Exhibit
4.4


 


 


IMPERIAL TOBACCO GROUP PLC


 


RULES OF THE IMPERIAL TOBACCO GROUP


 


LONG TERM INCENTIVE PLAN


 


Approved by the Company


on 14 August 1996


(and amended by the Remuneration Committee


on 9 October, 2 December 1996, 24 November 2000, 23
November 2001, 22 November 2002, 14 November 2003, 28 October 2005 and 26
October 2007.)


Amended by ordinary resolutions of the Company passed
on 1 February, 2005 and 31 January, 2006


 

















 


CONTENTS


 


	
  CLAUSE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Operation
  of the Plan

  	
   

  	
  2

  
	
  2.

  	
  Terms of a Conditional Award

  	
   

  	
  2

  
	
  3.

  	
  Plan
  limit

  	
   

  	
  3

  
	
  4.

  	
  Grant of Conditional Awards

  	
   

  	
  3

  
	
  5.

  	
  Obligations of Employee

  	
   

  	
  4

  
	
  6.

  	
  Leaving Service or
  Reconstruction or Takeover during the Performance Period

  	
   

  	
  4

  
	
  7.

  	
  Determination of Options

  	
   

  	
  6

  
	
  8.

  	
  Options

  	
   

  	
  6

  
	
  9.

  	
  Exercise and lapse of Options

  	
   

  	
  7

  
	
  10.

  	
  Reconstruction or Takeover
  before the Release Date - Lapse of Options

  	
   

  	
  7

  
	
  11.

  	
  Capital reorganisation

  	
   

  	
  8

  
	
  12.

  	
  General

  	
   

  	
  8

  
	
  13.

  	
  Amendment and termination

  	
   

  	
  9

  
	
  14.

  	
  Governing
  Law

  	
   

  	
  9

  
	
   

  
	
  Schedule 1

  	
  International
  Rules

  	
   

  	
  10

  
	
  Appendix 1

  	
  Australia

  	
   

  	
  11

  
	
  Appendix 2

  	
  Belgium

  	
   

  	
  12

  
	
  Appendix 3

  	
  France

  	
   

  	
  14

  
	
  Appendix 4

  	
  Ireland

  	
   

  	
  16

  
	
  Appendix 5

  	
  Netherlands

  	
   

  	
  18

  
	
  Appendix 6

  	
  United
  States of America

  	
   

  	
  22

  
	
  Schedule 2

  	
  Performance
  condition for Conditional Awards granted after 28 October 2005

  	
   

  	
  21

  
	
  Schedule 3

  	
  Individual
  limits on participation

  	
   

  	
  23

  
					



 

















 


Definitions


 


“Certificate
of Participation” means a certificate of participation issued pursuant to Rule
4(2).


 


“Committee” means the Remuneration Committee of the
Board of Directors of the Company.


 


“Company”
means Imperial Tobacco Group PLC.


 


“Conditional Award” means a conditional award to an
Employee of Shares, in accordance with the Rules.


 


“Control” has
the same meaning as in section 840 of the Income and Corporation Taxes Act
1988.


 


“Employee” means any employee for the time
being in full or part time employment of any Group Company and any director of
any Group Company who is required to devote substantially the whole of his
working time to his employment or office.


 


“Exercise Price” means the nominal price payable on
the exercise of an Option to be determined by the Company or the Trustee.


 


“Group Company” means the Company and any company that
is under the Control of the Company and is designated by the Committee as a
participating company for the purposes of the Plan.


 


“London Stock
Exchange” means the London Stock Exchange plc.


 


“Market Value” in relation to a Share, means its
middle market quotation (as derived from the Daily Official List of the London
Stock Exchange) on the relevant date;


 


“Model Code” means the model code on directors’ and relevant
employees’ dealings in securities, as set out in the listing rules published by
the UK Listing Authority.


 


“Option” means the right to acquire, at the Exercise
Price, that number of Shares determined under Rule 7 (which right shall be
capable of being exercised at any time before the seventh anniversary of its
grant).


 


“Option
Certificate” means a certificate issued pursuant to Rule 8(2).


 


“Participant” means an Employee who has a Conditional
Award or an Option (and includes the Participant’s personal representatives
where appropriate).


 


1

















 


“Performance Condition” means the condition or
conditions determined by the Committee as required under Rule 2 and notified to
a Participant, which, until amended, will be as set out in Schedule 2 for any
Conditional Awards granted after 1 February 2005.


 


“Performance Period” means the period
specified in a Certificate of Participation in respect of which a Performance
Condition may be satisfied.


 


“Plan” means the Imperial Tobacco Group
Long Term Incentive Plan constituted by this document as may be amended from
time to time in accordance with the Rules.


 


“Reconstruction or Takeover” means any takeover,
merger, amalgamation or reconstruction, however effected, including a reverse
takeover, partial offer, reorganisation or scheme of arrangement sanctioned by
the court as a result of which there is a change in Control of the Company or
any compromise or arrangement sanctioned by the Court under section 425 of the
Companies Act 1985.


 


“Release Date” means the seventh (7th)
anniversary of the date on which an Option is granted, being the latest date on
or by which such Option may be exercised by a Participant.


 


“Rules” means
these rules as amended from time to time.


 


“Shares” means
fully paid ordinary shares in the capital of the Company.


 


“Tax” means any tax, duty, impost, levy
charge or royalty in the nature of tax, whether domestic or foreign, and
whether or not chargeable directly against the person concerned or any other
person, and any fine, penalty or interest connected therewith.


 


“Trustee” means the trustees of any trust
established by the Company or any other Group Company for the benefit of
Employees.


 


Where the context so admits the singular shall include
the plural and vice versa and the masculine gender shall include the feminine. Any
reference to a statutory provision is to be construed as a reference to that
provision as for the time being amended or re-enacted.


 


1.                                           Operation of the Plan


 


The
Plan shall be operated by the Committee at any time and at its discretion.


 


2

















 


2.                                           Terms of a Conditional Award


 


On or
before granting a Conditional Award the Committee shall determine the following
in relation to such Conditional Award:-


 


(1)          the
maximum number of Shares the subject of such Conditional Award;


 


(2)          the
Performance Period;


 


(3)          the
Performance Conditions to be satisfied in respect of the Performance Period;
and


 


(4)                            subject to
Rules 6 and 7, the date that the Shares the subject of such Conditional Award
shall be capable of vesting.


 


3.                                           Plan Limit


 


(1)                          The Committee shall consider whether the Company, subject to any
applicable statutory or regulatory restrictions, should issue Shares to the
Trustee or whether the Trustee should be requested to purchase Shares in
respect of Conditional Awards.


 


(2)                            The number
of Shares available under the Plan on any date will be limited so that:


 


(i)                         the total number of Shares acquired or that may be acquired during
the period of ten years ending on that date under the Plan 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; or


 


(ii)                      the total number of Shares acquired or that may be acquired during
the period of five years ending on that date under the Plan 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; and


 


(iii)                   the total number of Shares acquired or that may be acquired during
the period of ten years ending on that date under the Plan 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.


 


4.                                           Grant of Conditional Awards


 


(1)                            Subject to Rule 12(5), the Committee may grant a Conditional Award
at any time to any Employee(1). The Committee will, from time to time, specify
a limit that will apply to the maximum Market Value (determined at the date of
grant) of the Shares that may be made subject to a Conditional Award on an
annual basis to any Employee selected to participate. No Conditional Award will
be granted to an


 






(1)                                  Amended
by the Remuneration Committee on 3 September 2007 to ensure the LTIP complies
with the UK Age Discrimination Regulations


3

















 


 


Eligible
Employee in excess of the specified limit without the approval of the Committee
which will normally only be in exceptional circumstances (such as on the
recruitment of a key employee). Unless and until amended by the Committee the
limits will be as set out in Schedule 3.


 


(2)                            A
Participant who is granted a Conditional Award shall receive a Certificate of
Participation (to take effect as a deed executed by the Company) as soon as
reasonably practicable following the date of grant. The Certificate of
Participation shall set out the terms of the Participant’s Conditional Award as
specified in Rule 2.


 


(3)                            If at any
time after the grant of a Conditional Award the Committee considers that
circumstances have arisen which would prevent the terms of the Conditional
Award (as regards the operation of the Plan generally or in respect of any
Participant) from operating fairly in accordance with the spirit of the Plan,
the Committee may vary any of those terms and specify any other terms
applicable to the operation of the Plan PROVIDED THAT any amendments made to
the Performance Condition shall, in the opinion of the Committee, ensure that
the revised Performance Condition is neither easier nor more difficult to
achieve than the original Performance Condition when first set. The Committee
shall notify Participants of the details of any variation that affects a
Participant.


 


5.                                           Obligations of Employee


 


(1)                            An
Employee who receives a Conditional Award may renounce the Conditional Award
within thirty days of the date on which it is made, in which event such
Conditional Award shall be deemed for all purposes never to have been made.


 


(2)                            A
Participant to whom a Conditional Award is granted (and who does not renounce
such Conditional Award) shall:


 


(a)                       be bound by the terms of the Plan;


 


(b)                      not assign, transfer or charge such Conditional Award or any
interest in it;


 


(c)                       indemnify the Company, all Group Companies and the Trustee against
any liability any of them may have to make a payment of Tax in connection with
the Participant’s participation in the Plan; and


 


(d)                      as a condition
of that grant agree to the collection, processing, transfer (including to
countries outside the European Economic Area) and retention of the Participant’s
personal data for use in connection with the operation of the Plan by a Group
Company, the Trustee and/or any third party retained by the Committee to
administer the Plan.


 


6.                                           Leaving Service or Reconstruction or Takeover
during the Performance Period


 


(1)                            Subject to
Rules 6(2) and 6(3), if a Participant ceases to be an Employee before the
expiry of the Performance Period, his Conditional Award shall immediately lapse.


 


4

















 


(2)     (i)                                        If a Participant ceases to be an Employee before the expiry of the
Performance Period by reason of


 


•                                death;


 


•                                injury, ill-health, or disability;


 


•                                redundancy;


 


•                                (2);


 


•                                the Group Company or business in which the Participant is employed
ceasing to be under the Control of the Company, or to be owned by a Group
Company; or


 


•                                any other circumstances where the Committee so decides,


 


the
Performance Period shall be deemed to have ended as at the date on which the
Participant ceases to be an Employee (which period shall be referred to as “the
Relevant Period”) and the number of Shares to be the subject of an Option in
respect of the relevant Conditional Award shall be equal to A where A = x/yPA
(the “formula”) where:-


 


A
is the number of Shares to be the subject of
such Option;


 


PA is the number of Shares determined by the application of the
Performance Condition to the Relevant Period;


 


x
is the number of days comprised in the
Relevant Period; and


 


y is the total number of days which would have been comprised in the
Performance Period had the Participant not ceased to be an Employee.


 


(ii)                           In the case of death an Option shall be granted to the personal
representatives of the Participant in respect of the number of Shares
determined by the formula set out in this Rule 6(2) but may only be exercised
by the same on the production of an Office Copy Grant of Probate or Letters of
Administration.


 


(3)                          If a Participant ceases to be an Employee before the expiry of the
Performance Period by reason of (3) redundancy the Committee may determine that
the formula shall not be applied either in whole or in part. However, the
number of Shares to be the subject on an Option granted under this Rule 6(3)
cannot exceed that number of Shares that would have been the subject of an
Option if the formula had been applied.


 


(4)                          If there is a Reconstruction or Takeover before the expiry of the
Performance Period, the Performance Period shall be deemed to have ended on the
date on which the change of Control takes effect (which period will be the
Relevant Period) and the


 






(2)           See footnote 1 above


(3)           See footnote 1 above


5

















 


number of Shares to be the subject of Options in respect of Conditional
Awards will be equal to A, as determined under the formula set out in Rule 6
(2).


 


(5)                            If in
consequence of an offer to shareholders in the Company (or any of them) or any
scheme of reconstruction (however effected) before the expiry of the
Performance Period the Shares are to cease to be listed on the London Stock
Exchange, the Committee shall notify Participants and the Performance Period
shall be deemed to have ended on the date of such notification (which period
will be the Relevant Period) and the number of Shares to be the subject of Options
in respect of Conditional Awards will be equal to A, as determined under the
formula set out in Rule 6 (2).


 


7.                                           Determination of Options


 


(1)                            As soon as
reasonably practicable after, but in any event within 35 days of, the date
determined by the Committee for the purposes of Rule 2(4) (or, but only in the
circumstances set out in Rule 6(2), 6(3), 6(4) or 6(5), as soon as reasonably
practicable after, but in any event within 35 days of, the deemed end of the
Performance Period) an Option shall be granted to a Participant by either the
Company or the Trustee over such number of Shares the subject of the relevant
Conditional Award as is determined by the application of the Performance
Condition and, but only where required in accordance with the terms of Rule
6(2) or 6(3), the formula.


 


(2)                          The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which are not made the subject of the
corresponding Option.


 


8.                                           Options


 


(1)                            If Options
are to be granted by the Trustee the Company shall advise the Trustee of the
number of Shares to be comprised in the Options to be granted and the Release
Date applicable to such Options and the Trustee shall be requested to grant
Options on the basis advised to it.


 


(2)                            If Options
are to be granted by the Company, Rule 8(1) shall not apply and the Company
will decide upon the number of Shares to be comprised in the Options it is to
grant and the Release Date applicable to such Options and shall grant such
Options on this basis.


 


(3)                            An Option
Certificate executed under seal or otherwise to take effect as a deed
specifying the number of Shares the subject of the Option, the Exercise Price
and the Release Date shall be issued to the Participant.


 


(4)                          The Company, any relevant Group Company and/or the Trustee may in
their absolute discretion make such arrangements as it or they consider
necessary or desirable to meet any liability to Tax or other imposts in respect
of Options granted under the Plan.


 


6

















 


(5)                            A
Participant to whom an Option is granted shall not assign, transfer or charge
such Option or any interest in it.(4)


 


9.                                           Exercise and Lapse of Options


 


(1)                            Save as
otherwise provided in these Rules, an Option may be exercised in whole or in
part at any time after an Option is granted pursuant to Rule 8 and until the
Release Date.


 


(2)                          An Option shall be exercised by the Participant lodging with the
Trustee at its registered office (or such other address as may be notified to
Participants from time to time) a notice in such form as the Trustee may from
time to time prescribe and payment (in such manner as the Trustee shall direct)
of the Exercise Price; the date of exercise shall be the date of receipt by the
Trustee of such notice.


 


(3)                          Following any exercise of an Option in part (other than an exercise
which exhausts the Option), the Participant shall be sent a new Option
Certificate in respect of the balance of Shares the subject of such Option.


 


(4)                          Shares shall be transferred to a Participant as soon as reasonably
practicable after the Option is exercised.


 


(5)                          Shares transferred pursuant to the Plan will rank pari passu in all
respects with Shares then already in issue except that they will not rank for
any dividend or other distribution of the Company paid or made by reference to
a record date falling prior to the date of exercise of the relevant Option.


 


10.                                     Reconstruction or Takeover before the Release Date
- Lapse of Options


 


(1)                            If there
is a Reconstruction or Takeover Participants shall be notified and outstanding
Options must be exercised in whole or in part not later than the earliest of:


 


(a)                                      the
expiry of the period of six months commencing on the date there is a change of Control
of the Company;


 


(b)                                     the
expiry of the period of three months commencing on the date on which the Court
sanctions a compromise or arrangement under section 425 of the Companies Act
1985;


 


(c)                                      the
expiry of the period during which any person becomes bound or entitled to
acquire Shares under sections 428 to 430F of the Companies Act 1985.


 


(2)                            If the
Shares are to cease being listed on the London Stock Exchange Participants
shall be notified and outstanding Options must be exercised in whole or in part
prior to or within six months from the date of such cessation.


 






(4)           Amended by the Remuneration Committee
on 28 October 2005


 


7

















 


(3)                            An Option
shall lapse and be of no further effect if, or to the extent that, it shall not
have been exercised by the expiry of any time limit for exercise set out in
this Rule 10, whichever shall expire first and in such circumstances the
Participant otherwise entitled thereto shall have no further claim or right
resulting from its lapse.


 


11.                                     Capital Reorganisation


 


(1)                            If there
is any capital reorganisation of the Company including a capitalisation issue,
rights issue or rights offer, consolidation or sub-division or any other
variation of share capital, or any special dividend, reconstruction or
demerger, a Conditional Award or an Option shall be adjusted in such manner as
the Company’s auditors, acting as experts and not as arbitrators, may confirm
in writing to be fair and reasonable.


 


(2)          Participants
shall be notified of any such adjustment.


 


12.                                     General


 


(1)                            Any notice
or other document given to any Employee or Participant pursuant to the Plan
shall be delivered to him or 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 Committee to be appropriate. 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 a Participant will
be sent entirely at the Participant’s risk.


 


(2)                          The decision of the Committee on any question of interpretation of
the Rules or any dispute relating to or connected with the Plan shall be final
and conclusive.


 


(3)                          The costs of introducing, operating and administering the Plan shall
be borne by a Group Company.


 


(4)                          The Committee shall have power from time to time to make regulations
for the administration and operation of the Plan provided that they are not
inconsistent with these Rules.


 


(5)                          No Conditional Award shall be granted to an Employee or Option
granted to or exercised by a Participant on a day when the relevant individual
is prohibited from dealing (as defined in paragraph 1 of the Model Code) in
Shares by the Model Code. The grant or exercise, as appropriate, will be
deferred until the first day on which the relevant individual is not so
prohibited.


 


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


 


8

















 


(7)                            Any
benefits received under the Plan are not pensionable.


 


13.                                     Amendment and termination


 


(1)                          The Scheme shall be administered under the direction of the
Committee who 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:-


 


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


 


(ii)                       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


 


(iii)                   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 Plan, to take account of a change in legislation, to obtain or maintain
favourable tax, exchange control or regulatory treatment for Participants in
the Plan or for any Group Company.


 


(2)                          Notwithstanding anything to the contrary contained herein, the
Committee may at any time and from time to time by resolution and without
further formality amend the Plan in such manner as the Committee may consider
necessary or desirable 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 Plan is or is intended to be operated.


 


(3)                          The limits in Rule 3(2) may not be increased without the approval of
the shareholders of the Company in General Meeting.


 


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


 


(5)                          The Committee shall have discretion to terminate the Plan at any
time which shall in any event terminate on 1 February 2015 but, in each case,
without prejudice to outstanding Conditional Awards or Options.


 


9

















 


14.                                     Governing Law


 


The
Plan is governed by English law and if there is any conflict of laws, English
law shall prevail. All Group Companies and Participants shall submit to the
non-exclusive jurisdiction of the English Courts as regards any matter arising
under the Plan.


 


10

















 


SCHEDULE 1


 


INTERNATIONAL RULES


 


 


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


 


Germany


Greece


Hong Kong


Hungary


Poland


Russia


Singapore


Slovenia


Spain


Turkey


 


The Rules of the Plan apply with and subject to the
following amendments and provisions which have been adopted by the Board
pursuant to rule 13.2 for the purposes of the operation of the Plan in the
jurisdictions specified below:


 


Australia (Appendix 1)


Belgium (Appendix 2)


France (Appendix 3)


Ireland (Appendix 4)


Netherlands (Appendix 5)


United States of America (Appendix 6)


 


11

















 


APPENDIX 1


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify the terms
and conditions under which the Plan is to be modified in its application to any
rights granted or to be granted under the Plan to a person resident for tax
purposes in Australia.


 


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


 


1.                                           In the definition of “Conditional Award” the words “a conditional
award to an Employee of Shares” shall be deleted and replaced with the words “an
Option granted”.


 


2.                                           The definition of “Option” shall be deleted and replaced with the
following:


 


‘“Option”
means the right to acquire at the Exercise Price one Share (and “Options” means
a number of rights equal to the number of Shares specified in the Certificate
of Participation, each of which is a right to acquire one Share) (and which
right shall be capable of being exercised at any time from the date specified
in the Certificate of Participation until the tenth anniversary of its grant)’;


 


3.                                           The definition of “Option Certificate” shall be deleted.


 


4.                                           In the definition of “Participant” the words “or an Option” shall be
deleted.


 


5.                                           In the definition of “Release Date” the words “seventh (7th)” shall
be deleted and replaced with the words “tenth (10th)”.


 


6.                                           Rule 2(4) shall be deleted and replaced with the following:


 


“(4)                        Subject to
Rule 6, the date from which the Options shall be capable of being exercised by
the Participant.”


 


7.                                           Rule 4 shall be amended as follows:


 


7.1                                     Rule 4(1) shall be deleted and replaced with the following:


 


“4(1)                 Subject
to Rule 11(5), the Committee(5) may grant Options at any time to any Employee
over such number of Shares specified in Rule 2(1)(6). The Committee will, from
time to time, specify a limit that will apply to the maximum Market Value
(determined at the date of grant) of the Shares that may be made subject to Options
on an annual basis to any Employee selected to participate. No Options will be
granted to an Eligible Employee in excess of the specified limit without the
approval


 






(5)           Amended by the Remuneration Committee
on 28 October 2005


(6)           See footnote 1 above


 


12

















 


of the
Committee which will normally only be in exceptional circumstances (such as on
the recruitment of a key employee). Unless and until amended by the Committee
the limits will be as set out in Schedule 3.”(7)


 


7.2                                     in the last line of Rule 4(2) insert the words “together with the
Exercise Price and the Release Date applicable to such Options.”


 


8.                                           In the penultimate and final lines of the paragraph following the
bullet points in Rule 6(2)(i) the words “to be the subject of an Option in
respect of the relevant Conditional Award” shall be deleted and replaced with
the words “the subject of the Options”;


 


9.                                           Rule 7 shall be deleted.


 


10.                                     Rule 8(1), 8(2) and 8(3) shall be deleted.


 


11.                                     Rules 8(4), 8(5)(8), 9, 10, 11, 12, 13 and 14 and any references
thereto shall be re-numbered accordingly.


 


12.                                     The re-numbered Rule 8 (Exercise and Lapse of Options) shall be
amended as follows:


 


12.1                               Rule 8(1) shall be deleted and replaced with the following:


 


“8(1)                                                                 Save as otherwise provided in these Rules, Options may be exercised
over such number of Shares the subject of such of the Options as have not
lapsed following the application of the Performance Condition and, but only
where required in accordance with the terms of Rule 6(2) or 6(3), the formula
set out in such Rule, at any time after the Performance Period and until the
Release Date.”


 


12.2                               after Rule 8(1) insert the following:


 


“8(2)                                                                 If and to the extent that the application of the Performance
Condition and, but only where required in accordance with the terms of Rule
6(2) or 6(3), the formula set out in such Rule results in any Options becoming
incapable of being exercised, those Options shall lapse.


 


8(3)                                                                       Following any exercise or lapse of Options, the Participant shall
receive a new Certificate of Participation stating the remaining number of
Options held by the Participant.”


 


12.3                               Rules 8(2) to (5) and any references thereto shall be re-numbered
accordingly.


 


12.4                               Re-numbered Rule 8(5) shall be deleted.


 


12.5                               in the first line of re-numbered Rule 8(6) the word “the” shall be
deleted and replaced with the word “an”.


 






(7)           Amended by the
Remuneration Committee on 28 October, 2005


(8)           Amended by the
Remuneration Committee on 28 October 2005


 


13

















 


13.                                     Re-numbered Rule 11(5) (General) shall be amended as follows:


 


13.1                               in the first line the words “granted to or” shall be deleted and
replaced with the words “may be”.


 


14.                                     In the last line of re-numbered Rule 12(5) (Amendment and
Termination) the words “Conditional Award or” shall be deleted.


 


14

















 


APPENDIX 2


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify terms and
conditions under which the Plan is to be modified in its application to any
Conditional Award or Option granted or to be granted to a person resident for
tax purposes in Belgium.


 


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


 


1.                                           The definitions of “Exercise Price”, “Option”, “Option Certificate”,
and “Release Date” shall be deleted.


 


2.                                           The words “or an Option” in the definition of “Participant” will be
deleted.


 


3.                                           Rule 6(2)(i) shall be amended:


 


3.1           by
replacing the words “number of Shares to be the subject of an Option in respect
of        the relevant Conditional Award shall be” with the words “relevant
Conditional Award shall        vest in respect of the number of Shares”; and


 


3.2           by
amending the definition of “A” to read “is the number of Shares in respect of  which the
Conditional Award shall vest”.


 


4.                                           Rule 6(2)(ii) shall be amended and the words:


 


“In the
case of death an Option shall be granted to the personal representatives of the
Participant in respect of the number of Shares determined by the formula set
out in this Rule 6(2) but may only be exercised by the same on the production
of an Office Copy Grant of Probate or Letters of Administration” shall be
deleted and replaced with the words “In the case of death the number of Shares
determined by the formula set out in this Rule 6(2) shall only be transferred
to the personal representatives of the Participant on the production of an
Office Copy Grant of Probate or Letters of Administration.”


 


5.                                           Rule 6(3) shall be amended by replacing the words:


 


“to be
the subject on an Option granted under this Rule 6(3) cannot exceed that number
of Shares that would have been the subject of an Option if the formula had been
applied”


 


with
the words:


 


15

















 


“in
respect of which a Conditional Award will vest under this Rule 6(3) cannot
exceed that number of Shares in respect of which a Conditional Award would have
vested if the formula had been applied.”


 


6.                                           Rules 6(4) and 6(5) shall be amended by replacing the words:


 


“to be the subject of Options in respect of
Conditional Awards”


 


where they appear in those rules with the words:


 


“in respect of which a Conditional Award will vest.”


 


7.                                           Rule 7 shall be re-titled “Transfer of Shares”.


 


8.                                           Rules 7(1) and (2) shall be deleted and replaced with the following:


 


“7(1)                                                                   After the date determined by the Committee for the purposes of Rule
2(4) (or, but only in the circumstances set out in Rule 6(2), 6(3), 6(4) or
6(5), as soon as reasonably practicable after the deemed end of the Performance
Period) the number of Shares the subject of the relevant Conditional Award, as
is determined by the application of the Performance Condition and, but only
where required in accordance with the terms of Rule 6(2) or 6(3), the formula, will
vest in the Participant and such Shares shall be transferred as soon as
practicable to the relevant Participant.


 


7(2)                                                                         The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with the Rules.


 


7(3)                                                                         The Company, any relevant Group Company and/or the Trustee may in
their absolute discretion make any arrangements considered necessary or desirable
to meet any liability to Tax or other imposts in respect of a Conditional Award
and/or the transfer of Shares subject to a Conditional Award.


 


7(4)                                                                         Shares transferred pursuant to the Plan will pari passu in all
respects with Shares already in issue except that they will not rank for any
dividend or other distribution of the Company paid or made by reference to a
record date falling before the date on which the Shares are transferred.”


 


9.                                           Rules 8, 9 and 10 shall be deleted.


 


16

















 


10.                                     Rules 11, 12, 13, and 14 shall be re-numbered accordingly.


 


11.                                     The words “or an Option” in Rule 11(1) (to be renumbered Rule 8(1)
further to paragraph 10 above) will be deleted.


 


12.                                     Rule 12(5) (to be renumbered Rule 9(5) further to paragraph 10
above) shall be amended by replacing the words:


 


12.1                      “Option granted to or exercised by a participant” with the words “Shares
be transferred pursuant to the vesting of a Conditional Award”; and


 


12.2                      “grant or exercise” with the words “vesting or transfer”.


 


13.                                     The words “or Options” at the end of Rule 13(5) (to be renumbered
Rule 10(5) further to paragraph 10 above) will be deleted.


 


17
















APPENDIX 3


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify terms and
conditions under which the Plan is to be modified in its application to any
Conditional Award or Option granted or to be granted to a person resident for
tax purposes in France.


 


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


 


1.              The
definitions of “Exercise Price”, “Option”, “Option Certificate”, and “Release
Date” shall be deleted.


 


2.              The
words “or an Option” in the definition of “Participant” will be deleted.


 


3.              Rule
5(2)(c) shall be amended and the words:


 


“a
payment of Tax in connection with his participation in the Plan” shall be
deleted and replaced by “a payment of Tax by way of withholding in connection
with his participation in the Plan”.


 


4.              Rule
6(2)(i) shall be amended:


 


4.1           by
replacing the words “number of Shares to be the subject of an Option in respect
of the relevant Conditional Award shall be” with the words “relevant
Conditional Award shall vest in respect of the number of Shares”; and


 


4.2           by
amending the definition of “A” to read “is the number of Shares in respect of
which the Conditional Award shall vest”.


 


5.              Rule
6(2)(ii) shall be amended and the words:


 


“In the
case of death an Option shall be granted to the personal representatives of the
Participant in respect of the number of Shares determined by the formula set
out in this Rule 6(2)(ii) but may only be exercised by the same on the production
of an Office Copy Grant of Probate or Letters of Administration” shall be
deleted and replaced with the words “In the case of death the number of Shares
determined by the formula set out in this Rule 6(2) shall only be transferred
to the personal representatives of the Participant on the production of an
Office Copy Grant of Probate or Letters of Administration.”


 


18

















 


6.              Rule
6(3) shall be amended by replacing the words:


 


“to be
the subject on an Option granted under this Rule 6(3) cannot exceed that number
of Shares that would have been the subject of an Option if the formula had been
applied”


 


with the words:


 


“in
respect of which a Conditional Award will vest under this Rule 6(3) cannot
exceed that number of Shares in respect of which a Conditional Award would have
vested if the formula had been applied.”


 


7.              Rules
6(4) and 6(5) shall be amended by replacing the words:


 


“to be the subject of Options in respect of
Conditional Awards”


 


where they appear in those rules with the words:


 


“in respect of which a Conditional Award will vest.”


 


8.              Rule
7 shall be re-titled “Transfer of Shares”.


 


9.              Rules
7(1) and (2) shall be deleted and replaced with the following:


 


“7(1)                       After the date determined by the Committee for the purposes of Rule
2(4) (or, but only in the circumstances set out in Rule 6(2), 6(3), 6(4) or
6(5), as soon as reasonably practicable after the deemed end of the Performance
Period) the number of Shares the subject of the relevant Conditional Award, as
is determined by the application of the Performance Condition and, but only
where required in accordance with the terms of Rule 6(2) or 6(3), the formula, will
vest in the Participant and such Shares shall be transferred as soon as
practicable to the relevant Participant.


 


7(2)                         The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with the Rules.


 


7(3)                         The Company, any relevant Group Company and/or the Trustee may in their
absolute discretion make any arrangements considered necessary or desirable to
meet any liability to Tax or other imposts in respect of a Conditional Award
and/or the transfer of Shares subject to a Conditional Award.


 


7(4)                         Shares transferred pursuant to the Plan will pari passu in all
respects with Shares already in issue except that they will not rank for any
dividend or other distribution of the


 


19

















 


Company paid or made by reference to a
record date falling before the date on which the Shares are transferred.”


 


10.            Rules
8, 9 and 10 shall be deleted.


 


11.            Rules
11, 12, 13, and 14 shall be re-numbered accordingly.


 


12.            The
words “or an Option” in Rule 11(1) (to be renumbered Rule 8(1) further to
paragraph 11 above) will be deleted.


 


13.            Rule
12(5) (to be renumbered Rule 9(5) further to paragraph 11 above) shall be
amended by replacing the words:


 


13.1        “Option
granted to or exercised by a participant” with the words “Shares be transferred
pursuant to the vesting of a Conditional Award”; and


 


13.2        “grant or
exercise” with the words “vesting or transfer”.


 


14.            The
words “or Options” at the end of Rule 13(5) (to be renumbered Rule 10(5)
further to paragraph 11 above) will be deleted.


 


20

















 


APPENDIX 4


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify terms and
conditions under which the Plan is to be modified in its application to any
conditional award or option granted or to be granted to a person resident for
tax purposes in Ireland.


 


Words and phrases defined in the Plan shall bear the
same meaning in this Appendix 4 except as otherwise provided.


 


1.              In
the definition of “Option” the word “seventh” shall be deleted and replaced by “fourth”.


 


2.              In
the definition of “Release Date” the words “seventh (7th) shall be deleted and
replaced by “fourth (4th)”.


 


21

















 


APPENDIX 5


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify terms and
conditions under which the Plan is to be modified in its application to any
Conditional Award or Option granted or to be granted to a person resident for
tax purposes in the Netherlands.


 


Words and phrases defined in the Plan shall bear the
same meaning in this Appendix 5 except as otherwise provided.


 


1.              The
definitions of “Exercise Price”, “Option”, “Option Certificate”, and “Release
Date” shall be deleted.


 


2.              The
words “or an Option” in the definition of “Participant” will be deleted.


 


3.              Rule
6(2)(i) shall be amended:


 


3.1         by replacing the words “number
of Shares to be the subject of an Option in respect of the relevant Conditional
Award shall be” with the words “relevant Conditional Award shall vest in
respect of the number of Shares”; and


 


3.2         by amending the definition of
“A” to read “is the number of Shares in respect of which the Conditional Award
shall vest”.


 


4.              Rule
6(2)(ii) shall be amended and the words:


 


“In the
case of death an Option shall be granted to the personal representatives of the
Participant in respect of the number of Shares determined by the formula set
out in this Rule 6(2)(ii) but may only be exercised by the same on the
production of an Office Copy Grant of Probate or Letters of Administration”
shall be deleted and replaced with the words “In the case of death the number
of Shares determined by the formula set out in this Rule 6(2) shall only be
transferred to the personal representatives of the Participant on the
production of an Office Copy Grant of Probate or Letters of Administration.”


 


5.              Rule
6(3) shall be amended by replacing the words:


 


“to be
the subject on an Option granted under this Rule 6(3) cannot exceed that number
of Shares that would have been the subject of an Option if the formula had been
applied”


 


with
the words:


 


22

















 


“in
respect of which a Conditional Award will vest under this Rule 6(3) cannot
exceed that number of Shares in respect of which a Conditional Award would have
vested if the formula had been applied.”


 


6.              Rules
6(4) and 6(5) shall be amended by replacing the words:


 


“to be
the subject of Options in respect of Conditional Awards”


 


where
they appear in those rules with the words:


 


“in
respect of which a Conditional Award will vest.”


 


7.              Rule
7 shall be re-titled “Transfer of Shares”.


 


8.              Rules
7(1) and (2) shall be deleted and replaced with the following:


 


“7(1)                       After the date determined by the Committee for the purposes of Rule
2(4) (or, but only in the circumstances set out in Rule 6(2), 6(3), 6(4) or
6(5), as soon as reasonably practicable after the deemed end of the Performance
Period) the number of Shares the subject of the relevant Conditional Award, as
is determined by the application of the Performance Condition and, but only
where required in accordance with the terms of Rule 6(2) or 6(3), the formula, will
vest in the Participant and such Shares shall be transferred as soon as
practicable to the relevant Participant.


 


7(2)                         The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with the Rules.


 


7(3)                         The Company, any relevant Group Company and/or the Trustee may in
their absolute discretion make any arrangements considered necessary or
desirable to meet any liability to Tax or other imposts in respect of a
Conditional Award and/or the transfer of Shares subject to a Conditional Award.


 


7(4)                         Shares transferred pursuant to the Plan will pari passu in all
respects with Shares already in issue except that they will not rank for any
dividend or other distribution of the Company paid or made by reference to a
record date falling before the date on which the Shares are transferred.”


 


9.              Rules
8, 9 and 10 shall be deleted.


 


10.            Rules
11, 12, 13, and 14 shall be re-numbered accordingly.


 


23

















 


11.            The
words “or an Option” in Rule 11(1) (to be renumbered Rule 8(1) further to
paragraph 10 above) will be deleted.


 


12.            Rule
12(5) (to be renumbered Rule 9(5) further to paragraph 10 above) shall be
amended by replacing the words:


 


12.1        “Option
granted to or exercised by a participant” with the words “Shares be transferred
pursuant to the vesting of a Conditional Award”; and


 


12.2        “grant or
exercise” with the words “vesting or transfer”.


 


13.            The
words “or Options” at the end of Rule 13(5) (to be renumbered Rule 10(5)
further to paragraph 10 above) will be deleted.


 


24

















 


APPENDIX 6


 


IMPERIAL TOBACCO GROUP INTERNATIONAL


LONG TERM INCENTIVE PLAN


 


The purpose of this Appendix is to specify terms and
conditions under which the Plan is to be modified in its application to any
Conditional Award granted or to be granted to a person resident for tax
purposes in the USA.


 


Words and phrases defined in the Plan shall bear the
same meaning in this Appendix 6 except as otherwise provided.


 


1.              A definition
of “ADSs” will be included as follows:


 


“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;”


 


2.              The
definitions of “Exercise Price”, “Option”, “Option Certificate”, and “Release
Date” shall be deleted.


 


3.              The
words “or an Option” in the definition of “Participant” will be deleted.


 


4.              The
definition of “Shares” will be amended by inserting at the end of that
definition the words


 


“(including, where appropriate, ordinary
shares represented by ADSs)”.


 


5.              Rule
6(2)(i) shall be amended:


 


5.1         by replacing the words “number
of Shares to be the subject of an Option in respect of the relevant Conditional
Award shall be” with the words “relevant Conditional Award shall vest in
respect of the number of Shares”; and


 


5.2         by amending the definition of
“A” to read “is the number of Shares in respect of which the Conditional Award
shall vest”.


 


6.              Rule
6(2)(ii) shall be amended by replacing the words:


 


“an Option shall be granted to the personal representatives of the
Participant in respect of the number of Shares determined by the formula set
out in this Rule 6(2) but may only be exercised by the same on the production
of an Office Copy Grant of Probate or Letters of Administration”


 


25

















 


with the words:


 


“ the number of Shares determined by the formula set
out in this Rule 6(2) shall only be transferred to the personal representatives
of the Participant on the production of an Office Copy Grant of Probate or
Letters of Administration.”


 


7.              Rule
6(3) shall be amended by replacing the words:


 


“to be
the subject on an Option granted under this Rule 6(3) cannot exceed that number
of Shares that would have been the subject of an Option if the formula had been
applied”


 


with
the words:


 


“in
respect of which a Conditional Award will vest under this Rule 6(3) cannot
exceed that number of Shares in respect of which a Conditional Award would have
vested if the formula had been applied.”


 


8.                                           Rules 6(4) and 6(5) shall be amended by replacing the words:


 


“to be
the subject of Options in respect of Conditional Awards”


 


where
they appear in those rules with the words:


 


“in
respect of which a Conditional Award will vest.”


 


9.                Rule
7 shall be re-titled “Transfer of Shares”
and Rules 7(1) and (2) shall be deleted and replaced with the following:


 


“7(1)                       after the date determined by the Committee for the purposes of Rule
2(4) (or, but only in the circumstances set out in Rule 6(2), 6(3), 6(4) or
6(5), as soon as reasonably practicable after the deemed end of the Performance
Period) the number of Shares the subject of the relevant Conditional Award as is
determined by the application of the Performance Condition and, but only where
required in accordance with the terms of Rule 6(2) or 6(3), the formula, will
vest and be transferred to the Participant as soon as reasonably practicable,
and in any event within 35 days of the relevant vesting date.


 


7(2)                         The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with the
Rules.”


 


7(3)                         The Company, any relevant Group Company and/or the Trustee may in
their absolute discretion make any arrangements considered necessary or desirable
to meet any liability to Tax or other imposts in respect of a Conditional


 


26

















 


Award and/or the transfer of Shares subject
to a Conditional Award.


 


7(4)                         Shares transferred pursuant to the Plan will pari passu in all
respects with Shares already in issue except that they will not rank for any
dividend or other distribution of the Company paid or made by reference to a
record date falling before the date on which the Shares are transferred.”


 


10.            Rules
8, 9 and 10 shall be deleted.


 


11.            Rules
11, 12, 13, and 14 shall be re-numbered accordingly.


 


12.            The
words “or an Option” in Rule 11(1) (to be renumbered Rule 8(1) further to
paragraph 11 above) will be deleted.


 


13.            Rule
12(5) (to be renumbered Rule 9(5) further to paragraph 11 above) shall be
amended by replacing the words:


 


13.1                        “Option granted to or exercised by a participant” with the words “Shares
be transferred pursuant to the vesting of a Conditional Award”; and


 


13.2                        “grant or exercise” with the words “vesting or transfer”.


 


14.            The
words “or Options” at the end of Rule 13(5) (to be renumbered Rule 10(5)
further to paragraph 11 above) will be deleted.


 


27

















 


SCHEDULE 2


 


PERFORMANCE CONDITION


 


This Schedule 2 contains the
performance conditions to which Conditional Awards granted under the Plan after
28 October 2005(9) will be subject, unless and until the Committee decides
otherwise.


 


1.             Definitions


 


Words and expressions
defined in the rules of the Plan will have the same meaning in this Schedule 2,
unless otherwise stated.  The following
definitions will apply in this Schedule 2:


 


Comparator Group means:


 


Altadis S.A.


Altria Group Inc


BAT PLC


Carlsberg A/S


Diageo PLC


Gallaher Group PLC


Imperial Tobacco
Group PLC


Interbrew SA


Pernod Ricard S.A.


Reynolds American Inc


SABMiller PLC


Scottish &
Newcastle PLC


 


FTSE 100
Index means
the index of the share prices of the UK’s 100 largest companies (by market
capitalisation) calculated and maintained by FTSE International Limited.


 


Real
Earnings Per Share (“EPS”) Growth is the average annual growth in the Company’s
basic EPS over the Performance Period, as adjusted over the Performance Period
on a basis, confirmed as appropriate by the auditors of the Company, for
amortisation, exceptional and extraordinary items and inflation.


 


TSR means the total shareholder return of
a company and will be calculated for any company:


 


(i)         using
the Company’s published share prices averaged over a three month period to
determine initial and closing prices rather than those ruling on a single day;
and


 


(ii)        on
the assumption that the cash flow of dividend payments is recognised on the
date the shares are declared “ex dividend”.


 






(9)           Amended
by the Committee on 28 October 2005 to substitute Pernod Ricard S.A. for Allied
Domecq PLC in the Comparator Group


 


28

















 


The TSR calculation
for any company will be performed by an independent consultant appointed by the
Remuneration Committee and then approved by the Remuneration Committee.


 


2.             Performance Condition


 


The Performance
Condition is split into three elements, as follows: -


 


2.1           First element -


 


50 per cent. of the
Shares subject to a Conditional Award will be subject to a performance
condition based on the Company’s Real EPS Growth.


 


12.5 per cent. of the
Shares subject to the first element will vest if the Real EPS Growth equals
three (3) per cent.


 


All of the Shares
subject to the first element will vest if the Real EPS Growth is equal to or
exceeds ten (10) per cent.


 


Between these two
points the Shares subject to the first element will vest on a straight-line
basis.


 


2.2           Second element —


 


25 per cent. of the
Shares subject to a Conditional Award will be subject to a performance
condition based on the Company’s TSR relative to the TSRs of each of the
companies comprised in the FTSE 100 Index at the start of the Performance
Period over the Performance Period.


 


None of the Shares
subject to the second element will vest unless the Company’s TSR exceeds the
TSR of 50 per cent. of the companies comprised in the FTSE 100 Index.


 


30 per cent. of the
Shares subject to the second element will vest if the Company’s TSR would rank
it as the 50th Company by reference to TSR performance in the FTSE
100 Index.


 


All of the shares
subject to the second element will vest if the Company’s TSR exceeds the TSR of
75 per cent. of the companies in the FTSE 100 Index.


 


Between these
thresholds the Shares subject to the second element will vest on a
straight-line basis.


 


2.3           Third element-


 


25 per cent. of the
Shares subject to a Conditional Award will be subject to a performance
condition based on the Company’s TSR relative to TSRs of each of the companies
comprised in the Comparator Group over the Performance Period.


 


29

















 


None of the Shares
subject to the third element will vest unless the Company’s TSR exceeds the TSR
of the bottom six companies in the Comparator Group.


 


30 per cent of the
Shares subject to the third element will vest if the Company’s TSR would rank
sixth in the Comparator Group.


 


All of the Shares
subject to the third element will vest if the Company’s TSR ranks the Company
in the top three of the Comparator Group.


 


Between these
thresholds the Shares subject to the third element will vest on a straight-line
basis.


 


3.             No re-testing


 


There will be no re-testing of any of the
performance conditions if they are not achieved at the end of the Performance
Period.


 


4.             Elements
separate


 


Each element of the performance condition
will operate independently of the others and will be capable of vesting
regardless of the Company’s performance in respect of the other elements.


 


5.             Adjustments


 


The Committee may make any adjustments to
maintain the performance test applicable to any Conditional Award that it
considers appropriate to take account of any change to the determination of a
company’s TSR, the constituent companies in the Comparator Group or the FTSE
100 Index over the Performance Period or any other factor it considers
relevant.


 


6.             Committee
discretion


 


Following testing of the performance
conditions the Committee may vary, but not increase, the extent to which a Conditional
Award has 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.


 


30

















 


SCHEDULE 3


 


INDIVIDUAL LIMITS ON PARTICIPATION


 


	
  Grade

  	
   

  	
  Maximum Value of Award

  (% of base salary)

  	
   

  
	
  Chief Executive

  	
   

  	
  200

  	
   

  
	
  Finance Director

  	
   

  	
  150

  	
   

  
	
  Board Member

  	
   

  	
  100

  	
   

  
	
  Chief Executives Committee

  	
   

  	
  100

  	
  (10)

  
	
  Senior Management

  	
   

  	
  100

  	
  (11)

  



 






(10)         Amended by the Committee on
28 October 2005 from 50 to 100.


(11)         Amended by the Committee on
28 October 2005 from 50 to 100.


 


31