DATED                                                   1999



















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            THE HUNTINGDON LIFE SCIENCES GROUP INCENTIVE OPTION PLAN
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                                 Charles Russell
                              8-10 New Fetter Lane
                                 London EC4A 1RS
                               Tel: 0171 203 5000
                               Ref: TL/MC/37971/3


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                                      INDEX

                          (for reference purposes only)


Rule     Heading                                                   Page Number

1     DEFINITIONS AND INTERPRETATION.....................................1
2     OPERATION OF THE PLAN AND THE GRANT OF OPTIONS.....................4
3     PLAN LIMITS........................................................7
4     PERSONAL LIMITS....................................................8
5     EXERCISE AND LAPSE OF OPTIONS......................................9
6     TAKEOVERS AND LIQUIDATIONS........................................10
7     VARIATION OF SHARE CAPITAL........................................12
8     MANNER OF EXERCISE OF OPTIONS.....................................12
9     TAXATION..........................................................13
10    ADMINISTRATION AMENDMENT AND TERMINATION..........................14
SCHEDULE 1..............................................................16
SCHEDULE 2..............................................................18
SCHEDULE 3..............................................................19



<PAGE>

                   RULES OF THE HUNTINGDON LIFE SCIENCES GROUP

                              INCENTIVE OPTION PLAN


                             Adopted on 3 June 1999


1.      DEFINITIONS AND INTERPRETATION

1.1     In these Rules the following words and  expressions  shall (except where
        the context otherwise requires) have the following meanings:

         "Act"
         the Companies Act 1985

         "Accounting Period"
         an accounting reference period of the Company

         "Announcement Date"
         the date on which the annual or half-yearly results of the Company are
         announced

         "Appropriate Period"
(i)           if the  circumstances  in Rule 6.2  apply  the  period  of six
              months  beginning with the date on which the person making the
              offer has  obtained  Control of the Company and any  condition
              subject to which the offer is made has been satisfied;
(ii)          if the circumstances in Rule 6.3 apply the period of six months
              beginning with the date on which the
              Reconstruction Scheme is sanctioned by the Court;
(iii)         if the circumstances in Rule 6.4 apply the period during which
              the person  remains bound or entitled to acquire any shares in
              the Company

         "Associated Company"
         the same meaning as in Section 416 of the Taxes Act

         "Auditors"
         the  auditors  for the time being of the  Company  appointed  pursuant
         to section  384 of the Act and
         acting as experts and not as arbitrators

         "Board"
         the Board of  directors  for the time being of the Company or a duly
         appointed  committee  thereof at
         which a quorum is present

         "Company"
         Huntingdon Life Sciences Group plc (registered in England and Wales
         number 502370)

         "Company Share Schemes"
         the Plan and any other share option or profit  sharing  share scheme of
         the Company or of any Associated Company whether or not approved by the
         Inland Revenue

         "Control"
         the  same  meaning  as in  Section  840 of the  Taxes  Act and the
         expression  "controlled"  shall be
         construed accordingly

         "Date of Adoption"
         3 June 1999 being the date of adoption of this Plan by the Company

         "Date of Grant"
         in  relation  to any  Option  means the date on which the Option is
         granted or was or is to be granted
         under the Plan

         "Dealing Day"
         a day on which the London Stock Exchange is open for business

         "Eligible Participant"
         any   employee,   including   an  employee  who  is  a  director  of  a
         Participating Company, who is required by his contract of employment to
         devote  substantially  the whole of his working time to the business of
         the Group or any Group Member

         "Expected Retirement Date"
         the date on which an  Eligible  Participant  is  expected  to retire in
         accordance  with  the  terms  of  his  contract  of  employment  with a
         Participating Company

         "Founder Option"
         a Founder  Option  granted under the Huntingdon  Life Sciences  Group
         Unapproved  Share Option Scheme
         adopted by the Company on 2 September 1998

         "Group"
         the Company and any company under the Control of the Company and the
         expression  "Group Member" shall be construed accordingly

         "London Stock Exchange"
         the London Stock Exchange Limited

         "Market Value"
         in respect of any Share on any day means either:
(a)               (when on that day the  shares of that  class are listed on the
                  official list of the London Stock  Exchange) the middle market
                  quotation of such a Share as derived  from the Daily  Official
                  List  of  the  London  Stock  Exchange  for  the  Dealing  Day
                  immediately preceding that day; or
(b)               in all  other  cases  the  market  value  of such a  Share  as
                  determined in accordance  with the  provisions of part VIII of
                  the Taxation of Chargeable Gains Act 1992

         "Option"
         a  right  to  subscribe  for  Shares  granted  (or  to be  granted)  in
         accordance  with these Rules and New Options  granted as  consideration
         for the release of Old Options in accordance with Rule 6

         "Option Agreement"
         the agreement dated 2 September 1998 and made between the Company (1)
         and Andrew H Baker(2)

         "Option Holder"
         any person who has been granted an Option or where the context requires
         a person becoming  entitled to an Option in consequence of the death of
         an Option Holder

         "Participating Company"
         the Company and any other  company of which the Company has Control and
         which is for the time being authorised by the Remuneration Committee to
         participate in this Plan

         "Performance Measure"
         a measure  as to the  performance  of the Group,  or a  relevant  Group
         Member or any division or unit  thereof,  or any number of employees of
         the Group or a Group Member

         "Performance Measure Period"
         an  Accounting  Period in respect of which the  Remuneration Committee
         resolves  to operate the Plan pursuant to Rule 2.1

         "Personal Performance Conditions"
         any performance condition specific to the relevant Eligible Participant
         imposed  pursuant to Rule 2.4.3

         "Remuneration Committee"
         the committee consisting wholly or mainly of non-executive directors of
         the Company and chaired by a  non-executive  director and having formal
         responsibility for the operation of the Plan

         "Rules"
         the rules of the Plan as set out herein and as amended from time to
         time

         "Plan"
         the employee share option scheme constituted and governed by these
         Rules as from time to time amended

         "Share"
         an ordinary share of 5p in the capital of the Company

         "Subscription Price"
         the price at which each Share  subject to an Option may be  acquired on
         the  exercise  of that  Option  being  (subject to Rules 6.5 and 7) not
         lower than the higher of:

         (i)      the nominal value of a Share; and
(ii)     the Market Value of a Share on the Date of Grant

         "Subsisting Option"
         an Option to the extent that it has not been exercised, lapsed or
         cancelled

         "Tax Liability"
         any liability of the Company or any company which  Controls or is under
         the  Control  of the  Company to  account  for any income tax  National
         Insurance  Contributions or other tax arising in relation to the grant,
         exercise or other dealing with or in relation to an Option

         "Taxes Act"
         the Income and Corporation Taxes Act 1988

         "Total Remuneration"
         in relation to any  Eligible  Participant  and in any period where that
         Eligible  Participant  is an  employee  or officer  of a  Participating
         Company  the  remuneration  (exclusive  of benefits in kind but for the
         avoidance  of doubt,  including  any cash amount  paid to the  Eligible
         Participant)  paid or  payable  to  that  Eligible  Participant  by the
         Participating   Company   and   all   Associated   Companies   of  that
         Participating Company in that period

         "Vesting Scale"
         the scale,  if any, by  reference to which the  Remuneration  Committee
         shall  determine  the  number  of  Shares  that  shall  continue  to be
         comprised in an Option pursuant to Rule 2.9

         "Year of Assessment"
         a year beginning on any 6 April and ending on the following 5 April
1.2     Any  reference in these Rules to any  provision of any Act of Parliament
        or any  subordinate  legislation  made pursuant to any Act of Parliament
        shall  be  deemed  to be a  reference  to  such  Act  of  Parliament  or
        subordinate  legislation  as amended  modified  or  re-enacted  (whether
        before or after the date hereof).
1.3     In these Rules words incorporating the masculine gender only include the
        feminine and neuter genders and words  incorporating the singular number
        only include the plural and vice versa.
1.4     Rule headings are for ease of reference only and do not affect the
        construction or  interpretation  of these Rules.
1.5     References  to writing shall include  typewriting  printing  lithography
        photography and facsimile  messages and other modes of reproducing words
        in a legible and non-transitory form.
2       OPERATION OF THE PLAN AND THE GRANT OF OPTIONS
2.1     The  Remuneration  Committee  may,  not  later  than 42 days  after  the
        approval of the Plan by the Company in general meeting,  in its absolute
        discretion  resolve to operate the Plan in  relation  to the  Accounting
        Period current at that date and thereafter may so resolve not later than
        42 days after an  Announcement  Date to operate  the Plan in relation to
        any subsequent Accounting Period and if the Remuneration Committee shall
        so resolve,  it shall not later than the said 42 days after the approval
        of the Plan, or as appropriate, an Announcement Date:

2.1.1   select Eligible Participants for the grant of Options; 2.1.2 in respect
        of each such Eligible Participant selected under Rule 2.1.1:

2.1.2.1               determine the Performance Measure provided that
                      the  Performance  Measure  shall be designed to
                      ensure  that  the  grant of an  Option  is made
                      subject  to  the  attainment  of a  significant
                      improvement   in   the   underlying   financial
                      performance   of   the   Company   during   the
                      Performance Measure Period;
2.1.2.2               determine the Personal Performance Conditions, if
                      any, which shall apply to him;
2.1.2.3               having  regard  to  Rules  3 and 4  subject  to
                      adjustment in accordance with Rules 2.1.2.4 and
                      2.9 , the  number of Shares in respect of which
                      an Option shall be granted under Rule 2.1.3 and
                      the Subscription Price that shall be payable on
                      the exercise of the Option;
2.1.2.4               set the Vesting Scale,  if any to apply, on the
                      basis of which the  number of Shares in respect
                      of which an Option shall remain  subsisting  at
                      the end of the  Performance  Measure  Period in
                      relation to that  Option and where  appropriate
                      the  number of Shares in  respect  of which the
                      Option may be exercised pursuant to Rule 6; and
2.1.3                 in  respect  of each such  Eligible  Participant  selected
                      under  Rule 2.1.1 and as  permitted  by the Model Code and
                      the  rules of the  London  Stock  Exchange  grant  without
                      consideration   an  Option  subject  to  the   Performance
                      Measure, any applicable Personal  Performance  Conditions,
                      prospective  adjustment in accordance  with any applicable
                      Vesting Scale and the Rules

         provided that:

2.1.4    an Option shall lapse in its entirety if:
(a)      the  Performance  Measure is not met,  where a Vesting Scale applies,
         in accordance  with the Vesting  Scale; or
(b)      the  Personal  Performance  Conditions  are not met  where  the  Option
         is  subject  to such  Personal Performance Conditions

                       in each  case  to the  satisfaction  of the  Remuneration
                       Committee  (and for the  avoidance of doubt,  the partial
                       lapse of an Option under Rule 2.4.2,  shall not in itself
                       cause  an  Option  to lapse in its  entirely  under  this
                       Rule);
2.1.5    no Eligible  Participant  shall be entitled as of right to participate
         in the Plan or to the grant of any Options;
2.1.6    no Eligible  Participant  shall be granted an Option within 2 years
         preceding his Expected  Retirement Date; and
2.1.7    no Option may be granted under this Plan after the tenth anniversary
         of the Date of Adoption.
2.2      An Option shall be granted by a resolution of the  Remuneration
         Committee on the same day as the date on which the Remuneration
         Committee selects Eligible Participants under Rule 2.1.
2.3      Notwithstanding  the  provisions  of Rule 2.1, the  Remuneration
         Committee may resolve to Operate the
          Plan and grant Options outside the 42 day period mentioned  therein in
          circumstances  which  the  Remuneration   Committee  in  its  absolute
          discretion deems sufficiently  exceptional to justify the operation of
          the Scheme and the grant of Options at that time.
2.4       As soon as  reasonably  practicable  after the matters  referred to in
          Rules 2.1 and 2.2 have been completed the Remuneration Committee shall
          notify  (by a  notice  substantially  in the  form  of the  notice  in
          Schedule 1) each Eligible Participant selected pursuant to Rules 2.1.1
          respectively of:
2.4.1    the grant of an Option to him;
2.4.2                 the Performance  Measure applicable in relation to him and
                      that if the  Performance  Measure  is not met  during  the
                      Performance  Measure  Period,  the Option  shall  lapse in
                      whole  or in part and to the  extent  that it  lapses,  it
                      shall be treated as if it had never been granted;
2.4.3 the Personal Performance Conditions,  if any, applicable to him; and 2.4.4
the effect of Rule 2.1.4.
2.5        The  Performance  Measure  and any  Personal  Performance  Conditions
           imposed under Rule 2.1.2 may be waived or amended by the Remuneration
           Committee   at  any  time  if  an  event   occurs  which  causes  the
           Remuneration  Committee to consider that such Performance  Measure or
           as appropriate such Personal Performance  Conditions could not fairly
           or reasonably be met, provided that any amended  Performance  Measure
           or Personal  Performance  Conditions should be neither  significantly
           more  difficult  nor easier to satisfy than the original  Performance
           Measure or Personal Performance Conditions were intended to be at the
           time of their imposition.
2.6       An Option Holder may,  within a period of twenty one days  immediately
          following  the Date of Grant,  renounce  by notice in  writing  to the
          Company his Option in respect of all or any part of the Shares subject
          of the Option and in which case that Option  shall be deemed  never to
          have been granted to the extent so renounced.
2.7       Subject to Rules 5.4 and 5.5, each Option shall be granted so that its
          exercise  shall be subject to the Option  Holder  continuing  to be an
          Eligible  Participant  throughout the period between the Date of Grant
          and the date on which the Option is exercised in  accordance  with the
          Rules.
2.8       The  Remuneration  Committee  may in its  absolute  discretion  impose
          conditions on the grant of an Option  restricting the number of Shares
          in respect of which an Option may be exercised on any one occasion.
2.9       As soon as  reasonably  practicable  after the end of the  Performance
          Measure  Period in respect of an Option,  the  Remuneration  Committee
          shall determine:
2.9.1             the extent to which the Performance Measure has been satisfied
                  in respect of the Option and the number of Shares  which shall
                  continue to be comprised in the Option in accordance  with the
                  Vesting  Scale set under Rule 2.1.2.4 such that the balance of
                  Shares originally comprised in the Option shall cease to be so
                  comprised  and the  Option  shall  be  deemed  to be  adjusted
                  accordingly; and
2.9.2    whether or not the Personal Performance Conditions, if any, have been
         satisfied

           and,  unless the Option  lapses in  accordance  with Rule 2.1.4,  the
           Remuneration  Committee shall or shall procure that the Company shall
           notify the Option Holder  concerned of the adjustment so deemed to be
           made to his Option and issue an Option  certificate  substantially in
           the form set out in Schedule 2 in respect of each Option  which shall
           specify:
2.9.3    the number of Shares that continue to be comprised in the Option;
2.9.4    the Date of Grant;
2.9.5    the Subscription Price; and
2.9.6               the last date upon which  notice to exercise  the Option may
                    be given, being not later than the day immediately preceding
                    the tenth anniversary of the Date of Grant

          PROVIDED  THAT to the extent that Shares  cease to be  comprised in an
          Option, or the Option lapses in accordance with Rule 2.1.4, the Option
          shall be deemed not to have been  granted ab initio in respect of such
          Shares and the Option Holder concerned shall have no rights whatsoever
          in respect of such Shares.
2.10      An  Option  shall be  personal  to the  Option  Holder  and may not be
          transferred,  assigned,  charged,  pledged or otherwise disposed of or
          dealt with (other than its exercise in accordance with the Rules). Any
          purported transfer,  assignment,  charge,  pledge or other disposal or
          dealing  (other than its exercise in  accordance  with the Rules) with
          the Option shall cause the Option to lapse  forthwith  and each Option
          certificate  shall in relation to the Option carry a statement to this
          effect.
3        PLAN LIMITS
3.1      No Option shall be granted if immediately following such grant it would
         cause the  aggregate  of the number of Shares which have been or remain
         to be issued on the exercise of Options  granted under the Plan and the
         number of shares of the Company  which have been or remain to be issued
         pursuant to rights  granted under any other Company Share Scheme in the
         preceding 10 years but excluding Founder Options and any rights granted
         under the Option  Agreement and any shares that have been issued before
         the Date of  Adoption  upon the  exercise of rights  granted  under any
         other  Company  Share  Scheme,  to  exceed  such  number  of  shares as
         represents  the aggregate of 10 per cent of the issued  ordinary  share
         capital  of the  Company  immediately  prior to the Date of Grant  plus
         1,550,000 Shares.
3.2      No Option shall be granted if immediately following such grant it would
         cause the  aggregate  of the number of Shares which have been or remain
         to be issued on the exercise of Options  granted under the Plan and the
         number of shares of the Company  which have been or remain to be issued
         pursuant to rights  granted in the  preceding  10 years under any other
         share option scheme (other than a savings  related share option scheme)
         but excluding  Founder  Options and any rights granted under the Option
         Agreement  and any  shares  that have been  issued  before  the Date of
         Adoption  upon the  exercise  of rights  granted  under any other share
         option scheme (other than any savings related share option scheme),  to
         exceed such number of shares as  represents  the  aggregate  of 7.5 per
         cent of the issued  ordinary  share capital of the Company  immediately
         prior to the Date of Grant plus 1,550,000 Shares.
3.3      For the  avoidance  of doubt,  where and to the  extent  that an Option
         lapses or is renounced in  accordance  with the Rules and to the extent
         that Shares  cease to be  comprised  in an Option by virtue of Rule 2.9
         the  number  of  Shares   comprised   the  Option   before  its  lapse,
         renunciation  or that cease to be comprised in it shall be  disregarded
         for the purposes of this Rule 3.
4        PERSONAL LIMITS
4.1     The  number of Shares in  respect  of which an Option is  granted  to an
        Eligible  Participant shall be limited, and the Option shall take effect
        so and to the extent that the aggregate Subscription Price of the Shares
        he may acquire pursuant to the exercise of that Option when added to the
        aggregate Market Value of the Shares Comprised in the Subsisting Options
        previously  granted  under the Plan (which for the purposes of this Rule
        4.1 shall  also  include  cancelled  Options)  to him and the  aggregate
        market value of shares he may acquire pursuant to any other  unexercised
        rights  (excluding any Founder Options) obtained under any other Company
        Share Scheme  (other than a savings  related  share  option  scheme or a
        profit sharing scheme) shall not exceed or further exceed four times the
        Eligible  Participant's  Total  Remuneration  for the Year of Assessment
        current at the Date of Grant or, if the Eligible  Participant was not an
        Eligible  Participant at the beginning of that Year of Assessment,  four
        times the Eligible  Participant's  Total  Remuneration for the period of
        twelve  months  beginning  with  the  first  day  during  that  Year  of
        Assessment on which he became an Eligible Participant.
4.2     For the purposes of this Rule 4 Market Value of Shares shall mean in the
        case of rights granted under other Company Share Scheme the market value
        of the  shares  subject  to such  rights at the time of the grant of the
        right as calculated in accordance with the rules of the relevant Company
        Share Scheme.
4.3     For the  avoidance  of  doubt,  where and to the  extent  that an Option
        lapses or is  renounced in  accordance  with the Rules and to the extent
        that Shares cease to be comprised in an Option by virtue of Rule 2.9 the
        number of Shares comprised the Option before its lapse,  renunciation or
        that cease to be comprised in it shall be  disregarded  for the purposes
        of this Rule 4.
5        EXERCISE AND LAPSE OF OPTIONS
5.1      Subject to this Rule 5 and Rules 6 and 8 an Option may be  exercised at
         any time on or  after  the  third  anniversary  and  before  the  tenth
         anniversary of its Date of Grant.
5.2     An Option shall not be exercisable on or after the tenth  anniversary of
        its  Date  of  Grant  under  any  circumstances   whatsoever  and  every
        Subsisting  Option shall lapse on the tenth  anniversary  of its Date of
        Grant.
5.3     The right to exercise an Option  shall  terminate  immediately  upon the
        Option Holder ceasing to be an Eligible  Participant  except where Rules
        5.4 or 5.5 apply.
5.4     Subject to Rule 5.2 and Rule 5.6 where an Option  Holder  dies after the
        end of the  Performance  Measure  Period  applicable  to his  Option his
        personal  representatives  may exercise any unexercised  Options held by
        him within 12 months of the date of death.
5.5     Subject to Rule 5.2 and Rule 5.6, where an Option Holder ceases to be an
        Eligible  Participant  after the end of the  Performance  Measure Period
        applicable to his Option:
5.5.1    by reason of:
5.5.1.1  injury, disability or pregnancy; or
5.5.1.2  redundancy;
5.5.1.3  retirement on or after the Expected Retirement Date;
5.5.1.4  the  company by which the  Option  Holder is  employed  ceasing to be a
         Participating  Company;  or 5.5.1.5 the  transfer  of the  business in
         which the Option Holder is employed to a person other than a
         Participating Company; or

5.5.2             where the  circumstances are not as described in Rules 5.5.1.1
                  to 5.5.1.5  and the  Remuneration  Committee  in its  absolute
                  discretion  decides  not later  than 30 days after the date on
                  which the Option Holder  ceases to be an Eligible  Participant
                  to allow that Option Holder to exercise any Subsisting  Option
                  then held by him

         any Subsisting Option may be exercised no later than 6 months after the
         date of such  cessation  and for the purposes of this Rule 5.5 a female
         Option Holder shall not cease to be an Eligible  Participant  if absent
         from work because of  pregnancy  until and upon such time as she ceases
         to be entitled to exercise her right to return to work.
5.6     Where,  but for this Rule 5.6,  the event by virtue of which Rule 5.4 or
        Rule 5.5 would apply occurs between the end of the  Performance  Measure
        Period  and  the  date  on  which  the  Remuneration  Committee  makes a
        determination pursuant to Rule 2.9, the Option shall:
5.6.1    not be exercisable if it lapses by virtue of Rule 2.1.4; or
5.6.2             be exercisable in respect of the number of Shares  adjusted in
                  accordance  with Rule 2.9.1 or if no  adjustment  is made,  in
                  respect of all the Shares comprised in the Option.
5.7     Save where Rules 5.4 or 5.5 apply the  exercise  of any Option  shall be
        conditional upon the conditions  imposed pursuant to Rule 2.7 and, where
        appropriate  Rule 2.8 having been fulfilled to the  satisfaction  of the
        Remuneration Committee.
5.8      An Option shall lapse upon the earliest  occurrence of any of the
        following  events  insofar as it has
        not been exercised:
5.8.1    the tenth anniversary of the Date of Grant;
5.8.2    the first anniversary of the Option Holder's death;
5.8.3             the expiry of 6 months from the date on which an Option Holder
                  ceases to be an Eligible Participant where Rule 5.5 applies;
5.8.4    the earliest date upon which the Option is expressed to lapse under
         Rule 5.3 or Rule 6;
5.8.5    the date of an event specified in Rule 2.10; or
5.8.6    the Option Holder being adjudicated bankrupt.
6        TAKEOVERS AND LIQUIDATIONS
6.1      Where any event as a result of which an Option  becomes  exercisable by
         virtue  of this Rule 6 occurs  before  the  expiry  of the  Performance
         Measure  Period in relation to that Option (but,  for the  avoidance of
         doubt,  not  where  such  event  occurs  after  the  expiry of the said
         Performance Measure Period), the Option may not be exercised unless and
         to the extent  the  relevant  Performance  Measure  and any  applicable
         Personal Performance Conditions have been satisfied to the satisfaction
         of the Remuneration Committee and where any Vesting Scale is applicable
         to an Option, the Remuneration  Committee shall determine the number of
         Shares in respect of which an Option may be exercised  pursuant to this
         Rule 6 by reference to that Vesting Scale.
6.2      If any person obtains Control of the Company as a result of making a
         general offer:
6.2.1    to  acquire  the  whole  of the  issued  ordinary  share  capital of
         the  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
6.2.2    to acquire all the shares in the Company which are of the same class
         as the Shares

         then subject to the remaining  provisions of this Rule 6 any Subsisting
         Option may be exercised within the Appropriate Period and to the extent
         that it has not been exercised by the end of the Appropriate Period the
         Option shall lapse immediately upon the end of the Appropriate Period.
6.3     In the event that notice is given to the  shareholders of the Company of
        a resolution to approve  (subject to sanction by the Court) 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  pursuant to Section 425 of the Act ("the
        Reconstruction  Scheme")  then any  Option  Holder  may serve  notice to
        exercise  his  Subsisting  Options at any time  during  the  Appropriate
        Period and to the extent  that an Option has not been  exercised  by the
        end of the Appropriate Period it shall lapse immediately upon the end of
        the Appropriate Period.
6.4     If any person becomes bound or entitled to acquire Shares in the Company
        under Sections 428 to 430F of the Act then any Subsisting  Option may be
        exercised  at any time during the  Appropriate  Period and to the extent
        that it has not been exercised by the end of the Appropriate  Period the
        Option shall lapse immediately upon the end of the Appropriate Period.
6.5     If as a result of the events specified in Rules 6.2 or 6.3 a company has
        obtained  Control  of the  Company or if a company  has become  bound or
        entitled as mentioned in Rule 6.4 the Board shall seek the  agreement of
        that other  company  ("the  Acquiring  Company") or a company  which has
        Control  over the  Acquiring  Company and if such  agreement is obtained
        each unexercised Option ("Old Option") may within the Appropriate Period
        applicable  to the  relevant  Rule be released in  consideration  of the
        grant of a new Option ("New  Option") to acquire shares in the Acquiring
        Company or a company  which has Control of the  Acquiring  Company which
        satisfies the following conditions:
6.5.1             it is a right to acquire  such number of such shares as has on
                  acquisition of the New Option an aggregate  Market Value equal
                  to the aggregate Market Value of the Shares subject to the Old
                  Option on its disposal;
6.5.2             it has a subscription  price per share such that the aggregate
                  price payable on complete  exercise equals the aggregate price
                  which would have been payable on complete  exercise of the Old
                  Option; and
6.5.3    it is otherwise identical in terms to the Old Option.

         The New Option shall for all other  purposes of this Plan be treated as
         having   been   acquired  at  the  same  time  as  the  Old  Option  in
         consideration  of the  release of which it is granted and where any New
         Options are  granted  pursuant to this Rule 6.5 Rules 5, 6, 7, 8 and 10
         and all  definitions  in Rule 1 as  appropriate in those Rules shall in
         relation  to the New  Options  be  construed  as if  references  to the
         Company and to the Shares were  references  to the company  whose share
         capital  includes shares over which the New Option has been granted and
         to the shares in that company but references to a Participating Company
         shall  continue to be  construed as if  references  to the Company were
         references to Huntingdon  Life Sciences  Group plc. Where in accordance
         with this Rule 6.5 Old Options are released and New Options granted the
         New Options shall not be exercisable in accordance  with Rules 6.2, 6.3
         and 6.4 above by virtue of the event by reason of which the New Options
         were granted.
6.6      In the event that notice is given to the shareholders of the Company of
         a resolution to be proposed for the voluntary winding up of the Company
         any Option Holder may serve notice to exercise his  Subsisting  Options
         at any time up to the passing of the resolution  provided that any such
         notice to exercise shall only be effective if the resolution is passed.
         If such resolution is duly passed all Options shall, to the extent that
         they have not been exercised, lapse.
6.7      For the  purposes of this Rule 6 other than Rule 6.5 a person  shall be
         deemed to have obtained Control of a Company if he and others acting in
         concert with him have together obtained Control of it.
6.8      The  exercise of an Option  pursuant to the  preceding  provisions of
         this Rule 6 shall be subject to the provisions of Rule 8 below.
7        VARIATION OF SHARE CAPITAL

         In the event of any  variation  in the share  capital of the Company by
         way of capitalization or rights issue or any consolidation sub-division
         or  reduction  of capital or  otherwise  by the  Company  the number of
         Shares  subject to any Option  and the  Subscription  Price for each of
         those Shares shall be adjusted by the  Remuneration  Committee  subject
         (except in the case of a capitalization) to written confirmation by the
         Auditors that in their opinion such  adjustment is fair and  reasonable
         provided that:
7.1     the aggregate amount payable on the exercise of an Option in full is not
         increased;  and 7.2 the Subscription  Price for a Share is not reduced
         below its nominal value.
8        MANNER OF EXERCISE OF OPTIONS
8.1      No Option shall be exercisable save in accordance with the then current
         Model Code for Securities Transactions by Directors of Listed Companies
         issued by the London Stock Exchange.
8.2      Subject  to the  provisions  of Rule 5 and this Rule 8 an Option may be
         exercised  at  any  time  in  whole  or in  part  but  not  unless  the
         Remuneration Committee otherwise permits in respect of less than 10 per
         cent of the Shares the subject of the original Option (where  relevant,
         as  adjusted  in  accordance  with  Rule  2.9.1)  unless  such  smaller
         percentage  represents all the remaining Shares under the Option by the
         Option  Holder  or (as the  case may be) his  personal  representatives
         giving a notice of exercise to the  Company  substantially  in the form
         set out in Schedule 3 accompanied  by the  appropriate  payment and the
         relevant  Option  certificate and shall be effective on the date of its
         receipt  by  the  Company  ("exercise  date")  provided  that  wherever
         relevant  any  conditions  imposed  pursuant  to Rule  2.7  and,  where
         appropriate   Rule  2.8  shall  first  have  been   fulfilled   to  the
         satisfaction of the Remuneration Committee.
8.3      No Option shall be capable of being quoted or dealt in on any stock
         exchange.
8.4      Subject  to Rules 9.2 and 9.3,  Shares  shall be  allotted  and  issued
         pursuant to a notice of exercise  within 42 days of the  exercise  date
         (or such date  which is the later of the date on which (a) the  payment
         referred to in Rule 9.2 is received by the  relevant  company;  and (b)
         the Board is satisfied  that the sale  referred to in Rule 9.3 has been
         completed.  Save  for any  rights  determined  by  reference  to a date
         preceding the date of allotment  such Shares shall rank pari passu with
         the other  shares of the same  class in issue at the date of  allotment
         and  will  be  subject  to  all  the  provisions  of  the  Articles  of
         Association of the Company relating to voting,  dividends,  transfer or
         otherwise.
8.5      When an Option  is  exercised  only in part the  balance  shall  remain
         exercisable on the same terms as originally applied to the whole Option
         and a new Option  certificate  representing the balance shall be issued
         by the Company as soon as possible after the partial exercise.
8.6      Where relevant, within 28 days after Shares have been allotted pursuant
         to the exercise of an Option the Company shall make  application to the
         Council of the London Stock  Exchange for the admission to the Official
         List of the Shares allotted and issued following such exercise.
8.7      It shall be a condition of  participation in the Plan that in the event
         of an Option Holder ceasing to be an Eligible Participant (for whatever
         reason) he shall not be  entitled  to any  compensation  whatsoever  by
         reason of any termination or alteration of rights or expectations under
         the Plan  whether  such  compensation  is claimed by way of damages for
         wrongful  dismissal  or  breach  of  contract  or for loss of office or
         otherwise howsoever.  Participation in this Plan by an Option Holder is
         a matter entirely separate from any pension right or entitlement he may
         have and from his terms or conditions of employment  and  participation
         in this Plan shall in no respects  whatever affect in any way an Option
         Holder's  pension  rights  or  entitlement  or terms or  conditions  of
         employment.
9        TAXATION
9.1      If a Tax Liability  arises in respect of an Option the Company shall be
         entitled to deduct to the extent  permitted by law such  amount(s) from
         any payment due to be made by the Company or any company which controls
         or is  controlled  by the Company to or in respect of the Option Holder
         in  respect of that  Option  during  the same  calendar  month or other
         relevant  period  in which  the  event  occurs  and/or  any  subsequent
         calendar  month  or such  relevant  period  in  order  to  satisfy  and
         discharge the Tax Liability whether or not such payment is of an income
         or capital nature.
9.2      If and to the extent the Tax  Liability  referred  to in Rule 9.1 is of
         income tax which  exceeds the amount from which  deductions  in respect
         thereof  can be made  in any  one  period  referred  to in Rule  9.1 in
         respect of the Option Holder concerned, that Option Holder shall pay or
         reimburse  the Company for the amount of the excess on demand or within
         such  period as may be  specified  in any written  notice  given by the
         Company  and the  Company  shall not be  obliged to issue and allot any
         Shares  upon the  exercise  of an  Option  until it has  received  such
         payment.
9.3      Where a Tax  Liability  arises in respect of the exercise of an Option,
         the Board may, without prejudice to the Company's rights under Rule 9.1
         and Rule 9.2, by written notice to the Option Holder concerned nominate
         as his bare trustee any person (the "Bare Trustee") to sell such number
         of Shares  issued upon the exercise of the Option as may be required in
         order to discharge the Tax Liability and any other liability (including
         costs)  connected  with the said sale and the Bare Trustee shall pay an
         amount  equal  to the  Tax  Liability  to  the  Company  and  otherwise
         discharge any other said  liability to the extent that the net proceeds
         from the said sale  permit.  The Company  shall not be obliged to issue
         and allot any Shares upon the exercise of an Option until the said sale
         has been completed to the satisfaction of the Board.
10       ADMINISTRATION AMENDMENT AND TERMINATION
10.1    The Plan shall be administered by the Remuneration  Committee whose
        decision on all disputes shall be final.
10.2    The Board may from time to time make amendments to these Rules provided
        that:
10.2.1   no  amendment  may  detrimentally  affect an Option  Holder as
         regards any  Subsisting  Option held by him on the date of the
         amendment  being made  except  with the  consent in writing of
         Option  Holders who,  assuming they exercise  their Options in
         full,  would  thereby  become  entitled to not less than three
         quarters in nominal  amount of all the Shares which would fall
         to be  allotted  upon  exercise  in  full  of  all  Subsisting
         Options; and
10.2.2   except with the prior  sanction of the Company in general  meeting no
         such  modification  or variation shall  extend  the class of person
         eligible  for  participation  in the Plan or the grant of
         Options or alter to the advantage of Option Holders  (present or
         future) Rules 2.1, 2.5, 2.7, 2.8,  2.9,  2.10,  3, 4 to 7, 8.7, 10.1
         and this Rule 10.2 or the  definitions  of "Eligible Participant",
         "Participating Company" or "Subscription Price" except for minor
         amendments to benefit the  administration  of the Plan, to comply
         with or take  account of any proposed or existing  legislation or
         law or to obtain or maintain  favourable  tax,  exchange  control or
         regulatory  treatment  for  Option  Holders  (present  or  future) or
         for any  Participating Company; and
10.2.3   written notice of any alteration  made in accordance  with this Rule
         10.2 shall be given to all Option Holders.
10.3     The cost of  establishing  and operating the Plan shall be borne by the
         Participating   Companies  in  such  proportions  as  the  Board  shall
         determine.
10.4     The Company in general  meeting or the Board may at any time resolve to
         terminate this Plan in which event no further  Options shall be granted
         but the  provisions of this Plan shall continue in force in relation to
         Subsisting Options.
10.5     The Company shall at all times keep available sufficient authorised and
         unissued  Shares to  satisfy  the  exercise  to the full  extent  still
         possible  of all  Options  which  have  neither  lapsed  nor been fully
         exercised  taking  account of any other  obligations  of the Company to
         issue unissued Shares.
10.6     Any  notice to be given  pursuant  to the terms of these  Rules must be
         given in  writing to the party due to  receive  such  notice at (in the
         case of the Company) its registered office from time to time or (in the
         case of an individual) his address as notified to the Company from time
         to time.  Notice must be  delivered  personally  or sent by first class
         pre-paid recorded delivery or registered post (air mail if overseas) or
         by facsimile  transmission  and shall be deemed to be given in the case
         of delivery  on delivery  and in the case of posting (in the absence of
         evidence of earlier  receipt)  within 48 hours after posting (6 days if
         sent  by air  mail)  and in  the  case  of  facsimile  transmission  on
         completion of transmission.
10.7     The Rules shall be governed by and construed in accordance with English
         Law and English Courts shall have the exclusive jurisdiction as regards
         any claim or matter arising in relation to the Rules.


<PAGE>


                                   SCHEDULE 1

                         NOTICE OF OPERATION OF THE PLAN
                                & LETTER OF GRANT


Dear [            ]

THE HUNTINGDON LIFE SCIENCES GROUP INCENTIVE OPTION PLAN ("The Plan")

1        The Remuneration  Committee has granted you an option over [ ] ordinary
         shares [each]  ("Shares")  in the capital of  Huntingdon  Life Sciences
         Group plc ("the  Company")  under and  subject to the rules of the Plan
         ("the  Option")  which was approved and adopted by a resolution  of the
         shareholders  of the Company on 3 June 1999. A copy of the rules of the
         Plan is enclosed herewith.

2        You will only be able to exercise your option if in the accounting
         period of the Company ending on [    ]:

2.1      the Performance Measure described below are achieved [; and

2.2      you satisfy the Personal Performance conditions described below.


         If either the  Performance  Measure  [(in  accordance  with the Vesting
         Scale below)] or the Personal Performance  Conditions are not satisfied
         your  Option  will  lapse and will be  treated  as if it had never been
         granted.]


         [If the  Performance  Measure is not  achieved  in full,  the number of
         Shares in  respect of which your  Option  will  remain in force will be
         determined in accordance  with the Vesting Scale also set out below. As
         the Vesting Scale shows, your option will not be exercisable in respect
         of any  Shares if  [describe  by  reference  to the  Vesting  Scale the
         circumstances in which the Option will not be exercisable at all].]

3        If you cease to be employed by [the  Company]  before  [specify date on
         which the  Performance  Measure  Period ends] your Option will lapse in
         its entirety.

4        The subscription  price per Share payable on the exercise of the Option
         is [ ]p. This subscription  price is subject to adjustment under Rule 7
         of the Plan if the Company's share capital is altered or  re-organised,
         in specified ways.

5        If after  [specify date on which the  Performance  Measure Period ends]
         your Option remains a Subsisting Option, an Option certificate for your
         Option will be sent to you for the number of Shares that remain in your
         Option.

6        Under  the  rules  of  the  Plan  ("the  rules"),   except  in  certain
         circumstances  the Option may not be exercised earlier than three years
         from the Date of Grant.

7        [The Option may not be exercised unless the conditions attached to this
         letter have been  fulfilled  to the  satisfaction  of the  Remuneration
         Committee except in certain circumstances permitted by the rules.]

8        The Option shall not be  exercisable  save in accordance  with the then
         current  Model Code for  Security  Transactions  by Directors of Listed
         Companies issued by the London Stock Exchange.

9        You  should  note  that any  rights  under  Plan  you may have  will be
         entirely separate from your contract of employment and you should refer
         to Rule 8.7.

10       You may  renounce  the  Option in whole or in part by  signing  (in the
         presence of a witness)  and  returning  this letter  together  with the
         enclosed  Option  certificate to me before [date 21 days after the Date
         of Grant].

11       Any expression defined in the rules shall have the same meaning in this
         letter and if there is any conflict  between this letter and the rules,
         the rules will prevail.


Yours faithfully,

 .....................
Secretary

                               PERFORMANCE MEASURE


                                  VESTING SCALE



[PERSONAL PERFORMANCE CONDITIONS]


[NOTE:   Any conditions imposed under Rule 2.8 must also be attached to this
letter]



                                  RENUNCIATION

I [PRINT NAME] hereby renounce the Option [in whole]/[in  respect of Shares]. I
am returning with this letter the  certificate in respect of the Option referred
to above.


SIGNED as a DEED by
[NAME]
in the presence of:


Signature:

Name:

Address:

Occupation:




<PAGE>



                                   SCHEDULE 2

                           Option Certificate Number:

---------------------------------------------------------------------------

                      Incorporated under the Companies Acts

               Registered in England and Wales under Number 502370

                   TOTAL NUMBER OF ORDINARY SHARES OF 5p EACH

                        INCLUDED IN THIS OPTION (number)
---------------------------------------------------------------------------

This is to certify that                     (name)  was  granted  an Option on
the  [specify  original  date of grant]            day of            to
subscribe for         ordinary  shares of 5p each in the capital of the Company
("Shares") at a Subscription Price of [      ]per Share giving an aggregate
Subscription Price of(pound) upon the terms of the  Huntingdon  Life Sciences
Group  Incentive  Option Plan ("the  Plan").  The  Option  may  be  exercised
only  at the  times  and in the circumstances  and  manner  permitted  by the
rules of the Plan and  cannot  be transferred,  assigned,  charged, pledged or
otherwise disposed of or dealt with (other than its exercise in accordance with
the Rules). Any purported  transfer, assignment,  charge,  pledge or other
disposal or dealing  with (other than its exercise  in  accordance  with  the
Rules)  shall  cause  the  Option  to lapse forthwith.


THE COMMON SEAL of
HUNTINGDON LIFE
SCIENCES GROUP plc
was affixed to this deed
in the presence of:

                                    Director

                                    Secretary


Date .........................

NOTE:

(1)      A form of exercise on the Option is printed  overleaf.  This
         certificate  must be  surrendered on the
         exercise, in whole or in part, of the Option.

(2)      The number and/or  description  of shares covered by this Option and/or
         the  Subscription  Price may be varied in accordance  with the Rules of
         the Plan.

(3)      Notice  to  exercise  this  Option  must be given by [date no  later
         than the day  before  the  tenth anniversary of the Date of Grant].

(4)      [The  right  to  exercise  this  Option  shall  be  subject to the due
         satisfaction of the conditions specified on the attached sheet.]




<PAGE>



                                   SCHEDULE 3

                                Form of Exercise

                (TO BE PRINTED ON REVERSE OF OPTION CERTIFICATE)
                 PLEASE READ THE NOTES AT THE FOOT OF THIS FORM
                         CAREFULLY BEFORE COMPLETING IT

The Secretary
Huntingdon Life Sciences Group plc

I, the  undersigned,  having become entitled so to do hereby exercise the Option
referred to  overleaf  in respect of  ...............  Shares  comprised  in the
Option upon the terms of the  Huntingdon  Life Sciences Group  Incentive  Option
Plan  ("the  Plan") and agree to accept  the  Shares to be  allotted  and issued
pursuant  to  this  Form of  Exercise  subject  to and in  accordance  with  the
Memorandum  and Articles of Association of the Company and hereby request you to
place my name on the Register of Members in respect thereof.

I enclose a  remittance  for  (pound)  being the  aggregate  Subscription  Price
payable  for the Shares in respect of which the Option is now  exercised  at the
Subscription Price per Share specified overleaf.

For the avoidance of doubt,  I hereby agree that Rule 9 of the rules of the Plan
may be applied by the  Company and the Board at their  discretion  in respect of
the Option hereby exercised.

If applicable,  I hereby request you to despatch a balance  certificate  for the
Option to subscribe for any Shares  included in the Option  referred to overleaf
and not exercised on this occasion,  by post at my risk to the address mentioned
below.


Signature .....................................


Surname ......................................


Forename(s) .................................


Address .......................................

 ...................................................


Note:

(1)      Although  the Option  referred  to  overleaf  is personal to the holder
         named  overleaf  it may be  exercised  (subject  to  Rule  5.6)  by his
         personal  representative(s)  if he dies  while it is still  capable  of
         exercise provided the personal  representative(s) does/do so before the
         expiration of twelve months from the date of the holder's  death or ten
         years  from the date of its grant (if  sooner).  If there are more than
         one, each of the personal representatives must sign this form.

(2)      Options must be exercised in respect of whole numbers of Shares. Please
         indicate the number of Shares you wish to  subscribe  on this  occasion
         which must not exceed the number of Shares comprised in the Option.  In
         any event you will be deemed to have  exercised  your rights in respect
         of that whole number of Shares which can be subscribed  with the moneys
         represented by your remittance.

(3)      The  remittance  should  be  for  an  amount  equal  to  the  aggregate
         Subscription  Price,  being the  Subscription  Price  per  Share  shown
         overleaf, multiplied by the number of Shares applied for.

(4)      Please  note that  before  any  shares  are  allotted  to you,  any tax
         liability that arises on the exercise of your Option may be required to
         be satisfied by the Board.