DATED                                                          1998



















                       THE HUNTINGDON LIFE SCIENCES GROUP

                         UNAPPROVED SHARE OPTION SCHEME



















                                 Charles Russell
                              8-10 New Fetter Lane
                                 London EC4A 1RS

                               Ref: TL/MC/25407/3


<PAGE>


                                      INDEX


                          (for reference purposes only)


Rule     Heading                                                Page Number


1.       DEFINITIONS AND INTERPRETATION                              1

2.       GRANT OF OPTIONS                                            6

3.       SCHEME LIMITS                                               9

4.       PERSONAL LIMITS                                             9

5.       EXERCISE AND LAPSE OF OPTIONS                              10

6.       TAKEOVERS AND LIQUIDATIONS                                 12

7.       VARIATION OF SHARE CAPITAL                                 13

8.       MANNER OF EXERCISE OF OPTIONS                              14

9.       TAXATION                                                   15

10.      ADMINISTRATION AMENDMENT AND TERMINATION                   16

SCHEDULE 1                                                          18
----------

SCHEDULE 2                                                          20
----------

SCHEDULE 3                                                          21
----------



<PAGE>



                   RULES OF THE HUNTINGDON LIFE SCIENCES GROUP

                         UNAPPROVED SHARE OPTION SCHEME


                             Adopted on       1998



<PAGE>



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;

     "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 6.1 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 6.2 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 6.3 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 Scheme
                                   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"        1998 being the date of adoption of this
                                   Scheme 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 Scheme;

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

         "Eligible Participant"    (a) 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

                                   (b)  any  other  employee  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;

         "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"               an option granted under Rule 2.1 as
                                        appropriate an 'A' Option, a 'B' Option,
                                        a 'C' Option or a 'D' Option;

         "Group"                        the Company and company under the
                                        Control of the Company;

         "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 where the
                                         context so  requires  shall
                                         include  a  Founder  Option
                                         and New Options  granted as
                                         consideration    for    the
                                         release  of Old  Options in
                                         accordance with Rule 6;

         "Option Agreement"              the  agreement  dated [ ] 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;

         "Option                         Period"  in  respect of any
                                         Option,    other   than   a
                                         Founder  Option  the period
                                         between  the  Date of Grant
                                         and the first date on which
                                         the     Option      becomes
                                         exercisable  in  accordance
                                         with    the     Performance
                                         Conditions   set   by   the
                                         Remuneration      Committee
                                         pursuant to Rule 2.7;

         "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 Scheme;

         "Performance Conditions"        the conditions imposed by the
                                         Remuneration  Committee in respect of
                                         an Option,  other than a Founder
                                         Option, pursuant to Rule 2.7;

         "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 Scheme;

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

         "Scheme"                        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 6.4
                                          and  7) in  the  case  of a
                                          Founder  Option  12.5 pence
                                          per   Share  and  in  every
                                          other  case 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) paid
                                          or payable to that Eligible
                                          Participant      by     the
                                          Participating  Company  and
                                          all Associated Companies of
                                          that Participating  Company
                                          in that period; and

         "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.   GRANT OF OPTIONS

2.1  Subject to the limitations and conditions  hereinafter  contained,  the
     Remuneration  Committee  shall on or as soon as reasonably  practicable
     after the Date of Adoption grant,  without  consideration  four Options
     each at the  Subscription  Price and over an equal  number of Shares as
     shall be  determined  by the  Remuneration  Committee to such  Eligible
     Participants  selected at its  discretion and each such Option shall be
     designated  as an 'A'  Option,  a 'B'  Option,  a 'C'  Option and a 'D'
     Option  respectively  provided that no Founder  Option shall be granted
     after 31 December 1998.

2.2  The exercise of a Founder Option shall be subject to the following
     conditions:

      2.2.1    the  'A'  Option  shall  become  exercisable  on  the  seventh
               consecutive  Dealing Day on which,  but not until,  the Market
               Value of a Share is 25 pence per Share;

      2.2.2    the  'B'  Option  shall  become  exercisable  on  the  seventh
               consecutive  Dealing Day on which,  but not until,  the Market
               Value of a Share is 50 pence per Share;

      2.2.3    the  'C'  Option  shall  become  exercisable  on  the  seventh
               consecutive  Dealing Day on which,  but not until,  the Market
               Value of a Share is 75 pence per Share; and

      2.2.4    the  'D'  Option  shall  become  exercisable  on  the  seventh
               consecutive  Dealing Day on which,  but not until,  the Market
                  Value of a Share is 100 pence per Share

       provided that the Market Value of a Share on any Dealing Day before 1st
       January  1999 shall be ignored in applying  the above  conditions  and,
       subject to Rules 5.4, 5.5, 6, a Founder Option shall not be exercisable
       before the third  anniversary of a Date of Grant.  For the avoidance of
       doubt a Founder  Option shall be  exercisable  in  accordance  with the
       rules of this Scheme if the condition applicable to that Founder Option
       under this Rule 2.2 has been  previously  satisfied  regardless  of the
       Market  Value of a Share on the date on which  the  Founder  Option  is
       exercised.

2.3    Subject  to  Rule  2.1  the  limitations  and  conditions   hereinafter
       contained and unless  prohibited by law the  Remuneration  Committee on
       behalf of the Company may, in its absolute discretion,  within a period
       of 42  days  immediately  following  an  Announcement  Date  or Date of
       Adoption grant without  consideration Options to any number of Eligible
       Participants provided that:

         2.3.1    no Eligible Participant shall be entitled as of right to the
                  grant of an Option;

         2.3.2    no Option may be granted to an Eligible Participant within
                  2 years preceding his Expected Retirement Date; and

         2.3.3    no Option  may be granted under this Scheme after the tenth
                  anniversary of the Date of Adoption.

2.4   An Option shall be granted by a resolution of the Remuneration Committee.

2.5   Notwithstanding  the provisions of Rule 2.3 the Remuneration  Committee
      may 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 grant of
      Options at that time.

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.

2.7   Each Option,  other than a Founder Option, shall be granted so that its
      exercise  shall be subject to such objective  conditions  ("Performance
      Conditions")  (not  inconsistent with the provisions of the Scheme ) as
      the  Remuneration  Committee may in its absolute  discretion  think fit
      provided that:

      2.7.1  such conditions  shall be designed to ensure that the exercise
             of  an  Option  is  made  subject  to  the   attainment  of  a
             significant  and  sustained   improvement  in  the  underlying
             financial performance of the Company during the Option Period;

      2.7.2  such conditions shall not be inconsistent  with the provisions
             of the Scheme and may be waived or amended if an event  occurs
             which causes the Remuneration  Committee to consider that such
             Performance  Conditions could not fairly or reasonably be met,
             provided  that any amended  conditions  should be neither more
             difficult nor easier to satisfy than the original  Performance
             Conditions   were   intended  to  be  at  the  time  of  their
             imposition; and

      2.7.3  such conditions shall extend over a continuous period of at least
             three years.

2.8  The  Remuneration  Committee  may in  its  absolute  discretion  impose
     conditions  on the grant of an  Option,  other  than a Founder  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 Options have been granted the
     Board shall issue an Option  certificate  substantially in the form set
     out in Schedule 2 in respect of each Option which shall specify:

     2.9.1    the number of Shares comprised in the Option;

     2.9.2    the Date of Grant;

     2.9.3    the Subscription Price;

     2.9.4    save in the case of a Founder Option, details of the Performance
              Conditions; and

     2.9.5    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.

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. Any purported transfer, assignment, charge, pledge or other
      disposal  or dealing  with the Option  shall  cause the Option to lapse
      forthwith and each Option  certificate  shall carry a statement to this
      effect.

3.    SCHEME LIMITS

3.1   No Option, other than a Founder 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 Scheme,  excluding  Founder Options,  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,  for the  avoidance  of doubt,  excluding  any
      rights  granted  under the Option  Agreement,  to exceed such number of
      shares as represents 10 per cent of the issued  ordinary  share capital
      of the Company immediately prior to the Date of Grant.

3.2   No Option, other than a Founder 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 Scheme,  excluding  Founder Options,  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, for the avoidance of doubt, excluding any rights granted under the
      Option  Agreement,  to exceed such number of shares as represents 5 per
      cent of the issued  ordinary  share capital of the Company  immediately
      prior to the Date of Grant.

3.3   The  aggregate  number of Shares  that may be the  subject  of  Founder
      Options  granted  under the  Scheme and any  rights  granted  under the
      Option Agreement shall not exceed 14,550,000 Shares.

4.    PERSONAL LIMITS

4.1   Save in the case of a Founder  Option,  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  Market  Value of the Shares he may acquire  pursuant to that
      Option when added to the aggregate  Market Value of Subsisting  Options
      previously  granted  under the Scheme  (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  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.

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 Schemes 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.

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  where  an  Option   Holder  dies  his  personal
      representatives may exercise any unexercised Options held by him within
      12 months of the date of death.

5.5   Where an Option Holder ceases to be an Eligible Participant:

      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.

5.6  Save where Rules 5.4,  5.5 or 6 apply the  exercise of any Option shall
     be conditional  upon the relevant  Performance  Conditions  having been
     fulfilled to the satisfaction of the  Remuneration  Committee or in the
     case of a Founder Option, subject to the conditions of Rule 2.2.

5.7  The Company shall notify each Option Holder in writing on each occasion
     that the accounts of the Company are distributed to its shareholders as
     to whether or not the  Performance  Conditions  have been  satisfied in
     respect of the then immediately preceding 3 year period.

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 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  If any person obtains Control of the Company as a result of making a
     general offer:

     6.1.1    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

     6.1.2    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.

6.2  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.

6.3  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.

6.4 If as a result of the  events  specified  in Rules 6.1 or 6.2 a company
    has obtained Control of the Company or if a company has become bound or
    entitled as mentioned in Rule 6.3 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:

    6.4.1    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;

    6.4.2    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

    6.4.3 it is otherwise identical in terms to the Old Option.

     The New Option  shall for all other  purposes of this Scheme 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 6.4 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 6.4 Old Options are released and New Options granted the
     New Options shall not be exercisable in accordance  with Rules 6.1, 6.2
     and 6.3 above by virtue of the event by reason of which the New Options
     were granted.

6.5   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.

6.6   For the purposes of this Rule 6 other than Rule 6.4 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.

6.7   The exercise of an Option  pursuant to the preceding  provisions of this
      Rule 0 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  Option  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 the Performance  Conditions 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  Shares  shall be allotted  and issued  pursuant to a notice of exercise
     within 42 days of the exercise date. 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
     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 Scheme  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 Scheme 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 Scheme 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 Scheme 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 or in 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.

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.

10.  ADMINISTRATION AMENDMENT AND TERMINATION

10.1 The Scheme 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 (a) in  the  case  of a
             Founder Option, the holder of that Founder Option and
             (b) in every  other  case such  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 the grant of Options
              or alter to the  advantage  of Option  Holders
              (present  or future)  Rules 2.1,  2.2,  2.3,  2.7, 3, 4, 7 or
              the  definitions  of  "Eligible  Participant",
              "Participating  Company" or "Subscription  Price" except for
              minor amendments to benefit the  administration
              of the Scheme,  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 Scheme 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  Scheme  in which  event no  further  Options  shall be
      granted but the  provisions  of this Scheme 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.



<PAGE>


                                   SCHEDULE 1

                                 Letter of Grant

                           [The Company's Letterhead]

                                                              Date

To:       Eligible Participant


Dear  [name of Eligible Participant]

THE HUNTINGDON LIFE SCIENCES GROUP UNAPPROVED SHARE OPTION SCHEME
("the Scheme")




<PAGE>


1     The  Directors  have  granted  you  [an/four]   option[s]   [designated
      'A'/'B'/'C'/'D'  Options  respectively] over [ ] ordinary shares [each]
      ("Shares") in the capital of Huntingdon  Life Sciences  Group plc ("the
      Company")  under and subject to the rules of the Scheme ("the  Option")
      which  was  approved  and  adopted  by  a  written  resolution  of  the
      shareholders of the Company on 199 . [Each of your options is a Founder
      Option  for the  purposes  of the  Rules.]  A copy of the  rules of the
      Scheme is enclosed herewith.

2     The subscription  price per Share payable on the exercise of the Option
      is [12.5]/[]p.  This subscription  price is subject to adjustment under
      Rule 7 of the  Scheme if the  Company's  share  capital  is  altered or
      re-organised, in specified ways.

3     An Option certificate for[each of] your option[s] is enclosed herewith.

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

5    [The  Option may not be  exercised  unless the  Performance  Conditions
     attached to this letter have been fulfilled to the  satisfaction of the
     Remuneration Committee except in certain circumstances permitted by the
     rules.][Your  Founder  Option  may not be  exercised  unless the Market
     Value of the Shares is equal to or exceeds the  relevant  target  price
     specified in the relevant option certificate.  You should refer to Rule
     2.2 in connection with this.]

6    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.

7    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].


Yours faithfully,


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


[NOTE:   Performance Conditions must 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 [ ]

                    TOTAL NUMBER OF ORDINARY SHARES OF p EACH

               INCLUDED IN THIS ['A'/'B'/'C'/'D'] OPTION (number)



This is to certify that (name) was granted an  ['A'/'B'/'C'/'D']  Option on the
day of to  subscribe  for ordinary  shares of [ ]p each in the  capital  of the
Company  ("Shares") at a Subscription  Price of [12.5P]/[  ]per Share giving an
aggregate  Subscription Price of (pound) upon the terms of the Huntingdon  Life
Sciences Group Unapproved Share Option Scheme ("the scheme"). The Option may be
exercised only at the times and in the circumstances and manner permitted by the
rules of the Scheme and cannot be  transferred, assigned,  charged,  pledged or
otherwise disposed of or dealt with. Any purported transfer, assignment, charge,
pledge or other  disposal  or  dealing with  shall  cause  the  Option to lapse
forthwith.

[This  ['A'/'B'/'C'/'D']  Option is subject to the conditions specified in Rule
2.2 and cannot be  exercised until the Market  Value of a Share is equal to or
more than 25/50/75/100 pence.]


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

Director

Secretary


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

NOTE:


<PAGE>



(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
     Scheme.

(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 Performance 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


                                FORM OF EXERCISE


The Secretary
Huntingdon Life Sciences Group plc


I,  the  undersigned,  having  become  entitled  so to do  hereby  exercise  the
['A'/'B'/'C'/'D']  Option referred to overleaf in respect of Shares comprised in
the Option upon the terms of the Huntingdon Life Sciences Group Unapproved Share
Option  Scheme ("the  Scheme") 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
Scheme  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 .......................................

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


<PAGE>


Note:


<PAGE>





(1)   Although  the Option  referred  to  overleaf  is personal to the holder
      named overleaf it may be exercised 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.