newex407.htm


    

       

      
        	 	343
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

     

    Exhibit 4.7    Aviva Executive Share Option
plan

     

     

     

    
       

    

     

     

    AVIVA plc

     

     

     

     

     

     

     

     

    
       

      
RULES
OF THE AVIVA EXECUTIVE SHARE OPTION PLAN 2005

       

    

     

     

    
      	
            
	
              
Shareholders’
      Approval: 

            	
              26
      April 2005

            
	 	 
	
              Directors’
      Adoption

              (subject
      to shareholders’ approval):

            	
              1
      March 2005 (Main rules)

            
	 	 
	
              Expiry
      Date:

            	
              25
      April 2010

            
	 
	
              Showing
      amendments to February 2010

            


    

     

     

     

     

    
 
 
 


    
One
Silk Street

    London
EC2Y 8HQ
 


    
Telephone

(44-20) 7456 2000
 

    
Facsimile

(44-20) 7456 2222
 
 
 


    
Ref
J Cooper/N Keuning-Price
 


    
    

    



     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      

         

        
          	344	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

    
 

    Table
of Contents

     

    


     

    
      	Contents	 	Page
	
              1

            	
              Granting
      Options

            	
              345

            
	
              2

            	
              Terms
      of Options

            	
              346

            
	
              3

            	
              Option
      Price

            	
              346

            
	
              4

            	
              Individual
      limits

            	
              347

            
	
              5

            	
              Exercise
      and lapse - general rules

            	
              347

            
	
              6

            	
              Exercise
      and lapse - exceptions to the general rules

            	
              347

            
	
              7

            	
              Variations
      in share capital, demergers and special distributions

            	
              348

            
	
              8

            	
              Takeovers
      and restructurings

            	
              349

            
	
              9

            	
              Exchange
      of Options

            	
              350

            
	
              10

            	
              Exercise
      of Options

            	
              351

            
	
              11

            	
              General

            	
              352

            
	
              12

            	
              Changing
      the Plan and termination

            	
              354

            
	
              13

            	
              Definitions

            	
              355

            
	
              Schedule
      1 United Kingdom - Approved Options

            	
              356

            
	
              Schedule
      2 Executive Approved Options

            	
              359

            


    

     

    


     

    


     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      

         

        
          	 	345
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

    
 

    Rules
of the Aviva Executive Share Option Plan 2005

     

    
      
        
          	
                  1

                	
                  Granting
      Options

                


        

      

    

     

    
      
        	
                1.1

              	
                Grantor

              


      

    

     

    The
Grantor of an Option must be:

     

    
      
        	
              	
                1.1.1

              	
                the
    Company;

              


      

    

     

    
      
        	
              	
                1.1.2

              	
                a Subsidiary;
      or

              


      

    

     

    
      
        	
              	
                1.1.3

              	
                a trustee of any trust
      set up for the benefit of the employees of the Company and/or any
      Subsidiary.

              


      

    

     

    Any
Options granted under the Plan must be approved in advance by the
Directors.

     

    
      
        	
                1.2

              	
                Eligibility

              


      

    

     

    The
Grantor may grant an Option to any employee (including an executive director who
devotes substantially the whole of his working time to his duties) of the
Company or any Subsidiary. However, unless the Directors consider that special
circumstances exist, an Option may not be granted to an employee who on the Date
of Grant:

     

    
      
        	
              	
                1.2.1

              	
                has given or received
      notice of termination of employment, whether or not such termination is
      lawful; or

              


      

    

     

    
      
        	
              	
                1.2.2

              	
                if this is lawful, is
      within six months of his anticipated retirement date1.

              


      

    

     

    
      
        
          	
                  1.3

                	
                  Timing
      of Option

                


        

      

    

     

    Options
may not be granted at any time after the Expiry Date and Options may only be
granted within 42 days starting on any of the following:

     

    
      
        	
              	
                1.3.1

              	
                the date of shareholder
      approval;

              


      

    

     

    
      
        	
              	
                1.3.2

              	
                the day after the
      announcement of the Company’s results through a regulatory information
      service for any period;

              


      

    

     

    
      
        	
              	
                1.3.3

              	
                any day on which the
      Directors resolve that exceptional circumstances exist which justify the
      grant of Options;

              


      

    

     

    
      
        	
              	
                1.3.4

              	
                any day on which changes
      to the legislation or regulations affecting share plans are announced,
      effected or made; or

              


      

    

     

    
      
        	
              	
                1.3.5

              	
                the lifting of Dealing
      Restrictions which prevented the granting of Options during any period
      specified above.

              


      

    

     

    
      
        	
                1.4

              	
                Performance
      Conditions

              


      

    

     

    When
granting an Option, the Grantor must make its exercise conditional on the
satisfaction of one or more conditions linked to the performance of the Company.
A Performance Condition must be objective and specified at the Date of Grant and
may provide that an Option will lapse if a Performance Condition is not
satisfied. The Grantor, with the consent of the Directors, may waive or change a
Performance Condition in accordance with its terms or if anything happens which
causes the Grantor reasonably to consider it appropriate.

     

    
      	
              1.5

            	
              Other
      conditions

            


    

     

    The
Grantor may impose other conditions when granting an Option. Any condition must
be objective, specified at the Date of Grant and may provide that an Option will
lapse if it is not satisfied. The Grantor, with the consent of the Directors,
may waive or change a condition in accordance with its terms or in any way they
see fit. Notwithstanding anything else in the Plan, an Option will only be
exercisable to the extent that any condition is satisfied or
waived.

     

    
      
        	
                1.6

              	
                Option
      certificates

              


      

    

     

    Each
Participant will receive a certificate setting out the terms of the Option as
soon as practicable after the Date of Grant. The certificate may be the deed
referred to in rule 2.1 (Terms of Options) or any other document, including a
statement, and may be sent electronically. If any certificate is lost or damaged
the Company may replace it on such terms as it decides.

     

    
      
        	
                1.7

              	
                No
      payment

              


      

    

     

    A
Participant is not required to pay for the grant of any Option.

     

    

      

    

     

      
        	
                1

              	
                This
      rule 1.2.2 is void under the Employment Equality (Age) Regulations 2006
      and will not be applied.

              


      

       

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    

       

      
        	346	 
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    


     

    
      
        	
                1.8

              	
                Disclaimer
      of Option

              


      

    

     

    Any
Participant may disclaim all or part of his Option within 30 days after the Date
of Grant by notice in writing to any person nominated by the Grantor. If this
happens, the Option will be deemed never to have been granted under the Plan. A
Participant is not required to pay for the disclaimer. No cash consideration
would be paid by the Company is this event.

     

    
      
        	
                1.9

              	
                Administrative
      errors

              


      

    

     

    If
the Grantor tries to grant an Option which is inconsistent with rule 4
(Individual limits) or rule 11.1 (Plan limits) the Directors have discretion to
decide whether the Option will be limited and will take effect from the Date of
Grant on a basis consistent with those rules.

     

    
      
        
          	
                  2

                	
                  Terms
      of Options

                


        

      

    

     

    
      
        
          	
                  2.1

                	
                  Terms

                


        

      

    

     

    Options
are subject to the rules of the Plan, any Performance Condition and any other
condition imposed under rule 1.5 (Other conditions) and must be granted by deed.
The terms of the Option, as determined by the Grantor, and approved by the
Directors, must be specified in the deed and must include:

     

    
      
        	
              	
                2.1.1

              	
                the number or value of
      Shares subject to the Option;

              


      

    

     

    
      
        	
              	
                2.1.2

              	
                the Option
      Price;

              


      

    

     

    
      
        	
              	
                2.1.3

              	
                any Performance
      Condition;

              


      

    

     

    
      
        
          	
                	
                  2.1.4

                	
                  any other condition
      specified under rule 1.5 (Other
conditions);

                


        

      

    

     

    
      
        	
              	
                2.1.5

              	
                the period for exercise
      of the Option, unless specified in a Performance
  Condition;

              


      

    

     

    
      
        	
              	
                2.1.6

              	
                whether the Participant
      is entitled to receive any cash or shares under rule 2.3 (Dividend
      equivalent); and

              


      

    

     

    
      
        	
              	
                2.1.7

              	
                the Date of
      Grant.

              


      

    

     

    
      
        	
                2.2

              	
                Rights

              


      

    

     

    Subject
to rule 2.3 (Dividend equivalent), a Participant shall not be entitled to vote,
to receive dividends or to have any other rights of a shareholder in respect of
Shares subject to an Option until the Shares are issued or transferred to the
Participant except as set out in rule 10.6 (Rights attaching to
Shares).

     

    
      
        	
                2.3

              	
                Dividend equivalent

              


      

    

     

    Options
will not include any rights in respect of dividends on the Shares comprised in
the Option before Vesting, unless the Grantor, in its discretion, decides
otherwise at the Option Date. The Grantor may, when granting an Option,
determine that the Option will include the right to receive cash or Shares in
respect of dividends, on such basis as the Grantor may, in its discretion,
determine.

     

    
      
        	
                2.4

              	
                Transfer

              


      

    

     

    A
Participant may not transfer, assign or otherwise dispose of an Option or any
rights in respect of it, if he does, whether voluntarily or involuntarily, then
it will immediately lapse. This rule 2.4 does not apply to:

     

    
      
        	
              	
                2.4.1

              	
                the transmission of an
      Option on the death of a Participant to his personal representatives;
      or

              


      

    

     

    
      
        	
              	
                2.4.2

              	
                the assignment of an
      Option, with the prior consent of the Directors, subject to any terms and
      conditions the Directors
impose.

              


      

    

     

    
      
        	
                3

              	
                Option
      Price

              


      

    

     

    
      	
            	
              3.1

            	
              Setting
      the Option Price

            


    

     

    The
Grantor, with the consent of the Directors, will set the Option Price and state
it on the Date of Grant.

     

    The
Option Price will be:

     

    
      
        	
              	
                3.1.1

              	
                not less than the Market
      Value of a Share on the Date of Grant;
and

              


      

    

     

    
      
        	
              	
                3.1.2

              	
                if the Shares are to be
      subscribed, not less than the nominal value of a
  Share.

              


      

    

     

    
      
        	
                3.2

              	
                Market
      Value

              


      

    

     

    “Market Value” on any
particular day means:

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    

       

      
        	 	347
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    


    


     

    
      
        	
              	
                3.2.1

              	
                where Shares of the same
      class are admitted to the Official List of the UK Listing Authority and
      traded on the London Stock
Exchange:

              


      

    

     

    
      
        	
              	
                (i)

              	
                their
      middle market quotation on the immediately preceding Business Day;
      or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                if
      the Directors so decide, the average of the middle market quotation on the
      3 immediately preceding Business
Days.

              


      

    

     

    The
middle market quotation is taken from the Daily Official List of the London
Stock Exchange;

     

    
      
        	
              	
                3.2.2

              	
                where Shares of the same
      class are not admitted to the Official List of the UK Listing Authority,
      the market value of a Share calculated as described in Part VIII of the
      Taxation of Chargeable Gains Act
1992.

              


      

    

     

    
      
        	
                4

              	
                Individual
      limits

              


      

    

     

    
      
        	
                4.1

              	
                Salary
    limit

              


      

    

     

    An
Option must not be granted to an employee if it would cause the total amount
payable on exercise of Options granted to him in the same financial year under
the Plan to exceed the following limit.

     

    The
limit is 200% of the annual rate of his total basic salary at a date determined
by the Directors from Members of the Group. “Basic salary” means gross salary
before adjustment to take account of any flexible benefits and excludes bonuses
and benefits in kind.

     

    
      
        	
                4.2

              	
                Currency
      conversion

              


      

    

     

    Remuneration
payable in a currency other than Sterling will be converted into Sterling in
such manner as the Directors decide.

     

    
      	
              5

            	
              Exercise
      and lapse - general rules

            


    

     

    
      	
              5.1

            	
              Exercise

            


    

     

    Subject
to rule 5.2 (Lapse), rule 6 (Exercise and lapse - exceptions to the general
rules) and rule 8 (Takeovers and restructurings) an Option can only be
exercised:

     

    
      
        	
              	
                5.1.1

              	
                on or after the third
      anniversary of its Date of Grant or such other date as the Directors may
      specify on the Date of Grant;


              


      

    

     

    
      
        	
              	
                5.1.2

              	
                to the extent allowed by
      the Performance Condition or any other condition;
  and

              


      

    

     

    
      
        	
              	
                5.1.3

              	
                if not prohibited by any
      Dealing Restriction.

              


      

    

     

    
      
        	
                5.2

              	
                Lapse

              


      

    

     

    
      
        	
              	
                5.2.1

              	
                Unless rule 6 (Exercise
      and lapse - exceptions to the general rules) applies, an Option will lapse
      on the earliest of:

              


      

    

     

    
      
        	
              	
                (i)

              	
                the
      date the Participant ceases to be an employee or director of a Member of
      the Group;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                any
      date specified in the Performance Condition;
or

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      expiry of the Option Period, unless rule 6.1.1(iv)(Death)
      applies.

              


      

    

     

    
      
        	
              	
                5.2.2

              	
                For the purposes of this
      rule 5.2 and rule 6 (Exercise and lapse – exceptions to the general
      rules), a Participant will not be treated as ceasing to be an employee or
      director of a Member of the Group until he ceases to be an employee or
      director of all Members of the Group or if he recommences employment with
      or becomes a director of a Member of the Group within 14 days and on such
      basis as the Directors, in their discretion,
  approve.

              


      

    

     

    
      
        	
              	
                5.2.3

              	
                If a Participant ceases
      to be an employee or director of any Member of the Group for reasons
      involving misconduct, all his Options (whether vested or unvested) will
      lapse on such cessation.

              


      

    

     

    
      
        	
              	
                5.2.4

              	
                In the event of any
      conflict, the provisions of these rules (including any schedules) which
      results in the Option ceasing to be exercisable or lapsing earliest will
      take precedence.

              


      

    

     

    
      
        	
                6

              	
                Exercise
      and lapse - exceptions to the general
rules

              


      

    

     

    
      
        	
                6.1

              	
                Cessation
      of employment

              


      

    

     

    
      
        	
              	
                6.1.1

              	
                If a Participant ceases
      to be an employee or director of any Member of the Group for any of the
      reasons set out below, then his Options will not lapse and may be
      exercised as described in rule 6.2 (Vested Options) and rule 6.3 (Unvested
      Options) and lapse as to the balance. The reasons
  are:

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    
      

         

        
          	348	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

     

    
      
        	
              	
                (i)

              	
                retirement
      with the agreement of the
Company;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                ill-health,
      injury or disability, as established to the satisfaction of the
      Company;

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      Participant’s employing company ceasing to be under the Control of the
      Company;

              


      

    

     

    
      
        	
              	
                (iv)

              	
                a
      transfer of the undertaking, or the part of the undertaking, in which the
      Participant works to a person which is neither under the Control of the
      Company nor a Member of the
Group;

              


      

    

     

    
      
        	
              	
                (v)

              	
                redundancy,
      only in circumstances which give rise to a redundancy
    payment;

              


      

    

     

    
      
        	
              	
                (vi)

              	
                death;

              


      

    

     

    
      
        	
              	
                (vii)

              	
                any
      other reason, if the Directors so decide in any particular
      case.

              


      

    

     

    
      
        
          	
                	
                  6.1.2

                	
                  The Directors must
      exercise any discretion provided for in rule 6.1.1 within 30 days after
      cessation of the relevant Participant’s employment or office and the
      Option will lapse or become exercisable (as appropriate) on the earlier of
      the date on which the discretion is exercised and the end of the 30 day
      period.

                


        

      

    

     

    
      
        	
                6.2

              	
                Vested
      Options

              


      

    

     

    
      
        	
              	
                6.2.1

              	
                This rule 6.2 applies
      where, as at the date the Participant ceases to be an employee or
      director, the Option was exercisable in accordance with rule 5 (Exercise
      and lapse - general rules).

              


      

    

     

    
      
        	
              	
                6.2.2

              	
                The Participant may
      exercise the Option within 6 months after such cessation (12 months if
      rule 6.1.1(iv) (Death) applies), but not after the expiry of the Option
      Period unless rule 6.1.1(iv) (Death) applies. The Option may be exercised
      to the same extent as it was exercisable immediately before cessation of
      the Participant’s employment.

              


      

    

     

    
      
        	
                6.3

              	
                Unvested
      Options

              


      

    

     

    
      
        	
              	
                6.3.1

              	
                This rule 6.3 applies
      where, as at the date the Participant ceases to be an employee or
      director, the Option was not exercisable in accordance with rule 5
      (Exercise and lapse - general
rules).

              


      

    

     

    
      
        	
              	
                6.3.2

              	
                The Option may be
      exercised within 6 months (12 months if rule 6.1.1(iv) (Death) applies)
      after the date it would have become exercisable had there been no
      cessation of employment, but not after the expiry of the Option Period
      unless rule 6.1.1(iv) (Death)
applies.

              


      

    

     

    
      
        	
              	
                6.3.3

              	
                Unless the Directors
      decide otherwise, the number of Shares in respect of which the Option may
      be exercised will be reduced pro rata to reflect the number of days from
      the start of the Performance Period until the cessation of the
      Participant’s office or employment as a proportion of the number of days
      of the Performance Period.

              


      

    

     

    
      
        	
                6.4

              	
                Lapse

              


      

    

     

    
      To
the
extent that any Option exercisable under this rule 6 is not exercised
within the applicable period, it will lapse at the end of that
period.

    

     

    
      
        	
                7

              	
                Variations
      in share capital, demergers and special
  distributions

              


      

    

     

    
      
        	
                7.1

              	
                Adjustment
      of Options

              


      

    

     

    If
there is:

     

    
      
        	
              	
                7.1.1

              	
                a variation in the
      equity share capital of the Company, including a capitalisation or rights
      issue, sub-division, consolidation or reduction of share capital;
      or

              


      

    

     

    
      
        	
              	
                7.1.2

              	
                a demerger (in whatever
      form) or exempt distribution by virtue of Section 213 of the Income and
      Corporation Taxes Act 1988;
or

              


      

    

     

    
      
        	
              	
                7.1.3

              	
                a special dividend or
      distribution;

              


      

    

     

    
      
        	
              	
                (i)

              	
                the
      number of Shares comprised in each Option;
or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                the
      Option Price; or

              


      

    

     

    
      
        	
              	
                (iii)

              	
                both,

              


      

    

     

    may
be adjusted in any way (including retrospective adjustments) which the Directors
consider appropriate.

     

    
      
        
          	
                  7.2

                	
                  Nominal
      value

                


        

      

    

     

    
      
        	
              	
                7.2.1

              	
                The Option Price of an
      Option to acquire existing Shares may be adjusted to a price less than
      nominal value. However, where Shares are to be subscribed, rule 7.2.2 must
      be followed.

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

       

      
        	 	349
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

     

    
      
        	
              	
                7.2.2

              	
                The Option Price of an
      Option to subscribe for Shares may be adjusted to a price less than
      nominal value only if the Directors resolve to capitalise the reserves of
      the Company, subject to any necessary conditions. This capitalisation will
      be of an amount equal to the difference between the adjusted Option Price
      payable for the Shares to be issued on exercise, and the nominal value of
      such Shares on the date of allotment of the Shares. If, at the time of
      exercise, the Directors do not resolve to capitalise the reserves of the
      Company for this purpose then the adjustment under this rule 7.2 will be
      deemed not to have taken
place.

              


      

    

     

    
      
        	
                7.3

              	
                Notice

              


      

    

     

    
      The
Company
may notify Participants of any adjustment made under this
rule7.

    

     

    
      	
              8

            	
              Takeovers
      and restructurings

            


    

     

    
      	
              8.1

            	
              Takeover

            


    

     

    
      
        	
              	
                8.1.1

              	
                Where a person (or a
      group of persons acting in concert) obtains Control of the Company as a
      result of making an offer to acquire Shares, Options will be exchanged
      under rule 9 (Exchange of Options)
if:

              


      

    

     

    
      
        	
              	
                (i)

              	
                an
      offer to exchange Options is made and accepted by a Participant;
      or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                the
      Directors, with the consent of the Acquiring Company, decide before a
      person obtains Control that the Options will be automatically
      exchanged.

              


      

    

     

    
      
        	
              	
                8.1.2

              	
                To the extent that an
      Option is not exchanged under rule 9 (Exchange of Options), it may be
      exercised as set out in rule 8.1.4, but only to the extent determined
      under rule 8.1.3, and it lapses as to the
  balance.

              


      

    

     

    
      
        	
              	
                8.1.3

              	
                Where rule 8.1.2
      applies, an Option may be exercised to the following
    extent:

              


      

    

     

    
      
        	
              	
                (i)

              	
                that
      the Performance Condition has been satisfied (as determined by the
      Directors in the manner specified in the Performance Condition or in such
      manner as they consider reasonable) over the period from the start of the
      Performance Period until the date the person obtains Control;
      and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                reduced
      pro rata to reflect the number of days from the start of the Performance
      Period until the date the person obtains Control as a proportion of the
      number of days of the Performance
Period.

              


      

    

     

    
      
        
          	
                  8.1.4

                	
                  Where an Option becomes
      exercisable under rule 8.1.2, it may be exercised from the date the person
      making the offer to acquire Shares has obtained Control until the earlier
      of:

                


        

      

    

     

    
      
        	
              	
                (i)

              	
                the
      date 3 months after the date on which the person has obtained Control;
      and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                6
      weeks after the date on which a notice to acquire Shares under Section 981
      of the Companies Act 2006 or any other equivalent local legislation is
      first served.

              


      

    

     

    The
Option will lapse at the end of that period.

     

    
      
        
          	
                  8.2

                	
                  Schemeof
      arrangement

                


        

      

    

     

    
      
        	
              	
                8.2.1

              	
                When under Section 899
      of the Companies Act 2006 a court sanctions a compromise or arrangement in
      connection with the acquisition of Shares, Options will be exchanged under
      rule 9 (Exchange of Options)
if:

              


      

    

     

    
      
        	
              	
                (i)

              	
                an
      offer to exchange Options is made and accepted by a Participant;
      or

              


      

    

     

    
      
        	
              	
                      
                  (ii)

                

              	
                the
      Directors, with the consent of the Acquiring Company, decide before court
      sanction that the Options will be automatically
  exchanged.

              


      

    

     

    
      
        
          	
                	
                  8.2.2

                	
                  To the extent an Option
      is not exchanged under rule 9 (Exchange of Options), it may be exercised
      as set out in rule 8.2.4, but only to the extent determined under rule
      8.2.3 and lapses as to the balance.


                


        

      

    

     

    
      
        	
              	
                8.2.3

              	
                Where rule 8.2.2
      applies, an Option may be exercised to the following
    extent:

              


      

    

     

    
      
        	
              	
                (i)

              	
                that
      the Performance Condition has been satisfied (as determined by the
      Directors in the manner specified in the Performance Condition or in such
      manner as they consider reasonable) over the period from the start of the
      Performance Period until the date of court sanction;
  and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                reduced
      pro rata to reflect the number of days from the start of the Performance
      Period until the date of court sanction as a proportion of the number of
      days of the Performance
Period.

              


      

    

     

    
      
        	
              	
                8.2.4

              	
                Where an Option becomes
      exercisable under rule 8.2.2, it may be exercised within 6 months after
      the date of the court sanction. Any Option not so exercised will lapse at
      the end of that period.

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

      

         

        
          	350	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

     

    
      
        	
              	
                8.2.5

              	
                This rule also applies
      where there is an equivalent procedure to Section 899 of the Companies Act
      2006 under local legislation.

              


      

    

     

    
      
        	
                8.3

              	
                Demerger
      or other corporate event

              


      

    

     

    
      
        	
              	
                8.3.1

              	
                If the Directors become
      aware that the Company is or is expected to be affected by any demerger,
      distribution (other than an ordinary dividend) or other transaction not
      falling within rule 8.1 (Takeover), or rule 8.2 (Scheme of arrangement)
      which, in the opinion of the Directors would affect the current or future
      value of any Option, the Directors may allow an Option to be exercised for
      such period as they determine but only to the extent determined under rule
      8.3.2 and subject to any other conditions the Directors may decide to
      impose. The Option lapses as to the
balance.

              


      

    

     

    
      
        	
              	
                8.3.2

              	
                Where an Option becomes
      exercisable under rule 8.3.1, it may be exercised to the following
      extent:

              


      

    

     

    
      
        	
              	
                (i)

              	
                that
      the Performance Condition has been satisfied (as determined by the
      Directors in the manner specified in the Performance Condition or in such
      manner as they consider reasonable) over the period from the start of the
      Performance Period until the date determined by the Directors;
      and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                reduced
      pro rata to reflect the number of days from the start of the Performance
      Period until the date determined by the Directors as a proportion of the
      number of days of the Performance
Period.

              


      

    

     

    
      
        	
              	
                8.3.3

              	
                The Company will notify
      any Participant who is affected by the Directors exercising their
      discretion under this rule.

              


      

    

     

    
      
        	
                8.4

              	
                Directors

              


      

    

     

    In
this rule, “Directors” means those people who were members of the remuneration
committee of the Company immediately before the change of Control.

     

    
      
        	
                8.5

              	
                Overseas
      transfer

              


      

    

     

    If
a Participant is transferred to work in another country and, as a result of that
transfer he would:

     

    
      
        	
              	
                8.5.1

              	
                suffer a tax
      disadvantage in relation to his Options (this being shown to the
      satisfaction of the Directors);
or

              


      

    

     

    
      
        	
              	
                8.5.2

              	
                become subject to
      restrictions on his ability to exercise his Options or to hold or deal in
      the Shares or the proceeds of the sale of the Shares acquired on exercise
      because of the security laws or exchange control laws of the country to
      which he is transferred;

              


      

    

     

    then
if the Participant continues to hold an office or employment with a Member of
the Group, the Directors may decide that the Options will become exercisable, to
the extent they permit, on a date they choose before or after the transfer takes
effect. The Directors will decide whether any balance of the Option will
lapse.

     

    
      
        	
                9

              	
                Exchange
      of Options

              


      

    

     

    
      
        	
                9.1

              	
                Exchange

              


      

    

     

    Where
an Option is to be exchanged under rule 8 (Takeovers and restructurings), the
exchange will take place as soon as practicable after the relevant
event.

     

    
      
        
          	
                  9.2

                	
                  Exchange
      terms

                


        

      

    

     

    Where
a Participant is granted a new option in exchange for an existing Option, the
new option:

     

    
      
        	
              	
                9.2.1

              	
                must confer a right to
      acquire shares in the Acquiring Company or another body corporate
      determined by the Acquiring
Company;

              


      

    

     

    
      
        	
              	
                9.2.2

              	
                must be equivalent to
      the existing Option, subject to rule
9.2.4;

              


      

    

     

    
      
        	
              	
                9.2.3

              	
                is treated as having
      been acquired at the same time as the existing Option and, subject to rule
      9.2.4, is exercisable in the same manner and at the same
    time;

              


      

    

     

    
      
        	
              	
                9.2.4

              	
                must
    either:

              


      

    

     

    
      
        	
              	
                (i)

              	
                be
      subject to a performance condition which is, so far as possible,
      equivalent to any Performance Condition applying to the existing Option;
      or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                not
      be subject to any performance condition but be in respect of the number of
      shares which is equivalent to the number of Shares determined in
      accordance with rule 8.1.3 or rule 8.2.3 (as relevant), in which case the
      existing Option lapses as to the
balance;

              


      

    

     

    
      	
            	
              9.2.5

            	
              is governed by the Plan
      as if references to Shares were references to the shares over which the
      new option is granted and references to the Company were references to the
      Acquiring Company or the body corporate determined under rule
      9.2.1.

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

       

      
        	 	351
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

    


     

     

    
      
        	
                10

              	
                Exercise
      of Options

              


      

    

     

    
      
        	
                10.1

              	
                Exercise

              


      

    

     

    A
Participant can exercise his Option validly only in the way described in, and
subject to, this rule 10.

     

    
      
        	
                10.2

              	
                Part
      exercise

              


      

    

     

    
      
        	
              	
                10.2.1

              	
                Subject to any other
      restriction in the rules, an Option may be exercised in respect of all the
      Shares under the Option or only some of those
  Shares.

              


      

    

     

    
      
        	
              	
                10.2.2

              	
                If an Option is
      exercised in part, and the balance remains exercisable, the Directors must
      on the surrender of the relevant certificate issue a balance
      certificate.

              


      

    

     

    
      
        	
                10.3

              	
                Manner
      of exercise

              


      

    

     

    Options
must be exercised by notice in a form specified by the Company and delivered to
the Company or other duly appointed agent or by telephone, email or other
electronic means approved by the Company. The notice of exercise of the Option
must be completed, signed (in manuscript or in any other form that may be
specified by the Company) by the Participant or by his appointed agent, and must
be accompanied by:

     

    
      
        	
              	
                10.3.1

              	
                the relevant option
      certificate (if required by the Company);
and

              


      

    

     

    
      
        	
              	
                10.3.2

              	
                correct payment in full
      of the Option Price for the number of Shares being acquired or details of
      arrangements agreed between the Participant and the Company made for the
      payment of the Option Price for the number of Shares being
      acquired.

              


      

    

     

    
      
        	
                10.4

              	
                Option
      Exercise Date

              


      

    

     

    In
this rule 10, the “Option Exercise Date” will be the date of receipt by the
Company, or other duly appointed agent, of the documents and, if appropriate,
the payment referred to in rule 10.3.2. 

     

    However:

     

    
      
        	
              	
                10.4.1

              	
                if an option exercise
      notice is delivered before it has been ascertained whether the Performance
      Condition has been satisfied, the Option Exercise Date will be the date on
      which the satisfaction of the Performance Condition is ascertained, or the
      date on which the Performance Condition is waived;
  and

              


      

    

     

    
      
        	
              	
                10.4.2

              	
                if any Dealing
      Restriction, prohibits the exercise of Options, the date when the
      Participant is permitted to exercise an
Option.

              


      

    

     

    
      
        	
                10.5

              	
                Issue
      or transfer

              


      

    

     

    Subject
to rule 11.10 (Consents):

     

    
      
        	
              	
                10.5.1

              	
                Shares to be issued
      following the exercise of an Option will be issued within 30 days of the
      Option Exercise Date.

              


      

    

     

    
      
        	
              	
                10.5.2

              	
                If Shares are to be
      transferred, including transferred out of treasury, following the exercise
      of an Option, the Directors will procure this transfer within 30 days of
      the Option Exercise Date.

              


      

    

     

    
      
        	
                10.6

              	
                Rights
      attaching to Shares

              


      

    

     

    
      
        	
              	
                10.6.1

              	
                Shares issued on the
      exercise of an Option will rank equally in all respect with the Shares in
      issue on the date of allotment. They will not rank for any rights
      attaching to Shares by reference to a record date preceding the date of
      allotment.

              


      

    

     

    
      
        	
              	
                10.6.2

              	
                Where Shares are to be
      transferred, on the exercise of an Option, including transferred out of
      treasury, Participants will be entitled to all rights attaching to the
      Shares by reference to a record date on or after the transfer date. They
      will not be entitled to rights before that
date.

              


      

    

     

    
      
        	
                10.7

              	
                Alternative
      ways to satisfy Options

              


      

    

     

    The
Directors may at any time determine not to procure the transfer or issue of
Shares to a Participant who exercises his Option, but instead to pay to him
(subject to the withholding provisions in rule 11.8) a cash amount. This cash
amount must be equal to the amount by which the market value of the Shares in
respect of which the Option is exercised exceeds the Option Price.
Alternatively, the Directors may transfer or issue Shares to the value of that
cash amount. If the Directors so determine, the Participant need not pay the
Option Price or, if he has paid it, the Company will repay the Option Price to
him.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

      

         

        
          	352	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

     

    For
the purposes of this rule, “market value” means:

     

    
      
        	
              	
                10.7.1

              	
                the middle market
      quotation of a Share as derived from the Daily Official List of the London
      Stock Exchange on the Option Exercise Date (or the next Business Day if
      the Option Exercise Date is not a Business Day);
  or

              


      

    

     

    
      
        	
              	
                10.7.2

              	
                such other value as the
      Directors may, in their discretion,
determine.

              


      

    

     

    
      
        	
                11

              	
                General

              


      

    

     

    
      
        	
                11.1

              	
                Plan
      limits

              


      

    

     

    
      
        	
              	
                11.1.1

              	
                Meaning of
      allocate

              


      

    

     

    For
the purposes of this rule 11 shares are “allocated” if they have been issued or
may be issued for the purposes of satisfying an Option or other right to acquire
Shares.

     

    
      
        	
              	
                11.1.2

              	
                10% in 10 years
      limit

              


      

    

     

    The
number of Shares which may be allocated under the Plan on any day must not
exceed 10 per cent of the ordinary share capital of the Company in issue
immediately before that day, when added to the total number of Shares which have
been allocated in the previous 10 years under the Plan and any other employee
share plan operated by the Company.

     

    
      
        	
              	
                11.1.3

              	
                5% in 10 year
      limit

              


      

    

     

    The
number of Shares which may be allocated under the Plan on any day must not
exceed 5 per cent of the ordinary share capital of the Company in issue
immediately before that day, when added to the total number of Shares which have
been allocated in the previous 10 years under the Plan and any other
discretionary employee share plan operated by the Company.

     

    
      
        	
              	
                11.1.4

              	
                Exclusions

              


      

    

     

    Where
the right to acquire Shares is surrendered or lapses, the Shares concerned are
ignored when calculating the limits in this rule 11.

     

    
      
        	
                11.2

              	
                Directors’
      decisions final and binding

              


      

    

     

    The
decision of the Directors on the interpretation of the Plan or in any dispute
relating to an Option or matter relating to the Plan will be final and
conclusive.

     

    
      
        
          	
                  11.3

                	
                  Documents
      sent to shareholders

                


        

      

    

     

    The
Company may, at its discretion, send to Participants copies of any documents or
notices normally sent to the holders of its Shares at or around the same time as
issuing them to the holders of its Shares.

     

    
      
        	
                11.4

              	
                Costs

              


      

    

     

    The
Company may ask a Participant’s employer to bear the costs in respect of an
Option to that Participant.

     

    
      
        	
                11.5

              	
                Regulations

              


      

    

     

    The
Directors have the power from time to time to make or vary regulations for the
administration and operation of the Plan but these must be consistent with its
rules.

     

    
      
        	
                11.6

              	
                Terms
      of employment

              


      

    

     

    
      
        	
              	
                11.6.1

              	
                For the purposes of this
      rule, “Employee”
      means any person who is or will be eligible to be a Participant or any
      other person.

              


      

    

     

    
      
        	
              	
                11.6.2

              	
                This rule
      applies:

              


      

    

     

    
      
        	
              	
                (i)

              	
                whether
      the Company has full discretion in the operation of the Plan, or whether
      the Company could be regarded as being subject to any obligations in the
      operation of the Plan;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                during
      an Employee’s employment or employment relationship;
  and

              


      

    

     

    
      
        	
              	
                (iii)

              	
                after
      the termination of an Employee’s employment or employment relationship,
      whether the termination is lawful or
unlawful.

              


      

    

     

    
      
        	
              	
                11.6.3

              	
                Nothing in the rules or
      the operation of the Plan forms part of the contract of employment or
      employment relationship of an Employee. The rights and obligations arising
      from the employment relationship between the Employee and the Company are
      separate from, and are not affected by, the Plan. Participation in the
      Plan does not create any right to, or expectation of, continued employment
      or a continued employment
relationship.

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    

       

      
        	 	353
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    


    


     

    
      
        	
              	
                11.6.4

              	
                The grant of Options on
      a particular basis in any year does not create any right to or expectation
      of the grant of Options on the same basis, or at all, in any future
      year.

              


      

    

     

    
      
        	
              	
                11.6.5

              	
                No Employee is entitled
      to participate in the Plan, or be considered for participation in it, at a
      particular level or at all. Participation in one operation of the Plan
      does not imply any right to participate, or to be considered for
      participation in any later operation of the
  Plan.

              


      

    

     

    
      
        	
              	
                11.6.6

              	
                Without prejudice to an
      Employee’s right in respect of an Option subject to and in accordance with
      the express terms of the Plan and the Performance Condition, no Employee
      has any rights in respect of the exercise or omission to exercise any
      discretion, or the making or omission to make any decision, relating to
      the Option. Any and all discretions, decisions or omissions relating to
      the Option may operate to the disadvantage of the Employee, even if this
      could be regarded as capricious or unreasonable, or could be regarded as
      in breach of any implied term between the Employee and his employer,
      including any implied duty of trust and confidence. Any such implied term
      is excluded and overridden by this
rule.

              


      

    

     

    
      
        	
              	
                11.6.7

              	
                No Employee has any
      right to compensation for any loss in relation to the Plan,
      including:

              


      

    

     

    
      
        	
              	
                (i)

              	
                any
      loss or reduction of any rights or expectations under the Plan in any
      circumstances or for any reason (including lawful or unlawful termination
      of employment or the employment
relationship);

              


      

    

     

    
      
        	
              	
                (ii)

              	
                any
      exercise of a discretion or a decision taken in relation to an Option or
      to the Plan, or any failure to exercise a discretion or take a
      decision;

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      operation, suspension, termination or amendment of the
    Plan.

              


      

    

     

    
      
        	
              	
                11.6.8

              	
                Participation in the
      Plan is permitted only on the basis that the Participant accepts all the
      provisions of its rules, including in particular this rule. By
      participating in the Plan, an Employee waives all rights under the Plan,
      other than the right to acquire shares subject to and in accordance with
      the express terms of the Plan and the Performance Condition, in
      consideration for, and as a condition of, the grant of an Option under the
      Plan.

              


      

    

     

    
      
        	
              	
                11.6.9

              	
                Nothing in this Plan
      confers any benefit, right or expectation on a person who is not an
      Employee. No such third party has any rights under the Contracts (Rights
      of Third Parties) Act 1999 to enforce any term of this Plan. This does not
      affect any other right or remedy of a third party which may
      exist.

              


      

    

     

    
      
        	
              	
                11.6.10

              	
                Each of the provisions
      of this rule is entirely separate and independent from each of the other
      provisions. If any provision is found to be invalid then it will be deemed
      never to have been part of these rules and to the extent that it is
      possible to do so, this will not affect the validity or enforceability of
      any of the remaining
provisions.

              


      

    

     

    
      
        
          	
                  11.7

                	
                  Employee
      trust

                


        

      

    

     

    The
Company and any Subsidiary of the Company may provide money to the trustee of
any trust 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 permitted by Section 682 of the Companies Act
2006.

     

    
      
        	
                11.8

              	
                Withholding

              


      

    

     

    The
Company, Grantor, any employing company or trustee of any employee benefit trust
may withhold such amount and make such arrangements as it considers necessary to
meet any liability to taxation or social security contributions in respect of
Options. These arrangements may include the sale or reduction in number of any
Shares on behalf of a Participant. 

     

    
      
        	
                11.9

              	
                Data
      protection

              


      

    

     

    By
participating in the Plan the Participant consents to the holding and processing
of personal data provided by the Participant to any Member of the Group, trustee
or third party service provider for all purposes relating to the operation of
the Plan. These include, but are not limited to:

     

    
      
        	
              	
                11.9.1

              	
                administering and
      maintaining Participant
records;

              


      

    

     

    
      
        	
              	
                11.9.2

              	
                providing information to
      Members of the Group, trustees of any employee benefit trust, registrars,
      brokers or third party administrators of the
  Plan;

              


      

    

     

    
      
        	
              	
                11.9.3

              	
                providing information to
      future purchasers of the company or the business in which the Participant
      works;

              


      

    

     

    
      
        	
              	
                11.9.4

              	
                transferring information
      about the Participant to a country or territory outside the European
      Economic Area that may not provide the same statutory protection for the
      information as the Participant’s home
country.

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

       

      
        	354	 
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

    


     

    
      
        	
                11.10

              	
                Consents

              


      

    

     

    All
allotments, issues and transfers of Shares will be subject to any necessary
consents under any relevant enactments or regulations for the time being in
force in the United Kingdom or elsewhere. The Participant will be responsible
for complying with any requirements he needs to fulfil in order to obtain or
avoid the necessity for any such consent.

     

    
      
        	
                11.11

              	
                Articles
      of association

              


      

    

     

    Any
Shares acquired under the Plan are subject to the articles of association of the
Company from time to time in force.

     

    
      	
              11.12

            	
              Listing

            


    

     

    If
and so long as the Shares are listed and traded on the Official List of the UK
Listing Authority and trades on the London Stock Exchange, the Company will
apply for listing of any Shares issued under the Plan as soon as possible.


     

    
      
        	
                11.13

              	
                Notices

              


      

    

     

    
      
        
          	
                	
                  11.13.1

                	
                  Any notice or other
      document which has to be given to a person who is or will be eligible to
      be a Participant under or in connection with the Plan may
    be:

                


        

      

    

     

    
      
        	
              	
                (i)

              	
                delivered
      or sent by post to him at his home address according to the records of his
      employing company; or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                sent
      by e-mail or fax to any e-mail address or fax number which according to
      the records of his employing company is used by
  him;

              


      

    

     

    or
in either case such other address which the Company considers
appropriate.

     

    
      
        	
              	
                11.13.2

              	
                Any notice or other
      document which has to be given to the Company or other duly appointed
      agent under or in connection with the Plan may be delivered or sent by
      post to it at its registered office (or such other place as the Directors
      or duly appointed agent may from time to time decide and notify to
      Participants) or sent by e-mail or fax to any e-mail address or fax number
      notified to the Participant.

              


      

    

     

    
      
        	
              	
                11.13.3

              	
                Notices sent by post
      will be deemed to have been given on the second day after the date of
      posting. However, notices sent by or to a Participant who is working
      overseas will be deemed to have been given on the seventh day after the
      date of posting. Notices sent by e-mail or fax, in the absence of evidence
      to the contrary, will be deemed to have been received on the day after
      sending.

              


      

    

     

    
      
        	
                12

              	
                Changing
      the Plan and termination

              


      

    

     

    
      
        	
                12.1

              	
                Directors’
      powers

              


      

    

     

    Except
as described in the rest of this rule 12, the Directors may at any time change
the Plan in any way.

     

    
      
        	
                12.2

              	
                Shareholder
      approval

              


      

    

     

    
      
        	
              	
                12.2.1

              	
                Except as described in
      rule 12.2.2, the Company in general meeting must approve in advance by
      ordinary resolution any proposed change to the Plan to the advantage of
      present or future Participants, which relates to the
      following;

              


      

    

     

    
      
        	
              	
                (i)

              	
                the
      persons to or for whom Shares may be provided under the
    Plan;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                the
      limitations on the number of Shares which may be issued under the
      Plan;

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      individual limit for each Participant under the
  Plan;

              


      

    

     

    
      
        	
              	
                (iv)

              	
                the
      determination of the Option
Price;

              


      

    

     

    
      
        	
              	
                (v)

              	
                any
      rights attaching to the Options and the
Shares;

              


      

    

     

    
      
        	
              	
                (vi)

              	
                the
      rights of a Participant in the event of a capitalisation issue, rights
      issue, sub-division or consolidation of shares or reduction or any other
      variation of capital of the
Company;

              


      

    

     

    
      
        	
              	
                (vii)

              	
                the
      terms of this rule 12.2.1.

              


      

    

     

    
      
        	
              	
                12.2.2

              	
                The Directors can change
      the Plan and need not obtain the approval of the Company in general
      meeting for any minor
changes:

              


      

    

     

    
      
        	
              	
                (i)

              	
                to
      benefit the administration of the
Plan;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                to
      comply with or take account of the provisions of any proposed or existing
      legislation;

              


      

    

     

    
      
        	
              	
                (iii)

              	
                to
      take account of any changes to legislation;
or

              


      

    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      

         

        
          	 	355
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      



     

    
      
        	
              	
                (iv)

              	
                to
      obtain or maintain favourable tax, exchange control or regulatory
      treatment of the Company, any Subsidiary or any present or future
      Participant.

              


      

    

     

    
      
        	
                12.3

              	
                Notice

              


      

    

     

    The
Directors may give written notice of any changes made to any Participant
affected.

     

    
      
        	
                12.4

              	
                Governing
      law and jurisdiction

              


      

    

     

    English
law governs the Plan and all Options and their construction. The English Courts
have non-exclusive jurisdiction in respect of disputes arising under or in
connection with the Plan or any Option.

     

    
      
        	
                13

              	
                Definitions

              


      

    

     

    
      
        	
                13.1

              	
                Meaning
      of words used

              


      

    

     

    In
these rules:

     

    “Acquiring Company” means a
person who obtains Control of the Company;

     

    “Approved Option” means an
Option granted under Schedule 1; 

     

    “Business Day” means a day on
which the London Stock Exchange (or, if relevant and if the Directors determine,
any stock exchange nominated by the Directors on which the Shares are traded) is
open for the transaction of business;

     

    “Company” means Aviva
plc;

     

    “Control” has the meaning given
to it by Section 995 of the Income Tax Act 2007;

     

    “Date of Grant” means the date
which the Directors set for the grant of an Option;

     

    “Dealing Restrictions” means
restrictions imposed by statute, order, regulation or Governmental directive or
by the Model Code, or any code adopted by the Company to comply with share
dealing regulations;

     

    “Directors” means, subject to
rule 8.4 (Directors), the board of directors of the Company or a duly authorised
committee;

     

    “Executive Approved Options”
means an Approved Option granted under Schedule 2; 

     

    “Expiry Date” means the 5th
anniversary of shareholder approval of the Plan;

     

    “Grantor” means the entity
which is granting Options under the Plan;

     

    “London Stock Exchange” means
London Stock Exchange plc;

     

    “Member of the Group”
means:

     

    
      
        	
              	
                (i)

              	
                the
      Company;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                its
      Subsidiaries from time to time;
and

              


      

    

     

    
      
        	
              	
                (iii)

              	
                any
      other company which is associated with the Company and is so designated by
      the Directors;

              


      

    

     

    “Option” means a right to
acquire Shares granted under the Plan;

     

    “Option Period” means a period
starting on the Date of Grant and ending at the end of the day before the 10th
anniversary of the Date of Grant, or such shorter period as may be specified on
the grant of an Option;

     

    “Participant” means a person
holding an Option or his personal representatives;

     

    “Performance Condition” means
any performance condition imposed under rule 1.4 (Performance
Conditions);

     

    “Performance Period” means the
period in respect of which a Performance Condition is to be
satisfied;

     

    “Plan” means these rules known
as “the Aviva Executive Share Option Plan 2005” as changed from time to
time;

     

    “Shares” means fully paid
ordinary shares in the capital of the Company; and

     

    “Subsidiary” means a
company which is a subsidiary of the Company within the meaning of Section 1159
of the Companies Act 2006.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

      
        

           

          
            	356	 
	
                    Aviva plc

                    Annual Report on Form 20-F 2009

                  	Exhibits
continued


          

           

        

      

       

    


    Schedule
1

    United
Kingdom – Approved Options

     

    An
Option may be granted as an Approved Option. If the Grantor decides to grant
Approved Options, the main rules will apply to the Approved Options, subject to
this Schedule 1.

     

    The
terms of Approved Options have been approved by HMRC under Schedule 4 of ITEPA
under reference number X105430.

     

    
      
        	
                1

              	
                Eligibility
      to be granted Approved
Options

              


      

    

     

    Approved
Options cannot be granted to anybody who is:

     

    
      
        	
              	
                (i)

              	
                excluded
      from participation because of paragraph 9 of ITEPA  (material
      interest provisions); or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                a
      director who is required to work less than 25 hours a week (excluding meal
      breaks) for the Company.

              


      

    

     

    
      
        	
                2

              	
                Shares
      subject to an Approved Option

              


      

    

     

    The
Shares subject to an Approved Option must satisfy paragraphs 16 to 20 of ITEPA.
If the Shares cease to satisfy paragraphs 16 to 20 of ITEPA and the Directors
notify HMRC that they wish Schedule 1 to be disapproved, the definition of the
Option will continue in effect but the Option will cease to be an Approved
Option and will be treated, for the purposes of the rules, as an Option granted
under the main rules. 

     

    
      
        	
                3

              	
                Performance
      Condition

              


      

    

     

    The
words “if appropriate” in rule 1.4 are deleted and replaced with “that a changed
Performance Condition would be fairer and would be no more difficult to
satisfy”.

     

    
      
        	
                4

              	
                Other
      conditions

              


      

    

     

    The
words “or in any way they see fit” in rule 1.5 are deleted for the purpose of
this Schedule 1. 

     

    
      
        	
                5

              	
                HMRC
      limit

              


      

    

     

    The
Grantor must not grant an Approved Option to an individual which would cause the
aggregate market value of: 

     

    
      
        	
              	
                (i)

              	
                the
      Shares subject to that Approved Option;
and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                the
      Shares which he may acquire on exercising other Approved Options;
      and

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      shares which he may acquire on exercising his options under any other HMRC
      approved discretionary share plan established by the Company or by any of
      its associated companies (as defined in paragraph 35 of
      ITEPA),

              


      

    

     

    to
exceed the amount permitted under paragraph 6(1) of ITEPA (currently
£30,000).  For the purposes of this paragraph, market value is
calculated as at the date of grant of the options as described in the relevant
plan rules.

     

    If
the Grantor tries to grant an Approved Option which is inconsistent with this
paragraph 3, the Approved Option will be limited and will take effect from the
Date of Grant on a basis consistent with the provisions of this paragraph
3.

     

    
      
        	
                6

              	
                Dividend
      Equivalents

              


      

    

     

    Rules
2.1.6 and 2.3 shall not apply to Approved Options.

     

    
      
        	
                7

              	
                Transferring
      Approved Options

              


      

    

     

    
      
        	
                7.1

              	
                An Approved Option
      cannot be transferred, assigned or otherwise disposed of, except on the
      transmission of the Approved Option on the death of a Participant to his
      personal representatives.

              


      

    

     

    
      
        	
                7.2

              	
                Rule 2.4.2 does not
      apply in relation to Approved
Options.

              


      

    

     

    
      
        	
                8

              	
                Market
      value

              


      

    

     

    Rule
3.2.2 shall be amended by adding “and agreed in advance with HMRC and Assets
Valuation”.

     

    
      
        	
                9

              	
                Variations
      in share capital, demergers and special
  distributions

              


      

    

     

    
      
        	
                9.1

              	
                Adjustments may not be
      made to Approved Options under rule 7 where there is a demerger (in
      whatever form), an exempt distribution by virtue of Section 213 of the
      Income and Corporation Taxes Act 1988 or a special dividend or
      distribution.

              


      

      
         

        
          	
                  9.2

                	
                  No adjustment of
      Approved Options may be made under rule 7 without the prior approval of
      HMRC.

                


        

      

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


    

    

       

      
        	 	357
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

    


     

     

    
      
        	
                10

              	
                Restrictions
      on exercise of an Approved
Option

              


      

    

     

    A
Participant may not exercise an Approved Option while he is excluded from being
granted an Approved Option under paragraph 9 of ITEPA (material interest
provisions).

     

    
      
        	
                11

              	
                Cessation
      of employment

              


      

    

     

    
      
        	
                11.1

              	
                Specified
      Age and redundancy

              


      

    

     

    For
the purposes of paragraph 35A of ITEPA, the specified age is 55 and redundancy,
for the purposes of rule 6.1.1(v), has the meaning given to that term by the
Employment Rights Act 1996.

     

    
      
        	
                11.2

              	
                Retirement

              


      

    

     

    Rule
6.1.1(i) is replaced with “retirement at normal retirement age or early
retirement with the agreement of the Company.”

     

    
      
        	
                11.3

              	
                Death

              


      

    

     

    If
the Participant dies, the Approved Option may be exercised by his personal
representatives within 12 months after his death, after which it will
lapse.

     

    
      
        	
                12

              	
                Discretion
      on exercise and lapse of Approved
Options

              


      

    

     

    If
the Directors exercise any discretion under rule 5, 6 or 8 in relation to an
Approved Option, they must do so fairly and reasonably.

     

    
      
        	
                13

              	
                Exchange
      of Approved Options

              


      

    

     

    Where
rule 8.1.1 or 8.2.1 applies to the exchange of an Approved Option, the
Participant will be deemed to have agreed to the exchange.

     

    
      
        	
                14

              	
                Demerger
      or other corporate event

              


      

    

     

    In
rule 8.3.1 the words “and subject to any other condition the Directors may
decide to impose” are disapplied in relation to Approved Options.

     

    
      
        	
                15

              	
                Exchange
      of Approved Options

              


      

    

     

    
      
        	
                15.1

              	
                If HMRC approval of the
      terms of Approved Options is to be maintained, Approved Options can only
      be exchanged, as described in rule 9, if the Acquiring
      Company:

              


      

    

     

    
      
        	
              	
                15.1.1

              	
                obtains Control of the
      Company as a result of making a general offer to
  acquire:

              


      

    

     

    
      
        	
              	
                (i)

              	
                the
      whole of the issued ordinary share capital of the Company (other than that
      which is already owned by it and its subsidiary or holding company) made
      on a condition such that, if satisfied, the Acquiring Company will have
      Control of the Company; or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                all
      the Shares (or all those Shares not already owned by the Acquiring Company
      or its subsidiary or holding company);
or

              


      

    

     

    
      
        	
              	
                15.1.2

              	
                obtains Control of the
      Company under a compromise or arrangement sanctioned by the court under
      Section 899 of the Companies Act 2006 or other local sanction procedure
      which HMRC agrees is equivalent;
or

              


      

    

     

    
      
        	
              	
                15.1.3

              	
                becomes bound or
      entitled to acquire Shares under Sections 979 to 982 of the Companies Act
      2006 or other local legislation which HMRC agrees is
      equivalent.

              


      

    

     

    
      
        	
                15.2

              	
                Approved Options must be
      exchanged within the period referred to in paragraph 26(2) of ITEPA and
      with the agreement of the company offering the
  exchange.

              


      

    

     

    
      
        	
                15.3

              	
                The new option will be
      in respect of shares which satisfy the conditions of paragraph 27(4) of
      ITEPA, in a body corporate falling within paragraph 16(b) or (c) of
      ITEPA).

              


      

    

     

    
      
        	
                16

              	
                Alternative
      ways to satisfy Options

              


      

    

     

    Rule
10.7 does not apply to Approved Options.

    
       

      
        
          	
                  17

                	
                  Withholding

                


        

      

       

      In
rule 11.8, the last sentence “These arrangements may include the sale or
reduction in number of any Shares on behalf of a Participant.” is deleted and
replaced with “These arrangements may include the sale of any Shares acquired on
exercise, unless the Participant discharges any liability that may arise
himself”.

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      

         

        
          	358	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

      
 

    

    
      
        	
                18

              	
                Changing
      the terms of Approved Options

              


      

    

     

    
      
        	
                18.1

              	
                The Directors need not
      obtain the approval of the Company in general meeting for any minor
      changes which are necessary or desirable in order to obtain or maintain
      HMRC approval for the terms of Approved Options under ITEPA any other
      enactment.

              


      

    

     

    
      
        	
                18.2

              	
                If HMRC approval of
      Schedule 1 is to be maintained, any change to a key feature of Approved
      Options after the Plan (as constituted under this Schedule 1) has been
      approved under ITEPA will only have effect when it is approved by HMRC. A
      “key feature” is any provision necessary to meet the requirements of
      ITEPA.

              


      

    

     

    
      
        	
                19

              	
                Definitions

              


      

    

     

    “ITEPA” means Schedule 4 to the
Income Tax (Earnings and Pensions) Act 2003;

     

    “Subsidiary” must be under the
Control of the Company.

     

     

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      

         

        
          	 	359
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

      


    

     

    Schedule
2
Executive
Approved Options

     

    An
Option may be granted as an Executive Approved Option. If the Grantor decides to
grant Executive Approved Options, the main rules will apply to the Executive
Approved Options, subject to this Schedule 2.

     

    The
terms of Executive Approved Options have been approved by HMRC under Schedule 4
of ITEPA under reference number X105541.

     

    
      	
              1

            	
              Eligibility
      to be granted Executive Approved
Options

            


    

     

    Executive
Approved Options cannot be granted to anybody who is:

     

    
      
        	
              	
                (i)

              	
                excluded
      from participation because of paragraph 9 of ITEPA  (material
      interest provisions); or

              


      

    

     

    
      
        	
              	
                (ii)

              	
                a
      director who is required to work less than 25 hours a week (excluding meal
      breaks) for the Company.

              


      

    

     

    
      
        
          	
                  2

                	
                  Grant
      of Executive Approved 
Options

                


        

      

    

     

    On
the grant of an Executive Approved Option, the Directors will determine that an
Executive Approved Option will be subject to a condition set by the Directors
under rule 1.5 (the ‘Condition’) and which will be
applicable to Executive Approved Options only.

     

    
      
        	
                3

              	
                Shares
      subject to an Executive Approved
Option

              


      

    

     

    The
Shares subject to an Executive Approved Option must satisfy paragraphs 16 to 20
of ITEPA. If the Shares cease to satisfy paragraphs 16 to 20 of ITEPA and the
Directors notify HMRC that they wish Schedule 2 to be disapproved, the
definition of the Option will continue in effect but the Option will cease to be
an Executive Approved Option and will be treated, for the purposes of the rules,
as an Option granted under the main rules. 

     

    
      
        
          	
                  4

                	
                  Performance
      Condition

                


        

      

    

     

    The
words “if appropriate” in rule 1.4 are deleted and replaced with “that a changed
Performance Condition would be fairer and would be no more difficult to
satisfy”.

     

    
      
        	
                5

              	
                Other
      conditions

              


      

    

     

    The
words “or in any way they see fit” in rule 1.5 are deleted for the purpose of
this Schedule 2. 

     

    
      
        	
                6

              	
                HMRC
      limit

              


      

    

     

    The
Grantor must not grant an Executive Approved Option to an individual which would
cause the aggregate market value of: 

     

    
      
        	
              	
                (ii)

              	
                the
      Shares subject to that Executive Approved Option;
  and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                the
      Shares which he may acquire on exercising other Executive Approved
      Options; and

              


      

    

     

    
      
        	
              	
                (iii)

              	
                the
      shares which he may acquire on exercising his options under any other HMRC
      approved discretionary share plan established by the Company or by any of
      its associated companies (as defined in paragraph 35 of
      ITEPA),

              


      

    

     

    to
exceed the amount permitted under paragraph 6(1) of ITEPA (currently
£30,000).  For the purposes of this paragraph, market value is
calculated as at the date of grant of the options as described in the relevant
plan rules.

     

    If
the Grantor tries to grant an Executive Approved Option which is inconsistent
with this paragraph 6, the Executive Approved Option will be limited and will
take effect from the Date of Grant on a basis consistent with the provisions of
this paragraph 6.

     

    
      
        	
                7

              	
                Dividend
      Equivalents

              


      

    

     

    Rules
2.1.6 and 2.3 of the Plan shall not apply to Executive Approved
Options.

     

    
      
        	
                8

              	
                Transferring
      Executive Approved Options

              


      

    

     

    
      
        	
                8.1

              	
                An Executive Approved
      Option cannot be transferred, assigned or otherwise disposed of, except on
      the transmission of the Executive Approved Option on the death of a
      Participant to his personal
representatives.

              


      

    

     

    
      
        	
                8.2

              	
                Rule 2.4.2 does not
      apply in relation to Executive Approved
Options.

              


      

    

     

    
      	
              9

            	
              Market
      value

            


    

     

    Rule
3.2.2 shall be amended by adding “and agreed in advance with HMRC Shares and
Assets Valuation”.

     
 

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      

         

        
          	360	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      



    

    

    
      
        	
                10

              	
                Variations
      in share capital, demergers and special
  distributions

              


      

    

     

    
      
        	
                10.1

              	
                Adjustments may not be
      made to Executive Approved Options under rule 7 where there is a demerger
      (in whatever form), an exempt distribution by virtue of Section 213 of the
      Income and Corporation Taxes Act 1988 or a special dividend or
      distribution.

              


      

    

     

    
      
        	
                10.2

              	
                No adjustment of
      Executive Approved Options may be made under rule 7 without the prior
      approval of HMRC.

              


      

    

     

    
      
        	
                11

              	
                Restrictions
      on exercise of an Executive Approved
Option

              


      

    

     

    A
Participant may not exercise an Executive Approved Option while he is excluded
from being granted an Executive Approved Option under paragraph 9 of ITEPA
(material interest provisions).

     

    
      
        	
                12

              	
                Cessation
      of employment

              


      

    

     

    
      
        	
                12.1

              	
                Good
      leavers

              


      

    

     

    If
the Option Holder ceases to be an employee or director of any Member of the
Group in circumstances in which rule 6.1.1 applies, the Executive Approved
Option will neither become exercisable nor lapse as described in rule 6 but will
continue in effect until it becomes exercisable in accordance with this Schedule
2 or lapses. For the avoidance of doubt, the Condition will continue to
apply.

     

    
      
        	
                12.2

              	
                Specified
      Age and redundancy

              


      

    

     

    For
the purposes of paragraph 35A of ITEPA, the specified age is 55 and redundancy,
for the purposes of rule 6.1.1(v), has the meaning given to that term by the
Employment Rights Act 1996.

     

    
      
        	
                12.3

              	
                Retirement

              


      

    

     

    Rule
6.1.1(i) is replaced with “retirement at normal retirement age or early
retirement with the agreement of the Company.”

     

    
      
        	
                12.4

              	
                Death

              


      

    

     

    If
the Participant dies, the Executive Approved Option may be exercised by his
personal representatives within 12 months after his death, after which it will
lapse.

     

    
      
        	
                13

              	
                Exercise
      of Executive Approved Options

              


      

    

     

    
      
        	
                13.1

              	
                The Executive Approved
      Option will only be exercisable in the circumstances and to the extent
      described in this Schedule 2 and the
Condition.

              


      

    

     

    
      
        	
                13.2

              	
                The “Executive Approved Option Exercise Date”
      is the latest of:

              


      

    

     

    
      
        	
              	
                13.2.1

              	
                the date on which the
      Directors determine whether and to what extent the Condition has been
      satisfied (which the Directors will do as soon as reasonably practicable
      after the end of the period over which the Condition is
      tested);

              


      

    

     

    
      
        	
              	
                13.2.2

              	
                the third anniversary of
      the Date of Grant; and

              


      

    

     

    
      
        	
              	
                13.2.3

              	
                if relevant, a date
      determined by the Directors which is as soon as reasonably practicable
      after the first date on which exercise of the Executive Approved Option is
      not prohibited by any Dealing
Restriction.

              


      

    

     

    
      
        	
                13.3

              	
                Subject to paragraphs
      13.4 and 13.6, the Executive Approved Option will be exercised to the
      extent described in the Condition with effect from the Executive Approved
      Option Exercise Date. 

              


      

    

     

    
      
        	
                13.4

              	
                Unless the Participant
      notifies the Company in writing before the Executive Approved Option
      Exercise Date that he wishes to fund the Option Price himself, the
      following will apply:

              


      

    

     

    
      
        	
              	
                13.4.1

              	
                The Participant promises
      to pay the Option Price payable to exercise the Executive Approved Option
      to the relevant extent.

              


      

    

     

    
      
        	
              	
                13.4.2

              	
                The Participant
      authorises the Company or any other grantor of the Option to sell, on
      exercise, as many of the Shares in respect of which he is entitled to
      exercise the Executive Approved Option as may be necessary to raise
      proceeds equal to the Option Price and any applicable share dealing costs
      or other costs of sale.

              


      

    

     

    
      
        	
              	
                13.4.3

              	
                The Participant
      authorises those proceeds to be retained by or paid to the Company or
      other grantor in satisfaction of the Option Price and share dealing costs
      and other costs of sale.

              


      

    

     

    
      	
            	
              13.4.4

            	
              The Executive Approved
      Option will be exercised automatically without any further action by the
      Option Holder. However, if it is not possible to arrange for the sale of
      Shares as set out in paragraph 13.4.2 because the anticipated proceeds of
      sale would not be sufficient to fund the Option Price, the Executive
      Approved Option will not be
  exercised.  

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    

       

      
        	 	361
	
                Aviva plc

                Annual Report on Form 20-F 2009

              	Exhibits
continued


      

       

    

    


     

    
      
        	
                13.5

              	
                If the Participant
      notifies that he wishes to fund the Option Price himself as described in
      paragraph 13.4, his Executive Approved Option will only be exercised
      if:

              


      

    

     

    
      
        	
              	
                13.5.1

              	
                he pays the Option Price
      to the Company or other grantor in cleared funds by no later than the
      Business Day immediately preceding the Executive Approved Option Exercise
      Date; and

              


      

    

     

    
      
        	
              	
                13.5.2

              	
                the Market Value of a
      Share on the Executive Approved Option Exercise Date is more than the
      Option Price.

              


      

    

     

    
      
        	
                13.6

              	
                Unless the Participant
      directs otherwise, an Executive Approved Option will not be exercised if a
      liability to income tax for the Option Holder would arise on the
      exercise.

              


      

    

     

    
      
        
          	
                  14

                	
                  Lapse
      of Executive Approved
Option

                


        

      

    

     

    To
the extent it has not been exercised or lapsed earlier under any other provision
of the rules, the Executive Approved Option will lapse on the Business Day
following the Executive Approved Option Exercise Date or on any earlier date set
out in the Condition.

     

    
      
        	
                15

              	
                Discretion
      on exercise and lapse of Executive Approved
  Options

              


      

    

     

    If
the Directors exercise any discretion under rule 5, 6 or 8 in relation to an
Executive Approved Option, they must do so fairly and reasonably.

     

    
      
        	
                16

              	
                Takeovers
      and restructurings

              


      

    

     

    
      
        	
                16.1

              	
                If an Executive Approved
      Option becomes exercisable by virtue of rules 8.1, 8.2, 8.3 or 8.5 and
      

              


      

    

     

    
      
        	
              	
                16.1.1

              	
                the date on which the
      Executive Approved Option becomes exercisable is on or after the third
      anniversary of the Date of Grant;
or

              


      

    

     

    
      
        	
              	
                16.1.2

              	
                no liability to income
      tax would arise on exercise of the Option on that date by virtue of
      section 524 of ITEPA (which allows for exercise of options within six
      months of ceasing to be an employee by virtue of injury, disability,
      redundancy, retirement at or after the Specified
  Age);

              


      

    

     

    paragraph
13 will apply as if that date were the Executive Approved Option Exercise Date.
For the avoidance of doubt, the Condition will continue to apply.

     

    
      
        	
                16.2

              	
                If an Executive Approved
      Option would become exercisable by virtue of the rules mentioned in
      paragraph 16.1 but the other conditions specified above in paragraphs
      16.1.1 and 16.1.2 are not met, the Executive Approved Option will lapse on
      the date on which it would otherwise have become exercisable (except to
      the extent it is exchanged under rule
9).

              


      

    

     

    
      
        	
                16.3

              	
                If an Executive Approved
      Option is exchanged under rule 9, the Condition will apply to the new
      option.

              


      

    

     

    
      
        	
                17

              	
                Demerger
      or other corporate event

              


      

    

     

    In
rule 8.3.1 the words “and subject to any other condition the Directors may
decide to impose” are disapplied in relation to Executive Approved
Options.

     

    
      
        	
                18

              	
                Exchange
      of Executive Approved Options

              


      

    

     

    
      
        	
                18.1

              	
                Where rule 8.1.1 or
      8.2.1 applies to the exchange of an Executive Approved Option, the
      Participant will be deemed to have agreed to the
  exchange.

              


      

    

     

    
      
        
          	
                  18.2

                	
                   If HMRC approval
      of the terms of Executive Approved Options is to be maintained, Executive
      Approved Options can only be exchanged, as described in rule 9, if the
      Acquiring Company:

                


        

      

    

    
       

      
        
          	
                	
                  18.2.1

                	
                  obtains Control of the
      Company as a result of making a general offer to
  acquire:

                


        

      

       

      
        
          	
                	
                  (i)

                	
                  the
      whole of the issued ordinary share capital of the Company (other than that
      which is already owned by it and its subsidiary or holding company) made
      on a condition such that, if satisfied, the Acquiring Company will have
      Control of the Company; or

                


        

      

       

      
        
          	
                	
                  (ii)

                	
                  all
      the Shares (or all those Shares not already owned by the Acquiring Company
      or its subsidiary or holding company);
or

                


        

      

       

      
        
          	
                	
                  18.2.2

                	
                  obtains Control of the
      Company under a compromise or arrangement sanctioned by the court under
      Section 899 of the Companies Act 2006 or other local sanction procedure
      which HMRC agrees is equivalent;
or

                


        

      

       

      
        
          	
                	
                  18.2.3

                	
                  becomes bound or
      entitled to acquire Shares under Sections 979 to 982 of the Companies Act
      2006 or other local legislation which HMRC agrees is
      equivalent.

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      

         

        
          	362	 
	
                  Aviva plc

                  Annual Report on Form 20-F 2009

                	Exhibits
continued


        

         

      

    

    


     

    
      
        	
                18.3

              	
                Executive Approved
      Options must be exchanged within the period referred to in paragraph 26(2)
      of ITEPA and with the agreement of the company offering the
      exchange.

              


      

    

     

    
      
        	
                18.4

              	
                The new option will be
      in respect of shares which satisfy the conditions of paragraph 27(4) of
      ITEPA, in a body corporate falling within paragraph 16(b) or (c) of
      ITEPA).

              


      

    

     

    
      
        	
                19

              	
                Alternative
      ways to satisfy Options

              


      

    

     

    Rule
10.7 does not apply to Executive Approved Options.

     

    
      
        	
                20

              	
                Withholding

              


      

    

     

    In
rule 11.8, the last sentence “These arrangements may include the sale or
reduction in number of any Shares on behalf of a Participant.” is deleted and
replaced with “These arrangements may include the sale of any Shares acquired on
exercise, unless the Participant discharges any liability that may arise
himself”.

     

    
      
        	
                21

              	
                Changing
      the terms of Executive Approved
Options

              


      

    

     

    
      
        	
                21.1

              	
                The Directors need not
      obtain the approval of the Company in general meeting for any minor
      changes which are necessary or desirable in order to obtain or maintain
      HMRC approval for the terms of Executive Approved Options under ITEPA any
      other enactment.

              


      

    

     

    
      
        	
                21.2

              	
                If HMRC approval of
      Schedule 2 is to be maintained, any change to a key feature of Executive
      Approved Options after the Plan (as constituted under this Schedule 2) has
      been approved under ITEPA will only have effect when it is approved by
      HMRC. A “key feature” is any provision necessary to meet the requirements
      of ITEPA.

              


      

    

     

    
      
        	
                22

              	
                Definitions

              


      

    

     

    “ITEPA” means Schedule 4 to the
Income Tax (Earnings and Pensions) Act 2003;

     

    “Subsidiary” must be under the
Control of the Company.