Exhibit 10.21

 

Dated      7 September                                 2005

 

 

 

 

 

 

 

 

 

 

 

 

WATSON WYATT

 

 

 

 

 

 

 

 

 

TRUST DEED AND RULES OF THE
WATSON WYATT SHARE INCENTIVE PLAN 2005

 

 

Directors’ Adoption

 

19 August 2005

 

 

 

HMRC Approval

 

9 September 2005

 

 

 

HMRC Ref

 

A2102/PC

 

 

 

Expiry Date

 

9 September 2015

 

 

 

 

 

[g181791ks01i001.gif]

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

 

Ref 01/145/K Kelleher

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Table of Contents

Contents

 

Page

Trust Deed and Rules of the Watson Wyatt Share Incentive Plan 2005

 

1

Part A - Definitions

 

2

1

 

Meaning of words used

 

2

Part B - Operation of the Plan and Joining the Plan

 

4

2

 

Operation of the Plan

 

4

3

 

Joining the Plan

 

4

Part C - Bonus Shares

 

6

4

 

Bonus Shares

 

6

Part D - Investment Shares

 

8

5

 

Investment Shares

 

8

Part E - Matching Shares

 

12

6

 

Matching Shares

 

12

Part F - Dividends

 

14

7

 

Dividends

 

14

Part G - General Rules

 

16

8

 

General rules about Shares

 

16

9

 

Leaving Employment

 

18

10

 

General rules relating to the Plan

 

19

11

 

Assets of the Plan

 

22

12

 

Trustees

 

23

13

 

Participating Companies

 

24

14

 

Changing the Rules

 

25

15

 

Termination

 

25

16

 

Governing Law

 

26

 

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Trust Deed and Rules of the Watson Wyatt
Share Incentive Plan 2005

This Trust Deed and Rules of the Watson Wyatt Share Incentive Plan 2005 are made
as a deed on        7 September                               2005 between:

(1)                              Watson Wyatt Limited (the “Company”) and

(2)                              Halifax Corporate Trustees Limited (the
“Trustees”)

to set up the Plan with effect from the date of formal approval of the Plan by
HMRC.

[SEAL]

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Part A - Definitions

1                                      Meaning of words used

“Accumulation Period” means the period during which a Participant’s
Contributions are held prior to their application by the Trustees in acquiring
Investment Shares and which shall not be longer than the period specified in
paragraph 51(1) of Schedule 2 (currently 12 months).

“Award Day” means the date on which Bonus Shares or Matching Shares are awarded
under the Plan.

“Award System” means the system of calculating the number of Bonus Shares to be
awarded from time to time, adopted by the Directors and which satisfies
paragraph 9 of Schedule 2 (participation on same terms).

“Bonus Shares” means Free Shares, for the purposes of communicating with
Employees.

“the Company” means Watson Wyatt Limited.

“Contributions” means deductions from a Participant’s Salary for the purpose of
acquiring Investment Shares.

“Directors” means the board of directors of the Company or a duly authorised
committee.

“Dividend Shares” means Shares which the Trustees acquire by reinvesting
Participants’ cash dividends from their Plan Shares.

“Employee” means, except for the purposes of Rule 10.5, an employee of a
Participating Company.

“Employment” means employment by the Company or any associated company (within
the meaning of paragraph 94 of Schedule 2).

“Free Shares” means Shares awarded to Participants without payment under Rule 4.

“Holding Period” means the period for holding Bonus Shares, Matching Shares and
Dividend Shares in the Plan.

“HMRC” means Her Majesty’s Revenue and Customs;

“Investment Shares” means Partnership Shares, for the purposes of communicating
with Employees.

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.

“the London Stock Exchange” means the London Stock Exchange plc.

“Market Value” means on any day where Shares are admitted to trading on the NYSE
the value per share fixed at the mid market closing price of the Company’s
Shares on the NYSE quoted in the Wall Street Journal on the preceding day or on
any day where Shares are admitted to the Official List of the UK Listing
Authority and traded on the London Stock Exchange, the mid market closing price
derived from the Daily Official List of the London Stock Exchange on the
preceding day. Where Shares are not so admitted, “Market Value” has the meaning
given by virtue of Part VIII of the Taxation of Chargeable Gains Act 1992 and as
agreed in advance with HMRC Shares Valuation.

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“Matching Shares” means Shares awarded without payment in proportion to any
Investment Shares allocated to Participants.

“Method 1” means the method described in paragraph 41 of Schedule 2.

“Method 2” means the method described in paragraph 42 of Schedule 2.

“NYSE” means the New York Stock Exchange.

“Official List” means the list maintained by the Financial Services Authority
for the purpose of section 74(1) Financial Services and Markets Act 2000;

“Participant” means any Employee who has joined the Plan.

“Participating Company” means an employer participating in the Plan being the
Company, any Subsidiary and any other company which (if required) HMRC agrees
may participate and which in both cases is so designated by the Directors.

“Partnership Shares” means Shares which the Trustees allocate to Participants in
respect of their Contributions.

“Performance Measures” means targets set by the Directors from time to time,
which meet the requirements of paragraph 39 of Schedule 2 and govern the
availability, number or value of Bonus Shares to be awarded.

“Plan” means the Watson Wyatt Share Incentive Plan 2005, as changed from time to
time.

“Plan Shares” mean the Shares awarded or allocated to Participants under the
Plan.

“Reconstruction or Takeover” means a transaction affecting any Shares as
described in Paragraph 86 of Schedule 2.

“Salary” has the meaning in paragraph 43(4) of Schedule 2.

“Schedule 2” means Schedule 2 to ITEPA.

“Share” means a share of Class A common stock of par value US$0.01 of Watson
Wyatt & Companies Holdings, which meets the requirements of Part 4 of Schedule
2, and any security which forms part of any new holding referred to in paragraph
86, of Schedule 2.

“Subsidiary” means a company which is under the control of the Company within
the meaning of Section 840 of the Taxes Act (as extended by paragraph 91 of
Schedule 2).

“Taxes Act” means the Income and Corporation Taxes Act 1988.

“Trustee” means Halifax Corporate Trustees Limited or the trustees for the time
being of the Plan.

Words of the masculine gender shall include the feminine and vice versa.

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Part B - Operation of the Plan and Joining the Plan

2                                      Operation of the Plan

2.1                            Purpose of the Plan

The purpose of the Plan is to help and encourage the holding of Shares by
Participants or for their benefit through an employee share ownership plan
approved under the provisions of paragraph 81 of Schedule 2.

The Trustees may achieve the purpose of the Plan by applying the capital and
income of the Plan assets to or for the benefit of Participants as described in
the Plan rules.

2.2                            Time of Operation

The Directors can only operate the Plan at any time after its approval by HMRC.

If the Shares are listed on the Official List and admitted to trading on the
London Stock Exchange Bonus Shares will only be awarded within 42 days
commencing on any of the following:

2.2.1                   the day on which the Plan is formally approved by HMRC;

2.2.2                   the day after the announcement of the Company’s results
to the NYSE or the London Stock Exchange for any period;

2.2.3                   any day on which the Directors resolve that exceptional
circumstances exist which justify an award of Bonus Shares;

2.2.4                   any day on which changes to the legislation or
regulations affecting employee share ownership plans approved by HMRC under
Schedule 2 are announced, effected or made; and

2.2.5                   the day on which Shares are first admitted to the
Official List and traded on the London Stock Exchange (or admitted by any other
stock exchange nominated by the Directors).

If the Directors or the Trustees cannot award Bonus Shares due to restrictions
imposed by statute, order, regulation or Government directive, or by any code
adopted by the Company based on the Model Code, the Directors or the Trustees
may award Bonus Shares within 42 days after the lifting of such restrictions.

3                                      Joining the Plan

3.1                            Employees to be invited

Subject to Rules 3.2 and 3.3, whenever the Directors decide to operate the Plan,
they must invite all Employees who:

3.1.1                   are UK resident taxpayers (within the meaning of
paragraph 8(2) of Schedule 2); and

3.1.2                   have been employees of a qualifying company (within the
meaning of paragraph 17 of Schedule 2) throughout any qualifying period of
service set under Rule 3.5.

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They may also invite other Employees, provided that if there is a qualifying
period of service, the Employees satisfy Rule 3.1.2. Every Employee who is
invited to participate must be invited on the same terms, in accordance with
paragraph 9 of Schedule 2.

3.2                            Prohibited invitations

However, the Directors must not invite:

3.2.1                   any Employee, in any tax year, who is to participate at
the same time in another employee share ownership plan approved under Schedule 2
which has been established by the Company or a connected company (within the
meaning of paragraph 18(3) of Schedule 2) or would have so participated but for
the failure to meet a performance target;

3.2.2                   anyone who is excluded from participating under
paragraph 19 of Schedule 2 (no material interest requirement).

3.3                            Free share invitations - Employees under notice

The Directors may decide not to invite Employees to participate in an award of
Bonus Shares who have given or received notice of termination of employment on
or before the Award Day relating to that award.

3.4                            Form of invitation and application

The invitation and application to join the Plan must be made in the form
determined by the Directors, and approved by HMRC (if necessary). This may
include invitations and applications by writing or by email, internet (or other
electronic means) or interactive voice response.

The invitation and the application will, if applicable, specify whether for that
operation of the Plan, Bonus Shares and/or Investment Shares and Matching Shares
(and, where relevant, Dividend Shares) may be acquired. If Investment Shares are
offered, the application form will comply with Rule 5.

3.5                            Qualifying period of service

The Directors may set a qualifying period of service for any operation of the
Plan, and if they do it must apply in relation to, and be the same for, all
Employees.

If Bonus Shares are offered, the qualifying period of service must not be more
than 18 months, ending with the Award Day of those Bonus Shares.

If Investment Shares are offered and there is no Accumulation Period, the
qualifying period of service must not be more than 18 months, ending with the
start of Contributions. If there is an Accumulation Period, the qualifying
period of service must not be more than 6 months, ending with the start of the
relevant Accumulation Period.

3.6                            Submission of Applications

Employees invited to participate in the Plan and who wish to do so, must submit
the completed application by the date specified, if any. In doing so they agree
to the terms and conditions of participation set out in the application. Anyone
who has not submitted a completed application form as required will not
participate in the Plan.

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Part C - Bonus Shares

4                                      Bonus Shares

4.1                            Limit

If the Plan is operated to provide Bonus Shares, Bonus Shares awarded to each
Employee participating in the Plan must not have an initial market value of more
than £3,000 in any tax year, or any greater amount specified for the purposes of
paragraph 35(1) of Schedule 2. Rule 10.9 (Participation in more than one
employee share ownership plan) also applies.

“Initial market value” means the Market Value of the Bonus Shares on the Award
Day and, the market value of Shares subject to restrictions or risk of
forfeiture shall be determined as if there were no restriction or risk.

4.2                            Terms relating to Bonus Shares

The Directors will set the following:

4.2.1                   the Award System for the operation of the Plan including
any Performance Measures which apply, using either Method 1 or Method 2;

4.2.2                   the Holding Period, which must be at least three years
but not more than five years beginning with the Award Day, must be the same for
all Bonus Shares in an award and cannot be increased once that award has been
made; and

4.2.3                   any forfeiture provisions under Rule 4.4.

During this Holding Period, Rule 8.4 applies in relation to the Bonus Shares.

4.3                            Notifying Participants of Performance Measures

If Performance Measures apply to the availability, number or value of Bonus
Shares, the Directors will as soon as reasonably practicable, write and tell:

4.3.1                   all Employees in general terms of the Performance
Measures to be used to calculate the number of Bonus Shares awarded to each
Participant. But the Directors may exclude from such notice any information if
they reasonably consider that to disclose it would prejudice commercial
confidentiality; and

4.3.2                   each Participant about the Performance Measures which
will be used to calculate the number or value of Bonus Shares awarded to him.

4.4                            Forfeiture of Bonus Shares

The Directors may decide that an award of Bonus Shares will be made on the basis
that if Participants leave Employment for a specified reason (other than for a
reason set out in paragraph 32(2) of Schedule 2) within a specified period (not
exceeding 3 years from the Award Day) they will lose any right to receive Bonus
Shares.

4.5                            Payments by Participating Companies and acquiring
Shares

The Directors will notify each Participating Company of the amount it is
required to contribute in respect of an award of Bonus Shares. Each
Participating Company will pay this amount to the Trustees and the Trustees will
use the funds to purchase or subscribe for Shares, as agreed with the Directors.

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4.6                            Awards of Bonus Shares

The Trustees will award Bonus Shares to each Participant on the basis set out in
the Award System and any Performance Measures.

4.7                            Award Eligibility Requirement

The Trustees will not award Bonus Shares to a Participant who is not an Employee
on the Award Day.

4.8                            Notification by Trustees

As soon as practicable after the award of Bonus Shares, the Trustees will write
and tell each Participant of the award. The Trustees will include in the
notification the number and description of the Bonus Shares, the Holding Period
applying to the Bonus Shares and their Market Value on the Award Day.

4.9                            Transfer of legal title

After the end of the Holding Period, the Participant may at any time direct the
Trustees to transfer legal title of Bonus Shares to him or as he may direct.

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Part D - Investment Shares

5                                      Investment Shares

5.1                            Application for Investment Shares

If the Plan is operated to provide Investment Shares, Employees invited must
complete the relevant section of the application form. This section will satisfy
the requirements of Part 6 of Schedule 2 and will include the notice required
under paragraph 48 of Schedule 2 (notice of possible effect of deductions on
benefit entitlement).

5.2                            Amount of Contributions

The Directors will determine the maximum Contribution which will apply in
relation to that operation of the Plan which will not be more than the lower of:

5.2.1                   10% of Salary for that tax year; or

5.2.2                   £1,500 in any tax year; or

5.2.3                   a greater percentage or amount specified for the
purposes of paragraph 46 of Schedule 2 from time to time.

If Contributions exceed these limits, the excess amount will be repaid to the
Participant as soon as practicable (after deducting any income tax and national
insurance contributions due). Rule 10.9 (Participation in more than one employee
share ownership plan) also applies.

5.3                            Minimum Contribution

The Directors may set from time to time a minimum amount (not more than £10) for
Contributions on any occasion. If there is such a minimum amount, it will be set
out in the application.

5.4                            Limit on Investment Shares

The Directors may set from time to time a limit on the number of Shares which
may be acquired as Investment Shares. If there is such a limit, it will be set
out in the application.

5.5                            Scaling down

If there is a limit on the number of Shares which may be acquired as Investment
Shares and the Contributions set out in the application forms exceed that
number, the Directors will scale down applications by taking any one or more of
the following steps in turn:

5.5.1                   reduce the excess of Contributions over any set minimum
amount for Contributions proportionately; then

5.5.2                   reduce all monthly Contributions to any set minimum
amount for Contributions; then

5.5.3                   select applications to contribute the minimum amount for
Contributions by lot.

The Directors will notify Participants of the scaling down and their application
will be deemed changed or withdrawn.

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5.6                            Holding Contributions

The Participants’ Contributions will be transferred to the Trustees as soon as
practicable. The Trustees will hold the Contributions in an account with:

5.6.1                   a person falling within section 840A(1)(b) of the Taxes
Act; or

5.6.2                   a building society; or

5.6.3                   a firm falling within section 840A(1)(c) of the Taxes
Act.

The account may, but need not, pay interest on the Contributions held. If it
does, the Trustees must account to each Participant for the interest earned on
his Contributions.

5.7                            Repayment of Contributions

The Trustees must pay to a Participant any Contributions it holds (after
deducting any income tax and national insurance contributions due) together with
any interest if, before acquiring Investment Shares on behalf of the
Participant;

5.7.1                   they receive a termination notice under Rule 15.1
(Termination); or

5.7.2                   HMRC notifies the Company that it has withdrawn the
approval of the Plan under Schedule 2; or

5.7.3                   the Participant ceases to be in Employment during an
Accumulation Period.

5.8                            Excess Contributions

If the Participant agrees when completing the application, the Trustees may
carry forward and add to the amount of the next Contribution any Contributions
not used to acquire Investment Shares. If there is no such agreement, the
Trustees must pay the excess to the Participant as soon as practicable after
deducting any income tax and national insurance contributions due.

5.9                            Accumulation Periods

The Directors may determine in relation to any operation of the Plan whether
there will be an Accumulation Period.

The start and end of any Accumulation Period must be set out in the application.
The Accumulation Period must start on or before the date of the first deduction
of Contributions. It must not exceed 12 months. The same Accumulation Period or
periods must apply to all Participants for each operation of the Plan.

If, during the Accumulation Period, a transaction occurs in relation to the
Shares which results in a new holding of shares being equated with the Shares
for the purposes of capital gains tax purposes (“new shares”), then the
Contributions held may, with the agreement of the Participant, be used at the
end of the Accumulation Period to acquire new shares. By signing the application
form Participants agree to the acquisition of new shares.

5.10                     Stopping and re-starting Contributions

A Participant may give notice to the Company to stop making Contributions. He
may also give notice to the Company at any time that he wishes Contributions to
re-start, but he may not make up any missed Contributions. If the Plan is
operated with an Accumulation Period, the Directors may determine whether
Participants can re-start their Contributions

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more than once in an Accumulation Period. If such a determination is made, it
will be set out in the application form and will apply equally to all
Participants.

The Company will arrange for Contributions to stop within 30 days of receiving
the notice, unless the notice specifies a later date. The Company will arrange
for Contributions to re-start by the next due date for Contributions which is
more than 30 days after receipt of the notice to re-start, unless the notice
specifies a later date.

5.11                      Varying Contributions

A Participant may vary his Contributions with the agreement of the Company.

5.12                     Withdrawal from agreement to make Contributions

A Participant may at any time withdraw from the agreement to make Contributions
made at the time of joining the Plan and ask for the return of any Contributions
which have not been used to acquire Investment Shares by giving notice to the
Company. The Participant will be treated as having stopped Contributions 30 days
after the receipt of the notice, unless a later date is specified in the notice.
The Trustees must pay to the Participant any Contributions they hold as soon as
practicable (after deducting any income tax and national insurance contributions
due) together with any interest, if payable. Any Investment Shares already
allocated will not cease to be subject to the Plan as a result of such a
withdrawal.

5.13                     Allocating shares - Accumulation Period

5.13.1            If there is an Accumulation Period, the Trustees must allocate
Investment Shares to each Participant within 30 days after the end of that
period.

5.13.2            The number of Shares allocated to each Participant will be
calculated using the lower of the Market Value of the Shares at the beginning of
the Accumulation Period and:

(i)                                  if all the Investment Shares to be
allocated to Employees on that occasion are purchased by the Trustees on the
date of allocation, and provided the Company is quoted on the NYSE and/or on the
London Stock Exchange, the average price actually paid by the Trustees for the
Shares; or

(ii)                               the Market Value at the date of allocation.

5.13.3            All Investment Shares must be allocated on the same date.

5.14                     Allocating shares - no Accumulation Period

5.14.1            If there is no Accumulation Period, the Trustees must allocate
Investment Shares to the Participants by a date set by the Trustees. This date
must be not later than 30 days after the last day on which the relevant
deduction of Contributions takes place.

5.14.2            If all the Investment Shares to be allocated to Employees on
that occasion are purchased by the Trustees on the date of allocation, and
provided the Company is quoted on the NYSE and/or on the London Stock Exchange,
the number of Shares allocated to each Participant will be calculated using the
average price actually paid by the Trustees for the Shares.

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5.14.3            If all the Investment Shares to be allocated to Employees on
that occasion are not purchased by the Trustees on the date of allocation, the
number of Shares allocated to each Participant will be calculated using the
Market Value on the date of allocation.

5.14.4            All Investment Shares must be allocated on the same date.

5.15                     Allocation Eligibility Requirement

The Trustees will not allocate Investment Shares to an individual who is not an
Employee at the following times:-

5.15.1            where there is no Accumulation Period, at the time the related
Contributions are deducted; and

5.15.2            where there is an Accumulation Period, at the time of the
first deduction of the related Contributions.

Rule 9.1 applies if an Employee leaves Employment during the acquisition period
for an award of Investment Shares.

5.16                     Notification by Trustees

As soon as reasonably practicable after the Trustees have allocated Investment
Shares to a Participant, the Trustees will notify that Participant in writing.
The Trustees will set out the number and description of the Investment Shares,
the amount of Contributions used to acquire the Shares and the price per Share
which was used to calculate the number of Investment Shares allocated in
accordance with Rule 5.13 or 5.14.

5.17                     Access to Investment Shares

A Participant may at any time take out of the Plan any Investment Shares
allocated to him. This is subject to any income tax and national insurance due
and Rule 6.4 (Forfeiture of Matching Shares).

A Participant may, at any time, direct the Trustees to transfer legal title of
Investment Shares to him or as he may direct.

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Part E - Matching Shares

6                                      Matching Shares

6.1                            Ratio of Matching Shares to Investment Shares

If the Plan is operated to provide Matching Shares, a Participant who is
allocated Investment Shares is entitled to an award of Matching Shares. The
Directors will set the ratio of Matching Shares to Investment Shares from time
to time and the ratio which applies will be set out in the application form. The
same ratio must apply to all those who participate in the related allocation of
Investment Shares.

The ratio cannot exceed the ratio specified in paragraph 60 of Schedule 2, which
is currently two Matching Shares to one Investment Share.

The ratio may change in the circumstances set out in the application. The
Directors will write and tell Participants if the ratio changes, before the
allocation of the related Investment Shares.

6.2                            Rights and restrictions

Matching Shares must be shares of the same class and carry the same rights as
the Investment Shares to which they relate.

Rules 4.2.2 (holding period) and 8.4 (Restrictions on disposals of Shares) apply
to the award of Matching Shares.

6.3                            Payments by Participating Companies and acquiring
Shares

The Directors will notify each Participating Company of the amount it is
required to contribute in relation to Matching Shares. Each Participating
Company will pay this amount to the Trustees and the Trustees will immediately
use the funds to purchase or subscribe for Shares, as agreed with the Directors.

6.4                            Forfeiture of Matching Shares

The Directors may decide that an award of Matching Shares will be made on the
basis that if a Participant leaves Employment for a specified reason or takes
the Matching Shares out of the Plan (other than for a reason specified in
paragraph 32(2) of Schedule 2) within a specified period (not exceeding 3 years
from the Award Day) he will lose any right to receive Matching Shares.

The Directors may also decide that an award of Matching Shares will be made on
the basis that a Participant who takes out of the Plan the Investment Shares in
respect of which the Matching Shares were awarded (other than for a reason
specified in paragraph 32(2) of Schedule 2) within a specified period (not
exceeding 3 years from the Award Day) will not be entitled to any Matching
Shares in respect of those Investment Shares.

6.5                            Awards of Matching Shares

The Trustees will award Matching Shares to each Participant on exactly the same
basis. The terms will be set out in the application form.

The Trustees will award Matching Shares on the same day as they allocate the
related Investment Shares to Participants.

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However, the Directors may decide to operate the Plan on the basis that if any
Investment Shares allocated are not sufficient to result in the award of a
Matching Share on the same day, the match will be made when sufficient
Investment Shares have been allocated.

6.6                            Notification by Trustees

The notification requirements set out in Rule 4.8 will apply to Matching Shares,
except that Market Value will be notified as the price per Share used to
calculate the number of Investment Shares allocated on the same day in
accordance with Rule 5.13 or 5.14.

6.7                            Transfer of legal title

After the end of the Holding Period, the Participant may at any time, direct the
Trustees to transfer legal title of Matching Shares to him or as he may direct.

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Part F - Dividends

7                                      Dividends

7.1                            Dividend Shares

The Directors may from time to time decide that instead of Participants
receiving cash dividends:

7.1.1                   the Trustees must re-invest cash dividends they receive
in respect of Plan Shares in additional Shares to be held on behalf of
Participants; or

7.1.2                   the Trustees must re-invest cash dividends as set out in
Rule 7.1.1 but only in respect of Plan Shares of Participants who have chosen
this by completing the relevant section on the application form.

The total amount so reinvested cannot exceed £1,500 in each tax year (or such
greater amount specified for the purposes of paragraph 64(1) of Schedule 2). If
the Directors have not made such decisions, or to the extent that the cash
dividends exceed the limit, the Trustees must pay over cash dividends to the
relevant Participant as soon as practicable. Rule 10.9 (Participation in more
than one employee share ownership plan) also applies.

7.2                            Allocating Dividend Shares

7.2.1                   If all the Dividend Shares to be allocated to Employees
on any occasion are purchased by the Trustees on the date of allocation, and
provided the Company is quoted on the NYSE and/or the London Stock Exchange,
then the number of Dividend Shares allocated to each Participant will be
calculated using the average price actually paid by the Trustees for the Shares.

7.2.2                   If all the Dividend Shares to be allocated to Employees
on any occasion are not purchased by the Trustees on the date of allocation,
then the number of Dividend Shares allocated to each Participant will be
calculated using the Market Value on the date of allocation.

7.2.3                   Dividend Shares must be allocated on or before a date
set by the Trustees. This date must be no later than 30 days after the date they
receive cash dividend.

All the Dividend Shares must be allocated on the same date. In allocating Shares
the Trustees must treat Participants fairly and equally.

7.3                            Cash dividends carried forward and paid

The Trustees may retain, carry forward and add to the amount of the next cash
dividend to be reinvested the amount of any cash dividend which is not
sufficient for the allocation of one or more Dividend Shares. But the Trustees
must keep these amounts separately identifiable and amounts derived from an
earlier cash dividend are treated as reinvested before an amount derived from a
later cash dividend.

The Trustees must pay to the Participant, as soon as practicable, any cash
amounts referred to above:

7.3.1                   which are not reinvested in Dividend Shares within 3
years of payment of the dividend; or

7.3.2                   if the Participant ceases to be in Employment; or

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7.3.3                   if the Trustees receive a termination notice under Rule
15.1.

When making the payment, the Trustees will supply to the Participant the
information referred to in paragraph 80(4) of Schedule 2.

7.4                            Notification

As soon as practicable after the Trustees have allocated any Dividend Shares to
a Participant, the Trustees will notify the Participant in writing. The Trustees
will set out the number and description of those Dividend Shares, the price per
Share which was used to calculate the number of Dividend Shares allocated in
accordance with Rule 7.2.1 or 7.2.2, the Holding Period and any cash dividends
carried forward as described in Rule 7.3.

7.5                            Rights and restrictions

Dividend Shares must be shares of the same class and carry the same rights as
the Shares in respect of which the dividend is paid. They must not be subject to
any forfeiture.

Rule 4.2.2 applies to Dividend Shares but the Holding Period must be 3 years
starting on the date the Trustees allocated the Dividend Shares as described in
Rule 7.2 Rule 8.4 also applies to Dividend Shares.

7.6                            Transfer of legal title

After the end of the Holding Period the Participant may at any time direct the
Trustees to transfer legal title of Dividend Shares to him or as he may direct.

7.7                            Other dividends

Cash dividends payable in respect of Plan Shares and not reinvested in Dividend
Shares (because they exceed the limit set out in Rule 7.1 or for any other
reason) will belong to the relevant Participant. The Trustees will pay those
dividends to the Participant as soon as practicable after receipt.

The Trustees are not required to pay a Participant any interest earned on any
dividend to which the Participant is entitled.

Where any dividends received are foreign cash dividends within the meaning of
paragraph 75(6) of Schedule 2 the Trustees will notify the Participant of the
amount of any foreign tax deducted from the dividend before it was paid.

7.8                            Scrip dividends

The Trustees may receive, following a direction from the Participant, Shares
credited as fully paid in whole or in part instead of a cash dividend (a scrip
dividend). These Shares will not form part of the Participant’s Plan Shares. The
Trustees will take all reasonable steps to transfer such Shares to the
Participant.

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Part G - General Rules

8                                      General rules about Shares

8.1                            Listing

If and so long as Shares are admitted to trading on the NYSE and/or to listing
on the Official List and to dealing on the London Stock Exchange, the Company
will, where relevant, apply for listing of any Shares subscribed under the Plan
as soon as practicable after their allotment.

8.2                            Rights

Shares issued on subscription will rank equally in all respects with the Shares.
However, the Directors may determine that they will not rank equally in all
respects for any dividends or other distributions payable or made in respect of
a period beginning before their date of issue.

Where Shares are transferred they will have the benefit of all rights attaching
to the Shares by reference to a record date on or after the date on which they
are allocated or awarded.

The Trustees may award Shares, a proportion of which will rank for dividends or
other rights attaching to Shares by reference to a record date preceding the
relevant Award Day and a proportion of which will not. If this happens, the
Trustees will award the Shares to each Participant as far as practicable in
those same proportions.

8.3                            Acquisition of Shares

The Company may from time to time ask the Trustees to acquire any number of
Shares specified by it for award or allocation to Participants on a later
operation of the Plan. If the Trustees agree to acquire Shares, the Company will
ensure that the Trustees have sufficient funds to do so. The Trustees may also
acquire Shares at any other time, if they have sufficient funds to do so. These
Shares must satisfy the conditions specified in Part 4 of Schedule 2. Before any
such Shares are awarded or allocated under the Plan, they will be held on
general trust for the purposes of the Plan.

8.4                            Restrictions on disposals of Shares

The Participant must permit the Trustees to retain his Bonus Shares, Matching
Shares and Dividend Shares throughout the Holding Period and the Trustees must
retain them. The Participant cannot assign, charge or otherwise dispose of his
beneficial interests in the Bonus Shares, Matching Shares and Dividend Shares in
any way during the Holding Period, and the Trustees shall not dispose of the
Bonus Shares, Matching Shares and Dividend Shares (whether by transfer to the
Participant or otherwise) during the Holding Period, unless the Participant has
ceased to be in Employment, or if the circumstances set out in paragraphs 36(4)
or 77 of Schedule 2 apply.

8.5                            Plan limits

The number of Shares which may be allotted under the Plan on any day must not,
when added to the aggregate of the number of Shares which have been allotted in
the previous 10 years under the Plan and any other employees’ share schemes
operated by the Company, exceed 10 per cent of the ordinary share capital of the
Company in issue immediately before that day.

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In this Rule 8.5 “allotted” means, in the case of any share option scheme, the
placing of unissued shares under option and, in relation to other types of
employees’ share scheme, includes the issue of shares. In determining the limits
above, no account shall be taken of any Shares where the right to acquire Shares
was released or lapsed without being exercised. For the avoidance of doubt, the
acquisition of any shares by market purchase by, or for the purpose of, an
employee share scheme is not within the meaning of “allotted”.

8.6                            Voting

The Trustees will invite Participants to direct them on the exercise of any
voting rights attaching to Plan Shares held by the Trustees on their behalf. The
Trustees will only be entitled to vote on a show of hands if all directions
received from Participants who have given directions in respect of a particular
resolution are identical. The Trustees will not be under any obligation to call
for a poll. In the event of a poll the Trustees will follow the directions of
Participants.

The Trustees must not vote in respect of unallocated Shares or any Shares they
hold under the Plan which have not been registered in their name.

8.7                            Offers

The Participant (or anyone properly authorised) may direct the Trustees on the
appropriate action to take in relation to any right relating to a Participant’s
Plan Shares to receive other shares, securities or rights of any description,
and in relation to a Reconstruction or Takeover. The Trustees may not take any
action without such a direction. If the Trustees are to be involved in any
liability they may require an indemnity from the Participant which they consider
appropriate.

Where the Trustees exercise rights under a rights issue in respect of a
Participant’s Plan Shares, any shares, securities or rights allotted as a result
shall be treated as if they were Plan Shares identical to the Shares in respect
of which the rights were conferred and as if they were awarded to the
Participant under the Plan in the same way and at the same time as those Shares.
But this only applies if the rights issue is offered in respect of all ordinary
shares in the company and is subject to paragraphs 88(3) to 88(5) of Schedule 2.

On a Reconstruction or a Takeover, the Trustees will hold any new shares (as
described in paragraph 87 of Schedule 2) as Shares subject to the Plan, as if
they were the original Shares.

8.8                            Fractional entitlements

Where, following any offer described in Rule 8.7, the Trustees receive rights or
securities, they will allocate them among the Participants concerned on a
proportionate basis, rounding down if necessary. The Trustees will then add the
fractions not allocated and sell the unallocated rights and securities. The
Trustees will deduct all expenses of sale and applicable tax from the proceeds
of sale and distribute the net proceeds of sale proportionately among the
Participants whose allocation was rounded down. However, if a Participant’s
entitlement is under £3 the Trustees may retain that sum and hold it on trust
for the purposes of the Plan.

8.9                            Capital Receipts and other amounts

When the Trustees receive money which is a capital receipt (within the meaning
of Section 502 of ITEPA) or the proceeds of any disposal, they will transfer the
sum to the Participant

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after complying with their PAYE obligations. The Trustees may, however, retain
any capital receipt under £3 due to any Participant and hold it on trust for the
purposes of the Plan.

The Trustees must also pay over to each Participant any money or money’s worth
relating to any of his Plan Shares, apart from money’s worth consisting of new
shares as described in Rule 8.7. But the Trustees are entitled to retain any
amounts needed to discharge their PAYE obligations and cash dividends reinvested
or carried forward under Rule 7.3.

8.10                     Tax liabilities

The Trustees will maintain the necessary records to comply with their PAYE
obligations and those of the Participating Companies so far as they relate to
the Plan.

The Trustees will pay to the relevant employing companies sufficient sums to
enable the employing companies to discharge any obligations to make PAYE
deductions for income tax or national insurance contributions which arise in the
circumstances in Section 510(1) of ITEPA.

The Trustees may dispose of a Participant’s Plan Shares in order to raise
sufficient sums in order to meet any obligation under this Rule 8.10 unless the
Participant makes a payment in advance to the Trustees of a sum equal to the
amount required to discharge the obligation.

When a Participant becomes liable to tax under ITEPA or Schedules D (Case V) or
F of the Taxes Act in relation to his Plan Shares, the Trustees must give the
Participant any information relevant to determining that liability.

9                                      Leaving Employment

9.1                            Leaving Employment

9.1.1                   If a Participant leaves Employment, his Plan Shares will
cease to be subject to the Plan.

9.1.2                   Unless the Directors decide otherwise, the Plan will
operate on the basis that if a Participant leaves Employment for any reason, the
Trustees will transfer the Participant’s Plan Shares to the Participant or as he
may direct (or, if the Participant has died, to the personal representatives) as
soon as reasonably practicable.

9.1.3                   If a Participant leaves Employment during the
acquisition period relating to an allocation of Investment Shares, he shall:

(i)                                  for the purpose of awards of Investment
Shares and Matching Shares be treated as ceasing to be in Employment immediately
after the allocation of Investment Shares; and

(ii)                               for the purpose of determining when his Plan
Shares cease to be subject to the Plan, be treated as ceasing to be in
Employment immediately after the allocation of Investment Shares.

9.1.4                   For the purposes of this Rule 9.1 “acquisition period”
has the meaning given to it in paragraph 97(3) of Schedule 2.

9.1.5                   For the purposes of paragraph 98 of Schedule 2 the
retirement age is 50.

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9.2                            Tax free withdrawal of Plan Shares

In accordance with paragraph 498 of ITEPA, a Participant is not liable to income
tax or national insurance contributions on his Shares ceasing to be subject to
the Plan on leaving Employment for any of the following reasons:

9.2.1                   because of injury or disability;

9.2.2                   on being dismissed by reason of redundancy;

9.2.3                   by reason of a transfer to which the Transfer of
Undertakings (Protection of Employment) Regulations 1981 (S.I. 1981/1794)
applies;

9.2.4                   if the relevant employment is employment by an
associated company (see paragraph 95(2) of Schedule 2), by reason of a change of
control or other circumstances ending that company’s status as an associated
company;

9.2.5                   by reason of the Participant’s retirement on or after
reaching the specified retirement age of 50; or

9.2.6                   on the Participant’s death.

10                               General rules relating to the Plan

10.1                     Notices

Any notice or other document which has to be given in connection with the Plan
may be delivered to a Participant or sent by post to him at his home address
using the records of that Participant’s employing company, or such other address
as the Company or the Trustees consider appropriate or sent by e-mail (or other
electronic means) to any address which according to the records of his employing
company is used by him (or such other e-mail (or electronic) address as he may
from time to time specify). Any notice or other document which has to be given
to the Company or the Trustees in connection with the Plan may be delivered or
sent by post to them at their registered offices (or such other place as the
Directors or the Trustees may from time to time write and tell the Participants)
or if the Directors allow and subject to such conditions as they may specify,
sent by e-mail (or other electronic means) to the e-mail (or electronic) address
for the time being notified by the Company. Notices sent by post will be deemed
to have been given on the second day following the date of posting. Notices sent
by e-mail (or other electronic means), in the absence of evidence to the
contrary, will be deemed to have been received on the first day after sending.

10.2                     Documents sent to Shareholders

The Company may send to Participants copies of any documents or notices normally
sent to the holders of its Shares.

10.3                     Directors’ and Trustees’ decisions

The decision of the Directors (or of the Trustees if the Directors so decide) in
any dispute or question affecting any Employee or Participant will be final and
binding on the parties concerned.

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10.4                     Regulations

The Directors and the Trustees will have the power from time to time to make or
vary regulations for the administration and operation of the Plan, but these
must be consistent with this Deed.

10.5                     Terms of Employment

10.5.1            For the purposes of this Rule 10.5, “Employee” means any
Participant, any Employee (within the meaning of Rule 1) or any other person.

10.5.2            This Rule 10.5 applies:

(i)                                  whether the Company has full discretion in
the operation of the Plan, or whether the Company could be regarded as being
subject to any obligations in the operation of the Plan;

(ii)                               during an Employee’s employment or employment
relationship; and

(iii)                            after the termination of an Employee’s
employment or employment relationship, whether the termination is lawful or
unlawful.

10.5.3            Nothing in the Rules or the operation of the Plan forms part
of the contract of employment or employment relationship of an Employee. The
rights and obligations arising from the employment relationship between the
Employee and the Company are separate from, and are not affected by, the Plan.
Participation in the Plan does not create any right to, or expectation of,
continued employment or a continued employment relationship.

10.5.4            The award or allocation of Plan Shares on a particular basis
in any year does not create any right to or expectation of the award or
allocation of Plan Shares on the same basis, or at all, in any future year.

10.5.5            Without prejudice to Rule 3.1, no Employee is entitled to
participate in the Plan, or be considered for participation in it, at a
particular level or at all. Participation in one operation of the Plan does not
imply any right to participate, or to be considered for participation in any
later operation of the Plan.

10.5.6            Without prejudice to an Employee’s right to receive any Free
or Matching Shares awarded to him or any Investment Shares or Dividend Shares
allocated to him subject to and in accordance with the express terms of the
Rules, no Employee has any rights in respect of the exercise or omission to
exercise any discretion, or the making or omission to make any decision,
relating to the Plan. Subject to the provisions of Schedule 2, any and all
discretions, decisions or omissions relating to the invitation and application
of Employees to join the Plan on any particular occasion may operate to the
disadvantage of the Employee, even if this could be regarded as capricious or
unreasonable, or could be regarded as in breach of any implied term between the
Employee and his employer, including any implied duty of trust and confidence.
Any such implied term is excluded and overridden by this Rule 10.5.

10.5.7            No Employee has any right to compensation for any loss in
relation to the Plan, including:

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(i)                                  any loss or reduction of any rights or
expectations under the Plan in any circumstances or for any reason (including
lawful or unlawful termination of employment or the employment relationship);

(ii)                               any exercise of a discretion or a decision
taken in relation to a Participant or to the Plan, or any failure to exercise a
discretion or take a decision;

(iii)                            the operation, suspension, termination or
amendment of the Plan.

10.5.8            Participation in the Plan is permitted only on the basis that
the Participant accepts all the provisions of the Rules, including in particular
this Rule 10.5. By participating in the Plan, an Employee waives all rights,
other than those expressly set out in the Plan.

10.5.9            Nothing in this Plan confers any benefit, right or expectation
on a person who is not an Employee. No such third party has any rights under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan.
This does not affect any other right or remedy of a third party which may exist.

10.5.10     Each of the provisions of this Rule 10.5 is entirely separate and
independent from each of the other provisions. If any provision is found to be
invalid then it will be deemed never to have been part of these Rules and to the
extent that it is possible to do so, this will not affect the validity or
enforceability of any of the remaining provisions.

10.6                     Beneficiary who is incapable

If the Trustees consider that a person cannot look after his affairs (because of
illness, mental disorder, age or other reason) they may use any amounts or
Shares due to that person for his or her benefit, or may pay or transfer them to
some other person to do so. The receipt of the person to whom the Trustees make
payments or transfer Shares will discharge the Trustees from any obligation in
respect of the amounts or Shares concerned.

10.7                     Setting up costs

The Company will pay the costs and expenses of the preparation and execution of
these Plan rules.

10.8                     Errors and omissions

If as a result of an error or omission Bonus Shares, Investment Shares, Matching
Shares or Dividend Shares are not awarded to a Participant in accordance with
the Plan rules, the Trustees may, but without any obligation to do so, do all
such acts or things as may be agreed with HMRC to rectify the error or omission
notwithstanding that such actions may fall outside the time limits contemplated
by or otherwise conflict with the other provisions of the Plan rules.

10.9                     Participation in more than one employee share ownership
plan

When calculating the limits on individual participation in the Plan, awards
which have been made to an Employee in the same tax year under employee share
incentive plans established by the Company or a connected company (within the
meaning of paragraph 18(3) of Schedule 2) shall be included. Employee share
ownership plans means plans approved under Schedule 2.

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Awards means (depending on the limit being considered) awards of free shares or
the acquisition by an employee of partnership shares or dividend shares under
such approved plans.

The Trustees will maintain all records necessary to enable this rule to be
complied with.

10.10              Data protection

By participating in the Plan the Participant consents to the holding and
processing of personal data provided by him to the Company, any Participating
Company, the Trustees or third party service provider for all purposes relating
to the operation of the Plan. These include, but are not limited to:

10.10.1     administering and maintaining records;

10.10.2     providing information to the Company, any Participating Company, the
Trustees, registrars, brokers or third party administrators of the Plan;

10.10.3     providing information to future purchasers of the Company or the
business in which the Participant works;

10.10.4     transferring information about the Participant to a country or
territory outside the European Economic Area that may not provide the same
statutory protection for the information as the Participant’s home country.

11                                Assets of the Plan

11.1                      Assets held on trust

The Trustees will hold all the payments they receive and the assets representing
them from time to time and all income on trust for the purposes of the Plan. The
Trustees may also accept gifts of cash and Shares which will be held on trust
for the purposes of the Plan.

11.2                      Use of assets

The Trustees may invest any moneys held by them and not immediately required for
the purpose of the Plan in such manner as they may choose. The Trustees are not
under a duty to invest trust property.

The Trustees may borrow in order to acquire Shares for the purposes of the Plan
or, but only after getting the written consent of the Company, for any other
purpose.

11.3                      Plan expenses

The Trustees will pay the expenses of the Plan (including their own expenses
incurred in attending to Plan business) from the Plan’s assets, if the assets
are sufficient and the Company decides in writing. If there is no such
direction, the expenses of the Plan will be met by the Participating Companies
in proportion to the amounts paid by them under the Plan or (if the Trustees
decide) in proportion to the number of Shares awarded to their Participants
under the Plan in the related year, or in proportion to both.

11.4                      Trustees’ duties relating to Shares

During the Holding Period, the Trustees may only sell or transfer any Bonus
Shares, Matching Shares or Dividend Shares in the following circumstances:

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11.4.1             if a Participant instructs this as described in Rule 8.7; or

11.4.2             to obtain sufficient funds to secure rights arising under a
rights issue affecting Plan Shares; or

11.4.3             to discharge PAYE obligations under Rule 8.10; or

11.4.4             if they receive a termination notice as described in Rule
15.1.

11.5                      Trustees holding Shares

Where a Participant loses any right to receive Shares under the Plan, the
Trustees will hold those Shares on general trusts for the purposes of the Plan.

12                               Trustees

12.1                     Appointment and removal

The Company may appoint new or additional trustees or a body corporate as a sole
trustee. The Company may also remove trustees.

These powers will be exercised by resolution of the Directors. These powers may
be exercised without giving a reason.

There must be at least two trustees, except when there is a sole corporate
trustee.

All the trustees must be resident in the United Kingdom for United Kingdom tax
purposes at all times.

12.2                     Retirement

A trustee may retire by giving to the Company written notice of his wish to
retire. The notice will take effect at the expiry of 3 months after the date of
the notice, or on any other date agreed with the Company. The retiring trustee
need not give a reason for retiring and will not be responsible for any costs
arising from his retirement. The retiring trustee will take the necessary
action, as directed by the Company, to give effect to his retirement including
delivering all documents which he has relating to the Plan. If necessary to
achieve compliance with Rule 12.1, the Company will procure a replacement
trustee to replace the retiring trustee at the end of the notice period. Any
continuing trustee is authorised to effect the transfer of Plan assets on behalf
of a retiring trustee.

12.3                     Exercise of powers

If there is more than one trustee, the Trustees may act by majority vote and may
delegate powers duties or discretions to any persons and on any terms (including
terms which allow the delegate to sub-delegate).

The Trustees may allow any Shares to be registered in the name of an appointed
nominee but these Shares must be registered in a designated account.

Trustees who delegate powers or use a nominee are not divested of any
responsibility under the Rules or under Schedule 2.

The Trustees may at any time, and must if the Company so directs, revoke any
delegation made under this Rule, or require any Plan assets held by another
person to be returned to the Trustees, or both.

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12.4                     Trustees’ charges

A trustee who carries on a profession or business may charge for services
provided on a basis agreed with the Company, as also may a company or firm in
which a trustee is interested. These charges will also be paid from the Plan
assets, if available, unless the Directors decide otherwise.

12.5                     Limit of Liability

A trustee will not be liable for any breach of trust except wilful wrongdoing
(but a paid trustee will also be liable for negligence).

12.6                     Indemnity

The Participating Companies will jointly and severally indemnify each of the
trustees (except a paid trustee) against any expenses and liabilities which are
incurred through acting as a trustee of the Plan but which cannot, for any
reason, be met from the Plan’s assets. But this does not apply to expenses and
liabilities which are incurred through wilful wrongdoing (or negligence in the
case of a paid trustee) or covered by insurance under Rule 12.7. The indemnity
in this Rule 12.6 is in addition to and without prejudice to the right which the
Trustees have under general law and the Trustee Act 2000 to be indemnified out
of the Plan’s assets.

12.7                     Insurance

The Trustees may insure the Plan against any loss caused by it or any of its
employees, officers, agents or delegates. They may also insure themselves and
any of these persons against liability for breach of trust not involving wilful
wrongdoing. Except in the case of a paid trustee, the premiums may be paid from
the Plan assets.

If the Trustees are insured, they will waive the protection of Rule 12.5.

12.8                     Personal Interest

The Trustees and any director, officer or employee of a corporation acting as
trustee, may be interested in any securities of a Participating Company or any
company in which a Participating Company may be interested. Such person may
enter into a contract with any such companies and will not be liable to account
for any profits obtained.

12.9                     Dividend waiver

The Trustees waive and cancel their rights and entitlements in respect of the
Shares which are not Plan Shares to all dividends to be declared by the Company
in the future.

12.10              Qualifying Transfers

The Trustees will comply with paragraph 78 of Schedule 2 if there is a
qualifying transfer of shares to the Trustees in accordance with that paragraph.

13                               Participating Companies

13.1                     Inclusion in the Plan

An employer wishing to participate in the Plan must enter into a deed with the
Company and the Trustees agreeing to comply with the rules of the Plan. The deed
must be in a form agreed by HMRC.

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13.2                     Ceasing to participate

Any Participating Company will cease to participate in the Plan:

13.2.1            when it ceases to be a Subsidiary; or

13.2.2            if and during any times when the Directors decide that the
Plan will not apply to it. (But in making this decision the Directors must
ensure that the conditions in paragraph 10 of Schedule 2 are still satisfied.
These conditions are that the Plan must not have any features which may
discourage certain employees from participating and that the Plan cannot benefit
mainly directors or higher paid employees).

14                               Changing the Rules

14.1                     Before HMRC approval

Before HMRC approves the Plan under Schedule 2 the Directors can change the
Rules as necessary in order to obtain approval.

14.2                     After HMRC approval

After the Plan is approved by HMRC, the Directors and the Trustees may, together
by deed at any time, change the Plan rules. But if a key feature of the Plan is
to be changed at a time when the Plan is approved by HMRC under Schedule 2, and
the approved status of the Plan is to be maintained, the change will not have
effect until it has been approved by HMRC.

A “key feature” is any provision needed to comply with the requirements of
Schedule 2.

The Directors must not make any changes to the Plan which would breach the rule
against perpetuities (see Rule 15.4).

15                               Termination

15.1                     Termination notice

The Company in general meeting or the Directors may at any time resolve to
terminate the Plan. If they so resolve, they must issue a termination notice and
give it without delay to:

15.1.1            HMRC;

15.1.2            the Trustees; and

15.1.3            all individuals who have Plan Shares, and all Employees who
have returned valid application forms but have not been awarded or allocated any
Shares.

15.2                     Effect of termination notice

Once the Trustees receive the termination notice, they must not award or acquire
any more Shares on behalf of Participants.

The Trustees must remove each Participant’s Plan Shares from the Plan by either
transferring them or the proceeds of their sale to the Participant or as he may
direct. (If the Participant has died, his personal representatives may give
these instructions.) This should be done as soon as practicable once three
months have passed from the date the termination notice was given under Rule 15.
But the Trustees must also delay the removal

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of Plan Shares until this can be done without any liabilities to income tax
under Sections 501 to 507 of ITEPA. The Trustees may only remove Plan Shares at
an earlier time if the Participant agrees after receiving the termination
notice.

The Trustees must also pay to Participants, as soon as they receive the
termination notice, any cash dividends they are holding (Rule 7.3) or any
Contributions they are holding (Rule 5.7).

15.3                     Surplus Assets

Any surplus assets left after the Trustees have decided when Plan Shares will be
removed under Rule 15.2 will be paid to Participating Companies, so far as
practicable, in proportion to the total amounts paid by each of them to the
Plan, but the Trustees may decide on payments in different proportions.

15.4                     Perpetuity Period

The perpetuity period relating to the Plan is fifteen years. The Trustees may
not award Shares more than ten years after the date of these Plan rules.

The end of the “perpetuity period” is the time by which Participants or other
persons must have an interest in Shares, without risk of loss of any rights.

16                               Governing Law

English law governs the Plan and its administration.

Executed as a deed on the date shown at the top of this document.

 

THE COMMON SEAL of Watson Wyatt
Limited was put onto this deed in the
presence of:

 

[g181791ks09i001.gif]

 

 

 

 

Director

/s/ John J. Haley

 

 

 

 

 

 

 

 

 

 

 

 

Secretary

/s/ Walter W. Bardenwerper

 

 

 

 

 

 

 

 

 

 

 

 

THE COMMON SEAL of Halifax
Corporate Trustees Limited was put
onto this deed in the presence of:

 

[g181791ks09i001.gif]

 

 

 

 

 

 

 

 

Director

/s/ [illegible]

 

 

 

[SEAL]

 

 

 

 

 

 

 

 

Secretary

/s/ [illegible]

 

 

 

 

 

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