HUNTINGDON LIFE SCIENCES GROUP PLC







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                                  RULES OF THE

                    HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME
                -------------------------------------------------




                  Adopted by the  Company on 3 June 1999 and  amended on 21 July
                  1999 Approved by the Inland  Revenue on 23 July 1999 under ref
                  SRS2378/ELW







                                 Arthur Andersen
                                 Betjeman House
                                 104 Hills Road
                                    Cambridge
                                     CB2 1LH
                                Tel: 01223 353906
                                  Ref: PHM/smw


<PAGE>


                                    CONTENTS


                                                                        Page

1.     Definitions and Interpretation                                    1
       1.1      Definitions
       1.2      Interpretation
2.     Application for Options                                           1
3.     Scaling down                                                      4
4.     Grant of Options                                                  5
5.     Option Price                                                      6
6.     Number of Shares in respect of which Options may be granted       6
7.     Rights of Exercise and Lapse of Options                           8
8.     Exchange of Options                                              12
9.     Exercise of Options                                              13
10.    Adjustment of Options                                            15
11.    Administration                                                   16
12.    Amending the Scheme                                              17
13.    General                                                          19
       Appendix of definitions                                          22


<PAGE>

             RULES OF THE HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions:  The words  and  expressions  in this  Scheme  which  have
         capital  letters  have the  meanings set out in Rule 8 and the Appendix
         and words and expressions  not otherwise  defined have the same meaning
         they have in the Taxes Act.

1.2      Interpretation:  In the Rules:
         ----------------             -

         1.2.1    the headings are for the sake of  convenience  only and should
                  be ignored when construing the Rules;

         1.2.2    references to any statutory provisions are to those provisions
                  as amended, extended or re-enacted from time to time and shall
                  include any regulations made under them; and

         1.2.3    the  Interpretation  Act 1978 shall  apply to these Rules with
                  the necessary changes as if they were an Act of Parliament.

2.       APPLICATION FOR OPTIONS

2.1      Applications:  The Grantor may invite  applications  for Options at the
         Option Price from all Eligible Employees.  Where the Grantor is not the
         Company,  the  Grantor  may only  invite  applications  with the  prior
         written consent of the Board and subject to any conditions specified in
         that consent.

2.2      Time  when  invitations  may be made:  Invitations  shall  only be made
         within 42 days starting on:

         2.2.1    the day on which the Scheme is approved by the Inland Revenue;

         2.2.2    the day  immediately  following  the day on which the  Company
                  makes an  announcement  of its results for the last  preceding
                  financial year, half-year or other period;

         2.2.3    any day on which the  Board  resolves  that  exceptional
                  circumstances  exist which justify the grant of Options;

         2.2.4    any  day  on  which  changes  to  the  legislation   affecting
                  savings-related  share option  schemes  approved by the Inland
                  Revenue under the Taxes Act is proposed or made;

         2.2.5   any day on which a new  Savings  Contract  prospectus  is
                 announced  or takes effect;

         2.2.6   the day following the lifting of any restriction on the grant
                 of any Option imposed by statute, order,regulation or directive
                 or by any code  adopted  by the  Company  based on the  London
                 Stock  Exchange's   model  code  on  directors'   dealings  in
                 securities; and/or

         2.2.7   the day immediately following any general meeting of the
                 Company

         and shall not be granted after the Scheme Period.

2.3      Form of  invitation:  Any  invitation  made under Rule 2 shall be in
         writing  and shall include details of:

         2.3.1    eligibility;

         2.3.2    the Option Price;

         2.3.3    the date by which  applications  made  under  Rule 2.5 must be
                  received,  (being neither  earlier than 14 days nor later than
                  25 days after the Date of Invitation);

         2.3.4    whether Eligible Employees may take out a 3, 5 or 7 year
                  Savings Contract;

         2.3.5    whether,  for the purposes of determining the number of Shares
                  over which an Option is to be granted,  Eligible Employees may
                  elect for the  repayment  under  the  Savings  Contract  to be
                  taken:

                  (i)      as including the  maximum  bonus  payable in respect
                           of the Savings Contract;

                  (ii)     as  including  only the  standard  bonus  payable in
                           respect of the Savings Contract;

                  (iii)   as not including a bonus; and

         2.3.6    the maximum permitted Monthly Contribution,

         and the Grantor may determine and include in the invitation  details of
         the maximum number of Shares over which Options are to be granted.

2.4    Proposal  for a Savings  Contract:  Each  application  for an Option must
       incorporate  or be  accompanied  by a  proposal  for a Savings  Contract.
       Proposals  for a  Savings  Contract  shall  be  limited  to such  bank or
       building society as the Board may designate.

2.5      Form of application:  An application for an Option shall:
         --------------------

         2.5.1    be in writing in such form as the Board may  prescribe  but
                  shall  provide for the Eligible Employee to state:-

                  (i)     the  Monthly  Contribution  (being a multiple
                          of(pound)1 and not less than the  Minimum
                          Contribution)  which he wishes to make under the
                          related Savings Contract;

                  (ii)    that his proposed  Monthly  Contributions  (when taken
                          together with any Monthly  Contribution he makes under
                          any  other  Savings  Contract)  will  not  exceed  the
                          Maximum Contribution; and

                  (iii)   if he may elect for the  repayment  under the  Savings
                          Contract  as  contemplated   under  Rule  2.3.5,   his
                          election in that respect.

         2.5.2    provide  that,  in the  event  of  excess  applications,  each
                  application shall be deemed to have been modified or withdrawn
                  in  accordance  with the steps  taken by the  Grantor to scale
                  down applications under Rule 3.

         2.5.3    be deemed to be for an Option over the largest whole number of
                  Shares  which can be  acquired  at the  Option  Price with the
                  expected  repayment  (including any relevant  bonus) under the
                  related Savings Contract at the appropriate Bonus Date.

2.6      Modification  of  application   and  proposal:   If  there  are  excess
         applications, each application for an Option and proposal for a Savings
         Contract  shall  be  deemed  to  have  been  altered  or  withdrawn  in
         accordance with Rule 3.

3.       SCALING DOWN

3.1      When and how scaling  down  operates:  If valid  applications  are
         received for a total number of Shares in excess  of any  maximum
         number of Shares  determined  by the Board  under  Rule  2.3 or  any
         limitation  under  Rule  6,  the  Grantor  shall  scale  down
         applications by taking,  at its absolute  discretion,  one of the
         following steps until the number of Shares  available  equals or
         exceeds  the  number of Shares  applied  for (provided  always that
         in reducing the number of Shares  applied  for, any  adjustments
         shall ensure that an Eligible  Employee's  Monthly  Contribution
         remains a multiple of (pound)1):

         3.1.1    by treating any  elections  for the maximum bonus as elections
                  for  the  standard  bonus  payable  in  respect  of a  Savings
                  Contract  and  then,  so far as  necessary,  by  reducing  the
                  proposed Monthly Contributions pro rata to the excess over the
                  Minimum Contribution and then, so far as necessary,  selecting
                  by lot; or

         3.1.2    by treating  each  election  for a bonus as an election for no
                  bonus and then, so far as necessary,  by reducing the proposed
                  Monthly  Contributions pro rata to the excess over the Minimum
                  Contribution and then, so far as necessary,  selecting by lot;
                  or

         3.1.3    by reducing the proposed Monthly Contributions pro rata to the
                  excess  over the  Minimum  Contribution  and  then,  so far as
                  necessary selecting by lot.

3.2      Insufficient  Shares: If the number of Shares available is insufficient
         to enable an Option based on Monthly Contributions equal to the Minimum
         Contribution  to be granted to each  Eligible  Employee  making a valid
         application,  the Board may, as an  alternative  to  selecting  by lot,
         determine in its absolute discretion that no Options shall be granted.

3.3      Modification  of scaling  down  method:  If the Board so  decides,  the
         provisions in Rule 3.1.1, 3.1.2 and 3.1.3 may be modified or applied in
         any manner as may be agreed in advance with the Inland Revenue.

3.4      Extending period for granting Options:  If in applying the scaling down
         provisions  contained in this Rule 3, Options  cannot be granted within
         the 30 day period referred to in Rule 4.2 below, the Grantor may extend
         that period by 12 days.

4.       GRANT OF OPTIONS

4.1      No Option grant:  No Option shall be granted to any person if:

         4.1.1    at the  Date  of  Grant  that  person  shall  have  ceased
                  to be an  Eligible Employee; or

         4.1.2    that person has or has had any time within the 12 month period
                  preceding the Date of Grant a Material  Interest in the issued
                  ordinary share capital of a Close Company which is:

                     (i)   the Company; or

                     (ii)  a company  which has  Control  of the  Company or
                           is a Member of a Consortium which owns the Company.

4.2      Option  grant:  Within 30 days of the first Dealing Day by reference to
         which the Option  Price was fixed  (which date  shall,  subject to Rule
         3.4,  be within  the  relevant  period in Rule  2.2) the  Grantor  may,
         subject  to Rule 3  above,  grant  to each  Eligible  Employee  who has
         submitted  a valid  application  an Option in  respect of the number of
         Shares for which he has applied.

4.3      Option certificates and payment for Options:  There shall be no payment
         for the grant of an Option. The Grantor shall procure the issue to each
         Participant  of an option  certificate  in such form (not  inconsistent
         with the  provisions  of the Scheme) as the Board may from time to time
         prescribe, specifying:

         4.3.1    the Date of Grant of the Option;

         4.3.2    the number of Shares over which the Option is granted;

         4.3.3    the Bonus Date; and

         4.3.4    the Option Price.

4.4      Options  personal  to  Participants:  An  Option  is  personal  to  the
         Participant  to whom it is  granted  and may  not,  nor any  rights  in
         respect of it, be  transferred  or  otherwise  disposed of to any other
         person  except that,  on the death of a  Participant,  an Option may be
         transmitted to his personal representatives.

4.5      Individual  limit:  No Eligible  Employee shall be granted an Option to
         the extent that it would at the  proposed  Date of Grant  result in the
         total amount of his contributions under all Savings Contracts exceeding
         the Maximum Contribution.

4.6      Approvals  and consents:  The grant of an Option  shall,  following the
         admission of the Shares to the Daily  Official List of the London Stock
         Exchange,  be subject to  obtaining  any  approval or consent  required
         under the  provisions of the Listing Rules of the London Stock Exchange
         or of the City code on  Take-Overs  and  Mergers  or of any  applicable
         regulations on enactments.

5.       OPTION PRICE

5.1      The Board's  decision:  The Board shall  decide the Option Price which
         shall be stated at the Date of Grant.

5.2      Calculating the Option Price:  The Option Price shall not be less than:

         5.2.1    80 per cent.  of the Market  Value of a Share on the Dealing
                  Day  immediately preceding  the Date of  Invitation  (or,
                  if the Board so  determines,  80 per cent.  of  the  average
                  of  the  Market  Values on the three Dealing  Days immediately
                  preceding the Date of  Invitation or 80 percent of the Market
                  Value at such other time or times as may be previously agreed
                  in writing with the Inland Revenue); and

         5.2.2    if the Shares are to be subscribed, their nominal value;

         but subject to any adjustment pursuant to Rule 10.

6.       NUMBER OF SHARES IN RESPECT OF WHICH OPTIONS MAY BE GRANTED

6.1      The 10 per cent. limit over 10 years: The number of Shares which may be
         allocated  under the  Scheme on any day shall  not,  when  added to the
         aggregate  of the  number of Shares  which have been  allocated  in the
         previous  10 years  under the  Scheme  and any other  Employees'  Share
         Scheme adopted by the Company,  exceed such number as represents 10 per
         cent. of the ordinary share capital of the Company in issue immediately
         prior to that day plus 1,550,000 Shares.

6.2      Adjustments to these limits: In calculating the above limits in Rule 6;

         6.2.1    any Shares  allocated under  option(s)  granted by the Company
                  to the trustees of any Employee Benefit Trust shall be
                  included;

         6.2.2    no  account  shall be taken of any  Shares  where the right to
                  acquire  such  Shares was  released  or lapsed  without  being
                  exercised;

         6.2.3    no account  shall be taken of any rights  granted  under the
                  Option  Agreement  and any Founder Options;

6.2.4             no account  shall be taken of any Shares that have been issued
                  before the date on which the Scheme is adopted by the  Company
                  upon the exercise of rights granted under any other Employees'
                  Share Scheme.

6.3      Meaning of allocation:  References in this Rule to the  "allocation" of
         Shares shall mean, in the case of any share option scheme,  the placing
         of  unissued  shares  under  option  and, in relation to other types of
         Employees' Share Scheme, shall mean the issue and allotment of shares.

7.       RIGHTS OF EXERCISE AND LAPSE OF OPTIONS

7.1      General rules for exercise:  An Option:

         7.1.1    may not be  exercised  earlier  than the Bonus  Date under the
                  relevant  Savings Contract EXCEPT as provided in Rules 7.2 and
                  7.4.

         7.1.2    shall not be  exercisable  later than 6 months after the Bonus
                  Date under the relevant Savings Contract EXCEPT as provided in
                  Rule 7.2.

         7.1.3    may only be exercised by a Participant  while he is a director
                  or  employee  of a  Participating  Company  or  an  Associated
                  Company EXCEPT as provided in Rules 7.2.

         7.1.4    may not be exercised by a Participant  if he has or has had at
                  any time  within  the 12 month  period  preceding  the date of
                  exercise a Material Interest in a Close Company which is:

                  (i)      the Company; or

                  (ii)     a  company  which  has  Control  of the  Company or
                           is a Member of a Consortium which owns the Company,

                  nor may an Option be exercised by the personal representatives
                  of the  Participant  if the  Participant  had such a  Material
                  Interest at the date of his death.

7.2      Exercise in particular cases:  An Option may be exercised:

         7.2.1    by the personal representatives of a deceased Participant:-

                  (i)      within  12  months  following  the date of his death
                           if such  death occurs before the Bonus Date; or

                  (ii)     within 12  months  following  the  Bonus  Date in the
                           event of his  death  within 6 months  after the Bonus
                           Date.

         7.2.2    subject  to  Rule  7.1.2  by a  Participant  within  6  months
                  following  his  ceasing  to hold the office or  employment  by
                  virtue of which he is eligible to participate in the Scheme by
                  reason of:-

                  (i)      injury, disability,  redundancy within the meaning of
                           the Employment Protection (Consolidation) Act 1978 or
                           retirement  on  reaching  Pensionable  Age  or at any
                           other   age  at  which  he  is  bound  to  retire  in
                           accordance   with  the  terms  of  his   contract  of
                           employment; or

                  (ii)     his  office or  employment  being in a company  of
                           which the  Company ceases to have Control; or

                  (iii)    the   transfer   or  sale  of  the   undertaking   or
                           part-undertaking  in which he is employed to a person
                           who is neither an  Associated  Company  nor a company
                           under the Control of the Company; or

                  (iv)     cessation of  employment in any  circumstances  other
                           than those mentioned in (i) to (iv) above but only if
                           such cessation of office or employment is more than 3
                           years after the Date of Grant of the Option;

       7.2.3    within the period of 6 months  following  the date on which a
                person who made an offer  to  acquire  shares  (which  was
                either  unconditional  or was made on a condition  such that
                if it were satisfied the person making the offer would have
                Control of the Company) has  obtained  Control of the Company
                and any  condition subject to which the offer is made has been
                satisfied.  For the purpose of this Rule 7.2.3 a person shall
                be deemed to have  obtained  Control of the Company if
                he and others  acting in concert (as defined by the City Code
                on  Takeovers  and Mergers) with him have together obtained
                Control of it;

       7.2.4    at any time  during  which any person  who has  become  bound or
                entitled to acquire  Shares  under  sections  428 to 430F of the
                Companies Act 1985 remains so bound or entitled;

       7.2.5  within six months from the date on which the Court sanctions under
              Section 425 of the Companies Act 1985 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;

       7.2.6    if  notice  is duly  given  of a  resolution  for the  voluntary
                winding-up of the Company, within six months from the resolution
                being passed.

7.3      Cessation following pregnancy:  For the purposes of the Scheme, a woman
         who leaves  employment due to pregnancy will be regarded as having left
         the  employment on the day on which she indicates  either that she does
         not intend to return to work or that she will not be returning to work.
         If she does not give such indication she will be treated as having left
         employment:

         7.3.1    on the day after the later of:

                  (i)   the day on  which  maternity  pay  under  the Employment
                        Protection (Consolidation) Act 1978 ceases to be
                        payable; and

                  (ii)  the  end  of the  maternity  leave  she  is  entitled
                        to  under  the Employment Protection (Consolidation)
                        Act 1978; or

         7.3.2    on any other date specified in the terms of her employment.

7.4      Exercise on reaching  Pensionable  Age: Subject to Rule 7.1.2 an Option
         may be exercised by a Participant within 6 months following the date he
         reaches  Pensionable  Age if he  continues  after that date to hold the
         office or employment  by virtue of which he is eligible to  participate
         in the Scheme.

7.5      Ceasing  office or  employment:  No  person  shall be  treated  for the
         purposes  of Rule 7.2.2 as ceasing to hold an office or  employment  by
         virtue of which that person is eligible  to  participate  in the Scheme
         until  that  person  ceases  to hold any  office or  employment  in the
         Company, any Associated Company or any company of which the Company has
         Control.

7.6      Lapsing of  Options:  Options  shall  lapse on the  earliest  of the
         following  events  occurring:

         7.6.1    subject to 7.6.2 below, 6 months after the Bonus Date;

         7.6.2    where the  Participant  dies before the Bonus Date,  12 months
                  after the date of death, and where the Participant dies in the
                  period of 6 months  after the Bonus Date,  12 months after the
                  Bonus Date;

         7.6.3    the  expiry of any of the 6 month  periods  specified  in Rule
                  7.2.2.(i)  to  (iv)  except  that  if at  the  time  any  such
                  applicable  periods  expire time is running under the 12 month
                  periods specified in Rule 7.2.1, the Option shall not lapse by
                  reason of this  sub-rule  7.6 until the expiry of the relevant
                  12 month period in Rule 7.2.1;

         7.6.4    the expiry of any of the periods  specified in Rules 7.2.3 and
                  7.2.4  to  7.2.6   except  where  an  Option  is  released  in
                  consideration  of the grant of a New Option over New Shares in
                  the Acquiring Company pursuant to Rule 8;

         7.6.5    the Participant  ceasing to hold any office or employment with
                  the  Company or any  Associated  Company or a company of which
                  the Company has control in any circumstances  other than those
                  specified  in Rules  7.2.1 and 7.2.2 or  ceasing  to hold such
                  office or employment  for any reason during any of the periods
                  specified in Rules 7.2.3 to 7.2.6 and Rule 8;

         7.6.6    subject to Rule 7.2.6, the passing of an effective
                  resolution,  or the making of an order by the Court, for the
                  winding-up of the Company;

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

         7.6.8    where before an Option has become capable of being exercised,
                  the Participant:

                  (i)    gives notice that he intends to stop paying Monthly
                         Contributions;

                  (ii)   is deemed under the terms of the Savings  Contract to
                         have given such notice; or

                  (iii)  makes an application for repayment of the Monthly
                         Contributions.

8.       EXCHANGE OF OPTIONS

8.1      The Acquiring Company:   If any company ("the Acquiring Company"):
         ----------------------

         8.1.1    obtains Control of the Company as a result of making:

                  (i)    a general  offer 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 Acquiring
                         Company will have Control of the Company; or

                  (ii)   a  general  offer to  acquire  all the  shares  in the
                         Company  which  are of the same  class  as the  Shares
                         which may be acquired by the exercise of Options;

                  in either case  ignoring any Shares which are already owned
                  by it or a member of the same group of companies; or

         8.1.2    obtains Control of the Company in pursuance of a compromise or
                  arrangement  sanctioned  by the Court under section 425 of the
                  Companies Act 1985; or

         8.1.3    becomes  bound or entitled to acquire  Shares  under sections
                  428 to 430F of that Act,

         any  Participant  may at any time  within the  Appropriate  Period,  by
         agreement with the Acquiring Company,  release any Option which has not
         lapsed  ("the Old Option") in  consideration  of the grant to him of an
         Option  ("the New  Option")  which (for the purposes of Paragraph 15 of
         Schedule  9 to the  Taxes  Act) is  equivalent  to the Old  Option  but
         relates to shares in a different company (whether the Acquiring Company
         itself or some other company  falling within  Paragraph 10(b) or (c) of
         Schedule 9 to the Taxes Act).

8.2      The New Option:  The New Option  shall not be regarded  for the
         purposes of Rule 8.1 as equivalent  to the Old  Option  unless the
         conditions  set out in  Paragraph  15(3) of Schedule 9 to the Taxes
         Act are  satisfied,  but so that the  provisions  of the Scheme
         shall for this purpose be construed as if:-

         8.2.1    the New  Option  were an option  granted  under the Scheme at
                  the same time as the Old Option;

         8.2.2    except for the  purpose of the  definition  of  "Participating
                  Company" in Rule 1, the reference to Huntingdon  Life Sciences
                  Group plc in the  definition of "the Company" in Rule 1 were a
                  reference to the different company mentioned in Rule 8.1; and

         8.2.3    Rule 12.2 were omitted.

9.       EXERCISE OF OPTIONS

9.1      General  provisions:  Except as otherwise  provided in the Rules, an
         Option may only be exercised:

         9.1.1    during the period of 6 months  after the Bonus  Date of the
                  relevant  Savings Contract

         9.1.2    while the Participant is a director or employee of a
                  Participating Company;

         9.1.3    by a  Participant  provided  that he does not have and has not
                  had within the  preceding  12 months a Material  Interest in a
                  Close Company which is:-

                  (i)      the Company; or

                  (ii)     any  company  which has  Control  of the  Company or
                           is a Member of a Consortium which owns the Company;
                           and

         9.1.4    with monies not exceeding  the amount of repayment  (including
                  any interest  and bonus)  under the Savings  Contact as at the
                  Option Exercise Date and for this purpose, no account shall be
                  taken of such part (if any) of the  repayment  of any  Monthly
                  Contribution,  whose due date for  payment  under the  Savings
                  Contract is after the date of repayment.

9.2      Manner of exercise:  To exercise an Option in whole or in part,  the
         Participant  must deliver to the Grantor or its duly appointed agent:

         9.2.1.   an option  certificate  covering at least all the Shares over
                  which the Option is then to be exercised;

         9.2.2    the notice of exercise in the  prescribed  form properly
                  completed and signed by the Participant (or by his duly
                  authorised agent); and

         9.2.3    remittance  for the Exercise Price payable or authority to the
                  Grantor  or its duly  appointed  agent to  withdraw  and apply
                  monies  from the  Savings  Contract to acquire the Shares over
                  which the Option is to be exercised.

9.3      Option  exercise  date: The effective date of the exercise of an Option
         shall be the date of delivery of the notice of exercise  which shall be
         deemed to be  delivered  when it is received by the Grantor or its duly
         appointed agent.

9.4      Issue or transfer of Shares:  Subject to Rule 9.5:

         9.4.1    Shares  to be issued  pursuant  to the  exercise  of an Option
                  shall be allotted to the  Participant  (or his nominee) within
                  30 days following the Option Exercise Date;

         9.4.2    the Grantor  shall  procure  the  transfer of any Shares to be
                  transferred to a Participant (or his nominee)  pursuant to the
                  exercise  of an Option  within 30 days  following  the  Option
                  Exercise Date.

9.5      Consents:  The  allotment  or transfer  of any Shares  under the Scheme
         shall be  subject  to  obtaining  any such  approval  or  consent as is
         mentioned in Rule 4.6.

9.6      Ranking of Shares:  Shares:

         9.6.1    which are issued  under the Scheme  shall rank  equally in all
                  respects with the Shares then in issue, except that they shall
                  not rank for any rights  attaching to Shares by reference to a
                  record date preceding the Option Exercise Date; and

         9.6.2    transferred  under the  Scheme  shall not be  entitled  to any
                  rights  attaching  to Shares  by  reference  to a record  date
                  preceding the Option Exercise Date.

9.7      Listing:  If and so long as the Shares  are listed on the London  Stock
         Exchange,  the Company  shall apply for a listing for any Shares issued
         under the Scheme as soon as practicable after their allotment.

10.      ADJUSTMENT OF OPTIONS

10.1     Variation in  equity  share  capital:  If there is a Variation in the
         equity  share capital of the Company:

         10.1.1   the number of Shares over which an Option is granted; and

         10.1.2   the Option Price

         shall be adjusted in such manner as the Board shall determine,  subject
         to the prior approval of the Inland Revenue,  so that (as nearly as may
         be without involving fractions of a Share or an Option Price calculated
         to more than two decimal  places) the aggregate  Exercise Price payable
         in respect of an Option shall remain unchanged (and where an Option has
         been exercised but no Shares have been allotted or transferred pursuant
         to such  exercise,  the number of Shares  which may be so  allotted  or
         transferred and the price at which they may be acquired).

10.2     Nominal value of Shares: Apart from under this Rule 10.2, no adjustment
         under Rule 10.1 above may have the effect of reducing  the Option Price
         to less than the  nominal  value of a Share.  Where an Option  subsists
         over both issued and unissued  Shares any such  adjustment  may only be
         made if the  reduction  of the Option Price of Options over both issued
         and unissued Shares can be made to the same extent. Any adjustment made
         to the Option Price of Options over unissued  Shares shall only be made
         if and to the extent that the Board shall be authorised to:

         10.2.1   capitalise from the reserves of the Company a sum equal to the
                  amount by which the nominal  value of the Shares in respect of
                  which the Option is exercisable  exceeds the adjusted Exercise
                  Price; and

         10.2.2   apply such sum in paying up such amount on such Shares so that
                  on exercise of any Option in respect of which such a reduction
                  shall have been made the Board shall  capitalise  such sum (if
                  any) and apply the same in paying up such amount.

10.3     Notifying Participants of adjustments:  The Grantor may take such steps
         as it may consider  necessary to notify  Participants of any adjustment
         made  under  this  Rule 10 and to call in,  cancel,  endorse,  issue or
         re-issue any certificate as a result of such adjustment.

11.      ADMINISTRATION

11.1     Notices:  Any notice or other communication in connection with the
         Scheme may be given:

         11.1  by personal delivery; or

         11.2  by sending the same by post, in the case of a company:

               (i)   to its registered office; and

               (ii)  in the case of an individual to his last known address,
                     or, where he is a director or employee of a Participating
                     Company,  either to his last known  address or to the
                     address  of the place of  business  at  which he performs
                     the whole or substantially  the whole of the duties
                     of his office or  employment.  Where a notice or other
                     communication is given  by  first-class  post,  it shall
                     be  deemed  to have  been received 48 hours after it was
                     put into the post  properly  addressed and stamped.

11.2     Documents sent to  shareholders:  The Company may distribute to
         Participants  copies of any notice or document sent by the Company to
         the holders of Shares.

11.3     Replacement  option  certificates:  If any option  certificate shall be
         worn out,  defaced or lost, it may be replaced on such  evidence  being
         provided as the Board may require.

11.4     Shares to cover Options:  The Company shall at all times keep available
         for  allotment  unissued  Shares at least  sufficient  to  satisfy  all
         Options under which Shares may be subscribed or procure that sufficient
         Shares are  available  for transfer to satisfy all Options  under which
         Shares may be acquired.

11.5     Administration  of the Scheme:  The Scheme shall be administered by the
         Board. The Board shall have full authority, consistent with the Scheme,
         to administer the Scheme, including authority to interpret and construe
         any  provision  of  the  Scheme  and  to  adopt  such  regulations  for
         administering  the  Scheme and such  forms of  exercise  as it may deem
         necessary  or  appropriate.  Decisions  of the Board shall be final and
         binding on all parties.

11.6     Costs of introducing the Scheme:  The costs of introducing and
         administering the Scheme shall be borne by the Company.

12.      AMENDING THE SCHEME

12.1     The  Board's  power to  amend  the  Scheme:  Subject  to the  following
         provisions  of this Rule 12,  the Board may at any time alter or add to
         all or any of the provisions of the Scheme in any respect.

12.2     Shareholders'  approval:  No alteration or addition to the advantage of
         Participants  shall be made under Rule 12.1 without the prior  approval
         by ordinary resolution of the members of the Company in general meeting
         unless the alteration or addition is:

         12.2.1   minor and to benefit the administration of the Scheme;

         12.2.2   to take account of any changes in legislation; or

         12.2.3   to obtain or maintain favourable taxation, exchange control or
                  regulatory  treatment  for the Company,  or  Subsidiary of the
                  Company or Associated Company or any Participant.

12.3     Participants'  approval:  No alteration or addition shall be made under
         Rule 12.1 which  would  abrogate  or  adversely  affect the  subsisting
         rights of a Participant unless it is made:

         12.3.1   with the consent in writing of such number of  Participants as
                  hold  Options  under the  Scheme to acquire 75 per cent of the
                  Shares  which  would be issued or  transferred  if all Options
                  granted and subsisting under the Scheme were exercised; or

         12.3.2   by a  resolution  at a meeting of  Participants  passed by not
                  less than 75 per cent of the  Participants who attend and vote
                  either in person or by proxy

         and for the purpose of this Rule 12.3 the provisions of the Articles of
         Association of the Company relating to shareholder meetings shall apply
         with the necessary changes.

12.4     Overseas Eligible Employees: Notwithstanding any other provision of the
         Scheme  other  than Rule 12.1 the Board  may,  in  respect  of  Options
         granted to  Eligible  Employees  who are or who may  become  subject to
         taxation outside the United Kingdom on their  remuneration amend or add
         to the  provisions  of the  Scheme  and  the  terms  of  Options  as it
         considers  necessary  or desirable to take account of or to mitigate or
         to comply  with  relevant  overseas  taxation,  securities  or exchange
         control  laws  provided  that the  terms  of  Options  granted  to such
         Eligible  Employees are not overall more  favourable  than the terms of
         Options granted to other Eligible Employees.

12.5     Notice of amendments:  As soon as reasonably  practicable  after making
         any  alteration  or  addition  under  Rule 12.1,  the Board  shall give
         written notice of this to any Participant affected by it.

12.6     Prohibited  amendment:  No alteration shall be made to the Scheme if
         as a result of the  alteration, the Scheme would cease to be an
         Employees' Share Scheme.

12.7     Inland  Revenue  approval:  For as  long  as the  Scheme  is to  remain
         approved by the Inland Revenue, no alteration or addition to the Scheme
         after it has been  approved  by the Inland  Revenue  shall have  effect
         unless  such  alteration  or addition  has been  approved by the Inland
         Revenue.

13.      GENERAL

13.1     Termination of the Scheme: The Scheme shall terminate following the end
         of the  Scheme  Period  or at any  earlier  time  by the  passing  of a
         resolution by the Board. Termination of the Scheme shall not affect the
         subsisting rights of Participants.

13.2     The Scheme and  funding  the  purchase  of Shares:  The Company and any
         Subsidiary  of the  Company may  provide  money to the  trustees of any
         trust or any other person to enable them or him to acquire Shares to be
         held for the  purposes of the Scheme,  or enter into any  guarantee  or
         indemnity for those purposes, to the extent permitted by Section 153 of
         the  Companies  Act 1985.  In  addition,  the  Company  may require any
         Subsidiary to enter into such other agreement or agreements as it shall
         deem  necessary to oblige such  Subsidiary to reimburse the Company for
         any other  amounts  paid by the  Company  in  relation  to the  Scheme,
         directly or indirectly in respect of such Subsidiary's employees.

13.3     Rights of Participants  and Eligible  Employees:  Nothing in the Scheme
         shall be deemed to give any employee of any  Participating  Company any
         right to participate in the Scheme.  The rights and  obligations of any
         individual  under  the  terms  of  his  office  or  employment  with  a
         Participating Company shall not be affected by his participation in the
         Scheme  nor any  right  which he may have to  participate  under it. An
         individual who participates  under the Scheme waives all and any rights
         to  compensation  or damages in consequence  of the  termination of his
         office  or  employment  with a  Participating  Company  for any  reason
         whatsoever  insofar as those rights arise or may arise from his ceasing
         to have rights under or to be entitled to exercise any Option under the
         Scheme as a result of such  termination  or from the loss or diminution
         in value of such rights or entitlements.

13.4     Articles of Association: Any Shares acquired on the exercise of Options
         shall be subject  to the  Articles  of  Association  of the  Company as
         amended from time to time.

13.5     Claims for relief under the Taxation of  Chargeable  Gains Act 1992: In
         the event that Shares are  transferred to a Participant in pursuance of
         any Option  granted  under the Scheme,  the  Participant  shall,  if so
         required by the person making the transfer,  join that person in making
         a claim for relief  under  Section 165 of the  Taxation  of  Chargeable
         Gains Act 1992 in respect of the disposal made by him in affecting such
         transfer.

13.6     Governing  Law:  These  Rules shall be  governed  by and  construed  in
         accordance with the law of England. All Participants,  any Grantor, the
         Company  and  any  other  Participating  Company  shall  submit  to the
         jurisdiction  of the English  courts in  relation  to anything  arising
         under the Scheme.

<PAGE>

                     RULES OF THE HUNTINGDON LIFE SCIENCES SHARESAVE SCHEME

                                    APPENDIX


Appendix                 this appendix which forms part of the Rules;

Appropriate Period       the meaning  given by Paragraph  15(2) of Schedule 9
                         to the Taxes Act;

Associated Company       in relation to the Company:-

                         (i)     any  company   which  has  Control  of  the
                                 Company;

                         (ii)    any  company  which is under the  Control of
                                 any company referred to in (i) above;

Board                    the  board of  directors  for the time  being of the
                         Company or a duly authorised committee of it;

Bonus Date               in relation  to any  Savings  Contract in respect of
                         an Option;

                         (i)     where  repayments are taken as including the
                                 maximum  bonus,  the earliest  date on which
                                 the maximum bonus is payable;  and

                         (ii)     in any other case the earliest date on
                                  which the standard bonus is payable under
                                  the relevant Savings Contract;

Close                    Company a close  company  as defined
                         in section  414(1) of the Taxes Act,
                         as varied by Paragraph 8 of Schedule
                         9 to the Taxes Act;

the Company              Huntingdon  Life Sciences Group plc  (registered no.
                         502370);

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

Date of Grant            the date on which a Grantor grants an Option;

Date of Invitation       the date on  which a  Grantor  invites  applications
                         for Options;

Dealing Day              any day on which the London  Stock  Exchange is open
                         for the transaction of business;

Eligible Employee        (1) any individual who at the date of Grant:-

                             (i)      is an employee  (which may include
                                      an employee  who is a director) of
                                      a Participating Company; and

                             (ii)     is  chargeable  to tax in  respect
                                      of his office or employment  under
                                      Case I of  Schedule E of the Taxes
                                      Act; and

                             (iii)    has   been   such   an   executive
                                      director    or   employee   of   a
                                      Participating   Company  for  such
                                      qualifying  period (if any) (being
                                      a  period   starting  not  earlier
                                      than 5 years  prior to the Date of
                                      Grant)    as   the    Board    may
                                      determine; or

                         (2)      is an executive director or
                                  employee of a Participating
                                  Company (or is nominated as
                                  a member of a  category  of
                                  such  executive   directors
                                  and employees) nominated by
                                  the  Board  as  but  in all
                                  cases  excluding any person
                                  who  is   prohibited   from
                                  participating  by reason of
                                  the provisions of Paragraph
                                  8  of  Schedule  9  to  the
                                  Taxes Act;

Employees' Share Scheme    the meaning  given by Section  743 of the  Companies
                           Act 1985;

Employee Benefit Trust    any trust  which  falls  within  the  provisions  of
                          section  86 of the  Inheritance  Tax  Act  1984  and
                          constitutes  an  employees'  share scheme as defined
                          in section 743 of the Companies Act 1985,  including
                          but not  exclusively  any Qualifying  Employee Share
                          Ownership  Trust as  defined  in  Schedule  5 of the
                          Finance Act 1989;

Exercise                  Price the total  amount  payable  in
                          relation  to  the   exercise  of  an
                          Option, whether in whole or in part,
                          being   an   amount   equal  to  the
                          relevant Option Price  multiplied by
                          the  number of Shares in  respect of
                          which the Option is exercised;

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

Grantor                   the  Board  acting  on behalf of the
                          Company  or  the   trustees  of  any
                          Employee  Benefit  Trust  which  has
                          agreed  to grant  options  under the
                          terms of this Scheme

London Stock Exchange     the London Stock Exchange Limited;

Market Value              in relation to a Share on any day:-

                          (i)       if and so long as the  shares  are  listed
                          on the    London Stock Exchange its middle market
                                    quotation   (as  derived  from  the  Daily
                                    Official   List   of  The   London   Stock
                                    Exchange);

                          (ii)      subject to (i) above,  its
                                    market value determined in
                                    accordance  with Part VIII
                                    of   the    Taxation    of
                                    Chargeable  Gains Act 1992
                                    and agreed in advance with
                                    the    Shares    Valuation
                                    Division of the Inland
                                    Revenue;

Material Interest         the  meaning  given by  Section  187(3) of the Taxes
                          Act;

Maximum Contribution      the lesser of:

                          (i)     such maximum  monthly  contribution  as may
                                  be   permitted   under   Paragraph   24  of
                                  Schedule  9 to the  Taxes  Act or, if less,
                                  (pound)250 per month; or

                          (ii)    such maximum  monthly  contribution  as may
                                  be  determined  from  time  to  time by the
                                  Board;

Member of a Consortium    the  meaning  given by  Section  187(7) of the Taxes
                          Act;

Minimum                   Contribution  such  minimum  monthly
                          contribution     permitted     under
                          Paragraph  24 of  Schedule  9 to the
                          Taxes Act from time to time;

Monthly Contributions     monthly   contributions  agreed  to  be  paid  by  a
                          Participant under his Savings Contract;

Option                    a right to acquire  Shares under the Scheme which is
                          either subsisting or is proposed to be granted;

Option Agreement          the   agreement    dated   [   ]   1998   and   made
                          between the Company (1) and Andrew H. Baker (2);

Option                    Price  the  price per Share at which
                          an  Eligible  Employee  may  acquire
                          Shares on the  exercise of an Option
                          and  calculated in  accordance  with
                          Rule 5:


Option Exercise Date      the  date  when  the   exercise   of  an  Option  is
                          effective  because  it  complies  with Rules 9.2 and
                          9.3;


Participant               any  Eligible  Employee  to whom an Option  has been
                          granted,  or  (where  the  context  so  admits)  the
                          personal representative(s) of any such person;

Participating Company     (i)     the Company;  and

                          (ii)    any other  company  which is
                                  under  the  Control  of  the
                                  Company,  is a Subsidiary of
                                  the  Company  and  which has
                                  been expressly designated by
                                  the   Board   as   being   a
                                  Participating Company;

Pensionable Age           age (65) sixty five;

Savings                   Contract   a   contract    under   a
                          certified contractual savings scheme
                          (within  the  meaning of Section 326
                          of the Taxes  Act)  approved  by the
                          Inland  Revenue  for the  purpose of
                          Schedule 9 to that Act;

Scheme                    the    Huntingdon    Life   Sciences
                          Sharesave Scheme in its present form
                          or as from time to time  amended  in
                          accordance   with   the   provisions
                          hereof;

Scheme Period             the  period  starting  on the  date  the  Scheme  is
                          approved  by the  Inland  Revenue  and ending on the
                          10th anniversary of that date;

Share                     a fully paid  ordinary  share in the
                          capital   of   the   Company   which
                          satisfies  paragraphs  10  to  14 of
                          Schedule 9 to the Taxes Act;

Subsidiary                a  company  as   defined  by  Section   736  of  the
                          Companies Act 1985;

Taxes Act                 the Income and Corporation Taxes Act 1988; and

Variation                 in  relation  to the  equity  share  capital  of the
                          Company:

                          (i)    a   capitalisation   issue,   an  offer  or
                                 invitation   made  by  way  of  rights,   a
                                 subdivision,  a consolidation or reduction;
                                 or


                         (ii)    any  other   variation   in
                                 respect of which the Inland
                                 Revenue  may  from  time to
                                 time allow an adjustment of
                                 Options in accordance  with
                                 Rule 10.