Document:

Exhibit 4.5

 

IMPERIAL TOBACCO GROUP PLC

 

 

THE
IMPERIAL TOBACCO GROUP SHARESAVE SCHEME

(Adopted by the Company on 16 August 1996 and approved by the Inland
Revenue

on 3 December 1996

under reference number SRS1827)

 

 

ASHURST
MORRIS CRISP

Broadwalk House,

5 Appold Street,

LONDON EC2A 2HA

 

Tel:
0171-638-1111

Fax: 0171-972-7990

 

 

THE
IMPERIAL TOBACCO GROUP SHARESAVE SCHEME

 

INDEX

 

	
  Clause

  	
   

  	
  Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Commencement and Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Grant of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Limitations on the
  issue of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Exercise Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Adjustment of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Exercise of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Lapse of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Takeover and Liquidation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Allotment and Listing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Employment Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Administration of the
  Scheme

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Termination of the Scheme

  	
   

  

 

 

RULES
OF THE IMPERIAL TOBACCO GROUP SHARESAVE SCHEME

 

1.                                            Definitions

 

In these Rules (unless the context otherwise requires)
the following words and expressions have the following meanings:-

 

	
  “Act”

  	
   

  	
  the
  Income Tax (Earnings and Pensions) Act 2003;

  
	
   

  	
   

  	
   

  
	
  “Adoption
  Date”

  	
   

  	
  the
  date on which the Scheme is adopted by the Company in general meeting;

  
	
   

  	
   

  	
   

  
	
  “Application
  Period”

  	
   

  	
  such
  period as the Board may determine but being a period not less than fourteen
  days and not more than 21 days from an Invitation Date;

  
	
   

  	
   

  	
   

  
	
  “Associated
  Company”

  	
   

  	
  has
  the same meaning given to it in paragraph 47 of Schedule 3 to the Act
  except for the purposes of Rule 7(f) where it has the meaning given to it by
  paragraph 35(4) of Schedule 3 to the Act;

  
	
   

  	
   

  	
   

  
	
  “Auditors”

  	
   

  	
  the
  auditors for the time being of the Company;

  
	
   

  	
   

  	
   

  
	
  “Board”

  	
   

  	
  the
  Board of Directors for the time being of the Company (or the directors
  present at a duly convened meeting of such Board) or a duly authorised
  committee thereof;

  
	
   

  	
   

  	
   

  
	
  “Bonus
  Date”

  	
   

  	
  where
  Repayment under the relevant Savings Contract is taken as including the
  maximum bonus, the earliest date on which the maximum bonus is payable and in
  any other case the earliest date on which a bonus is payable under the
  Savings Contract;

  
	
   

  	
   

  	
   

  
	
  “Commencement
  Date”

  	
   

  	
  the
  date on which the Scheme is approved by the Inland Revenue under the Income
  Tax and Corporation Taxes Act 1988;

  
	
   

  	
   

  	
   

  
	
  “Company”

  	
   

  	
  Imperial
  Tobacco Group PLC;

  

 

 

	
  “Continuous
  Service”

  	
   

  	
  service
  with any company which is or was a Subsidiary (including service with such
  company before it became a Subsidiary) which shall be aggregated with service
  with a Participating Company provided all such service has been
  continuous.  In the case of an
  employee employed in employment by a Participating Company who is absent from
  such employment for any reason for a period during which such employee’s
  contract of service subsists, or by reason of maternity leave, and who then
  returns to such employment with a Participating Company then in calculating
  service any such period of absence shall be deemed to have formed part of his
  continuous service;

  
	
   

  	
   

  	
   

  
	
  “Control”

  	
   

  	
  has
  the same meaning as in Section 719 of the Act;

  
	
   

  	
   

  	
   

  
	
  “Date
  of Grant”

  	
   

  	
  the
  date on which the Grantor passes a resolution to grant an Option under Rule
  3(D) below;

  
	
   

  	
   

  	
   

  
	
  “Eligible
  Employee”

  	
   

  	
  any
  employee (including a director holding a salaried employment or office) of a
  Participating Company who (a) on the relevant Date of Grant has achieved such
  period of Continuous Service not exceeding five years as the Board shall on
  or before the Invitation Date determine; (b) whose earnings from his office
  or employment are (or would be if there were any) general earnings to which
  section 15 to 21 of the Act applies; (c) who is not ineligible to
  participate in the Scheme by virtue of any of the provisions of the Act
  including in particular paragraph 11 of Schedule 3 to the Act;  and (d) who in the case only of a director
  holding a salaried employment or office, usually works at least twenty-five
  hours per week excluding time off permitted for meal breaks provided that the
  Board may treat any employee or director of a member of the Group who meets
  requirement (c) above as an Eligible Employee PROVIDED HOWEVER THAT at the
  Invitation Date no notice of termination of such employment has been served
  by either the employee concerned or his employing Participating Company;

  

 

 

	
  “Exercise
  Price”

  	
   

  	
  the price
  per Share at which a Participant may acquire Shares pursuant to the Scheme
  (as determined in accordance with Rule 5);

  
	
   

  	
   

  	
   

  
	
  “Grantor”

  	
   

  	
  either
  the Board or the Trustee;

  
	
   

  	
   

  	
   

  
	
  “Group”

  	
   

  	
  the
  Company and its Subsidiaries from time to time together with any such company
  as the Board and the Inland Revenue shall have agreed may participate
  pursuant to the terms of Schedule 3, paragraph 46 of the Act;

  
	
   

  	
   

  	
   

  
	
  “Invitation
  Date”

  	
   

  	
  the
  date upon which invitations to apply for Options are issued by the Board,
  being a date within forty-two days after the Commencement Date and thereafter
  within twenty-eight days after the date of public announcement of the annual
  or half yearly results of the Group;

  
	
   

  	
   

  	
   

  
	
  “London
  Stock Exchange”

  	
   

  	
  London
  Stock Exchange Limited;

  
	
   

  	
   

  	
   

  
	
  “Option”

  	
   

  	
  a
  right granted pursuant to the Scheme to acquire Shares;

  
	
   

  	
   

  	
   

  
	
  “Participant”

  	
   

  	
  a
  person who holds a Subsisting Option or (where the context admits) his
  personal representatives;

  
	
   

  	
   

  	
   

  
	
  “Participating
  Company”

  	
   

  	
  any
  member of the Group which the Board has designated as a member of the Scheme
  for the time being;

  
	
   

  	
   

  	
   

  
	
  “Repayment”

  	
   

  	
  in
  relation to a Savings Contract, the amount of the contributions repayable
  and, where relevant, of any bonus and/or interest payable on the termination
  of the Savings Contract;

  
	
   

  	
   

  	
   

  
	
  “Savings
  Contract”

  	
   

  	
  a
  certified contractual savings scheme within the meaning of Section 326
  (2), (3) or (4) of the Income and Corporation Taxes Act 1988 with a Building
  Society or an institution authorised under the Banking Act 1987 as determined
  by the Board and which has been approved by the Inland Revenue for the
  purposes of Schedule 3 to the Act;

  

 

 

	
  “Schedule 3”

  	
   

  	
  Schedule 3
  to the Act;

  
	
   

  	
   

  	
   

  
	
  “Scheme”

  	
   

  	
  the
  Imperial Tobacco Group Sharesave Scheme as amended from time to time;

  
	
   

  	
   

  	
   

  
	
  “Share”

  	
   

  	
  a
  fully paid ordinary share in the capital of the Company which satisfies
  paragraphs 18 to 22 of Schedule 3;

  
	
   

  	
   

  	
   

  
	
  “Specified
  Age”

  	
   

  	
  60;

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

  	
  a
  subsidiary of the Company as defined in Section 736 of the Companies Act
  1985 over which the Company has Control;

  
	
   

  	
   

  	
   

  
	
  “Subsisting
  Option”

  	
   

  	
  an
  Option to the extent that it has neither lapsed nor been exercised;

  
	
   

  	
   

  	
   

  
	
  “Trustee”

  	
   

  	
  the
  trustee or trustees for the time being of any employee trust established by
  the Company wholly or partly for the benefit of all or most of the persons
  for the time being employed or holding office with the Group or any
  Participating Company or Companies which has been designated by the Board as
  a trust out of which Options may be granted.

  

 

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

 

2.                                       Commencement and Title

 

The
Scheme shall commence on the Commencement Date and shall be known as The
Imperial Tobacco Group Sharesave Scheme.

 

3.                                       Grant of Options

 

(A)                              On or prior to an Invitation Date the Grantor may decide in its
absolute discretion:-

 

(i)                                     whether to invite applications for the grant of Options; and

 

 

(ii)                                  whether to invite applications for three year Options, five year
Options or seven year Options (or whether to offer Eligible Employees a
choice).

 

(B)                                Where applications for the grant of Options are invited, such
invitations shall be sent to all Eligible Employees and shall state:-

 

(i)                                     the Exercise Price or the method by which the Exercise Price for the
Shares will be notified to Eligible Employees;

 

(ii)                                  the date being the last day of the Application Period by which
applications for the grant of Options must have been received by the Board or
such person as the Board may direct being not less than 14 nor more than 21
days after the date of issue of such invitations except in exceptional
circumstances as determined by the Board; and

 

(iii)                               whether application may be made for three year Options, five year
Options, seven year Options or any combination of them.

 

PROVIDED THAT any accidental failure or omission to
deliver invitations to all Eligible Employees shall not invalidate the grant of
Options pursuant to this Rule 3(B) to which such invitations relate.

 

(C)                                Applications for Options under the Scheme shall be in such form as
the Board may require and each:-

 

(i)                                     must be accompanied by a duly completed application form to enter
into one or more Savings Contracts under each of which the applicant will agree
to make in multiples of £5 per month such specified contributions being not
less than £5 per month nor (when aggregated with contributions made under any
other savings contract linked to a savings related share option scheme approved
under Schedule 3) more than £250 per month (or such other amounts as may
from time to time be permitted under the Savings Contract) as shall secure on
the Bonus Date, as nearly as may be, Repayments of an amount equal to that for
which Shares may be acquired under his Option if exercised in full; and

 

(ii)                                  shall empower the Grantor or any person authorised by it:-

 

(a)                                  to amend the amount of the specified contribution referred to in
Rule 3(C)(i) above to such lesser sum as shall secure on the Bonus Date, as
nearly as may be, Repayments of an amount equal to that for which Shares may be
acquired by the Participant in the event that the number of Shares for which an
Eligible Employee applies for an Option has to be reduced in accordance with
Rule 3(D) below;

 

 

(b)                                 to deduct from the Participant’s pay such contribution as shall be
specified by the Participant pursuant to Rule 3(C)(i) or as may be amended
pursuant to Rule 3(C)(ii)(a) above and pay the same on behalf of the
Participant in discharge of the Participant’s obligations under the Savings
Contract.

 

(D)                               Within thirty days or, in exceptional circumstances, such longer
period as may have been agreed previously in writing with the Inland Revenue,
of the date pursuant to Rule 5(A)(i) by reference to which the Exercise Price
was determined or in a case where the number of shares over which Options are
to be granted is determined by Rule 3(D) (ii) below, within forty-two days of
such date and subject to the limitations and conditions contained in the
Scheme, Options shall by resolution of the Grantor be granted to the Eligible
Employees who have applied for them in accordance with the following
provisions:-

 

(i)                                     Options shall be granted to the Eligible Employees in respect of all
the Shares applied for by them; save that

 

(ii)                                  where the Board in its discretion considers that it is desirable to
limit the number of Shares in respect of which Options are granted in relation
to any invitation, then the following steps shall be carried out successively
to the extent necessary to eliminate the excess over the limitation imposed

 

(a)                                  the excess over £5 of the monthly savings contribution chosen by
each applicant shall be reduced pro rata to the extent necessary;

 

(b)                                 applications will be selected by lot, each based on a monthly
savings contributions of £5 and the inclusion of no bonus in the Repayment
under the Savings Contract.

 

(E)                                 No payment will be required from a Participant on the grant of an
Option.  Each Participant will be issued
with a certificate in the form from time to time agreed with the Inland
Revenue.

 

(F)                                 No Option shall be capable of being transferred by a Participant.

 

(G)                                No Option shall be granted more than ten years after the
Commencement Date.

 

(H)                               The number of Shares over which an Option is granted to any Eligible
Employee must be so limited that the aggregate of the Exercise Price for those
Shares does not exceed the Repayment under the Savings Contract entered into on
the grant of such Option.

 

4.                                       Limitations on the issue
of Shares

 

Subject
to Rule 6 below, no Option shall be granted on any Date of Grant or proposed
Date of Grant if, as a result:-

 

 

(A)                              the total number of Shares issued or committed to be issued during
the ten years preceding such Date of Grant under this Scheme and under all
other employee share schemes established by the Company would exceed 10% of the
issued ordinary share capital of the Company on that Date of Grant; or

 

(B)                                the total number of Shares issued or committed to be issued during
the preceding five years under the Scheme and under all other employee share
schemes established by the Company would exceed 5% of the issued ordinary share
capital of the Company on that Date of Grant;

 

PROVIDED that, for the avoidance of doubt, Shares
which shall have been the subject of grants which lapse shall not be taken into
account for the purposes of this Rule 4.

 

5.                                       Exercise Price

 

(A)
Subject to Rule 6 below the Exercise Price shall be such amount as the Board
shall determine being an amount not less than the greater of:-

 

(i)                                     subject to Rule 5(B), eighty per cent. of the middle market
quotation per Share as derived from the Daily Official List of the London Stock
Exchange for the dealing day immediately preceding the Invitation Date; and

 

(ii)                                  in the case of an Option to subscribe for Shares, the nominal value
of a Share.

 

(B)                                For the purposes of an Option granted at any other time at which
there shall be no dealings in the Shares, the Exercise Price shall be not less
than eighty per cent. of such sum as may be agreed by the Inland Revenue in
advance for the purposes of the Scheme to be the market value of a Share in
accordance with Part VIII of the Taxation of Chargeable Gains Act 1992.

 

6.                                       Adjustment of Options

 

In the
event of any variation in the share capital of the Company whether by way of
capitalisation of profits or reserves or by way of rights or any consolidation
or sub-division or reduction of capital, or otherwise, then the number of
Shares subject to any Subsisting Option and the Exercise Price may be adjusted
by the Board in such manner and with effect from such date as the Board may
determine to be appropriate provided always that:-

 

(A)                              any such adjustment shall not take effect without the prior approval
of the Board of Inland Revenue;

 

(B)                                no such adjustment shall take effect until it has been referred to
the Auditors and the Auditors have certified in writing to the Board that the
adjustment is fair and reasonable in their opinion;

 

 

(C)                                the Exercise Price of an Option to subscribe for Shares shall not be
adjusted below the nominal value of a Share (unless the Company in general
meeting shall resolve to pay up any part of that nominal value out of
distributable reserves).

 

7.                                       Exercise of Options

 

(A)                              An Option shall be exercisable during the period mentioned in Rule
7(C) below in respect of all or some of the Shares over which it was granted by
the Participant completing a written notice in the prescribed form on the
reverse of the certificate issued to the Participant under Rule 3(E) specifying
the number of Shares in respect of which the Option is exercised together with
a remittance for that number of Shares calculated by reference to the Exercise
Price. The date of exercise of the Option shall be the date of receipt by the
Company of such notice and payment.

 

(B)             It is a condition of the
exercise of an Option under the Scheme that payment for the Shares shall be
made only with monies not exceeding the amount of the Repayment to the
Participant under the Savings Contract to which he has contributed in relation
to the Option.  If upon the exercise of
an Option the Repayment then due to a Participant under his Savings Contract is
less than the amount required to pay for all the Shares in respect of which it
is purportedly exercised, the Option shall be treated as exercised only in
respect of such number of Shares as may be acquired by the amount of the
Repayment and shall lapse as to the excess.

 

(C)             Save as otherwise
provided, an Option may not be exercised until the Bonus Date.  Subject only to the provisions of
Rule 7(G) below, no Option may be exercised later than six months after
the Bonus Date.

 

(D)            Notwithstanding any other
provision hereof no Option may be exercised at any time when the person seeking
to exercise it is excluded from participation in this Scheme by virtue of
either of paragraphs 10 and 11 of Schedule 3.

 

(E)              (i)                                     An Option shall cease to be exercisable upon the Participant ceasing
to be an employee or director of any member of the Group (so as to hold no such
employment or office) except where his so ceasing is by reason of:-

 

(a)                                  his retirement on reaching the Specified Age or such other age at
which he is bound to retire in accordance with the terms of his employment; or

 

(b)                                 injury, disability or redundancy within the meaning of the
Employment Rights Act 1996 or his office or employment either being in a
company which ceases to be a Subsidiary or relating to a business or part of a
business which is transferred to a person who or which is neither a Subsidiary
nor a Participating Company; or

 

 

(c)                                  his leaving service at any time other than at a time specified in
Rule 7(E)(i)(a) or (b) above, provided that such event occurs not earlier than
three years from the Date of Grant of the Option;

 

in any
of which circumstances the Option may be exercised at any time during the
period of six months from the date on which he so ceases to be an employee or
director of any member of the Group notwithstanding that the Bonus Date shall
not have occurred.

 

(ii)                                  If, at the Bonus Date, a Participant holds an office or employment
in a company which is not a Participating Company but which is:-

 

(a)                                  an Associated Company of the Company, or

 

(b)                                 a company of which the Company has Control,

 

the
Participant may exercise his Option within six months of that Bonus Date.

 

(F)                                 For the purposes of Rule 7(E) above and Rule 9 below (but for no
other purpose):-

 

(i)                                     a Participant shall not be regarded as ceasing to hold office or
employment by reason of:-

 

(a)                                  his being or becoming employed by a company which ceases to be or is
not a Participating Company but is nevertheless an Associated Company or is
under the Control of the Company; or

 

(b)                                 his ceasing to be employed full-time but continuing to be employed
on a part-time basis; and

 

(ii)                                  a Participant shall be regarded as ceasing to hold office or
employment when he holds no employment with any of the Company, any Associated
Company and any company Controlled by the Company.

 

(G)                                In the event of the death of a Participant prior to the Bonus Date
the Option may be exercised by his personal representatives at any time during
the period of twelve months commencing on the date of his death (but not later)
and the personal representatives shall be entitled to do so notwithstanding
that the Bonus Date has not occurred and in the event of the death of a
Participant within six months commencing on the Bonus Date his personal
representatives may exercise the Option at any time within twelve months
commencing on the Bonus Date PROVIDED THAT such personal representatives shall
not be entitled to exercise the Option if at the date of the Participant’s
death the Participant was precluded from exercising the Option by reason of
either of paragraphs 10 and 11 of Schedule 3.

 

 

(H)                               A Participant who reaches the Specified Age prior to the Bonus Date
but continues to hold the office or employment by virtue of which he is
eligible to participate in the Scheme may exercise the Option within six months
after the date of his reaching the Specified Age.

 

(I)                                    If an Option becomes exercisable under any provision of the Scheme
before the Bonus Date it shall be exercisable only over the number of Shares
the aggregate Exercise Price of which equals (as nearly as may be) but does not
exceed the Repayment made under the Savings Contract entered into on the grant
of that Option but excluding any contributions made directly by the Participant
except to the extent that such are (i) made pursuant to any special
arrangements relating to absence from employment; or (ii) made at the same rate
of contribution and at the same intervals as those contributions previously
deducted from his salary pursuant to the provisions of Rule 3(C)(ii)(b) between
the date of the Participant ceasing to be employed by the Group and the date on
which the Option is exercised; and the Option shall cease to be exercisable
over any Shares in excess of that number in respect of which it was
granted.  For the avoidance of doubt,
any Repayment under the Savings Contract shall exclude the Repayment of any
contributions made in advance under the Savings Contract the due date for
payment of which falls or would have fallen more than one month after the date
on which Repayment is made.

 

(J)                                   An Option shall be exhausted and automatically cancelled immediately
after it is first exercised notwithstanding that it shall not have been
exercised in respect of all of the Shares over which the Option was granted.

 

8.                                       Lapse of Options

 

A
Participant’s Option shall lapse and cease to be exercisable:-

 

(A)                                 upon the expiry of any of the periods for exercise under the
provisions of Rule 7 (with the exception of paragraph (H) thereof) above and
Rule 9 below, whichever shall first occur; or

 

(B)                                   if the Participant omits seven or more times to make a monthly payment
due under his Savings Contract or gives notice under the Savings Contract
requiring Repayment before the Bonus Date unless such non-payment or notice is
in consequence of his ceasing to be an Eligible Employee by virtue of one of
the causes mentioned in Rule 7 paragraphs (E) (G) or (H)
above or in the circumstances of Rule 9 below.

 

9.                                       Takeover and Liquidation

 

(A)                              If any person obtains Control of the Company as a result of making:-

 

(i)                                     a general offer to acquire the whole of the issued share capital of
the Company which is made on a condition such that if it is satisfied the
person making the offer will have Control of the Company; or

 

 

(ii)                                     a general offer to acquire all the shares in the Company which are
of the same class as the Shares;

 

then
any Subsisting Option may subject to paragraph (D) below be exercised within
six months of the time when the person making the offer has obtained Control of
the Company and any condition subject to which the offer is made has been
satisfied.

 

(B)                                If under Section 425 of the Companies Act 1985 the Court
sanctions a compromise or arrangement proposed for the purposes of or in
connection with a Scheme for the reconstruction of the Company or its
amalgamation with any other company or companies, any Subsisting Option may
subject to paragraph (D) below be exercised within six months of the Court
sanctioning the compromise or arrangement.

 

(C)                                If any person becomes bound or entitled to acquire shares in the
Company under Sections 428 to 430 of the Companies Act 1985 any Subsisting
Option may subject to paragraph (D) below be exercised at any time when that
person remains so bound or entitled.

 

(D)                               If as a result of the events specified in paragraphs (A) or (B)
above a company has obtained Control of the Company, or if a company has become
bound or entitled as mentioned in paragraph (C) above, any Participant may by
agreement with that other company (the “Acquiring Company”) within the
Appropriate Period as defined in paragraph 38(3) of Schedule 3 release any
Subsisting Option of his in consideration of the grant of a new Option (the
“New Option”) which satisfies the following conditions:-

 

(i)                                     the New Option shall be over shares in the Acquiring Company or
another company which satisfies paragraph (b) or (c) of Paragraph 18 of
Schedule 3 in relation to the Acquiring Company and shall satisfy the
conditions specified in paragraphs 18 to 22 inclusive of Schedule 3;

 

(ii)                                  the New Option shall be a right to acquire such number of such
shares in the Acquiring Company (or such other company) as shall have on the
grant of the New Option an aggregate market value equal to the aggregate market
value of the Shares subject to the Option immediately before its release and
for this purpose market value shall be ascertained by the application of Rule
5(i) as at the date of release of the Option and grant of the New Option;

 

(iii)                               the New Option shall have an Exercise Price such that the aggregate
price payable on complete exercise equals the aggregate price which would have
been payable on complete exercise of the Option; and

 

(iv)                              the New Option shall be otherwise identical in terms to the Option

 

 

AND the New Option shall, for all other purposes of
this Scheme, be treated as having been acquired at the same time as the Option
in consideration of the release of which it is granted.  With effect from the release of any Option
pursuant to this Rule 9, Rules 6, 7(A) and (B), this Rule 9 and Rule 10 of this
Scheme shall in relation to the New Option be construed as if references therein
to “the Company” were references to the Acquiring Company or, as the case may
be, such other company and all the Rules (other than Rules 3 to 5 inclusive)
shall in relation to the New Option be construed as if references therein to
Shares were references to shares in the Acquiring Company or, as the case may
be, such other company in respect of whose shares the New Option is granted.

 

(E)                                 If the Company passes a resolution for voluntary winding up, any
Subsisting Option may be exercised within six months of the passing of the
resolution.

 

(F)                                 For the purposes of this Rule 9 other than paragraph (D) above a
person shall be deemed to have obtained Control of a Company if he and others
acting in concert with him have together obtained Control of it.

 

(G)                                The exercise of an Option pursuant to the preceding provisions of
this Rule 9 shall be subject to the provisions of Rule 7 above.

 

(H)                               Any Option shall lapse if:-

 

(i)                                     it shall not have been exercised by the expiry of any time limit for
exercise set out in this Rule 9, whichever shall expire first;  and

 

(ii)                                  no agreement for the release of the Option shall have been entered
into by the expiry of the first Appropriate Period to commence pursuant to
paragraph (D) above.

 

10.                                 Allotment and Listing

 

(A)                              Subject to receipt of the appropriate remittance:-

 

(i)                                     Shares to be issued pursuant to the exercise of an Option will be
allotted not later than thirty days after the exercise of the Option and will
rank pari passu in all respects with the Shares in issue on the date of
exercise save that they will not rank for any dividend or other distribution
paid or made by reference to the date (known as the record date) on which
entitlement to the dividend or distribution is fixed by reference to the
Company’s register of members if that date falls prior to the date of exercise
of the Option; and

 

(ii)                                  in the case of Shares to be transferred pursuant to the exercise of
an Option, the Grantor shall transfer or procure that the Shares shall be
transferred within 30 days after exercise of the Option, save that such Shares
will not rank for any dividend or other distribution paid or made by reference
to the date

 

 

(known as the record date) on which entitlement to the
dividend or distribution is fixed by reference to the Company’s register of
members if that date falls prior to the date of exercise of the Option.

 

(B)                                If the Shares are listed on the London Stock Exchange at the date of
allotment of any Shares pursuant to the Scheme the Company will apply to the
Council of the London Stock Exchange for permission for such Shares so allotted
to be admitted to the Official List.  An
application may be postponed at the discretion of the Board until application
can be made in respect of such number of Shares as the Board considers appropriate.

 

11.                                 Employment Rights

 

(A)                              This Scheme shall not form part of any contract of employment
between any member of the Group and any employee of any such company and the
rights and obligations of any individual under the terms of his office or
employment with any member of the Group shall not be affected by his
participation in the Scheme or any right which he may have to participate
therein

 

(B)                                Participation in the Scheme shall be on the express condition that:-

 

(i)                                     neither it nor cessation of participation shall afford any
individual under the terms of his office or employment with any member of the
Group any additional or other rights to compensation or damage; and

 

(ii)                                  no damages or compensation shall be payable in consequence of the
termination of such office or employment (whether or not in circumstances
giving rise to a claim for wrongful or unfair dismissal) or for any other
reason whatsoever to compensate him for the loss of any rights the Participant
would otherwise have had (actual or prospective) under the Scheme howsoever
arising but for such termination; and

 

(iii)                               the Participant shall be deemed irrevocably to have waived any such
rights to which he may otherwise have been entitled

 

(C)                                No individual shall have any claim against a member of the Group
arising out of his not being admitted to participation in the Scheme which (for
the avoidance of any doubt) is governed entirely by the Rules.

 

(D)                               No Participant shall be entitled to claim compensation from any
member of the Group in respect of any sums paid by him pursuant to the Scheme
or for any diminution or extinction of his rights or benefits (actual or
otherwise) under any Option held by him consequent upon the lapse for any
reason of any Option held by him or otherwise in connection with the Scheme and
each member of the Group shall be entirely free to conduct its affairs as it
sees fit without regard to any consequences under, upon or in relation to the
Scheme or any Option or Participant

 

 

12.                                 Administration of the Scheme

 

(A)                              The Board may make and vary such regulations (not being inconsistent
with the Scheme) as it thinks fit for the administration and implementation of
the Scheme.  The Board’s decision on any
matter concerning the Scheme or its interpretation (other than a matter to be
certified by the auditors of the Company) shall be final and binding.

 

(B)                                The Board shall be entitled by resolution to amend all or any of the
provisions of the Scheme as the Board thinks fit except that no alteration
shall be made:-

 

(i)                                     to the advantage of Participants without the prior sanction of an
ordinary resolution of the Company in general meeting except for minor
amendments to benefit the administration of the Scheme and amendments to obtain
and maintain favourable tax, exchange control or regulatory treatment for
Participants in the Scheme or for any member of the Group;

 

(ii)                                  to any rights already accrued to any Participant which would be to
the disadvantage of such Participant, without the prior consent of such
Participant; or

 

(iii)                               in relation only to Options to purchase Shares, without the prior
consent of the Trustee;

 

unless,
in any such case, the alteration is necessary to comply with any legislation
for the time being in force or with any conditions requisite to obtain or to
maintain approval of the Inland Revenue for the Scheme AND provided that, at
any time at which the Scheme is and is intended to remain so approved by the
Inland Revenue, no amendment shall take effect unless and until such amendment
shall have been approved by the Inland Revenue.

 

(C)                                Written notice of any alteration made in accordance with Rule 12(B)
shall be given to all Participants.

 

(D)                               The Company shall keep available sufficient issued and/or unissued
Shares in the capital of the Company to satisfy the exercise in full of all
Options for the time being remaining capable of being exercised.

 

(E)                                 Participants shall be sent copies of any document having a material
effect on their rights at the same time as such document is sent to holders of
Shares.

 

(F)                                 The provisions of the Company’s Articles of Association for the time
being in force with regard to the service of notices upon members of the
Company shall apply mutatis mutandis to any notice to be given by the Company
to Participants.  Any notice to be given
by the Trustee to any Participant or Eligible Employee shall be sufficiently
given if sent to his home address or place of work as last reported in writing
to the Trustee by the Company.

 

 

(G)                                Notwithstanding anything to the contrary contained herein the Board
may at any time and from time to time by resolution and without further
formality amend the Scheme in any way to the extent necessary to render the
Scheme capable of approval by the Board of Inland Revenue or any other
governmental or other regulatory body pursuant to any present or future United
Kingdom legislation.

 

(H)                               The Scheme shall be governed by English law.

 

13.                                 Termination of the Scheme

 

The Scheme may be terminated at any time by the Board
or by the Company in general meeting but in any event shall terminate on the
tenth anniversary of the Commencement Date and on such termination no further
Options shall be granted, but the subsisting rights of Participants shall not
be affected by such termination.

 

 

Imperial
Tobacco Group PLC

SHARESAVE
SCHEME

OPTION
CERTIFICATE

 

	
  Name
  of Option Holder

  	
   

  	
   

  
	
   

  
	
  Address
  of Option Holder

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
  Post
  Code

  	
   

  	
   

  
	
   

  
	
  Option
  Certificate number

  	
   

  	
   

  
	
   

  
	
  Number
  of shares granted under this option

  	
   

  	
   

  
	
   

  
	
  Date
  of grant

  	
   

  	
   

  
							

 

 

This is
to certify that the above named person was on the above date granted an option
as specified for ordinary shares of [ 
]p each in the capital of Imperial Tobacco Group PLC at an exercise
price of [     ]p per share upon and
subject to the terms of the Imperial Tobacco Group PLC Sharesave Scheme adopted
by a resolution of Imperial Tobacco Group PLC in general meeting on

[                   ].

 

 

Signed
on behalf of

 

 

	
   

  	
  Director

  	
   

  	
  Secretary

  

 

	
  NOTES:(1)

  	
   

  	
  The
  option cannot be assigned or transferred.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  In
  order to exercise your option please complete the Form of Exercise printed
  overleaf and send it together with a request for a cheque for the relevant
  exercise price of the shares and evidence of the amount repaid under your
  Sharesave contract to the Nationwide Building Society (or such other person
  as shall have been notified to you).

  

 

THIS
DOCUMENT MUST BE RETAINED.  PLEASE KEEP
IT IN A SAFE PLACE.  This certificate is
issued as a matter of record only and is not a document of title.

 

 

Imperial
Tobacco Group PLC

 

SHARESAVE
SCHEME

FORM OF EXERCISE OF OPTION

 

	
  To:

  	
   

  	
  The
  Company Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Imperial
  Tobacco Group PLC

  

 

(In
order to exercise your option you should complete, sign and return this
document to the Nationwide Building Society (or such other person as shall have
been notified to you))

 

1.               I wish to exercise the
option referred to on the reverse Option Certificate in respect of
[             ]
ordinary shares.  (Insert the number of
shares in respect of which the option is exercised.  If you do not wish to exercise the option for all the shares
shown on the attached certificate you may exercise options for a lesser
number.)

 

2.               I enclose a cheque for
£                 in
favour of Imperial Tobacco Group PLC/Trustee being the total exercise price
payable under this option for the above specified number of ordinary shares
together with evidence of the amount repaid to me under my SAYE.

 

 

Personal
Details

 

	
  SURNAME

  	
   

  	
   MR/MRS/MISS/MS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FIRST
  NAMES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOME
  ADDRESS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POST
  CODE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   DATE

  	
   

  	
   

  
												

 

 

NOTE:                                                       This option may be exercised only by the person to whom it was
granted or their personal representative(s).

 

IF YOU
ARE IN ANY DOUBT, PLEASE CONTACT YOUR/THE SCHEME ADMINISTRATORExhibit 4.6

 

IMPERIAL TOBACCO GROUP PLC

 

 

THE IMPERIAL TOBACCO GROUP

INTERNATIONAL SHARESAVE PLAN

 

 

ASHURST
MORRIS CRISP

Broadwalk House,

5 Appold Street,

LONDON EC2A 2HA

 

Tel:  020 7638 1111

Fax:  020 7638 1112

 

 

THE IMPERIAL TOBACCO GROUP

INTERNATIONAL SHARESAVE PLAN

 

CONTENTS

 

CLAUSE

 

	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Commencement and Title

  	
   

  
	
  3.

  	
  Grant of Option

  	
   

  
	
  4.

  	
  Limitations on the issue
  of Shares

  	
   

  
	
  5.

  	
  Exercise Price

  	
   

  
	
  6.

  	
  Alterations of Share
  Capital

  	
   

  
	
  7.

  	
  Exercise of Options

  	
   

  
	
  8.

  	
  Lapse of Option

  	
   

  
	
  9.

  	
  Takeover and Liquidation

  	
   

  
	
  10.

  	
  Allotment and Listing

  	
   

  
	
  11.

  	
  Employment Rights

  	
   

  
	
  12.

  	
  Administration of the Plan

  	
   

  
	
  13.

  	
  Termination of the Plan

  	
   

  
	
  14.

  	
  General

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  	
   

  
	
  APPENDIX
  1

  	
   

  	
   

  
	
  APPENDIX
  2

  	
   

  	
   

  
	
  APPENDIX 3

  	
   

  	
   

  
	
  APPENDIX
  4

  	
   

  	
   

  
	
  APPENDIX
  5

  	
   

  	
   

  
	
  APPENDIX
  6

  	
   

  	
   

  
	
  APPENDIX
  7

  	
   

  	
   

  
	
  APPENDIX
  8

  	
   

  	
   

  
	
  APPENDIX
  9

  	
   

  	
   

  
	
  APPENDIX 10

  	
   

  	
   

  
	
  APPENDIX 11

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
   

  	
   

  
				

 

 

1.                                                Definitions

 

In this Plan (unless the context otherwise requires)
the following words and expressions have the following meanings:-

 

	
  “Act”

  	
   

  	
  the
  United Kingdom Income and Corporation Taxes Act 1988 and any statutory
  re-enactment or modification thereof;

  
	
   

  	
   

  	
   

  
	
  “Adoption
  Date”

  	
   

  	
  the
  date on which the Plan is adopted by the Company in general meeting;

  
	
   

  	
   

  	
   

  
	
  “ADS”

  	
   

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

  
	
   

  	
   

  	
   

  
	
  “Application
  Period”

  	
   

  	
  such
  period as the Board may determine but being a period not more than 28 days
  from an Invitation Date;

  
	
   

  	
   

  	
   

  
	
  “Associated
  Company”

  	
   

  	
  means
  any company Controlling or under the Control of the Company or which is
  Controlled by the same person or persons as Control the Company;

  
	
   

  	
   

  	
   

  
	
  “Auditors”

  	
   

  	
  the
  auditors for the time being of the Company;

  
	
   

  	
   

  	
   

  
	
  “Board”

  	
   

  	
  the
  Board of Directors for the time being of the Company (or the directors
  present at a duly convened meeting of such Board) or a duly authorised
  committee thereof;

  
	
   

  	
   

  	
   

  
	
  “Commencement
  Date”

  	
   

  	
  subject
  to the approval of the Plan by shareholders in general meeting such date as
  the Board shall, in its discretion, determine;

  
	
   

  	
   

  	
   

  
	
  “Companies
  Act 1985”

  	
   

  	
  the
  Companies Act 1985 of England and Wales;

  
	
   

  	
   

  	
   

  
	
  “Company”

  	
   

  	
  Imperial
  Tobacco Group PLC;

  
	
   

  	
   

  	
   

  
	
  “Continuous
  Service”

  	
   

  	
  service
  with any company which is or was a Subsidiary (including, if the Board shall
  so determine in any case to which it is relevant, service with such company
  before it became a Subsidiary) which shall be aggregated with service with a
  Participating Company provided all such service has been continuous.  In the case of an employee employed in
  full-time employment by a Participating Company who is absent from such employment
  for any reason for a period during which such employee’s contract of service
  subsists, or by reason of maternity leave, and who then returns to such
  full-time employment with a Participating Company then in calculating

  

 

1

 

	
   

  	
   

  	
  service
  any such period of absence shall be deemed to have formed part of his
  continuous service;

  
	
   

  	
   

  	
   

  
	
  “Control”

  	
   

  	
  the
  power of a person to secure:-

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  by
  the holding of shares or possession of voting power in or in relation to any
  company; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  by
  virtue of any powers conferred by the articles of association or other
  document regulating any company,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  that
  the affairs of any company are conducted in accordance with the wishes of
  that person;

  
	
   

  	
   

  	
   

  
	
  “Date
  of Grant”

  	
   

  	
  the
  date on which the Grantor passes a resolution to grant an Option under Rule
  3(D) below;

  
	
   

  	
   

  	
   

  
	
  “Eligible
  Employee”

  	
   

  	
  any
  employee (including a director holding a salaried employment or office) of a
  Participating Company who (a) on the relevant Date of Grant has achieved such
  period of Continuous Service not exceeding five years as the Board shall in
  each case on or before the Invitation Date determine and (b) in the case only
  of a director holding a salaried employment or office, usually works at least
  twenty-five hours per week excluding time off permitted for meal breaks
  provided that the Board may also treat any other employee or director of a
  Participating Company who fails to fulfil the relevant criteria as an
  Eligible Employee PROVIDED HOWEVER THAT at the Invitation Date no notice of
  termination of such employment has been served by either the employee
  concerned or his employing Participating Company;

  
	
   

  	
   

  	
   

  
	
  “Exercise
  Price”

  	
   

  	
  the
  price per Share at which a Participant may acquire Shares pursuant to the
  Plan (as determined in accordance with Rule 5);

  
	
   

  	
   

  	
   

  
	
  “Grantor”

  	
   

  	
  either
  the Board or the Trustee;

  
	
   

  	
   

  	
   

  
	
  “Group”

  	
   

  	
  the
  Company and its Subsidiaries from time to time;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Imperial
  Tobacco Group

  Sharesave Scheme”

  	
   

  	
  the
  Imperial Tobacco Group Sharesave Scheme adopted on 14 August 1996, as
  amended from time to time;

  
	
   

  	
   

  	
   

  
	
  “Invitation
  Date”

  	
   

  	
  the
  date upon which invitations to apply for Options are issued by the Board,
  being a date within forty two days after the Commencement Date and thereafter
  within twenty-eight days after the date of public announcement of the annual
  or half yearly results of the Group;

  
	
   

  	
   

  	
   

  
	
  “London
  Stock Exchange”

  	
   

  	
  the
  London Stock Exchange Limited.

  

 

2

 

	
  “Normal
  Repayment Date”

  	
   

  	
  means
  in relation to any Participant the first day of the month following the date
  on which the Participant makes, or should have made, the final specified
  contribution (as defined in Rule 3(C)) to the Savings Plan and for this
  purpose the starting date of the Savings Plan shall be the first day of the
  month following that in which the first such specified contribution is made
  to the Savings Plan;

  
	
   

  	
   

  	
   

  
	
  “Option”

  	
   

  	
  a
  right to acquire Shares, or ADSs, granted pursuant to the Plan;

  
	
   

  	
   

  	
   

  
	
  “Participant”

  	
   

  	
  a
  person who holds a Subsisting Option or (where the context admits) his
  personal representatives;

  
	
   

  	
   

  	
   

  
	
  “Participating
  Company”

  	
   

  	
  any
  member of the Group which the Board has designated as such for the time
  being;

  
	
   

  	
   

  	
   

  
	
  “Plan”

  	
   

  	
  The
  Imperial Tobacco Group International Sharesave Plan as amended from time to
  time;

  
	
   

  	
   

  	
   

  
	
  “Relevant
  Multiple”

  	
   

  	
  such
  number of monthly contributions to a Savings Plan as the Board may, in its
  discretion, invite Eligible Employees to make in connection with the grant of
  an Option under the Plan, and, where the context admits or requires, the
  number of such contributions to which a particular Participant shall have
  committed himself;

  
	
   

  	
   

  	
   

  
	
  “Repayment”

  	
   

  	
  in
  relation to a Savings Plan, the amount of the contributions repayable and,
  where relevant, of any bonus and/or interest payable under the Savings Plan;

  
	
   

  	
   

  	
   

  
	
  “Savings
  Plan”

  	
   

  	
  means
  any savings plan or arrangement which has been approved by the Board in its
  absolute discretion for the purposes of the Plan;

  
	
   

  	
   

  	
   

  
	
  “Schedule 9”

  	
   

  	
  Schedule 9
  to the Act;

  
	
   

  	
   

  	
   

  
	
  “Share”

  	
   

  	
  a
  fully paid ordinary share in the capital of the Company;

  
	
   

  	
   

  	
   

  
	
  “Specified
  Age”

  	
   

  	
  60;

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

  	
  means
  any company in relation to which the Company:-

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  holds
  a majority of the voting rights; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  is a
  member and has the right to appoint or remove a majority of its board of
  directors; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  is a
  member and controls alone, pursuant to an agreement with other shareholders
  or members, a majority of the voting rights in it;

  

 

3

 

	
   

  	
   

  	
  and
  includes any other company which is a subsidiary as defined above of a
  company which is itself a subsidiary of the Company;

  
	
   

  	
   

  	
   

  
	
  “Subsisting
  Option”

  	
   

  	
  an
  Option to the extent that it has neither lapsed nor been exercised;

  
	
   

  	
   

  	
   

  
	
  “Trustee”

  	
   

  	
  the
  trustee or trustees for the time being of any employee trust established by
  the Company wholly or partly for the benefit of all or most of the persons
  for the time being employed by or holding office with the Group or any
  Participating Company or Companies which has been designated by the Board as
  a trust out of which Options may be granted.

  

 

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

 

2.                                                Commencement and Title

 

The Plan shall commence on the Commencement Date and
shall be known as The Imperial Tobacco Group International Sharesave Plan.

 

3.                                                Grant of Option

 

(A)                              On or
prior to an Invitation Date the Board in its absolute discretion may decide to
invite applications for the grant of Options.

 

(B)                                Where
applications are invited, the Board shall determine whether or not invitations
shall be sent to all Eligible Employees (and, for the avoidance of doubt, the
Board may send invitations to Eligible Employees of Participating Companies in
one jurisdiction but not to Eligible Employees of Participating Companies in
other jurisdictions) and any such invitations must state:-

 

(i)                                             the Exercise Price or the method by which the Exercise Price for the
Shares will be notified to Eligible Employees; and,

 

(ii)                                          the date being the last day of the Application Period by which
applications for the grant of Options must have been received by the Board or
such person as the Board may direct being not more than twenty eight days after
the date of issue of such invitations; and,

 

(iii)                                       the Relevant Multiple or Multiples.

 

(C)                                Applications
for Options under the Plan shall be in such form as the Board may require and
each:-

 

(i)                                             must be accompanied by a duly completed application form to enter
into a Savings Plan under which the applicant will agree to make the Relevant
Multiple of such specified contributions being not less than £10 per month nor
(when aggregated with contributions made under any other subsisting Savings
Plan and/or under any other savings contract linked to the Imperial Tobacco
Group Sharesave Scheme) more than £250 per month, or the equivalent sums at the
Invitation Date in the currency of their country of employment (or such other
amounts or currency or currencies as may from time to time be permitted by the
Board under the Savings Plan) as shall be estimated (on the basis of such rate
of

 

4

 

exchange as the Board shall designate on or before the
Invitation Date) to secure on the Normal Repayment Date, as nearly as may be,
Repayments of an amount equal to that for which Shares may be acquired under
his Option if exercised in full; and

 

(ii)                                          shall empower the Board or any person authorised by it:-

 

(a)     to amend the
amount of the specified contribution referred to in Rule 3(C)(i) above to such
lesser sum as shall secure on the Normal Repayment Date, as nearly as may be,
Repayments of an amount equal to that for which Shares may be acquired by the
Participant in the event that the number of Shares for which an Eligible
Employee applies for an Option has to be reduced in accordance with Rule 3(D)
below;

 

(b)    to deduct
from the Participant’s pay such contribution as shall be specified by the
Participant pursuant to Rule 3(C)(i) above or as may be amended pursuant to
Rule 3(C)(ii)(a) above and pay the same on behalf of the Participant in
discharge of the Participant’s obligations under the Savings Plan.

 

(D)                               Within
forty-two days of the date pursuant to Rule 5(A)(i) below by reference to which
the Exercise Price was determined or in a case where the number of Shares over
which an Option is to be granted is determined by Rule 3(D) (ii) below, within
forty-nine days of such date and subject to the limitations and conditions
contained in the Plan, Options shall by resolution of the Grantor be granted to
each Eligible Employee who has made a valid application in accordance with the
following:-

 

(i)                                             Options shall be granted to the Eligible Employee in respect of that
number of Shares as would have an aggregate Exercise Price not exceeding the
Relevant Multiple of the sterling equivalent of the Eligible Employee’s
proposed monthly contributions to the Savings Plan as at the Invitation Date;
save that

 

(ii)                                          the Board may (but shall not be obliged to) make such adjustments to
the number of Shares placed under an Option as it may in its absolute
discretion determine to be appropriate taking into account the actual and
anticipated rate of interest applicable to the Eligible Employee’s Savings Plan
contributions and the actual and anticipated rate of exchange between the
savings currency and sterling (if savings are expected to be retained in a
currency other than sterling) over the period of the savings contract and such
other factor or factors, if any, as the Board may consider to be relevant; and

 

(iii)                                       where the Board in its discretion considers that it is desirable to
limit the number of Shares in respect of which Options are granted in relation
to any invitation the monthly savings contribution chosen by each applicant
under the Savings Plan shall be reduced in such manner as the Board may, in its
discretion, determine (provided that all Eligible Employees shall be treated on
a similar basis without regard to differences among Eligible Employees in
respect of remuneration, length of service or any other factor) to the extent
necessary so as to reduce the aggregate number of Shares applied for to or as
near to as shall be practicable without exceeding the said limitation.

 

(E)                                 No
payment will be required from a Participant on the grant of an Option.  Each Participant will be issued with a
certificate in the form from time to time determined by the Board.

 

(F)                                 No
Option shall be capable of being transferred by a Participant.

 

(G)                                No
Option shall be granted more than ten years after the Commencement Date.

 

5

 

(H)                               The
reference in Rule 3(D)(i) above to the sterling equivalent of any amount means
the sterling equivalent determined by the Board by reference to such published
rate of exchange between sterling and the relevant currency as may be available
to the Board on or about the Invitation Date and which the Board determines in
its discretion to be appropriate.

 

(I)                                    The
Board may (but shall not be obliged to) invite those Participants whose
contributions to a Savings Plan are made in a particular currency to adjust the
rate at which they contribute to the Savings Plan at any time and from time to
time during the life of that Savings Plan if the Board considers that it may be
in the interests of those Participants to do so in the light of relative rates
of exchange, interest rates or any other factor.  No Participant shall be obliged to adjust the rate of
contribution should the opportunity to do so be offered.

 

(J)                                   Where
an Eligible Employee does not receive an application for Options and/or any
other information connected with any such application as a result of an
accidental act or omission on the part of the Board or any person authorised by
it in relation to the issue and/or distribution of such documents, that shall
not affect the validity of any other matters pertaining to the Plan.

 

4.                                                Limitations on the issue of Shares

 

Subject to Rule 6 below, no Option shall be granted on
any Date of Grant or proposed Date of Grant if, as a result:-

 

(i)                              the
aggregate number of Shares (including Shares represented by ADSs) issued or
committed to be issued during the ten years preceding such Date of Grant under
the Plan and all other share schemes (including non-approved, savings related
and profit sharing Plans) established by the Company would exceed 10% of the
issued ordinary share capital of the Company on that Date of Grant; or

 

(ii)                           the
aggregate number of Shares (including Shares represented by ADSs) issued or
committed to be issued during the preceding five years under the Plan and all
other schemes mentioned in paragraph (i) above would exceed 5% of the issued
ordinary share capital of the Company on that Date of Grant;

 

PROVIDED that, for the avoidance of doubt, Shares
(including Shares represented by ADSs) which shall have been the subject of
grants which lapse shall not be taken into account for the purposes of this
Rule 4.

 

5.                                                Exercise Price

 

(A)                              Subject
to Rule 6 below the Exercise Price shall be such amount expressed in sterling
(or in such other currency or currencies as the Board shall specify) in the
case of Options for Shares as the Board shall determine being an amount not
less than the greater of:-

 

(i)                              subject
to Rule 5(B) below eighty per cent of the middle market quotation per Share as
derived from the Daily Official List of the London Stock Exchange for the
dealing day immediately preceding the Invitation Date; and

 

(ii)                           in the case
only of an Option to subscribe for Shares, the nominal value of a Share.

 

(B)                                For
the purposes of an Option granted at any time at which there shall be no
dealings in the Shares, the Exercise Price shall be not less than eighty per
cent of such sum as may be determined by the Board to be the market value of a
Share at that time.

 

6

 

(C)                                For
the avoidance of doubt, the Board may set a different Exercise Price for Eligible
Employees of Participating Companies in one jurisdiction from those of another
jurisdiction notwithstanding that invitations may be sent out to all such
Eligible Employees on the same Invitation Date, but any such Exercise Price
must fulfil the requirements of Rule 5(A) above. 

 

6.                                                Alterations of Share Capital

 

In the event of:

 

(a)                            any variation in the share capital of the Company whether by way of
capitalisation of profits or reserves or by way of rights or any consolidation
or sub-division or reduction of capital, or otherwise;

 

(b)                           the Company paying a capital dividend;

 

(c)                            a demerger of any company within, or business owned by, the Group;
or

 

(d)                           in any other circumstances similarly affecting Options granted under
the Plan;

 

then the number of Shares subject to any Subsisting
Option and the Exercise Price may be adjusted by the Board in such manner and
with effect from such date as the Board may determine to be appropriate
provided always that:-

 

(i)                               no such adjustment shall take effect until it has been referred to
the Auditors and the Auditors have certified in writing to the Board that the
adjustment is, in their opinion, fair and reasonable; and

 

(ii)                            the Exercise Price of an Option to subscribe for Shares shall not be
adjusted below the nominal value of a Share (unless the Company in general
meeting shall resolve to pay up any part of that nominal value out of
distributable reserves).

 

7.                                                Exercise of Options

 

(A)                              The
extent to which an Option may be exercised shall be:-

 

(i)                              where
exercise takes place on or after the Normal Repayment Date related to the
Option, in full; and,

 

(ii)                            where exercise takes place earlier than the Normal Repayment Date
related to the Option (the “Early Exercise Date”), in that proportion which the
number of specified contributions which shall have been made on or before such
Early Exercise Date bears to the Relevant Multiple.

 

(B)                                An
Option shall be exercisable during the period mentioned in Rule 7(D) below in
respect of all or some of the Shares over which it was granted by the
Participant delivering to the Secretary of the Company at its registered office
(or otherwise as may be notified to Participants from time to time) a written
notice in the prescribed form specifying the number of Shares in respect of
which the Option is exercised together with a remittance for that number of
Shares calculated by reference to the Exercise Price.

 

The date of exercise of the Option shall be the date
of receipt by the Company of such notice and payment.

 

(C)                                It is
a condition of the exercise of an Option under the Plan that the Participant
shall withdraw all sums due by way of Repayment under the Savings Plan to which
he has contributed in relation to the Option.

 

7

 

If upon
the exercise of an Option the Repayment then due to a Participant under his
Savings Plan is less than the amount required to pay for all the Shares in
respect of which it may be exercised pursuant to Rule 7(A) above the
Participant may add to the Repayment up to a maximum of such sum as shall be
necessary to pay for all such Shares. 
If the Repayment shall exceed the amount required to exercise the Option
to the extent possible (or to the extent to which it is in fact exercised, if
lower) such excess shall be paid to the Participant.

 

(D)                               Save as
otherwise provided, an Option may not be exercised until the Normal Repayment
Date.  Subject only to the provisions of
Rule 7(G) below, no Option may be exercised later than six months after the
Normal Repayment Date.

 

(E)                                 An
Option shall cease to be exercisable upon the Participant ceasing to be an
employee or director of any member of the Group (so as to hold no such
employment or office) except where his so ceasing is by reason of:-

 

(i)                                             his retirement on reaching the Specified Age or such other age at
which he is bound to retire in accordance with the terms of his employment; or

 

(ii)                                          injury, disability or redundancy or his office or employment either
being in a company which ceases to be a Subsidiary or relating to a business or
part of a business which is transferred to a person who or which is neither a
Subsidiary nor a Group company; or

 

(iii)                                       his leaving service at any time other than at a time specified in
sub-paragraph (i) or (ii) above, provided that such event occurs not earlier
than three years from the Date of Grant of the Option;

 

in any
of which circumstances the Option may be exercised at any time during the
period of six months from the date on which he so ceases to be an employee or
director of any member of the Group notwithstanding that the Normal Repayment
Date shall not have occurred.

 

(F)                                 For
the purposes of Rule 7(E) above and Rule 9 below (but for no other purpose):-

 

(i)                                             a Participant shall not be regarded as having ceased to hold office
or employment by reason of:-

 

(a)     his being or
becoming employed by a company which ceases to be or is not a Participating
Company but is nevertheless an Associated Company or is under the Control of
the Company; or

 

(b)    his ceasing
to be employed full-time but continuing to be employed on a part-time basis;
and

 

(ii)                                          a Participant shall be regarded as ceasing to hold office or
employment when he holds no employment with any of the Company, any Associated
Company and any company Controlled by the Company.

 

(G)                                In the
event of the death of a Participant prior to the Normal Repayment Date the
Option may be exercised by his personal representatives at any time during the
period of twelve months commencing on the date of his death (but not later) and
the personal representatives shall be entitled to do so notwithstanding that
the Normal Repayment Date has not occurred and in the event of the death of a
Participant within six months commencing on the Normal Repayment Date his
personal representatives may exercise the Option at any time within twelve
months commencing on the Normal Repayment Date.

 

8

 

(H)                               A
Participant who reaches the Specified Age prior to the Normal Repayment Date
but continues to hold the office or employment by virtue of which he is
eligible to participate in the Plan may exercise the Option within six months
after the date of his reaching the Specified Age.

 

(I)                                    If
an Option becomes exercisable under any provision of the Plan before the Normal
Repayment Date it shall be exercisable only to the extent permitted by Rules
7(A) and (C) above.  The Repayment made
under the Savings Plan entered into on the grant of an Option shall exclude any
contributions made direct by the Participant except to the extent that such are
made pursuant to any special arrangements relating to absence from
employment.  For the avoidance of doubt,
any Repayment under the Savings Plan shall exclude the Repayment of any
contributions made in advance under the Savings Plan the due date for payment
of which falls or would have fallen more than one month after the date on which
Repayment is made.

 

(J)                                   An
Option shall be exhausted and automatically cancelled immediately after it is
first exercised notwithstanding that it shall not have been exercised in
respect of all of the Shares over which the Option was granted.

 

8.                                                Lapse of Option

 

A Participant’s Option shall lapse and cease to be
exercisable:-

 

(A)                                      upon the expiry of any of the periods for exercise under the
provisions of Rule 7 above and Rule 9 below, whichever shall first occur; or

 

(B)                                        if the Participant omits seven or more times to make a monthly
payment due under his Savings Plan or gives notice under the Savings Plan
requiring Repayment before the Normal Repayment Date unless such non-payment or
notice is in consequence of his ceasing to be an Eligible Employee by virtue of
one of the causes mentioned in Rules 7(E) or (G) above or in the circumstances
of Rules 7 (H) above or Rule 9 below .

 

9.                                                Takeover and Liquidation

 

(A)                              If any
person obtains Control of the Company as a result of making:-

 

(i)                                             a general offer to acquire the whole of the issued share capital of
the Company (not otherwise held or contracted to be acquired by the offeror)
which is made on a condition such that if it is satisfied the person making the
offer will have Control of the Company; or

 

(ii)                                          a general offer to acquire all the shares in the Company which are
of the same class as the Shares (including the Shares represented by ADSs);

 

then
any Subsisting Option may be exercised within six months of the time when the
person making the offer has obtained Control of the Company and any condition
subject to which the offer is made has been satisfied.

 

(B)                                If
under Section 425 of the Companies Act 1985 the Court sanctions a compromise
or arrangement proposed for the purposes of or in connection with a Plan for
the reconstruction of the Company or its amalgamation with any other company or
companies, any Subsisting Option may be exercised within six months of the
Court sanctioning the compromise or arrangement.

 

(C)                                If any
person becomes bound or entitled to acquire shares in the Company under
Sections 428 to 430 of the Companies Act 1985 any Subsisting Option may be
exercised at any time when that person remains so bound or entitled.

 

9

 

(D)                               If as a
result of the events specified in Rules 9(A) or (B) above a company has
obtained Control of the Company, or if a company has become bound or entitled
as mentioned in Rule 9(C) above, any Participant may by agreement with that
other company (the “Acquiring Company”) within the Appropriate Period as
defined in paragraph 15(2) of Schedule 9 release any Subsisting Option of
his in consideration of the grant of a new Option (the “New Option”) which
satisfies the following conditions:-

 

(i)                                             the New Option shall be over shares in the Acquiring Company or
another company which satisfies paragraph (b) or (c) of Paragraph 10 of
Schedule 9 in relation to the Acquiring Company and shall satisfy the
conditions specified in paragraphs 10 to 14 inclusive of Schedule 9;

 

(ii)                                          the New Option shall be a right to acquire such number of such
shares in the Acquiring Company (or such other company) as shall have on the
grant of the New Option an aggregate market value equal to the aggregate market
value of the Shares subject to the Option immediately before its release and
for this purpose market value shall be ascertained by the application of Rule
5(A)(i) above as at the date of release of the Option and grant of the New
Option;

 

(iii)                                       the New Option shall have an Exercise Price such that the aggregate
price payable on complete exercise equals the aggregate price which would have
been payable on complete exercise of the Option; and

 

(iv)                                      the New Option shall be otherwise identical in terms to the Option

 

AND the New Option shall, for all other purposes of
this Plan, be treated as having been acquired at the same time as the Option in
consideration of the release of which it is granted.  With effect from the release of any Option pursuant to Rules 6,
7(A), (B) and (C), this Rule 9 and Rule 10 of this Scheme shall in relation to
the New Option be construed as if references therein to “the Company” were
references to the Acquiring Company or, as the case may be, such other company
and all the Rules (other than Rules 3 to 5 inclusive) shall in relation to the
New Option be construed as if references therein to Shares were references to
shares in the Acquiring Company or, as the case may be, such other company in respect
of whose shares the New Option is granted.

 

(E)                                 If
the Company passes a resolution for voluntary winding up, any Subsisting Option
may be exercised within six months of the passing of the resolution.

 

(F)                                 For
the purposes of this Rule 9 a person shall be deemed to have obtained Control
of a Company if he and others acting in concert with him have together obtained
Control of it.

 

(G)                                The
exercise of an Option pursuant to the preceding provisions of this Rule 9 shall
be subject to the provisions of Rule 7 above.

 

(H)                               Any
Option shall lapse if:-

 

(i)                               it shall not have been exercised by the expiry of any time limit for
exercise set out in this Rule 9, whichever shall expire first; and

 

(ii)                            no agreement for the release of the Option shall have been entered
into by the expiry of the first Appropriate Period to commence pursuant to Rule
9(D) above.

 

10.                                          Allotment and Listing

 

(A)                              Subject
to receipt of the appropriate remittance, Shares to be acquired pursuant to the
exercise of an Option will be allotted or transferred not later than forty-five
(45) days after the exercise of the Option and

 

10

 

will
rank pari passu in all respects with the Shares in issue on the date of
exercise save that they will not rank for any dividend or other distribution
paid or made by reference to the date (known as the record date) on which
entitlement to the dividend or distribution is fixed by reference to the
Company’s register of members if that date falls prior to the date of exercise
of the Option.

 

(B)                                If the
Shares are listed on the London Stock Exchange at the date of allotment of any
Shares pursuant to the Plan the Company will apply to the London Stock Exchange
for permission for such Shares so allotted to be admitted to the Official
List.  An application may be postponed
at the discretion of the Board until application can be made in respect of such
number of Shares as the Board consider appropriate.

 

11.                                          Employment Rights

 

(A)                              This
Plan shall not form part of any contract of employment between any member of
the Group and any employee of any such company and the rights and obligations
of any individual under the terms of his office or employment with any member
of the Group shall not be affected by his participation in the Plan or any
right which he may have to participate therein.

 

(B)                                Participation
in the Plan shall be on the express condition that:-

 

(i)                                             neither it nor cessation of participation shall afford any
individual under the terms of his office or employment with any member of the
Group any additional or other rights to compensation or damages; and

 

(ii)                                          no damages or compensation shall be payable in consequence of the
termination of such office or employment (whether or not in circumstances
giving rise to a claim for wrongful or unfair dismissal) or for any other
reason whatsoever to compensate him for the loss of any rights the Participant
would otherwise have had (actual or prospective) under the Plan howsoever
arising but for such termination; and

 

(iii)                                       the Participant shall be deemed irrevocably to have waived any such
rights to which he may otherwise have been entitled.

 

(C)                                No
individual shall have any claim against a member of the Group arising out of
his not being admitted to participation in the Plan which (for the avoidance of
all if any doubt) is governed entirely by the Rules of the Plan.

 

(D)                               No
Participant shall be entitled to claim compensation from any member of the
Group in respect of any sums paid by him pursuant to the Plan or for any
diminution or extinction of his rights or benefits (actual or otherwise) under
any Option held by him consequent upon the lapse for any reason of any Option
held by him or otherwise in connection with the Plan and each member of the
Group shall be entirely free to conduct its affairs as it sees fit without
regard to any consequences under, upon or in relation to the Plan or any Option
or Participant.

 

12.                                          Administration of the Plan

 

(A)                              The
Board may make and vary such regulations (not being inconsistent with the Plan)
as it thinks fit for the administration and implementation of the Plan.  The Board’s decision on any matter
concerning the Plan or its interpretation (other than a matter to be certified
by the Auditors) shall be final and binding.

 

(B)                                The
Board shall be entitled by resolution to amend all or any of the provisions of
the Plan as the Board thinks fit except that no alteration shall be made:-

 

11

 

(i)                                             to the advantage of Participants without the prior sanction of an
ordinary resolution of the Company in general meeting except for minor
amendments to benefit the administration of the Plan and amendments to obtain
or maintain favourable tax, exchange control or regulatory treatment for
Participants in the Plan or for any member of the Group; or

 

(ii)                                          to any rights already accrued to any Participant which would be to
the disadvantage of such Participant, without the prior consent of such
Participant.

 

(C)                                Written
notice of any alteration made in accordance with Rule 12(B) above shall be
given to all Participants.

 

(D)                               The
Company shall keep available sufficient issued and/or unissued Shares
(including Shares to be represented by ADSs) in the capital of the Company to
satisfy the exercise in full of all Options for the time being remaining
capable of being exercised.

 

(E)                                 Participants
shall be sent copies of any document having a material effect on their rights
at the same time as such document is sent to holders of Shares.

 

(F)                                 The
provisions of the Company’s Articles of Association for the time being in force
with regard to the service of notices upon members of the Company shall apply
mutatis mutandis to any notice to be given by the Company to Participants.

 

(G)                                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 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 PROVIDED that no such amendment shall be made to the advantage of
Participants save as specified in Rule 12(B)(i) above without the prior
approval of the Company in General Meeting.

 

13.                                          Termination of the Plan

 

The Plan may be terminated at any time by the Board or
by the Company in general meeting but in any event shall terminate on the tenth
anniversary of the Commencement Date and on such termination no further Options
shall be granted, but the subsisting rights of Participants shall not be
affected by such termination.

 

14.                                          General

 

(A)                     Any Participating
Company may provide money to the Trustee or any other person to enable them or
him to acquire Shares to be held for the purposes of the Plan, or enter into
any guarantee or indemnity for those purposes, to the extent not prohibited by
Section 151 of the Companies Act 1985.

 

(B)                       The Plan shall
be subject to, governed and construed in accordance with English law and for
the avoidance of doubt, notwithstanding any translation of the Plan rules, the
English version of the Plan rules shall prevail at all times.

 

12

 

SCHEDULE 1

 

SPECIAL
INTERNATIONAL RULES

 

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 12(G) for the
purposes of the operation of the Plan in the jurisdictions specified below:

 

Australia (Appendix 8)

 

Belgium (Appendix 1)

 

Canada (Appendix 2)

 

Czech Republic (Appendix 10)

 

France (Appendix 3)

 

Germany (Appendix 9)

 

Ireland (Appendix 5)

 

Italy (Appenix 11)

 

New Zealand (Appendix 6)

 

Singapore (Appendix 7)

 

United States (Appendix 4)

 

 

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

 

Greece

 

Hong Kong

 

Hungary

 

Kyrgyzstan

 

Netherlands

 

Poland

 

Russia

 

Slovakia

 

Slovenia

 

Taiwan

 

13

 

APPENDIX 1

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR BELGIUM

 

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

 

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

 

	
  Rule 7(A)

  	
   

  	
  this
  rule shall be deleted and replaced with

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(A)

  	
  The
  extent to which an Option may be exercised on or after the Normal Repayment
  Date related to the Option, shall be either:-

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  in
  full; or

  
	
   

  	
   

  	
  (ii)

  	
  in
  respect of a participant who ceased to be an employee or director of any
  member of the Group (so as to hold no such employment or office) in that
  proportion which the number of specified contributions, which shall have been
  made on or before the date the Participant ceased to be an employee or
  director of any member of the Group bears to the Relevant Multiple.”

  
	
   

  	
   

  	
   

  
	
  Rule 7(D)

  	
   

  	
  delete
  the words “save as otherwise provided, an” and replace with “An”.

  
	
   

  	
   

  	
   

  
	
  Rule 7(E)

  	
   

  	
  delete
  the three lines after paragraph (iii) in Rule 7(E) and replace with the
  following:-

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “in
  any of which circumstances the Option may be exercised at any time during the
  period of six months from the Normal Repayment Date.”

  
	
   

  	
   

  	
   

  
	
  Rule 7(G)

  	
   

  	
  delete
  Rule 7(G) and replace with the following:-

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(G)

  	
  In
  the event of the death of a Participant prior to the Normal Repayment Date
  the Option may be exercised by his personal representatives at any time
  during the period of the six months commencing on the Normal Repayment Date
  and in the event of the death of a Participant within six months commencing
  on the Normal Repayment Date his personal representatives may exercise the
  Option at any time within 12 months commencing on the Normal Repayment Date”.

  
	
   

  	
   

  	
   

  
	
  Rule 7(H)

  	
   

  	
  shall
  be deleted in its entirety.

  
	
   

  	
   

  	
   

  
	
  Rule 7(I)

  	
   

  	
  in
  line 1 after the words “becomes exercisable” insert “after the Normal
  Repayment Date whether or not the employee ceases to hold office or
  employment with any member of the Group” and delete the words “before the
  Normal Repayment Date” in the first and second line.

  
	
   

  	
   

  	
   

  
	
  Rule 8(B)

  	
   

  	
  shall
  be amended by deleting the reference to “Rule 7(H) above” in the final line;

  
	
   

  	
   

  	
   

  
	
  Rule 9

  	
   

  	
  Rule
  9 shall be deleted in its entirety and replaced with the following:-

  
						

 

14

 

	
   

  	
   

  	
  “9. Takeover
  and liquidation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (A)
  In the event of:-

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  a
  change of Control of the Company in accordance with Rule 9(B);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  a
  Section 425 Companies Act 1985 the Court sanctions a compromise or
  arrangement, reconstruction or amalgamation;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  a
  person becoming bound or entitled to acquire Shares pursuant to Sections
  428-430 of the Companies Act 1985;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  the
  passing of a resolution for the voluntary winding up of the Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  an
  appropriate offer or proposal shall be made to the Belgian Participants in
  respect of any Subsisting Options.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (B)

  	
  A
  person obtains control of the Company as a result of making:-

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  a general
  offer to acquire the whole of the issued share capital of the Company (not
  otherwise held or contracted to be acquired by the offeror) which is made on
  a condition such that if it is satisfied the person making the offer will
  have Control of the Company;  or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  a
  general offer to acquire all shares in the Company which are of the
  same class as the Shares (including the Shares represented by ADSs).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (C)

  	
  For
  the purposes of this Rule 9 a person shall be deemed to have obtained Control
  of a Company if he and others acting in concert with him have together
  obtained control of it.

  
								

 

15

 

APPENDIX 2

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR CANADA

 

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

 

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

 

	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Grantor”

  	
   

  	
  insert
  the words “, in the case of non-Canadian resident employees,” after the words
  “either the Board or”.

  
	
   

  	
   

  	
   

  
	
  “Trustee”

  	
   

  	
  insert
  the phrase “(excluding employees resident in Canada)” after the words “wholly
  or partly for the benefit of all or most of the persons”.

  
	
   

  	
   

  	
   

  
	
  Rule 10(B)

  	
   

  	
  is
  deleted and replaced with the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(B)

  	
  The
  Shares are currently listed on the Official List of the London Stock
  Exchange. It is within the Board’s discretion to apply for admission to the
  Official List for any subsequently allotted Shares.”

  
	
   

  	
   

  	
   

  
	
  Rule 14(A)

  	
   

  	
  is
  amended by inserting the words “authorised by the Board” after the words “Any
  Participating Company may provide money to the Trustee or any other person”.

  
					

 

16

 

APPENDIX 3 

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR FRANCE

 

 

The
purpose of this appendix is to specify the terms and conditions under which the
Plan is to be modified so as to conform with articles L225-177 to L225-186 of
the French Code
de Commerce as amended (the “Code”) and an administrative regulation
(the “Instruction”)
dated 6 May 1988, reference N-3-88 and various articles of the French Tax Code,
to the extent required under French law in order to: (i) ensure that Options
may be granted to Eligible Employees who are French residents for tax purposes
(“French
Eligible  Employees”) under the Plan; and (ii) obtain
the most favourable tax treatment of the Plan available under French law from
the perspective of the Group and any French Eligible Employee.

 

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

 

 

	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Eligible
  Employee”

  	
   

  	
  the
  following shall be added to the end of this definition;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “and the employee does not own more than 10% of the share capital of
  the Company”;

  
	
   

  	
   

  	
   

  
	
  “Participant”

  	
   

  	
  shall
  be amended by deleting the words “personal representatives” and replacing
  them with the words “héritiers (heirs)”;

  
	
   

  	
   

  	
   

  
	
  “Specified
  Age”

  	
   

  	
  shall
  be deleted;

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

  	
  the
  following paragraph shall be added to this definition;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Furthermore, a French company will only be deemed to be a subsidiary
  if, in addition to the conditions set out above, it is a company in which the
  Company holds directly or indirectly, at least 10% of the share capital
  and/or voting rights”;

  
	
   

  	
   

  	
   

  
	
  Rule 3(D)

  	
   

  	
  shall be amended by deleting the words “Within forty-two days of the
  date pursuant to Rule 5(A)(i) below by reference to which the Exercise Price
  was determined” and replacing them with the words “Within forty-two days of
  the dealing day immediately preceding the Invitation Date”;

  
	
   

  	
   

  	
   

  
	
  Rule 3(G)

  	
   

  	
  shall
  be amended to read:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “No Option will be granted more than five years after the Adoption
  Date.  No Option will be granted (i)
  during the period of twenty dealing days on the London Stock Exchange
  immediately following the payment of any cash dividend or stock dividend or
  the ex-dividend date for any such dividend, (ii) during the ten dealing days
  on the London Stock Exchange both preceding and following the date on which
  the consolidated accounts

  
					

 

17

 

	
   

  	
   

  	
  of the Company (or if consolidated accounts are not drawn up, the
  annual accounts) are made public, and (iii) during the period elapsing
  between the date on which the corporate bodies of the Company are made aware
  of information which, if made public, could have a significant impact on the
  market price of the shares of the Company, and the date which is ten dealing
  days after the date on which such information is made public.”;

  
	
   

  	
   

  	
   

  
	
  Rule 5 (A)(i)

  	
   

  	
  shall
  be deleted and replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “subject to Rule 5(B), eighty per cent of the average middle market
  quotation per Share as derived from the Daily Official List of the London
  Stock Exchange for the twenty dealing days immediately preceding the Date of
  Grant.”;

  
	
   

  	
   

  	
   

  
	
  Rule 5 (B)

  	
   

  	
  shall be deleted and replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “For the purposes of an Option granted at any time at which there
  shall be no dealings in the Shares, the Exercise Price shall be not less than
  such sum as may be determined by the Board, in accordance with the valuation
  rules set forth in article L225-177 of the Code, to be the market value
  of a Share on the Date of Grant.”;

  
	
   

  	
   

  	
   

  
	
  Rule 6

  	
   

  	
  shall
  be deleted and replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “In principle the Exercise Price shall not be modified during the
  life of the Option.  However, in the
  event of any alteration in the issued share capital of the Company (whether
  by way of capitalisation of profits or reserves or any sub-division or
  reduction of capital, or any other operation envisaged by
  article L225-181 of the Code),  then the Exercise Price may be adjusted
  by the Board in such manner and with effect from such date as the Board may
  deem appropriate in order to comply with article L225-181.”;

  
	
   

  	
   

  	
   

  
	
  Rule 7(A)

  	
   

  	
  shall
  be deleted and replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(A)

  	
  The
  extent to which an Option may be exercised shall be either:-

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  in
  full, where exercise takes place on or after the Normal Repayment Date
  related to the Option and the Participant is still an employee or director of
  a member of the Group at the time of exercise;  or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  in
  respect of a Participant who ceased to be an employee or director of any
  member of the Group (so as to hold no such employment or office) in that
  proportion which the number of specified contributions, which shall have been
  made on or before the date the Participant ceased to be an employee or
  director of any member of the Group bears to the Relevant Multiple.”

  
	
   

  	
   

  	
   

  
	
  Rule 7 (E)

  	
   

  	
  shall
  be deleted and replaced with the following:

  
								

 

18

 

	
   

  	
   

  	
  “An Option shall cease to be exercisable upon the Participant ceasing
  to be an employee or director of any member of the Group (so as to hold no
  such employment or office) except where his so ceasing is by reason of any of
  the following circumstances:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  redundancy (licenciement pour motif économique);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  his being required by his employer to take retirement (mise à la
  retraite), or his taking retirement, in both cases, in
  circumstances where he is entitled to a full pension (retraite à taux plein) and
  has reached an age at which he is entitled to exercise his pension rights (l’âge
  d’ouverture des droits à la retraite);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  invalidity corresponding to the second or third category specified in
  article L341-4 of the Code de la Sécurité Sociale;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  his office or employment being either in a company which ceases to be
  a Subsidiary or relating to a business or part of a business which is
  transferred to a person who or which is neither a Subsidiary nor a Group
  company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In cases (i) and (ii), the Option may not be exercised until the
  Normal Repayment Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In cases of (iii) and (iv), the Option may be exercised at any time
  during the period of six months from the date on which the Participant ceases
  to be an employee or director of any member of the Group notwithstanding that
  the Normal Repayment Date shall not have occurred.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In cases (i), (ii), (iii) and (iv), the Participant will not be
  allowed to make any further specified contributions to the Savings Plan for
  the purposes of this Plan after the date of cessation of employment and, for
  the avoidance of doubt, the provisions of Rule 7(A)(ii) above shall apply.”

  
	
   

  	
   

  	
   

  
	
  Rule 7(G)

  	
   

  	
  shall
  be amended to read as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “In the event of the death of a Participant prior to the Normal
  Repayment Date, the Option may be exercised by his heirs (héritiers)
  at any time during the period of six months commencing on the date of his
  death (but not later) and the relevant héritiers (heirs) shall be entitled to
  do so notwithstanding that the Normal Repayment Date has not occurred.  For the avoidance of doubt, the provisions
  of Rule 7(A)(ii) above shall apply. 
  In the event of the death of a Participant within six months
  commencing on the Normal Repayment Date, his heirs (héritiers) may exercise
  the Option at any time within the twelve months commencing on the Normal
  Repayment Date.”;

  
	
   

  	
   

  	
   

  
	
  Rule 7(H)

  	
   

  	
  shall
  be deleted in its entirety;

  
	
   

  	
   

  	
   

  
	
  Rule 8(B)

  	
   

  	
  shall
  be amended by deleting the reference to “Rule 7(H) above” in the final line;

  
	
   

  	
   

  	
   

  
	
  Rule 9

  	
   

  	
  shall
  be deleted in its entirety and replaced with the following:

  
							

 

19

 

	
   

  	
   

  	
  “9.

  	
  Takeover and Liquidation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (A)

  	
  In
  the event of:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  a change of
  Control of the Company in accordance with Rule 9(B);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  the Court
  sanctioning a compromise or arrangement, reconstruction or amalgamation under
  Section 425 Companies Act 1985;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  a person
  becoming bound or entitled to acquire Shares pursuant to Sections 428-430 of
  the Companies Act 1985;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  the passing
  of a resolution for the voluntary winding up of the Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  an appropriate offer or proposal shall be made to the French
  Participants in respect of any Subsisting Options.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (B)

  	
  A
  person obtains control of the Company as a result of making:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  a
  general offer to acquire the whole of the issued share capital of the Company
  (not otherwise held or contracted to be acquired by the offeror) which is
  made on the condition such that if it is satisfied the person making the
  offer will have the Control of the Company; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  a
  general offer to acquire all the shares in the Company which are of the same
  class as the Shares (including the Shares represented by the ADS).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (C)

  	
  For the purposes of this Rule 9 a person shall be deemed to have
  obtained Control of a Company if he and others acting in concert with him
  have together obtained control of it.”;

  
	
   

  	
   

  	
   

  
	
  Rule 12

  	
   

  	
  The
  following wording should be added to the end of this Rule:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(H)

  	
  In
  order to ensure the most favourable treatment for the Group (as a first
  priority) and for the French Eligible Employees (as a second priority) in terms
  of taxes, social security charges and all similar duties whatsoever, under
  French law from time to time in force, the Board may, in accordance with
  article L225-177 of the Code, impose an interdiction de revente immédiate
  (“Compulsory Holding Period”) during which the Shares acquired on exercise of
  any Option may not be sold by the French Eligible Employee (except in
  circumstances where such sale will not undermine a favourable regime
  otherwise applying, including for example those circumstances specified in
  article 91 ter of Annexe II of the Tax Code).  The Compulsory Holding Period may in no circumstances exceed
  three years from the date of exercise of the relevant Option.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Furthermore,
  the Board may require the French Eligible Employees to expressly undertake to
  respect a Compulsory Holding Period, and, in the event of breach of this
  undertaking, to indemnify their French employing company and any member of
  the Imperial Tobacco Group in respect of all charges, expenses or liability
  of any nature whatsoever incurred by such entities as a result of such
  breach.”

  
	
   

  	
   

  	
   

  	
   

  
	
  Rule 13

  	
   

  	
  The
  following words shall be added to this Rule:

  
						

 

20

 

	
   

  	
   

  	
  “Furthermore,
  no further Options will be granted by the Board after the fifth anniversary
  of the Adoption Date unless authorisation is given by the Company in general
  meeting for the Board to do so.  Such
  authorisation may be granted for a further period of up to 38 months.”;

  
	
   

  	
   

  	
   

  
	
  Rule 14(B)

  	
   

  	
  The
  following wording shall be added to this Rule:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “, although for the purposes of Options granted to French Eligible
  Employees, the terms and conditions of the Plan shall be interpreted in
  accordance with French law, where necessary in order to ensure compliance
  with the Code, the Instruction and the relevant articles of the Tax Code, to
  the extent required under French law in order to ensure the most favourable
  tax treatment of the Plan from the perspective of the Group, as a first
  priority, and the French Eligible Employees, as a second priority.”.

  
				

 

21

 

APPENDIX 4

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR THE UNITED STATES OF AMERICA

 

The
purpose of this appendix is to specify the terms and conditions under which the
Plan is to be modified in its application to any Option granted or to be
granted to a person resident for tax purposes in the United States of America.

 

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

 

	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Exercise
  Price”

  	
   

  	
  the
  price per Share or price per ADS at which a participant may acquire Shares or
  ADSs pursuant to the Plan (as determined in accordance with Rule 5).

  
	
   

  	
   

  	
   

  
	
  “Option”

  	
   

  	
  a
  right to acquire Shares, or ADSs, granted pursuant to the Plan.

  
	
   

  	
   

  	
   

  
	
  Rule 3(B)(i)

  	
   

  	
  insert
  “or the ADSs, if applicable,” after the words “Exercise Price for the
  Shares”.

  
	
   

  	
   

  	
   

  
	
  Rule 3(B)(ii)

  	
   

  	
  insert
  as a new Rule 3(B)(ii) the following and re-number Rule 3(B)(ii) and
  3(B)(iii) as 3(B)(iii) and 3(B)(iv) respectively.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(ii)

  	
  whether
  the Shares to be issued upon the exercise of Options may be delivered in the
  form of ADSs; and”

  
	
   

  	
   

  	
   

  
	
  Rule 3(C)(i)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares” in the
  penultimate line.

  
	
   

  	
   

  	
   

  
	
  Rule 3(C)(ii)(a)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word  “Shares” in lines 4 and 5.

  
	
   

  	
   

  	
   

  
	
  Rule 3(D)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares” in line 2.

  
	
   

  	
   

  	
   

  
	
  Rule 3(D)(i)

  	
   

  	
  insert
  the following words after “Invitation Date” in the final line:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “and,
  if permitted by the relevant invitations, Options shall be granted to the
  Eligible Employee in respect of that number of ADSs as would have an
  aggregate Exercise Price not exceeding the Relevant Multiple of the Eligible
  Employee’s proposed monthly dollar contributions to the Savings Plan as at
  the Date of Grant;”

  
	
   

  	
   

  	
   

  
	
  Rule 3(D)(ii)

  and (iii)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares” wherever that
  word occurs.

  
	
   

  	
   

  	
   

  
	
  Rule 5(A)

  	
   

  	
  in line
  3 insert the words “or expressed in dollars in the case of Options for ADSs”
  after the words “in the case of Options for Shares”.

  
	
   

  	
   

  	
   

  
	
  Rule 5(A)(i)

  	
   

  	
  insert
  after the words “Invitation Date” in the final line, the words “or eighty per
  cent of the closing price per ADS as derived from the New York Stock Exchange
  Consolidated Tape on the trading day immediately preceding the Invitation
  Date in the case of Options for ADS;”.

  

 

22

 

	
  Rule 5(A)(ii)

  	
   

  	
  insert
  at the end of this rule “or the nominal value of the Shares represented by
  ADS in the case of Options for ADSs”.

  
	
   

  	
   

  	
   

  
	
  Rule 5(B)

  	
   

  	
  insert
  after the word “Shares” in line 2 “or ADSs, if applicable” and after the
  words “market value of a Share” in the last line “or ADS, respectively”.

  
	
   

  	
   

  	
   

  
	
  Rule 6

  	
   

  	
  insert
  in the first line in the paragraph after “(d)” the words “or ADSs, if
  applicable,” after the words “the number of Shares”.

  
	
   

  	
   

  	
   

  
	
  Rule 6(ii)

  	
   

  	
  insert
  after the words “nominal value of a Share”, in line 2 “and the Exercise price
  of an Option to subscribe for ADS shall not be adjusted below the aggregate
  nominal value of the Shares represented by such ADSs”.

  
	
   

  	
   

  	
   

  
	
  Rule 7(B)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares” wherever that
  word occurs.

  
	
   

  	
   

  	
   

  
	
  Rule 7(C)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares” wherever that
  word occurs.

  
	
   

  	
   

  	
   

  
	
  Rule 7(J)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the word “Shares”.

  
	
   

  	
   

  	
   

  
	
  Rule 9(D)(ii)

  	
   

  	
  insert
  the words “or ADSs, if applicable,” after the words “Shares” in line 4.

  
	
   

  	
   

  	
   

  
	
  Rule 10(B)

  	
   

  	
  insert
  a new Rule 10(B) as set out below after Rule 10(A) and re-designate Rule
  10(B) as Rule 10(C):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “10(B)

  	
  Subject
  to receipt of the appropriate remittance, in the event ADSs are to be
  acquired pursuant to the exercise of an Option, ADSs will be transferred not
  later than forty-five days after the exercise of the Option and will rank
  pari passu in all respects with the ADSs in issue on the date of exercise
  save that they will not rank for any dividend or other distribution paid or
  made by reference to the date (known as the ADS record date) on which
  entitlement to the dividend or distribution is fixed by the Depositary if
  that date falls prior to the date of exercise of the Option.”

  
	
   

  	
   

  	
   

  
	
  Rule 10(D)

  	
   

  	
  insert
  a new Rule 10(D) as set out below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “10(D)

  	
  If
  the ADSs are listed on the New York Stock Exchange, Inc. at the date of
  transfer of ADSs pursuant to the Plan the Company will, if required, apply to
  the New York Stock Exchange, Inc. for permission for such ADSs so transferred
  to be listed on the New York Stock Exchange, Inc.”.

  
	
   

  	
   

  	
   

  
	
  Rule 14(A)

  	
   

  	
  insert
  the words “or ADSs, if applicable” after the word “Shares” in line 2.

  

 

23

 

APPENDIX 5

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR IRELAND

 

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

 

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

 

[To be
inserted on receipt of Approval from the Irish Inland Revenue Commissioners]

 

24

 

APPENDIX 6

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR NEW ZEALAND

 

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

 

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

 

1.                                                The definition of “Specified Age” in Rule 1 shall be deleted.

 

2.                                                In Rule 7 (E) (i) delete the words “on reaching Specified Age or
such other age at which he is bound to retire in accordance with the terms of
his employment”.

 

3.                                                Rule 7 (H) shall be deleted and Rules 7 (I) and (J) and any
references thereto shall be re-numbered accordingly.

 

25

 

APPENDIX 7

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL SHARESAVE PLAN

 

APPENDIX FOR SINGAPORE

 

The purpose of this appendix is to specify the terms and conditions
under which the Plan to be modified in its application to any Option granted or
to be granted to a person who is employed in Singapore by a Participating
Company.

 

Words or phrases defined in the Plan shall bear the same meaning in
this Appendix 7 except as otherwise provided.

 

	
  Rule 3(C)(ii)(b)

  	
   

  	
  this rule shall be deleted and replaced with

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “to require the Participant to furnish to the Board, in a manner
  acceptable to it, evidence satisfactory to the Board of the payment of such
  contributions in accordance with the Savings Plan as shall be specified by
  the Participant pursuant to Rule 3(C)(i) or as may be amended pursuant to
  Rule 3(C)(ii)(a)”.

  

 

26

 

APPENDIX 8

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR AUSTRALIA

 

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

 

Words
or phrases defined in the Plan shall bear the same meaning in this Appendix 8
except as otherwise provided.

 

1.                                                The definition of “Specified Age” in Rule 1 shall be deleted.

 

2.                                                In Rule 7 (E) (i) delete the words “on reaching Specified Age or
such other age at which he is bound to retire in accordance with the terms of
his employment”.

 

3.                                                Rule 7 (H) shall be deleted and Rules 7 (I) and (J) and any
references thereto shall be re-numbered accordingly.

 

27

 

APPENDIX 9

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR GERMANY 

 

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

 

Words
or phrases defined in the Plan shall bear the same meaning in this Appendix 9
except as otherwise provided.

 

1.                                                The definition of “Specified Age” in Rule 1 shall be deleted.

 

2.                                                In Rule 7 (E) (i) delete the words “on reaching Specified Age or
such other age at which he is bound to retire in accordance with the terms of
his employment”.

 

3.                                                Rule 7 (H) shall be deleted and Rules 7 (I) and (J) and any
references thereto shall be re-numbered accordingly.

 

28

 

APPENDIX 10

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL SHARESAVE PLAN

 

APPENDIX FOR CZECH REPUBLIC

 

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

 

Words
or phrases defined in the Plan shall bear the same meaning in this Appendix 10
except as otherwise provided.

 

	
  Rule
  3(C)(ii)

  	
   

  	
  this rule
  shall be deleted and replaced with

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “shall include an undertaking of the
  Participant to execute an agreement with his/her employer on deductions from
  such Participant’s salary (“Agreement on Deductions”) subject to the confirmation of the eligibility of the Participant
  by the employer. The Agreement on Deductions shall further include a joint
  obligation of the contracting parties to conclude an amendment to the
  Agreement on Deductions in the event of any of the circumstances specified in
  Rule 3(D). In particular, in the event that the number of Shares for which an
  Eligible Employee applies for an Option has to be reduced in accordance with
  Rule 3(D), the parties shall be required under this provision to conclude an
  amendment regarding reduction of the amount of regular monthly deductions
  from salary without undue delay
  of their notification in writing by the Company that
  such reduction has been approved by the Board.”

  

 

29

 

APPENDIX 11

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL SHARESAVE PLAN

 

APPENDIX
FOR ITALY

 

The
purpose of this appendix is to specify the terms and conditions under which the
Plan is to be modified as to conform with the provisions of the Italian Civil
Code and to various provisions of the Presidential Decree 22 December 1986,
no. 917 (the Italian Consolidated Tax Act “ICTA”) in order to obtain the most
favourable tax treatment of the Plan available under Italian law from the
perspective of the Group and any Italian Eligible Employee

 

Words
or phrases defined in the Plan shall bear the same meaning in this Appendix 11
except as otherwise provided.

 

	
  Rule 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Eligible
  Employee”

  	
   

  	
  shall
  be amended to read:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “any
  employee of a Participating Company which has a salaried employment on a
  permanent basis and any “collaboratore coordinato e continuativo”
  (including a director) of a Participating Company at the Invitation Date
  PROVIDED HOWEVER THAT at the Invitation Date no notice of termination of such
  employment has been served by either the employee concerned or his employing
  Participating Company. Such rule would also apply in respect of any “collaboratore
  coordinato e continuativo” (including a director) of a
  Participating Company”;

  
	
   

  	
   

  	
   

  
	
  “Participant”

  	
   

  	
  shall
  be amended by deleting the words “personal representatives” and replacing
  them with the words “eredi (heirs)”;

  
	
   

  	
   

  	
   

  
	
  “Specified
  Age”

  	
   

  	
  shall
  be deleted;

  
	
   

  	
   

  	
   

  
	
  “Subsidiary”

  	
   

  	
  shall
  be replaced as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “means
  any company in relation to which the Company:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  holds
  a majority of the voting rights in the ordinary shareholders’ meeting; or

  
	
   

  	
   

  	
  (b)

  	
  has
  sufficient voting rights in the ordinary shareholders’ meeting to exercise a
  prevailing influence therein; or

  
	
   

  	
   

  	
  (c)

  	
  exercises
  a prevailing influence on the company by virtue of specific negotial agreements;

  
	
   

  	
   

  	
  in
  accordance with the requirements of Article 2359 of the Italian Civil
  Code. Such definition also includes any other company which is a subsidiary
  as defined above of a company which is itself a subsidiary of the Company”.

  
	
   

  	
   

  	
   

  
	
  Rule 6

  	
   

  	
  shall
  be deleted and replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “In
  principle the Exercise Price shall not be modified during the life of the
  Option. However, in the event of any alteration in the issued share capital
  of the Company

  

 

30

 

	
   

  	
   

  	
  (by
  way of one of the operations envisaged by the Italian Civil Code) then the
  Exercise Price may be adjusted by the Board in such manner and with effect
  from such date as the Board may deem appropriate in order to comply with the
  provisions of the Italian Civil Code”

  
	
   

  	
   

  	
   

  
	
  Rule 7(E)

  	
   

  	
  shall
  be deleted and replaced with:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(E)

  	
  An
  Option shall cease to be exercisable upon the Participant ceasing to be an
  employee or a “collaboratore coordinato e continuativo” of any member of
  the Group (so as to hold no such employment or office) except where his so
  ceasing is by reason of any of the following circumstances:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  redundancy;
  or

  
	
   

  	
   

  	
  (ii)

  	
  his
  being required by his employer to take retirement or his taking retirement,
  in both cases, in circumstances where he is entitled to a full pension and
  has reached an age at which he is entitled to exercise his pension rights; or

  
	
   

  	
   

  	
  (iii)

  	
  invalidity;
  or

  
	
   

  	
   

  	
  (iv)

  	
  his
  office or employment being either in a company which ceases to be a
  Subsidiary or relating to a business or part of a business which is
  transferred to a person who or which is neither a Subsidiary nor a Group
  company; or

  
	
   

  	
   

  	
  (v)

  	
  his
  leaving service at any time other than that specified in sub-paragraph (i) to
  (iv) above, provided that such event occurs not earlier than three years from
  the Date of Grant;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  in
  any of which circumstances the Option may be exercised at any time during the
  period of six months from the date on which he so ceases to be an employee or
  a “collaboratore
  coordinato e continuativo” of any member of the Group
  notwithstanding that the Normal Repayment Date shall not have occurred.

  
	
   

  	
   

  	
   

  
	
  Rule 7(F)(i)

  	
   

  	
  shall
  be replaced with the following wording:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(F)

  	
  For
  the purposes of Rule 7(E) above and Rule 9 below (but for no other purpose):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  a
  Participant shall not be regarded as having ceased to hold office or
  employment by reason of:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  his being or becoming employed or a “collaboratore coordinato e continuativo”
  by a company which ceases to be or is not a Participating Company but is
  nevertheless an Associated Company or is under the Control of the Company;
  and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  a
  Participant shall be regarded as ceasing to hold office or employment when he
  holds no employment or no agreement of “collaboratore coordinato e continuativo”
  with any of the Company, any Associated Company and any company controlled by
  the Company.”

  
	
   

  	
   

  	
   

  
	
  Rule 7(G)

  	
   

  	
  shall be amended by deleting the words “personal representatives” and
  replacing them with the words “eredi (heirs)”;

  
	
   

  	
   

  	
   

  
	
  Rule 7(H)

  	
   

  	
  shall be deleted in its entirety;

  
											

 

31

 

	
  Rule 8(B)

  	
   

  	
  shall be amended by deleting the wording “or in the circumstances of
  Rule 7(H) above” in the final line;

  
	
   

  	
   

  	
   

  
	
  Rule 9

  	
   

  	
  the following words shall be added to this Rule:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “(iii)

  	
  any other operation envisaged by the Italian Civil Code for the
  acquisition of control”;

  
					

 

32

 

SCHEDULE 2

 

NOTIONAL
AWARDS

 

The
rules of the Phantom Plan shall be constituted by the rules of the Plan save as
the same (including the definitions used) are modified by the terms of this
Schedule, as set out below.

 

In
relation to any invitation made under the Plan, the terms of this
Schedule shall, unless otherwise determined by the Board, apply in respect
of Eligible Employees resident in each of the following jurisdictions
(“Relevant Employees”):-

 

 

Belgium

Macedonia

Serbia

Ukraine

 

 

1.                                           In this Plan the following terms shall have the following meanings:-

 

	
  “Award”

  	
   

  	
  the sum paid or to be paid to a Relevant Employee by way of
  remuneration in accordance with this Plan on the exercise of a Notional Award
  being the difference between the Exit Price and the Notional Exercise Price
  for each Share in respect of which the Notional Award is exercised;

  
	
   

  	
   

  	
   

  
	
  “Exit Price”

  	
   

  	
  the middle market price of a Share as derived from the London Stock
  Exchange Daily Official List for the dealing day immediately preceding that
  on which a Notional Award is exercised;

  
	
   

  	
   

  	
   

  
	
  “Notional Award”

  	
   

  	
  the notional right to acquire at the Notional Exercise Price Shares
  in accordance with the terms of the Plan;

  
	
   

  	
   

  	
   

  
	
  “Notional Gain”

  	
   

  	
  the sum paid or to be paid to a Relevant Employee by way of
  remuneration in accordance with this Plan on the exercise of a Notional Award
  being the difference between the Exit Price and the Notional Exercise Price
  for each Share in respect of which the Notional Award is exercised;

  
	
   

  	
   

  	
   

  
	
  “Notional Exercise Price”

  	
   

  	
  the price per Share at which a Participant may acquire Shares the subject
  of a Notional Award calculated in accordance with Rule 5 of the Plan;

  
	
   

  	
   

  	
   

  
	
  “Subsisting Notional Award”

  	
   

  	
  a Notional Award to the extent that it has neither lapsed nor been
  exercised;

  

 

2.                                           In Rules 3, 8, 9, 11, 12 and 13 of the Plan references to Option,
Exercise Price, and Eligible Employee shall be replaced by references to
Notional Award, Notional Exercise Price, and Relevant Employee respectively.

 

3.                                           In respect of each grant of Notional Awards, the Board shall
identify those Relevant Employees to whom Notional Awards shall be granted and
shall grant the Notional Award(s) in the same manner as

 

33

 

provided in Rule 3(D) of the Plan.  For the avoidance of doubt, Rule 3(D)(iii)
of the Plan shall apply to the grant of Notional Awards as it does for the
grant of Options under the Plan.  The
Relevant Employee will be given a certificate stating the Notional Exercise
Price and the number of Shares subject to the Notional Award.

 

4.                                       In Rule 4, for the purposes of calculating the limits contained
therein, the aggregate number of Shares shall include the number of Shares the
subject of Notional Awards.

 

5.                                       The Notional Award shall be capable of being exercised in all
respects in the same manner as an Option in accordance with Rule 7 of the Plan
save that no payment or remittance is due as provided in Rules 7(A) and (B).

 

6.                                       Rule 7(C) shall be deleted and replaced with the following:

 

“(C)                                  It is a condition of the exercise of a Notional Award under the
Phantom Plan that the Participant shall withdraw all sums due by way of
Repayment under the Savings Plan to which he has contributed in relation to the
Notional Award.  If upon the exercise of
a Notional Award the Repayment then due to a Participant under his Savings Plan
is less than the aggregate Notional Exercise Price for all the Shares in
respect of which it may be exercised pursuant to Rule 7(A) above the
Participant may add to the Repayment up to a maximum of such sum as shall be
necessary to pay for all such Shares. 
If the Repayment shall exceed the Notional Exercise Price for all the
Shares in respect of which the Notional Award can be exercised (or for the
Shares in respect of which the Notional Award is in fact exercised, if lower)
such excess shall be paid to the Participant.”(1)

 

7.                                       Rule 9(D) and 10 of the Plan shall not apply in relation to the
Notional Options.

 

8.                                       Within 30 days of receipt of the appropriate notice in accordance
with Rule 7 the Board shall procure payment to the Relevant Employee of the
Notional Gain attributable to the Shares in respect of which the Notional Award
has been exercised.

 

9.                                       There shall be made from any payment under Rule 8 of the Phantom
Plan such deductions (on account of tax, national insurance contributions,
social security contributions or similar liabilities) as may be required by law
or as the Company may reasonably consider to be necessary or desirable.

 

10.                                 If there is an adjustment to Options pursuant to Rule 6 of the Plan,
an adjustment confirmed by the Auditors in writing to be in their opinion an
equivalent adjustment shall be made to Notional Awards.

 

11.                                 Payments under Rule 8 of the Phantom Plan will not be pensionable.

 

(1)
This provision has been drafted so that if savings insufficient to acquire the
number of Shares (for equivalent real option),    Participant is required to top up his savings prior to
exercising his notional awards.

 

34

 

SPECIMEN

THE IMPERIAL TOBACCO GROUP

INTERNATIONAL SHARESAVE PLAN (the “Plan”)

 

INVITATION

(on Company headed notepaper)

 

Dear
Colleague,

 

The Directors of Imperial Tobacco Group PLC invite you
to apply for an option to acquire ordinary shares in Imperial Tobacco Group PLC
(the “Company”) under the Rules of the above Plan.

 

	
   

  	
  Enclosed
  are:-

  
	
   

  	
   

  
	
  1.

  	
  a
  booklet which explains how the Plan works;

  
	
   

  	
   

  
	
  2.

  	
  an
  application for a share option;

  
	
   

  	
   

  
	
  3.

  	
  [an
  application to open a savings account with
  [              ];

  
	
   

  	
   

  
	
  4.

  	
  a
  note explaining the terms of the savings account.

  

 

You should read these documents carefully before
deciding to commit yourself to participating. 
If you are in any doubt about any feature of the Plan, please contact •.

 

Under the Rules you are entitled to take out a savings
contract, with a monthly contribution of up to £250 or its equivalent in your
local currency.  If you wish, however,
you can take out a contract, depending upon the frequency of your salary
payments, for any amount up to the maximum, subject to a minimum contribution
of £10 per month (or the equivalent sum at the Date of Grant in the currency of
your country of employment). 

 

If you would like to join the Plan you should complete
and sign the attached Share Option Application and savings account application
forms.  THESE MUST BE RETURNED TO ME NOT
LATER THAN [   PM] ON [         ]. 
IT WILL NOT BE POSSIBLE TO CONSIDER APPLICATIONS RECEIVED AFTER THAT
DATE.

 

	
  Yours
  sincerely

  
	
   

  
	
   

  
	
  [Company
  Secretary]

  

 

35

 

SPECIMEN
THE IMPERIAL TOBACCO GROUP PLC

INTERNATIONAL SHARESAVE PLAN

 

SHARE OPTION APPLICATION

 

To:          The Plan Administrator

 

PLEASE
USE BLOCK CAPITALS

 

 

	
  SURNAME

  	
   

  	
   MR/MRS/MISS/MS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FIRST
  NAMES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOME
  ADDRESS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  POST
  CODE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PLACE
  OF EMPLOYMENT

  	
   

  	
   

  
										

 

I wish
to save up to [£       ] per month (between
£10 and £250) for 36 months (or the equivalent sums at the Date of Grant in the
currency of my country of employment)

 

	
  NOTES:

  	
  (1)

  	
  Contributions
  must be not less than £10 per month and the aggregate contributions to be
  made in any month under this contract and any other contract(s) linked to
  this Plan into which you have previously entered must not be more than
  £250.  For weekly paid employees, a
  quarter of the monthly amount will be deducted weekly until the equivalent of
  [36/60] monthly payments have been made, (or the equivalent sums at the Date
  of Grant in the currency of your country of employment).

  
	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  The
  Normal Repayment Date may be postponed if you miss any contributions.

  

 

PLEASE
READ AND SIGN

 

*                                I hereby apply for an option over ordinary shares in the capital of
Imperial Tobacco Group PLC, the cost of which will be met from repayments and
any additional sums under the savings contract for which a proposal form is
attached.

 

*                                I hereby declare that I am applying for an option on my own behalf
and not as a trustee or nominee for any other person(s).

 

*                                I hereby authorise the Company to submit my savings application to
[            ] on
my behalf and to make the corresponding deductions from my pay.

 

*                                I authorise the Company Secretary to make such adjustments to the
amount to be saved by me under the savings contract referred to above as may be
necessary if my application is scaled down in accordance with the Rules of the
Plan and the number of shares allotted to me is less than the number of shares
which I have applied for, further I authorise the Company to submit such
amended savings application to
[            ].

 

36

 

*                                I understand that if I am granted an option it will be subject to
the Rules of the Plan, by which I agree to be bound.  A copy of the Rules of the Plan is available for inspection at
[                  ].

 

Unless the context otherwise requires terms
defined in the Rules of the Plan shall have the same meaning herein.

 

	
  SIGNATURE

  	
   

  	
  DATE

  

 

 

37

 

SPECIMEN
THE IMPERIAL TOBACCO GROUP
INTERNATIONAL SHARESAVE PLAN

 

OPTION CERTIFICATE

 

	
  Name
  of Option Holder

  	
   

  	
   

  
	
   

  
	
  Address
  of Option Holder

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
  Post
  Code

  	
   

  	
   

  
	
   

  
	
  Option
  Certificate number

  	
   

  	
   

  
	
   

  
	
  Number
  of shares granted under this option

  	
   

  	
   

  
	
   

  
	
  Date
  of grant

  	
   

  	
   

  
								

 

 

This is
to certify that the above named person was on the above date granted an option
as specified for ordinary shares of [ 
]p each in the capital of Imperial Tobacco Group PLC (the “Company”) at
an exercise price of [     ]p per share
upon and subject to the terms of The Imperial Tobacco Group International
Sharesave Plan.

 

Signed
on behalf of

 

	
   

  	
   
  Director

  	
   

  	
   Secretary

  

 

	
  NOTES:

  	
  (1)

  	
  The
  option cannot be assigned or transferred.

  
	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  In
  order to exercise your option complete the Form of Exercise printed overleaf
  and send it together with a cheque for the relevant exercise price of the
  shares and evidence of the amount repaid under your savings contract to the
  Company Secretary of the Company.

  

 

THIS
DOCUMENT MUST BE RETAINED.  PLEASE KEEP
IT IN A SAFE PLACE.  This certificate is
issued as a matter of record only and is not a document of title.

 

38

 

SPECIMEN

 

[Reverse
of Certificate]

 

THE IMPERIAL TOBACCO GROUP

INTERNATIONAL SHARESAVE PLAN

 

 

FORM OF EXERCISE OF OPTION

 

	
  To:

  	
   

  	
  The
  Company Secretary

  
	
   

  	
   

  	
  Imperial
  Tobacco Group PLC

  

 

(In
order to exercise your option you should complete, sign and return this
document to the Company Secretary at the above address.)

 

1.                                                                                       I wish to exercise the option referred to on the reverse Option
Certificate in respect of
[            ]
ordinary shares.  (Insert the number of
shares in respect of which the option is exercised.  If you do not wish to exercise the option for all the shares
shown on the attached certificate you may exercise options for a lesser number.

 

2.                                                                                       I enclose a cheque for
£              in
favour of Imperial Tobacco Group PLC being the total exercise price payable
under this option for the above specified number of ordinary shares together
with evidence of the amount repaid to me under my savings contract.

 

Personal
Details

 

 

	
  SURNAME

  	
   

  	
   MR/MRS/MISS/MS

  	
   

  	
   

  
	
   

  	
   

  
	
  FIRST
  NAMES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOME
  ADDRESS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  POST
  CODE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
  DATE

  	
   

  	
   

  
														

 

 

NOTE:                     This option may be exercised only by the person to whom it was
granted or their personal representative(s).

 

IF YOU
ARE IN ANY DOUBT, PLEASE CONTACT YOUR/THE PLAN ADMINISTRATOR

 

39

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