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**This Trust Deed** is made the 23rd day of October 2000 **Between**:

| **(1)** | **LATTICE GROUP PLC** registered      in England with No. 3900804 and whose registered office is at 130 Jermyn      Street, London SW1Y 4UR (the “**Company**”); and |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                             |

| **(2)** | **MOURANT & CO TRUSTEES LIMITED** registered in Jersey with No. 18478 and whose registered office is situate at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands (the “**Original Trustee**”) |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Whereas**:

| (A)    | The Company has paid the sum of one      hundred pounds (£100) to the Original Trustee a trustee of The Lattice      Group Employees Share Trust as constituted by this Trust Deed; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                      |

| (B)    | The board of directors of the Company      has by a resolution passed on 4 September 2000 approved the establishment      of the Lattice Group Long Term Incentive Scheme and the Company intends      to provide funds to the Trustee to acquire Shares for the purposes of Allocations      under the proposed scheme; |
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|   |                                                                                                                                                                                                                                                                                                                     |

| (C) | The Original Trustee has agreed to be the first trustee of this Trust Deed. |
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**Now This Deed Witnesses** as follows:

| **1**  | **Definitions** |
|--------|-----------------|
|   |            |

| **1.1** | In this Trust Deed terms and expressions used in the Scheme shall have where the context so admits the same meaning herein and in addition the following terms and expressions shall have the meanings set out below: |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Allocated Shares**”      means any Shares which are comprised in an Allocation under the Scheme and      which either have not been transferred, renounced or forfeited in accordance      with the provisions of the Scheme or have not been made subject to an Option; |

|   |                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Allocation**”      means an allocation of Shares under the Scheme and the term “**allocated**”      shall be construed accordingly; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Beneficiaries**”      means the employees, executive directors, former employees and former executive      directors from time to time of the Company and any Subsidiary and the wives,      husbands, widows, widowers and children and dependent step-children under      the age of eighteen, of such employees, executive directors and former employees      and former executive directors **PROVIDED THAT** no person who is resident      in the Island of Jersey for the purposes of Jersey law or who is for the      time being a Trustee shall be or be capable of being a Beneficiary; |

|   |                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|
|   | “**the Board**”      means the board of directors of National Grid Transco or a duly authorised      committee thereof; |

|   |                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Demerger**”      means the demerger of the Company from BG Group plc, approved by the shareholders      of BG Group plc at an EGM held on 16 October 2000; |

|   |                                                 |
|--------|------------------------------------------------------|
|   | the “**General Trust      Fund**” means: |

|   |   |                                             |
|--------|--------|--------------------------------------------------|
|   | (a)    | the said sum of one hundred pounds (£100); |

|   |   |                                                                                                                                                                              |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b)    | all money investments or other property      paid or transferred by any person to or otherwise vested in and accepted      by the Trustee as additions to the General Trust Fund; |
|   |   |                                                                                                                                                                              |

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|   | (c) | all accumulations (if any) of income      of the General Trust Fund directed to be held as an accretion to the capital      of the General Trust Fund; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |                                                                                                                                                                                       |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (d)    | all Shares and other property which      have been the subject of Allocations and which have since been renounced      or forfeited under Rules 11.7 and 5 respectively of the Scheme; and |

|   |   |                                                                                                                                                                              |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (e)    | the money investments and property from      time to time representing the said money investments property additions      and accumulations and renounced and forfeited property; |

|   |                                                                                                                                                                               |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | the “**Group**”      means National Grid Transco and its Subsidiaries from time to time and “**Member      of the Group**” shall be construed accordingly; |

|   |                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Merger**”      means the merger of the Company and National Grid Group plc by way of a      scheme of arrangement under section 425 of the Companies Act 1985; |

|   |                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**National Grid      Transco**” means National Grid Transco plc (registered in England      and Wales with company number: 4031152); |

|   |                                                                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Option**”      means a right to acquire shares granted by the Trustee following the Merger      to a Beneficiary who elected to surrender an Allocation in consideration      for the grant of the Option; |

|   |                                                                                                                                                                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Qualifying Securities**”      means any shares or debentures in National Grid Transco (shares and debentures      having the same meaning as in Part III of the Financial Services and Markets      Act 2000 (Regulated Activities) Order 2001); |

|   |                                                                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | the “**Remuneration      Committee**” means the Remuneration Committee of National Grid Transco      or, if there is no such committee in existence, the Board or any duly authorised      committee thereof; |

|   |                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | the “**Scheme**”      means the Lattice Group Long Term Incentive Scheme the rules of which are      set out in the Second Schedule hereto as amended from time to time; |

|   |                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | the “**Scheme Trust      Fund**” means all Shares allocated for the purposes of the Scheme      including the right to call for Shares under any put and call option arrangement      entered into by the Trustee; |

|   |                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Share**”      means a fully paid ordinary share in the capital of National Grid Transco      or any share(s) representing the same as a result of a Takeover or Reorganisation      of National Grid Transco or any other variation of the share capital of      National Grid Transco; |

|   |                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Subsidiary**”      means a company which is a subsidiary of National Grid Transco within the      meaning of Section 736 of the Companies Act 1985; |

|   |                                                                                  |
|--------|---------------------------------------------------------------------------------------|
|   | the “**Taxes Act**”      means the Income and Corporation Taxes Act 1998; |

|   |                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------|
|   | “**Trust Deed**”      means this trust deed of the Lattice Group Employees Share Trust; |

|   |                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Trustee**”      means the Original Trustee referred to in this Trust Deed or such other      person or persons who is or are the trustee or trustees from time to time      of the Scheme; |

|   |                                                                                       |
|--------|--------------------------------------------------------------------------------------------|
|   | “**Trust Funds**”      means the General Trust Fund and the Scheme Trust Fund; |

|   |                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   | the “**Trust Period**”      means the period commencing on the date of the Trust Deed and ending on      the earliest of: |
|   |                                                                                                                                  |

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|   | (a) | the last day of the period of 69 years from the date of this Trust Deed; and |
|--------|-----|------------------------------------------------------------------------------|

|   |   |                                                                                                                                                                                                                                   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b)    | the date when an order for winding up      the Company is made or a resolution is passed for the voluntary winding      up of the Company (otherwise than in the course of an amalgamation or reconstruction      of the Company); and |

|   |                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | such date as the Company      shall by deed notify (not being a date earlier than the date of execution      of such deed) provided that the Trustee shall have at least three months’      notice of the end of the Trust Period. |

|    |                                                           |
|---------|----------------------------------------------------------------|
| **1.2** | In this Trust Deed unless the context      requires otherwise: |

|   |      |                                                                                                                       |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------|
|   | **1.2.1** | the headings are inserted for convenience      only and do not affect the interpretation of any clause of this Trust Deed; |

|   |      |                                                                        |
|--------|-----------|-----------------------------------------------------------------------------|
|   | **1.2.2** | a reference to a clause is a reference      to a clause of this Trust Deed; |

|   |      |                                                                       |
|--------|-----------|----------------------------------------------------------------------------|
|   | **1.2.3** | a reference to a statute or statutory      provision includes a reference: |

|   |   |   |                                                                                                                                              |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | (i)    | to that statute or provision as from      time to time consolidated, modified, re-enacted or replaced by any statute      or statutory provision; |

|   |   |   |                                                                                                       |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------|
|   |   | (ii)   | to any repealed statute or statutory      provision which it re-enacts (with or without modification); and |

|   |   |   |                                               |
|--------|--------|--------|----------------------------------------------------|
|   |   | (iii)  | to any subordinate legislation made      under it; |

|   |      |                                                          |
|--------|-----------|---------------------------------------------------------------|
|   | **1.2.4** | words in the singular include the plural      and vice versa; |

|   |      |                                                                                              |
|--------|-----------|---------------------------------------------------------------------------------------------------|
|   | **1.2.5** | a reference to the masculine shall be      treated as a reference to the feminine and vice versa. |

|    |                                                                              |
|---------|-----------------------------------------------------------------------------------|
| **1.3** | Terms and expressions used in the Scheme      shall have the same meaning herein. |

|   |               |
|--------|--------------------|
|   |               |
| **2**  | **General Trusts** |

|    |                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.1** | The Trustee shall during the Trust Period      hold the General Trust **UPON TRUST** as to investments or property other      than money in its absolute discretion to sell call in or convert all or      any of such investments or property into money and **UPON TRUST** as      to money at its absolute discretion to invest in its name (or under its      control) in Shares. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.2** | The Trustee shall during the Trust Period      hold the General Trust Fund upon and subject to the trusts powers and provisions      of this Trust Deed (other than those applying to the Scheme Trust Fund only)      and the Trustee shall have the right at any time or times during the Trust      Period to accept such additional money investments or other property as      may be paid or transferred to them upon these trusts by the Company or any      other body corporate (including property of an onerous nature the acceptance      of which the Trustee considers to be beneficial). |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.3** | The Trustee shall during the Trust Period      hold the General Trust Fund **UPON TRUST** to pay and apply the capital      and income of the General Trust Fund to or for the benefit of all or such      one or more of the Beneficiaries exclusive of the other or others of them      in such shares or proportions if more than one and in such manner generally      as the Trustee shall in its absolute discretion think fit **PROVIDED THAT**      the Trustee may, if in its absolute discretion it thinks fit, accumulate      the whole or any part of the income of the General Trust Fund by investing      the same and accumulating any income as an accretion to the capital of the      General Trust Fund. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

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| **2.4** | The Trustee may during the Trust Period exercise the powers and discretions conferred under Schedule 1 hereto. |
|---------|----------------------------------------------------------------------------------------------------------------|

|    |                                                                                                                                                                                                                                                                                                 |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.5** | The Trustee may exercise any power or      discretion hereby conferred in favour of any person notwithstanding that      he is a trustee of the Trust Deed so long as at least one of the trustees      is neither a Beneficiary nor a corporate trustee whose directors include      a Beneficiary. |

|    |                                                                                                                                                                                                                                                                                 |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.6** | The Trustee may exercise any such power      or discretion in favour of any person notwithstanding that he is a director      of a corporate trustee hereof so long as he has not voted on any resolution      of the directors of such corporate trustee relating to such exercise. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.7** | The Trustee may transfer the capital      and income of the General Trust Fund to the trustee of any other settlement      for the benefit of the Beneficiaries or any of them to be held by them on      the trusts applicable to capital monies comprised in such settlement provided      such other settlement shall in the opinion of the Trustee be such that such      transfer would be beneficial to the person or persons whom it is thereby      sought to benefit. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.8** | Subject to the foregoing trusts and      to the powers hereby and by law conferred upon the Trustee and to every      exercise of such respective powers and if and insofar as the General Trust      Fund or the income thereof or any part or parts thereof shall not be wholly      disposed of for any reason whatsoever by the expiry of the Trust Period      the same shall be held **UPON TRUST** for such of the Beneficiaries as      are living at the expiry of the Trust Period and in such shares as the Trustee      shall determine and in default of determination, or in the event there are      no Beneficiaries living at such date, for **Victim Aid Support** or such      similar charitable purposes as the Trustee shall determine, and the receipt      of the Honorary Treasurer, Secretary or duly authorised officer shall be      a good receipt and discharge to the Trustee for any property or income paid      or transferred to any charity hereunder. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

| **3** | **Scheme Trust** |
|-------|------------------|

|    |                                                       |
|---------|------------------------------------------------------------|
| **3.1** | The Trustee shall as the trustee of      the Scheme apply: |

|   |      |                                                                                                                                                                     |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **3.1.1** | all monies received from the Company      or any Subsidiary or any other person and accepted by the Trustee for the      purposes of an Allocation under the Scheme; and |

|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **3.1.2** | all capital and income of the General      Trust Fund which the Trustee shall determine shall be applied for the purposes      of an Allocation under the Scheme, in the acquisition of Shares and shall      hold Shares **UPON TRUST** to Allocate the same to such one or more exclusively      of the other or others of the Beneficiaries who are eligible under the Scheme      and to transfer the same in accordance with the provisions of the Scheme      or the Options to the Participants. |

|    |                                                       |
|---------|------------------------------------------------------------|
| **3.2** | No further allocations will be made      under the Scheme. |

|    |                                                                                                                                                                                                                                                                                                              |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.3** | The Trustee shall have the power to      enter into put and call option arrangements and acquire Shares in pursuance      of such put and call option arrangements even if the price payable under      such arrangements varies from the market price for the time being of the      Shares acquired thereunder. |
|    |                                                                                                                                                                                                                                                                                                              |

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| **3.4** | The Trustee in pursuance of these trusts of the Scheme shall have the same powers, discretions and indemnities as apply to the trustees of the General Trust Fund under Clauses 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, and 24 of this Trust Deed save that to the extent such provisions shall be inconsistent with the provisions of the Scheme in which case the provisions of the Scheme shall apply. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    |                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.5** | The Trustee shall Transfer the Allocated      Shares into the name of the Participant absolutely on the First Transfer      Date (or such earlier date as may be provided under the Scheme) if he shall      be living; but subject thereto shall Transfer the Allocated Shares into      the name of the personal representatives to be held by them as part of the      Participant’s estate. |

|    |                                                                                                                                          |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| **3.6** | To the extent that an Allocation has      been renounced or forfeited it shall be held by the Trustee as part of the      General Trust Fund. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.7** | The Trustee shall transfer any Shares      subject to an Option into the name of the holder of the Option absolutely      following the valid exercise of such Option or if such optionholder shall      be dead at the time of such transfer then such Shares shall be transferred      into the name of the personal representatives of the optionholder to be      held by them as part of the optionholder’s estate. |

|   |                                 |
|--------|--------------------------------------|
|   |                                 |
| **4**  | **Limit on Trust Holding of Shares** |

|    |                                                                                               |
|---------|----------------------------------------------------------------------------------------------------|
| **4.1** | The Trustee may acquire any Shares by      subscription (at par or any greater value) or purchase. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **4.2** | Notwithstanding any other provision      contained in this Trust Deed the Trustee shall not, without the prior approval      of the shareholders of National Grid Transco, acquire any Shares if such      acquisition would to its knowledge cause the aggregate number of Shares      held by the Trustee and the trustee of any other employee’s share      scheme or trust adopted by National Grid Transco or the Company (other than      shares allocated to participants in a profit sharing scheme or share incentive      plan or held as nominee) to exceed five per cent. of all the issued ordinary      shares in National Grid Transco at the time of the proposed acquisition. |

|   |                                  |
|--------|---------------------------------------|
|   |                                  |
| **5**  | **Waiver and Mandating of Dividends** |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **5.1** | Save for any agreement made with National      Grid Transco in relation to Shares made subject to an Option, the Trustee      shall not demand or in any way enforce payment of any dividends which would      otherwise be payable on any shares of any class in the capital of National      Grid Transco for the time being comprised within the Trust Funds (and the      Trustee hereby waives its entitlement thereto) but where dividends are received      the Trustee shall be entitled to retain such dividends as an addition to      the General Trust Fund, allocate them as it sees fit or apply such dividends      in the purchase of Shares which may be released to Participants at such      later date as the Trustee may determine in its absolute discretion. |

|   |                          |
|--------|-------------------------------|
|   |                          |
| **6**  | **Power to give Indemnities** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall have power      to enter into any indemnity in favour of any former Trustee or any other      person in respect of any fiscal imposition or other liability of any nature      prospectively payable by the Trustee or otherwise in connection with this      Trust Deed and to charge or deposit the whole or any part of the General      Trust Fund as security for any such indemnity in such manner in all respects      as it shall in its absolute discretion thinks fit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| **7** | **Power to Vary Administrative Provisions** |
|-------|---------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall with the      prior consent of the Remuneration Committee have power at any time or times      during the Trust Period by deed or deeds to revoke or vary any of the administrative      provisions of this Trust Deed or to add any further administrative provisions      as the Trustee may consider expedient for the purposes of this Trust Deed      and without prejudice to the generality of the above for ensuring that at      all times there shall be a Trustee of this Trust Deed and that the General      Trust Fund shall be fully and effectively vested in or under the control      of such trustee and that the trusts of this Trust Deed shall be enforceable      by the Beneficiaries. |

|   |                  |
|--------|-----------------------|
|   |                  |
| **8**  | **Release of Powers** |

|   |                                                                                                                                                                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee may by deed      or deeds and so as to bind its successors as trustee release or restrict      the future exercise of all or any of the powers by the Trust Deed or by      law conferred either wholly or to the extent specified in any such deed      or deeds notwithstanding the fiduciary nature of any such powers. |

|   |                              |
|--------|-----------------------------------|
|   |                              |
| **9**  | **Power to Receive Remuneration** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall not be      liable to account for any remuneration or other profit or advantage received      in consequence of such trustee (or in the case of a corporate trustee, any      director or employees of it) acting as or being appointed as a director      or other officer or servant of any company notwithstanding that such appointment      was procured by an exercise by such trustee or by the Trustee of voting      rights attached to securities comprised in the Trust Funds. |

|   |                                                                                     |
|--------|------------------------------------------------------------------------------------------|
|   |                                                                                     |
| **10** | **Trustee not Bound to Interfere in      Business of Company in which it is Interested** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall not be      bound or required to interfere in the management or conduct of the business      of any company wherever resident or incorporated in which it is interested      but so long as the Trustee shall have no notice of any act of dishonesty      or misappropriation of monies on the part of the directors having the management      of such company the Trustee shall be at liberty to leave the conduct of      the business (including the payment or non-payment of dividends) wholly      to the directors and the Beneficiaries shall not be entitled to require      the distribution of any dividend by any such company or require the Trustee      to exercise any powers it may have to compel any such distribution. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

| **11** | **Power to Appoint Agents** |
|--------|-----------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall have power      instead of acting personally to employ and pay at the expense of the General      Trust Fund any agent in any part of the world whether attorneys solicitors      accountants brokers banks trust companies or other agents without being      responsible for the default of any agent if employed in good faith to transact      any business or act as nominee or do any act in the execution of these trusts      including without prejudice to the generality of the above the receipt and      payment of monies and the execution of documents. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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| **12** | **Power to Permit Self-Dealing** |
|--------|----------------------------------|

|   |                                                                                                                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall have power      to enter into any transaction concerning the trusts hereof notwithstanding      that one or more of the trustees or any officer or employee of the Trustee      may be interested in the transaction other than as one of the trustees. |
|   |                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                      |

| **13** | **Trustees’ Indemnities and Charges** |
|--------|---------------------------------------------|

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **13.1** | The Company and each Subsidiary hereby      covenants with the Trustee that they shall keep the Trustee and its estates      and effects fully indemnified against all actions, claims, losses, demands,      proceedings, charges, expenses, costs, damages, taxes, duties and other      liabilities whatsoever arising out of or in connection with the Scheme or      any Option, but so that no trustee or officer or employee of the Trustee      shall be indemnified or exonerated in respect of any fraud, negligence or      wilful default on his part. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **13.2** | Neither the Trustee nor any of its officers      or employees shall be liable to account to Participants for any remuneration      or other benefit received in connection with the Scheme or any Option and      no trustee or officer or employee of the Trustee shall be liable to account      to other Participants or holders of Options for any profit derived from      any appropriation to him of Shares held under the Scheme or the transfer      to him of any Shares held under any Option. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **13.3** | Any Trustee (and any director or officer      of a body corporate or a trust corporation acting as a Trustee) shall not      on his own account be precluded from acquiring, holding or dealing with      any stock, shares or securities whatsoever of National Grid Transco or any      Subsidiary or any other company in the shares of which National Grid Transco      or any such Subsidiary may be interested, or from entering into or being      interested in any contract or other transaction with National Grid Transco,      any Subsidiary or any such other company, and nor shall he be in any way      liable to account to National Grid Transco, any Subsidiary, any such other      company, any Participant or any holder of an Option for any profits made,      fees, commissions, shares or brokerage, discounts allowed or advantages      obtained by him from or in connection with such acquisition, holding dealing,      contract or transaction whether or not in connection with his duties hereunder. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **13.4** | The Trustee shall be entitled in the      absence of manifest error to rely without further enquiry on information      supplied to it by National Grid Transco or any Subsidiary and on any direction,      notice or document purporting to be given or executed by or with the authority      of National Grid Transco, any Subsidiary, any Participant, any holder of      an Option or any person in whom the beneficial interest in that Participant’s      or optionholder’s Shares is for the time being vested. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **13.5** | In the execution of these trusts the      Trustee shall not be able for any loss arising by reason of any improper      investment made in good faith or for the negligence or fraud of any agent      employed by the Trustee or where the employment of such agent was not strictly      necessary or expedient or by reason of any mistake or omission made in good      faith by the Trustee or by reason of any matter or thing except wilful and      individual fraud or dishonesty on the part of the trustee who is sought      to be made liable. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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| **14** | **Trustee Charging Clause** |
|--------|-----------------------------|

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **14.1** | Any trustee which shall be carrying      on trust business shall be entitled in addition to reimbursement of its      proper expenses to remuneration for its services in accordance with its      published terms and conditions for trusts business in force from time to      time and in the absence of any such published terms and conditions in accordance      with such terms and conditions as may from time to time be agreed between      such trustee and National Grid Transco. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **14.2** | Any trustee who is a solicitor or other      person engaged in a profession or business shall be entitled to charge and      be paid all normal professional or other charges for business done services      rendered or time spent personally or by such trustee’s firm in the      administration of these trusts including acts which a trustee not engaged      in any profession or business could have done personally. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **14.3** | Any trustee shall be entitled to retain      any brokerage or other commission which may be received personally by him      or by such trustee’s firm in respect of any transaction carried out      on behalf of this Trust Deed for which such trustee or trustee’s firm      is in the normal course of business allowed brokerage or other commission      notwithstanding that the receipt of such brokerage or commission was procured      by an exercise by such trustee or the Trustee of powers over the Trust Fund. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

| **15** | **Appointment of Trustees** |
|--------|-----------------------------|

|     |                                                                                                                     |
|----------|--------------------------------------------------------------------------------------------------------------------------|
| **15.1** | The statutory power of appointing new      or additional trustees shall apply hereto and shall be vested in the Company. |

|     |                                                                                                                                                 |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| **15.2** | The Company may at any time by a directors’      resolution and subject to (as the case may be) sub-clause 15.3 or sub-clause      15.4 below: |

|   |       |                                                                                                                                                          |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **15.2.1** | remove any trustee hereof from office      and such removal shall take effect upon the giving of notice in writing      of such resolution to the trustee; or |

|   |       |                                                                                                                                                  |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **15.2.2** | accept the resignation of any trustee      hereof upon receiving 30 days’ notice thereof or such other period      as the Company shall accept, |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Provided always that such      removal or resignation shall not take effect unless there either remains      or there is appointed a trustee capable of giving a valid discharge for      the assets of the Trust Funds and provided further that any trustee who      may be removed or may retire shall be provided with reasonable security      or indemnity against liabilities whether existing, future or contingent      or otherwise for which such trustee may be answerable as a trustee or former      trustee hereof (including without limitation any liabilities to taxation).      For the avoidance of doubt it is hereby declared that a company carrying      on trust business wheresoever resident may be appointed as a trustee hereof. |

|     |                                                                                                                                                                                                                                                 |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **15.3** | An outgoing trustee shall execute all      such transfers and take all other necessary steps to vest the Trust Fund      in the new or continuing trustees and all costs incidental thereto shall      be paid by the Trustee out of the Trust Fund. |

|     |                                                                                                                                                                                                                                                |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **15.4** | A person may be appointed to be a trustee      notwithstanding that such person is not resident in the United Kingdom and      remaining out of the United Kingdom for more than twelve months shall not      be a ground for removal as a trustee. |
|     |                                                                                                                                                                                                                                                |

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| **15.5** | The provisions of Sections 37 and 39      of the Trustee Act 1925 shall apply hereto as if any reference therein to      a trust corporation were to a corporation carrying on trust business. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                           |
|     |                                                                                                                                                                                           |

| **16** | **Payment of Liabilities and Insurance** |
|--------|------------------------------------------|

|     |                                                                                                                                                                                                                                                                                                                                                                 |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **16.1** | The Trustee shall pay all costs charges      expenses tax interest or other liabilities attributable to the trusts hereof      or incidental to the administration of the trusts hereof out of the General      Trust Fund and if the General Trust Fund is insufficient to discharge such      liabilities the same shall be payable to the Trustee by the Company. |

|     |                                                                                                                                                                                                      |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **16.2** | Clause 16.1 above does not apply to      any expenses and liabilities which result from the personal conscious misconduct      or fraud or negligence of any trustee or any of its officers or employees. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **16.3** | The Trustee may insure trust assets      against any loss caused by the Trustee or any of its employees, officers,      agents or delegates. It may also insure itself and any of its employees,      officers, and delegates against liability for breach of trust not involving      their own personal conscious misconduct or fraud or negligence or that of      the person concerned. The premiums may be paid out of the General Trust      Fund. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

| **17** | **Trust Accounts** |
|--------|--------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Trustee shall keep accurate      accounts of its trusteeship (identifying separately assets held under the      General Trust Fund the Scheme Trust Fund and any other employees’      share scheme) and once at least in every twelve months the Trustee shall,      if so required by the Company, cause such accounts to be made up and shall      submit such accounts to the Company. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |

| **18** | **Trustee’s Reliance on Information      Provided by the Board** |
|--------|------------------------------------------------------------------------|

|   | The Trustee may act and      rely upon information supplied to it by the Secretary of the Company, any      member of the Remuneration Committee, the Board, a duly appointed committee      of the Board or any other employee of the Company or a Member of the Group      notified in writing to the Trustee by the Secretary of the Company, and      shall not incur any liability obligation or responsibility for acting upon      the same. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |

| **19** | **Majority Decision of Trustees** |
|--------|-----------------------------------|

|   | Where there is more than      one trustee, any decision whatsoever to be taken by the trustees may (even      though not all the trustees are present at the trustee meeting when any      such decision is taken provided all the trustees have received notice of      the meeting and the business to be transacted) be made by a majority (being      not less than two) in number of the trustees then present and any such decision      so taken shall be binding upon all the Trustees provided that the said majority      so exercising any such power or discretion shall keep records in writing      of the exercise thereof and shall without undue delay inform the minority      of the Trustees not joining in such exercise of the manner in which the      said majority have exercised the said power or discretion. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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| **20** | **Proper Law Forum and Place of Administration** |
|--------|--------------------------------------------------|

|     |                                                                                                                                                                                                                                                    |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **20.1** | The proper law of this Trust Deed shall      be that of England and Wales and all rights under these trusts and its construction      and effect shall be subject to the jurisdiction of and construed according      to the laws of England and Wales. |

|     |                                                                                            |
|----------|-------------------------------------------------------------------------------------------------|
| **20.2** | The courts of England and Wales shall      be the forum for the administration of these trusts. |

|     |                                                                    |
|----------|-------------------------------------------------------------------------|
| **20.3** | Notwithstanding the provisions of sub-clauses      20.1 and 20.2 above: |

|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **20.3.1** | the Trustee shall have power (subject      to the application (if any) of the rule against perpetuities) to carry on      the general administration of these trusts in any jurisdiction in the world      whether or not such jurisdiction is for the time being the proper law of      this Trust Deed or the courts of such jurisdiction are for the time being      the forum for the administration of these trusts and whether or not the      Trustee is for the time being resident or domiciled in or otherwise connected      with such jurisdiction; |

|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **20.3.2** | the Trustee may at any time declare      in writing that from the date of such declaration the proper law of this      Trust Deed shall (subject to any future exercise of this present power)      be that of any specified jurisdiction (not being a jurisdiction under the      law of which these trusts would be capable of revocation or incapable of      enforcement) and that all rights under this Trust Deed and its construction      and effect shall be subject to and construed according to the laws of that      jurisdiction **PROVIDED ALWAYS** that in any such declaration as aforesaid      the Trustee shall be at liberty to make such consequential alterations or      additions to the trust powers and provisions of the Trust Deed as the Trustee      shall have been advised to make by a legal adviser having been qualified      for at least ten years in that jurisdiction to ensure that the said trust      powers and provisions shall (*mutatis mutandis*) be enforceable and      capable of taking effect save that no alteration shall be effective to the      extent that the whole or any part of the Trust Funds would cease to be held      for reasons within Section 86(1) of the Inheritance Tax Act 1984. |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

| **21** | **Exclusion Clause** |
|--------|----------------------|

|   |                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | No discretion or power by      this Trust Deed or by law conferred on the Trustee or any other person shall      be capable of being exercised and no provision of this Trust Deed shall      be capable of operating directly or indirectly so as to: |

|     |                                                                                                                                                                      |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **21.1** | prevent the application of Section 86      of the Inheritance Tax Act 1984 to these trusts notwithstanding anything      else contained or implied in this Trust Deed; or |

|     |                                                                                                                                                                                                               |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **21.2** | cause this Trust Deed to cease to be,      or be part of, or prevent this Trust Deed from being, or being part of,      an employees’ share scheme as defined in Section 743 of the Companies      Act 1985. |
|     |                                                                                                                                                                                                               |
|     |                                                                                                                                                                                                               |

| **22** | **Lien** |
|--------|----------|

|   | Nothing in this Trust Deed      shall prejudice the Trustee’s lien over any property for the time      being in its hands or under its control in respect of any taxes duties or      other fiscal impositions or any other liability of any nature whatsoever      for which the Trustee may be or become accountable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                          |

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| **23** | **Perpetuity Period** |
|--------|-----------------------|

|   |                                                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
|   | The perpetuity period applicable      to the dispositions of this Trust Deed shall be of a duration equal to seventy      years. |
|   |                                                                                                                             |
|   |                                                                                                                             |

| **24** | **Irrevocability of Trustsa** |
|--------|-------------------------------|

|   |                                                     |
|--------|----------------------------------------------------------|
|   | The trusts of this Trust      Deed shall be irrevocable. |
|   |                                                     |
|   |                                                     |

| **25** | **Alterations** |
|--------|-----------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company may at any time,      with the prior written consent of the Trustee, by resolution of the board      of directors of the Company alter or add to all or any of the provisions      hereof save that no alteration shall be effective to the extent that if      it were the whole or any part of the Trust Funds would cease to be held      for reasons within Section 86(1) of the Inheritance Tax Act 1984. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                       |

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**The First Schedule**

**Additional Powers and Discretions of the Trusteein respect of the General Trust Fundexercisable during the Trust Period**

| **1** | **Share Option Schemes** |
|-------|--------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to agree with the      Company which proposes to grant or is in the course of granting options      over its shares or securities (being Qualifying Securities) to any Beneficiary      under any employees’ share option scheme, that it will upon notice      in writing acquire sufficient shares or securities to satisfy options which      may be exercised by such Beneficiary. The Trustee may agree to treat any      payment to the Trustee (or to the said company on behalf of the Trustee)      of the exercise price as a repayment of any loans made to the Trustee by      the Company for the purpose of acquiring such shares. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

| **2** | **Other Employees’ Share Schemes** |
|-------|------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to transfer or sell      any Shares or Qualifying Securities held by the Trustee to any Beneficiaries      under the terms of any other employees’ share schemes established      by any Member of the Group or and on such other terms as the Trustee may      in its absolute discretion determine. |
|   |                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                              |

| **3** | **Power to Borrow** |
|-------|---------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to borrow and raise      money in whatever way it may in its absolute discretion think fit (and in      connection therewith to do all such things as it may consider necessary      or expedient) either on the security of the General Trust Fund or otherwise      for any purpose (including the investment of the monies so raised as part      of the General Trust Fund) and to mortgage, charge or pledge any part of      the General Trust Fund as security for any monies so raised and to guarantee      payment of money and the performance of obligations in respect of borrowings      by any company fully or partly owned by the Trustee and in connection with      such guarantees to enter into such indemnities as the Trustee shall in its      absolute discretion think fit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

| **4** | **Power of Appropriation** |
|-------|----------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power in its absolute discretion      to appropriate any part of the General Trust Fund in its then actual condition      or state of investment towards satisfaction of any interest or share in      the General Trust Fund as may in all circumstances appear to the Trustee      to be just and reasonable and for the above purposes from time to time place      such value on any or all investments or other property as the Trustee shall      in its absolute discretion think fit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

| **5** | **Power to Vote** |
|-------|-------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power in respect of any      property comprised in the General Trust Fund to vote upon or in respect      of any shares, securities, bonds, notes or other evidence of interest in      or obligation of any corporation trust association or concern whether or      not affecting the security or the apparent security of the General Trust      Fund or the purchase or sale of the assets of any such corporation trust      association or concern in such manner as the Trustee shall in its absolute      discretion consider fit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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| **6** | **Power to Appoint Proxies** |
|-------|------------------------------|

|   |                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to give proxies or      powers of attorney with or without power of substitution for voting or acting      on behalf of the Trustee as the owner of any such property. |
|   |                                                                                                                                                                         |
|   |                                                                                                                                                                         |

| **7** | **Power of Custody** |
|-------|----------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to hold any or all      securities or other property in bearer form or in the name of the Trustee      or in the name of some other person or partnership or in the name or names      of nominees without disclosing the fiduciary relationship created by this      Trust Deed and to deposit the said securities and any title deeds or other      documents belonging or relating to the General Trust Fund in any part of      the world with any bank firm trust company or other company that undertakes      the safe custody of securities as part of its business without being responsible      for the default of such bank firm trust company or other company or for      any consequent loss. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| **8** | **Delegation of Bank Account Operation** |
|-------|------------------------------------------|

|   |                                                                                                                                                                                                                                                                    |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power to place on deposit      any moneys forming part of the General Trust Fund with any bank. When there      is more than one trustee of the Trust Deed, power to delegate to any one      or more of their number the operation of any bank account in their names. |
|   |                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                    |

| **9** | **Delegation of Powers** |
|-------|--------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power at any time (notwithstanding      any rule of law to the contrary) by deed or deeds revocable during the Trust      Period or irrevocable and executed during the Trust Period to delegate to      any person (including in cases where there is more than one trustee or this      Trust Deed to any other or others of the trustees) the exercise of all or      any powers conferred on the Trustee notwithstanding the fiduciary nature      of such power of powers. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

| **10** | **Power to Pay Taxes** |
|--------|------------------------|

|   |                                              |
|--------|---------------------------------------------------|
|   | Power to pay taxes in any      part of the world. |
|   |                                              |
|   |                                              |

| **11** | **Power to Deduct PAYE** |
|--------|--------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power, where any payment      of or on account of assessable income is made by the Trustee in circumstances      such that the employee is treated for the purposes of PAYE regulations as      making a payment of that income or an amount equal to the amount of the      payment, to deduct income tax from the payment and account for it in accordance      with the PAYE regulations. |

|   |                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   | Expressions used in this      Clause 11 shall have the same meaning as in Section 203(B) of the Taxes      Act. |
|   |                                                                                                            |

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| **12** | **Power to Make Replacement Allocations** |
|--------|-------------------------------------------|

|   |                                                                                                                                                                                                                               |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Power, as a result of the      Demerger, to make replacement allocations under the Scheme which apply as      if originally made under the terms of the BG Group Long Term Incentive Scheme      established on 15 September 1999. |
|   |                                                                                                                                                                                                                               |

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**THE SECOND SCHEDULE  Rules of the Lattice Group  Long Term Incentive Scheme**

| **1** | Interpretation and Construction |
|-------|---------------------------------|

|    |                                                                                                                                                 |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| **1.1** | For the purposes of the Scheme, the      following terms shall have the meaning indicated below unless the context      clearly indicates otherwise: |

|   |   |
|--------|--------|

|   | “Board” The board of directors of the Company; |
|--------|------------------------------------------------------------|

|   |                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   | “**Company**”      National Grid Transco plc (registered in England and Wales with company      number: 4031152); |

|   |                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Comparator Group**”      Such group of listed regulated and utilities companies in respect of each      outstanding Allocation as is contained in the tables attached hereto; |

|   |                                                                              |
|--------|-----------------------------------------------------------------------------------|
|   | “**Control**”      The meaning given by Section 840 of the Taxes Act; |

|   |                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   | “**Eligible Employee**”      An employee or executive director of the Company or of any Subsidiary; |

|   |                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Employing Company**”      In relation to an Allocation, the Member of the Group which employs the      Participant interested therein; |

|   |                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | **“Executive Share      Scheme**” Any executive share option or long term incentive scheme      for executives of the Group; |

|   |                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**First Transfer      Date**” In relation to an Allocation, the first date on which the      Shares may be transferred into the name of the Participant (or to his personal      representatives) being the fourth anniversary of the commencement of the      Measurement Period; |

|   |                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Group**”      The Company and its Subsidiaries for the time being, and the expression      “Member of the Group” shall be construed accordingly; |

|   |                                                                        |
|--------|-----------------------------------------------------------------------------|
|   | “**London Stock Exchange**”      The London Stock Exchange plc; |

|   |                                                                         |
|--------|------------------------------------------------------------------------------|
|   | “**Measurement Date**”      The last day of each calendar month; |

|   |                                                                                                                                                                                                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Measurement Period**”      In respect of an Allocation, the period of three years during which performance      is measured for the purposes of the Scheme, PROVIDED THAT for the avoidance      of doubt |

|   |                                                                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | where the Participant ceases      employment on account of his dismissal for redundancy following a period      of suspension from his duties (garden leave), the Measurement Period shall      cease upon the date such suspension commenced. |

|   |                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Merger**”      means the merger of the Company and National Grid Group plc by way of a      scheme of arrangement under section 425 of the Companies Act 1985; |

|   |                                                                                                                                                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Participant**”      An Eligible Employee who has received an Allocation to the extent it has      not been Transferred, renounced, forfeited or released; |

|   |                                                                                |
|--------|-------------------------------------------------------------------------------------|
|   | “**Performance Target**”      The performance target set out in Rule 4; |

|   |                                               |
|--------|----------------------------------------------------|
|   | “**Rule**”      A rule of this Scheme; |
|   |                                               |

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|   | “**Scheme**” This Long Term Incentive Scheme as altered from time to time; |
|--------|----------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                               |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Share**”      A fully paid ordinary share in the capital of the Company or any Share representing      the same after a Takeover or Reconstruction or any other variation of the      share capital of the Company; |

|   |                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Subsidiary**”      Any company which is a subsidiary of the Company within the meaning of Section      736 of the Companies Act 1985; |

|   |                                                                    |
|--------|-------------------------------------------------------------------------|
|   | “**Takeover or Reconstruction**”      Any of the following: |

|   |   |                                                                                            |
|--------|--------|-------------------------------------------------------------------------------------------------|
|   | (A)    | the business or subsidiary      for which the employee works ceases to be owned by the Company; |

|   |   |                                                                                                                                |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)    | a takeover offer for the      whole of the issued ordinary share capital of the Company becomes unconditional      in all respects; |

|   |   |                                                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------|
|   | (C)    | the Court sanctions a scheme      of arrangement under Section 425 of the Companies Act 1985; |

|   |   |                                                                          |
|--------|--------|-------------------------------------------------------------------------------|
|   | (D)    | the passing of a resolution      for the voluntary winding up of the Company; |

|   |   |                                                                                                                                                          |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (E)    | if the Trustee upon the      recommendation of the Remuneration Committee so determines, a demerger of      a substantial part of the Group’s business. |

|   |                                                                                                                                                                                                                                    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Transfer**”      The transfer of Shares on the Transfer Date into the name of the Participant      (or to his personal representatives) and references to “Transferred”      shall be construed accordingly; |

|   |                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------|
|   | “**Transfer Date**”      The date on which the Shares are Transferred in accordance with Rule 6; |

|   |                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**TSR**”      or “**Total Shareholder Return**” Total Shareholder Return      as calculated in accordance with Rule 4; |

|   |                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**UK Listing Authority**”      The Financial Services Authority as the competent authority for listing      in the United Kingdom under Part VI of the Financial Services and Markets      Act 2000. |

|    |                                                       |
|---------|------------------------------------------------------------|
| **1.2** | In this Scheme unless the context requires      otherwise: |

|   |   |                                                                                                  |
|--------|--------|-------------------------------------------------------------------------------------------------------|
|   | (A)    | The headings are inserted      for convenience only and do not affect the interpretation of any Rule; |

|   |                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------|
|   | (B)      A      reference to a statute or statutory provision includes a reference: |

|   |   |   |                                                                                                                                              |
|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | (i)    | to that statute or provision as from      time to time consolidated, modified, re-enacted or replaced by any statute      or statutory provision; |

|   |   |   |                                                                                                       |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------|
|   |   | (ii)   | to any repealed statute or statutory      provision which it re-enacts (with or without modification); and |

|   |   |   |                                               |
|--------|--------|--------|----------------------------------------------------|
|   |   | (iii)  | to any subordinate legislation made      under it; |

|   |                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------|
|   | (C)      Words      in the singular include the plural, and vice versa; |

|   |   |                                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------|
|   | (D)    | A reference to the masculine      shall be treated as a reference to the feminine and vice versa. |

|    |                                                                                                          |
|---------|---------------------------------------------------------------------------------------------------------------|
| **1.3** | Save as otherwise defined in the Rules,      terms used in the Trust Deed shall have the same meaning herein. |
|    |                                                                                                          |

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| **2** | **Scheme Allocation Limits** |
|-------|------------------------------|

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.1** | The maximum number of Shares which may      be allocated under the Scheme on any day shall not, when added to the aggregate      of the number of Shares which have been allocated in the previous 10 years      under the Scheme and any other Employees’ Share Scheme adopted by      the Company, exceed such number as represents 10 per cent of the ordinary      share capital of the Company in issue immediately prior to that day. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.2** | The maximum number of Shares which may      be allocated under the Scheme on any day shall not, when added to the aggregate      of the number of Shares which have been allocated in the previous 10 years      under the Scheme and any other Executive Share Scheme adopted by the Company,      exceed such number as represents 5 per cent. of the ordinary share capital      of the Company in issue immediately prior to that day. |

|    |                                                                                                                                                                                     |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.3** | In determining the above limits no account      shall be taken of any Shares where the right to acquire such shares was      released, lapsed or otherwise became incapable of exercise. |

|    |                                                                                 |
|---------|--------------------------------------------------------------------------------------|
| **2.4** | References in this Rule 2 to the “allocation”      of Shares shall mean: |

|   |                                                                                |
|--------|-------------------------------------------------------------------------------------|
|   | (A)      in      the case of any share option scheme: |

|   |   |   |                                                                              |
|--------|--------|--------|-----------------------------------------------------------------------------------|
|   |   | (i)    | the placing by the Board or the Trustee      of unissued shares under option; and |

|   |   |   |                                                                                                                                                  |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | (ii)   | in so far as not taken into account      under (i) above, any subscription for Shares which are issued for the purpose      of satisfying any option; |

|   |   |                                                                                                                                                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)    | in relation to other types      of Employees’ Share Scheme, shall mean the issue and allotment of      shares and references to “allocated” shall be construed accordingly. |
|   |   |                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                          |

| **3** | **Allocation of Shares** |
|-------|--------------------------|

|    |                                                       |
|---------|------------------------------------------------------------|
| **3.1** | No further Allocations will be made      under the Scheme. |

|    |                                                                                                                                                                                                                                                        |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.2** | The Trustee shall not be obliged to      acquire the Shares which have been Allocated under the Scheme until the      Transfer Date, provided that the Trustee may always (without prejudice to      any indemnity arising by law or under the Trust Deed): |

|   |      |                                                                                                                                                                                                                                                                  |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (A)  | demand payment by Lattice      Group plc of an irrecoverable contribution of such an amount as may be required      by the Trustee for the repayment in whole or in part of any advance or loan      for the purpose of acquiring Shares which have been Transferred; |

|   |   |                                                                                                                                                                                                                                                                                                                   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)    | demand payment from Lattice      Group plc by way of indemnity in respect of any costs, expenses or other      liabilities it has incurred in the acquisition of Shares for the purposes      of the Scheme including where any Shares have been Allocated to the employees      of Subsidiaries of Lattice Group plc. |

|    |                                                                                                                                                                                                                                                                     |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.3** | Allocated Shares shall be registered      in the name of the Trustee or held to the order of or subject to options      in favour of the Trustee and shall be held subject to Transfer, renunciation      or forfeiture in accordance with the provisions of the Scheme. |

|    |                                                                                                                                                      |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.4** | The interest of a Participant in Allocated      Shares may not be transferred, assigned, pledged, charged or otherwise disposed      of by a Participant. |
|    |                                                                                                                                                      |

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| **4** | **Performance Target** |
|-------|------------------------|

|    |                                                                                                                    |
|---------|-------------------------------------------------------------------------------------------------------------------------|
| **4.1** | Whether and, if so, the extent to which      an Allocation shall be Transferred shall be determined in accordance with: |

|   |      |                                                                                                                |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------|
|   | **4.1.1** | Lattice Group plc’s ranking against      the Comparator Group up to the time of completion of the Merger; and |

|   |      |                                                                                             |
|--------|-----------|--------------------------------------------------------------------------------------------------|
|   | **4.1.2** | the Company’s ranking against      the Comparator Group following completion of the Merger |

|   |                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | in terms of Total Shareholder      Return during the Measurement Period (or from the commencement of the Measurement      Period until such date as determined in accordance with Rule 6). |
|   |                                                                                                                                                                                       |

| **Ranking      against the Comparator Group**                       |   |   | **Proportion      of Allocated Shares which may be Transferred** |   |
|---------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                                                |   |   | %                                                                |   |
|                                                                     |        |        |                                                                  |        |
| Within the upper quartile      of companies                         |   |   | 100                                                              |   |
|                                                                     |        |        |                                                                  |        |
| Median company                                                      |   |   | 40                                                               |   |
|                                                                     |        |        |                                                                  |        |
| Between the median company      and the upper quartile of companies |   |   | Pro rata on a straight line      basis between these points      |   |
|                                                                     |        |        |                                                                  |        |
| Below the median company                                            |   |   | Nil                                                              |   |
|                                                                     |        |        |                                                                  |        |

|    |                                                                                                                                                                                                                                                                 |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **4.2** | The TSR of each member of the Comparator      Group at the end of the relevant Measurement Period shall be expressed as      a percentage of the relevant share price at the start of the Measurement      Period, calculated on the basis of cash flows as follows: |

|   |         |
|--------|--------------|
|   | Cash Inflows |

|   |   |                                                                                                                                                                                            |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | +      | the gross dividend (including      tax credit) per share paid during the Measurement Period (which shall be      deemed to have been paid on the day the relevant dividend becomes ex-dividend) |

|   |   |                                                                                                                                                   |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | +      | the closing mid-market      price of the relevant member’s shares during the calendar year ending      on the last day of the Measurement Period |

|   |               |   |
|--------|--------------------|--------|
|   | Cash      Outflows |

|   |   |                                                                                                                                                                     |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | -      | the average of the daily      closing mid-market prices of the relevant member’s shares during the      calendar year immediately preceding the Measurement Period |

|   |   |                                                                                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | -      | any sum paid per share      to take up any new right to shares (which shall be deemed to have been paid      on the day the rights become ex-rights) |
|   |   |                                                                                                                                                 |

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|   | subject to such adjustments to Cash Inflows or Cash Outflows as the Trustee after consultation with the Remuneration Committee considers appropriate to reflect any variation of share capital or any takeover, reconstruction or demerger of any member of the Comparator Group. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    |                                                                                                                                                                                                                                                                                                                                                                                |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **4.3** | The Trustee, after consultation with      the Remuneration Committee, and having regard to such factors as it considers      material, may determine in its absolute discretion that the percentage of      an Allocation which will be Transferred on the Transfer Date shall be varied      to such extent as it considers appropriate but not so as to exceed 100 per      cent. |
|    |                                                                                                                                                                                                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                |

| **5** | **Forfeiture** |
|-------|----------------|

|    |                                                |
|---------|-----------------------------------------------------|
| **5.1** | The Trustee shall forfeit an Allocation      where: |

|   |   |                                                                                                                                     |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | (A)    | the Participant purports      to assign, pledge, charge or otherwise dispose of his interest in an Allocation      contrary to Rule 3.4; |

|   |   |                                                                                           |
|--------|--------|------------------------------------------------------------------------------------------------|
|   | (B)    | the Participant is bankrupt,      unless or to the extent otherwise determined by the Trustee; |

|   |   |                                                                                                                                                                              |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (C)    | the Participant ceases      employment with a Member of the Group if the Remuneration Committee in its      absolute discretion determines that the Allocation should be forfeit. |

|    |                                                                                                                                                                                                                                                                                                 |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **5.2** | The Trustee shall forfeit an Allocation      to the extent that at the expiry of the Measurement Period (or any other      period over which performance is measured) the Company’s ranking for      the purposes of the Performance Target in Rule 4.1 is lower than the median      company. |

|    |                                                                                                                                                               |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **5.3** | To the extent an Allocation is forfeited,      the Shares comprised in the Allocation shall be held by the Trustee upon      the trusts of the General Trust Fund. |

|   |         |
|--------|--------------|
|   |         |
| **6**  | **Transfer** |

|    |                                                                                                                                                                                           |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **6.1** | Subject to the forfeiture of an Allocation      under Rule 5 above, an Allocation shall be Transferred at the time and to      the extent set out against each of the applicable events below: |
|    |                                                                                                                                                                                           |

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| ** ** | **Where the event occurs      during the relevant Measurement Period** | **Where the event occurs      following the relevant Measurement Period but before the First Transfer      Date** |
|------------|------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------|
|       |                                                                   |                                                                                                              |   |   |
|       | (a)                                                                    | Takeover or Reconstruction                                                                                        | As soon as practicable,      to the extent the Trustee may in its absolute discretion determine having      regard to the Company’s performance against the Performance Target      at the last Measurement Date prior to the Takeover or Reconstruction becoming      effective. | As soon as practicable,      to the extent of the Performance Target. |
|       |                                                                   |                                                                                                                   |   |   |
|       | (b)                                                                    | Cessation of employment with any Member      of the Group for any reason                                          | As soon as practicable following      such cessation, to the extent of the Company’s performance against      the Performance Target at the last Measurement Date prior to the date of      such cessation. | As soon as practicable,      to the extent of the Performance Target. |
|       |                                                                   |                                                                                                                   |   |   |

| **6.2** | Subject to Rule 6.1 above, an Allocation which has not previously been forfeited under Rule 5 above, shall be Transferred in the discretion of the Trustee to the extent of the Performance Target upon the First Transfer Date. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    |                                                                                                                                                                                                                                                                 |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **6.3** | Notwithstanding anything herein to the      contrary, the Trustee may always in whole or in part Transfer an Allocation      which has not previously been forfeited if it considers there are exceptional      circumstances which justify a Transfer at that time. |
|    |                                                                                                                                                                                                                                                                 |

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| **7**   | **PAYE** |
|---------|----------|
|    |     |
| **7.1** |     |
|    |     |

|   | (A) | The Trustee shall be obliged at the time of any transfer of Shares to transfer only such proportion of the Shares under the relevant Allocation as shall be determined as follows:- |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |       |
|--------|--------|------------|
|   |   | A – B |

|   |   | A |
|--------|--------|---|

|   |   | Where: |
|--------|--------|--------|

|   |   |                                                                                                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|
|   |   | A      is      the aggregate Relevant Value of the Shares comprised in the Allocation |

|   |   |   |                                                                                                                          |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   |   | B      | is the aggregate amount      of the PAYE liability arising as a result of the delivery of the Shares      to the Participant. |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)    | the Participant authorises      the Trustee to sell the proportion of the Shares which it is not obliged      to deliver to the Participant (the “**Retained Shares**”)      on the date on which those Shares would otherwise be delivered to the Participant;      and to remit the proceeds of sale of the Retained Shares to the Employing      Company in order to reimburse it for the PAYE liability arising upon the      delivery of the Shares to the Participant; |

|   |   |                                                                                                                                                                                                                                                                                       |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (C)    | the Participant authorises      the Employing Company to make any further adjustments through payroll to      ensure that the correct amount is reimbursed to the Employing Company in      respect of the PAYE liability arising upon the delivery of the Shares to      the Participant; |

|   |   |                                            |
|--------|--------|-------------------------------------------------|
|   | (D)    | all fractions of a Share      shall be ignored. |

|    |                                                                                                                                                                                     |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **7.2** | In Rule A above, “**Relevant      Value**” shall mean the market value of a Share determined in accordance      with Part VIII of the Taxation of Chargeable Gains Act 1992. |

|    |                                                                                                                                                                                                                               |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **7.3** | In Rule 7.1.(A) above, references to      “**PAYE liability**” shall include all tax deducted or national      insurance contributions paid by the Company or its Subsidiaries for and      on behalf of Participants. |

|   |                     |
|--------|--------------------------|
|   |                     |
| **8**  | **Variation of Capital** |

|   |                                                                                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In the event of a variation      of the Company’s capital by way of a capitalisation, rights issue,      consolidation, sub-division, split, reduction, reclassification or reduction      of Shares or reorganisation of the Company, the Trustee may make such adjustments      to Allocations as it may determine to be appropriate. |
|   |                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                          |

| **9**   | **Dividends** |
|---------|---------------|
|    |          |
| **9.1** |          |
|    |          |

|   | (A) | In respect of Shares held by the Trustee during the period from the end of the Measurement Period until the First Transfer Date and which, subject to its discretion to forfeit, it expects will be Transferred to a Participant on the First Transfer Date: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | (a)    | the Trustee shall apply the net amount      of dividends received (after paying all referable stamp duty, commission      and other charges) in acquiring such number of Shares as may be acquired      on the London Stock Exchange with such amount of monies (and similarly acquiring      further Shares with the net dividends received in respect of such Shares,      and so on and so forth); and |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                      |

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|   |   | (b) | the Trustee may in its absolute discretion (after consultation with the Remuneration Committee) Transfer such Shares to the Participant at the same time as the allocation of Shares in respect of which the dividend was paid PROVIDED THAT the relevant Participant shall not be beneficially entitled, prior to such date, to the Shares so Transferred. |
|--------|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)    | Subject to (A) above, any      dividends received by the Trustee, notwithstanding the waiver of dividends      under Clause 5 of the Trust Deed, may in the absolute discretion of the      Trustee, be paid or mandated to any Participant as it considers appropriate,      or held on the terms of the General Trust Fund. Notwithstanding anything      to the contrary, any Participant who receives a dividend shall not, as a      result, be beneficially interested in the Shares being held by the Trustee      in respect of which the dividend was paid. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

| **10** | **Regulatory Matters** |
|--------|------------------------|

|     |                                                                                                                                                                                                                                                                                                              |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **10.1** | Any Transfer of Shares hereunder shall      be subject to such consent, if any, of any authorities wherever situate,      as may from time to time be required and the Participant shall be responsible      for complying with the requirements of or to obtain or obviate the necessity      for such consents. |
|     |                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                              |

| **11** | **Administration and Amendment** |
|--------|----------------------------------|

|     |                                                                                                                                                                                                                                                                                                                                                       |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **11.1** | The Scheme shall in all respects be      administered by the Trustee which may after consultation with the Remuneration      Committee make such rules not being inconsistent with the terms and conditions      hereof for the conduct of the Scheme as it thinks fit provided that such      rules do not prejudice any existing rights of Participants. |
|     |                                                                                                                                                                                                                                                                                                                                                       |

| **11.2** | The Trustee may, after consultation with the Remuneration Committee, add to or alter the Scheme where it considers such addition or alteration is necessary or desirable in respect of a Member of the Group to take account of taxation considerations or other circumstances in any country in which it is incorporated or has a branch or representative office. |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|     |                                                                                                                                                                                                                                                       |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **11.3** | Any disputes regarding the interpretation      of the Rules or the terms of any Allocation shall be determined by the Trustee      (upon such advice as it shall consider necessary) and any decision in relation      thereto shall be final and binding. |

|     |                                   |
|----------|----------------------------------------|
| **11.4** | Participants shall not be entitled to: |

|   |   |                                                                  |
|--------|--------|-----------------------------------------------------------------------|
|   | (A)    | receive copies of accounts      or notices sent to holders of Shares; |

|   |   |                            |
|--------|--------|---------------------------------|
|   | (B)    | exercise voting rights;      or |

|   |   |              |
|--------|--------|-------------------|
|   | (C)    | receive dividends |

|   |                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------|
|   | in respect of Shares which      have not been transferred to such Participants pursuant to the Scheme. |

|     |                                                                                                           |
|----------|----------------------------------------------------------------------------------------------------------------|
| **11.5** | The Trustee shall not exercise any voting      rights in respect of Shares comprised in the Scheme Trust Fund. |
|     |                                                                                                           |

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| **11.6** | The Company may at any time terminate or suspend the Scheme but the interests of Participants in Allocated Shares shall not be prejudiced. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------|

|     |                                                                                                                                                                                                                                                                                                                                                                           |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **11.7** | Any notice or other communication under      or in connection with this Scheme may be given by the Trustee to Participants      personally or by post and to the Company or Member of the Group either personally      or by post to the Secretary of the Company. Items sent by post shall be      pre-paid and shall be deemed to have been received 72 hours after posting. |

|     |                                                                                                                                                                                                                                                                                                                                                                                    |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **11.8** | A Participant may renounce an Allocation      (in whole but not in part) by written notice to the Trustee and Remuneration      Committee to take effect from the date of receipt of such notice by the      Trustee. To the extent an Allocation is renounced, the Shares comprised      in the Allocation shall be held by the Trustee upon the trust of the General      Trust Fund. |
|     |                                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                                                                                                                                                                                                                                                                                                                                    |

| **12** | **Terms of Employment** |
|--------|-------------------------|

|     |                                                                                                                                                                                                                                              |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **12.1** | Nothing in the Scheme shall in any way      be construed as imposing upon any Member of the Group a contractual obligation      as between the Member of the Group and an employee to contribute or to continue      to contribute to the Scheme. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **12.2** | In no circumstances shall any person      who has ceased to be an employee of a Member of the Group by reason of dismissal      or otherwise howsoever or who is under notice of termination of his employment      be entitled to claim as against any Member of the Group or the Trustee any      compensation for or in respect of any consequential loss he may suffer by      reason of the operation of the terms of the Scheme or of the provisions      of any statute or law relating to taxation. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

| **13** | **Law** |
|--------|---------|

|   |                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   | The construction, validity      and performance of this Scheme shall be subject to and in accordance with      the provisions of English Law. |

It is hereby certified that this instrument falls within Category L in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987.

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**Comparator Group –  2000 Allocation**

| AWG                 | Pennon                  |
|---------------------|-------------------------|
|                     |                         |
| BAA                 | PowerGen                |
|                     |                         |
| British Energy      | Railtrack               |
|                     |                         |
| BT Group            | Scottish & Southern |
|                     |                         |
| Centrica            | Scottish Power          |
|                     |                         |
| International Power | Severn Trent            |
|                     |                         |
| Kelda               | Thames Water            |
|                     |                         |
| Lattice             | United Utilities        |
|                     |                         |
| National Grid       | Viridian                |
|                     |                         |

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**Comparator Group –  2001 Allocation**

| AWG                 | National Grid           |
|---------------------|-------------------------|
|                     |                         |
| BAA                 | Pennon                  |
|                     |                         |
| British Energy      | PowerGen                |
|                     |                         |
| BT Group            | Scottish & Southern |
|                     |                         |
| Centrica            | Scottish Power          |
|                     |                         |
| International Power | Severn Trent            |
|                     |                         |
| Kelda               | United Utilities        |
|                     |                         |
| Lattice             | Viridian                |
|                     |                         |

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**In Witness** whereof the parties hereto have affixed their common seals the day and year first above written.

|                                                                                           |   |   |
|------------------------------------------------------------------------------------------------|--------|--------|
| The      common seal of**LATTICE GROUP      PLC**was hereunto affixed      in the presence of: |   |   |
|                                                                                           |   |   |

| The      common seal of**MOURANT      & CO TRUSTEES LIMITED**was      hereunto affixed in the presence of: |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                           |   |   |

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**Table of Contents**

| **Contents** | **Page**                                                                             |
|--------------|--------------------------------------------------------------------------------------|
|         |                                                                                 |   |
| 1       | Definitions                                                                          |  1 |
|         |                                                                                 |   |
| 2            | General      Trusts                                                                  |  3 |
|         |                                                                                 |   |
| 3            | Scheme      Trust                                                                    |  4 |
|         |                                                                                 |   |
| 4            | Limit on      Trust Holding of Shares                                                |  5 |
|         |                                                                                 |   |
| 5            | Waiver      and Mandating of Dividends                                               | 5 |
|         |                                                                                 |   |
| 6            | Power to      give Indemnities                                                       | 5 |
|         |                                                                                 |   |
| 7            | Power to      Vary Administrative Provisions                                         | 6 |
|         |                                                                                 |   |
| 8            | Release      of Powers                                                               | 6 |
|         |                                                                                 |   |
| 9            | Power to      Receive Remuneration                                                   | 6 |
|         |                                                                                 |   |
| 10           | Trustee      not Bound to Interfere in Business of Company in which it is Interested | 6 |
|         |                                                                                 |   |
| 11           | Power      to Appoint Agents                                                         | 6 |
|         |                                                                                 |   |
| 12           | Power      to Permit Self-Dealing                                                    | 7 |
|         |                                                                                 |   |
| 13           | Trustees’      Indemnities and Charges                                         | 7 |
|         |                                                                                 |   |
| 14           | Trustee      Charging Clause                                                         | 8 |
|         |                                                                                 |   |
| 15           | Appointment      of Trustees                                                         | 8 |
|         |                                                                                 |   |
| 16           | Payment      of Liabilities and Insurance                                            | 9 |
|         |                                                                                 |   |
| 17           | Trust      Accounts                                                                  | 9 |
|         |                                                                                 |   |
| 18           | Trustee’s      Reliance on Information Provided by the Board                   | 9 |
|         |                                                                                 |   |

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| 19                      | Majority      Decision of Trustees                | 9      |
|-------------------------|---------------------------------------------------|--------|
|                    |                                              |   |
| 20                      | Proper      Law Forum and Place of Administration | 10     |
|                    |                                              |   |
| 21                      | Exclusion      Clause                             | 10     |
|                    |                                              |   |
| 22                      | Lien                                              | 10     |
|                    |                                              |   |
| 23                      | Perpetuity      Period                            | 11     |
|                    |                                              |   |
| 24                      | Irrevocability      of Trusts                     | 11     |
|                    |                                              |   |
| 25                      | Alterations                                       | 11     |
|                    |                                              |   |
| The First      Schedule | 12                                                |
|                    |                                              |   |
| **1**              | **Share      Option Schemes**                     | 12     |
|                    |                                              |   |
| **2**                   | **Other      Employees’ Share Schemes**     | 12     |
|                    |                                              |   |
| **3**                   | **Power      to Borrow**                          | 12     |
|                    |                                              |   |
| **4**                   | **Power      of Appropriation**                   | 12     |
|                    |                                              |   |
| **5**                   | **Power      to Vote**                            | 12     |
|                    |                                              |   |
| **6**                   | **Power      to Appoint Proxies**                 | 13     |
|                    |                                              |   |
| **7**                   | **Power      of Custody**                         | 13     |
|                    |                                              |   |
| **8**                   | **Delegation      of Bank Account Operation**     | 13     |
|                    |                                              |   |
| **9**                   | **Delegation      of Powers**                     | 13     |
|                    |                                              |   |
| **10**                  | **Power      to Pay Taxes**                       | 13     |
|                    |                                              |   |
| **11**                  | **Power      to Deduct PAYE**                     | 13     |
|                    |                                              |   |
| **12**                  | **Power      to Make Replacement Allocations**    | 14     |
|                    |                                              |   |

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| THE SECOND      SCHEDULE Rules of the Lattice Group Long Term Incentive Scheme | 15                                    |
|--------------------------------------------------------------------------------|---------------------------------------|
|                                                                           |                                  |   |
| **1**                                                                     | Interpretation      and Construction  | 15 |
|                                                                           |                                  |   |
| **2**                                                                     | **Scheme      Allocation Limits**     | 17 |
|                                                                           |                                  |   |
| **3**                                                                     | **Allocation      of Shares**         | 17 |
|                                                                           |                                  |   |
| **4**                                                                          | **Performance      Target**           | 18 |
|                                                                           |                                  |   |
| **5**                                                                          | **Forfeiture**                        | 19 |
|                                                                           |                                  |   |
| **6**                                                                          | **Transfer**                          | 19 |
|                                                                           |                                  |   |
| **7**                                                                          | **PAYE**                              | 21 |
|                                                                           |                                  |   |
| **8**                                                                          | **Variation      of Capital**         | 21 |
|                                                                           |                                  |   |
| **9**                                                                          | **Dividends**                         | 21 |
|                                                                           |                                  |   |
| **10**                                                                         | **Regulatory      Matters**           | 22 |
|                                                                           |                                  |   |
| **11**                                                                         | **Administration      and Amendment** | 22 |
|                                                                           |                                  |   |
| **12**                                                                         | **Terms      of Employment**          | 23 |
|                                                                           |                                  |   |
| **13**                                                                         | **Law**                               | 23 |
|                                                                           |                                  |   |
| THE THIRD      SCHEDULE                                                        |                                  |
|                                                                           |                                  |   |
| Comparator      Group – 2000 Allocation                                   | 24                                    |
|                                                                           |                                  |   |
| Comparator      Group – 2001 Allocation                                   | 25                                    |
|                                                                           |                                  |   |

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