Exhibit 4.4

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**United Utilities PLC**

**Service contract**









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|Date of Contract: | 25 May 1999                                                         
|----------------- | --------------------------------------------------------------------
|                  |                                                                     
|Employee:         | John Edward Roberts                                                 
|                  |                                                                     
|Address:          | 1 Tudor Gardens                                                     
|                  | Devauden                                                            
|                  | Gwent                                                               
|                  | NP6 6SS                                                             
|                  |                                                                     
|Job Title:        | Chief Executive                                                     
|                  |                                                                     
|Company:          | United Utilities PLC ( **we,us**)                                   
|                  |                                                                     
|Address:          | Birchwood Point Business Park, Birchwood Boulevard,
      Birchwood,
|                  | Warrington, Cheshire WA3 7WB                                        
|                  |                                                                     

**Part One – General information**

|**1** | **The contract**                                                                                                                                                                                 
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                  
|      | This contract sets out the terms of your employment
      with us. By signing this contract you agree to keep to these terms. The
      contract will be interpreted and governed by English law.
|      |                                                                                                                                                                                                  

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|**2** | **Job description**                                                                                                                                                                                                                                                        
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                            
|a     | We are a member of the United Utilities Group
      of companies. In this contract Group means United Utilities PLC and any
      company of which United Utilities PLC holds more than 20% of the share capital
      as defined by Section 744 of the Companies Act 1985.
|      |                                                                                                                                                                                                                                                                            
|b     | You are employed to do the job described in
      the job title at the band shown in the schedule. However we may ask you
      to do other work or carry out work for another company within the group
      either on a temporary or a permanent basis.                  
|      |                                                                                                                                                                                                                                                                            
|c     | The name or office of the person you report
      to each day when you start work under this contract is shown in the schedule.
      Our reporting structures may change but you will be responsible to our board
      of directors (**the board**).                     
|      |                                                                                                                                                                                                                                                                            
|d     | You must keep to all rules, procedures, practices
      and guidelines we approve. This includes the London Stock Exchange’s
      Combined Code on corporate governance.                                                                                                  
|      |                                                                                                                                                                                                                                                                            
|**3** | **Start date of your contract**                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                            
|      | The start date of this contract and the date
      your continuous employment starts with us are shown in the schedule.                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                            
|**4** | **Place of work**                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                            
|a     | Your main place of work is shown in the schedule.
      You must live within reasonable travelling distance and time from your main
      place of work.                                                                                                                   
|      |                                                                                                                                                                                                                                                                            
|b     | You must agree to travel to allow you to do
      your work. We will pay any reasonable expenses involved.                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                            

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|c     | We may ask you to work anywhere in the United
      Kingdom. If we ask you to move we will try to take your wishes into account.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|d     | If, after you join us, your place of work
      is permanently changed to a place which is too far to travel to, we may
      agree to pay reasonable expenses to move you. These may include removal
      expenses, legal expenses, estate agent’s fees, a disturbance allowance
      of up to £5,000, the reasonable cost of temporary accommodation or
      a bridging loan. We may also offer you the use of a specialist relocation
      agent to tell you about the area. We will agree with the agent how much
      we will pay them. We will pay any tax you may be charged on the expenses
      we pay you if you have to move home.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|e     | You must move within one year of changing
      your place of work. However, in special circumstances we may agree to vary
      this time limit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|f     | We may ask you to work outside the United
      Kingdom on a temporary basis for periods of up to 12 months. If we send
      you overseas we will continue to pay you in pounds sterling and we will
      give you any allowances we think are necessary.                                                                                                                                                                                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**5** | **Hours**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      | We cannot give you fixed hours of work due
      to your responsibilities and duties. You must work any hours we feel are
      necessary to allow you to fulfil your duties under this contract. You must,
      however, work within the limits of the Working Time Directive.                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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**Part Two – Benefits**

|**6** | **Pay**                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|a     | We will pay you the salary shown in the schedule.
      We will pay your salary directly into your bank account on or about the
      15th day of each month. This amount will cover part of the month just passed
      and part of the month to come.                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|b     | We will review your salary and benefits each
      year on 1 September. Each review will take account of changes in the cost
      of living, how we are doing and your contribution to that performance. We
      may increase your salary and benefits following a review but we do not have
      to.                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|c     | The pay package shown in the schedule will
      add up from day to day and will include any fees which you may be entitled
      to as a director of the company or any other company in the group.                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|d     | We will pay you any expenses you have to pay
      to carry out your duties. You must provide, where available, receipts or
      other evidence as the board asks for.                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**7** | **Incentive plan**                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | We will recommend to the Trustee of the United
      Utilities Employee Share Trust that you take part in our incentive plan.
      However, this is not part of your contract. The plan is made up of a short
      term award and a long term award as shown in the schedule. We may amend,
      replace or withdraw the plan at any time but we will tell you if we do so.
      Details of the awards you may receive are shown in the schedule.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|8 | Company Car                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|a | You may take part in our company car scheme.
      The details are given in the schedule.                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|b | We will provide you with a chauffeur to drive
      the car on business journeys. If you wish, you may also use the chauffeur
      for the private journey between your home and your main place of work at
      the beginning and end of the day. If you do, you will have a taxable benefit.
      For the purpose of this clause, your home means an address within reasonable
      daily travelling distance and time from your main place of work.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9 | Holidays and holiday pay                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|a | The holiday year runs from 1 April to 31 March.
      Your entitlement to holidays adds up at the beginning of each holiday year
      except in the holiday year in which your employment with us begins or ends.
      In this case, your entitlement to holidays adds up at 1/12 of your yearly
      entitlement for each complete month of your service. Your yearly entitlement
      is set out in the attached schedule.                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|b | In each holiday year you will be entitled
      to all statutory or public holidays with pay. If we ask you to work on statutory
      or public holidays we will give you other days off instead.                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|c | You can carry forward up to five days’
      holiday from one year as long as you take these within 2 months of the end
      of the previous holiday year. You must take all other holidays during the
      holiday year and may not carry them forward to the following holiday year.                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|d | We must approve all holidays. If we give you
      extra holidays in any one holiday year, it does not mean you are entitled
      to them in future years.                                                                                                                                                                                                                                                                                               

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|e  | If we end your employment for any reason part
      way through a holiday year you will receive payment for days of holiday
      due to you but which you have not taken yet. If you have taken holidays
      before you are actually entitled to them you must repay us the cost of those
      days. We may take this amount from any amounts we owe you.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                              
|10 | Sickness and injury                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                              
|a  | If you are prevented by sickness or injury
      from carrying out your duties under this contract, you will be eligible
      to receive sick pay from us. Your eligibility is related to your period
      of continuous service. In any 12-month period you will receive up to the
      following payments:                                              
|   |                                                                                                                                                                                                                                                                                                                                                              

|Continuous service        | Full basic pay (months) | Half basic pay (months)
|------------------------- | ----------------------- | -----------------------
|Up to four months         | 1                       | 0                      
|four months to one year   | 1                       | 2                      
|one year to two years     | 2                       | 2                      
|two years to three years  | 3                       | 3                      
|three years to four years | 4                       | 4                      
|four years to five years  | 5                       | 5                      
|five years and over       | 6                       | 6                      

|  |                                                                                                                                                                                                                                                                
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | If you have received any sick pay in the 12
      months immediately before a period you are away through illness, we will
      reduce your eligibility for further sick by the amount of sick pay you will
      already have received in the last 12 months.
|  |                                                                                                                                                                                                                                                                
|b | Beyond these limits, we will not pay any further
      sick pay (other than any entitlement you may still have to statutory sick
      pay) until you return to work.                                                                                          

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|c  | We will take the amount of statutory benefits
      which you are entitled to under the statutory sick pay scheme from any sick
      pay paid to you when you are away because of sickness or injury.                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                 
|d  | We use the five qualifying days of Monday
      to Friday when we work out payments under the statutory sick pay scheme.                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                 
|e  | We may ask you to have a medical examination
      at any time. We will pay the cost of the examination and will choose a doctor
      who will send a written report to our occupational health adviser.                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                 
|11 | Directorships                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | When you are appointed a director of one of
      our companies we will provide directors’ and officers’ liability
      insurance to cover you against any liability which you have in defending
      any civil or criminal proceedings.                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                 
|12 | Cover against risk of death or injury                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | You are covered by our personal accident insurance
      scheme which provides for up to five times your salary if you die or become
      seriously disabled. This will depend on the terms and conditions of the
      scheme which may change. This is on top of any death-in-service benefit
      provided under your pension arrangements.
|   |                                                                                                                                                                                                                                                                                                                                                 
|13 | Professional institutions and societies                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | We will repay any professional subscriptions
      you pay to institutions and societies relevant to your employment as long
      as you provide evidence we ask for.                                                                                                                                                                          

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Part Three – your obligations as an employee

|14 | Competition and shareholdings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|a  | You must spend all of your time and attention
      during working hours on our business. You must not be involved in any way
      with any other person firm or company whatever its trade or business unless
      you get our written permission. This means that you must not own shares
      or make investments in companies or partnerships or work for or offer advice
      or help to another business. However, you may hold investment-only shares,
      debentures or other securities in a company whose capital is traded on the
      London Stock Exchange. You can only do this if your interest, together with
      that of your spouse and your children is not more than 5% of the issued
      value of the class of shares in question.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|b  | You may have or receive unpublished price-sensitive
      information about us. Under Part V of the Criminal Justice Act 1993 it is
      a crime to deal in securities while you have price-sensitive information.
      To protect you and us, we have adopted the London Stock Exchange Model Code
      for directors’ dealings and you must keep to the terms of the code
      whether or not you are a director of the company. You may get a copy of
      the code from the Company Secretarys’ office.                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|15 | Confidentiality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|a  | You must not give anyone, or use at any time,
      any trade secret or confidential information, unless you have to do this
      as part of your job. We have defined confidential information in para 15c
      below. This applies during your employment and after the end of your employment
      with us.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|b  | You must not make any comment about us or
      your job to any reporter or other representative of any radio or television
      station or any newspaper, unless you have to do this when carrying out your
      duties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|c  | Confidential information is information
      which you learn during your employment about our activities anywhere in
      the world, which you could not have got elsewhere and which we have not
      published.                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|d  | All records (including records
      stored in any computer-readable form), drawings and documents and copies
      of records, drawings and documents relating to our activities are our property.
      You must keep them safe and must give them to us immediately if we ask.
      You must return all the records, drawings and documents and all the copies
      you have to us if you leave us.
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|16 | Intellectual property                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|a  | In this clause the following terms
      will have the following meaning:                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|b  | You must protect and promote our
      interests relating to intellectual property taking account of particular
      policy statements we issue.                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                         
|c  | If at any time while you are employed
      under this contract you make or discover or take part in making or discovering
      any invention relating to our business you must immediately give us full
      details so we can decide whether or not it is a company invention. We call
      details that you must tell us about “development information”                                          

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|d | If the invention is a company
      invention:                                                                                                                                                                                                                                                                                                                                    
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|  | •                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|  | •                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|e | If you make or discover or take
      part in making or discovering any invention while you are employed under
      this contract and this is not a company invention we will have the right
      to receive your rights in the invention within three months after you have
      told us about it. Fair and reasonable terms will be agreed or settled by
      an arbitrator.
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|f | You must agree to the following:                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|  | •                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|  | •                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                   
|  | The conditions of the Patents
      Act 1977 also apply to inventions and our rights under the Copyright Designs
      and Patents Act 1988.                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                   

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|g | You
      must also do everything possible to:                                                                                                                                                                                                                                                                               
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                              
|  | •                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                              
|  | •                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                              
|  | •                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                              
|  | •                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                              
|h | You must not use your rights to
      any work or company invention against us.                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                              
|i | You must appoint us as your attorney
      to do anything and generally to use your name for the purpose of giving
      us the full benefit of the conditions of this paragraph 16. A written certificate
      signed by any director or the secretary of the company will be proof that
      we may act as your attorney.
|  |                                                                                                                                                                                                                                                                                                                              
|j | Rights and obligations relating
      to inventions under this paragraph will continue after your employment ends.                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                              
|k | Nothing in this clause will affect
      our or your rights under Sections 39 to 43 of the Patents Act 1977.                                                                                                                                                                                                                 

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|Part Four – Ending your
      contract
|--------------------------------------
|                                      
|17                                    
|                                      
|a                                     
|                                      
|b                                     
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|c                                     
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|18                                    
|                                      
|                                      
|                                      
|                                      

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|   | •                                                                                                                                                                                    | require you not to attend our offices; and                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | suspend your authority to act on behalf of
      us                                   
|   |                                                                                                                                                                                     
|   | without otherwise affecting your
      duties to us under this contract and without affecting your entitlement
      to receive the pay and benefits due to you under this contract.
|   |                                                                                                                                                                                     
|19 | Suspension                                                                                                                                                                          
|   |                                                                                                                                                                                     
|   | We may suspend you with or without
      pay while we investigate a disciplinary matter. You must co-operate in any
      investigation and give us any help we ask for.            
|   |                                                                                                                                                                                      |                                                                                       
|20 | Resigning as a director                                                                                                                                                             
|   |                                                                                                                                                                                     
|   | You must agree that you will resign
      as a director:                                                                                                                            
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | within seven days from the end of your employment
      with us for whatever reason or
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | if we ask at any time during any period of
      notice.                              
|   |                                                                                                                                                                                     
|   | If you do not do this, the Company
      Secretary will give your resignation on your behalf.                                                                                       
|   |                                                                                                                                                                                     
|21 | Returning your company car                                                                                                                                                          
|   |                                                                                                                                                                                     
|   | If you have a company car you
      must return it to us when your employment ends.                                                                                                 

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|22 | Paying your final salary                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                 
|a  | We will pay you any amounts we owe when we
      receive the items listed below if we end your employment:      
|   |                                                                                                                 
|   | •                                                                                                               
|   |                                                                                                                 
|   | •                                                                                                               
|   |                                                                                                                 
|   | •                                                                                                               
|   |                                                                                                                 
|   | You must return all these items
      in a satisfactory condition.                                              
|   |                                                                                                                 
|b  | We can take any amounts you owe
      us for the following from any amounts we owe you if we end your employment
|   |                                                                                                                 
|   | •                                                                                                               
|   |                                                                                                                 
|   | •                                                                                                               

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Part Five – Restrictions

23         Restrictions

|a | Following the end of your employment
      for a period equal to the number of months’ notice we must give you
      to end your employment, you must not do the following unless you have our
      written permission.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                         
|  | •                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                         
|  | •                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                         
|  | •                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                         



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|b | If any of the obligations under
      this clause cannot be enforced it will not affect any of the other clauses
      in this agreement.
|- | -----------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                          
|c | The obligations of clause 23a
      apply equally during your employment.                                                                
|  |                                                                                                                                          
|d | You must agree that you will not
      at any time:                                                                                      
|  |                                                                                                                                          
|  | •                                                                                                                                        
|  |                                                                                                                                          
|  | •                                                                                                                                        
|  |                                                                                                                                          
|e | If these clauses are judged to
      be unreasonable we may amend them and they will still be valid.                                     



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|                                         |                                                                                                                                    
|---------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------
|Part Six – Procedures
      and policies
|                                         |                                                                                                                                    
|24                                       | Grievance procedure                                                                                                                
|                                         |                                                                                                                                    
|                                         | If you have a grievance relating
      to your employment you should refer it to the Chairman, whose decision will
      be final. 
|                                         |                                                                                                                                    
|25                                       | Disciplinary procedure                                                                                                             
|                                         |                                                                                                                                    
|                                         | You may get a copy of the disciplinary
      procedure from the Group HR department.                                               
|                                         |                                                                                                                                    
|26                                       | No smoking policy                                                                                                                  
|                                         |                                                                                                                                    
|                                         | We aim to provide a smoke-free
      environment for all our employees. You must not smoke at any time while
      on our premises.



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|                                                  | 
|------------------------------------------------- | 
|Management and professional group –
      band A1
|                                                  | 
|Schedule to service contract – J E ROBERTS       
|                                                  | 

Start date

Your employment as Chief Executive begins on 1 September 1999.

Your service with us begins on 1 September 1999.

Place of work

Your main place of work will be the Group Corporate Centre,
  Birchwood, Warrington.

Who you will report to

You will report to the Chairman.

Basic salary

Your salary when you start with us will be £300,000 a
  year.

Profit related pay

United Utilities currently operates a profit related pay scheme,
  registered with the Inland Revenue.

Incentive plan

You may be paid a short term award each year up to 40% of your
  salary. The award will be satisfied wholly by allocating contingent shares in
  the company. You may be paid a long term award each year up to 87.5% of your
  salary. One third of the award will be satisfied by a cash payment and two thirds
  by allocating contingent shares in the company. Contingent shares will be held
  in trust for two years after the end of the financial year for which the awards
  are made. Awards under the incentive plan are not pensionable earnings.

Special rules apply when you first join the incentive plan.

A copy of the guide to the operation of the plan is attached.



|Schedule | Page 1 of 3 | 
|-------- | ----------- | 

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Retirement age and Pension

You will retire when you are 60 years of age unless
  we agree that you may continue to work after your 60th birthday.

We will invite you to join the executive pension
  section of the United Utilities Pension Scheme, (UUPS). The scheme will provide
  a pension at age 60, based on an accrual rate of 1/30th for each
  year of service, up to a maximum of two thirds of your salary and subject to
  the operation of the “earnings cap”. If you join, you must pay 5%
  of your basic salary as a contribution to the scheme. A brief summary of the
  scheme’s benefits is enclosed. A contracting-out certificate has been
  issued in relation to the scheme.

We will also provide an unapproved arrangement which will make
  up the difference between the pension benefits you will receive from UUPS and
  the pension you would have received had the earnings cap not applied.

If you die in service we will pay a lump sum of four times your
  salary and a pension to your spouse of one-half of the pension you would have
  received at age 60.

Company car

You may have a Jaguar Sovereign or another car made in Western
  Europe with a list price up to £50,000. You may instead choose to have
  a cash payment which is currently £750 each month. The payment is taxable,
  but not pensionable.

We will provide fuel or pay you for business and private mileage.

Holidays

You will be entitled to 26 days’ paid holiday
  each year, rising to 30 after 4 years’ service.

Private health scheme

You will join our private health scheme, under the conditions
  in force, unless you tell us you do not want to within one month of receiving
  this contract. The scheme is a taxable benefit under Inland Revenue regulations.

Medical screening

We will provide medical screening, usually every two years.



|Schedule | 2 | 
|-------- | - | 

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Home communications

We will provide and pay the costs associated with
  a business telephone and fax line and modem equipment installed in your home.
  We will provide a lap top computer, (including base unit and external monitor),
  a telephone and a combined fax, printer, scanner and photocopier.

Relocation

We consider your present home is not within reasonable
  daily travelling distance and time from Warrington. We will pay reasonable expenses
  to move you. These may include removal expenses, legal expenses, estate agent’s
  fees, a disturbance allowance of up to £5,000, the reasonable cost of
  temporary accommodation or a bridging loan. We may also offer you the use of
  a specialist relocation agent to tell you about the area. We will agree with
  the agent how much we will pay them.

If you have not sold your present home by 1 September
  1999, we will look to using a service such as Bradford & Bingley Relocation
  Services (formerly Black Horse).

We will pay any tax you may be charged on the expenses
  we pay you.

You must move within one year of starting to work
  with us. However, in special circumstances, we may agree to vary this time limit.

Notice

The period of notice we will give you is 12 months.

The period of notice you must give us is 12 months.



|Schedule | 3 | 
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This agreement has been signed on 25. v. 99

|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Signed as a deed                                                                                                                                                                                                                                                                              | ) |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|by the company                                                                                                                                                                                                                                                                                | ) |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   | ...................................................................................................................................................................................................................................
|                                                                                                                                                                                                                                                                                              |   | Director                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   | ...................................................................................................................................................................................................................................
|                                                                                                                                                                                                                                                                                              |   | Director or Secretary                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|Signed as a deed                                                                                                                                                                                                                                                                              | ) |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|by                                                                                                                                                                                                                                                                                            |   | )................................................................................................................................................................................................................................  
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|in the presence of the following                                                                                                                                                                                                                                                              |   | )................................................................................................................................................................................................................................  
|                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                             
|Witness’s signature ................................................................................................................................................................................................................................................................         
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Name................... .....................................................................................................................................................................................................................................................................
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Address......................................................................................................................................................................................................................................................................................

18

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| |                      | 
| | -------------------- | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| | United Utilities PLC | 
| |                      | 
| |                      | 
| | Service Contract     | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 
| |                      | 



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|Employee:  | Simon Batey                                                                                      
|---------- | -------------------------------------------------------------------------------------------------
|           |                                                                                                  
|Address:   | Copsley                                                                                          
|           |                                                                                                  
|           | Dalefords Lane                                                                                   
|           |                                                                                                  
|           | Whitegate                                                                                        
|           |                                                                                                  
|           | Northwich                                                                                        
|           |                                                                                                  
|           | Cheshire                                                                                         
|           |                                                                                                  
|           | CW8 2BW                                                                                          
|           |                                                                                                  
|Job Title: | Group Finance Director                                                                           
|           |                                                                                                  
|Company:   | United Utilities PLC (we, us)                                                                    
|           |                                                                                                  
|Address:   | Birchwood Point Business Park, Birchwood Boulevard,
      Birchwood, Warrington, Cheshire WA3 7WB
|           |                                                                                                  
|           |                                                                                                  
|           |                                                                                                  
|           |                                                                                                  

Part one – General information

|1 | The contract                                                                                                                                                                                                                                                                             
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                          
|  | This contract sets out the terms of your employment
      with us. By signing this contract you agree to keep to these terms. The
      contract will be interpreted and governed by English law.                                                                                        
|  |                                                                                                                                                                                                                                                                                          
|2 | Job description                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                          
|a | We are a member of the United Utilities group
      of companies. In this contract and schedule, group means United Utilities
      PLC and any company of which United Utilities PLC holds more than 20% of
      the share capital as defined by Section 744 of the Companies Act 1985.



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|b | You are employed to do the job described in
      the job title above at the band shown in the schedule.                                                                                                                                                                                                                                                         
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                  
|c | The name or office of the person you report
      to each day when you start work under this contract is shown in the schedule.
      Our reporting structures may change but you will be responsible to our board
      of directors (the board).                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                  
|d | You must keep to all rules, procedures, practices
      and guidelines we approve.                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                  
|3 | Start date of your contract                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                  
|  | The start date of this contract and the date
      your continuous employment starts with us are shown in the schedule.                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                  
|4 | Place of work                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                  
|a | Your main place of work is shown in the schedule.
      However, we may ask you to work anywhere in the United Kingdom. If we ask
      you to move we will try to take your wishes into account.                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                  
|b | You must agree to travel to allow you to do
      your work. We will pay any reasonable expenses involved.                                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                  
|c | If your place of work is permanently changed
      to a place which is too far to travel to, we may agree to pay reasonable
      expenses to move you. These expenses may include removal expenses, legal
      expenses, estate agent’s fees, a disturbance allowance of up to £5,000,
      the reasonable cost of temporary accommodation or a bridging loan.
|  |                                                                                                                                                                                                                                                                                                                                                                  
|5 | Hours                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                  
|  | We cannot give you fixed hours of work due
      to your responsibilities and duties. You must work any hours we feel are
      necessary to allow you to fulfil your duties under this contract. You should,
      however, work within the Working Time Regulations.                                                                                           



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Part 2 – Benefits

|6 | Pay                                                                                                                                                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                      
|a | We will pay you the salary shown in the schedule.
      We will pay your salary directly into your bank account on or about the
      15th day of each month. This amount will cover part of the month just passed
      and part of the month to come.                              
|  |                                                                                                                                                                                                                                                                                      
|b | You will not be entitled to extra pay for
      any overtime.                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                      
|c | We will review your salary and benefits each
      year on 1 September. Each review will take account of changes in the cost
      of living, how we are doing and your contribution to that performance. We
      may increase your salary following a review but we do not have to.
|  |                                                                                                                                                                                                                                                                                      
|d | The pay package shown in the schedule will
      add up from day to day and will include any fees which you may be entitled
      to as a director of the company or any other company in the group.                                                                                 
|  |                                                                                                                                                                                                                                                                                      
|e | Unless you tell us you do not want to, you
      will be a member of the United Utilities profit related pay scheme, registered
      with the Inland Revenue. The scheme will operate until March 2000.                                                                             
|  |                                                                                                                                                                                                                                                                                      
|f | We will pay you any expenses you have had
      to pay to carry out your duties, provided we think they are reasonable.
      You must provide, where available, receipts or other evidence we ask for.                                                                              



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|7 | Incentive plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | We will recommend to the Trustee of the United
      Utilities Employee Share Trust that you take part in our incentive plan.
      However, this is not part of your contract. The plan is made up of a short
      term award and a long term award as shown in the schedule. We may amend,
      replace or withdraw the plan at any time but we will tell you if we do so.
      Details of the awards you may receive are shown in the schedule.                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|8 | Car allowance/Company car                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|a | We may pay you an allowance or provide you
      with a company car. If we pay you an allowance, the amount is shown in the
      schedule. This allowance does not count towards calculating your pension.
      If we provide you with a car, we will send you a list of the type of car
      you can have. You can use the car for private journeys.                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|b | We will provide you with a chauffeur for business
      journeys. If you wish, you may also use the chauffeur for the private journey
      between your home and your main place of work at the beginning and end of
      the day. If you do, you will have a taxable benefit. For the purpose of
      this clause, your home means an address within reasonable daily travelling
      distance and time from your main place of work.                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9 | Holidays and holiday pay                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|a | The holiday year runs from 1 April to 31 March,
      unless we say otherwise in the schedule. Your yearly entitlement is 26 days.
      At the start of each holiday year, this will increase by one day for each
      completed holiday year you have worked for us until, after 4 completed holiday
      years, you have a yearly entitlement of 30 days. Your entitlement to holidays
      adds up at the beginning of each holiday year except in the holiday year
      in which your employment with us begins or ends. In this case, your entitlement
      to holidays adds up at 1/12 of your yearly entitlement for each complete
      month of service you carry out.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



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|b      | In each holiday year you will be entitled
      to all statutory or public holidays with pay. If we ask you to work on statutory
      or public holidays we will give you other days off instead.                                                                                                                                                           
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                              
|c      | You can carry forward up to five days holiday
      from one year as long as you take these within 2 months of the end of the
      previous holiday year. You must take all other holidays during the holiday
      year and may not carry them forward to the following holiday year.                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                              
|d      | We must approve all holidays. If we give
        you extra holidays in any one holiday year, it does not mean you are entitled
        to them in future years.                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                              
|e      | If we end your employment for any reason part
      way through a holiday year you will receive payment for days of holiday
      due to you but which you have not taken yet. If you have taken holidays
      before you are actually entitled to them you must repay us the cost of those
      days. We may take this amount from any amounts we owe you.
|       |                                                                                                                                                                                                                                                                                                                                                              
|**10** | **Sickness, injury and medical examinations**                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                              
|a      | If you cannot carry out your duties under
      this contract because you are ill or injured, you will be eligible to receive
      sick pay from us. Your eligibility is related to your period of continuous
      service. In any 12-month period you will receive up to the following payments:                                                          
|       |                                                                                                                                                                                                                                                                                                                                                              

|                          |                               |                              
|------------------------- | ----------------------------- | -----------------------------
|Continuous service        | Full
      basic pay (months) | Half
      basic pay (months)
|Up to four months         | 1                             | 0                            
|four months to one year   | 1                             | 2                            
|one year to two years     | 2                             | 2                            
|two years to three years  | 3                             | 3                            
|three years to four years | 4                             | 4                            
|four years to five years  | 5                             | 5                            
|five years and over       | 6                             | 6                            
|                          |                               |                              



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|       |                                                                                                                                                                                                                                                          
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | If you have received any sick pay in the 12
      months immediately before you are off through illness, we will reduce your
      eligibility for further sick pay by the amount of sick pay you will already
      have received in the last 12 months.
|       |                                                                                                                                                                                                                                                          
|b      | When you have used up all of your eligibility,
      we will not pay any further sick pay (other than any entitlement you may
      still have to statutory sick pay) until you return to work.                                                          
|       |                                                                                                                                                                                                                                                          
|c      | We will take the amount of statutory benefits
      which you are entitled to under the statutory sick pay scheme from any sick
      pay paid to you when you are away because of sickness or injury.                                                   
|       |                                                                                                                                                                                                                                                          
|d      | We use the five qualifying days of Monday
      to Friday when we work out payments under the statutory sick pay scheme.                                                                                                                                 
|       |                                                                                                                                                                                                                                                          
|e      | We may ask you to have a medical examination
      at any time and a health check each year.We will pay the cost of the examination
      and will choose the doctor concerned who will send a written report to our
      occupational health adviser.  
|       |                                                                                                                                                                                                                                                          
|**11** | **Health screening**                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                          
|       | We will give you the opportunity to have regular
      medical screening (usually every two years) at our expense. You will receive
      a report from the doctor.                                                                                      
|       |                                                                                                                                                                                                                                                          
|**12** | **Private health cover**                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                          
|a      | We will include you, free of charge, in our
      private health scheme unless you tell us within one month of receiving this
      contract that you do not want to be included. The scheme is a taxable benefit
      under Inland Revenue regulations.
|       |                                                                                                                                                                                                                                                          
|b      | If you wish, you can apply to include your
      spouse and children. You will have to pay the cost.                                                                                                                                                     
|       |                                                                                                                                                                                                                                                          



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|       |                                                                                                                                                                                                                                                                                                                                                                  
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**13** | **Retirement age and pension**                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                  
|       | Details of your retirement age and our pension
      scheme are given in the schedule.                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                  
|**14** | **Cover against risk of death or injury**                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                  
|       | You are covered, free of charge, by our personal
      accident insurance scheme. The benefits include a payment of up to five
      times your salary if you die or become seriously disabled. This will depend
      on the terms and conditions of the scheme, which may change. This is on
      top of any benefit provided under your pension arrangements.
|       |                                                                                                                                                                                                                                                                                                                                                                  
|**15** | **Directorships**                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                  
|       | When you are appointed a director of one of
      our companies we will provide director’s and officers’ liability
      insurance to cover you against any liability which you have in defending
      any civil or criminal proceedings.                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                  
|**16** | **Professional institutions and societies**                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                  
|       | We will repay any professional subscriptions
      you pay to institutions and societies relevant to your employment as long
      as you provide evidence we ask for.                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                  
|**17** | **Telephone charges, communications
      and computer equipment**                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                  
|       | We will pay some costs and provide you with
      equipment as detailed in the schedule.                                                                                                                                                                                                                                                                         



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|**Part three
      – your obligations as an employee**
|------------------------------------------------------
|                                                      
|**18**                                                
|                                                      
|a                                                     
|                                                      
|b                                                     
|                                                      
|**19**                                                
|                                                      
|a                                                     
|                                                      
|b                                                     
|                                                      
|c                                                     
|                                                      



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|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|d      | All records (including records
      stored in any computer-readable form), drawings and documents and copies
      of records, drawings and documents relating to our activities or the activities
      of the group are the property of the group. You must keep them safe and
      must give them to us immediately if we ask. You must return all the records,
      drawings and documents and all the copies you have to us if you leave the
      Company.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**20** | **Intellectual property**                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|a      | In this clause the following terms
      will have the following meaning:                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|b      | You must protect and promote our
      interests relating to intellectual property taking account of particular
      policy statements the group issues.                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|c      | If at any time while you are employed
      under this contract you make or discover or take part in making or discovering
      any invention relating to our business you must immediately give us full
      details so we can decide whether or not it is a company invention. We call
      details that you must tell us about “development information”.                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|d      | If the invention is a company
      invention:                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



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|  | •                                                                                                                                                                                                                                                                                                                                                                                  | We can ask you to give us any information,
      data, drawings and help we need to use the invention to the best advantage.                                                                                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|e | If you make or discover
      or take part in making or discovering any invention while you are employed
      under this contract and this is not a company invention we will have the
      right to receive your rights in the invention within three months after
      you have told us about it. Fair and reasonable terms will be agreed or settled
      by an arbitrator.
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|f | You must agree to
      the following: –                                                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | •                                                                                                                                                                                                                                                                                                                                                                                  | You must promptly give us all work and designs
      you or others think of, develop or make. You must hold them in trust for
      us until we have all rights to them. This does not apply to any work or
      designs you think of, develop or make outside your normal working hours.                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | •                                                                                                                                                                                                                                                                                                                                                                                  | You must transfer to us all copyright, design
      right and other rights (if any) for all work and designs you think of, develop
      or make while you are employed by us. This does not apply to work or designs
      you think of, develop or make outside your normal working hours if they
      are not connected with your job.
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | The conditions of
      the Patents Act 1977 also apply to inventions and our rights under the Copyright
      Designs and Patents Act 1988.                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|g | You must also do
      everything possible to:                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | •                                                                                                                                                                                                                                                                                                                                                                                  | Give us all the rights to all intellectual
      property in any company invention, the development information and any work;                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | •                                                                                                                                                                                                                                                                                                                                                                                  | Apply for, get and maintain all patents, copyright,
      design rights, registered designs, trade marks or other protection for any
      company invention and the work in parts of the world we specify;                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                           
|  | •                                                                                                                                                                                                                                                                                                                                                                                  | Resist any objection or opposition to getting
      any petitions or applications for revocation of any such rights and protection
      referred to in this clause; and                                                                                                                                                                  



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|  | •                                                                                                                                                                                                                                                                                                                             | Bring any legal action affecting the rights
        and protection referred to in this clause.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                               |                                                                                               
|h | You will not use your
      rights to any work or company invention against us.                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                               |                                                                                               
|i | You must appoint us
      as your attorney to do anything and generally to use your name for the purpose
      of giving us the full benefit of the conditions of this paragraph 21. A
      written certificate signed by any director or the secretary of the company
      will be proof that we may act as your attorney.
|  |                                                                                                                                                                                                                                                                                                                               |                                                                                               
|j | Rights and obligations
      relating to inventions under this paragraph will continue after your employment
      ends.                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                               |                                                                                               
|k | Nothing in this clause
      will affect our or your rights under Sections 39 to 43 of the Patents Act
      1977.                                                                                                                                                                                                           



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|Part four – Ending
      your contract
|--------------------------------------
|                                      
|21                                    
|                                      
|a                                     
|                                      
|b                                     
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|c                                     
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|22                                    
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      



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|   | •                                                                                                                                                                                    | Suspend your authority to act on behalf of
      us                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------
|   |                                                                                                                                                                                      |                                                                                       
|   | without otherwise
      affecting your duties to us under this contract and without affecting your
      entitlement to receive the pay and benefits due to you under this contract.
|   |                                                                                                                                                                                      |                                                                                       
|23 | Suspension                                                                                                                                                                          
|   |                                                                                                                                                                                      |                                                                                       
|   | We may suspend you
      while we investigate a disciplinary matter. You must co-operate in any investigation
      and give us any help we ask for.                                
|   |                                                                                                                                                                                      |                                                                                       
|24 | Resigning as a
      director                                                                                                                                                       
|   |                                                                                                                                                                                      |                                                                                       
|   | You must agree that
      you will resign as a director:                                                                                                                            
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | Within seven days from the end of your employment
      with us for whatever reason or
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | If we ask at any time during any period of
      notice.                              
|   |                                                                                                                                                                                      |                                                                                       
|   | If you do not do
      this, the Company Secretary will give your resignation on your behalf.                                                                                       
|   |                                                                                                                                                                                      |                                                                                       
|25 | Returning your
      company car                                                                                                                                                    
|   |                                                                                                                                                                                      |                                                                                       
|   | If you have a company
      car when your employment ends you must deliver it back to us.                                                                                           
|   |                                                                                                                                                                                      |                                                                                       
|26 | Paying your final
      salary                                                                                                                                                      
|   |                                                                                                                                                                                      |                                                                                       
|a  | We will pay you any
      amounts we owe when we receive the items listed below if we end your employment:                                                                          
|   |                                                                                                                                                                                      |                                                                                       
|   | •                                                                                                                                                                                    | A company vehicle;                                                                    



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|  | •                                                                                                                       | Any of the records referred to in paragraph
      19d above; or                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                         |                                                                                                                                           
|  | •                                                                                                                       | Any of our other property such as a mobile
      telephone and company computer.                                                          
|  |                                                                                                                         |                                                                                                                                           
|  | You must return all
      these items in a satisfactory condition.                                                     
|  |                                                                                                                         |                                                                                                                                           
|b | We can take any amounts
      you owe us for the following from any amounts we owe you if we end your
      employment:
|  |                                                                                                                         |                                                                                                                                           
|  | •                                                                                                                       | Any amount we give you in advance or overpayment
      of salary, commission or expenses or for any loan of any kind we make to
      you.
|  |                                                                                                                         |                                                                                                                                           
|  | •                                                                                                                       | Any amount you owe us for a company car upgrade
      or accessories.                                                                     
|  |                                                                                                                         |                                                                                                                                           
|  | •                                                                                                                       | Any loss we have suffered due to fraud, other
      dishonesty or your neglect.                                                           



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Part five – Restrictions

|27 | Restrictions                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                         
|a  | Following the end of your employment
      for a period equal to the number of months’ notice we must give you
      to end your employment, you must not do the following unless you have our
      written permission.
|   |                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                         
|   | •                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                         
|b  | If any of the obligations under
      this clause cannot be enforced it will not affect any of the other clauses
      in this agreement.                                                                               



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|c | The obligations of clause 27a
      apply equally during your employment.                           
|- | ----------------------------------------------------------------------------------------------------
|  |                                                                                                     
|d | You must agree that you will not
      at any time:                                                 
|  |                                                                                                     
|  | •                                                                                                   
|  |                                                                                                     
|  | •                                                                                                   
|  |                                                                                                     
|e | If these clauses are judged to
      be unreasonable we may amend them and they will still be valid.



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Part six – Procedures and policies

|28 | Grievance procedure                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                    
|   | If you have a grievance relating to your employment
      you should refer it to the Chief Executive, whose decision will be final.
|   |                                                                                                                                    
|29 | No smoking policy                                                                                                                  
|   |                                                                                                                                    
|   | We aim to provide a smoke-free environment
      for all our employees. You must not smoke at any time while on our premises.      



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|This agreement has been signed
      on |   | ...................................................................................................................................................................................................................13/12/99................       
|--------------------------------------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                        |   |                                                                                                                                                                                                                                                   
|Signed as a deed                        | ) |                                                                                                                                                                                                                                                   
|by the company                          | ) |                                                                                                                                                                                                                                                   
|                                        |   |                                                                                                                                                                                                                                                   
|                                        |   | ..................................................................................................................................................................................................................................................
|                                        |   | Director                                                                                                                                                                                                                                          
|                                        |   |                                                                                                                                                                                                                                                   
|                                        |   | ..................................................................................................................................................................................................................................................
|                                        |   | Director or
        Secretary                                                                                                                                                                                                                     
|                                        |   |                                                                                                                                                                                                                                                   
|Signed as a deed                        | ) |                                                                                                                                                                                                                                                   
|by the company                          | )
|                                        |   | ..................................................................................................................................................................................................................................................
|                                        |   |                                                                                                                                                                                                                                                   

|                                  | Name | .........................................................................................................................................................................................................................................................................................................
|--------------------------------- | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                  |      |                                                                                                                                                                                                                                                                                                          
|in the presence of the following:
|                                  |      |                                                                                                                                                                                                                                                                                                          
|                                  |     
|                                  |      |                                                                                                                                                                                                                                                                                                          

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Management and Professional group
  – Band A1

Schedule to service contract
  – S G BATEY

Start date

This contract begins on a date to
  be agreed.

The start date for calculating your
  continuous employment is a date to be agreed. 1/4/2000

Place of work

Your main place of work will be Group Corporate
  Centre, Birchwood, Warrington.

Who you will report to

You will report to the Chief Executive.

Basic salary

Your salary at the start of this contract will
  be £260,000 a year.

Incentive plan

You may be paid a short term award each year
  up to 40% of your salary. Each year we will tell you the performance targets
  we will use to determine the value of the award. We will make the award by allocating
  you contingent shares in the company.

You may also be paid a long term award
  each year up to 70% of your salary. The value of the award is based on United
  Utilities’ performance, measured by calculating total shareholder return
  and the growth in earnings per share over a fixed period and comparing it with
  two other groups of companies. One third of the award will be made as a cash
  payment and two thirds by allocating you contingent shares in the company.

Contingent shares will be held in
  trust for two years after the end of the financial year for which the awards
  are made and will then be transferred to you.

Special rules apply when you first join the
  incentive plan and when you leave it. A copy of the guide to the operation of
  the plan is attached.

We do not count awards made under the incentive
  plan when working out your pensionable pay.



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Retirement age

You will retire when you are 60 years of age unless
  we agree that you may continue to work after your 60th birthday.

Pension Scheme

We will invite you to join the executive section
  of the United Utilities Pension Scheme, (UUPS). The scheme will provide a pension
  at age 60, based on an accrual rate of 1/30th for each year of service, up to
  a maximum of two thirds of the “earnings cap”, currently £90,600
  per year. If you join, you must pay 5% of your basic salary as a contribution
  to the scheme. A copy of the members’ guide to the UUPS executive section
  is enclosed.

A contracting-out certificate has been issued in
  relation to the scheme.

We will also provide an unapproved, unfunded arrangement
  which will make up the difference between the pension benefits you will receive
  from UUPS and the pension you would have received had the earnings cap not applied.

If you die in service we will pay a lump sum of
  four times your salary and a pension to your spouse of one-half of the pension
  you would have received at age 60.

Company car allowance

We will pay you a cash allowance of £12,000
  per year. We will pay you one twelfth of the yearly amount each month. The payment
  is taxable. We do not count it when working out your pensionable pay.

We will provide fuel or pay you for business and
  private mileage.

Telephone charges, communications and computer
  equipment

We will provide and pay the costs associated with
  a business telephone and fax line and modem equipment installed in your home.

We will provide a mobile telephone for your business
  use. You must pay us, when we ask you to, for the cost of any personal use.

We will provide a lap top computer, (including
  base unit and external monitor) and a combined fax, printer, scanner and photocopier.



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Notice

The period of notice we will give you to end this
  contract is 24 months. The period of notice will reduce to 12 months when you
  have worked for us for 1 year.

The period of notice you must give us to end this
  contract is 12 months.



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UNITED UTILITIES PLC

SERVICE CONTRACT





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Service Contract – Part One

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|                 |                                                                                                           |                                    
|---------------- | --------------------------------------------------------------------------------------------------------- | -----------------------------------
|Date of Contract | 1 January 1996                                                                                            | Employee        Gordon
      Waters
|                 |                                                                                                           |                                    
|Address          | 10 Corbett Avenue
      Droitwich
      Worcs
      WR9 7BE                                               |                                    
|                 |                                                                                                           |                                    
|Job Title        | Managing Director, International Division                                                                 |                                    
|                 |                                                                                                           |                                    
|Company          | United Utilities PLC                                                                                      |                                    
|                 |                                                                                                           |                                    
|Address          | Group Corporate Centre
      Birchwood Point Business Park
      Birchwood
      Warrington
      WA3 7WB |                                    
|                 |                                                                                                           |                                    

PART ONE – GENERAL INFORMATION

|1 | THE CONTRACT                                                                                                                                                                                                                              
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                           
|  | This contract sets out the terms
      of your employment with the Company. By signing this contract you agree
      to be bound by its terms. The contract will be interpreted and enforced
      in accordance with the laws of England.
|  |                                                                                                                                                                                                                                           
|2 | JOB DESCRIPTION                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                           
|  | 2.1                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                           
|  | 2.2                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                           

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Service Contract – Part One

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|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | 2.3                                                                                                                                                                                                                                                                     | The name or office of the person to whom you
      will report on a day to day basis when you start work under this contract
      is given in your letter of offer of employment. The Company’s reporting
      structures may change from time to time but you remain ultimately responsible
      to the Board of Directors.
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|3 | COMMENCEMENT AND CONTINUITY                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|  | The date of commencement of your
      continuous employment with the Company and the date of commencement of this
      contract are detailed in the Schedule to this Agreement.                                                                                      
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|4 | PLACE OF WORK                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|  | 4.1                                                                                                                                                                                                                                                                     | You may be required to work anywhere in the
      United Kingdom. If the Company requires you to move you will receive various
      allowances and the Company will, so far as possible, take your wishes into
      account.                                                                                                 
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|  | 4.2                                                                                                                                                                                                                                                                     | You agree to travel where necessary at the
      Company’s expense to enable you to do the work assigned to you.                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|5 | HOURS                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|  | The nature of the responsibilities
      and duties of your employment are such that the Company cannot specify fixed
      hours of work for you. You are required to work such hours as are necessary
      to enable you to fulfill your duties under this contract.
|  |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                

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Service Contract – Part Two

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|  |                                           
|- | ------------------------------------------
|  | PART TWO – THE COMPANY’S
      OBLIGATIONS
|  |                                           
|6 | REMUNERATION                              
|  |                                           
|  | 6.1                                       
|  |                                           
|  | 6.2                                       
|  |                                           
|  | 6.3                                       
|  |                                           
|  | 6.4                                       
|  |                                           
|  | 6.5                                       
|  |                                           
|7 | COMPANY CAR                               
|  |                                           
|  | 7.1                                       
|  |                                           
|  | 7.2                                       
|  |                                           
|8 | HOLIDAYS AND HOLIDAY PAY                  
|  |                                           
|  | 8.1                                       
|  |                                           
|  |                                           
|  |                                           
|  |                                           



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Service Contract – Part Two

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|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 8.2                                                                                                                                                                                                                                                                     | The holiday year is stated in
      the Schedule to this contract. Your entitlement to holidays accrues at the
      beginning of each holiday year. Holidays must be taken during the holiday
      year and may not be carried forward to the following holiday year.                                    
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 8.3                                                                                                                                                                                                                                                                     | All holidays must be approved
      by the Company. The granting by the Company of additional days of holiday
      in any one holiday year does not create any right to those holidays in future
      years.                                                                                             
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|9  | SICKNESS AND INJURY                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 9.1                                                                                                                                                                                                                                                                     | If you are prevented by sickness
      or injury from carrying out your duties under this contract, you will be
      entitled to receive sick pay from the Company for a maximum of 260 days
      in any 12 month period at the following rates:                                                        
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                         | 9.1.1                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                         | 9.1.2                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 9.2                                                                                                                                                                                                                                                                     | You may receive sick pay for a
      longer period at the Company’s discretion.                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 9.3                                                                                                                                                                                                                                                                     | The Company will deduct the amount
      of statutory benefits to which you are entitled under the Statutory Sick
      Pay Scheme (or any re-enactment of that Scheme or succeeding legislation)
      from any wages paid to you when you are absent by reason of sickness or
      injury.              
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 9.4                                                                                                                                                                                                                                                                     | The Company uses the five qualifying
      days of Monday to Friday in calculating payments to be made under the Statutory
      Sick Pay Scheme.                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|   | 9.5                                                                                                                                                                                                                                                                     | The Company may require you to
      undergo a medical examination at any time and in particular an annual health
      check. The Company will pay the cost of the examination and will select
      the doctor concerned who will send a written report to the Group’s
      Occupational Health Adviser.
|   |                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                            
|10 | PENSION                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                        
|   | Your entitlement to membership
      of a Company pension scheme is set out in the Schedule to this contract.
      A contracting out certificate has been issued in relation to the scheme.
      You may obtain details of the scheme from your Personnel Department.



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Service Contract – Part Two

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11 | DIRECTORSHIPS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | If you are appointed a director
      of any company in the United Utilities Group the Company will provide at
      its expense Directors and Officers Liability Insurance cover to provide
      so far as the law permits indemnity against any liability which you incur
      in defending any civil or criminal proceedings.                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12 | GRIEVANCE PROCEDURE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | If you have a grievance relating
      to your employment you should refer it to the manager or director to whom
      you report on a day to day basis. If you are dissatisfied by his or her
      decision you should give written notice of your grievance to the appropriate
      manager or director at the next level who will make a decision about your
      grievance or arrange for a decision to be made by an appropriate person
      or group of people. The decision reached at this level will be final.

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Service Contract – Part Three

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|   | PART THREE – YOUR
      OBLIGATIONS AS AN EMPLOYEE
|-- | --------------------------------------------------
|   |                                                   
|13 | COMPETITION AND SHAREHOLDINGS                     
|   |                                                   
|   | 13.1                                              
|   |                                                   
|   | 13.2                                              
|   |                                                   
|14 | CONFIDENTIALITY                                   
|   |                                                   
|   | 14.1                                              
|   |                                                   
|   | 14.2                                              
|   |                                                   
|   | 14.3                                              

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Service Contract – Part Three

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                    
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | 14.3.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information as to any acquisition or disposal
      or proposed acquisition or disposal of assets or shares by the Company.
      Any breach of confidence in relation to this type of information will not
      only be a breach of this contract which might justify summary dismissal
      but could also involve you in the commission of a criminal offence.
| |     
| |      | 14.3.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data as to the business strategy
      of the Company including its investments or proposed investments in shares
      or assets or in development projects or its policies concerning contracts
      or terms of business.                                                                                                                       
| |     
| |      | 14.3.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data as to the design of the
      Company’s equipment or as to the Companys technology (including bio-technology),
      manufacturing processes, apparatus or software including information as
      to any research or development work being carried out by or on behalf of
      the Company.                                                
| |     
| |      | 14.3.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data by way of list or otherwise
      as to the identity and or location of the Company’s customers or prospective
      customers.                                                                                                                                                                                                                
| |     
| |      | 14.3.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data as to the present or future
      purchasing requirements of the Company or of its customers or prospective
      customers.                                                                                                                                                                                                                   
| |     
| |      | 14.3.6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data as to the prices, discounts
      or other terms upon which the Company supplies or is willing to supply goods
      or services.                                                                                                                                                                                                              
| |     
| |      | 14.3.7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Information or data as to the description
      and quantities of products supplied to or held in stock for customers.                                                                                                                                                                                                                                             
| |     
| | 14.4 | All records (including records
      stored in any computer readable form), drawings and documents and copies
      of records drawings and documents relating to the Company’s activities
      or the activities of the United Utilities Group which you receive during
      your employment are the property of the Company. You must keep them safely
      and in confidence and must give them to the Company immediately if you are
      requested to do so. You must return all the records drawings and documents
      and all the copies you have to the Company if you leave the Company.

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Service Contract – Part Three

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|   |                     
|-- | --------------------
|15 | INTELLECTUAL PROPERY
|   |                     
|   | 15.1                
|   |                     
|   |                     
|   |                     
|   |                     
|   |                     
|   |                     
|   |                     
|   | 15.2                
|   |                     
|   | 15.3                
|   |                     
|   | 15.4                
|   |                     
|   |                     
|   |                     
|   |                     

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | 15.5 | If you make or discover or participate
        in the making or discovery of any Invention whilst you are employed under
        this contract which is not a Company Invention the Company shall (subject
        only to the provisions of the Patents Act 1977) have the right to acquire
        for itself or its nominee your rights in the Invention within 3 months
        after you have disclosed the Development Information to the Company as
        you are required to do by paragraph 15.3 above on fair and reasonable
        terms to be agreed or settled by a single arbitrator.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
| | 15.6 | You shall promptly disclose
        to the Company all copyright works or designs originated, conceived, written
        or made by you alone or with others (except only those works originated,
        conceived, written or made by you wholly outside your normal working hours
        which are wholly unconnected with your appointment) and shall hold them
        in trust for the Company until such rights shall be fully and absolutely
        vested in the Company.                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
| | 15.7 | You hereby assign to the Company
        by way of future assignment all copyright, design right and other proprietary
        rights (if any) for the full terms thereof throughout the World in respect
        of all copyright works and designs originated, conceived, written or made
        by you (except only those works or designs originated, conceived, written
        or made by you wholly outside your normal working hours which are wholly
        unconnected with your appointment) during the period of your appointment
        by the Company.                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
| | 15.8 | You irrevocably appoint the
        Company to be your attorney in your name and on your behalf to sign or
        execute any document and to do any thing and generally to use your name
        for the purpose of giving to the Company (or its nominee) the full benefit
        of the provisions of this paragraph. In favour of any third party a certificate
        in writing signed by any director or the secretary of the Company that
        any instrument or act falls within the authority conferred by this paragraph
        will be conclusive evidence that this is the case.  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
| | 15.9 | Rights and obligations under
        this paragraph will continue in force after the termination of your employment
        with the Company in relation to any Invention made or discovered or copyright
        works or designs originated, conceived, written or made during your employment
        with the Company.                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 

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Service Contract – Part Four

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|   |                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | PART FOUR –TERMINATION
      OF THE CONTRACT                                                                                                                                                 
|   |                                                                                                                                                                                              
|16 | TERMINATION OF EMPLOYMENT                                                                                                                                                                    
|   |                                                                                                                                                                                              
|   | 16.1                                                                                                                                                                                         
|   |                                                                                                                                                                                              
|   | 16.2                                                                                                                                                                                         
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   | 16.3                                                                                                                                                                                         
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|   |                                                                                                                                                                                              
|17 | SUSPENSION                                                                                                                                                                                   
|   |                                                                                                                                                                                              
|   | You may be suspended pending
          investigation of a disciplinary matter. You must co-operate in any investigation
          and give active assistance if you are called upon to do so.
|   |                                                                                                                                                                                              
|18 | GARDEN LEAVE                                                                                                                                                                                 
|   |                                                                                                                                                                                              
|   | 18.1                                                                                                                                                                                         
|   |                                                                                                                                                                                              

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------ | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | to you as a lump sum payment
            or the salary otherwise payable to you hereunder during any unexpired
            portion of your notice period or entitlement to notice as may be the
            case.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   | 18.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | During any period of notice given
      by the Company to you or by you to the Company, the Company may:                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 18.2.1                                                                                                                                                                                                                         | require you not to do work
            on behalf of the Company   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 18.2.2                                                                                                                                                                                                                         | require you not to attend the
      Company’s premises; and       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 18.2.3                                                                                                                                                                                                                         | suspend your authority to
            act on behalf of the Company
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | without otherwise affecting
            your duties to the Company under this contract and without affecting
            your entitlement to receive the remuneration and benefits due to you
            under this contract.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|19 | RESIGNATION OF DIRECTORSHIPS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   | If your employment is terminated
            (and whether or not you shall have worked or been allowed to work
            the period of notice referred to in paragraph 16.1 of this contract)
            you must within a period of seven days from the date of termination
            tender your resignation from the office of director of any company
            or companies in the United Utilities Group of which you are a director.
            If you fail to do so the Company Secretary for the time being of the
            Company shall tender your resignation on your behalf and you irrevocably
            appoint the Company Secretary your attorney for that purpose.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|20 | RETURN OF COMPANY CAR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   | On the termination of your
            employment (whether or not you shall have worked or been permitted
            to work the period of notice referred to in paragraph 16.1 of this
            contract) you must deliver your company car to the Company. This applies
            whether or not you intend to pursue any claim against the Company
            arising out of the termination of your employment.                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|21 | HOLIDAY PAY ON TERMINATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 
|   | Notwithstanding the provisions
            of sub-paragraph 8.2 above, if your employment is terminated for any
            reason part way through a holiday year you will receive payment for
            days of holiday due to you on a proportionate basis for that holiday
            year but not yet taken. If you have taken holidays in advance of your
            entitlement calculated in that way, the                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                |                                                                    | 

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|   |                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------
|   | Company will deduct the excess
        holiday payment received by you from your termination payment.
|   |                                                                                                      
|22 | PAYMENT OF FINAL SALARY                                                                              
|   |                                                                                                      
|   | 22.1                                                                                                 
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   | 22.2                                                                                                 
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      

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Service Contract – Part Five

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|   |                                        
|-- | ---------------------------------------
|   | PART FIVE – RESTRICTIVE
      COVENANTS
|   |                                        
|23 | COVENANTS                              
|   |                                        
|   | 23.1                                   
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        
|   |                                        

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Service Contract – Part Five

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | technical information or
            trade secret or Confidential Information of the Company or any other
            company in the United Utilities Group.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| |      | “restricted goods
            or services” means any goods or services described in the foregoing
            definition of “restricted activities”.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| |      | “a customer”
            means a business which at the date of the termination of your employment
            with the Company is or at any time during the period of one year prior
            to the termination of your employment with the Company has been a
            customer of or in the habit of dealing with, in relation to the supply
            of goods or services, the Company or any other company in the United
            Utilities Group. In this Clause 23 “a prospective customer”
            means any business to which at any time during the period of six months
            prior to the termination of your employment with the Company, the
            Company or any other company in the United Utilities Group shall have
            made tenders or given quotations or estimates.                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| |      | “a supplier”
            means a business which at the date of the termination of your employment
            with the Company is, or at any time during the period of one year
            prior to the termination of your employment with the Company has been
            a supplier of or in the habit of dealing with in relation to the supply
            of goods or services to the Company or any other company in the United
            Utilities Group, or a business which at the date of the termination
            of your employment with the Company is a prospective supplier of the
            Company or any other company in the United Utilities Group. “A
            prospective supplier” means any business which at any time during
            the period of six months prior to the termination of your employment
            with the Company has made or given to the Company or any other company
            in the United Utilities Group tenders, quotations or estimates.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| |      | “technical information”
            means all and any trade secrets, secret formulae, processes, inventions,
            designs, know how, discoveries, technical specifications and other
            technical information (whether or not recorded in documentary form
            or on computer disk or tape) relating to the creation, production
            or supply of any past, present, future or prospective product or service
            or the carrying on or proposed carrying on of any other activity by
            the Company or any other company in the United Utilities Group.                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| |      | “business development
            opportunity” means any opportunity to acquire or acquire an
            interest in or invest in or become involved in any business or in
            any goods or services supplied by or researched into or developed
            by any business or in any activities carried out by any business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             
| | 23.2 | This paragraph sets out
            an agreement reached in negotiation between the Company and you as
            to your terms and conditions of employment which is considered by
            the Company and you to be reasonable in view of all the relevant circumstances
            of your                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                             

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Service Contract – Part Five

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | employment, including in particular,
      your responsibilities and remuneration and the technical information, trade
      secrets and Confidential Information intrinsic in the activities in which
      you will be engaged in the course of your employment. The Company and you
      agree, however, that if in any proceedings it shall be determined that any
      provision contained in this paragraph as drafted is void but would be valid
      if a word or words were deleted, or a period or area of application reduced,
      then the paragraph shall take effect with such modification as may be necessary
      to make it valid and effective.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 23.3 | Each of the obligations in the
      following sub-paragraphs of this paragraph is independent and a separate,
      severable and distinct obligation which you owe to the Company. If any of
      the obligations in the following sub-paragraphs shall be held to be illegal
      or unenforceable, the enforceability of the remaining obligations shall
      not be affected.                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 23.4 | For a period of twelve months
      after the termination of your employment with the Company (whether or not
      you shall have worked or been permitted to work the period of notice referred
      to in paragraph 16.1 of this contract), you will not, without the express
      written permission of the Company, either solely or jointly as manager or
      officer or employee or agent of any business directly or indirectly be engaged
      in the conduct of or be interested in any business where:-                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | 23.4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | 23.4.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | 23.4.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 23.5 | You will not for a period of twelve
      months after the termination of your employment with the Company (whether
      or not you shall have worked or been permitted to work the period of notice
      referred to in paragraph 16.1 of this contract), without the express written
      permission of the Company, either solely or jointly as manager or officer
      or employee or agent of any business directly or indirectly be engaged in
      the conduct of or be interested in any business where:-                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | 23.5.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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Service Contract – Part Five

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                         
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | 23.5.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | you perform any part of your function for
      that business directly or indirectly in relation to the carrying on of restricted
      activities; and                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                         
| |      | 23.5.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the proper performance of such function requires
      or might reasonably be thought to require you to disclose or make use of
      any trade secret, technical information or other Confidential Information
      or require you to solicit or deal with customers and/or suppliers.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 23.6 | You will not for a period of twelve
      months after the termination of your employment with the Company (whether
      or not you shall have worked or been permitted to work the period of notice
      referred to in paragraph 16.1 of this agreement), accept employment with
      or work in any capacity for any of the following businesses where you perform
      any part of your function for the business directly or indirectly in relation
      to the carrying on of restricted activities and the proper performance of
      such function requires or might reasonably be thought by the Company to
      require you to disclose or make use of any trade secret, technical information
      or other Confidential Information or require you to solicit or deal with
      customers and/or suppliers:-                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                         
| |      | 23.6.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Any United Kingdom public limited company
      engaged in the provision of water, waste water, or electricity, services
      or any associated company of any such company.                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                         
| |      | 23.6.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Lyonnaise des Eaux Dumez SA or Companie General
      des Eaux SA or any associated company of either such company.                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 23.7 | You will not at any time during
      your employment with the Company either on your own account or on the account
      of any business directly or indirectly solicit, interfere with or endeavour
      to entice away from the Company or any other company in the United Utilities
      Group any employee of the company in question and will not for a period
      of twelve months after the termination of your employment with the Company
      (whether or not you shall have worked or been permitted to work the period
      of notice referred to in paragraph 16.1 of this agreement) either on your
      own account or on the account of any business directly or indirectly solicit,
      interfere with or endeavour to entice away from the Company any person who
      to your knowledge was at the date of termination of your employment with
      the Company an employee of the company in question.                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 23.8 | You will not at any time during
      your employment either on your own account or on the account of any business
      directly or indirectly induce or seek to induce by any means any supplier
      to cease dealing with, or to restrict or vary the terms upon which it deals
      with, the Company or any other company in the United Utilities Group and
      will not for a period of twelve months after the termination of your employment
      with the Company (whether or not you shall have worked or been permitted
      to work the period of notice referred to in paragraph 16.1 of this agreement)
      either on your own account or on the account of any business directly or
      indirectly induce or seek to induce by any means any business which to your
      knowledge is a supplier to cease dealing with, or to restrict or vary the
      terms upon which it deals with, the Company or any other Company in the
      United Utilities Group.

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| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 23.9  | You will not at any time during your employment
        with the Company either on your own account or on the account of any business
        directly or indirectly interfere with or endeavour to entice away from
        the Company or any other company in the United Utilities Group any customer,
        or induce or seek to induce by any means any customer to cease dealing
        with, or to restrict or vary the terms upon which it deals with, the Company
        or any other company in the United Utilities Group, or canvass or solicit
        orders for restricted goods or services from any customer, or deal with
        any customer in relation to the provision of restricted goods or services
        and will not for a period of twelve months after the termination of your
        employment with the Company (whether or not you shall have worked or been
        permitted to work the period of notice referred to in paragraph 16.1 of
        this agreement) either on your own account or on the account of any business
        directly or indirectly interfere with or endeavour to entice away from
        the Company or any company in the United Utilities Group any customer,
        or induce or seek to induce by any means any customer to cease dealing
        with or to vary the terms upon which it deals with the Company or any
        other company in the United Utilities Group or canvass or solicit orders
        for any restricted goods or service from any business which to your knowledge
        is a customer or deal with any such business in relation to the supply
        of any restricted goods or services.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 23.10 | You will not at any time during your employment
      with the Company either on your own account or on the account of any business
      directly or indirectly canvass, solicit, interfere with or endeavour to
      entice away from the Company or any other company in the United Utilities
      Group any business development opportunity in which the Company or any other
      company in the United Utilities Group has been concerned or interested or
      has considered becoming concerned or interested in at any time during your
      employment with the Company and will not for a period of twelve months after
      the termination of your employment with the Company (whether or not you
      shall have worked or been permitted to work the period of notice referred
      to in paragraph 16.1 of this agreement) either on your own account or on
      the account of any business directly or indirectly canvass, solicit, interfere
      with or endeavour to entice away from the Company or any other company in
      the United Utilities Group any business development opportunity in which
      the Company or any other company in the United Utilities Group has been
      concerned or interested or has considered becoming concerned or interested
      in at any time during the period of your employment with the Company and
      which you have become aware of or involved in during the course of your
      employment hereunder.                                                                                                                                                                                                      

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MANAGEMENT AND PROFESSIONAL GROUP
  – BAND A

SCHEDULE TO SERVICE CONTRACT
  – G A I Waters

START DATE

Your employment is classed as Band
  A within our management hierarchy. Your employment commences on 1 March 1996.

Your start date for calculation of
  continuity of employment is 1 March 1996.

SALARY

Your starting salary is £145,000
  p.a.

Salaries are paid monthly by bank
  transfer, on or about the 15th of the month.

BONUS SCHEME

You will be eligible for a bonus payment
  of up to 40% of basis salary, paid annually. Bonuses may be paid only if your
  part of the Company achieves its financial targets. Bonus payments are made
  at the Company’s sole discretion and are not a contractual entitlement.

Your first bonus payment will be made
  in 1997, reflecting performance in the 1996/7 Financial Year. Please note, however,
  that the bonus scheme is likely to be replaced by an alternative scheme following
  a review being undertaken by the Remuneration Committee.

HOLIDAYS

You are entitled to 26 days paid holiday
  per year, rising by one day per completed year of service to a maximum of 30
  days. Holidays are accrued at one-twelft of annual entitlement per completed
  month of service.

PENSION

On commencement of employment you
  will automatically be enrolled in the Water Pension Scheme, paying contributions
  at 6% of salary unless you notify us that you do not wish to become a scheme
  member. Details are contained in the Member’s Guide.

You will also be eligible to join
  the Companys Executive Pension Scheme. In brief, this provides for an enhanced
  accrual rate based on a 1/30th of Final Pensionable Earnings for each year of
  reckonable service up to the Inland Revenue limits.



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A contracting-out certificate from SERPS has been
  issued.

In addition to the above, the Company is prepared
  to make an unapproved commitment which will make up the difference between the
  pension generated above and the pension that would have been available had the
  Inland Revenue limit on earnings not applied.

EXECUTIVE SHARE OPTIONS

You are entitled to participate in the Company’s
  Executive Share Option Scheme. Options are granted each year at the sole discretion
  of the Board, up to the amount of four times your annual salary. Please note
  that this appointment falls within the ambit of the Group’s Remuneration
  Committee which is currently reviewing executive remuneration. The outcome of
  that review is not yet known but it is likely that the emphasis will change
  to track more closely increased shareholder value. Any subsequent changes will
  not diminish your remuneration package in the round.

You are also entitled to participate in the Company’s
  SAYE Share Option Scheme.

COMPANY CAR

You are entitled to participate in the Lease Car
  Scheme, which provides you with a vehicle of Western European origin on Band
  A of the Company’s list of approved vehicles.

You will be reimbursed for business and private
  mileage.

PRIVATE HEALTH SCHEME

You are entitled to participate in the Company’s
  private health scheme. Cover for your family will also be provided (in the case
  of children, until the end of their full time education).

This benefit is subject to Income Tax under Inland
  Revenue rules.

MEDICAL SCREENING

You will be provided with a facility for a regular
  medical screening at the expenses of the Company.

TELEPHONE CHARGES

You will be reimbursed in respect of the rental
  of the telephones installed in your home and for official calls made from it.
  You will also be provided with a fax at home. The Company will

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pay for a business line.

PROFESSIONAL INSTITUTIONS AND SOCIETIES

You will be reimbursed for any professional subscriptions
  relevant to your appointment.

INDEMNIFICATION AGAINST RISK OF DEATH OR INJURY

All employees are covered by the terms of the Group’s
  Personal Accident Insurance Scheme, which includes payment of up to five times
  salary in the event of death or serious disablement.

RELOCATION

If you are required, by United Utilities, to move
  house during the course of your employment with the Company, you will be entitled
  to reimbursement of all direct costs associated with the move, such as removal
  expenses, legal expenses and estate agent’s fees. In addition, a disturbance
  allowance of up to £5000 will be paid against receipted costs of fixtures
  and fittings in the new home. The reasonable costs of temporary accommodation
  in the new location prior to purchase will also be met by the Company.

This entitlement would have to be taken up within
  12 months from the date of starting with the Company.

Additional assistance, such as bridging finance,
  may be provided where appropriate.

These provisions apply to permanent relocation
  and do not cover temporary secondments or placements.

The above relocation clauses will be applied only
  at the discretion of the Company and do not form part of your contract of employment.
  Benefits may be taxable under Inland Revenue rules.

NO SMOKING POLICY

United Utilities aims to provide a smoke-free environment
  for all its employees. You must not smoke at any time while on Company premises.

NOTICE

Your employment with the Company will be subject
  to the following periods of notice in writing in the event of termination in
  accordance with Clause 16.1 of this Agreement:



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|• | From you to the Company –
      twelve months’ notice      
|- | -----------------------------------------------------------
|  |                                                            
|• | From the Company to you –
      twenty four months’ notice.



SIGNED FOR AND ON BEHALF OF UNITED UTILITIES



|......................................................... |  | ............................. | 
|--------------------------------------------------------- |  | ----------------------------- | 
|Brian L Staples
      Chief Executive                     |  | Date                          | 



I HAVE READ AND ACCEPT THE TERMS DETAILED IN THIS AGREEMENT



|.......................................................... |  | ............................. | 
|---------------------------------------------------------- |  | ----------------------------- | 
|                                                           |  | Date                          | 



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