<PAGE>   1
                                                                Exhibit 10.2



                                NTL INCORPORATED






--------------------------------------------------------------------------------
                                  RULES OF THE
                               NTL SHARESAVE PLAN
--------------------------------------------------------------------------------

                    Adopted by the Company on 28 October 1997
                       and approved by the Inland Revenue
                           under Schedule 9 ICTA 1988
                            on 16 January 1998 under
                            reference SRS 2073, with
                          further amendments adopted by
                         the Company on 3 February 1998
                       and approved by the Inland Revenue
                              on 10 February 1998.



                                  ERNST & YOUNG
                                  7 Rolls House
                                 Rolls Building
                                   Fetter Lane
                                LONDON, EC4A 1NH
                                Tel: 071-928-2000

              Final Approved Version/10.02.98/SXP.Client.NTL.Rules4
<PAGE>   2

                               NTL SHARESAVE PLAN

INDEX                                                              Clause Number
                                                                   -------------
DEFINITIONS AND INTERPRETATION                                           1
       Definitions                                                     1.1
       Interpretation                                                  1.2
       Statutory Provisions                                            1.3
       Clause Headings                                                 1.4
       Title                                                           1.5

INVITATIONS TO APPLY FOR OPTIONS                                         2
       Inland Revenue Approval                                         2.1
       Invitations                                                     2.2
       Form of Invitation                                              2.3
       Applications for Options                                        2.4

SCALING DOWN                                                             3
       Excess Procedure                                                3.1
       Modification                                                    3.2

GRANT OF OPTIONS                                                         4
       Grant                                                           4.1
       Grant Date                                                      4.2
       Acquisition Price                                               4.3

OPTION CERTIFICATES                                                      5
       Issue                                                           5.1
       Content                                                         5.2

RIGHTS TO EXERCISE OPTIONS                                               6
       Exercise Dates                                                  6.1
       Specified Age                                                   6.2
       Termination of Employment                                       6.3
       Material Interest                                               6.4
       Maximum Exercise                                                6.5
       Lapse of Rights                                                 6.6

EXERCISE OF OPTION                                                       7
       Notice                                                          7.1
       Allotment                                                       7.2
       Share Certificates                                              7.3
       Ranking of Shares                                               7.4
       Partial Exercise                                                7.5



<PAGE>   3



                               NTL SHARESAVE PLAN
INDEX                                                              Clause Number
                                                                   -------------

TAKEOVERS AND LIQUIDATIONS                                               8
       General Offers                                                  8.1
       Scheme of Reconstruction                                        8.2
       Compulsory Purchase                                             8.3
       Voluntary Winding Up                                            8.4
       Meaning of Control                                              8.5
       Manner of Exercise                                              8.6
       Rights to Exercise                                              8.7

EXCHANGE OF OPTIONS ON A TAKEOVER                                        9
       Replacement of Options                                          9.1
       Option Certificate                                              9.2
       No Immediate Exercise                                           9.3

VARIATION OF CAPITAL                                                    10
       Adjustment                                                     10.1
       Auditors' Confirmation                                         10.2
       Inland Revenue Approval                                        10.3
       Notice of Adjustment                                           10.4

ADMINISTRATION AND ALTERATION                                           11
       Discretion of the Board                                        11.1
       Board Decisions                                                11.2
       Amendments                                                     11.3
       Inland Revenue Consent                                         11.4
       Rights of Option holders                                       11.5
       Notice of Alteration                                           11.6
       Circulars                                                      11.7
       Cost                                                           11.8

GENERAL                                                                 12
       Availability of Shares                                         12.1
       Employment Rights                                              12.2
       Non-Admission                                                  12.3
       Consequence of Lapse                                           12.4
       Transfer, Assignment or Charge                                 12.5
       Termination                                                    12.6
       Status of Auditors                                             12.7
       Notices                                                        12.8
       Law                                                            12.9
<PAGE>   4

                                NTL Incorporated

                               NTL SHARESAVE PLAN

              Plan Rules approved under Section 185 and Schedule 9
                      Income and Corporation Taxes Act 1988


1.            DEFINITIONS AND INTERPRETATION

1.1           Definitions:                       In these Rules:-

              "Acquisition Price"                       means the price at which
                                                        each Share subject to an
                                                        Option may be acquired
                                                        on the exercise of that
                                                        Option determined
                                                        pursuant to sub-clause
                                                        4.3;

              "Approved Scheme"                         means a scheme
                                                        established by the
                                                        Company or by any
                                                        Associated Company and
                                                        approved by the Board of
                                                        Inland Revenue under
                                                        Paragraph 1 of Schedule
                                                        9;

              "Associated Company"                      bears the meaning  
                                                        ascribed to it in  
                                                        Paragraph 23 Schedule 9
                                                        by virtue of Section 187
                                                        (2) of the Taxes Act;

              "the Auditors"                            means the auditors of 
                                                        the Company for the time
                                                        being;

              "the Board"                               means the board of
                                                        directors of the Company
                                                        as from time to time
                                                        constituted or one or
                                                        more persons duly
                                                        appointed by such board
                                                        of directors and having
                                                        such powers as the board
                                                        may from time to time
                                                        decide;

              "Bonus Date"                              means either

                                                        (a)    where pursuant to
                                                               Clauses 2 and 3
                                                               the repayment
                                                               under the Savings
                                                               Contract is taken
                                                               as including the
                                                               Maximum Bonus,
                                                               the earliest date
                                                               on which the
                                                               Maximum Bonus is
                                                               payable; or

                                                        (b)    under a three
                                                               year Savings
                                                               Contract, the
                                                               earliest date on
                                                               which the Minimum
                                                               Bonus is payable
                                                               under the Savings
                                                               Contract; or
<PAGE>   5

                                                        (c)    under a five year
                                                               Savings Contract,
                                                               the earliest date
                                                               on which the
                                                               Standard Bonus is
                                                               payable under the
                                                               Savings Contract;

              "the Commencement Date"                   means the date on which
                                                        the Company receives
                                                        notice that the Plan has
                                                        been approved by the
                                                        Board of Inland Revenue
                                                        under Paragraph 1 of
                                                        Schedule 9 Provided That
                                                        the Plan has been
                                                        approved by the Company
                                                        in general meeting;

              "the Company"                             means NTL Incorporated 
                                                        of 110 East 59th  
                                                        Street,  New York, NY   
                                                        10022, USA;

              "Control"                                 bears the meaning 
                                                        ascribed to that term by
                                                        Section 840 of the 
                                                        Taxes Act;

              "Dealing Day"                             means any weekday
                                                        (excluding Saturday)
                                                        which is not a
                                                        statutory, public or
                                                        bank holiday in either
                                                        the United Kingdom or
                                                        the United States of
                                                        America;

              "Grant Date"                              means in relation to an
                                                        Option the date on which
                                                        the Option was or is to
                                                        be granted;

              "Grantor"                                 means the grantor of any
                                                        Option pursuant to 
                                                        Clause 4;

              "Invitee"                                 means a person to whom
                                                        the Board has issued an
                                                        invitation which is
                                                        subsisting to apply for
                                                        the grant of an Option;

              "Market Value"                            means the market value
                                                        of such Share determined
                                                        in accordance with the
                                                        provisions of Part VIII
                                                        of the Taxation of
                                                        Chargeable Gains Act
                                                        1992 and agreed for the
                                                        purposes of the Plan
                                                        with the Inland Revenue
                                                        Shares Valuation
                                                        Division on or before
                                                        the day the invitation
                                                        to apply for the Option
                                                        to acquire such Share
                                                        was issued pursuant to
                                                        Clause 2;
<PAGE>   6

              "Materially Interested Person"            means an employee or
                                                        director of any one or
                                                        more of the
                                                        Participating Companies
                                                        who at any relevant time
                                                        has, or within the
                                                        relevant preceding
                                                        twelve (12) months has
                                                        had, a material interest
                                                        (as defined in Section
                                                        187(3) of the Taxes Act)
                                                        in the Company or in a
                                                        company which has
                                                        Control of the Company
                                                        or which is a member of
                                                        a consortium which owns
                                                        the Company, if the
                                                        Company or any such
                                                        company is at any
                                                        relevant time a close
                                                        company for the purposes
                                                        of Paragraph 8 of
                                                        Schedule 9;

              "Maximum Bonus"                           means the bonus payable
                                                        under a seven (7) year
                                                        Savings Contract;

              "Maximum Contribution"                    means Two hundred and
                                                        Fifty Pounds
                                                        ((pound)250) per month
                                                        or (subject to
                                                        sub-clause 12.3) such
                                                        other amount as is, for
                                                        the time being, the
                                                        maximum Monthly
                                                        Contribution permitted
                                                        pursuant to Paragraph 24
                                                        of Schedule 9;

              "Minimum Bonus"                           means the bonus payable
                                                        under a three (3) year
                                                        Savings Contract;

              "Monthly Contribution"                    means the monthly
                                                        contribution to be paid
                                                        by an Option Holder
                                                        under his Savings
                                                        Contract;

              "Option"                                  means an option to
                                                        acquire Shares by
                                                        purchase or subscription
                                                        granted (whether by the
                                                        Company or a third
                                                        party) pursuant to the
                                                        Rules;

              "Option Certificate"                      means a certificate
                                                        recording the terms of
                                                        grant of an Option in
                                                        accordance with the
                                                        Rules;

              "Option Holder"                           means any person who
                                                        holds an Option or
                                                        (where the context
                                                        admits) his legal
                                                        personal
                                                        representative(s);

              "Option to Subscribe"                     means an Option which
                                                        confers a right to
                                                        subscribe for new Shares
                                                        pursuant to this Plan;
<PAGE>   7

              "Participating Company"                   means NTL (UK) Group,
                                                        Incorporated and any UK
                                                        resident company of
                                                        which NTL (UK) Group,
                                                        Incorporated has
                                                        Control, but excluding
                                                        any company which is for
                                                        the time being specified
                                                        by the Board as not
                                                        being a Participating
                                                        Company;

              "Qualifying Employee"                     means any person who is
                                                        not a Materially
                                                        Interested Person and
                                                        who:-

                                                        (a)    is an employee or
                                                               full-time
                                                               director of any
                                                               Participating
                                                               Company (and for
                                                               the purposes of
                                                               this definition a
                                                               director will be
                                                               regarded as
                                                               "full-time" if
                                                               his terms of
                                                               employment
                                                               require him to
                                                               devote to the
                                                               duties of his
                                                               office not less
                                                               than twenty five
                                                               (25) hours per
                                                               week (excluding
                                                               meal breaks); and

                                                        (b)    on the the date
                                                               of issue of the
                                                               relevant
                                                               invitations
                                                               pursuant to
                                                               Clause 2 had been
                                                               such an employee
                                                               or director for
                                                               at least six (6)
                                                               months or such
                                                               other period
                                                               specified from
                                                               time to time by
                                                               the Board (which
                                                               shall not exceed
                                                               a period of five
                                                               years ending on
                                                               the date of grant
                                                               of the Option;
                                                               and

                                                        (c)    is chargeable to
                                                               tax in respect of
                                                               his office or
                                                               employment under
                                                               Case I of
                                                               Schedule E

                                                        and any other employee
                                                        or full-time director of
                                                        any Participating
                                                        Company nominated by the
                                                        Board to be a Qualifying
                                                        Employee;

              "the Rules"                               means these rules as
                                                        from time to time
                                                        amended;

              "Savings Contract"                        means a contract under a
                                                        certified contractual
                                                        savings scheme, within
                                                        the meaning of Section
                                                        326 of the Taxes Act and
                                                        which has been approved
                                                        by the Commissioners of
                                                        Inland Revenue for the
                                                        purposes of Schedule 9;


              "Schedule 9"                              means Schedule 9 to the
                                                        Taxes Act;
<PAGE>   8

              "the Plan"                                means this Plan as from
                                                        time to time constituted
                                                        by the Rules;

              "Share"                                   means fully paid
                                                        irredeemable Common
                                                        Stock of $0.01 per share
                                                        in the capital of the
                                                        Company which complies
                                                        with Paragraphs 10 to 14
                                                        of Schedule 9;

              "Specified Age"                           means sixty (60) years
                                                        of age;

              "Standard Bonus"                          means the bonus payable
                                                        under a five (5) year
                                                        Savings Contract;

              "Subsidiary"                              means a subsidiary of
                                                        the Company within the
                                                        meaning of Section 736
                                                        of the Companies Act
                                                        1985;

              "Subsisting Option"                       mean an Option or Option
              and "Subsisting Option                    to Subscribe (as the    
              to Subscribe"                             case may be) then       
                                                        capable of being        
                                                        exercised which has     
                                                        neither lapsed nor been 
                                                        exercised;              

              "Taxes Act"                               means the Income and
                                                        Corporation Taxes Act
                                                        1988.


1.2   Interpretation: Where the context so admits the singular includes the
      plural and each gender includes each other gender.

1.3   Statutory Provisions: Any reference to a statutory provision is to be
      construed as a reference to that provision as for the time being amended
      or re-enacted.

1.4   Clause headings shall be ignored in interpretation.

1.5   Title: The Plan shall be entitled and referred to as the "NTL Sharesave
      Plan".

2.    INVITATIONS TO APPLY FOR OPTIONS

2.1.  Inland Revenue Approval: No invitations to apply for Options under the
      Plan may be made until this Plan becomes an Approved Scheme.

2.2   Invitations: Subject to sub-clauses 2.1 and 4.3, on such dates as it may
      from time to time resolve the Board shall invite every Qualifying Employee
      to apply for the grant of Options Provided That before issuing invitations
      the Board may on any occasion place a limit on the number of Shares to be
      made available on that occasion such number to be published upon issue of
      the invitations.

2.3   Form of Invitation: Each invitation shall be in writing and shall:-
<PAGE>   9

      (a)   state the date on which it is issued;

      (b)   specify a date not earlier than fourteen (14) days after the date on
            which it was issued by which an application must be received and in
            default of which it will lapse;

      (c)   invite the Invitee to apply for an Option;

      (d)   specify the Acquisition Price at which each Share may be acquired on
            the exercise of an Option granted pursuant to the invitation;

      (e)   specify the maximum Monthly Contribution the Invitee may propose to
            save which shall be in multiples of one pound ((pound)1) and shall
            not be greater than the lesser of the Maximum Contribution and such
            sum (being a multiple of one pound ((pound)1) and not less than five
            pounds ((pound)5) as the Board decides shall apply to every
            Qualifying Employee in respect of that invitation;

      (f)   otherwise, be in such form as the Board may from time to time
            prescribe.

2.4   Applications for Options:

2.4.1 Time: Within the time allowed in the invitation as the last date for
      receipt of the application, each Invitee may apply for the grant of an
      Option

2.4.2 Form: Each invitation shall be accompanied by a proposal form for a
      Savings Contract and an application form which shall provide for the
      Invitee to state:-

      (a)   his proposed Monthly Contribution (being a multiple of one pound
            ((pound)1) and not less than five pounds ((pound)5)); and

      (b)   that his proposed Monthly Contribution when added to any monthly
            savings contributions then being made by him under any other Savings
            Contracts will not exceed the maximum specified in Paragraph 24 of
            Schedule 9; and

      (c)   whether for the purpose of determining the number of Shares over
            which an Option is to be granted the repayment under the Savings
            Contract is to be taken as including the Maximum Bonus, the Standard
            Bonus, the Minimum Bonus or no bonus; and

      (d)   that he authorises the Board to enter on the Savings Contract
            proposal form such Monthly Contribution not exceeding the maximum
            stated on the application form as shall be determined pursuant to
            Clause 3.

2.4.3 Shares: Each application shall be deemed to be for an Option over the
      largest whole number of Shares which can be bought at the US dollar
      Acquisition Price with the expected repayment under the related Savings
      Contract at the appropriate Bonus Date following the conversion of the
      repayment into US dollars.
<PAGE>   10

2.4.4 Consideration: No amount shall be payable in respect of the grant of an
      Option.


3.    SCALING DOWN

3.1   Excess Procedure: where the Board in its discretion considers that it is
      desirable to limit the number of Shares in respect of which Options are
      granted in relation to any invitation Options shall be granted to each
      Qualifying Employee in respect of that number of Shares which shall be
      determined by reducing the monthly savings contribution chosen by each
      applicant under the Savings Contract in such manner as the Board shall, in
      its discretion, determine (provided that all Qualifying Employees shall be
      treated on a similar basis without regard to differences among Qualifying
      Employees in respect of remuneration, length of service or any other
      factor); imposing a new maximum Monthly Contribution on all Qualifying
      Employees; or replacing the Maximum Bonus with the Standard Bonus or
      eliminating the Maximum Standard and/or the Minimum Bonus so as to reduce
      the aggregate number of Shares applied for to or as near to as shall be
      practicable without exceeding the said limitation.

3.2   Modification: Each application shall be deemed to have been modified or
      withdrawn in accordance with the application of sub-clause 3.1 and the
      Board shall complete each Savings Contract proposal form to reflect any
      resultant reduction in Monthly Contribution.


4.    GRANT OF OPTIONS

4.1   Grant: The Board shall grant or procure the grant to each applicant who is
      still a Qualifying Employee and is not precluded from participating in
      this Plan by Paragraph 8 of Schedule 9 an Option over the number of Shares
      for which pursuant to sub-clause 2.4.3 and subject to Clause 3 he shall be
      deemed to have applied.

4.2   Grant Date: Any Option to be granted shall be granted as soon as the Board
      deems practicable following the date stated on the relevant invitation as
      being the date of its expiry Provided That the Grant Date shall not in any
      circumstances be more than thirty (30) days after the date on which the
      Market Value of the Shares to be subject to the Option was determined.

4.3   Acquisition Price: Subject to Clause 10, the price at which each Share
      subject to an Option may be acquired on the exercise of that Option shall
      be:-

      (a)   in the case of an Option to Subscribe, not less than the greater of
            the nominal value of such Share and its Market Value on the Dealing
            Day immediately preceding the day the Invitation is issued; and
<PAGE>   11

      (b)   in any other case not less than its Market Value and subject thereto
            shall be such sum as the Grantor shall decide and cause to be stated
            in that behalf in the relevant Option Certificate.


5.    OPTION CERTIFICATES

5.1   Issue: As soon as is practicable after having granted an Option to a
      Qualifying Employee, the Grantor shall issue to him a duly executed Option
      Certificate in respect of such Option.

5.2   Content: The Option Certificate shall:-

      (a)   state the Grant Date of the Option;

      (b)   state the expected number of Shares subject to the Option being such
            number of shares as the repayment under the Savings Contract can
            acquire following conversion of the repayment into US dollars;

      (c)   state the Acquisition Price payable for each Share under the Option;

      (d)   refer the holder to the provisions of sub-clause 12.5; and

      (e)   subject to these conditions, be in such form as the Board may from
            time to time prescribe.


6.    RIGHTS TO EXERCISE OPTIONS

6.1   Exercise Dates: Except as otherwise provided in this Plan any Subsisting
      Option may be exercised in whole or in part only after the earliest of the
      following events:-

      (a)   the relevant Bonus Date;

      (b)   the death of the Option Holder;

      (c)   the Option Holder ceasing to be a director or employee of any
            Participating Company by reason of:-

            (i)   injury or disability (evidenced to the satisfaction of the
                  Board);

            (ii)  redundancy within the meaning of the Employment Rights Act
                  1996; or

            (iii) retirement on reaching the Specified Age or any other age at
                  which he is bound to retire in accordance with the terms of
                  his contract of employment;
<PAGE>   12

      (d)   the Option Holder ceasing to be a director or employee of any
            Participating Company by reason only that:-

            (i)   that office or employment is in a company of which the Company
                  ceases to have Control; or

            (ii)  that office or employment relates to a business or part of a
                  business which is transferred to a person other than a
                  Participating Company;

      (e)   the relevant Bonus Date where an Option Holder holds an office or
            employment in a company which is not a Participating Company but
            which is:-

            (i)   an associated company of the Grantor within the meaning of
                  Section 416 of the Taxes Act; or

            (ii)  a company of which the Grantor has Control;

      the Option Holder may exercise his Option within six (6) months of such
      date.

6.2   Specified Age: If an Option Holder continues to be employed by a
      Participating Company after the date on which he reaches the Specified Age
      he may excercise any Subsisting Option within six months following that
      date

6.3   Termination of Employment: No person shall be treated for the purposes of
      this clause as ceasing to be employed by any Participating Company until
      he ceases to hold an office or employment in the Company or any Associated
      Company or company of which the Company has Control.

6.4   Material Interest: No Option may be exercised by an individual at any time
      when he is a Materially Interested Person or by the personal
      representative of an individual who at the date of his death was a
      Materially Interested Person.

6.5   Maximum Exercise: The number of Shares over which an Option may be
      exercised may not exceed the number of Shares which may be purchased with
      the sum obtained by way of repayment under the related Savings Contract
      excluding the repayment of any Monthly Contribution the due date for
      payment of which falls more than one month after the date on which
      repayment is made.

6.6   Lapse of Rights: An Option shall lapse and cease to be exercisable on the
      earliest of the following events:-

      (a)   except where the Option Holder has died, on the expiry of six (6)
            months following the Bonus Date;
<PAGE>   13

      (b)   where the Option Holder has died during the six (6) months following
            the Bonus Date, on the first anniversary of the Bonus Date;

      (c)   where the Option Holder has died before the Bonus Date, on the first
            anniversary of his death;

      (d)   unless the Option Holder has died, on the expiry of six (6) months
            after the Option has become exercisable by virtue of sub-clause
            6.1(c);

      (e)   on the expiry of six (6) months after the Option has become
            exercisable by virtue of sub-clause 6.1(d) to (e) inclusive or
            (subject to a release being effected pursuant to sub-clause 9.1) by
            virtue of Clause 8;

      (f)   the Option Holder ceasing to be a director or employee of any
            Participating Company in circumstances in which the Option does not
            become exercisable;

      (g)   the date on which a resolution is passed or an order is made by the
            Court for the compulsory winding up of the Company;

      (h)   upon the Option Holder, before the Option has become exercisable:-

            (i)   giving notice or being deemed to have given notice under the
                  Savings Contract that he intends to stop paying Monthly
                  Contributions; or

            (ii)  making an application for repayment of the related Savings
                  Contract;

      (i)   the date on which the Option Holder does or omits to do anything as
            a result of which he ceases to be the legal and beneficial owner of
            the Option;

      (j)   the date on which the Option Holder is adjudicated bankrupt.


7.    EXERCISE OF OPTION

7.1   Notice: Subject to Clause 6, an Option may be exercised by the Option
      Holder or as the case may be his personal representative giving notice to
      the Company, the Grantor or such other person as shall be specified in the
      notice of exercise in writing of the number of Shares in respect of which
      he wishes to exercise the Option accompanied by the appropriate payment
      (which shall not exceed the sum obtained by way of repayment under the
      related Savings Contract) and the relevant Option Certificate and shall be
      effective on the date of its receipt by the Company, the Grantor or such
      other person as shall be specified in the notice of exercise. The Notice
      exercising the Option shall be given in such form and manner, not
      inconsistent with these Rules, as the Board or (as the case may be) the
      Grantor may determine. In respect of Options granted otherwise than by the
      Company any such
<PAGE>   14

      notice (or remittance enclosed therewith) shall be received by the Company
      for and on behalf of the Grantor.

7.2   Allotment: Subject to the Rules, within twenty-eight (28) days following
      receipt of a notice constituting a valid exercise of an Option and
      complying with the provisions of sub-clause 7.1 and the appropriate
      remittance the Grantor shall allot issue or transfer or (as the case may
      be) cause to be allotted, issued or transferred to the Option holder or
      (as the case may be) his personal representatives the Shares the subject
      of such notice.

7.3   Share Certificates: As soon as reasonably practicable after such allotment
      or transfer of Shares under the Plan, the Company shall issue to such
      Option Holder or his personal representatives a definitive share
      certificate in respect of the Shares so allotted or transferred.

7.4   Ranking of Shares: Save for any rights determined by reference to a date
      preceding the date of allotment or transfer, the Shares so issued or
      transferred shall rank pari passu with the other shares of the same class
      in issue at the date of allotment or transfer and carry all rights
      attaching thereto at that date.

7.5   Partial Exercise: When an Option is exercised only in part it shall lapse
      to the extent of the unexercised balance.

8.    TAKEOVERS AND LIQUIDATIONS

8.1   General Offers: If any person (either alone or together with any person
      acting in concert with him) obtains Control of the Company or having such
      Control makes a general offer to acquire all the Shares of the Company
      (other than those which are already owned by him and/or any person acting
      in concert with him) then, notwithstanding any other provision of the
      Rules but subject to sub-clauses 6.4 and 9.1, any Subsisting Option may be
      exercised within six (6) months of the time when the person making the
      offer has obtained Control of the Company and any condition subject to
      which the offer is made has been satisfied.


8.2   Scheme of Reconstruction: If under Section 425 of the Companies Act 1985
      the court sanctions a compromise or arrangement between the Company and
      its members proposed for the purposes of, or in connection with, a scheme
      for the reconstruction of the Company or its amalgamation with any other
      company or companies, then:-

      (a)   each Participant may exercise his Option at any time and from time
            to time in the period starting with the date upon which the
            compromise or arrangement is sanctioned by the court and ending with
            the earlier of the date upon which it becomes effective and the date
            which is six months after the date on which it is sanctioned; and
<PAGE>   15

      (b)   upon the compromise or arrangement becoming effective, all Options
            shall, subject to Rule 9, lapse.

8.3   Compulsory Purchase: If any person becomes bound or entitled to acquire
      Shares in the Company under Section 428 to 430F of the Companies Act 1985,
      any Subsisting Option (subject to sub-clauses 6.4 and 9.1) may be
      exercised at any time while that person remains so bound or entitled.

8.4   Voluntary Winding-Up: Subject to sub-clause 6.4 if the Company passes a
      resolution for voluntary winding up, any Subsisting Option may be
      exercised within six (6) months of the passing of the resolution.

8.5   Meaning of Control and Concert in sub-clause 8.1: For the purposes of
      sub-clause 8.1 (and only for such purpose):-

      (a)   a person shall be deemed to have obtained Control of the Company if
            he and others acting in concert with him have together obtained
            Control of the Company;

      (b)   persons acting in concert comprise persons who, pursuant to an
            agreement or understanding (whether formal or informal), actively
            co-operate, through the acquisition by any of them of shares in the
            Company, to obtain or consolidate Control of the Company.

8.6   Manner of Exercise: The exercise of an Option pursuant to the preceding
      provisions of this clause shall be subject to the provisions of Clause 7.

8.7   Rights to Exercise: For the avoidance of doubt, an Option may only be
      exercised pursuant to this clause on a date on which it remains a
      Subsisting Option.


9.    EXCHANGE OF OPTIONS ON A TAKEOVER

9.1   Replacement of Options: If any company ("the Acquiring Company") obtains
      Control of the Company, or becomes bound or entitled to acquire shares in
      the Company within any of the sets of circumstances specified in
      Paragraphs 15(1)(a) (b) or (c) of Schedule 9, any Option holder may at any
      time within the appropriate period (as defined in Paragraph 15(2) of
      Schedule 9) by agreement with the Acquiring Company release his option
      ("the Old Option") in consideration of the grant to him of an option ("the
      New Option") which:-

      (a)   relates to shares in a different company (whether the Acquiring
            Company itself or some other company which on the assumption that
            the Acquiring Company were the grantor would be a company falling
            within Paragraph 10(b) or (c) of Schedule 9);
<PAGE>   16

      (b)   is a right to acquire such number of such shares as has on
            acquisition of the New Option an aggregate Market Value equal to the
            aggregate Market Value of the Shares subject to the Old Option on
            its release;

      (c)   has an acquisition price per Share such that the aggregate price
            payable on complete exercise equals the aggregate Acquisition Price
            which would have been payable on complete exercise of the Old
            Option;

      (d)   is otherwise equivalent to the Old Option (as defined in Paragraph
            15(3) of Schedule 9).

      The New Option shall, for all other purposes of this Plan, be treated as
      having been acquired at the same time as the Old Option for which it is
      released and, following release of the Old Option and the grant of the New
      Option, for the purposes of applying Rules 6, 7, 8, 9, 10 and 12 thereto:-

      (i)   "Company" and "Shares" in relation to the New Option shall be
            construed as if references to the Company and to the Shares were
            references to the Acquiring Company and to shares in the Acquiring
            Company or (as the case may be) to the other company to whose shares
            the New Options relate and to the shares in the other company
            whether the Acquiring Company itself or some other company falling
            within Paragraph 10(b) or 10(c) of Schedule 9 but for the purpose of
            "Participating Company" the Company shall continue to be NTL
            Incorporated.

      (ii)  "Board" shall mean the board of directors of that company or a duly
            constituted committee thereof.

9.2   Option Certificate: Upon grant of the New Option, a new Option Certificate
      shall be issued accordingly and the Third and Fourth Schedules shall be
      amended mutatis mutandis;

9.3   No Immediate Exercise: For the avoidance of doubt where in accordance with
      sub-clause 9.1 Subsisting Options are released and New Options granted,
      the New Options shall not be exercisable in accordance with sub-clauses
      8.1 to 8.3 by virtue of the event on which the New Options were granted.


10.   VARIATION OF CAPITAL

10.1  Adjustment: Subject as provided in sub-clauses 10.2 and 10.3, in the event
      of any capitalisation issue, rights issue, sub-division, consolidation or
      reduction of share capital, or any other variation in the share capital of
      the Company the Board and (as appropriate) the Grantor may make such
      adjustment as shall be fair and reasonable in all the circumstance to:-

      (a)   the number or nominal value of Shares comprised in any Option;
            and/or

<PAGE>   17

      (b)   the Acquisition Price payable for Shares subject to any Option.

      Provided Always That the Acquisition Price payable on subscription for new
      Shares shall never be less than the nominal value of the Share to which it
      relates, the aggregate amount payable on the exercise of an Option in full
      shall not thereby be increased and no adjustment shall cause any of the
      conditions of the approval of the Plan under Schedule 9 to be thereby
      breached.

10.2  Auditors' Confirmation: Except in the case of a capitalisation issue no
      adjustment under sub-clause 10.1 shall take effect without prior
      confirmation in writing by the Auditors that the adjustment is in their
      opinion fair and reasonable in all the circumstances.

10.3  Inland Revenue Approval: No adjustment under sub-clause 10.1 shall take
      effect without prior confirmation in writing by the Board of the Inland
      Revenue approving such proposed adjustment.

10.4  Notice of Adjustment: As soon as reasonably practicable after making any
      adjustment under sub-clause 10.1 the Board and (as appropriate) the
      Grantor shall give notice in writing to every Option Holder thereby
      affected specifying the adjustments made insofar as they affect him and
      (subject to sub-clauses 10.2 and 10.3) such notice shall be binding upon
      the Option Holder in the absence of manifest error Provided That where
      pursuant to Paragraphs 10.1(b) or 10.1(c) an adjustment is made to the
      terms of an Option prior to the issue of an Option Certificate pursuant to
      sub-clause 5.1, the certificate shall set out details of the Option as so
      adjusted and shall be deemed to be sufficient notice of the adjustment for
      the purpose of this sub-clause.


11.   ADMINISTRATION AND ALTERATION

11.1  Discretion of the Board: The Board shall have power from time to time to
      make and vary such regulations (not being inconsistent with the Rules) for
      the implementation and administration of this Plan.

11.2  Board Decisions: Save in respect matters to be confirmed by the Auditors
      in accordance with these Rules, the decision of the Board shall be final
      and binding in all matters relating to this Plan, any dispute or
      disagreement as to the interpretation of the Plan or of any rule,
      regulation or procedure or as to any question of right arising out of or
      in respect of the Plan.

11.3  Amendments: Subject to sub-clause 11.4, this Plan may be amended in any
      respect by resolution of the Board PROVIDED THAT no amendment shall take
      effect which would cause this Plan to cease to be an Approved Scheme.

11.4  Inland Revenue Consent: No amendment to these Rules shall have effect
      unless and until approved by the Board of the Inland Revenue.
<PAGE>   18

11.5  Rights of Option Holders: No amendments shall be made to the Plan which
      would have the effect of abrogating or prejudicially affecting any of the
      subsisting rights of Option Holders except with such consent on their part
      as would be required by provisions of the Company's Certificate of
      Incorporation if the Shares to be issued on the exercise of the Options
      were so issued and constituted a separate class of share capital and if
      such provisions applied mutatis mutandis thereto.

11.6  Notice of Alteration: As soon as reasonably practicable after making any
      alteration or addition under this clause the Board shall give notice in
      writing thereof to any Option Holder who is thereby affected.

11.7  Circulars: The Company shall not be obliged to provide Qualifying
      Employees or Option Holders with copies of any notices, circulars or other
      documents sent to shareholders of the Company.

11.8  Cost: The cost of establishing and operating the Plan shall be borne by
      such of the Participating Companies and in such proportions as the Board
      shall determine.

12.   GENERAL

12.1  Availability of Shares: The Company shall at all times ensure there are
      sufficient Shares available to satisfy the exercise to the full extent
      still possible of all Subsisting Options whether by issue of new Shares or
      the transfer of exisiting Shares, taking account of any other obligations
      of the Company to issue unissued Shares and of the availability of
      existing unissued Shares.

12.2  Employment Rights:

12.2.1 Effect of Participation:

      This Plan shall not form part of any contract of employment between any
      Participating Company and any employee of any such company and the rights
      and obligations of any individual under the terms of his office or
      employment with the Company or any Participating Company shall not be
      affected by his participation in the Plan or any right which he may have
      to participate therein.

12.2.2 Effect of Loss of Office:

      Participation in the Plan shall be on the express condition that:-

      (i)   neither it nor cessation of participation shall afford any
            individual under the terms of his office or employment with the
            Company or any Participating Company any additional or other rights
            to compensation or damage; and
<PAGE>   19

      (ii)  no damages or compensation shall be payable in consequence of the
            termination of such office or employment or for any other reason
            whatsoever to compensate him for the loss or any right he would
            otherwise have had (actual or prospective) under the Plan howsoever
            arising but for such termination; and

      (iii) by applying for an Option he shall be deemed irrevocably to have
            waived any such rights to which he may otherwise have been entitled.

12.3  Non-Admission: No Qualifying Employee shall have any claim against a
      Participating Company arising out of his not being admitted to
      participation in the Plan if the Qualifying Employee's participation in
      the Plan is entirely within the discretion of the Board.

12.4  Consequence of Lapse: No Option Holder shall be entitled to claim
      compensation from any Participating Company or the Grantor of any Option
      to acquire Shares in respect of any sums paid by him pursuant to the Plan
      or of any diminution or extinction of his rights or benefits (actual or
      otherwise) under any Option held by him consequent upon the lapse for any
      reason of any Option held by him or otherwise in connection with the Plan
      and the Company and each Participating Company shall be entirely free to
      conduct its affairs as it sees fit without regard to any consequences
      under, upon or in relation to the Plan or any Option or Option Holder.

12.5  Transfer, Assignment or Charge: All Options granted to Qualifying
      Employees are personal rights which cannot be transferred, assigned or
      charged in any circumstances whatsoever save as set out in sub-clause 10.1
      and any purported transfer, assignment or charge (save as aforesaid) shall
      cause the Option to lapse forthwith.

12.6  Termination: The Board may terminate the Plan at any time but Options
      granted prior to such termination shall continue to be valid and
      exercisable in accordance with the Rules, which shall continue to apply
      thereto.

12.7  Status of Auditors: In any matter in which they are required to act under
      the Plan, the Auditors shall act as experts and not as arbitrators and
      their determination of the matter referred to them shall be final and
      conclusive.

12.8  Notices: Any notice or other communication required to be given pursuant
      to the terms of the Plan shall be sent:-

      (a)   in the case of any Participating Company, by personal delivery or by
            first-class post to such company at its registered office and shall
            be effective upon receipt;
<PAGE>   20

      (b)   in any other case, by personal delivery or by delivering or sending
            the same by first-class post to the addressee's address last know to
            the Company or the address of the place of business from which he
            performs the whole or substantially the whole of his duties of his
            office or employment (and notice to the personal representatives of
            a deceased Option holder shall be effective if given personally or
            if left at or sent by first class post addressed to the Option
            holder and delivered or sent by post accordingly) and where such
            notice or other communication is given by post it shall be deemed to
            have been received no later than forty-eight (48) hours after it was
            put into the post properly addressed and stamped.

12.9  Law: The Plan and all Options shall be governed by and construed in
      accordance with English law.