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EXHIBIT 10.8
Confidential
SERVICES CONTRACT
BETWEEN Chip Application Technologies Limited, ACN 057 883 333 of 000-000
Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxx Xxxxx (COMPANY)
AND XXXXXXXX XXXXX of 00 Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx, XXX
00000 (THE SERVICE PROVIDER).
RECITALS
A. The Company and Service Provider wish to record the terms on which the
Service Provider will provide services to the Company in the capacity
set out in Schedule A of this Deed ("Future Capacity"), from the
Effective Date
B. It is the intention of the parties that when the Company has completed
its US restructuring, the arrangements between the parties will be
varied to comply with normal US practices,
AGREEMENT
1. DEFINITIONS
Effective Date means the date referred to in Schedule A 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
Company 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
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2.1 This Services 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 A.
3. DUTIES AND RESPONSIBILITIES
3.1 The Service Provider shall have the Duties and Responsibilities
specified in Schedule A
3.2 Any alteration or modification to the Duties and Responsibilities of
the Service Provider specified in Schedule A after the Effective Date
shall be by mutual written agreement of the parties hereto.
3.3 The Service Provider 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 Company.
3.4 The Service Provider may engage in other business or accept other
employment or directorships provided that:
a) the Service Provider informs the Company 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 Company
or any member of the Company 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
Service Providers Duties and Responsibilities under this
agreement
3.5 The Service Provider may hold shares in other public and private
companies.
3.6 The Service Provider agrees that it may be necessary for the Service
Provider to travel overseas for the purpose of the Company's business
and the Service Provider agrees to such travel.
4. SALARY
4.1 The Company must remunerate the Service Provider in accordance with the
annual fee specified in Schedule A.
4.2 On each anniversary of the Effective Date, the Service Provider's Total
Remuneration will be reviewed
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4.3 In addition to the Service Provider's annual fee and as part of the
Total Remuneration, the Company will grant to the Service Provider
options in accordance with and subject to the conditions in Schedule 2
and 3.
4.4 An increase in the annual fee or any aspect of the Total Remuneration
package, once confirmed in writing by the Managing Director, may not be
rescinded or revoked in whole or in part.
5. BENEFITS AND COMPLEMENTARY ACTIVITIES
5.1 The Company will pay the Service Provider's membership and subscription
fees in professional and commercial organizations relevant to the
Company's business approved by the Managing Director.
6. LEAVE
The Company must grant the Service Provider an annual paid vacation of
20 work days, with such leave to be taken at a time mutually agreed
that does not inconvenience the Company or restrict the Service
Provider in discharge of the Service Provider's duties and
responsibilities.
7. EXPENSES AND ALLOWANCES
7.1 The Company must reimburse the Service Provider 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 Service Provider.
7.2 Where the Service Provider uses his own car for company business, costs
will be reimbursed on a kilometer allowance basis in accordance with
the recommended scale published from time to time by the appropriate
taxation authorities.
7.3 The Company must pay for the costs of telephone calls relevant to the
Company's business or reimburse the Service Provider 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 Service Provider or by
cheque delivered to the Service Provider within 10 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 Company for use by the Service Provider for this
purpose. If any part of the reimbursement is disputed, the undisputed
amount shall be paid.
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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 Service Provider. Expense invoices
or receipts will be delivered to the Company as soon a practically
possible following submission of the completed expense form.
8. ILLNESS OR INJURY
8.1 Subject to Clause 8.2: the Company must grant the Service Provider up
to 6 days paid sick leave each year if the Service Provider is unable
to perform the Service Provider's duties due to illness or injury.
8.2 Before granting paid sick leave, where the leave exceeds three days,
the Company may require the Service Provider to provide the Company
with a certificate signed by a medical practitioner confirming the
illness or injury.
9. RENEWAL
9.1 This Agreement terminates on the Expiry Date specified in Schedule A,
unless: it is terminated sooner in accordance with the terms of this
Agreement.
10. ASSIGNMENT OF INTELLECTUAL PROPERTY
10.1 The Service Provider:
a) presently assigns to the Company all future Intellectual
Property Rights in all inventions, models, designs, drawings,
plans, software, reports, proposals and other materials
created or generated by the Service Provider (whether alone or
with the Company, its other Service Providers or contractors)
for use by the Company, and
b) acknowledges that by virtue of this clause all such rights are
vested in the Company and, on their creation, all such future
rights will vest in the Company
10.2 The Service Provider must do all things reasonably requested by the
Company to enable the Company to assure further the rights assigned
under Clause 10.1.
11. TERMINATION
11.1 The Company may terminate this agreement at any time for just cause
without notice to the Service Provider, or upon thirty days written
notice by the Managing Director to the Service Provider, if the Service
Provider:
a) is charged with a criminal offence, excluding a traffic
offence, or
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b) breaches the Confidentiality Agreement, or
c) the Service Provider 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 Service Provider" as defined in appropriate
legislation and is not fit to perform the Service Provider's
duties for three months from the time the Service Provider
first became unfit for employment
11.2 During the first 3 months of this agreement, the Company may terminate
this agreement at any time without just cause upon expiry of the
Company Notice Period (specified in Schedule A) by providing written
notice from the Managing Director to the Service Provider
11.3 The Service Provider may terminate this agreement with 30 days notice
if the Company breaches any of its material obligations under this
contract, and has not rectified the breach within 30 days of notice of
such breach.
11.4 The Service Provider 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
A as the Service Provider Notice Period.
11.5 The Company agrees that the rules of natural justice shall apply in any
termination of the Service Providers contract by the Company.
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 Service
Provider must perform his duties and responsibilities under this
Agreement unless the Company and Service Provider mutually agree to an
alternative arrangement.
12. WHAT HAPPENS AFTER TERMINATION OF EMPLOYMENT
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12.1 The Company may set off any amounts the Service Provider owes the
Company against any amounts the Company owes the Service Provider at
the date of termination except for amounts the Company is not entitled
by law to set off.
12.2 The Service Provider must return all the Company's property (including
property leased by the Company) to the Company on termination including
all written or machine readable material, software, computers, credit
cards, keys and vehicles.
12.3 The Service Provider's obligations under the Confidentiality Agreement
continue after termination except in respect of information that is
part of the Service Provider's general skill and knowledge.
12.4 The Service Provider must not record any Confidential Information in
any form after termination.
13. RESTRAINT ON THE SERVICE PROVIDER'S CONDUCT
13.1 During the restraint period of 9 months after termination of the
Service Provider's employment, the Service Provider must not
a) solicit, canvass, approach or accept any approach from any
person who was at any time during the term of this contract,
a client of the Company in that part or parts of the business
carried on by the Company in which the Service Provider 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 Company, or
b) interfere with the relationship between the Company and its
customers, contractors 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.
13.2 The Service Provider acknowledges that each restriction specified in
clause 13.1 is in the circumstances reasonable and necessary to protect
the Company's legitimate interests.
13.3 For the purpose of this Clause 13, the Service Provider acknowledges
that the definition of Company will include any parent or subsidiary of
Chip Application Technologies Limited.
14. INDEMNITY AND INSURANCE
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14.1 The Company agrees to defend, save harmless and indemnify the Service
Provider 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, other than grossly negligent or fraudulent conduct.
14.2 During the term of this Agreement, and any subsequent renewal of this
Agreement, the Company will provide the Service Provider appropriate
insurance cover including where applicable cover under a Directors and
Officers Liability Insurance Policy, medical, and similar protection.
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 of 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 or 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 Company, to it at its head office for the time being and in
the case of the Service Provider, to him at his address as last shown
on the books of the Company. 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
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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 Service Provider or the
Company 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 any 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 A, 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] /s/ [SIGNATURE ILLEGIBLE]
----------------------------------- -----------------------------------
Company Secretary Director
SIGNED SEALED AND DELIVERED by
THE SERVICE PROVIDER in the presence of
/s/ XXXXX XXXXXX XXXXX /s/ XXXXXXXX XXXXX
----------------------------------- -----------------------------------
Signature of Witness
XXXXX XXXXXX XXXXX
-----------------------------------
Name of Witness (print)
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SERVICES CONTRACT SCHEDULE A
TO BE READ IN CONJUNCTION WITH AND PART OF
THE SERVICES CONTRACT
PREAMPLE
'FUTURE CAPACITY' means Vice President CAT System Operations or other
position of equal or like status as agreed from time to time
1. DEFINITIONS
'EFFECTIVE DATE' means 9th August, 1999
2.1 'EXPIRY DATE' means the 9th August 2000 unless prior to 30" April 2000,
the Service Provider and the Company mutually agree in writing an
extension on the same terms or other terms mutually agreed by the
parties.
2.3 'DUTIES AND RESPONSIBILITIES' include the active full time management
of the development of the Company's US based operations including
research and negotiation of operational arrangements for the CAT System,
development of administration and reporting systems for operations,
budgets and accounting reporting and administration of operations,
assistance in market development of the operational infrastructure for
CAT and assistance in the management of CAT relationships with card
organisations and operation partners and suppliers
4.1 A remuneration package to the value of US$125,000 gross per annum
Annual Service Fee US$125,000
The Employee is exclusively and solely responsible for all and any tax
that may be payable on the service fee. The Company makes no warranty or
representation in respect of any taxation that may be applicable to the
annual service fee. The Service Provider will be responsible for health
and medical insurance but will be reimbursed in full by the Company.
The Service Providers fee will be paid by equal fortnightly instalments
by electronic funds transfer commencing 16th August 1999. The Service
Providers first and last instalments will be paid proportionately if
necessary.
11.2 'COMPANY NOTICE PERIOD' means is 2 months.
11.4 'SERVICE PROVIDER NOTICE PERIOD' means is 2 months.
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OPTIONS TERMS AND CONDITIONS
SCHEDULE 1 - DETAILS OF OPTION HOLDER
Xxxxxxxx Xxxxx
00 Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 XXX
SCHEDULE 2 - TERMS AND CONDITIONS OF THE OPTIONS
1. ISSUE DATE
The Issue Date is 9th August 1999
2. OPTION EXPIRY DATE AND CONDITIONS OF EXERCISE OF OPTION
In addition to the terms and conditions outlined in Schedule 3, all Options are
issued on the condition that the Option can only be exercised if the Option
holder is providing services to the Issuer, its parent or any subsidiary of the
issuer or the parent on the Services Option Exercise Entitlement Date referred
to below.
OPTION
SERVICES OPTION EXPIRY DATE
No.OF EXERCISE ENTITLEMENT OPTION EXERCISE (SEE CLAUSE 11 & 12 OF
OPTIONS DATE PRICE SCHEDULE 3)
------- -------------------- --------------- ----------------------
15000 31 December 1999 A$0.95 30 June 2001
25000 30 June 2000 A$0.95 30 June 2001
35000 31 December 2000 A$0.95 30 June 2002
35000 30 June 2001 A$0.95 30 June 2002
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SCHEDULE 3 - OTHER TERMS AND CONDITIONS OF THE OPTIONS
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.
S. 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
b) the right to exercise his Options under Clause 6.1 or 6.2 (as
the case may be).
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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's 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.
9. RANKING OF SHARES ALLOTTED ON EXERCISE OF OPTIONS
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.
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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.
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
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connection with the acquisition of ordinary shares in the Company under
the Offeror's take-over 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 earlier of
A) 5.00 PM Eastern Australian Standard Time on the day 90 days
after the Option holder ceases to provide services to the
Company, its parent or a subsidiary or
b) 5.00 PM Eastern Australian Standard Time on the option expiry
date referred to in Schedule 2.
13. TAXATION
The Option Holder 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 Issuer 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 ASX 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 entitlement 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 with 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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