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EXHIBIT 10.14
DATED 20 MAY 1999
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XXXXXX X XXXXXX
-AND-
PROTEUS INTERNATIONAL PLC
OPTION DEED
XXXXXXX XXXXXXX
XXXXX XXXXX
000 XXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
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THIS DEED is made this 20th day of May 1999 between
(1) XXXXXX X XXXXXX of Briarwood, Nightingales Lane, Chalfont St Xxxxx,
Buckinghamshire HD8 4SR ("XX XXXXXX"); and
(2) PROTEUS INTERNATIONAL PLC of Beechfield House, Lyme Xxxxx Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx XX00 0XX (the "COMPANY").
NOW THIS DEED WITNESSES AS FOLLOWS
Definitions
In this Deed the following words and phrases have the following meanings:-
"Auditors" the auditors for the time being of the Company (acting as
experts and not as arbitrators);
"Board" the Board of Directors from time to time of the Company or
a duly authorised committee thereof;
"Connected Person" in relation to an individual means his spouse, child,
stepchild or remoter issue;
"Consultancy" any contract for the provision of services by Xx Xxxxxx to
any Member of the Group;
"Control" has the same meaning as in Section 840 of the Income and
Corporate Taxes Xxx 0000;
"Date of Grant" means the "Effective Date" as defined in the merger
agreement of even date herewith between the Company,
Therapeutic Antibodies, Inc. and PI Merger Sub Inc.;
"Deed " this Deed as amended in accordance with its provisions by
the Board or by the Company in General Meeting;
"Exercise Price" 39.5 xxxxx per Share in respect of each and every exercise;
"Family Trust" a trust (whether arising under a settlement, declaration of
trust, testamentary disposition or on an intestacy)
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under which no immediate beneficial interest in the shares
in question is for the time being or may in future be vested
in any person other than the member or former member
establishing the trust or a Connected Person of that member
or former member;
"Group" the Company and its Subsidiaries from time to time;
"London Stock
Exchange" the London Stock Exchange Limited;
"Member of the
Group" the Company or any one of its Subsidiaries from time to
time;
"Merger Agreement" the agreement of even date herewith between the Company,
Therapeutic Antibodies, Inc and PI Merger Sub Inc;
"Option" the right to acquire Shares in accordance with this Deed to
the extent that it has neither lapsed nor been exercised;
"Share" a fully paid ordinary share of 2p in the capital of the
Company;
"Subsidiary" a company which is both under the Control of the Company and
is a subsidiary undertaking of the Company (within the
meaning of Section 736 of the Companies Act 1985).
Where the context so admits the singular shall include the plural and vice versa
and the masculine gender shall include the feminine. Any reference to a
statutory provision is to be construed as a reference to that provision as for
the time being amended or re-enacted.
1. Grant of Option
1.1 On the Merger Agreement becoming effective the arrangements set out in the
Schedule to a Consultancy Agreement between Xxxxxx Xxxxxx and Therapeutic
Antibodies (UK) Limited dated 8th August 1998 shall terminate with
immediate effect.
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1.2 Subject to:
(a) the Merger Agreement becoming effective; and
(b) the obtaining of the relevant authority under section 80 of that Act
and the consent of the Company's shareholders in general meeting being
obtained to the disapplication of section 89 of the Companies Xxx 0000
as regards the Option; and
the Company grants an Option to Xx Xxxxxx to acquire 4.5% of such number of
Shares as shall be in issue upon the Merger Agreement becoming effective
including those Shares to be issued as consideration for the merger but
excluding any Shares to be issued pursuant to the placing agreement of even
date herewith entered into between WestLB Panmure Limited and the Company
at the Exercise Price.
2. Assignability of Option
The Option may not be assigned transferred charged or otherwise dealt with
by Xx Xxxxxx except that Xx Xxxxxx may assign or transfer the Option to a
Connected Person or a Family Trust.
3. Exercise of Options
3.1 Save as otherwise provided in this Deed the Option shall be
exercisable (provided it has not lapsed) once during each of:
(a) the period of ninety days commencing on and including 31st
December 2001; and,
(b) the period of ninety days commencing on and including 31st
December 2002.
3.2 The Option shall lapse and cease to be exercisable upon the earliest to
happen of the following:-
(a) the first anniversary of the date of death of Xx Xxxxxx, if Xx Xxxxxx
dies after 31 December 2001;
(b) the date upon which Xx Xxxxxx ceases to hold any Consultancy with a
Member of the Group by reason of dishonesty or fraud on the part of Xx
Xxxxxx;
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(c) if the Consultancy is terminated by Xx Xxxxxx for any reason before
31st December 2001;
(d) the expiry of any of the periods mentioned in Clause 6;
(e) immediately following any exercise that takes place on or after 31st
December 2002;
(f) where an order is made disqualifying Xx Xxxxxx from acting as a
company director;
(g) where Xx Xxxxxx is made bankrupt or has a receiving order made against
him or enters into a voluntary arrangement with his creditors;
(h) the commission by Xx Xxxxxx of any criminal offence (other than a road
traffic offence).
4. Effect of Exercise of Option
4.1 On the first exercise of the Option, the maximum number of Shares which Xx
Xxxxxx shall become entitled to acquire shall be calculated by reference to
the Relevant Percentage determined in accordance with the Appendix and
shall be subject to any further adjustment required pursuant to the
provisions of Clause 4.3.
4.2 On any second exercise of the Option, the number of Shares Xx Xxxxxx shall
be entitled to receive shall be calculated in accordance with Clause 4.1
above, provided that the maximum number of Shares which can be acquired on
any second exercise shall not exceed the total number of Shares under
Option less the Shares acquired as a result of the first exercise of the
Option adjusted in accordance with Clause 4.3.
4.3 In the event that the Company is required to account for Secondary Class I
national insurance contributions in respect of any exercise of the Option,
the maximum number of Shares which Xx Xxxxxx is entitled to acquire
pursuant to Clause 4.1 or 4.2 above shall be adjusted so that the total
value of Shares (as derived from the Daily Official List of the London
Stock Exchange on the date of allotment of such Shares) acquired by Xx
Xxxxxx together with any Secondary Class 1 National Insurance Contributions
in respect thereof shall not exceed the total value of Shares (derived as
aforesaid) which Xx Xxxxxx would otherwise have acquired on exercise.
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5. Manner of exercise of Option
5.1 The Option shall be exercised by Xx Xxxxxx lodging with the Secretary of
the Company at its registered office (or otherwise as may be notified to Xx
Xxxxxx from time to time):-
(i) a notice in such form as the Board may from time to time prescribe,
which in any event shall set out the calculation made in accordance
with Clause 4 and the number of Shares to be acquired by Xx Xxxxxx.
(ii) payment (in such manner as the Board shall direct) of the amount of
the Exercise Price per Share to be acquired by Xx Xxxxxx pursuant to
exercise of the Option;
and the date of exercise of the Option shall be: (a) in the case of an
exercise pursuant to Clause 6, the date of receipt by the Company of such
notice and payment, (b) in the case of exercise pursuant to Clause 3.1(a),
31st December 2001, and (c), in the case of an Option exercised pursuant to
Clause 3.1(b), 31st December 2002.
5.2 The Board shall within thirty days of the receipt of notice exercising the
Option either cause the Company to allot and issue or arrange for the
transfer of the relevant Shares to Xx Xxxxxx and send or cause to be sent
to Xx Xxxxxx or his nominee (as the case may be) a share certificate (or
other evidence of title) for the Shares in respect of which the Option is
exercised.
5.3 Shares issued pursuant to this Deed will rank pari passu in all respects
with the Shares then already in issue except that they will not rank for
any dividend or other distribution of the Company paid or made by reference
to a record date (being the date on which entitlement to a dividend or
distribution is fixed by reference to the Company's register of members)
falling prior to the date of exercise of the Option pursuant to Clause 5.1.
5.4 The Company shall as soon as is practicable after any exercise of the
Option apply to the London Stock Exchange for the permission for the Shares
to be issued pursuant to the exercise of the Option to be admitted to the
London Stock Exchange Daily Official List, or apply for the listing of
those Shares on any other stock exchange on which the Shares are listed.
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5.5 The Company shall maintain sufficient issued and/or unissued share capital
to satisfy an exercise of the Option.
5.6 The Option may not be exercised, released or surrendered at a time when
such exercise release or surrender would not be in accordance with the
"Model Code for Securities Transactions by Directors of Listed Companies"
issued by the Stock Exchange as amended from time to time and the exercise
period of ninety days referred to in Clauses 3.1(a) and 3.1(b) above shall
commence on the day after the last day on which exercise is not permitted
pursuant to the Model Code.
5.7 The Company may make such provision for and take such action as it
considers necessary or expedient (acting reasonably) for the withholding or
payment of any statutory deductions for which Xx Xxxxxx or the Company or
any Member of the Group is accountable and which the Company or any Member
of the Group is obliged to make, wherever those taxes are imposed, provided
that those taxes arise in respect of the grant or exercise of rights over,
issue, or transfer of Shares pursuant to this Deed, and the action by the
Company shall include (but not be limited to) the withholding and/or sale
of Shares from any issue or transfer of Shares under this Deed and
application of the proceeds in payment of such statutory deductions until
Xx Xxxxxx reimburses the Company for the amounts of any such taxes
(excluding interest or penalties) for which the Company, the Member of the
Group or Xx Xxxxxx is properly accountable.
6. Takeovers and Liquidations
6.1 If any person obtains Control of the Company as a result of making:-
(a) a general offer to acquire the whole of the issued share capital of
the Company which is made on a condition such that if it is satisfied
the person making the offer will have Control of the Company; or
(b) a general offer to acquire all the shares in the Company which are of
the same class as the Shares;
or otherwise then the Option may be exercised within three months of the
time when the person making the offer has obtained Control of the Company
and any condition subject to which the offer is made has been satisfied.
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6.2 If under Section 425 of the Companies Xxx 0000 the Court sanctions a
compromise or arrangement proposed for the purposes of or in connection
with a scheme for the reconstruction of the Company or its amalgamation
with any other company or companies, or if an arrangement having similar
effect in any other jurisdiction comes into force, the Option may be
exercised within three months of the Court sanctioning the compromise or
arrangement, or the arrangement coming into force.
6.3 If any person becomes bound or entitled to acquire shares in the Company
under Sections 428 to 430F of the said Act of 1985, or under an equivalent
provision in any other jurisdiction, the Option may be exercised at any
time when that person remains so bound or entitled.
6.4 If the Company passes a resolution for voluntary winding up the Option may
be exercised within three months of the passing of the resolution, or the
arrangement coming into force.
6.5 The exercise of the Option pursuant to the preceding provisions of this
Clause 6 shall be subject to the provisions of Clauses 4 and 5 above.
6.6 The Option shall lapse if it shall not have been exercised by the expiry of
any time limit for exercise set out in this Clause 6, whichever shall
expire first.
7. Additional Rights
7.1 This Deed shall not form part of any contract for services between any
Member of the Group and Xx Xxxxxx and the rights and obligations of Xx
Xxxxxx under the terms of his Consultancy with any Member of the Group
shall not be affected by his participation in this Deed or any right which
he may have to participate therein.
7.2 Each Member of the Group shall be entirely free to conduct its business
affairs as it sees fit without regard to any consequences under, upon or in
relation to this Deed or the Option or Xx Xxxxxx.
8. Administration and Amendment
8.1 The terms of this Deed shall be administered under the direction of the
Board who may at any time and from time to time by resolution and without
other formality amend or augment the terms of this Deed in any respect
provided that:-
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(a) no amendment shall operate to affect adversely in any way any rights
already acquired by Xx Xxxxxx, without the consent of Xx Xxxxxx;
(b) no amendment may be made to the advantage of Xx Xxxxxx except with the
prior approval of the Company in General Meeting except for minor
amendments to benefit the administration of the Deed and amendments to
obtain and maintain favourable tax, exchange control or regulatory
treatment for Xx Xxxxxx or for any Member of the Group.
8.2 The Board shall determine any matter relating to the interpretation of this
Deed (including the rectification of errors or mistakes or procedure or
otherwise), provided that in the event of a dispute, the matter shall be
referred to independent accountants acceptable to the Company and Xx
Xxxxxx, acting as experts and not as arbitrators, and their decision as to
the matter referred, as well as to the costs of the determination, shall be
final.
8.3 The provisions of the Company's Articles of Association for the time being
with regard to the service of notices shall apply mutatis mutandis to any
notices to be given by the Company hereunder.
8.4 The Board shall be entitled to authorise any person to execute on behalf of
Xx Xxxxxx, at the request of Xx Xxxxxx, any document relating to this
Option, in so far as such document is required to be executed pursuant
hereto.
This Deed (and any dispute, controversy, proceedings or claim of whatever nature
arising out of or in any way relating to this agreement or its formation) shall
be governed by and construed in accordance with English law.
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APPENDIX
RELEVANT PERCENTAGE CALCULATION
The Relevant Percentage shall be determined on any date of exercise by comparing
the Share Growth Return ("SGR") (calculated in accordance with this Appendix)
obtained by holders of Shares since the Date of Grant with the SGR obtained over
the same period by holders of shares in the other companies set out or referred
to in this Appendix (in each case with SGR and x calculated according to this
Appendix).
The Share Growth Return ("SGR") for any company (including the Company) shall be
calculated over the relevant period, being the period from the Date of Grant to
the date of exercise of an Option.. It assumes the purchase by a shareholder of
a share in that company on the Date of Grant and it comprises any increase or
decrease in the share price of a share (including a Share) over that period. The
Comparator Group means all companies in the FTSE Smallcap Index other than
investments trusts.
1. CALCULATION OF SGR OF COMPARATOR GROUP
(a) On the Date of Grant, the shareholders shall be assumed to have
purchased one share (the "Notional Shareholding") in each member of
the Comparator Group. The performance of each share shall be
calculated over the Period from the Date of Grant until the date of
exercise. On the Date of Grant, a shareholder in the Company shall be
assumed to have purchased one Share in the Company.
(b) The purchase price of the Company's Share for this purpose shall be
the Exercise Price.
(c) On the date of exercise an average shall be taken of the daily prices
of the shares of each of the constituents of the Comparator Group and
the Share during the 30 calendar day period ending on that date and
such amount shall be deemed to be the sale price of a share for each
company in the Comparator Group and the Company.
(d) SGR for each company comprised in the Comparator Group and the Company
will be calculated according to the formula:
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End Value - Start Value
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Start Value
where Start Value is the value of each company in the Comparator
Group (including the Company) at the Date of Grant; and
End Value is the value of each company in the Comparator Group
(including the Company) at the date of exercise.
and expressed as a percentage.
2. COMPILATION OF RANKING BY SGR
As soon as practicable following the date of exercise the SGR of each
member of the Comparator Group and the Company will be determined in
accordance with paragraph 1 above and ranked in accordance with their SGR
with the company having the highest SGR being listed as number 1 and the
company with the lowest having the highest number. In addition, the first
and second quartile positions in the list will be highlighted, as will the
position of the Company within the Comparator Group list. The first
quartile will comprise the companies ranked 1 to
x
--
4.
The second quartile will comprise the companies ranked 1 to
x x
-- . + 1 to -- .
4 2
x is the number of companies in the Comparator Group and fractions will be
ignored.
3. DETERMINATION OF RELEVANT PERCENTAGE
The Relevant Percentage shall be determined in accordance with the
table set out below.
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RANKING OF THE COMPANY RELEVANT PERCENTAGE
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outside first and second quartiles 0
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In second quartile
(x)
Between 0, where the Company ranks at --- and
(2)
(x)
99% where the Company ranks at --- , increasing
(4)
on a straight line basis between those
positions
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In first quartile 100%
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4. TREATMENT OF CHANGES WITHIN THE COMPARATOR GROUP
(a) In the event that a company in the Comparator Group ceases to trade,
is acquired by another company or is for other reasons suspended from
dealing on the London Stock Exchange it shall be deleted from the
list.
(b) On any, scrip issue, discounted open offer, sub-division,
consolidation or rights issue or any other event or circumstance of
like effect occurring during the Measurement Period, prices subsequent
to the event shall be restated as calculated by Xxxxxxxxxx-Xxxxx.
(c) An appropriate adjustment shall be made for any merger, take-over or
other change in capital. Any price adjusted to take account of capital
changes shall be calculated by Xxxxxxxxxx-Xxxxx.
Executed as a deed by )
XXXXXX X XXXXXX )
in the presence of: )
Executed as a deed by )
PROTEUS INTERNATIONAL PLC )
in the presence of: )
Director
Director/Secretary
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