Document:

Exhibit
10.21

 

Dated
     7
September                                
2005

 

 

 

 

 

 

 

 

 

 

 

 

WATSON WYATT

 

 

 

 

 

 

 

 

 

TRUST DEED AND RULES OF THE

WATSON WYATT SHARE INCENTIVE PLAN 2005

 

 

	
  Directors’ Adoption

  	
   

  	
  19 August 2005

  
	
   

  	
   

  	
   

  
	
  HMRC Approval

  	
   

  	
  9 September 2005

  
	
   

  	
   

  	
   

  
	
  HMRC Ref

  	
   

  	
  A2102/PC

  
	
   

  	
   

  	
   

  
	
  Expiry Date

  	
   

  	
  9 September 2015

  

 

 

 

 

 

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone
(44-20) 7456 2000

Facsimile (44-20)
7456 2222

 

Ref 01/145/K
Kelleher

 

Table of Contents

	
  Contents

  	
   

  	
  Page

  
	
  Trust Deed and Rules of the Watson Wyatt Share
  Incentive Plan 2005

  	
   

  	
  1

  
	
  Part A - Definitions

  	
   

  	
  2

  
	
  1

  	
   

  	
  Meaning of words used

  	
   

  	
  2

  
	
  Part B - Operation of the Plan and Joining the Plan

  	
   

  	
  4

  
	
  2

  	
   

  	
  Operation of the Plan

  	
   

  	
  4

  
	
  3

  	
   

  	
  Joining the Plan

  	
   

  	
  4

  
	
  Part C - Bonus Shares

  	
   

  	
  6

  
	
  4

  	
   

  	
  Bonus Shares

  	
   

  	
  6

  
	
  Part D - Investment Shares

  	
   

  	
  8

  
	
  5

  	
   

  	
  Investment Shares

  	
   

  	
  8

  
	
  Part E - Matching Shares

  	
   

  	
  12

  
	
  6

  	
   

  	
  Matching Shares

  	
   

  	
  12

  
	
  Part F - Dividends

  	
   

  	
  14

  
	
  7

  	
   

  	
  Dividends

  	
   

  	
  14

  
	
  Part G - General Rules

  	
   

  	
  16

  
	
  8

  	
   

  	
  General rules about Shares

  	
   

  	
  16

  
	
  9

  	
   

  	
  Leaving Employment

  	
   

  	
  18

  
	
  10

  	
   

  	
  General rules relating to the Plan

  	
   

  	
  19

  
	
  11

  	
   

  	
  Assets of the Plan

  	
   

  	
  22

  
	
  12

  	
   

  	
  Trustees

  	
   

  	
  23

  
	
  13

  	
   

  	
  Participating Companies

  	
   

  	
  24

  
	
  14

  	
   

  	
  Changing the Rules

  	
   

  	
  25

  
	
  15

  	
   

  	
  Termination

  	
   

  	
  25

  
	
  16

  	
   

  	
  Governing Law

  	
   

  	
  26

  

 

 i

 

Trust Deed and
Rules of the Watson Wyatt

Share Incentive Plan 2005

This Trust Deed and Rules of the Watson Wyatt Share Incentive Plan 2005 are made as a deed on
       7
September                              
2005 between:

(1)                              Watson Wyatt Limited (the “Company”)
and

(2)                              Halifax Corporate Trustees Limited (the “Trustees”)

to set up the Plan with effect from the date of formal
approval of the Plan by HMRC.

[SEAL]

 1
 

 

Part A -
Definitions

1                                      Meaning of words
used

“Accumulation Period”
means the period during which a Participant’s Contributions are held prior to
their application by the Trustees in acquiring Investment Shares and which
shall not be longer than the period specified in paragraph 51(1) of Schedule 2
(currently 12 months).

“Award Day”
means the date on which Bonus Shares or Matching Shares are awarded under the
Plan.

“Award System”
means the system of calculating the number of Bonus Shares to be awarded from
time to time, adopted by the Directors and which satisfies paragraph 9 of
Schedule 2 (participation on same terms).

“Bonus Shares”
means Free Shares, for the purposes of communicating with Employees.

“the Company”
means Watson Wyatt Limited.

“Contributions”
means deductions from a Participant’s Salary for the purpose of acquiring
Investment Shares.

“Directors”
means the board of directors of the Company or a duly authorised committee.

“Dividend Shares”
means Shares which the Trustees acquire by reinvesting Participants’ cash
dividends from their Plan Shares.

“Employee”
means, except for the purposes of Rule 10.5, an employee of a Participating
Company.

“Employment”
means employment by the Company or any associated company (within the meaning
of paragraph 94 of Schedule 2).

“Free Shares”
means Shares awarded to Participants without payment under Rule 4.

“Holding Period”
means the period for holding Bonus Shares, Matching Shares and Dividend Shares
in the Plan.

“HMRC”
means Her Majesty’s Revenue and Customs;

“Investment Shares”
means Partnership Shares, for the purposes of communicating with Employees.

“ITEPA”
means the Income Tax (Earnings and Pensions) Act 2003.

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

“Market Value”
means on any day where Shares are admitted to trading on the NYSE the value per
share fixed at the mid market closing price of the Company’s Shares on the NYSE
quoted in the Wall Street Journal on the preceding day or on any day where
Shares are admitted to the Official List of the UK Listing Authority and traded
on the London Stock Exchange, the mid market closing price derived from the
Daily Official List of the London Stock Exchange on the preceding day. Where
Shares are not so admitted, “Market Value” has the meaning given by virtue of
Part VIII of the Taxation of Chargeable Gains Act 1992 and as agreed in advance
with HMRC Shares Valuation.

 2
 

 

“Matching Shares”
means Shares awarded without payment in proportion to any Investment Shares
allocated to Participants.

“Method 1”
means the method described in paragraph 41 of Schedule 2.

“Method 2”
means the method described in paragraph 42 of Schedule 2.

“NYSE”
means the New York Stock Exchange.

“Official List” means the list maintained by the Financial Services Authority for the
purpose of section 74(1) Financial Services and Markets Act 2000;

“Participant”
means any Employee who has joined the Plan.

“Participating
Company” means an employer participating in the Plan being the
Company, any Subsidiary and any other company which (if required) HMRC agrees
may participate and which in both cases is so designated by the Directors.

“Partnership Shares”
means Shares which the Trustees allocate to Participants in respect of their
Contributions.

“Performance
Measures” means targets set by the Directors from time to time,
which meet the requirements of paragraph 39 of Schedule 2 and govern the
availability, number or value of Bonus Shares to be awarded.

“Plan”
means the Watson Wyatt Share Incentive Plan 2005, as changed from time to time.

“Plan Shares”
mean the Shares awarded or allocated to Participants under the Plan.

“Reconstruction or
Takeover” means a transaction affecting any Shares as described in
Paragraph 86 of Schedule 2.

“Salary”
has the meaning in paragraph 43(4) of Schedule 2.

“Schedule 2”
means Schedule 2 to ITEPA.

“Share”
means a share of Class A common stock of par value US$0.01 of Watson Wyatt
& Companies Holdings, which meets the requirements of Part 4 of Schedule 2,
and any security which forms part of any new holding referred to in paragraph
86, of Schedule 2.

“Subsidiary”
means a company which is under the control of the Company within the meaning of
Section 840 of the Taxes Act (as extended by paragraph 91 of Schedule 2).

“Taxes Act”
means the Income and Corporation Taxes Act 1988.

“Trustee”
means Halifax Corporate Trustees Limited or the trustees for the time being of
the Plan.

Words of the masculine gender shall include the
feminine and vice versa.

 3
 

 

Part B -
Operation of the Plan and Joining the Plan

2                                      Operation of the
Plan

2.1                            Purpose of the
Plan

The purpose of the Plan is to help and encourage the
holding of Shares by Participants or for their benefit through an employee
share ownership plan approved under the provisions of paragraph 81 of Schedule
2.

The Trustees may achieve the purpose of the Plan by
applying the capital and income of the Plan assets to or for the benefit of
Participants as described in the Plan rules.

2.2                            Time of Operation

The Directors can only operate the Plan at any time
after its approval by HMRC.

If the Shares are listed on the Official List and
admitted to trading on the London Stock Exchange Bonus Shares will only be
awarded within 42 days commencing on any of the following:

2.2.1                   the day on which the Plan is formally approved by HMRC;

2.2.2                   the day after the announcement of the Company’s results to the NYSE or
the London Stock Exchange for any period;

2.2.3                   any day on which the Directors resolve that exceptional circumstances
exist which justify an award of Bonus Shares;

2.2.4                   any day on which changes to the legislation or regulations affecting
employee share ownership plans approved by HMRC under Schedule 2 are announced,
effected or made; and

2.2.5                   the day on which Shares are first admitted to the Official List and
traded on the London Stock Exchange (or admitted by any other stock exchange
nominated by the Directors).

If the Directors or the Trustees cannot award Bonus
Shares due to restrictions imposed by statute, order, regulation or Government
directive, or by any code adopted by the Company based on the Model Code, the
Directors or the Trustees may award Bonus Shares within 42 days after the
lifting of such restrictions.

3                                      Joining the Plan

3.1                            Employees to be
invited

Subject to Rules 3.2 and 3.3, whenever the Directors
decide to operate the Plan, they must invite all Employees who:

3.1.1                   are UK resident taxpayers (within the meaning of paragraph 8(2) of
Schedule 2); and

3.1.2                   have been employees of a qualifying company (within the meaning of
paragraph 17 of Schedule 2) throughout any qualifying period of service set
under Rule 3.5.

 4
 

 

They may also invite other Employees, provided that if
there is a qualifying period of service, the Employees satisfy Rule 3.1.2.
Every Employee who is invited to participate must be invited on the same terms,
in accordance with paragraph 9 of Schedule 2.

3.2                            Prohibited
invitations

However, the Directors must not invite:

3.2.1                   any Employee, in any tax year, who is to participate at the same time in
another employee share ownership plan approved under Schedule 2 which has been
established by the Company or a connected company (within the meaning of
paragraph 18(3) of Schedule 2) or would have so participated but for the
failure to meet a performance target;

3.2.2                   anyone who is excluded from participating under paragraph 19 of Schedule
2 (no material interest requirement).

3.3                            Free share
invitations - Employees under notice

The Directors may decide not to invite Employees to
participate in an award of Bonus Shares who have given or received notice of
termination of employment on or before the Award Day relating to that award.

3.4                            Form of
invitation and application

The invitation and application to join the Plan must
be made in the form determined by the Directors, and approved by HMRC (if
necessary). This may include invitations and applications by writing or by
email, internet (or other electronic means) or interactive voice response.

The invitation and the application will, if
applicable, specify whether for that operation of the Plan, Bonus Shares and/or
Investment Shares and Matching Shares (and, where relevant, Dividend Shares)
may be acquired. If Investment Shares are offered, the application form will
comply with Rule 5.

3.5                            Qualifying period
of service

The Directors may set a qualifying period of service
for any operation of the Plan, and if they do it must apply in relation to, and
be the same for, all Employees.

If Bonus Shares are offered, the qualifying period of
service must not be more than 18 months, ending with the Award Day of those
Bonus Shares.

If Investment Shares are offered and there is no
Accumulation Period, the qualifying period of service must not be more than 18
months, ending with the start of Contributions. If there is an Accumulation
Period, the qualifying period of service must not be more than 6 months, ending
with the start of the relevant Accumulation Period.

3.6                            Submission of
Applications

Employees invited to participate in the Plan and who
wish to do so, must submit the completed application by the date specified, if
any. In doing so they agree to the terms and conditions of participation set
out in the application. Anyone who has not submitted a completed application
form as required will not participate in the Plan.

 5
 

 

Part C - Bonus
Shares

4                                      Bonus Shares

4.1                            Limit

If the Plan is operated to provide Bonus Shares, Bonus
Shares awarded to each Employee participating in the Plan must not have an
initial market value of more than £3,000 in any tax year, or any greater amount
specified for the purposes of paragraph 35(1) of Schedule 2. Rule 10.9
(Participation in more than one employee share ownership plan) also applies.

“Initial market value” means the Market Value of the
Bonus Shares on the Award Day and, the market value of Shares subject to
restrictions or risk of forfeiture shall be determined as if there were no
restriction or risk.

4.2                            Terms relating to
Bonus Shares

The Directors will set the following:

4.2.1                   the Award System for the operation of the Plan including any Performance
Measures which apply, using either Method 1 or Method 2;

4.2.2                   the Holding Period, which must be at least three years but not more than
five years beginning with the Award Day, must be the same for all Bonus Shares
in an award and cannot be increased once that award has been made; and

4.2.3                   any forfeiture provisions under Rule 4.4.

During this Holding Period, Rule 8.4 applies in
relation to the Bonus Shares.

4.3                            Notifying
Participants of Performance Measures

If Performance Measures apply to the availability,
number or value of Bonus Shares, the Directors will as soon as reasonably
practicable, write and tell:

4.3.1                   all Employees in general terms of the Performance Measures to be used to
calculate the number of Bonus Shares awarded to each Participant. But the
Directors may exclude from such notice any information if they reasonably
consider that to disclose it would prejudice commercial confidentiality; and

4.3.2                   each Participant about the Performance Measures which will be used to
calculate the number or value of Bonus Shares awarded to him.

4.4                            Forfeiture of
Bonus Shares

The Directors may decide that an award of Bonus Shares
will be made on the basis that if Participants leave Employment for a specified
reason (other than for a reason set out in paragraph 32(2) of Schedule 2)
within a specified period (not exceeding 3 years from the Award Day) they will
lose any right to receive Bonus Shares.

4.5                            Payments by Participating
Companies and acquiring Shares

The Directors will notify each Participating Company
of the amount it is required to contribute in respect of an award of Bonus
Shares. Each Participating Company will pay this amount to the Trustees and the
Trustees will use the funds to purchase or subscribe for Shares, as agreed with
the Directors.

 6
 

 

4.6                            Awards of Bonus
Shares

The Trustees will award Bonus Shares to each
Participant on the basis set out in the Award System and any Performance
Measures.

4.7                            Award Eligibility
Requirement

The Trustees will not award Bonus Shares to a
Participant who is not an Employee on the Award Day.

4.8                            Notification by
Trustees

As soon as practicable after the award of Bonus
Shares, the Trustees will write and tell each Participant of the award. The
Trustees will include in the notification the number and description of the
Bonus Shares, the Holding Period applying to the Bonus Shares and their Market
Value on the Award Day.

4.9                            Transfer of legal
title

After the end of the Holding Period, the Participant
may at any time direct the Trustees to transfer legal title of Bonus Shares to
him or as he may direct.

 7
 

 

Part D -
Investment Shares

5                                      Investment Shares

5.1                            Application for
Investment Shares

If the Plan is operated to provide Investment Shares,
Employees invited must complete the relevant section of the application form.
This section will satisfy the requirements of Part 6 of Schedule 2 and will
include the notice required under paragraph 48 of Schedule 2 (notice of
possible effect of deductions on benefit entitlement).

5.2                            Amount of
Contributions

The Directors will determine the maximum Contribution
which will apply in relation to that operation of the Plan which will not be
more than the lower of:

5.2.1                   10% of Salary for that tax year; or

5.2.2                   £1,500 in any tax year; or

5.2.3                   a greater percentage or amount specified for the purposes of paragraph
46 of Schedule 2 from time to time.

If Contributions exceed these limits, the excess
amount will be repaid to the Participant as soon as practicable (after
deducting any income tax and national insurance contributions due). Rule 10.9
(Participation in more than one employee share ownership plan) also applies.

5.3                            Minimum
Contribution

The Directors may set from time to time a minimum
amount (not more than £10) for Contributions on any occasion. If there is such
a minimum amount, it will be set out in the application.

5.4                            Limit on
Investment Shares

The Directors may set from time to time a limit on the
number of Shares which may be acquired as Investment Shares. If there is such a
limit, it will be set out in the application.

5.5                            Scaling down

If there is a limit on the number of Shares which may
be acquired as Investment Shares and the Contributions set out in the
application forms exceed that number, the Directors will scale down
applications by taking any one or more of the following steps in turn:

5.5.1                   reduce the excess of Contributions over any set minimum amount for
Contributions proportionately; then

5.5.2                   reduce all monthly Contributions to any set minimum amount for
Contributions; then

5.5.3                   select applications to contribute the minimum amount for Contributions
by lot.

The Directors will notify Participants of the scaling
down and their application will be deemed changed or withdrawn.

 8
 

 

5.6                            Holding
Contributions

The Participants’ Contributions will be transferred to
the Trustees as soon as practicable. The Trustees will hold the Contributions
in an account with:

5.6.1                   a person falling within section 840A(1)(b) of the Taxes Act; or

5.6.2                   a building society; or

5.6.3                   a firm falling within section 840A(1)(c) of the Taxes Act.

The account may, but need not, pay interest on the
Contributions held. If it does, the Trustees must account to each Participant
for the interest earned on his Contributions.

5.7                            Repayment of
Contributions

The Trustees must pay to a Participant any
Contributions it holds (after deducting any income tax and national insurance
contributions due) together with any interest if, before acquiring Investment
Shares on behalf of the Participant;

5.7.1                   they receive a termination notice under Rule 15.1 (Termination); or

5.7.2                   HMRC notifies the Company that it has withdrawn the approval of the Plan
under Schedule 2; or

5.7.3                   the Participant ceases to be in Employment during an Accumulation Period.

5.8                            Excess
Contributions

If the Participant agrees when completing the
application, the Trustees may carry forward and add to the amount of the next
Contribution any Contributions not used to acquire Investment Shares. If there
is no such agreement, the Trustees must pay the excess to the Participant as
soon as practicable after deducting any income tax and national insurance
contributions due.

5.9                            Accumulation
Periods

The Directors may determine in relation to any
operation of the Plan whether there will be an Accumulation Period.

The start and end of any Accumulation Period must be
set out in the application. The Accumulation Period must start on or before the
date of the first deduction of Contributions. It must not exceed 12 months. The
same Accumulation Period or periods must apply to all Participants for each
operation of the Plan.

If, during the Accumulation Period, a transaction
occurs in relation to the Shares which results in a new holding of shares being
equated with the Shares for the purposes of capital gains tax purposes (“new
shares”), then the Contributions held may, with the agreement of the
Participant, be used at the end of the Accumulation Period to acquire new
shares. By signing the application form Participants agree to the acquisition
of new shares.

5.10                     Stopping and re-starting
Contributions

A Participant may give notice to the Company to stop
making Contributions. He may also give notice to the Company at any time that
he wishes Contributions to re-start, but he may not make up any missed
Contributions. If the Plan is operated with an Accumulation Period, the
Directors may determine whether Participants can re-start their Contributions

 9
 

 

more than once in an Accumulation Period. If such a
determination is made, it will be set out in the application form and will
apply equally to all Participants.

The Company will arrange for Contributions to stop
within 30 days of receiving the notice, unless the notice specifies a later
date. The Company will arrange for Contributions to re-start by the next due
date for Contributions which is more than 30 days after receipt of the notice
to re-start, unless the notice specifies a later date.

5.11                      Varying
Contributions

A Participant may vary his Contributions with the
agreement of the Company.

5.12                     Withdrawal from
agreement to make Contributions

A Participant may at any time withdraw from the
agreement to make Contributions made at the time of joining the Plan and ask
for the return of any Contributions which have not been used to acquire
Investment Shares by giving notice to the Company. The Participant will be
treated as having stopped Contributions 30 days after the receipt of the
notice, unless a later date is specified in the notice. The Trustees must pay
to the Participant any Contributions they hold as soon as practicable (after
deducting any income tax and national insurance contributions due) together
with any interest, if payable. Any Investment Shares already allocated will not
cease to be subject to the Plan as a result of such a withdrawal.

5.13                     Allocating shares -
Accumulation Period

5.13.1            If there is an Accumulation Period, the Trustees must allocate
Investment Shares to each Participant within 30 days after the end of that
period.

5.13.2            The number of Shares allocated to each Participant will be calculated
using the lower of the Market Value of the Shares at the beginning of the
Accumulation Period and:

(i)                                  if all the Investment Shares to be allocated to Employees on that
occasion are purchased by the Trustees on the date of allocation, and provided
the Company is quoted on the NYSE and/or on the London Stock Exchange, the
average price actually paid by the Trustees for the Shares; or

(ii)                               the Market Value at the date of allocation.

5.13.3            All Investment Shares must be allocated on the same date.

5.14                     Allocating shares - no
Accumulation Period

5.14.1            If there is no Accumulation Period, the Trustees must allocate
Investment Shares to the Participants by a date set by the Trustees. This date
must be not later than 30 days after the last day on which the relevant
deduction of Contributions takes place.

5.14.2            If all the Investment Shares to be allocated to Employees on that
occasion are purchased by the Trustees on the date of allocation, and provided
the Company is quoted on the NYSE and/or on the London Stock Exchange, the
number of Shares allocated to each Participant will be calculated using the
average price actually paid by the Trustees for the Shares.

 10
 

 

5.14.3            If all the Investment Shares to be allocated to Employees on that
occasion are not purchased by the Trustees on the date of allocation, the
number of Shares allocated to each Participant will be calculated using the
Market Value on the date of allocation.

5.14.4            All Investment Shares must be allocated on the same date.

5.15                     Allocation Eligibility
Requirement

The Trustees will not allocate Investment Shares to an
individual who is not an Employee at the following times:-

5.15.1            where there is no Accumulation Period, at the time the related
Contributions are deducted; and

5.15.2            where there is an Accumulation Period, at the time of the first
deduction of the related Contributions.

Rule 9.1 applies if an Employee leaves Employment
during the acquisition period for an award of Investment Shares.

5.16                     Notification by Trustees

As soon as reasonably practicable after the Trustees
have allocated Investment Shares to a Participant, the Trustees will notify
that Participant in writing. The Trustees will set out the number and
description of the Investment Shares, the amount of Contributions used to
acquire the Shares and the price per Share which was used to calculate the
number of Investment Shares allocated in accordance with Rule 5.13 or 5.14.

5.17                     Access to Investment
Shares

A Participant may at any time take out of the Plan any
Investment Shares allocated to him. This is subject to any income tax and
national insurance due and Rule 6.4 (Forfeiture of Matching Shares).

A Participant may, at any time, direct the Trustees to
transfer legal title of Investment Shares to him or as he may direct.

 11

 

Part E - Matching
Shares

6                                      Matching Shares

6.1                            Ratio of Matching
Shares to Investment Shares

If the Plan is operated to provide Matching Shares, a
Participant who is allocated Investment Shares is entitled to an award of
Matching Shares. The Directors will set the ratio of Matching Shares to
Investment Shares from time to time and the ratio which applies will be set out
in the application form. The same ratio must apply to all those who participate
in the related allocation of Investment Shares.

The ratio cannot exceed the ratio specified in
paragraph 60 of Schedule 2, which is currently two Matching Shares to one
Investment Share.

The ratio may change in the circumstances set out in
the application. The Directors will write and tell Participants if the ratio
changes, before the allocation of the related Investment Shares.

6.2                            Rights and
restrictions

Matching Shares must be shares of the same class and
carry the same rights as the Investment Shares to which they relate.

Rules 4.2.2 (holding period) and 8.4 (Restrictions on
disposals of Shares) apply to the award of Matching Shares.

6.3                            Payments by
Participating Companies and acquiring Shares

The Directors will notify each Participating Company
of the amount it is required to contribute in relation to Matching Shares. Each
Participating Company will pay this amount to the Trustees and the Trustees
will immediately use the funds to purchase or subscribe for Shares, as agreed
with the Directors.

6.4                            Forfeiture of
Matching Shares

The Directors may decide that an award of Matching
Shares will be made on the basis that if a Participant leaves Employment for a
specified reason or takes the Matching Shares out of the Plan (other than for a
reason specified in paragraph 32(2) of Schedule 2) within a specified period (not
exceeding 3 years from the Award Day) he will lose any right to receive
Matching Shares.

The Directors may also decide that an award of
Matching Shares will be made on the basis that a Participant who takes out of
the Plan the Investment Shares in respect of which the Matching Shares were
awarded (other than for a reason specified in paragraph 32(2) of Schedule 2)
within a specified period (not exceeding 3 years from the Award Day) will not
be entitled to any Matching Shares in respect of those Investment Shares.

6.5                            Awards of
Matching Shares

The Trustees will award Matching Shares to each
Participant on exactly the same basis. The terms will be set out in the
application form.

The Trustees will award Matching Shares on the same
day as they allocate the related Investment Shares to Participants.

 12
 

 

However, the Directors may decide to operate the Plan
on the basis that if any Investment Shares allocated are not sufficient to
result in the award of a Matching Share on the same day, the match will be made
when sufficient Investment Shares have been allocated.

6.6                            Notification by
Trustees

The notification requirements set out in Rule 4.8 will
apply to Matching Shares, except that Market Value will be notified as the
price per Share used to calculate the number of Investment Shares allocated on
the same day in accordance with Rule 5.13 or 5.14.

6.7                            Transfer of legal
title

After the end of the Holding Period, the Participant
may at any time, direct the Trustees to transfer legal title of Matching Shares
to him or as he may direct.

 13
 

 

Part F -
Dividends

7                                      Dividends

7.1                            Dividend Shares

The Directors may from time to time decide that
instead of Participants receiving cash dividends:

7.1.1                   the Trustees must re-invest cash dividends they receive in respect of
Plan Shares in additional Shares to be held on behalf of Participants; or

7.1.2                   the Trustees must re-invest cash dividends as set out in Rule 7.1.1 but
only in respect of Plan Shares of Participants who have chosen this by
completing the relevant section on the application form.

The total amount so reinvested cannot exceed £1,500 in
each tax year (or such greater amount specified for the purposes of paragraph
64(1) of Schedule 2). If the Directors have not made such decisions, or to the
extent that the cash dividends exceed the limit, the Trustees must pay over
cash dividends to the relevant Participant as soon as practicable. Rule 10.9
(Participation in more than one employee share ownership plan) also applies.

7.2                            Allocating
Dividend Shares

7.2.1                   If all the Dividend Shares to be allocated to Employees on any occasion
are purchased by the Trustees on the date of allocation, and provided the
Company is quoted on the NYSE and/or the London Stock Exchange, then the number
of Dividend Shares allocated to each Participant will be calculated using the
average price actually paid by the Trustees for the Shares.

7.2.2                   If all the Dividend Shares to be allocated to Employees on any occasion
are not purchased by the Trustees on the date of allocation, then the number of
Dividend Shares allocated to each Participant will be calculated using the
Market Value on the date of allocation.

7.2.3                   Dividend Shares must be allocated on or before a date set by the
Trustees. This date must be no later than 30 days after the date they receive
cash dividend.

All the Dividend Shares must be allocated on the same
date. In allocating Shares the Trustees must treat Participants fairly and
equally.

7.3                            Cash dividends
carried forward and paid

The Trustees may retain, carry forward and add to the
amount of the next cash dividend to be reinvested the amount of any cash
dividend which is not sufficient for the allocation of one or more Dividend
Shares. But the Trustees must keep these amounts separately identifiable and
amounts derived from an earlier cash dividend are treated as reinvested before
an amount derived from a later cash dividend.

The Trustees must pay to the Participant, as soon as
practicable, any cash amounts referred to above:

7.3.1                   which are not reinvested in Dividend Shares within 3 years of payment of
the dividend; or

7.3.2                   if the Participant ceases to be in Employment; or

 14
 

 

7.3.3                   if the Trustees receive a termination notice under Rule 15.1.

When making the payment, the Trustees will supply to
the Participant the information referred to in paragraph 80(4) of Schedule 2.

7.4                            Notification

As soon as practicable after the Trustees have
allocated any Dividend Shares to a Participant, the Trustees will notify the
Participant in writing. The Trustees will set out the number and description of
those Dividend Shares, the price per Share which was used to calculate the
number of Dividend Shares allocated in accordance with Rule 7.2.1 or 7.2.2, the
Holding Period and any cash dividends carried forward as described in Rule 7.3.

7.5                            Rights and
restrictions

Dividend Shares must be shares of the same class and
carry the same rights as the Shares in respect of which the dividend is paid.
They must not be subject to any forfeiture.

Rule 4.2.2 applies to Dividend Shares but the Holding
Period must be 3 years starting on the date the Trustees allocated the Dividend
Shares as described in Rule 7.2 Rule 8.4 also applies to Dividend Shares.

7.6                            Transfer of legal
title

After the end of the Holding Period the Participant
may at any time direct the Trustees to transfer legal title of Dividend Shares
to him or as he may direct.

7.7                            Other dividends

Cash dividends payable in respect of Plan Shares and
not reinvested in Dividend Shares (because they exceed the limit set out in
Rule 7.1 or for any other reason) will belong to the relevant Participant. The
Trustees will pay those dividends to the Participant as soon as practicable
after receipt.

The Trustees are not required to pay a Participant any
interest earned on any dividend to which the Participant is entitled.

Where any dividends received are foreign cash
dividends within the meaning of paragraph 75(6) of Schedule 2 the Trustees will
notify the Participant of the amount of any foreign tax deducted from the
dividend before it was paid.

7.8                            Scrip dividends

The Trustees may receive, following a direction from
the Participant, Shares credited as fully paid in whole or in part instead of a
cash dividend (a scrip dividend). These Shares will not form part of the
Participant’s Plan Shares. The Trustees will take all reasonable steps to
transfer such Shares to the Participant.

 15
 

 

Part G - General
Rules

8                                      General rules
about Shares

8.1                            Listing

If and so long as Shares are admitted to trading on
the NYSE and/or to listing on the Official List and to dealing on the London
Stock Exchange, the Company will, where relevant, apply for listing of any
Shares subscribed under the Plan as soon as practicable after their allotment.

8.2                            Rights

Shares issued on subscription will rank equally in all
respects with the Shares. However, the Directors may determine that they will
not rank equally in all respects for any dividends or other distributions
payable or made in respect of a period beginning before their date of issue.

Where Shares are transferred they will have the
benefit of all rights attaching to the Shares by reference to a record date on
or after the date on which they are allocated or awarded.

The Trustees may award Shares, a proportion of which
will rank for dividends or other rights attaching to Shares by reference to a
record date preceding the relevant Award Day and a proportion of which will
not. If this happens, the Trustees will award the Shares to each Participant as
far as practicable in those same proportions.

8.3                            Acquisition of
Shares

The Company may from time to time ask the Trustees to
acquire any number of Shares specified by it for award or allocation to
Participants on a later operation of the Plan. If the Trustees agree to acquire
Shares, the Company will ensure that the Trustees have sufficient funds to do
so. The Trustees may also acquire Shares at any other time, if they have
sufficient funds to do so. These Shares must satisfy the conditions specified
in Part 4 of Schedule 2. Before any such Shares are awarded or allocated under
the Plan, they will be held on general trust for the purposes of the Plan.

8.4                            Restrictions on
disposals of Shares

The Participant must permit the Trustees to retain his
Bonus Shares, Matching Shares and Dividend Shares throughout the Holding Period
and the Trustees must retain them. The Participant cannot assign, charge or
otherwise dispose of his beneficial interests in the Bonus Shares, Matching
Shares and Dividend Shares in any way during the Holding Period, and the
Trustees shall not dispose of the Bonus Shares, Matching Shares and Dividend
Shares (whether by transfer to the Participant or otherwise) during the Holding
Period, unless the Participant has ceased to be in Employment, or if the
circumstances set out in paragraphs 36(4) or 77 of Schedule 2 apply.

8.5                            Plan limits

The number of Shares which may be allotted under the
Plan on any day must not, when added to the aggregate of the number of Shares
which have been allotted in the previous 10 years under the Plan and any other
employees’ share schemes operated by the Company, exceed 10 per cent of the
ordinary share capital of the Company in issue immediately before that day.

 16
 

 

In this Rule 8.5 “allotted” means, in the case of any
share option scheme, the placing of unissued shares under option and, in
relation to other types of employees’ share scheme, includes the issue of
shares. In determining the limits above, no account shall be taken of any
Shares where the right to acquire Shares was released or lapsed without being
exercised. For the avoidance of doubt, the acquisition of any shares by market
purchase by, or for the purpose of, an employee share scheme is not within the
meaning of “allotted”.

8.6                            Voting

The Trustees will invite Participants to direct them
on the exercise of any voting rights attaching to Plan Shares held by the
Trustees on their behalf. The Trustees will only be entitled to vote on a show
of hands if all directions received from Participants who have given directions
in respect of a particular resolution are identical. The Trustees will not be
under any obligation to call for a poll. In the event of a poll the Trustees
will follow the directions of Participants.

The Trustees must not vote in respect of unallocated
Shares or any Shares they hold under the Plan which have not been registered in
their name.

8.7                            Offers

The Participant (or anyone properly authorised) may
direct the Trustees on the appropriate action to take in relation to any right
relating to a Participant’s Plan Shares to receive other shares, securities or
rights of any description, and in relation to a Reconstruction or Takeover. The
Trustees may not take any action without such a direction. If the Trustees are
to be involved in any liability they may require an indemnity from the
Participant which they consider appropriate.

Where the Trustees exercise rights under a rights
issue in respect of a Participant’s Plan Shares, any shares, securities or
rights allotted as a result shall be treated as if they were Plan Shares
identical to the Shares in respect of which the rights were conferred and as if
they were awarded to the Participant under the Plan in the same way and at the
same time as those Shares. But this only applies if the rights issue is offered
in respect of all ordinary shares in the company and is subject to paragraphs
88(3) to 88(5) of Schedule 2.

On a Reconstruction or a Takeover, the Trustees will
hold any new shares (as described in paragraph 87 of Schedule 2) as Shares
subject to the Plan, as if they were the original Shares.

8.8                            Fractional
entitlements

Where, following any offer described in Rule 8.7, the
Trustees receive rights or securities, they will allocate them among the
Participants concerned on a proportionate basis, rounding down if necessary.
The Trustees will then add the fractions not allocated and sell the unallocated
rights and securities. The Trustees will deduct all expenses of sale and
applicable tax from the proceeds of sale and distribute the net proceeds of
sale proportionately among the Participants whose allocation was rounded down.
However, if a Participant’s entitlement is under £3 the Trustees may retain
that sum and hold it on trust for the purposes of the Plan.

8.9                            Capital Receipts
and other amounts

When the Trustees receive money which is a capital
receipt (within the meaning of Section 502 of ITEPA) or the proceeds of any disposal,
they will transfer the sum to the Participant

 17
 

 

after complying with their PAYE obligations. The
Trustees may, however, retain any capital receipt under £3 due to any
Participant and hold it on trust for the purposes of the Plan.

The Trustees must also pay over to each Participant
any money or money’s worth relating to any of his Plan Shares, apart from money’s
worth consisting of new shares as described in Rule 8.7. But the Trustees are
entitled to retain any amounts needed to discharge their PAYE obligations and
cash dividends reinvested or carried forward under Rule 7.3.

8.10                     Tax liabilities

The Trustees will maintain the necessary records to
comply with their PAYE obligations and those of the Participating Companies so
far as they relate to the Plan.

The Trustees will pay to the relevant employing
companies sufficient sums to enable the employing companies to discharge any
obligations to make PAYE deductions for income tax or national insurance
contributions which arise in the circumstances in Section 510(1) of ITEPA.

The Trustees may dispose of a Participant’s Plan
Shares in order to raise sufficient sums in order to meet any obligation under
this Rule 8.10 unless the Participant makes a payment in advance to the
Trustees of a sum equal to the amount required to discharge the obligation.

When a Participant becomes liable to tax under ITEPA
or Schedules D (Case V) or F of the Taxes Act in relation to his Plan Shares,
the Trustees must give the Participant any information relevant to determining
that liability.

9                                      Leaving
Employment

9.1                            Leaving
Employment

9.1.1                   If a Participant leaves Employment, his Plan Shares will cease to be
subject to the Plan.

9.1.2                   Unless the Directors decide otherwise, the Plan will operate on the
basis that if a Participant leaves Employment for any reason, the Trustees will
transfer the Participant’s Plan Shares to the Participant or as he may direct
(or, if the Participant has died, to the personal representatives) as soon as
reasonably practicable.

9.1.3                   If a Participant leaves Employment during the acquisition period
relating to an allocation of Investment Shares, he shall:

(i)                                  for the purpose of awards of Investment Shares and Matching Shares be
treated as ceasing to be in Employment immediately after the allocation of Investment
Shares; and

(ii)                               for the purpose of determining when his Plan Shares cease to be subject
to the Plan, be treated as ceasing to be in Employment immediately after the
allocation of Investment Shares.

9.1.4                   For the purposes of this Rule 9.1 “acquisition period” has the meaning
given to it in paragraph 97(3) of Schedule 2.

9.1.5                   For the purposes of paragraph 98 of Schedule 2 the retirement age is 50.

 18
 

 

9.2                            Tax free
withdrawal of Plan Shares

In accordance with paragraph 498 of ITEPA, a
Participant is not liable to income tax or national insurance contributions on
his Shares ceasing to be subject to the Plan on leaving Employment for any of
the following reasons:

9.2.1                   because of injury or disability;

9.2.2                   on being dismissed by reason of redundancy;

9.2.3                   by reason of a transfer to which the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (S.I. 1981/1794) applies;

9.2.4                   if the relevant employment is employment by an associated company (see
paragraph 95(2) of Schedule 2), by reason of a change of control or other
circumstances ending that company’s status as an associated company;

9.2.5                   by reason of the Participant’s retirement on or after reaching the
specified retirement age of 50; or

9.2.6                   on the Participant’s death.

10                               General rules relating
to the Plan

10.1                     Notices

Any notice or other document which has to be given in
connection with the Plan may be delivered to a Participant or sent by post to
him at his home address using the records of that Participant’s employing
company, or such other address as the Company or the Trustees consider
appropriate or sent by e-mail (or other electronic means) to any address which
according to the records of his employing company is used by him (or such other
e-mail (or electronic) address as he may from time to time specify). Any notice
or other document which has to be given to the Company or the Trustees in
connection with the Plan may be delivered or sent by post to them at their
registered offices (or such other place as the Directors or the Trustees may
from time to time write and tell the Participants) or if the Directors allow
and subject to such conditions as they may specify, sent by e-mail (or other
electronic means) to the e-mail (or electronic) address for the time being
notified by the Company. Notices sent by post will be deemed to have been given
on the second day following the date of posting. Notices sent by e-mail (or
other electronic means), in the absence of evidence to the contrary, will be
deemed to have been received on the first day after sending.

10.2                     Documents sent to
Shareholders

The Company may send to Participants copies of any
documents or notices normally sent to the holders of its Shares.

10.3                     Directors’ and Trustees’
decisions

The decision of the Directors (or of the Trustees if
the Directors so decide) in any dispute or question affecting any Employee or
Participant will be final and binding on the parties concerned.

 19

 

10.4                     Regulations

The Directors and the Trustees will have the power
from time to time to make or vary regulations for the administration and
operation of the Plan, but these must be consistent with this Deed.

10.5                     Terms of Employment

10.5.1            For the purposes of this Rule 10.5, “Employee” means any Participant,
any Employee (within the meaning of Rule 1) or any other person.

10.5.2            This Rule 10.5 applies:

(i)                                  whether the Company has full discretion in the operation of the Plan, or
whether the Company could be regarded as being subject to any obligations in
the operation of the Plan;

(ii)                               during an Employee’s employment or employment relationship; and

(iii)                            after the termination of an Employee’s employment or employment
relationship, whether the termination is lawful or unlawful.

10.5.3            Nothing in the Rules or the operation of the Plan forms part of the
contract of employment or employment relationship of an Employee. The rights
and obligations arising from the employment relationship between the Employee
and the Company are separate from, and are not affected by, the Plan.
Participation in the Plan does not create any right to, or expectation of,
continued employment or a continued employment relationship.

10.5.4            The award or allocation of Plan Shares on a particular basis in any year
does not create any right to or expectation of the award or allocation of Plan
Shares on the same basis, or at all, in any future year.

10.5.5            Without prejudice to Rule 3.1, no Employee is entitled to participate in
the Plan, or be considered for participation in it, at a particular level or at
all. Participation in one operation of the Plan does not imply any right to
participate, or to be considered for participation in any later operation of
the Plan.

10.5.6            Without prejudice to an Employee’s right to receive any Free or Matching
Shares awarded to him or any Investment Shares or Dividend Shares allocated to
him subject to and in accordance with the express terms of the Rules, no
Employee has any rights in respect of the exercise or omission to exercise any
discretion, or the making or omission to make any decision, relating to the
Plan. Subject to the provisions of Schedule 2, any and all discretions,
decisions or omissions relating to the invitation and application of Employees
to join the Plan on any particular occasion may operate to the disadvantage of
the Employee, even if this could be regarded as capricious or unreasonable, or
could be regarded as in breach of any implied term between the Employee and his
employer, including any implied duty of trust and confidence. Any such implied
term is excluded and overridden by this Rule 10.5.

10.5.7            No Employee has any right to compensation for any loss in relation to
the Plan, including:

 20
 

 

(i)                                  any loss or reduction of any rights or expectations under the Plan in
any circumstances or for any reason (including lawful or unlawful termination
of employment or the employment relationship);

(ii)                               any exercise of a discretion or a decision taken in relation to a
Participant or to the Plan, or any failure to exercise a discretion or take a
decision;

(iii)                            the operation, suspension, termination or amendment of the Plan.

10.5.8            Participation in the Plan is permitted only on the basis that the
Participant accepts all the provisions of the Rules, including in particular
this Rule 10.5. By participating in the Plan, an Employee waives all rights,
other than those expressly set out in the Plan.

10.5.9            Nothing in this Plan confers any benefit, right or expectation on a
person who is not an Employee. No such third party has any rights under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan.
This does not affect any other right or remedy of a third party which may
exist.

10.5.10     Each of the provisions of this Rule 10.5 is entirely separate and
independent from each of the other provisions. If any provision is found to be
invalid then it will be deemed never to have been part of these Rules and to
the extent that it is possible to do so, this will not affect the validity or
enforceability of any of the remaining provisions.

10.6                     Beneficiary who is
incapable

If the Trustees consider that a person cannot look
after his affairs (because of illness, mental disorder, age or other reason)
they may use any amounts or Shares due to that person for his or her benefit,
or may pay or transfer them to some other person to do so. The receipt of the
person to whom the Trustees make payments or transfer Shares will discharge the
Trustees from any obligation in respect of the amounts or Shares concerned.

10.7                     Setting up costs

The Company will pay the costs and expenses of the
preparation and execution of these Plan rules.

10.8                     Errors and omissions

If as a result of an error or omission Bonus Shares,
Investment Shares, Matching Shares or Dividend Shares are not awarded to a
Participant in accordance with the Plan rules, the Trustees may, but without
any obligation to do so, do all such acts or things as may be agreed with HMRC
to rectify the error or omission notwithstanding that such actions may fall
outside the time limits contemplated by or otherwise conflict with the other
provisions of the Plan rules.

10.9                     Participation in more
than one employee share ownership plan

When calculating the limits on individual
participation in the Plan, awards which have been made to an Employee in the
same tax year under employee share incentive plans established by the Company
or a connected company (within the meaning of paragraph 18(3) of Schedule 2)
shall be included. Employee share ownership plans means plans approved under
Schedule 2.

 21
 

 

Awards means (depending on the limit being considered)
awards of free shares or the acquisition by an employee of partnership shares
or dividend shares under such approved plans.

The Trustees will maintain all records necessary to
enable this rule to be complied with.

10.10              Data protection

By participating in the Plan the Participant consents
to the holding and processing of personal data provided by him to the Company,
any Participating Company, the Trustees or third party service provider for all
purposes relating to the operation of the Plan. These include, but are not
limited to:

10.10.1     administering and maintaining records;

10.10.2     providing information to the Company, any Participating Company, the
Trustees, registrars, brokers or third party administrators of the Plan;

10.10.3     providing information to future purchasers of the Company or the
business in which the Participant works;

10.10.4     transferring information about the Participant to a country or territory
outside the European Economic Area that may not provide the same statutory
protection for the information as the Participant’s home country.

11                                Assets of the
Plan

11.1                      Assets held on
trust

The Trustees will hold all the payments they receive
and the assets representing them from time to time and all income on trust for
the purposes of the Plan. The Trustees may also accept gifts of cash and Shares
which will be held on trust for the purposes of the Plan.

11.2                      Use of assets

The Trustees may invest any moneys held by them and
not immediately required for the purpose of the Plan in such manner as they may
choose. The Trustees are not under a duty to invest trust property.

The Trustees may borrow in order to acquire Shares for
the purposes of the Plan or, but only after getting the written consent of the
Company, for any other purpose.

11.3                      Plan expenses

The Trustees will pay the expenses of the Plan
(including their own expenses incurred in attending to Plan business) from the
Plan’s assets, if the assets are sufficient and the Company decides in writing.
If there is no such direction, the expenses of the Plan will be met by the
Participating Companies in proportion to the amounts paid by them under the
Plan or (if the Trustees decide) in proportion to the number of Shares awarded
to their Participants under the Plan in the related year, or in proportion to
both.

11.4                      Trustees’ duties
relating to Shares

During the Holding Period, the Trustees may only sell
or transfer any Bonus Shares, Matching Shares or Dividend Shares in the following
circumstances:

 22
 

 

11.4.1             if a Participant instructs this as described in Rule 8.7; or

11.4.2             to obtain sufficient funds to secure rights arising under a rights issue
affecting Plan Shares; or

11.4.3             to discharge PAYE obligations under Rule 8.10; or

11.4.4             if they receive a termination notice as described in Rule 15.1.

11.5                      Trustees holding
Shares

Where a Participant loses any right to receive Shares
under the Plan, the Trustees will hold those Shares on general trusts for the
purposes of the Plan.

12                               Trustees

12.1                     Appointment and removal

The Company may appoint new or additional trustees or
a body corporate as a sole trustee. The Company may also remove trustees.

These powers will be exercised by resolution of the
Directors. These powers may be exercised without giving a reason.

There must be at least two trustees, except when there
is a sole corporate trustee.

All the trustees must be resident in the United
Kingdom for United Kingdom tax purposes at all times.

12.2                     Retirement

A trustee may retire by giving to the Company written
notice of his wish to retire. The notice will take effect at the expiry of 3
months after the date of the notice, or on any other date agreed with the
Company. The retiring trustee need not give a reason for retiring and will not
be responsible for any costs arising from his retirement. The retiring trustee
will take the necessary action, as directed by the Company, to give effect to
his retirement including delivering all documents which he has relating to the
Plan. If necessary to achieve compliance with Rule 12.1, the Company will
procure a replacement trustee to replace the retiring trustee at the end of the
notice period. Any continuing trustee is authorised to effect the transfer of
Plan assets on behalf of a retiring trustee.

12.3                     Exercise of powers

If there is more than one trustee, the Trustees may
act by majority vote and may delegate powers duties or discretions to any
persons and on any terms (including terms which allow the delegate to
sub-delegate).

The Trustees may allow any Shares to be registered in
the name of an appointed nominee but these Shares must be registered in a
designated account.

Trustees who delegate powers or use a nominee are not
divested of any responsibility under the Rules or under Schedule 2.

The Trustees may at any time, and must if the Company
so directs, revoke any delegation made under this Rule, or require any Plan
assets held by another person to be returned to the Trustees, or both.

 23
 

 

12.4                     Trustees’ charges

A trustee who carries on a profession or business may
charge for services provided on a basis agreed with the Company, as also may a
company or firm in which a trustee is interested. These charges will also be
paid from the Plan assets, if available, unless the Directors decide otherwise.

12.5                     Limit of Liability

A trustee will not be liable for any breach of trust
except wilful wrongdoing (but a paid trustee will also be liable for
negligence).

12.6                     Indemnity

The Participating Companies will jointly and severally
indemnify each of the trustees (except a paid trustee) against any expenses and
liabilities which are incurred through acting as a trustee of the Plan but
which cannot, for any reason, be met from the Plan’s assets. But this does not
apply to expenses and liabilities which are incurred through wilful wrongdoing
(or negligence in the case of a paid trustee) or covered by insurance under
Rule 12.7. The indemnity in this Rule 12.6 is in addition to and without
prejudice to the right which the Trustees have under general law and the Trustee
Act 2000 to be indemnified out of the Plan’s assets.

12.7                     Insurance

The Trustees may insure the Plan against any loss
caused by it or any of its employees, officers, agents or delegates. They may
also insure themselves and any of these persons against liability for breach of
trust not involving wilful wrongdoing. Except in the case of a paid trustee,
the premiums may be paid from the Plan assets.

If the Trustees are insured, they will waive the
protection of Rule 12.5.

12.8                     Personal Interest

The Trustees and any director, officer or employee of
a corporation acting as trustee, may be interested in any securities of a
Participating Company or any company in which a Participating Company may be
interested. Such person may enter into a contract with any such companies and
will not be liable to account for any profits obtained.

12.9                     Dividend waiver

The Trustees waive and cancel their rights and
entitlements in respect of the Shares which are not Plan Shares to all
dividends to be declared by the Company in the future.

12.10              Qualifying Transfers

The Trustees will comply with paragraph 78 of Schedule
2 if there is a qualifying transfer of shares to the Trustees in accordance
with that paragraph.

13                               Participating
Companies

13.1                     Inclusion in the Plan

An employer wishing to participate in the Plan must
enter into a deed with the Company and the Trustees agreeing to comply with the
rules of the Plan. The deed must be in a form agreed by HMRC.

 24
 

 

13.2                     Ceasing to participate

Any Participating Company will cease to participate in
the Plan:

13.2.1            when it ceases to be a Subsidiary; or

13.2.2            if and during any times when the Directors decide that the Plan will not
apply to it. (But in making this decision the Directors must ensure that the
conditions in paragraph 10 of Schedule 2 are still satisfied. These conditions
are that the Plan must not have any features which may discourage certain
employees from participating and that the Plan cannot benefit mainly directors
or higher paid employees).

14                               Changing the
Rules

14.1                     Before HMRC approval

Before HMRC approves the Plan under Schedule 2 the
Directors can change the Rules as necessary in order to obtain approval.

14.2                     After HMRC approval

After the Plan is approved by HMRC, the Directors and
the Trustees may, together by deed at any time, change the Plan rules. But if a
key feature of the Plan is to be changed at a time when the Plan is approved by
HMRC under Schedule 2, and the approved status of the Plan is to be maintained,
the change will not have effect until it has been approved by HMRC.

A “key feature” is any provision needed to comply with
the requirements of Schedule 2.

The Directors must not make any changes to the Plan
which would breach the rule against perpetuities (see Rule 15.4).

15                               Termination

15.1                     Termination notice

The Company in general meeting or the Directors may at
any time resolve to terminate the Plan. If they so resolve, they must issue a
termination notice and give it without delay to:

15.1.1            HMRC;

15.1.2            the Trustees; and

15.1.3            all individuals who have Plan Shares, and all Employees who have
returned valid application forms but have not been awarded or allocated any
Shares.

15.2                     Effect of termination
notice

Once the Trustees receive the termination notice, they
must not award or acquire any more Shares on behalf of Participants.

The Trustees must remove each Participant’s Plan
Shares from the Plan by either transferring them or the proceeds of their sale
to the Participant or as he may direct. (If the Participant has died, his
personal representatives may give these instructions.) This should be done as
soon as practicable once three months have passed from the date the termination
notice was given under Rule 15. But the Trustees must also delay the removal

 25
 

 

of Plan Shares until this can be done without any
liabilities to income tax under Sections 501 to 507 of ITEPA. The Trustees may
only remove Plan Shares at an earlier time if the Participant agrees after
receiving the termination notice.

The Trustees must also pay to Participants, as soon as
they receive the termination notice, any cash dividends they are holding (Rule
7.3) or any Contributions they are holding (Rule 5.7).

15.3                     Surplus Assets

Any surplus assets left after the Trustees have
decided when Plan Shares will be removed under Rule 15.2 will be paid to
Participating Companies, so far as practicable, in proportion to the total
amounts paid by each of them to the Plan, but the Trustees may decide on
payments in different proportions.

15.4                     Perpetuity Period

The perpetuity period relating to the Plan is fifteen
years. The Trustees may not award Shares more than ten years after the date of
these Plan rules.

The end of the “perpetuity period” is the time by
which Participants or other persons must have an interest in Shares, without
risk of loss of any rights.

16                               Governing Law

English law governs the Plan and its administration.

Executed as a deed on the date shown at the top of
this document.

 

	
  THE COMMON SEAL of Watson
  Wyatt

  Limited was put onto this deed in the

  presence of:

  	
   

  	
  

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
  /s/ John J.
  Haley

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
  /s/ Walter W.
  Bardenwerper

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE COMMON SEAL
  of Halifax

  Corporate Trustees Limited was put

  onto this deed in the presence of:

  	
   

  	
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director 

  	
  /s/ [illegible]

  	
   

  	
   

  	
   

  	
  [SEAL]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
  /s/ [illegible]

  	
   

  	
   

  	
   

  	
   

  
											

 

 26Exhibit 10.22

 

5th Dated     
July                           
2006

 

 

 

 

 

 

WATSON WYATT
LIMITED

 

and

 

HALIFAX CORPORATE
TRUSTEES LIMITED

 

 

WATSON WYATT SHARE INCENTIVE PLAN 2005

 

DEED OF AMENDMENT

 

 

 

 

 

 

 

 

 

 

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

 

 

Ref 01/145/K Kelleher

 

This
deed is made on     5
July                               2006 between:

(1)                              Watson Wyatt Limited (Number 05379716)
whose registered office is Watson House, London Road, Reigate, Surrey, RH2 9PQ (the
“Company”); and

(2)                              Halifax
Corporate Trustees Limited (Number
2045938) whose registered office is Trinity Road, Halifax, West Yorkshire, HX1
2RG (the “Trustees”).

1                                      Introduction

1.1                            The
Trustees are the current trustee of the Watson Wyatt Share Incentive Plan (the “Plan”) which was established by deed dated 7 September 2005
(the “Trust Deed”).

1.2                            Since
the Plan was adopted, a merger has been effected between Watson Wyatt &
Company Holdings and Watson Wyatt Worldwide, Inc. Following this merger, Watson
Wyatt & Company Holdings has changed its name to Watson Wyatt Worldwide,
Inc.

1.3                            Under
Clause 14.2 of the Trust Deed the directors of the Company (or a duly
authorised committee) and the Trustees may, together by deed at any time,
change the Plan rules.

1.4                            In
exercise of their power under Clause 14.2 of the Trust Deed, the directors of
the Company and the Trustees wish to modify the Trust Deed by replacing the
words “Watson Wyatt & Companies Holdings” with the words “Watson Wyatt
Worldwide, Inc.” throughout.

1.5                            The
Company and the Trustees have executed this deed to show that they agree to the
modification.

2                                      Operative Part

The Trust Deed is
modified as follows:

In clause 1 of the Trust
deed, the definition of “Share” is deleted and replaced with the following:

‘“Share”
means a share of Class A common stock of par value US$0.01 of Watson Wyatt
Worldwide, Inc., which meets the requirements of Part 4 of Schedule 2, and any
security which forms part of any new holding referred to in paragraph 86, of
Schedule 2.

To give effect to its
provisions this document has been executed as a deed on the date stated at the
beginning.

 

	
  

  	
  

  	
  EXECUTED AS A DEED by Watson Wyatt

  Limited acting by:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ C.
  Ramamurthy

  	
   

  	
   

  	
  Chandrasekhar Ramamurthy

  
	
   

  	
   

  	
   

  	
  Director, Watson Wyatt Limited

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ T. Ovington

  	
   

  	
   

  	
  Tim Ovington

  
	
   

  	
   

  	
   

  	
  Head of HR, Watson Wyatt Limited

  

 

 1
 

 

 

	
  

  	
   

  	
  

  	
  EXECUTED AS A DEED by Halifax

  Corporate Trustees Limited acting by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Director /s/ [illegible]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Director/Secretary /s/ [illegible]

  

 

 2

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