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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June, 2000
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AMVESCAP PLC
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(Translation of registrant's name into English)
11 DEVONSHIRE SQUARE, LONDON EC2M 4YR, ENGLAND
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F _X_ Form 40-F ___
[Indicate by check mark whether registrant by furnishing the Information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes ___ No _X_
[If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- N/A
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Description of document filed: AMVESCAP PLC LISTING PARTICULARS
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN
ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR
OWN FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER,
SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER DULY AUTHORISED
UNDER THE FINANCIAL SERVICES ACT 1986.
If you have sold or otherwise transferred all of your AMVESCAP Ordinary Shares,
please send this document and the accompanying documents as soon as possible to
the purchaser or transferee or to the stockbroker, bank or other agent through
whom the sale or transfer was effected for delivery to the purchaser or
transferee. However, such documents should not be distributed, forwarded to or
transmitted in or into Australia or Japan.
A copy of this document, which comprises a circular and listing particulars
relating to AMVESCAP PLC prepared in accordance with the Listing Rules made
under section 142 of the Financial Services Act 1986, has been delivered to the
Registrar of Companies in England and Wales for registration in accordance with
section 149 of that Act.
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AMVESCAP PLC
Issue of up to 105,228,882 new ordinary shares of 25 pence each
in AMVESCAP PLC and issue of a special voting share of 25 pence
in AMVESCAP PLC pursuant to the acquisition by
AMVESCAP PLC of Trimark Financial Corporation
Circular to AMVESCAP PLC Shareholders and Listing Particulars
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Notice of an Extraordinary General Meeting of the Company is set out at the end
of this document. This will be held at 11 Devonshire Square, London EC2M 4YR on
20 July 2000 at 11.00 a.m. The enclosed Form of Proxy for use at the
Extraordinary General Meeting should be completed and returned to the Company's
registrars, IRG plc, (Proxies) PO Box 25, Beckenham, Kent BR3 4BR, as soon as
possible and in any event so as to be received no later than 11.00 a.m. on 18
July 2000.
THIS DOCUMENT SHOULD BE READ AS A WHOLE AND IN FULL. YOUR ATTENTION IS DRAWN TO
THE LETTER FROM THE CHAIRMAN OF AMVESCAP WHICH IS SET OUT IN PART I AND WHICH
RECOMMENDS YOU TO VOTE IN FAVOUR OF THE RESOLUTION TO BE PROPOSED AT THE
EXTRAORDINARY GENERAL MEETING REFERRED TO ABOVE.
Application has been made to the UKLA and London Stock Exchange respectively
for the New AMVESCAP Ordinary Shares to be admitted to the Official List of the
UKLA and to trading on the London Stock Exchange. Application has also been
made to the Paris Bourse for the New AMVESCAP Ordinary Shares to be admitted to
the Premier Marche of the Paris Bourse. The New AMVESCAP Ordinary Shares will
only be made available to Trimark Securityholders and will not be generally
made available or marketed to the public in the United Kingdom. It is expected
that Admission will become effective and dealings will commence in the New
AMVESCAP Ordinary Shares on 1 August 2000.
The offer of New AMVESCAP Ordinary Shares, pursuant to the Merger, is not being
made directly or indirectly in or into Australia or Japan. This document and
the accompanying documents are not being, and must not be, mailed or otherwise
distributed or sent in or into Australia or Japan. The New AMVESCAP Ordinary
Shares to be issued pursuant to the Merger have not been and will not be
registered under the United States Securities Act of 1933 as amended, or under
the relevant securities laws of any state or other jurisdiction of the United
States, and no prospectus in relation to the New AMVESCAP Ordinary Shares has
been lodged with, or registered by, the Australian Securities Commission or any
securities authority in Japan. The New AMVESCAP Ordinary Shares will be offered
and issued in the United States pursuant to an exemption from the registration
requirements of the United States Securities Act of 1933 as amended. The New
AMVESCAP Ordinary Shares may not be offered, sold or delivered, directly or
indirectly, in or into Australia or Japan or in any other country outside the
United Kingdom where such distribution may lead to a breach of any law or
regulatory requirement.
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CONTENTS
SECTION PAGE
PART I 6
Letter from the Chairman of AMVESCAP PLC 6
1. Introduction 6
2. Information on AMVESCAP 6
3. Information on Trimark 7
4. Background to and Benefits of the Merger 7
5. Terms of the Merger 8
6. The New AMVESCAP Ordinary Shares 9
7. The Exchangeable Shares 9
8. The Debentures 10
9. Special Voting Share 10
10. Current Trading and Prospects 11
11. Extraordinary General Meeting 11
12. Action to be Taken 12
13. Further Information 12
14. Commitment and intentions to vote in favour 12
15. Recommendation 12
PART II 13
Details of the Merger 13
1. Merger Agreement 13
2. Support Agreement 13
3. Voting and Exchange Trust Agreement 14
4. The Indenture 14
5. Further Details of the Exchangeable Shares 15
6. Details of the Special Voting Share 16
PART III 18
Financial Information relating to the AMVESCAP Group 18
A. Financial Information for the three years ended 31 December 1999 18
- Consolidated Statements of Profit and Loss 18
- Consolidated Balance Sheets 19
- Consolidated Statements of Total Recognised Gains and Losses 19
- Consolidated Statements of Shareholders' Funds 20
- Consolidated Statements of Cash Flows 21
- Notes to the Consolidated Financial Statements 22
1. Significant Accounting and Reporting Policies 22
2. Segmental Information 23
3. Investment Income 23
4. Interest Payable 23
5. Directors and Employees 24
6. Taxation 24
7. Dividends 24
8. Earnings per Share 25
9. Goodwill 25
10. Investments (held as fixed assets) 26
11. Tangible Assets 27
12. Debtors 27
13. Creditors: amounts falling due within one year 27
14. Long-term Debt 28
15. Provisions for Liabilities and Charges 28
16. Share Capital 28
17. Reconciliation of Net Cash Flow to Movement in Net Debt 29
18. Analysis of Net Debt 29
19. Commitments and Contingencies 30
20. Financial Instruments 31
21. Reconciliation to US Accounting Principles 33
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SECTION PAGE
B. Financial Information for the three months ended 31 March 2000 34
- Unaudited Group Profit and Loss Account 34
- Unaudited Group Balance Sheet 35
- Unaudited Group Cash Flow Statement 36
- Notes 36
- Reconciliation to US Accounting Principles 37
PART IV 38
Financial Information on Trimark 38
A. Financial Information for the three years ended 31 March 2000 38
- Consolidated Balance Sheets 39
- Consolidated Statements of Income and Retained Earnings 40
- Consolidated Statements of Cash Flows 41
- Notes to Consolidated Financial Statements 42
1. Operations 42
2. Summary of Significant Accounting Policies 42
3. Other Assets 44
4. Fixed Assets 44
5. Marketable and Investment Securities 45
6. Loans 45
7. Allowance for Loan Losses 46
8. Total Current Liabilities 46
9. Deposit Liabilities 46
10. Bank Term Loan 46
11. Share Capital 47
12. Sale of Assets 48
13. Income Taxes 48
14. Lease Commitments 49
15. Financial Instruments 49
16. Contingent Liability 50
17. Comparative Financial Statements 50
18. Subsequent Event 50
B. Reconciliation to UK accounting principles and conformity to
AMVESCAP PLC accounting policies 51
Ernst & Young Accounting Policies Reconciliation Letter 53
PART V 55
Pro Forma Financial Statements 55
- Pro Forma Consolidated Balance Sheet (UK GAAP) 56
- Pro Forma Consolidated Statement of Earnings (UK GAAP) 57
- Notes to the Pro Forma Consolidated Financial Statements 58
1. Basis of Presentation 58
2. Pro Forma Assumptions and Adjustments 58
Letter from Arthur Andersen 60
PART VI 61
Additional Information 61
1. Responsibility 61
2. Directors 61
3. The Company 65
4. Share Capital of AMVESCAP 65
5. Memorandum and Articles of Association 72
6. The Company's Share Option Plans 76
7. Directors' and Other Interests 82
8. United Kingdom Taxation 86
9. Material Contracts 88
10. Working Capital 92
11. Subsidiaries 92
12. Principal Establishments 94
13. Miscellaneous 94
14. Documents available for Inspection 95
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SECTION PAGE
PART VII 96
Definitions 96
PART VIII 99
NOTICE OF EXTRAORDINARY GENERAL MEETING 99
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN THE UNITED KINGDOM
Latest time and date for receipt of Forms of Proxy 11.00 am on 18 July 2000
Extraordinary General Meeting 11.00 am on 20 July 2000
Admission and dealings in New AMVESCAP 2.30 p.m. on 1 August 2000
Ordinary Shares commence on the London
Stock Exchange
Despatch by post of definitive share 1 August 2000
certificates for the New AMVESCAP Ordinary Shares
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN FRANCE
Admission and dealings in New AMVESCAP 3.30 p.m. (Paris time)
Ordinary Shares commence on the on 1 August 2000
Paris Bourse
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN CANADA
Trimark Securityholders' meeting held to approve Merger 24 July 2000
Ontario Superior Court of Justice hearing
of final order for approval of the Plan 26 July 2000
Effective Date of the Plan 1 August 2000
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PART I
LETTER FROM THE CHAIRMAN OF AMVESCAP PLC
AMVESCAP PLC
(incorporated and registered in England under the
Companies Act 1929 with registered number 308372)
Directors Registered and Head Office:
Charles William Brady (Chairman) 11 Devonshire Square
Charles Theodore Bauer London EC2M 4YR
Sir John Michael Middlecott Banham
The Hon. Michael D'Arcy Benson
Joseph Rodney Canion
Michael John Cemo
Gary Thomas Crum
Adolphus Drewry Frazier Jr.
Robert Hart Graham
Roberto Alejandro de Guardiola
Hubert Lamar Harris, Jr.
Bevis Longstreth
Robert Fry McCullough
Stephen Kingsbury West
Alexander Moss White
Company Secretary
Michael Stephen Perman
23 June 2000
To AMVESCAP Shareholders, participants in the UK and Irish AMVESCAP Share
Participation Schemes and, for information only, to Trimark Securityholders and
holders of options under the AMVESCAP Share Option Schemes.
Dear Shareholder
PROPOSED ACQUISITION OF TRIMARK FINANCIAL CORPORATION
1. INTRODUCTION
On 9 May 2000 AMVESCAP PLC and Trimark Financial Corporation announced that
they had reached agreement for AMVESCAP to acquire Trimark, in a transaction
valued at approximately C$2.7 billion ({pound sterling}1.16 billion) based on
AMVESCAP's closing share price on 8 May 2000. The consideration for the
proposed Merger is comprised of a combination of cash, New AMVESCAP Ordinary
Shares, new shares issued by Exchangeco (a newly created Canadian subsidiary of
AMVESCAP) which are exchangeable for New AMVESCAP Ordinary Shares, and equity
subordinated debentures issued by Exchangeco. This consideration, valued in
aggregate at C$27 per Trimark Share on 9 May 2000, may be elected for by
Trimark Shareholders subject to certain limits which are explained later in
this document.
The Merger, unanimously recommended by the boards of AMVESCAP and Trimark, is
subject to approval by Trimark Securityholders, Canadian Court approval and
certain regulatory approvals and is also conditional upon the Special
Resolution set out in the Notice of Extraordinary General Meeting at the end of
this document, being passed by AMVESCAP Shareholders.
Further details of the Merger, including a summary of the conditions, and
further terms and background to the Special Resolution, are set out later in
this letter and in Part II of this document.
2. INFORMATION ON AMVESCAP
AMVESCAP is one of the world's largest independent investment management
companies, with US$391.6 billion of assets under management at 31 March 2000.
AMVESCAP provides its clients with a broad array of domestic, foreign and
global investment products in each country in which it operates. It has a
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significant presence in the institutional and retail segments of the investment
management industry in North America, Europe and Asia. AMVESCAP's business is
focused entirely on investment management.
On 19 April 2000 AMVESCAP announced its results for the three months to 31
March 2000 reporting that profit before tax and goodwill amortisation amounted
to {pound sterling}124.7 million compared to {pound sterling}69.7 million for
the first quarter of 1999. Revenues increased to {pound sterling}369.5 million
from {pound sterling}241.1 million in the first quarter of 1999. Diluted
earnings per share before goodwill amortisation amounted to 12.5p for the first
quarter of 2000 (1999: 7.1p), an increase of 76% compared to the first quarter
of 1999.
The above figures are extracted without material adjustment from the interim
financial statements of AMVESCAP for the 3 months ended 31 March 2000. Further
financial information on AMVESCAP is set out in Part III of this document.
Recipients of this document should not just rely on the summary but should read
carefully the whole of this document.
3. INFORMATION ON TRIMARK
Trimark is a Canadian financial services company which began its operations in
1981 and now stands as Canada's sixth largest investment management company in
terms of assets under management. It is currently a public company listed on
the Toronto Stock Exchange.
Trimark has two principal wholly owned Canadian operating subsidiaries, namely
Trimark Investment Management Inc. ("TIMI"), which is the manager of its mutual
funds business, and Trimark Trust, a Canadian regulated trust company, which
earns investment income from its loan and investment portfolios. TIMI is the
sponsor, manager and distributor of 35 mutual funds in Canada. It also
sponsors, manages the portfolios of and administers 23 segregated funds in
partnership with AIG Life Insurance Company of Canada. TIMI derives its revenue
primarily from management fees received for the ongoing investment management
services provided to the funds, which are based on a percentage of net assets
for each of the funds.
The Trimark mutual funds may be categorised into the following seven groups:
international equity funds, specialty international equity funds, Canadian
equity funds, specialty Canadian equity funds, balanced funds, fixed income
funds and 100% registered retirement savings plan funds. TIMI had approximately
2.2 million unitholder fund accounts as at 31 March 2000.
Trimark has over 800 permanent and part time employees located throughout
Canada. Robert Krembil, (the current chairman and chief executive officer of
Trimark) will continue to have a role in the business after the Merger and, in
particular, will serve as chairman of the merged Canadian companies and will
continue to oversee the portfolio management of the Trimark mutual funds.
It is also anticipated that TIMI personnel responsible for investment
decision-making and portfolio management of the Trimark funds will continue to
manage the portfolios of the Trimark mutual funds after the Merger in
accordance with the investment objectives and restrictions of the applicable
funds.
Trimark announced the results of its operations for the year ended 31 March
2000 on 9 May 2000. Revenue for the financial year then ended was C$547.5
million, net income was C$95.1 million and fully diluted earnings per share
amounted to C$0.97. Mutual fund assets under management were C$24.8 billion at
31 March 2000 and Trimark's net assets were C$394.8 million at the same date.
The above figures are extracted without material adjustment from the financial
statements of Trimark for the year ended 31 March 2000. Further financial
information on Trimark is set out in Part IV of this document. Recipients of
this document should not just rely on the summary but should read carefully the
whole of this document.
4. BACKGROUND TO AND BENEFITS OF THE MERGER
AMVESCAP believes that, in an increasingly consolidating global marketplace, a
firm's size, market position, brands and financial strength are critical; the
combination of AMVESCAP and Trimark will enhance AMVESCAP's market position in
Canada significantly by joining the AIM and Trimark brands, expanding channels
of product distribution to key independent financial advisors and broadening
the platform for the distribution of global products, and that economies of
scale will be achieved in addition to enhanced distribution and product
diversification.
The combined assets of AIM Funds Management Inc. (AMVESCAP's existing business
in Canada) and Trimark will position AMVESCAP as the second largest investment
management company in the Canadian
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marketplace in terms of assets under management. The acquisition is in line
with AMVESCAP's strategy to secure a leading position in each of the world's
major investment markets.
The Canadian equity mutual fund market is the third largest in the world in
terms of the value of assets under management and AMVESCAP expects that the
Canadian mutual fund industry's assets will grow over the next 5 years. Mutual
funds are the investment vehicle of choice in Canada for a number of reasons:
o As more than 40% of adult Canadians invest through mutual funds, mutual funds
are a relatively well known and well-understood vehicle in Canada; and
o Long term saving is supported through government tax policy.
Following the acquisition of Trimark, it is anticipated that AMVESCAP will have
funds under management of approximately US$410 billion ({pound sterling}256
billion) based on 31 March 2000 market levels, reinforcing its position as one
of the largest independent investment management businesses in the world.
The impact of the Merger on AMVESCAP's diluted earnings per share, before
goodwill amortisation and the cost of the integration of the business, is
expected to be slightly accretive.
5. TERMS OF THE MERGER
The Merger Agreement values each Trimark Share at C$27 as at 9 May 2000
compared with the closing price of a Trimark Share on 8 May 2000, the last
business day before the announcement of the Merger, of C$24.25.
The Merger is to be effected by means of a plan of arrangement under the
Business Corporations Act (Ontario) (the "Plan"). Following completion of the
Plan, AMVESCAP will indirectly own 100 per cent. of Trimark. Under the Plan,
Trimark Shareholders will be entitled to elect to receive for every Trimark
Share either:
(a) up to a maximum of C$27.00 in cash;
(b) up to a maximum of C$27.00 principal amount of Debentures;
(c) up to a maximum of a number of Exchangeable Shares equal to the Exchange
Ratio;
(d) up to a maximum of a number of New AMVESCAP Ordinary Shares equal to the
Exchange Ratio; or
(e) any combination thereof with a deemed aggregate value of C$27.00 as of
9 May 2000.
The elections made by Trimark Shareholders will not necessarily correspond to
the consideration each such Trimark Shareholder will receive as AMVESCAP has
agreed in the Merger Agreement to pay in aggregate a fixed amount of cash, set
a maximum aggregate limit in respect of each other element of the consideration
and issue Debentures only if Trimark Shareholders elect for more than C$100
million of Debentures, all as described below and in Part II of this document.
The actual amount of cash, principal amount of Debentures, number of
Exchangeable Shares and New AMVESCAP Ordinary Shares which a Trimark
Shareholder will receive is dependent upon the elections made by all the other
Trimark Shareholders, so that where any cash or maximum aggregate limits are
exceeded as a result of such elections, the elections will be prorated down to
the relevant limit and the excess satisfied by another form of consideration as
described below.
AMVESCAP intends to satisfy the cash consideration (equal to C$7.50 for each
Trimark Share outstanding at the Effective Date), using AMVESCAP's existing
cash resources and borrowings under its existing US$700 million credit
facility. The maximum possible amount of cash that can be paid is approximately
C$762 million ({pound sterling}321 million), ignoring cash that may be required
to be paid to Dissenting Shareholders, and assuming that all Trimark Options
have been exercised by the Election Deadline and that there are no fractional
payments. If the cash elections exceed the fixed cash amount, the elections
will be prorated down to the fixed cash limit based on the amount of cash
elected for by each Trimark Shareholder, and the excess will be satisfied by
the issue of Exchangeable Shares.
Under Canadian law Dissenting Shareholders are entitled to be paid the "fair
value" for their Trimark Shares. In the event of a dispute, "fair value" would
be determined by a Canadian court. AMVESCAP Shareholders should note however
that completion of the Merger is conditional upon no more than 10% of those
Trimark Shareholders holding shares directly in Trimark exercising their
dissent rights under Canadian law. AMVESCAP believes that if this condition is
satisified the existing cash resources and
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borrowings of AMVESCAP will also be sufficient to cover any liability owed to
Dissenting Shareholders based on AMVESCAP's assessment of the likely maximum
level of Dissenting Shareholders.
As the fixed amount of cash that is being paid is equal to C$7.50 per Trimark
Share outstanding on the Effective Date, the remaining elements of the
consideration are limited in aggregate to a deemed value as of 9 May 2000 of
C$19.50 per Trimark Share outstanding on the Effective Date. This would mean,
for example, that if all the Trimark Options are exercised by the Election
Deadline and Trimark Shareholders elected for Debentures worth C$100 million or
less, a total of C$762 million ({pound sterling}321 million) in cash would be
paid and 105,228,882 AMVESCAP Ordinary Shares and Exchangeable Shares in
aggregate would be available for issue to the Trimark Shareholders.
AMVESCAP will not be responsible (subject to various limited exceptions) for
the payment of any applicable stamp, registration and transfer taxes and
duties, if any, upon the issue of the Exchangeable Shares, the Debentures or
the New AMVESCAP Ordinary Shares pursuant to the Merger.
6. THE NEW AMVESCAP ORDINARY SHARES
The actual number of New AMVESCAP Ordinary Shares to be issued on the Effective
Date is contingent on the form of consideration elected by each of the Trimark
Shareholders. The maximum possible number of New AMVESCAP Ordinary Shares that
could be issued on the Effective Date as a result of the Merger is limited to
105,228,882. This assumes that all the Trimark Options have been exercised by
the Election Deadline, elections are made for not less than such number by the
Trimark Shareholders and no Debentures or Exchangeable Shares are elected by
Trimark Shareholders.
If the number of New AMVESCAP Ordinary Shares elected by Trimark Shareholders
exceeds the maximum number available for election pursuant to the Merger, then
the maximum number of New AMVESCAP Ordinary Shares available shall be prorated
among such electing Trimark Shareholders. Such Trimark Shareholders will be
deemed to have elected to be paid cash for the shortfall in such circumstances.
The New AMVESCAP Ordinary Shares will be issued credited as fully paid and will
when issued rank in all respects pari passu with the existing issued AMVESCAP
Ordinary Shares including entitlement to dividends. The New AMVESCAP Ordinary
Shares will only be issued in certificated form.
Application has been made to the UKLA and the London Stock Exchange
respectively for the New AMVESCAP Ordinary Shares to be admitted to the
Official List of the UKLA and to trading on the London Stock Exchange.
Application has also been made to the Paris Bourse for the New AMVESCAP
Ordinary Shares to be admitted to the Premier Marche of the Paris Bourse. The
New AMVESCAP Ordinary Shares will only be made available to Trimark
Securityholders and will not be made generally available or marketed to the
public. It is expected that Admission will become effective and dealings
commence in the New AMVESCAP Ordinary Shares on 1 August 2000.
7. THE EXCHANGEABLE SHARES
The number of Exchangeable Shares to be issued on the Effective Date is also
contingent on the form of consideration elected by each of the Trimark
Shareholders. The maximum possible number of Exchangeable Shares that could be
issued on the Effective Date as a result of the Merger is limited to
105,228,882. This assumes that all Trimark Options have been exercised by the
Election Deadline, elections are made for not less than such number of
Exchangeable Shares by the Trimark Shareholders, Debentures worth C$100 million
or less have been elected for and no New AMVESCAP Ordinary Shares have been
elected by Trimark Shareholders. If the number of Exchangeable Shares elected
by Trimark Shareholders exceeds the maximum available for election pursuant to
the Merger, then the maximum number of Exchangeable Shares available shall be
prorated among such electing Trimark Shareholders. Such Trimark Shareholders
will be deemed to have elected to be paid cash for the shortfall in such
circumstances.
The Exchangeable Shares, which have been conditionally approved for listing on
and once listed will be tradeable on the Toronto Stock Exchange, are a Canadian
dollar denominated security issued by Exchangeco and as such are a different
class of share from the AMVESCAP Ordinary Shares. There is no intention to list
the Exchangeable Shares in London or elsewhere other than the Toronto Stock
Exchange. The Exchangeable Shares are being offered primarily to allow existing
Canadian Trimark Shareholders to participate in the future performance of
AMVESCAP in a tax efficient manner through holding a Canadian security. The
Directors view both the issued AMVESCAP Ordinary Shares and any Exchangeable
Shares
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and Debentures issued pursuant to the Merger as making up the Enlarged AMVESCAP
Group's equity capital base.
The Exchangeable Shares will be exchangeable into New AMVESCAP Ordinary Shares
on a one-for-one basis at the request at any time of the holder of an
Exchangeable Share provided that, a holder of an Exchangeable Share may not
exercise such exchange right if, as a result, AMVESCAP would be required to
file a registration statement under the Securities Act. They can be
compulsorily converted on or after 31 December 2009, or earlier at the option
of Exchangeco in certain circumstances, including if the number of Exchangeable
Shares in issue (other than those held by AMVESCAP and its affiliates) falls
below 5,000,000. AMVESCAP is required to reserve for issue an equivalent number
of New AMVESCAP Ordinary Shares to the number of Exchangeable Shares that are
issued in order to satisfy the exchange rights and to prepare further listing
particulars when the number of Exchangeable Shares converting into New AMVESCAP
Ordinary Shares would exceed 10% of the issued share capital of AMVESCAP.
The Exchangeable Shares will have similar rights and benefits to the existing
AMVESCAP Ordinary Shares. They will have a right to dividends equivalent to
those paid on AMVESCAP Ordinary Shares and, through the Special Voting Share
(described in paragraph 9 below), a vote at general meetings of AMVESCAP which
will give them equivalent voting rights to the holders of AMVESCAP Ordinary
Shares. In addition, where AMVESCAP, inter alia, seeks to issue additional
shares, is subject to a takeover offer, or reorganises its share capital,
AMVESCAP or Exchangeco will seek to put holders of Exchangeable Shares in a
similar position to AMVESCAP Shareholders. Apart from the voting mechanism of
the Special Voting Share, the holders of Exchangeable Shares have a right to
vote at general meetings of Exchangeco in limited situations where the rights
of such holders would be prejudiced by actions taken by AMVESCAP or Exchangeco.
Further details of the Exchangeable Shares are set out in paragraph 5 of Part
II of this document.
8. THE DEBENTURES
The number of Debentures to be issued on the Effective Date is also contingent
on the form of consideration elected by each of the Trimark Shareholders.
Debentures will only be issued if Trimark Shareholders collectively elect to
receive more than C$100 million of principal amount of Debentures. If elections
received for the Debentures would result in C$100 million worth of Debentures
or less being issued, then Exchangeable Shares subject to the share limitations
and prorations, will be issued in lieu and/or cash (if the share limitations
are then exceeded).
The maximum possible principal amount of Debentures that could be issued by
Exchangeco on the Effective Date is limited to C$1,320,222,000. This figure
assumes that all Trimark Options have been exercised on or before the Election
Deadline and elections are made for not less than such amount of Debentures by
Trimark Shareholders. If elections are made by Trimark Shareholders for
Debentures which exceed the maximum available for election pursuant to the
Merger, then the maximum principal amount of available Debentures shall be
prorated among such electing Trimark Shareholders. Such Trimark Shareholders
will be deemed to have elected to be paid in Exchangeable Shares (subject to
the share limitations and prorations) for the shortfall and/or cash (if the
share limits are then exceeded) in such circumstances.
The Debentures will be issued by Exchangeco and fully and unconditionally
guaranteed by AMVESCAP. The Debentures will be issued in principal amounts of
C$1000 and will bear interest at the rate of 6% per annum, payable
semi-annually, commencing six months after the Plan becomes effective. The
Debentures will be convertible into Exchangeable Shares at any time on the
basis set out in paragraph 4 of Part II of this document. The Exchangeable
Shares issued as a result of such conversion will rank pari passu with the
Exchangeable Shares already issued by Exchangeco and will have the same rights
as set out in paragraph 7 above. The Debentures have been conditionally
approved for listing on the Toronto Stock Exchange.
9. SPECIAL VOTING SHARE
In order to ensure that the holders of the Exchangeable Shares have equivalent
voting rights to the AMVESCAP Shareholders, one Special Voting Share of 25
pence is proposed to be created and issued by AMVESCAP. This Special Voting
Share will not be listed on any stock exchange and will be held by a trustee on
behalf of all the holders of the Exchangeable Shares and will have the rights,
privileges and restrictions set out in the Voting and Exchange Trust Agreement
which is briefly summarised in paragraph 6 of Part II of this document.
10
<PAGE> 12
In particular, the holder of the Special Voting Share shall on a poll have one
vote for every four Exchangeable Shares then outstanding that are owned by
holders of Exchangeable Shares other than AMVESCAP and its affiliates and as to
which the Trustee has received voting instructions from such holders. This
matches the rights of AMVESCAP Shareholders on a poll who have one vote for
every {pound sterling}1 nominal paid up which is held by such persons (i.e. one
vote for every 4 AMVESCAP Ordinary Shares held). On a show of hands, the holder
of the Special Voting Share or its proxy shall have one vote in addition to any
votes which may be cast by a holder of Exchangeable Shares (other than AMVESCAP
and its affiliates) or proxy for the holder of the Special Voting Share.
10. CURRENT TRADING AND PROSPECTS
AMVESCAP's unaudited results for the three months ended 31 March 2000 were
announced on 19 April 2000. Reported profit (before tax and goodwill
amortisation) for the first quarter of 2000 was {pound sterling}124.7 million
and diluted earnings per share (before goodwill amortisation) amounted to 12.5p
per share for the same period (an increase of 76 per cent compared to the first
quarter of 1999).
Trimark released its results for the year ended 31 March 2000 on 9 May 2000.
These results reflected income before tax of C$172.6 million and diluted
earnings per share of C$0.97 per share.
As at 31 March 2000, AMVESCAP and Trimark had assets under management of
US$391.6 billion and C$24.8 billion respectively.
Extracts from the financial statements of AMVESCAP and Trimark are included in
Parts III and IV respectively of this document.
Since the unaudited results of AMVESCAP for the period ended 31 March 2000 were
announced, AMVESCAP continues to believe that it is well placed to take
advantage of opportunities in an increasingly global marketplace and views the
prospects for the current year with confidence and enthusiasm. The acquisition
of Trimark will add considerable strength to the AMVESCAP Group's position in
Canada.
11. EXTRAORDINARY GENERAL MEETING
The Merger Agreement is conditional upon, among other things, the AMVESCAP
Shareholders passing the Special Resolution. Accordingly, you will find set out
at the end of this document a notice convening the Extraordinary General
Meeting of the Company to be held at 11 Devonshire Square, London EC2M 4YR on
20 July 2000 at 11.00 am at which the Special Resolution set out therein will
be proposed (i) to approve the Merger (ii), to increase the authorised share
capital of AMVESCAP from {pound sterling}212,700,000 to {pound
sterling}262,500,000 by the creation of 199,199,999 AMVESCAP Ordinary Shares
and 1 Special Voting Share (representing an increase of approximately 23.41 per
cent in AMVESCAP's current authorised share capital), (iii) to create a Special
Voting Share of 25 pence with the rights, privileges and restrictions attached
to it as set out in paragraph 6 of Part II of this document, (iv) to renew the
authorities granted to the Directors at the annual general meeting of the
Company held on 26 April 2000 (in substitution for such existing authorities)
so as to authorise the Directors pursuant to section 80 of the Act to allot
relevant securities up to an aggregate nominal amount of {pound
sterling}56,205,685.50 and to authorise the Directors pursuant to section 95 of
the Act to allot equity securities (otherwise than by way of a rights issue) of
up to {pound sterling}8,430,852.75, (v) to authorise the Directors, pursuant to
section 80 and 95 of the Act, to allot New AMVESCAP Ordinary Shares and
disapply the statutory pre-emption provisions up to a maximum nominal amount of
{pound sterling}26,307,220.75 (representing 105,228,882 New AMVESCAP Ordinary
Shares and one Special Voting Share), in connection with the Merger, and (vi)
to change the articles of association of the Company to include the rights of
the Special Voting Share. Paragraphs (ii) to (vi) of the Special Resolution
will be conditional upon the Plan becoming effective
If the Special Resolution is passed, the Directors will (in addition to the
authority referred to in paragraph (v) above in connection with the Merger)
have authority to allot in aggregate AMVESCAP Ordinary Shares up to a maximum
nominal amount of {pound sterling}56,205,685.50 (representing 224,822,742
AMVESCAP Ordinary Shares, or 33.21 per cent. of AMVESCAP's current issued
ordinary share capital) of which up to a maximum nominal amount of {pound
sterling}8,430,852.75 (representing 33,723,411 AMVESCAP Ordinary Shares or
approximately 4.98 per cent of AMVESCAP's current issued share capital) may be
allotted for cash other than pursuant to a rights issue. This is in
substitution for the existing authorities of the Directors to allot AMVESCAP
Ordinary Shares granted at the Annual General Meeting on 26 April 2000 and
summarised in paragraphs 4.5 and 4.6 of Part VI of this document.
11
<PAGE> 13
The Directors have no present intention of issuing any AMVESCAP Ordinary
Shares, or any securities convertible into or exercisable into or exchangeable
for AMVESCAP Ordinary Shares, other than in connection with the AMVESCAP Share
Option Schemes or the Merger.
In paragraph 4 of Part VI of this document are further details of the present
share capital of AMVESCAP, and as it might be upon successful completion of the
Merger.
12. ACTION TO BE TAKEN
AMVESCAP Shareholders will find enclosed with this document a Form of Proxy for
use at the Extraordinary General Meeting. WHETHER OR NOT YOU INTEND TO BE
PRESENT AT THE MEETING, YOU ARE REQUESTED TO COMPLETE THE FORM OF PROXY AND
RETURN IT IN ACCORDANCE WITH THE INSTRUCTIONS PRINTED THEREON SO THAT IT IS
RECEIVED BY IRG PLC, (PROXIES) PO BOX 25, BECKENHAM, KENT BR3 4BR AS SOON AS
POSSIBLE AND IN ANY EVENT SO AS TO ARRIVE NO LATER THAN 11.00 AM ON 18 JULY
2000. The completion and return of a Form of Proxy will not preclude you from
attending the Extraordinary General Meeting and voting in person should you
wish to do so.
13. FURTHER INFORMATION
Your attention is drawn to the additional information set out in Parts II to
VIII of this document.
14. COMMITMENT AND INTENTIONS TO VOTE IN FAVOUR
The trustee of the AMVESCAP Executive Share Option Trust (which holds
26,175,029 AMVESCAP Ordinary Shares) has undertaken to vote in favour of the
Special Resolution to be proposed at the Extraordinary General Meeting.
The management committee of the INVESCO ESOP (referred to in paragraph 6.11 of
Part VI of this document), which has discretion over 12,108,920 AMVESCAP
Ordinary Shares and 20,030 ADRs held in the INVESCO ESOP, currently intends to
direct the trustee to vote in favour of the Special Resolution to be proposed
at the Extraordinary General Meeting, subject to compliance with applicable
fiduciary duties.
The management committee of the Global Stock Plan (referred to in paragraphs
6.8 to 6.10 of Part VI of this document), which holds 9,824,231 AMVESCAP
Ordinary Shares and 58,274 ADRs, currently intends to direct the trustee to
vote in favour of the Special Resolution to be proposed at the Extraordinary
General Meeting, subject to compliance with applicable fiduciary duties.
As part of the AIM Merger, certain of the Directors and their family interests
undertook, pursuant to a Voting Agreement (referred to in paragraph 9.2 of Part
VI of this document), to vote on all resolutions of AMVESCAP Shareholders in
the same proportion as votes cast by other shareholders for or against the
relevant resolutions. They will authorise the Chairman as their proxy to cast
their votes accordingly on the Special Resolution.
15. RECOMMENDATION
Your Directors consider the Merger to be in the best interests of AMVESCAP and
its Shareholders as a whole and have unanimously approved the transaction.
Accordingly, your Directors recommend Shareholders to vote in favour of the
Special Resolution to be proposed at the Extraordinary General Meeting, as your
Directors (subject to the Voting Agreement referred to above) intend to do in
respect of their own beneficial holdings.
Yours faithfully
CHARLES W BRADY
EXECUTIVE CHAIRMAN
12
<PAGE> 14
PART II
DETAILS OF THE MERGER
The following is a brief summary of the Merger Agreement and material documents
to be entered into in connection with the Merger:
1. MERGER AGREEMENT
Under the Merger Agreement (which is governed by Canadian law), the Merger is
to be implemented by a plan of arrangement under the OBCA. The Plan provides
that the Trimark Shareholders may elect (subject to certain limitations) to
receive Exchangeable Shares, New AMVESCAP Ordinary Shares, Debentures or cash
or a combination thereof in exchange for their Trimark Shares. The Plan also
provides that any Trimark Option which is not exercised on or before the
Election Deadline will on the Effective Date become an option (exercisable at
the original exercise price (or, in certain very limited circumstances at an
increased price) of such Trimark Option) to purchase such number of AMVESCAP
Ordinary Shares as is equal to the Exchange Ratio multiplied by the number of
Trimark Shares subject to such Trimark Option.
In cases where fractional entitlements to New AMVESCAP Ordinary Shares and
Exchangeable Shares or entitlements to Debentures with a principal amount of
less than C$1,000 arise as a result of any Trimark Shareholder's election, the
fractional element will be paid in cash. Any such cash payment will be payable
in Canadian dollars and, in respect of Exchangeable Shares and New AMVESCAP
Ordinary Shares, will be equal to the fractional element multiplied by the
Current Market Price for the Effective Date.
CONDITIONS PRECEDENT AND ACTIONS PENDING COMPLETION
The Merger Agreement is subject to certain conditions precedent. These include
the prior approval of the Plan by two-thirds of the votes cast by Trimark
Securityholders in a special meeting and by the Ontario Superior Court of
Justice (which, amongst other things, will consider whether the Plan is fair to
the Trimark Securityholders), the passing of the Special Resolution by AMVESCAP
Shareholders, unitholder approvals of certain Trimark funds and certain
required regulatory approvals.
In certain circumstances, if the Merger Agreement is terminated, Trimark will
be required to pay break fees to AMVESCAP in the amount of C$100 million
({pound sterling}43 million).
If AMVESCAP Shareholders fail to approve the Merger, then, subject to certain
exceptions, AMVESCAP will be required to pay to Trimark break fees of C$5
million ({pound sterling}2 million).
If the Trimark Securityholders fail to approve the Merger, then subject to
certain exceptions, Trimark will be required to pay to AMVESCAP break fees of
C$5 million ({pound sterling}2 million).
Pending the implementation of the Merger, Trimark is under an obligation,
amongst other things, to continue to conduct its business in the ordinary
course. Subject to satisfaction of the conditions precedent, AMVESCAP is
obliged to enter into (and to cause Exchangeco and Callco as applicable, to
enter into) the Support Agreement, the Voting and Exchange Trust Agreement and
the Indenture on or prior to the Effective Date. Summary details of the Support
Agreement, the Voting and Exchange Trust Agreement and the Indenture are set
out in paragraphs 2, 3 and 4 below respectively.
WARRANTIES
The Merger Agreement contains certain warranties from AMVESCAP to Trimark and
from Trimark to AMVESCAP.
2. SUPPORT AGREEMENT
Under the Support Agreement to be entered into on the Effective Date between
AMVESCAP, Callco and Exchangeco, AMVESCAP will agree to ensure that Exchangeco
and Callco can satisfy their respective obligations in respect of the
Exchangeable Shares.
So long as any Exchangeable Shares not owned by AMVESCAP or its affiliates are
outstanding, AMVESCAP cannot declare or pay any dividend unless Exchangeco on
the same day declares or pays an equivalent dividend to holders of the
Exchangeable Shares. If there is a shortfall in Exchangeco's reserves on any
dividend declaration date then AMVESCAP is required to fund this shortfall to
the extent necessary to pay
13
<PAGE> 15
an economically equivalent dividend. If AMVESCAP pays a dividend in specie to
AMVESCAP Shareholders then a dividend of equivalent value must be paid to the
holders of the Exchangeable Shares.
If AMVESCAP is subject to a takeover offer, it must use all reasonable efforts
to enable the holders of the Exchangeable Shares to participate on economically
equivalent terms. Further, the Support Agreement contains an anti-dilution
covenant on the part of AMVESCAP which prevents AMVESCAP from issuing AMVESCAP
Ordinary Shares, convertible shares or options to AMVESCAP Shareholders;
distributing property to AMVESCAP Shareholders; or altering its share capital
structure, in each case without either (a) the approval of the holders of the
Exchangeable Shares or (b) economically equivalent arrangements being put in
place in favour of the holders of the Exchangeable Shares. The measure of
economic equivalence will be determined by the board of directors of Exchangeco
who are appointed by AMVESCAP.
AMVESCAP must also ensure the availability of sufficient New AMVESCAP Ordinary
Shares to satisfy the exchange rights of the holders of the Exchangeable
Shares. Further details on the Exchangeable Shares are set out in paragraph 5
of this section.
3. VOTING AND EXCHANGE TRUST AGREEMENT
Under the Voting and Exchange Trust Agreement to be entered into on the
Effective Date between AMVESCAP, Exchangeco and the Trustee, the Special Voting
Share will be issued to the Trustee and a trust created for the benefit of the
holders of the Exchangeable Shares (other than AMVESCAP and its affiliates).
The Trustee will be able to vote in person or by proxy on any matters put
before the AMVESCAP Shareholders at an AMVESCAP general meeting. Each holder of
Exchangeable Shares is entitled to instruct the Trustee to vote at any meeting
at which holders of AMVESCAP Ordinary Shares are entitled to vote or to attend
the meeting personally and vote directly. Unless instructed, the Trustee may
not vote, and any Exchangeable Shares held by AMVESCAP or its affiliates may
not be voted.
The Trustee will also hold automatic exchange rights in trust for the benefit
of the holders of the Exchangeable Shares (other than AMVESCAP and its
affiliates) which will provide that, in the event of insolvency or liquidation
of Exchangeco or of AMVESCAP, AMVESCAP will purchase each Exchangeable Share
held by such holders in return for one New AMVESCAP Ordinary Share plus any
accrued and unpaid dividends thereon.
AMVESCAP will provide to the Trustee all documents to be sent to the AMVESCAP
Shareholders (including proxies and forms of direction that are subject to the
right of reasonable comment by the Trustee if reasonably practicable) prior to
mailing. The Trustee is required, at AMVESCAP's expense, to mail all such
documents to the holders of the Exchangeable Shares, whenever practicable at
the same time as they are mailed to the AMVESCAP Shareholders.
AMVESCAP and Exchangeco jointly and severally agree to pay the Trustee for all
services rendered by it under the Voting and Exchange Trust Agreement,
including reasonable expenses. In addition, AMVESCAP and Exchangeco will be
liable to indemnify the Trustee against any claims, losses, reasonable costs
and expenses incurred in compliance with its duties under the Voting and
Exchange Trust Agreement.
4. THE INDENTURE
The Debentures will be issued under the Indenture on the Effective Date and
will mature on the date that is three years from the Effective Date. All
amounts owing under the Debentures and the Indenture will be subordinated in
right of payment to all other senior indebtedness of Exchangeco. The Debentures
will bear interest from the Effective Date at a rate of 6.0% per annum payable
semi-annually in arrears at six month intervals in each year.
Each C$1,000 principal amount of Debentures that is issued is convertible at
any time, subject to notice and other usual limitations as set out in the
Indenture, at the option of the holder prior to maturity into a number of
Exchangeable Shares calculated as of the date the holder elects to convert
Debentures. The number of Exchangeable Shares into which the Debentures are
convertible is equal to the lesser of (i) the AMVESCAP Share Value and (ii)
C$1200 divided by the Current Market Price for the date of notice of
conversion. The Indenture provides for the adjustment of the basis of
calculation upon the occurrence of certain dilutive events.
Exchangeco also has the right at any time on at least 20 days' and not more
than 30 days' prior written notice to redeem all of the Debentures for C$1,200
(plus accrued unpaid interest on such C$1,000
14
<PAGE> 16
principal amount) (the "Redemption Amount") for each C$1,000 principal amount
of Debentures. Save for certain limited circumstances, Exchangeco will have the
right to elect to redeem the Debentures by issuing and delivering such number
of Exchangeable Shares which results from dividing the Redemption Amount by 95%
of the Current Market Price for the date of the redemption notice. Exchangeco
also has the right to purchase Debentures without giving notice in the open
market or by tender or private contract at any price, except in certain limited
circumstances.
Exchangeco is required to remain a wholly-owned direct or indirect subsidiary
of AMVESCAP so long as the Debentures are outstanding. Neither Exchangeco nor
AMVESCAP is entitled to amalgamate with any other corporation or enter into any
reorganisation or arrangement or effect any conveyance, sale, transfer or lease
of all or substantially all of its assets, unless in such case: (i) either
Exchangeco or AMVESCAP, as the case may be, shall be the continuing
corporation, or the successor corporation shall become bound by the obligations
of Exchangeco or AMVESCAP, as the case may be, under the terms of the
Indenture; and (ii) Exchangeco, AMVESCAP or such successor corporation shall
not immediately thereafter be in default under the Indenture.
So long as any Debentures remain outstanding, Exchangeco is required to
maintain the listing of the Exchangeable Shares on the Toronto Stock Exchange.
If an Event of Default as specified in the Indenture shall occur and be
continuing, the Trustee may, in its discretion, and shall, upon request of the
holders of not less than 25% in principal amount of the outstanding Debentures,
declare the principal of, together with accrued interest on, all Debentures to
be due and payable.
AMVESCAP has agreed to guarantee all of the payment obligations and other
obligations of Exchangeco under the Debentures and the Indenture. All of
AMVESCAP's obligations under such guarantee will be subordinated in right of
payment to all other senior indebtedness of AMVESCAP.
5. FURTHER DETAILS OF THE EXCHANGEABLE SHARES
5.1 EXCHANGE: A holder of Exchangeable Shares has the right at any
time (subject to the exercise by Callco of its overriding call right
described below) to require Exchangeco to redeem any or all of its
Exchangeable Shares (the "Retracted Shares") in exchange for the delivery
to that holder of one New AMVESCAP Ordinary Share for each Retracted Share
plus any declared and unpaid dividends thereon (the "Exchange Amount")
provided that a holder may not exercise such right if, as a result,
AMVESCAP would be required to file a registration statement under the
Securities Act.
When a holder requests Exchangeco to redeem Retracted Shares
("Retraction Request"), Callco will have an overriding right to purchase
all of the Retracted Shares, at a purchase price per share of the Exchange
Amount.
A holder may revoke its Retraction Request, in writing, at any time prior
to the close of business on the business day preceding the date set for
retraction, in which case the Retracted Shares will neither be purchased
by Callco nor be redeemed by Exchangeco.
5.2 LIQUIDATION OF EXCHANGECO: In the event of the liquidation, dissolution or
winding-up of Exchangeco or any other distribution of the assets of
Exchangeco among its shareholders for the purpose of winding-up its
affairs, holders of the Exchangeable Shares will generally have
preferential rights to receive from Exchangeco the Exchange Amount for
each Exchangeable Share held. In such event, Callco will have an
overriding right to purchase the Exchangeable Shares for a price per share
equal to the Exchange Amount.
5.3 LIQUIDATION OF AMVESCAP: In order for the holders of the Exchangeable
Shares to participate on a pro rata basis with the holders of AMVESCAP
Ordinary Shares, on the fifth business day prior to the effective date of
an AMVESCAP Liquidation Event (essentially the institution of winding up
or insolvency proceedings of AMVESCAP or similar events), each
Exchangeable Share (other than those held by AMVESCAP or its affiliates)
will be purchased by AMVESCAP for a price equal to the Exchange Amount.
5.4 REDEMPTION: Subject to applicable law and to the exercise by Callco of its
overriding right to purchase the Exchangeable Shares for a price per share
equal to the Exchange Amount, Exchangeco will redeem all of the then
outstanding Exchangeable Shares for a price per share equal to the
Exchange Amount on a date determined by the board of directors of
Exchangeco but not before 31 December 2009.
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<PAGE> 17
In certain circumstances however, Exchangeco (or Callco pursuant to its
overriding right) will have the right to require a redemption of the
Exchangeable Shares prior to 31 December 2009. An early redemption may
occur upon:
(a) there being fewer than 5,000,000 Exchangeable Shares outstanding
(other than Exchangeable Shares held by AMVESCAP and its affiliates);
(b) the occurrence of an AMVESCAP Control Transaction, (essentially a
merger, amalgamation, take-over or similar transaction concerning
AMVESCAP), provided that the board of directors of Exchangeco
determines (i) that it is not reasonably practicable substantially to
replicate the terms and conditions of the Exchangeable Shares in
connection with the AMVESCAP Control Transaction and (ii) that the
redemption of the Exchangeable Shares is necessary to enable the
completion of the AMVESCAP Control Transaction; or
(c) the failure by holders of Exchangeable Shares to take the necessary
action to approve or disapprove any change in the rights of the
holders of Exchangeable Shares where the approval or disapproval is
required to maintain economic equivalence with AMVESCAP Ordinary
Shares.
6. DETAILS OF THE SPECIAL VOTING SHARE
The Special Voting Share shall have the following rights, privileges and
restrictions which are set out in more detail in the Voting and Exchange Trust
Agreement:
6.1 NUMBER OF SHARES: There shall be one Special Voting Share.
6.2 DIVIDENDS OR DISTRIBUTIONS: The Special Voting Share shall not carry any
right to receive dividends or distributions.
6.3 VOTING RIGHTS: The holder of the Special Voting Share shall have the right
to receive notice of and to attend and vote at any general meeting of the
Company as follows:
(a) On a show of hands, the holder of the Special Voting Share, or its
proxy, shall have one vote in addition to any votes which may be cast
by a holder of Exchangeable Shares (other than AMVESCAP and its
affiliates) (a "Beneficiary") (or its nominee) on such show of hands
as proxy for the holder of the Special Voting Share in accordance
with paragraph 6.5 below;
(b) On a poll, the holder of the Special Voting Share shall have one vote
for every four Exchangeable Shares then outstanding (a) that are
owned by Beneficiaries and (b) as to which the holder of the Special
Voting Share has received voting instructions from the Beneficiaries
in accordance with the Voting and Exchange Trust Agreement. Votes may
be given either personally or by proxy and a person entitled to more
than one vote need not use all his votes or cast all the votes he
uses in the same way.
6.4 The holder of the Special Voting Share shall be entitled to demand that a
poll be taken on any resolution, whether before or after a show of hands,
and to this extent Article 71 of the Company's Articles of Association
(the "Articles") will be amended and varied.
6.5 If so instructed by a Beneficiary, the holder of the Special Voting Share
shall appoint that Beneficiary, or such other person as that Beneficiary
nominates, as proxy to attend and to exercise personally in place of the
holder of the Special Voting Share (i) on a poll, one vote for every four
Exchangeable Shares held by the Beneficiary, and (ii) on a show of hands
one vote (the "Beneficiary Votes"). A proxy need not be a member of the
Company. A Beneficiary (or his nominee) exercising its Beneficiary Votes
shall have the same rights as the holder of the Special Voting Share to
speak at the meeting in favour of any matter and to vote on a show of
hands or on a poll in respect of any matter proposed, and to this extent
Article 77 of the Articles will be amended and varied.
6.6 The holder of the Special Voting Share and/or Exchangeco is entitled to
require any Beneficiary or any person whom the holder of the Special
Voting Share and/or Exchangeco know or have reason to believe to hold any
interest whatsoever in an Exchangeable Share to confirm that fact or to
give such details as to who holds an interest in such Exchangeable Share
as would be required if the Exchangeable Shares were AMVESCAP Ordinary
Shares and that Beneficiary had been duly served with a notice under
section 212 of the Act as detailed in Article 78(B) of the Articles. If
the Beneficiary
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<PAGE> 18
fails to respond within the prescribed period then the provisions of
Article 78(B) shall apply to that Beneficiary.
6.7 Except as provided in the Voting and Exchange Trust Agreement or by
applicable law, the holder of the Special Voting Share and the AMVESCAP
Shareholders shall vote together as one class for the appointment of
directors of the Company and on all other matters submitted to a vote of
AMVESCAP Shareholders.
6.8 LIQUIDATION RIGHTS: In the event of voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holder of the Special Voting
Share shall be entitled to receive out of the assets of the Company
available for distribution to the AMVESCAP Shareholders, an amount equal
to 25 pence before any distribution is made on the AMVESCAP Ordinary
Shares or any other shares ranking junior to the Special Voting Shares as
to distribution of assets upon voluntary or involuntary liquidation. After
payment of such amount the holder of the Special Voting Share shall not be
entitled to any further participation in any distribution of assets of the
Company.
6.9 NO REDEMPTION RIGHT: The Special Voting Share shall not be subject to
redemption by the Company or at the option of its holder, except that at
such time as no Exchangeable Shares (other than Exchangeable Shares owned
by the Company or its affiliates) and no Debentures shall be outstanding,
the Special Voting Share shall automatically be redeemed and cancelled,
with an amount of 25 pence due and payable upon such redemption.
6.10 RANKING: The Special Voting Share shall rank senior to all AMVESCAP
Ordinary Shares.
6.11 RESTRICTIONS: During the term of the Voting and Exchange Trust Agreement,
the Company may not, without the consent of the holders of the
Exchangeable Shares, issue any Special Voting Shares in addition to the
Special Voting Share and no other term of the Special Voting Share shall
be amended, except with the approval of the holders of the Exchangeable
Shares (save that non-prejudicial ministerial amendments may be made by
the agreement of AMVESCAP, Exchangeco and the Trustee).
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<PAGE> 19
PART III
FINANCIAL INFORMATION RELATING TO THE AMVESCAP GROUP
The financial information contained in this Part III does not constitute
statutory accounts within the meaning of section 240 of the Act. Statutory
consolidated accounts of the Group for the financial periods ended 31 December
1997, 1998 and 1999 received an unqualified audit opinion, did not contain a
statement under Sections 237(2) and (3) of the Act and have been delivered to
the Registrar of Companies in England and Wales pursuant to section 242 of the
Act. Arthur Andersen, Chartered Accountants and Registered Auditors, have been
auditors to the Company for the last three financial periods.
A. FINANCIAL INFORMATION FOR THE THREE YEARS ENDED 31 DECEMBER 1999
The following information is extracted without material adjustment from the
audited consolidated financial statements of the Group for each of the
financial periods ended 31 December 1997, 1998 and 1999.
CONSOLIDATED STATEMENTS OF PROFIT AND LOSS
<TABLE>
<CAPTION>
for the years ended December 31,
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Revenues 1,072,350 802,172 530,659
Operating expenses (719,637) (544,856) (344,573)
---------- --------- ---------
352,713 257,316 186,086
Exceptional item-integration - (48,600) -
Goodwill amortization (note 9) (36,754) (21,221) -
---------- --------- ---------
Operating profit 315,959 187,495 186,086
Investment income (note 3) 11,809 12,183 9,260
Interest payable (note 4) (44,726) (38,200) (18,053)
---------- --------- ---------
Profit before taxation 283,042 161,478 177,293
Taxation (note 6) (102,010) (67,373) (60,279)
---------- --------- ---------
Profit for the financial year 181,032 94,105 117,014
Dividends (note 7) (58,244) (50,594) (39,462)
---------- --------- ---------
Retained profit for the year 122,788 43,511 77,552
========== ========= =========
Earnings per ordinary share (note 8):
-basic 28.3p 15.7p 22.7p
-diluted 27.1p 14.7p 20.8p
---------- --------- ---------
Earnings per ordinary share
before goodwill amortization
and exceptional item (note 8):
-basic 34.0p 26.0p 22.7p
-diluted 32.7p 24.3p 20.8p
---------- --------- ---------
</TABLE>
The accompanying notes form part of these accounts.
18
<PAGE> 20
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
as of December 31,
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
FIXED ASSETS
Goodwill (note 9) 664,135 711,795 -
Investments (note 10) 128,921 131,738 86,626
Tangible assets (note 11) 108,021 88,781 46,832
---------- --------- ---------
901,077 932,314 133,458
CURRENT ASSETS
Debtors (note 12) 675,856 479,381 190,155
Investments (note 10) 60,135 79,469 26,554
Cash at bank and in hand 189,732 119,651 70,681
---------- --------- ---------
925,723 678,501 287,390
Creditors: amounts falling due
within one year (note 13) (706,289) (550,397) (219,502)
---------- --------- ---------
Net current assets 219,434 128,104 67,888
---------- --------- ---------
Total assets less current liabilities 1,120,511 1,060,418 201,346
Long-term debt (note 14) (659,120) (686,010) (203,598)
Provisions for liabilities and
charges (note 15) (24,730) (43,438) (19,210)
---------- --------- ---------
NET ASSETS 436,661 330,970 (21,462)
========== ========= =========
Capital and reserves
Called up share capital (note 16) 168,617 167,506 148,855
Share premium account 478,860 469,382 157,365
Profit and loss account 380,717 257,929 214,418
---------- --------- ---------
1,028,194 894,817 520,638
OTHER RESERVES (591,533) (563,847) (542,100)
---------- --------- ---------
SHAREHOLDERS' FUNDS, EQUITY INTERESTS 436,661 330,970 (21,462)
========== ========= =========
</TABLE>
CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES
<TABLE>
<CAPTION>
for the years ended December 31,
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Profit for the financial year 181,032 94,105 117,014
Currency translation differences on
investments in overseas subsidiaries (18,645) 14,609 1,685
---------- --------- ---------
Total recognized gains and losses for the year 162,387 108,714 118,699
========== ========= =========
</TABLE>
The accompanying notes form part of these accounts.
19
<PAGE> 21
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' FUNDS
Movements in shareholders' funds comprise:
<TABLE>
<CAPTION>
Profit and
Share Share Other loss
capital premium reserves account Total
{pound {pound {pound {pound {pound
sterling} sterling} sterling} sterling} sterling}
'000 '000 '000 '000 '000
<S> <C> <C> <C> <C> <C>
AT DECEMBER 31, 1996 67,848 33,184 (125,536) 136,866 112,362
Profit for the financial year - - - 117,014 117,014
Dividends - - - (39,462) (39,462)
Goodwill written off - - (1,022,790) - (1,022,790)
AIM merger 63,086 - 537,491 - 600,577
Exercise of options 1,323 11,206 (10,450) - 2,079
Rights issue 13,567 103,373 - - 116,940
Conversion of loan note 3,031 9,602 - - 12,633
Warrant reserve for the AIM
merger - - 77,500 - 77,500
Currency translation
differences on investments
in overseas subsidiaries - - 1,685 - 1,685
--------- --------- ----------- --------- ----------
AT DECEMBER 31, 1997 148,855 157,365 (542,100) 214,418 (21,462)
Profit for the financial year - - - 94,105 94,105
Dividends - - - (50,594) (50,594)
Exercise of options 4,362 37,164 (36,356) - 5,170
GT Global acquisition 10,625 263,196 - - 273,821
Conversion of loan note 3,664 11,657 104 - 15,425
Currency translation
differences on investments
in overseas subsidiaries - - 14,505 - 14,505
--------- --------- ----------- --------- ----------
AT DECEMBER 31, 1998 167,506 469,382 (563,847) 257,929 330,970
Profit for the financial year - - - 181,032 181,032
Dividends - - - (58,244) (58,244)
Exercise of options 1,111 9,478 (9,041) - 1,548
Currency translation
differences on investments
in overseas subsidiaries - - (18,645) - (18,645)
--------- --------- ----------- --------- ----------
AT DECEMBER 31, 1999 168,617 478,860 (591,533) 380,717 436,661
========= ========= =========== ========= ==========
</TABLE>
The accompanying notes form part of these accounts.
20
<PAGE> 22
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
for the years ended December 31,
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Operating activities
Operating profit 315,959 187,495 186,086
Exceptional item - 32,207 -
Depreciation 40,621 26,216 18,197
Amortization 62,674 34,965 -
(Increase)/decrease in debtors (235,873) 26,255 590
Increase/(decrease) in creditors 166,071 (147,730) 32,602
Other 16,595 453 (3,475)
---------- ---------- ----------
366,047 159,861 234,000
Returns on investments and servicing of finance
Interest and dividends received 13,123 10,804 9,426
Interest paid (44,148) (34,210) (18,624)
---------- ---------- ----------
(31,025) (23,406) (9,198)
Taxation (56,454) (60,111) (54,683)
Capital expenditure and financial investment
Purchase of tangible fixed assets, net of sales (56,721) (54,644) (24,269)
Disposals/(purchases) of fixed asset investments,
net of purchases of {pound sterling}24.4 million
in 1999 and net of sales of {pound sterling}
33.5 million in 1998 and {pound sterling}7.0
million in 1997 6,425 (18,706) (10,967)
---------- ---------- ----------
(50,296) (73,350) (35,236)
Acquisitions, net of cash, cash equivalents,
and bank overdraft acquired - (126,959) (337,409)
Dividends paid (54,394) (44,410) (25,942)
---------- ---------- ----------
Cash inflow/(outflow) before the use of cash equivalents 173,878 (168,375) (228,468)
Financing
Issues of ordinary share capital 1,548 5,170 2,079
Issue of senior notes - 395,155 -
Credit facility, net (53,911) 72,889 202,982
Other loans and bank overdrafts (54,381) (252,856) (78,908)
---------- ---------- ----------
(106,744) 220,358 126,153
Change in bank overdrafts 24,529 (21,627) 10,108
Change in cash equivalents 6,852 (33,833) 155,362
---------- ---------- ----------
Increase/(decrease) in cash 98,515 (3,477) 63,155
========== ========== ==========
Reconciliation to increase in cash at bank and in hand
Increase/(decrease) in cash 98,515 (3,477) 63,155
Change in bank overdrafts (24,529) 21,627 (10,108)
Change in cash equivalents (6,852) 33,833 (155,362)
Foreign exchange movement on cash and cash equivalents 2,947 (3,013) 2,178
---------- ---------- ----------
Increase/(decrease) in cash at bank and in hand 70,081 48,970 (100,137)
========== ========== ==========
</TABLE>
The accompanying notes form part of these accounts.
21
<PAGE> 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(a) Basis of accounting
The accounts have been prepared under the historical cost accounting rules
and in accordance with applicable accounting standards.
(b) Basis of consolidation
The accounts consolidate the accounts of the Company and all of its
subsidiaries. Operating profit includes the results of subsidiaries
acquired from their effective dates of acquisition.
(c) Goodwill
The excess of the cost of shares in subsidiary undertakings acquired over
the fair value of their net assets is capitalized as an asset and amortized
through the profit and loss account over an estimated useful life of 20
years. Prior to 1998, goodwill was charged directly to other reserves.
(d) Revenue
Revenue represents management, distribution, transfer agent, trading
and other fees.
(e) Tangible fixed assets and depreciation
Depreciation is provided on fixed assets at rates calculated to write off
the cost, less estimated residual value, of each asset evenly over its
expected useful life: leasehold improvements over the lease term;
computers and other various equipment, between three and seven years.
(f) Investments
Investments held as fixed assets are stated at cost less provisions for
any impairment in value. Investments held as current assets are stated at
the lower of cost or net realizable value.
(g) Leases
Assets held under finance leases are capitalized and included in fixed
assets. Rentals under operating leases are charged evenly to the profit
and loss account over the lease term.
(h) Taxation
Corporation tax payable is provided on taxable profits at the current
rate. Deferred taxation is provided on the liability method on all timing
differences to the extent that they are expected to reverse in the
future, calculated at the rate at which it is estimated that tax will be
payable.
(i) Foreign currencies
Assets and liabilities of overseas subsidiaries are translated at the
rates of exchange ruling at the balance sheet date. Profit and loss
account figures are translated at the weighted average rates for the
year. Exchange differences arising on the translation of overseas
subsidiaries' accounts are taken directly to reserves. Exchange
differences on foreign currency borrowings, to the extent that they are
used to finance or provide a hedge against Company equity investments in
foreign enterprises, are taken directly to reserves. All other
translation and transaction exchange differences (which are not material)
are taken to the profit and loss account.
(j) Pensions
For defined contribution schemes, pension contributions payable in
respect of the accounting period are charged to the profit and loss
account. For defined benefit schemes, pension contributions are charged
systematically to the profit and loss account over the expected service
lives of employees. Variations from the regular cost are allocated to the
profit and loss account over the average remaining service lives of
employees.
22
<PAGE> 24
2. SEGMENTAL INFORMATION
Geographical analysis of the Company's business, which is principally
investment management, is as follows:
<TABLE>
<CAPTION>
Revenue Profit after exceptional item
1999 1998 1997 1999 1998 1997
{pound {pound {pound {pound {pound {pound
sterling} sterling} sterling} sterling} sterling} sterling}
'000 '000 '000 '000 '000 '000
<S> <C> <C> <C> <C> <C> <C>
North America 859,993 659,241 457,379 322,611 208,379 184,234
Europe and Pacific 212,357 142,931 73,280 30,102 337 1,852
---------- --------- --------- --------- --------- ---------
1,072,350 802,172 530,659 352,713 208,716 186,086
========== ========= =========
Goodwill amortization (36,754) (21,221) -
Net interest payable (32,917) (26,017) (8,793)
--------- --------- ---------
Profit before taxation 283,042 161,478 177,293
========= ========= =========
Net assets
1999 1998
{pound {pound
sterling} sterling}
'000 '000
North America 187,434 143,701
Europe and Pacific 97,707 82,799
--------- ----------
285,141 226,500
Goodwill 664,135 711,795
Net debt (512,615) (607,325)
--------- ----------
Net assets 436,661 330,970
========= ==========
</TABLE>
The US dollar profits have been translated into sterling at an average rate for
1999 of 1.62 (1998: 1.66, 1997: 1.64). Revenue reflects the geographical
segments from which services are provided and is not materially different from
the geographical segments to which services are provided. Profit after
exceptional item is stated after charging auditors' remuneration of {pound
sterling}1,218,000 in 1999 (1998: {pound sterling}878,000, 1997: {pound
sterling}667,000) for audit work and {pound sterling}1,044,000 in 1999 (1998:
{pound sterling}905,000, 1997: {pound sterling}665,000) for non-audit work.
3. INVESTMENT INCOME
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Interest receivable 8,597 12,235 7,964
Income/(loss) from listed investments 1,480 (1,347) 548
Income from unlisted investments 1,732 1,295 748
--------- --------- --------
11,809 12,183 9,260
========= ========= ========
</TABLE>
4. INTEREST PAYABLE
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Senior notes 26,343 16,771 -
Credit facility 14,448 13,501 8,950
Other 3,935 7,928 9,103
--------- --------- --------
44,726 38,200 18,053
========= ========= ========
</TABLE>
23
<PAGE> 25
5. DIRECTORS AND EMPLOYEES
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Wages and salaries 308,213 237,008 153,531
Social security costs 18,523 14,366 8,377
Other pension costs 22,440 17,451 11,237
-------- -------- --------
349,176 268,825 173,145
======== ======== ========
</TABLE>
Global Stock Plan ("the Plan")
A sum of {pound sterling}12,453,000 (1998: {pound sterling}9,826,000, 1997:
{pound sterling}8,340,000) has been paid into the Plan, a remuneration scheme
for senior executives. This Plan is funded by a profit-linked bonus paid
annually in respect of directors and senior employees into a discretionary
employee benefit trust which then purchases shares or share equivalents of the
Company in the open market. These securities are allocated within the trust and,
provided they retain their position within the Company for a period of three
years from the date of the bonus, are transferred to the participants upon
retirement or termination of employment. The trust held 9,341,000 ordinary
shares at December 31, 1999 (1998: 7,632,000, 1997: 5,618,000).
The average number of employees of the Company during the year was 5,300 (1998:
4,500, 1997: 3,100). Of these totals, 4,000 (1998: 3,600, 1997: 2,580) were
employed in North America and the remainder were employed in Europe and the
Pacific.
6. TAXATION
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
UK taxation:
Corporation tax at 30.25% (1998: 31.0%, 1997: 31.5%) 12,097 2,500 3,930
Overseas current taxation 79,333 58,770 52,297
Overseas deferred taxation 10,580 6,103 4,052
-------- -------- --------
102,010 67,373 60,279
======== ======== ========
</TABLE>
As at present there is no intention to distribute the retained earnings of
certain overseas subsidiaries, no provision has been made for any additional
taxation that might arise on distribution. Deferred taxation principally arises
in relation to employee share options, contributions to the Global Stock Plan,
and certain items related to the acquisition of GT Global.
7. DIVIDENDS
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Interim paid, 3.5p per share (1998: 3p, 1997: 2.5p) 22,700 18,900 13,952
Final proposed, 5.5p per share (1998: 5p, 1997: 4.5p) 35,544 31,694 25,510
------- ------- -------
58,244 50,594 39,462
======= ======= =======
</TABLE>
The trustees of the Employee Share Option Trust waived dividends amounting to
{pound sterling}2,796,000 in 1999 (1998: {pound sterling}2,470,000, 1997:
{pound sterling}1,789,000).
24
<PAGE> 26
8. EARNINGS PER SHARE
The directors consider that the profit before goodwill amortization and
exceptional item is a more appropriate basis for the calculation of earnings per
ordinary share since this represents a more consistent measure of the year by
year performance of the business. Profit is shown below before {pound
sterling}36,754,000 (1998: {pound sterling}21,221,000) of goodwill amortization
and before a {pound sterling}40,800,000 net of tax exceptional item in 1998.
Diluted earnings per share takes into account the effect of dilutive potential
ordinary shares outstanding during the period.
<TABLE>
<CAPTION>
Profit
{pound Number of
sterling} shares Per share
1999 '000 '000 amount
<S> <C> <C> <C>
Basic earnings per share 217,786 639,636 34.0p
Issuance of options -- 27,271 ======
-------- --------
Diluted earnings per share 217,786 666,907 32.7p
======== ======== ======
1998
Basic earnings per share 156,126 601,234 26.0p
Issuance of options -- 33,145 ======
Conversion of loan note 521 8,977
-------- --------
Diluted earnings per share 156,647 643,356 24.3p
======== ======== ======
1997
Basic earnings per share 117,014 516,309 22.7p
Issuance of options -- 31,790 ======
Conversion of loan note 1,140 19,253
-------- --------
Diluted earnings per share 118,154 567,352 20.8p
======== ======== ======
</TABLE>
9. GOODWILL
<TABLE>
<CAPTION>
Net book
Cost Amortization value
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
At December 31, 1998 733,016 (21,221) 711,795
Exchange adjustment (280) -- (280)
Provided during the year -- (36,754) (36,754)
Purchase price adjustment (10,626) -- (10,626)
-------- -------- --------
At December 31, 1999 722,110 (57,975) 664,135
======== ======== ========
</TABLE>
On May 29, 1998, the Company completed its acquisition of several legal entities
within the Asset Management Division of Liechtenstein Global Trust AG
(collectively referred to as "GT Global"). The results of GT Global have been
included in the Accounts from June 1, 1998. Total consideration for the
acquisition was {pound sterling}499 million. The cost of the integration of the
GT Global businesses was {pound sterling}48.6 million ({pound sterling}40.8
million after tax), which was recorded as an exceptional item in 1998. The
goodwill created by the acquisition was capitalized and is being amortized over
20 years.
On February 28, 1997, the Company acquired A I M Management Group Inc. ("AIM").
The transaction was accounted for as an acquisition and AIM's results have been
included from March 1, 1997. Total consideration for the acquisition was {pound
sterling}1.1 billion. The Company acquired all of the issued and outstanding
shares of capital stock of AIM, and issued 252.3 million new ordinary shares of
the Company's stock. The fair value of net assets acquired was {pound
sterling}44.3 million. The balance of the consideration of {pound sterling}372.1
million was paid in cash from the net proceeds of a rights offering completed in
February 1997 and from amounts drawn under a credit facility. Options over a
further 37.7 million shares were also granted at the acquisition date. {pound
sterling}1.0 billion of goodwill was created during the acquisition and was
written off to other reserves.
25
<PAGE> 27
Prior to 1998, goodwill has been written off as follows:
<TABLE>
<CAPTION>
{pound
sterling}
'000
<S> <C>
To other reserves 1,184,339
To cancellation of share premium account 44,468
To profit and loss account 73,600
----------
1,302,407
==========
</TABLE>
10. INVESTMENTS (HELD AS FIXED ASSETS)
<TABLE>
<CAPTION>
Shares of
AMVESCAP Other
PLC investments Total
(pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Cost
At December 31, 1997 76,338 18,004 94,342
Additions 37,770 9,639 47,409
Arising from acquisition -- 27,078 27,078
Disposals (5,715) (27,918) (33,633)
-------- -------- --------
At December 31, 1998 108,393 26,803 135,196
-------- -------- --------
Exchange adjustments -- 3,608 3,608
Additions 8,207 16,235 24,442
Disposals (19,784) (11,027) (30,811)
-------- -------- --------
At December 31, 1999 96,816 35,619 132,435
======== ======== ========
Provisions against investments
At December 31, 1997 (2,027) (5,689) (7,716)
Net change -- 4,258 4,258
-------- -------- --------
At December 31, 1998 (2,027) (1,431) (3,458)
Net change -- (56) (56)
-------- -------- --------
At December 31, 1999 (2,027) (1,487) (3,514)
======== ======== ========
Net book value
At December 31, 1997 74,311 12,315 86,626
At December 31, 1998 106,366 25,372 131,738
At December 31, 1999 94,789 34,132 128,921
======== ======== ========
</TABLE>
Shares of AMVESCAP PLC include the holdings of the Employee Share Option Trust
and comprise 26,716,000 ordinary shares, all of which are under option at
December 31, 1999 to qualifying employees of the Company. The options vest after
three years from the date of grant and lapse after 10 years. At December 31,
1999 there were options over these securities at exercise prices between 90p and
660p. The market price of the ordinary shares at the end of 1999 was 720p.
Other investments consist of investments in various Company mutual funds and
unit trusts, investments on behalf of deferred compensation plans, and
investments in insurance companies.
INVESTMENTS (HELD AS CURRENT ASSETS)
Current asset investments include listed investments of {pound
sterling}56,786,000 (1998: {pound sterling}75,367,000) and unlisted investments
of {pound sterling}3,349,000 (1998: {pound sterling}4,102,000).
26
<PAGE> 28
11. TANGIBLE ASSETS
Tangible assets are comprised of technology and other equipment.
<TABLE>
<CAPTION>
Net
Cost Depreciation book value
{pound {pound {pound
sterling} sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
At December 31, 1997 86,963 (40,131) 46,832
Exchange adjustment (1,963) 800 (1,163)
Additions 59,554 -- 59,554
Arising from acquisition 14,645 -- 14,645
Provided during the year -- (26,216) (26,216)
Disposals (24,971) 20,100 (4,871)
-------- -------- --------
At December 31, 1998 134,228 (45,447) 88,781
Exchange adjustment 5,833 (2,693) 3,140
Additions 58,002 -- 58,002
Provided during the year -- (40,621) (40,621)
Disposals (16,985) 15,704 (1,281)
-------- -------- --------
At December 31, 1999 181,078 (73,057) 108,021
======== ======== ========
</TABLE>
Leased assets with a net book value of {pound sterling}1,223,000 (1998: {pound
sterling}1,818,000) are included in tangible assets.
12. DEBTORS
<TABLE>
<CAPTION>
1999 1998
{pound {pound
sterling} sterling}
'000 '000
<S> <C> <C>
Unsettled fund debtors 246,364 75,292
Trade debtors 134,826 112,257
Customer and counterparty debtors 125,513 132,158
Deferred sales commissions 68,487 51,320
Other debtors 63,256 63,295
Deferred taxation 21,841 31,859
Taxation prepaid/recoverable 15,569 13,200
-------- --------
675,856 479,381
======== ========
</TABLE>
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1999 1998
{pound {pound
sterling} sterling}
'000 '000
<S> <C> <C>
Unsettled fund creditors 289,212 78,916
Customer and counterparty creditors 129,842 136,837
Accruals 168,606 227,809
Corporation tax payable 49,437 14,747
Proposed ordinary dividend 35,544 31,694
Trade creditors 33,648 28,548
Bank overdraft -- 24,651
Current maturities of long-term debt -- 7,195
-------- --------
706,289 550,397
======== ========
</TABLE>
27
<PAGE> 29
14. LONG-TERM DEBT
<TABLE>
<CAPTION>
1999 1998
{pound {pound
sterling} {sterling}
'000 '000
<S> <C> <C>
Senior notes - US$250 million due 2003 at 6.375%
and US$400 million due 2005 at 6.6% 405,035 387,366
US$700 million credit facility due 2002 228,066 271,278
DM 60 million fixed notes due 2001-2003, interest 6.15% - 6.75% 12,851 21,344
Senior notes - US$9.8 million due 2001 at 6.5% and
US$10 million due 2006 at 6.875% 13,168 12,841
Other debt -- 376
-------- --------
Total long-term debt 659,120 693,205
Less: current maturities of long-term debt -- (7,195)
-------- --------
Total long-term debt, net of current maturities 659,120 686,010
======== ========
</TABLE>
The credit facility provides for borrowings of various maturities and contains
certain conditions including a restriction to declare or pay cash dividends in
excess of 60% of consolidated net profit. Interest is payable based upon LIBOR
rates in existence at the time of each borrowing.
Maturities of long-term debt are as follows: {pound sterling}12,846,000 due in
2001, {pound sterling}228,066,000 due in 2002, {pound sterling}162,208,000 due
in 2003, and {pound sterling}256,000,000 due thereafter.
15. PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
{pound
{sterling}
'000
<S> <C>
Merger and acquisition provisions
At December 31, 1998 43,438
Cash paid (15,463)
Transfers and other adjustments (3,547)
Foreign exchange 302
--------
At December 31, 1999 24,730
========
</TABLE>
These provisions consist of amounts provided as a result of the 1997 merger with
A I M Management Group Inc. and the 1998 acquisition of GT Global. AIM
provisions include commitments payable pursuant to the AIM merger agreement
which expire in 2002. GT provisions include leasehold adjustments to be written
off over the lease terms.
16. SHARE CAPITAL
<TABLE>
<CAPTION>
1999 1998
{pound {pound
sterling} {sterling}
Number '000 Number '000
<S> <C> <C> <C> <C>
Authorized ordinary shares of 25p
each 850,800,000 212,700 850,800,000 212,700
------------ -------- ------------ --------
Allotted, called up and fully paid
ordinary shares of 25p each 674,468,227 168,617 670,023,406 167,506
------------ -------- ------------ --------
</TABLE>
During the year the Company has issued 4,444,821 ordinary shares as a result of
options exercised.
28
<PAGE> 30
As of December 31, 1999 shares are reserved for the following purposes:
<TABLE>
<CAPTION>
Last expiry
Shares Prices date
<S> <C> <C> <C>
Options arising from the AIM merger 9,125,691 25p - 75p April 2006
Subscription agreement (options) with the Employee Share
Option Trust 53,000,000 90p - 660p Dec 2009
Options granted under the UK Sharesave Scheme 545,083 334p - 510p Mar 2002
Options granted under the International Sharesave Plan 1,786,341 390p - 502p Dec 2001
</TABLE>
17. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>
1999 1998 1997
{pound {pound {pound
sterling} {sterling} sterling}
'000 '000 '000
<S> <C> <C> <C>
Increase/(decrease) in cash 98,515 (3,477) 63,155
Cash inflow from client cash (33,818) (7,715) --
Cash outflow from debt and lease financing 822 415 164
Cash outflow/(inflow) from bank loans 108,290 (218,195) (124,074)
Cash (outflow)/inflow from bank overdrafts (47,578) 44,676 (10,108)
Cash (outflow)/inflow from cash equivalents (6,852) 33,833 (155,362)
--------- --------- ---------
Change in net debt resulting from cash flows 119,379 (150,463) (226,225)
--------- --------- ---------
Debt and finance leases (664) (309,765) 54,925
Translation difference (24,005) 15,630 1,000
--------- --------- ---------
Change in net debt resulting from non-cash changes and
translation (24,669) (294,135) 55,925
--------- --------- ---------
Movement in net debt in the year 94,710 (444,598) (170,300)
Net (debt)/funds beginning of the year (607,325) (162,727) 7,573
--------- --------- ---------
Net debt end of the year (512,615) (607,325) (162,727)
========= ========= =========
</TABLE>
18. ANALYSIS OF NET DEBT
<TABLE>
<CAPTION>
Non-cash
December changes and December
31, 1998 Cash flow translation 31, 1999
{pound {pound {pound {pound
sterling} sterling} sterling} sterling}
1999 '000 '000 '000 '000
<S> <C> <C> <C> <C>
Net cash:
Cash at bank and in hand 119,651 67,134 2,947 189,732
Less: cash equivalents (67,960) 6,852 (2,281) (63,389)
Bank overdrafts (24,651) 24,529 122 --
--------- --------- ----------- ---------
27,040 98,515 788 126,343
Client cash (7,715) (33,818) -- (41,533)
--------- --------- ----------- ---------
19,325 64,697 788 84,810
Cash equivalents 67,960 (6,852) 2,281 63,389
Debt due within one year (7,195) 6,494 701 --
Debt due after more than one year (686,010) 54,218 (27,328) (659,120)
Finance leases (1,405) 822 (1,111) (1,694)
--------- --------- ----------- ---------
Total (607,325) 119,379 (24,669) (512,615)
========= ========= =========== =========
</TABLE>
29
<PAGE> 31
<TABLE>
<CAPTION>
Non-cash
December changes and December
31, 1997 Cash flow translation 31, 1998
{pound {pound {pound {pound
sterling} sterling} sterling} sterling}
1998 '000 '000 '000 '000
<S> <C> <C> <C> <C>
Net cash:
Cash at bank and in hand, including cash
acquired on acquisition of {pound
sterling}8,095,000 70,681 51,983 (3,013) 119,651
Less: cash equivalents, including cash
equivalents acquired on acquisition of
{pound sterling}108,393,000 (35,250) (33,833) 1,123 (67,960)
Bank overdrafts, including bank overdrafts
acquired on acquisition of {pound
sterling}22,703,000 (2,556) (21,627) (468) (24,651)
--------- --------- ----------- ---------
32,875 (3,477) (2,358) 27,040
Client cash -- (7,715) -- (7,715)
--------- --------- ----------- ---------
32,875 (11,192) (2,358) 19,325
Cash equivalents 35,250 33,833 (1,123) 67,960
Debt due within one year (25,991) 10,419 8,377 (7,195)
Debt due after more than one year (203,598) (183,938) (298,474) (686,010)
Finance leases (1,263) 415 (557) (1,405)
--------- --------- ----------- ---------
Total (162,727) (150,463) (294,135) (607,325)
========= ========= =========== =========
</TABLE>
<TABLE>
<CAPTION>
Non-cash
December changes and December
31, 1996 Cash flow translation 31, 1997
{pound {pound {pound {pound
sterling} sterling} sterling} sterling}
1997 '000 '000 '000 '000
<S> <C> <C> <C> <C>
Net cash:
Cash at bank and in hand 170,818 (102,315) 2,178 70,681
Less: cash equivalents (153,008) 155,362 (37,604) (35,250)
Bank overdrafts (12,664) 10,108 -- (2,556)
--------- --------- ----------- ---------
5,146 63,155 (35,426) 32,875
Cash equivalents 153,008 (155,362) 37,604 35,250
Debt due within one year (146,807) 68,800 52,016 (25,991)
Debt due after more than one year (2,128) (202,982) 1,512 (203,598)
Finance leases (1,646) 164 219 (1,263)
--------- --------- ----------- ---------
Total 7,573 (226,225) 55,925 (162,727)
========= ========= =========== =========
</TABLE>
19. COMMITMENTS AND CONTINGENCIES
The Company operates a number of pension schemes throughout the world. All are
defined contribution schemes with the exception of small schemes operating for
employees in the UK, US, Hong Kong and Germany, which are defined benefit
schemes. The assets of the defined benefit schemes are held in separate trustee
administered funds. The pension costs and provisions of these schemes are
assessed in accordance with the advice of professionally qualified actuaries. As
of December 31, 1999 all plans are fully funded, with the exception of the
German scheme, which is unfunded in accordance with local practice. The costs
amounted to {pound sterling}4,791,000 (1998: {pound sterling}3,774,000, 1997:
{pound sterling}2,374,000) for the defined benefit schemes and {pound
sterling}17,649,000 (1998: {pound sterling}13,677,000, 1997: {pound
sterling}8,863,000) for the defined contribution schemes.
30
<PAGE> 32
The Company's annual commitments under non-cancellable operating leases are as
follows:
<TABLE>
<CAPTION>
Land and buildings Other
1999 1998 1999 1998
{pound {pound {pound {pound
sterling} sterling} sterling} sterling}
Operating leases which expire: '000 '000 '000 '000
<S> <C> <C> <C> <C>
Within one year 1,439 1,932 424 277
Within two to five years inclusive 11,960 9,683 3,291 1,895
In more than five years 8,676 4,535 1,723 --
------- ------- ------ ------
22,075 16,150 5,438 2,172
======= ======= ====== ======
</TABLE>
The majority of the leases of land and buildings are subject to rent reviews.
Guarantees and contingencies may arise in the ordinary course of business. The
directors have not been notified of any material claims arising from such
commitments.
In the normal course of business, the Company is subject to various litigation
matters; however, in management's opinion, there are no legal proceedings
pending against the Company, which would have a material adverse effect on its
financial position, results of operations or liquidity.
20. FINANCIAL INSTRUMENTS
The interest rate profile of the financial liabilities of the Company at
December 31 was:
<TABLE>
<CAPTION>
Fixed rate financial liabilities
Weighted
Total Floating rate Fixed rate Weighted average period
{pound {pound {pound average for which rate
1999 sterling} sterling} sterling} interest rate is fixed
Currency '000 '000 '000 % Years
<S> <C> <C> <C> <C> <C>
US dollar 646,824 228,066 418,758 6.5 4.6
DM 12,851 -- 12,851 6.5 3.0
Sterling 219 -- 219 11.0 1.5
Other 920 -- 920 2.8 3.3
--------- ------------- ---------- -------------- --------------
660,814 228,066 432,748 6.5 4.5
========= ============= ========== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Fixed rate financial liabilities
Weighted
Total Floating rate Fixed rate Weighted average period
{pound {pound {pound average for which rate
1998 sterling} sterling} sterling} interest rate is fixed
Currency '000 '000 '000 % Years
<S> <C> <C> <C> <C> <C>
US dollar 676,142 275,576 400,566 6.5 5.6
DM 52,859 31,515 21,344 6.0 3.0
Sterling 10,433 10,023 410 12.0 1.0
Other 2,876 2,240 636 8.0 3.5
--------- ------------- ---------- -------------- --------------
742,310 319,354 422,956 6.5 5.5
========= ============= ========== ============== ==============
</TABLE>
31
<PAGE> 33
The Company held the following financial assets as of December 31:
<TABLE>
<CAPTION>
1999 1998
{pound {pound
sterling} sterling}
'000 '000
<S> <C> <C>
Cash Deposits
US Dollar 88,689 72,738
Sterling 29,685 25,207
Euro 31,029 --
Yen 21,090 --
Other 19,239 21,706
Debt Securities
Euro 43,083 --
DM -- 47,793
US Treasury bills and other 2,239 4,587
-------- --------
Total 235,054 172,031
======== ========
</TABLE>
The cash deposits comprise deposits placed primarily in money market accounts
and 7-day deposits. All the investments in debt securities are in fixed rate
securities. The average interest rate on the euro securities is 3.47%, and the
average time for which the rate is fixed is 0.1 years. The average interest
rate on the US Treasury bills is 5.71% (1998: 4.35%), and average time for
which the rate is fixed is 0.7 years (1998: 0.2 years). In 1998, the average
interest rate for the DM securities was 3.5%, and the average time for which
the rate was fixed was 0.2 years.
The Company has excluded debtors and creditors from its financial instrument
disclosures. The majority of these amounts mature within three months, and
there is no material interest rate gap on these amounts. There were no material
differences between the book value and fair values of financial assets and
liabilities at December 31, 1999 and 1998.
32
<PAGE> 34
21. RECONCILIATION TO US ACCOUNTING PRINCIPLES
The following is a summary of material adjustments to profit and shareholders'
funds which would be required if US Generally Accepted Accounting Principles
("US GAAP") had been applied instead of UK Generally Accepted Accounting
Principles ("UK GAAP").
<TABLE>
<CAPTION>
{pound {pound {pound
sterling} 1999 sterling} 1998 sterling} 1997
Profit '000 $'000* '000 $'000* '000 $'000*
<S> <C> <C> <C> <C> <C> <C>
Profit for the financial year
(UK GAAP) 181,032 293,272 94,105 158,096 117,014 193,073
Acquisition accounting (a) (76,380) (123,736) (36,091) (60,633) (44,496) (73,418)
Taxation (b) (14,578) (23,616) (13,613) (22,870) (4,647) (7,668)
Other (e) (2,040) (3,305) (150) (252) 1,082 1,785
-------- --------- -------- -------- -------- --------
Net income (US GAAP) 88,034 142,615 44,251 74,341 68,953 113,772
======== ========= ======== ======== ======== ========
Earnings per ordinary share:
-basic 14p 7p 13p
-diluted 13p 7p 12p
-------- -------- --------
Earnings per ordinary share
before goodwill
amortization:
-basic 24p 17p 13p
-diluted 23p 16p 12p
-------- -------- --------
Earnings per ADS**:
-basic $1.13 $ .59 $1.07
-diluted $1.05 $ .59 $ .99
--------- -------- --------
Earnings per ADS** before
goodwill amortization:
-basic $1.94 $1.43 $1.07
-diluted $1.86 $1.34 $ .99
--------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
{pound {pound
sterling} 1999 sterling} 1998
Shareholders' funds '000 $'000* '000 $'000*
<S> <C> <C> <C> <C>
Shareholders' funds (UK GAAP) 436,661 707,391 330,970 556,030
Acquisition accounting (a) 993,765 1,609,899 1,022,254 1,717,387
Treasury stock (c) (132,615) (214,836) (131,857) (221,520)
Dividends (d) 35,544 57,581 31,694 53,246
Other (e) 3,957 6,410 2,045 3,436
---------- ---------- ---------- ----------
Shareholders' equity (US GAAP) 1,337,312 2,166,445 1,255,106 2,108,579
========== ========== ========== ==========
</TABLE>
* Pounds sterling for the fiscal years ending December 31, 1999, 1998, and 1997
have been translated to US dollars using $1.62, $1.68, and $1.65, respectively,
per {pound sterling}1.00.
** Per American Depositary Share equivalent to 5 ordinary shares.
(a) Acquisition accounting
Under UK GAAP, goodwill arising on acquisitions prior to 1998 has been
eliminated directly against reserves. Goodwill arising in 1998 and after is
capitalized and amortized over a period of 20 years. Integration-related
amounts were expensed directly to the profit and loss account.
Under US GAAP, goodwill and other intangible assets are capitalized and
amortized by charges to the profit and loss account over a period of 20
years. The integration costs were either capitalized as goodwill or
expensed to the profit and loss account in the year earned.
33
<PAGE> 35
(b) Taxation
The taxation adjustment primarily relates to differences in the financial
statement treatments of stock option deductions under UK and US GAAP. Under
UK GAAP, current tax expense is reduced by the tax benefit of the stock
option deduction. Under US GAAP, the tax benefit is written off directly to
equity.
The deferred taxation adjustment primarily relates to the difference in the
recognition of deferred tax assets under UK and US GAAP. UK GAAP utilizes a
"partial provisioning" approach which does not allow for the recognition of
replaceable deferred assets (assets which will reverse in the next
accounting period but are replaced with a similar asset). US GAAP does not
have such a provision, instead allowing a "full provisioning" approach. In
addition, certain intangibles are treated as deferred tax items for US GAAP
that are permanent items under UK GAAP.
(c) Treasury stock
Under UK GAAP, shares held by the ESOT are reflected as investments.
Additionally, the trust related to the Global Stock Plan is not
consolidated with the Company. Under US GAAP, shares held by the ESOT and
the Global Stock Plan trust are reflected as treasury stock.
(d) Dividends
Under UK GAAP, ordinary dividends proposed after the end of an accounting
period are deducted in arriving at retained earnings for that period. Under
US GAAP, dividends are not recorded until formally approved.
(e) Other
Other adjustments include accounting differences relating to pension costs,
interval fund amortization, loans of employee stock ownership plans, and
deferred taxation.
B. FINANCIAL INFORMATION FOR THE THREE MONTHS ENDED 31 MARCH 2000
The following information is extracted without material adjustment from the
unaudited consolidated interim financial statements for the three months ended
31 March 2000 which were announced 19 April 2000:
AMVESCAP PLC
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
31 March
2000 1999
{pound {pound
sterling} sterling}
<S> <C> <C>
Revenues 369,516 241,052
Operating expenses (237,641) (162,265)
-------- --------
131,875 78,787
Goodwill amortisation (9,299) (9,140)
-------- --------
Operating profit 122,576 69,647
Investment income 3,478 2,784
Interest payable (10,702) (11,913)
-------- --------
Profit before taxation 115,352 60,518
Taxation (39,888) (22,638)
-------- --------
Profit after taxation 75,464 37,880
======== ========
Earnings per ordinary share:
-basic 11.6p 6.0p
-diluted 11.1p 5.7p
-------- --------
Earnings per ordinary share before goodwill amortisation:
-basic 13.1p 7.4p
-diluted 12.5p 7.1p
-------- --------
</TABLE>
34
<PAGE> 36
AMVESCAP PLC
UNAUDITED GROUP BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
31 March 31 Dec
2000 1999
{pound {pound
sterling} sterling}
<S> <C> <C>
Fixed assets
Goodwill 655,103 664,135
Investments 137,808 128,921
Tangible assets 107,246 108,021
---------- ---------
900,157 901,077
Current assets
Debtors 982,923 675,856
Investments 75,715 60,135
Cash at bank and in hand 205,195 189,732
---------- ---------
1,263,833 925,723
Creditors: amounts falling due within one year (1,080,787) (706,289)
---------- ---------
Net current assets 183,046 219,434
---------- ---------
Total assets less current liabilities 1,083,203 1,120,511
Creditors: amounts falling due after more than one year
Long-term debt (556,845) (659,120)
Provisions for liabilities and charges (24,555) (24,730)
---------- ---------
Net assets 501,803 436,661
========== =========
Capital and reserves
Called up share capital 169,069 168,617
Share premium account 482,717 478,860
Profit and loss account 456,181 380,717
---------- ---------
1,107,967 1,028,194
Other reserves (606,164) (591,533)
---------- ---------
Shareholders' funds, equity interests 501,803 436,661
========== =========
</TABLE>
35
<PAGE> 37
AMVESCAP PLC
UNAUDITED GROUP CASH FLOW STATEMENT
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
31 March
2000 1999
{pound {pound
sterling} sterling}
<S> <C> <C>
Operating Profit 122,576 69,647
Amortisation and depreciation 20,486 23,078
Change in debtors, creditors and other 10,917 11,780
---------- --------
Net cash inflow from operating activities 153,979 104,505
---------- --------
Interest paid, net of investment income (423) (953)
Taxation (7,093) (10,358)
Capital expenditures, net of sales (8,761) (9,847)
Net (purchases) / disposals of fixed asset investments (13,210) 11,251
Net repayment of debt (109,312) (33,303)
Foreign exchange on cash on bank and in hand 283 1,430
---------- --------
Increase in cash at bank and in hand 15,463 62,725
========== ========
</TABLE>
NOTES
1. The taxation charge for the three months to 31 March 2000 is estimated,
based on the total expected tax charge for the year. A significant
proportion of the charge is expected to arise from US operations.
2. The Directors consider that profit before amortisation of goodwill is a
more appropriate basis for the calculation of earnings per ordinary share
since this represents a more consistent measure of operating performance.
<TABLE>
<CAPTION>
2000
Profit before
Goodwill
Amortisation
{pound Number of
sterling} Shares Per Share
'000 '000 Amount
<S> <C> <C> <C>
Basic earnings per share 84,763 648,678 13.1p
=========
Issuance of options -- 29,170
------------- ---------
Diluted earnings per share 84,763 677,848 12.5p
============= ========= =========
</TABLE>
<TABLE>
<CAPTION>
1999
Profit before
Goodwill
Amortisation
{pound Number of
sterling} Shares Per Share
'000 '000 Amount
<S> <C> <C> <C>
Basic earnings per share 47,020 635,934 7.4p
=========
Issuance of options -- 29,808
------------- ---------
Diluted earnings per share 47,020 665,742 7.1p
============= ========= =========
</TABLE>
36
<PAGE> 38
AMVESCAP PLC
RECONCILIATION TO US ACCOUNTING PRINCIPLES
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
31 March
2000 1999
{pound {pound
sterling} sterling}
<S> <C> <C>
Net profit under UK GAAP 75,464 37,880
US GAAP adjustments:
Acquisition accounting (15,406) (20,456)
Taxation (17,046) (1,324)
Other (61) (2,876)
-------- --------
Net income under US GAAP 42,951 13,224
======== ========
Earnings per ordinary share:
- basic 6.6p 2.1p
- diluted 6.3p 2.0p
-------- --------
Earnings per ordinary share before goodwill amortisation
- basic 9.0p 4.5p
- diluted 8.6p 4.3p
-------- --------
</TABLE>
<TABLE>
<CAPTION>
31 March 31 December
2000 1999
{pound {pound
sterling} sterling}
<S> <C> <C>
Shareholders' funds under UK GAAP 501,803 436,661
US GAAP adjustments:
Acquisition accounting 992,174 993,765
Treasury stock (143,175) (132,615)
Dividends -- 35,544
Other 4,384 3,957
----------- ------------
Shareholders' equity under US GAAP 1,355,186 1,337,312
=========== ============
</TABLE>
37
<PAGE> 39
PART IV
FINANCIAL INFORMATION ON TRIMARK
The financial information contained in this Part IV is extracted without
material adjustment from the audited consolidated financial statements of
Trimark for each of the three years ended 31 March 2000. The financial
information has been prepared in accordance with Canadian generally accepted
accounting principles ("GAAP"). Canadian GAAP differs from UK GAAP in certain
respects, and a description of the relevant accounting principles which differ
is set out in footnote 19. The independent public accountants of Trimark for
the three years ended 31 March 2000 were Ernst & Young LLP who have issued
unqualified audit opinions on each of those three financial years.
A. FINANCIAL INFORMATION FOR THE THREE YEARS ENDED 31 MARCH 2000
The following information is extracted without material adjustment from the
audited consolidated financial statements of Trimark for each of the
financial periods ended 31 March 1998, 1999 and 2000.
38
<PAGE> 40
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As at March 31
2000 1999 1998
C$ C$ C$
(In thousands of Canadian dollars)
<S> <C> <C> <C>
ASSETS
INVESTMENT MANAGEMENT OPERATIONS
Current
Cash and cash equivalents 225,400 166,911 84,144
Marketable securities (note 5) 49,830 4,553 2,338
Other assets (note 3 [a]) 12,158 6,389 5,356
-------- ---------- --------
Total current assets 287,388 177,853 91,838
Investment in Lloyd George Management Limited, at cost 1,032 1,032 1,032
Fixed assets (note 4 [a]) 27,935 31,400 23,832
Deferred commissions 88,889 149,241 259,666
-------- ---------- --------
405,244 359,526 376,368
-------- ---------- --------
TRUST COMPANY OPERATIONS
Cash and cash equivalents 28,085 73,496 51,802
Investment securities (note 5) 84,568 39,516 9,900
Loans (notes 6 and 7) 170,698 602,675 426,644
Other assets (note 3 [b]) 3,027 4,802 2,124
Fixed assets (note 4 [b]) 110 2,845 2,435
Deferred income taxes 2,514 -- --
Goodwill on acquisition of Trimark Trust 1,393 6,471 6,836
-------- ---------- --------
290,395 729,805 499,741
-------- ---------- --------
695,639 1,089,331 876,109
======== ========== ========
LIABILITIES
INVESTMENT MANAGEMENT OPERATIONS
Total current liabilities (note 8) 11,920 97,139 56,191
Lease provisions and inducements 2,819 6,636 3,301
Deferred income taxes 34,433 60,380 112,715
-------- ---------- --------
49,172 164,155 172,207
-------- ---------- --------
TRUST COMPANY OPERATIONS
Deposit liabilities (note 9) 246,322 585,782 444,924
Accounts payable and other liabilities 5,338 1,432 559
Deferred income taxes -- 537 460
-------- ---------- --------
251,660 587,751 445,943
-------- ---------- --------
300,832 751,906 618,150
-------- ---------- --------
SHAREHOLDERS' EQUITY
Share capital (note 11) 100,062 96,717 91,915
Retained earnings 294,745 240,708 166,044
-------- ---------- --------
394,807 337,425 257,959
-------- ---------- --------
695,639 1,089,331 876,109
======== ========== ========
</TABLE>
See accompanying notes
39
<PAGE> 41
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Years ended March 31
2000 1999 1998
C$ C$ C$
(In thousands of Canadian dollars)
except per share amounts)
<S> <C> <C> <C>
REVENUE
INVESTMENT MANAGEMENT OPERATIONS
Management fees 500,254 515,938 540,803
Management fee rebate (26,121) (20,940) (14,655)
-------- -------- --------
Net management fees 474,133 494,998 526,148
Redemption fees and other income 46,968 76,318 30,517
-------- -------- --------
521,101 571,316 556,665
TRUST COMPANY OPERATIONS
Investment and other income (note 12) 26,440 37,297 29,886
-------- -------- --------
547,541 608,613 586,551
-------- -------- --------
EXPENSES
INVESTMENT MANAGEMENT OPERATIONS
Selling, general and administration 138,441 137,308 129,591
Amortization of deferred commissions 112,318 154,914 165,055
Trailing commissions 97,094 99,841 112,641
Depreciation and amortization 11,788 15,503 11,085
-------- -------- --------
359,641 407,566 418,372
-------- -------- --------
TRUST COMPANY OPERATIONS
Interest on deposit liabilities 11,423 24,638 18,615
Selling, general and administration 3,250 11,825 11,121
Depreciation and amortization 411 1,670 1,423
Provision for (recovery of) loan losses 211 (91) 29
-------- -------- --------
15,295 38,042 31,188
-------- -------- --------
374,936 445,608 449,560
-------- -------- --------
Income before income taxes 172,605 163,005 136,991
-------- -------- --------
Provision for income taxes (note 13)
Current 106,539 125,458 42,953
Deferred (28,998) (52,258) 13,186
-------- -------- --------
77,541 73,200 56,139
-------- -------- --------
NET INCOME FOR THE YEAR 95,064 89,805 80,852
Retained earnings, beginning of year 240,708 166,044 94,476
Dividends declared on common shares (19,031) (15,141) (9,284)
Cost of common shares repurchased
in excess of stated value (note 11) (21,996) -- --
-------- -------- --------
RETAINED EARNINGS, END OF YEAR 294,745 240,708 166,044
======== ======== ========
EARNINGS PER SHARE (NOTE 11):
Basic $ 1.00 $ 0.95 $ 0.87
-------- -------- --------
Fully diluted $ 0.97 $ 0.92 $ 0.83
-------- -------- --------
</TABLE>
See accompanying notes
40
<PAGE> 42
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended March 31
2000 1999 1998
C$ C$ C$
(In thousands of Canadian dollars)
<S> <C> <C> <C>
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net income for the year 95,064 89,805 80,852
Add (deduct) charges (credits) to operations not requiring a
current cash payment:
Amortization of deferred commissions 112,318 154,914 165,055
Deferred income taxes (28,998) (52,258) 13,186
Depreciation and amortization 12,199 17,173 12,508
Trust company gain on sale of assets (note 12) (5,950) -- --
Other (2,171) 1,661 (36)
-------- -------- --------
182,462 211,295 271,565
Commissions paid on sales of back-end load funds (51,966) (44,489) (173,735)
Net change in non-cash working capital
balances related to operations (94,391) 36,664 34,072
-------- -------- --------
36,105 203,470 131,902
-------- -------- --------
INVESTING ACTIVITIES
Increase in loans (2,408) (175,940) (58,386)
Purchase of marketable securities (45,277) (2,215) (2,338)
Purchase of investment securities (59,127) (54,934) (10,016)
Proceeds from sales of investment securities 14,075 25,318 71,854
Trust company proceeds on sale of assets (note 12) 24,773 -- --
Additions to fixed assets (7,142) (24,828) (16,398)
Lease inducements -- 1,625 --
-------- -------- --------
(75,106) (230,974) (15,284)
-------- -------- --------
FINANCING ACTIVITIES
Issue of common shares (note 11) 4,983 4,802 6,383
Bank term loan -- -- (36,500)
Repurchase of common shares (note 11) (23,634) -- --
Increase in deposit liabilities 88,841 140,858 23,373
Dividends paid on common shares (18,111) (13,695) (8,315)
-------- -------- --------
52,079 131,965 (15,059)
-------- -------- --------
NET INCREASE IN CASH DURING THE YEAR 13,078 104,461 101,559
Cash and cash equivalents, beginning of year 240,407 135,946 34,387
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR 253,485 240,407 135,946
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid 6,414 17,542 20,710
-------- -------- --------
Income taxes paid 192,635 83,229 6,508
-------- -------- --------
</TABLE>
See accompanying notes
41
<PAGE> 43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended March 31, 2000, 1999 and 1998
(In thousands of Canadian dollars, except share and per share amounts)
1. OPERATIONS
Trimark Financial Corporation (the "Corporation") is incorporated under the
Business Corporations Act (Ontario). Its shares are listed on the Toronto Stock
Exchange under the symbol TMF. The Corporation's principal business is conducted
through its wholly owned subsidiary, Trimark Investment Management Inc. (TIMI).
The Corporation also owns Trimark Trust (TT). Trust assets and liabilities are
held in TT, which is a federally regulated trust company under the Trust and
Loans Companies Act.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in Canada. Information as to the
differences between Canadian and UK GAAP is set out pages 51 and 52 of this Part
IV. The significant accounting policies are summarized as follows:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Corporation
and those of TIMI and TT.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise bank deposits, treasury bills, bankers'
acceptances and bank term deposits, which have maturities of less than 90 days
and are carried at cost plus accrued interest that approximates market value.
MARKETABLE SECURITIES
Marketable securities consist of mutual fund investments. They are recorded at
cost plus accrued income or, in the case of impairment that is other than
temporary, at net realizable value.
INVESTMENT SECURITIES
Investment securities consist of debt and equity securities.
Debt securities are securities purchased where the Corporation's original
intention is to hold the securities to maturity or until market conditions
render alternative investments more attractive. Debt securities are recorded at
amortized cost plus accrued interest. Equity securities are recorded at cost or,
in the case of impairment that is other than temporary, at net realizable value.
FIXED ASSETS
Fixed assets are carried at cost, less accumulated depreciation and
amortization. Rates and bases of depreciation and amortization applied by the
Corporation on an annual basis are as follows:
Furniture and fixtures 20 per cent declining balance
Office equipment 20 per cent declining balance
Computer hardware 50 per cent declining balance
Computer software 50 per cent straight-line
Leasehold improvements Over the term of the related lease
GOODWILL
Goodwill is recorded at cost and is being amortized on a straight-line basis
over 20 years. The value of goodwill is assessed on a regular basis in relation
to the expected discounted cash flows and earnings of subsidiaries. Any
impairment in the value of goodwill would be written off to income.
LOANS
Loans are recorded at amortized cost plus accrued interest less accumulated
allowance for loan losses.
A loan is recognized as being impaired when the timely collection of the full
amount of principal and interest is no longer reasonably assured. As a matter
of practice, a loan is deemed to be impaired at the earlier of the date it has
been specifically provided for, or has been in arrears for 90 days.
42
<PAGE> 44
An allowance for loan losses is maintained at an amount considered adequate to
absorb all known and probable losses and costs incurred. The allowance consists
of specific and general provisions. It is generally increased by these
provisions, which are charged to income, and reduced by write-offs, net of
recoveries.
The carrying value of an impaired loan is reduced to its estimated realizable
value by discounting the expected future cash flows of the loan at its inherent
rate of interest. Where the amount and timing of the future cash flows cannot be
estimated, impairment is measured with respect to the value of the underlying
security. The allowance is the difference between the loan's carrying value and
its estimated realizable value.
A general allowance is maintained to absorb losses that cannot be determined on
a specific loan basis. The general allowance is based on current economic
conditions, payment arrears, concentration of loans and historical credit loss
experience.
REVENUE RECOGNITION
Net management fees charged to mutual and segregated funds are based upon the
net asset values of the respective portfolios and are recognized on an accrual
basis.
Redemption fees payable by unitholders of back-end load funds are recognized as
revenue on the trade date of the redemption of applicable fund units.
Loan interest income is accounted for on the accrual basis, except for
non-accrual loans.
COMMISSIONS
Commissions paid on sales of fund units of back-end load funds represent
commissions paid by the Corporation to financial advisers, and are recorded on
the trade date of the sale of applicable fund units. These commissions are
deferred and amortized over a period of 36 months commencing in the month in
which the commissions are paid.
Trailing commissions are calculated and accrued monthly, and paid quarterly to
financial advisers based on their average client assets.
INCOME TAXES
Income taxes are recorded by the deferral method of accounting using historical
income tax rates. Deferred income taxes result from differences in the timing of
income and expense recognition for accounting and tax purposes.
For fiscal years beginning on or after January 1, 2000, companies are required
under accounting principles generally accepted in Canada to adopt new accounting
rules to compute deferred income tax using the current rate method. The
Corporation will adopt this new standard effective April 1, 2000.
DERIVATIVE FINANCIAL INSTRUMENTS
Interest rate, foreign exchange and equity contracts are used to hedge the
Corporation's exposure arising from its on and off-balance sheet positions. They
are accounted for on the accrual basis, whereby income and expense from the
derivative instrument is accrued and there is no recognition of unrealized gains
and losses. Option premiums are amortized over the term of the contract. When
contracts are no longer effective as hedges, they are immediately settled and
any realized gains and losses from the settlement are recognized in the period
of settlement.
EARNINGS PER SHARE
The earnings per share amounts have been computed using the weighted average
number of common shares outstanding during the year.
STOCK OPTION PLAN
The corporation has an Executive Stock Option Plan, which is described in Note
11(b). No compensation expense is recognized when stock options are issued. Any
consideration received on exercise of stock options is credited to share
capital.
43
<PAGE> 45
3. OTHER ASSETS
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
------- ------ ------
<S> <C> <C> <C>
(a) INVESTMENT MANAGEMENT OPERATIONS
Accounts receivable and other 7,700 5,703 4,454
Employee loans (note 11 [a]) 289 686 902
Income taxes recoverable 4,169 -- --
------- ------ ------
12,158 6,389 5,356
======= ====== ======
(b) TRUST COMPANY OPERATIONS
Accounts receivable and other 1,429 3,246 1,444
Income taxes recoverable 1,598 1,556 680
------- ------ ------
3,027 4,802 2,124
======= ====== ======
</TABLE>
4. FIXED ASSETS
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
-------- -------- --------
<S> <C> <C> <C>
(a) INVESTMENT MANAGEMENT OPERATIONS
Furniture and fixtures 10,883 10,366 6,891
Office equipment 2,726 2,659 2,164
Computer hardware 21,420 17,488 12,430
Computer software 8,155 6,623 4,889
Leasehold improvements 14,972 14,874 9,437
-------- -------- --------
58,156 52,010 35,811
Accumulated depreciation and amortization (30,221) (20,610) (11,979)
-------- -------- --------
Net book value 27,935 31,400 23,832
======== ======== ========
(b) TRUST COMPANY OPERATIONS
Furniture and fixtures -- 810 634
Computer hardware -- 1,050 960
Computer software 256 340 1,090
Leasehold improvements -- 1,847 1,041
-------- -------- --------
256 4,047 3,725
Accumulated depreciation and amortization (146) (1,202) (1,290)
-------- -------- --------
Net book value 110 2,845 2,435
======== ======== ========
</TABLE>
44
<PAGE> 46
5. MARKETABLE AND INVESTMENT SECURITIES
<TABLE>
<CAPTION>
2000 1999 1998
Carrying Carrying Carrying
Value Fair value value Fair Value Value Fair Value
$ $ $ $ $ $
-------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
DEBT SECURITIES
Federal bonds 9,910 9,637 -- -- -- --
Corporate bonds 57,179 52,299 17,464 17,105 -- --
Structured notes 16,442 15,425 22,052 20,985 -- --
-------- ---------- -------- ---------- -------- ----------
83,531 77,361 39,516 38,090 -- --
EQUITY SECURITIES
Preferred shares -- -- -- -- 9,900 9,880
Real estate investment trusts 1,037 935 -- -- -- --
-------- ---------- -------- ---------- -------- ----------
84,568 78,296 39,516 38,090 9,900 9,880
======== ========== ======== ========== ======== ==========
</TABLE>
On March 31, 2000, the debt securities had a weighted average term to maturity
of 7.08 years (1999 - 9.09 years; 1998 - nil) and a weighted average yield of
7.78 per cent (1999 - 6.95 per cent; 1998 - nil).
On March 31, 2000, the investment management operations had marketable
securities carried at $49,830 (1999 - $4,553; 1998 - $ 2,338) with a fair value
of approximately $63,000 (1999 - $4,400; 1998 - $2,400).
6. LOANS
On March 31, 2000, the Corporation's mortgage portfolio comprised substantially
fixed-rate mortgages with a weighted average term to maturity of 3.00 years
(1999 - 3.54 years; 1998 - 2.46 years), a weighted average yield of 7.13 per
cent (1999 - 6.65 per cent; 1998 - 6.98 per cent) and a fair value of
approximately $47,900 (1999 - $483,900; 1998 - $366,100).
On March 31, 2000, the Corporation's consumer loan portfolio comprised variable
and fixed-rate loans with a weighted average term to maturity of 1.42 years
(1999 - 1.21 years; 1998 - 1.31 years), a weighted average yield of 8.25 per
cent (1999 - 7.23 per cent; 1998 - 6.52 per cent) and a fair value of
approximately $120,300 (1999 - $124,800; 1998 - $69,800).
The fair value of loans is determined using discounted cash flows based on
prevailing rates of interest for loans with similar terms and credit risk.
The Corporation's loans, net of unearned income and allowance for loan losses,
are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
-------- -------- --------
<S> <C> <C> <C>
Insured mortgage loans -- 297,681 266,521
Conventional mortgage loans 49,501 181,282 91,228
Consumer loans 122,009 124,598 69,892
-------- -------- --------
171,510 603,561 427,641
Allowance for loan losses (812) (886) (997)
-------- -------- --------
Total loans 170,698 602,675 426,644
======== ======== ========
</TABLE>
45
<PAGE> 47
Included in loans are the following impaired loans and related allowance for
loan losses:
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
----- ------ -----
<S> <C> <C> <C>
Conventional mortgage loans 230 2,377 505
Consumer loans 201 202 60
----- ------ -----
431 2,579 565
Allowance for loan losses (812) (886) (997)
----- ------ -----
Total net impaired loans (381) 1,693 (432)
===== ====== =====
</TABLE>
7. ALLOWANCE FOR LOAN LOSSES
Changes in the Corporation's allowance for loan losses are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
----- ------ ------
<S> <C> <C> <C>
Balance, beginning of year 886 997 1,275
Provision for (recovery of) loan losses 211 (91) 29
Loan write-offs (285) (20) (307)
----- ------ ------
Balance, end of year 812 886 997
===== ====== ======
</TABLE>
8. TOTAL CURRENT LIABILITIES
<TABLE>
<CAPTION>
2000 1999 1998
$ $ $
------- ------- -------
<S> <C> <C> <C>
INVESTMENT MANAGEMENT OPERATIONS
Accounts payable and accrued liabilities 7,207 11,015 14,511
Income taxes payable -- 82,331 39,333
Dividends payable 4,713 3,793 2,347
------- ------- -------
11,920 97,139 56,191
======= ======= =======
</TABLE>
9. DEPOSIT LIABILITIES
Included within deposit liabilities are guaranteed investment certificates of
$236,745 (1999 - $572,245; 1998 - $424,521). Guaranteed investment certificates
have fixed maturity dates from 2001 to 2006 and are collateralized by assets of
a like amount. On March 31, 2000, the guaranteed investment certificates had a
weighted average term to maturity of 1.74 years (1999 - 1.09 years; 1998 - 1.41
years), a weighted average cost of 5.37 per cent (1999 - 4.95 per cent; 1998 -
4.76 per cent) and a fair value of approximately $237,800 (1999 - $578,100; 1998
- $426,400). Fair value is determined using discounted cash flows of contractual
obligations based on prevailing rates of interest on guaranteed investment
certificates with similar terms and maturities.
10. BANK TERM LOAN
The Corporation has a committed revolving term loan facility which it may draw
on up to a maximum of $100,000. This maximum was increased from $50,000
effective September 30, 1998. At the option of the Corporation, the term loan
may bear interest on a prime rate basis or bankers' acceptances basis
(maturities not to exceed 180 days with minimum terms of 30 days). The
collateral pledged for this credit facility consists of a general security
agreement, a pledge of all of the outstanding common shares of TIMI and a pledge
of all of the subordinated notes evidencing the indebtedness of TIMI to the
Corporation.
46
<PAGE> 48
11. SHARE CAPITAL
The authorized share capital of the Corporation consists of an unlimited number
of common shares and an unlimited number of preferred shares. The common shares
of the Corporation were split on a two-for-one basis on July 10, 1998, July 11,
1996 and July 13, 1995. All amounts below have been restated to give effect to
the share splits. No preferred shares have been issued. The changes in issued
share capital were as follows:
<TABLE>
<CAPTION>
2000 1999 1998
Number of Amount Number of Amount Number of Amount
shares $ shares $ shares $
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common shares:
Issued, beginning
of year 94,850,650 $ 96,717 93,897,550 $ 91,915 91,869,950 $ 85,532
Shares issued for
cash during the
year 953,900 4,983 953,100 4,802 2,027,600 6,383
Shares
repurchased
during the year (1,549,100) (1,638) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Issued, end of
year 94,255,450 $ 100,062 94,850,650 $ 96,717 93,897,550 $ 91,915
=========== =========== =========== =========== =========== ===========
</TABLE>
(a) Non-interest bearing loans collateralized by the common shares were
extended to employees to finance purchases of shares of the Corporation.
The loan agreements require repayments equal to the amount of dividends
paid on the applicable common shares. The market value of the shares used
as collateral for the loans exceeded the value of the loans outstanding at
year-end.
(b) On February 25, 1992, the Board of Directors of the Corporation established
an Executive Stock Option Plan, as amended on June 24, 1994, December 31,
1995, June 24, 1997, July 23, 1997, June 24, 1998 and June 29, 1999, under
which options in respect of up to 14,000,000 common shares of the
Corporation may be granted from time to time. The exercise price of each
option equals the market price of the Corporation's stock on the date of
grant, and an option's maximum term is 10 years. Options vest after two
years from the date of grant at varying percentages up to the expiry date.
A summary of the status of the Corporation's stock option plan as of March
31, 2000, 1999 and 1998, and the changes during the years then ended are as
follows:
<TABLE>
<CAPTION>
2000 1999 1998
Weighted- Weighted- Weighted-
average average average
Number exercise price Number exercise price Number exercise price
of options $ of options $ of options $
---------- -------------- ---------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 6,824,600 14.12 6,120,000 10.94 7,677,600 7.01
Granted 1,875,750 17.16 1,824,700 20.43 701,000 32.14
Exercised (953,900) 5.22 (953,100) 5.04 (2,027,600) 3.15
Cancelled (465,000) 19.38 (167,000) 18.08 (231,000) 13.08
---------- -------------- ---------- -------------- ---------- --------------
Outstanding at
end of year 7,281,450 15.73 6,824,600 14.12 6,120,000 10.94
========== ============== ========== ============== ========== ==============
Options exercisable
at year-end 2,988,000 2,693,700 2,212,000
========== ========== ==========
</TABLE>
47
<PAGE> 49
The following table summarizes information about stock options outstanding
at March 31, 2000:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
Number Weighted-average Weighted-average Number Weighted-average
Range of outstanding at remaining exercise price exercisable at exercise price
exercise prices March 31, 2000 contractual life $ March 31, 2000 $
-------------- ---------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
$4.375 to $8.375 1,748,800 4.6 years 5.04 1,692,800 4.96
$10.8438 to $19.80 3,286,850 8.1 years 16.04 1,049,200 14.28
$20.25 to $21.10 1,645,200 8.7 years 20.50 -- --
$27.375 to $35.00 600,600 7.6 years 32.08 246,000 32.09
-------------- ---------------- ---------------- -------------- ----------------
7,281,450 7.4 years 15.73 2,988,000 10.46
============== ================ ================ ============== ================
</TABLE>
Since the inception of the Executive Stock Option Plan, 3,540,800 (1999 -
3,051,900; 1998 - 2,273,800) options have been issued and exercised net of
cancellations. There are 2,379,150 (1999 - 3,789,900; 1998 - 5,447,600)
options available to be granted under the plan.
In the event of a change in control of the Corporation, all options become
fully exercisable.
(c) The Corporation has obtained applicable regulatory approval to purchase for
cancellation, from time to time, up to 5,842,109 of its common shares
through the facilities of the Toronto Stock Exchange. Present approval for
such purchases extends through to October 26, 2000.
During the year, 1,549,100 common shares (1999 - nil; 1998 - nil) were
repurchased under the normal course issuer bid at an average cost of $15.26
per share for a total consideration of $23,634. Retained earnings was
reduced by $21,996 for the cost of the shares in excess of their stated
value.
(d) Fully diluted earnings per share assumes that all of the options to
purchase common shares existing at the end of the year were exercised at
the beginning of the year or the date of issuance as applicable. For
purposes of calculating the fully diluted earnings per share figures,
imputed interest from investing the proceeds from the options exercised at
the prime rate after reflecting taxes was added to income.
12. SALE OF ASSETS
On March 25, 1999, Trimark Trust signed an asset purchase agreement to sell
selected assets and transfer liabilities related to its retail branch-based loan
and deposit business and broker-based mortgage business to The Toronto-Dominion
Bank (TD). The transaction closed on April 30, 1999 and the transfer of assets
and liabilities was completed by June 30, 1999. Insured and conventional
mortgages of $425,824 and consumer loans of $8,350 were sold and TD assumed the
obligations and liabilities at a book value of $428,301 related to the demand
and guaranteed investment certificate deposits. In exchange for the assets and
liabilities, TT received a premium representing the benefits of the future
revenue stream associated with the transferred assets and liabilities. Breakage
costs related to the sale, including lease commitments and asset and goodwill
write-offs, reduced the premium received. The premium net of breakage costs is
included in trust company investment and other income.
13. INCOME TAXES
The components of the Corporation's effective income tax rates are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
----- ----- -----
<S> <C> <C> <C>
Combined basic Canadian federal and
provincial income tax rate 44.6% 44.6% 44.6%
Change in taxes resulting from:
Non-deductible items 0.4 0.5 0.9
Non-taxable Canadian dividends -- -- (0.2)
Corporate minimum tax -- -- (4.0)
Large corporations tax -- (0.3) (0.3)
Other (0.1) 0.1 --
----- ----- -----
Effective income tax rate 44.9% 44.9% 41.0%
===== ===== =====
</TABLE>
48
<PAGE> 50
14. LEASE COMMITMENTS
Aggregate lease commitments at March 31, 2000 for the Corporation's premises
are as follows:
<TABLE>
<S> <C>
2001 $ 5,933
2002 5,728
2003 5,463
2004 5,052
2005 3,267
Thereafter 9,970
--------
$ 35,413
========
</TABLE>
15. FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
2000 1999 1998
Notional Fair Notional Fair Notional Fair
amount value amount value amount value
$ $ $ $ $ $
-------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Swaps 20,000 62 70,000 (230) 20,000 (198)
-------- ------ -------- ------ -------- ------
FOREIGN EXCHANGE CONTRACTS
Cross-currency interest
rate swaps 24,152 1,408 23,222 540 -- --
Forward foreign
exchange contracts 9,790 128 5,000 203 -- --
-------- ------ -------- ------ -------- ------
33,942 1,536 28,222 743 -- --
-------- ------ -------- ------ -------- ------
EQUITY CONTRACTS 6,835 1,269 11,515 637 3,716 161
-------- ------ -------- ------ -------- ------
60,777 2,867 109,737 1,150 23,716 (37)
======== ====== ======== ====== ======== ======
</TABLE>
Fair value represents the amount that would be received (paid) if all contracts
were terminated on March 31, 2000.
Maturities and weighted average interest rates on various contracts are as
follows:
<TABLE>
<CAPTION>
Term to maturity
Within 1 year 1 to 3 years 3 to 5 years 5 to 10 years
$ Rate % $ Rate % $ Rate % $ Rate %
-------- -------- -------- ------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Pay CDN $ fixed -- -- -- -- -- -- -- --
Pay CDN $ floating -- -- -- -- 20,000 5.04 -- --
Pay US $ fixed -- -- 5,902 6.71 4,195 5.25 3,700 5.60
Pay US $ floating -- -- 5,788 6.57 4,567 7.00 -- --
-------- -------- -------- ------- -------- -------- -------- -------
-- 11,690 28,762 3,700
-------- -------- -------- ------- -------- -------- -------- -------
FORWARD FOREIGN
EXCHANGE CONTRACTS 9,790 -- -- -- -- -- -- --
-------- -------- -------- ------- -------- -------- -------- -------
EQUITY CONTRACTS 4,735 -- 2,100 -- -- -- -- --
-------- -------- -------- ------- -------- -------- -------- -------
14,525 13,790 28,762 3,700
======== ======== ======== ======= ======== ======== ======== =======
<CAPTION>
2000 1999 1998
Total Total Total
notional notional notional
amount amount amount
$ $ $
-------- -------- --------
<S> <C> <C> <C>
Interest rate contracts
Pay CDN $ fixed -- 50,000 --
Pay CDN $ floating 20,000 20,000 20,000
Pay US $ fixed 13,797 12,867 --
Pay US $ floating 10,355 10,355 --
-------- -------- --------
44,152 93,222 20,000
-------- -------- --------
FORWARD FOREIGN
EXCHANGE CONTRACTS 9,790 5,000 --
-------- -------- --------
EQUITY CONTRACTS 6,835 11,515 3,716
-------- -------- --------
60,777 109,737 23,716
======== ======== ========
</TABLE>
49
<PAGE> 51
16. CONTINGENT LIABILITY
Trimark Trust is involved from time to time in legal proceedings relating to its
lending activities. Management estimates the aggregate liability resulting from
any proceedings will not be material.
17. COMPARATIVE FINANCIAL STATEMENTS
The comparative consolidated financial statements have been reclassified from
statements previously presented to conform to the presentation of the 2000
consolidated financial statements.
18. SUBSEQUENT EVENT
On May 9, 2000, the Corporation's board of directors approved a merger agreement
with AMVESCAP PLC (AVZ). This agreement contemplates the acquisition through a
plan of arrangement by AVZ of all the outstanding common shares and options of
the Corporation from its shareholders. Upon completion of the transaction, which
is expected to occur during August 2000 but, in any event, before November 15,
2000, the Corporation will be an indirect wholly owned subsidiary of AVZ.
The closing of the transaction is subject to various approvals including
shareholders of both entities, unitholders of certain Trimark mutual funds, and
court and regulatory approvals.
The agreement contains a break fee clause of $100,000 which would be paid by the
Corporation to AVZ if the transaction is terminated (a) by AVZ due to the
withdrawal of the Corporation's directors' recommendation of the agreement or
their recommendation of another acquisition proposal, or (b) by the Corporation
or AVZ solely because (i) approval of the shareholders of the Corporation is not
received, (ii) an acquisition proposal was made by another party, and (iii) the
Corporation enters into a competing transaction within 18 months following the
termination of the merger agreement
50
<PAGE> 52
B. RECONCILIATION TO UNITED KINGDOM ACCOUNTING PRINCIPLES AND CONFORMITY TO
AMVESCAP PLC ACCOUNTING POLICIES (IN THOUSANDS)
The consolidated financial statements of Trimark Financial Corporation
("Trimark") have been prepared in accordance with Canadian (CDN) generally
accepted accounting principles (GAAP).
In respect of the three years ended 31 March 2000, there are no material
differences in Trimark's profits before taxation, taxation charge and profits
after taxation prepared under CDN GAAP and United Kingdom (UK) GAAP. Under CDN
GAAP, dividends are accounted for in the year they are declared whereas under UK
GAAP dividends are recorded in the year to which they relate.
Trimark's deferred sales commission asset is classified as a long-term asset and
is amortized over three years. The policy at AMVESCAP PLC is to classify this
asset as a current debtor and to amortize the deferred sales commissions paid
less redemption fees earned over the redemption period (6 years) of the
underlying assets under management.
The information below presents the Trimark consolidated balance sheet as at 31
March 2000 reflecting the change from a three-year amortization period to a
six-year period for the deferred sales commission asset (additional asset of
C$62,876 and a deferred income tax liability of C$28,294) and the accrual of the
additional dividend (C$4,753). Shareholders' funds as at 31 March 1999 and 1998
is presented to reflect the differing treatment of dividends. The conversion to
pounds sterling was prepared using an ending exchange rate of C$1/{pound
sterling}0.4338. The adjustments, translated at C$1/{pound sterling}0.4338,
presented in pounds sterling are {pound sterling}27,275, {pound
sterling}12,274, and {pound sterling}2,062 for the deferred sales commission
asset, related deferred income tax liability, and the additional dividend
accrual, respectively.
<TABLE>
<CAPTION>
31 March 2000
Trimark Adjustments As adjusted As adjusted
C$ C$ C$ {pound sterling}
<S> <C> <C> <C> <C>
FIXED ASSETS
Goodwill 1,393 -- 1,393 604
Investments 85,600 -- 85,600 37,133
Tangible assets 28,045 -- 28,045 12,166
--------- ----------- ----------- -----------
115,038 -- 115,038 49,903
CURRENT ASSETS
Debtors 277,286 62,876 340,162 147,562
Investments 49,830 -- 49,830 21,616
Cash at bank & in hand 253,485 -- 253,485 109,962
--------- ----------- ----------- -----------
580,601 62,876 643,477 279,140
Creditors: amounts falling due within 1 year (263,580) (4,753) (268,333) (116,403)
--------- ----------- ----------- -----------
NET CURRENT ASSETS 317,021 58,123 375,144 162,737
Total assets less current liabilities 432,059 58,123 490,182 212,640
Provisions for liabilities and charges (37,252) (28,294) (65,546) (28,434)
--------- ----------- ----------- -----------
NET ASSETS 394,807 29,829 424,636 184,206
========= =========== =========== ===========
CAPITAL AND RESERVES
Called up share capital 100,062 -- 100,062 43,406
Profit and loss account 294,745 29,829 324,574 140,800
--------- ----------- ----------- -----------
SHAREHOLDERS' FUNDS, EQUITY INTERESTS 394,807 29,829 424,636 184,206
========= =========== =========== ===========
</TABLE>
51
<PAGE> 53
<TABLE>
<CAPTION>
As at 31 March
1999 1998
C$ C$
<S> <C> <C>
Shareholders' equity under CDN GAAP 337,425 257,959
Dividend payable (4,727) (3,717)
-------- --------
Shareholders' funds under UK GAAP 322,698 254,242
======== ========
</TABLE>
Trimark presents the amortization of deferred sales commissions and the costs of
trailing commissions as operating expense whereas AMVESCAP PLC presents them as
contra revenues. The profit and loss account for the year ended 31 March 2000
adjusted to reflect the reclassification of these expenses is presented below.
The conversion to pounds sterling was prepared using an average rate of
C$1/{pound sterling}0.4220.
<TABLE>
<CAPTION>
Year ended 31 March 2000
Trimark Adjustments As adjusted As adjusted
C$ C$ C$ {pound sterling}
(in thousands)
<S> <C> <C> <C> <C>
Revenues 521,101 (209,412) 311,689 131,533
Operating expenses (363,350) 209,412 (153,938) (64,962)
--------- ----------- ----------- -----------
157,751 -- 157,751 66,571
Goodwill amortization (163) -- (163) (69)
--------- ----------- ----------- -----------
Operating profit 157,588 -- 157,588 66,502
Investment income 26,440 -- 26,440 11,158
Interest payable (11,423) -- (11,423) (4,821)
--------- ----------- ----------- -----------
Profit before taxation 172,605 -- 172,605 72,839
Taxation (77,541) -- (77,541) (32,722)
--------- ----------- ----------- -----------
Profit after taxation 95,064 -- 95,064 40,117
========= =========== =========== ===========
</TABLE>
52
<PAGE> 54
ACCOUNTING POLICIES RECONCILIATION LETTER
[ERNST & YOUNG LETTERHEAD]
The Directors
AMVESCAP PLC
11 Devonshire Square
London
EC2M 4YR
The Partners
Cazenove & Co.
12 Tokenhouse Yard
London
EC2R 7AN
23 June 2000
DEAR SIRS
We report on the unaudited reconciliation of the consolidated shareholders'
funds as at 31 March 1998 and 31 March 1999 and the consolidated balance sheet
as at 31 March 2000 and the consolidated profit and loss account for the
financial year ended 31 March 2000 of Trimark Financial Corporation ("Trimark")
and its subsidiaries as set out on pages 51 and 52 in this Part IV ("the
financial information (as adjusted) of Trimark") prepared on the basis of the
accounting policies of AMVESCAP PLC.
RESPONSIBILITIES
It is the responsibility solely of the Directors of AMVESCAP PLC to prepare the
financial information (as adjusted) of Trimark in accordance with paragraph
12.11 of the Listing Rules of the UK Listing Authority ("the Listing Rules").
It is our responsibility to form an opinion, as required by the Listing Rules,
on the financial information (as adjusted) of Trimark and to report our opinion
to you.
We do not accept any responsibility for any reports previously given by us on
the consolidated financial statements of Trimark used in the compilation of the
financial information (as adjusted) of Trimark beyond that owed to those to
whom those reports were addressed by us at the dates of their issue.
BASIS OF OPINION
We conducted our work in accordance with the Statements of Investment Circular
Reporting Standards issued by the Auditing Practices Board. Our work, which was
substantially less in scope than an audit and involved no independent
examination of any of the underlying financial information, consisted primarily
of making enquiries of the management of Trimark to establish the accounting
policies which were applied in the preparation of the underlying financial
information, considering the evidence supporting the reclassifications and
adjustments made and discussing the financial information (as adjusted) of
Trimark with the Directors of AMVESCAP PLC.
Our work has not been carried out in accordance with auditing standards
generally accepted in Canada and accordingly should not be relied upon as if it
had been carried out in accordance with those standards.
53
<PAGE> 55
AMVESCAP PLC
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited pro forma consolidated balance sheet and the unaudited pro forma
consolidated statement of earnings have been derived from the audited
consolidated financial statements of AMVESCAP PLC ("AMVESCAP") as at and for
the year ended December 31, 1999 and the audited consolidated financial
statements of Trimark Financial Corporation ("Trimark") as at and for the year
ended March 31, 2000, adjusted to reflect the combination of AMVESCAP and
Trimark pursuant to the Merger Agreement. The unaudited pro forma consolidated
financial statements have been prepared by management using generally accepted
accounting principles in the United Kingdom ("UK GAAP").
The accompanying unaudited pro forma consolidated financial statements are
prepared for illustrative purposes only and, because of their nature, may not
give a true picture of the financial position or results of operations of the
enlarged group. The unaudited pro forma consolidated balance sheet gives effect
to the acquisition as if it had occurred on 31 December 1999. The unaudited pro
forma consolidated statement of earnings gives effect to the acquisition as if
it had occurred on 1 January 1999. In preparing these pro forma consolidated
financial statements, no adjustments have been made to reflect the operating
synergies, general and administrative cost savings, and integration costs
expected to result from combining the operations of AMVESCAP and Trimark. In
preparing the pro forma consolidated statement of earnings, an average
C$ / {pound sterling} exchange rate of C$1 / {pound sterling}0.4220 was used.
The pro forma consolidated balance sheet was prepared using an ending
C$ / {pound sterling} exchange rate of C$1 / {pound sterling}0.4338, and it
excludes the effects of any adjustments required to reflect the fair value at
the date of the acquisition of the net assets of Trimark.
These unaudited pro forma consolidated financial statements should be read in
conjunction with the audited financial statements of AMVESCAP and Trimark as at
and for the years ended December 31, 1999 and March 31, 2000, respectively. The
consolidated financial statements of AMVESCAP have been audited by Arthur
Andersen, while the consolidated financial statements of Trimark have been
audited by Ernst & Young LLP.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS
2.1 Purchase Price and Balance Sheet
The Merger Agreement provides for the combination of AMVESCAP and Trimark
in a transaction in which each Trimark shareholder will receive a total
consideration of C$27 per Trimark common share. This consideration will be
comprised of, at the option of Trimark shareholders and subject to certain
adjustments, cash, 6% convertible equity subordinated debentures
("Debentures"), AMVESCAP ordinary shares, exchangeable shares, or a
combination thereof. Beneficial ownership of the exchangeable shares will
be treated as beneficial ownership of AMVESCAP ordinary shares, and
calculations of percentage ownership, voting rights and number of shares
outstanding will be made on a basis that treats the AMVESCAP ordinary
shares and exchangeable shares as the same security.
The unaudited pro forma consolidated balance sheet assumes that C$7.50 was
paid in cash, C$13.00 was issued in the form of Debentures, with the
remaining C$6.50 issued in the form of exchangeable shares or AMVESCAP
ordinary shares.
54
<PAGE> 56
A) The estimated cost of the purchase is outlined below:
<TABLE>
<CAPTION>
{pound
sterling}
<S> <C>
Cash:
Cash on hand and investments 117,270
Credit facility (including transaction costs
of {pound sterling}20,000) 231,200
Debentures 569,347
AMVESCAP Ordinary Shares or Exchangeable Shares 284,672
-----------
TOTAL COST OF ACQUISITION 1,202,489
Net assets acquired 171,267
-----------
GOODWILL 1,031,222
===========
</TABLE>
B) Debtors and provisions for liabilities and charges
This transaction will allow deferred tax assets and current tax
benefits previously unrecognized to be recorded, amounting to {pound
sterling}42,302 and deferred tax liabilities previously unrecognized
to be recorded, amounting to {pound sterling}14,389.
C) Called up share capital and retained earnings
The called up share capital and retained earnings of Trimark will be
eliminated as a result of the acquisition. The adjustment also
reflects the impact of the pro forma adjustments.
D) Share premium account
The adjustment of {pound sterling}275,956 to the share premium
account reflects the difference between the par value of 25p per
share and the total value of the share portion of the consideration.
2.2 Statement of Earnings adjustments (all of which have a continuing effect)
E) Amortization of goodwill
The goodwill created upon the acquisition of Trimark will be amortized
over a 20 year period. The adjustment includes {pound sterling}51,562
for one year of amortization.
F) Interest payable and investment income
The interest rate applicable to the Debentures is 6%, resulting in an
adjustment of {pound sterling}34,161. The interest rate applicable to
the additional amount drawn down on a credit line is assumed to be
6.5%, resulting in an adjustment of {pound sterling}15,028. The
interest income adjustment ({pound sterling}5,864) reflects interest
income lost on the cash portion of the consideration.
G) Taxation
This transaction will allow the combined entity to receive a tax
benefit due to tax losses available from AMVESCAP's Canadian
subsidiary, and to receive a tax benefit for the additional interest
expense on the new debt.
H) Earnings per share
The calculation of basic earnings per share uses the weighted average
number of AMVESCAP ordinary shares that would have been outstanding
during the year assuming the acquisition occurred on January 1, 1999.
The weighting is based on the combined weighted average of the
AMVESCAP ordinary shares and the exchangeable shares (each having
economic rights equivalent to an AMVESCAP ordinary share) outstanding
during the period. The calculation of diluted earnings per share
assumes the conversion of the Debentures occurred on January 1, 1999,
and that the combined entity received a benefit equivalent to the
net-of-tax interest savings on the Debentures.
55
<PAGE> 57
OPINION
In our opinion:
1. the financial information (as adjusted) of Trimark has been properly
compiled on the basis stated;
2. the adjustments are appropriate for the purpose of presenting the financial
information (as adjusted) of Trimark on a basis consistent in all material
respects with the accounting policies of AMVESCAP PLC.
Yours faithfully,
Ernst & Young LLP
56
<PAGE> 58
PART V
PRO FORMA FINANCIAL STATEMENTS
Set out below is an unaudited pro forma consolidated balance sheet and an
unaudited pro forma consolidated statement of earnings for the Enlarged AMVESCAP
Group which have been derived without material adjustment from the audited
consolidated financial statements of AMVESCAP PLC as at and for the year ended
December 31, 1999 and the audited consolidated financial statements of Trimark
Financial Corporation as at and for the year ended March 31, 2000:
57
<PAGE> 59
AMVESCAP PLC
PRO FORMA CONSOLIDATED BALANCE SHEET (UK GAAP)
(Unaudited)
<TABLE>
<CAPTION>
Adjustments Convenience
-------------------------- Currency
Trimark AMVESCAP Conversion
AMVESCAP Financial Pro Forma PLC AMVESCAP
PLC Corporation Adjustments Pro Forma PLC
{pound {pound {pound {pound Pro Forma
sterling} sterling} sterling} sterling} Note 1
Note 2 '000 '000 '000 '000 C$'000
<S> <C> <C> <C> <C> <C> <C>
FIXED ASSETS
Goodwill A 664,135 604 1,031,222 1,695,961 3,909,546
Investments 128,921 37,133 -- 166,054 382,789
Tangible assets 108,021 12,166 -- 120,187 277,056
---------- ---------- ---------- ---------- ----------
901,077 49,903 1,031,222 1,982,202 4,569,391
CURRENT ASSETS
Debtors B 675,856 147,562 42,302 865,720 1,995,666
Investments A 60,135 21,616 (21,616) 60,135 138,624
Cash at bank and in
hand A 189,732 109,962 (95,654) 204,040 470,355
---------- ---------- ---------- ---------- ----------
CREDITORS: AMOUNTS 925,723 279,140 (74,968) 1,129,895 2,604,645
FALLING DUE WITHIN
ONE YEAR (706,289) (116,403) -- (822,692) (1,896,477)
---------- ---------- ---------- ---------- ----------
NET CURRENT ASSETS 219,434 162,737 (74,968) 307,203 708,168
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS LESS
CURRENT LIABILITIES 1,120,511 212,640 956,254 2,289,405 5,277,559
LONG-TERM DEBT A (659,120) -- (800,547) (1,459,667) (3,364,839)
PROVISIONS FOR
LIABILITIES AND
CHARGES B (24,730) (28,434) (14,389) (67,553) (155,724)
---------- ---------- ---------- ---------- ----------
NET ASSETS 436,661 184,206 141,318 762,185 1,756,996
========== ========== ========== ========== ==========
CAPITAL AND RESERVES
Called up share capital C 168,617 43,406 (34,690) 177,333 408,790
Share premium account D 478,860 -- 275,956 754,816 1,740,009
Profit and loss account C 380,717 140,800 (99,948) 421,569 971,805
---------- ---------- ---------- ---------- ----------
1,028,194 184,206 141,318 1,353,718 3,120,604
Other reserves (591,533) -- -- (591,533) (1,363,608)
---------- ---------- ---------- ---------- ----------
SHAREHOLDERS' FUNDS,
EQUITY INTERESTS 436,661 184,206 141,318 762,185 1,756,996
========== ========== ========== ========== ==========
</TABLE>
58
<PAGE> 60
AMVESCAP PLC
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS (UK GAAP)
(Unaudited)
<TABLE>
<CAPTION>
Adjustments Convenience
--------------------------- Currency
Trimark AMVESCAP Conversion
AMVESCAP Financial Pro Forma PLC Pro AMVESCAP
PLC Corporation Adjustments Forma PLC Pro
{pound {pound {pound {pound Forma
sterling} sterling} sterling} sterling} Note 1
Note 2 '000 '000 '000 '000 C$'000
<S> <C> <C> <C> <C> <C> <C>
REVENUES 1,072,350 131,533 -- 1,203,883 2,852,803
Operating expenses (719,637) (64,962) -- (784,599) (1,859,239)
---------- ----------- ----------- ---------- -----------
352,713 66,571 -- 419,284 993,564
Goodwill amortisation E (36,754) (69) (51,562) (88,385) (209,443)
---------- ----------- ----------- ---------- -----------
OPERATING PROFIT 315,959 66,502 (51,562) 330,899 784,121
Investment income F 11,809 11,158 (5,864) 17,103 40,528
Interest payable F (44,726) (4,821) (49,189) (98,736) (233,972)
---------- ----------- ----------- ---------- -----------
PROFIT BEFORE TAXATION 283,042 72,839 (106,615) 249,266 590,677
Taxation G (102,010) (32,722) 30,552 (104,180) (246,872)
---------- ----------- ----------- ---------- -----------
PROFIT AFTER TAXATION 181,032 40,117 (76,063) 145,086 343,805
========== =========== =========== ========== ===========
EARNINGS PER ORDINARY SHARE:
-basic H 28.3p 21.5p C$ 0.51
-diluted H 27.1p 21.2p C$ 0.50
---------- ---------- -----------
EARNINGS PER ORDINARY SHARE BEFORE
GOODWILL AMORTISATION:
-basic H 34.0p 34.6p C$ 0.82
-diluted H 32.7p 32.7p C$ 0.77
---------- ---------- -----------
</TABLE>
59
<PAGE> 61
23 June 2000
[ARTHUR ANDERSEN LETTERHEAD APPEARS HERE]
The Directors
AMVESCAP PLC
11 Devonshire Square
London
EC2M 4YR
The Partners
Cazenove & Co.
12 Tokenhouse Yard
London
EC2R 7AN
Dear Sirs
We report on the unaudited pro forma consolidated balance sheet and the
unaudited pro forma consolidated statement of earnings for the year ended 31
December 1999 (together "the pro forma financial information") set out in Part
V of the Listing Particulars and Circular dated 23 June 2000 issued by AMVESCAP
PLC which has been prepared, for illustrative purposes only, to provide
information about how the proposed acquisition of Trimark Financial Corporation
might have affected the financial information presented.
RESPONSIBILITIES
It is the responsibility solely of the Directors of AMVESCAP PLC to prepare the
pro forma financial information in accordance with paragraph 12.29 of the
Listing Rules of the UK Listing Authority (the "Listing Rules").
It is our responsibility to form an opinion, as required by the Listing Rules,
on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the pro forma financial
information beyond that owed to those to whom those reports were addressed by
us at the dates of their issue.
BASIS OF OPINION
We conducted our work in accordance with the Statements of Investment Circular
Reporting Standards and Bulletin 1998/8 "Reporting on pro forma financial
information pursuant to the Listing Rules" issued by the Auditing Practices
Board. Our work, which involved no independent examination of any of the
underlying financial information, consisted primarily of comparing unadjusted
financial information with the source documents, considering the evidence
supporting the adjustments and discussing the pro forma financial information
with the Directors of AMVESCAP PLC.
Our work has not been carried out in accordance with auditing standards
generally accepted in the United States of America and accordingly should not
be relied upon as if it had been carried out in accordance with those
standards.
OPINION
In our opinion:
1. the pro forma financial information has been properly compiled on the basis
stated;
2. such basis is consistent with the accounting policies of AMVESCAP PLC; and
3. the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to paragraph 12.29 of the Listing Rules.
Yours faithfully
ARTHUR ANDERSEN
Chartered Accountants
60
<PAGE> 62
PART VI
ADDITIONAL INFORMATION
1. RESPONSIBILITY
The Directors, whose names appear in paragraph 2 below, accept responsibility
for the information contained in this document. To the best of the knowledge
and belief of the Directors, who have taken all reasonable care to ensure that
such is the case, the information contained in this document is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
2. DIRECTORS
2.1 The Directors are listed below together with their respective ages and
positions:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Charles W. Brady 65 Director, Executive Chairman
Charles T. Bauer 81 Director, Vice Chairman
Sir John Banham 59 Non Executive Director
The Hon. Michael D. Benson 57 Director, Chief Executive Officer, INVESCO Global Group
Joseph R. Canion 55 Non Executive Director
Michael J. Cemo 55 Director
Gary T. Crum 52 Director
A.D. Frazier, Jr. 56 Director, Chief Executive Officer, US Institutional Group
Robert H. Graham 53 Director, Chief Executive Officer, Managed Products Group
Roberto A. de Guardiola 55 Non Executive Director
Hubert L. Harris, Jr. 56 Director, Chief Executive Officer, Retirement and Benefit Services
Group
Bevis Longstreth 66 Non Executive Director
Robert F. McCullough 57 Director, Chief Financial Officer
Stephen K. West 71 Non Executive Director
Alexander M White 66 Non Executive Director
</TABLE>
2.2 The business address of all the Directors is 11 Devonshire Square, London
EC2M 4YR.
2.3 The brief biographical details of the Directors are as follows:
CHARLES W. BRADY. Mr. Brady has served as Executive Chairman of the Board
of Directors since April 1993 and Chief Executive Officer of AMVESCAP
since December 1992. He has served as a Director of AMVESCAP since
December 1986. Mr. Brady was a founding partner of INVESCO Capital
Management Inc. He began his investment career in 1959, graduating with a
B.S. from the Georgia Institute of Technology, and attending the Advanced
Management School of Harvard University. He is a member of the Atlanta
Society of Financial Analysts.
CHARLES T. BAUER. Mr. Bauer has served as a Director and Vice Chairman of
AMVESCAP's Board of Directors since February 1997. Mr. Bauer is Chairman
of AIM, which he co-founded in 1976. He has spent his entire professional
career in the investment business. Mr. Bauer holds an A.B. from Harvard
University and an M.B.A. from New York University. He has served as
Chairman of the American Insurance Association Investments Committee, as a
Board Member of the Investment Company Institute, and as a Trustee of the
Institute of Chartered Financial Analysts, Inc.
SIR JOHN BANHAM. *+ Sir John Banham has served as a Director of AMVESCAP
since January 1999. He is Chairman of Kingfisher PLC and ECI Ventures
Group, a provider of venture capital for mid-market management buyouts,
and he is Chairman-designate of Whitbread PLC. He was Director General of
the Confederation of British Industry from 1987 to 1992, a Director of
National Power from 1992 to 1998, a Director of National Westminister Bank
from 1992 to 1998 and Chairman of Tarmac PLC from 1994 to March 2000. He
is a graduate of Cambridge University and has been awarded honorary
doctorates by four leading U.K. universities.
THE HON. MICHAEL D. BENSON. The Hon. Michael Benson has served as a
Director of AMVESCAP since February 1994. He has served as Chief Executive
Officer of INVESCO Global Group since 1996. He served as Chief Executive
Officer of AMVESCAP's Asian region from 1994 to 1996. He started his
career with the stockbroking firm L. Messel in 1963. He later joined
Lazard Brothers Ltd. and became Managing Director of Lazard Securities
Ltd., establishing investment offices in Jersey, Guernsey and Hong Kong.
Between 1985 and 1992, he established investment offices in London,
61
<PAGE> 63
Boston, Hong Kong and Singapore for Standard Chartered Bank. In 1992, he
joined Capital House Investment Management with responsibility for
developing the Far Eastern business.
JOSEPH R. CANION. *+** Mr. Canion has been a Director of AMVESCAP since
February 1997. He is also Joint Chairman of the Remuneration Committee. He
has been Chairman of Insource Technology Corporation, a Houston-based
business and technology management company, since June 1992. He was
co-founder and, from 1982 to 1991, Chief Executive Officer, President and
a Director of Compaq Computer Corporation. He was a director of AIM from
1991 through February 1997, when the acquisition of AIM was completed.
MICHAEL J. CEMO. Mr. Cemo has served as a Director of AMVESCAP since
February 1997. He is President of A I M Distributors, Inc., a
broker-dealer subsidiary of AIM, and an Executive Vice President of AIM.
Mr. Cemo has been in the investment business since 1971. He joined AIM in
1988. Mr. Cemo holds a B.S. in economics from the University of Houston.
He is a member of the Investment Company Institute's sales force marketing
committee.
GARY T. CRUM. Mr. Crum has served as a Director of AMVESCAP since February
1997. He was co-founder of AIM and serves as an Executive Vice President
of AIM. He is President of A I M Capital Management, Inc., an investment
advisory subsidiary of AIM, and is Director of Investments and a member of
AIM's Investment Policy Committee. Mr. Crum has been in the investment
business since 1972. He holds a B.B.A. from Southern Methodist University
and an M.B.A. from the University of Texas at Austin.
A.D. FRAZIER, JR. Mr. Frazier has served as a Director of AMVESCAP since
November 1996. He has served as Chief Executive Officer of U.S.
Institutional Group since 1997. Prior to joining AMVESCAP, Mr. Frazier was
the Chief Operating Officer of the Atlanta Committee for the Olympic
Games. Before joining the Atlanta Committee in 1991, Mr. Frazier was
Executive Vice President in charge of the North American Banking Group of
the First Chicago Corporation and First National Bank of Chicago. He
received a B.A. and a J.D. from the University of North Carolina at Chapel
Hill. He was admitted to the North Carolina Bar in 1969 and attended
Harvard's Advanced Management Programme in 1981.
ROBERT H. GRAHAM. Mr. Graham has served as a Director of AMVESCAP, and as
Chief Executive Officer of Managed Products Group, since February 1997.
Mr. Graham is President and Chief Executive Officer of AIM, which he
co-founded in 1976. He holds a B.S. and an M.S. in electrical engineering
and an M.B.A. in finance from the University of Texas at Austin. Mr.
Graham has been in the investment business since 1972. He has been a
member of the Board of Governors and Executive Committee of the Investment
Company Institute and Chairman of the Board of Directors and Executive
Committee of the ICI Mutual Insurance Company.
ROBERTO A. DE GUARDIOLA. Mr. de Guardiola has served as a Director of
AMVESCAP since February 1997. Mr. de Guardiola is the President of de
Guardiola Advisors Inc., a New York based investment firm that specializes
in the investment management industry. Mr. de Guardiola served as a
Managing Director of Putnam, Lovell, de Guardiola & Thornton, a New York
based investment banking firm, from 1998 to March 2000. Mr. de Guardiola
holds a B.S. in Economics and an M.B.A. from the Wharton School of the
University of Pennsylvania.
HUBERT L. HARRIS, JR. Mr. Harris has served as a Director of AMVESCAP
since May 1998. Mr. Harris has served as Chief Executive Officer of
Retirement and Benefit Services Group since January 1998. He also served
as a Director of AMVESCAP from May 1993 to February 1997. Mr. Harris
received a B.S. from Georgia Institute of Technology and an M.B.A. from
Georgia State University. Mr. Harris served as Assistant Director of
Office Management and Budget in President Carter's administration and has
served as President and Executive Director of the International
Association for Financial Planning.
BEVIS LONGSTRETH. *+*** Mr. Longstreth has served as a Director of
AMVESCAP since May 1993. He is also Joint Chairman of the Audit Committee.
Mr. Longstreth, a graduate of Princeton University and Harvard Law School,
is of counsel at Debevoise & Plimpton, a New York based law firm, where he
was a partner from 1984 through 1997. He was formerly a Commissioner of
the SEC and is a frequent writer on issues of corporate governance,
banking and securities law and is the author of Modern
62
<PAGE> 64
Investment Management and the Prudent Man Rule, a book on law reform
published by Oxford University Press.
ROBERT F. MCCULLOUGH. Mr. McCullough has served as a Director and Chief
Financial Officer of AMVESCAP since March 1996. Mr. McCullough joined
AMVESCAP in 1996 from Arthur Andersen where he practiced as an accountant
in New York from 1964 until 1987, becoming a partner in 1973. In 1987, he
moved to become a Managing Partner of Arthur Andersen's Atlanta office. He
is a graduate of the University of Texas at Austin and is a Certified
Public Accountant. He is a member of the American Institute of Certified
Public Accountants and the Georgia Society of Certified Public
Accountants.
STEPHEN K. WEST. *+*** Mr. West has served as a Director of AMVESCAP since
February 1997. He is also Joint Chairman of the Audit Committee. Mr. West
was a Director of AIM from 1994 through February 1997, when the
acquisition of AIM was completed. He was a partner of Sullivan & Cromwell,
a New York City law firm, from 1964 to 1998 and is presently of counsel to
the firm. He is a graduate of Yale University and the Harvard Law School.
ALEXANDER M. WHITE. *+*** Mr. White has served as a Director of AMVESCAP
since November 1992. He is also Joint Chairman of the Remuneration
Committee. Mr. White has had a career in the financial services community,
having been associated with Merrill Lynch, White Weld & Co. and most
recently as a senior investment banker with James D. Wolfensohn, Inc. Mr.
White is a graduate of Harvard College and Harvard Business School.
+ Member of the Audit Committee
* Member of the Remuneration Committee
** Joint Chairman of the Remuneration Committee
*** Joint Chairman of the Audit Committee
2.4 The Directors, their current directorships, their directorships held
during the five years preceding the date of this document, the
partnerships of which they are currently partners and the partnerships of
which they have been partners during the five years preceding the date of
this document, are as follows:
SIR JOHN MICHAEL MIDDLECOTT BANHAM
Date of Date of
Directorships Appointment Cessation
Whitbread PLC 17-Nov-1999
Inter-Action Social Enterprise Trust Limited 07-Dec-1991
Kingfisher plc 16-Oct-1995
Penberth Developments Limited 21-Nov-1997
The Cancer Research Campaign 30-Jul-1991
The Merchants Trust plc 01-Jul-1992
South West Enterprise Limited (in members
voluntary liquidation) 01-Oct-1995
ECI Group Limited 01-Jul-1992 27-Jan-2000
ECI Ventures Limited 01-Jul-1992 25-Oct-996
National Westminster Bank Public Limited
Company 01-Jul-1992 21-Apr-1998
National Power plc 01-Aug-1992 31-Jul-1998
Tarmac Holdings plc 01-Jul-1992 14-Mar-2000
Tarmac plc 24-May-1999 14-Mar-2000
QC Tenancies 1 plc 24-Aug-1993 20-Jan-1999
QC Tenancies 2 plc 24-Aug-1993 16-Oct-1998
QC Tenancies 3 plc 24-Aug-1993 16-Oct-1998
QC Tenancies 4 plc 24-Aug-1993 16-Oct-1998
QC Tenancies 5 plc 24-Aug-1993 16-Oct-1998
Westcountry Television Limited 10-Apr-1992 31-Mar-1997
JOSEPH RODNEY CANION
Date of Date of
Directorships Appointment Cessation
Insource Technology Corp. 01-Jun-1992
Questia Media, Inc. 09-Apr-1999
63
<PAGE> 65
ROBERTO ALEJANDRO DE GUARDIOLA
Date of Date of
Directorships Appointment Cessation
Putnam Lovell de Guardiola & Thornton Jan-1998 Apr-2000
de Guardiola Advisers, Inc. Apr-2000
AD FRAZIER, JR.
Date of Date of
Directorships Appointment Cessation
Magellan Health Services, Inc May-1995
Apache Corp. May-1997
Rock-Tenn Company Jan-1997
R J Reynolds Tobacco Holdings, Inc. June-1999
BEVIS LONGSTRETH
Date of Date of
Directorships Appointment Cessation
American Stock Exchange, Inc. 21-May-1993
Gosterd, Inc. 21-May-1993
Nathan Cummings Foundation 21-May-1993
New School for Social Research, Inc. 21-May-1993
Sympany Space, Inc. 21-May-1993
ROBERT FRY MCCULLOUGH
Date of Date of
Directorships Appointment Cessation
AHL Services Inc. 10-May-1997
STEPHEN KINGSBURY WEST
Date of Date of
Directorships Appointment Cessation
Dresdner RCM Global Strategic Income
Fund Inc 23-May-1997
ING America Insurance Holdings Inc 30 Jul-1996
First ING New York Life Insurance Company 21-May-1993
Pioneer Funds 01-Oct-1993
Swiss Helvetia Fund 21-Sep-1995
DLJ Winthrop Funds May-2000
ALEXANDER MOSS WHITE
Date of Date of
Directorships Appointment Cessation
York Holding Company 18-Dec-1994
The Cooper Union 01-July-1972
Chatham Central School District 01-July-1996
Messrs Brady, Bauer, Benson, Cemo, Crum and Graham hold directorships in a
number of incorporated funds which have independent boards of directors
and which have investment management contracts with certain AMVESCAP Group
companies. In the light of their close association with companies within
the AMVESCAP Group, these have not been separately listed in the lists of
outside directorships above.
2.5 No Director of the Company has:
(a) any unspent convictions in relation to indictable offences;
(b) been declared bankrupt, had any asset placed into receivership
or been the subject of any voluntary arrangement;
(c) been subject to any public criticism by any statutory or
regulatory authority (including recognised professional bodies)
save that Roberto de Guardiola was censured and suspended
64
<PAGE> 66
for four months by the United States Securities and Exchange
Commission ("SEC") in April 1977 for violating his agreement
with the SEC while a former registered representative with
Kidder Peabody & Co. and Charles Bauer was censured by the SEC
in February 1978 for failing reasonably to supervise personnel
with a view to preventing alleged violations of certain US
securities laws;
(d) been disqualified by a court from acting as a director of a
company or from acting in the management or conduct of the
affairs of any company;
(e) been a director with an executive function of a company which
has been placed in or been the subject of administration,
receivership, compulsory liquidation, creditors voluntary
liquidation, a company voluntary arrangement or any composition
or arrangement with its creditors generally or any class of its
creditors whilst he was a director of that company or within
twelve months after he ceased to be a director of that company;
or
(f) been a partner of a partnership which has been the subject of
or placed into compulsory liquidation, administration,
partnership voluntary arrangement or the receivership of any
asset whilst he was a partner of that partnership or within 12
months after he ceased to be a partner of that partnership.
3. THE COMPANY
3.1 The Company was incorporated and registered in England on 19 December
1935 with registered number 308372 under the Act as a private limited
company under the name H. Lotery & Company Limited. On 24 September 1964
the Company changed its name to Slater, Walker & Co. Limited, on 24
November 1965 to Slater, Walker Securities Limited, and on 16 September
1977 to Britannia Arrow Holdings Limited. On 19 March 1982, it
re-registered as a public limited company and changed its name to
Britannia Arrow Holdings Public Limited Company. The following further
name changes have taken place:
From To Date
Britannia Arrow Holdings INVESCO MIM PLC 31 January 1990
Public Limited Company
INVESCO MIM PLC INVESCO PLC 21 June 1993
INVESCO PLC AMVESCO PLC 3 March 1997
AMVESCO PLC AMVESCAP PLC 8 May 1997
3.2 The principal legislation under which the Company operates is the Act.
The registered office, head office and the principal place of business in
the United Kingdom of the Company is at 11, Devonshire Square London EC2M
4YR.
4. SHARE CAPITAL OF AMVESCAP
4.1 The existing issued AMVESCAP Ordinary Shares are, and the New AMVESCAP
Ordinary Shares will be, in registered form.
The existing authorised ordinary share capital of AMVESCAP as at the date
of this document is {pound sterling}212,700,000 divided into 850,800,000
ordinary shares of 25 pence each of which {pound sterling}169,225,486.75
equivalent to 676,901,947 ordinary shares of 25 pence each is in issue.
The authorised share capital of AMVESCAP will be increased to {pound
sterling}262,500,000 by the creation of 199,199,999 AMVESCAP Ordinary
Shares and 1 Special Voting Share (representing an increase of
approximately 23.41 per cent. in AMVESCAP's current authorised share
capital).
4.2 If all the Trimark Options are exercised by the Election Deadline and
the maximum possible number of New AMVESCAP Ordinary Shares Shares are
elected by Trimark Shareholders pursuant to the Plan, then 105,228,882 New
AMVESCAP Ordinary Shares (the "Maximum Number") and 1 Special Voting Share
will be issued by the Company on the Effective Date increasing the issued
share capital of AMVESCAP to {pound sterling}195,532,707.50 divided into
782,130,829 ordinary shares of 25 pence each and 1 Special Voting Share.
65
<PAGE> 67
The following table sets out the changes to the authorised share capital
of the Company assuming the Special Resolution is passed at the EGM:
<TABLE>
<CAPTION>
Authorised Number of Number of
Share capital Authorised share authorised authorised
as at capital post the shares as at shares post
19 June 2000 EGM 19 June 2000 the EGM
<S> <C> <C> <C> <C>
{pound {pound
sterling} sterling}
AMVESCAP Ordinary Shares 212,700,000 262,499,999.75 850,800,000 1,049,999,999
Special Voting Share - 0.25 - 1
</TABLE>
The following table sets out the changes to the issued share capital of
the Company pursuant to the Merger assuming that there is no exercise of
options outstanding under the AMVESCAP Share Option Schemes and that the
Maximum Number of New AMVESCAP Ordinary Shares are issued pursuant to the
Merger:-
<TABLE>
<CAPTION>
Number of Number of
issued issued
shares as at shares post
19 June 2000 the EGM
<S> <C> <C>
AMVESCAP Ordinary Shares 676,901,947 782,130,829
Special Voting Share - 1
</TABLE>
If the Maximum Number of New AMVESCAP Ordinary Shares are issued on the
Effective Date pursuant to the Merger, 267,869,170 AMVESCAP Ordinary
Shares will remain authorised but unissued, subject to the assumptions set
out above.
4.3 The alterations in the share capital of AMVESCAP in the three years
preceding 19 June 2000 (the latest practicable date prior to the
publication of this document) are set out below:-
<TABLE>
<CAPTION>
Number of AMVESCAP
AMVESCAP Ordinary
Ordinary Shares
Shares {pound
sterling}
<S> <C> <C>
At 1 January 1997 271,390,737 67,847,684.25
Conversion of CULN rights(1) 54,269,108 13,567,277.00
8.75% CULN Conversion(2) 12,124,129 3,031,032.25
Sharesave Exercise(3) 43,514 10,878.50
AIM Option Exercise(4) 5,248,483 1,312,120.75
Issue to AIM shareholders(5) 252,343,352 63,085,838.00
At 1 January 1998 595,419,323 148,854,830.75
8.75% CULN Conversion(2) 14,655,970 3,663,992.50
Sharesave Exercise(3) 374 93.50
AIM Option Exercise(4) 17,447,739 4,361,934.75
Placing(6) 42,500,000 10,625,000.00
At 1 January 1999 670,023,406 167,505,851.50
Sharesave Exercise(3) 11,220 2805.00
AIM Option Exercise(4) 4,433,601 1,108,400.25
At 1 January 2000 674,468,227 168,617,056.75
Sharesave Exercise(3) 19,762 4,940.50
AIM Option Exercise(4) 2,413,958 603,489.50
At 19 June 2000 676,901,947 169,225,486.75
</TABLE>
(1) This relates to the conversion of convertible unsecured loan notes
issued by AMVESCAP, on 28 November 1996, which have now been fully
converted.
(2) This relates to the conversion of the 8.75% convertible unsecured loan
notes 1998 issued by AMVESCAP, which have now been fully converted.
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<PAGE> 68
(3) For 1997, this represents exercises of share options by optionholders
pursuant to share option schemes which have now been terminated and,
for 1998 onwards, this represents exercises of share options under the
share option schemes referred to in paragraphs 6.2, 6.3 and 6.4 below.
(4) This represents exercises of share options by optionholders under the
AIM Share Option Schemes referred to in paragraph 6.12 below.
(5) This represents the number of AMVESCAP Ordinary Shares issued to the
shareholders of AIM when AMVESCAP acquired AIM in February 1997.
(6) This represents the number of AMVESCAP Ordinary Shares issued by
AMVESCAP pursuant to the placing made in connection with the
acquisition of the investment business of Liechtenstein Global
Trust AG.
4.4 At the Extraordinary General Meeting to be held on 20 July 2000 a special
resolution will be proposed:
(a) to approve the Merger
(b) to increase the authorised share capital of AMVESCAP from {pound
sterling}212,700,000 to {pound sterling}262,500,000 (a 23.41 per
cent. increase) by the creation of 199,199,999 New AMVESCAP Ordinary
Shares and 1 Special Voting Share. This increase is principally
intended to create the New AMVESCAP Ordinary Shares which may be
issued in connection with the Merger;
(c) to create a Special Voting Share of 25 pence with the rights,
privileges, and restrictions to it as set out in paragraph 6 of Part
II of this document; and
(d) in substitution for and renewal of all existing authorities
granted at the Annual General Meeting held on 26 April 2000 and
pursuant to section 80 of the Act, to give the Board of AMVESCAP the
power to allot relevant securities up to an aggregate nominal amount
of {pound sterling}56,205,685.50 (representing 224,822,742 AMVESCAP
Ordinary Shares, or 33.21 per cent. of AMVESCAP's current issued
share capital) and pursuant to section 95 of the Act to give the
Board of AMVESCAP the power to allot equity securities for cash and
disapply the pre-emption rights set out in section 89(1) of the Act
(other than by way of rights) up to an aggregate amount of {pound
sterling}8,430,852.75 (representing 33,723,411 AMVESCAP Ordinary
Shares, or 4.98 per cent. of AMVESCAP's current issued share
capital), during the period commencing on the date of the passing of
that resolution and expiring on 25 April 2005 save that the
Directors may allot relevant securities in pursuance of an offer or
agreement made prior to such expiry date as if the authority had not
expired on such date;
(e) in addition to the authorities renewed in (d) above and pursuant
to sections 80 and 95 of the Act, to give the Board of AMVESCAP the
power in connection with the Merger to allot relevant securities and
disapply the pre-emption rights set out in section 89(1) of the Act
up to an aggregate amount of {pound sterling}26,307,220.75
(representing 105,228,882 AMVESCAP Ordinary Shares and one Special
Voting Share, or 15.55 per cent of AMVESCAP's current issued share
capital) during the period commencing on the date of the passing of
that resolution and expiring on 19 July 2005 save that the Directors
may allot relevant securities in pursuance of an offer or agreement
(including the Merger Agreement and related agreements) made prior
to such expiry date as if the authority had not expired on such
date; and
(f) to change the articles of association of AMVESCAP to include the
rights of the Special Voting Share.
The authorities set out in (b) to (f) above will be conditional upon the
Plan becoming effective. The authorities in (e) above will enable the
Directors to allot the requisite number of New AMVESCAP Ordinary Shares to
Trimark Securityholders in connection with the Merger. The authority in
(d) above will renew and replace in identical terms the existing
authorities referred to in 4.5 and 4.6 below.
4.5 By an ordinary resolution passed on 26 April 2000, authority was given
to the Directors to allot AMVESCAP Ordinary Shares up to an aggregate
nominal amount of {pound sterling}56,205,685.50. This authority will
expire on 25 April 2005 save that the Directors may allot relevant
securities in pursuance of an offer or agreement made prior to such expiry
date as if the authority had not expired on such date.
4.6 By a special resolution passed on 26 April 2000, authority was given
to the Directors to disapply pre-emption rights in respect of the
allotment of equity securities for cash (otherwise than in connection with
a rights issue) up to an aggregate nominal amount of {pound
sterling}8,430,852.75, representing approximately 5 per cent of the
Company's issued share capital at the date thereof. The disapplication
will expire on
67
<PAGE> 69
25 April 2005 save that the Directors may allot equity securities in
pursuance of an offer or agreement made by the Company prior to such
expiry date as if the authority had not expired on such date.
4.7 By a special resolution passed on 26 April 2000, authority was given
to the Company pursuant to section 166 of the Act to make purchases
(within the meaning of section 163 of the Act) of AMVESCAP Ordinary Shares
up to a maximum of 101,170,234 AMVESCAP Ordinary Shares at a minimum price
of 25 pence and a maximum price equal to 105 per cent of the average of
the middle market price quoted on the daily official list of the LSE for
the 5 business days immediately preceding the day on which the AMVESCAP
Ordinary Share is contracted to be purchased, such authority to expire on
the earlier of 25 October 2001 and the conclusion of the next annual
general meeting of the Company unless such authority is renewed prior to
such time, save that the Company may make a purchase of AMVESCAP Ordinary
Shares which will be executed after such authority expires pursuant to
such contract.
4.8 The New AMVESCAP Ordinary Shares to be issued pursuant to the Merger
shall have the same rights attaching to them as the rights of the existing
AMVESCAP Ordinary Shares as are more particularly set out in paragraph 5
below.
4.9 Save as disclosed in this paragraph 4, since 19 June 1997 (being three
years prior to 19 June 2000, the latest practicable date prior to the
publication of this document), there have been no changes in the issued
share capital of AMVESCAP and no material changes in the issued share
capital of any of its subsidiaries other than intra group issues by
wholly-owned subsidiaries, pro rata issues by partly owned subsidiaries or
changes in the capital structure of subsidiaries which have remained
wholly-owned throughout the period.
4.10 Save as disclosed in this document and save for certain outstanding
invitations to employees under the AMVESCAP Share Option Schemes, no
options have been granted by AMVESCAP which are still outstanding in
respect of any part of AMVESCAP's share capital nor is AMVESCAP a party to
any conditional or unconditional agreement to grant any such options.
4.11 Other than pursuant to the Merger and to satisfy options granted or
to be granted under the AMVESCAP Share Option Schemes, there is no present
intention to issue any of the authorised but unissued share capital of the
Company.
4.12 The following are details of options to acquire AMVESCAP Ordinary
Shares granted to certain Directors under the AMVESCAP No.2 and No.3
Executive Share Option Schemes (referred to in paragraphs 6.5 and 6.6 of
this Part VI), the Sharesave Schemes (referred to in paragraphs 6.2, 6.3
and 6.4 of this Part VI) and the AIM Share Option Schemes referred to in
paragraph 6.12 of this Part VI which were not issued for cash
consideration and were outstanding at 19 June 2000 (being the latest
practicable date prior to the publication of this document) and which
represent the maximum number of AMVESCAP Ordinary Shares which may be
issued pursuant to such options:
<TABLE>
<CAPTION>
Number of Exercise price
AMVESCAP per share (in
Ordinary Shares pence except
Director under option where indicated) Date of Grant Expiry Date
<S> <C> <C> <C> <C>
EXECUTIVE DIRECTORS
Charles W. Brady 124,027 160p Jan 1995 Jan 2002
500,000 244p Nov 1996 Nov 2003
100,000 422.5p Nov 1997 Nov 2004
250,000 432p Dec 1998 Dec 2008
500,000 660p Dec 1999 Dec 2009
</TABLE>
68
<PAGE> 70
<TABLE>
<CAPTION>
Number of Exercise price
AMVESCAP per share (in
Ordinary Shares pence except
Director under option where indicated) Date of Grant Expiry Date
<S> <C> <C> <C> <C>
Charles T. Bauer 100,000 422.5p Nov 1997 Nov 2004
The Hon. Michael D. Benson 17,003 160p Jan 1995 Jan 2002
400,000 244p Nov 1996 Nov 2003
100,000 422.5p Nov 1997 Nov 2004
200,000 432p Dec 1998 Dec 2008
200,000 660p Dec 1999 Dec 2009
2,919 334p Nov 1997 June 2001
Michael J. Cemo 100,000 422.5p Nov 1997 Nov 2004
100,000 432p Dec 1998 Dec 2008
200,000 660p Dec 1999 Dec 2009
Gary T. Crum 100,000 422.5p Nov 1997 Nov 2004
100,000 432p Dec 1998 Dec 2008
150,000 660p Dec 1999 Dec 2009
1,815 390p Dec 1998 Mar 2001
A.D. Frazier, Jr. 500,000 244p Nov 1996 Nov 2003
100,000 422.5p Nov 1997 Nov 2004
200,000 432p Dec 1998 Dec 2008
200,000 660p Dec 1999 Dec 2009
Robert H. Graham 100,000 422.5p Nov 1997 Nov 2004
200,000 432p Dec 1998 Dec 2008
250,000 660p Dec 1999 Dec 2009
Hubert L. Harris, Jr. 100,000 242p Dec 1995 Dec 2002
200,000 242p Apr 1996 Apr 2003
400,000 244p Nov 1996 Nov 2003
100,000 422.5p Nov 1997 Nov 2004
100,000 432p Dec 1998 Dec 2008
150,000 660p Dec 1999 Dec 2009
Robert F. McCullough 200,000 242p Apr 1996 Apr 2003
400,000 244p Nov 1996 Nov 2003
100,000 422.5p Nov 1997 Nov 2004
100,000 432p Dec 1998 Dec 2008
150,000 660p Dec 1999 Dec 2009
1,815 390p Dec 1998 Mar 2001
NON-EXECUTIVE DIRECTORS
Joseph R. Canion 289,577 25p Dec 1993 Dec 2003
96,461 US$0.859 Dec 1995 Dec 2005
Stephen K. West 211,972 25p Dec 1993 Dec 2003
</TABLE>
69
<PAGE> 71
4.13 As at 19 June 2000 (being the latest practicable date prior to the
publication of this document), the number of share options outstanding
which were not issued for cash consideration under the AMVESCAP Share
Option Schemes (including all options granted to Directors) were as
follows:
<TABLE>
<CAPTION>
Exercise
Number of price per
AMVESCAP share (in
Ordinary pence except
Shares under where Date of
option indicated) Grant Expiry Date
<S> <C> <C> <C> <C>
Scheme
AMVESCAP No. 3 Executive
Share Option Scheme 310,000 167.00 p 05-Oct-93 04-Oct-00
590,000 162.00 p 11-May-94 10-May-01
850,000 153.00 p 04-Oct-94 03-Oct-01
911,079 160.00 p 11-Jan-95 10-Jan-02
100,000 208.00 p 06-Sep-95 05-Sep-02
75,000 212.00 p 12-Oct-95 11-Oct-02
200,000 242.00 p 20-Dec-95 19-Dec-02
400,000 242.00 p 10-Apr-96 09-Apr-03
10,000 241.00 p 02-May-96 01-May-03
11,982,400 244.00 p 12-Nov-96 11-Nov-03
100,000 263.00 p 29-Nov-96 28-Nov-03
300,000 256.50 p 20-Dec-96 19-Dec-03
488,000 326.50 p 03-Apr-97 02-Apr-04
531,000 360.50 p 18-Aug-97 17-Aug-04
100,000 390.00 p 24-Sep-97 23-Sep-04
9,424,500 422.50 p 25-Nov-97 24-Nov-04
452,400 596.25 p 13-Mar-98 12-Mar-05
38,700 654.00 p 30-Apr-98 29-Apr-08
3,502,800 592.50 p 24-Jun-98 23-Jun-08
1,277,335 593.00 p 07-Aug-98 06-Aug-08
30,215 396.00 p 29-Oct-98 28-Oct-08
13,182,000 416.00 p 30-Oct-98 29-Oct-08
146,215 410.00 p 20-Nov-98 19-Nov-08
441,970 452.00 p 02-Dec-98 01-Dec-08
1,250,000 432.00 p 08-Dec-98 07-Dec-08
2,011,050 429.00 p 18-Dec-98 17-Dec-08
133,743 542.25 p 10-Feb-99 09-Feb-09
389,500 602.00 p 10-Mar-99 09-Mar-09
80,400 610.00 p 19-Mar-99 18-Mar-09
22,370 562.50 p 23-Jun-99 22-Jun-09
4,064,400 512.50 p 06-Aug-99 05-Aug-09
48,700 512.50 p 19-Aug-99 18-Aug-09
122,100 505.50 p 20-Aug-99 19-Aug-09
23,500 533.50 p 25-Aug-99 24-Aug-09
25,000 543.50 p 26-Aug-99 25-Aug-09
76,800 481.50 p 20-Sep-99 19-Sep-09
126,800 480.00 p 30-Sep-99 29-Sep-09
291,200 642.00 p 03-Dec-99 02-Dec-09
11,858,300 660.00 p 09-Dec-99 08-Dec-09
97,400 672.00 p 04-Feb-00 03-Feb-10
14,583 860.50 p 31-Mar-00 30-Mar-10
41,400 928.50 p 02-May-00 01-May-10
142,900 853.00 p 22-May-00 21-May-10
32,000 835.00 p 30-May-00 29-May-10
</TABLE>
70
<PAGE> 72
<TABLE>
<CAPTION>
Exercise
Number of price per
AMVESCAP share (in
Ordinary pence except
Shares under where Date of
option indicated) Grant Expiry Date
<S> <C> <C> <C> <C>
Scheme
AMVESCAP No. 2 Executive
Share Option Scheme 199,500 90.00 p 30-May-91 29-May-01
267,000 162.00 p 11-May-94 10-May-04
100,000 153.00 p 04-Oct-94 03-Oct-04
38,989 160.00 p 11-Jan-95 10-Jan-05
150,000 181.00 p 03-May-95 02-May-05
50,000 208.00 p 06-Sep-95 05-Sep-05
AIM Management Group Inc.
1991 Stock Option Plan
389 25.00 p 21-Dec-91 20-Dec-01
890,325 25.00 p 30-Sep-92 29-Sep-02
1,473,370 25.00 p 31-Dec-93 30-Dec-03
1,745,860 25.00 p 31-Dec-93 30-Dec-03
838,181 US$ 0.4688 23-Dec-94 22-Dec-04
542,958 US$ 0.4698 23-Dec-94 22-Dec-04
96,461 US$ 0.0859 15-Dec-95 14-Dec-05
AIM Management Group Inc.
Amended and Restated 1993
Stock Option Plan for
Employees
1,113,540 US$ 0.8580 07-Dec-95 06-Dec-05
10,649 US$ 1.2115 22-Apr-96 21-Apr-06
AMVESCAP International
Sharesave Plan
1,524,297 390 p 04-Dec-98 03-Mar-01
59,096 430 p 15-Sep-99 30-Jun-02
26,528 502 p 15-Sep-99 30-Apr-05
477,818 612 p 27-Mar-00 26-Jun-02
AMVESCAP 1997 Sharesave
Scheme (UK)
289,921 334 p 26-Nov-97 30-Jun-01
206,554 510 p 23-Mar-99 31-Dec-02
129,584 612 p 27-Mar-00 30-Nov-03
AMVESCAP Irish Sharesave
Scheme
36,337 612 p 27-Mar-00 30-Nov-03
</TABLE>
4.14 As at 19 June 2000, there were 4,012 participants in the AMVESCAP Share
Option Schemes comprising 3,037 in the Sharesave Schemes (referred to in
paragraphs 6.2 to 6.4 of this Part VI), 946 in the AMVESCAP No. 2 and No. 3
Executive Share Option Schemes (referred to in paragraphs 6.5 and 6.6 of
this Part VI) and 29 in the AIM Share Option Schemes (referred to in
paragraph 6.12 of this Part VI) and excluding those schemes referred to in
paragraphs 6.7 to 6.11 and 6.13 of this Part VI.
Further details of the AMVESCAP Share Option Schemes are set out in
paragraph 6 of this Part VI. Details of Directors' interests in shares of
the Company are included in paragraph 7 of this Part VI.
71
<PAGE> 73
5. MEMORANDUM AND ARTICLES OF ASSOCIATION
5.1 The memorandum of association of the Company provides that the Company's
principal objects are, amongst other things, to carry on the business of an
investment holding company and to subscribe for, purchase or otherwise
acquire and hold shares, debentures or other securities of any other
company or body corporate and to acquire and undertake the whole or any
part of the business, property and liabilities of any company or body
corporate carrying on any business and to sell or deal in or otherwise
dispose of any shares, debentures or other securities or property including
any business or undertaking of any other company or any other assets or
liabilities. The objects of the Company are set out in full in clause 4 of
the Company's memorandum of association which is available for inspection
at the Company's registered office at 11 Devonshire Square, London EC2M
4YR.
5.2 The articles of association of the Company contain, amongst other things,
provisions to the following effect:
(a) Voting rights attaching to the AMVESCAP Ordinary Shares
Subject to any special rights as to voting attaching to any shares, on
a show of hands every member who (being an individual) is present in
person or (being a corporation) is present by a representative shall
have one vote, and on a poll every member who is present in person or
by proxy shall have one vote for every four AMVESCAP Ordinary Shares
of which he is holder. On a poll every member who is present in person
or by proxy shall in respect of AMVESCAP Ordinary Shares held by him
otherwise than fully paid up have one vote for every {pound sterling}1
in the aggregate paid up in respect of the nominal amount of AMVESCAP
Ordinary Shares held by him.
No member shall be entitled in respect of any share held by him to be
present or to vote at any general meeting or class meeting either
personally or by proxy, or to exercise any privilege as a member or be
counted in a quorum, unless all calls or other sums presently payable
by him in respect of such share have been paid.
If there is a failure by any registered member or any person named as
being interested or appearing to be interested in any shares
registered in the name of any member to comply with a request made by
the Company under section 212 of the Act as to beneficial ownership
within 14 days (or 28 days where the shares to which the default
occurred represent less than one quarter of one per cent. of the class
of shares concerned), the Directors in their absolute discretion may
serve on the registered member a direction notice which may suspend
the member's right to attend, vote at (whether in person or by proxy),
count in the quorum for or exercise any other right conferred by
membership in relation to meetings of the Company in respect of the
shares in relation to which the default occurred until not more than 7
days after the earlier of receipt by the Company of the information
required under section 212 and notice of an approved transfer.
Subject to statutory provisions, a resolution in writing signed by or
on behalf of all of the members for the time being entitled to receive
notice of and to attend and vote at general meetings shall be as valid
and effective as if the same had been passed at a general meeting of
the Company duly convened and held, and may consist of two or more
documents in like form each signed by one or more of the members.
(b) Dividends and entitlement in the event of liquidation to any surplus
The Company may from time to time declare dividends in general
meeting, provided however that no dividends shall be declared in
excess of the amount recommended by the Board. The Board may from time
to time pay to members such interim dividends as appear to the Board
to be justified by the profits of the Company.
All dividends shall be apportioned and paid pro rata according to the
amounts paid up on the shares in respect of which the dividend is paid
during any portion or portions of the period in respect of which the
dividend is paid, subject always to the terms of the issue of any
shares and the rights of any persons entitled to shares with a
priority, preference or special right as to dividend. The Board may
deduct from any dividend payable to any member sums payable by him to
the Company on account of calls or otherwise.
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<PAGE> 74
No dividend or other moneys payable on or in respect of any share
shall bear interest against the Company. All dividends unclaimed for
one year after being declared may be invested or otherwise made use of
by the Board for the benefit of the Company until claimed. All
dividends unclaimed for a period of 12 years after having been
declared shall be forfeited and shall revert to the Company.
Every dividend shall be paid to those members of the Company who are
on the register of members at the date fixed by the Board for the
purpose of determining the persons entitled to such dividend.
Any general meeting declaring a dividend may, upon the recommendation
of the Board, direct payment of the dividend wholly or in part by the
distribution of specific assets.
The Board may before recommending any dividends set aside out of the
profits of the Company such sums as it thinks proper as a reserve or
reserves which shall, at the discretion of the Board, be applicable
for any purpose to which the profits of the Company may be properly
applied.
On a winding up of the Company, the liquidator may, with the sanction
of an extraordinary resolution of the contributories, divide (in
specie or in kind) the whole or any part of the assets of the Company
among them, setting such value as he deems fair on any property to be
divided. The liquidator may determine how division is to be carried
out as between the contributories or different classes of
contributories and may, with the sanction of an extraordinary
resolution of the contributories, vest the whole or any part of such
assets in trust for the benefit of the contributories as he thinks
fit.
(c) Share transfers
All transfers of shares shall be effected by transfer in writing
(signed by or on behalf of the transferor and, in the case of a
partly-paid share, the transferee) in any usual or common form or in
any form approved by the Board. 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 of that share. The Board
may, in its absolute discretion, and without assigning any reason,
decline to register any transfer of shares which are not fully paid.
The Board may also decline to recognise any instrument of transfer
unless:
(i) the instrument of transfer is lodged with the Company accompanied
by a certificate of the shares to which it relates, and such
other evidence as the Board may reasonably require to show the
right of the transferor to make the transfer; and
(ii) the instrument of transfer is in respect of only one class of
share.
The transfer books and the register of members and any register of
holders of debentures of the Company may be closed from time to time
provided that they are not closed for more than 30 days in aggregate
in any year.
The Articles contain no other restrictions on the transfer of fully
paid AMVESCAP Ordinary Shares save as described in paragraph (h)
below.
(d) Variation of rights
The special rights and privileges attaching to any class of shares in
issue may, either with the consent in writing of the holders of
three-fourths of the issued shares of the class or with the sanction
of an extraordinary resolution passed at a separate general meeting of
the holders of such shares, from time to time be altered or abrogated.
The special rights conferred on the holders of any shares or class of
shares shall not (unless expressly provided by the terms and
conditions from time to time attached to such shares) be deemed to be
altered by the creation of or issue of further shares ranking in
priority to or pari passu with such shares.
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(e) Changes in capital
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; and
(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 share capital by the
amount of the shares so cancelled.
The Company may also by special resolution reduce its share capital
and any capital redemption reserve or any share premium account in any
manner and with any subject to any incident authorised and consent
required by law.
When members of the Company are entitled to any issued shares of the
Company in fractions, the Board may deal with each of such fractions
as they shall determine and in particular may sell the shares to which
members are entitled in fractions for the best price reasonably
obtainable and pay and distribute to and amongst the members entitled
to such shares in due proportion the net proceeds of the sale.
(f) Directors
The Board (unless otherwise determined by the Company in general
meeting) shall not be less than two in number.
Each Director shall have the power to appoint (either another Director
or any person approved by the Board) an alternate Director. Every
person acting as an alternate Director shall be an officer of the
Company and shall be responsible to the Company for his own acts and
defaults. He shall not be deemed to be the agent of or for the
Director appointing him.
The Directors shall be paid fees for their services as directors out
of the funds of the Company. Directors' fees shall not exceed in
aggregate {pound sterling}500,000 per annum (or such larger sum as the
Company may by ordinary resolution determine) and shall be divided
among them as the Board may determine or, failing determination,
equally, except that any Director holding office for less than a year
shall rank in such division in proportion to the period during which
he has held office. The Directors shall also be entitled to be paid
all reasonable travelling, hotel and incidental expenses of attending
and returning from meetings of the Board or committees of the Board or
general meetings or otherwise incurred while engaged on the business
of the Company.
The Board may grant additional remuneration to any Director who holds
an executive office or performs any additional duties. This may be
paid by way of salary, percentage of profits or otherwise as the Board
may determine.
A Director need not be a member of the Company but, nevertheless,
shall be entitled to attend and speak (but not to vote) at meetings of
shareholders of the Company.
The office of Director shall be vacated in any of the following
events: (aa) if he resigns his office in writing; (bb) if a court
order appoints a guardian or receiver or other person to exercise
powers with respect to his property or affairs in the case of mental
illness; (cc) if he is absent, without leave, from Board meetings for
six consecutive months and the Board resolves that his office be
vacated; (dd) if he becomes prohibited by law from being a Director of
the Company; or (ee) if he ceases to be a Director by virtue of
section 293 of the Act.
At every annual general meeting one third of the Directors shall
retire from office. Directors retiring by rotation shall be eligible
for re-election.
The Board shall have the power (subject to applicable statutory
provisions) 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 the maximum
fixed in
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accordance with the Articles of Association. Any Director so appointed
shall hold office only until the dissolution of the next following
annual general meeting (unless he is re-elected during that meeting).
Any Director who retires under this provision is not to be taken into
account in determining the Director(s) who is/are to retire by
rotation at such meetings.
(g) Untraced Shareholders
AMVESCAP is entitled to sell the AMVESCAP Ordinary Shares of a holder
or the AMVESCAP Ordinary Shares to which a person is entitled by
virtue of transmission on death or bankruptcy provided that:
(i) during the 12 years before the earliest of the advertisements
referred to in the next point, at least three dividends in
respect of the AMVESCAP Ordinary Shares have become payable and
remain unclaimed;
(ii) after this 12 year period, AMVESCAP inserts advertisements in
both a leading London daily newspaper and a newspaper
circulating in the area which includes the address held by
AMVESCAP for such a holder or person;
(iii) during the three months following the publication of the above
mentioned advertisement, AMVESCAP has received no communication
from such holder or person; and
(iv) AMVESCAP gives notice to the LSE of its intention to make such
sale.
AMVESCAP may appoint any person to execute a transfer of such AMVESCAP
Ordinary Shares for the purposes of such a sale and the net proceeds
of sale will belong to AMVESCAP, which will be obliged to account to
the former holder or other person previously entitled to the AMVESCAP
Ordinary Shares by law for an amount equal to the proceeds of sale of
the shares and will enter the name of such former holder or person in
the books of AMVESCAP as a creditor for such amount.
(h) Restrictions on holders of AMVESCAP Ordinary Shares
If any member, or any other persons appearing to be interested in
AMVESCAP Ordinary Shares held by such member, has been duly served
with a notice under section 212 of the Act and is in default for the
prescribed period in supplying to AMVESCAP the information thereby
required, then the Directors may in their absolute discretion at any
time thereafter serve on such member a direction notice directing that
in respect of the AMVESCAP Ordinary Shares in relation to which the
default occurred (the "default shares") the holder shall not be
entitled to vote either personally or by proxy at or attend at a
general meeting of AMVESCAP or a meeting of the holders of any class
of AMVESCAP Shares. Where the default shares represent at least 0.25
per cent. of the issued shares of that class, then the direction
notice may additionally direct that any dividend (or part thereof) or
other money which would otherwise be payable in respect of the default
shares shall be retained by AMVESCAP without any liability to pay
interest thereon when such money is finally paid to the member and/or
no transfer of any of the AMVESCAP Ordinary Shares held by such holder
shall be registered unless either of the following applies:
(i) the holder is not himself in default as regards supplying the
information required and the transfer is of part of the holder's
holding; and
(ii) when presented for registration is accompanied by a certificate
by the holder in a form satisfactory to the Directors to the
effect that no person in default as regards supplying such
information is interested in any of the shares the subject of
its transfer.
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6. THE COMPANY'S SHARE OPTION PLANS
6.1 The AMVESCAP 2000 Share Option Plan
This plan has not been approved by the Inland Revenue for the purposes of
the Income and Corporation Taxes Act 1988 (the "Taxes Act"). Options to
acquire AMVESCAP Ordinary Shares may be granted at the discretion of the
remuneration committee of the Company (the "Remuneration Committee") to any
full time employee or director of the Group. As at the date of this
document, no options have been granted under this plan.
On any date, no option may be granted under the plan if, as a result, the
total number of AMVESCAP Ordinary Shares issued or issuable pursuant to
options granted under the plan would exceed ten and one half per cent of
the issued ordinary share capital of the Company on that date of grant.
The exercise price of an option is fixed by the Remuneration Committee but
cannot be less than the higher of the nominal value of an AMVESCAP Ordinary
Share, and the closing middle market quotation for dealings in the AMVESCAP
Ordinary Shares on the LSE on the business day prior to the date of grant.
The exercise price and the number of AMVESCAP Ordinary Shares which are
subject to an option may be adjusted by the directors to take account of
any variation of the Company's share capital.
The Remuneration Committee may, in its discretion, set conditions to be
fulfilled before options may be granted in any particular year, and may
vary such conditions from time to time. It may also grant an option on
terms that its exercise is subject to such objective condition or
conditions as it in its discretion sees fit. Conditions attached to the
exercise of an option may be varied if an event occurs which causes the
Remuneration Committee to consider that the varied conditions represent a
fairer measure than the original conditions.
In normal circumstances, options may be exercised at any time between the
third and tenth anniversaries of their date of grant and where an employee
leaves as a "good leaver", as defined in the rules. Rights of exercise will
also arise on a change in control or reconstruction of the Company (subject
to the possibility of "roll-over" rights), and in the event of a voluntary
winding-up.
The plan is administered by the Board. The Board may amend the plan by
resolution provided that no amendment adversely affecting participants may
be made without the consent of the participants concerned.
The approval of the Company in general meeting will be required for certain
amendments to the advantage of participants.
6.2 AMVESCAP 1997 Sharesave Scheme ("SAYE Scheme")
The UK SAYE Scheme has been approved by the Inland Revenue under the Income
and Corporation Taxes Act 1988.
All UK employees of the Company or any participating member of the Group
who have the requisite minimum period of continuous employment are eligible
to participate. The Directors have a discretion to include other employees.
The Board may invite eligible employees to apply for three or five year
options, or offer eligible employees a choice. It is a condition of
receiving an option that a participant enters into a savings contract with
a savings carrier.
The price payable on the exercise of an option will be determined by the
Directors but shall not be less than the higher of (i) not less than 80 per
cent. of the middle market quotation of an AMVESCAP Ordinary Share for the
dealing day immediately prior to the date on which invitations to apply for
options are despatched and (ii) the nominal value of an AMVESCAP Ordinary
Share.
The exercise price and the number of AMVESCAP Ordinary Shares under any
option may be adjusted by the Directors with the agreement of the Inland
Revenue to take account of any rights issue, capitalisation issue, split,
consolidation or reduction or other variation of the Company's ordinary
share capital.
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No employee may be granted an option if his monthly contributions under the
related savings arrangement, when added to the sum of his monthly
contributions under any other subsisting sharesave scheme, would exceed
{pound sterling}250 or such greater amount as determined by the Board.
No option shall be granted if the result of that grant would be that the
aggregate number of shares that could be issued on exercise of that option
and any other options granted at the same time, when added to the number of
shares that could be or have been issued on the exercise of any other
subsisting share options granted during the preceding ten years under the
SAYE Scheme or any other share option plan established by the Company or
have been issued during the preceding ten years under any profit sharing or
other employee share incentive plan (not being a share option plan)
established by the Company, would exceed ten per cent. of the ordinary
share capital of the Company for the time being in issue.
Similarly, no option shall be granted if the result would be that the
aggregate number of shares that could be issued on the exercise of that
option and any other options granted at the same time, when added to the
number of shares that can be or have been issued on the exercise of any
other subsisting share options granted during the preceding five years
under the SAYE Scheme or any other share option plan established by the
Company or have been issued during the preceding five years under any
profit sharing or other employee share incentive plan (not being a share
option plan) established by the Company, would exceed five per cent. of the
ordinary share capital of the Company for the time being in issue.
In normal circumstances, options may be exercised within 6 months of the
relevant bonus date. Options will be exercisable up to six months after an
eligible employee leaves as a "good leaver", as defined in the rules.
The exercise of an option shall be limited to the number of shares that may
be acquired at the exercise price with the proceeds of a participant's
savings account.
Options are not transferable. On a change in control or reconstruction of
the Company, options may, with the consent of the Company acquiring control
of the Company, be released in consideration for the grant of equivalent
rights of the shares of the acquiring company or a company associated with
it.
The SAYE Scheme is administered by the Board. The Board may amend the SAYE
Scheme by resolution provided that no amendment adversely affects
optionholders or eligible employees. Certain amendments to the advantage of
participants require the prior sanction of an ordinary resolution of the
Company in general meeting.
6.3 The AMVESCAP International Sharesave Plan
The rules are similar to those of the SAYE Scheme except that the
arrangement has not been approved by the Inland Revenue under the Taxes Act
and the savings are generally made over a period of 27 months (60 months in
France), and employees need not be resident in the UK. Under the rules, the
maximum discount available is 20 per cent. although for preferential tax
treatment, this is limited to 15 per cent. in the US, Canada, Guernsey,
Spain and Hong Kong and 5 per cent. in France.
6.4 AMVESCAP Irish Sharesave Scheme
The rules of this scheme are similar to the SAYE Scheme except that the
arrangement has not been approved by the Inland Revenue under the Taxes
Act. Instead this scheme has been approved by the Irish tax authority under
the Irish Taxes Act. Also, to be eligible, employees are required to be
resident in Ireland for tax purposes.
6.5 The AMVESCAP No. 2 Executive Share Option Scheme (the "No. 2 Scheme")
The No. 2 Scheme was established by the Company on 23 June 1987 and was
approved by the Inland Revenue on 25 June 1987 in accordance with the
provisions of Schedule 10 to the Income and Corporation Taxes Act 1970. The
No. 2 Scheme is administered by Rothschild Trust Management Cayman Limited
as trustee of the AMVESCAP (No. 2) Employees Share Option Trust pursuant to
a trust deed dated 29 April 1988 between the Company and Rothschild Trust
Management Cayman Limited. The Company provides funds to the trustee by way
of loan which are used by the trustee in the subscription or purchase of
fully paid AMVESCAP Ordinary Shares in the Company and in meeting the
trustee's expenses.
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All full time Directors and qualifying employees of the Company and its
participating subsidiaries are eligible to be nominated for participation
in the No. 2 Scheme at the discretion of the Board. A full time director is
a director who must devote not less than 25 hours a week to the performance
of his duties and a qualifying employee is an employee who is required
under the terms of his employment to work for at least 20 hours per week.
An option may only be exercised by the person to whom it is granted, or his
personal representative(s), and is not transferable.
Options will entitle the holder to acquire AMVESCAP Ordinary Shares at a
price determined by the No. 2 Scheme Trustee, being not less than the
greater of (i) the middle market quotation of an AMVESCAP Ordinary Share on
the last dealing day prior to the date of grant and (ii) the nominal value
of an AMVESCAP Ordinary Share.
Each individual's participation is limited so that the aggregate market
value (at the date of grant) of all AMVESCAP Ordinary Shares in respect of
which options have been granted to him in the previous ten years under the
No. 2 Scheme or any other employees' share option scheme (other than a
savings-related share option scheme) established by the Company or any
associated company (but excluding AMVESCAP Ordinary Shares in respect of
which options have been exercised) may not exceed four times his earnings,
and subsisting options under the No. 2 Scheme and any other approved
discretionary scheme must not exceed {pound sterling}30,000.
Applications for the grant of options may only be invited within 42 days of
the announcement by the Company of its annual or half-yearly results or at
any other time when circumstances are considered by the Board to be
exceptional.
Options may normally only be exercised between the third and tenth
anniversaries of the date of grant, at the end of which period they will
lapse.
An optionholder may exercise an option within a limited period if he leaves
as a "good leaver" under the rules, ceases to be employed as a result of
injury, ill-health, disability, retirement or, if the trustee so decides,
some other reason. The personal representative(s) of a deceased
optionholder may exercise an option for a period of 12 months following his
death. Options will lapse if an optionholder leaves the service of the
Company and its participating subsidiaries, other than in these
circumstances.
Options are also exercisable early and within a limited period in the event
of a takeover, reconstruction or winding-up of the Company. Alternatively,
following a takeover, options may, with the agreement of the acquiring
company, be rolled over into options over the acquiring company's shares.
On a variation of the Company's share capital the exercise price and/or the
number of AMVESCAP Ordinary Shares comprised in an option may be adjusted
by the trustee with the approval of the Inland Revenue.
6.6 The AMVESCAP No. 3 Executive Share Option Scheme (the "No. 3 Scheme")
The No. 3 Scheme was established by the Company on 23 June 1987 and was not
approved by the Inland Revenue in accordance with the provisions of the
Income and Corporation Taxes Act 1970. The No. 3 Scheme is administered by
Rothschild Trust Management Cayman Limited as trustee of the AMVESCAP
Employees Share Option Trust pursuant to a trust deed dated 23 June 1987
between AMVESCAP and Rothschild Trust Management Cayman Limited. The
Company provides funds to the trustee by way of loan which are used by the
trustee in the subscription or purchase of fully paid AMVESCAP Ordinary
Shares in the Company and in meeting the trustee's expenses.
The No. 3 Scheme is identical to the No. 2 Scheme save as set out below.
Each individual's participation is limited so that the aggregate market
value (at the date of grant) of all AMVESCAP Ordinary Shares in respect of
which options have been granted to him during the past ten years under the
No. 3 Scheme or any other employees' share option scheme (other than a
savings-related share option scheme) established by the Company or any
associated company (but excluding AMVESCAP Ordinary Shares in respect of
which options have been exercised) may not exceed eight
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times the higher of his total annual remuneration (excluding benefits in
kind) at the date of exercise and his total annual remuneration (excluding
benefits in kind) for the preceding twelve months.
For options granted prior to 6 April 1998, these may normally only be
exercised between the third and seventh anniversaries of the date of grant.
Options granted on or after 6 April 1998 may normally only be exercised
between the third and tenth anniversaries of the date of grant at the end
of which periods they will lapse.
Following a takeover there is no express provision for options to be rolled
over into options over the acquiring company's shares. The No. 3 Scheme may
be amended by the Directors with the consent of the trustee.
6.7 The AMVESCAP Share Participation Scheme (the "Share Participation Scheme")
The Share Participation Scheme was established by the Company on 22nd May
1987 and was approved by the Inland Revenue on 24th June 1987 in accordance
with the provisions of the Income and Corporation Taxes Act 1970. INVESCO
Trustee Corporation Limited is the current trustee.
All UK employees of the Company (or any participating subsidiary) with the
minimum qualifying period of service are entitled to receive current
allocations of AMVESCAP Ordinary Shares under the Share Participation
Scheme. The qualifying period of service is at least six months service up
to the end of the accounting period ending immediately prior to the date of
the relevant allocation. An allocation of AMVESCAP Ordinary Shares to
employees was last made in March 2000.
The maximum value of AMVESCAP Ordinary Shares allocated to any participant
under the Share Participation Scheme in any tax year may not exceed the
maximum from time to time permitted by the Taxes Act. The current limit is
the greater of {pound sterling}3,000 and ten per cent. of salary (subject
to a current maximum of {pound sterling}8,000).
The Taxes Act requires that AMVESCAP Ordinary Shares allocated to any
participant in the Share Participation Scheme must be held by the trustee
for a minimum period of two years after allocation, during which time they
may not be dealt with in any way except in certain circumstances such as
takeover, death or leaving employment because of injury, disability or
redundancy. For the following year the trustee must retain the shares
unless a participant instructs otherwise. At the end of the period, the
AMVESCAP Ordinary Shares will be transferred to the participant by the
trustee.
For as long as participant's shares remain held by the trustee, the
participant will be the beneficial owner and will be entitled to receive
dividends and, through the trustee, to vote, to participate in rights and
capitalisation issues and to elect to receive scrip dividends in
substantially the same way as other shareholders.
The Directors of the Company may alter the provisions of the Share
Participation Scheme with the prior approval of the Inland Revenue, but the
basic structure (and in particular the limitations on the number of shares
that may be issued thereunder as indicated above) cannot be altered without
the prior sanction of the Company in general meeting.
6.8 The AMVESCAP Global Stock Plan (formerly the AMVESCAP Global Partners'
Plan)
This plan was established by the Company with effect from 17 December 1993.
The purpose of the plan is to make contingent awards of AMVESCAP Ordinary
Shares (including American depository shares representing such AMVESCAP
Ordinary Shares ("ADSs")), which will be held in a trust for selected
senior managers during their employment with the Group subject to certain
conditions. The plan is administered by a management committee appointed by
the Directors comprising solely disinterested Directors (the "Management
Committee"). The plan is constituted by a trust deed dated 22 December 1993
(as amended) (the "Plan Trust") and a set of rules the trustee of which is
the Bank of Bermuda (New York) Limited (the "Plan Trustee").
AMVESCAP may from time to time provide cash, marketable securities or other
property to the Plan Trustee by way of contribution which are to be held by
the Plan Trustee for the purposes of this plan as well as the AMVESCAP
Global Stock Plan II and the Wholesale Representative Deferral Plan (which
are described in paragraph 6.9 and 6.10 of this Part VI respectively) on
trust for the employees and former employees of AMVESCAP and any of its
subsidiaries (and their beneficiaries) who are selected to participate in
the relevant plan.
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Employees who are eligible to participate in this plan are those employees
of AMVESCAP or of its subsidiaries who have been designated as "global
partners" and who have executed a global partner employment agreement.
In the fourth quarter of each year, the Remuneration Committee determines
the pool of assets to be allocated for participant awards in the plan in
that year. An award is a promise to give AMVESCAP Ordinary Shares
(including ADSs) or the cash value of such AMVESCAP Ordinary Shares at a
future time, subject to the vesting conditions set out below. It is
intended that AMVESCAP and relevant employing subsidiaries will transfer to
the Plan Trust funds equivalent to the sum of all awards. An award will
vest on 31 December of the third year following the year to which the award
relates. Unvested awards will vest earlier in certain circumstances such as
the participant's retirement in accordance with the rules of the plan, his
death or a termination of his employment by reason of disability or, at the
Management Committee's discretion, for any other reason. Unvested awards
will be forfeited if a participant leaves employment.
On a participant's cessation of employment, any AMVESCAP Ordinary Shares or
cash comprised in a participant's vested awards will be distributed to him
by the Plan Trustee approximately one year after such cessation.
Participants have the choice of accepting a lump sum or series of up to
five annual payments. The Management Committee has discretion to permit an
earlier distribution in respect of all or some of a participant's vested
awards.
The terms of the plan may be amended by the Remuneration Committee in any
way provided that amendments which adversely affect the rights of a
participant may be made only with the prior consent of the participant
unless such amendment is necessary to avoid the plan or the Plan Trust
being subject in the United States to the Employee Retirement Income
Security Act of 1974 and to avoid taxation of any assets held in the Plan
Trust.
In the event of a change of control of the Company or any employing company
all unvested awards will vest immediately where the participant is
dismissed in certain circumstances including where his remuneration or
responsibilities are reduced.
In the event of a consolidation or merger of the Company with, or into, any
other corporation or the sale by the Company of substantially all its
assets, the resulting successor may continue the plan provided a resolution
to adopt the plan is passed within 90 days of the consolidation, merger or
sale.
Dividends received by the Plan Trustee (or their cash equivalent where the
Plan Trustee has waived any dividends) in respect of AMVESCAP Ordinary
Shares comprised in an award shall be re-invested in AMVESCAP Ordinary
Shares and the additional shares shall be added to the participant's award.
The Management Committee shall direct the Plan Trustee how to vote in
respect of AMVESCAP Ordinary Shares held by it in respect of unvested
awards, but in the case of vested awards may require the Plan Trustee to
seek directions from the relevant participants.
6.9 The AMVESCAP Global Stock Plan II
The plan is identical to the AMVESCAP Global Stock Plan save as set out
below. The purpose of the scheme is to make contingent awards of AMVESCAP
Ordinary Shares (including ADSs), which will be held in a trust, for
selected senior managers during their employment with the Group subject to
certain conditions. The plan is intended to be an unfunded plan for the
purposes of providing deferred compensation. The trust can hold shares,
cash and other property contributed to it by the Company to assist with
practical funding needs.
In the fourth quarter of each year, the chairman and senior management
determine the percentage of participants' annual bonus to be deferred.
Employees who are eligible to participate in the plan are those employees
of the Company or of its subsidiaries who have been designated as "global
partners" and who have executed a global partner employment agreement, but
not necessarily restricted to that group.
6.10 The Wholesale Representative Deferral Plan
The plan is identical to the AMVESCAP Global Stock Plan II save as set out
below. The plan is administered by the directors of AIM Management Inc..
Employees who are eligible to participate in the plan are the key wholesale
representatives with AIM Management Inc..
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The awards under the plan are allocated so that each month bonus amounts
for participants are deferred (not as in the Global Stock Plan II where the
Remuneration Committee determined the percentage of annual bonus to be
deferred in the fourth quarter of each year).
6.11 The INVESCO ESOP
INVESCO Inc, a subsidiary of AMVESCAP, established a profit sharing plan
with effect from 1 January 1980 which was amended to continue in the form
of an employee stock ownership plan with effect from 1 January 1989, known
as the INVESCO ESOP (the "ESOP"). The trustee of the ESOP is AMVESCAP Trust
Company and the ESOP is administered by an employee benefit committee
appointed by the Board of INVESCO, Inc. (the "Committee").
The ESOP is in the form of a leverage stock bonus plan and money purchase
pension plan qualified under section 401(a) and 501(a) of the US Internal
Revenue Code of 1986. The ESOP is designed to invest primarily in "employer
securities" as defined in the U.S. Internal Revenue Code of 1986 which
includes AMVESCAP Ordinary Shares and ADRs of AMVESCAP.
INVESCO, Inc. and other participating companies in the United States make
stock bonus contributions comprising cash and/or employer securities in
respect of their employees who participate in the ESOP. Accounts are
established in respect of each participant's allocation of stock bonus
contributions which are held on trust by the trustee in accordance with the
terms of the ESOP.
A participant's account is 100 per cent. vested at all times. Upon
cessation of employment with INVESCO, Inc., at normal retirement age, or by
reason of disability or death, the Committee directs the trustee to pay a
participant the balance of his account. Distribution of a participant's
account is made in shares (or ADRs) or cash at the election of the
participant. If on distribution any employer securities are not readily
tradable participants have a right to require INVESCO, Inc. to purchase
such employer securities or participants may sell such employer securities
subject to redemption rights in favour of INVESCO, Inc. or the ESOP.
6.12 The AIM Share Option Schemes
These comprise the AIM Management Group Inc. 1991 Stock Option Plan, the
AIM Management Group Inc. Amended and Restated 1993 Stock Option Plan for
Employees and the AIM Management Group Inc. Amended and Restated 1993 Stock
Option Plan for Outside Directors. All the options granted under these
three schemes were granted before AIM was acquired by AMVESCAP pursuant to
the AIM Merger and were all converted into options over AMVESCAP Ordinary
Shares at the time of the AIM Merger. Therefore, there can be no further
grants of options under any of these three schemes and all that remains is
for them to be exercised by the relevant optionholders should they wish to
do so. If the options under these schemes are not exercised by the relevant
expiry date for such option, then they will lapse.
6.13 AMVESCAP Deferred Fees Share Plan 1999 ("Deferred Plan")
The Deferred Plan is open to participation by Directors of AMVESCAP who
are, or who would otherwise be, in receipt of fees for performing services
in the capacity only of a Director.
Any Director may at any time deliver a deferral notice to the Company by
which he elects to defer a proportion of his fees for one or more periods
in the future.
The notice shall operate to vary the terms of appointment of the Director
to the effect that the fees deferred shall either be credited to a deferred
fees account or an amount equal to the fees deferred shall be paid to a
trustee or custodian.
Payment of the deferred fees will be made to a participant on the earlier
of two years from the beginning of the period to which the deferral applies
and the date on which the participant ceases to hold office as a Director
of the Company.
When deferring fees, the Director may elect for those fees to be notionally
invested in either the Company's own shares, or one of a selection of funds
managed by a company within the Group. Payment, when made, would reflect
the performance of the notional investment. Payment may be made in cash or
by the transfer of investments to an equal value.
In no circumstances will the cost of paying any deferred fees to a single
Director exceed the amount of those fees nor will the overall cost of
paying deferred fees to all Directors who may have served
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<PAGE> 83
deferral notices on the Company exceed the limit set out from time to time
in the Articles of Association of the Company.
The Deferred Plan is administered by the Board who may exercise the power
of amendment by resolution. No amendment shall adversely affect subsisting
rights of any participant.
7. DIRECTORS' AND OTHER INTERESTS
7.1 The interests of the Directors (all of which are beneficial unless
otherwise stated), in the share capital of the Company as at 19 June 2000
(being the latest practicable date prior to the publication of this
document) which:
(a) are required to be notified by each Director pursuant to section 324
or section 328 of the Act;
(b) are required pursuant to section 325 of the Act to be entered into the
register referred to therein; or
(c) are interests of a connected person (as defined in section 346 of the
Act) of a Director which would, if the connected person were a
Director, be required to be disclosed under paragraph 7.1(a) or (b)
above and the existence of which is known to or could with reasonable
diligence be ascertained by that Director;
are and will be, immediately following completion of the Merger and
Admission (assuming that the Maximum Number of New AMVESCAP Ordinary Shares
are issued on the Effective Date), as follows:
<TABLE>
<CAPTION>
AMVESCAP AMVESCAP AMVESCAP
No.2 and Global Global
No.3 UK and Stock Plan Stock Plan
Executive International (Vested (Unvested
and AIM Savings Interests in Interests in
Share Related AMVESCAP AMVESCAP Deferred
Option Share Ordinary Ordinary INVESCO Fees Share
Director Schemes Options Shares) Shares) ESOP Plan
-------- --------- ------------- ------------ ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
C.W. Brady 1,474,027 -- 298,875 335,864 86,511 --
C.T. Bauer 100,000 -- -- 153,545 -- --
Sir John Banham -- -- -- -- -- --
The Hon. Michael D. Benson 917,003 2,919 620 102,733 -- --
J.R. Canion 386,038 -- -- -- -- 2,014
M.J. Cemo 400,000 -- -- 90,982 -- --
G.T. Crum 350,000 1,815 -- 119,753 -- --
A.D. Frazier, Jr. 1,000,000 1,815 5,950 111,785 10,993 --
R.H. Graham 550,000 -- -- 221,990 -- --
R.A. de Guardiola -- -- -- -- -- 9,593
H.L. Harris, Jr. 1,050,000 -- 86,119 83,840 79,847 --
B. Longstreth -- -- -- -- -- 9,593
R.F. McCullough 950,000 1,815 29,749 97,489 10,993 --
S.K. West 211,972 -- -- -- -- --
A.M. White -- -- -- -- -- --
</TABLE>
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<PAGE> 84
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Number of
AMVESCAP Percentage of Number of
Ordinary issued share AMVESCAP Percentage of
Shares capital Ordinary issued share
immediately immediately Shares capital
prior to the prior to the following the following the
Director Effective Date Effective Date Effective Date Effective Date
<S> <C> <C> <C> <C>
C.W. Brady 4,848,507 0.72 4,848,507 0.62
C.T. Bauer* 44,386,820 6.56 44,386,820 5.68
Sir John Banham 2,000 0.00 2,000 0.00
The Hon. Michael D. Benson 68,148 0.01 68,148 0.01
J.R. Canion 72,394 0.01 72,394 0.01
M.J. Cemo* 7,447,389 1.10 7,447,389 0.95
G.T. Crum* 33,353,864 4.93 33,353,864 4.27
A.D. Frazier, Jr. -- -- -- --
R.H. Graham* 30,926,221 4.57 30,926,221 3.96
R.A. de Guardiola 2,564,886 0.38 2,564,886 0.33
H.L. Harris, Jr. 111,200 0.02 111,200 0.01
B. Longstreth 70,440 0.01 70,440 0.01
R.F. McCullough 12,000 0.00 12,000 0.00
S.K. West 97,461 0.01 97,461 0.01
A.M. White 120,000 0.02 120,000 0.02
</TABLE>
* Included within the figures disclosed above are the following
non-beneficial interests: C. T. Bauer 1,240,546; M. J. Cemo 300,000;
G. T. Crum 11,432,667; and R. H. Graham 30,611,273
The Executive Directors of the Company are deemed to be discretionary
beneficiaries of the AMVESCAP Global Stock Plan (referred to in paragraph
6.9 above) and interested in the AMVESCAP Ordinary Shares held by the
trustee of the plan.
Mr. Charles Brady, Mr. Hubert Harris, Mr. A. D. Frazier and Mr. Robert
McCullough are participants in the INVESCO ESOP (referred to in paragraph
6.11 above) and are accordingly deemed to be interested in the AMVESCAP
Ordinary Shares held by the trustee of the INVESCO ESOP.
All Executive Directors are deemed to be discretionary beneficiaries of the
AMVESCAP No.2 and No.3 Executive Share Option Schemes (referred to in
paragraphs 6.5 and 6.6 above) and interested in the AMVESCAP Ordinary
Shares held by the trustees of the schemes.
7.2 Save as set out in paragraph 7.1 above, following completion of the Merger,
no Director will have any interest in the share capital of the Company or
any of its subsidiaries.
7.3 The Directors are aware of the following persons (in addition to those
disclosed at paragraph 7.1 above) who are, and will be following completion
of the Merger and Admission (assuming that the Maximum Number of New
AMVESCAP Ordinary Shares are issued on the Effective Date), interested in 3
per cent. or more of the issued share capital of the Company:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Number of
AMVESCAP Percentage of Number of
Ordinary issued share AMVESCAP Percentage of
Shares capital Ordinary issued share
immediately immediately Shares capital
prior to prior to following following
Shareholder Effective Date Effective Date Effective Date Effective Date
<S> <C> <C> <C> <C>
Rothschild Trust Cayman Limited (Trustees of the 26,175,029 3.87 26,175,029 3.35
AMVESCAP Share Option Trust)
Parties to the Voting Agreement entered into 158,122,009 23.36 158,122,009 20.22
pursuant to the merger with AIM (notified
pursuant to s.204 of the Act)
FMR Corp and its direct and indirect subsidiaries 20,314,291 3.00 20,314,291 2.60
and Fidelity International and its direct and
indirect subsidiaries
CGU plc 29,945,059 4.42 29,945,059 3.83
</TABLE>
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<PAGE> 85
7.4 Save as set out in paragraph 7.1 and 7.3 above, the Directors are not aware
of any person who will, immediately following the Merger, be interested
directly or indirectly in 3 per cent. or more of the issued share capital
of the Company or could directly or indirectly, jointly or severally,
exercise control over the Company.
7.5 (i) Details of each Director's service contract are as follows:
<TABLE>
<CAPTION>
Salary/fee Notice
Director Date & Other Parties US$000 Period Benefits
<S> <C> <C> <C> <C>
Charles W Brady 22.06.1994 566 1 year Discretionary bonus
AMVESCAP Group Relocation allowance
Services Inc. Pension Contribution
Charles T Bauer 04.11.1996 450 1 year* Medical Insurance
AIM Management Bonuses and any pension or
Group Inc. profit sharing plans
Minimum compensation
provision (salary and bonus
US$400,000)
Pension Contribution
The Hon. 31.07.1997 395 1 year Discretionary Bonus
Michael D Benson INVESCO Europe Medical Insurance
Limited Pension Contribution
Michael J Cemo 4.11.1996 275 1 year* Medical insurance
AIM Management Discretionary bonus
Group Inc. Pension Contribution
Gary T Crum 04.11.1996 400 1 year* Medical insurance
AIM Management Discretionary bonus
Group Inc. Pension Contribution
A D Frazier, Jr. 01.11.1996 412 1 year Discretionary bonus
AMVESCAP Group Relocation allowance
Services Inc. Pension Contribution
Robert H Graham 04.11.1996 500 1 year* Medical Insurance
AIM Management Discretionary bonus
Group Inc. Discretionary leave
Minimum compensation
provision (one year's salary:
US$450,000)
Pension Contribution
Hubert L Harris, Jr 10.06.1997 441 1 year Discretionary bonus
AMVESCAP Group Relocation allowance
Services Inc. Pension Contribution
Robert F McCullough 15.05.1996 412 1 year Discretionary bonus
AMVESCAP Group Relocation allowance
Services Inc.
</TABLE>
* Contract can be terminated before the fourth anniversary by
employing company or employee immediately without prior notice
provided that, in the case of termination by the employee,
termination is for a "good reason" (as defined in the contract).
The non executive directors of the Company, namely Messrs. Banham,
Canion, de Guardiola, Longstreth, West and White, have no formal
service contract with the Company. They are appointed by a resolution
of all the Directors, have no fixed term of appointment, but are
subject to re-election by shareholders every 3 years. They are each
entitled to an annual fee of US$100,000 which they may choose to defer
in whole or in part each quarter into AMVESCAP Ordinary Shares under
the AMVESCAP Deferred Fees Share Plan (referred to in paragraph 6.13
of this Part VI) by notifying the Company of the relevant amount they
wish to defer.
With effect from 1 January 2000, AMVESCAP adopted the AMVESCAP 2000
Management Incentive Compensation Plan ("Incentive Plan"). The purpose
of this Incentive Plan is to advance the interest of shareholders by
providing performance-based incentive compensation to key executive
officers. The Incentive Plan affects those persons who are defined as
"covered employees" under Section 162(m)(3) of the US Internal Revenue
Code. This at present means the Company's Chief Executive Officer and
its four most highly remunerated officers.
Under the Incentive Plan, the Remuneration Committee is to establish
objective annual performance goals for the Company. These goals will
be based on any one or more of the following measures as selected by
the Remuneration Committee in its discretion:
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<PAGE> 86
(a) net earnings;
(b) fully diluted earnings per share;
(c) return on average shareholder equity; and
(d) income before tax, goodwill amortisation and exceptional items.
The Remuneration Committee will establish at the beginning of each
financial year the Incentive Plan award to be made to each participant
in the event that the relevant performance goals are achieved. No
Incentive Plan award will exceed US$15 million for any year.
The Remuneration Committee has the power at any time during or after a
performance period, in its absolute discretion, to reduce or to
eliminate the award made to any participant for any reason, including
changes in the participant's role or duties with AMVESCAP or any
subsidiary of AMVESCAP during a performance period, whether due to any
termination of employment (including death, disability, retirement,
voluntary termination or termination with or without cause) or
otherwise.
The Board or a duly authorised committee may at any time terminate
and, from time to time, amend, modify or suspend the Incentive Plan
and the terms and provisions of any unvested award.
A participant only has rights under the Incentive Plan that are no
greater than those of a general creditor of AMVESCAP. The committee is
permitted to authorise the creation of trusts or similar arrangements
to meet AMVESCAP's obligations under the Incentive Plan.
Benefits under the Incentive Plan are not pensionable to the extent
that they constitute regular salary (or other pensionable compensation
under the Company's standard pension arrangements).
(ii) The remuneration of the Directors for the year ended 31 December 1999,
as extracted from the audited accounts of AMVESCAP for the year then
ended, was as follows:
<TABLE>
<CAPTION>
Benefits Pension
Salary/fee Bonus(1) in kind Rights(4) Total
{pound {pound {pound {pound {pound
sterling} sterling} sterling} sterling} sterling}
000 000 000 000 000
<S> <C> <C> <C> <C> <C>
EXECUTIVE DIRECTORS
Charles W. Brady 350 3,446 9 19 3,824
Charles T. Bauer 278 940 4 20 1,242
The Hon. Michael D. Benson 245 1,065 1 26 1,337
Michael J. Cemo(2) 170 1,916 3 18 2,107
Gary T. Crum 248 1,065 4 24 1,341
A.D. Frazier, Jr 255 1,065 5 19 1,344
Robert H. Graham 309 1,804 4 28 2,145
Hubert L. Harris, Jr 273 752 6 19 1,050
Robert F. McCullough 255 814 2 19 1,090
NON EXECUTIVE DIRECTORS
Sir John Banham 53 -- -- -- 53
Joseph R. Canion 56 -- -- -- 56
Roberto A. de Guardiola(3) 25 -- -- -- 25
Bevis Longstreth(3) 25 -- -- -- 25
Stephen K. West 56 -- -- -- 56
Alexander M. White 56 -- -- -- 56
---------- ---------- ---------- ---------- ----------
TOTAL 2,654 12,867 38 192 15,751
========== ========== ========== ========== ==========
</TABLE>
(1) A portion of the sums included under Bonus (20% for 1999) was
paid into the AMVESCAP Global Stock Plan and used to purchase
AMVESCAP Ordinary Shares on the open market. See "AMVESCAP Global
Stock Plan" in paragraph 6.8 above for more information.
(2) Bonus amounts include commissions earned pursuant to approved
commission schedules.
(3) Messrs. de Guardiola and Longstreth deferred a portion of their
1999 compensation pursuant to the AMVESCAP Deferred Fees Share
Plan.
(4) The Directors and executive officers participate in a defined
contribution pension scheme.
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<PAGE> 87
(iii) The remuneration of those Directors on the Board of AMVESCAP for the
years ended 31 December 1998 and 31 December 1997 as extracted from
the annual report and accounts for AMVESCAP for the year ended 31
December 1998 was as follows:
<TABLE>
<CAPTION>
Salary Bonus(+) Benefits Total
------ ------ ------ ------ ------ ------ ------ ------
1998 1997 1998 1997 1998 1997 1998 1997
{pound {pound {pound {pound {pound {pound {pound {pound
sterling} sterling} sterling} sterling} sterling} sterling} sterling} sterling}
'000 '000 '000 '000 '000 '000 '000 '000
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EXECUTIVE DIRECTORS
Charles W. Brady 335 338 2,412 2,134 14 13 2,761 2,485
Charles T. Bauer 271 279 1,206 1,372 1 1 1,478 1,652
The Hon. Michael D. Benson 245 230 845 536 1 2 1,091 768
Michael J. Cemo 166 168 1,439 1,470 1 1 1,606 1,639
Gary T. Crum 241 193 844 915 1 1 1,086 1,109
A. D. Frazier, Jr. 242 244 724 732 11 12 977 988
Robert H. Graham 302 300 1,809 1,524 1 1 2,112 1,825
Hubert L. Harris, Jr. 260 262 603 610 12 12 875 884
Robert F. McCullough 242 183 724 732 8 10 974 925
NON-EXECUTIVE DIRECTORS
Joseph R. Canion 36 30 -- -- -- -- 36 30
Roberto de Guardiola 36 30 -- -- -- -- 36 30
Bevis Longstreth 36 32 -- -- -- -- 36 32
Stephen K. West 36 30 -- -- -- -- 36 30
Alexander M. White 36 32 -- -- -- -- 36 32
------ ------ ------ ------ ------ ------ ------ ------
2,484 2,351 10,606 10,025 50 53 13,140 12,429
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
(+) A proportion approximately equal to 20% of the sums included
under Bonus were paid into the AMVESCAP Global Stock Plan and
used to purchase shares of the Company on the open market. The
shares purchased are then held in trust under the rules of the
AMVESCAP Global Stock Plan which normally provide for shares to
vest beneficially after a period of three years.
7.6 Save as set out in paragraph 7.5 above, there are no existing or
proposed service contracts between the Directors and any member of the
Group other than contracts expiring or determinable by the employing
company without payment of compensation (other than statutory
compensation) within one year.
7.7 Save for Joseph Canion and Roberto de Guardiola referred to at
paragraph 7.8 below, no Director has any interest in any transactions
which are or were unusual in their nature or conditions or are or were
significant to the business of AMVESCAP and which were effected by any
member of the AMVESCAP Group in the current or immediately preceding
financial year or which were effected during an earlier financial year
and which remain in any respect outstanding or unperformed.
7.8 Mr. Joseph R. Canion is a director and chairman of Insource Technology
Group Inc, which provides information technology services to AMVESCAP
from time to time for a fee. In 1999, total fees for services provided
to AMVESCAP amounted to approximately {pound sterling}919,000.
Mr. Roberto A. de Guardiola was formerly managing director of Putnam,
Lovell, de Guardiola & Thornton ("PLT") (formerly Putnam, Lovell &
Thornton) which provides investment banking advice to AMVESCAP from
time to time for a fee. In 1999, no investment banking advice was
provided to AMVESCAP for which a fee would have been payable.
7.9 There are no outstanding loans granted by any member of the Enlarged
AMVESCAP Group to any Director nor has any guarantee been provided by
any member of the Enlarged AMVESCAP Group for their benefit.
7.10 In the financial year ended 31 December 1999, the total aggregate of
the remuneration paid and benefits in kind granted (under any
description whatsoever and including pension benefits) to the
Directors by the members of the Group was approximately {pound
sterling}15,751,000.
7.11 The total emoluments receivable by the Directors will not be varied as
a consequence of the Merger.
8. UNITED KINGDOM TAXATION
The following statements are intended as a general guide only to certain aspects
of current UK taxation legislation and what is understood to be Inland Revenue
practice as at the date of this document. They are of a general nature only and
apply only to AMVESCAP Shareholders who own their AMVESCAP Ordinary Shares
beneficially as an investment. In particular, they do not address the position
of certain classes of
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<PAGE> 88
AMVESCAP Shareholders such as dealers in securities. Any person who is in any
doubt about his own taxation position or is subject to taxation in a
jurisdiction other than the UK, should consult an appropriate independent
professional adviser.
8.1 Dividends
Under current UK taxation legislation, no tax will be withheld from
dividend payments by AMVESCAP.
An AMVESCAP Shareholder who is an individual resident in the UK for UK tax
purposes will generally be entitled to a tax credit in respect of any
dividend received from AMVESCAP and will be taxed on the aggregate of the
dividend and the tax credit (the "Gross Dividend"). The Gross Dividend will
be treated as the top slice of the individual shareholder's income. The
value of the tax credit will be equal to 10 per cent. of the Gross
Dividend.
In the case of UK resident individual AMVESCAP Shareholders who are liable
to income tax at the starting, lower or basic rate, the tax credit will
match their income tax liability in respect of the dividend and there will
be no further income tax to pay. UK resident individual AMVESCAP
Shareholders who are liable to income tax at the higher rate will be
subject to income tax at the rate of 32.5 per cent. of the Gross Dividend,
to the extent that such sum, when treated as the top slice of their income,
falls above the threshold for higher rate income tax. The tax credit will
be set against part of this tax liability.
An AMVESCAP Shareholder within the charge to UK corporation tax and
resident for tax purposes in the UK will not normally be liable to UK
corporation tax on receipt of a dividend paid by AMVESCAP.
Most categories of UK resident AMVESCAP Shareholders will not be able to
claim any repayment from the Inland Revenue in respect of the tax credit,
although AMVESCAP Ordinary Shares held in personal equity plans and
individual savings accounts will benefit from the payment of a 10 per cent.
tax credit on dividends paid during the five years from 6 April 1999.
The right of AMVESCAP Shareholders who are not resident in the UK for tax
purposes to reclaim any part of the tax credit will depend on the existence
and terms of any double taxation convention between the UK and the country
in which they are resident. Generally no such reclaim will be possible.
AMVESCAP Shareholders resident outside the UK for tax purposes should
consult their own tax advisers concerning their tax liabilities on
dividends received (including any liabilities they have under local law)
and as to whether they are entitled to reclaim any part of the tax credit
in respect of dividends on their AMVESCAP Ordinary Shares.
8.2 Chargeable Gains
A disposal of AMVESCAP Ordinary Shares by an AMVESCAP Shareholder who is
either resident or, in the case of an individual, ordinarily resident, for
tax purposes in the UK, or who is not resident in the UK, but carries on a
trade, profession or vocation in the UK through a branch or agency to which
the AMVESCAP Ordinary Shares are attributable, may give rise to a
chargeable gain or allowable loss for the purposes of UK tax on chargeable
gains. Individuals who dispose of AMVESCAP Ordinary Shares while they are
temporarily non-resident may, under special rules, be treated as disposing
of them in the tax year in which they again become resident or ordinarily
resident in the UK.
8.3 Stamp Duty and Stamp Duty Reserve Tax ("SDRT")
A conveyance or transfer on sale of AMVESCAP Ordinary Shares other than to
a depository or clearing system or their nominees or agents will be liable
to ad valorem stamp duty, generally at the rate of 0.5 per cent of the
consideration for the transfer (rounded up to the nearest {pound
sterling}5). An unconditional agreement for the transfer of such shares
will be liable to SDRT, generally at the rate of 0.5 per cent. of the
consideration for the transfer, but such liability will be cancelled if the
agreement is completed by a duly stamped transfer within six years of the
date of the agreement or, if the agreement was unconditional, the date on
which the agreement became unconditional. Where the SDRT was paid, the SDRT
will, provided a claim for repayment is made, be repaid (but not
necessarily interest and penalties). Stamp duty and SDRT are normally paid
by the purchaser.
Under the CREST system for paperless transfers, no stamp duty or SDRT will
arise on a transfer of shares into the system, unless such a transfer is
made for a consideration in money or money's worth,
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<PAGE> 89
in which case a liability to SDRT (usually at a rate of 0.5 per cent.) will
arise. Paperless transfers of shares within CREST will be liable to SDRT
rather than stamp duty, and SDRT on relevant transactions settled within
the system or reported through it for regulatory purposes will be collected
by CREST.
Where AMVESCAP Ordinary Shares are issued or transferred (a) to, or to a
nominee for, a person whose business is or includes the provision of
clearance services, or (b) to, or to nominee for, a person whose business
is or includes issuing depository receipts, stamp duty or SDRT at the
higher rate of 1.5 per cent. (rounded up to the nearest {pound sterling}5)
or 1.5 per cent., respectively, at current rates, of the consideration
payable or, in certain circumstances, the value of the AMVESCAP Ordinary
Shares is payable. Clearance services may opt, provided certain conditions
are satisfied, for the normal rate of stamp duty or SDRT (0.5 per cent.
rounded up to the nearest {pound sterling}5, or 0.5 per cent. respectively
at current rates) to apply to transactions within such service instead of
the higher rate applying to issues or transfers of shares into the
clearance services.
This statement is intended as a general guide only, based on current law
and practice. Certain categories of person are not liable to SDRT and
others may, although not primarily liable for the SDRT, be required to
notify the Inland Revenue and account for it under the Stamp Duty Reserve
Tax Regulations 1986.
8.4 Clearance - UK Treasury Consent
Section 765 of the Income and Corporation Taxes Act 1988 makes it unlawful
for a UK resident company, inter alia to cause or permit a non-UK resident
company over which it has control to create or issue any shares or
debentures without the consent of the UK Treasury. The consent of the UK
Treasury may be given in two ways, either automatically by coming within
the provisions of the Treasury General Consents 1988 or by means of a
special consent to a specific application for clearance submitted to the UK
Treasury ("special consent").
Certain transactions comprising part of the Plan, and in particular the
issue and subsequent transfers to Exchangeco, Callco or AMVESCAP of the
Exchangeable Shares, require special consent. This consent has been applied
for by AMVESCAP. The UK Inland Revenue has informally indicated to the
Company that the UK Treasury will give its consent and the Directors
believe this will be given prior to the EGM. It is a condition of the
Merger that consent be obtained and if the consent of the UK Treasury was
not given, prior to the Effective Date the transaction would not be
completed at such date. Instead, the transaction would be postponed until
such consent is received, provided that if it is not received by 15
November 2000, the Merger Agreement will be terminated without liability
except for any antecedent breaches of the Merger Agreement.
9. MATERIAL CONTRACTS
9.1 The following contracts (not being contracts entered into in the ordinary
course of business) have been entered into by the Company and/or its
subsidiaries since 23 June 1998, and are or may be material:
(a) The Merger Agreement (as summarised in paragraph I of Part II of this
document) including as appendices:
(i) the draft Support Agreement (as summarised in paragraph 2 of
Part II of this document);
(ii) the draft Voting and Exchange Trust Agreement (as summarised in
paragraph 3 of Part II of this document); and
(iii) the draft Indenture (as summarised in paragraph 4 of Part II of
this document) each of (i), (ii) and (iii) to be entered into on
or prior to the Effective Date.
9.2 In addition to the contracts listed above in paragraph 9.1, the following
contracts (not being contracts entered into in the ordinary course of
business) have been entered into by the Company and/or its subsidiaries
and, as at the date of this document, contain provisions under which any
member of the Group has an obligation or entitlement which is material to
the Group:
(a) The Voting Agreement dated 4 November 1996 made between AMVESCAP, certain
shareholders of AIM and their spouses prior to the AIM Merger and certain
directors of AMVESCAP prior to the AIM Merger
Pursuant to this agreement, certain shareholders of AIM prior to the AIM
Merger and their spouses and certain directors of AMVESCAP prior to the AIM
Merger have agreed to exercise the votes that
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<PAGE> 90
they have as directors and shareholders in such a way as to maintain the
composition of the Board of AMVESCAP, as between AMVESCAP designees and AIM
designees subsequent to the AIM Merger.
Under the terms of the Voting Agreement, the parties have agreed to
maintain a Board of AMVESCAP comprising fifteen members, seven of whom will
be designated by a group corresponding to AIM management prior to the AIM
Merger; seven of whom comprise directors of AMVESCAP prior to the AIM
Merger and one of whom will be the Chairman.
The provisions of the Voting Agreement require parties to exercise their
votes so as to ensure the continued balance of the membership of the Board
of AMVESCAP between the two designated groups. The parties have also
undertaken to exercise their votes in such a way that the balance will be
maintained following any resignation, removal or re-election of directors.
The balance is further reinforced by provisions on quorum for meetings of
and voting at meetings of the Board of AMVESCAP when some designees are
absent.
Those AMVESCAP shareholders who are parties to the Voting Agreement agree
that they will exercise their votes at general meetings of AMVESCAP on
resolutions approved by two-thirds of the Board (other than those in
respect of the election of directors) in the same proportion of positive
and negative votes as those votes cast by shareholders of AMVESCAP who are
not connected to those AMVESCAP Shareholders who are party to this Voting
Agreement.
The parties to the Voting Agreement have acknowledged that the obligations
of parties who are directors of AMVESCAP will be subject to the fiduciary
duties they owe to AMVESCAP as directors.
The Voting Agreement will terminate on the earliest to occur of:
(i) in the case of the undertaking to vote in the same proportion as
unaffiliated shareholders, the first date on which certain large AIM
shareholders hold less than 15 per cent. of votes attaching to
AMVESCAP Ordinary Shares;
(ii) in the case of all provisions, the fourth anniversary of completion
of the AIM Merger; and
(iii) in the case of all provisions, a resolution proposed by the
designating group consisting of members of the Board of AMVESCAP (or
their subsequent designees) being voted against by all of the group
of directors designated by the AIM designating parties present at a
meeting but which is approved by the AMVESCAP Board.
Individual parties obligations under the Voting Agreement will cease if
they are removed, fired, forced to resign or otherwise leave the Board of
AMVESCAP on an involuntary basis (subject to certain exceptions).
(b) The Standstill Agreement dated 4 November 1996 made between AMVESCAP,
certain shareholders of AIM prior to the AIM Merger and their spouses and
certain directors of AMVESCAP
Under the Standstill Agreement certain shareholders of AIM prior to the AIM
Merger (and their spouses) and certain Directors of AMVESCAP have agreed
not to take certain actions without the consent of at least two-thirds of
all of the members of the Board of AMVESCAP.
The parties to the Standstill Agreement (other than AMVESCAP) have given
the following undertakings:
(i) not to acquire further shares in AMVESCAP or equivalent interests in
AMVESCAP (with certain limited exceptions including shares with a
value of up to {pound sterling}250,000 in any calendar year, shares
allotted under compensation programmes or plans approved by the Board
of AMVESCAP or shares offered under rights issues and bonus issues to
all AMVESCAP Shareholders), or acquire ownership of assets of
AMVESCAP or its subsidiaries;
(ii) not to participate in, or solicit the support of other shareholders
of AMVESCAP for, a resolution to be proposed at a general meeting of
AMVESCAP where the resolution has not been proposed by at least
two-thirds of the members of the Board of AMVESCAP;
(iii) not to make any solicitation, negotiation or statement with respect
to a merger, sale or transfer of assets outside the ordinary course
of business or other significant corporate transactions involving
AMVESCAP or its affiliates (other than where made to the Board of
AMVESCAP);
(iv) not to participate in "groups" (within the meaning given in US
securities law) or "concert parties" (within the meaning given in the
Takeover Code) in respect of AMVESCAP;
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(v) not to deposit AMVESCAP Ordinary Shares or equivalent interests
in AMVESCAP in a voting trust or similar arrangement;
(vi) not to exercise voting rights to elect or remove directors
(other than in accordance with the terms of the Voting
Agreement);
(vii) not to requisition a general meeting of AMVESCAP Ordinary
Shareholders;
(viii) not to enter into arrangements with a view to obtaining control
of AMVESCAP;
(ix) not to assist in proposals regarding the acquisition of
AMVESCAP (or control over the management of AMVESCAP's Board)
other than in the course of duties as a director or officer of
AMVESCAP;
(x) not to make a public request to AMVESCAP to amend the
Standstill Agreement or the articles of association of
AMVESCAP;
(xi) not to take any action which might require AMVESCAP to make a
public announcement about the possibility of a transaction
referred to in (iii) above; and
(xii) not to disclose any intentions, plans or arrangements
inconsistent with any of the above undertakings.
None of the above undertakings will prejudice the right of parties to
the Standstill Agreement to accept or give irrevocable undertakings to
accept takeover offers.
The Standstill Agreement terminates on the earlier of the fifth
anniversary of completion of the AIM Merger and the date on which
certain large AIM shareholders together hold less than 10 per cent. of
the AMVESCAP Ordinary Shares (or equivalent interests).
(c) The Transfer Restriction Agreement dated 4 November 1996
This is made between AMVESCAP, certain shareholders of AIM prior to
the AIM Merger and spouses of certain shareholders of AIM and Charles
Brady.
Under the terms of this restriction agreement the parties agree that
they will not transfer their shares in AMVESCAP held as at completion
of the AIM Merger (or arising from options held at completion of the
AIM Merger) until the fifth anniversary of the agreement (in the case
of significant shareholders of AIM and Charles Brady) or the fourth
anniversary of the agreement (in the case of other shareholders)
subject to certain exceptions.
The significant outstanding exceptions to the restrictions on transfer
are as follows:
(i) transfers to close family members or to a personal
representative on death;
(ii) transfers in each year up to the fifth anniversary of
completion of the AIM Merger on a cumulative basis of up to
certain percentages of shares held as at completion of the AIM
Merger and shares received subsequently on exercise of options
held as at completion of the AIM Merger;
Those AMVESCAP Shareholders who are parties to this agreement are also
restricted from transferring shares amounting to more than 2.5 per
cent. of AMVESCAP's voting shares - "block sales" - either
individually or together with other shareholders as part of a "group"
(within the meaning of US securities laws) or "concert party" (within
the meaning of the Takeover Code). The restrictions in the agreement
will not prejudice the right of parties to accept, or give irrevocable
undertakings to accept, takeover offers. The agreement gives AMVESCAP
a right of first refusal for AMVESCAP to purchase or arrange sale
through its broker of shares that a party proposes to transfer in
accordance with the exceptions to the restrictions on transfer.
The "block sale" and AMVESCAP's right of first refusal provisions
terminate five years after completion of the AIM Merger or earlier if
certain significant AIM shareholders together hold less than 10 per
cent. of the AMVESCAP Ordinary Shares.
(d) Transfer Administration Agreement dated 4 November 1996
The parties to this agreement are those who are parties to the
Transfer Restriction Agreement (except for Charles Brady) together
with an agent, State Street Bank and Trust Company, known as the
Transfer Administration Agent.
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Under the agreement the Transfer Administration Agent agrees to hold
the share certificates representing shares whose transfer is
restricted under the terms of the Transfer Restriction Agreement. Any
shareholder who is party to the Transfer Restriction Agreement and who
wishes to transfer shares in accordance with those agreements must
deliver a notice to the Transfer Administration Agent who will release
certificates in respect of the shares to be transferred.
The Transfer Administration Agent will maintain a register of
transfers and acquisitions of shares which are subject to the terms of
the Transfer Restriction Agreements. AMVESCAP agrees to indemnify the
agent in respect of losses it suffers (other than through its
negligence) and AMVESCAP will pay the agent's fees and expenses.
The term of the Transfer Administration Agreement is, in the case of
significant AIM Shareholders, five years from completion of the AIM
Merger and in the case of the other parties four years from completion
of the AIM Merger.
(e) The Registration Rights Agreement dated 28 February 1997
The parties to this agreement are AMVESCAP and certain shareholders of
AIM prior to the AIM Merger who received new AMVESCAP Ordinary Shares
pursuant to the AIM Merger.
Under the terms of the Registration Rights Agreement, American
Depositary Shares issued to shareholders on conversion of the shares
issued to them pursuant to the AIM Merger (together with any other
AMVESCAP securities issues in respect of such American Depositary
Shares) and AMVESCAP Ordinary Shares issued pursuant to the AIM Merger
(to the extent that securities of the same class have been registered
with the US Securities and Exchange Commission ("SEC")) may be
registered with SEC at the request of such shareholders subject to
certain conditions. The most significant of these conditions is that
the request for registration may only be made after the first
anniversary of completion of the AIM Merger and then only by such
shareholders together holding more than 5 per cent. of the securities
covered by the Registration Rights Agreement. AMVESCAP will only be
required to accept three such requests for registration.
If a request for registration is made in accordance with the terms of
the Registration Rights Agreement, AMVESCAP will be required to effect
a registration statement in respect of the relevant securities with
the SEC.
The Registration Rights Agreement will terminate on the earlier of:
(i) the sixth anniversary of completion of the AIM Merger; and
(ii) the date on which the final registration under the Registration
Rights Agreement becomes effective.
(f) The Indemnification Agreement dated 28 February 1997 made between
AMVESCAP, Charles Bauer, Robert Graham and Gary Crum and certain
related persons
Under the Indemnification Agreement, AMVESCAP has agreed to indemnify
these directors qua shareholders of AIM prior to the AIM Merger, each
of whom held approximately 5 per cent. or more of the shares in
AMVESCAP following completion of the AIM Merger against any increase
in the US tax liability of those shareholders arising from AMVESCAP
engaging in certain transactions involving the disposition of certain
shares or assets of the AMVESCAP Group after the AIM Merger.
9.3 The only contract (not being a contract in the ordinary course of
business) which has been entered into by Trimark and/or its
subsidiaries since 23 June 1998, and is or may be material is the
Merger Agreement.
9.4 Except for the contract referred to above in paragraph 9.3, there are
no contracts (not being contracts entered into in the ordinary course
of business) that have been entered into by Trimark and/or its
subsidiaries and, as at the date of this document, contain provisions
under which any member of the Trimark Group has an obligation or
entitlement which is material to the Trimark Group.
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10. WORKING CAPITAL
The Directors are of the opinion that, having regard to the Enlarged
AMVESCAP Group's existing resources, the Enlarged AMVESCAP Group has
sufficient working capital for its present requirements, that is for at
least the next 12 months from the date of this document.
11. SUBSIDIARIES
11.1 The Company acts as the holding company of the Group, the principal
activities of which are asset management and the provision of related
financial services. The principal subsidiary undertakings of the Company
which are included in the consolidation of the AMVESCAP Group's results
(all of which are wholly-owned companies), and their respective fields of
activity, are set out below:
<TABLE>
<CAPTION>
Registered Office (or
Name of Company principal place of business) Field of Activity
<S> <C> <C>
AIM Funds Management Inc. 120 Bloor Street East Investment Manager,
Suite 700 Advisor and Distributor of
Toronto Mutual Funds
Ontario M4W 1B7
Canada
AIM Management Group, Inc. 11 Greenway Plaza Holding Company
Suite 100
Houston
Texas 77046
USA
AVZ, Inc.* 1315 Peachtree Street N.E Holding Company
Atlanta
Georgia 30309
USA
INVESCO Asia Limited 11-12th Floor, 3 Exchange Investment Management
Square
8 Connaught Place
Central
Hong Kong
INVESCO Asset Management 16th Floor, Imperial Tower Investment Management
(Japan) Ltd 1-1-1, Uchisawai-cho
Chiyoda-Ku
Toyko 100-0011
Japan
INVESCO Asset Management Bleichstrasse 60-62 Investment Management
Deutschland GmbH 60313 Frankfurt am Main
Germany
INVESCO Asset Management Georges Dock International Holding Company
Ireland Holdings Limited Financial Services Centre
Dublin 1
Ireland
INVESCO Asset Management Georges Dock International Investment Management
Ireland Limited Financial Services Centre
Dublin 1
Ireland
INVESCO Asset Management Limited 11 Devonshire Square Investment Management
London
EC2M 4YR
United Kingdom
INVESCO Bank OHG Bleichstrasse 60-62 Banking and Asset
60313 Frankfurt am Main Management
Germany
</TABLE>
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<TABLE>
<CAPTION>
Registered Office (or
Name of Company principal place of business) Field of Activity
<S> <C> <C>
INVESCO Europe Limited* 11 Devonshire Square Holding Company
London
EC2M 4YR
United Kingdom
INVESCO France S.A. 19 rue du General Foy Investment Management,
75008 Paris Sales and Marketing
France
INVESCO Fund Managers Limited 11 Devonshire Square Investment Management
London
EC2M 4YR
United Kingdom
INVESCO Funds Group, Inc. 7800 East Union Avenue Management, Distribution
Suite 800 and Administration of
Denver Mutual Funds
Colorado 89237
USA
INVESCO GT Asset Management 11 Devonshire Square Investment Management
PLC London
EC2M 4YR
United Kingdom
INVESCO Holland BV Concertgebouwplein 15 Holding Company
1071 LL Amsterdam
The Netherlands
INVESCO, Inc. 1360 Peachtree Street N.E. Investment Advisory
Suite 100 Services
Atlanta
Georgia 30309
USA
INVESCO International Holdings 11 Devonshire Square Holding Company
Limited London
EC2M 4YR
United Kingdom
INVESCO Pacific Holdings Limited Cedar House Holding Company
41 Cedar Avenue
HM12 Hamilton
Bermuda
INVESCO Private Portfolio 11 Devonshire Square Investment Management
Management Limited London
EC2M 4YR
United Kingdom
INVESCO Retirement and 400 Colony Square Co-ordinate, Develop and
Benefit Services, Inc. 1201 Peachtree Street N.E. Manage Defined
Suite 2200 Contribution Plans (incl.
Atlanta 401K) and other Retirement
Georgia 30361 Assets and Services
USA
INVESCO UK Holdings PLC 11 Devonshire Square Holding Company
London
EC2M 4YR
United Kingdom
</TABLE>
* These companies account for more than 10% of total revenue of the AMVESCAP
Group
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<PAGE> 95
12. PRINCIPAL ESTABLISHMENTS
12.1 The principal establishments owned or occupied by the Group are as follows:
(i) the lease of approximately 80,500 square feet at 11 Devonshire Square
London EC2M 4YR in the United Kingdom expiring on 31st December 2007.
AMVESCAP has also signed an agreement to lease 130,000 square feet of
space in London for a term of 20.5 years in London, which is expected
to commence in July 2002;
(ii) the lease of approximately 45,000 square feet at 1315 Peachtree
Street N.E. Suite 100 Atlanta Georgia USA;
(iii) the lease of approximately 107,413 square feet at 1360 Peachtree
Street N.E. Suite 100 Atlanta, Georgia, USA;
(iv) the lease of approximately 74,421 square feet at 400 Colony Square,
1201 Peachtree Street N.E. Suite 2200 Atlanta, Georgia, USA;
(v) the lease of approximately 618,984 square feet at 11 Greenway Plaza,
Suite 100, Houston, Texas, USA; and
(vi) the lease of approximately 160,000 square feet at 7800 East Union
Avenue, Suite 800, Denver, Colorado, USA.
In addition, the AMVESCAP Group occupies leased premises in
Louisville, Kentucky; Boston, Massachusetts; New York, New York;
Dallas, Texas; Coral Gables, Florida; San Francisco, California;
Toronto, Ontario; Hamilton, Bermuda; Puerto Rico; Winston Salem, North
Carolina; Buenos Aires, Argentina; Reigate, England; St. Helier,
Jersey; St. Peter Port, Guernsey; Dublin, Ireland; Paris, France;
Tokyo, Japan; Hong Kong, PRC; Taipei, Taiwan; Sydney, Australia;
Singapore; Madrid, Spain; Milan, Italy; Amsterdam, Netherlands;
Frankfurt, Germany; Vienna, Austria; Zurich, Switzerland; Moscow,
Russia; Warsaw, Poland; and Prague, Czech Republic.
AMVESCAP considers the facilities generally suitable and adequate for
the purposes for which they are used.
13. MISCELLANEOUS
13.1 No significant change
(a) Save as disclosed in paragraph 10 of Part I "Current Trading and
Prospects", there has been no significant change in the financial or
trading position of the AMVESCAP Group since 31 March 2000, the date to
which the last unaudited accounts of the AMVESCAP Group for the three month
period then ended were prepared.
(b) Save as disclosed in paragraph 10 of Part I "Current Trading and
Prospects", there has been no significant change in the financial or
trading position of the Trimark Group since 31 March 2000, the date to
which the last audited accounts of the Trimark Group were prepared.
13.2 Litigation
(a) Neither the Company nor any of its subsidiary undertakings is nor has been
party to any legal or arbitration proceedings which may have or have had
during the 12 months preceding the date of this document a significant
effect on the AMVESCAP Group's financial position nor are any such
proceedings pending or threatened by or against the Company or any of its
subsidiary undertakings.
(b) Neither Trimark nor any of its subsidiary undertakings is nor has been
party to any legal or arbitration proceedings which may have or have had
during the 12 months preceding the date of this document a significant
effect on the Trimark Group's financial position nor are any such
proceedings pending or threatened by or against Trimark or any of its
subsidiary undertakings.
13.3 Expenses
The total costs and expenses relating to the Merger which are payable by
the Company, are estimated to amount to {pounds sterling}20 million
(excluding VAT).
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<PAGE> 96
13.4 Consent
Arthur Andersen, Chartered Accountants, have given and have not withdrawn
their written consent to the inclusion herein of their letter at Part V and
the references to their name in the form and context in which they are
respectively included and have authorised the contents of their letter for
the purposes of section 152(1)(e) of the Financial Services Act 1986.
13.5 The Company's registrars are IRG plc of Bourne House, 34 Beckenham Road,
Beckenham, Kent BR3 4TU.
13.6 Save for the Debentures, which may be issued if more than C$100 million are
elected for by the Trimark Shareholders, there are no outstanding
convertible debt securities, exchangeable debt securities or debt
securities with warrants in the AMVESCAP Group.
14. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during
normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) at the offices of Ashurst Morris Crisp, Broadwalk House,
5 Appold Street, London EC2A 2HA, up to and including 20 July 2000:
(a) the Memorandum and Articles of Association of the Company;
(b) the audited consolidated accounts of AMVESCAP for the three financial
years ended 31 December 1999, 31 December 1998 and 31 December 1997;
(c) the unaudited interim accounts of AMVESCAP for the 3 month period
ended 31 March 2000;
(d) the audited financial accounts of Trimark for the three financial
years ended 31 March 2000, 31 March 1999 and 31 March 1998;
(e) the pro forma financial information of the Enlarged AMVESCAP Group;
(f) the letter from Arthur Andersen set out in Part V of this document;
(g) the rules of the AMVESCAP Share Option Schemes referred to in
paragraph 6 above;
(h) the trust deeds referred to in paragraphs 6.5, 6.6 and 6.8 above;
(i) the service contracts and AMVESCAP 2000 Management Incentive Plan
referred to in paragraph 7 above;
(j) the material contracts referred to in paragraph 9 above;
(k) the letter of consent referred to in paragraph 13.4 above;
(l) the voting undertakings referred to in paragraph 14 of Part I of this
document; and
(m) this document.
Dated 23 June 2000
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<PAGE> 97
PART VII
DEFINITIONS
In this document the following expressions have the following meanings unless
the context requires otherwise:
"Act" the Companies Act 1985 as amended
"Admission" admission of the New AMVESCAP Ordinary Shares
to the Official List of the UKLA and to
trading on the London Stock Exchange
"AIM" AIM Management Group Inc.
"AIM Merger" the merger of AIM Management Group Inc. and
AMVESCAP in February 1997 pursuant to which
AMVESCAP acquired the entire issued share
capital of AIM
"AMVESCAP" or the "Company" AMVESCAP PLC
"AMVESCAP Group" or "Group" AMVESCAP and its subsidiaries at the date of
this document
"AMVESCAP Ordinary Shares" ordinary shares of 25 pence each in the
capital of the Company
"AMVESCAP Shareholders" holders of AMVESCAP Ordinary Shares
"AMVESCAP Share Option Schemes" the share option schemes of the AMVESCAP
Group referred to in paragraph 6 of Part VI
"AMVESCAP Share Value" C$1000 divided by the Closing Price; provided
that if the Closing Price is less than
C$18.8193 it will be deemed to be C$18.8193
and, if the Closing Price is greater than
C$24.1963, it will be deemed to be C$24.1963
"Board" or "Directors" the board of directors of AMVESCAP as listed
in paragraph 2 of Part VI
"Callco" AVZ Callco Inc. a corporation incorporated
under the laws of the province of Nova Scotia
in Canada and a wholly owned subsidiary of
AMVESCAP
"Canadian Dollar Equivalent" on any date the amount in Canadian dollars
derived by multiplying an amount expressed in
pounds sterling by the noon spot exchange
rate on such date for conversion of pounds
sterling into Canadian dollars as reported by
the Bank of Canada or, if unavailable, then
at the exchange rate deemed appropriate by
the Directors for the day in question
"Closing Price" the weighted average of the Canadian Dollar
Equivalent of the trading prices of an
AMVESCAP Ordinary Share on the London Stock
Exchange for a period of five consecutive
trading days ending on the date that is three
Business Days prior to the Effective Date
"Closing Price Ratio" the figure derived by dividing the Closing
Price by C$21.5078, which shall be deemed to
be 0.875 if the resulting figure is less than
0.875 and 1.125 if the resulting figure is
greater than 1.125
"CREST" the relevant system (as defined in the
Regulations) in respect of which Crestco Ltd.
is the operator (as defined in the
Regulations)
"Current Market Price" in respect of an AMVESCAP Ordinary Share on
any date, the quotient obtained by dividing
(i) the aggregate of the Daily Value of
Trades for each day during a period of 20
consecutive trading days ending not more than
3 trading days before such date, by (ii) the
aggregate volume of AMVESCAP Ordinary Shares
used to calculate such Daily Value of Trades
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<PAGE> 98
"Daily Value of Trades" in respect of the AMVESCAP Ordinary Shares on
any trading day, the Canadian Dollar
Equivalent of the product of (i) the volume
weighted average price of AMVESCAP Ordinary
Shares on the LSE (or, if the AMVESCAP
Ordinary Shares are not then listed on the
LSE, on such other exchange on which the
AMVESCAP Ordinary Shares are listed as may be
selected by the Board on such date, as
determined by Bloomberg L.P. or another
reputable third party information source
selected by the Board), times (ii) the
aggregate volume of AMVESCAP Ordinary Shares
traded on such day on the LSE (or such other
exchange used to calculate such volume
weighted average price)
"Debentures" 6% equity subordinated debentures to be
issued by Exchangeco pursuant to the Merger
"Director" any member of the Board of AMVESCAP
"Dissenting Shareholders" those Trimark Shareholders holding shares
directly in Trimark who exercise validly
their rights of dissent by providing to
Trimark a notice of dissent by the applicable
time and date and who become entitled to
receive "fair value" for their Trimark Shares
in cash
"Effective Date" the date on which the Plan becomes effective
which is expected to be on or before 1 August
2000
"Election Deadline" 5.00pm (Toronto time) on 20 July 2000, the
time and date by which Trimark Optionholders
are required to have validly exercised
conditionally or otherwise their Trimark
Options in order to receive Trimark Shares,
failing which such persons shall receive
options over AMVESCAP Ordinary Shares as set
out in paragraph 1 of Part II of this
document (as such time and date may be
postponed or adjourned in certain
circumstances)
"Enlarged AMVESCAP Group" the AMVESCAP Group as enlarged by the Merger
with Trimark
"Exchangeco" means AMVESCAP Inc. a corporation
incorporated under the laws of the province
of Nova Scotia and an indirect wholly owned
subsidiary of AMVESCAP
"Exchangeable Shares" exchangeable shares in the capital of
Exchangeco to be issued pursuant to the
Merger
"Exchange Ratio" means 1.25536 divided by the Closing Price
Ratio resulting in an approximate figure for
the Exchange Ratio of no more than 1.4346971
and no less than 1.1158755
"Extraordinary General Meeting" the extraordinary general meeting of AMVESCAP
or "EGM" to be convened for 11.00 am on 20 July 2000
for the purposes of passing the Special
Resolution
"Form of Proxy" the form of proxy to be used by AMVESCAP
Shareholders at the Extraordinary General
Meeting
"Indenture" the indenture to be dated on the Effective
Date between AMVESCAP, Exchangeco and the
Trustee under which the Debentures will be
issued
"Listing Particulars" this document
"Listing Rules" the Listing Rules of the UKLA
"London Stock Exchange" or "LSE" the London Stock Exchange plc
"Merger" the proposed acquisition of the entire issued
share capital of Trimark by AMVESCAP (through
Exchangeco) on the terms and conditions set
out in the Merger Agreement
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<PAGE> 99
"Merger Agreement" the amended and restated merger agreement
dated as of 9 May 2000 between AMVESCAP and
Trimark as referred to in paragraph 1 of Part
II to this document
"New AMVESCAP Ordinary Shares" new ordinary shares of 25 pence each in the
capital of the Company to be issued, credited
as fully paid, pursuant to the Merger
"OBCA" the Business Corporations Act (Ontario), as
amended
"Official List" the official list of the UKLA
"Plan" the plan of arrangement under the OBCA
proposed for Trimark pursuant to which the
entire issued share capital of Trimark will
be acquired by AMVESCAP (through Exchangeco),
on the terms and subject to the conditions of
the Merger Agreement
"Regulations" the Uncertificated Securities Regulations
1998 (SI 1995 No.95/3272)
"Securities Act" the United States Securities Act of 1933 as
amended
"Special Resolution" the special resolution set out in the Notice
of EGM at the end of this document
"Special Voting Share" the one special voting share of 25 pence in
the capital of the Company to be issued
pursuant to the Merger
"subsidiary" shall be construed in accordance with the Act
"Trimark" Trimark Financial Corporation
"Trimark Group" Trimark and its subsidiaries
"Trimark Directors" the board of directors of Trimark
"Trimark Options" the outstanding options to acquire Trimark
Shares
"Trimark Optionholders" the holders of Trimark Options
"Trimark Securityholders" Trimark Shareholders and Trimark
Optionholders collectively (provided that
this shall be deemed to exclude those Trimark
Shareholders who hold shares indirectly in
Trimark for the purposes of paragraph 1 of
Part II of this document only)
"Trimark Shareholders" the holders of Trimark Shares
"Trimark Shares" the outstanding common shares in the capital
of Trimark (or in the capital of certain
holding companies, which will become wholly
owned by AMVESCAP as a result of the Merger,
whose only purpose is to hold outstanding
common shares in the capital of Trimark)
"Trustee" CIBC Mellon Trust Company
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"UKLA" the UK Listing Authority
"uncertificated form" recorded on the relevant register as being
held in uncertificated form in CREST and
title to which may be transferred by means of
CREST
"USA" or "United States" the United States of America, its territories
and possessions, any State of the United
States of America and the District of
Columbia and all other areas subject to the
jurisdiction of the United States
In this document unless the context specifies otherwise: (a) Canadian Dollars
(C$) have been converted to Pounds Sterling at the rate of C$2.2849: {pound
sterling}1, being the mid point exchange rate as at close of business on 8 May
2000, the date prior to the announcement of the Merger; (b) references to times
of day are to the time of day in London, England.
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PART VIII
NOTICE OF EXTRAORDINARY GENERAL MEETING
AMVESCAP PLC
(Registered in England No. 308372)
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of the Company will
be held at 11 Devonshire Square, London EC2M 4YR on 20 July 2000 at 11.00 am,
for the purpose of considering and, if thought fit, passing the following
resolution as a special resolution:
SPECIAL RESOLUTION
That:
(A) approval be given to the acquisition of the entire issued and to be issued
share capital of Trimark Financial Corporation upon the terms and
conditions as set out in the Merger Agreement, together with the Support
Agreement, Voting and Exchange Trust Agreement and Indenture each in the
form produced to the meeting and initialled by the Chairman with, in each
case, such non-material amendments, modifications, waivers and extensions
of such terms and conditions as the Directors think fit (the "Merger");
(B) the authorised share capital of the Company be increased from {pound
sterling}212,700,000 to {pound sterling}262,500,000 by the creation of
199,199,999 AMVESCAP Ordinary Shares of 25 pence each and by the creation
of a special voting share of 25 pence (the "Special Voting Share") with the
rights, privileges, and restrictions attaching to it as summarised in
paragraph 6 of Part II of the document, comprising a circular and listing
particulars relating to the Company, to which this Notice is appended (and
so that words and expressions defined in such circular and listing
particulars shall bear the same meanings in this resolution) and set out in
the Articles of Association referred to in (G) below;
(C) the authority given to the Directors at the annual general meeting of the
Company held on 26 April 2000 be renewed so that the Directors be generally
and unconditionally authorised in accordance with section 80 of the
Companies Act 1985 to exercise all the powers of the Company to allot
relevant securities (as defined in sub-section (2) of that section) up to
an aggregate nominal amount of {pound sterling}56,205,685.50 provided that;
(i) this authority unless renewed or revoked shall expire on 25 April 2005
save that the Company may before such expiry make an offer or
agreement which would or might require relevant securities to be
allotted after such expiry and the directors may allot relevant
securities in pursuance of such offer or agreement as if this
authority had not expired; and
(ii) upon the passing of this resolution, the resolution numbered 5 passed
at the annual general meeting of the Company held on 6 May 1999 and
the resolution numbered 6 passed at the annual general meeting held on
26 April 2000 respectively shall be of no further force or effect
(without prejudice to any previous exercise thereof);
(D) without affecting the authority given to the Directors at (C) above, the
Directors be authorised under section 80 of the Companies Act 1985 (i) to
allot New AMVESCAP Ordinary Shares in connection with the Merger subject to
and to the extent that valid acceptances pursuant to the Merger are
received for New AMVESCAP Ordinary Shares, Exchangeable Shares and
Debentures and (ii) to allot the Special Voting Share subject only to
payment of 25 pence therefor, such power to expire on 19 July 2005, save
that the Company may, before the expiry of such authority, make an offer or
agreement (including the Merger Agreement, the Support Agreement, Voting
and Exchange Trust Agreement and Indenture) which would or might require
New AMVESCAP Ordinary Shares to be allotted after such expiry and the
Directors may allot such New AMVESCAP Ordinary Shares pursuant to such
offer or agreement as if the authority conferred by this paragraph (D) had
not expired and the maximum nominal value of New AMVESCAP Ordinary Shares
and the Special Voting Share which can be allotted under this authority is
{pound sterling}26,307,220.75; without prejudice to the generality of
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the foregoing, this authority shall include authority for the Directors to
allot New AMVESCAP Ordinary Shares and the Special Voting Share referred to
in the Merger Agreement; and
(E) the authority given to the Directors at the annual general meeting of the
Company held on 26 April 2000 be renewed so that the Directors be empowered
pursuant to section 95 of the Companies Act 1985 to allot equity securities
( as defined in Section 94 of the Companies Act 1985) for cash pursuant to
the authority conferred on them by (C) above as if section 89(1) of that
Act did not apply to such allotment provided that the power conferred by
this paragraph (E) shall be limited to:
(i) any allotment of equity securities in connection with a rights issue
being an offer of equity securities by way of rights to the holders of
ordinary shares in the capital of the Company (of any class) on the
relevant register on a fixed record date in proportion (as nearly as
may be) to the respective holdings of ordinary shares to whom the
offer is made (subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to fractional
entitlements or record dates or legal or practical problems under the
laws of any territory or the requirements of any recognised regulatory
body or stock exchange); and
(ii) any allotments (otherwise than pursuant to sub-paragraph (i) above) of
equity securities up to an aggregate nominal value not exceeding
{pound sterling}8,430,852.75;
provided further that this power, unless renewed, shall expire on 25 April
2005; and the Company may make an offer or agreement before this power has
expired which would or might require equity securities to be allotted after
such expiry and the Directors may allot equity securities in pursuance of
such offer or agreement as if the power conferred hereby had not expired
and, upon the passing of this resolution, each of the resolutions numbered
8 passed at the annual general meetings of the Company held on 6 May 1999
and 26 April 2000 respectively shall be of no further force or effect
(without prejudice to any previous exercise thereof);
(F) without affecting the authority given to the Directors at (E) above, the
Directors be empowered under section 95 of the Companies Act 1985 (i) to
allot New AMVESCAP Ordinary Shares in connection with the Merger subject to
and to the extent that valid acceptances pursuant to the Merger are
received for New AMVESCAP Ordinary Shares, Exchangeable Shares and
Debentures pursuant to and during the period of the authority granted in
(D) above as if Section 89(1) of the said Act did not apply to any such
allotment and (ii) to allot the Special Voting Share as if Section 89(1) of
the Act did not apply to any such allotment, such power to expire on 19
July 2005, save that the Company may, before the expiry of such power, make
an offer or agreement (including the Merger Agreement, the Support
Agreement Voting and Exchange Trust Agreement and Indenture) which would or
might require New AMVESCAP Ordinary Shares to be allotted after such expiry
and the Directors may allot such New AMVESCAP Ordinary Shares pursuant to
such offer or agreement as if the power conferred by this paragraph (F) had
not expired; and the maximum nominal value of New AMVESCAP Ordinary Shares
and Special Voting Share which can be allotted under this power is {pound
sterling}26,307,220.75; without prejudice to the generality of the
foregoing, this power shall include power for the Directors to allot the
New AMVESCAP Ordinary Shares and the Special Voting Share referred to in
the Merger Agreement; and
(G) the Regulations contained in the printed document produced to the meeting,
and for the purpose of identification initialled by the chairman of the
meeting, be approved and adopted as the articles of association of the
Company in substitution for, and to the exclusion of, all previous articles
of association
PROVIDED THAT, save for (A) above, this resolution shall be conditional upon the
Plan becoming effective other than any requirement in the Plan for this
resolution to become unconditional in order for the Plan to become effective.
Registered office: BY ORDER OF THE BOARD
11 Devonshire Square Michael S Perman
London EC2M 4YR Secretary
23 June 2000
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NOTES
PROXIES: Only holders of AMVESCAP Ordinary Shares are entitled to attend and
vote at this meeting. A member entitled to attend and vote may appoint a proxy
or proxies, who need not be a member of the Company, to attend (and on a poll to
vote) instead of him or her. Forms of proxy must be received by the Company's
Registrars, IRG Plc (Proxies), PO Box 25, Beckenham, Kent BR3 4BR, not later
than 48 hours before the time of the meeting. Completion of a form of proxy will
not preclude a member from attending and voting in person at the meeting.
RIGHT TO ATTEND AND VOTE: In order to have the right to attend and vote at the
meeting (and also for the purpose of calculating how many votes a person
entitled to attend and vote may cast), a person must be entered on the register
of members of the Company by no later than 11 am on 18 July 2000, being 48 hours
before the time fixed for the meeting. Changes to entries on the register after
this time shall be disregarded in determining the rights of any person to attend
or vote at this meeting.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMVESCAP PLC
-------------------------
(Registrant)
Date 23 June, 2000 By /s/ MICHAEL S. PERMAN
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(Signature)
Michael S. Perman
Company Secretary
