exv4w3






Exhibit 4.3




 






RULES OF THE REED ELSEVIER GROUP PLC

BONUS INVESTMENT PLAN 2010




 






(Approved by the shareholders of Reed Elsevier PLC

in general meeting on 21 April 2010)



(Approved by the shareholders of Reed Elsevier NV

in general meeting on 20 April 2010)



Adopted by the directors of Reed Elsevier Group plc on 21 April 2010







 









 





THE REED ELSEVIER GROUP PLC BONUS INVESTMENT PLAN 2010




1. Definitions



1.1 In this Plan, unless the context otherwise requires, the following expressions have the
following meanings:



Adoption Date means 21 April 2010;



Capital Reorganisation means any variation in the share capital or reserves of a Qualifying Company
(including without limitation, by way of capitalisation issue, rights issue, sub-division,
consolidation or reduction);



Cash Investment means the proportion or amount of an Employee’s Investment Amount which he has
chosen to source in cash;



Committee means the remuneration committee of the board of directors of the Company or other duly
authorised committee;



Company means Reed Elsevier Group plc;



Control has the meaning given to it by section 995 Income Taxes Act 2007;



Date of Grant means the date on which a Matching Share Award is granted by the Committee under Rule
4.2;



Dealing Restrictions means any restrictions on, or requirement for, approvals for dealing in Shares
whether under the Company’s, RE PLC’s or RE NV’s share dealing rules, the provisions of the Model
Code for Securities Transactions by Directors of Listed Companies, the provisions of the Listing
Rules of the UK Listing Authority or the City Code on Takeovers and Mergers or any of their
equivalents in any applicable jurisdiction;



Dividend Equivalent means a right to a cash payment or Shares in accordance with Rule 7;



Dutch ADS means an American Depositary Share representing a Dutch Share;



Dutch Share means an ordinary share in the capital of RE NV or any other shares representing those
shares following any Capital Reorganisation;



Employee means any employee or executive director of any member of the Group or a Qualifying
Company;



Existing Shares means, unless the Committee specifies otherwise in an Invitation, any Shares which
are beneficially owned by a Participant, excluding any Shares which the Participant holds as
Personal Shares under the Reed Elsevier Group plc Growth Plan;



Gross Investment Amount means the Investment Amount prior to the deduction of income tax and
employee’s social security contributions;



Group means the Company and every company which is under the Control of the Company, and member of
the Group will be construed accordingly;







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Investment Amount means the percentage or amount of his Investment Opportunity which a Participant
invests in the Plan in accordance with Rule 3.3(a);



Investment Date means such date as is specified by the Committee in an Invitation for the purchase
of Investment Shares or, if Dealing Restrictions are in place on that date, such later date when
the Dealing Restrictions lift;



Investment Opportunity means an amount equal to an Employee’s net target bonus opportunity as at
the 31 December preceding the Date of Grant under an annual bonus scheme operated by any member of
the Group, or such lesser amount determined on any other basis as the Committee may specify from
time to time;



Investment Period means the period specified in Rule 5.4(b);



Investment Shares means Shares held by a Participant in this Plan in accordance with Rules 3.4 to
3.6 of this Plan;



Invitation means an invitation to participate in the Plan issued to an Employee by the Committee in
accordance with Rule 3.2;



Matching Share Award means, unless Schedule 5 applies, a right granted under Rule 4 to receive
Shares without payment and references to Matching Shares will be construed accordingly;



Participant means any individual who holds a subsisting Matching Share Award (including where the
context permits, the legal personal representatives of a deceased Participant);



Performance Period means the period, as specified in Rule 5.4(c) after which the Performance Target
is measured;



Performance Target means, unless the Committee determines otherwise at the Date of Grant, the
conditions set out in Schedule 1 and measured after the end of the Performance Period applicable to
Matching Share Awards;



Plan means this Reed Elsevier Group plc Bonus Investment Plan 2010 as amended from time to time;



Price means the price or the mean average of the prices, as applicable, at which Investment Shares
are purchased pursuant to Rule 3.4;



Qualifying Company means each of RE PLC and RE NV;



RE NV means Reed Elsevier NV;



RE PLC means Reed Elsevier PLC;



Rules means the rules of the Plan;



Share means a UK Share, a Dutch Share, a UK ADS and a Dutch ADS and Shareholder will be construed
accordingly;



Termination Date means the date on which a Participant ceases to be an Employee;







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UK ADS means an American Depositary Share representing a UK Share;



UK Share means an ordinary share in the capital of RE PLC or any other shares representing those
shares following any Capital Reorganisation;



Normal Vesting Date means the date, following the end of the Performance Period, on which the
Committee determines the extent to which the Performance Target has been satisfied or, if there are
Dealing Restrictions in place on that date, such later date when those Dealing Restrictions lift;



Vesting means the Participant becoming absolutely entitled to receive the Shares comprised in his
Matching Share Award in accordance with these Rules and Vest and Vested will be construed
accordingly.



1.2 References to any statute or statutory instrument or to any part or parts thereof include any
modification, amendment or re-enactment thereof for the time being in force.



1.3 Words of the masculine gender will include the feminine and vice versa and words in the
singular will include the plural and vice versa unless in either case the context otherwise
requires or is otherwise stated.



1.4 The Committee may establish additional schedules to the Plan for the benefit of employees
outside the UK, based on the Plan but modified to take account of local tax, exchange control or
securities laws in overseas territories.




2. Eligibility



Employees are eligible to participate in the Plan as selected by the Committee. Employees under
notice of termination of employment at the Date of Grant are not eligible to participate, unless
the Committee determines otherwise.




3. Investment Shares




Investment Opportunity



3.1 The Committee may invite selected Employees to invest a specified percentage, up to a maximum
of 100%, of their Investment Opportunity (or such lesser amount as specified by the Committee from
time to time) in Investment Shares in accordance with the terms of this Plan.




Invitation to Participate



3.2 Following the notification of the amount of any annual bonus payable to the Employee for any
financial year, Invitations to participate in the Plan will be sent to selected Employees. The
Invitation will specify:





	(a)	 	the Investment Opportunity;






	(b)	 	the maximum percentage of the Investment Opportunity which the Employee may invest in the
Plan;




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	(c)	 	the minimum percentage of the Investment Opportunity which the Employee may invest in the
Plan and any applicable multiples of that minimum percentage;






	(d)	 	the sources which an Employee may use to invest in the Plan, which will be any or all of the
following as determined by the Committee: net annual bonus received in respect of the
financial year preceding the Invitation, any other cash funds available to the Employee and
Existing Shares;






	(e)	 	the date by which the Employee must accept his Invitation in order to participate in the
Plan;






	(f)	 	the date or dates by which and the person to whom the Employee must transfer his Investment
Amount in order to be able to participate in the Plan;






	(g)	 	the Investment Date;






	(h)	 	the method by which the number of Shares subject to a Matching Share Award is calculated and
the Performance Target; and






	(i)	 	such other information as the Committee may determine.





Requirements for acceptance of an Invitation



3.3 When accepting an Invitation, an Employee will:





	(a)	 	specify his chosen Investment Amount;
	 
	(b)	 	to the extent that the Invitation allowed more than one source for the Investment Amount,
specify the percentage of his Investment Amount which he wishes to contribute by reference to
each source;
	 
	(c)	 	to the extent that the Investment Amount comprises a Cash Investment, agree to pay directly
or, if appropriate, direct his employing company to pay, that amount to the Company (or such
other person as the Committee may specify) by the specified date;
	 
	(d)	 	to the extent that the Investment Amount comprises Existing Shares, agree to transfer the
required number of Existing Shares (to such person as the Committee may specify) by the
specified date, or to take any alternative action with regard to such Existing Shares as
determined by the Committee;
	 
	(e)	 	specify the proportion of UK Shares, Dutch Shares, UK ADSs, and Dutch ADSs (i) which should
comprise the Investment Shares to be acquired with the Cash Investment on the Investment Date
and/or (ii) which will comprise the Existing Shares being transferred;
	 
	(f)	 	agree to comply with such arrangements for the holding of the Investment Shares as the
Committee may determine appropriate;
	 
	(g)	 	agree that he will execute such tax elections as the Committee may consider necessary or
desirable including without limitation an election under section 431 Income Tax (Earnings and
Pensions) Act 2003;




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	(h)	 	agree that he will comply with such other conditions as the Committee may specify as a
condition of grant of a Matching Share Award; and
	 
	(i)	 	complete any other aspects of the Invitation as required.





Purchase of Investment Shares



3.4 Subject to the Company (or such other person as the Committee specified) having received the
Participant’s Cash Investment by the specified date, the Committee will arrange to purchase, on the
Investment Date, the number of Shares (of the type specified by the Employee in his completed
Invitation) which can be purchased with the Participant’s Cash Investment. However, if it is not
reasonably practicable to make the required purchases of Shares on behalf of all Employees
participating in the Plan on the Investment Date, then the Shares will be purchased over a number
of dealing days and each Participant will be treated as having acquired his Investment Shares at
the mean average of the prices at which all such Shares were purchased. A Participant will have no
entitlement to be repaid any part of the Cash Investment which is insufficient to purchase a whole
Share.



3.5 A Participant’s total number of Investment Shares will be the aggregate of (i) the nearest
whole number of Shares that are acquired pursuant to Rule 3.4 with the Cash Investment provided by
the Employee and (ii) the Existing Shares which the Employee elected to commit to the Plan pursuant
to Rule 3.3(d) above, which are transferred into the Plan by the specified date and which are
deemed to be invested in the Plan at the Price. A Participant will be notified of his total number
of Investment Shares.



3.6 If an Employee makes an election under Rule 3.3 but (i) that election is made after the date
specified in the Invitation or (ii) he fails to provide funds to enable the Investment Shares to be
purchased by the specified date, the Committee will not be required to proceed with granting a
Matching Share Award but may in its absolute discretion decide to do so, subject to the Rules of
this Plan, provided that the Investment Shares will then be purchased at the price prevailing on
the dealing day on which the Investment Shares are actually purchased and the Shares to be
comprised in the Matching Share Award will be calculated accordingly.




Retention of Investment Shares



3.7 A Participant’s Investment Shares must, except to the extent expressly provided otherwise by
these Rules, continue to be held under the Plan until the date of Vesting of the related Matching
Share Award.



3.8 During the Investment Period, the Participant will not sell, transfer, pledge, assign or
otherwise dispose of all or any Investment Shares, nor request the transfer of such Investment
Shares to himself (provided that the Committee may in its absolute discretion allow such actions or
release the Investment Shares to the Participant if it considers that exceptional circumstances
exist, in which case the Committee will determine the extent to which the related Matching Share
Award will be scaled back, if at all, and in what manner). Any such action or attempt at such
action by the Participant (without consent) will result in the automatic lapse of the Matching
Share Award.



3.9 At the end of the Investment Period, the Participant’s Investment Shares will be released to
him as soon as reasonably practicable.







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Beneficial ownership of Investment Shares



3.10 The beneficial interest in the Investment Shares, to the extent not already held by the
Participant will pass to the Participant on the Investment Date or the date upon which they are
otherwise purchased pursuant to Rules 3.4 or 3.6. During the Investment Period, the Participant
will be entitled to receive all dividends payable in respect of the Investment Shares and will have
the rights commonly enjoyed by a beneficial owner of Shares provided that any voting rights will be
exercisable by a direction in writing given to the trustee or other nominee in whose name the
Investment Shares are registered. The Participant will have no corresponding rights in respect of
the Shares in the Matching Share Award prior to Vesting.




4. Grant of Matching Share Awards




Number of Shares comprised in a Matching Share Award



4.1 On the Investment Date, the Committee will grant a Matching Share Award to an Employee who has
committed Investment Shares to the Plan. Except as otherwise provided in these Rules, the number
of Shares comprised in the Matching Share Award will be the nearest whole number of Shares which
can be acquired at the Price with the Participant’s Gross Investment Amount. The Matching Share
Award will include UK Shares, Dutch Shares, UK ADSs and Dutch ADSs in the same proportions as those
comprised in the Investment Shares. If an Employee has committed to transfer Existing Shares into
the Plan to make up part or all of his Investment Amount, and then fails to transfer the required
value of Existing Shares by the specified date, any Matching Share Award already granted to him
will immediately lapse in whole or in part as determined by the Committee.




Timing of grant of Matching Share Award



4.2 A Matching Share Award will normally be granted by the Committee within the period of 42 days
commencing on:





	(a)	 	in respect of the grant of Matching Share Awards in 2010, the day immediately following the
day on which the Plan was approved by RE PLC in general meeting and by RE NV in general
meeting;
	 
	(b)	 	the date on which a Qualifying Company makes an announcement of its results for the full
year, the half year or any other interim results or trading update; and
	 
	(c)	 	any other date when the Committee resolves that exceptional circumstances exist which justify
the grant of a Matching Share Award,




If Dealing Restrictions remain in force during such period (or for such longer period as the
Committee thinks fit) the Committee will either:





	 	(i)	 	invite the Employee to reconsider whether he wishes to elect to
participate in the Plan; or
	 
	 	(ii)	 	withdraw the Invitation.




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5. Terms of Matching Share Awards



5.1 The grant of a Matching Share Award is conditional upon a Participant agreeing to comply with
any arrangements specified by the Company for the payment of tax and social security contributions
in respect of Shares to which he is or may become entitled under the Plan including, without
limitation (i) the right to sell on the Participant’s behalf sufficient Shares to satisfy any tax
or social security contributions liability on his part for which any member of the Group may be
liable and (ii) entering into any election under Chapter 2 of Part 7 of the Income Tax (Earnings &
Pensions) Act 2003 specified by the Company.



5.2 Matching Share Awards will be granted on the basis that they only Vest to the extent that the
Performance Target has been satisfied.



5.3 The Committee may make the grant of Matching Share Awards subject to any other conditions it
determines appropriate including requiring a Participant to agree to comply with certain
post-employment restrictive covenants.



5.4 Matching Share Awards will be granted by deed. Each Participant will receive information
(electronically or in hard copy) following the Date of Grant summarising the main terms of the
Matching Share Award. This summary may include the following information:





	(a)	 	The Number of Shares — number of Investment Shares and number of Shares comprised in the
Matching Share Award and in what proportion they comprise UK Shares, Dutch Shares, UK ADSs
and/or Dutch ADSs.
	 
	(b)	 	The Investment Period — The Investment Period will commence on the Investment Date and will
expire on the earlier of the Normal Vesting Date or other date of Vesting under these Rules .
	 
	(c)	 	The Performance Period — The Performance Period will be the period of three consecutive
financial years commencing with the financial year in which the Date of Grant falls.
	 
	(d)	 	Details of the Performance Target applicable to Matching Share Awards.
	 
	(e)	 	The terms of any other conditions imposed pursuant to rules 5.1 and 5.3.
	 
	(f)	 	Which (if any) Schedules to the Plan apply to the Matching Share Award.





6. Normal Vesting of Matching Share Awards



6.1 Except as otherwise provided in these Rules, the number of Matching Shares which Vest on the
Normal Vesting Date will be determined by the Committee following the expiry of the Performance
Period by reference to the extent to which the Performance Target has been satisfied and any other
conditions to which the Matching Share Award is subject are fulfilled or waived. A Matching Share
Award will lapse on the Normal Vesting Date to the extent that it does not Vest.



6.2 The Investment Shares together with the Vested Matching Shares will be released to the
Participant as soon as reasonably practicable following the Normal Vesting Date along with the
Dividend Equivalent.







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7. Entitlement to Dividend Equivalents



7.1 In addition to any Shares which a Participant becomes entitled to on the Vesting of a Matching
Share Award, the Participant will, subject to Rule 7.3, also be entitled to a cash payment equal in
value to the ordinary dividends (excluding any associated tax credit) which would have been paid on
the Vested Matching Shares during the period commencing at the start of the Performance Period and
ending on the earlier of (i) the end of the Performance Period and (ii) the Vesting of the Matching
Share Award.



7.2 The cash payment to which the Participant becomes entitled under Rule 7.1:





	(a)	 	will be calculated (in such manner as the Committee sees fit) by reference to the currency
payment of the underlying dividend (and paid in such currency as the Committee sees fit);
	 
	(b)	 	will be calculated without any entitlement to interest (or other type of investment return)
in the period between the dividend payment date and Vesting;
	 
	(c)	 	will be paid (subject to such deductions as are required by law) within one month of Vesting;
and
	 
	(d)	 	will be calculated by reference to ordinary dividends and without regard to special dividends
or distributions or dividends-in-specie;




7.3 Instead of making a cash payment, the Committee may in its discretion satisfy any entitlement
to Dividend Equivalents arising in accordance with Rule 7.1 by transferring existing Shares with an
equivalent value (as determined at the time of Vesting).



7.4 For the avoidance of doubt, any payment referred to in this Rule 7 does not represent an
entitlement to actual dividends on the underlying Shares, by reason of the Participant not being
beneficial owner of the Shares at that time.




8. Termination of Employment




Participant gives or receives notice



8.1 Except as otherwise provided in these Rules, in the event that a Participant gives or receives
notice of termination of employment for any reason other than those set out in Rules 8.2 and 8.4, a
Matching Share Award will automatically lapse on the date on which notice is given or received. The
Participant’s Investment Shares will be released to him as soon as reasonably practicable after the
date of notice.




Approved Leaver



8.2 Except as otherwise provided in these Rules, in the event that the Participant ceases to be an
Employee during the Investment Period by reason of:





	(a)	 	redundancy (as defined in section 139 of the Employment Rights Act 1996);
	 
	(b)	 	retirement with the consent of the Company;




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	(c)	 	the sale of the company or business in which the Participant is employed out of the Group; or
	 
	(d)	 	any other reason the Committee, in its absolute discretion, determines:






	 	(i)	 	the Matching Share Award will continue in force over a Pro-rated
Number of Shares until the end of the Investment Period and will lapse as to the
balance on the Termination Date. The Matching Share Award will Vest on the
Normal Vesting Date in accordance with Rule 6; and
	 
	 	(ii)	 	the Participant will be required to retain a Pro-rated Number of
Investment Shares in the Plan until the end of the Investment Period, at which
time those Shares will be released to the Participant. The balance of the
Investment Shares will be released to the Participant as soon as reasonably
practicable following the Termination Date.




8.3 The Committee has discretion to vary the application of Rule 8.2 and determine that a
Participant’s Matching Share Award and Investment Shares should be treated as set out in Rule 8.4
instead.




Death, Injury, Disability and Ill-health.



8.4 Save as otherwise provided in these Rules, in the event that the Participant ceases to be an
Employee during the Investment Period:





	(a)	 	by reason of death, injury, disability or ill-health:






	 	(i)	 	the Shares comprised in a Matching Share Award will Vest over a
Pro-rated Number of Shares subject to performance. The Performance Target will
be assessed based on progress made against targets at the Termination Date as
determined at the Committee’s absolute discretion. Such determination will take
place as soon as practicable after the Termination Date and to the extent that
the Matching Share Award does not Vest on the date of determination, it will
immediately lapse; and
	 
	 	(ii)	 	the Investment Shares will be released in full to the Participant
or his personal representatives (as applicable) as soon as reasonably
practicable following the Termination Date.




8.5 The Committee has discretion to vary the application of Rule 8.4 and determine that:





	(a)	 	a Participant’s Matching Share Award and Investment Shares should be treated as set out in
Rule 8.2 instead; or






	(b)	 	the Performance Target will be waived and/or Shares comprised in a Matching Share Award will
Vest in full on the Termination Date and the Investment Shares will be released in full to the
Participant or his personal representatives (as applicable) as soon as reasonably practicable
following the Termination Date.




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8.6 For the purposes of this Rule 8, the Pro-rated Number will be such number of Shares as is
determined by multiplying the number of Investment Shares or Shares comprised in a Matching Share
Award (as applicable) by A/B where A is the number of complete calendar months which the
Participant was employed during the Performance Period and B is 36.




9. Claw-Back Arrangements




Breach of Restrictive Covenants



9.1 If a Participant breaches any term of his post-termination restrictive covenants (such breach
to be determined by the Committee acting fairly and reasonably), any unvested Matching Share Awards
will lapse on the date of the Committee’s determination and the Committee may require him to pay to
the Company or any other member of the Group, within seven days of written demand from the Company,
the Relevant Amount (as defined in Rule 9.2 below).



9.2 The Relevant Amount is an amount equal to A minus both B and C where:



A is an amount equal to the pre-tax gain realised by the Participant in respect of any Matching
Share Awards and Dividends Equivalents in the period beginning six months before the Termination
Date and ending when the Participant’s restrictive covenants cease to apply. For these purposes,
the gain will be the sum of the market value of the Vested Shares when received by the Participant
and the related Dividend Equivalents, and such gain will be determined irrespective of whether the
Participant has sold or retained the Shares so acquired;



B is an amount equal to the tax and social security charges and liabilities incurred by the
Participant in respect of A; and



C is any payment of the Claw-back Amount, determined in accordance with Rule 9.4, in respect of A.




Materially misstated financial or other data



9.3 If the Committee, within two years after the Vesting of a Matching Share Award, considers that
the Vesting of the Matching Share Award and/or the payment of Dividend Equivalents was determined
on the basis of materially misstated financial or other data (the Incorrect Award), it will, unless
it determines otherwise, recover the Claw-back Amount (as defined in Rule 9.4 below) by taking one
or more of the following actions:





	(a)	 	reduce any outstanding unvested Matching Share Awards by the Claw-back Amount; and/or
	 
	(b)	 	reduce any future Matching Share Awards by the Claw-back Amount; and/or
	 
	(c)	 	require the Participant to pay to the Company, within thirty days of a written demand from
the Company, the Claw-back Amount.




9.4 The Claw-back Amount will be the difference between (i) the Incorrect Award and (ii) the
Matching Share Award and Dividend Equivalents that would have Vested or been payable had the
correct data, as determined by the Committee acting fairly and reasonably, been used. This may be
expressed as a number of Shares or






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a monetary amount or a combination thereof as the Committee considers appropriate. In determining
the Claw-back Amount, the Committee may take into account such matters as it sees fit including,
but not limited to:





	(a)	 	the difference between the Incorrect Award and the correct Matching Share Award;
	 
	(b)	 	any gain made by the Participant on the sale of Shares comprised in the Matching Share Award;
	 
	(c)	 	any tax and/or dealing costs incurred by the Participant in connection with the Incorrect
Award, and
	 
	(d)	 	whether the Participant has made a payment pursuant to Rules 9.1 to 9.2 which would take
account of Shares subject to an Incorrect Award.




9.5 By accepting a Matching Share Award, a Participant will be bound by this Rule 9 notwithstanding
(i) that it may only be applicable after the release of Shares under these Rules and (ii) whether
or not the essential terms of this Rule 9 have been separately notified to each Participant.




10. Change of Control of a Qualifying Company



10.1 Except as otherwise provided in these Rules, if any person:





	(a)	 	obtains Control of a Qualifying Company as a result of making an offer to acquire Shares
which is either unconditional or is made on a condition such that if it is satisfied the
person making the offer will have Control of that Qualifying Company;
	 
	(b)	 	becomes bound or entitled to acquire Shares under sections 979 and 983 of the Companies Act
2006 (or in relation to RE NV becomes entitled to acquire compulsorily Shares held by minority
shareholders); or
	 
	(c)	 	obtains Control of a Qualifying Company in pursuance of a compromise or arrangement
sanctioned by the Court under section 899 of the Companies Act 2006 (or in relation to RE NV
under any equivalent legislative provision in the Netherlands),




then any unvested Matching Share Awards over Shares in that Qualifying Company (but not those in
the other Qualifying Company) will Vest in respect of the Pro-rated Number within 30 days of the
relevant event, subject to the Performance Target. The Performance Target will be assessed based
on progress made against targets as at the date of the relevant event as determined by the
Committee in its absolute discretion.



10.2 Any Matching Share Award over Shares in that Qualifying Company which do not Vest as a result
of the relevant event will lapse on the relevant event.



10.3 The Investment Shares in that Qualifying Company (but not those in the other Qualifying
Company) will be released as soon as reasonably practicable after the date of the relevant event.







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10.4 For the purposes of this Rule 10, the Pro-rated Number will be such number of Shares as is
determined by multiplying the number of Shares comprised in a Matching Share Award by A/B where A
is the number of complete calendar months between the start of the Performance Period and the
relevant event (but cannot exceed 36) and B is 36.




11. Change of Control of the Company



Except as otherwise provided in these Rules, the provisions of Rule 10 will apply with any
necessary changes in the event that any person (either alone or together with any person acting in
concert with him) obtains Control of the Company and the Shares comprised in Matching Share Awards
which may Vest, and the Investment Shares which may be released, as a result of the relevant event
will be Shares in both Qualifying Companies.




12. Internal Reorganisation 



12.1 Rules 10 and 11 will not apply if the purpose and effect of the change of Control or scheme of
arrangement is:





	(a)	 	to create a new holding company for the relevant Qualifying Company, such company having
substantially the same Shareholders and proportionate shareholdings as those of the Qualifying
Company immediately prior to the scheme of arrangement;
	 
	(b)	 	to give one Qualifying Company Control (directly or indirectly) of the other Qualifying
Company;
	 
	(c)	 	the person obtaining Control of the Company is one of the Qualifying Companies or a company
under the Control of one or both of them; or
	 
	(d)	 	the Company remains under the ultimate Control of the Shareholders of the Qualifying
Companies immediately prior to the relevant transaction affecting the Company.




12.2 If Rule 12.1 applies:





	(a)	 	Matching Share Awards will not Vest and Investment Shares will not be released as a result
of the relevant event;
	 
	(b)	 	a Matching Share Award will instead be exchanged for an equivalent award over such shares as
the Committee determines appropriate;
	 
	(c)	 	Investment Shares will instead be exchanged for shares or cash and continue to be subject to
the Plan on such terms as the Committee determines appropriate; and
	 
	(d)	 	the Committee may make any modifications to the Performance Target as it determines
appropriate.




12.3 The Committee may vary the application of this Rule 12 so that it applies to Matching Share
Awards and Investment Shares over Shares in both Qualifying Companies or to Shares in only one
Qualifying Company.







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12.4 Where Rule 12 applies, a Participant will not be treated as ceasing to be an Employee until he
ceases to be employed by a company which is either the relevant holding company or a subsidiary of
the holding company (within the meaning of section 1159 of the Companies Act 2006).




13. Rollover on a Change of Control



13.1 The Committee may determine that Rules 10 or 11 will not apply on a change of Control of a
Qualifying Company or the Company (as applicable) and may, with the consent of the person obtaining
Control, (i) determine that the Matching Share Awards will be rolled over in accordance with either
the provisions of Rule 12.2 or Rule 13.2 or (ii) allow the Participants to choose between Vesting
under Rules 10 or 11 as applicable and rollover in accordance with, as determined by the Committee,
Rule 12.2 or Rule 13.2.



13.2 The Committee can determine that Matching Share Awards are rolled over in accordance with the
following terms:-





	(a)	 	the Performance Target will be assessed based on progress made against targets as at the date
of the relevant event as determined by the Committee in its absolute discretion;
	 
	(b)	 	to the extent that the Performance Target has been met, a Matching Share Award will be
exchanged for an equivalent award over such shares as agreed between the Committee and the
person obtaining Control, and will Vest on the Normal Vesting Date subject to the Participant
remaining in employment within the acquirer group of companies (unless Rules 8.2 to 8.6 apply)
and will be subject to the Rules as they last had effect in relation to the Matching Share
Award that was rolled-over;
	 
	(c)	 	to the extent that the Performance Target has not been met, the Matching Share Award will
immediately lapse; and
	 
	(d)	 	the Committee may specify such requirements in relation to the Investment Shares as it
determines appropriate.




13.3 For the avoidance of doubt, in Rules 10, 11, 12 and 13, “Committee” means those people who
were members of the Committee immediately before the event by virtue of which the applicable Rule
applies.




14. Voluntary winding up



The provisions of Rule 10 will apply with any necessary changes in the event that notice is duly
given of a resolution for a voluntary winding up of a Qualifying Company provided
that, all references in that Rule to the date of the relevant event will be treated as
references to the date on which notice is given for the voluntary winding-up of a Qualifying
Company.




15. Adjustments



15.1 In the event of:





	 	(i)	 	any Capital Reorganisation; or




Page 13









 












	 	(ii)	 	the implementation by a Qualifying Company of a demerger or the
payment by a Qualifying Company of a super-dividend which would otherwise
materially affect the value of a Matching Share Award;






	(a)	 	the number of Shares comprised in the Participant’s Matching Share Award will be adjusted in
such manner as the Committee, in its absolute discretion, thinks fit; and
	 
	(b)	 	a Participant will in respect of his Investment Shares be treated in the same manner as any
other holder of Shares, except that (unless the Committee determines otherwise):






	 	(i)	 	in the event of a rights issue in respect of Investment Shares,
the Participant (or other nominee holding Investment Shares on his behalf) will
be required to sell sufficient rights nil-paid (at such time during the rights
issue as the Committee thinks fit) as will enable the Participant to acquire
with the proceeds of sale the remainder of the Participant’s rights entitlement
PROVIDED THAT the Participant may elect to take up in a personal
capacity the rights that would have been sold (and such Shares will not be
subject to this Plan) subject to the Participant providing sufficient funds to
give effect to his obligation under the first part of this sub-paragraph (i);
	 
	 	(ii)	 	in the event of receipt of cash (other than dividends paid in the
normal course) or securities (other than Shares) in respect of Shares (on a
demerger or other reorganisation of the share capital of a Qualifying Company),
the Committee will in its absolute discretion determine whether such cash or
securities will be released to the Participant or whether the nominee holding
Shares on behalf of the Participant will be required to apply that cash (or the
proceeds of sale of such securities), after allowing for tax thereon, in the
purchase of further Investment Shares to be held on behalf of the Participant.





16. Source of Shares



Shares required to satisfy the rights of Participants with respect to Investment Shares and
Matching Share Awards will be from purchases on a recognised stock exchange. No new Shares will be
issued or Shares transferred out of treasury in connection with the Plan.




17. Rights attaching to shares transferred pursuant to Matching Share Awards



17.1 All Shares transferred upon the Vesting of a Matching Share Award will rank pari passu in all
respects with the Shares in issue at the date of Vesting save as regards any rights attaching to
such Shares by reference to a record date prior to the date of Vesting.



17.2 Any Shares acquired on the Vesting of Matching Share Awards will be subject to the articles of
association of the relevant Qualifying Company from time to time.







Page 14









 








18. Administration and Amendment



18.1 The decision of the Committee will be final and binding in all matters relating to the Plan
including the exercise of any discretion under the Plan, the interpretation of the Plan and any
dispute relating to any matter in connection with the Plan.



18.2 The Committee may at any time discontinue the grant of further Matching Share Awards or amend
any of the provisions of the Plan in any way it thinks fit and such changes may affect Matching
Share Awards already granted, provided that:





	(a)	 	the Committee will not make any amendment that would materially prejudice the interests of
existing Participants except with their prior consent; and
	 
	(b)	 	no amendment which in the reasonable opinion of the Committee is to the advantage of
Employees or Participants may be made to:






	 	(i)	 	the definition of Employee ;
	 
	 	(ii)	 	the maximum entitlement of a Participant under the Plan;
	 
	 	(iii)	 	the maximum limit on the number of Shares which can be awarded
under the Plan;
	 
	 	(iv)	 	the basis for determining a Participant’s entitlement to Shares
under the Plan and the terms on which Shares can be acquired;
	 
	 	(v)	 	the terms of Shares to be provided under the Plan;
	 
	 	(vi)	 	the adjustment provisions in Rule 15 of the Plan;






without the prior approval of the RE PLC (and if appropriate RE NV) in general meeting (aa)
except in the case of minor amendments to benefit the administration of the Plan, to take
account of a change in legislation, to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants or any member of the Group, or (bb) as otherwise
permitted under these Rules; and




	(c)	 	without prejudice to any provision of the Plan which provides for the lapse of a Matching
Share Award, the Committee may not cancel a Matching Share Award unless the Participant agrees
in writing to such cancellation.





19. General




Trustee Funding



19.1 Any member of the Group may provide money for the purpose of acquiring Shares to satisfy
Matching Share Awards (and will if requested to do so by the Committee) before the date specified
by the Committee for purchase of Shares comprised in Matching Share Awards. The Company will be
under no obligation to purchase the Shares comprised in a Matching Share Award at or around the
Date of Grant but will procure that there are sufficient Shares available for transfer to satisfy a
Matching Share Award by the date of Vesting.




Discretionary Nature of the Plan








Page 15









 







19.2 The rights and obligations of a Participant under the terms and conditions of his office or
employment will not be affected by his participation in the Plan or any right he may have to
participate in the Plan.



19.3 Participation in the Plan does not imply any rights to receive Matching Share Awards on the
same or any other basis in any other year.



19.4 The terms of the Plan do not entitle the Participant to the exercise of any discretion in his
favour.



19.5 Each Participant waives all and any rights to compensation or damages in consequence of the
termination of his office or employment with any member of the Group for any reason whatsoever
(whether such cessation is lawful or unlawful) insofar as those rights arise or may arise from his
ceasing to have rights or be entitled to Shares hereunder as a result of such termination or from
the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s
terms of employment will be varied accordingly.




Changes to a Qualifying Company’s capital structure



19.6 The existence of any Matching Share Award will not affect in any way the right or power of the
Company, or the Qualifying Companies or their shareholders to make or authorise any or all
adjustments, recapitalisations, reorganisations or other changes in the Company’s or either of the
Qualifying Company’s capital structure, or any merger or consolidation of the Company or Qualifying
Companies, or any issue of shares, bonds, debentures, preferred or prior preference stocks ahead of
or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or
liquidation of the Company or Qualifying Companies or any sale or transfer of all or any part of
their assets or business, or any other corporate act or proceeding, whether of a similar character
or otherwise.




Notices



19.7 Any notice or other document required to be given to a Participant under or in connection with
the Plan may be delivered or sent by post to him at his home address according to the records of
his employing company or sent by email or fax to any email address or fax number according to the
records of his employing company or, in either case, such other address as may appear to the
Company to be appropriate.



19.8 Notices sent by post to a Participant in the UK or US will be deemed to have been given two
days after the date of posting. However, notices sent to a Participant in other countries will be
deemed to have been given on the seventh day after the date of posting.



19.9 Notices sent by email or fax, in the absence of evidence to the contrary, will be deemed to
have been received on the day following sending.



19.10 Any notice or other document required to be given to the Company under or in connection with
the Plan may be delivered or sent by post to it at its registered office (or such other place or
places as the Committee may from time to time determine and notify to Participants) or sent by
email or fax to any email address or fax number notified to the sender.







Page 16









 







19.11 All Share certificates and other communications relating to the Plan will be sent at the
Participant’s risk.




No transfer of Matching Share Awards



19.12 A Participant may not transfer, assign, charge or otherwise dispose of Matching Share Awards,
or any rights in respect of them, except on the transmission of Matching Share Awards on the death
of a Participant to his personal representatives or the assignment of a Matching Share Award, with
the prior consent of the Committee, subject to any terms and conditions the Committee imposes. Any
such attempted transfer will result in the lapse of the Matching Share Award.




Awards Non-Pensionable



19.13 Matching Share Awards and Dividend Equivalents under the Plan are not pensionable.




Taxation



19.14 Any liability of a Participant to taxation in respect of Investment Shares or a Matching
Share Award will be for the account of the relevant Participant. By accepting a Matching Share
Award, a Participant agrees to comply with any arrangements specified by the Company for the
payment of taxation (including, without limitation, arranging the sale of sufficient Shares to
enable the Company or any member of the Group to satisfy its obligations in respect of deduction of
taxation at source) and to enter into any election specified by the Company under Chapter 2 of Part
7 of the Income Tax (Employment & Pensions) Act 2003 in respect of shares to which he is or may
become entitled under the Plan.




Stamp Duty



19.15 The Participant will bear all dealing costs and stamp duty relating to the purchase of
Investment Shares under the Plan. The Company will bear all dealing costs and stamp duty relating
to the purchase and release of Shares in respect of a Matching Share Award under the Plan.




Expiry of Plan



19.16 No Matching Share Award will be granted under the Plan later than the tenth anniversary of
the Adoption Date.




Data Protection



19.17 By accepting the grant of a Matching Share Award, a Participant consents to the holding and
processing of personal data provided by him to the Company, a Qualifying Company or any member of
the Group, and any other persons for all purposes related to the operation of the Plan and
acknowledges that the personal information may be transferred to, and stored at, a destination
outside the European Economic Area (“EEA”), and may also be processed by staff operating outside
the EEA who work for the Company, a Qualifying Company, a member of the Group or for one of their
service providers. The Company will take all steps reasonably necessary to ensure that a
Participant’s personal data is treated securely under appropriate contractual arrangements.







Page 17









 








Governing Law



19.18 These Rules will be governed by and construed in accordance with English law.





Page 18












 





SCHEDULE 1




Performance Target



General



1. The following provisions shall apply to Matching Share Awards granted under the Plan, unless the
Committee determines otherwise at the Date of Grant in respect of any Matching Share Award.



2. Except as otherwise provided for in the Rules, the Performance Targets applicable to Matching
Share Awards will be measured after the end of the Performance Period for such Matching Share
Award.



3. There are two separate measures of equal weighting: a Return on Invested Capital measure (ROIC
Measure) and an Adjusted Earnings per Share measure (EPS Measure).



4. To the extent that the Performance Target is not satisfied, Matching Share Awards will lapse.




The ROIC Measure



5.1 The Vesting of one half of the Matching Share Award relates to the percentage return on
invested capital of the combined businesses of the Qualifying Companies. Vesting relates to the
percentage ROIC for the last financial year of the relevant Performance Period. The portion of a
Matching Share Award subject to the ROIC Measure is referred to as the ‘ROIC Tranche’.



5.2 With respect to Matching Share Awards granted in 2010, for any part of the ROIC Tranche to
Vest, the percentage ROIC for financial year 2012 must exceed the percentage ROIC for financial
year 2009, calculated on the same basis.



5.3 The following definitions are relevant for ROIC:





	 	(i)	 	Invested capital = arithmetic average of the opening and closing capital
employed stated before financing and tax balances for the combined businesses of the
Qualifying Companies adjusted for major acquisition timing for the financial year
with all cumulative amortisation and impairment charges for acquired intangible
assets and goodwill added back and excluding the gross up to goodwill in respect of
deferred tax liabilities established on the acquisition of intangible assets
retranslated at the average and hedge exchange rates applicable to the financial
year before the start of the Performance Period. In addition, any exceptional
restructuring and acquisition related charges (net of tax) over the Performance
Period are capitalised for these purposes and the effect of changes in exchange
rates and movements in the net pension deficits are excluded.
	 
	 	(ii)	 	Return = adjusted operating profit for the combined businesses of the
Qualifying Companies before amortisation and impairment of acquired intangible
assets and goodwill, exceptional restructuring and acquisition related charges and
grossed up to exclude the equity share of taxes in




Page 19









 






	 	 	 	joint ventures and further
adjusted to exclude movements in the net pension financing credit, after applying
the effective rate of tax used for adjusted earnings calculations and using exchange
rates to match those used in the calculation of invested capital.




In order to ensure that the performance score achieved is a fair reflection of underlying business
performance, the Committee retains discretion to determine the treatment of major disposals and
acquisitions that require board approval. Any significant adjustments made to the final performance
score will be disclosed to shareholders.



5.4 The number of Matching Shares comprised in the ROIC Tranche which is capable of Vesting will be
determined as follows:




	 	 	 	 	 
	ROIC percentage	 	 
	measured in respect of	 	Vesting
	last financial year of the	 	percentage of
	Performance Period	 	ROIC Tranche
	Below 10.2%
	 	 	0	%
	10.2%
	 	 	50	%
	11.2% or above
	 	 	100	%





5.5 Vesting is on a straight-line basis for performance between the minimum and maximum levels.




The EPS Measure



6.1 The Vesting of one half of the Matching Share Award relates to the average growth in Adjusted
Earnings per Share at constant currencies (Adjusted EPS) of the Qualifying Companies measured over,
save as provided for in 6.2 below, the Performance Period. The portion of a Matching Share Award
subject to the EPS Measure is referred to as the ‘EPS Tranche’.



6.2 For Matching Share Awards granted in 2010, Average Adjusted EPS Growth is measured over
financial years 2011 and 2012 of the Qualifying Companies. In addition, for any part of the EPS
Tranche of the 2010 Matching Share Award to Vest, Average Adjusted EPS Growth must be positive over
the three financial years of the Qualifying Companies ending 31 December 2012.



6.3 The following definitions apply in respect of Adjusted EPS:





	 	(i)	 	Adjusted EPS Growth = the arithmetic mean of the growth in Adjusted EPS at
constant currencies achieved by the Qualifying Companies over a relevant financial
year;
	 
	 	(ii)	 	Average Adjusted EPS Growth = the average of the Adjusted EPS Growth over
the relevant period of measurement;
	 
	 	(iii)	 	Adjusted Earnings = adjusted reported earnings. Adjustments include
amortisation and impairment of acquired intangible assets and goodwill, exceptional
restructuring and acquisition related charges, gains/losses 




Page 20









 






	 	 	 	on business disposals and
other non-operating items, related tax effects and movements in deferred tax balances
not expected to crystallise in the near term. The Committee retains discretion to
adjust for changes in the net pension financing credit;






	 	(iv)	 	Adjusted Earnings Per Share = Adjusted Earnings divided by the Number of
Shares;
	 
	 	(v)	 	Number of Shares = weighted average number of shares in issue excluding
shares held in treasury or by the Reed Elsevier Group plc Employee Benefit Trust; and
	 
	 	(vi)	 	Constant currencies = refers to measurement at constant rates of exchange
using the prior full year average and hedge rates.




The Committee has discretion to adjust this definition of Adjusted EPS to take account of any
changes in recognised accounting standards or practice, fiscal regime or capital structure, to
ensure consistent measurement and accountability.



6.4 The number of Matching Shares in the EPS Tranche which is capable of Vesting will be determined
as follows:




	 	 	 	 	 
	 	 	Vesting
	 	 	percentage of
	Average Adjusted EPS Growth	 	EPS Tranche
	Below 4% per annum
	 	 	0	%
	4% per annum
	 	 	50	%
	9% or above per annum
	 	 	100	%





6.5 Vesting is on a straight-line basis for performance between the minimum and maximum levels.




Determining satisfaction of targets at end of performance period



7. Following the end of the relevant Performance Period the Committee shall calculate and confirm
with the auditors the Average Adjusted EPS Growth and ROIC over the relevant period of measurement.




Adjustments



8.1 The Committee may make such adjustments to the Performance Target applicable to outstanding
Matching Share Awards as it considers appropriate to take account of any factors which are relevant
in the opinion of the Committee and in particular if there is an event which causes it to consider
that the Performance Target, or any part of it, is no longer a fair measure of performance. The
amended Performance Target shall be at least as challenging as the one originally set.



8.2 The Committee has discretion to adjust the definition or method of calculation of Adjusted EPS
and ROIC (or any other applicable term or measure) as set out in this Schedule to take account of
any changes in recognised accounting standards or


Page 21









 






practice, fiscal regime or capital structure, to
ensure consistent measurement and accountability.



8.3 Without prejudice to the generality of paragraphs 8.1, 8.2 and 9, the Committee may, in
consultation with the auditors, make the following adjustments in relation to the calculations to
be carried out in accordance with this Schedule:





	 	(a)	 	any adjustments it considers appropriate if an event occurs giving rise to an
adjustment of Awards under Rule 15 of the Plan; and
	 
	 	(b)	 	any adjustments it considers appropriate if there is any modification in
relation to the relevant international accounting standard used to calculate EPS or
ROIC.





Overriding Power



9. In determining the level of Vesting of a Matching Share Award under the Plan, the Committee will
take into account the overall business performance of the Qualifying Companies and the Group over
the relevant performance period and any other factors that it considers appropriate and may modify
the Vesting level if it considers that such a modification would result in a fairer outcome.






Page 22









 








SCHEDULE 2




US Participants


This Schedule was adopted by the directors of Reed Elsevier Group plc on 21 April 2010.



The Rules of the Plan apply to Matching Share Awards granted to US Participants subject to the
modifications contained in this Schedule.





	 	(A)	 	In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules
unless modified by this Schedule.
	 
	 	(B)	 	US Participant. Rule 1 is revised by the addition of the following
definition of “US Participant”:
	 
	 	 	 	US Participant means a Participant who is subject to United States taxation by
reason of being a United States national, or resident in the United States for
United States tax purposes;
	 
	 	(C)	 	“Retirement” means, for the purposes of the application of Rule 8.2(b) of the
Plan, in relation to a US Participant, circumstances which the Committee determines on
a case by case basis and in its absolute discretion to constitute retirement
(irrespective of whether or not applicable retirement eligible criteria have been
met);
	 
	 	(D)	 	Release of Shares. Rule 6.2 shall have the additional requirement that if
Shares are to be released to a US Participant, they shall in all instances be released
no later than March 15 of the year following the year in which the Investment Period
ceases.
	 
	 	(E)	 	Dividend Equivalent — Cash Payment. Rule 7.2(c) shall have the additional
requirement that any cash payment to the US Participant under this Rule shall in all
instances be released no later than March 15 of the year following the year in which
the Investment Period ceases.
	 
	 	(F)	 	Dividend Equivalent — Shares in Lieu of Cash. Rule 7.3 shall have the
additional requirement that if Shares are to be released to a US Participant in lieu
of cash, they shall in all instances be released no later than March 15 of the year
following the year in which the Investment Period ceases.
	 
	 	(G)	 	Approved Leaver. Rule 8.2 shall have the additional requirement that the
Shares released to a US Participant shall in all instances be transferred to the US
Participant on or before March 15 of the year following the year in which the
Investment Period ceases.
	 
	 	(H)	 	Death, Injury, Disability and Ill-health. Rule 8.4 shall have the additional
requirement that the Shares released to a US Participant or to a US Participant’s
personal representative following the US




Page 23









 






	 	 	 	Participant’s cessation of employment by reason of death, injury, disability or
ill-health shall in all instances be transferred to the US Participant or the US
Participant’s personal representative on or before March 15 of the year following
the year in which the US Participant’s cessation of employment occurs.






	 	(I)	 	Award Rollover. Except to the extent consistent with the requirements of
Section 409A of the United States Internal Revenue Code (“Code”) for the deferral of
compensation without penalty or additional tax or unless an exception to the
application of Code Section 409A applies, Rule 13 shall not apply to any Matching
Share Award held by a US Participant if, at the time the election provided by Rule 13
is available to the US Participant, it has Vested. In such case, the Rules of the
Plan shall apply to the Matching Share Award without regard to Rule 13.
	 
	 	(J)	 	Application of Code Section 409A. Although neither the Committee nor any
member of the Group guarantees any particular tax treatment to a US Participant,
Matching Share Awards, granted pursuant to this Schedule are intended to be exempt
from Section 409A of the United States Internal Revenue Code under the exception for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the United States Income
Tax Regulations (which requires, in the case of an employer with a fiscal year ending
31 December, that Shares in satisfaction of a Matching Share Award be transferred to
the US Participant no later than March 15 of the calendar year following the calendar
year in which the award is no longer subject to a substantial risk of lapsing) and
shall be limited, construed and interpreted in accordance with such intent.




Page 24









 











SCHEDULE 3




ELSEVIER REED FINANCE BV


The Rules of the Plan apply to Matching Share Awards granted to employees of Elsevier Reed Finance
BV (“ERF”), or of companies under the Control of ERF, subject to the modifications contained in
this Schedule.





	 	(A)	 	In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules unless
modified by this Schedule.
	 
	 	(B)	 	The definition of Group shall be construed as including ERF and every company which
is under the Control or ERF.
	 
	 	(C)	 	Matching Share Awards shall not be granted under this Schedule without the agreement
of the supervisory board of ERF.




Page 25









 











SCHEDULE 4




French Participants


This Schedule was adopted by the directors of Reed Elsevier Group plc on 21 April 2010.



The purpose of this Schedule is to make certain variations to the terms of the Plan in order to
satisfy French securities laws, exchange control, corporate law and tax requirements (especially
the provisions of Articles L.225-197-1 et seq. of the French Commercial Code (FCC)) to qualify for
favourable income tax and social security treatment in France.



The Rules of the Plan apply to Matching Share Awards granted to French participants subject to the
modifications contained in this Schedule.





	1.	 	Definitions
	 
	1.1	 	The definitions of Matching Share Award and Group in Rule 1.1 are deleted and replaced
with the following definitions:
	 
	 	 	Matching Share Award means a non-transferable, unfunded and conditional right granted under
Rule 4 to receive Shares without payment and references to Matching Shares will be
construed accordingly;
	 
	 	 	Group means the Company and (i) any company in which the Company holds, directly or
indirectly, at least 10 per cent of the share capital or voting rights; and (ii) any
company holding, directly or indirectly, at least 10 per cent of the share capital or
voting rights of the Company and (iii) any company for which at least 50 per cent of the
share capital or voting rights are held by a company which holds at least 50 per cent of
the share capital of the Company and member of the Group will be construed accordingly;
	 
	1.2	 	The following new definitions will be added for the purpose of Matching Share Awards granted
under this Schedule:
	 
	 	 	Defined Disability means a disability of the second or third category under the meaning of
Article L.341-4 of the French Social Security Code;
	 
	 	 	Eligible Individual means:






	 	•	 	any salaried employee of a member of the Group, or a corporate officer holding
the duties of Chairman of the Board, General Manager, Deputy General Managers, or
member of the Directory Board or Manager (respectively President du Conseil
d’administration, Directeur Général, Directeurs Généraux Délégués, membres du
Directoire and Gérant) of any member of the Group,
	 
	 	•	 	who is a salaried employee of the Company or any member of the Group who does
not hold 10% or more (taking into account any unvested Matching Share Awards under
this Plan or any other share plan subject to provisions of articles L.225-197-1 et
seq. of the FCC) of the share capital of RE NV or RE PLC, or would, as a result of
a




Page 26









 






	 	 	 	grant being made under this Plan, hold 10% or more of the share capital of RE NV
or RE PLC.






	 	 	Holding Period means a two-year period following the transfer of Shares under the Plan to a
Participant, during which the Shares cannot be sold, transferred or otherwise disposed of;
	 
	2.	 	Rule 2 (Eligibility)
	 
	 	 	In Rule 2, the word “Employee” will be replaced by “Eligible Individual”.
	 
	3.	 	Rule 6 (Normal Vesting of Matching Share Awards) 
	 
	3.1	 	Rule 6.1 shall be supplemented with the following provision:
	 
	 	 	“The Normal Vesting Date for Matching Share Awards will not be before the second
anniversary of the Date of Grant. Furthermore, if a Matching Share Award would otherwise
Vest in accordance with any provision of the Plan or of this Schedule 4 (except as provided
under Rule 8.5, as amended by paragraph 6.1 of this Schedule 4, (death and Defined
Disability)) before the second anniversary of the Date of Grant, the Matching Share Award
will not so Vest but will continue until the second anniversary of the Date of Grant, or a
later date as determined by the Committee, when it will Vest”.
	 
	3.2	 	Rule 6.2 will be deleted and replaced with the following:
	 
	 	 	“The Investment Shares will be released to the Participant as soon as reasonably
practicable following the Normal Vesting Date along with the Dividend Equivalent which a
Participant is entitled to under Rule 7 and subject to paragraph 4 of this Schedule.
	 
	 	 	Any Vested Matching Shares will be transferred, as soon as reasonably practicable after
that date, subject to any Dealing Restrictions, to a share account administered in the name
of and for the benefit of the Participant by an account keeper (teneur de compte)
designated by the Committee. Participants will have full shareholder voting and dividend
rights on the transferred Matching Shares.
	 
	 	 	Any Matching Shares transferred will be held by the account keeper on behalf of the
Participant for the duration of the Holding Period, except as provided under Rule 8.5, as
amended by paragraph 6.1 of this Schedule 4, (death and Defined Disability), or as
otherwise provided for in the FCC or in the French tax Code as an exception to the Holding
Period.
	 
	 	 	On expiry of the Holding Period, the participant will be free to dispose of the Matching
Shares.”






	4.	 	Rule 7 (Entitlement to Dividend Equivalents)






	 	 	A Matching Share Award granted under this Schedule shall only be granted on the basis that
it carries a right to Dividend Equivalents to the extent permitted under the FCC and the
French Tax Code and without jeopardising the favourable tax and social security regime
applicable to the related Matching Share Awards.




Page 27









 












	5.	 	Rules 8.2 and 8.3 (Approved Leaver)
	 
	5.1	 	Matching Shares which Vest in accordance with Rule 8.2 will be subject to the Holding Period.
	 
	5.2	 	Rule 8.3 will not apply to Matching Share Awards granted under this Schedule.
	 
	6.	 	Rules 8.4 and 8.5 (Death, Injury, Disability and ill-health)
	 
	6.1	 	Rules 8.4 and 8.5 will be deleted and replaced with the following new Rules:
	 
	 	 	8.4 Except as otherwise provided in these Rules, in the event that the Participant ceases
to be an Employee before the Normal Vesting Date by reason of injury, disability or
ill-health (excluding Defined Disability), the Participant’s Matching Share Award and
Investment Shares will be treated in accordance with Rule 8.2 and any Matching Shares which
Vest will be subject to the Holding Period.
	 
	 	 	8.5 Notwithstanding any other Rule of the Plan, where a Participant ceases employment
before the Normal Vesting Date by reason of death or Defined Disability:






	 	a)	 	the Matching Share Award will Vest over a Pro-rated Number of Shares subject
to an assessment of performance based on progress made against the Performance Target
at the Termination Date as determined by the Committee in its absolute discretion.
Such determination will take place as soon as practicable after the Termination Date
and to the extent that the Matching Share Award does not Vest on the date of
determination, it will immediately lapse; or
	 
	 	b)	 	the Performance Target will be waived and/or the Matching Share Award will
Vest in full on or shortly after the Termination Date as determined by the Committee.
To the extent that the Matching Share Award does not Vest, it will immediately lapse.






	 	 	Any Matching Shares which Vest in accordance with this Rule 8.5 will be transferred to the
Participant (or, in the case of death, to the personal representatives of the Participant)
as soon as practicable following Vesting, and will not be subject to any Holding Period.
	 
	 	 	The Investment Shares will be released in full to the Participant (or, in the case of
death, to the personal representatives of the Participant) as soon as reasonably
practicable following the termination Date.






	7.	 	Rules 10, 11, 12, 13, 14 and 15 (Change of Control, Internal Reorganisation,
Rollover, Winding up, Adjustment of Awards) 
	 
	 	 	Rules 10, 11, 12, 13, 14 and 15 of the Plan will apply in accordance with Article
L.225-197-1-III of the FCC to the extent that the Committee intends the Matching Share
Awards to maintain favourable tax treatment under this




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	 	 	Schedule 4. However, in the event the Committee does not intend to maintain such favourable
tax treatment, Rules 10, 11, 12, 13, 14 and 15 of the Plan will prevail notwithstanding any
possible detrimental tax or social security consequences for the Participant.






	8.	 	Rule 18 (Administration and Amendment)
	 
	 	 	A new Rule 18.2(d) will be added as follows:
	 
	 	 	(d) changes do not affect the French qualifying status of the Matching Share Awards granted
under Schedule 4 and provided that no such changes will adversely affect the rights of any
Participant without such Participant’s consent”
	 
	9.	 	Rule 19.12 (No transfer of Matching Share Awards)
	 
	 	 	In Rule 19.12, the following words will be deleted:
	 
	 	 	“or the assignment of a Matching Share Award, with the prior consent of the Committee,
subject to any terms and conditions the Committee imposes”
	 
	10.	 	Rule 19.14 (Taxation) 
	 
	 	 	In Rule 19.14, the following words will be deleted:
	 
	 	 	“and to enter into any election specified by the Company under Chapter 2 of Part 7 of the
Income Tax (employment & Pensions) Act 2003 in respect of shares to which he is or may
become entitled under the Plan”
	 
	 	 	In Rule 5.1, the wording after (ii) will be deleted.
	 
	11.	 	Severability




The terms of the Plan, as amended by this Schedule 4, are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable under French law, in whole or in
part, the remaining provisions will nevertheless be binding and enforceable.






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SCHEDULE 5




Cash Alternative


If deemed necessary in order to ensure compliance with tax and legal country specific requirements
(e.g. exchange control and securities laws) in the countries in which the Plan operates then,
notwithstanding any provision to the contrary in these Rules:





	 	(A)	 	The Committee may decide to satisfy a Matching Share Award by paying to the
Participant an amount equal to the market value (as determined in its discretion) of the
number of Shares which would otherwise be transferred following Vesting or an amount
determined on such other reasonable basis as the Committee may decide (which could for
example, allow for the deduction of any applicable expenses).
	 
	 	(B)	 	The Committee may grant a Matching Share Award on the basis that it will be satisfied
in cash, as opposed to Shares, as set out in (A) above.






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