Document:

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                                                                     Exhibit 4.3

                      FORM OF RIGHTS AGENCY AGREEMENT

      RIGHTS AGENCY AGREEMENT (the "Agreement"), dated as of August ____, 2000,
between Pearson plc (the "Company"), organized under the laws of England and
Wales, and THE BANK OF NEW YORK, a New York banking corporation (the "Bank").

      WHEREAS, the Company is issuing to holders of its Ordinary Shares
transferable Rights to subscribe for New Shares and is extending the Offering to
holders of ADRs by issuing to such holders ADS Rights to subscribe for New ADSs
on a corresponding basis; and

      WHEREAS, the Company and the Bank are parties to the Deposit Agreement,
which provides in Section 4.04 thereof, INTER ALIA, for the distribution of
rights to holders of ADRs at the request of the Company and upon compliance with
applicable laws; and

      WHEREAS, the Company has requested that the ADS Subscription Agent make
rights available to holders of ADRs in connection with the Offering and has
taken all necessary action to register the offered securities under the
Securities Act and to otherwise comply with applicable laws; and

      WHEREAS the Company has requested that the Bank act as ADS Subscription
Agent in connection with the Offering of New ADSs, and the Bank is willing to
accept such appointment, upon the terms and subject to the conditions set forth
herein.

      NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Bank hereby agree as follows:

                 ARTICLE I -- APPOINTMENT OF THE RIGHTS AGENT

      The Company hereby appoints the Bank as the ADS subscription agent (the
"ADS Subscription Agent") in connection with the ADS Offering in accordance with
the terms and conditions of this Agreement and the Bank hereby accepts such
appointment and agrees to be bound by the terms and conditions of this Agreement
upon execution of this Agreement.

                            ARTICLE II -- DEFINITIONS

      As used herein, the following terms shall have the meanings herein
specified and shall include in the singular number the plural and in the plural
number the singular:

      ADRS shall mean American Depositary Receipts evidencing the ADSs.

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      ADS OFFERING shall mean the offer by the Company of the New ADSs to the
holders of ADRs on the register of the Depositary on the Record Date.

      ADS RIGHTS shall have the meaning ascribed thereto in Article 3 hereof.

      ADSs shall mean American Depositary Shares, each representing one Ordinary
Share.

      AGREEMENT shall mean this Rights Agency Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.

      BANK shall have the meaning ascribed thereto in the introductory statement
hereof.

      COMMISSION  shall  mean  the  United  States   Securities  and  Exchange
Commission.

      COMPANY shall have the meaning ascribed thereto in the introductory
statement hereof.

      DEPOSIT AGREEMENT shall mean the Deposit Agreement dated as of August 7,
2000, among the Company, the Bank, as Depositary, and all owners and holders
from time to time of ADRs issued thereunder.

      DEPOSITARY shall mean the Bank, as Depositary under the Deposit Agreement.

      DOLLAR SUBSCRIPTION PRICE shall mean $16.50, the U.S. dollar price at
which holders of ADRs may subscribe for New ADSs and the UK SDRT pursuant to the
ADS Offering, as specified in the Warrants and the Prospectus.

      EFFECTIVE DATE shall mean the date on which the Registration Statement is
declared effective by the Commission.

      EXPIRATION DATE shall mean the date on or prior to which payment of the
Subscription Price for New ADSs must be received by the ADS Subscription Agent,
being the date on which the Warrants evidencing the ADS Rights will expire,
which will be 12:00 noon (New York City time) on August 30, 2000 or such other
date as shall be established by agreement between the Company and the ADS
Subscription Agent for the expiration of such ADS Rights and Warrants.

      A "HOLDER" of ADRs is the person in whose name an ADR is registered on the
books of the Depositary maintained for such purposes.

      NEW ADRS shall mean ADRs to be issued upon the deposit of New Shares
pursuant to the Deposit Agreement.

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      NEW ADSs shall have the meaning ascribed thereto in Article 3 hereof.

      NEW SHARES shall mean 170,528,278 provisionally allotted Ordinary
Shares being offered for subscription by the Company pursuant to the Offering.

      OFFERING shall mean the offer by the Company of New Shares by way of
Rights to holders of Ordinary Shares, including the Depositary on behalf of
holders of ADRs, on the register of the Company at the close of business in
London on July 28, 2000.

      ORDINARY SHARES shall mean the Company's Ordinary Shares of 25 pence each.

      PAL shall mean a (transferable) provisional allotment letter evidencing
Rights, a specimen of which is annexed hereto as Exhibit A-1.

      PROSPECTUS shall mean the final prospectus in the form filed with the
Commission under the Securities Act of 1933 as it may be amended or supplemented
from time to time.

      RECORD DATE shall mean the date for determination of the holders of ADRs
entitled to receive ADS Rights, which will be 5:00 p.m. (New York City time) on
July 28, 2000 or such later date as shall be established by agreement between
the Company and the ADS Subscription Agent for determination of the holders of
ADRs entitled to receive ADS Rights and Warrants in respect thereof.

      REGISTRATION STATEMENT shall mean the Registration Statement on Form F-1
in respect of the New Shares, the Rights and the ADS Rights, including all
exhibits thereto as amended at the time such registration statement becomes
effective under the Securities Act of 1933 and as it may be amended or
supplemented from time to time.

      RIGHTS shall mean transferable rights to subscribe for the New Shares, on
the basis of 3 New Shares for every 11 Ordinary Shares held of record, which
Rights are being offered pursuant to the Offering.

      STERLING SUBSCRIPTION PRICE shall mean (pound)10, the pounds sterling
price at which holders of Ordinary Shares may subscribe for New Shares pursuant
to the Offering, as specified in the PAL and the Prospectus.

      WARRANT shall mean a transferable warrant evidencing ADS Rights, a
specimen of which is annexed hereto as Exhibit A-2.

                           ARTICLE III -- ADS OFFERING

            1. The Company will offer to the holders of ADRs transferable rights
(the "ADS Rights") to subscribe for new ADSs (the "New ADSs") at the Dollar
Subscription

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Price (as it may be adjusted), on the basis of 3 New ADSs for every 11 ADSs
held of record on the Depositary's register on the Record Date. The ADS
Offering will be made to the holders of ADRs who are on the register of the
Depositary on the Record Date by means of the Prospectus to be mailed to such
holders, and will expire on the Expiration Date. The ADS Rights will be
evidenced by the Warrants.

            2. After the establishment of the Record Date, the ADS Subscription
Agent will determine the number of ADS Rights to which each holder of record of
ADRs on the Record Date is entitled. For every 11 ADSs held of record on the
Record Date the holder thereof shall receive 3 ADS Rights.

               ARTICLE IV -- DELIVERY OF RIGHTS OFFER MATERIAL

            1. As soon as practicable following the Effective Date, (i) the
Company or its agents will advise the ADS Subscription Agent by telephone (and
confirm in writing) that the Registration Statement has been declared effective
by the Commission, (ii) the Company will deliver copies of the Prospectus to the
ADS Subscription Agent, (iii) U.S. counsel for the Company, will deliver to the
ADS Subscription Agent two original copies of its opinion to the effect that (A)
the Registration Statement has been declared effective under the Securities Act
of 1933 and (B) this Agreement has been duly authorized, executed and delivered
and constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or other similar laws affecting the
enforceability of creditors' rights generally and by general equitable
principles regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law, which opinion may rely as to matters of English
law on the opinion of the Company's English counsel and (iv) English solicitors
to the Company will deliver to the ADS Subscription Agent two original copies of
its opinion to the effect that the New Shares, when subscribed and issued, will
be fully paid.

            2. The Company will deliver to the ADS Subscription Agent
sufficient copies of the Prospectus, the Letter of Instruction, and the form
of Warrant, (including instructions as to the use thereof and, on the reverse
thereof, a substitute Form W-9), Guidelines for Certification of Taxpayer
Identification Number of Substitute Form W-9 (the "Guidelines").

            3. The ADS Subscription Agent shall send to each holder (other
than holders having an address outside of the U.S.) as of the Record Date (i)
a Prospectus, (ii) a Letter of Instruction, (iii) a Warrant evidencing the
ADS Rights to which such holder is entitled pursuant to the ADS Offering, and
(iv) a return envelope

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addressed to the ADS Subscription Agent for use by such holder (such material,
collectively, the "Rights Offer Material").

            4. In the event that the Rights Offer Material is mailed to the
address of a holder on the books of the Depositary and is returned to the ADS
Subscription Agent for any reason and a proper delivery thereof cannot be
effected to a holder, the ADS Subscription Agent shall hold such Rights Offer
Material and the related holder's right to purchase ADSs under the ADS
Offering will be treated as unexercised. The ADS Subscription Agent shall
supply the Company with such information as the Company may request with
respect to any Rights Offer Material that cannot be delivered to a holder.

            5. In the event that, prior to the Expiration Date, any holder
notifies the ADS Subscription Agent that the Rights Offer Material to which such
holder is entitled has not been delivered, or has been lost, stolen or
destroyed, the ADS Subscription Agent will furnish to such holder a copy of the
Rights Offer Material. The Company agrees to supply the ADS Subscription Agent
with sufficient copies of the Rights Offer Materials for such purposes.

            ARTICLE V  --  ACCEPTANCE OF SUBSCRIPTIONS

            1. The ADS Subscription Agent is hereby authorized and directed to
receive subscriptions for ADSs on behalf of the Company beginning on the
Effective Date and ending on the Expiration Date (the "Subscription Period").
Any funds that the ADS Subscription Agent receives during the Subscription
Period from holders in respect of payments for ADSs shall be deposited in a
non-interest bearing account that the ADS Subscription Agent designates solely
for such purpose (the "Deposit Account") and such funds shall remain in the
Deposit Account until they are distributed to the Company in accordance with
Article IX hereof.

            2. The Company hereby authorizes and directs the ADS Subscription
Agent to accept subscriptions for New ADSs on behalf of the Company upon the
proper completion and execution of Warrants in accordance with the terms thereof
and hereof. The Company further authorizes the ADS Subscription Agent to refuse
to accept, in its discretion, any improperly completed or unexecuted Warrant.

            3. Notwithstanding the foregoing, without further authorization from
the Company, except where otherwise specified or as otherwise notified in
writing by the Company prior to the Expiration Date, the following Warrants
shall be deemed to be properly completed:

            (a) any subscription with respect to which a holder has failed to
execute a Warrant in the manner provided by the terms thereof, provided that (1)
the holder has

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indicated on such Warrant or by written communication, the manner in which the
holder wishes to subscribe and (2) proper payment has been made by such holder;

            (b) any subscription by an individual (and not by a corporation,
partnership or fiduciary) which is accompanied by a check drawn by an individual
(and not by a corporation, partnership or fiduciary) other than the holder,
provided that (1) the Warrant submitted therewith has been duly executed by the
holder, (2) the holder is the holder to which such Warrant relates, (3) the
check tendered in payment of such subscription is drawn for the proper amount
and to the order of The Bank of New York - A/C Pearson plc and is otherwise in
order, and (4) there is no evidence actually known to the ADS Subscription Agent
indicating that such check was delivered to the holder by the drawer thereof for
any purpose other than the payment of the accompanying subscription;

            (c) any subscription by a custodian on behalf of a minor which is
accompanied by a check drawn by an individual (and not by a corporation,
partnership or fiduciary) other than the holder, if the provisos set forth in
clause (b) above are satisfied; or

            (d) any subscription by an individual (and not by a corporation,
partnership or fiduciary) which is accompanied by a check drawn by a
corporation, partnership or fiduciary other than the holder, if the provisos set
forth in clause (b) above are satisfied.

            4. The ADS Subscription Agent is hereby authorized to accept
subscriptions for ADSs on behalf of the Company (i) on the Expiration Date, (ii)
after determining the total number of ADSs that an owner is entitled to purchase
in the ADS Offering, pursuant to Article 3 hereof, and (iii) upon the proper
completion and execution of the Warrant, in accordance with the terms thereof
and hereof.

            5. The ADS Subscription Agent is hereby authorized to accept
subscriptions for ADSs on behalf of the Company if, on or before the
Expiration Date (i) the ADS Subscription Agent has received payment in full
of the Dollar Subscription Price, plus the UK SDRT and a completed "Notice of
Guaranteed Delivery" in the form provided by the ADS Subscription Agent, and
(ii) the ADS Subscription Agent has received a properly executed warrant by
12:00 noon (New York City time) on August 30, 2000.

            6. The ADS Subscription Agent is authorized to waive proof of
authority to sign (including the right to waive signatures of co-fiduciaries and
proof of appointment or authority of any fiduciary or other person acting in a
representative capacity) in connection with any subscription with respect to
which:

            (a) the ADSs to which the Warrant relates are registered in the name
of an executor, administrator, trustee, custodian for a minor or other fiduciary
and has been executed by such registered holder provided that the ADSs purchased
are to be issued in the name of such holder;

            (b) the ADSs to which the Warrant relates are registered in the name
of a corporation and the Warrant has been executed by an officer of such
corporation, provided that the ADSs purchased are to be issued in the name of
such corporation;

            (c) the Warrant has been executed by a bank, trust company or broker
as

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agent for the holder to which such Warrant relates, provided that the ADSs
purchased are to be issued in the name of such holder; or

            (d) the ADSs to which such Warrant relates are registered in the
name of a decedent and the Warrant has been executed by a person who purports to
act as the executor or administrator of such decedent's estate, provided that
(1) the ADSs are to be issued in the name of such person as executor or
administrator of such decedent's estate, (2) the check tendered in payment of
such subscription is drawn for the proper amount and to the order of The Bank Of
New York and is otherwise in order, and (3) there is no evidence actually known
to the ADS Subscription Agent indicating that such person is not the duly
authorized representative which such person purports to be.

            7. The ADS Subscription Agent is hereby authorized to waive any
defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine, or reject the purported exercise of any
ADS Right.

                        ARTICLE VI -- EXCHANGE PROCEDURES

            1. At any time prior to 5:00 p.m. (New York City time) on August 25,
2000, a Warrant representing ADS Rights may be surrendered by the holder thereof
to the ADS Subscription Agent at its New York office and the ADS Subscription
Agent will, if so requested in writing, cause to be delivered to the holder or
its assignee at the London office of The Bank of New York at One Canada Square,
London, E14 5AL, a PAL representing Rights to subscribe for the appropriate
number of New Shares at the Sterling Subscription Price therefor specified in
the Prospectus.

            2. At any time prior to 3:00p.m. (London time) on August 25, 2000, a
PAL representing Rights to any amount of New Shares may be surrendered by the
holder thereof duly renounced to the ADS Subscription Agent at its New York or
London office and the ADS Subscription Agent will, if so requested in writing,
deliver to such holder (or his assignee) at its New York office, as soon as
practicable, a Warrant representing ADS Rights in an amount sufficient to
subscribe for the appropriate number of New ADSs covered by such PAL.

            3. A holder depositing a Warrant or PAL pursuant to this exchange
facility must pay any taxes or levies (including UK SDRT) associated with the
deposit of such Warrant or PAL and the New Shares represented thereby and the
issuance of an ADR or New Shares in respect thereof. A holder depositing a PAL
pursuant to the exchange privilege will be liable for 1.5% of the Issue Price
per New Shares so deposited to meet any UK SDRT payable as a result of the
exercise of the ADS Right obtained thereby.

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                         ARTICLE VII -- SALE OF WARRANTS

            1. Holders may surrender their Warrants prior to 5:00 p.m. (New York
City time) on August 24, 2000, in connection with instructions from such holders
to sell such Warrants, whether or not in connection with a subscription. The ADS
Subscription Agent's obligation to execute orders will be subject to its ability
to find buyers. The ADS Subscription Agent will not be liable to any holder of
Warrants for its failure to obtain the best market price for any Warrants it
sells pursuant to such orders. The ADS Subscription Agent may charge a holder in
connection with services rendered for any expenses and commissions of such sale.
The ADS Subscription Agent will send to a holder making use of this facility a
check for the proceeds of any Warrants sold, net of fees, expenses and
commissions.

                 ARTICLE VIII -- REPORTS BY THE RIGHTS AGENT

            1. The ADS Subscription Agent will advise the Company by facsimile
transmission (i) on the Effective Date as to the total number of holders and the
total number of ADSs outstanding; and (ii) on a daily basis during the
Subscription Period as to (1) the total number of subscriptions for ADSs
pursuant to the ADS Offering that the ADS Subscription Agent has received (which
have been properly completed and executed and for which the correct payment
amount was received), and (2) the aggregate amount of funds received by the ADS
Subscription Agent in payment of such subscriptions.

            2. Not later than 6:00pm (New York City time) on the Expiration
Date, the ADS Subscription Agent will advise the Company by facsimile
transmission as to (i) the total number of ADSs subscribed for in the ADS
Offering and the total number of Shares represented thereby and (ii) the
aggregate amount of funds received by the ADS Subscription Agent in payment of
such subscriptions.

      ARTICLE IX -- PAYMENTS; INTEREST ON SUBSCRIPTION PAYMENTS; REFUNDS

            1. Reasonably promptly after the Expiration Date, the Company will
deposit the Shares underlying the ADSs with the London office of The Bank of New
York, as custodian under the Deposit Agreement and will request that the
Depositary confirm such deposit with the ADS Subscription Agent. Once the ADS
Subscription Agent receives confirmation that the Shares have been deposited,
the ADS Subscription Agent shall tender to the Company the aggregate amount of
funds held in the Deposit Account representing the Dollar Subscription Price for
the ADSs. The payment shall be made in same day funds by wire transfer, in U.S.
dollars to a bank account specified by the Company.

            2. The Dollar Subscription Price to be collected by the ADS
Subscription Agent from subscribers shall be $16.50 (representing the dollar
equivalent of (pound)10 rounded

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upward to 110% of such rate). In addition to the Dollar Subscription Price,
holders must pay the 1.5% UK SDRT. The ADS Subscription Agent, as agent for
the Company, will arrange to convert payments made on the basis of the Dollar
Subscription Price from U.S. Dollars into pounds sterling for payment to the
Company. The ADS Subscription Agent will make the conversion from U.S.
Dollars into pounds sterling as soon as practicable after 12:00 noon, New
York City time, on August 30, 2000. If the Dollar Subscription Price paid by
any subscriber to the ADS Subscription Agent, when so converted into pounds
sterling, exceeds the Sterling Subscription Price, the Subscription Agent
shall remit the excess in U.S. dollars (without interest) to the subscriber.

            3. If a payment of the Dollar Subscription Price made by a holder
of ADS Rights in respect of such holder's subscription, when converted into
pounds sterling, is less than the Sterling Subscription Price for the number
of New ADSs subscribed for upon exercise of such ADS Rights plus the 1.5% UK
SDRT, the ADS Subscription Agent will pay the amount of such deficiency to
the Company, notwithstanding the terms of Article XIII(2) hereof. The holder
will then be required to pay promptly the amount of such deficiency
(including interest and expenses) to the ADS Subscription Agent who will not
send any New ADRs evidencing New ADSs subscribed for by a holder prior to the
receipt by the ADS Subscription Agent of such payment. If payment of the
amount of any deficiency is not received from a subscriber by the ADS
Subscription Agent by September 20, 2000, the ADS Subscription Agent may sell
such New ADSs subscribed for by such subscriber at a public or private sale,
at such place or places and upon such terms as it may deem proper (so long as
such sale complies with applicable law), and the ADS Subscription Agent may
allocate the net proceeds of such sales for the account of the subscriber
upon an averaged or other practicable basis without regard to any
distinctions among such subscribers because of exchange restrictions, or
otherwise in an amount sufficient to cover such deficiency. In such event,
the ADS Subscription Agent will then send the New ADR evidencing the
remaining New ADSs to such holder together with a check in the amount of the
excess proceeds, if any, from such sale.

                         ARTICLE X -- UNEXERCISED RIGHTS

            1. The ADS Subscription Agent acknowledges and agrees that following
the Expiration Date, New Shares provisionally allotted with respect to
unexercised ADS Rights may be sold through arrangements with Goldman Sachs
International, Cazenove & Co., Goldman, Sachs & Co, and Cazenove Inc. If
a premium can be realized after deduction of expenses and commissions of sale
over the Subscription Price, the Company shall pay such amounts to the ADS
Subscription Agent in pounds Sterling. The ADS Subscription Agent shall convert
those proceeds into U.S. dollars at a commercially reasonable rate and remit the
amount so received (less any fees, expenses, commissions, and UK SDRT, if any,
in U.S. dollars, without interest, to the holders of record of such unexercised
ADS Rights as at the close of business on the Expiration Date.

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                         ARTICLE XI -- ISSUANCE OF ADRS

            1. Following receipt of the Ordinary Shares issued in respect of the
New ADSs properly subscribed for pursuant to the ADS Offering, and in accordance
with the terms of the Deposit Agreement, the ADS Subscription Agent will
deliver, by mail or by book-entry transfer, such certificates as instructed to
each holder of ADSs, an ADR evidencing the number of New ADSs for which such
holder has subscribed. Each ADR certificate will be registered in the name
specified by the holder on such surrendered Warrant.

            2. The ADS Subscription Agent will cause the New ADR certificates to
be mailed by first-class mail under a blanket surety bond protecting the ADS
Subscription Agent from any loss or liability arising out of the nonreceipt or
nondelivery of any such certificate or the replacement thereof. If the market
value of securities to be mailed in any one shipment will exceed $1,000,000,
such shipment will be sent by registered mail and will be insured separately for
the replacement value of its contents.

            ARTICLE XII  -- LIMITATIONS OF DUTIES

            1. The ADS Subscription Agent shall have no duties or obligations
other than those specifically set forth herein, including any duties or
obligations under any other agreement, and no implied duties or obligations
shall be read into this Agreement against the ADS Subscription Agent.

            2. The ADS Subscription Agent makes no, and will not be deemed to
have made, any representations with respect to, and shall have no duties,
responsibilities or obligations with respect to determining, the validity,
sufficiency, value or genuineness of any New Shares, Letter of Instruction,
PALs, Warrants or other documents deposited with or delivered to it or any
signature or endorsement set forth on or in connection with such documents.

            3. The ADS Subscription Agent shall not be obligated to commence or
voluntarily participate in any suit, action or proceeding arising or related to
this Agreement.

            4. The ADS Subscription Agent shall not be liable or responsible for
any of the statements of fact or recitals contained in this Rights Agency
Agreement, the Letter of Instruction, any other Rights Offer Materials, or any
other document or security delivered

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to it in connection with this Agreement, and shall not be required to, and shall
not, verify or determine the correctness, validity or accurateness of any such
statements or recitals contained therein.

            5. The ADS Subscription Agent may rely upon and comply with, and
shall incur no liability for relying upon and complying with, any Letter of
Instruction or other Rights Offer Material, certificate, Warrant, instrument,
opinion of counsel, notice, letter, telegram, records, or other document or
security delivered to it in connection with this Agreement.

            6. The ADS Subscription Agent may consult with legal counsel for the
Company or its own counsel (which may be in-house counsel) and rely upon any
written opinion of such counsel, and shall have no liability in respect of any
action taken, omitted or suffered by the ADS Subscription Agent hereunder in
reliance upon, and in accordance with, any such opinion.

            7. The ADS Subscription Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Company, and to apply to the Company for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the ADS Subscription Agent for written instructions from the
Company may, at the option of the ADS Subscription Agent, set forth in writing
any action proposed to be taken or omitted by the ADS Subscription Agent under
this Agreement and the date on/or after which such action shall be taken or such
omission shall be effective. The ADS Subscription Agent shall not be liable for
any action taken by, or omission of, the ADS Subscription Agent in accordance
with a proposal included in such application on or after the date specified in
such application (which date shall not be less than three business days after
the date the Company actually receives such application, unless the Company
shall have consented in writing to any earlier date) unless prior to taking any
such action (or the effective date in the case of an omission), the ADS
Subscription Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

            8. The ADS Subscription Agent shall escheat any property held by the
ADS Subscription Agent in accordance with applicable law.

            9. The ADS Subscription Agent may perform any duties hereunder
either directly or by or through its nominees, correspondents, designees,
agents, subagents or subcustodians and the ADS Subscription Agent shall not be
responsible for any misconduct or negligence on the part of any nominee,
correspondent, designee, agent, subagent or subcustodian appointed with due care
by it hereunder. In no event shall the ADS

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Subscription Agent be liable for the acts or omissions of such other nominees,
correspondents, designees, agents, subagents or subcustodians.

              ARTICLE XIII -- COMPENSATION; PAYMENT OF EXPENSES

            1. In consideration for the services to be rendered herein, the
Company shall compensate the ADS Subscription Agent in accordance with and
pursuant to a written Fee Schedule as may be agreed upon by the Company and the
ADS Subscription Agent from time to time, plus the ADS Subscription Agent's
reasonable disbursements, charges and out-of-pocket expenses and counsel fees
and expenses incurred in connection with the preparation and execution of this
Agreement and the services rendered by the ADS Subscription Agent hereunder.

            2. Except as expressly provided otherwise herein, no provision of
this Agreement shall require the ADS Subscription Agent to expend or risk the
ADS Subscription Agent's own funds or otherwise incur any financial liability in
the performance of any of the ADS Subscription Agent's duties hereunder or in
the exercise of the ADS Subscription Agent's rights.

                      ARTICLE XIV -- TERMINATION OF AGENCY

            1. Unless terminated earlier by the parties hereto, this Agreement
shall terminate thirty (30) days after the Expiration Date (the "Termination
Date"). On the business day following the Termination Date, the ADS Subscription
Agent shall deliver to the Company any Offering entitlements, if any, held by
the ADS Subscription Agent under this Agreement. The ADS Subscription Agent's
right to be reimbursed for fees, charges and out-of-pocket expenses as provided
in Article XIII above and the indemnification provisions of Article XV below
shall survive the termination of this Agreement.

            ARTICLE XV - LIMITATION OF LIABILITY; INDEMNIFICATION

            1. The ADS Subscription Agent shall not be liable for any Losses (as
defined below) or action taken or omitted or for any loss or injury resulting
from its actions or performance or lack of performance of its duties hereunder
in the absence of gross negligence or willful misconduct on its part, in which
case it shall be liable for only those Losses caused by such gross negligence or
willful misconduct. In no event shall the ADS Subscription Agent be liable for
(I) acting in accordance with the instructions from the Company or its counsel
or any agent appointed by the Company to act on behalf of the Company, (II)
special, consequential or punitive damages, for lost profits or for loss of
business, or (III) any Losses due to forces beyond the control of the ADS
Subscription Agent, including without limitation, strikes, work stoppages, acts
of war or terrorism, insurrection,

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revolution, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software and
hardware) services.

            2. The Company shall be liable for and shall indemnify hold harmless
the ADS Subscription Agent from and against any and all claims, losses,
liabilities, damages, expenses or judgments (including reasonable attorneys'
fees and expenses) (collectively referred to herein as "LOSSES") howsoever
arising from or in connection with this Agreement or the performance of the ADS
Subscription Agent's duties hereunder, the enforcement of this Agreement and
disputes between the parties hereto; PROVIDED, HOWEVER, that nothing contained
herein shall require that the ADS Subscription Agent be indemnified for the
liability it has accepted under the preceding paragraph.

                          ARTICLE XVI -- MISCELLANEOUS

            1. NOTICES. All reports, notices and other communications required
or permitted to be given hereunder shall be addressed to the following on behalf
of the respective parties hereto and delivered by hand, by courier or by
first-class mail, postage prepaid, or by telecopy promptly confirmed in writing,
as follows or to such other address as may be specified in writing form time to
time:

            To the Company:

                Pearson plc
                3 Burlington Gardens
                London, England  W1X 1LE
                Attn: General Counsel

            With a copy to:

                Morgan, Lewis & Bockius LLP
                101 Park Avenue
                New York, New York 10178
                Attn: Charles Engros, Esq.

            To the ADS Subscription Agent:

                The Bank of New York
                Reorganization Administration
                101 Barclay Street - 12W
                New York, NY  10286
                Attn:  Kelly Gallagher

                                       13
<PAGE>

                Facsimile: (212) 815-6411

            2. CONFIDENTIALITY. All information as to the Offering shall be held
by the ADS Subscription Agent and its officers, employees, representatives and
agents in strict confidence and shall be disclosed only as required by law,
regulation or any judicial, regulatory or administrative authority, including,
for the avoidance of doubt, any banking or regulatory agency with jurisdiction
over the ADS Subscription Agent.

            3. ASSIGNMENT. Neither the ADS Subscription Agent nor the Company
shall assign this Agreement without first obtaining the written consent of the
other party hereto.

            4. HEADINGS. The Article and Paragraph headings contained herein are
for convenience and reference only and are not intended to define or limit the
scope of any provision of this Agreement.

            5. ENTIRE AGREEMENT; AMENDMENT. This Agreement shall constitute the
entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto. References to
any other document or agreement shall not incorporate by reference such other
document or agreement into this Agreement and shall not impose any duties or
responsibilities, obligations or liabilities on the ADS Subscription Agent under
such other document or agreement. Except as otherwise specifically provided
herein, this Agreement may be amended only by an instrument in writing duly
executed by both parties hereto.

            6. GOVERNING LAW; JURISDICTION; CERTAIN WAIVERS.(a) This Agreement
shall be interpreted and construed in accordance with the internal substantive
laws (and not the choice of law rules) of the State of New York. All actions and
proceedings brought by the ADS Subscription Agent relating to or arising from,
directly or indirectly, this Agreement may be litigated in courts located within
the State of New York. Company hereby submits to the personal jurisdiction of
such courts; hereby waives personal service of process and consents that any
such service of process may be made by certified or registered mail, return
receipt requested, directed to the Company at its address last specified for
notices hereunder; and hereby waives the right to a trial by jury in any action
or proceeding with the ADS Subscription Agent. All actions and proceedings
brought by the Company against the ADS Subscription Agent relating to or arising
from, directly or indirectly, this Agreement shall be litigated only in courts
located within the State of New York.

            (b) The invalidity, illegality or unenforceability of any provision
of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.

                                       14
<PAGE>

            7. RIGHTS AND REMEDIES. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any such right
or remedy shall not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder shall not preclude or
inhibit the subsequent exercise of such right or remedy.

            8. REPRESENTATIONS AND WARRANTIES. The Company hereby represents,
warrants and covenants that:

            (a) The Company is a company duly organized and validly existing
under the laws of England and Wales.

            (b) This Agreement has been duly authorized, executed and delivered
on its behalf and constitutes the legal, valid and binding obligation of the
Company. The execution, delivery and performance of this Agreement by the
Company does not and will not violate any applicable law or regulation and does
not require the consent of any governmental or other regulatory body except for
such consents and approvals as have been obtained and are in full force and
effect. For the avoidance of doubt, all New Shares and New ADSs to be issued and
delivered hereunder have been registered with the Securities and Exchange
Commission and all transactions contemplated by this Agreement are in compliance
with, and not in violation of, the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended.

            9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

            10. NO THIRD PARTY BENEFICIARIES. This Agreement is for the
exclusive benefit of the parties hereto and shall not be deemed to give any
legal or equitable right, remedy or claim whatsoever to any other person.

                                       15
<PAGE>

      IN WITNESS WHEREOF, PEARSON PLC and THE BANK OF NEW YORK have duly
executed this agreement as of the day and year first set forth above.

                                          PEARSON PLC

                                          By:
                                              --------------------------------

                                          THE BANK OF NEW YORK,
                                          as the ADS Subscription Agent

                                          By:
                                              --------------------------------

                                       16<PAGE>
                        Account No.                Allotment No.
   HOLDERS OF PEARSON/RIGHTS ISSUE ORDINARY SHARES SHOULD CAREFULLY READ THE
PROSPECTUS RELATING TO PEARSON PLC DATED 9 AUGUST 2000 (THE "PROSPECTUS") BEFORE
                    DECIDING WHETHER TO TAKE UP THEIR RIGHTS

IMPORTANT--THIS DOCUMENT IS OF VALUE, AND IS NEGOTIABLE. IF YOU ARE IN ANY DOUBT
AS TO THE ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN FINANCIAL
ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR
OTHER INDEPENDENT PROFESSIONAL ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES
ACT 1986. SAVE WHERE THE CONTEXT OTHERWISE REQUIRES, TERMS DEFINED IN THE
PROSPECTUS HAVE THE SAME MEANING IN THIS LETTER.

If you have sold or transferred all your Pearson Shares (other than ex-rights),
you should forward this document, having completed the Form of Renunciation
(Form X) overleaf, together with the Prospectus, at once to the purchaser or
transferee or to the stockbroker, bank or other agent through whom the sale or
transfer was effected, for transmission to the purchaser or transferee (subject
to the restrictions set out in paragraph 4 below). If you have sold or
transferred only part of your holding of Ordinary Shares (other than ex-rights),
please contact immediately the stockbroker, bank or agent through whom the sale
or transfer was effected immediately. Application has been made to the UK
Listing Authority and to the London Stock Exchange for the Pearson Shares to be
admitted to the Official List and to trading on the London Stock Exchange
("Admission"). It is expected that Pearson Admission will become effective and
that dealings in the Pearson Shares, nil paid, will commence on 10 August 2000.
If admission has not become effective by 8:30 a.m. on 10 August 2000 or such
later time and/or date as Pearson may decide, this document shall cease to be of
any value and thereafter shall have no effect. Copies of the Prospectus prepared
in accordance with the Listing Rules made under section 142 of the Financial
Services Act 1986 as amended have been delivered to the Registrar of Companies
in England and Wales for registration as required by section 149 of the
Financial Services Act 1986 (as amended). Further copies of the Prospectus can
be obtained from or inspected at the registered office of Pearson, 3 Burlington
Gardens, London W1X 1LE and at the offices of Lloyds TSB Registrars, The
Causeway, Worthing, West Sussex BN99 6DA. The new Pearson Shares and the
Provisional Allotment Letters do not qualify for distribution under any of the
relevant securities laws of Canada, France, the Netherlands, South Africa or the
Republic of Ireland. Subject to certain exceptions, neither the Pearson Shares
nor the Provisional Allotment Letters may be directly or indirectly taken up,
offered for subscription or purchased, sold, renounced, transferred or
delivered, in or into Canada, France, the Netherlands, South Africa or the
Republic of Ireland.

                          PROVISIONAL ALLOTMENT LETTER
                                  PEARSON PLC

         (Registered in England and Wales with registered number 53723)

3 for 11 Rights Issue of up to 170,528,278 Pearson Shares at L10.00 per Pearson
 Share payable in full on acceptance not later than 3.00 pm on 1 September 2000
          THIS ENTIRE DOCUMENT MUST BE PRESENTED WHEN PAYMENT IS MADE

<TABLE>
<S>                                                           <C>
                                                                  By post or by hand to Lloyds TSB Registrars,
                                                                        The Causeway, Worthing, West Sussex
                                                                                     BN99 6DA
                                                                            Telephone: (0870) 6000632
                                                                          ----------------------------

                                                   Latest time and date for:
                                                   Acceptance and payment in full (see Box 3)      3.00 pm on 1 September 2000
                                                   Registration of renunciation                    3.00 pm on 1 September 2000
                                                   Expected despatch of share certificates by                   2 October 2000
                                                   By hand only (other than for splitting which may be by post or by hand) to
                                                   Lloyds TSB Registrars, Antholin House, 71 Queen Street, London EC4N 1SL
                                                                               Telephone: (020)7 248 9822
                                                                               ----------------------------
                                                   Latest time and date for:
                                                   Splitting, nil paid, by post or by hand           3:00 pm on 30 August 2000
                                                   Acceptance and payment in full
                                                   by hand only (see Box 3)                        3:00 pm on 1 September 2000
                                                   Splitting, fully paid, by post or by hand      3:00 pm on 14 September 2000
</TABLE>
<TABLE>
<S>                                          <C>                                  <C>

                 Box 1                                    Box 2                                   Box 3
     Holding of Pearson Shares               Number of new Pearson Shares         Amount payable (on the basis of L10.00 per
at close of business on 28 July 2000         provisionally allotted to you        new Pearson Share) on acceptance of the new

</TABLE>

DEAR SIR OR MADAM,

    1. PROVISIONAL ALLOTMENT--Subject to and in accordance with the terms of
the Prospectus and this Provisional Allotment Letter, subject to the
memorandum and articles of association of the Company and Admission becoming
effective by 8.30 a.m. on 10 August 2000 (or such later time and/or date as
Pearson may decide), you have been provisionally allotted the number of new
Pearson Shares (comprising your entitlement under the Rights Issue) set out
in Box 2 above. You have the right to subscribe for those new Pearson Shares
at a price of L10.00 per share payable in full on acceptance not later than
3.00 pm on 1 September 2000. New Pearson Shares have been provisionally
allotted to holders of Pearson Shares on the basis of 3 new Pearson Shares
for every 11 Pearson Shares held at the close of business on 28 July 2000 and
so in proportion for any other number of Pearson Shares then held.
Entitlements to new Pearson Shares have been rounded down to the nearest
whole number. Fractional entitlements have not been allotted but will be
aggregated and sold in the market for the benefit of the relevant Qualifying
Shareholders if a premium over the expenses of sale can be obtained.

    2. DIVIDEND RIGHTS--The new Pearson Shares will, when issued and fully paid,
rank PARI PASSU in all respects with the existing issued Pearson Shares,
including the right to receive in full all dividends and other distributions
thereafter declared, paid or made on the Pearson Shares other than the interim
dividend of 9.2p per Pearson Share in respect of the year ending 31 December
2000.

    3. ACCEPTANCE AND PAYMENT--If you wish to take up the new Pearson Shares
provisionally allotted to you in full, you should send this Provisional
Allotment Letter, accompanied by a remittance in pounds sterling for the full
amount payable on acceptance as shown in Box 3 above, either by post or by hand
(if delivered by hand it must be delivered during normal business hours being
Monday to Friday inclusive, between 9.00 a.m. and 5.00 p.m.) so as to reach
Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA, or by hand
ONLY to Lloyds TSB Registrars, Antholin House, 71 Queen Street, London EC4N 1SL
(during normal business hours) not later than 3.00 p.m. on 1 September 2000. A
first class reply-paid envelope is enclosed for the purpose of sending this
Provisional Allotment Letter by post in the United Kingdom. This Provisional
Allotment Letter will then be returned to the person lodging it duly receipted.
Payment of the amount set out in Box 3 above will constitute acceptance of the
provisional allotment upon the terms of the Prospectus and this Provisional
Allotment Letter and subject to the memorandum and articles of association of
the Company. Cheques and banker's drafts must be drawn on a bank or a building
society in the United Kingdom which is either a settlement member of the Cheque
and Credit Clearing Company Limited, or the CHAPS Clearing Company Limited or a
member of either of the committees of the Scottish or Belfast Clearing Houses or
which has arranged for its cheques and banker's drafts to be cleared through the
facilities provided by either of those companies or committees, and must bear
the appropriate sorting code in the top right hand corner. Cheques and banker's
drafts for the full amount payable should be made payable to "Lloyds TSB Bank
plc-A/C Pearson plc" and crossed "A/C Payee Only". No interest will be paid on
payments made before they are due. Return of the Provisional Allotment Letter
with the appropriate remittance in the form of a cheque will constitute a
warranty that the cheque (which the Company reserves the right to have presented
on receipt) will be honoured on first presentation. The Company may elect to
treat as invalid any acceptance in respect of which a remittance is notified to
it or its agent as not having been so honoured. The Company also reserves the
right to have cheques and banker's drafts presented for payment on receipt and
to instruct Lloyds TSB Registrars to seek special clearance of cheques to allow
the Company to obtain full value for all remittances at the earliest
opportunity.

    The Company may, at its sole discretion, treat a Provisional Allotment
Letter as valid and binding on the person(s) by whom, or on whose behalf, it is
lodged even if it is not completed or lodged in accordance with the relevant
instructions or not accompanied by a valid power of attorney, where required.
The Company reserves the right (but shall not be obliged) to treat as valid
acceptances in respect of which remittances are received prior to 3.00 p.m. on
1 September 2000 from an authorised person (as defined in the Financial Service
Act 1986) specifying the Pearson Shares concerned and undertaking to lodge the
relevant Provisional Allotment Letters duly completed in due course.

    Subject to the provisions of this letter and the Prospectus, if payment in
full is not received (whether from the original allottee or any person in whose
favour the rights have been renounced) by 3.00 p.m. on 1 September 2000, the
provisional allotment will be deemed to have been declined and will lapse.

    You may accept all or any of the new Pearson Shares offered to you or
dispose of your rights to all or any of them, nil paid. If you wish to accept
only part of your allotment, you should apply for split Provisional Allotment
Letters in accordance with the instructions overleaf.

    If the amount payable on acceptance of the new Pearson Shares taken by an
allottee or any person in whose favour the rights have been renounced, nil paid,
exceeds L9,590 (the equivalent of (15,000)) the verification of identity
requirements of the Money Laundering Regulations 1993, as amended (the
"Regulations") may apply and verification of the identity of such person may be
required. A failure to provide the necessary evidence of your identity within a
reasonable time may result in an acceptance being treated as invalid or delay
the despatch of a receipted Provisional Allotment Letter or definitive share
certificate. Your attention is drawn to paragraph 2(b) of Part 3 of the
Prospectus. Submission of a Provisional Allotment Letter constitutes a warranty
by you that the Regulations will not be breached by the acceptance of the
remittance and an undertaking to the Company from you to provide verification of
identity reasonably satisfactory to Lloyds TSB Registrars, if so requested. If
satisfactory evidence has not been obtained within a reasonable time, but in any
event by not later than 3.00 p.m. on 1 September 2000, then the Company may (at
its absolute discretion) elect to treat the Provisional Allotment Letter as
invalid, in which event the Provisional Allotment Letter will be deemed to have
been declined and will lapse. Such termination will be without prejudice to the
right of the Company to take proceedings to recover any loss suffered by it as a
result of the failure to provide satisfactory evidence. In such event the
application monies (without interest) will be returned to the drawee bank from
which payment was made.

    4. OVERSEAS SHAREHOLDERS--The attention of Qualifying Shareholders who are
residents in or who are citizens of countries other than the United Kingdom is
drawn to paragraph 13 of Part 3 of the Prospectus. Any such person (including,
without limitation, nominees and trustees) wishing to accept the offer of new
Pearson Shares must satisfy himself as to the full observance of the laws of any
relevant territory in connection therewith including obtaining any requisite
governmental or other consents, observing any other requisite formalities and
paying any issue, transfer or other taxes due in such territories. Receipt of
the Provisional Allotment Letter will not constitute an offer in those
jurisdictions in which it would be illegal to make such an offer and in such
circumstances a Provisional Allotment Letter will be sent for information only
and should not be copied or redistributed. No person receiving a Provisional
Allotment Letter in any territory other than the United Kingdom or the United
States may treat the same as constituting an invitation or offer to him, nor
should he in any event use such Provisional Allotment Letter unless, in the
relevant territory, such an invitation or offer could lawfully be made to him or
such Provisional Allotment Letter could lawfully be used without contravention
of any unfulfilled registration or other legal requirements. Unless otherwise
agreed with the Company, by accepting and/or renouncing (where permitted) this
Provisional Allotment Letter or by requesting registration of the new Pearson
Shares comprised herein, you hereby represent and warrant to the Company that
you: (i) have not received or sent copies of this Provisional Allotment Letter,
the Prospectus or any related offering documents in, into or from Canada,
France, the Netherlands, South Africa or the Republic of Ireland; (ii) do not
have a registered address (and are not otherwise located) in Canada, France, the
Netherlands, South Africa or the Republic of Ireland and are not acting for the
account or benefit of a person in Canada, France, the Netherlands, South Africa
or the Republic of Ireland; (iii) are not acquiring rights to new Pearson Shares
with a view to the offer, sale, resale, transfer, delivery or distribution,
directly or indirectly, of any such rights to new Pearson Shares into Canada,
France, the Netherlands, South Africa or the Republic of Ireland; and (iv) are
not in any other territory in which it is unlawful to make an offer to subscribe
for the new Pearson Shares or to use this Provisional Allotment Letter. The
Company reserves the right to treat as invalid any acceptance or purported
acceptance of a provisional allotment represented by this Provisional Allotment
Letter or a renunciation or purported renunciation thereof where it appears to
the Company or its agents to have been executed or despatched or requires
delivery in a manner which may involve a breach of the legal or regulatory
requirements of any jurisdiction or if it believes that acceptance of such
allotment may violate applicable legal or regulatory requirements or if the
warranties set out in this paragraph are not given or an address for the
delivery of definitive share certificates for any new Pearson Shares is provided
in a territory in which it is unlawful to deliver such certificates. Any offer
to persons in the United States will be made by means of a separate prospectus
contained in an effective registration statement under the Securities Act of
1933, as amended. Qualifying Shareholders in the United States should refer to
the US prospectus.

    5. REGISTRATION UNDER RENOUNCED OR SPLIT ALLOTMENT LETTERS--If this
Provisional Allotment Letter has been renounced or is a split Provisional
Allotment Letter and your name(s) does not/do not appear above, to apply for
registration, Form Y must be completed and this Provisional Allotment Letter
must be lodged by post or by hand not later than 3.00 p.m. on 18 September 2000,
with Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA who,
provided payment has been made by 3.00 p.m. on 1 September 2000, will
acknowledge receipt to the persons so lodging this Provisional Allotment Letter.
After 3.00 p.m. on 18 September 2000, the new Pearson Shares will be
transferable only by transfer in the usual form, such transfer attracting stamp
duty (if applicable).

    6. POSTING--All documents and remittances sent by post to or by provisional
allottees or renouncees (or their agents as appropriate) will be sent at their
risk.

    7. SHARES CERTIFICATES--Share certificates (being the definitive documents
of title) are expected to be despatched by first class post not later than
2 October 2000, at the risk of the person(s) entitled thereto (subject to the
conditions of the Rights issue). In the case of original allottees who accept
their provisional allotment, share certificates will be despatched to the
registered holder or, in the case of joint holders, to the first-named
registered holder, at his/her or its registered address. If, on or before 3.00
p.m. on 26 September 2000, this Provisional Allotment Letter is lodged with
Lloyds TSB Registrars at the relevant address set out above, the share
certificate(s) will be despatched to the lodging agent. In the case of
renunciation, share certificates will be despatched to the person(s) lodging
this Provisional Allotment Letter for registration. After the despatch of share
certificates this Provisional Allotment Letter will cease to be valid for any
purpose. No other temporary documents of title will be issued pending the issue
of definitive share certificates.

By Order of the Board,
Julia Casson, Secretary

Registered Office:
3 Burlington Gardens, London, WIX 1LE
<TABLE>
<CAPTION>

<S>                                               <C>

             Lodged for payment by:                  Received the amount payable on acceptance
                                                                     Stamp for
                                                           Lloyds TSB Registrars and date

<CAPTION>

<S>                                               <C>
             Lodged for payment by:               ACCOUNT NO.                                       ALLOTMENT NO.
                                                  Pearson plc
                                                  3 for 11
                                                  Rights Issue of up to 170,528,278
                                                  new Pearson Shares at L10.00
                                                  per share payable in full on
                                                  acceptance not later than
                                                  3.00 p.m. on 1 September 2000
</TABLE>
<PAGE>

                                  PEARSON PLC

           INSTRUCTIONS FOR RENUNCIATION, SPLITTING AND CONSOLIDATION

1.  RENUNCIATION IN WHOLE--(Latest time and date, 3.00 p.m. on 18 September
    2000)

    If you wish to dispose of all the new Pearson Shares comprised in this
    Provisional Allotment Letter to one person, or to persons who will be joint
    holders, you must sign the Form of Renunciation (Form X below), in
    accordance with the instructions set out therein and deliver the Provisional
    Allotment Letter to the person(s) to be registered, or to the broker or
    other agent who has acted for you in the transaction. Form Y must then be
    completed, in accordance with the instructions set out therein, by or on
    behalf of the person(s) in whose favour this Provisional Allotment Letter is
    renounced.

2.  SPLITTING--(Latest time and date, nil paid, 3.00 p.m. on 30 August 2000;
    fully paid, 3.00 p.m. on 14 September 2000)

    This provisional Allotment Letter cannot be renounced in part but, if you
    wish to have only some of the new Pearson Shares comprised in this
    Provisional Allotment Letter registered in your name(s) and to transfer the
    remainder, or if you wish to transfer all of the new Pearson Shares to which
    you are entitled, nil paid or fully paid, but not all to the same person,
    you may have this Provisional Allotment Letter split. For this purpose you
    must sign the Form of Renunciation (Form X below) and forward this
    Provisional Allotment Letter by post or by hand to Lloyds TSB Registrars,
    Antholin House, 71 Queen Street, London EC4N 1SL, to reach there not later
    than 3.00 p.m. on 30 August 2000, if nil paid, or 3.00 p.m. on 14 September
    2000, if fully paid. The number of split Provisional Allotment Letters
    ("Split Letters") required and the number of Rights Shares to be comprised
    in each should be stated when this Provisional Allotment Letter is sent for
    splitting and the aggregate of the Rights Shares stated therein must equal
    the number of Rights Shares stated in Box 2 on page 1 of this document. On
    receipt of the Split Letters you should keep the one representing any new
    Pearson Shares which you wish to retain (paragraph 3 on page 1 applies) and
    send the other(s) to the person(s) to be registered or to the broker or
    other agent who has acted for you in the transaction to be dealt with in
    accordance with the instructions set out below.

3.  CONSOLIDATION

    The new Pearson Shares comprised in several fully paid Provisional Allotment
    Letters duly renounced (where applicable) may be registered in the name(s)
    of one holder (or joint holders) if Form Y and the Consolidation Listing
    Form are completed on one Provisional Allotment Letter only (referred to in
    the Consolidation Listing Form as the "Principal Letter") and all the
    Provisional Allotment Letters are lodged together. Each Provisional
    Allotment Letter so lodged must bear the number of the Principal Letter in
    the space provided on the Consolidation Listing Form.

4.  STAMP DUTY RESERVE TAX/STAMP DUTY--Your attention is drawn to paragraph 8 of
    part 7 of the Prospectus. If you are in any doubt as to your tax position,
    you should seek professional advice without delay.

FORM X

                      FORM OF RENUNCIATION FOR
        (NOT AVAILABLE AFTER 3:00 P.M. ON 18 SEPTEMBER 2000 SEE 3

To be completed, if the original allottee(s) desire(s) to renounce all the
new Pearson Shares comprised herein, by 3.00 p.m. on 18 September 2000, or,
if the original allottee(s) desire(s) to obtain Split Letters, by 3.00 p.m.
on 30 August 2000, if nil paid, or 3.00 p.m. on 14 September 2000, if fully
paid.

To the Directors of Pearson plc I/We hereby renounce my/our rights to the new
Pearson Shares comprised in this letter in favour of the person(s) named in
the Registration Application Form (Form Y) in relation to or including such
new Pearson Shares.

ALL JOINT HOLDERS MUST SIGN.

<TABLE>

<S>                                                  <C>                 <C>
A CORPORATION MUST EXECUTE UNDER ITS COMMON
SEAL WHICH SHOULD BE AFFIXED IN ACCORDANCE WITH                            _______________________
ITS ARTICLES OF ASSOCIATION OR OTHER
REGULATIONS. ALTERNATIVELY, A COMPANY TO                SIGNATURE(S)       _______________________
WHICH SECTION 36A OF THE COMPANIES ACT 1985             OF PERSON(S)
APPLIES MAY EXECUTE THIS LETTER BY A DIRECTOR           NAMED ON PAGE 1    _______________________
AND THE COMPANY SECRETARY OR BY TWO DIRECTORS
OF THE COMPANY SIGNING THE LETTER AND INSERTING                            _______________________
THE NAME OF THE COMPANY ABOVE THEIR SIGNATURES.
EACH OF THE OFFICERS SIGNING THE LETTER SHOULD
STATE THE OFFICE WHICH HE HOLDS UNDER ITS SIGNATURE.

</TABLE>

Dated this______________________ day ______________ of __________________ 2000

In the case of Split Letters this Form will be endorsed "Original Duly
Renounced".

FORM Y MUST BE COMPLETED BY OR ON BEHALF OF THE PERSONS IN WHOSE NAMES THE
RIGHTS SHARES ARE TO BE REGISTERED

FORM Y

                 REGISTRATION APPLICATION FORM

THIS FORM SHOULD ONLY BE COMPLETED WHERE THERE HAS BEEN A RENUNCIATION. The
entire Provisional Allotment Letter must be lodged with Lloyds TSB
Registrars, NOT LATER THAN 3.00 p.m. on 18 September 2000, providing payment
has been made by 3.00 p.m. on 1 September 2000. The Company reserves the
right to refuse to register any renunciation in the name of any Overseas
Shareholder (including any person whose address is in Canada, France, the
Netherlands, South Africa, or the Republic of Ireland).

To the Directors of Pearson plc

I/We warrant that I/we am/are not applying as nominee or agent for a person
who is or may be liable to stamp duty or stamp duty reserve tax under any of
sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts or
clearance services).

PLEASE USE BLOCK CAPITALS

<TABLE>
<S>             <C>
        (1)      Forename(s) (in full) __________________________ Surname ________________

                 (State Mr., Mrs., Miss or title) ________________________________________

                 Address (in full) _______________________________________________________

        (2)      Forename(s) (in full) __________________________ Surname ________________

                 (State Mr., Mrs., Miss or title) ________________________________________

                 Address (in full) _______________________________________________________

        (3)      Forename(s) (in full) __________________________ Surname ________________

                 (State Mr., Mrs., Miss or title) ________________________________________

                 Address (in full) _______________________________________________________

        (4)      Forename(s) (in full) __________________________ Surname ________________

                 (State Mr., Mrs., Miss or title) ________________________________________

                 Address (in full) _______________________________________________________

</TABLE>

<TABLE>
<CAPTION>
                          CONSOLIDATION
                           LISTING FORM
                         FOR INSTRUCTIONS
                           SEE 3 ABOVE
<S>                                            <C>
ALLOTMENT                                        NUMBER OF
 NUMBER                                            SHARES
-----------------------------------------------------------

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

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

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

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

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

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

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

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

TOTAL NUMBER                                 TOTAL NUMBER
 OF LETTERS                                   OF SHARES

-----------------------------------------------------------
                  ALLOCATION NUMBER OF
                    PRINCIPAL LETTER

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

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

</TABLE>

<TABLE>
<S>                                                          <C>
Registration is requested in the above name(s) of the new      For use between 18 September 2000 and 26 September 2000
Pearson Shares specified in this Provisional Allotment              Lodged in exchange for share certificate(s) by:
Letter and in the several Provisional Allotment Letters (if
any) detailed in the Consolidation Listing Form above
totaling.
--------------------
* new Pearson Shares

</TABLE>

<TABLE>
<S>                                                         <C>
*Insert the number of Rights Shares                         Name:_______________________________
which must be the number of new Pearson                     Address:____________________________
Shares comprised in this Provisional                        ____________________________________
Allotment Letter, or if the Consolidation
Listing Form is used, the total entered on
this form.

            Stamp or name and address of
          Agent (if any) lodging this form

</TABLE>

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