As filed with the Securities and Exchange Commission on August 31, 1999
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
BUNZL PLC
(Exact name of issuer as specified in its charter)
United Kingdom N/A
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
110 PARK STREET
LONDON W1Y 3RB
ENGLAND
011-44-171-495-4950
(Address of principal executive offices)
-----------------------
BUNZL PLC 1994 EXECUTIVE SHARE OPTION SCHEME
(Full title of the plan)
-----------------------
Paul N. Hussey, Esq.
Company Secretary and Group Legal Adviser
Bunzl plc
110 Park Street
London W1Y 3RB
England
011-44-171-495-4950
(Name and address of agent for service)
-----------------------
Copies to:
Keith L. Kearney, Esq.
Davis Polk &Wardwell
1 Frederick's Place
London EC2R 8AB
England
011-44-171-418-1300
-----------------------
<TABLE>
CALCULATION OF REGISTRATION FEE
===============================================================================================================
Proposed
Maximum
Offering Proposed
Amount Price Maximum Amount of
Title Of Securities to be Per Ordinary Aggregate Offering Registration
to be Registered Registered Share(1) Price(1) Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary shares of 25 pence each...... 14,000,000 $5.0911 $66,191,693 $18,401.29
ordinary shares
================================================================================================================
</TABLE>
(
1) As of the date hereof, options to purchase 3,797,000 shares were
outstanding under the Bunzl PLC 1994 Executive Share Option Scheme (the
"Plan") at an aggregate purchase price of $14,247,200, translated into US
Dollars at the noon buying rate in New York City (the "Noon Buying Rate")
on August 27, 1999. The registration fee for the foregoing shares is
based upon the exercise price. Pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, the registration fee for the
remaining 10,203,000 shares available under the Plan is based upon the
average of the high and low prices of the securities being registered
hereby on the London Stock Exchange limited on August 27, 1999 and
translated into US Dollars at the Noon Buying Rate on August 27 , 1999.
This Registration Statement Includes a Total of 13 Pages.
Exhibit Index on Page 10.
===============================================================================
<PAGE>
PART I
The following documents listed under this Part I and the documents
incorporated by reference under Item 3 of Part II to this Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "1933 Act"), and are
incorporated herein by reference.
ITEM 1. PLAN INFORMATION
This information required to be provided to participants pursuant to this
Item is set forth in the Prospectus for the Bunzl plc 1994 Executive Share
Option Scheme, consisting of the Bunzl plc 1994 Executive Share Option Scheme
Explanatory Notes for US Participants dated August 31, 1999, together with the
Bunzl plc 1994 Executive Share Option Scheme, each attached to the Prospectus
as respective Exhibits A thereto.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The written statement required to be provided to participants pursuant to
this Item is set forth in the Prospectus referenced in Item 1 above.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Bunzl plc (the "Registrant") hereby files this Registration Statement
with the Securities and Exchange Commission (the "Commission") on Form S-8 to
register 14 million ordinary shares of 25 pence each, for issuance pursuant to
the Bunzl plc 1994 Executive Share Option Scheme (the "Plan") and such
indeterminate number of additional shares which may be offered and issued to
prevent dilution resulting from stock splits, stock dividends or similar
transactions pursuant to the Plan.
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated by reference herein:
(1) The Registrant's Registration Statement on Form 20-F for the fiscal
year ended December 31, 1998.
(2) All other reports filed with the Commission by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the 1934 Act subsequent to
the date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered herein have been sold or which
deregisters all securities then remaining unsold.
Any statement contained herein or made in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
is also incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable, see Item 3(1) above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 162 of the Registrant's Articles of Association provides, in
relevant part:
"Subject to the provisions of the Companies Act, the Company may
indemnify any Director or other officer against any liability and may purchase
and maintain for any Director or other officer or Auditor insurance against
any liability. Subject to those provisions but without prejudice to any
indemnity to which a Director may otherwise be entitled, every Director or
other officer of the Company shall be indemnified, and if the Board so
determines an Auditor may be indemnified, out of the assets of the Company
against any liability incurred by him as a Director or other officer of the
Company, or as Auditor, in defending any proceedings, whether civil or
criminal, in which judgment is given in his favor or in which he is acquitted
or in connection with any application in which relief is granted to him by the
court from liability for negligence, default, breach of duty or breach of
trust in relation to the affairs of the Company."
The relevant provision of the Companies Act 1985 is Section 310 which
provides:
"310.- (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)
3
<PAGE>
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 of 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
(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 favour 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:
"727 - (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 or is not an officer of the company) it
appears to the court hearing the case that that 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 it 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 under this section as 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 in 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."
The Registrant maintains for the benefit of its directors and officers
insurance against any liability incurred by them in carrying out their duties
as directors and/or officers of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
4
<PAGE>
ITEM 8. EXHIBITS
See index to Exhibits on page 10.
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:
(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
arising after the effective date of this 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 this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from
the low or high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in this Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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 into this Registration Statement;
(2) That for the purpose of determining any liability under the 1933
Act, 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; and
(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 the
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 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 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
5
<PAGE>
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 1933
Act and will be governed by the final adjudication of such issue.
EXPERTS
The financial statements incorporated in this Form S-8 by reference to
the Registration Statement on Form 20-F of Bunzl plc, as of December 31, 1998
and 1997 and for each of the years in the three year period ended December 31,
1998 have been so incorporated in reliance on the report of KPMG Audit Plc,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the ordinary shares offered hereunder has been passed
upon by Slaughter and May, London, England.
6
<PAGE>
SIGNATURES
THE REGISTRANT, PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF
1933, 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 LONDON, ENGLAND, ON THIS 25 DAY OF AUGUST, 1999.
BUNZL PLC
By /s/ A.J. Habgood
---------------------------------
Name: A.J. Habgood
Title: Chief Executive Officer
7
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW, CONSTITUTES AND APPOINTS D.M. WILLIAMS AND P.N. HUSSEY AND EACH OF
THEM, OUR TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION, TO DO ANY AND ALL ACTS AND THINGS AND
EXECUTE, IN THE NAME OF THE UNDERSIGNED, ANY AND ALL INSTRUMENTS WHICH SAID
ATTORNEYS-IN-FACT AND AGENTS MAY DEEM NECESSARY OR ADVISABLE IN ORDER TO
ENABLE BUNZL PLC TO COMPLY WITH THE SECURITIES ACT OF 1933 AND ANY
REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION IN RESPECT THEREOF, IN
CONNECTION WITH THE FILING WITH THE SECURITIES AND EXCHANGE COMMISSION OF THE
REGISTRATION STATEMENT ON FORM S-8 UNDER THE SECURITIES ACT OF 1933, INCLUDING
SPECIFICALLY BUT WITHOUT LIMITATION, POWER AND AUTHORITY TO SIGN THE NAME OF
THE UNDERSIGNED TO SUCH REGISTRATION STATEMENT, AND ANY AMENDMENTS TO SUCH
REGISTRATION STATEMENT (INCLUDING POST-EFFECTIVE AMENDMENTS), AND TO FILE THE
SAME WITH ALL EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH,
WITH THE SECURITIES AND EXCHANGE COMMISSION, TO SIGN ANY AND ALL APPLICATIONS,
REGISTRATION STATEMENTS, NOTICES OR OTHER DOCUMENTS NECESSARY OR ADVISABLE TO
COMPLY WITH APPLICABLE STATE SECURITIES LAWS, AND TO FILE THE SAME, TOGETHER
WITH OTHER DOCUMENTS IN CONNECTION THEREWITH WITH THE APPROPRIATE STATE
SECURITIES AUTHORITIES, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND
EACH OF THEM, FULL POWER AND AUTHORITY TO DO AND TO PERFORM EACH AND EVERY ACT
AND THING REQUISITE OR NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS
FULLY AND TO ALL INTENTS AND PURPOSES AS THE UNDERSIGNED MIGHT OR COULD DO IN
PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT AND
AGENTS, AND ANY OF THEM, OR THEIR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE
DONE BY VIRTUE HEREOF.
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.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ A.J. Habgood
- ------------------ Chief Executive Officer (Principal August 25, 1999
A.J. Habgood Executive Officer); Chairman of the
Board
/s/ D.M. Williams
- ------------------ Finance Director (Principal Financial August 25, 1999
D.M. Williams Officer and Principal Accounting Officer)
8
<PAGE>
A.P. Dyer
- ------------------ Deputy Chairman and Non executive August-25,-1999
A.P. Dyer Director
/s/ L.C. McQuade
- ------------------ Non executive Director August-25,-1999
L.C. McQuade
/s/ O.H.J. Stocken
- ------------------ Non executive Director August-25,-1999
O.H.J. Stocken
/s/ P.G. Lorenzini
- ------------------ Non executive Director August-25,-1999
P.G. Lorenzini
/s/ D.M. Williams
- ------------------ Authorized U.S. Representative August-25,-1999
Bunzl USA Holdings
By: D.M. Williams
Director
9
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
- ------- ------- -------------
4.0 Memorandum and Articles of Association of the Registrant. *
(Incorporated herein by reference to Exhibit 1 to the
Registrant's 1934 Act Registration Statement on
Form 20-F, File No. I-14868 ).*
5.0 Opinion of Slaughter and May. (11)
23.0 Consent of Independent Public Accountants - KPMG Audit Plc. (13)
23.0 Consent of Slaughter and May (included in the opinion (11)
filed as Exhibit 5.01).
24.0 Powers of Attorney (included on the signature page of (8)
this registration statement).
99.0 Form of Bunzl plc 1994 Executive Share Option Scheme. Exhibit A
- -------------------
* Incorporated by reference.
10
EXHIBIT 5.01
26th August, 1999
Dear Sirs,
Bunzl plc
1994 Executive Share Option Scheme
This opinion as to English law is addressed to you in connection with the
Registration Statement on Form S-8 ("Form S-8") proposed to be filed by Bunzl
plc (the "Company") with the United States' Securities and Exchange Commission
under the United States' Securities Act of 1933, in relation to the Company's
1994 Executive Share Option Scheme (the "1994 Scheme").
For the purposes of this opinion, we have examined copies of:-
(i) the Memorandum and Articles of Association of the Company certified
as true, complete and up-to-date by the secretary of the Company; and
(ii) the Rules dated March 1997 of the 1994 Scheme.
We have not made any investigation of the law of any jurisdiction other
than England and Wales.
In giving this opinion we have assumed the following:
(a) that none of the opinions expressed in this opinion would be
affected by the laws (including public policy) of any jurisdiction
outside England;
(b) the conformity to original documents of all copy documents examined
by us
(c) that the 1994 Scheme is an employees' share scheme within the
meaning of section 743 of the Companies Act 1985; and
(d) that all signatures are genuine.
Based upon and subject to the foregoing, and subject to the reservations
mentioned below and to any matters not disclosed to us, we are of the opinion
that:
1. The directors of the Company have the power under the Memorandum and
Articles of Association of the Company to grant options to employees of the
Company or its subsidiaries over ordinary shares in the Company ("Shares").
2. The directors of the Company have power under the Rules of the 1994
Scheme to grant options to any full time director or qualifying employee (both
as defined in the Rules of the 1994 Scheme) of the Company or its subsidiaries
to acquire Shares.
3. Shares issued pursuant to the valid exercise of any option granted
under the 1994 Scheme will be validly issued and fully paid and not liable to
any call of the Company, provided that:
11
<PAGE>
(a) such Shares are validly allotted by the directors of the
Company (or a duly authorized committee thereof);
(b) (where relevant) the option exercise or subscription price is
paid in full, together with any Tax Liability (as defined in
the Rules of the 1994 Scheme);
(c) the Shares are issued in accordance with the Rules of the 1994
Scheme; and
(d) the name of the relevant allottee and Shares allotted are
entered in the register of members of the Company.
Our reservations are as follows:
(a) we express no opinion as to any law other than English law. In
particular, we express no opinion on European Community law as
it may affect any jurisdiction other than England and Wales;
(b) the obligations of the Company will be subject to any laws from
time to time having effect in relation to the Company
concerning bankruptcy or liquidation or any other laws or other
legal procedures affecting generally the enforcement of
creditors' rights; and
(c) we express no opinion as to whether specific performance of
injunctive relief, being equitable remedies, would necessarily
be available in respect of any obligations of the Company.
This opinion is addressed to you solely in connection with the Form S-8
and may not be used or relied upon by any other person or for any other
purposes without our prior written consent. We hereby given consent to the
filing of this letter as an exhibit to the Form S-8 and to the reference to
Slaughter and May in the index to the exhibits to the Form S-8.
Yours faithfully
/s/ Slaughter and May
EXHIBIT 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in this registration statement
on Form S-8, pertaining to the Bunzl plc 1994 Executive Share Option Scheme,
of our report dated March 9, 1999 relating to the consolidated balance sheets
of Bunzl plc and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated profit and loss account, cash flow statement and
statement of total recognised gains and losses for each of the years in the
three year period ended December 31, 1998, which report appears in the
December 31, 1998 annual report on Form 20-F of Bunzl plc.
/s/ KPMG Audit Plc
KPMG Audit Plc
London, England
August 31, 1999
EXHIBIT 99.01
EXHIBIT A
BUNZL PLC
EXECUTIVE SHARE OPTION SCHEME
New Bridge Street Consultants
20 Little Britain
London EC1A 7DH
Inland Revenue Ref: X7199/GRP
March 1997
<PAGE>
CONTENTS
Page
1. DEFINITIONS AND INTERPRETATION..........................................1
2. ELIGIBILITY.............................................................1
3. GRANT OF OPTIONS........................................................2
4. LIMITS..................................................................3
5. EXERCISE OF OPTIONS.....................................................5
6. TAKEOVER, RECONSTRUCTION AND WINDING-UP.................................6
7. VARIATION OF CAPITAL....................................................8
8. ALTERATIONS.............................................................8
9. MISCELLANEOUS...........................................................9
SCHEDULE I...................................................................11
SCHEDULE II..................................................................12
<PAGE>
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 Bunzl plc (registered in England and Wales No. 358948);
"the Grant Date" in relation to an option means the date on which the
option was granted;
"Group Member" means a Participating Company or a body corporate which is
(within the meaning of section 736 of the Companies Act 1985) the Company's
holding company or a subsidiary of the Company's holding company or any other
body corporate nominated by the Board for this purpose which is not under the
control of any single person, but is under the control of two or more persons,
one of whom being the Company or the Company's holding company and which in
relation to the Company, or as the case may be, the Company's holding company
is able (whether directly or indirectly) to exercise 20% or more of its equity
voting rights;
"the London Stock Exchange" means The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited;
"Participant" means a person who holds an option granted under the Scheme;
"Participating Company" means the Company and any Subsidiary or any
company which is not under the control of any single person, but is under the
control of two persons, one of them being the Company, and to which the Board
has with the approval of the Inland Revenue resolved that the Scheme shall for
the time being extend;
"Schedule 9" means Schedule 9 to the Taxes Act 1988;
"the Scheme" means the Bunzl plc 1994 Executive Share Option Scheme as
herein set out comprising Rule 1-9 ("the Approved Part") and Schedules 1 and 2
("the Non-Approved Part") but subject to any alterations or additions made
under Rule 8 below;
"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 Taxes Act
1988;
"the Taxes Act 1988" means the Income and Corporation Taxes Act 1988;
and expressions not otherwise defined herein have the same meanings as
they have in Schedule 9.
(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. ELIGIBILITY
(1) Subject to sub-rule (3) below, a person is eligible to be granted an
option under the Scheme if (and only if) he is a full-time director or
qualifying employee of a Participating Company.
(2) For the purposes of sub-rule (1) above:-
1
<PAGE>
(a) a person shall be treated as a full-time director of a
Participating Company if he is obliged to devote to the
performance of the duties of his office or employment with that
and any other Participating Company the whole or substantially
the whole of his working time, and in any event not less than
25 hours a week;
(b) a qualifying employee, in relation to a Participating Company,
is an employee of the Participating Company (other than one who
is a director of a Participating Company) who is required,
under the terms of his employment, to work for that and any
other Participating Company for the whole or substantially the
whole of his working time, and in any event at least 20 hours a
week.
(3) A person is not eligible to be granted an option under the Scheme at any
time:-
(a) 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, or
(b) when he is not eligible to participate in the Scheme by virtue of
paragraph 8 of Schedule 9.
3. GRANT OF OPTIONS
(1) Subject to sub-rule (2) below and Rule 4 below, the Board may grant to
any person who is eligible to be granted an option under the Scheme an
option to acquire shares in the Company which satisfy the requirements
of paragraphs 10 to 14 of Schedule 9, upon the terms set out in the
Scheme and upon such other objective terms as the remuneration
committee of the Board may specify; and for this purpose an option to
acquire includes an option to purchase and an option to subscribe.
(2) An option 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
results for any period, or at any other time when the
circumstances are considered by the Board to be sufficiently
exceptional to justify the grant thereof; and
(b) within the period of 10 years beginning with the date on which
the Scheme is approved and adopted by the Company in general
meeting, but after 3 October 1994.
(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 Board before the
grant thereof and shall not be less than:-
(a) if shares of the same class as those shares are listed in the
London Stock Exchange Daily Official List, the middle-market
quotation of shares of that class (as derived from that List)
on the dealing day last preceding the Grant Date (or such other
dealing day as may be agreed with the Inland Revenue);
(b) if paragraph (a) above does not apply, the market value (within
the meaning of Part VIII of the Taxation of Chargeable Gains
Act 1992) of shares of that class, as agreed in advance for the
purposes of the
2
<PAGE>
Scheme with the Shares Valuation Division of the Inland
Revenue, on the Grant Date (or such other day as may be agreed
with the Inland Revenue); or
(c) except in the case of an option to acquire shares otherwise
than by subscription, the nominal value of those shares.
(5) Subject to Rule 5(3) below, an option granted under the Scheme to a
Participant shall not be capable of being transferred or assigned. If
a Participant does or suffers any act or thing whereby he would or
might be deprived of the legal or beneficial ownership of an option,
the option shall lapse forthwith.
4. LIMITS
(1) No options shall be granted under the Scheme which would, at the time
they are granted, cause the number of shares in the Company which shall
have been or may be issued in pursuance of options granted in the period
of 10 years beginning with the date on which the Scheme is approved and
adopted by the Company in general meeting, under the Scheme or under any
other executive share option scheme adopted by the Company to exceed such
number as represents 5 per cent. of the ordinary share capital of the
Company in issue at that time.
(2) No options shall be granted under the Scheme in the period of 4 years
beginning with the date on which the Scheme was approved and adopted by
the Company in general meeting which would, at the time they are granted,
cause the number of shares in the Company which shall have been or may be
issued in pursuance of options granted in that period under the Scheme or
under any other executive share option scheme adopted by the Company to
exceed such number as represents 2.5 per cent. of the ordinary share
capital of the Company in issue at that time.
(3) Unless the limit set out in sub-rule (4) below is and has at all times
been complied with, no options shall be granted under the Scheme in the
period of 3 calendar years beginning with the year 1994 or any successive
period of 3 years which would, at the time they are granted, cause the
number of shares in the Company which shall have been or may be issued in
pursuance of options granted in the 3-year period in question, or been
issued in that period otherwise than in pursuance of options, under the
Scheme or under any other employees' share scheme adopted by the Company
to exceed such number as represents 3 per cent. of the ordinary share
capital of the Company in issue at that time.
(4) The limit referred to in sub-rule (3) above is that no options shall
be granted under the Scheme in the period of 5 years beginning with the
date on which the Scheme was approved and adopted by the Company in
general meeting which would, at the time they are granted, cause:-
(a) the number of shares which shall have been or may be issued in
pursuance of options granted in the said 5 year period, or
shall have been issued in that period otherwise than in
pursuance of options, under the Scheme or under any other
employees' share scheme adopted by the Company to exceed such
number as represents 5 per cent. of the ordinary share capital
of the Company in issue at that time, or
(b) the number of shares which shall have been or may be issued in
pursuance of options granted in the said 5 year period under
the Scheme or under any other executive share option scheme
adopted by the Company to exceed such number as represents 3
per cent. of such ordinary share capital.
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(5) No options shall be granted under the Scheme which would, at the time they
are granted, cause the number of shares in the Company which shall have
been or may be issued in pursuance of options granted in the period of 10
years beginning with the date on which the Scheme is approved and adopted
by the Company in general meeting, or been issued in that period
otherwise than in pursuance of options, under the Scheme or under any
other employees' share scheme adopted by the Company to exceed such
number as represents 10 per cent. of the ordinary share capital of the
Company in issue at that time.
(6) No person shall be granted options under the Scheme which would, at the
time they are granted, cause the market value of the shares in the
Company which he may subscribe in pursuance of options granted to him in
the period of 10 years ending at that time under the Scheme or under any
other executive share option scheme adopted by the Company, to exceed 4
times the higher of the total remuneration (excluding benefits in kind,
except bonuses paid in the form of shares) expressed as an annual rate
payable by the Company and any Participating Company to him as at that
time and the total remuneration (excluding benefits in kind, except
bonuses paid in the form of shares) paid by the Company and any
Participating Company to him in the preceding 12 months; and for the
purposes of this sub-rule any option which shall have lapsed or been
released to any extent shall be treated to that extent as if it were
still exercisable. [N.B. Although this sub-rule does not itself require
exercised options to be taken into account, the Company has undertaken in
its circular to shareholders that such options will be taken into account
on the grant of an option unless the remuneration committee is satisfied
that there has been a significant improvement in the Company's
performance in the last two to three years before the grant.]
(7) No person shall be granted 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 to him after 5 April
1984 under the Scheme or under any other share option scheme, not being a
savings-related share option scheme, approved under Schedule 9 and
established by the Company or by any associated company of the Company
(and not exercised) to exceed or further exceed the higher of:-
(a) (pound)100,000; or
(b) if there were relevant emoluments for the preceding year of
assessment, four times the amount of the relevant emoluments
for the current or preceding year of assessment (whichever of
those years gives the greater amount); or
(c) if there were no relevant emoluments for the preceding year of
assessment, four times the amount of the relevant emoluments
for the period of 12 months beginning with the first day during
the current year of assessment in respect of which there are
relevant emoluments;
and for this purpose the relevant emoluments are such of the
emoluments of the office or employment by virtue of which the person
is eligible to participate in the Scheme and of any other office or
employment held by him with a company which is a Participating
Company as are liable to be paid under deduction of tax pursuant to
section 203 of the Taxes Act 1988, after deducting from them amounts
included by virtue of Chapter II of Part V thereof.
(8) For the purposes of this Rule, the market value of the shares in relation
to which an option was granted shall be calculated:-
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(a) in the case of an option granted under the Scheme, as on the day by
reference to which the price at which shares may be acquired by the
exercise thereof was determined in accordance with Rule 3(4) above;
(b) in the case of an option granted under any other approved scheme, as
at the time when it was granted or, in a case where an agreement
relating to the shares has been made under paragraph 29 of Schedule
9, such earlier time or times as may be provided in the agreement;
and
(c) in the case of any other option, as on the day or days by reference
to which the price at which shares may be acquired by the exercise
thereof was determined.
(9) Any option granted under the Scheme shall be limited and take effect so
that the above limits are complied with.
(10) For the purpose of sub-rules (6) and (7) above, where any remuneration or
emoluments are paid otherwise than in sterling, the amounts thereof shall
be converted into sterling at such commercial spot rate published in a
national newspaper as the Board may determine.
5. EXERCISE OF OPTIONS
(1) The exercise of any option granted under the Scheme shall be effected by
giving notice to the Company and otherwise in such form and manner as the
Board may from time to time prescribe and, unless the Board determines
otherwise, any such notice shall have effect only on receipt by the
Company and upon payment in full of the number of shares in respect of
which the option is exercised.
(2) Subject to sub-rules (3) and (4) below and to Rule 6 below an option
granted under the Scheme may not be exercised before the third
anniversary of the Grant Date; and an option may only be exercised
either:-
(a) at a time when such conditions as shall have been specified by
the remuneration committee of the Board before the grant
thereof for this purpose in accordance with Rule 3(1) above
have been satisfied; or
(b) under sub-rules (3) or (4) or Rule 6 below (except where it is
exercisable by virtue only of the Participant's retirement on
reaching the age at which he is bound to retire in accordance
with the terms of his contract of employment).
(3) If any Participant dies before exercising an option granted to him
under the Scheme and at a time when he is either a director or
employee of a Group Member or entitled to exercise the option by
virtue of sub-rule (4) below, the option may (and must, if at all) be
exercised by his personal representatives within 12 months after the
date of his death.
(4) If any Participant ceases to be a director or employee of a Group
Member (otherwise than by reason of his death), the following
provisions apply in relation to any option granted to him under the
Scheme:-
(a) if he so ceases by reason of injury, disability, sickness,
redundancy (within the meaning of the Employment Protection
(Consolidation) Act 1978) or retirement on reaching the age at
which he is bound to retire in accordance with the terms of his
contract of employment, or by reason only that his office or
employment is in a company which ceases to be a Group Member,
or relates to a business or part of a business which is
transferred to a person who is not a Group Member, the option
may (and subject to sub-rule (3) above must, if at all) be
exercised within the period which shall expire 6 months
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after his so ceasing, or (at the absolute discretion of the
Board) either 42 months after the Grant Date, or 42 months
after the last date prior to his so ceasing on which he
exercised an option (not being one granted under a savings
related share option scheme) in circumstances in which
paragraphs (a) and (b) of section 185(3) of the Taxes Act 1988
applied, whichever shall be the latest;
(b) if he so ceases for any other reason, the option may not be
exercised at all unless the Board shall so permit, in which
event it may (and subject to sub-rule (3) above must, if at
all) be exercised to the extent permitted by the Board within
the period mentioned in paragraph (a) above.
(5) A Participant shall not be treated for the purposes of sub-rule (4)
above as ceasing to be a director or employee of a Group Member until
such time as he is no longer a director or employee of any Group
Member, 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.
(6) Notwithstanding any other provision of the Scheme, an option granted
under the Scheme may not be exercised after the expiration of the
period of 10 years (or such shorter period as the Board may have
determined before the grant thereof) beginning with the Grant Date.
(7) A Participant shall not be eligible to exercise an option under the
Scheme at any time when he is not eligible to participate in the
Scheme by virtue of paragraph 8 of Schedule 9.
(8) Subject to sub-rule (9) below, within 30 days after an option under
the Scheme has been exercised by any person, the Board on behalf of
the Company shall allot 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, provided that, for
the avoidance of doubt, where shares are so allotted or transferred to
a nominee, the beneficial interest in them must vest in the person who
exercised the option.
(9) All shares allotted under the 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 the allotment.
(10) If shares of the same class as those allotted under the Scheme are
listed in the London Stock Exchange Official List, the Company shall
apply to the London Stock Exchange for any shares so allotted to be
admitted to that List.
6. TAKEOVER, RECONSTRUCTION AND WINDING-UP
(1) If any person obtains control of the Company (within the meaning of
section 840 of the 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 Board shall within 7 days of becoming
aware thereof notify every Participant thereof and, subject to
sub-rules (3), (4) and (6) of Rule 5 above, an option granted under
the Scheme may be exercised within one month (or such longer period as
the Board 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.
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(3) If any 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 Board may permit any option granted under
the Scheme, subject to sub-rules (3), (4) and (6) of Rule 5 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 Board
shall forthwith notify every Participant thereof and any option granted
under the Scheme may, subject to sub-rules (3), (4) and (6) of Rule 5
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.
(5) 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 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 Article 418 of the Companies (Northern
Ireland) Order 1986, or
(c) becomes bound or entitled to acquire shares in the Company
under sections 428 to 430F of that Act or Articles 421 to 423
of that Order,
any Participant may at any time within the appropriate period (which
expression shall be construed in accordance with paragraph 15(2) of Schedule
9), by agreement with the acquiring company, release any 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 (for the purposes of that
paragraph) is equivalent to the old option but relates to shares in a
different company (whether the acquiring company itself or some other company
falling within paragraph 10(b) or (c) of Schedule 9).
(6) The new option shall not be regarded for the purposes of sub-rule (5)
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 the 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) except for the purposes of the definitions of "Group Member",
"Participating Company" and "Subsidiary" in Rule 1(1) above and the
reference to "the Board" in Rule 5(6) above, the expression
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<PAGE>
"the Company" were defined as "a company whose shares may be
acquired by the exercise of options granted under the Scheme";
(c) Rule 8(2) below were omitted.
7. VARIATION OF CAPITAL
(1) Subject to sub-rules (3) and (4) 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, sub-division, consolidation,
reduction or otherwise, the Board 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 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.
(3) At a time when the Scheme is approved by the Inland Revenue under
Schedule 9, no adjustment under sub-rule (2) above shall be made
without the prior approval of the Inland Revenue.
(4) An adjustment under sub-rule (2) above may have the effect of reducing the
price at which shares may be acquired by the exercise of an option to
less than their nominal value, but only if and to the extent that the
Board shall be 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 exercised and which are 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
shares; 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-rule (2) above, the Board shall give notice in writing thereof to any
Participant affected thereby.
8. ALTERATIONS
(1) Subject to sub-rules (2), (4) and (5) below, the Board 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 (having regard to
the fact that, if an alteration or addition which does not solely
relate to a specified term 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) Subject to sub-rule (3) below, no alteration or addition to the
advantage of Participants shall be made under sub- rule (1) above
without the prior approval by ordinary resolution of the members of
the Company in general meeting.
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(3) Sub-rule (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 the provisions of any proposed or
existing legislation, or to obtain or maintain favourable
taxation, exchange control or regulatory treatment of any
Participating Company, Group Member or Participant or proposed
participant or is minor in nature and is made to benefit the
administration of the Scheme, and
(b) is not made to any of sub-rules (1) to (7) of Rule 4 above;
or which solely relates to a specified term.
(4) 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 relevant 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.
(5) No alteration or addition which solely relates to a specified term shall
be made under sub-rule (1) above unless:-
(a) there shall have occurred an event which shall have caused the
remuneration committee of the Board reasonably to consider that
the specified term would not, without the alteration or
addition, achieve its original purpose, and
(b) the remuneration committee of the Board shall act fairly and
reasonably in making the alteration or addition.
(6) 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 and, if the Scheme
is then approved by the Inland Revenue under Schedule 9, to the Inland
Revenue.
(7) Any reference in this Rule to a specified term is a reference to a
term specified by the remuneration committee of the Board as mentioned
in Rule 3(1) above.
9. MISCELLANEOUS
(1) The rights and obligations of any individual under the terms of his
office or employment with any Group Member 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.
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(3) The Company and any Subsidiary may provide money to the trustees of
any trust or any other person to enable them or him to acquire shares
to be held for the purposes of the Scheme, or enter into any guarantee
or indemnity for these purposes, to the extent permitted by section
153 of the Companies Act 1985.
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SCHEDULE I
Options may be granted in accordance with such provisions as would be
applicable if the provisions of the Approved Part of the Scheme were herein
set out in full, mutatis mutandis, subject to the following modifications:-
1. Delete Rule 2(3)(b).
2. Delete Rule 4(7).
3. In Rule 5(4)(a) add after the words "Taxes Act 1988 applied" the words:
"(or would have applied if he had been resident in the UK for tax
purposes)".
4. In Rule 5(4)(a) insert after the reference to "the Employment
Protection (Consolidation) Act 1978" the words "or any equivalent
provision".
5. Delete Rule 5(7).
6. Add a new Rule 5(11) as follows:
The exercise of options granted after 26 November 1996 will be subject to
such additional conditions and procedures as the Board may determine are
necessary or desirable for the time being in order to comply with or take into
account any legal or taxation obligations of, or implications for, a company
of such exercise. For the avoidance of doubt, and without limiting any of the
foregoing, the Board may require that in a case where a company is obliged to
account for any tax (in any jurisdiction) for which the person in question is
liable by virtue of the exercise of the option and/or for any social security
contributions recoverable from the person in question (together, the "Tax
Liability") that person has either:-
(a) made a payment to the company of an amount equal to the Tax
Liability; or
(b) entered into arrangements with that or another company to
secure that such a payment is made (whether by authorising the
Company to procure the sale of some or all of the shares on his
behalf and authorising the payment to the company of the
relevant amount out of the proceeds of sale or otherwise).
7. In Rule 8(1), delete the words from "(having regard" to "alteration or
addition)" inclusive.
8. Delete Rule 8(5).
9. In Rule 8(6), delete the words from "and, if the Scheme" to "Inland
Revenue" inclusive.
NOTE: Schedules 1 and 2 constitute the non-approved part of the Scheme.
11
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SCHEDULE II
OPTIONS GRANTED TO US EMPLOYEES
Options may be granted in accordance with such provisions as would be
applicable if the provisions of the Approved Part of the Scheme were herein
set out in full, mutatis mutandis, as amended by Schedule I and subject to the
following modifications:
1. Rule 1 - Definitions and Interpretation
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Incentive Option" means an option which is intended to qualify under
Section 422 of the Code (or any successor provision).
"Non-qualified Option" means an option which does not meet the
requirements for an Incentive Option.
"Parent Corporation" has the meaning given to it by Section 424(e) of the
Code (or any successor provision).
"Participating Company" means the Company, and any Subsidiary Corporation
or Parent Corporation of the Company now existing or hereafter formed or
acquired.
"Subsidiary Corporation" has the meaning given to it by Section 424(f) of
the Code (or any successor provision).
2. Rule 3 - Grant of Options
In Rule 3(4):
Insert after the words "may be acquired" the words "other than on the
exercise of an Incentive Option".
Insert after 3(4):
The price at which shares may be acquired on the exercise of an Incentive
Option shall be such price per ordinary share (at the discretion of the Board
expressed in pounds sterling or in United States dollars) as the Board may in
its absolute discretion determine but not less than the higher of:
(a) the nominal value of such ordinary share (except in the case of
an option to acquire shares otherwise than by subscription); or
(b) the middle market quotation of an ordinary share as derived
from The Stock Exchange Daily Official List on the date of
grant of the option (or, if no sales occurred on such date, the
next preceding date on which sales occurred).
In the case of an Incentive Option granted to a person who, on the date
of the grant, owns more than ten per cent (10%) of the total combined voting
power of all shares or stock of the Company or a Parent Corporation or
Subsidiary Corporation of the Company, the price at which shares may be so
acquired shall not be less than one hundred and ten percent (110%) of any such
price determined as aforesaid.
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3. Rule 4 - Limits
Insert After Rule 4(8):
Except as otherwise provided under the Code, to the extent that the
aggregate fair market value of all shares of the Company with respect to which
Incentive Options are exercisable for the first time by a Participant during
any calendar year (under all share option schemes of the Company and any
Parent Corporation and Subsidiary Corporation of the Company) exceeds one
hundred thousand U.S. dollars (U.S. $100,000), such options shall be treated
as Nonqualified Options. For purposes of this limitation, (a) the fair market
value of a share is determined as of the time the option is granted, (b) the
limitation will be applied by taking into account options in the order in
which they were granted, and (c) Incentive Options granted before 1987 shall
not be taken into account.
4. Rule 5 - Exercise of Options
In Rules 5(4) and 5(5):
Insert after the references to "the Employment Protection (Consolidation)
Act 1978" the words "or any equivalent provision".
Insert After Rule 5(6):
In the case of the grant of an Incentive Option to a person who on the
date of grant owns more than ten percent (10%) of the total combined voting
power of all classes of shares or stock of the Company or any Parent
Corporation of the Company, such option may not be exercised after the
expiration of the period of five (5) years (or such shorter period as the
Board may have determined before the grant thereof) beginning with the Grant
Date.
In Rule 5(8):
Insert after the words "subject to sub-rule (9)" the words "and sub-rule
(11)".
Insert after Rule 5(10) a new Rule 5(11) as follows:-
(11) (a) Subject to sub-rule (f) below, where any person purports to
exercise an option in accordance with Rule 5(1) pursuant to
Rules 5(2), 5(3), 5(4) or 6 in respect of any number of shares,
rather than allotting or procuring the transfer of those shares
to him (or his nominee) in accordance with Rule 5(8) above, the
Board on behalf of the Company may determine that, in
substitution for his right to acquire such number of those
shares as the Board may decide, he shall instead be paid a sum
equal to the cash equivalent of that number of shares as
determined in accordance with sub-rule (b) below in full and
final satisfaction of his said right, and in such circumstances
the option so far as it relates to such shares shall lapse.
(b) For the purposes of sub-rule (a) above, the cash requirement of
equivalent of middle-market quotation of a share, as derived
from the London Stock Exchange Daily Official List, on the
dealing day last preceding the date on which the option was
purported to be exercised (or if at the relevant time the
shares are not listed in the London Stock Exchange Daily
Official List, the market value of a share in the Company in
the opinion of the Board at the relevant time)
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<PAGE>
exceeds the price at which that share may be acquired by
the exercise of the option as determined pursuant to
Rule 3(4).
(c) As soon as reasonably practicable after a determination
has been made under sub-rule (a) above that a person
shall be paid a sum in substitution for his right to
acquire any number of shares:-
(i) he shall be paid that sum in cash or in such other form as
the Board may decide; and
(ii) if he has already paid the Company for those
shares, the Company shall return to him the
amount so paid by him.
(d) Where the person in question is or has been an employee
or a director of a Subsidiary but not of the Company,
any payment under this Rule shall be made either by the
relevant Subsidiary or by the Company acting as agent
for the relevant Subsidiary, and in the latter case the
relevant Subsidiary shall forthwith reimburse the
Company the amount of the payment.
(e) There shall be made from any payment under this Rule
such deductions (on account of tax or similar
liabilities) as may be required by law or as the Board
may reasonably consider to be necessary or desirable.
(f) In the case of options granted before 28 August 1996,
the provisions of sub-rules (a) to (e) above inclusive
shall apply only if and to the extent that any necessary
consents of the relevant option holders have been
obtained pursuant to Rule 8(4).
5. Withholding Taxes
The Company may require each Participant, as a condition of exercising (i)
any Non-qualified Option or (ii) an Incentive Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to
reimburse the corporation that employs such Participant for any taxes
required by any government to be withheld or otherwise deducted and paid
by such corporation in respect of the issuance or disposition of such
shares.
6. Securities Law
No shares may be issued to any person upon the exercise of an option if
the Board determines, in its sole discretion, that such issuance will or
may violate the Securities Act 1933 or any applicable state blue sky
laws. If the Board determines that such issuance will or may violate the
Securities Act 1933 or any applicable state blue sky laws, the Board may
(i) withhold the issuance of the shares until it determines that there
would no longer be any such violation or (ii) condition the issuance of
the shares upon the delivery by the Participant to the Company of certain
representations and/or agreements.
14
