As filed with the Securities and Exchange Commission on November 18, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
INSIGNIA FINANCIAL GROUP, INC.
(f/k/a Insignia/ESG Holdings, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 56-2084290
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
200 Park Avenue
New York, New York 10166
(Address of principal executive offices) (Zip Code)
Richard Ellis Group Limited 1997 Unapproved Share Option Scheme
(Full title of the Plan)
Adam B. Gilbert, Esq.
General Counsel and Secretary
Insignia Financial Group, Inc.
200 Park Avenue
New York, New York 10166
(212) 984-8000
(Name, address and telephone number,
including area code, of agent for service)
-----------------------------------------------------
COPIES TO:
Arnold S. Jacobs, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
-----------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Title of securities Amount to Proposed max. Proposed maximum Amount of
to be registered be offering price aggregate registration
registered per share offering price fee
- --------------------------------------------------------------------------------
Common Stock, par 1,289,329 $6.37(1) $8,213,026(1) $2,284
value $0.01 per share shares
- ---------------------
(1) Solely for purposes of calculating the registration fee pursuant to Rule
457(h)(1).
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
------ ---------------------------------------
The Registration Statement on Form 10 of Insignia/ESG Holdings, Inc.,
now known as Insignia Financial Group, Inc. (the "Corporation"), file number
001-14373, filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the Corporation's Quarterly
Reports on Form 10-Q for the quarter ended June 30, 1998, and September 30, 1998
are incorporated herein by reference.
All documents subsequently filed by the Corporation pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing such
documents. Any statement in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superceded for the
purposes of this Registration Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supercedes such statement. Any
statement so modified or superceded shall not be deemed, except as so modified
or superceded, to constitute part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
------ -------------------------
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
------ -------------------------------------
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
------ -----------------------------------------
The Corporation is incorporated in Delaware. Under Section 145 of the
General Corporation Law of the State of Delaware, a Delaware corporation has the
power, under specified circumstances, to indemnify its directors, officers,
employees and agents in connection with actions, suits or proceedings brought
against them by a third party or in the right of the corporation, by reason of
the fact that they were or are such directors, officers, employees or agents,
against expenses incurred in any action, suit or proceeding. Article Tenth of
the Certificate of Incorporation of the Corporation provides for indemnification
of directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware, and the Corporation has entered into
agreements with all its executive officers and directors with respect to such
indemnification. Reference is made to the Certificate of Incorporation of the
2
<PAGE>
Corporation and such agreements, incorporated by reference as Exhibits 3.1 and
10.18, respectively, to the Corporation's registration statement on Form 10.
The indemnification agreements entered into by the Corporation with all of
its directors and its executive officers and one senior executive officer are
based on the provisions of the General Corporation Law of the State of Delaware,
which are contained primarily in Section 145 of the General Corporation Law of
the State of Delaware, but are intended to provide broader indemnification than
that which is specifically provided by Section 145. The indemnification
agreements provide generally that the Corporation will to the fullest extent
permitted by applicable law indemnify the director or executive officer against
expenses arising from any event or occurrence, either prior to or after the time
the indemnification agreement is executed, related to the fact that such person
is or was serving as a director or executive officer of the Corporation (or of
another entity at the Corporation's request).
The Corporation currently has directors and officers liability insurance
policies (the "Policies") in place with Executive Risk Speciality Insurance
Company and Chubb Insurance Company. The Policies are "claims made" policies
with a $20,000,000 aggregate coverage amount. However, the Board of Directors
believes that it serves the Corporation's best interest to supplement this
coverage or any coverage which the Corporation may maintain in the future by
agreeing by contract to indemnify directors and executive officers to the
fullest extent permitted under applicable law.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the General Corporation Law of the State
of Delaware, or (iv) for any transactions from which the director derived an
improper personal benefit. Article Eleventh of the Corporation's Certificate of
Incorporation contains such a provision.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
------ -----------------------------------
Not applicable.
ITEM 8. EXHIBITS.
------ --------
4.1 Richard Ellis Group Limited 1997 Unapproved Share Option Scheme, as
amended.
5 Opinion of Proskauer Rose LLP.
3
<PAGE>
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse Coopers LLP.
23.3 Consent of Plante & Moran, LLP.
23.4 Consent of Beers & Cutler PLLC.
23.5 Consent of BDO Stoy Hayward.
23.6 Consent of Proskauer Rose LLP (included in Exhibit 5).
24 Power of Attorney.
ITEM 9. UNDERTAKINGS.
------ ------------
(a) 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;
(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.
(2) That, for the purposes of determining 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any 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 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.
(c) 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
4
<PAGE>
Securities and 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.
5
<PAGE>
SIGNATURES
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 New York, State of New York, on this 17th day of
November, 1998.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/Andrew L. Farkas
____________________________
Andrew L. Farkas
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/Andrew L. Farkas Chief Executive Officer and Director November 17, 1998
______________________ (Principal Executive Officer)
Andrew L. Farkas
/s/James A. Aston Chief Financial Officer November 17, 1998
______________________ (Principal Financial and
James A. Aston Accounting Officer)
/s/Robert J. Denison Director November 16, 1998
______________________
Robert J. Denison
______________________ Director _______, 1998
Robin L. Farkas
/s/Andrew J.M. Huntley Director November 16, 1998
______________________
Andrew J.M. Huntley
/s/Robert G. Koen Director November 17, 1998
______________________
Robert G. Koen
/s/Stephen B. Siegel Director November 16, 1998
______________________
Stephen B. Siegel
/s/H. Strauss Zelnick Director November 17, 1998
______________________
H. Strauss Zelnick
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Insignia Financial Group, Inc. (f/k/a Insignia/ESG Holdings, Inc.)
("Insignia") pertaining to the Richard Ellis Group Limited 1997 Share Option
Scheme of our report dated April 22, 1998 with respect to the combined financial
statements of the Insignia Financial Group, Inc. entities to be spun-off into
Insignia/ESG Holdings, Inc. as of December 31, 1997 and 1996 and for each of the
three years in the period ended December 31, 1997, included in the Insignia
Registration Statement on Form 10, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
November 13, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) filed by Insignia Financial Group, Inc. (f/k/a Insignia/ESG Holdings,
Inc.) ("Insignia") pertaining to the registration of 1,289,329 shares of Common
Stock, par value $.01 of Insignia, which may be issued upon exercise of options
granted under the Richard Ellis Group Limited 1997 Unapproved Share Option
Scheme of our report dated April 1, 1996 on our audits of the combined
statements of operations and cash flows of Edward S. Gordon Company,
Incorporated and Edward S. Gordon Company of New Jersey, Inc. for the three
years ended December 31, 1995, 1994 and 1993, included in the Insignia
Registration Statement on Form 10, filed with the Securities and Exchange
Commission.
/s/ PRICEWATERHOUSECOOPERS LLP
New York, New York
November 13, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) filed by Insignia Financial Group, Inc. (f/k/a Insignia/ESG Holdings,
Inc.) ("Insignia") pertaining to the registration of 1,289,329 shares of Common
Stock, par value $.01 of Insignia, which may be issued upon exercise of options
granted under the Richard Ellis Group Limited 1997 Unapproved Share Option
Scheme of our reports each dated June 23, 1998 with respect to the audited
combined financial statements of Realty One, Inc. and Affiliated Companies as of
September 30, 1997 and for the nine months then ended, and as of December 31,
1996 and 1995 and for the years then ended, included in the Insignia
Registration Statement on Form 10, filed with the Securities and Exchange
Commission.
/s/ PLANTE & MORAN, LLP
Plante & Moran, LLP
Cleveland, Ohio
November 13, 1998
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) filed by Insignia Financial Group, Inc. (f/k/a Insignia/ESG
Holdings, Inc.) ("Insignia") pertaining to the registration of 1,289,329 shares
of Common Stock, par value $.01 of Insignia, which may be issued upon exercise
of options granted under the Richard Ellis Group Limited 1997 Unapproved Share
Option Scheme of our report dated December 5, 1997 with respect to the financial
statements of Barnes, Morris, Pardoe & Foster, Inc., as of January 31, 1997 and
for the year then ended; and our report dated November 11, 1997 with respect to
the financial statements of Barnes, Morris, Pardoe & Foster Management Services,
LLC, as of December 31, 1996 and for the year then ended, each included in the
Insignia Registration Statement on Form 10, filed with the Securities and
Exchange Commission.
/s/ BEERS & CUTLER PLLC
Washington, DC
November 12, 1998
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) filed by Insignia Financial Group, Inc. (f/k/a Insignia/ESG Holdings,
Inc.) ("Insignia") pertaining to the registration of 1,289,329 shares of Common
Stock, par value $.01 of Insignia, which may be issued upon exercise of options
granted under the Richard Ellis Group Limited 1997 Unapproved Share Option
Scheme of our report dated June 15, 1998 (final paragraph signed as at July 21,
1998), with respect to the financial statements of Richard Ellis Group Limited
as of and for the eight-month period ended December 31, 1997; of our reports
each dated October 23, 1997 (final paragraph signed as at July 21, 1998), with
respect to the financial statements of Richard Ellis Holdings Limited and
Richard Ellis as of April 30, 1997 and for the year then ended; and of our
reports each dated October 22, 1996 (final paragraph signed as at July 21,
1998), with respect to the financial statements of Richard Ellis Holdings
Limited and Richard Ellis as of April 30, 1996 and for the year then ended,
included in the Insignia Registration Statement on Form 10, filed with the
Securities and Exchange Commission.
/s/ BDO STOY HAYWARD
London, United Kingdom
November 13, 1998
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Andrew L. Farkas and Adam B. Gilbert, and each of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to act, without the other, for him and in his
name, place, and stead, in any and all capacities, to sign a Registration
Statement on Form S-8 of Insignia Financial Group, Inc., and any or all
amendments (including post-effective amendments) thereto, relating to the
offering of shares of its Common Stock, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as full to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/Andrew L. Farkas /s/Robert G. Koen
- ---------------------- ----------------------
Andrew L. Farkas Robert G. Koen
/s/Stephen B. Siegel
- ---------------------- ----------------------
Robin L. Farkas Stephen B. Siegel
/s/Robert J. Denison /s/H. Strauss Zelnick
- ---------------------- ----------------------
Robert J. Denison H. Strauss Zelnick
/s/Andrew J.M. Huntley
- ----------------------
Andrew J.M. Huntley
Exhibit 5
Letterhead of Proskauer Rose LLP
November 18, 1998
Insignia Financial Group, Inc.
200 Park Avenue
New York, New York 10166
Dear Sirs:
We are acting as counsel to Insignia Financial Group, Inc. (f/k/a
Insignia/ESG Holdings, Inc.), a Delaware corporation (the "Company"), in
connection with the Registration Statement on Form S-8 (the "Registration
Statement") filed by the Company under the Securities Act of 1933 (the "Act")
relating to the registration of 1,289,329 shares (the "Shares") of Common Stock,
par value $0.01 per share, of the Company. The Shares are issuable by the
Company upon exercise of options (the "Options") granted under the Richard Ellis
Group Limited 1997 Unapproved Share Option Scheme (the "Plan").
We have examined originals or copies, certified or otherwise authenticated
to our satisfaction, of all such corporate records, documents, agreements and
instruments and certificates of public officials and of representatives of the
Company, and have made such investigation of law and fact, as we have deemed
appropriate for purposes of this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that the
Shares are duly authorized and, upon issuance of the Shares in accordance with
the Plan upon exercise of the Options, will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ Proskauer Rose LLP
RICHARD ELLIS GROUP LIMITED
RULES OF THE
RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION
SCHEME
AS ADOPTED BY THE COMPANY ON 17 DECEMBER 1997
<PAGE>
RICHARD ELLIS GROUP LIMITED
RULES OF THE RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION SCHEME
I N D E X
---------
Rule Page
- ---- ----
1. Definitions and interpretation 3
2. Grant of Options 7
3. Option certificates 7
4. Conditions of exercise 9
5. Individual limits 10
6. Scheme limits 11
7. Rights of exercise of Options 11
8. Exercise of Options 13
9. Change of Control 14
10. Variation of share capital 15
11. Administration 16
12. Amendments 16
13. General 17
Appendix Option Certificate
Option Certificate Appendix
Exercise Notice
<PAGE>
RULES OF THE RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION SCHEME
Definitions and interpretation
In this Scheme, the following words and expressions shall, where the
context so permits, have the following meanings:-
Definitions
"Acquisition Price"
the price at which each Share subject to an Option may be acquired on the
exercise of that Option, being (subject to Rule 10):-
Prior to Listing, an amount determined by the Remuneration Committee in
its absolute discretion but, if the Shares are to be subscribed, not
less than the nominal value of a Share;
Following Listing, the Market Value of a Share on the relevant Date of
Grant, but, if the Shares are to be subscribed, not less than the
nominal value of a Share;
"Act"
the Income and Corporation Taxes Act 1988;
"Associated Company"
the meaning given by section 416 of the Act;
<PAGE>
"Auditors"
the auditors for the time being of the Company (acting as experts, not as
arbitrators);
"the Company"
Richard Ellis Group Limited registered in England under no.3350437;
"Company Acquisition"
the acquisition of Control of the Company by a Holding Company;
"Control"
has the meaning given by section 840 of the Act;
"Date of Grant"
in relation to any Option, the date on which the Option is, was or is to
be granted;
"Dealing Day"
a day on which the London Stock Exchange is open for business;
"Eligible Employee"
any Qualifying Employee or Full-time Director of a Participating Company
and for the purposes of this definition "Full-time Director" means a
director of a Participating Company who is required to devote
substantially all of his time, but in any event not less than 25 hours per
week (excluding meal breaks), to his duties and "Qualifying Employee"
means any employee of a Participating Company who is not a director of a
Participating Company;
"Exercise Notice"
the notice given to the Company by an Optionholder in order to exercise an
Option, being in such form (not inconsistent with the provisions of the
Scheme) as the Remuneration
<PAGE>
Committee may from time to time determine.
"the Group"
the Company and its Subsidiaries and "member of the Group" shall be
construed accordingly;
"Holding Company"
any company which has acquired Control of the Company;
"Listing"
the admission of all or any of the ordinary share capital of the Company
(or its holding company) to the Official List of the London Stock Exchange
or the grant of permission for the same to be traded on the Alternative
Investment Market ("AIM")of the London Stock Exchange or the admission of
the same to, or the grant of permission by any like authority for the same
to be traded on, a recognised stock exchange (within the meaning given to
that term by section 841 of the Act);
"London Stock Exchange"
the London Stock Exchange Limited or any successor body thereto;
"Market Value"
on any day, the middle market quotation of a Share as derived from the
Daily Official List of the London Stock Exchange or any similar list in
relation to any other recognised stock exchange on which the Shares are
listed for that day or, if the Remuneration Committee determines, the
average of the middle market quotations for the three immediately
preceding Dealing Days;
"Offer"
any offer by a company to acquire Control of the Company;
<PAGE>
"Option"
a right to acquire Shares granted (or to be granted) pursuant to this
Scheme;
"Optionholder"
an Eligible Employee or a former Eligible Employee or his or her personal
representatives to whom a Subsisting Option has been granted under this
Scheme and who remains entitled to exercise such Option;
"Participating Company"
the Company and any member of the Group or any other company which is for
the time being nominated by the Remuneration Committee to be a
Participating Company;
"Relevant Share Option Scheme"
the Scheme and any other share option scheme adopted by the Company or an
Associated Company other than a savings-related share option scheme;
"Remuneration Committee"
a duly authorised committee of the directors appointed for the purpose of
the administration of the Scheme and the quorum for the transaction of
business of the Remuneration Committee shall be 2 directors;
"Scheme"
the Richard Ellis Group Limited 1997 Unapproved Share Option Scheme, as
from time to time amended;
"Share"
an ordinary share in the capital of the Company;
<PAGE>
"Subsidiary"
any subsidiary of the Company within the meaning of section 736 of the
Companies Act 1985 over which the Company has Control;
"Subsisting Option"
an Option which has neither lapsed nor been exercised;
1.2 Interpretation
References to any statutory provision are to that provision as amended or
re-enacted from time to time, and, unless the context otherwise requires,
words in the singular shall include the plural and vice versa, and words
importing the masculine gender shall include all the genders.
2 Grant of Options
2.1 The Remuneration Committee may, if in its absolute discretion it thinks
fit, grant Options free of charge to an Eligible Employee at any time
following the adoption of this Scheme provided that no Option may be
granted to an Eligible Employee who is within two years of the age at which
he is bound to retire in accordance with his contract of employment and on
the grant of Options the Remuneration Committee may impose such conditions
pursuant to Rule 4 as it sees fit.
2.2 Each Eligible Employee to whom an Option is granted may by notice in
writing within 30 days of the Date of Grant disclaim in whole or in part
his rights under the Option in which event such Option (or part thereof, as
the case may be) shall lapse and be treated for all purposes as never
having been granted.
2.3 Subject to the right of a deceased Optionholder's personal representatives
to exercise an Option in accordance with Rule 7.4, every Option shall be
personal to the Optionholder to whom it is granted and shall not be capable
of being transferred, assigned or charged.
3 Option Certificates
<PAGE>
3.1 As soon as is practicable after having granted an Option to an
Optionholder, the Remuneration Committee shall issue to him an Option
Certificate under seal (or in such other manner as shall take effect as a
Deed of the Company) in respect of such Option.
3.2 The Option Certificate shall be in the form set out in the Appendix or such
other form as the Remuneration Committee shall determine from time to time
and shall state:-
<PAGE>
(a) the Date of Grant of the Option;
(b) the number and class of Shares comprised in the Option;
(c) the Acquisition Price payable for each Share comprised in the Option;
(d) the period during which the Option may normally be exercised and any
date or dates determined by the Remuneration Committee in accordance
with Rule 4.2(a) upon which the Option is first exercisable in whole
or in part and, where on any date only part is exercisable, the number
of Shares in respect of which such partial exercise may be made;
(e) the last date by which an Exercise Notice can be given; and
(f) if applicable, the performance targets or conditions to be satisfied
as a condition of exercise of the Option in accordance with Rule 4.1
and shall be accompanied by the Exercise Notice.
4 Conditions of exercise
4.1 The exercise of an Option may be conditional upon the satisfaction of an
objective performance condition to be set by the Remuneration Committee at
the Date of Grant.
4.2 In addition, when granting an Option, the Remuneration Committee may, if in
its absolute discretion it thinks fit:-
(a) determine any date or dates between the Date of Grant and seventh
anniversary of its Date of Grant on which the Option is first
exercisable in whole or in part, and,
<PAGE>
where on any date only part is exercisable, the number of Shares in
respect of which such partial exercise may be made and determine any
date or dates between the Date of Grant and the seventh anniversary
thereof when the Option shall lapse (in whole or in part); and/or
(b) grant the Option subject to such further objective performance targets
to be satisfied as a condition of exercise as it may in its discretion
determine.
4.3 If, after the Remuneration Committee has determined the objective
performance criteria to be satisfied pursuant to this Rule 4, events occur
which cause the Remuneration Committee to consider that any of the existing
targets or conditions have become unfair or impractical, it may, in its
discretion (provided such discretion is exercised fairly and reasonably)
amend, relax or waive such targets or conditions to the intent that any
targets or conditions which are amended or relaxed will be no more and no
less difficult to satisfy than when they were originally imposed or last
amended or relaxed (as the case may be).
4.4 Without prejudice to any other condition imposed by the Remuneration
Committee, the exercise of any Option granted under the Scheme shall be
conditional upon the occurrence of a Company Acquisition.
5 Individual limits
5.1 Following Listing, any Option granted to an Eligible Employee shall be
limited and take effect so that no Option may be granted which would cause
the aggregate Acquisition Price of the Shares comprised in the Options
granted under this Scheme, when added to the aggregate Acquisition Price of
all the Shares comprised in options granted to him under all Relevant Share
Option Schemes during the preceding ten years (other than options which
have been exercised or which have been disclaimed pursuant to Rule 2.2 or
which were granted prior to Listing), to exceed or further exceed four
times the total remuneration (excluding benefits in kind) expressed as an
annual rate payable to him by the Participating Companies at that time.
5.2 If an Option is inadvertently granted to an Eligible Employee that cause
the limit in this Rule 5 to be exceeded the Option shall be limited and
take effect such that this limit is not exceeded.
<PAGE>
6 Scheme limits
6.1 Following Listing, no Option shall be granted which at the Date of Grant
would result in the maximum number of Shares issued under and remaining
issuable in respect of rights granted under all employees' share schemes
adopted by the Company or any other company when it is under the Control of
the Company in the period of ten (10) years ending on that Date of Grant to
exceed or further exceed thirty per cent (30%) of the Shares in issue on
that Date of Grant.
6.2 For the purpose of the limit contained in Rule 6.1 :-
(a) any Shares comprised in an Option granted prior to Listing;
(b) any Shares which are already in issue when placed under option; and
(c) any Shares comprised in any option which has lapsed
shall be disregarded for the purpose of calculating the number of Shares
under option.
7 Rights of exercise of Options
7.1 Save as provided in Rules 7.3, 7.4 and Rule 9, an Option may not be
exercised before whichever is the latest of:-
(a) any date or dates which may have been specified in accordance with
Rule 4.2(a); and
(b) the date on which any performance conditions imposed pursuant to Rule
4.1 have been satisfied,
but in any event not later than 5.00 pm on the business day immediately
preceding the seventh anniversary of the Date of Grant.
7.2 Save as provided in Rules 7.3, 7.4, 7.5 and Rule 9, an Option may only be
exercised by an Optionholder while he is an Eligible Employee.
<PAGE>
7.3 A Subsisting Option may be exercised in whole or part by the legal personal
representatives of a deceased Optionholder during the period of one year
following the date of death in accordance with the rules of the Scheme (and
any such Option shall lapse at the end of such period to the extent that it
remains unexercised).
7.4 A Subsisting Option may be exercised in whole or part by an Optionholder
who has ceased to be employed by a Participating Company by reason of
permanent disability during the period of one year from the date of such
cessation of employment (and any such Option shall lapse at the end of such
period to the extent that it remains unexercised).
7.5 A Subsisting Option may be exercised, subject to the exercise conditions
contained in the appendix to the Option Certificate, by an Optionholder who
has ceased to be employed by a Participating Company for any reason other
than those states in Rules 7.3 and 7.4 (except dismissal with cause) at the
discretion of the Remuneration Committee (and the Optionholder will be
informed of any exercise of its discretion in his favour on ceasing
employment) during the period of three months from the date of such
cessation of employment (and any such Option shall lapse at the end of such
period to the extent that it remains unexercised).
7.6 An Option shall lapse on the occurrence of the earliest of the following:-
(a) 5.00 pm on the business day immediately preceding the seventh
anniversary of the Date of Grant; or
(b) the third anniversary of the Date of Grant where no Company
Acquisition has taken place in the three years following the Date of
Grant;
(c) the expiry of the period (if any) allowed for the satisfaction of any
performance condition imposed pursuant to Rule 4 without such
condition having been satisfied or the date on which it becomes
apparent that any such condition has become incapable of being
satisfied; or
(d) the date on which an Optionholder ceases to be an Eligible Employee of
any Participating Company by reason of dismissal for cause or other
cessation of employment under Rule 7.5 where the Remuneration
Committee does not exercise its discretion in his favour;
<PAGE>
(e) the expiry of any period allowed for exercise under Rules 7.3, 7.4 or
7.5, if applicable; or
(f) the date on which a resolution is passed, or an order is made by the
Court, for the compulsory winding up of the Company; or
(g) the date on which the Optionholder becomes bankrupt or does or omits
to do anything as a result of which he is deprived of the legal or
beneficial ownership of the Option.
7.7 For the purposes of this Rule 7 no Optionholder shall cease to be an
Eligible Employee (or considered to cease to be employed by a Participating
Company) by reason only that the company by which he is employed is no
longer a member of the Group or the undertaking by which he is employed is
no longer owned by a Participating Company.
8 Exercise of Options
8.1 Save as otherwise provided in this Scheme, an Option shall be exercisable
in whole or part by the Optionholder giving an Exercise Notice and a
remittance for the aggregate of the Acquisition Price payable to the
Company. The Exercise Notice shall be accompanied by the relevant Option
Certificate.
8.2 Within 30 days of receipt of the Exercise Notice, the appropriate
remittance and the Option Certificate, the Remuneration Committee shall
allot or procure the transfer of the Shares in respect of which the Option
has been validly exercised and shall issue a definitive certificate in
respect of the Shares allotted or transferred.
8.3 Shares allotted under this Scheme shall rank pari passu in all respects
with the Shares of the same class for the time being in issue save as
regards any rights attaching to such Shares by reference to a record date
prior to the date of allotment, and in the case of a transfer of existing
Shares the transferee shall not acquire any rights attaching to such Shares
by reference to a record date prior to the date of such transfer.
8.4 If and so long as the Shares are:-
<PAGE>
(i) listed on The London Stock Exchange, the Company shall apply to the
Council of The London Stock Exchange for any Shares allotted under
this Scheme to be admitted to the Official List; or
(ii) traded on AIM, the Company shall apply for any Shares allotted under
the Scheme to be so traded; or
(iii) are listed on any other recognised stock exchange, the Company shall
apply to the governing body of such exchange for the Shares to be
listed on such exchange.
8.5 The exercise of any Option (in whole or in part) shall not be permitted
unless the Remuneration Committee is satisfied at the relevant time that
all conditions relating to such exercise pursuant to these Rules have been
met and (if then applicable) that such exercise would not be in breach of
any code of dealing adopted by the Company pursuant to the Model Code for
Securities Transactions by Directors of Listed Companies published by The
London Stock Exchange ("the Model Code") or if the Company has not adopted
such a code, (so far as applicable) the Model Code or any other applicable
laws or similar code of practice issued in relation to any other stock
exchange on which the Shares comprised in an Option are listed at that time
or any applicable laws affecting dealings in shares.
8.6 If the Company or any employer of an Optionholder is liable to deduct any
tax, national insurance or other fiscal impositions or duties payable as a
result of the exercise of an Option by way of PAYE or otherwise from the
salary or other earnings of the Optionholder in any relevant payment period
and such salary or earnings are insufficient to meet all the liability due
by the Company or such other employer, then the Optionholder shall be
deemed to have appointed the Company as agent for the sale of such number
of shares as may be required to be sold to satisfy the outstanding
liability and, after paying such liabilities, the Company shall remit any
balance remaining to the Optionholder.
9 Change of Control
9.1 On a Company Acquisition the Remuneration Committee may in its discretion
determine that Subsisting Options shall be satisfied by the allotment or
the transfer of shares in the Holding Company, provided that:-
<PAGE>
(a) each Optionholder is entitled for every Share comprised in his
Subsisting Option to such number or numbers of shares in the Holding
Company as have a market value equal to the consideration payable for
a Share by the Holding Company on the Offer resulting in the Company
Acquisition;
(b) the aggregate Acquisition Price payable by the Optionholder for the
new shares in the Holding Company shall be equal to the aggregate
Acquisition Price that would have been payable for the Shares in the
Company comprised in the Subsisting Option
and the Subsisting Option shall become exercisable subject to the Rules of
this Scheme and subject to any exercise conditions specified in the
appendix to the Option Certificate.
9.2 Rule 9.1 shall cease to apply following the first exercise by the
Remuneration Committee of its discretion thereunder.
9.3 Where Rule 9.1 applies to Options the Holding Company shall become the
"Company" for all purposes of this Scheme.
10 Variation of share capital
10.1 In the event of any capitalisation, consolidation, sub-division or
reduction of the share capital of the Company and in respect of any
discount element in any rights issue or any other variation in the share
capital of the Company taking place after the date of a Company Acquisition
or a Listing but not before such event, the number of Shares comprised in
an Option and/or their Acquisition Price may be varied at the discretion of
the Remuneration Committee in such manner as the Remuneration Committee
shall determine acting fairly and reasonably and provided that, save as
provided in Rules 10.2 and 10.3, no variation shall be made which would
result in the Acquisition Price for an allotted Share being less than its
nominal value.
10.2 Where an Option subsists over both issued and unissued Shares, an
adjustment may be made under Rule 10.1 which would have the effect of
reducing the Acquisition Price to less than the nominal value of a Share
provided that the reduction of the Acquisition Price in relation to Options
over both issued and unissued Shares can be made to the same extent.
<PAGE>
10.3 Any adjustment made to the Acquisition Price of unissued Shares which would
have the effect of reducing the Acquisition Price to less than the nominal
value of the Share shall only be made if and to the extent that the
Remuneration Committee is authorised to capitalise from the reserves of the
Company a sum equal to the amount by which the nominal value of the Shares
in respect of which the Option is exercisable exceeds the adjusted
Acquisition Price. The Remuneration Committee may apply such sum in paying
up such amount on such Shares so that on the exercise of any Option in
respect of which such a reduction shall have been made, the Remuneration
Committee shall capitalise such sum (if any) and apply the same in paying
up such amount as aforesaid.
10.4 The Remuneration Committee may take such steps as it considers necessary to
notify Optionholders of any adjustment made under Rule 10.1 and to call in,
cancel, endorse, issue or re-issue any Option Certificate consequent upon
such adjustment.
11 Administration
11.1 The Remuneration Committee shall have power from time to time to make and
vary such regulations (not being inconsistent with this Scheme) for the
implementation and administration of this Scheme as it thinks fit but shall
not for the avoidance of doubt have the power to amend or vary Rule 4.4.
11.2 The decision of the Remuneration Committee shall be final and binding in
all matters relating to this Scheme (other than in the case of matters to
be determined or confirmed by the Auditors in accordance with this Scheme).
11.3 The costs of establishing and administering this Scheme shall be borne by
the Company.
11.4 The Company shall not be obliged to provide Eligible Employees or
Optionholders with copies of any notices, circulars or other documents sent
to shareholders of the Company.
12 Amendments
12.1 The Remuneration Committee may from time to time amend or waive any of
these Rules by resolution provided that:-
<PAGE>
(a) no such alteration shall be made without the prior approval by 95% of
the shareholders of the Company in General Meeting except for any
minor amendment or addition which the Remuneration Committee consider
necessary or desirable in order to:-
(i) benefit the administration of the Scheme; or
(ii) take account of the provisions of any proposed or existing
legislation, statutory instrument, treasury order or similar
non-statutory legislation or regulation; or
(iii)obtain or maintain favourable tax, exchange control or regulatory
treatment for the Company or any Participating Company or any
Optionholder
provided that such amendments or additions do not affect Rule 4.4 of
the Scheme; and
(b) where any alteration would abrogate or adversely affect the rights of
Optionholders in respect of Subsisting Options it shall not be
effective unless such alteration is made:-
(i) with the consent in writing of the majority of the Optionholders
holding Subsisting Options; or
(ii) by a resolution at a meeting of Optionholders by a majority of
the Optionholders who attend and vote either in person or by
proxy.
12.2 The Remuneration Committee shall, as soon as reasonably practicable after
making any alteration to the Rules of this Scheme, give written notice of
all amendments to all Optionholders.
13 General
13.1 This Scheme shall commence upon the date of its adoption by the Company in
General Meeting and shall (unless previously terminated by a resolution of
the Remuneration Committee or an ordinary resolution of the Company in
General Meeting) terminate upon
<PAGE>
the expiry of the period of ten years from the date of the adoption. Upon
termination (howsoever occurring) no further Options may be granted but
such termination shall be without prejudice to the subsisting rights and
obligations of Optionholders in existence at the date thereof.
13.2 The Company shall at all times keep available sufficient authorised and
unissued Shares, or shall ensure that sufficient Shares will be available,
to satisfy the exercise to the full extent still possible of all Subsisting
Options, taking account of any other obligations of the Company to issue
Shares.
13.3 Notwithstanding any other provision of this Scheme:-
(a) this Scheme shall not form part of any contract of employment between
any Participating Company and any employee of any such company and 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 this Scheme or any right which he may have to
participate in it and this Scheme shall afford such an individual no
additional rights to compensation or damages in consequence of the
termination of such office or employment for any reason whatsoever;
and
(b) this Scheme shall not confer on any person any legal or equitable
rights (other than those constituting the Options themselves) against
any Participating Company directly or indirectly, or give rise to any
cause of action at law or in equity against any Participating Company.
13.4 Save as otherwise provided in this Scheme any notice or communication to be
given by the Company to any Eligible Employee or Optionholder may be
personally delivered or sent by ordinary post to his last known address and
where a notice or communication is sent by post it shall be deemed to have
been received 48 hours after the same was put into the post properly
addressed and stamped. Share certificates and other communications sent by
post will be sent at the risk of the Eligible Employee or Optionholder
concerned and the Company shall have no liability whatsoever to any such
person in respect of any notification, document, share certificate or other
communication so given, sent or made.
13.5 Any notice to be given to the Company shall be delivered or sent to the
Company at its registered office and shall be effective upon receipt.
<PAGE>
13.6 This Scheme and all Options granted under it shall be governed by and
construed in accordance with English law.
<PAGE>
APPENDIX
THE RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION SCHEME
OPTION CERTIFICATE
This is to certify that .............................. is the holder of an
Option to acquire ........................ Ordinary Shares having a nominal
value of 5 pence each in Richard Ellis Group Limited. The Acquisition Price
shall be(pound)................... per Ordinary Share.
This Option was granted on ......................................1997 under the
Rules of The Richard Ellis Group Limited 1997 Unapproved Share Option Scheme
("the Scheme").
The Option shall only be exercisable in the event of a Company Acquisition and
is subject to the conditions of exercise set out in the Option Certificate
Appendix.
Upon satisfaction of the conditions of exercise, the Option may be exercised in
whole or in part by completing the Exercise Notice overleaf.
This Option is not transferable and will lapse upon the occasion of a purported
assignment, charge, disposal or other dealing with the rights conveyed by it in
any other circumstances.
This Option shall not afford to the Optionholder any additional right to
compensation on the termination of the Optionholder's employment which would not
have existed had the Scheme not existed.
This Option Certificate and the Option Certificate Appendix is subject to all of
the terms, conditions and provisions of the Scheme including, without
limitation, the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Scheme as may be adopted by the Remuneration
Committee and as may be in effect from time to time. The Scheme is incorporated
herein by reference. If and to the extent that the Option Certificate and the
Option Certificate Appendix conflicts or is inconsistent with the terms,
conditions and provisions of the Scheme, the Scheme shall prevail and this
Option Certificate and the Option Certificate Appendix shall be deemed to be
modified accordingly.
Executed as a Deed and Delivered by Richard Ellis Group Limited in accordance
with Section 36A Companies Act 1985 under the hands of:-
....................................................
(Director/Secretary)
....................................................
(Director)
THIS CERTIFICATE IS IMPORTANT AND SHOULD BE KEPT
WITH YOUR PERSONAL PAPERS.
Please Note: Should you wish to disclaim the Option which has been granted to
you, please return this Option Certificate to the Company with your written
notification within 30 days of the Date of Grant of this Option.
<PAGE>
Certificate No .........................
RICHARD ELLIS GROUP LIMITED
RULES OF THE RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION SCHEME
OPTION CERTIFICATE APPENDIX
1. In the event of a Company Acquisition the number of shares (S) over which a
Subsisting Option may be exercised at any time shall be determined by
reference to the formula below:
S = X x Y
Where X = the number of shares on the face of the Option Certificate
and Y= the relevant multiplier determined in accordance with paragraph 2
below.
2. Y shall be determined in accordance with the following provisions:
On or after but before
the date of the Company the 1st anniversary of 0
Acquisition the Company Acquisition
the 1st anniversary of the 2nd anniversary of
the Company Acquisition the Company Acquisition 0.2
the 2nd anniversary of the 3rd anniversary of
the Company Acquisition the Company Acquisition 0.4
the 3rd anniversary of the the 4th anniversary of the
Company Acquisition Company Acquisition 0.6
the 4th anniversary of the 5th anniversary of the
the Company Acquisition Company Acquisition 0.8
the 5th anniversary of
the Company Acquisition 1
EXERCISE NOTICE
<PAGE>
(Reverse side)
UNDER THE RICHARD ELLIS GROUP LIMITED
1997 UNAPPROVED SHARE OPTION SCHEME ("the Scheme")
TO: The Secretary
Richard Ellis Group Limited
From: .......................................(name in BLOCK CAPITALS)
(1) I hereby give notice to Richard Ellis Group Limited that
immediately upon your receipt of this Notice and the enclosed
remittance I am exercising the Option, granted in the Option
certificate overleaf, to acquire* ................... Ordinary
Shares of 5 pence each in Richard Ellis Group Limited at the
Acquisition Price stated overleaf.
(2) I enclose herewith a cheque drawn in favour of Richard Ellis
Group Limited crossed "A/c Payee" for (pound) .................
being the amount payable in full for those shares.
(3) I acknowledge the appointment of Richard Ellis Group Limited as
my agent if the circumstances set out in Rule 8.6 of the Scheme
Rules apply to the effect that it is authorised to sell such
number of the shares acquired by this exercise of option as may
be necessary to satisfy any liability to PAYE or other fiscal
impositions or duties which Richard Ellis Group Limited or my
employer may be liable for as a result of the exercise of this
Option and which may not be met out of my salary or other
earnings and that following the sale of such number of shares as
may be required to satisfy any PAYE liability or other fiscal
impositions or duties payable that Richard Ellis Group Limited or
my employer will remit any balance to me.
(4) I certify that I am the personal representative of
................................... (deceased) in whose name the
Option was granted. (Delete the whole if inapplicable)
----------------------- ------------------------
Date Signed
* Any partial exercise of the Option (except where such partial
exercise completes the exercise of the Option) should be for no
more than the number of shares determined by reference to the
Option Certificate Appendix.
