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                                                                    EXHIBIT 10.2

                               SPARK NETWORKS PLC







                         RULES OF THE SPARK NETWORKS PLC


                            2004 SHARE OPTION SCHEME







   ADOPTED BY THE DIRECTORS WITH EFFECT FROM 20 SEPTEMBER 2004 AS APPROVED BY
  ORDINARY RESOLUTION OF THE COMPANY PASSED ON 10 DECEMBER 2004, AND AS AMENDED
             PURSUANT TO RULE 14.1 BY A RESOLUTION OF THE DIRECTORS
                              DATED 31 JANUARY 2005


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                         RULES OF THE SPARK NETWORKS PLC
                            2004 SHARE OPTION SCHEME




1        DEFINITIONS


         1.1      In this Scheme the words and expressions set out below shall
                  have the meanings specified against them unless the context
                  otherwise requires:

                  "Acquiring Company"          a company which obtains Control
                                               of the Company in accordance with
                                               Rule 8

                  "the Act"                    the Income and Corporation Taxes
                                               Act 1988

                  "the Auditors"               the auditors (acting as experts
                                               and not arbitrators) for the time
                                               being of the Company

                  "the Company"                Spark Networks plc (registered
                                               number 3628907)

                  "Control"                    the meaning given to that
                                               expression by section 840 of the
                                               Act

                  "Date of Adoption"           the earlier of the effective date
                                               of adoption of this Scheme by the
                                               Directors or the effective date
                                               of approval of this Scheme by the
                                               Company's shareholders

                  "Date of Grant"              the date upon which the Company
                                               issues an Option Certificate in
                                               accordance with the provisions of
                                               Rule 2.5

                  "Directors"                  the board of directors for the
                                               time being of the Company, or a
                                               duly appointed committee of the
                                               Directors

                  "Eligible Person"            any person who is an employee of,
                                               consultant to, or director of any
                                               Group Company at the Date of
                                               Grant

                  "Exchange Act"               the Securities Exchange Act of
                                               1934, as amended (United States
                                               of America).

                  "Exercise                    Condition" any objective
                                               condition(s) imposed by Directors
                                               at the Date of Grant of any
                                               Option, preventing exercise of
                                               that Option until such
                                               condition(s) have been fulfilled

                  "the Group"                  the Company and each of Group
                                               Company and the expression
                                               "member of the Group" shall be
                                               construed accordingly


                  "Group Company"              the Company and any company which
                                               is for the time being a
                                               subsidiary or associated company
                                               of the Company to which the
                                               Directors have resolved that this
                                               Scheme shall for the time being
                                               extend


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                  "Issue or Re-organisation"   any issue of shares or other
                                               securities of the Company and/or
                                               any capitalisation consolidation
                                               or sub-division or reduction of
                                               share capital in the Company
                                               and/or any enfranchisement of the
                                               share capital of the Company
                                               and/or any other variation in the
                                               share capital of the Company
                                               which in the opinion of the
                                               Auditors justifies a variation in
                                               the number of shares subject to
                                               an Option or the Option Price of
                                               that Option

                  "Option"                     a right granted to acquire Shares
                                               pursuant to this Scheme which is
                                               for the time being subsisting

                  "Option Certificate"         a certificate issued to an Option
                                               Holder in accordance with Rule
                                               2.5 or Rule 6.3 (as the case may
                                               be)

                  "Option Holder"              a person holding an Option or
                                               (where the context admits) his
                                               legal personal representative(s)

                  "Option Price"               in relation to an Option, the
                                               price payable for Shares upon
                                               exercise of that Option

                  "Ordinary Share Capital"     the ordinary share capital of the
                                               Company as defined in section 832
                                               (1) of the Act

                  "Redundancy"                 dismissal by reason of redundancy
                                               within the meaning given to that
                                               term by the Employment Rights Act
                                               1996

                  "this Scheme"                the Spark Networks plc 2004 Share
                                               Option Scheme established by
                                               these Rules in its present form
                                               or as from time to time amended
                                               in accordance with the provisions
                                               hereof

                  "Securities Act"             the Securities Act of 1933, as
                                               amended (United States of
                                               America)

                  "Shares"                     ordinary shares of(pound)0.01
                                               each in the capital of the
                                               Company.

         1.2      In these Rules unless the context otherwise requires:

                  (a)      words denoting the singular number shall include the
                           plural number and words denoting the masculine gender
                           shall include the feminine gender and vice versa;

                  (b)      a reference to any enactment shall be construed as a
                           reference to that enactment as for the time being
                           amended or re-enacted and shall include any
                           regulations made thereunder; and

                  (c)      any reference to "Rule" or "Rules" shall be taken to
                           refer to a Rule, or the Rules, of this Scheme.



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2        PARTICIPATION

         2.1      Subject to the Rules of this Scheme, the Directors may on such
                  dates as they shall determine grant Options to such Eligible
                  Persons as they may in their absolute discretion select.

         2.2      No Eligible Persons shall be entitled as of right to
                  participate in this Scheme.

         2.3      In granting any Option the Directors may in their discretion
                  impose any Exercise Condition(s) upon the exercise of the
                  Option, provided that until such time that the Company is
                  subject to the reporting requirements of Section 13 or 15(d)
                  of the Exchange Act, each such Option shall become exercisable
                  in instalments of not less than 20% per year, with the initial
                  vesting to occur not later than one (1) year after the Date of
                  Grant, and further provided that the Exercise Condition(s)
                  shall be:

                  (a)      set out in full in, or details given with, the
                           relevant Option Certificate; and

                  (b)      such that rights to exercise the Option after the
                           fulfilment or attainment of the Exercise Condition
                           shall not be dependent upon the further discretion of
                           any person.

         2.4      The Directors shall grant Options by resolution. As soon as
                  practicable thereafter the Directors shall issue in respect of
                  each Option granted an Option Certificate signed by an officer
                  of the Company who has been duly authorised by the Directors.
                  An Option Certificate need not be given under seal. The date
                  of issuing an Option Certificate shall be taken for all
                  purposes of the Scheme as the Date of Grant in respect of the
                  relevant Option. No payment to the Company shall be required
                  on the grant of an Option. The Option Certificate shall be in
                  such form as the Directors shall from time to time determine
                  and shall specify the number of Shares comprised in the
                  Option, the Date of Grant, any Exercise Condition(s) and the
                  Option Price. The Option Price for each Option shall be
                  determined by the Directors in their sole discretion at the
                  time of grant provided that the Option Price per Share shall
                  not be less than 85% of the Fair Market Value of the Shares on
                  the Date of Grant. "Fair Market Value" means, as of any given
                  date and unless the Directors determine otherwise:

                  (a)      until such time that the Company's equity securities
                           ("Stock") or American Depository Receipts ("ADR's"),
                           as the case may be, are listed on The New York Stock
                           Exchange ("NYSE") or The American Stock Exchange
                           ("AMEX") or are authorized for quotation on The
                           Nasdaq National Market System ("NMS") or The Nasdaq
                           SmallCap Market ("Nasdaq SmallCap"), if the Shares or
                           the Company's Global Depository Shares ("GDS's"), as
                           the case may be, are traded on the Frankfurt Stock
                           Exchange ("FSE"), the closing price of the Shares or
                           GDS's, as the case may be, on the FSE on such date or
                           if no sale of the Shares or GDS's, as the case may
                           be, shall have occurred on such date, on the next
                           preceding date on which there was such a reported
                           sale; or

                  (b)      until such time that the Stock or ADR's, as the case
                           may be, are listed on the NYSE or AMEX or are
                           authorized for quotation on the NMS or Nasdaq
                           SmallCap, if the Shares or GDS's, as the case may be,
                           are not traded on the FSE and are traded on one or
                           more other European exchanges, the average of the
                           closing price of the Shares or GDS's, as the case may
                           be, on such European exchanges on such date or if no
                           sale of the Shares or GDS's, as the case may be,



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                           shall have occurred on such date, on the next
                           preceding date on which there was such a reported
                           sale; or

                  (c)      if the Stock or ADR's, as the case may be, are listed
                           on the NYSE or AMEX or are authorized for quotation
                           on the NMS, the closing sales price of the Stock or
                           ADR's, as the case may be, on such exchange or NMS,
                           as the case may be, on such date or if no sale of the
                           Stock or ADR's, as the case may be, shall have
                           occurred on such date, on the next preceding date on
                           which there was such a reported sale; or

                  (d)      if the Shares or GDS's, as the case may be, are not
                           traded on the FSE or any other European exchange, and
                           if the Stock or ADR's, as the case may be, are not
                           listed for trading on the NYSE or AMEX or authorized
                           for quotation on NMS, the closing bid price of the
                           Stock or ADR's, as the case may be, as reported by
                           The Nasdaq SmallCap Market on such date, or if no
                           such price shall have been reported for such date, on
                           the next preceding date for which such price was so
                           reported; or

                  (e)      if the Shares or GDS's, as the case may be, are not
                           traded on the FSE or any other European exchange, and
                           if the Stock or ADR's, as the case may be, are not
                           listed for trading on the NYSE or AMEX or authorized
                           for quotation on NMS or Nasdaq SmallCap, the last
                           reported bid price of the Stock or ADR's, as the case
                           may be, published in the "pink sheets" or displayed
                           on the National Association of Securities Dealers,
                           Inc. ("NASD") Electronic Bulletin Board, as the case
                           may be; or

                  (f)      if the Shares or GDS's, as the case may be, are not
                           traded on the FSE or any other European exchange, and
                           if the Stock or ADR's, as the case may be, are not
                           listed for trading on the NYSE or AMEX, are not
                           authorized for quotation on NMS or Nasdaq SmallCap
                           and are not published in the "pink sheets" or
                           displayed on the NASD Electronic Bulletin Board, the
                           fair market value of the Shares as determined in good
                           faith under procedures established by the Directors
                           which determination shall be final and binding on all
                           Option Holders.

         2.5      Any Eligible Person to whom an Option is granted may by notice
                  given in writing within 30 days after its Date of Grant
                  renounce his rights thereto, in which event such Option shall
                  be deemed for all purposes and pro tanto never to have been
                  granted.

         2.6      Each Option shall be personal to the Option Holder to whom it
                  is granted and other than a transfer to the Option Holder's
                  personal representatives on death shall not be transferable,
                  assignable or chargeable. Any other purported transfer,
                  assignment, charge, disposal or dealing with the rights and
                  interests of the Option Holder under this Scheme shall result
                  in the cancellation of the Option.

3        RESTRICTIONS ON THE GRANTING OF OPTIONS

         3.1      This Scheme shall terminate on the tenth anniversary of the
                  Date of Adoption, unless terminated earlier by the Directors,
                  but Options granted hereunder may extend beyond such date. The
                  aggregate number of Shares which may be issued on the exercise
                  of Options during the period of ten years from the Date of
                  Adoption shall not exceed 17,000,000 Shares. However, until
                  such time that the Company is subject to the reporting
                  requirements of Section 13 or 15(d) of the Exchange Act, the
                  total number of Shares provided for under this Scheme shall
                  not exceed the applicable percentage as calculated



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                  in accordance with the conditions and exclusions of Rule
                  260.140.45 of Title 10 of the California Code of Regulations,
                  based on the securities of the Company which are outstanding
                  at the time the calculation is made.

         3.2      Options may be granted at any time after the Date of Adoption,
                  provided that no Options shall in any event be offered more
                  than 10 years after the Date of Adoption.

4        RIGHTS TO EXERCISE OPTIONS

         4.1      Subject to the provisions of Rules 4.2 to 4.4 (inclusive), 7,
                  8 and 9, an Option shall be capable of being exercised in
                  whole or in part before the tenth anniversary of its Date of
                  Grant in accordance with the provisions of Rule 6, provided
                  always that any relevant Exercise Condition has been
                  satisfied, and subject to any shorter period that may be
                  provided for in the relevant Option Certificate.

         4.2      Upon an Option Holder ceasing to be an employee of, consultant
                  to or director of any Group Company by reason of:

                  (a)      injury or disability (evidenced to the satisfaction
                           of the Directors);

                  (b)      Redundancy;

                  (c)      retirement on reaching his retirement age under his
                           contract of employment; or

                  (d)      the company for which the Option Holder works ceasing
                           to be under the Control of the Company or any Group
                           Company, or the undertaking or part-undertaking in
                           which the Option Holder works being transferred to a
                           person which is not under the Control of the Company
                           or any Group Company,

                  any Option or Options held by him shall notwithstanding Rule
                  4.1 (a) become and remain capable of exercise subject to the
                  provisions of Rule 5.

         4.3      The Directors in their absolute discretion may determine that
                  upon an Option Holder ceasing to be an employee of, consultant
                  to or director of any Group Company for any reason not falling
                  within Rule 4.2 (provided that any relevant Exercise Condition
                  has been satisfied) any Option or Options held by him shall
                  notwithstanding Rule 4.1(a) become and remain capable of
                  exercise subject to the provisions of Rule 5.

         4.4      Upon the death of an Option Holder any Option or Options held
                  by him shall notwithstanding Rule 4.1(a) become and remain
                  capable of exercise by his legal personal representative(s)
                  subject to the provisions of Rule 5.

5        LAPSE OF OPTIONS; NON-TRANSFERABILITY

         5.1      Unless otherwise set forth in the relevant Option Certificate
                  and as permitted by applicable law, insofar as any Option has
                  not previously been exercised each Option shall lapse upon the
                  earliest of the following:

                  (a)      the expiry of ten years from its Date of Grant;

                  (b)      in the event an Option Holder ceases to be an
                           employee of, consultant to or director of any Group
                           Company for any reason set out in Rule 4.2, the
                           expiry of six months from the date of such cessation,
                           or (if the Directors in their absolute



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                           discretion so determine) the expiry of such longer
                           period as the Directors may determine not exceeding a
                           period which expires 3 years and 6 months after the
                           Date of Grant or, if longer, 3 years and 6 months
                           after the last occasion on which the Option Holder
                           last exercised an option in circumstances qualifying
                           for relief from income tax under section 185 (3) of
                           the Act;

                  (c)      in the event an Option Holder ceases to be an
                           employee of, consultant to or director of any Group
                           Company for any reason other than those set out in
                           Rule 4.2, the expiry of thirty (30) days from the
                           date of such cessation, unless at that time an Option
                           is already exercisable under Rule 7 in which case the
                           Option shall remain exercisable for the period
                           specified under that rule and thereafter it shall
                           lapse, or where the Directors shall exercise their
                           discretion under Rule 4.3 or otherwise determine that
                           the Option shall remain exercisable, in which case
                           the Option shall lapse on the expiry of 6 months from
                           the date the Option Holder ceases to be employed
                           within the Group, or (if the Directors in their
                           absolute discretion so determine) the expiry of such
                           longer period as the Directors may determine;

                  (d)      in the event of an Option Holder's death, the expiry
                           of twelve months from the date of the Option Holder's
                           death; or

                  (e)      the date on which the Option lapses pursuant to the
                           provisions of Rules 7, 8 or 9 (as the case may be).

         5.2      Unless determined otherwise by the Directors, an Option Holder
                  shall not be permitted to sell, transfer, pledge or assign any
                  Option, except by will, the laws of descent and distribution
                  or, to the extent applicable, as permitted by Rule 701 of the
                  Securities Act, and all Options shall be exercisable, during
                  the Option Holder's lifetime, only by the Option Holder.

6        EXERCISE OF OPTIONS

         6.1      In order to exercise an Option in whole or in part, the Option
                  Holder (or as the case may be, his personal representative(s))
                  must deliver to the Company a notice in writing in such form
                  as shall from time to time be prescribed by the Directors
                  specifying the number of Shares in respect of which the Option
                  is being exercised accompanied by payment in full for those
                  Shares and his Option Certificate. Such notice shall take
                  effect on the day it, together with the appropriate payment in
                  cleared funds, is delivered to the Company and such day shall
                  constitute, for all purposes, the date of exercise of the
                  Option.

         6.2      An Option may not be exercised unless:

                  (a)      the Directors consider that the issue or transfer of
                           Shares pursuant to such exercise would be lawful in
                           all relevant jurisdictions; and

                  (b)      in a case where, if the Option were exercised, any
                           member of the Group would be obliged to (or would
                           suffer a disadvantage if it were not to) account for
                           any tax or social security contributions (in any
                           jurisdiction) for which the person in question would
                           be liable by virtue of the exercise of that Option or
                           that would be recoverable from that person (together,
                           the "Tax Liability"), that person has either:


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                           (i)     made a payment to the member of the Group of
                                   an amount at least equal to the Company's
                                   estimate of the Tax Liability; or

                           (ii)    entered into arrangements acceptable to that
                                   or another member of the Group to secure that
                                   such a payment is made (whether by
                                   authorising the sale of some or all of the
                                   Shares on his behalf and the payment to the
                                   member of the Group of the relevant amount
                                   out of the proceeds of sale or otherwise)

                  provided that if the Shares are issued or transferred as
                  aforesaid without a payment as referred to in (a) above having
                  been made or arrangements as referred to in (b) above having
                  been entered into, the amount of the Tax Liability shall be
                  treated as a loan to a person who is not a director of the
                  Company and shall be repayable on demand in any event and
                  which any member of the Group shall be entitled to withhold
                  from any remuneration subsequently payable to that person.

         6.3      In the event of an Option being exercised in part only, the
                  balance of the Option not thereby exercised shall continue to
                  be exercisable in accordance with Rule 4 and the provisions of
                  this rule until such time as it shall lapse in accordance with
                  the provisions of Rule 5 and the Company shall issue to the
                  Option Holder an Option Certificate in respect of that part of
                  his Option which the Option Holder had elected not to
                  exercise.

         6.4      As soon as practicable and in any event not more than thirty
                  days after receipt by the Company of such notice, Option
                  Certificate and payment, the Company shall:

                  (a)      in respect of Shares to be issued pursuant to the
                           exercise of an Option, allot and issue credited as
                           fully paid to the Option Holder; or

                  (b)      in respect of Shares to be transferred pursuant to
                           the exercise of an Option, procure the transfer to
                           the Option Holder;

                  and cause to be registered in the name of the Option Holder
                  the number of Shares specified in the notice, and the Company
                  shall deliver to the Option Holder a share certificate in
                  respect of the relevant Shares.

         6.5      Save as regards any rights attaching to the Shares by
                  reference to a record date prior to the date on which any
                  Shares are allotted and issued, the Shares to be allotted upon
                  exercise of an Option shall be identical and rank pari passu
                  in all respects with the fully paid shares of the same class
                  then in issue. Shares transferred upon exercise on an Option
                  pursuant to this Scheme shall be transferred without the
                  benefit of any rights attaching to Shares by reference to a
                  record date prior to the date of exercise.

7        TAKEOVERS, RECONSTRUCTIONS AND AMALGAMATIONS

         7.1      Subject to the provisions of Rule 7.2 if an offer is made to
                  all shareholders to acquire the whole or a majority of the
                  issued Shares (other than those which are already owned by the
                  offeror and/or any persons acting in concert with him), notice
                  thereof shall be given by the Company to all Option Holders,
                  and an Option Holder or (as the case may be) his personal
                  representative(s), shall at any time within six months of the
                  offeror (together with any person acting with him) obtaining
                  Control of the Company be entitled to exercise his Option
                  provided such exercise is before the expiry of the date upon
                  which the Option lapses in accordance with the provisions of
                  Rule 5. All Options remaining unexercised at the expiry of the
                  said period of six months shall lapse.



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         7.2      If, during the period of six months referred to in Rule 7.1
                  the offeror becomes entitled to exercise rights of compulsory
                  acquisition of Shares pursuant to sections 428 to 430F of the
                  Companies Act 1985 and gives notice in writing to all Option
                  Holders; of its intention to exercise such rights as regards
                  all Shares issued pursuant to Options exercised prior to a
                  specified date (not being earlier than one month after the
                  date of such notice), Options shall remain exercisable until
                  the specified date subject always to the provisions of Rule 5.
                  Options shall lapse at the specified date to the extent that
                  they have not then been exercised, subject to such compulsory
                  rights of acquisition in fact being exercised in accordance
                  with such notice.

         7.3      If under section 425 of the Companies Act 1985 the Court
                  sanctions a compromise or arrangement proposed for the
                  purposes of or in connection with a scheme for the
                  reconstruction of the Company or its amalgamation with any
                  other company or companies, notice thereof shall forthwith be
                  given by the Company to all Option Holders and an Option
                  Holder or (as the case may be) his personal representative(s)
                  shall at any time within six months of such compromise or
                  arrangement being sanctioned by the Court be entitled to
                  exercise his Option (provided that such exercise is before the
                  date upon which the Option lapses in accordance with the
                  provisions of Rule 5). All Options remaining unexercised at
                  the expiry of the said period of six months shall lapse.

8        EXCHANGE OF OPTIONS

         8.1      If an Acquiring Company:

                  (a)      obtains Control of the Company as a result of making:

                           (i)     a general offer to acquire the whole of the
                                   issued share capital of the Company (other
                                   than that which is already owned by the
                                   Acquiring Company and/or by its holding
                                   company and/or any subsidiary of it or its
                                   holding company) which is made on a condition
                                   such that if it is satisfied the person
                                   making the offer will have Control of the
                                   Company, or

                           (ii)    a general offer to acquire all the Shares (or
                                   such of the Shares as are not already owned
                                   by the Acquiring Company and/or by its
                                   holding company and/or by any subsidiary of
                                   it or its holding company); or

                  (b)      obtains Control of the Company in pursuance of a
                           compromise or arrangement sanctioned by the Court
                           under action 425 of the Companies Act 1985; or

                  (c)      becomes bound or entitled to acquire the Shares under
                           sections 428 to 430F of the Companies Act 1985

                  any Option Holder may at any time within the Appropriate
                  Period (as defined in Rule. 8.2), by agreement with the
                  Acquiring Company, release each subsisting Option which has
                  not lapsed in accordance with any other provisions of these
                  rules ("the Old Option") in consideration of the grant to him
                  of a new option ("the New Option") which complies with the
                  provisions of Rule 8.3.

         8.2      In Rule 8.1 "the Appropriate Period" means:

                  (a)      in a case falling within Rule 8.1(a), the period of
                           six months beginning with the time when the Acquiring
                           Company has obtained Control of the Company and any
                           condition subject to which the offer is made is
                           satisfied;


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                  (b)      in a case falling within Rule 8.1(b), the period of
                           six months beginning with the time when the Court
                           sanctions the compromise or arrangement; and

                  (c)      in a case falling within Rule 8.1(c), the period
                           during which the Acquiring Company remains bound or
                           entitled as mentioned in that paragraph.

         8.3      The New Option must:

                  (a)      constitute the right to acquire such number of Shares
                           as has on the acquisition of the New Option an
                           aggregate market value equal to the aggregate market
                           value of the Shares the subject of the Old Option on
                           its release (market value for this purpose being
                           determined by agreement, or by the Auditors);

                  (b)      have an Option Price such that the aggregate Option
                           Price payable on complete exercise equals the
                           aggregate Option Price which would have been payable
                           on complete exercise of the Old Option; and

                  (c)      be otherwise identical in terms to the Old Option.

         8.4      The New Option shall, for all other purposes of the Scheme, be
                  treated as having been acquired at the same time as the Old
                  Option for which it is exchanged.

9        WINDING-UP

         9.1      If an effective resolution in general meeting for the
                  voluntary winding-up of the Company is passed before the date
                  upon which an Option lapses, such Option shall thereupon
                  become and shall remain capable of exercise for the period of
                  3 months after such resolution becomes effective (at the end
                  of which period all unexercised Options shall lapse
                  immediately), provided that such Option is so exercised before
                  the date upon which it lapses in accordance with the
                  provisions of Rule 5. If such resolution is duly passed,
                  Option Holders who have previously exercised their Options (or
                  who do so during the said period of 3 months) having duly
                  delivered payment therefor and having delivered their Option
                  Certificate shall be entitled as appropriate to share in the
                  net assets of the Company but all other Options shall lapse.

         9.2      An Option shall lapse immediately in the event of the Company
                  being wound-up otherwise than in the event of a voluntary
                  winding-up.

10       ADJUSTMENT OF OPTIONS

         Upon the occurrence of an Issue or Re-organisation or in the event of
         an any merger, reorganization, consolidation, split-up, spin-off,
         combination, recapitalization, reclassification, stock dividend,
         dividend in property other than cash, exchange of Shares or other
         securities of the Company, stock split, reverse stock split,
         distribution of Shares without the receipt of consideration by the
         Company or any other change in corporate structure affecting the
         Shares, an appropriate substitution or proportionate adjustment shall
         be made in (i) the aggregate number of Shares reserved for issuance
         under this Scheme pursuant to Rule 3.1, and (ii) the kind, number and
         price of Shares subject to outstanding Options granted under this
         Scheme as may be determined by the Directors acting fairly and
         reasonably provided that the number of Shares subject to any Option
         shall always be a whole number. Such other substitutions or
         proportionate adjustments shall be made as may be determined by the
         Directors acting fairly and reasonably. Notice of any such adjustments
         shall be given to the Option Holders by the Directors who may at their
         discretion call in Option Certificates for endorsement or replacement.



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11       EXPENSES

         Any expenses of the Company arising out of introducing and
         administering this Scheme, or involved in any issue of Shares in the
         name of any Option Holder or his personal representative(s), shall be
         payable by the Company.

12       ADMINISTRATION

         Any notification or other notice in writing which the Company is
         required to give, or may desire to give, to any Eligible Person or
         Option Holder (or his personal representative(s)) in pursuance of this
         Scheme shall be sufficiently given if delivered to him by hand or sent
         through the post in prepaid cover addressed to the Eligible Person or
         Option Holder (or his personal representative(s)) at the last address
         known to the Company as being his address. Any certificate,
         notification or other notice in writing required to be given to the
         Company shall be properly given if sent to or delivered to the Company
         at its registered office. Any notification, certificate or other
         notices sent by post shall be deemed delivered on the second day
         following the date of posting. All notices, documents, or certificates
         given by or to an Eligible Person or Option Holder (or his personal
         representative(s)) shall be sent at his risk.

13       GENERAL

         13.1     The Directors shall at all times ensure that there are
                  sufficient Shares available as may be required to meet the
                  subsisting rights of Option Holders by ensuring that the
                  Company shall keep available for allotment unissued Shares at
                  least sufficient to satisfy Options under which Shares may be
                  subscribed for, excluding those Options which are to be
                  satisfied by the transfer and not the issue of Shares.

         13.2     The decision of the Directors in any dispute or question
                  relating to any Option shall be final and conclusive, subject
                  to the written confirmation of the Auditors whenever required
                  under the provisions of this Scheme.

         13.3     Participation in this Scheme by an Option Holder is a matter
                  entirely separate from and shall in no manner affect his
                  pension rights or entitlement or his terms or conditions of
                  employment. In particular (but without limitation) any Option
                  Holder who ceases to be employed within the Group shall not be
                  entitled to any compensation for loss of any right or benefit
                  or prospective right or benefit under this Scheme which he
                  might otherwise have enjoyed whether such compensation is
                  claimed by way of damages for wrongful dismissal or breach of
                  contract or by way of compensation for loss of office or
                  otherwise howsoever.

         13.4     During the period any Options granted to Eligible Persons
                  remain outstanding, such Eligible Persons shall be entitled to
                  receive, on at least an annual basis, financial statements of
                  the Company. The Directors shall exercise their discretion
                  with regard to the nature and extent of the financial
                  information so provided, giving due regard to the size and
                  circumstances of the Company and, if the Company provides
                  annual reports to its shareholders, the Company's practice in
                  connection with such annual reports. Notwithstanding the
                  above, if the grant of Options is limited to key employees
                  whose duties in connection with the Group Company assure their
                  access to equivalent information, this Section 13.4 shall not
                  apply to such employees.



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<PAGE>
14       MODIFICATIONS AND ALTERATIONS TO THIS SCHEME; SHAREHOLDER APPROVAL AND
         SHAREHOLDER RIGHTS

         14.1     The Rules may at any time and in any respect be modified or
                  altered by resolution of the Directors provided that no
                  alteration or addition shall be made which would abrogate or
                  alter adversely the subsisting rights of an Option Holder,
                  unless it is made with the consent in writing of such number
                  of Option Holders as hold Options under the Scheme to acquire
                  75 per cent of the Shares which would be issued or transferred
                  if all Options granted and subsisting under the Scheme were
                  exercised or by a resolution at a meeting of Option Holders
                  passed by not less than 75 per cent of the Option Holders who
                  attend and vote either in person or by proxy. For the purposes
                  of this Rule the Option Holders shall be treated as the
                  holders of a separate class of share capital and the
                  provisions of the articles of association of the Company
                  relating to class meetings shall apply mutatis mutandis.

         14.2     The grant of Options under this Scheme is conditioned on
                  approval of this Scheme by the vote or consent of the holders
                  of a majority of the outstanding Shares of the Company within
                  12 months of the date that this Scheme is adopted by the
                  Directors, and no Option granted hereunder shall be effective
                  or exercisable unless and until this Scheme has been so
                  approved. Any Option exercised before approval of this Scheme
                  by the holders of a majority of the outstanding Shares of the
                  Company is obtained must be rescinded if such approval is not
                  obtained within 12 months before or after this Scheme is
                  adopted by the Directors. Such Shares underlying the Options
                  shall not be counted in determining whether such approval is
                  obtained.

         14.3     In accordance with Rule 260.140.41(l) of Title 10 of the
                  California Code of Regulations it is hereby noted that,
                  subject to the Company's Articles of Association as amended
                  from time to time, Shares issued pursuant to this Scheme carry
                  equal voting rights with all other Shares issued by the
                  Company. This is without prejudice to the Company's ability to
                  alter, amend or replace its Articles of Association from time
                  to time in accordance with applicable provisions of English
                  law.

15       TRUSTEES

         The Company and any Subsidiary may provide money to the trustees of any
         trust or . any other person to enable him to acquire shares to be held
         for the purposes of the Scheme, or enter into any guarantee or
         indemnity for these purposes, to the extent permitted by section 153 of
         the Companies Act 1985.

16       TERMINATION

         The Directors may at any time resolve to terminate this Scheme in which
         event no further Options shall be granted but the provisions of this
         Scheme shall in relation to Options then subsisting continue in full
         force and effect.

17       GOVERNING LAW

         This Scheme and all Options granted pursuant to it shall be governed by
         and construed in accordance with English law.



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