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EXHIBIT 10.6
Confidential
EMPLOYMENT CONTRACT AMENDMENT
BETWEEN Chip Application Technologies Limited, ACN 057 883 333 of
152-162 Riley Street, East Sydney, New South Wales (EMPLOYER)
AND Justin Wescombe of 14/339 Edgecliff Road, Woollahra, NSW 2025
(EMPLOYEE).
RECITALS
A. The Employee is currently employed by the Employer.
B. The Employer has requested and the Employee has accepted that the
Employee should be assigned to an overseas location for a minimum
period of 2 years.
C. The parent company of the Employer proposes to appoint a North American
based President and CEO ("President") in the near future.
D. The Employer and the Employee have agreed to amend the Employee
Contract dated [______] ("Employment Contract") to reflect this change.
AGREEMENT
1. CONFLICTS
In any conflicts between this Agreement and the Employment Contract,
this agreement will prevail.
2. APPOINTMENT
2.1 The Employee will be employed in a senior position with line
responsibility. The Employee will retain the title and position of
Senior vice President Sales and Marketing until the President has had
an opportunity to review the management structure of the Employer and
interview appropriately qualified people (whether current employees or
otherwise) for senior management positions. At the Presidents
discretion and in consultation with the Employee, the duties and
responsibilities and title of the Employee may change but the Employee
will continue to be employed in a senior position with line
responsibility.
2.2 The employer and Employee agree that the Employee will be employed
overseas in the Location for the Term unless mutually agreed otherwise
("International Assignment")
3. SALARY AND REMUNERATION
3.1 A remuneration package (inclusive of fringe benefits tax, supannuation
and any other generally accepted employee deductions) to the value of
US$130,000 gross per annum paid monthly to an account nominated by the
Employee. All payments in shares will cease
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as at the date of this agreement. The Employee's first and last
instalments will be proportionate if necessary.
3.2 The Employee may determine the final structure of the remuneration
package as long as it does not create any increased financial liability
on the Employer.
4. OTHER BENEFITS AND ENTITLEMENTS
4.1. The Employer will be responsible for paying all costs associated with
accommodation for the Employee and family during the Term of this
International Assignment. All accommodation will to be agreed with the
President prior to commitment to rental.
4.2. The Employer will be responsible for paying all utility costs incurred
by the Employee during the Term of this International Assignment. This
includes, but is not limited to: power, water, heating, telephone (but
excluding non-business related calls), state and federal taxes and
other charges associated with the accommodation.
4.3 The Employer will be responsible for all professional insurance
indemnity, that is required and appropriate during the Term of this
International Assignment.
4.4 The Employer will be responsible for all professional fees associated
with this International Assignment both prior to, during and after the
assignment that are directly related to the International Assignment.
4.5. The Employer will be responsible for all airfares for the transfer
of the Employee and family to all Locations associated with the
International Assignment.
4.6. The Employer will provide one business class return airfare per
annum for the Employee and each member of his family from the Location
of the International Assignment to Australia or to another location for
which the total airfare does not exceed the cost of the return airfare
to Australia.
4.7. The Employer will be responsible for the cost of packing and
insurance and shipping all personal household effects to the Location
of the International Assignment and return to Australia at the end of
the Term of the International Assignment. This will include the airfare
for the return of the Employee and family from the Location of the
International Assignment to Australia at the end of the Term.
5. LOCATION
5.1 The Employer will be located initially in North America at a place to
be agreed with the President and in the event of any disagreement shall
be in close proximity to the Employers principle offices in North
America ("Location"). During the Term the Location may change by mutual
agreement between the parties and the Employer will pay any relocation
expenses associated with any relocation.
6. TERM
The Employee will be employed on International Assignment for a minimum
period of two years from the date hereof and the Expiry Date of the
Employment Contract is hereby changed to read the date 2 years from the
date of this agreement.
7. REPORTING
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7.1 The Employee will report directly to the President or such other person
nominated by the President from time to time.
7.2 In the Employment Contract where the term "Managing Director or CEO"
appears, the term "President" will be read.
8. TERMINATION
8.1 If the Employee is terminated without cause under Clause 11.2 of the
Employment Contract, the Employee will be entitled to receive
(a) severance pay of an amount equivalent to eight months at the
remuneration rate referred to in Clause 3.1 of this agreement
(b) all entitlements under Clauses 4.1 and 4.2, of this agreement
for a period of three months from the date of termination
(c) all entitlements under clause 4.7 in relation to the end of
the Term.
8.2 If the Employee terminates the agreement for any reason, the Employee
will be entitled to the benefit of Clause 4.7 of this agreement.
8.3 If for any reason the Employer assigns the Employee to a Location in
Australia, the Employee may elect to terminate the Employment Contract
by giving 3 months written notice and the Employee will be entitled to
the benefit of Clause 4.7 of this agreement.
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IN WITNESS WHEREOF the party of the first part has affixed its corporate seal,
duly attested to by the signature of its proper signing officers in that behalf
and the party of the second part has affixed his signature the day and year
first above written.
Signed for and on behalf of CHIP APPLICATION
TECHNOLOGIES LIMITED in the presence of
/s/ [SIGNATURE ILLEGIBLE]
.................................. ..................................
Company Secretary Director
9/12/99
SIGNED SEALED AND DELIVERED BY
THE EMPLOYEE in the presence of Agreed
/s/ JUSTIN WESTCOMBE
/s/ L.D. O'CONNOR 9/12/99
.................................. ..................................
Signature of Witness
L.D. O'CONNOR
..................................
Name of Witness (print)
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EMPLOYMENT CONTRACT
BETWEEN Chip Application Technologies Limited, ACN 057 883 333 of 152-162
Riley Street, East Sydney, New South Wales (EMPLOYER)
AND THE EMPLOYEE (AS DEFINED IN SCHEDULE 1).
RECITALS
A. The Employee is currently employed by the Employer
B. The Employer and Employee wish to record the terms on which the
Employee will continue to be employed by the Employer in the capacity
set out in Schedule 1 of this Deed ("Future Capacity"), which from the
Effective Date will replace the terms of the Employee's current
employment.
AGREEMENT
1. DEFINITIONS
Effective Date means the date referred to in Schedule 1 as the
effective date.
Intellectual Property Rights means all intellectual property rights
including without limitation.
a) patents, copyright, rights in circuit layouts, registered
designs, trademarks and the right to have confidential
information kept confidential, and
b) any application or right to apply for registration of any of
those rights.
Options means options over unissued shares in the capital of the
Employer to be granted on the terms set out in Schedule 2 and Schedule
3.
Total Remuneration means the salary and benefits due under Clause 4.1
from time to time.
2. APPOINTMENT
2.1 The Employee has been employed by the Employer since the Initial
Employment Date referred to in Schedule 1 and Employee benefits have
accrued since that date.
2.2 The Employer hereby confirms that the Employee is currently employed in
the capacity referred to in Schedule 1 for the Company ('Current
Capacity') and that this Employment Contract will commence on the
Effective Date and, unless terminated sooner under clause 11, or
extended under Clause 9, will conclude on the Expiry Date referred to
in Schedule 1
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3. DUTIES AND RESPONSIBILITIES
3.1 The Employee shall have the Duties and Responsibilities specified in
Schedule 1
3.2 Any alteration or modification to the Duties and Responsibilities of
the Employee specified in Schedule 1 after the Effective Date shall be
by mutual written agreement of the parties hereto.
3.3 The Employee must discharge faithfully and to the best of his
knowledge, skill and ability the Duties and Responsibilities referred
to herein in the best interests of the Employer, within normal and
reasonable business hours.
3.4 The Employee may engage in other business or accept other employment or
directorships provided that:
a) the Employee informs the Employer of the business or
employment immediately upon the engagement in the business, or
commencement of employment,
b) the business or employment in the reasonable opinion of the
Managing Director is not related to the mandate of the
Employer or any member of the Employer unless the Managing
Director has given his prior approval, and
C) the business or employment in the reasonable opinion of the
Managing Director does not interfere with the discharge of the
Employees Duties and Responsibilities under this agreement
3.5 The Employee may hold shares in other public and private companies.
3.6 The parties agree that, in order to better represent the interests of
the Employer and its members, the Employee may be an active member of
selected service, commercial, governmental, and advocacy organisations
approved by the Managing Director, in which case(s) the Employer will
provide release time and will cover expenses for membership and other
participation fees and for costs associated with attendance, according
to such terms as it may decide.
3.7 The Employee agrees that it may be necessary for the Employee to travel
overseas for the purpose of the Employers business and the Employee
agrees to such travel subject to any qualifications specified in
Schedule 1.
4. SALARY
4.1 The Employer must remunerate the Employee in accordance with Schedule
1.
4.2 On each anniversary of the Effective Date, the Employee's Total
Remuneration will be reviewed and increased by a percentage amount not
less than the percentage increase in the All Groups Consumer Price
Index for Sydney (CPI) as published by the Australian
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Bureau of Statistics for the 12-month period preceding the anniversary
of the Effective Date.
4.3 In addition to the Employee's Total Remuneration, the Employer will
grant to the Employee options in accordance with and subject to the
conditions in Schedule 2 and 3.
4.4 An increase in salary or any aspect of the salary package, once
confirmed in writing by the Managing Director, may not be rescinded or
revoked in whole or in part.
4.5 The Employee's Total Remuneration includes contributions made by the
Employer for the Employee into a superannuation fund agreed between the
parties or, if there is no agreement, into a superannuation fund
nominated by the employer, on account of the minimum level of
superannuation contributions which the Employer must make for the
Employee for the purposes of the Superannuation Guarantee
(Administration) Act 1992 and the Superannuation Guarantee Charge Act
1992 (collectively SGC Legislation) as amended from time to time
(contributions). If there is any increase in the minimum level of
superannuation contributions which the employer must make for the
purposes of the SGC Legislation, the Employee's Total Remuneration will
be increased by the amount of the additional superannuation levy
payment up to a maximum of 9% contribution in accordance with the Law.
Upon the commencement of this Contract, the Employee must do everything
necessary for the Employer to make the contributions.
4.6 Within the Employee's Total Remuneration, the Employee has the option
to contribute further amounts to superannuation and/or term life cover.
4.7 The parties agree that any further salary increases shall be on the
basis of merit as measured by the Managing Directors periodic
performance appraisal of the Employee, and the Managing Directors
decision shall be at his sole discretion and shall be at least within
the percentage range offered to other employees of the company.
5. BENEFITS AND COMPLEMENTARY ACTIVITIES
5.1 The Employer must pay the Employee's membership and subscription fees
in professional and commercial organisations relevant to the Employers
business approved by the Managing Director.
5.2 The Employer, recognising the value to the Employer of the Employee's
participation in professional and commercial organisations, courses,
conferences and meetings, encourages his participation in the same, and
will pay fees, including membership and subscription fees, and other
costs associated with membership and attendance. The Employer expects
the Employee, to attend national and/or international conferences and
will provide funding in its annual budget for this activity.
6. LEAVE
The Employer must grant the Employee an annual paid vacation of twenty
work days, with such leave to be taken at a time mutually agreed that
does not inconvenience the Employer
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or restrict the Employee in discharge of the Employee's duties and
responsibilities. In addition the employer will grant the Employee any
special leave entitlements referred to in Schedule 1 ('Special Leave').
7. EXPENSES and ALLOWANCES
7.1 The Employer must reimburse the Employee for travel, entertainment and
any other necessarily incurred and reasonable expenses, including the
cost of transportation, parking, tolls and taxes, food and lodging
incurred in performing any of the duties and responsibilities expected
of the Employee.
7.2 Where the Employee uses his own car for company business, costs will be
reimbursed on a kilometre allowance basis in accordance with the
recommended scale published from time to time by the Australian Tax
Office.
7.3 The Employer must pay for the costs of telephone calls relevant to the
Employers business or reimburse the Employee for the amount expended on
telephones.
7.4 Any reimbursement under this Part 7 shall be made by electronic
transfer to a bank account nominated by the Employee or by cheque
delivered to the Employee within 7 business days (or 20 business days
for reimbursements of less then $100) of receipt (on paper or via
e-mail or other electronic form) of completed expense forms approved by
the Employer for use by the Employee for this purpose. If any part of
the reimbursement is disputed, the undisputed amount shall be paid.
Where any reimbursements (whether disputed or not) is not paid in
accordance with this clause, the Employer will in addition pay interest
at the rate equivalent to the prevailing 90 day bank bill rate (as
published in the Australian Financial Review on the due date) plus 5%
for the period from the due date for payment to the actual payment
date.
7.5 The completed expense forms referred to in Clause 7.4 will be
accompanied by such invoices or receipts as may reasonably evidence the
expense and payment thereof by the Employee. In the case of overseas
expenses such invoices or receipts will be delivered to the Employer as
soon a practically possible following submission of the completed
expense form.
8. ILLNESS OR INJURY
8.1 Subject to Clause 8.2:
a) the Employer must grant the Employee up to 6 days paid sick
leave each year if the Employee is unable to perform the
Employee's duties due to illness or injury, and
b) untaken sick leave will accumulate from year to year to a
maximum of 12 days.
8.2 Before granting paid sick leave, where the leave exceeds three days,
the Employer may require the Employee to provide the Employer with a
certificate signed by a medical practitioner confirming the illness or
injury.
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9. RENEWAL
9.1 This Agreement terminates on the Expiry Date specified in Schedule 1,
unless: it is terminated sooner in accordance with the terms of this
Agreement or extended by mutual agreement. If this Agreement is not
renewed or any substitute agreement entered into by 1 March 2001, then
each party will be entitled to assume that the agreement will terminate
on the 30 July 2001 and that all appropriate notices have been given.
10. ASSIGNMENT OF INTELLECTUAL PROPERTY
10.1 The Employee:
a) presently assigns to the Employer all existing and future
Intellectual Property Rights in all inventions, models,
designs, drawings, plans, software, reports, proposals and
other materials created or generated by the Employee (whether
alone or with the Employer, its other employees or
contractors) for use by the Employer, and
b) acknowledges that by virtue of this clause all such existing
rights are vested in the Employer and, on their creation, all
such future rights will vest in the Employer
10.2 The Employee must do all things reasonably requested by the Employer to
enable the Employer to assure further the rights assigned under Clause
10.1.
11. TERMINATION
11.1 The Employer may terminate this agreement at any time (or just cause
without notice to the Employee, if the Employee:
a) is charged with a criminal offence, excluding a traffic
offence, or
b) breaches the Confidentiality Agreement, or
c) the Employee has committed an act of serious misconduct of a
dishonest or fraudulent nature, or
d) breaches any material provision of this Agreement and fails to
rectify such breach within 30 days of being required to do so
in writing, or
e) becomes unable to pay his debts as they became due, or
f) through illness is unable to return to duties within three (3)
months, or
g) is an "injured employee" as defined in Section 91(1) of the
Industrial Relations Act 1996 (NSW) and is not fit to perform
the Employee's duties for three months from the time the
Employee first became unfit for employment
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11.2 The Employer may terminate this agreement at any time without just
cause upon expiry of the Employer Notice Period (specified in Schedule
1) by providing written notice from the Managing Director to the
Employee.
11.3 The Employee may terminate this agreement with 30 days notice if the
Employer breaches any of its material obligations under this contract,
and has not rectified the breach within 30 days of notice of such
breach, and shall be entitled to an amount equal to the balance of the
salary and benefits due under the full term of the contract or six
months salary and benefits, whichever is the lesser.
11.4 The Employee may terminate this agreement for significant and serious
personal or family reasons by providing the Managing Director with
prior notice in writing of a minimum period specified in Schedule 1 as
the Employee Notice Period.
11.5 The Employer agrees that the rules of natural justice shall apply, in
any termination of the Employee's contract by the Employer.
11.6 This agreement may be terminated at any time by mutual agreement of the
parties.
11.7 During any period of notice referred to in this Clause 11, the Employee
must perform his duties and responsibilities under this Agreement
unless the Employer and Employee mutually agree to an alternative
arrangement.
11.8 If there is a change in control as a result of a change in shareholders
in the Employer, or any parent of the Employer such that a majority of
Directors are appointed by a controlling shareholder and the Board of
Directors implement a change in the Chief Executive Officer or Managing
Director, then the Employee may, by notice in writing within 60 days of
such events, terminate this agreement by giving 6 months notice.
12. WHAT HAPPENS AFTER TERMINATION OF EMPLOYMENT
12.1 The Employer may set off any amounts the Employee owes the Employer
against any amounts the Employer owes the Employee at the date of
termination except for amounts the Employer is not entitled by law to
set off.
12.2 The Employee must return all the Employer's property (including
property leased by the Employer) to the Employer on termination
including all written or machine readable material, software,
computers, credit cards, keys and vehicles.
12.3 The Employee's obligations under the Confidentiality Agreement continue
after termination except in respect of information that is part of the
Employee's general skill and knowledge.
12.4 The Employee must not record any Confidential Information in any form
after termination.
13. RESTRAINT ON THE EMPLOYEE'S CONDUCT
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13.1 During the restraint period of 9 months after termination of the
Employee's employment, the Employee must not
a) solicit, canvass, approach or accept any approach from any
person who was at any time during the Employee's last 12
months with the Employer, a Client of the Employer in that
part or parts of the business carried on by the Employer in
which the Employee was employed with a view to obtaining the
custom of that person in a business that is the same or
similar to the business conducted by the Employer, or
b) interfere with the relationship between the Employer and its
customers, employees or suppliers, or
c) induce or assist in the inducement of any employee,
consultant, customer, supplier or any other contractor of the
Employer to leave their employment or terminate any contract.
For the purposes of this clause 13.1, a Client of the Employee shall
mean any company or entity with whom the Employer has a signed
agreement (other than a Confidentiality Agreement) under which the
Employee has been actively involved in implementing.
13.2 The Employee acknowledges that each restriction specified in clause
13.1 is in the circumstances reasonable and necessary to protect the
Employees legitimate interests.
13.3 For the purpose of this Clause 13, the Employee acknowledges that the
definition of Employer will include any subsidiary or parent of Chip
Application Technologies Limited.
14. INDEMNITY AND INSURANCE
14.1 The Employer agrees to defend, save harmless and indemnify the Employee
from any demands, claims, suits, actions or other proceedings which may
be brought against him arising from the performance of his duties and
for any cost, loss, damage or liability arising therefrom, including
all legal fees and disbursements incurred in connection therewith.
14.2 During the term of this Agreement, and any subsequent renewal of this
Agreement, the Employer will provide the Employee appropriate insurance
cover including where applicable cover under a Directors and Officers
Liability Insurance Policy, medical,
15. GOVERNING LAW AND ARBITRATION
This Agreement is governed by the law applicable in New South Wales.
Any dispute may be decided by the Australian Commercial Disputes Centre
or equivalent body.
16. CANCELLATION OF PREVIOUS AGREEMENTS
From the Effective Date, this Agreement supersedes and takes the place
of all prior oral or written agreements made between the parties, other
than where relevant for the purposes
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of accruing long service leave and other employee benefits and confidentiality,
and any prior condition, warranty, indemnity or representation imposed, given or
made by a party.
17. WAIVER
The failure of either party at any time to insist on performance of any
provision of this Agreement is not a waiver of its right at any later
time to insist on performance of that of any other provision of this
Agreement, provided that the lack of notice does not prejudice the
other party's ability to rectify its or his performance.
18. NOTICES
Any notice which may be or is required to be given pursuant to this
Agreement shall be sufficiently given if served personally upon the
party for whom it is intended or if mailed by Certified Mail, in the
case of the Employer, to it at its head office for the time being and
in the case of the Employee, to him at his address as last shown on the
books of the Employer. The date of receipt of such notice shall be
deemed to be the date of delivery, if such notice is served personally,
and five (5) days after the date of posting if sent by prepaid
Certified Mail, except in the event of an actual or threatened, postal
disruption in which case all notices shall be delivered.
19. ALTERATION
This Agreement (including its schedules) may only be altered by
agreement in writing signed by each party.
20. THIS AGREEMENT IS CONFIDENTIAL
The terms of this Agreement and any subsequent amendments are
confidential and may not be disclosed by the Employee or the Employer
other than in a non-personalised form to any other person or company,
other than for the purpose of obtaining professional legal or
accounting advice, or as may be required by law or Australian Stock
Exchange listing or reporting requirements, without the written
approval of both parties.
21. GENERAL
21.1 Headings are for reference only and do not affect the meaning of this
Agreement.
21.2 In the event that any term of this agreement is inconsistent with or in
violation of any provision of any law of NSW or Australia, it is hereby
deemed to be amended to the extent required to avoid such inconsistency
or illegality and, if any term of this agreement is thereby annulled,
the remainder of this agreement shall remain in full force and effect.
21.3 Time shall be the essence of this Agreement.
21.4 Schedules 1, 2 and 3 annexed to this Agreement are for all purposes an
integral part of this Agreement.
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IN WITNESS WHEREOF the party of the first part has affixed its corporate seal,
duly attested to by the signature of its proper signing officers in that behalf
and the party of the second part has affixed his signature the day and year
first above written.
Signed for and on behalf OF CHIP APPLICATION
TECHNOLOGIES LIMITED in the presence of
/s/ [SIGNATURE ILLEGIBLE]
- ----------------------------------- ---------------------------------
Company Secretary Director
SIGNED SEALED AND DELIVERED BY
THE EMPLOYEE in the presence of
/s/ L.D. O'CONNOR /s/ JUSTIN WESCOMBE
- ----------------------------------- ---------------------------------
Signature of Witness 5 July 1996
/s/ L.D. O'CONNOR
- -----------------------------------
Name of Witness (print)
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EMPLOYMENT CONTRACT (CLAUSE 4.3)
SCHEDULE 3
OTHER TERMS AND CONDITIONS OF OPTIONS
The terms and conditions of the options are as follows:
1. ENTITLEMENT
The Option holder is entitled to subscribe for one fully paid ordinary
share in the capital of the Company for each Option held.
2. ISSUE PRICE
No amount is payable on issue of the Options.
3. EXERCISE PRICE
The exercise price of each Option is the exercise price referred to in
Schedule 2.
4. OPTION PERIOD
Each Option may be exercised in whole or in part at any time prior to
the Option Expiry Date set out below. Any Option that is not exercised
will automatically expire on the Option Expiry Date.
5. TRANSFERABILITY
The Options may not be transferred without the prior consent of the
Company (which consent will not be unreasonably withheld) and only in
accordance with the Articles of Association of the Company.
6. PARTICIPATION IN BONUS ISSUES AND CASH ISSUES
6.1 If the Company makes a bonus issue of shares or other securities
convertible into ordinary shares pro rata to holders of ordinary shares
(other than an issue in lieu of dividends or by way of dividend
reinvestment pursuant to any shareholder election), the Option holder
will be entitled to participate in such issue, upon exercise of all or
part of the Options on or before the books closing date for that issue,
on the same basis as the holders of ordinary shares in the capital of
the Company.
6.2 If the Company makes an offer to subscribe for cash of ordinary shares
pro rata to the holders of ordinary shares the Option holder will be
entitled to participate in such offer, upon exercise of all or part of
the Options on or before the books closing date for that offer, on the
same basis as the holders of ordinary shares in the capital of the
Company
6.3 The Company must notify the Option holder at least 12 business days
before the books closing date for determining entitlements to an offer
referred to in Clauses 6.1 or 6.2 of
a) the proposed terms of the issue of the offer, and
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b) the right to exercise his Options under Clause 6.1 or 6.2 (as
the case may be).
7. ADJUSTMENTS FOR BONUS ISSUES AND CASH ISSUES
7.1 If the Company is listed on the Australian Stock Exchange and makes an
offer for cash of ordinary shares pro rata to the holders of ordinary
shares, the exercise price of each Option shall be reduced by the value
of the theoretical rights entitlement per cum rights share (E) provided
that the exercise price of each Option shall not be reduced to less
than the nominal value of the Company" ordinary shares, where E is
calculated in accordance with the following formula:
E = P - (S + D)
-----------
N + 1
Where:
E = theoretical value of the rights entitlement attached to each share
(quoted cum rights)
P = the weighted average market price of fully paid ordinary shares of
the Company sold in the ordinary course of trading on the Australian
Stock Exchange Limited during the five trading days after the
announcement of the rights issue
S = subscription price (application money plus calls) for new shares
D = any dividends due but not yet paid on existing shares which will
not be payable in respect of new shares issued under the rights issue
N = number of cum rights shares required to be held to receive a right
to one new share
No change will be made to the number of shares to which the Option
holder is entitled.
7.2 If the Company makes a bonus issue of shares or other securities
convertible into ordinary shares pro rata to holders of ordinary shares
(other than an issue in lieu of dividends or by way of dividend
reinvestment pursuant to any shareholder election), the number of
shares issued on exercise of each Option will include the number of
bonus shares that would have been issued if the Option had been
exercised prior to the books closing date for bonus shares. No change
will be made to the exercise price.
8. RECONSTRUCTION
In the event of a reconstruction (including consolidation,
sub-division, reduction or return) of the issued capital of the
Company, the number of Options or the exercise price of Options or both
shall be reconstructed (as appropriate) in a manner which would not
result in any benefits being conferred on the Option holders which are
not conferred on shareholders (subject to the provisions with respect
to rounding of entitlements as sanctioned by the meeting of
shareholders approving the reconstruction of capital) but in all
respects the terms for the exercise of Options shall remain unchanged.
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All share allotted pursuant to the exercise of Options will, subject to
the Memorandum and Articles of Association of the Company, rank in all
respects (including rights relating to dividends) pari passu with the
existing ordinary shares of the Company on issue at date of allotment.
10. METHOD OF EXERCISE OF OPTIONS
10.1 Options may be exercised by written notice to the Secretary of the
Company. The exercise notice must specify the number of shares required
to be allotted, which number must be a multiple of 1,000 if only part
of the Options are exercised, or if the total number of Options held is
less than 1,000, then the total of all Options held must be exercised.
Options will be deemed to have been exercised on the date that the
application is lodged with the Secretary of the Company.
10.2 The Option holder must pay the exercise price in full to the Company on
the date of the exercise of the Options.
10.3 The exercise of less than all of the Option holder's Options will not
prevent the Option holder from exercising an Option in respect of the
whole or any part of the balance of the entitlement under his remaining
Options.
10.4 On exercise of the Options the Option holder must surrender his Option
certificate to the Company in respect of those Options being exercised.
10.5 If the Option holder exercises less than the total number of Options
then registered in his name:
a) The Option holder must surrender his Option certificate to the
Company, and
b) the Company must cancel that Option certificate and issue to
the holder a new Option certificate in respect of the Option
holder's unexercised Options.
10.6 Within 10 days of receipt of the application for the exercise of
Options and payment by the Option holder of the exercise price of such
Options, the Company must issue and allot to the Option holder the
number of fully paid ordinary shares in the capital of the Company
specified in the application.
10.7 If the Company is listed on the Australian Stock Exchange then it will
as soon as practicable after issue make application for the shares
issued upon exercise of Options by the Option holder to be granted
official quotation on the Australian Stock Exchange. The Options are
not to be listed on the ASX.
11. COMPULSORY ACQUISITION
If an entity ("Offeror") serves a notice on the option holder in
accordance with section 703(4) of the Corporations Law, all options,
which have not yet vested, become bested on the date that notice is
served on the option holder.
All options (including all existing options and all options that have
been vested by virtue of the preceding paragraph) will lapse on the
date 3 months after delivery of that notice.
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Unless waived by written notice from the Company, the option holder
must accept an offer to acquire all options which remain unexercised
which is delivered in accordance with section 703(4) of the
Corporations Law. This obligation is conditional on the terms offered
by the Offeror being no less favourable than the offer price paid or
payable by the Offeror in connection with the acquisition of ordinary
shares in the Company under the Offeror's takeover scheme or take-over
announcement, adjusted to reflect the offer for options rather than
ordinary shares or on terms determined by a Court as contemplated by
section 703(8) of the Corporations Law".
12. OPTION EXPIRY DATE
Subject to clause 11, the Option Expiry Date is the option expiry date
referred to in Schedule 2.
13, TAXATION
The Employee is exclusively and solely responsible for all and any tax
that may be payable as a result of the issue and or exercise of the
Options and or the sale of shares resulting from the exercise of the
Options. The Employer makes no warranty or representation in respect of
any taxation that may be applicable to the issue and or exercise of the
Options and or the sale of shares resulting from the exercise of the
Options.
14. UNEXERCISED OPTIONS
(a) This clause 14 applies to all Unexercised Options. If there is any
inconsistency between this clause and the other provisions of these
Terms and Conditions in respect of the exercise of Unexercised Options,
this clause prevails to the extent of this inconsistency.
(b) If, at the time an Unexercised Option is exercised:
i) the Company is not listed on ASX: and
ii) the Company is a subsidiary of another company (the "Parent
Company") and
iii) the Parent Company is listed on A$X or any Approved Exchange
the Company may, instead of issuing shares in the capital of the
Company, elect to have the Parent Company issue one fully paid share of
common stock in the Parent Company for each Unexercised Option held.
(c) If the Company makes the election referred to in paragraph (b):
i) in lieu of the Option holder's enticement under clause 1 to
subscribe for one fully paid ordinary share in the capital of
the Company for each Option held, the Option holder will be
issued one fully paid share of common stock of the Parent
Company for each Unexercised Option held;
ii) in lieu of paying the exercise price to the Company in
accordance wit Clause 10.2, the Option holder must pay the
full exercise price (which would have otherwise been payable
to the Company) to the Parent Company on the date of exercise
of the Unexercised Options and the Company is authorised to
pay over any such moneys received by it to the Parent Company
without further act or authority of the Option holder; and
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iii) within 10 days of receipt of the application for the exercise
of the Unexercised Options and payment by the Option holder of
the exercise price of such Options, the Parent Company must
issue to the Option holder the number of fully paid shares of
common stock of the Parent Company specified in the
application; and
iv) to avoid doubt, the Option holder has no entitlement to be
issued or allotted any shares in the capital of the Company
upon exercise of the Unexercised Options.
(d) In this Clause 14:
"Unexercised Options" means all Options that have been granted but are
unexercised
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