Document:

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                                                               EXHIBIT 4(c)(xii)

                                    RULES OF

                 THE SMITH & NEPHEW FRENCH SHARESAVE PLAN (2002)

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                         This is a copy of the rules of
                 The Smith & Nephew French Sharesave Plan (2002)
                    established by the board of directors of
                 the Company on 31 July 2002 and adopted by the
              Company Secretary pursuant to the authority delegated
                             upon him by the board.

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                                                 [LOGO OF PINSENT CURTIS BIDDLE]

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                                    CONTENTS

RULE                                                                     PAGE

1.    Interpretation                                                        1

2.    Issue of Invitations                                                  7

3.    Applications for Options                                              8

4.    Grant of Options                                                      9

5.    Monthly savings contributions                                        10

6.    Exercise Price                                                       11

7.    Limitation on Grant of Subscription Options                          11

8.    Exercise of an Option                                                11

9.    Manner of Exercise of an Option                                      13

10.   Non-Transferability and Lapse of Options                             14

11.   Relationship with Employment Contract                                15

12.   Demerger, Reconstruction or Winding-up of the Company                16

13.   Take-over of the Company                                             16

14.   Variation of Share Capital                                           17

15.   Alteration of this Plan                                              18

16.   Service of Documents                                                 18

17.   Applicable Law                                                       19

18.   Third Party Rights                                                   20

19.   Protection of Personal Data                                          20

20.   Miscellaneous                                                        20

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                                    RULES OF
                 THE SMITH & NEPHEW FRENCH SHARESAVE PLAN (2002)

1.      INTERPRETATION

1.1     Words and expressions used in this Plan shall have the meanings
        respectively given below:

        "Acquisition Cost"                 in relation to the exercise of an
                                           Option on any occasion, an amount in
                                           pounds sterling equal to the product
                                           of:

                                           (a)  the maximum number of Shares in
                                                respect of which that Option is
                                                then exercised in accordance
                                                with rule 8.5; and

                                           (b)  the Exercise Price

        "the Administrator"                Computershare Investor Services plc
                                           or such other person who is for the
                                           time being appointed by the Company
                                           to administer this Plan. The
                                           Administrator shall only be vested
                                           with pure administrative functions,
                                           but not with management nor
                                           decision-making powers.

        "Affiliate Company"                has the meaning given in Article 225
                                           - 180 of the Commerce Code

        "Announcement Date"                a date of notification to the London
                                           Stock Exchange of the annual or half
                                           year results of the Company

        "Applicant"                        a person who, in response to an
                                           Invitation, submits an Application

        "Application"                      an application for the grant of an
                                           Option made in accordance with rule 3

        "Application Date"                 in relation to any Invitation such
                                           date as is specified in accordance
                                           with rule 2.5.5 to be the last day on
                                           which an Application may be submitted
                                           in response to Invitations issued on
                                           any occasion

        "Associated Company"               any company which, in relation to the
                                           Company, is an associated company as
                                           that term is defined by:

                                           (a)  section 416 of the Taxes Act
                                                except that for the purposes of
                                                this Plan, subsection (1) of
                                                that section shall have effect
                                                with the omission of the words
                                                "or at any time within one year
                                                previously"; and

                                           (b)  is an Affiliate Company

                                        1

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        "Auditors"                         the auditors for the time being of
                                           the Company or if there are joint
                                           auditors, such one of them as the
                                           Directors may decide

        "Commerce Code"                    the French Code of Commerce, as
                                           amended and restated from time to
                                           time

        "Companies Act 1985"               the UK Companies Act 1985

        "the Company"                      Smith & Nephew plc (registered in
                                           England no 324357)

        "control"                          the meaning given in section 840 of
                                           the Taxes Act

        "Daily Official List"              the daily official list of the London
                                           Stock Exchange

        "Date of Grant"                    in relation to any Option, the date
                                           on which such Option was granted

        "Dealing Day"                      a day on which the London Stock
                                           Exchange is open for business

        "Directors"                        the board of directors  for the time
                                           being of the Company or a duly
                                           constituted committee of that board

        "Electronic Communication"         has the meaning given in section 15
                                           of the UK Electronic Communications
                                           Act 2000 (but excluding mobile
                                           telephone text messages)

        "Eligible Participant"             a French Employee or a French Officer
                                           who either:

                                           (a)  has held employment within the
                                                Group for such continuous period
                                                as the Directors have
                                                determined; or

                                           (b)  is nominated by the Directors

                                           and in either case is not precluded
                                           from participating in this Plan by
                                           virtue of Article 225-182 of the
                                           Commerce Code

        "Employer Company"                 in relation to an Applicant or an
                                           Optionholder at any time, the member
                                           of the Group or Associated Company
                                           with which such Applicant or
                                           Optionholder then holds or, if he has
                                           ceased to hold employment within the
                                           Group or with any Associated Company,
                                           last held office or employment

                                        2

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        "Exchange Rate"                    in relation to a conversion of
                                           currency on any day, the rate to be
                                           applied in making such conversion
                                           being such published exchange rate as
                                           the Directors shall determine for the
                                           preceding day or, if that preceding
                                           day is not a Dealing Day, the last
                                           preceding Dealing Day

        "the Exercise Date"                in relation to an Optionholder's
                                           Savings, the fourth anniversary of
                                           the date on which his first Monthly
                                           Contribution is received by the
                                           Savings Body

        "the Exercise Price"               in relation to Shares subject to any
                                           Option, the price per Share in pounds
                                           sterling payable for the acquisition
                                           of such Shares upon the exercise of
                                           that Option as determined in rule 6

        "French Employee"                  an employee (salarie) of a
                                           Participating Company

        "French Officer"                   Chairman ("President"), chief
                                           executive officer ("directeur
                                           general" and "directeur general
                                           delegue") general manager ("gerant"
                                           in a "societe par actions
                                           simplifiee"), management board
                                           members ("membres du directoire") but
                                           not directors ("administrateurs") or
                                           supervisory board members ("membres
                                           du conseil de surveillance") except
                                           in special circumstances described in
                                           Article L. 225-185 of the Commerce
                                           Code PROVIDED THAT such person would,
                                           for the purposes of section 743 of
                                           the Companies Act 1985 be regarded as
                                           a 'bona fide employee' of the
                                           Participating Company

        "Grantor"                          in  relation to an Option,  the
                                           Company  which has granted or
                                           proposes to grant such Option

        "the Group"                        the  Company  and every  other
                                           company  which is for the time
                                           being a Subsidiary

        "the Individual Share Limit"       in  relation  to  any  Option,  the
                                           amount  of  the  Notional Sterling
                                           Repayment Value divided by the
                                           Exercise Price

        "Initial Market Value"             in relation to a Share subject to any
                                           Option, the average of the quoted
                                           closing price of Shares for the
                                           twenty Dealing Days immediately
                                           preceding the Date of Grant

        "Invitation"                       an invitation to apply for the grant
                                           of an Option issued in accordance
                                           with rule 2

                                        3

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        "Invitation Date"                  in relation to an Option, the date on
                                           which the invitation to apply for the
                                           grant of such Option was issued

        "Jointly Owned Company"            a company (and any subsidiary as
                                           defined in section 736 of the
                                           Companies Act 1985 of such a company)
                                           of which the whole of the issued
                                           ordinary share capital is jointly
                                           owned by a member of the Group and
                                           another person (not being a member of
                                           the Group) but which is not a
                                           Subsidiary and is not under the
                                           control of such other person within
                                           the limits of Article L. 225-180 of
                                           the Commerce Code

        "Local Currency"                   the local currency of legal tender in
                                           France

        "Local Currency Equivalent"        in relation to an amount in pounds
                                           sterling on a given day, the
                                           equivalent value (or as nearly as may
                                           be) in Local Currency of such
                                           sterling amount after conversion at
                                           the Exchange Rate on that day

        "the London Stock Exchange"        London Stock Exchange plc

        "Model Code"                       the code adopted by the Company which
                                           contains provisions similar in
                                           purpose and effect to the provisions
                                           of the Model Code for Securities
                                           Transactions by Directors of Listed
                                           Companies issued by the UK Listing
                                           Authority from time to time

        "Monthly Contribution"             in relation to any Eligible
                                           Participant, the fixed amount (in
                                           Local Currency) of each of the 48
                                           monthly savings contributions which
                                           that individual undertakes to make in
                                           his Application

        "Net Pay"                          in relation to an Optionholder, the
                                           amount of his earnings for a given
                                           month, being earnings from the
                                           Optionholder's employment with any
                                           one or more members of the Group and
                                           any Associated Company, after any
                                           deductions have been made by the
                                           payer of or on account of any tax or
                                           social security contributions and
                                           after any other deductions (other
                                           than a deduction of a Monthly
                                           Contribution) which the payer has
                                           made under any legal obligation or
                                           pursuant to any authority duly given
                                           by the Optionholder

                                        4

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        "Notional Sterling Repayment       in relation to any Application, the
        Value"                             aggregate amount in pounds sterling
                                           (converted from Local Currency using
                                           the Exchange Rate on the Invitation
                                           Date) of 52 Monthly Contributions or,
                                           such other number of Monthly
                                           Contributions as the Directors may
                                           determine in relation to Options
                                           granted on any occasion so as to be
                                           consistent with the bonus rates
                                           payable on a certified contractual
                                           savings scheme within the meaning of
                                           section 326 of the Taxes Act

        "Official List"                    the daily official list of the London
                                           Stock Exchange

        "Option"                           a right to subscribe for Shares which
                                           is granted pursuant to, and is
                                           exercisable only in accordance with,
                                           this Plan and which is a 4-year
                                           Option

        "Option Shares"                    in relation to an Option, the Shares
                                           over which that Option subsists

        "Option Certificate"               a certificate issued by the Grantor
                                           evidencing the grant of an Option

        "Option Tax Liability"             in relation to an Optionholder, any
                                           liability of any member or former
                                           member of the Group or any Associated
                                           Company or former Associated Company
                                           to account to any tax authority or
                                           other body for any amount of, or
                                           representing, income tax or social
                                           security contributions or any other
                                           tax charge levy or other sum which
                                           the Optionholder is charged upon or
                                           in consequence of the grant, vesting,
                                           exercise, assignment or release of an
                                           Option or the acquisition of Shares
                                           under this Plan

        "Optionholder"                     in relation to any Option, the person
                                           to whom that Option has been granted
                                           or, if that person has died, his
                                           legal personal representatives

        "Ordinary Share Capital"           issued share capital of the Company
                                           other than fixed-rate preference
                                           shares

        "Participating Company"            a member of the Group to which the
                                           Directors have determined that this
                                           Plan shall extend

        "Personal Data"                    has the meaning it bears for the
                                           purposes of the UK Data Protection
                                           Act 1998

        "Personal Representatives"         in relation to an Optionholder, the
                                           heirs or legatees of the Optionholder

                                        5

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        "this Plan"                        The Smith & Nephew French Sharesave
                                           Plan (2002) as amended from time to
                                           time

        "Savings"                          in relation to an Optionholder at any
                                           time, the aggregate amount of that
                                           Optionholder's Monthly Contributions
                                           held by the Savings Body together
                                           with any accrued interest thereon

        "Savings Body"                     Societe Generale, such bank(s) and/or
                                           other savings institution(s) as may
                                           from time to time be approved by the
                                           Company for the purposes of this Plan

        "Shares"                           fully-paid ordinary shares in the
                                           capital of the Company registered in
                                           nominative form

        "Subscription Options"             Options which are rights granted by
                                           the Company to subscribe for Shares

        "Subsidiary"                       any company which is for the time
                                           being:

                                           (a)  a subsidiary as defined in:

                                                (i)  section 736 of the UK
                                                     Companies Act 1985 of the
                                                     Company;

                                                (ii) Article L. 233-1 of the
                                                     Commerce Code; and

                                           (b)  an Affiliate Company

        "Taxes Act"                        the UK Income and Corporation Taxes
                                           Act 1988

        "UK"                               the United Kingdom

        "UK Listing Authority"             the Financial Services Authority in
                                           its capacity as the competent
                                           authority for the purposes of Part VI
                                           of the UK Financial Services and
                                           Markets Act 2000

        "UK Scheme"                        The Smith & Nephew Sharesave Scheme
                                           (2002)

        "year"                             a financial year of the Company.

1.2     References to any statutory provision shall be read and construed as
        references to such provision as amended and re-enacted from time to time
        and no account should be taken of the rule headings which have been
        inserted for ease of reference only.

1.3     If any question, dispute or disagreement arises as to the interpretation
        of this Plan, the decision of the Directors shall (except as regards any
        matter required to be determined by the Auditors hereunder) be final and
        binding upon all persons.

                                        6

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1.4     In any matter in which they are required to act hereunder, the Auditors
        shall be deemed to be acting as experts and not as arbitrators and the
        UK Arbitration Act of 1996 shall not apply in relation to any such
        matter.

1.5     Words denoting the masculine gender shall include the feminine.

1.6     Words denoting the singular shall include the plural and vice versa.

2.      ISSUE OF INVITATIONS

2.1     Subject to the following provisions of this rule 2, the Company may from
        time to time issue, or procure the issue by the Administrator, to all
        persons who are or are expected to be Eligible Participants, invitations
        to apply for the grant of Options.

2.2     Invitations may be issued:

        2.2.1   in the period of 42 days beginning with the fourth Dealing Day
                following an Announcement Date

        or, if the Company is restricted by statute, order or regulation
        (including any regulation, order or requirement imposed on the Company
        by the London Stock Exchange or any other regulatory authority) from
        issuing invitations in any such period, at any time in the period of 42
        days beginning with the date on which such restriction is removed; and

        2.2.2   at any other time if the Directors consider the circumstances to
                be exceptional unless the Company is or would then be so
                restricted from issuing invitations at that time.

2.3     Invitations issued to Eligible Participants in France shall be issued at
        the same time and be on the same terms.

2.4     Invitations may be issued in writing or by Electronic Communication or
        in the form of notices, advertisements, circulars or otherwise for the
        general attention of employees and to which the particular attention of
        individual employees is drawn by notices issued with pay and salary
        advice slips SAVE THAT an invitation may not be issued to an Eligible
        Participant by Electronic Communication unless that person is known by
        his Employer Company to have personal access during his normal business
        hours to information sent to him by Electronic Communication.

2.5     Each invitation shall:

        2.5.1   identify the Savings Body;

        2.5.2   state that it is a condition of the grant of an Option that the
                Eligible Participant must first undertake to make 48 consecutive
                monthly savings contributions (by way of deductions from net
                payments of salary or by such other arrangements as may be
                permitted by the Directors in France) in Local Currency to an
                account with the Savings Body;

        2.5.3   specify the maximum and minimum amounts of such monthly savings
                contributions;

                                        7

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        2.5.4   invite the person to whom it is addressed to apply for an
                Option;

        2.5.5   specify the last day on which an Application may be made

        and shall otherwise be in such form as the Company shall determine.

2.6     On any occasion on which invitations are issued, the Directors may in
        their discretion determine and announce the maximum number of Shares in
        respect of which Options will be granted in response to Applications
        made pursuant to such Invitations.

2.7     The amount of an Eligible Participant's Monthly Contribution shall be
        not less than the Local Currency equivalent of (GBP)5 and not greater
        than the Local Currency equivalent of (GBP)250 or, in either case,
        such other sum as the Directors may from time to time determine.

2.8     No invitation may be issued if the Company would be restricted from
        granting Options by reason of rule 4.5.2(c).

3.      APPLICATIONS FOR OPTIONS

3.1     Any Eligible Participant to whom an Invitation has been issued may apply
        for an Option by submitting to the person specified in the Invitation an
        application in writing which:

        3.1.1   is received at such address as shall be stated in the Invitation
                not later than the Application Date;

        3.1.2   specifies the amount of the monthly contributions proposed to be
                paid by the Eligible Participant and authorises his Employer
                Company to deduct such amount (or such lower amount as may be
                determined by the Directors having regard to the limitations
                imposed by the Plan) from his pay;

        3.1.3   includes an undertaking by the Eligible Participant to his
                Employer Company to make 48 consecutive monthly savings
                contributions (in Local Currency) to a Savings Body;

        3.1.4   otherwise complies with such terms and conditions as may have
                been specified in the Invitation;

        3.1.5   is subject to the individual continuing to hold employment with
                a Participating Company until the Date of Grant;

        3.1.6   authorises the transfer and processing of the Applicant's
                Personal Data for the purposes of the administration of this
                Plan;

        3.1.7   provides that the Applicant agrees to accept and be bound by the
                rules of the Plan;

        3.1.8   is duly completed and signed by the Applicant

        and is otherwise in such form as the Directors may determine.

                                        8

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3.2     No Eligible Participant shall make more than one Application nor be
        granted more than one Option in response to the issue of an Invitation
        on any occasion.

4.      GRANT OF OPTIONS

4.1     An Option may be granted by the Company.

4.2     An Option shall not be granted to any person who is not an Eligible
        Participant at the Date of Grant.

4.3     The maximum number of Shares in respect of which an Option shall be
        granted in response to any Application shall not in any event exceed the
        Individual Share Limit.

4.4     Subject to rule 4.3, the Directors shall have an absolute discretion as
        to whether, and in respect of how many Shares, any Option should be
        granted.

4.5     Options for which Invitations have been issued on any occasion shall be
        granted within the period of 30 days beginning with the Invitation Date
        PROVIDED THAT:

        4.5.1   if on any occasion it is necessary to reduce the number of
                Shares over which Options are granted (so as to avoid exceeding
                the limit set out in rule 7 or otherwise) in one or more
                countries, the Directors may grant such Options at any time
                within the period of 42 days beginning with the Invitation Date;

        4.5.2   Options shall not be granted within the following periods:

                (a)     20 Dealing Days from the date:

                        (i)     a dividend is distributed;

                        (ii)    on which a resolution is passed to increase the
                                authorised share capital of the Company;

                (b)     10 Dealing Days immediately prior to and following the
                        Announcement Date;

                (c)     after 2 June 2005; and

                (d)     any day when the Company is in possession of
                        price-sensitive information which is not within the
                        public domain, and within ten days after such
                        information fell into the public domain.

        4.5.3   If on any occasion Options cannot be granted as a result of the
                restriction in rules 4.5.2(a)(i), 4.5.2(a)(ii) or 4.5.2(d) the
                Directors may grant such Options at any time within the period
                of 42 days following the end of such restriction.

4.6     As soon as reasonably practicable after the Date of Grant, the Company
        shall, or shall procure, the issue to each Optionholder of an Option
        Certificate which specifies:

        4.6.1   the Grantor;

        4.6.2   the Date of Grant;

                                        9

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        4.6.3   the number of Shares in respect of which the Option is granted;

        4.6.4   the Exercise Price;

        4.6.5   the earliest date on which the Option will normally become
                exercisable;

        4.6.6   that it is a term of the Option that the Optionholder shall (to
                the extent permitted by law) be responsible for any Option Tax
                Liability which may arise;

        4.6.7   that the Option shall lapse upon the occurrence of an event
                referred to in rule 8.4

        and shall otherwise be in such form as the Grantor shall determine
        from time to time.

5.      MONTHLY SAVINGS CONTRIBUTIONS

5.1     Subject to rule 5.3, a Monthly Contribution may be made by:

        5.1.1   the Optionholder's Employer Company deducting the whole amount
                from the Optionholder's Net Pay for the relevant month and
                paying such amount (on the Optionholder's behalf) to an account
                with the Savings Body; or

        5.1.2   the Optionholder entering into such other arrangement as may be
                permitted by the Employer Company for the Monthly Contribution
                to be paid to an account with the Savings Body.

5.2     An Optionholder's Savings shall be deposited with the Savings Body
        and shall at all times remain the property of the Optionholder so
        that none of the Company, the Optionholder's Employer or the
        Administrator shall have any interest in such Savings.

5.3     If in any month, and in consequence of an Optionholder being absent from
        work by reason of maternity leave, military service (or such other
        reason which is, in the Directors' opinion an equivalent circumstance or
        event resulting in a period of temporary suspension in employment), the
        amount of such Optionholder's Net Pay is insufficient to allow for the
        deduction in full of his Monthly Contribution for, or in respect of,
        that month, the Optionholder may make other arrangements for payment to
        the Savings Body of the whole, or any balance remaining, of such Monthly
        Contribution, provided that the full amount of such Monthly Contribution
        is paid to the Savings Body not later than 30 days after the end of the
        relevant month.

5.4     An Option shall not lapse and cease to be exercisable by reason only
        that the Optionholder has failed to make not more than six Monthly
        Contributions (whether by reason of any insufficiency of Net Pay or
        otherwise).

5.5     An Option shall immediately lapse and cease to be exercisable if, after
        six of the Optionholder's Monthly Contributions have not been made, a
        seventh Monthly Contribution is not made by the due date for payment.

                                       10

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6.      EXERCISE PRICE

6.1     Subject to rule 14, on the Date of Grant, the Company shall determine
        the price per Share payable upon the exercise of Options granted on the
        same day to Eligible Participants in France, but this shall not be less
        than:

        6.1.1   95% of the Initial Market Value (rounded up to the nearest whole
                penny); or, if greater

        6.1.2   in the case of a Subscription Option, the nominal value of a
                Share.

7.      LIMITATION ON GRANT OF SUBSCRIPTION OPTIONS

7.1     The number of Shares in respect of which Subscription Options may be
        granted in any year, when added to:

        7.1.1   the number of Shares in respect of which Subscription Options
                have previously been granted (and which, if not exercised, have
                not ceased to be exercisable); and

        7.1.2   the number of Shares issued or in respect of which rights to
                subscribe for Shares have previously been granted (and which
                have neither been exercised, nor ceased to be exercisable)
                pursuant to any other employee share option or share incentive
                plan

        in that year and the preceding nine years shall not exceed 10 per cent
        of the Ordinary Share Capital.

8.      EXERCISE OF AN OPTION

8.1     Subject to the following provisions of this rule 8 and rules 12 and 13,
        an Option shall only be exercisable within the period of 6 months
        beginning with the Exercise Date and, if not then exercised, shall lapse
        and cease to be exercisable at the end of that period.

8.2     If an Optionholder dies, his Personal Representatives may exercise that
        Option during the period of 6 calendar months commencing on the date of
        his death and if it is not then exercised that Option shall lapse and
        cease to be exercisable at the end of such period.

8.3     An Optionholder who ceases to hold employment within the Group for any
        of the following reasons may exercise his Option during the relevant
        specified period (or in the case of rules 8.3.2 or 8.3.3, such
        additional period not exceeding the period of 6 months following
        cessation as the Directors may determine and notify to the
        Optionholder):

        8.3.1   injury, ill-health or disability (meaning a second or third
                category disability pursuant to Article L. 341-1 of the Code de
                la securite sociale, determined by the work physician ("medecin
                du travail") according to French law, who will issue a statement
                of disability to the satisfaction of the directors of his
                Employer Company), 6 calendar months commencing on the date of
                cessation;

                                       11

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        8.3.2   redundancy, 3 calendar months immediately prior to the date the
                employee received such notice from his Employer Company; or

        8.3.3   retirement at or after his normal retirement age, 3 calendar
                months immediately prior to cessation

        and his Option may be exercised to the extent permitted by rule 8.5.2
        during the applicable period. To the extent that the Option is not
        then exercised, it shall lapse and cease to be exercisable at the end
        of such applicable period.

8.4     If at any time before the Exercise Date an Optionholder ceases to hold
        employment with a member of the Group or an Associated Company or a
        Jointly Owned Company for any reason other than those mentioned in rules
        8.2 and 8.3:

        8.4.1   if such cessation is by reason of:

                (a)     the company by which the Optionholder is employed
                        becoming neither a member of the Group nor an Associated
                        Company nor a Jointly Owned Company; or

                (b)     the fact that the Optionholder's employment with a
                        member of the Group or an Associated Company relates to
                        a business or part of a business which is transferred to
                        a person which is neither a member of the Group nor an
                        Associated Company nor a Jointly Owned Company

                then the Directors may exercise their discretion to permit the
                Optionholder to exercise his Option within such period (not
                exceeding 6 months following cessation) as may be notified to
                him prior to cessation. To the extent that the Option is not
                then exercised, it shall lapse and cease to be exercisable at
                the end of such period; or

        8.4.2   in any other case (or if the Directors do not exercise their
                discretion pursuant to rule 8.4.1 above), his Option shall
                immediately lapse and cease to be exercisable upon cessation.

8.5     An Option may only ever be exercised:

        8.5.1   subject to the Optionholder not having failed to make any
                Monthly Contributions, pursuant to rules 8.1 and 8.2 in respect
                of all of the Option Shares; or

        8.5.2   pursuant to rules 8.2, 8.3, 12 or 13 (or pursuant to rules 8.1
                and 8.2 if the Optionholder has failed to make one or more
                Monthly Contributions), in respect of such number of Shares as
                is equal to:

                C X  D / 48

                where:

                C is the number of Option Shares; and

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                D is the number of Monthly  Contributions  actually made by the
                Optionholder before the date of exercise of the Option

                or, in either case, such lesser number of Option Shares as the
                Optionholder may specify in the notice of exercise given
                pursuant to rule 9.1.

8.6     For the purposes of this rule 8, an Optionholder shall not be treated as
        ceasing to hold employment within the Group until he no longer holds any
        office as a director or any employment with any member of the Group or
        any Associated Company or any Jointly Owned Company.

8.7     An Option may not be exercised more than once.

8.8     In deciding whether and when to exercise an Option, an Optionholder
        shall have regard to the Model Code

8.9     An Option may only be exercised pursuant to rules 12 or 13 if:

        8.9.1   such Option would then be exercised in circumstances in which
                favourable income tax treatment and exemptions from social
                security costs are available under Articles L. 225-180 et seq of
                the Commerce Code; or

        8.9.2   the Directors exercise their discretion to permit the
                Optionholder to exercise his Option pursuant to rules 12 or 13.

9.      MANNER OF EXERCISE OF AN OPTION

9.1     An Option shall be exercised only by the Optionholder giving notice in
        writing to the Company or, if so directed by the Company, the
        Administrator, which:

        9.1.1   is given at any time when the Option is exercisable;

        9.1.2   specifies the number of Shares in respect of which the Option is
                exercised in accordance with rule 8.5;

        9.1.3   is accompanied by payment of an amount in pounds sterling equal
                to the Acquisition Cost;

        9.1.4   unless the Company otherwise permits, is accompanied by the
                Option Certificate

        and is otherwise in such form as the Company may from time to time
        determine and notify to the Optionholder.

9.2     Within 30 days after the date on which the Company shall have received a
        valid notice of exercise of an Option the Company shall procure that:

        9.2.1   the monies accompanying that notice are applied in payment of
                the Acquisition Cost for the number of Shares in respect of
                which the Option is then exercised; and

                                       13

<PAGE>

        9.2.2   subject to rules 9.3 and 9.6, the number of Shares in respect of
                which the Option is then exercised are allotted and issued or
                transferred to or to the order of the Optionholder.

9.3     The Grantor shall not be obliged to issue, transfer or procure the
        transfer of any Shares or any interest in any Shares upon the exercise
        of an Option unless and until the Optionholder has paid to the Grantor
        such sum as, in the opinion of the Company, is sufficient to indemnify
        any existing or former member of the Group or any existing or former
        Associated Company in full against any Option Tax Liability or has made
        such other arrangement as, in the opinion of the Company, will ensure
        that the Optionholder will satisfy his liability under such indemnity.

9.4     As soon as reasonably practicable after allotting or transferring any
        Shares as mentioned in rule 9.2.2, the Company shall procure:

        9.4.1   the issue to the Optionholder of a definitive share certificate
                or such acknowledgement of shareholding as is prescribed from
                time to time in respect of the Shares so allotted or
                transferred; and

        9.4.2   if at that time the Shares are listed on the Daily Official
                List, any Shares so allotted are admitted to the Daily Official
                List.

9.5     If after an Option has been exercised, the Grantor is restricted from
        issuing, transferring or procuring the transfer of Shares to the
        Optionholder by reason of any statutory, regulatory or other legal
        provision, rule or the Model Code or any other requirement or guidance
        which is issued by the UK Listing Authority or any other body on behalf
        of institutional investors in the Company relating to dealings in Shares
        by directors or employees of any member of the Group, the Grantor shall
        not be obliged to issue, transfer or procure the transfer of Shares in
        consequence of such exercise until after all such restrictions are
        lifted but shall do so within the period of 30 days thereafter.

9.6     The allotment or transfer of any Shares upon the exercise of an Option
        shall be subject to the Memorandum and Articles of Association of the
        Company and to any necessary consents of any governmental or other
        authorities (whether in the United Kingdom, the French Republic or
        overseas) under any enactments or regulations from time to time in force
        and it shall be the responsibility of the Optionholder to do all such
        things as may be necessary to obtain or obviate the necessity of any
        such consent.

9.7     All Shares allotted or transferred upon the exercise of any Option shall
        rank equally in all respects with the Shares for the time being in issue
        save as regards any rights attaching to such Shares by reference to a
        record date prior to the date of such allotment or transfer.

9.8     The costs of stamp duty and dealing costs and commissions incurred when
        Shares are purchased upon the exercise of an Option shall be borne by
        the Company.

10.     NON-TRANSFERABILITY AND LAPSE OF OPTIONS

10.1    During his lifetime only the individual to whom an Option is granted may
        exercise that Option.

10.2    An Option shall immediately lapse and cease to be exercisable if:

                                       14

<PAGE>

        10.2.1  it is transferred or assigned (other than to Personal
                Representatives of the Optionholder), mortgaged, charged or
                otherwise disposed of by the Optionholder;

        10.2.2  the Optionholder becomes bankrupt or makes or proposes to make,
                a voluntary arrangement under the French Consumer Code (Articles
                L331-1 to L333-8 of the Law number 89-1010 dated 31 December
                1989), or any other scheme, arrangement or compromise in
                relation to his debts, with his creditors or any section of
                them;

        10.2.3  the Optionholder is not or ceases for any other reason (except
                his death) to be the sole legal and beneficial owner of the
                Option free from encumbrances or would not, upon the exercise of
                the Option, be the sole legal and beneficial owner of the Shares
                thereby acquired, free from encumbrances;

        10.2.4  (unless in any individual case the Company otherwise determines)
                the Optionholder, whilst remaining in employment with a member
                of the Group or an Associated Company or a Jointly Owned
                Company, instructs his Employer Company to cease deducting
                Monthly Contributions from his salary;

        10.2.5  if, after six of the Optionholder's Monthly Contributions have
                not been made for any reason, a seventh Monthly Contribution is
                not made on the due date for payment; or

        10.2.6  (unless in any individual case the Company otherwise determines)
                an Optionholder obtains repayment of any of his savings
                contributions (or interest on such contributions) unless such
                Option is then immediately exercisable pursuant to rules 8.2,
                8.3, 12 or 13.

10.3    Save as mentioned in rule 8.2, an Option shall in any event lapse and
        cease to be exercisable at the end of the period of 6 months beginning
        with the Exercise Date.

11.     RELATIONSHIP WITH EMPLOYMENT CONTRACT

11.1    The grant of an Option shall not form part of the Optionholder's
        entitlement to remuneration or benefits pursuant to his contract of
        employment nor shall the existence of a contract of employment between
        any person and any present or past member of the Group or Associated
        Company or Jointly Owned Company, give such person any right entitlement
        or expectation to have an Option granted to him in respect of any number
        of Shares or any expectation that an Option might be granted to him or
        that he will be invited to apply for the grant of an Option whether
        subject to any conditions or at all.

11.2    Neither the existence of this Plan nor the fact that an individual has
        on any occasion been granted an Option (or been invited to apply for the
        grant of an Option) shall give such individual any right entitlement or
        expectation that he has or will in future have any such right
        entitlement or expectation to participate in this Plan by being granted
        an Option (or invited to apply for the grant of an Option) on any other
        occasion.

                                       15

<PAGE>

11.3    The rights granted to an Optionholder upon the grant of an Option shall
        not afford the Optionholder any rights or additional rights to
        compensation or damages in consequence of the loss or termination of his
        office or employment with any present or past member of the Group or
        Associated Company or Jointly Owned Company for any reason whatsoever
        (whether or not such termination is ultimately held to be wrongful or
        unfair).

11.4    The rights and obligations of an Optionholder under the terms of his
        contract of employment with any present or past member of the Group or
        Associated Company or Jointly Owned Company shall not be affected by the
        grant of an Option or his participation in this Plan.

11.5    An Optionholder shall not be entitled to any compensation or damages for
        any loss or potential loss which he may suffer by reason of being unable
        to exercise an Option in whole or in part in consequence of the loss or
        termination of his office or employment with any present or past member
        of the Group or Associated Company or Jointly Owned Company for any
        reason whatsoever (whether or not such termination is ultimately held to
        be wrongful or unfair).

12.     DEMERGER, RECONSTRUCTION OR WINDING-UP OF THE COMPANY

12.1    Subject to rule 8.9, if notice is given to shareholders of the Company
        of a proposed demerger of the Company or of any Subsidiary the Company
        may give notice to Optionholders that Options may then be exercised
        within such period (not exceeding 30 days) as the Company may specify in
        such notice to Optionholders SAVE THAT no such notice to Optionholders
        shall be given unless the Auditors have confirmed in writing to the
        Company that the interests of Optionholders would or might be
        substantially prejudiced if before the proposed demerger has effect
        Optionholders could not exercise their Options and be registered as the
        holders of the Shares thereupon acquired.

12.2    Subject to rule 8.9, if 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 pursuant to section
        425 of the Companies Act 1985 the Optionholder shall be entitled to
        exercise his Option during the period of 6 months commencing on the date
        on which the court sanctions the compromise or arrangement, and
        thereafter the Option shall lapse and cease to be exercisable.

12.3    Subject to rule 8.9, if notice is given to the shareholders of the
        Company of a resolution for the voluntary winding-up of the Company,
        notice of the same shall be given to all Optionholders and each
        Optionholder shall be entitled to exercise his Option at any time within
        the period of 6 months commencing on the date on which the resolution is
        passed.

12.4    All Options shall immediately lapse and cease to be exercisable upon the
        commencement of a winding-up of the Company.

13.     TAKE-OVER OF THE COMPANY

13.1    Subject to rule 8.9, if, as a result of either:

        13.1.1  a general offer to acquire the whole of the Ordinary Share
                Capital which is made on a condition such that if it is
                satisfied the person making the offer will have control of the
                Company; or

                                       16

<PAGE>

        13.1.2  a general offer to acquire all the shares in the Company of the
                same class as the Shares

        the Company shall come under the control of another person or
        persons, an Optionholder shall be entitled to exercise his Option to
        the extent permitted by rule 8.5 within the period of 6 months
        beginning with the date 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. To the extent that the Option is not then
        exercised, it shall lapse and cease to be exercisable at the end of
        such period.

13.2    Subject to rule 8.9, if at any time any person becomes entitled or
        bound to acquire shares in the Company under sections 428 to 430F
        (inclusive) of the Companies Act 1985 an Optionholder shall be entitled
        to exercise his Option to the extent permitted by rule 8.5 at any time
        when that person remains so entitled or bound. To the extent that the
        Option is not then exercised, it shall lapse and cease to be
        exercisable at the end of such period.

13.2    For the purposes of the preceding provisions of this rule 13 a person
        shall be deemed to have control of the Company if he and others
        acting in concert with him have together obtained control of it.

14.     VARIATION OF SHARE CAPITAL

14.1    In the event of any alteration of the Ordinary Share Capital by way
        of a capitalisation or rights issue or by way of sub-division,
        consolidation, reduction or any other variation in the share capital
        of the Company the Grantor may make such adjustments as it considers
        appropriate:

        14.1    to the aggregate number of Shares subject to any Option;

        14.2    to the Exercise Price; and/or

        14.3    if an Option has been exercised but no Shares have been allotted
                or transferred, to the number of Shares which may be so allotted
                or transferred and the Acquisition Cost relating to such Shares

        PROVIDED THAT:

        (a)  except in the case of a subdivision, consolidation or
             capitalisation issue any such adjustment is confirmed in writing by
             the Auditors to be in their opinion fair and reasonable;

        (b)  the aggregate Acquisition Cost payable by an Optionholder on the
             exercise of all of his Options shall not be materially altered;

        (c)  except insofar as the Directors, on behalf of the Company, may then
             agree to capitalise the Company's reserves and apply the same in
             paying up the difference between the Exercise Price and the nominal
             value of the Shares at the time of exercise, the Exercise Price in
             relation to a Subscription Option is not reduced below the nominal
             value of those Shares;

                                       17

<PAGE>

        (d)  the number of Shares as so adjusted shall be rounded down to the
             nearest whole number and the Exercise Price as so adjusted shall be
             rounded up to the nearest whole penny; and

        (e)  no alteration shall be made in the Exercise Price otherwise than in
             circumstances mentioned in Article L225-181 of the Commerce Code
             and Articles 174-13 and 174-16 Section 2 of the Decree no. 67-236
             of 23 March 1967.

14.2    As soon as reasonably practicable after making any adjustment pursuant
        to rule 14.1 the Grantor shall give notice in writing thereof to every
        Optionholder affected thereby and may call in any Option Certificates
        for endorsement or replacement.

15.     ALTERATION OF THIS PLAN

15.1    The Directors may at any time (with the prior consent of the Grantor) by
        resolution in writing alter or add to any of the provisions of this Plan
        in any respect PROVIDED THAT:

        15.1.1  no such alteration or addition shall be made to the advantage of
                existing or new Optionholders to the provisions relating to
                eligibility to participate, basis of determining entitlement to
                Optionholders' rights to acquire shares, exercise price, overall
                and individual limitations on the grant of options under this
                Plan and the adjustment of such rights in the event of a
                variation of Ordinary Share Capital without the prior approval
                by ordinary resolution of the shareholders of the Company in
                general meeting SAVE THAT this provision shall not apply to the
                extent that such alteration or addition is in the opinion of the
                Directors a minor amendment which is necessary or appropriate:

        (a)  to benefit the administration of this Plan;

        (b)  to take account of a change in legislation; or

        (c)  to obtain or maintain favourable tax, exchange control or
             regulatory treatment for participants in the Plan or for the
             Company or any member of the Group in any jurisdiction; and

        15.1.2  no amendment may be made which affects the terms of Options
                granted to Optionholders if the amendment is inconsistent with
                Articles L.225-181 of Commerce Code and Articles 174.8 to 174.16
                of Decree no. 67-236 of 23 March 1967.

15.2    If in relation to any Options the Grantor is not the Company, no
        alteration or addition shall be made to the terms of such Options
        without the approval of the Grantor.

15.3    As soon as reasonably practicable after making any such alteration or
        addition the Directors (on behalf of the Grantor) shall give notice in
        writing thereof to every Optionholder (if any) affected thereby.

16.     SERVICE OF DOCUMENTS

16.1    Except as otherwise provided in this Plan, any notice or document to be
        given by, or on behalf of, the Company or other Grantor or the
        Administrator to any person in accordance or in connection with this
        Plan shall be duly given:

                                       18

<PAGE>

        16.1.1  by sending it through the post in a pre-paid envelope to the
                address last known to the Company to be his address and, if so
                sent, it shall be deemed to have been duly given on the date of
                posting; or

        16.1.2  if he holds office or employment with any member of the Group or
                any Associated Company, by delivering it to him at his place of
                work or by sending to him a facsimile transmission or Electronic
                Communication addressed to him at his place of work and if so
                sent it shall be deemed to have been duly given at the time of
                transmission SAVE THAT a notice or document shall not be duly
                given by Electronic Communication unless that person is known by
                his Employer Company to have personal access during his normal
                business hours to information sent to him by Electronic
                Communication.

16.2    Any notice or document so sent to an employee or Optionholder shall be
        deemed to have been duly given notwithstanding that such Optionholder is
        then deceased (and whether or not the Company or other Grantor has
        notice of his death) except where his Personal Representatives have
        supplied to the Company an address to which documents are to be sent.

16.3    Any notice in writing or document to be submitted or given by an
        Optionholder to the Grantor, the Company or the Administrator in
        accordance or in connection with this Plan may be delivered, sent by
        post, facsimile transmission or Electronic Communication but shall not
        in any event be duly given unless:

        16.3.1  it is actually received (or, in the case of an Electronic
                Communication, opened) by the secretary of the Company or such
                other individual as may from time to time be nominated by the
                Company and whose name and address is notified to Optionholders;
                and

        16.3.2  if given by Electronic Communication (and is so required by the
                Company), it includes a digitally encrypted signature of the
                Optionholder.

16.4    For the purposes of this Plan, an Electronic Communication shall be
        treated as not having been duly made or received if the recipient of
        such Electronic Communication notifies the sender that it has not been
        opened because it contains, or is accompanied by a warning or caution
        that it could contain or be subject to, a virus or other computer
        programme which could alter damage or interfere with any computer
        software or Electronic Communication.

17.     APPLICABLE LAW

17.1    This Plan shall be governed by and construed in all respects in
        accordance with English law.

17.2    In applying for the grant of an Option an Eligible Participant shall be
        deemed to submit to the exclusive jurisdiction of the English courts as
        regards any claim legal action or proceedings arising out of this Plan
        and to waive any objection to such proceedings taking place in the
        English courts on the grounds of venue or on the grounds that such
        proceedings have been brought in an inconvenient forum.

                                       19

<PAGE>

18.     THIRD PARTY RIGHTS

        Except as otherwise expressly stated to the contrary, neither this
        Plan nor the grant of any Option nor the U.K. Contracts (Rights of
        Third Parties) Act 1999 shall have the effect of giving any third
        party any rights under this Plan and that Act shall not apply to this
        Plan or to the terms of any Option granted pursuant to this Plan.

19.     PROTECTION OF PERSONAL DATA

19.1    By accepting the grant of an Option the Optionholder shall agree and
        consent to:

        19.1.1  the collection, use and processing by any member of the Group
                and the Administrator of Personal Data relating to the
                Optionholder, for all purposes reasonably connected with the
                administration of this Plan and the subsequent registration of
                the Optionholder or any other person as a holder of Shares
                acquired pursuant to the exercise of an Option;

        19.1.2  any member of the Group and the Administrator transferring
                Personal Data to or between any of such persons for all purposes
                reasonably connected with the administration of the Plan;

        19.1.3  the use of such Personal Data by any such person for such
                purposes; and

        19.1.4  the transfer to and retention of such Personal Data by any third
                party for such purposes.

20.     MISCELLANEOUS

20.1    The Company shall at all times keep available sufficient authorised but
        unissued Shares to satisfy the exercise in full of all the Subscription
        Options for the time being remaining capable of being exercised under
        this Plan.

20.2    The Directors may from time to time make and vary such rules and
        regulations not inconsistent herewith and establish such procedures for
        the administration and implementation of this Plan as they think fit. In
        the event of any dispute or disagreement as to the interpretation of
        this Plan or of any such rules, regulations or procedures or as to any
        question or right arising from or related to this Plan, the decision of
        the Directors shall (except as regards any matter required to be
        determined by the Auditors hereunder) be final and binding upon all
        persons.

20.3    The Company shall not be obliged to provide Optionholders with copies of
        any notices, circulars or other documents sent to holders of Shares.

20.4    The costs of the administration and implementation of this Plan shall be
        borne by the Company.

20.5    The issue of an Invitation on any occasion is made at the Company's
        discretion. No entitlement to the issue of an Invitation, the grant of
        an Option and/or the issue of Shares in the future shall thereby be
        created on the grounds that such Invitations were issued or Options were
        granted in the past nor on the grounds that Options may previously have
        been granted over a particular number of Shares at a certain price. Even
        the repeated grant of Options and/or the issue of Shares shall not
        create future entitlements to receive Options and/or Shares at all or to
        be granted Options over a specific number of Shares or at a specific
        price.

                                       20

<PAGE>

20.6    If any provision of this Plan is held invalid, illegal or unenforceable
        for any reason by any court of competent jurisdiction, such provision
        shall be severed and the remainder of the provisions of this Plan shall
        continue in full force and effect as if this Plan had been established
        with the invalid, illegal or unenforceable provision eliminated.

                                       21<PAGE>

                                                                     Exhibit 4.1

              ====================================================

                            SMITH & NEPHEW GROUP PLC

                                       AND

                               SMITH & NEPHEW PLC

                                       AND

                              THE BANK OF NEW YORK

                                  As Depositary

                                       AND

               OWNERS AND HOLDERS OF AMERICAN DEPOSITARY RECEIPTS

                                Deposit Agreement

                          Dated as of November 16, 1999
                    Amended and Restated as of August 7, 2000
                  Amended and Restated as of ____________, 2003

              ====================================================

<PAGE>

                                DEPOSIT AGREEMENT

     DEPOSIT AGREEMENT dated as of November 16, 1999, as amended and restated as
of August 7, 2000, as amended and restated as of ___________, 2003 among SMITH &
NEPHEW GROUP PLC, incorporated under the laws of England and Wales (herein
called the Issuer), SMITH & NEPHEW PLC, incorporated under the laws of England
and Wales (herein called S&N), THE BANK OF NEW YORK, a New York banking
corporation (herein called the Depositary), and all Owners and holders from time
to time of American Depositary Receipts (as hereinafter defined) issued
hereunder.

                              W I T N E S S E T H :

     WHEREAS, S&N, The Bank of New York, as depositary, and all holders from
time to time entered into a deposit agreement dated as of November 16, 1999, as
amended and restated as of August 7, 2000 (the "Smith & Nephew plc Deposit
Agreement");

     WHEREAS, S&N is to be reorganized in accordance with a scheme of
arrangement under section 425 of the English Companies Act 1985 pursuant to
which the Issuer will become the holding company of S&N and all existing
ordinary shares of S&N will be cancelled and each S&N shareholder will receive
for each ordinary share of S&N one ordinary share of S&N Group plus a beneficial
interest in one common access share of S&N to be held in the Smith & Nephew
Common Access Trust established for the purpose of holding such common access
shares for the benefit of S&N Group shareholders;

     WHEREAS, S&N and Smith & Nephew Group plc desire to substitute and replace
Smith & Nephew Group PLC for S&N as the Issuer under the Smith & Nephew plc
Deposit Agreement;

     WHEREAS, the Issuer and S&N now desire to amend and restate the S&N Deposit
Agreement to provide for such substitution and, as hereinafter set forth in this
Deposit Agreement (as hereinafter defined), for the deposit of Shares (as
hereinafter defined) of the Issuer from time to time with the Depositary or with
the Custodian (as hereinafter defined) as agent of the Depositary for the
purposes set forth in this Deposit Agreement, for the creation of American
Depositary Shares representing the Shares so deposited and for the execution and
delivery of American Depositary Receipts evidencing the American Depositary
Shares; and

     WHEREAS, the American Depositary Receipts are to be substantially in the
form of Exhibit A annexed hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;

<PAGE>

     NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties hereto as follows:

ARTICLE 1.     DEFINITIONS.

     The following definitions shall for all purposes, unless otherwise clearly
indicated, apply to the respective terms used in this Deposit Agreement:

     SECTION 1.1    American Depositary Shares.

          The term "American Depositary Shares" shall mean the securities
representing the interests in the Deposited Securities and evidenced by the
Receipts issued hereunder. Each American Depositary Share shall represent the
number of Shares specified in Exhibit A annexed hereto, until there shall occur
a distribution upon Deposited Securities covered by Section 4.3 or a change in
Deposited Securities covered by Section 4.8 with respect to which additional
Receipts are not executed and delivered, and thereafter American Depositary
Shares shall evidence the amount of Shares or Deposited Securities specified in
such Sections.

     SECTION 1.2    Article; Section.

          Wherever references are made in this Deposit Agreement to an "Article"
or "Articles" or to a "Section" or "Sections", such references shall mean an
article or articles or a section or sections of this Deposit Agreement, unless
otherwise required by the context.

     SECTION 1.3    Commission.

          The term "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency in the
United States.

     SECTION 1.4    Consultation.

          The term "Consultation" shall mean the good faith attempt by the
Depositary to discuss the relevant issue in a timely manner with a person
employed by the Issuer reasonably believed by the Depositary to be empowered by
the Issuer to engage in such discussion on behalf of the Issuer.

     SECTION 1.5    Custodians.

          The term "Custodians" shall mean the London, England office of The
Bank of New York, as agent of the Depositary for the purposes of this Deposit
Agreement, and any other firm or corporation which may hereafter be appointed by
the Depositary pursuant to the terms of Section 5.5, as substitute or additional
custodian or

<PAGE>

custodians hereunder, as the context shall require and shall also mean all of
them collectively.

     SECTION 1.6    Deposit Agreement.

          The term "Deposit Agreement" shall mean this amended and restated
deposit agreement, as the same may be amended from time to time in accordance
with the provisions hereof.

     SECTION 1.7    Depositary; Corporate Trust Office.

          The term "Depositary" shall mean The Bank of New York, a New York
banking corporation and any successor as depositary hereunder. The term
"Corporate Trust Office", when used with respect to the Depositary, shall mean
the office of the Depositary which at the date of this Agreement is 101 Barclay
Street, New York, New York, 10286. If the address of the Corporate Trust Office
changes after the date of this Deposit Agreement, notice shall be given 30 days
prior to such change by the Depositary to the Issuer of such new address. During
such 30 day notification period, the Issuer shall send all communications to the
Depositary's previous address.

     SECTION 1.8    Deposited Securities.

          The term "Deposited Securities" as of any time shall mean Shares at
such time deposited or deemed to be deposited under this Deposit Agreement and
any and all other securities, property and cash received by the Depositary or
the Custodian in respect thereof and at such time held hereunder, subject as to
cash to the provisions of Section 4.5.

     SECTION 1.9    Dollars; Pound; Pence.

          The term "Dollars" shall mean the lawful currency of the United
States. The terms "Pound" and "Pence" shall mean the lawful currency of the
United Kingdom.

     SECTION 1.10   Foreign Registrar.

          The term "Foreign Registrar" shall mean the entity that presently
carries out the duties of registrar for the Shares or any successor as registrar
for the Shares and any other appointed agent of the Issuer for the transfer and
registration of Shares.

     SECTION 1.11   Issuer.

          The term "Issuer" shall mean Smith & Nephew Group plc, incorporated
under the laws of England and Wales, and its successors.

<PAGE>

     SECTION 1.12   Owner.

          The term "Owner" shall mean the person in whose name a Receipt is
registered on the books of the Depositary maintained for such purpose.

     SECTION 1.13   Receipts.

          The term "Receipts" shall mean the American Depositary Receipts issued
hereunder evidencing American Depositary Shares.

     SECTION 1.14   Registrar.

          The term "Registrar" shall mean any bank or trust company having an
office in the Borough of Manhattan, The City of New York, which shall be
appointed to register Receipts and transfers of Receipts as herein provided and
shall include any co-registrar appointed by the Depositary after Consultation
with the Issuer.

     SECTION 1.15   Restricted Securities.

          The term "Restricted Securities" shall mean Shares, or Receipts
representing such Shares, which are acquired directly or indirectly from the
Issuer or its affiliates (as defined in Rule 144 under the Securities Act of
1933) in a transaction or chain of transactions not involving any public
offering or which are subject to resale limitations under Regulation D under
that Act or both, or which are held by an officer, director (or persons
performing similar functions) or other affiliate of the Issuer, or which are
subject to other restrictions on sale or deposit under the laws of the United
States or the United Kingdom, or under a shareholder agreement or the Articles
of Association and By-laws of the Issuer.

     SECTION 1.16   Securities Act of 1933.

          The term "Securities Act of 1933" shall mean the United States
Securities Act of 1933, as from time to time amended.

     SECTION 1.17   Shares.

          The term "Shares" shall mean ordinary shares in registered form of the
Issuer. Each Share includes a beneficial interest in a common access share of
S&N, which interest is indivisible from the ordinary share. The common access
shares are held for the benefit of holders of Shares by the Smith & Nephew
Common Access Trust which is registered under the laws of England and Wales.
Each Share is validly issued and outstanding and fully paid, nonassessable and
free of any pre-emptive rights of the holders of outstanding Shares or hereafter
validly issued and outstanding and fully paid, nonassessable and free of any
pre-emptive rights of the holders of outstanding Shares or

<PAGE>

interim certificates representing such Shares; provided, however, that if there
shall occur any change in nominal value, a split-up or consolidation or any
other reclassification or, upon the occurrence of an event described in Section
4.8, an exchange or conversion in respect of the Shares, the term "Shares" shall
thereafter represent the successor securities resulting from such change in
nominal value, split-up or consolidation or such other reclassification or such
exchange or conversion. Reference to Shares shall include evidence of rights to
receive Shares; provided that in no event shall the term "Shares" include
evidence of rights to receive Shares with respect to which the full purchase
price has not been paid.

ARTICLE 2.     FORM OF RECEIPTS, DEPOSIT OF SHARES, EXECUTION AND DELIVERY,
               TRANSFER AND SURRENDER OF RECEIPTS.

     SECTION 2.1    Form and Transferability of Receipts.

          Definitive Receipts shall be substantially in the form set forth in
Exhibit A annexed to this Deposit Agreement, with appropriate insertions,
modifications and omissions, as hereinafter provided. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose, unless such Receipt shall have been executed by the Depositary
by the manual or facsimile signature of a duly authorized signatory of the
Depositary and, if a Registrar for the Receipts shall have been appointed,
countersigned by the manual or facsimile signature of a duly authorized officer
of the Registrar. The Depositary shall maintain books on which each Receipt so
executed and delivered as hereinafter provided and the transfer of each such
Receipt shall be registered. Receipts bearing the manual or facsimile signature
of a duly authorized signatory of the Depositary who was at any time a proper
signatory of the Depositary shall bind the Depositary, notwithstanding that such
signatory has ceased to hold such office prior to the execution and delivery of
such Receipts by the Registrar or did not hold such office on the date of
issuance of such Receipts.

          The Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or modifications not inconsistent with the
provisions of this Deposit Agreement as may be required by the Depositary or
required to comply with any applicable law or regulations thereunder or with the
rules and regulations of any securities exchange upon which American Depositary
Shares may be listed or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Receipts are subject by reason of the date of issuance of the underlying
Deposited Securities or otherwise.

          Title to a Receipt (and to the American Depositary Shares evidenced
thereby), when properly endorsed or accompanied by a proper instrument or
instruments of transfer, shall be transferable by delivery with the same effect
as in the case of a negotiable instrument; provided, however, that the Issuer
and the Depositary,

<PAGE>

notwithstanding any notice to the contrary, may treat the Owner thereof as the
absolute owner thereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in this Deposit Agreement and for all other purposes, and neither the Depositary
nor the Issuer shall have any obligation or be subject to any liability under
this Deposit Agreement to any holder of a Receipt unless such holder is the
Owner thereof.

     SECTION 2.2    Deposit of Shares.

          Subject to the terms and conditions of this Deposit Agreement, Shares
or evidence of rights to receive Shares may be deposited by delivery thereof to
any Custodian hereunder, accompanied by any appropriate instrument or
instruments of transfer, or endorsement, in form reasonably satisfactory to the
Custodian, together with all such certifications as may be required from the
individual depositing the underlying Shares or any governmental agency, stock
exchange, etc. by the Depositary or such Custodian in accordance with the
provisions of this Deposit Agreement, and, if the Depositary requires, together
with a written order directing the Depositary to execute and deliver to, or upon
the written order of, the person or persons stated in such order, a Receipt or
Receipts for the number of American Depositary Shares representing such deposit.
No Share shall be accepted for deposit unless accompanied by evidence, if any is
required by the Depositary, that is reasonably satisfactory to the Depositary
that all conditions to such deposit have been satisfied by the person depositing
such Shares under the laws and regulations of the United Kingdom and any
necessary approval has been granted by any governmental body in the United
Kingdom, if any, which is then performing the function of the regulation of
currency exchange. If required by the Depositary, Shares presented for deposit
at any time, whether or not the transfer books of the Issuer or the Foreign
Registrar, if applicable, are closed, shall also be accompanied by an agreement
or assignment, or other instrument satisfactory to the Depositary, which will
provide for the prompt transfer to the Custodian of any dividend, or right to
subscribe for additional Shares or to receive other property which any person in
whose name the Shares are or have been recorded may thereafter receive upon or
in respect of such deposited Shares, or in lieu thereof, such agreement of
indemnity or other agreement as shall be satisfactory to the Depositary.

          At the request and risk and expense of any person proposing to deposit
Shares, and for the account of such person, the Depositary may receive
certificates for Shares to be deposited, together with the other instruments
herein specified, for the purpose of forwarding such Share certificates to the
Custodian for deposit hereunder.

          Upon each delivery to a Custodian of a certificate or certificates for
Shares to be deposited hereunder, together with the other documents above
specified, such Custodian shall, as soon as transfer and recordation can be
accomplished, present such certificate or certificates to the Issuer or the
Foreign Registrar, if applicable, for transfer

<PAGE>

and recordation of the Shares being deposited in the name of the Depositary or
its nominee or such Custodian or its nominee.

          Deposited Securities shall be held by the Depositary or by a Custodian
for the account and to the order of the Depositary or at such other place or
places as the Depositary shall determine.

     SECTION 2.3    Execution and Delivery of Receipts.

          Upon receipt by any Custodian of any deposit pursuant to Section 2.2
hereunder (and in addition, if the transfer books of the Issuer or the Foreign
Registrar, if applicable, are open, the Depositary may in its sole discretion
require a proper acknowledgment or other evidence from the Issuer that any
Deposited Securities have been recorded upon the books of the Issuer or the
Foreign Registrar, if applicable, in the name of the Depositary or its nominee
or such Custodian or its nominee), together with the other documents required as
above specified, such Custodian shall notify the Depositary of such deposit and
the person or persons to whom or upon whose written order a Receipt or Receipts
are deliverable in respect thereof and the number of American Depositary Shares
to be evidenced thereby. Such notification shall be made by letter or, at the
request, risk and expense of the person making the deposit, by cable, telex or
facsimile transmission. Upon receiving such notice from such Custodian, or upon
the receipt of Shares by the Depositary, the Depositary, subject to the terms
and conditions of this Deposit Agreement, shall execute and deliver at its
Corporate Trust Office, to or upon the order of the person or persons named in
the notice delivered to the Depositary, a Receipt or Receipts, registered in the
name or names and evidencing any authorized number of American Depositary Shares
requested by such person or persons, but only upon payment to the Depositary of
the fees of the Depositary for the execution and delivery of such Receipt or
Receipts as provided in Section 5.9, and of all taxes and governmental charges
and fees payable in connection with such deposit and the transfer of the
Deposited Securities.

          The Depositary shall execute and deliver Receipts only in accordance
with the provisions of this Deposit Agreement and the form of Receipt. The
Depositary shall not deliver Shares hereunder except upon the receipt and
cancellation of Receipts.

     SECTION 2.4    Transfer of Receipts; Combination and Split-up of Receipts.

          The Depositary, subject to the terms and conditions of this Deposit
Agreement, including payment of the fees of the Depositary as provided in
Section 5.9, shall, without unreasonable delay, register transfers of Receipts
on its transfer books from time to time, upon any surrender of a Receipt, by the
Owner in person or by a duly authorized attorney, properly endorsed or
accompanied by a proper instrument or instruments of transfer, and duly stamped
as may be required by the laws of the State of New York and of the United States
of America. Thereupon the Depositary shall execute

<PAGE>

a new Receipt or Receipts and deliver the same to or upon the order of the
person entitled thereto, but only upon payment to the Depositary of the fees of
the Depositary as provided in Section 5.9.

          The Depositary, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of a Receipt or Receipts for the purpose of
effecting a split-up or combination of such Receipt or Receipts, execute and
deliver a new Receipt or Receipts for any authorized number of American
Depositary Shares requested, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered.

          The Depositary may, after Consultation with the Issuer, appoint one or
more co-transfer agents for the purpose of effecting transfers, combinations and
split-ups of Receipts at designated transfer offices on behalf of the
Depositary. Each co-transfer agent appointed under this Section 2.4 shall give
notice in writing to the Issuer and the Depositary accepting such appointment
and agreeing to be bound by the applicable terms of this Deposit Agreement. In
carrying out its functions, a co-transfer agent may require evidence of
authority and compliance with applicable laws and other requirements by Owners
or persons entitled to Receipts and will be entitled to protection and indemnity
to the same extent as the Depositary.

     SECTION 2.5    Surrender of Receipts and Withdrawal of Shares.

          Upon surrender at the Corporate Trust Office of the Depositary of a
Receipt for the purpose of withdrawal of the Deposited Securities represented by
the American Depositary Shares evidenced by such Receipt, and upon payment of
the fee of the Depositary for the surrender of Receipts as provided in Section
5.9 and payment of all taxes and governmental charges payable in connection with
such surrender and withdrawal of the Deposited Securities, and subject to the
terms and conditions of this Deposit Agreement, the Owner of such Receipt shall
be entitled to delivery, to him or upon his order, of the amount of Deposited
Securities at the time represented by the American Depositary Shares evidenced
by such Receipt. Delivery of such Deposited Securities may be made by the
delivery of (a) certificates in the name of such Owner or as ordered by him or
by certificates properly endorsed or accompanied by a proper instrument or
instruments of transfer to such Owner or as ordered by him and (b) any other
securities, property and cash to which such Owner is then entitled in respect of
such Receipts to such Owner or as ordered by him. Such delivery shall be made,
as hereinafter provided, without unreasonable delay.

          A Receipt surrendered for such purposes may be required by the
Depositary to be properly endorsed in blank or accompanied by a proper
instrument or instruments of transfer in blank, and if the Depositary so
requires, the Owner thereof shall execute and deliver to the Depositary a
written order directing the Depositary to cause the

<PAGE>

Deposited Securities being withdrawn to be delivered to or upon the written
order of a person or persons designated in such order. Thereupon the Depositary
shall direct the Custodian to deliver at the London, England office of the
Custodian, subject to Sections 2.6, 3.1 and 3.2 and to the other terms and
conditions of this Deposit Agreement, to or upon the written order of the person
or persons designated in the order delivered to the Depositary as above
provided, the amount of Deposited Securities represented by the American
Depositary Shares evidenced by such Receipt, except that the Depositary may make
delivery to such person or persons at the Corporate Trust Office of the
Depositary of any dividends or distributions with respect to the Deposited
Securities represented by the American Depositary Shares evidenced by such
Receipt, or of any proceeds of sale of any dividends, distributions or rights,
which may at the time be held by the Depositary.

          At the request, risk and expense of any Owner so surrendering a
Receipt, and for the account of such Owner, the Depositary shall direct the
Custodian to forward any cash or other property (other than rights) comprising,
and forward a certificate or certificates and other proper documents of title
for, the Deposited Securities represented by the American Depositary Shares
evidenced by such Receipt to the Depositary for delivery at the Corporate Trust
Office of the Depositary. Such direction shall be given by letter or, at the
request, risk and expense of such Owner, by cable, telex or facsimile
transmission.

     SECTION 2.6    Limitations on Execution and Delivery, Transfer and
Surrender of Receipts.

          As a condition precedent to the execution and delivery, registration
of transfer, split-up, combination or surrender of any Receipt or withdrawal of
any Deposited Securities, the Depositary, Custodian or Registrar may require
payment from the depositor of Shares or the presentor of the Receipt of a sum
sufficient to reimburse it for any tax or other governmental charge and any
stock transfer or registration fee with respect thereto (including any such tax
or charge or fee with respect to the Shares being deposited or withdrawn) and
payment of any applicable fees as herein provided, may require the production of
proof satisfactory to it as to the identity and genuineness of any signature and
may also require compliance with any regulations the Depositary may establish
consistent with the provisions of this Deposit Agreement, including, without
limitation, this Section 2.6.

          The delivery of Receipts against deposits of Shares generally or
against deposits of particular Shares may be suspended, or the transfer of
Receipts in particular instances may be refused, or the registration of transfer
of outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary or the Issuer or the Foreign Registrar, if
applicable, are closed, or if any such action is deemed necessary or advisable
by the Depositary or the Issuer at any time or from time to time because of any
requirement of law or of any government or governmental body or

<PAGE>

commission, or under any provision of this Deposit Agreement, or for any other
reason, subject to the provisions of Section 7.7 hereof. Notwithstanding any
other provision of this Deposit Agreement or the Receipts, the surrender of
outstanding Receipts and withdrawal of Deposited Securities may not be suspended
subject only to (i) temporary delays caused by closing the transfer books of the
Depositary or the Issuer or the deposit of Shares in connection with voting at a
shareholders' meeting, or the payment of dividends, (ii) the payment of fees,
taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or
governmental regulations relating to the Receipts or to the withdrawal of the
Deposited Securities. Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under this Deposit Agreement any Shares
required to be registered under the provisions of the Securities Act of 1933,
unless a registration statement is in effect as to such Shares.

     SECTION 2.7    Mutilated, Destroyed, Lost or Stolen Receipts.

          In case any Receipt shall be mutilated, destroyed, lost or stolen, the
Depositary shall execute and deliver a new Receipt of like tenor in exchange and
substitution for such mutilated Receipt upon cancellation thereof, or in lieu of
and in substitution for such destroyed, lost or stolen Receipt. Before the
Depositary shall execute and deliver a new Receipt in substitution for a
destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with
the Depositary (i) a request for such execution and delivery before the
Depositary has notice that the Receipt has been acquired by a bona fide
purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other
reasonable requirements imposed by the Depositary.

     SECTION 2.8    Cancellation and Destruction of Surrendered Receipts.

          All Receipts surrendered to the Depositary shall be cancelled by the
Depositary. The Depositary is authorized to destroy Receipts so cancelled.

     SECTION 2.9    Pre-Release of Receipts.

          The Depositary may issue Receipts against the delivery by the Issuer
(or any agent of the Issuer recording Share ownership) of rights to receive
Shares from the Issuer (or any such agent). No such issue of Receipts will be
deemed a "Pre-Release" that is subject to the restrictions of the following
paragraph.

          Unless requested in writing by the Issuer to cease doing so, the
Depositary may, notwithstanding Section 2.3 hereof, execute and deliver Receipts
prior to the receipt of shares pursuant to Section 2.2 ("Pre-Release"). The
Depositary may, pursuant to Section 2.5, deliver Shares upon the receipt and
cancellation of Receipts which have been Pre-Released, whether or not such
cancellation is prior to the termination of such Pre-Release or the Depositary
knows that such Receipt has been Pre-Released. The Depositary may receive
Receipts in lieu of Shares in satisfaction of a Pre-Release. Each

<PAGE>

Pre-Release will be (a) preceded or accompanied by a written representation and
agreement from the person to whom Receipts are to be delivered (the
"Pre-Releasee") that the Pre-Releasee, or its customer, (i) owns the Shares or
Receipts to be remitted, as the case may be, (ii) assigns all beneficial rights,
title and interest in such Shares or Receipts, as the case may be, to the
Depositary in its capacity as such and for the benefit of the Owners, and (iii)
will not take any action with respect to such Shares or Receipts, as the case
may be, that is inconsistent with the transfer of beneficial ownership
(including, without the consent of the Depositary, disposing of such Shares or
Receipts, as the case may be), other than in satisfaction of such Pre-Release,
(b) at all times fully collateralized with cash, U.S. government securities or
such other collateral as the Depositary determines, in good faith, will provide
substantially similar liquidity and security, (c) terminable by the Depositary
on not more than five (5) business days notice, and (d) subject to such further
indemnities and credit regulations as the Depositary deems appropriate. The
number of Shares not deposited but represented by American Depositary Shares
outstanding at any time as a result of Pre-Releases will not normally exceed
thirty percent (30%) of the Shares deposited hereunder; provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems reasonably appropriate, and may, with the prior written consent of the
Issuer, change such limit for purposes of general application. The Depositary
will also set Dollar limits with respect to Pre-Release transactions to be
entered into hereunder with any particular Pre-Releasee on a case-by-case basis
as the Depositary deems appropriate. For purposes of enabling the Depositary to
fulfill its obligations to the Owners under the Deposit Agreement, the
collateral referred to in clause (b) above shall be held by the Depositary as
security for the performance of the Pre-Releasee's obligations to the Depositary
in connection with a Pre-Release transaction, including the Pre-Releasee's
obligation to deliver Shares or Receipts upon termination of a Pre-Release
transaction (and shall not, for the avoidance of doubt, constitute Deposited
Securities hereunder).

          The Depositary may retain for its own account any compensation
received by it in connection with the foregoing.

     SECTION 2.10   Maintenance of Records.

          The Depositary agrees to maintain records of all Receipts surrendered
and Deposited Securities withdrawn under Section 2.5, substitute Receipts
delivered under Section 2.7, and cancelled or destroyed Receipts under Section
2.8, in keeping with the procedures ordinarily followed by stock transfer agents
located in The City of New York or as required by applicable law, rule or
regulation.

<PAGE>

ARTICLE 3.     CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS.

     SECTION 3.1    Filing Proofs, Certificates and Other Information.

          Any person presenting Shares for deposit or any Owner of a Receipt may
be required from time to time to file with the Depositary or the Custodian such
proof of citizenship or residence, exchange control approval, proof of the
identity of any person legally or beneficially interested in the Receipt and the
nature of such interest or such information relating to the registration on the
books of the Issuer or the Foreign Registrar, if applicable, to execute such
certificates and to make such representations and warranties, as the Depositary
or the Issuer may deem necessary or proper. The Depositary may withhold the
delivery or registration of transfer of any Receipt or the distribution of any
dividend or sale or distribution of rights or of the proceeds thereof or the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed or such representations and warranties
made. Upon the request of the Issuer, the Depositary shall provide the Issuer
with copies of all such certificates and such written representations and
warranties provided to the Depositary under this Section 3.1. Each Owner agrees
to provide any information requested by the Issuer or the Depositary pursuant to
this paragraph.

     SECTION 3.2    Liability of Owner for Taxes.

          If any tax or other governmental charge shall become payable with
respect to any Receipt or any Deposited Securities represented by any Receipt,
such tax or other governmental charge shall be payable by the Owner of such
Receipt to the Depositary. The Depositary may refuse to effect any transfer of
such Receipt or any withdrawal of Deposited Securities represented by American
Depositary Shares evidenced by such Receipt until such payment is made, and may
withhold any dividends or other distributions, or may sell for the account of
the Owner thereof any part or all of the Deposited Securities represented by the
American Depositary Shares evidenced by such Receipt, and may apply such
dividends or other distributions or the proceeds of any such sale in payment of
such tax or other governmental charge and the Owner of such Receipt shall remain
liable for any deficiency.

     SECTION 3.3    Warranties on Deposit of Shares.

          Every person depositing Shares under this Deposit Agreement shall be
deemed thereby to represent and warrant that such Shares and each certificate
therefor are validly issued, fully paid, nonassessable and free of any
pre-emptive rights of the holders of outstanding Shares and that the person
making such deposit is duly authorized to do so. Every such person shall also be
deemed to represent that the deposit of such Shares or sale of Receipts
evidencing American Depositary Shares representing such Shares by that person is
not restricted under the Securities Act of 1933. Such representations and
warranties shall survive the deposit of such Shares and issuance of Receipts.

<PAGE>

     SECTION 3.4    Disclosure of Interests.

          The Issuer may from time to time request Owners to provide information
as to the capacity in which such Owners own or owned Receipts and regarding the
identity of any other persons then or previously interested in such Receipts and
the nature of such interest and various other matters. Each Owner agrees to
provide any information requested by the Issuer or the Depositary pursuant to
this Section 3.4. The Depositary agrees to comply with reasonable written
instructions received from the Issuer requesting that the Depositary forward any
such requests to the Owners and to forward to the Issuer any such responses to
such requests received by the Depositary.

     SECTION 3.5    Ownership Restrictions.

          Notwithstanding any other provision of this Deposit Agreement, each
Owner and Beneficial Owner agrees to be bound by and subject to the By-laws of
the Issuer and to any restrictions on Share ownership or transferability under
applicable local law (to the same extent as if such American Depositary Shares
evidenced by such Receipt were the Shares evidenced by such Receipt, provided,
however, that such provisions shall apply to such persons only to the extent
feasible).

          In addition, Owners and Beneficial Owners are subject to regulations
under the Securities Exchange Act of 1934, pursuant to which, inter alia,
acquisition or sale of American Depositary Shares representing Shares in excess
of prescribed limits must be notified to the Commission and to any securities
exchange on which the American Depositary Shares are listed.

ARTICLE 4.     THE DEPOSITED SECURITIES.

     SECTION 4.1    Cash Distributions.

          Whenever the Depositary shall receive any cash dividend or other cash
distribution on any Deposited Securities, the Depositary shall, subject to the
provisions of Section 4.5, convert such dividend or distribution into Dollars as
promptly as practicable and shall promptly distribute the amount thus received
(net of the fees of the Depositary as provided in Section 5.9 hereof, if
applicable) to the Owners entitled thereto, in proportion to the number of
American Depositary Shares representing such Deposited Securities held by such
Owners respectively without regard to any distinctions among holders on account
of exchange restrictions or the date of deliver of any Receipt or Receipts;
provided, however, that in the event that the Issuer or the Depositary shall be
required to withhold and does withhold from such cash dividend or such other
cash distribution an amount on account of taxes, or other governmental charges
the amount distributed to the Owner of the Receipts evidencing American
Depositary Shares representing such Deposited Securities shall be reduced
accordingly. The Depositary shall distribute only such amount, however, as can
be distributed without attributing to

<PAGE>

any Owner a fraction of one cent. Any such fractional amounts shall be rounded
to the nearest whole cent and so distributed to Owners entitled thereto. The
Issuer or its agent will remit to the appropriate governmental agency in the
United Kingdom all amounts withheld and owing to such agency. The Depositary
will forward to the Issuer or its agent such information from its records as the
Issuer may reasonably request to enable the Issuer or its agent to file
necessary reports with governmental agencies, and the Depositary or the Issuer
or its agent may file any such reports necessary to obtain benefits under the
applicable tax treaties, if any, for the Owners of Receipts.

          The beneficial interest in a common access share, which is included
with each Share, enables holders of Shares to receive dividends from S&N (which
is tax resident in the United Kingdom) rather than from the Issuer (which is tax
resident in Switzerland) in respect of their Shares. All Shares represented by
American Depositary Shares will be treated by the Issuer as having elected to
receive dividends from S&N, rather than the Issuer, which election cannot be
changed by Owners.

     SECTION 4.2    Distributions Other Than Cash, Shares or Rights.

          Subject to the provisions of Section 4.11 and Section 5.9, whenever
the Depositary shall receive any distribution other than a distribution
described in Sections 4.1, 4.3 or 4.4, the Depositary shall cause the securities
or property received by it to be distributed to the Owners entitled thereto, in
proportion to the number of American Depositary Shares representing such
Deposited Securities held by them respectively, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners entitled thereto,
or if for any other reason (including, but not limited to, any requirement that
the Issuer or the Depositary withhold an amount on account of taxes or other
governmental charges or that such securities must be registered under the
Securities Act of 1933 in order to be distributed to Owners or holders) the
Depositary deems such distribution not to be feasible, the Depositary may adopt,
after Consultation with the Issuer when reasonably practicable, such method as
it may deem equitable and practicable for the purpose of effecting such
distribution, including, but not limited to, the public or private sale of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale (net of the fees of the Depositary as provided in Section 5.9)
shall be distributed by the Depositary to the Owners entitled thereto as in the
case of a distribution received in cash.

     SECTION 4.3    Distributions in Shares.

          If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Shares, the Depositary may, and shall if
the Issuer shall so request, distribute to the Owners of outstanding Receipts
entitled thereto, in proportion to the

<PAGE>

number of American Depositary Shares representing such Deposited Securities held
by them respectively, additional Receipts evidencing an aggregate number of
American Depositary Shares representing the amount of Shares received as such
dividend or free distribution, subject to the terms and conditions of the
Deposit Agreement with respect to the deposit of Shares and the issuance of
American Depositary Shares evidenced by Receipts, including the withholding of
any tax or other governmental charge as provided in Section 4.11 and the payment
of fees of the Depositary as provided in Section 5.9. In lieu of delivering
Receipts for fractional American Depositary Shares in any such case, the
Depositary shall sell the amount of Shares represented by the aggregate of such
fractions and distribute the net proceeds, all in the manner and subject to the
conditions described in Section 4.1. If additional Receipts are not so
distributed, each American Depositary Share shall thenceforth also represent the
additional Shares distributed upon the Deposited Securities represented thereby.

     SECTION 4.4    Rights.

          In the event that the Issuer shall offer or cause to be offered to the
holders of any Deposited Securities any rights to subscribe for additional
Shares or any rights of any other nature, the Depositary, after Consultation
with the Issuer, shall have discretion as to the procedure to be followed in
making such rights available to any Owners or in disposing of such rights on
behalf of any Owners and making the net proceeds available to such Owners or, if
by the terms of such rights offering or for any other reason, the Depositary may
not either make such rights available to any Owners or dispose of such rights
and make the net proceeds available to such Owners, then the Depositary shall
allow the rights to lapse. If at the time of the offering of any rights the
Depositary determines in its discretion, after Consultation with the Issuer,
that it is lawful and feasible to make such rights available to all Owners or to
certain Owners but not to other Owners, the Depositary may distribute to any
Owner to whom it determines the distribution to be lawful and feasible, in
proportion to the number of American Depositary Shares held by such Owner,
warrants or other instruments therefor in such form as it deems appropriate.

          In circumstances in which rights would otherwise not be distributed,
if an Owner of Receipts requests the distribution of warrants or other
instruments in order to exercise the rights allocable to the American Depositary
Shares of such Owner hereunder, the Depositary will make such rights available
to such Owner upon written notice from the Issuer to the Depositary that (a) the
Issuer has elected in its sole discretion to permit such rights to be exercised
and (b) such Owner has executed such documents as the Issuer has determined in
its sole discretion are reasonably required under applicable law.

          If the Depositary has distributed warrants or other instruments for
rights to all or certain Owners, then upon instruction from such an Owner
pursuant to such warrants or other instruments to the Depositary from such Owner
to exercise such rights,

<PAGE>

upon payment by such Owner to the Depositary for the account of such Owner of an
amount equal to the purchase price of the Shares to be received upon the
exercise of the rights, and upon payment of the fees of the Depositary and any
other charges as set forth in such warrants or other instruments, the Depositary
shall, on behalf of such Owner, exercise the rights and purchase the Shares, and
the Issuer shall cause the Shares so purchased to be delivered to the Depositary
on behalf of such Owner. As agent for such Owner, the Depositary will cause the
Shares so purchased to be deposited pursuant to Section 2.2 of this Deposit
Agreement, and shall, pursuant to Section 2.3 of this Deposit Agreement, execute
and deliver Receipts to such Owner. In the case of a distribution pursuant to
the second paragraph of this section, such Receipts shall be legended in
accordance with applicable U.S. laws, and shall be subject to the appropriate
restrictions on sale, deposit, cancellation, and transfer under such laws.

          If the Depositary determines in its discretion, after Consultation
with the Issuer, that it is not lawful and feasible to make such rights
available to all or certain Owners, it may sell the rights, warrants or other
instruments in proportion to the number of American Depositary Shares held by
the Owners to whom it has determined it may not lawfully or feasibly make such
rights available, and allocate the net proceeds of such sales (net of the fees
of the Depositary as provided in Section 5.9 and all taxes and governmental
charges payable in connection with such rights and subject to the terms and
conditions of this Deposit Agreement) for the account of such Owners otherwise
entitled to such rights, warrants or other instruments, upon an averaged or
other practical basis without regard to any distinctions among such Owners
because of exchange restrictions or the date of delivery of any Receipt or
otherwise.

          The Depositary will not offer rights to Owners unless both the rights
and the securities to which such rights relate are either exempt from
registration under the Securities Act of 1933 with respect to a distribution to
Owners or are registered under the provisions of such Act. If an Owner of
Receipts requests distribution of warrants or other instruments, notwithstanding
that there has been no such registration under such Act, the Depositary shall
not effect such distribution unless it has received an opinion from recognized
counsel in the United States for the Issuer upon which the Depositary may rely
that such distribution to such Owner is exempt from such registration.

          The Depositary shall not be responsible for any failure to determine
that it may be lawful or feasible to make such rights available to Owners in
general or any Owner in particular.

          The Issuer shall be under no obligation to file any registration
statement under the Securities Act of 1933 to make available to Owners any
additional Shares, rights or other Distributions.

<PAGE>

     SECTION 4.5    Conversion of Foreign Currency.

          Subject to any restriction imposed by the laws of the United Kingdom,
regulations or applicable permits issued by any governmental body, whenever the
Depositary shall receive foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into Dollars and the resulting Dollars transferred to the United States,
the Depositary shall convert or cause to be converted as promptly as
practicable, by sale or in any other manner that it may determine, such foreign
currency into Dollars, and such Dollars shall be distributed to the Owners
entitled thereto or, if the Depositary shall have distributed any warrants or
other instruments which entitle the holders thereof to such Dollars, then to the
holders of such warrants and/or instruments upon surrender thereof for
cancellation in whole or in part depending upon the terms of such warrants or
other instruments. Such distribution shall be made in proportion to the number
of American Depositary Shares representing Deposited Securities held
respectively by such Owners entitling them to such Dollars and may be made upon
an averaged or other practicable basis without regard to any distinctions among
Owners on account of exchange restrictions, the date of delivery of any Receipt
or otherwise and shall be net of any expenses of conversion into Dollars
incurred by the Depositary as provided in Section 5.9.

          If such conversion or distribution can be effected only with the
approval or license of any government or agency thereof, the Depositary shall
file such application for approval or license, if any, as it may deem desirable.

          If at any time the Depositary shall determine that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into Dollars transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Depositary is not obtainable, or
if any such approval or license is not obtained within a reasonable period as
determined by the Depositary, the Depositary may, after Consultation with the
Issuer, distribute the foreign currency (or an appropriate document evidencing
the right to receive such foreign currency) received by the Depositary to, or in
its discretion may hold such foreign currency uninvested and without liability
for interest thereon for the respective accounts of, the Owners entitled to
receive the same.

          If any such conversion of foreign currency, in whole or in part,
cannot be effected for distribution to some of the Owners entitled thereto, the
Depositary may in its discretion make such conversion and distribution in
Dollars to the extent permissible to the Owners entitled thereto and may
distribute the balance of the foreign currency received by the Depositary to, or
hold such balance uninvested and without liability for interest thereon for the
respective accounts of, the Owners not entitled to receive Dollars.

<PAGE>

     SECTION 4.6    Fixing of Record Date.

          Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or whenever rights
shall be issued with respect to the Deposited Securities, or whenever for any
reason the Depositary causes a change in the number of Shares that are
represented by each American Depositary Share, or whenever the Depositary shall
receive notice of any meeting of holders of Shares or other Deposited
Securities, the Depositary shall fix a record date, after Consultation with the
Issuer if such record date is different from the record date applicable to the
Deposited Securities (a) for the determination of the Owners who shall be (i)
entitled to receive such dividend, distribution or rights or the net proceeds of
the sale thereof or (ii) entitled to give instructions for the exercise of
voting rights at any such meeting, or (b) on or after which each American
Depositary Share will represent the changed number of Shares. Subject to the
provisions of Sections 4.1 through 4.5 and to the other terms and conditions of
this Deposit Agreement, the Owners on such record date shall be entitled, as the
case may be, to receive the amount distributable by the Depositary with respect
to such dividend or other distribution or such rights or the net proceeds of
sale thereof in proportion to the number of American Depositary Shares held by
them respectively and to give voting instructions, to exercise the rights of
Owners hereunder with respect to such changed number of Shares and to act in
respect of any other such matter. Any such record date fixed by the Depositary
will, to the extent practicable, be the same as the record date fixed by the
Issuer with respect to such dividend, distribution or meeting.

     SECTION 4.7    Voting of Deposited Securities.

          Upon receipt of notice of any meeting of holders of Shares or other
Deposited Securities, if requested in writing by the Issuer the Depositary
shall, as soon as practicable thereafter, mail to the Owners a notice, the form
of which notice shall be subject to the reasonable discretion of the Depositary,
which shall contain (a) such information as is contained in such notice of
meeting, received by the Depositary from the Issuer, (b) a statement that the
Owners as of the close of business on a specified record date will be entitled,
subject to any applicable provision of law in the United Kingdom and of the
Articles of Association of the Issuer and the provisions of the Deposited
Securities, to instruct the Depositary as to the exercise of the voting rights,
if any, pertaining to the amount of Shares or other Deposited Securities
represented by their respective American Depositary Shares, and (c) a statement
as to the manner in which such instructions may be given, including, when
applicable, an express indication that instructions may be given (or, if
applicable, deemed given in accordance with the second paragraph of this Section
4.7 if no instruction is received) to the Depositary to give a discretionary
proxy to a person designated by the Issuer. Upon the written request of an Owner
on such record date, received on or before the date established by the
Depositary for such purpose, the Depositary shall endeavor, insofar as
practicable and permitted

<PAGE>

under applicable laws and the provisions of the Articles of Association of the
Issuer and the provisions of the Deposited Securities, to vote or cause to be
voted the amount of Shares or other Deposited Securities represented by the
American Depositary Shares evidenced by such Receipt in accordance with any
non-discretionary instructions set forth in such request, including their
instruction to give a discretionary proxy to a person designated by the Issuer.
The Depositary shall not, and the Depositary shall ensure that each Custodian or
any of its nominees shall not, exercise any voting discretion over any Deposited
Securities.

          If after complying with the procedures set forth in this Section the
Depositary does not receive instructions from the Owner of a Receipt on or
before the date established by the Depositary for such purpose (the "Instruction
Date"), the Depositary, subject to applicable law, shall give a discretionary
proxy for the Shares evidenced by such Receipt to a person designated by the
Issuer.

          There can be no assurance that Owners generally or any Owner in
particular will receive the notice described in the preceding paragraph
sufficiently prior to the Instruction Date to ensure that the Depositary will
vote the Shares or Deposited Securities in accordance with the provisions set
forth in the preceding paragraph.

          Subject to the rules of any securities exchange on which the Deposited
Securities are listed the Depositary shall use its reasonable efforts to deliver
to the extent practicable, at least two business days prior to the date of such
meeting, to the Issuer voting instructions received (or deemed received) from
Owners.

     SECTION 4.8    Changes Affecting Deposited Securities.

          In circumstances where the provisions of Section 4.3 do not apply,
upon any change in nominal value, change in par value, split-up, consolidation
or any other reclassification of Deposited Securities, or upon any
recapitalization, reorganization, merger or consolidation or sale of assets
affecting the Issuer or to which it is a party, any securities which shall be
received by the Depositary or a Custodian in exchange for or in conversion of or
in respect of Deposited Securities, shall be treated as new Deposited Securities
under this Deposit Agreement, and American Depositary Shares shall thenceforth
represent the new Deposited Securities so received in exchange or conversion,
unless additional Receipts are delivered pursuant to the following sentence. In
any such case the Depositary may, after Consultation with the Issuer, and shall,
if the Issuer shall so request, execute and deliver additional Receipts as in
the case of a dividend in Shares, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts specifically describing such new
Deposited Securities.

<PAGE>

     SECTION 4.9    Reports.

          The Depositary shall make available for inspection by Owners at its
Corporate Trust Office any reports and communications, including any proxy
soliciting material, received from the Issuer which are both (a) received by the
Depositary or the Custodian or the nominee of either as the holder of the
Deposited Securities and (b) made generally available to the holders of such
Deposited Securities by the Issuer. The Depositary shall also, upon written
request, send to the Owners copies of such reports furnished by the Issuer
pursuant to Section 5.6. Any such reports and communications, including any such
proxy soliciting material, furnished to the Depositary by the Issuer shall be
furnished in English.

     SECTION 4.10   Lists of Owners.

          Promptly after each request by the Issuer and, if requested by the
Issuer, once every month, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of American Depositary Shares
by all persons in whose names Receipts are registered on the books of the
Depositary and the number of Pre-Releases outstanding as a percentage of the
Shares deposited hereunder.

     SECTION 4.11   Withholding.

          In the event that the Depositary determines that any distribution in
property (including Shares and rights to subscribe therefor) is subject to any
tax or other governmental charge which the Depositary is obligated to withhold,
the Depositary may by public or private sale dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner as the Depositary deems necessary and practicable to pay any such
taxes or charges, and the Depositary shall distribute the net proceeds of any
such sale after deduction of such taxes or charges to the Owners entitled
thereto in proportion to the number of American Depositary Shares held by them
respectively, and the Depositary shall distribute any unsold balance of such
property in accordance with the provisions of this Deposit Agreement. The Issuer
or its agent shall remit to appropriate governmental authorities and agencies in
the United Kingdom all amounts, if any, withheld and owing to such authorities
and agencies by the Issuer. The Depositary or its agent shall remit to
appropriate governmental authorities and agencies in the United States all
amounts, if any, withheld and owing to such authorities and agencies by the
Depositary.

          The Depositary shall forward to the Issuer or its agent such
information from its records as the Issuer may reasonably request to enable the
Issuer or its agent to file necessary reports with governmental agencies. The
Depositary shall use reasonable efforts to make and maintain arrangements
enabling Owners who are citizens or residents of the United States to receive
any tax credits or other benefits (pursuant to treaty or otherwise) relating to
dividend payments on the American Depositary Shares.

<PAGE>

ARTICLE 5.     THE DEPOSITARY, THE CUSTODIANS AND THE ISSUER.

     SECTION 5.1    Maintenance of Office and Transfer Books by the Depositary.

          Until termination of this Deposit Agreement in accordance with its
terms, the Depositary shall maintain in the Borough of Manhattan, The City of
New York, facilities for the execution and delivery, registration, registration
of transfers and surrender of Receipts in accordance with the provisions of this
Deposit Agreement.

          The Depositary shall keep books for the registration of Receipts and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Owners, provided that such inspection shall not be for the purpose of
communicating with Owners in the interest of a business or object other than the
business of the Issuer or a matter related to this Deposit Agreement or the
Receipts.

          The Depositary may close the transfer books, at any time or from time
to time, when deemed expedient by it in connection with the performance of its
duties hereunder or at the written request of the Issuer.

          If any Receipts or the American Depositary Shares evidenced thereby
are listed on one or more stock exchanges in the United States, after
Consultation with the Issuer, the Depositary shall act as Registrar or appoint a
Registrar or one or more co-registrars for registry of such Receipts in
accordance with any requirements of such exchange or exchanges. Such Registrar
or co-registrars shall be removed only after Consultation with the Issuer. Each
Registrar and co-registrar appointed under this Section 5.1 shall give notice in
writing to the Issuer and the Depositary accepting such appointment and agreeing
to be bound by the applicable terms of this Deposit Agreement.

          The Issuer shall have the right, at all reasonable times, to inspect
transfer and registration records of the Depositary, the Registrar and any
co-transfer agents or co-registrars and to require such parties to supply copies
of such portions of their records as the Issuer may request.

     SECTION 5.2    Prevention or Delay in Performance by the Depositary or the
Issuer.

          Neither the Depositary nor the Issuer nor any of their directors,
employees, agents or affiliates shall incur any liability to any Owner or holder
of any Receipt, if by reason of any provision of any present or future law or
regulation of the United States, the United Kingdom or any other country, or of
any governmental or regulatory authority or stock exchange, or by reason of any
provision, present or future, of the Articles of Association of the Issuer, or
by reason of any provision of any securities issued or distributed by the
Issuer, or any offering or distribution thereof, or by reason of any act of God
or war or other circumstances beyond its control, the Depositary or the Issuer
or any

<PAGE>

of their directors, employees, agents or affiliates shall be prevented, delayed
or forbidden from, or be subject to any civil or criminal penalty on account of,
doing or performing any act or thing which by the terms of this Deposit
Agreement it is provided shall be done or performed; nor shall the Depositary or
the Issuer incur any liability to any Owner or holder of any Receipt by reason
of any non-performance or delay, caused as aforesaid, in the performance of any
act or thing which by the terms of this Deposit Agreement it is provided shall
or may be done or performed, or by reason of any exercise of, or failure to
exercise, any discretion provided for in this Deposit Agreement. Where, by the
terms of a distribution pursuant to Sections 4.1, 4.2, or 4.3 of the Deposit
Agreement, or an offering or distribution pursuant to Section 4.4 of the Deposit
Agreement, or for any other reason, such distribution or offering may not be
made available to Owners, and the Depositary may not dispose of such
distribution or offering on behalf of such Owners and make the net proceeds
available to such Owners, then the Depositary shall not make such distribution
or offering, and shall allow any rights, if applicable, to lapse.

     SECTION 5.3    Obligations of the Depositary, the Custodian and the Issuer.

          The Issuer assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to any Owner or holder of any Receipt,
except that it agrees to perform its obligations specifically set forth in this
Deposit Agreement without negligence and to act in good faith in the performance
of such duties.

          The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to any Owner or holder of any Receipt
(including, without limitation, liability with respect to the validity or worth
of the Deposited Securities), except that it agrees to perform its obligations
specifically set forth in this Deposit Agreement without negligence and to act
in good faith in the performance of such duties.

          Neither the Depositary nor the Issuer shall be under any obligation to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Security or in respect of the Receipts, which in its opinion
may involve it in expense or liability, unless indemnity satisfactory to it
against all expense and liability shall be furnished as often as may be
required, and the Custodian shall not be under any obligation whatsoever with
respect to such proceedings, the responsibility of the Custodian being solely to
the Depositary.

          Neither the Depositary nor the Issuer shall be liable for any action
or nonaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Owner or any
other person believed by it in good faith to be competent to give such advice or
information including, but not limited to, any such action or nonaction based
upon any written notice, request,

<PAGE>

direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.

          The Depositary shall not be liable for any acts or omissions made by a
successor depositary whether in connection with a previous act or omission of
the Depositary or in connection with any matter arising wholly after the removal
or resignation of the Depositary, provided that in connection with the issue out
of which such potential liability arises the Depositary performed its
obligations without negligence or bad faith while it acted as Depositary.

          The Depositary shall not be responsible for any failure to carry out
any instructions to vote any of the Deposited Securities, or for the manner in
which any such vote is cast or the effect of any such vote, provided that any
such action or nonaction is in good faith.

          No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of this Deposit Agreement.

     SECTION 5.4    Resignation and Removal of the Depositary.

          The Depositary may at any time resign as Depositary hereunder by
written notice of its election to do so delivered to the Issuer, effective upon
the appointment of a successor depositary and such successor depositary's
acceptance of such appointment as hereinafter provided.

          The Depositary may at any time be removed by the Issuer by written
notice of such removal effective upon the appointment of a successor depositary
and such successor depositary's acceptance of such appointment as hereinafter
provided.

          In case at any time the Depositary acting hereunder shall resign or be
removed, the Issuer shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Issuer an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due it and on the written
request of the Issuer shall execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all right, title and interest in the Deposited
Securities to such successor, and shall deliver to such successor a list of the
Owners of all outstanding Receipts. Any such successor depositary shall promptly
mail notice of its appointment to the Owners.

<PAGE>

          Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.

     SECTION 5.5    The Custodians.

          The Depositary, after Consultation with the Issuer, may appoint from
time to time one or more agents, as permitted by United Kingdom law and any
other applicable laws or regulations, to act for it as Custodian hereunder. Any
such Custodian shall be subject at all times and in all respects to the
directions of the Depositary and shall be responsible solely to it. Any
Custodian may resign and be discharged from its duties hereunder by notice of
such resignation delivered to the Depositary at least 30 days prior to the date
on which such resignation is to become effective. If upon such resignation there
shall be no Custodian acting hereunder, the Depositary shall, promptly after
receiving such notice, and after Consultation with the Issuer, appoint a
substitute custodian or custodians, each of which shall thereafter be a
Custodian hereunder. Whenever the Depositary in its discretion determines that
it is in the best interest of the Owners to do so, it may appoint substitute or
additional custodian or custodians, which shall thereafter be one of the
Custodians hereunder. Upon demand of the Depositary any Custodian shall deliver
such of the Deposited Securities held by it as are requested of it to any other
Custodian or such substitute or additional custodian or custodians. Each such
substitute or additional custodian shall deliver to the Depositary and the
Issuer, forthwith upon its appointment, an acceptance of such appointment
satisfactory in form and substance to the Depositary and the Issuer.

          Upon the appointment of any successor depositary hereunder, each
Custodian then acting hereunder shall forthwith become, without any further act
or writing, the agent hereunder of such successor depositary and the appointment
of such successor depositary shall in no way impair the authority of each
Custodian hereunder; but the successor depositary so appointed shall,
nevertheless, on the written request of any Custodian, execute and deliver to
such Custodian all such instruments as may be proper to give to such Custodian
full and complete power and authority as agent hereunder of such successor
depositary.

     SECTION 5.6    Notices and Reports.

          On or before the first date on which the Issuer gives notice, by
publication or otherwise, of any meeting of holders of Shares or other Deposited
Securities, or of any adjourned meeting of such holders, or of the taking of any
action in respect of any cash or other distributions or the offering of any
rights, the Issuer agrees to transmit to the Depositary and the Custodian a copy
of the notice thereof in the form given or to be given to holders of Shares or
other Deposited Securities.

<PAGE>

          The Issuer will arrange for the translation into English and the
prompt transmittal by the Issuer to the Depositary and the Custodian of such
notices and any other reports and communications which are made generally
available by the Issuer to holders of its Shares. If requested in writing by the
Issuer, the Depositary will promptly arrange for the mailing, at the Issuer's
expense, of copies of such notices, reports and communications to all Owners.
The Issuer will timely provide the Depositary with the quantity of such notices,
reports, and communications, as requested by the Depositary from time to time,
in order for the Depositary to effect such mailings.

     SECTION 5.7    Distribution of Additional Shares, Rights, etc.

          The Issuer agrees that in the event of any issuance or distribution of
(1) additional Shares, (2) rights to subscribe for Shares, (3) securities
convertible into or exchangeable for Shares, or (4) rights to subscribe for any
such securities, (each a "Distribution") the Issuer will promptly furnish to the
Depositary a written opinion from U.S. counsel for the Issuer, which counsel
shall be reasonably satisfactory to the Depositary, stating whether or not the
Distribution requires a registration statement under the Securities Act of 1933
to be in effect prior to making such Distribution available to Owners entitled
thereto. If in the opinion of such counsel a registration statement under the
Securities Act of 1933 is required, such counsel shall furnish to the Depositary
a written opinion as to whether or not there is a registration statement in
effect which will cover such Distribution.

          In the event that such registration under the Securities Act of 1933
would be required in connection with any such Distribution, the Issuer shall
have no obligation to effect such registration.

          In the event of any issuance of additional securities, the Issuer
shall have no obligation to register such additional securities under the
Securities Act of 1933 and, to the extent the Issuer in its discretion deems it
necessary or advisable in order to avoid any requirement to register such
additional securities under the Securities Act of 1933, may prevent Owners in
the United States from purchasing any such additional securities (whether
pursuant to pre-emptive rights or otherwise) and direct the Depositary not to
accept any Shares for deposit for such period of time following the issuance of
such additional securities and to adopt such other specific measures as the
Issuer may reasonably request in writing.

          The Issuer agrees with the Depositary that neither the Issuer nor any
person (as such term is defined in the Securities Act of 1933) controlled by,
controlling or under common control with the Issuer will at any time deposit any
Shares, either originally issued or previously issued and reacquired by the
Issuer or any person under its control, unless a registration statement is in
effect as to such Shares under the Securities Act of 1933. The Depositary will
comply with the written instructions of the Issuer not to

<PAGE>

accept knowingly for deposit hereunder any Shares identified in such
instructions at such times and under such circumstances as may be specified in
such instructions in order to facilitate the Issuer's compliance with the
securities laws of the United States, the United Kingdom and any other
jurisdictions specified therein.

     SECTION 5.8    Indemnification.

          The Issuer agrees to indemnify the Depositary, its directors,
employees, agents and affiliates and any Custodian against, and hold each of
them harmless from, any liability or expense (including, but not limited to, the
reasonable fees and expenses of counsel) which may arise out of acts performed
or omitted, in accordance with the provisions of this Deposit Agreement and of
the Receipts, as the same may be amended, modified or supplemented from time to
time, (i) by either the Depositary or any Custodian or their respective
directors, employees, agents and affiliates, except for any liability or expense
arising out of the negligence of any of them or the failure of any of them to
act in good faith, or (ii) by the Issuer or any of its directors, employees,
agents and affiliates.

          The indemnities contained in the preceding paragraph shall not extend
to any liability or expense which arises solely and exclusively out of a
Pre-Release (as defined in Section 2.9) of a Receipt or Receipts in accordance
with Section 2.9 and which would not otherwise have arisen had such Receipt or
Receipts not been the subject of a Pre-Release pursuant to Section 2.9;
provided, however, that the indemnities provided in the preceding paragraph
shall apply to any such liability or expense (i) to the extent that such
liability or expense would have arisen had a Receipt or Receipts not be the
subject of a Pre-Release, or (ii) which may arise out of any misstatement or
alleged misstatement or omission or alleged omission in any registration
statement, proxy statement, prospectus (or placement memorandum), or preliminary
prospectus (or preliminary placement memorandum) relating to the offer or sale
of American Depositary Shares, except to the extent any such liability or
expense arises out of (i) information relating to the Depositary or any
Custodian (other than the Issuer), as applicable, furnished in writing and not
materially changed or altered by the Issuer expressly for use in any of the
foregoing documents, or, (ii) if such information is provided, the failure to
state a material fact necessary to make the information provided not misleading.

          The Depositary agrees to indemnify the Issuer, its directors,
employees, agents and affiliates against and hold each of them harmless from any
liability or expense (including, but not limited to, the reasonable fees and
expenses of counsel) which may arise out of acts performed or omitted by the
Depositary or any Custodian or their respective directors, employees, agents and
affiliates due to their negligence or failure to act in good faith.

<PAGE>

          If an action, proceeding (including, but not limited to, any
governmental investigation), claim or dispute (collectively, a "Proceeding") in
respect of which indemnity may be sought by either party is brought or asserted
against the other party, the party seeking indemnification (the "Indemnitee")
shall promptly (and in no event more than ten (10) days after receipt of notice
of such Proceeding) notify the party obligated to provide such indemnification
(the "Indemnitor") of such Proceeding. The failure of the Indemnitee to so
notify the Indemnitor shall not impair the Indemnitee's ability to seek
indemnification from the Indemnitor (but only for costs, expenses and
liabilities incurred after such notice) unless such failure adversely affects
the Indemnitor's ability to adequately oppose or defend such Proceeding. Upon
receipt of such notice from the Indemnitee, the Indemnitor shall be entitled to
participate in such Proceeding and, to the extent that it shall so desire and
provided no conflict of interest exists as specified in subparagraph (b) below
or there are no other defenses available to Indemnitee as specified in
subparagraph (d) below, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnitee (in which case all attorney's fees and expenses
shall be borne by the Indemnitor and the Indemnitor shall in good faith defend
the Indemnitee). The Indemnitee shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be borne by the Indemnitee unless (a) the
Indemnitor agrees in writing to pay such fees and expenses, (b) the Indemnitee
shall have reasonably and in good faith concluded that there is a conflict of
interest between the Indemnitor and the Indemnitee in the conduct of the defense
of such action, (c) the Indemnitor fails to assume, at least ten (10) days prior
to the date the first response or appearance is required to be made in such
Proceeding, the defense of such Proceeding with counsel reasonably satisfactory
to the Indemnitee or (d) there are legal defenses available to the Indemnitee
that are different from or are in addition to those available to the Indemnitor.
No compromise or settlement of such Proceeding may be effected by either party
without the other party's consent unless (i) there is no finding or admission of
any violation of law and no effect on any other claims that may be made against
such other party and (ii) the sole relief provided is monetary damages that are
paid in full by the party seeking the settlement. Neither party shall have any
liability with respect to any compromise or settlement effected without its
consent, which shall not be unreasonably withheld. The Indemnitor shall have no
obligation to indemnify and hold harmless the Indemnitee from any loss, expense
or liability incurred by the Indemnitee as a result of a default judgment
entered against the Indemnitee unless such judgment was entered after the
Indemnitor agreed, in writing, to assume the defense of such Proceeding.

     SECTION 5.9    Charges of Depositary.

          The Issuer agrees to pay certain fees, reasonable expenses and
out-of-pocket charges of the Depositary and those of any Registrar only in
accordance with agreements in writing entered into between the Depositary and
the Issuer from time to time. The Depositary shall present its statement for
such charges and expenses to the

<PAGE>

Issuer once every three months. The charges and expenses of the Custodian are
for the sole account of the Depositary.

          The following charges shall be incurred by any party depositing or
withdrawing Shares or by any party surrendering Receipts or to whom Receipts are
issued (including, without limitation, issuance pursuant to a stock dividend or
stock split declared by the Issuer or an exchange regarding the Receipts or
Deposited Securities or a distribution of Receipts pursuant to Section 4.3),
whichever applicable: (1) taxes and other governmental charges, (2) such
registration fees as may from time to time be in effect for the registration of
transfers of Shares generally on the Share register of the Issuer or Foreign
Registrar and applicable to transfers of Shares to the name of the Depositary or
its nominee or the Custodian or its nominee on the making of deposits or
withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses
as are expressly provided in this Deposit Agreement, (4) such expenses as are
incurred by the Depositary in the conversion of foreign currency pursuant to
Section 4.5 (5) a fee of $5.00 or less per 100 American Depositary Shares (or
portion thereof) for the execution and delivery of Receipts pursuant to Section
2.3, 4.3 or 4.4, and the surrender of Receipts pursuant to Section 2.5 or 6.2,
(6) a fee of $.02 or less per American Depositary Share (or portion thereof) for
any cash distribution made pursuant to the Deposit Agreement including, but not
limited to, Sections 4.1 through 4.4 hereof, except for distributions of cash
dividends, and (7) a fee for the distribution of proceeds of sales of securities
or rights pursuant to Section 4.2 or 4.4, respectively, such fee being (i) in an
amount equal to the fee for the issuance of American Depositary Shares referred
to above which would have been charged as a result of the deposit by Owners of
securities (for purposes of this clause (7) treating all such securities as if
they were Shares) or Shares received in exercise of rights distributed to them
pursuant to Section 4.2 or 4.4, respectively, but which securities or rights are
instead sold by the Depositary and the net proceeds distributed and (ii) payable
from such proceeds of sales of securities or rights.

          The Depositary, subject to Section 2.9 hereof, may own and deal in any
class of securities of the Issuer and its affiliates and in Receipts.

     SECTION 5.10   Retention of Depositary Documents.

          Except as otherwise explicitly provided herein, the Depositary is
authorized to destroy those documents, records, bills and other data compiled
during the term of this Deposit Agreement at the times permitted by the laws or
regulations governing the Depositary unless the Issuer requests that such papers
be retained for a different period or turned over to the Issuer or to a
successor depositary.

<PAGE>

     SECTION 5.11   Exclusivity.

          The Issuer agrees not to appoint any other depositary for issuance of
American Depositary Receipts so long as The Bank of New York is acting as
Depositary hereunder.

ARTICLE 6.     AMENDMENT AND TERMINATION.

     SECTION 6.1    Amendment.

          The form of the Receipts and any provision of this Deposit Agreement
may at any time and from time to time be amended by agreement between the Issuer
and the Depositary in any respect which they may deem necessary or desirable.
Any amendment which shall impose or increase any fee or charge (other than taxes
and other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall
otherwise prejudice any substantial existing right of Owners, shall, however,
not become effective as to outstanding Receipts until the expiration of a thirty
day period following notification pursuant to Section 7.5 hereof of any such
amendment to the Owners of outstanding Receipts. Every Owner at the time any
amendment becomes effective shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound by the Deposit Agreement
as amended thereby. In no event shall any amendment impair the right of the
Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby, except in order to comply with
mandatory provisions of applicable law.

     SECTION 6.2    Termination.

          The Depositary shall at any time at the direction of the Issuer
terminate this Deposit Agreement by mailing notice of such termination to the
Owners of all Receipts then outstanding at least 30 days prior to the date fixed
in such notice for such termination. The Depositary may likewise terminate this
Deposit Agreement by mailing notice of such termination to the Issuer and the
Owners of all Receipts then outstanding if at any time 90 days shall have
expired after the Depositary shall have delivered to the Issuer a written notice
of its election to resign and a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.4. On and after
the date of termination, the Owner of a Receipt will, upon (a) surrender of such
Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee
of the Depositary for the surrender of Receipts referred to in Section 2.5, and
(c) payment of any applicable taxes or governmental charges, be entitled to
delivery, to him or as ordered by him, of the amount of Deposited Securities
represented by the American Depositary Shares evidenced by such Receipt. If any
Receipts shall remain outstanding after the date of termination, the Depositary
thereafter shall discontinue the registration of transfers of Receipts, shall
suspend the distribution of dividends to the Owners thereof, and shall not

<PAGE>

give any further notices or perform any further acts under this Deposit
Agreement, except that the Depositary shall continue to collect dividends and
other distributions pertaining to Deposited Securities, shall sell property and
rights as provided in this Deposit Agreement, and shall continue to deliver
Deposited Securities, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of any rights or
other property, in exchange for Receipts surrendered to the Depositary (after
deducting, in each case, the fee of the Depositary for the surrender of a
Receipt, any expenses for the account of the Owner of such Receipt in accordance
with the terms and conditions of this Deposit Agreement, and any applicable
taxes or governmental charges). At any time after the expiration of one year
from the date of termination, the Depositary may sell the Deposited Securities
then held hereunder and may thereafter hold uninvested the net proceeds of any
such sale, together with any other cash then held by it hereunder, unsegregated
and without liability for interest, for the pro rata benefit of the Owners of
Receipts which have not theretofore been surrendered, such Owners thereupon
becoming general creditors of the Depositary with respect to such net proceeds.
After making such sale, the Depositary shall be discharged from all obligations
under this Deposit Agreement, except to account for such net proceeds and other
cash (after deducting, in each case, the fee of the Depositary for the surrender
of a Receipt, any expenses for the account of the Owner of such Receipt in
accordance with the terms and conditions of this Deposit Agreement, and any
applicable taxes or governmental charges). Upon the termination of this Deposit
Agreement, the Issuer shall be discharged from all obligations under this
Deposit Agreement except for its obligations to the Depositary under Sections
5.8 and 5.9 hereof. The obligations of the Depositary under Section 5.8 shall
survive the termination of this Deposit Agreement.

ARTICLE 7.     MISCELLANEOUS.

     SECTION 7.1    Counterparts.

          This Deposit Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of such counterparts shall
constitute one and the same instrument. Copies of this Deposit Agreement shall
be retained by the Depositary and filed with the Depositary and the Custodians
and shall be open to inspection by any holder or Owner of a Receipt at the
Corporate Trust Office of the Depositary and the principal corporate office of
the Custodian designated by the Custodian during business hours.

     SECTION 7.2    No Third Party Beneficiaries.

          This Deposit Agreement is for the exclusive benefit of the parties
hereto and shall not be deemed to give any legal or equitable right, remedy or
claim whatsoever to any other person.

<PAGE>

     SECTION 7.3    Severability.

          In case any one or more of the provisions contained in this Deposit
Agreement or in the Receipts should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.

     SECTION 7.4    Holders and Owners as Parties; Binding Effect.

          The holders and Owners of Receipts from time to time shall be parties
to this Deposit Agreement and shall be bound by all of the terms and conditions
hereof and of the Receipts by acceptance thereof.

     SECTION 7.5    Notices.

          Any and all notices to be given to the Issuer shall be deemed to have
been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to Smith & Nephew Group
plc, Heron House, 15 Adam Street, London WC2N 6LA, England, Attention: Company
Secretary; Tel: (011) 44 207 401 7646; Fax: (011) 44 207 960 2357, or any other
place to which the Issuer may have transferred its principal office.

          Any and all notices to be given to the Depositary shall be deemed to
have been duly given if in English and personally delivered or sent by mail or
cable, telex or facsimile transmission confirmed by letter, addressed to The
Bank of New York, 101 Barclay Street, New York, New York 10286, Attention:
American Depositary Receipt Administration, telephone number (212) 815-2206,
facsimile number (212) 571-3050 or any other place to which the Depositary may
have transferred its Corporate Trust Office.

          Any and all notices to be given to any Owner shall be deemed to have
been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to such Owner at the
address of such Owner as it appears on the transfer books for Receipts of the
Depositary, or, if such Owner shall have filed with the Depositary a written
request that notices intended for such Owner be mailed to some other address, at
the address designated in such request.

          Delivery of a notice sent by mail or cable, telex or facsimile
transmission shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a cable,
telex or facsimile transmission) is deposited, postage prepaid, in a post-office
letter box. The Depositary or the Issuer may, however, act upon any cable, telex
or facsimile transmission received by it, notwithstanding that such cable, telex
or facsimile transmission shall not subsequently be confirmed by letter as
aforesaid.

<PAGE>

     SECTION 7.6    Governing Law.

          This Deposit Agreement and the Receipts shall be interpreted and all
rights hereunder and thereunder and provisions hereof and thereof shall be
governed by the laws of the State of New York.

     SECTION 7.7    Compliance with U.S. Securities Laws.

          Notwithstanding anything in this Deposit Agreement to the contrary,
the Issuer and the Depositary each agrees that it will not exercise any rights
it has under this Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the U.S. securities laws,
including, but not limited to, Section I.A.(1) of the General Instructions to
the Form F-6 Registration Statement, as amended from time to time, under the
Securities Act of 1933.

     SECTION 7.8    Assignment.

          This Deposit Agreement may not be assigned by either the Issuer or the
Depositary.

     SECTION 7.9    Effective Date.

          The effective date of this Deposit Agreement, as amended and restated
as of ___________, 2003, shall be ____________, 2003 (the "Effective Date").

     SECTION 7.10   Smith & Nephew plc as a Party to the Deposit Agreement.

          Upon the Effective Date of this Deposit Agreement as provided in
Section 7.9, Smith & Nephew plc shall cease to be a party to this Deposit
Agreement.

<PAGE>

     IN WITNESS WHEREOF, SMITH & NEPHEW GROUP PLC, SMITH & NEPHEW PLC and THE
BANK OF NEW YORK have duly executed this amended and restated agreement as of
the day and year first set forth above and all Owners shall become parties
hereto in accordance with Section 6.1 and upon acceptance by them of Receipts
issued in accordance with the terms hereof.

                                            SMITH & NEPHEW GROUP PLC

                                            By: ___________________________
                                                Name:
                                                Title:

                                            SMITH & NEPHEW PLC

                                            By: ___________________________
                                                Name:
                                                Title:

                                            THE BANK OF NEW YORK,
                                              as Depositary

                                            By: ___________________________
                                                Name:
                                                Title:

<PAGE>

                         Exhibit A to Deposit Agreement

No.

                                       --------------------------
                                       AMERICAN DEPOSITARY SHARES
                                       (Each American Depositary Share
                                       represents ten (10) deposited Shares)

                              THE BANK OF NEW YORK
                           AMERICAN DEPOSITARY RECEIPT
                              FOR ORDINARY SHARES,
                         NOMINAL VALUE 12 1/2 PENCE EACH
          (INCLUDING A BENEFICIAL INTEREST IN A COMMON ACCESS SHARE OF
                              SMITH & NEPHEW PLC),
                                       OF
                            SMITH & NEPHEW GROUP PLC
               (INCORPORATED UNDER THE LAWS OF ENGLAND AND WALES)

     The Bank of New York as depositary (hereinafter called the "Depositary"),
hereby certifies that ________________________, or registered assigns IS THE
OWNER OF

                           AMERICAN DEPOSITARY SHARES

representing deposited ordinary shares, nominal value 12 1/2 pence each, of
Smith & Nephew Group plc (herein called "Shares"), incorporated under the laws
of England and Wales (herein called the "Issuer"), which Shares include a
beneficial interest in common access shares of Smith & Nephew plc (herein called
"S&N"), which are held for the benefit of the holders of Shares by the Smith &
Nephew Common Access Trust. At the date hereof, each American Depositary Share
represents ten (10) Shares which are either deposited or subject to deposit
under the deposit agreement at The Bank of New York's London office (herein
called the "Custodian"). The Depositary's Corporate Trust Office is located at a
different address than its principal executive office. Its Corporate Trust
Office is located at 101 Barclay Street, New York, N.Y. 10286, and its principal
executive office is located at One Wall Street, New York, N.Y. 10286.

               THE DEPOSITARY'S CORPORATE TRUST OFFICE ADDRESS IS
                    101 BARCLAY STREET, NEW YORK, N.Y. 10286

<PAGE>

1.   THE DEPOSIT AGREEMENT.

     This American Depositary Receipt is one of an issue (herein called
"Receipts"), all issued and to be issued upon the terms and conditions set forth
in the deposit agreement, dated as of November 16, 1999, as amended and restated
as of August 7, 2000, and as further amended and restated as of ___________,
2003 (herein called the "Deposit Agreement"), by and among the Issuer, the
Depositary, and all Owners and holders from time to time of Receipts issued
thereunder, each of whom by accepting a Receipt agrees to become a party thereto
and become bound by all the terms and conditions thereof. The Deposit Agreement
sets forth the rights of Owners and holders of the Receipts and the rights and
duties of the Depositary in respect of the Shares deposited thereunder and any
and all other securities, property and cash from time to time received in
respect of such Shares and held thereunder (such Shares, securities, property,
and cash are herein called "Deposited Securities"). Copies of the Deposit
Agreement are on file at the Depositary's Corporate Trust Office in New York
City and at the office of the Custodian.

     The statements made on the face and reverse of this Receipt are summaries
of certain provisions of the Deposit Agreement and are qualified by and subject
to the detailed provisions of the Deposit Agreement, to which reference is
hereby made. Capitalized terms not defined herein shall have the meanings set
forth in the Deposit Agreement.

2.   SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

     Upon surrender of this Receipt at the Corporate Trust Office of the
Depositary of this Receipt, and upon payment of the fee of the Depositary
provided in this Receipt, and subject to the terms and conditions of the Deposit
Agreement, the Owner hereof is entitled to delivery, to him or upon his order,
of the amount of Deposited Securities at the time represented by the American
Depositary Shares for which this Receipt is issued. Delivery of such Deposited
Securities may be made by the delivery of (a) certificates in the name of the
Owner hereof or as ordered by him or by the delivery of certificates properly
endorsed or accompanied by a proper instrument or instruments of transfer and
(b) any other securities, property and cash to which such Owner is then entitled
in respect of this Receipt. Such delivery will be made at the option of the
Owner hereof, either at the office of the Custodian or at the Corporate Trust
Office of the Depositary, provided that the forwarding of certificates for
Shares or other Deposited Securities for such delivery at the Corporate Trust
Office of the Depositary shall be at the risk and expense of the Owner hereof.
Notwithstanding any other provision of the Deposit Agreement or the Receipts,
the surrender of outstanding Receipts and withdrawal of Deposited Securities may
be suspended only for (i) temporary delays caused by closing the transfer books
of the Depositary or the Issuer or the deposit of Shares in connection with
voting at a shareholders' meeting, or the payment of dividends, (ii) the payment
of fees, taxes and

                                       -2-

<PAGE>

similar charges, and (iii) compliance with any U.S. or foreign laws or
governmental regulations relating to the Receipts or to the withdrawal of the
Deposited Securities.

3.   TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

     The transfer of this Receipt is registrable on the books of the Depositary
at its Corporate Trust Office by the Owner hereof in person or by a duly
authorized attorney, without unreasonable delay, upon surrender of this Receipt
properly endorsed for transfer or accompanied by a proper instrument or
instruments of transfer and funds sufficient to pay any applicable transfer
taxes and the fees and expenses of the Depositary and upon compliance with such
regulations, if any, as the Depositary may establish for such purpose. This
Receipt may be split into other such Receipts, or may be combined with other
such Receipts into one Receipt, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered. As a condition
precedent to the execution and delivery, registration of transfer, split-up,
combination, or surrender of any Receipt or withdrawal of any Deposited
Securities, the Depositary, the Custodian, or Registrar may require payment from
the depositor of Shares or the presentor of the Receipt of a sum sufficient to
reimburse it for any tax or other governmental charge and any stock transfer or
registration fee with respect thereto (including any such tax or charge or fee
with respect to the Shares being deposited or withdrawn) and payment of any
applicable fees as provided in the Deposit Agreement or this Receipt, may
require the production of proof satisfactory to it as to the identity and
genuineness of any signature and may also require compliance with any
regulations the Depositary may establish consistent with the provisions of the
Deposit Agreement or this Receipt.

     The delivery of Receipts against deposits of Shares generally or against
deposits of particular Shares may be suspended, or the transfer of Receipts in
particular instances may be refused, or the registration of transfer of
outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary or the Issuer or the Foreign Registrar, if
applicable, are closed, or if any such action is deemed necessary or advisable
by the Depositary or the Issuer at any time or from time to time because of any
requirement of law or of any government or governmental body or commission, or
under any provision of the Deposit Agreement or this Receipt, or for any other
reason, subject to Article (22) hereof. Without limitation of the foregoing, the
Depositary shall not knowingly accept for deposit under the Deposit Agreement
any Shares required to be registered under the provisions of the Securities Act
of 1933, unless a registration statement is in effect as to such Shares.

4.   LIABILITY OF OWNER FOR TAXES.

     If any tax or other governmental charge shall become payable with respect
to any Receipt or any Deposited Securities represented hereby, such tax or other
governmental charge shall be payable by the Owner hereof to the Depositary. The
Depositary may refuse to effect any transfer of this Receipt or any withdrawal
of Deposited Securities

                                       -3-

<PAGE>

represented by American Depositary Shares evidenced by such Receipt until such
payment is made, and may withhold any dividends or other distributions, or may
sell for the account of the Owner hereof any part or all of the Deposited
Securities represented by the American Depositary Shares evidenced by this
Receipt, and may apply such dividends or other distributions or the proceeds of
any such sale in payment of such tax or other governmental charge and the Owner
hereof shall remain liable for any deficiency.

5.   WARRANTIES OF DEPOSITORS.

     Every person depositing Shares under the Deposit Agreement shall be deemed
thereby to represent and warrant that such Shares and each certificate therefor
are validly issued, fully paid, nonassessable, and free of any pre-emptive
rights of the holders of outstanding Shares and that the person making such
deposit is duly authorized to do so. Every such person shall also be deemed to
represent that the deposit of such Shares or sale of Receipts evidencing
American Depositary Shares representing such Shares by that person is not
restricted under the Securities Act of 1933. Such representations and warranties
shall survive the deposit of Shares and issuance of Receipts.

6.   FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

     Any person presenting Shares for deposit or any Owner of a Receipt may be
required from time to time to file with the Depositary or the Custodian such
proof of citizenship or residence, exchange control approval, proof of the
identity of any person legally or beneficially interested in the Receipt and the
nature of such interest or such information relating to the registration on the
books of the Issuer or the Foreign Registrar, if applicable, to execute such
certificates and to make such representations and warranties, as the Depositary
or the Issuer may deem necessary or proper. The Depositary may withhold the
delivery or registration of transfer of any Receipt or the distribution of any
dividend or sale or distribution of rights or of the proceeds thereof or the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed or such representations and warranties
made. Upon the request of the Issuer, the Depositary shall provide the Issuer
with copies of all such certificates and such written representations and
warranties provided to the Depositary under this Article (6) and Section 3.1 of
the Deposit Agreement. Each Owner agrees to provide any information requested by
the Issuer or the Depositary pursuant to this paragraph. No Share shall be
accepted for deposit unless accompanied by evidence, if any is required by the
Depositary, that is reasonably satisfactory to the Depositary that all
conditions to such deposit have been satisfied by the person depositing such
Shares under the laws of the United Kingdom and regulations and any necessary
approval has been granted by any governmental body in the United Kingdom, if
any, which is then performing the function of the regulation of currency
exchange.

                                       -4-

<PAGE>

7.   CHARGES OF DEPOSITARY.

     The Issuer agrees to pay certain fees and reasonable expenses and
out-of-pocket charges of the Depositary and those of any Registrar only in
accordance with agreements in writing entered into between the Depositary and
the Issuer from time to time. The Depositary shall present its statement for
such charges and expenses to the Issuer once every three months. The charges and
expenses of the Custodian are for the sole account of the Depositary.

     The following charges shall be incurred by any party depositing or
withdrawing Shares or by any party surrendering Receipts or to whom Receipts are
issued (including, without limitation, issuance pursuant to a stock dividend or
stock split declared by the Issuer or an exchange of stock regarding the
Receipts or Deposited Securities or a distribution of Receipts pursuant to
Section 4.3 of the Deposit Agreement), whichever applicable: (1) taxes and other
governmental charges, (2) such registration fees as may from time to time be in
effect for the registration of transfers of Shares generally on the Share
register of the Issuer or Foreign Registrar and applicable to transfers of
Shares to the name of the Depositary or its nominee or the Custodian or its
nominee on the making of deposits or withdrawals under the Deposit Agreement,
(3) such cable, telex and facsimile transmission expenses as are expressly
provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.5 of the
Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares
(or portion thereof) for the execution and delivery of Receipts pursuant to
Section 2.3, 4.3 or 4.4 of the Deposit Agreement, and the surrender of Receipts
pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.02 or
less per American Depositary Share (or portion thereof) for any cash
distribution made pursuant to the Deposit Agreement including, but not limited
to, Sections 4.1 through 4.4 of the Deposit Agreement, except for distributions
of cash dividends, and (7) a fee for the distribution of proceeds of sales of
securities or rights pursuant to Section 4.2 or 4.4 of the Deposit Agreement,
respectively, such fee being (i) in an amount equal to the fee for the issuance
of American Depositary Shares referred to above which would have been charged as
a result of the deposit by Owners of securities (for purposes of this clause (7)
treating all such securities as if they were Shares) or Shares received in
exercise of rights distributed to them pursuant to Section 4.2 or 4.4 of the
Deposit Agreement, respectively, but which securities or rights are instead sold
by the Depositary and the net proceeds distributed and (ii) payable from such
proceeds of sales of securities or rights.

     The Depositary, subject to Article (8) hereof, may own and deal in any
class of securities of the Issuer and its affiliates and in Receipts.

                                       -5-

<PAGE>

8.   PRE-RELEASE OF RECEIPTS.

     The Depositary may issue Receipts against the delivery by the Issuer (or
any agent of the Issuer recording Share ownership) of rights to receive Shares
from the Issuer (or any such agent). No such issue of Receipts will be deemed a
"Pre-Release" that is subject to the restrictions of the following paragraph.

     Unless requested in writing by the Issuer to cease doing so, the Depositary
may, notwithstanding Section 2.3 of the Deposit Agreement, execute and deliver
Receipts prior to the receipt of shares pursuant to Section 2.2 of the Deposit
Agreement ("Pre-Release"). The Depositary may, pursuant to Section 2.5 of the
Deposit Agreement, deliver Shares upon the receipt and cancellation of Receipts
which have been Pre-Released, whether or not such cancellation is prior to the
termination of such Pre-Release or the Depositary knows that such Receipt has
been Pre-Released. The Depositary may receive Receipts in lieu of Shares in
satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or
accompanied by a written representation and agreement from the person to whom
Receipts are to be delivered (the "Pre-Releasee") that the Pre-Releasee, or its
customer, (i) owns the Shares or Receipts to be remitted, as the case may be,
(ii) assigns all beneficial rights, title and interest in such Shares or
Receipts, as the case may be, to the Depositary in its capacity as such and for
the benefit of the Owners, and (iii) will not take any action with respect to
such Shares or Receipts, as the case may be, that is inconsistent with the
transfer of beneficial ownership (including, without the consent of the
Depositary, disposing of such Shares or Receipts, as the case may be), other
than in satisfaction of such Pre-Release, (b) at all times fully collateralized
with cash, U.S. government securities or such other collateral as the Depositary
determines, in good faith, will provide substantially similar liquidity and
security, (c) terminable by the Depositary on not more than five (5) business
days notice, and (d) subject to such further indemnities and credit regulations
as the Depositary deems appropriate. The number of Shares not deposited but
represented by American Depositary Shares outstanding at any time as a result of
Pre-Releases will not normally exceed thirty percent (30%) of the Shares
deposited under the Deposit Agreement; provided, however, that the Depositary
reserves the right to exceed such limit from time to time as it deems reasonably
appropriate, and may, with the prior written consent of the Issuer, change such
limit for purposes of general application. The Depositary will also set Dollar
limits with respect to Pre-Release transactions to be entered into under the
Deposit Agreement with any particular Pre-Releasee on a case-by-case basis as
the Depositary deems appropriate. For purposes of enabling the Depositary to
fulfill its obligations to the Owners under the Deposit Agreement, the
collateral referred to in clause (b) above shall be held by the Depositary as
security for the performance of the Pre-Releasee's obligations to the Depositary
in connection with a Pre-Release transaction, including the Pre-Releasee's
obligation to deliver Shares or Receipts upon termination of a Pre-Release
transaction (and shall not, for the avoidance of doubt, constitute Deposited
Securities under the Deposit Agreement).

                                       -6-

<PAGE>

     The Depositary may retain for its own account any compensation received by
it in connection with the foregoing.

9.   TITLE TO RECEIPTS.

     It is a condition of this Receipt and every successive holder and Owner of
this Receipt by accepting or holding the same consents and agrees, that title to
this Receipt when properly endorsed or accompanied by a proper instrument or
instruments of transfer, is transferable by delivery with the same effect as in
the case of a negotiable instrument, provided, however, that the Issuer and the
Depositary, notwithstanding any notice to the contrary, may treat the person in
whose name this Receipt is registered on the books of the Depositary as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement or for all other purposes and neither the Depositary
nor the Issuer shall have any obligation or be subject to any liability under
the Deposit Agreement to any holder of a Receipt unless such holder is the Owner
thereof.

10.  VALIDITY OF RECEIPT.

     This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed by the Depositary by the manual or facsimile signature of a
duly authorized signatory of the Depositary and, if a Registrar for the Receipts
shall have been appointed, countersigned by the manual or facsimile signature of
a duly authorized officer of the Registrar.

11.  REPORTS; INSPECTION OF TRANSFER BOOKS.

     The Issuer is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934 and, accordingly, files certain reports with the
Securities and Exchange Commission (hereinafter called the "Commission").

     The Depositary will make available for inspection by Owners of Receipts at
its Corporate Trust Office any reports and communications, including any proxy
soliciting material, received from the Issuer which are both (a) received by the
Depositary or the Custodian or the nominee of either as the holder of the
Deposited Securities and (b) made generally available to the holders of such
Deposited Securities by the Issuer. The Depositary will also, upon written
request, send to Owners of Receipts copies of such reports when furnished by the
Issuer pursuant to the Deposit Agreement. Any such reports and communications,
including any such proxy soliciting material, furnished to the Depositary by the
Issuer shall be furnished in English.

     The Depositary shall keep books for the registration of Receipts and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Owners of Receipts provided that such inspection shall not be for the
purpose of communicating

                                       -7-

<PAGE>

with Owners of Receipts in the interest of a business or object other than the
business of the Issuer or a matter related to the Deposit Agreement or the
Receipts.

12.  DIVIDENDS AND DISTRIBUTIONS.

          Whenever the Depositary receives any cash dividend or other cash
distribution on any Deposited Securities, the Depositary will, if at the time of
receipt thereof any amounts received in a foreign currency can in the judgment
of the Depositary be converted on a reasonable basis into United States Dollars
transferable to the United States, and subject to the Deposit Agreement, convert
such dividend or distribution into Dollars and will promptly distribute the
amount thus received (net of the fees of the Depositary as provided in Section
5.9 of the Deposit Agreement) to the Owners of Receipts entitled thereto,
provided, however, that in the event that the Issuer or the Depositary is
required to withhold and does withhold from any cash dividend or other cash
distribution in respect of any Deposited Securities an amount on account of
taxes or other governmental charges, the amount distributed to the Owners of the
Receipts evidencing American Depositary Shares representing such Deposited
Securities shall be reduced accordingly. The beneficial interest in a common
access share, which is included with each Share, enables holders of Shares to
receive dividends from S&N (which is tax resident in the United Kingdom) rather
than from the Issuer (which is tax resident in Switzerland) in respect of their
Shares. All Shares represented by American Depositary Shares will be treated by
the Issuer as having elected to receive dividends from S&N, rather than the
Issuer, which election cannot be changed by Owners

     Subject to the provisions of Sections 4.11 and 5.9 of the Deposit
Agreement, whenever the Depositary receives any distribution other than a
distribution described in Sections 4.1, 4.3 or 4.4 of the Deposit Agreement, the
Depositary will cause the securities or property received by it to be
distributed to the Owners of Receipts entitled thereto, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners of Receipts
entitled thereto, or if for any other reason the Depositary deems such
distribution not to be feasible, the Depositary may adopt such method as it may
deem equitable and practicable for the purpose of effecting such distribution,
including, but not limited to, the public or private sale of the securities or
property thus received, or any part thereof, and the net proceeds of any such
sale (net of the fees of the Depositary as provided in Section 5.9 of the
Deposit Agreement) shall be distributed by the Depositary to the Owners of
Receipts entitled thereto as in the case of a distribution received in cash.

     If any distribution consists of a dividend in, or free distribution of,
Shares, the Depositary may and shall if the Issuer shall so request, distribute
to the Owners of outstanding Receipts entitled thereto, additional Receipts
evidencing an aggregate number of American Depositary Shares representing the
amount of Shares received as such dividend or free distribution subject to the
terms and conditions of the Deposit

                                       -8-

<PAGE>

Agreement with respect to the deposit of Shares and the issuance of American
Depositary Shares evidenced by Receipts, including the withholding of any tax or
other governmental charge as provided in Section 4.11 of the Deposit Agreement
and the payment of the fees of the Depositary as provided in Section 5.9 of the
Deposit Agreement. In lieu of delivering Receipts for fractional American
Depositary Shares in any such case, the Depositary will sell the amount of
Shares represented by the aggregate of such fractions and distribute the net
proceeds, all in the manner and subject to the conditions set forth in the
Deposit Agreement. If additional Receipts are not so distributed, each American
Depositary Share shall thenceforth also represent the additional Shares
distributed upon the Deposited Securities represented thereby.

     In the event that the Depositary determines that any distribution in
property (including Shares and rights to subscribe therefor) is subject to any
tax or other governmental charge which the Depositary is obligated to withhold,
the Depositary may by public or private sale dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner as the Depositary deems necessary and practicable to pay any such
taxes or charges, and the Depositary shall distribute the net proceeds of any
such sale after deduction of such taxes or charges to the Owners of Receipts
entitled thereto and the Depositary shall distribute any unsold balance of such
property in accordance with the provisions of the Deposit Agreement. The Issuer
or its agent shall remit to appropriate governmental authorities and agencies in
the United Kingdom all amounts, if any, withheld and owing to such authorities
and agencies by the Issuer. The Depositary or its agent shall remit to
appropriate governmental authorities and agencies in the United States all
amounts, if any, withheld and owing to such authorities and agencies by the
Depositary.

     The Depositary shall forward to the Issuer or its agent such information
from its records as the Issuer may reasonably request to enable the Issuer or
its agent to file necessary reports with governmental agencies. The Depositary
shall use reasonable efforts to make and maintain arrangements enabling Owners
who are citizens or residents of the United States to receive any tax credits or
other benefits (pursuant to treaty or otherwise) relating to dividend payments
on the American Depositary Shares.

13.  CONVERSION OF FOREIGN CURRENCY.

     Subject to any restriction imposed by the laws of the United Kingdom,
regulations or applicable permits issued by any governmental body, whenever the
Depositary shall receive foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into Dollars and the resulting Dollars transferred to the United States,
the Depositary shall convert or cause to be converted as promptly as
practicable, by sale or in any other manner that it may determine, such foreign
currency into Dollars, and such Dollars shall be distributed to the Owners
entitled thereto or, if the Depositary shall have

                                       -9-

<PAGE>

distributed any warrants or other instruments which entitle the holders thereof
to such Dollars, then to the holders of such warrants and/or instruments upon
surrender thereof for cancellation in whole or in part, depending upon the terms
of such warrants or other instruments. Such distribution shall be made in
proportion to the number of American Depositary Shares representing Deposited
Securities held respectively by such Owners entitling them to such Dollars and
may be made upon an averaged or other practicable basis without regard to any
distinctions among Owners on account of exchange restrictions, the date of
delivery of any Receipt or otherwise and shall be net of any expenses of
conversion into Dollars incurred by the Depositary as provided in Section 5.9 of
the Deposit Agreement.

     If such conversion or distribution can be effected only with the approval
or license of any government or agency thereof, the Depositary shall file such
application for approval or license, if any, as it may deem desirable.

     If at any time the Depositary shall determine that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into Dollars transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Depositary is not obtainable, or
if any such approval or license is not obtained within a reasonable period as
determined by the Depositary, the Depositary may, after Consultation with the
Issuer, distribute the foreign currency (or an appropriate document evidencing
the right to receive such foreign currency) received by the Depositary to, or in
its discretion may hold such foreign currency uninvested and without liability
for interest thereon for the respective accounts of, the Owners entitled to
receive the same.

     If any such conversion of foreign currency, in whole or in part, cannot be
effected for distribution to some of the Owners entitled thereto, the Depositary
may in its discretion make such conversion and distribution in Dollars to the
extent permissible to the Owners entitled thereto and may distribute the balance
of the foreign currency received by the Depositary to, or hold such balance
uninvested and without liability for interest thereon for the respective
accounts of, the Owners not entitled to receive Dollars.

14.  RIGHTS.

     In the event that the Issuer shall offer or cause to be offered to the
holders of any Deposited Securities any rights to subscribe for additional
Shares or any rights of any other nature, the Depositary, after Consultation
with the Issuer, shall have discretion as to the procedure to be followed in
making such rights available to any Owners or in disposing of such rights on
behalf of any Owners and making the net proceeds available in Dollars to such
Owners or, if by the terms of such rights offering or, for any other reason, the
Depositary may not either make such rights available to any Owners or dispose of
such rights and make the net proceeds available to such Owners, then the
Depositary shall allow the rights to lapse. If at the time of the offering of
any rights the

                                      -10-

<PAGE>

Depositary determines in its discretion, after Consultation with the Issuer,
that it is lawful and feasible to make such rights available to all Owners or to
certain Owners but not to other Owners, the Depositary may distribute, to any
Owner to whom it determines the distribution to be lawful and feasible, in
proportion to the number of American Depositary Shares held by such Owner,
warrants or other instruments therefor in such form as it deems appropriate.

     In circumstances in which rights would otherwise not be distributed, if an
Owner of Receipts requests the distribution of warrants or other instruments in
order to exercise the rights allocable to the American Depositary Shares of such
Owner under the Deposit Agreement, the Depositary will make such rights
available to such Owner upon written notice from the Issuer to the Depositary
that (a) the Issuer has elected in its sole discretion to permit such rights to
be exercised and (b) such Owner has executed such documents as the Issuer has
determined in its sole discretion are reasonably required under applicable law.

     If the Depositary has distributed warrants or other instruments for rights
to all or certain Owners, then upon instruction from such an Owner pursuant to
such warrants or other instruments to the Depositary from such Owner to exercise
such rights, upon payment by such Owner to the Depositary for the account of
such Owner of an amount equal to the purchase price of the Shares to be received
upon the exercise of the rights, and upon payment of the fees of the Depositary
and any other charges as set forth in such warrants or other instruments, the
Depositary shall, on behalf of such Owner, exercise the rights and purchase the
Shares, and the Issuer shall cause the Shares so purchased to be delivered to
the Depositary on behalf of such Owner. As agent for such Owner, the Depositary
will cause the Shares so purchased to be deposited pursuant to Section 2.2 of
the Deposit Agreement, and shall, pursuant to Section 2.3 of the Deposit
Agreement, execute and deliver Receipts to such Owner. In the case of a
distribution pursuant to the second paragraph of this Article (14), such
Receipts shall be legended in accordance with applicable U.S. laws, and shall be
subject to the appropriate restrictions on sale, deposit, cancellation, and
transfer under such laws.

     If the Depositary determines in its discretion, after Consultation with the
Issuer, that it is not lawful and feasible to make such rights available to all
or certain Owners, it may sell the rights, warrants or other instruments in
proportion to the number of American Depositary Shares held by the Owners to
whom it has determined it may not lawfully or feasibly make such rights
available, and allocate the net proceeds of such sales (net of the fees of the
Depositary as provided in Section 5.9 of the Deposit Agreement and all taxes and
governmental charges payable in connection with such rights and subject to the
terms and conditions of the Deposit Agreement) for the account of such Owners
otherwise entitled to such rights, warrants or other instruments, upon an
averaged or other practical basis without regard to any distinctions among such
Owners because of exchange restrictions or the date of delivery of any Receipt
or otherwise.

                                      -11-

<PAGE>

     The Depositary will not offer rights to Owners unless both the rights and
the securities to which such rights relate are either exempt from registration
under the Securities Act of 1933 with respect to a distribution to Owners or are
registered under the provisions of such Act. If an Owner of Receipts requests
distribution of warrants or other instruments, notwithstanding that there has
been no such registration under such Act, the Depositary shall not effect such
distribution unless it has received an opinion from recognized counsel in the
United States for the Issuer upon which the Depositary may rely that such
distribution to such Owner is exempt from such registration.

     The Depositary shall not be responsible for any failure to determine that
it may be lawful or feasible to make such rights available to Owners in general
or any Owner in particular.

     The Issuer shall be under no obligation to file any registration statement
under the Securities Act of 1933 to make available to Owners any additional
Shares, rights or other Distributions.

15.  RECORD DATES.

     Whenever any cash dividend or other cash distribution shall become payable
or any distribution other than cash shall be made, or whenever rights shall be
issued with respect to the Deposited Securities, or whenever for any reason the
Depositary causes a change in the number of Shares that are represented by each
American Depositary Share, or whenever the Depositary shall receive notice of
any meeting of holders of Shares or other Deposited Securities, the Depositary
shall fix a record date, after Consultation with the Issuer if such record date
is different from the record date applicable to the Deposited Securities (a) for
the determination of the Owners of Receipts who shall be (i) entitled to receive
such dividend, distribution or rights or the net proceeds of the sale thereof or
(ii) entitled to give instructions for the exercise of voting rights at any such
meeting, or (b) on or after which each American Depositary Share will represent
the changed number of Shares, subject to the provisions of the Deposit
Agreement. The Owners on such record date shall be entitled, subject to the
applicable provisions of the Deposit Agreement, as the case may be, to receive
the amount distributable by the Depositary with respect to such dividend or
other distribution or such rights or the net proceeds or sale thereof in
proportion to the number of American Depositary Shares held by them
respectively, and to give voting instructions to exercise the rights of Owners
under the Deposit Agreement with respect to such changed number of Shares and to
act in respect of any other such matter. Any such record date fixed by the
Depositary will, to the extent practicable, be the same as the record date fixed
by the Issuer with respect to such dividend, distribution or meeting.

                                      -12-

<PAGE>

16.  VOTING OF DEPOSITED SECURITIES.

     Upon receipt of notice of any meeting of holders of Shares or other
Deposited Securities, if requested in writing by the Issuer, the Depositary
shall, as soon as practicable thereafter, mail to the Owners of Receipts a
notice, the form of which notice shall be subject to the reasonable discretion
of the Depositary, which shall contain (a) such information as is contained in
such notice of meeting, received by the Depositary from the Issuer and (b) a
statement that the Owners of Receipts as of the close of business on a specified
record date will be entitled, subject to any applicable provision of law and of
the Articles of Association of the Issuer and the provisions of the Deposited
Securities, to instruct the Depositary as to the exercise of the voting rights,
if any, pertaining to the amount of Shares or other Deposited Securities
represented by their respective American Depositary Shares and (c) a statement
as to the manner in which such instructions may be given, including, when
applicable, an express indication that instructions may be given (or, if
applicable, deemed given in accordance with the second paragraph of Section 4.7
of the Deposit Agreement if no instruction is received) to the Depositary to
give a discretionary proxy to a person designated by the Issuer. Upon the
written request of an Owner of a Receipt on such record date, received on or
before the date established by the Depositary for such purpose, the Depositary
shall endeavor insofar as practicable and permitted under applicable laws and
the provisions of the Articles of Association of the Issuer and the provisions
of the Deposited Securities to vote or cause to be voted the amount of Shares or
other Deposited Securities represented by such American Depositary Shares
evidenced by such Receipt in accordance with any nondiscretionary instructions
set forth in such request including their instruction to give a discretionary
proxy to a person designated by the Issuer and the Depositary shall not, and the
Depositary shall ensure that each Custodian or any of its nominees shall not,
exercise any voting discretion over any Deposited Securities. Upon the written
request of an Owner of a Receipt on such record date, received on or before the
date established by the Depositary for such purpose, the Depositary shall
endeavor in so far as practicable to vote or cause to be voted the amount of
Shares or other Deposited Securities represented by such American Depositary
Shares evidenced by such Receipt in accordance with the instructions set forth
in such request. The Depositary shall not vote or attempt to exercise the right
to vote that attaches to the Shares or other Deposited Securities, other than in
accordance with such instructions.

     If after complying with the procedures set forth in this Article (16), the
Depositary does not receive instructions from the Owner of a Receipt on or
before the date established by the Depositary for such purpose, the Depositary
shall, subject to applicable law, give a discretionary proxy for the Shares
evidenced by such Receipt to a person designated by the Issuer.

     There can be no assurance that Owners generally or any Owner in particular
will receive the notice described in the preceding paragraph sufficiently prior
to the

                                      -13-

<PAGE>

Instruction Date to ensure that the Depositary will vote the Shares or Deposited
Securities in accordance with the provisions set forth in the preceding
paragraph.

     Subject to the rules of any securities exchange on which the Deposited
Securities are listed the Depositary shall use its reasonable efforts to deliver
to the extent practicable, at least two business days prior to the date of such
meeting, to the Issuer voting instructions received (or deemed received) from
Owners.

17.  CHANGES AFFECTING DEPOSITED SECURITIES.

     In circumstances where the provisions of Section 4.3 of the Deposit
Agreement do not apply, upon any change in nominal value, change in par value,
split-up, consolidation, or any other reclassification of Deposited Securities,
or upon any recapitalization, reorganization, merger or consolidation, or sale
of assets affecting the Issuer or to which it is a party, any securities which
shall be received by the Depositary or a Custodian in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Depositary Shares
shall thenceforth represent the new Deposited Securities so received in exchange
or conversion, unless additional Receipts are delivered pursuant to the
following sentence. In any such case the Depositary may, after Consultation with
the Issuer, and shall, if the Issuer shall so request, execute and deliver
additional Receipts as in the case of a dividend on the Shares, or call for the
surrender of outstanding Receipts to be exchanged for new Receipts specifically
describing such new Deposited Securities.

18.  LIABILITY OF THE ISSUER AND DEPOSITARY.

     Neither the Depositary nor the Issuer nor any of their directors,
employees, agents or affiliates shall incur any liability to any Owner or holder
of any Receipt, if by reason of any provision of any present or future law or
regulation of the United States, England and Wales or any other country, or of
any other governmental or regulatory authority or stock exchange, or by reason
of any provision, present or future, of the Articles of Association of the
Issuer, or by reason of any provision of any securities issued or distributed by
the Issuer, or any offering or distribution thereof, or by reason of any act of
God or war or other circumstances beyond its control, the Depositary or the
Issuer or any of their directors, employees, agents or affiliates shall be
prevented, delayed or forbidden from or be subject to any civil or criminal
penalty on account of doing or performing any act or thing which by the terms of
the Deposit Agreement it is provided shall be done or performed; nor shall the
Depositary or the Issuer incur any liability to any Owner or holder of a Receipt
by reason of any non-performance or delay, caused as aforesaid, in the
performance of any act or thing which by the terms of the Deposit Agreement it
is provided shall or may be done or performed, or by reason of any exercise of,
or failure to exercise, any discretion provided for in the Deposit Agreement.
Where, by the terms of a distribution pursuant to Sections 4.1, 4.2, or 4.3 of
the Deposit Agreement, or an offering or distribution pursuant to Section 4.4 of
the Deposit Agreement, such distribution or

                                      -14-

<PAGE>

offering may not be made available to Owners of Receipts, and the Depositary may
not dispose of such distribution or offering on behalf of such Owners and make
the net proceeds available to such Owners, then the Depositary shall not make
such distribution or offering, and shall allow any rights, if applicable, to
lapse. Neither the Issuer nor the Depositary assumes any obligation or shall be
subject to any liability under the Deposit Agreement to any Owner or holder of
any Receipts, except that they agree to perform their obligations specifically
set forth in the Deposit Agreement without negligence and to act in good faith
in the performance of such duties. The Depositary shall not be subject to any
liability with respect to the validity or worth of the Deposited Security.
Neither the Depositary nor the Issuer shall be under any obligation to appear
in, prosecute or defend any action, suit, or other proceeding in respect of any
Deposited Security or in respect of the Receipts, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability shall be furnished as often as may be required, and
the Custodian shall not be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the Depositary.
Neither the Depositary nor the Issuer shall be liable for any action or
nonaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Owner or
holder of a Receipt, or any other person believed by it in good faith to be
competent to give such advice or information including, but not limited to, any
such action or nonaction based upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Depositary shall not be responsible for any
failure to carry out any instructions to vote any of the Deposited Securities,
or for the manner in which any such vote is cast or the effect of any such vote,
provided that any such action or nonaction is in good faith. The Depositary
shall not be liable for any acts or omissions made by a successor depositary
whether in connection with a previous act or omission of the Depositary or in
connection with a matter arising wholly after the removal or resignation of the
Depositary, provided that in connection with the issue out of which such
potential liability arises the Depositary performed its obligations without
negligence or bad faith while it acted as Depositary. The Issuer agrees to
indemnify the Depositary, its directors, employees, agents and affiliates and
any Custodian against, and hold each of them harmless from, any liability or
expense (including, but not limited to, the reasonable fees and expenses of
counsel) which may arise out of acts performed or omitted, in accordance with
the provisions of the Deposit Agreement and of the Receipts, as the same may be
amended, modified, or supplemented from time to time, (i) by either the
Depositary or any Custodian or their respective directors, employees, agents and
affiliates, except for any liability or expense arising out of the negligence or
bad faith of any of them, or (ii) by the Issuer or any of its directors,
employees, agents and affiliates. No disclaimer of liability under the
Securities Act of 1933 is intended by any provision of the Deposit Agreement.

                                      -15-

<PAGE>

19.  RESIGNATION AND REMOVAL OF THE DEPOSITARY.

     The Depositary may at any time resign as Depositary under the Deposit
Agreement by written notice of its election to do so delivered to the Issuer,
effective upon the appointment of a successor depositary and such successor
depositary's acceptance of such appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Issuer by written
notice of such removal, effective upon the appointment of a successor depositary
and such successor depositary's acceptance of such appointment as provided in
the Deposit Agreement. Whenever the Depositary in its discretion determines that
it is in the best interest of the Owners of Receipts to do so, it may appoint a
substitute or additional custodian or custodians.

20.  AMENDMENT.

     The form of Receipts and any provision of the Deposit Agreement may at any
time and from time to time be amended by agreement between the Issuer and the
Depositary in any respect which they may deem necessary or desirable. Any
amendment which shall impose or increase any fee or charge (other than taxes and
other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall
otherwise prejudice any substantial existing right of Owners of Receipts, shall,
however, not become effective as to outstanding Receipts until the expiration of
a thirty day period following notification pursuant to Section 7.5 of the
Deposit Agreement after notice of any such amendment shall have been given to
the Owners of outstanding Receipts. Every Owner of a Receipt at the time any
amendment becomes effective shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound by the Deposit Agreement
as amended thereby. In no event shall any amendment impair the right of the
Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby except in order to comply with
mandatory provisions of applicable law.

21.  TERMINATION OF DEPOSIT AGREEMENT.

     The Depositary shall at any time at the direction of the Issuer terminate
the Deposit Agreement by mailing notice of such termination to the Owners of all
Receipts then outstanding at least 30 days prior to the date fixed in such
notice for such termination. The Depositary may likewise terminate the Deposit
Agreement by mailing notice of such termination to the Issuer and the Owners of
all Receipts then outstanding if at any time 90 days shall have expired after
the Depositary shall have delivered to the Issuer a written notice of its
election to resign and a successor depositary shall not have been appointed and
accepted its appointment as provided in Section 5.4 of the Deposit Agreement. On
and after the date of termination, the Owner of a Receipt, will upon (a)
surrender of such Receipt at the Corporate Trust Office of the Depositary, (b)
payment of the fee of the Depositary for the surrender of Receipts referred to
in Section 2.5 of the

                                      -16-

<PAGE>

Deposit Agreement, and (c) payment of any applicable taxes or governmental
charges, will be entitled to delivery, to him or as ordered by him, of the
amount of Deposited Securities represented by the American Depositary Shares
evidenced by such Receipt. If any Receipts shall remain outstanding after the
date of termination, the Depositary thereafter shall discontinue the
registration of transfers of Receipts, shall suspend the distribution of
dividends to the Owners thereof, and shall not give any further notices or
perform any further acts under the Deposit Agreement, except that the Depositary
shall continue to collect dividends and other distributions pertaining to
Deposited Securities, shall sell property and rights as provided in the Deposit
Agreement, and shall continue to deliver Deposited Securities, together with any
dividends or other distributions received with respect thereto and the net
proceeds of the sale of any rights or other property, in exchange for Receipts
surrendered to the Depositary (after deducting, in each case, the fee of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Owner of such Receipt in accordance with the terms and conditions of the Deposit
Agreement, and any applicable taxes or governmental charges). At any time after
the expiration of one year from the date of termination, the Depositary may sell
the Deposited Securities then held under the Deposit Agreement and may
thereafter hold uninvested the net proceeds of any such sale, together with any
other cash then held by it thereunder, unsegregated and without liability for
interest, for the pro rata benefit of the Owners of Receipts which have not
theretofore been surrendered, such Owners thereupon becoming general creditors
of the Depositary with respect to such net proceeds. After making such sale, the
Depositary shall be discharged from all obligations under the Deposit Agreement,
except to account for such net proceeds and other cash (after deducting, in each
case, the fee of the Depositary for the surrender of a Receipt, any expenses for
the account of the Owner of such Receipt in accordance with the terms and
conditions of the Deposit Agreement, and any applicable taxes or governmental
charges). Upon the termination of the Deposit Agreement, the Issuer shall be
discharged from all obligations under the Deposit Agreement except for its
obligations to the Depositary with respect to indemnification, charges, and
expenses. The obligations of the Depositary under Section 5.8 of the Deposit
Agreement shall survive the termination of the Deposit Agreement.

22.  COMPLIANCE WITH U.S. SECURITIES LAWS.

     Notwithstanding anything in the Deposit Agreement or this Receipt to the
contrary, the Issuer and the Depositary each agrees that it will not exercise
any rights it has under the Deposit Agreement to prevent the withdrawal or
delivery of Deposited Securities in a manner which would violate the U.S.
securities laws, including, but not limited to, Section I.A.(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.

23.  DISCLOSURE OF INTERESTS.

     The Issuer may from time to time request Owners to provide information as
to the capacity in which such Owners own or owned Receipts and regarding the
identity of any

                                      -17-

<PAGE>

other persons then or previously interested in such Receipts and the nature of
such interest and various other matters. Each Owner agrees to provide any
information requested by the Issuer or the Depositary pursuant to this Article
(23). The Depositary agrees to comply with reasonable written instructions
received from the Issuer requesting that the Depositary forward any such
requests to the Owners and to forward to the Issuer any such responses to such
requests received by the Depositary.

24.  OWNERSHIP RESTRICTIONS.

     Notwithstanding any other provision of the Deposit Agreement, each Owner
and Beneficial Owner agrees to be bound by and subject to the By-laws of the
Issuer and to any restrictions on Share ownership or transferability under
applicable English law (to the same extent as if such American Depositary Shares
evidenced by this Receipt were the Shares evidenced by this Receipt, provided,
however, that such provisions shall apply to such persons only to the extent
feasible).

     In addition, Owners and Beneficial Owners are subject to regulations under
the Securities Exchange Act of 1934, pursuant to which, inter alia, acquisition
or sale of American Depositary Shares representing Shares in excess of
prescribed limits must be notified to the Commission and to any securities
exchange on which the American Depositary Shares are listed.

                                      -18-

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