EXHIBIT 4.1


 


THE PRUDENTIAL GROUP PERFORMANCE SHARE PLAN


 


The
Company and any of its Subsidiaries may nominate any of their employees to
participate in the Plan and the Subsidiaries may bear the associated costs of
any such participation as determined by the Company.


 


1.                                      DEFINITIONS


 


1.1                                 In this Plan, unless the context otherwise requires, the following
words and expressions shall have the following meanings, namely:


 


Adoption
Date means the date of the adoption of
the Plan by the Company in general meeting;


 


Average
Market Value means in relation to a
Share, the average of the Market Value of such a Share during the calendar year
preceding the Date of Grant (calculated on such appropriate basis as the
Committee may determine);


 


Award
Letter means the document setting out
the rights and obligations attaching to a Performance Share Award and which may
incorporate by reference the rules of the Plan;


 


Cause means (i) gross misconduct; (ii) gross negligence; (iii)
insubordination; (iv) conviction of a criminal offence (other than a road
traffic offence not subject to a custodial sentence); (v) continued substantial
non-performance of duties; (vi) breach of any non-competition or
non-solicitation provision in any agreement to which the Participant is a
party; or (vii) any other ground which would entitle the employing company to
terminate the Participant’s employment summarily and without notice under the
terms of the employment contract or under the law of the jurisdiction
applicable to the Participant’s employment at the time of such termination;


 


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


 


the
Company means Prudential plc;


 


Control has the meaning given to that word by section 840 of the Taxes Act;


 


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


 


Dealing
Day means any day on which the London
Stock Exchange is open for business;


 


Employee means any employee or executive director of a member of the Group whose
terms of service require him to devote substantially the whole of his working
time to the businesses of the Group and who has not given or been given notice
terminating his employment;


 


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Executive
Share Scheme means any employee share
scheme adopted by the Company under which individuals may be selected for
participation at the discretion of the body administering that scheme;


 


Financial
Year means an accounting reference
period of the Company as defined in accordance with section 224 of the
Companies Act 1985;


 


Grant
Period means the period of 42 days
commencing on any of the following:


 


(a)                                  the Adoption Date;


 


(b)                                 the day on which the Company makes an announcement of its results
for the last preceding financial year, half year, quarter or other period; or


 


(c)                                  any day on which the Committee resolves that exceptional
circumstances exist which justify the grant of Performance Share Awards and for
the avoidance of doubt the hire of a new Employee may fall to be treated as
such an exceptional circumstance;


 


the
Group means the
Company and the Subsidiaries and member of the Group shall be construed
accordingly;


 


Market
Value means, in relation to a Share on
any Dealing Day, the middle market quotation for a Share as derived from the
Daily Official List of the London Stock Exchange for that Dealing Day;


 


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


 


Performance
Conditions mean the conditions specified
by the Committee at the Date of Grant in relation to a Performance Share Award
or as amended from time to time;


 


Performance
Period means unless foreshortened
pursuant to Rules 9, 11, 12, 13 or 16 of this Plan a period of three years
commencing on the Start Date during which the Performance Condition is to be
satisfied or such longer period as the Committee may specify for specific
Participants;


 


Performance
Share Award means an award granted in
the form referred to in Rule 2.2 of this Plan;


 


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


 


Share
Plan Committee means the committee
established by the board of the Company to administer the Plan;


 


Shares means fully paid ordinary shares in the capital of the Company (or
shares representing those shares following any reorganisation of the share
capital of the Company);


 


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Start Date means in relation to a Performance Share Award the beginning of the
Financial Year in which the Award is granted or such later date as may be
specified by the Committee on the Date of Grant;


 


Subsidiary means any subsidiary of the Company within the meaning of section
736 of the Companies Act 1985 over which the Company has Control;


 


Taxes
Act means the Income and Corporation
Taxes Act 1988;


 


Treasury
Shares means any Shares held as treasury
shares by the Company within the meaning of section 162A(3) of the Companies
Act 1985;


 


Trustee means the trustee from time to time of any employee trust which the
Committee selects to grant and/or satisfy Performance Share Awards; and


 


Vesting means the determination by the Committee of:


 


(a)                                  the extent to which the Performance Conditions attaching to a Performance
Share Award have been satisfied; and


 


(b)                                 the number of Shares (if any) in respect of which a Performance
Share Award shall be released


 


and
Vest shall
be construed accordingly.


 


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


 


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


 


2.                                      GRANT OF PERFORMANCE SHARE
AWARDS


 


2.1                                 The Committee may, during a Grant Period, grant Performance Share
Awards to Employees selected by the Committee in its absolute discretion.


 


2.2                                 The Committee may grant a Performance Share Award in the form of a
nil cost option, a right to acquire Shares, a conditional allocation of Shares
or in such other form as may confer on the Participant an equivalent economic
benefit.


 


2.3                                 Nothing in this Plan or in any Employee’s contract of employment
shall be construed as giving to any Employee a right to be considered for
participation in the Plan or to receive the grant of any Performance Share
Award.


 


2.4                                 The grant of a Performance Share Award and/or the delivery of Shares
upon release thereof shall be conditional on the Participant agreeing to comply
with any arrangements specified by the Company for the payment of taxation and
any social security contributions in respect of the Performance Share Award
(including without limitation the right of the Company to arrange the sale on
his behalf of sufficient


 


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Shares to satisfy any taxation or social
security liability on his part which the Company or any member of the Group may
be liable to withhold).


 


2.5                                 A Participant shall not have any beneficial ownership of the Shares
which are the subject of a Performance Share Award granted to him, and
accordingly shall not have any right to any dividends or voting rights
attaching to the Shares save as set out in Rule 6 below.


 


2.6                                 A Participant shall not be required to pay for the grant of a
Performance Share Award.


 


2.7                                 An Employee to whom a Performance Share Award is granted may, by
notice in writing to the Company given within 30 days after the Date of Grant,
renounce in whole or in part his rights under the Performance Share Award.


 


2.8                                 As soon as practicable after the Date of Grant the Committee shall
procure the issue to a Participant of an Award Letter in respect of the
Performance Share Award. The Award Letter shall specify, inter alia, the
following:


 


(a)                                  the dates on which the relevant Performance Period shall start and
end;


 


(b)                                 the details of the Performance Conditions imposed in accordance with
Rule 3.1 and the manner in which the Performance Conditions will determine the
number of Shares that may be acquired on Vesting of the Performance Share
Award; and


 


(c)                                  whether a Performance Share Award shall be enhanced in accordance
with Rule 6.


 


2.9                                 No Performance Share Award shall be granted under the Plan later
than the tenth anniversary of the Adoption Date.


 


2.10                           Every Performance Share Award granted hereunder shall be personal to
the Participant and, except in the event of the death of a Participant, neither
the Performance Share Award nor the benefit thereof may be transferred,
assigned, charged or otherwise alienated Any transfer or exercise otherwise
than as permitted under this Rule 2.10 shall cause the Performance Share Award
to lapse.


 


3.                                      PERFORMANCE CONDITIONS


 


3.1                                 Each Performance Share Award shall be subject to one or more
Performance Conditions which will determine the number of Shares which the
Participant will be entitled to acquire on Vesting of the Performance Share
Award. The Committee may impose different Performance Conditions for
Performance Awards granted to different Participants in the same Financial Year
and to Participants in different Financial Years.


 


3.2                                 The Performance Conditions may be amended after the Date of Grant
if:


 


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(i)    those circumstances which prevailed at the Date of Grant and which
were relevant to the Performance Conditions when they were originally imposed
have subsequently changed; and


 


(ii)   the Committee is satisfied that any such amended Performance
Conditions would be a fairer measure of performance and the Committee
reasonably considers that such amended Performance Conditions are consistent
with and no more or less demanding to satisfy than the original Performance
Conditions.


 


4.                                      PLAN LIMITS


 


4.1                                 No Performance Share Award shall be granted on any day to the extent
that the result of that grant would be that:


 


(a)                                  the aggregate number of Shares that could be issued on Vesting or
release of that Performance Share Award when added to the number of Shares
that:


 


(i)    could be issued on the exercise, vesting or release of any other
subsisting Performance Share Award granted during the preceding ten years under
the Plan;


 


(ii)   have been issued on Vesting or release of any subsisting Performance
Share Award granted during the preceding ten years under the Plan;


 


(iii)  could be issued pursuant to any other awards, options or rights
granted during the preceding ten years under any other employee share scheme
adopted by the Company; and


 


(iv)  have been issued pursuant to any other awards, options or rights
granted during the preceding ten years under any other employee share scheme
adopted by the Company


 


would exceed
10 per cent of the ordinary share capital of the Company from time to time in
issue;


 


(b)                                 the aggregate of the number of Shares that could be issued on
Vesting or release of that Performance Share Award when added to the number of
Shares that:


 


(i)    could be issued on Vesting or release of any other subsisting
Performance Share Award granted during the preceding ten years under the Plan;


 


(ii)   have been issued on Vesting or release of any subsisting Performance
Share Award granted during the preceding ten years under the Plan;


 


(iii)  could be issued pursuant to any other awards, options or rights
granted during the preceding ten years under any other Executive Share Scheme
adopted by the Company; and


 


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(iv)  have been issued pursuant to any other awards, options or rights
granted during the preceding ten years under any other Executive Share Scheme
adopted by the Company


 


would exceed 5
per cent of the ordinary share capital of the Company from time to time in
issue.


 


4.2                                 Where Shares are transferred or to be transferred from treasury
under this Plan or any other employees’ share scheme established by the Company
and for as long as it remains best practice to do so in accordance with
institutional shareholder guidelines, such Shares shall be treated, for the
purpose of this rule 4, as Shares that are issued or issuable.


 


5.                                      INDIVIDUAL LIMITS


 


5.1                                 A Performance Share Award shall not be granted to an Employee if
such grant would cause the total Average Market Value of the maximum number of
Shares that may be acquired upon exercise or release of the Performance Share
Award (as measured at the Date of Grant) when aggregated with the total Average
Market Value of the maximum number of Shares that may be acquired pursuant to
any other Performance Share Award granted to the Employee under the Plan or any
award granted under the Prudential Business Unit Performance Plan in the same
Financial Year, to exceed 3.5 times the Employee’s annual basic salary in
respect of his employment with the Group as at the Date of Grant.


 


5.2                                 In case of an Employee who is working and based in the United States
or such other jurisdiction as the Committee determines at the Date of Grant,
the limit referred to in Rule 5.1 above shall be 5.5 times the Employee’s
annual basic salary in respect of his employment with the Group as at the Date
of Grant.


 


6.                                      DIVIDENDS


 


If
a dividend is payable on Shares and the Committee has so determined at the Date
of Grant of a Performance Share Award, the Performance Share Award shall be
enhanced by increasing the number of Shares comprised in the Performance Share
Award by an additional number of Shares having a Market Value at the time the
dividend is paid equivalent to the gross or net of tax value of the dividend
and the enhanced Performance Share Award shall be exercisable in accordance
with these rules on the same basis as the original Performance Share Award,
unless the Committee has determined otherwise at the Date of Grant.


 


7.                                      VESTING OF PERFORMANCE SHARE
AWARDS


 


7.1                                 Save as otherwise permitted in the rules of the Plan, a Performance
Share Award shall only Vest if the Participant remains an employee of a member
of the Group until the third anniversary of the Date of Grant (or such other
date as may be determined by the Committee if the Performance Period exceeds
three years).


 


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7.2                                 Notwithstanding rule 7.1, a Performance Share Award shall not Vest
unless the Committee is satisfied that the underlying financial performance of
the Company during the Performance Period is such as to justify the Vesting of
such award.


 


7.3                                 As soon as reasonably practicable after the end of the last
Financial Year of the Performance Period the Committee shall determine whether
and the extent to which the Performance Conditions imposed under Rule 3.1 and
the requirement of Rule 7.2 have been satisfied and shall notify a Participant
of its determination.


 


7.4                                 Save as otherwise provided in these Rules, if a Performance Share
Award Vests, the Participant shall be entitled to be issued or transferred such
number of Shares as is determined by the Committee in accordance with the
Performance Conditions imposed under Rule 3.


 


8.                                      LAPSE OF PERFORMANCE SHARE
AWARDS


 


8.1                                 Notwithstanding any other provisions in these rules, a Performance
Share Award shall lapse automatically on the earliest of:


 


(a)                                  the Participant being declared bankrupt or entering into any general
composition with or for the benefit of his creditors, including a voluntary
arrangement under the Insolvency Act 1986;


 


(b)                                 the dismissal of the Participant for Cause;


 


(c)                                  the date on which the Participant ceases to be an Employee for any
reason mentioned in Rule 9.2 below where the Committee has not exercised its
discretion under Rule 9 to allow the Performance Share Award to Vest or be
retained;


 


(d)                                 the date on which the Participant ceases to be an Employee for any
reason other than one referred to in Rule 9.2 below whether such cessation is
lawful or unlawful;


 


(e)                                  the date on which the Committee determines that the Performance
Conditions for a Performance Period have not been satisfied or the underlying
performance of the Company does not justify vesting; and


 


(f)                                    on a general offer for the Company, scheme of arrangement,
winding-up of the Company or demerger in accordance with Rule 11.4, 12.2, 12.6,
13.2 and 16.2 below.


 


9.                                      CESSATION OF EMPLOYMENT


 


9.1                                 Save as otherwise provided in Rule 9.2 if a Participant ceases to be
an Employee before the third anniversary of the Date of Grant (or such other
date as may be determined by the Committee if the Performance Period exceeds
three years), the Performance Share Award shall lapse on the date of such
cessation.


 


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9.2                                 If a Participant ceases to be an Employee before the third
anniversary of the Date of Grant (or such other date as may be determined by
the Committee if the Performance Period exceeds three years) by reason of:


 


(a)                                  death;


 


(b)                                 injury or disability (as determined by the Committee);


 


(c)                                  retirement at or after the date on which he is bound or expected to
retire under his contract of employment;


 


(d)                                 his employing company ceasing to be a member of the Group;


 


(e)                                  the business (or part of the business) in which he is employed being
transferred to a transferee which is not a member of the Group; or


 


(f)                                    for any other reason at the Committee’s discretion


 


the relevant Performance Share Award shall
lapse forthwith upon such cessation unless the Committee in its absolute
discretion determines otherwise in which case Rules 9.3 to 9.6 shall apply to
the Award depending on the reason for the cessation.


 


9.3                                 If a Participant ceases to be an Employee before the third
anniversary of the Date of Grant (or such other date as may be determined by
the Committee if the Performance Period exceeds three years) by reason of
death, injury or disability (as determined by the Committee), the relevant
Performance Period shall be treated as coming to an end and the Performance
Share Award relating to that Performance Period shall Vest on cessation of
employment. The Committee may determine the number of Shares in respect of
which the Performance Share Award shall Vest in its absolute discretion having
regard to the extent to which the relevant Performance Conditions have been
satisfied at the date of the cessation of employment and the number of complete
months that have elapsed during the Performance Period up to the cessation of
employment.


 


9.4                                 If a Participant ceases to be an Employee before the third
anniversary of the Date of Grant (or such other date as may be determined by
the Committee if the Performance Period exceeds three years) by reason of
retirement at or after the date on which he is bound or expected to retire
under his contract of employment, the Participant’s Performance Share Award
shall continue and Vest at the end of the Performance Period to the extent that
the Performance Conditions are satisfied at the end of the Performance Period.
The number of Shares in respect of which the Performance Share Award shall Vest
shall be the number derived from the measurement of the relevant Performance
Conditions as at the end of the Performance Period multiplied by the fraction
A/B (where A is that part of the Performance Period (measured in complete
months) from the beginning of the Performance Period to the date of retirement
and B is 36 (or such other greater number as equals the number of months in the
full Performance Period)). Notwithstanding the above, the Committee may, in
exceptional circumstances, determine that the Performance Share Award may Vest
immediately upon the date of retirement or a later date before the end of the


 


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Performance Period and/or that it may Vest
in respect of a greater or lesser number of Shares than is otherwise determined
in accordance with this Rule 9.4.


 


9.5                                 If a Participant ceases to be an Employee before the third
anniversary of the Date of Grant (or such other date as may be determined by
the Committee if the Performance Period exceeds three years) by reason of his
employing company ceasing to be a member of the Group or the business (or part
of the business) in which he is employed being transferred to a transferee
which is not a member of the Group, the Committee may in its absolute
discretion having regard to the circumstances and timing of the relevant
transaction determine whether:


 


(a)                                  the relevant Performance Period shall be treated as coming to an end
and the Performance Share Award relating to that Performance Period shall Vest
on cessation of employment in which case the number of Shares in respect of
which the Performance Share Award shall Vest shall be determined by the
Committee in its absolute discretion having regard to the extent to which the
relevant Performance Conditions have been satisfied at the date of the transfer
or sale and/or, as the Committee considers appropriate, the performance of the
Company and/or the circumstances of the relevant transaction and the number of
complete months that have elapsed during the Performance Period before the
transfer or sale; or


 


(b)                                 the Performance Share Award shall continue in which case the
Committee will make arrangements to substitute the Shares which are the subject
of a Performance Share Award for cash or shares or other securities of an
appropriate company in the group to which the employing company or business (or
part of the business) in which the Participant is employed has been sold or
transferred having such value at the date of the sale or transfer as the
Committee shall decide so that the Performance Share Award shall Vest at the
end of the Performance Period and be subject to the terms of the Plan but
subject to such amendments and variations to the rules of the Plan and the
applicable performance conditions as the Committee determines is appropriate in
the circumstances.


 


9.6                                 If a Participant ceases to be an Employee before the third
anniversary of the Date of Grant (or such other date as may be determined by
the Committee if the Performance Period exceeds three years) for any other
reason at the Committee’s discretion, the Committee may determine in its
absolute discretion when the relevant Performance Period shall be treated as
coming to an end and the Performance Share Award relating to that Performance
Period shall Vest (whether at the date of cessation of employment or later) and
the number of Shares in respect of which the Performance Share Award shall Vest
having regard to the extent to which the relevant Performance Conditions have
been satisfied at the date determined by the Committee and the number of
complete months that have elapsed from the beginning the Performance Period up
to the cessation of employment.


 


10.                               RELEASE OF PERFORMANCE SHARE
AWARDS


 


10.1                           Subject to any necessary consents and to compliance by the
Participant with the terms of this Plan, the Participant shall be entitled to
and the Company shall


 


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procure within 30 days after the Vesting of
the Performance Share Award (or as soon as is practicable after such
30 day period) the issue or transfer to the Participant (or to his
nominee) of the full legal and beneficial ownership of the Shares to which he
is entitled free from any liens, charges or encumbrances. The Company shall
(unless the Shares are to be issued in uncertified form) as soon as practicable
deliver or procure the delivery to the Participant (or his nominee) of a
definitive share certificate or other evidence of title in respect of such
Shares.


 


10.2                           Notwithstanding any other provision of this Plan, the Participant
shall not be entitled and the Company shall not be obliged to issue or procure
the transfer of Shares in connection with a Performance Share Award or take any
other action under the Plan unless and until the Company is satisfied that any
applicable securities law, any requirement under any listing agreement between
the Company and any securities exchange, automated quotation system or any
regulatory body or any other law, regulation or contractual obligation of the
Company can be and have been complied with in full. The Company may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issue or transfer of Shares under
this Plan. Certificates representing Shares will be subject to such stop-transfer
orders and other restrictions as may be applicable under such laws, regulations
and other obligations of the Company, and a legend or legends may be placed
thereon to reflect such restrictions.


 


10.3                           The Company may decide, if it is appropriate for legal, regulatory
or tax reasons, to make a cash payment to a Participant, in lieu of delivering
Shares, of an equivalent value to the Shares but subject to any necessary
deductions required by law.


 


11.                               GENERAL OFFER FOR THE COMPANY


 


11.1                           If any person (either alone or together with any person acting in
concert with him) obtains Control of the Company as a result of making a
general offer to acquire all or some of the Shares (other than those which are
already owned by him and/or any person acting in concert with him) and such
offer becomes or is declared unconditional in all respects, or having obtained
Control, makes such an offer, the Committee may, acting fairly and reasonably
and having regard to the circumstances of the general offer, determine in its
discretion whether a Participant’s Performance Share Awards:


 


(a)                                  shall be automatically exchanged for a new award under Rule 15; or


 


(b)                                 shall Vest to the extent determined by the Committee in its absolute
discretion under Rule 14.


 


11.2                           If the Committee determines that a Performance Share Award Vests
under Rule 11.1(b), the Performance Share Award shall be released in respect of
the number of Shares determined under Rule 14 within one month of the offer
becoming or being declared unconditional in all respects.


 


11.3                           If the Committee determines that a Performance Share Award Vests
under Rule 11.1(b) it may in addition determine in its discretion that the
Participant may


 


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voluntarily agree to exchange his
Performance Share Award for a new award under Rule 15.


 


11.4                           A Performance Share Award shall, without prejudice to the operation
of Rule 15, lapse in respect of such number of Shares as to which it has not
Vested as determined under this Rule 11 and Rule 14.


 


12.                               SCHEME OF ARRANGEMENT


 


12.1                           If a court shall direct that a meeting of the holders of Shares be
convened pursuant to section 425 of the Companies Act 1985 for the purpose of
considering a scheme of arrangement of the Company or its amalgamation with any
other company or companies, Performance Share Award the Committee may, acting
fairly and reasonably and having regard to the circumstances of the scheme of
arrangement, determine, in its discretion whether upon the scheme of
arrangement being sanctioned by the court (the Relevant Condition) a Participant’s
Performance Share Award:


 


(a)                                  shall be automatically exchanged for a new award under Rule 15; or


 


(b)                                 shall Vest to the extent determined by the Committee in its absolute
discretion under Rule 14.


 


12.2                           If the Relevant Condition is not satisfied, the Performance Share
Award shall continue. If the Relevant Condition is satisfied, the Performance
Share Award shall without prejudice to the operation of Rule 15 lapse
automatically on the day immediately after the date on which the scheme of
arrangement is sanctioned by the court.


 


12.3                           If the Committee determines that a Performance Share Award Vests
under Rule 12.1(b), the Committee shall endeavour to procure that the
scheme of arrangement shall, so far as it relates to Shares, be extended to
such Participant as if each Share determined under Rule 14 had been allotted
and issued, or transferred, to him by that time.


 


12.4                           If the Committee determines that a Performance Share Award Vests
under Rule 12.1(b) it may in addition determine in its discretion that the
Participant may voluntarily agree to exchange his Performance Share Award under
Rule 15.


 


12.5                           Performance Share Awards shall not Vest under the foregoing
provisions of this Rule 12 if the purpose and effect of the scheme of
arrangement is to create a new holding company for the Company, such company having
substantially the same shareholders and proportionate shareholdings as those of
the Company immediately prior to the scheme of arrangement. A Performance Share
Award will in such circumstances continue and be treated as an award over such
number of Shares in the holding company as is determined to be appropriate by
the Committee, and reference in this Plan to “the Company” shall be construed
as references to such holding company as appropriate.


 


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12.6                           A Performance Share Award shall, without prejudice to the operation
of Rule 15, lapse in respect of such number of Shares as to which it has
not Vested as determined under this Rule 12 and Rule 14.


 


13.                               VOLUNTARY WINDING-UP


 


13.1                           If notice is duly given of a resolution for a voluntary winding-up
of the Company then the Committee, acting fairly, reasonably and objectively,
may in its discretion allow Performance Share Awards to Vest. A Participant’s
Performance Share Award shall Vest to the extent determined by the Committee in
its absolute discretion under Rule 14.


 


13.2                           A Performance Share Award shall lapse in respect of such number of
Shares as to which it has not Vested as determined under this Rule 13 and Rule
14.


 


14.                               DETERMINATION OF VESTING
LEVEL


 


Where
a Performance Share Award Vests before the expiry of the relevant Performance
Period under Rules 11 to 13, the number of Shares in respect of which the
Performance Share Award shall Vest shall be such number as is determined by the
Committee in its absolute discretion taking into account: (i) the performance
of the Company (including, without limitation, the extent to which the
Performance Conditions have been or are likely to be achieved as at the date of
the relevant event to which Rules 11 to 13 refer) and (ii) the time elapsed
between the Date of Grant and the relevant event to which Rules 11 to 13 refer
and in this regard the Committee may, but shall not be obliged to, consider
whether it is appropriate to apply one of the following percentages to a Performance
Share Award to determine the extent to which a Performance Share Award shall
Vest:


 


(a)                                  33% if the relevant
event occurs during the first year of the Performance Period;


 


(b)                                 67% if the relevant
event occurs during the second year of the Performance Period; and


 


(c)                                  100% if the relevant
event occurs during the third year of the Performance Period.


 


15.                               EXCHANGE OF PERFORMANCE SHARE
AWARDS


 


15.1                           Where Performance Share Awards are to be exchanged under this Rule,
any Performance Share Award (the Old Right) may (if the exchange is voluntary
under Rule 11.3 or Rule 12.4 or shall (if the exchange is automatic under Rule
11.1(a) or Rule 12.1(a)) be surrendered by the Participant in consideration of
the grant to the Participant of a new award (the New Right) which, in the opinion of the
Committee, is equivalent to the Old Right but relates to shares in a different
company. The provisions of the Plan shall be construed in relation to the New
Right as if:


 


(a)                                  the New Right were a Performance Share Award granted under the Plan
at the same time as the Old Right;


 


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(b)                                 references to the Performance Conditions were references to such new
performance conditions relating to the business or shares of the company whose
shares are subject to the New Right (or any member of its group) as the
Committee may consider appropriate in the circumstances;


 


(c)                                  references to the Company and the Group were references to the
company whose shares are subject to the New Right and its group; and


 


(d)                                 references to Shares were references to shares in the new grantor.


 


16.                               DEMERGER


 


16.1                           If the Committee becomes aware that the Company is or is expected to
be affected by any demerger, dividend in specie, super dividend or other transaction
which, in the opinion of the Committee, would materially affect the current or
future value of any Performance Share Awards (whether by increasing or reducing
the value), the Committee, acting fairly, reasonably and objectively, may in
its absolute discretion treat some or all of the Performance Share Awards as
Vested to the extent to which the Performance Conditions have or are likely to
have been met at that time. The Committee shall specify when such Vested
Performance Share Award shall be released.


 


16.2                           A Performance Share Award shall lapse in respect of such number of
Shares as to which it has not Vested in accordance with this Rule 16.


 


17.                               ADJUSTMENT OF PERFORMANCE
SHARE AWARDS


 


In the event of:


 


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


 


(ii)   the implementation by the Company of a demerger or the payment by
the Company of a dividend in specie or a super-dividend which would otherwise
materially affect the value of a Performance Share Award,


 


then
the terms of a Performance Share Award (including, if relevant, the Performance
Conditions applicable thereto) shall be adjusted in such manner as the Committee
shall determine in its absolute discretion provided that no adjustment shall be made
pursuant to this Rule 17 unless and until the auditors for the time being of
the Company (acting as experts not arbitrators) shall confirm in writing to the
Committee that such adjustment is in their opinion fair and reasonable.


 


18.                               RIGHTS ATTACHING TO SHARES
ISSUED OR TRANSFERRED PURSUANT TO AWARDS


 


18.1                           All Shares issued or transferred pursuant to a Performance Share
Award shall be of equal rank in all respects with the Shares in issue at the
date of transfer or issue


 


13

















 


save as regards any rights attaching to
such Shares by reference to a record date prior to the date of transfer or
issue.


 


18.2                           Any Shares acquired pursuant to a Performance Share Award shall be
subject to the articles of association of the Company from time to time.


 


19.                               AVAILABILITY OF SHARES


 


19.1                           The Company shall at all times keep available for issue sufficient
authorised but unissued Shares to satisfy all Performance Share Awards under
which Shares may be allotted or shall otherwise procure that Shares or Treasury
Shares are available for transfer in satisfaction of Performance Share Awards.


 


19.2                           If and so long as the Shares are listed on the UK Listing Authority
and admitted to trading on the Official List of the London Stock Exchange, the
Company shall make application to the UK Listing Authority and to the London
Stock Exchange for any Shares allotted pursuant to a Performance Share Award to
become admitted to such listing on the Official List of the UK Listing
Authority and to trading on the Official List of the London Stock Exchange.


 


20.                               ADMINISTRATION AND AMENDMENT


 


20.1                           Subject to Rules 20.2 and 20.3, the decision of the Remuneration
Committee shall be final and binding in all matters relating to the Plan and it
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.


 


20.2                           The Remuneration Committee shall not make any amendment that would
materially prejudice the interest of an existing Participant except with the
prior consent of the Participant.


 


20.3                           No amendment to the advantage of Employees or Participants may be
made to the basic structure of the Plan (as determined by the Committee but
including, without limitation, the definition of Employee, the limits under Rules 4 and
5, the terms of Shares to be provided under the Plan, the adjustment provisions
of Rule 17, the rights attaching to Shares and the amendment powers in this
Rule 20) without the prior approval of the Company in general meeting except in
the case of a minor amendment to benefit the administration of the Plan or an
amendment to take account of any applicable legislation or change in law or to
obtain or maintain favourable tax, exchange control or regulatory treatment for
Employees or Participants or any member of the Group.


 


21.                               GENERAL


 


21.1                           The Plan constitutes an employees’ share scheme for the purposes of
section 743 of the Companies Act 1985 (being a scheme for encouraging or
facilitating the holding of Shares). Any member of the Group may provide money
to the Trustee or any other person to enable them or him to acquire Shares to
be held for the purposes of the Plan, or enter into any guarantee or indemnity
for those purposes, to the extent not prohibited by section 151 of the
Companies Act 1985.


 


14

















 


21.2                           Participation in the Plan by a Participant is a matter entirely
separate from, and does not affect, the terms and conditions of his office or
employment.


 


21.3                           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 any company 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 under or be entitled to exercise any Performance Share
Award under the Plan 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 shall be deemed to be varied accordingly.


 


21.4                           Any notice or other document required to be given under or in
connection with the Plan may be given to a Participant electronically,
delivered to a Participant or sent by post to him at his home address according
to the records of his employing company or such other address as may appear to
the Company to be appropriate. Any notice or other document required to be
given to the Company under or in connection with the Plan may be given to the
Company electronically, 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). Notices sent by post shall be deemed to have been
given on the day following the date of posting.


 


21.5                           Benefits under the Plan shall not be pensionable.


 


21.6                           The Company, or where the Committee so directs any Subsidiary, shall
pay the appropriate stamp duty on behalf of Participants in respect of any
transfer of Shares on the exercise of Performance Share Awards.


 


21.7                           The rules of the Plan shall be governed by, and construed in
accordance with, the laws of England and Wales.


 


15

















 


CONTENTS


 


	
  CLAUSE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  1

  
	
  2.

  	
  GRANT OF PERFORMANCE SHARE AWARDS

  	
  3

  
	
  3.

  	
  PERFORMANCE
  CONDITIONS

  	
  4

  
	
  4.

  	
  PLAN
  LIMITS

  	
  5

  
	
  5.

  	
  INDIVIDUAL
  LIMITS

  	
  6

  
	
  6.

  	
  DIVIDENDS

  	
  6

  
	
  7.

  	
  VESTING OF PERFORMANCE SHARE AWARDS

  	
  6

  
	
  8.

  	
  LAPSE OF PERFORMANCE SHARE AWARDS

  	
  7

  
	
  9.

  	
  CESSATION
  OF EMPLOYMENT

  	
  7

  
	
  10.

  	
  RELEASE OF PERFORMANCE SHARE AWARDS

  	
  9

  
	
  11.

  	
  GENERAL OFFER FOR THE COMPANY

  	
  10

  
	
  12.

  	
  SCHEME
  OF ARRANGEMENT

  	
  11

  
	
  13.

  	
  VOLUNTARY
  WINDING-UP

  	
  12

  
	
  14.

  	
  DETERMINATION OF VESTING LEVEL

  	
  12

  
	
  15.

  	
  EXCHANGE OF PERFORMANCE SHARE AWARDS

  	
  12

  
	
  16.

  	
  DEMERGER

  	
  13

  
	
  17.

  	
  ADJUSTMENT OF PERFORMANCE SHARE AWARDS

  	
  13

  
	
  18.

  	
  RIGHTS ATTACHING TO SHARES ISSUED OR TRANSFERRED PURSUANT TO AWARDS

  	
  13

  
	
  19.

  	
  AVAILABILITY
  OF SHARES

  	
  14

  
	
  20.

  	
  ADMINISTRATION AND AMENDMENT

  	
  14

  
	
  21.

  	
  GENERAL

  	
  14

  
	
  CONTENTS

  	
  16

  
				



 


16

















 


PRUDENTIAL PLC


 


 


THE PRUDENTIAL GROUP PERFORMANCE SHARE PLAN


 


 


Approved by the Company in general meeting on

18 May 2006