EXHIBIT 10.2

 

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THE MISYS OMNIBUS SHARE PLAN

 

 

This Plan:-

 

•  

has been approved by ordinary resolution of shareholders of the Company on
30 September 2008

 

•  

has been established by resolution of the directors of the Company

 

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CONTENTS

 

RULE         PAGE

PART A: INTERPRETATION AND ADMINISTRATION

   4

1

   DEFINITIONS    4

2

   INTERPRETATION    9

3

   ADMINISTRATION    9

4

   RIGHTS ATTACHING TO SHARES    10

PART B: MAKING OF AWARDS

   10

5

   ELIGIBILITY    10

6

   MAKING OF AWARDS    10

7

   TIMING OF AWARDS    10

8

   INDIVIDUAL LIMITS ON THE GRANTING OF AWARDS    11

9

   INDIVIDUAL LIMITS – MATCHING SHARES    11

10

   AWARD CERTIFICATE    11

11

   ACCEPTANCE OF AN AWARD    12

12

   TAX INDEMNITY    12

13

   TRANSFER OF BURDEN OF EMPLOYER’S NICS    12

14

   DATA PROTECTION    13

15

   RELATIONSHIP WITH CONTRACT OF EMPLOYMENT    13

16

   NON-TRANSFERABILITY OF AWARDS    14

PART C: NIL-COST OPTION AWARDS

   14

17

   STRUCTURE OF A NIL-COST OPTION AWARD    14

18

   EXERCISE OF A NIL-COST OPTION AWARD    14

19

   NIL-COST OPTION AWARDS - CESSATION OF EMPLOYMENT    15

PART D: CONTINGENT SHARE AWARDS

   16

20

   CONTINGENT SHARE AWARDS    16

21

   SATISFACTION OF CONTINGENT SHARE AWARDS    16

22

   CONTINGENT SHARE AWARDS – CESSATION OF EMPLOYMENT    17

PART E: SHARE OPTIONS

   18

23

   STRUCTURE OF A SHARE OPTION    18

24

   EXERCISE OF A SHARE OPTION    18

25

   SHARE OPTIONS - CESSATION OF EMPLOYMENT    19

PART F: PERFORMANCE CONDITIONS

   20

26

   PERFORMANCE CONDITIONS    20

PART G: RECOVERY OF TAX

   21

27

   RECOVERY OF TAX    21

PART H: CORPORATE EVENTS

   22

28

   INTERNAL REORGANISATION – AWARDS    22

29

   DEMERGER    22

30

   COMPULSORY ACQUISITION, RECONSTRUCTION AND WINDING-UP    23

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31

   CHANGE OF CONTROL    24

32

   DEEMED VESTING ON A CORPORATE EVENT    24

PART I: AMENDMENTS

   25

33

   VARIATION OF SHARE CAPITAL    25

34

   ALTERATION OF THE PLAN    25

PART J: MISCELLANEOUS

   26

35

   ISSUE OF NEW SHARES    26

36

   SERVICE OF DOCUMENTS    26

37

   STAMP DUTY    27

38

   JURISDICTION    27

39

   PURCHASES BY TRUSTEE    27

40

   THIRD PARTY RIGHTS    27

41

   SECTION 409A    27

SCHEDULE 1

   28

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THE RULES OF

THE MISYS OMNIBUS SHARE PLAN

PART A: INTERPRETATION AND ADMINISTRATION

 

1. DEFINITIONS

 

1.1 In this Plan the following words and expressions shall have the meanings
given below:-

 

“Acquiring Company”

   a company which has acquired Control of the Company

“Announcement”

   the announcement to the London Stock Exchange of the results of the Company
for any period

“Associated Company”

   any company which, in relation to the Company, is an associated company as
that term is defined in section 416 of the Taxes Act but with the omission of
the words “or at any other time within one year previously”

“Auditors”

   the auditors for the time being of the Company

“Award”

   a right to acquire Shares subject to the terms and conditions of this Plan.
An “Award” shall include an award of Performance Shares, Share Options or
Matching Shares as the context admits

“Award Certificate”

   a certificate evidencing an Award

“Award Date”

   in relation to an Award, the date on which that Award is made

“Awardholder”

   a person to whom an Award has been made or, if that person has died and where
the context requires, his Personal Representatives

“Awardholder’s Employer”

   such member of the Group as is the Awardholder’s employer or, if he has
ceased to be employed within the Group, was his employer or such other member of
the Group, or other person as, under the PAYE Regulations or, as the case may
be, the N.I. Regulations, or any other statutory or regulatory enactment
(whether in the United Kingdom or otherwise) is obliged to account for any Award
Tax Liability

“Award Shares”

   the Shares over which an Award subsists

“Award Tax Liability”

   in relation to an Awardholder, any liability of the Awardholder’s Employer to
account to H.M. Revenue & Customs, the United States Internal Revenue Service,
or any other tax authority for any amount of, or representing, income tax, NICs
or social security contributions (which shall, to the extent provided for in
Rule 13, include Employer’s NICs) or any other tax charge, levy or other sum
(whether under the laws of the UK, the USA or otherwise) which may arise on the
grant, vesting, exercise, assignment or release of an Award or the acquisition
of Shares or of any interest in Shares under this Plan

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“Committee”

  

means either:

 

(a)      in respect of executive directors, executive vice presidents and
members of the leadership group, the Remuneration Committee; or

 

(b)      in respect of all other Eligible Employees, the Directors or such
persons to whom they delegate authority in respect of the Plan

“Company”

   Misys plc (registered in England no 1360027)

“Contingent Share Award”

   a conditional award in respect of Shares subject to Part D

“Control”

   has the meaning given in section 840 of the Taxes Act

“Corporate Nominee”

   the person in whose name Shares are registered under a Corporate Nominee
Facility

“Corporate Nominee Facility”

   an arrangement sponsored by the Company under which Shares owned by an
individual who is an employee or former employee of a member of the Group are
held in the name of a corporate nominee on behalf of such individual

“Daily Official List”

   the Daily Official List of the London Stock Exchange

“Dealing Day”

   a day on which the London Stock Exchange is open for business

“Deferred Shares”

   awards made under MSEBP in relation to part of annual bonus outcome that is
deferred and will be received either in the form of cash, Shares or shares in
Subsidiary that is separately listed on a stock exchange

“Directors”

   the board of directors of the Company or a duly authorised committee of the
directors

“Eligible Employee”

   an employee of any member of the Group including an executive director of the
Company

“Employer’s NICs”

   secondary Class 1 NICs for which the Awardholder’s Employer is liable to
account

“Exchange of Awards”

  

the grant, to the Awardholder, in consideration of the cancellation of an Award,
of rights to acquire shares in an Acquiring Company, or a company which has
Control of an Acquiring Company or either is, or has Control of, a company which
is a member of a consortium owning either an Acquiring Company or a company
having Control of an Acquiring Company, being rights which are:-

 

(a)      in the opinion of the Committee, substantially equivalent in value to
the value of such Award; and

 

(b)      on terms approved by the Directors

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“Exercise Price”    the price per Share payable upon the exercise of a Share
Option (as determined in accordance with Rule 23.4) “Form of Acceptance”    in
relation to an Award, a form completed by the Awardholder, under which the
Awardholder notifies the Grantor of his acceptance of such Award and his
agreement to be bound by the Rules of this Plan and which is in such form as the
Grantor may specify when the Award is made “Grantor”    in relation to an Award,
the Company or such other person as has made that Award “Group”    the Company
and any company which is for the time being a Subsidiary “ITEPA”    the Income
Tax (Earnings and Pensions) Act 2003 “Leaving”    the Awardholder ceasing to
hold office or employment within the Group or being treated to have ceased to
hold such office or employment in accordance with Rule 2.6, and “Leaves” shall
be construed consistently “Leaving Date”    the date on which an Awardholder
Leaves “London Stock Exchange”    London Stock Exchange plc “Market Value”    in
relation to any Share on any day, means the closing middle market quotation of a
Share as derived from the Daily Official List for the Dealing Day immediately
preceding that day (or such other market value as determined by the Committee in
a reasonable method using quoted market prices) “Matching Shares”    an award in
respect of Shares that is in the form of either a Nil-Cost Option Award or a
Contingent Share Award as determined by the Committee at the Award Date and
which is granted to match awards of Deferred Shares made under MSEBP
“Model Code”    the code adopted by the Company which contains provisions
similar in purpose and effect to the provisions of the Model Code on directors’
dealings in securities issued by the UK Listing Authority from time to time
“MSEBP”    the Misys Senior Executive Bonus Plan or such other annual bonus plan
applicable to senior executives as is operated by the Company from time-to-time
“NICs”    in the UK, National Insurance Contributions or, in any other
jurisdiction, social security contributions (or other similar taxes) “NIC Award
Income”    a gain realised upon the exercise of, or the acquisition of, Shares
in pursuance of a Nil-Cost Option Award or a Share Option, being a gain that is
treated as remuneration derived from the Awardholder’s employment by virtue of
Section 4(4)(a) of the SSCBA

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“Nil-Cost Option Award”    a right to acquire Shares granted pursuant to and
exercisable in accordance with Part C “N.I. Regulations”    the laws,
regulations and practices currently in force relating to liability for and the
collection of NICs “Ordinary Share Capital”    the issued ordinary share capital
of the Company other than fixed-rate preference shares “PAYE Regulations”    the
regulations made under section 684 of ITEPA “Performance Condition”    a
condition (or conditions) relating to performance, measured over a given period,
of the Company or, as appropriate, of a Subsidiary or division or of the
individual Awardholder as specified pursuant to Rule 26 “Performance Period”   
the period over which performance is to be measured for the purposes of
determining whether and to what extent a Performance Condition is met
“Performance Shares”    an award in respect of Shares that is in the form of
either a Nil-Cost Option Award or a Contingent Share Award as determined by the
Committee at the Award Date “Personal Data”    the name, home address and
telephone number of an Awardholder, date of birth, National Insurance number or
equivalent, details of all rights to acquire Shares or other securities granted
to such Awardholder and of Shares or other securities issued or transferred to
such Awardholder pursuant to this Plan and any other personal information which
could identify the Awardholder and is necessary for the administration of this
Plan “Personal Representatives”    in relation to an Awardholder, the legal
personal representatives of the Awardholder (being the executors of his will or,
if he dies intestate, the duly appointed administrator(s) of his estate or, in
either case, the equivalent under applicable local law) who have produced to the
Company evidence of their appointment as such “Remuneration Committee”    the
Remuneration Committee of the Directors or such other committee comprising a
majority of non-executive directors of the Company to which the Directors
delegate responsibility for overseeing the operation of this Plan or following a
change of Control of the Company, those persons who comprised the Remuneration
Committee or such other committee of the Directors immediately before such
change of Control; “this Plan”    The Misys Omnibus Share Plan as set out in
these rules and amended from time to time pursuant to Rule 34 “SSCBA”    The
Social Security Contributions and Benefits Act 1992 “Shares”    fully-paid
ordinary shares in the capital of the Company (or, in the event of a
reorganisation or reconstruction of the Company, shares representing such
ordinary shares)

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“Share Option”    a right to acquire Shares granted pursuant to and exercisable
in accordance with Part E “Subsidiary”    any company which is for the time
being a subsidiary (as defined in section 736 of the Companies Act 1985) of the
Company “Taxes Act”    the Income and Corporation Taxes Act 1988 “Trustee”   
the trustee or trustees of any settlement created by the Company or any other
member of the Group for the benefit of employees and former employees of members
of the Group “UK”    United Kingdom “UK Listing Authority”    the Financial
Services Authority in its capacity as the competent authority for the purposes
of Part VI of the Financial Services and Markets Act 2000 “Vesting Date”   

means either:-

 

(a)    in respect of Performance Shares or Share Options, the third anniversary
of the Award Date; or

 

(b)    in respect of Matching Shares:-

 

(i)     the first anniversary of the Award Date in relation to 50% of the Award
Shares; and

 

(ii)    the second anniversary of the Award Date in relation to a further 50% of
the Award Shares

 

or such other date or dates as specified by the Committee at the Award Date

“Vesting Period”    in respect of any Award Shares the period commencing on the
Award Date and ending on the Vesting Date applicable to those Award Shares
“Vested Shares”   

Award Shares which an Awardholder has become entitled to acquire in consequence
of:-

 

(a)    the passing of a Vesting Date and the Performance Condition relevant to
that Award being met to any extent prior to that Vesting Date;

 

(b)    if earlier, the operation of Rules 19, 22 or 25 (Leaving); or

 

(c)    Award Shares being deemed to have become Vested Shares due to the
application of Rules 29, 30 or 31 (Corporate Events)

 

PROVIDED THAT no Award Shares granted pursuant to a Contingent Share Award shall
first become Vested

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   Shares at a time when the Company is in a prohibited period or a black out
period pursuant to the Model Code and such Award Shares shall first become
Vested Shares on such date as shall be determined by the Committee to be the
earliest date on which the Company is not in such a prohibited period or a black
out period. “Voluntary Resignation”    the Awardholder giving notice to
terminate his employment in circumstances other than as set out in Schedule 1 to
the Plan (IRS approved list of circumstances similar to UK circumstances of
“constructive dismissal” by the Company)

 

1.2 Words and phrases not otherwise defined shall have the meanings they bear
for the purposes of Part 7 of ITEPA.

 

2. INTERPRETATION

 

2.1 Any reference to any enactment includes a reference to that enactment as
from time to time modified extended or re-enacted.

 

2.2 Words denoting the masculine gender shall include the feminine.

 

2.3 Words denoting the singular shall include the plural and vice versa.

 

2.4 No account should be taken of the Rule headings which have been inserted for
ease of reference only.

 

2.5 References to Shares in respect of which an Award subsists at any time are
to be read and construed as references to the Shares over which the Award is
then held (and in respect of which it has not then lapsed).

Time of Leaving

 

2.6 An Awardholder shall be treated for the purposes of this Plan as ceasing to
hold office or employment within the Group when he no longer holds any office or
employment with any member of the Group or any Associated Company, or if the
Committee so determines, he shall be so treated on an earlier date when he gives
or receives notice to terminate his office or employment with any member of the
Group or any Associated Company, or is dismissed without notice (including by
way of summary dismissal) from any such office or employment.

Resolution of disputes

 

2.7 If any question, dispute or disagreement arises as to the interpretation of
this Plan or of any rules, regulations or procedures relating to it or as to any
question or right arising from or related to this Plan, the decision of the
Committee shall (except as regards any matter required to be determined by the
Auditors) be final and binding upon all persons.

 

3. ADMINISTRATION

 

3.1 The Remuneration Committee shall be responsible for setting the overall
policy and principles relating to this Plan.

 

3.2 The Directors may from time to time make and vary such rules and regulations
not inconsistent with the Rules of this Plan and establish such procedures for
its administration and implementation as they think fit.

 

3.3 In any matter in which they are required to act in connection with this
Plan, the Auditors shall be deemed to be acting as experts and not as
arbitrators and the Arbitration Act 1996 shall not apply.

 

3.4 The Company shall bear the costs of the administration and implementation of
this Plan.

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4. RIGHTS ATTACHING TO SHARES

 

4.1 The issue or transfer of any Shares under or for the purposes of this Plan
shall be subject to the Company’s Memorandum and Articles of Association, to any
necessary consents of any governmental or other authorities (whether in the UK
or otherwise) under any enactments or regulations from time to time in force and
to any restrictions on re-sales of Shares pursuant to applicable securities laws
or other laws.

 

4.2 The Awardholder shall comply with any requirements to be fulfilled in order
to obtain or obviate the necessity of any such consent.

 

4.3 All Shares issued or transferred under this Plan shall rank equally in all
respects with the Shares then in issue, except for any rights attaching to such
Shares by reference to a record date prior to the date of such allotment or
transfer.

PART B: MAKING OF AWARDS

 

5. ELIGIBILITY

 

5.1 An Award may only be made to an Eligible Employee.

 

5.2 An Award of Matching Shares may only be made to an Eligible Employee who has
participated in MSEBP for the preceding financial year of the Company and been
awarded a bonus, part of which is in the form of an award of Deferred Shares.

 

5.3 An Award shall not be made by any person other than the Company without the
prior approval of the Committee.

 

6. MAKING OF AWARDS

 

6.1 An Award shall be in the form of either:-

 

  6.1.1 Performance Shares;

 

  6.1.2 Share Options; or

 

  6.1.3 Matching Shares.

 

6.2 Performance Shares or Matching Shares may be granted as either a Nil-Cost
Option Award or a Contingent Share Award.

 

6.3 Awards shall be made by the Grantor executing a deed.

 

6.4 When an Award is made, the following shall be specified:-

 

  6.4.1 the number of Award Shares granted either as Performance Shares, Share
Options or Matching Shares;

 

  6.4.2 the Performance Condition applicable to that Award (or where the Award
is an Award of Matching Shares, the Performance Condition applicable to that
part of the Award capable vesting at the first anniversary of the Award Date);
and

 

  6.4.3 the Vesting Date(s) applicable to that Award.

 

7. TIMING OF AWARDS

 

7.1 An Award may only be made in the following periods:-

 

  7.1.1 within 42 days beginning with approval of the Plan by the Company’s
shareholders;

 

  7.1.2 within 42 days beginning with the Dealing Day following an Announcement;

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  7.1.3 within 28 days immediately after the person to whom the Award is made
first becomes an Eligible Employee; or

 

  7.1.4 subject to the Model Code, at any other time but only if, in the opinion
of the Committee, the circumstances are exceptional.

 

7.2 If the Grantor is restricted by statute, order or regulation (including any
regulation, order or requirement imposed on the Company by the London Stock
Exchange or any other regulatory authority) from making an Award within the
period as mentioned in Rule 7.1 the Grantor may make an Award within the period
of 42 days after all such restrictions are removed.

 

7.3 No Award may be made in breach of the Model Code.

 

7.4 No Award may be made after 30 September 2018.

 

8. INDIVIDUAL LIMITS – PERFORMANCE SHARES AND SHARE OPTIONS

 

8.1 Subject to Rules 8.2 to 8.4 below, the aggregate value of Shares in respect
of which Awards of Performance Shares may be made to an Eligible Employee in any
financial year of the Company shall not be greater than 150 per cent of the
Eligible Employee’s base salary.

 

8.2 In any financial year of the Company in which an Eligible Employee receives
a grant of both Share Options and Performance Shares, the combined value of such
grants will not exceed the maximum limit for Performance Shares as set out in
Rule 8.1 above PROVIDED THAT for the purposes of this Rule 8.2 only, the
Remuneration Committee may apply such reasonable ratio as it may choose to
equate a number of Share Options to one Performance Share.

 

8.3 In any financial year of the Company in which an Eligible Employee receives
a grant of only Share Options, the value of such grant will not exceed the
maximum limit for Performance Shares as set out in Rule 8.1 above but the value
of the Share Options will be determined on the basis described in the proviso to
Rule 8.2 above.

 

8.4 The Remuneration Committee may in exceptional circumstances make Awards in
any financial year of the Company beyond the limits stated in Rules 8.1 to 8.3
above PROVIDED THAT the above limits will apply on the basis of the maximum
award of Performance Shares being 250 per cent of the Eligible Employee’s base
salary.

 

8.5 For the purposes of this Rule 8 only, the “value” of Shares may be
calculated using the Market Value of Shares at either the Award Date or the date
on which an individual commences employment and becomes an Eligible Employee.

 

9. INDIVIDUAL LIMITS – MATCHING SHARES

 

9.1 The aggregate number of Shares in respect of which an Award of Matching
Shares may be made to an Eligible Employee in any financial year of the Company
shall not exceed such number of Shares as has a value equivalent to the value of
an award of Deferred Shares made to the Eligible Employee under MSEBP in respect
of the Eligible Employee’s annual bonus for the preceding financial year.

 

9.2 For the purposes of this Rule 9 only:-

 

  9.2.1 the “value” of an award of Deferred Shares will be the Eligible
Employee’s equivalent cash amount under MSEBP that is awarded under MSEBP as
Deferred Shares;

 

  9.2.2 the “value” of Shares will be the Market Value of Shares at the Award
Date.

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10. AWARD CERTIFICATE

 

10.1 As soon as practicable after an Award has been made the Company shall
procure the issue to the Awardholder of an Award Certificate (which may be by
e-mail) which specifies:-

 

  10.1.1 whether the Award is granted as an Award of Performance Shares, Share
Options or Matching Shares;

 

  10.1.2 whether an Award of Performance Shares or Matching Shares is granted as
a Nil-Cost Option Award or a Contingent Share Award;

 

  10.1.3 the Grantor;

 

  10.1.4 the Award Date;

 

  10.1.5 the number of Award Shares;

 

  10.1.6 the Performance Condition set pursuant to Rule 26.1;

 

  10.1.7 in respect of Share Options, the Exercise Price;

 

  10.1.8 the Vesting Date(s) applicable to that Award; and

 

  10.1.9 that it is a condition of the Award that the Awardholder agrees to
indemnify the Grantor and the Awardholder’s Employer in respect of any Award Tax
Liability.

 

10.2 An Award Certificate in respect of Matching Shares may also contain
information in relation to related awards of Deferred Shares made under MSEBP.

 

11. ACCEPTANCE OF AN AWARD

 

11.1 The provisions of Rule 11.2 shall only apply in relation to an Award if the
Grantor determines that the Awardholder will be required to accept his Award.

 

11.2 If the Awardholder does not, within 30 days after the Award Date (or such
later time as the Grantor may notify to the Awardholder), deliver to the Grantor
a duly completed Form of Acceptance in relation to such Award, then at the end
of that period:-

 

  11.2.1 if the Award is a Nil-Cost Option Award or a Share Option, it shall
lapse and cease to be exercisable; and

 

  11.2.2 if the Award is a Contingent Share Award, the Awardholder shall not be
able to receive any Shares pursuant to that Award.

 

12. TAX INDEMNITY

It shall be a term and condition of every Award that the Awardholder indemnifies
the Grantor and the Awardholder’s Employer against any Award Tax Liability.

 

13. TRANSFER OF BURDEN OF EMPLOYER’S NICS

 

13.1 Where the Grantor specifies at the Award Date, it shall be a term and
condition of every Award that the Awardholder shall, if and when required by the
Grantor, agree with and undertake to the Company and, if different, the
Awardholder’s Employer that:-

 

  13.1.1 the Awardholder’s Employer may (if or insofar as it is lawful to do so)
recover from the Awardholder, the whole or any part of any Employer’s NICs
payable in respect of any NIC Award Income; and, if required to do so

 

  13.1.2 the Awardholder shall enter into a joint election with the
Awardholder’s Employer (in a form approved by H.M. Revenue & Customs under
paragraph 3B of Schedule 1 to the SSCBA) for the transfer to the Awardholder of
the whole, or such part as the Company may determine, of any liability of the
Awardholder’s Employer to Employer’s NICs on any NIC Award Income.

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14. DATA PROTECTION

 

14.1 It shall be a term and condition of every Award that an Awardholder agrees
and consents to:-

 

  14.1.1 the collection, use, processing and transfer of his Personal Data by
any member of the Group or any Associated Company and, if it is not the Company,
the Grantor and any third party trustee or administrator of the Plan and any
broker through whom Shares are to be sold on behalf of an Awardholder;

 

  14.1.2 members of the Group, any Associated Company and, if it is not the
Company, the Grantor, and any third party trustee or administrator of the Plan
and any broker through whom Shares are to be sold on behalf of an Awardholder
transferring the Awardholder’s Personal Data amongst themselves for the purposes
of implementing, administering and managing this Plan and the grant of Awards
and the acquisition of Shares pursuant to Awards;

 

  14.1.3 the use of Personal Data by any such person for any such purposes; and

 

  14.1.4 the transfer to and retention of Personal Data by third parties
including any third party trustee or administrator of the Plan (whether or not
any such third party is situated outside the European Economic Area) for or in
connection with such purposes.

 

15. RELATIONSHIP WITH CONTRACT OF EMPLOYMENT

 

15.1 The making of an Award shall not form part of the Awardholder’s entitlement
to remuneration or benefits pursuant to his contract of employment.

 

15.2 The existence of a contract of employment between any person and the
Company or any present or past Subsidiary or Associated Company, does not give
such person any right or entitlement to have an Award made to him in respect of
any number of Shares or any expectation that an Award might be made to him,
whether subject to any conditions or at all.

 

15.3 Neither the existence of this Plan nor the fact that an individual has on
any occasion been granted an Award shall give such individual any right,
entitlement or expectation that he has or will in future have any such right,
entitlement or expectation to participate in this Plan by being granted an Award
on any other occasion.

 

15.4 The rights and obligations of an Awardholder under the terms of his
contract of employment with the Company or any present or past Subsidiary or
Associated Company shall not be affected by the making of an Award or his
participation in this Plan.

 

15.5 The rights or opportunity granted to an Awardholder on the making of an
Award shall not give the Awardholder any rights or additional rights to
compensation or damages either in consequence of the loss or termination of his
office or employment with the Company or any present or past Subsidiary or
Associated Company for any reason whatsoever, or in consequence of the
Awardholder giving or receiving notice to terminate his office or employment
with the Company or any past or present Subsidiary or Associated Company for any
reason whatsoever (whether or not the termination (and/or the giving or
receiving of notice of termination) is ultimately held to be wrongful or
unfair).

 

15.6 An Awardholder shall not be entitled to any compensation or damages for any
loss or potential loss which he may suffer by reason of being unable to acquire
or retain Shares, or any interest in Shares pursuant to an Award either in
consequence of the loss or termination of his office or employment with the
Company or any present or past Subsidiary or Associated Company for any reason
whatsoever, or in consequence of the Awardholder giving or receiving notice to
terminate his office or employment with the Company or any past or present
Subsidiary or Associated Company for any reason whatsoever (whether or not the
termination (and/or the giving or receiving of notice of termination) is
ultimately held to be wrongful or unfair).

 

15.7 The making of an Award on any occasion is at the discretion of the
Committee. No entitlement to the grant of an Award and/or the issue or transfer
of Shares in the future shall thereby be created on the grounds that such Awards
were granted in the past nor on the grounds that Awards may previously have been
granted over a particular number of Shares. Even the repeated grant of Awards
and/or the issue or transfer of Shares shall not create future entitlements to
receive Awards and/or Shares at all, or to be granted Awards over a specific
number of Shares.

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16. NON-TRANSFERABILITY OF AWARDS

 

16.1 An Award is personal to an Awardholder and may not be transferred during
his lifetime.

 

16.2 If an Awardholder:-

 

  16.2.1 transfers or assigns, mortgages, charges or otherwise disposes of an
Award or of any interest in or right to acquire any Award Shares (other than to
his Personal Representatives); or

 

  16.2.2 is adjudged bankrupt or an interim order is made because he intends to
propose a voluntary arrangement to his creditors under the Insolvency Act 1986
(or any other provision of the laws of any jurisdiction outside the UK which is
intended to have similar effect or purpose); or

 

  16.2.3 makes or proposes any other plan or arrangement, in relation to his
debts, with his creditors or any section of them; or

 

  16.2.4 is otherwise deprived (except on death) of the legal or beneficial
ownership of an Award or of any interest in or right to acquire any Award
Shares, whether by operation of law or by doing or omitting to do anything which
causes him to be so deprived

the Awardholder shall immediately cease to have any right or entitlement to any
Award Shares which have not then become Vested Shares.

PART C: NIL-COST OPTION AWARDS

 

17. STRUCTURE OF A NIL-COST OPTION AWARD

 

17.1 The Grantor (acting with the consent of the Committee) may from time to
time grant to any Eligible Employee a Nil-Cost Option Award, being a right that
is an option to acquire such maximum number of Shares as the Grantor shall
specify and which is exercisable only subject to and in accordance with the
terms of Part C of this Plan.

 

17.2 The exercise of a Nil-Cost Option Award shall be subject to a Performance
Condition.

 

17.3 No amount shall be payable by the Awardholder for the acquisition of Shares
pursuant to a Nil-Cost Option Award.

 

17.4 An Eligible Employee who is subject to US Federal Income Tax may not be
granted a Nil-Cost Option Award and any purported grant of a Nil-Cost Option
Award to such an Eligible Employee shall take effect as a Contingent Share Award
in accordance with Part D of this Plan.

 

18. EXERCISE OF A NIL-COST OPTION AWARD

 

18.1 A Nil-Cost Option Award:-

 

  18.1.1 may only ever be exercised in respect of Vested Shares; and

 

  18.1.2 may not be exercised after the tenth anniversary of the Award Date, or
such earlier date as may be specified at the Award Date.

 

18.2 Except as otherwise provided in Rule 19 and Part H, a Nil-Cost Option Award
may not be exercised at any time unless the Awardholder then holds office or
employment with a member of the Group.

Exercise procedure

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18.3 A Nil-Cost Option Award shall be exercised only by the Awardholder serving
a notice on the Grantor (or otherwise as the Grantor may direct) which specifies
the number of Shares in respect of which such Nil-Cost Option Award is exercised
on that occasion which shall not exceed the number of Vested Shares in respect
of which such Nil-Cost Option Award subsists and which have not been specified
for this purpose in an earlier notice of exercise.

 

18.4 A Nil-Cost Option Award shall not be exercised on any occasion if such
exercise would not be in accordance with the Model Code.

Issue or Transfer of Shares

 

18.5 Subject to Rule 18.4 and Rule 27, within 30 days after the Grantor receives
a notice of exercise pursuant to Rule 18.3, the Grantor shall issue or transfer
or procure the issue or transfer to or to the order of the Awardholder of the
Shares in respect of which the Nil-Cost Option Award is duly exercised on that
occasion.

Transfer to a nominee

 

18.6 If the Awardholder requests, some or all of the Shares he acquires on the
exercise of a Nil-Cost Option Award may be issued or transferred to a nominee
account in the name of the Awardholder, provided that beneficial ownership of
the Shares vests in the Awardholder.

 

19. NIL-COST OPTION AWARDS - CESSATION OF EMPLOYMENT

Death, injury, disability etc

 

19.1 If an Awardholder Leaves for any reason, his Nil-Cost Option Award shall
lapse in accordance with Rule 19.2 unless the reason for Leaving is:-

 

  19.1.1 death;

 

  19.1.2 injury or disability (evidenced to the satisfaction of the Committee);

 

  19.1.3 dismissal by reason of redundancy (within the meaning of the Employment
Rights Act 1996);

 

  19.1.4 the fact that the office or employment by virtue of which he is
eligible to participate in this Plan relates to a business or part of a business
which is transferred to a person or company which is not a member of the Group;

 

  19.1.5 the fact that the company with which he holds the office or employment
by virtue of which he is eligible to participate in this Plan is no longer a
member of the Group; or

 

  19.1.6 any other circumstances at the discretion of the Committee

in which case the Awardholder (or, if he has died, his Personal Representatives)
may (subject to Rule 19.6 below) exercise a Nil-Cost Option Award granted to him
in accordance with Rules 19.3 to 19.5 below.

Leaving for other reasons

 

19.2 Where an Awardholder Leaves for reasons other than those set out in Rules
19.1.1 to 19.1.6 above, his Nil-Cost Option Award shall lapse and he shall cease
to have any right or entitlement to any Award Shares.

Vesting after Leaving

 

19.3 Where an Awardholder who holds a Nil-Cost Option Award Leaves in any of the
circumstances specified at Rules 19.1.1 to 19.1.6 above before the end of the
Vesting Period relevant to the Award Shares, the Awardholder may (subject to
Rule 19.4 below) exercise that Award either:-

 

  19.3.1 within the period of 12 months after the Vesting Date relevant to the
Award Shares but only in respect of a proportion (corresponding to such
proportion of the Vesting Period relevant to the Award Shares as fell before the
Leaving Date) of the Award Shares which become Vested Shares in consequence of
the Performance Condition being satisfied; or

--------------------------------------------------------------------------------

  19.3.2 if the Committee so determines and notifies the Awardholder within 3
months after the Awardholder Leaves, within the period of 12 months beginning
with the Leaving Date, but only in respect of a proportion, (corresponding to
such proportion of the Vesting Period relevant to the Award Shares as fell
before the Leaving Date), of such of the Award Shares which are then deemed to
be Vested Shares in consequence of the Committee making a determination pursuant
to Rule 26.6 (Deemed Vesting on Leaving).

 

19.4 The Committee may (if it so determines in its absolute discretion) permit
the Awardholder to exercise a Nil-Cost Option Award in respect of a proportion
of the Award Shares which is different to the proportion of Award Shares
determined by the application of either Rules 19.3.1 to 19.3.2 (as appropriate)
if the Committee determines that the vesting outcome achieved under the relevant
rule does not reflect the underlying financial performance of the Company.

 

19.5 Where an Awardholder who holds a Nil-Cost Option Award Leaves in any of the
circumstances specified in Rule 19.1.1 to 19.1.6 above after the end of the
Vesting Period relevant to the Award Shares, such Nil-Cost Option Award may be
exercised, within the period of 12 months beginning with the Leaving Date, in
respect of Award Shares which, immediately before the Leaving Date, were Vested
Shares.

Forfeiture of MSEBP Deferred Shares

 

19.6 In relation to an Award of Matching Shares, where the Awardholder Leaves
and pursuant to MSEBP he loses entitlements to receive some or all of the
Deferred Shares in respect of which the Matching Shares were granted, his
Matching Shares will lapse in respect of a number of Award Shares that
corresponds to the proportion of the Deferred Shares which have been forfeited.

PART D: CONTINGENT SHARE AWARDS

 

20. CONTINGENT SHARE AWARDS

 

20.1 The Grantor (acting with the consent of the Committee) may from time to
time grant an Eligible Employee a Contingent Share Award that is subject to the
terms of Part D of this Plan.

 

20.2 Where Shares subject to a Contingent Share Award become Vested Shares, the
Grantor will issue or transfer, or procure the issue or transfer of, such Vested
Shares to the Awardholder in accordance with this Part D.

 

20.3 Entitlement to an issue or transfer of Shares pursuant to a Contingent
Share Award shall be subject to a Performance Condition.

 

20.4 No amount shall be payable by the Awardholder for the acquisition of Shares
pursuant to a Contingent Share Award.

 

21. SATISFACTION OF CONTINGENT SHARE AWARDS

 

21.1 Subject to Rule 21.3, Rule 21.4 and Rule 27, as soon as practicable after a
Vesting Date the Grantor shall issue or transfer or procure the issue or
transfer of Vested Shares to or to the order of the Awardholder, and if the
Awardholder so requests, some or all of the Shares he acquires may be issued or
transferred to a nominee account in the name of the Awardholder, provided the
beneficial ownership of the Shares vests in the Awardholder.

 

21.2 Except as provided in Rule 22 and Part H, an Awardholder shall have no
right or entitlement to Award Shares unless the Awardholder then holds office or
employment with a member of the Group.

Effect of Restrictions upon Issue or Transfer of Vested Shares

 

21.3 If on any occasion the issue or transfer of any Vested Shares is restricted
by reason of the Model Code such Shares shall be issued or transferred as soon
as practicable after all such restrictions have been lifted.

--------------------------------------------------------------------------------

US Federal Income Tax

 

21.4 Any issue or transfer of Vested Shares pursuant to a Contingent Share Award
that has been granted to an Awardholder who is subject to US Federal Income tax
shall in all circumstances be made no later than 2.5 months following the later
of the end of the Company’s financial year or the end of the calendar year in
which the Award Shares first become Vested Shares.

 

22. CONTINGENT SHARE AWARDS – CESSATION OF EMPLOYMENT

Death, injury, disability, etc

 

22.1 If an Awardholder Leaves for any reason, his Contingent Share Award shall
lapse in accordance with Rule 22.2 unless the reason for Leaving is:-

 

  22.1.1 death;

 

  22.1.2 injury or disability (evidenced to the satisfaction of the Committee);

 

  22.1.3 dismissal by reason of redundancy (within the meaning of the Employment
Rights Act 1996);

 

  22.1.4 the fact that the office or employment by virtue of which he is
eligible to participate in this Plan relates to a business or part of a business
which is transferred to a person or company which is not a member of the Group;

 

  22.1.5 the fact that the company with which he holds the office or employment
by virtue of which he is eligible to participate in this Plan is no longer a
member of the Group; or

 

  22.1.6 any other circumstances at the discretion of the Committee

in which case the Grantor shall (subject to Rule 22.6 below) as soon as
practicable after the Leaving Date issue or transfer, or procure the issue or
transfer to the Awardholder (or, if he has died, his Personal Representatives)
of Award Shares in accordance with Rules 22.3 to 22.5 below.

PROVIDED THAT for an Awardholder who is subject to US Federal Income Tax, the
Committee may not use its discretion at Rule 22.1.6 above if the reason for the
Awardholder Leaving is Voluntary Resignation.

Leaving for other reasons

 

22.2 Where an Awardholder Leaves for reasons other than those set out in Rules
22.1.1 to 22.1.6 above, his Award shall lapse and he shall cease to have any
right or entitlement to any Award Shares.

Vesting after Leaving

 

22.3 Where an Awardholder who holds a Contingent Share Award Leaves in any of
the circumstances specified at Rules 22.1.1, to 22.1.6 above before the end of
the Vesting Period relevant to the Award Shares, the Grantor may (subject to
Rule 21.4 above and Rule 22.4 below) either:-

 

  22.3.1 as soon as reasonably practicable after the Vesting Date relevant to
the Award Shares, issue or transfer or procure the issue or transfer to, or to
the order of, the Awardholder of a proportion (corresponding to such proportion
of the Vesting Period relevant to the Award Shares as fell before the Leaving
Date) of the Award Shares which become Vested Award Shares in consequence of the
Performance Condition being satisfied; or

 

  22.3.2 if the Committee so determines, as soon as reasonably practicable after
the Leaving Date, issue or transfer or procure the issue or transfer to, or to
the order of, the Awardholder of a proportion (corresponding to such proportion
of the Vesting Period relevant to the Award Shares as fell before the Leaving
Date) of such of the Award Shares which are then deemed to be Vested Shares in
consequence of the Committee making a determination pursuant to Rule 26.6
(Deemed Vesting on Leaving)

--------------------------------------------------------------------------------

22.4 The Committee may (if it so determines in its absolute discretion) issue or
transfer to or procure the issue or transfer to the Awardholder of a proportion
of the Award Shares which is different to the proportion of Award Shares
determined by the application of Rules 22.3.1 and 22.3.2 (as appropriate) if the
Committee determines that the vesting outcome achieved under the relevant rule
does not reflect the underlying financial performance of the Company.

 

22.5 Where an Awardholder Leaves after the end of the Vesting Period applicable
to an Award in any of the circumstances specified in Rules 22.1.1, to 22.1.6
above, the Grantor shall as soon as reasonably practicable after the Leaving
Date, issue or transfer or procure the issue or transfer to, or to the order of,
the Awardholder of such of the Award Shares as, immediately before the Leaving
Date, were Vested Shares.

Forfeiture of MSEBP Deferred Shares

 

22.6 In relation to an Award of Matching Shares, where the Awardholder Leaves
and pursuant to MSEBP he loses entitlements to receive some or all of the
Deferred Shares in respect of which the Matching Shares were granted, his
Matching Shares will lapse in respect of a number of Award Shares that
corresponds to the proportion of the Deferred Shares which have been forfeited.

PART E: SHARE OPTIONS

 

23. STRUCTURE OF A SHARE OPTION

 

23.1 The Grantor (acting with the consent of the Committee) may from time to
time grant to any Eligible Employee a Share Option, being a right that is an
option to acquire such maximum number of Shares as the Grantor shall specify and
which is exercisable only subject to and in accordance with the terms of Part E
of this Plan.

 

23.2 The exercise of a Share Option shall be subject to a Performance Condition.

 

23.3 Subject to Rule 24.6, in relation to each Share to be acquired pursuant to
a Share Option, the Awardholder must pay the Exercise Price.

 

23.4 The Exercise Price shall be the Market Value of a Share as at the Award
Date.

 

24. EXERCISE OF A SHARE OPTION

 

24.1 A Share Option:-

 

  24.1.1 may only ever be exercised in respect of Vested Shares; and

 

  24.1.2 may not be exercised after the tenth anniversary of the Award Date, or
such earlier date as may be specified at the Award Date.

 

24.2 Except as otherwise provided in Rule 25 and Part H, a Share Option may not
be exercised at any time unless the Awardholder then holds office or employment
with a member of the Group.

Exercise procedure

 

24.3 A Share Option shall be exercised only by the Awardholder serving a notice
on the Grantor (or otherwise as the Grantor may direct) which:-

 

  24.3.1 specifies the number of Shares in respect of which such Share Option is
exercised on that occasion which shall not exceed the number of Vested Shares in
respect of which such Share Option subsists and which have not been specified
for this purpose in an earlier notice of exercise; and

 

  24.3.2 subject to Rule 24.6, is accompanied by payment of the Exercise Price
for that number of Shares (in such form and manner as determined by the
Grantor).

 

24.4 A Share Option shall not be exercised on any occasion if such exercise
would not be in accordance with the Model Code.

--------------------------------------------------------------------------------

Issue or Transfer of Shares

 

24.5 Subject to Rule 24.4, Rule 24.6 and Rule 27, within 30 days after the
Grantor receives a notice of exercise pursuant to Rule 24.3, the Grantor shall
issue or transfer or procure the issue or transfer to or to the order of the
Awardholder of the Shares in respect of which the Share Option is duly exercised
on that occasion.

 

24.6 Subject to Rule 24.4 and Rule 27, when a Share Option is exercised, the
Grantor shall have the right to issue or transfer to the Awardholder, or procure
the issue or transfer to the Awardholder, of a number of Shares (X) determined
as:-

 

X

   =    Y x (CMV – EP)               CMV

 

where:-    CMV    is the market value of a Share (determined in accordance with
Part VIII of the Taxation of Chargeable Gains Act 1992) on the date on which the
Awardholder exercises his Share Option    EP    is the Exercise Price per Share
payable upon the exercise of a Share Option    Y    is the number of Shares in
respect of which the Share Option is exercised on that occasion

and if on any occasion the Grantor wishes to exercise this right it shall:-

 

  (a) return to the Awardholder the amount paid as mentioned in Rule 24.3.2; and

 

  (b) issue or transfer or procure the issue or transfer of such number of
Shares within the period of 30 days beginning with the date on which the Grantor
received the notice of exercise on that occasion

and the Awardholder shall accept such issue or transfer in full satisfaction of
the Awardholder’s right to acquire shares in consequence of the exercise of the
Share Option on that occasion.

Transfer to a nominee

 

24.7 If the Awardholder requests, some or all of the Shares he acquires on the
exercise of a Share Option may be issued or transferred to a nominee account in
the name of the Awardholder, provided that beneficial ownership of the Shares
vests in the Awardholder.

 

25. SHARE OPTIONS - CESSATION OF EMPLOYMENT

Death, injury, disability etc

 

25.1 If an Awardholder Leaves for any reason, his Share Option shall lapse in
accordance with Rule 25.2 unless the reason for Leaving is:-

 

  25.1.1 death;

 

  25.1.2 injury or disability (evidenced to the satisfaction of the Committee);

 

  25.1.3 dismissal by reason of redundancy (within the meaning of the Employment
Rights Act 1996);

 

  25.1.4 the fact that the office or employment by virtue of which he is
eligible to participate in this Plan relates to a business or part of a business
which is transferred to a person or company which is not a member of the Group;

--------------------------------------------------------------------------------

  25.1.5 the fact that the company with which he holds the office or employment
by virtue of which he is eligible to participate in this Plan is no longer a
member of the Group; or

 

  25.1.6 any other circumstances at the discretion of the Committee

in which case the Awardholder (or, if he has died, his Personal Representatives)
may exercise a Share Option granted to him in accordance with Rules 25.3 to 25.5
below.

Leaving for other reasons

 

25.2 Where an Awardholder Leaves for reasons other than those set out in Rules
25.1.1 to 25.1.6 above, his Share Option shall lapse and he shall cease to have
any right or entitlement to any Award Shares.

Vesting after Leaving

 

25.3 Where an Awardholder who holds a Share Option Leaves in any of the
circumstances specified at Rules 25.1.1 to 25.1.6 above before the end of the
Vesting Period relevant to the Award Shares, the Awardholder may (subject to
Rule 25.4 below) exercise that Award either:-

 

  25.3.1 within the period of 12 months after the Vesting Date relevant to the
Award Shares but only in respect of a proportion (corresponding to such
proportion of the Vesting Period relevant to the Award Shares as fell before the
Leaving Date) of the Award Shares which become Vested Shares in consequence of
the Performance Condition being satisfied; or

 

  25.3.2 if the Committee so determines and notifies the Awardholder within 3
months after the Awardholder Leaves, within the period of 12 months beginning
with the Leaving Date, but only in respect of a proportion, (corresponding to
such proportion of the Vesting Period relevant to the Award Shares as fell
before the Leaving Date), of such of the Award Shares which are then deemed to
be Vested Shares in consequence of the Committee making a determination pursuant
to Rule 26.6 (Deemed Vesting on Leaving).

 

25.4 The Committee may (if it so determines in its absolute discretion) permit
the Awardholder to exercise a Share Option Award in respect of a proportion of
the Award Shares which is different to the proportion of Award Shares determined
by the application of either Rules 25.3.1 to 25.3.2 (as appropriate) if the
Committee determines that the vesting outcome achieved under the relevant rule
does not reflect the underlying financial performance of the Company.

 

25.5 Where an Awardholder who holds a Share Option Leaves in any of the
circumstances specified in Rules 25.1.1 to 25.1.6 above after the end of the
Vesting Period relevant to the Award Shares, such Share Option may be exercised,
within the period of 12 months beginning with the Leaving Date, in respect of
Award Shares which, immediately before the Leaving Date, were Vested Shares.

PART F: PERFORMANCE CONDITIONS

 

26. PERFORMANCE CONDITIONS

 

26.1 The Committee shall:-

 

  26.1.1 determine the Performance Condition applicable to an Award of
Performance Shares or Share Options before that Award is granted; and

 

  26.1.2 in relation to an Award of Matching Shares, determine the Performance
Condition for 50% of the Award Shares before that Award is granted and determine
the Performance Condition for the remaining 50% of the Award Shares proximate to
the first anniversary of the Award Date.

 

26.2 A Performance Condition may provide that a given number or proportion of
Award Shares shall become Vested Shares according to whether, and the extent to
which, different levels of performance are achieved or exceeded.

--------------------------------------------------------------------------------

26.3 After an Award has been granted the Committee may (with the consent of the
Grantor, where appropriate), in appropriate circumstances, amend the Performance
Condition if an event has occurred or events have occurred in consequence of
which the Committee reasonably considers that the existing Performance Condition
should be so amended, provided that the Committee considers the varied
conditions are fair and reasonable and not materially less difficult to satisfy
than the original condition would have been but for the event or events in
question.

 

26.4 The number of Shares in respect of which Award Shares shall become Vested
Shares on any occasion shall be rounded up to the nearest whole number of
Shares.

Deemed Vesting upon a Corporate Event

 

26.5 If, before the end of the Vesting Period, circumstances arise as mentioned
in Rules 29 (“Demerger”), 30 (“Compulsory Acquisition, etc”) or 31 (“Change of
Control”) the Remuneration Committee shall (subject to Rule 26.10 below)
determine whether and to what extent any Performance Condition shall then be
deemed to be satisfied having regard to the progress towards meeting any
applicable Performance Condition.

Deemed Vesting upon Leaving

 

26.6 If an Awardholder Leaves before the end of the Vesting Period, the
Committee may (subject to Rule 26.10 below) determine whether and to what extent
any Performance Condition shall then be deemed to be satisfied having regard to
the progress towards meeting any applicable Performance Condition.

Determination by the Committee

 

26.7 The questions of:-

 

  26.7.1   whether and to what extent a Performance Condition is or is deemed to
be satisfied; and

 

  26.7.2   the number or proportion of Award Shares which become Vested Shares

  shall be for the determination of the Committee whose decision shall be final
and binding.

 

26.8 In making any such determination, the Committee shall be entitled to make
such adjustments as may, in their opinion, be appropriate to take account of the
underlying financial performance of the Company over the Performance Period (or
that part of the Performance Period as has then elapsed).

 

26.9 The Company shall, as soon as practicable, notify an Awardholder of the
fact that a Performance Condition has been satisfied in whole or in part.

 

26.10 Where the Committee (or Remuneration Committee as applicable) is required
to make a determination in accordance with Rule 26.5 (Corporate Events) or Rule
26.6 (leaving) above in relation to a portion of an Award of Matching Shares for
which no Performance Conditions have yet been determined, the Committee (or
Remuneration Committee) shall apply the Performance Condition specified in
respect of the other part of that Award of Matching Shares for the purposes of
Rules 26.5 or 26.6.

PART G: RECOVERY OF TAX

 

27. RECOVERY OF TAX

 

27.1 If on any occasion an Award Tax Liability arises in relation to or in
consequence of anything done pursuant to this Plan, then unless:-

 

  27.1.1 the Awardholder has previously made arrangements, satisfactory to the
Company, for payment of his Award Tax Liability; or

--------------------------------------------------------------------------------

  27.1.2 the Awardholder has authorised the Grantor, to the extent necessary to
reimburse the Grantor or Awardholder’s Employer, to sell as agent for the
Awardholder (at the best price which can reasonably be expected to be obtained
at the time of sale) a sufficient number of Vested Shares, and to procure
payment to the Awardholder’s Employer out of the net proceeds of sale of such
Shares (after deduction of all fees, commissions and expenses incurred in
relation to such sale) of monies sufficient to satisfy the indemnity mentioned
in Rule 12

the Grantor shall, to the extent necessary to reimburse the Grantor or the
Awardholder’s Employer, have the right to sell as agent for the Awardholder (as
mentioned in Rule 27.1.2) a sufficient number of the Vested Shares, and to
procure payment to the Awardholder’s Employer, out of the net proceeds of sale
of such Shares (after deduction of all fees, commissions and expenses incurred
in relation to such sale) of monies sufficient to satisfy the indemnity
mentioned in Rule 12 and/or the Awardholder’s Employer shall have the right to
deduct the requisite amount from the Awardholder’s salary.

PART H: CORPORATE EVENTS

 

28. INTERNAL REORGANISATION – AWARDS

 

28.1 If:-

 

  28.1.1 in consequence of a demerger, reorganisation, reconstruction or
amalgamation, the Company will come under the Control of another company, or the
business of the Company will then be carried on by another company and, in
either case, substantially all of the persons who owned the Ordinary Share
Capital immediately before such change of Control will immediately thereafter
continue to have Control of the Company and will then own more than 50 per cent
of the issued ordinary share capital of such other company (other than
fixed-rate preference shares); and

 

  28.1.2 holders of Awards are each invited to accept an Exchange of Awards

then (if the Remuneration Committee so determines):-

 

  (a) the provisions of Rules 29, 30 and 31 may not apply; and

 

  (b) the Awards shall lapse and cease to be exercisable at the end of the
period of 21 days beginning with the date on which such invitation is made or,
if later, the end of the period in which the Awardholder may accept such
invitation.

 

28.2 The following provisions of Rules 29, 30 and 31 shall have effect subject
to this Rule 28.

 

29. DEMERGER

 

29.1 If:-

 

  29.1.1 notice is given to shareholders of the Company of a proposed demerger
of the Company or of any Subsidiary; and

 

  29.1.2 the Remuneration Committee is of the opinion that the interests of
Awardholders would or might be substantially prejudiced by the proposed demerger

the Grantor (acting with the consent of the Remuneration Committee) may, as soon
as practicable after the giving of the notice referred to in Rule 29.1.1:-

 

  29.1.3 (subject to Rule 18.1.2 and Rule 24.1.2) notify Awardholders that
Nil-Cost Option Awards or Share Options may then be exercised, within one month
(or such longer period as may be specified in such notice), in respect of such
of the Award Shares (if any) which are then Vested Shares or which are then
deemed to become Vested Shares in accordance with Rule 32 below; and

 

  29.1.4 (subject to Rule 29.3 and Rule 29.4 below) issue or transfer or procure
the issue or transfer to Awardholders of Award Shares under Contingent Share
Awards which are then Vested Shares or which are then deemed to become Vested
Shares in accordance with Rule 32 below.

--------------------------------------------------------------------------------

29.2 Any Nil-Cost Option Awards or Share Options that are subject to this Rule
29 shall lapse and cease to be exercisable upon the expiry of the period
mentioned in Rule 29.1.3 above.

 

29.3 If any issue or transfer of Award Shares under Contingent Share Awards
pursuant to Rule 29.1 above would result in any adverse tax consequences for an
Awardholder (whether under Section 409A of the US Federal Internal Revenue Code
1986 or otherwise), such issue or transfer shall instead be made as soon as
reasonably practicable after the time (determined by the Committee) to be the
earliest time at which such issue or transfer of Award Shares will not result in
adverse tax consequences.

 

29.4 If an Awardholder is subject to US Federal Income Tax, Award Shares may not
be delivered to the Awardholder under Contingent Share Awards pursuant to Rule
29.1 more than 2.5 months after the later of the end of the financial year of
the Company or the end of the calendar year in which the demerger occurs.

 

30. COMPULSORY ACQUISITION, RECONSTRUCTION AND WINDING-UP

 

30.1 If:-

 

  30.1.1 any person becomes bound or entitled to acquire Shares in the Company
under sections 974 – 991 of the Companies Act 2006; or

 

  30.1.2 the court sanctions a compromise or arrangement proposed pursuant to
Part 26 or Part 27 of the Companies Act 2006; or

 

  30.1.3 notice is given of a resolution for a voluntary winding-up of the
Company;

the Grantor (acting with the consent of the Remuneration Committee) shall as
soon as practicable after the event mentioned in Rules 30.1.1, 30.1.2 or 30.1.3
above:-

 

  (a) (subject to Rule 18.1.2, Rule 24.1.2 and Rule 30.2) notify Awardholders
that Nil-Cost Option Awards or Share Options may then be exercised, within one
month (or such longer period as may be specified in such notice), in respect of
such of the Award Shares (if any) which are then Vested Shares or which are then
deemed to become Vested Shares in accordance with Rule 32 below;

 

  (b) (subject to Rule 30.4 and Rule 30.5 below) issue or transfer or procure
the issue or transfer to Awardholders of Award Shares under Contingent Share
Awards which are then Vested Shares or which are then deemed to become Vested
Shares in accordance with Rule 32 below.

 

30.2 Where a compromise or arrangement in connection with the Company is
proposed pursuant to Part 26 or Part 27 of the Companies Act 2006, the Company
may notify Awardholders that Nil-Cost Option Awards and Share Options may be
exercised subject to the Court sanctioning the compromise or arrangement, so
that such exercise takes effect immediately after the Court sanctions the
compromise or arrangement but before such compromise or arrangement becomes
effective. Where the Company so notifies an Awardholder in accordance with this
Rule 30.2:-

 

  30.2.1 the Nil-Cost Option Awards and Share Options may be exercised in
respect of such of the Award Shares (if any) which are then Vested Shares or
which are then deemed to become Vested Shares in accordance with Rule 32 below;

 

  30.2.2 the period during which the Awardholder may exercise Nil-Cost Option
Awards or Share Options will be at least 14 days, ending no more than 14 days
before the date on which the Court is expected to sanction the compromise or
arrangement; and

 

  30.2.3 any entitlement to exercise a Nil-Cost Option Award or Share Option
pursuant to this Rule 30.2 shall be in addition to the Awardholder’s rights
under Rule 30.1 if notice is given to the Awardholder that he may exercise his
Award pursuant to that rule.

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30.3 All Nil-Cost Option Awards or Share Options shall immediately lapse and
cease to be exercisable upon the expiry of the periods mentioned in Rule 30.1 or
Rule 30.2 above or the commencement of a winding-up of the Company.

 

30.4 If any issue or transfer of Award Shares under Contingent Share Awards
pursuant to Rule 30.1 above would result in any adverse tax consequences for an
Awardholder (whether under Section 409A of the US Federal Internal Revenue Code
1986 or otherwise), such issue or transfer shall instead be made as soon as
reasonably practicable after the time (determined by the Committee) to be the
earliest time at which such issue or transfer of Award Shares will not result in
adverse tax consequences.

 

30.5 If the Awardholder is subject to US Federal Income Tax, Award Shares may
not be delivered to the Awardholder under Contingent Share Awards pursuant to
Rule 30.1 more than 2.5 months after the later of the end of the financial year
of the Company or the end of the calendar year in which the event referred to in
Rules 30.1.1 to 30.1.3 occurs.

 

31. CHANGE OF CONTROL

 

31.1 If any person:-

 

  31.1.1   obtains Control of the Company as a result of making a general offer
to acquire Shares in the Company; or

 

  31.1.2   having obtained such Control, makes such an offer

then the Grantor (acting with the consent of the Remuneration Committee) shall,
as soon as practicable after becoming aware of that event:-

 

  (a) (subject to Rule 18.1.2 and Rule 24.1.2) notify Awardholders that Nil-Cost
Option Awards or Share Options may then be exercised, within one month (or such
longer period as may be specified in such notice), in respect of such of the
Award Shares (if any) which are then Vested Shares or which are then deemed to
become Vested Shares in accordance with Rule 32 below; and

 

  (b) (subject to Rule 31.4 and Rule 31.5 below) issue or transfer or procure
the issue or transfer to Awardholders of Award Shares under Contingent Share
Awards which are then Vested Shares or which are then deemed to become Vested
Shares in accordance with Rule 32 below.

 

31.2 For the purposes of the preceding provisions of this Rule 31 a person shall
be deemed to have Control of the Company if he and others acting in concert with
him have together obtained Control of it.

 

31.3 All Nil-Cost Option Awards or Share Options shall immediately lapse and
cease to be exercisable upon the expiry of the periods mentioned in Rule 31.1
above.

 

31.4 If any issue or transfer of Award Shares under Contingent Share Awards
pursuant to Rule 31.1 above would result in any adverse tax consequences for an
Awardholder (whether under Section 409A of the US Federal Internal Revenue Code
1986 or otherwise), such issue or transfer shall instead be made as soon as
reasonably practicable after the time (determined by the Committee) to be the
earliest time at which such issue or transfer of Award Shares will not result in
adverse tax consequences.

 

31.5 If any Awardholder is subject to US Federal Income Tax, Award Shares may
not be delivered to the Awardholder under Contingent Share Awards pursuant to
Rule 31.1 more than 2.5 months after the later of the end of the financial year
of the Company or the end of the calendar year in which the change of Control
referred to in Rule 31.1 occurs.

 

32. DEEMED VESTING ON A CORPORATE EVENT

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32.1 Where an event mentioned in any of Rules 29, 30 or 31 occurs before the end
of the Vesting Period relevant to Award Shares, the extent to which Award Shares
that are not then Vested Shares will be deemed to be Vested Shares shall be
determined in accordance with this Rule 32.

 

32.2 The number of Award Shares subject to an Award that will be deemed to be
Vested Shares will be determined by:-

 

  32.2.1 in accordance with Rule 26.5 above, calculating the extent to which the
Performance Condition that applies to the Award has been satisfied up to the
time of the relevant event (such time to be determined by the Remuneration
Committee); and

 

  32.2.2 time pro-rating the total number of Award Shares on the basis of the
proportion of the Vesting Period relevant to the Award Shares that has elapsed
at the time of the relevant event (such time to be determined by the
Remuneration Committee).

 

32.3 The Remuneration Committee may (if it so determines in its absolute
discretion) specify that a different number of Award Shares shall be deemed to
be Vested Shares than would be the case following the application of Rule 32.2
above if the Remuneration Committee determines that the vesting outcome achieved
under Rule 32.2 does not reflect the underlying financial performance of the
Company.

PART I: AMENDMENTS

 

33. VARIATION OF SHARE CAPITAL

 

33.1 In the event of any alteration of the Ordinary Share Capital by way of
capitalisation or rights issue, sub-division, consolidation or reduction or any
other variation of the share capital of the Company, or (at the discretion of
the Remuneration Committee) a demerger or payment of a special dividend, the
Remuneration Committee may make such adjustments as it considers appropriate:-

 

  33.1.1 to the number of Shares in respect of which a Nil-Cost Option Award, a
Share Option or a Contingent Share Award subsists;

 

  33.1.2 if a Nil-Cost Option Award or Share Option has been exercised but no
Vested Shares have been issued or transferred, to the number of Vested Shares
which may be so issued or transferred;

 

  33.1.3 to the Exercise Price payable in respect of a Share Option

PROVIDED THAT:-

 

  (a) except in the case of a sub-division, consolidation or capitalisation
issue, any such adjustment is confirmed in writing by the Auditors to be in
their opinion fair and reasonable;

 

  (b) the number of Shares as so adjusted has been rounded down to the nearest
whole number; and

 

  (c) if the Grantor is not the Company, no such adjustment shall be made
without the consent of the Grantor.

 

33.2 As soon as reasonably practicable after making any adjustment pursuant to
Rule 33.1, the Directors shall (on behalf of the Grantor) give notice to every
Awardholder affected thereby and shall at the written request of any such
Awardholder and upon the surrender of any Award Certificates which he holds
deliver or procure the delivery to him of revised Award Certificates in respect
of his Awards.

 

34. ALTERATION OF THE PLAN

 

34.1 The Committee may make any alteration or amendment to this Plan including
such alterations or amendments as may be necessary to take account of any
comments of the London Stock Exchange prior to its approval by shareholders of
the Company.

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34.2 The Committee may thereafter alter or amend any of the provisions of this
Plan in any respect PROVIDED THAT:-

 

  34.2.1 no such alteration or amendment shall be made to the advantage of
existing or new Awardholders to the provisions relating to eligibility to
participate, the individual limits on granting Awards, the overall limitations
on the making of Awards, the basis for determining Awardholders’ rights to
acquire Shares and the adjustment of such rights in the event of a variation of
the Ordinary Share Capital or this Rule 34 without the prior approval by
ordinary resolution of the shareholders of the Company SAVE THAT the provisions
of this Rule 34.2.1 shall not apply to the extent that such alteration or
amendment is in the opinion of the Committee a minor amendment which is
necessary or appropriate:-

 

  (a) to benefit the administration of this Plan;

 

  (b) to take account of any change in legislation; or

 

  (c) to obtain or maintain favourable tax, exchange control or regulatory
treatment for existing or new Awardholders, the Company, any Subsidiary or any
Associated Company; and

 

  34.2.2 if in relation to any Awards the Grantor is not the Company, no
alteration or addition shall be made to the terms of such Awards without the
approval of the Grantor.

 

34.3 As soon as reasonably practicable after making any such alteration or
addition the Directors shall (on behalf of the Grantor) give notice to every
Awardholder (if any) affected thereby.

PART J: MISCELLANEOUS

 

35. ISSUE OF NEW SHARES

 

35.1 The number of Shares in respect of which rights to subscribe for Shares may
be granted by the Company on any day under this Plan (or which are to be issued
in respect of Awards made on that day under this Plan) when aggregated with the
number of Shares:-

 

  35.1.1 issued, or remaining capable of being issued on the exercise or vesting
of Awards granted during the period of 10 years ending on that date;

 

  35.1.2 issued on the exercise of, or remaining capable of being issued on the
exercise of options or other rights to subscribe for Shares granted during the
period of 10 years ending on that day under any other employees’ share option
scheme of the Company; and

 

  35.1.3 issued at the cost of the Company during the period of 10 years ending
on that day under or for the purposes of any other employees share scheme of the
Company (other than a share option scheme providing for rights to subscribe for
Shares);

must not exceed 10 per cent of the Shares in issue on that date.

 

35.2 For the purposes of this Rule 35 references to rights to subscribe for
Shares shall, if so required in accordance with guidance issued by the
Association of British Insurers, be taken to include references to rights to
acquire Shares issued or to be issued out of treasury.

 

35.3 For the avoidance of doubt, if Shares have been counted for the purpose of
this Rule 35 on their issue to the trustee of any employees’ trust established
by the Company, they shall not also be counted when they are used to satisfy an
Award (or a right granted under any other employees’ share scheme of the
Company).

 

36. SERVICE OF DOCUMENTS

 

36.1 Except as otherwise provided in this Plan, any notice or document to be
given by, or on behalf of, the Company or other Grantor or any plan
administrator to any person in accordance or in connection with this Plan shall
be duly given:-

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  36.1.1 by sending it through the post in a pre-paid envelope to the address
last known to the Company to be his address and, if so sent, it shall be deemed
to have been duly given on the date of posting; or

 

  36.1.2 if he holds office or employment with any member of the Group or any
Associated Company, by delivering it to him at his place of work or by e-mail or
by sending to him a facsimile transmission addressed to him at his place of work
and if so sent it shall be deemed to have been duly given at the time of
transmission SAVE THAT a notice or document shall not be duly given by e-mail
unless that person is known by his employer company to have personal access
during his normal business hours to information sent to him by e-mail.

 

36.2 Any notice or document so sent to a person in accordance with Rule 36.1
shall be deemed to have been duly given notwithstanding that such person is then
deceased (and whether or not the Company or other Grantor has notice of his
death) except where his Personal Representatives have established their title to
the satisfaction of the Company and supplied to the Company an alternative
address to which documents are to be sent.

 

36.3 Any notice in writing or document to be submitted or given to the Grantor,
the Company or a plan administrator in accordance or in connection with this
Plan may be delivered, sent by post, facsimile transmission or e-mail but shall
not in any event be duly given unless it is actually received (or, in the case
of an e-mail, opened) by the Secretary of the Company or such other person as
may from time to time be nominated by the Company and whose name and address is
notified to Awardholders.

 

36.4 For the purposes of this Plan, an e-mail shall be treated as not having
been duly sent or received if the recipient of such e-mail notifies the sender
that it has not been opened because it contains, or is accompanied by a warning
or caution that it could contain or be subject to, a virus or other computer
programme which could alter damage or interfere with any computer software or
e-mail.

 

37. STAMP DUTY

Any stamp duty or stamp duty reserve tax payable in respect of a transfer of
Shares to or at the direction of a Awardholder (other than stamp duty or stamp
duty reserve tax payable on a sale of Shares by the Grantor at the direction of
the Awardholder) shall be paid by the Company or, if different, the Grantor (who
shall be reimbursed by the Company).

 

38. JURISDICTION

 

38.1 This Plan and any Award shall be governed by and construed in all respects
in accordance with the laws of England and Wales.

 

38.2 The courts of England shall have exclusive jurisdiction in relation to any
claim, dispute or difference concerning an Award and any matter arising from or
in relation to this Plan.

 

39. PURCHASES BY TRUSTEE

 

39.1 An Awardholder may, subject to the Model Code, direct the Trustee to sell
Vested Shares on his behalf and, in this event, such Shares may, if the Trustee
so determines, be purchased by the Trustee PROVIDED THAT the price per Share
paid by the Trustee is not less than the Market Value of a Share on the date of
purchase.

 

40. THIRD PARTY RIGHTS

Except as otherwise expressly stated to the contrary, neither this Plan nor the
making of any Award shall have the effect of giving any third party any rights
under this Plan pursuant to the Contract (Rights of Third Parties) Act 1999 and
that Act shall not apply to this Plan or to the terms of any Award under it.

 

41. SECTION 409A

 

41.1 This Plan shall be operated in accordance with the requirements of
Section 409A of the United States Internal Revenue Code of 1986, as amended, and
the applicable regulations and other guidance of general applicability that are
issued thereunder (“Section 409A”) in order to avoid the negative tax
consequences that may apply under Section 409A. Unless the Committee otherwise
determines any provision that is required to appear in the Plan to satisfy the
requirements for avoiding Section 409A’s negative tax consequences, but that is
not expressly set forth, shall be deemed to be set forth herein, and the Plan
shall be administered in all respects as if such provision were expressly set
forth.

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41.2 In the event that an Awardholder incurs tax under the Federal Insurance
Contributions Act (FICA) or the corresponding withholding provisions of any
applicable state, local or foreign tax laws on any Award before the Awardholder
is otherwise entitled to receive a transfer of Vested Shares, the Awardholder
may receive an advance on such Vested Shares as permitted under U.S. Treasury
Regulation § 1.409A-3(j)(4)(vi). Such advance shall not exceed the aggregate
amount of the FICA tax and the corresponding income tax withholdings related to
such FICA tax amount relating to an Award.

SCHEDULE 1

Voluntary Resignations where Committee may use its discretion in accordance with
Rule 22.1.6 (Contingent

Share Awards)

 

The individual must Leave by way of Voluntary Resignation during a period of two
years following the initial existence of one or more of the following conditions
arising without the individual’s consent.

 

1. A material diminution in the individual’s base compensation.

 

2. A material diminution in the individual’s authority, duties, or
responsibilities.

 

3. A material diminution in the authority, duties, or responsibilities of the
supervisor to whom the individual is required to report, including a requirement
that a individual report to a corporate officer or employee instead of reporting
directly to the board of directors of a corporation (or similar governing body
with respect to an entity other than a corporation).

 

4. A material diminution in the budget over which the individual retains
authority.

 

5. A material change in the geographic location at which the individual must
perform the services.

 

6. Any other action or inaction that constitutes a material breach by the
service recipient of the agreement under which the individual provides services.