UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 205494
------------------------
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-10173
------------------------
HUNTINGDON LIFE SCIENCES GROUP plc
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ENGLAND AND WALES
(JURISDICTION OF INCORPORATION OR ORGANIZATION)
WOOLLEY ROAD, ALCONBURY, HUNTINGDON, PE17 5HS, CAMBRIDGESHIRE, ENGLAND
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: +44 1480 892000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
-------------------- ------------------------------
Ordinary Shares, par value 5 pence per share, New York Stock Exchange, Inc.
in the form of American Depositary Shares
represented by American Depositary Receipts
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at February 29, 2000 was approximately (pound)15,345,267.
Indicate the number of outstanding shares of each of the Registrant's classes of
common stock as of the latest practicable date
Ordinary Shares of 5 pence each as at February 29, 2000 291,010,294
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
PART I
1. Business ...........................................................2
2. Properties .........................................................9
3. Legal Proceedings .................................................10
4. Submission of Matters to a Vote of Security Holders................10
PART II
5. Market For Registrant's Common Equity and Related
Stockholder Matters................................................11
6. Selected Financial Data ...........................................12
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations .........................................13
7A. Quantative and Qualitative Disclosures About Market Risk...........18
8. Financial Statements and Supplementary Data .......................20
9. Changes in and disagreements with Accountants on Accounting
and Financial Disclosure......................................... 45
PART III
10. Directors and Executive Officers of the Registrant.................46
11. Executive Compensation ............................................47
12. Security Ownership of Certain Beneficial Owners and Management.....53
13. Certain Relationships and Related Transactions ....................54
PART IV
14. Exhibits, Financial Statements, Schedules and Reports
on Form 8-K........................................................55
<PAGE>
PART I
ITEM 1. BUSINESS
INTRODUCTION
Huntingdon Life Sciences Group plc (the "Company" or "Huntingdon") is one of the
world's leading Contract Research Organisations (CROs). The Company is the
second largest independent worldwide provider of pre-clinical and non-clinical
biological safety evaluation research services to most of the world's leading
pharmaceutical, biotechnology, agrochemical and industrial chemical companies.
65% of the Company's orders are in support of early stage development of
promising new pharmaceutical and biotech compounds. The purpose of this safety
evaluation is to identify risks to humans, animals or the environment, resulting
from the use or manufacture of a wide range of chemicals that are essential
components of these industries products. Huntingdon's services are designed to
meet the regulatory requirements of governments around the world.
The Company is based in the United Kingdom, with facilities in Huntingdon
(Cambridgeshire) and Eye (Suffolk), England, and the Princeton Research Centre
in New Jersey (USA).
GENERAL DEVELOPMENT OF THE BUSINESS
Huntingdon was originally incorporated in the UK in 1951 as a limited liability
company to provide contract research services to the UK pharmaceutical,
agrochemical and food industries. In 1964 it was acquired by the US company,
Becton Dickinson. Over the next 20 years it successfully established itself as a
leading CRO with business across a number of sectors and with a number of
leading pharmaceutical and agrochemical companies. In April 1983, the Company
was re-registered as a public limited company with the name "Huntingdon Research
Centre plc". In June 1985, the Company's name was changed from Huntingdon
Research Centre plc to Huntingdon International Holdings plc.
In 1988 the Company was floated on the London Stock Exchange and in early 1989
it obtained a listing on the New York Stock Exchange.
In order to diversify its activities, Huntingdon entered the engineering and
environmental services business in the 1980s through acquisition, primarily in
the US. Through HIH USA Inc and its subsidiary Huntingdon Engineering and
Environmental Services Inc. the Company provided construction-related
engineering services, environmental services, consultancy and testing in the
USA. This business grew so that by 1990 it was contributing 70% of total Company
revenues of (pound)104 million, but only half the operating profit.
In 1991 the Company began operating a subsidiary, Leicester Clinical Research
Centre Ltd. to conduct Phase I clinical trials, so providing a wide range of
biological and psychological assessment procedures involving healthy human
volunteers. A further diversification was the acquisition in 1991 of Travers
Morgan Limited. After acquisition the Company began to provide engineering
consultancy services outside the USA in the areas of civil and structural
engineering, consultation on the planning and development of transportation
systems, project management and environmental consultancy. This investment
proved to be unsuccessful and, in December 1994, the High Court of Justice,
Chancery Division, Companies Court granted Travers Morgan an administrative
order under the UK Insolvency Act 1986. Joint administrators were appointed to
Travers Morgan, as a result of which control passed from the Company, the
trading of Travers Morgan was isolated from the Company and the Group wrote off
its investment, providing (pound)11.6 million against the amounts receivable
from Travers Morgan Limited.
In 1995, the engineering and environmental services business, which by then was
operating at a loss, was also sold and the Company refocused on its life
sciences business. That year it acquired the toxicology business of APBI, which
comprised laboratories near Newcastle and Eye, Suffolk in the UK and Princeton,
USA for a total consideration of $43 million, including an agreed value of $4.5
million for the sale of the Leicester Clinical Research Unit. Immediately upon
acquisition the toxicology business of APBI in the UK was merged with that of
Huntingdon Research Centre Ltd and the name of that company changed to
Huntingdon Life Sciences Ltd. The US business acquired operates as Huntingdon
Life Sciences Inc.
The Company's name was subsequently changed in April 1997 to Huntingdon Life
Sciences Group plc. At this time the Company purchased a small specialist
research centre in Wilmslow, Cheshire which included a marmoset breeding colony.
Huntingdon subsequently decided to close that facility, with all the work
shifting to its Huntingdon and Eye facilities. The site was sold on September 1,
1999.
In the first half of 1997 allegations were made relating to animal care and Good
Laboratory Practice (GLP) against the Company's operating subsidiaries in the UK
and US. Those allegations and the UK Government's subsequent statement in the
House of Commons in July 1997 about its investigation into those allegations
caused the cancellation of booked orders and a decline in new orders.
Significant trading losses and cash outflows resulted during the period from mid
1997 onwards For further details of these allegations see Government Supervision
of Regulations - 1997 Allegations relating to animal care and GLP, below.
During 1998 poor trading results put a heavy strain on cash resources, utilising
Huntingdon's available facilities. Given the medium to long term element of many
of Huntingdon's activities and the reluctance of clients to place new work until
Huntingdon's finances were stabilised, Huntingdon required a substantial
injection of finance to both initially restore confidence and then to fund
operations during the period until Huntingdon returned to profitability.
On September 2, 1998 a group of new investors subscribed (pound)15 million for
120 million ordinary shares whilst existing shareholders and institutional
investors took up a further 57 million shares, contributing (pound)7.1 million.
After expenses of (pound)1.7 million, the issue of shares raised (pound)20.4
million. On the same date Huntingdon's bankers agreed to confirm and fix
Huntingdon's facilities at (pound)24.5 million until August 31, 2000 and this
amount was fully drawn down.
Since the involvement of FHP, a new management team has been appointed, led by
Brian Cass, previously of Covance, which the Company believes has successfully
addressed many of the Company's past difficulties. Relationships with customers
have been restored, a substantial cost and headcount reduction program has been
effected and sales have started to grow again at an encouraging rate.
As Huntingdon continues to build on these fundamentals, the Company has the
following strategy and goals:
o To be appreciated as the listening, understanding and reliable partner in
creative compound development and safety assessment; to be the first choice
for the industries we serve.
o To provide our employees with the opportunity for individual development in
a caring, rewarding and safe working environment.
o To be recognised positively in the local communities in which we operate.
o To grow to significant profitability and improved return on investment
for our shareholders.
DESCRIPTION OF BUSINESS
Huntingdon provides pre-clinical and non-clinical biological safety evaluation
research services to most of the world's leading pharmaceutical, biotechnology,
agrochemical and industrial chemical companies. The purpose of this safety
evaluation is to identify risks to humans, animals or the environment resulting
from the use or manufacture of a wide range of chemicals which are essential
components of our clients' products. The Company's services are designed to meet
the regulatory requirements of governments around the world.
It is the Company's goal to become the number one service provider in these
markets, achieving this through a mixture of organic growth and a small number
of strategic acquisitions. In doing so the Company will be well positioned to
benefit from strong drug pipelines in the pharmaceutical industry, the growing
amount of legislation concerning the safety and environmental impact of
agrochemicals and industrial chemicals and a growing trend towards outsourcing
as clients focus more internal resources on research in the search for new
compounds.
Huntingdon's sales and marketing functions are specifically focussed on two main
groups, pharmaceutical and non-pharmaceutical customers. As much of the research
activity conducted for these two customer groups is similar, the company
believes it is appropriate, operationally, to view this as one business.
Pharmaceuticals and Biopharmaceuticals
The Pharmaceutical research and development pathway is shown below:
DRUG DISCOVERY DRUG DEVELOPMENT MARKETING
---------------------
NON-CLINICAL CLINICAL
Chemical Synthesis Pre-Clinical Phase I Phase II Phase III Phase IV
Toxicology Safety Efficacy Long Term Post
efficacy marketing
Pharmacology surveillance
Drug Metabolism
Pharmacokinetics
LONG TERM SAFETY STUDIES
Huntingdon performs non-clinical testing in support of the drug development
process. This primarily consists of pre-clinical outsourcing from the
pharmaceutical industry, as well as further longer term non-clinical safety
testing that is performed in parallel to human clinical testing (such as
carcinogenicity studies and safety studies relating to reproductive
implications). Approximately two thirds of the Company's orders are derived from
this source. Huntingdon views its non-clinical market as extending to "proof of
concept" in man (Phase 2A) and to analytical chemistry support for clinical
trials. During 1999 the Company entered collaborative relationships with a
number of Phase I clinical trial units and has recently started offering
centralised clinical laboratory services in support of clinical trials.
The outsourced market for the large clinical trials (Phase 3 and beyond) is
expanding rapidly, but the Company believes that the margins are less attractive
and it is subject to a greater degree of volatility driven by the size of
individual contracts. While the Company does not preclude entering this market,
it is a very different business and one in which a number of major companies are
already firmly established.
Within the Company's definition of "non-clinical" there are opportunities to
reverse into late research services in lead optimisation for the pharmaceutical
industry as well as to provide additional support services for the rapidly
growing Biotechnology sector.
o Market growth
It is estimated that the pharmaceutical industry annual research and development
(R & D) spend is between $35 billion and $40 billion and is growing at around
10% per annum. Around $20 billion is focused on development and, of this, 15% is
expenditure in Huntingdon's core business area of pre-clinical development.
Huntingdon believes that approximately 30% of this is outsourced which means
that the Company is today competing in approximately a $1 billion market.
The market for these services is growing as a result of strong new drug
pipelines:
The Company estimates that new drug discovery is growing at 8 - 10% per
annum, fueled by new technologies and strong profits. New techniques
like combinatorial chemistry and high throughput screening are
dramatically increasing the efficiency and effectiveness of the
discovery process for new molecules.
The need to replace earnings from drugs coming off patent is driving
increases in the number of drugs being put into development.
It is estimated there has been a 50% increase in the numbers of
projects in the R & D pipeline versus five years ago.
There is also a growing trend towards the outsourcing of development work as
clients focus more internal resource on research in the search for new lead
compounds.
The biotechnology industry has become a significant source of business
for companies like Huntingdon. The number of drugs produced by the
biotechnology industry which require US Food and Drug Administration
(FDA) approval has grown substantially over the past decade. Many
biotechnology companies have strategically chosen to outsource major
areas of R & D and utilise contract research organisations to perform
these services.
In addition the process of consolidation within the pharmaceutical
industry is also accelerating the move towards outsourcing. While there
is a short term negative impact from mergers with development pipelines
being rationalised and a focus on integration rather than development,
longer term resources are increasingly invested in in-house facilities
for discovery and lead optimisation rather than development and
regulatory safety evaluation. The outsourcing of development and safety
evaluation is Huntingdon's core business.
Therefore the overall market for outsourced services is estimated to be growing
at an annual rate of around 8 to 10%.
Non-Pharmaceuticals
Huntingdon has historically generated one third to one half of its orders from
safety and efficacy testing of compounds for the agrochemical, industrial
chemical, veterinary and food industries. The work involved bears many
similarities and often uses many of the same facilities, equipment, and
scientific disciplines to those employed in pre-clinical testing of
pharmaceutical compounds.
Huntingdon's business in these areas is again driven by governmental regulatory
requirements. The Company's services address safety concerns surrounding a
diverse range of products, spanning such areas as agricultural herbicides and
pesticides, medical devices, veterinary medicines, and chemicals used in the
manufacture of pharmaceutical intermediates, manufactured foodstuffs, and
household products. Huntingdon believes it is a clear market leader in programs
designed to assess the safety, environmental impact and efficiency of
agricultural chemicals as well as in programs to take new industrial chemicals
to market.
o Market Growth
It is estimated that the world-wide market for outsourced contract research from
these industries is around $300m. The growth in the non-pharmaceutical business
is driven both by the introduction of novel compounds and increasingly by
legislation concerning the safety and environmental impact of existing products.
The Company believes that many market segments included in this broad area of
business have the potential for substantial growth in coming years, as a result
of:
Recent introduction of new testing requirements for `high production
volume' (HPV) chemical products in the US, and similar programs in Europe
and Japan.
Increasing scrutiny of any compound which is used in the manufacture of
products to which members of the public, especially children, are
exposed, either infrequently or on a day-to-day basis (e.g. phthalates
used in the plastic of children's toys).
More stringent regulations affecting compounds which have the potential
to adversely effect the environment, e.g. biocides and endocrine
disrupters.
Growth in concerns over food safety, e.g. additives and genetically
modified foods, and the introduction of `nutraceuticals'.
The requirement to register or re-register pesticides on lists 2 and 3 to
meet the European Directive 91/414/EEC. Huntingdon has unrivalled
experience with the chemicals which were included on list 1 of the
Directive.
Safety testing in these industries is also more likely to be outsourced as,
unlike the pharmaceutical industry, fewer companies have comprehensive internal
testing facilities. While overall R & D is growing at approximately 5%, we
believe that outsourcing could increase by up to 10% per annum over the next
five years.
COMPETITION
Competition in both the pharmaceutical and non pharmaceutical market segments
ranges from the in-house research and development divisions of large
pharmaceutical, agrochemical and industrial chemical companies who perform their
own safety assessments, to "full service" providers - contract research
organisations like Huntingdon who provide a full range of services to the
industries - and "niche" suppliers focussing on specific services or industries.
Huntingdon is the second largest independent worldwide provider of
pre/non-clinical safety testing services, behind Covance Inc. which has
estimated sales for 1998 of approximately $200 million in this area and total
revenues for all their business of $732 million.
ORDERS AND BACKLOG
The gradual return of client confidence following the refinancing in September
1998 gained momentum in 1999. This was reflected in the growth of orders which
increased by 17% from the previous year. The Company's pharmaceutical business
showed a particularly strong recovery, with orders increasing by 36% from the
1998 levels. However, 1999 was a relatively weak year for the non-pharmaceutical
businesses. The Company expects that there will be an increase in orders from
the non-pharmaceutical business in 2000, as the impact of new legislation starts
to feed through into orders.
The geographical split of orders is as follows:
% of Orders from each Geographic area
1999 1998
Europe 39 38
Far East 23 28
United States 38 34
----------- -----------
Total 100 100
----------- -----------
1999 saw a 30% increase in the Company's US business, mainly due to orders from
the pharmaceutical industry. The Princeton laboratory, in particular, is well
placed to pick up work from the US pharmaceutical industry situated on the East
Coast of the United States.
Total orders from the Far East declined both in percentage and real terms. There
were a number of reasons for this; the general economic weakness in the area,
particularly Japan; the uncertainties of the Japanese pharmaceutical market; and
the completion of a number of large development programs for agrochemical
clients. Notwithstanding this the Company's orders from the pharmaceutical
industry in Japan increased by 60%, another sign that we have regained client
confidence.
GOVERNMENT SUPERVISION OF OPERATIONS
Supervisory regimes
Since the services provided by Huntingdon are used to support pharmaceutical,
biotechnological, chemical or agrochemical product approval applications, its
laboratories are subject to both formal and informal inspections by appropriate
regulatory and supervisory authorities, as well as by representatives from
client companies. Huntingdon is regularly inspected by US, Japan and UK
governmental agencies because of the number and complexities of the studies it
undertakes. In 1979, the US Food and Drug Administration (FDA) promulgated the
GLP regulations, defining the standards under which biological safety
evaluations are to be conducted. Other governmental agencies such as the
Environmental Protection Agency (EPA), the Japanese Ministry Of Health and
Welfare, the Japanese Ministry of Agriculture, Forestry and Fisheries, and the
UK Department of Health, have introduced compliance monitoring programs with
similar GLP standards. Huntingdon has had over 30 such inspection visits and
audits since 1985.
Huntingdon's operations in the UK are regulated by the Animals (Scientific
Procedures) Act 1986. This legislation, administered by the UK Home Office,
provides for the control of scientific procedures carried out on living
vertebrate animals and regulation of the animals' environment. Personal licences
(Huntingdon has approximately 300 licensees) are issued by the UK Home Office to
personnel who are competent to perform regulated procedures and each program of
work must be authorised in advance by a Project Licensee. Premises where
procedures are carried out must also be formally designated by the UK Home
Office. Consultations and inspections are regularly undertaken in order to
ensure continued compliance with regulatory and legislative requirements.
Typically, Huntingdon has 18 such inspections annually.
Huntingdon's laboratory in the USA is subject to the United States Department of
Agriculture (USDA) Animal Welfare Regulations (Title 9, Code of Federal
Regulations, Subchapter A). The laboratory is regularly inspected by USDA
officials for compliance with these regulations. Compliance is assured through
an Institutional Animal Care and Use Committee, comprising staff from a broad
range of disciplines within Huntingdon and including external representation.
Furthermore, laboratories in the USA are expected by the USDA to be certified by
an independent and internationally recognised organisation, the Association for
Assessment and Accreditation of Laboratory Animal Care (AAALAC).
At each of its research centres, Huntingdon ensures the availability of suitably
experienced and qualified veterinary staff backed by a 24 hour call out system.
1997 Allegations relating to animal care and GLP
In the Spring of 1997 allegations of malpractice related to animal care and GLP
were made at both Huntingdon's UK and US operations. The UK allegations were
received by the regulatory authorities following the television broadcast of an
animal rights "undercover" film showing breaches of animal care procedures by
employees of the Company. Those in the US were submitted to the USDA and based
on reports received by PeTA, an animal rights activist group.
In July 1997 the UK Home Office Inspectors confirmed to their satisfaction that
whilst there was an incident of maltreatment, it was isolated. However, a
statement made by the Government caused many clients to conclude that there were
separate further allegations. The Home Office then established a number of
conditions, which Huntingdon had to comply with by the end of November. On
September 29, 1997, the Home Office stated that the Company had demonstrated
full compliance with the conditions and that they were fully satisfied.
In the US the USDA undertook two inspections during the summer of 1997 and one
in February 1998, these followed their annual inspection in April and an
intensive FDA inspection in February - both of which were satisfactory. In
December 1997 Huntingdon announced the receipt of a settlement agreement as a
Court Order in which PeTA agreed to give up all of its campaign against
Huntingdon.. The AAALAC inspected the site and unanimously endorsed its
continued accreditation. In 1998 the USDA investigation was concluded and did
not include any concessions of violations by Huntingdon. In December 1998 the
USDA conducted its annual routine inspection of the laboratories and concluded
that they were in full compliance with all aspects of the Department's
Regulations.
COMPLIANCE WITH ENVIRONMENTAL REGULATIONS
Whilst Huntingdon is obliged in the conduct of its business to comply with
certain environmental regulations, compliance with such regulations does not
impact significantly on its earnings or competitive position. Management
believes that its operations are currently in material compliance with all
applicable environmental regulations.
OTHER INFORMATION PERTAINING TO THE COMPANY
Human Resources
Huntingdon's most important resource is its people, they have created the
Company's knowledge base, its expertise and its excellent scientific reputation.
Scientists from the Company are represented at the highest levels in several UK
and international committees on safety and toxicity testing. Several staff
members are considered leaders in their respective fields, they frequently
lecture at scientific seminars and regularly publish articles in scientific
journals. This recognition has resulted in frequent assignments from clients for
consultation services. Some of Huntingdon's staff serve by invitation or
election on a number of scientific and industrial advisory panels and groups of
certain organisations and agencies such as the FDA, the EPA, the UK Department
of Health, and the World Health Organisation.
To ensure that this experience and expertise is transmitted throughout the
organisation, the Company maintains training programs. For example, Huntingdon's
Introductory and Advanced Graduate Training Programs train graduate staff in all
phases of toxicology. Also, in conjunction with the Institute of Animal
Technology, Huntingdon maintains what it believes to be one of the largest
animal technician training programs in the world. Huntingdon employs
approximately 300 licensed personnel.
The number of employees in the Group at December 31, 1999 and 1998 were as
follows:
Employees at December 31
1999 1998
UK ............ 1,090 1,189
USA............ 199 193
Japan.......... 10 10
----------- ----------
1,299 1,392
----------- ----------
In December, 1998 the Company announced a cost reduction program to align staff
resources with current revenues. The program which was completed in January 1999
rationalised service lines and capabilities across the two UK sites. See Item 8
- - Financial Statements and Supplementary Data 'Notes to the Consolidated
Financial Statements, Note 8'.
Animal Rights Activism
In parallel with an increase in "animal rights" activity internationally, during
November 1999 a new activist group was formed in the UK with Huntingdon as their
target. The group's broad aim is to end all animal research. This direct action
campaign has included all forms of protest including demonstrations outside the
Company's UK facilities and in local towns, distribution of propaganda material
and intimidation of some members of staff and shareholders.
To counter this "animal rights" campaign Huntingdon has adopted a strategy of
openness and direct co-operation with all parts of the media and the local
community. The Company has taken every opportunity to promote the value of the
work it does in helping its clients bring to market safe and effective products.
Members of the media, schools, local groups and national bodies have all visited
the company, toured the animal facilities and laboratories, and talked with
staff. All these visitors have all been impressed with Huntingdon's standards of
animal welfare and the professionalism of its staff.
Management and Labour Relations
Huntingdon's labour force is non-union and there has never been any disruption
of the business through strikes or other employee action. Huntingdon regularly
reviews its pay and benefits packages and believes that its labour relations,
policies and practices and management structure are appropriate to support its
competitive position.
Research and Development
In addition to experience gained through research activities performed for
clients, Huntingdon engages in research in order to respond to the changing
needs of clients and to maintain competitiveness within the industries in which
it operates. Most of the research undertaken, however, is an inherent part of
the research carried out on behalf of clients in completing studies and as such
it is not identified separately.
Know-how and Patents
Huntingdon believes that its proprietary know-how plays an important role in the
success of its business. Where Huntingdon considers it appropriate, steps are
taken to protect its know-how through confidentiality agreements and protection
through registration of title or use. However Huntingdon has no patents,
trade-marks, licenses, franchises or concessions which are material and upon
which any of the services offered is dependent.
Quality Assurance
Huntingdon maintains extensive quality assurance programs, designed to ensure
that all testing programs meet client requirements, as well as all relevant
codes, standards and regulations. Based on a Master Schedule, periodic
inspections are conducted as testing programs are performed to assure adherence
to project specifications or protocols and final reports are extensively
inspected to ensure consistency with data collected. Huntingdon's quality
assurance programs are controlled by a formally constituted Quality Board, a
Quality Monitoring Committee and Quality Groups.
Financial information about geographic areas
See Financial Statements
Available Information
Huntingdon files annual, quarterly and current reports and other information
with the SEC (including an Annual Report on Form 20-F for the Fiscal Year ended
December 31, 1998). You may read and copy any of these reports, statements or
other information at the SEC's Internet site (http:/www.sec.gov) or at the SEC's
public reference rooms (450 Fifth Street, N.W., Washington, DC 20549). You can
request copies of those documents, upon payment of a duplicating fee, by writing
to the SEC.
ITEM 2. PROPERTIES
Huntingdon's head office is situated within the research centre at Huntingdon.
Huntingdon believes that its facilities, described below, are adequate for its
operations and that suitable additional space will be available when needed.
The following table shows the location of the facilities of Huntingdon,
approximate size and the principal activities conducted at such facilities each
of which is owned by the Company.
<TABLE>
<CAPTION>
Location Laboratories Size Principal Activities
and Offices
<S> <C> <C> <C>
Huntingdon, England 612,000 sq.ft. 74 acres Laboratories, animal accommodation and
offices
Near Princeton, NJ, USA 180,000 sq.ft. 53.5 acres Laboratories, animal accommodation and offices
Near Diss, England 250,000 sq.ft. 28 acres Laboratories, animal accommodation and
offices
</TABLE>
The Company's Wilmslow Research Centre, the principal functions of which were
laboratories, animal accommodation and offices, was sold on September 1, 1999.
ITEM 3. LEGAL PROCEEDINGS
Huntingdon is party to certain legal actions arising out of the normal course of
its business. In management's opinion, none of these actions will have a
material effect on Huntingdon's operations or financial condition. No form of
proceedings has been brought, instigated or is known to be contemplated against
Huntingdon by any governmental agency.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Ordinary Shares are listed on the London Stock Exchange Ltd under
the Stock Exchange Automated Quotation symbol "HTD." American Depositary Shares
"ADS"s, each of which evidences five Ordinary Shares and which in turn are
evidenced by American Depositary Receipts "ADR"s, are listed on the New York
Stock Exchange, Inc. ("NYSE") also under the symbol "HTD".
The Bank of New York is the depositary for the Ordinary Shares represented by
ADSs. As at February 29, 2000, there were 168 recorded holders of ADSs. It is
believed that, at such date, 62,336,440 of the Company's total issued share
capital of 291,010,294 Ordinary Shares were represented by 12,467,288 ADSs. The
remaining Ordinary Shares were, as at such date, held in the form of Ordinary
Shares for which there were 2,207 recorded holders.
The high and low quarterly sales prices (in pounds sterling) of the Company's
Ordinary Shares on the London Stock Exchange from January 1, 1998 to December
31, 1999 were as follows:
HIGH SALES LOW SALES
QUARTER ENDED PRICE PRICE
- -------------
--------------- ------------
(pound) (pound)
March 31, 1998............................... 0.465 0.425
June 30, 1998................................ 0.43 0.175
September 30, 1998........................... 0.20 0.1275
December 31, 1998............................ 0.135 0.105
March 31, 1999............................... 0.215 0.11
June 30, 1999................................ 0.195 0.1875
September 30, 1999........................... 0.1925 0.175
December 31, 1999............................ 0.175 0.105
The high and low quarterly sales prices (in US dollars) of the Company's ADSs,
as evidenced by ADRs, on the NYSE from January 1, 1998 to December 31, 1999 were
as follows:
HIGH SALES LOW SALES
QUARTER ENDED PRICE PRICE
- -------------
------------- -----------
$ $
March 31, 1998............................... 3.9375 3.4375
June 30, 1998................................ 3.75 1.6250
September 30, 1998........................... 1.6875 0.9375
December 31, 1998............................ 1.4375 0.8125
March 31, 1999............................... 2.19 1.13
June 30, 1999................................ 1.88 1.25
September 30, 1999........................... 1.63 0.88
December 31, 1999............................ 1.38 0.81
On February 29, 2000, the mid-market closing price of Huntingdon's Ordinary
Shares was(pound)0.08 and was $0.69 per ADR.
The Board does not expect to declare or pay cash dividends on Huntingdon's
Ordinary Shares in the near future. The Board of Directors will determine the
extent to which legally available funds will be used to pay dividends. In making
decisions regarding dividends, the Board will exercise its business judgment and
will take into account such matters as results of operations and financial
condition and any then-existing or proposed commitments for the use of available
funds.
ITEM 6. SELECTED FINANCIAL DATA
The following selected consolidated statement of operations and operating data
for the years ended December 31, 1999, 1998, 1997 and 1996 the three months
ended December 31, 1995 and the twelve months ended September 30, 1995 and the
consolidated balance sheet data as of December 31, 1995 through 1999 were
derived from Huntingdon's audited consolidated financial statements and the
related notes included in this Annual Report on Form 10-K beginning on page 23.
The Company reports primarily in UK GAAP as it is incorporated in the UK and the
majority of its operations and assets are based in the UK. The following
financial information has been prepared under the general accepted accounting
principles of the United States of America.
<TABLE>
<CAPTION>
12 Months Ended 3 Months Ended 12 Months Ended
December 31 December 31 September 30
------------- ------------- ------------ ------------- ------------------- --------------------
1999 1998 1997 1996 1995 1995
(AMOUNTS IN STERLING THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA
Revenues 58,215 52,616 63,689 73,564 14,285 81,877
Net (loss)/income (4,095) (24,437) (2,882) 7,871 (3,001) (31,538)
Operating (loss)/profit (1,821) (28,234) (5,065) 11,799 1,397 7,196
(Loss)/earnings per share - (pound)(0.014)(pound)(0.142)(pound)(0.026) (pound)0.073 (pound)(0.028) (pound)(0.316)
basic (A)
</TABLE>
<TABLE>
<CAPTION>
As at December 31
------------- ------------- ------------- ------------- ------------
1999 1998 1997 1996 1995
(AMOUNTS IN STERLING THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET
Total Assets 98,635 110,137 112,461 108,924 103,771
Long-term debt 31,023 54,688 33,691 42,654 50,377
Shareholders' equity 9,216 13,311 17,362 14,586 6,601
</TABLE>
(A) Based upon an average of 291,010,294 (1998: 172,199,772;
1997: 112,935,450; 1996: 108,492,218; 1995: 99,865,393)
Ordinary Shares outstanding.
(B) Significant changes from 1996 to 1997 are explained in Item 1
(C) The Company's year end was changed from September to December in 1995
(D) See Item 7 for information relating to exchange rates.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
You should read the following together with the consolidated financial
statements and the related notes included in this Annual Report on Form 10-k
beginning on page 22. Certain statements in this section are "forward-looking
statements." You should read the information under "Forward-Looking Statements"
later in this section for special information about our presentation of
forward-looking information.
Huntingdon is a leading CRO which provides an extensive range of pre-clinical
and non-clinical services to the pharmaceutical, agrochemical and industrial
chemical industries. The Company provides those services under contracts which
may range from one day to three years. Income from these contracts is recognised
on the basis of work done and variable costs are matched with such income.
Contracts are generally terminable upon notice by the client with the client
being responsible for reimbursing Huntingdon for the value of work done to the
date of cancellation plus the value of work required to wind down a study on an
orderly basis.
The Company's business is characterised by high fixed costs, in particular staff
and facility related costs. Such a high proportion creates favourable conditions
for the Company as excess capacity is utilised but, during periods of declining
revenue, careful planning is required to reduce costs without impairing revenue
generating activities.
RESULTS OF OPERATIONS
12 months ended December 31 1999 compared with the 12 months ended December 31
1998.
Revenues in the twelve months ended December 31, 1999 were (pound)58.2 million,
an increase of 11% on revenues of (pound)52.6 million for the twelve months
ended December 31, 1998. The recovery in the volume and value of orders placed
following the refinancing in September 1998, noted in the final quarter of 1998,
continued throughout 1999.
Cost of sales fell by 9% to (pound)51.5 million for the twelve months ended
December 31, 1999 from (pound)56.7 million for the twelve months ended December
31, 1998 despite the increase in revenues. Huntingdon's operating capacity was
reduced throughout 1998 through natural attrition and the closure of the
Wilmslow Research Centre. In addition a cost reduction program was announced by
new management in December 1998. This was designed to align operations with
current sales levels and has produced targeted savings of (pound)6 million per
year.
Selling and administrative expenses fell by 2% to (pound)9.0 million for the
twelve months ended December 31, 1999 from (pound)9.2 million in the twelve
months ended December 31, 1998, due to lower commission expenses.
Other operating income in the twelve months ended December 31, 1999 comprised a
profit of (pound)1.8 million on the sale of the Wilmslow Research Centre, offset
by a loss of (pound)1.3 million to write off assets that are not Year 2000
compliant. In the twelve months ended December 31, 1998 other operating expenses
were (pound)14.9 million. For further detail see - "12 months ended December 31,
1998 compared with the 12 months ended 31 December 1997".
Net interest expense fell by 29% to (pound)3.9 million for the twelve months
ended December 31, 1999 from (pound)5.5 million in the twelve months ended
December 31, 1998. Interest expense in 1998 included (pound)1.2 million relating
to the review and renewal of borrowing facilities.
The unrealised loss on exchange of (pound)0.7 million arose on net liabilities
denominated in US dollars (primarily the Convertible Capital Bonds of $50
million) with the weakening of sterling against the dollar. In the twelve months
to December 31, 1998 sterling strengthened against the dollar resulting in a
(pound)0.2 million gain on exchange.
Taxation relief on losses for the twelve months ended December 31, 1999 was
(pound)2.3 million representing relief at 36% compared to (pound)9.0 million
representing relief at 27% for the twelve months ended December 31, 1998. The
difference in effective tax rates is due to a combination of exchange losses not
taxable, changes in tax rates and the effect of non-taxation of other operating
income/expense.
The overall net loss for the twelve months ended December 31, 1999 was
(pound)4.1 million compared to a loss of (pound)24.4 million in the twelve
months ended December 31, 1998. The 1999 loss per share was (pound)0.014,
compared to a loss per share of (pound)0.142 last year on shares in issue of
291,010,294 (1998, 172,199,772).
12 months ended December 31, 1998 compared with the 12 months ended December 31,
1997.
Beginning mid 1997, orders and backlog declined sharply following the
allegations of malpractice and mistreatment of animals. This continued to have
an impact in 1998, but by the end of the year, after the refinancing noted
below, client confidence began to return and a modest increase in order volume
was being experienced. Although full year 1998 new orders were 3% lower than
1997, the year-end backlog was up 7% from 1997 and 12% ahead of the August 1998
level.
The revenue decline in 1998 was more dramatic than the fall in orders due to the
long term nature of many of the contracts under which Huntingdon does business,
and reflected the steep reduction in orders in 1997. Revenues at (pound)52.6
million in 1998 were 17% down from 1997 revenue of (pound)63.7 million. The
Company's operating capacity, which had increased modestly in 1997 before the
full impact of the order rate decline was felt, was reduced throughout the year
through natural attrition and the closure of the Wilmslow Research Centre.
However, new management believed that further reductions were appropriate to
align staffing with the reduction in revenues which the Company had experienced,
and in December 1998 a cost reduction program was announced. This included the
elimination of approximately 150 positions and the rationalisation of
capabilities within the UK. This program is intended to reduce the total cost
base by approximately (pound)6 million per annum.
Overall operating costs (before other operating expenses) in 1998 were up
(pound)0.7m to (pound)65.9m (1% up on 1997).
Other operating expenses during the year were(pound)14.9 million
(1997:(pound)3.5 million). These arose from:
(i) Closure of the Company 's UK site at Wilmslow and write down of related
assets. Redundancy and related costs amount to (pound)0.4 million and asset
write down (pound)2.9 million.
(ii)The December 1998 cost reduction program designed to rationalise
capabilities in the UK. The cost of this program is (pound)3.4 million
including asset write offs of (pound)0.5 million.
(iii) The write off of the unamortised balance of the goodwill arising on the
acquisition of businesses in 1995 of (pound)7.3 million. Following the
decline in revenues and the successful integration of the businesses, this
no longer has any intrinsic value.
(iv) A review of asset values in the UK resulting in accelerated depreciation
of(pound)0.9million.
Net interest expense rose by (pound)1.9 million (51%) to (pound)5.5 million in
1998. In part this arose from the increase in net bank debt during 1997 and a
further increase in debt in the first eight months of 1998. (At March 31, 1997
net bank debt was (pound)13.5 million and peaked in August 1998 at approximately
(pound)25 million). In addition, the need to review the facility in February
1998 and August 1998, coupled with the complete renegotiation of the facility in
September 1998, led to charges of (pound)1.2 million in respect of the facility
during 1998 (1997: (pound)0.1 million).
Taxation relief on losses at (pound)9.0 million represent relief at 27% versus
the UK statutory rate of 31%. This reduction arises primarily from the lack of
relief on the write off of goodwill.
Overall the net loss at (pound)24.4 million is (pound)21.5 million higher than
the net loss of (pound)2.9 million reported in 1997. Net loss per share has
risen from (pound)0.026 for 1997 to (pound)0.142 for 1998.
LIQUIDITY & CAPITAL RESOURCES
During the twelve months ended December 31, 1999 funds absorbed were (pound)8.8
million, which includes the repayment of short term borrowings of (pound)0.8
million, reducing cash in hand and on short term deposit from (pound)14.1
million at December 31, 1998 to (pound)5.3 million at December 1, 1999. The
funds were utilised as follows:
1999
(pound)m
Operating loss (1) (2.3)
Depreciation 5.9
Cost reduction program (2.1)
Working capital movements (1.6)
Interest (3.8)
Proceeds from sale of Wilmslow 4.2
Capital expenditure (3.0)
Loan repayments (6.1)
---------------
8.8
---------------
(1) Before other operating income of(pound)0.5 million
During 1998 poor trading results put a heavy strain on cash resources, utilising
Huntingdon's available facilities. Given the medium to long term element of many
of Huntingdon's activities and the reluctance of clients to place new work until
Huntingdon's finances were stabilised, Huntingdon required a substantial
injection of finance to both initially restore confidence and then to fund
operations during the period until Huntingdon returned to profitability.
On September 2, 1998 a group of new investors subscribed (pound)15 million for
120 million ordinary shares whilst existing shareholders and institutional
investors took up a further 57 million shares, contributing (pound)7.1 million.
After expenses of (pound)1.7 million, the issue of shares raised (pound)20.4
million. On the same date Huntingdon's bankers agreed to confirm and fix
Huntingdon's facilities at (pound)24.5 million until August 31, 2000 and this
amount was fully drawn down.
On September 1, 1999 the sale of the Wilmslow Research Centre was completed.
Part of the proceeds from this site ((pound)1.9 million) were used to repay bank
debt and the facility was reduced accordingly. Interest is payable in quarterly
breaks at "LIBOR" plus 1.75% per annum in respect of drawings up to
(pound)19,500,000 and LIBOR plus 2% in respect of drawings over
(pound)19,500,000. The interest rate payable at December 31,1999 is 7.83% on
(pound)19,500,000 and 8.08% on (pound)3,086,000.
As this facility is confirmed to August 31, 2000 the bank debt is now shown in
current liabilities. The Company is currently involved in negotiations to
provide adequate financing following the expiry of these loans. This finance can
be asset backed or supported by projected cash flows. The negotiations are at an
early stage and there is substantial doubt as to the outcome as there are
uncertainties involved in either approach. In the light of the above the
directors have formed a judgement that it is appropriate to adopt the going
concern basis in preparing the accounts. The financial statements do not include
any adjustments that would result from an inability to secure adequate
financing.
The remainder of Huntingdon's long term financing is provided by Convertible
Capital Bonds repayable in 2006. These Bonds, totalling $50 million, were issued
in 1991 and remain outstanding as at December 31, 1999. They carry interest at
7.5% per annum, payable at six-monthly breaks in March and September. The
conversion rate, which is based upon a fixed rate of exchange of (pound)1.00=US
$1.6825 is 242.3 pence per Ordinary Share and is subject to adjustment in
certain circumstances.
The balance of the consideration payable for the purchase of the Wilmslow
Research Centre (acquired in 1997) which remained outstanding as at December 31,
1998 ((pound)3.3 million) was repaid during the year.
EXCHANGE RATE FLUCTUATIONS AND EXCHANGE CONTROLS
In the twelve months to December 31, 1999 following the weakening of sterling
against the US dollar, net liabilities denominated in US dollars (primarily the
Convertible Capital Bonds of $50 million) have increased in value on
consolidation to sterling. This does not affect the cash flow of Huntingdon but
has increased the reported loss before tax, accounting largely for the
unrealised loss on exchange of (pound)0.7 million reported in these results.
This compares with an exchange gain in the twelve months to December 31, 1998 of
(pound)0.2 million.
Interest on the Convertible Capital Bonds is payable half-yearly (in March and
September) in US dollars and the impact of fluctuations in the exchange rate
between sterling and US dollars is offset by US dollar denominated revenues
receivable by Huntingdon. Although reported results have been affected partially
by conversion into sterling of the Bonds on consolidation and there may be an
impact in the future, Management has decided not to hedge against this exposure.
Such a hedge might impact upon Huntingdon's cash flow compared with movements on
the Bonds which do not affect cash flow in the medium term. Huntingdon's current
treasury policy does not include any hedging or derivative activity.
Huntingdon operates on a world-wide basis and generally invoices its clients in
the currency of the country in which it operates. Thus, for the most part,
exposure to exchange rate fluctuations is limited as sales are denominated in
the same currency as costs. Trading exposures to currency fluctuations do occur
as a result of certain sales contracts, performed in the UK for US clients,
which are denominated in US dollars and contribute approximately 14% of total
revenues, and exchange rate fluctuations have an impact on the relative price
competitiveness of Huntingdon vis a vis competitors who trade in currencies
other than sterling or dollars.
Exchange rates for translating sterling into US dollars were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AT SEPTEMBER 30 AVERAGE RATE (1) HIGH (2) LOW (2)
SEPTEMBER 30
- ------------------------------- ------------------------ --------------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
1995 1.58 1.59 1.61 1.56
YEAR ENDED AT DECEMBER 31 AVERAGE RATE (1) HIGH (2) LOW (2)
DECEMBER 31
- ------------------------------- ------------------------ --------------------- ----------- ------------
1996 1.71 1.57 1.66 1.52
1997 1.64 1.64 1.69 1.60
1998 1.66 1.66 1.70 1.64
1999 1.61 1.62 1.66 1.57
THREE MONTHS ENDED DECEMBER 31 AT DECEMBER 31 AVERAGE RATE (1) HIGH (2) LOW (2)
- ------------------------------- ------------------------ --------------------- ----------- ------------
1995 1.55 1.55 1.58 1.54
</TABLE>
(1) Based on the average of the exchange rates on the last day of each month
during the period.
(2) Based on the monthly average of the daily average rate.
On March 24, 2000 the noon buying rate for sterling was $1.5887 =(pound)1.00
Huntingdon has not experienced difficulty in transferring funds to and receiving
funds remitted from those countries outside the US or UK in which it operates
and Management expects this situation to continue.
Whilst the UK has not at this time entered the European Monetary Union,
Huntingdon has ascertained that its financial systems are capable of dealing
with Euro denominated transactions. In addition, these systems ensure that
Huntingdon, if ever required to do so, will be able to report in Euros.
COMPETITION
Competition in both the pharmaceutical and non-pharmaceutical market segments
ranges from in-house research and development divisions of large pharmaceutical,
agrochemical and industrial chemical companies, who perform their own safety
assessments to contract research organisations like Huntingdon, who provide a
full range of services to the industries and niche suppliers focussing on
specific services or industries.
This competition could have a material adverse effect on Huntingdon's net
revenues and net income, either through in-house research and development
divisions doing more work internally to utilise capacity or through the loss of
studies to other competitors on pricing. As Huntingdon operates on an
international basis, movements in exchange rates, particularly against sterling,
can have a significant impact on its price competitiveness.
INDUSTRY CONSOLIDATION
The process of consolidation within the pharmaceutical industry should
accelerate the move towards outsourcing work to contract research organisations
such as Huntingdon in the longer term as resources are increasingly invested in
in-house facilities for discovery and lead optimisation, rather than development
and regulatory safety evaluation. However, in the short term, there is a
negative impact with development pipelines being rationalised and a focus on
integration rather than development. This can have a material adverse impact on
Huntingdon's net revenues and net income.
INFLATION
While most of Huntingdon's net revenues are earned under fixed price contracts,
the effects of inflation do not generally have a material adverse effect on its
operations or financial condition as only a minority of the contracts have a
duration in excess of one year.
YEAR 2000
The Company completed its Year 2000 compliance program in December 1999. Where
necessary, items of computer hardware, software and other equipment relying on
computer related technologies were upgraded or replaced and the Company has
experienced no disruption to its operations as a result of equipment or computer
failures. Equally there has been no disruption caused by problems at the
Company's clients or suppliers.
The Company currently estimates that the amounts that have, or will be, expensed
as incurred over the three year period to December 31, 2000 will total between
(pound)1,900,000 and (pound)2,000,000. Of this amount a total of
(pound)1,818,000 has been incurred and expensed in the two years to December 31,
1999 ((pound)1,808,000 in 1999 and (pound)10,000 in 1998). The amounts that will
be capitalised have primarily been incurred in the two years to December 31,
1999 and are estimated at (pound)1,500,000 ((pound)1,203,000 in 1999 and
(pound)275,000 in 1998).
The Company is continuing to monitor for potential issues through 2000, but
believes that Year 2000 compliance will have no material adverse effect on the
results of its operations.
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging activities.
It requires that an entity recognise all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. As amended by SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FAB
Statement No. 133", this statement is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000, although early adoption is
encouraged. The Company is in the process of analysing the impact of the
adoption of this statement on its consolidated financial statements.
FORWARD LOOKING STATEMENTS
Statements in this management's discussion and analysis of financial condition
and results of operations, as well as in certain other parts of this Annual
Report on Form 10-K (as well as information included in oral statements or other
written statements made or to be made by Huntingdon) that look forward in time,
are forward looking statements made pursuant to the safe harbor provisions of
the Private Litigation Reform Act of 1995. Forward looking statements include
statements concerning plans, objectives, goals, strategies, future events or
performance, expectations, predictions, and assumptions and other statements
which are other than statements of historical facts. Although Huntingdon
believes such forward-looking statements are reasonable, it can give no
assurance that any forward-looking statements will prove to be correct. Such
forward-looking statements are subject to, and are qualified by, known and
unknown risks, uncertainties and other factors that could cause actual results,
performance or achievements to differ materially from those expressed or implied
by those statements. These risks, uncertainties and other factors include, but
are not limited to Huntingdon's ability to estimate the impact of competition
and of industry consolidation and risks, uncertainties and other factors set
forth in Huntingdon's filings with the Securities and Exchange Commission,
including without limitation this annual report on Form 10-K.
ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact the consolidated
financial position, results of operations or cash flows of the Company. The
Company is exposed to market risk in the areas of interest rates and foreign
currency exchange rates.
INTEREST RATES
The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's debt obligations. The Company has a cash flow
exposure on its bank loans due to its variable LIBOR pricing. In the 12 months
ended December 31, 1999 a 1% change in LIBOR would have resulted in a
fluctuation in interest expense of approximately (pound)240,000.
FOREIGN EXCHANGE RISK
See Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations, Exchange Rate Fluctuations and Exchange Controls.
For disclosure of other risks see Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page
Report of Deloitte & Touche - Independent Auditors...................... 20
Report of Arthur Andersen - Independent Auditors........................ 21
Consolidated Balance Sheets - December 31, 1999 and 1998................ 22
Consolidated Statements of Operations - Years ended
December 31, 1999, 1998 and 1997........................................ 23
Consolidated Statements of Changes in Stockholders'
Equity - Years ended December 31, 1999, 1998 and 1997................ 24
Consolidated Statements of Cash Flows - Years ended
December 31, 1999, 1998 and 1997....................................... 25
Notes to Consolidated Financial Statements............................. 26
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of Huntingdon Life Sciences
Group plc, Huntingdon, Cambridgeshire, England
We have audited the accompanying consolidated balance sheet of Huntingdon Life
Sciences Group plc and subsidiaries as of December 31, 1999, and the related
consolidated statement of operations, stockholders' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
in the United Kingdom, which do not differ in any material respects from
generally accepted auditing standards in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Huntingdon Life Sciences Group plc
at December 31, 1999 and the results of their operations and their cash flows
for the year then ended in conformity with generally accepted accounting
principles in the United States.
The accompanying financial statements for the year ended December 31, 1999 have
been prepared assuming that the Company will continue as a going concern. As
discussed in Note 3 to the financial statements, the Company's ability to
refinance the bank loans due August 31, 2000 raise substantial doubt about its
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Deloitte & Touche
Chartered Accountants
Cambridge
England
March 30, 2000
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Huntingdon Life Sciences Group plc
We have audited the accompanying consolidated balance sheet of Huntingdon Life
Sciences Group plc and subsidiaries as of December 31, 1998 and the related
consolidated statements of income, changes in shareholders'
equity and cash flows for the years ended December 31, 1998 and 1997.
Respective responsibilities of directors and auditors
The financial statements and the financial statements schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
Basis of opinion
We conducted our audits in accordance with United Kingdom auditing standards
which do not differ in any significant respect from United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
Going concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company's ability to refinance the bank loans due
August 31, 2000 raise substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are also described in Note
3. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Opinion
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Huntingdon Life
Sciences Group plc and subsidiaries as of December 31, 1998 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1998 and 1997 in conformity with generally accepted
accounting principles.
Arthur Andersen
Chartered Accountants
Cambridge
England
April 30, 1999 (except with respect to the matter discussed in Note 3, as to
which the date is March 30 2000)
<PAGE>
<TABLE>
Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Balance Sheets
<CAPTION>
December 31,
1999 1998
(pound)'000 (pound)'000
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents 5,258 14,080
Accounts receivable net of allowance for
uncollectible amounts of(pound)115,000 9,595 7,791
(1998 pound)111,000)
Unbilled receivables 5,689 4,060
Inventories 803 1,137
Prepaid expenses and other 1,233 1,441
Deferred income taxes 825 873
------------ ------------
Total current assets 23,403 29,382
------------ ------------
Property and equipment; net 68,969 75,416
------------ ------------
Investments 79 154
Unamortised costs of raising long term debt 692 882
Deferred income taxes 5,492 4,303
------------ ------------
Total assets 98,635 110,137
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 3,982 4,034
Accrued payroll and other benefits 760 1,094
Accrued expenses and other liabilities 4,593 4,651
Fees invoiced in advance 9,317 8,340
Short term debt 22,656 4,116
------------ ------------
Total current liabilities 41,308 22,235
------------ ------------
Long term debt 31,023 54,688
------------ ------------
Other long term liabilities 2,977 4,618
------------ ------------
------------ ------------
Deferred income taxes 14,111 15,285
------------ ------------
Shareholders' Equity: 5p Ordinary Shares;
Authorised-at December 31, 1999 400,000,000 (1998, 400,000,000);
Issued and outstanding-at December 31, 1999 291,010,294 (1998, 291,010,294) 14,550 14,550
Paid in capital 25,100 25,100
Retained deficit (30,434) (26,339)
------------ ------------
Total shareholders' equity 9,216 13,311
------------ ------------
Total liabilities and shareholders' equity 98,635 110,137
------------ ------------
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statements of Operations
<CAPTION>
Year Ended December 31,
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
Revenues 58,215 52,616 63,689
Cost of sales (51,517) (56,739) (56,136)
------------ ------------ ------------
Gross profit/(loss) 6,698 (4,123) 7,553
Selling and administrative expenses (9,026) (9,200) (9,069)
Other operating income/(expense) 507 (14,911) (3,549)
------------ ------------ ------------
Operating loss (1,821) (28,234) (5,065)
Interest income 353 375 546
Interest expense (4,283) (5,882) (4,197)
Other (expense)/income (687) 321 1,001
------------ ------------ ------------
Loss before income taxes (6,438) (33,420 ) (7,715 )
Income taxes 2,343 8,983 4,833
------------ ------------ ------------
Net loss (4,095) (24,437 ) (2,882)
------------ ------------ ------------
Loss per share
-basic (pound)(0.014) (pound)(0.142) (pound)(0.026)
-diluted (pound)(0.014) (pound)(0.142) (pound)(0.026)
(000) (000) (000)
Weighted average shares outstanding
-basic 291,010 172,200 112,935
-diluted 291,010 172,200 112,935
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statement of Changes in Shareholders' Equity
<CAPTION>
Ordinary Paid in Retained
Shares Capital Earnings Total
(pound)'000 (pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C> <C>
Balance, December 31, 1996 5,429 8,393 764 14,586
Net loss for year - - (2,882) (2,882)
Exercise of Share Options 1 9 - 10
Issue of Shares 270 5,378 - 5,648
Transfers - (108) 108 -
-------- --------- --------- --------
Balance, December 31, 1997 5,700 13,672 (2,010) 17,362
Net loss for year - - (24,437) (24,437)
Issue of shares 8,850 11,536 - 20,386
Transfers - (108) 108 -
--------- -------- -------- ---------
Balance, December 31, 1998 14,550 25,100 (26,339) 13,311
Net loss for year - - (4,095) (4,095)
--------- --------- -------- ---------
Balance, December 31, 1999 14,550 25,100 (30,434) 9,216
--------- --------- --------- ---------
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
Year Ended December 31,
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss (4,095) (24,437) (2,882)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortisation 5,979 17,991 6,126
Deferred income taxes (2,324) (8,444) (3,113)
Provision for losses on accounts receivable 4 36 1
Profit on sale of property, plant and equipment (1,757) - (83)
Asset write down 1,250 - -
Changes in operating assets and liabilities:
Accounts receivable, unbilled receivables and prepaid expenses (3,045) 2,186 4,739
Inventories 334 135 38
Accounts payable, accrued expenses and other liabilities and
accrued payroll and other benefits (444) (837) (3,324)
Fees invoiced in advance 977 493 (1,468)
Other liabilities (1,743) 3,264 1,150
------------ ------------ ---------
Net cash (used in)/provided by operating activities (4,864) (9,613) 1,184
------------ ------------ ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (3,024) (2,419) (14,501)
Proceeds from sale of property, plant and equipment 4,214 5 205
------------ ------------ ---------
Net cash provided by/(used in) investing activities 1,190 (2,414) (14,296)
------------ ------------ ---------
Cash flows from financing activities:
Proceeds from issue of ordinary shares - 20,386 5,658
Proceeds from long term borrowings - 5,205 3,800
Repayments of long term borrowings (136) (551) (32)
Proceeds from short term borrowings - 747 -
Repayment of short term borrowings (5,960) - -
Amortisation of loan costs 108 133 201
------------ ------------ ---------
Net cash (used in)/provided by financing activities (5,988) 25,920 9,627
------------ ------------ ---------
Effect of exchange rate changes on cash and cash equivalents 840 (256) 891
------------ ------------ ---------
(Decrease)/increase in cash and cash equivalents (8,822) 13,637 (2,594)
Cash and cash equivalents at beginning of year 14,080 443 3,037
------------ ------------ ---------
Cash and cash equivalents at end of year 5,258 14,080 443
------------ ------------ ---------
Supplementary disclosures:
Interest paid (4,173) (5,717) (4,434)
Income taxes received/( paid) 28 974 (98)
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
Huntingdon Life Sciences Group plc and subsidiaries
Notes to Consolidated Financial Statements December 31, 1999, 1998 and 1997
1. Business
The Company is a leading Contract Research Organisation, offering world-wide
pre-clinical and non-clinical testing for biological safety and efficacy
assessment which is necessary for the development of pharmaceuticals and
chemicals. The Company serves the rapidly evolving requirements to perform
safety evaluations on new pharmaceutical compounds and chemical compounds
contained within the products that man uses, eats, and is otherwise exposed to.
In addition, it tests the effect of such compounds on the environment and also
performs work on assessing the safety and efficacy of veterinary products.
2. Basis of Financial Statements
These financial statements are not the Company's primary financial statements
and do not constitute statutory accounts within the meaning of Section 227 of
the Companies Act 1985 of Great Britain. Such statutory accounts for the years
ended December 31, 1997 and 1998 have been and for the year ended December
31,1999 will be delivered to the Registrar of Companies for England and Wales.
The auditors have issued unqualified audit reports on these accounts.
These financial statements are prepared in conformity with the accounting
principles generally accepted in the United States ("US GAAP"). These US GAAP
statements are prepared solely for the purposes of preparing the Annual Report
on Form 10-K. They are presented in pounds sterling since the United Kingdom is
the country in which the Company is incorporated.
3. Summary of Significant Accounting Policies
A summary of the principal accounting policies, all of which have been applied
consistently throughout the year ended December 31, 1999, and the preceding
periods presented is set out below:
Basis of consolidation
The consolidated financial statements incorporate the accounts of the Company
and each of its subsidiaries for the year ended December 31, 1999 and the
preceding periods presented except as described below. The results of
subsidiaries acquired or disposed of during any period are included in the
Consolidated Statement of Operations from or to, the date on which control
passed.
Travers Morgan Group ("TM")
Joint administrators were appointed to TM, on December 15, 1994. Upon granting
of the administration order, control of the realisation of the assets and
settlement of liabilities passed from the Company to the Administrator.
Accordingly , the residual assets and liabilities of TM have not been included
in the Consolidated Balance Sheet at December 31, 1997, December 31, 1998 and
December 31, 1999. In addition, as full provision was made for the losses of TM
at September 30, 1994, the results of TM have not been included in the
Consolidated Statements of Operations for the 12 months ended December 31, 1997,
December 31, 1998 and December 31, 1999.
Going concern
As stated in note 7, bank loans totalling (pound)22,586,000 are repayable on
August 31, 2000. The directors are currently involved in negotiations to provide
adequate financing following the expiry of these loans. This financing could be
asset backed or supported by projected cash flows. The negotiations are at an
early stage and there is substantial doubt as to the outcome as there are
uncertainties involved in either approach.
In the light of the above the directors have formed a judgement that it is
appropriate to adopt the going concern basis in preparing the accounts. The
financial statements do not include any adjustments that would result from an
inability to secure adequate financing.
Reclassifications
Certain figures in the accounts for the year ended December 31, 1998 have been
reclassified so that their presentation mirrors that in the accounts for the
year ended December 31, 1999. There are provisions for the pension costs which
are now shown as other long term liabilities. In 1998 they were included in
trade payables, accrued expenses and accrued payroll and benefits.
Summary of Significant Accounting Policies continued
Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments with an original
maturity date of three months or less at the date of purchase and consist
principally of amounts temporarily invested in money market funds. Cash includes
a restricted amount of $250,000 representing an irrevocable standby letter of
credit issued to cover the Group's liabilities to a third party.
Financial instruments
The fair value of cash and cash equivalents, accounts receivable, accounts
payable and accrued expenses and long term and short term debt are not
materially different from their carrying amounts as reported at December 31,
1999 and 1998 except for the Convertible Capital Bonds (see note 7).
<PAGE>
Huntingdon Life Sciences Group plc and subsidiaries
Notes to Consolidated Financial Statements December 31, 1999, 1998 and 1997
continued
Inventories
Inventories are valued at the lower of cost, on a FIFO basis, or net realisable
value after making due allowances for any obsolete items. They comprise
materials and supplies.
Impairment of Long-Lived Assets
Long-lived assets are evaluated for possible impairment through a review of
undiscounted expected future cash flows. If the sum of the undiscounted expected
future cash flows is less than the carrying amount of the asset or if changes in
facts and circumstances indicate, an impairment loss is recognised.
Depreciation
The cost of depreciable assets is written off in equal monthly instalments over
their expected useful lives as follows:
Freehold buildings and facilities 15 - 50 years
Plant and equipment 5 - 15 years
Vehicles 5 years
Computer software 5 years
Goodwill arising on consolidation
Goodwill, being the excess of the purchase consideration for subsidiary
companies acquired over the fair values ascribed to their tangible net assets at
the date of acquisition, is amortized over its expected useful life which is 40
years. In subsequent years, goodwill carried forward is assessed based on its
fair value and any permanent impairment is written-off at the time it is
identified.
Investments
On January 2, 1996 the Company entered into an agreement with Chugai Boyeki Co.
Ltd to form a company, Huntingdon Life Sciences Co. Ltd owned 50% by each party.
Huntingdon Life Sciences Co. Ltd is responsible for selling and marketing all
Huntingdon services in Japan. This investment represents a joint venture which
is accounted for using the equity method.
Taxation
The current charge for income taxes is calculated in accordance with the
relevant tax regulations applicable to each entity in the Company. Deferred
income taxes are recognised for the future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. The effect on
deferred tax assets and liabilities of a change in tax rates is recognised in
income in the period that includes the enactment date. Deferred tax assets are
recognised in full subject to a valuation allowance that reduces the amount
recognised to that which is more likely than not to be realised.
Summary of Significant Accounting Policies continued
Revenue recognition
Revenues represent the value of work done for clients, exclusive of VAT or sales
taxes. Billings in advance of work performed are recorded as fees invoiced in
advance and included in current liabilities, while billings in arrears of work
performed are included in current assets as amounts recoverable on contracts.
Contracts
Profit on contracts, irrespective of length, is taken as the work is carried
out. The profit is calculated to reflect the proportion of the work performed,
by recording turnover and related costs as contract activity progresses.
Turnover is calculated as that proportion of total contract value which costs
incurred to date bear to total expected costs for that contract. Full provision
is made for losses on contracts when they are first foreseen.
Foreign currencies
Assets, liabilities, revenues and costs denominated in foreign currencies are
recorded at the rates of exchange ruling at the dates of the transactions;
monetary assets and liabilities at the balance sheet date are translated at
period end rates of exchange. All exchange differences thus arising are reported
as part of the net income for the period.
On consolidation, the assets and liabilities of overseas subsidiaries are
translated at the period end rates of exchange, and the revenues and costs are
translated at monthly average rates of exchange. Translation adjustments where
material are included as a separate component of stockholders' equity in the
consolidated financial statements.
Leased assets
Assets held under the terms of capital leases are included in tangible fixed
assets and are depreciated in accordance with the Company's policy. Obligations
for future lease payments, less attributable finance charges are shown within
liabilities and are analysed between amounts falling due within and after one
year. Operating lease rentals are charged to the Consolidated Statement of
Operations as incurred.
Pension costs
Contributions to defined contribution plans are charged to income in the period
in which they accrue. Current service costs for defined benefit plans are also
accrued in the period to which they relate. Prior service costs, if any,
resulting from amendments to the plans are recognised and amortised over the
remaining period of service of such employees.
Costs of raising long-term debt
The costs of raising long term financing are capitalised as an asset and are
amortised, using the effective interest method, over the term of the loan.
Convertible debt is reported as a liability unless conversion actually occurred.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the results of operations during the reporting periods. Although these estimates
are based upon management's best knowledge of current events and actions, actual
results could differ from those estimates.
Loss per share
Loss per share is computed in accordance with FASB Statement No. 128, Earnings
Per Share. Basic loss per share is computed by dividing net income available to
common stockholders by the weighted average number of shares outstanding during
the period. The computation of diluted loss per share is similar to the
computation of basic loss per share, except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the dilutive potential common shares had been issued. The potential dilution
which could arise from outstanding share options and the Convertible Capital
Bonds is not disclosed as any adjustments would be anti-dilutive.
Summary of Significant Accounting Policies continued
Segment Analysis
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". This statement establishes standards for
the reporting of information about operating segments on an annual basis and is
effective for fiscal years beginning after December 15, 1997. Except for
geographic information (see Note 12), this statement did not result in any
changes to the Company's presentation of financial and nonfinancial data in
1998. The Company's operating locations have been aggregated into a single
reportable segment, as permitted under SFAS No. 131, since they have similar
economic characteristics, products, production processes, types of customers and
distribution methods.
Stock-Based Compensation
SFAS No. 123 encourages, but does not require, companies to record compensation
cost for stock-based compensation plans at fair value. The Company has elected
to continue to account for stock-based compensation in accordance with APB
Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations, as permitted by SFAS No. 123. Compensation expense for stock
options is measured as the excess, if any, of the average quoted market price of
the Company's stock at the date of grant over the amount an employee must pay to
acquire the stock.
New accounting standards
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging activities.
It requires that an entity recognise all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. As amended by SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FAB
Statement No. 133", this statement is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000, although early adoption is
encouraged. The Company is in the process of analysing the impact of the
adoption of this statement on its consolidated financial statements.
<PAGE>
4. Property and Equipment
Property and equipment at December 31, 1999 and 1998 consists of the following:
1999 1998
(pound)'000 (pound)'000
Property and equipment at cost:
Freehold property 63,228 68,355
Plant equipment and vehicles 55,810 61,622
Assets in the course of construction 2,032 2,575
------------- ---------
121,070 132,552
------------- ---------
Less: Accumulated depreciation and amortisation 52,101 57,136
------------- ---------
Property and equipment, net 68,969 75,416
------------- ---------
Depreciation and amortisation expenses aggregated (pound)5,979,000 and
(pound)10,649,000 for 1999 and 1998 respectively.
The net book value of assets held under capital leases and included above under
plant equipment and vehicles is as follows:
Cost Depreciation Net book
Value
(pound)'000 (pound)'000 (pound)'000
At December 31, 1998 325 134 191
At December 31, 1999 314 82 232
5. Goodwill
1999 1998
(pound)'000 (pound)'000
Cost: 7,752 7,752
--------------- -------------
Accumulated amortisation
Balance at beginning of period 7,752 410
Charge in year - 7,342
--------------- -------------
Balance at end of period 7,752 7,752
--------------- -------------
Net balance: - -
--------------- -------------
The unamortised balance of the goodwill arising on the acquisition of businesses
by the Company in 1995 was written off in 1998. Due to the decline in revenues
and the re-naming and successful integration of the Princeton and Eye sites
acquired in 1995, the unamortised balance of goodwill acquired at that time,
(pound)7,342,000, was written off following an impairment review.
6. Taxes on Income
The components of loss before taxes and the related benefit for tax relief on
losses for 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Loss before taxes 1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
United Kingdom 6,019 30,000 5,171
United States 419 3,420 2,544
------------- ------------- -------------
6,438 33,420 7,715
------------- ------------- -------------
Benefit for income taxes 1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
UK tax calculated at 30% (1998 and 1997: 31%) 28 539 1,843
Deferred taxation 2,315 8,444 2,990
------------- ------------- -------------
2,343 8,983 4,833
------------- ------------- -------------
</TABLE>
The differences between the benefit for income taxes and income taxes computed
using the UK corporation tax rate for 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
% of Income before Income Taxes
1999 1998 1997
% % %
<S> <C> <C> <C>
UK statutory rate 30 31 31
Effect of non taxation of profit on sale of fixed assets, goodwill & 6 (7) 8
exceptional bad debt recovery
Increase in taxes arising from effect of foreign earnings - 1 4
Exchange loss not taxable (5) - (4)
Effect of reduction in UK tax rate on deferred tax 5 - 18
Prior year adjustments - 2 7
Permanent differences - - (1)
-------- ------- -------
Effective tax rate 36 27 63
-------- ------- -------
</TABLE>
<PAGE>
6. Taxes on Income continued
The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at December 31, 1999 and 1998 are as
follows:
1999 1998
(pound)'000 (pound)'000
Current deferred tax assets
Liabilities not currently deductible 825 873
------------- -------------
825 873
------------- -------------
Non current deferred tax assets
Net operating losses 5,492 4,303
------------- -------------
5,492 4,303
------------- -------------
Non current deferred tax liabilities
Property and equipment 18,915 19,849
Net operating losses (4,804) (4,564)
------------- -------------
14,111 15,285
------------- -------------
Net operating losses are set off against tax liabilities to the extent that is
allowed under UK tax legislation. Of these tax losses (pound)7,150,000 have no
expiry date, (pound)850,000 expire in 2011 and (pound)2,296,000 expire in 2012.
The Company has not provided a valuation allowance on deferred tax assets
because those amounts are expected to be realised through taxable income from
future operations.
No account is taken of the benefits of capital losses incurred in prior years as
the Company would be required to make a capital gain before such losses could be
utilised.
7. Short and Long Term Debt
1999 1998
(pound)'000 (pound)'000
Bank overdrafts and loans - short term:
Bank loans 22,586 747
Non bank loans - 3,300
Capital leases 70 69
------------ -------------
22,656 4,116
------------ -------------
Loans - long term:
Bank loans repayable on August 31, 2000 - 24,500
Capital leases - 136
Convertible Capital Bonds 31,023 30,052
------------ -------------
31,023 54,688
------------ -------------
The bank loan is repayable on August 31, 2000 and hence is shown in amounts
falling due within one year. Interest is payable in quarterly breaks at "LIBOR"
plus 1.75% in respect of drawings up to (pound)19,500,000 and LIBOR plus 2% in
respect of drawings over (pound)19,500,000. The interest rate payable at
December 31, 1999 is 7.83% on (pound)19,500,000 and 8.08% on (pound)3,086,000.
7. Short and Long Term Debt continued
The bank loans are secured by guarantees from the Company, Huntingdon Life
Sciences Ltd., and Huntingdon Life Sciences Inc., together with charges over
the assets of those Companies. The non-bank loan was secured by charges over
the assets of the Wilmslow Research Centre and bore no interest.
All capital leases are repayable within one year.
On August 12, 1991, an issue of US $50,000,000 7 1/2% Convertible Capital
Bonds, 2006, ("the Bonds"), was made by a subsidiary company, HIH Capital Ltd.
The Bonds are guaranteed on a subordinated basis by the Company, and are
convertible by the holders at any time into Redeemable Preference Shares of HIH
Capital Ltd., which in turn are immediately exchangeable for Ordinary Shares of
5 pence each in the Company. The conversion rate, which is based upon the
paid-up value of the Redeemable Preference Shares and a fixed rate of exchange
of (pound)1.00=US $1.6825, is 242.3 pence per Ordinary Share (1998: 242.3 pence)
and is subject to adjustment in certain circumstances. At this conversion rate
the number of Ordinary Shares to be issued on conversion and exchange of each
unit of US $1,000 comprised in a Bond would be 245 (1998: 245). The proceeds of
the Bonds issue of US $47,300,000 were passed to the Company by HIH Capital
Ltd., in consideration for the issue of US $50,000,000 Debenture, on terms
similar to those of the Bonds. The (pound)1,590,000 costs of issuing the Bonds
are amortised over the life of the Bonds and together with the interest payable
are charged to the Consolidated Income Statement using the effective interest
method.
The Bonds are redeemable by the holders at the maturity date and by the Company
at any time. To date no Bonds have been redeemed.
Fair value of financial instruments
Cash and cash equivalents are held on short term deposit at commercial rates.
Long term loans are offered to the Company at fair rates of interest for similar
debt. Accordingly the carrying values approximate to the fair value. The
Convertible Capital Bond is however a negotiable instrument and the fair value
is the quoted market price. The estimated fair value of the Bonds are as
follows:
1999 1998
(pound)'000 (pound)'000
Carrying Amount 31,023 30,052
Fair value 18,769 24,793
8. Other Long Term Liabilities
1999 1998
(pound)'000 (pound)'000
Restructuring 60 2,086
Pension liabilities 2,403 2,047
Other 514 485
-------------- -----------------
2,977 4,618
-------------- -----------------
<PAGE>
9. Stockholders' Equity
Ordinary shares
The authorised share capital of the Company as at December 31, 1996 and December
31, 1997 was (pound)7,000,000, comprising 140,000,000 ordinary shares of 5p
each. This was increased in 1998 to (pound)20,000,000 comprising 400,000,000
ordinary shares of 5p each.
At an Extraordinary General Meeting on September 2, 1998 shareholders approved a
subscription of 120,000,000 and a placing and open offer of 57,003,431 shares at
12.5 pence. The shares not taken up by existing qualifying shareholders were
placed by Kleinwort Benson Securities Limited with institutional investors in
the UK. These transactions raised (pound)20.4M net of expenses. The issue
discount before expenses was 36 per cent as compared with 19.5 pence per share,
being the London Stock Exchange middle market price at the time the issue price
was agreed. However, the issue price net of expenses represented a 6 per cent
discount to the price of the Company's ADR's on the New York Stock Exchange at
the time that the price was agreed. Dealings commenced in these new Ordinary
shares on September 3, 1998 and the discount at that time was 4 per cent as
compared with the then prevailing middle market price on the London Stock
Exchange.
Paid in Capital
This is not distributable.
(Loss) / earnings per share
The computation of loss per share is as follows:
1999 1998 1997
Numerator
Net loss ((pound)'000) 4,095 24,437 2,882
Denominator
Weighted average
Shares outstanding (000) 291,010 172,200 112,935
Loss per share (pound)(0.014) (pound)(0.142) (pound)(0.026)
The potential dilution, which could arise from outstanding share options and the
Convertible Capital Bonds in all three years is not disclosed as any adjustments
would be anti-dilutive.
Share option plans
On April 8, 1983, the Company adopted the Unapproved Share Option Plan (the
"Unapproved Plan") pursuant to which options to acquire Ordinary Shares could be
granted to any eligible employee or Director. Options may be exercised, subject
to certain exceptions, in respect of 50% of the shares allocated from the second
anniversary of the date of the grant and in respect of 100% of the shares from
the third anniversary. Options lapse on the seventh anniversary.
On January 29, 1985, the Company adopted a second share option plan, the
Approved Management Share Option Plan (the "Approved Plan"), which has been
approved by the Board of Inland Revenue (the "Inland Revenue") pursuant to the
Finance Act 1984. The rules of the Approved Plan broadly follow those of the
Unapproved Plan, except that an option may be exercised, subject to certain
exceptions, only between three and ten years after it is granted.
Both the Unapproved Plan and the Approved Plan terminated on December 31, 1997
with respect to the grant of new options. Options outstanding at that date are
not affected by such termination.
<PAGE>
9. Stockholders' Equity continued
Under the terms of the plans, the following Options to purchase Ordinary Shares
of 5p in the Company have been granted but not relinquished or exercised as at
December 31, 1999.
Date of grant Number of shares Option price
outstanding
UNAPPROVED PLAN
December 18, 1995 112,500 (pound)0.77
November 21,1996 60,000 $1.60
December 1, 1997 100,000 (pound)0.50
December 31, 1997 522,920 (pound)0.465
December 31, 1997 680,000 $0.77
APPROVED PLAN
February 13, 1995 202,500 (pound)0.49
December 11, 1995 640,000 (pound)0.78
December 11, 1995 130,000 $1.19
December 18, 1995 64,000 (pound)0.77
November 21,1996 560,000 (pound)0.95
December 31, 1997 580,000 (pound)0.465
Other share options
At the Extraordinary General Meeting held on September 2, 1998 the Shareholders
approved a new option scheme (the rules of which were amended at the Annual
General Meeting held on June 3, 1999) and a separate Option Agreement with Mr
Baker:
a. The Huntingdon Life Sciences Group Unapproved Share Option Scheme
("Unapproved Scheme")
(i) 8,000,000 Founder Options had been granted but not relinquished or exercised
at December 31, 1999. They are exercisable from the third anniversary of the
date of the grant subject to the share price reaching the following
pre-determined targets for a period of seven consecutive dealing days at any
time after January 1, 1999.
Target price per share Proportion of options exercisable
25p 25%
50p 50%
75p 75%
100p 100%
(ii) 2,000,000 options, other than Founder Options, which are generally
exercisable between the third and tenth anniversary of the date of grant subject
to the attainment of performance related conditions were granted on March 29,
1999 at a Subscription Price of 19.25 pence each and remained outstanding on
December 31, 1999.
All options lapse on the tenth anniversary.
b. Option Agreement
Mr Baker was granted Options over 5,000,000 Ordinary Shares of 5p in the
Company, the principal terms of which are the same as those applicable to the
Founder Options referred to above.
9. Stockholders' Equity continued
Huntingdon Life Sciences Group Incentive Option Plan
Details of the Huntingdon Life Sciences Group Incentive Option Plan ("Incentive
Plan"), which was adopted on June 3, 1999, were included in the circular to
shareholders dated April 30, 1999. As stated therein the Incentive Plan was
introduced to run alongside the Scheme described above and is designed to reward
short term improvement in financial performance. Options are available for grant
to management and senior staff, subject to the achievement of a performance
measure and personal performance conditions. Options have been granted to such
employees subject to a performance measure designed to reward the recipients for
returning the Company to profit before interest and tax in the final quarter of
1999 with continual improvement forecast thereafter. It is intended that further
grants will be made in respect of each financial year. Options may generally be
exercised from the third anniversary of the date of grant. Options lapse on the
tenth anniversary.
Date of grant Number of shares outstanding Option Price
June 28, 1999 2,550,000 (pound)0.1925
September 6, 1999 100,000 (pound)0.175
Huntingdon Life Sciences Sharesave Scheme
The Huntingdon Life Sciences Sharesave Scheme ("Sharesave Scheme") was also
adopted at the Annual General Meeting held on June 3, 1999 and the main terms
thereof were summarised in the circular to shareholders referred to above.
Approximately 55% of eligible employees, who will fund the exercise of their
options with the proceeds of a related Save As You Earn (SAYE) savings contract,
accepted the invitation to join the Sharesave Scheme. Options may generally be
exercised from the third anniversary of the Bonus Date, which falls on November
1, 2002. Options generally lapse six months after the Bonus Date.
Date of grant Number of shares outstanding Option Price
September 9, 1999 7,102,238 (pound)0.14
The following table sets forth certain information relative to the changes to
options outstanding in the periods presented:
<TABLE>
<CAPTION>
Option Price
----------------------------
Unapproved Approved Unapproved Dollars(pound) Sterling
Plan Plan Scheme* per Share per Share
<S> <C> <C> <C> <C> <C>
Outstanding at January 1, 1997 2,248,300 4,398,775 - 1.15 -1.60 0.49 - 0.95
Granted 3,050,020 650,000 - 0.77 0.465- 0.49
Options exercised (12,500) - - - 0.77
Rescinded (1,808,750) (1,407,075) - 1.19 -1.60 0.49- 0.95
---------------- ---------------- -------------- ------------ ------------
Outstanding at December 31, 1997 3,477,070 3,641,700 - 0.77 -1.60 0.465- 0.95
Granted - - 13,500,000 - 0.125
Rescinded (1,204,950) (1,057,750) - 0.77-1.60 0.465- 0.95
---------------- ---------------- -------------- ------------ ------------
Outstanding at December 31, 1998 2,272,120 2,583,950 13,500,000 0.77-1.60 0.125-0.95
Granted - - 2,000,000 - 0.125
Rescinded (796,700) (407,450) (500,000) 0.77 0.125-0.95
---------------- ---------------- -------------- ------------ ------------
Outstanding at December 31, 1999 1,475,420 2,176,500 15,000,000 0.77-1.60 0.125-0.95
---------------- ---------------- -------------- ------------ ------------
</TABLE>
9. Stockholders' Equity continued
*and Option Agreement
<TABLE>
<CAPTION>
Option Price
--------------------------------
Incentive Sharesave Dollars Sterling
Plan Scheme per Share per Share
<S> <C> <C> <C> <C>
Outstanding at January 1, 1997 - - - -
7
Granted - - - -
Options exercised - - - -
Rescinded - - - -
--
---------------- ---------------- ------------ ----------------
Outstanding at December 31, 1997 - - - -
Granted - - - -
Rescinded - - - -
---------------- ---------------- ------------ ----------------
Outstanding at December 31, 1998 - - - -
Granted 2,650,000 7,193,520 - 0.14-0.1925
Rescinded - (91,282) - 0.14
---------------- ---------------- ------------ ----------------
Outstanding at December 31, 1999 2,650,000 7,102,238 - 0.14-0.1925
---------------- ---------------- ------------ ----------------
</TABLE>
A summary of the status of the Company's option plans, schemes and agreements
for the years ended December 31, 1997, December 31, 1998 and December 31, 1999
and changes during the years then ended is presented in the table and narrative
below:
<TABLE>
<CAPTION>
Years ended
December 31, 1999 December 31, 1998 December 31, 1997
----------------- ----------------- ----------------
Shares Wtd Avg. Shares Wtd Avg. Shares Wtd
Ex Price Ex Price Avg. Ex
(000) (000) (000) Price
<S> <C> <C> <C> <C>
Outstanding at start of period 18,356(pound)0.26 7,119 (pound)0.60 6,647(pound) 0.80
Granted 11,843(pound)0.16 13,500 (pound)0.13 3,700(pound) 0.47
Exercised - - - - (12)(pound) 0.77
Forfeited - - - - - -
Expired - - - - - -
Cancelled (1,795)(pound)0.46 (2,263) (pound)0.53 (3,216)(pound) 0.86
----------- ---------- ---------- ----------- ---------- ------------
Outstanding at end of period 28,404(pound)0.21 18,356 (pound)0.26 7,119(pound) 0.60
----------- ---------- ---------- ----------- ---------- ------------
Exercisable at end of year - - -
Weighted average fair value of (pound)0.08 (pound)0.08 (pound) 0.30
options granted
</TABLE>
The 28,404,158 options outstanding at December 31, 1999 have an exercise price
between (pound)0.125 and (pound)0.95, with a weighted average exercise price of
(pound)0.21 and a weighted average remaining contractual life of 7 years.
2,420,460 of these options are exercisable. The 11,843,520 options granted in
1999 have an exercise price of between (pound)0.14 and (pound)0.1925 and a
weighted average remaining contractual life of 5.4 years.
<PAGE>
9. Stockholders' Equity continued
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for the option grants in 1997, 1998 and 1999 respectively:
risk-free interest rates of 6.27 percent, 4.94 percent and 5.68 percent;
expected dividend yields of 0.00 percent; expected life of 7.0 years for the
Option Plan, 10.0 years for the Management Plan, and 5.0 years for the options
granted during the year except for the Sharesave Scheme where the expected life
is 3.0 years; expected volatility of 54.7 percent, 57.4 percent and 57.0
percent.
The Company accounts for share options under APB Opinion No. 25, under which no
compensation cost has been recognised. Had compensation cost for stock options
awarded under the plans been determined consistent with FASB Statement No. 123,
the Company's net income and earnings per share would have been restated as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended December Year Ended
December 31, 1999 31, 1998 December 31, 1997
-------------------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
Net loss: As Reported (4,095) (24,437) (2,882)
Proforma (4,268) (23,930) (4,046)
Basic and Diluted EPS: As Reported (pound)(0.014) (pound)(0.142) (pound)(0.026)
Proforma ((pound)(0.015) (pound)(0.139) (pound)(0.036)
</TABLE>
As at December 31, 1999, the Company may grant options in respect of
15,246,871shares in aggregate under the plans and scheme.
10. Commitments and Contingent Liabilities
Operating leases
Operating lease expenses were as follows
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
Hire of plant and equipment 172 142 124
Other operating leases 20 354 354
The Company has commitments payable under operating leases as follows:
Plant and machinery
Year ended December 31 (pound)'000
2000 346
2001 325
2002 146
2003 24
Thereafter 11
-----------------
852
-----------------
<PAGE>
11. Pensions
The Company operates the Huntingdon Life Sciences Pension and Life Assurance
Scheme a funded pension scheme providing benefits, based on final pensionable
salary, for Group employees in the UK. This Scheme was closed to new entrants
from April 5, 1997.
On April 6, 1997 the Company established a defined contribution Group Personal
Pension Plan for Company employees in the UK. A defined contribution scheme is
available for employees in the US. The net pension expense for these plans for
the twelve months ended December 31, 1999 were (pound)423,000 (1998,
(pound)278,000; 1997, (pound)229,000)
The net pension expense for the twelve months ended December 31, 1999, 1998 and
1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
Service cost (excluding employee contributions) 2,155 3,135 2,469
Interest cost on projected benefit obligation 3,687 4,151 3,229
Actual return on plan assets (9,465) (5,432) (6,929)
Asset gain 5,012 729 3,187
Amortisation of prior service cost 60 60 60
Amortisation of transition asset (158) (158) (158)
------------- ------------ ------------
Net periodic pension expense 1,291 2,485 1,858
------------- ------------ ------------
The major assumptions used in calculating the
pension expense were:
1999 1998 1997
Discount rate 6.25% 6.25% 7.00%
Rate of increase of future compensation 4.00% 4.75% 6.00%
Long-term rate of return on plan assets 7.50% 7.50% 8.50%
</TABLE>
The Net Asset at Transition, Prior Service Cost and Net Gain subject to
amortisation have been amortised on a straight line basis over periods of 15
years, 10 years and 10 years respectively.
A reconciliation of the projected benefit obligation for the pension plans to
the accrued pension expense recorded at December 31, 1999, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
Projected benefit obligation ("PBO") (63,135) (59,747) (59,303)
Plan assets at market value 68,710 59,500 55,085
------------ ------------ -------------
Plan assets in excess/(less than) of PBO 5,575 (247) (4,218)
Unrecognised net (loss)/gain from past experience (7,357) (1,081) 5,176
Unrecognised prior service cost 90 150 210
Unrecognised net asset at transition (711) (869) (1,027)
Adjustment to recognise minimum liability - - (461)
------------ ------------ -------------
Accrued pension expense (2,403) (2,047) (320)
------------ ------------ -------------
Change in plan assets
Fair value of assets at beginning of year 59,500 55,085 43,147
Actual return on plan assets 9,465 5,432 6,929
Employer contributions 935 297 1,609
Member contributions 330 106 400
Benefit payments (1,520) (1,420) 3,000
------------ ------------ -------------
Fair value of assets at end of year 68,710 59,500 55,085
------------ ------------ -------------
Change in benefits obligation
Projected benefit obligation at beginning of year 59,747 59,303 40,362
Service cost 2,155 3,135 2,469
Interest cost 3,687 4,151 3,229
Actuarial (losses)/gains (1,264) (5,528) 9,843
Member contributions 330 106 400
Benefit payments (1,520) (1,420) 3,000
------------ ------------ -------------
Projected benefit obligation at end of year 63,135 59,747 59,303
------------ ------------ ------------
</TABLE>
12. Geographical analysis
During the 12 months ended December 31, 1997, December 1998 and December 31,
1999 the Company operated from within two geographical markets, the United
Kingdom and the United States. The Company has had one continuing activity,
Contact Research, throughout this period. All disclosure therefore refers to
continuing activities.
<TABLE>
Geographical segment information is as follows:
<CAPTION>
US UK Total
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
1999 Revenues 10,719 47,496 58,215
Operating loss (466) (1,355) (1,821)
Identifiable assets (A) 12,939 79,667 92,606
Depreciation & amortisation 972 5,007 5,979
Capital expenditure 1,284 1,740 3,024
1998 Revenues 8,019 44,597 52,616
Operating loss (2,636) (25,598) (28,234)
Identifiable assets (A) 11,325 83,696 95,021
Depreciation & amortization 865 17,126 17,991
Capital expenditure 705 1,714 2,419
1997 Revenues 9,189 54,500 63,689
Operating loss (1,100) (3,965) (5,065)
Identifiable assets (A) 8,335 102,514 110,849
Depreciation & amortization 688 5,438 6,126
Capital expenditure 1,850 12,651 14,501
</TABLE>
(A) Identifiable assets exclude cash and cash equivalents, investments and
unamortised costs of raising long term debt as follows.
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
Identifiable assets 92,606 95,021 110,849
Cash and cash equivalents 5,258 14,080 443
Investments 79 154 154
Unamortised costs of debt 692 882 1,015
------------ ------------- -------------
Total assets 98,635 110,137 112,461
------------ ------------- -------------
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
Revenues from customers
Europe 23,208 20,843 29,603
United States 20,445 15,236 16,546
Far East 14,562 16,537 17,540
------------ ------------- -------------
58,215 52,616 63,689
------------ ------------- -------------
13. Other operating income / (expense)
1999 1998 1997
(pound)'000 (pound)'000 (pound)'000
Restructuring costs - (4,682) -
Asset write downs (1,250) - -
Costs of responding to allegations - - (3,549)
Goodwill written off - (7,342) -
Write down of carrying value of Wilmslow - (2,887)
Profit on sale of Wilmslow 1,757 - -
------------ ------------- ----------
507 (14,911) (3,549)
------------ ------------- ----------
In 1999 as a result of the Company's Year 2000 compliance program a number of
assets that were not Year 2000 compliant were identified, principally computer
hardware and software. A charge of (pound)1,250,000 was made to write these off.
The Company also disposed of its Wilmslow research site in 1999. The site was
sold for (pound)4,214,000 net of expenses, a gain of (pound)1,757,000 over its
written down value.
In 1998 the Company's UK site at Wilmslow was closed and the carrying value of
the site written down by (pound)2,887,000 to net realisable value. Redundancy
and related costs of (pound)361,000 have been classified as restructuring costs.
In addition, in December 1998 the Company announced a cost reduction program.
The program which was completed in 1999 rationalised service lines and
capabilities across the two UK sites and aligned overall staff resources with
present revenue levels. It resulted in the loss of 151 positions, 7 in 1998
and 144 in 1999. Associated costs of (pound)3,430,000 are included in
restructuring costs in 1998. This comprised severance pay of (pound)2,656,000,
fixed asset write offs of (pound)452,000 and stock write downs of
(pound)322,000.
A review of asset values led to the accelerated depreciation of certain assets
in the UK. These costs, (pound)891,000, were included in restructuring costs in
1998.
Of total restructuring costs of (pound)4,682,000, (pound)2,086,000 was accrued
at the end of 1998 and (pound)60,000 at the end of 1999.
Finally, following the decline in revenues and the renaming and successful
integration of the businesses acquired in 1995 into the Huntingdon group, the
unamortised balance of the goodwill acquired at that time, (pound)7,342,000, has
no longer any intrinsic value and was therefore written off in 1998.
Amortisation of goodwill has no tax effect and the depreciation included within
exceptional items of (pound)4,240,000 has reduced deferred tax liabilities by
(pound)1,314,000. The other costs incurred will be available for offset against
future trading profits.
In 1997, Company operations in Huntingdon, UK and near Princeton, USA were
alleged to have tolerated malpractice in its conduct of studies and in the
welfare and care of animals for use in research. Further, in the USA the Company
settled an employment matter. The exceptional loss for 1997 included study
costs, management time, legal and professional fees
The exceptional gain in 1997 represented the expected dividend, net of costs to
be incurred, from the administration of the Travers Morgan Group of companies.
In 1994 these companies were placed in administration and the Company wrote off
its investment, providing (pound)11.6 million against the amounts receivable
from Travers Morgan Limited. Following discussions with the joint administrators
the Company believed that the provision was excessive and accordingly released
(pound)2.1 million. This amount is included in other expense/income after the
operating loss of (pound)1,001,000.
<TABLE>
14. Allowance for uncollectable accounts
<CAPTION>
Balance at Charged to Accounts Balance at
Beginning of costs and Written End of
Period expenses Off Period
(pound)'000 (pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C> <C>
Allowance for uncollectable accounts
deducted from trade debtors
December 31, 1997 74 1 - 75
December 31, 1998 75 42 (6) 111
December 31, 1999 111 60 (56) 115
</TABLE>
15. Unaudited Quarterly Financial information
The following is a summary of unaudited quarterly financial information for the
12 months ended December 31, 1999 and December 31, 1998.
<TABLE>
<CAPTION>
= Quarter Ended
Year ended 31 December, 1999 March 31 June 30 September 30 December 31
(pound)'000 (pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C> <C>
Revenues 13,383 14,283 15,035 15,514
Cost of sales (12,471) (12,858) (13,115) (13,073)
------------------------------------------------------------
Gross profit 912 1,425 1,920 2,441
Selling and administrative costs (2,465) (2,229) (2,099) (2,233)
Other operating income - - 522 (15)
------------------------------------------------------------
Operating (loss)/profit (1,553) (804) 343 193
Interest income 155 83 62 53
Interest expense (1,099) (1,087) (1,070) (1,027)
Other income/(expense) (600) (468) 833 (452)
------------------------------------------------------------
Income/(loss) before taxes (3,097) (2,276) 168 (1,233)
Taxes 1,171 586 713 (127)
------------------------------------------------------------
Net (loss)/income (1,926) (1,690) 881 (1,360)
------------------------------------------------------------
(Loss)/earning per share (pound)(0.007) (pound)(0.006) (pound)0.003 (pound)(0.004)
</TABLE>
<PAGE>
15. Unaudited Quarterly Financial information continued
<TABLE>
<CAPTION>
Year ended 31 December, 1998 Quarter Ended
March 31 June 30 September 30 December 31
(pound)'000 (pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C> <C>
Revenues 13,428 13,051 13,063 13,074
Cost of sales (14,477) (14,157) (13,943) (14,162)
--------------------------------------------------------------------------
Gross loss (1,049) (1,106) (880) (1,088)
Selling and administrative expenses (2,123) (2,097) (2,308) (2,672)
Other operating expenses - - - (14,911)
--------------------------------------------------------------------------
Operating loss (3,172) (3,203) (3,188) (18,671)
Interest expense (1,561) (1,108) (1,595) (1,243)
Other income/(expense) 554 (248) 433 (418)
--------------------------------------------------------------------------
Loss before taxes (4,179) (4,559) (4,350) (20,332)
Taxes 1,674 1,421 1,972 3,916
--------------------------------------------------------------------------
Net loss (2,505) (3,138) (2,378) (16,416)
--------------------------------------------------------------------------
Loss per share (pound)(0.022) (pound)(0.028) (pound)(0.014) (pound)(0.056)
</TABLE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company filed a report on Form 8-K/A on September 7, 1999, amending its Form
8-K filed on July 14, 1999, announcing the resignation of Arthur Andersen as
auditors and the engagement of Deloitte & Touche.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The table below sets forth certain information with respect to the current
directors and executive officers of the Company:
Name Age Office Held
Appointed
Andrew H Baker 51 Director 1998
Chairman of the Board 1998
Brian Cass 52 Director
1998
Managing Director/
Chief Operating Officer 1998
Gabor Balthazar 58 Director 2000
Frank W Bonner 47 Director 1998
Director of Science
and Technology 1998
John Caldwell 53 Director 1997
Kirby L Cramer 62 Director 1999
Joseph Dowling III 35 Director 1999
Julian T Griffiths 47 Director
1999
Finance Director 1999
Secretary 2000
(a) Identification of Directors
Andrew Baker was appointed to the Board as Executive Chairman in September 1998.
He is a chartered accountant and has operating experience in companies involved
in the delivery of healthcare ancillary services. He spent 18 years until 1992
with Corning Incorporated ("Corning") and held the posts of President and CEO of
Metpath Inc., Corning's clinical laboratory subsidiary, from 1985 to 1989. He
became President of Corning Laboratory Services Inc. in 1989, which at the time
controlled MetPath Inc. (now trading as part of Quest Inc.), and Hazleton
Corporation, G.H.Besselaar Associates and SciCor Inc., all three now trading as
part of Covance Inc. Since leaving Corning in 1992, Andrew Baker has focused on
investing in and developing companies in the healthcare sector including Unilab
Corporation, a clinical laboratory services provider in California, and Medical
Diagnostics Management, which is a US based provider of radiology and clinical
laboratory services to health care payers. In 1997, he formed FHP, an investment
partnership which acts as general partner for healthcare startup and development
companies. FHP's largest investment was the purchase in 1998 of Unilabs Group
(UK) Limited, which is a UK clinical laboratory company, based in London.
Brian Cass, FCMA, was appointed to the Board as Managing Director/Chief
Operating Officer in September 1998. Prior to joining Huntingdon he was a Vice
President of Covance Inc. and Managing Director of Covance Laboratories Ltd
(previously Hazleton Europe Ltd) for nearly 12 years, having joined the company
in 1979 as Controller. Brian Cass worked at Huntingdon Research Centre between
1972 and 1974 and has previous experience with other companies in the
electronics and heavy plant industries. He has also held directorships with
North Yorkshire Training & Enterprise Council Ltd and Business Link North
Yorkshire Ltd.
Gabor Balthazar was appointed to the Board as the Senior Independent
Non-Executive Director in March 2000. He has been active in international
marketing and management consulting for almost 30 years. He was a founding Board
member of Unilab Corporation, serving as President from 1989 to 1992, and
continuing to sit on Unilab's Board until November 1999. From 1985 to 1997 Gabor
Balthazar served as a consultant to Frankfurt Consult, the merger/acquisition
subsidiary of BHF-Bank, Frankfurt, Germany and to Unilab Holdings SA, a Swiss
Clinical laboratory testing holding company, from 1987 to 1992. Mr Balthazar
also serves as a director of Decora Industries, Inc. He is a graduate of the
Columbia Law School in New York City.
Frank Bonner, BSc., PhD., was appointed to the Board as Director of Science &
Technology in September 1998. He studied Biochemistry and Toxicology at the
University of Surrey, Guildford (1973-1979). After post-doctoral research in the
Institute of Industrial and Environmental Health, he joined Sterling Winthrop to
establish a Drug Safety department. Following the acquisition of Sterling by
Sanofi, he was appointed Scientific and Administrative Director of the UK
Research Centre in Northumberland, a position he held until joining Huntingdon
in 1997. He is currently Chairman of the British Toxicology Society and serves
on the Research and Development Committee of the Association of the British
Pharmaceutical Industry.
John Caldwell, B.Pharm., PhD., D.Sc., C.Biol., F.I.Biol., was appointed to the
Board as an Independent Non-Executive Director in December 1997. He is Professor
of Biochemical Toxicology and Head of the Division of Biomedical Sciences of the
Imperial College School of Medicine. His distinguished career includes
membership of the UK Committee on Safety of Medicines, Ministry of Agriculture
Fisheries and Food Steering Group for Food Surveillance, permanent membership of
the International Scientific Committee of the International Symposia on Chiral
Discrimination, Honorary Membership of the Royal College of Physicians,
Representative on the Court of the University of Surrey for the British
Pharmacological Society and he is a Past President of the International Society
for the Study of Xenobiotics. He is also a member of the Institute of Directors.
Professor Caldwell has extensive involvement as a consultant with pharmaceutical
companies in Europe, North America and Japan.
Kirby L Cramer was appointed to the Board as an Executive Director in September
1999. He served as Chief Executive Officer of Hazleton Laboratories Corporation
from 1968 and led it to become the world's largest provider of pre-clinical
testing services when it was sold to Corning Inc in 1987. Following the
acquisition he served as Chairman of the Board of Directors of Hazleton from
1987 through 1991. The Hazleton laboratories now form the pre-clinical segment
of Covance. Mr Cramer also currently serves as a direct of D J Orthopedics,
Immunex Corp., SonoSite Inc., Regan MacKenzie Group, Commerce Bancorporation,
Landec Corporation and Northwestern Trust Company. Previously Mr Cramer was a
director of ATL Ultrasound Inc., Unilab Corporation, Pharmaceutical Product
Development Inc., and International Technology.
Joseph L Dowling III was appointed to the Board as an Independent Non-Executive
Director in September 1999. He is the managing general partner and portfolio
manager of Narragansett Asset Management LLC. Prior to forming the fund in
October 1998, Mr Dowling served in various capacities, most recently as a
partner of Oracle Partners, LP, a hedge fund and a partner of Oracle Strategic
Partners, LP, an investment partnership specializing in privately negotiated
transactions. Prior to Oracle, Mr Dowling worked at Tudor Investment Corporation
and Leo Capital, LP.
Julian Griffiths, M.A., F.C.A., was appointed to the Board as Finance
Director in April 1999 and Secretary in February 2000. Prior to joining
Huntingdon he was most recently Vice President of Analytical Services in
the European pre-clinical division of Covance Inc., having spent the previous
nine years as Vice President of Finance in the same organisation. Prior
to that he held various positions with KPMG.
The Articles of Association of the Company provide that, unless and until
otherwise determined by ordinary resolution passed at a general meeting of the
Company, the directors shall be not less than two in number and there shall be
no maximum number of directors. The Company may by ordinary resolution passed at
a general meeting of the Company appoint any person to be a director, either to
fill a casual vacancy or as an addition to the existing board of directors. Any
director appointed by the board of directors holds office only until the next
following general meeting and shall then be eligible for re-appointment but he
is not taken into account in determining the directors or the number who are to
retire by rotation at such meeting. At every annual general meeting one third of
the directors (being those who do not wish to be re-appointed or who have been
the longest in office since their last appointment) must retire from office.
Directors so retiring may be removed from office by resolution of the
shareholders.
No director or executive officer has a family relationship with any other
director or executive officer.
ITEM 11. EXECUTIVE COMPENSATION
In the 12 months ended December 31, 1999 the aggregate compensation of the
executive directors and officers as a group, paid or accrued, was
(pound)1,030,030.
The services of Mr Baker are provided through a management services agreement
with Focused Healthcare Partners ("FHP"), the vehicle through which Mr Baker
provides his services. The agreement provides for a minimum notice of
termination by the Company of twelve months.
Mr Cass has a service contract providing for a minimum notice of termination by
the Company of two years. The contract provides for liquidated damages amounting
to two years' basic salary and an amount equal to twice the annual average of
bonuses, if any, received during the two financial years of the Company
immediately preceding a change of control of the Company (as defined in the
service contract) or in the event of termination in certain circumstances. The
Board has determined that both the period of notice required for termination of
Mr Cass' contract and the change of control provisions are warranted by Mr Cass'
value to the Company.
Dr Bonner and Mr Griffiths each have service contracts providing for a minimum
notice of termination by the Company of twelve months.
Professor Caldwell, Mr Dowling and Mr Balthazar each have service contracts
providing for a minimum notice of termination by the Company of three months. Mr
Cramer does not have a written service contract.
Messrs Cramer, Dowling, Balthazar and Baker and Professor Caldwell retire at the
Annual General Meeting but will offer themselves for re-election. The Company
operates a discretionary bonus plan for executive directors and key managers of
Huntingdon based upon improvements to operating income and achievement of
pre-defined targets. Bonus awards to directors and officers are administered by
the Remuneration Committee. The Committee believes that the discretionary bonus
payments to Mr Baker, Mr Cass and Mr Griffiths in 1999 and to Mr Rice, Prof.
Caldwell and Mr Baker in 1998 reflect their respective contribution to the
development of Huntingdon . No bonus awards were made in respect of 1997.
The following table shows the remuneration of Directors in the 12 Months ended
December 31, 1999, December 31, 1998, and December 31, 1997;
<TABLE>
<CAPTION>
Name of Director 1997 1998 Salary/Fee Pension Other Other 1999
- ---------------- ---- ---- ---------- ------- ------ ----- ----
payments
12 Months 12 Months Contributions Benefits 12 Months
--------- --------- ------------- -------- ---------
(pound) (pound) (pound) (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C> <C> <C>
Mr A H Baker (iii) - 129,231 150,000 49,500 50,000 - 249,500
Dr F W Bonner - 42,466 140,000 7,000 10,000 11,368 168,368
Prof. J Caldwell 2,000 29,000 20,000 - 2,000 - 22,000
Mr B Cass - 73,467 150,000 49,500 50,000 41,467 290,967
Mr C F Cliffe 238,877 479,900 - - - - -
Mr K L Cramer (i) - - 37,085 - - - 37,085
Mr R Devlin (i) - - 6,500 - - - 6,500
Mr J Dowling (i) - - 6,360 - - - 6,360
Mr J T Griffiths (i) - - 78,774 15,754 10,000 21,442 125,970
Dr C M Macdonald 3,787 116,000 9,668 1,027 - - 10,695
Mr R A Pinnington 86,768 67,416 13,718 - - 9,329 23,047
Mr L O Rice 20,000 33,467 - - - - -
Mr M Sandford 63,679 86,700 27,545 3,250 58,743 - 89,538
Mr R E H Slater (ii) 20,000 7,500 - - - - -
<FN>
(i) From appointment
(ii) In addition, professional fees amounting to(pound)40,954 were paid to
Simmons & Simmons, the firm in which Mr Slater is
a partner, in respect of the period ended December 31, 1997.
(iii) The other payments to Mr Baker, Mr Cass, Mr Griffiths and Dr Bonner
are bonuses. The other payment to Mr Sandford is in respect of the
termination of his employment. The other payment
to Professor Caldwell is in respect of his attendance at the
Scientific and Advisory Board Committee Meetings of Huntingdon
Life Sciences Limited.
</FN>
</TABLE>
The following table shows the pensions benefits (excluding additional voluntary
contributions and inflation) earned by Directors in the Huntingdon Life Sciences
Pension and Life Assurance Scheme in the 12 months ended December 31, 1999:
<TABLE>
<CAPTION>
Name of Director Increase in accrued pension Transfer value of Accumulated total accrued pension
during the year increase (i) at year-end (ii)
(pound) (pound) (pound)
<S> <C> <C> <C>
Dr C M Macdonald 869 11,800 6,502
Mr M Sandford 590 3,700 8,565
<FN>
(i) Calculated in accordance with Actuarial Guidance Note GN11
(ii) ayable annually on retirement
</FN>
</TABLE>
One other Director is a member of the Group Personal Pension Plan. The other
Directors' pension contributions are privately invested.
OPTIONS TO PURCHASE SECURITIES FROM THE REGISTRANT
The Unapproved Share Option Plan. On April 8, 1983, the Company adopted the
Unapproved Share Option Plan (the "Unapproved Plan") pursuant to which options
to acquire Ordinary Shares may be granted to any person who is required to
devote substantially the whole of his time (being not less than 25 hours per
week) to serve as a Director or employee of the Company or one of its
subsidiaries. The maximum number of Ordinary Shares which may be issued under
the Unapproved Plan according to the rules thereof is 10% of the issued share
capital of the Company from time to time, less options outstanding under the
Approved Plan from time to time.
An option granted pursuant to the Unapproved Plan may be exercised two years
after the grant in respect of not more than 50% of the Ordinary Shares subject
to the option. An option may be exercised in full between three and seven years
after the grant in respect of the unexercised balance of the Ordinary Shares
subject to the option. Options may be exercised earlier in certain specified
circumstances, including a change in control of 25% or more of the outstanding
Ordinary Shares of the Company.
The Approved Management Share Option Plan. On January 29, 1985, the Company
adopted a second share option plan, the Approved Management Share Option Plan
(the "Approved Plan"), which has been approved by the Board of Inland Revenue
(the "Inland Revenue") pursuant to the Finance Act 1984. The rules of the
Approved Plan broadly follow those of the Unapproved Plan, except that an option
may be exercised, subject to certain exceptions, only between three and ten
years after it is granted.
Pursuant to the Approved Plan, options to acquire Ordinary Shares may be granted
to any Director or employee of the Company whose terms of employment require him
to work for at least thirty-seven and one-half hours per week. Approval of the
Approved Plan by the Inland Revenue means that important personal tax
concessions are available to participants who reside in the UK. The maximum
number of Ordinary Shares which may be issued under the Approved Plan according
to the rules thereof is 10% of the issued share capital from time to time, less
options outstanding under the Unapproved Plan from time to time.
Both the Unapproved Plan and the Approved Plan terminated on December 31, 1997
with respect to the grant of new options. Options outstanding at that date are
not affected by such termination. The grant of options under both the Unapproved
Plan and the Approved Plan was a matter for the discretion of the Board of
Directors of the Company. The consideration payable to the Company for the grant
of an option to acquire Ordinary Shares was the sum of (pound)1. The exercise
price per share at which an option may be exercised is equal to the average of
the middle market quotations on the International Stock Exchange of the United
Kingdom and Republic of Ireland Ltd. for the Ordinary Shares on the five dealing
days prior to the date of grant or, if no established market in the Ordinary
Shares exists, the fair value of an Ordinary Share as determined by the Board.
Generally, an option may not be exercised unless at the date of exercise the
participant is then, and has been continuously since the grant of the option, in
the full-time employ of the Company. This rule, however, is subject to
alteration in specific cases at the discretion of the Board.
At the Extraordinary General Meeting held on September 2, 1998 the Shareholders
approved a new option scheme (the rules of which were amended at the Annual
General Meeting held on June 3, 1999) and a separate Option Agreement with Mr
Baker:
(a) The Huntingdon Life Sciences Group Unapproved Share Option Scheme (the
"Unapproved Share Option Scheme")
(i) 8,000,000 Founder Options had been granted but not relinquished or
exercised as at December 31, 1999 at an option price of 12.5p per
Ordinary Share. The Options may be exercised from the third anniversary
of the date of the grant subject to the share price reaching the
following pre-determined targets for a period of seven consecutive
dealing days at any time after January 1, 1999.
Target price per share Proportion of options
exercisable
25p 25%
50p 50%
75p 75%
100p 100%
(ii) 2,000,000 options, other than Founder Options, which are generally
exercisable between the third and tenth anniversary of the date of
grant subject to the attainment of performance related conditions were
granted on March 29, 1999 at a subscription price of 19.25 pence each
and remained outstanding on December 31, 1999.
All Options lapse on the tenth anniversary of the date of the option grant.
(b) An Option Agreement
Andrew Baker was granted Options over 5,000,000 Ordinary Shares of 5p in
the Company, the principal terms of which are the same as those applicable
to the Founder Options referred to above.
The Huntingdon Life Sciences Group Incentive Option Plan (the "Incentive Option
Plan") The Incentive Option Plan was adopted on June 3, 1999. The Plan was
introduced to run alongside the Unapproved Share Option Scheme described above
and is designed to reward short term improvement in financial performance in the
Company's turn around phase. Options are available for grant to management and
senior staff, subject to the achievement of a performance measure and personal
performance conditions; they may generally be exercised from the third
anniversary of the date of grant and they lapse on the tenth anniversary.
Options have been granted to such employees subject to a performance measure
designed to reward the recipients for returning the Company to profit before
interest and tax in any quarter of 1999 with continual improvement forecast
thereafter. It is intended that further grants will be made.
The Huntingdon Life Sciences Sharesave Scheme (the "Sharesave Scheme") The
Sharesave Scheme was adopted at the Annual General Meeting held on June 3, 1999.
Approximately 55% of eligible employees, who will fund the exercise of their
options with the proceeds of a related Save As You Earn (SAYE) savings contract,
accepted the invitation to join the Scheme. Options may generally be exercised
from the Bonus Date which falls on November 1, 2002. Options generally lapse six
months after the Bonus Date.
Any US subsidiary of the Company, which received the services in respect of
which an option was granted, will be entitled to a deduction in an amount equal
to the compensation taxable to the optionee, in computing its US Federal income
tax. Generally this is in the calendar year in which the optionee is deemed to
have received such compensation.
Under the terms of the various share option arrangements the following options
to purchase Ordinary Shares in the Company have been granted (net of expired
options) but not exercised as of February 29, 2000.
<TABLE>
(i) The Unapproved Share Option Plan
<CAPTION>
Date of Grant Number of shares outstanding Option Price Expiry Date
<S> <C> <C> <C>
December 18, 1995 112,500 (pound)0.77 December 17, 2002
November 21, 1996 60,000 $1.60 November 20, 2003
December 1, 1997 100,000 (pound)0.50 November 30, 2004
December 31, 1997 522,920 (pound)0.465 December 30, 2004
December 31, 1997 680,000 $0.77 December 30, 2004
</TABLE>
<TABLE>
(ii) The Approved Management Share Option Plan
<CAPTION>
Date of Grant Number of shares outstanding Option Price Expiry Date
<S> <C> <C> <C>
February 13, 1995 175, 000 (pound)0.49 February 12, 2005
December 11, 1995 470,000 (pound)0.78 December 10, 2005
December 11, 1995 130,000 $1.19 December 10, 2005
December 18, 1995 59,000 (pound)0.77 December 17, 2005
November 21, 1996 560,000 (pound)0.95 November 20, 2006
December 31, 1997 580,000 (pound)0.465 December 30, 2007
</TABLE>
<TABLE>
(iii) The Unapproved Share Option Scheme and Mr Baker's Option Agreement
<CAPTION>
Date of Grant Number of shares outstanding Option Price Expiry Date
<S> <C> <C> <C>
September 2, 1998 5,000,000 (pound)0.125 September 1, 2008
December 3, 1998 7,000,000 (pound)0.125 December 2, 2008
December 31, 1998 1,000,000 (pound)0.125 December 30, 2008
March 29, 1999 2,000,000 (pound)0.1925 March 28, 2009
</TABLE>
<TABLE>
(iv) Incentive Option Plan
<CAPTION>
Date of Grant Number of shares outstanding Option price Expiry Date
<S> <C> <C> <C>
June 28, 1999 2,550,000 (pound)0.1925 June 27, 2009
September 6, 1999 100,000 (pound)0.175 September 5, 2009
</TABLE>
<TABLE>
(v) Sharesave Scheme
<CAPTION>
Date of Grant Number of shares outstanding Option price Expiry Date
<S> <C> <C> <C>
September 9, 1999 7,088,096 (pound)0.14 May 1, 2003
</TABLE>
In the period since options to acquire shares have been capable of being
exercised to February 29, 2000 options for 3,798,856 shares have been exercised
and the shares issued. The total number of options held by Directors and
Officers as a group as at February 29, 1999 is 12,623,142.
The following table shows the number of share options held by Directors as at
February 29, 2000.
<TABLE>
<CAPTION>
Date of Grant Number Granted Exercise Price Date First Exercisable Expiry Date
<S> <C> <C> <C> <C>
A H Baker
September 2, 1998 5,000,000 (pound)0.125 September 2, 2001 September 1, 2008
F W Bonner
December 31, 1998 500,000 (pound)0.125 December 31, 2001 December 30, 2008
December 1, 1997 100,000 (pound)0.50 December 1, 1999 November 30, 2004
June 29, 1999 250,000 (pound)0.1925 June 28, 2002 June 27, 2009
B Cass
December 3, 1998 5,000,000 (pound)0.125 December 3, 2001 December 2, 2008
September 9, 1999 23,142 (pound)0.14 November 21, 2002 April 30, 2003
K Cramer
March 29, 1999 1,000,000 (pound)0.1925 March 29, 2002 March 28, 2002
J T Griffiths
March 29, 1999 500,000 (pound)0.1925 March 29, 2002 March 28, 2009
June 28, 1999 250,000 (pound)0.1925 June 28, 2002 June 27, 2002
</TABLE>
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS AT
FEBRUARY 29, 2000.
The following table sets forth, as of February 29, 2000, certain information
regarding the beneficial ownership of the Ordinary Shares, by (a) each person or
entity who is known by the Company to own beneficially 5% or more of its
outstanding Ordinary Shares; (b) each Director of the company; and (c) all
Directors and Executive Officers as a group.
<TABLE>
<CAPTION>
Name No. of Shares Percent of Outstanding Ordinary Shares
<S> <C> <C>
Stephens Group Inc 45,572,179 15.66%
Quilcap Corp / Quilcap International Corp 34,157,333 11.74%
Oracle Partners LP 23,333,333 8.02%
Trimark Investment Management Inc. 20,402,500 7.01%
Mr A Baker 10,200,000 3.5%
Mr G Balthazar - *
Dr F W Bonner 17,768 *
Mr B Cass 1,000,000 *
Prof. J Caldwell - -
Mr K Cramer 8,247,167 2.83%
Mr J Dowling III - -
Mr J Griffiths - -
All Executive Officers and Directors as a group 19,464,935 6.69%
- ------------------------------------------------- ------------------------ ----------------------------------------
BNY Nominees Ltd 62,336,440 21.42%
<FN>
* Signifies less than 1%
</FN>
</TABLE>
The shares held by BNY Nominees Ltd. are as Depositary for the Company's ADRs
and may duplicate some of the shareholdings reported above.
From time to time US depositary institutions hold shares on behalf of their
clients to enable a market to be made in the Company's shares. No holdings of 3%
or more have been reported to the Company by those institutions at February 29,
2000.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report
----------------------------------------------
(1) Index to Financial Statements
Page
Report of Deloitte & Touche - Independent Auditors.................20
Report of Arthur Andersen - Independent Auditors...................21
Consolidated Balance Sheets .......................................23
Consolidated Statements of Operations..............................24
Consolidated Statement of Changes in Shareholders' Equity..........25
Consolidated Statement of Cash Flows...............................26
Notes to the Consolidated Financial Statements.....................27
(2) Financial Statement Schedules
Schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes
thereto.
(b) List of Exhibits
Exhibit No. Description of Exhibit
1.1. An agreement between the Company and Kleinwort Benson Limited
dated August 10, 1998 under
2.1 An agreement between the Company, the Directors and various
investors dated August 10,
3.1 Memorandum and new Articles of Association adopted by the Company
on March 22, 2000 FILED
4.1. Deposit Agreement dated June 21, 1983, amended and restated as of
June 6, 1996 between the
4.2 Specimen Certificate for American Depositary Shares. INCORPORATED
BY REFERENCE TO Filing No. 00110173.
4.3 Subscription Agreement dated August 1, 1991 among HIH Capital
Limited ("HCL"), INCORPORATED BY REFERENCE TO Filing No.
00110173.
4.4 Trust Deed, dated August 12, 1991 among HCL, the Company and The
Law Debenture Trust. INCORPORATED BY REFERENCE TO Filing No.
00110173.
4.5 Deed Poll, dated August 12, 1991, executed by the Company
INCORPORATED BY REFERENCE TO Filing No. 00110173.
4.6 Custodian Agreement, dated August 1, 1991 among the Custodian,
HCL, and the Company. INCORPORATED BY REFERENCE TO Filing No.
00110173.
10.1 Equipment Mortgage dated April 20, 1998 between Huntingdon Life
Sciences Ltd and National
10.2 Security Agreement dated April 30, 1998 between Huntingdon Life
Sciences Inc., National
10.3 An agreement dated August 7, 1998 between, inter alia, the
Company, Huntingdon Life
10.4 A bridging facility being made available by National Westminster
Bank PLC in favour of the
10.5 An agreement between the Company, Huntingdon Life Sciences
Limited, Huntingdon Life
10.6 Third Supplemental Deed dated August 7, 1998 between the Company
and National Westminster
10.7 Third Supplemental Deed dated August 7, 1998 between Huntingdon
Life Sciences Ltd and
10.8 Deed of variation dated August 7, 1998 to the Service Contract
dated March 15, 1993
10.9 Service Contract dated August 7, 1998 between Huntingdon Life
Sciences Ltd and Mr M
10.10 Service Contract dated August 7, 1998 between Huntingdon Life
Sciences Ltd and Dr C M
10.11 Deed of variation dated August 7, 1998 to the Contract dated
March 20, 1995 as amended on
10.12 A letter of appointment dated August 7, 1998 between the Company
and Professor J Caldwell.
INCORPORATED BY REFERENCE TO REGISTRANT'S ANNUAL REPORT ON
FORM 20-F FOR THE FISCAL YEAR
10.13 A Management Services Agreement dated August 7, 1998 between the
Company and Focused
10.14 A Deed of Undertaking between the Company and Andrew Baker
INCORPORATED BY REFERENCE TO
10.15 Amendment dated January 26, 2000 to the Management Services
Agreement dated August 7, 1999
10.16 Service Contract dated April 29, 1999 between Huntingdon Life
Sciences Ltd and Mr B Cass
10.17 Service Contract dated April 29, 1999 between Huntingdon Life
Sciences Ltd and Mr J
10.18 Service Contract dated April 29, 1999 between Huntingdon Life
Sciences Ltd and Dr F
10.19 A letter of appointment dated September 7, 1999 between the
Company and Mr J L Dowling
10.20 A letter of appointment dated March 21, 2000 between the Company
and Mr G Balthazar.
10.21 A Management Services Agreement dated December 24, 1999 between
the Company and Rittle
10.22 Executive's Undertaking dated December 24, 1999 between the
Company and Roger Devlin.
10.23 Option Deed dated September 2, 1998 between the Company and
Andrew Baker INCORPORATED BY
10.24 Rules of the Huntingdon Life Sciences Group Unapproved Share
Option Scheme as amended
10.25 Rules of the Huntingdon Life Sciences Group Incentive Option Plan
FILED HEREWITH.
10.26 Rules of the Huntingdon Life Sciences Sharesave Scheme
FILED HEREWITH.
10.27 The Rules of The HIH Share Option Plan. FILED HEREWITH.
10.28 The Rules of The HIH Approved Management Share Option Plan.
FILED HEREWITH.
10.29 A Deed of Variation dated August 6, 1998 between Ciba-Geigy plc,
Huntingdon Life Sciences
10.30 Sale Agreement dated June 23, 1999 between the Company and
Huntingdon Life Sciences Ltd
10.31 Sale Agreement dated July 12, 1999 between the Company and J S
Bloor (Tamworth) Limited
21.1 Subsidiaries FILED HEREWITH
27.1 Financial Data Schedule. FILED HEREWITH.
99.1 Consent Decision and Order dated April 8, 1998 between United
States Department of Agriculture and Huntingdon Life Sciences Inc.
INCORPORATED BY REFERENCE TO REGISTRANT'S ANNUAL REPORT ON
FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.
Reports on Form 8-K
On November 17, 1999, the Company filed a report on Form 8-K announcing that it
had filed Form 10-Q for the quarter ended September 30, 1999.
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, this Annual Report on Form 10-K has been signed below by the
following person on behalf of the Registrant and in the capacities and on the
dates indicated.
HUNTINGDON LIFE SCIENCES GROUP plc
(Registrant)
By: /s/ Brian Cass
Name: Brian Cass
Title: Managing Director/Chief Operating Officer
Date: March 30, 2000
No. 502370
The Companies Act 1985
Public Company Limited by Shares
MEMORANDUM AND ARTICLES OF ASSOCIATION
of Huntingdon Life Sciences Group plc
as at 22nd March 2000
Incorporated the 14th day of December 1951
<PAGE>
The Companies Act 1985
Public Company Limited by Shares
MEMORANDUM OF ASSOCIATION
of Huntingdon Life Sciences Group plc
1. The name of the Company is "HUNTINGDON LIFE SCIENCES GROUP plc".
2. The Company is a public company.
3. The registered office of the Company will be situated in England
and Wales.
4. The objects for which the Company is established are:-
(a) To act or carry on business as a holding company and for
that purpose to acquire and hold either in the name of the
Company or in that of any nominee shares, stocks,
debentures, debenture stock bonds, loans, obligations or
securities of whatsoever nature issued by any company or
body corporate wheresoever incorporate or carrying on
business and to exercise and enforce all rights and powers
conferred by or incident to the ownership thereof;
(b) To control and co-ordinate the administration and operation
of any companies for the time being directly or indirectly
controlled by the Company and to provide service of all
kinds including managerial and other executive, supervisory
and consultant services for or in relation to any company or
body corporate upon such terms as the Directors may think
fit;
(c) To acquire and assume for any estate or interest and to take
options over, construct, develop or exploit any property
real or personal, and rights of any kind and the whole or
any part of the undertaking, assets and liabilities of any
person.
(d) To manufacture, process, import, export, deal in and store
any goods and other things and to carry on the business of
manufacturers, processors, importers, exporters and storers
of and dealers in any goods and other things.
(e) To acquire and exploit lands, mines and mineral rights and
to acquire, explore for and exploit any natural resources
and to carry on any business involving the ownership or
possession of land or other immovable property or buildings
of structures thereon and to construct, erect, install,
enlarge, alter and maintain buildings, plant and machinery
and to carry on business as builders, contractors and
engineers.
(f) To provide services of all descriptions and to carry on
business as advisers, consultants, brokers and agents of
any kind.
(g) To advertise, market and sell the products of the Company
and of any other person and to carry on the business of
advertisers or advertising agents or of a marketing and
selling organisation or of a supplier, wholesaler, retailer,
merchant or dealer of any kind.
(h) To provide technical, cultural, artistic, educational,
entertainment or business material, facilities or services
and to carry on any business involving any such provision.
(i) To lend money, and grant or provide credit and financial
accommodation, to any person and to carry on the business of
a banking, finance or insurance company.
(j) To invest money of the Company in any investments and to
hold, sell or otherwise deal with such investments, and to
carry on the business of a property or investment company.
(k) To acquire and carry on any business carried on by a
subsidiary or a holding company of the Company or another
subsidiary of a holding company of the Company.
(l) To enter into any arrangements with any government or
authority or person and to obtain from any such government
or authority of person any legislation, orders, rights,
privileges, franchises and concessions and to carry out,
exercise and comply with the same.
(m) To borrow and raise money and accept money on deposit and to
secure or discharge any debt or obligation in any manner and
in particular (without prejudice to the generality of the
foregoing) by mortgages of or charges upon all or any part
of the undertaking, property and assets (present and future)
and uncalled capital of the Company or by the creation and
issue of securities.
(n) To enter into any guarantee, contract of indemnity or
suretyship and in particular (without prejudice to the
generality of the foregoing) to guarantee, support or secure,
with or without consideration, whether by personal obligationor
by mortgaging or charging all or any part of the undertaking,
property and assets (present and future) and uncalled
capital of the Company or by both such methods or in any other
manner, the performance of any obligations or commitments of,
and the repayment or payment of the principal amounts of and any
premiums, interest, dividends and other moneys payable on or
in respect to any securities or liabilities of any person,
including (without prejudice to the generality of the foregoing)
any company which is for the time being a subsidiary or a holding
company of the Company or another subsidiary of a holding
company of the Company or otherwise associates with the Company.
(o) To amalgamate or enter into partnership or any profit
sharing arrangement with, or to co-operate or participate in
any way with, or to take over or assume any obligation of,
or to assist or subsidise any person.
(p) To accept, draw, make, create, issue, execute, discount,
endorse, negotiate and deal in bills of exchange, promissory
notes, and other instruments and securities, whether
negotiable or otherwise.
(q) To apply for and take out, purchase or otherwise acquire any
trade and service marks and names, designs, patents, patent
rights, inventions and secret processes and to carry on the
business of an inventor, designer or research organisation.
(r) To sell, exchange, mortgage, charge, let on rent, share of
profit, royalty or otherwise, grant licences, easements,
options, servitudes and other rights over, and in any other
manner deal with, or dispose of, all or any part of the
undertaking, property and assets (present and future) of the
Company for any consideration and in particular (without
prejudice to the generality of the foregoing) for any
securities.
(s) To issue and allot securities of the Company for cash or in
payment or part payment for any real or personal property
purchased or otherwise acquired by the Company or any
services rendered to the Company or as security for any
obligation or amount (even if less than the nominal amount
of such securities) or for any other purpose.
(t) To give any remuneration or other compensation or reward for
services rendered or to be rendered in placing or procuring
subscriptions of, or otherwise assisting in the issue of, any
securities of the Company or in or about the formation of the
Company or the conduct or course of its business, and to
establish or promote, or concur or participate in establishing
or promoting, any company, fund or trust and to subscribe for,
underwrite, purchase or otherwise acquire securities of any
company, fund or trust and to carry on the business of company,
fund, trust or business promoters or managers and of
underwriters or dealers in securities, and to act as
director of and as secretary, manager, registrar or transfer
agent for any other company and to act as trustees of any kind
and to undertake and execute any trust.
(u) To pay all the costs, charges and expenses preliminary or
incidental to the promotion, formation establishment and
incorporation of the Company, and to procure the
registration or incorporation of the Company in or under the
laws of any place outside England.
(v) To grant pensions, annuities, or other allowances, including
allowances on death, to any directors, officers or employees
or former directors, officers or employees of the Company or
any company which at any time is or was a subsidiary or a
holding company of the Company or otherwise associated
with the Company or of any predecessor in business of any of
them, and to the relations, connections or dependants of any
such persons, and to other persons whose service or services
have directly or indirectly been of benefit to the Company
or who the Company considers have any moral claim on the
Company or to their relations, connections or dependants,
and to establish or support any associations, institutions,
clubs, schools, building and housing schemes, funds and trusts,
and to make payments towards insurances or other arrangements
likely to benefit any such persons or otherwise advance the
interests of the Company or of its Members, and to subscribe,
guarantee or pay money for any purpose likely, directly or
indirectly, to further the interests of the Company or of
its Members or for any national, charitable,
benevolent, education, social public, general or useful object.
(w) To cease carrying on or wind up any business or activity of
the Company and to cancel any registration of and to wind up
or procure the dissolution of the Company in any state or
territory.
(x) To distribute any of the property of the Company among its
creditors and Members in specie or kind.
(y) To do all or any of the things or matters aforesaid in any
part of the world and either as principals, agents,
contractors, trustees or otherwise and by or through
trustees, agents or otherwise and either alone or in
conjunction with others.
(z) To carry on any other business or activity and do anything
of nay nature which in the opinion of the Company is or may
be capable of being conveniently carried on or done in
connection with the above, or likely directly or indirectly
to enhance the value of or render more profitable all or any
part of the Company's undertaking, property or assets or
otherwise to advance the interests of the Company or its
Members.
(aa) To do all such other things as in the opinion of the Company
are or may be incidental or conducive to the attainment of
the above objects of any of them.
AND it is hereby declared that "company" in this clause, except where
used in reference to this Company, shall include any partnership or other body
of persons, whether incorporated or not incorporated, and whether formed,
incorporated, domiciled or resident in the United Kingdom or elsewhere, "person"
shall include any company as any other legal or natural person, "securities"
shall include any fully, partly or nil paid or no par value share, stock, unit,
debenture, debenture or loan stock, deposit receipt, bill, note warrant, coupon,
right to subscribe or convert, or similar right or obligation, "and" and "or"
shall mean "and/or" where the context so permits, "other" and "otherwise" shall
not be construed ejusdem generis where a wider construction is possible, and the
objects specified int he different paragraphs so requires, be in any way limited
or restricted by reference to or inference from the terms of any other paragraph
or the name of the Company, but may be carried out in as full and ample a manner
and shall be construed in as wide a sense as if each of the said paragraphs
defined the objects of a separate, distinct and independent company.
5. The liability of the members is limited.
6. The share capital of the Company is (pound)20,000,000 divided into
400,000,000 Ordinary Shares of 5p each. The shares in the original or
any increased capital may be divided into several classes, and there
may be attached thereto respectively any preferential, deferred or
other special rights, privileges, conditions or restrictions as to
dividend, capital, voting or otherwise.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a Company in pursuance of this Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
Company set opposite our respective names.
NAMES, ADDRESSES and DESCRIPTIONS NUMBER OF SHARES TAKEN
OF SUBSCRIBERS BY EACH SUBSCRIBER
ALASTAIR N. WORDEN, ONE
Cromwell House,
Huntingdon.
Consultant Biochemist and
Veterinary Surgeon.
D.M. WORDEN, ONE
Cromwell House,
Huntingdon.
Housewife
C.N. WORDEN, ONE
Cromwell House,
Huntingdon.
Schoolmaster (Retired)
DATED this 1st day of December 1951
WITNESS to the above signatures:-
HAROLD WORDEN
Solicitor,
Blackpool.
<PAGE>
I N D E X
Article No Page No
Accounting Records 156-157 38
Alternate Directors 106 23-24
Auditors 158-159 38-39
Authentication of Documents 136 33
Borrowing Powers 119 28-30
Calls on Shares 21-27 6-7
Capitalisation of Profits 153 37
Destruction of Documents 168 40-41
Directors: Age of 105 23
Alternate 106 23-24
Appointment and Removal 88-92 19-20
Borrowing Powers 119 28-30
Disqualification 95 20-21
Executive Directors 100-104 22
Expenses 94 20
Interests 107-108 24-26
Number of 86 19
Powers - borrowing 119 28-30
general 109-118 26-28
Proceedings of Board 120-131 30-32
Qualification, Shareholding 87 19
Remuneration 93-94 20
Rotation 96-99 21-22
Dividends 137-151 33-37
Employees 172 42
Executive Directors 100-104 22
Forfeiture 28-34 7-8
Form of Registers 155 38
General Meetings: 54-55 12
Notice of 56-57 12-13
Proceedings at 58-66 13-14
Voting at 67-79 14-18
Indemnity 171 41
Interpretation 2 1-3
Notices 160-167 39-40
Proxies 80-85 18-19
Record Dates 154 38
Registered Office 4 3
Reserves 152-153 37
Seals 14, 134-135 27, 33
Secretary 132-133 32
Service of Notices etc 160-167 39-40
Share Capital: 3 3
Alteration of 53 11-12
Increase of 51-52 11
Shares: 9-12 4
Calls on 21-27 6-7
Certificates 13-17 4-5
Equitable interests not recognised 11 4
Forfeiture 28-34 7-8
Issue 9-10 4
Lien 18-20 5-6
Purchase of own 53 11-12
Rights - general 5-6 3
variation of 7-8 3-4
Transfer 35-43 8-9
Transmission 44-48 9-10
Table A 1 1
Untraced Shareholders 49-50 10
Voting 67-79 14-18
Winding Up 169-170 41
<PAGE>
The Companies Act 1985
Public Company Limited by Shares
ARTICLES OF ASSOCIATION
of Huntingdon Life Sciences Group plc
TABLE A
1. No regulations set out in any schedule to any statute concerning
companies shall apply as regulations or articles of the Company.
INTERPRETATION
2. In these Articles unless the context otherwise requires:-
"these Articles" means these Articles of Association in their
present form or as from time to time altered;
"Board" means the Board of Directors of the Company or the Directors
present at a meeting of Directors at which a quorum is present;
"the Companies Acts" means every statute or statutory instrument from
time to time in force concerning companies insofar as the same
applies to the Company;
"CREST Regulations" means the Uncertificated Securities Regulations
1995.
"Executive Director" means an Executive Chairman, Chief Executive
Director, Joint Chief Executive Director, Managing Director, Joint
Managing Director or Assistant Managing Director of the Company or a
Director who is the holder of any other employment or executive
office with the Company;
"Member" in relation to shares means the member whose name is entered
in the register of members as the holder of the shares;
"Office" means the registered office of the Company for the time
being;
"Operator" means CRESTCo. Limited or such other person as may from
time to time be approved by HM Treasury as Operator under the CREST
Regulations;
"Operator instruction" means a properly authenticated dematerialised
instruction attributable to the Operator;
"participating security" means a security title to units of which
is permitted by the Operator to be transferred by means of a
relevant system;
"relevant system" means a computer-based system, and procedures,
which enable title to units of a security to be evidenced and
transferred without a written instrument pursuant to the CREST
Regulations;
"Seal" means the common seal of the Company;
"Secretary" means any person qualified in accordance with the
Companies Acts, appointed by the Board to perform any of the duties
of the Secretary including a joint, temporary or assistant Secretary;
"Securities Seal" means an official seal kept by the Company by
virtue of Section 40 of the Companies Act 1985;
"Transfer Office" means the place where the register of members is
situate for the time being;
"United Kingdom" means Great Britain and Northern Ireland;
the expressions "debenture" and "debenture holder" shall
include debenture stock and debenture stockholder respectively;
the expression "paid up" means paid up or credited as paid up;
the expression "recognised clearing house" and "recognised investment
exchange" shall mean such bodies as shall be granted recognition
under the Financial Services Act 1986;
subject as aforesaid any words or expressions defined in the
Companies Acts in force at the date when these Articles or any part
thereof are adopted shall bear the same meaning in these Articles or
such part (as the case may be);
where for any purpose an ordinary resolution of the Company is
required, a special or extraordinary resolution shall also be
effective;
words denoting the singular shall include the plural and vice versa;
words denoting the masculine shall include the feminine and vice
versa;
words denoting persons shall include corporations;
references to any statute or statutory provision or statutory
instrument shall be construed as relating to any modification or
re-enactment thereof for the time being in force;
references to a share (or to a holding of shares) being in
certificated or uncertificated form are references, respectively to
that share being a certificated or an uncertificated unit of a
security for the purposes of the CREST Regulations.
SHARE CAPITAL
3. The authorised share capital of the Company at the date of the
adoption of these Articles is (pound)20,000,000 divided into
400,000,000 ordinary shares of 5p each.
REGISTERED OFFICE
4. The Office shall be at such place in England as the Board shall from
time to time appoint.
SHARE RIGHTS
5. Subject to the provisions of the Companies Acts and to any rights
attached to any shares or class of shares, and in particular to
those conferring rights of pre-emption and without prejudice to
any rights attached to any shares or class of shares, any share in
the Company may be issued with or have attached thereto
such preferred, deferred, qualified or other rights or subject
to such restrictions, whether as regards dividend, voting,
return of capital or otherwise, as the Company may by ordinary
resolution determine or, if there has not been any such determination
or so far as the same shall not make specific provision, as the
Board may determine.
6. Subject to the provisions of the Companies Acts and to any rights
attached to any shares or class of shares any shares may, with the
sanction of a specialresolution, be issued on terms that they are,
or at the option of the Company or the Member are liable, to be
redeemed on such terms and in such manner as may be provided for by
these Articles.
VARIATION OF RIGHTS
7. Subject to the provisions of the Companies Acts all or any of the
rights for the time being attached to any class of shares for the
time being issued may from time to time (whether or not the Company
is being wound up) be varied or abrogated with the consent in
writing of the holders of not less than three-quarters in
nominal value of the issued shares of that class or with the sanction
of an extraordinary resolution passed at a separate general meeting of
the holders of the shares of the class. To any such separate general
meeting (and to any separate meeting of the holders of shares of a
particular class convened otherwise than in connection with the
variation or abrogation of the rights attached to shares of that
class) all the provisions of these Articles as to general meetings
of the Company and the proceedings thereat shall mutatis mutandis
apply, but so that the necessary quorum shall be two or more persons
holding or representing by proxy not less than one-third in nominal
value of the issued shares of the class, that every holder of
shares of the class shall be entitled on a poll to one vote for
every such share held by him, that any holder of shares of the class
present in person or by proxy may demand a poll and that at any
adjourned meeting of such holders one holder present in person or by
proxy (whatever the number of shares held by him) shall be a quorum
and for the purposes of this Article one holder present in person or
by proxy may constitute a meeting. The foregoing provisions of this
Article shall apply to the variation or abrogation of the special
rights attached to some only of the shares of any class as if each
group of shares of the class differently treated formed a separate
class the special rights whereof are to be varied.
8. The special rights attached to any class of shares having preferential rights
shall not unless otherwise expressly provided by the terms of issue thereof be
deemed to be varied by the creation or issue of further shares ranking as
regards participation in the profits or assets of the Company in some or all
respects pari passu therewith but in no respect in priority thereto or by the
purchase by the Company of its own shares.
SHARES
9. Subject to the provisions of the Companies Acts and these Articles, all
unissued shares of the Company shall be at the disposal of the Board, which may
offer, allot, grant options over or otherwise dispose of them to such persons,
at such times and for such consideration and upon such terms and conditions as
the Board may determine.
10. The Company may exercise all powers of paying commissions conferred or
permitted by the Companies Acts and the commissions may be satisfied by the
payment of cash or by the allotment of fully or partly paid shares or partly in
one way and partly in the other. The Company may also on any issue of shares pay
such brokerage as may be lawful.
11. Except as required by law, no person shall be recognised by the Company as
holding any share upon any trust and (except only as otherwise provided by these
Articles or by law) the Company shall not be bound by or required in any way to
recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share
or any other right in respect of any share except an absolute right to the
entirety thereof in the registered holder.
12. The Board may refuse to register an allotment of shares (whether fully paid
or not) in favour of more than four persons jointly. If the Board refuses to
register an allotment it shall within two months after the date on which either
the letter of allotment was lodged with the Company (in the case of shares in
certificated form) or the Operator instruction was received by the Company (in
the case of shares held in uncertificated form) send to the allottee notice of
the refusal. The Board may at any time after the allotment of any share but
before any person has been entered in the register of members as the holder
recognise a renunciation thereof by the allottee in favour of some other person
and may accord to any allottee of a share a right to effect such renunciation
upon and subject to such terms and conditions as the Board may think fit to
impose.
SHARE CERTIFICATES
13. Any person whose name is entered in the register of members in respect of
any shares in certificated form of any one class upon the issue or transfer
thereof shall be entitled without payment within one month (or such longer
period as the terms of issue shall provide) after allotment or (in the case of a
transfer of fully-paid shares) within five business days after lodgment of a
transfer or (in the case of a transfer of partly-paid shares) within two months
after lodgment of a transfer to one certificate for all his shares of any one
class or (upon payment of such charges as the Board from time to time
determines) several certificates each for one or more of his shares of any one
class.
Where some only of the shares comprised in a share certificate are transferred
the old certificate shall be cancelled and a new certificate for the balance of
such shares issued in lieu without payment. Provided that the Company shall not
be bound to register more than four persons as the joint holders of any shares.
14. If a share certificate is defaced, worn out, lost or destroyed it may be
replaced on request with a new certificate representing the same shares but on
such terms (if any) as to evidence and indemnity and to payment of any
exceptional out-of-pocket expenses of the Company and, in case of defacement or
wearing out, on delivery of the old certificate to the Company. In the case of
shares held jointly by several persons any such request may be made by any one
of the joint holders.
15. All forms of certificate for share or loan capital or other securities of
the Company (other than letters of allotment, scrip certificates and other like
documents) shall, except to the extent that the terms and conditions for the
time being relating thereto otherwise provide, be issued under a Seal or
otherwise executed by the Company in a manner permitted by the Companies Actsand
shall specify the number and class of shares to which it relates and the amount
paid up thereon. The Board may by resolution determine, either generally or in
any particular case or cases, that any signatures on any such certificates need
not be autographic but may be affixed to such certificate by some mechanical
means or may be printed thereon or that such certificates need not be signed by
any person. No certificate shall be issued representing shares of more than one
class. No certificate shall normally be issued in respect of shares held by a
recognised clearing house or a nominee of a recognised clearing house or of a
recognised investment exchange.
In the case of a share held jointly by several persons in certificated form, the
Company shall not be bound to issue more than one certificate therefor and
delivery of a certificate to one of the joint holders shall be sufficient
delivery to all.
16. Any two or more certificates representing shares of any one class held by
any Member may at his request be cancelled and a single new certificate for such
shares issued in lieu upon payment of such charges as the Board from time to
time determines.
17. If any Member shall surrender for cancellation a share certificate
representing shares held by him and request the Company to issue in lieu two or
more share certificates representing such shares in such proportions as he may
specify, the Board may, if it thinks fit and upon payment of such charges as it
may from time to time determine, comply with such request.
LIEN
18. The Company shall have a first and paramount lien on every share (not being
a fully paid share) for all moneys, whether presently payable or not, called or
payable, at a date fixed by or in accordance with the terms of issue of such
share, in respect of such share. The Board may at any time either generally or
in any particular case waive any lien that has arisen, or declare any share to
be wholly or in part exempt from the provisions of this Article. The Company's
lien on a share shall extend to all dividends and other moneys payable in
respect of it.
19. The Company may sell, in such manner as the Board may think fit, any share
on which the Company has a lien, but no sale shall be made unless some sum in
respect of which the lien exists is presently payable nor until the expiration
of fourteen days after a notice in writing, stating and demanding payment of the
sum presently payable and giving notice of the intention to sell in default of
such payment, has been served on the holder for the time being of the share or
the person entitled thereto by reason of his death or bankruptcy or otherwise by
operation of law.
20. The net proceeds of the sale by the Company of any shares on which it has a
lien shall be applied in or towards payment or discharge of the amount in
respect of which the lien exists so far as the same is presently payable, and
any residue shall (upon surrender to the Company for cancellation of the
certificate for the shares sold and subject to a like lien for sums not
presently payable as existed upon the shares prior to the sale) be paid to the
person entitled to the shares at the time of such sale of the shares. For giving
effect to any such sale the Board may authorise some person to transfer the
shares sold to or in accordance with the direction of the purchaser thereof. The
purchaser shall be registered as the holder of the share and he shall not be
bound to see to the application of the purchase money, nor shall his title to
the share be affected by any irregularity or invalidity in the proceedings
relating to the sale.
CALLS ON SHARES
21. The Board may from time to time make calls upon the Members in respect of
any moneys unpaid on their shares (whether on account of the nominal amount of
the shares or, when permitted, by way of premium) but, subject always to, he
terms of issue thereof, and each Member shall (subject to the Company serving
upon him at least fourteen days' notice specifying the time or times and place
of payment) pay to the Company at the time or times and place so specified the
amount called on his shares. A call may, before receipt by the Company of a sum
due thereunder, be revoked or postponed in whole or in part as the Board may
determine. A Member shall remain liable for calls made upon him notwithstanding
the subsequent transfer of the shares in respect whereof the call was made.
22. A call may be made payable by instalments and shall be deemed to have been
made at the time when the resolution of the Board authorising the call was
passed.
23. The joint holders of a share shall be jointly and severally liable to pay
all calls in respect thereof.
24. If a sum called in respect of a share shall not be paid before or on the day
appointed for payment thereof, the person from whom the sum is due shall pay
interest on the sum from the day appointed for payment thereof to the time of
actual payment at such rate, not exceeding 15 per cent per annum, as the Board
may determine, but the Board shall be at liberty to waive payment of such
interest wholly or in part.
25. Any sum which, by the terms of issue of a share, becomes payable on
allotment or at any date fixed by or in accordance with such terms of issue,
whether on account of the nominal amount of the share or by way of premium,
shall for all the purposes of these Articles be deemed to be a call duly made,
notified and payable on the date on which, by the terms of issue, the same
become payable and, in case of non-payment, all the relevant provisions of these
Articles as to payment of interest, forfeiture or otherwise shall apply as if
such sum had become payable by virtue of a call duly made and notified.
26. The Board may on the issue of shares differentiate between the allottees
or holders as to the amount of calls to be paid and the times of payment.
27. The Board may, if it thinks fit, receive from any Member willing to advance
the same all or any part of the moneys uncalled and unpaid upon any shares held
by him and upon all or any of the moneys so advanced may (until the same would,
but for such advance, become presently payable) pay interest at such rate, not
exceeding (unless the Company by ordinary resolution shall otherwise direct) 15
per cent per annum, as may be agreed upon between the Board and the Member
paying such sum in advance.
FORFEITURE OF SHARES
28. If a Member fails to pay any call or instalment of a call on the day
appointed for payment thereof, the Board may at any time thereafter during such
time as any part of such call or instalment remains unpaid serve a notice on him
requiring payment of so much of the call or instalment as is unpaid, together
with any interest which may have accrued and any expenses incurred by the
Company by reason of such non-payment.
29. The notice shall name a further day (not being less than seven days from the
date of the notice) on or before which, and the place where, the payment
required by the notice is to be made and shall state that in the event of
non-payment on or before the day and at the place appointed, the shares in
respect of which such call was made or instalment is payable will be liable to
be forfeited. The Board may accept the surrender of any share liable to be
forfeited hereunder and, in such case, references in these Articles to
forfeiture shall include surrender.
30. If the requirements of any such notice as aforesaid are not complied with,
any share in respect of which such notice has been given may at any time
thereafter, before payment of all calls or instalments and interest due in
respect thereof has been made,be forfeited by a resolution of the Board to that
effect. Such forfeiture shall include all dividends or other moneys payable in
respect of the forfeited shares and not paid before the forfeiture.
31. When any share has been forfeited, notice of the forfeiture shall be served
upon the person who was before forfeiture holder of the share; but no forfeiture
shall be in any manner invalidated by any omission or neglect to give such
notice as aforesaid.
32. Until cancelled in accordance with the requirements of the Companies Acts, a
forfeited share shall be deemed to be the property of the Company and may,
subject to the provisions of the Companies Acts, be sold, re-allotted or
otherwise disposed of either to the person who was, before forfeiture, the
holder thereof or entitled thereto or to any other person upon such terms and in
such manner as the Board shall think fit, and at any time before a sale,
re-allotment or disposition the forfeiture may be annulled on such terms as the
Board may think fit.
33. A person whose shares have been forfeited shall thereupon cease to be a
Member in respect of the forfeited shares, and shall surrender to the Company
for cancellation the certificates for the shares forfeited, but shall,
notwithstanding the forfeiture, remain liable to pay to the Company all moneys
which at the date of forfeiture were presently payable by him to the Company in
respect of the shares with interest thereon at the rate of 15 per cent per annum
(or such lower rate as the Board may determine) from the date of forfeiture
until payment, and the Company may enforce payment without being under any
obligation to make any allowance for the value of the shares forfeited or waive
payment in whole or in part.
34. A statutory declaration in writing that the declarant is a Director or the
Secretary of the Company and that a share has been duly forfeited or sold to
satisfy a lien on the date stated in the declaration shall be conclusive
evidence of the facts therein stated as against all persons claiming to be
entitled to the share. The Company may receive the consideration (if any) given
for the share on the sale, re-allotment or disposition thereof and the Board may
authorise some person to transfer the share to the person to whom the same is
sold, re-allotted or disposed of, and he shall thereupon be registered as the
holder of the share and shall not be bound to see to the application of the
purchase money (if any) nor shall his title to the share be affected by any
irregularity or invalidity in the proceedings relating to the forfeiture, sale,
re-allotment or disposal of the share.
TRANSFER OF SHARES
35. Subject to such of the restrictions of these Articles as may be applicable,
any Member may transfer all or any of his shares which are in certificated form
by an instrument of transfer in the usual common form or in any other form which
the Board may approve.
36. All transfers of shares which are in uncertificated form may be effected by
means of a relevant system.
37. The instrument of transfer of a share shall be signed by or on behalf of the
transferor and (in the case of a partly paid share) the transferee, and the
transferor shall be deemed to remain the holder of the share until the name of
the transferee is entered in the register of members in respect thereof. All
instruments of transfer, when registered, may be retained by the Company. Any
instrument of transfer which the Board declines to register shall (in the
absence of suspected fraud or crime involving dishonesty in relation to the
transfer) be returned to the person presenting the same.
38. The registration of transfers may be suspended at such times and for such
periods as the Board may from time to time determine and either generally or in
respect of any class of shares. The register of members shall not be closed for
more than thirty days in any year except that in respect of shares which are
participating securities, the register shall not be closed without the consent
of the Operator.
39. The Board may, in its absolute discretion and without assigning any reason
therefor, decline to register any transfer of any share in a certificated form
which is not a fully paid share provided that any such refusal does not prevent
dealing in partly-paid shares from taking place on an open and proper basis.
40. The Board may refuse to register a transfer of shares (whether fully-paid or
not) made to or by an infant or patient within the meaning of the Mental Health
Act 1983 or in favour of more than four persons jointly.
41. The Board may decline to recognise any instrument of transfer relating to
shares in certificated form unless the instrument of transfer is duly stamped,
is in respect of only one class of share and is lodged at the Transfer Office
accompanied by the relevant share certificate(s) and such other evidence as the
Board may reasonably require to show the right of the transferor to make the
transfer (and, if the instrument of transfer is executed by some other person on
his behalf, the authority of that person so to do). In the case of a transfer in
certificated form by a recognised clearing house or a nominee of a recognised
clearing house or of a recognised investment exchange the lodgment of share
certificates will only be necessary if and to the extent that certificates have
been issued in respect of the shares in question.
42. If the Board refuses to register a transfer it shall within two months after
the date on which either the transfer was lodged with the Company (in the case
of shares held in certificated form) or the Operator instruction was received by
the Company (in the case of shares held in uncertificated form) send to the
transferee notice of the refusal.
43. No fee shall be charged by the Company for registering any transfer,
probate, letters of administration, certificate of death or marriage, power of
attorney, distringas or stop notice, order of court or other instrument relating
to or affecting the title to any share or otherwise making any entry in the
register of members relating to any share.
TRANSMISSION OF SHARES
44. Subject to the Companies Acts, the Board may determine that any class of
shares may be held in uncertificated form and that title to such shares may be
transferred by means of a relevant system or that shares of any class should
cease to be held and transferred as aforesaid.
45. Provisions of these Articles shall not apply to shares of any class which
are in uncertificated form to the extent that such provisions are inconsistent
with:
(a) the holding of shares of that class in uncertificated form;
(b) the transfer of title to shares of that class by means of a relevant
system; or
(c) any provision of the CREST Regulations.
46. In the case of the death of a Member the survivor or survivors, where the
deceased was a joint holder, and the executors or administrators of the
deceased, where he was a sole or only surviving holder, shall be the only
persons recognised by the Company as having any title to his shares; but nothing
herein contained shall release the estate of a deceased holder from any
liability in respect of any share held by him solely or jointly with other
persons.
47. Any person becoming entitled to a share in consequence of the death or
bankruptcy of a Member or otherwise by operation of law may, subject as
hereinafter provided and upon such evidence being produced as may from time to
time be required by the Board as to his entitlement, either be registered
himself as the holder of the share or elect to have some person nominated by him
registered as the transferee thereof. If the person so becoming entitled elects
to be registered himself, he shall deliver or send to the Company a notice in
writing signed by him stating that he so elects. If he shall elect to have his
nominee registered, he shall signify his election by signing an instrument of
transfer of such share in favour of his nominee. All the limitations,
restrictions and provisions of these Articles relating to the right to transfer
and the registration of transfers of shares shall be applicable to any such
notice or instrument of transfer as aforesaid as if the death or bankruptcy of
the Member or other event giving rise to the transmission had not occurred and
the notice or instrument of transfer were an instrument of transfer signed by
such Member.
48. Save as otherwise provided by or in accordance with these Articles a person
becoming entitled to a share in consequence of the death or bankruptcy of a
Member or otherwise by operation of law shall (upon such evidence being produced
as may from time to time be required by the Board as to his entitlement) be
entitled to receive and may give a discharge for any dividends or other moneys
payable in respect of the share, but he shall not be entitled in respect of the
share to receive notices of or to attend or vote at general meetings of the
Company or, save as aforesaid, to exercise in respect of the share any of the
rights or privileges of a Member until he shall have become registered as the
holder thereof. The Board may at any time give notice requiring him to transfer
the share and if the notice is not complied with within sixty days, the Board
may thereafter withhold payment of all dividends and other moneys payable in
respect of the share until the requirements of the notice have been complied
with.
UNTRACED SHAREHOLDERS
49. The Company shall be entitled to sell the share of a Member or
the shares to which a person is entitled by virtue of transmission
on death or bankruptcy or otherwise by operation of law if and
provided that:-
a) during the period of twelve years prior to the date of the publication
of the advertisements referred to in paragraph (b) below (or if
published on different dates, the first thereof) no communication
has been received by the Company from the Member or the person
entitled by transmission or otherwise by operation of law and no
cheque or warrant sent by the Company through the post in a pre-paid
cover addressed to the Member or to the person entitled by
transmission or otherwise by operation of law to the shares at his
address on the register of members or otherwise supplied by him
pursuant to these Articles or otherwise the last known address
given by the Member or the person entitled by transmission or
otherwise by operation of law to which cheques and warrants are to
be sent has been cashed or other directed payment
system has worked and at least three dividends in respect of the
shares in question have become payable and no dividend in respect
of those shares has been claimed; and
b) the Company shall on expiry of the said period of twelve years have
inserted advertisements in both a national newspaper and in a
newspaper circulating in the area in which the address referred to in
paragraph (a) above is located giving notice of its intention to sell
the said shares; and
c) during the period of three months following the publication of the
said advertisements the Company shall have received no communication
from such Member or person; and
d) notice shall have been given to The Stock Exchange in London of its
intention to make such sale.
50. To give effect to any such sale the Company may appoint any person to
execute as transferor an instrument of transfer of the said shares and such
instrument of transfer shall be as effective as if it had been executed by the
registered holder of or person entitled by transmission or otherwise by
operation of law to such shares and the title of the transferee shall not be
affected by any irregularity or invalidity in the proceedings relating thereto.
The net proceeds of sale shall belong to the Company which shall be obliged to
account to the former Member or other person previously entitled as aforesaid
for an amount equal to such proceeds and shall enter the name of such former
Member or other person in the books of the Company as a creditor for such amount
which shall be a permanent debt of the Company. No trust shall be created in
respect of the debt, no interest shall be payable in respect of the same and the
Company shall not be required to account for any money earned on the net
proceeds, which may be employed in the business of the Company or invested in
such investments (other than shares of the Company or its holding company if
any) as the Board may from time to time think fit.
INCREASE OF CAPITAL
51. The Company may from time to time by ordinary resolution increase its
capital by such sum to be divided into shares of such amounts as the resolution
shall prescribe.
52. The new shares shall be subject to all the provisions of these Articles with
reference to allotment, lien, the payment of calls, forfeiture, transfer,
transmission and otherwise.
ALTERATIONS OF CAPITAL
53.
(a) The Company may from time to time by ordinary resolution:-
(i) consolidate and divide all or any of its share capital
into shares of larger amount than its existing shares;
(ii) sub-divide its shares or any of them into shares of smaller
amount than is fixed by the Memorandum of Association
(subject, nevertheless, to the provisions of the Companies
Acts) and so that the resolution whereby any share is
sub-divided may determine that as between the holders of the
shares resulting from such sub-division one or more of the
shares may have any such preferred or other special rights
over, or may have such deferred or qualified rights or be
subject to any such restrictions as compared with, the other
or others as the Company has power to attach to unissued or
new shares;
(iii) cancel any shares which at the date of the passing of the
resolution have not been taken or agreed to be taken by any
person and diminish the amount of its authorised share
capital by the amount of the shares so cancelled.
(b) Subject to the provisions of the Companies Acts and to any
confirmation or consent required by law, the Company may reduce its
authorised and issued share capital or any capital redemption
reserve, any share premium account or other undistributable reserve
in any manner.
(c) Subject to the provisions of the Companies Acts and these Articles
and to any confirmation or consent required by law, the Company
may from time to time purchase its own shares (including any
redeemable shares) provided that if there are in issue any
convertible shares of the Company, then no purchase by the Company
of any of its own shares shall take place unless it has been
sanctioned by an extraordinary resolution passed at a separate
class meeting of the holders of each class of convertible shares.
Neither the Company nor the Board shall be required to select the
shares to be purchased rateably or in any other particular
manner as between the holders of shares of the same class or as
between them and the holders of shares of any other class or in
accordance with the rights as to dividend or capital conferred
by any class of shares.
Whenever as a result of a consolidation or sub-division of shares any Members
would become entitled to fractions of a share, the Board may deal with the
fractions as it thinks fit and in particular may sell the shares representing
the fractions to any person (including, subject to the provisions of the
Companies Acts, the Company) and distribute the net proceeds of sale (subject to
retention by the Company of amounts not exceeding (pound)3 (or such other amount
as the Board from time to time determines) due to any Member) in due proportion
among those Members and the Board may authorise some person to transfer or
deliver the shares to, or in accordance with the directions of, the purchaser.
The person to whom any shares are transferred or delivered shall not be bound to
see to the application of the purchase money nor shall his title to the shares
be affected by any irregularity in, or invalidity of, the proceedings relating
to the sale.
GENERAL MEETING
54. The Board shall convene and the Company shall hold general meetings as
annual general meetings in accordance with the requirements of the Companies
Acts at such times and places as the Board shall appoint. Any general meeting of
the Company other than an annual general meeting shall be called an
extraordinary general meeting.
55. The Board may, whenever it thinks fit, and shall following a requisition, in
accordance with the Companies Acts, proceed to convene an extraordinary general
meeting.
NOTICES OF GENERAL MEETINGS
56. An annual general meeting and a meeting called for the passing of a special
resolution, or, (save as provided in the Companies Acts) a resolution of which
special notice has been given to the Company shall be called by not less then
twenty-one days' notice in writing and a meeting other than an annual general
meeting or a meeting called for the passing of a special resolution shall be
called by not less than fourteen days' notice in writing. The notice shall be
exclusive of the day on which it is served or deemed to be served and of the day
for which it is given, and shall specify the place, day and time of the meeting,
and, in the case of special business, the general nature of that business, and
there shall appear with reasonable prominence in or by way of note to every such
notice or any document accompanying the notice convening the meeting a statement
that a Member entitled to attend and vote is entitled to appoint one or more
proxies to attend and on a poll vote instead of him and that a proxy need not be
a Member of the Company. The notice convening an annual general meeting shall
specify the meeting as such, and the notice convening a meeting to pass a
special or extraordinary resolution shall specify the intention to propose the
resolution as a special or extraordinary resolution as the case may be. Notice
of every general meeting shall be given in manner hereinafter mentioned to all
Members other than such as under the provisions of these Articles or the terms
of issue of the shares they hold, are not entitled to receive such notices from
the Company, to all persons entitled to a share by reason of the death or
bankruptcy of a Member, and also to the auditors for the time being of the
Company.
Notwithstanding that a meeting of the Company is called by shorter
notice than that specified in this Article, it shall be deemed to have been duly
called if it is so agreed:-
(a) in the case of a meeting called as an annual general meeting, by
all the Members entitled to attend and vote thereat; and
(b) in the case of any other meeting, by a majority in number of the
Members having a right to attend and vote at the meeting, being a
majority together holding not less than 95 per cent in nominal value
of the shares giving that right.
57. Any Member present, either personally or by proxy, at any meeting of the
Company or class of Members of the Company shall for all purposes be deemed to
have received due notice of such meeting and, where requisite, of the purposes
for which such meeting was convened.
PROCEEDINGS AT GENERAL MEETINGS
58. All business shall be deemed special that is transacted at an
extraordinary general meeting and also all business that is transacted at an
annual general meeting with the exception of:
(a) the declaration and sanctioning of dividends;
(b) the receipt and/or adoption of the accounts the reports of the
Directors and auditors and other documents required to be attached
or annexed to the accounts;
(c) the election of Directors in place of those retiring (by rotation or
otherwise);
(d) the appointment of auditors where special notice of the resolution
for such appointment is not required by the Companies Acts; and
(e) the fixing of, or the determining of the method of fixing, the
remuneration of the auditors.
59. No business shall be transacted at any general meeting unless a quorum is
present when the meeting proceeds to business, but the absence of a quorum shall
not preclude the appointment, choice or election of a chairman which shall not
be treated as part of the business of the meeting. Save as otherwise provided by
these Articles, at least two Members present in person or by proxy and entitled
to vote shall be a quorum for all purposes. A corporation being a Member shall
be deemed for the purpose of these Articles to be present in person if
represented by proxy or in accordance with the provisions of the Companies Acts.
60. The Board may make arrangements for Members or their proxies to participate
in any general meeting by means of a form of audio-visual link. Such persons
shall be deemed to be present at the general meeting and the chairman of the
meeting shall make appropriate arrangements for such persons to vote on any show
of hands or poll as the case may require.
61. If within five minutes (or such longer time as the chairman of the meeting
may determine to wait) after the time appointed for the meeting a quorum is not
present, or if during the meeting a quorum ceases to be present the meeting, if
convened on the requisition of the Members, shall be dissolved. In any other
case it shall stand adjourned to such other day and such time and place as may
have been specified for the purpose in the notice convening the meeting or (if
not so specified) as the chairman of the meeting may determine.
62. Each Director shall be entitled to attend and speak at any general meeting
of the Company.
63. The Chairman (if any) of the Board or, in his absence, a Deputy Chairman (if
any) shall preside as chairman at every general meeting. If there is no such
Chairman or Deputy Chairman, or if at any meeting neither the Chairman nor a
Deputy Chairman is present within five minutes after the time appointed for
holding the meeting, or if neither of them is willing to act as chairman, the
Directors present shall choose one of their number to act, or if one Director
only is present, he shall preside as chairman if willing to act. If no Director
is present, or if each of the Directors present declines to take the chair, the
persons present and entitled to vote on a poll shall elect one of their number
to be chairman.
64. The chairman of any meeting may at any time without the consent of the
meeting adjourn any meeting (whether or not it has commenced or a quorum
is present) to another time or place where it appears to him that the
Members wishing to attend cannot be conveniently accommodated in the place
appointed for the meeting or are otherwise unable to see, listen to and
participate in the proceedings by the use of any form of audio-visual link
or the conduct of persons present prevents or is likely to prevent the
orderly continuation of business or an adjournment is otherwise necessary so
that the business of the meeting may be properly conducted. The chairman of
any meeting at which a quorum is present may with the consent of the meeting
(and shall if so directed by the meeting) adjourn the meeting from time to
time (or sine die) and from place to place, but no business shall be
transacted at any adjourned meeting except business which might lawfully
have been transacted at the meeting from which the adjournment took place.
Where a meeting is adjourned sine die, the time and place for the adjourned
meeting shall be fixed by the Board. When a meeting is adjourned for thirty
days or more or sine die, not less than seven days' notice of the
adjourned meeting shall be given in like manner as in the case of the original
meeting.
Save as expressly provided by these Articles, it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting.
65. The Board and, at any general meeting, the chairman may make any arrangement
and impose any requirement or restriction which it or he (as appropriate)
considers appropriate to ensure the security and orderly conduct of a general
meeting including, without limitation, requirements for evidence of identity to
be produced by those attending the meeting, the searching of their personal
property and the restriction of items which may be taken into the meeting place.
The Board, and at any general meeting the chairman, is entitled to refuse entry
to or eject a person who refuses to comply with these arrangements, requirements
or restrictions or who disrupts the proper and orderly conduct of the meeting.
66. If an amendment shall be proposed to any resolution under consideration but
shall in good faith be ruled out of order by the chairman of the meeting the
proceedings on the substantive resolution shall not be invalidated by any error
in such ruling. In the case of a resolution duly proposed as a special or
extraordinary resolution no amendment thereto (other than a mere clerical
amendment to correct a patent error) may in any event be considered or voted
upon.
VOTING
67. At any general meeting a resolution put to the vote of the meeting shall be
decided on a show of hands unless (before or on the declaration of the result of
the show of hands or on the withdrawal of any other demand for a poll) a poll is
duly demanded. Subject to the provisions of the Companies Acts a poll may be
demanded by:-
(a) the chairman of the meeting; or
(b) at least three Members present in person or by proxy and entitled to
vote; or
(c) any Member or Members present in person or by proxy and representing
in the aggregate not less than one-tenth of the total voting rights
of all Members having the right to attend and vote at the meeting; or
(d) any Member or Members present in person or by proxy and holding
shares conferring a right to attend and vote at the meeting on which
there have been paid up sums in the aggregate equal to not less than
one-tenth of the total sum paid up on all shares conferring that
right.
Unless a poll is so demanded and the demand is not withdrawn, a
declaration by the chairman that a resolution has, on a show of hands, been
carried or carried unanimously or by a particular majority or not carried by a
particular majority or lost shall be final and conclusive, and an entry to that
effect in the minute book of the Company shall be conclusive evidence of the
fact without proof of the number or proportion of the votes recorded for or
against such resolution.
68. If a poll is duly demanded and is not withdrawn pursuant to Article 70 it
shall be taken in such manner (including the use of ballot or voting papers or
tickets) as the chairman of the meeting may direct and the result of the poll
shall be deemed to be the resolution of the meeting at which the poll was
demanded.
69. A poll demanded on the election of a chairman, or on a question of
adjournment, shall be taken forthwith. A poll demanded on any other question
shall be taken in such manner and either forthwith or at such time (being not
later than 30 days after the date of the demand) and place as the chairman shall
direct. The chairman of the meeting may (and if so directed by the meeting
shall) appoint scrutineers (who need not be Members) and may adjourn the meeting
to some place and time fixed by him for the purpose of declaring the result of
the poll. It shall not be necessary (unless the chairman otherwise directs) for
notice to be given of a poll.
70. The demand for a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which the poll has been
demanded, and it may be withdrawn with the consent of the chairman at any time
before the taking of the poll. A demand so withdrawn shall not be taken to have
invalidated the result of a show of hands declared before the demand was made.
71. On a poll votes may be given either personally or by proxy.
72. A person entitled to more than one vote on a poll need not if he
votes use all his votes or cast all the votes he uses in the same way.
73. In the case of an equality of votes at a general meeting, whether on a show
of hands or on a poll, the chairman of such meeting shall be entitled to a
second or casting vote.
74. Subject to any special terms as to voting upon which any shares may be
issued or may for the time being be held, on a show of hands every Member who is
present in person at a general meeting of the Company shall have one vote, and
on a poll every Member who is present in person or by proxy shall have one vote
for every (pound)0.05 nominal amount of share capital of which he is the holder.
75. In the case of joint holders of a share the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and for this purpose seniority shall be
determined by the order in which the names stand in the register of members in
respect of the joint holding. 76. Where in England or elsewhere a receiver or
other person (by whatever name called) has been appointed by any court claiming
jurisdiction in that behalf to exercise powers with respect to the property or
affairs of any Member on the ground (however formulated) of mental disorder, the
Board may in its absolute discretion, upon or subject to production of such
evidence of the appointment as the Board may require, permit such receiver or
other person on behalf of such Member to vote in person or by proxy at any
general meeting or to exercise any other right conferred by membership in
relation to meetings of the Company.
77. For the purpose of determining which persons are entitled to attend or vote
at a meeting and how many votes such person may cast, the Company may specify in
the notice of the meeting a time, not more than 48 hours before the time fixed
for the meeting, by which a person must be entered on the register of members in
order to have the right to attend or vote at the meeting.
78.
(a) No Member shall, unless the Board otherwise determines, be entitled to vote
at any general meeting or meeting of the holders of any class of shares of the
Company either personally or by proxy or to exercise any other right conferred
by membership in relation to meetings of the Company or of holders of any class
of shares of the Company unless all calls or other sums presently payable by him
in respect of shares in the Company have been paid.
(b) If any Member, or any other person appearing to be interested in shares held
by such Member, has been duly served with a notice under Section 212 of the
Companies Act 1985 and is in default for the prescribed period in supplying to
the Company the information thereby required, then (unless the Board otherwise
determines) in respect of:-
(i) the shares comprising the shareholding account in the
register of members which comprises or includes the shares
in relation to which the default occurred (all or the
relevant number as appropriate of such shares being the
"default shares", which expression shall include any further
shares which are issued in respect of such shares); and
(ii) any other shares held by the Member;
the Member shall not (for so long as the default continues) nor shall any
transferee to whom any of such shares are transferred other than pursuant to an
approved transfer or pursuant to paragraph (c)(ii)below be entitled to vote
either personally or by proxy at a shareholders' meeting or to exercise any
other right conferred by membership in relation to shareholders' meetings.
(c) where the default shares represent at least 0.25 per cent of the
issued shares of the class concerned, then the Board may in its
absolute discretion by notice ("a direction notice") to such Member
direct that:-
(i) any dividend (including a scrip dividend) or other money
which would otherwise be payable on such shares shall be
retained by the Company without any liability to pay
interest thereon when such money is finally paid to the
Member; and/or
(ii) no transfer of any of the shares held by such Member shall be
registered unless the transfer is an approved transfer or:-
(A) the Member is not himself in default as regards supplying the
information requested; and
(B) the transfer is of part only of the Member's
holding and when presented for registration is
accompanied by a certificate by the Member in a
form satisfactory to the Board to the effect
that after due and careful enquiry the Member
is satisfied that none of the shares the
subject of the transfer are default shares.
Upon the giving of a direction notice its terms shall apply
accordingly. The Company shall send to each other person
appearing to be interested in the shares the subject of any
direction notice a copy of the notice, but the failure or
omission by the Company to do so shall not invalidate such
notice.
(d) Save as herein provided any direction notice shall have effect in
accordance with its terms for so long as the default in respect of
which the direction notice was issued continues and shall cease to have
effect thereafter upon the Board so determining (such determination to
be made within a period of one week of the default being duly remedied
with written notice thereof being given forthwith to the Member). Any
direction notice shall cease to have effect in relation to any shares
which are transferred by such Member by means of an approved transfer
or in accordance with paragraph (c)(ii) above.
(e) For the purpose of this Article:-
(i) a person shall be treated as appearing to be
interested in any shares if the Member holding
such shares has given to the Company a
notification under the said Section 212 and
either (A) the Member has named such person as
being so interested or (B)(after taking into
account the response of the Member to the notice
and any other relevant information) the Company
knows or has reasonable cause to believe that
the person in question is or may be interested
in the shares;
(iii) the prescribed period is 14 days from the date of service of the said
notice under Section 212;
(iii) a transfer of shares is an approved transfer if but only if:-
(A) it is a transfer of shares to an
offeror by way or in pursuance of
acceptance of a takeover offer for a
company (as defined in Part XIIIA of
the Companies Act 1985); or
(B) the Board is satisfied that the
transfer is made pursuant to a bona
fide sale of the whole of the
beneficial ownership of the shares to
a party unconnected with a Member and
with other persons appearing to be
interested in such shares; or
(C) the transfer results from a sale made
through a recognised investment
exchange (as defined in the Financial
Services Act 1986) or any stock
exchange outside the United Kingdom
on which the Company's shares are
normally traded.
(f) Nothing contained in this Article shall limit the power of the
Directors under section 216 of the Companies Act 1985.
79. No objection shall be raised to the qualification of any voter or to the
counting of, or failure to count, any vote, except at the meeting or adjourned
meeting at which the vote objected to is tendered or at which the error occurs.
Any objection made in due time shall be referred to the chairman of the meeting
and shall only vitiate the result of the voting if, in the opinion of the
chairman, it is of sufficient magnitude to affect the decision of the meeting.
The decision of the chairman shall be final and conclusive.
PROXIES
80. The instrument appointing a proxy shall be in writing under the hand of the
appointor or of his attorney authorised in writing or, if the appointor is a
corporation, either under its seal or under the hand of an officer, attorney or
other person authorised to sign the same. The signature on such instrument need
not be witnessed.
Subject to the Companies Acts and if and on the terms that the Board so
determines an instrument appointing a proxy may be delivered electronically to
an electronic address or facsimile number designated by the Company for this
purpose, in which case the requirements of these Articles that an instrument
appointing a proxy be signed or executed in any particular way or (as the case
may require) be in writing shall not apply.
81. A proxy need not be a Member.
82. Any corporation which is a Member of the Company may by resolution of its
directors or other governing body authorise such person as it thinks fit to act
as its representative at any meeting of the Company or of any class of Members
of the Company. The person so authorised shall be entitled to exercise the same
powers on behalf of such corporation as the corporation could exercise if it
were an individual Member of the Company and such corporation shall for the
purposes of these Articles be deemed to be present in person at any such meeting
if a person so authorised is present or deemed present thereat.
83. The instrument appointing a proxy and (if required by the Board) the power
of attorney or other authority (if any) under which it is signed, or a
notarially certified copy of such power or authority, shall be delivered in the
manner and to the location specified in or by way of note to the notice or in
any document accompanying the notice convening the meeting (or if no manner or
location is so specified by delivery to the Transfer Office) not less than
forty-eight hours before the time appointed for holding the meeting or adjourned
meeting at which the person named in the instrument proposed to vote or, in the
case of a poll taken subsequently to the date of a meeting or adjourned meeting,
not less than twenty-four hours before the time appointed for the taking of the
poll and in default the instrument of proxy shall not be treated as valid.
Provided that, subject as hereinafter provided, an instrument of proxy relating
to more than one meeting (including any adjournment thereof) having once been so
delivered for the purposes of any meeting shall not require again to be
delivered for the purposes of any subsequent meeting to which it relates. An
instrument of proxy may be revoked in writing or if the Board so permits by
electronic mail or telephone not less than forty eight hours or such lesser time
as the Board may determine prior to the commencement of a meeting.
84. Instruments of proxy shall be in any common form or in such other form as
the Board may approve and the Board may, if it thinks fit, send out with the
notice of any meeting forms of instrument of proxy for use at the meeting. The
instrument of proxy shall be deemed to confer authority to demand or join in
demanding a poll and to vote on any amendment of a resolution put to the meeting
for which it is given as the proxy thinks fit but shall not confer any further
right to speak at the meeting, except with the permission of the chairman of the
meeting. The instrument of proxy shall, unless the contrary is stated therein,
be valid as well for any adjournment of the meeting as for the meeting to which
it relates.
85. A vote given or a demand for a poll made by proxy in accordance with the
terms of an instrument of proxy shall be valid notwithstanding the previous
death or insanity of the principal, or (subject as provided in Article 83) by
revocation of the instrument of proxy or of the authority under which it was
executed, or the transfer of the share in respect of which the proxy is given,
provided that no intimation in writing of such death, insanity or revocation
shall have been received by the Company at the place at which instruments of
proxy must be delivered in accordance with Article 83 or, subject as otherwise
provided herein, that no transfer shall have been registered by the Company one
hour at least before the commencement of the meeting or adjourned meeting, or
the taking of the poll, at which the instrument of proxy is used.
NUMBER OF DIRECTORS
86. Unless and until otherwise determined by ordinary resolution of
the Company, the Directors shall be not less than two and there shall be no
maximum number.
DIRECTORS' SHAREHOLDING QUALIFICATION
87. No shareholding qualification for Directors shall be required.
APPOINTMENT AND REMOVAL OF DIRECTORS
88. Subject to the provisions of these Articles, the Company may by ordinary
resolution appoint any person to be a Director, either to fill a casual vacancy
or as an addition to the existing Board, but so that the total number of
Directors shall not at any time exceed any maximum number fixed by or in
accordance with these Articles.
89. Without prejudice to the power of the Company in general meeting in
pursuance of any of the provisions of these Articles to appoint any person to be
a Director, the Board shall have power at any time and from time to time to
appoint any person to be a Director, either to fill a casual vacancy or as an
addition to the existing Board, but so that the total number of Directors shall
not at any time exceed any maximum number fixed by or in accordance with these
Articles. Any Director so appointed by the Board shall hold office only until
the next following annual general meeting and shall then be eligible for
re-appointment but shall not be taken into account in determining the Directors
or the number of Directors who are to retire by rotation at such meeting.
90. The Company may in accordance with and subject to the provisions of the
Companies Acts by ordinary resolution of which special notice has been given
remove any Director from office (notwithstanding any provision of these Articles
or of any agreement between the Company and such Director, but without prejudice
to any claim he may have for damages for breach of any such agreement) and
appoint another person in place of a Director so removed from office and any
person so appointed shall be treated for the purpose of determining the time at
which he or any other Director is to retire by rotation as if he had become a
Director on the day on which the Director in whose place he is appointed was
last elected a Director. In default of such appointment the vacancy arising upon
the removal of a Director from office may be filled as a casual vacancy.
91. No person other than a Director retiring at the meeting shall, unless
recommended by the Board, be appointed a Director at any general meeting unless,
not less than seven and not more than forty-two clear days before the day
appointed for the meeting, there has been given to the Secretary notice in
writing by some Member (not being the person to be proposed) entitled to attend
and vote at the meeting for which such notice is given of his intention to
propose such person for appointment and also notice in writing signed by the
person to be proposed of his willingness to be appointed.
92. A resolution for the appointment of two or more persons as Directors by a
single resolution shall not be moved at a general meeting unless a resolution
that it shall be so moved has first been agreed to by the meeting without any
vote being given against it; and any resolution moved in contravention of this
provision shall be void.
REMUNERATION OF DIRECTORS
93. The Directors (other than those holding executive office in the Company or
any subsidiary of the Company) shall be entitled to remuneration for their
services as Directors in such amount as the Directors may determine not
exceeding in aggregate (pound)150,000 per annum (or such higher amount as may
from time to time be determined by the Company by ordinary resolution) and such
remuneration shall be apportioned amongst them as the Directors may determine.
In addition to the foregoing, any Director resident outside the United Kingdom
and not holding full-time salaried employment in the Company or any subsidiary
of the Company may be paid such extra remuneration as the Directors may
determine. Any fee payable pursuant to this Article shall be distinct from any
salary, remuneration or other amounts payable to a Director pursuant to other
provisions of these Articles and shall accrue from day to day.
94. Each Director may be paid his reasonable travelling, hotel and incidental
expenses of attending and returning from meetings of the Board or committees of
the Board or general meetings or separate meetings of the holders of any class
of shares or of debentures of the Company and shall be paid all expenses
properly incurred by him in the conduct of the Company's business or in the
discharge of his duties as a Director. Any Director who, by request, goes or
resides abroad for any purposes of the Company or who performs services which in
the opinion of the Board go beyond the ordinary duties of a Director may be paid
such extra remuneration (whether by way of salary, commission, participation in
profits or otherwise) as the Board may determine and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to any
other Article.
DISQUALIFICATION OF DIRECTORS
95. Without prejudice to the provisions for retirement by rotation
hereinafter contained, the office of a Director shall be vacated in any of the
events following, namely:-
(a) if (not being a Director who has agreed to serve as a Director for a
fixed term) he resigns his office by notice in writing delivered to
the Office or tendered at a meeting of the Board;
(b) if in England or elsewhere an order shall be made by any court
claiming jurisdiction in that behalf on the ground (however
formulated) of mental disorder for his detention or for the
appointment of a guardian or for the appointment of a receiver or
other person (by whatever name called) to exercise powers with
respect to his property or affairs;
(c) if, without leave, he is absent from meeting of the Board (whether or
not an alternate Director appointed by him attends) for twelve
consecutive months, and the Board resolves that his office is
vacated;
(d) if he shall have a bankruptcy order made against him or shall
compound with his creditors generally or shall apply to the Court for
an interim order under section 253 of the Insolvency Act 1986 in
connection with a voluntary arrangement under that Act;
(e) if he is prohibited by law from being a Director;
(f) if he ceases to be a Director by virtue of the Companies Acts or is
removed from office pursuant to these Articles;
if he shall be removed from office by notice in writing served upon him
signed by at least three-quarters of his co-Directors, but so that if
he holds an appointment to an executive office which thereby
automatically determines such removal shall be deemed an act of the
Company and shall have effect without prejudice to any claim for
damages for breach of any contract of service between him and the
Company;
(h) if in the case of a Director who holds any executive office, he
ceases to hold such office (whether because his appointment is
terminated or expires) and the majority of his co-Directors so
resolve.
ROTATION OF DIRECTORS
96. At every annual general meeting one-third of the Directors for the time
being or, if their number is not a multiple of three, then the number nearest to
but not exceeding one-third shall retire from office.
97. Subject to the provisions of the Companies Acts, the Directors to retire on
each occasion shall include (so far as necessary to obtain the number required)
any Director who wishes to retire and not to offer himself for re-appointment.
Any further Directors so to retire shall be those of the other Directors subject
to retirement by rotation who have been longest in office since their last
appointment or re-appointment but as between persons who became or were last
re-appointed Directors on the same day those to retire shall (unless they
otherwise agree among themselves) be determined by lot. In addition, any
Director who would not otherwise be required to retire shall retire by rotation
at the third annual general meeting after his last appointment or
re-appointment.The Directors to retire on each occasion (both as to number and
identity) shall be determined by the composition of the Board at a date not
earlier than twenty-eight days before the date of the notice convening the
annual general meeting, and no Director shall be required to retire or be
relieved from retiring by reason of any change in the number or identity of the
Directors after such date but before the close of the meeting.
98. A Director who retires at an annual general meeting shall be eligible for
re-appointment. If he is not re-appointed he shall retain office until the
meeting appoints someone in his place or, if it does not do so, until the end of
the meeting.
99. Subject to the provisions of these Articles, the Company at the meeting at
which a Director retires in manner aforesaid may fill the vacated office by
appointing the retiring Director or some other person eligible for appointment
thereto and in default the retiring Director shall, if willing to continue to
act, be deemed to have been re-appointed, unless at such meeting it is expressly
resolved not to fill such vacated office or a resolution for the re-appointment
of such Director shall have been put to the meeting and lost or such Director
has given notice in writing to the Company that he is unwilling to be re-elected
or the default is due to the moving of a resolution in contravention of Article
92.
EXECUTIVE DIRECTORS
100. The Board may from time to time appoint one or more of its body to be
Executive Chairman, Chief Executive Director, Joint Chief Executive Director,
Managing Director, Joint Managing Director or Assistant Managing Director or to
hold any other employment or executive office with the Company for such period
(subject to the provisions of the Companies Acts) and upon such terms as the
Board may determine and may revoke or terminate any of such appointments. Any
such revocation or termination as aforesaid shall be without prejudice to any
claim for damages that such Director may have against the Company or the Company
may have against such Director for any breach of any contract of service between
him and the Company which may be involved in such revocation or termination.
101. The appointment of any Director to the office of Chairman or Executive
Chairman or Deputy Chairman or Chief Executive or Joint Chief Executive Managing
or Joint Managing or Assistant Managing Director shall automatically determine
if he ceases to be a Director but without prejudice to any claim for damages for
breach of any contract of service between him and the Company.
102. The appointment of any Director to any other executive office shall not
automatically determine if he ceases from any cause to be a Director, unless the
contract or resolution under which he holds office shall expressly state
otherwise, in which event such determination shall be without prejudice to any
claim for damages for breach of any contract of service between him and the
Company.
103. The Directors may entrust to and confer upon any Director holding any
executive office any of the powers exercisable by them as Directors upon such
terms and conditions and with such restrictions as they think fit (which may
include authority to delegate any of the powers so entrusted or conferred), and
either collaterally with or to the exclusion of their own powers, and may from
time to time revoke, withdraw, alter or vary all or any of such powers.
104. Any Director who holds any executive office (including for this purpose the
office of Chairman or Deputy Chairman whether or not such office is held in an
executive capacity), or who serves on any committee of the Board, or who
otherwise performs services which in the opinion of the Board are outside the
scope of the ordinary duties of a Director, may be paid such remuneration or
extra remuneration by way of salary, commission or otherwise as the Board may
determine.
AGE OF DIRECTORS
105. No person shall be disqualified from being appointed a Director and no
Director shall be required to vacate that office by reason only of the fact that
he has attained the age of 70 years or any other age, nor shall it be necessary
to give special notice under the Companies Acts of any resolution appointing,
re-appointing or approving the appointment of a Director by reason of his age,
but at every subsequent annual general meeting of the Company after a Director
shall have attained the age of 70 or more, that Director shall retire from
office and that Director may be proposed for re-appointment and the Board shall
give notice of his having attained such age in the notice convening the meeting
or in any document sent therewith, but the accidental omission to give such
notice shall not invalidate any proceedings at that meeting or any appointment
or re-appointment of such Director thereat.
ALTERNATE DIRECTORS
106.
(a) Each Director shall have the power to appoint any person to be his
alternate Director and may at his discretion remove such alternate
Director. If such alternate Director is not another Director, such
appointment, unless previously approved by the Board, shall have
effect only upon and subject to it being so approved. Any appointment
or removal of an alternate Director shall be effected by notice in
writing signed by the appointor and delivered to the Office or
tendered at a meeting of the Board. An alternate Director shall,
if his appointor so requests, be entitled to receive notices of
meetings of the Board or of committees of the Board to the same
extent as, but in lieu of, the Director appointing him and shall
be entitled to such extent to attend and vote as a Director at
any such meeting at which the Director appointing him is not
personally present and generally at such meeting to exercise and
discharge all the functions, powers and duties of his appointor as
a Director and for the purposes of the proceedings at such meeting
the provisions of these Articles shall apply as if he were a Director.
(b) Every person acting as an alternate Director shall (except as
regards power to appoint an alternate Director and remuneration)
be subject in all respects to the provisions of these Articles
relating to Directors and shall alone be responsible to the Company
for his acts and defaults and shall not be deemed to be the agent of
or for the Director appointing him. An alternate Director may be
paid expenses and shall be entitled to contract and be interested
in and benefit from contracts or arrangements or transactions
and be indemnified by the Company to the same extent mutatis
mutandis as if he were a Director but shall not be entitled to
receive from the Company any remuneration in his capacity as an
alternate Director except only such part (if any) of the remuneration
otherwise payable to the Director appointing him as such Director
may by notice in writing to the Company from time to time direct.
(c) Every person acting as an alternate Director shall have one vote for
each Director for whom he acts as alternate (in addition to his own
vote if he is also a Director). The signature of an alternate
Director to any resolution in writing of the Board or a committee of
the Board shall, unless the notice of his appointment provides to the
contrary, be as effective as the signature of his appointor.
(d) An alternate Director shall ipso facto cease to be an alternate
Director if his appointor ceases for any reason to be a Director
provided that, if at any meeting any Director retires by rotation or
otherwise but is re-appointed at the same meeting, any appointment
made by him pursuant to this Article which was in force immediately
before his retirement shall remain in force as though he had not
retired. The appointment of an alternate Director shall determine on
the happening of any event which if he were a Director would cause
him to vacate such office.
DIRECTORS' INTERESTS
107.
(a) A Director who is in any way, whether directly or indirectly,
interested in any contract or arrangement or proposed contract or
arrangement with the Company shall declare the nature of his interest
at a meeting of the Board in accordance with the Companies Acts.
(b) Save as herein provided, a Director shall not vote in respect of any
contract or arrangement or any other proposal whatsoever in which he
has an interest which (together with any interest of any person
connected with him) is to his knowledge a material interest otherwise
than by virtue of his interests in shares or debentures or other
securities of or otherwise in or through the Company. A Director
shall not be counted in the quorum at the meeting in relation to any
resolution on which he is debarred from voting.
(c) Subject to the provisions of the Companies Acts, a Director shall (in
the absence of some other material interest than is indicated below)
be entitled to vote (and be counted in the quorum) in respect of any
resolution concerning any of the following matters, namely:-
(i) the giving of any security, guarantee or indemnity in
respect of money lent or obligations incurred by him or
any other person at the request of or for the benefit of
the Company or any of its subsidiaries;
(ii) the giving of any security, guarantee or indemnity in
respect of a debt or obligation of the Company or any of its
subsidiaries for which he himself has assumed responsibility
in whole or in part under a guarantee or indemnity or by the
giving of security;
(iii) any contract or arrangement by a Director to participate in
the underwriting or sub-underwriting of any offer of shares,
debentures or other securities of the Company or any of its
subsidiaries for subscription, purchase or exchange;
(iv) any contract or arrangement concerning any other
company in which the Director and any person connected with
him do not to his knowledge hold an interest in shares
(as that term is used in sections 198 to 211 of the
Companies Act 1985) representing one per cent or more of
either any class of the equity share capital, or the
voting rights, in such company. For the purpose of
this paragraph, there shall be disregarded any shares
held by a Director as bare or custodian trustee and in
which he has no beneficial interest, any shares comprised
in a trust in which the Director's interest is in
reversion or remainder if and so long as some other person
is entitled to receive the income thereof, and any
shares comprised in an authorised unit trust scheme in
which the Director is interested only as a unit holder;
(v) any arrangement for the benefit of the employees of the
Company or any of its subsidiaries which does not award him
any privilege or benefit not generally awarded to the
employees to whom such arrangement relates;
(vi) any proposal concerning any insurance which the Company is
empowered to purchase and/or maintain for or for the benefit
of inter alia any Directors of the Company.
(d) Subject to the provisions of the Companies Acts, and provided
that he has disclosed to the Board the nature and extent of any
interest of his, a Director notwithstanding his office:-
(i) may be a party to, or otherwise interested in, any
transaction or arrangement with the Company
or in which the Company is otherwise interested;
(ii) may be a director or other officer of, or employed by, or a
party to any transaction or arrangement with, or otherwise
interested in, any body corporate promoted by the Company or
in which the Company is otherwise interested; and
(iii) shall not, by reason of his office, be accountable to the
Company for any benefit which he derives from any such
office or employment or from any such transaction or
arrangement or from any interest in any such body corporate
and no such transaction or arrangement shall be liable to be
avoided on the ground of any such interest or benefit.
For the purposes of this Article:-
(i) a general notice given to the Board that a Director is to be
regarded as having an interest of the nature and extent
specified in the notice in any transaction or arrangement in
which a specified person or class of persons is interested
shall be deemed to be a disclosure that the Director has an
interest in any such transaction of the nature and extent so
specified;
(ii) an interest of a person who is, for any purpose of the
Companies Acts (excluding any such modification thereof not
in force when these Articles became binding on the Company),
connected with a Director shall be treated as an interest of
the Director and, in relation to an alternate Director, an
interest of his appointor shall be treated as an interest of
the alternate Director without prejudice to any interest
which the alternate Director otherwise has; and
(iii) an interest of which a Director has no knowledge and of
which it is unreasonable to expect him to have knowledge
shall not be treated as an interest of his.
(e) Subject to the provisions of sub-clause (f) of this Article, a
Director shall not vote or be counted in the quorum present on any
resolution concerning his own appointment as the holder of any office
or place of profit with the Company or any company in which the
Company is interested including fixing or varying the terms of his
appointment or the termination thereof.
(f) Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) or the
termination of appointment (including fixing or varying the terms of
such termination) of two or more Directors to or from offices or
employments with the Company or any company in which the Company is
interested, such proposals may be divided and considered in relation
to each Director separately and in such case each of the Directors
concerned (if not otherwise debarred from voting under these
Articles) shall be entitled to vote (and counted in the quorum) in
respect of each resolution except that concerning his own appointment
or termination of appointment.
(g) Any Director may act by himself or by his firm in a professional
capacity for the Company or any company in which the Company is
interested, and he or his firm shall be entitled to remuneration for
professional services as if he were not a Director; provided that
nothing herein contained shall authorise a Director or his firm to
act as auditor to the Company.
(h) If any question shall arise at any time as to the materiality of a
Director's interest or as to the entitlement of any Director to vote
and such question is not resolved by his voluntarily agreeing to
abstain from voting, such question shall be referred to the chairman
of the meeting (or if the Director concerned is the chairman to the
other Directors at the meeting) and his or their ruling (as the case
may be) shall be final and conclusive except in a case where the
nature or extent of the interest of such Director has not been fairly
disclosed.
108. Without prejudice to the provisions of Article 171 the Board shall have the
power to purchase and maintain insurance for or for the benefit of any persons
who are or were at any time Directors, officers or employees of the Company, or
of any other company which is its holding company or in which the Company or
such holding company has any interest whether direct or indirect or which is in
any way allied to or associated with the Company, or of any subsidiary
undertaking of the Company or of any such other company, or who are or were at
any time trustees of any pension fund in which employees of the Company or of
any other such company or subsidiary undertaking are interested, including
(without prejudice to the generality of the foregoing) insurance against any
liability incurred by such persons in respect of any act or omission in the
actual or purported execution and/or discharge of their duties and/or in the
exercise or purported exercise of their powers and/or otherwise in relation to
their duties, powers or offices in relation to the Company or any other such
company, subsidiary undertaking or pension fund.
POWERS AND DUTIES OF THE BOARD
109. The business of the Company shall be managed by the Board, and may exercise
all such powers of the Company as are not by the Companies Acts or by these
Articles required to be exercised by the Company in general meeting, subject
nevertheless to the provisions of the Companies Acts and of the regulations of
these Articles being not inconsistent with the aforesaid regulations or
provisions, as may be prescribed by special resolution. No alteration of these
Articles shall invalidate any prior act of the Board which would have been valid
if that alteration had not been made. The general powers given by this Article
shall not be limited or restricted by any special authority or power given to
the Board by any other Article.
110. The Board may establish local boards or agencies for managing any of the
affairs of the Company, either in the United Kingdom or elsewhere, and may
appoint any persons to be members of such local boards, or any managers or
agents, and may fix their remuneration. The Board may delegate to any local
board, manager or agent any of the powers, authorities and discretions vested in
or exercisable by the Board, with power to sub-delegate, and may authorise the
members of any local board or any of them to fill any vacancies therein and to
act notwithstanding vacancies. Any such appointment or delegation may be made
upon such terms and subject to such conditions as the Board may think fit, and
the Board may remove any person appointed as aforesaid, and may revoke or vary
such delegation, but no person dealing in good faith and without notice of any
such revocation or variation shall be affected thereby.
111. The Board may by power of attorney appoint any company, firm or person or
any fluctuating body of persons, whether nominated directly or indirectly by the
Board, to be the attorney or attorneys of the Company for such purposes and with
such powers, authorities and discretions (not exceeding those vested in or
exercisable by the Board under these Articles) and for such period and subject
to such conditions as it may think fit, and any such power of attorney may
contain such provisions for the protection and convenience of persons dealing
with any such attorney as the Board may think fit, and may also authorise any
such attorney to sub-delegate all or any of the powers, authorities and
discretions vested in him.
112. The Board may entrust to and confer upon any Director any of the powers
exercisable by it upon such terms and conditions and with such restrictions as
it thinks fit, and either collaterally with, or to the exclusion of, its own
powers, and may from time to time revoke or vary all or any of such powers but
no person dealing in good faith and without notice of such revocation or
variation shall be affected thereby.
113. The Board may from time to time appoint any person to any office or
employment having a designation or title including the word "Director" or attach
to any existing office or employment with the Company such a designation or
title and may at any time determine any such appointment or the use of any such
designation or title. The inclusion of the word "Director" in the designation or
title of any such office or employment with the Company shall not imply that the
holder thereof is a Director of the Company nor shall such holder thereby be
empowered in any respect to act as a Director of the Company or be deemed to be
a Director for any of the purposes of these Articles.
114. The Company may exercise all the powers conferred by the Companies Acts
with regard to having official seals, and such powers shall be vested in the
Board.
115. Subject to the provisions of the Companies Acts, the Company may keep an
overseas or local or other register in any place, and the Board may make and
vary such regulations as it may think fit respecting the keeping of any such
register.
116. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all receipts for
moneys paid to the Company shall be signed, drawn, accepted, endorsed or
otherwise executed, as the case may be, in such manner as the Board shall from
time to time by resolution determine.
117. The Board shall cause minutes or records to be made in the books provided
for the purpose:-
(a) of all appointments of officers and committees made by the Board and
of any salary or remuneration;
(b) of the names of the Directors present at each meeting of the Board
or committee of the Board, the Company or the holders of any class
of shares or debentures of the Company; and
(c) of all orders, resolutions and proceedings at such meetings.
Any such minutes, if purporting to be signed by the chairman of the meeting at
which the proceedings were held or by the chairman of the next succeeding
meeting or the Secretary, shall be receivable as prima facie evidence of the
matters stated in such minutes without any further proof.
118. The Board may exercise all the powers of the Company to give or award
pensions, annuities, gratuities and superannuation or other allowances or
benefits to any persons who are or have at any time been Directors of or
employed by or in the service of the Company or of any company which is a
subsidiary company of the Company or any such subsidiary and to the wives,
widows, children and other relatives and dependants of any such persons and may
establish, maintain, support, subscribe to and contribute to all kinds of
schemes, trusts and funds for the benefit of such persons as are hereinbefore
referred to or any of them or any class of them, and so that any Director shall
be entitled to receive and retain for his own benefit any such pension, annuity,
gratuity, allowance or other benefit (whether under such fund or scheme or
otherwise).
BORROWING POWERS
119.
(a) Subject as hereinafter provided and to the provisions of the
Companies Acts, the Board may exercise all the powers of the Company
to raise or borrow money and to mortgage or charge all or any part of
the undertaking, property and assets (present and future) and
uncalled capital of the Company and to issue debentures and other
securities, whether outright or as collateral security for any debt,
liability or obligation of the Company or of any third party.
(b)
(i) The Board shall restrict the borrowings of the Company
and exercise all voting and other rights or powers of
control exercisable by the Company in relation to its
subsidiaries (if any) so as to secure (but as regards
subsidiaries only in so far as by the exercise of such
rights or powers of control the Board can secure) that the
aggregate amount from time to time outstanding of all
borrowings by the Group (exclusive of borrowings owing
by one member of the Group to another member of the Group)
shall not, without the previous sanction of an ordinary
resolution of the Company, exceed the higher of
(pound)75 million and an amount equal to three and a half
times the Adjusted Capital and Reserves.
(ii) For the purpose of the foregoing restriction:-
(A) "the Adjusted Capital and Reserves" means the aggregate
from time to time of:-
(I) the amount paid up or credited as paid up on the
issued share capital of the Company; and
(II) the amount standing to the credit of the reserves
(including any share premium account, capital
redemption reserve and any credit balance on
profit and loss account) all as shown by the
then latest audited balance sheet but after
deducting therefrom any debit balance on profit
and loss account (except to the extent that such
deduction has already been made) and making
adjustments to reflect any variation in the
amount of such paid up share capital, share
premium account or capital redemption
reserve since the date of such audited balance
sheet;
(B) "borrowings" shall be deemed to include not only
borrowings but also the following
except in so far as otherwise taken into account:-
(I) the nominal amount of any issued
share capital and the principal
amount of any debentures or borrowed
moneys, the beneficial interest
whereof is not for the time being
owned by a member of the Group, of
any body whether corporate or
unincorporate and the payment of a
guarantee whereof is the subject of a
guarantee or indemnity by a member of
the Group;
(II) the outstanding amount raised by
acceptances by any bank or accepting
house under any acceptance credit
opened on behalf and in favour of any
member of the Group;
(III) the principal amount of any debenture
(whether secured or unsecured) of a
member of the Group owned otherwise than by a
member of the Group;
(IV) the principal amount of any preference share
capital of any subsidiary owned otherwise than
by a member of the Group; and
(V) any fixed or minimum premium payable on final
repayment of any borrowing or deemed borrowing;
but shall be deemed not to include:-
(VI) borrowings for the purposes of
repaying the whole or any part of
borrowings by a member of the Group
for the time being outstanding and so
to be applied within six months of
being so borrowed, pending their
application for such purpose within
such period;
(VII) borrowings for the purpose of
financing any contract in respect of
which any part of the price
receivable by a member of the Group
is guaranteed or insured by the
Export Credits Guarantee Department
of the Department of Trade or by any
other governmental department
fulfilling a similar function, to an
amount not exceeding that part of the
price receivable thereunder which is
so guaranteed or insured; and
(VIII) amounts borrowed or raised which are
for the time being deposited with HM
Customs and Excise or any other body
designated by any relevant
legislation or order in connection
with import deposits or any similar
governmental scheme to the extent
that a member of the Group retains
its interest therein;
(C) when the aggregate amount of borrowings required
to be taken into account for the purposes of
this Article on any particular day is being
ascertained, any of such moneys denominated or
repayable (or repayable at the option of any
person other than the Company) in a currency
other than sterling shall be converted for the
purpose of calculating the sterling equivalent
at the rate of exchange prevailing on that day in
London provided that any of such moneys shall be
converted at the rate of exchange prevailing
in London six months before such day if thereby
such aggregate amount would be less (and so that
for this purpose the rate of exchange shall be
taken as the middle market rate as at the close of
business);
(D) "audited balance sheet" shall mean the audited
balance sheet of the Company prepared for the
purposes of the Companies Acts unless at the date
of the then latest such balance sheet there
shall have been prepared for such purposes and
audited a consolidated balance sheet of the
Company and its subsidiaries (with such exceptions
as may be permitted in the case of a consolidated
balance sheet prepared for the purposes of the
Companies Acts) and in the latter event "audited
balance sheet" shall mean such audited consolidated
balance sheet of the Company and such subsidiaries,
the references to reserves and profits and loss
account shall be deemed to be references to
consolidated reserves and consolidated profit
and loss account respectively and there shall be
excluded any amounts attributable to outside
interests in subsidiaries;
(E) the Company may from time to time change the
accounting convention on which the audited balance
sheet is based, provided any new convention adopted
complies with the requirements of the Companies
Acts; if the Company should prepare its main
audited balance sheet on the basis of one such
convention, but a supplementary audited balance
sheet or statement on the basis of another, the
main audited balance sheet shall be taken as the
audited balance sheet for the purposes of this
Article;
(F) "the Group" means the Company and its subsidiaries
(if any).
(iii) A certificate or report by the auditors for the time being
of the Company as to the amount of the Adjusted Capital and
Reserves or the amount of any borrowings or to the effect
that the limit imposed by this Article has not been or will
not be exceeded at any particular time or times shall be
conclusive evidence of such amount or fact for the purposes
of this Article.
(c) Notwithstanding the foregoing, no lender or other person dealing with
the Company shall be concerned to see or inquire whether the limit
imposed by this Article is observed and no borrowing incurred or
security given in excess of such limit shall be invalid or
ineffectual except in the case of express notice to the lender or the
recipient of the security at the time when the borrowing was incurred
or security given that the limit hereby imposed had been or was
thereby exceeded.
PROCEEDINGS OF THE BOARD
120. Subject to the provisions of these Articles, the Board may meet for the
despatch of business, adjourn and otherwise regulate its meetings as it thinks
fit. Questions arising at any meeting shall be determined by a majority of
votes. In the case of any equality of votes the chairman of the meeting shall
have an additional or casting vote. A Director may, and the Secretary on the
requisition of a Director shall, at any time summon a Board meeting.
121. Notice of a Board meeting shall be deemed to be duly given to a Director if
it is given to him personally or by word of mouth or sent in writing to him at
his last known address or any other address given by him to the Company for this
purpose. A Director absent or intending to be absent from the United Kingdom may
request the Board that notices of Board meeting shall during his absence be sent
in writing to him at his last known address or any other address given by him to
the Company for this purpose, but in the absence of any such request it shall
not be necessary to give notice of a Board meeting to any Director who is for
the time being absent from the United Kingdom. A Director may waive notice of
any meeting either prospectively or retrospectively.
122. The quorum necessary for the transaction of the business of the Board may
be fixed by the Board and, unless so fixed at any other number, shall be two.
Any Director who ceases to be a Director at a Board meeting may continue to be
present and to act as a Director and be counted in the quorum until the
termination of the Board meeting if no other Director objects and if otherwise a
quorum of Directors would not be present.
123. The continuing Directors or a sole continuing Director may act
notwithstanding any vacancy in the Board but, if and so long as the number of
Directors is reduced below the minimum number fixed by or in accordance with
these Articles, the continuing Directors or Director, notwithstanding that the
number of Directors is below the number fixed by or in accordance with these
Articles as the quorum or that there is only one continuing Director, may act
for the purpose of filling vacancies in the Board or of summoning general
meetings of the Company but not for any other purpose. If there be no Directors
or Director able or willing to act, then any two Members may summon a general
meeting for the purpose of appointing Directors.
124. The Board may appoint a Chairman and one or more Deputy-Chairman of its
meetings and determine the period for which they are respectively to hold such
office. If no such Chairman or Deputy- Chairman is appointed, or if at any
meeting neither the Chairman nor the Deputy-Chairman is present within five
minutes after the time appointed for holding the same, the Directors may appoint
one of their number to be chairman of the meeting.
125. If at any time there is more than one Deputy Chairman the right in the
absence of the Chairman to preside at a meeting of the Board or of the Company
shall be determined as between the Deputy Chairman present (if more than one) by
seniority in length of appointment or otherwise as resolved by the Board.
126 A meeting of the Board at which a quorum is present shall be competent to
exercise all the powers, authorities and discretion for the time being vested in
or exercisable by the Board.
127. The Board may delegate such of its powers or discretion (with power to
sub-delegate and including without limitation those involving the award or
payment to Directors of remuneration and other benefits) as it may think fit to
committees consisting of one or more members of the Board and (if thought fit)
one or more persons co-opted as hereinafter provided. Any committees so formed
shall in the exercise of the powers so delegated conform to any regulations that
may from time to time be imposed by the Board. Any such regulations may provide
for or authorise the co-option to the committee of persons other than Directors
and for such co-opted members to have voting rights as members of the committee.
The chairman of each committee shall be a Director and in the case of any
equality of votes the chairman of the committee shall have a second or casting
vote.
128. The meetings and proceedings of any committee consisting of two or more
members shall be governed by the provisions contained in these Articles for
regulating the meetings and proceedings of the Board so far as the same are
applicable and are not superseded by any regulation imposed by the Board under
the last preceding Article. Insofar as any such power is so delegated any
reference in these Articles to the exercise by the Directors of such powers or
discretion shall be read and construed as if it were a reference to such
committee.
129. A resolution in writing signed by all the Directors for the time being
entitled to receive notice of a meeting of the Board (provided that number is
sufficient to constitute a quorum) or by all the members of a committee for the
time being shall be as valid and effectual as a resolution passed at a meeting
of the Board or, as the case may be, of such committee duly called and
constituted. Such resolution may be contained in one document or in several
documents in the like form each signed by one or more of the Directors or
members of the committee concerned.
130. All or any of the Directors or any committee of the Board may participate
in a meeting of the Board or that committee by means of a conference telephone
or any communication equipment which allows all persons participating in the
meeting to hear and speak to each other throughout the meeting. A person so
participating shall be deemed to be present in person at the meeting and shall
be entitled to vote or be counted in a quorum accordingly. Such a meeting shall
be deemed to take place where the largest group of those participating is
assembled, or, if there is no such group, where the chairman of the meeting then
is. Subject to the Companies Acts, all business transacted in such manner by the
Board or a committee of the Board shall be deemed to be validly and effectively
transacted at a meeting of the Board or a committee thereof nothwithstanding
that fewer than two Directors or alternate Directors are physically present at
the same place.
131. All acts done by the Board or by any committee or by any person acting as a
Director or member of a committee, shall as regards all persons dealing in good
faith with the Company, notwithstanding that it is afterwards discovered that
there was some defect in the appointment of any member of the Board or such
committee or person acting as aforesaid or that they or any of them were
disqualified or had vacated office or were not entitled to vote, be as valid as
if every such person had been duly appointed and was qualified and had continued
to be a Director or member of such committee and had been entitled to vote.
SECRETARY
132. The Secretary shall be appointed by the Board for such term, at such
remuneration and upon such conditions as it may think fit; and any Secretary so
appointed may be removed by the Board but without prejudice to any claim for
damages for breach of any contract between the Secretary and the Company. If
thought fit two or more persons may be appointed as joint secretaries. The
Directors may also appoint from time to time on such terms as they think fit one
or more assistant or deputy secretaries.
133. A provision of the Companies Acts or these Articles requiring or
authorising a thing to be done by or to a Director and the Secretary shall not
be satisfied by its being done by or to the same acting both as Director and as,
or in place of, the Secretary.
THE SEALS
134.
(a) The Board shall provide for the safe custody of the Seal and any
Securities Seal and neither shall be used without the authority of
the Board or of a committee authorised by the Board in that behalf.
(b) Each of the Seal and the Securities Seal may be properly affixed to
any document by impressing it by mechanical means or by printing it
or a facsimile of it on such document or by any other means approved
by the Board.
(c) Every instrument to which the Seal shall be affixed shall be signed
autographically by one Director and the Secretary or by two Directors
save that as regards any certificates for shares or debentures or
other securities of the Company the Board may by resolution determine
that such signatures or either of them shall be dispensed with or
that facsimiles of such signatures or either of them shall be printed
or applied by any other means thereto.
(d) The Securities Seal shall be used only for sealing securities issued
by the Company and documents creating or evidencing securities so
issued. Any such securities or documents sealed with the Securities
Seal shall not require to be signed.
135. The Company may exercise the powers conferred by the Companies Acts with
regard to having any official seal for use abroad and such powers shall be
vested in the Board.
AUTHENTICATION OF DOCUMENTS
136. Any Director or the Secretary or any person appointed by the Board for the
purpose shall have power to authenticate any documents affecting the
constitution of the Company and any resolutions passed by the Company or the
Board or any committee of the Board, and any books, records, documents and
accounts relating to the business of the Company, and to certify copies thereof
or extracts therefrom as true copies or extracts. Where any books, records,
documents or accounts are elsewhere than at the Office the local manager or
other officer of the Company having the custody thereof shall be deemed to be a
person appointed by the Board as aforesaid. A document purporting to be a copy
of a resolution, or an extract from the minutes of a meeting, of the Company or
of the Board or any committee of the Board which is certified as aforesaid shall
be conclusive evidence in favour of all persons dealing with the Company upon
the faith thereof that such resolution has been duly passed or, as the case may
be, that such minutes or extract is a true and accurate record of proceedings at
a duly constituted meeting.
DIVIDENDS AND OTHER PAYMENTS
137. Subject to the provisions of the Companies Acts, the Company in general
meeting may from time to time declare dividends to be paid to the Members
according to their rights and interests in the profits available for
distribution, but no dividend shall be declared in excess of the amount
recommended by the Board.
138. Subject to the provisions of the Companies Acts, in so far as in the
opinion of the Board, the profits of the Company justify such payments, the
Board may declare and pay the fixed dividends on any class of shares carrying a
fixed dividend expressed to be payable on fixed dates on the half-yearly or
other dates prescribed for the payment thereof and may also from time to time
declare and pay interim dividends on shares of any class of such amounts and on
such dates and in respect of such periods as it thinks fit. Provided that the
Board acts in good faith, it shall not incur any liability to the holders of
shares conferring preferred rights for any loss they may suffer in consequence
of the payment of an interim dividend on any shares having non-preferred or
deferred rights.
139. Unless and to the extent that the rights attached to any shares or the
terms of issue thereof otherwise provide, all dividends shall (as regards any
shares not fully paid throughout the period in respect of which the dividend is
paid) be apportioned and paid pro rata according to the amounts paid on the
shares during any portion or portions of the period in respect of which the
dividend is paid. For the purposes of this Article no amount paid on a share in
advance of calls shall be treated as paid on the share. Dividends may be
declared or paid in any currency.
140. No dividend shall be paid otherwise than out of profits available for the
purpose in accordance with the provisions of the Companies Acts which apply to
the Company.
141. No dividend or other moneys payable on or in respect of a share shall
bear interest as against the Company.
142. Subject to the provisions of the Companies Acts where any asset, business
or property is acquired by the Company as from a past date (whether such date be
before or after the incorporation of the Company) the profits and losses arising
therefrom as from such date may at the discretion of the Board in whole or in
part be carried to revenue account and treated for all purposes as profits or
losses of the Company. Subject as aforesaid, if any shares or securities are
purchased cum dividend or interest, such dividend or interest may at the
discretion of the Board be treated as revenue, and it shall not be obligatory to
capitalise the same or any part thereof.
143. If two or more persons are registered as joint holders of any share, or are
entitled jointly to a share in consequence of the death, bankruptcy or mental
disorder of the holder or by operation of law or any other event, any one of
them may give effectual receipts for any dividend or other money payable or
property distributable on or in respect of the share.
144. Any resolution declaring a dividend on shares of any class, whether a
resolution of the Company in general meeting or a resolution of the Board may
specify that the same shall be payable to the persons registered as the holders
of such shares at the close of business on a particular date, notwithstanding
that it may be a date prior to that on which the resolution is passed, and
thereupon the dividend shall be payable to them in accordance with their
respective holdings so registered, but without prejudice to the rights inter se
in respect of such dividend of transferors and transferees of any such shares.
145. Any dividend or other moneys payable in cash on or in respect of a share
may be paid by cheque or warrant sent through the post to the registered address
of the Member or person entitled thereto (or, if two or more persons are
registered as joint holders of the share or are entitled thereto in consequence
of the death, bankruptcy or mental disorder of the holder or by operation of law
or any other event to any one of such persons) or to such person and such
address as such Member or person or persons may in writing direct. Every such
cheque or warrant shall be made payable to the order of the person to whom it is
sent or to such person as the holder or joint holders or person or persons
entitled to the share in consequence of the death, bankruptcy or mental disorder
of the holder or by operation of law or any other event may in writing direct
and payment of the cheque or warrant by the banker upon whom it is drawn shall
be a good discharge to the Company. Every such cheque or warrant shall be sent
at the risk of the person entitled to the money represented thereby. In
addition, any such dividend or other moneys payable may be paid by any bank
transfer system or such other means and to or through such person as the holder
or joint holders may in writing direct and the Company shall have no
responsibility for any sums lost or delayed in the course of any such transfer
or where it has acted on any such direction.
146. The Company may cease to send any cheque or warrant through the post or
cease to employ any other means of payment for any dividend or other amount
payable in respect of any share in the Company if in respect of at least two
consecutive payments in respect of such share the cheques or warrants have been
returned undelivered or remain uncashed or the other means of payment has
failed, or following one such payment and reasonable enquiries by the Company or
its agents have failed to establish a new address or amendment to the payment
instructions, and the provisions of Article 149 shall mutatis mutandis in the
meantime apply provided that, subject to the provisions of these Articles, the
Company shall recommence sending cheques or warrants or employing such means of
payment in respect of such shares if the person entitled to receive payments in
respect thereof so requests in writing.
147.
(a) The Board may retain any dividend or other moneys payable on or in
respect of a share on which the Company has a lien, and may apply the
same in or towards satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
(b) The Board may retain the dividends payable upon shares in respect of
which any person is under the provisions as to the transmission of
shares hereinbefore contained or otherwise by operation of law
entitled to become a Member, or which any person is under those
provisions entitled to transfer, until such person shall become a
Member in respect of such shares or shall transfer the same.
148. The waiver in whole or in part of any dividend on any share by any document
(whether or not under seal) shall be effective only if such document is signed
by the holder thereof (or the person becoming entitled to the share in
consequence of the death, bankruptcy or mental disorder of the holder or by
operation of law or any other event) and delivered to the Company and if or to
the extent that the same is accepted as such or acted upon by the Company.
149. Any dividend or other monies payable in respect of a share unclaimed for
one year after having become due for payment may be invested or otherwise made
use of by the Board for the benefit of the Company until claimed.The payment by
the Board of any unclaimed dividend or other moneys payable on or in respect of
a share into a separate account shall not constitute the Company a trustee in
respect thereof and any dividend unclaimed after a period of twelve years from
the date such dividend is payable shall be forfeited and shall revert to the
Company.
150. The Company may upon the recommendation of the Board by ordinary resolution
direct payment of a dividend in whole or in part by the distribution of specific
assets (and in particular of paid up shares or debentures of any other company)
and the Board shall give effect to such resolution. Where any difficulty arises
in regard to such distribution, the Board may settle the same as it thinks
expedient and in particular may issue fractional certificates, may fix the value
for distribution of such specific assets or any part thereof, may determine that
cash payments shall be made to any Members upon the footing of the value so
fixed in order to adjust the rights of all parties (subject to a retention by
the Company of amounts not exceeding (pound)3 (or such other amount as the Board
may from time to time determine) due to any Member) and may vest any such
specific assets in trustees as may seem expedient to the Board.
151. The Board may, if authorised by an ordinary resolution of the Company,
offer any holders of ordinary shares the right to elect to receive ordinary
shares, credited as fully paid, instead of cash in respect of the whole (or some
part, to be determined by the Board) of any dividend specified by the ordinary
resolution. The following provisions shall apply:-
(a) An ordinary resolution may specify a particular dividend (whether or
not already declared) or may specify all or any dividends declared
within a specified period, but such period may not end later than the
beginning of the fifth annual general meeting following the date of
the meeting at which the ordinary resolution is passed.
(b) The Board may determine the basis of entitlement of each holder of
ordinary shares to new ordinary shares to be issued pursuant to this
Article and the value of such new ordinary shares may be greater or
less than the value of the relevant cash dividend, but shall never be
less than the par value of the new ordinary shares.
(c) On or as soon as practicable after announcing that it is to
declare or recommend any dividend, the Board, if it intends to offer
an election in respect of that dividend, shall also announce that
intention, and shall, after determining the basis of allotment,
if it decides to proceed with the offer, notify the holders of
ordinary shares in writing of the right of election offered to them,
and specify the procedure to be followed and place at which, and
the latest time by which elections must be lodged in order for
elections to be effective. The basis of allotment shall be such
that no shareholder may receive a fraction of a share. The Board
may make such provisions as it thinks fit for any fractional
entitlements including provisions whereby, in whole or in part,
the benefit thereof accrues to the Company and/or under which
fractional entitlements are accrued and/or retained and in each
case accumulated on behalf of any holder and such accruals or
retentions are applied to the allotment by way of bonus to or
cash subscription on behalf of such holder of fully paid shares
and/or provisions whereby cash payments may be
made to such holders in respect of their fractional entitlements.
(d) The Board shall not proceed with any election unless the Company has
sufficient unissued shares authorised for issue and sufficient
reserves or funds that may be capitalised to give effect to it after
the basis of allotment is determined.
(e) The Board may exclude from any offer any holders of ordinary shares
where the Board believes that the making of the offer to them would
or might involve the contravention of the laws of any territory or
that for any other reason the offer should not be made to them.
(f) The dividend (or that part of the dividend in respect of which a right
of election has been offered) shall not be payable on ordinary
shares in respect of which an election has been made ("the elected
ordinary shares") and instead additional ordinary shares shall be
allotted to the holders of the elected ordinary shares on the basis
of allotment calculated as stated. For such purpose the Board shall
capitalise, out of any amount for the time being standing to the
credit of any reserve or fund (including the profit and
loss account) whether or not the same is available for distribution
as the Board may determine, a sum equal to the aggregate nominal
amount of the additional ordinary shares to be allotted on that basis
and apply it in paying up in full the appropriate number of unissued
ordinary shares for allotment and distribution to the holders of the
elected ordinary shares on that basis.
(g) The additional ordinary shares when allotted shall rank pari passu in
all respects with the fully-paid ordinary shares then in issue except
that they will not be entitled to participation in the relevant
dividend.
(h) The Board may also from time to time establish or vary a procedure for
election mandates, under which a holder of ordinary shares may maintain
an election in respect of future rights offered to that holder under this
Article until the election mandate is revoked in accordance with the
procedure and may do all such acts and other things as it may consider
necessary or expedient to give effect to this Article including, in its
discretion, amending, suspending or terminating any offer in operation.
(i) If the amount of cash dividend remaining payable to a holder in
respect of elected ordinary shares is less than (pound)3 (or such
other amount as the Board from time to time determine) then, if the
Board so resolves, such amount shall not be paid but retained for the
benefit of the Company.
RESERVES
152. The Board mayfrom time to time, set aside out of the profits of the Company
such sums as it thinks proper which shall, at the discretion of the Board, be
applicable for any purpose to which the profits of the Company may be properly
applied and pending such application may, also at such discretion, either be
employed in the business of the Company or be invested in such investments as
the Board may from time to time think fit. The Board may also without placing
the same to reserve carry forward any profits. The Board may divide the reserve
into special funds as it thinks fit and may consolidate into one fund any
special funds or any parts of any special funds into which the reserve may have
been divided. In carrying sums to reserve and in applying the same the Board
shall comply with the provisions of the Companies Acts.
CAPITALISATION OF PROFITS AND RESERVES
153. The Board may, with the sanction of an ordinary resolution of the Company,
capitalise any sum standing to the credit of any of the Company's reserve
accounts (including any share premium account, capital redemption reserve or
other undistributable reserve) or any sum standing to the credit of profit and
loss account by appropriating such sum to the holders of ordinary shares on the
register of members at the close of business on the date of the resolution (or
such other date as may be specified therein or determined as therein provided)
in proportion to their then holdings of ordinary shares and applying such sum on
their behalf in paying up in full unissued ordinary shares (or, subject to any
special rights previously conferred on any shares or class of shares for the
time being issued, unissued shares of any other class not being redeemable
shares) for allotment and distribution credited as fully-paid up to and amongst
them as bonus shares in the proportion aforesaid. The Board may do all acts and
things considered necessary or expedient to give effect to any such
capitalisation, with full power to the Board to make such provisions as they
think fit for any fractional entitlements which would arise on the basis
aforesaid (including provisions whereby fractional entitlements are disregarded
or the benefit thereof accrues to the Company rather than to the Members
concerned). The Board may authorise any person to enter on behalf of all the
Members interested into an agreement with the Company providing for any such
capitalisation and matters incidental thereto and any agreement made under such
authority shall be effective and binding on all concerned.
RECORD DATES
154. Notwithstanding any other provision of these Articles, but without
prejudice to the rights attached to any shares the Company or the Board may fix
any date as the record date for any dividend, distribution, allotment or issue
and such record date may be on or at any time before or after any date on which
such dividend, distribution, allotment or issue is declared, paid or made.
FORM OF REGISTERS
155. Any register, index, minute book, book of account or other book required by
these Articles or the Companies Acts to be kept by or on behalf of the Company
may be kept either by making entries in bound books or by recording them in any
other manner. In any case in which bound books are not used, the Directors shall
take adequate precautions for guarding against falsification and for
facilitating its discovery.
ACCOUNTING RECORDS
156. The Board shall cause to be kept accounting records sufficient to give a
true and fair view of the state of the Company's affairs and to show and explain
its transactions, in accordance with the provisions of the Companies Acts. The
accounting records shall be kept at the Office or, subject to the provisions of
the Companies Acts, at such other place or places as the Board may think fit and
shall always be open to inspection by the officers of the Company. No Member
(other than an officer of the Company) shall have any right of inspecting any
accounting record or book or document of the Company except as conferred by law
or authorised by the Board or by the Company in general meeting.
157. Unless the Companies Acts from time to time otherwise permit a copy of
every balance sheet and profit and loss account, including every document
required by law to be annexed thereto, which is to be laid before the Company in
general meeting, together with a copy of the auditor's report, shall be sent to
each person entitled thereto in accordance with the requirements of the
Companies Acts or of these Articles,. Provided that this Article shall not
require a copy of such documents or any substitute permitted by the Companies
Acts to be sent to more than one of joint holders or to any person of whose
address the Company is not aware, but any Member or holder of debentures to whom
a copy of such documents or any substitute permitted by the Companies Acts has
not been sent shall be entitled to receive a copy free of charge on application
at the Office.
AUDITORS
158. Auditors shall be appointed and their duties regulated in accordance with
the provisions of the Companies Acts PROVIDED THAT (subject to the provisions of
the Companies Acts) all acts done by any person acting as an auditor shall, as
regards all persons dealing in good faith with the Company, be valid,
notwithstanding that there was some defect in his appointment or that he was at
the time of his appointment not qualified for appointment or subsequently became
disqualified.
159. An auditor shall be entitled to attend any general meeting and to receive
all notices of and other communications relating to any general meeting which
any Member is entitled to receive and to be heard at any general meeting on any
part of the business of the meeting which concerns him as auditor.
SERVICE OF NOTICES AND OTHER DOCUMENTS
160. Any notice or document (including a share certificate) may be served on or
delivered to any Member by the Company either personally or by sending it
through the post in a prepaid cover addressed to such Member at his registered
address, or (if he has no registered address within the United Kingdom) to the
address, if any, within the United Kingdom supplied by him to the Company as his
address for the service of notices, or by delivering it to such address
addressed as aforesaid or, subject to the Companies Acts, electronically to an
electronic address or facsimile number notified to the Company by the
shareholder for this purpose, provided that a share certificate may only be
delivered personally or by post. In the case of a Member registered on a branch
register any such notice or document may be posted either in the United Kingdom
or in the territory in which such branch register is maintained. Where a notice
or other document is served or sent by post, service or delivery shall be deemed
to be effected at the expiration of twenty-four hours (or, where second-class
mail is employed, forty-eight hours) after the time when the cover containing
the same is posted and in proving such service or delivery it shall be
sufficient to prove that such cover was properly addressed, stamped and posted.
Where a notice or document is sent electronically service or delivery is deemed
to be effected at the time of transmission and in proving such service or
delivery it shall be sufficient to show that the sender's equipment indicates
successful transmission. The accidental failure to send, or the non-receipt by
any person entitled to, any notice of or other document relating to any meeting
or other proceedings shall not invalidate the relevant meeting or other
proceeding. Any notice or other document may be served or delivered by the
Company by reference to the register of members as it stands at any time not
more than 15 days before the date of service or delivery, no change in the
register of members after that time shall invalidate that service or delivery.
The provisions of Article 146 shall mutatis mutandis apply to any other notices
or communications to shareholders. All share certificates and/or other documents
of title sent by or to a Member or as he may direct shall be sent at his risk.
161. Any notice given to that one of the joint holders of a share whose name
stands first in the register of members in respect of the share shall be
sufficient notice to all the joint holders in their capacity as such. For such
purpose a joint holder having no registered address in the United Kingdom and
not having supplied an address within the United Kingdom for the service of
notices shall be disregarded.
162. A person entitled to a share in consequence of the death or bankruptcy of a
Member or otherwise by operation of law upon supplying to the Company such
evidence as the Board may reasonably require to show his title to the share, and
upon supplying also an address within the United Kingdom for the service of
notices, shall be entitled to have served upon or delivered to him at such
address any notice or document to which the Member would have been entitled, and
such service or delivery shall for all purposes be deemed a sufficient service
or delivery of such notice or document on all persons interested (whether
jointly with or as claiming through or under him) in the share. Save as
aforesaid any notice or document delivered or sent by post to or left at the
address of any Member in pursuance of these Articles shall, notwithstanding that
such Member be then dead or bankrupt or in liquidation, and whether or not the
Company has notice of his death or bankruptcy or liquidation, be deemed to have
been duly served or delivered in respect of any share registered in the name of
such Member as sole or first-named joint holder.
163. A Member who (having no registered address within the United Kingdom) has
not supplied to the Company an address within the United Kingdom for the service
of notices shall not be entitled to receive notices from the Company.
164. Any Member present, either personally or by proxy, at any meeting of the
Company or class of Members of the Company shall for all purposes be deemed to
have received due notice of such meeting and, where requisite, of the purposes
for which such meeting was convened.
165. Every person who by operation of law, transfer or any other means
whatsoever, shall become entitled to any shares shall be bound by every notice
(other than a notice served under Article 78 (b) or (c) unless the said Article
other wise provides) in respect of such shares which previously to his name and
address being entered in the register of members shall have been duly given to
the person from whom he derives his title to such shares.
166. If at any time by reason of the suspension or curtailment of postal
services within the United Kingdom the Company is unable effectively to convene
a general meeting by notices sent through the post, a general meeting may be
convened by a notice advertised in at least one national newspaper with
appropriate circulation and such notice shall be deemed to have been duly served
on all Members entitled thereto at noon on the day when the advertisement
appears. In any such case the Company shall send confirmatory copies of the
notice by post if at least seven days prior to the meeting the posting of
notices to addresses throughout the United Kingdom again becomes practicable.
167. Nothing in any of the preceding seven Articles shall affect any requirement
of the Companies Acts that any particular offer, notice or other document be
served in any particular manner.
DESTRUCTION OF DOCUMENTS
168. The Company may destroy:-
(a) any share certificate which has been cancelled at any time after
the expiry of one year from the date of such cancellation;
(b) any dividend mandate or any variation or cancellation thereof or any
notification of change of name or address at any time after the
expiry of two years from the date such mandate variation cancellation
or notification is recorded by the Company;
c) any instrument of transfer of shares which has been registered at
any time after the expiry of six years from the date of registration;
and
(d) any other document on the basis of which any entry in the register is
made at any time after the expiry of six years from the date an entry
in the register was first made in respect of it;
and it shall conclusively be presumed in favour of the Company that every share
certificate so destroyed was a valid certificate duly and properly cancelled and
that every instrument of transfer so destroyed was a valid and effective
instrument duly and properly registered and that every other document destroyed
hereunder was a valid and effective document in accordance with the recorded
particulars thereof in the books or records of the Company. Provided always
that:-
(i) the foregoing provisions of this Article shall apply only to
the destruction of a document in good faith and without
express notice to the Company that the preservation of such
document was relevant to a claim;
(ii) nothing contained in this Article shall be construed as
imposing upon the Company any liability in respect of the
destruction of any such document earlier than as aforesaid
or in any case where the conditions of proviso (i) above are
not fulfilled; and
(iii) references in this Article to the destruction of any
document include references to its disposal in any manner.
WINDING UP
169. The Board shall have power in the name and on behalf of the
Company to present a petition to the Court for the Company to be wound up.
170. If the Company shall be wound up (whether the liquidation is voluntary,
under supervision, or by the Court) the liquidator may, with the authority of an
extraordinary resolution and subject to any provision sanctioned in accordance
with the provisions of the Companies Acts, divide amongst Members in specie or
kind the whole or any part of the assets of the Company (whether they shall
consist of property of the same kind or not) and may, for such purposes, set
such values as he deems fair upon any property to be divided as aforesaid and
may determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like authority, vest
the whole or any part of the assets in trustees upon such trusts for the benefit
of Members as the Liquidator with the like authority shall think fit, and the
liquidation of the Company may be closed and the Company dissolved, but so that
no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability and the liquidator may make any provision
referred to in, and sanctioned in accordance with the provisions of the
Companies Acts.
INDEMNITIES
171. Subject to the provisions of the Companies Acts, every Director, alternate
Director, auditor, Secretary or other officer of the Company shall be entitled
to be indemnified by the Company against all costs, charges, losses, expenses
and liabilities incurred by him in the execution and/or discharge of his duties
and/or the exercise of his powers and/or otherwise or in relation thereto or in
connection with his duties, powers or office including (without prejudice to the
generality of the foregoing) any liability incurred by him in defending any
proceedings, civil or criminal, which relate to anything done or omitted or
alleged to have been done or omitted by him as an officer or employee of the
Company and in which judgement is given in his favour (or the proceedings
otherwise disposed of without any finding or admission of any material breach of
duty on his part) or in which he is acquitted or in connection with any
application under any statute for relief from liability in respect of any such
act or omission in which relief is granted to him by the Court.
EMPLOYEES
172. The Board may by resolution exercise any power conferred by the Companies
Acts to make provision for the benefit of persons employed or formerly employed
by the Company or any of its subsidiaries in connection with the cessation or
the transfer to any person of the whole or part of the undertaking of the
Company or that subsidiary.
HUNTINGDON INTERNATIONAL HOLDINGS plc
AND
THE BANK OF NEW YORK
As Depositary
AND
HOLDERS OF AMERICAN DEPOSITARY RECEIPTS
DEPOSIT AGREEMENT
Dated as of June 21, 1983
And
Amended and Restated as of June 6, 1996
<PAGE>
AMENDED AND RESTATED
DEPOSIT AGREEMENT
The DEPOSIT AGREEMENT, dated as of June 21, 1983 among Huntingdon International
Holdings plc, an English Company (herein called the Company), MORGAN GUARANTY
TRUST COMPANY OF NEW YORK a New York corporation, and all Holders from time to
time of American Depositary Receipts issued hereunder is hereby amended and
restated as follows as of this 6th day of June 1996 among the Company, The Bank
of New York, a New York banking corporation (herein called the Depositary) , and
all Holders from time to time of American Depositary Receipts (herein referred
to as the "Deposit Agreement).
WITNESSETH:
WHEREAS, the Company desires to provide, as hereinafter set forth in this
'Deposit Agreement, for the deposit of Ordinary Shares of 5p each (par value)
(herein called the Ordinary Shares) of the Company from time to time with the
Depositary or with the principal London office of The Bank 0f New York (herein
called the Custodian), as agent of the Depositary for the purposes set forth in
this Deposit Agreement, for the creation of American Depositary Shares
representing the Ordinary Shares so deposited and for the execution and delivery
of American Depositary Receipts in respect of the American Depositary Shares;
and
WHEREAS, the American Depositary Receipts are to be substantially in the form of
Exhibit A annexed hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and between
the parties hereto as follows:
ARTICLE 1 DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly
indicated, apply to the respective terms used in this Deposit Agreement:
SECTION 1.01 Company
The term "Company' shall mean Huntingdon International Holdings plc, an English
company, and its successors.
SECTION 1.02 Depositary
The term "Depositary" shall mean The Bank of New York, a New York banking
corporation, and its successors as depositary hereunder. The term Corporate
Trust Office, when used with respect to the Depositary, shall be the Corporate
Trust Office as it is there at 101 Barclay Street, New York, New York 10286, or
at such other location as may be designated by the Depositary.
SECTION 1.03 Custodian
The term "Custodian" shall mean the principal London office of The Bank of New
York, presently located at 3 Birchin Lane, London, EC3V 9B4, England, as agent
of the Depositary for the purposes of this Deposit Agreement, and any other firm
or corporation which may hereafter be appointed by the Depositary, pursuant to
the terms of Section 5.05, as substitute Custodian hereunder.
SECTION 1.04 Deposit Agreement
The term "Deposit Agreement" shall mean this agreement, as the same may be
amended from time to time in accordance with the provisions hereof.
SECTION 1.05 Ordinary Shares
The term 'Ordinary Shares" shall mean the Ordinary Shares of 5p each (par value)
of the Company heretofore validly issued, fully paid and nonassessable, and
currently outstanding, and hereafter validly issued and outstanding and fully
paid and nonassessable.
SECTION 1.06 Deposited Securities
The term "Deposited Securities" as of any time shall mean the Ordinary Shares at
such tine deposited under this Deposit Agreement and any and all other
securities, property and cash received by the Depositary or the Custodian in
respect thereof and at such time held hereunder, subject as to cash to the
provisions of Section 4.05.
SECTION 1.07 Receipts
The term "Receipts" shall mean the American Depositary Receipts issued hereunder
representing American Depositary Shares.
SECTION 1.08 American Depositary Share
The term "American Depositary Share" shall mean a security evidenced by an
American Deposita1y Receipt, that represents a foreign security or a multiple of
or fraction thereof deposited with a depositary, the rights represented by the
Receipts issued hereunder and the interests in the Deposited Securities
represented thereby. Each American Depositary Share shall represent five
Ordinary Shares (or evidence of rights to receive such Ordinary Shares), until
there shall occur a distribution upon Deposited Securities covered by Section
4.03 or a change in Deposited securities covered by Section 4.08 with respect to
which additional Receipts are not executed and delivered, and thereafter
American Depositary Shares shall represent the number of Ordinary Shares or
Deposited Securities specified in such Sections.
SECTION 1.O9 Holder
The term "Holder" shall mean the person in whose name a Receipt is registered on
the books of the Depositary maintained for such purpose.
SECTION 1.10 Registrar
The term "Registrar" shall mean any bank or trust company appointed to
countersign Receipts and transfers of Receipts as herein provided and shall
include any coregistrar appointed by the Depositary, upon the request or with
the approval of the Company, for such purposes.
SECTION 1.11 Dollars
The term "dollars" shall mean United States dollars. The term "pounds sterling"
shall mean United Kingdom pounds sterling.
SECTION 1.12 Securities Act of 1933
The term "Securities Act of 1933" shall mean the Act of May 27, 1933 (15 US
Code, Secs 77a77aa), as from time to time amended.
SECTION 1.13 Commission
The term "Commission" shall mean tbe Securities and Exchange Commission of the
United States or any successor governmental agency in the United States.
ARTICLE 2 FORM OF RECEIPTS, DEPOSIT OF ORDINARY SHARES, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.01 Form and Transferability of Receipts
Definitive Receipts shall be engraved or printed or lithographed, shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Such Receipts shall be executed by the Depositary by the
manual or facsimile signature of a duly authorized signatory of the Depositary
and, if a Registrar for the Receipts shall have been appointed, countersigned by
the manual or facsimile signature of a duly authori2ed signatory of the
Registrar. No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose, unless such Receipt shall
have been executed by the Depositary by the manual or facsimile signature of a
duly authorized signatory or, if a Registrar shall have been appointed, by the
manual or facsimile signature of a duly authorized signatory of the Registrar.
The Depositary shall maintain books on which each Receipt so executed and
delivered as hereinafter provided and the transfer of each such Receipt shall be
registered Receipts bearing the manual or facsimile signature of a duly
authorized signatory of the Depositary who was at any time a proper signatory of
the Depositary shall bind the Depositary, notwithstanding that such signatory
has ceased to hold such office prior to signature of the Registrar and delivery
of such Receipts or did not hold such office at the date of such Receipts.
The Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulations thereunder or with the rules and
regulations of any securities exchange upon which the American Depositary Shares
may be listed or to conform with any usage with respect thereto, or to indicate
any special limitations or restrictions to which any particular Receipts are
subject by reason of the date of issuance of the underlying Deposited Securities
or otherwise.
Title to a Receipt (and to the American Depositary shares evidenced thereby) ,
when properly endorsed or accompanied by proper instruments of transfer, shall
be transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that the Depositary, notwithstanding any notice
to the contrary, may treat the Holder thereof as the absolue owner thereof for
the purpose of determining the person entitled to distribution of dividends or
oher distributions or to any notice provided for in this Deposit Agreement, and
for all other purposes.
SECTION 2.02 Deposit of Ordinary Shares
Subject to the terms and conditions of this Deposit Agreement, Ordinary Shares
or evidence of rights to receive Ordinary Shares may be deposited by the
delivery thereof to the Custodian, accompanied by any appropriate instrument or
instruments of transfer, or endorsement, in form satisfactory to the Custodian,
together with all suh cerificaions as may be required by the Depositary or the
Custodian in accordance with the provisions of this Deposit Agreement, and
together with a written order directing the Depositary to execute and deliver
to, or upon the written order of, the person or persons stated in such order a
Receipt or Receipts for the number of American Deposiary Shares representing
such deposit. No Ordinary Shares shall be accepted for deposit unless
accompanied by evidence satisfactory to the Depositary that any necessary
aproval has been granted by the governmental body in the United Kingdom, if any,
which is then performing the function of the regulation of currency exchange. If
required by the Depositary, Ordinary Shares presented for deposit at any time,
whether or not the transfer books of the Company are closed, shall also be
accompanied by an agreement or assignment, or other instrument satisfactory to
the Depositary, which will provide for the prompt transfer to the Custodian of
any dividend, or right to subscribe for addiional Ordinary Shares or to receive
other propery, which any person in whose name the Ordinary Shares are or have
been recorded may thereafter receive upon or in respect of such deposited
Ordinary Shares, or in lieu thereof, such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary.
At the request and risk and expense of any holder of ordinary Shares, and for
the account of such holder, the Depositary may receive certificates for Ordinary
Shares to be deposited, together wih the other instruments herein specified, for
the purpose of forwarding such certificaes for Ordinary Shares to the Custodian
for deposit hereunder.
Upon each delivery to the Custodian of a cerificate or cerificates for Odinary
Shares to be deposited hereunder, together with the other documents above
specified, the Custodian shall, as soon as transfer and recordation can be
accomplished, present such certificate or certificates to the Company for
transfer and recordation of the Ordinary Shares being deposited in the name of
the Depositary or its nominee, or the Custodian or its nominee.
Deposited Ordinary Shares shall be held by the Depositary, or by the Cusodian
for the account and to the order of the Depositary, or at such other place or
places as the Depositary shall determine.
SECTION 2.03 Execution and Delivery of Receipts.
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Upon receipt by the Cusodian of any deposit pursuant to Section 2.02 hereunder
(and in addtion, if the transfer books of the Company are open, a proper
acknowledgment or other evidence from the Company satisfactory to the Depositary
that any deposited Ordinary Shares have been recorded upon the Company's books
in the name of the Depositary or its nominee or the Custodian or its nominee},
together with the other documents required as above specified, the Custodian
shall notify the Depositary of such deposit and the person or persons to whom or
upon whose written order a Receipt or Receipts are deliverable in respect
thereof and the number of American Depositary Shares to be represented thereby.
Such notification shall be made by letter or, at the request and risk and
expense of the person making the deposit, by cable, telex or facsimile
transmission. Upon receiving such notice from the Custodian, the Depositary,
subject to the terms and conditions of this Deposit Agreement, shall execute and
deliver at its Corporate Trust Office in the Borough of Manhattan, The City of
New York, to or upon the order of the person or persons named in the notice
delivered to the Depositary, a Receipt or Receipts, registered in the name or
names and representing any authorized number of American Depositary Shares
requested by such person or persons, but only upon payment to the Depositary of
the fee of the Depositary for the execution and delivery of such Receipt or
Receipts and of all taxes and governmental charges and fees payable in
connection with such deposit and the transfer of the deposited Ordinary Shares.
SECTION 2.04. Transfer of Receipts, Comninations and Splitups.
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Subject to the terms and conditons of this Deposit Agreement, the Depositary
shall register transfers on its transfer books from time to time of Recipts upon
any surrender of a Receipt, by the Holder in person or by duly authorized
attorney, properly endorsed or accompanied by proper instruments of transfer,
and duly stamped as may be required by any applicable laws. Thereupon the
Depositary shall execute a new Receipt or Receipts and deliver the same to or
upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit Agreement,
shall, upon surrender of a Receipt or Receipts for the purpose of effecting a
splitup or combination of such Receipt or Receipts, execute and deliver a new
Receipt or Receipts for any authorized number of American Depositary Shares
requested, representing the same aggregate number of American Depositary Shares
as the Receipt or Receipts surrendered.
SECTION 2.05. Surrender of Receipts and Withdrawal of Ordinarv Shares.
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Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for
the purpose of withdrawal of the Deposited Securities represented thereby, and
upon payment of the fee of the Depositary for the cancellation of Receipts, and
subject to the terms and conditions of this Deposit Agreement, the Holder of
such Receipt shall be entitled to delivery, to him or upon his order, of the
amount of Deposited Securities at the time reprented by such Receipt. Delivery
of such Deposited Securities may be made by the delivery of certificates in the
name of such Holder or as ordered by him, or by the delivery of certificates
properly endorsed or accompanied by proper instruments of transfer. Such
delivery shall be made as hereinafter provided, without unreasonable delay.
A Receipt surrendered for such purposes may be required by the Depositary to be
properly endorsed in blank or accompanied by proper instruments of transfer in
blank, and the Holder thereof shall execute and deliver to the Depositary a
written order directing the Depositary to cause the Deposited Securities being
withdrawn to be delivered to or upon the written order of the person or persons
designated in such order. Thereupon the Depositary shall direct the Custodian to
deliver at the London office of the Custodian, subject to Sections 2.07, 3.01
and 3.02, and to the other terms and conditions of this Deposit Agreement, to or
upon the written order of the person or persons designatd in the order delivered
to the Depositary as above provided, the amount of Deposited Securities
represented by such Receipt, except that the Depositary may make delivery to
such person or persons at the Corporate Trust Office of the Depositary of any
dividends or distributions with respect to the Deposited Securities represented
by such Receipt, or of any proceeds of sale of any dividends, distributions or
rights, which may at the time be held by the Depositary .
At the request and risk and expense of any Holder so surrendering a Receipt, and
for the account of such Holder, the Depositary shall direct the Custodian to
forward a certificate or certificates and other proper documents of title for
the Deposited Securities represented by such Receipt to the Depositary for
delivery at the office of the Depositary. Such direction shall be given by
letter or, at the request and risk and expense of such Holder, by cable, telex
or facsimile transmission.
SECTION 2.06. Appointment of Cotransfer Agents.
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The Depositary may appoint one or more cotransfer agents for the purpose of
effecting transfers, combinations and splitups of Receipts as aforesaid at
designated transfer offices on behalf of the Depositary. In the event a
cotransfer agent is so appointed, it shall carry out its functions on behalf of
the Depositary in accordance with any applicable laws, the requirements of any
stock exchange upon which the Receipts or the American Depositary Shares
represented thereby are listed and in accodance with the instructions of the
Depositary. In carrying out its functions, a cotransfer agent may require
evidence of authority and compliance wich applicable law and other requirements
by Holders of Receipts or persons entitled thereto and shall be entitled to
protection and indemnity to the same extent as the Depositary.
SECTION 2.07. Limitations on Execution and Delivery, Transfer, etc of
Receipts, Suspension of Delivery, Transfer etc.
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As a condition precedent to the execution and delivery, registration of
transfer, splitup, combination or surrender of any Receipt or withdrawal of any
Depclsited Securities, the Depositary or the Custodian may require payment from
the presenter of the Receipt of a sum sufficient to reimburse it for any tax or
other governmental charge and any stock transfer or registration fee with
respect thereto (including any such tax or charge and fee with respect to
Ordinary Shares being deposited or withdrawn) and payment of any applicable fees
as herein provided, may require the production of proof satisfactory to it as to
the identity and genuineness of any signature and my also require compliance wih
such regulations, if any, as the Depositary may esablish consistent with the
provisions of this Deposit Agreement.
The delivery of Receipts against deposits of Ordinary Shares generally may be
suspended, or the delivery of Receipts against the deposit of particular
Ordinary Shares may be withheld, or the registration of transfer of Receipts in
particular instances may be refused or the registration of transfer or surrender
of outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary or the Company are closed, or if any such
action is deemed necessary or advisable by the Depositary or the Company at any
time or from time to time because of any requirement of law or of any government
or governmental body or commission, or under any provision of this Deposit
Agreement subject to the provisions of 7.07. Notwithstanding any other provision
of this Deposit Agreement or the Receipts, the surrender of outstanding Receipts
and withdrawal of Deposited Securities may not be suspended subject only to (i)
temporary delays caused by closing the transfer books of the Depositary or the
Company or the deposit of Shares in connection with voting at a shareholders'
meeting, or the payment of dividends, (ii) the payment of fees, taxes and
similar charges, and (iii) compliance with any US or foreign laws or
governmental regulations relating to the Receipts or to the wihdrawal of the
Deposited Securities. Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under this Deposit Agreement any Ordinary
Shares which if sold by the holder thereof in the United States or its
territories, would be subject to the registration provisions of the Securities
Act of 1933, unless a registration statement is in effect as to such Ordinary
Shares.
SECTION 2.08. Lost Receipts etc.
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In case any Receipt shall be mutilalted, destroyed, lost or stolen, the
Depositary shall execute and deliver a new Receipt of like tenor, in exchange
and substitution for such mutilated Receipt upon cancellation thereof, or in
lieu of and in substitution for such destroyed or lost or stolen Receipt, upon
the Holder thereof filing with Depositary (a) a request for such exchange and
delivery before the Depositary has notice that the Receipt has been acquired by
a bona fide purchaser and {b) a sufficient indemnity bond and satisfying any
other reasonable requirements imposed by the Depositary.
SECTION 2.09. Cancellation and Destruction of Surrendered Receipts.
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All Receipts surrendered to the Depositary shall be cancelled by the Depositary.
The Depositary is authorized to destroy Receipts so cancelled.
SECTION 2.10. Pre-Release of Receipts
Notwithstanding Section 2.03 hereof, the Depositary may execute and deliver
Receipts prior to the receipt of Shares pursuant to Section 2.02
("Pre-Release"). The Depositary may, pursuant to Section 2.05, deliver Shares
upon the receipt and cancellation of Receipts which have been Pre-Released,
whether or not such cancellation is prior to the termination of such Pre-Release
or the Depositary knows that such Receipt has been Pre-Released. The Depositary
may receive Receipts in lieu of Shares in satisfaction of a Pre-Release. Each
Pre-Release will be (a) preceded or accompanied by a written representation from
the person to whom Receipts are to be delivered that such person, or its
customer, owns the Shares or Receipts to be remitted, as the case may be, (b) at
all times fully collateralized with cash or such other collateral as the
Depositary deems appropriate, (c) terminable by the Depositary on not more than
five (5) business days notice, and (d) subject to such further indemnities and
credit regulations as the Depositary deems appropriate. The number of American
Depositary Shares which are outstanding at any time as a result of Pre-Releases
will not normally exceed thirty percent (30%) of the Shares deposited hereunder;
provided, however, that the Depositary reserves the right to change or disregard
such limit from time to time as it deems appropriate.
The Depositary may retain for its own account any compensation received by it in
connection with the foregoing.
ARTICLE 3. CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS
SECTION 3.01. Filing Proofs, Certificates and Other Information.
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Any person presenting Ordinary Shares for deposit or any Holder of a Receipt may
be required fron time to time to file such proof of citizenship or residence,
exchange control approval or such information relating to the registration on
the books of the Company of the Ordinary Shares presented for deposit or other
information, to execute such certificates and to make such representations and
warranties, as the Depositary may deem necessary or proper. The Depositary may
withhold the delivery or registration of transfer of any Receipt or the
distribution or sale of any dividend or other distribution or rights or of the
proceeds thereof or the delivery of any Deposited Securities until such proof or
other information is filed or such certificates are executed.
SECTION 3.02. Liability of Holder for Taxes.
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If any tax or other governmental charge shall become payable with respect to any
Deposited Securities represented by any Receipt, such tax or other governmental
charge shall be payable by the Holder of such Receipt to the Depositary. The
Depositary may refuse to effect any transfer of such Receipt or any withdrawal
of Deposited Securities represented thereby until such payment is made, and may
withhold any dividends or other distributions, or may sell for the account of
the Holder thereof any part or all of the Deposited Securities represented by
such Receipt, and may apply such dividends or other distributions or the
proceeds of any such sale in payment of such tax or other governmental charge,
the Holder of such Receipt remaining liable for any deficiency.
SECTION 3.03. Warranties on Deposit of Ordinary Shares.
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Every person depositing Ordinary Shares under this Deposit Agreement shall be
deemed thereby to represent and warrant that such Ordinary Shares and each
certificate therefor are validly issued, fully paid and nonassessable, and that
the person making such deposit is duly authorized so to do. Such representations
and warranties shall survive the deposit of Ordinary Shares and issuance of
Receipts.
ARTICLE 4. THE DEPOSITED SECURITIES
SECTION 4.01. Cash Distributions.
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Whenever the Depositary shall receive any cash dividend or other cash
distribution by the Company on any Deposited Securities, the Depositary shall,
subject to the provisions of Section 4.05. convert such dividend or distribution
into dollars and shall distribute the amount thus received to the Holders of
Receipts entitled thereto, in proportion to the number of American Depositary
Shares representing such Deposited Securities held by them respectively;
provided, however, that in the event that the Company or the Depositary shall be
required to withhold and does withhold from any cash dividend or other cash
distribution in respect of any Deposited Securities an amount on account of
taxes, the amount distributed to the Holder of Receipts for American Depositary
Shares representing such Deposited Securities shall be reduced accordingly. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any Holder of Receipts a fraction of one cent, and any
balance not so discributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and become part of the next sum
recejved by the Depositary for distribution to Holders of Receipts then
outstanding.
SECTION 4.02. Distributions Other Than Cash or Ordinary Shares.
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Whenever the Depositary shall receive any distribution other than cash or
Ordinary Shares upon any Deposited Securities, the Depositary shall cause the
securities or property received by it to be distributed to the Holders of
Receipts entitled thereto, in proportion to the number of American Depositary
Shares representing such Deposited Securities held by them respectively, in any
manner that the Depositary may deem equitable and practicable for accomplishing
such distribution; provided, however, that if in the opinion of the Depositary
such distribution cannot be made proportionately among the Holders of Receipts
entitled thereto, or if for any other reason (including any requirement that the
Company or the Depositary withhold an amount on account of taxes) the Depositary
deems such distribution not to be feasible, the Depositary may adopt such method
as it may deem equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, and the net proceeds of any such
sale shall be distributed by the Depositary to the Holders of Receipts entitled
thereto as in the case of a distribution received in cash.
SECTION 4.03. Distributions in Ordinary Shares.
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If any distribution upon any Deposited Securities consists of a dividend in, or
free distribution of, Ordinary Shares, the Depositary may with the Company's
approval, and shall if the Company shall so request, distribute to the Holders
of outstanding Receipts entitled thereto, in proportion to the number of
American Depositary Shares representing such Deposited Securities held by them
respectively, additional Receipts for an aggregate number of American Depositary
Shares representing the number of Ordinary Shares received as such dividend or
free distribution. In lieu of delivering Receipts for fractional American
Depositary Shares in any such case, the Depositary may sell the number of
Ordinary Shares represented by the aggregate of such fractions and distribute
the net proceeds, all in the manner and subject to the conditions described in
section 4.02. If additional Receipts are not so distributed (except as pursuant
to the preceding sentence), each American Share shall thenceforth also represent
the additional Ordinary Shares distributed upon the Deposited Securities
represented thereby.
SECTION 4.04. Rights.
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In the event that the Company shall offer or cause to be offered to the holders
of any Deposited Securities any rights to subscribe for additional Ordinary
Shares or any rights of any other nature, the Depositary shall have discretion
as to the procedure to be followed in making such rights available to the
Holders of Receipts or in disposing of such rights on behalf of such Holders and
making the net proceeds available in dollars to such Holders; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(i) if at the time of the offering of any rights the Depositary determines that
it is lawful and feasible to make such rights available to Holders of Receipts
by means of warrants or otherwise, the Depositary shall distribute warrants or
other instruments therefor in such form as it may determine to the Holders
entitled thereto, in proportion to the number of American Depositary Shares
representing such Deposited Securities, or employ such other method as it may
deem feasible in order to facilitate the exercise, sale or transfer of rights by
such Holders; or
(ii) if at the time of the offering of any rights the Depositary determines that
it is not lawful or not feasible to make such rights available to Holders of
Receipts by means of warrants or otherwise, or if the rights represented by such
warrants or such other instruments are not exercised and appear to be about to
lapse, the Depositary in its discretion may sell such rights or such warrants or
such other instruments at public or private sale, at such place or p1aces and
upon such terms as it may deem proper, and may allocate the proceeds of such
sales for account of the Holders of Receipts otherwise entitled to such rights,
warrants or other instruments, upon an averaged or other practicable basis
without regard to any distinctions among such holders because of exchange
restrictions, or the date of delivery of any Receipt or Receipts, or otherwise.
If registration under the Securities Act of 1933 of the securities to which any
rights relate is required in order for the Company to offer such rights to
Holders of Receipts and sell the Securities represented by such rights, the
Depositary will not offer such rights to the Holders of Receipts unless and
until such a registration statement is in effect or unless the offering and sale
of such securities to the Holders of such Receipts are exempt from registration
under the provisions of such Act.
SECTION 4.05. Conversion of Foreign Currency.
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Whenever the Depositary shall receive foreign currency, by way of dividends or
other distributions or the net proceeds from the sale of securities, property or
rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into dollars and the resulting dollars transferred to the United States,
the Depositary shall convert or cause to be converted, by sale or in any other
manner that it may determine, such foreign currency into dollars and such
dollars shall be distributed to the Holders of Receipts entitled thereto or, if
the Depositary shall have distributed any warrants or other instruments which
entitle the holders thereof to such dollars, then to the holders of such
warrants and/or instruments upon surrender thereof for cancellation. Such
distribution may be made upon an averaged or other practicable basis without
regard to any distinctions among Holders on account of exchange restrictions or
otherwise.
If such conversion or distribution can be effected only with the approval or
license of any government or agency thereof, the Depositary shall file such
application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign
currency received by the Depositary is not convertible on a reasonable basis
into dollars transferable to the United States or if any approval or license of
any government or agency thereof which is required for such conversion is denied
or in the opinion of the Depositary is not obtainable, or if any such approval
or license is not obtained within a reasonable period as determined by the
Depositary, the Depositary may distribute the foreign currency (or an
appropriate document evidencing the right to receive such foreign currency)
received by the Depositary to, or in its discretion may hold such foreign
currency proceeds for the respective accounts of, the Holders of Receipts
entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be
effected for distribution to some Holders of Receipts entitled thereto, the
Depositary may in its discretion make such conversion and distribution in
dollars to the extent permissible to the Holders of Receipts entitled thereto
and may distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders of Receipts
entitled thereto.
SECTION 4.06. Fixing of Record Date.
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Whenever any cash dividend or other cash distribution shall become payable or
any distribution other than cash shall be made, or whenever rights shall be
issued, with respect to the Deposited Securities, or whenever the Depositary
shall receive notice of any meeting of holders of Ordinary Shares or other
Deposited Securities, the Depositary shall fix a record date for the
determination of the Holders of Receipts who shall be entitled to receive such
dividend, distribution or rights, or the net proceeds of the sale thereof, or to
give instructions for the exercise of voting rights at any such meeting. Subject
to the provisions of sections 4.01 through 4.05, and to the other terms and
conditions of this Deposit Agreement, the Holders of Receipcts on such record
date shall be entitled to receive the amount distributable by the Depositary
with respect to such dividend or other distribution or such rights or the net
proceeds of sale thereof in proportion to the number of American Depositary
Shares held by them respectively.
SECTION 4.07. Votinq of Deposited Securities
Upon receipt of notice of any meeting of holders of Ordinary Shares or other
Deposited Securities, the Depositary shall, as soon as practicable thereafter,
mail to the Holders of Receipts a notice which shall contairn (a) such
information as is contained in such notice of meeting, and (b) a statement that
the Holders of Receipts at the close of business on a specified record date will
be entitled, subject to any applicable provisions of law and of the Memorandum
and Articles of Association of the Company, to instruct the Depositary as to the
exercise of the voting rights, if any, pertaining to the number of Ordinary
Shares or othe Deposited Securities represented by their respective American
Depositary Shares, and a brief statement as to the manner in which such
instructions may be given, including an express indication that instructions may
be given to the Depositary to give a discretionary proxy to a designated member
or members of the Board of Directors of the Company. Upon the written request of
a Holder of a Receipt on such record date, received on or before the date
established by the Depositary for such purpose, the Depositary shall endeavor in
so far as practicable to vote or cause to be voted the number of Ordinary Shares
or other Deposited Securities represented by such Receipt in accordance with the
instructions set forth in such request. The Depositary agrees not to vote the
number of Ordinary Shares or other Deposited Securities represented by a Receipt
unless it receives instructions from the record holder of such Receipt.
SECTION 4.08. Chanqes Affecting Deposited Securities.
-------------------------------------
Upon any change in par value, split-up, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalisation,
reorganization, merger or consolidation or sale of assets affecting the Company
or to which it is a party, any securities which shall be received by the
Depositary or the Custodian in exchange for or in conversion of or in respect of
Deposited Securities shall be treated as new Deposited Securities under this
Deposit Agreement, and American Depositary Shares shall thenceforth represent
the new Deposited Securities so received in exchange or conversion, unless
additional Receipts are delivered pursuant to the following sentence. In any
such case the Depositary may with the Company's approval, and shall if the
Company shall so request, execute and deliver additional Receipts as in the case
of a stock dividend, or call for the surrender of outstanding Receipts to be
exchanged for new Receipts specifically describing such new Deposited
Securities.
SECTION 4.09. Reports.
-------
The Depositary shall make availilble for inspection by Holders of Receipts at
its Corporate Trust Office any reports and communications received from the
Company which are both (a) received by the Depositary as the holder of the
Deposited Securities and (b) made generally availalble to the holders of such
Deposited Securities by the Company, and shall also furnish the same to any
other securities commission or stock exchange as required. The Depositary shall
also send to Holders of Receipts and to such securities commissions and stock
exchanges copies of such reports when furnished by the Company pursuant to
section 5.06.
The Depositary shall furnish to the Commission semi-annually beginning on or
before six months after the effective date of the Registration Statemet filed
with the Commission on or about April 15, 1983, the following in tabular form:
(1) The number of American Deposltary Shares evidenced by Receipts issued during
the period covered by the report; the number of American Depositary Shares
evidenced by Receipts retired during the period covered by the report; the total
amount of American Depositary Shares evidenced by Receipts remaining outstanding
at the end of the six month period; and the total number of holders of Receipts
at the end of the six month period.
(2) The name of each dealer known to the Depositary depositing Ordinary Shares
against issuance of Receipts during the period covered by the report.
The Company shall furnish the Depositary with the names of each such dealer
known to the Company and the Depositary shall include in its report the names of
such dealer or dealers which are supplied by the Company.
SECTION 4.10. Lists of Receipt Holders.
------------------------
Promptly upon request by the Company, the Depositary shall furnish to it a list,
as of a recent date, of the names, addresses and holdings of American Depositary
Shares by all persons in whose names Receipts sre registered on the transfer
books of the Depositary.
SECTION 4.11. Withholding.
-----------
Notwithstanding any other provision of this Deposit Agreement, in the event that
the Depositary determines that any distribution in property (including Ordinary
Shares or rights to subscribe therefor) is subject to any tax which the
Depositary is obligated to withhold, tbe Depositary may dispose of a portion of
such property (including Ordinary Shares and rights to subscribe therefor) by
public or priyate sale, and shall distribute the net proceeds of any such sale
after deduction of such taxes to the Holders of Receipts entitled thereto.
ARTICLE 5 .THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5. 01. Maintenance of Office and Transfer Books by the Depositary.
-----------------------------------------------------------
Until termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain in the Borough of Manhattan, The City of New York,
facilities for the execution and delivery, registration, registration of
transfers and surrender of Receipts in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at such transfer office for the registration of
Receipts and transfers of Receipts which at all reasonable times shall be open
for inspection by the Holders of Receipts, provided that such inspection shall
not be for the purpose of communicating with Holders of ReceiptS in the interest
of a business or object other than the business of the Company or a matter
related to this Deposit Agreement or the Receipts.
The Depositary may close the transfer books for the Receipts, at any time or
from time to time, when deemed expedient by it in connection with the
performance of its duties hereunder.
If any Receipts or the American Depositary Shares represented thereby are listed
on one or more stock exchanges, the Depositary shall act as Registrar or, with
the approval of the Company, appoint a Registrar or one or more co-registrars,
for registry of such Receipts in accordance with any requirements of such
exchanges. Such Registrar or co-registrars may be removed and a substitute
appointed by the Depositary upon the request or with the approval of the
Company.
SECTION 5.02. Prevention or Delay in Performance by the Depositary or the
Company.
Neither the Depositary nor the Company shall incur any liability to any Holder
of any Receipt, if by reason of any provision of any present or future law of
the United States or the United Kingdom or any other country, or of any other
governmental authority, or by reason of any provision, present or future, of the
Memorandum and Articles of Association of the Company, or by reason of any act
of God or war or other circumstance beyond its control, the Depositary or the
Company shall be prevented or forbidden from doing or performing any act or
thing which by the terms of this Deposit Agreement it is provided shall be done
or performed; nor shall the Depositary or the Company incur any liability to any
Holder of a Receipt by reason of any non-performance or delay, caused as
aforesaid, in performance of any act or thing which by the terms of this Deposit
Agreement it is provided shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in this Deposit
Agreement.
SECTION 5.03. Obligations of the Depositary, the Custodian and the Company.
------------------------------------------------------------
The Company assumes no obligation nor shall it be subject to any liability under
this Deposit Agreement to Holders of Receipts, except that it agrees to use its
best judgment and good faith in the performance of its obligations set forth in
this Deposit Agreement.
The Depositary assumes no obligation nor shall it be subject to any liability
under this Deposit Agreement to Holders of Receipts (including, without
limitation, liability with respect to the validity or worth of the Deposited
Securities), other than that it agrees to use its best judgment and good faith
in the performance of such duties as are specifically set forth in this Deposit
Agreement.
Neither the Depositary nor the Company shall be under any obligation to appear
in, prosecute or defend any action, suit or other proceeding in respect of any
Deposited Securities or in respect of the Receipcts, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required, and the
Custodian shall not be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the Depositary.
Neither the Depositary nor the Company shall be liable for any action or
non-action by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Ordinary Shares for deposit, any
Holder of a Receipt, or any other person believed by it in good faith to be
competent to give such advice or information.
The Depositary shall not be responsible for any failure to carry out any
instructions to vote any of the Deposited Securities, or for the manner in which
any such vote is cast or the effect of any such vote, provided that any such
action or non-action is in good faith.
The Depositary may own and deal in any class of securities of the Company and
its affiliates and in Receipts.
No disclaimer of liability under the Securities Act of 1933 is intended by any
provision of this Deposit Agreement.
S8CTION 5.04. Resiqnation and Removal of the Depositary, Appointment of
Successor Depositary.
----------------------------------------------------------
The Depositary may at any time resign as Depositary hereunder by written notice
of its election so to do delivered to the Company, such resignation to take
effect upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by written notice of
such removal effective upon Lhe appointment of a successor depositary and its
acceptance of such appointment of as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be removed,
the Company shall use its best efforts to appoint a successor depositary, which
shall be a bank or trust company having an office in the Borough of Manhattan,
The City of New York. Every successor depositary shall execute and deliver to
its predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor; but such predecessor, nevertheless,
upon payment of all sums due it and on the written request of the Company shall
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all right, title and interest in the Deposited Securities to such successor, and
shall deliver to such successor a list of the Holders of all outstanding
Receipts. Any such successor depositary shall promptly mail notice of its
appointment to the Holders of Receipts.
Any corporation into or with which the Depositary may be merged or consolidated
shall be the successor of the Depositary without the execution or filing of any
document or any further act.
SECTION 5.05. The Custodian.
-------------
The Depositary has appointed its principal London office as Custodian and agent
of the Depositary for the purposes of this Deposit Agreement. The Custodian in
acting hereunder shall be subject at all times and in all respects to the
directions of the Depositary and shall be responsible solely to it. The
Custodian may resign and be discharged from its duties hereunder by notice of
such resignation delivered to the Depositary at least 30 days prior to the date
on which such resignation is to become effective. The Depositary shall, promptly
after receiving such notice, appoint a substitute Custodian, which shall
thereafter be the Custodian hereunder. Whenever the Depositary in its discretion
determines that it is in the best interest of the Holders of Receipts to do so,
it may appoint a subsitute custodian, which shall thereafter be the Custodian
hereunder and upon demand of the Depositary the previous Custodian shall deliver
the Deposited Securities held by it to such substitute custodian. Each such
substitute Custodian shall deliver to the Depositary forthwith upon its
appointment an acceptance of such appointment satisfactory in form and substance
to the Depositary. Immediately upon any such change, the Depositary shall give
notice thereof in writing to all Holders of Receipts.
Upon the appointment of any succssor depositary bereunder, the Custodian then
acting hereunder shall forthwith become, without any further act or writing, the
agent hereunder of such successor depositary and the appointment of such
successor depositary shall in no way impair the authority of the Custodian
hereunder but the successor depositary so appointed shall, nevertheless, on the
written request of the Custodian, execute and deliver to the Custodian all such
instruments as may be proper to give to the Custodian full and complete power
and authortcy as agent hereunder of such successor depositary.
SECTION 5.06. Notices and Reports.
-------------------
On or before the first date of giving by the Company of notice, by publication
or otherwise, of any meeting of holders of Ordinary Shares or other Deposited
Securities, or of any adjourned meeting of such holders, or of the taking of any
action in respect of any cash or other distributions or the offering of any
rights, the Company agrees to transmit to the Custodian a copy of the notice
thereof in the form given or to be given to holders of Ordinary Shares or other
Deposited Securities.
The Depositary will, at the Company's expense, arrange for the prompt
transmittal by the Custodlan to the Depositary of such notices and any other
reports and communications which are made generally available by the Company to
holders of its Ordinary Shares, and arrange for the mailing of copies thereof to
all Holders of Receipts.
SECTION 5.07. Issuance of Additional Ordinary Shares, etc.
-------------------------------------------
The Company agrees that in the event of any issuance of (1) additional Ordinary
Shares, (2) rights to subscribe for Ordinary Shares, (3) securities convertible
into Ordinary Shares, or (4) rights to subscribe for such securities, the
Company will promptly furnish to the Depositary a written opinion from counsel
for the Company in the United States which counsel shall be satisfactory to the
Depositary, stating whether or not the circumstances of such issue are such as
to make it necessary for a Registration Statement under the Securities Act of
1933 to be in etfect in the United States prior to the delivery of the Receipts
to be issued in connection with such securities or the issuance of such rights.
If in the opinion of such counsel for the Company a Registration Statement is
required, such counsel shall furnish to the Depositary a written opinion as to
whether or not there is a Registration Statement in effect, or whether or not
such filings have been made, or such receipts, orders, approvals or consents
have been obtained, as the case may be, which will cover such issuance of
securities or rights.
The Company agrees with the Depositary that neither the Cmpany nor any company
controlled by the Company will at any time deposit any Ordinary Shares, either
upon original issuance or upon a sale of Ordinary Shares previously issued and
reacquired by the Company or by any company under its control, unless a
Registration Statement is in effect as to such Ordinary Shares under the
Securities Act of 1933 or such Ordinary Shares are exempt from registratLon
under the provisions of such Act.
SECTION 5.08. Indemnification.
---------------
The Company agrees to indemnify the Depositary, its directors, employees, agents
and affiliates and any Custodian against, and hold each of them harmless from,
any liability or expense (including, but not limited to, the fees and expenses
of counsel) which may arise out of acts performed or omitted, in accordance with
the provisions of this Deposit Agreement and of the Receipts, as the same may be
amended, modified or supplemented from time to time, (i) by either the
Depositary or a Custodian or their respective directors, employees, agents and
affiliates, except for any liability or expense arising out of the negligence or
bad faith of either of them, or (ii) by the Company or any of its directors,
employees, agents and affiliates.
The indemnities contained in the preceding paragraph shall not extend to any
liability or expense which arises solely and exclusively out of a Pre-Release
(as defined in Section 2.10 of this Deposit Agreement} of a Receipt or Receipts
in accordance with Section 2.10 of this Deposit Agreement and which would not
otherwise have arisen had such Receipt or Receipts not been the subject of a
Pre-Release pursuant to Section 2.10 of this Deposit Agreement; provided,
however, that the indemnities provided in the preceding paragraph shall apply to
any such liability or expense (i) to the extent that such liability or expense
would have arisen had a Receipt or Receipts not be the subject of a Pre-Release,
or (ii) which may arise out of any misstatement or alleged misstatement or
omission or a11eged omission in any registration statement, proxy statement,
prospectus (or placement memorandum), or preliminary prospectus (or preliminary
placement memorandum) relating to the offer or sale of American Depositary
Shares, except to the extent any such liability or expense arises out of (i)
information relating to the Depositary or any Custodian (other than the
Company), as applicable, furnished in writing and not materially changed or
altered by the Company expressly for use in any of the foregoing documents, or,
(ii) if such information is provided, the failure to state a material fact
necessary to make the information provided not misleading.
The Depositary agrees to indemnify the Company its directors, employees, agents
and affiliates and hold them harmless from any liability or expense which may
arise out of acts performed or omitted by the Depositary or its Custodian or
their respective directors, employees, agents and affiliates due to their
negligence or bad faith.
SECTION 5.09. Charqes of Depositary.
---------------------
The Company agrees to pay all charges and expenses of the Depositary as shown in
Exhibit B hereto, and those of any Registrar and co-transfer agent under this
Deposit Agreement other than (1) the fees of the Depositary for the execution
and delivery of Receipts pursuant to Section 2.03 and the surrender of Receipts
pursuant to Section 2.05, (2) taxes and other governmental charges, (3) such
registration fees as may from time to time be in effect for the registration of
transfers of Ordinary Shares generally on the Ordinary Share register of the
Company and accordingly applicable to transfers of Ordinary Shares to the name
of the Depositary or its nominee or the Custodian or its nominee on the making
of deposits hereunder, (4) such cable, telex and facsimile transmission and
delivery expenses as are expressly provided in this Deposit Agreement to be at
the expense of persons depositing Ordinary Shares or Holders of Receipts, and
(5) such expenses as are incurred by the Depositary in the conversion of foreign
currency pursuant to Section 4.05. Any other charges and expenses of the
Depositary hereunder will be paid by the Company after consultation and
agreement between the Depositary and the Company as to the amount and nature of
such charges and expenses. Such charges may at any time and from time to time be
changed by agreement between the Company and the Depositary. The Depositary
shall present its statement for such charges and expenses to the Company once
every three months. The charges and expenses of the Custodian are for the sole
account of the Depositary.
ARTICLE 6. AMENDMENT AND TERMINATION
SECTION 6.01. Amendment.
----------
The form of the Receipts and any provisions of this Deposit Agreement may at any
time and from time to time be amended by agreement between the Company and the
Depositary in any respect which they may deem necessary or desirable. Any
amendment which shall impose or increase any fees or charges (other chan taxes
and other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall
otherwise prejudice any substantial existing right of Holders of Receipts,
shall, however, not become effective as to outstanding Receipts until the
expiration of three months after notice of such amendment shall have been given
to the Holders of outstanding Receipts. Every Holder of a Receipt at the time
any such amendment so becomes effeccive shall be deemed, by continuing to hold
such Receipt, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair the
right of the Holder of any Receipt to surrender such Receipt and receive
therefor the Deposited Securities represented thereby.
SECTION 6.02. Termination.
-----------
The Depositary shall at any time at the direction of the Company terminate this
Deposit Agreement by mailing notice of such termination to the Holders of all
Receipts then outstanding at least 30 days prior to the date fixed in such
notice for such termination. The Depositary may likewise terminate this Deposit
Agreement if at any time 60 days shall have expired after the Depositary shall
have delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its appointment
as provided in Section 5.04. If any Receipts shall remain outstanding after the
date of termination, the Depositary thereafter shall discontinue the
registration of transfers of Receipts, shall suspend the distribution of
dividends to the Holders thereof, and shall not give any further notices or
perform any further acts under this Deposit Agreement, except that the
Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in this
Deposit Agreement, and shall continue to deliver Deposited Securities, together
with any dividends or other distributions received wich respect thereto and the
net proceeds of the sale of any rights or othher property, in exchange for
Receipt surrendered to the Depositary. At any time after the expiration of six
months from the date of termination, the Depositary may sell the Deposited
Securities then held hereunder and may thereafter hold the net proceeds of any
such sale, together with any other cash then held by it hereunder, without
liability for interest, for the pro rata benefit of the Holders of Receipts
which have not theretofore been surrendered. After making such sale, The
Depositary shall be discharged from all obligations under this Deposit
Agreement, except to account for such net proceeds and other cash. Upon the
termination of this Deposit Agreement, the Company shall he discharged from all
obligations under this Deposit Agreement except for its obligations to the
Depositary under Sections 5.08 and 5.09 hereof.
ARTICLE 7. MISCELLANEOUS
SECTION 7.01. This Deposit Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of such
counterparts shall constitute one and the same instrument. Copies of this
Deposit Agreement shall be filed with the Depositary and the Custodian at any
designated transfer office and shall be open to inspection at such offices by
any Holder of a Receipt during business hours.
SECTION 7.02. This Deposit Agreenent is for the exclusive benefit of the parties
hereto and shall not be deemed to give any legal or equitable right, reme1y or
claim whatsoever to any other person.
SECTION 7 03. In case anyone or more of the provisions contained in this Deposit
Agreement or in the Receipts should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no wise be affected,
prejudiced or disturbed thereby.
SECTION 7.04. The Holders of Receipts from time to time shall be parties to this
Deposit Agreement and shall be bound by all of the terms and conditions hereof
and of the Receipts by acceptance thereof.
SECTION 7.05. Any and all notices to be given to the Company shall be deemed to
have been duly given if personally delivered or sent by mail or by cable, telex
or facsimile transmission, confirmed by letter, addressed to Huntingdon
International Holdings plc, Huntingdon, Cambridgeshire, PE 18 6 ES, England, or
any other place to which the Company may have transferred its principal office.
Any and all notices to be given to the Depositary shall be deemed to have been
duly given if personally delivered or sent by mail or by cable, telex or
facsimile transmission, confirmed by letter, addressed to The Bank of New York,
101 Barclay Street, New York, New York 10286 Attention: American Depositary
Receipt Administration, or any other place to which the Depositary may have
transferred its Corporate Trust Office.
Any and all notices to be given to any Holder of a Receipt shall be deemed to
have been duly given if personally delivered or sent by mail or by cable, telex
or facsimile transmission, confirmed by letter, addressed to such Holder at the
address of such Holder as it appears on the transfer books of the Depositary,
or, if such Holder shall have filed with the Depositary a written request that
notices intended for such Holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by cable, telex or facsimile transmission
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a confirmation thereof in the case of cable, telex or
facsimile transmission) is deposited, Postage prepaid, in a post-office letter
box. The Depositary or the Company may, however, act upon any cable, telex or
facsimile transrnission received by it from the other or from any Holder of a
Receipt, notwithstanding that such cable, telex or facsimile transmission
message shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.06. This Deposit Agreement and the Receipts shall be interpreted and
all rights herrunder and thereunder and provisions hereof and thereof shall be
governed by the laws of the State of New York.
SECTION 7.07. Notwithstanding anything in this Deposit Agreement to the
contrary, the Company and the Depositary each agrees that it will not exercise
a11y rights it has under this Deposit Agreement to prevent the withdrawal or
delivery of Deposited Securities in a manner which would violate the US
securities laws, including, but not limited to, Section I.A.(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of .1933.
<PAGE>
IN WITNESS WHEREOF, HUNTINGDON INTERNATIONAL HOLDINGS PLC and THE BANK OF NEW
YORK have duly executed this agreement as of the day and year first above st
forth and all Holders of Receipts shall become parties hereto upon acceptance by
them of Receipts issued in accordance with the terms hereof.
HUNTINGDON INTERNATIONAL
HOLDINGS PLC
By: ________________________
Name:
Title:
THE BANK OF NEW YORK
By: ________________________
Name:
<PAGE>
EXHIBIT A
[FORM OF FACE OF RECEIPT]
AMERICAN DEPOSITARY RECEIPT FOR
AMERICAN SHARES
Representing
Deposited Ordinary Shares of
BUNTNGDON INTERNATIONAL HOLDINGS plc
(Incorporated under the laws of England)
No.
THE BANK OF NEW YORK, incorporated under the laws of the State of New
York, as Depositary (herein called the Depositary), hereby certifies that is the
owner of American Shares, representing deposited Ordinary Shares of 5p each (par
value) (herein called the Ordinary Shares), of Huntingdon International Holdings
plc, an English company {herein called the Company). At the date hereof, each
American Share represents five Ordinary Shares (or evidence of rights to receive
such number of Ordinary Shares) deposited under the Deposit Agreement at the
principal London office of the Depositary (herein called the Custodian).
(1) This American Depositary Receipt is one of an issue (herein called
the Receipts), all issued and to be issued upon the terms and conditions set
forth in the Deposit Agreement dated as of June 6, 1956 (herein called the
Deposit Agreement), by and between the Company, the Depositary and all Holders
from time to time of Receipts issued thereunder, each of whom by accepting a
Receipt agrees to become a party thereto and be bound by all the terms and
provisions thereof. The Deposit Agreement sets forth the rights of Holders of
the Receipts and the rights and duties of the Depositary in respect of the
Ordinary Shares deposited thereunder and any and all other sscurities, property
and cash from time to time received in respect of such Ordinary Shares and held
thereunder (such Ordinary Shares, securities, property and cash are herein
called Deposited Securities). Copies of the Deposit Agreement are on file at the
principal offices of the Depositary and the Custodian. The statements made on
the face and the reverse of this Receipt are summaries of certain provisions of
the Deposit Agreement and are qualified by and subject to the detailed
provisions of the Deposit Agreement, to which reference is hereby made.
(2) Upon surrender of this Receipt at the Corporate Trust Office of the
Depositary, and upon payment of the fee of the Depositary provided in paragraph
(6) of this Receipt and subject to the terms and conditions of the Deposit
Agreement, the Holder hereof is entitled to delivery, to him or upon his order,
of the Deposited Securities 4t the time represented by the American Shares for
which this Receipt is issued. Delivery of such Deposited Securities may be made
by the delivery of certificates in the name of the Holder hereof or as ordered
by him, or by the delivery of certificates endorsed or accompanied by proper
instruments of transfer. Such delivery will be made without unreasonable delay
and, at the option of The Holder hereof, either at the office of the Custodian
or at the Corporate Trust Office of the Depositary, provided that the forwarding
of certificates for Ordinary Shares or other Deposited Seourities for such
delivery at the Corporate Trust office of the Depositary in The City of New York
shall be at the risk and expense of the Holder hereof.
(3) This Receipt is transferable on the books of the Depositary upon
surrender of this Receipt by the Holder hereof, in person or by duly auchorized
attorney, properly endorsed or accompanied by proper instruments of transfer and
duly stamped as may be required by law; provided, however, that the Depositary
may close the transfer books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties under the
Deposit Agreement. This Receipt may be split into other Receipts or may be
combined with other Receipts into one Receipt, representing the same aggregate
number of American Shares as the Receipt or Receipts surrendered. As a condition
precedent to the execution and delivery, registration of transfer, split-up,
combination or surrender of any Receipt or withdrawal of any Deposited
Securities, the Deposita%y or the Custodian may require payment of a sum
sufficient to reimburse it for any tax or other governmental charge and any
stock transfer or registration fee with respect thereto and payment of any
applicable fees as provided in paragraph (6) of this Receipt, may require the
production of proof satisfactory to it as to the identity and genuineness of any
signature and may also require compliance with such regulations, if any, as the
Depositary may establish consistent with the provisions of the Deposit
Agreement.
The Depositary may refuse to execute and deliver Receipts, register the
transfer of any Receipt or make any distribution of, or related to, Deposited
Securities until it has received such proof of citizenship, residence, exchange
control approval or other information as it may deem necessary or proper. The
delivery of Receipts against deposits of Ordinary Shares, generally may be
suspepded, or the delivery of Receipts against the deposit of particular
Ordinary Shares may be withheld, or the registration of transfer of Receipts in
particular instances may be refused, or the registration of transfer or
surrenders of outstanding Receipts generally may be suspended, during any period
when the transfer books of the Depositary or the Company are closed, if any such
action is deemed necessary or advisable by the Depositary or the Company at any
time or from time to time, subject to the provisions of Article (19) hereof.
Notwithstanding any other provision of the Deposit Agreement or this Receipt,
the surrender of outstanding Receipts and withdrawal of Deposited Securities may
be suspended only for (i) temporary delays caused by closing the transfer books
of the Depositary or the Company or the deposit of Shares in connection with
voting at a shareholders' meeting, or the payment of dividends, (ii) the payment
of fees, taxes and similar charges, and (iii) compliance with any U.S. or
foreign laws or governmental regulations relating to the Receipts or to the
withdrawal of the Deposited Securities. Without limitation of the foregoing, the
Depositary will not knowingly accept for deposit under the Deposit Agreement any
Ordinary Shares which if sold by the holder thereof in the United States or its
territories, would be subject to the registration provisions of the Securities
Act of 1933, unless a registration statement is in effect as to such Ordinary
Shares.
(4) If any tax or other governmental charge shall become payable with
respect to any Deposited Securities represented hereby, such tax or other
governmental charge shall be payable by the Holder hereof to the Depositary. The
Depositary may refuse to effect any registration of transfer of this Receipt or
any withdrawal of Deposited Securities represented hereby until such payment is
made, and may withhold any dividends or other discributions, or may sell for the
account of the Holder hereof any part or all of the Deposited Securities
represented hereby, and may apply such dividends or other distributions or the
proceeds of any such sale in payment of such tax or other governmental charge,
the Holder hereof remaining liable for any deficiency.
(5) Every person depositing Ordinary Shares under the Deposit Agreement
shall be deemed thereby to represent and warrant that such Ordinary Shares and
each certificate therefor are valid and that the person making such deposit is
duly authorized so to do. Such representations and warranties shall survive the
deposit of Ordinary Shares and issuane of Receipts.
(6) The Depositary will charge the party to whom Receipts are delivered
against deposits, and the party surrendering Receipct for delivery of Deposited
Securities, $5.00 for each 100 American Shares (or portion thereof) represented
by the Receipts issued or surrendered. The Company will pay other charges of the
Depositary and those of any Registrar under the Deposit Agreement with the
exception of (i) taxes and other governmental charges, (ii) stock transfer
registration fees on deposits of Ordinary Shares, (iii) such cable, telex and
facsimile transmission, and delivery charges as are expressly provided in the
Deposit Agreement to be at the expense of persons depositing Ordirary Shares or
Holders of Receipts, and (iv} such expenses as are incurred by the Depositary in
the conversion of foreign currency into dollars.
(7) Notwithstanding Section 2.03 of the Deposit Agreement, the
Depositary may execute and deliver Receipts prior to the receipt of Shares
pursuant to Section 2.02 of the Deposit Agreement ("Pre-Release"). The
Depositary may, pursuant to Section 2.05 of the Deposit Agreement, deliver
Shares upon the receipt and cancellation of Receipts which have been
Pre-Released, whether or not such cancellation is prior to the termination of
such Pre-Release or the Depositary knows that such Receipt has been
Pre-Released. The Depositary may receive Receipts in lieu of Shares in
satisfactory of a Pre-Release. Each Pre-Release will be (a) preceded or
accompanied by a written representation from the person to whom Receipts are to
be delivered that such person, or its customer, owns the Shares or Receipts to
be remitted, as the case may be, (b) at all times fully collateralized with cash
or such other collateral as the Depositary deems appropriate, (c) terminable by
the Depositary on not more than five (5) business days notice, and (d) subject
to such further indemnities and credit regulations as the Depositary deems
appropriate. The number of American Depositary Shares which are outstanding at
any time as a result of Pre-Releases will not normally exceed thirty percent
(30%) of the Shares deposited under the Deposit Agreement; provided, however,
that the Depositary reserves the right to change or disregard such limit from
time to time as it deems appropriate.
The Depositary may retain for its own account any compensation received
by it in connection with the foregoing.
(8) It is a condition of this Receipt, and every successive Holder
hereof by accepting or holding the same consents and agrees, that title to this
Receipt (and to the American Shares evidenced hereby), when properly endorsed or
accompanied by proper instruments of transfer, is transferable by delivery with
the same effect as in the case of a negotiable instrument, provided, however,
that the Depositary, notwithstanqing any notice to the contrary, may treat the
person in whose name this Receipt is registered on the books of the Depositary
as the absolute owner hereof for the purpose of determining the person entitled
to distribution of dividends or other distributions or to any notice provided
for in the Deposit Agreement, and for all other purposes.
(9) This Receipt shall not be entitled to any benefits under the
Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt
shall have been executed by the Depositary by the manual or facsimile signature
of a duly authorized signatory or, if a Registrar for the Receipts shall have
been appointed, by the manual or facsimile signature of a duly authorized
signatory of such Registrar.
Dated:
THE BANK. OF NEW YORK,
as Depositary
By: _____________________
Vice President
The address of the principal executive office of the Depositary is 48 Wall
Street, New York, New York 10286. The address of the Corporate Trust Office of
the Depositary is 101 Barclay Street, New York, New York 10286.
<PAGE>
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVSIONS
OF THE DEPOSI AGREEMENT
(10) Dividends and Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Deposited Securities, the
Depositary will, if at the time of receipt thereof any amounts received in a
foreign currency can in the judgment of the Depositary be converted on a
reasonable basis into United States dollars transferable to the United States
and subject to the provisions of the Deposit Agreement, convert such dividend or
distribution into United States dollars and distribute the amount thus received
to the Holders of Receipts entitled thereto, in proportion to the number of
American Shares representing such Deposited Securities held by them
respectively; provided, however, that the amount distributed will be reduced by
any amounts required to be withheld by the Company or the Depositary on account
of taxes. If in the judgment of the Depositary amounts received in foreign
currency may not be converted on a reasonable basis into United States dollars
transferable to the United States or may not be so convertible for all of the
Holders of Receipts entitled thereto, the Depositary may in its discretion make
such conversion, if any, and distribution in United States dollars to the extent
permissible to the Holders of Receipts entitled thereto and may distribute the
balance of the foreign currency received and not so convertible by the
Depositary to, or hold such balance for the account of, the Holders of Receipts
entitled thereto. If in the opinion of the Depositary any distribution other
than cash or Ordinary Shares upon any Deposited Securities cannot be made
proportionately among the Holders of Receipts entitled thereto, or if for any
other reason the Depositary deems such distribution not to be feasible, the
Depositary may adopt such method as it may deem equitable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the securiries or property thus received, or any part thereof, and the net
proceeds of any such sale will be distributed by the Depositary to the Holders
of Receipts entitled thereto as in the case of a distribution received in cash.
If any distribution upon any Deposited Securities consists of a dividend in, or
free distribution of, Ordinary Shares, the Depositary may with the Company's
approval, and shall if the Company shall so request, distribute to the Holders
of outstanding Receipts entitled thereto, in proportion to the number of
American Shares representing such Deposited Securities held by them
respectively, additional Receipts for an aggregate number of American Shares
representing the number of Ordinary Shares received as such dividend or free
distribution. In lieu of delivering Receipts for fractional American Shares in
any such case, the Depositary may sell the number of Ordinary Shares represented
by the aggregate of such fractions and distribute the net proceeds, converted
into United States dollars if not in such dollars (if such conversion may in the
judgment of the Depositary be achieved on a reasonable basis) to the Holders of
Receipts entitled thereto. If additional Receipts are not so distributed (except
as pursuant to the preceding sentence), each American Share shall thenceforth
also represent the additional Ordirnary Shares distributed upon the Deposited
Securities represented thereby. In the event that the Company shall offer or
cause to be offered to the holders of any Deposited Securities any rights to
subscribe for additional Ordinary Shares or any rights of any nature, the
Depositary shall have discretion as to whether such rights are to be made
available to the Holders of Receipts; provided, however, that the Depositary
will, if requested by the Company, either (a) make such rights available to
Holders of Receipts by means of warrants or otherwise, if lawful and feasible,
or (b) if making such rights available is not lawful or not feasible, or if the
rights represented by such warrants or other instruments are not exercised and
appear to be about to lapse, sell such rights or warrants or other instruments
at public or private sale, at such place or places and upon such terms as the
Depositary may deem proper, and allocate the proceeds of such sales for account
of the Holders of Receipts otherwise entitled thereto upon an averaged or other
practicable basis without regard to any distinctions among such Holders because
of exchange restrictions, or the date of delivery of any Receipt or Receipts, or
otherwise.
In the event that the Depositary determines that any distribution in
property (including shares or rights to subscribe therefor) is subject to any
tax which the Depositary is obligated to withhold, the Depositary may dispose of
a porton of such property (including shares and rights to subscribe therefor) by
pub1ic or private sale, and shall distribute the net proceeds of any such sale
after deduction of such taxes to the Holders of Receipts entitled thereto.
(11) Record Dates. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or whenever rights shall be issued with respect to the Deposited
Securities, or whenever the Depositary shall receive notice of any meeting of
holders of Ordinary Shares or other Deposited Securities, the Depositary will
fix a record date for the determination of the Holders of Receipts who shall be
entitled to receive such dividend, distribution or rights. or the net proceeds
of the sale thereof, or to give instructions for the exercise of voting rights
at any such meeting, subject to the provisions of the Deposit Agreement.
(12) Votinq of Deposited Securities. Upon receipt of notice of any
meeting of holders of Deposited Securities, the Depositary will mail to the
Holders of Receipts a notice which will contain (a) such information as is
contained in such notice of meeting and (b) a statement that the Holders of
Receipts at the close of business on a specified record date will be entitled to
instruct the Depositary as to the exercise of voting rights, if any, partaining
to the amount of Deposited Securities represented by their respective American
Shares, and a brief statement as to the manner in which such instructions may be
given. The Depositary will endeavor insofar as practicable to vote or cause to
be voted the amount of Deposited Securities represented by such Receipts in
accordance with such instructions. The Depositary agrees not to vote the
Ordinary Shares or other Deposited Securities represented by a Receipt unless it
receives instructions from the Holder of such Receipts.
(13) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, consolidation or any other reclassification of Deposited
Securities, or upon any recapitalization, reorganization, merger or
consolidation or sale of assets affecting the Company or to which it is a party,
any securities which shall be received by the Depositary in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Shares shall
thenceforth represent the new Deposited Securities so received in exchange or
conversion, unless additional Receipts are delivered pursuant to the following
sentence. In any such case the Depositary may with the Company's approval, and
shall if the Company shall so request, execute and deliver additional Receipts
as in the case of a stock dividend, or call for the surrender of outstandiing
Receipts to be exchanged for new Receipts.
(14) Reports; Inspection of Transfer Books. The Depositary will make
available for inspection by Holders of Receipts at its Corporate Trust Office
and will furnish to the appropriate securities commissions and stock exchanges
any reports and communications received from the Company which are both (a)
received by the Depositary as the holder of the Deposited Securities, and (b)
made generally available to the holders of such Deposited Securities by the
Company.
The Oepositary will also send to Holders of Receipts copies of such reports when
furnished by the Company as provided in the Deposit Agreement. Upon the issuance
of the Receipts registered hereunder, the Company will be subject to the
periodic reporting requirements of the Securities Exchange Act of 1934 and,
accordingly, will file certain reports with the Securities and Exchange
Commission (the "Commission"). These reports can be inspected by Holders of
Receipts and copied at public reference facilities maintained by the Commission
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Depositary will keep books for the registration and transfer of Receipts which
at all reasonable times will be open for inspection by the Holders of Receipts,
provided that such inspection shall not be for the purpose of communicating with
Holders of Receipts in the interest of a business or object other than the
busjness of the Company or a matter related to the Deposit Agreement or the
Receipts.
(15) Liability of the Company and Depositary. Neither the Depositary
nor the Company shall incur any liability to any Holder of this Receipt, if by
reason of any provision of any present or future law of any country, or of any
governmental authority, or by reason of any provision, present or future, of the
Memorandum and Articles of Association of the Company, or by reason of any act
of God or war or other circumstance beyond its control, the Depositary or the
Company shall be prevented or forbidden from doing or performing any act or
thing which by the terms of the Deposit Agreement it is provided shall be done
or performed. Neither the Company nor the Depositary assumes any obligation or
shall be subject to any liabiliy under the Deposit Agreement to Holders of
Receipts, except that they agree to use their best judgment and good faith in
the performance of such duties as are specifically set forth in the Deposit
Agreement. Neither the Depositary nor the Company shall be under any obligation
to appear in, prosecute or defend any action, suit or other proceeding in
respect of any Deposited Securities or in respect of the Receipts, which in its
opinion may involve it in expense and liability, unless idemnity satisfactory to
it against all expense and liability be furnished as often as may be required,
and the Custodian shall not be under any obligation whatsoever with respect to
such proceedings, the responsibility of the Custodian being solely to the
Depositary. Neither the Depositary nor the Company shall be liable for any
action or non-action by it in reliance upon the advice of or information from
legal counsel, accountants, any person presenting Ordinary Shares for deposit,
any Holder of a Receipt, or any other person believed by it in good faith to be
competent to give such advice or information. The Depositary will not be
responsible for any failure to carry out any instructions to vote any of the
Deposited Securities, or for the manner in which any such vote is cast or the
effect of any such vote, provided that any such action or non-action is in good
faith. The Depositary may own and deal in any class of Securities of the Company
and its affiliates and in Receipts. The Company agrees to indemnify the
Depositary, its directors, employees, agents and affiliates and any Custodian
against, and hold each of them harmless from, any liability or expense
(including, but not limited to, the fees and expenses of counsel) which may
arise out of acts perfortned or omitted, in accordance with the provisions of
the Deposit Agreement and of the Receipts, as the same may be amended, modified,
or supplemented from time to time, (i) by either the Depositary or a Custodian
or their respective directors, employees, agents and affiliates, except for any
liability or expense arising out of the negligence or bad faith of either of
them, or (ii) by the Company or any of its directors, employees, agents and
affiliates. The indemnities contained in the preceding paragraph shall not
extend to any liability or expense which arises solely and exclusively out of a
Pre-Release (as defined in Section 2.10 of the Deposit Agreement) of a Receipt
or Receipts in accordance with Section 2.10 of the Deposit Agreement and which
would not otherwise have arisen had such Receipt or Receipts not been the
subject of a Pre-Release pursuant to Section 2.10 of the Deposit Agreement;
provided, however, that the indemnities provided in the preceding paragraph
shall apply to any such liability or expense (i) to the extent that such
liability or expense would have arisen had a Receipt or Receipts not be the
subject of a Pre-Release, or (ii) which may arise out of any misstatement or
alleged misstatement or omission or alleged omission in any registration
statement, proxy statement, prospectus (or placement memorandum), or preliminary
prospectus (or preliminary placement memorandum) relating to the offer or sale
of American Depositary Shares, except to the extent any such liability or
expense arises out of (i) information relating to the Depositary or any
Custodian (other than the Company), as applicable, furnished in writing and not
materially changed or altered by the Company expressly for use in any of the
foregoing documents, or, (ii) if such information is provided. the failure to
state a material fact necessary to make the information provided not misleading.
No disclaimer of liability under the Securities Act of 1933 is intended by any
provision of the Deposit Agreement.
(16) Resignation and Removal of Depositary; Substitution of Custodian.
The Depositary may at any time resign as depositary under the Deposit Agreement
by written notice of its election so to do delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as provided in the Deposit Agreement. The
Depositary may at any time be removed by the Company, by written notice of such
removal, effective upon the appointment of a successor depositary and its
acceptance of such appointment as provided in the Deposit Agreement. The
Depositary may at any time appoint a substitute custodian and the term
"Custodian" shall refer to such substitute.
(17) Amendment of Deposit Agreement and Receipts. The Receipts and the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary. Any amendment which shall impose or
increase any fees or charges (other than taxes and other governmental charges,
registration fees, cable, telex or facsimile transmission costs, delivery costs
or other such expenses), or which shall otherwise prejudice any substantial
existing right of Holders of Receipts, shall, however, not become effective as
to outstanding Receipts until the expiration of three months after notice of
such amendment shall have been given to the Holders of outstanding Receipts.
Every Holder of a Receipt at the time any such amendment so becomes effective
shall be deemed, by continuing to hold such Receipt, to consent and agree to
such amendment and to be bound by the Deposit Agreement as amended thereby. In
no event shall any amendment impair the right of the Holder hereof to surrender
this Receipt and receive therefor the Deposited Securities represented hereby.
(l8) Termination of Deposit Agreement. The Depositary will at any time
at the direction of the Company terminate the Deposit Agreement by mailing
notice of such termination to the Holders of all Receipts then outstanding at
least 30 days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate the Deposit Agreement at any time 60 days
after the Depositary shall have resigned, if a successor depositary shall not
have been appointed and accepted its appointment. If any Receipts shall remain
outstanding after the date of termination, the Depositary thereafter will
discontinue the registration of transfers of Receipts, will suspend the
distribution of dividends to the holders thereof, and will not give any further
notices or perform any further acts under the Deposit Agreement, except the
collection of dividends and other distributions pertaining to Deposited
Securities, the sale of rights and the delivery of Deposited Securities,
together with any dividends or other distributions received with respect thereto
and the net proceeds of the sale of any rights or other property, in exchange
for Receipts surrendered to the Depositary. At any time after the expiration of
six months from the date of termination, the Depositary may sell the Deposited
Securities then held under the Deposit Agreement and may thereafter hold the net
proceeds of any such sale, together with any other cash then held by it under
the Deposit Agreement, without liability for interest, for the pro rata benefit
of the Holders of Receipts not theretofore surrendered. Thereafter the
Depositary shall be discharged from all obligations under the Deposit Agreement,
except to account for such net Proceeds and other cash.
(19) Compliance With U.S. Securities Laws. Notwithstanding anything in
the Deposit Agreement or this Receipt to the contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under the
Deposit Agreement to prevent the withdrawal or delivery of Deposited Securities
in a manner which would violate the U.S. securities laws, including, but not
limited to, Section I.A. (1) of the General Instructions to the Form F-6
Registration Statement, as amended from time to time, under the Securities Act
of 1933.
<PAGE>
EXHIBIT B
CHARGES OF THE DEPOSITARY
Service Rate By Whom Paid
(1)Receipt of deposits $5 per 100 American Shares or Party to whom Receipts
issuance of Receipts fraction thereof are issued
(2)Delivery of deposits $5 per 100 American Shares or Party surrendering
and surrender of fraction thereof Receipts
Receipts
The Company will pay all charges of the Depositary in connection with the
initial issuance of Receipts. Other charges of the Depositary plus out-of-pocket
expenses such as printing, translation, stationery, postage, insurance, cables,
etc., are to be paid by the Company in accordance with agreements in writing
entered into between the Depositary and the Company from time to time.
Subsidiary Companies of Huntingdon Life Sciences Group plc
Name Jurisdiction
Huntingdon Life Sciences Ltd England & Wales
Huntingdon Life Sciences Inc Delaware, USA
HIH Capital Ltd Jersey
HIH Ltd England & Wales
HRC Ltd England & Wales
Huntingdon Research Centre Ltd England & Wales
Huntingdon Consulting Engineers Ltd England & Wales
Huntingdon LSR Ltd England & Wales
Paragon Global Services Ltd England & Wales
Pathfinder Protek Ltd England & Wales
Life Science Research Ltd England & Wales
Aquatox Ltd England & Wales
Huntingdon Life Sciences Co., Ltd Japan
7 September 1999
Mr J L Dowling III
375 Park Avenue, 14th Floor
New York
NY 10152
USA
Dear Joe
Huntingdon Life Sciences Group plc (the "Company")
I am delighted that you have agreed to join the Board of Directors ("Board") as
a Non-Executive Director of the Company and I am now writing to confirm the
arrangements which will exist between you and the Company during the continuance
of your appointment.
(A) Duties
Although they are not specifically mentioned, you will of course be
subject to the normal duties and responsibilities of a Director at law
and will be expected to comply with the principles of good corporate
governance and guidelines issued from time to time by the Institute of
Directors.
You will be required, in your role as Non-Executive Director, to attend
all board meetings of the Company and, where relevant, other companies
within the Huntingdon Group ("Group"). You will also be required to
make yourself available for consultation on the affairs of the Company
and, where relevant, the Group, and to sit on any of the Company's
Remuneration, Audit and/or Nomination Committees if so elected by the
Company's Board.
As an independent Director, we will expect you to bring an objectivity
and independence of view to our discussions and to help the Board to
provide the Company with effective leadership, as well as ensuring the
continuing effectiveness of the management team and high standards of
financial probity.
You will be given reasonable prior notification of the time, date and
venue of all meetings of the Board and Committees to which you are
elected, unless circumstances do not otherwise permit.
You will also be expected to attend the Company's premises when
relevant, but otherwise it is up to you where you carry out your duties
from.
We expect that this appointment will require you to devote a minimum of
the equivalent of one working day each month to the Group's business,
together with any additional time which may be required for Committee
business.
(B) Term
Subject to the provisions for early termination set out below, your
appointment will commence on 7 September 1999 and will continue unless
and until terminated by either you or the Company on not less than 3
months' written notice.
(C) Fee
For your services, the Company will pay you a fee, which will accrue
from day to day, of (pound)20,000 plus VAT (if applicable) per annum,
payable monthly in arrears. This fee will be reviewed annually by the
Remuneration Committee of the Company. Any increase in the fee awarded
as a result of such review will be entirely at the discretion of the
Company and, if awarded, will take effect from the month immediately
following the review date.
In addition to the above fee, you will be reimbursed for all out of
pocket expenses which you may incur in providing services to the
Company and for which appropriate valid receipts are provided, to the
satisfaction of the Company.
For the avoidance of doubt, any fees payable to you will cease to be
payable immediately in the event of your ceasing to be a Non-Executive
Director of the Company, for whatever reason.
(D) Confidentiality
I must ask that, unless previously authorised by the Board, you will
not at any time during this appointment nor at any time after its
termination disclose to any person or persons, or use for your own
purposes or for any purposes other than those of the Company or the
Group, any confidential information acquired by you in the course of
your duties and relating to, the Company or the Group. I must also ask
that you will use your best endeavours to prevent unauthorised
disclosure or publication or use of such confidential information.
Nothing in the above paragraph is intended to prevent the disclosure by
you of any confidential information which has come into the public
domain, otherwise than as a result of your failure to comply with
confidentiality provisions of this agreement.
(E) Conflicts of interest
You must disclose to the Board any conflict of interest arising out of
your appointment.
You will be expected to refrain, except with the prior consent of the
Company, from accepting appointments to the position of director or
consultant of any company or firm employed in the business of providing
pre-clinical, early clinical and/or non-clinical biological safety
evaluation services to the pharmaceutical and biotechnology,
agrochemical and other chemical industries whilst you are a
Non-Executive Director of the Company.
(F) Compliance
You must comply with the model code on directors' dealing's in respect
of listed securities published by the London Stock Exchange Ltd.,
together with any rules and regulations of the London Stock Exchange
Ltd., the New York Stock Exchange and the US Securities Exchange
Commission. You must familiarise yourself with and comply with all
codes of conduct and regulatory rules that apply to the Company and the
Group, for the time being and from time to time.
(G) Termination
Your appointment is always subject to the Articles of Association of
the Company. In addition, the Company will be entitled to terminate
this appointment by summary notice in writing in any circumstances
which the Board reasonably considers justify such termination
including, without limitation, if you:
(i) become incapable, in the reasonable opinion of the Board, of
properly performing your duties, having been given due warning
by the Board and having failed to remedy the situation to the
satisfaction of the Board within a reasonable period from the
date of such warning;
(ii) have a bankruptcy order made against you or enter into a voluntary
arrangement within the meaning of section 253 Insolvency
Act 1986, as amended from time to time;
(iii) become prohibited from being a company director at any time that you
hold office as a Director of any Group Company;
(iv) otherwise than at the request of the Board, or with its express
consent, resign as a Director of the Company;
(v) are guilty of serious misconduct or wilful and persistent neglect of
your obligations under this appointment;
(vi) are convicted of any arrestable criminal offence (other than
an offence under road traffic legislation in the United
Kingdom or elsewhere for which a fine or non-custodial penalty
is imposed) in circumstances which would have a material
adverse effect on the Company, the Group or their respective
reputations;
(vii) in the reasonable opinion of the Board act in such a way as to
seriously jeopardise the business of the Company and/or the
Group; or
(viii) are not re-elected by the Company in general meeting pursuant to the
Company's Articles of Association.
You will not be entitled to any compensation for loss of office.
You will not, at any time after the termination of your appointment, represent
yourself or allow yourself to be held out or presented in anyway as connected
with or interested in the business of any Group Company, unless you remain a
Director of such company.
Nothing in this paragraph (G) will prevent you from resigning as a Director with
immediate effect if you reasonably consider that the Board persists, after you
have clearly expressed your objection in writing, in a course of action which
you consider to be contrary to the Company's interest or likely to expose you to
personal liability. Any resignation in these circumstances will not give rise to
a claim by either party for termination without adequate notice.
Please confirm your agreement to the terms and conditions of this appointment by
signing the enclosed duplicate letter and returning it to me.
Yours sincerely
For and on behalf of
Huntingdon Life Sciences Group plc
A Baker
Executive Chairman
I confirm my acceptance of the terms and conditions of this appointment.
Signed:.................................
Mr J L Dowling III
Date: ..................................
26 January 2000
The Directors of FHP Holdings Ltd
First Floor
Euro Canadian Centre
Marlborough Street
Nassau
Bahamas
Dear Sirs
We refer to the agreement between us dated 7 August 1998 and to our subsequent
discussions concerning fees payable.
We now write to confirm the agreement reached between us concerning fees. Clause
5(1) of the Management Services Agreement dated 7 August 1998 is amended with
effect from 1 October 1998 as follows:-
"The Company shall pay a fee to the consultant which shall be equivalent to the
sum of:
(a) the basic annual salary and any bonus paid to the Managing Director of
Huntingdon Life Sciences Group plc; and
(b) the benefits provided to the Managing Director of Huntingdon Life
Sciences Group plc excluding his disturbance allowed PROVIDED THAT the
amount payable pursuant to this sub-clause (b) shall be no greater than
(pound)100,000 per annum
(plus VAT if appropriate) ("Fee"). The Fee shall be paid to the
Consultant upon production of a valid invoice in accordance with clause
5(2) below".
All other terms of the Management Services Agreement will remain unchanged.
Please confirm your agreement to the above amendment to the Management Services
Agreement by signing and returning to me the attached duplicate of this letter.
Yours faithfully
Brian Cass
Managing Director
I hereby confirm the agreement on behalf of FHP Holdings Ltd to the above change
to the Management Services Agreement dated 7 August 1998.
Signed:..............................................
For and on behalf of FHP Holdings Ltd
Date: ...............................................
March 21, 2000
Mr G Balthazar
Kossuth Lajos Ucta 78
H-8563 Homokbodoge
Hungary
Dear Gabor
Huntingdon Life Sciences Group plc (the "Company")
I am delighted that you have agreed to join the Board of Directors ("Board") as
a Non-Executive Director of the Company and I am now writing to confirm the
arrangements which will exist between you and the Company during the continuance
of your appointment.
(A) Duties
Although they are not specifically mentioned, you will of course be
subject to the normal duties and responsibilities of a Director at law
and will be expected to comply with the principles of good corporate
governance and guidelines issued from time to time by the Institute of
Directors.
You will be required, in your role as Non-Executive Director, to attend
all board meetings of the Company and, where relevant, other companies
within the Huntingdon Group ("Group"). You will also be required to
make yourself available for consultation on the affairs of the Company
and, where relevant, the Group, and to sit on any of the Company's
Remuneration, Audit and/or Nomination Committees if so elected by the
Company's Board.
As an independent Director, we will expect you to bring an objectivity
and independence of view to our discussions and to help the Board to
provide the Company with effective leadership, as well as ensuring the
continuing effectiveness of the management team and high standards of
financial probity.
You will be given reasonable prior notification of the time, date and
venue of all meetings of the Board and Committees to which you are
elected, unless circumstances do not otherwise permit.
You will also be expected to attend the Company's premises when
relevant, but otherwise it is up to you where you carry out your duties
from.
We expect that this appointment will require you to devote a minimum of
the equivalent of one working day each month to the Group's business,
together with any additional time which may be required for Committee
business.
(B) Term
Subject to the provisions for early termination set out below, your
appointment will commence on March 21, 2000 and will continue unless
and until terminated by either you or the Company on not less than 3
months' written notice.
(C) Fee
For your services, the Company will pay you a fee, which will accrue
from day to day, of (pound)18,000 plus VAT (if applicable) per annum,
payable monthly in arrears. This fee will be reviewed annually by the
Remuneration Committee of the Company. Any increase in the fee awarded
as a result of such review will be entirely at the discretion of the
Company and, if awarded, will take effect from the month immediately
following the review date.
In addition to the above fee, you will be reimbursed for all out of
pocket expenses which you may incur in providing services to the
Company and for which appropriate valid receipts are provided, to the
satisfaction of the Company.
For the avoidance of doubt, any fees payable to you will cease to be
payable immediately in the event of your ceasing to be a Non-Executive
Director of the Company, for whatever reason.
(D) Confidentiality
I must ask that, unless previously authorised by the Board, you will
not at any time during this appointment nor at any time after its
termination disclose to any person or persons, or use for your own
purposes or for any purposes other than those of the Company or the
Group, any confidential information acquired by you in the course of
your duties and relating to, the Company or the Group. I must also ask
that you will use your best endeavours to prevent unauthorised
disclosure or publication or use of such confidential information.
Nothing in the above paragraph is intended to prevent the disclosure by
you of any confidential information which has come into the public
domain, otherwise than as a result of your failure to comply with
confidentiality provisions of this agreement.
(E) Conflicts of interest
You must disclose to the Board any conflict of interest arising out of
your appointment.
You will be expected to refrain, except with the prior consent of the
Company, from accepting appointments to the position of director or
consultant of any company or firm employed in the business of providing
pre-clinical, early clinical and/or non-clinical biological safety
evaluation services to the pharmaceutical and biotechnology,
agrochemical and other chemical industries whilst you are a
Non-Executive Director of the Company.
(F) Compliance
You must comply with the model code on directors' dealing's in respect
of listed securities published by the London Stock Exchange Ltd.,
together with any rules and regulations of the London Stock Exchange
Ltd., the New York Stock Exchange and the US Securities Exchange
Commission. You must familiarise yourself with and comply with all
codes of conduct and regulatory rules that apply to the Company and the
Group, for the time being and from time to time.
(G) Termination
Your appointment is always subject to the Articles of Association of
the Company. In addition, the Company will be entitled to terminate
this appointment by summary notice in writing in any circumstances
which the Board reasonably considers justify such termination
including, without limitation, if you:
(i) become incapable, in the reasonable opinion of the Board, of
properly performing your duties, having been given due warning
by the Board and having failed to remedy the situation to the
satisfaction of the Board within a reasonable period from the
date of such warning;
(ii) have a bankruptcy order made against you or enter into a
voluntary arrangement within the meaning of section 253
Insolvency Act 1986, as amended from time to time;
(iii) become prohibited from being a company director at any time
that you hold office as a Director of any Group Company;
(iv) otherwise than at the request of the Board, or with its
express consent, resign as a Director of the Company;
(v) are guilty of serious misconduct or wilful and persistent
neglect of your obligations under this appointment;
(vi) are convicted of any arrestable criminal offence (other than
an offence under road traffic legislation in the United
Kingdom or elsewhere for which a fine or non-custodial penalty
is imposed) in circumstances which would have a material
adverse effect on the Company, the Group or their respective
reputations;
(vii) in the reasonable opinion of the Board act in such a way
as to seriously jeopardise the business of the Company
and/or the Group; or
(viii) are not re-elected by the Company in general meeting
pursuant to the Company's Articles of Association.
You will not be entitled to any compensation for loss of office.
You will not, at any time after the termination of your appointment, represent
yourself or allow yourself to be held out or presented in anyway as connected
with or interested in the business of any Group Company, unless you remain a
Director of such company.
Nothing in this paragraph (G) will prevent you from resigning as a Director with
immediate effect if you reasonably consider that the Board persists, after you
have clearly expressed your objection in writing, in a course of action which
you consider to be contrary to the Company's interest or likely to expose you to
personal liability. Any resignation in these circumstances will not give rise to
a claim by either party for termination without adequate notice.
Please confirm your agreement to the terms and conditions of this appointment by
signing the enclosed duplicate letter and returning it to me.
Yours sincerely
For and on behalf of
Huntingdon Life Sciences Group plc
A Baker
Executive Chairman
I confirm my acceptance of the terms and conditions of this appointment.
Signed: .................................
Mr G Balthazar
Date: ..................................
HUNTINGDON LIFE SCIENCES GROUP PLC
--------------------------------------------------
RULES OF THE
HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME
-------------------------------------------------
Adopted by the Company on 3 June 1999 and amended on 21 July
1999 Approved by the Inland Revenue on 23 July 1999 under ref
SRS2378/ELW
Arthur Andersen
Betjeman House
104 Hills Road
Cambridge
CB2 1LH
Tel: 01223 353906
Ref: PHM/smw
<PAGE>
CONTENTS
Page
1. Definitions and Interpretation 1
1.1 Definitions
1.2 Interpretation
2. Application for Options 1
3. Scaling down 4
4. Grant of Options 5
5. Option Price 6
6. Number of Shares in respect of which Options may be granted 6
7. Rights of Exercise and Lapse of Options 8
8. Exchange of Options 12
9. Exercise of Options 13
10. Adjustment of Options 15
11. Administration 16
12. Amending the Scheme 17
13. General 19
Appendix of definitions 22
<PAGE>
RULES OF THE HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: The words and expressions in this Scheme which have
capital letters have the meanings set out in Rule 8 and the Appendix
and words and expressions not otherwise defined have the same meaning
they have in the Taxes Act.
1.2 Interpretation: In the Rules:
---------------- -
1.2.1 the headings are for the sake of convenience only and should
be ignored when construing the Rules;
1.2.2 references to any statutory provisions are to those provisions
as amended, extended or re-enacted from time to time and shall
include any regulations made under them; and
1.2.3 the Interpretation Act 1978 shall apply to these Rules with
the necessary changes as if they were an Act of Parliament.
2. APPLICATION FOR OPTIONS
2.1 Applications: The Grantor may invite applications for Options at the
Option Price from all Eligible Employees. Where the Grantor is not the
Company, the Grantor may only invite applications with the prior
written consent of the Board and subject to any conditions specified in
that consent.
2.2 Time when invitations may be made: Invitations shall only be made
within 42 days starting on:
2.2.1 the day on which the Scheme is approved by the Inland Revenue;
2.2.2 the day immediately following the day on which the Company
makes an announcement of its results for the last preceding
financial year, half-year or other period;
2.2.3 any day on which the Board resolves that exceptional
circumstances exist which justify the grant of Options;
2.2.4 any day on which changes to the legislation affecting
savings-related share option schemes approved by the Inland
Revenue under the Taxes Act is proposed or made;
2.2.5 any day on which a new Savings Contract prospectus is
announced or takes effect;
2.2.6 the day following the lifting of any restriction on the grant
of any Option imposed by statute, order,regulation or directive
or by any code adopted by the Company based on the London
Stock Exchange's model code on directors' dealings in
securities; and/or
2.2.7 the day immediately following any general meeting of the
Company
and shall not be granted after the Scheme Period.
2.3 Form of invitation: Any invitation made under Rule 2 shall be in
writing and shall include details of:
2.3.1 eligibility;
2.3.2 the Option Price;
2.3.3 the date by which applications made under Rule 2.5 must be
received, (being neither earlier than 14 days nor later than
25 days after the Date of Invitation);
2.3.4 whether Eligible Employees may take out a 3, 5 or 7 year
Savings Contract;
2.3.5 whether, for the purposes of determining the number of Shares
over which an Option is to be granted, Eligible Employees may
elect for the repayment under the Savings Contract to be
taken:
(i) as including the maximum bonus payable in respect
of the Savings Contract;
(ii) as including only the standard bonus payable in
respect of the Savings Contract;
(iii) as not including a bonus; and
2.3.6 the maximum permitted Monthly Contribution,
and the Grantor may determine and include in the invitation details of
the maximum number of Shares over which Options are to be granted.
2.4 Proposal for a Savings Contract: Each application for an Option must
incorporate or be accompanied by a proposal for a Savings Contract.
Proposals for a Savings Contract shall be limited to such bank or
building society as the Board may designate.
2.5 Form of application: An application for an Option shall:
--------------------
2.5.1 be in writing in such form as the Board may prescribe but
shall provide for the Eligible Employee to state:-
(i) the Monthly Contribution (being a multiple
of(pound)1 and not less than the Minimum
Contribution) which he wishes to make under the
related Savings Contract;
(ii) that his proposed Monthly Contributions (when taken
together with any Monthly Contribution he makes under
any other Savings Contract) will not exceed the
Maximum Contribution; and
(iii) if he may elect for the repayment under the Savings
Contract as contemplated under Rule 2.3.5, his
election in that respect.
2.5.2 provide that, in the event of excess applications, each
application shall be deemed to have been modified or withdrawn
in accordance with the steps taken by the Grantor to scale
down applications under Rule 3.
2.5.3 be deemed to be for an Option over the largest whole number of
Shares which can be acquired at the Option Price with the
expected repayment (including any relevant bonus) under the
related Savings Contract at the appropriate Bonus Date.
2.6 Modification of application and proposal: If there are excess
applications, each application for an Option and proposal for a Savings
Contract shall be deemed to have been altered or withdrawn in
accordance with Rule 3.
3. SCALING DOWN
3.1 When and how scaling down operates: If valid applications are
received for a total number of Shares in excess of any maximum
number of Shares determined by the Board under Rule 2.3 or any
limitation under Rule 6, the Grantor shall scale down
applications by taking, at its absolute discretion, one of the
following steps until the number of Shares available equals or
exceeds the number of Shares applied for (provided always that
in reducing the number of Shares applied for, any adjustments
shall ensure that an Eligible Employee's Monthly Contribution
remains a multiple of (pound)1):
3.1.1 by treating any elections for the maximum bonus as elections
for the standard bonus payable in respect of a Savings
Contract and then, so far as necessary, by reducing the
proposed Monthly Contributions pro rata to the excess over the
Minimum Contribution and then, so far as necessary, selecting
by lot; or
3.1.2 by treating each election for a bonus as an election for no
bonus and then, so far as necessary, by reducing the proposed
Monthly Contributions pro rata to the excess over the Minimum
Contribution and then, so far as necessary, selecting by lot;
or
3.1.3 by reducing the proposed Monthly Contributions pro rata to the
excess over the Minimum Contribution and then, so far as
necessary selecting by lot.
3.2 Insufficient Shares: If the number of Shares available is insufficient
to enable an Option based on Monthly Contributions equal to the Minimum
Contribution to be granted to each Eligible Employee making a valid
application, the Board may, as an alternative to selecting by lot,
determine in its absolute discretion that no Options shall be granted.
3.3 Modification of scaling down method: If the Board so decides, the
provisions in Rule 3.1.1, 3.1.2 and 3.1.3 may be modified or applied in
any manner as may be agreed in advance with the Inland Revenue.
3.4 Extending period for granting Options: If in applying the scaling down
provisions contained in this Rule 3, Options cannot be granted within
the 30 day period referred to in Rule 4.2 below, the Grantor may extend
that period by 12 days.
4. GRANT OF OPTIONS
4.1 No Option grant: No Option shall be granted to any person if:
4.1.1 at the Date of Grant that person shall have ceased
to be an Eligible Employee; or
4.1.2 that person has or has had any time within the 12 month period
preceding the Date of Grant a Material Interest in the issued
ordinary share capital of a Close Company which is:
(i) the Company; or
(ii) a company which has Control of the Company or
is a Member of a Consortium which owns the Company.
4.2 Option grant: Within 30 days of the first Dealing Day by reference to
which the Option Price was fixed (which date shall, subject to Rule
3.4, be within the relevant period in Rule 2.2) the Grantor may,
subject to Rule 3 above, grant to each Eligible Employee who has
submitted a valid application an Option in respect of the number of
Shares for which he has applied.
4.3 Option certificates and payment for Options: There shall be no payment
for the grant of an Option. The Grantor shall procure the issue to each
Participant of an option certificate in such form (not inconsistent
with the provisions of the Scheme) as the Board may from time to time
prescribe, specifying:
4.3.1 the Date of Grant of the Option;
4.3.2 the number of Shares over which the Option is granted;
4.3.3 the Bonus Date; and
4.3.4 the Option Price.
4.4 Options personal to Participants: An Option is personal to the
Participant to whom it is granted and may not, nor any rights in
respect of it, be transferred or otherwise disposed of to any other
person except that, on the death of a Participant, an Option may be
transmitted to his personal representatives.
4.5 Individual limit: No Eligible Employee shall be granted an Option to
the extent that it would at the proposed Date of Grant result in the
total amount of his contributions under all Savings Contracts exceeding
the Maximum Contribution.
4.6 Approvals and consents: The grant of an Option shall, following the
admission of the Shares to the Daily Official List of the London Stock
Exchange, be subject to obtaining any approval or consent required
under the provisions of the Listing Rules of the London Stock Exchange
or of the City code on Take-Overs and Mergers or of any applicable
regulations on enactments.
5. OPTION PRICE
5.1 The Board's decision: The Board shall decide the Option Price which
shall be stated at the Date of Grant.
5.2 Calculating the Option Price: The Option Price shall not be less than:
5.2.1 80 per cent. of the Market Value of a Share on the Dealing
Day immediately preceding the Date of Invitation (or,
if the Board so determines, 80 per cent. of the average
of the Market Values on the three Dealing Days immediately
preceding the Date of Invitation or 80 percent of the Market
Value at such other time or times as may be previously agreed
in writing with the Inland Revenue); and
5.2.2 if the Shares are to be subscribed, their nominal value;
but subject to any adjustment pursuant to Rule 10.
6. NUMBER OF SHARES IN RESPECT OF WHICH OPTIONS MAY BE GRANTED
6.1 The 10 per cent. limit over 10 years: The number of Shares which may be
allocated under the Scheme on any day shall not, when added to the
aggregate of the number of Shares which have been allocated in the
previous 10 years under the Scheme and any other Employees' Share
Scheme adopted by the Company, exceed such number as represents 10 per
cent. of the ordinary share capital of the Company in issue immediately
prior to that day plus 1,550,000 Shares.
6.2 Adjustments to these limits: In calculating the above limits in Rule 6;
6.2.1 any Shares allocated under option(s) granted by the Company
to the trustees of any Employee Benefit Trust shall be
included;
6.2.2 no account shall be taken of any Shares where the right to
acquire such Shares was released or lapsed without being
exercised;
6.2.3 no account shall be taken of any rights granted under the
Option Agreement and any Founder Options;
6.2.4 no account shall be taken of any Shares that have been issued
before the date on which the Scheme is adopted by the Company
upon the exercise of rights granted under any other Employees'
Share Scheme.
6.3 Meaning of allocation: References in this Rule to the "allocation" of
Shares shall mean, in the case of any share option scheme, the placing
of unissued shares under option and, in relation to other types of
Employees' Share Scheme, shall mean the issue and allotment of shares.
7. RIGHTS OF EXERCISE AND LAPSE OF OPTIONS
7.1 General rules for exercise: An Option:
7.1.1 may not be exercised earlier than the Bonus Date under the
relevant Savings Contract EXCEPT as provided in Rules 7.2 and
7.4.
7.1.2 shall not be exercisable later than 6 months after the Bonus
Date under the relevant Savings Contract EXCEPT as provided in
Rule 7.2.
7.1.3 may only be exercised by a Participant while he is a director
or employee of a Participating Company or an Associated
Company EXCEPT as provided in Rules 7.2.
7.1.4 may not be exercised by a Participant if he has or has had at
any time within the 12 month period preceding the date of
exercise a Material Interest in a Close Company which is:
(i) the Company; or
(ii) a company which has Control of the Company or
is a Member of a Consortium which owns the Company,
nor may an Option be exercised by the personal representatives
of the Participant if the Participant had such a Material
Interest at the date of his death.
7.2 Exercise in particular cases: An Option may be exercised:
7.2.1 by the personal representatives of a deceased Participant:-
(i) within 12 months following the date of his death
if such death occurs before the Bonus Date; or
(ii) within 12 months following the Bonus Date in the
event of his death within 6 months after the Bonus
Date.
7.2.2 subject to Rule 7.1.2 by a Participant within 6 months
following his ceasing to hold the office or employment by
virtue of which he is eligible to participate in the Scheme by
reason of:-
(i) injury, disability, redundancy within the meaning of
the Employment Protection (Consolidation) Act 1978 or
retirement on reaching Pensionable Age or at any
other age at which he is bound to retire in
accordance with the terms of his contract of
employment; or
(ii) his office or employment being in a company of
which the Company ceases to have Control; or
(iii) the transfer or sale of the undertaking or
part-undertaking in which he is employed to a person
who is neither an Associated Company nor a company
under the Control of the Company; or
(iv) cessation of employment in any circumstances other
than those mentioned in (i) to (iv) above but only if
such cessation of office or employment is more than 3
years after the Date of Grant of the Option;
7.2.3 within the period of 6 months following the date on which a
person who made an offer to acquire shares (which was
either unconditional or was made on a condition such that
if it were satisfied the person making the offer would have
Control of the Company) has obtained Control of the Company
and any condition subject to which the offer is made has been
satisfied. For the purpose of this Rule 7.2.3 a person shall
be deemed to have obtained Control of the Company if
he and others acting in concert (as defined by the City Code
on Takeovers and Mergers) with him have together obtained
Control of it;
7.2.4 at any time during which any person who has become bound or
entitled to acquire Shares under sections 428 to 430F of the
Companies Act 1985 remains so bound or entitled;
7.2.5 within six months from the date on which the Court sanctions under
Section 425 of the Companies Act 1985 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;
7.2.6 if notice is duly given of a resolution for the voluntary
winding-up of the Company, within six months from the resolution
being passed.
7.3 Cessation following pregnancy: For the purposes of the Scheme, a woman
who leaves employment due to pregnancy will be regarded as having left
the employment on the day on which she indicates either that she does
not intend to return to work or that she will not be returning to work.
If she does not give such indication she will be treated as having left
employment:
7.3.1 on the day after the later of:
(i) the day on which maternity pay under the Employment
Protection (Consolidation) Act 1978 ceases to be
payable; and
(ii) the end of the maternity leave she is entitled
to under the Employment Protection (Consolidation)
Act 1978; or
7.3.2 on any other date specified in the terms of her employment.
7.4 Exercise on reaching Pensionable Age: Subject to Rule 7.1.2 an Option
may be exercised by a Participant within 6 months following the date he
reaches Pensionable Age if he continues after that date to hold the
office or employment by virtue of which he is eligible to participate
in the Scheme.
7.5 Ceasing office or employment: No person shall be treated for the
purposes of Rule 7.2.2 as ceasing to hold an office or employment by
virtue of which that person is eligible to participate in the Scheme
until that person ceases to hold any office or employment in the
Company, any Associated Company or any company of which the Company has
Control.
7.6 Lapsing of Options: Options shall lapse on the earliest of the
following events occurring:
7.6.1 subject to 7.6.2 below, 6 months after the Bonus Date;
7.6.2 where the Participant dies before the Bonus Date, 12 months
after the date of death, and where the Participant dies in the
period of 6 months after the Bonus Date, 12 months after the
Bonus Date;
7.6.3 the expiry of any of the 6 month periods specified in Rule
7.2.2.(i) to (iv) except that if at the time any such
applicable periods expire time is running under the 12 month
periods specified in Rule 7.2.1, the Option shall not lapse by
reason of this sub-rule 7.6 until the expiry of the relevant
12 month period in Rule 7.2.1;
7.6.4 the expiry of any of the periods specified in Rules 7.2.3 and
7.2.4 to 7.2.6 except where an Option is released in
consideration of the grant of a New Option over New Shares in
the Acquiring Company pursuant to Rule 8;
7.6.5 the Participant ceasing to hold any office or employment with
the Company or any Associated Company or a company of which
the Company has control in any circumstances other than those
specified in Rules 7.2.1 and 7.2.2 or ceasing to hold such
office or employment for any reason during any of the periods
specified in Rules 7.2.3 to 7.2.6 and Rule 8;
7.6.6 subject to Rule 7.2.6, the passing of an effective
resolution, or the making of an order by the Court, for the
winding-up of the Company;
7.6.7 the Participant being deprived of the legal or beneficial
ownership of the Option by operation of law, or doing anything
or omitting to do anything which causes him to be so deprived
or being declared bankrupt; or
7.6.8 where before an Option has become capable of being exercised,
the Participant:
(i) gives notice that he intends to stop paying Monthly
Contributions;
(ii) is deemed under the terms of the Savings Contract to
have given such notice; or
(iii) makes an application for repayment of the Monthly
Contributions.
8. EXCHANGE OF OPTIONS
8.1 The Acquiring Company: If any company ("the Acquiring Company"):
----------------------
8.1.1 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 Acquiring
Company 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;
in either case ignoring any Shares which are already owned
by it or a member of the same group of companies; or
8.1.2 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
8.1.3 becomes bound or entitled to acquire Shares under sections
428 to 430F of that Act,
any Participant may at any time within the Appropriate Period, by
agreement with the Acquiring Company, release any Option 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 Paragraph 15 of
Schedule 9 to the Taxes Act) 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 to the Taxes Act).
8.2 The New Option: The New Option shall not be regarded for the
purposes of Rule 8.1 as equivalent to the Old Option unless the
conditions set out in Paragraph 15(3) of Schedule 9 to the Taxes
Act are satisfied, but so that the provisions of the Scheme
shall for this purpose be construed as if:-
8.2.1 the New Option were an option granted under the Scheme at
the same time as the Old Option;
8.2.2 except for the purpose of the definition of "Participating
Company" in Rule 1, the reference to Huntingdon Life Sciences
Group plc in the definition of "the Company" in Rule 1 were a
reference to the different company mentioned in Rule 8.1; and
8.2.3 Rule 12.2 were omitted.
9. EXERCISE OF OPTIONS
9.1 General provisions: Except as otherwise provided in the Rules, an
Option may only be exercised:
9.1.1 during the period of 6 months after the Bonus Date of the
relevant Savings Contract
9.1.2 while the Participant is a director or employee of a
Participating Company;
9.1.3 by a Participant provided that he does not have and has not
had within the preceding 12 months a Material Interest in a
Close Company which is:-
(i) the Company; or
(ii) any company which has Control of the Company or
is a Member of a Consortium which owns the Company;
and
9.1.4 with monies not exceeding the amount of repayment (including
any interest and bonus) under the Savings Contact as at the
Option Exercise Date and for this purpose, no account shall be
taken of such part (if any) of the repayment of any Monthly
Contribution, whose due date for payment under the Savings
Contract is after the date of repayment.
9.2 Manner of exercise: To exercise an Option in whole or in part, the
Participant must deliver to the Grantor or its duly appointed agent:
9.2.1. an option certificate covering at least all the Shares over
which the Option is then to be exercised;
9.2.2 the notice of exercise in the prescribed form properly
completed and signed by the Participant (or by his duly
authorised agent); and
9.2.3 remittance for the Exercise Price payable or authority to the
Grantor or its duly appointed agent to withdraw and apply
monies from the Savings Contract to acquire the Shares over
which the Option is to be exercised.
9.3 Option exercise date: The effective date of the exercise of an Option
shall be the date of delivery of the notice of exercise which shall be
deemed to be delivered when it is received by the Grantor or its duly
appointed agent.
9.4 Issue or transfer of Shares: Subject to Rule 9.5:
9.4.1 Shares to be issued pursuant to the exercise of an Option
shall be allotted to the Participant (or his nominee) within
30 days following the Option Exercise Date;
9.4.2 the Grantor shall procure the transfer of any Shares to be
transferred to a Participant (or his nominee) pursuant to the
exercise of an Option within 30 days following the Option
Exercise Date.
9.5 Consents: The allotment or transfer of any Shares under the Scheme
shall be subject to obtaining any such approval or consent as is
mentioned in Rule 4.6.
9.6 Ranking of Shares: Shares:
9.6.1 which are issued under the Scheme shall rank equally in all
respects with the Shares then in issue, except that they shall
not rank for any rights attaching to Shares by reference to a
record date preceding the Option Exercise Date; and
9.6.2 transferred under the Scheme shall not be entitled to any
rights attaching to Shares by reference to a record date
preceding the Option Exercise Date.
9.7 Listing: If and so long as the Shares are listed on the London Stock
Exchange, the Company shall apply for a listing for any Shares issued
under the Scheme as soon as practicable after their allotment.
10. ADJUSTMENT OF OPTIONS
10.1 Variation in equity share capital: If there is a Variation in the
equity share capital of the Company:
10.1.1 the number of Shares over which an Option is granted; and
10.1.2 the Option Price
shall be adjusted in such manner as the Board shall determine, subject
to the prior approval of the Inland Revenue, so that (as nearly as may
be without involving fractions of a Share or an Option Price calculated
to more than two decimal places) the aggregate Exercise Price payable
in respect of an Option shall remain unchanged (and where an 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).
10.2 Nominal value of Shares: Apart from under this Rule 10.2, no adjustment
under Rule 10.1 above may have the effect of reducing the Option Price
to less than the nominal value of a Share. Where an Option subsists
over both issued and unissued Shares any such adjustment may only be
made if the reduction of the Option Price of Options over both issued
and unissued Shares can be made to the same extent. Any adjustment made
to the Option Price of Options over unissued Shares shall only be made
if and to the extent that the Board shall be authorised to:
10.2.1 capitalise from the reserves of the Company a sum equal to the
amount by which the nominal value of the Shares in respect of
which the Option is exercisable exceeds the adjusted Exercise
Price; and
10.2.2 apply such sum in paying up such amount on such Shares 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.
10.3 Notifying Participants of adjustments: The Grantor may take such steps
as it may consider necessary to notify Participants of any adjustment
made under this Rule 10 and to call in, cancel, endorse, issue or
re-issue any certificate as a result of such adjustment.
11. ADMINISTRATION
11.1 Notices: Any notice or other communication in connection with the
Scheme may be given:
11.1 by personal delivery; or
11.2 by sending the same by post, in the case of a company:
(i) to its registered office; and
(ii) in the case of an individual to his last known address,
or, where he is a director or employee of a Participating
Company, either to his last known address or to the
address of the place of business at which he performs
the whole or substantially the whole of the duties
of his office or employment. Where a notice or other
communication is given by first-class post, it shall
be deemed to have been received 48 hours after it was
put into the post properly addressed and stamped.
11.2 Documents sent to shareholders: The Company may distribute to
Participants copies of any notice or document sent by the Company to
the holders of Shares.
11.3 Replacement option certificates: If any option certificate shall be
worn out, defaced or lost, it may be replaced on such evidence being
provided as the Board may require.
11.4 Shares to cover Options: The Company shall at all times keep available
for allotment unissued Shares at least sufficient to satisfy all
Options under which Shares may be subscribed or procure that sufficient
Shares are available for transfer to satisfy all Options under which
Shares may be acquired.
11.5 Administration of the Scheme: The Scheme shall be administered by the
Board. The Board shall have full authority, consistent with the Scheme,
to administer the Scheme, including authority to interpret and construe
any provision of the Scheme and to adopt such regulations for
administering the Scheme and such forms of exercise as it may deem
necessary or appropriate. Decisions of the Board shall be final and
binding on all parties.
11.6 Costs of introducing the Scheme: The costs of introducing and
administering the Scheme shall be borne by the Company.
12. AMENDING THE SCHEME
12.1 The Board's power to amend the Scheme: Subject to the following
provisions of this Rule 12, the Board may at any time alter or add to
all or any of the provisions of the Scheme in any respect.
12.2 Shareholders' approval: No alteration or addition to the advantage of
Participants shall be made under Rule 12.1 without the prior approval
by ordinary resolution of the members of the Company in general meeting
unless the alteration or addition is:
12.2.1 minor and to benefit the administration of the Scheme;
12.2.2 to take account of any changes in legislation; or
12.2.3 to obtain or maintain favourable taxation, exchange control or
regulatory treatment for the Company, or Subsidiary of the
Company or Associated Company or any Participant.
12.3 Participants' approval: No alteration or addition shall be made under
Rule 12.1 which would abrogate or adversely affect the subsisting
rights of a Participant unless it is made:
12.3.1 with the consent in writing of such number of Participants as
hold Options under the Scheme to acquire 75 per cent of the
Shares which would be issued or transferred if all Options
granted and subsisting under the Scheme were exercised; or
12.3.2 by a resolution at a meeting of Participants passed by not
less than 75 per cent of the Participants who attend and vote
either in person or by proxy
and for the purpose of this Rule 12.3 the provisions of the Articles of
Association of the Company relating to shareholder meetings shall apply
with the necessary changes.
12.4 Overseas Eligible Employees: Notwithstanding any other provision of the
Scheme other than Rule 12.1 the Board may, in respect of Options
granted to Eligible Employees who are or who may become subject to
taxation outside the United Kingdom on their remuneration amend or add
to the provisions of the Scheme and the terms of Options as it
considers necessary or desirable to take account of or to mitigate or
to comply with relevant overseas taxation, securities or exchange
control laws provided that the terms of Options granted to such
Eligible Employees are not overall more favourable than the terms of
Options granted to other Eligible Employees.
12.5 Notice of amendments: As soon as reasonably practicable after making
any alteration or addition under Rule 12.1, the Board shall give
written notice of this to any Participant affected by it.
12.6 Prohibited amendment: No alteration shall be made to the Scheme if
as a result of the alteration, the Scheme would cease to be an
Employees' Share Scheme.
12.7 Inland Revenue approval: For as long as the Scheme is to remain
approved by the Inland Revenue, no alteration or addition to the Scheme
after it has been approved by the Inland Revenue shall have effect
unless such alteration or addition has been approved by the Inland
Revenue.
13. GENERAL
13.1 Termination of the Scheme: The Scheme shall terminate following the end
of the Scheme Period or at any earlier time by the passing of a
resolution by the Board. Termination of the Scheme shall not affect the
subsisting rights of Participants.
13.2 The Scheme and funding the purchase of Shares: The Company and any
Subsidiary of the Company 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 those purposes, to the extent permitted by Section 153 of
the Companies Act 1985. In addition, the Company may require any
Subsidiary to enter into such other agreement or agreements as it shall
deem necessary to oblige such Subsidiary to reimburse the Company for
any other amounts paid by the Company in relation to the Scheme,
directly or indirectly in respect of such Subsidiary's employees.
13.3 Rights of Participants and Eligible Employees: Nothing in the Scheme
shall be deemed to give any employee of any Participating Company any
right to participate in the Scheme. The rights and obligations of any
individual under the terms of his office or employment with a
Participating Company shall not be affected by his participation in the
Scheme nor any right which he may have to participate under it. An
individual who participates under the Scheme waives all and any rights
to compensation or damages in consequence of the termination of his
office or employment with a Participating Company for any reason
whatsoever insofar as those rights arise or may arise from his ceasing
to have rights under or to be entitled to exercise any Option under the
Scheme as a result of such termination or from the loss or diminution
in value of such rights or entitlements.
13.4 Articles of Association: Any Shares acquired on the exercise of Options
shall be subject to the Articles of Association of the Company as
amended from time to time.
13.5 Claims for relief under the Taxation of Chargeable Gains Act 1992: In
the event that Shares are transferred to a Participant in pursuance of
any Option granted under the Scheme, the Participant shall, if so
required by the person making the transfer, join that person in making
a claim for relief under Section 165 of the Taxation of Chargeable
Gains Act 1992 in respect of the disposal made by him in affecting such
transfer.
13.6 Governing Law: These Rules shall be governed by and construed in
accordance with the law of England. All Participants, any Grantor, the
Company and any other Participating Company shall submit to the
jurisdiction of the English courts in relation to anything arising
under the Scheme.
<PAGE>
RULES OF THE HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME
APPENDIX
Appendix this appendix which forms part of the Rules;
Appropriate Period the meaning given by Paragraph 15(2) of Schedule 9
to the Taxes Act;
Associated Company in relation to the Company:-
(i) any company which has Control of the
Company;
(ii) any company which is under the Control of
any company referred to in (i) above;
Board the board of directors for the time being of the
Company or a duly authorised committee of it;
Bonus Date in relation to any Savings Contract in respect of
an Option;
(i) where repayments are taken as including the
maximum bonus, the earliest date on which
the maximum bonus is payable; and
(ii) in any other case the earliest date on
which the standard bonus is payable under
the relevant Savings Contract;
Close Company a close company as defined
in section 414(1) of the Taxes Act,
as varied by Paragraph 8 of Schedule
9 to the Taxes Act;
the Company Huntingdon Life Sciences Group plc (registered no.
502370);
Control has the meaning given by section 840 of the Taxes
Act;
Date of Grant the date on which a Grantor grants an Option;
Date of Invitation the date on which a Grantor invites applications
for Options;
Dealing Day any day on which the London Stock Exchange is open
for the transaction of business;
Eligible Employee (1) any individual who at the date of Grant:-
(i) is an employee (which may include
an employee who is a director) of
a Participating Company; and
(ii) is chargeable to tax in respect
of his office or employment under
Case I of Schedule E of the Taxes
Act; and
(iii) has been such an executive
director or employee of a
Participating Company for such
qualifying period (if any) (being
a period starting not earlier
than 5 years prior to the Date of
Grant) as the Board may
determine; or
(2) is an executive director or
employee of a Participating
Company (or is nominated as
a member of a category of
such executive directors
and employees) nominated by
the Board as but in all
cases excluding any person
who is prohibited from
participating by reason of
the provisions of Paragraph
8 of Schedule 9 to the
Taxes Act;
Employees' Share Scheme the meaning given by Section 743 of the Companies
Act 1985;
Employee Benefit Trust any trust which falls within the provisions of
section 86 of the Inheritance Tax Act 1984 and
constitutes an employees' share scheme as defined
in section 743 of the Companies Act 1985, including
but not exclusively any Qualifying Employee Share
Ownership Trust as defined in Schedule 5 of the
Finance Act 1989;
Exercise Price the total amount payable in
relation to the exercise of an
Option, whether in whole or in part,
being an amount equal to the
relevant Option Price multiplied by
the number of Shares in respect of
which the Option is exercised;
Founder Option a Founder Option granted under the Huntingdon Life
Sciences Group Unapproved Share Option Scheme
adopted by the Company on 2 September 1998;
Grantor the Board acting on behalf of the
Company or the trustees of any
Employee Benefit Trust which has
agreed to grant options under the
terms of this Scheme
London Stock Exchange the London Stock Exchange Limited;
Market Value in relation to a Share on any day:-
(i) if and so long as the shares are listed
on the London Stock Exchange its middle market
quotation (as derived from the Daily
Official List of The London Stock
Exchange);
(ii) subject to (i) above, its
market value determined in
accordance with Part VIII
of the Taxation of
Chargeable Gains Act 1992
and agreed in advance with
the Shares Valuation
Division of the Inland
Revenue;
Material Interest the meaning given by Section 187(3) of the Taxes
Act;
Maximum Contribution the lesser of:
(i) such maximum monthly contribution as may
be permitted under Paragraph 24 of
Schedule 9 to the Taxes Act or, if less,
(pound)250 per month; or
(ii) such maximum monthly contribution as may
be determined from time to time by the
Board;
Member of a Consortium the meaning given by Section 187(7) of the Taxes
Act;
Minimum Contribution such minimum monthly
contribution permitted under
Paragraph 24 of Schedule 9 to the
Taxes Act from time to time;
Monthly Contributions monthly contributions agreed to be paid by a
Participant under his Savings Contract;
Option a right to acquire Shares under the Scheme which is
either subsisting or is proposed to be granted;
Option Agreement the agreement dated [ ] 1998 and made
between the Company (1) and Andrew H. Baker (2);
Option Price the price per Share at which
an Eligible Employee may acquire
Shares on the exercise of an Option
and calculated in accordance with
Rule 5:
Option Exercise Date the date when the exercise of an Option is
effective because it complies with Rules 9.2 and
9.3;
Participant any Eligible Employee to whom an Option has been
granted, or (where the context so admits) the
personal representative(s) of any such person;
Participating Company (i) the Company; and
(ii) any other company which is
under the Control of the
Company, is a Subsidiary of
the Company and which has
been expressly designated by
the Board as being a
Participating Company;
Pensionable Age age (65) sixty five;
Savings Contract a contract under a
certified contractual savings scheme
(within the meaning of Section 326
of the Taxes Act) approved by the
Inland Revenue for the purpose of
Schedule 9 to that Act;
Scheme the Huntingdon Life Sciences
Sharesave Scheme in its present form
or as from time to time amended in
accordance with the provisions
hereof;
Scheme Period the period starting on the date the Scheme is
approved by the Inland Revenue and ending on the
10th anniversary of that date;
Share a fully paid ordinary share in the
capital of the Company which
satisfies paragraphs 10 to 14 of
Schedule 9 to the Taxes Act;
Subsidiary a company as defined by Section 736 of the
Companies Act 1985;
Taxes Act the Income and Corporation Taxes Act 1988; and
Variation in relation to the equity share capital of the
Company:
(i) a capitalisation issue, an offer or
invitation made by way of rights, a
subdivision, a consolidation or reduction;
or
(ii) any other variation in
respect of which the Inland
Revenue may from time to
time allow an adjustment of
Options in accordance with
Rule 10.
DATED 3rd JUNE 1999
----------------------------------------------------------------
THE HUNTINGDON LIFE SCIENCES GROUP
UNAPPROVED SHARE OPTION SCHEME
----------------------------------------------------------------
Charles Russell
8-10 New Fetter Lane
London EC4A 1RS
<PAGE>
INDEX
(for reference purposes only)
Rule Heading Page Number
1. DEFINITIONS AND INTERPRETATION 1
------------------------------
2. GRANT OF OPTIONS 7
----------------
3. SCHEME LIMITS 11
-------------
4. PERSONAL LIMITS 12
---------------
5. EXERCISE AND LAPSE OF OPTIONS 13
-----------------------------
6. TAKEOVERS AND LIQUIDATIONS 15
--------------------------
7. VARIATION OF SHARE CAPITAL 17
--------------------------
8. MANNER OF EXERCISE OF OPTIONS 17
-----------------------------
9. TAXATION 18
--------
10. ADMINISTRATION AMENDMENT AND TERMINATION 19
----------------------------------------
SCHEDULE 1 21
- ----------
SCHEDULE 2 23
- ----------
SCHEDULE 3 24
- ----------
<PAGE>
RULES OF THE HUNTINGDON LIFE SCIENCES GROUP
UNAPPROVED SHARE OPTION SCHEME
Adopted on 2 September 1998
and amended on 3 June 1999
1. DEFINITIONS AND INTERPRETATION
1.1 In these Rules the following words and expressions shall (except where
the context otherwise requires) have the following meanings:
"Act" the Companies Act 1985;
"Accounting Period" an accounting reference period of the
Company;
"Announcement Date" the date on which the annual or half-
yearly results of the Company are announced;
"Appropriate Period" (i) if the circumstances in Rule 6.1
apply the period of six months
beginning with the date on
which the person making the offer
has obtained Control of the Company
and any condition subject to which
the offer is made has been
satisfied;
(ii) if the circumstances in Rule 6.2
apply the period of six months
beginning with the date on
which the Reconstruction Scheme is
sanctioned by the Court;
(iii) if the circumstances in Rule 6.3
apply the period during which the
person remains bound or entitled
to acquire any shares in the Company;
"Associated Company" the same meaning as in Section 416 of
the Taxes Act;
"Auditors" the auditors for the time being of
the Company appointed pursuant to
section 384 of the Act and acting as
experts and not as arbitrators;
"Board" the Board of directors for the time
being of the Company or a duly
appointed committee thereof at
which a quorum is present;
"Company" Huntingdon Life Sciences Group
plc (registered in
England and Wales number 502370);
"Company Share Schemes" the Scheme
and any other share option
or profit sharing share
scheme of the Company or of
any Associated Company
whether or not approved by
the Inland Revenue;
"Control" the same meaning as in Section 840
of the Taxes Act and the expression
"controlled" shall be construed
accordingly;
"Date of Adoption" 2 September 1998 being the date
of adoption of this
Scheme by the Company;
"Date of Grant" in relation to any Option means
the date on which the Option is
granted or was or is to be granted
under the Scheme;
"Dealing Day" a day on which the London Stock
Exchange is open for business;
"Earnings per share" earnings per share normalised after
disregarding any exceptional or
extraordinary items as shown in the
Company's audited accounts for an
Accounting Period ("normalised
earnings per share") provided that
if in relation to any Accounting
Period the Company's audited
accounts do not contain an earnings
per share figure or if the accounting
reference date of the Company is
changed the normalised earnings
per share for an Accounting Period
determined by the Remuneration
Committee in consultation with the
Auditors or such other advisers
as the Remuneration Committee may in
its absolute discretion select;
"Eligible Participant" (a) an employee who is a director of a
Participating Company who is required
by his contract of employment to
devote
substantially the whole of his
working time to the business of the
Group; or
(b) any other employee of a
Participating Company who is
required by his contract of
employment to devote
substantially the whole of his
working time to the
business of the Group;
"Exceptional Performance an Option designated as such under
Option" Rule 2.3.4;
"Expected Retirement Date" the date
on which an Eligible
Participant is expected to
retire in accordance with
the terms of his contract
of employment with a
Participating Company;
"Founder Option" an option granted
under Rule 2.1 as
appropriate an 'A' Option,
a 'B' Option, a 'C' Option
or a 'D' Option;
"Group" the Company and any company under the
Control of the Company
"London Stock Exchange" the London Stock Exchange Limited;
"Market Value" in respect of any Share on any day
means either:
(a) (when on that day
the shares of that
class are listed
on the official
list of the London
Stock Exchange)
the middle market
quotation of such
a Share as derived
from the Daily
Official List of
the London Stock
Exchange for the
Dealing Day
immediately
preceding that
day; or
(b) in all other cases
the market value
of such a Share as
determined in
accordance with
the provisions of
part VIII of the
Taxation of
Chargeable Gains
Act 1992;
"Option" a right to subscribe for Shares
granted (or to be granted) in
accordance with these Rules and
where the context so
requires shall include a Founder
Option, an Exceptional
Performance Option and New
Options granted as
consideration for the release
of Old Options in
accordance with Rule 6;
"Option Agreement" the agreement dated 2 September
1998 and made between
the Company (1) and Andrew H Baker(2);
"Option Holder" any person who has
been granted an Option or
where the context requires
a person becoming entitled
to an Option in consequence
of the death of an Option
Holder;
"Option Period" in respect of any
Option, other than a
Founder Option the period
between the Date of Grant
and the first date on which
the Option becomes
exercisable in accordance
with the Performance
Conditions set by the
Remuneration Committee
pursuant to Rule 2.7, 2.10;
"Participating Company" the Company and
any other company of which
the Company has Control and
which is for the time being
authorised by the
Remuneration Committee to
participate in this Scheme;
"Performance Conditions" the conditions
imposed by the Remuneration
Committee in respect of an
Option, other than a
Founder Option, pursuant to
Rule 2.7, 2.10;
"Remuneration Committee" the committee
consisting wholly or mainly
of non-executive directors
of the Company and chaired
by a non-executive director
and having formal
responsibility for the
operation of the Scheme;
"Rules" the rules of the Scheme as set out
herein and as amended from
time to time;
"Scheme" the employee share option scheme
constituted and governed by
these Rules as from time to time
amended;
"Share" an ordinary share of 5p in the
capital of the Company;
"Subscription Price" the price at which
each Share subject to an
Option may be acquired on
the exercise of that Option
being (subject to Rules 6.4
and 7) in the case of a
Founder Option 12.5 pence
per Share and in every
other case not lower than
the higher of:
(i) the nominal value of a Share;
and
(ii)the Market Value of a Share
on the Date of Grant;
"Subsisting Option" an Option to the extent that it
has not been exercised, lapsed
or cancelled;
"Tax Liability" any liability of
the Company or any company
which Controls or is under
the Control of the Company
to account for any income
tax National Insurance
contributions or other tax
arising in relation to the
grant, exercise or other
dealing with or in relation
to an Option;
"Taxes Act" the Income and Corporation Taxes Act
1988;
"Total Remuneration" in relation to any Eligible
Participant and in any period where
that Eligible Participant is an
employee or officer of a
Participating Company the
remuneration (exclusive of
benefits in kind but for the
avoidance of doubt,
including any cash amount
paid to the Eligible
Participant) paid or payable
to that Eligible
Participant by the Participating
Company and all
Associated Companies of that
Participating Company in
that period; and
"Year of Assessment" a year beginning on any 6 April
and ending on the following 5 April.
1.2 Any reference in these Rules to any provision of any Act of Parliament
or any subordinate legislation made pursuant to any Act of Parliament
shall be deemed to be a reference to such Act of Parliament or
subordinate legislation as amended modified or re-enacted (whether
before or after the date hereof).
1.3 In these Rules words incorporating the masculine gender only include
the feminine and neuter genders and words incorporating the singular
number only include the plural and vice versa.
1.4 Rule headings are for ease of reference only and do not affect the
construction or interpretation of these Rules.
1.5 References to writing shall include typewriting printing lithography
photography and facsimile messages and other modes of reproducing words
in a legible and non-transitory form.
2. GRANT OF OPTIONS
2.1 Subject to the limitations and conditions hereinafter contained, the
Remuneration Committee shall on or as soon as reasonably practicable
after the Date of Adoption grant, without consideration four Options
each at the Subscription Price and over an equal number of Shares as
shall be determined by the Remuneration Committee to such Eligible
Participants selected at its discretion and each such Option shall be
designated as an 'A' Option, a 'B' Option, a 'C' Option and a 'D'
Option respectively provided that no Founder Option shall be granted
after 31 December 1998.
2.2 The exercise of a Founder Option shall be subject to the following
conditions:
2.2.1 the 'A' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 25 pence per Share;
2.2.2 the 'B' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 50 pence per Share;
2.2.3 the 'C' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 75 pence per Share; and
2.2.4 the 'D' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 100 pence per Share
provided that the Market Value of a Share on any Dealing Day before 1st
January 1999 shall be ignored in applying the above conditions and,
subject to Rules 5.4, 5.5, 5.6, a Founder Option shall not be
exercisable before the third anniversary of a Date of Grant. For the
avoidance of doubt a Founder Option shall be exercisable in accordance
with the rules of this Scheme if the condition applicable to that
Founder Option under this Rule 2.2 has been previously satisfied
regardless of the Market Value of a Share on the date on which the
Founder Option is exercised.
2.3 Subject to Rule 2.1 the limitations and conditions hereinafter
contained and unless prohibited by law the Remuneration Committee on
behalf of the Company may, in its absolute discretion, within a period
of 42 days immediately following an Announcement Date or Date of
Adoption grant without consideration Options to any number of Eligible
Participants provided that:
2.3.1 no Eligible Participant shall be entitled as of right to the
grant of an Option;
2.3.2 no Option (other than an Exceptional Performance Option) may
be granted to an Eligible Participant within 2 years preceding
his Expected Retirement Date and no Exceptional Performance
Option may be granted to an Eligible Participant within the 4
years preceding his Expected Retirement Date;
2.3.3 no Option may be granted under this Scheme after the
tenth anniversary of the Date of Adoption; and
2.3.4 an Option may be designated as an Exceptional Performance
Option and for the avoidance of doubt an Eligible Participant
may on the same day be granted two Options one of which is
designated as an Exceptional Performance Option and the other
is not.
2.4 An Option shall be granted by a resolution of the Remuneration
Committee.
2.5 Notwithstanding the provisions of Rule 2.3 the Remuneration Committee
may grant Options outside the 42 day period mentioned therein in
circumstances which the Remuneration Committee in its absolute
discretion deems sufficiently exceptional to justify the grant of
Options at that time.
2.6 An Option Holder may, within a period of twenty one days immediately
following the Date of Grant, renounce by notice in writing to the
Company his Option in respect of all or any part of the Shares subject
of the Option and in which case that Option shall be deemed never to
have been granted to the extent so renounced.
2.7 Each Option, other than a Founder Option, shall be granted so that its
exercise shall be subject to such objective conditions ("Performance
Conditions") (not inconsistent with the provisions of the Scheme ) as
the Remuneration Committee may in its absolute discretion think fit
provided that:
2.7.1 2.7.1.1 such conditions shall be designed to
ensure that the exercise of an Option is made
subject to the attainment of a significant and
sustained improvement in the underlying financial
performance of the Company during the Option
Period;
2.7.1.2 such conditions shall not be inconsistent with the
provisions of the Scheme and may be waived or
amended if an event occurs which causes the
Remuneration Committee to consider that such
Performance Conditions could not fairly or
reasonably be met, provided that any amended
conditions should be neither more difficult nor
easier to satisfy than the original Performance
Conditions were intended to be at the time of
their imposition;
2.7.1.3 such conditions shall extend over a continuous
period of at least three years; and
2.7.2 in the case of an Exceptional Performance Option, such conditions
shall have the additional condition that over five consecutive
Accounting Periods (or such number of consecutive Accounting
Periods that in aggregate consist of a period not less than 60
months if such five consecutive Accounting Periods in aggregate
consist of less than 60 months) commencing with and including the
Accounting Period current at the Date of Grant, the growth in
Earnings per Share is at lease equivalent to the growth in the
normalised earnings per share over such period of the company which
on the last day of such period is ranked at the bottom of the
companies which comprise the top quartile of the FTSE 100 Index
capable of being ranked for growth in the earnings per share over
such period as determined by the Remuneration Committee in
consultation with the Auditors or such other advisers as the
Remuneration Committee may in its absolute discretion select.
2.8 The Remuneration Committee may in its absolute discretion impose
conditions on the grant of an Option, other than a Founder Option,
restricting the number of Shares in respect of which an Option may be
exercised on any one occasion.
2.9 As soon as reasonably practicable after Options have been granted the
Board shall issue an Option certificate substantially in the form set
out in Schedule 2 in respect of each Option which shall specify:
2.9.1 the number of Shares comprised in the Option;
2.9.2 the Date of Grant;
2.9.3 the Subscription Price;
2.9.4 save in the case of a Founder Option, details of the
Performance Conditions; and
2.9.5 in the case of an Exceptional Performance Option that it has
been designated as such;
2.9.6 the last date upon which notice to exercise the Option may be
given, being not later than the day immediately preceding the
tenth anniversary of the Date of Grant.
2.10 Subject to Rules 5.4 and 5.5. each Option shall be granted so that its
exercise shall be subject to the Option Holder continuing to be an
Eligible Participant throughout the period between the Date of Grant
and the date on which the Option is exercised in accordance with the
Rules.
2.11 An Option shall be personal to the Option Holder and may not be
transferred, assigned, charged, pledged or otherwise disposed of or
dealt (other than its exercise in accordance with the Rules) with. Any
purported transfer, assignment, charge, pledge or other disposal or
dealing (other than its exercise in accordance with the Rules) with the
Option shall cause the Option to lapse forthwith and each Option
certificate shall carry a statement to this effect.
3. SCHEME LIMITS
3.1 No Option, other than a Founder Option, shall be granted if immediately
following such grant it would cause the aggregate of the number of
Shares which have been or remain to be issued on the exercise of
Options granted under the Scheme, excluding Founder Options, and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted under any other Company Share Scheme in the
preceding 10 years but excluding any rights granted under the Option
Agreement and any shares that have been issued before the Date of
Adoption upon the exercise of rights granted under any other Company
Share Scheme, to exceed such number of shares as represents the
aggregate of 10 per cent of the issued ordinary share capital of the
Company immediately prior to the Date of Grant plus 1,550,000 Shares.
3.2 No Option, other than a Founder Option, shall be granted if immediately
following such grant it would cause the aggregate of the number of
Shares which have been or remain to be issued on the exercise of
Options granted under the Scheme, excluding Founder Options, and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted in the preceding 10 years under any other
share option scheme (other than a savings related share option scheme)
but excluding any rights granted under the Option Agreement and any
shares that have been issued before the Date of Adoption upon the
exercise of rights granted under any other share option scheme (other
than any savings related share option scheme), to exceed such number of
shares as represents the aggregate of 7.5 per cent of the issued
ordinary share capital of the Company immediately prior to the Date of
Grant plus 1,550,000 Shares.
3.3 The aggregate number of Shares that may be the subject of Founder
Options granted under the Scheme and any rights granted under the
Option Agreement shall not exceed 13,000,000 Shares.
3.4 For the avoidance of doubt, where an Option lapses or has been
renounced in accordance with the Rules, the number of Shares comprised
in that Option immediately before its lapse or renunciation shall be
disregarded for the purposes of this Rule 3.
4. PERSONAL LIMITS
4.1 Save in the case of a Founder Option but subject to Rule 4.2, the
number of Shares in respect of which an Option is granted to an
Eligible Participant shall be limited, and the Option shall take effect
so and to the extent that the aggregate Market Value of the Shares he
may acquire pursuant to the exercise of that Option when added to the
aggregate Market Value of the Shares Comprised in the Subsisting
Options previously granted under the Scheme (which for the purposes of
this Rule 4.1 shall also include cancelled Options) to him and the
aggregate market value of Shares he may acquire pursuant to any other
unexercised rights obtained under any other Company Share Scheme (other
than a savings related share option scheme or a profit sharing scheme)
shall not exceed or further exceed four times the Eligible
Participant's Total Remuneration for the Year of Assessment current at
the Date of Grant or, if the Eligible Participant was not an Eligible
Participant at the beginning of that Year of Assessment, four times the
Eligible Participant's Total Remuneration for the period of twelve
months beginning with the first day during that Year of Assessment on
which he became an Eligible Participant.
4.2 The number of shares in respect of which an Exceptional Performance
Option is granted to an Eligible Participant shall be limited, and the
Exceptional Performance Option shall take effect so and to the extent
that the aggregate Market Value of the Shares he may acquire pursuant
to the exercise of that Exceptional Performance Option when added to
the aggregate Market Value of the Shares Comprised in the Subsisting
Options previously granted under the Scheme (which for the purposes of
this Rule 4.1 shall also include cancelled Options) to him and the
aggregate market value of Shares he may acquire pursuant to any other
unexercised rights obtained under any other Company Share Scheme (other
than a savings related share option scheme or a profit sharing scheme)
shall not exceed or further exceed eight times the Eligible
Participant's Total Remuneration for the Year of Assessment current at
the Date of Grant or, if the Eligible Participant was not an Eligible
Participant at the beginning of that Year of Assessment, eight times
the Eligible Participant's Total Remuneration for the period of twelve
months beginning with the first day during that Year of Assessment on
which he became an Eligible Participant.
4.3 For the purposes of this Rule 4 market value of Shares shall mean in
the case of rights granted under other Company Share Schemes the market
value of the shares subject to such rights at the time of the grant of
the right as calculated in accordance with the rules of the relevant
Company Share Scheme.
4.4 For the avoidance of doubt, where an Option lapses or has been
renounced in accordance with the Rules, the number of Shares comprised
in that Option immediately before its lapse or renunciation shall be
disregarded for the purposes of this Rule 4.
5. EXERCISE AND LAPSE OF OPTIONS
5.1 Subject to this Rule 5 and Rules 6 and 8 an Option (other than an
Exceptional Performance Option) may be exercised at any time on or
after the third anniversary and before the tenth anniversary of its
Date of Grant and an Exceptional Performance Option may be exercised at
any time on or after the fifth anniversary and before the tenth
anniversary of its Date of Grant.
5.2 An Option shall not be exercisable on or after the tenth anniversary of
its Date of Grant under any circumstances whatsoever and every
Subsisting Option shall lapse on the tenth anniversary of its Date of
Grant.
5.3 The right to exercise an Option shall terminate immediately upon the
Option Holder ceasing to be an Eligible Participant except where Rules
5.4 or 5.5 apply .
5.4 Subject to Rule 5.2 where an Option Holder dies his personal
representatives may exercise any unexercised Options held by him within
12 months of the date of death.
5.5 Where an Option Holder ceases to be an Eligible Participant:
5.5.1 by reason of:
5.5.1.1 injury, disability or pregnancy; or
5.5.1.2 redundancy;
5.5.1.3 retirement on or after the Expected Retirement
Date;
5.5.1.4 the company by which the Option Holder is
employed ceasing to be a
Participating Company; or
5.5.1.5 the transfer of the business in which the Option
Holder is employed to a person
other than a Participating Company; or
5.5.2 where the circumstances are not as described in Rules 5.5.1.1
to 5.5.1.5 and the Remuneration Committee in its absolute
discretion decides not later than 30 days after the date on
which the Option Holder ceases to be an Eligible Participant
to allow that Option Holder to exercise any Subsisting Option
then held by him
any Subsisting Option may be exercised no later than 6 months after the
date of such cessation and for the purposes of this Rule 5.5 a female
Option Holder shall not cease to be an Eligible Participant if absent
from work because of pregnancy until and upon such time as she ceases
to be entitled to exercise her right to return to work.
5.6 Save where Rules 5.4, 5.5 or, except in the case of an Exceptional
Performance Option, Rule 6 apply the exercise of any Option shall be
conditional upon the relevant Performance Conditions having been
fulfilled to the satisfaction of the Remuneration Committee or in the
case of a Founder Option, subject to the conditions of Rule 2.2.
5.7 The Company shall notify each Option Holder in writing on each occasion
that the accounts of the Company are distributed to its shareholders as
to whether or not the Performance Conditions have been satisfied in
respect of the then immediately preceding 3, or as appropriate 5 year
period.
5.8 An Option shall lapse upon the earliest occurrence of any of the
following events insofar as it has not been exercised:
5.8.1 the tenth anniversary of the Date of Grant;
5.8.2 the first anniversary of the Option Holder's death;
5.8.3 the expiry of 6 months from the date on which an Option Holder
ceases to be an Eligible Participant where Rule 5.5 applies;
5.8.4 the earliest date upon which the Option is expressed to lapse
under Rule 6;
5.8.5 the date of an event specified in Rule 2.11; or
5.8.6 the Option Holder being adjudicated bankrupt.
6. TAKEOVERS AND LIQUIDATIONS
6.1 If any person obtains Control of the Company as a result of making a
general offer:
6.1.1 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
6.1.2 to acquire all the shares in the Company which are of the same
class as the Shares
then subject to the remaining provisions of this Rule 6 any Subsisting
Option may be exercised within the Appropriate Period and to the extent
that it has not been exercised by the end of the Appropriate Period the
Option shall lapse immediately upon the end of the Appropriate Period.
6.2 In the event that notice is given to the shareholders of the Company of
a resolution to approve (subject to sanction by the Court) 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 pursuant to Section 425 of the Act ("the
Reconstruction Scheme") then any Option Holder may serve notice to
exercise his Subsisting Options at any time during the Appropriate
Period and to the extent that an Option has not been exercised by the
end of the Appropriate Period it shall lapse immediately upon the end
of the Appropriate Period.
6.3 If any person becomes bound or entitled to acquire Shares in the
Company under Sections 428 to 430F of the Act then any Subsisting
Option may be exercised at any time during the Appropriate Period and
to the extent that it has not been exercised by the end of the
Appropriate Period the Option shall lapse immediately upon the end of
the Appropriate Period.
6.4 If as a result of the events specified in Rules 6.1 or 6.2 a company
has obtained Control of the Company or if a company has become bound or
entitled as mentioned in Rule 6.3 the Board shall seek the agreement of
that other company ("the Acquiring Company") or a company which has
Control over the Acquiring Company and if such agreement is obtained
each unexercised Option ("Old Option") may within the Appropriate
Period applicable to the relevant Rule be released in consideration of
the grant of a new Option ("New Option") to acquire shares in the
Acquiring Company or a company which has Control of the Acquiring
Company which satisfies the following conditions:
6.4.1 it 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 disposal;
6.4.2 it has a subscription price per share such that the aggregate
price payable on complete exercise equals the aggregate price
which would have been payable on complete exercise of the Old
Option; and
6.4.3 it is otherwise identical in terms to the Old Option.
The New Option shall for all other purposes of this Scheme be treated
as having been acquired at the same time as the Old Option in
consideration of the release of which it is granted and where any New
Options are granted pursuant to this Rule 6.4 Rules 5, 6,7, 8 and10 and
all definitions in Rule 1 as appropriate in those Rules shall in
relation to the New Options be construed as if references to the
Company and to the Shares were references to the company whose share
capital includes shares over which the New Option has been granted and
to the shares in that company but references to a Participating Company
shall continue to be construed as if references to the Company were
references to Huntingdon Life Sciences Group plc. Where in accordance
with this Rule 6.4 Old Options are released and New Options granted the
New Options shall not be exercisable in accordance with Rules 6.1, 6.2
and 6.3 above by virtue of the event by reason of which the New Options
were granted.
6.5 In the event that notice is given to the shareholders of the Company of
a resolution to be proposed for the voluntary winding up of the Company
any Option Holder may serve notice to exercise, his Subsisting Options
at any time up to the passing of the resolution provided that any such
notice to exercise shall only be effective if the resolution is passed.
If such resolution is duly passed all Options shall, to the extent that
they have not been exercised, lapse.
6.6 For the purposes of this Rule 6 other than Rule 6.4 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.
6.7 The exercise of an Option pursuant to the preceding provisions of
this Rule 6 shall be subject to the provisions of Rule 8 below.
6.8 An Exceptional Performance Option may not be exercised under this Rule
6 unless the Performance Conditions applicable to it have been
satisfied to the satisfaction of the Remuneration Committee provided
that the growth in Earnings per Share shall be measured between the
Date of Grant of the Exceptional Performance Option and the date of the
event by virtue of which the Exceptional Performance Option becomes
exercisable under this Rule 6 and the last Earnings per Share that
shall be used for that purpose shall be the Earnings per Share for the
Accounting Period current at the date of the said event by virtue of
which the Exceptional Performance Option becomes exercisable as
determined by the Remuneration Committee in consultation with the
Auditors or such other advisers selected by the Remuneration Committee
in its absolute discretion.
7. VARIATION OF SHARE CAPITAL
In the event of any variation in the share capital of the Company by
way of capitalization or rights issue or any consolidation sub-division
or reduction of capital or otherwise by the Company the number of
Shares subject to any Option and the Subscription Price for each of
those Shares shall be adjusted by the Remuneration Committee subject
(except in the case of a capitalization) to written confirmation by the
Auditors that in their opinion such adjustment is fair and reasonable
provided that:
7.1 the aggregate amount payable on the exercise of an Option in
full is not increased; and
7.2 the Subscription Price for a Share is not reduced below its
nominal value.
8. MANNER OF EXERCISE OF OPTIONS
8.1 No Option shall be exercisable save in accordance with the then current
Model Code for Securities Transactions by Directors of Listed Companies
issued by the London Stock Exchange.
8.2 Subject to the provisions of Rule 5 and this Rule 8 an Option may be
exercised at any time in whole or in part but not unless the
Remuneration Committee otherwise permits in respect of less than 10 per
cent of the Shares the subject of the original Option unless such
smaller percentage represents all the remaining Shares under the Option
by the Option Holder or (as the case may be) his personal
representatives giving a notice of exercise to the Company
substantially in the form set out in Schedule 3 accompanied by the
appropriate payment and the relevant Option certificate and shall be
effective on the date of its receipt by the Company ("exercise date")
provided that wherever relevant the Performance Conditions shall first
have been fulfilled to the satisfaction of the Remuneration Committee.
8.3 No Option shall be capable of being quoted or dealt in on any stock
exchange.
8.4 Subject to Rules 9.2 and 9.3 Shares shall be allotted and issued
pursuant to a notice of exercise within 42 days of the exercise date
(or such date which is the later of the date on which (a) the payment
referred to in Rule 9.2 is receiving the relevant company; and (b) the
Board is satisfied that the sale referred to in Rule 9.3 has been
completed. 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
and will be subject to all the provisions of the Articles of
Association of the Company relating to voting, dividends, transfer or
otherwise.
8.5 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 representing the balance shall be issued
by the Company as soon as possible after the partial exercise.
8.6 Where relevant, within 28 days after Shares have been allotted pursuant
the exercise of an Option the Company shall make application to the
Council of the London Stock Exchange for the admission to the Official
List of the Shares allotted and issued following such exercise.
8.7 It shall be a condition of participation in the Scheme that in the
event of an Option Holder ceasing to be an Eligible Participant (for
whatever reason) he shall not be entitled to any compensation
whatsoever by reason of any termination or alteration of rights or
expectations under the Scheme whether such compensation is claimed by
way of damages for wrongful dismissal or breach of contract or for loss
of office or otherwise howsoever. Participation in this Scheme by an
Option Holder is a matter entirely separate from any pension right or
entitlement he may have and from his terms or conditions of employment
and participation in this Scheme shall in no respects whatever affect
in any way an Option Holder's pension rights or entitlement or terms or
conditions of employment.
9. TAXATION
9.1 If a Tax Liability arises in respect of an Option the Company shall be
entitled to deduct to the extent permitted by law such amount(s) from
any payment due to be made by the Company or any company which controls
or is controlled by the Company to or in respect of the Option Holder
in respect of that Option during the same calendar month or other
relevant period in which the event occurs and/ or in any subsequent
calendar month or such relevant period in order to satisfy and
discharge the Tax Liability whether or not such payment is of an income
or capital nature.
9.2 If and to the extent the Tax Liability referred to in Rule 9.1 is of
income tax which exceeds the amount from which deductions in respect
thereof can be made in any one period referred to in Rule 9.1 in
respect of the Option Holder concerned, that Option Holder shall pay or
reimburse the Company for the amount of the excess on demand or within
such period as may be specified in any written notice given by the
Company and the Company shall not be obliged to issue and allot any
Shares upon the exercise of an Option until it has received such
payment.
9.3 Where a Tax Liability arises in respect of the exercise of an Option,
the Board may, without prejudice to the Company's rights under Rule 9.1
and Rule 9.2, by written notice to the Option Holder concerned nominate
as his bare trustee any person (the "Bare Trustee") to sell such number
of Shares issued upon the exercise of the Option as may be required in
order to discharge the Tax Liability and any other liability (including
costs) connected with the said sale and the Bare Trustee shall pay an
amount equal to the Tax Liability to the Company and otherwise
discharge any other said liability to the extent that the net proceeds
from the said sale permit. The Company shall not be obliged to issue
and allot any Shares upon the exercise of an option until the said sale
has been completed to the satisfaction of the Board.
10. ADMINISTRATION AMENDMENT AND TERMINATION
10.1 The Scheme shall be administered by the Remuneration Committee whose
decision on all disputes shall be final.
10.2 The Board may from time to time make amendments to these Rules
provided that:
10.2.1 no amendment may detrimentally affect an Option
Holder as regards any Subsisting Option held by him on
the date of the amendment being made except
with the consent in writing of (a) in the case of a Founder
Option, the holder of that Founder Option and (b) in
every other case such Option Holders who,
assuming they exercise their Options in full, would thereby
become entitled to not less than three quarters in
nominal amount of all the Shares which would
fall to be allotted upon exercise in full of all Subsisting
Options; and
10.2.2 except with the prior sanction of the Company in
general meeting no such modification or variation shall
extend the class of person eligible for the grant of
Options or alter to the advantage of Option Holders
(present or future) Rules 2.1, 2.2, 2.3, 2.7, 2.10, 3, 4,
or 7 the definitions of "Eligible Participant",
"Participating Company" or "Subscription Price" except
for minor amendments to benefit the administration of the
Scheme, to comply with or take account of any proposed or
existing legislation or law or to obtain or maintain
favourable tax, exchange control or regulatory treatment
for Option Holders (present or future) or for any
Participating Company; and
10.2.3 written notice of any alteration made in accordance with
this Rule 10.2 shall be given to all Option Holders.
10.3 The cost of establishing and operating the Scheme shall be borne by the
Participating Companies in such proportions as the Board shall
determine.
10.4 The Company in general meeting or the Board may at any time resolve to
terminate this Scheme in which event no further Options shall be
granted but the provisions of this Scheme shall continue in force in
relation to Subsisting Options.
10.5 The Company shall at all times keep available sufficient authorised and
unissued Shares 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.
10.6 Any notice to be given pursuant to the terms of these Rules must be
given in writing to the party due to receive such notice at (in the
case of the Company) its registered office from time to time or (in the
case of an individual) his address as notified to the Company from time
to time. Notice must be delivered personally or sent by first class
pre-paid recorded delivery or registered post (air mail if overseas) or
by facsimile transmission and shall be deemed to be given in the case
of delivery on delivery and in the case of posting (in the absence of
evidence of earlier receipt) within 48 hours after posting (6 days if
sent by air mail) and in the case of facsimile transmission on
completion of transmission.
<PAGE>
SCHEDULE 1
Letter of Grant
[The Company's Letterhead]
Date
To: Eligible Participant
Dear [name of Eligible Participant]
THE HUNTINGDON LIFE SCIENCES GROUP UNAPPROVED SHARE OPTION SCHEME ("the Scheme")
1 The Directors have granted you [an/four] option[s] [designated as
['A'/'B'/'C'/'D'] Option[s] [respectively] [an Exceptional Performance
Option]] over [ ] ordinary shares [each] ("Shares") in the capital of
Huntingdon Life Sciences Group plc ("the Company") under and subject to
the rules of the Scheme ("the Option") which was approved and adopted
by a written resolution of the shareholders of the Company on 199 .
[Each of your options is a Founder Option for the purposes of the
Rules.] A copy of the rules of the Scheme is enclosed herewith.
2 The subscription price per Share payable on the exercise of the Option
is [12.5]/[]p. This subscription price is subject to adjustment under
Rule 7 of the Scheme if the Company's share capital is altered or
re-organised, in specified ways.
3 An Option certificate for[each of] your Option[s] is enclosed herewith.
4 Under the rules of the Scheme ("the rules"), except in certain
circumstances the Option may not be exercised earlier than
[three]/[five] years from the Date of Grant.
5 [The Option may not be exercised unless the Performance Conditions
attached to this letter have been fulfilled to the satisfaction of the
Remuneration Committee except in certain circumstances permitted by the
rules.][Your Founder Option may not be exercised unless the Market
Value of the Shares is equal to or exceeds the relevant target price
specified in the relevant option certificate. You should refer to Rule
2.2 in connection with this.]
6 The Option shall not be exercisable save in accordance with the then
current Model Code for Security Transactions by Directors of Listed
Companies issued by the London Stock Exchange.
7 You may renounce the Option in whole or in part by signing (in the
presence of a witness) and returning this letter together with the
enclosed Option certificate to me before [date 21 days after the Date
of Grant].
Yours faithfully,
.....................
Secretary
[NOTE: Performance Conditions must be attached to this letter]
RENUNCIATION
I [PRINT NAME] hereby renounce the [Exceptional Performance] Option [in
whole]/[in respect of Shares]. I am returning with this letter the certificate
in respect of the [Exceptional Performance] Option referred to above.
SIGNED as a DEED by
- ------ ----
[NAME]
----
in the presence of:
Signature:
Name:
Address:
Occupation:
<PAGE>
SCHEDULE 2
Option Certificate Number:
-------------------------------------------------------------------------------
Incorporated under the Companies Acts
Registered in England and Wales under Number [ ]
TOTAL NUMBER OF ORDINARY SHARES OF p EACH
INCLUDED IN THIS ['A'/'B'/'C'/'D']/[EXCEPTIONAL PERFORMANCE]
OPTION (number)
-------------------------------------------------------------------------------
This is to certify that (name) was granted an ['A'/'B'/'C'/'D'] Option [which
was designated as an Exceptional Performance Option] on the day of to subscribe
for ordinary shares of [ ]p each in the capital of the Company ("Shares") at a
Subscription Price of [12.5P]/[ ]per Share giving an aggregate Subscription
Price of (pound) upon the terms of the Huntingdon Life Sciences Group Unapproved
Share Option Scheme ("the scheme") ("the Option"). The Option may be exercised
only at the times and in the circumstances and manner permitted by the rules of
the Scheme and cannot be transferred, assigned, charged, pledged or otherwise
disposed of or dealt with (other than its exercise in accordance with the Rules)
with. Any purported transfer, assignment, charge, pledge or other disposal or
dealing (other than its exercise in accordance with the Rules) with shall cause
the Option to lapse forthwith.
[This ['A'/'B'/'C'/'D'] Option is subject to the conditions specified in Rule
2.2 and cannot be exercised until the Market Value of a Share is equal to or
more than 25/50/75/100 pence.]
THE COMMON SEAL of
HUNTINGDON LIFE
SCIENCES GROUP plc
was affixed to this deed
in the presence of:
Director
Secretary
Date .........................
NOTE:
(1) A form of exercise of the Option is printed overleaf. This certificate
must be surrendered on the exercise, in whole or in part, of the Option.
(2) The number and/or description of shares covered by this Option and/or
the Subscription Price may be varied in accordance with the Rules of the
Scheme.
(3) Notice to exercise this Option must be given by [date no later than
the day before the tenth anniversary of the Date of Grant].
(4) The right to exercise this Option shall be subject to the due
satisfaction of the Performance Conditions specified on the attached sheet.
<PAGE>
SCHEDULE 3
Form of Exercise
(TO BE PRINTED ON REVERSE OF OPTION CERTIFICATE)
PLEASE READ THE NOTES AT THE FOOT OF THIS FORM
CAREFULLY BEFORE COMPLETING IT
The Secretary
Huntingdon Life Sciences Group plc
I, the undersigned, having become entitled so to do hereby exercise the
['A'/'B'/'C'/'D'] [Exceptional Performance] Option referred to overleaf ("the
Option") in respect of Shares comprised in the Option upon the terms of the
Huntingdon Life Sciences Group Unapproved Share Option Scheme ("the Scheme") and
agree to accept the Shares to be allotted and issued pursuant to this Form of
Exercise subject to and in accordance with the Memorandum and Articles of
Association of the Company and hereby request you to place my name on the
Register of Members in respect thereof.
I enclose a remittance for (pound) being the aggregate Subscription Price
payable for the Shares in respect of which the Option is now exercised at the
Subscription Price per Share specified overleaf.
For the avoidance of doubt, I hereby agree that Rule 9 of the rules of the
Scheme may be applied by the Company and the Board at their discretion in
respect of the Option hereby exercised.
If applicable, I hereby request you to despatch a balance certificate for the
Option to subscribe for any Shares included in the Option referred to overleaf
and not exercised on this occasion, by post at my risk to the address mentioned
below.
Signature ...................................
Surname .....................................
Forename(s) .................................
Address .....................................
.............................................
Note:
(1) Although the Option referred to overleaf is personal to the holder
named overleaf it may be exercised (subject to Rule 5.6) by his
personal representative(s) if he dies while it is still capable of
exercise provided the personal representative(s) does/do so before the
expiration of twelve months from the date of the holder's death or ten
years from the date of its grant (if sooner). If there are more than
one, each of the personal representatives must sign this form.
(2) Options must be exercised in respect of whole numbers of Shares. Please
indicate the number of Shares you wish to subscribe on this occasion
which must not exceed the number of Shares comprised in the Option. In
any event you will be deemed to have exercised your rights in respect
of that whole number of Shares which can be subscribed with the moneys
represented by your remittance.
(3) The remittance should be for an amount equal to the aggregate
Subscription Price, being the Subscription Price per Share shown
overleaf, multiplied by the number of Shares applied for.
(4) Please note that before any Shares are allotted to you, any tax
liability that arises on the exercise of your Option may be required to
be satisfied by the Board.
DATED 1999
========================================================================
THE HUNTINGDON LIFE SCIENCES GROUP INCENTIVE OPTION PLAN
========================================================================
Charles Russell
8-10 New Fetter Lane
London EC4A 1RS
Tel: 0171 203 5000
Ref: TL/MC/37971/3
<PAGE>
INDEX
(for reference purposes only)
Rule Heading Page Number
1 DEFINITIONS AND INTERPRETATION.....................................1
2 OPERATION OF THE PLAN AND THE GRANT OF OPTIONS.....................4
3 PLAN LIMITS........................................................7
4 PERSONAL LIMITS....................................................8
5 EXERCISE AND LAPSE OF OPTIONS......................................9
6 TAKEOVERS AND LIQUIDATIONS........................................10
7 VARIATION OF SHARE CAPITAL........................................12
8 MANNER OF EXERCISE OF OPTIONS.....................................12
9 TAXATION..........................................................13
10 ADMINISTRATION AMENDMENT AND TERMINATION..........................14
SCHEDULE 1..............................................................16
SCHEDULE 2..............................................................18
SCHEDULE 3..............................................................19
<PAGE>
RULES OF THE HUNTINGDON LIFE SCIENCES GROUP
INCENTIVE OPTION PLAN
Adopted on 3 June 1999
1. DEFINITIONS AND INTERPRETATION
1.1 In these Rules the following words and expressions shall (except where
the context otherwise requires) have the following meanings:
"Act"
the Companies Act 1985
"Accounting Period"
an accounting reference period of the Company
"Announcement Date"
the date on which the annual or half-yearly results of the Company are
announced
"Appropriate Period"
(i) if the circumstances in Rule 6.2 apply the period of six
months beginning with the date on which the person making the
offer has obtained Control of the Company and any condition
subject to which the offer is made has been satisfied;
(ii) if the circumstances in Rule 6.3 apply the period of six months
beginning with the date on which the
Reconstruction Scheme is sanctioned by the Court;
(iii) if the circumstances in Rule 6.4 apply the period during which
the person remains bound or entitled to acquire any shares in
the Company
"Associated Company"
the same meaning as in Section 416 of the Taxes Act
"Auditors"
the auditors for the time being of the Company appointed pursuant
to section 384 of the Act and
acting as experts and not as arbitrators
"Board"
the Board of directors for the time being of the Company or a duly
appointed committee thereof at
which a quorum is present
"Company"
Huntingdon Life Sciences Group plc (registered in England and Wales
number 502370)
"Company Share Schemes"
the Plan and any other share option or profit sharing share scheme of
the Company or of any Associated Company whether or not approved by the
Inland Revenue
"Control"
the same meaning as in Section 840 of the Taxes Act and the
expression "controlled" shall be
construed accordingly
"Date of Adoption"
3 June 1999 being the date of adoption of this Plan by the Company
"Date of Grant"
in relation to any Option means the date on which the Option is
granted or was or is to be granted
under the Plan
"Dealing Day"
a day on which the London Stock Exchange is open for business
"Eligible Participant"
any employee, including an employee who is a director of a
Participating Company, who is required by his contract of employment to
devote substantially the whole of his working time to the business of
the Group or any Group Member
"Expected Retirement Date"
the date on which an Eligible Participant is expected to retire in
accordance with the terms of his contract of employment with a
Participating Company
"Founder Option"
a Founder Option granted under the Huntingdon Life Sciences Group
Unapproved Share Option Scheme
adopted by the Company on 2 September 1998
"Group"
the Company and any company under the Control of the Company and the
expression "Group Member" shall be construed accordingly
"London Stock Exchange"
the London Stock Exchange Limited
"Market Value"
in respect of any Share on any day means either:
(a) (when on that day the shares of that class are listed on the
official list of the London Stock Exchange) the middle market
quotation of such a Share as derived from the Daily Official
List of the London Stock Exchange for the Dealing Day
immediately preceding that day; or
(b) in all other cases the market value of such a Share as
determined in accordance with the provisions of part VIII of
the Taxation of Chargeable Gains Act 1992
"Option"
a right to subscribe for Shares granted (or to be granted) in
accordance with these Rules and New Options granted as consideration
for the release of Old Options in accordance with Rule 6
"Option Agreement"
the agreement dated 2 September 1998 and made between the Company (1)
and Andrew H Baker(2)
"Option Holder"
any person who has been granted an Option or where the context requires
a person becoming entitled to an Option in consequence of the death of
an Option Holder
"Participating Company"
the Company and any other company of which the Company has Control and
which is for the time being authorised by the Remuneration Committee to
participate in this Plan
"Performance Measure"
a measure as to the performance of the Group, or a relevant Group
Member or any division or unit thereof, or any number of employees of
the Group or a Group Member
"Performance Measure Period"
an Accounting Period in respect of which the Remuneration Committee
resolves to operate the Plan pursuant to Rule 2.1
"Personal Performance Conditions"
any performance condition specific to the relevant Eligible Participant
imposed pursuant to Rule 2.4.3
"Remuneration Committee"
the committee consisting wholly or mainly of non-executive directors of
the Company and chaired by a non-executive director and having formal
responsibility for the operation of the Plan
"Rules"
the rules of the Plan as set out herein and as amended from time to
time
"Plan"
the employee share option scheme constituted and governed by these
Rules as from time to time amended
"Share"
an ordinary share of 5p in the capital of the Company
"Subscription Price"
the price at which each Share subject to an Option may be acquired on
the exercise of that Option being (subject to Rules 6.5 and 7) not
lower than the higher of:
(i) the nominal value of a Share; and
(ii) the Market Value of a Share on the Date of Grant
"Subsisting Option"
an Option to the extent that it has not been exercised, lapsed or
cancelled
"Tax Liability"
any liability of the Company or any company which Controls or is under
the Control of the Company to account for any income tax National
Insurance Contributions or other tax arising in relation to the grant,
exercise or other dealing with or in relation to an Option
"Taxes Act"
the Income and Corporation Taxes Act 1988
"Total Remuneration"
in relation to any Eligible Participant and in any period where that
Eligible Participant is an employee or officer of a Participating
Company the remuneration (exclusive of benefits in kind but for the
avoidance of doubt, including any cash amount paid to the Eligible
Participant) paid or payable to that Eligible Participant by the
Participating Company and all Associated Companies of that
Participating Company in that period
"Vesting Scale"
the scale, if any, by reference to which the Remuneration Committee
shall determine the number of Shares that shall continue to be
comprised in an Option pursuant to Rule 2.9
"Year of Assessment"
a year beginning on any 6 April and ending on the following 5 April
1.2 Any reference in these Rules to any provision of any Act of Parliament
or any subordinate legislation made pursuant to any Act of Parliament
shall be deemed to be a reference to such Act of Parliament or
subordinate legislation as amended modified or re-enacted (whether
before or after the date hereof).
1.3 In these Rules words incorporating the masculine gender only include the
feminine and neuter genders and words incorporating the singular number
only include the plural and vice versa.
1.4 Rule headings are for ease of reference only and do not affect the
construction or interpretation of these Rules.
1.5 References to writing shall include typewriting printing lithography
photography and facsimile messages and other modes of reproducing words
in a legible and non-transitory form.
2 OPERATION OF THE PLAN AND THE GRANT OF OPTIONS
2.1 The Remuneration Committee may, not later than 42 days after the
approval of the Plan by the Company in general meeting, in its absolute
discretion resolve to operate the Plan in relation to the Accounting
Period current at that date and thereafter may so resolve not later than
42 days after an Announcement Date to operate the Plan in relation to
any subsequent Accounting Period and if the Remuneration Committee shall
so resolve, it shall not later than the said 42 days after the approval
of the Plan, or as appropriate, an Announcement Date:
2.1.1 select Eligible Participants for the grant of Options; 2.1.2 in respect
of each such Eligible Participant selected under Rule 2.1.1:
2.1.2.1 determine the Performance Measure provided that
the Performance Measure shall be designed to
ensure that the grant of an Option is made
subject to the attainment of a significant
improvement in the underlying financial
performance of the Company during the
Performance Measure Period;
2.1.2.2 determine the Personal Performance Conditions, if
any, which shall apply to him;
2.1.2.3 having regard to Rules 3 and 4 subject to
adjustment in accordance with Rules 2.1.2.4 and
2.9 , the number of Shares in respect of which
an Option shall be granted under Rule 2.1.3 and
the Subscription Price that shall be payable on
the exercise of the Option;
2.1.2.4 set the Vesting Scale, if any to apply, on the
basis of which the number of Shares in respect
of which an Option shall remain subsisting at
the end of the Performance Measure Period in
relation to that Option and where appropriate
the number of Shares in respect of which the
Option may be exercised pursuant to Rule 6; and
2.1.3 in respect of each such Eligible Participant selected
under Rule 2.1.1 and as permitted by the Model Code and
the rules of the London Stock Exchange grant without
consideration an Option subject to the Performance
Measure, any applicable Personal Performance Conditions,
prospective adjustment in accordance with any applicable
Vesting Scale and the Rules
provided that:
2.1.4 an Option shall lapse in its entirety if:
(a) the Performance Measure is not met, where a Vesting Scale applies,
in accordance with the Vesting Scale; or
(b) the Personal Performance Conditions are not met where the Option
is subject to such Personal Performance Conditions
in each case to the satisfaction of the Remuneration
Committee (and for the avoidance of doubt, the partial
lapse of an Option under Rule 2.4.2, shall not in itself
cause an Option to lapse in its entirely under this
Rule);
2.1.5 no Eligible Participant shall be entitled as of right to participate
in the Plan or to the grant of any Options;
2.1.6 no Eligible Participant shall be granted an Option within 2 years
preceding his Expected Retirement Date; and
2.1.7 no Option may be granted under this Plan after the tenth anniversary
of the Date of Adoption.
2.2 An Option shall be granted by a resolution of the Remuneration
Committee on the same day as the date on which the Remuneration
Committee selects Eligible Participants under Rule 2.1.
2.3 Notwithstanding the provisions of Rule 2.1, the Remuneration
Committee may resolve to Operate the
Plan and grant Options outside the 42 day period mentioned therein in
circumstances which the Remuneration Committee in its absolute
discretion deems sufficiently exceptional to justify the operation of
the Scheme and the grant of Options at that time.
2.4 As soon as reasonably practicable after the matters referred to in
Rules 2.1 and 2.2 have been completed the Remuneration Committee shall
notify (by a notice substantially in the form of the notice in
Schedule 1) each Eligible Participant selected pursuant to Rules 2.1.1
respectively of:
2.4.1 the grant of an Option to him;
2.4.2 the Performance Measure applicable in relation to him and
that if the Performance Measure is not met during the
Performance Measure Period, the Option shall lapse in
whole or in part and to the extent that it lapses, it
shall be treated as if it had never been granted;
2.4.3 the Personal Performance Conditions, if any, applicable to him; and 2.4.4
the effect of Rule 2.1.4.
2.5 The Performance Measure and any Personal Performance Conditions
imposed under Rule 2.1.2 may be waived or amended by the Remuneration
Committee at any time if an event occurs which causes the
Remuneration Committee to consider that such Performance Measure or
as appropriate such Personal Performance Conditions could not fairly
or reasonably be met, provided that any amended Performance Measure
or Personal Performance Conditions should be neither significantly
more difficult nor easier to satisfy than the original Performance
Measure or Personal Performance Conditions were intended to be at the
time of their imposition.
2.6 An Option Holder may, within a period of twenty one days immediately
following the Date of Grant, renounce by notice in writing to the
Company his Option in respect of all or any part of the Shares subject
of the Option and in which case that Option shall be deemed never to
have been granted to the extent so renounced.
2.7 Subject to Rules 5.4 and 5.5, each Option shall be granted so that its
exercise shall be subject to the Option Holder continuing to be an
Eligible Participant throughout the period between the Date of Grant
and the date on which the Option is exercised in accordance with the
Rules.
2.8 The Remuneration Committee may in its absolute discretion impose
conditions on the grant of an Option restricting the number of Shares
in respect of which an Option may be exercised on any one occasion.
2.9 As soon as reasonably practicable after the end of the Performance
Measure Period in respect of an Option, the Remuneration Committee
shall determine:
2.9.1 the extent to which the Performance Measure has been satisfied
in respect of the Option and the number of Shares which shall
continue to be comprised in the Option in accordance with the
Vesting Scale set under Rule 2.1.2.4 such that the balance of
Shares originally comprised in the Option shall cease to be so
comprised and the Option shall be deemed to be adjusted
accordingly; and
2.9.2 whether or not the Personal Performance Conditions, if any, have been
satisfied
and, unless the Option lapses in accordance with Rule 2.1.4, the
Remuneration Committee shall or shall procure that the Company shall
notify the Option Holder concerned of the adjustment so deemed to be
made to his Option and issue an Option certificate substantially in
the form set out in Schedule 2 in respect of each Option which shall
specify:
2.9.3 the number of Shares that continue to be comprised in the Option;
2.9.4 the Date of Grant;
2.9.5 the Subscription Price; and
2.9.6 the last date upon which notice to exercise the Option may
be given, being not later than the day immediately preceding
the tenth anniversary of the Date of Grant
PROVIDED THAT to the extent that Shares cease to be comprised in an
Option, or the Option lapses in accordance with Rule 2.1.4, the Option
shall be deemed not to have been granted ab initio in respect of such
Shares and the Option Holder concerned shall have no rights whatsoever
in respect of such Shares.
2.10 An Option shall be personal to the Option Holder and may not be
transferred, assigned, charged, pledged or otherwise disposed of or
dealt with (other than its exercise in accordance with the Rules). Any
purported transfer, assignment, charge, pledge or other disposal or
dealing (other than its exercise in accordance with the Rules) with
the Option shall cause the Option to lapse forthwith and each Option
certificate shall in relation to the Option carry a statement to this
effect.
3 PLAN LIMITS
3.1 No Option shall be granted if immediately following such grant it would
cause the aggregate of the number of Shares which have been or remain
to be issued on the exercise of Options granted under the Plan and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted under any other Company Share Scheme in the
preceding 10 years but excluding Founder Options and any rights granted
under the Option Agreement and any shares that have been issued before
the Date of Adoption upon the exercise of rights granted under any
other Company Share Scheme, to exceed such number of shares as
represents the aggregate of 10 per cent of the issued ordinary share
capital of the Company immediately prior to the Date of Grant plus
1,550,000 Shares.
3.2 No Option shall be granted if immediately following such grant it would
cause the aggregate of the number of Shares which have been or remain
to be issued on the exercise of Options granted under the Plan and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted in the preceding 10 years under any other
share option scheme (other than a savings related share option scheme)
but excluding Founder Options and any rights granted under the Option
Agreement and any shares that have been issued before the Date of
Adoption upon the exercise of rights granted under any other share
option scheme (other than any savings related share option scheme), to
exceed such number of shares as represents the aggregate of 7.5 per
cent of the issued ordinary share capital of the Company immediately
prior to the Date of Grant plus 1,550,000 Shares.
3.3 For the avoidance of doubt, where and to the extent that an Option
lapses or is renounced in accordance with the Rules and to the extent
that Shares cease to be comprised in an Option by virtue of Rule 2.9
the number of Shares comprised the Option before its lapse,
renunciation or that cease to be comprised in it shall be disregarded
for the purposes of this Rule 3.
4 PERSONAL LIMITS
4.1 The number of Shares in respect of which an Option is granted to an
Eligible Participant shall be limited, and the Option shall take effect
so and to the extent that the aggregate Subscription Price of the Shares
he may acquire pursuant to the exercise of that Option when added to the
aggregate Market Value of the Shares Comprised in the Subsisting Options
previously granted under the Plan (which for the purposes of this Rule
4.1 shall also include cancelled Options) to him and the aggregate
market value of shares he may acquire pursuant to any other unexercised
rights (excluding any Founder Options) obtained under any other Company
Share Scheme (other than a savings related share option scheme or a
profit sharing scheme) shall not exceed or further exceed four times the
Eligible Participant's Total Remuneration for the Year of Assessment
current at the Date of Grant or, if the Eligible Participant was not an
Eligible Participant at the beginning of that Year of Assessment, four
times the Eligible Participant's Total Remuneration for the period of
twelve months beginning with the first day during that Year of
Assessment on which he became an Eligible Participant.
4.2 For the purposes of this Rule 4 Market Value of Shares shall mean in the
case of rights granted under other Company Share Scheme the market value
of the shares subject to such rights at the time of the grant of the
right as calculated in accordance with the rules of the relevant Company
Share Scheme.
4.3 For the avoidance of doubt, where and to the extent that an Option
lapses or is renounced in accordance with the Rules and to the extent
that Shares cease to be comprised in an Option by virtue of Rule 2.9 the
number of Shares comprised the Option before its lapse, renunciation or
that cease to be comprised in it shall be disregarded for the purposes
of this Rule 4.
5 EXERCISE AND LAPSE OF OPTIONS
5.1 Subject to this Rule 5 and Rules 6 and 8 an Option may be exercised at
any time on or after the third anniversary and before the tenth
anniversary of its Date of Grant.
5.2 An Option shall not be exercisable on or after the tenth anniversary of
its Date of Grant under any circumstances whatsoever and every
Subsisting Option shall lapse on the tenth anniversary of its Date of
Grant.
5.3 The right to exercise an Option shall terminate immediately upon the
Option Holder ceasing to be an Eligible Participant except where Rules
5.4 or 5.5 apply.
5.4 Subject to Rule 5.2 and Rule 5.6 where an Option Holder dies after the
end of the Performance Measure Period applicable to his Option his
personal representatives may exercise any unexercised Options held by
him within 12 months of the date of death.
5.5 Subject to Rule 5.2 and Rule 5.6, where an Option Holder ceases to be an
Eligible Participant after the end of the Performance Measure Period
applicable to his Option:
5.5.1 by reason of:
5.5.1.1 injury, disability or pregnancy; or
5.5.1.2 redundancy;
5.5.1.3 retirement on or after the Expected Retirement Date;
5.5.1.4 the company by which the Option Holder is employed ceasing to be a
Participating Company; or 5.5.1.5 the transfer of the business in
which the Option Holder is employed to a person other than a
Participating Company; or
5.5.2 where the circumstances are not as described in Rules 5.5.1.1
to 5.5.1.5 and the Remuneration Committee in its absolute
discretion decides not later than 30 days after the date on
which the Option Holder ceases to be an Eligible Participant
to allow that Option Holder to exercise any Subsisting Option
then held by him
any Subsisting Option may be exercised no later than 6 months after the
date of such cessation and for the purposes of this Rule 5.5 a female
Option Holder shall not cease to be an Eligible Participant if absent
from work because of pregnancy until and upon such time as she ceases
to be entitled to exercise her right to return to work.
5.6 Where, but for this Rule 5.6, the event by virtue of which Rule 5.4 or
Rule 5.5 would apply occurs between the end of the Performance Measure
Period and the date on which the Remuneration Committee makes a
determination pursuant to Rule 2.9, the Option shall:
5.6.1 not be exercisable if it lapses by virtue of Rule 2.1.4; or
5.6.2 be exercisable in respect of the number of Shares adjusted in
accordance with Rule 2.9.1 or if no adjustment is made, in
respect of all the Shares comprised in the Option.
5.7 Save where Rules 5.4 or 5.5 apply the exercise of any Option shall be
conditional upon the conditions imposed pursuant to Rule 2.7 and, where
appropriate Rule 2.8 having been fulfilled to the satisfaction of the
Remuneration Committee.
5.8 An Option shall lapse upon the earliest occurrence of any of the
following events insofar as it has
not been exercised:
5.8.1 the tenth anniversary of the Date of Grant;
5.8.2 the first anniversary of the Option Holder's death;
5.8.3 the expiry of 6 months from the date on which an Option Holder
ceases to be an Eligible Participant where Rule 5.5 applies;
5.8.4 the earliest date upon which the Option is expressed to lapse under
Rule 5.3 or Rule 6;
5.8.5 the date of an event specified in Rule 2.10; or
5.8.6 the Option Holder being adjudicated bankrupt.
6 TAKEOVERS AND LIQUIDATIONS
6.1 Where any event as a result of which an Option becomes exercisable by
virtue of this Rule 6 occurs before the expiry of the Performance
Measure Period in relation to that Option (but, for the avoidance of
doubt, not where such event occurs after the expiry of the said
Performance Measure Period), the Option may not be exercised unless and
to the extent the relevant Performance Measure and any applicable
Personal Performance Conditions have been satisfied to the satisfaction
of the Remuneration Committee and where any Vesting Scale is applicable
to an Option, the Remuneration Committee shall determine the number of
Shares in respect of which an Option may be exercised pursuant to this
Rule 6 by reference to that Vesting Scale.
6.2 If any person obtains Control of the Company as a result of making a
general offer:
6.2.1 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
6.2.2 to acquire all the shares in the Company which are of the same class
as the Shares
then subject to the remaining provisions of this Rule 6 any Subsisting
Option may be exercised within the Appropriate Period and to the extent
that it has not been exercised by the end of the Appropriate Period the
Option shall lapse immediately upon the end of the Appropriate Period.
6.3 In the event that notice is given to the shareholders of the Company of
a resolution to approve (subject to sanction by the Court) 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 pursuant to Section 425 of the Act ("the
Reconstruction Scheme") then any Option Holder may serve notice to
exercise his Subsisting Options at any time during the Appropriate
Period and to the extent that an Option has not been exercised by the
end of the Appropriate Period it shall lapse immediately upon the end of
the Appropriate Period.
6.4 If any person becomes bound or entitled to acquire Shares in the Company
under Sections 428 to 430F of the Act then any Subsisting Option may be
exercised at any time during the Appropriate Period and to the extent
that it has not been exercised by the end of the Appropriate Period the
Option shall lapse immediately upon the end of the Appropriate Period.
6.5 If as a result of the events specified in Rules 6.2 or 6.3 a company has
obtained Control of the Company or if a company has become bound or
entitled as mentioned in Rule 6.4 the Board shall seek the agreement of
that other company ("the Acquiring Company") or a company which has
Control over the Acquiring Company and if such agreement is obtained
each unexercised Option ("Old Option") may within the Appropriate Period
applicable to the relevant Rule be released in consideration of the
grant of a new Option ("New Option") to acquire shares in the Acquiring
Company or a company which has Control of the Acquiring Company which
satisfies the following conditions:
6.5.1 it 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 disposal;
6.5.2 it has a subscription price per share such that the aggregate
price payable on complete exercise equals the aggregate price
which would have been payable on complete exercise of the Old
Option; and
6.5.3 it is otherwise identical in terms to the Old Option.
The New Option shall for all other purposes of this Plan be treated as
having been acquired at the same time as the Old Option in
consideration of the release of which it is granted and where any New
Options are granted pursuant to this Rule 6.5 Rules 5, 6, 7, 8 and 10
and all definitions in Rule 1 as appropriate in those Rules shall in
relation to the New Options be construed as if references to the
Company and to the Shares were references to the company whose share
capital includes shares over which the New Option has been granted and
to the shares in that company but references to a Participating Company
shall continue to be construed as if references to the Company were
references to Huntingdon Life Sciences Group plc. Where in accordance
with this Rule 6.5 Old Options are released and New Options granted the
New Options shall not be exercisable in accordance with Rules 6.2, 6.3
and 6.4 above by virtue of the event by reason of which the New Options
were granted.
6.6 In the event that notice is given to the shareholders of the Company of
a resolution to be proposed for the voluntary winding up of the Company
any Option Holder may serve notice to exercise his Subsisting Options
at any time up to the passing of the resolution provided that any such
notice to exercise shall only be effective if the resolution is passed.
If such resolution is duly passed all Options shall, to the extent that
they have not been exercised, lapse.
6.7 For the purposes of this Rule 6 other than Rule 6.5 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.
6.8 The exercise of an Option pursuant to the preceding provisions of
this Rule 6 shall be subject to the provisions of Rule 8 below.
7 VARIATION OF SHARE CAPITAL
In the event of any variation in the share capital of the Company by
way of capitalization or rights issue or any consolidation sub-division
or reduction of capital or otherwise by the Company the number of
Shares subject to any Option and the Subscription Price for each of
those Shares shall be adjusted by the Remuneration Committee subject
(except in the case of a capitalization) to written confirmation by the
Auditors that in their opinion such adjustment is fair and reasonable
provided that:
7.1 the aggregate amount payable on the exercise of an Option in full is not
increased; and 7.2 the Subscription Price for a Share is not reduced
below its nominal value.
8 MANNER OF EXERCISE OF OPTIONS
8.1 No Option shall be exercisable save in accordance with the then current
Model Code for Securities Transactions by Directors of Listed Companies
issued by the London Stock Exchange.
8.2 Subject to the provisions of Rule 5 and this Rule 8 an Option may be
exercised at any time in whole or in part but not unless the
Remuneration Committee otherwise permits in respect of less than 10 per
cent of the Shares the subject of the original Option (where relevant,
as adjusted in accordance with Rule 2.9.1) unless such smaller
percentage represents all the remaining Shares under the Option by the
Option Holder or (as the case may be) his personal representatives
giving a notice of exercise to the Company substantially in the form
set out in Schedule 3 accompanied by the appropriate payment and the
relevant Option certificate and shall be effective on the date of its
receipt by the Company ("exercise date") provided that wherever
relevant any conditions imposed pursuant to Rule 2.7 and, where
appropriate Rule 2.8 shall first have been fulfilled to the
satisfaction of the Remuneration Committee.
8.3 No Option shall be capable of being quoted or dealt in on any stock
exchange.
8.4 Subject to Rules 9.2 and 9.3, Shares shall be allotted and issued
pursuant to a notice of exercise within 42 days of the exercise date
(or such date which is the later of the date on which (a) the payment
referred to in Rule 9.2 is received by the relevant company; and (b)
the Board is satisfied that the sale referred to in Rule 9.3 has been
completed. 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
and will be subject to all the provisions of the Articles of
Association of the Company relating to voting, dividends, transfer or
otherwise.
8.5 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 representing the balance shall be issued
by the Company as soon as possible after the partial exercise.
8.6 Where relevant, within 28 days after Shares have been allotted pursuant
to the exercise of an Option the Company shall make application to the
Council of the London Stock Exchange for the admission to the Official
List of the Shares allotted and issued following such exercise.
8.7 It shall be a condition of participation in the Plan that in the event
of an Option Holder ceasing to be an Eligible Participant (for whatever
reason) he shall not be entitled to any compensation whatsoever by
reason of any termination or alteration of rights or expectations under
the Plan whether such compensation is claimed by way of damages for
wrongful dismissal or breach of contract or for loss of office or
otherwise howsoever. Participation in this Plan by an Option Holder is
a matter entirely separate from any pension right or entitlement he may
have and from his terms or conditions of employment and participation
in this Plan shall in no respects whatever affect in any way an Option
Holder's pension rights or entitlement or terms or conditions of
employment.
9 TAXATION
9.1 If a Tax Liability arises in respect of an Option the Company shall be
entitled to deduct to the extent permitted by law such amount(s) from
any payment due to be made by the Company or any company which controls
or is controlled by the Company to or in respect of the Option Holder
in respect of that Option during the same calendar month or other
relevant period in which the event occurs and/or any subsequent
calendar month or such relevant period in order to satisfy and
discharge the Tax Liability whether or not such payment is of an income
or capital nature.
9.2 If and to the extent the Tax Liability referred to in Rule 9.1 is of
income tax which exceeds the amount from which deductions in respect
thereof can be made in any one period referred to in Rule 9.1 in
respect of the Option Holder concerned, that Option Holder shall pay or
reimburse the Company for the amount of the excess on demand or within
such period as may be specified in any written notice given by the
Company and the Company shall not be obliged to issue and allot any
Shares upon the exercise of an Option until it has received such
payment.
9.3 Where a Tax Liability arises in respect of the exercise of an Option,
the Board may, without prejudice to the Company's rights under Rule 9.1
and Rule 9.2, by written notice to the Option Holder concerned nominate
as his bare trustee any person (the "Bare Trustee") to sell such number
of Shares issued upon the exercise of the Option as may be required in
order to discharge the Tax Liability and any other liability (including
costs) connected with the said sale and the Bare Trustee shall pay an
amount equal to the Tax Liability to the Company and otherwise
discharge any other said liability to the extent that the net proceeds
from the said sale permit. The Company shall not be obliged to issue
and allot any Shares upon the exercise of an Option until the said sale
has been completed to the satisfaction of the Board.
10 ADMINISTRATION AMENDMENT AND TERMINATION
10.1 The Plan shall be administered by the Remuneration Committee whose
decision on all disputes shall be final.
10.2 The Board may from time to time make amendments to these Rules provided
that:
10.2.1 no amendment may detrimentally affect an Option Holder as
regards any Subsisting Option held by him on the date of the
amendment being made except with the consent in writing of
Option Holders who, assuming they exercise their Options in
full, would thereby become entitled to not less than three
quarters in nominal amount of all the Shares which would fall
to be allotted upon exercise in full of all Subsisting
Options; and
10.2.2 except with the prior sanction of the Company in general meeting no
such modification or variation shall extend the class of person
eligible for participation in the Plan or the grant of
Options or alter to the advantage of Option Holders (present or
future) Rules 2.1, 2.5, 2.7, 2.8, 2.9, 2.10, 3, 4 to 7, 8.7, 10.1
and this Rule 10.2 or the definitions of "Eligible Participant",
"Participating Company" or "Subscription Price" except for minor
amendments to benefit the administration of the Plan, to comply
with or take account of any proposed or existing legislation or
law or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Option Holders (present or future) or
for any Participating Company; and
10.2.3 written notice of any alteration made in accordance with this Rule
10.2 shall be given to all Option Holders.
10.3 The cost of establishing and operating the Plan shall be borne by the
Participating Companies in such proportions as the Board shall
determine.
10.4 The Company in general meeting or the Board may at any time resolve to
terminate this Plan in which event no further Options shall be granted
but the provisions of this Plan shall continue in force in relation to
Subsisting Options.
10.5 The Company shall at all times keep available sufficient authorised and
unissued Shares 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.
10.6 Any notice to be given pursuant to the terms of these Rules must be
given in writing to the party due to receive such notice at (in the
case of the Company) its registered office from time to time or (in the
case of an individual) his address as notified to the Company from time
to time. Notice must be delivered personally or sent by first class
pre-paid recorded delivery or registered post (air mail if overseas) or
by facsimile transmission and shall be deemed to be given in the case
of delivery on delivery and in the case of posting (in the absence of
evidence of earlier receipt) within 48 hours after posting (6 days if
sent by air mail) and in the case of facsimile transmission on
completion of transmission.
10.7 The Rules shall be governed by and construed in accordance with English
Law and English Courts shall have the exclusive jurisdiction as regards
any claim or matter arising in relation to the Rules.
<PAGE>
SCHEDULE 1
NOTICE OF OPERATION OF THE PLAN
& LETTER OF GRANT
Dear [ ]
THE HUNTINGDON LIFE SCIENCES GROUP INCENTIVE OPTION PLAN ("The Plan")
1 The Remuneration Committee has granted you an option over [ ] ordinary
shares [each] ("Shares") in the capital of Huntingdon Life Sciences
Group plc ("the Company") under and subject to the rules of the Plan
("the Option") which was approved and adopted by a resolution of the
shareholders of the Company on 3 June 1999. A copy of the rules of the
Plan is enclosed herewith.
2 You will only be able to exercise your option if in the accounting
period of the Company ending on [ ]:
2.1 the Performance Measure described below are achieved [; and
2.2 you satisfy the Personal Performance conditions described below.
If either the Performance Measure [(in accordance with the Vesting
Scale below)] or the Personal Performance Conditions are not satisfied
your Option will lapse and will be treated as if it had never been
granted.]
[If the Performance Measure is not achieved in full, the number of
Shares in respect of which your Option will remain in force will be
determined in accordance with the Vesting Scale also set out below. As
the Vesting Scale shows, your option will not be exercisable in respect
of any Shares if [describe by reference to the Vesting Scale the
circumstances in which the Option will not be exercisable at all].]
3 If you cease to be employed by [the Company] before [specify date on
which the Performance Measure Period ends] your Option will lapse in
its entirety.
4 The subscription price per Share payable on the exercise of the Option
is [ ]p. This subscription price is subject to adjustment under Rule 7
of the Plan if the Company's share capital is altered or re-organised,
in specified ways.
5 If after [specify date on which the Performance Measure Period ends]
your Option remains a Subsisting Option, an Option certificate for your
Option will be sent to you for the number of Shares that remain in your
Option.
6 Under the rules of the Plan ("the rules"), except in certain
circumstances the Option may not be exercised earlier than three years
from the Date of Grant.
7 [The Option may not be exercised unless the conditions attached to this
letter have been fulfilled to the satisfaction of the Remuneration
Committee except in certain circumstances permitted by the rules.]
8 The Option shall not be exercisable save in accordance with the then
current Model Code for Security Transactions by Directors of Listed
Companies issued by the London Stock Exchange.
9 You should note that any rights under Plan you may have will be
entirely separate from your contract of employment and you should refer
to Rule 8.7.
10 You may renounce the Option in whole or in part by signing (in the
presence of a witness) and returning this letter together with the
enclosed Option certificate to me before [date 21 days after the Date
of Grant].
11 Any expression defined in the rules shall have the same meaning in this
letter and if there is any conflict between this letter and the rules,
the rules will prevail.
Yours faithfully,
.....................
Secretary
PERFORMANCE MEASURE
VESTING SCALE
[PERSONAL PERFORMANCE CONDITIONS]
[NOTE: Any conditions imposed under Rule 2.8 must also be attached to this
letter]
RENUNCIATION
I [PRINT NAME] hereby renounce the Option [in whole]/[in respect of Shares]. I
am returning with this letter the certificate in respect of the Option referred
to above.
SIGNED as a DEED by
[NAME]
in the presence of:
Signature:
Name:
Address:
Occupation:
<PAGE>
SCHEDULE 2
Option Certificate Number:
- ---------------------------------------------------------------------------
Incorporated under the Companies Acts
Registered in England and Wales under Number 502370
TOTAL NUMBER OF ORDINARY SHARES OF 5p EACH
INCLUDED IN THIS OPTION (number)
- ---------------------------------------------------------------------------
This is to certify that (name) was granted an Option on
the [specify original date of grant] day of to
subscribe for ordinary shares of 5p each in the capital of the Company
("Shares") at a Subscription Price of [ ]per Share giving an aggregate
Subscription Price of(pound) upon the terms of the Huntingdon Life Sciences
Group Incentive Option Plan ("the Plan"). The Option may be exercised
only at the times and in the circumstances and manner permitted by the
rules of the Plan and cannot be transferred, assigned, charged, pledged or
otherwise disposed of or dealt with (other than its exercise in accordance with
the Rules). Any purported transfer, assignment, charge, pledge or other
disposal or dealing with (other than its exercise in accordance with the
Rules) shall cause the Option to lapse forthwith.
THE COMMON SEAL of
HUNTINGDON LIFE
SCIENCES GROUP plc
was affixed to this deed
in the presence of:
Director
Secretary
Date .........................
NOTE:
(1) A form of exercise on the Option is printed overleaf. This
certificate must be surrendered on the
exercise, in whole or in part, of the Option.
(2) The number and/or description of shares covered by this Option and/or
the Subscription Price may be varied in accordance with the Rules of
the Plan.
(3) Notice to exercise this Option must be given by [date no later
than the day before the tenth anniversary of the Date of Grant].
(4) [The right to exercise this Option shall be subject to the due
satisfaction of the conditions specified on the attached sheet.]
<PAGE>
SCHEDULE 3
Form of Exercise
(TO BE PRINTED ON REVERSE OF OPTION CERTIFICATE)
PLEASE READ THE NOTES AT THE FOOT OF THIS FORM
CAREFULLY BEFORE COMPLETING IT
The Secretary
Huntingdon Life Sciences Group plc
I, the undersigned, having become entitled so to do hereby exercise the Option
referred to overleaf in respect of ............... Shares comprised in the
Option upon the terms of the Huntingdon Life Sciences Group Incentive Option
Plan ("the Plan") and agree to accept the Shares to be allotted and issued
pursuant to this Form of Exercise subject to and in accordance with the
Memorandum and Articles of Association of the Company and hereby request you to
place my name on the Register of Members in respect thereof.
I enclose a remittance for (pound) being the aggregate Subscription Price
payable for the Shares in respect of which the Option is now exercised at the
Subscription Price per Share specified overleaf.
For the avoidance of doubt, I hereby agree that Rule 9 of the rules of the Plan
may be applied by the Company and the Board at their discretion in respect of
the Option hereby exercised.
If applicable, I hereby request you to despatch a balance certificate for the
Option to subscribe for any Shares included in the Option referred to overleaf
and not exercised on this occasion, by post at my risk to the address mentioned
below.
Signature .....................................
Surname ......................................
Forename(s) .................................
Address .......................................
...................................................
Note:
(1) Although the Option referred to overleaf is personal to the holder
named overleaf it may be exercised (subject to Rule 5.6) by his
personal representative(s) if he dies while it is still capable of
exercise provided the personal representative(s) does/do so before the
expiration of twelve months from the date of the holder's death or ten
years from the date of its grant (if sooner). If there are more than
one, each of the personal representatives must sign this form.
(2) Options must be exercised in respect of whole numbers of Shares. Please
indicate the number of Shares you wish to subscribe on this occasion
which must not exceed the number of Shares comprised in the Option. In
any event you will be deemed to have exercised your rights in respect
of that whole number of Shares which can be subscribed with the moneys
represented by your remittance.
(3) The remittance should be for an amount equal to the aggregate
Subscription Price, being the Subscription Price per Share shown
overleaf, multiplied by the number of Shares applied for.
(4) Please note that before any shares are allotted to you, any tax
liability that arises on the exercise of your Option may be required to
be satisfied by the Board.
Private & Confidential
DATED 12 JULY 1999
HUNTINGDON LIFE SCIENCES GROUP PLC (1)
and
J S BLOOR (TAMWORTH) LIMITED (2)
---------------------------------------------------------
AGREEMENT
for the sale of
Freehold Property
known as
Stamford Lodge, Altrincham Road
Wilmslow, Macclesfield
in the County of Cheshire
---------------------------------------------------------
<PAGE>
CONTENTS
Clause Page
1 Interpretation...................................................3
2 Sale and Purchase................................................3
3 Deposit..........................................................3
4 Completion.......................................................3
5 Application of the National Conditions...........................4
6 Title............................................................5
7 Transfer.........................................................7
8 Restrictions.....................................................7
9 Non-Merger.......................................................7
10 No Representations..............................................7
11 Value Added Tax.................................................8
12 Notices.........................................................8
13 Interest........................................................8
Schedule 1........................................................10
<PAGE>
THIS AGREEMENT is made 12 July 1999
BETWEEN:
(1) HUNTINGDON LIFE SCIENCES GROUP PLC whose registered office is at
Woolley Road Alconbury Huntingdon Cambridgeshire PE18 6ES ("the
Vendor")
(2) J S BLOOR (TAMWORTH) LIMITED (registered number 2147377) whose
registered office is at Ashby Road Measham Swadlincote Derbyshire DE12
7JP ("the Purchaser")
IT IS AGREED that:
Interpretation
1.1 In this Agreement unless the context otherwise requires:
(a) words importing any gender include every gender
(b) words importing the singular number also include the plural number and
vice versa
(c) words importing persons include firms companies and corporations and
vice versa
(d) references to numbered clauses and schedules are to the relevant
numbered clause in or schedule to this Agreement
(e) where any obligation is undertaken by two or more persons jointly
those persons shall be jointly and
severally liable in respect of that obligation
(f) the headings to the clauses and schedules shall not affect the
interpretation
1.2 In this Agreement unless the context otherwise requires the following
expressions shall have the following meanings:
(a) "Completion" means actual completion of the sale the subject of this
Agreement
(b) "Completion Date" means 1st September 1999
(c) "Completion Money" means the balance of the Price payable on Completion
(d) "National Conditions" means the National Conditions of Sale
(20th Edition) and all references in the National Conditions
to "the property" shall be deemed to be references to the
Property;
(e) "Nominated Account" means the Vendor's Solicitors' client
account number 0660947 at Lloyds Bank plc Colmore Row Branch
Birmingham sort code 30-00-03 or such other client account or
accounts of the Vendor's Solicitors as they may specify
(f) "Price" means the sum of(pound)4,250,000 (four million two hundred and
fifty thousand pounds)
(g) "Property" means the property described in the Transfer
(h) "Purchaser's Solicitors" means edge ellison of Rutland House
148 Edmund Street Birmingham B3 2JR or such other solicitors
as the Purchaser shall appoint in relation to the purchase of
the Property
(i) "Title Matters" means any covenants easements rights or other
matters affecting the Property or of which the Property has
the benefit which are contained or referred to in the
documents listed in the Transfer but the Property is not sold
subject to Entry Numbers 5, 6 and 7 of the Proprietorship
Register or Entry Numbers 4, 5, 6 and 7 of the Charges
Register of CH410069.
(j) "Transfer" means the transfer of the Property by the Vendor under this
Agreement in the form annexed
to Schedule 1
(k) "VAT" means Value Added Tax and includes any future tax of a like
nature
(l) "Vendor's Solicitors" means Wragge & Co of 55 Colmore Row
Birmingham B3 2AS or such other solicitors as the Vendor shall
appoint in relation to the sale of the Property
(m) "Working day" has the meaning given by the National Conditions (as
amended by this Agreement)
(n) "1994 Act" means the Law of Property (Miscellaneous Provisions) Act 1994
Sale and Purchase
2.1 The Vendor will sell and the Purchaser will purchase the Property
for the Price on the terms of this Agreement
Deposit
3.1 A deposit of (pound)425,000 (four hundred and twenty five thousand
pounds) shall be paid on exchange of this Agreement to the Vendor's
solicitors to be held as agent for the Vendor
Completion
4.1 The sale and purchase shall be completed and the Completion Money paid
on or before 1.00p.m. on the
Completion Date
4.2 The Completion Money shall be paid by electronic funds transfer to the
Nominated Account
4.3 The Completion Money shall be deemed to have been received when
the bank or banks to which it was
transferred has received it
4.4 The Vendor shall not be required to complete before 9.30 am or after
5.30 p.m. on a Working day nor
at any time on a day which is not a Working day
4.5 If Completion occurs after 2 p.m. on a Working day (or at any time
on a day which is not a Working
day) then for the purposes of the National Conditions 6 7 and 8
Completion shall be deemed to have
occurred at 9.30 am on the next Working day
Application of the National Conditions
5.1 The Property is sold subject to the National Conditions so far as they
are not varied by or inconsistent with this Agreement and are
applicable to a sale by private treaty
5.2 National Conditions 1(6), 3, 5(3), 5(4), 5(5), 6(1), 6(2), 8(4),
11, 15(2), 15(3) shall not
apply to this Agreement
5.3 The prescribed rate of interest specified in definition (4) of the
National Conditions shall for the purposes of the National Conditions
be four per cent per annum above the Base Lending Rate from time to
time of Lloyds Bank plc
5.4 In National Condition 6(3) the words "In any other case" shall be
deleted in the first line
5.5 The provisos (i) and (iii) to National Condition 7(1) shall not apply
to this Agreement
5.6 For the purposes of National Conditions 6 and 7 the Vendor shall be
entitled in respect of the same period of time both to be paid interest
and to enjoy the income of the Property but shall not be entitled to be
paid interest more than once on the same sum of money
5.7 The words "notwithstanding that the Vendor may not have been lawfully
entitled to allow the Purchaser into occupation of the Property prior
to Completion" shall be added at the end of National Condition 8(1)(ii)
5.8 The word "not" shall be deleted from National Condition 8(3)
5.9 Where the Purchaser is allowed access to or occupation of the Property
prior to Completion in order to carry out works or installations the
provisions of National Conditions 8(1), 8(2) and 8(3) (as varied above)
shall apply and in addition:
(a) the Purchaser shall have no claim against the Vendor for and
shall indemnify the Vendor in respect of all liabilities costs
and expenses arising from the death of or injury to any person
at the Property or the loss of or damage to any property real
or personal and
(b) the Purchaser shall upon rescission of this Agreement if and
to the extent required in writing by the Vendor remove any
installations made by the Purchaser and reinstate the Property
to as good a state of repair and condition as it was in
immediately before the Purchaser took occupation or access
5.10 The Vendor shall for the purposes of National Condition 22 be deemed to
be ready and willing to fulfil the Vendor's own outstanding obligations
under this Agreement notwithstanding that of the date of service of a
notice under National Condition 22 the Vendor may be a contracting
purchaser of the Property or the Property may be subject to a charge or
mortgage which is to be discharged on Completion
5.11 In National Conditions 22(2) and 22(3) the words "10 Working days"
shall be substituted for the
words "16 Working days"
Title
6.1 Huntingdon Life Sciences Limited is registered at HM Land Registry as
Proprietor of the Property with Absolute Title under Title Number
CH410069 and is currently pending registration in respect of a small
additional piece of land under title number CH438940
6.2 Huntingdon Life Sciences Limited has contracted to sell the
Property to the Vendor and the Vendor
shall procure the transfer of the Property to the Purchaser on
Completion
6.3 The Property is sold subject to and where appropriate with the benefit
of:
(a) all matters capable of registration as Local Land Charges or
otherwise whether registered or not and every charge, notice,
direction order, restriction, condition and other matter of
whatsoever nature affecting the Property capable of discovery
by search or enquiry of any local or other authority or
statutory undertaker and the Purchaser shall be deemed to
purchase with full knowledge thereof whether or not any search
or enquiry has been made
(b) all notices served and proposals requirements or agreements made by
or (as the case may be) with any
competent authority
(c) all overriding interests as defined in section 70(1) of the Land
Registration Act 1925 as amended
(d) the Title Matters
6.4 The Property is sold with vacant possession
6.5 The Purchaser shall accept the Title of the Vendor to the Property
which has been deduced in full to the Purchaser and shall not raise any
requisition or objection in respect of the Title to the Property except
in respect of matters arising in the period between the date of this
Agreement and Completion
6.6 The Purchaser is deemed to have inspected the Property whether or not
the Purchaser has in fact done so and shall be deemed to buy with full
knowledge in all respects of the authorised use of the Property for the
purposes of the legislation relating to the Town and Country Planning
legislation
6.7 The Vendor shall sell with full title guarantee
6.8 The Vendor will procure at its expense the removal of Entry Numbers 5,
6 and 7 of the Property Register and Entry Numbers 4, 5, 6 and 7 of the
Charges Register of title number CH410069
6.9 The Vendor will procure at its expense cancellation of the existing
Agreements with Anthony William Whittaker, Michael Arthur Sachs and T
Corniell Landscapes and Maintenance
6.10 The Vendor will ensure that the Land Certificate for CH438940 is
delivered to the Purchaser if received by the Vendor or its solicitors
and will use all reasonable endeavours to complete the registration of
that title in accordance with the application it has lodged
Transfer
7.1 The Transfer shall be in the form attached to Schedule 1
7.2 The Purchaser shall at the Purchaser's expense prepare execute stamp
and deliver to the Vendor within seven days after Completion a
duplicate of the Transfer
7.3 The Vendor shall only be required to execute one Transfer of the whole
of the Property
Restrictions
8.1 The Purchaser shall not be entitled to assign charge or mortgage this
Agreement
The Vendor shall not be required to convey transfer or assign the
Property to any person other than the Purchaser
Non-Merger
9.1 The obligations of the Vendor and the Purchaser shall continue
notwithstanding Completion insofar as
they remain to be performed and observed
No Representations
10.1 This Agreement incorporates the entire contract between the parties and
the Purchaser acknowledges that the Purchaser has not entered into this
Agreement in reliance on any advertisement or other matter issued by
the Vendor or the Vendor's agents or in reliance on any statements or
representations made to the Purchaser by either of them save those
written statements of the Vendor's Solicitors made before the date of
this Agreement in reply to any written enquiries raised by the
Purchaser's Solicitors
10.2 If there are any side letters relating to this transaction it is
expressly agreed that although they may have legal force as
representations collateral contracts or in some other way they do not
form part of this Agreement
Value Added Tax
11.1 The Vendor will not elect to waive exemption to VAT which is not
charged on the Completion Money
12 Notices
12.1 Any notice or other communication to be given to or made to the Vendor
shall be addressed to the Vendor (marked for the attention of The Group
Company Secretary) and delivered to its registered office at Woolly
Road Alconbury Huntingdon Cambridgeshire PE18 6ES or such other address
in England or Wales and/or marked for such other person's attention as
may be notified by the Vendor to the Purchaser in writing for this
purpose from time to time
12.2 Any notice or other communication to be given or made to the Purchaser
shall be addressed to the Purchaser (marked for the attention of the
Company Secretary) and delivered to the address set out on page 1 or
such other address in England or Wales and/or marked for such other
person's attention as may be notified by the Purchaser to the Vendor in
writing for this purpose from time to time
12.3 Any notice or other communications shall be in writing, may be by first
class prepaid recorded delivery post or personal delivery and (unless
the contrary shall be proved) shall be deemed to have been given or
made if by first class prepaid recorded delivery post, 2 Working days
after posting and if personally delivered, upon delivery
13 Interest
Interest at the prescribed rate shall be charged on any amounts payable
under the terms of this Agreement from the time at which such amount
becomes payable until the time at which payment is actually received
whether before or after judgment
AS WITNESS the hands of the parties
SIGNED by .................................. )
for and on behalf of the Vendor )
SIGNED by .................................. )
for and on behalf of the Purchaser )
<PAGE>
Schedule 1
Form of Transfer
<PAGE>
1. Stamp Duty
Place "X" in the box that applies and complete the box in the appropriate
certificate.
I/We hereby certify that this instrument falls within category in the
Instruments) Regulations 1987
Schedule to the Stamp Duty (Exempt
It is certified that the transaction effected does not form part of a
larger transaction or of a series of transactions in respect
of which the amount or value or the aggregate amount or value of the
consideration exceeds the sum of
2. Title Number(s) of the Property (leave blank if not yet registered)
CH410069 CH438940
3. Property
Stamford Lodge, Altrincham Road, Winslow
Parcel of Land to the east of Altrincham Road, Wilmslow
4. Date
5. Transferor (give full names and Company's Registered Number if any)
Huntingdon Life Sciences Limited whose registered office is at Woolley Road,
Alconbury, Huntingdon, Cambridgeshire
PE18 6ES (Company Registration No. 1815730)
6. Transferee for entry on the register (Give full names and Company's
Registered Number if any; for Scottish Co.
J S Bloor (Tamworth) Limited (Company Registration No. 2147377)
7. Transferee's intended address(es) for service in the U.K. (including
postcode) for entry on the register
Ashby Road, Measham, Swadlincote, Derbyshire DE12 7JP
8. The Transferor transfers the property to the Transferee.
9. Consideration (Place "X" in the box that applies. State clearly the currency
unit of other than sterling. If none of the boxes applies, insert an appropriate
memorandum in the additional provisions panel.)
The Transferor has received from the Sub Vendor for the property the sum
of (in words and figures) Four million two hundred and fifty thousand
pounds ((pound)4,250,000) and the Sub Vendor has (insert other receipt
as appropriate) received from the Transferee the sum of Four million two
hundred and fifty thousand pounds ((pound)4,250,000)
The Transfer is not for money or anything which has a monetary value
10. The Transferor transfers with (place "X" in the box which applies and
add any modifications)
provided always that:
Section 2(1)(b) of the Law of Property (Miscellaneous Provisions) Act 1994
shall apply as if the words "will at the cost of the person to whom the
disposition is made" were substituted for the words "will at its own cost"
11. Declaration of trust Where there is more than one transferee, place
"X" in the appropriate box.
12. Additional Provision(s) Insert here any required or permitted statement,
certificate or application and any
Transferee's obligations:
12.1 The Transferee agrees with the Transferee and the Transferee's successors
in title shall at all times hereafter comply with the covenants, conditions
and matters referred to in the title registers of the above title number and
shall indemnify and keep indemnified the Transferor against all actions, costs,
claims, demands, losses and proceedings in respect of any non-compliance.
13. The Transferors and all other necessary parties should execute this transfer
as a deed using the space below. Forms of execution are given in Schedule 3 to
the Land Registration Rules 1925. If the transfer contains transferee's
covenants or declarations or contains an application by them (e.g. for a
restriction), it must also be executed by the Transferees.
EXECUTED as a DEED )
by the Transferor acting by )
two directors or one director )
and its secretary. )
......... .......................................
......... Director
......... .......................................
......... Director / Secretary
EXECUTED as a DEED )
by the Transferee acting by )
two directors or one director )
and its secretary. )
......... .......................................
......... Director
......... .......................................
......... Director / Secretary
1. Continued from Form Title number(s)
TRI CH410069 and CH438940
2. Before each continuation, state panel to be continued, e.g. "Panel 12
continued".
"Panel 12 continued"
12.2 The Sub Vendor referred to in box 9 is :
Huntingdon Life Sciences Group plc whose registered office is at Woolley
Road, Alconbury, Huntingdon, Cambridgeshire PE17 5HS
(Registered No. 502370).
DATED 24 December 1999
HUNTINGDON LIFE SCIENCES GROUP PLC
-and-
ROGER DEVLIN
EXECUTIVE'S UNDERTAKING
Charles Russell
8-10 New Fetter Lane
London EC4A 1RS
Tel: 0171 203 5000
Fax: 0171 203 0200
<PAGE>
THIS AGREEMENT is made on 24 December 1999
BETWEEN:
(1) HUNTINGDON LIFE SCIENCES GROUP PLC whose registered office is at
Woolley Road, Alconbury, Huntingdon, Cambridgeshire, PE17 5HS (the
"Company"); and
(2) ROGER DEVLIN of 400 Aldridge Road, Great Barr, Birmingham B44 8B1L
(the "Executive")
which agreement is entered into in consideration (a) of the Company entering
into an agreement with Rittle Limited (the "Consultancy Agreement") today for
the provision of consultancy services (the "Services") and (b) of the payment to
the Executive of one pound ((pound)1) receipt of which the Executive hereby
acknowledges.
IT IS AGREED as follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement unless the context otherwise requires the
following expressions shall have the following meanings:
"Associated Company" means:
(a) a company which is not a Subsidiary of the
Company but whose issued equity share
capital (as defined in s744 of the Companies
Act 1985) is owned as to at least 20% by the
Company or one of its Subsidiaries; and
(b) a Subsidiary (as defined below);
"Board"
means the board of directors of the Company for the
time being;
"Group"
means the Company and its subsidiaries and Associated
Companies for the time being
and "Group Company" means any one of them;
"Intellectual Property"
all inventions (whether patentable or not) patents,
utility models, designs (both registered or
unregistered), copyright, database right, trade and
service marks (both registered or unregistered)
together with all rights to the grant of and
applications for the same and including all similar
or analogous rights throughout the world and all
future rights of such nature;
"Subsidiary"
means a Subsidiary within the meaning of Section 736
Companies Act 1985, as amended.
1.2 Any reference to a statutory provision shall be deemed to include
a reference to any statutory modification or re-enactment of it.
1.3 The headings in this agreement are for convenience only and shall
not affect its construction or interpretation.
1.4 References in this agreement to a person include a body corporate
and an incorporated association of persons and references to a
company include any body corporate.
1.5 Where appropriate, references to the Executive include his personal
representatives.
2. CONFIDENTIALITY
2.1 The Executive is aware that in the course of providing the
Services he will have access to and be entrusted with information
in respect of the business financing, dealings, transactions,
research methods and processes, technical know-how and affairs of
the Company, the Group, and of clients of the Company and of the
Group, all of which information is or may be confidential.
2.2 The Executive undertakes to the Company that throughout the term
of the Consultancy Agreement and after the termination of the
Consultancy Agreement the Executive shall treat all information
which may be created by him or which may be received by him in the
course of providing the Services in confidence and shall not
disclose such information to any person or use such information
other than for the purpose of providing the Services PROVIDED THAT
the above obligations shall not apply to information which:-
2.2.1 comes into the public domain otherwise than by the breach of the
Executive's obligations under this agreement; or
2.2.2 is disclosed to the Executive by a third party who has not received
it directly or indirectly from the Company or any other Group Company;
2.2.3 or must be disclosed by any applicable law, to the extent of such
required disclosure.
2.3 In respect of information received by the Executive in the
course of or for the purpose of
performing services to third parties, the Executive shall comply
with the terms of all undertakings given by the Company and/or any
Group Company to such third parties as if such undertaking were
given by the Executive. The Company shall give to the Executive a
copy of each such undertaking which shall be signed by the Company
and the Executive for the purpose of identification.
3. INTELLECTUAL PROPERTY
3.1 If the Executive makes or participates in making any invention or
any design (whether registerable or not) or any work in which
copyright or database right subsists, in the course of providing
the Services, and which relates to or is useful in connection with
the business of the Company, any Group Company or an Associated
Company, the Executive shall disclose such invention, design
or work to the Company immediately. In the case of such an invention
the Executive shall give the Company full particulars of the invention
together with all information, data (in all forms
and in all media) drawings and models embodying or relating to the
invention and in the case of designs and copyright works, a copy of
all such designs and works.
3.2 All rights in Intellectual Property which may be created by the
Executive in the course of providing the Services shall be the
sole and exclusive property of the Company and the Executive
hereby assigns all such Intellectual Property to the Company by
way of present and future assignment with full title guarantee.
3.3 To the extent permissible by law, the Executive waives any moral
rights which he may have in respect of works of which he is an
author if such works are created in the course of providing the
Services.
3.4 In the case of registerable rights the Executive shall if
requested by the Company execute all documents and do all things
which may be necessary or desirable for obtaining the best
possible registerable protection in territories specified by the
Company, and in respect of all Intellectual Property the Executive
shall execute all documents and do all such things as may be
necessary or desirable for perfecting assignment of such
Intellectual Property under clause 3.2 above.
3.5 The Executive hereby irrevocably appoints the Company to be his
attorney in his name to sign, execute any instrument or do
anything and generally to use his/her name for the purpose of
giving to the Company the full benefit of the provisions of this
clause and in favour of any third party a certificate in writing
signed by any director or the secretary of the Company that any
instrument or act falls within the authority conferred by this
clause shall be conclusive evidence that such is the case.
4. OBLIGATIONS OF THE EXECUTIVE
4.1 During the continuance of the Consultancy Agreement the Executive
undertakes that he will:
4.1.1 not without the prior consent of the Company be concerned or
interested in any business which competes or conflicts with the
business of the Company or any Group Company and in
respect of which the Services are being provided;
4.1.2 disclose to the Board any interest he has which competes
or conflicts or which might give rise to a conflict of
interest with the business of the Company or any Group
Company;
4.1.3 not participate in any discussion or decision of the
Board which relates to any matter in respect of which
the Executive has a competing or conflicting interest;
4.1.4 at all times conduct himself in the best interest of the
Company and the Group, including but not limited to
bringing to the attention of the Board any opportunity
which comes to his attention and which he recognises
might assist in the further development of the business
of the Company and/or the Group.
5. POST-TERMINATION RESTRICTIONS
5.1 Definitions
In this clause:
5.1.1 "Termination Date" means the date on which the employment terminates;
5.1.2 "Person" includes any company, firm, organisation or other entity;
5.1.3 "Area" means any country in the world where on the Termination
Date the Company was supplying
services;
5.1.4 "Business" means any business carried on by the Company
or any Group Company which relates to the provision of
pre-clinical, early clinical and/or non-clinical
biological safety evaluation services to the
pharmaceutical and biotechnology, agrochemical and other
chemical industries;
5.1.5 "Client" means any Person to whom the Company or a Group
Company supplied during the 6 months preceding the
Termination Date and with whom at any time during such
period the Executive was actively involved in the course
of his engagement;
5.1.6 "Prospective Client" means any Person with whom the
Company or a Group Company had negotiations or
discussions regarding the possible supply of services
during the 6 months immediately preceding the
Termination Date and with whom at any time during such
period the Executive was actively involved in the course
of his engagement.
5.2 The Executive covenants with the Company that it shall not at any
time during the continuance of the Consultancy Agreement or for a
period of 6 months after the termination of it solicit or
endeavour to solicit whether directly or indirectly any senior
employee of the Company or a Group Company to leave and with whom
at any time during the period of 6 months prior to such
termination the Executive was actively involved (whether in breach
of the terms of their contract or not).
5.3 The Executive covenants with the Company that it shall not for a
period of six months from the Termination Date in the Area:
5.3.1 canvass or solicit business for services similar to
those being provided by the Company or a Group Company
as at the Termination Date from any Client or
Prospective Client;
5.3.2 seek to do business or deal with any Client or
Prospective Client in respect of services similar to
those being provided by the Company or a Group Company
as at the Termination Date; or
5.3.3 canvass or solicit business from any supplier of the
Company or a Group Company with whom the Executive was
actively involved during the 6 months ending on the
Termination Date or persuade such supplier to cease to
supply, or to restrict or vary the terms of supply to
the Company or a Group Company or otherwise interfere
with the relationship between such a supplier and the
Company or a Group Company.
5.4 The Executive shall not for a period of 6 months from the
termination of this agreement directly or indirectly be interested
or concerned in any business which is carried on in the Area and
which is competitive or likely to be competitive with the Business
being carried on at the Termination Date and with which the
Executive was actively involved during the 6 month period ending
on the Termination Date.
For this purpose, the Executive is concerned in a business if:
(a) he carries it on as principal or agent; or
(b) he is a partner, director, employee, secondee, consultant
or agent in, of or to any Person
who carries on the business; or
(c) he has any direct or indirect financial interest (as
shareholder or otherwise) in any
Person who carries on the business.
6. WARRANTY
6.1 The Executive warrants to the Company that:
6.1.1 the provision of the Services shall not:-
(a) infringe the Intellectual Property of any third party;
(b) involve the use of information in breach of obligations owed to or rights
held by any third party; 6.1.2 the Company will not infringe the Intellectual
Property of any third party by exercising all of the
rights of the owner of the Intellectual Property
assigned by the Executive to the Company under this
agreement.
6.1.3 The Executive is not bound by any legally enforceable
obligations owed to persons other than the Company or
the Group which would prevent the Executive from
complying with the terms of this agreement.
7. SEVERABILITY
If any of the provisions of this agreement become invalid or unenforceable
for any reason by virtue of applicable law the remaining provisions shall
continue in full force and effect and the Company and the Executive hereby
undertake to use all reasonable endeavours to replace any legally invalid
or unenforceable provision with a provision which will promise to the
parties (as far as practicable) the same commercial results as well
intended or contemplated y the original provision.
8. RETURN OF PROPERTY
8.1 The Executive shall deliver to the Company on request or on
termination of the Consultancy Agreement all drawings, designs,
plans, documents, paper models, materials, disks or any other
property (in whatever format) belonging to the Company, the Group
and/or parties contracting with the Company and/or the Group which
may be acquired, be in the possession of, or be created by the
Executive in the course of providing the Services.
8.2 The Executive shall, immediately on termination of the Consultancy
Agreement, provide to the Company all details required to be
disclosed pursuant to clause 3 together with all material in
whatever form which describes or embodies the concepts or designs
which are so disclosed.
9. LAW
This agreement shall be construed in accordance with and governed by
English law.
SIGNED by )
on behalf of HUNTINGDON LIFE SCIENCES GROUP PLC )
)
in the presence of:- )
Witness signature:
Name:
Address:
Occupation:
SIGNED by ROGER DEVLIN )
in the presence of:- )
Witness signature:
Name:
Address:
Occupation:
DATED 24 December 1999
HUNTINGDON LIFE SCIENCES GROUP PLC
-and-
RITTLE LIMITED
MANAGEMENT SERVICES AGREEMENT
Charles Russell
8-10 New Fetter Lane
London EC4A 1RS
Tel: 0171 203 5000
Fax: 0171 203 0200
<PAGE>
THIS AGREEMENT is made on 24 December 1999
BETWEEN:
(1) HUNTINGDON LIFE SCIENCES GROUP PLC whose registered office is at
Woolley Road, Alconbury, Huntingdon, Cambridgeshire PE17 5HS (the
"Company"); and
(2) RITTLE LIMITED whose registered office is at 55 Gower Street, London
WC1E 6HQ (the "Consultant").
IT IS AGREED as follows:
A. The Consultant is engaged in business offering corporate advisory
consultancy services to companies
and has considerable skill, knowledge and experience in that field.
B. In reliance upon that skill, knowledge and experience, the Company
wishes to engage the Consultant to provide the services of the
Executive as a non-Executive Director to the Business (as such terms
are defined below) on the terms set out in this agreement.
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement unless the context otherwise requires the
following expressions shall have the following meanings:
"Associated Company" means:
(a) a company which is not a Subsidiary of the
Company but whose issued equity share
capital (as defined in s744 of the Companies
Act 1985) is owned as to at least 20% by the
Company or one of its Subsidiaries; and
(a) a Subsidiary (as defined below)
"Board"
the board of directors for the time being of the Company;
"Business"
the provision of pre-clinical, early clinical and
non-clinical biological safety evaluation services to
the pharmaceutical, biotechnology, agrochemical and
other chemical industries;
"Commencement Date"
7th September 1999
"Executive"
Roger Devlin
"Group"
means the Company and its subsidiaries and Associated
Companies for the time being
and "Group Company" means any one of them;
"Intellectual Property"
all inventions (whether patentable or not) patents,
utility models, designs (both registered or
unregistered), copyright, database right, trade and
service marks (both registered and unregistered)
together with all rights to the grant of and
applications for the same and including all similar or
analogous rights throughout the world and all future
rights of such nature;
"Services"
means including but not limited to, (a) attending board
meetings (b) being available to consult on the business
affairs of the Company (c)ensuring effective management
and financial probity;
"Subsidiary"
means a Subsidiary within the meaning of s736 of the
Companies Act 1985;
"Working Day"
means a day other than a Saturday, Sunday or bank or
other public holiday in England.
1.2 Any reference to a statutory provision shall be deemed to include
a reference to any statutory
modification or re-enactment of it.
1.3 The headings in this agreement are for convenience only and shall
not affect its construction or interpretation.
1.4 References in this agreement to a person include a body corporate
and an incorporated association of persons and references to a
company include any body corporate.
2. TERM
2.1 This agreement shall commence with effect from the Commencement
Date and shall continue unless and until terminated by either the
Company or the Consultant giving to the other not less than 3
months notice in writing, at any time, subject to earlier
termination as provided below.
3. SERVICES
3.1 With effect from the Commencement Date, the Consultant shall
provide the Services to the Company and the Group and such other
services consistent with the Services as the Company may
reasonably require of the Consultant from time to time.
3.2 The Consultant shall provide the Services through the Executive.
3.3 The Consultant shall procure that the Executive will make himself
available to the Company at such locations and times as may be
agreed between the Company and the Executive.
3.4 The Consultant shall procure that the Executive will:
3.4.1 comply with all reasonable directions from time to time
given to him in connection with the provision of the
Services and shall keep the Company and the Board
regularly informed and shall give to the Company and the
Board such information regarding the provision of the
Services as the Company and/or the Board may reasonably
require;
3.4.2 comply (and procure that his spouse and minor children
comply) with all applicable rules and regulations of the
London Stock Exchange, the New York Stock Exchange, the
US Securities Exchange Commission and any codes of
conduct of the Group for the time being in force and of
any other relevant regulatory authority.
3.4.3 not directly or indirectly during the currency of
this agreement be employed by or perform any
services for or be interested in any manner in any
other business which is or may be
competitive with the Company or the Group except
with the consent in writing of the
Company or as holder or beneficial owner (for
investment purposes only) of any class
of securities in a company if those securities are
listed or dealt in on a recognised
investment exchange (as defined by section 207 (1)
Finance Services Act 1986) and where the Consultant
and the Executive (together with the Executive's spouse,
children, parents and parents' issue) together
neither hold nor are beneficially
interested in more than five per cent of that class.
3.4.4 keep the Company reasonably informed of his whereabouts
and telephone number or other means by which the
Executive can be contacted easily at short notice.
3.5 The Consultant will ensure that the Executive completes and will
be responsible for completing the Services including returning all
drawings, designs, plans, documents, paper, models, materials,
disks or any other property, in whatever format, belonging to the
Company, the Group and/or clients of the Company or the Group. The
Consultant will also provide all details and complete all
documentation and procure that the Executive provides all details
and completes all documentation which may be necessary to comply
with clause 8 below.
4. DUTIES OF THE CONSULTANT
4.1 The Consultant shall procure that the Executive will:
4.1.1 perform the Services with due diligence and in a safe
and competent manner and acquaint himself with and
comply with any working practice's rules or procedures
applicable to others (whether independent contractors or
employees of the Company or of the Group) at any
location where the Executive is performing the Services
(whether or not at the Company's premises);
4.1.2 act in and use his best endeavours to protect and
promote the interests of the Company and, where
consistent with them, the Group, in accordance with the
general policy and directions of the Company;
4.1.3 provide the full benefit of his knowledge, expertise and
skill in connection with the provision of the Services
and devote his full time, attention and abilities to the
Company and the Group at such times as the Executive is
required to provide the Services pursuant to clause
3(3).
5. FEE
5.1 The Company shall pay a fee to the Consultant at a rate of
(pound)20,000 per annum (plus VAT if appropriate) upon production
of a valid invoice in accordance with clause 5(2) below (the
"Fee") .
5.2 The Consultant shall invoice the Company on the last day of
September 1999 and thereafter on 1st January, 1st April, 1st July
and 1st October in any year for the Fee incurred in respect of
that quarter. The Company shall pay the invoice within 30 days of
receipt.
6. EXPENSES
6.1 The Company shall, in addition to payment of the fee, reimburse
the Consultant, on production of such vouchers or other evidence
as the Company may reasonably require, any reasonable travelling,
other expenses which are reasonably and properly incurred by the
Executive in the course of providing the Services.
6.2 The amount of any expenses shall either be included by the
Consultant in its invoice submitted at the end of each quarter or
as a separate claim at the end of each month and the Company shall
reimburse the Consultant within 30 days of receipt of the invoice.
7. CONFIDENTIAL INFORMATION
7.1 The Consultant undertakes to the Company that throughout the
period of and after the termination of this agreement it shall
treat as secret and confidential and shall procure that the
Executive shall treat as secret and confidential any information
which may be received by the Consultant, all work performed by the
Executive in the course of providing the Services which comes to
the knowledge of the Consultant and/or the Executive in the course
of or in connection with the provision of the Services (the
"Information").
7.2 The Consultant also undertakes, and shall procure that the
Executive shall, not at any time nor for any reason disclose or
permit to be disclosed to any person or otherwise make use of or
permit to be made use of the Information other than for the
purpose of providing the Services to the Company and/or the Group.
7.3 The restrictions contained in clauses 7(1) and 7(2) above shall
cease to apply to any Information which:
7.3.1 may come into the public domain otherwise than by breach of the
Consultant or the Executive of the
obligations set out in this clause; or
7.3.2 is disclosed to the Consultant or the Executive by a third party
who has not received it either directly or indirectly from the
Company; or
7.3.3 must be disclosed by any applicable law, to the extent of such
required disclosure.
7.4 In respect of Information divulged to the Consultant or the
Executive in the course of or for the
purpose of performing services on behalf of the Company or the
Group for third parties, the Consultant shall comply and shall
procure that the Executive shall comply with the terms of all
undertakings given by the Company to such third parties as if such
undertaking were made by the Consultant and the Executive. The
Company shall give to the Consultant a copy of each such
undertaking, which shall be signed by the Company and the
Consultant for the purpose of identification.
8. INTELLECTUAL PROPERTY
8.1 In consideration of the payment of one pound ((pound)1) receipt
of which the Consultant hereby acknowledges:-
8.1.1 If the Consultant or the Executive makes or participates in making
any invention or any design (whether registerable or not) or any
work in which copyright and/or design right subsists, in
connection with the provision of the Services, and which relates to
or is useful in connection with the Business and/or the business
of the Group, the Consultant shall disclose such invention, design
or work to the Company immediately. In the case of such an
invention the Consultant shall give the Company full
particulars of the invention together with all information, data
(in all forms and in all media) drawings and models embodying or
relating to the invention and in the case
of designs and copyright works, a copy of all such designs and works.
8.1.2 All rights in Intellectual Property which may be created
by each of the Consultant and the Executive in the
course of providing the Services shall be the sole and
exclusive property of the Company and the Consultant
hereby assigns and shall procure that the Executive
shall assign all such Intellectual Property to the
Company by way of present and future assignment with
full title guarantee.
8.1.3 In the case of registerable rights the Consultant shall
if requested by the Company execute and shall procure
that the Executive executes all documents and do all
things which may be necessary or desirable for obtaining
the best possible registerable protection in territories
specified by the Company, and in respect of all
Intellectual Property the Consultant shall execute and
shall procure that the Executive executes all documents
and do all such things as may be necessary or desirable
for perfecting assignment of Intellectual Property under
clause 8.1.2 above.
8.1.4 The Consultant hereby irrevocably appoints the Company
to be its attorney in its name and on its behalf to
sign, execute any instrument or do anything and
generally to use its name for the purpose of giving to
the Company and/or the Group the full benefit of the
provisions of this clause and in favour of any third
party a certificate in writing signed by any director or
the secretary of the Company that any instrument or act
falls within the authority conferred by this clause
shall be conclusive evidence that such is the case.
9. TERMINATION
9.1 Without prejudice to any remedy it may have against the Consultant
for breach or non-performance of any provision of this agreement
the Company may by written notice to the Consultant terminate this
agreement with immediate effect if:
9.1.1 the Consultant or the Executive is in material breach of any of the
terms of this agreement; 9.1.2 the Consultant is in breach of
clause 3(2) of this agreement being at any time unable to provide the
services of the Executive, provided that if the
Executive is incapacitated by reason of sickness or
injury the Company shall not terminate this agreement
until the Executive has been so incapacitated for a
continuous period of 13 weeks;
9.1.3 the Consultant or the Executive is guilty of serious
misconduct or wilful and persistent neglect of their
respective obligations under this agreement;
9.1.4 any order shall be made or effective resolution passed
for liquidation, winding up or dissolution of the
Consultant (otherwise than for the purpose of
reconstruction or amalgamation on terms approved by the
Company);
9.1.5 the Executive becomes bankrupt or makes any composition
or enters into any deed of arrangement with his
creditors in circumstances which would have a material
adverse effect on the Company, the Group or their
respective reputations;
9.1.6 the Executive is convicted of any arrestable criminal
offence (other than an offence under road traffic
legislation in the United Kingdom or elsewhere for which
a fine or non-custodial penalty is imposed) in
circumstances which would have a material adverse effect
on the Company, the Group or their respective
reputations;
9.1.7 the Executive is convicted of an offence under the
Companies Securities (Insider Dealing) Act 1985 or under
any other present or future statutory enactment or
regulations relating to insider dealings under English
or New York law;
9.1.8 the Executive ceases to be employed by or to have a substantial
interest in the Consultant; 9.1.9 the Executive and/or the Consultant,
in the reasonable opinion of the Company, act in such a way as
to seriously jeopardise the business of the Company and/or the Group.
9.2 Upon termination of this agreement for whatever reason the
Consultant shall deliver and shall procure that the Executive
delivers to the Company all books, documents, papers, materials
and other property (in whatever format) relating to the Business,
and/or the business of the Group or the clients of the Company or
the Group which may then be in its or the Executive's possession
or under its or his power or control.
9.3 The Company may at any time and in its absolute discretion
(whether or not any notice of termination has been given by the
Company or the Consultant under clause 2(1) above) terminate this
agreement with immediate effect by making a payment in lieu of
notice.
10. POST-TERMINATION RESTRICTIONS
10.1 Definitions
In this clause:
10.1.1 "Termination Date" means the date on which the employment terminates;
10.1.2 "Person" includes any company, firm, organisation or other entity;
10.1.3 "Area" means any country in the world where on the Termination
Date the Company was supplying
services;
10.1.4 "Business" means any business carried on by the Company
or any Group Company which relates to the provision of
pre-clinical, early clinical and/or non-clinical
biological safety evaluation services to the
pharmaceutical and biotechnology, agrochemical and other
chemical industries;
10.1.5 "Client" means any Person to whom the Company or a Group
Company supplied during the 6 months preceding the
Termination Date and with whom at any time during such
period the Consultant was actively involved;
10.1.6 "Prospective Client" means any Person with whom the
Company or a Group Company had negotiations or
discussions regarding the possible supply of services
during the 6 months immediately preceding the
Termination Date and with whom at any time during such
period the Consultant was actively involved.
10.2 The Consultant covenants with the Company that it shall not at any
time during the continuance of this agreement or for a period of 6
months after the termination of it solicit or endeavour to solicit
whether directly or indirectly any senior employee of the Company
or a Group Company to leave and with whom at any time during the
period of 6 months prior to such termination the Consultant was
actively involved (whether in breach of the terms of their
contract or not).
10.3 The Consultant covenants with the Company that it shall not
for a period of six months from the
Termination Date in the Area:
10.3.1 canvass or solicit business for services similar to
those being provided by the Company or a Group Company
as at the Termination Date from any Client or
Prospective Client;
10.3.2 seek to do business or deal with any Client or
Prospective Client in respect of services similar to
those being provided by the Company or a Group Company
as at the Termination Date; or
10.3.3 canvass or solicit business from any supplier of the
Company or a Group Company with whom the Consultant was
actively involved during the 6 months ending on the
Termination Date or persuade such supplier to cease to
supply, or to restrict or vary the terms of supply to
the Company or a Group Company or otherwise interfere
with the relationship between such a supplier and the
Company or a Group Company.
10.4 The Consultant shall not for a period of 6 months from the
termination of this agreement directly or indirectly be interested
or concerned in any business which is carried on in the Area and
which is competitive or likely to be competitive with the Business
being carried on at the Termination Date and with which the
Consultant was actively involved during the 6 month period ending
on the Termination Date.
For this purpose, the Consultant is concerned in a business if:
10.4.1 he carries it on as principal or agent; or
10.4.2 he is a partner, director, employee, secondee, consultant or agent
in, of or to any Person who
carries on the business; or
10.4.3 he has any direct or indirect financial interest (as
shareholder or otherwise) in any Person who carries on
the business.
11. NO EMPLOYMENT OR PARTNERSHIP
11.1 Nothing contained in this agreement shall be construed or have
effect as constituting any relationship of employer and employee
or partners or any other fiduciary relationship between the
Company and the Consultant or between the Company and the
Executive.
11.2 The Consultant shall be responsible for the payment of any
remuneration payable to and benefits provided for the Executive
under his contract of employment or otherwise including any
National Insurance, income tax and any other form of taxation or
social security cost in respect of his remuneration or benefits.
The Consultant shall indemnify the Company and/or any Group
Company in respect of any such payment, including any interest or
penalties imposed on the Company or the Group in respect of any
payments made to the Company under this agreement.
12. WARRANTIES
The Consultant warrants to the Company that:
12.1 the Consultant employs the Executive; and
12.2 the provision of the Services shall not:-
12.2.1 infringe the Intellectual Property of any third party; or
12.2.2 involve the use of information in breach of obligations owed to or
rights held by any third party;
and
12.2.3 the Company will not infringe the Intellectual Property
of any third party by the Company exercising all of the
rights of the owner of the Intellectual Property
assigned by the Consultant to the Company under this
agreement; and
12.2.4 Neither the Consultant nor the Executive is bound by any
legally enforceable obligations owed to persons other
than the Company which would prevent either the
Consultant or the Executive from complying with the
terms of this agreement.
13. SEVERABILITY
If any of the provisions of this agreement become invalid or unenforceable
for any reason by virtue of applicable law the remaining provisions shall
continue in full force and effect and the Company and the Executive hereby
undertake to use all reasonable endeavours to replace any legally invalid
or unenforceable provision with a provision which will promise to the
parties (as far as practicable) the same commercial results as well
intended or contemplated by the original provision.
14. PREVIOUS AGREEMENTS
With effect from the Commencement Date, all other agreements and
arrangements between the Consultant or the Executive and the Company
relating to the provision of Services by the Consultant or the Executive
shall cease to have effect.
15. GRATUITIES
The Consultant shall not, and shall procure that the Executive shall not,
directly or indirectly accept any commission, discount, gratuity or other
benefit from any person who has or is likely to have a business
relationship with the Company and/or the Group.
16. GOVERNING LAW
16.1 This agreement shall be governed by and construed in accordance with
English law.
16.2 The parties agree that the courts of England are to have exclusive
jurisdiction to settle any dispute which may arise out of or in
connection with this agreement and submit to the jurisdiction of
those courts.
17. NOTICES
17.1 Any notice or other document to be served under this agreement may
be delivered or sent by first class post or telex or facsimile
process to the party to be served at its registered office for the
time being.
17.2 Unless the contrary is proved, any such notice or other document
shall be deemed to have been served: 17.2.1 if delivered, at the
time of delivery; 17.2.2 if posted, at 10.00am on the second
Working Day after it was put into the post; or 17.2.3 if sent by
telex or facsimile process, at the expiration of two hours after
the time of despatch, if despatched before 3.00pm on any Working
Day, and in any other case at 10.00am on the Working Day following
the date of despatch.
17.2.4 In proving such service it shall be sufficient to prove
that delivery was made or that the envelope containing
such notice or other document was properly addressed and
posted as a pre-paid first class letter or that the
telex or facsimile message was properly addressed and
despatched as the case may be.
AS WITNESS the hands of the duly authorised representatives of the Company and
of the Consultant on the date first mentioned on page one.
SIGNED by )
on behalf of HUNTINGDON LIFE SCIENCES GROUP PLC )
)
in the presence of:- )
Witness signature:
Name:
Address:
Occupation:
SIGNED by )
on behalf of RITTLE LIMITED
in the presence of:- )
Witness signature:
Name:
Address:
Occupation:
THE HIH SHARE OPTION
PLAN
RULES
and
REGULATIONS
<PAGE>
THE HIH SHARE OPTION PLAN
(As amended on the 29 January 1992)
1. Name of the Plan
The Plan shall be known as The HIH Share Option Plan.
2. Definitions
(A) For the purposes of the Plan, unless the context otherwise requires:-
"Adoption Date" means the date on which the
Plan is adopted by the Company in
General Meeting.
"Auditors" means the auditors for the time being of the Company
"Board" means the Board of Director of the Company or the Directors
present at a duly convened meeting of the Directors at which
a quorum is present.
"Company" means Huntingdon International
Holdings plc ("HIH") and its
subsidiary companies from time to
time being bodies corporate which
HIH is to taken to have control for
the purposes of Section 840 of the
Income and Corporation Taxes Act
1988 and which are subsidiaries
within the meaning of Section 736 of
the Companies Act 1985.
"Conditional Option" means an option granted
pursuant to paragraph 5 below to
subscribe for Ordinary Shares that
is for the time being outstanding.
"Eligible Employee" means a person who is
required to devote substantially the
whole of his time (being no less
than 25 hours per week) to service
as Director or employee of the
Company and who is selected by the
Board to participate in the Plan.
"Option" means an option granted pursuant to
the plan to subscribe for Ordinary
Shares that is for the time being
outstanding (including a Conditional
Option).
"Option Period" means in relation to any
Option the period commencing on the
second anniversary and ending on the
seventh anniversary of the date on
which that Option was granted.
"Option Price" in relation to any Ordinary Shares the subject of an Option
means the price, determined in accordance with paragraph
4(B) or in the case of a Conditional Option in accordance
with paragraph 5(B)(2) below, at which the Participant
holding that Option may subscribe for those Ordinary Shares
pursuant to the Plan.
"Ordinary Shares" means fully paid Ordinary shares of the Company.
"Participant" means an Eligible Employee who holds
an Option or, where the context
permits, his personal
representatives.
"Plan" means this Plan, as amended from time to time.
"Plan Period" means the period commencing
on the Adoption Date and ending on
31st December 1997.
(B) Where the context so admits, the singular shall include the plural and
vice versa and the masculine shall include the feminine.
(C) Any reference to a statutory provision is a reference to that provision
as for the time being amended or re-enacted.
3. Duration of the Plan
The Plan shall take effect on the Adoption Date and no Option shall be
granted under the Plan other than during the Plan Period.
4. Grant of Options
(A) Subject to the provisions of the Plan, the Board may in its discretion
at any time and from time to time during the Plan Period offer and
grant to Eligible Employees (to be selected in each case at the
discretion of the Board) Option entitling them to subscribe for such
number of Ordinary Shares at the Option Price as the Board shall in
each case determine.
(B) Subject to paragraphs 5, 10 and 12 below, the Option Price payable for
each Ordinary Share in respect of which an Option is exercised shall be
whichever is the greater of the following:-
(i) an amount equal to the average of the middle market quotations
for an Ordinary Share as at the close of business on the five
dealing days prior to the date on which the Option was offered
to the Participant concerned; and
(ii) the nominal value of one Ordinary Share.
(C) The offer of an Option shall be made to an Eligible Employee by letter
in such form as the Board may decide and must be accepted in writing in
such manner and within such period as the Board may prescribe and must
be accompanied by the consideration payable under paragraph 7 below. An
offer which is not so accepted shall lapse. An offer may be accepted in
part.
(D) Each Option granted shall be evidenced by a certificate in such form as
the Board shall from time to time determine.
(E) For the purposes of the Plan, an Option sha11 be deemed to have been
offered on the date of the letter of offer from the Board and sha11 be
deemed to have been granted on the date on which the acceptance of such
offer by the Eligible Employee concerned together with the
consideration payable under paragraph 7 below shall have been received
by the Board.
(F) The rights granted to a Participant under this Plan shall be personal
to the Participant and shall not be capable of being dealt with
otherwise than by the exercise thereof by the Participant personally or
by his personal representatives in accordance with paragraph 8(E)
below. Any purported assignment, pledge, disposal of or other dealing
with an Option by a Participant shall entitle the Board to cancel that
Option.
5. Conditional Options
(A) Subject to the provisions of this paragraph, the Board may in its
discretion and from time to time on or prior to the 15th April 1983
offer to persons who are full-time Directors or employees of the
Company (to be selected in each case at the discretion of the Board)
Conditional Options entitling them to subscribe for such number of
Ordinary Shares at the Option Price as the Board shall in each case
determine.
(B) The provisions of the Plan sha1l apply to Conditiona1Options save that:
(1) All the Conditional Options shall lapse and be cancelled if
the proposed offer for sale ("the Offer for Sale") by Becton
Dickinson and Company ("BD") of 4,000,000 Ordinary Shares
shall not have occurred by 1st July 1983 or such later date as
BD may notify to the Board on or before 1st July 1983 ("the
Cancellation Date").
(2) Subject to paragraphs 10 and 12 below, the Option Price
payable for each Ordinary Share in respect of the which a
Conditional Option is exercised shall be 90 per cent of the
offering price of an Ordinary Share pursuant to the Offer for
Sale.
(3) Subject to paragraphs 6 and 10 below, the maximum number of
Ordinary Shares in respect of which Conditional Options may be
granted pursuant to this paragraph shall be limited in
aggregate to 40,000 Ordinary Shares of (pound)0.10 each, being
1% of the issued Ordinary share capital of the Company on the
Adoption Date.
(4) No Conditional Option may be exercised prior to the day
following the Cancellation Date.
6. Limitations on Grant of Options
(A) The maximum number of Ordinary Shares in respect of which Options may
be granted under the Plan on any day ("the relevant day") when added to
the aggregate of the other numbers of Ordinary Shares specified in
paragraphs (I) and (ii) below shall not exceed 10 percent of the number
of Ordinary Shares in issue on the day immediately prior to the
relevant day; that is to day, added to the aggregate of:-
(i) the number of Ordinary Shares which have been acquired or are
capable of acquired under Options granted under the Plan prior
to the relevant day; and
(ii) the number of Ordinary Shares which have acquired or are
capable of being acquired pursuant to Options granted
immediately prior to the relevant day under the HIH Approved
Management Share Option Plan.
(B) No Option shall be offered to any person if the date of his retirement
at normal retirement age would fall within the period of three years
immediately following the date of such offer.
(C) No Option shall be offered or granted except during the period
commencing on the lot day and ending on the 56th day following the
announcement of the quarterly financial results of the Company.
(D) No Option sha1l be granted to subscribe for less than 10 Ordinary Shares.
7. Consideration for Grant of Options
The sum of (pound)1 shall be payable to the Company for the grant of
every Option and such consideration shall not in circumstances be
returnable to the Participant.
8. Time for Exercise of Options
(A) An Option may not in any circumstances be exercised later than seven
years after the date on which it was granted. On the expiry of such
period and to the extent that it has not then been exercised, every
Option shall terminate.
(B) Except as otherwise provided in this paragraph or in paragraphs 11 and
12 below:-
(1) an Option may not be exercised earlier than two years after
the date on which it was granted; and
(2) the number or Ordinary Shares in respect of which an Option is
exercised during the first year of the Option Period may not
in aggregate exceed 50 % of the number of Ordinary Shares the
subject of that Option.
(C) An Option may not (except as otherwise provided in this paragraph) be
exercised unless at the date of its exercise the Participant is then,
and has been continuously since the date on which the Option was
granted, in the full-time employment of the Company
(D) If a Participant ceases to be in the full-time employment of the
Company:-
(i) by reason of his retirement on attaining normal retirement
age or, with the specific consent of the Board, at a younger
age; or
(ii) by reason of injury , disability or ill-health (established in
any such case to the satisfaction of the Board) or dismissal
for redundancy (within the meaning of the Employment
Protection (Consolidation) Act 1978);
then and in any such case that Participant may (whether or not two
years shall have then expired from the date of grant of the Option)
exercise any Option then held by him at any time within the period of
six months after he ceases to be so employed, but subject in all such
cases to the time limit set out in sub-paragraph (A) of this paragraph.
(E) If a Participant dies either before or during the Option Period
applicable to any Option held by him, but while that Participant is
still in the full-time employment of the Company, his personal
representatives may exercise that Option at any time within twelve
months after the death of the Participant but subject in all such cases
to the time limit set out in sub-paragraph (A) of this paragraph.
(F) If a Participant ceases at any time to be employed in a full-time
capacity by the Company in circumstances arising from actions of the
Company, such circumstances being beyond the Participant's control and
being events other than those referred to in paragraph (D) of this
paragraph, the Board shall determine in its absolute discretion whether
or not the Participant may exercise any Option held by him which at the
date of such cessation of employment was exercisable but unexercised
and the restrictions (if any) to which such exercise shall be subject.
(G) The terms of employment of a Participant by the Company shall not be
affected by his participation in the Plan and on the termination of his
employment with the Company for any reason, he shall not be entitled to
any damages or other benefit to compensate him for the loss of any
rights under the Plan.
9. Procedure on Exercise of Options
(A) An Option shall be exercised by the Participant delivering to the
Secretary of the Company:-
(i) a notice in a form approved by the Board, signed by the
Participant and stating the number of Ordinary Shares in
respect of which the Option is exercised;
(ii) the Option Price payable for the Ordinary Shares in respect
of which the Option is exercised; and
(iii) the relevant Option Certificate, for amendment or cancellation
as the case may require.
Subject to the provisions. of paragraph 8(B) above an Option may be
exercised in whole or in part. Any partial exercise of an Option shall
be in respect of 10 Ordinary Shares or a multiple thereof, provided
that a partial exercise of an Option shall not be permitted if after
such exercise the outstanding Option rights of the Participant
concerned would relate to a number of Ordinary Shares less than 10.
(B) Subject to such consents of any competent authority under any enactment
or regulations for the time being in force as may be necessary and
subject to compliance with the terms of the Option, the
Company shall, not later than 30 days after the exercise of an Option,
allot to the Participant (or in the case of the exercise of an Option
in accordance with paragraph 8(E) above, his legal personal
representatives) at the Option Price the number of Ordinary Shares
specified in the notice of exercise of the Option and shall deliver to
the Participant (or such personal representatives) a definitive share
certificate or, at the discretion of the Directors, a fully paid
allotment letter or renounceable share certificate in respect thereof.
(C) The Ordinary Shares so allotted will rank pari passu in all respects
with the Ordinary Shares in issue on the date of exercise of the
Option, except that the Shares so allotted shall not entitle the holder
to participate in any dividend or other distribution declared or which
the Company has announced it proposes to pay to holders of Ordinary
Shares on the register on a date prior to the date of exercise of the
Option.
(D) The Company shall at all times keep available sufficient unissued
Ordinary Share capital to meet in full any exercise of any Option.
10. Variation of Capital
If a variation in the issued share capital of the Company (whether by way of a
capitalisation or rights issue, sub-division, consolidation or reduction) shall
take place after the Adoption Date, then:-
(i) the Option Price and/or
(ii) the number of Ordinary Shares comprised in any Option
(iii) the limits imposed by paragraph 6(A) above
shall be varied in such manner as the Auditors shall certify in writing to be in
their opinion fair and reasonable, except that if any variation would otherwise
result in the Option Price for any Ordinary Share being less than its nominal
value, the Option Price as adjusted shall be the nominal value of that Ordinary
Share.
11. Change of Control
If at any time after the Cancellation Date while any Options remain in force
(whether before or during the Option Period applicable to that Option) the Board
receives notice that the legal or beneficial ownership of an aggregate of 25% or
more of the issued Ordinary Share capital of the Company has become vested in a
person (for which purpose the provisions of Sections 66 and 67 of the Companies
Act 1981 requiring the interests of certain connected persons or persons acting
together to be aggregated shall apply) the Board shall within 10 days of receipt
of such notice give notice ("Early Exercise Notice") that such Options may be
exercised during the period of 90 days after the date of the Early Exercise
notice.
12. Winding up of the Company
(A) In the event of a voluntary winding up of the Company for the purposes
of reorganisation or reconstruction, such adjustment shall be made to
any unexercised Option, including the number of Ordinary Shares
comprised therein and the Option Price payable therefor, as the
Auditors shall, upon the request of the Board, certify in writing to be
fair and reasonable except that if any adjustment would otherwise
result in the Option Price for any Ordinary Share being less than its
nominal value the Option Price as adjusted shall be the nominal value
of that Ordinary Share.
(B) In the event of any other voluntary winding up of the Company while an
Option remains in force (whether occurring before or during the Option
Period applicable to that Option) the Participant who holds that
Option shall be entitled upon giving to the Company within 90 days
after the commencement of the winding up notice in writing accompanied
by payment of the Option Price and the relevant Option Certificate(s)
elect to be treated as if his Option had been exercised, either wholly
or to the extent specified in the notice, immediately before the
commencement of the winding up and shall be entitled to receive in the
liquidation a sum equal to the amount he would have received as holder
of the Ordinary Shares to which he would have been entitled upon
exercise of the Option.
(C) Subject as otherwise provided in this paragraph a11 Options sha1l lapse
on the winding up of the Company.
13. Alterations to the Rules of the Plan
The Board may by resolution alter any of the provisions of the Plan
(whether retrospectively or otherwise) except that:
(i) the definitions of "Eligible Employee" and "Option Price" in
paragraph 2 above, the provisions of paragraphs 4(B), 4(F), 5,
6(A), 8, 9(C), 10, 11 and 12 above and the provisions of this
paragraph shall not be altered except with the prior approval
of the Company in general meeting; and
(ii) no alteration shall be made, without his written consent, to
any rights already vested in
any Participant.
14. Administration
(A) The Plan shall be administered by the Board and any dispute or question
relating to the Plan or to any Option granted under the Plan shall be
determined by the Board whose decision (other than on a matter to be
certified by the Auditors) shall be final and binding.
(B) All costs and expenses incurred in the administration of the Plan shall
be borne by the Company.
(C) The Board shall maintain all necessary books of account and records
relating to the Plan.
(D) Every Participant shall be sent:-
(i) written notice of any variation made pursuant to paragraphs 10
and 12(A) above;
(ii) notification of the happening of any event referred to in
paragraph 11 above;
(iii) written notice of any alteration made pursuant to paragraph 13
above; and
(iv) a copy of every document sent to the holders of Ordinary Shares
which he is not otherwise entitled to receive.
(E) Any notice or documents to be given to an Eligible Employee or a
Participant may be delivered to him by hand or sent to him by post at
his last known home address according to the information provided by
him. Any notice or document sent by post shall be deemed to have been
received 48 hours after posting.
15. Directors
A Participant who is a Director of the Company may, notwithstanding his
interest, vote on any Board resolution concerning the Plan (other than
in respect of his own participation therein) and may retain any
benefits under the Plan.
16. Listing
The Company will at its own expense make application to the Council of
The Stock Exchange for shares allotted pursuant to the exercise of any
Option, or American Depositary Shares representing such shares, to be
admitted to the Official List, if at the time of such allotment any
Ordinary Shares or American Depositary shares representing such shares
are so listed.
THE HIH APPROVED MANAGEMENT
SHARE OPTION PLAN
RULES
and
REGULATIONS
<PAGE>
THE HIH APPROVED MANAGEMENT
SHARE OPTION PLAN
(Amended on the 29 January 1992)
1. The Plan will be known as The HIH Approved Management Share Option Plan
('the Plan ')
Definitions
2. For the purposes of the Plan, unless the context otherwise requires,
the following words and expressions shall have the following meanings:
"the Company" means Huntingdon International Holdings plc;
"Subsidiary" means a body corporate of which the Company
is for the time being to be taken to have
control for the purposes of Section 534 of
the Income and Corporation Taxes Act 1970
and which is a subsidiary of the Company
within section 154 of The Companies Act
1948;
"Group" means the Company and the Subsidiaries;
"the Adoption Date" means the date on which the Company in a general
meeting passes an
ordinary resolution adopting the Plan;
"the Auditors" means the auditors for the time being of the Company
(acting as experts and not as arbitrators);
"the Board" means the Board of Directors of the
Company or the directors present at a duly
convened meeting of the directors at which a
quorum is present or the persons appointed
by the Board of Directors to act as a
committee of the Board of Directors of the
Company for all or any matters relating to
the Plan;
"Eligible Employee" means a person who is a Fu1l -Time
Director of or a Qualifying Employee of the
Company or of a Subsidiary, selected by the
Board to participate in the Plan and who is
not expected by the Board to retire from
being a Full-Time Director or Qualifying
Employee as aforesaid within 2 years from
the date when this expression falls to be
applied;
"Employment" means employment by the Company and/or any Subsidiary;
"Full Time Employment" means a Director of the
Company and/or any Subsidiary whose terms of
employment require him to work for at least
thirty-seven and one-half hours per week
(excluding meal breaks);
"Option" means an option to subscribe for Plan Shares granted
pursuant to the Plan;
"Option Price" in relation to any Plan Shares means the greater of
(i) the nominal value of an Ordinary Share and
(ii) an amount equal to the middle market quotations for the Ordinary Shares
(as derived from the Stock
Exchange Daily Official List) during the five dealing days prior
to the date on which the offer to grant an Option is made to a
Participant. Such price may be determined in either Sterling of
U.S. Dollars as the Board may direct should the Option Price be
determined in U.S. Dollars, then for the purposes of calculating
the limit referred to in Rule 4(F) , the Option Price shall be
converted to Sterling using the exchange rate quoted by National
Westminster Bank plc ( or such other London clearing bank as the
Directors may nominate in the event that there is no such
exchange rate quoted by National Westminster Bank plc) on the
date on which the Offer to grant an Option is made to a
Participant;
"Ordinary Shares" means the Ordinary shares of the Company;
"Participant" means any person who for the time being participates
in the Plan;
"Plan Period" means the period commencing on the Adoption Date and
ending on 31st
December 1997;
"Plan Shares" means Ordinary Shares which satisfy
the conditions specified in paragraphs 7 to
11 inclusive of Schedule 10 to the 1984 Act;
"Qualifying Employee" means an employee of the Company
or a Subsidiary (who is not a director of
the Company or a Subsidiary) who is required
under the terms of his employment to work
for at least thirty seven.and one-half hours
per week (excluding mealbreaks);
"Qualifying employment" means Employment either as a Full Time Director or
as a
Qualifying Employee as the case may be;
"Record Date" in relation to any particular payment
of dividend or the making of any other
distribution to the Company's shareholders
means the date on which any such shareholder
must duly appear in the as such in order to
have the right to receive such dividend or
other distribution;
"Relevant Emoluments" in relation to a Participant
means such of the emoluments of his
Employment as are liable to be paid under
deduction of tax pursuant to section 204 of
the Taxes Act calculated as for the
purposes of section 204 after deduction from them
amounts included by virtue of Chapter II of Part ill
of the Finance Act 1976;
"Taxes Act" means Income and Corporation Taxes Act 1970;
"1984 Act" means Finance Act 1984;
"Year of Assessment" bears the meaning given thereto in the Taxes Act.
Where the context so permits the singular shall include the plural and vice
versa and the masculine shall include the feminine.
Reference to any Act shall include any statutory modification, amendment or
re-enactment thereof.
Grant of Options
3(A) The Board may (subject to the provisions of rules 3(B) hereof) from
time to time during the Plan Period at its discretion offer an Option
on the terms of the Plan to an Eligible Employee to be selected in each
case at the discretion of the Board. An Eligible Employee may not
participate in the Plan should he be prohibited from so doing by the
provisions specified in paragraph 4(1)(b) of Schedule 10 of the 1984
Act.
(B) Any such offer may be made within a period of four weeks after the
Adoption Date or thereafter within a period commencing on the third day
and ending on the fifty- sixth day after the respective dates of the
announcements by the Company of the Group's quarterly results.
4(A) Subject to the limitations referred to herein the Board shall determine
the number of Plan Shares to be included in an Option to be offered to
an Eligible Employee.
(B) An offer of an Option to acquire Plan Shares must be accepted in
writing in such manner as the Board may prescribe within 21 days of the
same being made and if not so accepted sha1llapse. An offer may be
accepted in part.
(C) An Option and an offer to grant an Option shall be personal to the
Eligible Employee to whom it is granted or made and shall not be
capable of assignment. Any purported assignment, pledge, disposal of or
dealing with an Option shall entitle the Company to require the Option
to be forfeited.
(D) The amount payable for the grant of an Option shall be the sum of
(pound)1. This consideration shall not be returnable to the Participant
and shall not be deemed to be part payment of the Option Price.
(E) The amount payable for each Plan Share in the event of the Option being
exercised shall be the Option Price.
(F) No Option shall be offered to an Eligible Employee in any year of
assessment if this would, at the date of grant of such Option, cause
the aggregate of:
(a) the amount which would be subscribed for Plan Shares on the
exercise of such Option; and
(b) the aggregate Option Prices of any Plan Shares comprised in
any unexercised Options held by
that Eligible Employee; and
(c) the aggregate amount which would be subscribed for Ordinary
Shares which he may acquire in pursuance of unexercised rights
granted to him at any time under any other Plan approved under
Schedule 10 to the 1984 Act and established by the Company or
by any associated company thereof (within the meaning of
Section 302 of the Taxes Act)
to exceed or further exceed the greater of:
(1) four times the amount of the Relevant Emoluments for the
current or preceding year of
assessment (whichever of those years gives the greater amount)
and
(2) the amount for the time being specified as being the
appropriate limit for the purposes of paragraph 5 (2) (a) of
Schedule 10 of the 1984 Act; and so that: -
(i) the amount referred to in item (a) and the Option
Prices or amounts to be subscribed and referred to in
items (b) or (c) shall be as determined at the
respective dates of grant (or such earlier date as
may be applicable pursuant to paragraph 13 of
Schedule 10 to the 1984 Act); and
(ii) where there were no Relevant Emoluments for the
preceding year of assessment the substitution
referred to in paragraph 5(3) of Schedule 10 to the
1984 Act shall apply.
(G) Options shall be evidenced by certificates in such form as the Board
shall from time to time determine.
(H) No offer of an Option shall be made which is capable of or open for
acceptance after the expiry of the Plan Period. For the purpose of the
Plan the date of the grant of Option shall be the date on which the
offer to grant the option to an Eligible Employee shall have been
accepted by such Eligible Employee.
Limit or Shares
5. The maximum number of Ordinary Shares in respect of which Options may
be granted under the Plan on any day ("the relevant day") when added to
the aggregate of the numbers of Ordinary Shares specified in paragraphs
(i) and (ii) below shall not exceed 10 per cent of the number of
Ordinary Shares in issued on the day immediately prior to the relevant
day; that is to say, added to the aggregate of:-
(i) the number of Ordinary Shares which have been acquired or are
capable of being acquired under Options granted under the Plan
prior to the relevant day; and
(ii) the number of Ordinary Shares which have been acquired or are
capable of being acquired pursuant to Options granted
immediately prior to the relevant day under The HIH Share
Option Plan.
Exercise or an Ontion
6(A) An Option shall be exercised by delivering to the Secretary of the
Company a notice duly signed by the Participant in a form approved by
the Board together with payment of the Option Price for each Plan Share
to be subscribed and delivered of the Option certificate for amendment
or cancellation as the case may be. An Option may be exercised in part
provided that any partial exercise is in respect of 10 Plan Shares or a
multiple thereof except where the Option relates to a number of Plan
Shares less than 10, in which case the Participant shall exercise his
rights in full in respect of that number of shares.
(B) Subject to any necessary consents and to an Option having been
exercised in accordance with the provisions of paragraph (A) of this
Rule, the Company shall as soon as practicable and in any event not
late than 2 working days after the exercise of an Option make an
allotment to the Participant of the number of Plan Shares specified in
the notice exercising the Option and shall deliver to the Participant a
definitive share certificate.
Period of Options and Provisions for Participants Leaving the Group
7(A) An Option may not be exercised later than the day before the tenth
anniversary of the date that the same was granted on which day the same
(if it has not already ceased to be exercisable) shall cease to be
exercisable.
(B) An Option may not be exercised prior to the expiry of three years from
the date that the same was granted except
(a) in the event of the Participant ceasing to be in Qualifying
Employment by reason of his death; or
(b) if the Board shall in its discretion determine that such
restriction shall not apply in the case of that Participant,
being a Participant who has ceased to be in Qualifying
Employment by reason of any of the circumstances described in
paragraph (E) below, or in respect of whom the Board has
previously exercised its discretion under paragraph (G) below;
or
(c) as provided in Rule 9.
(C) An Option granted to any Participant may not be exercised within three
years of the date on which the Participant last exercised an Option or
any rights obtained under any other Plan approved under Schedule 10 to
the 1984 Act except
(a) in the event of the Participant ceasing to be in Qualifying
Employment by reason of his death; or
(b) if the Board shall in its discretion determine that such
restriction shall not apply in the case of that Participant,
being a Participant who has ceased to be in Qualifying
Employment by reason of whom the Board has previously
described in paragraph (e0elow, or in respect of whom the
Board has previously exercised its discretion under paragraph
(G) below; or
(c) as provided in Rule 9.
(C) An Option granted to any Participant may not be exercised within three
years of the date on which the Participant last exercised an Option or
any rights obtained under any other Plan approved under Schedule 10 to
the 1984 Act except
(a) in the event of the Participant ceasing to be in Qualifying Employment
by reason of his death; or
(b) if the Board shall in its discretion determine that such
restriction shall not apply in the case of that Participant
being a Participant as described in sub-paragraph (b) of this
paragraph (B) of this Rule; or
(c) as provided in Rule 9, but nothing in this paragraph shall
prevent a Participant from exercising on the same day rights
obtained under the Plan and any other such Plan or Plans.
Provided that this Rule 7(C) shall not apply in respect of any Option
granted after the date on which the addition of this proviso to Rule
7(C) was approved by the Board of Inland Revenue.
(D) Except as provided in paragraphs (E) (F) and (0) below no Option may be
exercised unless the Participant shall have been in Qualifying
Employment since the date of the grant of such Option.
(E) Subject to paragraphs (A) (B) and (C) of this Rule if a Participant
ceases to be in Qualifying
Employment by reason of :-
(i) his retirement on or after attaining normal retirement age or, with the
express consent of the board in writing for the purpose of this
paragraph, at a younger age;
(ii) ill health or disability recognised as such expressly by the Board in
writing for the purpose of this paragraph;
(iii) dismissal by reason of redundancy (within the meaning of The
Employment Protection (Consolidation) Act 1978); or
(iv) the company by which he is employed (if not the Company)
ceasing to be a Subsidiary .
he may within 12 months of such cessation or, if later, within the
period of 6 months commencing on the third anniversary of the date of
grant of an Option exercise that Option as regards all or any of the
Plan Shares comprised therein and shall thereafter cease to have any
right to exercise any Option or (as the case may be) that Option.
(F) Subject to paragraph (A) of this Rule in the event of the death of a
Participant being in Qualifying Employment his personal representative
may within 12 months of his death exercise any Option granted
to him in respect of all or any of the Plan Shares comprised therein
and shall thereafter cease to have any rights to exercise any such
Option. In the event of the death of a Participant who had
previously ceased to in Qualifying Employment but whose Option
remained exercisable under paragraphs (E) or (G) of this Rule, his
personal representatives may exercise that Option as aforesaid not
later than the date on which it would have ceased to be exercisable
under paragraph (E) or (G) as the case may be but in no event later
than 12 months after his death and shall thereafter cease to
have any rights to exercise any such Option.
(G) If a Participant ceases to be in Qualifying Employment for any reason
other than those specified in paragraphs (E) or (F) of this Rule the
Participant shall cease to have any rights to exercise his Option upon
such cessation provided that the Board at its discretion may (subject
to paragraphs (A) of this Rule) allow such a Participant to exercise
his Option during a period not exceeding 12 months from the date of
such cessation.
(H) If a Participant (or his personal representatives) shall cease to have
any such rights to exercise an Option under this Rule or under Rule 9
of such Option shall lapse and the Board shall notify the Participant
in writing of such cessation and forthwith upon such notification the
Participant shall be bound to surrender to the Company the certificate
evidencing such Option.
(I) Notwithstanding the foregoing provisions, no Option may be exercised at
a time when the Participant to whom it was granted is precluded from
participating in the Plan by virtue of paragraph 4(1)(b) of Schedule 10
to the 1984 Act.
Variation or Capital
8(A) If at any time any Ordinary Shares shall be issued credited as fully
paid by way of capitalisation of reserves or undisturbed profits or
shall be offered to members of the Company for subscription by way of
rights or in the event of any variation in or reorganisation of the
share capital of the Company whether by way of sub-division or
consolidation of shares or a reorganisation of the share capital of the
Company for the purposes of Section 78 to 81 of the Capital Gains Tax
Act 1979, then:-
(i) the Option Price in respect of any Options granted pursuant to the
Plan; and/or
(ii) the number of Plan Shares subject to any such Option;
shall be adjusted in such manner as the Board may determine to be
appropriate and such decision of the Board shall be final and binding
on the Participants and the Company provided that no adjustment shall
be made pursuant to this paragraph unless and until the Auditors shall
have reported to the Board in writing that such adjustment is in their
opinion fair and reasonable.
(B) In no circumstances shall the Option Price as reduced or adjusted
pursuant to paragraph (A) of this Rule in respect of any Plan Share be
less than the nominal value of such share.
(C) Every alteration or variation made pursuant to this Rule shall be
subject to the prior approval of the Board of the Inland Revenue.
(D) Every alteration or valuation made pursuant to this Rule shall not
notified by the Company to the Participants.
Takeover and Liquidation
9(A) If at any time either:
(a) a general offer is made to acquire the whole of the issued
ordinary share capital of the Company or the part thereof
which is not already owned by offer or and/or any company
controlled by the offer or and/or persons acting in concert
with the offer or and such offer has become or declared
unconditional, or
(b) any Scheme of Arrangement shall become effective whereby more
than 25 per cent of the issued ordinary share capital of the
Company carrying a right to vote in general meetings of the
Company shall become vested in another person or in any
combination of persons acting in concert:
(i) subject to paragraphs (A) and (D) of Rule 7 a
Participant may at any time within six months of the
date upon which the offer becomes unconditional or
the Scheme becomes effective exercise any outstanding
Options (either in whole or in part) which are then
held by him; and
(ii) the Company shall use its best endeavours to procure
that the offer or shall offer to acquire any Ordinary
Shares which are allocated to the Participant
pursuant to the exercise of an Option upon the same
terms as those upon which the Ordinary Shares were
acquired by the offer or pursuant to the said general
offer or Scheme of Arrangement.
(B) If the offer or becomes entitled or bound under Sections 428 to 430 of
the Companies Act 1985 to acquire any Ordinary Shares the Board shall
notify each Participant thereof forthwith upon the Board becoming aware
that the offer or is so entitled or bound and a Participant shall be
entitled (subject to paragraphs (A) and (D) of Rule 7) to exercise all
or any of the outstanding Options which he holds at any time that the
offer or is so entitled or bound. Upon the offer or ceasing to be
either so entitled or bound all unexercised Options (if not already
lapsed) shall lapse.
(C) If under Section 425 of the Companies Act 1985 the Court sanctions a
comprise or arrangement proposed for the purpose of or in connection
with a scheme for the reconstruction of the Company or its amalgamation
with any other company or companies a Participant may (subject to
paragraphs (A) and (D) or Rule 7) to exercise all or any of the
outstanding Options which he holds within the period of six months
following the date of sanction by the court and upon the expiry of such
period all unexercised Options (if not already lapsed) shall lapse.
(D) In the event of a voluntary winding up of the Company for the purposes
of a reorganisation or reconstruction and subject to the prior approval
of the Board of the Inland Revenue, such adjustment shall be made to
any unexercised Option (including the number or class of shares
comprised therein and the Option Price payable therefor) as the
Auditors shall on the request of the Board certify in writing to be
fair and reasonable.
(E) If a notice of a meeting to consider a resolution for any other
voluntary winding up of the Company shall be given the Board shall give
notice thereof to all Participants and thereupon each Participant may
forthwith and until the commencement of the winding up be entitled
(subject to paragraphs (A) and (D) of Rule 7) to exercise any
outstanding Option then held by him before the date on which such
resolution is duly passed. Subject to the foregoing provisions of this
Rule all Options shall lapse on the winding up of the Company.
(F) Upon the happening of any of the events referred to in paragraphs (A)
and (D) of this Rule the effect thereof shall be notified by the
Company to the Participants.
Rights Attaching to Shares Allotted Pursuant to an Option
10. All shares allotted pursuant to the exercise of any Option shall as to
voting, dividend, transfe, and other rights including those arising in
the liquidation of the Company, rank pari passu in all respects and as
to one class with the Ordinary Shares in issue as at the date of such
allotment, save that any allotment made after the earlier of the date
of announcement of a proposed dividend or other distribution and the
Record Date thereof shall be made upon terms that the shares so
allocated are not entitled to participate therein.
Availability of Shares
11. The Company will at all times keep sufficient authorised but unissued
Ordinary Shares to permit the exercise of all unexercised Options.
Listing
12. The Company will at its expense make application to National
Association of Securities Dealers Inc. for shares allotted pursuant to
the exercise of any Option or American Depositary Shares representing
such shares to be listed on the National Association of Securities
Dealers Automated Quotation System. The Company will at its expense
make application the Council of The Stock Exchange for shares allotted
pursuant to the exercise of any Option, or American Depositary Shares
representing such shares, to be admitted to the Official List if at the
time of such allotment any Ordinary Shares or American Depositary
Shares representing such shares are so listed.
General
13. If a Participant shall cease for any reason to be in Employment he
shall not be entitled by way of compensation for loss or otherwise
howsoever, to any sum or benefit to compensate him for the loss of any
right or benefit under the Plan or the lapse of any Option.
14. The Company shall maintain all necessary books of account and records
relating to the Plan.
15. The Plan shall in all respects be administered by the Board which may
make such rules not being inconsistent with the terms and conditions
hereof for the conduct of the Plan as the Board thinks fit. Any dispute
regarding the interpretation of these Rules or the terms of any Option
shall be determined by the Board (upon such advice as it shall consider
necessary) and its decision shall be final and binding.
16. The Board may alter this Plan in any respect except that: -
(i) save to the extent that may be necessary in order to obtain or
maintain approval by the Board of the Inland Revenue under
Schedule 10 to the 1984 Act, no alteration will be made to the
following without the previous sanction of the Company in
general meeting: to the definitions of "Eligible Employee" ,
"Full Time Director" , "Qualifying Employee", "Option Price"
or "Relevant Emoluments" or to any of Rules 3, 4(B), (C), (D)
and (F), 5, 7, 9, 10, 15 and 16 which would be an alteration
to the advantage of Eligible Employees and Participants;
(ii) no alteration may be made which would alter to the
disadvantage of a Participant any rights
already accrued to him except with his prior written consent;
(iii) following the approval of the Plan under the provisions of
Schedule 10 to the 984 Act no alteration may be made without
the prior approval of the Board of the Inland Revenue.
17. A Participant who is a director of the Company may, notwithstanding his
interest, vote on any Board resolution concerning the Plan (other than
in respect of his own participation therein) and may retain any
benefits under the Plan.
18. The Board of the Company in General Meeting may at any time terminate
the Plan and in such event no further Option will be granted but the
subsisting rights of Participation will not thereby be affected.
19. (A) Participants shall be entitled while they have subsisting
rights under the Plan to receive copies of all notices and
other documents sent by the Company to its Ordinary
Shareholders.
(B) Any notice or document to be given to a Participant or
Eligible Employee may be delivered to him by hand or sent to
him by post at his last known address according to the
information provided by him. Any notice or document sent by
post shall be deemed to have been received 48 hours after
posting.
Private & Confidential
DATED 23 JUNE 1999
HUNTINGDON LIFE SCIENCES LIMITED (1)
and
HUNTINGDON LIFE SCIENCES GROUP PLC (2)
AGREEMENT
for the sale of
Freehold Property
known as
Stamford Lodge, Altrincham Road
Wilmslow, Macclesfield
in the County of Cheshire
Wragge & Co
<PAGE>
THIS AGREEMENT is made 23 June 1999
BETWEEN:
(I) HUNTINGDON LIFE SCIENCES LIMITED (registered number 1815730)
whose registered office is at Woolley Road Alconbury Huntingdon
Cambridgeshire PE 18 6ES ("the Vendor")
(2) HUNTINGDON LIFE SCIENCES GROUP PLC whose registered office is at Woolly
Road Alconbury Huntingdon Cambridgeshire PE18 6ES ("the Purchaser")
IT IS AGREED that:
1 Interpretation
1.1 In this Agreement unless the context otherwise requires:
(a) words importing any gender include every gender
(b) words importing the singular number also include the plural
number and vice versa
(c) words importing persons include firms companies and
corporations and vice versa
(d) references to numbered clauses and schedules are to the
relevant numbered clause in or schedule to this Agreement
(e) where any obligation is undertaken by two or more persons
jointly those persons shall be jointly and severally liable
in respect of that obligation
(f) the headings to the clauses and schedules shall not affect
the interpretation
1.2 In this Agreement unless the context otherwise requires the following
expressions shall have the following meanings:
(a) "Completion" means actual completion of the sale the subject of this
Agreement
(b) "Completion Date" means 30 July 1999 or earlier by agreement
(c) "Completion Money" means the Price payable on Completion
(d) "National Conditions" means the National Conditions of Sale (20th
Edition) and all references in the National Conditions to "the
property" shall be deemed to be references to the Property;
(e) "Nominated Account" means the Vendor's Solicitors' client account
number 0660947 at Lloyds Bank plc Colmore Row Branch Birmingham sort
code 30-00-03 or such other client account or accounts of the Vendor's
Solicitors as they may specify
(f) "Price" means the sum of(pound)4,250,000 (four million two hundred and
fifty thousand pounds)
(g) "Property" means the property described in the Transfer
(h) "Purchaser's Solicitors" means Wragge & Co or such other solicitors as
the Purchaser shall appoint in relation to the purchase of the Property
(i) "Title Matters" means any covenants easements rights or other matters
affecting the Property or of which the Property has the benefit which
are contained or referred to in the documents listed in the Transfer
(j) "Transfer" means the transfer of the Property by the Vendor under this
Agreement in the form annexed to Schedule 1
(k) "Vendor's Solicitors" means Wragge & Co of 55 Colmore Row Birmingham B3
2AS or such other solicitors as the Vendor shall appoint in relation to
the sale of the Property
(l) "Working day" has the meaning given by the National Conditions (as
amended by this Agreement)
(m) "1994 Act" means the Law of Property (Miscellaneous Provisions) Act
1994
2 Sale and Purchase
2.1 The Vendor will sell and the Purchaser will purchase the Property for
the Price on the terms of this Agreement
3. Completion
3.1 The sale and purchase shall be completed and the Completion Money paid
on or before 1.00p.m. on the Completion Date
3.2 The Completion Money shall be paid by electronic funds transfer to the
Nominated Account
4. Application of the National Conditions
4.1 The Property is sold subject to the National Conditions so far as they
are not varied by or inconsistent with this Agreement and are
applicable to a sale by private treaty
4.2 National Conditions 1(6), 3, 5(3), 5(4), 5(5), 6(1), 6(2), 8(4), 9(2),
11, 15(2), 15(3), 15(4), 17, 21(2) and 21(3) shall not apply to this
Agreement
4.3 The prescribed rate of interest specified in definition (4) of the
National Conditions shall for the purposes of the National Conditions
be four per cent per annum above the Base Lending Rate from time to
time of Lloyds Bank pIc
4.4 The words "but excluding any day upon which the Land Registry would be
open to the public but for strike lock-out or other stoppage)" shall be
added at the end of definition (6) of the National Conditions
5. Title
5.1 The Vendor is registered at HM Land Registry as Proprietor of the
Property with Absolute Title under Title Number CH410069 and is
currently in the course of registration in respect of a small parcel of
land to the east of Altrincham Road under title number CH438940 (also
comprising the Property) and the abstract of the Vendor' s title shall
consist of an office copy of the subsisting entries on the Registers of
title number CH4l0069 and of the filed plan and copies of the Vendor's
application to HM Land Registry in respect of that part of the Property
pending registration under title number CH438940
5.2 The Property is sold subject to and where appropriate with the benefit
of:
(a) all matters capable of registration as Local Land Charges or otherwise
whether registered or not and every charge, notice, direction order,
restriction, condition and other matter of whatsoever nature affecting
the Property capable of discovery by search or enquiry of any local or
other authority or statutory undertaker and the Purchaser shall be
deemed to purchase with full knowledge thereof whether or not any
search or enquiry has been made
(b) all notices served and proposals requirements or agreements made by or
(as the case may be) with any competent authority
(c) all overriding interests as defined in section 70(1) of the Land
Registration Act 1925 as amended
(d) all matters affecting the Property which are capable of discovery by an
inspection of the property and/or by any search or enquiry which a
prudent purchaser would make on the acquisition of the Property or
which would be made on its behalf
(e) the Title Matters
but otherwise with vacant possession
5.3 The Purchaser shall accept the Title of the Vendor to the Property
which has been deduced in full to the Purchaser and shall not raise any
requisition or objection in respect of the Title to the Property except
in respect of matters arising in the period between the date of this
Agreement and Completion
5.4 The Purchaser is deemed to have inspected the Property whether or not
the Purchaser has in fact done so and shall be deemed to buy with full
knowledge in all respects of the authorised use of the Property for the
purposes of the legislation relating to the Town and Country Planning
legislation
5.5 The Vendor shall sell with full title guarantee provided always that
Section 2(1)(b) of the 1994 Act shall apply as if the words "will at
the cost of the person to whom the disposition is made" were
substituted for the words "will at its own cost" and the transfer shall
expressly provide
6 Transfer
6.1 The Transfer shall be in the form attached to Schedule 1
6.2 The Purchaser shall at the Purchaser's expense prepare execute stamp
and deliver to the Vendor within seven days after Completion a
duplicate of the Transfer
The Vendor shall only be required to execute one Transfer of the whole
of the Property
7 Non-Merger
7.1 The obligations of the Vendor and the Purchaser shall continue
notwithstanding Completion insofar as they remain to be performed and
observed
8 No Representations
8.1 This Agreement incorporates the entire contract between the parties and
the Purchaser acknowledges that the Purchaser has not entered into this
Agreement in reliance on any advertisement or other matter issued by
the Vendor or the Vendor' s agents or in reliance on any statements or
representations made to the Purchaser by either of them save those
written statements of the Vendor's Solicitors made before the date of
this Agreement in reply to any written enquiries raised by the
Purchaser's Solicitors
If there are any side letters relating to this transaction it is
expressly agreed that although they may have legal force as
representations collateral contracts or in some other way they do not
form part of this Agreement
9 Apportionment
The Vendor and the Purchaser agree the proportion of the Price to be
allocated to the land comprised within the Property is 100% and the
proportion of the Price to be attributed to the buildings situate
within the Property is nil.
AS WITNESS the hands of the parties
SIGNED by.............................)
for and on behalf of the Vendor )
SIGNED by.............................)
for and on behalf of the Purchaser )
<PAGE>
Schedule 1
Form of Transfer
<PAGE>
1. Stamp Duty
Place "X" in the box that applies and complete the box in the appropriate
certificate.
I/We hereby certify that this instrument falls within category
Instruments) Regulations 1987
in the Schedule to the Stamp Duty (Exempt
It is certified that the transaction effected does not form part of a
larger transaction or of a series of transactions in respect of which the
amount or value or the aggregate amount or value of the consideration exceeds
the sum of
(pound)
2. Title Number(s) of the Property (leave blank if not yet registered)
CH410069 Ch438940
3. Property
Stamford Lodge, Altrincham Road, Wilmslow
Parcel of Land to the east of Altrincham Road, Wilmslow
4. Date
5. Transferor (give full names and Company's Registered Number if any)
Huntingdon Life Sciences Limited whose registered office is at Woolley Road,
Alconbury, Huntingdon, Cambridgeshire PE18 6ES (Company Registration
No. 1815730)
6. Transferee for entry on the register (Give full names and Company's
Registered Number if any; for Scottish Co.
Huntingdon Life Sciences Group plc (Company Registration No. )
7. Transferee's intended address(es) for service in the U.K.
(including postcode) for entry on the register
Woolley Road, Alconbury, Huntingdon, Cambridgeshire PE18 6ES
8. The Transferor transfers the property to the Transferee.
9. Consideration (Place "X" in the box that applies. State clearly the
currency unit of other than sterling. If none of the boxes applies, insert
an appropriate memorandum in the additional provisions panel.)
The Transferor has received from the Transferee for the property the sum
of (in words and figures) Four million two hundred and fifty thousand
pounds ((pound)4,250,000) (insert other receipt as appropriate)
The Transfer is not for money or anything which has a monetary value
10. The Transferor transfers with (place "X" in the box which applies and
add any modifications)
X Full Title Guarantee
provide always that:
Section 2(1)(b) of the Law of Property (Miscellaneous Provisions) Act 1994
shall apply as if the words "will at the cost of the person to whom the
disposition is made" were substituted for the words "will at its own cost"
11. Declaration of trust Where there is more than one transferee, place "X"
in the appropriate box.
12. Additional Provision(s) Insert here any required or permitted statement,
certificate or application and any
13. The Transferors and all other necessary parties should execute this transfer
as a deed using the space below. Forms of execution are given in Schedule
3 to the Land Registration Rules 1925. If the transfer contains
transferee's covenants or declarations or contains an application by
them (e.g. for a restriction), it must also be executed by the Transferees.
EXECUTED as a DEED )
by the Transferor acting by )
two directors or one director )
and its secretary )
.......................................
Director
.......................................
Director / Secretary
EXECUTED as a DEED )
by the Transferee acting by )
two directors or one director )
and its secretary )
.......................................
Director
.......................................
Director / Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000718083
<NAME> HUNTINGDON LIFE SCIENCES GROUP PLC
<CURRENCY> POUNDS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 0.62
<CASH> 5,258,000
<SECURITIES> 0
<RECEIVABLES> 15,399,000
<ALLOWANCES> 115,000
<INVENTORY> 803,000
<CURRENT-ASSETS> 23,403,000
<PP&E> 121,070,000
<DEPRECIATION> 52,101,000
<TOTAL-ASSETS> 98,635,000
<CURRENT-LIABILITIES> 41,308,000
<BONDS> 31,023,000
0
0
<COMMON> 14,550,000
<OTHER-SE> (5,334,000)
<TOTAL-LIABILITY-AND-EQUITY> 98,635,000
<SALES> 0
<TOTAL-REVENUES> 58,215,000
<CGS> 51,517,000
<TOTAL-COSTS> 60,036,000
<OTHER-EXPENSES> 687,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,930,000
<INCOME-PRETAX> (6,438,000)
<INCOME-TAX> (2,343,000)
<INCOME-CONTINUING> (4,095,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,095,000)
<EPS-BASIC> 0.014
<EPS-DILUTED> 0.014
</TABLE>
