Exhibit
10.12


 


RULES OF


 












 


CYCLACEL
GROUP PLC


 


SAVINGS
RELATED SHARE OPTION PLAN


 












 


(Authorised by shareholders on 1 July, 2004


Adopted by the Board on 30 June, 2004


Approved by the Inland Revenue on [   ])


 


 





 


ALLEN
& OVERY LLP


 


London


EP:269485.2


 












 








 


SAVINGS
RELATED SHARE OPTION PLAN


 


CONTENTS


 


	
  Rule

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and
  interpretation

  	
   

  	
   

  
	
  2.

  	
  Invitation and
  application for Options

  	
   

  	
   

  
	
  3.

  	
  Scaling
  down

  	
   

  	
   

  
	
  4.

  	
  Grant
  of Options

  	
   

  	
   

  
	
  5.

  	
  Limit
  on Shares

  	
   

  	
   

  
	
  6.

  	
  Time of exercise of Options

  	
   

  	
   

  
	
  7.

  	
  Lapse
  of Options

  	
   

  	
   

  
	
  8.

  	
  Exercise
  of Options and issue or transfer of Shares

  	
   

  	
   

  
	
  9.

  	
  Adjustment of Options

  	
   

  	
   

  
	
  10.

  	
  Exchange
  of Options

  	
   

  	
   

  
	
  11.

  	
  Administration

  	
   

  	
   

  
	
  12.

  	
  Amendment

  	
   

  	
   

  
	
  13.

  	
  General

  	
   

  	
   

  
	
  14.

  	
  Governing
  law

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Appendix

  	
   

  



 

















 


 


1.             Definitions
and interpretation


 


1.1          Definitions


 


The words and
expressions used in this Plan which have capital letters have the meanings set
out in the Appendix.


 


1.2          Interpretation


 


The headings in
the Rules are for convenience and should be ignored when construing them.
Unless the context otherwise requires, words in the singular include the plural
and vice versa and words importing either gender include both genders.


 


Reference in the
Rules to any statutory provisions are to those provisions as amended or
re-enacted from time to time, and include any regulations or other subordinate
legislation made under them. 


 


2.             Invitation and application for Options


 


2.1          Time when invitations may be made


 


During the Plan
Period, the Board may during an Invitation Period invite Eligible Employees to
apply for Options.  If the Board chooses
to exercise its discretion in this way, invitations will be extended to all
Eligible Employees.


 


2.2          Form of invitation


 


The Board will
specify the form of the invitations to apply for Options.  Invitations may be made by letter, poster,
circular, advertisement, electronically or any other means or combination of
means determined by the Board.  If the
Option Price is advertised by poster, the Date of Invitation will be the day
following the day or, as the case may be, the last of the three dealing days by
reference to which the Option Price is determined.


 


2.3          Option Price


 


The Board will
decide the Option Price for an invitation. The Option Price will not be less
than the higher of:


 


(a)           80 per cent. of the Market
Value of a Share on the Dealing Day immediately preceding the Date of
Invitation or, if the Board decides, 80 per cent. of the average of the Market
Values of a Share on the three Dealing Days immediately preceding the Date of
Invitation or 80 per cent. of the Market Value at such other time or times
agreed in advance with the Inland Revenue; and


 


(b)           if the Shares are to be
subscribed, their nominal value, 


 


but subject to any adjustment under Rule 9.


 


2.4          Applications


 


An Eligible
Employee may apply for an Option in the form specified by the Board.  The application will contain any
undertakings and/or declarations from Eligible Employees that the Board
requires for the Plan.  The application
form must be accompanied by a completed proposal form to enter a Savings
Contract with the Savings Body. 
Eligible Employees must


 

















 


apply for Options
within 21 days following the Date of Invitation (or any shorter period, but not
less than 14 days, determined by the Board). 



 


2.5          Employee’s specification


 


An Eligible
Employee must specify:


 


(a)           the Monthly
Contribution which, subject to Rules 2.8 and 3, the Eligible Employee wishes to
make; and 


 


(b)           subject to
Rule 2.7, whether the Savings Contract Repayment is to include the Three
Year Bonus, the Five Year Bonus or the Seven Year Bonus.


 


2.6          Shares available


 


The Board may
specify a maximum number of Shares available under an invitation.


 


2.7          Bonus available


 


The Board may
allow Eligible Employees when applying for an Option to elect for the Three
Year Bonus, the Five Year Bonus or the Seven Year Bonus.  If the Board do not specify in the
invitation documents, Eligible Employees may only elect for the Three Year
Bonus. 


 


2.8          Limit on participation


 


A Participant
cannot contribute monthly to Savings Contracts more than the Maximum
Contribution.


 


3.             Scaling down


 


3.1          Method


 


If there are
insufficient Shares available to satisfy valid applications for Options, the
Board may use any of the following methods, or a combination of methods, to
scale down applications to the extent necessary to eliminate the excess:


 


(a)           treat any applications
for a Seven Year Bonus as an application for a Five Year Bonus; or


 


(b)           reduce pro-rata the
proposed Monthly Contribution of each Eligible Employee which is in excess of
an amount chosen by the Board; 


 


(c)           treat the bonus of each
Eligible Employee as wholly or partly excluded from the Savings Contract
Repayment; or


 


(d)           reduce pro-rata the
proposed Monthly Contribution of each Eligible Employee, provided that this
amount is not less than the Minimum Contribution; or


 


(e)           or treat any
applications for a Five Year Bonus as an application for a Three Year Bonus; or


 


(f)            select applications by
lot, each based on a Monthly Contribution equal to the Minimum Contribution and
no bonus in the Savings Contract Repayment.


 


2

















 


3.2          Applications modified


 


If scaling down is
necessary each application will be deemed to have been modified or withdrawn in
accordance with the method chosen under Rule 3.1 and the Board will complete or
amend, as appropriate, each Savings Contract proposal form to reflect any
reduction in Monthly Contributions.  The
Board will then grant Options under Rule 4, but the period of 30 days in
Rule 4.2 will be increased to 42 days.


 


4.             Grant of Options


 


4.1          Option grant


 


Subject to Rule 3,
Options will be granted by the Board to each Eligible Employee who has applied
for an Option over the largest whole number of Shares that can be acquired at
the Option Price with the Savings Contract Repayment related to their
respective applications.  An Option will
be granted so that it constitutes a binding contract between the Company and
the Participant.  There will be no
payment for the grant of an Option.


 


4.2          Time of grant


 


Options will be
granted within 30 days after the date on which the Option Price is determined
or, if the Option Price is determined over three consecutive dealing days,
within 30 days after the earliest of those dealing days.  


 


4.3          Notification of grant


 


A Participant will
be notified of the grant of an Option and may be issued with an option
certificate specifying the date on which the Option was granted, the number of
Shares under the Option, the Option Price, the Bonus and Bonus Date of the
Option.  Alternatively, a Participant
may be advised where that information can be accessed, or be given the
opportunity to obtain such details electronically.  


 


4.4          Options personal to Participants


 


An Option may not,
nor may any rights in respect of it, be transferred, assigned, charged or
otherwise disposed of to any person, except that on the death of a Participant
an Option may be transmitted to the Participant’s personal representatives. 


 


5.             Limit on Shares


 


5.1          The 10 per cent. limit over 10 years 


 


The number of
Shares which may be allocated under the Plan on any day cannot, when added to
the aggregate of the number of Shares allocated in the previous 10 years under
the Plan and any other Employees’ Share Plan adopted by the Company, exceed
that number of Shares equal to 10 per cent. of the ordinary share capital of
the Company in issue immediately prior to that day. 


 


5.2          Exclusion from limit


 


In calculating the
limit in Rule 5.1, the following Shares shall be ignored and disregarded:


 


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(a)           any Shares where the
right to acquire them was released or lapsed without being exercised;


 


(b)           any Shares which are or
have been allocated under the Cyclacel Group plc Senior Executive Incentive
Plan;


 


(c)           Partnership shares
awarded under a SIP.


 


5.3          Meaning of allocation


 


References to the
“allocation” of Shares means, in the case of any share option plan, the placing
of unissued shares or treasury Shares under option and, in relation to other
types of Employees’ Share Plan, means the issue and allotment of Shares, or
transfer of Shares out of treasury.


 


5.4          Grants in excess


 


If an Option is
granted on terms which do not comply with this Rule 5, the number of Shares
over which that Option has been granted will, together with the number of
Shares over which all other Options have been granted on the same Date of
Grant, be reduced pro rata to the largest lower number that complies with this
Rule. An adjusted Option will take effect from the Date of Grant as if it had
been granted on the adjusted terms.


 


5.5          Adjustment of Shares to be taken into account


 


Where Shares
issued under the Plan or any other Employees’ Share Plan of the Company are to
be taken into account for the purposes of the limit in this Rule and a
Variation in the equity share capital of the Company has taken place between
the date of issue of those Shares and the date on which the limit is to be
calculated, then the number of Shares taken into account for the purposes of
the limit will be adjusted in the manner the Board considers appropriate to
take account of the Variation.


 


6.             Time of
exercise of Options


 


6.1          General rules for exercise


 


An Option may:


 


(a)           except as provided in
Rule 6.2, only be exercised by a Participant while he is a director or employee
of a Participating Company or an Associated Company; and


 


(b)           not be exercised by a
Participant (or, if appropriate, the Participant’s personal representatives) at
any time when a Participant cannot (or would not have been able to) participate
in the Plan due to the provisions of paragraph 11 of Schedule 3 (material
interest in close company).


 


6.2          Timing of exercise 


 


Subject to
Rule 7, an Option can be exercised at any time for a period of six months
following the earliest of:


 


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(a)           the applicable Bonus
Date;


 


(b)           the Participant ceasing
to be employed by reason of injury, disability, Redundancy or Retirement where
the Participant’s employment is in a company which the Company has ceased to
Control or relates to a business which was transferred to a person who was not
an Associated Company of the Company.


 


6.3          Death


 


Any Option held by
a Participant who dies can be exercised by his personal representatives within
12 months after the earlier of the date of the Participant’s death or the Bonus
Date of the Option (if death occurs within 6 months of the Bonus Date).


 


6.4          Cessation of scheme related employment


 


(a)           For the purposes of
Rule
6.2(b), a participant will not be treated as ceasing to be an employee or
director of a Participating Company until he is no longer employed by the
Company or an associated company (as defined in paragraph 35(4) of Schedule 3).


 


(b)           For the purposes of
Rule 6.2(b), a woman who leaves employment because of pregnancy will cease
employment on the date on which she indicates either that she does not intend
to return to work or that she will not be returning to work.  If she does not so indicate she will cease
employment on the day after the date on which maternity pay under the
Employment Rights Act 1996 ceases to be payable, or if later, any other date
specified in the terms of her employment without her returning to work. 


 


6.5          Takeover


 


Subject to Rule 7
and provided the Option is not to be exchanged under Rule 6.8, an Option can be
exercised for a period of 6 months following the date on which an offeror
(together with others, if any, acting in concert with the offeror) obtains
Control of the Company as a result of making a general offer to acquire all the
issued ordinary shares of the Company or all of the shares of the Company which
are of the same class as the Shares and which, in either case, are not at the
time owned by the offeror or any company Controlled by the offeror and/or
persons acting in concert with the offeror) and any condition subject to which
the offer was made has been satisfied.


 


6.6          Section 429 notice


 


Subject to Rule 7
and provided the Option is not to be exchanged under Rule 6.8, an Option can be
exercised for the period during which a person is bound or entitled under
sections 428 to 430F of the Companies Act 1985 to acquire any Shares (or who
would be so entitled but for the fact that there were no dissenting
shareholders).


 


6.7          Company reconstruction under s 425 (or
comparable overseas legislation)


 


Subject to Rule 7
and provided the Option is not to be exchanged under Rule 6.8, an Option can be
exercised for a period of 6 months following the date when the court sanctions
a compromise or arrangement under section 425 of the Companies Act 1985 (or
overseas legislation regarded as comparable by the Inland Revenue) proposed for
the purposes of or in connection with a scheme for the reconstruction or
amalgamation of the Company.


 


5

















 


6.8          Reorganisation or merger


 


If a company (the “Successor
Company”) has obtained Control of the Company, and the shareholders of the
Successor Company immediately after it has obtained Control are substantially
the same as the shareholders of the Company immediately before that event, and
the Successor Company consents to the exchange of options under this Rule,
Options will not be exercisable but will be exchanged, during the Appropriate
Period, pursuant to Rule 10 save that references to the Acquiring Company
in that Rule shall be deemed to be references to the Successor Company.


 


7.             Lapse of Options


 


Except in the case of a
Participant’s death, when an Option will lapse on the expiry of twelve months
from the earlier of the date of the Participant’s death or the Bonus Date, as
appropriate, an Option will lapse on the earliest of:


 


(a)           the expiry of six
months from the Bonus Date;


 


(b)           the expiry of six
months from the date on which the Participant ceases to be a director or
employee of a Participating Company or an Associated Company in any of the circumstances
referred to in Rule 6.2(b);


 


(c)           the date on which the
Participant ceases to be a director or employee of a Participating Company or
an Associated Company in any circumstances other than those referred to in
Rules 6.2(b);


 


(d)           the Participant’s right
to continue making Savings Contributions lapsing under the provisions of the
Savings Contract other than on death or for the purpose of exercising an
Option; and


 


(e)           the expiry of the
period of six months following the occurrence of any of the circumstances
permitting the exercise of Options in Rules 6.2(b), 6.5 and 6.7; and


 


(f)            the expiry of the
period during which a person is entitled or bound to acquire Shares under
sections 428 to 430F of the Companies Act 1985.


 


8.             Exercise of Options and issue or
transfer of Shares


 


8.1          Manner of Exercise


 


An Option may be
exercised in whole or in part by the Participant giving notice of exercise to
or at the direction of the Company in a form approved by the Board.  The notice will specify the number of Shares
(and the Exercise Price) over which the Option is exercised and be accompanied
by the form of withdrawal from the Savings Contract required by the Savings
Body or by an appropriate remittance and evidence of withdrawal from the
Savings Contract. If an Option is exercised in part the unexercised part will
lapse.


 


8.2          Monies available for exercise


 


The Exercise Price
payable on exercise of an Option cannot exceed the amount of the repayment made
(including any interest) under the Participant’s related Savings Contract.  For this purpose, the repayment under the
Savings Contract will exclude the repayment of


 


6

















 


any Monthly
Contribution the date of payment of which falls more than one month after the
date on which the repayment is made.


 


8.3          Delivery of shares


 


Subject to Rule
8.4, the Company will arrange for the delivery of any Shares to a Participant
(or the Participant’s nominee) within 30 days following the effective exercise
of the Option. 


 


8.4          Consents


 


The delivery of
any Shares under the Plan will be subject to obtaining any necessary approval
or consent. 


 


8.5          Ranking of Shares


 


Shares acquired by
a Participant under the Plan will rank equally in all respects with the Shares
then in issue, except that they will not be entitled to any rights attaching to
Shares by reference to a record date falling before the date on which the
Participant is entered on the Company’s register of shareholders in respect of
those Shares.  


 


8.6          Listing


 


While the Shares
are Listed the Company will apply for Listing of any Shares issued under the
Plan as soon as practicable after their allotment. 


 


9.             Adjustment of
Options


 


9.1          Variation in equity share capital


 


If there is a
Variation, the number and/or the nominal value of Shares over which an Option
is granted and the Option Price will, subject to Rule 9.2 and the prior
approval of the Inland Revenue, be adjusted in the manner the Board determines
so that (as nearly as may be without involving fractions of a Share or an Option
Price calculated to more than two decimal places) the Exercise Price remains
unchanged. 


 


9.2          Nominal value of Shares


 


Apart from under
this Rule 9.2, no adjustment under Rule 9.1 can reduce the Option Price to less
than the nominal value of a Share. Where Options relate to both issued and
unissued Shares, an adjustment under Rule 9.1 above may only be made if the
reduction of the Option Price in respect of both the issued and the unissued
Shares can be made to the same extent. Any adjustment made to the Option Price
of Options over unissued Shares to less than the nominal value of a Share will
only be made if and to the extent that the Board is authorised to:


 


(a)           capitalise from the
reserves of the Company a sum equal to the amount by which the nominal value of
the Shares subject to an Option exceeds the adjusted Exercise Price; and


 


(b)           apply that sum in
paying up the Shares, 


 


so that on
exercise of the Option the Board will capitalise that sum and apply it in
paying up the Shares.


 


7

















 


9.3          Notifying Participants


 


The Company will
take the steps it considers necessary to notify Participants of any adjustments
made under Rule 9 and may call in, cancel, endorse, issue or re-issue any
certificate as a result of that adjustment.


 


10.          Exchange of Options


 


10.1        The Acquiring Company


 


If any company
(the “Acquiring Company”)


 


(a)           obtains Control of the
Company as a result of making a general offer to acquire:


 


(i)            the whole of the
issued ordinary share capital of the Company; or


 


(ii)           all the shares in the
Company which are of the same class as the Shares, 


 


in either case ignoring any Shares which are already owned by it or a
member of the same group of companies; or


 


(b)           obtains Control of the
Company as a result of a compromise or arrangement sanctioned by the court
under section 425 of the Companies Act 1985; or


 


(c)           becomes entitled to
acquire Shares under sections 428 to 430F of the Companies Act 1985,


 


any Participant
may, at any time within the Appropriate Period, by agreement with that
Acquiring Company, release any Option which has not lapsed (the “Old Option”)
in consideration of the grant to the Participant of a new option (the “New
Option”) which (for the purposes of paragraph 39 of Schedule 3) is equivalent
to the Old Option but relates to shares in a different company (whether the
Acquiring Company itself or another company falling within paragraph 18(b)
or (c) of Schedule 3).  


 


10.2        The New Option


 


The New Option
will only be regarded as equivalent to the Old Option if the conditions set out
in paragraph 39(4) of Schedule 3 are satisfied. Where that is the case, the New
Option will be treated as an Option granted under the Plan at the same time and
on the same terms as the Old Option except for the purpose of the definition of
“Participating Company” in the Appendix, and:


 


(a)           the Rules will be
construed in relation to the New Option as if references to Shares were
references to the shares over which the New Option is granted and references to
the Company were references to the different company mentioned in
Rule 10.1; and


 


(b)           Rule 12.2 will be
omitted.


 


For the avoidance of
doubt, the Plan remains that of the company which first established this Plan
prior to the release.


 


8

















 


11.          Administration


 


11.1        Administration and interpretation


 


The Plan will be
administered by the Board.  The Board
has full authority, consistent with the Rules, to administer the Plan,
including authority to interpret and construe any provision of the Plan and to
adopt any regulations for administering the Plan and any documents it thinks
necessary or appropriate. The Board’s decision on any matter concerning the
Plan will be final and binding.


 


11.2        Costs


 


The Company will
bear the cost of introducing and operating the Plan (including but not limited
to stamp duty, stamp duty reserve tax and any other costs relating to the issue
or transfer of Shares upon the exercise of Options). However, the Company may
require any Participating Company to reimburse the Company for any Plan costs
borne by the Company, directly or indirectly, in respect of that Participating
Company’s officers or employees.


 


11.3        Shares to cover Options


 


The Company will
ensure that sufficient Shares are available to satisfy all outstanding Options.



 


11.4        Notices


 


Any notice or
other communication in connection with the Plan will be in writing and may be
given:


 


(a)           by personal delivery;
or


 


(b)           by sending it by post:


 


(i)            in the case of a
company, to its registered office or other address that it notifies in writing;
and


 


(ii)           in the case of an
individual, to the individual’s last known address or, where the individual is
a director or employee of a Participating Company or an Associated Company,
either to the individual’s last known address or to the address of the place of
business at which the individual performs the whole or substantially the whole
of the duties of the individual’s office or employment; or 


 


(c)           by sending it by
facsimile, email or any form of electronic transfer acceptable to the Board:


 


(i)            in the case of a
company, to the facsimile number, email address or other number or address that
the company notifies; and


 


(ii)           in the case of an
individual, to the individual’s last known facsimile number or email address,
or where the individual is a director or employee of a Participating Company or
an Associated Company, to the individual’s workplace facsimile number or email
address.


 


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11.5        Time of service of notice


 


Any notice under
Rule 11.4 will be given:


 


(a)           if delivered, at the
time of delivery;


 


(b)           if posted, at 10.00am
on the second business day after it was put into the post; or 


 


(c)           if sent by facsimile,
email or any other form of electronic transfer, at the time of despatch.


 


In proving service
of notice it will be sufficient to prove that delivery was made or that the
envelope containing it was properly addressed, prepaid and posted or that the
facsimile message, email or other form of electronic transfer was properly
addressed and despatched, as appropriate.


 


11.6        Documents sent to shareholders


 


Participants may
receive copies of any notice or document sent by the Company to the holders of
Shares.


 


12.          Amendment


 


12.1        Board’s power to amend


 


Subject to the
provisions of this Rule 12, the Board can at any time amend any provisions of
the Plan in any respect except that any amendment made to a key feature (as
defined in paragraph 42(2B) of Schedule 3) while the Plan is approved
under Schedule 3 will not have effect until the Inland Revenue has approved it.


 


12.2        Shareholder approval


 


Subject to Rule
12.4 below, no amendment can be made to the advantage of Participants or
Eligible Employees to:


 


(a)           the persons to whom
Options may be granted;


 


(b)           the limit on the number
of Shares which may be issued under the Plan;


 


(c)           the maximum entitlement
for individual Participants;


 


(d)           the rights attaching to
Options and Shares;


 


(e)           the determination of
the Option Price;


 


(f)            the rights of
Participants in the event of a Variation; or


 


(g)           the terms of this Rule
12.2,


 


without the prior
approval by ordinary resolution of the members of the Company in general
meeting.


 


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12.3        Participants’ approval


 


No amendment will
be made under Rule 12.1 which would abrogate or adversely affect the subsisting
rights of a Participant unless it is made:


 


(a)           with the written
consent of the number of Participants that hold Options under the Plan to
acquire 75 per cent. of the Shares which would be delivered if all Options
granted and subsisting under the Plan were exercised; or 


 


(b)           by a resolution of a
meeting of Participants passed by not less than 75 per cent. of the
Participants who attend and vote either in person or by proxy, 


 


and for the
purposes of this Rule 12.3 the provisions of the articles of association of the
Company relating to shareholder meetings will apply with the necessary changes.


 


12.4        Permitted amendments


 


Rule 12.2 will not
apply to any amendment which is:


 


(a)           necessary or desirable
in order to obtain or maintain Inland Revenue approval of the Scheme under
Schedule 3; 


 


(b)           minor and to benefit
the administration of the Plan;


 


(c)           to take account of any
changes in legislation; or 


 


(d)           to obtain or maintain
favourable tax, exchange control or regulatory treatment for the Company, any
Participating Company or Associated Company, or any present or future
Participant.


 


12.5        Overseas Eligible Employees


 


The Board may
adopt additional sections of the Plan applicable in any jurisdiction, under
which Options may be subject to additional and/or modified terms and
conditions, having regard to any securities, exchange control or taxation laws,
regulations or practice which may apply to the Participant, the Company or any
Participating Company.  Any additional
section must conform to the basic principles of the Plan and must not enlarge
to the benefit of Participants the limits in Rule 2.8 (Limit on participation)
or Rule 5 (Limit on Shares). Any additional section and all Options granted
under that section will be governed by and construed in accordance with the
laws of England.


 


12.6        Notice of amendments


 


Participants will
be given written notice of any amendments to the Plan made under Rule 12 as
soon as reasonably practicable after they have been made.


 


12.7        Prohibited amendment


 


No amendment will
be made to the Plan if, as a result of the amendment, it would cease to be an
Employees’ Share Plan.


 


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13.          General


 


13.1        Termination of the Plan


 


The Plan will
terminate at the end of the Plan Period or at any earlier time determined by
the Board.  Termination of the Plan will
not affect Options granted before termination. 


 


13.2        Funding the Plan


 


The Company and
any Participating Company may provide money to the trustees of any trust or any
other person to enable them or him to acquire Shares to be held for the
purposes of the Plan, or enter into any guarantee or indemnity for those
purposes, to the extent permitted by any applicable law. 


 


13.3        Rights of Participants and Eligible Employees


 


The rights and
obligations of any individual under the terms of his office or employment with
a Participating Company or Associated Company will not be affected by his
participation in the Plan nor any right which he may have to participate under
it.  A Participant holding an Option
will not have any rights of a shareholder of the Company with respect to that
Option or the Shares subject to it.  


 


13.4        No right to compensation or damages


 


A Participant
waives all and any rights to compensation or damages for the termination of his
office or employment with a Participating Company or Associated Company for any
reason whatsoever (including unlawful termination of employment) insofar as
those rights arise or may arise from his ceasing to have rights under or to be
entitled to exercise any Option under the Plan as a result of that termination
or from the loss or diminution in value of such rights or entitlements.  Nothing in the Plan or in any document
executed under it will give any person any right to continue in Employment or
will affect the right of any Participating Company or any Associated Company to
terminate the employment of any Participant without liability at any time, with
or without cause, or will impose on any Participating Company, any Associated
Company or the Board or their respective agents and employees any liability in
connection with the loss of a Participant’s benefits or rights under the Plan
for any reason as a result of the termination of his employment.


 


13.5        The benefit of Rules 13.3 and 13.4


 


The benefit of
Rules 13.3 and 13.4 is given for the Company, for itself and as trustee and
agent of all the Participating Companies and Associated Companies.  The Company will hold the benefit of these
Rules on trust and as agent for each of them and may assign the benefit of this
Rule 13.5 to any of them.


 


13.6        Articles of association


 


Any Shares
acquired on the exercise of Options will be subject to the articles of
association of the Company from time to time.


 


13.7        Severability


 


The invalidity or
non-enforceability of one or more provisions of the Plan will not affect the
validity or enforceability of the other provisions of the Plan.


 


12

















 


13.8        Third Parties


 


This Plan confers
no benefit, right or expectation on a person who is not an Eligible
Employee.  No third party has any rights
under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this Plan.  Any other right or remedy
which a third party may have is unaffected by this Rule.


 


13.9        Data Protection


 


All Eligible
Employees agree as a condition of their participation in the Plan that any
personal data in relation to them may be held by a Participating Company and/or
a trustee and passed on to a third party where necessary for administration of
the Plan, including to countries or territories outside the European Economic
Area.


 


14.          Governing law


 


These Rules will
be governed by and construed in accordance with the law of England. All
Participants, the Company, and any other Participating Company or Associated
Company, will submit to the jurisdiction of the English courts in relation to
any dispute arising under the Plan.


 


13

















 


Appendix


 


	
  Act

  	
   

  	
  the Income Tax (Earnings & Pensions) Act 2003;

  
	
   

  	
   

  	
   

  
	
  Appendix

  	
   

  	
  this appendix which forms part of the Rules;

  
	
   

  	
   

  	
   

  
	
  Appropriate
  Period

  	
   

  	
  the relevant period referred to in paragraph 38(3) of Schedule 3;

  
	
   

  	
   

  	
   

  
	
  Associated
  Company

  	
   

  	
  the meaning given by paragraph 47(1) of Schedule 3;

  
	
   

  	
   

  	
   

  
	
  Board

  	
   

  	
  the board of directors for the time being of the Company or a duly
  constituted committee of the board;

  
	
   

  	
   

  	
   

  
	
  Bonus
  Date

  	
   

  	
  the date on which the bonus becomes payable under the terms of the
  relevant Savings Contract;

  
	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Cyclacel Group plc, registered in England and Wales under no.
  5090795;

  
	
   

  	
   

  	
   

  
	
  Continuous
  Service

  	
   

  	
  the same meaning as for “continuous employment” given in the
  Employment Rights Act 1996;

  
	
   

  	
   

  	
   

  
	
  Control

  	
   

  	
  in relation to a body corporate, the power of a person to secure:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           by means of the
  holding of shares or the possession of voting power in or in relation to that
  or any other body corporate; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           by virtue of any
  power conferred by the articles of association or other document regulating
  that or any other body corporate,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  that the affairs of the
  first-mentioned body corporate are conducted in accordance with the wishes of
  that person;

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant

  	
   

  	
  with respect to an Option, the date on which it is granted under
  Rule 4;

  
	
   

  	
   

  	
   

  
	
  Date
  of Invitation

  	
   

  	
  the date on which an invitation is made to Eligible Employees under
  Rule 2;

  
	
   

  	
   

  	
   

  
	
  Dealing
  Day

  	
   

  	
  any day on which the London Stock Exchange is open for the
  transaction of business;

  



 


14

















 


	
  Eligible
  Employee

  	
   

  	
  any person who at the Date of Grant is either:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           an employee or
  Full-Time Director of any Participating Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            whose earnings from his employment are
  (or would be if there were any) general earnings to which section 15 or
  section 21 of the Act applies; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           who has the qualifying period (if any) of
  Continuous Service (not exceeding 5 years prior to the Date of Grant) that
  the Board determines; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           any employee or
  executive director of a Participating Company not within (a) above who the
  Board determines to be an Eligible Employee in respect of any particular
  invitation,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  but excluding an Eligible Employee who is not eligible to participate
  in the Plan due to the provisions of paragraph 11 of Schedule 3 (material
  interest in a close company);

  
	
   

  	
   

  	
   

  
	
  Employees’
  Share Plan

  	
   

  	
  a scheme for encouraging or facilitating the holding of shares or
  debentures in a company by or for the benefit of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           the employees or
  former employees of the Company, the company’s subsidiary or holding company
  or a subsidiary of the Company’s holding company; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           the wives, husbands,
  widows, widowers or children or step-children under the age of 18 of such
  employees or former employees;

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price

  	
   

  	
  the total amount payable on exercise of an Option being an amount
  equal to the relevant Option Price multiplied by the number of Shares in
  respect of which the Option is exercised;

  
	
   

  	
   

  	
   

  
	
  Five
  Year Bonus

  	
   

  	
  the amount of bonus payable under a Savings Contract following the
  fifth anniversary of the start date of that Savings Contract and the payment
  of 60 monthly contributions under that Savings Contract;

  
	
   

  	
   

  	
   

  
	
  Full-Time
  Director

  	
   

  	
  a director whose terms of appointment require him to devote not less
  than 25 hours per week (excluding meal breaks) to his duties under the
  appointment;

  
	
   

  	
   

  	
   

  
	
  Group

  	
   

  	
  the Company and all companies which are under the Control of the
  Company;

  



 


15

















 


	
  Invitation
  Period

  	
   

  	
  the period of 42 days commencing on any of the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           the day after the
  date on which the Company releases its results for any financial period;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           the date of approval
  of the Plan under Schedule 3 of the Act;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)           any day on which the
  Board resolves that exceptional circumstances exist which justify the grant
  of options;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)           any day on which any
  change to the legislation affecting savings-related share option schemes
  approved by the Inland Revenue is announced or made;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)           the day immediately
  following any general meeting of the Company; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)            the day on which
  Shares are first Listed;

  
	
   

  	
   

  	
   

  
	
  Listed

  	
   

  	
  admitted to trading on a Recognised Stock Exchange and Listing will
  be construed accordingly;

  
	
   

  	
   

  	
   

  
	
  London
  Stock Exchange

  	
   

  	
  the London Stock Exchange plc or any successor body carrying on the
  business of the London Stock Exchange plc;

  
	
   

  	
   

  	
   

  
	
  Market
  Value

  	
   

  	
  in relation to a Share on any day:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           if the Shares are not
  Listed, an amount equal to its market value determined in accordance with
  Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed with the
  Shares Valuation Division of the Inland Revenue in advance of the Date of
  Invitation; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           if the Shares are
  Listed, its middle market quotation as derived from the Daily Official List
  of the London Stock Exchange;

  
	
   

  	
   

  	
   

  
	
  Maximum
  Contribution

  	
   

  	
  the lesser of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           a Monthly
  Contribution of £250 or any other maximum amount permitted under paragraph 25
  of Schedule 3 as the maximum amount of a Monthly Contribution; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           the maximum Monthly
  Contribution determined by the Board;

  



 


16

















 


	
  Minimum
  Contribution

  	
   

  	
  the lesser of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           a Monthly
  Contribution of £10 or any other amount stipulated under Schedule 3 as the
  minimum amount of a Monthly Contribution; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           the minimum Monthly
  Contribution determined by the Board, not being less than £5;

  
	
   

  	
   

  	
   

  
	
  Monthly
  Contribution

  	
   

  	
  the monthly amount agreed to be paid by a Participant under a Savings
  Contract;

  
	
   

  	
   

  	
   

  
	
  Option

  	
   

  	
  a right to acquire Shares under the Plan;

  
	
   

  	
   

  	
   

  
	
  Option
  Price

  	
   

  	
  the price determined by the Board under Rule 2.3 at which a Share
  subject to an Option may be acquired on the exercise of that Option;

  
	
   

  	
   

  	
   

  
	
  Participant

  	
   

  	
  any person who has been granted an Option including, if relevant, his
  personal representatives;

  
	
   

  	
   

  	
   

  
	
  Participating
  Company

  	
   

  	
  the Company and any other company in the Group to which the Board has
  resolved that the Plan will extend;

  
	
   

  	
   

  	
   

  
	
  Plan

  	
   

  	
  the Cyclacel Group plc Savings Related Share Option Plan, as amended
  from time to time in accordance with the Rules;

  
	
   

  	
   

  	
   

  
	
  Plan
  Period

  	
   

  	
  the period starting on the date the Plan is approved by the Company
  in general meeting and ending on the 10th anniversary of that date;

  
	
   

  	
   

  	
   

  
	
  Redundancy

  	
   

  	
  termination of the Participant’s employment by reason of redundancy
  within the meaning of the Employment Rights Act 1996;

  
	
   

  	
   

  	
   

  
	
  Recognised
  Stock Exchange

  	
   

  	
  the London Stock Exchange and any other stock exchange outside the
  United Kingdom that is for the time being designated for the purpose of
  section 841 of the Taxes Act as a recognised stock exchange;

  
	
   

  	
   

  	
   

  
	
  Retirement

  	
   

  	
  retirement from the office or employment by virtue of which a
  Participant is eligible to participate in the Plan on reaching the Specified
  Age or any other age at which the Participant is bound to retire under the
  Participant’s contract of employment;

  
	
   

  	
   

  	
   

  
	
  Rules

  	
   

  	
  the rules of the Plan as amended from time to time;

  
	
   

  	
   

  	
   

  
	
  Savings
  Body

  	
   

  	
  the savings body designated by the Board for the purpose of the Plan;

  
	
   

  	
   

  	
   

  
	
  Savings
  Contract

  	
   

  	
  a contract under a certified contractual savings scheme within the
  meaning of section 326 of the Taxes Act which is approved by the Board of the
  Inland Revenue for the purposes of Schedule 3;

  



 


17

















 


	
  Savings
  Contract Repayment

  	
   

  	
  (a)           the aggregate
  repayment which corresponds to any particular rate of saving under a Savings
  Contract, being the repayment of all Savings Contributions plus the Three
  Year Bonus, the Five Year Bonus or the Seven Year Bonus, as applicable,
  payable on the Bonus Date; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           to the extent that
  Rules 3 or 5 apply to adjust the number of Shares under Option, the amount
  applied to calculate the number of Shares comprised in the Option;

  
	
   

  	
   

  	
   

  
	
  Schedule
  3

  	
   

  	
  Schedule 3 to the Act;

  
	
   

  	
   

  	
   

  
	
  Seven
  Year Bonus

  	
   

  	
  the amount of bonus payable under a Savings Contract following the
  seventh anniversary of the starting date of that Savings Contract and payment
  of 60 monthly contributions under that Savings Contract;

  
	
   

  	
   

  	
   

  
	
  Share

  	
   

  	
  a fully paid ordinary share in the capital of the Company which
  satisfies the conditions of paragraphs 18 to 22 of Schedule 3;

  
	
   

  	
   

  	
   

  
	
  SIP

  	
   

  	
  an Inland Revenue approved Share Incentive Plan;

  
	
   

  	
   

  	
   

  
	
  Specified
  Age

  	
   

  	
  55 years;

  
	
   

  	
   

  	
   

  
	
  Taxes
  Act

  	
   

  	
  The Income and Corporation Taxes Act 1988;

  
	
   

  	
   

  	
   

  
	
  Three
  Year Bonus

  	
   

  	
  The amount of bonus payable under a Savings Contract following the
  third anniversary of the starting date of that Savings Contract and payment
  of 36 monthly contributions under that Savings Contract; and

  
	
   

  	
   

  	
   

  
	
  Variation

  	
   

  	
  in relation to the equity share capital of the Company, a
  capitalisation issue, an offer or invitation made by way of rights, a
  subdivision, consolidation, reduction or any other variation in respect of
  which the Inland Revenue will allow an adjustment of Options.

  



 


18