DATED 3rd JUNE 1999
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THE HUNTINGDON LIFE SCIENCES GROUP
UNAPPROVED SHARE OPTION SCHEME
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INDEX
(for reference purposes only)
Rule Heading Page Number
1. DEFINITIONS AND INTERPRETATION 1
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2. GRANT OF OPTIONS 7
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3. SCHEME LIMITS 11
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4. PERSONAL LIMITS 12
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5. EXERCISE AND LAPSE OF OPTIONS 13
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6. TAKEOVERS AND LIQUIDATIONS 15
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7. VARIATION OF SHARE CAPITAL 17
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8. MANNER OF EXERCISE OF OPTIONS 17
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9. TAXATION 18
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10. ADMINISTRATION AMENDMENT AND TERMINATION 19
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SCHEDULE 1 21
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SCHEDULE 2 23
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SCHEDULE 3 24
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RULES OF THE HUNTINGDON LIFE SCIENCES GROUP
UNAPPROVED SHARE OPTION SCHEME
Adopted on 2 September 1998
and amended on 3 June 1999
1. DEFINITIONS AND INTERPRETATION
1.1 In these Rules the following words and expressions shall (except where
the context otherwise requires) have the following meanings:
"Act" the Companies Act 1985;
"Accounting Period" an accounting reference period of the
Company;
"Announcement Date" the date on which the annual or half-
yearly results of the Company are announced;
"Appropriate Period" (i) if the circumstances in Rule 6.1
apply the period of six months
beginning with the date on
which the person making the offer
has obtained Control of the Company
and any condition subject to which
the offer is made has been
satisfied;
(ii) if the circumstances in Rule 6.2
apply the period of six months
beginning with the date on
which the Reconstruction Scheme is
sanctioned by the Court;
(iii) if the circumstances in Rule 6.3
apply the period during which the
person remains bound or entitled
to acquire any shares in the Company;
"Associated Company" the same meaning as in Section 416 of
the Taxes Act;
"Auditors" the auditors for the time being of
the Company appointed pursuant to
section 384 of the Act and acting as
experts and not as arbitrators;
"Board" the Board of directors for the time
being of the Company or a duly
appointed committee thereof at
which a quorum is present;
"Company" Huntingdon Life Sciences Group
plc (registered in
England and Wales number 502370);
"Company Share Schemes" the Scheme
and any other share option
or profit sharing share
scheme of the Company or of
any Associated Company
whether or not approved by
the Inland Revenue;
"Control" the same meaning as in Section 840
of the Taxes Act and the expression
"controlled" shall be construed
accordingly;
"Date of Adoption" 2 September 1998 being the date
of adoption of this
Scheme by the Company;
"Date of Grant" in relation to any Option means
the date on which the Option is
granted or was or is to be granted
under the Scheme;
"Dealing Day" a day on which the London Stock
Exchange is open for business;
"Earnings per share" earnings per share normalised after
disregarding any exceptional or
extraordinary items as shown in the
Company's audited accounts for an
Accounting Period ("normalised
earnings per share") provided that
if in relation to any Accounting
Period the Company's audited
accounts do not contain an earnings
per share figure or if the accounting
reference date of the Company is
changed the normalised earnings
per share for an Accounting Period
determined by the Remuneration
Committee in consultation with the
Auditors or such other advisers
as the Remuneration Committee may in
its absolute discretion select;
"Eligible Participant" (a) an employee who is a director of a
Participating Company who is required
by his contract of employment to
devote
substantially the whole of his
working time to the business of the
Group; or
(b) any other employee of a
Participating Company who is
required by his contract of
employment to devote
substantially the whole of his
working time to the
business of the Group;
"Exceptional Performance an Option designated as such under
Option" Rule 2.3.4;
"Expected Retirement Date" the date
on which an Eligible
Participant is expected to
retire in accordance with
the terms of his contract
of employment with a
Participating Company;
"Founder Option" an option granted
under Rule 2.1 as
appropriate an 'A' Option,
a 'B' Option, a 'C' Option
or a 'D' Option;
"Group" the Company and any company under the
Control of the Company
"London Stock Exchange" the London Stock Exchange Limited;
"Market Value" in respect of any Share on any day
means either:
(a) (when on that day
the shares of that
class are listed
on the official
list of the London
Stock Exchange)
the middle market
quotation of such
a Share as derived
from the Daily
Official List of
the London Stock
Exchange for the
Dealing Day
immediately
preceding that
day; or
(b) in all other cases
the market value
of such a Share as
determined in
accordance with
the provisions of
part VIII of the
Taxation of
Chargeable Gains
Act 1992;
"Option" a right to subscribe for Shares
granted (or to be granted) in
accordance with these Rules and
where the context so
requires shall include a Founder
Option, an Exceptional
Performance Option and New
Options granted as
consideration for the release
of Old Options in
accordance with Rule 6;
"Option Agreement" the agreement dated 2 September
1998 and made between
the Company (1) and ▇▇▇▇▇▇ ▇ ▇▇▇▇▇(2);
"Option Holder" any person who has
been granted an Option or
where the context requires
a person becoming entitled
to an Option in consequence
of the death of an Option
Holder;
"Option Period" in respect of any
Option, other than a
Founder Option the period
between the Date of Grant
and the first date on which
the Option becomes
exercisable in accordance
with the Performance
Conditions set by the
Remuneration Committee
pursuant to Rule 2.7, 2.10;
"Participating Company" the Company and
any other company of which
the Company has Control and
which is for the time being
authorised by the
Remuneration Committee to
participate in this Scheme;
"Performance Conditions" the conditions
imposed by the Remuneration
Committee in respect of an
Option, other than a
Founder Option, pursuant to
Rule 2.7, 2.10;
"Remuneration Committee" the committee
consisting wholly or mainly
of non-executive directors
of the Company and chaired
by a non-executive director
and having formal
responsibility for the
operation of the Scheme;
"Rules" the rules of the Scheme as set out
herein and as amended from
time to time;
"Scheme" the employee share option scheme
constituted and governed by
these Rules as from time to time
amended;
"Share" an ordinary share of 5p in the
capital of the Company;
"Subscription Price" the price at which
each Share subject to an
Option may be acquired on
the exercise of that Option
being (subject to Rules 6.4
and 7) in the case of a
Founder Option 12.5 ▇▇▇▇▇
per Share and in every
other case not lower than
the higher of:
(i) the nominal value of a Share;
and
(ii)the Market Value of a Share
on the Date of ▇▇▇▇▇;
"Subsisting Option" an Option to the extent that it
has not been exercised, lapsed
or cancelled;
"Tax Liability" any liability of
the Company or any company
which Controls or is under
the Control of the Company
to account for any income
tax National Insurance
contributions or other tax
arising in relation to the
grant, exercise or other
dealing with or in relation
to an Option;
"Taxes Act" the Income and Corporation Taxes Act
1988;
"Total Remuneration" in relation to any Eligible
Participant and in any period where
that Eligible Participant is an
employee or officer of a
Participating Company the
remuneration (exclusive of
benefits in kind but for the
avoidance of doubt,
including any cash amount
paid to the Eligible
Participant) paid or payable
to that Eligible
Participant by the Participating
Company and all
Associated Companies of that
Participating Company in
that period; and
"Year of Assessment" a year beginning on any 6 April
and ending on the following 5 April.
1.2 Any reference in these Rules to any provision of any Act of Parliament
or any subordinate legislation made pursuant to any Act of Parliament
shall be deemed to be a reference to such Act of Parliament or
subordinate legislation as amended modified or re-enacted (whether
before or after the date hereof).
1.3 In these Rules words incorporating the masculine gender only include
the feminine and neuter genders and words incorporating the singular
number only include the plural and vice versa.
1.4 Rule headings are for ease of reference only and do not affect the
construction or interpretation of these Rules.
1.5 References to writing shall include typewriting printing lithography
photography and facsimile messages and other modes of reproducing words
in a legible and non-transitory form.
2. GRANT OF OPTIONS
2.1 Subject to the limitations and conditions hereinafter contained, the
Remuneration Committee shall on or as soon as reasonably practicable
after the Date of Adoption grant, without consideration four Options
each at the Subscription Price and over an equal number of Shares as
shall be determined by the Remuneration Committee to such Eligible
Participants selected at its discretion and each such Option shall be
designated as an 'A' Option, a 'B' Option, a 'C' Option and a 'D'
Option respectively provided that no Founder Option shall be granted
after 31 December 1998.
2.2 The exercise of a Founder Option shall be subject to the following
conditions:
2.2.1 the 'A' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 25 ▇▇▇▇▇ per Share;
2.2.2 the 'B' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 50 ▇▇▇▇▇ per Share;
2.2.3 the 'C' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 75 ▇▇▇▇▇ per Share; and
2.2.4 the 'D' Option shall become exercisable on the seventh
consecutive Dealing Day on which, but not until, the Market
Value of a Share is 100 ▇▇▇▇▇ per Share
provided that the Market Value of a Share on any Dealing Day before 1st
January 1999 shall be ignored in applying the above conditions and,
subject to Rules 5.4, 5.5, 5.6, a Founder Option shall not be
exercisable before the third anniversary of a Date of Grant. For the
avoidance of doubt a Founder Option shall be exercisable in accordance
with the rules of this Scheme if the condition applicable to that
Founder Option under this Rule 2.2 has been previously satisfied
regardless of the Market Value of a Share on the date on which the
Founder Option is exercised.
2.3 Subject to Rule 2.1 the limitations and conditions hereinafter
contained and unless prohibited by law the Remuneration Committee on
behalf of the Company may, in its absolute discretion, within a period
of 42 days immediately following an Announcement Date or Date of
Adoption grant without consideration Options to any number of Eligible
Participants provided that:
2.3.1 no Eligible Participant shall be entitled as of right to the
grant of an Option;
2.3.2 no Option (other than an Exceptional Performance Option) may
be granted to an Eligible Participant within 2 years preceding
his Expected Retirement Date and no Exceptional Performance
Option may be granted to an Eligible Participant within the 4
years preceding his Expected Retirement Date;
2.3.3 no Option may be granted under this Scheme after the
tenth anniversary of the Date of Adoption; and
2.3.4 an Option may be designated as an Exceptional Performance
Option and for the avoidance of doubt an Eligible Participant
may on the same day be granted two Options one of which is
designated as an Exceptional Performance Option and the other
is not.
2.4 An Option shall be granted by a resolution of the Remuneration
Committee.
2.5 Notwithstanding the provisions of Rule 2.3 the Remuneration Committee
may grant Options outside the 42 day period mentioned therein in
circumstances which the Remuneration Committee in its absolute
discretion deems sufficiently exceptional to justify the grant of
Options at that time.
2.6 An Option Holder may, within a period of twenty one days immediately
following the Date of ▇▇▇▇▇, renounce by notice in writing to the
Company his Option in respect of all or any part of the Shares subject
of the Option and in which case that Option shall be deemed never to
have been granted to the extent so renounced.
2.7 Each Option, other than a Founder Option, shall be granted so that its
exercise shall be subject to such objective conditions ("Performance
Conditions") (not inconsistent with the provisions of the Scheme ) as
the Remuneration Committee may in its absolute discretion think fit
provided that:
2.7.1 2.7.1.1 such conditions shall be designed to
ensure that the exercise of an Option is made
subject to the attainment of a significant and
sustained improvement in the underlying financial
performance of the Company during the Option
Period;
2.7.1.2 such conditions shall not be inconsistent with the
provisions of the Scheme and may be waived or
amended if an event occurs which causes the
Remuneration Committee to consider that such
Performance Conditions could not fairly or
reasonably be met, provided that any amended
conditions should be neither more difficult nor
easier to satisfy than the original Performance
Conditions were intended to be at the time of
their imposition;
2.7.1.3 such conditions shall extend over a continuous
period of at least three years; and
2.7.2 in the case of an Exceptional Performance Option, such conditions
shall have the additional condition that over five consecutive
Accounting Periods (or such number of consecutive Accounting
Periods that in aggregate consist of a period not less than 60
months if such five consecutive Accounting Periods in aggregate
consist of less than 60 months) commencing with and including the
Accounting Period current at the Date of Grant, the growth in
Earnings per Share is at lease equivalent to the growth in the
normalised earnings per share over such period of the company which
on the last day of such period is ranked at the bottom of the
companies which comprise the top quartile of the FTSE 100 Index
capable of being ranked for growth in the earnings per share over
such period as determined by the Remuneration Committee in
consultation with the Auditors or such other advisers as the
Remuneration Committee may in its absolute discretion select.
2.8 The Remuneration Committee may in its absolute discretion impose
conditions on the grant of an Option, other than a Founder Option,
restricting the number of Shares in respect of which an Option may be
exercised on any one occasion.
2.9 As soon as reasonably practicable after Options have been granted the
Board shall issue an Option certificate substantially in the form set
out in Schedule 2 in respect of each Option which shall specify:
2.9.1 the number of Shares comprised in the Option;
2.9.2 the Date of ▇▇▇▇▇;
2.9.3 the Subscription Price;
2.9.4 save in the case of a Founder Option, details of the
Performance Conditions; and
2.9.5 in the case of an Exceptional Performance Option that it has
been designated as such;
2.9.6 the last date upon which notice to exercise the Option may be
given, being not later than the day immediately preceding the
tenth anniversary of the Date of ▇▇▇▇▇.
2.10 Subject to Rules 5.4 and 5.5. each Option shall be granted so that its
exercise shall be subject to the Option Holder continuing to be an
Eligible Participant throughout the period between the Date of Grant
and the date on which the Option is exercised in accordance with the
Rules.
2.11 An Option shall be personal to the Option Holder and may not be
transferred, assigned, charged, pledged or otherwise disposed of or
dealt (other than its exercise in accordance with the Rules) with. Any
purported transfer, assignment, charge, pledge or other disposal or
dealing (other than its exercise in accordance with the Rules) with the
Option shall cause the Option to lapse forthwith and each Option
certificate shall carry a statement to this effect.
3. SCHEME LIMITS
3.1 No Option, other than a Founder Option, shall be granted if immediately
following such grant it would cause the aggregate of the number of
Shares which have been or remain to be issued on the exercise of
Options granted under the Scheme, excluding Founder Options, and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted under any other Company Share Scheme in the
preceding 10 years but excluding any rights granted under the Option
Agreement and any shares that have been issued before the Date of
Adoption upon the exercise of rights granted under any other Company
Share Scheme, to exceed such number of shares as represents the
aggregate of 10 per cent of the issued ordinary share capital of the
Company immediately prior to the Date of Grant plus 1,550,000 Shares.
3.2 No Option, other than a Founder Option, shall be granted if immediately
following such grant it would cause the aggregate of the number of
Shares which have been or remain to be issued on the exercise of
Options granted under the Scheme, excluding Founder Options, and the
number of shares of the Company which have been or remain to be issued
pursuant to rights granted in the preceding 10 years under any other
share option scheme (other than a savings related share option scheme)
but excluding any rights granted under the Option Agreement and any
shares that have been issued before the Date of Adoption upon the
exercise of rights granted under any other share option scheme (other
than any savings related share option scheme), to exceed such number of
shares as represents the aggregate of 7.5 per cent of the issued
ordinary share capital of the Company immediately prior to the Date of
Grant plus 1,550,000 Shares.
3.3 The aggregate number of Shares that may be the subject of Founder
Options granted under the Scheme and any rights granted under the
Option Agreement shall not exceed 13,000,000 Shares.
3.4 For the avoidance of doubt, where an Option lapses or has been
renounced in accordance with the Rules, the number of Shares comprised
in that Option immediately before its lapse or renunciation shall be
disregarded for the purposes of this Rule 3.
4. PERSONAL LIMITS
4.1 Save in the case of a Founder Option but subject to Rule 4.2, the
number of Shares in respect of which an Option is granted to an
Eligible Participant shall be limited, and the Option shall take effect
so and to the extent that the aggregate Market Value of the Shares he
may acquire pursuant to the exercise of that Option when added to the
aggregate Market Value of the Shares Comprised in the Subsisting
Options previously granted under the Scheme (which for the purposes of
this Rule 4.1 shall also include cancelled Options) to him and the
aggregate market value of Shares he may acquire pursuant to any other
unexercised rights obtained under any other Company Share Scheme (other
than a savings related share option scheme or a profit sharing scheme)
shall not exceed or further exceed four times the Eligible
Participant's Total Remuneration for the Year of Assessment current at
the Date of Grant or, if the Eligible Participant was not an Eligible
Participant at the beginning of that Year of Assessment, four times the
Eligible Participant's Total Remuneration for the period of twelve
months beginning with the first day during that Year of Assessment on
which he became an Eligible Participant.
4.2 The number of shares in respect of which an Exceptional Performance
Option is granted to an Eligible Participant shall be limited, and the
Exceptional Performance Option shall take effect so and to the extent
that the aggregate Market Value of the Shares he may acquire pursuant
to the exercise of that Exceptional Performance Option when added to
the aggregate Market Value of the Shares Comprised in the Subsisting
Options previously granted under the Scheme (which for the purposes of
this Rule 4.1 shall also include cancelled Options) to him and the
aggregate market value of Shares he may acquire pursuant to any other
unexercised rights obtained under any other Company Share Scheme (other
than a savings related share option scheme or a profit sharing scheme)
shall not exceed or further exceed eight times the Eligible
Participant's Total Remuneration for the Year of Assessment current at
the Date of Grant or, if the Eligible Participant was not an Eligible
Participant at the beginning of that Year of Assessment, eight times
the Eligible Participant's Total Remuneration for the period of twelve
months beginning with the first day during that Year of Assessment on
which he became an Eligible Participant.
4.3 For the purposes of this Rule 4 market value of Shares shall mean in
the case of rights granted under other Company Share Schemes the market
value of the shares subject to such rights at the time of the grant of
the right as calculated in accordance with the rules of the relevant
Company Share Scheme.
4.4 For the avoidance of doubt, where an Option lapses or has been
renounced in accordance with the Rules, the number of Shares comprised
in that Option immediately before its lapse or renunciation shall be
disregarded for the purposes of this Rule 4.
5. EXERCISE AND LAPSE OF OPTIONS
5.1 Subject to this Rule 5 and Rules 6 and 8 an Option (other than an
Exceptional Performance Option) may be exercised at any time on or
after the third anniversary and before the tenth anniversary of its
Date of Grant and an Exceptional Performance Option may be exercised at
any time on or after the fifth anniversary and before the tenth
anniversary of its Date of Grant.
5.2 An Option shall not be exercisable on or after the tenth anniversary of
its Date of Grant under any circumstances whatsoever and every
Subsisting Option shall lapse on the tenth anniversary of its Date of
Grant.
5.3 The right to exercise an Option shall terminate immediately upon the
Option Holder ceasing to be an Eligible Participant except where Rules
5.4 or 5.5 apply .
5.4 Subject to Rule 5.2 where an Option Holder dies his personal
representatives may exercise any unexercised Options held by him within
12 months of the date of death.
5.5 Where an Option Holder ceases to be an Eligible Participant:
5.5.1 by reason of:
5.5.1.1 injury, disability or pregnancy; or
5.5.1.2 redundancy;
5.5.1.3 retirement on or after the Expected Retirement
Date;
5.5.1.4 the company by which the Option Holder is
employed ceasing to be a
Participating Company; or
5.5.1.5 the transfer of the business in which the Option
Holder is employed to a person
other than a Participating Company; or
5.5.2 where the circumstances are not as described in Rules 5.5.1.1
to 5.5.1.5 and the Remuneration Committee in its absolute
discretion decides not later than 30 days after the date on
which the Option Holder ceases to be an Eligible Participant
to allow that Option Holder to exercise any Subsisting Option
then held by him
any Subsisting Option may be exercised no later than 6 months after the
date of such cessation and for the purposes of this Rule 5.5 a female
Option Holder shall not cease to be an Eligible Participant if absent
from work because of pregnancy until and upon such time as she ceases
to be entitled to exercise her right to return to work.
5.6 Save where Rules 5.4, 5.5 or, except in the case of an Exceptional
Performance Option, Rule 6 apply the exercise of any Option shall be
conditional upon the relevant Performance Conditions having been
fulfilled to the satisfaction of the Remuneration Committee or in the
case of a Founder Option, subject to the conditions of Rule 2.2.
5.7 The Company shall notify each Option Holder in writing on each occasion
that the accounts of the Company are distributed to its shareholders as
to whether or not the Performance Conditions have been satisfied in
respect of the then immediately preceding 3, or as appropriate 5 year
period.
5.8 An Option shall lapse upon the earliest occurrence of any of the
following events insofar as it has not been exercised:
5.8.1 the tenth anniversary of the Date of ▇▇▇▇▇;
5.8.2 the first anniversary of the Option ▇▇▇▇▇▇'s death;
5.8.3 the expiry of 6 months from the date on which an Option Holder
ceases to be an Eligible Participant where Rule 5.5 applies;
5.8.4 the earliest date upon which the Option is expressed to lapse
under Rule 6;
5.8.5 the date of an event specified in Rule 2.11; or
5.8.6 the Option Holder being adjudicated bankrupt.
6. TAKEOVERS AND LIQUIDATIONS
6.1 If any person obtains Control of the Company as a result of making a
general offer:
6.1.1 to acquire the whole of the issued ordinary share capital of
the Company which is made on a condition such that if it is
satisfied the person making the offer will have Control of the
Company; or
6.1.2 to acquire all the shares in the Company which are of the same
class as the Shares
then subject to the remaining provisions of this Rule 6 any Subsisting
Option may be exercised within the Appropriate Period and to the extent
that it has not been exercised by the end of the Appropriate Period the
Option shall lapse immediately upon the end of the Appropriate Period.
6.2 In the event that notice is given to the shareholders of the Company of
a resolution to approve (subject to sanction by the Court) a compromise
or arrangement proposed for the purposes of or in connection with a
scheme for the reconstruction of the Company or its amalgamation with
any other company or companies pursuant to Section 425 of the Act ("the
Reconstruction Scheme") then any Option Holder may serve notice to
exercise his Subsisting Options at any time during the Appropriate
Period and to the extent that an Option has not been exercised by the
end of the Appropriate Period it shall lapse immediately upon the end
of the Appropriate Period.
6.3 If any person becomes bound or entitled to acquire Shares in the
Company under Sections 428 to 430F of the Act then any Subsisting
Option may be exercised at any time during the Appropriate Period and
to the extent that it has not been exercised by the end of the
Appropriate Period the Option shall lapse immediately upon the end of
the Appropriate Period.
6.4 If as a result of the events specified in Rules 6.1 or 6.2 a company
has obtained Control of the Company or if a company has become bound or
entitled as mentioned in Rule 6.3 the Board shall seek the agreement of
that other company ("the Acquiring Company") or a company which has
Control over the Acquiring Company and if such agreement is obtained
each unexercised Option ("Old Option") may within the Appropriate
Period applicable to the relevant Rule be released in consideration of
the grant of a new Option ("New Option") to acquire shares in the
Acquiring Company or a company which has Control of the Acquiring
Company which satisfies the following conditions:
6.4.1 it is a right to acquire such number of such shares as has on
acquisition of the New Option an aggregate Market Value equal
to the aggregate Market Value of the Shares subject to the Old
Option on its disposal;
6.4.2 it has a subscription price per share such that the aggregate
price payable on complete exercise equals the aggregate price
which would have been payable on complete exercise of the Old
Option; and
6.4.3 it is otherwise identical in terms to the Old Option.
The New Option shall for all other purposes of this Scheme be treated
as having been acquired at the same time as the Old Option in
consideration of the release of which it is granted and where any New
Options are granted pursuant to this Rule 6.4 Rules 5, 6,7, 8 and10 and
all definitions in Rule 1 as appropriate in those Rules shall in
relation to the New Options be construed as if references to the
Company and to the Shares were references to the company whose share
capital includes shares over which the New Option has been granted and
to the shares in that company but references to a Participating Company
shall continue to be construed as if references to the Company were
references to Huntingdon Life Sciences Group plc. Where in accordance
with this Rule 6.4 Old Options are released and New Options granted the
New Options shall not be exercisable in accordance with Rules 6.1, 6.2
and 6.3 above by virtue of the event by reason of which the New Options
were granted.
6.5 In the event that notice is given to the shareholders of the Company of
a resolution to be proposed for the voluntary winding up of the Company
any Option Holder may serve notice to exercise, his Subsisting Options
at any time up to the passing of the resolution provided that any such
notice to exercise shall only be effective if the resolution is passed.
If such resolution is duly passed all Options shall, to the extent that
they have not been exercised, lapse.
6.6 For the purposes of this Rule 6 other than Rule 6.4 a person shall be
deemed to have obtained Control of a Company if he and others acting in
concert with him have together obtained Control of it.
6.7 The exercise of an Option pursuant to the preceding provisions of
this Rule 6 shall be subject to the provisions of Rule 8 below.
6.8 An Exceptional Performance Option may not be exercised under this Rule
6 unless the Performance Conditions applicable to it have been
satisfied to the satisfaction of the Remuneration Committee provided
that the growth in Earnings per Share shall be measured between the
Date of Grant of the Exceptional Performance Option and the date of the
event by virtue of which the Exceptional Performance Option becomes
exercisable under this Rule 6 and the last Earnings per Share that
shall be used for that purpose shall be the Earnings per Share for the
Accounting Period current at the date of the said event by virtue of
which the Exceptional Performance Option becomes exercisable as
determined by the Remuneration Committee in consultation with the
Auditors or such other advisers selected by the Remuneration Committee
in its absolute discretion.
7. VARIATION OF SHARE CAPITAL
In the event of any variation in the share capital of the Company by
way of capitalization or rights issue or any consolidation sub-division
or reduction of capital or otherwise by the Company the number of
Shares subject to any Option and the Subscription Price for each of
those Shares shall be adjusted by the Remuneration Committee subject
(except in the case of a capitalization) to written confirmation by the
Auditors that in their opinion such adjustment is fair and reasonable
provided that:
7.1 the aggregate amount payable on the exercise of an Option in
full is not increased; and
7.2 the Subscription Price for a Share is not reduced below its
nominal value.
8. MANNER OF EXERCISE OF OPTIONS
8.1 No Option shall be exercisable save in accordance with the then current
Model Code for Securities Transactions by Directors of Listed Companies
issued by the London Stock Exchange.
8.2 Subject to the provisions of Rule 5 and this Rule 8 an Option may be
exercised at any time in whole or in part but not unless the
Remuneration Committee otherwise permits in respect of less than 10 per
cent of the Shares the subject of the original Option unless such
smaller percentage represents all the remaining Shares under the Option
by the Option Holder or (as the case may be) his personal
representatives giving a notice of exercise to the Company
substantially in the form set out in Schedule 3 accompanied by the
appropriate payment and the relevant Option certificate and shall be
effective on the date of its receipt by the Company ("exercise date")
provided that wherever relevant the Performance Conditions shall first
have been fulfilled to the satisfaction of the Remuneration Committee.
8.3 No Option shall be capable of being quoted or dealt in on any stock
exchange.
8.4 Subject to Rules 9.2 and 9.3 Shares shall be allotted and issued
pursuant to a notice of exercise within 42 days of the exercise date
(or such date which is the later of the date on which (a) the payment
referred to in Rule 9.2 is receiving the relevant company; and (b) the
Board is satisfied that the sale referred to in Rule 9.3 has been
completed. Save for any rights determined by reference to a date
preceding the date of allotment such Shares shall rank pari passu with
the other shares of the same class in issue at the date of allotment
and will be subject to all the provisions of the Articles of
Association of the Company relating to voting, dividends, transfer or
otherwise.
8.5 When an Option is exercised only in part the balance shall remain
exercisable on the same terms as originally applied to the whole Option
and a new Option certificate representing the balance shall be issued
by the Company as soon as possible after the partial exercise.
8.6 Where relevant, within 28 days after Shares have been allotted pursuant
the exercise of an Option the Company shall make application to the
Council of the London Stock Exchange for the admission to the Official
List of the Shares allotted and issued following such exercise.
8.7 It shall be a condition of participation in the Scheme that in the
event of an Option Holder ceasing to be an Eligible Participant (for
whatever reason) he shall not be entitled to any compensation
whatsoever by reason of any termination or alteration of rights or
expectations under the Scheme whether such compensation is claimed by
way of damages for wrongful dismissal or breach of contract or for loss
of office or otherwise howsoever. Participation in this Scheme by an
Option Holder is a matter entirely separate from any pension right or
entitlement he may have and from his terms or conditions of employment
and participation in this Scheme shall in no respects whatever affect
in any way an Option Holder's pension rights or entitlement or terms or
conditions of employment.
9. TAXATION
9.1 If a Tax Liability arises in respect of an Option the Company shall be
entitled to deduct to the extent permitted by law such amount(s) from
any payment due to be made by the Company or any company which controls
or is controlled by the Company to or in respect of the Option Holder
in respect of that Option during the same calendar month or other
relevant period in which the event occurs and/ or in any subsequent
calendar month or such relevant period in order to satisfy and
discharge the Tax Liability whether or not such payment is of an income
or capital nature.
9.2 If and to the extent the Tax Liability referred to in Rule 9.1 is of
income tax which exceeds the amount from which deductions in respect
thereof can be made in any one period referred to in Rule 9.1 in
respect of the Option Holder concerned, that Option Holder shall pay or
reimburse the Company for the amount of the excess on demand or within
such period as may be specified in any written notice given by the
Company and the Company shall not be obliged to issue and allot any
Shares upon the exercise of an Option until it has received such
payment.
9.3 Where a Tax Liability arises in respect of the exercise of an Option,
the Board may, without prejudice to the Company's rights under Rule 9.1
and Rule 9.2, by written notice to the Option Holder concerned nominate
as his bare trustee any person (the "Bare Trustee") to sell such number
of Shares issued upon the exercise of the Option as may be required in
order to discharge the Tax Liability and any other liability (including
costs) connected with the said sale and the Bare Trustee shall pay an
amount equal to the Tax Liability to the Company and otherwise
discharge any other said liability to the extent that the net proceeds
from the said sale permit. The Company shall not be obliged to issue
and allot any Shares upon the exercise of an option until the said sale
has been completed to the satisfaction of the Board.
10. ADMINISTRATION AMENDMENT AND TERMINATION
10.1 The Scheme shall be administered by the Remuneration Committee whose
decision on all disputes shall be final.
10.2 The Board may from time to time make amendments to these Rules
provided that:
10.2.1 no amendment may detrimentally affect an Option
Holder as regards any Subsisting Option held by him on
the date of the amendment being made except
with the consent in writing of (a) in the case of a Founder
Option, the holder of that Founder Option and (b) in
every other case such Option Holders who,
assuming they exercise their Options in full, would thereby
become entitled to not less than three quarters in
nominal amount of all the Shares which would
fall to be allotted upon exercise in full of all Subsisting
Options; and
10.2.2 except with the prior sanction of the Company in
general meeting no such modification or variation shall
extend the class of person eligible for the grant of
Options or alter to the advantage of Option Holders
(present or future) Rules 2.1, 2.2, 2.3, 2.7, 2.10, 3, 4,
or 7 the definitions of "Eligible Participant",
"Participating Company" or "Subscription Price" except
for minor amendments to benefit the administration of the
Scheme, to comply with or take account of any proposed or
existing legislation or law or to obtain or maintain
favourable tax, exchange control or regulatory treatment
for Option Holders (present or future) or for any
Participating Company; and
10.2.3 written notice of any alteration made in accordance with
this Rule 10.2 shall be given to all Option Holders.
10.3 The cost of establishing and operating the Scheme shall be borne by the
Participating Companies in such proportions as the Board shall
determine.
10.4 The Company in general meeting or the Board may at any time resolve to
terminate this Scheme in which event no further Options shall be
granted but the provisions of this Scheme shall continue in force in
relation to Subsisting Options.
10.5 The Company shall at all times keep available sufficient authorised and
unissued Shares to satisfy the exercise to the full extent still
possible of all Options which have neither lapsed nor been fully
exercised taking account of any other obligations of the Company to
issue unissued Shares.
10.6 Any notice to be given pursuant to the terms of these Rules must be
given in writing to the party due to receive such notice at (in the
case of the Company) its registered office from time to time or (in the
case of an individual) his address as notified to the Company from time
to time. Notice must be delivered personally or sent by first class
pre-paid recorded delivery or registered post (air mail if overseas) or
by facsimile transmission and shall be deemed to be given in the case
of delivery on delivery and in the case of posting (in the absence of
evidence of earlier receipt) within 48 hours after posting (6 days if
sent by air mail) and in the case of facsimile transmission on
completion of transmission.
SCHEDULE 1
Letter of ▇▇▇▇▇
[The Company's Letterhead]
Date
To: Eligible Participant
Dear [name of Eligible Participant]
THE HUNTINGDON LIFE SCIENCES GROUP UNAPPROVED SHARE OPTION SCHEME ("the Scheme")
1 The Directors have granted you [an/four] option[s] [designated as
['A'/'B'/'C'/'D'] Option[s] [respectively] [an Exceptional Performance
Option]] over [ ] ordinary shares [each] ("Shares") in the capital of
Huntingdon Life Sciences Group plc ("the Company") under and subject to
the rules of the Scheme ("the Option") which was approved and adopted
by a written resolution of the shareholders of the Company on 199 .
[Each of your options is a Founder Option for the purposes of the
Rules.] A copy of the rules of the Scheme is enclosed herewith.
2 The subscription price per Share payable on the exercise of the Option
is [12.5]/[]p. This subscription price is subject to adjustment under
Rule 7 of the Scheme if the Company's share capital is altered or
re-organised, in specified ways.
3 An Option certificate for[each of] your Option[s] is enclosed herewith.
4 Under the rules of the Scheme ("the rules"), except in certain
circumstances the Option may not be exercised earlier than
[three]/[five] years from the Date of ▇▇▇▇▇.
5 [The Option may not be exercised unless the Performance Conditions
attached to this letter have been fulfilled to the satisfaction of the
Remuneration Committee except in certain circumstances permitted by the
rules.][Your Founder Option may not be exercised unless the Market
Value of the Shares is equal to or exceeds the relevant target price
specified in the relevant option certificate. You should refer to Rule
2.2 in connection with this.]
6 The Option shall not be exercisable save in accordance with the then
current Model Code for Security Transactions by Directors of Listed
Companies issued by the London Stock Exchange.
7 You may renounce the Option in whole or in part by signing (in the
presence of a witness) and returning this letter together with the
enclosed Option certificate to me before [date 21 days after the Date
of Grant].
Yours faithfully,
.....................
Secretary
[NOTE: Performance Conditions must be attached to this letter]
RENUNCIATION
I [PRINT NAME] hereby renounce the [Exceptional Performance] Option [in
whole]/[in respect of Shares]. I am returning with this letter the certificate
in respect of the [Exceptional Performance] Option referred to above.
SIGNED as a DEED by
------ ----
[NAME]
----
in the presence of:
Signature:
Name:
Address:
Occupation:
SCHEDULE 2
Option Certificate Number:
-------------------------------------------------------------------------------
Incorporated under the Companies Acts
Registered in England and Wales under Number [ ]
TOTAL NUMBER OF ORDINARY SHARES OF p EACH
INCLUDED IN THIS ['A'/'B'/'C'/'D']/[EXCEPTIONAL PERFORMANCE]
OPTION (number)
-------------------------------------------------------------------------------
This is to certify that (name) was granted an ['A'/'B'/'C'/'D'] Option [which
was designated as an Exceptional Performance Option] on the day of to subscribe
for ordinary shares of [ ]p each in the capital of the Company ("Shares") at a
Subscription Price of [12.5P]/[ ]per Share giving an aggregate Subscription
Price of (pound) upon the terms of the Huntingdon Life Sciences Group Unapproved
Share Option Scheme ("the scheme") ("the Option"). The Option may be exercised
only at the times and in the circumstances and manner permitted by the rules of
the Scheme and cannot be transferred, assigned, charged, pledged or otherwise
disposed of or dealt with (other than its exercise in accordance with the Rules)
with. Any purported transfer, assignment, charge, pledge or other disposal or
dealing (other than its exercise in accordance with the Rules) with shall cause
the Option to lapse forthwith.
[This ['A'/'B'/'C'/'D'] Option is subject to the conditions specified in Rule
2.2 and cannot be exercised until the Market Value of a Share is equal to or
more than 25/50/75/100 ▇▇▇▇▇.]
THE COMMON SEAL of
HUNTINGDON LIFE
SCIENCES GROUP plc
was affixed to this deed
in the presence of:
Director
Secretary
Date .........................
NOTE:
(1) A form of exercise of the Option is printed overleaf. This certificate
must be surrendered on the exercise, in whole or in part, of the Option.
(2) The number and/or description of shares covered by this Option and/or
the Subscription Price may be varied in accordance with the Rules of the
Scheme.
(3) Notice to exercise this Option must be given by [date no later than
the day before the tenth anniversary of the Date of Grant].
(4) The right to exercise this Option shall be subject to the due
satisfaction of the Performance Conditions specified on the attached sheet.
SCHEDULE 3
Form of Exercise
(TO BE PRINTED ON REVERSE OF OPTION CERTIFICATE)
PLEASE READ THE NOTES AT THE FOOT OF THIS FORM
CAREFULLY BEFORE COMPLETING IT
The Secretary
Huntingdon Life Sciences Group plc
I, the undersigned, having become entitled so to do hereby exercise the
['A'/'B'/'C'/'D'] [Exceptional Performance] Option referred to overleaf ("the
Option") in respect of Shares comprised in the Option upon the terms of the
Huntingdon Life Sciences Group Unapproved Share Option Scheme ("the Scheme") and
agree to accept the Shares to be allotted and issued pursuant to this Form of
Exercise subject to and in accordance with the Memorandum and Articles of
Association of the Company and hereby request you to place my name on the
Register of Members in respect thereof.
I enclose a remittance for (pound) being the aggregate Subscription Price
payable for the Shares in respect of which the Option is now exercised at the
Subscription Price per Share specified overleaf.
For the avoidance of doubt, I hereby agree that Rule 9 of the rules of the
Scheme may be applied by the Company and the Board at their discretion in
respect of the Option hereby exercised.
If applicable, I hereby request you to despatch a balance certificate for the
Option to subscribe for any Shares included in the Option referred to overleaf
and not exercised on this occasion, by post at my risk to the address mentioned
below.
Signature ...................................
Surname .....................................
Forename(s) .................................
Address .....................................
.............................................
Note:
(1) Although the Option referred to overleaf is personal to the holder
named overleaf it may be exercised (subject to Rule 5.6) by his
personal representative(s) if he dies while it is still capable of
exercise provided the personal representative(s) does/do so before the
expiration of twelve months from the date of the holder's death or ten
years from the date of its grant (if sooner). If there are more than
one, each of the personal representatives must sign this form.
(2) Options must be exercised in respect of whole numbers of Shares. Please
indicate the number of Shares you wish to subscribe on this occasion
which must not exceed the number of Shares comprised in the Option. In
any event you will be deemed to have exercised your rights in respect
of that whole number of Shares which can be subscribed with the moneys
represented by your remittance.
(3) The remittance should be for an amount equal to the aggregate
Subscription Price, being the Subscription Price per Share shown
overleaf, multiplied by the number of Shares applied for.
(4) Please note that before any Shares are allotted to you, any tax
liability that arises on the exercise of your Option may be required to
be satisfied by the Board.
