As
filed with the Securities and Exchange Commission on November 3,
2008.
File
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
S-8
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
TEMPUR-PEDIC
INTERNATIONAL INC.
(Exact
Name of Registrant as Specified in Its Charter)
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DELAWARE
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33-1022198
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(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer
Identification
No.)
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1713
Jaggie Fox Way, Lexington, Kentucky 40511
(Address
of Principal Executive Office)( Zip Code)
TEMPUR-PEDIC
INTERNATIONAL INC.
AMENDED
AND RESTATED 2003 EQUITY INCENTIVE PLAN
(Full
title of the plan)
Mark
Sarvary
Tempu-Pedic
International Inc.
1713
Jaggie Fox Way
Lexington,
KY 40511
(Name
and address of agent for service)
(800)
878-8889
(Telephone
Number, including area code, for agent for service)
Copy
to:
John
R. Utzschneider, Esq.
Bingham
McCutchen LLP
One
Federal Street
Boston,
MA 02110
Telephone: (617)
951-8000
Facsimile: (617)
951-8736
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
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Large
accelerated filer x
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Accelerated
filer o
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting company o
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CALCULATION
OF REGISTRATION FEE
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Title
Of
Securities
To Be Registered
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Amount
To
Be
Registered
(1)
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Proposed
Maximum
Offering
Price
Per
Share
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Proposed
Maximum
Aggregate
Offering
Price
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Amount
Of
Registration
Fee
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Amended
and Restated 2003 Equity Incentive Plan
Common
Stock (par value $0.01 per share)
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1,000,000 | $ | 6.39 | (2) | $ | 6,390,000 | $ | 252 | ||||||||
(1) In
addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended,
this Registration Statement also covers an indeterminate number of additional
shares of common stock that may be offered or issued in the event of a stock
dividend, reverse stock split, split-up, recapitalization, forfeiture of stock
under those plans, or other similar event.
(2) The
estimate price of $6.39 per share, which is the average of the high and low
proposed initial offering price of the common stock as reported on the New York
Stock Exchange on October 28, 2008, is set forth solely for the purpose of
calculating the fee pursuant to Rule 457(c) and (h), and has been used only for
those shares without a fixed exercise price. None of such shares have
been issued or are subject to outstanding options.
EXPLANATORY
NOTE
On
December 24, 2003, Tempur-Pedic International Inc. (the “Registrant”) filed a
Registration Statement on Form S-8 (File No. 333-11595) (referred to
in this document as the “First Registration
Statement”) to register under the Securities
Act of 1933, as amended (the “Securities Act”),
8,000,000 shares of its common stock issuable by the Registrant under the
Tempur-Pedic International Inc. 2003 Equity Incentive Plan.
This Registration Statement on Form S-8 has been prepared and filed
pursuant to and in accordance with the requirements of General Instruction E to
Form S-8 for the purpose of effecting the registration under the Securities
Act of the additional 1,000,000 shares of the Registrant’s common
stock. At the Registrant’s annual meeting of stockholders held on May
6, 2008, the Registrant’s stockholders approved and adopted the Amended and
Restated 2003 Equity Incentive Plan which increased the number of shares that
may be issued by an additional 1,000,000 shares, for an aggregate amount of
9,000,000 shares of the Registrant’s common stock that may be issued upon the
granting of awards pursuant to the plan at any time or from time to time from
the date hereof. Pursuant to General Instruction E to Form S-8,
Registrant hereby incorporates herein by reference the contents of the First
Registration Statement into this Registration Statement.
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The following documents filed by the
Registrant with the Securities and Exchange Commission (the “Commission”) pursuant
to the Securities Act or the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), are hereby incorporated by reference into this Registration
Statement:
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(a)
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The
Registrant’s Annual Report on Form 10-K for the year ended December 31,
2007 filed on February 29, 2008;
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(b)
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All
other reports filed by the Registrant pursuant to Sections 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
Registrant’s annual report referred to in (a) above;
and
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(c)
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The
section entitled “Description of Registrant’s Securities to be Registered”
contained in the Registrant’s Registration Statement on Form 8-A, as
amended (File No. 001-31922) filed under Section 12(b) of the Exchange
Act, including all amendments or reports filed for the purpose of updating
such description.
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In addition, all documents filed with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act subsequent to the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities
registered hereby have been sold or which deregisters all of such securities
then remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item
8. Exhibits.
The following exhibits are filed as
part of this Registration Statement:
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Exhibit
Number
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Exhibit Description
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4.1
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4.2
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4.3
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5.1
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10.1
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10.2
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10.3
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10.4
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23.1
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23.2
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24.1
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Pursuant to the requirements of the
Securities Act of 1933, as amended, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-8 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Town of Lexington,
State of Kentucky, on this 3rd day of November, 2008.
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TEMPUR-PEDIC
INTERNATIONAL INC.
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BY:
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/S/ MARK
SARVARY
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Mark
Sarvary
President
and Chief Executive Officer
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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Mark Sarvary and Dale E. Williams, and
each of them, as such person’s true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, for such person and in such
person’s name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) and additions to this
registration statement on Form S-8 and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and hereby grants to such attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as such person might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or such person’s substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the
Securities Act of 1933, this registration statement has been signed by the
following persons in the capacities indicated as of the 3rd day of
November, 2008.
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Signature
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Title
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/S/ MARK SARVARY
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Mark
Sarvary
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President,
Chief Executive Officer, and
Director
(Principal Executive Officer)
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/S/ DALE E. WILLIAMS
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Dale
E. Williams
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Executive
Vice President, Chief Financial Officer
and
Secretary
(Principal
Financial Officer)
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/S/ BHASKAR RAO
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Bhaskar
Rao
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Chief
Accounting Officer and
Vice
President of Strategic Planning
(Principal
Accounting Officer)
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/S/ H. THOMAS BRYANT
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H.
Thomas Bryant
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Director
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/S/ FRANCIS A. DOYLE
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Francis
A. Doyle
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Director
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| /S/ JOHN A. HEIL | |
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John
A. Heil
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Director
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| /S/ PETER K. HOFFMAN | |
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Peter
K. Hoffman
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Director
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| /S/ SIR PAUL JUDGE | |
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Sir
Paul Judge
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Director
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| /S/ NANCY F. KOEHN | |
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Nancy
F. Koehn
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Director
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| /S/ CHRISTOPHER A. MASTO | |
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Christopher
A. Masto
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Director
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| /S/ P. ANDREWS MCLANE | |
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P.
Andrews McLane
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Director
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| /S/ ROBERT B. TRUSSELL | |
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Robert
B. Trussell
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Director
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EXHIBIT
INDEX
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Exhibit
Number
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Exhibit Description
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4.1
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Amended
and Restated Certificate of Incorporation of the Registrant (incorporated
by reference from Amendment No. 3 to the Registrant’s Registration
Statement on Form S-1 (File No. 333-109798) filed with the Commission on
December 12, 2003.)
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4.2
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Third
Amended and Restated Bylaws of the Registrant (incorporated by reference
from to the Registrant’s Current Report on Form 8-K (File No. 333-134683)
filed with the Commission on October 27, 2008.)
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4.3
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Specimen
certificate for shares of common stock (incorporated by reference from
Amendment No. 3 to the Registrant’s Registration Statement on Form
S-1 (File No. 333-109798) filed with the Commission on December 12,
2003.)
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5.1
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Opinion
of Bingham McCutchen LLP with respect to the legality of the shares being
registered (filed herewith).
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10.1
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Amended
and Restated 2003 Equity Incentive Plan of the Registrant (incorporated by
reference from Appendix A to the Registrant’s Registration Proxy Statement
on Schedule 14A (File no. 001-31922, Appendix A) filed with the Commission
on March 24, 2008.)
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10.2
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United
Kingdom Approved Share Option Sub Plan To The 2003 Equity Incentive Plan
of the Registrant (filed herewith)
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10.3
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Form
of Stock Option Agreement for employees for the Amended and Restated 2003
Equity Incentive Plan (incorporated by reference from Registrant’s
Quarterly Report on Form 10-Q (File no. 001-31922) filed with the
Commission on August 8, 2006.)
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10.4
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Form
of Stock Option Agreement for Named Executive Officers for the Amended and
Restated 2003 Equity Incentive Plan (incorporated by reference from
Registrant’s Amended Report on Form 8-K (File no. 001-31922) filed with
the Commission on May 19, 2008.
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23.1
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Consent
of Ernst & Young LLP, Independent Registered Public Accounting
Firm.
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23.2
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Consent
of Bingham McCutchen LLP (included in Exhibit 5.1).
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24.1
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Power
of Attorney (included in signature page
hereto).
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November 3,
2008
Tempur-Pedic
International Inc.
1713
Jaggie Fox Way
Lexington,
Kentucky 40511
Re: Registration
Statement on Form S-8
Ladies
and Gentlemen:
This opinion is furnished in connection
with the registration, pursuant to a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended (the “Securities Act”), to be filed
with the Securities and Exchange Commission on or about November 3, 2008
(the “Registration Statement”), of an
aggregate of 1,000,000 shares (the “Shares”) of common
stock, par value $0.01 per share (the “Common Stock”), of
Tempur-Pedic International Inc., a Delaware corporation (the “Company”), all of
which are or will be issuable to directors, employees and consultants of the
Company as restricted stock, stock that is not subject to restrictions, or
pursuant to awards of stock appreciation rights or restricted stock
units or upon the exercise of options granted pursuant to the Company’s
Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”).
We have acted as counsel to the Company
in connection with the foregoing registration of the Shares. We have
examined and relied upon originals or copies of such records, instruments,
certificates, memoranda, and other documents as we have deemed necessary or
advisable for purposes of this opinion and have assumed, without independent
inquiry, the accuracy of those documents. In that examination, we have assumed
the genuineness of all signatures, the conformity to the originals of all
documents reviewed by us as copies, the authenticity and completeness of all
original documents reviewed by us in original or copy form, and the legal
competence of each individual executing such documents. We have further assumed
that all options granted or to be granted pursuant to the 2003 Plan were or will
be validly granted in accordance with the terms of the 2003 Plan, that all
Shares to be issued upon exercise of such options will be issued in accordance
with the terms of such options and the 2003 Plan, and that all Shares sold or
granted as restricted stock, stock that is not subject to restrictions, or
pursuant to awards of stock appreciation rights or restricted stock units will
be sold or granted in accordance with the terms of the 2003 Plan and for
benefits to the Company authorized by the Board of Directors.
This opinion is limited solely to the
Delaware General Corporation Law, as applied by courts located in Delaware, the
applicable provisions of the Delaware Constitution and the reported judicial
decisions interpreting those laws.
Based upon and subject to the
foregoing, we are of the opinion that the Shares to be issued by the Company
pursuant to the 2003 Plan have hereby been duly authorized, and when issued and
delivered in accordance with the terms of the 2003 Plan, will be validly issued,
fully paid, and non-assessable.
We consent to the filing of a copy of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Bingham McCutchen
LLP
BINGHAM McCUTCHEN
LLP
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to
the incorporation by reference in the Registration Statement (Form S-8)
pertaining to the Tempur-Pedic International Inc. Amended and Restated 2003
Equity Incentive Plan of our reports dated February 14, 2008, with respect to
the consolidated financial statements and schedule of Tempur-Pedic International
Inc. and Subsidiaries included in its Annual Report (Form 10-K) for the year
ended December 31, 2007, and the effectiveness of internal control over
financial reporting of Tempur-Pedic International Inc. and Subsidiaries filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Louisville,
Kentucky
October
29, 2008
TEMPUR
PEDIC INTERNATIONAL INC.
UNITED
KINGDOM APPROVED SHARE OPTION SUB PLAN
TO
THE 2003 EQUITY INCENTIVE PLAN
Her
Majesty’s Revenue and Customs Reference: X23169/GWW
Adopted
by the Committee on ________________
Approved
by Her Majesty’s Revenue and Customs on ________________
KPMG
1
Puddle Dock
LONDON
EC4V
3PD
RULES
OF THE TEMPUR PEDIC INTERNATIONAL INC. UNITED
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2.
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7
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4.
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9
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9.
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16
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RULES
OF THE TEMPUR PEDIC INTERNATIONAL INC. UNITED
KINGDOM
APPROVED SHARE OPTION SUB PLAN TO THE 2003 EQUITY
INCENTIVE
PLAN
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1.
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1.1
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As
used in this Plan, the following terms and phrases shall have the
following meanings:
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“Act” means the UK Income Tax
(Earnings and Pensions) Act 2003;
“Acquiring Company” means,
where the conditions of paragraph 26(2) of Schedule 4 are met, such company as
shall be at any time the “acquiring company” as defined in that
paragraph;
“Acquisition” means a merger
or consolidation of the Company with or into another person or the sale,
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more other persons in a single transaction or series of related
transactions;
“Adoption Date” means the
earlier of the date on which the Main Plan was adopted by the Board and the date
on which the Main Plan was approved by the Company’s shareholders;
“Affiliate” means any
corporation, partnership, limited liability company, business trust, or other
entity controlling, controlled by or under common control with the
Company;
“Approval Date” means the date
upon which Her Majesty’s Revenue and Customs approves the Plan;
“Associated Company” means has
the same meaning as in paragraph 35(1) of Schedule 4;
“Board” means the board of
directors of the Company;
“Change of Control” means the
occurrence of any of the following after the date of the approval of the Main
Plan by the Board:
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(a)
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an
Acquisition, unless securities possessing more than 50% of the total
combined voting power of the survivor’s or acquiror’s outstanding
securities (or the securities of any parent thereof) are held by a person
or persons who held securities possessing more than 50% of the total
combined voting power of the Company’s outstanding securities immediately
prior to that transaction, or
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(b)
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any
person or group of persons (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended and in effect from time to
time) directly or indirectly acquires beneficial ownership (determined
pursuant to Securities and Exchange Commission Rule 13d-3 promulgated
under the said Exchange Act) of securities possessing more than 50% of the
total combined voting power of the Company’s outstanding securities
pursuant to a tender or exchange offer made directly to the Company’s
shareholders that the Board does not recommend such shareholders accept,
other than:
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(i)
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the
Company or an Affiliate;
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(ii)
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an
employee benefit plan of the Company or any of its
Affiliates;
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(iii)
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a
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates;
or
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(iv)
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an
underwriter temporarily holding securities pursuant to an offering of such
securities; or
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(c)
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over
a period of 36 consecutive months or less, there is a change in the
composition of the Board such that a majority of the Board members
(rounded up to the next whole number, if a fraction) ceases, by reason of
one or more proxy contests for the election of Board members, to be
composed of individuals who either:
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(i)
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have
been Board members continuously since the beginning of that period;
or
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(ii)
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have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in sub-point (c)(i)
above who were still in office at the time that election or nomination was
approved by the Board; or
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(d)
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a
majority of the Board votes in favour of a decision that a Change in
Control has occurred;
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“Committee” means the
compensation committee of the Board, which in general is responsible for the
administration of the Main Plan and for any period during which no such
committee is in existence “Committee” shall mean the Board and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if
at all, by the Board;
“Company” means:
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(a)
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Tempur
Pedic International Inc. a corporation organized under the laws of the
State of Delaware;
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(b)
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in
relation to New Options granted pursuant to Rule 2.2 save for the purposes
of Rules 2, 3 and 8.2 the Acquiring Company;
or
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(c)
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some
other company falling within sub-paragraph (b) or sub-paragraph (c) of
paragraph 14 of Schedule 4 over whose shares a New Option has been
granted;
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“Competitive Enterprise” means
a business enterprise that engages in, or owns or controls a significant
interest in, any entity that engages in the manufacture, sale or distribution of
mattresses or pillows or other bedding products or other products competitive
with the Company’s products and shall include, but not be limited to, the
entities set out in any appendix to the Option Agreement, which may be amended
from time to time upon notice to the Participant;
“Conversion Rate” means on any
given day the average currency conversion rate quoted by the Wall Street Journal
as the price for pounds sterling purchased with US dollars on the preceding day
on which the New York Stock Exchange is open for business;
“Date of Grant” means the date
on which an Option is granted as specified in the Option Agreement. Only if
expressly so provided in the applicable Option Agreement shall the Date of Grant
be the date on which the Option Agreement has been duly executed and delivered
by the Company and the Participant;
“Eligible Employee” means any
Group Employee who is required to devote substantially all his working time to
the business of the Group (provided that in the case of a director, he is
required to devote to his duties not less than 25 hours per week, excluding meal
breaks) and is not precluded by paragraph 9 of Schedule 4 from participating in
the Plan;
“Exercise Price” means the
amount in US dollars (“Dollars”) as determined by the Company at the Date of
Grant, which a Participant shall pay to acquire a Share on the exercise of an
Option being, subject to Rule 2.2 and Rule 6, not less than 100% of the Market
Value of a Share on the Date of Grant or not less than 110% of the Market Value
of a Share on the Date of Grant if the Participant holds more than 10% of the
total combined voting power of all classes of stock of the Company;
“Group” means the Company and
its Subsidiaries and the phrase “Group Company” shall be construed
accordingly;
“Group Employee” means an
employee or an executive director of any Group Company;
“Key Feature” means a
provision of the Plan which is necessary to meet the requirements of Schedule
4;
“Main Plan” means the Tempur
Pedic International Inc. 2003 Equity Incentive Plan;
“Market Value” means on any
day an amount equal to the closing price of a Share as reported on the New York
Stock Exchange for that day or, if no closing price is reported for that date,
the closing price on the next preceding date for which a closing price was
reported, or if on that day the Shares are not so listed, the market value of a
Share determined in accordance with Part VIII of the UK Taxation of Chargeable
Gains Act 1992 and agreed in advance with HMRC Shares Valuation;
“New Option” means an option
over shares meeting the requirements of sub-paragraphs 27(4)(a) to (d) of
Schedule 4, granted in consideration for the release of a Subsisting Option
within the periods specified in paragraph 26(3) of Schedule 4;
“NIC” means UK National
Insurance Contributions;
“NIC Election” means an
election in the form envisaged in Paragraph 3B(1) of Schedule 1 to the Social
Security Contribution and Benefits Act 1992 as a result of which the secondary
NIC liability, if any, in respect of the exercise of the Option becomes the
Participant’s liability;
“Notice of Exercise” means the
notice of exercise in such form as the Committee may determine from time to
time;
“Option” means a right to
acquire Shares granted or to be granted pursuant to Rules 2.1 or
2.2;
“Option Agreement” means the
option agreement entered into by the Company and the Participant in such form as
the Committee may determine from time to time;
“Other Option Plan” means any
share option plan (other than this Plan) approved by Her Majesty’s Revenue and
Customs under Schedule 4 and established by the Company or any Associated
Company thereof;
“Participant” means a person
who has been granted an Option or (where the context admits) his legal personal
representative(s);
“Plan” means this Tempur Pedic
International Inc. United Kingdom Approved Share Option Sub Plan to the Main
Plan constituted and governed by the Rules with, and subject to, any amendments
hereto properly effected;
“Redundancy” means the
cessation of employment or office by reason of redundancy within the meaning of
the UK Employment Rights Act 1996;
“Retirement” means the
cessation of employment or office by reason of retirement at or beyond the age
of 55;
“Rules” means the rules of the
Plan as the same may be amended from time to time;
“Schedule 4” means Schedule 4
to the Act;
“Share” means a share of
common stock in the capital of the Company that meets the requirements to be
ordinary share capital within the meaning of section 832(1) of the UK Income and
Corporation Taxes Act 1988;
“Subsidiary” means a company
which is under Tax Control of the Company;
“Subsisting Option” means an
Option which has been granted and which has not lapsed, been surrendered,
renounced or exercised in full;
“Tax Control” means has the
same meaning as in section 840 of the UK Income and Corporation Taxes Act
1988.
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1.2
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In
these Rules, except insofar as the context otherwise
requires:
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(a)
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words
denoting the singular shall include the plural and vice
versa;
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(b)
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words
importing a gender shall include every gender and references to a person
shall include bodies corporate and unincorporated and vice
versa;
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(c)
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reference
to any enactment shall be construed as a reference to that enactment as
from time to time amended, modified, extended or re-enacted and shall
include any orders, regulations, instruments or other sub-ordinate
legislation made under the relevant
enactment;
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(d)
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words
have the same meanings as in Schedule 4 unless the context otherwise
requires; and
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(e)
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headings
and captions are provided for reference only and shall not be considered
as part of the Plan.
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2.1
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The
Committee may in its absolute discretion select any number of individuals
who shall at the intended Date of Grant be Eligible Employees and
recommend the grant to them of Options. The Committee may also delegate to
an executive officer or officers the authority to grant Options to
Eligible Employees who are not officers in accordance with such guidelines
as the Committee shall set forth at any time or from time to time. Options
may be granted subject to Rule 3 under this Plan by the Committee or by an
executive officer or officers as provided above but in both cases not
earlier than the Approval Date and not later than the tenth anniversary of
the Adoption Date provided that the Shares satisfy the conditions
specified in paragraphs 16 to 20 inclusive of Schedule 4 on the Date of
Grant.
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2.2
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Where
the circumstances noted in Rule 5.3 apply New Options may be granted
within the terms of paragraph 26 of Schedule 4 in consideration for the
release of Options. Such New Options are deemed to be equivalent to the
old Options and to have been granted within the terms of this
Plan.
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2.3
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No
Option may be transferred, assigned or charged and any purported transfer,
assignment or charge shall be void ab initio. For the avoidance of doubt,
this Rule 2.3 shall not prevent the Option of a deceased Participant being
exercised by his personal representative(s) within the terms of these
Rules.
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2.4
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An
Option may be granted subject to a condition of exercise that the
Participant is required to:
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|
(a)
|
bear
the cost of all or part of the secondary NIC, if any, which arises in
respect of the exercise of the Option;
and/or
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(b)
|
enter
into an NIC Election; or
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(c)
|
accept
that an NIC Election that has already been entered into will apply to the
Option being granted
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in which
case any secondary NIC due on the exercise of the Option shall be payable by or
recoverable from that Participant in accordance with Rule 7.4 provided that the
Committee, acting fairly and reasonably, may in its discretion at any time or
times release the Participant from his liability or reduce his liability
hereunder provided that where an NIC Election has been entered into between the
relevant Group Company and that Participant any amendment to that election to
reduce the Participant’s liability will require prior approval of Her Majesty’s
Revenue and Customs.
Where an
Option is granted subject to (b) or (c) above and at the date of exercise no
valid NIC Election is in place then the Option shall be deemed to have been
granted subject to (a) above.
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2.5
|
Options
shall be granted to an Eligible Employee by way of an Option Agreement.
The Option Agreement shall specify the Date of Grant, the number of Shares
subject to Option, the Exercise Price, details of when and how the Option
may be exercised and, where this is a condition of exercise of the Option,
that the Participant is liable to pay secondary
NIC.
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3.1
|
Any
Option granted to an Eligible Employee shall be limited and take effect so
that immediately following such grant he would hold Subsisting Options
over Shares with an aggregate Market Value not exceeding £30,000, or such
other limit specified in paragraph 6 of Schedule
4.
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For the
purpose of this Rule 3.1, Subsisting Options shall comprise Subsisting Options
and subsisting options granted under all Other Option Plans.
For the
purpose of this Rule 3.1 the Market Value of Shares shall be calculated in
accordance with paragraph 6(3) of Schedule 4 (converted from US dollars to
pounds sterling at the Conversion Rate applicable on each Date of
Grant).
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3.2
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At
no time shall the aggregate number of Shares issued pursuant to or subject
to Subsisting Options granted under this Plan and subsisting awards
granted under the Main Plan exceed 8,000,000 Shares or any other limit
referred to in the Main Plan from time to time, subject to the provisions
of Section 8 of the Main Plan. For the purposes of this Rule 3.2, if any
Option granted under the Plan or option or stock appreciation right
granted under the Main Plan expires, terminates or is cancelled for any
reason without having been exercised in full or if any other award under
the Main Plan is forfeited by the recipient, the Shares not purchased by
the participant or optionee under the Main Plan or which are forfeited by
the recipient under the Main Plan shall again be available for Options to
be granted under the Plan and awards granted under the Main Plan. In
addition, settlement of any award under the Main Plan shall not count
against the foregoing limitations except to the extent settled in the form
of Shares.
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3.3
|
The
aggregate number of Shares covered by Options under this Plan and awards
under the Main Plan granted to any one person in any calendar year shall
not exceed 25% of the limit referred to in Rule
3.2.
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4.1
|
Subject
to each of the succeeding rules of this Rule 4 and Rule 7 any Subsisting
Option may be exercised by the Participant or, if deceased, by his
personal representatives in whole or in part at the time of or at any time
following the occurrence of the earlier of the following
events:
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(a)
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the
date or dates specified by the Company and stated in the Option Agreement,
provided that the Subsisting Option (or part thereof) will only become
exercisable on each such date if the Participant continues to be a Group
Employee on that date;
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(b)
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upon
an event giving a right of exercise in accordance with the provisions of
Rule 5.
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4.2
|
No
Option may be exercised by a Participant at any time when he is precluded
by paragraph 9 of Schedule 4 from participating in the
Plan.
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4.3
|
An
Option shall lapse and become thereafter incapable of exercise on the
earliest of the following events:
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(a)
|
the
tenth anniversary of the Date of Grant or such earlier date specified by
the Company at the Date of Grant and stated in the Option
Agreement;
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|
(b)
|
where
a Participant ceases to be a Group Employee by reason of death or
disability, twelve months following such
cessation;
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(c)
|
where
a Participant ceases to be a Group Employee for a reason not falling
within Rule 4.3(b) (including cessation as a result of Redundancy or
Retirement), three months following such
cessation;
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(d)
|
the
surrender of the Option by the
Participant;
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(e)
|
on
the dates determined in accordance with Rule
5.1;
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(f)
|
where
at any time within twelve months after ceasing to be a Group Employee by
reason of disability or at any time within three months after ceasing to
be a Group Employee for a reason not falling within Rule 4.3(b), in both
cases any of the following occurs in relation to a Participant, the date
the Participant enters into such an
activity:
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(i)
|
the
Participant unreasonably refuses to comply with lawful requests for
cooperation made the Board, the Company or its
Affiliates;
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(ii)
|
the
Participant accepts employment or a consulting or advisory engagement with
any Competitive Enterprise of the Company or its Affiliates or engages
otherwise in competition with the Company or its
Affiliates;
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(iii)
|
the
Participant acts against the interest of the Company or its Affiliates
including recruiting or employing, or encouraging or assisting his new
employer to recruit or employ an employee of the Company or its
Affiliates, without the Company’s written
consent;
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(iv)
|
the
Participant fails to protect and safeguard while in his possession or
control, or surrender to the Company upon termination of his employment or
association with the Company or its Affiliates or such earlier time or
times as the Board, the Company or any Affiliate may specify, all
documents, records, tapes, disks and other media of every kind and
description relating to the business, present or otherwise, of the Company
and its Affiliates, and any copies, in whole or in part thereof, whether
or not prepared by the Participant;
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(v)
|
the
Participant solicits or encourages any person or enterprise with which he
has had business-related contact or who has been a customer of the Company
or any of its Affiliates to use confidential information of the Company or
any of its Affiliates for his own benefit or gain, or the Participant
discloses or otherwise misuses confidential information or materials of
the Company or any of its Affiliates (except as required by applicable
law).
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4.4
|
Military
or sick leave or other bona fide leave shall not be deemed a cessation of
employment or other association, provided that it does
not exceed the longer of ninety (90) days and the period during which the
absent Participant’s reemployment rights, if any, are guaranteed by
statute or by contract.
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|
5.1
|
In
the event of an Acquisition in which Subsisting Options are not
exercisable in full pursuant to Rule 5.2, any Subsisting Option shall
nevertheless become exercisable in full if not replaced with New Options
pursuant to Rule 5.3 and shall lapse after 6 months following the
Acquisition. As to any one or more Subsisting Options which do not
otherwise become exercisable in full by reason of such Acquisition, the
Committee, acting fairly and reasonably, may also, either in advance of an
Acquisition or at the time thereof, provide for such Subsisting Options to
become exercisable in the event that the employment of the Participants
should subsequently cease following the
Acquisition.
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|
5.2
|
Subject
to the following, upon the occurrence of a Change of Control, Subsisting
Options not otherwise exercisable shall become exercisable with respect to
50% of the Shares for which such Subsisting Options are not then
exercisable. The provisions of this Rule 5.2 shall not apply: (i) in the
case of any Option granted pursuant to an Option Agreement requiring other
or additional terms upon a Change in Control (or similar event) or (ii) if
specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national securities
exchanges.
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|
5.3
|
If
a company obtains Tax Control of the Company in the circumstances
specified in paragraph 26(2)(a) of Schedule 4, a Participant may, by
agreement with that other company (the “Acquiring Company”), within the
period referred to in paragraph 26(3)(a) of Schedule 4, release his Option
(the “Old Option”) in consideration for the grant of a new option (the
“New Option”) which satisfies the conditions that
it:
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|
(a)
|
is
over shares in the Acquiring Company or some other company falling within
subparagraphs (b) or (c) of paragraph 16 of Schedule 4, which satisfies
the conditions specified in paragraphs 16 to 20 inclusive of Schedule
4;
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|
(b)
|
is
a right to acquire such number of shares as has on acquisition of the New
Option an aggregate Market Value equal to the aggregate Market Value of
the shares subject to the Old Option on its
release;
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|
(c)
|
has
an exercise price per share such that the aggregate price payable on the
complete exercise of the New Option equals the aggregate price which would
have been payable on complete exercise of the Old Option, and is
exercisable in the same manner as the Old Option and subject to the
provisions of the Plan, and where appropriate the Main Plan, as it had
effect immediately before the release of the Old
Option.
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The New Option shall, for all
purposes of the Plan, be treated as having been acquired at the same time as the
Old Option.
Where any
New Options are awarded pursuant to this Rule 5.3, the provision of the Plan and
where appropriate, the Main Plan, shall, in relation to the New Options, be
construed as if references to the Company and to the Shares were references to
the Acquiring Company or shares in that company or, as the case may be, to the
other company over whose shares the New Option relates, and to shares in that
other company.
Where, in
accordance with Rule 5.3, Old Options are released and New Options granted, the
New Options shall not be exercisable by virtue of the event by reason of which
the New Options were granted.
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6.1
|
All
of the Share numbers set forth in this Plan reflect the capital structure
of the Company as at 23 December 2003. In the event of any variation of
the share capital of the Company, including, but without prejudice to the
generality of the preceding words, any capitalisation or open offer or any
consolidation, sub-division or reduction of capital the number of Shares
subject to any Option and the Exercise Price may be adjusted by the
Committee in such manner as is in their opinion fair and reasonable
provided that:
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|
(a)
|
the
aggregate Exercise Price payable on the exercise of the whole Option
remains unchanged (except for minor changes caused by
rounding);
|
|
(b)
|
at
any time when the Plan remains approved by Her Majesty’s Revenue and
Customs no adjustment shall take effect without the prior approval of Her
Majesty’s Revenue and Customs;
|
|
(c)
|
at
any time when the Plan remains approved by Her Majesty’s Revenue and
Customs following the adjustment the Shares continue to satisfy the
conditions specified in paragraphs 16 to 20 inclusive of Schedule
4.
|
Such
variation shall be deemed to be effective, once Her Majesty’s Revenue and
Customs approval has been given, from the record date at which the respective
variation applied to other shares of the same class as the Shares. Any Options
exercised within the period from the record date to the date when the Options
are adjusted shall be treated as exercised with the benefit of the
variation.
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6.2
|
If
an adjustment is made pursuant to Rule 6.1 above with the intention that
the Plan shall cease to be approved by Her Majesty’s Revenue and Customs,
the Company shall immediately notify Her Majesty’s Revenue and
Customs.
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|
7.1
|
No
Option may be exercised whilst the Plan is approved by Her Majesty’s
Revenue and Customs unless the Shares satisfy the conditions specified in
paragraphs 16 to 20 inclusive of Schedule
4.
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|
7.2
|
An
Option shall be exercised in whole or in part by the Participant or, as
the case may be, his personal representative and the exercise shall be
effective on the date of receipt by the Company of a duly completed Notice
of Exercise accompanied by the appropriate payment in the form of cash or
a cheque payable to the order of the Company (or where a formal cashless
exercise program has been authorised by the Company entailing the sale of
Shares subject to an Option in a brokered transaction (other than to the
Company) an agreement with the Company as agent for the Participant to
sell or procure the sale of sufficient Shares acquired on exercise to pay
an amount equal to the appropriate
payment).
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|
7.3
|
Subject
to Rules 7.4 and 7.5, where an Option is exercised the number of Shares
specified in the Notice of Exercise given in accordance with Rule 7.2
shall be allotted or transferred, as appropriate, credited as fully paid
to the Participant within 30 days of the date of exercise and the Company
shall deliver or cause to be delivered to the Participant or his agent a
certificate or certificates for the number of Shares subject of the
exercise other than those which the Participant has instructed shall be
sold on his behalf by the Company. Save for any rights determined by
reference to a record date preceding the date of allotment or transfer,
such Shares shall rank pari passu with the other shares of the same class
then in issue.
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Notwithstanding
the preceding provisions of this Rule 7.3, if, at any time, in the reasonable
opinion of the Company, the issuance or transfer of Shares may constitute a
violation of law, then the Company may delay such issuance or registration of
transfer of such shares and the delivery of a certificate for such shares until
(i) approval shall have been obtained from such governmental agencies, other
than the Securities and Exchange Commission, as may be required under any
applicable law, rule, or regulation and (ii) in the case where such issuance or
transfer would constitute a violation of a law administered by or a regulation
of the Securities and Exchange Commission, one of the following conditions shall
have been satisfied:
|
(a)
|
the
Shares are at the time of the issue or transfer of such Shares effectively
registered under the Securities Act of
1933;
|
|
(b)
|
the
Company shall have determined, on such basis as it deems appropriate
(including an opinion of counsel in form and substance satisfactory to the
Company) that the sale, transfer, assignment, pledge, encumbrance or other
disposition of such shares or such beneficial interest, as the case may
be, does not require registration under the Securities Act of 1933, as
amended or any applicable State securities laws;
or
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|
(c)
|
the
Participant shall have made such written representation to the Company
(upon which the Company may reasonably rely) as the Company may deem
necessary or appropriate for the purpose of confirming that the issuance
or transfer of such Shares will be exempt from the registration
requirements of the Securities Act 1933 and any applicable state
securities laws and otherwise in compliance with all applicable laws,
rules and regulations, including but not limited to that the Participant
is acquiring the Shares for his or her own account for the purpose of
investment and not with a view to, or for the sale in connection with, the
distribution of any such Shares.
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The
Company shall make all reasonable efforts to bring about the occurrence of said
events.
|
7.4
|
If
an Option is exercised and the Participant was required under Rule 2.4 to
either bear the cost of all or part of the secondary NIC and/or to enter
into an NIC Election then the Participant shall grant to the Company the
irrevocable authority to withhold from his remuneration or any payment
otherwise due to him (in so far as legally able to do so) and/or, as agent
of the Participant and on his behalf, to sell or procure the sale of
sufficient of the Shares subject to Option so that the aggregate of the
amount withheld and the net proceeds payable to the Group Company are so
far as possible equal to but not less than the amount of the secondary NIC
for which the Participant is liable and the Company shall account to the
Participant for any balance.
|
No Shares
shall be allotted or transferred to the Participant until the Group Company has
received payment. This Rule 7.4 shall not apply if the Participant pays to the
Company in Pounds Sterling (whether by cheque or banker’s draft) the amount
necessary to satisfy such liabilities or makes alternative arrangements to the
satisfaction of his employer or former employer and the Company is informed by
the Group Company that the arrangements are satisfactory.
|
7.5
|
If
an Option is exercised and the Participant is liable to tax, duties or
other amounts on such exercise and his employer or former employer being a
Group Company is liable to make a payment to the appropriate authorities
on account of that liability then the Participant shall grant to the
Company the irrevocable authority to withhold from his remuneration or any
payment otherwise due to him (in so far as legally able to do so) and/or,
as agent of the Participant and on his behalf, to sell or procure the sale
of sufficient of the Shares subject to Option so that the aggregate of the
amount withheld and the net proceeds payable to the Group Company are so
far as possible equal to but not less than the amount payable to the
appropriate authorities and the Company shall account to the Participant
for any balance.
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No Shares
shall be allotted or transferred to the Participant until the Group Company has
received payment. This Rule 7.5 shall not apply if the Participant pays to the
Company in Pounds Sterling (whether by cheque or banker’s draft) the amount
necessary to satisfy such liabilities or makes alternative arrangements to the
satisfaction of his employer or former employer and the Company is informed by
the Group Company that the arrangements are satisfactory.
|
7.6
|
When
an Option is exercised in part, the balance shall remain exercisable on
the same terms as originally applied to the
Option.
|
|
7.7
|
For
so long as Shares are listed on the New York Stock Exchange, the Company
shall apply for Shares in respect of which an Option has been exercised to
be admitted for listing on the New York Stock Exchange, if they were not
so admitted already.
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|
8.1
|
The
Plan shall be administered by the Committee provided, however, that at any
time and on any one or more occasions the Board may itself exercise any of
the powers and responsibilities assigned the Committee under the Plan and
when so acting shall have the benefit of all of the provisions of the Plan
pertaining to the Committee’s exercise of its authorities
hereunder.
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|
8.2
|
The
Board may from time to time amend these Rules provided
that:
|
|
(a)
|
no
amendment may materially adversely affect a Participant as regards an
Option granted prior to the amendment being made except with the consent
in writing of the Participant;
|
|
(b)
|
no
amendment to any Key Feature shall have effect until approved by Her
Majesty’s Revenue and Customs whilst the Plan is and is intended to remain
approved by Her Majesty’s Revenue and Customs pursuant to Schedule 4;
and
|
|
(c)
|
no
amendment made with the intention that the Plan shall cease to be approved
by Her Majesty’s Revenue and Customs shall take effect unless at the same
time Her Majesty’s Revenue and Customs is notified of such
amendment.
|
|
8.3
|
The
Committee shall have complete authority to interpret the Plan. The
Committee’s determinations made in good faith, acting fairly and
reasonably, on matters referred to in the Plan shall be final, binding and
conclusive on all persons having or claiming any interest under the Plan
or Options granted under the Plan.
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|
8.4
|
Any
notice, demand, request or other communication under the Plan to any party
shall be deemed to be sufficient if contained in a written instrument
delivered in person or duly sent by first class registered, certified or
overnight mail, postage prepaid, or telecopied with a confirmation copy by
regular, certified or overnight mail, addressed or telecopied, as the case
may be, (i) if to the recipient of an Option, at his residence address
last filed with the Company and (ii) if to the Company, at its principle
place of business, addressed to the attention of its treasurer, or to such
other address or telecopier number, as the case may be, as the addressee
may have designated by notice to the addressor. All such notices,
requests, demands, and other communications shall be deemed to have been
received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee; and
(iii) in the case of facsimile transmission, when confirmed by facsimile
machine report.
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|
8.5
|
The
Company shall at all times during the term of the Plan in respect of
Subsisting Options granted hereunder reserve or otherwise keep available
such number of Shares as will be sufficient to satisfy the requirements of
the Plan (if then in effect) and the Subsisting Options and shall pay all
fees and expenses necessarily incurred by the Company in connection
therewith.
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|
9.1
|
The
Plan shall terminate upon the tenth anniversary of the Adoption Date or at
any earlier time by the passing of a resolution of the Board. Termination
of the Plan shall be without prejudice to the subsisting rights of
Participants.
|
|
9.2
|
The
rights and obligations of any individual under the terms of his office or
employment with any Group Company shall not be affected by his
participation in the Plan or any right which he may have to participate
therein, and an individual who participates therein shall waive any and
all rights to compensation or damages in consequence of the termination of
his office or employment (whether lawfully or unlawfully) for any reason
whatsoever insofar as those rights arise or may arise from his ceasing to
have rights under or be entitled to exercise any Option under the Plan as
a result of such termination.
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|
9.3
|
A
Participant shall, by participating in the Plan, waive any and all rights
to compensation or damages in consequence of any loss of income tax relief
under section 524 of the Act and/or any loss of relief or exemption from
liability to primary NIC or secondary NIC as a result of the Plan losing
approval under the Act and/or in consequence of the operation of the terms
of this Plan.
|
|
9.4
|
The
existence of any Option or Options shall not affect in any way the right
or power of the Company or its shareholders to make or authorise any or
all adjustments, recapitalisation, reorganisations, reductions of capital,
purchase or redemption of its own shares in accordance with Company law of
the State of Delaware or other changes in the Company’s capital structure
or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or convertible
into, or otherwise affecting the Shares or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or
otherwise.
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|
9.5
|
Neither
the grant of an Option nor any benefit which may accrue to a Participant
on the exercise of an Option shall form part of that Participant’s
pensionable remuneration for the purposes of any pension scheme or similar
arrangement which may be operated by any Group
Company.
|
|
9.6
|
It
is a condition of participation in this Plan that a Participant agree to
the holding of information about him by the Company and that he authorise
the Company and its agents and advisers to use such information according
to these Rules for the purposes of this Plan. It is a further condition of
participation in this Plan that each Participant agrees that data
concerning his participation may be processed by agents of the Company
wherever located and where necessary transmitted outside of the United
Kingdom. Each Option Agreement shall contain statements to this
effect.
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|
9.7
|
The
benefit of Rules 9.2 to 9.4 is given to the Company for itself and as
trustee and agent of each Subsidiary. To the extent that this Rule
benefits any company which is not a party to this Plan, the benefit shall
be held on trust and as agent by the Company for such company and the
Company may, at its discretion, assign the benefit of such Rules to such
company.
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|
9.8
|
The
Plan and all Options granted under it shall be governed by and construed
in accordance with the laws of the state of Delaware without regard to the
conflict of laws principles
thereof.
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