Exhibit 4.8
RULES
of the
FUTUREMEDIA PLC
ENTERPRISE MANAGEMENT INCENTIVE PLAN 2005
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Adopted by shareholders at the Extraordinary General Meeting
held on 28 July 2005
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MM & K Limited
1 Bengal Court
Birchin Lane
London
EC3V 9DD
Tel: 020 7283 7200
Fax: 020 7283 4119
TABLE OF CONTENTS
Clause Heading Page No.
1 DEFINITIONS AND INTERPRETATION................................1
2 GRANT OF OPTIONS..............................................2
3 INVESTOR PROTECTION - COMPANY LIMITS ON OPTIONS...............3
4 LIMITS ON INDIVIDUAL OPTION GRANTS............................3
5 VARIATION OF SHARE CAPITAL....................................4
6 ALTERATION....................................................4
7 ADMINISTRATION................................................5
RULES
OF
THE FUTUREMEDIA PLC ENTERPRISE MANAGEMENT INCENTIVE PLAN 2005
1 DEFINITIONS AND INTERPRETATION
1.1 In the Rules, including these definitions, the following words and
expressions shall, except insofar as the context otherwise requires, have
the meanings set opposite them respectively:-
"2005 Unapproved Plan" means the Futuremedia PLC 2005 Unapproved Share
Option Plan
"Auditors" means the auditors of the Company (acting as experts and not as
arbiters)
"Board" means the board of directors of the Company or a duly authorised
committee thereof
"Committed Time" has the meaning given in paragraph 29 of Schedule 14
"Company" means Futuremedia PLC (registered in England No 01616681)
"Date of Grant" means in respect of any Option the date on which it is
granted
"Eligible Employee" means a Group Employee whose Committed Time amounts to
at least 25 hours per week
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended
"Group" means the Company and its Subsidiaries and the phrase "Group
Company" shall be construed accordingly
"Group Employee" means a director or employee of any Group Company
"Market Value" means the last sale price of the Shares (which expression
shall for the purposes of this definition include American Depositary
Shares ("ADSs"), as evidenced by American Depositary Receipts ("ADRs"),
representing the Shares) as reported by the NASDAQ SmallCap Market (or any
other national or international securities exchange on which the Shares
are traded) on the relevant date or, if there is no reported sale of the
Shares on the relevant date, the last sale price for the Shares
immediately prior to the relevant date; and if the Shares are not Publicly
Traded, the value of a Share as determined by the Board
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"Option" means a right to acquire Shares granted pursuant to the Rules and
documented in an Option Agreement
"Option Agreement" means the agreement in the form (or substantially in
the form) set out in Schedule 1 documenting an Option which is entered
into by an Option Holder and the Company and which complies with the
requirements of Rule 2.3
"Option Holder" means an individual to whom an Option has been granted or,
if that individual has died, his executors or personal representatives
"Option Price means the price at which an Option is granted and as set out
in the Option Agreement
"Rules" means these rules as altered or varied from time to time
"Plan" means the Futuremedia PLC Enterprise Management Incentive Plan 2005
constituted and governed by the Rules
"Schedule 14" means schedule 14 to the Finance Act 2000
"Securities Act" means the United States Securities Act of 1933, as
amended
"Share" means fully paid ordinary shares in the capital of the Company,
provided that as the context requires the term "Shares" shall include
ADSs, as evidenced by ADRs, representing the Shares
"SIP" mean the Futuremedia PLC Share Incentive Plan 2005
"Subsidiary" means a qualifying subsidiary (within the meaning of
paragraph 15 of Schedule 14) of the Company
"Working Time" has the meaning given in paragraph 29 of Schedule 14
1.2 In these Rules, except insofar as the context otherwise requires:-
1.2.1 words denoting the singular shall include the plural and vice versa;
1.2.2 words denoting the masculine gender shall include the feminine gender; and
1.2.3 any reference to any enactment shall be construed as a reference to that
enactment as from time to time amended, extended or re-enacted.
2 GRANT OF OPTIONS
2.1 The Board may at any time and from time to time select Eligible Employees
to whom Options will be granted.
2.2 The Board shall procure that the Company enters into an Option Agreement
with each Eligible Employee selected pursuant to Rule 2.1.
2.3 Each Option Agreement shall constitute an Option to acquire Shares granted
by the Company in favour of the Eligible Employee and shall:-
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2.3.1 be signed on behalf of the Company and by the Eligible Employee;
2.3.2 specify the maximum number of Shares that can be acquired on exercise of
the Option, as determined by the Board;
2.3.3 specify the Option Price payable under the Option, as determined by the
Board;
2.3.4 contain the terms and conditions upon which the Option is granted, as
determined by the Board; and
2.3.5 unless the Board determines otherwise, comply with the requirements of
paragraphs 40 and 41 of Schedule 14.
3 INVESTOR PROTECTION - COMPANY LIMITS ON OPTIONS
3.1 No Option shall be granted pursuant to the Plan if the grant would result
in the limit specified in Rule 3.2 being contravened.
3.2 The number of Shares that may be the subject of Options under the Plan,
when aggregated with the number of Shares that may be issued under the
2005 Unapproved Plan and the SIP, shall not exceed an aggregate of
10,000,000 Shares. Shares subject to any Option that may no longer be
exercised, expires unexercised, or is reacquired, surrendered or
terminated in accordance with its terms or otherwise, shall no longer
count towards the aggregate number of Shares which have been the subject
of Options issued hereunder, and such number of Shares shall be subject to
further Option grants under the Plan.
3.3 In determining at any time whether the limit specified in Rule 3.2 has
been complied with no account shall be taken of and there shall be
disregarded in calculating the nominal value of the Shares issued or which
require to be issued upon the exercise of any Option or options, all
Shares which would have been required to be issued pursuant to any Option
or option which has lapsed or been surrendered or disclaimed.
3.4 Any reference in this Rule 3 to any or any other share option scheme shall
be construed as a reference to such schemes as have been or may be adopted
by the Company or any Subsidiary and to which Shares are subject.
4 LIMITS ON INDIVIDUAL OPTION GRANTS
4.1 No Option shall be granted pursuant to the Plan if the grant would result
in the limit specified in Rule 4.2 being contravened.
4.2 The maximum Market Value of Shares over which Options may be granted to an
Eligible Employee at any time when aggregated with the Market Value (at
their date of grant) of Shares over which Options have been granted to
that Eligible Employee previously and which remain exercisable (under this
Plan and any other share option scheme approved by the Inland Revenue
pursuant to Schedule 9 of the Income Corporation and Taxes Act 1988),
shall not exceed the higher of (pound)100,000 and four times his or her
annual rate of salary at the date of grant of such Options.
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5 VARIATION OF SHARE CAPITAL
5.1 In the event of any capitalisation issue, rights issue, open offer,
consolidation, sub-division or reduction or other variation of share
capital by the Company, the number of Shares over which Options subsist
and the Option Price for each of those Shares may, if the Board considers
it appropriate, be adjusted in such manner as the Auditors confirm in
writing to be fair and reasonable, provided that at any time when it is
intended that Options shall continue to qualify as enterprise management
incentives under Schedule 14:-
5.1.1 no adjustment shall take effect until receipt of approval from the Board
of Inland Revenue; and
5.1.2 following the adjustment the Shares continue to satisfy the conditions
specified in paragraph 38 of Schedule 14.
5.2 The Company shall promptly after any adjustment has been made pursuant to
this Rule give notice of the adjustment to the Option Holders.
6 ALTERATION
The Board may from time to time alter or add to all or any of the Rules or
any Option Agreement in such manner and to such extent as the Board shall
think fit, provided that:-
6.1 no alteration or addition to the Rules shall materially and adversely
affect the rights of an Option Holder as regards an Option granted prior
to the alteration or addition being made; and
6.2 no alteration or addition to any Option Agreement shall be made without
the written agreement of the Option Holder; and
6.3 no alteration or addition to the advantage of Option Holders or employees
shall be made to the definition of Eligible Employees, the limits on the
Shares subject to the Plan, the maximum entitlement for any Eligible
Employee or the provisions of Rule 5, without the prior approval by
ordinary resolution of the members of the Company in general meeting,
unless such alteration or addition is minor and is necessary or desirable
to benefit the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Option Holders or for the Company or for members
of the Group; and
6.4 any such alteration shall be subject to the shareholder approval
requirements under the rules of the Nasdaq Stock Market (or any other
national or international securities exchange on which the Company's
securities are traded), as applicable.
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7 ADMINISTRATION
7.1 The Plan shall be administered by the Board whose decision on all disputes
and matters concerning the interpretation of the Rules shall be final.
7.2 The cost of establishing and operating the Plan shall be borne by the
Group Companies in such proportions as the Board shall determine.
7.3 Any notice or other communication under or in connection with the Plan may
be given by the Company either personally or by post and to the Company
either personally or by post to the secretary; items sent by post shall be
pre-paid and shall be deemed to have been received 72 hours after posting.
7.4 The Company shall at all times either keep available sufficient authorised
and unissued Shares to satisfy all Options which have neither lapsed nor
been fully exercised, or shall procure that sufficient Shares are
available for transfer to satisfy all such Options.
7.5 The Plan, the Rules and all other documents relating to the Plan shall be
governed by and construed in accordance with the English Law.
7.6 No Option shall be granted under this Plan after the tenth anniversary of
its date of adoption by shareholders in general meeting
7.7 The Company has registered the Shares under the Exchange Act. Until the
Company registers the Shares issuable upon exercise of Options with the
United States Securities and Exchange Commission ("SEC") under the
Securities Act, the Shares issuable upon exercise of Options granted
pursuant to the Plan may be "restricted securities" within the meaning of
the Securities Act (or otherwise subject to restrictions on transfer under
the Securities Act) and, in which case, may not be publicly sold,
transferred or otherwise disposed of unless subsequently registered under
the Securities Act or unless an exemption from registration is then
available. Unless Shares issuable upon exercise of an Option have been
registered under the Securities Act, any certificates evidencing the
Shares (or ADSs representing Shares) will bear the following restrictive
legend:
The Shares represented by this Certificate have not been
registered under the United States Securities Act of 1933, as
amended ("Act"), or the securities laws of any other
jurisdiction, and may not be sold, transferred, pledged,
hypothecated or otherwise disposed of in any manner unless
they are registered under such Act and the securities laws of
any applicable jurisdictions or unless exemptions from such
registration are available.
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