Exhibit 4.3


 


 


IMPERIAL TOBACCO GROUP PLC


 


RULES OF THE IMPERIAL
TOBACCO GROUP


 


SHARE MATCHING SCHEME


 


Approved by the Company on 14 August 1996


 


Amended by the Remuneration Committee on 2 December 1996,
31 January 2000,

24 November 2000, 23 November 2001 and 22 November 2002.


 


Amended by an ordinary resolution of the
Company passed on 4 February 2003.


 


Amended by the Remuneration Committee on 14
November 2003.


 


Amended by an ordinary resolution of the
Company passed on 1 February 2005.


 


Amended by the Board on 30 January 2007.


 

















 


CONTENTS


 


	
  Clause

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  2.

  	
   

  	
  Invitations

  	
   

  	
  2

  
	
  3.

  	
   

  	
  Lodged
  Shares

  	
   

  	
  3

  
	
  4.

  	
   

  	
  Effect
  of Allocation

  	
   

  	
  4

  
	
  5.

  	
   

  	
  Vesting of Additional Shares

  	
   

  	
  4

  
	
  6.

  	
   

  	
  Capitalisation

  	
   

  	
  6

  
	
  7.

  	
   

  	
  Transfer
  of legal title

  	
   

  	
  7

  
	
  8.

  	
   

  	
  Stamp duty and other expenses

  	
   

  	
  7

  
	
  9.

  	
   

  	
  Taxation

  	
   

  	
  8

  
	
  10.

  	
   

  	
  General

  	
   

  	
  8

  
	
  11.

  	
   

  	
  Amendment

  	
   

  	
  9

  
	
  12.

  	
   

  	
  Termination

  	
   

  	
  9

  
	
  13.

  	
   

  	
  Governing
  law

  	
   

  	
  10

  
	
  SCHEDULE 1
  International rules

  	
   

  	
  11

  
	
  APPENDIX 1
  (Australia)

  	
   

  	
  12

  
	
  APPENDIX 2
  (Canada)

  	
   

  	
  14

  
	
  APPENDIX 3
  (United States of America)

  	
   

  	
  17

  
	
  SCHEDULE 2
  Additional Share Award Certificate

  	
   

  	
  18

  
	
  SCHEDULE 3
  Performance Conditions for allocations of Additional Shares

  	
   

  	
  19

  
							



 


1

















 


RULES OF THE IMPERIAL
TOBACCO GROUP


SHARE MATCHING SCHEME


 


1.                                      Definitions


 


Except where inconsistent with the subject or context,
words defined in the Trust Deed made between Imperial Tobacco Group PLC (1) and
Abacus (C.I.) Limited (the “Trustees”) (2) dated 1 October 1996
establishing the Imperial Tobacco Employee and Executive Benefit Trust
(formerly known as the Imperial Tobacco Group PLC Employee Benefit Trust (the “Executive
Trust”) or the Trust Deed made between Imperial Tobacco Group PLC (1) and
the Trustees (2) dated 17 October 2001 establishing the Imperial
Tobacco Group PLC 2001 Employee Benefit Trust (the “2001 Trust”), as
applicable, shall have the same meanings when used in these Rules and
references in the Rules to “the Trust” shall constitute references either
to the Executive Trust or the 2001 Trust, as applicable. In addition the
following words and expressions shall have the following meanings:-


 


	
  “Additional Share”

  	
  a Share allocated pursuant to Rule 4;

  
	
   

  	
   

  
	
  “Board”

  	
  the duly constituted Remuneration Committee
  of the Board of Directors of the Company;

  
	
   

  	
   

  
	
  “Company”

  	
  Imperial Tobacco Group PLC;

  
	
   

  	
   

  
	
  “Control”

  	
  as defined in section 840 of the
  Income and Corporation Taxes Act 1988;

  
	
   

  	
   

  
	
  “CREST”

  	
  means the relevant system (as defined in
  the Uncertificated Securities Regulations 1995 (SI 1995/3272)) in respect of
  which CRESTCo Limited is the operator;

  
	
   

  	
   

  
	
  “CREST Account”

  	
  means a designated CREST account held by
  a Participant with any sponsor agreed by the Trustees;

  
	
   

  	
   

  
	
  “Early Vesting Date”

  	
  as defined at Rule 5.3;

  
	
   

  	
   

  
	
  “Earnings”

  	
  in respect of any Employee, the basic
  annual salary of that Employee;

  
	
   

  	
   

  
	
  “Employee”

  	
  any person for the time being in full,
  part-time or temporary employment of any Member of the Group;

  
	
   

  	
   

  
	
  “Expected Vesting Date”

  	
  as defined at Rule 5.1 and Rule 5.2;

  
	
   

  	
   

  
	
  “Group”

  	
  the Company and its Subsidiaries;

  
	
   

  	
   

  
	
  “Lodged Share”

  	
  a Share:

  
	
   

  	
   

  
	
   

  	
  (i)                                    acquired by the Trustees with monies provided by an Employee or
  transferred to the Trustees and in each

  



 


1

















 


	
   

  	
  case held by the Trustees as bare nominee for that
  Employee; or

  
	
   

  	
   

  
	
   

  	
  (ii)                                in respect of which a share certificate(s) covering such Share has
  been deposited with the Trustees by an Employee which shall be held by the
  Trustees (or such person or persons as may from time to time be
  nominated by the Trustees) on behalf of the Employee; or

  
	
   

  	
   

  
	
   

  	
  (iii)                             held by the Participant in a CREST Account;

  
	
   

  	
   

  
	
  “Member of the Group”

  	
  the Company or any of its Subsidiaries;

  
	
   

  	
   

  
	
  “Model Code”

  	
  the Model Code on directors’ and relevant employees’ dealings in
  securities, as set out in the listing rules published by the UK Listing
  Authority;

  
	
   

  	
   

  
	
  “Participant”

  	
  an Employee on whose behalf Lodged Shares
  are held by the Trustees or by the Employee in a CREST Account, or an
  Employee who has deposited a share certificate(s) with the Trustees and in
  any case has not withdrawn those Lodged Shares under rule 7;

  
	
   

  	
   

  
	
  “Rules”

  	
  these Rules as from time to time
  amended in accordance with their provisions;

  
	
   

  	
   

  
	
  “Scheme”

  	
  the Imperial Tobacco Group Share Matching
  Scheme constituted by these Rules;

  
	
   

  	
   

  
	
  “Share”

  	
  an ordinary share in the capital of the
  Company;

  
	
   

  	
   

  
	
  “Subsidiary”

  	
  a subsidiary or subsidiary undertaking of
  the Company within the meaning of the Companies Act 1985;

  
	
   

  	
   

  
	
  “Vesting Date”

  	
  the earlier of the Expected Vesting Date
  and Early Vesting Date;

  
	
   

  	
   

  
	
  “Vesting Period”

  	
  with respect to an Additional Share the
  period between its allocation under Rule 2.4 and its Vesting Date; and

  
	
   

  	
   

  
	
  “Vested Share”

  	
  an Additional Share which has been
  allocated to a Participant and which becomes vested in the Participant (or
  the Participant’s personal representatives) in accordance with the Rules.

  



 


2.                                      Invitations


 


2.1                                Any Member of the Group may with the consent of the Board, from
time to time, invite any Employee to participate in the Scheme.


 


2

















 


2.2                                Any such invitation shall invite such Employees as the Board may in
its discretion determine:-


 


(a)                                 to pay monies to the Trustees and to authorise and require the
Trustees to apply such monies in the acquisition of Lodged Shares; and/or


 


(b)                                to transfer Shares to the Trustees as Lodged Shares; and/or


 


(c)                                 to deliver a share certificate(s) in respect of the Lodged Shares to
the Trustees (or such other person or persons as may be nominated by the
Trustees provided the share certificate(s) are held to the Trustees’ order);


 


(d)                                  to open a CREST Account and either (i) apply monies towards the
purchase of Shares; or (ii) transfer Shares by way of a completed CREST
dematerialisation form to the CREST Account such shares being Lodged
Shares;


 


(e)                                   to leave any existing Lodged Shares for which the Vesting Date of
the related Additional Shares has occurred (or will occur by or within a short
time after (as determined by the Board) the allocation of Additional Shares
pursuant to the invitation) as Lodged Shares for the purposes of the invitation;
and/or


 


(f)                                   to leave any Additional Shares which have become Vested Shares as
Lodged Shares for the purpose of the invitation.


 


and shall advise such Employees of the proposed basis
of allocation of Additional Shares if they accept the invitation.


 


2.3                                An Employee invited to participate in the Scheme may accept the
invitation by submitting a duly completed application form and acquiring
Lodged Shares in one of the permitted manners within the time prescribed by the
invitation.


 


2.4                                As soon as practicable following confirmation of the number of
Lodged Shares acquired by or on behalf of a Participant following an invitation
under Rule 2.1, the Trustees shall allocate Additional Shares to
Participants in respect of their Lodged Shares on such basis (including as to
vesting) as the Board may in its discretion determine based on length of
service with the Group, the Earnings of a Participant, the financial performance
of the Group or otherwise howsoever PROVIDED THAT the maximum aggregate number
of Additional Shares which may be allocated to a Participant in respect of
that invitation shall not exceed the total number of Lodged Shares held for or
by the Participant under the Scheme in respect of that invitation.


 


2.5                                No invitation will be made to an Employee at a time when that
Employee is prohibited from dealing (as defined in paragraph 1 of the Model
Code) in Shares by the Model Code.


 


3

















 


3.                                      Lodged Shares


 


3.1                                Lodged Shares shall be registered either:


 


(a)                                  in the name of the Trustees (or such other person or persons as may be
nominated by the Board for the purpose) who shall hold such Shares as bare
nominee for the relevant Participant; and/or


 


(b)                                  in the Participant’s name and the share certificate(s) covering such
Shares shall be held by the Trustees (or such other person or persons as may be
nominated by the Trustees provided the share certificate(s) is held to the Trustees’
order); or


 


(c)                                    in the Participant’s name and held in a designated CREST Account.


 


3.2                                The Trustees shall not exercise any rights attaching to Lodged
Shares otherwise than in accordance with any written wishes received from the
relevant Participant. It shall be the responsibility of each Participant to
ensure that any voting wishes are conveyed to the Trustees in sufficient time
and with sufficient clarity to allow the Trustees to carry out the same. The
Trustees shall not be liable to any person for the consequences of any failure
to exercise voting rights.


 


3.3                                A Participant will be entitled to the amount of any dividends paid
by the Company on the Participant’s Lodged Shares.


 


4.                                      Effect of Allocation


 


4.1                                Any Additional Shares allocated to a Participant will cease to be
capable of vesting if, before their Vesting Date, the Participant causes any of
the Lodged Shares in respect of which the Additional Shares were allocated to
be transferred or delivered in accordance with Rule 7.


 


4.2                                During their Vesting Period a Participant will have no right or
interest, whether legal or equitable, in any Additional Shares allocated to
that Participant (and for the avoidance of doubt will have no entitlement to
any dividends paid by the Company on the Additional Shares).


 


4.3                                Subject to Rule 7, no Lodged Share may be assigned,
charged or otherwise disposed of by a Participant during the Vesting Period of
the related Additional Shares.


 


5.                                      Vesting of Additional Shares


 


5.1                                Save as otherwise provided, and provided that any performance
condition(s) imposed by the Board pursuant to Rule 2.4 has or have been
satisfied or waived in accordance with its terms, “Expected Vesting Date” in
relation to any Additional Shares means the date after the allocation of the
Additional Shares determined by the Board before the allocation. If an event
occurs as a result of which the Board determines that in relation to all or any
Additional Shares previously allocated the Expected Vesting Date is no longer
appropriate, the Board may in its discretion substitute such other date as
it may determine as the Expected Vesting Date.


 


5.2                                “Expected Vesting Date” in relation to any Additional Shares
allocated pursuant to an invitation made by the Board in December 2001
shall be 29 January 2005.


 


4

















 


5.3                                Provided that any performance condition(s) imposed by the Board
pursuant to Rule 2.4 has or have been satisfied or waived in accordance
with its terms, “Early Vesting Date” in relation to any Additional Share means
the date on which any of the following events shall first occur prior to the
Expected Vesting Date of such Additional Share:-


 


(a)                                  any person acquiring Control of the Company (including for the
avoidance of doubt pursuant to an amalgamation or reconstruction, however
effected, or a compromise or a scheme of arrangement sanctioned by the Court
under Section 425 of the Companies Act 1985);


 


(b)                                 notice being duly given of a resolution for the voluntary winding-up
of the Company;


 


(c)                                  death during service of the Participant;


 


(d)                                 cessation of the Participant’s employment by reason of:-


 


(i)                                    ill health, injury, disability or redundancy;


 


(ii)                                the company employing the Participant ceasing to be a Member of the
Group;


 


(iii)                             the business or part of the business to which the Participant’s
office or employment relates being transferred to a person who is not a Member
of the Group;


 


(iv)                              any other circumstances; or


 


(e)                                    notice being given that the Shares will cease to be listed on the
London Stock Exchange.


 


5.4                                Subject to the Participant electing to leave any of the Lodged
Shares as Lodged Shares for the purpose of an invitation under Rule 2.1:


 


(a)                                    any Lodged Shares held upon bare trust for a Participant shall be
transferred (in such manner (whether in uncertificated form or otherwise)
as the Trustees may determine) to the relevant Participant on the Vesting
Date of the related Additional Shares;


 


(b)                                   the Trustees shall return or procure the return of all share
certificates in respect of Lodged Shares deposited with the Trustees as soon as
practicable following the Vesting Date of the related Additional Shares.


 


5.5                                If the Vesting Date of any Additional Shares has arisen:


 


(a)                               otherwise than under Rule 5.3 (a), (b), (c) or (d), the
Trustees will transfer to the relevant Participant on or as soon as permissible
after the Vesting Date that number of Additional Shares  determined by the Trustees in accordance with
the basis of allocation determined under Rule 2; or


 


(b)                              under Rule 5.3 (a) or (b), the Trustees will transfer to
the relevant Participant on or as soon as permissible after the Vesting Date that
proportion of the Additional Shares as is equal to the proportion of the
Vesting Period of those Additional Shares


 


5

















 


that had
expired before the occurrence of the event that gave rise to the Vesting Date
of the Additional Shares; or


 


(c)                               under Rule 5.3(c) or (d)(i), (ii) or (iii), the
Trustees will transfer to the relevant Participant (or to the Participant’s estate)
on or as soon as permissible after the Vesting Date that proportion of the
Additional Shares as is equal to the proportion of the Vesting Period of those
Additional Shares for which the Participant remained an Employee; or


 


(d)                                   under Rule 5.3(d)(iv), any award of Additional Shares to that
Participant shall lapse unless, within six months of that date, the Trustee
shall determine otherwise, in which case there shall be transferred to the
relevant Participant such number of Additional Shares as may be determined
by the Trustees in their discretion, but not exceeding the number of Additional
Shares which would have been transferred to the Participant had the Vesting
Date arisen otherwise than under Rule 5.3(d)(iv).


 


5.6                                The Additional Shares transferred to a Participant pursuant to Rule 5.5
above shall rank pari passu with all Shares then in issue except that they will
not rank for any dividend or other distribution paid or made by reference to a
record date falling prior to the date that they are transferred.


 


5.7                                For the purposes of this Rule 5, where a Participant’s
employment with any Member of the Group is terminated (a) without notice,
the Participant’s employment shall be deemed to cease on the date on which the
termination takes effect; or (b) with notice, the Participant’s employment
shall be deemed to cease on the date on which that notice is given, unless the
Board in its sole discretion extends the date on which the employment is deemed
to cease to the date when the notice expires.


 


5.8                                Notwithstanding the provisions of this Rule 5, the number of Shares
available for the Scheme will be limited so that on any date:


 


(a)                                    the total number of Shares acquired or that may be acquiring
during the period of ten years ending on that date under the Scheme and all
other employees’ share schemes established by the Company cannot exceed 10% of
the issued ordinary share capital of the Company on that date;


 


(b)                                   the total number of Shares acquired or that may be acquired
during the period of five years ending on that date under the Scheme and all
other employees’ share schemes established by the Company cannot exceed 5% of
the issued ordinary share capital of the Company on that date;


 


(c)                                    the total number of Shares acquired or that may be acquired
during the period of ten years ending on that date under the Scheme and all
other employees’ share schemes established by the Company cannot exceed 5% of
the issued ordinary share capital of the Company on that date, PROVIDED THAT
there shall be excluded for the purposes of this limit Shares acquired or that may be
acquired under any employees’ share scheme in circumstances where participation
is offered or extended to all or most employees of the participating companies
under that scheme.


 


6

















 


5.9                                Benefits received by a Participant under the Scheme are not
pensionable.


 


6.                                      Capitalisation


 


6.1                                If and whenever new Shares are allotted to the Trustees by way of
capitalisation or other distribution of a capital nature, such new Shares shall
accrue and be added to and be held on the same terms as the Shares in respect
of which such new Shares shall have been allotted. The number and nominal value
of Additional Shares and the basis of further allocations of Additional Shares,
may be adjusted in such a manner as the Company’s Auditors, acting as
experts and not as arbitrators, may confirm in writing to be fair and
reasonable. Participants shall be notified of any such adjustment.


 


6.2                                If and whenever the Company shall issue by way of rights or
otherwise make any offer or invitation to shareholders generally and shall
issue to its members nil paid letters of allotment or other documents (“Nil
Paid Rights”) representing negotiable Nil Paid Rights or entitlements relating
to any ordinary shares or other security or securities (or any mixture of the
two) in or of the Company, the Trustees shall be entitled to receive but shall
be obliged to sell such proportion of such Nil Paid Rights as are attributable
to Additional Shares as shall enable the Trustees to subscribe for the new
shares or securities which are the subject of the balance of the Nil Paid
Rights and the Trustees shall so apply the proceeds of disposal in that way. The
shares or securities so purchased shall be added pro rata and be held on the
same terms as the Additional Shares held by the Trustees in respect of which
such Nil Paid Rights shall have been received by the Trustees. Any cash balance
shall be held likewise. If any such Nil Paid Rights shall be issued by
reference to a record date which falls after the time at which the relevant
Shares in respect of which such Nil Paid Rights shall have been issued shall
have become held absolutely for a Participant, such Nil Paid Rights shall be
held by the Trustees upon trust for such Participant absolutely.


 


6.3                                If under Rule 6.1 or 6.2 above any fraction of a Share arises
the allocation therein provided for shall be rounded up or down as the Trustees
may in their sole discretion think fit.


 


6.4                                In relation to any Lodged Share registered in the name of the
Trustees (or another person) pursuant to Rule 2.2 the Participant may instruct
the Trustees to take such action as the Participant may inform the
Trustees in writing. The Trustees shall be under no obligation to take any
action unless the Participant shall provide any necessary funds and shall not
be responsible for any failure to act in time or at all, irrespective of the
circumstances.


 


7.                                      Transfer of legal title


 


The
Trustees shall in respect of all (but not some only) of the Lodged Shares:


 


(a)                                    transfer the legal title into the name of the relevant Participant
or at the direction of the Participant, in such manner (whether in
uncertificated form or otherwise) as the Trustees may determine;
and/or


 


(b)                                   deliver or procure the delivery of all the share certificate(s) to
the relevant Participant,


 


as soon as reasonably practicable following
the receipt of any written instruction to this effect from such Participant.


 


7

















 


8.                                      Stamp duty and other expenses


 


Any
stamp duty or other expenses incurred in any transfer of Additional Shares
and/or Lodged Shares by the Trustees shall be payable:-


 


(a)                                    in the case of either a transfer into the name or at the direction
of the Participant concerned or the acquisition by the Trust of Additional
Shares, by the Trustees; and


 


(b)                                   in any other case, by the Participant concerned (unless the Board
shall determine otherwise).


 


9.                                      Taxation


 


9.1                               The Company or the Trustees may make such provision for and
take such action as may be considered by either of them to be necessary or
expedient for the withholding or payment of any taxes or any other statutory
deductions for which either of them is properly accountable and wherever those
taxes are imposed, provided those taxes arise in respect of any transfer of
funds or assets or any payment pursuant to the Trust and/or these Rules including
(but not limited to) the withholding of funds or property (or any portion
thereof) from any payment under the Trust and/or under these Rules until a
Participant reimburses the Company or the Trustees for the amounts of any such
taxes for which either of them is respectively and properly accountable.


 


9.2                                For the purposes of this Rule 9 the Trustees may rely on
any information supplied to them by the Company or by any tax adviser selected
by the Company as to the amount of any such tax liability.


 


10.                                General


 


10.1                          Any notice or other document given to any Employee pursuant to the
Scheme shall be delivered to him, sent by post to him at his home address
according to the records of his employing company or such other address as may appear
to the Board to be appropriate or sent to him by e-mail to his usual e-mail
address according to the records of his employing company or to such other e-mail
address that the Employee may have advised may be used. Notices or
other documents sent by post shall be deemed to have been received 2 days
following the date of posting for documents posted to addresses in the United
Kingdom and 7 days for documents posted to an overseas address. All documents
sent to or by an Employee will be sent entirely at the Employee’s risk.


 


10.2                         The decision of the Board on any question of interpretation of the Rules or
any dispute relating to or connected with the Scheme shall be final and
conclusive.


 


10.3                          The costs of introducing, operating and administering the Scheme
shall be borne by a Group Company.


 


10.4                         The Board shall have power from time to time to make regulations for
the administration and operation of the Scheme provided that they are not
inconsistent with these Rules.


 


8

















 


10.5                         Nothing in the Scheme shall form part of any Participant’s
contract of employment. The rights and obligations of a Participant under the
terms and conditions of his employment by any Member of the Group shall not be
affected by his participation in the Scheme. The Participant shall have no
right to compensation or damages or any other sum or benefit in respect of his
ceasing to participate in the Scheme or in respect of any loss or reduction of
any rights or expectations under the Scheme in any circumstances. An Employee
who is not invited to participate in the Scheme shall have no right to
compensation or damages or any other sum or benefit in respect of his
non-participation.


 


10.6                          An Employee agrees as a condition of participation in the Scheme to
the collection, processing, transfer (including to countries outside the
European Economic Area) and retention of the Employee’s personal data for use
in connection with the operation of the Scheme by any Member of the Group, the
Trustees and/or any third party retained by the Board to administer the Scheme.


 


11.                                Amendment


 


11.1                         The Scheme shall be administered under the direction of the Board which
may at any time and from time to time by resolution and without other
formality amend or augment the Rules or the Scheme in any respect provided
that:-


 


(a)                                    no amendment shall operate to affect adversely in any way any rights
already acquired by a Participant;


 


(b)                                   no amendment may be made which would, if carried out, involve
the Trustee in a new or additional obligation or liability without the prior
agreement of the Trustee; and


 


(c)                                    no amendment may be made to the Rules to the advantage of
Participants except with the prior approval of the shareholders of the Company
in General Meeting except for minor amendments to benefit the administration of
the Scheme, to take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for Participants in
the Scheme or for any Member of the Group.


 


11.2                         Notwithstanding anything to the contrary contained herein, the Board
may at any time and from time to time by resolution and without further
formality amend the Scheme in such manner as the Board may consider
necessary or desirable:


 


(a)                                    in any way to the extent necessary to render the Scheme capable of
approval by the Inland Revenue or any other governmental or other regulatory
body pursuant to any present or future United Kingdom legislation;  or


 


(b)                                   in order to comply with, take advantage of, or otherwise in
connection with any taxation, legal, regulatory or other rule, law, guideline,
regulation or other provision of or prevailing in any jurisdiction in which this
Scheme is or is intended to be operated.


 


11.3                          The limits in Rule 5 may not be increased without the
approval of the shareholders of the Company in General Meeting.


 


9

















 


11.4                         No amendment shall take effect that would cause the Scheme to cease
to be an “employees’ share scheme” as defined in section 743 of the
Companies Act 1985.


 


12.                               Termination


 


The Scheme may be
terminated at any time by a resolution of the Board, and shall in any event
terminate on 1 February 2015. Any termination shall not affect the
outstanding rights of Participants.


 


13.                               Governing
law


 


This Scheme
shall be governed by the laws of England.


 


10

















 


SCHEDULE 1


 


INTERNATIONAL RULES


 


 


The Rules of the Scheme apply in the
jurisdictions specified below:


 


Belgium


Bosnia


Czech Republic


France


Germany


Greece


Hong Kong


Hungary


Ireland


Kyrgyzstan


The Netherlands


New Zealand


Poland


Russia


Singapore


Slovakia


Slovenia


Spain


Taiwan


Turkey


United Arab Emirates


 


The Rules of the Scheme apply with and
subject to the following amendments and provisions which have been adopted by
the Board pursuant to rule 11.2 for the purposes of the operation of the
Scheme in the jurisdictions specified below:


 


Australia (Appendix 1)


Canada (Appendix 2)


United States of America (Appendix 3)


 


11

















 


APPENDIX 1


 


IMPERIAL
TOBACCO INTERNATIONAL


SHARE
MATCHING SCHEME


 


The
purpose of this Appendix is to specify terms and conditions under which the
Scheme is to be modified in its application to any Lodged Shares or allocation
of Additional Shares made or to be made to a person resident in Australia.


 


Words
and phrases defined in the Scheme shall bear the same meaning in this Appendix
1 except as otherwise provided:


 


1.                                           An Employee must, in order to participate in the Scheme, either


 


(a)                               deliver share certificates in respect of the Lodged Shares owned by
the Employee to the Trustees or,


 


(b)                              open a CREST Account and either,


 


(i)                               apply monies towards the purchase of Shares; or


(ii)                            transfer Shares by way of a CREST dematerialisation to the CREST
Account


 


and the definition of “Lodged Shares” and Rule 2.2
of the Scheme shall be read and construed accordingly.


 


2.                                           The following new Rules 2.5 and 2.6 shall be inserted after Rule 2.4:


 


‘2.5                            The allocation of Additional Shares to any Participant shall be
deemed to be, and shall have effect as, the grant of an option by the Company
in favour of the Participant to require the Company to procure the transfer to
the Participant of the Additional Shares to which the Participant is entitled
under these Rules on the Vesting Date and:


 


(a)                              any reference in these Rules to the loss, termination or
lapsing of any award of Additional Shares shall be deemed to be a reference to
such option lapsing; and


 


(b)                             any reference to Additional Shares shall be deemed to be a reference
to such option to call for a transfer of the relevant number of Additional
Shares.


 


2.6                                The option referred to in Rule 2.5 shall lapse and be of no
further effect unless the Participant shall, throughout the period commencing
on the date of the grant of that option and ending on the Vesting Date:


 


(c)                              be and have been employed continuously under a contract of
employment with any Member of the Group and is not then under notice of
termination of such contract given or received; and


 


(d)                             not have caused the certificate in respect of any of the Lodged
Shares in respect of which the option was granted to have been delivered in the
same manner as if Rule 7 applied to such transfer.’


 


12

















 


3.                                           Rule 4.1 shall be deleted, and the following Rule 4.1
inserted in its place:


 


‘4.1                           Notwithstanding any provision of these Rules or of the Trust,
no Participant shall have any right or interest, whether legal or equitable,
in:


 


(a)                              any Additional Shares allocated to that Participant until the
Vesting Date;


 


(b)                             any Nil Paid Rights issued by the Company under Rule 6.2 or,
until the Vesting Date, in any shares or securities acquired from exercising
those Nil Paid Rights; or


 


(c)                               any option to acquire any right or interest in any such Share.’


 


4.                                           Rule 6.2 shall be deleted and the following Rule 6.2
inserted in its place:


 


‘If and whenever the Company shall issue by
way of rights or otherwise make any offer or invitation to shareholders
generally and shall issue to its members nil paid letters of allotment or other
documents (“Nil Paid Rights”) representing negotiable Nil Paid Rights or
entitlements relating to any ordinary shares or other security or securities
(or any mixture of the two) in or of the Company, the Trustees shall be
entitled to receive but shall be obliged to sell such proportion of such Nil
Paid Rights as are attributable to Additional Shares as shall enable the
Trustees to subscribe for the new shares or securities which are the subject of
the balance of the Nil Paid Rights and the Trustees shall so apply the proceeds
of disposal in that way. The shares or securities so purchased shall be added
pro rata and be held upon the same terms as
the Additional Shares held by the Trustees in respect of which such Nil Paid
Rights shall have been received by the Trustees. Any cash balance shall be held
likewise. If any such Nil Paid Rights shall be issued by reference to a record
date which falls after the time at which the relevant Shares in respect of
which such Nil Paid Rights shall have been issued shall have become held
absolutely for a Participant, such Nil Paid Rights shall be held by the
Trustees upon trust for such Participant absolutely. No
Participant shall have any right or interest, whether legal or equitable in any
Nil Paid Rights or, until the Vesting Date, in any shares or securities
acquired from exercising those Nil Paid Rights. ‘


 


13

















 


APPENDIX 2


 


IMPERIAL
TOBACCO GROUP INTERNATIONAL


SHARE
MATCHING SCHEME


 


The
purpose of this Appendix is to specify terms and conditions under which the
Scheme is to be modified in its application to any Lodged Shares or allocation
of Additional Shares made or to be made to a person resident for tax purposes
in Canada.


 


Words
and phrases defined in the Scheme shall bear the same meaning in this Appendix
2 except as otherwise provided.


 


	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Additional Shares”

  	
   

  	
  notional additional shares allocated pursuant to Rule 4.

  
	
   

  	
   

  	
   

  
	
  “Exit Price”

  	
   

  	
  the middle market price of a Share as derived from the London Stock
  Exchange Daily Official List on the Vesting Date.

  
	
   

  	
   

  	
   

  
	
  “Notional Additional Gain”

  	
   

  	
  the Exit Price multiplied by the number of Additional Shares
  allocated to a Participant in accordance with the basis of allocation
  determined under Rule 2.

  
	
   

  	
   

  	
   

  
	
  “Vesting Date”

  	
   

  	
  the earlier of the Expected Vesting Date and Early Vesting Date
  provided that this date shall not be a date falling more than three years
  after the date of the allocation of the Additional Shares.

  
	
   

  	
   

  	
   

  
	
  Rule 4 shall be replaced with the following:

  	
   

  	
  “Any Additional Shares allocated to a Participant will be held for
  that Participant provided that the Participant, throughout the period
  commencing on the date of allocation of such Additional Shares and ending on
  their Vesting Date does not cause any of the Lodged Shares in respect of
  which the Additional Shares were allocated to be transferred or delivered in
  accordance with Rule 7”.

  
	
   

  	
   

  	
   

  
	
  Rule 5.5 shall be replaced with the following:

  	
   

  	
  If the Vesting Date of any Additional Shares has arisen:

   

  (a)                                  otherwise than under Rule 5.3 (a), (b), (c) or (d) a
  payment shall be made to the Participant on or as soon as permissible after
  the Vesting Date, but in no event later than December, 31 of the calendar
  year in which the vesting date falls, of an amount equal to the Notional
  Additional Gain; or

   

  (b)                                 under Rule 5.3(a) or (b) a payment shall be made to
  the Participant on or as soon as permissible after the Vesting Date, but in
  no event later than December, 31

  



 


14

















 


	
   

  	
   

  	
  of the calendar year in which the vesting date
  falls, of an amount equal to that proportion of the Notional Additional Gain
  as is equal to the proportion of the Vesting Period of the Additional Shares
  that had expired on the occurrence of the event that gave rise to the Vesting
  Date of the Additional Shares; or

   

  (c)                                  under Rule 5.3(c) or d(i), (ii) or (iii), a payment
  shall be made to the Participant (or to the Participant’s estate) on or as
  soon as permissible after the Vesting Date, but in no event later than
  December, 31 of the calendar year in which the vesting date falls, of an
  amount equal to that proportion of the Notional Additional Gain as is equal
  to the proportion of the Vesting Period of the Additional Shares for which
  the Participant remained an Employee; or

   

  (d)                                 under Rule 5.3(d)(iv), any allocation of Additional Shares to
  that Participant shall lapse, unless within six months of that date, the
  Board shall determine otherwise, in which case a payment shall be made to the
  Participant of an amount determined by the Board in its discretion but not
  exceeding the Notional Additional Gain which the Participant would have
  entitled to had the Vesting Date arisen otherwise than under Rule 5.3(d)(iv).

  
	
  Rule 5.6 shall be deleted.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Rule 5.7 shall be replaced with the following:

  	
   

  	
  “For the purposes of the Scheme, a Participant’s employment with any
  Member of the Group shall be considered to have terminated effective on the
  last day of the Participant’s actual and active employment with a Member of
  the Group whether such day is selected by agreement with the individual,
  unilaterally by such a Member of the Group and whether with or without
  advance notice to the Participant unless the Board in its sole discretion
  shall agree to extend the date on which the employment is deemed to cease to
  the date when the notice expires. Except as may be authorised by the
  Board, for the avoidance of doubt, no period of notice that is given or that
  ought to have been given under applicable law in respect of such termination
  of employment will be utilised in determining entitlement under the Rules of
  the Scheme.”

  
	
   

  	
   

  	
   

  
	
  Rule 6.2 shall be deleted.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Rule 6.3

  	
   

  	
  delete the words “or 6.2” where it occurs
  on the first line of that provision;

  
	
   

  	
   

  	
   

  
	
  Rule 8 shall be replaced with the
  following:

  	
   

  	
  Any stamp duty or other expenses incurred in the transfer of Lodged
  Shares by the Trustees shall be payable:

   

  (a)                                  in the case of either a
  transfer into the name or at the discretion of the Participant concerned, by
  the Trustees; and

  



 


15

















 


	
   

  	
   

  	
  (b)                                 in any other case, by the
  Participant concerned (unless the Board shall determine otherwise).

  



 


16

















 


APPENDIX
3


 


IMPERIAL TOBACCO GROUP
INTERNATIONAL


SHARE MATCHING SCHEME


 


The purpose of this Appendix is to specify
terms and conditions under which the Scheme is to be modified in its application
to any Lodged Shares or allocation of Additional Shares made or to be made to a
person resident for tax purposes in the United States of America.


 


Words and phrases defined in the Scheme
shall bear the same meaning in this Appendix 3 except as otherwise provided.


 


	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “ADS”

  	
   

  	
  American
  Depositary Shares, evidenced by American Depositary Receipts, which may be
  issued by Citibank, N.A., as depositary (“the Depositary”) pursuant to the
  Amended and Restated Deposit Agreement, dated as of November 2, 1998,
  among the Company, the Depositary and all holders and beneficial owners of
  American Depositary Shares thereunder;

  
	
   

  	
   

  	
   

  
	
  “Additional
  Share”

  	
   

  	
  a Share
  allocated pursuant to Rule 4;

  
	
   

  	
   

  	
   

  
	
  “Lodged
  Share”

  	
   

  	
  a Share:

   

  (i)                                    ,
  or ADS, if applicable, acquired by the Trustees with monies provided by an
  Employee or transferred to the Trustees by an Employee and in each case held
  by the Trustees as bare nominees for such Employee; or

   

  (ii)                                  held by an Employee in a CREST Account;

  
	
   

  	
   

  	
   

  
	
  “Share”

  	
   

  	
  an ordinary
  share in the capital of the Company or ADS, if applicable;

  
	
   

  	
   

  	
   

  
	
  Rule 2.2(d)

  	
   

  	
  insert the
  words “,to be approved by the Trustee,” after the words “CREST Account” on
  the first line of that provision;

  
	
   

  	
   

  	
   

  
	
  Rule 5.3
  (e)

  	
   

  	
  at the end
  of the sentence add the words “or, that the ADSs cease to be listed on the
  New York Stock Exchange, Inc.”

  
	
   

  	
   

  	
   

  
	
  Rule 5.8

  	
   

  	
  insert the words “(including Shares
  represented by ADSs)” after the word “Share” wherever it occurs.

  



 


17

















 


SCHEDULE 2


 


[Imperial Tobacco Group PLC
notepaper]


 


ADDITIONAL SHARE AWARD CERTIFICATE


 


IMPERIAL TOBACCO GROUP SHARE MATCHING
SCHEME (the “Scheme”)


 


This is to certify that
[                         ]
has been granted [                      ]
Additional Shares in accordance with the Scheme.


 


The Additional Shares are subject to the rules of
the Scheme and shall be held by Abacus (C.I.) Limited as Trustees of the Scheme
and of the Imperial Tobacco Group Employee and Executive Benefit Trust [and the
Imperial Tobacco Group PLC 2001 Employee Benefit Trust] until the Vesting Date.


 


The Additional Shares shall be transferred
to you as soon as practicable after the Vesting Date provided that [insert details of  performance condition(s)
imposed on the award of Additional Shares including details of performance
condition(s) if early good leaver].


 


Until the Vesting Date:


 


•                  You cannot sell,
assign, transfer, pledge, encumber or otherwise dispose of your interest in the
Additional Shares;


•                  You will not receive
any dividends in respect of the Additional Shares; and


•                  You cannot exercise
voting rights attached to the Additional Shares.


 


For and on behalf of IMPERIAL
TOBACCO GROUP PLC


 


	
  Authorised
  signatory 

  	
   

  



 


18

















 


SCHEDULE 3


 


PERFORMANCE CONDITION


For Additional Shares allocated to
executive directors of the Company


 


This Schedule 3 contains the
performance condition to which Additional Shares allocated to executive
directors of the Company after 1 February 2005 will be subject, unless and
until the Board decides otherwise.


 


The Additional Shares will only vest if the
average annual growth in the Company’s basic Earnings per Share over their
Vesting Period, as adjusted over that period on a basis confirmed as
appropriate by the auditors of the Company, for amortisation, exceptional and
extraordinary items and inflation, exceeds three (3) per cent.


 


Following testing of the performance
conditions the Board may vary, but not increase, the extent to which the
Additional Shares have vested to ensure that vesting will only occur, and at an
appropriate level, if there has been an improvement in the underlying financial
performance of the Company, including the maintenance of long-term return on
capital employed.


 


There will be no re-testing of the performance
condition if it is not achieved at the end of the Vesting Period.


 


19