<PAGE> 1
As filed with the Securities and Exchange Commission on October 2, 1997
Registration No. 333-36589
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________
Amendment No. 1
to
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________________________________
HOUSEHOLD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3121988
(State of Incorporation) (I.R.S. Employer Identification No.)
2700 Sanders Road, Prospect Heights, Illinois 60070
(Address of principal executive offices) (Zip Code)
HFC BANK PLC PROFIT SHARING SCHEME
(Full title of the Plan)
__________________________
PATRICK D. SCHWARTZ, ESQ.
Associate General Counsel and Assistant Secretary
Household International, Inc.
2700 Sanders Road, Prospect Heights, Illinois 60070
(847) 564-6301
(Name, address and telephone number of agent for service)
_________________________
This Registration Statement shall hereafter become effective in accordance
with the provision of Section 8(a) of the
Securities Act of 1933
<PAGE> 2
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock offered hereby will
be passed upon for Household by John W. Blenke, Vice President-Corporate Law
and Assistant Secretary for the Company. Mr. Blenke is a full-time employee
and an officer of Household and owns and holds options to purchase shares of
the Common Stock of Household.
The financial statements of Household and its subsidiaries
incorporated by reference in this Registration Statement to the extent and for
the periods indicated in its reports, have been audited by Arthur Andersen LLP,
independent public accountants, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in giving said reports.
ITEM 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of Delaware (Section 102) allows a
corporation to eliminate the personal liability of directors of a corporation
to the corporation or to any of its stockholders for monetary damage for a
breach of his/her fiduciary duty as a director, except in the case where the
director breached his/her duty of loyalty, failed to act in good faith, engaged
in intentional misconduct or knowingly violated a law, authorized the payment
of a dividend or approved a stock repurchase in violation of Delaware corporate
law or obtained an improper personal benefit. The Restated Certificate of
Incorporation, as amended, of Household International, Inc. (the "Company"),
contains a provision which eliminated directors' personal liability as set
forth above.
The General corporation Law of Delaware (Section 145) gives
Delaware corporations broad powers to indemnify their present and former
directors and officers and those of affiliated corporations against expenses
incurred in the defense of any lawsuit to which they are made parties by reason
of being or having been such directors of officers, subject to specified
conditions and exclusions; gives a director or officer who successfully defends
an action the right to be so indemnified; and authorizes the Company to buy
directors' and officers' liability insurance. Such indemnification is not
exclusive of any other right to which those indemnified may be entitled under
any bylaw, agreement, bote of stockholders or otherwise.
Household's Restated Certificate of Incorporation, a amended,
provides for indemnification to the fullest extent as expressly authorized by
Section 145 of the General Corporation Law of Delaware for directors, officers
and employees of Household and also to persons who are serving at the request
of Household as directors, officers or employees of other corporations
(including subsidiaries). This right of indemnification is not exclusive of
any other right which any person may acquire under any statute, bylaw,
agreement, contract, vote of stockholders or otherwise.
Household has purchased liability policies which indemnify its
officers and directors against loss arising from claims by reason of their
legal liability for acts as officers, subject to limitations and conditions as
set forth in the policies.
ITEM 8. EXHIBITS.
4 Amended Trust Deed and Rules of the HFC Bank plc Share Scheme.
5* Opinion of John W. Blenke, Vice President-Corporate Law and
Assistant Secretary of Household International, Inc.
23.1* Consent of John W. Blenke, Vice President-Corporate Law and
Assistant Secretary of Household International, Inc. is
contained in his opinion filed as Exhibit 5 hereto.
23.2* Consent of Arthur Andersen LLP, Certified Public Accountants
24* Power of Attorney is set forth on page II-5 of this
Registration Statement.
_____________________
* Previously Filed
II-2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has duly caused this Amendment to the Registration
Statement on Form S-8 (No. 333-36589) to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Prospect Heights, and
State of Illinois, on the 2nd day of October, 1997.
HOUSEHOLD INTERNATIONAL, INC.
By John W. Blenke
---------------------------
(John W. Blenke)
Vice President-
Corporate Law and
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement on Form S-8 (No. 333-36589) has been
signed below by the following persons in the capacities indicated and on the
2nd day of October, 1997.
Signature Title
* Chairman, Chief Executive Officer
- ----------------------------- and Director (as Principal Executive
(William F. Aldinger) Officer)
* Director
- -----------------------------
(Robert J. Darnall)
* Director
- -----------------------------
(Gary G. Dillon)
* Director
- -----------------------------
(John A. Edwardson)
* Director
- -----------------------------
(Mary J. Evans)
II-5
<PAGE> 4
* Director
- -----------------------------
(Dudley Fishburn)
* Director
- -----------------------------
(Cyrus F. Freidheim, Jr.)
* Director
- -----------------------------
(Louis E. Levy)
* Director
- -----------------------------
(George A. Lorch)
* Director
- -----------------------------
(John D. Nichols)
* Director
- -----------------------------
(James B. Pitblado)
* Director
- -----------------------------
(S. Jay Stewart)
* Director
- -----------------------------
(Louis W. Sullivan, M.D.)
* Executive Vice President-Chief Financial
- ----------------------------- Officer (as Principal Accounting and
(David A. Schoenholz) Financial Officer)
*By: John W. Blenke Attorney-in-fact
-------------------------
(John W. Blenke)
II-6
<PAGE> 1
EXHIBIT 4
27 AUGUST 1997
HFC BANK PLC
HFC PENSION PLAN LIMITED
THE ROYAL BANK OF SCOTLAND PLC
==============================================
TRUST DEED AND RULES
OF
THE HFC SHARE SCHEME
(INCORPORATING A MATCHING OFFER TO BE KNOWN AS
THE HFC 1-4-1 SHARE SCHEME)
==============================================
(Adopted by a resolution of a Committee of the Board of Directors of HFC Bank
plc on 13 August 1997
and approved by the Inland Revenue under
the Income and Corporation Taxes Act 1988 on
15 September 1997 under reference ESS 1628)
FRESHFIELDS
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
CLAUSE PAGE
<S> <C>
1. DEFINITIONS....................................................... 1
2. TRUSTS OF THE SCHEME.............................................. 5
3. TRUSTS OF THE CONTRIBUTED SHARES.................................. 7
4. PURCHASE OF SHARES FROM OTHER TRUSTS.............................. 7
5. APPLICATION OF SCHEME TO SUBSIDIARIES............................. 8
6. INVESTMENT........................................................ 8
7. DIVIDENDS......................................................... 8
8. RETENTION OF SHARES............................................... 9
9. DEALING IN RIGHTS ATTACHING TO SHARES............................. 9
10. VOTING RIGHTS..................................................... 10
11. TRUSTEES' POWERS OF DELEGATION.................................... 10
12. ADMINISTRATION.................................................... 11
13. TRUSTEES' INDEMNITIES AND CHARGES................................. 11
14. APPOINTMENT, REMOVAL AND RETIREMENT OF TRUSTEES................... 13
15. RESIDENCE OF THE TRUSTEES......................................... 13
16. ALTERATIONS....................................................... 13
17. TERMINATION OF SCHEME............................................. 14
18. GOVERNING LAW..................................................... 14
19. CONSTRUCTION OF THIS DEED......................................... 15
SCHEDULE 1............................................................. 16
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
The Rules of the HFC Profit Sharing Scheme........................... 16
Operation of the Scheme.............................................. 16
Contributions to be made by Participating Companies.................. 16
Invitation to Participate............................................ 16
Eligibility.......................................................... 17
Acquisition of Shares for Appropriation.............................. 18
Issue of Shares...................................................... 18
Basis of Allocation.................................................. 19
Circulars and Notices................................................ 20
Rights Issue......................................................... 20
Capitalisation Issues................................................ 21
Reconstruction and Takeover.......................................... 21
Scrip Dividends...................................................... 21
Fractional Entitlements.............................................. 22
Disposals and Payments............................................... 23
Transfer of Legal Title.............................................. 23
Terms of Nominee Holding............................................. 24
Stamp Duty........................................................... 25
Notices.............................................................. 25
Information.......................................................... 26
Disputes............................................................. 26
Terms of Employment.................................................. 26
SCHEDULE 2.............................................................. 27
Matching Offer....................................................... 27
Terms on which Contributed Shares held............................... 28
SCHEDULE 3.............................................................. 30
Deed of Adherence.................................................... 30
</TABLE>
<PAGE> 4
THIS DEED is made on 27 August 1997
BETWEEN
HFC BANK PLC whose registered office is at North Street, Winkfield, Windsor
Berkshire SL4 4TD under registration number 1117305 (HFC)
HFC PENSION PLAN LIMITED whose registered office is at North Street, Winkfield,
Windsor Berkshire SL4 4TD under registration number 2426093 (the FIRST TRUSTEE)
and THE ROYAL BANK OF SCOTLAND PLC whose registered office is at 36 St Andrew
Square, Edinburgh EH2 2YB (the SECOND TRUSTEE) (together the TRUSTEES)
WHEREAS
(A) HFC wishes to establish a profit sharing scheme approved in accordance with
the provisions of Schedule 9 to the Income and Corporation Taxes Act 1988
constituting an "employees' share scheme" as that expression is defined in
Section 743 of the Companies Act 1985.
(B) The Board of Directors of HFC by a resolution passed on 21 May 1997
appointed a committee to approve the establishment of such a share scheme (the
COMMITTEE).
(C) The Committee by a resolution passed on 13 August 1997 has approved the
establishment of such a share scheme.
(D) The Trustees have agreed to be the original trustee of such a share scheme.
NOW THIS DEED WITNESSETH as follows:
DEFINITIONS
1.1 In this Deed, the following words and expressions shall bear, unless the
context otherwise requires, the meanings set forth below:
THE APPROPRIATE PERCENTAGE in relation to any Scheme Shares, shall be construed
in accordance with paragraph 3 of Schedule 10 to the Taxes Act;
APPROPRIATION DAY means a day on which Shares are appropriated;
APPROPRIATION VALUE means:
<PAGE> 5
(a) in relation to any appropriation of Shares their initial market value as
determined in accordance with paragraph 30(4) of Schedule 9 to the Taxes
Act (which, if and so long as Shares are listed and dealt in on the New
York Stock Exchange, shall be the average total acquisition price paid
(exclusive of incidental expenses) in respect of them and which, if and so
long as Shares are not so listed, shall be as agreed with the Shares
Valuation Division of the Inland Revenue); or
(b) any other value as agreed with the Inland Revenue;
THE AUDITORS means the auditors of HFC for the time being;
THE BOARD means the board of directors of HFC or a duly authorised committee
thereof;
CAPITAL RECEIPT has the meaning given by Section 186(3) of the Taxes Act;
CLOSE COMPANY has the meaning given by Section 414 of the Taxes Act;
CONTINUOUS EMPLOYMENT has the meaning in the Employment Rights Act 1996;
CONTRIBUTED SHARES means Shares which are acquired by or on behalf of Eligible
Employees in accordance with Schedule 2 and held by the Trustees (or any other
person nominated by the Board);
CONTROL means control within the meaning of Section 840 of the Taxes Act;
DEALING DAY means any day on which the New York Stock Exchange is open for the
transaction of business;
THE DEED means this Trust Deed constituting, inter alia, the Scheme as amended
from time to time;
DEED OF ADHERENCE means a deed substantially in the form set out in Schedule 3
hereto;
EARNINGS means basic annual salary entitlement at such date as the Board shall
determine;
ELIGIBLE EMPLOYEE means an individual who:
(a)(1) is a director or employee (and is not under notice which will
expire prior to or on the Appropriation Day) of a Participating
Company; and
<PAGE> 6
(2) is chargeable to tax in respect of such office or employment
under Case I of Schedule E of the Taxes Act; and
(3) has, on the Qualifying Date, such qualifying period (if any) of
Continuous Employment (being a period commencing not earlier than
five years prior to the Appropriation Day) as the Board may
determine; or
(b) is nominated by the Board as a director or employee (and is not
under notice which will expire prior to the Appropriation Day) of
a Participating Company (or is nominated as a member of a
category of such directors and employees); or
(c) is nominated by the Board as a former director or employee of a
Participating Company (or is nominated as a member of a category
of such former directors and employees) and who ceases to be an
employee within 18 months prior to the Appropriation Day;
PROVIDED always that in each case he is not ineligible for an
appropriation of Shares under the Scheme by virtue of Rules 4.1 and 4.2
of the Scheme, or because he has served a notice under Rule 4.3 of the
Scheme directing the Trustees not to appropriate Shares to him;
EMPLOYEES' SHARE SCHEME has the meaning given by Section 743 of the Companies
Act 1985;
LOCKED-IN-VALUE has the meaning given by Section 186(5) of the Taxes Act;
THE NEW YORK STOCK EXCHANGE means the New York Stock Exchange, Inc.;
MARKET VALUE means in relation to a Share on any day:
(a) if and so long as a Share is traded on the New York Stock Exchange its
quotation on the New York Stock Exchange for that day as reported in the
Wall Street Journal; or
(b) subject to (a) above, its market value, determined in accordance with
Sections 272 to 274 of the Taxation of Chargeable Gains Act 1992 and
agreed in advance with the Shares Valuation Division of the Inland
Revenue;
MATERIAL INTEREST has the meaning given by Section 187(3) of the Taxes Act;
MEMBER OF A CONSORTIUM has the meaning given by Section 187(7) of the Taxes
Act;
<PAGE> 7
NEW SHARES has the meaning given by paragraphs 5(3) and 5A of Schedule 10 to
the Taxes Act;
PARTICIPANT means any person on whose behalf the Trustees hold Scheme Shares or
other securities under the Scheme;
PARTICIPATING COMPANY means:
(a) HFC; and
(b) any other company which is under the Control of HFC, is a Subsidiary of
HFC and with the approval of the Board participates in the Scheme and has
executed a Deed of Adherence;
PERIOD OF RETENTION has the meaning given by paragraph 2 of Schedule 10 to the
Taxes Act in relation to any Participant's Scheme Shares;
QUALIFYING DATE means such date as the Board may from time to time determine;
RECONSTRUCTION OR TAKEOVER means a transaction affecting any Scheme Shares as
mentioned in paragraphs 1(1)(a), (b), (c) or (cc) of Schedule 10 to the Taxes
Act;
RELEASE DATE has the meaning given by Section 187(2) of the Taxes Act;
THE RELEVANT AMOUNT has the meaning given by Section 187(2) of the Taxes Act;
RELEVANT EVENT means in relation to any Scheme Shares, an event which gives
rise to a charge to income tax under Schedule E pursuant to the provision of
Section 186 of the Taxes Act;
SCHEME means the HFC Share Scheme, the rules of which are set out in Schedule 1
hereto;
SCHEME SHARES means Shares other than Contributed Shares which are held by the
Trustees upon the terms of the Scheme on behalf of the Participants to whom
they have been appropriated;
SHARE means a share in the capital of Household International, Inc. which
satisfies the conditions specified in paragraphs 10 to 12 (inclusive) and 14 of
Schedule 9 to the Taxes Act or, where the context permits, in the event of a
Reconstruction or Takeover of Household International, Inc., such share or
other security as forms part of any new holding as that term is defined in
paragraph 5 of Schedule 10 to the Taxes Act;
<PAGE> 8
SPECIFIED AGE means, for the purposes of the Taxes Act, age 65;
SUBSIDIARY means in relation to HFC, a subsidiary within the meaning given by
Section 736 of the Companies Act 1985;
THE TAXES ACT means the Income and Corporation Taxes Act 1988;
TRUSTEES means the original trustees referred to in the Deed or such other
person or persons who is or are the trustee or trustees from time to time of
the Scheme;
YEAR OF ASSESSMENT means a year of assessment within the meaning given by
Section 832 of the Taxes Act.
1.2 Words and expressions not otherwise defined herein have the same meaning
they have in the Taxes Act.
1.3 In these Rules references to any statutory provision are to those
provisions as amended, extended or re-enacted from time to time and shall
include any regulations made thereunder; and, unless the context otherwise
requires, words in the singular include the plural (and vice versa) and words
importing any gender include all genders.
TRUSTS OF THE SCHEME
2.1 Subject as hereinafter provided, the Trustees hereby agree with each
Participating Company that they shall as far as possible apply all monies
received by them under the Scheme in the acquisition of Shares and in paying
their expenses, taxation and other liabilities in accordance with the Rules of
the Scheme.
2.2 The Trustees shall, as soon as reasonably practicable after their
acquisition of Shares, appropriate the Shares to Eligible Employees in
accordance with the Rules of the Scheme and shall notify each Participant of
the description and number of Shares so appropriated to him, the date of the
appropriation and the Appropriation Value.
2.3 If it is not possible to appropriate all the Shares so acquired, the
Trustees may either retain or sell so many of the Shares as HFC shall direct
and in the case of a sale shall apply the proceeds to meet any expenses of such
sale and shall pay the net proceeds to the Participating Companies in the same
proportion as the Participating Companies made contributions to the Trustees or
as may otherwise, in the opinion of the Trustees, be appropriate.
<PAGE> 9
2.4 The Trustees shall hold any Shares once appropriated and all other trust
property deriving therefrom UPON TRUST for the Participants respectively
entitled thereto subject to the Rules of the Scheme.
2.5 The Trustees shall take all reasonable steps to procure that any Shares
held by virtue of Clause 2.4 or 2.6 are duly registered in the name of the
First Trustee or if the Board so directs, that the share certificates and other
documents of title relating to such Shares are lodged with them without delay.
2.6 If the Trustees become entitled in respect of any unappropriated Shares to
any rights to be allotted, or to subscribe for, further securities in Household
International, Inc. (other than an issue by way of capitalisation of shares of
the same class as Shares then held by the Trustees pending an appropriation,
which capitalisation shares shall be retained by the Trustees and shall form
part of the Shares to be appropriated among the Participants on the relevant
Appropriation Day), the Trustees may at their discretion take up those rights
or sell them for the best consideration in money reasonably obtainable at the
time or sell sufficient of them nil paid to enable the Trustees to subscribe in
full for the balance of any unsold rights, or allow them to lapse.
2.7 The Trustees shall hold any unappropriated Shares or unutilised cash
balances arising under Clause 2.3 or 2.6 above and any income arising therefrom
UPON TRUST to apply towards the future acquisition of Shares for the purposes
of the Scheme and their administration expenses.
2.8 Each Participating Company hereby covenants with the Trustees to pay to the
Trustees in accordance with and subject to the provisions of the Scheme, the
amounts due from it for the purpose of the acquisition of Shares by the
Trustees to be appropriated under the Scheme to the Eligible Employees employed
by it, together with any other amounts required to cover any costs, charges and
expenses incurred in such acquisition and any other expenses and charges
incurred by the Trustees in the establishment, operation, administration and
termination of the Scheme.
2.9 Upon the termination of the Scheme for whatever reason the Trustees shall
sell all unappropriated Shares and after defraying all expenses outstanding at
or arising from or as a result of such termination account for and pay to the
Participating Companies any monies held by them so far as practicable in the
same proportion as they were provided or as may otherwise be appropriate.
TRUSTS OF THE CONTRIBUTED SHARES
3.1 The Trustees hereby agree that they shall, so far as possible, apply all
monies received by them from Eligible Employees under a Matching Offer made
pursuant to
<PAGE> 10
Schedule 2 in the acquisition of Shares which the Trustees shall thereafter
hold as Contributed Shares UPON TRUST for the Eligible Employees respectively
entitled thereto subject to the Rules of the Scheme and the provisions of
Schedule 2.
3.2 As soon as reasonably practicable after the acquisition by the Trustees of
any Contributed Shares, for an Eligible Employee, the Trustees shall notify
such Eligible Employee in writing of the number of Contributed Shares held on
his behalf and, if appropriate, of the aggregate cost thereof and (if
different) their Market Value as at the date of acquisition and shall account
for and pay to the Eligible Employee (without interest) any monies received
from the Eligible Employee and not applied in the acquisition of such
Contributed Shares.
3.3 The Trustees shall take all reasonable steps to procure that any
Contributed Shares are duly registered in the name of the First Trustee or, if
the Board so directs, that the share certificates and other documents of title
relating to Contributed Shares are lodged with them without delay.
PURCHASE OF SHARES FROM OTHER TRUSTS
4. The Trustees may purchase Shares from the trustees of any other trust
notwithstanding that the Trustees are the same persons as those trustees or any
of them and such purchase shall be binding on all persons interested hereunder
notwithstanding that it shall be effected or evidenced only by an entry in the
accounts of the Trustees.
APPLICATION OF SCHEME TO SUBSIDIARIES
5.1 The Scheme may with the consent of the Board and, after notification to the
Inland Revenue, be extended to any Subsidiary which is under the Control of HFC
and not a party to this Deed by a deed of adherence, in the form set out in
Schedule 3 hereto or as amended as thought necessary by the Board; and
thereupon the provisions of the Scheme shall apply to that company as though it
were a party to this Deed.
5.2 The Scheme shall cease to apply to any company to which the provisions of
the Scheme apply, other than HFC, at any time when:
(a) that company ceases to be a Subsidiary of HFC or under the Control of
HFC; or
(b) a notice is served by the Board upon the Trustees that the Scheme shall
not apply to that company, provided that the conditions specified in
paragraph 2(3) of Schedule 9 to the Taxes Act continue to be satisfied.
<PAGE> 11
5.3 A company which is or has been a Participating Company shall provide the
Trustees with all information required from it for the purposes of the
administration and termination of the Scheme and shall do so in such form as
the Trustees shall reasonably require and the Trustees shall in good faith rely
on such information without further enquiry.
5.4 If and so long as the Scheme applies to any Participating Company, the
powers and discretions exercisable by that company in relation to the Scheme
shall be exercisable by resolution of its board of directors or a duly
authorised committee of such board, and a minute of any resolution thereof
signed by the secretary or a director of that company shall be sufficient
authority for the Trustees to act on the same.
INVESTMENT
6.1 The Trustees may invest any monies from time to time held by them and not
immediately required for the acquisition of Shares or in paying any costs,
charges, expenses, taxation and other liabilities of the Trustees by placing
the same on current or deposit account as they in their absolute discretion
think fit.
6.2 The Trustees shall be under no duty to invest trust property.
DIVIDENDS
7.1 The Trustees shall, as soon as practicable following their receipt of any
dividend or other money or money's worth in respect of Scheme Shares or
Contributed Shares account for and, subject to Clause 7.2 below, pay such
dividends or other money or money's worth to Participants in accordance with
their respective entitlements. The Trustees may retain such income received in
respect of Shares which have not been allocated to Participants upon the trusts
hereof.
7.2 In respect of any dividend received by the Trustees in US dollars, the
Trustees will convert the net dividend into sterling and pay such sterling
amount to Participants.
RETENTION OF SHARES
8.1 The Trustees shall not dispose of any Scheme Shares for a Participant
during the applicable Period of Retention except in accordance with a direction
of the Participant (or his personal representatives) in the event of a
Reconstruction or Takeover affecting such Shares.
<PAGE> 12
8.2 The Trustees shall not dispose of any Scheme Shares after the end of the
applicable Period of Retention and before the Release Date except in accordance
with Rule 14.1(b) or (c) of Schedule 1.
8.3 The Trustees shall not dispose of any Contributed Shares for a Participant
during the Period of Retention of the related Scheme Shares or such shorter
period as the Board may decide being not less than one year, except in
accordance with a direction of that Participant (or his personal
representatives) in the event of a Reconstruction or Takeover affecting such
Shares.
DEALING IN RIGHTS ATTACHING TO SHARES
9. The Trustees shall deal with any right to be allotted other shares,
securities or rights of any description conferred in respect of a Participant's
Shares only pursuant to a direction given by or on behalf of the Participant or
any person in whom the beneficial interest in that Participant's Shares is for
the time being vested.
VOTING RIGHTS
10.1 If and so long as Shares held under the Scheme are registered in the name
of the First Trustee, the Trustees shall, in respect of any matter upon which
at a general meeting of Household International, Inc. or at any class meeting
they are entitled to exercise any voting rights attaching thereto, invite the
relevant Participants to direct them as to such exercise. The First Trustee
shall not be entitled in respect of Shares held on behalf of such Participants
to vote on a show of hands unless all directions received from those
Participants who have given directions in respect of the particular resolution
are identical, and shall not in any circumstances be under an obligation to
call for a poll. In the event of any poll the First Trustee shall vote only in
accordance with the directions of Participants who have given such directions
and shall not exercise voting rights in respect of Shares where no directions
have been received from Participants in relation to those Shares.
10.2 The First Trustee may not vote in respect of Shares which have not been
appropriated pursuant to the Scheme.
TRUSTEES' POWERS OF DELEGATION
11.1 The Trustees, in the exercise of their discretions and the performance of
their duties hereunder, may employ and pay a registrar, solicitor, broker,
actuary, accountant, banker or any other person, and may appoint any such
person as their agent to transact all or any business, and may act on the
advice or opinion of any solicitor, broker, actuary, accountant or other
professional or business person, and shall not be
<PAGE> 13
responsible for anything done or omitted to be done or suffered in good faith
in reliance on such advice or opinion.
11.2 Except as otherwise provided by Section 186 of and Schedules 9 and 10 to
the Taxes Act, the Trustees may delegate any of their powers and duties
hereunder or any business including the exercise of any discretion to any
person or company including HFC or any Subsidiary of HFC.
11.3 The Trustees may at any time, and shall if so directed by the HFC, revoke
any delegation or arrangement made under this Clause and/or require any trust
property held by another person to be returned to the Trustees.
11.4 The Trustees may execute and authorise any of their directors, officers or
employees on their behalf to execute any deeds, documents, cheques or other
instruments by the impression of any signature on behalf of, or as witness of
any sealing by, the Trustees of any writing, printing, photocopying and other
modes of representing or reproducing words in a visible form.
11.5 The Trustees may at any time cause part of the trust property to be
deposited for safekeeping with any person on behalf of the Trustees and may pay
any expenses in connection therewith.
ADMINISTRATION
12.1 Subject to and in accordance with the provisions of this Deed, the
Trustees may convene meetings of the Trustees and make such regulations as they
consider appropriate relating to the administration of the Scheme. On any vote
taken at a meeting of the Trustees which is not unanimous the First Trustee
shall have the casting vote.
12.2 The Trustees may arrange for the relevant Participating Company to account
to the Inland Revenue or other authority concerned for any amounts deducted
from payments made pursuant to the Scheme in respect of income tax or any other
deductions required in accordance with Paragraph 7 of Schedule 10 to the Taxes
Act.
12.3 Where there is no relevant Participating Company in respect of a
Participant, the Trustees shall account to the Inland Revenue or other
authority concerned for any amounts of income tax or other deductions required
to be made in accordance with paragraph 7 of Schedule 10 to the Taxes Act.
12.4 The Trustees shall maintain such records as may be necessary to enable
them to carry out their obligations under paragraph 7 of Schedule 10 to the
Taxes Act, and shall
<PAGE> 14
give to each Participant such information and documentation as shall be in
their possession to enable the Participant to determine and quantify any
liability he may have to income tax under Schedule E by reason of any event.
12.5 The Trustees shall keep confidential all information supplied to them by
Participating Companies under Clause 5.3 and shall disclose the same only to
persons employed in accordance with Clause 11.1 above or to such other persons
as required by law.
TRUSTEES' INDEMNITIES AND CHARGES
13.1 The Participating Companies hereby jointly and severally covenant with the
Trustees that they shall keep the Trustees and their estates and effects fully
indemnified against all actions, claims, losses, demands, proceedings, charges,
expenses, costs, damages, taxes, duties and other liabilities whatsoever
arising out of or in connection with the Scheme save to the extent that any
such liability is capable of being discharged at the expense of any property
held by them as Trustees, save for Scheme Shares and Contributed Shares, or if
they are entitled to receive reimbursement from any other person or from
another source, but so that no Trustee shall be indemnified or exonerated in
respect of any fraud or wilful default on his or his agent's part or (in the
case of a Trustee engaged in the business of providing a trustee service for a
fee) his or his agent's negligence. In addition, the Trustees shall have all
indemnities conferred upon trustees generally by law and by the Trustees Act
1925.
13.2 Neither the Trustees nor any of their officers or employees shall be
liable to account to Participants for any remuneration or other benefit
received in connection with the Scheme and no Trustee or officer or employee of
the Trustees shall be liable to account to other Participants for any profit
derived from the appropriation to him of Shares held under the Scheme.
13.3 Any person acting as a Trustee in the course of any profession or business
carried on by him may charge and be paid such reasonable remuneration, charges
or disbursements whether in connection with the Scheme or otherwise as shall
from time to time be agreed between him and HFC.
13.4 Any Trustee (and any director or officer of a body corporate or a trust
corporation acting as a Trustee) shall not on his own account be precluded from
acquiring, holding or dealing with any stock, shares or securities whatsoever
of Household International, Inc., HFC or any Subsidiary or any other company in
the shares of which HFC or any such Subsidiary may be interested, or from
entering into or being interested in any contract or other transaction with
HFC, any Subsidiary or any
<PAGE> 15
such other company, and nor shall he be in any way liable to account to HFC,
any Subsidiary, any such other company or any Participant for any profits made,
fees, commissions, shares of brokerage, discounts allowed or advantages
obtained by him from or in connection with such acquisition, holding, dealing,
contract or transaction whether or not in connection with his duties hereunder.
13.5 The Trustees shall be entitled in the absence of manifest error to rely
without further enquiry on information supplied to them by any Participating
Company for the purposes of the Scheme and shall also be entitled to rely in
the absence of manifest error on any direction, notice or document purporting
to be given or executed by or with the authority of any Participating Company
or by any Participant as having been so given or executed.
APPOINTMENT, REMOVAL AND RETIREMENT OF TRUSTEES
14.1 The Board may at any time by writing under hand of a person duly
authorised by a resolution of the Board:
(a) appoint a new or additional Trustee, including a corporate Trustee; and
(b) remove a Trustee from office (but not so as to leave in office less than
two Trustees, unless a corporate Trustee), without assigning any reason
therefor and such removal shall (in the absence of any other date
specified in the notice) take place forthwith.
14.2 The powers of appointment and removal shall be vested in the Trustees in
the event that HFC ceases to exist otherwise than in consequence of a
Reconstruction or Takeover when the successor company (or, if more than one,
such successor companies as HFC shall nominate) shall have such powers.
14.3 A Trustee may retire by giving to the Board written notice of his desire
to retire and such notice shall take effect at the expiry of three months (or
such other period as may be agreed with the Board) from the date of such
notice. The retiring Trustee shall not be obliged to give any reason for and
shall not be responsible for any costs occasioned by such retirement but shall
promptly execute all such documents and do all such things as may be necessary
to give proper effect to such retirement.
14.4 Forthwith upon his removal or retirement a Trustee shall transfer all
trust property held by him and deliver all documents in his possession relating
to the Scheme as the Board may direct and hereby authorises the continuing
Trustees, in the absence of such transfer, to effect such transfer on his
behalf.
<PAGE> 16
RESIDENCE OF THE TRUSTEES
15. There shall at all times be at least one trustee resident in the United
Kingdom for United Kingdom tax purposes.
ALTERATIONS
16.1 The Board may prior to approval of the Scheme under Schedule 9 of the
Taxes Act by the Inland Revenue alter or add to the Scheme (including this Deed
and the Schedules hereto) as may be necessary in order to obtain such approval.
16.2 After the date on which the Scheme is so approved, the Board may by
written resolution alter or add to any of the provisions of this Deed and the
Schedules hereto in such manner as may be thought fit (and such alterations or
additions shall be binding on the Trustees, all Participating Companies and
Participants) PROVIDED THAT no such purported alteration or addition shall be
effective:
(a) if and so long as the Scheme is desired to be approved by the Inland
Revenue, until approved by the Inland Revenue;
(b) where the alteration or addition would materially prejudice the rights
attaching to any Scheme Shares appropriated to Participants;
(c) where the alteration or addition would cause the Scheme to cease to be an
Employees' Share Scheme;
(d) where the alteration or addition would offend the rule against
perpetuities.
16.3 Written notice of any alteration or addition made in accordance with
Clause 16.2 shall be given to the Trustees and all Participants affected
thereby.
16.4 Written notice of any alteration or addition made in accordance with
Clause 16.2 shall be given to the Inland Revenue even in circumstances where
continued Inland Revenue approval is not desired.
TERMINATION OF SCHEME
17.1 No appropriation of Shares under the Scheme may be made later than
seventy-four years after the date of this Deed or the earlier termination of
the Scheme by the Board, and the perpetuity period applicable to this Deed
shall be eighty years.
<PAGE> 17
17.2 On termination of the Scheme any surplus assets held under this Deed shall
be paid to Participating Companies so far as practicable in proportion to the
total amounts provided by each of them to the Trustees.
GOVERNING LAW
18. This Deed shall be governed by and construed in accordance with English
law.
CONSTRUCTION OF THIS DEED
19. The Schedules hereto shall be treated as part of this Deed.
IN WITNESS whereof this Deed has been executed by the parties hereto and is
intended to be and is hereby delivered on the date first above written.
<PAGE> 18
SCHEDULE 1
THE RULES OF THE HFC PROFIT SHARING SCHEME
OPERATION OF THE SCHEME
1.1 The Board may at any time resolve that appropriations of Shares shall be
made under the Scheme to Eligible Employees PROVIDED THAT not more than one
appropriation of Shares shall be made under the Scheme in any Year of
Assessment.
1.2 The Board shall notify the Trustees of the relevant Appropriation Day.
1.3 The Board may resolve that the Shares shall be acquired by purchase on the
New York Stock Exchange or privately or by subscription or by any combination
thereof and shall notify the Trustees accordingly.
CONTRIBUTIONS TO BE MADE BY PARTICIPATING COMPANIES
2.1 The Board shall notify each Participating Company of the amount to be
contributed by that Participating Company to the Trustees to support any
acquisition of Scheme Shares which shall not exceed such amount as is required
to acquire the number of Shares which are to be appropriated to Eligible
Employees who are for the time being directors or employees of that
Participating Company or, where applicable, former directors or employees of
such company.
2.2 Contributions to the Trustees to support the acquisition of Shares for
appropriation on any Appropriation Day shall be paid in sufficient time to
enable the Trustees to make the acquisition no later than the Appropriation
Day.
INVITATION TO PARTICIPATE
3.1 Where the Board resolves that the Scheme shall be operated, HFC shall issue
a letter of invitation to each Eligible Employee.
3.2 A letter of invitation shall invite an Eligible Employee to consent to the
appropriation of Shares under the Scheme and to complete and return a contract
of participation (in such form as may be agreed with the Inland Revenue) by a
given date which shall be prior to the relevant Appropriation Day.
3.3 A contract of participation shall bind the relevant Eligible Employee in
contract with HFC in consideration of the appropriation to him of Shares:
<PAGE> 19
(a) to permit all Scheme Shares appropriated to him to remain in the hands of
the Trustees throughout the applicable Period of Retention; and
(b) not to assign, charge or otherwise dispose of his beneficial interest in
any Scheme Shares during the applicable Period of Retention; and
(c) if he directs the Trustees to transfer the legal title of any Scheme
Shares to him at any time before the applicable Release Date, to pay to
the Trustees before such transfer takes place a sum equal to income tax at
the basic rate on the Appropriate Percentage of the Locked-in-Value of
such Scheme Shares at the time of such direction; and
(d) not to direct the Trustees prior to the relevant Release Date to dispose
of any Scheme Shares otherwise than as aforesaid or by sale for the best
consideration in money that can reasonably be obtained at the time of such
sale;
PROVIDED that no Participant by virtue of the signature of a contract of
participation shall be precluded from directing the Trustees to dispose of his
Shares in the event of a Reconstruction or Takeover affecting his Scheme
Shares.
ELIGIBILITY
4.1 An individual shall not be eligible to have an appropriation of Shares in
any Year of Assessment in which shares have been appropriated to him under any
other profit sharing scheme approved by the Inland Revenue pursuant to the
Taxes Act and established by:
(a) HFC;
(b) any Subsidiary;
(c) any company which has Control of HFC or any company which is under the
Control of such a company; or
(d) any company which is a Member of a Consortium owning HFC or is owned in
part by HFC as a Member of a Consortium.
4.2 An individual shall not be eligible to have an appropriation of Shares at
any time when he has (or had within the preceding twelve months) a Material
Interest in:
(a) Household International, Inc.; or
(b) any company which has Control of Household International, Inc.; or
<PAGE> 20
(c) a Member of a Consortium which owns Household International, Inc.,
PROVIDED that this provision shall only apply if HFC is or was at relevant
times a Close Company or would be or would have been a Close Company but for
Section 414(1)(a) or 415 of the Taxes Act.
4.3 An individual may by irrevocable written notice given to HFC not later than
ten Dealing Days before an Appropriation Day direct that Shares shall not be
appropriated to him on that Appropriation Day.
ACQUISITION OF SHARES FOR APPROPRIATION
5.1 If the Trustees are to acquire Shares for appropriation by purchase on the
New York Stock Exchange or privately, they may not purchase such Shares earlier
than 60 days prior to the relevant Appropriation Day, and in the case of a
private purchase made at a time when Shares are listed on the New York Stock
Exchange shall not purchase the Shares at a price which is materially more or
less than the market price quoted on the New York Stock Exchange at the time of
such purchase.
5.2 If the Trustees are to acquire Shares for appropriation by subscription
they may not subscribe for such Shares earlier than 30 days prior to the
relevant Appropriation Day and the price per share at which the Shares are
subscribed shall be the greater of:
(a) the nominal value; and
(b) the Market Value on the immediately preceding Dealing Day.
of a Share.
ISSUE OF SHARES
6.1 Shares to be subscribed for by the Trustees (whether or not appropriated
pursuant to the Scheme) will rank pari passu in all respects with the Shares
then in issue except that they will not rank for any rights attaching to Shares
by reference to a record date preceding the date of issue.
6.2 If and so long as the Shares are listed on the New York Stock Exchange, HFC
shall procure that Household International, Inc. shall apply for a listing for
any Shares issued pursuant to the Scheme as soon as practicable after the
allotment thereof.
6.3 In the event that Shares are acquired by the Trustees for appropriation
pursuant to the Scheme and some of those Shares carry a right of a kind which
is not carried by every other Share, the Shares that carry such rights shall so
far as practicable be
<PAGE> 21
appropriated pro rata according to the number of Shares appropriated to each
Participant on the Appropriation Day.
BASIS OF ALLOCATION
7.1 The Shares to be appropriated to Eligible Employees on an Appropriation Day
shall be allocated in accordance with one or more of the following formulae to
be determined by the Board:
(a) Eligible Employees shall receive Shares having an Appropriation Value
equal to such percentage of their salary (as defined in Section 187(5) of
the Taxes Act) as the Board shall determine; or
(b) Eligible Employees shall receive Shares having an Appropriation Value
equal to such percentage of their Earnings as the Board shall determine;
or
(c) Eligible Employees shall receive Shares the number of which is determined
according to the maximum number that can be acquired within a monetary
limit, set by the Board, by the Trustees at the best acquisition price the
Trustees can obtain; or
(d) Eligible Employees shall receive a number of Shares proportionate to
their length of service with a Participating Company; or
(e) Eligible Employees shall receive a number of Shares corresponding to or
depending on the number of Contributed Shares acquired by or on behalf of
them and lodged with the Trustees or any other person nominated by the
Board in accordance with Schedule 2 PROVIDED THAT the number of Shares
appropriated is on the basis of at least one Share received for every one
Share so acquired and lodged; or
(f) such other formula resolved on by the Board and approved by the Inland
Revenue.
7.2 The aggregate of the Appropriation Value of all Shares allocated to any
Participant in any Year of Assessment may not exceed the Relevant Amount.
7.3 Where the Trustees appropriate Shares a proportion of which rank for any
dividend or other distribution or other rights attaching to Shares by reference
to a record date preceding the relevant Appropriation Day, and a proportion of
which do not, then the Shares to be appropriated to each Eligible Employee
shall, as far as practicable, be in the same proportions thereto.
<PAGE> 22
CIRCULARS AND NOTICES
8. The Trustees will send or make available to Participants copies of all
documents normally issued by Household International, Inc. or any successor
thereto and sent to the holders of Shares.
RIGHTS ISSUE
9.1 Whenever any rights to acquire New Shares are granted by a company to the
holders of any class of shares of which some are Scheme Shares each Participant
shall be notified by the Trustees of the rights relating to his Scheme Shares
and he may instruct the Trustees to do one or more of the following:
(A) subject to the provision by him of any necessary funds, to take up or sell
all or any of the rights or allow them to lapse;
(B) to sell rights nil paid to the extent necessary to enable the Trustees to
subscribe in full for the balance of any unsold rights,
which instructions may be particular or of general application and relate to
Scheme Shares appropriated before and after the date of the relevant rights
issue.
9.2 The Trustees shall act upon any such instruction received by them not less
than five Dealing Days before the expiry of the period allowed for the exercise
of any such rights. If any Participant has not prior to five Dealing Days
before the expiry of the period allowed for the exercise of any such rights
given instructions to the Trustees with regard thereto and provided any funds
necessary for the purpose, the Trustees shall allow such rights to lapse. The
Trustees shall deal with any Capital Receipt received in consequence of the
non-exercise or sale of any rights in accordance with Rule 14.2.
9.3 Any New Shares taken up by the Trustees on behalf of any Participant under
this Rule shall, subject to Rule 13, form part of the Participant's Scheme
Shares and shall be deemed to have been appropriated at the same time as the
Participant's Scheme Shares to which they relate.
9.4 Nothing in this Rule shall require the Trustees to act in any manner
whereby they would be involved in any liability unless indemnified to their
satisfaction by the Participant against such liability.
<PAGE> 23
CAPITALISATION ISSUES
10. Where a company allots any New Shares by way of capitalisation to the
Trustees in respect of any Participant's Scheme Shares, such New Shares shall,
subject to Rule 14.2, form part of that Participant's Scheme Shares and shall
be deemed to have been appropriated at the same time as the Participant's
Scheme Shares in respect of which they are allotted.
RECONSTRUCTION AND TAKEOVER
11.1 If by the applicable Release Date there is a Reconstruction or Takeover
affecting Scheme Shares, the Participants shall be notified of such event and
any Participant may give notice in writing to the Trustees instructing them on
the action to be taken (and, where appropriate, exercise any right to elect to
receive any particular form of consideration available thereunder) in respect
of any of his Scheme Shares.
11.2 If there is a Reconstruction or Takeover affecting Scheme Shares, the
consideration received thereunder shall (so far as it consists of cash or
securities which cannot be held under the Scheme) be treated as the proceeds of
a disposal under Rule 14.2 and (so far as it consists of New Shares) be held by
the Trustees as Scheme Shares subject to the Rules mutatis mutandis as if the
same were the Shares in respect of which they are issued, or which they
otherwise represent.
11.3 In the event of any Scheme Shares being compulsorily acquired under
Sections 428 to 430F of the Companies Act 1985, or if under any scheme of
arrangement sanctioned by the Court pursuant to Section 425 of the Companies
Act 1985, Scheme Shares are transferred to another company or cancelled for a
consideration consisting of cash and/or securities and/or shares, the
Participants concerned shall be entitled to receive notification thereof from
the Trustees as soon as practicable after such acquisition, transfer or
cancellation, and to give instructions to the Trustees in relation to such
consideration, and the provisions of Rules 11.1, 11.2 and 13 shall apply
mutatis mutandis so far as relevant.
SCRIP DIVIDENDS
12.1 This Rule applies where the holders of any class of shares of which some
are Scheme Shares are offered the right to elect to receive shares, credited as
fully paid in whole or in part, in lieu of a cash dividend. Within five days
or such other period as the Trustees may decide before the closing of the
offer, the Participant may:
(A) instruct the Trustees to elect to receive shares; or
<PAGE> 24
(B) instruct the Trustees to elect to receive cash,
which instructions may be of particular or of general application. Nothing
shall oblige the Trustees to notify Participants of their right to elect for
Shares or cash and in the absence of any such instruction, the Participant
shall be deemed to have elected for cash.
12.2 Any Shares taken up by the Trustees on behalf of any Participant under
this Rule 12 shall, subject to Rule 14.2, form part of the Participant's Scheme
Shares and shall be deemed to have been appropriated at the same time as the
Participant's Scheme Shares in respect of which they are offered.
12.3 In so far as any dividend consists of cash it shall be paid to the
relevant Participant by the Trustees in accordance with Clause 7 of the Deed.
FRACTIONAL ENTITLEMENTS
13.1 Where a company makes an offer or invitation conferring any rights upon
its members to acquire against payment, shares or additional securities in that
company, or where that company allots any New Shares or securities by way of
capitalisation, the Trustees shall allocate such rights, shares or securities
amongst the Participants concerned on a proportionate basis and, if such
allocation shall give rise to a fraction of a share or a security or a
transferable unit thereof (in this Rule UNIT), shall round such allocation down
to the next whole unit and the Trustees shall aggregate the fractions not
allocated and use their best endeavours to sell any rights or units which are
not allocated and distribute the net proceeds of sale (after deducting
therefrom any expenses of sale and any taxation which may be payable in respect
thereof) proportionally among the Participants whose allocation was rounded
down.
13.2 Where the Trustees having received New Shares which form part of a
Participant's Scheme Shares, allocate such New Shares to the different
appropriations of Scheme Shares to which they relate and, such allocation gives
rise to a fraction of a New Share, they shall, subject to the Taxes Act, round
such allocation up or down to the next whole unit as they, in their absolute
discretion, think fit.
DISPOSALS AND PAYMENTS
14.1 The Trustees shall not dispose of any Scheme Shares:
(a) prior to the expiry of the applicable Period of Retention in any
circumstances except in the event of a Reconstruction or Takeover;
<PAGE> 25
(b) after the expiry of the applicable Period of Retention but prior to the
applicable Release Date except at the written direction of a Participant;
or
(c) after the expiry of the applicable Period of Retention but prior to the
applicable Release Date except by sale for the best consideration in money
reasonably obtainable at the time of such sale.
14.2 Upon receipt of a sum of money or money's worth not consisting of Scheme
Shares being (or being part of) the proceeds of any disposal or Capital Receipt
in respect of any Scheme Shares, the Trustees shall (subject to compliance with
the provisions of the Taxes Act) account as soon as reasonably practicable to
the Participant for any balance remaining in their hands and relating to such
Scheme Shares by paying the same to the Participating Company (if any) by which
he is employed, thereby discharging the Trustees of their obligations to
Participants in relation to the receipt of such sums.
14.3 Any Participating Company to which the Trustees pay or account for any
part of any such sum as is referred to in Rule 14.2 shall (subject to
compliance with the Taxes Act) forthwith account to the Participant for the
balance remaining in its hands.
TRANSFER OF LEGAL TITLE
15. After the Release Date if the Participant so requests the Trustees shall
transfer the legal title to any Scheme Shares held for such Participant into
the name of the relevant Participant (or any person nominated by him in
writing) and in the absence of any such request the Trustees shall continue to
hold the Scheme Shares as nominee for the Participant on the terms set out in
rule 16 below until such time as the Participant requests the Trustees to
transfer such legal title to him PROVIDED THAT:
(a) the Trustees shall on the Participant's death or on his ceasing to be a
director or employee of a Participating Company for any reason, transfer
the legal title to any such Scheme Shares into the name of the relevant
Participant or his personal representatives (as appropriate); and
(b) the Trustees may in its absolute discretion at any time decide that it
will cease to hold any Scheme Shares as nominee in which case the Trustees
shall give notice of this decision to Participants and invite
Participants to indicate whether they wish their Scheme Shares to be sold
by the Trustees on their behalf and the sale proceeds paid to them or for
the legal title to their Scheme Shares to be transferred to them. In the
absence of any direction within 60 days of the date of the notice the
Trustees shall transfer the legal title to any such Scheme Shares into the
name of the relevant Participant.
<PAGE> 26
TERMS OF NOMINEE HOLDING
16. For as long as the Trustees hold Shares as nominee, such Shares to be known
as NOMINEE SHARES, for a Participant pursuant to rule 15 above the Trustees
shall:
(a) make available to such Participants copies of all documents normally
issued by Household International, Inc. or any sucessor thereto and sent
to the holders of Shares;
(b) notify and seek instructions from such Participants:
(i) whenever any rights to acquire new shares are granted
by a company to the holders of any class of shares of which some
are Nominee Shares;
(ii) in the event of a Reconstruction or Takeover affecting Nominee
Shares;
(iii) in the event of any Nominee Shares being compulsorily
acquired under Sections 428 to 430F of the Companies Act 1985,
or if under any scheme of arrangement sanctioned by the Court
pursuant to Section 425 of the Companies Act 1985, Nominee Shares
are transferred to another company or cancelled for a
consideration consisting of cash and/or shares;
(c) hold any new shares allotted by a company by way of capitalisation to the
Trustees in respect of Nominee Shares;
(d) where the holder of any class of shares of which some are Nominee Shares
is offered the right to elect to receive shares, credited as fully paid in
whole or in part, in lieu of a cash dividend, decide whether such
Participants may instruct the Trustees to elect to receive cash;
(e) pay to such Participants any dividends received by the Trustees in
respect of such Nominee Shares in accordance with Clause 7.
STAMP DUTY
17. Any stamp duty or other expenses involved in any transfer of Shares by the
Trustees shall be payable:
(a) in the case of a transfer into the name of the Participant concerned, by
the Trustees (and reimbursed by each Participating Company in proportion
to the number of their respective employees and directors concerned in
such transfer); and
<PAGE> 27
(b) in any other case, by the transferee concerned.
NOTICES
18.1 The Trustees shall not be bound to act upon any instructions given by or
on behalf of a Participant or any person in whom the beneficial interest in his
Scheme Shares is for the time being vested pursuant to the Scheme unless such
instructions are received by the Trustees in writing signed by the relevant
Participant or person.
18.2 Any notice which the Trustees are required or may desire to give to any
Eligible Employee or Participant pursuant to the Scheme shall be in writing and
sufficiently given if delivered to him personally or sent first class through
the post pre-paid addressed to the Eligible Employee or Participant at his
address last known to the Trustees (including any address supplied by the
relevant Participating Company or any Subsidiary as being his address) or if
sent through the appropriate Participating Company's internal postal service,
and if so sent by post shall be deemed to have been duly given on the third day
following the date the notice is posted and if sent through the appropriate
Participating Company's internal postal service shall be deemed to have been
duly given 3 working days after the date of posting. Any document so sent to a
Participant shall be deemed to have been duly delivered notwithstanding that he
be then deceased (and whether or not the Trustees have notice of his death)
except where his personal representatives have established their title to the
satisfaction of the Trustees and supplied to the Trustees an address to which
documents are to be sent.
INFORMATION
19. The Trustees shall maintain such records as may be necessary to comply with
the Taxes Act, and shall at all times and from time to time give to each
Participant such information as shall be in their possession to enable him to
determine and quantify any liability he may have to income tax under Schedule E
by reason of any Relevant Event.
DISPUTES
20.1 The decision of the Board in any dispute or question affecting any
Eligible Employee or Participant under the Scheme shall be final and conclusive
subject to the concurrence of the Auditors whenever required under the
provisions hereof.
20.2 In any matter in which they are required to act hereunder the Auditors
shall be deemed to be acting as experts and not as arbitrators and the
Arbitration Acts 1950 to 1979 shall not apply hereto.
<PAGE> 28
TERMS OF EMPLOYMENT
21.1 Nothing in this Deed or the Scheme shall in any way be construed as
imposing upon a Participating Company a contractual obligation as between the
Participating Company and an employee to contribute or to continue to
contribute to the Scheme.
21.2 In no circumstances shall any person who has ceased to be an employee of
HFC, any Subsidiary or any Associated Company by reason of dismissal or
otherwise howsoever or who is under notice of termination of his employment be
entitled to claim as against any Participating Company, Subsidiary, Associated
Company or the Trustees any compensation for or in respect of any consequential
loss he may suffer by reason of the operation of the terms of the Scheme or of
the provisions of the Taxes Act.
<PAGE> 29
SCHEDULE 2
MATCHING OFFER
1.1 The provisions of this Schedule 2 shall apply where the Board resolves that
Scheme Shares are to be appropriated under the Scheme either wholly or in part
in accordance with Rule 7.1(e) of Schedule 1 (that is by reference to the
number of Contributed Shares acquired by or on behalf of an Eligible Employee)
in the manner hereinafter provided and any offer made to Eligible Employees on
this basis is herein referred to as a MATCHING OFFER.
1.2 HFC shall issue a letter of invitation for the Matching Offer to each
Eligible Employee which shall invite an Eligible Employee to pay monies to the
Trustees within the limits contained in Rules 1.3 and 1.4 below to apply in the
acquisition of Shares to be held as Contributed Shares and in consideration of
which the Trustees shall appropriate to such Eligible Employees who remain
Eligible Employees up to the Appropriation Day a fixed number of Shares to be
held as Scheme Shares under the Scheme in such proportions as the Board shall
determine but which shall be at least one for every Contributed Share.
1.3 The minimum number of Shares which an Eligible Employee must acquire in the
Matching Offer to be held as Contributed Shares shall be such maximum whole
number as the Trustees may acquire on the Appropriation Day having an aggregate
acquisition or subscription price not exceeding Pounds 100.
1.4 The maximum number of Shares which an Eligible Employee may acquire in the
Matching Offer to be held as Contributed Shares shall be such whole number as
the Trustees may acquire on the Appropriation Day having an aggregate
acquisition or subscription price equal to the amount determined pursuant to
Rule 7.1 of Schedule 1.
1.5 The price at which an Eligible Employee shall be invited to acquire
Shares in the Matching Offer shall be the higher of:
(a) such price as is equal to the average total acquisition
price paid by the Trustees in acquiring such Shares for such
Eligible Employee; and
<PAGE> 30
(b) if the Shares are to be subscribed, the nominal value of
a Share,
expressed as a Sterling amount by reference to the Sterling/US Dollar exchange
rate applying on the day of acquisition, or if the Trustees acquire Shares on
more than one day, the average of such rates applying on the relevant days.
1.6 Any money paid by an Eligible Employee to the Trustees which is
insufficient to acquire a whole Share shall be paid back to the Eligible
Employee as soon as reasonably practicable.
1.7 The Eligible Employee shall be required, as a term of the Matching Offer,
to:
(a) consent to the Shares acquired being held by the Trustees (or such other
person as may be nominated by the Board) as Contributed Shares subject to
the terms in 2 below;
(b) complete and return to HFC, (or such other person as may be nominated by
the Board) by the specified closing date for applications, which shall be
prior to the relevant Appropriation Day, a contract of participation with
HFC (in such form as the Board shall prescribe from time to time).
TERMS ON WHICH CONTRIBUTED SHARES HELD
2. The terms upon which Contributed Shares are held will be as follows:
(a) the Contributed Shares shall be registered in the name of the First
Trustee (or such other person as may be nominated by the Board);
(b) the Trustees shall hold the Contributed Shares for the period determined
in accordance with Clause 8.3 of the Deed;
(c) during the period referred to in paragraph (b), the Participant may not
sell or dispose of any interest in the Contributed Shares or any of them
whether by way of sale, gift, security or otherwise, except in the event
of a Reconstruction or Takeover affecting such Shares;
(d) following the end of the period referred to in paragraph (b), the
Trustees shall if a Participant so requests, transfer the ownership of a
Participant's Contributed Shares into his name or the name of any person
in whom the beneficial interest in those Contributed Shares is vested, or
shall deliver to him or to any such other person the share certificates
relating to his Contributed Shares and in the absence
<PAGE> 31
of any such request the Trustee shall continue to hold the Contributed
Shares as nominee for such Participant;
(e) the provisions contained in Rules 6, 9 to 13 (inclusive), 15, 16 and 18
to 21 (inclusive) of the Scheme shall apply mutatis mutandis so far as
applicable.
3. Stamp duty payable on any instruments of transfer entered into in
connection with the Matching Offer shall be borne by each Participating Company
in proportion to the number of their respective employees and directors
concerned in such transfer.
<PAGE> 32
SCHEDULE 3
DEED OF ADHERENCE
THIS DEED is made this day of 19[ ]
BETWEEN:
HFC BANK PLC (the COMPANY) and HFC PENSION PLAN LIMITED and THE ROYAL BANK OF
SCOTLAND PLC (together the TRUSTEES) and [New Subsidiary] and is supplemental
to a Trust Deed (the TRUST DEED) of the HFC Profit Sharing Scheme (the SCHEME)
executed by the Company, HFC Bank plc and the Trustees on the [ ]
1997.
WHEREAS:
(1) [New Subsidiary] was incorporated on the day of 19[ ] and on
the day of 19[ ] became a Subsidiary of the Company.
(2) [New Subsidiary] wishes to become a Participating Company and to invite its
Eligible Employees to participate in the Scheme.
NOW THIS DEED WITNESSETH as follows:
(1) Terms and expressions used in this deed of adherence shall bear unless the
context otherwise requires the same meaning as in the Trust Deed.
(2) [New Subsidiary] agrees to become a Participating Company and to be bound
by the terms of the Trust Deed and Rules of the Scheme.
IN WITNESS whereof these presents have been entered into the day and year first
above written.
<TABLE>
<S> <C> <C>
THE COMMON SEAL OF )
[NEW SUBSIDIARY] )
was hereunto affixed in Execution of )
this Deed in the presence of )
Director
Secretary
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C>
THE COMMON SEAL OF )
HFC BANK PLC was hereunto affixed )
in Execution of this Deed in the )
presence of: )
Authorised Signatory
Authorised Signatory
THE COMMON SEAL OF )
HFC PENSION PLAN LIMITED )
was hereunto affixed in Execution )
of this Deed in the presence of: )
Director
Secretary
SIGNED AS A DEED for and on behalf )
of THE ROYAL BANK OF )
SCOTLAND PLC )
at )
on )
by )
</TABLE>
Attorney of and Commissioner for us, the said The Royal Bank of Scotland plc,
having full power to grant these presents on our behalf, conform to Power of
Attorney inter alia in his favour dated 28th May 1997 and registered in the
Books of Council and Session on 28 May 1997, before the following witness
.................................................... COMMISSIONER
.................................................... WITNESS
<PAGE> 34
<TABLE>
<S> <C> <C>
THE COMMON SEAL of HFC )
BANK PLC was hereunto affixed ) COMMON SEAL
in Execution of this Deed in the )
presence of: )
AR HILL
CJ RIVERS
THE COMMON SEAL of HFC )
PENSION PLAN LIMITED was ) COMMON SEAL
hereunto affixed in Execution of this )
Deed in the presence of: )
AS ORTON
CJ RIVERS
SIGNED AS A DEED for and on behalf )
of THE ROYAL BANK OF )
SCOTLAND PLC )
at Edinburgh )
on 27 August 1997 )
by Angus James Murray Mair )
</TABLE>
Attorney of and Commissioner for us, the said The Royal Bank of Scotland plc,
having full power to grant these presents on our behalf, conform to Power of
Attorney inter alia in his favour dated 28th May 1997 and registered in the
Books of Council and Session on 28 May 1997, before the following witness
............AJM MAIR............... COMMISSIONER
.............CM CLARK..................... WITNESS
