exv4w6






Exhibit 4.6




 






RULES OF THE

REED ELSEVIER GROUP PLC LONG-TERM

INCENTIVE PLAN 2010




 






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









 









 








THE REED ELSEVIER GROUP PLC LONG-TERM INCENTIVE PLAN 2010



1. Definitions



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



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);



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 of the Income Taxes Act 2007;



Date of Grant means the date on which a Performance Share Award is granted;



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 5;



Dutch Share means an ordinary share in the capital of RE NV or shares representing those shares
following any Capital Reorganisation of RE NV and includes an American Depositary Share
representing a Dutch Share;



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




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



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;



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



Performance Period means the period, as specified in Rule 3.5(c), after which the Performance
Target is measured;







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Performance Share Award means, unless Schedule 5 applies, a right granted under Rule 3 to receive
Shares without payment and references to Performance Shares will be construed accordingly;



Performance Target means the conditions set out in Schedule 1, or such other conditions determined
by the Committee in accordance with Rule 3.3, measured after the end of the Performance Period;



Plan means this Reed Elsevier Group plc Long-term Incentive Plan 2010 as amended from time to time;



Pro-rated Number means such number of Shares as is determined by multiplying the number of Shares
comprised in a Performance Share Award by A/B where A is the number of complete calendar months
which the Participant was an Employee during the Performance Period and B is 36;



Qualifying Company means each of RE PLC and RE NV;



RE NV means Reed Elsevier NV;



RE PLC means Reed Elsevier PLC;



Rules means these Plan rules;



Share means a UK Share and/or a Dutch Share and Shareholder will be construed accordingly;



Termination Date means the date on which an Employee ceases to be employed by a Qualifying Company
or any member of the Group;



UK Share means an ordinary share in the capital of RE PLC or shares representing those shares
following any Capital Reorganisation of RE PLC and includes an American Depositary Share
representing a UK Share; and



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



1.2 Where the context permits the singular will include the plural and vice versa and the masculine
will include the feminine. Headings will be ignored in construing the Plan.



1.3 References to any act of Parliament will include any statutory modification, amendment or re
enactment thereof.



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



2.1 The Committee may select any Employee to participate in the Plan, except:-





	(a)	 	a director of the Company or of a Qualifying Company or




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	(b)	 	any Employee who is under notice of termination of employment at the Date of Grant, unless
the Committee determines otherwise.




3. Grant of Performance Share Awards



3.1 Subject to Dealing Restrictions, Performance Share Awards may be granted at any time.



3.2 The grant of a Performance 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.



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



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



3.5 Performance 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 his
Performance Share Award. This summary may include the following information:





	a)	 	the number of Shares subject to the Performance Share Award — and in what proportion they
comprise UK Shares and Dutch Shares;
	 
	b)	 	details of the Performance Target applicable to the Performance Share Award;
	 
	c)	 	the Performance Period;
	 
	d)	 	the terms of any other conditions imposed pursuant to Rules 3.2 and 3.4;
	 
	e)	 	whether or not the Performance Share Award carries a right to Dividend Equivalents;
	 
	f)	 	which (if any) Schedules to the Plan will apply to the Performance Share Award;
	 
	g)	 	any other information as the Committee may determine.




4. Normal Vesting of Performance Share Awards



4.1 Except as otherwise provided in the Rules, the number of Shares, if any, which Vest under a
Performance Share Award will be determined by the Committee by reference to the extent to which the
Performance Target has been fulfilled, and any other conditions to which the Performance Share
Award is subject, have been fulfilled or waived.







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4.2 Except as otherwise provided in these Rules, Performance Share Awards will Vest, in accordance
with Rule 4.1, on the Normal Vesting Date and any balance which does not Vest will immediately
lapse. Any Vested Performance Shares will be transferred to Participants as soon as reasonably
practicable after that date, subject to any Dealing Restrictions.



5. Entitlement to Dividend Equivalents



5.1 If a Performance Share Award has been granted on the basis that it carries Dividend
Equivalents, the Participant will, subject to Rule 5.3, 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 Performance 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
Performance Share Award.



5.2 The cash payment to which the Participant becomes entitled under Rule 5.1:





	(a)	 	will be calculated (in such manner as the Committee sees fit) by reference to the currency of
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.




5.3 Instead of making a cash payment, the Committee may in its discretion satisfy any entitlement
to Dividend Equivalents arising in accordance with Rule 5.1 by transferring existing Shares with an
equivalent value (as determined at the time of Vesting).



5.4 For the avoidance of doubt, any payment referred to in this Rule 5 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.



6. Cessation of employment 




Participant gives or receives notice



6.1 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 6.2 and 6.4, a
Performance Share Award will automatically lapse on the date on which notice is given or received.




Approved Leaver



6.2 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:




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




the Performance Share Award will continue in force over a Pro-rated Number of Shares until the end
of the Performance Period and will lapse as to the balance on the Termination Date. The Performance
Share Award will Vest on the Normal Vesting Date in accordance with Rule 4.



6.3 The Committee has discretion to vary the application of Rule 6.2 and determine that a
Participant’s Performance Share Award should instead be treated as set out in Rule 6.4 or, in
exceptional circumstances, in any other way the Committee determines appropriate.




Death, Injury, Disability and Ill-health.



6.4 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 death, injury, disability or ill-health:



the Performance 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 Performance Share Award does
not Vest on the date of determination, it will immediately lapse.





	6.5	 	The Committee has discretion to vary the application of Rule 6.4 and determine that:






	a)	 	a Participant’s Performance Share Award should be treated as set out in Rule 6.2 above
instead; or
	 
	b)	 	the Performance Target will be waived and/or the Performance Share Award will Vest in full on
or shortly after the Termination Date as determined by the Committee. To the extent that the
Performance Share Award does not Vest, it will immediately lapse.




7. Claw-Back Arrangements




Breach of Restrictive Covenants



7.1 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 Performance 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 7.2 below).




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7.2 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 Performance
Share Awards and Dividend 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 he 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 7.4 below, in respect
of A.




Materially misstated financial or other data



7.3 If the Committee, within two years of the Vesting of a Performance Share Award, considers in
good faith that the Vesting of the relevant Performance 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 7.4 below) by taking one or more of the following actions:





	a)	 	reduce any outstanding unvested Performance Share Awards by the Claw-back Amount; and/or
	 
	b)	 	reduce any future Performance 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.




7.4 The Claw-back Amount is the difference in value between (i) the Incorrect Award and (ii) the
Performance Share Awards and Dividend Equivalents which 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 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 number of Shares under the Incorrect Award and the number of
Shares the Committee considers should have Vested had the correct data been used;
	 
	(b)	 	any gain made by the Participant on the sale of Shares comprised in the Incorrect 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 7.1 to 7.2 which would take
account of Shares subject to an Incorrect Award.




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7.5 By accepting a Performance Share Award, a Participant will be bound by this Rule 7
notwithstanding (i) that it will only be applicable after the release of Shares under these Rules
and (ii) whether or not the essential terms of this Rule 7 have been separately notified to each
Participant.



8. Change of Control of a Qualifying Company



8.1 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 Performance Share Awards over Shares in that Qualifying Company (but not those in
the other Qualifying Company) will Vest in respect of a 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.



8.2 To the extent that a Performance Share Award over Shares in that Qualifying Company
does not Vest as a result of the relevant event, it will immediately lapse.



9. Change of Control of the Company



Except as otherwise provided in these Rules, the provisions of Rule 8 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 Performance Share Awards which
may Vest as a result of the relevant event will be Shares in both Qualifying Companies.



10. Internal Reorganisation 



10.1 Rules 8 and 9 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;




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	(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.




10.2 If Rule 10.1 applies:





	(a)	 	Performance Share Awards will not Vest as a result of the relevant event;
	 
	(b)	 	Performance Share Awards will instead be exchanged for equivalent awards over such shares as
the Committee determines appropriate;
	 
	(c)	 	the Committee may make any modifications to the relevant Performance Target as it determines
appropriate.




10.3 The Committee may vary the application of this Rule 10 so that it applies to Performance Share
Awards over Shares in both Qualifying Companies or over Shares in only one Qualifying Company.



10.4 Where Rule 10 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).



11. Rollover on a change of control



11.1 The Committee may determine that Rules 8 or 9 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 Performance Share Awards will be rolled over in accordance with
either the provisions of Rule 10.2 or Rule 11.2 or (ii) allow the Participants to choose between
Vesting under Rules 8 or 9 as applicable and rollover in accordance with, as determined by the
Committee, Rule 10.2 or Rule 11.2.



11.2 The Committee can determine that Performance 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, the Performance 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 6.2 to 6.5 apply)
and will be subject to the Rules as they last had effect in relation to the Performance Share
Award that was rolled-over; and
	 
	(c)	 	to the extent that the Performance Target has not been met, the Performance Share Award will
immediately lapse.




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11.3 For the avoidance of doubt, in Rules 8, 9, 10 and 11, “Committee” means those people who were
members of the Committee immediately before the event by virtue of which the applicable Rule
applies.



12. Voluntary winding up



The provisions of Rule 8 will apply with such changes as may be necessary 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 Rule 8 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.



13. Adjustment of awards



13.1 In the event of:





	(a)	 	any Capital Reorganisation; or






	(b)	 	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 Performance
Share Award,




the number of Shares in that Qualifying Company comprised in a Performance Share Award may be
adjusted in such manner as the Committee determines.



14. Source of Shares



14.1 A Participant’s entitlement to Shares under this Plan will be satisfied from purchases on a
recognised stock exchange. No new Shares will be issued or Shares transferred out of treasury in
connection with the Plan.



15. Rights attaching to shares transferred pursuant to Performance Share awards



15.1 All Shares transferred on the Vesting of a Performance Share Award will rank pari passu in all
respects with the Shares in issue at the date of Vesting except in respect of any rights attaching
to such Shares by reference to a record date prior to the date of Vesting.



15.2 Any Shares acquired by a Participant under this Plan will be subject to the articles of
association of the relevant Qualifying Company from time to time.



16. Administration, amendment and Termination



16.1 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 Rules, the interpretation of the Rules and any
dispute relating to any matter in connection with the Rules.



16.2 The Committee may at any time discontinue the grant of further Performance Share
Awards or amend any of the provisions of the Plan in any way it thinks fit and such changes may
affect Performance Share Awards already granted.




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16.3 Without prejudice to any provision of the Plan which provides for the lapse of a Performance
Share Award, the Committee may not cancel a Performance Share Award unless the Participant agrees
in writing to such cancellation.



16.4 The Committee may terminate the Plan at any time. The termination of the Plan will not affect
existing Performance Share Awards.



17. General




Trustee funding



17.1 Any member of the Group may provide money to the trustees of any trust or any other person to
enable them or him to acquire Shares to be held for the purposes of satisfying Performance Share
Awards under the Plan, or enter into any guarantee or indemnity for these purposes, to the extent
not prohibited by the provisions of the Companies Act 2006.




Discretionary nature of the Plan



17.2 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.



17.3 Participation in this Plan does not imply any right to receive Performance Share Awards on the
same or any other basis in any other year.



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



17.5 An individual who participates in the Plan waives all and any rights to compensation or
damages in consequence of the termination of his office or employment with RE PLC, RE NV or any
member of the Group for any reason whatsoever insofar as those rights arise, or may arise, from his
ceasing to have rights under the Plan as a result of such termination or from the loss or
diminution in value of such rights. If necessary, the Participant’s terms of employment will be
varied accordingly.




Changes to a Qualifying Company’s capital structure



17.6 The existence of any Performance Share Award will not affect in any way the right or power of
the Company, 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



17.7 Any notice or other document which has 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


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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.



17.8 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.



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



17.10 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.




No transfer of Performance Share Awards



17.11 A Participant may not transfer, assign, charge or otherwise dispose of Performance Share
Awards, or any rights in respect of them, except on the transmission of Performance Share Awards on
the death of a Participant to his personal representatives or the assignment of a Performance 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 Performance Share Award.




Awards non-pensionable



17.12 Performance Share Awards and Dividend Equivalents under the Plan are not pensionable.




Taxation



17.13 Any liability of a Participant to taxation in respect of a Performance Share Award will be
for the account of the relevant Participant. By accepting a Performance 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



17.14 The Company or, where the Committee so directs, any member of the Group, will pay the
appropriate stamp duty on behalf of Participants in respect of any transfer of Shares on the
Vesting of a Performance Share Award.




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Data Protection



17.15 By accepting the grant of a Performance Share Award, a Participant consents to the holding
and processing of personal data provided by him to 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 a
Qualifying Company or any 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.




Governing Law



17.16 This Plan will be governed by, and construed in accordance with, the laws of England.





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SCHEDULE 1




Performance Target



General



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



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



3. There are three separate measures of equal weighting: a Relative Total Shareholder Return
measure (TSR Measure), 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, Performance Share Awards will lapse.




The TSR Measure



5.1 The Vesting of one third of the Performance Share Award is subject to the TSR ranking of Reed
Elsevier measured over the Performance Period. The portion of a Performance Share Award subject to
the TSR Measure is referred to as the “TSR Tranche”.



5.2 Three distinct comparator groups will be used — a Sterling Comparator Group, a Euro Comparator
Group and a US Dollar Comparator Group. The TSR performance of RE PLC ordinary shares (based on RE
PLC’s London listing) will be measured against the Sterling Comparator Group, the TSR performance
of RE NV ordinary shares (based on RE NV’s Amsterdam listing) will be measured against the Euro
Comparator Group; and the TSR performance of RE PLC ADRs and RE NV ADRs (based on the New York
listing) will be measured against the US Dollar Comparator Group. The TSR performance will be
measured separately against each comparator group and each ranking achieved will produce a payout,
if any, in respect of one third of the TSR Tranche. The proportion of the TSR Tranche which Vests
will be the sum of the payouts achieved against the three comparator groups.



5.3 TSR will be measured in local currency.



5.4 TSR for any company will be the percentage increase or decrease in the market value of a share
over the relevant Performance Period and shall take account of dividends and other distributions
paid in the course of that period (each such dividend being deemed to be reinvested in the shares
of each relevant company from the date of payment of the dividend to the last day of the
Performance Period).



5.5 Each comparator group comprises companies which were selected on the following basis: -





	 	•	 	they are included in a relevant market index as at 31 December 2009— FTSE100 for
the Sterling Comparator Group; Euronext100 and the




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	 	 	 	DAX30 for the Euro Comparator Group; and the S&P500 for the US Dollar Comparator Group;






	 	•	 	they are nearest in size to Reed Elsevier in terms of market capitalisation;






	 	 	excluding:






	 	•	 	companies with mainly domestic revenues (as they do not reflect the global nature
of the Qualifying Companies’ customer base);
	 
	 	•	 	those engaged in extractive industries (as they are exposed to commodity cycles);
and
	 
	 	•	 	financial services companies (as they have a different risk/reward profile).




Relevant listed global peers operating in businesses similar to those of Reed Elsevier not
otherwise included are added to the relevant comparator group.



Set out below are the comparators included in each comparator group:




	 	 	 	 	 
	STERLING	 	 	 	 
	COMPARATOR GROUP	 	EURO COMPARATOR GROUP	 	US DOLLAR COMPARATOR GROUP
	AGGREKO

	 	ACCOR
	 	3M
	ASTRAZENECA

	 	ADIDAS
	 	ADOBE SYSTEMS
	AUTONOMY CORP.

	 	AHOLD
	 	AGILENT TECHS.
	BAE SYSTEMS

	 	AIR LIQUIDE
	 	AIR PRDS. & CHEMS.
	BRITISH AIRWAYS

	 	AKZO NOBEL
	 	AMAZON.COM
	BRITISH AMERICAN
TOBACCO

	 	ALSTOM
	 	ANALOG DEVICES
	BUNZL

	 	ASML HOLDING
	 	APPLIED MATS.
	BURBERRY GROUP

	 	BASF
	 	AVON PRODUCTS
	COBHAM

	 	BMW
	 	BAXTER INTL.
	COMPASS GROUP

	 	CARREFOUR
	 	BECTON DICKINSON
	DMGT

	 	CHRISTIAN DIOR
	 	CATERPILLAR
	DIAGEO

	 	DAIMLER
	 	COLGATE-PALMOLIVE
	EXPERIAN

	 	DEUTSCHE POST
	 	CORNING
	GLAXOSMITHKLINE

	 	EADS
	 	CUMMINS
	INTERCONTINENTAL HOTELS

	 	ESSILOR INTL.
	 	DEERE
	IMPERIAL TOBACCO GROUP

	 	HEINEKEN
	 	DOW CHEMICAL
	INFORMA

	 	HERMES INTL.
	 	DUN & BRADSTREET
	INMARSAT

	 	K + S
	 	E. I. DU PONT DE NEMOURS
	INTERNATIONAL POWER

	 	LAFARGE
	 	EBAY
	INTERTEK GROUP

	 	LAGARDERE GROUPE
	 	EMERSON ELECTRIC
	INVENSYS

	 	LINDE
	 	FICO
	JOHNSON MATTHEY

	 	LVMH
	 	FORD MOTOR
	KINGFISHER

	 	MAN
	 	GENZYME
	NATIONAL GRID

	 	METRO
	 	H.J. HEINZ
	PEARSON

	 	MICHELIN
	 	ILLINOIS TOOL WORKS
	RECKITT BENCKISER GROUP

	 	PERNOD-RICARD
	 	JOHN WILEY
	REXAM

	 	PHILIPS ELTN. KONINKLIJKE
	 	JOHNSON CONTROLS
	ROLLS-ROYCE GROUP

	 	PORTUGAL TELECOM SGPS
	 	JUNIPER NETWORKS
	SABMILLER

	 	PPR
	 	LIFE TECHNOLOGIES
	SAGE GROUP

	 	RENAULT
	 	MCDONALDS
	SHIRE

	 	SAINT-GOBAIN
	 	MCGRAW-HILL
	SMITH & NEPHEW

	 	SAP
	 	MICRON TECHNOLOGY
	SMITHS GROUP

	 	SCHNEIDER ELECTRIC
	 	MOTOROLA
	THOMAS COOK GROUP

	 	SUEZ ENVIRONNEMENT
	 	NEWS CORP






Page 14









 






	 	 	 	 	 
	STERLING	 	 	 	 
	COMPARATOR GROUP	 	EURO COMPARATOR GROUP	 	US DOLLAR COMPARATOR GROUP
	TUI TRAVEL

	 	THALES
	 	NIKE
	UNILEVER (LSE)

	 	THYSSENKRUPP
	 	NVIDIA
	UNITED BUSINESS MEDIA

	 	TNT
	 	PACCAR
	VODAFONE

	 	UNILEVER (AEX)
	 	PPG INDUSTRIES
	WOLSELEY

	 	VALLOUREC
	 	SPECTRA ENERGY
	WPP

	 	VEOLIA ENVIRONNEMENT
	 	TEXAS INSTS.
	 

	 	VOLKSWAGEN
	 	THOMSON REUTERS (NYSE)
	 

	 	WOLTERS KLUWER
	 	UNITED TECHNOLOGIES
	 

	 	 	 	YUM! BRANDS





5.6 Any changes in the comparator groups as a result of delisting or consolidation will be
treated in accordance with the methodology agreed by the Committee at its sole discretion from time
to time. In determining the methodology to be applied, the Committee will have due regard to market
practice, ensure a consistent application of the agreed methodology and be open and transparent
about the methodology applied.



5.7 The TSR ranking against the US Dollar Comparator Group will be calculated using the weighted
average of the TSRs of the RE PLC ADRs and the RE NV ADRs over the relevant period of measurement.



5.8 The number of Performance Shares in each third of the TSR Tranche which Vest will be calculated
as follows and will be added together to determine the total number of Performance Shares within
the TSR Tranche which are capable of Vesting:




	 	 	 	 	 
	 	 	Vesting percentage of
	 	 	each third of the TSR
	TSR ranking within the relevant TSR comparator group	 	Tranche
	Below Median
	 	 	0	%
	Median
	 	 	30	%
	Upper quartile (top 25th percentile)
	 	 	100	%





5.9 Vesting is on a straight-line basis for ranking between median and upper quartile.



5.10 The averaging period applied for TSR measurement purposes is the six months before the start
of the Performance Period and the last six months of the Performance Period.




The ROIC Measure



6.1 The Vesting of one third of the Performance 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
Performance Share Award subject to the ROIC Measure is referred to as the ‘ROIC Tranche’.



6.2 With respect to Performance 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.




Page 15









 







6.3 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 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.



6.4 The number of Performance Shares in the ROIC Tranche which are capable of Vesting will be
determined as follows:




	 	 	 	 	 
	ROIC Percentage -  measured in respect of last	 	Vesting percentage of
	financial year of the Performance Period	 	ROIC Tranche
	Below 10.2%
	 	 	0	%
	10.2%
	 	 	60	%
	11.2% or above
	 	 	100	%





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




The EPS Measure



7.1 The Vesting of one third of the Performance Share Award relates to the average growth in
Adjusted Earnings per Share at constant currencies (Adjusted EPS) of the Qualifying Companies
measured, except as stated in Rule 7.2 below, over the Performance Period. The portion of the
Performance Share Award subject to the EPS Measure is referred to as the ‘EPS Tranche‘.




Page 16









 







7.2 With respect to Performance 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 Performance Share Awards to Vest, Average Adjusted EPS Growth must
be positive over the three financial years of the Qualifying Companies ending 31 December 2012.



7.3 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 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.



7.4 The number of Performance Shares in the EPS Tranche which are capable of Vesting will be
determined as follows:




	 	 	 	 	 
	 	 	Vesting percentage
	Average Adjusted EPS Growth	 	of EPS Tranche
	Below 5% per annum
	 	 	0	%
	5% per annum
	 	 	60	%
	9% or above per annum
	 	 	100	%





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




Page 17









 








Determining satisfaction of targets at end of Performance Period



8.1 Following the end of the relevant Performance Period the Committee will:





	 	(a)	 	calculate and confirm with the auditors the Average Adjusted EPS Growth and
ROIC over the relevant period of measurement; and
	 
	 	(b)	 	arrange for a reputable provider of such information to calculate and report
to the Committee on the TSR performance. If at the end of the Performance Period, any
of the companies in the comparator groups have undergone a change in circumstances
(such as delisting, the cessation of trading or merger with another company), the
Committee may determine the appropriate treatment for such companies in accordance
with its stated methodology for the purpose of determining their TSR and TSR ranking.





Adjustments



9. The Committee may make such adjustments to the Performance Target applicable to outstanding
Performance 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.



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



11. Without prejudice to the generality of paragraphs 9, 10 and 12, 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 Performance Share Awards under Rule 13 of the Plan;
	 
	 	(b)	 	any adjustments it considers appropriate to the calculation of TSR for each
of the companies in the comparator group to take account of local market factors; and
	 
	 	(c)	 	any adjustments it considers appropriate if there is any modification in the
calculation of TSR or in relation to the relevant international accounting standard
used to calculate EPS or ROIC.





Overriding Power



12. In determining the level of Vesting of a Performance 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 18









 








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 Performance 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 6.2(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)	 	Normal Vesting — Release of Shares. Rule 4.2 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
Vesting occurs.
	 
	 	(E)	 	Dividend Equivalent — Cash Payment. Rule 5.2(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
Vesting occurs.
	 
	 	(F)	 	Dividend Equivalent — Shares in Lieu of Cash. Rule 5.3 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 Vesting occurs.
	 
	 	(G)	 	Approved Leaver. Rule 6.2 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 Vesting
occurs.
	 
	 	(H)	 	Death, Injury, Disability and Ill-health. Rule 6.4 shall have the additional
requirement that the Shares released to a US Participant or to a US Participant’s
personal representative following the US Participant’s cessation of employment by
reason of death, injury, disability or ill-health shall in all instances be
transferred to the US




Page 19









 






	 	 	 	Participant or the 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 11 shall not apply to any Performance
Share Award held by a US Participant if, at the time the election provided by Rule 11
is available to the US Participant, it has Vested. In such case, the Rules of the
Plan shall apply to the Performance Share Award without regard to Rule 11.
	 
	 	(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,
awards granted pursuant to this Schedule are intended to be exempt from Section 409A
of the 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 an 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 20









 











SCHEDULE 3




ELSEVIER REED FINANCE BV


The Rules of the Plan apply to Performance 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)	 	Performance Share Awards shall not be granted under this Schedule without the
agreement of the supervisory board of ERF.










Page 21









 











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 Performance Share Awards granted to French participants subject to
the modifications contained in this Schedule.



1. Definitions





	1.1	 	The definitions of Performance Share Award and Group in Rule 1.1 are deleted and
replaced with the following definitions:
	 
	 	 	Performance Share Award means a non-transferable, unfunded and conditional right granted
under Rule 3 to receive Shares without payment and references to Performance 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 Performance 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 Performance Share Awards
under this Plan or any other share plan subject to provisions of articles
L.225-197-1 et seq. of the




Page 22









 






	 	 	 	FCC) of the share capital of RE NV or RE PLC, or would, as a result of a 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 2.1, the word “Employee” will be replaced by “Eligible Individual”.





3. Rule 4 (Normal Vesting of Performance Share Awards) 




	3.1	 	Rule 4.1 shall be supplemented with the following provision:
	 
	 	 	“The Normal Vesting Date for Performance Share Awards will not be before the second
anniversary of the Date of Grant. Furthermore, if a Performance Share Award would otherwise
Vest in accordance with any provision of the Plan or of this Schedule 4 (except as provided
under Rule 6.5, as amended by paragraph 6.1 of this Schedule 4, (death and Defined
Disability)) before the second anniversary of the Date of Grant, the Performance 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	 	The last sentence of Rule 4.2 will be deleted and replaced with the following:
	 
	 	 	“Any Vested Performance 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 shares.
	 
	 	 	Any 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 6.5, 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 Shares.”




4. Rule 5 (Entitlement to Dividend Equivalents)





	 	 	A Performance 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 Performance Share Awards.




Page 23









 










5. Rules 6.2 and 6.3 (Approved Leaver)





	5.1	 	Shares which Vest in accordance with Rule 6.2 will be subject to the Holding Period.
	 
	5.2	 	Rule 6.3 will not apply to Performance Share Awards granted under this Schedule.




6. Rules 6.4 and 6.5 (Death, Injury, Disability and ill-health)





	6.1	 	Rules 6.4 and 6.5 will be deleted and replaced with the following new Rules:






6.4 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 Performance Share Award
will be treated in accordance with Rule 6.2 and any Shares which Vest will be subject to
the Holding Period.




6.5 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 Performance 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 Performance 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 Performance Share Award will
Vest in full on or shortly after the Termination Date as determined by the Committee.
To the extent that the Performance Share Award does not Vest, it will immediately
lapse.






	 	 	Any Shares which Vest in accordance with this Rule 6.5 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.




7. Rules 8, 9, 10, 11, 12, 13 (Change of Control, Internal Reorganisation, Rollover,
Winding up, Adjustment of Awards) 





	 	 	Rules 8, 9, 10, 11, 12 and 13 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 Performance Share
Awards to maintain favourable tax treatment under this Schedule 4. However, in the event
the Committee does not intend to maintain such favourable tax treatment, Rules 8, 9, 10,
11, 12 and 13 of the Plan will prevail notwithstanding any possible detrimental tax or
social security consequences for the Participant.




8. Rule 16 (Administration, amendment and termination)




Page 24









 









	 	 	Rule 16.2 will be supplemented with the following words:
	 
	 	 	“provided that the changes do not affect the French qualifying status of the Performance
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 17.11 (No transfer of Performance Share Awards)





	 	 	In Rule 17.11, the following words will be deleted:






	 	 	“or the assignment of a Performance Share Award, with the prior consent of the Committee,
subject to any terms and conditions the Committee imposes”




10. Rule 17.13 (Taxation) 





	 	 	In Rule 17.13, 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 3.2, 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.






Page 25









 








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 Performance 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 Performance Share Award on the basis that it will be
satisfied in cash, as opposed to Shares, as set out in (A) above.






Page 26