Exhibit 4.2


 


STRICTLY
PRIVATE & CONFIDENTIAL


TO
BE OPENED BY ADDRESSEE ONLY


 


Mr T Thiam


83 Elizabeth
Street


London


SW1W 9PG


 


23 March 2009


 


Dear Tidjane


 


Following
our recent discussions, I am delighted to offer you the position of Chief
Executive Officer of Prudential plc.  The
information in this letter is based on our recent discussions and outlines your
new remuneration arrangements from 1 October 2009 onwards.


 


Fixed remuneration elements


 


The
fixed elements of your new remuneration arrangements are as follows:


 


I.     Base
salary


Your
base salary will be £875,000 per annum. 
This will be payable monthly in arrears, by the last working day of each
month.  Your salary will be reviewed on 1
January each year at the discretion of the Remuneration Committee.


 


II.             Pension
allowance


You
will receive a pension allowance of 25% of your base salary per annum. This
will continue to be paid in full on a monthly basis into the Defined
Contribution section of the Prudential Staff Pension Plan unless you decide to
change your level of contributions.


 


III.         Death in
service


You will
receive a death in service benefit equal to 4 times your new base salary.


 


IV.         Private
medical insurance


You and your
family will be eligible to participate in the Prudential Group Medical Insurance
Scheme currently provided with PruHealth.


 


V.             Holiday


Subject
to the time required for the proper performance of your duties, your holiday
will not exceed six weeks each year.


 


Variable
remuneration elements


 


You will be
entitled to participate in Prudential’s discretionary Annual Incentive Plan (“AIP”)
and discretionary Group Performance Share Plan (“GPSP).


 


1

















 


I.     Annual
bonus with deferral


Your
maximum potential annual incentive award under the Prudential AIP will be 180%
of your base salary.  The expected award
for the delivery of business plan will be between 50% and 67% of the maximum
bonus opportunity.  This calibration will
be dependant on the degree of difficulty of the business plan in any given year.


 


There
will be a compulsory deferral into Prudential shares of 50% of any bonus
awarded in any year. These shares will vest after three years. No performance
conditions will be applied to the deferred shares.  You will receive the benefit of the dividends
which are paid during the three year deferral period.  A plan guide is being prepared which will provide
further details about how the deferral plan will operate.  This will be sent to you shortly.


 


Any
bonus awarded in March 2010 will be prorated based on your time as CFO (9/12ths)
and your time as Group Chief Executive (3/12ths), taking into account your
remuneration arrangements in both roles.  Tidjane this assumes that you start in your
new role on 1 October.  However, we have
yet to finalise the handover arrangements between you and Mark.  Should it transpire that you take on more of
the CEO role prior to this official start date we may reconsider this
pro-rating.


 


Any
bonus paid under the AIP will be non-pensionable.


 


II.             Long-term
incentive plan (LTIP)


Your
maximum potential GPSP award in any year will be 300% of your base salary. The maximum number of shares
in any award is currently calculated by reference to the average value of
Prudential’s shares 30 days following the announcement of Prudential’s
financial results in the given year.


 


Contract


I
have not included a new contract for your signature as your current contract
which was signed on your appointment  to
the CFO role remains relevant.


 


Conclusion


I
very much hope you will accept the remuneration arrangements set out in this
letter.  If you are happy with the
arrangements I should be grateful if you would sign both copies of this letter
and return one copy to me.  The other
copy is for your records.  If you have
any queries please do contact me at any point.


 


Tidjane,
I look forward to working with you in your new role.


 


Yours
sincerely,


 


	
  /s/ Harvey

  	
   

  
	
   

  
	
  Harvey McGrath

  



 


 


I
confirm my agreement to the remuneration terms as detailed in this letter.


	
   

  
	
  Signed 

  	
     /s/ T. Thiam

  	
   

  
	
  Tidjane Thiam

  
	
  Dated

  	
     March 25, 2009

  	
   

  



 


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