.S. federal income tax consequences
associated with the grant and exercise of stock options under the Equity
Incentive Plan. The summary does not purport to cover the tax consequences
associated with other forms of awards nor does it cover federal employment tax
or other federal tax consequences or state, local or non-U.S. tax consequences.
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Tax Consequences to Optionees. In general, an optionee realizes no
taxable income upon the grant or exercise of an incentive stock option. However,
the exercise of incentive stock options may result in any alternative minimum
tax liability to the optionee. With certain exceptions, a disposition by the
optionee of Shares purchased under an incentive stock plan within two years from
the date of grant or within one year after exercise produces ordinary income to
the optionee equal to the value of the Shares at the time of exercise less the
exercise price. Any additional gain recognized in the disposition is treated as
a capital gain. If the optionee does not dispose of the Shares until after the
expiration of these one- and two-year holding periods, any gain or loss
recognized upon a subsequent sale is treated as a long-term capital gain or
loss.
In general, in the case of a nonstatutory option the optionee has no
taxable income at the time of grant but realizes income in connection with
exercise of the option in an amount equal to the excess (at the time of
exercise) of the fair market value of the Shares acquired upon exercise over the
exercise price; and any gain or loss recognized upon a subsequent sale or
exchange of the Shares will be treated as capital gain or loss.
In general, an incentive stock option that is exercised more than three
months after termination of employment (other than termination by reason of
death) is treated as a nonstatutory option. Incentive stock options awarded
under the Equity Incentive Plan will be treated as nonstatutory options to the
extent the fair market value (determined as of the date of the grant) of the
Shares with respect to which Options first become exercisable in any calendar
year exceeds $100,000.
Tax Consequences to the Company. The Company may claim a deduction for
the ordinary income realized by a Participant upon exercise of a nonstatutory
option or upon the disqualifying disposition of Shares purchased under an
incentive stock option. The Company's ability to claim a deduction may in some
cases depend on its satisfaction of applicable reporting requirements. In
addition, the Internal Revenue Code limits to $1,000,000 the deduction the
Company may claim for annual compensation to any of its five highest paid
officers as determined under the Internal Revenue Code, subject to a number of
exceptions. Under Section 162(m) of the Internal Revenue Code, the Company would
be unable in certain circumstances to claim a deduction upon the exercise of
Options granted to its top five executive officers (determined in accordance
with Section 162(m)) under the Equity Incentive Plan unless shareholder approval
of the Equity Incentive Plan is obtained.
Miscellaneous. The grant of an Option or the acceleration of
exercisability of an Option in connection with a change in ownership or
effective control of the Company or in connection with a change in ownership of
a substantial portion of the Company's assets may be treated as giving rise to a
"payment in the nature of compensation" required to be taken into account in
determining whether the Participant has received so-called "excess parachute
payments" under the Internal Revenue Code's golden-parachute rules. Where
applicable, those rules impose a 20% tax on excess parachute payments and deny a
deduction to the Company for such payments.
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Required Vote
Under the rules of the National Association of Securities Dealers,
Inc., the affirmative vote of the holders of a majority of the outstanding
Ordinary Shares (including Ordinary Shares underlying ADSs) entitled to vote and
present, in person or by proxy, at the AGM is required to approve the Equity
Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF
THE COMPANY'S 1996 EQUITY
INCENTIVE PLAN
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PROPOSAL NUMBER 9
APPROVAL OF THE COMPANY'S
1996 U.S. EMPLOYEE STOCK PURCHASE PLAN
In August, 1996, the Board of Directors of Learmonth & Burchett
Management Systems Plc (the "Board" and "LBMS," respectively) unanimously
adopted the 1996 U.S. Employee Stock Purchase Plan (the "U.S. Plan"). LBMS is
adopting the U.S. Plan at this time to provide a method by which eligible
employees of LBMS and LBMS' subsidiaries (collectively, the "Company") may use
voluntary, systematic payroll deductions to purchase Ordinary Shares of LBMS
(the "Stock") and thereby acquire an interest in the future of the Company.
The U.S. Plan will become effective on the date on which it is approved
by the shareholders of LBMS. Such approval must be secured within twelve months
before or after the date the U.S. Plan is adopted by the Board (August 2, 1996).
All options ("Options") granted under the U.S. Plan prior to such approval are
conditioned on such approval being obtained prior to the exercise thereof.
Summary of the 1996 U.S. Employee Stock Purchase Plan
The full text of the U.S. Plan is set forth in Appendix B to this
Official Circular/Proxy Statement, and the following summary description of
certain features of the U.S. Plan is qualified in its entirety by such
reference.
The U.S. Plan is designed to advance the Company's interests by
providing a method by which eligible employees purchase Ordinary Shares of LBMS
and thereby acquire an interest in the future of the Company. Under the U.S.
Plan, there is available an aggregate of not more than 500,000 shares for sale
pursuant to the exercise of Options granted under the U.S. Plan, subject to
adjustment in the event of any change in the shares outstanding of LBMS by
reason of a stock dividend, split-up, recapitalization, merger, consolidation,
reorganization, or other capital change. The shares ("Shares") to be delivered
upon exercise of Options under the Plan may be either shares of authorized but
unissued Stock, shares of reacquired Stock, American Depositary Receipts for
American Depositary Shares, or any combination of the foregoing, as the Board
may determine.
The U.S. Plan will be administered by the Remuneration Committee of the
Board. Under such Plan, Options may be granted to any individual who elects to
participate and is an employee of an LBMS subsidiary designated by the Board or
an employee of LBMS, if the Board so determines, with a customary working
schedule of at least 20 hours per week, and who has been an Employee for at
least 90 days as of the first day of a period during which the U.S. Plan remains
in effect (an "Option Period"). Employees deemed to own stock possessing 5% or
more of the total combined voting power or value of all classes of shares of
LBMS or an LBMS subsidiary will not be eligible to participate in the U.S. Plan.
In addition, no Employee will be granted an Option under the U.S.
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Plan which would permit his or her rights to purchase shares under all employee
stock purchase plans of LBMS and affiliates to accrue at a rate which exceeds
$25,000 of fair market value of such shares (determined at the time such Option
is granted) for each calendar year in which such Option is outstanding at any
time.
Eligible Employees elect to participate in the U.S. Plan
("Participants") by designating an amount of not less than 1% nor more than 15%
to be withheld from their regular rate of compensation by means of substantially
equal payroll deductions over a six-month Option Period. Such amounts withheld
will be credited to a separate withholding account, upon which no interest will
be payable, for each Participant. Unless changed or revoked by the Participant,
the payroll deduction authorization will remain in effect. A Participant may
reduce the withholding rate of his or her payroll deduction authorization by one
or more whole percentage points at any time during an Option Period by
delivering written notice to the Company, such reduction to take effect
prospectively as soon as practicable following receipt of such notice by the
Company; provided, that any reduction of the withholding rate to zero shall be
treated as a withdrawal. A Participant may increase or reduce the withholding
rate of his or her payroll deduction authorization for a future Option Period,
or cease participation entirely for a future Option Period, by written notice
delivered to the Company at least fifteen days prior to the first day of the
Option Period as to which the change is to be effective. A Participant may
terminate his or her payroll deduction authorization as of any date by written
notice delivered to the Company and, upon receipt of such notice by the Company,
will thereby cease to be a Participant as of such date. Any Participant who
voluntarily terminates his or her payroll deduction authorization prior to the
last business day of an Option Period will be deemed to have canceled his or her
Option. Upon such cancellation, the balance in his or her withholding account
will be returned.
On the first day of an Option Period, Participants are granted an
Option for such Period for the number of Shares determined by dividing (i)
Participant's withholding account balance on the last day of an Option Period by
(ii) the lesser of 85% of the fair market value of the Shares at (a) the time of
Option grant or (b) the time of Option exercise. Each Employee who is a
Participant in the U.S. Plan on the last business day of the Option Period will
be deemed to have exercised on the last business day of the Option Period the
Option granted to him or her for that Option Period.
Upon the termination of a Participant's employment with the Company for
any reason, including death, he or she will cease to be a Participant, and (i)
any Option held by such Participant will be deemed canceled, and (ii) LBMS will
deliver to such Participant or his or her estate the balance of his or her
withholding account.
Each Participant's rights and privileges under any Option may be
exercisable during his or her lifetime only by him or her, and may not be sold,
pledged, assigned or transferred in any manner.
The U.S. Plan shall terminate automatically following the end of the
Option Period beginning August 2, 2006; provided, however, that the Board in its
discretion may extend the U.S. Plan for one or more Option Periods. The U.S.
Plan may be suspended or terminated earlier by the Board; the U.S. Plan will
terminate in any case when all or substantially all of the Shares reserved for
the purposes of the Plan have been purchased.
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THE BOARD OF DIRECTORS
RECOMMENDS APPROVAL OF
THE COMPANY'S 1996 U.S. EMPLOYEE
STOCK PURCHASE PLAN
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PROPOSAL NUMBER 10
APPROVAL OF THE COMPANY'S
1996 NON-EMPLOYEE DIRECTORS'
SHARE OPTION PLAN
On September 26, 1996, the Board of Directors of the Company (the
"Board") unanimously adopted the Non-Employee Directors' Share Option Plan (the
"Plan") subject to approval of this Plan by vote of a majority of the
Shareholders of the Company or any of its subsidiaries, as more particularly
described below. The Company is adopting the Non-employee Directors' Share
Option Plan at this time so as to put itself in a position to attract new
non-employee directors who are in a position to make significant contributions
to the success of the Company and to reward Directors for such contributions
through ownership of shares of the Company's Ordinary Shares. The Company
currently has no new candidates for directors and the Company does not plan to
issue options under this plan to any of its current directors. Options, as
hereinafter defined, may be granted under the Plan prior to the date of
Shareholder approval, and Options so granted shall be effective on the effective
date of grant subject to Shareholder approval of the Plan. No Options may be
awarded under the Plan after September 26, 2006, but the Plan shall continue
thereafter while previously awarded Options remain subject to the Plan.
Summary Of The Non-Employee Directors' Share Option Plan
The full text of the Plan is set forth in Appendix C to this Official
Circular/Proxy Statement, and the following summary description of certain
features of the Plan is qualified in its entirety by such reference. The Plan is
designed to advance the Company's interest by enhancing its ability to attract
and retain non-employee directors who are in a position to make significant
contributions to the success of the Company and to reward directors for such
contributions through ownership of Shares. The number of Shares which may be
issued upon the exercise of Options granted under the Plan, including Shares
forfeited because the Option lapses or is terminated shall not exceed 500,000
Shares in the aggregate, subject to increase in the event of a Share dividend,
Share split, combination, recapitalization, material change in law or in
accounting practices, merger, consolidation, acquisition, disposition, or other
similar event or transaction, which increases and appropriate adjustments as a
result thereof may be made by a Committee (the "Committee") of the Board of
Directors of the Company (the "Board") which shall consist of at least two
directors. The Committee may, at such time or times as it may choose, grant
options ("Options") on Shares or American Depositary Shares ("ADSs") to any
Eligible Director, as hereinafter defined; provided, however, that any Options
granted to Eligible Directors who are residents of the United States shall be
Options on ADSs. The exercise price and other terms and conditions of such
Options shall be determined by the Committee. All Options shall expire 10 years
after the effective date of grant. Directors eligible to receive Options under
the Plan ("Eligible Directors") shall be those directors who are not employees
of the Company or of any subsidiary of the Company at the time they become an
eligible Director and (i) who are directors on the effective date of this Plan
or (ii) who are first elected a director of the Company after the effective date
of this Plan.
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The exercise price of Shares purchased on exercise of an Option must be
paid either (1) in cash or by check, bank draft or money order or (2) if
permitted by the Committee, by delivery of a promissory note or (3) by delivery
of an undertaking by a broker to deliver sufficient funds, or (4) by any
combination of these permissible forms of payment. Each Option will be
exercisable at such time or times, and on such conditions as the Committee may
specify. The Committee may at any time and from time to time accelerate the time
at which all or any part of an Option may be exercised, provide for the
acceleration of the exercisability of any Option upon the occurrence of certain
events, or extend the time by which an Option must be exercised.
If an Eligible Director ceases to be a director for reason of death or
total and permanent disability (as determined by the Committee), all Options
held by the Eligible Director that are not exercisable on the thirtieth day
after termination of the Eligible Director's status as a director will terminate
as of such date. All Options that are exercisable as of such thirtieth day will
continue to be exercisable until the earlier of (1) the first anniversary of the
date on which the Eligible Director's status as a director ended or (2) the date
on which the Option would have terminated had the Eligible Director remained a
director, and after completion of that period, such Options shall terminate to
the extent not previously exercised, expired or terminated. The Option may be
exercised within the above limits by the Eligible Director's legal
representative. If an Eligible Director's service with the Company terminates
for any reason other than death or incapacity, all Options held by the director
that are not then exercisable shall terminate. Options that are exercisable on
the date of such termination (other than termination upon removal for cause, in
which event all Options shall immediately terminate) shall continue to be
exercisable until the earlier of (1) three months thereafter or (2) the date on
which the Option would have terminated had the director remained an Eligible
Director, and after completion of that period, such Options shall terminate to
the extent not previously exercised, expired or terminated.
In the event of a "Change in Control," as defined in the Plan, if an
Eligible Director ceases to be a director following such change in control, and
if the Shares or ADSs are, following such change in control, traded on a major
stock exchange or inter-dealer quotation system in the United States or
elsewhere, any Option that was exercisable immediately before the termination
will continue to be exercisable for the full period during which it could be
exercised. Otherwise, in the event of a change of control, all outstanding
Options shall become immediately exercisable in full. In the event of the sale
of all or substantially all of the assets of the Company, all outstanding
Options shall remain exercisable for a period of six months following such sale,
or for such shorter period (but in no event less than 30 days) as may be
provided in any plan of liquidation of the Company.
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Tax Consequences to Optionees. The Eligible Director or other
appropriate person shall remit to the Company an amount sufficient to satisfy
the withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Shares.
THE BOARD OF DIRECTORS
RECOMMENDS APPROVAL OF
THE COMPANY'S 1996 NON-EMPLOYEE
DIRECTORS' SHARE OPTION PLAN
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PROPOSAL NUMBER 11
APPROVAL OF AMENDMENT TO EXECUTIVE
SHARE OPTION SCHEME
The Board of Directors proposes that the Rules of the Executive Share
Option Scheme should be amended in order to treat Options under that Scheme in a
manner which is more in line with practice in the United States. Currently, such
Rules require that Options not be exercisable until 3 or 5 years following the
date of grant (depending on whether the Option is or is not a Super Option). The
Board also recommends eliminating the requirement to impose performance
conditions on Options, which is not in keeping with usual practice in the United
States.
The Board proposes that Options granted under the Scheme in 1995 should
be amended so that these Options will become exercisable after the second
anniversary of the date of grant in accordance with the vesting arrangements
governing those Options. These vesting arrangements provide for 40% of the
Shares subject to the Option to vest on the second anniversary of the date of
grant and a further 5% to vest at the end of each quarter thereafter if the
Option holder was at the end of that quarter still an executive for the purposes
of the Scheme. In the case of Type A Options, this change is subject to the
approval of the Inland Revenue. The Board further believes that the change in
control, vesting and exercise provisions should be further revised to conform to
those in the 1996 Equity Incentive Plan so as to provide parity among employees.
Thus, the Board of Directors has unanimously approved, subject to
shareholder approval, the following amendment to the Executive Share Option
Scheme:
1. Rule 4(2) shall be amended in respect of Options granted after the date
when the Board of Inland Revenue approves this amendment so that it
reads as follows:
"(2) Subject to sub-clauses (4) and (7) below and to Clause 5 below, a
notice exercising a Type A Option may not be given before the vesting
date(s) specified in the certificate issued in respect of the Option."
2. Rules 4(3) and 11(3) shall be deleted and all references to those rules
in other rules of the Scheme shall be deleted. Rules 4(3) and 11(3)
shall be left blank and the subsequent rules shall not be renumbered.
3. Rule 11(2) shall be amended in respect of any Options granted on or
after April 12, 1995 to read as follows:
"(2) Subject to sub-clauses (4) and (7) below and to Clause 12 below, a
notice exercising a Type B Option may not be given before the vesting
date(s) specified in the certificate issued in respect of the Option."
4. Rule 11(4) shall be amended to add at the beginning thereof,
immediately prior to the word "If" (which shall have the initial "I"
uncapitalized), the words "Subject to Clause 12 below".
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<PAGE>
5. Rule 11(7) shall be amended by adding the words "and Clause 12 below"
immediately following the words "sub-clause (4) above" and before the
",".
6. Rule 12(1) is amended to read in full as follows:
(1) In the event of a Change in Control, all outstanding Type B Options
shall become immediately exercisable in full. For the purposes of this
plan, a "Change in Control" shall mean any of the following:
(a) any Person or "group" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934), other than the
Company or any of its Affiliates, becomes a beneficial owner (within
the meaning of Rule 13d-3 as promulgated under the U.S. Securities
Exchange Act of 1934), directly or indirectly, of securities
representing thirty percent (30%) or more of the total number of votes
that may be case for the election of directors of the Company;
(b) there occurs any sale of all or substantially all of the assets of
the Company;
(c) within eighteen months after a tender offer or exchange offer for
voting securities of the Company (other than by the Company)
individuals who were directors of the Company immediately prior thereto
shall cease to constitute a majority of the Board;
(d) proxies soliciting voting securities of the Company by persons
other than the Company or its Board and within eighteen months
thereafter individuals who were directors of the Company immediately
prior to such transaction cease to constitute a majority of the Board;
(e) any Person or "group", other than the Company or any of its
Affiliates, obtains control of the Company in pursuance of a compromise
or arrangement sanctioned by the court under Section 425 of the
Companies Act 1985; or
(f) any Person or "group", other than the Company or any of its
Affiliates, acquires all or the major part of the undertaking of the
Company pursuant to a reorganization under Section 110 of the
Insolvency Act of 1986.
(g) "Change in Control" shall not include a change in legal domicile or
any sale, reorganization, compromise or arrangement or other
transaction which the Board determines in its discretion acting in good
faith to be effected in order to change the legal domicile of the
Company or the holding company of the Company's group of companies and
which leaves control of the Company substantially unaffected or control
of the holding company in the same hands as control of the Company
prior to such transaction.
7. A new Rule 12(2) is hereby added reading in full as follows:
(2) If a Participant ceases to be an employee or director following a
"Change in Control" (as defined above), and if the Company's ordinary
shares or ADSs are, following such
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change in control, traded on a major stock exchange or inter-dealer
quotation system in the United States or elsewhere, any Options that
were exercisable immediately before such cessation will continue to be
exercisable for the full period during which they could be exercised in
the absence of such cessation, except in the case of a sale of all or
substantially all of the assets of the Company. In the event of the
sale of all or substantially all of the assets of the Company, all
outstanding Type B Options shall remain exercisable for a period of six
months following such sale, or for such shorter period (but in no event
less than 30 days) as may be provided in any arrangement for the
liquidation of the Company.
8. Rule (4) is hereby deleted and rules 12(2) and 12(3) are renumbered
12(3) and 12(4), respectively, and are amended to read in full as
follows:
(3) Notwithstanding the provisions of sub-clauses (1) and (2) above, if
there is a Change in Control (as defined in sub-clause (1) above) and
the person or group obtaining control is a body corporate ("the
Acquiring Company"), any Participant may at any time within the period
of six months following the date of the Change in Control by agreement
with the Acquiring Company release any Type B Option granted under the
Scheme which has not lapsed ("the Old Option") in consideration of the
grant to him of an option ("the New Option") which is equivalent (as
defined below) to the Old Option but relates to shares in the Acquiring
Company.
For the purposes of this sub-clause 12(3), the New Option shall be
regarded as equivalent to the Old Option if the date of grant is deemed
to be the same date as the Date of Grant of the Old Option; and (save
as provided in the Rules and save for the number and description of the
shares subject to the New Option) the other rights and terms attaching
to the New Option are as nearly as practicable the same as those
attaching to the Old Option.
If the Option Holder does not release or exercise his Old Option
pursuant to the provisions of this Rule 12 then all Old Options held by
him shall lapse.
With effect from the date on which an Option Holder releases the Old
Option in consideration of the grant to him of the New Option, Rules 11
(1) (8) (9) (10), 12, 13 and 15(1) shall, in relation to the New
Option, be construed for the purposes of that New Option as if
references directly or indirectly to "the Company", "the Board" and
"Shares" were references to the Acquiring Company, the board of
directors of the Acquiring Company and shares in the capital of the
Acquiring Company.
If, in accordance with this sub-clause, an Old Option is released and a
New Option granted, the New Option shall not be exercisable by virtue
of the Change in Control but shall be exercisable from the date on
which the Old Option would otherwise have become exercisable in
accordance with these Rules if there had been no Change in Control
until the day when the Old Option would otherwise have lapsed in
accordance with these Rules if there had been no Change in Control.
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(4) The Board shall as soon as practicable after becoming aware of a
Change in Control notify all Participants of the Change in Control and
of any offer made or likely to be made by the Acquiring Company under
sub-clause (3) above or otherwise.
THE BOARD OF DIRECTORS
RECOMMENDS APPROVAL OF
THE AMENDMENT TO EXECUTIVE SHARE
OPTION SCHEME DESCRIBED ABOVE
The Board of Directors has also unanimously approved, subject to
shareholder approval, the following amendment to Schedule 1 annexed to the Share
Option Certificates issued in respect of Type A Options (subject to the approval
of United Kingdom Inland Revenue for this change) and Type B Options, in each
case granted in the calendar year 1995 under the Executive Share Option Scheme:
THAT paragraph 1(b) of Schedule 1 (Exercise Conditions) be amended to
read as follows:
"This Option may be exercised at any time after the second anniversary
of the Grant Date to the extent that the Option has vested in
accordance with the Vesting Arrangements set out in Schedule 2 and
provided that a U.S. listing shall have taken place by that date;"
THE BOARD OF DIRECTORS
RECOMMENDS APPROVAL OF THE
AMENDMENT TO THE SHARE
OPTION CERTIFICATES
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PROPOSALS NUMBER 12 AND 13
AUTHORITY TO ALLOT SHARES AND
DISAPPLICATION OF PREEMPTIVE
RIGHTS CONFERRED UNDER
THE COMPANIES ACT
Proposal Number 12 will provide the directors with authority under the
UK Companies Act 1985 to allot relevant securities having an aggregate nominal
value not exceeding the nominal value of the present unissued share capital of
the Company. This power expires at the date of the next AGM of the Company:
That the Directors of the Company be and are generally and
unconditionally authorized to exercise all powers of the Company to
allot relevant securities (as defined in Section 80 of the Companies
Act 1985) up to an aggregate nominal amount of (pound)796,128 provided
that all other U.K. and U.S. regulatory requirements have been met and
that the authority shall expire on the date of the next Annual General
Meeting of the Company save that the Company may before such expiry
make an offer or agreement which would or might require relevant
securities to be allotted after such expiry and Directors may allot
relevant securities in pursuance of such an offer or agreement as if
the authority conferred hereby had not expired.
Proposal Number 13 will give the Directors the power to allot equity
securities for cash otherwise than on a preemptive basis having an aggregate
nominal amount equal to (pound)796,128, to allot shares where necessary other
than strictly in accordance with the preemptive provisions set out in Section 89
of the Companies Act 1985. This power will continue until expiry at the next AGM
of the Company:
That the Directors be empowered pursuant to section 95 of the Companies
Act 1985 to allot equity securities (as defined in section 94 of that
Act) for cash pursuant to the authority conferred on them by Proposal
Number 12 above, as if Section 89(1) of that Act did not apply to such
allotment provided that all other U.K. and U.S. regulatory requirements
have been met and that this power shall be limited to:
(i) The allotment of equity securities in connection with a rights
issue in favour of ordinary shareholders where the equity securities
respectively attributable to the interests of all ordinary shareholders
are proportionate (as nearly as may be) to the respective numbers of
ordinary shares held by them, subject to such exclusions or other
arrangements as the Directors may deem necessary or expedient in
relation to fractional entitlements or legal or practical problems
arising under the law of or the requirements of any regulatory body or
any stock exchange in any overseas territory or otherwise.
(ii) The allotment (otherwise than pursuant to sub-paragraph (i) above)
of equity securities up to an aggregate nominal value of (pound)796,128
and shall expire on the date of the next Annual General Meeting of the
Company provided that the Company may make an offer or
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<PAGE>
agreement before this power has expired, which would or might require
securities to be allotted after such expiry and the Directors may allot
equity securities in pursuance of such offer or agreement as if the
power conferred hereby had not expired.
Notwithstanding the above authorizations, the rules of the National
Association of Securities Dealers, Inc. require shareholder approval of any
issuance of shares that would equal or exceed 15% of the Company's outstanding
shares (i.e., currently shares with a nominal capital of approximately
(pound)393,000).
THE BOARD OF DIRECTORS RECOMMENDS
ADOPTING THE PROPOSALS TO AUTHORIZE
THE DIRECTORS TO ALLOT SHARES AND TO
DISAPPLY THE PREEMPTIVE RIGHTS
CONFERRED UNDER THE U.K. COMPANIES ACT
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SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the SEC, shareholder proposals
intended to be included in the Company's proxy material for the Company's 1997
AGM of Shareholders must be received by the Company not less than 120 calendar
days in advance of the date of the Company's proxy statement released to
Shareholders at its principal office, 1800 West Loop South, Suite 900, Houston,
Texas 77027 Attention: Corporate Secretary.
OTHER MATTERS
The management has no knowledge of any other matter that may come
before the AGM and does not, itself, currently intend to present any such other
matter. However, if any such other matters properly come before the meeting or
any adjournment thereof, the persons named as proxies will have discretionary
authority to vote the shares represented by the accompanying proxy in accordance
with their own judgement.
PROXY SOLICITATION
The cost of soliciting proxies will be paid by the Company. Proxies may
be solicited without extra compensation by certain directors, officers and
regular employees of the Company by mail, telegram or personally.
Shareholders are urged to send their proxies without delay. Your
cooperation is appreciated.
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Appendix A
LEARMONTH & BURCHETT MANAGEMENT SYSTEMS PLC
1996 EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of this Equity Incentive Plan (the "Plan") is to advance
the interests of Learmonth & Burchett Management Systems Plc (the "Company") by
enhancing its ability to attract and retain employees who are in a position to
make significant contributions to the success of the Company and its
subsidiaries through ownership of the Company's ordinary shares or American
Depositary Shares ("ADSs" and, collectively, "Shares").
The Plan is intended to accomplish these goals by enabling the Company
to grant awards in the form of Options ("Awards"), as more fully described
below.
2. ADMINISTRATION
The Plan will be administered by a Committee (the "Committee") of the
Board of Directors of the Company (the "Board") which shall consist of at least
two directors. Each of the Committee members shall be a "Non-employee Director"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). A majority of the members of the Committee shall
constitute a quorum, and all determinations of the Committee shall be made by a
majority of its members. Any determination of the Committee under the Plan may
be made without notice or meeting of the Committee by a writing signed by a
majority of the Committee members.
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose (subject to
Section 3); (b) determine the size of each Award, including the number of Shares
subject to the Award; (c) determine the type or types of each Award (subject to
Section 9); (d) determine the terms and conditions of each Award; (e) waive
compliance by a Participant (as defined below) with any obligations to be
performed by the Participant under an Award and waive any term or condition of
an Award (subject to Section 9); (f) amend or cancel an existing Award in whole
or in part (and if an Award is canceled, grant another Award in its place on
such terms as the Committee shall specify), or settle any Award by paying the
cash value of the Shares otherwise issuable, except that the Committee may not,
without the consent of the holder of an Award, take any action under this clause
with respect to such Award if such action would adversely affect the rights of
such holder; (g) prescribe the form or forms of instruments that are required or
deemed appropriate under the Plan, including any written notices and elections
required of Participants, and change such forms from time to time; (h) adopt,
amend and rescind rules and regulations for the administration of the Plan
(subject to Section 9); and (i) interpret the Plan and decide any questions and
settle all controversies and disputes that may arise in connection with the
Plan. Such determinations and actions of the Committee, and all other
determinations and actions of the
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Committee made or taken under authority granted by any provision of the Plan,
will be conclusive and will bind all parties. Nothing in this paragraph shall be
construed as limiting the power of the Committee to make adjustments under
Section 8.6.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by
the shareholders of the Company. Grants of Awards under the Plan may be made
prior to that date (but after Board adoption of the Plan), subject to such
approval of the Plan.
No Award of an incentive stock option may be granted under the Plan
after ten years from the date of shareholder approval but Awards previously
granted may extend beyond that date. Furthermore, no Award may be granted under
the Plan at a time when such grant would be prohibited by any applicable
legislation, rules or regulations or by any code adopted by the Company
governing dealings in Company shares or by United Kingdom insider dealing
legislation.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8.6 below, the aggregate
number of Shares reserved and available for Awards made under the Plan shall be
2,500,000 shares, plus that number of Shares as may become available by reason
of forfeiture of options outstanding as of August 2, 1996 under the Company's
Executive Share Option Scheme. If any Award requiring exercise by the
Participant for delivery of Shares terminates without having been exercised in
full, the number of Shares as to which such Award was not exercised will be
available for future grants.
Shares delivered under the Plan will be authorized but unissued Shares.
No fractional shares will be delivered under the Plan.
The Committee may grant Awards exercisable for ordinary shares or ADSs
as it may determine. Each ADS is equivalent to two (2) ordinary shares. Where an
Award is exercisable for ADSs, references in the Plan to "Shares" shall refer to
ADSs, except that any reference to a number of Shares shall refer to Ordinary
Shares. The Committee may grant Awards to Participants who are residents of the
United States of America only for ADSs.
5. ELIGIBILITY AND PARTICIPATION
Those eligible to receive Awards under the Plan ("Participants") will
be persons currently or formerly in the employ of the Company or any of its
subsidiaries ("Employees") and members of their families (except without
limitation non-Employee (non-Executive) directors of the Company or a subsidiary
of the Company) who, in the opinion of the Committee, made a significant
contribution to the success of the Company or its subsidiaries or are in a
position to do so. A "subsidiary" for purposes of the Plan will be a corporation
in which the Company owns, directly or indirectly, stock or shares possessing
50% or more of the total combined voting power of all classes of stock or
shares.
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6. TYPES OF AWARDS
6.1. OPTIONS
(a) Nature of Options. An Option is an Award entitling the recipient on
exercise thereof to purchase Shares at a specified exercise price.
Both "incentive stock options," as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") (any Option intended to
qualify as an incentive stock option being hereinafter referred to as an "ISO"),
and Options that are not incentive stock options, may be granted under the Plan.
ISOs shall be awarded only to Employees.
(b) Exercise Price. The exercise price of an Option will be determined
by the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100% (110%
in the case of an ISO granted to a ten-percent shareholder) of the fair
market value(2) of the Shares subject to the Option, determined as of
the time the Option is granted. A "ten-percent shareholder" is any
person who at the time of grant owns, directly or indirectly, or is
deemed to own by reason of the attribution rules of Section 424(d) of
the Code, Shares possessing more than 10% of the total combined voting
power of all classes of Shares of the Company or of its parent or
subsidiary corporation.
(2) In no case may the exercise price paid for Shares which is
part of an original issue of authorized Shares be less than the par
value per Share.
(3) The Committee may not reduce the exercise price of an Option
at any time after the time of grant unless the duration of such Option
were limited to seven years.
(c) Duration of Options. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the day immediately preceding the
date the Option was granted, or such earlier date as may have been specified by
the Committee at the time the Option was granted.
(d) Exercise of Options. An Option will become exercisable at such time
or times, and on such conditions, as the Committee may specify. The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.
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(2) "Fair market value" is generally understood to mean the price that
an asset would bring by bona fide bargaining between well-informed buyers and
sellers at the date of acquisition. Usually the fair market price would be the
price at which bona fide sales have been consummated for assets of like type,
quality, and quantity in a particular market at the time of acquisition.
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Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of Shares for which the Option is exercised.
(e) Payment for Shares. Shares purchased on exercise of an Option must
be paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company, or (2) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (3) if so permitted by
the instrument evidencing the Option (or in the case of an Option which is not
an ISO, by the Committee on or after grant of the Option), by delivery of a
promissory note of the Option holder to the Company, payable on such terms as
are specified by the Committee, or (4) by any combination of the permissible
forms of payment; provided that at least so much of the exercise price as
represents the par value of such Shares must be paid other than by the Option
holder's promissory note or personal check.
(f) Discretionary Payments. If the market price of Shares subject to an
Option exceeds the exercise price of the Option at the time of its exercise, the
Committee may cancel the Option and cause the Company to pay in cash or in
Shares (at a price per share equal to the fair market value per share) to the
person exercising the Option an amount equal to the difference between the fair
market value of the Shares which would have been purchased pursuant to the
exercise (determined on the date the Option is canceled) and the aggregate
exercise price which would have been paid. The Committee may exercise its
discretion to take such action only if it has received a written request from
the person exercising the Option, but such a request will not be binding on the
Committee.
6.2. Loans and Supplemental Grants.
(a) Loans. The Company may make a loan to any Participant other than a
Director of a U.K. Group Company ("Loan"), either on the date of or after the
grant of any Award to such Participant. A Loan may be made either in connection
with the purchase of Shares under the Award or with the payment of any Federal,
state and local income tax with respect to income recognized as a result of the
Award. The Committee will have full authority to decide whether to make a Loan
and to determine the amount, terms and conditions of the Loan, including the
interest rate (which may be zero), whether the Loan is to be secured or
unsecured or with or without recourse against the borrower, the terms on which
the Loan is to be repaid and the conditions, if any, under which it may be
forgiven. However, no Loan may have a term (including extensions) exceeding ten
years in duration.
(b) Supplemental Grants. In connection with any Award, Learmonth &
Burchett Management Systems, Inc. may at the time such Award is made or at a
later date, provide for and grant a cash award to any employee who is a
non-director Participant ("Supplemental Grant") not to exceed an amount equal to
(1) the amount of any Federal, state and local income tax on ordinary income for
which the Participant may be liable with respect to the Award, determined by
assuming
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taxation at the highest marginal rate, plus (2) an additional amount on a
grossed-up basis intended to make the Participant whole on an after-tax basis
after discharging all the Participant's income tax liabilities arising from all
payments under this Section 6. Any payments under this subsection (b) will be
made at the time the Participant incurs Federal income tax liability with
respect to the Award.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Death.
If a Participant dies, the following will apply:
(a) All Options held by the Participant immediately prior to death, to
the extent then exercisable, may be exercised by the Participant's executor or
administrator or, if the Shareholder is not a citizen of the United Kingdom, by
the person or persons to whom the Option is transferred by will or the
applicable laws of descent and distribution, at any time within the one year
period ending with the first anniversary of the Participant's death (or such
shorter or longer period as the Board may determine), and shall thereupon
terminate. In no event, however, shall an Option remain exercisable beyond the
latest date on which it could have been exercised without regard to this Section
7. Except as otherwise determined by the Committee, all Options held by a
Participant immediately prior to death that are not then exercisable shall
terminate at death.
(b) Any payment or benefit under a Supplemental Grant to which the
Participant was not irrevocably entitled prior to death will be forfeited and
the Award canceled as of the time of death, unless otherwise determined by the
Committee.
7.2. Termination of Service (Other Than By Death).
If a Participant who is an Employee ceases to be an Employee for any
reason other than death (such termination of the employment being herein
referred to as a "Status Change"), the following will apply:
(a) Except as otherwise determined by the Committee, and except as
provided below, all Options held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the Status
Change. Any Options that were exercisable immediately prior to the Status Change
will continue to be exercisable for a period of three months (or such longer
period as the Committee may determine), and shall thereupon terminate, unless
the Award provides by its terms for immediate termination in the event of a
Status Change or unless the Status Change results from a discharge for cause
which in the opinion of the Committee casts such discredit on the Participant as
to justify immediate termination of the Award. In no event, however, shall an
Option remain exercisable beyond the latest date on which it could have been
exercised without regard to this Section 7. For purposes of this paragraph, a
Status Change shall not be deemed to have resulted by reason of (i) a sick leave
or other bona fide leave of absence approved for purposes of the Plan by the
Committee, so long as the Employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) a transfer of employment between the Company
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and a subsidiary or between subsidiaries, or to the employment of a corporation
(or a parent or subsidiary corporation of such corporation) issuing or assuming
an option in a transaction to which section 424(a) of the Code applies.
(b) Any payment or benefit under a Supplemental Grant to which the
Participant was not irrevocably entitled prior to the Status Change will be
forfeited and the Award canceled as of the date of such Status Change unless
otherwise determined by the Committee.
(c) If a Status Change occurs following a "Change in Control" (as
defined in Section 7.3), and if the Company's ordinary shares or ADSs are,
following such change in control, traded on a major stock exchange or
inter-dealer quotation system in the United Kingdom or United States (including
the Nasdaq), any Options that were exercisable immediately before the Status
Change will continue to be exercisable for the full period during which they
could be exercised set forth in Section 6.1(c), except in the case of a sale of
all or substantially all of the assets of the Company as set forth in Section
7.4.
7.3. Change of Control.
In the event of a Change of Control, all outstanding Options shall
become immediately exercisable in full. For the purposes of this plan, a "Change
in Control" shall mean any of the following:
(a) any Person or "group" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934), other than the Company or any
of its Affiliates, becomes a beneficial owner (within the meaning of Rule 13d-3
as promulgated under the Securities Exchange Act of 1934), directly or
indirectly, of securities representing thirty percent (30%) or more of the total
number of votes that may be cast for the election of directors of the Company;
(b) there occurs any sale of all or substantially all of the assets of
the Company;
(c) within eighteen months after a tender offer or exchange offer for
voting securities of the Company (other than by the Company) individuals who
were directors of the Company immediately prior thereto shall cease to
constitute a majority of the Board;
(d) proxies are solicited for voting securities of the Company by
persons other than the Company or its Board and, within eighteen months
thereafter, individuals who were directors of the Company immediately prior to
such transaction cease to constitute a majority of the Board;
(e) any Person or "group," other than the Company or any of its
affiliates, obtains control of the Company in pursuance of a compromise or
arrangement sanctioned by the court under Section 425 of the Companies Act 1985;
or
(f) any Person or "group," other than the Company or any of its
affiliates, acquires all or the major part of the undertaking of the Company
pursuant to a reorganization under Section 110 of the Insolvency Act 1986.
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(g) "Change in Control" shall not include a change in legal domicile or
any sale, reorganization, compromise or arrangement or other transaction which
the Board determines in its discretion acting in good faith to be effected in
order to change the legal domicile of the Company or the holding company of the
Company's group of companies and which leaves control of the Company
substantially unaffected or control of the holding company in the same hands as
control of the Company prior to such transaction.
7.4. Sale of Assets.
In the event of the sale of all or substantially all of the assets of
the Company, all outstanding Options shall remain exercisable for a period of
six months following such sale, or for such shorter period (but in no event less
than 30 days) as may be provided in any plan of liquidation of the Company.
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. Rights as a Shareholder, Dividend Equivalents.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a Shareholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of Shares. However, the Committee may,
on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Shares subject to the Participant's Award had such Shares been
outstanding. Without limitation, the Committee may provide for payment to the
Participant of amounts representing such dividends, either currently or in the
future, or for the investment of such amounts on behalf of the Participant.
8.3. Conditions on Delivery of Shares.
The Company will not be obligated to deliver any Shares pursuant to the
Plan or to remove restrictions from Shares previously delivered under the Plan
(a) until all conditions of the Award have been satisfied or removed, (b) until,
in the opinion of the Company's counsel, all applicable Federal and state laws
and regulations have been complied with, (c) if the outstanding Shares are at
the time listed on any Shares exchange, until the Shares to be delivered have
been listed or authorized to be listed on any such exchange upon official notice
of notice of issuance, and (d) until all other legal matters in connection with
the issuance and delivery of such Shares have been approved by the Company's
counsel. If the sale of Shares has not been registered under the
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Securities Act of 1933, as amended, the Company may require, as a condition of
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Shares bear an appropriate legend
restricting transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Shares pursuant to such exercise
until the Company is satisfied as to the authority of such representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all Federal, state and local withholding
tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Shares may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Shares.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the Shares to be
delivered, or to deliver to the Company, Shares having a value calculated to
satisfy the withholding requirements.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Shares received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (a) to inform the
Company promptly of any disposition (within the meaning of section 424(c) of the
Code) of Shares received upon exercise, and (b) to give such security as the
Committee deems adequate to meet the potential liability of the Company for the
withholding requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the adequacy of
such security.
8.5. Nontransferability of Awards.
No Award may be transferred except by a non-U.K. Shareholder by will or
by the laws of descent and distribution. During a Participant's lifetime, an
Award requiring exercise may be exercised only by him or her (or in the event of
the Participant's incapacity, the person or persons legally appointed to act on
the Participant's behalf).
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a Shares dividend, Shares split or combination of
Shares, recapitalization or other change in the Company's capitalization, or
other distribution to ordinary Shareholders other than normal cash dividends,
after the effective date of the Plan, the Board will make any appropriate
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adjustments to the maximum number of Shares that may be delivered under the Plan
under Section 4 above.
(b) In any event referred to in paragraph (a), the Board will also make
any appropriate adjustments to the number, class and denomination of Shares or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Board may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Board that adjustments are
appropriate to avoid distortion in the operation of the Plan.
(c) An adjustment under paragraph (a) may have the effect of reducing
the exercise price paid for Shares to less than the par value of such Share, but
only if and to the extent that the Committee shall be authorised by the Board to
capitalise from the reserves of the Company a sum equal to the amount by which
the par value of each Share in respect of which the Option is exercised and
which is to be allotted pursuant to such exercise exceeds the price at which the
same may be subscribed for and to apply such sum in paying up such amount on
such Share; and so that on exercise of any Option in respect of which such a
reduction shall have been made the Committee shall capitalise such sum (if any)
and apply the same in paying up such amount as aforesaid.
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or affect in any way the right of the
Company or subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided by the Board in any
particular case, the loss of existing or potential profit in Awards granted
under the Plan will not constitute an element of damages in the event of
termination of an employment, service or similar relationship even if the
termination is in violation of an obligation of the Company to the Participant.
8.8. Deferral of Payments.
The Board may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.
8.9. Past Services as Consideration.
Where a Participant purchases Shares under an Award for a price equal
to the par value of the Shares, the Board may determine that such price has been
satisfied by past services rendered by the Participant.
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9. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND
TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant
will affect the Company's right to grant to such Participant Awards that are not
subject to the Plan or to adopt other plans or arrangements under which Shares
are issued to Employees.
The Board may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at any
time terminate the Plan as to any further grants of Awards, provided that
(except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the Shareholders of the Company,
effectuate a change for which Shareholder approval is required under the United
Kingdom listing rules or in order for the Plan to continue to qualify for the
award of ISOs under Section 422 of the Code and to continue to qualify under
Rule 16b-3 promulgated under Section 16 of the 1934 Act. Among other matters,
such amendment restrictions pertain to the identity of Participants, the limits
on Shares available under the Plan, the individual limits on Shares available
for any one Participant, the basis for determining a Participant's entitlement
to and the terms of any benefit to be provided and the adjustment of such
benefits to take account of variations in share capital. Shareholder approval
would not be required for minor amendments to benefit the administration of the
Plan or to take into account a change in legislation or to obtain or maintain
favorable tax, exchange control or regulatory treatment for Participants or the
Company.
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Appendix B
LEARMONTH BURCHETT MANAGEMENT SYSTEMS PLC
1996 U.S. Employee Stock Purchase Plan
SECTION 1. PURPOSE OF PLAN
The Learmonth Burchett Management Systems Plc 1996 Employee Stock
Purchase Plan (the "Plan") is intended to provide a method by which eligible
employees of such subsidiaries of Learmonth Burchett Management Systems Plc
("LBMS") as LBMS's Board of Directors (the "Board of Directors") may from time
to time designate, and eligible employees of LBMS if the Board of Directors so
determines, (such subsidiaries, together with LBMS, if so determined by the
Board of Directors, being hereinafter referred to as the "Company") may use
voluntary, systematic payroll deductions to purchase Ordinary Shares of LBMS
(the "Stock") and thereby acquire an interest in the future of the Company. For
purposes of the Plan, a "subsidiary" is any corporation in which LBMS owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock.
SECTION 2. OPTIONS TO PURCHASE STOCK
Under the Plan, there is available an aggregate of not more than
500,000 shares of Stock (subject to adjustment as provided in Section 14) for
sale pursuant to the exercise of options ("Options") granted under the Plan to
employees of the Company ("Employees") who meet the eligibility requirements set
forth in Section 3 hereof ("Eligible Employees"). The shares ("Shares") to be
delivered upon exercise of Options under the Plan may be either shares of
authorized but unissued Stock, shares of reacquired Stock, American Depositary
Receipts for American Depositary Shares (each American Depositary Share
representing two Ordinary Shares), or any combination of the foregoing, as the
Board of Directors may determine.
SECTION 3. ELIGIBLE EMPLOYEES
Except as otherwise provided below, each individual who is an Employee
of the Company, who has a customary working schedule of at least 20 hours per
week, and who has been an Employee for at least 90 days as of the first day of
an Option Period (as defined below) will be eligible to participate in the Plan.
(a) Any Employee who immediately after the grant of an option to him or
her would (in accordance with the provisions of Sections 423 and 424(d) of the
Internal Revenue Code of 1986, as amended (the "Code")) own or be deemed to own
stock possessing 5% or more of the total combined voting power or value of all
classes of shares of the employer corporation or of its parent
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or subsidiary corporations, as defined in Section 424 of the Code, will not be
eligible to receive an option to purchase Shares pursuant to the Plan.
(b) No Employee will be granted an Option under the Plan which would
permit his or her rights to purchase shares under all employee stock purchase
plans of LBMS and parent and subsidiary corporations to accrue at a rate which
exceeds $25,000 in fair market value of such shares (determined at the time the
Option is granted) for each calendar year during which any such Option granted
to such Employee is outstanding at any time, as provided in Sections 423 and
424(d) of the Code.
SECTION 4. METHOD OF PARTICIPATION
Each of the periods during which this Plan remains in effect is
hereinafter referred to as an "Option Period". The first Option Period for which
Options may be granted hereunder shall commence on November 1, 1996, and end on
April 30, 1997. Option Periods thereafter shall be of six-months duration, with
the first such period commencing on May 1, 1997. Each person who will be an
Eligible Employee on the first day of an Option Period may elect to participate
in the Plan by executing and delivering, at least 15 days prior to such day, a
payroll deduction authorization in accordance with Section 5. Such Employee will
thereby become a participant ("Participant") for such Option Period and for each
subsequent consecutive Option Period, subject to Section 5 below.
SECTION 5. PAYROLL DEDUCTION
The payroll deduction authorization will request withholding at a rate
(in whole percentages) of not less than 1% nor more than 15% from the
Participant's regular rate of compensation by means of substantially equal
payroll deductions over the Option Period. The payroll deduction authorization
will remain in effect for consecutive subsequent Option Periods unless changed
or revoked by the Participant pursuant to this Section 5. A Participant may
reduce the withholding rate of his or her payroll deduction authorization by one
or more whole percentage points at any time during an Option Period by
delivering written notice to the Company, such reduction to take effect
prospectively as soon as practicable following receipt of such notice by the
Company; provided, that any reduction of the withholding rate to zero shall be
treated as a withdrawal pursuant to Section 10 below. A Participant may increase
or reduce the withholding rate of his or her payroll deduction authorization for
a future Option Period, or cease participation entirely for a future Option
Period, by written notice delivered to the Company at least 15 days prior to the
first day of the Option Period as to which the change is to be effective. All
amounts withheld in accordance with a Participant's payroll deduction
authorization will be credited to a withholding account for such Participant.
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SECTION 6. GRANT OF OPTIONS
Each person who is a Participant on the first day of an Option Period
will as of such day be granted an Option for such Period. Such Option will be
for the number of whole Shares (not in excess of the share maximum as
hereinafter defined) to be determined by dividing (i) the balance in the
Participant's withholding account on the last day of the Option Period, by (ii)
the purchase price per Share determined under Section 7. For purposes of the
preceding sentence, the share maximum with respect to any Option for any Option
Period shall be the largest number of whole Shares which, when multiplied by the
fair market value of a Share at the beginning of the Option Period, produces a
dollar amount of $12,500 or less. The number of Shares that a Participant is
entitled to receive upon exercise of his or her Option for an Option Period will
be reduced, on a substantially proportionate basis, in the event that the number
of Shares then available under the Plan would otherwise be insufficient to
satisfy all exercises of Options for such Option Period.
SECTION 7. PURCHASE PRICE
The purchase price of Shares issued pursuant to the exercise of an
Option will be 85% of the fair market value of the Shares at (a) the time of
grant of the Option or (b) the time at which the Option is deemed exercised,
whichever is less. Fair market value on any given day will mean the Closing
Price of the Shares on such day (or, if there was no Closing Price on such day,
the latest day prior thereto on which there was a Closing Price). The "Closing
Price" of the Shares on any business day will be the last sale price as reported
on the principal U.S. market on which the Shares are traded or, if no last sale
is reported, then the mean between the highest bid and lowest asked prices on
that day. A good faith determination by the Board of Directors as to fair market
value shall be final and binding.
SECTION 8. EXERCISE OF OPTIONS
Each Employee who is a Participant in the Plan on the last business day
of an Option Period will be deemed to have exercised on the last business day of
the Option Period the Option granted to him or her for that Option Period. Upon
such exercise, the balance of the Participant's withholding account will be
applied to the purchase of the number of whole Shares determined under Section
6. In the event that the balance of the Participant's withholding account
following an Option Period is in excess of the total purchase price of the
Shares so issued, the balance of the withholding account (other than that
portion, if any, of such balance representing a fractional share) shall be
returned to the Participant. The entire balance of the Participant's withholding
account following the final Option Period shall be returned to the Participant.
Notwithstanding anything herein to the contrary, LBMS's obligation to
issue and deliver Shares under the Plan is subject to the approval required of
any governmental authority in connection with the authorization, issuance, sale
or transfer of said Shares, to any requirements of any national securities
exchange applicable thereto, and to compliance by the Company with other
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applicable legal requirements in effect from time to time, including without
limitation any applicable tax withholding requirements.
SECTION 9. INTEREST
No interest will be payable on withholding accounts.
SECTION 10. CANCELLATION AND WITHDRAWAL
A Participant may terminate his or her payroll deduction authorization
as of any date by written notice delivered to the Company and, upon receipt of
such notice by the Company, will thereby cease to be a Participant as of such
date. Any Participant who voluntarily terminates his or her payroll deduction
authorization prior to the last business day of an Option Period will be deemed
to have canceled his or her Option. Upon such cancellation, the balance in his
or her withholding account will be returned to him or her.
Any Participant who cancels an Option or terminates his or her payroll
deduction authorization may as of the beginning of a subsequent Option Period
again become a Participant in accordance with Section 4.
SECTION 11. TERMINATION OF EMPLOYMENT
Upon the termination of a Participant's employment with the Company for
any reason, including death, he or she will cease to be a Participant, and (i)
any Option held by such Participant under the Plan will be deemed canceled, and
(ii) LBMS will deliver to the Participant the balance of his or her withholding
account.
SECTION 12. PARTICIPANT'S RIGHTS NOT TRANSFERABLE
All Participants will have the same rights and privileges under the
Plan. Each Participant's rights and privileges under any Option may be
exercisable during his or her lifetime only by him or her, and may not be sold,
pledged, assigned, or transferred in any manner. In the event any Participant
violates the terms of this Section, any Option held by him or her may be
terminated by the Company and upon return to the Participant of the balance of
his or her withholding account, all of his or her rights under the Plan will
terminate.
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SECTION 13. EMPLOYMENT RIGHTS
Nothing contained in the provisions of the Plan will be construed to
give to any Employee the right to be retained in the employ of the Company or to
interfere with the right of the Company to discharge any Employee at any time.
The loss of existing or potential profit in Options will not constitute an
element of damages in the event of termination of employment for any reason,
even if the termination is in violation of an obligation to the Employee.
SECTION 14. CHANGE IN CAPITALIZATION
In the event of any change in the outstanding Stock of LBMS by reason
of a stock dividend, split-up, recapitalization, merger, consolidation,
reorganization, or other capital change, after the effective date of this Plan,
the aggregate number of Shares available under the Plan, the number of Shares
under Options granted but not exercised, and the Option price will be
appropriately adjusted.
SECTION 15. ADMINISTRATION OF PLAN
The Plan will be administered by the Remuneration Committee of the
Board of Directors, which will have the right to resolve any questions which may
arise regarding the interpretation and application of the provisions of the Plan
and to make, administer, and interpret such rules and regulations as it deems
necessary or advisable. The Remuneration Committee's determinations hereunder
shall be final and binding.
SECTION 16. AMENDMENT AND TERMINATION OF PLAN
LBMS reserves the right at any time or times to amend the Plan to any
extent and in any manner it may deem advisable by vote of the Board of
Directors; provided, however, that any amendment relating to the aggregate
number of shares which may be issued under the Plan (other than an adjustment
provided for in Section 14) or the corporations whose employees are eligible to
receive Options under the plan, will have no force or effect unless, to the
extent required under Treas. Reg. ss. 1.423-2(c), such amendment is approved by
the shareholders of LBMS within twelve months before or after its adoption.
The Plan shall terminate automatically following the end of the Option
Period beginning August 2, 2006; provided, however, that the Board of Directors
in its discretion may extend the Plan for one or more Option Periods. The Plan
may be suspended or terminated earlier by the Board of Directors, but no such
suspension or termination will adversely affect the rights and privileges of
holders of outstanding Options. The Plan will terminate in any case when all or
substantially all the Shares reserved for the purposes of the Plan have been
purchased.
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SECTION 17. APPROVAL OF SHAREHOLDERS
The Plan is subject to the approval of the shareholders of LBMS, which
approval must be secured within twelve months before or after the date the Plan
is adopted by the Board of Directors, and any Option granted hereunder prior to
such approval is conditioned on such approval being obtained prior to the
exercise thereof.
As adopted by the Board of Directors on August 2, 1996.
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Appendix C
LEARMONTH & BURCHETT MANAGEMENT SYSTEMS, PLC
1996 NON-EMPLOYEE DIRECTORS' SHARE OPTION PLAN
1. Purpose. The purpose of this 1996 Non-Employee Directors' Share
Option Plan (the "Plan") is to advance the interests of Learmonth & Burchett
Management Systems, Plc (the "Company") by enhancing the ability of the Company
to attract new non-employee directors who are in a position to make significant
contributions to the success of the Company and to reward directors for such
contributions through ownership of shares of the Company's Ordinary Shares (the
"Shares").
2. Administration. The Plan will be administered by a Committee (the
"Committee") of the Board of Directors of the Company (the "Board") and shall
consist of at least two directors. Each of the Committee members shall be a
"Non-employee Director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). A majority of the members of
the Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members. No member of the
Committee may vote on the grant of an option to himself.
The Committee shall have authority, not inconsistent with the express
provisions of the Plan (a) to grant options on Shares or ADSs ("Options") at
such time or times as it may choose (subject to Section 3); (b) to determine the
number of Shares or American Depositary Shares (ADSs) subject to the Options;
(c) to determine the terms and conditions of each Option; (d) to waive
compliance by an Eligible Director (as defined below) with any obligations to be
performed by the Eligible Director under an Option and waive any term or
condition of an Option (subject to Section 14); (e) to amend or cancel an
existing Option in whole or in part (and if an Option is canceled, grant another
Option in its place on such terms as the Committee shall specify), or settle any
Option by paying the cash value of the Shares or ADSs otherwise issuable, except
that the Committee may not, without the consent of the holder of an Option, take
any action under this clause with respect to such Option if such action would
adversely affect the rights of such holder; (f) to prescribe the form or forms
of instruments evidencing awards and any other instruments required under the
Plan and to change such forms from time to time; (g) to adopt, amend and rescind
rules and regulations for the administration of the Plan; and (h) to interpret
the Plan and to decide any questions and settle all controversies and disputes
that may arise in connection with the Plan. Such determinations of the Committee
shall be conclusive and shall bind all parties.
3. Eligibility of Directors for Share Options. Directors eligible to
receive Options under the Plan ("Eligible Directors") shall be those directors
who are not, at the time they become an Eligible Director, employees of the
Company or of any subsidiary of the Company and (i) who are directors on the
Effective Date of this Plan (which shall be the eligibility date for such
directors)
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or (ii) who are first elected a director of the Company after the Effective Date
of this Plan (which election date shall be the eligibility date for any such
director).
4. Grant of Options; Exercise Price. The Committee may, at such time or
times as it may choose, grant Options to any Eligible Director; provided,
however, that any Options granted to Eligible Directors who are residents of the
United States shall be Options on ADSs. The exercise price and other terms and
conditions of such Options shall be determined by the Committee. All Options
shall expire ten years after the effective date of grant.
5. Number of Shares. The number of Shares which may be issued upon the
exercise of Options granted under the Plan, including Shares forfeited pursuant
to Section 7 and 8, shall not exceed 500,000 Shares in the aggregate, subject to
increase under Section 11, which increases and appropriate adjustments as a
result thereof shall be made by the Committee, whose determination shall be
binding on all persons.
6. Shares to be Delivered. Shares to be delivered pursuant to an Option
granted under this Plan shall constitute an original issue of authorized Shares.
The Board and the proper officers of the Company shall take any appropriate
action required for such delivery. No fractional Shares shall be delivered under
the Plan.
The Company will not be obligated to deliver any Shares or ADSs
pursuant to the Plan (a) until all conditions of the Option have been satisfied,
(b) until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulation have been complied with, (c) if the Company's Ordinary
Shares or ADSs are at the time listed on NASDAQ or any other stock exchange,
until the Shares or ADSs to be delivered have been listed or authorized to be
listed on NASDAQ or such other exchange upon official notice of issuance, and
(d) until all other legal matters in connection with the issuance and delivery
of such Shares have been approved by the Company's counsel. If the sale of the
Shares has not been registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the Options, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Shares bear an appropriate legend restricting transfer.
If an Option is exercised by the Eligible Director's legal
representative, the Company will be under no obligation to deliver Shares
pursuant to such exercise until the Company is satisfied as to the authority of
such representative.
7. Exercisability; Exercise; Payment of Exercise Price. Each Option
shall become exercisable at such time or times, and on such conditions, as the
Committee shall specify. The Committee may at any time and from time to time
accelerate the time at which all or any part of an Option may be exercised,
provide for the acceleration of the exercisability of any Option upon the
occurrence of certain events, or extend the time by which an Option must be
exercised (e.g., following death or termination of employment) up to the latest
day by which such Option could be exercised without regard to Section 8 hereof.
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Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full as provided below for the
number of Shares for which the Option is exercised.
The exercise price of Shares purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if permitted by the Committee,
by delivery of a promissory note of the Option holder to the Company, payable on
such terms as are specified by the Committee, or (3) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (4) by any combination of
the permissible forms of payment.
To the extent Shares covered under an Option are not delivered because
the Option lapses or is terminated, such forfeited Shares may be regranted in
another Option within the limits set forth in Section 5.
8. Termination of Options.
a. If an Eligible Director ceases to be a director by reason of
death or total and permanent disability (as determined by the Committee), the
following will apply:
All Options held by the Eligible Director that are not exercisable on
the thirtieth day after termination of the Eligible Director's status as a
director will terminate as of such date. All Options that are exercisable as of
said thirtieth day will continue to be exercisable until the earlier of (1) the
first anniversary of the date on which the Eligible Director's status as a
director ended or (2) the date on which the Option would have terminated had the
Eligible Director remained a director, and after completion of that period, such
Options shall terminate to the extent not previously exercised, expired or
terminated. The Option may be exercised within the above limits by the Eligible
Director's legal representative.
b. If an Eligible Director's service with the Company terminates for
any reason other than death or incapacity as provided above, all Options held by
the director that are not then exercisable shall terminate. Options that are
exercisable on the date of such termination (other than termination upon a
removal for cause, in which event all Options shall immediately terminate) shall
continue to be exercisable until the earlier of (1) three months thereafter or
(2) the date on which the Option would have terminated had the director remained
an Eligible Director, and after completion of that period, such Options shall
terminate to the extent not previously exercised, expired or terminated.
c. Change in Control. Notwithstanding Section 8(b) above, if an
Eligible Director ceases to be a director following a "Change in Control" (as
defined in Section 9(a)), and if the Shares or ADSs are, following such change
in control, traded on a major stock exchange or inter-dealer quotation system in
the United States or elsewhere (including the NASDAQ or the
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EASDAQ), any Options that were exercisable immediately before the termination
will continue to be exercisable for the full period during which it could be
exercised.
9. Change of Control; Sale of Assets.
a. In the event of a Change of Control, all outstanding Options
shall become immediately exercisable in full. For the purposes of this plan, a
"Change in Control" shall mean any of the following:
(i) any Person or "group" (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934),
other than the Company or any of its Affiliates, becomes a
beneficial owner (within the meaning of Rule 13d-3 as
promulgated under the Securities Exchange Act of 1934),
directly or indirectly, of securities representing thirty
percent (30%) or more of the total number of votes that may be
cast for the election of directors of the Company;
(ii) there occurs any sale of all or substantially all of the
assets of the Company;
(iii) within eighteen months after a tender offer or exchange
offer for voting securities of the Company (other than by the
Company) individuals who were directors of the Company
immediately prior thereto shall cease to constitute a majority
of the Board;
(iv) within eighteen months after proxies are solicited for
voting securities of the Company by persons other than the
Company or its Board, individuals who were directors of the
Company immediately prior to such transaction cease to
constitute a majority of the Board;
(v) any Person or "group," other than the Company or any of
its affiliates, obtains control if the Company in pursuance of
a compromise or arrangement sanctioned by the court under
Section 425 of the Companies Act 1985; or
(vi) any Person or "group," other than the Company or any of
its affiliates, acquires all or the major part of the
undertaking of the Company pursuant to a reorganization under
Section 110 of the Insolvency Act 1986.
(vii) "Change in Control" shall not include a change in legal
domicile or any sale, reorganization, compromise or
arrangement or other transaction which the Board determines in
its discretion acting in good faith to be effected in order to
change the legal domicile of the Company or the holding
company of the Company's group of companies and which leaves
control of the Company substantially unaffected or control of
the holding company in the same hands as control of the
Company prior to such transaction.
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b. In the event of the sale of all or substantially all of the assets
of the Company, all outstanding Options shall remain exercisable for a period of
six months following such sale, or for such shorter period (but in no event less
than 30 days) as may be provided in any arrangement for the liquidation of the
Company.
10. General Provisions
a. Documentation of Options. Options will be evidenced by written
instruments prescribed by the Committee from time to time. Such instruments may
be in the form of agreements, to be executed by both an Eligible Director and
the Company, or certificates, letters or similar instruments, which need not be
executed by an Eligible Director but acceptance of which will evidence agreement
to the terms thereof.
b. Rights as a Shareholder. An Option holder shall not have the
rights of a stockholder with respect to Options under the Plan except as to
Shares actually received by him or her under the Plan.
c. Tax Withholding. The Eligible Director or other appropriate person
shall remit to the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the Committee with
regard to such requirements, prior to the delivery of any Shares. [If and to the
extent that such withholding is required, the Committee may permit the Eligible
Director such other person to elect at such time and in such manner as the
Committee provides to have the Company hold back from the Shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement.]
d. Nontransferability of Options. No Option may be transferred other
than by will or by the laws of descent and distribution, and during a director's
lifetime an Option may be exercised only by the director (or, in the event of
the director's incapacity, the person or persons legally appointed to act on the
director's behalf).
11. Adjustments in the Event of Certain Transactions.
a. In the event of a Share dividend, Share split or combination of
Shares, recapitalization or other change in the Company's capitalization, or
other distribution to common Shareholders other than normal cash dividends, the
Committee will make any appropriate adjustments to the maximum number of Shares
that may be delivered under the Plan under Section 5 above.
b. In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of Shares or securities
subject to Options then outstanding or subsequently granted, exercise prices
relating to Options and any other provision of Options affected by such change.
The Committee may also make such adjustments to take into account material
changes in law or in accounting practices or principles, mergers,
consolidations,
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acquisitions, dispositions or similar corporate transactions, or any other
event, if it is determined by the Committee that adjustments are appropriate to
avoid distortion in the operation of the Plan.
12. Fair Market Value. For purposes of the Plan, Fair Market Value of a
Share or ADS on any date will be the average of the bid and asked prices in the
over-the-counter market with respect to the Company's ADSs, as reported by the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotations
System or such other similar system then in use (or by the appropriate
equivalent closing price if the ADSs are then listed on any Share exchange or is
included in the NASD National Market System), on that date; or, if on any such a
date such Share or ADS is not quoted by any such organization, the average of
the closing bid and asked prices with respect to such Share or ADS, as furnished
by a professional market maker making a market in such Share or ADS selected by
the Committee; or if such prices are not available, the fair market value of
such Share or ADS as of such date as determined in good faith by the Committee.
13. Effective Date and Term. This Plan, having been approved by the
Board of Directors on September 26, 1996, shall become, in accordance with the
terms of the approving vote of the Board, effective immediately (the "Effective
Date"), subject to approval of this Plan by vote of a majority of the
Shareholders of the Company present and eligible to vote on the question at an
annual or special meeting of Shareholders held not later than September 1, 1997.
Options may be granted under the Plan prior to the date of Shareholder approval,
and Options so granted shall be effective on the effective date of grant subject
to Shareholder approval of the Plan as provided in this Section. No Options may
be awarded under this Plan after August 2, 2006, but the Plan shall continue
thereafter while previously awarded Options remain subject to the Plan.
14. Effect of Termination, and Amendment. Neither adoption of the Plan
nor the grant of Options to an Eligible Director shall confer upon any person
any right to continued status as a director with the Company or any subsidiary
or affect in any way the right of the Company or subsidiary to terminate a
director relationship at any time or shall affect the Company's right to grant
to such director Options or other Share awards that are not subject to the Plan,
to issue to such director Shares as a bonus or otherwise, or to adopt other
plans or arrangements under which Shares may be issued to directors. The
Committee may at any time terminate the Plan as to any further grants of
Options. The Committee may at any time or times amend the Plan for any purpose
which may at the time be permitted by law, but in no event (except to comply
with the provisions of the Internal Revenue Code, the Employee Retirement Income
Security Act or the rules thereunder more than once in any six-month period.
As adopted by the Board of Directors on September 26, 1996.
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt as to the action you should take, you should consult your stockbroker,
bank manager, solicitor, accountant or other independent financial advisor
authorized under the Financial Services Act 1986 immediately.
If you have sold or transferred all of your American Depositary Receipts and
ordinary shares in Learmonth & Burchett Management Systems Plc, please forward
this circular and its enclosures to the purchaser or transferee or to the
stockbroker or other agent through or to whom the sale or transfer was effected.
LEARMONTH & BURCHETT MANAGEMENT SYSTEMS PLC
Notice of Extraordinary General Meeting
- ------------------------------------------------------------------------------
The Extraordinary General Meeting will be held at Learmonth & Burchett
Management Systems Plc, 1800 West Loop South, 9th Floor, Houston, Texas 77027 on
Friday 15th November 1996 at 11:15 a.m. CST or so soon thereafter as the Annual
General Meeting scheduled for 11:00 a.m. CST on that day shall have finished.
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16 October 1996
Dear Shareholder,
Notice of an Extraordinary General Meeting to be held on 15 November 1996
This letter encloses a formal notice that LBMS will hold an Extraordinary
General Meeting at 1800 West Loop South, 9th Floor, Houston, Texas immediately
following the Annual General Meeting on 15 November 1996 at 11:00 a.m.
The purpose of the meeting is to explain our financial position following the
implementation of a restructuring plan. On 22 August 1996, LBMS reported first
quarter financial results. For the three months ended 31 July 1996, the company
reported a net loss of $4.3 million, or $0.34 per American Depositary Share
($0.17 per Ordinary Share), on total revenue of $5.3 million, compared to net
income of $459,000 or $0.04 per American Depositary Share ($0.02 per Ordinary
Share) on total revenue of $9.8 million for the three months ended 31 July 1995.
The decline in total revenue from the fourth quarter of fiscal 1996 to the first
quarter of fiscal 1997 was attributed to lower revenue outside of the U.S. and
the historical seasonal downturn in U.S. revenue in the first quarter.
Based on the financial results for the three months ended 31 July 1996, the
Company's Board of Directors concluded that a restructuring of the Company's
operations was required. The restructuring plan that the Board of Directors
approved is aimed at returning LBMS to profitability through focusing on the
company's established strengths in the process management market and reducing
operating costs outside the U.S. In connection with the restructuring plan, the
Company expects to record a one-time restructuring charge of approximately $18
million in the three months ending 31 October 1996. This charge is expected to
relate primarily to lease costs and severance costs. The recording of the
one-time restructuring charge has the effect of reducing net assets to below 50%
of the Company's called up share capital. This reduction of net assets triggers
a provision of the 1985 Companies Act which requires a General Meeting to be
held in certain circumstances. The purpose of the General Meeting is for LBMS,
as a public company, to explain its financial position at such General Meeting
and to give shareholders an opportunity to raise any questions they may have and
to consider whether any further steps should be taken to rectify the effect of
the restructuring plan on the net asset position of the Company. According to
the 1985 Companies Act, such General Meeting must be held within 56 days of the
Directors becoming aware of the above described net assets position, and
therefore we have called for an Extraordinary General Meeting to be held on 15th
November.
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There will be no resolutions to be put to a vote at the Extraordinary General
Meeting. The purpose of the Extraordinary General Meeting is to provide the
shareholders with more detail regarding the information contained in this letter
and to answer any questions that attending shareholders may have.
I look forward to the possibility of meeting each of you on 15 November 1996 and
of answering any questions you may have.
Yours faithfully
Michael S. Bennett
President and Chief Executive Officer
Enc: Notice of Extraordinary General Meeting
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LEARMONTH & BURCHETT MANAGEMENT SYSTEMS Plc
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Company will
be held at 11:15 a.m. CST on Friday 15th November 1996 or so soon thereafter as
the Annual General Meeting scheduled for 11:00 a.m. CST on that day shall have
finished. LBMS offices at 1800 West Loop South, 9th Floor, Houston, Texas 77027,
for the purposes of considering whether steps should be taken to deal with the
reduction of the Company's net assets by virtue of the one-time restructuring
charge of $18 million as set out in the circular to members dated 16 October
1996.
Dated: 16 October 1996
Registered Office: BY ORDER OF THE BOARD
Evelyn House
62 Oxford Street Stephen E. Odom
London W1N 9LF Secretary
NOTE: A member entitled to attend and vote at the meeting convened by this
notice is entitled to appoint a proxy to attend and, upon a poll, vote
on his or her behalf. A proxy need not be a member of the Company. If
you wish to appoint a proxy to attend the meeting, please contact
Stephen Odom in the U.S. at (713) 625-9311 or Maggie Mellor in the U.K.
at 171-878-8700.
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Notice is hereby given that the Annual General Meeting of Learmonth &
Burchett Management Systems Plc (the "Company") will be held at the
Company's executive offices located at 1800 West Loop South, Suite 900,
Houston, Texas, on Friday, November 15, 1996 at 11:00 a.m. central
standard time ("CST") to transact the following business:
As ORDINARY BUSINESS:
1. To receive and adopt the Directors' Report and the audited
accounts for the year ended April 30, 1996.
2. To re-elect Gerald N. Christopher, who was appointed as a
Director on August 2, 1996.
3. To re-elect Michael S. Bennett, who was appointed as a
Director on August 2, 1996.
4. To re-elect David B. Rodway, who retires as a Director by
rotation.
5. To re-elect Rainer H. Burchett, who retires as a Director by
rotation.
6. To re-appoint the auditors Price Waterhouse to hold office
until the next Annual General Meeting and to authorize the
Directors to fix their remuneration.
7. To approve the payment of fees to the non-Executive Directors
of the Company of an aggregate of up to (pound)55,000 in the
year to April 30, 1997 (being in excess of the (pound)40,000
limit currently set forth in the Company's Articles of
Association).
As SPECIAL BUSINESS, to consider, and if thought fit to pass, the
following resolutions, of which Resolutions 8, 9, 10, 11 and 12 will be proposed
as Ordinary Resolutions and Resolution 13 will be proposed as a Special
Resolution:
8. To approve the adoption of the 1996 Equity Incentive Plan.
9. To approve the adoption of the 1996 U.S. Employee Stock
Purchase Plan.
10. To approve the adoption of the 1996 Non-employee Directors'
Share Option Plan.
11. To approve an amendment to the Executive Share Option Scheme
and to certain option certificates relating to options granted
thereunder.
12. To authorize the Directors to allot shares.
13. To approve disapplication of preemptive rights of holders of
ordinary shares.
By order of the Board
Stephen Odom
Secretary
16 October 1996
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Please complete in BLOCK CAPITALS
I/We____________________________________________________________________________
of _____________________________________________________________________________
- --------------------------------------------------------------------------------
Being (a) holder(s) of ordinary shares of Learmonth & Burchett Management
Systems Plc hereby appoint the Chairman or failing him R A Learmonth (Director
of the Company) or failing them,
___________________________________________ of _________________________________
as my/our proxy vote for me/us on my/our behalf at the Annual General Meeting of
the Company to be held on 15 November 1996 and at any adjournment thereof:
I/We direct my/our proxy vote on the Resolutions set out in the Notice convening
the Annual General Meeting (copy attached) as follows:
<TABLE>
<CAPTION>
RESOLUTION 1 RESOLUTION 2 RESOLUTION 3 RESOLUTION 4
- ---------------------------------------------------------------------------------------------------------
<S> <C>
In favour of o o o o
- ---------------------------------------------------------------------------------------------------------
Against o o o o
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
RESOLUTION 5 RESOLUTION 6 RESOLUTION 7 RESOLUTION 8
- ---------------------------------------------------------------------------------------------------------
<S> <C>
In favour of o o o o
- ---------------------------------------------------------------------------------------------------------
Against o o o o
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RESOLUTION 9 RESOLUTION 10 RESOLUTION 11 RESOLUTION 12 RESOLUTION 13
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
In favour of o o o o o
- -------------------------------------------------------------------------------------------------------------------------------
Against o o o o o
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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Please tick one of the circles beneath each resolution. If no tick appears
against a resolution you will be deemed to have authorised your proxy to
exercise his/her discretion as to whether, and if so how, he/she votes.
Signed______________________________________
Date________________________________
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NOTES
- ---------------------------------------------------------------------------
1. You may appoint a proxy by entering the
name of the person you wish to appoint
in the space provided. Such proxy need
not be a member of the Company. The
Chairman of the Meeting will act as your
proxy if no other name is inserted.
2. In the case of joint holders, any of
them may vote at the meeting either
personally or by proxy. If more than one
of them is present at the meeting either
personally or by proxy, that one whose
name should first be entered in the
Register of Meetings will alone be
entitled to vote.
3. If any other proxy be preferred to the
names in this form, these may be struck
out and the name(s) and address(es) of
the proxy and (if so required) the
alternate proxy, inserted in the space
available.
4. Any alterations in this Form of Proxy
must be initialled.
5. In the case of a Corporation the proxy
should be executed under its Common Seal
or under the hand of some officer, duly
authorised in writing in that behalf.
6. This proxy to be valid must be lodged at
the Company's registrar office not later
than 48 hours before the time of the
meeting.
Please complete and return to:
Stephen Odom
Evelyn House
62 Oxford Street
London W1N 9LF
ENGLAND
-4-
