Exhibit
4.10 


 


Novartis
AG


 


Deferred
Share Bonus Plan


 


Adopted
by the Board of Directors on January 22, 2014 and amended on January 1, 2021 with effect in relation to awards made on or after
that date


 






     


     


    

 


Contents


 


	NOVARTIS
    AG DEFERRED SHARE BONUS PLAN	2
	 	 
	1.	PURPOSE OF THE PLAN	2
	 	 
	2.	DETERMINATION OF DEFERRED SHARE BONUS AWARDS	2
	 	 
	3.	DIVIDENDS AND DIVIDEND EQUIVALENTS	3
	 	 
	4.	VESTING OF DEFERRED SHARE BONUS AWARDS	4
	 	 
	5.	LAPSE OR FORFEITURE OF DEFERRED SHARE BONUS AWARDS	6
	 	 
	6.	CESSATION OF EMPLOYMENT	6
	 	 
	7.	CORPORATE EVENTS	7
	 	 
	8.	PARTICIPANT RIGHTS AND OBLIGATIONS	8
	 	 
	9.	CLAWBACK	8
	 	 
	10.	TAX, SOCIAL SECURITY AND OTHER CHARGES	9
	 	 
	11.	TRANSFER OF DEFERRED SHARE BONUS AWARDS	9
	 	 
	12.	COMPANY DOCUMENTS	9
	 	 
	13.	BOARD’S POWERS	9
	 	 
	14.	ADMINISTRATION AND REGULATIONS	9
	 	 
	15.	AWARDS NOT PENSIONABLE ETC.	10
	 	 
	16.	NOTICES	10
	 	 
	17.	DATA PROTECTION	10
	 	 
	18.	SCHEDULES TO THE PLAN	10
	 	 
	19.	AMENDMENT AND TERMINATION OF THE PLAN	10
	 	 
	20.	COMPLIANCE WITH LAW AND ARTICLES OF INCORPORATION	11
	 	 
	21.	APPLICABLE LAW	11
	 	 
	22.	DEFINITIONS AND INTERPRETATION	12
	 	 
	SCHEDULE
    1  PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN	16
	 	 
	1.	APPLICATION OF THIS SCHEDULE	16
	 	 
	2.	DEFINITIONS	16
	 	 
	3.	LAPSE OR FORFEITURE OF DEFERRED SHARE BONUS AWARDS	16
	 	 
	4.	CESSATION OF EMPLOYMENT – INTRODUCTION	16
	 	 
	5.	LEAVING IN SPECIAL CIRCUMSTANCES	16


 


 






     


     


    

 


	SCHEDULE
    2  UNITED STATES	18
	 	 
	1.	APPLICATION OF THIS SCHEDULE	18
	 	 
	2.	GRANT OF DEFERRED SHARE BONUS AWARDS – SHARES
SUBJECT TO THE PLAN	18
	 	 
	3.	DEFINTIONS	18
	 	 
	4.	STOCK APPRECIATION RIGHTS	18
	 	 
	5.	CONSEQUENCES OF VESTING – RESTRICTED STOCK UNITS	20
	 	 
	6.	CORPORATE EVENTS	20
	 	 
	7.	CODE SECTION 409A	20
	 	 
	8.	US EXECUTIVE FINANCIAL RECOUPMENT PROGRAM	21
	 	 
	SCHEDULE
    3 RETENTION SHARE BONUS AWARDS	22
	 	 
	1.	APPLICATION OF THIS SCHEDULE	22
	 	 
	2.	DEFINITIONS	22
	 	 
	3.	DETERMINATION OF RETENTION SHARE BONUS AWARD	22
	 	 
	4.	DETERMINING THE NUMBER OF SHARES OR ADIS SUBJECT TO
A RETENTION SHARE BONUS AWARD	22
	 	 
	5.	TIMING OF RETENTION SHARE BONUS AWARDS	23
	 	 
	6.	VESTING OF RETENTION SHARE BONUS AWARDS	23
	 	 
	7.	LEAVING IN SPECIAL CIRCUMSTANCES - RETENTION SHARE BONUS
AWARDS	24
	 	 
	8.	CHANGE OF CONTROL PRIOR TO THE VESTING DATE - RETENTION
SHARE BONUS AWARDS	25


 






     


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NOVARTIS
AG DEFERRED SHARE BONUS PLAN


 


		1.	Purpose
                                         of the Plan



 


The
purpose of the Plan is to retain Eligible Employees.


 


		2.	Determination
                                         of Deferred Share Bonus Awards



 


		2.1	General



 


The
Board may determine that a proportion of the gross amount payable in respect of an Annual Incentive Award will be provided to
the Participant in the form of a Compulsory Deferred Share Bonus Award.


 


		2.2	Voluntary
                                         Deferred Share Bonus Awards



 


A
Participant may, subject to completing such documentation as the Board may specify from time to time within the time limits specified
by the Board, decide to receive up to all of any payment (in increments as determined by the Board) in connection with an Annual
Incentive Award (other than that part of the Award that is subject to a Compulsory Deferred Share bonus Award) in the form of
a Voluntary Deferred Share Bonus Award.


 


		2.3	Decisions
                                         relating to Deferred Share Bonus Awards



 


In
respect of any Deferred Share Bonus Award, the Board shall determine:


 


		(a)	whether
                                         the Deferred Share Bonus Award is in respect of Restricted Stock, Restricted Stock Units
                                         or SARs;



 


		(b)	where
                                         relevant, whether the Deferred Share Bonus Award is in respect of Shares or ADIs;



 


		(c)	whether
                                         or not the Deferred Share Bonus Award will carry Dividend Equivalents and, if so, the
                                         form of such Dividend Equivalents;



 


		(d)	the
                                         latest date by which the Participant must complete a form of acceptance of a Deferred
                                         Share Bonus Award;



 


		(e)	if
                                         the Deferred Share Bonus Award is a SAR, the base value from which the growth in value
                                         is to be measured;



 


		(f)	if
                                         the Deferred Share Bonus Award does not comprise Restricted Stock, Restricted Stock Units
                                         or SARs, the form, terms and conditions of any such Deferred Share Bonus Award;



 


		(h)	the
                                         number of Shares, ADIs or notional shares in the case of SARs to be subject or linked
                                         to the Deferred Share Bonus Award (see Rule 2.4 below);



 


		(i)	the
                                         Vesting Date or Vesting Dates and any conditions to which the Award is subject;



 


		(j)	whether
                                         the Participant is required to sell sufficient Shares to meet Taxation;



 


		(k)	which,
                                         if any, Schedules to the Plan will apply to the Award.






 






     


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		2.4	Determining
                                         the number of Shares or ADIs subject to a Deferred Share Bonus Award



 


In
order to determine the number of Shares or ADIs subject or linked to a Deferred Share Bonus Award, the Board shall:


 


		(a)	divide
                                         the relevant cash sum by the Market Value of a Share or ADI (as appropriate) as at the
                                         date immediately preceding the Grant Date and then, where necessary, round up to the
                                         nearest whole Share or ADI; or



 


		(b)	apply
                                         such other method as the Board may determine from time to time.



 


		2.5	Timing
of Deferred Share Bonus Awards



 


Subject
to any Dealing Restrictions which prevent Deferred Share Bonus Awards being granted, the Board shall grant such Compulsory Deferred
Share Bonus Awards and Voluntary Share Bonus Awards as soon as practicable within the first Grant Period following the expiry
of the Performance Period applicable to an Annual Incentive Award.


 


		3.	Dividends
                                         and Dividend Equivalents



 


		3.1	Restricted
Stock Units and SARs



 


A
Participant holding a Deferred Share Bonus Award of Restricted Stock Units or SARs shall not be entitled to vote, to receive dividends
or to have any other rights of a shareholder in respect of such an Award unless and until the Shares comprising the Award are
transferred to or acquired by the Participant.


 


		3.2	Restricted
Stock



 


The
Board in relation to a Deferred Share Bonus Award of Restricted Stock may determine that the Participant must agree to surrender
or waive any right to vote, receive dividends or any other rights of a shareholder in respect of such Award.


 


		3.3	Dividend
Equivalents



 


If
the Board determines that a Deferred Share Bonus Award carries Dividend Equivalents:


 


		(a)	unless
                                         the Board decides otherwise, the number of Shares (or notional Shares if the Deferred
                                         Share Bonus Award is a SAR) subject to the Deferred Share Bonus Award will be increased
                                         by the number of Shares which could have been acquired by the reinvestment in the purchase
                                         of Shares (at the market value of a Share on each relevant dividend payment date) of
                                         dividends payable between the Grant Date and the Vesting Date on that number of Shares
                                         (or notional Shares) subject to the Deferred Share Bonus Award that Vests; or



 


		(b)	if
                                         the Board decides that Dividend Equivalents would not be on a notional reinvestment basis
                                         as described in Rule 3.3(a), as soon as practicable after the time a Deferred Share Bonus
                                         Award vests in full (and Shares are transferred or acquired or cash is paid to the Participant)
                                         the Company shall pay to the Participant (in cash or Shares) (subject to all applicable
                                         tax and social security deductions) an amount equal to the aggregate dividends which
                                         would have been paid on the Deferred Share Bonus Award (including in respect of notional
                                         Shares for Deferred Share Bonus Awards that are SARs) between the Grant Date and the
                                         Vesting Date; or



 


		(c)	the
                                         Board may decide that the Dividend Equivalents may be calculated on any other basis.






 






     


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For
the avoidance of doubt, the amount of a dividend, for these purposes is the amount of the gross dividend before taxes.


 


For
the purposes of this Rule 3, “market value” shall be determined by the Board on each relevant occasion.


 


A
Participant is not entitled to receive Dividend Equivalents with respect to the time period between the Vesting Date and the date
that the relevant Shares are transferred to or acquired by him or payment in respect of the Deferred Share Bonus Award is made.


 


		4.	Vesting
                                         of Deferred Share Bonus Awards



 


		4.1	General



 


Vesting
of Deferred Share Bonus Awards under the Plan, transfer of Shares or ADIs or payment of cash is subject to any Rules or law that
may require otherwise, including Rule 4.5 (dealing restrictions), Rule 4.7 (delivery of Shares or ADIs to a deposit account),
Rule 5 (lapse or forfeiture of Awards) and Rule 9 (clawback).


 


		4.2	Normal
Vesting



 


Subject
to the exceptions set out in these Rules, Deferred
Share Bonus Awards shall Vest on the Vesting Date.


 


		4.3	Consequences
of Vesting – Restricted Stock Units



 


As
soon as practicable after the Vesting Date the Company shall transfer the number of Shares (or pay a cash sum if the Board has
determined that the RSU is to be settled in cash) in respect of which the Deferred Share Bonus Award has Vested to the Participant.


 


		4.4	Consequences
of Vesting – Restricted Stock



 


On
the Vesting Date the restrictions applicable to the relevant Restricted Stock under the Plan shall cease to apply to the extent
such Restricted Stock Vests.


 


		4.5	Dealing
Restrictions



 


If
the Vesting of a Deferred Share Bonus Award is prevented on any date by a Dealing Restriction, the Deferred Share Bonus Award
shall Vest on the first day it is not so prevented.


 


If
the transfer of Shares or ADIs (or payment of cash) on or following the Vesting Date is prevented by a Dealing Restriction, the
period for such transfer or payment shall start from the first date on which it is no longer so prevented.


 


Shares
received by a Participant on or following the Vesting Date may be subject to Dealing Restrictions. Subject to any such restrictions,
a Participant may sell (or may be required to do so) a sufficient number of such Shares to meet Taxation (as defined in Rule 10
(tax, social security and other charges)).


 


		4.6	Fractional
entitlements






 






     


    5


    

 


Any
fractional number of Shares which arises for any reason under the Plan shall be aggregated as at the Vesting Date and rounded
up to the nearest whole Share (or, in the case of a SAR, notional Share), unless the Board determines otherwise.


 


4.7          Delivery
of Shares or ADIs to a deposit account


 


Subject to Board determination otherwise,
all Shares and ADRs transferred to Participants under the Plan shall be transferred to and registered in one single securities
account (Securities Deposit Account) held in trust by such service provider as is nominated from time to time by the Company.


 


If a Participant Ceases Employment, the
Participant must dispose of or if possible transfer from the Securities Deposit Account to a private securities account all of
the Shares or ADIs managed by the service provider within the period three months. If that is not done, the service provider will
sell all of the Shares at market value without delay on behalf of the Participant or the Participant’s successor and transfer
the proceeds less costs of sale to the Participant’s last known salary account and such transfer is in full and final satisfaction.


 


If a Participant Ceases Employment of
the Group due to death, the period within which the Participant’s personal representative or successor in title must dispose
of or transfer the Shares is 12 months or such longer period as the Board may determine.


 


If the Company’s contract with the
service provider for administration of the Plan ends in circumstances where the Plan continues, the Company will make arrangements
for appropriate services to be provided by another service provider that the Company shall instruct at its sole discretion. In
such circumstances, each Participant must give all notices and take all steps necessary to end the trust or custody agreement
with the old service provider and appoint a new service provider.


 


The procedures specified above may be
altered and other procedures established by the Board.


 


4.8          Lock-In
Period


 


Subject to Rule 4.9, the Board may determine
or a Participant may elect at any time (in such form as the Board requires) that Shares or ADIs transferred or to be transferred
to him under the Plan are or will be held in the Securities Deposit Account for a fixed period of time (the “Lock-In
Period”) during which time such a Participant may not alienate such Shares or ADIs or create any security interest in
or encumbrance on such Shares except as may be necessary for the proper administration of the Plan.


 


During the Lock-In Period, the participant
is entitled without restriction to the dividend and voting rights associated with the Shares or ADIs the Participant acquired.


 


4.9          Cash,
Share and ADI alternatives


 


The Board may decide to satisfy a Deferred
Share Bonus Award (including any Dividend Equivalents) by:


  


		(a)	paying the Participant a sum equal
                                         to the market value (as determined by the Board) of the number of Shares that would otherwise
                                         have been transferred to the Participant following the Vesting of that Deferred Share
                                         Bonus Award; or






 






     


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		(b)	delivering to the Participant ADIs
                                         with a value equal to the market value of the number of Shares that would otherwise have
                                         been transferred to the Participant following the Vesting of that Deferred Share Bonus
                                         Award.



 


5.           
Lapse or forfeiture of Deferred Share Bonus Awards


 


Subject to Board determination otherwise,
Deferred Share Bonus Awards lapse or in the case of Restricted Stock are forfeit on the earlier of the occurrence of any event
described in the Rules resulting in forfeiture or lapse of a Deferred Bonus Share Award, including under Rule 6 (Cessation
of Employment) and Rule 7 (Corporate events).


 


6.          
Cessation of Employment


 


6.1         Introduction


 


This Rule 6 applies where a Participant
Ceases Employment.


 


Notwithstanding any other part of this
Rule 6, the Board may, in its discretion with no obligation to do so, allow (on such terms as the Board decides) a greater proportion
of a Deferred Share Bonus Award to Vest and/or to accelerate the time at which Vesting occurs.


 


In the event that Compulsory Deferred
Share Bonus Awards are outstanding pursuant to Rule 6.3 and the Participant dies prior to the Vesting of those Awards, then Rule
6.4 shall apply.


 


6.2          General


 


Unless Rules 6.3, 6.4 or 6.6 apply, a
Deferred Share Bonus Award (or any proportion of a Deferred Share Bonus Award) that has not Vested will lapse or be forfeit on
the day the Participant Ceases Employment


 


6.3          Leaving
in special circumstances – Compulsory Deferred Share Bonus Awards


 


If a Participant Ceases Employment because
of:


 


		(a)	Retirement with the agreement of
                                         the Participant’s employer;



 


		(b)	termination of employment by the
                                         Participant’s employer (whether or not by notice) other than for misconduct or
                                         poor performance



 


		(c)	his employer ceasing to be a member
                                         of the Group;



 


		(d)	the business for which the Participant
                                         works is transferred to a person which or who is not a member of the Group; or



 


		(e)	any other reason if the Board so
                                         decides,



 


his Compulsory Deferred Share Bonus Award
shall Vest on the Vesting Date provided that the Board may determine in the case of leaving for reasons set out in Rule 6.3(d)
or Rule 6.3(e) that some or all of the Awards held by relevant Participants shall be exchanged in accordance with Rule 7.2 (exchange
of awards).


   


		6.4	Cessation of Employment as a result
                                         of death or disability – Compulsory Deferred Share Bonus Awards



 


If a Participant Ceases Employment as
a result of his death or disability then Compulsory Deferred Share Bonus Awards held by that Participant shall Vest immediately
on such cessation.





  






     


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		6.5	Lapse or forfeiture of Compulsory
                                         Deferred Share Bonus Awards on joining a Competitor



 


Where Rule 6.3 applies such that Compulsory
Deferred Bonus Awards are retained by the Participant following Cessation of Employment, in the event that the Participant, in
the period commencing on such cessation and ending immediately following the relevant Vesting Date becomes an employee or director
of (or otherwise provides services to) a Competitor then Compulsory Deferred Share Bonus Awards held by that Participant shall
immediately lapse (or on the case of Restricted Stock shall be immediately forfeited).


 


6.6          Cessation
of Employment – Voluntary Deferred Share Bonus Awards


 


If a Participant Ceases Employment for
any reason his Voluntary Deferred Share Bonus Awards shall Vest immediately on such cessation.


 


6.7          Assignments
and Transfers


 


If a Participant is sent on an international
assignment or is transferred to another entity within the Group this will not be considered as Ceasing Employment under the Plan.
The treatment of assignments and transfers is subject to the rules of the “Internal Transfer Policy for Shareplans”.


 


7.          
Corporate events


 


7.1         Change
of Control prior to the Vesting Date


 


(a)          Compulsory
Deferred Share Bonus Awards


 


If a Change of Control occurs
or is anticipated to occur prior to the Vesting Date of a Compulsory Deferred Share Bonus Award then each such Award shall Vest
on the Change of Control or at such earlier point as the Board shall determine.


   


Alternatively, the Board may
determine that some or all Deferred Share Bonus Awards will be automatically exchanged under Rule 7.2 or may allow Participants
to choose Vesting and/or exchange.


 


(b)         Voluntary
Deferred Share Bonus Awards


 


If a Change of Control occurs
or is anticipated to occur prior to the Vesting Date of a Voluntary Deferred Share Bonus Award then each such Award shall Vest
on the Change of Control or at such earlier point as the Board shall determine.


 


7.2         Exchange
of Deferred Share Bonus Awards


 


If a Deferred Share Bonus Award is exchanged,
then:





 






     


    8


    

 


		(a)	the exchanged award will be in respect
                                         of or by reference to shares in any company determined by the company offering the exchange;



 


		(b)	the exchanged award shall have equivalent
                                         terms to those of the Deferred Share Bonus Award that was exchanged;



 


		(c)	the exchanged award will be subject
                                         to the Plan as it had effect in relation to the old Deferred Share Bonus Award immediately
                                         before the exchange;



 


		(d)	with effect from the exchange, the
                                         Rules will apply as if references to Shares are references to shares over which the exchanged
                                         award has been granted;



 


		(e)	the Rules shall apply with such other
                                         adjustments as the Board may decide.



 


7.3          Demerger,
variations of share capital and other corporate events


 


If the Board becomes aware that the Company
is or is expected to be affected by any variation of share capital, rights issue, sub-division, consolidation or reduction of
share capital, demerger, distribution (other than an ordinary dividend), liquidation or other event (other than a Change of Control)
which, in the opinion of the Board, could affect the current or future value of Shares, the Board may:


 


		(a)	adjust Deferred Share Bonus Awards
                                         in such manner as it considers appropriate;



 


		(b)	allow Deferred Share Bonus Awards
                                         (for all or some Participants) to Vest in whole or in part, subject to any conditions
                                         that the Board may impose;



 


		(c)	require some or all Deferred Share
                                         Bonus Awards to be exchanged under Rule 7.2.



 


8.          
Participant rights and obligations


 


The rights and obligations of a Participant
under the terms of his or her office, employment or contract are not affected by becoming a Participant. These Rules do not form
part of, and will not be incorporated into, any contract between a Participant and any member of the Group.


 


Participants do not have any right to
continued employment with the Group as a result of participating in the Plan, nor are they entitled to any compensation or damages
if any benefit under the Plan is reduced or cancelled as a result of applying the Rules.


 


Nothing in this Plan confers any benefit,
right or expectation on a person who is not an Eligible Employee or a Participant.


 


9.          
Clawback


 


Participants must adhere at all times
to applicable laws, the Articles, the Company’s organisational regulations, the Code of Ethics, and all applicable Company,
Group or Employer policies, procedures and guidelines. If, in the reasonable opinion of the Board, a Participant fails to comply
with any such laws, Articles, regulations, Code of Ethics, policies, procedures and/or guidelines in all material respects then
the Board may determine that:


 


		(a)	all or any of a Deferred Share Bonus
                                         Award (whether Vested or unvested) held by the Participant will lapse or be forfeit;



 


		(b)	all or any amount of cash received
                                         (on a gross basis) under any Deferred Share Bonus Award be paid to the Company (or such
                                         other member of the Group as the Board may determine);









 






     


    9


    

 


		(c)	all or any of a Participant’s
                                         Shares or ADIs transferred to him under the Plan following the Vesting of Deferred Share
                                         Bonus Awards will be forfeit and must be transferred to the Company; and



 


		(d)	the Participant must pay the Company
                                         (or such other member of the Group as the Board may determine) gross proceeds from the
                                         sale of some or all of the Shares or ADIs transferred to him following the Vesting of
                                         Deferred Share Bonus Awards.



 


10.        
Tax, social security and other charges


 


The Participant indemnifies each member
of the Group against all taxes, social security contributions and other levies for which he is responsible that arise in connection
with any Deferred Share Bonus Award (together “Taxation”).


 


The Company and any employer may make
such arrangements it considers necessary to meet any liability to pay or account for Taxation (including selling sufficient Shares
to meet such liability and accounting for the proceeds of sale to the Company or the Participant’s employer or making deductions
from any cash sum payable to the Participant). The Participant will promptly do all things necessary to facilitate any such arrangements
and payment of cash. Vesting and the transfer of Shares to him can be delayed until he does so.


 


11.        
Transfer of Deferred Share Bonus Awards


 


Unless specifically permitted under the
Plan or with the prior written consent of the Board, Deferred Share Bonus Awards or any rights in respect of any such Awards may
not be transferred, assigned or otherwise disposed of. If Deferred Share Bonus Awards (or any rights in respect of Deferred Share
Bonus Awards) are transferred, assigned or otherwise disposed of or if the Participant becomes bankrupt they shall lapse or be
forfeit immediately.


 


12.        
Company documents


 


The Company may (but need not) send to
any Participant any documents which the Company sends to its shareholders.


 


13.        
Board’s powers


 


The exercise of any power or discretion,
including refraining from exercise, of the Board concerning the Plan or any Award is absolute and unlimited and may be reasonably
exercised at any time, subject always to the principle of good faith. When the Board exercises any of its powers or discretions
in a way that will impact a Participant, the Board may (but need not) inform the relevant Participant in such manner as the Board
shall determine.


 


Any decision of the Board in connection
with the Plan, the interpretation of the Plan and any related documents and in connection with any dispute relating to the Plan
will be final and binding.


 


14.        
Administration and regulations


 


14.1       The
Plan shall be administered by the Board.


 


		14.2	The Board may make and vary regulations
                                         and policies for the administration and operation of the Plan.









 






     


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15.         
awards not pensionable etc.


 


For the avoidance of doubt, any growth
in value from the Grant Date of Deferred Share Bonus Awards under the Plan (or the Shares or ADIs comprising such Awards) is not
pensionable and does not count in relation to the calculation of benefit under programmes such as life cover, income protection
or continuation, medical or such other benefits as the Board may determine.


 


16.         
Notices


 


Any notice or other communication under
or in connection with the Plan may be given:


 


		(a)	by the Company to an Eligible Employee
                                         or Participant either personally or sent to him at his place of work by electronic mail
                                         or other electronic means (including the internet or the intranet) or by post addressed
                                         to the address last known to the Company (including any address supplied by the relevant
                                         member of the Group) or sent through the Company's internal postal service; and



 


(b)          to
the Company, either personally or by post to the Company secretary.


 


Items sent by post shall be pre-paid and
shall be deemed to have been received 72 hours after posting. Items sent by electronic mail or other electronic means shall be
deemed to have been received at the expiration of 24 hours from when they were sent.


 


The Board may decide the accept notices
given by Participants if received after any time stipulated for receipt.


 


17.         
Data protection


 


Each Participant agrees to the receipt,
holding and processing of information in connection with a Deferred Share Bonus Award and the general administration of the Plan
by the Company and any other member of the Group and any of their advisers or agents and to the transmission of any such information
outside of the European Economic Area (including, without limitation, to Switzerland and to the United States of America). Each
Participant acknowledges that the EU Commission considers that the United States of America (and various other jurisdictions)
do not have adequate data protection laws.


 


18.         
Schedules to the plan


 


The Board may establish such schedules
to the Rules as it considers necessary or appropriate. Such schedules may be included in the Plan so as to apply special rules
to categories of Eligible Employees and/or to constitute sub-plans to the Plan for Eligible Employees outside Switzerland.


 


19.         
Amendment and termination of the plan


 


The Board may at any time change the Plan
(including amending or adding schedules to the Plan) in any way. Changes may affect Deferred Share Bonus Awards already granted
provided always that, unless the change is required by law, no such change may be made which is to the material disadvantage of
a Participant without that Participant’s prior written consent.


 


The Board shall give notice of any changes
to any Participant.








 






     


    11


    

  


The Board may terminate the Plan at any
time. Termination will not affect existing Deferred Share Bonus Awards.


 


20.        
Compliance with law and articles of incorporation


 


20.1       Compliance
with Law etc


 


The Plan is subject to all applicable
laws and the Company’s Articles. If such law or the Articles require, the terms of any provision of the Plan and any Award
(including any outstanding Award) shall be interpreted and/or amended and applied to the extent required to comply fully with
such law or the Articles.


 


20.2       Minder
Initiative


 


The Plan, in particular, is subject to
any mandatory provisions of Swiss law pertaining to compensation of governing bodies derived from article 95 paragraph 3 of the
Swiss Federal Constitution (the “Minder Initiative”). Any interpretation and/or amendment necessary in respect
of any provision of the Plan or any Award as a result of applicable law and/or the Articles to the detriment of the Participant
shall not give rise to any claims by or other rights whatsoever of the Participant. This applies in particular if the annual general
meeting of the Company does not approve the compensation of the Participant which is subject to approval under the Minder Initiative.


 


20.3       US
Code Section 409A


 


If a Participant (other than a Participant
whose benefits are provided under the United States Schedule) is subject to the United States Internal Revenue Code (“US
Code”) (a “US Participant”), and if benefits under this Plan for such US Participant are not exempt
from US Code Section 409A, it is intended that to the maximum extent permitted under all applicable law this Plan will be interpreted
and administered to conform to the requirements of US Code Section 409A as they apply to such US Participant.


 


20.4       Voluntary
Participation


 


By accepting any award or grant of securities
under this Plan, Participants shall be deemed to represent and warrant to the Company that such Participant’s participation
in the trade and acceptance of such securities is voluntary and that such Participant has not been induced to participate by expectation
of engagement, appointment, employment or continued engagement, appointment or employment, as applicable.


 


21.         
Applicable law


 


The Plan is governed by and construed
in accordance with the laws of Switzerland, under express exclusion of any provisions of conflict of laws.


 


The Board may resolve conclusively all
questions of fact or interpretation concerning the Plan and has the authority to resolve any dispute of any kind that arises under
or in connection with the Plan. In the event a dispute escalates to require resolution by a court, the dispute will exclusively
be resolved by the Courts of Basel, Switzerland.








 






     


    12


    

  


22.         
Definitions and interpretation


 


In this Plan, unless otherwise required
by the Rules:


 


22.1       Definitions


 


ADIs
means American depositary instruments being either American Depositary Shares or American Depositary Receipts of the
Company as specified in the Grant Notice.


 


Annual Incentive Award means an
award or rights to participate under the Annual Incentive Plan or any other annual bonus arrangement as the Board shall determine.


 


Annual
Incentive Plan means the rules of a cash based incentive plan established by the Board on January 22, 2014 which operates
in conjunction with the Plan.


 


Articles
means the articles of incorporation of the Company as amended from time to time.


 


Award
means a Deferred Share Bonus Award.


 


Board
means the Company’s Board of Directors or, to the extent permitted by applicable law, the Board’s delegate
or, following a Change of Control, those persons who comprised the Board immediately prior to such Change of Control.


 


Cessation
of Employment occurs, for the purposes of the Plan, when a Participant ceases to hold an office or employment with
any member of the Group PROVIDED THAT a Participant will not be treated as Ceasing Employment in circumstances in which that Participant
is on a leave of absence where the Participant’s right to re-employment is guaranteed either by statute or contract and
employment is not otherwise terminated during such leave of absence (in which case the participant will Cease Employment at the
time of such termination) and similar terms, such as “Ceases Employment” or “Ceasing to be Employed”,
shall be construed accordingly.


 


Change
of Control means any of the following:


 


		(a)	any person or group of persons who
                                         are acting together purchases or otherwise becomes the beneficial owner or has the right
                                         to acquire such beneficial ownership (whether or not such right is exercisable immediately
                                         or subject to passage of time or other conditions) of voting securities representing
                                         more than 50% of the combined voting power of all outstanding securities of the Company;



 


		(b)	the Company’s shareholders
                                         approve an agreement to merge or consolidate the Company with or into another corporation
                                         as a result of which less than 50% of the outstanding voting securities of the surviving
                                         or resulting entity are or will be owned by the former shareholders of the Company;



 


		(c)	the shareholders of the Company approve
                                         the sale of all or substantially all of the Company’s business and/or assets to
                                         a person or entity which is not a member of the Group,



 


provided that an Internal Reorganisation
shall not be a Change of Control.


 


Competitor
has the same meaning as under the Novartis AG Long Term Incentive Plan.








 






     


    13


    

 


Compulsory
Deferred Share Bonus Award means a Deferred Share Bonus Award which the Participant must accept in respect of his Annual
Incentive Award (or part thereof).


 


Company
means Novartis AG.


 


Dealing
Day means a day on which the Swiss Exchange (SIX) or, in relation to ADIs, the national securities exchange in the
US on which ADIs are listed, is open for business.


 


Dealing
Restrictions means restrictions on the dealing in Shares or the grant of Awards imposed by any law, regulation or Code
of Practice (including the Novartis Global Insider Trading Policy, as amended or replaced from time to time) or otherwise.


 


Deferred
Share Bonus Award means an award under the Plan (and includes both Compulsory and Voluntary Deferred Share Bonus Awards).


 


Determination
Date means the date after the Performance Period has ended on which the Board determines whether (and to what extent)
a cash amount is payable to a Participant under the Annual Incentive Plan having regard to the relevant Performance Targets.


 


Dividend
Equivalents means a right to cash or Shares as described in Rule 3.


 


Eligible
Employee means any member of the Executive Committee and the Corporate Executive Group or any employee or group of
employees of the Group as the Board shall determine.


 


Grant
Date means the date a Deferred Share Bonus Award (as the context requires) is made.


 


Grant
Notice means a grant notice provided to a Participant in accordance with the Rules.


 


Grant
Period means the period of 42 days commencing:


 


		(a)	the Dealing Day immediately following
                                         the day on which the Company announces results for any period;



 


		(b)	the day on which the Company’s
                                         annual general meeting is held;



 


		(c)	any day on which the Board resolves
                                         that exceptional circumstances exist which justify the making of an Award.



 


Group
means the Company, all its direct and indirect subsidiaries and any other entity determined by the Board to be a member
of the group for the purposes of the Plan.


 


Internal
Reorganisation means any event, offer, scheme, share purchase, merger or arrangement whereby:


 


		(a)	a Change of Control occurs; and



 


		(b)	immediately afterwards the share
                                         capital of the company then controlling (whether directly or indirectly) the Company
                                         is owned substantially by the same persons who were shareholders of the Company immediately
                                         prior to such event, scheme or arrangement in substantially the same proportions.



 


Lock-In
Period has the meaning set out in Rule 4.8.








 






     


    14


    

 


Market
Value means in relation to a Share or ADI (as appropriate) on any given day:


 


		(a)	if the Shares are admitted to trading
                                         on the Swiss Exchange (SIX) an amount equal to the closing price on that day (or if there
                                         is no such price on that day the last preceding day for which such price is available);



 


		(b)	if the ADIs are listed on a national
                                         securities exchange in the US an amount equal to the closing price on that day (or if
                                         there is no such price on that day the last preceding day for which such price is available);



 


		(c)	if the Shares are not admitted to
                                         trading on the Swiss Exchange (SIX) or the ADIs are not are listed on a national securities
                                         exchange in the US, then such value as is determined by the Board.



 


Participant
means an Eligible Employee who is selected by the Board to participate in the Plan and is employed by the Group at
the Grant Date.


 


Plan
means the Novartis AG Deferred Share Bonus Plan.


 


Restricted
Stock means an award of Shares subject to restrictions in accordance with the Plan.


 


Restricted
Stock Units means a right to receive Shares or cash under the Plan (but subject to Rule 4.9 (cash and ADI alternative)).


 


Retirement
means the Cessation of Employment after having attained retirement age according to applicable local law, if any, in
the Participant’s country of employment, or early retirement according to local laws as approved by the employing entity;
or at discretion of the Board of Directors the Cessation of Employment as a result of a mutual agreement (as approved by the employing
entity) with immediate receipt of a retirement benefit.


 


Rules
mean the rules of the Plan (including all Schedules).


 


Schedule
means a schedule to the Rules.


 


Service
means the period of continuous employment with the Group ending with the relevant Cessation of Employment for the purposes
of the Plan PROVIDED ALWAYS THAT the Board may determine that prior periods of employment with the Group and/or periods of employment
with entities outside the Group (but which are subsequently acquired by the Group) may be taken into account.


 


Share
means a registered share of the Company with a par value of CHF -.50 or in the case of SARs, notional Shares.


 


Stock
Appreciation Rights or SARs means an award under the Plan, the future value of which is based on the increase
in the value of Shares (from the base value set by the Board at the time an Award is made) which notionally comprises each SAR
from the relevant Grant Date.


 


Vesting
means:


 


		(a)	in the case of Restricted Stock Units,
                                         a Participant being entitled to receive Shares or cash;









 






     


    15


    

 


		(b)	in the case of Restricted Stock,
                                         restrictions under the Plan ceasing to apply;



 


		(c)	in the case of SARs, a Participant
                                         being entitled to receive a cash sum based on the growth in value of the notional Shares
                                         comprising the Deferred Share Bonus Award,



 


and “Vest” shall be
construed accordingly.


 


Vesting
Date means the date an Award vests as determined by the Board and specified in the Grant Notice or otherwise as required
under the Rules.


 


Vesting
Period means the period between the date on which an Award is granted and the Vesting Date.


 


Voluntary
Deferred Share Bonus Award means a Deferred Share Bonus Award which is made as a result of the Participant voluntarily
electing to receive his Annual Incentive Award (or part thereof) in the form of an award under this Plan.


  


22.2       Interpretation


 


Unless the context requires otherwise: words importing the
singular include the plural and vice versa; the word “includes” is not a word of limitation; the masculine includes
the feminine and vice versa, headings and boldings are for convenience only and do not affect the interpretation of these Rules.








 



     


    16


    




 


SCHEDULE 1

PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN


 


1.           
Application of this Schedule


 


This Schedule shall apply to:


 


		(a)	Deferred Share Bonus Awards granted
                                         to any Participant who at the relevant Grant Date is a member of the ECN; and



 


		(b)	Deferred Share Bonus Awards granted
                                         to any Participant who, after the relevant Grant Date, becomes a member of the ECN.



 


Where this Schedule applies relevant Deferred
Share Bonus Awards shall be subject to all the provisions of the Novartis AG Deferred Share Bonus Plan save as modified below.


 


2.           
Definitions


 


For the purposes of this Schedule the
following definition shall apply:


 


“ECN” means
the Executive Committee of Novartis AG (including permanent attendees to that committee).“


 


“Retirement”
means the Cessation of Employment after:


 


		(a)	having attained age 58 or older,
                                         or



 


		(b)	in respect of those Participants
                                         who satisfied the Rule of 60 at December 31, 2015, having attained 55 or older and having
                                         completed as at least 10 years of Service.



 


“Rule of 60”
the sum of the Participant’s age plus Service being equal to 60 or more. For the purposes of this definition the Participant’s
age and his Service shall be whole calendar years as at December 31, 2015.


 


3.           
Lapse or forfeiture of Deferred Share Bonus Awards


 


The words “Subject to Board determination
otherwise,” at the start of Rule 5 shall not apply.


 


4.           
Cessation of Employment – introduction


 


The second paragraph of Rule 6.1 shall
not apply.


 


5.           
Leaving in special circumstances


 


		5.1	Rule 6.3(f) shall not apply.



 


		5.2	Immediately following Rule 6.3 the following shall be
added as Rule 6.3A:



 


“In determining whether
to approve Retirement under Rule 6.3(a), the Board shall take into consideration the Participant’s satisfaction of certain
conditions, including:





 






     


    17


    

 


		(a)	whether the Participant is
                                         leaving the Group in good standing and not for cause (for example because of dishonesty,
                                         misconduct, gross negligence, violation of this employer’s code of ethics or similar
                                         reason);



 


		(b)	whether the Participant has
                                         returned to his employer all company property in his possession at his termination;



 


		(c)	whether the Participant has
                                         cooperated with his employer in the orderly handover and transition of his duties and
                                         responsibilities prior to his date of termination;



 


		(d)	whether the Participant has given
                                         his written commitment that for one year following his termination he will not work for
                                         a Competitor and he will refrain from soliciting other employees of the Group to terminate
                                         their employment; and



 


		(e)	whether the Participant has
                                         affirmed his obligation not to disclose confidential information he received during his
                                         employment with the Group and to refrain from using any such information for any purpose
                                         not in Group’s business interests.”







 









     


    18


    

 


SCHEDULE
2

UNITED STATES


 


1.           
Application of this Schedule


 


When
Deferred Share Bonus Awards under the Plan are to be granted the Board may determine that this Schedule applies, in which case
such Awards shall be subject to all the provisions of the Novartis AG Deferred Share Bonus Plan save as modified below.


 


ADIs
subject to the Deferred Share Bonus Awards under the Plan are intended to be registered under the United States Securities Act
of 1933.


 


2.           
Grant of Deferred Share Bonus Awards – Shares subject to the Plan


 


		(a)	Subject
                                         to Rule 7.3, the aggregate number of ADIs made subject to Deferred Share Bonus Awards
                                         under this Schedule may not exceed 2,780,000, plus any ADIs that were not issued under
                                         the Plan as of January 1, 2021; plus any ADIs subject to outstanding Awards under the
                                         Plan as of January 1, 2021 that on or after January 1, 2021 cease for any reason to be
                                         subject to such Awards.



 


		(b)	Such
                                         ADIs shall be deemed to have been used in payment of Deferred Share Bonus Awards whether
                                         they are actually delivered or the market value equivalent of such ADIs is paid in cash.
                                         In the event any Deferred Share Bonus Award is surrendered or terminated, or expires
                                         or is forfeited, the number of ADIs no longer subject thereto shall thereupon be released
                                         and shall thereafter be available for new Deferred Share Bonus Awards under this Schedule.



 


		(c)	ADIs
                                         comprising Deferred Share Bonus Awards under this Schedule or delivered by the Company
                                         in settlement of Deferred Share Bonus Awards under this Schedule may be derived from
                                         authorised and unissued Shares or from Shares or ADIs held in the treasury of the Company
                                         or held by another member of the Group or may be purchased on the open market or by private
                                         purchase.



 


3.           
Defintions


 


For
the purposes of this Schedule the following definition shall apply:


 


“Retirement”
means the Cessation of Employment after having attained age 55 or older and having completed at least 10 years of Service.


 


4.           
Stock Appreciation Rights


 


SARs
granted under this Schedule shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board may impose,
including, but not limited to, the following:


 


(a)           SARs
with Participant discretion to exercise


 


		(i)	Base
                                         Value. The Base Value for SARs per ADI subject to a SAR shall not be less than 100%
                                         of the market value of an ADI at the Grant Date.



 


		(ii)	Payment
                                         on exercise. On the exercise of a SAR, the Company shall pay to the Participant an
                                         amount equal to the number of ADIs subject to the SAR multiplied by the excess, if any,
                                         of the market value of one ADI on the exercise date over the Base Value.






 






     


    19


    




 


		(iii)	Market
                                         value. For the purposes of SARs subject to this Schedule, “market value”
                                         in paragraphs 4(a)(i) and 4(a)(ii) of this Schedule on a given date means:



 


		(aa)	if
                                         the ADIs are listed on a national securities exchange in the United States, the closing
                                         sale price reported as having occurred on the primary exchange with which the Shares
                                         are listed and traded (currently the New York Stock Exchange) on such date or, if there
                                         is no such sale on that date, then the last preceding date on which such a sale was reported;



 


		(bb)	if
                                         the ADIs are not listed on any national securities exchange but is quoted on the National
                                         Market System of the National Association of Securities Dealers Automated Quotation System
                                         (“NASDAQ”), the trade price of the last sale reported on such date
                                         or, if there is no such sale on that date, then the last preceding date on which such
                                         a sale was reported; or



 


		(cc)	if
                                         the ADIs are not listed on a national securities exchange nor quoted on NASDAQ, on a
                                         last sale basis the amount determined by the Board to be the fair market value based
                                         upon a good faith attempt to value the Shares accurately.



 


		(iv)	Dividend
                                         Equivalents. If the Board designates Dividend Equivalents to apply to SARs pursuant
                                         to Rule 4.3(a), such accumulated Dividend Equivalents shall be paid to the Participant
                                         immediately upon Vesting.



 


		(v)	No
                                         deferral of proceeds. Pursuant to the limitations of the United States Treasury Regulation
                                         Section 1.409A-1(b)(5)(i)(B)(3), a Participant may not defer the proceeds of the exercise
                                         of a SAR.



 


(b)         SARs
without Participant Discretion to exercise


 


If
a SAR is granted with a fixed exercise date and the Participant has no discretion to exercise the SAR, Participants may elect
to defer the payment of the proceeds of the automatic exercise of the SAR, and any accumulated Dividend Equivalents, to the date
later than the payment date specified in the Deferred Share Bonus Award provided that the Participant makes such deferred election
either as an initial deferral under United States Treasury Regulation Section 1.409A-2(a) or pursuant to the subsequent deferral
provisions of United States Treasury Regulation Section 1.409A-2(b). The Board shall determine whether such deferral is in the
form of Shares (ADIs) or cash. If deferrals are in Shares (ADIs), unless otherwise directed by the Board such Shares (ADIs), and
any accumulated Dividend Equivalents, shall be delivered upon such deferred payment date. If the deferrals are in cash, the cash
proceeds of such automatic exercise of the SARs shall be transferred into the applicable non-qualified deferred compensation plan
of the Group entity which employs the Participant.





 






     


    20


    

 


5.          
Consequences of Vesting – Restricted Stock Units


 


		5.1	Participants
                                         may elect to defer the payment of Restricted Stock Units, and any accumulated Dividend
                                         Equivalents, to the date later than the payment date specified in the relevant Deferred
                                         Share Bonus Award provided that the Participant makes such a deferred election either
                                         as an initial deferral under United States Treasury Regulation Section 1.409A-2(a) or
                                         pursuant to the subsequent deferral provisions of United States Treasury Regulation Section
                                         1.409A-2(b). The Board shall determine whether such deferral is in the form of Shares
                                         (ADIs) or cash. If deferrals are in Shares (ADIs), unless otherwise directed by the Board,
                                         such Shares (ADIs), and any accumulated Dividend Equivalents, shall be delivered from
                                         this Plan upon such deferred payment date. If deferrals are in cash, the cash proceeds
                                         of such Awards shall be transferred into the applicable non-qualified deferred compensation
                                         plan of the Participant’s employing Group company in the United States.



 


		5.2	Rule
                                         4.3 shall be amended by inserting the underlined words below:



 


“As
soon as practicable after the Vesting (but no later than the 15th day of the third calendar month after the Vesting)
the Company shall transfer the number of Shares (or pay a cash sum if the Board has determined that the RSU is to be settled
in cash) in respect of which the Deferred Share Bonus Award has Vested to the Participant”.


 


6.          
Corporate Events


 


Should
the Board determine that adjustments be made to Deferred Share Bonus Awards under Rule 7, any such adjustments or modifications
must be made in a manner which is consistent with the provisions of section 409A of the United States Internal Revenue Code (“Code
Section 409A”).


 


7.          
Code Section 409A


 


		7.1	Notwithstanding
                                         anything under the Plan to the contrary, to the extent applicable, it is intended that
                                         the Plan as it applies to Participants shall comply with the provisions of Code Section
                                         409A and the Plan and all applicable Deferred Share Bonus Awards be construed and applied
                                         in a manner consistent with this intent. In furtherance thereof, any amount constituting
                                         a “deferral of compensation” under Treasury Regulation Section 1.409A-1(b)
                                         that is payable to a Participant upon a separation from service of the Participant (within
                                         the meaning of Treasury Regulation Section 1.409A-1(h)) (other than due to the Participant’s
                                         death), occurring while the Participant shall be a “specified employee” (within
                                         the meaning of Treasury Regulation Section 1.409A-1(i)) of the Group (as limited by Code
                                         Sections 414(b), (c), (m) and (o)), shall not be paid until the earlier of:



 


		(a)	the
                                         date that is six months following such separation from service; or



 


		(b)	the
                                         date of the Participant’s death following such separation from service.






 






     


    21


    

 


		7.2	Notwithstanding
                                         any provision of the Plan to the contrary, to the extent that a Deferred Share Bonus
                                         Award constituting a “deferral of compensation” subject to Code Section 409A
                                         shall be deemed to be vested or restrictions lapse upon the occurrence of a Change of
                                         Control, and if such Change of Control does not constitute a “change in control
                                         event” (as defined in Treasury Regulation Section 1.409A-3(i)), then even though
                                         such Award may be deemed to be vested or restrictions lapse, payment will only be made
                                         to the extent necessary to comply with the provisions of Code Section 409A, to the United
                                         States participant on the earliest of:



 


		(a)	the
                                         United States participant’s separation from service, the date payment otherwise
                                         would have been made pursuant to the regular payment terms of the Award; or



 


		(b)	the
                                         Participant’s death.



 


8.          
US Executive Financial Recoupment Program


 


For
US-based roles covered by the Incentive Compensation Restriction and Executive Financial Recoupment Program (as set forth in Appendix
E of the 2020 CIA, hereinafter “Executive Financial Recoupment Program”) of the Corporate Integrity Agreement Between
the Office of Inspector General of the Department of Health and Human Services and Novartis Corporation (“2020 CIA”)
(such roles hereinafter referenced as “Covered Executives”), the Board temporarily delegates its authority and discretion
to make Clawback determinations under section 9 of this Plan, with respect to incentives awarded under this Plan, to the Recoupment
Committee established under the Executive Financial Recoupment Program and to fulfill the obligations entrusted to the Recoupment
Committee under such Program, for the term of the 2020 CIA.


 


Covered
Executives must agree to accept the terms and conditions of the Executive Financial Recoupment Program as a condition of accepting
awards under this Plan. The terms and conditions of the Executive Financial Recoupment Program shall apply to all awards made
under this Plan to Covered Executives during the term of the 2020 CIA.


 


At
the conclusion of the 2020 CIA, this temporary delegation of authority and discretion shall cease and will revert to the Board.
The 2020 CIA may be accessed online at https://oig.hhs.gov/fraud/cia/agreements/Novartis_Corporation_06302020.pdf.





 






     


    22


    







 


SCHEDULE
3

RETENTION SHARE BONUS AWARDS


 


		1.	Application
                                         of this Schedule



 


The
Rules of the Novartis AG Deferred Share Bonus Plan shall apply to an award granted in the form of a Retention Share Bonus Award
granted or to be granted under this Schedule as if it were a Compulsory Deferred Share Bonus Award, except as set out in this
Schedule. Where there is any conflict between the Rules and this Schedule, the terms of this Schedule shall prevail.


 


		2.	Definitions



 


For
the purpose of this Schedule the following definition shall apply:


 


	“Initial
    Conditions”	means
    the condition or conditions determined by the Board and applicable to the calculation of the Initial Value.
	 	 
	“Initial
    Period”	means
    the period over which the Initial Conditions are measured, as determined by the Board.
	 	 
	“Initial
    Value”	means
    the notional cash values applicable to the Participant and attributable to a Retention Share Bonus Award as at the expiry
    of the applicable Initial Period.
	 	 
	“Retention
    Share Bonus Award”	means
    an Award granted under this Schedule to the Plan.
	 	 


		3.	Determination
                                         of Retention Share Bonus Award



 


For
the purposes of this Schedule, Rule 2.1 shall not apply and shall be replaced by the following:


 


		“(a)	The
                                         Board may determine that an Award will be provided to the participant in the form of
                                         a Retention Share Bonus Award.



 


		(b)	Where
                                         the Board determines that a Participant shall be granted a Retention Share Bonus Award,
                                         it shall also determine:



 


		(i)	the
                                         minimum, target and maximum Initial Value; and



 


		(ii)	the
                                         Initial Conditions applicable to such Initial Value (unless the Board has delegated setting
                                         such conditions, in which case they shall determine the overall structure, approach and
                                         principles to be applied).”



 


		4.	Determining
                                         the number of shares or ADIs subject to a Retention Share Bonus Award



 


For
the purposes of this Schedule, Rule 2.4 shall not apply and shall be replaced by the following:


 


		“(a)	Following
                                         the expiry of the Initial Period, the Board shall grant a Retention Share Bonus Award.
                                         The number of Shares or ADIs subject or linked to such Award (“X”) shall
                                         be determined by the Board as follows:



 


	X
    = 	A
	 	B
	 	 


		Where:	



 


		A	subject
                                         to adjustments below, is the Initial Value as adjusted by the Board to take into account
                                         the satisfaction or otherwise of the Initial Conditions following the expiry of the Initial
                                         Period; and






 






     


    23


    

 


		B	is
                                         Market Value of a Share or ADI (as appropriate) as at such date as the Board may determine
                                         as soon as practicable following the expiring of the Initial Period rounded up, where
                                         necessary, to the nearest whole Share or ADI,



 


provided
that the Board may apply such other method of calculation as it may determine from time to time.


 


		(b)	If
                                         during the Initial Period the Participant’s role and/or responsibilities have been
                                         altered, then:



 


		(i)	A
                                         (as determined in Rule 2.4(a) above) may, at the discretion of the Board and in such
                                         manner as the Board may determine from time to time, be adjusted to reflect such alteration
                                         in role and/or responsibilities;



 


		(ii)	the
                                         Board may, at its discretion, determine that any or all of A (where relevant, as adjusted
                                         in accordance with Rule 2.4(b)(i)) is paid in cash, subject to the appropriate deductions,
                                         to the Participant as soon as practicable following determination of the cash sum payable.
                                         In this event, A in Rule 2.4(a) shall be that part of A not settled in accordance with
                                         this Rule 2.4(b)(ii);



 


		(c)	In
                                         the event that Rule 2.4(b)(ii) applies and any part of the Initial Value is settled in
                                         accordance with that Rule, then that Participant shall have no right to receive any further
                                         benefit or payment or to receive Shares or ADIs in respect of that of the Initial Value.”



 


		5.	Timing
                                         of Retention Share Bonus Awards



 


For
the purposes of this Schedule, Rule 2.5 shall not apply and shall be replaced by the following:


 


“Subject
to any Dealing Restrictions which prevent Retention Share Bonus Awards being granted, the Board shall grant such Retention Share
Bonus Awards as soon as practicable within the first Grant Period following the expiry of the Initial Period.”


 


		6.	Vesting
                                         of Retention Share Bonus Awards



 


Immediately
following Rule 4.1, the following shall be added as Rule 4.1A:


 


“To
the extent that the Initial Conditions are not met, there shall be no entitlement to receive a Retention Share Bonus Award.”


 






     


    24


    

 


		7.	Leaving
                                         in special circumstances - Retention Share Bonus Awards



 


For
the purposes of this Schedule, Rule 6.3 and Rule 6.4 shall apply where a Participant Ceases Employment following the expiry of
the Initial Period but prior to the Vesting Date applicable to a Retention Share Bonus Award.


 


Immediately
following Rule 6.3, the following shall be added as Rule 6.3A:


 


		“(a)	If
                                         a Participant Ceases Employment during the Initial Period otherwise than because of a
                                         reason set out in Rule 6.3(a) to (e) or Rule 6.4 then the Participant shall have no right
                                         to receive any cash payment or a Retention Share Bonus Award.



 


		(b)	If
                                         a Participant Ceases Employment during the Initial Period because of a reason set out
                                         in Rule 6.3(a) to (e) or Rule 6.4 then the Board shall, by reference to the Initial Value
                                         applicable to that Participant, determine the cash sum payable to the Participant as
                                         follows:



 


		(i)	if
                                         the Participant, prior to Cessation of Employment, is not required to undertake employment
                                         duties for a defined period (“Garden Leave”) then in respect of that part
                                         of his Initial Value which relates to the applicable period of Garden Leave:



 


		(aa)	that
                                         element of his Initial Value which is referable to individual conditions shall be settled
                                         at target; and



 


		(bb)	that
                                         element of his Initial Value which is referable to business conditions shall be settled:



 


		(A)	if,
                                         as at the date of Cessation of Employment, it is impractical to assess the relevant business
                                         conditions, at target; or



 


		(B)	if,
                                         as at the date of Cessation of Employment, it is practical to assess the relevant business
                                         conditions, to the extent the Board determines having regard to the relevant business
                                         conditions up to the date of such cessation;



 


		(ii)	to
                                         the extent that (i) above does not apply then:



 


		(aa)	if,
                                         as at the date of Cessation of Employment, it is impractical to assess the relevant conditions,
                                         at target; or



 


		(bb)	if,
                                         as at the date of Cessation of Employment, it is practical to assess the conditions,
                                         to the extent the Board determines having regard to progress towards satisfying such
                                         conditions up to the date of such cessation,



 


PROVIDED
ALWAYS THAT settlement of the Initial Value shall be reduced to take account of the proportion of the Initial Period during which
the Participant was an Eligible Employee.


 






     


    25


    

 


		(c)	In
                                         the event that Rule 6.3A(b) applies and any part of the Initial Value is settled in accordance
                                         with that Rule, then that Participant shall have no right to receive any benefit or payment
                                         or to receive Shares or ADIs in respect of that Award.”



 


		8.	Change
                                         of Control prior to the Vesting Date - Retention Share Bonus Awards



 


For
the purposes of this Schedule, Rule 7.1(a) shall apply where a Change of Control occurs following the expiry of the Initial Period
but prior to the Vesting Date applicable to a Retention Share Bonus Award.


 


Immediately
following Rule 7.1(a), the following shall be added as Rule 7.1A:


 


		“(a)	If
                                         a Change of Control occurs or is anticipated to occur during the Initial Period then
                                         the Initial Value shall vest on the Change of Control or at such earlier point as the
                                         Board shall determine and the Board shall determine the cash sum in respect of such Initial
                                         Value that is payable as follows:



 


(i)
if, as at the date of the Change of Control, it is impractical to assess the Initial Conditions, at target; or


 


(ii)
if, as at the date of the Change of Control, it is practicable to assess the applicable Initial Conditions, to the extent the
Board determines having regard to progress towards satisfying such conditions up to the date of the Change of Control,


 


PROVIDED
ALWAYS THAT payment shall be reduced to take account of the proportion of the Initial Period as has elapsed when the Change of
Control occurs and during which the Participant was an Eligible Employee.


 


		(b)	In
                                         the event that Rule 7.1A(a) applies and a Participant’s Initial Value is settled
                                         in accordance with that Rule, then that Participant shall have no further right to receive
                                         any benefit or payment or to receive Shares or ADIs in respect of that Award.”