NDS GROUP PLC


                                  RULES OF THE
                                    NDS 2006
                            LONG-TERM INCENTIVE PLAN




               Adopted by the Board of Directors on 7 August 2006
                   Approved by shareholders on 30 October 2006




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CONTENTS

Rule                                                                        Page

1.    Definitions and interpretation ........................................  1
2.    How the Plan will operate .............................................  1
3.    Limit on the number of Shares which can be issued and individual
      limit on participation ................................................  3
4.    Rights in relation to Shares under Awards .............................  4
5.    Vesting of Awards .....................................................  5
6.    Lapse of Awards .......................................................  6
7.    Change of Control - General offer or scheme of arrangement ............  7
8.    Consequences of vesting of Awards .....................................  8
9.    Manner of exercise of an Option .......................................  9
10.   Adjustment of Awards .................................................. 11
11.   Exchange of Awards .................................................... 11
12.   Ranking of Shares ..................................................... 12
13.   Withholding for tax ................................................... 12
14.   Administration ........................................................ 12
15.   Amending the Plan ..................................................... 13
16.   General ............................................................... 14
17.   Data protection ....................................................... 16
18.   Governing law ......................................................... 16

Appendix

1.    Definitions ........................................................... 17
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                 RULES OF THE NDS 2006 LONG-TERM INCENTIVE PLAN

1.    DEFINITIONS AND INTERPRETATION

1.1   Definitions

      The words and expressions used in this Plan which have capital letters
      have the meanings set out in the appendix to the Rules.

1.2   Interpretation

      The headings in the Rules are for convenience and should be ignored when
      construing them. Unless the context otherwise requires, words in the
      singular include the plural and vice versa and words importing either
      gender include both genders. Reference in the Rules to any statutory
      provisions is to those provisions as amended, extended or re-enacted from
      time to time, and includes any regulations or other subordinate
      legislation made under them.

2.    HOW THE PLAN WILL OPERATE

2.1   Eligible Employees and Awards

      The Board may grant an Award to any Eligible Employee it selects and will
      determine the type of Award to be granted, the number of Shares subject to
      the Award, the Grantor and the terms and conditions (not inconsistent with
      these Rules) of the Award. The grant of an Award to an Eligible Employee
      will not, for that Employee, create any right to or the expectation of the
      grant of a subsequent Award.

2.2   How Awards are granted

      The Grantor will grant an Award so that it constitutes a binding contract
      between the Participant and the Grantor and in a form that indicates to
      the Participant what type of Award the Award is (and if the Award is an
      Option whether, if appropriate, Rule 9.4 or 9.5 will apply to that Option
      from the Date of Grant). If an Award is granted by deed, a single deed of
      grant may be executed in favour of any number of Participants. There will
      be no payment for the grant of an Award. The grant of an Award will be
      subject to the Rules and to obtaining any approval or consent required
      under any applicable regulations or enactments.

2.3   When an Award may be granted

      Awards may only be granted:

      (a)   within 42 days following the announcement by the Company of its
            results for any period; or

      (b)   at any other time that the Board considers that exceptional
            circumstances exist.

      An Award may not be granted to an Eligible Employee when the Company is
      prohibited from granting Awards under any regulations or enactments
      applicable to it or the Eligible Employee.


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2.4   Performance target(s)

      The vesting of an Award may be made subject to the satisfaction of any
      performance target selected by the Board; provided that, in the case of an
      Award that is intended to qualify for the Section 162(m) Exception, the
      performance target selected by the Board will be selected from among the
      Section 162(m) Performance Targets. If vesting of an Award is made subject
      to a performance target, the performance target must be measured over at
      least one year. The vesting of an Award can also be subject to any
      additional terms and conditions that the Board considers appropriate. Any
      performance target and any additional terms and conditions to which an
      Award is subject will be specified at the Date of Grant. The Board will
      have discretion to decide whether and to what extent any performance
      target to which an Award is subject has been met. If an event occurs which
      causes the Board, acting fairly and reasonably, to believe that a
      performance target is no longer appropriate, it can amend or waive the
      performance target accordingly.

2.5   Awards personal to Participants

      An Award may not, nor may any rights in respect of it, be sold,
      transferred, assigned, charged or otherwise encumbered or disposed of to
      any person, other than on a Participant's death when an Award may be
      transmitted to the Participant's personal representatives.

2.6   Social security contributions

      The Company may require an Eligible Employee to enter into an agreement
      under paragraph 3A of Schedule 1 to the Social Security Contributions and
      Benefits Act 1992 (as amended by the National Insurance Contributions and
      Statutory Payments Act 2004) or to make an election under paragraph 3B of
      Schedule 1 to that Act in relation to any secondary class 1 National
      Insurance contributions arising in respect of an Award.

2.7   Option Price

      (a)   Subject to Rule 2.7(b) with respect to Incentive Stock Options, the
            Board will decide the Option Price of an Option which will be stated
            at the Date of Grant. The Option Price cannot be less than the
            higher of:

            (i)   the Market Value of a Share; and

            (ii)  the nominal value of a Share if the Shares are to be
                  subscribed,

            but subject to any adjustment under Rule 10.

            The Option Price may not be determined on the basis of the Market
            Value of a Share on a day which is earlier than the first trading
            day of the periods referred to in Rules 2.3(a) or 2.3(b).

      (b)   At the time of its grant the Board may designate that an Option will
            be an Incentive Stock Option. Any Option designated as an Incentive
            Stock Option:

            (i)   will have an Option Price that is (1) not less than 100% of
                  the Market Value of a Share on the Date of Grant; or (2) in
                  the case of a 10% stock holder, not less than 110% of the
                  Market Value of a Share on the Date of Grant;


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            (ii)  will not be exercisable after the expiration of 10 years from
                  its Date of Grant and will be subject to earlier lapse under
                  the Rules;

            (iii) will not have an aggregate Market Value (determined at its
                  Date of Grant) of the Shares with respect to which Incentive
                  Stock Options are exercisable for the first time by the
                  Participant during any calendar year (under the Plan and any
                  other Employees' Share Scheme of the Company), determined in
                  accordance with the provisions of section 422 of the Code,
                  which exceeds $100,000; and

            (iv)  will be granted within 10 years from the earlier of the date
                  the Plan is adopted or the date the Plan is approved by the
                  shareholders of the Company.

            Notwithstanding this Rule 2.7 and Rule 14.1, the Board may, without
            the consent of the Participant at any time before the exercise of an
            Option (whether or not an Incentive Stock Option), take any action
            necessary to prevent the Option from being treated as an Incentive
            Stock Option.

      (c)   To comply with section 409A of the Code, the Option Price of an
            Option granted to a Participant subject to US taxation will not be
            less than 100% of the Market Value of a Share on the Date of Grant.

2.8   Stock Appreciation Rights (Share or cash settled)

      The Board may determine at or after the Date of Grant of an Award that is
      an Option (but not an Incentive Stock Option) that Rule 9.4 or Rule 9.5
      will apply to that Option.

2.9   Currency conversion

      Any amount calculated for the purposes of or payable under the Plan in a
      currency other than US Dollars will be converted into US Dollars or the
      other currency (as appropriate) at the average of the spot buying and
      selling rates for US Dollars and the relevant currency published by the
      New York Federal Reserve Bank for customs purposes on an appropriate date
      selected by the Board.

3.    LIMIT ON THE NUMBER OF SHARES WHICH CAN BE ISSUED AND INDIVIDUAL LIMIT ON
      PARTICIPATION

3.1   The limit for all Shares issued under the Plan

      The total number of unissued Shares that may be allocated under the Plan
      and any other Employees' Share Scheme of the Company at any time will not
      exceed 10 percent of the ordinary share capital of the Company in issue at
      that time. Any Shares issued by the Company to satisfy any Awards granted
      by the Trustee will be included for the purpose of this limit. The total
      number of Shares that may be allocated under the Plan:

      (a)   cannot exceed 10,000,000; and

      (b)   in any 12 month period under Options or rights under Rule 9.4 cannot
            exceed 5,000,000.


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3.2   Meaning of allocation and exclusion from the limit

      The reference in this Rule 3 to the allocation of Shares means, in the
      case of any share option plan, the placing of unissued Shares under option
      and, in the case of any other type of share plan, the issue and allotment
      of Shares. For the purposes of the limits in this Rule 3:

      (a)   Shares where the right to acquire them was released, cancelled or
            lapsed without being exercised will be ignored

3.3   Adjustment to Shares to be taken into account

      Where Shares issued under the Plan or any other Employees' Share Scheme of
      the Company are to be taken into account for the purposes of the limits in
      Rule 3.1 and a Variation has taken place between the date of issue of the
      Shares and the date on which the limit is to be calculated, the number of
      Shares to be taken into account for the purposes of the limit will be
      adjusted in the manner the Board considers appropriate to take account of
      the Variation.

3.4   The individual limit

      The maximum Market Value (determined at the Date of Grant) of Shares which
      may in respect of an Eligible Employee in any financial year normally be
      put under (i) a Conditional Award and/or a Restricted Award will be 150
      per cent. of the Eligible Employee's basic salary; and (ii) an Option will
      be 300 per cent. of the Eligible Employee's basic salary. However, if the
      Board determines that exceptional circumstances exist, for example, to
      assist the recruitment or retention of a senior employee, Awards may be
      granted over Shares with a maximum Market Value determined by the Board
      that exceeds these respective limits.

3.5   Purported grant of an Award in excess of limits

      If an Award is purported to be granted in breach of the limits in:

      (a)   Rule 3.1, the number of Shares over which the Award is purported to
            have been granted will, with the number of Shares over which all
            other Awards have been granted on the same Date of Grant, be reduced
            pro rata to the largest lower number that complies with Rule 3.1; or

      (b)   Rule 3.4, the number of Shares over which the Award is purported to
            have been granted will be reduced to the largest lower number that
            complies with Rule 3.4.

      When the number of Shares under an Award is adjusted under this Rule 3.5,
      the Award will take effect from the Date of Grant as if it had been
      granted on the adjusted terms. If the Award is a Restricted Award and
      Shares have been allocated to a Participant in breach of the limits in
      Rules 3.1 or 3.4, the Shares in respect of which the Restricted Award is
      reduced will be transferred by the Participant to or at the direction of
      the Company following any adjustment under this Rule 3.5.

4.    RIGHTS IN RELATION TO SHARES UNDER AWARDS

4.1   Subject to Rule 4.3 a Participant holding a Conditional Award or an Option
      will have no voting, dividend or other rights attaching to the Shares
      under that Award before the Award vests (in the case of a Conditional
      Award) or is exercised (in the case of an Option).


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4.2   A Participant holding a Restricted Award will have beneficial ownership of
      the Shares subject to that Award from its Date of Grant and will have
      voting but, subject to Rule 4.3, no dividend rights in respect of those
      Shares. A Participant may not sell, transfer, assign, charge or otherwise
      encumber or dispose of any Shares subject to a Restricted Award until the
      Restricted Award vests. The Board may take any action it considers
      necessary to give effect to the provisions of this Rule including
      retaining the certificates for the Shares or the ADRs evidencing the
      entitlement to the Shares/ADSs subject to a Restricted Award. Rule 8.2
      will apply to any Shares in respect of which a Restricted Award does not
      vest.

4.3   The Board may determine at the Date of Grant that a Participant holding a
      Conditional Award or a Restricted Award will be entitled to receive:

      (a)   in the case of a Restricted Award, any dividend paid or payable by
            reference to a record date from the Date of Grant until the
            Restricted Award vests on such number of the Shares subject to the
            Restricted Award as the Board decides at the Date of Grant. Any
            dividend payable will be paid to the Participant on the payment date
            for the relevant dividend;

      (b)   in the case of a Conditional Award, an amount equal to any dividend
            paid or payable (or, if Shares to satisfy the Conditional Award are
            not in issue at the relevant record date, that would have been paid
            or payable) by reference to a record date from the Date of Grant
            until the Conditional Award vests on such number of the Shares
            subject to the Conditional Award as the Board decides at the Date of
            Grant. Any amount payable under this Rule 4.3(b) will be paid as
            soon as practicable after the payment date for the relevant dividend
            and may be paid in cash or in Shares and, if in Shares, the number
            of Shares delivered will have a Market Value at the date of payment
            as nearly as possible equal to the net amount of the payment; or

      (c)   in the case of either a Restricted Award or a Conditional Award, an
            amount equal to any dividend paid or payable (or, as regards a
            Conditional Award where Shares to satisfy it are not in issue at the
            relevant record date, that would have been paid or payable) by
            reference to a record date from the Date of Grant until the Award
            vests on the number of Shares in respect of which the Award has
            vested (or, if fewer, the number of Shares as decided by the Board
            at the Date of Grant). Any amount payable under this Rule 4.3(c)
            will be paid as soon as practicable after the Award has vested and
            may be paid in cash or in Shares and, if in Shares, the number of
            Shares delivered will have a Market Value at the date of payment as
            nearly as possible equal to the net amount of the payment.

5.    VESTING OF AWARDS

5.1   Normal vesting

      Subject to Rules 5.2, 5.3, 5.4 and 7, the satisfaction of any performance
      target to which it is subject under Rule 2.4 and any additional terms and
      conditions that apply to the Award, an Award will vest, unless the Board
      determines otherwise, as to 25 per cent. of the shares subject to it on
      each anniversary of its Date of Grant. If a Conditional Award would vest
      on a day when the Participant holding that Award is prohibited from
      dealing in Shares, the Award will vest on the first day on which that
      Participant ceases to be so prohibited.


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5.2   Cessation of Employment

      If a Participant ceases to be in Employment for any reason then the
      Participant's unvested Award(s) will lapse immediately unless the Board
      determines to preserve or vest all or part of the Participant's Award(s)
      on any terms it thinks fit.

5.3   Exercise of Options

      An Option may only be exercised to the extent that it is vested. An Option
      may normally be exercised, to the extent vested, at any time before the
      tenth anniversary of its Date of Grant or such earlier date as the Board
      specifies at the Date of Grant. However, an Option held by a Participant
      (or the Participant's personal representatives, if appropriate) who has
      ceased to be employed by the Group, whether the Participant's Option was
      vested as of the date of cessation of employment or was preserved or
      vested by the Board under Rule 5.2, must be exercised, if at all, within
      the period of six months (twelve months in the case of death) following
      the later of the date of vesting of the Option or the date of the
      Participant's cessation of Employment (or by any other date determined by
      the Board under Rule 5.2).

6.    LAPSE OF AWARDS

6.1   Lapsing of Awards

      An Award will lapse and cease to be capable of (further) vesting and/or
      exercise, as appropriate, on the earliest of:

      (a)   the Participant ceasing to be in Employment and where no portion of
            the Award is vested as of such date and the Board has not preserved
            or vested any of the Award under Rule 5.2. If a portion of the Award
            is vested as of the date the Participant ceases to be in Employment,
            the portion that is not vested will lapse immediately; provided,
            that if the Board preserves or vests any portion only of an Award
            under Rule 5.2 that is not vested as of the date of cessation of
            Employment, only the part that is not preserved or vested will lapse
            immediately;

      (b)   the Participant being deprived of the legal or beneficial ownership
            of the Award by operation of law, or doing or omitting to do
            anything which causes him to be so deprived or being declared
            bankrupt;

      (c)   the Participant attempting to breach Rule 2.5;

      (d)   in respect of an Option held by a Participant who ceases to be in
            Employment and where Option was either vested as of cessation of
            employment or the Option was preserved or vested under Rule 5.2, the
            expiry of six months (twelve months in the case of death) following
            the later of the date of vesting and the date of cessation of
            Employment (or on any other date determined by the Board under Rule
            5.2); and

      (e)   in respect of an Option, the tenth anniversary of its Date of Grant
            or any earlier date for its lapse determined by the Board at its
            Date of Grant.


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6.2   Lapse where no or only partial vesting

      Where, after testing of any performance target to which it is subject, an
      Award has not vested or only vested in part under the performance target,
      the unvested part of the Award will lapse with immediate effect.

6.3   Participants on extended leave of absence (including maternity leave)

      For the purposes of this Rule 6, a Participant on approved extended leave
      of absence (including maternity leave) will not cease to be in Employment
      until the earlier of the date on which the Participant notifies the
      Participant's employer of the Participant's intention not to return to
      work or the date on which the Participant ceases to have statutory or
      contractual rights to return to work.

7.    CHANGE OF CONTROL - GENERAL OFFER OR SCHEME OF ARRANGEMENT

7.1   Circumstances in which this Rule applies

      Subject to Rule 11, this Rule applies where:

      (a)   an offeror (either alone or with any party acting in concert with
            the offeror) obtains Control of the Company as a result of making an
            offer to acquire the whole of the issued ordinary share capital of
            the Company (or such part of it which is not at the time owned by
            the offeror and any party acting in concert with the offeror); or

      (b)   the court sanctions a compromise or arrangement affecting the Shares
            under section 425 of the Companies Act 1985.

7.2   The date and extent of vesting of an Award

      Where Rule 7.1 applies or is likely to apply, an Award will vest, subject
      to Rule 6, to the extent determined by the Board and on the date on which
      the relevant event described in Rule 7.1 occurs. The Board will have
      discretion to take into account any factors it believes to be relevant in
      determining the extent to which an Award will vest in the circumstances.
      The Board will confirm as soon as practicable the extent (if any) to which
      an Award will vest and this confirmation may be before, but conditional
      on, the relevant event described in Rule 7.1 occurring.

7.3   Exercise of Options and lapse of Awards following an event in Rule 7.1

      An Option may be exercised to the extent it has vested in accordance with
      Rule 7.2 and will lapse:

      (a)   following an event described in Rule 7.1(a), on the earlier of the
            date (i) falling six months after the offeror obtains Control and
            (ii) on which any person who has become bound or entitled to acquire
            Shares under sections 428 to 430F of the Act ceases to be so bound
            or entitled; and

      (b)   following an event described in Rule 7.1(b), on the compromise or
            arrangement becoming effective.


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      An Award will lapse on the occurrence of an event described in Rule 7.1 to
      the extent it does not vest in accordance with Rule 7.2. For the avoidance
      of doubt, an Option will lapse in accordance with this Rule 7.3 whether or
      not it became exercisable in accordance with Rule 7.2.

7.4   Voluntary winding-up of Company

      If a voluntary winding-up of the Company is proposed to shareholders, each
      Award which has not vested will vest conditionally on the resolution for
      the winding-up of the Company being passed in respect of the number of
      Shares determined in accordance with Rule 7.2 as if the proposal to
      shareholders were the relevant event referred to in Rule 7.2. Any Option
      (whether it becomes exercisable as a result of this Rule 7.4 or is already
      exercisable) will lapse immediately on the resolution being passed. Any
      Award will lapse on the resolution being passed to the extent it does not
      vest in accordance with this Rule 7.4.

7.5   De-listing of the Company

      If the Shares cease to be listed on any stock exchange without any change
      of Control occurring an Award will, subject to Rule 6, vest to the extent
      determined by the Board and on the date on which the Shares cease to be
      listed. The Board will have discretion to take into account any factors it
      believes to be relevant in determining the extent to which an Award will
      vest in these circumstances. Following its determination each Participant
      will be entitled to receive an amount in cash equal to the amount they
      would have received if they had, in accordance with the rules of the Plan
      acquired all of the Shares subject to their Award to the extent vested and
      immediately disposed of those Shares at the average Market Value of those
      Shares in the five days before the date of the de-listing of the Shares or
      at such other value as the Board may determine.

8.    CONSEQUENCES OF VESTING OF AWARDS

8.1   Conditional Awards

      Within 30 days of the date that a Conditional Award vests, the Company
      will, subject to Rule 13, either:

      (a)   arrange (at its expense) for an ADR or ADRs to be issued in respect
            of the Shares in respect of which it has vested. Unless the
            Participant otherwise directs, the acceptance of a Conditional Award
            will constitute an authorisation by the Participant to the Secretary
            of the Company or any other employee nominated by the Company on
            behalf of the Participant to sign, execute and do all such
            documents, acts and things as may be necessary or incidental to
            effect the deposit of the relevant Shares with the Depositary and
            the issue to, or to the order of, the Participant of an ADR or ADRs
            in respect of the Shares so deposited; or

      (b)   make or procure the making of a payment to the Participant as nearly
            as possible equal to the Market Value on the date on which the Award
            vests of the Shares subject to the Conditional Award in respect of
            which it has vested.


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8.2   Restricted Awards

      If an Award takes the form of a Restricted Award any Shares subject to it
      in respect of which it has not vested will be transferred by the
      Participant to or at the direction of the Company as soon as practicable
      and permissible following the vesting of the Restricted Award.

8.3   Options

      If an Award takes the form of an Option it may be exercised following the
      vesting of the Award in accordance with Rule 9 and subject to Rules 5.3,
      6, 7.3, 7.4 and 7.5.

8.4   All Awards

      The delivery of Shares and issue of ADRs under the Plan is subject to the
      obtaining of any approval or consent required.

9.    MANNER OF EXERCISE OF AN OPTION

9.1   Exercise in whole or in part

      Subject to Rules 5.3, 6, 7.3, 7.4 and 7.5, an Option may be exercised in
      whole or in part to the extent that it has vested.

9.2   Manner of exercise

      To exercise an Option, a Participant must deliver to the address specified
      in the notice of exercise the notice of exercise in the prescribed form,
      properly completed and signed by the Participant and, subject to the
      Company deciding that Rules 9.4 or 9.5 will apply, payment of the Option
      Price for the Shares over which the Option is exercised or an undertaking
      in a form satisfactory to the Company to pay to the Company the Option
      Price for the Shares over which the Option is exercised.

9.3   Issue or transfer of Shares

      Subject to Rules 9.4, 9.5 and 13, within 30 days of the Option Exercise
      Date the Company will arrange (at its expense) for an ADR or ADRs to be
      issued in respect of the Shares in respect of which the Option is
      exercised. Unless the Participant otherwise directs, the exercise of an
      Option will constitute an authorisation by the Participant to the
      Secretary of the Company or any other employee nominated by the Company on
      behalf of that Participant to sign, execute and do all such documents,
      acts and things as may be necessary or incidental to effect the deposit of
      the relevant Shares with the Depositary and the issue to, or to the order
      of, the Participant of an ADR or ADRs in respect of the Shares so
      deposited.

9.4   Share Settled Stock Appreciation Rights

      The Company may decide that this Rule 9.4 will apply to satisfy the
      exercise of an Option, in which case:

      (a)   Rule 9.3 will apply in respect of such whole number of Shares
            (rounded down):

            (i)   if the Option is to be satisfied by the transfer of Shares,
                  whose aggregate Market Value on the Option Exercise Date is as
                  close as reasonably possible equal to (but not more than) the
                  amount by which the aggregate Market Value on the Option
                  Exercise Date of the Shares over which Rule 9.3 would, but for
                  the application of this Rule 9.4, apply exceeds the Option
                  Price that would otherwise be payable under Rule 9.2, the
                  "Exercise Gain"; or


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            (ii)  if the Option is to be satisfied by the issue of new Shares,
                  determined by the application of the formula:

                                          Exercise Gain
                  --------------------------------------------------------------

                  Market Value of a Share at  -  the nominal value of a Share
                  the Option Exercise Date       (or, if less, the Option Price)

      (b)   subject to Rule 8.4, the number of Shares determined under Rule
            9.4(a) will be issued or transferred in accordance with Rule 9.3 and
            any cash balance arising as a result of the rounding down will be
            paid to the Participant at the same time as Shares are delivered;

      (c)   the Option will lapse immediately following the exercise in respect
            of the Shares over which the Participant exercised the Option;

      (d)   subject to Rule 9.4(e) if new Shares are issued, sufficient will be
            sold on behalf of the Participant to realise an amount equal to the
            nominal value of the Shares issued and the proceeds of their sale
            will be remitted to the Company to pay the nominal value of the
            Shares issued; and

      (e)   if the Participant has paid to the Company the Option Price in
            accordance with Rule 9.2, the Option Price will be returned to the
            Participant subject to deduction, where the Option is satisfied by
            the issue of new Shares, of the nominal value of the Shares issued.

9.5   Cash Settled Stock Appreciation Rights

      The Company may decide that this Rule 9.5 will apply to satisfy the
      exercise of an Option, in which case:

      (a)   the Participant will receive within 30 days following the Option
            Exercise Date a payment equal to the amount by which the Market
            Value of the Shares over which the Option is exercised exceeds the
            aggregate Option Price that would otherwise be payable under rule
            9.2;

      (b)   the Option will lapse immediately following the exercise in respect
            of the Shares over which the Participant exercised the Option; and

      (c)   if the Participant has paid to the Company the Option Price in
            accordance with Rule 9.2, the Option Price will be returned to the
            Participant.

      For the avoidance of doubt, any payment made under this Rule 9.5 will be
      subject to Rule 2.6 and 13.


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10.   ADJUSTMENT OF AWARDS

10.1  Variation in equity share capital

      (a)   If there is a Variation in the equity share capital of the Company
            the number and/or the nominal value of the Shares over which an
            Award is granted or the Option Price of any an Option may be
            adjusted in the manner the Board determines.

      (b)   Apart from under this Rule 10.1(b), no adjustment under Rule 10.1(a)
            can reduce the Option Price of an Option to less then the nominal
            value of a Share. Where an Option subsists over both issued and
            unissued Shares, an adjustment may only be made if the reduction of
            the Option Price in respect of both the issued and the unissued
            Shares can be made to the same extent. Any adjustment made to the
            Option Price of Options granted over unissued Shares will only be
            made if and to the extent the Board is authorised to:

            (i)   capitalise from the reserves of the Company a sum equal to the
                  amount by which the nominal value of the Shares in respect of
                  which the Option is exercisable exceeds the aggregate adjusted
                  Option Price for those Shares; and

            (ii)  apply that sum in paying up the Shares so that on exercise of
                  the Option the Board will capitalise that sum and apply it in
                  paying up the Shares.

10.2  Notifying Participants of adjustments

      The Grantor will take the steps it considers necessary to notify
      Participants of any adjustment under Rule 10.

11.   EXCHANGE OF AWARDS

11.1  Circumstances in which Awards are exchanged

      This Rule applies when:

      (a)   a company (the Acquiring Company) has obtained Control of the
            Company;

      (b)   the shareholders of the Acquiring Company immediately after it has
            obtained Control of the Company are substantially the same as the
            shareholders of the Company immediately before that event; and

      (c)   the Acquiring Company consents to the exchange of Awards under this
            Rule.

11.2  The Exchange

      When this Rule 11 applies Participants' Awards (Old Awards) will not vest
      but will be exchanged for awards (New Awards) in respect of shares in the
      Acquiring Company. A New Award will be equivalent to the Old Award for
      which it is exchanged before the change of Control so that:

      (a)   it is governed by the Rules in effect immediately before the release
            of the Old Award;


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<PAGE>

      (b)   the total Market Value of the Shares the subject of the Old Award
            immediately before the exchange is equal to the total Market Value
            immediately after the exchange of the shares the subject of the New
            Award; and

      (c)   in the case of an Option, the aggregate Option Price payable to
            exercise the New Award is equal to the total Option Price payable to
            exercise the Old Award.

      The provisions of the Plan will, for this purpose, be construed as if the
      New Award was granted under the Plan at the same time as the Old Award.

11.3  The New Awards

      References to Shares will, in relation to the New Awards, be taken as
      references to shares of the Acquiring Company. References to the Company
      will be taken to be references to the Acquiring Company, where
      appropriate. The New Awards will not vest or lapse if Rule 7 applies in
      respect of the change of Control which lead to the grant of the New
      Awards.

12.   RANKING OF SHARES

      Subject to Rule 4.3, Shares allotted, deemed allotted or transferred to a
      Participant under the Plan will rank equally in all respects with Shares
      of the same class, except that they will not rank for any right attaching
      to them by reference to a record date preceding the date of their
      acquisition by the Participant.

13.   WITHHOLDING FOR TAX

      The Grantor or any person which is a Participant's employer may withhold
      any amount and make any arrangements it considers necessary to meet any
      liability of the Participant to taxation or social security contributions
      in connection with the benefits delivered under the Plan. These
      arrangements may include the sale on behalf of a Participant of any Shares
      acquired by the Participant under the Plan.

14.   ADMINISTRATION

14.1  Administration of the Plan

      The Plan will be administered by the Board or any committee appointed by
      the Board. The Board, or any committee appointed by the Board, has full
      authority, consistent with these Rules to administer the Plan, including
      authority to interpret and construe any provision of the Plan and to adopt
      any regulations or policies for operating or administering the Plan and
      any documents it thinks necessary or appropriate. The decision of the
      Board on any matter concerning the Plan will be final and binding on all
      parties, notwithstanding any delegation of authority to a sub-committee.

14.2  Notices

      Any notice or other communication in connection with the Plan can be given
      by electronic mail or by personal delivery, by facsimile, by first-class
      post or airmail, (in the case of a company, to its registered office and
      in the case of an individual to the individual's last known address) or by
      any other means which a Participating Company and its employees use to
      communicate with each other.


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<PAGE>

14.3  When notice is given

      Any notice under the Plan will be given:

      (a)   if delivered personally, at the time of delivery;

      (b)   if posted, at 10.00 a.m. on the third business day after it was put
            into the post; or

      (c)   if sent by facsimile, email or any other form of electronic
            transfer, at the time of despatch.

      In proving service of notice it will be sufficient to prove that delivery
      was made or that the envelope containing it was properly addressed,
      prepaid and posted or that the facsimile message, email or other form of
      electronic transfer was properly addressed and despatched, as appropriate.

14.4  Documents sent to shareholders

      Participants may, but are not entitled to, receive copies of any notice or
      document sent by the Company to the holders of Shares.

14.5  Records

      The Company will maintain a record of Awards outstanding under the Plan
      which will be conclusive as to the Awards included in it.

14.6  Costs of introducing and administering the Plan

      The costs of introducing and administering the Plan will be borne by the
      Company. However, the Company may require any Participating Company or
      Associated Company to enter into an agreement which obliges that company
      to reimburse the Company for any costs borne and the value of any benefits
      delivered by the Company, directly or indirectly, in respect of that
      company's officers or employees.

15.   AMENDING THE PLAN

15.1  The Company has discretion to amend the Rules

      Subject to the remainder of this Rule 15, the Company (acting through the
      Board) can amend the Rules at any time.

15.2  Additional sections

      The Company can adopt additional sections of the Rules applicable in any
      jurisdiction under which Awards may be subject to additional and/or
      modified terms and conditions, having regard to any securities, exchange
      control or taxation laws, which may apply to a Participant, the Company,
      any Participating Company or Associated Company. Any additional sections
      must conform to the basic principles of the Plan and must not exceed the
      limits set out in the Rules.


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<PAGE>

15.3  No abrogation of existing rights

      No amendment will be made under Rule 15.1 which would adversely and
      materially affect the existing rights of a Participant unless it is made
      with the Participant's written consent or with the written consent of a
      majority of the Participants affected by the amendment. For these
      purposes, majority may, at the discretion of the Board, mean the majority
      by number of Participants affected by the amendment or by number of Shares
      under Awards held by Participants affected by the amendment.

15.4  Shareholder approval

      No amendment to the advantage of Participants (except for an amendment
      which could be included in an additional section adopted under Rule 15.2)
      can be made to the provisions in the Rules (if any) relating to:

      (a)   who can be a Participant;

      (b)   the number of Shares which can be allocated under the Plan; and

      (c)   the basis for determining a Participant's entitlement to and the
            terms of the Shares and any adjustment in the event of a Variation,

      without the approval by ordinary resolution of the Company in general
      meeting, except for amendments (i) that are minor and to benefit the
      administration of the Plan; (ii) to take account of a change in
      legislation; or (iii) to obtain or maintain favourable tax, exchange
      control or regulatory treatment for Participants, Eligible Employees or
      for any member of the Group in any jurisdiction.

16.   GENERAL

16.1  Termination of the Plan

      The Plan will terminate at the end of the Plan Period or at any earlier
      time the Company decides. Termination of the Plan will not affect the
      subsisting rights of Participants.

16.2  The Plan and funding the purchase of Shares

      The Company and any Subsidiary of the Company may provide money to the
      trustees of any trust or any other person to enable them or him to acquire
      Shares to be held for the purposes of the Plan, or may enter into any
      guarantee or indemnity for those purposes, to the extent permitted by any
      applicable law.

16.3  Rights of Participants and Eligible Employees

      Participation in the Plan is not pensionable and does not form part of any
      Participant's employment contract. Nothing in the Plan or in any document
      executed under it will give any officer or employee of any Participating
      Company or Associated Company any right to participate in the Plan. The
      rights and obligations of any individual under the terms of the
      individual's office or Employment with any member of the Group will not be
      affected by the individual's participation in the Plan, nor any right
      which the individual may have to participate under it. A Participant
      holding an Award which takes the form of a Conditional Award or an Option
      will not have any rights of a shareholder of the Company with respect to
      that Award or the Shares subject to it, until the Award vests.


                                       14
<PAGE>

16.4  No rights to compensation or damages

      A Participant waives all and any rights to compensation or damages under
      the Plan in consequence of the termination of the Participant's office or
      Employment with a member of the Group for any reason. Nothing in the Plan
      or in any document executed under it will (a) give any person any right to
      continue in Employment; (b) affect the right of any member of the Group to
      terminate the Employment of any person without liability at any time with
      or without cause; or (c) impose on any member of the Group, the Grantor or
      the Board or their respective agents and employees any liability in
      connection with the loss of a Participant's benefits or rights under the
      Plan, the failure or refusal of any person to exercise a discretion under
      the Plan, and/or a Participant ceasing to be a person who has the status
      or relationship of an employee or director of any member of the Group for
      any reason as a result of the termination of the Participant's Employment.

16.5  The benefit of Rules 16.3 and 16.4

      The benefit of Rules 16.3 and 16.4 is given for the Company, for itself
      and as trustee and agent of all its Subsidiaries and Associated Companies.
      The Company will hold the benefit of those Rules on trust and as agent for
      each of them and may assign the benefit of this Rule 16.5 to any of them.

16.6  Articles of Association

      Any Shares acquired under the Plan will be subject to the articles of
      association of the Company as amended from time to time.

16.7  Claims for relief under the Taxation of Chargeable Gains Act 1992

      If Shares are transferred to a Participant under an Award, the Participant
      will, if required by the person making the transfer, join that person in
      making a claim for relief under section 165 of the Taxation of Chargeable
      Gains Act 1992 in respect of the disposal made by the person making that
      transfer.

16.8  Severability

      The invalidity or non-enforceability of one or more provisions of the Plan
      will not affect the validity or enforceability of the other provisions of
      the Plan, which will remain in full force and effect.

16.9  Third party rights

      Unless expressly provided in the Plan, nothing in this Plan confers any
      benefit, right or expectation on a person who is not an Eligible Employee
      and no 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.

16.10 No restriction on Company

      The Plan will not affect the right or power of the Company to make or
      authorise any change in the Company's capital structure or business, or
      any merger or consolidation of the Company, or any issue of Shares or of
      options, warrants or rights to purchase shares or of bonds, debentures,
      preferred shares or shares where rights are superior to or affect the
      Shares or their rights, or any sale or transfer of all or any part of the
      Company's assets or business or any other corporate act or proceeding.


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<PAGE>

16.11 Section 409A of the Code

      If it is determined that a Participant would be subject to the additional
      20 per cent. tax imposed on certain deferred compensation arrangements
      under section 409A of the Code as a result of any provision of any Award
      granted under this Plan, that provision will be deemed to be amended to
      the minimum extent necessary to avoid the imposition of that additional
      tax. The nature of the amendment will be determined by the Board.

17.   DATA PROTECTION

      By participating in the Plan, a Participant consents to the collection,
      processing, transmission (including to countries or territories outside
      the European Economic Area) and storage in any form whatsoever by the
      Company of any data of a professional or personal nature which is
      necessary for operating and administering the Plan. This may include
      providing information to trustees of an employee benefit trust, or to
      registrars, or brokers, or third party administrators of the Plan, or to
      future purchasers of the company or the business in which the Participant
      works.

18.   GOVERNING LAW

      These Rules will be governed by and construed in accordance with the law
      of England. All Participants, the Company and any other Participating
      Company or Associated Company will submit to the jurisdiction of the
      English courts in relation to anything arising under the Plan. The Board
      may determine that another law will apply to the operation of the Plan
      outside the United Kingdom.


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<PAGE>

                                   APPENDIX 1

                                   DEFINITIONS

      Act means the Companies Act 1985;

      ADR means an American Depositary Receipt issued by the Depository
      evidencing an entitlement to an ADS;

      ADS means a Share or Shares for the time being evidenced by an ADR;

      Associated Company means in relation to the Company:

      (a)   any company which has Control of the Company; and

      (b)   any company (other than a Participating Company) which is under the
            Control of any company referred to in (a) above;

      Award means a Restricted Award, a Conditional Award or an Option granted
      under the Plan;

      Board means the board of directors of the Company or a duly authorised
      committee of that board appointed or designated by the Board to administer
      the Plan;

      Code means the US Internal Revenue Code of 1986 as amended from time to
      time;

      Conditional Award means a contingent right to acquire Shares granted or
      proposed to be granted under Rule 2;

      Company means NDS Group plc (registered number 1950437) which, for the
      purposes of the Rules, may act through the Board;

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

      Date of Grant means the date on which an Award is granted;

      Depositary means the Bank of New York in its capacity as Depositary under
      a Deposit Agreement between the Company, the Bank of New York and
      beneficial owners of ADRs or any successor Depositary and includes any
      custodian for the Depositary or any successor Depositary;

      Eligible Employee means any person who at the relevant Date of Grant is an
      employee or a director (which includes non-executive directors for the
      purpose of the grant of Options) of a Participating Company;

      Employees' Share Scheme has the meaning given by section 743 of the Act;

      Employment means employment as an employee of a Participating Company or
      an Associated Company;

      GAAP means generally accepted accounting principles in the [United
      States];

      Grantor means in relation to an Award, the Person who granted that Award
      which may be the Company, the trustee of an employee benefit trust or any
      other person;


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<PAGE>

      Group means the Company and each Subsidiary of the Company over which the
      Company has control and member of the Group will be construed accordingly;

      Incentive Stock Option means an option within the meaning of section 422
      of the Code;

      Market Value means, in relation to a Share an amount equal to the closing
      price of an ADS on the Nasdaq Stock Market on the trading day immediately
      before the Date of Grant;

      Option means a subsisting right to acquire Shares or cash in accordance
      with the Rules. Options may be (i) granted as or settled as share or cash
      settled share appreciation rights in accordance with Rule 9.4 or 9.5; or
      (ii) granted as Incentive Stock Options or non-qualified stock options
      which do not meet the requirements of section 422 of the Code;

      Option Exercise Date means the date when the exercise of an Option is
      effective because it complies with Rule 9.2;

      Option Price means the price per Share determined by the Board under Rule
      2.7 payable by a Participant to acquire Shares on the exercise of an
      Option;

      Participant means any Eligible Employee to whom an Award has been granted,
      or (where the context requires) that Eligible Employee's personal
      representatives;

      Participating Company means:

      (a)   the Company; and

      (b)   any other company which is under the Control of the Company, is a
            Subsidiary of the Company and is for the time being designated by
            the Board as a Participating Company;

      Plan means the NDS 2006 Long-Term Incentive Plan constituted by the Rules;

      Plan Period means the period starting on [31 October] 2006 and ending on
      [30 October] 2016;

      Restricted Award means an appropriation of Shares granted or proposed to
      be granted under Rule 2;

      Rules means these rules as amended from time to time;

      Section 162(m) means Section 162(m) of the Code and the rules and
      regulations promulgated thereunder from time to time;

      Section 162(m) Exception means the exception under Section 162(m) and the
      regulations thereunder for "qualified performance-based compensation";

      Section 162(m) Performance Targets means the following performance goals,
      on a GAAP or non-GAAP basis: Net income, adjusted net income, EBITDA,
      adjusted EBITDA, OIBDA, adjusted OIBDA, operating income, adjusted
      operating income, free cash flow, net earnings, net earnings from
      continuing operations, earnings per share, adjusted earnings per share,
      revenue, net revenue, operating revenue, total stockholder return, share
      price, return on equity, return in excess of cost of capital, profit in
      excess of cost of capital, return on assets, return on invested capital,
      net operating profit after tax, operating margin, profit margin or any
      combination thereof. A Section 162(m) Performance Target may also be
      stated as a combination of one or more goals (e.g., free cash flow return
      on invested capital), and on an absolute or relative basis;


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<PAGE>

      Share means a fully paid and irredeemable Series A ordinary share of
      US$0.01 in the capital of the Company;

      Subsidiary has the meaning given in section 736 of the Act;

      Taxes Act means the Income and Corporation Taxes Act 1988;

      Trustee means the trustee from time to time of an employee benefit trust
      established by the Company as an Employees' Share Scheme; and

      Variation means in relation to the equity share capital of the Company a
      capitalisation issue, an offer or invitation made by way of rights, a
      subdivision, a consolidation or a reduction, or any other variation which
      the Board believes justifies an adjustment to Awards.


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