EXHIBIT 10.14
OCTEL CORP.
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RULES
of the
OCTEL CORP. COMPANY SHARE OPTION PLAN
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Approval by the Company's Board of Directors on 10 May 1998
and by the Company's Stockholder on
PRICEWATERHOUSECOOPERS
Benson House
33 Wellington Street
Leeds
LS1 4JP
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CONTENTS
1. DEFINITIONS FOR THE PURPOSE OF PART A......................................20
2. GRANT OF OPTIONS...........................................................24
2.1 Procedure for Grant of Options.........................................24
2.2 Requirement to Issue Option Certificate................................25
2.3 Right to Disclaim Option...............................................25
2.4 Options may not be transferred.........................................25
3. CONDITIONS RELATING TO THE GRANT OF OPTIONS................................26
3.1 Statutory Limit........................................................26
3.2 Interpretation of Individual Limits....................................26
3.3 Calendar Year Limitation...............................................26
3.4 Maximum Aggregate Number Of Shares.....................................26
3.5 United States Securities Act Of 1933...................................27
3.6 Additional Conditions....................................................
4. RIGHTS OF EXERCISE.........................................................27
4.1 Earliest Date of Exercise..............................................27
4.2 Requirement to remain in Employment....................................28
4.3 Death of Option Holder.................................................28
4.4 Right to Exercise Prematurely..........................................28
4.5 Extended Exercise Period...............................................29
4.6 Transfer of Employment within Group....................................29
4.7 Transfer of Employment Overseas........................................30
4.8 Lapse of Options.......................................................30
4.9 Compliance with the United States Securities Laws......................31
4.10Shares to be held for Investment Purposes..............................31
4.11Shareholder Approval...................................................31
4.12Option Holder with Material Interest...................................32
5. TAKE-OVER, RECONSTRUCTION AND AMALGAMATION AND LIQUIDATION.................32
5.1 Take-over pursuant to Tender Offer.....................................32
5.2 Take-over pursuant to Scheme of Arrangement............................32
5.3 Scheme of Arrangement without Change of Control........................32
5.4 Compulsory Acquisition of Shares.......................................33
5.5 Voluntary Winding Up of the Company....................................33
5.6 Meaning of Obtaining Control...........................................33
5.7 Rollover of Options....................................................33
5.8 Meaning of "appropriate period"........................................34
6. MANNER OF EXERCISE.........................................................34
6.1 Actions Required of the Option Holder..................................34
6.2 Actions Required of the Company........................................34
6.3 Partial Exercise.......................................................34
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7. ISSUE OF SHARES............................................................34
7.1 Ranking of Shares......................................................34
7.2 Admission to the New York Stock Exchange...............................35
8. ADJUSTMENTS................................................................35
8.1 General Power of Adjustment............................................35
8.2 Requirement to Capitalise Reserves.....................................35
8.3 Notification of Option Holders.........................................35
9. ADMINISTRATION.............................................................36
9.1 Delivery of Notices or Documents.......................................36
9.2 Copies of Shareholder Communications...................................36
9.3 Maintenance of Unissued Share Capital..................................36
9.4 Directors'Power to Administer Plan.....................................36
9.5 Directors'Decisions are Final and Conclusive...........................36
9.6 Costs of Administering Plan............................................36
10. ALTERATIONS...............................................................36
10.1 Power to alter Rules prior to Inland Revenue approval.................36
10.2 Power to alter Rules following Inland Revenue approval................37
10.3 Alteration which affects subsisting rights of Option Holders..........37
10.4 Notification to Option Holders........................................37
11. GENERAL...................................................................37
11.1 Termination of the Plan...............................................37
11.2 No Compensation for loss of Option Rights.............................37
11.3 Governing Law.........................................................37
12. DEFINITIONS FOR PURPOSES OF PART B........................................38
12.1 Part B not Approved by Inland Revenue.................................38
12.2 Terms of Part A apply except as amended...............................38
13. GRANT OF UNAPPROVED OPTIONS...............................................38
13.1 Specification of Unapproved Option....................................38
13.2 Modified Terms and Conditions.........................................38
13.3 Additional Requirements...............................................38
14. CONDITIONS RELATING TO THE GRANT OF UNAPPROVED OPTIONS....................39
15. EXERCISE OF UNAPPROVED OPTIONS............................................39
16. DISCRETION TO PAY CASH ON EXERCISE OF AN OPTION...........................39
17. EMPLOYMENT AND SOCIAL TAXES...............................................39
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PART A APPROVED BY THE INLAND REVENUE UNDER THE INCOME AND
CORPORATION TAXES ACT 1988 ON [ ] UNDER REFERENCE [ ]
1. DEFINITIONS FOR THE PURPOSE OF PART A
In this Plan, the following words and expressions shall, where the context so
permits, have the meanings set forth below:
"Acquiring Company" the person mentioned in Rule 5.1, being
a company within the meaning of Section
832 of the Act;
"Acquisition Price" in relation to an Option, the total
amount payable on any exercise being an
amount equal to the relevant Share Price
multiplied by the number of Shares in
respect of which the Option is
exercised;
"the Act" the Income and Corporation Taxes Act
1988;
"Associated Company" the meaning ascribed by Section 416 of
the Act;
"the Auditors" the auditors for the time being of the
Company acting as experts and not as
arbitrators;
"the Code" the United States Federal Internal
Revenue Code of 1986 (as amended);
"the Company" save as provided in Rule 5.7, Octel
Corp., a Delaware corporation;
"Control" the meaning ascribed by Section 840 of
the Act;
"Date of Grant" the date on which the Directors resolve
to grant an Option under the Plan
pursuant to Rule 2;
"Dealing Day" a day on which the New York Stock
Exchange is open for business;
"the Directors" the board of directors of the Company,
or a duly authorised committee thereof;
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"Eligible Employee" any person who
(1) (a) is a director of a
Participating Company required
to work for not less than 25
hours a week (exclusive of
meal breaks); or
(b) if not a director, is
employed by a
Participating Company on
terms which require him
to work for not less than
20 hours a week
(exclusive of meal
breaks); and
(2) is not ineligible to
participate in the Plan
by virtue of paragraph 8
of Schedule 9 to the Act
(material interest in a
close company); and does
not own within the
meaning of Section
422(b)(6) of the Code to
own Shares possessing
more than ten per cent of
the total combined voting
power of all classes of
share of the Company (or
it its Parent or any of
its subsidiaries);
"Grant Period" a period of 20 days commencing on the
Dealing Day following any of:
(1) a day on which the Plan is
approved by the Inland Revenue
under the Act; or
(2) a day on which the Company
makes an announcement of its
results for any year, half
year or other period or issues
any prospectus, listing
particulars or other document
containing equivalent
information relating to
Shares; or
(3) a day on which the Directors
resolve that exceptional
circumstances have arisen
which justify the grant of
Options; or
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(4) a day on which any
announcement is made of
modifications to be made to
the Act or a day on which any
such modifications come into
force;
"Group" the Company and its Subsidiaries;
"Holding Company" in relation to the Acquiring Company, a
company falling within the definition in
Section 736 of the Companies Act 1985;
"Incentive Stock Option" an option which qualifies for relief
under Section 422 of the Code;
"Listing" the meaning ascribed in Article
4.4.1(b)(ii) of the Articles of
Association of the Company;
"Market Value" in relation to a Share on any day:
(1) if and so long as the Shares
are listed on the New York
Stock Exchange, the reported
closing price of Octel Corp.
common stock on the New York
Stock Exchange for that day,
or the last Dealing Day prior
to that day if that day is not
a Dealing Day.
(2) save as mentioned in (1)
above, its market value as
determined in accordance with
Part VIII of the Taxation of
Chargeable Gains Act 1992 and
agreed in advance with the
Shares Valuation Division of
the Inland Revenue;
"Option" a right to acquire Shares pursuant to
the Plan;
"Option Certificate" a certificate issued under Rule 2.2;
"Option Holder" a person to whom an Option has been
granted (or, as the context requires,
his personal representatives);
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"Parent" any company which is a parent
corporation of the Company within the
meaning of Section 424(e) of the Code;
"Participating Company" the Company and any other company for
the time being designated by the
Directors as a Participating Company
being a company which is both a
Subsidiary of the Company and under the
Control of the Company;
"the Plan" the Octel Corp. Company Share Option
Plan in its present form, or as from
time to time altered in accordance with
the Rules;
"Relevant Share Option Scheme" any other share option scheme (except a
Savings Related Share Option Scheme)
established by the Company or any
Associated Company;
"Rules" the Rules of the Plan and "Rule" shall
be construed accordingly;
"Savings Related Share Option Scheme" a savings related share option scheme
approved by the Inland Revenue under the
Act;
"Securities Act" the United States Securities Act of 1933
as amended;
"Share" save as provided in Rule 5.7, a share in
the Company satisfying paragraphs 10 to
14 inclusive of Schedule 9 to the Act;
"Share Price" the price per Share, as determined by
the Directors, at which an Eligible
Employee may acquire Shares in respect
of which an Option has been granted to
him, being not less than:
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(1) the Market Value of a Share on
the Date of Grant (or where in
accordance with Rule 2.1, the
Directors issue invitations to
apply for Options the Dealing
Day by reference to which the
Market Value is calculated);
or
(2) if greater and Shares are to
be subscribed, the nominal
value of a Share,
subject to any adjustment pursuant to
Rule 8.1;
"Statutory Limit" (pound)30,000 or any other limit from
time to time specified under paragraph
28 of Schedule 9 to the Act;
"Subsidiary" any company which is both a subsidiary
within the meaning ascribed by Section
736 of the Companies Act 1985 and a
subsidiary corporation within the
meaning of Section 424(f) of the Code;
References to any statutory provision are to that provision as amended or
re-enacted from time to time, and, unless the context otherwise requires, words
in the singular shall include the plural (and vice versa) and words importing
the masculine the feminine (and vice versa).
2. GRANT OF OPTIONS
2.1. Procedure for Grant of Options
a Within a Grant Period, the Directors may, at their absolute
discretion, grant Options under the Plan to Eligible Employees.
b The Directors may adopt such procedure as they think fit for granting
Options, whether by invitation to Eligible Employees to apply for
Options or by granting Options without issuing invitations, PROVIDED
THAT any documentation used in such procedure is approved in advance
by the Inland Revenue in accordance with Rule 10.2
c Where an Option is to be granted pursuant to an invitation and the
Share Price is determined at the date of the invitation, the Option
must be granted no later than the twenty-ninth day in the period
commencing with the Dealing Day by reference to which the Share Price
was calculated.
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2.2. Requirement to Issue Option Certificate
The Company shall issue to each Option Holder an Option Certificate which
shall be executed in such manner as shall take effect as a binding
contractual obligation of the Company and which shall be in such a form as
the Directors from time to time determine (subject to the approval of the
Inland Revenue). The Option Certificate shall include details of:
a the Date of Grant of the Option;
b the Share Price; and
c the number of Shares subject to the Option; and
d any date or dates determined by the Directors in accordance with Rule
3.6 upon which the Option is first exercisable in whole and/or part
and, where on any date only part is first exercisable, the number of
Shares over which such partial exercise may be made[; and
e the performance targets or conditions to be satisfied as a condition
of the exercise of the Option in accordance with Rule 3.6.]
2.3. Right to Disclaim Option
Each Eligible Employee to whom an Option is granted may by notice in
writing within 30 days of the Date of Grant disclaim in whole or in part
his rights under the Option in which case the Option shall for all purposes
be deemed never to have been granted.
2.4. Options may not be transferred
Subject to the rights of an Option Holder's personal representatives to
exercise an Option as provided in Rule 4.3, every Option shall be personal
to the Eligible Employee to whom it is granted and shall not be capable of
being transferred, assigned or charged. Each Option Certificate shall carry
a statement to this effect.
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3. CONDITIONS RELATING TO THE GRANT OF OPTIONS
3.1. Statutory Limit
Any Option granted to an Eligible Employee shall be limited and take effect
so that immediately following such grant, the aggregate Market Value of all
the Shares which he may acquire on the exercise of all options which he
then holds and which are or may become capable of being exercised and which
were granted under:
a Part A of the Plan; and
b any Relevant Share Option Scheme approved by the Inland Revenue under
the Act shall not exceed the Statutory Limit.
3.2. Interpretation of Individual Limits
a For the purposes of Rule 3.1, the Market Value of an Option shall be
taken as at its Date of Grant and in relation to options granted under
any Relevant Share Option Scheme the Market Value of an option shall
be taken as being the fair market value of the Shares subject to that
option at its date of grant determined in accordance with the Rules of
such other scheme.
b For the purposes of determining the application of the statutory Limit
in Rule 3.1, the rate of exchange for US dollar into sterling shall be
the noon fixed rate for US dollars in the Wall Street Journal on the
Date of Grant of the Option.
3.3. Calendar Year Limitation
The aggregate Market Value (determined at the Date of Grant) of Shares with
respect to which Incentive Stock Options first become exercisable by any
individual Option Holder in any calendar year shall not exceed $100,000.
3.4. Maximum Aggregate Number Of Shares
The present maximum aggregate number of Shares which may be issued under
the Plan is [ ] subject to any future increase in this limit which may be
substituted at the discretion of the Directors.
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3.5. United States Securities Act Of 1933
The grant of any Option under the Plan to any person subject to United
States securities laws shall be subject to fulfilling the requirements
(including obtaining any required approval or consent) of the provisions of
the Securities Act or of any applicable regulation or enactment. The
Options have not been, and will not be, registered under the Securities
Act, or under any other securities laws in any other jurisdiction in the
United States. Shares issued pursuant to the exercise of an Option will be
registered on Form S-8. Until so registered, any transfer of such Shares
may be restricted.
3.6. Additional Conditions
The Directors when granting any Option may in their absolute
discretion impose any conditions and limitations (additional to any
conditions and limitations contained in any other of these Rules) upon
the exercise of any Option provided that such additional conditions
and limitations shall: -
i be objective, specified at the Date of Grant and set out in full, or
details given with, the Option Certificate: and
ii be such that the right to exercise any Option after the fulfilment or
attainment of the conditions and limitations so specified shall not be
dependent upon the further discretion of any person; and
iii not be capable of amendment, variation or waiver unless an event
occurs which causes the Directors to consider that a waived, varied or
amended condition would be a fairer measure of performance and would
be no more difficult to statisfy. When such conditions or limitations
have been imposed and have ceased to be capable of being satisfied or
being satisfied in full [except as a result of an event to which
Rules: 4.7, 4.8 or 5 apply ] that Option shall lapse in whole or in
part as the case may be.
4. RIGHTS OF EXERCISE
4.1. Earliest Date of Exercise
Save as provided in Rules 4.3, 4.4 and 5 an Option may not be exercised
before whichever is the latest of:
a Listing; and
b the third anniversary of the Date of Grant; and
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c any date or dates which may have been specified in accordance with
Rule 2.2 in the relevant Option Certificate; and
any additional conditions and limitations imposed on the Option (and which
have not be waived) in accordance with Rule 3.6 have been fulfilled.
but in any event may not be exercised later than the day preceding the
tenth anniversary of the Date of Grant.
4.2. Requirement to remain in Employment
Save as provided in Rules 4.3, 4.4, 4.5 and 5, an Option may only be
exercised by an Option Holder while he is a director or employee of a
Participating Company or an Associated Company of a Participating Company.
4.3. Death of Option Holder
An Option may be exercised by the personal representatives of a deceased
Option Holder during the period of one year following the date of death.
4.4. Right to Exercise Prematurely irrespective of Additional Conditions
An Option may be exercised by an Option Holder within the period of one
year following the date on which he ceases to hold any office or employment
with a Participating Company or an Associated Company of a Participating
Company on account of:
a injury, ill-health or disability; or
b redundancy (within the meaning of the Employment Rights Act 1996); or
c the transfer of the undertaking or part-undertaking in which the
Option Holder is employed to a person other than a Participating
Company or an Associated Company of a Participating Company; or
d the Company by which the Option Holder is employed ceasing to be under
the Control of the Company.
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4.5. Right to Exercise Prematurely if Additional Conditions Achieved
If any additional conditions and limitations imposed on the Option (and
which have not been waived) in accordance with Rule 3.6 have been fulfilled
an Option may be exercised by an Option Holder within the period of one
year following the date on which he ceases to hold any office or employment
with a Participating Company or an Associated Company of a Participating
Company on account of:
a retirement at contractual retirement age including late retirement; or
b early retirement by agreement with his employer; or
c any other reason in the absolute discretion of the Directors.
4.6. Extended Exercise Period
Where an Option Holder ceases employment on account of any of the reasons
set out in Rules 4.4 or 4.5 prior to the date which is three years and six
months after the relevant Date of Grant, or the date on which he last
exercised an option under a Relevant Share Option Scheme (whichever is
later), he may in addition (at the discretion of the Directors) exercise
the Option at any time within whichever of the following periods is
applicable:
a in relation to Rule 4.4, the period which starts on the date his
employment ceases and ends six months after the earliest date on which
he could exercise the Option without incurring any liability to income
tax in consequence thereof; or
b in relation to Rule 4.5, the period which begins on the first date by
reference to which it may be established (if relevant) that the
condition specified in Rule 3.6has been satisfied and ends six months
after the earliest date on which he could exercise the Option without
incurring any liability to income tax in consequence thereof;
but in no case may an Option be exercised more than 42 months after the
date the Option Holder's employment ceased.
4.7. Transfer of Employment within Group
An Option Holder shall not be treated for the purposes of Rules 4.4, 4.5,
and 4.8as ceasing to hold an office or employment with a Participating
Company until such time as he is no longer a director or employee of any
Participating Company or an Associated Company of a Participating Company
and an Option Holder (being a woman) who ceases to be such a director or
employee by reason of pregnancy or confinement and who exercises her right
to return to work under section 79 of the
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Employment Rights Act 1996 before exercising an Option shall be treated for
those purposes as not having ceased to hold such an office or employment.
4.8. Transfer of Employment Overseas
Subject to the satisfaction of any additional conditions and limitations
imposed pursuant to Rule 3.6 if an Option Holder, whilst remaining a
director or employee of a Participating Company or an Associated Company of
a Participating Company, is transferred to work in another country and as a
result of that transfer will either
a become subject to tax on his remuneration in the country to which he
is transferred and the Directors are satisfied that as a result he
will suffer a tax disadvantage upon exercising an Option; or
b become subject to restrictions on his ability to exercise his Option
or to hold or deal in the shares or the proceeds of the sale of the
shares he may acquire on exercise of that Option by reason of or in
consequence of the securities laws or exchange control laws of the
country to which he is transferred
the Option Holder may exercise that Option in the period commencing three
months before and ending three months after the transfer takes place. If he
chooses not to exercise his Option at that time, it will not thereby lapse.
4.9. Lapse of Options
An Option shall lapse on the occurrence of the earliest of the following:
a the tenth anniversary of the Date of Grant; or
b the expiry of the period (if any) allowed for the satisfaction of any
condition of exercise specified in the Option Certificate pursuant to
Rule 3.3 without such condition having been satisfied or the date on
which it becomes apparent that any such condition has become incapable
of being satisfied; or
c subject to Rule 5.7, the expiry of any of the applicable periods
specified in Rules 4.3, 4.5, 4.6, 5.1, 5.2, 5.3, 5.4, and 5.5, but
where an Option Holder dies while time is running under Rules 4.5 or
4.6, the Option shall not lapse until the expiry of the period in Rule
4.3; or
d the date on which an Option Holder ceases to be a director or employee
of any Participating Company or any Associated Company of a
Participating Company for any reason other than his death or those
specified in Rules 4.5 and 4.6; or
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e the date on which a resolution is passed, or an order is made by
the Court, for the compulsory winding-up of the Company; or
f the date on which the Option Holder becomes bankrupt or does or
attempts or omits to do anything as a result of which he is
deprived of the legal or beneficial ownership of the Option.
4.10. Compliance with the United States Securities Laws
Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery
of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities
Act, the United States Securities Exchange Act of 1934, the rules
and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of Counsel for the
Company with respect to such compliance.
4.11. Shares to be held for Investment Purposes
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant
at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to
sell or distribute such shares if, in the opinion of Counsel for
the Company, such a representation is required in order to comply
with any of the aforementioned relevant provisions of law.
4.12. Shareholder Approval
If any amendment requiring the approval of the Company's
Shareholders is made subsequent to the first registration of any
class of equity security by the Company under Section 12 of the
Securities Exchange Act of 1934, such shareholder approval shall
be:
(a) solicited substantially in accordance with Section 14(a) of that
Act and the rules and regulations promulgated thereunder; or
(b) solicited after the Company has furnished in writing to the
holders entitled to vote substantially the same information
concerning the Plan as that which would be required by the rules
and regulations in effect under Section 14(a) of that Act at the
time such information is furnished.
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4.13. Option Holder with Material Interest
An Option may not be exercised by an Option holder at any time
when he is prohibited from such exercise by virtue of the
provisions of paragraph 8 of Schedule 9 to the Act (material
interest in a close company).
5. TAKE-OVER, RECONSTRUCTION AND AMALGAMATION AND LIQUIDATION
5.1. Take-over pursuant to Tender Offer
If any person obtains Control of the Company as a result of making either
a tender offer to acquire the whole of the Company's issued share capital
(other than any shares already owned by the Holding Company or any
Subsidiary of the Holding Company) and which is made on a condition that
if it is satisfied the offer or will have such Control, or a tender offer
to acquire all the Shares in the Company which are of the same class as
the Shares then an Option may be exercised within the period of six
months of the date on which Control is so obtained and any condition
subject to which the offer is made is satisfied (or until the expiry of
the period mentioned in Rule 5.4, if earlier).
5.2. Take-over pursuant to Scheme of Arrangement
If any person obtains Control of the Company in pursuance of a compromise
or scheme of arrangement sanctioned by the Court under legislation which
the Inland Revenue has agreed is equivalent to Section 425 of the
Companies Act 1985 then an Option may be exercised during the period
which starts on the date the Court sanctions such scheme of arrangement
and ends six months later or, if earlier, on the day immediately
preceding the date upon which the scheme shall become effective.
5.3. Scheme of Arrangement without Change of Control
If, without any person obtaining Control of the Company, the Court
sanctions a scheme of arrangement affecting the Shares under legislation
which the Inland Revenue has agreed is equivalent to Section 425 of the
Companies Act 1985 then an Option may be exercised during the period
which starts on the date the Court sanctions such scheme of arrangement
and ends six months later or, if earlier, on the day immediately
preceding the date upon which the scheme shall become effective.
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5.4. Compulsory Acquisition of Shares
If any person becomes bound or entitled to acquire Shares in the Company
under legislation which the Inland Revenue has agreed is equivalent to
Sections 428 to 430 of the Companies Act 1985 then an Option may be
exercised during any period such person remains so bound or entitled.
5.5. Voluntary Winding Up of the Company
If a resolution is passed for the voluntary winding-up of the Company, an
Option may be exercised during the period of six months starting on the
commencement of such winding-up provided that any issue of shares
pursuant to such exercise is authorised by the liquidator or the Court
(if appropriate) upon the application of and at the sole cost and expense
of the Option Holder.
5.6. Meaning of Obtaining Control
For the purpose of this Rule 5, a person shall be deemed to have obtained
Control of the Company if he and others acting in concert with him have
together obtained Control.
5.7. Rollover of Options
Notwithstanding anything to the contrary in these Rules, where any person
mentioned in Rule 5.1 is a company an Option Holder may, by agreement
with the Acquiring Company and within the appropriate period release his
Option under the Plan ("the Old Option") in consideration of the grant to
him of a new Option ("the New Option") which, within the meaning ascribed
by paragraph 15(3) of Schedule 9 to the Act, is equivalent to the Old
Option but relates to shares in a different company (whether the
Acquiring Company or some other company falling within sub-paragraph (b)
or (c) of paragraph 10 of Schedule 9 to the Act. With effect from the
date of release references in Rules 4, 5, 6, 7, 8, 9, 10 and 11 (and, in
relation to expressions used in those Rules, in Rule 1) to "the Company"
and "Shares" shall, in relation to the New Option, be construed as
references to the Acquiring Company and Shares in the Acquiring Company
or that other company as the case may be, but references to Participating
Company shall continue to be construed as if references to the Company
were references to Octel Corp..
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5.8. Meaning of "appropriate period"
For the purpose of Rule 5.7, the "appropriate period" is:
a where Rules 5.1 or 5.4 apply, the periods mentioned in those Rules
respectively; or
b where Rule 5.2 applies, the period of six months beginning with
the time when the Court sanctions the scheme of arrangement.
6. MANNER OF EXERCISE
6.1. Actions Required of the Option Holder
An Option may be exercised, in whole or in part, by the delivery to the
secretary of the Company, or his duly appointed agent, of an Option
Certificate covering not less than all the Shares over which the Option
is then to be exercised, with the notice of exercise in the prescribed
form duly completed and signed by the Option Holder together with a
remittance for the Acquisition Price payable in respect of the Shares
over which the Option is to be exercised.
6.2. Actions Required of the Company
The relevant Shares shall be allotted or transferred (as the case may be)
within 28 days following such delivery and, accordingly in cases where
Shares are to be transferred, the Company shall use its best endeavours
to ensure due transfer thereof. At the request of the Option Holder, the
Shares may be allotted or transferred (as the case may be) to a nominee
provided the Option Holder has beneficial ownership of the Shares at the
time of such allotment or transfer.
6.3. Partial Exercise
Where an Option is exercised in part the minimum number of Shares which
may be exercised is 100 Shares and the Company shall issue a balancing
Option Certificate to the Option Holder.
7. ISSUE OF SHARES
7.1. Ranking of Shares
All Shares issued pursuant to the exercise of Options under the Plan
shall as to voting, dividend, transfer and other rights (including those
arising on a liquidation) rank pari passu in all respects with the Shares
then in issue, except that they shall not rank for any dividend or other
rights declared by reference to a record date preceding the date of such
exercise.
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7.2. Admission to the New York Stock Exchange
If and so long as the Shares are listed on the New York Stock Exchange
the Company shall use its best endeavours to procure that as soon as
practicable after the allotment of any Shares pursuant to the Plan
application shall be made to the New York Stock Exchange for permission
to deal in those shares unless such application has already been made.
8. ADJUSTMENTS
8.1. General Power of Adjustment
The number of Shares over which an Option is granted and the Share Price
thereof may, subject to the prior approval of the Inland Revenue, be
adjusted in such manner as the Directors shall determine following any
capitalisation issue, subdivision, consolidation or reduction of share
capital and in respect of any discount element in any rights issue or
other variation of share capital to the intent that (as nearly as may be
possible without involving fractions of a Share or a Share Price
calculated to more than two places of decimals) the Acquisition Price
payable in respect of an Option shall remain unchanged PROVIDED that,
save as provided in Rules and 7.2, no adjustment made pursuant to this
Rule 7.1 shall have the effect of reducing the Share Price below the par
value of a Share.
8.2. Requirement to Capitalise Reserves
Any adjustment made to the Share Price of unissued Shares which would
have the effect of reducing the Share Price to less than the par value of
the Share shall only be made if and to the extent that the Directors are
authorised to capitalise from the reserves of the Company a sum equal to
the amount by which the par value of the Shares in respect of which the
Option is exercisable exceeds the adjusted Share Price. The Directors may
apply such sum in paying up such amount on such Shares so that on the
exercise of any Option in respect of which such a reduction shall have
been made, the Directors shall capitalise such sum (if any) and apply the
same in paying up such amount as aforesaid.
8.3. Notification of Option Holders
The Directors may take such steps as they may consider necessary to
notify Option Holders of any adjustments made under Rule 8.1 and to call
in, cancel, endorse, issue or re-issue any Option Certificate consequent
upon such adjustment.
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9. ADMINISTRATION
9.1. Delivery of Notices or Documents
Notices or documents required to be given to an Eligible Employee or to
an Option Holder shall either be delivered to him by hand or sent to him
by post at his last known home or business address according to the
information provided by him. Notices sent by post shall be deemed to have
been given on the day following the date of posting.
9.2. Copies of Shareholder Communications
The Company may distribute to Option Holders copies of any notice or
document sent by the Company to its shareholders generally.
9.3. Maintenance of Unissued Share Capital
The Company shall at all times either keep available sufficient unissued
Shares to satisfy the exercise of all Options which have neither lapsed
nor been exercised (taking account of any other obligations of the
Company to allot unissued Shares) or shall ensure that sufficient issued
Shares will be available to satisfy the exercise of such Options.
9.4. Directors' Power to Administer Plan
The Directors may make such regulations for the administration of the
Plan as they deem fit, provided that no regulation shall be valid to the
extent it is inconsistent with the Rules.
9.5. Directors' Decisions are Final and Conclusive
The decision of the Directors in any dispute relating to an Option, or
the due exercise thereof, or any other matter in respect of the Plan,
shall be final and conclusive.
9.6. Costs of Administering Plan
The costs of introducing and administering the Plan shall be borne by the
Company.
10. ALTERATIONS
10.1. Power to alter Rules prior to Inland Revenue approval
The Directors may, prior to approval of Part A of the Plan under the Act
by the Inland Revenue, alter the Rules of the Plan as may be necessary in
order to obtain such approval.
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10.2. Power to alter Rules following Inland Revenue approval
Subject to Rule 10.3, after the date on which Part A of the Plan is
approved by the Inland Revenue under the Act, the Directors may in their
discretion alter the Rules provided that no such alteration to Part A
shall be effective until it has been approved by the Inland Revenue.
10.3. Alteration which affects subsisting rights of Option Holders
No alteration may be made which would abrogate or adversely affect the
subsisting rights of Option Holders.
10.4. Notification to Option Holders
Written notice of any amendment made in accordance with this Rule 10
shall be given to all Option Holders.
11. GENERAL
11.1. Termination of the Plan
The Plan shall terminate on the tenth anniversary of the date on which it
is approved by the Company in general meeting or at any earlier time by
the passing of a resolution by the Directors. Termination of the Plan
shall be without prejudice to the subsisting rights of Option Holders.
11.2. No Compensation for loss of Option Rights
If an Option Holder shall cease for any reason to be in the employment of
a Participating Company or an Associated Company of a Participating
Company, he shall not be entitled, by way of compensation for loss of
office or otherwise howsoever, to any sum or any benefit to compensate
him for the loss of any right or benefit accrued or in prospect under the
Plan.
11.3. Governing Law
This Plan and all Options shall be governed by and construed in
accordance with English law.
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PART B
12. DEFINITIONS FOR PURPOSES OF PART B
12.1. Part B not Approved by Inland Revenue
This Part B of the Rules of the Plan is not approved by the Inland
Revenue under the provisions of the Act.
12.2. Terms of Part A apply except as amended
The Rules as contained in Part A of the Plan shall apply to Options
granted under this Part B unless amended in accordance with the
provisions hereof.
13. GRANT OF UNAPPROVED OPTIONS
13.1. Specification of Unapproved Option
The Directors shall specify when an Option is granted under this Part B
of the Rules of the Plan and the relevant Option Certificate shall be
written accordingly.
13.2. Modified Terms and Conditions
The Directors may determine that any Option granted under this Part B of
the Rules shall be subject to additional and/or modified terms and
conditions relating to the grant and terms of exercise as may be
necessary to comply with or take account of any securities, exchange
control or taxation laws, regulations or practice of any territory which
may have application to the relevant Eligible Employee, Option Holder or
Participating Company.
13.3. Additional Requirements
In exercising their discretion under Rule 13.2, the Directors may:
a require an Option Holder to make such declarations or take such
other action (if any) as may be required for the purpose of any
securities, taxes or other laws of any territory which may be
applicable to him at the Date of Grant or on exercise; and
b adopt any supplemental rules or procedures governing the grant or
exercise of Options as may be required for the purpose of any
securities, tax or other laws of any territory which may be
applicable to an Eligible Employee or Option Holder.
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14. CONDITIONS RELATING TO THE GRANT OF UNAPPROVED OPTIONS
Rule 3.1 of Part A shall not apply to this Part B of the Plan.
15. EXERCISE OF UNAPPROVED OPTIONS
Rule 4.12 of Part A shall not apply to Part B of the Plan.
16. DISCRETION TO PAY CASH ON EXERCISE OF AN OPTION
If an Option Holder exercises an Option the Directors may in lieu of allotting
or procuring the transfer of Shares in accordance with Rule 6.2 of Part A pay to
such Option Holder a cash sum equal to the amount by which the value of the
Shares in respect of which the notice of exercise was given (calculated as the
average of the middle market quotations on the New York Stock Exchange for the
three Dealing Days prior to the date of exercise) exceeds the Acquisition Price
of those Shares.
If payment is made pursuant to this Rule to an Option Holder, he shall have no
further rights in respect of the Shares for which the notice of exercise was
given. The Company may make any deductions in respect of such payment which it
is required to make under the laws of any territory which laws are applicable to
the Option Holder and/or his employing Participating Company.
No Option granted under Part B of the Plan will be paralleled with an Option
granted under Part A of the Plan.
17. EMPLOYMENT AND SOCIAL TAXES
The Option Holder shall indemnify the company (and, where relevant, any
Participating Company) against any tax arising in respect of the exercise of the
Option which is a liability of the Option Holder but for which such company is
required to account under the laws of any relevant territory. Such company may
recover the tax from the Option Holder in such manner as the Directors think fit
including (but without prejudice to the generality of the foregoing):-
a withholding shares when the Option is exercised and selling the same;
b deducting the necessary amount from the Option Holder's remuneration; or
c requiring the Option Holder to account directly to such company for such
tax.
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