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Exhibit 10.29
STOCK OPTION AND STOCKHOLDERS' AGREEMENT
STOCK OPTION AND STOCKHOLDERS' AGREEMENT, dated as of January 29, 1996,
among Xxxxx Holdings, Inc., a Delaware corporation (the "Company"), Xxxxx X.
Xxxxx, the Majority Stockholder (the "Majority Stockholder"), and Xxxxxxxxx X.
Xxxxxxxx, an Executive of the Company (the "Executive"):
WHEREAS, the Company has determined to award the Executive options to
purchase 1098 shares of non-class A common stock ("Common Stock") of the Company
at $150.00 per share (the "Options"), subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained the parties hereto hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
(a) "Affiliate" shall mean with respect to any Person, a spouse of such
Person, any relative (by blood, adoption or marriage) of such Person, any
director, officer or employee of such Person, any trust formed by such Person,
any other Person of which such Person is a director, officer or employee, and
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person.
(b) "Appraiser" shall mean an accounting, investment banking or other
appraisal firm selected by the Board of Directors of the Company.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Call Date" shall have the meaning set forth in Section 3.8(b)
herein.
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(e) "Cause" shall mean (i) the commission of a felony; (ii) gross
negligence or willful misconduct in connection with the performance of the
Executive's duties as an Employee; (iii) a fraudulent act or omission by the
Executive adverse to the reputation of the Company or any of its Affiliates;
(iv) the disclosure by the Executive of any trade secrets or confidential
information of the Company or any of its Affiliates to persons not authorized to
know same; or (v) the willful refusal to carry out reasonable instructions of
the Chairman, which has a material adverse effect on the Company or any of its
Affiliates. If, subsequent to the Executive's voluntary termination of
Employment or involuntary termination of Employment without Cause, it is
discovered that the Executive's Employment could have been terminated for Cause,
the Executive's Employment shall, at the election of the Company, in its sole
discretion, be deemed to have been terminated for Cause.
(f) "Chairman" shall mean Xxxxx X. Xxxxx or a successor Chairman of the
Company or its Affiliates.
(g) "Commission" shall mean the U.S. Securities and Exchange
Commission.
(h) "Common Stock" shall mean the common stock of the Company,
excluding the class A common stock.
(i) "Company Notice" shall have the meaning set forth in Section 3.7
herein.
(j) "Company Stock" shall mean the common stock of the Company,
including both the class A common stock and the Common Stock.
(k) "Corporate Event" shall mean the date that (i) more than 50% of the
shares of Company Stock, by vote and by value, are owned by persons other than
the Majority Stockholder or employees or employee benefit plans of the Company
or its Affiliates, or (ii) all or substantially all of the assets of the Company
are sold to persons other than the Majority Stockholder or employees or employee
benefit plans of the Company or its Affiliates.
(1) "Disability" shall mean a permanent disability as defined in Kroll
Associates' long-term disability plan.
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(m) "Employment" shall mean employment with the Company or any
Affiliate. "Employee" and "Employed" shall have correlative meanings.
(n) "Fair Value" shall mean, as of any Valuation Date, the fair value
of a share of Common Stock, as determined by the Appraiser, and shall be equal
to the fair value of the Company as of such Valuation Date (determined in
accordance with the considerations listed below), divided by the sum of the
total number of shares of Company Stock issued and outstanding as of the
Valuation Date and the total number of options or any other instruments that
provide rights to acquire shares of Company Stock outstanding as of such
Valuation Date. The fair value of the Company shall be the price at which the
Common Stock would change hands between a willing buyer and a willing seller
when the former is not under any compulsion to buy and the latter is not under
any compulsion to sell, both parties having reasonable knowledge of relevant
facts. In determining the fair value of the Company, the Appraiser will consider
the financial condition and operating results and prospects of the Company,
including: balance sheet, historical and at the Valuation Date; assets;
liabilities; book value; historical operating results, particularly profits
generated and factors affecting profits; dividends paid historically and
dividend-paying capacity; budgets; plans and projections of future performance;
and prospects at the Valuation Date. Fair Value shall be determined by an
appraisal conducted as of each Valuation Date, and continuing for so long as
Fair Value shall be required to be determined under this Agreement. Such
appraisal shall be conducted following the release of the Company's audited
annual financial statements for the year ending on such Valuation Date. The
Company shall be responsible for the costs of such appraisal.
(o) "Grant Date" shall mean the Grant Date as defined in Section 2.2
herein.
(p) "Kroll Associates" shall mean Xxxxx Associates, Inc.
(q) "Majority Stockholder" shall mean Xxxxx X. Xxxxx and his family and
their respective donees, estates and heirs.
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(r) "Note Purchase Agreement" shall mean any long-term debt, credit or
other agreements or arrangements entered into by the Company or its Affiliates.
(s) "Options" shall mean the options to purchase Common Stock granted
to the Executive under this Agreement.
(t) "Permitted Disposition" shall have the meaning set forth in Section
3.2 herein.
(u) "Permitted Transferee" shall mean a Transferee who receives his
interest in Common Stock as the result of a Permitted Disposition, PROVIDED that
the Transferee becomes a party to this Agreement as provided in Section 3.1.
(v) "Person" shall mean an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
(w) "Public Offering" shall mean an offer for sale of shares of Company
Stock pursuant to an effective registration statement filed by the Company which
issued such shares pursuant to the Securities Act.
(x) "Put Notice" shall have the meaning set forth in Section 3.6(b).
(y) "Securities Act" shall mean the Securities Act of 1933, as amended.
(z) "Selling Stockholder" shall have the meaning set forth in Section
3.7 herein.
(aa) "Stockholder Notice" shall have the meaning set forth in Section
3.7 herein.
(bb) "Transfer" shall mean any transfer, sale, assignment, gift,
testamentary transfer, pledge, hypothecation or other disposition of any
interest. "Transferee" and "Transferor" shall have correlative meanings.
(cc) "Trustee" shall mean a trustee chosen by the Executive and
consented to by the Majority Stockholder, such consent not to be unreasonably
withheld.
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(dd) "Valuation Date" shall mean December 31 of each year, commencing
with December 31, 1995.
(ee) "Vesting Date" shall mean the date the Options become exercisable
as defined in Section 2.3 herein.
2. OPTIONS
The Company hereby grants to the Executive Options to purchase 1098
shares of Common Stock of the Company at $150.00 per share, subject to the
following terms and conditions:
2.1 IDENTIFICATION OF OPTIONS. The Options granted under this Agreement
shall be non-qualified stock options which are not entitled to tax treatment as
incentive stock options under Section 422 of the Internal Revenue Code of 1986.
2.2 GRANT DATE. The Grant Date of the Options shall be the date this
Agreement is executed.
2.3 VESTING DATE OF OPTIONS. Fifty percent of the Options granted
pursuant to this Agreement are immediately exercisable on the Grant Date and the
remaining fifty percent of the Options shall become exercisable on the earliest
to occur of: (a) June 30, 1997; (b) the date of a Corporate Event; or (c) the
date the Executive's Employment ceases due to (i) Disability, (ii) death, or
(iii) termination by the Company other than for Cause.
2.4 EXPIRATION OF OPTIONS. The Options shall expire on the third
anniversary of the Grant Date defined above, or, if a Corporate Event has
occurred before the third anniversary, on the 10th anniversary of such Grant
Date.
2.5 TERMINATION OF EMPLOYMENT. The Options may only be exercised while
the Executive is Employed and, in the event the Executive's Employment ceases
due to the Executive's Disability, death, termination of Employment at or after
age 65 other than for Cause or termination of Employment by the Company other
than for Cause, for a period of 90
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days after the date of such cessation or termination. In the event the Executive
voluntarily terminates his Employment before age 65, all Options, whether vested
or unvested, shall expire as of the date of such termination.
2.6 TERMINATION FOR CAUSE. In the event the Executive's Employment is
or is deemed to have been terminated by the Company for Cause, all Options,
whether vested or unvested, shall expire at the commencement of business as of
the date of such termination.
2.7 LIMITATION ON TRANSFER. During the lifetime of the Executive, the
Options shall be exercisable only by him. No Option shall be assignable or
transferable otherwise than by will or by the laws of descent and distribution.
2.8 EXERCISE OF OPTIONS. The Options shall be exercisable in whole or
in part; provided, that no partial exercise of the Options shall be for an
aggregate exercise price of less than $1000. The partial exercise of the
Options, alone, shall not cause the expiration, termination or cancellation of
the remaining Options.
2.9 EXERCISE OF OPTIONS BY BENEFICIARY(IES). Before any beneficiary or
beneficiaries of the Executive may exercise the Options granted herein upon the
Executive's death, such beneficiary or beneficiaries must agree to be bound by
this Agreement, including, without limitation, the restrictions on Common Stock
provided in Section 3 herein, as if they had been original signatories hereto.
2.10 METHOD OF EXERCISE. The Options shall be exercised by delivery of
written notice to the Company's principal office, to the attention of its
Secretary, no less than one business day in advance of the effective date of the
proposed exercise. Such notice shall (a) specify the number of shares of Common
Stock with respect to which the Options are being exercised, the effective date
of the proposed exercise and any request with respect to withholding taxes
pursuant to Section 2.13, (b) be signed by the Executive or his
beneficiary(ies), as the case may be, and (c) if the Options are being exercised
by the Executive's beneficiary(ies), such beneficiary or beneficiaries shall
indicate in writing that they agree to and shall be bound by this Agreement as
if they had been original signatories hereto.
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2.11 CERTIFICATES OF SHARES. Upon the exercise of the Options,
certificates of shares of Common Stock, legended as provided in Section 3.4,
shall be issued in the name of the Executive or his beneficiary(ies), as the
case may be, and delivered to the Executive or his beneficiary(ies), as the case
may be, as soon as practicable following the effective date on which the Options
are exercised.
2.12 COMPLIANCE WITH APPLICABLE LAW. Notwithstanding anything herein to
the contrary, the Company shall not be required to issue or deliver any
certificates evidencing shares of Common Stock pursuant to the exercise of any
Options, unless and until the Company has determined, with advice of counsel,
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Common Stock are listed or
traded. The Company shall in no event be obligated to register such shares of
Common Stock or to take any other action in order to comply with any such law,
regulation or requirement with respect to the issuance and delivery of such
certificates. In addition to the terms and conditions provided herein, the
Company may require that a Participant make such covenants, agreements and
representations as the Company, in its sole discretion, deems necessary in order
to comply with any such laws, regulations or requirements.
2.13 WITHHOLDING TAXES. At the time that the Executive exercises all or
part of his Options, the Executive may notify the Company and request, in
writing, that the Company withhold a portion of the shares that are to be
distributed to the Executive to satisfy the applicable federal, state and local
withholding taxes incurred in connection with the exercise of the Options.
Otherwise, the Executive must pay to the Company in cash an amount sufficient to
satisfy such withholding taxes.
2.14 ADMINISTRATION OF OPTIONS.
(a) TERMINATION OF THE OPTIONS. The Board may, at any time, in its
absolute discretion, without amendment to this Agreement, terminate the Options
then outstanding, whether or not exercisable, provided, however, that the
Company, in full consideration of such termination, pays to the Executive an
amount in cash for each such Option equal to either (i) if
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the date of termination occurs prior to a Public Offering, the excess of (x) the
Fair Value of the shares of Common Stock subject to the Options as of the
Valuation Date either (1) immediately preceding the date of termination if such
date is on or before June 30, or (2) immediately succeeding the date of
termination if such date is after June 30 but before January 1 of the following
calendar year, over (y) the exercise price of the Options, or (ii) if the date
of termination occurs coincident with or following a Public Offering, the excess
of (x) the fair market value of each share of Common Stock as of the date of
termination over (y) the exercise price of the Options.
(b) AMENDMENT OF TERMS OF OPTIONS. The Board may, in its absolute
discretion, amend the terms of the Options, provided, however, that any such
amendment shall not impair the Executive's rights under such Options without the
Executive's consent.
2.15 ADJUSTMENT UPON CHANGES IN COMPANY STOCK.
(a) INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION.
Subject to any required action by the stockholders of the Company, in the event
of any increase or decrease in the number of issued shares of Company Stock
resulting from a subdivision or consolidation of shares of Company Stock or the
payment of a stock dividend (but only on the shares of Company Stock), or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Board shall proportionally adjust the
number of shares of Common Stock subject to the Options and the exercise price
per share of Common Stock of each such Option.
(b) CERTAIN MERGERS. Subject to any required action by the stockholders
of the Company, in the event that the Company shall be the surviving corporation
in any merger or consolidation (except a merger or consolidation as a result of
which the holders of shares of Common Stock receive securities of another
corporation), the Options outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common Stock subject to such Options would have received in
such merger or consolidation.
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(c) CERTAIN OTHER TRANSACTIONS. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation involving the Company in which
the Company is not the surviving corporation or (iv) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Company Stock receive securities of another corporation
and/or other property, including cash, the Board shall, in its absolute
discretion, have the power to:
(A) cancel, effective immediately prior to the occurrence of
such event, the Options outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Executive an amount in cash, for each share of
Common Stock subject to the Options, equal to the excess of (1) the
value, as determined by the Board in its absolute discretion, of the
property (including cash) received by the holder of a share of Common
Stock as a result of such event over (2) the exercise price of the
Options; or
(B) provide for the exchange of each Option outstanding
immediately prior to such event (whether or not then exercisable) for
an option on or stock appreciation right with respect to, as
appropriate, some or all of the property for which such Options are
exchanged and, incident thereto, make an equitable adjustment, as
determined by the Board in its absolute discretion, in the exercise
price of the options or stock appreciation rights, or the number of
shares or amount of property subject to the options or stock
appreciation rights or, if appropriate, provide for a cash payment to
the Executive in partial consideration for the exchange of the Options.
(d) OTHER CHANGES. In the event of any change in the capitalization of
the Company or a corporate change other than those specifically referred to in
Sections 2.15(a), (b) or (c) hereof, the Board may, in its absolute discretion,
make such adjustments in the number and class of shares subject to Options
outstanding on the date on which such change occurs and in the per-share
exercise price of each such Option as the Board may consider appropriate to
prevent dilution or enlargement of rights.
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(e) NO OTHER RIGHTS. Except as expressly provided in this Agreement,
the Executive shall not have any rights by reason of any subdivision or
consolidation of shares of Common Stock or shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of
Common Stock or shares of stock of any class or any dissolution, liquidation,
merger or consolidation of the Company or any other corporation. Except as
expressly provided in this Agreement, no issuance by the Company of shares of
Common Stock or shares of stock of any class, or securities convertible into
shares of Common Stock or shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to the Options or the exercise price of the Options.
2.16 RIGHTS AS A STOCKHOLDER. The Executive shall not have any rights
as a stockholder with respect to any shares of Common Stock covered by or
relating to the Options granted pursuant to this Agreement until the date the
Executive becomes the registered owner of such shares. Except as otherwise
expressly provided in Sections 2.14 and 2.15 hereof, no adjustment to the
Options shall be made for dividends or other rights for which the record date
occurs prior to the date such stock certificate is issued.
2.17 NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in this Agreement
shall confer upon the Executive any right with respect to the continuation of
his Employment or interfere in any way with the right of the Company or an
Affiliate, subject to the terms of any separate Employment agreement to the
contrary, at any time to terminate such Employment or to increase or decrease
the compensation of the Executive from the rate in existence at the time of the
grant of the Options.
2.18 NO OBLIGATION TO EXERCISE. The grant to the Executive of the
Options shall impose no obligation upon the Executive to exercise such Options.
3. RESTRICTIONS ON COMMON STOCK
Upon the exercise of the Options provided in Section 2 above, the
rights and obligations of the Executive and his Permitted Transferees with
respect to Common Stock
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obtained through the exercise of the Options provided under this Agreement shall
be governed by the following terms and conditions.
3.1 LIMITATION ON TRANSFER OF COMMON STOCK. The Executive shall not
Transfer any shares of Common Stock except as provided in this Agreement. It
shall be a condition precedent to any Transfer of shares of Common Stock by the
Executive (but excluding Transfers referred to in Section 3.5 (Public Offerings)
hereof) that the Transferee, if not already a party to this Agreement, shall
agree prior to the Transfer in writing with the Company and the other parties
hereto to be bound by the terms of this Agreement as if it had been an original
signatory hereto.
3.2 PERMITTED DISPOSITION. The Executive shall be entitled to Transfer
shares of Common Stock, at any time and from time to time, (a) if such Transfer
is a testamentary transfer effected by operation of law or by will, (b) to a
trust for the benefit of the Executive or the Executive's spouse, issue or
siblings, or (c) pursuant to and in accordance with sections 3.5 (Public
Offering), 3.6 (Puts), 3.7 (Right of First Refusal), 3.8 (Calls), 3.9
(Tag-Alongs) and 3.10 (Drag-Alongs).
3.3 EFFECT OF VOID TRANSFERS. In the event of any purported Transfer of
any shares of Common Stock in violation of the provisions of this Agreement,
such purported Transfer shall, to the extent permitted by applicable law, be
void and of no effect, and, until such time as a Transfer in compliance with
this Agreement shall have occurred, (a) no dividend of any kind whatsoever nor
any distribution pursuant to liquidation or otherwise shall be paid to the
purported Transferee in respect of such shares, (b) the voting rights of such
shares, if any, on any matter whatsoever shall remain vested in the Transferor,
(c) the Transferor shall continue to be bound with respect to its obligations
hereunder as the holder of such shares and (d) no such purported Transfer in
violation of this Agreement shall be registered by the Company on its books of
registry.
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3.4 SECURITIES ACT; LEGENDS ON STOCK; NOTICE OF TRANSFER.
(a) LEGENDS ON STOCK. Upon the exercise of the Options, each stock
certificate representing shares of Common Stock (prior to a Public Offering
pursuant to Section 3.5) shall bear a legend in substantially the following
form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, (the "Act") or
under any state securities or blue sky laws and may not be transferred
in the absence of such registration or any exception therefrom under
such Act or under such state securities or blue sky laws.
The shares represented by this certificate may not be sold,
assigned, transferred, exchanged, mortgaged, pledged or otherwise
disposed of or encumbered except in compliance with the provisions of
that certain Stock Option and Stockholders' Agreement, dated as of
January 29, 1996, as it may be amended, among Xxxxx Holdings, Inc.,
Xxxxx X. Xxxxx, and Xxxxxxxxx X. Xxxxxxxx. A copy of such Stock Option
and Stockholders' Agreement, and any amendments thereto, is on file and
available for inspection at the principal offices of Xxxxx Holdings,
Inc.
(b) NOTICE OF TRANSFER. Prior to any Transfer of shares of Common Stock
by the Executive or his Permitted Transferees, the Executive or his Permitted
Transferees will give written notice to the Company of his intention to effect
such Transfer. The following provisions shall then apply:
(i) If in the opinion of the Company's counsel the proposed
Transfer may be effected without registration of such shares under the
Securities Act, the Company shall, as promptly as practicable, so
notify the Executive and he shall thereupon be entitled, subject to the
other provisions of this Agreement, to Transfer such shares in
accordance with the terms of the notice delivered by him to the
Company.
(ii) If such counsel is unable to conclude that the proposed
Transfer may be effected without registration of such shares under the
Securities Act, the Company will, as promptly as practicable, so notify
the Executive and thereafter he shall not be entitled to Transfer such
shares until either such shares have been effectively registered
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under the Securities Act or the provisions of this subdivision (b) of
this Section 3.4 have otherwise been complied with, it being understood
that the Company will not be requested or required to register such
shares of Common Stock.
3.5 PUBLIC OFFERING. In the event of a Public Offering, the Executive
shall be entitled, without the consent of any other Stockholder, to Transfer any
or all of his shares of Common Stock, at any time and from time to time
following such Public Offering. The Company has not made any commitment to
effect a Public Offering of its shares or otherwise register such shares for
resale.
3.6 EXECUTIVE'S RIGHT TO PUT SHARES TO THE COMPANY
(a) PUT RIGHTS. The Executive or his Permitted Transferees shall have
the right to sell to the Company, and the Company shall have the obligation to
purchase from the Executive or his Permitted Transferees, the shares of Common
Stock obtained as a result of exercising the Options in accordance with the
terms of this Section 3.6.
(b) PUT NOTICE. No more than once each twelve-month period, the
Executive or his Permitted Transferees may elect to sell their shares of Common
Stock to the Company by delivering written notice (the "Put Notice") to the
Company specifying the number of shares of Common Stock such Executive or his
Permitted Transferees wish to sell to the Company.
(c) NUMBER OF SHARES. The Executive and his Permitted Transferees shall
have the right to sell to the Company, and the Company shall be obligated to
purchase, in any calendar year, no more than 1/3 of the total number of shares
of Common Stock that the Executive obtained as a result of exercising the
Options granted hereunder.
(d) PAYMENT FOR SHARES. Following receipt of the Put Notice pursuant to
this Section 3.6, the Company shall tender to the Executive or Permitted
Transferee a certified check in an amount equal to the product of the number of
shares of Common Stock being sold and the Fair Value of a share of Common Stock.
The Fair Value shall be determined as of the Valuation Date either (i)
immediately preceding the date the Company received the Put Notice if such date
is on or before June 30, or (ii) immediately succeeding the date the Company
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received the Put Notice if such date is after June 30 but before January 1 of
the following calendar year. The Company may delay such payment for a reasonable
time pending the availability of the necessary financial information and the
calculation of Fair Value by the Appraiser. Regardless of whether payment has
been delayed by the Company pursuant to this Section 3.6, the Executive or
Permitted Transferee shall deliver to the Company stock certificates for
such shares of Common Stock, duly endorsed in blank as soon as practicable after
delivery of the Put Notice.
(e) RESTRICTION ON RIGHT TO PUT. The Company shall not be obligated to
purchase shares of Common Stock from the Executive or Permitted Transferee if,
at the time payment for such shares of Common Stock would be required to be
made, (i) such payment would result in a breach of, or could constitute an event
of default under, any Note Purchase Agreement; (ii) an event of default of any
Note Purchase Agreement has occurred and is continuing; or (iii) such payment
would violate applicable law.
(f) EXPIRATION OF PUT RIGHTS. The Put Rights shall expire on the date
that a Public Offering of Company Stock occurs.
3.7 EXECUTIVE RIGHT TO TRANSFER AND COMPANY RIGHT OF FIRST REFUSAL.
Following the fifth anniversary of the date of this Agreement and prior to a
Public Offering, the Executive and his Permitted Transferees shall have the
right (subject to the other terms of this Agreement) to Transfer any shares of
Common Stock held by such holder(s) in accordance with the terms of this Section
3.7. In the event that such holder(s) obtains from an independent purchaser a
good xxxxx XXXX FIDE offer to purchase shares of Common Stock held by such
holder, he shall promptly notify the Company in writing of the name and address
of such independent purchaser and inform the Company of the status of such
negotiations. When and if such holder (a "Selling Stockholder") decides to
Transfer any such shares of Common Stock, such Selling Stockholder shall
promptly deliver to the Company a copy of such good xxxxx XXXX FIDE offer along
with the identity of the independent purchaser and a written notice that, unless
the Company exercises its rights granted in this Section 3.7, such Selling
Stockholder will Transfer his shares of Common Stock in accordance therewith
(the
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"Stockholder Notice"). At any time during the ten business days following
receipt of the Stockholder Notice, the Company may give such Selling Stockholder
notice of exercise of its right to purchase all, but not less than all, of the
shares of Common Stock which the Selling Stockholder has given notice of his
intention to Transfer in the Stockholder Notice (the "Company Notice"). Upon
receipt of the Company Notice, the Selling Stockholder shall sell the shares of
Common Stock described in the Stockholder Notice to the Company at a price equal
to the product of the number of shares of Common Stock being sold and the Fair
Value of a share of Common Stock as of the Valuation Date either (i) immediately
preceding the date of the Company Notice if such date is on or before June 30,
or (ii) immediately succeeding the date of the Company Notice if such date is
after June 30 but before January 1 of the following calendar year. The Company
may delay such payment for a reasonable time pending the availability of the
necessary financial information and the calculation of Fair Value by the
Appraiser. Regardless of whether the Company delays such payment pursuant to
this Section 3.7, if the Company exercises its right of first refusal under this
Section 3.7, the Executive or Permitted Transferee shall deliver to the Company
stock certificates for such shares of Common Stock, duly endorsed in blank, as
soon as practicable after receipt of the Company Notice. If the Selling
Stockholder shall not receive the Company Notice as provided in the foregoing
sentence, he shall have the right to Transfer all, but not less than all, of the
shares of Common Stock offered for Transfer in the Stockholder Notice to the
independent purchaser specified in the Stockholder Notice, for the consideration
and in accordance with the terms and conditions set out in such Stockholder
Notice and in compliance with the terms of this Agreement, PROVIDED that such
Selling Stockholder shall not Transfer any shares of Common Stock to (i) any
Person, or Affiliate of such Person, who competes, or is expected to compete,
with the Company or any of its Affiliates, (ii) any Person, or Affiliate of such
Person, who the Company determines (in its sole discretion) might cause harm to
the Company by virtue of becoming a stockholder of the Company, (iii) any bank
or other financial institution for the purpose of pledging or granting a
security interest in such shares of Common Stock in order to secure indebtedness
of such Selling Stockholder, or (iv) any other shareholder of the Company
without the written consent of the Majority Stockholder, or (v) any Person, or
Affiliate of such Person, which has a material adverse interest to, or is
involved in a pending or threatened
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litigation or legal proceeding with, the Company, the Majority Stockholder or
any of their Affiliates.
3.8 COMPANY CALL RIGHTS
(a) In the event that the Executive ceases to be Employed for any
reason other than (1) death, (2) Disability, or (3) termination at or after age
65 (other than a termination by the Company for Cause), the Company shall have
the right to purchase from such Executive and all of his Permitted Transferees,
and such Executive and all of his Permitted Transferees shall have the
obligation to sell to the Company, all (but not less than all) of such
Executive's and/or his Permitted Transferee's shares of Common Stock at a price
equal to the product of (i) the number of shares of Common Stock being purchased
and (ii) the Fair Value of a share of Common Stock as of the Valuation Date
either (x) immediately preceding the Call Date if such Call Date is on or before
June 30, or (y) immediately succeeding the Call Date if such Call Date is after
June 30 but before January 1 of the following calendar year. The Company may
delay such payment for a reasonable time pending the availability of the
necessary financial information and the calculation of Fair Value by the
Appraiser. Regardless of whether the Company delays such payment pursuant to
this Section 3.8, the Executive or Permitted Transferee shall deliver to the
Company stock certificates for such shares of Common Stock, duly endorsed in
blank, as soon as practicable following the Call Date.
(b) The Company's right to purchase shares of Common Stock shall be
exercised by the delivery of a written notice to the Executive or his Permitted
Transferees, specifying the "Call Date," which date shall be not less than one
and no more than ninety days after the date of such notice, on which the Company
shall purchase all (but not less than all) of such shares of Common Stock held
by the Executive and/or his Permitted Transferees.
(c) The Call Rights shall expire on the date that a Public Offering of
Company Stock occurs.
16
17
3.9 EXECUTIVE'S TAG-ALONG RIGHTS.
(a) In the event of a Public Offering or a sale of all or substantially
all of the stock of the Company, the Executive or his Permitted Transferee will
be permitted to participate in such transaction by selling the number of shares
of Common Stock owned by the Executive and all of his Permitted Transferees as a
result of exercising the Options provided herein equal to the product of the
number of shares of Common Stock owned by the Executive and all of his Permitted
Transferees and a fraction, the numerator of which is the total number of shares
of Common Stock proposed to be sold by the Majority Stockholder (before giving
effect to this provision) and the denominator of which is the total number of
shares of Common Stock then owned by the Majority Stockholder and his Permitted
Transferees plus the total number of shares of Common Stock owned on or before
the fifth business day prior to the date of such Public Offering or sale, by any
other Stockholder of the Company entitled to participate in such sale. The
Company shall notify the Executive in writing of such Public Offering or sale,
indicating the price and other material terms and conditions of the proposed
sale and the intended closing date of such sale. Any purchase from the Executive
under this Section 3.9 shall be at the same price per share of Common Stock and
on the same terms and conditions as apply to the purchase from the Majority
Stockholder. The Executive shall give the Company written notice of how many
shares of Common Stock he and all of his Permitted Transferees desire to sell
within 10 days of receiving notice of the proposed transaction. If the Company
docs not receive notice from the Executive or his Permitted Transferees within
such ten day period, the Executive and/or his Permitted Transferees shall be
deemed to have elected not to exercise the rights under this Section 3.9 and the
Company may complete the proposed Public Offering or sale at the price and on
the terms and conditions of the notice to the Executive.
(b) The Company shall have the right, but not the obligation, to
satisfy the Executive's Tag-Along Rights by redeeming the number of shares of
Common Stock the Executive is entitled to sell under this Section 3.9 in lieu of
allowing the Executive to participate in the sales transaction. On the date
specified by the Company in a written notice to the Executive for such
redemption, the Company shall tender to the Executive or Permitted Transferee a
certified check in the amount equal to the product of the number of shares of
17
18
Common Stock being redeemed and the price per share of Common Stock being paid
in the sales transaction and the Executive or Permitted Transferee shall deliver
to the Company stock certificates for such shares of Common Stock, duly endorsed
in blank.
3.10 MAJORITY STOCKHOLDER'S DRAG-ALONG RIGHTS. In the event that the
Majority Stockholder or any of his Permitted Transferees agree to sell all or
substantially all of their shares of Company Stock, the Majority Stockholder
shall have the right, but not the obligation, to require the Executive and all
of his Permitted Transferees to sell, and the Executive and all of his Permitted
Transferees shall have the obligation to sell, under the same terms and
conditions that are applicable to the sale by the Majority Stockholder and at
the same time as such sale, up to that total number of shares of Common Stock
owned by the Executive and all of his Permitted Transferees obtained by
multiplying (a) the total number of shares of Common Stock that are proposed to
be sold (before giving effect to this provision) by the Majority Stockholder and
all of his Permitted Transferees, by (b) a fraction, the numerator of which is
the total number of shares of Common Stock owned on or before the fifth business
day prior to the date of such sale by the Executive and all of his Permitted
Transferees and the denominator of which is the total number of shares of Common
Stock owned by the Majority Stockholder and all of his Permitted Transferees.
4. CERTAIN VOTING AGREEMENTS
4.1 OBLIGATION TO BE COUNTED FOR A QUORUM. Once the Options are
exercised, the Executive and all of his Permitted Transferees agree to be
present in person or represented by proxy at all meetings of the stockholders of
the Company, so that all shares owned by the Executive or his Permitted
Transferees may be counted for the purpose of determining the presence of a
quorum at such meetings.
4.2 VOTING BY STOCKHOLDERS. Once the Options are exercised, the
Executive agrees to vote any shares of Common Stock owned by him, and to cause
all of his Permitted Transferees to vote any shares of Common Stock owned by
such Permitted Transferees, whether by note, ballot, proxy or written consent,
in any vote of the stockholders of the Company in the same manner as the
Majority Stockholder, or upon the death of the Majority
18
19
Stockholder, in the same manner as the holders of a majority of the shares held
by the Permitted Transferees of the Majority Stockholder.
5. MISCELLANEOUS
5.1 INTERPRETATION OF THIS AGREEMENT. The Board shall have full
authority to interpret and construe any provision of this Agreement, including,
without limitation, the terms of the Options provided hereto and the terms and
restrictions on shares of Common Stock obtained as a result of the exercise of
such Options, and to adopt such rules and regulations for administering such
provisions as it may deem necessary or appropriate. Decisions of the Board shall
be final and binding on all parties.
5.2 AMENDMENTS. This Agreement may be amended only by a written
instrument signed by all of the parties hereto, except with respect of the
Options as provided in Section 2.
5.3 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party hereto upon any breach or default of any
party under this Agreement, shall impair any such right, power or remedy of such
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of or in any similar breach or default thereafter
occurring nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, shall be in
writing and shall be effective only to the extent specifically set forth in such
writing.
5.4 INTEGRATION. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.
19
20
5.5 OTHER STOCKHOLDERS' AGREEMENTS. The Executive or his respective
Permitted Transferees shall not enter into any stockholder agreement or
arrangement of any kind with any person with respect to the shares of Common
Stock received pursuant to the Options provided herein inconsistent with the
provisions of this Agreement (whether or not such agreement or arrangement is
with other stockholders that are not parties to this Agreement).
5.6 SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and each of
their respective successors, assigns and Transferees, PROVIDED that the
Executive may not assign to any Person any of his rights hereunder other than in
connection with a Transfer to such Person of shares in accordance with the
provisions hereof.
5.7 Notices. All notices and other communications hereunder shall be in
writing and shall be given and shall be deemed to have been duly given if
delivered in person, by cable, telegram, telex or facsimile transmission, to the
parties as follows:
If to the Executive:
To the address shown on the attached signature page.
If to the Majority Stockholder:
Xxxxx Associates, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTENTION: Xxxxx X. Xxxxx
If to the Company:
Kroll Holdings, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTENTION: General Counsel and Secretary
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
20
21
5.8 DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of the terms contained herein.
5.9 SEVERABILITY. In the event that any one or more of the provisions,
subdivisions, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, subdivision, word, clause, phrase or
sentence in every other respect and of the remaining provisions, subdivisions,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
5.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
5.11 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
regard to the provisions governing conflict of laws.
5.12 INJUNCTIVE RELIEF. The Executive acknowledges and agrees that a
violation of any of the terms of this Agreement will cause the Company
irreparable injury for which adequate remedy at law is not available. Therefore,
the Executive agrees that the Company shall be entitled to an injunction,
restraining order or other equitable relief from any court of competent
jurisdiction, restraining the Executive and/or any of his Permitted Transferees
from committing any violations of the provisions of this Agreement.
21
22
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed on its behalf as of the date first
written above.
KROLL HOLDINGS, INC.
By:/s/ Xxxxxx X. XxXxxxx
------------------------
Title:
MAJORITY STOCKHOLDER:
/s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx X. Xxxxx
EXECUTIVE:
/s/ N.E. Paciotti
---------------------------
Xxxxxxxxx X. Xxxxxxxx
Address:
22
23
Author: Xxxxx Xxxx at KAHK
Date: 6/16/97 12:16 PM
Priority: Normal
CC: Nazz Paciotti at KANY
TO: Xxxx Xxxxx Xxxxx at KANY
Subject: Re: JF Provident Fund Series
------------------------Message Contents------------------------
Dear Xxxx,
The Hong Kong Pension Plan is still governed by the Deed of Adherence. Under the
Occupational Retirement Schemes Ordinance, employers who operate an occupational
retirement scheme are required to apply to the Registrar of Occupational
Retirement Schemes for registration of their schemes. In order to enable
registration and fully compliance with the requirements of the Ordinance, the
Plan is to be re-structured. That's about the amendment.
Our Plan was officially registered on June 21, 1996 (a copy of the Certificate
of Registration will be couriered to you).
There is no change in the Plan (a copy of the Deed of Adherence will also be
couriered to you).
I only have 2 years' history & will courier to you. A Trustee's Report &
Accounts will also be couriered to you for your reference.
Actually, there are programs similar to the pension scheme. I will also courier
the details for your info.
Apart from that, as stated the employment contract, they are also entitled to 4%
on the monthly salary as a retirement allowance. This is not a formal pension
plan.
Please let me know if you need any info.
Xxxxx
24
Occupational Retirement Schemes Ordinance (Cap. 426)
Certificate of Registration
This certificate is issued under section 18 of the Occupational Retirement
Schemes Ordinance in respect of the occupational retirement scheme named below:
Registration number:
R014521(0)
Date of registration:
21st June, 1996
Name of the scheme:
XXXXX ASSOCIATES (ASIA) LIMITED
PROVIDENT FUND
Name of the relevant employer:
XXXXX ASSOCIATES (ASIA) LIMITED
Issued by the Registrar of Occupational Retirement Schemes on:
21st June, 1996
/s/ Xxxxxxx Xxx
(Xxxx Xxxxxxx Xxx)
for Registrar of Occupational
Retirement Schemes
25
DATED OCT. 5 , 1995
_______________
XXXXX ASSOCIATES (ASIA) LIMITED
(AS EMPLOYER)
AND
ROYAL BANK OF CANADA TRUST COMPANY (CAYMAN) LIMITED
(AS TRUSTEE)
AND
JARDINE XXXXXXX TRUST MANAGEMENT LIMITED
(AS SPONSOR)
----------------------------
SECOND SUPPLEMENTAL DEED OF ADHERENCE
RE EXISTING SCHEME RELATING TO
XXXXX ASSOCIATES (ASIA) LIMITED
PROVIDENT FUND
AND PARTICIPATING IN THE JF PROVIDENT PLAN FORMERLY
THE JARDINE XXXXXXX POOLED PROVIDENT FUND
----------------------------
26
SECOND SUPPLEMENTAL DEED OF ADHERENCE
RE
XXXXX ASSOCIATES (ASIA) LIMITED PROVIDENT FUND
PARTICIPATING IN JF PROVIDENT PLAN
DATED OCT. 5, 1995
-----
PARTIES
-------
(1) XXXXX ASSOCIATES (ASIA) LIMITED the registered office of which is at
Room 906-911 Mount Xxxxxx House, 0000 Xxxx'x Xxxx, Xxxxxx Xxxxx, Xxxx
Xxxx;
(2) ROYAL BANK OF CANADA TRUST COMPANY (CAYMAN) LIMITED the
registered office of which is at X.X. Xxx 000, Xxxxx Xxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx Xxxx Indies;
(3) JARDINE XXXXXXX TRUST MANAGEMENT LIMITED the registered office
of which is at X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx
Xxxxxx Xxxxxxx.
RECITALS
--------
(A) This Deed is supplemental to the Master Trust Deed and Deed of
Adherence (as amended).
(B) The Employer wishes to register its participation pursuant to the
provisions of the Occupational Retirement Schemes Ordinance and has
agreed to enter into this Deed and to amend the Rules as applicable to
it as hereinafter provided.
(C) The Deed of Variation and Trust was approved by an Extraordinary
Resolution of Custodians.
PROVISIONS
----------
1. INTERPRETATION
1.1 In this Deed including the Recitals unless the context otherwise requires
the following words and expressions shall have the meanings ascribed to them:-
1
27
"DEED OF ADHERENCE"
the Deed of Adherence 28th March 1990 and made between the
Employer and the Trustee as amended by a Deed of Variation
dated 18th December 1990;
"DEED OF VARIATION AND TRUST"
the seventh supplemental trust deed called a Deed of Variation
and Trust dated Oct. 5 1995 and made between Jardine Xxxxxxx
Trust Management Limited and Royal Bank of Canada Trust
Company (Cayman) Limited by which the terms of the Master
Trust Deed were amended by the substitution of the terms of
the Deed of Variation and Trust therefor as the same may in
future be amended in accordance with its terms;
"EMPLOYER"
the said Xxxxx Associates (Asia) Limited;
"MASTER TRUST DEED"
the Master Trust Deed dated 15th June 1988 by which the
parties to the Master Trust Deed Jardine Xxxxxxx Management
Inc as Manager and Royal Bank of Canada Trust Company (Cayman)
Limited established the Jardine Xxxxxxx Pooled Provident Fund
as amended by First Supplemental Trust Deed dated 16th August
1988, a Second Supplemental Trust Deed dated 27th January
1989, a Third Supplemental Trust Deed dated 3rd July 1989, a
Fourth Supplemental Trust Deed dated 12th November 1992 and a
Fifth Supplemental Trust Deed dated 1st February 1993 and a
Sixth Supplemental Trust Deed dated 12th December 1994 and the
Deed of Variation and Trust;
1.2 In this Deed including the Recitals words and expressions defined in the
Deed of Variation and Trust shall have the same meanings in this Deed.
2. SUPPLEMENTAL
2.1 This Deed is supplemental to the Deed of Adherence and the Master Trust
Deed.
2.2 This Deed is entered into pursuant to Clause 6.2 of the Deed of
Variation and Trust.
3. EFFECTIVE DATE
The parties hereby agree and confirm that the effective date shall be
Oct. 5, 1995 the date of the Deed of Variation and Trust.
4. EMPLOYER'S COVENANT
The Employer shall hereby become an Employer for the purposes of the
Plan and gives the warranties and covenants as provided in Clause 8 of the Deed
of Variation and Trust. The Employer covenants to comply with the provisions of
the Master Trust Deed as from time to time in force and further to perform any
act or pay any sum required by law to be done or paid
-2-
28
by it as Employer for the Plan to be lawfully carried on in Hong Kong insofar as
attributable to the Employer.
5. EMPLOYER'S PAYMENT OF SUBSCRIPTIONS
The Employer hereby agrees to pay, or procure that payment be made, to
the Plan of all Contributions payable by the Employer and all Deductions
deducted from the salaries of Members employed by the Employer and all other
payments payable in accordance with these presents directly or by way of
indemnity or otherwise to the Trustee for account of the Plan or the Trustee for
its own account or to the Sponsor.
6. INDEMNITY BY EMPLOYER
The Employer shall indemnify the Trustee and the Sponsor for any loss,
cost or expense resulting directly or indirectly from any breach by it of its
obligations as Employer contained in these presents.
7. COVENANT OF THE TRUSTEE
The Trustee hereby extends to the Employer the covenants in Clause 10
of the Deed of Variation and Trust.
8. RULES
The parties hereto adopt the Rules as set out in the First Schedule
hereto in substitution for the existing Rules of the Xxxxx Associates (Asia)
Limited Provident Fund being the Rules as set out in Part A of the Second
Schedule of the Deed of Variation and Trust varied as set Out below and in the
event of any discrepancy between the variations below and the First Schedule the
terms of variation below shall prevail. The adoption of the Rules shall not
affect the continuance in membership of all Members as at the date of this Deed
who shall continue as such but henceforth subject to the revised Rules.
(a) Rule 1.1 is amended as follows:-
(i) in the definition "Accounting Date" by deleting the
words "30th June" and inserting in lieu thereof the
words "30th November";
(ii) by deleting the definitions "Deductions" and "Deduction
Units";
(iii) by deleting the words "and Deductions units" in the
definition " Employer's Direction";
(iv) by deleting the words "and Deductions" in the
definition "Employer's Mandate";
(v) by deleting the words "or Deduction Unit" in the
definition "Forfeited Unit";
- 3 -
29
(vi) by deleting the words "and Deduction Units" in the
definition "Member's Account";
(vii) by deleting the words "and Deductions" in the
definition "Subscriptions";
(b) Rule 1.2 is amended by deleting the words "or "net
Deductions"";
(c) Rule 3.1 is amended by deleting the words "five per cent (5%)"
and inserting in lieu thereof the words "twelve per cent
(12%)";
(d) Rule 3.2 is amended by deleting the words "or Deduction Unit";
(e) Rule 3.4 is deleted;
(f) Rule 4 is deleted;
(g) Rule 5.3 is amended by deleting the words "and the Deduction
Units";
(h) Rule 6.1 is amended by deleting the words "net Deductions and"
and "or Deduction Units";
(i) Rule 6.3 is amended by deleting the words "and the Deductions"
and "and Deduction Units";
(j) Rule 7 is amended by deleting the words "and Deduction Units"
wherever they appear;
(k) Rule 7.2 is amended by deleting the words "five (5)" and
inserting in lieu thereof the words "three (3)";
(l) Rule 7.6 is amended as follows:
(i) Rule 7.6(a)(i) is deleted;
(ii) Rule 7.6 (a)(ii) by deleting the words "rely on such
notice as provided in Rule 7.6(a)(i)" and inserting in
lieu thereof the words "assume that the Member's
Employment terminated on the date specified in the notice
unless a further notice is given" and by deleting the
existing table and inserting in lieu thereof:
Plan Service of the Member Percentage to be paid
-------------------------- ---------------------
Less than three (3) years Nil
Three (3) years or more
but less than four (4) years 30%
- 4 -
30
Four (4) years or more but
less than five (5) years 60%
Five (5) years or more but
less than six (6) years 75%
Six (6) years or more but
less than seven (7) years 80%
Seven (7) years or more but
less than eight (8) years 85%
Eight (8) years or more but
less than nine (9) years 90%
Nine (9) years or more but
less than ten (10) years 95%
Ten (10) years or more 100%
9. COSTS AND FEES
9.1 The Employer shall pay the Sponsor a fee of HK$7,500 to cover all costs of
the initial registration of its participation in the Plan under ORSO including
the audit fee payable by the Trustee (but not the fee of the Employer's auditor)
and the cost of a solicitors statement and statement of an overseas legal
practitioner and such other costs not payable out of the assets of the Plan in
connection with the Deed of Variation and Trust. The Employer shall be
responsible for the cost of its own legal advice on this Deed or otherwise in
connection with the Plan. Subject thereto, the Employer shall pay all fees costs
and expenses payable by it as Employer in connection with the continued
registration of its participation in the Plan under ORSO or otherwise incurred
or payable in connection therewith in respect of compliance with ORSO.
9.2 The Employer agrees to pay all costs and expenses otherwise payable out of
the Trust Property pursuant to Clause 42.2 of the Deed of Variation and Trust in
accordance with the provisions of the Deed of Variation and Trust on receipt of
an invoice thereof
9.3 The Switching Fee shall be payable by the Employer at the rate of HK$3,000
on any Switch as provided in Clause 41 of the Deed of Variation and Trust.
10. CONTINUANCE OF TRUST
The parties hereto confirm that nothing herein determines the trusts
established by the Master Trust Deed and Deed of Adherence and the Plan Fund as
defined in the Deed of Adherence shall continue to be held as part of the Trust
Property upon the trusts established by the Deed of Variation and Trust and this
Second Supplemental Deed of Adherence.
-5-
31
11. COMMENCEMENT DATE
The Commencement Date shall be 1st January 1990.
12. INVESTMENT INSTRUCTIONS
The instructions as in effect for the investment of Subscriptions prior
to the Effective Date shall continue as reference to the Growth Fund as Fund
established by the Master Trust Deed now is reference to the JF Provident Growth
Fund and reference to the Guaranteed Fund established by the Master Trust Deed
now is reference to the JF Provident Guaranteed Fund and shall constitute and be
accepted as the Mandate required by these presents. The Employer acknowledges it
has received, read and understood the Summary of Explanatory Memorandum of the
JF Provident Guaranteed Fund and the Summary of Explanatory Memorandum of the JF
Provident Growth Fund and the Investment Choice Advice as issued therewith by
the Trustee and the Sponsor.
13. LAW
This Deed shall be governed by the law of the Cayman Islands.
IN WITNESS whereof the parties hereto have executed this Deed.
Signed sealed and delivered by
Xxxxxxx Xxxxxx, as attorney for )
ROYAL BANK OF CANADA TRUST )
COMPANY (CAYMAN) LIMITED )
in the presence of:- )
/s/????
The Official Seal of )
JARDINE XXXXXXX TRUST )
MANAGEMENT LIMITED )
was hereunto affixed )
in the presence of:- )
/s/????
- 6 -
32
The Common Seal of )
XXXXX ASSOCIATES (ASIA) )
LIMITED )
was hereunto affixed )
in the presence of:- )
/s/????
- 7 -
33
FIRST SCHEDULE
RULES OF THE XXXXX ASSOCIATES (ASIA) LIMITED PROVIDENT FUND A
PARTICIPATING SCHEME IN THE JF-PROVIDENT PLAN
Rules conformed to employer's scheme to be set out
1. INTERPRETATION
1.1 In these Rules, the following words and expressions have the
meaning ascribed to them unless the context otherwise requires:-
"ACCOUNTING DATE"
30th November of each year;
"ALTERNATE SCHEME"
a scheme, plan or trust for the provision of pension, retirement or
provident benefits or any similar purposes which is contributed to by
the Employer or by any Associate of the Employer and which the Employer
shall in the Deed of Adherence specify as an Alternate Scheme or shall
by notice to the Trustee given at any time determine is an Alternate
Scheme;
"ASSOCIATE"
has the meaning ascribed in the Deed;
"BENEFICIARIES"
all or any of the following:-
(a) the Member's spouse,
(b) any of the following relatives of a Member living or en
xxxxxx xx mere at his death, namely, child, parent,
brother or sister or the spouse or child then living or en
xxxxxx xx mere of any such child, parent, brother or
sister and for this purpose:-
(i) a relationship acquired by a process of legal
adoption shall be as valid as a blood
relationship;
(ii) a step child shall be deemed to be a child;
and
(iii) the foregoing relatives shall be construed
as including anyone who would be such a
relative if he or some other person through
whom the relationship is traced had been
born legitimate;
(c) any person who in the opinion of the Trustee was at any
time prior to the death of the Member wholly or
partially financially dependent upon such Member;
- 8 -
34
(d) any person nominated by the Member;
(e) the legal personal representatives of the Member;
"BENEFITS"
any sum due to a Member or his Beneficiaries pursuant to the
provisions of the Rules on Termination of Employment;
"COMMENCEMENT DATE"
the date specified as such in the Deed of Adherence;
"CONTRIBUTIONS"
the amounts paid to the Trustee by an Employer in accordance with Rule
3 and amounts certified to be Contributions pursuant to Rule 12.3 or
otherwise designated as such pursuant to these presents;
"CONTRIBUTION UNITS"
in respect of any Member, the Units from time to time standing to the
credit of a Member's Account being those subscribed for with
Contributions or any interest or income therefrom together with all
Units acquired with the proceeds of redemption of any Contribution Unit
or any interest or income therefrom save where otherwise expressly
provided in the Rules, the same are used to acquire Forfeited Units;
"DEALING DAY"
the day as of which any subscription or purchase of Units may
be made in accordance with the provisions of the relevant
Fund;
"DEED"
the Trust Deed of 15th June 1988 as amended by supplemental deeds, the
seventh such deed re-constituting the trusts being the Deed of
Variation and Trust to which these Rules form Part A of the Second
Schedule as from time to time varied, altered or modified in accordance
with the provisions thereof;
"DEED OF ADHERENCE"
the deed of adherence executed by the Employer pursuant to
which the Employer participates in the Plan as from time to
time amended;
"DIRECTION"
an Employer's Direction;
"DOLLARS, $"
the lawful currency of Hong Kong;
"ELIGIBLE EMPLOYEE"
any full-time permanent employee aged over eighteen (18) years
and under the Normal Retirement Age and who:-
- 9 -
35
(a) has satisfactorily completed his probationary period
(if any);
(b) is not a member of an Alternate Scheme;
"EMPLOYER"
the person named as such in the Deed of Adherence;
"EMPLOYER'S ACCOUNT"
an account maintained in the books of the Trustee in respect of the
Employer to which are credited all Forfeited Units allocated pursuant
to Rule 3.2;
"EMPLOYER'S DIRECTION"
an instruction given by the Employer in accordance with Rule 22
requiring the sale of all or any percentage of the Contribution Units
held in the Member's Account and/or of the Forfeited Units held in the
Employer's Account and the investment of the proceeds of redemption in
another Fund or other Funds or an instruction given by or on behalf of
the Employer in the circumstances permitted by these presents;
"EMPLOYER'S MANDATE"
the instruction in the Deed of Adherence or such later instruction from
the Employer as may from time to time be in effect as to the percentage
(if any) of the net Contributions given pursuant to Rule 21 received by
the Trustee each Month to be invested in each of the Funds given in
such form as the Trustee may approve or such instruction given by or on
behalf of the Employer in the circumstances permitted by these
presents;
"EMPLOYMENT"
continuous and full time permanent employment (including any
probationary period) with the Employer, provided that:-
(a) if a Member is transferred from another Employer in
circumstances where the provisions of Rule 7.6(b) apply
then Employment shall include the period of employment
with the former employer who is an Associate of the
Employer;
(b) whilst a Member continues to be an employee of an
Employer the following absences shall be construed for
the purposes of the Plan as Employment:-
(i) absence due to physical or mental ill-health or
incapacity for any period approved by the Employer,
save that if at the end of any approved period of
absence as aforesaid the Member has not returned to
work he will be deemed to have terminated his
Employment at the date of commencement of the
relevant period unless otherwise determined by the
Employer;
(ii) absence for any other reason under any special
circumstances for any period with the approval of the
Employer, save that if at the end of any
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approved period of absence as aforesaid the Member has not
returned to work he will be deemed to have terminated his
Employment at the date of commencement of the relevant period
unless otherwise determined by the Employer;
(c) if any Member with the agreement of his Employer is not
required, for a definite ascertainable period, to perform his
duties as an employee with that Employer and his Employer is not
required to pay him any salary or other allowance during that
period, the employment of such Member shall be deemed to be
suspended during such period and shall not be counted as
Employment. If the Member does not for any reason resume his
duties after that period of suspension, the Employment of the
Member shall be deemed to be terminated on the day immediately
preceding the period of such suspension;
(d) shall include in the case of a Transferred Member such period
of Employment with the employer from whom he transferred or such
proportion thereof as may be determined by the Trustee pursuant
to Rule 12.2;
"FORFEITED UNIT"
a Unit standing to the credit of the Employer's Account acquired with
the proceeds of redemption of a Contribution Unit which has been
forfeited or the proceeds of any Contribution Unit unclaimed pursuant
to Rule 17;
"FUND"
any Fund as defined in the Deed;
"MANDATE"
an Employer's Mandate;
"MEMBER"
an Eligible Employee who has joined the Plan and who continues
to have rights to Benefits hereunder;
"MEMBER'S ACCOUNT"
the account in respect of a Member to which are credited all
Contribution Units held in respect of that Member;
"MONTH"
a calendar month;
"NORMAL RETIREMENT BENEFIT"
a benefit calculated in accordance with Rule 7.1;
"NORMAL RETIREMENT AGE"
the age of sixty (60) years for all male and female Members;
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"PLAN"
JF Provident Plan as constituted by these presents;
"PLAN SALARY"
in respect of each Member, the basic Monthly salary payable to that
Member by the Employer from time to time (including increases in his
salary backdated to the effective date thereof) but excluding
commissions, bonuses, premiums, any payments for special work outside
the usual scope of the Member's employment, payments for overtime or
other like payments or any payments for transportation, travelling,
meals or subsistence, allowance for cost of living and medical
allowance, housing allowance or similar staff benefits and in the case
of a Member who is paid other than monthly means the basic salary (as
above described) attributable to that Month;
"PLAN SERVICE"
in relation to each Member, the period of Employment including any
period to be included as Plan Service pursuant to Rule 12.2 which shall
be included by deeming the date of commencement of the period of
Employment to be a date the relevant period prior to the actual date of
commencement;
"RULES"
these Rules set out in Part A of the Second Schedule of the Deed and
variations therein or additions thereto for the time being in force
pursuant to the Deed of Adherence or otherwise;
"SUBSCRIPTIONS"
Contributions;
"TERMINATION OF EMPLOYMENT"
termination of Employment with an Employer, whether by reason of
resignation, retirement, dismissal, death, incapacity or otherwise save
on transfer of Employment pursuant to Rule 7.6(b) including termination
as provided in the definition of Employment on expiry of a relevant
absence;
"THESE PRESENTS"
the Deed, the relevant Deed of Adherence and the Rules;
"TRANSFERRED MEMBER"
a Member in respect of whom the Trustee has accepted any assets from
another scheme or fund of which such Member was previously a member
pursuant to Rule 12.1;
"TRANSFERRING MEMBER"
a Member who leaves Employment and in respect of whom the Trustee
transfers from the Plan to another scheme or fund any assets of the
Plan pursuant to Rule 13.1;
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"TRUSTEE"
the Trustee or Trustees for the time being of the Plan;
"UNIT"
a unit or share or other participation or interest in a Fund or a
fraction thereof and for the avoidance of doubt in respect of any Fund
with more than class of units, is the class designated as the Fund save
in respect of a Forfeited Unit which shall unless the Trustee otherwise
agrees with the Employer represent moneys as held in accordance with
the Deed.
1.2 In these Rules, reference to "net Contributions" or net Subscriptions"
means the amount thereof after deduction of any costs, charges or other
deductions permitted by these presents and reference to "net proceeds of
redemption of Units" means the amount after deduction of any costs of currency
conversion or bank charges or other similar expenses or other deduction
authorized by these presents.
1.3 References in these Rules to Clauses are to Clauses of the Deed. All
words and expressions defined in the Deed shall have the same meaning herein and
the other provisions of Clause 1 shall apply hereto as if set out in full.
1.4 In the event of conflict of any translation of these Rules or any part
thereof, the English language version shall prevail to the exclusion of any
translation thereof
2. MEMBERSHIP
2.1 All Eligible Employees who are in Employment on or who commence
Employment on or after the Commencement Date may become Members on the first day
of the Month coincident with or next following the date on which they have :-
(a) completed the probationary period (if any) with the
Employer; and
(b) completed and signed the application form referred to
in Rule 2.3.
2.2 The Trustee may require proof of age satisfactory to it to be
produced by an Eligible Employee.
2.3 An Eligible Employee who wishes to become a Member of the Plan shall
complete and sign a form of application in such form as the Trustee may
prescribe and provide such other information as the Trustee may require. Such
application form shall be counter-signed by the Employer. The Trustee shall be
entitled to rely on the application form and information so provided as true and
accurate in all respects.
3. CONTRIBUTIONS OF THE EMPLOYER
3.1 Subject to Rule 3.2 and Rule 3.3, each Month the Employer shall pay to
the Trustee in Dollars by cheque delivered to the office or in the manner from
time to time specified by the
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Trustee out of moneys belonging to the Employer for each Member (including
Member remaining in Employment alter Normal Retirement Age) a sum equivalent to
twelve per cent (12%) of the Plan Salary (rounded to the nearest Cent by
rounding down if the amount is below 0.005 and otherwise rounding up) payable to
the Member in the immediately preceding Month. If the Termination of Employment
of a Member occurs in a Month then the Employer shall pay the Contributions only
until the end of the last complete Month of Employment.
3.2 Any amount or Contribution Unit forfeited under Rule 7.6 or Rule 7.7 or
any amount or Contribution Unit unclaimed under Rule 17.1 when it ceases to be
due (unless the Employer otherwise instructs pursuant to Rule 17.2) shall be
applied by the Trustee to the Employer's Account and in the acquisition of
Forfeited Units. Forfeited Units (If any) from time to time credited thereto
shall be redeemed and the proceeds used to reduce the amount of future
Contributions due under Rule 3.1 from the Employer in the Month following that
in which the Forfeited Unit was credited to the Employer's Account unless the
Employer and the Trustee otherwise agree prior to the next Contribution being
due under Rule 3.1. Forfeited Units shall be invested as provided in the Deed
and the value thereof on redemption shall be the value on issue thereof.
3.3 If in any Month a Member has received an increase of Plan Salary
backdated to an earlier date then in that Month the Employer shall pay such
additional amount as is necessary so that the amount paid for the preceding
Months for that Member is the amount representing the percentage to be paid in
accordance with Rule 3.1.
3.4 The provision under Rule 3.4 is deleted.
4. The provisions under Rule 4 is deleted.
5. CREDIT OF SUBSCRIPTIONS AND ACQUISITION OF UNITS
5.1 The Trustee shall credit all net Subscriptions received in respect of
each Member to the Member's Account.
5.2 The Trustee shall as soon as practicable alter receipt of cleared
moneys in respect of any Subscriptions deduct any sums or charges which may be
deducted from Subscriptions in accordance with the terms of the Deed. The
Trustee shall apply the balance plus any sum to be applied on redemption of
Forfeited Units pursuant to Rule 3.2 to the purchase of Units in accordance with
the relevant Mandate at the price applicable on the first Dealing Day of the
relevant Fund alter receipt. The amount(s) so allocated shall be retained by the
Trustee until the first Dealing Day of the relevant Fund. The first Dealing Day
shall be the first day after the day on which the Trustee received cleared
moneys.
5.3 The Units acquired by the Trustee with any net Subscriptions shall be
allocated to the Member's Account of the relevant Member which shall show
separately the Contribution Units held.
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5.4 On the payment of Benefits, the Trustee shall cancel all Units held in
the Member's Account of the relevant Member and the net proceeds of redemption
of the Units shall be utilized to pay out Benefits or dealt with as provided in
Rule 7 or in Rule 3.2 as the Rules provide.
6. ACCOUNTS AND STATEMENTS
6.1 The Trustee shall cause to be kept accounts for each Member showing
separately all and net Contributions received and Units subscribed and redeemed
and whether such Units are Contribution Units. The Trustee shall cause to be
kept an account for the Employer showing any sums forfeited or unclaimed and the
Forfeited Units representing the same and any Special Contributions and the
Forfeited Units representing the same. Forfeited Units shall be credited to the
Employer's Account in accordance with the provisions of Rule 7.
6.2 As soon as possible alter the audited accounts of the Plan relating to
the interest of the Employer and the Members are available, the Trustee shall
make the same available for inspection by Members (and after the death of any
Member by his Beneficiaries) at the usual business offices of the Sponsor in
Hong Kong during all or such part of the normal business hours of the Sponsor as
the Trustee and the Sponsor shall agree.
6.3 The Trustee shall issue, as soon as practicable alter the Accounting
Date in each year, and normally within two (2) months but no later than six (6)
months alter the relevant Accounting Date, a statement to each Member showing
the amount of the Contributions and the net Subscriptions received in respect of
that Member in the period from the Commencement Date or, if later, the last
Accounting Date to the Accounting Date on which the statements are made up. The
statement shall also show the Contribution Units held. The statement shall also
show the value of the relevant Units as at the relevant Accounting Date or, if
such day was not a Dealing Day the value of the relevant Units on the Dealing
Day immediately prior to the Accounting Date and the value of cash held
uninvested. The statement shall show the percentage increase or decrease in the
value of one Unit in each Fund for the Accounting Period. The statement shall
show the amount of the Vested Benefits of the relevant Member and the Benefits
the relevant Member could reasonably expect to receive on his retirement in
respect of the Plan Service of the Member as at the relevant Accounting Date.
6.4 The Trustee shall deliver the statements to the Employer and the
Employer shall promptly distribute the same to the Members.
6.5 A Member may at any time require a copy of any statements previously
issued to him to be sent to him by the Trustee on payment of such charge as the
Trustee may from time to time specify.
6.6 The Employer shall on receipt of notice of any amendment of these
presents, give a copy of it to each Member.
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7. BENEFITS ON TERMINATION OF EMPLOYMENT
7.1 Retirement at Normal Retirement Age
-----------------------------------
The Employer shall give the Trustee notice of any Member retiring at
Normal Retirement Age specifying the date of retirement and the Trustee shall
redeem all Contribution Units held to the credit of the Member's Account of the
retiring Member on the first Dealing Day next following the date of the Member
leaving, or if later, the date of receipt of such notice. The Trustee shall be
entitled to assume that the Member retired on the date specified a said notice
unless a further notice is given. The proceeds of such redemption together with
any Subscriptions allocable to the Member's Account but not at that date used to
acquire Units, after any deduction authorized by these presents shall be payable
to the Member.
7.2 Early Retirement
----------------
The Employer shall give the Trustee notice of any Member retiring prior
to Normal Retirement Age specifying the date of retirement and the Trustee shall
redeem all Contribution Units held to the credit of the Member's Account of the
retiring Member on the first Dealing Day next following the date of the Member
leaving Employment or, if later, the date of receipt of such notice. The Trustee
shall be entitled to assume that the Member retired on the date specified in a
notice unless a further notice is given. The proceeds of such redemption
together with any Subscriptions allocable to the Member's Account but not at
that date used to acquire Units, after any deduction authorized by these
presents shall be payable to the Member. A Member shall not be treated as
retiring unless the Employer consents thereto and the relevant Member is aged
over forty-five (45) years and has completed not less than three (3) years of
Plan Service.
7.3 Late Retirement
---------------
The Employer shall give the Trustee notice of any Member retiring after
Normal Retirement Age specifying the date of retirement and the Trustee shall
redeem all Contribution Units held to the credit of the Member's Account of the
retiring Member on the first Dealing Day next following, the date of the Member
leaving Employment or, if later, the date of receipt of such notice. The Trustee
shall be entitled to assume that the Member retired on the date specified in a
notice unless a further notice is given. The proceeds of such redemption
together with any Subscriptions allocable to the Member's Account but not at
that date used to acquire Units, after any deduction authorized by these
presents shall be payable to the Member.
7.4 Death in Employment
-------------------
(a) In the event of a Member dying at any time and under any
circumstances whilst in Employment, the Employer shall give
notice thereof to the Trustee and the Trustee shall subject as
provided in Rule 7.4(c) redeem all Contribution Units held to
the credit of the Member's Account of the deceased Member on the
first Dealing Day next following the receipt of such notice.
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(b) The Trustee shall hold the net proceeds of redemption of Units
received in accordance with Rule 7.4(a) together with any net
Subscriptions allocable to the relevant Member in cash not at
that date used to purchase Units net of any deduction authorized
by these presents separate and apart from the Plan upon trust to
pay or apply the whole or any part of the capital or income of
the same to or for the benefit of all or any one or more of the
Beneficiaries living at the date of the Member's death as the
Trustee may in its absolute discretion determine.
(c) Notwithstanding the foregoing provisions of Rule 7.4(b) the
amount held upon trusts of Rule 7.4(b) shall until payment is
made in accordance therewith be retained and may be invested in
securities or placed on Deposit with any bank or financial
institution in which monies of the Plan are permitted to be
invested at the absolute discretion of the Trustee and any costs
of dealing with the same shall be payable therefrom and any
income or interest arising thereon shall be added thereto.
(d) The Trustee shall be entitled to require a copy of the death
certificate of the relevant Member.
(e) A nomination (if any) made by a Member in respect of the
Benefits payable upon his death shall constitute a request to
the Trustee only and shall not be binding upon it nor prejudice
the Trustee's absolute discretion to determine to whom payment
is made in accordance with Rule 7.4(b).
7.5 Permanent Incapacity and Ill-health
-----------------------------------
In the event of the Termination of Employment of a Member as a result
of physical or mental ill health or incapacity which in the opinion of the
Employer having taken advice from a competent medical practitioner of western
medicine is of such nature as to render him permanently unfit to continue
employment with the Employer in the same or similar capacity as that for which
he was previously employed, the Trustee upon receipt of notice to such effect
from the Employer shall redeem all Contribution Units held to the Member's
Account of the relevant Member on the first Dealing Day next following the
receipt of such notice. The net proceeds of redemption of Units net of any
deduction authorized by these presents together with any net Subscriptions
allocable to the relevant Member in cash not at that date used to purchase Units
shall be payable to the Member. The Trustee shall be entitled to require a copy
of the certificate from the medical practitioner who has advised the Employer as
to the state of health of the relevant Member prior to making any payment out
hereunder.
7.6 Leaving Employment
-------------------
(a) Subject as is in these Rules otherwise provided, upon
Termination of Employment of a Member in circumstances other
than as set out in this Rule 7 the Employer shall give notice
thereof specifying the date of Termination of Employment and the
Trustee shall:
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(i) the provision under Rule 7.6(a)(i) is deleted;
(ii) redeem all Contribution Units held to the credit of
the Member's Account of the relevant Member on the
first Dealing Day next following the date of
Termination of Employment or, if later, the date of
receipt of such notice. The Trustee shall be entitled
to assume that the Member's Employment terminated on
the date specified in the notice unless a further
notice is given. The Trustee shall pay to the Member
a percentage of the net proceeds of redemption of the
relevant Units and of any net Contributions allocable
to the relevant Member in cash not at that date used
to purchase Contribution Units net of any deduction
authorized by these presents calculated by reference
to the period of Plan Service of the Member as
follows for which purpose a year is counted by
reference to each anniversary of the first date of
Plan Service with a year expiring on the day
immediately preceding the anniversary:-
Plan Service of the Member Percentage to be paid
-------------------------- ---------------------
Less than three (3) years Nil
Three (3) years or more
but less than four (4) years 30%
Four (4) years or more but
less than five (5) years 60%
Five (5) years or more but
less than six (6) years 75%
Six (6) years or more but
less than seven (7) years 80%
Seven (7) years or more but
less than eight (8) years 85%
Eight (8) years or more but
less than nine (9) years 90%
Nine (9) years or more but
less than ten (10) years 95%
Ten (10) years or more 100%
(b) Notwithstanding anything to the contrary contained in
Rule 7.6(a), in the case of a Member leaving the
Employment of an Employer and immediately thereafter
becoming an employee of an Associate which is an
Employer hereunder the
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Member shall be deemed not to have terminated his
Employment and all Contribution Units and Deduction Units
and any net Subscriptions credited to his Member's Account
shall with effect from the date on which he becomes an
employee of the Associate be deemed transferred to a
Member's Account attributable to the Associate and the
rights of the Employer shall be taken by the Associate
together with all obligations and the Member shall for all
purposes hereunder be treated as if the Employment with
the Employer were Employment by the Associate.
(c) Where pursuant to Rule 7.6(a)(ii) only a percentage of the
net proceeds of redemption of Contribution Units and net
Subscriptions is payable to the Member, the balance
thereof shall be forfeited and dealt with under Rule 3.2.
7.7 Dismissal
---------
(a) Notwithstanding anything to the contrary contained in
these Rules, the provisions of Rule 7.7(b) shall apply
if any Member shall be dismissed from the Employment of
an Employer upon any of the following grounds or shall
resign to avoid dismissal on such grounds and if the
Employer shall give notice to the Trustee of
Termination of Employment specifying the date of
termination and that the Employer wishes the provisions
of Rule 7.7(b) to apply and if the Trustee shall be
satisfied that the dismissal or resignation was upon
any such grounds namely :-
(i) willfully disobeying a lawful and reasonable
order; or
(ii) misconducting himself such conduct being
inconsistent with the due and faithful
discharge of his duties; or
(iii) by reason of fraud or dishonesty; or
(iv) being habitually neglectful in his duties; or
(v) upon any other grounds on which the Employer
would be entitled to terminate the contract
of employment of the relevant Member without
notice at common law.
(b) The Trustee shall redeem all Deduction Units held to
the credit of the Member's Account of the relevant
Member on the first Dealing Day next following the
Termination of Employment or, if later, the date of
receipt of such notice and pay the proceeds of
redemption of the relevant Units together with any net
Deductions allocable to the relevant Member in cash not
at that date used to purchase Deduction Units net of
any deduction authorized by these presents. The
relevant Member shall receive no other benefit from the
Plan. Ml Contribution Units shall be redeemed either
on the first Dealing Day next following receipt of notice
of Termination of Employment from the Employer or at the
Trustee's discretion if at such date it is not satisfied
that the provisions of this Rule 7.7 apply, the Trustee
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45
shall retain such Units and redeem the same on the first
Dealing Day after the date on which it is satisfied that
the provisions of this Rule 7.7 apply or do not apply. If
the Trustee redeems such Units prior to being satisfied as
aforesaid, then it shall hold the net proceeds of
redemption of the relevant Units together with any net
Contributions allocable to the relevant Member in cash not
at that date used to purchase Contribution Units net of
any deduction authorized by these presents on interest
bearing account until it is so satisfied and then if the
provisions hereof apply, the Trustee shall forfeit the
said sum and any interest accrued which shall be dealt
with under Rule 3.2 and if the provisions hereof do not
apply, shall pay out the same or the relevant part in
accordance with the provisions of Rule 7.6. The Trustee
shall be entitled to rely on a notice from the Employer
specifying the date of Termination of Employment.
8. INCORRECT NOTICE OF TERMINATION OF EMPLOYMENT
If an Employer shall for any reason give notice to the Trustee pursuant
to the Rules as to the Termination of Employment of a Member and the Member
shall for any reason not cease to be employed then the notice given by the
Employer shall be deemed invalid. The Trustee shall (if it has redeemed Units)
utilize the net proceeds of redemption thereof to purchase the same Units as
redeemed such that the position of the Member's Account of the relevant Member
is not affected by the redemption and if there shall be any shortfall in the sum
needed by reason of an increase in value of the relevant Units or otherwise,
unless the Member consented to the redemption in accordance with Rule 9 the
Employer shall pay such sum to the Trustee as shall cover the shortfall. If a
Member consented, the loss (if any) shall be borne by the Member. If any sums
have been paid to the Employer, Member or any other person as a result of any
notice incorrectly given as aforesaid or a notice specifying an incorrect basis
of Termination of Employment or an incorrect notice of Termination of Employment
the same (or relevant part) shall be repaid by the recipient to the Trustee.
9. ARRANGED DATE FOR BENEFIT PAYMENT
If the Employer and a Member so request by notice to the Trustee given
in such form as the Trustee may from time to time require but specifying the
name of the Member, the reason for termination of employment and the expected
date of termination of employment, then the Trustee may redeem Units for the
purpose of paying Benefits prior to the date on which it would otherwise do so
pursuant to these Rules in order that a cheque for the sum due as Benefits may
be delivered to the Employer on or before the expected date of Termination of
Employment. The Trustee shall not be obliged to accept such notice but if it
accepts and acts on such notice the Trustee shall redeem all Units standing to
the Member's Account of the relevant Member. The Trustee shall not be liable for
any reduction in Benefits due to the early redemption of Units nor if having
accepted such notice, for any reason not within the reasonable control of the
Trustee the cheque shall not be delivered by the expected date of Termination of
Employment.
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10. CURRENCY
All Benefits payable shall be paid in the lawful currency of Hong Kong
unless the proceeds of redemption of Units shall be received by the Trustee in
any other currency in which case the Trustee may pay the same in that currency
or convert the same to Dollars deducting the costs of conversion therefrom as it
thinks fit or in such other Currency as the Member requests and the Trustee
agrees and in such case the rate of exchange shall be as determined by the
Trustee at its discretion and the costs of conversion shall be for the account
of the Member.
11. ALTERNATE SCHEME
The Employer may by notice to the Trustee specify that a scheme plan or
trust for the provision of pension, retirement or provident benefits or any
similar purposes to which the Employer or any of its Associates contribute shall
be an Alternate Scheme. A notice so given shall not affect the position of any
person who at the date of such notice is a Member.
12. TRANSFERRED MEMBERS
12.1 Upon the instruction of the Employer pursuant to Clause 56 and with the
consent of the Trustee, the Trustee shall accept as an asset of the Plan from
the trustees or other administrators of any other scheme or fund of which a
Member was previously a member, such sum or assets as such Member is entitled to
have transferred according to the provisions of that scheme or fund provided
that the trust deed or other document constituting such scheme or fund contains
power for the trustees or other administrators thereof to make such transfer.
12.2 The Trustee shall determine the proportion of employment with the
previous employer to be allowed as Plan Service and notice the Employer and the
Member of such determination. Such determination shall be final and conclusive
and be binding on the Member and the Employer.
12.3 Any cash sum received by the Trustee pursuant to Rule 12.1 shall be
deemed Deductions unless certified by the Trustee and trustee or administrator
of the scheme from which they are received to be Contributions and subject to
any deductions permitted by these presents shall be allocated to the Member's
Account of the relevant Member as Deductions received or as Contributions
received as applicable. If assets other than cash are received then the Trustee
shall sell the same in such manner as it thinks fit and the net proceeds thereof
shall be deemed Deductions and allocated to the Member's Account of the relevant
Member as Deductions received. The amounts received shall be used to subscribe
for Units in Funds in accordance with the Mandate current at that date on the
first Dealing Day of the relevant Fund or Funds next following receipt of such
sum or the net proceeds of sale of assets received. Any fees or charges shall be
deducted therefrom prior to the subscription for Units.
13. MEMBERS LEAVING TO JOIN OTHER SCHEME
13.1 Upon the instruction of the Employer and with the consent of a Member
leaving Employment, the Trustee shall pay in lieu of the Benefits payable to
that Member to the trustees or
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47
other administrators of a retirement scheme or other fund or arrangement of
which the Member becomes a member, a sum being an amount equal to the Benefits
to which the Member would be entitled on the day immediately preceding the date
of Termination of Employment and shall notify the trustees or other
administrators of the other scheme or fund of the length of Plan Service and any
further information required by such trustees or other administrators provided
that:-
(a) such other scheme, fund or arrangement has any necessary
registration or exemption required for it to operate as a
retirement scheme;
(b) the trust deed or other document constituting such scheme
or fund or arrangement contains power for the trustees or
other administrators thereof to receive such transfer;
(c) the prior written consent of the Member is obtained.
13.2 Upon payment by the Trustee pursuant to Rule 13.1 the Member shall
cease to be a Member and shall have no claim against or other interest in the
Plan.
14. LIEN ON BENEFITS
14.1 All Benefits payable including moneys held on trusts pursuant to Rule
7.4(b) and Rule 16 shall be subject to a lien by the Trustee in respect of any
losses of the Employer arising directly from the dishonest act of the Member to
whom the Benefits are payable and for all debts owing to the Employer by the
Member in respect of whom the Benefits are payable provided that such debts have
been acknowledged in writing by such Member. The Employer may on or alter the
Termination of Employment of a Member give written notice to the Trustee that
the Employer reasonably believes there is a loss or debt giving rise to a lien
under this Rule and giving the Trustee particulars thereof and desiring it to
exercise such lien.
14.2 The Trustee shall exercise the lien under Rule 14.1 by deducting the
relevant sum from the proceeds of redemption of Units otherwise to be paid as
benefits and holding it on separate interest bearing account until the Trustee
is satisfied whether the monies are properly payable to the Employer or not. The
Trustee and the Employer shall use their reasonable endeavors to promptly
determine whether or not such a lien may be made and the amount thereof and/or
if payment may be made to the Employer or Member. Upon the Trustee being
satisfied that any sum is due to the Employer, the Trustee may pay to the
Employer upon or alter the Termination of Employment of the relevant Member for
the Employer's own use and benefit the amount of such losses or debts and the
Benefits of the Member concerned upon the termination of his employment shall be
reduced accordingly by such amount.
15. PROHIBITION OF ASSIGNMENT
The assignment, transfer or other disposal by a person of any right,
benefit or interest under the Plan is prohibited.
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48
16. BANKRUPTCY OF A MEMBER
16.1 If any person (whether or not a Member) shall either wholly or
partially assign, charge or otherwise dispose of any present or future benefit
in the Plan or attempt or purport to do so or if he shall become bankrupt or
insolvent or if any other act shall be done or event shall happen whereby the
same if belonging absolutely to such person would be vested in or payable to or
charged in favor of any other person, firm or company save the lien permitted by
Rule 14.1, upon the happening of any of the events aforesaid all right, benefit
and interest of such person in the Plan shall cease. The Employer and the Member
shall continue until Termination of Employment of the Member to pay
Contributions and Deductions but on Termination of Employment if the relevant
person is the Member then the Benefits due to him shall be held by the Trustee
upon trust to apply the same for or towards the maintenance and personal support
of the relevant Member and/or his Beneficiaries in such manner and in such
proportion (but so that no payment is made to any assignee or purported assignee
of the Member or any person claiming under a charge or purported charge) as the
Employer may, in its absolute discretion, determine or to pay the same or any
part to the Employer where the Benefits would otherwise have been subject to a
lien pursuant to Rule 14.1 and payable to the Employer. If the relevant person
is not a Member, the interest of the Member shall not be prejudiced and the
Benefits shall be payable to him provided that if the relevant person would then
by reason of the death of the relevant Member or otherwise have had any claim to
all or any Benefits that claim shall have ceased as aforesaid but any sum
affected thereby maybe applied by the Trustee for the maintenance and personal
support of any of the Beneficiaries as the Employer determines (including the
relevant person).
17. FAILURE TO CLAIM
17.1 A person for the time being entitled to the receipt of Benefits shall
not be entitled to claim such Benefit or any part thereof more than twenty-four
(24) Months after they have fallen due and all interest therein shall cease if
the reason for the non-payment of such Benefits or part thereof within the
period of twenty-four (24) Months was:-
(a) the failure of that person to claim the Benefits; or
(b) the lack of knowledge by the Employer or of the Trustee of
the existence or whereabouts of that person or that such person
had or claimed to have a right to Benefits.
17.2 The Employer may notwithstanding the provisions of Rule 17.1 instruct the
Trustee to pay any Benefits or any part thereof to any such person as they think
fit and the Trustee shall approve or to hold the same for some further period.
If no such instruction is given or upon the expiry of such further period, the
moneys shall be forfeited and dealt with under Rule 3.2.
18. BENEFICIARY UNDER INCAPACITY
18.1 If any Benefits are payable to any Member or person who in the opinion
of the Trustee is incapable of managing his own affairs or if for any other
reason the Trustee shall think such action to be in the interests of such
person, the Trustee shall have the power to pay such Benefits or any
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part thereof to such person, company or institution for the benefit of the
person as aforesaid as the Trustee shall think fit and the receipt of such
person, company or institution shall be a complete discharge to the Trustee and
exonerate it from all further liability or responsibility in relation thereto.
18.2 If any Benefits are payable to any Beneficiary who is an infant, the
Trustee shall have the power to pay the Benefits or any part thereof to the
parent or lawful guardian or guardians of such Beneficiary whose receipt
therefor shall be a full and sufficient discharge to the Trustee and the Trustee
shall not be responsible for seeing to the application of any moneys paid to
such parent or guardian or guardians.
19. NOMINATIONS
Any Member may by completion of a form of nomination in such form as
the Trustee may prescribe or in such other form or forms as the Trustee may
approve and giving of the same to the Trustee nominate any person or persons as
a Beneficiary and specify that the Member wishes such person or persons to
receive any Benefits from the Plan to the exclusion of any other person. Such
nomination may be withdrawn or superseded by the giving of a further nomination.
The nomination shall constitute an expression of the wishes of the Member and
shall not be binding upon the Trustee.
20. MEMBERSHIP NOT A CONTRACT OF EMPLOYMENT
Nothing in these Rules shall constitute a contract of employment or be
a consideration for employment of any person or give any person the right to be
retained in the employ of the Employer. In any action brought by a Member
against his Employer no damages shall be recoverable in respect of the loss of
any Benefits to which he may claim to be entitled under these presents.
21. MANDATES
21.1 The Employer may at such time as hereinafter provided give one (1)
Month's notice to the Trustee (or such shorter period as the Trustee may agree)
to amend the Employer's Mandate as given to take effect on the Commencement Date
or, if later, a notice given pursuant to this Rule 21 or by or on its behalf or
otherwise in accordance with the provisions of these presents by providing that
with effect from the first day of the Month commencing after expiry of the
notice, the percentage of all net Contributions and net Deductions to be
allocated to each Fund shall be as set out in the notice. The Employer may give
such notice only within the period of one (1) Month of receipt by it of the
statements to Members to be delivered to it in accordance with Rule 6.4.
21.2 Save as otherwise provided in these presents, the Employer shall not be
entitled to give more than one (1) such notice. The notice shall be in such form
as the Trustee may from time to time specify. The Trustee shall subject to the
provisions of these presents comply therewith. Any Mandate shall only be valid
to the extent it does not conflict with any limit imposed by the Trustee
pursuant to these presents.
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22. DIRECTIONS
22.1 The Employer may at such time as hereinafter provided give not less
than one (1) Month's notice to the Trustee (or such shorter period as the
Trustee may agree) to specify that with effect from the next Dealing Day after
expiry of the notice, all or any proportion of the Contribution Units and
Deduction Units held for all Members in any Fund or Funds shall be redeemed and
the net proceeds of redemption of Units shall be used to acquire Units in
another Fund on the same Dealing Day if it is a Dealing Day for the Fund in
which Units will be acquired and if tit manager or other person so authorized in
respect of the Fund in which Units will be acquired so agrees and otherwise on
the first Dealing Day for the Fund in which Units will be acquired after receipt
of the proceeds and the Units shall be credited as Contribution Units or
Deduction Units in the Member's Accounts as applicable. The Employer may give
such notice only within the period of one (1) Month of receipt by it of the
statements to Members to be delivered to it in accordance with Rule 6.4. In any
case the Trustee shall, subject to Rule 22.2 and Rule 22.3 and the provisions of
the Deed, comply with a Direction.
22.2 Save as otherwise provided in these presents, the Employer shall be
entitled to give notice under Rule 22.1 only once in each calendar year. The
notice if it relates to Contribution Units shall apply to all Contribution Units
and Deduction Units.
22.3 The Employer shall not give a Direction unless a Mandate is given on
the same occasion and shall not give a Direction which requires an allocation of
funds in different proportions to that required by the accompanying Mandate or
allocation of all Units to one Fund by way of Mandate and of all Units to
another Fund by way of Direction. A Direction so given shall be invalid. Any
Direction shall be subject to any limit imposed by these presents. Where any
provision of these presents requires the Employer to give a Direction the
Employer shall give the same as provided in these presents or the same may in
accordance with the terms of these presents be given on its behalf.
23. TAXES OR DUTIES
If any of the Benefits payable in accordance with these Rules are
subject to taxes or duties either in Hong Kong or elsewhere the Trustee is
empowered to deduct therefrom such taxes or duties and to hold them for payment
to the proper authorities.
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