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EXHIBIT 10.26
CONSULTANCY AGREEMENT
This Consultancy Agreement is made on 21 August 1998 between Therapeutic
Antibodies (UK) Limited whose registered office is at Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx, XX00 0XX ("the Company") and XXXXXX X XXXXXX of
Briarwood, Nightingales Lane, Chalfont St. Xxxxx, Buckinghamshire HP8 4SR
trading as "Xxxxxx Xxxxxx Associates" ("the Consultant").
1. THE ADVICE
The Consultant has agreed with the Company on the terms set out below
that he will provide to the Company in relation to the development of
the business of the Company and its subsidiaries (the "Group") the
consultancy Advice more precisely described in Schedule 1 to this
agreement ("the Advice").
2. DURATION OF AGREEMENT
This consultancy agreement is deemed to have commenced on 8 June 1998
("the Commencement Date") and will continue until notice of termination
is given by the Company to the Consultant (not to expire before 7 June
2001) or one month's notice is given by the Consultant to the Company
at any time.
3. FEE
3.1 By way of fee for the Consultant in consideration for the provision of
the Advice under this agreement the Company hereby grants to him the
share option rights set out in the Schedule 2.
3.2 The Consultant shall submit an invoice (together with a VAT invoice if
applicable) each month summarising the Advice provided in the period
covered and any expenses to be reclaimed under Clause 3.3 below.
3.3 Subject to prior written approval of such expenses, the Company will
pay to the Consultant the amount of any reasonable expenses wholly and
necessarily incurred by him in the provision of the Advice.
3.4 The Consultant agrees not to charge any monthly fee for the first 6
months of the agreement, though expenses incurred by him on the
provision of the Advice over that period may be reclaimed.
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4. OBLIGATIONS OF THE CONSULTANT
During the currency of this agreement the Consultant shall:
4.1 provide the Advice to the Company to the best of his skill and ability
and promptly as required by the Company and in the provision of that
advice will aim always to promote and protect the interests of the
Group. The Consultant shall devote such hours to his obligations under
this Agreement as are reasonably necessary for the proper provision of
the Advice, which shall be on average around 15 hours per month.
4.2 attend the Company's head office or such other place as he is
reasonably required to attend for the proper provision of the Advice;
4.3 (it being acknowledged by the Company that the detailed provision of
the Advice is a matter for the Consultant) observe the Company's
general guidance and instruction with regard to the provision of the
Advice;
4.4 notify the Company so far as possible in advance of any periods over
which he is or will be unable to provide the Advice due to his holiday,
sickness or (subject to and in accordance with 6 below) third party
commitment;
4.5 maintain full and proper confidentiality in relation to all information
belonging to the Company or any of its clients of a confidential nature
whether oral, written or electronically recorded concerning the
business and affairs of the Company and the Group and any other
information specifically identified by the Company as confidential or
known to the Consultant as being held by the Company under a duty of
confidentiality to a third party, in either case coming to his
attention in the course of or for the purposes of his providing the
Advice;
4.6 comply properly with the requirements of all relevant legislation and
agreements relating to payment of value added tax, income and other
taxes and charges levied in respect of the Company's use of him and the
fees payable to him under this Agreement;
5. NON-EXCLUSIVITY OF SERVICE
Nothing in this Agreement will prevent the Consultant from supplying
similar consultancy services to any third party during or after the
currency of this agreement provided in all cases that such third party
supply shall not entail or be likely to lead to a breach of the
Consultant's confidentiality obligations to the Company or otherwise
interfere in any way with the full and efficient performance of the
Consultant's obligations in respect of the Advice. The Consultant shall
not supply similar consultancy services if the
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proposed appointment might affect his abilities to properly provide
advice under this Agreement or would involve him with competitors of
the Group.
6. OTHER INTERESTS
The Consultant will not accept any non-executive appointments which are
either with competitors of the Group or which will affect the
Consultant's ability to provide the Advice under this Agreement.
7. RELATIONSHIP
Nothing in this Agreement will create the relationship of agency or
partnership or employer and employee between the Company and the
Consultant.
8. ASSIGNMENT AND SUBSTITUTION
No rights under this Agreement may be assigned by the Consultant save
with the prior written consent of the Company. The Consultant may not
use any other person to provide the Advice to the Company in his place
or sub-contract it, save with the prior written consent of the Company.
9. TITLE TO WORK
The Consultant acknowledges that he shall not acquire rights or title
to any intellectual property or any Advice provided by him for the
purposes of the Company under this Agreement. The rights and title in
all Advice provided by the Consultant to the Company shall be and
remain with the Company as shall those in any documents provided to the
Consultant for the purposes of his providing the Advice and in any
notes, copies or extracts derived from those documents which the
Consultant might make in the drawing up or delivery of the Advice.
10. PROVISIONS ON TERMINATION GENERALLY
10.1 On the termination of this agreement for whatever reason the Consultant
shall;
10.1.1 deliver to the Company forthwith all property of its or any of
its clients which may then be in his possession or control,
including without limitation any records, plans, programs,
designs, specifications, samples and documentation in any form
and shall, in the case of any data held on his own computer,
erase all such data, code and programs;
10.1.2 cease to hold himself out as in any way connected with the
Company;
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10.1.3 thereafter observe the duty of confidentiality as set out in
4.5 of this Agreement notwithstanding its termination.
10.2 The Company shall have the right to terminate this agreement
immediately without payment to the Consultant (other than for any
figures by way of fee or expenses accrued due up to the date of that
termination) if the Consultant dies, becomes bankrupt, is convicted of
an indictable offense or commits any act of dishonesty in his provision
of the Advice.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of England.
12. NOTICES
12.1 Any notice or other document to be served under this agreement may, in
the case of the Company, be delivered or sent by first class post or
facsimile process to the Company as its registered office for the time
being marked for the attention of the Company Secretary and, in the
case of the Consultant may be delivered or sent by first class post to
the address set out above.
12.2 Any such notice or other document shall be deemed to have been served:
12.2.1 if delivered at the time of delivery;
12.2.2 if posted, at 10:00 a.m. on the second day (being any day
other than a Saturday, Sunday or bank holiday) ("Working Day")
after it was put into the post; or
12.2.3 if sent by facsimile process, at the expiration of two hours
after the time of despatch, if despatched before 3:00 p.m. on
any Working Day, and in any other case at 10:00 a.m. on the
Working Day following the date of despatch.
12.3 In proving such service it shall be sufficient to prove that delivery
was made or that the envelope containing such notice or other document
was properly addressed and posted as a pre-paid first class letter or
that the facsimile message was properly addressed and despatched as the
case may be.
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Signed /s/ Xxxxxx X. Xxxxx, Chief Executive Dated: 21/8/98
------------------------------------- ------
Authorised Representative of Therapeutic Antibodies (UK) Ltd
Signed /s/ X.X. Xxxxxx Dated: 21st August 1998
------------------------------------- ----------------
Consultant
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SCHEDULE I
THE ADVICE
The Advice the Consultant will provide to the Company will be in relation to the
following:
1. Conducting a detailed review of the current operations of the Company
and where appropriate the Group;
2. Devising methods for the strategic development of the Company (and the
Group) in the market place;
3. Considering the constitution of the Board and recommending changes;
4. Considering the benefits of changing the place of incorporation of the
Company and in particular of converting it to a PLC;
5. Reviewing the trading operations of the Company and recommending key
areas for change;
6. Considering and recommending improvements in the Company's cash control
function;
7. Considering and recommending improvements in the short term fund
raising activities of the Company.
Schedule 2
SHARE OPTION RIGHTS
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SCHEDULE
DEFINITIONS
In this Schedule the following words and phrases have the following meanings:
"Auditors" the auditors for the time being of the Company
(acting as experts and not as arbitrators);
"Award" the right to acquire Shares in accordance with this
Schedule to the extent that it has neither lapsed nor
been exercised;
"Board" the Board of Directors from time to time of the
Company or a duly authorised committee thereof;
"Consultancy" any contract for the provision of services by
the Consultant to any Member of the Group;
"Control" has the same meaning as in Section 840 of the Act;
"Date of Grant" 8 June 1998;
"Exercise Price" L.1 in respect of each and any exercise;
"Increased Value" on any date, the market capitalisation of the
Company on that date, less the aggregate of (a) the
market capitalisation of the Company on the Date of
Grant, and (b) any amounts received by the Company in
consideration for the issue of equity share capital
since the Date of Grant;
"Group" the Company and its Subsidiaries from time to time;
"London Stock
Exchange" the London Stock Exchange Limited;
"Market Value" on any date, the average closing mid-market
quotations of a Share as derived from the London
Stock Exchange Daily Official List on the last five
dealing days prior to that date;
"Members of the
Group" the Company or any one of its Subsidiaries from time
to time;
"Schedule" this Schedule as amended in accordance with its
provisions by the Board or by the Company in General
Meeting;
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"Share" a fully paid ordinary share in the capital of the
Company;
"Subsidiary" a company which is both under the Control of the
Company and is a subsidiary of the Company (within
the meaning of Section 736 of the Companies Act
1985);
Where the context so admits the singular shall include the plural and vice versa
and the masculine gender shall include the feminine. Any reference to a
statutory provision is to be construed as a reference to that provision as for
the time being amended or re-enacted.
1. Grant of Award
The Company hereby grants the Award to the Consultant.
2. Non-Assignability of the Award
No operative provision
3. When Awards may be exercised
3.1 Save as otherwise provided in this Schedule the Award shall be
exercisable (provided it has not lapsed) once during each of:
(a) the period of ninety days commencing on and including the
second anniversary of the Date of Grant; and,
(b) the period of ninety days commencing on and including the
third anniversary of the Date of Grant.
3.2 If before 8 June 1999 the Consultant ceases to hold a Consultancy by
reason of lawful termination (other than by reason of dishonesty or
fraud) or by reason of effluxion of time, for more than six consecutive
weeks, so as to hold no Consultancy the Award shall become, if it is
not already, exercisable and shall remain exercisable until 8 July
1999, on which date it shall lapse and shall not be capable of exercise
(or, as the case may be, further exercise).
3.3 The Award shall lapse and cease to be exercisable upon the earliest to
happen of the following:
(a) the expiry of thirty nine months from the Date of Grant
(except, for the avoidance of doubt, where the Consultant has
died before 8 June 1999 (in which case paragraph 3.2 shall
apply) or after 8 June 2000, in which case Clause 3.3(b) shall
apply);
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(b) the first anniversary of the date of death of the Consultant,
if the Consultant dies after 8 June 2000;
(c) the date upon which the Consultant ceases to hold a
Consultancy by reason of dishonesty or fraud;
(d) immediately following the exercise of the Award under Clause
3.2;
(e) the expiry of any of the periods mentioned in Clause 6
(subject to the exercise of "roll-over" rights pursuant to
Clause 6.6);
(f) immediately following any exercise that takes place following
the third anniversary of the Date of Grant.
3.4 The Consultant shall not be treated as having ceased to hold a
Consultancy for the purposes of this Clause 3 until he holds no
Consultancy.
4. Effect of Exercise of Award
4.1 On the first exercise of the Award the Consultant shall become entitled
to receive a number of Shares calculated as follows:
NS = IV x RF (the "Formula")
-------
MV
where NS is the number of Shares to which the Consultant is entitled
following exercise (subject to Clause 5.6);
IV is the Increased Value at the date of exercise;
MV is the Market Value of a Share calculated at the date of exercise;
RF is the relevant fraction calculated in accordance with Clause 4.3
below, except where the Award is exercised pursuant to Clause 6, when
it shall be 1;
and, for the avoidance of doubt, the Award shall continue to subsist
following the exercise unless Clause 3.3 applies.
4.2 On any second exercise of the Award, the number of Shares the
Consultant shall be entitled to receive shall be calculated in
accordance with Clause 4.1 above, provided that the term "Increased
Value" shall be calculated as if 9 June 2000 were substituted for the
"Date of Grant" in (a) the definition of "Increased Value"; and (b) the
definition of Relevant Fraction in Clause 4.3 (including the
calculation of Share Growth Return).
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4.3 The Relevant Fraction shall be determined by comparing the Share Growth
Return ("SGR") (calculated in accordance with the Appendix) obtained by
holders of Shares since the Date of Grant with the SGR obtained over
the same period by holders of shares in the other companies set out or
referred to in the Appendix (in each case with SGR and x calculated
according to the Appendix).
RANKING OF THE COMPANY RELEVANT FRACTION
outside first and second quartiles 0
In second quartile Between 0, where the Company
ranks at (x)and 1/10th where the
---
(2)
Company ranks at (x), increasing on
---
(4)
a straight line basis between those
positions
In first quartile 1/10th
5. Manner of exercise of Award
5.1 The Award shall be exercised by the Consultant lodging with the
Secretary of the Company at its registered office (or otherwise as may
be notified to the Consultant from time to time):
(i) a notice in such form as the Board may from time to time
prescribe; and
(ii) payment (in such manner as the Board shall direct) of L.1;
and the date of exercise of the Award shall be: (a) in the case an
Award exercised pursuant to Clause 3.2, the date of receipt by the
Company of such notice and payment, (b) in the case of an Award
exercised pursuant to Clause 3.1(a), 8 June 2000, and (c) the case of
an Award exercised pursuant to Clause 3.1(b), 8 June 2001.
5.2 Subject to the obtaining of any necessary consents from HM Treasury,
The Bank of England or other authority and to the terms of any such
consent the Board shall within thirty days of the receipt of notice
exercising the Award either cause the Company to allot and issue or
arrange for the transfer of the relevant Shares to the Award holder and
send or cause to be sent to the Award holder or his nominee (as the
case may be) a share certificate (or other evidence of title) for the
Shares in respect of which the Award is exercised.
5.3 Shares issued pursuant to this Schedule will rank pari passu in all
respects with the Shares then already in issue except that they will
not rank for any dividend or other distribution of the Company paid or
made by reference to a
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record date (being the date on which entitlement to a dividend or
distribution is fixed by reference to the Company's register of
members) falling prior to the date of exercise of the relevant Award
pursuant to Clause 5.1.
5.4 The Company shall as soon as is practicable after any allotment apply
to the London Stock Exchange for permission for Shares issued pursuant
to the exercise of an Award to be admitted to the London Stock Exchange
Official List, or apply for the listing of those Shares on any other
stock exchange on which the Shares are listed.
5.5 The Company shall maintain sufficient issued and/or unissued share
capital to satisfy the Award.
5.6 The Company may make such provision for and take such action as it
considers necessary or expedient (acting reasonably) for the
withholding or payment of any statutory deductions for which the
Consultant or the Company or the Member of the Group is accountable and
which the Company or Member of the Group is obliged to make, wherever
those taxes are imposed, provided that those taxes arise in respect of
the grant or exercise of rights over, issue, or transfer of Shares
pursuant to this Schedule including (but not limited to) the
withholding and/or sale of Shares from any issue or transfer of Shares
under the Schedule until the Consultant reimburses the Company for the
amounts of any such taxes (excluding interest or penalties) for which
the Company, the Member of the Group or the Consultant is properly
accountable.
5.7 In the event that withholding or deductions are intended to be made
pursuant to Rule 5.6, the Company shall inform the Consultant of the
intention to make such withholding or deduction and the Consultant, on
showing evidence satisfactory to the Board that the withholding or
deduction is disputed, may require that an amount of cash or a number
of shares equal in value to the amount to be withheld or deducted be
placed in an escrow account pending resolution of whether the
withholding or deduction should be made. In such case, provided that
the Consultant shall indemnify the Member of the Group in respect of
the reasonable legal costs of the dispute, the Consultant shall have
conduct of such dispute, and the Consultant shall keep the Member of
the Group informed of the progress of such dispute, provided that in
the event that the Company obtains (at its own cost) an opinion from a
mutually acceptable barrister of at least ten years standing that the
Company or the Consultant is, on the balance of probabilities, unlikely
to succeed in the dispute, the Consultant may continue with the
dispute, but shall in such case indemnify the Company in respect of all
penalties and fines accruing after the date of such opinion as well as
(for the avoidance of doubt) all legal fees incurred after the date of
such opinion.
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6. Takeovers and Liquidations
6.1 If any person obtains Control of the Company as a result of making:
(a) a general offer to acquire the whole of the issued 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
(b) a general offer to acquire the whole or the issued 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
(c) a general offer to acquire all the shares in the Company which
are of the same class as the Shares;
or otherwise then the Award may be exercised within three months of the
time when the person making the offer has obtained Control of the
Company and any condition subject to which the offer is made has been
satisfied.
6.2 If under 425 of the Companies Xxx 0000 the Court sanctions 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, or if an arrangement having similar
effect in any other jurisdiction comes into force, the Award may be
exercised within three months of the Court sanctioning the compromise
or arrangement, or the arrangement coming into force.
6.3 If any person becomes bound or entitled to acquire shares in the
Company under Sections 428 to 430F of the said Act of 1985, or under an
equivalent provision in any other jurisdiction, the Award may be
exercised at any time when the person remains so bound or entitled.
6.4 If the Company passes a resolution for voluntary winding up, or if an
arrangement having similar effect in any other jurisdiction comes into
force, the Award may be exercised within three months of the passing of
the resolution, or the arrangement coming into force.
6.5 The exercise of the Award pursuant to the preceding provisions of this
Clause 6 shall be subject to the provisions of Clauses 4.1 and 5 above.
6.6 On the occurrence of any of the circumstances set out in Clause 6.1 to
6.4, the Consultant may, during the period of exercise of the Award and
with the agreement of the acquiring company, or, as the case may be, of
the successor company to the Company or the company that continues the
business of the Company (in each case "the Relevant Company"), agree
that the Award shall
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continue notwithstanding Rule 6.7, but shall take effect over shares in
the Relevant Company or such other company as is nominated by the
Relevant Company, and the SGR figures and targets shall be recalculated
as agreed between the Consultant and the Relevant Company.
6.7 The Award shall lapse if it shall not have been exercised by the expiry
of any time limit for exercise set out in this Clause 6, whichever
shall expire first.
7. Additional Rights
7.1 This Schedule shall not form part of any contract for services between
any Member of the Group and the Consultant and the rights and
obligations of the Consultant under the terms of his Consultancy with
any Member of the Group shall not be affected by his participation in
this Schedule or any right which he may have to participate therein.
7.2 Each Member of the Group shall be entirely free to conduct its business
affairs as its sees fit without regard to any consequences under, upon
or in relation to this Schedule or the Award or the Consultant.
8. Administration and Amendment
8.1 The terms of this Schedule shall be administered under the direction of
the Board who may at any time and from time to time by resolution and
without other formality amend or augment the terms of this Schedule in
any respect provided that:
(a) no amendment shall operate to effect adversely in any way
rights already acquired by the Consultant without the consent
of the Consultant;
(b) no amendment may be made to the advantage of the Consultant
except with the prior approval of the Company in General
Meeting except for minor amendments to benefit the
administration of the Schedule and amendments to obtain and
maintain favourable tax, exchange control or regulatory
treatment for the Consultant or for any Member of the Group.
8.2 The Board shall determine any matter relating to the interpretation of
this Schedule (including the rectification of errors or mistakes or
procedures or otherwise), provided that in the event of a dispute, the
matter shall be referred to independent accountants acceptable to the
Company and the Consultant, acting as experts and not as arbitrators,
and their decision as to the matter referred, as well as to the costs
of the determination, shall be final.
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8.3 The provisions of the Company's Articles of Association for the time
being with regard to the service of notices shall apply mutatis
mutandis to any notices to be given by the Company hereunder.
8.4 The Board shall be entitled to authorise any person to execute on
behalf of the Consultant, at the request of the Consultant, any
document relating to this Award, in so far as such document is required
to be executed pursuant hereto.
8.5 The terms of this Schedule shall be governed by English Law.
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APPENDIX
SGR Calculation
The Share Growth Return ("SGR") shall be calculated over the relevant period
(being the period from the Date of Grant to the Date of Exercise of an Award)
"the Measurement Period". It assumes the purchase by a shareholder of a share on
the first day of the Measurement Period, and it comprises any increase or
decrease in the share price over that period. The Comparator Group means all
companies in the FTSE Smallcap Index other than investment trusts.
1. Calculation of SGR
(a) On the first day of the Measurement Period the shareholders
shall be assumed to have purchased on share (the "Notional
Shareholding") in each member of the Comparator Group. The
performance of each share shall be calculated over the
Measurement Period. The purchase price of the Company's shares
for this purpose shall be 71p.
(b) On the last day of the Measurement Period an average shall be
taken of the daily prices of the relevant company's shares
during the 30 calendar day period ending on that date and such
amount shall be deemed to be the sale price of a share.
(c) SGR will be calculated according to the formula:
End Value - Start Value
-----------------------
Start Value
where Start Value is the value of the relevant company at the
start of the Measurement Period (subject to paragraph 1(a));
and End Value is the value of the relevant company at the end
of the Measurement Period
and expressed as a percentage
2. Treatment of changes within the Comparator Group List
(a) In the Event that a Company ceased to trade, is acquired by
another company or is for other reasons suspended for dealing
on the London Stock Exchange it shall be deleted from the
list.
(b) In the event of a demerger within a company the Total
Shareholder Return of the original company will be calculated
as though the shares
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allocated or distributed in the new company or companies were
a distribution and invested in the original company as in 1(c)
above.
(c) On any stock split, scrip issue, discounted open offer,
sub-division, consolidation or rights issue or any other event
or circumstance of like effect occurring during the
Measurement Period, prices subsequent to the event shall be
restated as calculated by Xxxxxxxxxx-Xxxxx.
(d) An appropriate adjustment shall be made for any merger,
take-over or other change in capital. Any price adjusted to
take account of capital changes shall be calculated by
Xxxxxxxxxx-Xxxxx.
3. Compilation of SGR
As soon as practicable following the Measurement Period the SGR of each
member of the Comparator Group will be determined and ranked in
accordance with their SGR with the company having the highest SGR being
listed as number and the company with the lowest having the highest
number. In addition, the first and second quartile positions in the
list will be highlighted, as will the position of the Company within
the Comparator Group list.
The first quartile will comprise the companies ranked 1 to x
-
4
The second quartile will comprise the companies ranked x + 1 to x
- -
4 2
x is the number of companies in the Comparator Group and fractions will
be ignored.
References to a "Take-over" mean an offer as defined in the City Code
on Take-overs and Mergers ("the Code"). For the purposes of this
Schedule a "change in control" shall have occurred if a third party (or
a group of persons acting in concert for the purposes of the Code)
shall become entitled to exercise more than 50% of the voting rights
attributable to the equity share capital of the Company.
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