Document:

Exhibit 4.7

 

	
   

  	
  2002

  

 

IMPERIAL TOBACCO GROUP PLC

 

RULES OF THE IMPERIAL
TOBACCO GROUP

BONUS MATCH PLAN

 

(Approved
by the Remuneration Committee on 22 November 2002)

 

 

 

BAA/I210.00129

 

   2002

 

 

RULES OF THE IMPERIAL
TOBACCO GROUP

BONUS MATCH PLAN

 

1.                                           Definitions

 

The following words and expressions shall
have the following meanings:-

 

	
  “Board”

  	
   

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

  
	
   

  	
   

  	
   

  
	
  “Company”

  	
   

  	
  Imperial
  Tobacco Group PLC;

  
	
   

  	
   

  	
   

  
	
  “Control”

  	
   

  	
  as
  defined in Section 840 of the Act;

  
	
   

  	
   

  	
   

  
	
  “Early Vesting Date”

  	
   

  	
  as
  defined at Rule 4.2;

  
	
   

  	
   

  	
   

  
	
  “Employee”

  	
   

  	
  any
  person other than a director of Imperial Tobacco Group PLC for the time being
  in full, part-time or temporary employment of any Member of the Group;

  
	
   

  	
   

  	
   

  
	
  “Exit Price”

  	
   

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

  
	
   

  
	
  “Expected Vesting
  Date” as defined at Rule 4.1;

  
	
   

  
	
  “Group”

  	
   

  	
  the
  Company and its Subsidiaries;

  
	
   

  
	
  “Member of the
  Group”  the Company or any of
  its Subsidiaries;

  
	
   

  
	
  “Notional Additional
  Gain”

  	
   

  	
  the
  Exit Price multiplied by the number of Notional Additional Shares allocated
  to a Participant reduced by £0.02 per Notional Additional Share for every
  £0.01 that the Exit Price is less than the Notional Share Price;

  
	
   

  	
   

  	
   

  
	
  “Notional Additional
  Share”

  	
   

  	
  a
  notional share allocated pursuant to Rule 2.4;

  
	
   

  	
   

  	
   

  
	
  “Notional Lodged Share”

  	
   

  	
  a
  notional share allocated pursuant to Rule 2.3;

  
	
   

  
	
  “Notional Share Price”

  	
  the
  middle market price of a Share as derived from the London Stock Exchange
  Daily Official List for the
                dealing
  day determined by the Board;

  
	
   

  
	
  “Participant”

  	
   

  	
  an
  Employee who is holding monies in a bank account pursuant to Rule 2.2;

  
	
   

  	
   

  	
   

  
	
  “Plan”

  	
  the
  Imperial Tobacco Group Bonus Match Plan constituted by these Rules;

  
	
   

  	
   

  	
   

  
	
  “Rules”

  	
   

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

  
	
   

  	
   

  	
   

  
	
  “Share”

  	
   

  	
  an
  ordinary share in the capital of the Company;

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

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

  
	
   

  
	
  “Vesting Date”

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

  
					

 

1

 

2.                                           Invitations

 

2.1                                     The
Board may, from time to time, invite any Employee to participate in the Plan.

 

2.2                                     Any
such invitation shall:-

 

(a)                               invite
such Employees as the Board may in its discretion determine to deposit monies
(in Sterling or in a local currency and on such other terms (if any) as
determined by the Board) with:

 

(i)                               a bank
account held with Abacus (C.I.) Limited; or

 

(ii)                            a bank
account designated by the Board; and

 

(b)                              advise
such Employees of the proposed allocation of Notional Additional Shares.

 

2.3                                     The
Board shall allocate Notional Lodged Shares to Participants by dividing the
monies deposited by a Participant pursuant to Rule 2.2(a) by the Notional Share
Price.

 

2.4                                     The
Board shall allocate Notional Additional Shares to Participants in respect of
their Notional Lodged Shares on such basis as the Board may in its discretion
determine based on length of service with the Group, the Earnings of a
Participant, the financial performance of the Group or otherwise howsoever
PROVIDED THAT the maximum aggregate number of Notional Additional Shares which
may be allocated to a Participant in respect of an invitation shall not exceed
the total number of Notional Lodged Shares allocated to such Participant.

 

2.5                                     No
invitation shall be made other than at a time at which dealings in Shares may
occur under the UK Listing Authority Model Code for securities dealings by
directors and other relevant employees.

 

3.                                           Effect
of Allocation

 

3.1                                     Any
Notional Lodged Share and Notional Additional Share which has been allocated to
a Participant shall be held for that Participant if and so long as that
Participant shall, throughout the period commencing on the date of allocation
of such Notional Lodged Share and Notional Additional Share and ending on the
Vesting Date:-

 

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

 

(b)                              not have
withdrawn any monies held from time to time in a bank account pursuant to Rule
2.2.

 

4.                                           Vesting
of Notional Lodged Shares and Notional Additional Shares

 

4.1                                     “Expected
Vesting Date” in relation to any Notional Lodged Shares and Notional Additional
Shares means such anniversary of the date of allocation of the Notional Lodged
Shares and Notional Additional Shares as the Board shall, prior to such
allocation, determine save that if an event occurs as a result of which the
Board determines that in relation to all, or any Notional Lodged Shares or
Notional Additional Shares previously allocated the Expected Vesting Date is no
longer appropriate, the Board may in its discretion substitute such other date
as it may determine as the Expected Vesting Date;

 

2

 

4.2                                     “Early
Vesting Date” in relation to any Notional Lodged Shares and Notional Additional
Share means the date on which any of the following events shall first occur
prior to the Expected Vesting Date of such Notional Lodged Share and Notional
Additional Share:-

 

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

 

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

 

(c)                               death
during service of the Participant; or,

 

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

 

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

 

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

 

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

 

(iv)                        any other
circumstances.

 

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

 

4.3                                     For
the purposes of this Rule 4, where a Participant’s employment with any Member
of the Group is terminated without notice the Participant’s employment shall be
deemed to cease on the date on which the termination takes effect and where the
said employment is terminated with notice the Participant’s employment shall be
deemed to cease on the date on which that notice is given unless the Board in
its sole discretion shall agree to extend the date on which the employment is
deemed to cease to the date when the notice expires.

 

5.                                           Payments

 

5.1                                     Any
monies held in a bank account pursuant to Rule 2.2 shall be transferred as soon
as practicable (in such manner as the Board may determine) to the relevant
Participant following the Vesting Date.

 

5.2                                     Save
as otherwise provided, on the Expected Vesting Date a payment shall be made to
the Participant equal to the aggregate of:-

 

(a)                               an
amount equal to the Exit Price multiplied by the number of Notional Lodged
Shares allocated to that Participant less the monies held in a bank account by
that Participant pursuant to Rule 2.2; and

 

(b)                              the
Notional Additional Gain.

 

5.3                                     If
the Early Vesting Date has arisen under Rule 4.2 a payment shall be made to the
Participant calculated by mutiplying the Exit Price by the number of Notional
Lodged Shares allocated to that Participant less the monies held in a bank
account by that Participant pursuant to Rule 2.2.

 

5.4                                     If
the Early Vesting Date has arisen under Rule 4.2(d)(iv) any award of Notional
Additional Shares to that Participant shall lapse unless, within six months of
that date, the Board shall determine otherwise in which case a payment shall be
made to the Participant not exceeding the Notional Additional Gain

 

3

 

which a Participant would have been entitled to had
the Early Vesting Date arisen otherwise than under Rule 4.2(d)(iv).

 

5.5                                     If
the Early Vesting Date has arisen otherwise than under Rule 4.2(d)(iv), a
payment shall be made to the relevant Participant (or to the Participant’s
estate) as may be determined by the Board in accordance with the basis of
allocation of the Notional Additional Shares originally laid down under Rule
2.4.

 

5.6                                     For
the avoidance of doubt if the Exit Price multiplied by the number of Notional
Lodged Shares allocated to a Partcipant is less than the monies held in a bank
account by that Participant pursuant to Rule 2.2 no payment shall be made in
relation to an award of Notional Lodged Shares.

 

6.                                           Capital
Reorganisation

 

6.1                                     If
there is any capital reorganisation of the Company including a capitalisation
issue rights issue or rights offer, consolidation or sub-division or any
variation of share capital, or any special dividend, reconstruction or demerger,
a Notional Lodged Share or a Notional Additional Share may be adjusted in such
manner as the Company’s auditors, acting as experts and not as arbitrators, may
confirm in writing to be fair and reasonable.

 

6.2                                     Participants
shall be notified of any adjustment.

 

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

 

7.                                           Taxation

 

7.1                                     The
Company and any Member of the Group may make such provision for and take such
action as may be considered by either of them to be necessary or expedient for
the withholding or payment of any taxes or any other statutory deductions for
which either of them is properly accountable and wherever those taxes are
imposed provided those taxes arise in respect of any payment pursuant to the
Rules including (but not limited to) the withholding of funds from any payment
under these Rules until a Participant reimburses the Company or any Member of
the Group for the amounts of any such taxes for which it is properly
accountable.

 

7.2                                     For
the purposes of this Rule 7 the Company and any Member of the Group may rely on
any information supplied to them by any other Member of the Group or by any tax
adviser as to the amount of any such tax liability.

 

8.                                           General

 

8.1                                     Any
notice or other document given to any Employee pursuant to the Plan shall be
delivered to him, sent by post to him at his home address according to the
records of his employing company or such other address as may appear to the
Board to be appropriate or sent to him by e-mail to his usual e-mail address
according to the records of his employing company or to such other e-mail
address that the Employee may have advised may be used.  Notices or other documents sent by post
shall be deemed to have been received 2 days following the date of posting.

 

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

 

8.3                                     The
costs of introducing, operating and administering the Plan shall be borne by
the Company.

 

4

 

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

 

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

 

9.                                           Amendment

 

9.1                                     The
Plan shall be administered under the direction of the Board who may at any time
and from time to time by resolution and without other formality amend or
augment the Rules or the Plan in any respect provided that no amendment shall
operate to affect adversely in any way any rights already acquired by a
Participant [without the Participant’s consent].

 

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

 

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

 

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

 

10.                                     Termination

 

The Plan may be terminated at any time by a resolution
of the Board, and shall in any event terminate on 15 August 2006, but any
termination shall not affect the outstanding rights of Participants.

 

11.                                     Governing
Law

 

This Plan shall be governed by the laws of England.

 

5

 

SCHEDULE 1

 

 

INTERNATIONAL RULES

 

 

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

 

 

Macedonia

Slovenia

Ukraine

 

 

The Rules of
the Plan apply with and subject to the following amendments and provisions
which have been adopted by the Board pursuant to Rule 9.2 for the purposes of
the operation of the Plan in the jurisdictions specified below:

 

[                          ]

 

6Exhibit 4.8

 

2 February 2004

 

 

Private & Confidential

Addressee only

 

 

Mr D C Bonham

150 Brompton Road

London

SW3 1HX

 

Dear Derek

 

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company in the capacity of Chairman.  This letter details the main terms attached
to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced than
those relating to private companies.  In
common with the rest of the Board, you are therefore expected to comply with
the terms of the Financial Services Authority Code for transactions by
directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £220,000 per annum, payable monthly in arrears,
subject to UK statutory deductions.  I
confirm that, in view of your continuing high level of investment in the
Company, the requirement to reinvest any net of tax fee increases in shares of
the Company has been waived.

 

1

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if
circumstances should arise in which it was necessary for you to seek separate
legal advice about the performance of your duties.  In such a situation, you are required to discuss the issue either
with me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

	
  A G L Alexander

  
	
  Vice Chairman

  
	
  For and on behalf of Imperial Tobacco Group PLC

  
	
  2 February 2004

  

 

2

 

Private &
Confidential

Addressee only

 

 

Mr A G L Alexander

Crafnant

Gregories Farm Lane

Beaconsfield

Bucks  HP9 1HJ

 

Dear Tony

 

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company in the capacity of Vice Chairman.  This letter details the main terms attached
to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced
than those relating to private companies. 
In common with the rest of the Board, you are therefore expected to
comply with the terms of the Financial Services Authority Code for transactions
by directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM.  All
appointments and re-appointments to the Board are, of course, subject to the
Company’s Articles of Association.

 

Remuneration

 

The fee is at present £70,000 per annum, payable monthly in arrears,
subject to UK statutory deductions.   I
confirm that, in view of your continuing high level of investment in the
Company, the requirement to reinvest any net of tax fee increases in shares of
the Company has been waived.

 

3

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties in line with the letter to
you from me dated 30 September 1996. 
Such expenses would include reasonable legal fees if circumstances
should arise in which it was necessary for you to seek separate legal advice
about the performance of your duties. 
In such a situation, you are required to discuss the issue either with
me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

	
  D C Bonham

  
	
  Chairman

  
	
  For and on behalf of Imperial Tobacco Group PLC

  

 

4

 

2 February 2004

 

 

Private &
Confidential

Addressee only

 

 

Mr I J G Napier

Loxley

5 Ladywood Road

Four Oaks

Sutton Coldfield

West Midlands

B74 2SN

 

 

Dear Iain

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company. 
This letter details the main terms attached to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of directors
of listed companies are more onerous and more rigorously enforced than those
relating to private companies.  In
common with the rest of the Board, you are therefore expected to comply with
the terms of the Financial Services Authority Code for transactions by
directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £40,000 per annum, payable monthly in arrears,
subject to UK statutory deductions of which £10,000 per annum, less UK
statutory deductions, will be applied to the purchase of the Company’s shares,
to be held by a nominee for the duration of your appointment.

 

5

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if circumstances
should arise in which it was necessary for you to seek separate legal advice
about the performance of your duties. 
In such a situation, you are required to discuss the issue either with
me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

D C Bonham

Chairman

For and on behalf of Imperial Tobacco Group PLC

 

6

 

2 February 2004

 

 

Private &
Confidential

Addressee only

 

 

Dr P H Jungels

Enborne Chase

Enborne

Nr Newbury

Berks  RG20 0HD

 

 

Dear Pierre

 

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company. 
This letter details the main terms attached to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced
than those relating to private companies. 
In common with the rest of the Board, you are therefore expected to
comply with the terms of the Financial Services Authority Code for transactions
by directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £40,000 per annum, payable monthly in arrears,
subject to UK statutory deductions of which £10,000 per annum, less UK
statutory deductions, will be applied to the purchase of the Company’s shares,
to be held by a nominee for the duration of your appointment.

 

7

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if
circumstances should arise in which it was necessary for you to seek separate
legal advice about the performance of your duties.  In such a situation, you are required to discuss the issue either
with me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

	
  D C Bonham

  
	
  Chairman

  
	
  For and on behalf of Imperial Tobacco Group PLC

  

 

8

 

2 February 2004

 

 

Private &
Confidential

Addressee only

 

 

Mr S Huismans

Flat 3

28 Norfolk Street

Sliema

SLM 04

MALTA

 

Dear Sipko

 

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company. 
This letter details the main terms attached to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced
than those relating to private companies. 
In common with the rest of the Board, you are therefore expected to
comply with the terms of the Financial Services Authority Code for transactions
by directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £40,000 per annum, payable monthly in arrears,
subject to UK statutory deductions of which £10,000 per annum, less UK
statutory deductions, will be applied to the purchase of the Company’s shares,
to be held by a nominee for the duration of your appointment.

 

9

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if
circumstances should arise in which it was necessary for you to seek separate
legal advice about the performance of your duties.  In such a situation, you are required to discuss the issue either
with me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

D C Bonham

Chairman

For and on behalf of Imperial Tobacco Group PLC

 

10

 

2 February 2004

 

 

Private &
Confidential

Addressee only

 

 

Mr S P Duffy

Raybourne House

Mill Street

Islip

Oxon  OX5 2SZ

 

Dear Simon

 

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a Non-Executive
Director, of the Company.  This letter
details the main terms attached to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced
than those relating to private companies. 
In common with the rest of the Board, you are therefore expected to
comply with the terms of the Financial Services Authority Code for transactions
by directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £40,000 per annum, payable monthly in arrears,
subject to UK statutory deductions of which £10,000 per annum, less UK
statutory deductions, will be applied to the purchase of the Company’s shares,
to be held by a nominee for the duration of your appointment.

 

11

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if
circumstances should arise in which it was necessary for you to seek separate
legal advice about the performance of your duties.  In such a situation, you are required to discuss the issue either
with me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

	
  D C Bonham

  
	
  Chairman

  
	
  For and on behalf of Imperial Tobacco Group PLC

  

 

12

 

2 February 2004

 

 

Private &
Confidential

Addressee only

 

 

Mr D W Thursfield

Lion House

15 Lypiatt Terrace

Cheltenham

Gloucestershire  GL50 25X

 

 

Dear David

 

Imperial Tobacco Group PLC (“the Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your position as a
Non-Executive Director, of the Company. 
This letter details the main terms attached to this office.

 

Duties

 

You will be required to attend Board meetings of the Company.  The Board meets five times each year and
normally the meetings are held here in Bristol.  The next Annual General Meeting will be held on 3 February 2004.

 

You are already aware of how the Board works and what authorities are
delegated to the Group Chief Executive and his executive director colleagues.

 

In addition to attending Board meeting you may be invited to serve on
one or both of the Remuneration and Audit Committees as well as the Nominations
Committee.  The Remuneration Committee
will meet twice a year and the Audit Committee three times a year.  You have been informed of the roles of these
Committees.

 

I need hardly remind you that the liabilities and obligations of
directors of listed companies are more onerous and more rigorously enforced
than those relating to private companies. 
In common with the rest of the Board, you are therefore expected to
comply with the terms of the Financial Services Authority Code for transactions
by directors of listed companies (a copy of which is available from the Company
Secretary) and specifically with any insider dealing rules adopted by the
company from time to time.

 

Appointment

 

Following this confirmation of re-appointment, your position will be
reviewed annually prior to the AGM or if earlier, upon the date that you reach
the age of 65 years.  All appointments
and re-appointments to the Board are, of course, subject to the Company’s
Articles of Association.

 

Remuneration

 

The fee is at present £40,000 per annum, payable monthly in arrears,
subject to UK statutory deductions of which £10,000 per annum, less UK
statutory deductions, will be applied to the purchase of the Company’s shares,
to be held by a nominee for the duration of your appointment.

 

13

 

Expenses

 

The Company will reimburse you for any expenses that you may incur
properly and reasonably in performing your duties.  Such expenses would include reasonable legal fees if
circumstances should arise in which it was necessary for you to seek separate
legal advice about the performance of your duties.  In such a situation, you are required to discuss the issue either
with me or with one of your non-executive colleagues in advance.

 

The Company looks forward to continuing to work with you in the future.

 

Yours sincerely

 

 

	
  D C Bonham

  
	
  Chairman

  
	
  For and on behalf of Imperial Tobacco Group PLC

  

 

14

 

16 September 2003

 

 

Mr G Davis

Chief Executive

Imperial Tobacco Group PLC

P O Box 244

Upton Road

Bristol  BS99 7UJ

 

 

Dear Gareth

 

EXECUTIVE DIRECTORS’ SALARY REVIEW

 

On behalf of the Remuneration Committee, I have been asked to advise
you that at its meeting on 2 September 2003, following a review of the
Company’s current remuneration arrangements for Executive Directors, it was
agreed that your salary be increased to £660,000 per annum, with effect from 1
October 2003.

 

Yours sincerely

 

 

	
  R C Hannaford

  
	
  Secretary of the
  Remuneration Committee

  

 

15

 

16 September 2003

 

 

Mr R Dyrbus

Finance Director

Imperial Tobacco Group PLC

P O Box 244

Upton Road

Bristol  BS99 7UJ

 

 

Dear Bob

 

EXECUTIVE DIRECTORS’ SALARY REVIEW

 

On behalf of the Remuneration Committee, I have been asked to advise
you that at its meeting on 2 September 2003, following a review of the
Company’s current remuneration arrangements for Executive Directors, it was
agreed that your salary be increased to £420,000 per annum, with effect from 1
October 2003.

 

Yours sincerely

 

 

	
  R C Hannaford

  
	
  Secretary of the
  Remuneration Committee

  

 

16

 

16 September 2003

 

 

Dr F A Rogerson

Corporate Affairs Director

Imperial Tobacco Group PLC

P O Box 244

Upton Road

Bristol  BS99 7UJ

 

 

Dear Frank

 

EXECUTIVE DIRECTORS’ SALARY REVIEW

 

On behalf of the Remuneration Committee, I have been asked to advise
you that at its meeting on 2 September 2003, following a review of the
Company’s current remuneration arrangements for Executive Directors, it was
agreed that your salary be increased to £300,000 per annum, with effect from 1
October 2003.

 

Yours sincerely

 

 

	
  R C Hannaford

  
	
  Secretary of the
  Remuneration Committee

  

 

17

 

16 September 2003

 

 

Mr D Cresswell

Manufacturing Director

Imperial Tobacco Group PLC

P O Box 244

Upton Road

Bristol  BS99 7UJ

 

 

Dear David

 

EXECUTIVE DIRECTORS’ SALARY REVIEW

 

On behalf of the Remuneration Committee, I have been asked to advise
you that at its meeting on 2 September 2003, following a review of the
Company’s current remuneration arrangements for Executive Directors, it was
agreed that your salary be increased to £300,000 per annum, with effect from 1
October 2003.

 

Yours sincerely

 

 

	
  R C Hannaford

  
	
  Secretary of the
  Remuneration Committee

  

 

18

 

Dated 30 May 2003

 

 

(1) Imperial Tobacco Group PLC

 

- and -

 

(2) David Cresswell

 

 

_____________________________

 

EXECUTIVE SERVICE AGREEMENT

_____________________________

 

 

An Agreement made the 30 day of
May 2003 between:-

 

(1)           Imperial Tobacco Group PLC (Company Number:
3236483) whose registered office is situated at PO Box 244, Upton Road, Bristol
BS99 7UJ (“the Company”); and

 

(2)           David Cresswell of 8 The Chancery,
Bramcote, Nottingham NG9 3AJ (“the Executive”).

 

Witnesses
as follows:

 

1.             Definitions

 

In this
Agreement unless the context otherwise requires:

 

1.1           “the Board” means the
Board of Directors of the Company;

 

1.2           “Group
Companies” means the Company and all subsidiary and associated companies from
time to time of the Company which shall include, for the avoidance of doubt,
Imperial Tobacco Germany Management GmbH;

 

1.3           “associated
companies” means a company which falls to be treated as such for the purposes
of Statement of Standard Accounting Practice No. 1 of the Institute of
Chartered Accountants in England and Wales;

 

1.4           “subsidiary” has the
meaning ascribed thereto in Section 736 of the Companies Act 1985 as amended;

 

1.5           “Reemtsma” means
Reemtsma Holding GmbH & Co. KG, Reemtsma Cigarettenfabriken GmbH and their
subsidiaries;

 

1.6           References to Clauses
are to clauses so numbered in this Agreement.

 

2.             Term and Appointment

 

2.1           The
Company shall engage the Executive and the Executive shall serve the Company as
hereinafter provided (“the Appointment”). The Appointment shall commence on 1
June 2003, and shall continue subject as hereinafter provided in this Agreement
unless and until terminated by either party as follows:-

 

(a)           At
any time prior to the date on which the Executive reaches the age of 60 years
(the “Normal Retirement Age”), either party may terminate the appointment by
giving to the other not less than 12 months’ prior notice in writing.

 

(b)           With
effect from the date on which the Executive reaches the Normal Retirement Age
the Company and the Executive shall

 

19

 

review the
Appointment on or about 1 June in each year (or on such other date as the Board
shall direct). At that time the Company and the Executive may confirm the
continuation of the Appointment for a further period or either party may
terminate the Appointment with immediate effect (and without payment of
remuneration or compensation of any kind) which termination shall be by reason
of the retirement of the Executive.

 

(c)           For
the avoidance of doubt, if not terminated earlier, the Appointment shall
automatically terminate when the Executive reaches the age of 63 years.

 

2.2           Where
notice is served to terminate the Appointment whether by the Company or the Executive
the Company shall be entitled in its absolute discretion to terminate the
Appointment forthwith by paying to the Executive salary in lieu of notice and
if the Executive accepts such payment it shall be deemed to be in full and
final satisfaction of the Executive’s claims under this Agreement. For the
avoidance of doubt, no additional compensation will be payable in respect of
the termination of any other position held within the Group, e.g. as a member
of the Vorstand or member of the Supervisory Board at Reemtsma.

 

3.             Duties

 

3.1           During
the Appointment the Executive shall devote the whole of his time and attention
to the duties assigned to him and shall well and faithfully serve the Company
and use his best endeavours to promote the interests of the Company and the
Group Companies and shall obey all reasonable and lawful directions given to
him by or under the authority of the Board and subject thereto the Executive
shall perform the duties of Manufacturing Director.

 

3.2           The
Executive may be required in pursuance of his duties hereunder:

 

(a)           to
perform services not only for the Company but also for any of the Group
Companies and without further remuneration (except as otherwise agreed) to
accept such offices in any of the Group Companies as the Company may from time
to time reasonably require and if the Executive shall cease to be a director of
the Company for any reason then he may at the will of the Company continue as
an employee;

 

(b)           to
work at such places within the United Kingdom as the Company may require, the
Company reimbursing the Executive in respect of all reasonable relocation
expenses; and

 

2

 

(c)           to
travel to such places whether in or outside the United Kingdom by such means
and on such occasions as the Company may from time to time require.

 

3.3           Notwithstanding
the foregoing or any other provision of this Agreement the Company shall not be
under any obligation to vest in or assign to the Executive any powers or duties
and may at any time require the Executive to perform:

 

(a)           all
his normal duties;

 

(b)           a
part only of his normal duties and no other duties;

 

(c)           such
duties as it may reasonably require and no others; or 

 

(d)           no
duties whatsoever;

 

3.4           After
notice to terminate the Employment has been given by the Executive or the
Company, the Board may for all or part of the duration of the notice period in
its absolute discretion require the Executive:

 

(a)           to
perform only such duties as it may allocate to the Executive;

 

(b)           not
to perform any of the Duties;

 

(c)           not
to have any contact (other than social contact) with clients of the Company, or
any Group Company;

 

(d)           not
to have any contact other than social contact with such employees or suppliers
of the Company, or any Group Company as the Board shall determine;

 

(e)           to
disclose to the Board any attempted contact (other than social contact) with
him made by any client, employee or supplier with whom the Executive has been
required to have no contact pursuant to this sub-clause;

 

(f)            to
take any accrued holiday entitlement;

 

(g)           not
to enter any premises of the Company or any Group Company

 

provided
always that throughout the period of any such action and subject to the other
provisions of this Agreement the Executive’s salary and contractual benefits
shall not cease to accrue or be paid.

 

3

 

3.5           The
Executive acknowledges that such action taken on the part of the Company under
Clause 3.3 or 3.4 shall not constitute a breach of this Agreement of any kind
whatsoever nor shall the Executive have any claim against the Company in
respect of any such action.

 

3.6           During
any period of garden leave (as provided for under Clause 3.3 or 3.4) the
Executive shall owe a duty of the utmost good faith to the Company, must not
work for any other person or on his own account and shall remain readily
contactable and available to work for the Company, or any Group Company. Should
the Executive work for any other person or on his own account or fail to be available
for work at any time having been requested by the Company to do so, the
Executive’s right to salary and contractual benefits in respect of such period
of non-availability shall be forfeit notwithstanding any other provision of
this Agreement.

 

3.7           The
Executive shall comply, where relevant, with every rule of law, every
requirement of the London Stock Exchange Plc and every regulation of the
Company from time to time in force relating to dealings in shares, debentures
or other securities of any Group Company and, in relation to overseas dealings,
the Executive shall also comply with all laws of the state and all regulations
of the stock exchange, market or dealing system in which such dealings take
place.

 

3.8           The
Executive shall not (and shall procure so far as he is able that his spouse and
children shall not) deal or become or cease to be interested (within the
meaning of Part I, Schedule 13, Companies Act 1985) in any securities of the
Company without complying with any Company rules or guidelines from time to
time relating to securities transactions by directors.

 

4.             Holiday
Entitlement

 

During the
Appointment the Executive shall be entitled to twenty five working days’
holiday (in addition to eight public holidays and four Company holidays) in each
calendar year January to December at full salary to be taken at such time or
times as may be approved by the Board. Holidays not taken can be carried over
to a subsequent year provided that this is agreed by the Board. Upon the
termination of the Appointment by either the Executive or the Company either
the Executive shall be entitled to receive payment in lieu of accrued holidays
in respect of the then current calendar year not taken at that date (provided
that such termination is not pursuant to Clause 12) or the Company shall be
entitled to make a deduction from the Executive’s remuneration in respect of
holidays taken in excess of the accrued entitlement. The accrued holiday
entitlement at the date of termination shall be calculated on the basis of 2
1/12 days holiday for each completed calendar month of service in the then
current calendar year and the amount of the payment in lieu or deduction shall
be

 

4

 

calculated on
the basis of 1/260 of the Executive’s annual salary for each day’s holiday not
taken or taken in excess of the accrued entitlement.

 

5.             Disclosure of
interests

 

5.1           Except
for those appointments already held by the Executive and notified to the Board
at the date of this Agreement or as a representative of the Company or with the
previous approval of the Board the Executive shall not during the Appointment
whether directly or indirectly and whether paid or unpaid be engaged or
concerned in the conduct of any other actual or prospective business or
professions or be or become an employee, agent, partner, consultant or director
of any other company or firm or assist, subject to Clause 5.2, or have any
financial interest in any other such business or profession.

 

5.2           The
Executive shall be permitted to hold shares or securities of a company any of
whose shares or securities are quoted or dealt in on any recognised investment
exchange provided that any such holding shall not exceed five per cent, of the
issued share capital of the company concerned and is held by way of bona fide
investment only (“Investment”).

 

5.3           The
Executive shall disclose to the Board any matters relating to his spouse, their
children, or their parents which, if they applied to the Executive, would
contravene Clause 5.1, to the extent that the Executive has actual knowledge of
such matters.

 

6.             Remuneration and Benefits

 

6.1           During
the Appointment, as remuneration for his services hereunder, the Executive
shall be paid a fixed salary at the rate of £250,000 (Two Hundred and Fifty
Thousand Pounds) per annum with effect from 1 June 2003, and thereafter at such
other rate as may be agreed annually. Such salary shall be inclusive of any
fees or remuneration which he would otherwise be entitled to receive from the
Company or any Associated Company and shall be payable by bank credit transfer
in equal monthly instalments in arrears on the 16th day of each calendar month,
or if the 16th is not a working day, then on the last working day before the
16th of the month.

 

6.2           To
the extent to which the Board exercises its discretion regarding the provision
of any annual bonus scheme, the Executive shall be entitled to participate in
the Company’s annual bonus scheme in accordance with the rules of the scheme
and any performance conditions thereunder as those rules or conditions may be
altered or amended from time to time. The provision of an annual bonus scheme
is at the

 

5

 

absolute
discretion of the Board (who may, subject however to the express terms of such
bonus scheme, suspend or discontinue such bonus scheme at any time in the
interests of the Company whether generally or in relation to the Executive).

 

6.3           To
the extent to which the Board exercises its discretion regarding the provision
of a long term incentive plan, the Executive shall be entitled to participate
in the Company’s long term incentive plan in accordance with the rules of the
plan and any performance conditions thereunder as those rules or conditions may
be altered or amended from time to time. The provision of the long term
incentive plan is at the absolute discretion of the Board (who may, subject
however to the express terms of such plan, suspend or discontinue such a plan
at any time in the interests of the Company whether generally or in relation to
the Executive).

 

6.4           To
the extent to which the Board exercises its discretion regarding the provision
of a share matching scheme, the Executive shall be entitled to participate in
the Company’s share matching scheme in accordance with the rules of the scheme
as those rules may be altered or amended from time to time. The provision of
the share matching scheme is at the absolute discretion of the Board (who may,
subject however to the express terms of such scheme, suspend or discontinue
such a scheme at any time in the interests of the Company whether generally or
in relation to the Executive).

 

6.5           Subject
to the rules of the terms of the scheme as they may be altered or amended, the
Executive shall be entitled to participate in any private medical insurance
cover taken out by the Company for the benefit of its directors and/or senior
employees.

 

6.6           During
his period of employment, the Executive shall be entitled to participate in the
Imperial Tobacco Pension Fund (“the Fund”) an Inland Revenue exempt approved
occupational pension scheme, in accordance with its trust deed and rules as
they may be altered or amended from time to time.

 

6.7           For
the avoidance of doubt for so long as the Appointment continues the Executive
acknowledges and agrees that he will not seek to draw retirement benefits under
the Fund.

 

7.             Expenses

 

The Executive
shall be entitled to be repaid all reasonable travelling, hotel and other
expenses properly authorised by the Board and incurred in or about the
performance of his duties hereunder, which expenses shall be evidenced in such
manner as the Company may reasonably require from time to time.

 

6

 

8.             Company Car

 

8.1           To
assist in the performance of his duties hereunder the Company shall during the
Appointment provide the Executive with a car of a cost and type to be
determined from time to time by the Board and subject to any terms and
conditions which the Company may from time to time impose on the Executive in
relation thereto. Subject thereto the Company shall bear the cost of insuring,
testing, taxing, repairing and maintaining the same and shall reimburse to the
Executive all reasonable running expenses of such car. The Executive shall:

 

(a)           take
good care of the car and ensure that the provisions and conditions of any
policy of insurance relating thereto are observed;

 

(b)           not
permit such car to be taken out of the United Kingdom without the written
consent of the Company; and

 

(c)           return
the car and its keys and all documents relating to it to the Company’s
Registered Office (or to such other location as the Board may reasonably
direct) immediately upon the termination of the Appointment howsoever arising.

 

8.2           the
Executive may at his own election opt out of the above scheme, and in its place
use his own car, and claim a car allowance, the amount of which is set by the
Board from time to time.

 

9.             Confidential Information

 

9.1           The
Executive shall not use or divulge or communicate to any person other than with
proper authority any of the trade secrets or other confidential information of
or relating to the Company or any of the Group Companies (including but not
limited to details of customers, potential customers, consultants, suppliers,
potential suppliers, designs, product details, future product details, prices,
discounting arrangements, specific product applications, existing trade
arrangements, terms of business and those in the course of negotiation,
operating systems, pricing and fee structures, financial information,
inventions, research and development activities) which he may have created,
developed, received or obtained while in the service of the Company or any of
the Group Companies (whether before or after the commencement of the Appointment).
This restriction shall continue to apply after the termination of the
Appointment howsoever arising without limit in point of time including ideas
information or knowledge which may come into the public domain for so long as
the Executive is in a position to use such information more readily than others
who have not worked for the Company.

 

7

 

9.2           The
Executive shall not during the Appointment make otherwise than for the benefit
of the Company any records (whether recorded on paper, computer memory or discs
or otherwise) relating to any matter within the scope of the business of the
Company or any of the Group Companies or concerning any of its or their
dealings or affairs nor either during the Appointment or thereafter use or
permit to be used any such records otherwise than for the benefit of the
Company it being agreed by the parties that all such records (and copies
thereof) in the possession or control of the Executive shall be the property of
the Company and shall be handed over by the Executive to the Company from time
to time and on demand and in any event upon the termination of the Appointment.

 

9.3           The
Executive shall not during the Appointment speak in public or write any article
for publication on any matter connected with or relating to the business of the
Company or any of the Group Companies without first obtaining the approval of
the Board.

 

10.           Inventions and Creative Works

 

10.1         The
Executive acknowledges that because of the nature of his duties and the
particular responsibilities arising as a result of such duties which he owes to
the Company and the Group Companies he has a special obligation to further the
interests of the Company and the Group Companies. In particular the duties of
the Executive shall include reviewing the products and services of the Company
and Group Companies with a view to improving them by new and/or original ideas
and inventions and implementing such improvements.

 

10.2         The
Executive shall promptly disclose to the Company any idea, invention or work
which is relevant to or capable of use in the business of the Company or any of
the Group Companies made by the Executive in the course of his employment
whether or not in the course of his duties. The Executive acknowledges that the
intellectual property rights subsisting or which may in the future subsist in
any such ideas, inventions or works created by him in the course of his
employment will, on creation, vest in and be the exclusive property of the
Company and where the same do not automatically vest as aforesaid, the
Executive shall assign the same to the Company (upon the request and at the
cost of the Company). The Executive hereby irrevocably waives any rights which
he may have in any such ideas, inventions or works which are or have been
conferred upon him by Chapter IV of Part I of the Copyright Designs and Patents
Act 1988 headed “Moral Rights”.

 

10.3         The
Executive hereby irrevocably appoints the Company to be his attorney in his
name and on his behalf to execute and do any such instrument or thing and
generally to use his name for the purpose of giving to the Company or its
nominee the full benefit of the provisions

 

8

 

of this Clause
10 and acknowledges in favour of any third party that a certificate in writing
signed by any Director or Secretary of the Company that any instrument or act
falls within the authority hereby conferred shall be conclusive evidence that
such is the case.

 

11.           Restrictions after Termination

 

11.1         The
Executive shall not for the following periods after the termination of the
Appointment howsoever arising (but excluding repudiatory breach of this
Agreement by the Company) (“Termination”) save with the prior written consent
of the Board which shall not be unreasonably refused directly or indirectly,
either alone or jointly with or on behalf of any person, firm, company or
entity and whether on his own account or as principal, partner, shareholder,
director, employee, consultant or in any other capacity whatsoever:-

 

(a)           For
6 months following Termination, in the Relevant Territory and in competition
with the Company or any of the Relevant Group Companies engage, assist or be
interested in any undertaking which provides services or manufactures products
similar to those provided or manufactured by the Company or any of the Relevant
Group Companies (which shall include the manufacture, sale or distribution of
cigarettes, cigars, cigarette papers and tubes, or other tobacco products) in
the 12 months prior to Termination and with which the Executive was concerned
in the said period of 12 months;

 

(b)           For
6 months following Termination, in the Relevant Territory solicit or interfere
with or endeavour to entice away from the Company or any of the Relevant Group
Companies any person, firm, company or entity who was a customer of the Company
or any of the Relevant Group Companies in the 12 months prior to Termination
and with whom the Executive was concerned or had personal contact in the said
period of 12 months;

 

(c)           For
6 months following Termination, in the Relevant Territory be concerned with the
supply of services/products to any person, firm, company or entity which was a
client/customer of the Company or any of the Relevant Group Companies in the 12
months prior to Termination where such services/products are identical or
similar to or in competition with those services/products supplied by the
Company or any of the Relevant Group Companies (which shall include the
manufacture, sale or distribution of cigarettes, cigars, cigarette papers and
tubes, or other tobacco products) in the said 12 month period, with which
supply the Executive was concerned in the said period of 12 months;

 

9

 

(d)           For
6 months following Termination, in the Relevant Territory solicit or interfere
with or endeavour to entice away from the Company or any of the Relevant Group
Companies any person, firm, company or entity who was a supplier of
services/goods to the Company or any of the Relevant Group Companies which are
necessary or required for the manufacture, sale or distribution of cigarettes,
cigars or other tobacco products in the 12 months prior to Termination and with
whom the Executive was concerned or had personal contact in the said period of
12 months.

 

(e)           For
6 months following Termination, in the Relevant Territory and in competition
with the Company or any Relevant Group Companies be concerned with the receipt
of services/goods from any person, firm, company or entity which was a supplier
of services/goods to the Company or any of the Relevant Group Companies in the
12 months prior to Termination where such services/goods are identical or
similar to or in competition with those services/goods supplied to the Company
or any of the Relevant Group Companies (which shall include the manufacture,
sale or distribution of cigarettes, cigars, cigarette papers and tubes, or
other tobacco products) in the said period of 12 months and with which supply
the Executive was concerned in the said period of 12 months;

 

(f)            For
6 months following Termination, offer to employ or engage or solicit the
employment or engagement of any person who immediately prior to the date of
termination was a senior employee or consultant of the Company or any of the
Relevant Group Companies (whether or not such person would commit any breach of
his contract of employment or engagement by reason of leaving the service of
such company); or

 

(g)           At
any time following Termination represent himself as being in any way connected
with or interested in the business of the Company or any of the Relevant Group
Companies.

 

11.2         Each
of the obligations contained in this Clause 11.1 constitutes an entire,
separate and independent restriction on the Executive, despite the fact that
they may be contained in the same phrase and if any part is found to be
unenforceable the remainder will remain valid and enforceable.

 

11.3         While
the restrictions in Clause 11.1 are considered by the parties to be fair and
reasonable in the circumstances, it is agreed that if any such restrictions
should be adjudged to be void or ineffective for any reason but would be
treated as valid and effective if part of the wording thereof were deleted or
the periods thereof reduced or the area thereof

 

10

 

reduced in
scope, the said restrictions shall apply with such modifications as will be
necessary to make them valid and effective.

 

11.4         The
Executive agrees that he will at the request and cost of the Company enter into
a direct agreement with any of the Group Companies under which he will accept
restrictions corresponding to the restrictions contained in Clause 11.1 (or
such as will be appropriate in the circumstances) in relation to such Group Company.

 

11.5         The
provisions of this Clause will not prevent the Executive from holding an
Investment.

 

11.6         For
the purposes of this Clause:-

 

(a)           a
“Relevant Group Company” shall mean any of the Group Companies for which the
Executive has performed services or in which he has held office during the 12
months immediately preceding Termination; and

 

(b)           “the
Relevant Territory” shall mean England, Scotland, Wales, Northern Ireland, the
Channel Islands, the Isle of Man, Eire, the Federal Republic of Germany and any
other country where the Group Companies have manufacturing operations or
significant sales (accounting for more than 1% of total turnover of Group
Companies) in the 12 months prior to Termination which shall comprise the area
constituting the market of the Company or any of the Relevant Group Companies
for products and services with which the Executive shall have been concerned in
the period of 12 months prior to Termination (which shall include the
manufacture, sale or distribution of cigarettes, cigars, cigarette papers and
tubes, or other tobacco products).

 

The Company
reserves the right to make such additions to/deletions from the list of
countries constituting the Relevant Territory as are reasonable in order to
define the area constituting the relevant market at the date of Termination and
such list will be discussed by the parties and issued to the Executive as soon
as is reasonably practicable following the date of Termination.

 

12.           Termination by Events of Default

 

The
Appointment shall be subject to summary termination at any time by the Company
by notice in writing if the Executive shall have committed any serious breach
or (after warning in writing) any repeated or continued material breach of his
obligations hereunder or in the reasonable opinion of the Board shall have
failed to perform his duties to a satisfactory standard or shall have been
guilty of any act of dishonesty or serious misconduct or any conduct which in
the

 

11

 

reasonable
opinion of the Board tends to bring himself, the Company or any of the Group
Companies into disrepute or shall be declared bankrupt or shall compound with
his creditors or shall become prohibited by law from being a director. Any
delay by the Company in exercising such right to terminate shall not constitute
a waiver thereof.

 

13.           Incapacity

 

If the
Executive shall be incapacitated during the Appointment by ill-health or
accident from performing his duties hereunder for a period of twelve months or
more the Company may by written notice to the Executive forthwith (or as from a
future date specified in the notice) discontinue payment in whole or part of
the Executive’s remuneration under Clause 6 hereof until such incapacity shall
cease or (whether or not his remuneration shall have been discontinued as
aforesaid) terminate the Appointment. Subject as aforesaid (and provided the
Executive complies with the Company’s rules on notification and evidence of
absence due to illness or injury) the said remuneration shall continue to be
payable to the Executive under Clause 6 notwithstanding such incapacity but the
Company shall be entitled to set off or deduct therefrom the amount of any
Statutory Sick Pay or other benefit to which the Executive is entitled under
Social Security legislation for the time being in force.

 

14.           Obligations upon Termination

 

Upon the
termination of the Appointment howsoever arising the Executive shall:

 

14.1         At
any time or from time to time thereafter upon the request of the Company,
resign without claim for compensation from all offices held in the Company or
any of the Group Companies, which for the avoidance of doubt will also include
any position as a member of the Vorstand or member of the Supervisory Board at
Reemtsma, and from membership of any organisation acquired by reason of or in
connection with the Appointment and should he fail to do so the Company is
hereby irrevocably appointed to be the Executive’s Attorney in his name and on
his behalf to execute any document and to do any things necessary or requisite
to give effect to this sub-clause;

 

14.2         Deliver
to the Board all documents (including, but not limited to, correspondence,
lists of clients or customers, notes, memoranda, plans, drawings and other
documents of whatsoever nature and all copies thereof) made or compiled or
acquired by the Executive during the Appointment and or as an employee of any
of the Group Companies prior to the commencement of the Appointment concerning
the business, finances or affairs of the Company or any of the Group Companies
or their customers.

 

12

 

15.           Reconstruction and Amalgamation

 

If at any time
the Executive’s employment is terminated in connection with any reconstruction
or amalgamation of the Company or any of the Group Companies whether by winding
up or otherwise and the Executive receives an offer on terms which (considered
in their entirety) are not less favourable to any material extent than the
terms of this Agreement from a company involved in or resulting from such
reconstruction or amalgamation the Executive shall have no claim whatsoever
against the Company or any such company arising out of or connected with such
termination and such reconstruction or amalgamation shall not be treated as involving
a change of control.

 

16.           Notices

 

Any notice to
be given hereunder shall be in writing. 
Notices may be given by either party by personal delivery or post or by
fax addressed to the other party at (in the case of the Company) its registered
office for the time being and (in the case of the Executive) his last known
address and any such notice given by letter or fax shall be deemed to have been
served at the time at which the letter was delivered personally or transmitted
or if sent by post would be delivered in the ordinary course of post.

 

17.           Previous Contracts

 

This Agreement
is in substitution for any previous contract of service between the Company or
any of the Group Companies and the Executive which shall be deemed to have been
terminated by mutual consent as from the commencement of the Appointment.  No purported variation of this Agreement
shall be effective unless it is in writing and signed by or on behalf of each
of the parties.

 

18.           Third Parties

 

Unless
expressly provided in this Agreement, no term of this Agreement is enforceable
pursuant to the Contracts (Rights of Third Parties) Act 1999 by any third
party.

 

19.           Data Protection

 

The Executive
consents to the holding and processing by the Company or any other Group
Company of personal data (including, where appropriate, sensitive personal
data) relating to the Executive for the purposes of personnel or pensions
administration, employee management or compliance with any laws or regulations
applicable to the Company, any Group Company or its or their business.

 

13

 

20.           Proper Law

 

This Agreement
shall be governed and construed in all respects in accordance with English law.

 

21.           Construction

 

21.1         The headings in this
Agreement are inserted for convenience only and shall not affect its
construction.

 

21.2         Any
reference to a statutory provision shall be construed as a reference to any
statutory modification or re-enactment thereof (whether before or after the
date hereof) for the time being in force.

 

22.           Statutory Information and the Schedule

 

The Schedule
hereto (in addition to this Agreement) constitutes a written statement as at
the date hereof of the terms of employment of the Executive in compliance with
the provisions of the Employment Rights Act 1996; it does not form part of the
contract of employment and may be varied by the Company by notice in writing to
the Executive of any changes applicable to his employment.

 

 

	
  Executed and Delivered by the said

  	
  )

  	
   

  
	
  David Cresswell

  	
  )

  	
   

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed and Delivered by the said

  	
  )

  
	
  Imperial Tobacco Group PLC

  	
  )

  
	
  by the
  signatures of a Director

  	
  )

  
	
  and the
  Secretary:

  	
  )

  

 

 

	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Secretary

  

 

14

 

The Schedule

 

1.             The
Executive has been continuously in the employment of the Company (including
reckonable service with any of the Group Companies) since 31 July 1961.

 

2.             Rate of Remuneration
and the intervals at which it is paid are contained in Clause 6.

 

3.             There are no specific
terms and conditions relating to hours of work except as provided in Clause 3.1

 

4.             The
terms and conditions relating to holidays are contained in Clause 4 and those
relating to sickness are contained in Clause 13.

 

5.             Particulars as to the
length of notice to terminate are contained in Clause 2.

 

6.             Particulars as to the
work for which the Executive is employed are contained in Clause 3.

 

7.             Subject
to Clause 3.2 the Executive’s principal place of work at the date of this
Schedule is the Company’s premises at Thane Road, Nottingham NG7 5QQ.

 

8.             There
are no disciplinary rules applicable to the Executive except as provided in
this Agreement and if the Executive is dissatisfied with any disciplinary
decision he should apply orally or in writing to the Chairman of the Board.

 

9.             Any
application for the purpose of seeking redress of any grievance relating to the
Executive’s employment should be made either orally or in writing to the
Chairman of the Company and if still unresolved after ten days to the
non-executive directors of the Board.

 

10.           A contracting-out
certificate is in force in respect of the Executive’s employment.

 

11.           Details of the
Executive’s work outside the UK are contained in Clause 3.2.

 

12.           There are no collective
agreements which are applicable to the Appointment.

 

15

 

Dated 1 October 2003

 

 

(1) Imperial Tobacco Group PLC

 

- and -

 

(2) Bruce Charles Davidson

 

 

 

EXECUTIVE SERVICE AGREEMENT

 

 

 

An Agreement made the 1 day of
OCTOBER 2003 between:-

 

(1)           Imperial Tobacco Group PLC (Company Number:
3236483) whose registered office is situated at PO Box 244, Upton Road, Bristol
BS99 7UJ (“the Company”); and

 

(2)           Bruce Charles Davidson of 30 Cramond Road
North, Edinburgh EH4 6JE (“the Executive”)

 

Witnesses
as follows:

 

1.             Definitions

 

In this
Agreement unless the context otherwise requires:

 

1.1           “the Board” means the
Board of Directors of the Company;

 

1.2           “Group
Companies” means the Company and all subsidiary and associated companies from
time to time of the Company which shall include, for the avoidance of doubt,
Imperial Tobacco Germany Management GmbH;

 

1.3           “associated
companies” means a company which falls to be treated as such for the purposes
of Statement of Standard Accounting Practice No. 1 of the Institute of
Chartered Accountants in England and Wales;

 

1.4           “subsidiary” has the
meaning ascribed thereto in Section 736 of the Companies Act 1985 as amended;

 

1.5           “Reemtsma” means
Reemtsma Holding GmbH & Co. KG, Reemtsma Cigarettenfabriken GmbH and their
subsidiaries;

 

1.6           References to Clauses
are to clauses so numbered in this Agreement.

 

2.             Term and Appointment

 

2.1           The
Company shall engage the Executive and the Executive shall serve the Company as
hereinafter provided (“the Appointment”). 
The Appointment shall commence on 1 October 2003, and shall continue
subject as hereinafter provided in this Agreement unless and until terminated
by either party giving to the other not less than 12 months’ prior notice in
writing.  For the avoidance of doubt,
the Appointment shall automatically terminate when the Executive reaches the
age of 60 years.

 

2.2           Where
notice is served to terminate the Appointment whether by the Company or the
Executive the Company shall be entitled in its absolute discretion to terminate
the Appointment forthwith by paying to the Executive salary in lieu of notice
and if the Executive accepts

 

1

 

such payment
it shall be deemed to be in full and final satisfaction of the Executive’s
claims under this Agreement.  For the
avoidance of doubt, no additional compensation will be payable in respect of
the termination of any other position held within the Group, e.g. as a member
of the Vorstand or member of the Supervisory Board at Reemtsma.

 

3.             Duties

 

3.1           During
the Appointment the Executive shall devote the whole of his time and attention
to the duties assigned to him and shall well and faithfully serve the Company
and use his best endeavours to promote the interests of the Company and the
Group Companies and shall obey all reasonable and lawful directions given to
him by or under the authority of the Board and subject thereto the Executive
shall perform the duties of Sales and Marketing Director.

 

3.2           The Executive may be
required in pursuance of his duties hereunder:

 

(a)           to
perform services not only for the Company but also for any of the Group
Companies and without further remuneration (except as otherwise agreed) to
accept such offices in any of the Group Companies as the Company may from time
to time reasonably require and if the Executive shall cease to be a director of
the Company for any reason then he may at the will of the Company continue as
an employee;

 

(b)           to
work at such places within the United Kingdom as the Company may require, the
Company reimbursing the Executive in respect of all reasonable relocation
expenses; and

 

(c)           to
travel to such places whether in or outside the United Kingdom by such means
and on such occasions as the Company may from time to time require.

 

3.3           Notwithstanding
the foregoing or any other provision of this Agreement the Company shall not be
under any obligation to vest in or assign to the Executive any powers or duties
and may at any time require the Executive to perform:

 

(a)           all his normal duties;

 

(b)           a part only of his
normal duties and no other duties;

 

(c)           such duties as it may
reasonably require and no others; or

 

(d)           no duties whatsoever;

 

2

 

3.4           After
notice to terminate the Employment has been given by the Executive or the
Company, the Board may for all or part of the duration of the notice period in
its absolute discretion require the Executive:

 

(a)           to perform only such
duties as it may allocate to the Executive;

 

(b)           not to perform any of
the Duties;

 

(c)           not to have any contact
(other than social contact) with clients of the Company, or any Group Company;

 

(d)           not
to have any contact (other than social contact) with such employees or
suppliers of the Company, or any Group Company as the Board shall determine;

 

(e)           to
disclose to the Board any attempted contact (other than social contact) with
him made by any client, employee or supplier with whom the Executive has been
required to have no contact pursuant to this sub-clause;

 

(f)            to
take any accrued holiday entitlement;

 

(g)           not
to enter any premises of the Company or any Group Company

 

provided
always that throughout the period of any such action and subject to the other
provisions of this Agreement the Executive’s salary and contractual benefits
shall not cease to accrue or be paid.

 

3.5           The
Executive acknowledges that such action taken on the part of the Company under
Clause 3.3 or 3.4 shall not constitute a breach of this Agreement of any kind
whatsoever nor shall the Executive have any claim against the Company in
respect of any such action.

 

3.6           During
any period of garden leave (as provided for under Clause 3.3 or 3.4) the
Executive shall owe a duty of the utmost good faith to the Company, must not
work for any other person or on his own account and shall remain readily
contactable and available to work for the Company, or any Group Company.  Should the Executive work for any other
person or on his own account or fail to be available for work at any time
having been requested by the Company to do so, the Executive’s right to salary
and contractual benefits in respect of such period of non-availability shall be
forfeit notwithstanding any other provision of this Agreement.

 

3.7           The
Executive shall comply, where relevant, with every rule of law, every
requirement of the United Kingdom Listing Authority and every

 

3

 

regulation of
the Company from time to time in force relating to dealings in shares,
debentures or other securities of any Group Company and, in relation to
overseas dealings, the Executive shall also comply with all laws of the state
and all regulations of the stock exchange, market or dealing system in which
such dealings take place.

 

3.8           The
Executive shall not (and shall procure so far as he is able that his spouse and
children shall not) deal or become or cease to be interested (within the
meaning of Part I, Schedule 13, Companies Act 1985) in any securities of the
Company without complying with any Company rules or guidelines from time to
time relating to securities transactions by directors.

 

4.             Holiday Entitlement

 

During the
Appointment the Executive shall be entitled to twenty five working days’
holiday (in addition to eight public holidays and four Company holidays) in
each calendar year January to December at full salary to be taken at such time
or times as may be approved by the Board. 
Holidays not taken can be carried over to a subsequent year provided that
this is agreed by the Board.  Upon the termination
of the Appointment by either the Executive or the Company either the Executive
shall be entitled to receive payment in lieu of accrued holidays in respect of
the then current calendar year not taken at that date (provided that such
termination is not pursuant to Clause 12) or the Company shall be entitled to
make a deduction from the Executive’s remuneration in respect of holidays taken
in excess of the accrued entitlement. 
The accrued holiday entitlement at the date of termination shall be calculated
on the basis of 2 1/12 days holiday for each completed calendar month of
service in the then current calendar year and the amount of the payment in lieu
or deduction shall be calculated on the basis of 1/260 of the Executive’s
annual salary for each day’s holiday not taken or taken in excess of the
accrued entitlement.

 

5.             Disclosure of interests

 

5.1           Except
for those appointments already held by the Executive and notified to the Board
at the date of this Agreement or as a representative of the Company or with the
previous approval of the Board the Executive shall not during the Appointment
whether directly or indirectly and whether paid or unpaid be engaged or
concerned in the conduct of any other actual or prospective business or
professions or be or become an employee, agent, partner, consultant or director
of any other company or firm or assist, subject to Clause 5.2, or have any
financial interest in any other such business or profession.

 

5.2           The
Executive shall be permitted to hold shares or securities of a company any of
whose shares or securities are quoted or dealt in on 

 

4

 

any recognised
investment exchange provided that any such holding shall not exceed five per
cent, of the issued share capital of the company concerned and is held by way
of bona fide investment only (“Investment”).

 

5.3           The
Executive shall disclose to the Board any matters relating to his spouse, their
children, or their parents which, if they applied to the Executive, would
contravene Clause 5.1, to the extent that the Executive has actual knowledge of
such matters.

 

6.             Remuneration and Benefits

 

6.1           During
the Appointment, as remuneration for his services hereunder, the Executive
shall be paid a fixed salary at the rate of £300,000 (Three Hundred Thousand Pounds) per annum with effect
from 1 October 2003, and thereafter at such other rate as may be agreed
annually. Such salary shall be inclusive of any fees or remuneration which he
would otherwise be entitled to receive from the Company or any Associated
Company and shall be payable by bank credit transfer in equal monthly
instalments in arrears on the 16th day of each calendar month, or if the 16th
is not a working day, then on the last working day before the 16th of the
month.

 

6.2           To
the extent to which the Board exercises its discretion regarding the provision
of any annual bonus scheme, the Executive shall be entitled to participate in
the Company’s annual bonus scheme in accordance with the rules of the scheme
and any performance conditions thereunder as those rules or conditions may be
altered or amended from time to time. The provision of an annual bonus scheme
is at the absolute discretion of the Board (who may, subject however to the
express terms of such bonus scheme, suspend or discontinue such bonus scheme at
any time in the interests of the Company whether generally or in relation to
the Executive).

 

6.3           To
the extent to which the Board exercises its discretion regarding the provision
of a long term incentive plan, the Executive shall be entitled to participate
in the Company’s long term incentive plan in accordance with the rules of the
plan and any performance conditions thereunder as those rules or conditions may
be altered or amended from time to time. The provision of the long term
incentive plan is at the absolute discretion of the Board (who may, subject
however to the express terms of such plan, suspend or discontinue such a plan
at any time in the interests of the Company whether generally or in relation to
the Executive).

 

6.4           To
the extent to which the Board exercises its discretion regarding the provision
of a share matching scheme, the Executive shall be entitled to participate in
the Company’s share matching scheme in accordance with the rules of the scheme
as those rules may be altered or amended

 

5

 

from time to
time. The provision of the share matching scheme is at the absolute discretion
of the Board (who may, subject however to the express terms of such scheme,
suspend or discontinue such a scheme at any time in the interests of the
Company whether generally or in relation to the Executive).

 

6.5           Subject
to the rules of the terms of the scheme as they may be altered or amended, the
Executive shall be entitled to participate in any private medical insurance
cover taken out by the Company for the benefit of its directors and/or senior
employees.

 

6.6           During
his period of employment, the Executive shall be entitled to participate in the
Imperial Tobacco Pension Fund (“the Fund”) an Inland Revenue exempt approved
occupational pension scheme, in accordance with its trust deed and rules as
they may be altered or amended from time to time.

 

7.             Expenses

 

The Executive
shall be entitled to be repaid all reasonable travelling, hotel and other
expenses properly authorised by the Board and incurred in or about the
performance of his duties hereunder, which expenses shall be evidenced in such
manner as the Company may reasonably require from time to time.

 

8.             Company Car

 

8.1           To
assist in the performance of his duties hereunder the Company shall during the
Appointment provide the Executive with a car of a cost and type to be
determined from time to time by the Board and subject to any terms and
conditions which the Company may from time to time impose on the Executive in
relation thereto. Subject thereto the Company shall bear the cost of insuring,
testing, taxing, repairing and maintaining the same and shall reimburse to the
Executive all reasonable running expenses of such car. The Executive shall:

 

(a)           take
good care of the car and ensure that the provisions and conditions of any
policy of insurance relating thereto are observed;

 

(b)           not
permit such car to be taken out of the United Kingdom without the written consent
of the Company; and

 

(c)           return
the car and its keys and all documents relating to it to the Company’s
Registered Office (or to such other location as the Board may reasonably
direct) immediately upon the termination of the Appointment howsoever arising.

 

6

 

8.2           The Executive may at his own election opt
out of the above scheme, and in its place use his own car, and claim a car
allowance, the amount of which is set by the Board from time to time.

 

9.             Confidential
Information

 

9.1           The Executive shall not use or divulge or
communicate to any person other than with proper authority any of the trade
secrets or other confidential information of or relating to the Company or any
of the Group Companies (including but not limited to details of customers,
potential customers, consultants, suppliers, potential suppliers, designs,
product details, future product details, prices, discounting arrangements,
specific product applications, existing trade arrangements, terms of business
and those in the course of negotiation, operating systems, pricing and fee
structures, financial information, inventions, research and development
activities) which he may have created, developed, received or obtained while in
the service of the Company or any of the Group Companies (whether before or
after the commencement of the Appointment). 
This restriction shall continue to apply after the termination of the
Appointment howsoever arising without limit in point of time including ideas
information or knowledge which may come into the public domain for so long as
the Executive is in a position to use such information more readily than others
who have not worked for the Company.

 

9.2           The Executive shall not during the
Appointment make otherwise than for the benefit of the Company any records
(whether recorded on paper, computer memory or discs or otherwise) relating to
any matter within the scope of the business of the Company or any of the Group
Companies or concerning any of its or their dealings or affairs nor either
during the Appointment or thereafter use or permit to be used any such records
otherwise than for the benefit of the Company it being agreed by the parties
that all such records (and copies thereof) in the possession or control of the
Executive shall be the property of the Company and shall be handed over by the
Executive to the Company from time to time and on demand and in any event upon
the termination of the Appointment.

 

9.3           The Executive shall not during the Appointment
speak in public or write any article for publication on any matter connected
with or relating to the business of the Company or any of the Group Companies
without first obtaining the approval of the Board.

 

10.           Inventions
and Creative Works

 

10.1         The Executive acknowledges that because of the
nature of his duties and the particular responsibilities arising as a result of
such duties which he owes to the Company and the Group Companies he has a
special obligation to further the interests of the Company and the

 

7

 

Group
Companies.  In particular the duties of
the Executive shall include reviewing the products and services of the Company
and Group Companies with a view to improving them by new and/or original ideas
and inventions and implementing such improvements.

 

10.2         The Executive shall promptly disclose to the
Company any idea, invention or work which is relevant to or capable of use in
the business of the Company or any of the Group Companies made by the Executive
in the course of his employment whether or not in the course of his
duties.  The Executive acknowledges that
the intellectual property rights subsisting or which may in the future subsist
in any such ideas, inventions or works created by him in the course of his
employment will, on creation, vest in and be the exclusive property of the
Company and where the same do not automatically vest as aforesaid, the
Executive shall assign the same to the Company (upon the request and at the
cost of the Company).  The Executive
hereby irrevocably waives any rights which he may have in any such ideas,
inventions or works which are or have been conferred upon him by Chapter IV of
Part I of the Copyright Designs and Patents Act 1988 headed “Moral Rights”.

 

10.3         The Executive hereby irrevocably appoints the
Company to be his attorney in his name and on his behalf to execute and do any
such instrument or thing and generally to use his name for the purpose of
giving to the Company or its nominee the full benefit of the provisions of this
Clause 10 and acknowledges in favour of any third party that a certificate in
writing signed by any Director or Secretary of the Company that any instrument
or act falls within the authority hereby conferred shall be conclusive evidence
that such is the case.

 

11.           Restrictions
after Termination

 

11.1         The Executive shall not for the following
periods after the termination of the Appointment howsoever arising (but
excluding repudiatory breach of this Agreement by the Company) (“Termination”)
save with the prior written consent of the Board which shall not be
unreasonably refused directly or indirectly, either alone or jointly with or on
behalf of any person, firm, company or entity and whether on his own account or
as principal, partner, shareholder, director, employee, consultant or in any
other capacity whatsoever:-

 

(a)           For 6 months following Termination, in the
Relevant Territory and in competition with the Company or any of the Relevant
Group Companies engage, assist or be interested in any undertaking which
provides services or manufactures products similar to those provided or
manufactured by the Company or any of the Relevant Group Companies (which shall
include the manufacture, sale or distribution of cigarettes, cigars, cigarette
papers and tubes, or other tobacco products) in the 12 months

 

8

 

prior to
Termination and with which the Executive was concerned in the said period of 12
months;

 

(b)           For 6 months following Termination, in the
Relevant Territory solicit or interfere with or endeavour to entice away from
the Company or any of the Relevant Group Companies any person, firm, company or
entity who was a customer of the Company or any of the Relevant Group Companies
in the 12 months prior to Termination and with whom the Executive was concerned
or had personal contact in the said period of 12 months;

 

(c)           For 6 months following Termination, in the
Relevant Territory be concerned with the supply of services/products to any
person, firm, company or entity which was a client/customer of the Company or
any of the Relevant Group Companies in the 12 months prior to Termination where
such services/products are identical or similar to or in competition with those
services/products supplied by the Company or any of the Relevant Group
Companies (which shall include the manufacture, sale or distribution of
cigarettes, cigars, cigarette papers and tubes, or other tobacco products) in
the said 12 month period, with which supply the Executive was concerned in the
said period of 12 months;

 

(d)           For 6 months following Termination, in the
Relevant Territory solicit or interfere with or endeavour to entice away from
the Company or any of the Relevant Group Companies any person, firm, company or
entity who was a supplier of services/goods to the Company or any of the
Relevant Group Companies which are necessary or required for the manufacture,
sale or distribution of cigarettes, cigars or other tobacco products in the 12
months prior to Termination and with whom the Executive was concerned or had
personal contact in the said period of 12 months.

 

(e)           For 6 months following Termination, in the
Relevant Territory and in competition with the Company or any Relevant Group
Companies be concerned with the receipt of services/goods from any person,
firm, company or entity which was a supplier of services/goods to the Company
or any of the Relevant Group Companies in the 12 months prior to Termination
where such services/goods are identical or similar to or in competition with
those services/goods supplied to the Company or any of the Relevant Group
Companies (which shall include the manufacture, sale or distribution of
cigarettes, cigars, cigarette papers and tubes, or other tobacco products) in
the said period of 12 months and with which supply the Executive was concerned
in the said period of 12 months;

 

9

 

(f)            For 6 months following Termination, offer
to employ or engage or solicit the employment or engagement of any person who
immediately prior to the date of termination was a senior employee or
consultant of the Company or any of the Relevant Group Companies (whether or
not such person would commit any breach of his contract of employment or
engagement by reason of leaving the service of such company); or 

 

(g)           At any time following Termination represent
himself as being in any way connected with or interested in the business of the
Company or any of the Relevant Group Companies.

 

11.2         Each of the obligations contained in this
Clause 11.1 constitutes an entire, separate and independent restriction on the
Executive, despite the fact that they may be contained in the same phrase and
if any part is found to be unenforceable the remainder will remain valid and enforceable.

 

11.3         While the restrictions in Clause 11.1 are
considered by the parties to be fair and reasonable in the circumstances, it is
agreed that if any such restrictions should be adjudged to be void or
ineffective for any reason but would be treated as valid and effective if part
of the wording thereof were deleted or the periods thereof reduced or the area
thereof reduced in scope, the said restrictions shall apply with such
modifications as will be necessary to make them valid and effective.

 

11.4         The Executive agrees that he will at the
request and cost of the Company enter into a direct agreement with any of the
Group Companies under which he will accept restrictions corresponding to the
restrictions contained in Clause 11.1 (or such as will be appropriate in the
circumstances) in relation to such Group Company.

 

11.5         The provisions of this Clause will not prevent
the Executive from holding an Investment.

 

11.6         For the purposes of this Clause:-

 

(a)           a “Relevant Group Company” shall mean any of
the Group Companies for which the Executive has performed services or in which
he has held office during the 12 months immediately preceding Termination; and

 

(b)           “the Relevant Territory” shall mean England,
Scotland, Wales, Northern Ireland, the Channel Islands, the Isle of Man, Eire,
the Federal Republic of Germany and any other country where the Group Companies
have manufacturing operations or significant sales (accounting for more than 1%
of total turnover of Group Companies) in the 12 months prior to Termination
which shall comprise the area constituting the market of the Company or

 

10

 

any of the
Relevant Group Companies for products and services with which the Executive
shall have been concerned in the period of 12 months prior to Termination
(which shall include the manufacture, sale or distribution of cigarettes,
cigars, cigarette papers and tubes, or other tobacco products).

 

The Company
reserves the right to make such additions to/deletions from the list of
countries constituting the Relevant Territory as are reasonable in order to
define the area constituting the relevant market at the date of Termination and
such list will be discussed by the parties and issued to the Executive as soon
as is reasonably practicable following the date of Termination.

 

12.           Termination by Events of Default

 

The
Appointment shall be subject to summary termination at any time by the Company
by notice in writing if the Executive shall have committed any serious breach
or (after warning in writing) any repeated or continued material breach of his
obligations hereunder or in the reasonable opinion of the Board shall have
failed to perform his duties to a satisfactory standard or shall have been
guilty of any act of dishonesty or serious misconduct or any conduct which in
the reasonable opinion of the Board tends to bring himself, the Company or any
of the Group Companies into disrepute or shall be declared bankrupt or shall
compound with his creditors or shall become prohibited by law from being a
director.  Any delay by the Company in
exercising such right to terminate shall not constitute a waiver thereof.

 

13.           Incapacity

 

If the
Executive shall be incapacitated during the Appointment by ill-health or
accident from performing his duties hereunder for a period of twelve months or
more the Company may by written notice to the Executive forthwith (or as from a
future date specified in the notice) discontinue payment in whole or part of
the Executive’s remuneration under Clause 6 hereof until such incapacity shall
cease or (whether or not his remuneration shall have been discontinued as
aforesaid) terminate the Appointment. 
Subject as aforesaid (and provided the Executive complies with the
Company’s rules on notification and evidence of absence due to illness or
injury) the said remuneration shall continue to be payable to the Executive
under Clause 6 notwithstanding such incapacity but the Company shall be
entitled to set off or deduct therefrom the amount of any Statutory Sick Pay or
other benefit to which the Executive is entitled under Social Security
legislation for the time being in force.

 

11

 

14.           Obligations upon Termination

 

Upon the
termination of the Appointment howsoever arising the Executive shall:

 

14.1         At
any time or from time to time thereafter upon the request of the Company,
resign without claim for compensation from all offices held in the Company or
any of the Group Companies, which for the avoidance of doubt will also include
any position as a member of the Vorstand or member of the Supervisory Board at
Reemtsma, and from membership of any organisation acquired by reason of or in
connection with the Appointment and should he fail to do so the Company is
hereby irrevocably appointed to be the Executive’s Attorney in his name and on
his behalf to execute any document and to do any things necessary or requisite
to give effect to this sub-clause;

 

14.2         Deliver
to the Board all documents (including, but not limited to, correspondence,
lists of clients or customers, notes, memoranda, plans, drawings and other
documents of whatsoever nature and all copies thereof) made or compiled or
acquired by the Executive during the Appointment and or as an employee of any
of the Group Companies prior to the commencement of the Appointment concerning
the business, finances or affairs of the Company or any of the Group Companies
or their customers.

 

15.           Reconstruction and Amalgamation

 

If at any time
the Executive’s employment is terminated in connection with any reconstruction
or amalgamation of the Company or any of the Group Companies whether by winding
up or otherwise and the Executive receives an offer on terms which (considered
in their entirety) are not less favourable to any material extent than the
terms of this Agreement from a company involved in or resulting from such
reconstruction or amalgamation the Executive shall have no claim whatsoever
against the Company or any such company arising out of or connected with such
termination and such reconstruction or amalgamation shall not be treated as
involving a change of control.

 

16.           Notices

 

Any notice to
be given hereunder shall be in writing. 
Notices may be given by either party by personal delivery or post or by
fax addressed to the other party at (in the case of the Company) its registered
office for the time being and (in the case of the Executive) his last known
address and any such notice given by letter or fax shall be deemed to have been
served at the time at which the letter was delivered personally or transmitted
or if sent by post would be delivered in the ordinary course of post.

 

12

 

17.           Previous Contracts

 

This Agreement
is in substitution for any previous contract of service between the Company or
any of the Group Companies and the Executive which shall be deemed to have been
terminated by mutual consent as from the commencement of the Appointment. No
purported variation of this Agreement shall be effective unless it is in writing
and signed by or on behalf of each of the parties.

 

18.           Third Parties

 

Unless
expressly provided in this Agreement, no term of this Agreement is enforceable
pursuant to the Contracts (Rights of Third Parties) Act 1999 by any third
party.

 

19.           Data Protection

 

The Executive
consents to the holding and processing by the Company or any other Group
Company of personal data (including, where appropriate, sensitive personal
data) relating to the Executive for the purposes of personnel or pensions
administration, employee management or compliance with any laws or regulations
applicable to the Company, any Group Company or its or their business.

 

20.           Proper Law

 

This Agreement
shall be governed and construed in all respects in accordance with English law.

 

21.           Construction

 

21.1         The headings in this
Agreement are inserted for convenience only and shall not affect its
construction.

 

21.2         Any
reference to a statutory provision shall be construed as a reference to any
statutory modification or re-enactment thereof (whether before or after the
date hereof) for the time being in force.

 

22.           Statutory Information and the Schedule

 

The Schedule
hereto (in addition to this Agreement) constitutes a written statement as at
the date hereof of the terms of employment of the Executive in compliance with
the provisions of the Employment Rights Act 1996; it does not form part of the
contract of employment and may be varied by the Company by notice in writing to
the Executive of any changes applicable to his employment.

 

13

 

	
  Executed and Delivered by the said

  	
  )

  
	
  Bruce Charles Davidson

  	
  )

  	
   

  	
   

  
	
  in the
  presence of:

  	
  )

  

 

 

	
  Executed and Delivered by the said

  	
  )

  
	
  Imperial Tobacco Group PLC

  	
  )

  
	
  by the
  signatures of a Director

  	
  )

  
	
  and the
  Secretary:

  	
  )

  

 

	
   

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  

 

14

 

The Schedule

 

 

1.             The
Executive has been continuously in the employment of the Company (including
reckonable service with any of the Group Companies) since 2 February 1998.

 

2.             Rate of Remuneration
and the intervals at which it is paid are contained in Clause 6.

 

3.             There are no specific
terms and conditions relating to hours of work except as provided in Clause 3.1

 

4.             The
terms and conditions relating to holidays are contained in Clause 4 and those
relating to sickness are contained in Clause 13.

 

5.             Particulars as to the
length of notice to terminate are contained in Clause 2.

 

6.             Particulars as to the
work for which the Executive is employed are contained in Clause 3.

 

7.             Subject
to Clause 3.2 the Executive’s principal place of work at the date of this
Schedule is the Company’s offices at Farnham House, Farham Royal, Slough, SL2
3RQ.

 

8.             There
are no disciplinary rules applicable to the Executive except as provided in
this Agreement and if the Executive is dissatisfied with any disciplinary
decision he should apply orally or in writing to the Chairman of the Board.

 

9.             Any
application for the purpose of seeking redress of any grievance relating to the
Executive’s employment should be made either orally or in writing to the
Chairman of the Company and if still unresolved after ten days to the
non-executive directors of the Board.

 

10.           A contracting-out
certificate is in force in respect of the Executive’s employment.

 

11.           Details of the
Executive’s work outside the UK are contained in Clause 3.2.

 

12.           There are no collective
agreements which are applicable to the Appointment.

 

15

 

Dated
30 May 2003

 

 

(1)
Imperial Tobacco Group PLC

 

-
and -

 

(2)
Frank Rogerson

 

 

_____________________________

 

EXECUTIVE
SERVICE AGREEMENT

_____________________________

 

 

An Agreement made the 30 day of May 2003
between:-

 

(1)           Imperial Tobacco Group PLC (Company Number: 3236483) whose registered
office is situated at PO Box 244, Upton Road, Bristol BS99 7UJ (“the Company”);
and

 

(2)           Frank Rogerson of Daneshill House, Box, Stroud, Gloucestershire GL6 9HD (“the
Executive”).

 

Witnesses
as follows:

 

1.             Definitions

 

                In this Agreement unless the context
otherwise requires:

 

1.1           “the Board” means the Board of Directors of the Company;

 

1.2           “Group
Companies” means the Company and all subsidiary and associated companies from
time to time of the Company which shall include, for the avoidance of doubt,
Imperial Tobacco Germany Management GmbH;

 

1.3           “associated
companies” means a company which falls to be treated as such for the purposes
of Statement of Standard Accounting Practice No. 1 of the Institute of
Chartered Accountants in England and Wales;

 

1.4           “subsidiary” has the meaning ascribed thereto in Section 736 of the
Companies Act 1985 as amended;

 

1.5           “Reemtsma” means Reemtsma Holding GmbH & Co. KG, Reemtsma
Cigarettenfabriken GmbH and their subsidiaries;

 

1.6           References to Clauses are to clauses so numbered in this Agreement.

 

2.             Term
and Appointment

 

2.1           The
Company shall engage the Executive and the Executive shall serve the Company as
hereinafter provided (“the Appointment”). The Appointment shall commence on 1
June 2003, and shall continue subject as hereinafter provided in this
Agreement unless and until terminated by either party giving to the other not
less than 12 months’ prior notice in writing. For the avoidance of doubt, the
Appointment shall automatically terminate when the Executive reaches the age of
60 years.

 

2.2           Where
notice is served to terminate the Appointment whether by the Company or the
Executive the Company shall be entitled in its absolute discretion to terminate
the Appointment forthwith by paying to the Executive salary in lieu of notice
and if the Executive accepts

 

1

 

such payment
it shall be deemed to be in full and final satisfaction of the Executive’s
claims under this Agreement. For the avoidance of doubt, no additional
compensation will be payable in respect of the termination of any other
position held within the Group, e.g. as a member of the Vorstand or member of
the Supervisory Board at Reemtsma.

 

3.             Duties

 

3.1           During
the Appointment the Executive shall devote the whole of his time and attention
to the duties assigned to him and shall well and faithfully serve the Company
and use his best endeavours to promote the interests of the Company and the
Group Companies and shall obey all reasonable and lawful directions given to
him by or under the authority of the Board and subject thereto the Executive
shall perform the duties of Corporate Affairs Director.

 

3.2           The Executive may be required in pursuance of his duties hereunder:

 

(a)           to
perform services not only for the Company but also for any of the Group
Companies and without further remuneration (except as otherwise agreed) to
accept such offices in any of the Group Companies as the Company may from time
to time reasonably require and if the Executive shall cease to be a director of
the Company for any reason then he may at the will of the Company continue as
an employee;

 

(b)           to
work at such places within the United Kingdom as the Company may require, the
Company reimbursing the Executive in respect of all reasonable relocation
expenses; and

 

(c)           to
travel to such places whether in or outside the United Kingdom by such means
and on such occasions as the Company may from time to time require.

 

3.3           Notwithstanding
the foregoing or any other provision of this Agreement the Company shall not be
under any obligation to vest in or assign to the Executive any powers or duties
and may at any time require the Executive to perform:

 

(a)           all
his normal duties;

 

(b)           a
part only of his normal duties and no other duties;

 

(c)           such
duties as it may reasonably require and no others; or 

 

(d)           no
duties whatsoever;

 

2

 

3.4           After notice to
terminate the Employment has been given by the Executive or the Company, the
Board may for all or part of the duration of the notice period in its absolute
discretion require the Executive:

 

(a)           to
perform only such duties as it may allocate to the Executive;

 

(b)           not
to perform any of the Duties;

 

(c)           not
to have any contact (other than social contact) with clients of the Company, or
any Group Company;

 

(d)           not
to have any contact (other than social contact) with such employees or
suppliers of the Company, or any Group Company as the Board shall determine;

 

(e)           to
disclose to the Board any attempted contact (other than social contact) with
him made by any client, employee or supplier with whom the Executive has been
required to have no contact pursuant to this sub-clause;

 

(f)            to
take any accrued holiday entitlement;

 

(g)           not
to enter any premises of the Company or any Group Company

 

provided always that throughout the period of
any such action and subject to the other provisions of this Agreement the
Executive’s salary and contractual benefits shall not cease to accrue or be
paid.

 

3.5           The Executive acknowledges
that such action taken on the part of the Company under Clause 3.3 or 3.4 shall
not constitute a breach of this Agreement of any kind whatsoever nor shall the
Executive have any claim against the Company in respect of any such action.

 

3.6           During any period of
garden leave (as provided for under Clause 3.3 or 3.4) the Executive shall owe
a duty of the utmost good faith to the Company, must not work for any other
person or on his own account and shall remain readily contactable and available
to work for the Company, or any Group Company. 
Should the Executive work for any other person or on his own account or
fail to be available for work at any time having been requested by the Company
to do so, the Executive’s right to salary and contractual benefits in respect
of such period of non-availability shall be forfeit notwithstanding any other
provision of this Agreement.

 

3.7           The Executive shall
comply, where relevant, with every rule of law, every requirement of the London
Stock Exchange Plc and every

 

3

 

regulation of the Company from time to time
in force relating to dealings in shares, debentures or other securities of any
Group Company and, in relation to overseas dealings, the Executive shall also
comply with all laws of the state and all regulations of the stock exchange,
market or dealing system in which such dealings take place.

 

3.8           The Executive shall not
(and shall procure so far as he is able that his spouse and children shall not)
deal or become or cease to be interested (within the meaning of Part I,
Schedule 13, Companies Act 1985) in any securities of the Company without
complying with any Company rules or guidelines from time to time relating to
securities transactions by directors.

 

4.             Holiday Entitlement

 

During the Appointment the Executive shall be
entitled to twenty five working days’ holiday (in addition to eight public
holidays and four Company holidays) in each calendar year January to
December at full salary to be taken at such time or times as may be
approved by the Board.  Holidays not
taken can be carried over to a subsequent year provided that this is agreed by
the Board.  Upon the termination of the
Appointment by either the Executive or the Company either the Executive shall
be entitled to receive payment in lieu of accrued holidays in respect of the
then current calendar year not taken at that date (provided that such
termination is not pursuant to Clause 12) or the Company shall be entitled to
make a deduction from the Executive’s remuneration in respect of holidays taken
in excess of the accrued entitlement. 
The accrued holiday entitlement at the date of termination shall be
calculated on the basis of 2 1/12 days holiday for each completed calendar
month of service in the then current calendar year and the amount of the
payment in lieu or deduction shall be calculated on the basis of 1/260 of the
Executive’s annual salary for each day’s holiday not taken or taken in excess
of the accrued entitlement.

 

5.             Disclosure of
interests

 

5.1           Except for those
appointments already held by the Executive and notified to the Board at the
date of this Agreement or as a representative of the Company or with the
previous approval of the Board the Executive shall not during the Appointment
whether directly or indirectly and whether paid or unpaid be engaged or
concerned in the conduct of any other actual or prospective business or
professions or be or become an employee, agent, partner, consultant or director
of any other company or firm or assist, subject to Clause 5.2, or have any
financial interest in any other such business or profession.

 

5.2           The Executive shall be
permitted to hold shares or securities of a company any of whose shares or
securities are quoted or dealt in on

 

4

 

any recognised investment exchange provided
that any such holding shall not exceed five per cent, of the issued share
capital of the company concerned and is held by way of bona fide investment
only (“Investment”).

 

5.3           The Executive shall
disclose to the Board any matters relating to his spouse, their children, or
their parents which, if they applied to the Executive, would contravene Clause
5.1, to the extent that the Executive has actual knowledge of such matters.

 

6.             Remuneration and
Benefits

 

6.1           During the Appointment,
as remuneration for his services hereunder, the Executive shall be paid a fixed
salary at the rate of £250,000 (Two Hundred and Fifty Thousand Pounds) per
annum with effect from 1 June 2003, and thereafter at such other rate as
may be agreed annually.  Such salary
shall be inclusive of any fees or remuneration which he would otherwise be
entitled to receive from the Company or any Associated Company and shall be payable
by bank credit transfer in equal monthly instalments in arrears on the 16th day
of each calendar month, or if the 16th is not a working day, then on the last
working day before the 16th of the month.

 

6.2           To the extent to which
the Board exercises its discretion regarding the provision of any annual bonus
scheme, the Executive shall be entitled to participate in the Company’s annual
bonus scheme in accordance with the rules of the scheme and any performance
conditions thereunder as those rules or conditions may be altered or amended
from time to time.  The provision of an
annual bonus scheme is at the absolute discretion of the Board (who may,
subject however to the express terms of such bonus scheme, suspend or
discontinue such bonus scheme at any time in the interests of the Company
whether generally or in relation to the Executive).

 

6.3           To the extent to which
the Board exercises its discretion regarding the provision of a long term
incentive plan, the Executive shall be entitled to participate in the Company’s
long term incentive plan in accordance with the rules of the plan and any
performance conditions thereunder as those rules or conditions may be altered
or amended from time to time.  The
provision of the long term incentive plan is at the absolute discretion of the
Board (who may, subject however to the express terms of such plan, suspend or
discontinue such a plan at any time in the interests of the Company whether
generally or in relation to the Executive).

 

6.4           To the extent to which
the Board exercises its discretion regarding the provision of a share matching
scheme, the Executive shall be entitled to participate in the Company’s share
matching scheme in accordance with the rules of the scheme as those rules may
be altered or amended

 

5

 

from time to time.  The provision of the share matching scheme is at the absolute
discretion of the Board (who may, subject however to the express terms of such
scheme, suspend or discontinue such a scheme at any time in the interests of
the Company whether generally or in relation to the Executive).

 

6.5           Subject to the rules of
the terms of the scheme as they may be altered or amended, the Executive shall
be entitled to participate in any private medical insurance cover taken out by
the Company for the benefit of its directors and/or senior employees.

 

6.6           During his period of
employment, the Executive shall be entitled to participate in the Imperial
Tobacco Pension Fund (“the Fund”) an Inland Revenue exempt approved
occupational pension scheme, in accordance with its trust deed and rules as
they may be altered or amended from time to time.

 

7.             Expenses

 

The Executive shall be entitled to be repaid
all reasonable travelling, hotel and other expenses properly authorised by the
Board and incurred in or about the performance of his duties hereunder, which
expenses shall be evidenced in such manner as the Company may reasonably
require from time to time.

 

8.             Company Car

 

8.1           To assist in the
performance of his duties hereunder the Company shall during the Appointment
provide the Executive with a car of a cost and type to be determined from time
to time by the Board and subject to any terms and conditions which the Company
may from time to time impose on the Executive in relation thereto.  Subject thereto the Company shall bear the
cost of insuring, testing, taxing, repairing and maintaining the same and shall
reimburse to the Executive all reasonable running expenses of such car.  The Executive shall:

 

(a)           take good care of the
car and ensure that the provisions and conditions of any policy of insurance
relating thereto are observed;

 

(b)           not permit such car to
be taken out of the United Kingdom without the written consent of the Company;
and

 

(c)           return the car and its
keys and all documents relating to it to the Company’s Registered Office (or to
such other location as the Board may reasonably direct) immediately upon the
termination of the Appointment howsoever arising.

 

6

 

8.2           The Executive may at his own election opt
out of the above scheme, and in its place use his own car, and claim a car
allowance, the amount of which is set by the Board from time to time.

 

9.             Confidential Information

 

9.1           The Executive shall not
use or divulge or communicate to any person other than with proper authority
any of the trade secrets or other confidential information of or relating to
the Company or any of the Group Companies (including but not limited to details
of customers, potential customers, consultants, suppliers, potential suppliers,
designs, product details, future product details, prices, discounting
arrangements, specific product applications, existing trade arrangements, terms
of business and those in the course of negotiation, operating systems, pricing
and fee structures, financial information, inventions, research and development
activities) which he may have created, developed, received or obtained while in
the service of the Company or any of the Group Companies (whether before or
after the commencement of the Appointment). This restriction shall continue to
apply after the termination of the Appointment howsoever arising without limit
in point of time including ideas information or knowledge which may come into
the public domain for so long as the Executive is in a position to use such
information more readily than others who have not worked for the Company.

 

9.2           The Executive shall not
during the Appointment make otherwise than for the benefit of the Company any
records (whether recorded on paper, computer memory or discs or otherwise)
relating to any matter within the scope of the business of the Company or any
of the Group Companies or concerning any of its or their dealings or affairs
nor either during the Appointment or thereafter use or permit to be used any such
records otherwise than for the benefit of the Company it being agreed by the
parties that all such records (and copies thereof) in the possession or control
of the Executive shall be the property of the Company and shall be handed over
by the Executive to the Company from time to time and on demand and in any
event upon the termination of the Appointment.

 

9.3           The Executive shall not
during the Appointment speak in public or write any article for
publication on any matter connected with or relating to the business of the
Company or any of the Group Companies without first obtaining the approval of
the Board.

 

10.          Inventions and Creative Works

 

10.1         The Executive
acknowledges that because of the nature of his duties and the particular
responsibilities arising as a result of such duties which he owes to the
Company and the Group Companies he has a special obligation to further the
interests of the Company and the

 

7

 

Group Companies. In particular
the duties of the Executive shall include reviewing the products and services
of the Company and Group Companies with a view to improving them by new and/or
original ideas and inventions and implementing such improvements.

 

10.2         The Executive shall promptly disclose to the
Company any idea, invention or work which is relevant to or capable of use in
the business of the Company or any of the Group Companies made by the Executive
in the course of his employment whether or not in the course of his duties. The
Executive acknowledges that the intellectual property rights subsisting or
which may in the future subsist in any such ideas, inventions or works created
by him in the course of his employment will, on creation, vest in and be the
exclusive property of the Company and where the same do not automatically vest
as aforesaid, the Executive shall assign the same to the Company (upon the
request and at the cost of the Company). The Executive hereby irrevocably
waives any rights which he may have in any such ideas, inventions or works
which are or have been conferred upon him by Chapter IV of Part I of the
Copyright Designs and Patents Act 1988 headed “Moral Rights”.

 

10.3         The Executive hereby irrevocably appoints the
Company to be his attorney in his name and on his behalf to execute and do any
such instrument or thing and generally to use his name for the purpose of
giving to the Company or its nominee the full benefit of the provisions of this
Clause 10 and acknowledges in favour of any third party that a certificate in writing
signed by any Director or Secretary of the Company that any instrument or act
falls within the authority hereby conferred shall be conclusive evidence that
such is the case.

 

11.          Restrictions after Termination

 

11.1         The Executive shall not
for the following periods after the termination of the Appointment howsoever
arising (but excluding repudiatory breach of this Agreement by the Company)
(“Termination”) save with the prior written consent of the Board which shall
not be unreasonably refused directly or indirectly, either alone or jointly
with or on behalf of any person, firm, company or entity and whether on his own
account or as principal, partner, shareholder, director, employee, consultant
or in any other capacity whatsoever:-

 

(a)        For
6 months following Termination, in the Relevant Territory and in competition
with the Company or any of the Relevant Group Companies engage, assist or be
interested in any undertaking which provides services or manufactures products
similar to those provided or manufactured by the Company or any of the Relevant
Group Companies (which shall include the manufacture, sale or distribution of
cigarettes, cigars, cigarette papers and tubes, or other tobacco products) in
the 12 months

 

8

 

prior to Termination and with which the
Executive was concerned in the said period of 12 months;

 

(b)           For 6 months following
Termination, in the Relevant Territory solicit or interfere with or endeavour
to entice away from the Company or any of the Relevant Group Companies any
person, firm, company or entity who was a customer of the Company or any of the
Relevant Group Companies in the 12 months prior to Termination and with whom
the Executive was concerned or had personal contact in the said period of 12
months;

 

(c)           For 6 months following
Termination, in the Relevant Territory be concerned with the supply of
services/products to any person, firm, company or entity which was a
client/customer of the Company or any of the Relevant Group Companies in the 12
months prior to Termination where such services/products are identical or
similar to or in competition with those services/products supplied by the
Company or any of the Relevant Group Companies (which shall include the
manufacture, sale or distribution of cigarettes, cigars, cigarette papers and
tubes, or other tobacco products) in the said 12 month period, with which
supply the Executive was concerned in the said period of 12 months;

 

(d)           For 6 months following
Termination, in the Relevant Territory solicit or interfere with or endeavour
to entice away from the Company or any of the Relevant Group Companies any
person, firm, company or entity who was a supplier of services/goods to the
Company or any of the Relevant Group Companies which are necessary or required
for the manufacture, sale or distribution of cigarettes, cigars or other
tobacco products in the 12 months prior to Termination and with whom the
Executive was concerned or had personal contact in the said period of 12
months.

 

(e)           For 6 months following
Termination, in the Relevant Territory and in competition with the Company or
any Relevant Group Companies be concerned with the receipt of services/goods
from any person, firm, company or entity which was a supplier of services/goods
to the Company or any of the Relevant Group Companies in the 12 months prior to
Termination where such services/goods are identical or similar to or in
competition with those services/goods supplied to the Company or any of the
Relevant Group Companies (which shall include the manufacture, sale or
distribution of cigarettes, cigars, cigarette papers and tubes, or other
tobacco products) in the said period of 12 months and with which supply the
Executive was concerned in the said period of 12 months;

 

9

 

(f)            For 6 months following
Termination, offer to employ or engage or solicit the employment or engagement
of any person who immediately prior to the date of termination was a senior
employee or consultant of the Company or any of the Relevant Group Companies
(whether or not such person would commit any breach of his contract of
employment or engagement by reason of leaving the service of such company); or

 

(g)           At any time following
Termination represent himself as being in any way connected with or interested
in the business of the Company or any of the Relevant Group Companies.

 

11.2         Each of the obligations
contained in this Clause 11.1 constitutes an entire, separate and independent
restriction on the Executive, despite the fact that they may be contained in
the same phrase and if any part is found to be unenforceable the remainder will
remain valid and enforceable.

 

11.3         While the restrictions in
Clause 11.1 are considered by the parties to be fair and reasonable in the
circumstances, it is agreed that if any such restrictions should be adjudged to
be void or ineffective for any reason but would be treated as valid and
effective if part of the wording thereof were deleted or the periods thereof
reduced or the area thereof reduced in scope, the said restrictions shall apply
with such modifications as will be necessary to make them valid and effective.

 

11.4         The Executive agrees that
he will at the request and cost of the Company enter into a direct agreement
with any of the Group Companies under which he will accept restrictions
corresponding to the restrictions contained in Clause 11.1 (or such as will be
appropriate in the circumstances) in relation to such Group Company.

 

11.5         The provisions of this
Clause will not prevent the Executive from holding an Investment.

 

11.6         For the purposes of this
Clause:-

 

(a)           a “Relevant Group
Company” shall mean any of the Group Companies for which the Executive has
performed services or in which he has held office during the 12 months
immediately preceding Termination; and

 

(b)           “the Relevant
Territory” shall mean England, Scotland, Wales, Northern Ireland, the Channel
Islands, the Isle of Man, Eire, the Federal Republic of Germany and any other
country where the Group Companies have manufacturing operations or significant
sales (accounting for more than 1% of total turnover of Group Companies) in the
12 months prior to Termination which shall comprise the area constituting the
market of the Company or

 

10

 

any of the Relevant Group Companies for
products and services with which the Executive shall have been concerned in the
period of 12 months prior to Termination (which shall include the manufacture,
sale or distribution of cigarettes, cigars, cigarette papers and tubes, or
other tobacco products).

 

The Company reserves the right to make such
additions to/deletions from the list of countries constituting the Relevant
Territory as are reasonable in order to define the area constituting the
relevant market at the date of Termination and such list will be discussed by
the parties and issued to the Executive as soon as is reasonably practicable
following the date of Termination.

 

12.           Termination
by Events of Default

 

The Appointment shall be subject to summary
termination at any time by the Company by notice in writing if the Executive
shall have committed any serious breach or (after warning in writing) any
repeated or continued material breach of his obligations hereunder or in the
reasonable opinion of the Board shall have failed to perform his duties to a
satisfactory standard or shall have been guilty of any act of dishonesty or
serious misconduct or any conduct which in the reasonable opinion of the Board
tends to bring himself, the Company or any of the Group Companies into
disrepute or shall be declared bankrupt or shall compound with his creditors or
shall become prohibited by law from being a director. Any delay by the Company
in exercising such right to terminate shall not constitute a waiver thereof.

 

13.           Incapacity

 

If the Executive shall be incapacitated
during the Appointment by ill-health or accident from performing his duties
hereunder for a period of twelve months or more the Company may by written
notice to the Executive forthwith (or as from a future date specified in the
notice) discontinue payment in whole or part of the Executive’s remuneration
under Clause 6 hereof until such incapacity shall cease or (whether or not his
remuneration shall have been discontinued as aforesaid) terminate the
Appointment. Subject as aforesaid (and provided the Executive complies with the
Company’s rules on notification and evidence of absence due to illness or
injury) the said remuneration shall continue to be payable to the Executive
under Clause 6 notwithstanding such incapacity but the Company shall be
entitled to set off or deduct therefrom the amount of any Statutory Sick Pay or
other benefit to which the Executive is entitled under Social Security
legislation for the time being in force.

 

11

 

14.           Obligations
upon Termination

 

Upon the termination of the Appointment
howsoever arising the Executive shall:

 

14.1         At any time or from time
to time thereafter upon the request of the Company, resign without claim for
compensation from all offices held in the Company or any of the Group
Companies, which for the avoidance of doubt will also include any position as a
member of the Vorstand or member of the Supervisory Board at Reemtsma, and from
membership of any organisation acquired by reason of or in connection with the
Appointment and should he fail to do so the Company is hereby irrevocably
appointed to be the Executive’s Attorney in his name and on his behalf to
execute any document and to do any things necessary or requisite to give effect
to this sub-clause;

 

14.2         Deliver to the Board all
documents (including, but not limited to, correspondence, lists of clients or
customers, notes, memoranda, plans, drawings and other documents of whatsoever
nature and all copies thereof) made or compiled or acquired by the Executive
during the Appointment and or as an employee of any of the Group Companies
prior to the commencement of the Appointment concerning the business, finances
or affairs of the Company or any of the Group Companies or their customers.

 

15.           Reconstruction
and Amalgamation

 

If at any time the Executive’s employment is
terminated in connection with any reconstruction or amalgamation of the Company
or any of the Group Companies whether by winding up or otherwise and the
Executive receives an offer on terms which (considered in their entirety) are
not less favourable to any material extent than the terms of this Agreement
from a company involved in or resulting from such reconstruction or amalgamation
the Executive shall have no claim whatsoever against the Company or any such
company arising out of or connected with such termination and such
reconstruction or amalgamation shall not be treated as involving a change of
control.

 

16.           Notices

 

Any notice to be given hereunder shall be in
writing. Notices may be given by either party by personal delivery or post or
by fax addressed to the other party at (in the case of the Company) its
registered office for the time being and (in the case of the Executive) his
last known address and any such notice given by letter or fax shall be deemed
to have been served at the time at which the letter was delivered personally or
transmitted or if sent by post would be delivered in the ordinary course of
post.

 

12

 

17.           Previous Contracts

 

This Agreement is in substitution for any
previous contract of service between the Company or any of the Group Companies
and the Executive which shall be deemed to have been terminated by mutual
consent as from the commencement of the Appointment.  No purported variation of this Agreement shall be effective
unless it is in writing and signed by or on behalf of each of the parties.

 

18.           Third Parties

 

Unless expressly provided in this Agreement,
no term of this Agreement is enforceable pursuant to the Contracts (Rights of
Third Parties) Act 1999 by any third party.

 

19.           Data Protection

 

The Executive consents to the holding and
processing by the Company or any other Group Company of personal data
(including, where appropriate, sensitive personal data) relating to the
Executive for the purposes of personnel or pensions administration, employee
management or compliance with any laws or regulations applicable to the
Company, any Group Company or its or their business.

 

20.           Proper Law

 

This Agreement shall be governed and
construed in all respects in accordance with English law.

 

21.           Construction

 

21.1         The
headings in this Agreement are inserted for convenience only and shall not
affect its construction.

 

21.2         Any reference to a
statutory provision shall be construed as a reference to any statutory
modification or re-enactment thereof (whether before or after the date hereof)
for the time being in force.

 

22.           Statutory Information and the Schedule

 

The Schedule hereto (in addition to this
Agreement) constitutes a written statement as at the date hereof of the terms
of employment of the Executive in compliance with the provisions of the
Employment Rights Act 1996; it does not form part of the contract of employment
and may be varied by the Company by notice in writing to the Executive of any
changes applicable to his employment.

 

13

 

	
  Executed and Delivered by the said

  	
  )

  	
   

  
	
  Frank Rogerson

  	
  )

  	
   

  	
   

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed and Delivered
  by the said

  	
  )

  	
   

  
	
  Imperial Tobacco Group PLC

  	
  )

  	
   

  
	
  by the signatures of a Director

  	
  )

  	
   

  
	
  and the Secretary:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary

  
							

 

14

 

The
Schedule

 

 

1.             The Executive has
been continuously in the employment of the Company (including reckonable
service with any of the Group Companies) since 3 October 1977.

 

2.             Rate of Remuneration
and the intervals at which it is paid are contained in Clause 6.

 

3.             There are no specific
terms and conditions relating to hours of work except as provided in Clause 3.1

 

4.             The terms and
conditions relating to holidays are contained in Clause 4 and those relating to
sickness are contained in Clause 13.

 

5.             Particulars as to the
length of notice to terminate are contained in Clause 2.

 

6.             Particulars as to the
work for which the Executive is employed are contained in Clause 3.

 

7.             Subject to Clause 3.2
the Executive’s principal place of work at the date of this Schedule is
the Company’s offices at 244 Upton Road, Southville, Bristol BS99 7UJ.

 

8.             There are no disciplinary
rules applicable to the Executive except as provided in this Agreement and if
the Executive is dissatisfied with any disciplinary decision he should apply
orally or in writing to the Chairman of the Board.

 

9.             Any application for
the purpose of seeking redress of any grievance relating to the Executive’s
employment should be made either orally or in writing to the Chairman of the
Company and if still unresolved after ten days to the non-executive directors
of the Board.

 

10.           A contracting-out certificate
is in force in respect of the Executive’s employment.

 

11.           Details of the
Executive’s work outside the UK are contained in Clause 3.2.

 

12.           There are no collective
agreements which are applicable to the Appointment.

 

15

 

	
  

  	
   

  	
  IMPERIAL TOBACCO GROUP PLC

  PO Box 244,
  Southville, Bristol BS99 7UJ

  Tel: +44 (0)117 963 6636

  Fax: +44 (0)117 9667859

  
	
   

  	
   

  	
   

  
	
  By Email

  	
   

  	
   

  
	
   

  	
   

  	
  As from

  	
   

  
	
   

  	
   

  	
  150, Brompton Road

  	
   

  
	
   

  	
   

  	
  London, SW3 IHX

  	
   

  
	
  December 3, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mr D W Thursfield

  	
   

  	
   

  
	
  Ford Motor Company

  	
   

  	
   

  
	
  World Headquarters. 12th Floor

  	
   

  	
   

  
	
  One American Road

  	
   

  	
   

  
	
  Dearborn

  	
   

  	
   

  
	
  Michigan 48126-2798

  	
   

  	
   

  
	
  United States of America

  	
   

  	
   

  

 

Dear David

 

I am delighted that you have now joined our
Board and look forward to your contributions to the development of Imperial Tobacco. Although
some of the issues are challenging and the debates varied our discussions are
always conducted in a friendly atmosphere and we try to enjoy ourselves when
possible. I hope that you will find that you get satisfaction and pleasure from
this new role.

 

Meantime, if I can help on any matters that
may concern you or where you feel you are not being adequately provided with
any information you need, please feel free to get in touch.

 

Despite the wonders of electronic
communication you have probably found that there is a seemingly endless need
for signatures on bits of paper for Companies House, the Stock Exchange, etc.
To add to this burden, I wondered whether you would sign and return to me the
attached letter of appointment, a draft of which we sent to you earlier for
review.

 

	
  Yours sincerely

  
	
   

  
	
   

  
	
  /s/ Derek C Bonham

  	
   

  
	
   

  
	
   

  
	
  Derek C Bonham

  
	
  Chairman

  

 

www.imperial.-tobacco.com

Registered in
England and Wales No: 3236483 Registered Office: PO Box 244, Upton Road, Bristol
BS99 7UJ

 

 

 

PRIVATE AND CONFIDENTIAL

ADDRESSEE ONLY

 

Mr D W Thursfield

Ford Motor Company

One American Road

Dearborn. MI US

48126-2798

United States of America

 

Dear David

 

Imperial Tobacco Group PLC (the “Company”)
and confirmation of your appointment to the Board as a Non-Executive Director

 

My colleagues and I are pleased to confirm your appointment as a
non-executive director of the Company with effect from today. 
This letter details the
main terms attached to this office.

 

1.             Duties

 

You will be required to
attend Board meetings of the Company. 
The Board meets five times each year and normally the meetings are held
here in Bristol. The next Annual General Meeting will be held on 3 February
2004.

 

You are already aware of how
the Board works and what authorities are delegated to the Group Chief Executive and his executive
director colleagues.

 

In addition to attending
Board meetings, you will be required to serve on the Company’s Nominations
Committee. The Company reserves the right to invite you to serve on one of its
other Board Committees, particularly the Remuneration and Audit
Committees.  The Remuneration Committee
meets at least twice a year and the Audit Committee at least three times a
year. You have been informed of the roles of these Committees.  You should attend, wherever possible, all meetings of
the Committees on which you serve.

 

I need hardly remind you
that the liabilities and obligations of directors of listed companies are more
onerous and more rigorously enforced than those relating to private
companies.  In common with the rest of
the Board, you are therefore expected to comply with the terms of the Financial
Services Authority’s Model Code for transactions by directors of listed companies
(a copy of which is available from the Company Secretary) and specifically with
any insider dealing rules adopted by the Company from time to time.

 

16

 

2.                                      Appointment

 

Following this confirmation
of appointment, your position will be reviewed annually prior to the AGM.  All appointments and re-appointments to the
Board are, of course, subject to the Company’s Articles of Association.

 

Your appointment is
terminable at the will of the parties.

 

If you are not re-elected to
your position as a director of the Company by the shareholders at any time and
for any reason then this appointment shall terminate automatically and with
immediate effect. On termination of the appointment you shall only be entitled
to such fees as may have accrued to the date of the termination together with
reimbursement in the normal way of any expenses properly incurred prior to that
date.

 

3.                                      Remuneration

 

The fee is at present
£40,000 per annum, payable monthly in arrears, subject to UK statutory
deductions, of which £10,000 per annum, less UK statutory deductions, will be
applied on your behalf to the purchase of the Company’s shares on the London
Stock Exchange to be held by a nominee for the duration of your appointment.

 

4.                                      Expenses

 

The Company will reimburse
you for any expenses that you may incur properly and reasonably in performing
your duties.  Such expenses would
include reasonable legal fees if circumstances should arise in which it was
necessary for you to seek separate legal advice about the performance of your
duties.  In such a situation, you are
required to discuss the issue
either with me or with one of your non-executive colleagues in advance.

 

5.                                      Confidentiality

 

By accepting your office you
hereby undertake not to disclose any confidential information belonging to the
Company and its subsidiary undertakings (including, but not limited to, details
of suppliers, customers, margins, know-how, marketing and other relevant
business information) save in pursuance of your duties or in accordance with
any statutory obligation or
court or other order.

 

6.                                      Outside Interest

 

In accordance with the
principles set out in the Combined Code you must inform the Board of any
interests which you have, or acquire, which might reasonably be thought to
jeopardise your independence from the Company.

 

During your appointment you
must not take up any office or employment with, or have any interest in, any
firm or company which is in direct or indirect competition with the Company.

 

17

 

Insurance

 

During your appointment you
will be covered by the Company’s directors’ and officers’ liability insurance
on the terms in place from time to time. 
The Company does not guarantee to maintain this insurance cover, but you will continue to be covered by the policy so long as it
remains in place for the rest of the Board.

 

Independence

 

The Combined Code requires
that, for good corporate governance, the majority of non-executive directors
are independent of management and free from any business or other relationship
which could materially interfere with the exercise of their independent
judgement.  Non-executive directors
considered by the Board to be independent in this sense are to be identified in
the Company’s annual report.

 

The Board consider you to be
independent and you will therefore be identified in this capacity in the annual report.

 

Induction
and Training

 

Please contact the Company
Secretary to arrange a day on which you can attend an induction course.  If you feel at any point that you require
training to fulfil the duties of your office please let me know and the Company
Secretary will try to arrange for suitable training to be provided.

 

Data
Protection

 

By signing this agreement
you consent to the Company holding and processing information about you which
you or any referees may provide or which it may acquire during the course of
this agreement, providing such use is in accordance with the Data Protection Act 1998.  In particular you consent
to the Company holding and processing:

 

(a)           personal data relating to you, for administrative and
management purposes; and

 

(b)           “sensitive personal data” relating to you (as defined in
the Data Protection Act 1998).

 

You also consent to the
transfer of all or any part of the information the Company holds relating to
you to locations outside the European Economic Area to its customers or any
group company for normal business reasons.

 

Third Party
Rights

 

The Contracts (Rights of
Third Parties) Act 1999 shall not apply to this agreement.  No person other than the parties to this
agreement shall have any rights under it and it will not be enforceable by any
person other than the parties to it.

 

18

 

Please would you sign and return the enclosed copy of this letter to
confirm your agreement to the above terms.

 

The Company looks forward to commencing work with you shortly.

 

Yours sincerely

 

 

	
  /s/ Derek C
  Bonham

  	
   

  
	
   

  
	
   

  
	
  D C Bonham

  
	
  Chairman

  

for and on behalf of Imperial Tobacco Group
PLC

 

I, David Thursfield, agree to the above terms of appointment as a non-executive director of Imperial
Tobacco Group PLC.

 

	
   

  	
  Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  2003

  

 

19

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