<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Learmonth & Burchett Management Systems Plc
(Exact name of registrant as specified in its charter)
England
(State or other jurisdiction of incorporation or organization)
None
(I.R.S. Employer Identification No.)
1800 West Loop South, 9th Floor, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
1996 Equity Incentive Plan
1996 U.S. Employee Stock Purchase Plan
1996 Non-employee Directors' Share Option Plan
The Executive Share Option Scheme
The ESOP Share Option Scheme
(Full title of the plan)
Stephen E. Odom
(Name and address of agent for service)
(713) 625-9300
(Telephone Number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed Proposed Amount of
to be registered(1) registered(1) maximum offering maximum registration fee(3)
price per share(2) aggregate offering
price(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American 4,204,790.5 ADSs (Pounds)0.4425 - $13,878,253.00 $4,205.53
Depositary Shares (8,409,581 Ordinary (Pounds)1.8225
Shares) ($0.72 - $2.96)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each American Depositary Share ("ADS") represents two Ordinary Shares, par
value (Pounds)0.10 (the "Ordinary Shares") of Learmonth & Burchett Management
Systems Plc, a public limited company incorporated under the laws of England
("LBMS" or the "Company"). Such Ordinary Shares, upon issuance following the
exercise of options, will be represented by Ordinary Shares Certificates, but
shall be registered as ADSs and represented by American Depositary Receipts in
any sale executed over a U.S. stock exchange or in the over-the-counter market.
<PAGE>
(2) The offering price for ADSs subject to options on the date hereof is the
actual exercise price of Ordinary Shares subject to such options. Where such
option exercise price is represented in British Pounds Sterling ((Pounds)), the
conversion ratio to U.S. dollars is (Pounds)1.00 = $1.622, which was the
conversion ratio on March 13, 1997. Of the 8,409,581 Ordinary Shares
represented by the ADSs to be registered hereunder, (i) 1,075,800 Ordinary
Shares are subject to options under the Executive Share Option Scheme, with
7,000 at an exercise price of (Pounds)0.4675, 4,500 at an exercise price of
(Pounds)1.8225, 64,000 at an exercise price of (Pounds)0.4425, 43,000 at an
exercise price of (Pounds)0.6425, 149,000 at an exercise price of (Pounds)0.99,
541,000 at an exercise price of (Pounds)1.48, and 267,300 at an exercise price
of (Pounds)1.33; (ii) 655,450 Ordinary Shares are subject to options under the
ESOP Share Option Scheme, with 51,750 at an exercise price of (Pounds)1.00,
441,000 at an exercise price of (Pounds)0.85, 25,000 at an exercise price of
(Pounds)1.33 and 137,700 at an exercise price of (Pounds)1.33; and (iii)
2,392,000 Ordinary Shares are subject to options under the 1996 Equity Incentive
Plan, with 1,250,000 at an exercise price of $1.185, 1,132,000 at an exercise
price of $1.19, and 10,000 at an exercise price of $1.75. The offering price
for the remaining ADSs representing the 4,286,331 Ordinary Shares authorized
pursuant to the various Plans but not subject to options on the date hereof has
been estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low prices
of Learmonth & Burchett Management Systems Plc American Depositary Shares
reported on the Nasdaq National Market System on March 18, 1997, which average
was $3.625 per ADS.
(3) The Registration fee was calculated based on a British pounds sterling to
U.S. dollar conversion ratio of (Pounds)1.00 to $1.622 which was effective March
13, 1997. The Registration fee consists of $674.27 payable in respect of
1,075,800 Ordinary Shares subject to options under the Executive Share Option
Scheme at exercise prices from (Pounds)0.4425 to (Pounds)1.8225 per share, plus
$316.35 payable in respect of 655,450 Ordinary Shares subject to options under
the ESOP Share Option Scheme at exercise prices from (Pounds)0.85 to
(Pounds)1.33 per share, plus $862.37 payable in respect of 2,392,000 Ordinary
Shares represented by the ADSs subject to options under the 1996 Equity
Incentive Plan at exercise prices from $1.185 to $1.75, plus $2,352.54 payable
in respect of 4,286,331 Ordinary Shares represented by ADSs authorized pursuant
to the various Plans that are not yet subject to options on the date hereof.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan(s) described herein.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------- ---------------------------------------
The following registrant's documents are incorporated by reference in the
registrant's registration statement:
1. The registrants annual report on Form 10-K for the fiscal year ended
April 30, 1996 (File No. 0-27218);
2. The registrant's quarterly reports on Form 10-Q for the fiscal quarters
ended July 31, 1996 and October 31, 1996 (File No. 0-27218);
3. The registrant's description of its American Depositary Shares, each
representing two (2) Ordinary Shares, as set forth in the registrant's
Registration Statement on Form F-1 filed with the Commission on November
15, 1995 (Registration No. 33-97454).
All documents subsequently filed by the registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then
<PAGE>
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
- ------- -------------------------
Not Required
Item 5. Interests of Named Experts and Counsel.
- ------- --------------------------------------
None
Item 6. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Except as hereinafter provided, there is no provision of the Company's
Memorandum of Association, Articles of Association or any contract, arrangement
or statute under which any director or officer of the Company is insured or
indemnified in any manner against any liability that he may incur in his
capacity as such.
The Articles of Association of the Company provide that every director,
other officer or auditor of the Company shall be entitled to be indemnified by
the Company against any liability, loss or expenditure incurred by him in or
related to the execution of his office.
The Company entered into indemnity agreements with the Directors of the
Company in connection with its initial public offering in November 1995. Such
indemnity agreements are subject to the provisions of the Companies Act 1985 as
set out below.
The Board may exercise all the powers of the Company to purchase and
maintain insurance for any person (including former directors and other officers
of the Company) indemnifying him against liability for negligence, default,
breach of duty or breach of trust or any other liability which may lawfully be
insured against by the Company.
Section 310 of the Companies Act 1985 provides:
(1) This section applies to any provision, whether contained in a company's
articles or in any contract with the company or otherwise, for exempting
any officer of the company or any person (whether an officer or not)
employed by the company as auditor from or indemnifying him against any
liability which by virtue of any rule of law would otherwise attach to him
in respect to any negligence, default, breach of duty or breach of trust of
which he may be guilty in relation to the company.
(2) Except as provided by the following subsection, any such provision is
void.
(3) This section does not prevent a company:
(a) from purchasing and maintaining for any such officer or auditor
insurance against any such liability, or
<PAGE>
(b) from indemnifying any such officer or auditor against any
liability incurred by him
(i) in defending any proceedings (whether civil or criminal) in
which judgment is given in his favor or he is acquitted, or
(ii) in connection with any application under Section 144(3) or
(4) (acquisition of shares by innocent nominee) or Section 727
(general power to grant relief in case of honest and reasonable
conduct) in which relief is granted to him by the court.
Section 727 of the Companies Act 1985 provides:
(1) If in any proceedings for negligence, default, breach of duty or breach
of trust against an officer of a company or a person employed by a company
as auditor (whether he is not an officer of the company) it appears to the
court hearing the case that the officer or person is or may be liable in
respect of the negligence, default, breach of duty or breach of trust, but
that he has acted honestly and reasonably, and that having regard to all
the circumstances of the case (including those connected with his
appointment) he ought fairly to be excused for the negligence, default,
breach of duty or breach of trust, that court may relieve him, either
wholly or partly, from his liability on such terms as the court thinks fit.
(2) If any such officer or person as above-mentioned has reason to
apprehend that any claim will or might be made against him in respect of
any negligence, default, breach of duty or breach of trust, he may apply to
the court for relief; and the court on the application has the same power
to relieve him as under this section it would have had if it had been a
court before which proceedings against that person for negligence, default,
breach of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a judge,
with a jury, the judge, after hearing the evidence, may, if he is satisfied
that the defendant or defender ought to pursuance of that subsection to be
relieved either in whole or in part from the liability sought to be
enforced against him, withdraw the case in whole or in part from the jury
and forthwith direct judgment to be entered for the defendant or defender
on such terms as to costs or otherwise as the judge may think proper.
Item 7. Exemption from Registration Claimed.
- ------- -----------------------------------
Not Required
Item 8. Exhibits.
- ------- --------
4.1 Specimen Ordinary Share Certificate of Learmonth & Burchett
Management Systems Plc which is incorporated by reference in Exhibit
4.1 of the Registrant's Registration Statement on Form F-1, No. 33-
97454.
4.2 Form of Deposit Agreement among the Company, Morgan Guaranty Trust
Company of New York, as Depositary, and the holders from time to
time of American Depositary Receipts issued thereunder which is
incorporated by
<PAGE>
reference in Exhibit 4.2 of the Registrant's Registration Statement
on Form F-1, No. 33-97454.
4.3 Form of American Depositary Receipt (included in Exhibit 4.2)
5 Opinion of Macfarlanes, the Company's English counsel
23.1 Consent of Price Waterhouse LLP, independent accountants
23.2 Consent of Macfarlanes (contained in its opinion filed as Exhibit 5
to this registration statement)
99.1 1996 Equity Incentive Plan
99.2 1996 U.S. Employee Stock Purchase Plan
99.3 1996 Non-employee Directors' Share Option Plan
99.4 The ESOP Share Option Scheme
99.5 The Executive Share Option Scheme
Item 9. Undertakings.
- ------- ------------
(a) Rule 415 offering
-----------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
<PAGE>
(b) Filings incorporating subsequent Exchange Act documents by reference.
---------------------------------------------------------------------
The undersigned registrant hereby undertakes that, for purposes of determining
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(h) Request for acceleration of effective date or filing of registration
--------------------------------------------------------------------
statement on Form S-8.
----------------------
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on March 19, 1997.
LEARMONTH & BURCHETT MANAGEMENT SYSTEMS PLC
By: /s/ Michael S. Bennett
--------------------------------------------------
Michael S. Bennett, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Michael S. Bennett Chief Executive Officer, President and Director March 19, 1997
- ----------------------------- (Principal Executive Officer)
Michael S. Bennett
/s/ Stephen E. Odom Chief Financial Officer and Senior Vice- March 19, 1997
- ----------------------------- President-Finance and Administration
Stephen E. Odom (Principal Financial and Accounting Officer)
/s/ Gerald N Christopher Chairman of the Board March 19, 1997
- -----------------------------
Gerald N. Christopher
/s/ Roger A. Learmonth Director March 19, 1997
- -----------------------------
Roger A. Learmonth
/s/ Rainer H. Burchett Director March 19, 1997
- -----------------------------
Rainer H. Burchett
/s/ Felda Hardymon Director March 19, 1997
- -----------------------------
Felda Hardymon
</TABLE>
<PAGE>
EXHIBIT 5
---------
OPINION AND CONSENT OF COUNSEL
------------------------------
The Directors
Learmonth & Burchett Management Systems plc
1800 West Loop South
9th Floor
Houston
Texas
USA
18 March 1997
Dear Sirs
This opinion is delivered to you in connection with a Registration Statement on
Form S-8 ( the "Registration Statement") filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, for
the registration of American Depositary Shares representing up to 8,409,581
ordinary shares of 10p par value per share (the "Shares") in the capital of
Learmonth & Burchett Management Systems plc (the "Company"). The Shares are
issuable under LBMS Executive Option Scheme, the LBMS ESOP Share Option Scheme,
and the LBMS Equity Incentive Scheme (together, the "Plans").
We have acted as English lawyers for the Company. For purposes of this opinion,
we have assumed:-
(a) that the options pursuant to which the Shares are issuable have been
duly granted and exercised in accordance with the rules of the Plan;
and
(b) that (as was the case immediately following the Company's annual
general meeting held on 15 November 1996) there will be, at the time of
issue of the Shares, sufficient authorised but unissued share capital
to allot the Shares, that sufficient authority to allot the Shares
under Section 80 of the Companies Act 1985 (the "Act") has been granted
to the directors and remains in force and that Section 89 of the Act
has been disapplied in respect of any allotment of the Shares.
Based upon the foregoing, we are of the opinion that, upon the due passing of
resolutions a duly convened meeting of the board of directors of the Company to
allot and issue the Shares, receipt by the Company of the subscription price
therefor in accordance with the rules of the Plans and the entry of the names of
the allottees of the Shares in the register of members of the Company, the
Shares will have been validly issued and will be fully paid and non-assessable.
This opinion is limited to English law as applied by the English courts as at
the date of this letter and is given on the basis that it will be governed by
and construed in accordance with English law.
<PAGE>
We hereby consent to your filing this opinion as an Exhibit to the Registration
Statement. Save as aforesaid, this opinion is addressed to and may be relied on
solely by the addressee. It may not be regarded as addressed to or relied on by
any other person without our prior written consent. It is strictly limited to
the matters stated herein and does not extend to, and is not to be read as
extending by implication to, any other matter in connection with the issue of
the Shares or the Registration Statement.
Yours faithfully,
MACFARLANES
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Learmonth & Burchett Management Systems, Plc of our
report dated May 31, 1996, appearing on page 26 of the Form 10-K for the year
ended April 30, 1996.
PRICE WATERHOUSE
Houston, Texas
March 18, 1997
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF COUNSEL
------------------
(See Exhibit 5)
<PAGE>
EXHIBIT 99.1
------------
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
<PAGE>
of the 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.
6. TYPES OF AWARDS
<PAGE>
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/1/ 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.
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
- -------------------
"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.
<PAGE>
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 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
<PAGE>
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
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
<PAGE>
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.
(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
<PAGE>
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 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
<PAGE>
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
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
<PAGE>
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.
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
<PAGE>
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.
<PAGE>
EXHIBIT 99.2
------------
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 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.
<PAGE>
(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.
<PAGE>
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 applicable legal
requirements in effect from time to time, including without limitation any
applicable tax withholding requirements.
<PAGE>
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.
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.
<PAGE>
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. (S) 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.
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.
<PAGE>
EXHIBIT 99.3
------------
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) 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).
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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.
<PAGE>
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, 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.
<PAGE>
EXHIBIT 99.4
------------
THE LEARMONTH & BURCHETT MANAGEMENT SYSTEMS
ESOP SHARE OPTION SCHEME
1. DEFINITIONS AND INTERPRETATION
(1) In this Scheme, unless the context otherwise requires:-
"THE BOARD" means the board of directors of the Company or a committee
appointed by such board of directors;
"THE COMPANY" means Learmonth & Burchett Management Systems Plc
(registered in England and Wales No. 1294569);
"THE GRANT DATE" in relation to an option means the date on which the
option was granted;
"THE LBMS ESOP" means the trust established on 20th November 1984 by deed
by (1) the Company and (2) the Trustee as amended from time to time;
"PARTICIPANT" means a person who holds an option granted under the
Scheme;
"PARTICIPATING COMPANY" means the Company or any Subsidiary;
"THE SCHEME" means the Learmonth & Burchett Management Systems ESOP Share
Option Scheme as herein set out but subject to any alterations or
additions made under Rule 9 below;
"SUBSIDIARY" means a body corporate which is a subsidiary of the Company
within the meaning of section 736 of the Companies Act 1985;
"THE LONDON STOCK EXCHANGE" means The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited;
"THE TRUSTEE" means LBMS Trustee Company Limited or any other person
who is trustee of the LBMS ESOP from time to time.
(2) Any reference in the Scheme to any enactment includes a reference to that
enactment as from time to time modified extended or re-enacted.
2. GRANT OF OPTIONS
(1) Subject to sub-rules (2) and (5) below and to Rule 3 below, the Trustee
may grant to any director or employee of a Participating Company who is
required to devote
<PAGE>
the whole or substantially the whole of his working time to the service
of any Participating Company an option to purchase shares in the Company,
upon the terms set out in the Scheme and upon such other terms as the
Trustee may specify.
(2) An option may only be granted under the Scheme:-
(a) within the period of 6 weeks beginning with the date on which the
Scheme is approved by the Company or the third dealing day next
following the date on which the Company announces its preliminary
annual, half-yearly or quarterly results or at any other time when
the circumstances are considered by the Trustee to be sufficiently
exceptional to justify the grant thereof: and
(b) within a period of 10 years beginning with the date on which the
Scheme is approved as aforesaid.
(3) There shall be no monetary consideration for the grant of any option
under the Scheme, and accordingly any such option shall be granted by
deed.
(4) The price at which shares may be acquired by the exercise of an option
granted under the Scheme shall be determined by the Trustee before the
grant thereof, and for the avoidance of doubt may be below the market
value of such shares on the Grant Date.
(5) No option shall be granted under the Scheme to a person within the two
years immediately preceding the date on which he is bound to retire in
accordance with the terms of his contract of employment.
(6) Subject to Rule 4(3) below, an option granted under the Scheme to any
person shall not be capable of being transferred by him and shall lapse
forthwith if it is so transferred or if he is adjudged bankrupt.
3. LIMITS
No options shall be granted under the Scheme which would, at the time
they are granted, cause the number of shares which may be acquired in
pursuance of options so granted to exceed such number of shares as the
Trustee may hold at that time.
4. EXERCISE OF OPTIONS
(1) The exercise of any option granted under the Scheme shall be effected in
such form and manner as the Trustee may from time to time prescribe.
<PAGE>
(2) Subject to sub-rule (3) below and to Rule 5 below an option granted under
the Scheme may not be exercised before the date(s) specified by the
Trustee when it grants the option.
(3) If any Participant ceases to be a director or employee of a Participating
Company, the option may not be exercised at all unless the Trustee shall
so permit in exceptional circumstances, in which event it may be
exercised, subject to Rule 5 below, to the extent permitted by the
Trustee within the period which the Trustee shall stipulate.
(4) A Participant shall not be treated for the purposes of sub-rule (3) above
as ceasing to be a director or employee of a Participating Company until
such time as he is not longer a director or employee of any of the
Participating Companies, and a female Participant who ceases to be such a
director or employee by reason of pregnancy or confinement and who
exercises her right to return to work under section 45 of the Employment
Protection (Consolidation) Act 1978 before exercising an option under the
Scheme shall be treated for those purposes as not having ceased to be
such a director or employee.
(5) Notwithstanding any other provision of the Scheme, an option granted
under the Scheme may not be exercised:-
(a) in the case of options granted to UK resident staff under which the
exercise price per share is less than the market value of a share on
the Grant Date, more than seven years after the Grant Date, or
(b) in the case of any other options, more than ten years after the
Grant Date.
(6) Within 30 days after an option under the Scheme has been exercised by any
person, the Trustee shall transfer to him (or his nominee) or, as
appropriate, procure the transfer to him (or his nominee) of the number
of shares in respect of which the option has been exercised.
5. TAKEOVER, RECONSTRUCTION AND WINDING-UP
(1) If any person obtains control of the Company (within the meaning of
section 840 of the Income and Corporation Taxes Act 1988) as a result of
making a general offer to acquire shares in the Company, or having
obtained such control makes such an offer, the Trustee shall within 7
days of becoming aware thereof notify every Participant thereof and,
subject to sub-rules (3) and (5) of Rule 4 above, an option granted under
the Scheme may be exercised within one month (or such longer period as
the Trustee may permit) of such notification.
(2) For the purposes of sub-rule (1) above, a person shall be deemed to have
obtained control of the Company if he and others acting in concert with
him have together obtained control of it.
<PAGE>
(3) If an application is made to the Court under section 425(1) of the
Companies Act 1985 to order a meeting in relation to a proposed
compromise or arrangement for the purposes of or in connection with a
scheme for the reconstruction of the Company or its amalgamation with any
other company or companies, the Trustee may permit any option granted
under the Scheme, subject to sub-rules (3) and (5) of Rule 4 above, to be
exercised until the time of the meeting or, if the application is
refused, the time of the refusal.
(4) If any person becomes bound or entitled to acquire shares in the Company
under sections 428 to 430F of the Companies Act 1985, or if under section
425 of that Act the Court sanctions a compromise or arrangement proposed
for the purposes of or in connection with a scheme for the reconstruction
of the Company or its amalgamation with any other company or companies,
or if the Company passes a resolution for voluntary winding up, or if an
order is made for the compulsory winding up of the Company, the Trustee
shall forthwith notify every Participant thereof and any option granted
under the Scheme may, subject to sub-rules (3) and (5) of Rule 4 above,
be exercised within one month of such notification, but to the extent
that it is not exercised within that period shall (notwithstanding any
other provision of the Scheme) lapse on the expiration thereof.
6. VARIATION OF CAPITAL
(1) Subject to sub-rule (3) below, in the event of any increase or variation
of the share capital of the Company (whenever effected) by way of
capitalisation or rights issue, or sub-division, consolidation or
reduction, the Trustee may make such adjustments as it considers
appropriate under sub-rule (2) below.
(2) An adjustment made under this sub-rule shall be to one or more of the
following:-
(a) the number of shares in respect of which any option granted under
the Scheme may be exercised;
(b) the price at which shares may be acquired by the exercise of any
such option;
(c) where any such option has been exercised but no shares have been
transferred pursuant to such exercise, the number of shares which
may be so transferred and the price at which they may be purchased.
(3) Except in the case of a capitalisation issue, no adjustment under sub-
rule (2) above shall be made without the prior confirmation in writing by
the auditors for the time being of the Company that it is in their
opinion fair and reasonable.
(4) As soon as reasonably practicable after making any adjustment under sub-
rule (2) above, the Trustee shall give notice in writing thereof to any
Participant affected thereby.
<PAGE>
7. ALTERATIONS
(1) Subject to sub-rule (2) below, the Board with the consent of the Trustee
may at any time alter or add to all or any of the provisions of the
Scheme, or the terms of any option granted under it, in any respect.
(2) No alteration or addition to the disadvantage of any Participant shall be
made under sub-rule (1) above unless:-
(a) the Board shall have invited every such Participant to give an
indication as to whether or not he approves the alteration or
addition, and
(b) the alteration or addition is approved by a majority of those
Participants who have given such an indication.
(3) As soon as reasonably practicable after making any alteration or addition
under sub-rule (1) above, the Board shall give notice in writing thereof
to any Participant affected thereby.
8. MISCELLANEOUS
(1) The rights and obligations of any individual under the terms of his
office or employment with any Participating Company shall not be affected
by his participation in the Scheme or any right which he may have to
participate therein, and an individual who participates therein shall
waive any and all rights to compensation or damages in consequence of the
termination of his office or employment for any reason whatsoever insofar
as those rights arise or may arise from his ceasing to have rights under
or be entitled to exercise any option under the Scheme as a result of
such termination.
(2) In the event of any dispute or disagreement as to the interpretation of
the Scheme, or as to any question or right arising from or related to the
Scheme, the decision of the Board shall be final and binding upon all
persons.
(3) Where an option is granted under the Scheme to a person who is not
chargeable to tax under Case I of Schedule E in respect of the office or
employment by virtue of which it is granted to him, the provisions of the
Scheme shall apply thereto subject to such alterations or additions as
the Board with the consent of the Trustee shall before the grant thereof
have determined having regard to any securities, exchange control or
taxation laws or regulation or similar factors which may have application
to him or to any Participating Company in relation to the option.
<PAGE>
(4) In any matter in which they are required to act under the Scheme, the
auditors of the Company shall be deemed to be acting as experts and not
as arbitrators and the Arbitration Acts 1950 to 1979 shall not apply
hereto.
(5) Any notice or other communication under or in connection with the Scheme
may be given by personal delivery or by sending the same by post, in the
case of a company to its registered office, and in the case of an
individual to his last known address, or, where he is a director or
employee of a Participating Company, either to his last known address or
to the address of the place of business at which he performs the whole or
substantially the whole of the duties of his office or employment, and
where a notice or other communication is given by first class post, it
shall be deemed to have been received 48 hours after it was put into the
post properly addressed and stamped.
<PAGE>
EXHIBIT 99.5
------------
THE LEARMONTH & BURCHETT MANAGEMENT SYSTEMS PLC
EXECUTIVE SHARE OPTION SCHEME
<PAGE>
RULES OF THE LEARMONTH & BURCHETT MANAGEMENT SYSTEMS PLC
EXECUTIVE SHARE OPTION SCHEME
THE LEARMONTH & BURCHETT MANAGEMENT SYSTEMS
-------------------------------------------
EXECUTIVE SHARE OPTION SCHEME
-----------------------------
(incorporating amendments
made on 12th April 1995,
25th April 1995 and 1st May 1995)
<PAGE>
INDEX
Page
Clause 1 Definitions and Interpretation
Part A
------
Clause 2 Grant of Type A Options
Clause 3 Limits
Clause 4 Exercise of Type A Options
Clause 5 Takeover, Reconstruction and Winding-up
Clause 6 Variation of Capital
Clause 7 Alterations
Clause 8 Miscellaneous
Part B
------
Clause 9 Grant of Type B Options
Clause 10 Limits
Clause 11 Exercise of Type B Options
Clause 12 Takeover, Reconstruction and Winding-up
Clause 13 Variation of Capital
Clause 14 Alterations
Clause 15 Miscellaneous
<PAGE>
THE LEARMONTH & BURCHETT MANAGEMENT SYSTEMS
EXECUTIVE SHARE OPTION SCHEME
-----------------------------
(as amended)
1. Definitions and Interpretations
(1) In this Scheme, unless the context otherwise requires:
(a) "Approved Scheme" means the Scheme (other than Part B) and any other
share option scheme of the Company (or any associated company of the
Company) approved by the Board of the Inland Revenue under Schedule 9;
(b) "the Board" means the board of directors of the Company or a committee
appointed by such board of directors;
(c) "the Company" means Learmonth & Burchett Management Systems Plc
(registered in England No. 1294569);
(d) "Date of Listing" means the date on which permission was first granted
for the Shares to be traded on the Unlisted Securities Market, being
24th June 1987;
(e) "Executive" means a full-time director or qualifying employee of a
Participating Company;
(f) "the Grant Date" in relation to an Option means the date on which the
option was or is treated as having been granted;
(g) "Option" means a right to acquire Shares under the Scheme;
(h) "Participant" means a person who has subsisting rights under an Option
or the personal representatives of a person who had such subsisting
rights immediately prior to his death;
(i) "Participating Company" means the Company and any Subsidiary to which
the Board has resolved that the Scheme shall for the time being extend;
(j) "Relevant Securities Market" means the Unlisted Securities Market and/or
such other stock exchange or securities market on which the ordinary
shares of the Company are then listed, quoted or dealt in;
(k) "Schedule 9" means Schedule 9 to the Income and Corporation Taxes Act
1988;
(l) "the Scheme" means the Learmonth & Burchett Management Systems Executive
Share Option Scheme as herein set out but subject to any alterations or
additions made under Clauses 7 and 14 below;
<PAGE>
2.
(m) "Share" means an ordinary share in the capital of the Company which
satisfies the conditions set out in paragraphs 10 to 14 inclusive of
Schedule 9;
(n) "Subsidiary" means a body corporate which is a subsidiary of the
Company within the meaning of section 736 of the Companies Act 1985
and is under the control of the Company within the meaning of section
840 of the Income and Corporation Taxes Act 1988;
(o) "Super-Option" means an option to subscribe for Shares which may not,
except in limited circumstances, be exercised within five years of the
Grant Date and which is except in limited circumstances subject to
exercise conditions requiring either top quartile financial
performance by the Company or performance which the Board considers is
equivalent thereto;
(p) "Type A Option" means an Option which is designated as such and is
granted subject to the provisions of Part A of the Scheme;
(q) "Type B Option" means an Option which is designated as such and is
granted subject to the provisions of Part B of the Scheme;
and expressions not otherwise defined herein have the same meanings as they
have in Schedule 9.
(2) For the purposes of sub-clause (1)(e) above:-
(a) a person shall be treated as a full-time director of a company if he
is obliged to devote the whole or substantially the whole of his
working time, and in any event not less than 25 hours a week to the
performance of the duties of his office or employment with the company
(or with the company and any other company which is a Participating
Company);
(b) a qualifying employee, in relation to a company, is an employee of the
company (other than one who is a director of a Participating Company)
who is required, under the terms of his employment, to work for the
company (or for the company and any other company which is a
Participating Company) for the whole or substantially the whole of his
working time and in any event for at least 20 hours a week.
(3) Any reference in the Scheme to any enactment includes a reference to that
enactment as from time to time modified extended or re-enacted.
(4) Any reference in the Scheme to the masculine includes a reference to the
feminine.
<PAGE>
3.
PART A
------
(As approved by the Inland Revenue under Schedule 9)
<PAGE>
4.
2. Grant of Type A Options
(1) Subject to sub-clauses (2), (6) and (7) below and to Clause 3 below, the
Board may at any time prior to the tenth anniversary of the Date of Listing
grant Type A Options to any Executive.
(2) Type A Options may only be granted under the Scheme:
(a) within the period of 6 weeks beginning with the dealing day next
following the date on which the Company announces its annual, half
yearly or quarterly results; or
(b) within the period of 3 weeks immediately following the extraordinary
general meeting of the shareholders of the Company held on 12th April
1995.
(3) There shall be no monetary consideration for the grant of any Type A
Option, and accordingly any such Option shall be granted by way of a
certificate executed by the Company as a deed.
(4) Each such certificate shall:-
(a) specify the number of Shares which are subject to the Option;
(b) specify the price at which any Share may be acquired by the exercise
of the Option which shall be determined by the Board but shall be not
less than the higher of:
(i) the market value (within the meaning of Part VIII of the Taxation
of Chargeable Gains Act 1992) of a Share as agreed in advance for
the purposes of the Scheme with the Shares Valuation Division of
the Inland Revenue, on the Grant Date; and
(ii) the nominal value of a Share;
(c) specify the Grant Date;
(d) specify that it is a Type A Option;
(e) specify whether the Option is granted as a Super-Option;
(f) specify the Option exercise conditions applicable to the Option;
(g) refer the Executive to all the provisions of the Scheme; and
(h) subject as aforesaid, be given in such form and manner as the Board
may from time to time prescribe.
<PAGE>
5.
(5) No conditions imposed on the grant of any Type A Option pursuant to
sub-clause (4) above may subsequently be waived or varied unless the
Board, in its reasonable opinion, considers that such conditions are no
longer a fair measure of the performance of the Participant and then in
a manner of which, in the reasonable opinion of the Board:
(a) would cause such conditions to be a fairer measure of the
performance of the Participant; and
(b) would not cause such conditions to be more difficult to satisfy
than the original conditions were when the same were first set.
(6) No Type A Option shall be granted if such grant would contravene the
rules of any Relevant Securities Market or the provisions of any
applicable regulation or enactment.
(7) No Type A Option shall be granted to an Executive:
(a) who is not eligible to participate in the Scheme by virtue of
paragraph 8 of Schedule 9; or
(b) who is within the 2 years (or, in the case of Super-Options, the
4 years) immediately preceding the date on which he is bound to
retire in accordance with the terms of his contract of
employment.
(8) Subject to Clause 4(4) below, a Type A Option granted under the Scheme
to any person shall not be capable of being transferred by him and shall
lapse forthwith if it is so transferred or if he is adjudicated
bankrupt.
(9) Any Executive to whom a Type A Option is granted may be notice in
writing to the Secretary of the Company within 14 days of the Grant Date
disclaim in whole or in part his rights thereunder, and in such case the
Option shall pro tanto be deemed never to have been granted hereunder.
No consideration shall be payable for any such disclaimer.
3. Limits
(1) The number of Shares over which Type A Options may be granted under the
Scheme (other than Super-Options) on any day shall not, when added to
the aggregate of:-
(a) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of Options
granted under the Scheme (other than Super-Options) in the
period of 10 years immediately preceding that day; and
<PAGE>
6.
(b) the number of Shares which immediately prior to that day shall
been or remained to be issued on the exercise of options (other
than Super-Options) granted in that period under any other
executive share option scheme adopted by the Company;
exceed such number as represents 5 per cent of the ordinary share
capital of the Company in issue immediately prior to that day.
(2) The number of Shares over which Type A Options may be granted under the
Scheme on any day shall not, when added to the aggregate of:-
(a) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of Options
granted under the Scheme (including Type B Options) in the
period of 10 years immediately preceding that day, and
(b) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of options
granted in that period, or shall have been issued in that period
otherwise than on the exercise of options, under any other
employees' share scheme adopted by the Company;
exceed such number as represents 10 per cent of the ordinary share
capital of the Company in issue immediately prior to that day.
(3) The aggregate number of Shares over which Options may be granted under
the Scheme from and including 12th April 1995 shall not exceed 5,000,000
(subject to any adjustments pursuant to clause 6(2)(e)).
(4) No Type A Option shall be granted under the Scheme to any person on any
day if such grant would have the result that the aggregate market value
of Shares the subject of all Options granted to that person under the
Scheme, when added to the aggregate market value of Shares the subject
of any other options granted to that person under any other share option
scheme (other than an SAYE scheme) of the Company, in each case within
the 10 years preceding that date, and including (for the avoidance of
doubt) any Shares the subject of options which have lapsed (for whatever
reason), but excluding any shares the subject to options which:
(i) have been exercised; or
(ii) are or were Super-Options,
would exceed an amount equal to four times his relevant annual
emoluments as at that day.
<PAGE>
7.
(5) No Type A Option shall be granted as a Super-Option under the Scheme to
any person if such grant would have the result that the aggregate market
value of Shares the subject of all Options granted to that person under
the Scheme case when added to the market value of any Shares put under
option under any other share option scheme (other than an SAYE scheme)
of the Company, in each within the ten years preceding that day, and
including (for the avoidance of doubt) any Shares the subject of options
which have lapsed (for whatever reason), would exceed an amount equal to
eight times his relevant annual emoluments as at that day.
(6) For the purposes of sub-clauses (1), (2), (4) and (5) above, no account
shall be taken of any Shares issued or remaining issuable pursuant to
options which were granted under any share option scheme of the Company
prior to the Date of Listing or of any options to be satisfied by the
transfer of existing Shares.
(7) Notwithstanding sub-clauses (4) and (5) above, no person shall be
granted Type A Options under the Scheme which would, at the time they
are granted, cause the aggregate market value of the Shares which he may
acquire in pursuance of options granted under the Scheme (other than
Type B Options) or under any other Approval Scheme (and not exercised)
to exceed or further exceed the highest of:-
(a) (Pounds)100,000;
(b) subject to sub-clause (9) below, four times the amount of the
relevant emoluments for the current or preceding year of
assessment (whichever of those years gives the greater amount);
and
(c) the maximum amount for the time being permitted under Schedule
9.
(8) For the purpose of sub-clauses (4) to (7) above:-
(a) relevant emoluments are such of the emoluments of the office or
employment by virtue of which the person in question is eligible
to participate in the Scheme and of any other office or
employment held by him with the Company and any other
Participating Company as are liable to be paid under deduction
of tax pursuant to section 203 of the Taxes Act (pay-as-you-
earn), after deducting from them amounts included by virtue of
Chapter II of Part V of the Taxes Act 1998;
(b) relevant annual emoluments of any person as at any day are the
higher of such relevant emoluments as would be payable to him in
respect of a full year's service (calculated at the rate at
which relevant emoluments are then payable to him) and the
relevant emoluments paid to him in the period of 12 months
immediately preceding that day; and
<PAGE>
8.
(c) the market value of Shares shall be calculated as at the time
when the option relating to those Shares was granted or, in a
case where an agreement relating to them has been made under
paragraph 29 of Schedule 9, such earlier time or time as may be
provided in the agreement.
(9) In the event that an Executive does not at any time have any relevant
emoluments for the preceding year of assessment, sub-clause (7) above
shall apply at that time with the following paragraph substituted for
paragraph(b):-
"(b) four time the amount of the relevant emoluments for the period
of twelve months beginning with the first day during the current
year of assessment in respect of which there are relevant
emoluments."
4. Exercise of Type A Options
(1) The exercise of any Type A Option shall be effected by a notice which
shall:-
(a) specify the number of Shares in respect of which the Option is
exercised in accordance with sub-clause (2) below, and
(b) be accompanied by payment to the Company of an amount equal to
the price at which the number of Shares so specified may be
acquired by the exercise of the Option, and
(c) unless the Board otherwise permits, be accompanied by the
certificate issued in respect of the Option, and
(d) subject as aforesaid, be given in such form and manner as the
Board may from time to time prescribe.
(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 third anniversary
of the Grant Date (in the case of a Type A Option granted other than as
a Super-Option) and the fifth anniversary of the Grant Date (in the case
of a type A Option granted as a Super-Option).
(3) Subject to sub-clause (2) and Clause 5 below, a notice exercising a Type
A Option may not be given unless the objective exercise conditions
relating to the Option have been satisfied.
(4) (a) If any Participant ceases to be an Executive by reason of:
(i) injury:
<PAGE>
9.
(ii) disability;
(iii) redundancy (within the meaning of the Employment
Protection (Consolidation) Act 1978); or
(iv) retirement;
the Participant shall, subject always to sub-clause (3),
be entitled to exercise a percentage of each Type A
Option then held by him calculated as follows:
(i) where the cessation occurs within 2 years of the
Grant Date, nil;
(ii) where the cessation occurs thereafter, 40 per
cent, plus an additional 5 per cent for each
3 months which has elapsed between the second
anniversary of the Grant Date and the date of
such cessation.
provided that any notice exercising a Type A Option in
such circumstances must (if at all) be given within 6
months of his ceasing to be an Executive, of it later,
42 months after the Grant Date (in the case of a Type A
Option granted other than as a Super-Option) and 66
months after the Grant Date (in the case of a Type A
Option granted as a Super-Option and all other Type A
Options then held by him shall lapse.
(4) (b) If any Participant ceases to be an Executive for any reason
other than one of those set out in sub-clause 4(a) above, all
Type A Options then held by him shall lapse, except insofar as
the Board (in its absolute discretion) shall approve otherwise.
If the Board does give such approval, then subject always to
sub-clause (3), the Participant shall be entitled to exercise
such of his Type A Options as the Board shall have approved,
provided that any notice exercising a Type A Option in such
circumstances must (if at all) be given within 6 months of his
ceasing to be an Executive, or it later, 42 months after the
Grant Date (in the case of a Type A Option granted other than as
a Super-Option) and 66 months after the Grant Date (in the case
of a Type A Option granted as a Super-Option).
(5) A Participant shall not be treated for the purposes of sub-clause (4)
above as ceasing to be an Executive until he ceases to be a full-time
director or qualifying employee of the Company or any Subsidiary, and a
Participant (being a woman) who ceases to be an Executive by reason of
pregnancy or confinement and who exercises her right to return to work
under section 45 of the Employment Protection (Consolidation) Act 1978
(or any similar right under the law governing her
<PAGE>
10.
employment contract) before exercising an Option under the Scheme shall
be treated for those purposes as not having ceased to be an Executive.
(6) Notwithstanding any other provision of the Scheme, a notice exercising a
Type A Option granted under the Scheme may not be given later than 10
years after the Grant Date.
(7) A Participant shall not be eligible to give a notice exercising a Type A
Option under the Scheme at any time:-
(a) unless, subject to sub-clause (4) above, he is at that time an
Executive, and
(b) if he is not at that time eligible to participate in the Scheme
by virtue of paragraph 8 of Schedule 9.
(8) Subject to sub-clause (10) below, within 30 days after a notice
exercising a Type A Option under the Scheme has been received by the
Company the Board on behalf of the Company shall allot to the
Participant or procure the transfer to him of the number of Shares
specified in the notice.
(9) As soon as reasonably practicable after allotting any Shares under the
Scheme, the Board on behalf of the Company shall:-
(a) issue to the participant a definitive share certificate in
respect of the Shares so allotted,
(b) apply for such Shares to be admitted to listing, quotation or
dealing (as the case may be) on any Relevant Securities Market,
and
(c) if the Option remains partially unexercised, either amend the
certificate issued to the Participant pursuant to Clause 2(4)
above so as to indicate the number of Shares in respect of which
the Option may still be exercised, or issue to him a new
certificate which shall contain all the information which would
have been contained in such an amended certificate.
(10) All Shares allotted or transferred pursuant to the exercise of a Type A
Option shall:-
(a) rank pari passu in all respects with the Shares for the time
being in issue (save, in the case of allotted shares, as regards
any rights attaching to such Shares by reference to a record
date prior to the date of such exercise), and
(b) satisfy the requirements of paragraphs 10 to 14 of Schedule 9.
<PAGE>
11.
5. Takeover, Reconstruction and Winding-up
(1) If any person obtains control of the Company (within the meaning of
Section 840 of the Income and Corporation Taxes Act 1988) as a result of
making an offer to acquire Shares, the Board shall within 7 days of
becoming aware thereof notify every Participant thereof and, subject to
sub-clauses (4) and (6) of Clause 4 above, a notice exercising an option
granted under the Scheme may be given within one month (or such longer
period as the Board may permit) of such notification.
(2) For the purposes of sub-clause (1) above, a person shall be deemed to
have obtained control of the Company if he and others acting in concert
with him have together obtained control of it.
(3) If any person becomes bound or entitled to acquire Shares under sections
428 to 430F of the Companies Act of 1985, or if under section 425 of
that Act the court sanctions a compromise or arrangement proposed for
the purposes of or in connection with a scheme for the reconstruction of
the Company or its amalgamation with any other company or companies, or
if the Company passes a resolution for voluntary winding up or if an
order is made for the compulsory winding up of the Company, the Board
shall forthwith notify every Participant thereof and, in relation to any
Type A Option granted under the Scheme:-
(a) subject to sub-clauses (4) and (6) of Clause 4 above, a notice
exercising the Option may be given within one month of such
notification, but
(b) if no such notice is given within that period, the Option shall
(notwithstanding any other provision of the Scheme) lapse on the
expiration thereof.
(4) If any company ("the acquiring company"):-
(a) obtains control of the Company as a result of making -
(i) a general offer to acquire the whole of the issued
ordinary share capital of the Company which is made on a
condition such that if it is satisfied the person making
the offer will have control of the Company, or
(ii) a general offer to acquire all the shares in the Company
which are of the same class as the shares which may be
acquired by the exercise of Type A Options granted under
the Scheme, or
(b) 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
<PAGE>
12.
(c) becomes bound or entitled to acquire shares in the Company under
Sections 428 to 430F of that Act,
any Participant may at any time within the appropriate period (which
expression shall be construed in accordance with paragraph 15 of
Schedule 9), by agreement with the acquiring company, release any Type A
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 to the old option but relates to shares in a
different company falling within paragraph (b) or (c) of paragraph 10 of
Schedule 9.
(5) The new option shall not be regarded for the purposes of sub-clause (4)
above as equivalent to the old option unless the conditions set out in
paragraph 15(3) of Schedule 9 are satisfied, but so that the provisions
of this Scheme shall for this purpose be construed as if:-
(a) the new option were an option granted under the Scheme at the
same time as the old option;
(b) the references to "the Company", "the Board" and "Shares" in
Clauses 4(1), 4(8), 4(9), 4(11), 5, 6 and 8(1) were references
to the different company mentioned in sub-clause (4) above, the
Board of the different company, and an ordinary share in the
capital of the different company respectively.
(6) In the event that any acquiring company obtains control of the Company,
or become bound or entitled to acquire shares in the Company, in
circumstances falling within sub-clauses 5(4)(a) to (c) above:
(a) sub-clause 4(2) as set out herein shall cease to apply to any
Type A Option then held by a Participant and shall be replaced
as follows:
"Without prejudice to Clause 5 but subject always to
sub-clauses 4(4) and 4(7), a Type A Option may be
exercised in part as follows:
(i) as to 40 per cent, at any time after the second
anniversary of the Grant Date; and
(ii) as to a further 5 per cent, at the end of each
quarter following the second anniversary of the
Grant Date to the intent that the Type A Option
shall be exerciseable in full on the fifth
anniversary of the Grant Date"
<PAGE>
13.
or at such other time and/or in such other proportions
as the Board (acting fairly and reasonably) may
determine; and
(b) sub-clause 4(3) shall cease to apply.
6. Variation of Capital
(1) In the event of any increase or variation of the share capital of the
Company (whenever effected) by way of capitalisation or rights issue, or
sub-division, consolidation or reduction, the Board may make such
adjustments as it considers appropriate under sub-clause (2) below.
(2) An adjustment made under this sub-clause shall be to one or more of the
following:-
(a) the number of Shares in respect of which any Type A Option
granted under the Scheme may be exercised;
(b) the price at which Shares may be acquired by the exercise of any
such Option:
(c) subject to sub-clause (5) below, any other term of any such
Option:;
(d) where any such Option has been exercised but no Shares have
been allotted or transferred pursuant to such exercise, the
number of Shares which may be so allotted or transferred and the
price at which they may be acquired; or
(e) the maximum aggregate number of Shares over which Options may be
granted pursuant to Clause 3(3).
(3) Except in the case of a capitalisation issue, no adjustment under
sub-clause (2) above shall be made without the prior confirmation in
writing by the auditors for the time being of the Company that it is in
their opinion fair and reasonable.
(4) An adjustment under sub-clause (2) above may have the effect of reducing
the price at which each Share may be acquired by the exercise of a Type
A Option to less than the nominal value of such Share, but only if and
to the extent that the Board shall be authorised by the members of the
Company to capitalise from the reserves of the Company a sum equal to
the amount by which the nominal 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 of 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 the Option in respect of
<PAGE>
14.
which such a reduction shall have been made the Board shall capitalise
such sum (if any) and apply the same in paying up such amount as
aforesaid.
(5) No adjustment shall be made under paragraph (c) of sub-clause (2) above
without the prior approval of the Inland Revenue.
(6) As soon as reasonably practicable after making any adjustment under sub-
clause (2) above, the Board shall give notice in writing thereof to any
Participant affected thereby.
7. ALTERATIONS
(1) Subject to sub-clauses (2) and (4) below, the Board may at any time
alter or add to all or any of the provisions of the Scheme (other than
Part B), or the terms of any Type A Options granted under it, in any
respect (having regard to the fact that, if such an alteration or
addition is made at a time when the Scheme is approved by the Inland
Revenue under Schedule 9, the approval will not thereafter have effect
unless the Inland Revenue have approved the alteration or addition).
(2) No alteration or addition shall be made under sub-clause (1) above to
the provisions of Clauses 1, 2(1), 2(2), 2(3), 2(4)(b), 2(5), 3, 4(2),
4(3), 4(4), 4(5), 4(6), 4(10), 5, 6(1), 6(2), 6(3) and 6(5) above, or
of this Clause, without the prior approval by ordinary resolution of the
members of the Company in general meeting.
(3) Sub-clause (2) above shall not apply to any alteration or addition
which:-
(a) is necessary or desirable in order to obtain or maintain Inland
Revenue approval of the Scheme under Schedule 9 or any other
enactment, or to comply with or take account of the provisions
of any proposed or existing legislation, or to take account of
the occurrence of any of the events mentioned in Clause 5 above,
or to obtain or maintain favourable taxation treatment of any
Participating Company or any Participant under the laws of any
relevant jurisdiction, and
(b) does not affect the basic principles of the Scheme.
(4) No alteration or addition to any of the provisions of the Scheme may
materially affect any Option granted prior to the date on which such
amendment takes effect.
<PAGE>
15.
8. MISCELLANEOUS
(1) The Company shall at all times keep available such number of authorised
but unissued Shares as the Board may consider sufficient for the
purposes of the Scheme.
(2) The rights and obligations of any individual under the terms of his
office or employment with the Company or a Subsidiary shall not be
affected by his participation in the Scheme or any right which he may
have to participate therein and an individual who participates therein
shall waive any and all rights to compensation or damages in consequence
of the termination of his office or employment for any reason whatsoever
insofar as those rights arise or may arise from his ceasing to have
rights under or be entitled to exercise any option under the Scheme as a
result of such termination.
(3) The Board may from time to time vary such rules and regulations not
inconsistent herewith and establish such procedures and trusts and trust
companies for administration and implementation of the Scheme as it
thinks fit, and in the event of any dispute or disagreement as to the
interpretation of the Scheme, or of any such rule, regulation or
procedure, or as to any question or right arising from or related to the
Scheme, the decision of the Board shall be final and binding upon all
persons.
(4) In any matter in which they ar required to act under the Scheme, the
auditors of the Company shall be deemed to be acting as experts and not
as arbitrators and the Arbitration Acts 1950 to 1979 shall not apply
hereto.
(5) It is hereby certified that the grant of any option under the Scheme
shall not constitute a transaction forming part of a larger transaction
or series of transactions in respect of which the amount or value, or
aggregate amount or value, of the consideration exceeds (Pounds)30,000.
(6) Any notice or other communication under or in connection with the Scheme
may be given by personal delivery or by sending the same by post, in the
case of a company to its registered office, and in the case of an
individual to his last known address, or, where he is a director or
employee of the Company or a Subsidiary, either to his last known
address or to the address of the place of business at which he performs
the whole or substantially the whole of the duties of his office or
employment, and where a notice or other communication is given by first-
class post, it shall be deemed to have been received 48 hours after it
was put into the post properly addressed and stamped.
<PAGE>
16.
PART B
(No Inland Revenue Approval under Schedule 9)
<PAGE>
17.
9. GRANT OF TYPE B OPTIONS
(1) Subject to sub-clauses (2), (6) and (7) below and to Clause 10 below,
the Board may at any time prior to the tenth anniversary of the Date of
Listing grant Type B Options to any Executive.
(2) Type B Options may only be granted under the Scheme:
(a) within the period of 6 weeks beginning with the dealing day next
following the date on which the Company announces its annual,
half yearly or quarterly results; or
(b) within the period of 3 weeks immediately following the date of
the extraordinary general meeting of the shareholders of the
Company held on the 12th April 1995.
(3) There shall be no monetary consideration for the grant of any Type B
Option under the Scheme, and accordingly any such Option shall be
granted by way of a certificate executed by the Company as a deed.
(4) Each such certificate shall:-
(a) specify the number of Shares which are subject to the Option;
(b) specify the price at which any share may be acquired by the
exercise of the Option which shall be determined by the Board
but shall be not less than the higher of:
(i) the market value (within the meaning of Part VIII of the
Taxation of Chargeable Gains Act 1992) of a Share, on
the Grant Date; and
(ii) the nominal value of a Share;
(c) specify the Grant Date;
(d) specify that it is a Type B Option;
(e) specify whether the Option is granted as a Super-Option;
(f) specify the objective exercise conditions applicable to the
Option;
(g) refer the Executive to all the provisions of the Scheme; and
(h) subject as aforesaid, be given in such form and manner as the
Board may from time to time prescribe.
<PAGE>
18.
(5) No conditions imposed on the grant of any Type B Option pursuant to sub-
clause (4) above may subsequently be varied or waived unless the Board,
in its reasonable opinion, considers that such conditions are no longer
a fair measure of the performance of the Participant and only then in a
manner which, in the reasonable opinion of the Board:
(a) would cause such conditions to be a fairer measure of the
performance of the Participant; and
(b) would not cause such conditions to be more difficult to satisfy
than the original conditions were when the same were first met.
(6) No Type B Option shall be granted if such grant would contravene the
rules of any Relevant Securities market or the provisions of any
applicable regulation or enactment.
(7) No Type B Option shall be granted to an Executive who is within the 2
years (or, in the case of Super-Options, the 4 years) immediately
preceding the date on which he is bound to retire in accordance with the
terms of his contract of employment.
(8) Subject to Clause 11(4) below, a Type B Option granted under the Scheme
to any person shall not be capable of being transferred by him and shall
lapse forthwith if it is so transferred or if he is adjudicated
bankrupt.
(9) Any Executive to whom a Type B Option is granted may by notice in
writing to the Secretary of the Company within 14 days of the Grant Date
disclaim in whole or in part his rights thereunder, and in such case
the Option shall pro tanto be deemed never to have been granted
hereunder. No consideration shall be payable for any such disclaimer.
10. LIMITS
(1) The number of Shares over which Type B Options may be granted under the
Scheme (other than Super-Options) on any day shall not, when added to
the aggregate of:-
(a) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of Options
granted under the Scheme (other than Super-Options) in the
period of 10 years immediately preceding that day; and
(b) the number of shares which immediately prior to that day shall
have been or remained to be issued on the exercise of options
(other than Super-Options) granted in that period under any
other executive share option scheme adopted by the Company;
<PAGE>
19.
exceed such number as represents 5 per cent of the ordinary share
capital of the Company in issue immediately prior to that day.
(2) The number of Shares over which Type B Options may be granted under the
Scheme on any day shall not, when added to the aggregate of:-
(a) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of Options
granted under the Scheme (including Type A Options) in the
period of 10 years immediately preceding that day, and
(b) the number of Shares which immediately prior to that day shall
have been or remained to be issued on the exercise of options
granted in that period, or shall have been issued in that period
otherwise than on the exercise of options, under any other
employees' share scheme adopted by the Company;
exceed such number as represents 10 per cent of the ordinary share
capital of the Company in issue immediately prior to that day.
(3) The aggregate number of Shares over which Options may be granted under
the Scheme from and including 12th April 1995 shall not exceed 5,000,000
(subject to any adjustments pursuant to clause 13(2)(e)).
(4) No Type B Option shall be granted under the Scheme to any person on any
day if such grant would have the result that the aggregate market value
of Shares the subject of all Options granted to that person under the
Scheme, when added to the aggregate market value of Shares the subject
of any other options granted to that person under any other share option
scheme (other than an SAYE scheme) of the Company, in each case within
the 10 years preceding that date, and including (for the avoidance of
doubt) any Shares the subject of options which have lapsed (for whatever
reason), but excluding any Shares the subject of options which:
(i) have been exercised; or
(ii) are or were Super-Options,
would exceed an amount equal to four times his relevant annual
emoluments as at that day.
(5) No Type B Option shall be granted as a Super-Option under the Scheme to
any person if such grant would have the result that the aggregate market
value of Shares the subject of all Options granted to that person under
the Scheme when aggregated with the market value of any Shares put under
option under any other
<PAGE>
20.
share option scheme (other than an SAYE scheme) of the Company, in each
case within the ten years preceding that day and including (for the
avoidance of doubt) any Shares the subject of options which have lapsed
(for whatever reason), would exceed an amount equal to eight times his
relevant annual emoluments as at that day.
(6) For the purposes of sub-clauses (1), (2), (4) and (5) above, no account
shall be taken of any Shares issued or remaining issuable pursuant to
options which were granted under any share option scheme of the Company
prior to the Date of Listing or of any options to be satisfied by the
transfer of existing Shares.
(7) For the purpose of sub-clauses (4) and (5) above:-
(a) relevant annual emoluments of any person as at any day are the
higher of such relevant emoluments (as defined in sub-paragraph
(b) below) as would be payable to him in respect of a full
year's service (calculated at the rate at which relevant
emoluments are then payable to him) and the relevant emoluments
paid to him in the period of 12 months immediately preceding
that day;
(b) relevant emoluments are such of the emoluments of the office or
employment by virtue of which the person in question is eligible
to participate in the Scheme and of any other office or
employment held by him with the Company and any other
Participating Company as are liable to be paid under deduction
of tax pursuant to section 203 of the Taxes Act (pay-as-you-
earn), after deducting from them amounts included by virtue of
Chapter II of Part V of the Taxes Act 1988;
(c) the market value of shares shall be calculated as at the time
when the option relating to those Shares was granted or, in a
case where an agreement relating to them has been made under
paragraph 29 of Schedule 9, such earlier time or times as may be
provided in the agreement.
(8) In the event that an Executive is not chargeable to tax under Case I of
Schedule E, sub-clause (7) shall apply with the following paragraph
substituted for paragraph (a):
"(a) relevant annual emoluments are such of the emoluments of
the office or employment by virtue of which the person
in question is eligible to participate in the Scheme and
of any other office or employment held by him with the
Company and any other Participating Company, excluding
the value of any benefits and after deducting any
pension contributions made by that person, and
calculated in respect of a full year's service and by
reference to the rate then payable to him; and"
<PAGE>
21.
(9) No Type B Option shall be granted under the Scheme to any person who is
a resident of the United States of America ("US") if, following such
grant, the aggregate exercise price of all outstanding options held by
Participants who are residents of the US, plus the aggregate purchase
price of Shares issued in the 12 months preceding such grant upon
exercise of options held by Participants who are U.S. residents, exceeds
the limits set forth in paragraph (b)(5) of rule 701 under the U.S.
Securities Act of 1933, as amended (the "Act"). In determining the
foregoing calculation, options granted and Shares issued to U.S.
residents for which the Board has determined that there is available an
exemption from registration under the Act other than Rule 701, shall not
be counted.
11. EXERCISE OF TYPE B OPTIONS
(1) The exercise of any Type B Option shall be effected by a notice which
shall:-
(a) specify the number of Shares in respect of which the Option is
exercised in accordance with sub-clause (2) below, and
(b) be accompanied by payment to the Company of an amount equal to
the price at which the number of Shares so specified may be
acquired by the exercise of the Option, and
(c) unless the Board otherwise permits, be accompanied by the
certificate issued in respect of the Option, and
(d) subject as aforesaid, be given in such form and manner as the
Board may from time to time prescribe.
(2) Subject to sub-clauses (4) and (7) below and to Clause 12 below, a
notice exercising a Type A Option may not be given before the third
anniversary of the Grant Date (in the case of a Type B Option granted
other than as a Super-Option) and the fifth anniversary of the Grant
Date (in the case of a Type B Option granted as a Super-Option)
(3) Subject to sub-clause (2) and Clause 12 below, a notice exercising a
Type B Option may not be given unless the objective exercise conditions
relating to that Option have been satisfied.
(4) If any Participant ceases to be an Executive, all Type B Options then
held by him shall lapse, except insofar as the Board (in its absolute
discretion) shall approve otherwise. If the Board does give such
approval, then subject always to sub-clause (3), the Participant shall
be entitled to exercise such of his Type B Options as the Board shall
have approved, provided that:
<PAGE>
22.
(a) any notice exercising a Type B Option in such circumstances must
(if at all) be given within 6 months of his ceasing to be an
Executive, or if later, 42 months after the Grant Date (in the
case of a Type B Option granted other than as a Super-Option)
and 66 months after the Grant Date (in the case of a Type B
Option granted as a Super-Option); and
(b) any such exercise shall be subject to such other conditions (if
any) as may be imposed by the Board
(5) A Participant shall not be treated for the purposes of sub-clause (4)
above as ceasing to be an Executive until he ceases to be a full-time
director or qualifying employee of the Company or any Subsidiary, and a
Participant (being a woman) who ceases to be an Executive by reason of
pregnancy or confinement and who:
(a) exercises her right to return to work under section 45 of the
Employment Protection (Consolidation) Act 1978 (or any similar
right under the law governing her employment contract); or
(b) otherwise returns to work in circumstances approved for this
purpose by the Board;
before exercising an Option under the Scheme shall be treated for those
purposes as not having ceased to be an Executive.
(6) Notwithstanding any other provision of the Scheme, a notice exercising a
Type B Option granted under the Scheme may not be given later than 10
years after the Grant Date.
(7) A Participant shall not be eligible to give a notice exercising a Type B
Option under the Scheme at any time unless, subject to sub-clause (4)
above, he is at that time an Executive.
(8) Subject to sub-clause (10) below, within 30 days after a notice
exercising an Option under the Scheme has been received by the Company
the Board on behalf of the Company shall allot to the Participant or
procure the transfer to him of the number of Shares specified in the
notice.
(9) As soon as reasonably practicable after allotting any Shares under the
Scheme, the Board on behalf of the Company shall:-
(a) issue to the participant a definitive share certificate in
respect of the Shares so allotted,
(b) apply for such Shares to be admitted to listing, quotation or
dealing (as the case may be) on any Relevant Securities Market,
and
<PAGE>
23.
(c) if the Option remains partially unexercised, either amend the
certificate issued to the Participant pursuant to Clause 9(4)
above so as to indicate the number of Shares in respect of which
the option may still be exercised, or issue to him a new
certificate which shall contain all the information which would
have been contained in such an amended certificate.
(10) All Shares allotted or transferred pursuant to the exercise of Type B
Options shall rank pari passu in all respects with the Shares for the
time being in issue (save, in the case of allotted shares, as regards
any rights attaching to such Shares by reference to a record date prior
to the date of such exercise).
12. TAKEOVER, RECONSTRUCTION AND WINDING-UP
(1) If any company ("the acquiring company"):-
(a) obtains control of the Company (within the meaning of section
840 of the Income and Corporation Taxes Act 1988) as a result of
making an offer to acquire shares in the Company, or
(b) 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
(c) becomes bound or entitled to acquire shares in the Company under
Sections 428 to 430F of that Act, or
(d) acquires all or the major part of the undertaking of the Company
pursuant to a reorganization under Section 110 of the Insolvency
Act 1986,
in relation to any Type B Option granted under the Scheme:
(i) subject to sub-clauses (4) and (6) of Clause 11 above, a notice
exercising the Option may be given within one month (or such
longer period as the Board may permit) of such notification, but
(ii) if no such notice is given within that period, the Option shall
lapse on the expiration thereof.
(2) The Board may in its absolute discretion disapply paragraph (i) of sub-
clause (1) above in circumstances where the acquiring company agrees to
grant to a Participant, in consideration of the Participant releasing
any Type B Option granted under the Scheme which has not lapsed (the
"old option"), an option which is equivalent to the old option but
relates to shares in the acquiring company.
<PAGE>
24.
For the purposes of this sub-clause 12(2) a new option shall be treated
as equivalent if:
(a) the total market value of the shares the subject of the old
option is equal to the total market value of the shares the
subject of the new option;
(b) the total amount payable by the Participant for the acquisition
of the shares the subject of the new option is equal to the
total amount that would have been payable of the shares the
subject of the old option; and
(c) the terms of the new option as to vesting are the same as those
prescribed by Clause 11 for the old option as in force
immediately prior to the release of the old option and the grant
of the new option.
(3) The Board shall as soon as practicable after becoming aware of any
circumstances to which sub-paragraphs (a) to (d) above apply, notify all
Participants of such circumstances and of any offer made or likely to be
made by the acquiring company to which sub-clause (2) may apply.
(4) In the event that any acquiring company obtains control of the Company,
or becomes bound or entitled to acquire shares in the Company, in
circumstances falling within sub-clauses 12(1)(a) to (d) above:
(a) sub-clause 11(2) as set out herein shall cease to apply to any
Type B Option then held by a Participant and shall be replaced
as follows:
"Without prejudice to Clause 12 but subject always to sub-
clauses 11(4) and 11(7), a Type B Option may be exercised in
part as follows:
(i) as to 40 per cent, at any time after the second
anniversary of the Grant Date; and
(ii) as to a further 5 percent, at the end of each quarter
following the second anniversary of the Grant Date to
the intent that the Type B Option shall be exercisable
in full on the fifth anniversary of the Grant Date"
or at such other times and/or in such other proportions as the
Board (acting fairly and reasonably) may determine
and
(b) sub-clause 11(3) shall cease to apply.
<PAGE>
25.
13. VARIATION OF CAPITAL
(1) In the event of any increase or variation of the share capital of the
Company (whenever effected) by way of capitalisation or rights issue, or
sub-division, consolidation or reduction, the Board may make such
adjustments as it considers appropriate under sub-clause (2) below.
(2) An adjustment made under this sub-clause shall be to one or more of the
following:-
(a) the number of Shares in respect of which any Type B Option
granted under the Scheme may be exercised;
(b) the price at which Shares may be acquired by the exercise of any
such Option;
(c) subject to sub-clause (5) below, any other term of any such
Option;
(d) where any such Option has been exercised but no Shares have been
allotted or transferred pursuant to such exercise, the number of
Shares which may be so allotted or transferred and the price at
which they may be acquired; or
(e) the aggregate number of Shares over which Options may be granted
pursuant to Clause 10(3).
(3) Except in the case of a capitalisation issue, no adjustment under sub-
clause (2) above shall be made without the prior confirmation in writing
by the auditors for the time being of the Company that it is in their
opinion fair and reasonable.
(4) An adjustment under sub-clause (2) above may have the effect of reducing
the price at which each Share may be acquired by the exercise of a Type
B Option to less than the nominal value of such Share, but only if and
to the extent that the Board shall be authorised by the members of the
Company to capitalise from the reserves of the Company a sum equal to
the amount by which the nominal 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 Board shall capitalise such sum (if any) and apply the
same in paying up such amount as aforesaid.
(5) As soon as reasonably practicable after making any adjustment under sub-
clause (2) above, the Board shall give notice in writing thereof to any
Participant affected thereby.
<PAGE>
26.
14. ALTERATIONS
(1) Subject to sub-clause (2) and (3) below, the Board may at any time alter
or add to all or any of the provisions of this Part B, the Scheme, or
the terms of any Type B Option granted under it, in any respect.
(2) No alteration or addition (other than an alteration or addition which
would, if made in respect of Part A of the Scheme, fall within clause
7(3) above) shall be made under sub-clause (1) above to the provisions
of Clauses 9(1), 9(2), 9(3), 9(4)(b), 9(5), 10, 11(2), 11(3), 11(4),
11(5), 11(6), 12, 13(1), 13(2), 13(3) and 13(5) above, or of this
Clause, without the prior approval by ordinary resolution of the members
of the Company in general meeting.
(3) No alteration or addition to the disadvantage of any Participant shall
be made under sub-clause (1) above unless:-
(a) the Board shall have invited every such Participant to give an
indication as to whether or not he approves the alteration or
addition; and
(b) the alteration or addition is approved by a majority of those
Participants who have given such an indication.
(4) As soon as reasonably practicable after making any alteration or
addition under sub-clause (1) above, the Board shall give notice in
writing thereof to any Participant affected thereby.
15. MISCELLANEOUS
(1) The Company shall at all times keep available such number of authorised
but unissued Shares as the Board may consider sufficient for the
purposes of the Scheme.
(2) The rights and obligations of any individual under the terms of his
office or employment with the Company or a Subsidiary shall not be
affected by his participation in the Scheme or any right which he may
have to participate therein and an individual who participates therein
shall waive any and all rights to compensation or damages in consequence
of the termination of his office or employment for any reason whatsoever
insofar as those rights arise or may arise from his ceasing to have
rights under or be entitled to exercise any option under the Scheme as a
result of such termination.
(3) The Board may from time to time vary such rules and regulations not
inconsistent herewith and establish such procedures and trusts and trust
companies for administration and implementation of the Scheme as it
thinks fit, and in the event of any dispute or disagreement as to the
interpretation of the Scheme, or of any such rule, regulation or
procedure, or as to
<PAGE>
27.
any question or right arising from or related to the Scheme, the
decision of the Board shall be final and binding upon all persons.
(4) In any matter in which they are required to act under the Scheme, the
auditors of the Company shall be deemed to be acting as experts and not
as arbitrators and the Arbitration Acts 1950 to 1979 shall not apply
hereto.
(5) It is hereby certified that the grant of any option under the Scheme
shall not constitute a transaction forming part of a larger transaction
or series of transactions in respect of which the amount or value, or
aggregate amount or value, of the consideration exceeds (Pounds)30,000.
(6) Any notice or other communication under or in connection with the
Scheme may be given by personal delivery or by sending the same by post,
in the case of a company to its registered office, and in the case of an
individual to his last known address, or, where he is a director or
employee of the Company or a Subsidiary, either to his last known
address or to the address of the place of business at which he performs
the whole or substantially the whole of the duties of his office or
employment, and where a notice or other communication is given by first-
class post, it shall be deemed to have been received 48 hours after it
was put into the post properly addressed and stamped.
