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EXHIBIT 4.03
DATED 10 June 1994
MICRO FOCUS GROUP PLC
- and -
MICRO FOCUS TRUSTEES LIMITED
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DEED
constituting
EMPLOYEE BENEFIT TRUST 1994
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INDEX
Clause Heading Clause Number Page Number
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INTERPRETATION 1 1
Definition 1.l 1
Statutory References 1.2 2
Clause Headings 1.3 3
References to clauses l.4 3
References to persons 1.5 3
Each Gender 1.6 3
TITLE 2 3
CONSTITUTION OF TRUSTS AND POWER TO ACCEPT
ADDITIONAL ASSETS 3 3
PRIMARY TRUSTS 4 3
Trusts 4.1 3
Trust Appointments 4.2 4
Employees' Share Schemes 4.3 4
Appointments not affecting
prior payments 4.4 4
Expiration of Trust Period 4.5 4
Dividend Waiver 4.6 5
TRUSTS IN DEFAULT OF APPOINTMENT 5 5
Application of Trust Fund 5.1 5
Accumulation of Income 5.2 5
ULTIMATE TRUSTS 6 5
REQUESTS BY THE BOARD 7 5
Board Requests 7.1 5
Obligations of the Trustees 7.2 6
POWERS, PROTECTION AND REMUNERATION
OF THE TRUSTEES 8 6
Powers 8.1 6
Protection 8.2 6
Remuneration 8.3 7
Corporate Trustees 8.4 7
Professional Trustees 8.5 7
Connected Persons 8.6 7
Commission 8.7 7
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APPOINTMENT, REMOVAL AND RETIREMENT
OF TRUSTEES 9 7
Appointment 9.1 7
Minimum Number 9.2 7
Termination 9.3 8
Retirement 9.4 8
Removal 9.5 8
Transfer of Trust Fund 9.6 8
ADMINISTRATION 10 8
VARIATION AND RECTIFICATION 11 8
PROPER LAW 12 8
Proper Law and Jurisdiction 12.1 8
Forum 12.2 9
Change of Proper Law 12.3 9
EXCLUSION OF THE COMPANY 13 9
THE FIRST SCHEDULE 10
Sub-Clause 8.1: Trustees' Powers
THE SECOND SCHEDULE 15
Sub-Clause 8.2: Trustees' Protection
THE THIRD SCHEDULE 17
Clause 10: Administration
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THIS DEED is made the 10th day of June 1994 [50p Stamp]
BETWEEN:
(1) MICRO FOCUS GROUP PLC whose registered office is at 00 Xxxx Xxxxxx
Xxxxxxxxx XX00 0XX ("the Company"); and
(2) MICRO FOCUS TRUSTEES LIMITED whose registered office is at Le Gallaise
Xxxxxxxx 00 Xxxx Xxxxxx Xx Xxxxxx Xxxxxx XX0 0XX Channel Islands ("the
Trustees" which expression shall where the context so admits include the
trustee or trustees for the time being hereof)
WHEREAS
(A) The Board has resolved that in order to enhance the profitability of the
Company's trade it is desirable to provide incentives related to the
holding of shares in the capital of the Company
(B) Accordingly, with the intention of encouraging or facilitating the holding
of shares in the Company for the purpose of enabling such incentives to be
provided, the Board has resolved to create the trusts established below
(C) The Company has paid or is about to pay to the Trustees the sum of GBP 100
(by way of gift) and it is anticipated that further monies may hereafter
be provided to the Trustees (whether by way of gift or otherwise) by the
Group Companies (as defined below)
NOW THE DEED IRREVOCABLY WITNESSETH as follows:
1. INTERPRETATION
1.1 Definitions: In this Deed:
"Beneficiary" means any individual (including an executive
director but excluding any Participator) who for
the time being is:
(a) a bona fide employee or former employee of any
Group Company; or
(b) the wife, husband, widow or widower or a child
or stepchild under the age of eighteen of any such
employee or former employee
"Board" means the Board of Directors for the time being of
the Company or a duly constituted committee
thereof or duly constituted thereby;
"Employees'
share scheme" means any scheme within the definition
contained in section 743 Companies Xxx 0000;
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"Group" means the group of companies which for the time being
comprises the Company and any body corporate which is
for the time being within the same group as the Company
within the meaning of section 207(1) Financial Services
Xxx 0000;
"Group company" means a company which is for the time being a member
of the Group;
"Interest in means any interest in Shares less than full
Shares" beneficial ownership (including without limitation an
interest in the proceeds of sale of any Shares, an
option or a right of pre-emption) and any entitlement in
respect of or right over dividends or voting rights
attached to any Shares;
"Participator" means any person in relation to the trusts established
by this Deed who for the time being falls within the
definition of "participator" for the purposes of section
13 and Part IV of the Inheritance Tax Xxx 0000, or any
person deemed to be a "settlor" hereof for the purposes
of Part XV of the Income and Corporation Taxes Act 1988
or the spouse of any such person or persons;
"Shares" means shares or debentures within the meaning of
paragraph 20(4) of Schedule 1 to the Financial Services
Xxx 0000 of or issued by any Group Company and (for the
avoidance of any doubt) shall include such shares as may
be, appropriate for the purposes of any employees' share
scheme of the Group or any Group Company from time to
time as the result of any takeover reconstruction
amalgamation or other event affecting the Group and its
shares;
"This Deed" means this trust deed as amended from time to time;
"the Trust Fund" means all Shares and monies transferred or
paid to and accepted by the Trustees as subject to the
trusts hereof and all additions thereto by way of
income, capital accretion or otherwise and the monies
for the time being representing such Shares, monies and
additions or any part or parts thereof;
"the Trust
Period" means the period of eighty years less one day commencing
with the date hereof (which period and no other shall be
the applicable perpetuity period) or such other date as
the Trustees shall by deed specify (not being a date
earlier than the date of execution of such deed Provided
That the Trust Period shall not in any event exceed the
day which is eighty years less one day after the date
hereof)
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1.2 Statutory References: Any reference to any provision of any Act
of Parliament or Statutory Instrument shall constitute a reference to the
same as modified re-enacted or extended from time to time.
1.3 Clause Headings: shall be ignored in interpretation.
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1.4 References to clauses sub-classes paragraphs and schedules are to
clauses sub-clauses paragraphs and schedules of this Deed.
1.5 References to persons shall include references to corporations
and to unincorporated associations.
1.6 Each Gender includes each other gender.
2. TITLE
The trusts hereby constituted shall be entitled and referred to as "The
Micro Focus Group Employee Benefit Trust 1994" or such other name as the
Company and the Trustees may from time to time agree in writing between
them.
3. CONSTITUTION OF TRUSTS AND POWER TO ACCEPT ADDITIONAL ASSETS
The Trustees shall stand possessed of the Trust Fund upon, with and
subject to the trusts, powers and provisions of this Deed or imposed by
law on and concerning the same and the Trustees shall have the right at
any time during the Trust Period to accept such additional money as the
Company may in its absolute discretion pay or arrange for any of the Group
to pay directly or indirectly to the Trustees.
4. PRIMARY TRUSTS
4.1 Trusts: The Trustees shall hold the Trust Fund and the income thereof:
(a) upon trust to establish, facilitate, assist, participate in
and otherwise for the purposes of any one or more
employees' share scheme(s) for the benefit of all or any
one or more, exclusive of the other or others, of the
Beneficiaries as the Trustees from time to time in their
absolute discretion determine, including (without limiting
the foregoing) acquiring, disposing of and granting rights
over Shares and Interests in Shares for the purposes of any
such scheme or schemes (whether immediately or at some
future time) in such manner and on such terms as the
Trustees from time to time think fit;
(b) subject to the preceding paragraph 4.1(a) upon such trusts
for the benefit of all or any one or more, exclusive of the
other or others, of the Beneficiaries in such shares or
proportions and at such time or times and subject to such
conditions, provisions, limitations and restrictions and
generally in such mariner in all respects as the Trustees
may in their absolute discretion at any time during the
Trust Period revocably or irrevocably decide to appoint but
so that any revocable appointment if not revoked before the
date of expiration of the Trust Period, shall become
irrevocable at that date.
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4.2 Trust Appointments: In any such appointment the Trustees may declare
that the whole or any part or parts of the capitol or the income of
the Trust Fund shall be held upon such
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trusts for any one or more of the Beneficiaries and subject to such
powers and provisions and generally inn such manner as the Trustees
shall think fit with power to appoint separate trustees of the
property of which trusts shall be so declared and to provide in such
declaration for the appointment of new or additional such separate
trustees
AND PROVIDED THAT:-
(a) all interests so created shall vest (it at all) not later
than the date of expiration of the Trust Period; and
(b) the Trustees shall be discharged from any further
responsibility for any part of the Trust Fund transferred to
any of the Beneficiaries or to such separate trustees; and
(c) such declaration may be revocable or irrevocable; and
(d) such trusts, powers and provisions may be similar or
dissimilar to those contained herein and may include,
without limitation, provisions for the accumulation of
income for any fixed, terminable or other period permitted
by law and the reservation or delegation to the Trustees or
any person or persons of the like discretions as to the
dispositions of the capital and income of that part of the
Trust Fund in respect of which any such declaration shall
be made in favour of the objects thereof as are conferred
upon the Trustees in relation to the Beneficiaries
hereunder.
4.3 Employees' Share Schemes: Without limiting the powers and
discretions of the Trustees or the provisions of this Deed, the
Trustees may make such provisions and arrangements and enter into
such agreements (in particular option agreements and agreements with
any Group Company or other person or persons in relation to any
option agreements) and otherwise conduct themselves in relation to
any Shares or other part of the Trust Fund as they in their absolute
discretion shall consider appropriate to further the objectives of
any employees' share scheme established by or at the instigation of
any Group Company for or in respect of any or all of the
Beneficiaries.
4.4 Appointments not affecting prior payments: Appointments made under
sub-clause 4.2 shall not affect any payment or application of all or
any part of the Trust Fund or the income thereof previously made
under any other power conferred by this Deed or by law.
4.5 Expiration of Trust Period: After the expiration of the Trust Period
the Trustees shall not offer any further Shares or loans to
Beneficiaries nor subscribe for or purchase any further Shares for
issue, re-sale or gift to Beneficiaries save to acquire such Shares
as are necessary to satisfy either any options over Shares
previously granted by them to Beneficiaries or any obligations
relating to any options over Shares previously granted by any Group
Company or other person or persons to Beneficiaries.
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4.6 Dividend Waiver: The Trustees shall waive their rights to receive
all but 0.001p of any dividend accruing to any Shares.
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5. TRUSTS IN DEFAULT OF APPOINTMENT
5.1 Application of Trust Fund: During the Trust Period until, subject to
and in default of any such appointment under clause 4 the Trustees
may at any time pay or apply all or any part of the capital or the
income of the Trust Fund to or for the benefit of all or any one or
more, exclusive of the other or others, of the Beneficiaries and in
such shares and proportions if more than one and in such manner
generally as the Trustees shall in their discretion think fit.
5.2 Accumulation of Income: Notwithstanding the provisions of sub-clause
5.1, at any time during the Trust Period the Trustees at their
discretion may accumulate the whole or any part of the income of the
Trust Fund by way of compound interest investing it and the
resultant income thereof in the acquisition of any investments or
other property authorised hereunder and all accumulations of income
so made shall be held as additions to the capital of the Trust Fund
for all purposes.
6. ULTIMATE TRUSTS
Subject to and in default of any appointment, payment or application
thereof and so far as not wholly disposed of for any reason whatever, at
the expiration of the Trust Period the Trustees shall stand possessed of
the Trust Fund and the income thereof UPON TRUST for all or any one or
more, exclusive of the other or others, of the Beneficiaries in such
shares and proportions if more than one and generally in such manner as,
prior to expiration of the Trust Period, the Trustees in their absolute
discretion may decide and in default of and subject to such determination
UPON TRUST for such Beneficiaries as shall be living at the expiration of
the Trust Period in equal shares absolutely and if there shall be no such
Beneficiaries then living UPON TRUST for such charitable purposes as the
Trustees shall in their absolute discretion determine.
7. REQUESTS BY THE BOARD
7.1 Board Requests: In the exercise of their powers and discretions the
Trustees shall give due consideration to, and (without limiting any
power otherwise available to them) shall have express power to act
or refrain from acting in compliance with, any request or
recommendation to them by the Board that they:
(a) offer to sell such number of Shares on such terms as the Board
requests to any Beneficiary or other person whom the Board
shall select;
(b) offer to sell such number of Shares on such terms as the Board
requests to the trustees of any other employees' share scheme
established by the Company or by any other Group Company or by
any other member of another group of companies of which the
Group for the time being forms part;
(c) offer to grant an Interest in Shares in such number of Shares
on such terms as the Board may request to any Beneficiary whom
the Board may select;
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(d) transfer by way of gift such number of Shares as the Board may
from time to time request to any Beneficiary whom the Board
may select;
(e) transfer to any Beneficiary any number of Shares in respect of
which that Beneficiary has exercised any option granted to him
by any Group Company under any employee share scheme
established or operated by any Group Company, against payment
to the Trustees of the purchase price for those Shares payable
by that Beneficiary pursuant to exercise of such option;
(f) purchase any Shares held by a Beneficiary whether pursuant to
any option to purchase the same from him granted by any person
under any such employees' share scheme or otherwise:
(g) offer to lend money or guarantee a loan on such terms as the
Board may specify to any Beneficiary whom the Board may select
for the purposes of enabling him to acquire any Shares which
may be offered to him pursuant to paragraph 7.1(a) or
otherwise;
(h) waive in whole or in part any dividend or interest which would
otherwise be or become payable upon any Shares held by the
Trustees;
(i) enter into any agreement (including any option agreement which
may require the Trustees to purchase or sell Shares) providing
for any of the foregoing.
7.2 Obligations of the Trustees: If the Board makes any request to
the Trustees as referred to in the preceding sub-clause:
(a) the Trustees shall not be obliged to comply with any such
request from the Board but if in their unfettered discretion
they do so comply they shall be deemed to have acted in
compliance with a duty imposed upon them by this Deed and not
simply in exercise or a power conferred upon them;
(b) the Trustees may transfer any Shares pursuant to this clause
only in accordance with the relevant Articles of Association
for the time being;
(c) the Trustees may transfer Shares to the trustees of any other
employees' share scheme only if such Shares are to be held on
behalf of or acquired by the transferees upon trust
exclusively for persons who include the Beneficiaries unless
such transfer is for full value;
(d) the Trustees shall incur no liability nor have any
responsibility for any loss directly or indirectly suffered by
the Trust Fund or by a Beneficiary or other person as a direct
or indirect result of complying with any such request by the
Board with which it is within the power of the Trustees to
comply.
8. POWERS, PROTECTION AND REMUNERATION OF THE TRUSTEES
8.1 Powers: The Trustees shall have the powers set out in the First
Schedule, the provisions of which shall effect as if contained
herein.
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8.2 Protection: The Trustees shall have the benefit of the protections
set out in the Second Schedule, the provisions of which shall have
effect as if contained herein.
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8.3 Remuneration: Any Trustee shall be entitled to receive and retain as
remuneration for his services hereunder such reasonable sum or sums
having regard to his duties and responsibilities notwithstanding
that he may also be an officer or employee of the Company or of any
other Group Company.
8.4 Corporate Trustees: Any corporate Trustee shall be entitled to act
as a Trustee on its usual terms and conditions in force from time to
time including (in addition to reimbursement of such company's
proper expenses, costs and other liabilities) the right to
remuneration and the incidence thereof and in addition such company
or any person connected with such company being a banker, broker,
investment adviser or engaged in any other profession, business or
trade may act in such capacity without accounting for any resultant
profit and may perform any service on behalf of the Trustees and on
the same terms as with a customer.
8.5 Professional Trustees: Any Trustee or person connected with a
Trustee who is a solicitor, accountant, stockbroker or other person
engaged in any profession, business or trade shall be entitled to
charge, be reimbursed and be paid out of the Trust Fund his usual
professional or other charges for work or business done or
transacted or time expended by him or his firm or any employee or
partner of his in the execution or otherwise in relation to the
trusts hereof, including acts which a Trustee not being in that or
any profession business or trade could have done.
8.6 Connected Persons: Nothing in this Deed shall prevent any Trustee or
any person connected with a Trustee from contracting or entering
into any financial, banking or other transaction with the Trustees
or any company or body any of whose shares or securities form part
of the Trust Fund or from being interested in any such contract or
transaction and the Trustees shall not be liable to account to any
person interested hereunder for any profit or benefit made or
derived by the Trustees thereby or in connection therewith.
8.7 Commission: None or the Trustees or any person connected with a
Trustee shall be liable to account for any commission remuneration
or other profits received by him notwithstanding that such
commission, remuneration or other profit is payable as a direct or
indirect result of any dealing with property subject to the trusts
hereof or of the exercise by him or by the Trustees of voting rights
attached to securities held by them or by any abstention from
exercising such voting rights.
9. APPOINTMENT, REMOVAL AND RETIREMENT OF TRUSTEES
9.1 Appointment: The power of appointing new or additional trustees
shall be vested in the Company and the Company may appoint a new or
additional Trustee who may be a director of the Company or which may
be a company of which the directors are also directors of the
Company. For the avoidance of doubt any person wheresoever resident
may be appointed as a Trustee.
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9.2 Minimum Number: There shall be no requirement that there be more
than one Trustee.
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9.3 Termination: The office of a Trustee shall be ipso facto determined
and vacated if such Trustee being an individual shall be found to be
of unsound mind or if he shall became subject to any proceedings
under any bankruptcy or insolvency laws applicable to him or if such
Trustee being a company shall enter into liquidation or dissolution
whether compulsory or voluntary (not being merely a voluntary
liquidation for the purposes of amalgamation or reconstruction).
9.4 Retirement: A Trustee may retire at any time upon giving to the
Company not less than one month's written notice (or such shorter
period as the Company may accept) without assigning any reason
therefor and without being responsible for any costs occasioned by
such retirement.
9.5 Removal: The Company may at any time by resolution of the Board
remove any person from the office of trustee without assigning any
reason therefor.
9.6 Transfer of Trust Fund: Upon any appointment of a new Trustee or new
Trustees all monies and investments representing the Trust Fund
shall be paid or transferred to or placed under the control of such
new Trustee or new Trustees with the other Trustee or Trustees
hereof for the time being and all acts deeds and things necessary
for such purposes shall be done and executed and all costs of and
incidental thereto shall be paid by the Trustees out of the Trust
Fund as they shall in their absolute discretion from time to time
decide.
10. ADMINISTRATION
The provisions of the Third Schedule shall have effect as if herein set
out at length.
11. VARIATION AND RECTIFICATION
The Trustees (with the consent of the Company) shall have power from time
to time in such manner in all respects (but subject as hereinafter
provided) as the Trustees may consider expedient by deed to alter or add
to any of the provisions of this Deed Provided That no such alteration or
addition shall be effective if as a result:
(a) this Trust would cease to be an employees' share scheme; or
(b) this Trust would cease to be a trust which satisfies the conditions
set out in section 86 of the Inheritance Tax Xxx 0000; or
(c) any Group Company could be a Beneficiary under this Trust; or
(d) the Trust Period would extend beyond the end of the perpetuity
period specified in this Deed.
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12. PROPER LAW
12.1 Proper Law and Jurisdiction: Subject to sub-clause 12.3, this Deed
shall be governed and construed in all respects in accordance with
the laws of England and subject to the non-exclusive jurisdiction of
the English Courts to which the Trustees hereby submit.
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12.2 Forum: The English Courts shall be the forum for the
administration of the trusts hereof.
12.3 Change of Proper Law: Notwithstanding anything contained in this
Deed the Trustees may from time to time declare in writing that the
trusts hereby constituted shall from the date of such declaration
take effect in accordance with the law of some other place in any
part of the world and as from the date of such declaration the law
of the place name therein shall be the law applicable hereto but
subject to the power conferred by this clause and until any further
declaration be made thereunder PROVIDED ALWAYS that so often as any
such declaration as aforesaid shall be made the Trustees may make
such consequential alterations or additions in or to the trusts,
powers and provisions of this Deed as the Trustees may consider
necessary or desirable to ensure that such trusts, powers and
provisions shall (mutatis mutandis) be as valid and effective as
they are under the laws of England.
13. EXCLUSION OF THE COMPANY
Notwithstanding any other provision contained in this Deed the Trustees
shall not pay or transfer to or apply for the benefit of any Group Company
any part of the Trust Fund.
IN WITNESS whereof the Company and the Trustees have caused this Deed to be
executed as a deed on the date first above written.
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THE FIRST SCHEDULE
Sub-Clause 8.1 'Trustees' Powers
Express Powers: In addition and without prejudice to all other powers from time
to time available to them under statute or in law generally or otherwise the
Trustees shall have the following powers PROVIDED THAT the Trustees shall not
exercise any of their powers so as to conflict with the beneficial provisions of
this Deed:
1. Dealings in Shares: To acquire by subscription, purchase or otherwise and
retain or sell or otherwise dispose of any Shares or any Interest in
Shares from or to any person and without limitation to transfer, grant or
otherwise dispose of to any Beneficiary any Shares or any Interest in
Shares or any right to acquire Shares pursuant to the terms of any
employees' share scheme or otherwise (and in particular but without
limitation to satisfy any option granted to any Beneficiary by any Group
Company in the course of or pursuant to any employees' share scheme) on
such terms as the Trustees think fit and whether or not at full value.
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2. Application of Trust Fund: Prior to the investment of any monies for
the time being forming part of the Trust Fund in the purchase of Shares
or Interests in Shares:
(a) To retain any of the same in an interest bearing account for so
long as the Trustees may think fit;
(b) To lend any of the same to any Group Company against the issue of a
loan note or other security for the same in such form and upon such
terms as to repayment, interest, security or otherwise as the
Trustees from time to time think fit; and
(c) To lend any of the same to any Beneficiary upon such terms as to
repayment, interest, security or otherwise as the Trustees from time
to time think fit.
PROVIDED THAT
(i) no loan shall be made upon terms that repayment may be made
after the expiration of the Trust Period;
(ii) no monies shall be lent to any Group Company other than upon
arm's length commercial terms without any element of bounty;
(iii) in so far as any monies for the time being lent by any Group
Company to the Trust Fund are lent by the Trustees to a
Beneficiary then in so far as the Trustees receive interest
thereon a sum equivalent thereto shall be paid by way of
interest by the Trustees to such Group Company;
(iv) the Trustees shall not be entitled to exercise the powers
afforded to them by these paragraphs (a), (b) and (c) in so
far as such exercise would mean that the trusts hereby created
constitute a "collective investment scheme" as defined by
section 75 of the Financial Services Xxx 0000 for so long as
the same is unlawful pursuant to the said Act; and
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(v) the Trustees shall give consideration to such other
requirements of the Financial Services Xxx 0000 and
requirements of law for the time being applicable before and
upon exercising such powers.
3. Maintenance and Accumulation: To apply income for maintenance and to
accumulate surplus income in either case as provided by Section 31
Trustee Act 1925 which shall apply as if:
(a) the words "may, in all the circumstances, be reasonable" had been
omitted from paragraph (i) of subsection (1) thereof and the words
"the Trustees may think fit" had been substituted therefor; and
(b) the proviso at the end of subsection (1) thereof had been omitted
therefrom.
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4. Advancement: To pay or apply any money securities or other assets
comprised in the Trust Fund or any part thereof as provided by Section 32
of the Trustee Act 1925 which shall apply as if the words "one half of"
were omitted from proviso (a) of subsection (i) thereof.
5. Borrowing: To borrow money on such terms and conditions as to interest,
repayment and otherwise as they may think fit and whether upon the
security of the whole or any part or parts of the Trust Fund or upon the
personal covenant of the Trustees (subject to such restrictions in that
behalf as the Trustees think fit) and to apply such borrowed monies for
such of those purposes for which the Trustees are permitted to use or
apply the Trust Fund.
6. Exclusion of Beneficiaries: With the written consent of the Board, to
declare by deed or deeds revocable or irrevocable that any person or
persons or class or classes of person who is or could become one of the
Beneficiaries shall cease to be or (as the case may be) shall be incapable
of becoming one of the Beneficiaries or of receiving any or any further
benefit hereunder (whether at all or to the extent so declared by the
Trustees) PROVIDED THAT:
(a) the exercise of this power shall not prejudice, modify or affect
any appointment of capital or income then already made; and
(b) this power shall not be exercised so that the Beneficiaries shall
cease to comprise most of the individuals who are for the time being
employed by the Company or so that this Deed ceases to be an
employees' share scheme.
7. Corporate Nominees: To allow or cause any part or parts of the Trust
Fund to be or become vested in and held and administered by any person
or persons approved by the Board as nominee for the Trustees.
8. Grant of Rights: To grant any option or rights of pre-emption and to enter
into and execute any pre-emption or other arrangements, dealings,
dispositions and dedications whatsoever and to do all other actions or
things which the Trustees in their absolute discretion may think expedient
in the interests of any one or more of the Beneficiaries.
9. Compromise of Rights: To enter into any compromise or arrangement with
respect to or to release or forbear to exercise or to alter or join in
altering all or any of the rights as shareholders,
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debenture homers, debenture stockholders. creditors or stockholders of any
company (including the Company) and whether in connection with a scheme of
reconstruction or amalgamation or otherwise howsoever and notwithstanding
that such compromise, arrangement or alteration may impose on the Trustees
increased or new liabilities or obligations and. with full power to accept
in or towards satisfaction of all or any of such rights such consideration
as they shall in their discretion think fit.
10. Waive Dividends: Without limiting the power conferred by the preceding
paragraph 9 but subject to sub-clause 4.6, to waive in whole or in part
any entitlement to receive all or any dividends, interest, distribution or
other income or capital entitlement attached to or derived from any Shares
or other securities of any company for the time being held by the Trustees
and whether or not in return for any consideration or benefit.
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11. Dealings with Related Trusts: In execution of any of the trusts hereof or
in exercise of any of the powers hereby or by law given to the Trustees,
to settle appoint or otherwise transfer the Trust Fund or any part thereof
or buy or sell property or borrow from or lend money to or carry out any
other transaction with the trustees of any other trust or the executors or
administrators of any estate, notwithstanding that the Trustees are the
same persons as those trustees executors or administrators or any of them,
and where the Trustees are the same persons as those trustees executors or
administrators the transaction shall be binding on all persons then or
thereafter interested hereunder even if effected and evidenced only by an
entry in the accounts of the Trustees.
12. Entry into Binding Agreements: To enter into and execute any binding
arrangements, agreements, dealings, dispositions and dedications
whatsoever and to all the other actions and things which the Trustees may
in their absolute discretion think expedient in the interests of any one
or more of the Beneficiaries.
13. Voting Rights: The Trustees may exercise or agree to exercise all
voting rights appertaining to any investments (including Shares) for
the time being forming part of the Trust Fund in as full. free and
absolute a manner as if they were absolute owners of such investment
and in particular may:
(a) exercise such voting rights either by voting or by abstaining from
voting so as to ensure or further the appointment or reappointment
of any one or more of their number to be directors, secretaries or
employees of any company in which any part of the Trust Fund may for
the time being be invested or of any subsidiary of any such company;
(b) enter into agreement with any Beneficiary or other person to
exercise or refrain from exercising the voting rights attached to
any Shares for the time being held by the Trustees in such manner as
the Beneficiary may direct and whether in all or only in certain
circumstances.
14. Appropriation: To appropriate any investment or property from time to time
forming part of the Trust Fund in its actual state of investment in or
towards satisfaction of any beneficial interest in the Trust Fund as the
Trustees think fit without the necessity of obtaining any consent.
12
15. To Pay Tax:
(a) To pay any duties or taxes or other fiscal impositions (together
with any related interest or penalties or other surcharges) in
connection with the trusts hereof for which the Trustees may
become liable in any part of the world and to make and file all
returns and disclosures therewith notwithstanding that such
liability or disclosure as aforesaid may not be enforceable
through the courts of the place where the trusts declared in this
Deed are for the time being administered and to have complete
discretion as to the time and manner in which such duties taxes
and fiscal impositions shall be paid and no person interested
under this Trust shall be entitled to make any claim whatsoever
against the Trustees by reason of their making such payment or
disclosure;
16
(b) To apply all or any part of the Trust Fund or all or any part of the
income of the Trust Fund in paying any stamp duty or stamp duty
reserve tax payable in respect of any transfer of or agreement to
transfer Shares to a Beneficiary.
16. To Deduct Tax:
(a) To deduct or withhold from the sums of money paid or credited to the
Trustees by any Group Company or from or in respect of amounts paid
or property transferred by the Trustees to any of the Beneficiaries
any amounts for which the Trustees may as trustees be accountable to
any third party;
(b) To arrange for any Group Company to account to the Inland Revenue or
other authority concerned for any amounts deducted or withheld from
the sums money paid or credited to the Trustees or any Group Company
or from or in respect of any amounts paid or property transferred by
the Trustees to any of the Beneficiaries in respect of income tax or
any other deductions or withholding required by law.
17. Payments and Receipts: To pay any payment to any Beneficiary into such
Beneficiary's bank account and the Trustees shall be discharged from
obtaining a receipt or considering, dealing with or otherwise acting in
respect of the application of such payment.
18. Infant Beneficiaries and Receipts: To pay to any parent or guardian of
any minor any sum or sums of money due to such minor under this Deed
and the receipt of any such person shall be a good discharge to the
Trustees.
19. Apportionment: To treat all income received by the Trustees as income at
the date of receipt irrespective of the period for which the income is
payable.
20. Insurance: To effect insurance of any property or any part or parts
thereof forming part or parts thereof forming part of the Trust Fund
against such risks and for such values as the Trustees may in their
discretion determine.
13
21. Trustees' Interests: To enter into any transaction (including a sale,
purchase, lease or loan) notwithstanding that at one or more of their
number may have some other interest therein whether in a personal or
fiduciary capacity PROVIDED THAT (a) at least one of their number has no
such other interest or (b) a duly qualified independent valuer or adviser
has advised that the transaction is a fair and reasonable one for the
Trustees to enter into having regard either to the interests of all the
Beneficiaries or one or more of them but a purchaser shall not be
concerned to see that the foregoing provisos have been complied with.
14
THE SECOND SCHEDULE
Sub-Clause 8.2: Trustees' Protection
1. Reliance upon Information and Advice: The Trustees shall be entitled to
rely without further enquiry on all information supplied to it by the
Company or any other Group Company and further
17
may act on the formal advice or considered opinion of any solicitor,
broker, actuary, accountant or other professional person whether such
advice was obtained by the Trustees or by the Company or other member of
the Group and shall not be responsible for any loss so occasioned by their
so acting.
2. Indemnity: In the absence of willful or individual fraud or dishonesty on
the part of the Trustee (or Trustees) or on the part of the officer(s) of
any corporate trustee who is (or are) to be made liable, the Trustees and
the officers of any corporate trustee shall be fully indemnified against
any actions, claims, demands and liabilities of whatsoever nature arising
out of anything properly done or caused to be done by them in exercise of
the powers and discretions vested in them by this Deed or otherwise
arising out or in connection with the trusts hereof in any manner
whatsoever or which is done at the request of the Company (including
without limitation to the foregoing taxation and any other fiscal
obligation to the state) and in addition the Trustees and their officers
as aforesaid shall have the benefit of all the powers, privileges and
immunities conferred upon gratuitous trustees by statute or by common law
and such indemnity shall be out of the Trust Fund.
3. Delegation: The Trustees may employ at the expense of the income or
capital of the Trust Fund any agent or agents to transact all or any
business or to do any act of whatsoever nature required to be transacted
or done in the execution of the trusts hereof or in the exercise of the
powers hereof including the receipt and payment of monies and the
execution of documents and if they act reasonably and with due care in the
exercise of such powers the Trustees shall not be responsible for the
default of or any loss caused by any such agent or agents.
4. Acting by Proper Officer: Every Trustee which is a corporation or company
may exercise or concur in exercising any discretion or power conferred on
the Trustees by a resolution of such corporation or company or by a
resolution of its board of directors or governing body or may delegate the
right and power to exercise or concur in exercising any discretion or
power to one or more members of its board of directors or governing body
or one or more of its officers or employees duly authorised for that
purpose notwithstanding that such director, employee or proper officers
have a personal or beneficial interest therein.
5. Non-Intervention: The Trustees shall not be required to interfere in the
management or conduct of the business of any company wherever resident or
incorporated in which the Trust is interested, even if holding the whole
or a majority of the shares carrying the control of such company and so
long as the Trustees have no notice of any act of dishonesty or
misappropriation or money on the part of the directors having the
management of such company the Trustees may leave the conduct of its
business (including the payment or non-payment of dividends) wholly to its
directors and no Beneficiary shall be entitled to require the distribution
of any dividend by a company wherever incorporated or resident in which
the Trustees may be interested or require the Trustees to exercise any
powers they may have of compelling any such distribution.
15
6. Liability of Co-Trustees: A Trustee shall be liable only for losses
arising from his own willful default or willful wrongdoing and shall not
be responsible for any act, neglect or default of his fellow Trustee or
Trustees to which he was not a party and a Trustee who shall pay or
transfer to his fellow Trustee or Trustees or do or omit to do any act or
thing thereby enabling such fellow Trustees to receive sums of money or
other property for the purposes of the trusts hereof shall not be bound to
see to their due application.
18
7. Breach of Trust: In the administration of the trusts hereof the
Trustees shall consider the requirements of:
(a) section 86 of the Inheritance Tax Xxx 0000; and
(b) any Rules of Good Practice published by any institutional investment
committee
for so long as such requirements are relevant but shall not be liable for
any breach of trust if such requirements are not observed thereby causing
any loss, whether by exemption from any taxation or otherwise.
16
THE THIRD SCHEDULE
Clause 10: Administration
1. Accounts: The Trustees shall cause to be prepared accounts for the Trust
Fund and transactions relating thereto for each successive financial year
(and without limiting their obligations in respect of the same shall
maintain records within such accounts showing separately the contributions
received from each Group Company and the persons for the benefit of whom
such contributions are applied) and shall produce the same to the Company
duly audited by a chartered accountant within [six months] of the end of
the financial year to which they relate.
2. Information: The Trustees shall at the request of the Board provide all
such information relating to the Trust Fund as the Board may from time to
time request and shall permit the Board and its representatives to inspect
all securities, accounts, minutes, records, documents and other papers
relating to the Trust Fund or the trusts of this Deed.
3. Acts of the Trustees: Unless there is for the time being a sole
trustee of this Trust:
3.1 Decisions: The Trustees may exercise any power or discretion
held or exercisable by them by a majority and need not be
unanimous.
3.2 Meetings: The Trustees may meet together for the dispatch of
business, adjourn and otherwise regulate their meetings as they
think fit. Unless the Trustees be a corporate sole trustee the
quorum for any meeting of the Trustees shall be two and any meeting
of the Trustees at which a quorum is present shall be competent to
exercise all the powers and discretions exercisable by the Trustees
generally. The Trustees shall elect a chairman of their meetings and
questions arising shall be decided by a majority of votes and in
case of equality of votes the chairman or if there is no permanent
chairman or if he be not present the chairman of the meeting (who
shall be elected by the meeting) shall have a second or casting
vote.
3.3 Written Resolutions: A resolution in writing signed by all the
Trustees for the time being shall be as valid and effectual as a
resolution passed at a meeting of the Trustees. Such resolution may
be contained in one document or in several documents in like form
each signed by one or more of the Trustees for the time being and
such resolutions shall be entered in the minute book referred to in
sub-paragraph 3.4.
19
3.4 Minutes: The Trustees shall cause proper minutes to be kept and
entered in a book provided for the purpose of all their resolutions
and proceedings and any such minutes of any meeting of the Trustees
if purported to be signed by the chairman of such meeting or by the
chairman of a subsequent meeting shall be admissible as prima facie
evidence of the manners stated in such minutes.
3.5 Receipts: Valid and effectual receipts and discharges for any monies
or other property payable transferable or deliverable to the
Trustees or any of them may be given by any one Trustee or by any
person from time to time authorised in writing for the purpose of
the Trustees.
3.6 Delegation: The Trustees may from time to time delegate any
business to any one or more of their number.
17
3.7 Trustees' Interests:
(a) A Trustee shall not be disqualified from voting or taking
part in any decision of the Trustees on any matter by virtue
of any personal or beneficial interest (actual or prospective)
therein; and
(b) any Trustee or director secretary or employee of a Trustee who
is or may become a Beneficiary may exercise his powers and
execute his duties as such trustee notwithstanding that he is
or may become a Beneficiary; and
(c) no decision shall be invalidated or questioned on the ground
that any Trustee or director, secretary or employee of a
Trustee had a direct or other personal interest in the mode or
result of such decision or of exercising such power or
discretion
PROVIDED THAT a Trustee or director, secretary or employee of a
Trustee may not vote upon any decision affecting him personally
either as a potential or existing Beneficiary but this prohibition
shall not apply to any amendment to the provisions of this Deed
3.8 Separation of Resolutions: Where proposals are under consideration
concerning the provision of benefits to any Beneficiaries who are
Trustees or are officers of a corporate Trustee (including any
variation of the same), such proposals may be divided and considered
in relation to each such person separately and in such cases each of
such persons concerned shall be entitled to vote (and be counted in
the quorum) in respect of each resolution except that concerning
himself.
The COMMON SEAL of the ) Director /s/ X. X. Xxxxxx
Company was hereto affixed ) Assistant Secretary /s/ X.X. Xxxxxx
------------------------------------------
[Corporate Seal]
------------------------------------------
20
EXECUTED AS A DEED and )
DELIVERED on the )
date hereof for and on behalf of the) Director
Trustees in the presence of: ) Director /s/ A.O. DART
------------------------------------------
------------------------------------------
18
21
1994 MICRO FOCUS EMPLOYEE BENEFIT TRUST
CERTIFICATE OF SHARE OPTIONS GRANT
Date of Grant: _________, 199_
THIS IS TO CERTIFY THAT on the Date of Xxxxx shown above [Firstname] [Lastname]
WAS GRANTED [AMOUNT] OPTIONS, each such option being a right granted by Micro
Focus Group Trustees Limited, Reg. No. 58902 ("the Grantor") to purchase a
fully-paid Ordinary share of 10p in the capital of Micro Focus Group plc (the
"Company") at a price of pounds Sterling ______ per share exclusive of stamp
duty.
The terms used in this Certificate and the attached Schedule are defined in the
Glossary on the back of this Certificate.
All options are granted subject to the terms and conditions set out in this
Certificate and the Schedule hereto.
Subject to the terms and conditions set out in the Schedule, the Options will be
exercisable in accordance with the following vesting Schedule:
--------------------------------------------------------------------------------
On or after Vesting Date: But Before Lapse Date: Number of options:
------------------------- ---------------------- ------------------
(________, 19__) (________, 20__) 20% of the Options
(________, 19__) (________, 20__) 20% of the Options
(________, 19__) (________, 20__) 20% of the Options
(________, 20__) (________, 20__) 20% of the Options
(________, 20__) (________, 20__) 20% of the Options
--------------------------------------------------------------------------------
In consideration of these Options and as a condition of acceptance of these
Options by the Option Holder, the Option Holder hereby agrees with the Grantor
to grant the rights to the Grantor and to accept, and undertake to be bound by,
the terms and conditions referred to above and as set out in the Schedule.
SIGNED AND DELIVERED as a Deed by Micro Focus Trustee Limited acting by X.X.
Xxxxxxx
-----------------------------
DIRECTOR
Signed:
---------------------------------
Option-Holder
22
GLOSSARY
In the Certificate and the attached Schedule:
"the Appendix" mean the Appendix to the Schedule;
"the board" means the board of directors of the Grantor or
a duly authorized committee of the board of directors;
"Business Day" means any day between and including Monday and
Friday in any week, excluding any day which is a public
holiday in either England or California or is not a
dealing day of the Stock Exchange in London;
"the Certificate" means the certificate evidencing the
grant of these options to the Option-holder;
"the Company" means Micro Focus Group Public Limited Company
(incorporated in England with reg. no. 1709998);
"the Date of Grant" means the date upon which these Options are
granted as recorded on the Certificate;
"the Employer means the company in which the Option-holder holds the
Corporation" office or employment by virtue of which he or she has
been granted these Options;
"EPS" means earnings per Share before exceptional items;
"Exercise Price" means the Pounds Xxxxxxxx xxxxx payable
on the exercise of an Option as recorded on the face
of the Certificate;
"the Grantor" means the Micro Focus Trustees Limited
incorporated in Jersey with Reg. No. 58902;
"the Group" means the Company and every other company by
which the Company has direct or indirect control;
"Market Price" means, at any time, the price per share at which
shares could then be sold on the Stock Exchange in
London as advised to the Options Administrator by the
Company's stockbroker;
23
"Option" means option hereby granted to acquire a Share;
"the Options
Administrator" means the Grantor or other person appointed by
the Grantor as the Options Administrator for the time
being;
"Option-holder" means person to whom Options are granted
(including upon the death of such person and where
the context so requires, his or her personal
representatives);
"Option Shares" means Shares acquired, or to be acquired,
by the Option-holder upon the exercise of Options
including, in the event of any reconstruction,
amalgamation or reorganisation of share capital in
the Company, shares representing such Shares and any
additional shares acquired by the Option-holder in
consequence of his or her holding of such Shares
(other than shares for which the Option- holder has
given new consideration);
"the Performance
Criteria" means the matters set out in the Appendix;
"the schedule" means the Schedule to the Certificate;
"Share" means a fully-paid Ordinary share of 10p in the
capital of the Company;
"vested" means capable of being exercised in accordance with the
vesting schedule on the face of the Certificate.
24
1994 MICRO FOCUS EMPLOYEE BENEFIT TRUST
SCHEDULE
Part A: TERMS AND CONDITIONS SET BY THE GRANTOR
1. Vesting and Lapse of Options
(a) After being granted, an Option becomes vested upon being held by
the Option-Holder until the Vesting Date for that Option set out in
the Certificate.
(b) An Option lapses and is no longer exercisable after the Lapse Date
for that Option set out in the Certificate or the date on which the
relevant Performance Criteria shall have failed to be met, if
earlier.
2. Manner of exercise of Option
(a) Options may be exercised on any occasion after becoming vested and
before they have lapsed by:
(i)the receipt of a notice by the Grantor given by the Option-
Holder in the manner prescribed in clause 9 of this Part which
identifies the Options that are to be exercised; and
(ii) the receipt by the Grantor of the aggregate Exercise Price and
applicable stamp duty in each case in Pounds Sterling in respect of
such Options.
(b) Upon receipt of a notice of exercise served in accordance with
Clause 2(a) above and a remittance for the appropriate Exercise
Price the Board of the Grantor shall deliver to the Option-Holder,
as appropriate, a duly executed Stock Transfer Form for the number
of Shares in respect of which such Options are duly exercised,
together with a Share Certificate in respect thereof in the name of
the Grantor;
(c) If all Options represented by the Certificate are not exercised the
Board may, at its discretion, endorse the Certificate so as to
specify the number of Options which remain to be exercised and
require the Option-Holder to deliver the Option Certificate to the
Grantor for such purpose.
(d) Shares transferred pursuant to exercise of Options shall be sold by
the Grantor free of all liens, charges or encumbrances and with all
rights attaching thereto at the date of receipt of a notice of
exercise served in accordance with Clause 2(a) above.
3. Cessation of employment
(a) General Rule: Subject to provisions (b) and (c) of this clause, if
the Option-Holder ceases to hold employment within the Group for
any reason then all Options that
25
have vested prior to the date of notice of termination by either
party of the employment relationship will be exercisable by the
Option-Holder until the date the Option-Holder ceases to hold
employment and will thereafter lapse. All Options that have not
become vested prior to the date of such notice will become null and
void as of the date of such notice.
(b) Disability: If the Option-Holder ceases to hold employment within
the Group by reason of a certified physical or mental disability
which makes it impossible to continue gainful employment for the
rest of his or her natural life then all Options which have vested
and not lapsed prior to the cessation date may be exercised within
the period of one year beginning with the date that the
Option-Holder ceased to hold employment within the Group.
(c) Death: If the Option-Holder ceases to hold employment within the
Group by reason of the Option-Holder's death, then all Option which
may have vested and not lapsed prior to the cessation date may be
exercised by the personal representatives of the Option-Holder
within the period of one year beginning with the date of death.
4. Non-transferability of Options
Options are personal to the Option-Holder save as set out in Clauses 3(b)
and 3(c) above, and may not be exercised by any other person. An Option
shall lapse forthwith if it is purportedly assigned, mortgaged, charged or
otherwise alienated of if the Option-Holder is adjudicated bankrupt or
does or suffers any other act or thing whereby the Option-Holder would or
might be deprived of the beneficial ownership of such Option.
5. Independence of Options
The statutory, contractual or other rights and obligations of the
Option-Holder under the terms of any office, employment, contract or any
other relationship with the Company or any other Company in the Group
apart from the Options, shall not be affected by the grant or existence of
these Options or any other right that the Option-Holder might otherwise
have to exercise the Options and these Options shall not afford the
Option-Holder any additional rights to continuation of, or to compensation
or damages in consequence of the termination of, any office, employment or
other relationship for any reason whatsoever.
6. Sale or transfer of Option Shares
To avoid inadvertent breach of the United States securities laws, and to
promote the acquisition of shares by employees of companies within the
Group, if the Option-Holder intends, at any time, to sell, assign or
transfer any or all of the Option Shares, the Grantor will have the right
of first refusal to purchase or arrange the purchase, sale, assignment or
transfer of those Option Shares. The procedures to be adopted for the time
being in the case of the Option-Holder wishing to sell Option Shares are
as in Clauses 6(a) to 6(e) below:
26
(a) The Option-Holder will give notice ("the Initial Sale Notice") to
the Options Administrator stating the Option-Holder's intent to
sell, assign or transfer the exercised Option Shares. The Initial
Sale Notice must be made in writing be given by one of the methods
in clause 9 below and state:
(i) the number of shares to be sold, and
(ii) the identification of the Option representing the Shares to be
sold by quoting the grant date;
the Options Administrator may then exercise a right of first
refusal by proceeding as in Clauses 6(b), (c) or (d) below. If the
Options Administrator for any reason declines to exercise this
right of first refusal, then Clause 6(e) below will apply instead.
(b) If the Grantor exercises its right of first refusal then the
Options Administrator will make all reasonable efforts to obtain a
Market Price quotation from the Company's stockbroker at The Stock
Exchange in London for the specified number of Shares by the next
dealing day of The Stock Exchange in London and to inform the
Option-Holder of the quoted price as soon as practicable, in any
event, within 48 hours.
(c) After receiving the quotation referred to in Clause 6(b) above, if
the Option-Holder decides to sell the Option Shares, the
Option-Holder must give a notice ("the Sale Confirmation Notice")
to the Options Administrator. The Sales Confirmation Notice must be
made in writing by one of the methods in Clause 9 below.
The Sale Confirmation Notice must restate the quotation price and
may also state a lesser, minimum price below which the
Option-Holder wishes to withdraw from the sale in the event that
the minimum price or greater is not achievable.
For the Sale Confirmation Notice to be valid and accepted and for
the sale to take place, the Grantor must be in possession of the
following;
(i) the share certificate(s) for the Option Shares, and
(ii) a blank form of Stock Transfer, acceptable to The Stock
Exchange in London, relating to such Option Shares and signed by
the Option-Holder.
(d) Provided that a valid Sale Confirmation Notice is given by the
Option-Holder to the Grantor, then the Grantor will proceed as soon
as practicable, either:
(i) to instruct the Company's stockbroker to sell through The Stock
Exchange in London the specified shares on behalf of the
Option-Holder in such a way as will
27
avoid contravention of U.S. federal and state security laws as soon
as practicable and retain a commission of 1/2% of the gross
proceeds for the Grantor's own account; or
(ii) to purchase or arrange the purchase of the entire specified
number of Option Shares at the Market Price quotation and will use
its best efforts to do so in such a way as will avoid contravention
of the U.S. federal and state securities laws as soon as is
practicable and retain a commission for the Grantor's own account
equivalent to the commission that would have been charged by the
Company's stockbroker on that occasion.
If any of the actions required of the Option-Holder described in
Clauses 6(a), (c) and (d) above are not completed, the Grantor may
be unable to complete the sale and in that event, should the
Option-Holder wish to proceed with a sale, he or she must repeat
the procedures in Clauses 6(a) to 6(d).
The Grantor will pay the net proceeds of sale to the Option-Holder
as soon as is practicable, given the nature of the transactions
involved.
The Company's stockbroker and the Grantor will use all reasonable
efforts to achieve the purposes of these arrangements and will each
attempt to achieve the Market Price quoted but cannot guarantee it
as the Stock Exchange Market Price may shift between the quotation
and the sale.
(e) If the Option-Holder gives the Initial Sale Notice and the Options
Administrator does not exercise its right of first refusal and
either states this in writing to the Option-Holder or fails to
obtain from the Company's stockbroker the Market Price quotation
referred to in Clause 6(d) above by the end of the Business Day
following that in which the Options Administrator received the
Initial Sale Notice, then for the next five Business Days, the
Option-Holder shall be at liberty subject to compliance with all
applicable requirements of U.S. federal and state securities laws,
The Stock Exchange in London, and any other government or other
regulatory or advisory body whether in the United Kingdom or United
States of America, to sell, assign or transfer such Option Shares
to any person on any terms, provided that the Option-Holder gives
the Options Administrator notice in writing of that sale,
assignment or transfer in accordance with Clause 9 within such five
Business Days.
If the Shareholder does sell, assign or transfer the Option Shares
and notify the Options Administrator of that sale, assignment or
transfer in accordance with Clause 9 below within such five
Business Days, then when next the Option-Holder wishes to sell,
assign or transfer any Option Shares he or she must repeat the
procedures set forth in Clause 6(a) to 6(d) above so that the
Grantor may again utilise its right of first refusal.
28
(f) The Grantor may expand or change these procedures to accommodate
The Stock Exchange in London or the Company's Stockbroker's trading
practice or to ensure practicability of the administration
procedures or to ensure an effective service for the sale,
assignment or transfer of the Option Shares on behalf of the
Option-Holder and in the case of assignment or transfer may add new
procedures. Any such change will be notified to the Option-Holder.
7. Alteration of these Terms and Conditions
(a) The Grantor may at any time alter or add to the terms and
conditions of these Options in any respect, subject to, if
necessary, the approval of the Shareholders of the Company and the
various legislation in effect at the time of the change;
(b) The Board of Directors of the Grantor shall give to the
Option-Holder written notice of any such alteration or addition.
8. Right of First Refusal
The Grantor may assign the right of first person or persons and in that
event
(i) the Grantor shall give notice in writing to the Option-Holder,
and
(ii) the provisions of Clause 6 shall be read and construed as if
all references to "the Grantor" or "the Options Administrator" were
references to the assignee.
9. Service of Notices
For the purposes of the notices to be given to the recipient under Clauses
2(a), 6(a), 6(c) and 6(e) only, a notice must be sent, received and
acknowledged as follows-
(a) the notice must be given to the recipient using one or more of the
following methods
(i) by personal delivery in writing to the recipient, or in the
case of Options Administrator, his or her designee; or
(ii) by electronic mail to the recipient's identification code
"OPTIONS" using the Group's electronic mail system; or
(iii) by facsimile to the recipient's FAX machine, which must be
compatible with those used by the Grantor.
(b) The notice must be received by the recipient using any of the above
methods, in order to be considered given
29
(c) The recipient must make his or her best efforts to act upon the
notice as soon as reasonably practicable after actual receipt of
the notice.
10. Applicable law
The rights and obligations of the Option-Holder and the Grantor under the
terms and conditions set out in this Certificate, the Schedule and the
Appendix are subject to all applicable requirements of U.S. federal and
state laws and with all applicable requirements of The Stock Exchange in
London and any government or other regulatory or advisory body whether in
the United Kingdom or the United States of America. Save as aforesaid this
certificate, the schedule and the appendix shall be governed by and
construed in accordance with the laws of England
11. Force Majeure
Notwithstanding any other provision of the Certificate this Schedule or of
the Appendix, no default, delay or failure to perform on the part of any
party shall be considered a breach of any term or condition of this
Certificate or the Schedule if such default, delay or failure to perform
is shown to be due to causes beyond the reasonable control of the party
charged therewith, including, but not limited to, causes such as strikes,
lockouts or other labour disputes, riots, civil disturbances, actions or
inactions of governmental authorities or suppliers, epidemics, war,
embargoes or other acts of the public enemy, nuclear disasters, default of
a common carrier or failure of a communication system
12. Disclaimer
Neither the Company nor, the Grantor, their officers, directors, employees
or agents warrants any benefit or value from the holding or sale of any
option or the acquisition, holding or sale of any share, nor guarantees
any such benefits or value that might be perceived by the option-Holder or
by any other person, nor guarantees the effect of any act contemplated
herein.
PART B : REGULATORY REQUIREMENTS
13. Shareholders' circulars
The option-Holder shall be sent copies of all documents (including the
annual directors' report and accounts), other than proxy or voting forms,
sent to the holders of Shares
14. Stock Exchange listing
As required by The Stock Exchange in London to be drawn to the attention
of the Option-holder all Shares allotted upon the exercise of Options
shall rank equally in all respects with the Shares then in issue and the
Company shall apply to the Council of The Stock Exchange, in London for
such Shares to be admitted to the Official List of The Stock Exchange.
30
Restrictions imposed upon the exercise of options and the disposal of
shares
(a) Options may not in any event be exercised unless such exercise is
in compliance with the U.S. Securities Act of 1933 (as amended), if
applicable, and all applicable, U.S state securities laws, as they
are in effect at that time;
(b) In exercising Options the Option-holder shall have regard to the
provisions of the Model Code for Securities Transactions by
Directors of Listed Companies issued by The Stock Exchange, London,
in April 1981, a copy of which may be obtained from the Options
Administrator;
(c) Unless sold outside of the United States of America in a manner
which removes the sale from the purview of the U.S. federal
securities laws, all Shares acquired upon the exercise of Options
must be held indefinitely unless they are registered under the
Securities Act of 1933 or an exemption from registration is
available;
(d) The transfer of any Shares acquired upon the exercise of Options
may be restricted or affected by various state securities laws in
the United States of America.
(e) In disposing of any Shares acquired pursuant to the exercise of
Options, the Option-Holder shall have regard to the provisions of
the U.K. Company Securities (Insider Dealing) Xxx 0000, a copy of
which may be obtained from the Options Administrator, and the Model
Code referred to in clause 14(b) above.
15. Restrictions imposed upon the exercise of options and the disposal of
shares
(a) Options may not in any event be exercised unless such exercise is
in compliance with the U.S. Securities Act of 1933 (as amended), if
applicable, and all applicable U.S. state securities laws, as they
are in effect at that time;
(b) in exercising Options the option-Holder shall have regard to the
provisions of the Model Code for Securities Transactions by
Directors of Listed Companies issued by The Stock Exchange in
London, a copy of which may be obtained from the Options
Administrator;
(c) unless sold outside the United States of America in a manner which
removes the sale from the purview of the U.S. federal securities
laws, all Shares acquired upon the exercise of Options must be held
indefinitely unless they are registered under the Securities Act of
1933 or an exemption from registration is available
(d) the transfer of any Shares acquired upon the exercise of Options
may be restricted or affected by various state securities laws in
the United States of America
(e) in disposing of any Shares acquired pursuant to the exercise of
Options, the Option-Holder shall (inter alia) have regard to the
provisions relating to Insider
31
Dealing set out in the U.K. Criminal Justice Xxx 0000, a copy of
which may be obtained from the Options Administrator, and the Model
Code referred to in Clause 2(b) above
16. Reconstruction or amalgamation
If an arrangement between the Company and any person holding shares in the
Company is proposed for the purpose of or in connection with a scheme for
the reconstruction of the Company or the amalgamation of the Company and
any one or more other companies (whether or not involving the subsequent
winding-up of the Company) and under the arrangement the Company will
cease to be the holding company of the Micro Focus group of companies then
the Board shall give notice in writing to the Option-Holder either:
(a) that the Company shall as a condition of the Company's agreement to
such arrangement require that the company which is to become the
holding company of the Micro Focus group of companies ("the New
Company") shall, subject to compliance with any applicable laws or
regulations for the time being in force in the United States of
America or the United Kingdom or any necessary consents or
approvals from any government or other regulatory or advisory body
whether in the United Kingdom or the United States of America or
elsewhere, procure the grant to the Option-Holder of a new option
or options of equivalent value in substitution for these Options,
PROVIDED THAT upon the grant (or substitution) of such new option
(or options) the Option-Holder releases the Grantor from all the
obligations and liabilities arising under or in connection with
these Options with the intent that all these Options shall
thereupon cease to be exercisable, or
(b) that the Options not yet exercised on the date of such Notice shall
accelerate and become exercisable in full prior to the
reconstruction or amalgamation of the Company at such times and on
such occasions as the Board shall determine.
17. Winding Up of the Company
In the event of notice being given to shareholders of a resolution for
the winding-up of the Company
(a) Options vested on the date of such notice may be exercised within
the period of 6 months beginning with the date on which such
resolution is passed and shall cease to be exercisable at the end
of that period, and
(b) Options which are not vested on the date of such notice shall
immediately cease to be exercisable
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18. Variation in Share Capital
(a) As permitted by The Stock Exchange in London, in the event of any
change in the number of Shares in issue by way of a stock split,
reverse stock split, stock dividend, combination or
reclassification of Shares, the board of the Grantor will make the
appropriate adjustment to
(i) the number of Options; and/or
(ii) the Exercise Price payable upon the exercise of an Option;
and
(b) written notice of any such adjustment shall be given to the
Option-Holder.
19. Alteration of terms and conditions
As required by the California Commissioner of Corporations, no alteration
or addition shall be made pursuant to Clause 7 of Part A of the schedule
which adversely affects the Option-Holder without his or her written
consent.
20. Withholding Taxes
If any withholding obligation of any company in the Group shall arise with
respect to the Option-Holder as the result of my transaction relating to
the Options or the Option Shares, the option-Holder will pay or make
adequate provision for any such withholding obligation.
21. Minimum vesting schedule
As required by the California Commission of Corporations, the vesting
schedule in the Certificate must be such that the Options will vest at no
later than at a rate of twenty percent (20%) per year for each full year
that the Option-holder remains continuously employed by the Group since
the Date of Grant.
PART C: ADDITIONAL TERMS AND CONDITIONS REOUIREr) BY U.S. TAX RULES IN THE
CASE OF AN INCENTIVE STOCK OPTION
1. Definitions
In this part of the schedule:
(a) Incentive Stock means an incentive stock option within
Option the meaning of section 422A of the Code;
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(b) the ISO Group means the Company and any other company
which is a Parent Corporation or
Subsidiary Corporation of the Company;
(c) Parent Corporation means any corporation (other than the
Employer Corporation) in an unbroken
chain of corporations ending with the
Employer Corporation it, at the Date of
Grant, each of the corporations other
than the Employer Corporation owns stock
(or shares) possessing 50% or more of the
total combined voting power of all
classes of stock (or shares) in one of
the other corporations in such chain;
(d) Predecessor means a corporation which was a party to
Corporation a transaction described in section 425(a)
of the Code (or which would be so described if
substitutions or assumption under such section
had been effective) with the Company, or a
corporation which, at the Date of Grant, is a
related corporation of the Company or a
Predecessor Corporation of any of such
corporations;
(e) Subsidiary means any corporation (other than the
corporation Employer Corporation) in an unbroken
chain of corporations beginning with the Employer
Corporation if, at the Date of Grant, each of the
corporations other than the last corporation in
the unbroken chain owns stock (or shares)
possessing 50% or more of the total combined
voting power of all classes of stock (or shares)
in one of the other corporations in such chains.
Words and phrases not otherwise defined have the same meanings as in the
Glossary on the reverse of the Certificate.
For the purpose of ensuring that an Option which is subject to these terms
and conditions will qualify as an Incentive Stock Option, the provisions
of the Certificate and Parts A and B C of this Schedule insofar as they
apply to any such Option shall be read and construed as if all references
to "the ISO Group" were substituted for all reference to "the Group".
2. Currency conversion
(a) If at the date of grant of an Option the Option-holder is in
receipt of "compensation (as defined in section 3231 (e) of the
Code) in US dollars, then
34
Clause 2(b) will apply to that Option, unless the operation of
Clause 2(c) has made Clause 2(b) inapplicable.
(b) If the conversion rate on the date of exercise of any Option has
changed such that a reduced number of dollars is required to
purchase the number of Pounds Sterling needed to make up the
Exercise Price than would be so required at the Conversion Rate
that existed on the Date of Grant, then the Exercise Price (in
Pounds Sterling) for that Option will be increased by the amount of
such reduction in dollars, converted into Pounds Sterling at the
Conversion Rate on the date of exercise.
(c) Clause 2(b) will not apply if, before the first date on which the
Option-holder exercises an Option granted under the circumstances
in Clause 2(a), the United States Internal Revenue Service has
given a ruling to the effect that the benefit of favourable tax
treatment under section 421 of the Code is available on exercise of
that Option, even if the rate of exchange between Pounds Sterling
and the US Dollar has changed, as described in Clause 2(b), since
the Date of Grant.
3. Variation in share capital
No adjustment or addition shall be made pursuant to Clause 7 of Part A of
the Schedule or pursuant to Clause 7 of Part B of the Schedule which would
give the Option-holder additional benefits under any Incentive Stock
Option as provided in section 425(h) (3) of the Code.
4. Notice of disqualifying disposition
To enable the Group to comply with any obligations, including withholding
tax, which it may have as the result of an early sale or disposition of
the Option Shares, if the Option-holder sells or otherwise disposes of any
of the Option Shares acquired subject to this Part C before the later of:
(a) the date two years after the Date of Grant of the Incentive Stock
Option by which the Option Shares were acquired; and
(b) the date one year after transfer of such Option Shares to the
Option-holder upon exercise of the Incentive Stock Option by which
the Option Shares were acquired;
then the Option-holder will immediately notify the Company in
writing of said disposition.
PART D: TERM NECESSARY TO ENSURE THAT A NON-OUALIFIED STOCK OPTION IS NOT
TREATED AS AN INCENTIVE STOCK OPTION
Options which are granted subject to this Part D of the Schedule are not
intended to be incentive Stock Options within the meaning of Section 422A
of the Code. These Options
35
may be exercised at any time subject to the terms and conditions of Parts
A and H of the Schedule.
PART E: ADDITIONAL TERMS AND CONDITIONS REOUIRED BY UK TAX RULES IN THE CASE
OF AN OPTION GRANTED UNDER THE MICRO FOCUS GROUP INLAND REVENUE APPROVED
SHARE OPTION SCHEME
1. Definitions
In this Part of the Schedule:
(a) "Close Company" has the same meaning as in Chapter III
of Part XI of the Income and Corporation Taxes Xxx 0000
SAVE THAT in determining whether a company is a Close
Company for the purposes of the Scheme, sections 282(1)
(a) and 283 of that Act shall be disregarded;
(b) "material has the same meaning as in Chapter III of Part
interest" XI of the Taxes Act SAVE THAT in determining
for the purposes of this Scheme and Schedule whether a
person has or has had a material interest in a company,
section 285(6) and paragraph (ii) of the proviso to
section 303(3) of that Act shall have effect with the
substitution for the references to 10%;
(c) "the Scheme" means the Micro Focus Inland Revenue Approved Share
Option Scheme established by the Company (by
resolution) of the Board dated 23rd April 1987) in
accordance with the Plan.
Words and phrases not otherwise defined in this Part of the Schedule or
Part A or B of the Schedule have the same meaning as in section 38 and
Schedule 10 of the Finance Xxx 0000.
Words denoting the masculine gender shall include the feminine.
2. Applicability of this Part
An Option which is subject to this Part of the Schedule is granted in
accordance with the Micro Focus Group Inland Revenue Approved Share Option
Scheme established by resolution of the Board on 23rd April 1987 (the
"Approved Scheme"). The board of Directors of the Grantor will have the
right to make amendments or modifications to the Approved Scheme and/or
any of the terms and conditions of the Certificate and all Parts of its
Schedule to which Approved Options are subject in order to ensure that
Inland Revenue approval is obtained.
36
3. Interest in Close Company
An Option which is subject to this Part of the Schedule may not be
exercised at any time when the Option-holder has, or has within the
preceding twelve months, had a material interest in a Close Company being
either the Company or a company which has control of the Company or is a
member of a consortium which owns such a company.
4. Alterations or Additions
After the Board of Inland Revenue has approved the Scheme pursuant to
Schedule 10 of the Finance Xxx 0000, no alteration or addition shall be
made to any term or condition of any Option granted in accordance with the
Scheme without the prior approval of the Board of Inland Revenue.
PART F: ADDITIONAL TERMS AND CONDITIONS OF UK UNAPPROVED SHARE OPTIONS
Options subject to this Part of the Schedule are not granted in accordance
with the Micro Focus Group Inland Revenue Approved Share Option Scheme and
are not intended to qualify for favourable UK tax treatment under the
Finance Xxx 0000.
