Document:

Exhibit 4.3

 

 

IMPERIAL TOBACCO GROUP PLC

 

RULES OF THE IMPERIAL TOBACCO GROUP

SHARE MATCHING SCHEME

 

(Approved by the Company on 14 August 1996 and amended
by the Remuneration Committee on 2 December 1996, on 31 January 2000, on 24
November 2000, on 23 November 2001 and on 22 November 2002. Amended
at an AGM held on 4 February 2003.  Amended by the
Remuneration Committee on 14 November 2003 and 5 November 2004.)

 

BAA/I210.00099

 

 

RULES OF
THE IMPERIAL TOBACCO GROUP

SHARE
MATCHING SCHEME

 

1.                                           Definitions

 

Except where inconsistent with the subject or context,
words defined in the Trust Deed made between Imperial Tobacco Group PLC (1) and
Abacus (C.I.) Limited (the “Trustees”) (2) dated 1 October 1996 establishing
the Imperial Tobacco Group PLC Employee Benefit Trust (the “Trust”) shall have
the same meanings when used in these rules. 
In addition the following words and expressions shall have the following
meanings:-

 

	
  “Act”

  	
  the Income and Corporation Taxes Act 1988;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Additional Share”

  	
  a Share allocated pursuant to Rule 4;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Additional Share

  	
   

  	
   

  	
   

  
	
  Award Certificate”

  	
  in circumstances where Additional Shares will not
  vest unless and until a performance condition or performance conditions
  attaching to an award of Additional Shares has or have been fulfilled or
  waived, a certificate executed by the Company specifying the performance
  conditions attaching to an award of Additional Shares in the form, or
  substantially the form, as shown in Schedule 2 to these Rules;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Beneficiary”

  	
  means and includes:-

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  any Employee;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  any former Employee; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  the wife husband widow widower and children and
  stepchildren (being in the case of children and stepchildren under 18 years
  of age) of any such Employee or former Employee;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  the personal representatives of any such Employee or
  former Employee provided that the terms of the deceased Employee’s or former
  Employee’s will or intestacy are such that the person or persons who will
  receive any benefit under this Settlement are only those within Section
  86(1)(b) of the Inheritance Tax Act 1984 in relation to such deceased
  Employee or former Employee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROVIDED THAT (A) no person shall be a former
  Employee for the purposes of this definition unless he shall be at the date
  of execution of the Employee Benefit Trust or become after that date an
  Employee; AND (B) a Beneficiary shall not include any person who is for the
  time being resident for tax purposes in the Island of Jersey;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Board”

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

  
						

 

1

 

	
  “Company”

  	
  Imperial Tobacco Group PLC;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Control”

  	
  as defined in Section 840 of the Act;

  
	
   

  	
   

  	
   

  	
   

  
	
  “CREST”

  	
  means the relevant system (as defined in the Uncertificated
  Securities Regulations 1995 (SI 1995/3272)) in respect of which CRESTCo is
  the operator;

  
	
   

  	
   

  	
   

  	
   

  
	
  “CRESTCo”

  	
  means CRESTCo Limited;

  
	
   

  	
   

  	
   

  	
   

  
	
  “CREST Account”

  	
  means a designated CREST account held by a
  Participant with Salomon Smith Barney Inc (or such other sponsor as agreed by
  the Trustees in their absolute discretion);

  
	
   

  	
   

  	
   

  	
   

  
	
  “Early Vesting Date”

  	
  as defined at Rule 5.3;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Earnings”

  	
  in respect of any Employee, the basic annual salary
  of that Employee;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Employee”

  	
  any person for the time being in full, part-time or
  temporary employment of any Member of the Group;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Expected Vesting Date”

  	
  as defined at Rule 5.1 and Rule 5.2;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Group”

  	
  the Company and its Subsidiaries;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Lodged Share”

  	
  a Share:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  acquired by
  the Trustees with monies provided by a Beneficiary or transferred to the
  Trustees and in each case held by the Trustees as bare nominee for such
  Beneficiary; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  in respect of which a share certificate(s) covering such Share has
  been deposited with the Trustees by a Beneficiary which shall be held by the
  Trustees (or such person or persons as may from time to time be nominated by
  the Trustees) on behalf of the Beneficiary; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  held by the
  Participant in a CREST Account with Salomon Smith Barney (or such other
  sponsor as agreed by the Trustees in their absolute discretion);

  
	
   

  	
   

  	
   

  	
   

  
	
  “Member of the Group”

  	
  the Company or any of its Subsidiaries;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Participant”

  	
  a Beneficiary on whose behalf Lodged Shares are held
  by the Trustees or by the Beneficiary in a CREST Account, and who has not
  withdrawn them or who has deposited a share certificate(s) with the Trustees;

  

 

2

 

	
  “Rules”

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

  
	
   

  	
   

  	
   

  	
   

  
	
  “Scheme”

  	
  the Imperial Tobacco Group Share Matching Scheme
  constituted by these Rules;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Share”

  	
  an ordinary share in the capital of the Company;

  
	
   

  	
   

  	
   

  	
   

  
	
  “Subsidiary”

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

  
	
   

  	
   

  	
   

  	
   

  
	
  “Vesting Date”

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

  
	
   

  	
   

  	
   

  	
   

  
	
  “Vested Share”

  	
  an
  Additional Share which has been allocated to a Beneficiary and which becomes
  vested in the Beneficiary in accordance with the Rules.

  

 

2.                                           Invitations

 

2.1                                     The Board may, from time to time, invite any Beneficiary to
participate in the Scheme.

 

2.2                                     Any such invitation shall invite such Beneficiaries as the Board may
in its discretion determine:-

 

(a)                               to pay
monies to the Trustees and to authorise and require the Trustees to apply such
monies in the acquisition of Lodged Shares; and/or

 

(b)                              to
transfer Shares to the Trustees as Lodged Shares; and/or

 

(c)                               to deliver a share certificate(s) in respect of the Lodged Shares to
the Trustees (or such other person or persons as may be nominated by the
Trustees provided the share certificate(s) are held to the Trustees’ order);
and/or

 

(d)                              to open a CREST Account and either (i) apply monies towards the
purchase of Shares; or (ii) transfer Shares by way of a completed CREST
dematerialisation form to the CREST Account such shares being Lodged Shares,

 

and
shall advise such Beneficiaries of the proposed allocation of Additional
Shares.

 

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

 

2.4                                     No invitation shall be made other than at a time at which dealings
in Shares may occur under the London Stock Exchange Model Code for securities
dealings by directors and other relevant employees.

 

3

 

3.                                           Lodged Shares

 

3.1                                     Lodged Shares shall be registered either:

 

(a)                               in the
name of the Trustees (or such other person or persons as may be nominated by
the Board for the purpose) who shall hold such Shares as bare nominee for the
relevant Participant; and/or

 

(b)                              in the Participant’s name and the share certificate(s) covering such
Shares shall be held by the Trustees (or such other person or persons as may be
nominated by the Trustees provided the share certificate(s) is held to the
Trustees’ order); or

 

(c)                               in the Participant’s
name and held in a designated CREST Account held with Salomon Smith Barney (or
such other sponsor as agreed with the Trustees in their absolute discretion).

 

3.2                                     The Trustees shall not exercise any rights attaching to Lodged
Shares otherwise than in accordance with any written wishes received from the
relevant Participant.  It shall be the
responsibility of each Participant to ensure that any voting wishes are conveyed
to the Trustees in sufficient time and with sufficient clarity to allow the
Trustees to carry out the same, and the Trustees shall not be liable to any
person for the consequences of any failure to exercise voting rights.

 

3.3                                     The Trustees shall pay to the relevant Participant the amount of any
dividends paid by the Company on the Lodged Shares (other than those in respect
of which a share certificate(s) has or have been deposited with the Trustees),
and unless otherwise instructed by the relevant Participant shall credit the
CREST Account of the Participant (if the Participant holds his/her Lodged
Shares in a CREST Account) with the amount of any such dividends.

 

4.                                           Effect of Allocation

 

4.1                                     Any Additional Share which has been allocated to a Participant shall
be held upon trust absolutely for that Participant (such that the Trustees may
exercise any rights attaching to the Additional Shares and the relevant
Participant shall have no entitlement to any dividends paid by the Company on
the Additional Shares)

 

(a)                               if and so long as that Participant shall, throughout the period
commencing on the date of allocation of such Additional Share and ending on the
Vesting Date

 

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

 

(ii)                            not have caused any of the Lodged Shares in respect of which the
Additional Shares were allocated to have been transferred or delivered in
accordance with Rule 7; and

 

4

 

(b)                              any performance
condition(s) imposed by the Board pursuant to Rule 2.3 and which shall be set
out in the Additional Share Award Certificate has or have been satisfied or
waived in accordance with its terms.

 

4.2                                     No Lodged Share may be assigned, charged or (subject to Rule 7)
otherwise disposed of by a Participant.

 

5.                                           Vesting of Shares

 

5.1                                     Save as otherwise provided, and provided that any performance
condition(s) imposed by the Board pursuant to Rule 2.3 has or have been satisfied
or waived in accordance with its terms, “Expected Vesting Date” in relation to
any Additional Shares means such anniversary of the date of allocation of the
Additional Shares as the Board shall, prior to such allocation determine, save
that if an event occurs as a result of which the Board determines that in
relation to all or any Additional Shares previously allocated the Expected
Vesting Date is no longer appropriate, the Board may in its discretion
substitute such other date as it may determine as the Expected Vesting Date;

 

5.2                                     “Expected Vesting Date” in relation to any Additional Shares
allocated pursuant to an invitation made by the Board in December 2001 shall be
29 January 2005;

 

5.3                                     [Provided that any performance condition(s) imposed by the Board
pursuant to Rule 2.3 has or have been satisfied or waived in accordance with
its terms,] “Early Vesting Date” in relation to any Additional Share means the
date on which any of the following events shall first occur prior to the
Expected Vesting Date of such Additional Share:-

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)                        any other
circumstances.

 

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

 

5

 

5.4                                     Any Lodged Shares held upon bare trust for a Participant shall be
transferred (in such manner (whether in uncertificated form or otherwise) as
the Trustees may determine) to the relevant Participant on the Vesting Date and
in relation to any Lodged Shares in respect of which a share certificate(s) has
or have been deposited with the Trustees, the Trustees shall return or procure
the return of all such share certificates as soon as practicable following the
Vesting Date.

 

5.5

 

(a)                               If the Early Vesting Date has arisen under Rule 5.3(d)(iv), any
award of Additional Shares to that Participant shall lapse unless, within six
months of that date, the Trustee shall determine otherwise in which case there
shall be transferred to the relevant Participant such number of Additional
Shares as may be determined by the Trustees in their discretion but not
exceeding the number of Additional Shares which would have been transferred to
the Participant had the Early Vesting Date arisen otherwise than under Rule
5.3(d)(iv).

 

(b)                              If the Early Vesting Date has arisen otherwise than under Rule
5.3(d)(iv), there shall also be transferred to the relevant Participant (or to
the Participant’s estate) such number of Additional Shares as may be determined
by the Trustee in accordance with the basis of allocation originally laid down
under Rule 2.3.

 

5.6                                     The Additional Shares transferred to a Participant pursuant to Rule
5.5 above shall rank pari passu with all Shares then in issue except that they
will not rank for any dividend or other distribution paid or made by reference
to a record date falling prior to the date that they are transferred.

 

5.7                                     For the purposes of this Rule 5, where a Participant’s employment
with any Member of the Group is terminated without notice the Participant’s
employment shall be deemed to cease on the date on which the termination takes
effect and where the said employment is terminated with notice the Participant’s
employment shall be deemed to cease on the date on which that notice is given
unless the Board in its sole discretion shall agree to extend the date on which
the employment is deemed to cease to the date when the notice expires.

 

5.8                                     Notwithstanding the provisions of this Rule 5, no Share may be
issued under the Scheme on any date if, as a result, any of the following
limits would be exceeded:

 

(a)                               the total number of Shares issued or committed to be issued during
the period of ten years ending on that date under the Scheme and all other
employees’ share schemes established by the Company would exceed 10% of the
issued ordinary share capital of the Company on that date;

 

(b)                              the total number of Shares issued or committed to be issued during
the period of five years ending on that date under the Scheme and all other
employees’ share schemes established by the Company would exceed 5% of the
issued ordinary share capital of the Company on that date;

 

(c)                               the total number of
Shares issued or committed to be issued during the period of ten years ending
on that date under the Scheme and all other employees’ share schemes

 

6

 

established by the Company would exceed 5%
of the issued ordinary share capital of the Company on that date, PROVIDED THAT
there shall be excluded for the purposes of this limit Shares issued or
committed to be issued under any employees’ share scheme in circumstances where
participation is offered or extended to all or most employees of the
participating companies under that scheme.

 

6.                                           Capitalisation

 

6.1                                     If and whenever new Shares are allotted to the Trustees by way of
capitalisation or other distribution of a capital nature, such new Shares shall
accrue and be added to and be held upon identical trusts to the Shares in
respect of which such new Shares shall have been allotted.  The number and nominal value of Additional
Shares and the basis of further allocations of Additional Shares,
may be adjusted in such a manner as the Company’s Auditors, acting as experts
and not as arbitrators, may confirm in writing to be fair and reasonable.  Participants shall be notified of any such
adjustment.

 

6.2                                     If and whenever the Company shall issue by way of rights or
otherwise make any offer or invitation to shareholders generally and shall
issue to its members nil paid letters of allotment or other documents (“Nil
Paid Rights”) representing negotiable Nil Paid Rights or entitlements relating
to any ordinary shares or other security or securities (or any mixture of the
two) in or of the Company, the Trustees shall be entitled to receive but shall
be obliged to sell such proportion of such Nil Paid Rights as are attributable
to Additional Shares as shall enable the Trustees to subscribe for the new
shares or securities which are the subject of the balance of the Nil Paid
Rights and the Trustees shall so apply the proceeds of disposal in that way.  The shares or securities so purchased shall
be added pro rata and be held upon identical trusts to the Additional Shares
held by the Trustees in respect of which such Nil Paid Rights shall have been
received by the Trustees.  Any cash balance
shall be held likewise.  If any such Nil
Paid Rights shall be issued by reference to a record date which falls after the
time at which the relevant Shares in respect of which such Nil Paid Rights
shall have been issued shall have become held absolutely for a Participant,
such Nil Paid Rights shall be held by the Trustees upon trust for such
Participant absolutely.

 

6.3                                     If under Rule 6.1 or 6.2 above any fraction of a Share arises the
allocation therein provided for shall be rounded up or down as the Trustees may
in their sole discretion think fit.

 

6.4                                     In relation to any Lodged Share registered in the name of the
Trustees (or another person) pursuant to Rule 2.2 the Participant may instruct
the Trustees to take such action as the Participant may inform the Trustees in
writing.  The Trustees shall be under no
obligation to take any action unless the Participant shall provide any
necessary funds and shall not be responsible for any failure to act in time or
at all, irrespective of the circumstances.

 

7.                                           Transfer of Legal Title

 

The Trustees shall in respect of all (but
not some only) of the Lodged Shares:

 

(a)                               transfer
the legal title into the name of the relevant Participant and shall transfer
the same into such Participant’s name, or, if the Participant directs
otherwise, in such manner (whether in uncertificated form or otherwise) as the
Trustees may determine; and/or

 

7

 

(b)                              deliver or procure
the delivery of all the share certificate(s) to the relevant Participant

 

as soon as reasonably practicable following the receipt of any written
instruction to this effect from such Participant.

 

8.                                           Stamp Duty and Other Expenses

 

Any stamp duty or other expenses incurred
in any transfer of Additional Shares and/or Lodged Shares by the Trustees shall
be payable:-

 

(a)                               in the
case of either a transfer into the name or (at the direction) of the
Participant concerned or the acquisition by the Trust of Additional Shares, by
the Trustees; and

 

(b)                              in any other case,
by the Participant concerned (unless the Board shall determine otherwise).

 

9.                                           Taxation

 

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

 

9.2                                     For the purposes of this Rule 9 the Trustees may rely on any
information supplied to them by the Company or by any tax adviser selected by
the Company as to the amount of any such tax liability.

 

10.                                     General

 

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

 

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

 

10.3                               The costs of introducing, operating and administering the Scheme
shall be borne by the Company.

 

8

 

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

 

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

 

11.                                     Amendment

 

11.1                               The Scheme shall be administered under the direction of the Board
who may at any time and from time to time by resolution and without other
formality amend or augment the Rules or the Scheme in any respect provided
that:-

 

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

 

(b)                              no amendment may be
made which would, if carried out, involve the Trustee in a new or additional
obligation or liability without the prior agreement of the Trustee; and

 

(c)                               no amendment may be made to the advantage of Participants except
with the prior approval of the shareholders of the Company in General Meeting
except for minor amendments to benefit the administration of the Scheme and
amendments to obtain or maintain favourable tax, exchange control or regulatory
treatment for Participants in the Scheme or for any Member of the Group.

 

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

 

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

 

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

 

11.3                               The limits in Rule 5 may not be increased without the approval of
the shareholders of the Company in General Meeting.

 

9

 

11.4                               No amendment shall take effect that would cause the Scheme to cease
to be an “employees’ share scheme” as defined in Section 743 of the Companies
Act 1985.

 

12.                                     Termination

 

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

 

13.                                     Governing Law

 

This Scheme
shall be governed by the laws of England.

 

10

 

SCHEDULE 1

 

INTERNATIONAL RULES

 

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

 

Belgium

Bosnia

Czech Republic

France

Germany

Greece

Hong Kong

Hungary

Kyrgyzstan

Poland

Russia

Singapore

Slovakia

Slovenia

Spain

Taiwan

Turkey

United Arab Emirates

 

The Rules of the Scheme apply with and subject to the
following amendments and provisions which have been adopted by the Board
pursuant to rule 11.2 for the purposes of the operation of the Scheme in the
jurisdictions specified below:

 

The Netherlands (Appendix
1)

Ireland (Appendix 2)

United States of America
(Appendix 3)

Canada (Appendix 4)

Australia (Appendix 5)

New Zealand (Appendix 6)

 

11

 

APPENDIX 1

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of this Appendix is to specify terms and
conditions under which the Scheme is to be modified in its application to any
Lodged Shares or allocation of Additional Shares made or to be made to a person
resident for tax purposes in The Netherlands.

 

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

 

14.                                     In Rule 2.1 the reference to “Beneficiary” shall be deleted and
replaced by “Employee”.

 

15.                                     In rule 2.2 reference to “Beneficiaries”
shall be deleted and replaced by references to “Employees”.

 

12

 

APPENDIX 2

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of this Appendix is to specify terms and
conditions under which the Scheme is to be modified in its application to any
Lodged Shares or allocation of Additional Shares made or to be made to a person
resident for tax purposes in Ireland.

 

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

 

1.                                           Rule 5.4 shall be redesignated Rule 5.4(a) and a new rule shall be
added after Rule 5.4(a) and Rule 5 shall be re-numbered accordingly:

 

“5.4(b) subject to Rule 5.5 the Additional Shares held
on trust for a Participant shall be transferred (in such manner (whether in
uncertified form or otherwise) as the Trustees may determine) to the relevant
Participant on the Vesting Date.”

 

13

 

APPENDIX 3

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of this Appendix is to specify terms and
conditions under which the Scheme is to be modified in its application to any
Lodged Shares or allocation of Additional Shares made or to be made to a person
resident for tax purposes in the United States.

 

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

 

Rule
1

 

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

 

“Additional Share”                                             a Share, or ADS, if applicable, allocated pursuant to Rule 4;

 

“Lodged Share”                                                              a Share, or ADS, if applicable, acquired by the Trustees with monies
provided by a Beneficiary or transferred to the Trustees by a Beneficiary and
in each case held by the Trustees as bare nominees for such Beneficiary;

 

Rule 5.3 (e)                                at the end of the sentence add the words “or, that the ADSs cease to
be listed on the New York Stock Exchange, Inc.

 

Rule 5.8                                                 insert the words “(including Shares represented by ADSs)” after the
word “Share” wherever it occurs.

 

14

 

APPENDIX 4

 

IMPERIAL TOBACCO GROUP INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of
this Appendix is to specify terms and conditions under which the Scheme is to
be modified in its application to any Lodged Shares or allocation of Additional
Shares made or to be made to a person resident for tax purposes in Canada.

 

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

 

	
  Rule
  1

  
	
   

  	
   

  
	
  “Vesting
  Date”

  	
  the
  earlier of the Expected Vesting Date and Early Vesting Date provided that
  this date shall not be a date falling more than three years after the date of
  the allocation of the Additional Shares.

  
	
   

  	
   

  
	
  Rule
  5.7 shall be

  replaced
  with the

  following:

  	
  “For
  the purposes of the Scheme, a Participant’s employment with any Member of the
  Group shall be considered to have terminated effective on the last day of the
  Participant’s actual and active employment with a Member of the Group whether
  such day is selected by agreement with the individual, unilaterally by such a
  Member of the Group and whether with or without advance notice to the
  Participant unless the Board in its sole discretion shall agree to extend the
  date on which the employment is deemed to cease to the date when the notice
  expires.  Except as may be authorised
  by the Board,  for the avoidance of
  doubt, no period of notice that is given or that ought to have been given
  under applicable law in respect of such termination of employment will be
  utilised in determining entitlement under the Rules of the Scheme.”

  

 

15

 

APPENDIX 5

 

IMPERIAL TOBACCO INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of
this Appendix is to specify terms and conditions under which the Scheme is to
be modified in its application to any Lodged Shares or allocation of Additional
Shares made or to be made to a person resident in Australia.

 

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

 

1.                                           A Beneficiary must, in order to participate in the Scheme, either

 

(a)                               deliver
share certificates in respect of the Lodged Shares owned by the Beneficiary to
the Trustees or,

 

(b)                              open a CREST
Account and either,

 

(i)                               apply
monies towards the purchase of Shares; or

 

(ii)                            transfer Shares by
way of a CREST dematerialisation to the CREST Account

 

and
the definition of “Lodged Shares” and Rule 2.2 of the Scheme shall be read and
construed accordingly.

 

2.                                           The following new Rules 2.5 and 2.6 shall be inserted after Rule
2.4:

 

‘2.5                             The
allocation of Additional Shares to any Participant shall be deemed to be, and
shall have effect as, the grant of an option by the Company in favour of the
Participant to require the Company to procure the transfer to the Participant
of the Additional Shares to which the Participant is entitled under these Rules
on the Vesting Date and:

 

(a)                               any
reference in these Rules to the loss, termination or lapsing of any award of
Additional Shares shall be deemed to be a reference to such option lapsing; and

 

(b)                              any reference to
Additional Shares shall be deemed to be a reference to such option to call for
a transfer of the relevant number of Additional Shares.

 

2.6                                  The
option referred to in Rule 2.5 shall lapse and be of no further effect unless
the Participant shall, throughout the period commencing on the date of the
grant of that option and ending on the Vesting Date:

 

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

 

(d)                              not have caused the
certificate in respect of any of the Lodged Shares in respect of which the
option was granted to have been delivered in the same manner as if Rule 7
applied to such transfer.’

 

16

 

3.                                           Rule 4.1 shall be deleted, and the following Rule 4.1 inserted in
its place:

 

‘4.1          Notwithstanding any
provision of these Rules or of the Trust, no Participant shall have any right
or interest, whether legal or equitable, in:

 

(a)                               any Additional
Shares allocated to that Participant until the Vesting Date;

 

(b)                              any Nil Paid Rights issued by the Company under Rule 6.2 or, until
the Vesting Date, in any shares or securities acquired from exercising those
Nil Paid Rights; or

 

(c)                               any option to
acquire any right or interest in any such Share.’

 

4.                                           Rule 6.2 shall be deleted and the following Rule 6.2 inserted in its
place:

 

‘If and whenever the Company shall issue by
way of rights or otherwise make any offer or invitation to shareholders
generally and shall issue to its members nil paid letters of allotment or other
documents (“Nil Paid Rights”) representing negotiable Nil Paid Rights or
entitlements relating to any ordinary shares or other security or securities
(or any mixture of the two) in or of the Company, the Trustees shall be
entitled to receive but shall be obliged to sell such proportion of such Nil
Paid Rights as are attributable to Additional Shares as shall enable the
Trustees to subscribe for the new shares or securities which are the subject of
the balance of the Nil Paid Rights and the Trustees shall so apply the proceeds
of disposal in that way.  The shares or
securities so purchased shall be added pro rata and be held upon the same terms as the Additional Shares held by the Trustees
in respect of which such Nil Paid Rights shall have been received by the
Trustees.  Any cash balance shall be held
likewise.  If any such Nil Paid Rights
shall be issued by reference to a record date which falls after the time at
which the relevant Shares in respect of which such Nil Paid Rights shall have
been issued shall have become held absolutely for a Participant, such Nil Paid
Rights shall be held by the Trustees upon trust for such Participant
absolutely. No Participant shall have any right or interest,
whether legal or equitable in any Nil Paid Rights or, until the Vesting Date,
in any shares or securities acquired from exercising those Nil Paid Rights.
‘

 

17

 

APPENDIX 6

 

IMPERIAL TOBACCO GROUP
INTERNATIONAL

SHARE MATCHING SCHEME

 

The purpose of this Appendix is to specify terms and
conditions under which the Scheme is to be modified in its application to any
Lodged Shares or allocation of Additional Shares made or to be made to a person
resident for tax purposes in New Zealand.

 

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

 

1.                                           Rule 4.1 shall be deleted, and the following Rule 4.1 inserted in
its place

 

‘4.1 Prior to
the transfer of any Additional Shares to a Participant pursuant to Rule 5.4
below, no Participant shall have any right or interest, whether legal or
equitable, in any Additional Share allocated to that Participant (and for the
avoidance of doubt shall have no entitlement to any dividends paid by the
Company on the Additional Shares). Any Additional Share shall not be
transferred to a Participant unless the Participant shall, throughout the
period commencing on the date of allocation of such Additional Share and ending
on the Vesting Date:

 

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

 

(b)                               not have caused any
of the Lodged Shares in respect of which Additional Shares were allocated to
have been transferred or delivered in accordance with Rule 7. ‘

 

18

 

SCHEDULE 2

 

[Imperial Tobacco Group
PLC notepaper]

 

ADDITIONAL
SHARE AWARD CERTIFICATE

 

IMPERIAL
TOBACCO GROUP SHARE MATCHING SCHEME (the “Scheme”)

 

This is to certify that
[                         ]
has been granted [                      ]
Additional Shares in accordance with the Scheme.

 

The Additional Shares are subject to the rules of the
Scheme and shall be held by Abacus (C.I.) Limited as Trustees of the Scheme and
of the Imperial Tobacco Group Employee and Executive Benefit Trust [and the
Imperial Tobacco Group PLC 2001 Employee Benefit Trust] until the Vesting Date.

 

The Additional Shares shall be transferred to you as
soon as practicable after the Vesting Date provided that [insert
details of performance condition(s) imposed on the award of Additional Shares
including details of performance condition(s) if early good leaver].

 

Until the Vesting Date:

 

•                                            You cannot sell, assign, transfer, pledge, encumber or otherwise
dispose of your interest in the Additional Shares;

•                                            You will not receive any dividends in respect of the Additional
Shares; and

•                                            You cannot exercise voting rights attached to the Additional Shares.

 

For and on behalf of IMPERIAL
TOBACCO GROUP PLC

 

	
  Authorised
  signatory

  	
   

  

 

19Exhibit
4.4

 

IMPERIAL
TOBACCO GROUP PLC

 

 

RULES
OF THE IMPERIAL TOBACCO GROUP

 

LONG
TERM INCENTIVE PLAN

 

Approved
by the Company

on
14 August 1996

(and
amended by the Remuneration Committee

on
9 October, 2 December 1996, 24 November 2000, 23 November 2001, 22 November
2002, 14 November 2003 and 5 November 2004.)

 

ASHURST
MORRIS CRISP

Broadwalk
House

5
Appold Street

London EC2A 2HA

 

Tel: 
0207-638-1111

 

Fax: 
0207-638 1112

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Operation of the Plan

  	
   

  
	
  2.

  	
  Terms of a Conditional
  Award

  	
   

  
	
  3.

  	
  Plan Limit

  	
   

  
	
  4.

  	
  Grant of Conditional Awards

  	
   

  
	
  5.

  	
  Obligations of Employee

  	
   

  
	
  6.

  	
  Leaving
  Service or Reconstruction or Takeover during the Performance Period

  	
   

  
	
  7.

  	
  Determination of Options

  	
   

  
	
  8.

  	
  Options

  	
   

  
	
  9.

  	
  Exercise and Lapse of
  Options

  	
   

  
	
  10.

  	
  Reconstruction
  or Takeover before the Release Date - Lapse of Options

  	
   

  
	
  11.

  	
  Capital Reorganisation

  	
   

  
	
  12.

  	
  General

  	
   

  
	
  13.

  	
  Amendment and termination

  	
   

  
	
  14.

  	
  Governing
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  
	
  APPENDIX 1

  	
   

  
	
  APPENDIX 2

  	
   

  
	
  APPENDIX 3

  	
   

  
	
  APPENDIX 4

  	
   

  
	
  APPENDIX 5

  	
   

  

 

 

Definitions

 

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

 

“Committee”
means the Remuneration Committee of the Board of Directors of Imperial Tobacco
Group PLC.

 

“Company” means Imperial Tobacco Group PLC.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Normal Retirement Age” means age 65.

 

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

 

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

 

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

 

“Performance
Condition” means the condition or conditions determined by the Committee and
notified to a Participant.

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.                                            Operation of
the Plan

 

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

 

2.                                            Terms of a
Conditional Award

 

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

 

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

 

2

 

(2)          the
Performance Period;

 

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

 

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

 

3.                                           Plan Limit

 

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

 

(2)          No
Share may be issued under the Plan on any date if, as a result, any of the
following limits were to be exceeded:

 

(i)                              the total number of Shares issued or committed to be issued during
the period of ten years ending on that date under the Plan and all other
employees’ share schemes established by the Company would exceed 10% of the
issued ordinary share capital of the Company on that date;

 

(ii)                           the total number of Shares issued or committed to be issued during
the period of five years ending on that date under the Plan and all other
employees’ share schemes established by the Company would exceed 5% of the
issued ordinary share capital of the Company on that date; or

 

(iii)                        the total number of Shares issued or committed to be issued during
the period of ten years ending on that date under the Plan and all other
discretionary share schemes established by the Company would exceed 5% of the
issued ordinary share capital of the Company on that date and when determining
whether a share scheme established by the Company is a discretionary one for
the purpose of this Rule 3(2)(iii) any savings related share option scheme or
any other share scheme participation in which is offered to all Employees shall
be disregarded.

 

4.                                           Grant of
Conditional Awards

 

(1)          The
Committee may grant a Conditional Award at any time to any Employee (provided
that he will not reach Normal Retirement Age before the end of the Performance
Period relating to such Conditional Award).

 

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

 

(3)          If
at any time after the grant of a Conditional Award the Committee considers that
circumstances have arisen which would prevent the terms of the Conditional
Award (as

 

3

 

regards the operation of the Plan generally or in
respect of any Participant) from operating fairly in accordance with the spirit
of the Plan, the Committee may vary any of those terms and specify any other
terms applicable to the operation of the Plan PROVIDED THAT any amendments made
to the Performance Condition shall, in the opinion of the Committee, ensure
that the revised Performance Condition is neither easier nor more difficult to
achieve than the original Performance Condition when first set.  The Committee shall notify Participants of
the details of any such variation which affects a Participant.

 

5.                                           Obligations of
Employee

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

•                                death

 

•                                injury,
ill-health, or disability

 

•                                redundancy

 

•                                retirement
on or after contractual retirement age

 

•                                early
retirement with the agreement of his Employing Company

 

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

 

4

 

•                                any
other circumstances where the Committee so decides

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

•                                early retirement with the agreement of his Employing Company; or

 

•                                redundancy

 

the Committee may determine that the formula shall not
be applied either in whole or in part.

 

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

 

(5)          If
in consequence of an offer to shareholders in the Company (or any of them) or
any scheme of reconstruction (however effected) before expiry of the
Performance Period the Shares are to cease to be listed on the London Stock
Exchange, the Committee shall notify Participants and the Performance Period
shall be deemed to have ended on the date of such notification.

 

7.                                           Determination
of Options

 

(1)          As
soon as reasonably practicable after, but in any event within 35 days of, the
date determined by the Committee for the purposes of Rule 2(4) (or, but only in
the circumstances set out in Rule 6(2), 6(3), 6(4) or 6(5), as soon as
reasonably practicable after, but in any event within 35 days of, the deemed
end of the Performance Period) an Option

 

5

 

shall be granted to a Participant by either the
Company or the Trustee over such number of Shares the subject of the relevant
Conditional Award as is determined by the application of the Performance
Condition and, but only where required in accordance with the terms of Rule 6(2)
or 6(3), the formula.

 

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

 

8.                                           Options

 

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

 

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

 

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

 

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

 

9.                                           Exercise and
Lapse of Options

 

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

 

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

 

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

 

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

 

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

 

6

 

distribution of the Company paid or made by reference
to a record date falling prior to the date of exercise of the relevant Option.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11.                                     Capital
Reorganisation

 

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

 

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

 

12.                                     General

 

(1)          Any
notice or other document given to any Employee or Participant pursuant to the
Plan shall be delivered to him or sent by post to him at his home address
according to the records of his employing company or such other address as may
appear to the Committee to be appropriate. Notices or other documents sent by
post shall be deemed to have been received 2 days following the date of
posting.

 

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

 

7

 

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

 

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

 

(5)          No
Conditional Award shall be made or Option granted or exercised on a day on
which any dealing in Shares would be prohibited by the London Stock Exchange
Model Code for Transactions in Securities by Directors (a “Prohibited Day”) and
any Conditional Award or grant or exercise of an Option shall be deferred until
the first day following the Prohibited Day on which the prohibition on Dealings
shall be lifted.  This Rule 12(5) shall
apply to any Conditional Awards made and Options granted or exercised whether
or not the Employee concerned is subject generally to the said Model Code.

 

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

 

13.                                     Amendment and
termination

 

(1)          The
Scheme shall be administered under the direction of the Committee who may at
any time and from time to time by resolution and without other formality amend
or augment the Rules or the Scheme in any respect provided that:-

 

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

 

(ii)                           no amendment may be made which would, if carried out, involve the
Trustee in a new or additional obligation or liability without the prior
agreement of the Trustee; and

 

(iii)                        no amendment may be made to the advantage of Participants except
with the prior approval of the shareholders of the Company in General Meeting
except for minor amendments to benefit the administration of the Plan and
amendments to obtain or maintain favourable tax, exchange control or regulatory
treatment for Participants in the Plan or for any Group Company.

 

(2)          Notwithstanding
anything to the contrary contained herein, the Committee may at any time and
from time to time by resolution and without further formality amend the Plan in
such manner as the Committee may consider necessary or desirable in order to
comply with, take advantage of, or otherwise in connection with any taxation,
legal, regulatory or

 

8

 

other rule, law, guideline, regulation or other
provision of or prevailing in any jurisdiction in which this Plan is or is
intended to be operated.

 

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

 

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

 

(5)          The
Committee shall have discretion to terminate the Plan at any time which shall
in any event terminate on 15 August 2006 but, in each case, without prejudice
to outstanding Conditional Awards or Options.

 

14.                                     Governing Law

 

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

 

9

 

SCHEDULE 1

 

INTERNATIONAL
RULES

 

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

 

Germany

Greece

Hong
Kong

Hungary

Poland

Russia

Singapore

Slovakia

Slovenia

Spain

Turkey

 

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

 

Ireland
(Appendix 1)

The
Netherlands (Appendix 2)

Belgium
(Appendix 3)

France
(Appendix 4)

Australia
(Appendix 5)

 

10

 

APPENDIX
1

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL

LONG
TERM INCENTIVE PLAN

 

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

 

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

 

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

 

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

 

11

 

APPENDIX 2

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL

LONG
TERM INCENTIVE PLAN

 

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

 

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

 

1.                                           Rule 6(2)(i) shall be amended and the words:

 

1.1                            in the 14th line “to be the subject of an Option in respect of”
shall be deleted and replaced with “the subject of”;

 

1.2                            in the 16th line “to be the subject of such Option” shall be deleted
and replaced with “the number of Shares the subject of the relevant Conditional
Award”;

 

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

 

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

 

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

 

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

 

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

 

12

 

shall
vest in the Participant and such Shares shall be transferred as soon as
practicable to the relevant Participant.

 

7(2)                                                                          The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with Rule
7(1).”

 

5.                                           Rules 8(1), (2) and (3) shall be deleted.

 

6.                                           In Rule 8 (4) the words “Options granted” shall be deleted and
replaced with “the vesting of the Conditional Award and/ or the Shares
transferred” and the Rule shall be re-numbered a new Rule 7(3).

 

7.                                           Rules 9(1) to (4) inclusive shall be deleted.

 

8.                                           Rule 9(5) shall be re-numbered a new Rule 7(4) and the wording “exercise
of the relevant Option” shall be deleted and replaced with the wording “transfer
of the Shares”.

 

9.                                           Rule 10 shall be deleted.

 

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

 

11.                                     The
renumbered Rule 9(5) shall be amended and the words:

 

9.1                              in the first line “Option granted or exercised” shall be deleted and
replaced with “shall vest or Shares be transferred”;

 

9.2                              in the fourth line “grant or exercise of an Option” shall be deleted
and replaced with “the vesting of a Conditional Award or transfer of Shares”;

 

9.3                              in the penultimate line “Options granted or exercised” shall be
deleted and replaced with “any vesting of Conditional Awards or any transfer of
Shares”.

 

13

 

APPENDIX 3

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL

LONG
TERM INCENTIVE PLAN

 

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

 

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

 

1.                                           Rule 6(2)(i) shall be amended and the words:

 

1.1                            in the 14th line “to be the subject of an Option in respect of”
shall be deleted and replaced with “the subject of”;

 

1.2                            in the 16th line “to be the subject of such Option” shall be deleted
and replaced with “the number of Shares the subject of the relevant Conditional
Award”;

 

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

 

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

 

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

 

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

 

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

 

14

 

7(2)                                                                          The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with Rule
7(1).”

 

5.                                           Rules 8(1), (2) and (3) shall be deleted.

 

6.                                           In Rule 8(4) the words “Options granted” shall be deleted and
replaced with “the vesting of the Conditional Award and/ or the Shares
transferred” and the Rule shall be re-numbered a new Rule 7(3).

 

7.                                           Rules 9(1) to (4) inclusive shall be deleted.

 

8.                                           Rule 9(5) shall be re-numbered a new Rule 7(4) and the wording “exercise
of the relevant Option” shall be deleted and replaced with the wording “transfer
of the Shares”.

 

9.                                           Rule 10 shall be deleted.

 

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

 

11.                                     The
renumbered Rule 9(5) shall be amended and the words:

 

9.1                              in the first line “Option granted or exercised” shall be deleted and
replaced with “shall vest or Shares be transferred”;

 

9.2                              in the fourth line “grant or exercise of an Option” shall be deleted
and replaced with “the vesting of a Conditional Award or transfer of Shares”;

 

9.3                              in the penultimate line “Options granted or exercised” shall be
deleted and replaced with “any vesting of Conditional Awards or any transfer of
Shares”.

 

15

 

APPENDIX 4

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL

LONG
TERM INCENTIVE PLAN

 

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

 

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

 

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

 

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

 

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

 

1.1                            in the 14th line “to be the subject of an Option in respect of”
shall be deleted and replaced with “the subject of”;

 

1.2                            in the 16th line “to be the subject of such Option” shall be deleted
and replaced with “the number of Shares the subject of the relevant Conditional
Award”;

 

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

 

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

 

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

 

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

 

“7(1)                                                                    After the date determined by the Committee for the purposes of Rule
2(4) (or, but only in the circumstances set out in Rule 6(2), 6(3), 6(4) or
6(5), as soon as reasonably

 

16

 

practicable
after the deemed end of the Performance Period) such number of Shares the
subject of the relevant Conditional Award, as is determined by the application
of the Performance Condition and, but only where required in accordance with
the terms of Rule 6(2) or 6(3), the formula, shall vest in the Participant and
such Shares shall be transferred as soon as practicable to the relevant
Participant.

 

7(2)                                                                          The Participant shall have no further rights in respect of any
Shares subject to a Conditional Award which do not vest in accordance with Rule
7(1).”

 

6.                                           Rules 8(1), (2) and (3) shall be deleted.

 

7.                                           In Rule 8(4) the words “Options granted” shall be deleted and
replaced with “the vesting of the Conditional Award and/ or the Shares
transferred” and the Rule shall be re-numbered a new Rule 7(3).

 

8.                                           Rules 9(1) to (4) inclusive shall be deleted.

 

9.                                           Rule 9(5) shall be re-numbered a new Rule 7(4) and the wording “exercise
of the relevant Option” shall be deleted and replaced with the wording “transfer
of the Shares”.

 

10.                                     Rule 10 shall be deleted.

 

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

 

12.                                     The renumbered Rule 9(5) shall be amended and the words:

 

9.1                                                                       in the first line “Option granted or exercised” shall be deleted and
replaced with “shall vest or Shares be transferred”;

 

9.2                                                                       in the fourth line “grant or exercise of an Option” shall be deleted
and replaced with “the vesting of a Conditional Award or transfer of Shares”;

 

9.3                                                                       in the penultimate line “Options granted or exercised” shall be
deleted and replaced with “any vesting of Conditional Awards or any transfer of
Shares”.

 

17

 

APPENDIX
5

 

IMPERIAL
TOBACCO GROUP INTERNATIONAL

LONG
TERM INCENTIVE PLAN

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.                                           Rule 4 shall be amended as follows:

 

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

 

“4(1)                  The Company may grant Options at any time to any Employee over such
number of Shares specified in Rule 2(1) (provided that he will not reach the
age (if any) indicated by him as his expected date of retirement before the end
of the Performance Period relating to such Options).”

 

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

 

18

 

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

 

9.                                           Rule 7 shall be deleted.

 

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

 

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

 

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

 

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

 

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

 

12.2                               after Rule 8(1) insert the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

13.2                               in the fourth and sixth lines the words “or grant” and “granted or”
shall be deleted respectively.

 

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

 

20

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