|   | **Exhibit 4.11** |
|--------|------------------|

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**RULES**

**of**

**THE UNITED UTILITIES PLC****PERFORMANCE SHARE PLAN**

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*Adopted**by resolutions of the boards of directors of**United Utilities PLC passed on 27 February 2001 and of**United Utilities Employee Share Trust Limited**passed on 29 March 2001**pursuant to the authority of an ordinary resolution**of United Utilities PLC**passed on 21 July 2000**Amended pursuant to Rule 9.4**by resolutions of the board of**United Utilities Employee Share Trust Limited**passed on 30 June 2003**and 29 September 2003*

----

 

 

----

**Rules of****The United Utilities PLC****performance share plan**

| **1** | **Definitions and interpretation** |
|-------|------------------------------------|

|   |                                                   |
|--------|--------------------------------------------------------|
| 1.1    | In these Rules, unless the context otherwise requires: |

|   |                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**the Adoption Date**" means    the later of the date upon which the Plan is adopted by the Company and the    date upon which is adopted by the Trustees; |

|   |                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Announcement Date**" means    a day on which the Company announces its results for any period to the London    Stock Exchange not being a day falling prior to the Adoption Date; |

|   |                                                                                  |
|--------|---------------------------------------------------------------------------------------|
|   | "**the Auditors**" means    the auditors for the time being of the Company; |

|   |                                                                                           |
|--------|------------------------------------------------------------------------------------------------|
|   | **"Award"** means a Contingent Award and/or an Option Award as the case may require; |

|   |                                                                                                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------|
|   | "**Award Certificate**" means,    in relation to an Award, the certificate issued in accordance with Rule 3.7; |

|   |                                                                                                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | “**Award Deed**” means    a deed executed or to be executed by the Trustees in accordance with Rule    3.6 for the purpose of making an Award; |

|   |                                                                 |
|--------|----------------------------------------------------------------------|
|   | "**Award Period**" means    each of the following periods: |

|   |   |
|--------|--------|
|   | (a)    | the period of 42 days following the Adoption Date; and |

|   |   |
|--------|--------|
|   | (b)    | each period of 42 days following an Announcement Date; |

|   |                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------|
|   | "**Business Day**" means    a day on which the London Stock Exchange is open for business in London; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**the Committee**" means    the committee of the board of directors of the Company whose principal task    is to consider and determine (or recommend to the board of directors) the    remuneration (in all its forms) of, among others, executive directors of    the Company or, in the absence of any such committee, such other committee,    consisting principally of non-executive directors, to which the operation    of the Plan may be delegated by the board of directors of the Company; |

|   |                                                                               |
|--------|------------------------------------------------------------------------------------|
|   | "**the Company**" means    United Utilities PLC (Registered No.2366616); |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Contingent Award"** means an award made by the Trustees to a Participant upon terms that the Trustees will, subject to and in accordance with the Rules of the Plan and the Award Certificate, transfer to such Participant Ordinary Shares on or following the Vesting Date in relation to that award and for the time being subsisting or (where the context so requires or permits) such an award proposed to be so made; |

|   |                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------|
|   | "**control**" has    the meaning ascribed thereto by section 840 Income and Corporation Taxes    Act 1988; |

|   |                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Date of Award**" means,    in relation to any Award, the date on which such Award is to be treated as    made in accordance with Rule 3.6; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Eligible Employee**" means    any person who, at the Date of Award of an Award, is a director (other than    a non-executive director) or employee of any one or more companies within    the Group who is required (otherwise than during any period of absence on    holiday or on maternity leave or paternity leave or parental leave or due    to illness) to devote substantially the whole of his or her working time    to his or her duties for the Group, provided that such director or employee    is not, at such Date of Award, within two years of his normal retirement    date; |

1

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|   | "**employees' share scheme**" has    the meaning given thereto in section 743 Companies Act 1985; |
|--------|-------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Exercise Period**" means,    in relation to an Option Award, the period commencing on the Vesting Date    in relation to that Option Award and ending three months thereafter or, if    the Participant, not having previously exercised the Option Award, shall    be prevented from so doing on the last day of the said period of three months    by virtue of Rule 7.1, ending 30 days after the first day thereafter on which    he shall not be so prevented; |

|   |                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Financial Year**" means    an accounting reference period or other period for which the Company makes    up its statutory accounts; |

|   |                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Group**" means    the Company and its subsidiaries (within the meaning of section 736 Companies    Act 1985) for the time being; |

|   |                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**the London Stock Exchange**" means    the recognised stock exchange known at the Adoption Date as the London Stock    Exchange or other the principal recognised stock exchange in the United Kingdom; |

|   |                                                                                |
|--------|-------------------------------------------------------------------------------------|
|   | **"Market Value"** means    in relation to an Ordinary Share on any date: |

|   |   |
|--------|--------|
|        | (a)    | if the Ordinary Shares have been admitted to the Official List of the UK ListingAuthority and to trading on the London Stock Exchange, the middle market quotationof an Ordinary Share as derived from the Daily Official List of the London StockExchange (or other competent authority within the meaning given thereto in section147(6) Financial Services Act 1986) dated the Business Day immediately precedingsuch date; or |

|   |   |
|--------|--------|
|        | (b)    | if the Ordinary Shares are not then so listed and traded on the London StockExchange, market value as determined for the purposes of the Plan by the Trusteeshaving regard to the provisions of Part VIII of the Taxation of Chargeable GainsAct 1992; |

|   |                                                                           |
|--------|--------------------------------------------------------------------------------|
|   | "**the Notified Sum**" has    the meaning given thereto in Rule 7.6: |

|   |                                                                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **"Option Award"** means    a right to acquire Ordinary Shares in accordance with the Rules of the Plan    and the Award Certificate granted by the Trustees to a Participant and for    the time being subsisting or (where the context so requires or permits) such    a right proposed to be so granted under the Plan; |

|   |                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------|
|   | "**Ordinary Share**" means    a fully paid ordinary share (of whatever class) in the capital of the Company; |

|   |                                                                                                                                        |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Participant**" means    a person to whom an Award has been made or (where the context admits) his    personal representatives; |

|   |                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------|
|   | "**Performance Certificate**" means    a certificate to be delivered in accordance with Rule 4.1; |

|   |                                                                                                                                                                                                                    |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **"Performance Condition"** means    any performance or other condition imposed by the Trustees pursuant to Rule    3.4 in relation to an Award and specified in the Award Deed in relation to    that Award; |

|   |                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Performance Period**" means,    in relation to an Award, the period determined by the Trustees and specified    in the Award Deed in relation to such Award; |

|   |                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   | "**the Plan**" means    the performance share plan constituted by these Rules as from time to time    amended and in force; |

2

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|   | "**Share Schemes**" means: |
|--------|--------------------------------------|

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

|   | (a)    | the Plan; and                                                                |
|--------|--------|------------------------------------------------------------------------------|
|   |   |                                                                         |
|   | (b)    | any other employees' share scheme adopted by the Company in general meeting; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**the Trust**" means    the United Utilities Employee Share Trust established by a trust deed dated    21 August 1996 and made between the Company (1) and United Utilities Employee    Share Trust Limited (2) as from time to time amended or varied or any other    trust for the benefit of Eligible Employees amongst others the trustees of    which may agree to accept the obligations of the Trustees under the Plan    whether in addition to or in substitution for the existing Trustees; |

|   |                                                                                      |
|--------|-------------------------------------------------------------------------------------------|
|   | “**the Trustees**” means    the trustees for the time being of the Trust; and |

|   |                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | "**Vesting Date**" means,    in relation to an Award, the date upon which a Performance Certificate is    issued in respect of the Award or such earlier date on which the Award has    become exercisable or vested in accordance with the Plan and the applicable    Award Deed. |

|   |                                                                                                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.2    | A Participant shall for the purposes of the Plan be treated asbeing in "**Qualifying Service**" at any time if at that time heis a director, other than a non-executive director, or an employee of any memberof the Group. |

|   |            |
|--------|-----------------|
| 1.3    | In these Rules: |

|   |   |
|--------|--------|
|   | (a)    | unless the context otherwise requires, words importing the singular only shallinclude the plural and vice versa, words importing the masculine gender onlyshall include the feminine gender and words importing natural persons shall alsoinclude corporations; and |

|   |   |
|--------|--------|
|   | (b)    | references to any statute or statutory provision shall include(i) any subordinate legislation made under it and (ii) any provision supersedingit or re-enacting it (whether with or without modification); |

|   |   |
|--------|--------|
|   | (c)    | references to a Rule or Rules are to a rule or rules of the Plan; and |

|   |   |
|--------|--------|
|   | (d)    | the descriptive headings to Rules are inserted for convenience only, have nolegal effect and shall be ignored in the interpretation of these Rules. |

|   |                                               |
|--------|----------------------------------------------------|
| **2**  | **Notifications by the Committee to the Trustees** |

|   |                                                                                         |
|--------|----------------------------------------------------------------------------------------------|
| 2.1    | The Committee may, in relation to any present or future Award Period, notifythe Trustees of: |

|   |   |
|--------|--------|
|   | (a)    | the names of Eligible Employees to whom the Committee recommends that Awardsbe made in that Award Period and the type of Award which it recommends shouldbe made; |

|   |   |
|--------|--------|
|   | (b)    | the amount in respect of each such Eligible Employee (being an amount not exceeding80% of the Eligible Employee’s annual rate of salary (excluding benefitsin kind) as at the intended Date of Award, unless the Committee consider thereare exceptional circumstances justifying a higher amount for any Eligible Employee)which the Committee recommends be applied to determine the maximum value of theAward to be made to the Eligible Employee in that AwardPeriod; and |

|   |   |
|--------|--------|
|        | (c)    | the Performance Period and the Performance Condition(s) which the Committee recommendsin relation to any Awards made in that Award Period. |

3

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| 2.2 | The Committee may recommend to the Trustees and the Trustees may make an Awardor Awards at any time not within an Award Period at which the Committee considersthat exceptional circumstances exist which justify the making of an Award orAwards and in such event the Committee shall notify the Trustees of the mattersset out in Rule 2.1 in relation to such proposed Award or Awards. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                 |
|--------|----------------------|
| 3      | **Making of Awards** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    | The Trustees may, in their discretion, make Awards, during any Award Period orat any other such time as is referred to in Rule 2.2, to all or any of the EligibleEmployees recommended by the Committee in accordance with Rule 2 for Awards inthat Award Period or at that time, provided that, if, by reason of statute, order,rule, regulation or government directive or any undertaking or agreement to whichthe Company may for the time being be a party as a condition of or in consequenceof its ordinary share capital being traded on or dealt in on any recognised stockexchange, the Trustees shall be restricted from making Awards within any AwardPeriod, Awards may be made within the period of 42 days after the lifting ofsuch restrictions. |

|   |                                            |
|--------|-------------------------------------------------|
| 3.2    | Each Award shall comprise one of the following: |

|   |   |
|--------|--------|
|   | (a)    | an Option Award, being the grant by the Trustees to the relevant Participantof an option to acquire for nil consideration from the Trustees up to such numberof Ordinary Shares as is specified in the Award Deed relating to such OptionAward upon the terms and in accordance with the Rules of the Plan and the provisionsof the Award Deed relating to such Option Award; or |

|   |   |
|--------|--------|
|   | (b)    | a Contingent Award, being a contingent award by the Trustees to a Participantupon terms whereby the Trustees will, subject to the Rules of the Plan and therelevant Award Deed, on or following the Vesting Date in relation to that ContingentAward transfer to such Participant up to such number of Ordinary Shares as isspecified in the relevant Award Deed. |

|   |                                                                                                                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.3    | The maximum number of Ordinary Shares comprised in an Award to any Eligible Employeeshall be determined by dividing the amount recommended by the Committee in accordancewith Rule 2.1(b) or such lesser amount as the Trustees may decide by the MarketValue of an Ordinary Share on the applicable Date of Award. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.4    | In making any Award under the Plan the Trustees shall determine that the exerciseor vesting of such Award shall be conditional on the satisfaction of one or moreperformance or other conditions determined by the Trustees on the recommendationof the Committee before such Award is made. Any such Performance Condition mayprovide that the Award shall become exercisable or, as the case may be, shallvest in respect of a given number or proportion of the Ordinary Shares comprisedin the Award according to whether, and the extent to which, such condition ismet. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.5    | If prior to the satisfaction of any Performance Condition imposed pursuant toRule 3.4, an event occurs which causes the Trustees reasonably to considerthat any such Performance Condition would not, without some alteration or addition,achieve its original purpose, the Trustees may, after consulting with the Committee,make such alteration or addition to such Performance Condition as it considersfair and reasonable but so that such Performance Condition shall not be any moredifficult to satisfy after such alteration or addition than it was as originallyimposed. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.6    | An Award shall be made to an Eligible Employee by deed in such form as the Trusteesmay decide (an “**Award Deed**”) which shall be executed by theTrustees and shall take effect on delivery of the Award Deed by the Trustee,provided that, unless the Eligible Employee has previously irrevocably agreedin writing with the Trustees to be bound by the Rules of the Plan and the termsof any Award which may made to him, the Award shall be conditional upon the EligibleEmployee so agreeing in writing with the Trustees within 90 days after the dateof delivery of the Award Deed by the Trustees and, if the Eligible Employee shallfail to execute such an agreement within such period, the Award shall lapse andbe deemed never to have been made. |

4

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| 3.7 | An Award shall be evidenced by an Award Certificate (which may, but need not,constitute an Award Deed) issued by or on behalf of the Trustees to the Participantspecifying: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
|   | (a)    | the Date of Award; |

|   |   |
|--------|--------|
|   | (b)    | whether the Award is an Option Award or a Contingent Award; |

|   |   |
|--------|--------|
|   | (c)    | the maximum number of Ordinary Shares to which the Award relates, being the maximumnumber of Ordinary Shares which may be acquired on exercise of an Option Awardor the maximum number of Ordinary Shares which may vest pursuant to a ContingentAward; |

|   |   |
|--------|--------|
|   | (d)    | the Performance Period; and |

|   |   |
|--------|--------|
|   | (e)    | details of any Performance Conditions imposed in relation to the Award pursuantto Rule 3.4. |

|   |                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
| 3.8    | No monetary consideration shall be payable for the making or grant of an Awardor in the respect of the vesting or exercise of any Award. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.9    | Each Award shall be personal to the Participant and shall not (save as providedin Rules 6.1 and 6.3) be capable of being transferred, assigned, charged, encumberedor in any way dealt in or of being listed or dealt in on any stock exchange and,if (save as aforesaid) any Award or any interest therein is or is purported tobe transferred, assigned, charged, encumbered or in any way dealt in, such Awardshall lapse and the Trustees shall not knowingly permit its vesting or exercise. |

|   |                                                                                  |
|--------|---------------------------------------------------------------------------------------|
| 3.10   | No Award shall be made on a date which is more than ten years after the AdoptionDate. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.11   | The Company may in any such written agreement between the Participant and theTrustees as is referred to in Rule 3.6, if and to the extent so permitted bylaw, make it a condition of the exercise of an Option Award that the Participantmakes good to the Trustees or the Company or any other member of the Group orany other person (other than the Participant) all or such part as may be specifiedin the Award Deed of any secondary national insurance contributions for whichthe Trustees, the Company or any other member of the Group or any such otherperson is liable as a consequence of such exercise. |

|   |                                        |
|--------|---------------------------------------------|
| **4**  | **Certification of Performance Conditions** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1    | The Company shall or shall procure that, as soon as practicable after the endof the Performance Period in relation to any Awards, it shall be ascertainedwhether or not all or any of the Performance Conditions have been satisfied andthe Company shall use its reasonable endeavours to cause a writtennotice (a "**Performance Certificate**") to be issued to the Trusteeswithin four months following the expiry of the relevant Performance Period notifyingthe Trustees whether or not the Awards, if they are Option Awards, are exercisableor, if they are Contingent Awards, have vested in accordance with the Plan andthe Award Certificate and |

|   |   |
|--------|--------|
|   | (a)    | if the Performance Certificate shall notify the Trustees that none of the PerformanceConditions has been satisfied, the Award shall lapse in its entirety forthwithupon receipt by the Trustees of the Performance Certificate; or |

|   |   |
|--------|--------|
|   | (b)    | if the Performance Certificate shall notify the Trustees that an Award is exercisableor has vested in accordance with Rule 4.1, it shall also notify the Trusteesof the number of Ordinary Shares in respect of which the Award, if it is an OptionAward, may be exercised by the Participant or, if the Award is a Contingent Award,has vested and the Award shall lapse forthwith upon receipt by the Trustees ofthe Performance Certificate in respect of any Ordinary Shares in respect of whichit does not then become exercisable or does not then vest. |

5

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| 4.2 | The Company shall give notice in writing to the Participant of the informationnotified to the Trustees in accordance with Rule 4.1 relating to any Award madeto him. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**5**      **Exercise and Vesting of Award in normal circumstances**

| 5.1 | Save as otherwise provided in Rule 6, an Option Award shall only be capable ofbeing exercised and a Contingent Award shall only be capable of vesting: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
|   | (a)    | if the Participant has been in Qualifying Service throughout the period commencingon the applicable Date of Award and ending at the end of the applicable PerformancePeriod; and |

|   |   |
|--------|--------|
|   | (b)    | if the Performance Certificate issued pursuant to Rule 4.1 shall certify thatthe Performance Conditions imposed pursuant to Rule 3.4 havebeen satisfied |

|   |                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------|
|   | but shall only be exercisable or vest to the extent specified in the relevant Performance Certificate. |

|   |                                                                           |
|--------|--------------------------------------------------------------------------------|
| 5.2    | An Award shall lapse on the happening of the earliest of the following events: |

|   |   |
|--------|--------|
|   | (a)    | where Rule 4.1(a) applies, the receipt by the Trustees of the relevant PerformanceCertificate; |

|   |   |
|--------|--------|
|   | (b)    | where Rule 4.1(b) applies, the receipt by the Trustees of the relevant PerformanceCertificate, but only to the extent determined in accordance with the relevantPerformance Certificate; |

|   |   |
|--------|--------|
|   | (c)    | in the case of an Option Award, the expiry of its Exercise Period, unless theParticipant shall have died at any time before the expiry of the Exercise Period; |

|   |   |
|--------|--------|
|   | (d)    | the Participant ceasing to be in Qualifying Service during the applicable PerformancePeriod save to the extent (if any) to which the Trustees permit him (or his personalrepresentatives) to exercise of the Option Award or permit the Award to vestin each case pursuant to Rule 6.1 or Rule 6.2; |

|   |   |
|--------|--------|
|   | (e)    | in the case of an Option Award, the expiry of the period permitted for the exerciseof the Option Award by the Participant's personal representatives in accordancewith Rule 6.1, Rule 6.3 or Rule 6.4; |

|   |   |
|--------|--------|
|   | (f)    | in the case of an Option Award, the expiry of the period permitted for exerciseby the Participant of the Option Award in accordance with Rule 6.2 unless theParticipant shall die during such period; |

|   |   |
|--------|--------|
|   | (g)    | the expiry of the period specified in accordance with Rule 6.6; |

|   |   |
|--------|--------|
|   | (h)    | the passing of a resolution for the voluntary winding up of the Company or themaking of an order for its compulsory winding up; |

|   |   |
|--------|--------|
|   | (i)    | the Participant becoming bankrupt; |

|   |   |
|--------|--------|
|   | (j)    | in the case of an Option Award, the tenth anniversary of its Date of Award; and |

|   |   |
|--------|--------|
|   | (k)    | in the case of an Option Award, the first anniversary of the death of the Participant. |

|   |                                                                |
|--------|---------------------------------------------------------------------|
| **6**  | **Right to exercise and vesting of Award in special circumstances** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.1    | In the event of the death of the Participant during the Performance Period ofan Award while he is in Qualifying Service and prior to the occurrence of anysuch event as is referred to in any of Rules 6.5, 6.6 and 6.7, the Trustees may,in their discretion but subject to the consent of the Committee, cause the Awardto vest immediately to such extent as the Trustees may determine in accordancewith Rule 6.8 and, in the case of an Option Award, may permit the personal representativesof the Participant to exercise the Option Award to the extent so determined duringsuch period (not exceeding 12 months) after the date of the Participant’sdeath as they may determine. |

6

----

 

| 6.2 | In the event of a Participant ceasing to be in Qualifying Service, during thePerformance Period of an Award and prior to the occurrence of any such eventas is referred to in any of Rules 6.5, 6.6 and 6.7, by reason of: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
|   | (a)    | retirement on or after reaching his normal retirement date or, with the consentof the Committee, prior to that date; |

|   |   |
|--------|--------|
|   | (b)    | redundancy (within the meaning of the Employment Rights Act 1996); |

|   |   |
|--------|--------|
|   | (c)    | injury, disability or ill-health (evidenced to the satisfaction of the Companyand the Trustees); |

|   |                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------|
|   | (d)      the    company by which he is employed ceasing to be a member of the Group; |

|   |   |
|--------|--------|
|   | (e)    | the undertaking in which he is employed being sold or transferred outside theGroup; or |

|   |   |
|--------|--------|
|   | (f)    | other special circumstances as determined by the Trustees with the consent ofthe Committee; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | the Trustees may, in their discretion but subject to the consent of the Committee, permit the Award to vest after the issue of the Performance Certificate in respect of such Award at the conclusion of the Performance Period but so that the maximum number of Ordinary Shares in respect of which the Award shall be capable of so vesting shall be reduced in accordance with Rule 6.9 and provided that, except in a case falling within Rule 6.2(f), the Trustees may, in their discretion but subject to the consent of the Committee, cause the Award to vest immediately to such extent as the Trustees may determine in accordance with Rule 6.8 and, in the case of an Option Award, may permit the Participant to exercise the Option Award to the extent sodetermined during such period as they may determine. |

|   |                                          |
|--------|-----------------------------------------------|
| 6.3    | In the event of the death of the Participant: |

|   |   |
|--------|--------|
|   | (a)    | after the end of the Performance Period of an Option Award and before the expiryof its Exercise Period; or |

|   |   |
|--------|--------|
|   | (b)    | while he is entitled to exercise an Option Award pursuant toRule 6.2, |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | his personal representatives may exercise that Option Award (in so far as it shall not have lapsed under any other Rule) during the period of 12 months following the date of the Participant's death, but, in the case of his death while he was entitled to exercise an Option Award pursuant to Rule 6.2, only to the extent to which he was permitted to exercise such Option Award in accordance with Rule 6.2. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.4    | In the event of the death of the Participant after he has ceased to be in QualifyingService and before an Award has become exercisable or vested in accordance withRule 6.2 and prior to the occurrence of any such event as is referred to in anyof Rules 6.5, 6.6 and 6.7, the Trustees may, in their discretion but subjectto the consent of the Committee, cause the Award to vest immediately to suchextent as the Trustees may determine in accordance with Rule 6.8 and, in thecase of an Option Award, may permit the personal representatives of the Participantto exercise the Option Award to the extent so determined during such period (notexceeding 12 months) after the date of the Participant’s death as theymay determine. |

7

----

 

| 6.5 | In the event that notice is given to shareholders of the Company of a resolutionto approve the reconstruction or demerger of the Company or of any other memberof the Group, the Trustees may make such provision for the variation of the termsof any Award and/or the applicable Performance Condition(s) and/or for earlyexercise or early vesting (in whole or in part) of Awards as the Trustees shall,in the exercise of their discretion (having regard to the recommendation of theCommittee), consider appropriate to take proper account of such circumstances,provided that: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
|   | (a)    | in exercising such discretion for this purpose the Trustees shall have due regardto the object and purposes of the Company and the Trustees in establishing thePlan; |

|   |   |
|--------|--------|
|   | (b)    | no such provision shall be made without the consent of the Committee; and |

|   |   |
|--------|--------|
|   | (c)    | no such provision shall take effect so as to abrogate the rights of a Participantwithout the Trustees first obtaining his consent in writing. |

|   |                                                     |
|--------|----------------------------------------------------------|
| 6.6    | If during the Performance Period of an Award any person: |

|   |   |
|--------|--------|
|   | (a)    | obtains control of the Company as a result of making a general offer: |

|   |   |
|--------|--------|
|   |   | (i) | to acquire the whole of the issued share capital of the Company made subjectto a condition such that if it is satisfied the person making the offer willhave control of the Company; or |

|   |   |
|--------|--------|
|   |   | (ii) | to acquire all the shares in the Company which are of the same class as the OrdinaryShares; |

|   |   |
|--------|--------|
|   | (b)    | obtains control of the Company in pursuance of a compromise or arrangement sanctionedby the Court under section 425 Companies Act 1985; or |

|   |   |
|--------|--------|
|   | (c)    | becomes bound or entitled to acquire Ordinary Shares under sections 428 to 430F(inclusive) Companies Act 1985; |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | then the Trustees may, in their    discretion but subject to the consent of the Committee, permit the Participant    to exercise an Option Award which has not yet become exercisable or may cause    a Contingent Award which has not yet vested to vest within such reasonable    period as the Trustees shall determine and notify to the Participant in writing    to such extent as the Committee may, in their discretion but subject to the    consent of the Committee, determine in accordance with Rule 6.10, notwithstanding    that such exercise or vesting is within the Performance Period of the Award,    provided that the provisions of Rule 6.5 shall apply, and this Rule 6.6    shall not apply, in relation to any circumstances in which any person acquires    control of the Company in consequence of a reconstruction which falls within    the provisions of sections 135 to 139 Taxation of Chargeable Gains Act 1992. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.7    | In the event of notice being given to shareholders of the Company during thePerformance Period of any Award convening a meeting to consider a resolutionfor the members' voluntary winding up of the Company, the Trustees may, in theirdiscretion but subject to the consent of the Committee, permit the Participantto exercise the Award if it is an Option Award or may cause the Award to vestat any time before the commencement of the winding up to such extent as the Committeemay, in their discretion but subject to the consent of the Committee, determinein accordance with Rule 6.10, notwithstanding that such exercise or vesting iswithin the Performance Period. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.8    | An Award may only be exercised or vest in the circumstances set out in Rule 6.1,in the proviso to Rule 6.2 or in Rule 6.4 if and to the extent that the Trustees,acting on the recommendation of the Committee, are satisfied that the PerformanceConditions imposed pursuant to Rule 3.4 have been satisfied on such modifiedbasis as they think fit over the period from the beginning of the PerformancePeriod to the date on which the Participant ceased to be in Qualifying Serviceand, for the purpose of determining the number of Ordinary Shares in respectof which the Award vests as a consequence of the extent (if any) to which thePerformance Condition(s) have been so satisfied, the maximum number of OrdinaryShares comprised in the Award shall be such reduced number as is determined inaccordance with Rule 6.9. |

8

----

 

| 6.9 | For the purpose of calculating the number of Ordinary Shares in respect of whichan Award may be exercised by the Participant or which may be permitted to vestpursuant to any of Rules 6.1, 6.2 and 6.4. the maximum number of Ordinary Sharescomprised in the Award shall be reduced to the proportion of the number of OrdinaryShares originally comprised in the Award which equals the proportion which thenumber of days which have elapsed from and including the first day of the applicablePerformance Period to and including the day upon which the Participant ceasedto be in Qualifying Service bears to the number of days in the Performance Period. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.10   | Awards may only be exercised or vest in the circumstances setout in Rule 6.6 or Rule 6.7 if and to the extent that the Trustees, actingon the recommendation of the Committee, consider it fair and reasonable takinginto account the extent to which the Performance Conditions applied over suchmodified period as the Trustees consider appropriate have been satisfied andsuch other criteria as the Trustees in their discretion consider relevant. |

|   |                               |
|--------|------------------------------------|
| **7**  | **Exercise and Vesting of Awards** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.1    | No Option Award shall be exercised and no Ordinary Shares shall be issued ortransferred pursuant to the grant or vesting of any Award save in accordancewith the then current model code on directors' dealings in listed securitiestraded on the London Stock Exchange or such other code of dealing in terms noless exacting than such model code as may be adopted by the Company. This restrictionshall apply to all Participants and not only to directors of the Company. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.2    | All transfers of Ordinary Shares to a Participant on the grant or vesting ofan Award or on the exercise of an Option Award will be subject to the obtainingof any necessary consents under any relevant enactments or regulations for thetime being in force and it shall be the responsibility of the Participant tocomply with any requirements to be fulfilled in order to obtain or obviate anysuch consents. |

|   |                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.3    | An Option Award may only be exercised by a Participant giving notice in writingto the Company in the form and manner prescribed by the Committee. |

|   |                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.4    | An Option Award shall be capable of exercise on one occasion only and, if anOption Award is exercised in respect of part only of the Ordinary Shares thensubject to that Option Award, that Option Award shall lapse in respect of thebalance of such Ordinary Shares. Exercise of an Option Award shall only be effective: |

|   |   |
|--------|--------|
|   | (a)    | upon receipt of the duly completed form of exercise and |

|   |   |
|--------|--------|
|   | (b)    | any payment, authority or other security required in accordancewith Rule 7.6. |

|   |                                                                                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.5    | The exercise of an Option Award by a Participant and the execution by any Participantof such an agreement as is referred to in Rule 3.6 shall constitute theagreement and undertaking of the Participant with the Trustees that he will forthwithupon written demand from the Company pay to the Company or as the Company maydirect: |

|   |   |
|--------|--------|
|        | (a)    | any amount of income tax or other tax of the United Kingdom or primary nationalinsurance contributions of the United Kingdom for which the Participant may beliable or which may be payable in respect of the Participant as a consequenceof the grant or exercise or vesting of any Award or any appropriation or transferof any Ordinary Shares to a Participant pursuant to the Plan or any payment toa Participant pursuant to the Plan and which the Trustees, the Company or anyother member of the Group (past or present) or any other person (other than theParticipant) is required (whether such requirement is legally enforceable ornot) to pay to the Inland Revenue or any other taxation authority; and |

9

----

 

|  | (b) | any amounts of secondary national insurance contributions for which the Trustees,the Company or any such other member of the Group or any such other person isliable as a consequence of the grant or exercise or vesting of any Award or anyappropriation or transfer of any Ordinary Shares to a Participant pursuant tothe Plan or any payment to a Participant pursuant to the Plan to the extent thatthe Trustees, the Company or any such other member of the Group or any such otherperson may lawfully be entitled to require, or may lawfully have agreed withthe Participant, that the Participant will make good the same to the Trustees,the Company or any other member of the Group (past or present) or any such otherperson; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | and shall also constitute authority to the Trustees, the Company, each such other member of the Group and any such other person to deduct any amount so demanded which remains unpaid from payments otherwise payable to the Participant, including but not limited to authority to deduct from wages or salary for the purposes of Part II of the Employment Rights Act 1996. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.6    | Without prejudice to the generality of Rule 7.5, the Company may, as soon aspracticable following the Vesting Date in relation to an Award or following thereceipt of a notice of exercise of an Option Award, notify the Participant inwriting of the amount (if any) ("**the Notified Sum**") which inits reasonable opinion it estimates the Trustees, the Company or any member ofthe Group (past or present) or any other person (other than the Participant)will be required (whether such requirement is legally enforceable or not) topay to the Inland Revenue and/or the Contributions Agency in respect of |

|   |   |
|--------|--------|
|   | (a)    | income tax or primary national insurance contributions of the United Kingdomfor which the Participant is liable or which is payable in respect of the Participantas a consequence of the grant or exercise or vesting of any Award or any appropriationor transfer of any Ordinary Shares to a Participant pursuant to the Plan or anypayment to a Participant pursuant to the Plan: and/or |

|   |   |
|--------|--------|
|   | (b)    | secondary national insurance contributions for which the Trustees, the Companyor any such other member of the Group or any such other person is liable as aconsequence of the grant or exercise or vesting of any Award or any appropriationor transfer of any Ordinary Shares to a Participant pursuant to the Plan or anypayment to a Participant pursuant to the Plan to the extent that the Trustees,the Company or any such other member of the Group or any such other person maylawfully be entitled to require, or may lawfully have agreed with the Participant,that the Participant will make good the same to the Trustees, the Company orany such other member of the Group or any such other person. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Subject as hereafter provided, upon the giving of such a notice the Participant shall thereupon be bound and obliged to pay the Notified Sum to the Company or as the Company may direct within such period thereafter (not being less than seven days) as may be specified in such notice and any obligation of the Trustees to transfer Ordinary Shares to the Participant as a result of the exercise or vesting of any Award shall be conditional upon receipt by the Company of the Notified Sum.  In the event that the Notified Sum proves to be an over-estimate, the Company shall on the date on which there is paid to the Inland Revenue or other taxation authority the sum actually so due repay to the Participant the excess of that part of the Notified Sumestimated to be due to the Inland Revenue or other taxation authority (as the case may be) not so paid.  In the event that the Notified Sum is less than the aggregate amount which is required to be so paid to the Inland Revenue and/or other taxation authority, the Participant shall forthwith on demand pay to the Company the balance of the amount so paid.  The Company may in their absolute discretion accept, in lieu of immediate payment of the Notified Sum, irrevocable authority in writing from the Participant (in form and substance satisfactory to the Trustees and the Company) authorising the Trustees to sell such number of the Ordinary Shares in respect of which the Award Option has been exercised or which have vested pursuant the Contingent Award as may be necessary to raise the requiredfunds and to apply the same in discharge of the Notified Sum and any further sum which may become due from the Participant as aforesaid or such other security in form and substance satisfactory to the Company for payment to the Company of the Notified Sum and any such further sum. |

10

----

 

| 7.7 | Subject to Rules 7.6 and 7.9, upon the exercise of an Option Award becoming effectiveor upon a Contingent Award vesting, the Trustees shall vest beneficial ownershipin the Participant of the number of Ordinary Shares in respect of which the OptionAward has been duly exercised or (as the case may be) the Contingent Award hasvested, free from all liens, charges and encumbrances and together with the rightto receive and retain, all dividends or other distributions paid or made on theordinary share capital of the Company by reference to a record date occurringon or after the date on which such exercise or vesting became effective. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.8    | Subject to Rules 7.6 and 7.9, within 28 days after the exercise or vesting ofan Award shall have become effective, the Trustees shall transfer to the Participantor as he may direct the legal title to the number of Ordinary Shares acquiredby the Participant pursuant to the exercise of an Option Award or pursuant tothe vesting of a Contingent Award. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.9    | Notwithstanding any other provision of the Rules of the Plan and/or the provisionsof any Award Deed, the Trustees may, following consultation with the Committee,elect (by written notice given by or on behalf of the Trustees to the Participantno later than the date upon which the relevant Performance Certificate is issuedto the Trustees) to satisfy their obligations to transfer all or any OrdinaryShares to which a Participant is entitled on exercise of an Option Award or onvesting of a Contingent Award by paying to the Participant an amount equal tothe Market Value at the date of vesting or exercise of such number of the OrdinaryShares in respect of which the relevant Award has become exercisable or vestedas the Trustees shall determine. Any such payment shall be made by the Trusteesto the relevant Participant within 28 days of the relevant Award vesting or becomingexercisable and shall be subject to deduction of any income tax and/or primarynational insurance contributions and/or any other tax for which the Trustees,the Company or any other member of the Group (past or present) or any other person(other than the Participant) is liable to account to the Inland Revenue or anyother taxation authority in respect of any such payment and/or any secondarynational insurance contributions which the Trustees may lawfully be entitledto require, or may lawfully have agreed with the Participant, that the Participantwill make good to the Trustees, the Company or any such other member of the Groupor any such other person in respect ofany such payment. |

|   |                           |
|--------|--------------------------------|
| **8**  | **Variation of share capital** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 8.1    | Upon any capitalisation issue or a rights issue or any reduction, sub-divisionor consolidation of the Company's share capital or any other variation of sharecapital, the number of Ordinary Shares subject to an Option Award may be adjustedin such manner and with effect from such dates as the Trustees may determineto be appropriate (not excluding retrospective adjustments where such variationoccurs after the Vesting Date in relation to the Option Award but the recorddate relating to such variation precedes such Vesting Date) provided that: |

|   |   |
|--------|--------|
|   | (a)    | no adjustment shall be made in the event of a capitalisation issue made for thepurpose of a scrip dividend to which section 249 Income and Corporation TaxesAct 1988 applies, unless such scrip dividend is an enhanced scrip dividend inwhich event the adjustment shall be limited to that necessary to take accountof so much of the ordinary share capital issued which would not have been issuedbut for such enhancement; and |

|   |   |
|--------|--------|
|   | (b)    | except in the case of a capitalisation issue (other than a capitalisation issuein connection with an enhanced scrip dividend), the Auditors (acting as expertsand not as arbitrators) shall have confirmed in writing to the Trustees or theCompany that the proposed adjustments have in their opinion been calculated inaccordance with current accounting standards (including but not limited to FRS14or its replacement from time to time); |

11

----

 

|   | and provided further that the issue of shares or securities as consideration for an acquisition shall not be regarded as a circumstance requiring any such adjustment. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                   |
| 8.2    | Notice of any    such adjustment shall be given to the Participants in writing.                                                                                        |

**9**      **Administration and amendment of the Plan**

| 9.1 | The decision of the Trustees as to any matter, question or dispute arising fromthe Plan (other than a matter to be certified by the Auditors) shall be finaland binding on all Eligible Employees and Participants. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 9.2    | The Trustees shall have the power from time to time to make and vary such regulations(not being inconsistent with the Plan) for the implementation and administrationof the Plan as they think fit. |

|   |                                                                |
|--------|---------------------------------------------------------------------|
| 9.3    | The Plan may be altered in any respect by the Trustees except that: |

|   |   |
|--------|--------|
|   | (a)    | no amendment shall be effective which would materially prejudice the interestsof Participants in relation to Awards already made or granted to them unlesswith such prior consent or sanction of Participants as would be required underthe provisions for the alteration of class rights contained in the Articles ofAssociation of the Company for the time being if the Ordinary Shares the subjectof the Awards constituted a separate but single class of shares (or two or moreclasses of shares according to the respective dates of award or grant as theTrustees may deem appropriate) and such shares were entitled to such rights;and |

|   |   |
|--------|--------|
|   | (b)    | save as provided in Rule 9.4, no amendment to the advantage of current or prospectiveParticipants shall be made, without the prior sanction of an ordinary resolutionof the Company in general meeting to: |

|   |   |
|--------|--------|
|   |   | (i) | the definition of Eligible Employee; |

|   |   |
|--------|--------|
|   |   | (ii) | the time or times at which and the circumstances in which Awards may be madeor be exercised or vest; |

|   |   |
|--------|--------|
|   |   | (iii) | the basis on which any adjustment may be made to the number of Ordinary Sharessubject to any Award; |

|   |   |
|--------|--------|
|   |   | (iv) | the basis of calculation of the total numbers of unissued Ordinary Shares availablefor the Plan; or |

|   |   |
|--------|--------|
|   |   | (v) | this Rule 9.3 or Rule 9.4; and |

|   |   |
|--------|--------|
|   | (c)    | no amendment shall be made without the prior approval of the Committee. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 9.4    | The Trustees may, without the sanction of an ordinary resolution of the Companyin general meeting but subject to the prior approval of the Committee, make minoramendments to the Plan to benefit the administration thereof or to obtain ormaintain favourable tax, exchange control or regulatory treatment for the Trustees,the Company, any other member of the Group or any existing, future or prospectiveParticipant. |

|   |                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 9.5    | Written notice of any material alteration made in accordance with Rule 9.3 orRule 9.4 shall be given to all Participants affected by the relevant alteration. |

|   |                                                                                             |
|--------|--------------------------------------------------------------------------------------------------|
| 9.6    | Notices or documents required to be given or sent to an Eligible Employee ora Participant shall: |

|   |   |
|--------|--------|
|   | (a)    | either be delivered to him by hand or sent to him at his home address accordingto the records of his employer; and |

12

----

 

|   | (b) | if sent by post be deemed to have been given on the third day following the dateof posting. |
|--------|-----|---------------------------------------------------------------------------------------------|

|   |                                 |
|--------|--------------------------------------|
| **10** | **Participants' legal entitlements** |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1   | The terms of employment of a Participant by the Company or any other member ofthe Group shall not be affected by his participation in the Plan which shallnot form part of such terms. In no circumstances shall a person ceasing to bein Qualifying Service by reason of dismissal or otherwise howsoever be entitledto or claim against the Trustees, the Company or any other member or former memberof the Group any compensation for or in respect of any consequent diminutionor extinction of his rights or benefits (actual or prospective) under any Awardsthen held by him or otherwise in connection with the Plan. |

|   |                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2   | Any Award made to a Participant shall not be pensionable and shall not be broughtinto account for the purposes of calculating any salary-related benefits of theParticipant. |

|   |                           |
|--------|--------------------------------|
| **11** | **Limitations on the Company** |

|   |                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 11.1   | The aggregate number of unissued Ordinary Shares which the Company may on anyday issue for the purposes of the Plan shall be limited so that it shall notexceed, when aggregated with: |

|   |   |
|--------|--------|
|   | (a)    | ordinary shares that have been issued by the Company within the period of tenyears ending on that day pursuant to the Plan or any other Share Schemes otherwisethan on the exercise of options and |

|   |   |
|--------|--------|
|   | (b)    | ordinary shares that have been issued or remain issuable by the Company in respectof options granted within the said period of ten years under the Plan or anyother Share Schemes, |

|   |                                                                                            |
|--------|-------------------------------------------------------------------------------------------------|
|   | ten per cent of the issued ordinary share capital of the Company on the day preceding that day. |

|   |                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 11.2   | The aggregate number of unissued Ordinary Shares which the Company may on anyday issue for the purposes of the Plan shall be further limited so that it shallnot exceed, when aggregated with: |

|   |   |
|--------|--------|
|   | (a)    | ordinary shares that have been issued by the Company within the period of tenyears ending on that Date of Award pursuant to the Plan and |

|   |   |
|--------|--------|
|   | (b)    | ordinary shares that have been issued or remain issuable by the Company in respectof options granted within the said period of ten years under the Plan or anyother Share Schemes (other than savings-related share option schemes), |

|   |                                                                                             |
|--------|--------------------------------------------------------------------------------------------------|
|   | five per cent of the issued ordinary share capital of the Company on the day preceding that day. |

|   |            |
|--------|-----------------|
| **12** | **Termination** |

|   |                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 12.1   | The Trustees or the Company may at any time resolve to terminate the Plan inwhich event no further Awards shall be made thereafter, but the subsisting rightsof Participants shall remain in force. |

13

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