<PAGE> 1
APPLIED BUSINESS TECHNOLOGY CORPORATION
RULES OF THE UK APPROVED SHARE OPTION SUBPLAN
(Approved by the Inland Revenue under the Income and Corporation
Taxes Act 1988 on 9 August 1995 under reference X17882).
(Adopted by a resolution of the Company on 14 July 1995).
<PAGE> 2
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
PURPOSE 2
RULES
1 Definitions 3
2 Grant of options 5
3 Limitations on grants 6
4 Exercise of options 7
5 Takeovers and liquidations 8
6 Variation of share capital 9
7 Manner of exercise of options 10
8 Damages and Compensation 10
9 Administration and Amendment 11
10 Termination 12
</TABLE>
1
<PAGE> 3
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
PURPOSE
The Applied Business Technology Corporation Share Option SubPlan ("the Plan")
was approved by the shareholders on 7 February 1995 and adopted by the Board of
Directors on 14 July 1995.
The purpose of the Plan is to give executives and other employees ("key
employees") an opportunity to acquire shares of common stock of the Company, to
provide an incentive for key employees to continue to promote the best
interests of the Company and enhance its long term performance and to provide
an incentive for key employees to join or remain with the Company.
2
<PAGE> 4
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
DEFINITIONS
1.1 In these Rules, the following words and expressions shall have, where
the context so admits, the following meanings:
"Appropriate Period" the meaning given in Paragraph 15(2) of
Schedule 9 to the Taxes Act;
"Approval Date" the date on which the Plan is approved by
the Board of Inland Revenue under Schedule 9;
"Associated Company" has the same meaning as in Section 187(2) of
the Taxes Act;
"Board" the Board of directors of the Company or,
except ion rule 9.4, a duly constituted
committee thereof;
"Company" Applied Business Technology Corporation, a
New York Corporation;
"Control" has the same meaning as in Section 840 of
the Taxes Act;
"Date of Grant" the date on which an Option is, was, or is
to be granted under the Plan;
"Eligible Employee" any individual who:
(A) is a director or employee of any
Participating Company on terms which
require him to devote to his duties
not less than 25 hours (or, in the
case of an employee who is not a
director of any Participating Company,
20 hours) per week (excluding meal
breaks); and
(B) is not precluded by Paragraph 8 of
Schedule 9 from participating in the
Plan;
"the Group" the Company and its Subsidiaries from time
to time;
3
<PAGE> 5
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
"Market Value" in relation to a Share on any day:
a) if and so long as the Shares are listed on
the New York Stock Exchange, the mean
between the highest and lowest quoted
selling prices for the given date, or
b) subject to a) above, its market value
determined in accordance with the
provisions of Part VIII of the Taxation of
Chargeable Gains Act 1992 and agreed for
the purposes of the Scheme with the Shares
Valuation Division of the inland Revenue;
"Option" a right to subscribe for or to purchase Shares
granted (or to be granted) in accordance with the
Rules of this Plan;
"Option Holder" an individual to whom an Option has been granted
or his personal representatives;
"Option Period" in relation to any Option, a period during which
such Option may be exercised;
"Participating Company" (A) the Company; and
(B) any other company of which the Company has
Control and which is for the time being
nominated by the Board to be a Participating
Company;
"Relevant Emoluments" the meaning which the term bears in Sub-paragraph
(2) of Paragraph 28 of Schedule 9 by virtue of
Sub-paragraph (4) of that Paragraph;
"Schedule 9" Schedule 9 of the Taxes Act;
"Securities Act" the United States Securities Act of 1933, as
amended;
"Share" a share in the capital of the Company which
satisfies the conditions specified in paragraphs
10-14 inclusive of Schedule 9;
"Subscription Price" the price at which each Share subject to an
Option may be acquired on the exercise of that
Option determined in accordance with Rule 2;
4
<PAGE> 6
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
"Subsidiary" a company which is both under the Control of the
Company and is a subsidiary of the Company (within
the meaning of Section 736 of the Companies Act
1985);
"Subsisting Option" An Option which has neither lapsed nor been
exercised;
"Taxes Act" the income and Corporation Taxes Act 1988; and
"Year of Assessment" a year beginning on any 6 April and ending on the
following 5 April.
1.2 Where the context so admits the singular shall include the plural and
vice versa and the masculine shall include the feminine.
1.3 Any reference in the Plan to any enactment includes a reference to that
enactment as from time to time modified, extended or re-enacted.
GRANT OF OPTIONS
2.1 Options may only be granted pursuant to and in accordance with this Plan
after the Approval Date.
2.2 At any time after the Approval Date, but not later than the tenth
anniversary thereof, the Board may in its absolute discretion select any
number of individuals who are Eligible Employees and grant such
individuals Options to acquire Shares in the Company. The extent of any
grant of Options shall be determined by the Board in its absolute
discretion but shall be subject to the limits contained in Rule 3.
2.3 The Board may grant an Option subject to such objective condition or
conditions of exercise as it may determine before the whole or a
specified part of such Option may be exercised. No such condition may
subsequently be varied or waived otherwise than in accordance with the
terms of such condition and, where such variation or waiver is
discretionary, in a manner which the Board determines to be fair and
reasonable. An amendment will only take place if events have happened
which in the opinion of the Board cause it to consider that a different
condition would be a fairer measure of the performance of the Option
Holder. Any such amendment to the terms of an Option pursuant to this
Rule 2.3 shall be made by the Board imposing such conditions or
limitations which in their opinion are more appropriate and, so far as is
practicable, are equivalent to those conditions and/or limitations
originally imposed. Unless expressly stated to the contrary, no such
condition shall apply to a New Option granted pursuant to Rule 5.4 nor
shall it apply in the circumstances set out in Rules 5.1, 5.2, 5.3, and
5.5.
2.4 An Option shall be granted under seal or in such other manner as to take
effect as a deed. No payment shall be required for the grant of an Option.
5
<PAGE> 7
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
2.5 The grant of an Option shall be evidenced by the Company issuing an
option certificate which is in the form of Schedule A hereto.
2.6 The Subscription Price shall be determined by the Company not later
than the day when the Option is granted but shall not in any event
be less than the higher of:
(i) the nominal value of a Share; and
(ii) the Market Value of a Share on the day the Option was granted
pursuant to Rule 2.2
2.7 No Option may be transferred, assigned or charged and any purported
transfer, assignment or charge shall cause the Option to lapse
forthwith. Each option certificate shall carry a statement to this
effect.
2.8 An Option Holder may within one month following the date of grant
thereof renounce, release or surrender an Option by notice in
writing to the Company. The renunciation will be effective from the
date of receipt of such notice by the Company upon which date the
relevant Option shall be deemed never to have been granted.
LIMITATIONS ON GRANTS
3.1 No Options shall be granted pursuant to Rule 2 above if such grant
would result in the aggregate of the number of Shares over which
Subsisting Options have been granted under this Plan exceeding
450,000 subject to adjustment pursuant to Rule 6. In determining
this limit, no account shall be taken of any Shares where the right
to acquire the shares was released, lapsed or otherwise became
incapable of exercise.
3.2 Any Option granted to an Eligible Employee shall be limited and
take effect so that the aggregate Market Value of Shares subject to
that Option, when aggregated with the Market Value of shares
subject to Subsisting Options, shall not exceed the greater of
(i) L100,000, or
(ii) four times the amount of the Eligible Employee's Relevant
Emoluments for the current or preceding Year of Assessment
(whichever of those years gives the greater amount) or, if
there were no Relevant Emoluments for the preceding Year of
Assessment, four times the amount of the Relevant Emoluments
for the period of twelve months beginning with the first day
during the current Year of Assessment in respect of which
there are Relevant Emoluments.
6
<PAGE> 8
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
3.3 For the purposes of Rule 3.2
(i) Options shall include all Options granted under the Plan and all
options granted under any other scheme, not being a savings-related
share option scheme, approved under Schedule 9 and established by
the Company or any Associated Company thereof;
(ii) The Market Value of shares shall be calculated as at the time the
Options in relation to those shares were granted or such earlier time
as may have been granted in writing with the Board of Inland Revenue.
4 EXERCISE OF OPTIONS
4.1 Subject to Rules 5.1, 5.2, 5.3, 5.5 and Rule 7 below any Option which has
not lapsed in accordance with Rule 4.2 may be exercised in whole or in part
following the earliest of the following events provided that any condition
imposed under Rule 2.3 shall have been fulfilled or waived, as specified in
the option certificate:
(i) the start of the Option Period
(ii) the death of the Option Holder
(iii) the Option Holder ceasing to be a director or employee of any
Participating Company by reason of disability (as determined by the
Board).
4.2 An Option shall lapse on the earliest of the following events:
(i) the tenth anniversary of the date of the grant or the end of the
Option Period, whichever is the earlier
(ii) the first anniversary of the Option Holder's death
(iii) the Option Holder being adjudicated bankrupt
(iv) unless a release has been effected under Rule 5.4, within 6 months of
the Option becoming exercisable in accordance with Rule 5.1, 5.2 or
5.3
(v) twelve months following the Option Holder ceasing to be a director or
employee by reason of disability (as determined by the Board)
(vi) immediately upon the Option Holder ceasing to be a director or
employee for any other reason not specified in Rule 4.2 (v).
7
<PAGE> 9
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
TAKEOVERS AND LIQUIDATIONS
5.1 If any person obtains Control of the Company as a result of making
(i) a general offer to acquire the whole of the issued 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
then any Subsisting Option may subject to Rule 5.4 below be exercised
within six months of the time when the person making the offer has obtained
Control of the Company and any condition subject to which the offer is made
has been satisfied. The company shall give at least 30 days notice to
Option Holders before any transaction.
5.2 If under relevant legislation 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, any Subsisting Option may, subject to Rule 5.4
below, be exercised within six months of the Court sanctioning the
compromise or arrangement.
5.3 If any person becomes bound or entitled to acquire shares in the Company
under any legislation relating to a Control any Subsisting Option may,
subject to Rule 5.4 below, be exercised at any time when that person
remains so bound or entitled.
5.4 If, as a result of the events specified in Rules 5.1 or 5.2, a company has
obtained Control of the Company, or if a company has become bound or
entitled as mentioned in Rule 5.3, the Option Holder may, by agreement
with that other company (the "Acquiring Company"), within the Appropriate
Period, release each Subsisting Option (the "Old Option") for an option
(the "New Option") which satisfies the conditions that it:
(i) is over shares in the Acquiring Company or some other company
falling within paragraph (b) or paragraph (c) of Paragraph 10,
Schedule 9, which satisfy the conditions specified in Paragraphs 10
to 14 inclusive of Schedule 9
(ii) is a right to acquire such number of such shares as has on
acquisition of the New Option an aggregate Market Value equal to the
aggregate Market Value of the shares subject to the Old Option on
its release
(iii) has a subscription price per share such that the aggregate price
payable on the complete exercise equals the aggregate price which
would have been payable on complete exercise of the Old Option and
8
<PAGE> 10
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
(iv) is otherwise identical in terms to the Old Option.
The New Option shall, for all purposes of this Plan, be treated as having
been acquired at the same time as the Old Option.
Where any New Options are granted pursuant to this Rule 5.4, Rules 2.7, 4,
5, 6, 7, 9.1, 9.3 to 9.6 and 10 shall, in relation to the New Options, be
construed as if references to the Company and to the Shares were references
to the Acquiring Company or, as the case may be, to the other company to
whose shares the New Options relate, and to shares in that other company,
but references to Participating Company shall continue to be construed as
if references to the Company were references to Applied Business Technology
Corporation.
5.5 If the Company passes a resolution for voluntary winding up, any
Subsisting Option may be exercised within six months after the passing of
the resolution.
5.6 For the purposes of this Rule 5, other than Rule 5.4, a person shall be
deemed to have obtained Control of a Company if he and others acting in
concert with him have together obtained Control of it.
5.7 The exercise of an Option pursuant to the preceding provisions of this
Rule 5 shall be subject to the provisions of Rule 7 below.
5.8 Where, in accordance with Rule 5.4, Subsisting Options are released and New
Options granted the New Options shall not be exercisable in accordance with
Rules 5.1, 5.2 and 5.3 above by virtue of the event by reason of which the
New Options were granted.
VARIATION OF SHARE CAPITAL
6.1 In the event of any variation of the share capital of the Company by way of
capitalization or rights issue, consolidation, subdivision or reduction of
capital or otherwise, the number of Shares subject to any Option and the
Subscription Price for each of those Shares may be adjusted by the Company
in such manner as the Board may determine, to the intent that (as nearly as
may be without involving fractions of a Share or a Subscription Price
calculated to more than two decimal places) the aggregate Subscription
Price remains unchanged, provided that:
(i) the aggregate amount payable on the exercise of an Option in full is
not increased;
(ii) the Subscription Price for a Share is not reduced below its nominal
value;
(iii) no adjustment shall be made without the prior approval of the Board
of Inland Revenue; and
9
<PAGE> 11
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
(iv) following the adjustment the Shares continue to satisfy the
conditions specified in paragraphs 10 to 14 inclusive of Schedule 9.
7 MANNER OF EXERCISE OF OPTIONS
7.1 No Option may be exercised by an individual at any time when he is
precluded by paragraph 8 of Schedule 9 from participating in the Scheme.
7.2 No Option may be exercised at any time when the shares which may be
thereby acquired do not satisfy the conditions specified in paragraphs 10
- 14 (inclusive), Schedule 9.
7.3 An Option shall be exercised by the Option Holder giving notice to the
Board and, if different, the Company, in writing of the number of Shares
in respect of which he wishes to exercise the Option accompanied by the
appropriate payment and the relevant option certificate and shall be
effective on the date of its receipt by the Company.
7.4 Each notice of exercise of Options shall also be accompanied by a written
representation that the Shares being acquired upon the exercise of the
Option are being purchased for investment and not for distribution, an
acknowledgement that such Shares have not been registered under the
Securities Act and an agreement that such Shares may not be sold or
transferred unless there is an effective registration statement for them
under the Securities Act, or in the opinion of counsel to the Company such
sale or transfer is not in violation of the Securities Act.
7.5 As soon as reasonably possible, and in any event no later than 30 days,
following the date of exercise the Board shall cause the Company to allot
and issue the relevant Shares and send or cause to be sent to the Option
Holder who has exercised the Option a definitive share certificate for the
Shares in respect of which the Option is exercised. Save for any rights
determined by reference to a date preceding the date of allotment, such
Shares shall rank pari passu with the other shares of the same class in
issue at the date of allotment.
7.6 When an Option is exercised only in part, the balance shall remain
exercisable on the same terms as originally applied to the whole Option
and a new option certificate shall be issued accordingly by the Grantor as
soon as possible after the partial exercise.
8 DAMAGES AND COMPENSATION ON DISMISSAL
It shall be a condition of participation in the Plan that in the event of
the dismissal of a participant for whatever reason from his employment by
any Participating Company in circumstances which could give rise to a
claim for wrongful or unfair dismissal, he shall not become entitled to
any damages or compensation or any additional damages or compensation in
respect of any alteration or loss of his rights or expectations under the
Plan caused thereby.
10
<PAGE> 12
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
ADMINISTRATION AND AMENDMENT
9.1 The Plan shall be administered by the Board whose decision on all disputes
shall be final.
9.2 The Board may from time to time amend these Rules provided that
(i) no amendment may materially affect an Option Holder as regards an
Option granted prior to the amendment being made
(ii) no amendment shall have effect until approved by the Board of Inland
Revenue.
9.3 The cost of establishing and operating the Plan shall be borne by the
Participating Companies in such proportions as the Board shall determine.
The Company shall maintain for itself all necessary books of account and
records relating to the Plan.
9.4 The Board may delegate any or all of its powers in relation to the Plan to
a duly constituted committee. The Board may at any time dissolve such a
committee, alter its constitution or direct the manner in which it shall
act.
9.5 Any notice or other communication under or in connection with the Plan may
be given by the Company either personally or by post to the secretary;
items sent by post shall be prepaid and shall be deemed to have been
received 72 hours after posting.
9.6 The Company shall at all times keep available sufficient authorised and
unissued Shares or Shares held in the Treasury of the Company to satisfy
the exercise to the full extent still possible of all Options which have
neither lapsed nor been fully exercised, taking account of any other
obligations of the Company to issue unissued Shares.
9.7 The Rules of this Plan shall, unless stated otherwise, be governed by and
construed in accordance with English law. In the event of any conflict
between English law and any other law referred to in this Plan, English law
will take precedence.
9.8 The obligation of the Company to sell and deliver Shares under the Plan
shall be subject to all applicable laws, regulations rules and approvals of
the United States. Certificates for shares of Common Stock issued hereunder
may bear such legend(s) as the Board shall deem appropriate, including,
without limitation the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("The
Securities Act"), nor the securities laws of any state. They may not
be sold, transferred, or otherwise disposed of in the absence of
registration under the Securities Act, and applicable state securities
laws, or an opinion of counsel to the Company) that such registration
is not required".
11
<PAGE> 13
APPLIED BUSINESS TECHNOLOGY CORPORATION
APPROVED SHARE OPTION SUBPLAN
TERMINATION
The Plan may be terminated at any time by a resolution of the Board or by a
resolution of the Company in General Meeting and shall in any event terminate
on the tenth anniversary of the Approval Date, but any termination shall not
affect the outstanding rights of Option Holders.
12
