Document:

<PAGE>

                                                                   EXHIBIT 10.31

                              DATED 28TH MAY 1999
                              -------------------

                         VODAFONE GROUP PENSION SCHEME
                      (formerly called the Vodafone Group
                             Staff Pension Scheme)

                     ------------------------------------

                            SECOND DEFINITIVE DEED
                                   AND RULES

                     ------------------------------------

                                                      Stephenson Harwood
--------------------------------------------------------------------------------
                                                      One, St. Paul's Churchyard
                                                      London EC4M 8SH

                                                      Telephone: 0171-329-4422
                                                      Fax: 0171-606 0822
<PAGE>

                         VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                                    CONTENTS
<TABLE>
<CAPTION>
                                                                                             Page
<S>                                                                                          <C>
PARTIES .....................................................................................   1
RECITALS ....................................................................................   1
OPERATIVE CLAUSES ...........................................................................   2

1        ADOPTION OF NEW PROVISIONS .........................................................   2

2        APPLICATION OF THE NEW PROVISIONS ..................................................   3
         2.1      Application of the new provisions relating to administration ..............   3
         2.2      Continued application of old rules to leavers before the Revision Date ....   3
         2.3      Application of new rules ..................................................   3
         2.4      Continuation of individual arrangements ...................................   3

SCHEDULE 1:       INTERPRETATION ............................................................   7

SCHEDULE 2:       OPERATION OF THE SCHEME ...................................................  23

SCHEDULE 3:       STAFF SECTION RULES .......................................................  87

SCHEDULE 4:       EXECUTIVE MANAGER AND SENIOR MANAGER SECTION RULES ........................ 137

SCHEDULE 5:       DIRECTORS SECTION RULES ................................................... 189

SCHEDULE 6:       REVENUE LIMITS RULES ...................................................... 237

SCHEDULE 7:       GMP RULES ................................................................. 253

SCHEDULE 8:       LIST OF GOVERNING DOCUMENTS ............................................... 259
</TABLE>
<PAGE>

                         VODAFONE GROUP PENSION SCHEME

THE SECOND DEFINITIVE DEED is made the 28th day of May 1999

BETWEEN:-

(1)      VODAFONE GROUP PLC (registered in England No. 1833679) whose registered
         office is at The Courtyard 2-4 London Road Newbury Berkshire
         (hereinafter called the "PRINCIPAL EMPLOYER")

(2)      VODAFONE GROUP PENSION TRUSTEE LIMITED (registered in England No.
         2288254) whose registered office is at The Courtyard as aforesaid
         (hereinafter called the "TRUSTEE")

WHEREAS:-

(A)      The Vodafone Group Pension Scheme (the "SCHEME") was established by the
         Interim Trust Deed dated 10 October 1988 listed as deed no. 1 in Part 1
         of Schedule 8. The Scheme was originally called the Racal Telecom Staff
         Pension Scheme, became known as the Vodafone Group Staff Pension Scheme
         in 1991 and has since 1 April 1999 (the "REVISION DATE") been known as
         the Vodafone Group Pension Sheme.

(B)      The Scheme is currently governed by the Clauses of and Rules attached
         to the Definitive Deed dates 3 August 1990 listed as deed no. 3 in Part
         1 of Schedule 8 (the "DEFINITIVE DEED"), as amended subsequently by the
         Deeds dated 23 October 1991, 30 January 1995 and 30 January 1996 listed
         as deeds nos. 4, 5 and 6 in Part 1 of Schedule 8.

(C)      This Deed is supplemental, inter alia, to the Deeds mentioned in
         Recitals (A) and (B) above.

(D)      The Trustee is the present trustee of the Scheme.

(E)      By virtue of Transfer Agreements dated 31 March 1999 the Trustee and
         the Principal Employer agreed to merge the Scheme and the Vodafone
         Group Directors Pension Scheme (the "VODAFONE DIRECTORS SCHEME") and
         the Vodafone Group Executive Manager and Senior Manager Pension Scheme
         (the "VODAFONE EM&SM SCHEME") by accepting a transfer from those
         Schemes of their assets and liabilities. The documents governing the
         Vodafone Directors Scheme and the Vodafone EM&SM Scheme immediately
         before the Revision Date are listed in Parts 2 and 3 of Schedule 8.

(F)      With effect from the Revision Date the Scheme has been divided into
         three sections known as the Staff Section, the Executive Manager and
         Senior Manager Section and the Directors Section respectively.

(G)      Clause 4 of the Definitive Deed provides as follows:

         THE Trustees may at any time, with the Principal Employer's consent by
         deed executed by the Principal Employer and the Trustees in the case of
         the Interim Deed, this deed or the Rules, amend (or add to) all or any
         of the trusts, powers or provisions of the Interim Deed, this deed or
         the Rules, and any such amendment or addition shall have effect from
         such time as may be specified in that deed or resolution and so that
         the time so specified
<PAGE>

         may be the date of that deed or resolution or any reasonable time
         previous or subsequent to it, so as to give the amendment or addition
         retrospective or future effect (as the case may be)

         PROVIDED THAT for so long as the Scheme is being treated as an Exempt
         Approved Scheme, any such amendment or addition shall be notified to
         the Board of Inland Revenue and, for so long as any employment is
         contracted-out by reference to the Scheme or any person is entitled to
         receive (or has accrued rights to) a Guaranteed Minimum Pension under
         the Scheme, shall not be made without the Occupational Pensions Board's
         consent if it would affect any of the manners dealt with in Part III of
         the Pensions Act.

(H)      The Principal Employer has agreed with the Trustees that the provisions
         of the Scheme as set out in the Definitive Deed (as amended) should be
         brought up to date by re-stating them in their entirety with effect
         from the Revision Date in the manner set out in this Deed, including
         the incorporation of Schedules setting out rules governing the
         membership, contributions and benefits of active members of the
         Directors Section and the Executive Manager and Senior Manager Section
         as well as the Staff Section.

(G)      The actuary appointed by the Trustee in accordance with section 47 of
         the Pensions Act 1995:-

         (1)      has certified to the Trustee for the purpose of section 67 of
                  the Pensions Act 1995 and regulation 3 of the Occupational
                  Pension Schemes (Modification of Schemes) Regulations 1996 (SI
                  1996 NO 2517) that, in his opinion, the exercise of the power
                  conferred by Clause 4 of the Definitive Deed in the manner
                  provided for in this Deed would not adversely affect any
                  member of the Scheme (without his consent) in respect of his
                  entitlement, or accrued rights, acquired before that power is
                  exercised; and

         (2)      confirmed to the Trustee for the purpose of section 37 of the
                  Pension Schemes Act 1993 and regulation 42(2) of the
                  Occupational Pension Schemes (Contracting-out) Regulations
                  1996 (SI 1996 NO 1172) that the Scheme would continue to
                  satisfy the statutory standard in accordance with section 12A
                  of the Pension Schemes Act of 1993 if the alterations provided
                  for in this Deed were to be made.

NOW THIS DEED WITNESSES the following:-

1        ADOPTION OF NEW PROVISIONS

         The Trustee in exercise of the powers conferred upon it by Clause 4 of
         the Definitive Deed and with the consent of the Principal Employer (as
         evidenced by its execution of this Deed) hereby amends and adds to the
         provisions of the Definitive Deed and the Rules with effect from the
         Revision Date by replacing them in their entirety by the provisions set
         out in the Schedules to this Deed.

                                       2
<PAGE>

2.       APPLICATION OF THE NEW PROVISIONS

         2.1      APPLICATION OF THE NEW PROVISIONS RELATING TO ADMINISTRATION

                  With effect from the Revision Date, the Scheme shall be
                  administered and managed in accordance with the Schedule 2 to
                  this Deed for all purposes.

         2.2      CONTINUED APPLICATION OF OLD RULES TO LEAVERS BEFORE THE
                  REVISION DATE

                  The entitlement to benefits of any Member, and any spouse,
                  financial dependant or dependent child of any Member, whose
                  pensionable service terminated before the Revision Date
                  together with the amount of such benefits, shall be determined
                  in accordance with such of the provisions of the Scheme, the
                  Vodafone Directors Scheme or the Vodafone EM&SM Scheme (as
                  applicable) as were in force immediately before the Revision
                  Date and applied to him or them. However, with effect from the
                  Revision Date those benefits shall be administered in
                  accordance with Schedule 2 to this Deed.

         2.3      APPLICATION OF NEW RULES

                  The benefits payable to and in respect of any Member who is in
                  pensionable service under this Scheme on the Revision Date, or
                  whose pensionable service commences on or after that date,
                  shall be determined in accordance with whichever of Schedules
                  3 to 7 to this Deed apply to him.

         2.4      CONTINUATION OF INDIVIDUAL ARRANGEMENTS

                  Any individual arrangements which were made before the
                  Revision Date by or on behalf of the Trustee with any Member
                  who is in pensionable service on the Revision Date (including
                  arrangements for the payment of voluntary contributions, and
                  arrangements concerning the benefits to be provided under the
                  Scheme in respect of any transfer payment or voluntary
                  contributions) and which remained in force immediately before
                  the Revision Date, shall continue in force on and from the
                  Revision Date as if made under the provisions of this Deed.
                  For the purpose of this sub-Clause, in the case of any Member
                  who became a Member of the Scheme on the Revision Date as a
                  result of the merger referred to in Recital (E) above, the
                  arrangements to which this sub-Clause applies shall be deemed
                  to include arrangements made with the Member by the trustees
                  of the Vodafone EM&SM Scheme or the Vodafone Directors Scheme,
                  as the case may be.

IN WITNESS of which this instrument has been duly executed as a deed on the date
first before written.

                                      3
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                       4
<PAGE>

                         VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                           SCHEDULE 1: INTERPRETATION

<TABLE>
<CAPTION>
                                                                                            Page
<S>                                                                                           <C>
1        MEMBER CATEGORIES ..................................................................   7
         1.1      Member categories: (a) for Revenue Limits purposes ........................   7
         1.2      Member categories: (b) for contracting-out purposes .......................   7

2.       DEFINED TERMS ......................................................................   7
         2.1      Defined terms in the Schedules ............................................   7
         2.2      General definitions .......................................................   7

3        OTHER RULES OF INTERPRETATION ......................................................  14
         3.1      Statutory references ......................................................  14
         3.2      Miscellaneous .............................................................  15
         3.3      Employers' discretions, rights and powers .................................  15
</TABLE>

                                       5
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                       6
<PAGE>

                         VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                           SCHEDULE 1: INTERPRETATION

1        MEMBER CATEGORIES

         1.1      MEMBER CATEGORIES: (A) FOR REVENUE LIMITS PURPOSES

                  Because of changes made to Revenue Limits by the Finance (No.
                  2) Act 1987 and the Finance Act 1989, Members fall into three
                  categories for Revenue Limits purposes as set out in the
                  Revenue Limits Rules in Schedule 6.

         1.2      MEMBER CATEGORIES: (B) FOR CONTRACTING-OUT PURPOSES

                  Members who were in Pensionable Service before 6 April 1997
                  have accrued rights to Guaranteed Minimum Pensions in respect
                  of Pensionable Service up to 5 April 1997. The rules
                  applicable to Guaranteed Minimum Pensions are summarised in
                  Schedule 7.

                  Members whose Pensionable Service commences on or after 6
                  April 1997 have no accrued rights to Guaranteed Minimum
                  Pensions except in respect of any transfer payment received by
                  the Scheme from another scheme under which the Member
                  concerned had accrued rights to Guaranteed Minimum Pensions as
                  a result of contracted-out employment prior to 6 April 1997.
                  Similarly, Members whose Pensionable Service commenced before
                  6 April 1997 have no rights to Guaranteed Minimum Pensions in
                  respect of Pensionable Service on or after that date.

2        DEFINED TERMS

         2.1      DEFINED TERMS IN THE SCHEDULES

                  Where defined terms are used only in one or other of Schedules
                  3 to 7, they are defined separately in Rule 1 of the Schedule
                  in question.

         2.2      GENERAL DEFINITIONS

                  Throughout this Deed, the following words and expressions have
                  the following meanings respectively:-

                  "ACTUARY" means the individual who is for the time being
                  appointed by the Trustees as actuary to the Scheme as provided
                  for in sub-Clause 7.2 in Schedule 2;

                  "ADMINISTRATION REGULATIONS" means the Occupational Pension
                  Schemes (Scheme Administration) Regulations 1996 (SI 1996 No.
                  1715);

                                       7
<PAGE>

                  "APPROVAL" means approval by the Inland Revenue for the
                  purposes of Chapter 1 of Part XIV of the Taxes Act;

                  "ASSIGNMENT ETC. REGULATIONS" means the Occupational Pension
                  Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations
                  1997 (SI 1997 No. 785);

                  "AUDITOR" means the individual, body corporate or partnership
                  who or which is for the time being appointed by the Trustees
                  as auditor to the Scheme as provided for in sub-Clause 7.2 in
                  Schedule 2;

                  "AUTHORISED INSURANCE COMPANY" means any insurance company of
                  the kind referred to in section 19(4)(a) of the Pension
                  Schemes Act;

                  "COMMENCEMENT DATE" means 1 November 1988;

                  "CONTRACTED-OUT BENEFITS" means benefits in respect of
                  contracted-out employment (within the meaning of section 8(1)
                  of the Pension Schemes Act) consisting of Guaranteed Minimum
                  Pensions, Protected Rights and Section 9(2B) Rights:

                  "CONTRACTED-OUT EMPLOYMENT" shall be construed in accordance
                  with section 8(1) of the Pension Schemes Act;

                  "CONTRACTED-OUT MEMBER" means a Member in relation to whose
                  employment the Scheme is a contracted-out scheme within the
                  meaning of section 7(3) of the Pension Schemes Act;

                  "CONTRACTING-OUT REQUIREMENTS" means the requirements which
                  the Trustees must comply with by reason of the Scheme being a
                  contracted-out scheme within the meaning of section 7(3) of
                  the Pension Schemes Act;

                  "CONTRACTING-OUT TRANSFER REGULATIONS" means the
                  Contracting-out (Transfer and Transfer Payment) Regulations
                  1996 (SI 1996 No. 1462);

                  "DEFERRED MEMBER" means a Member who is entitled to preserved
                  benefits under the Scheme;

                  "DEPENDANT" means, in relation to a Member:-

                  (a)      any individual who in the opinion of the Trustees is
                           financially dependent on him or dependent on him
                           because of disability, or who was so dependent at the
                           time of the Member's death or retirement; and

                  (b)      any Dependent Child of his;

                  "DEPENDENT CHILD" means, in relation to a Member:-

                  (i)      any natural child of the Member conceived before the
                           Member's death;

                  (ii)     any adoptive child of the Member; and

                                       8
<PAGE>

                  (iii)    any other child whom the Trustees in their discretion
                           determine to treat as a child of the Member for the
                           purpose of this definition;

                  who, whether or not financially dependent on him, is:-

                  (a)      under age 18; or

                  (b)      aged 18 or more but under age 21 and continuing in
                           full-time education or receiving full-time vocational
                           training; or

                  who is aged 18 or more and wholly or partly financially
                  dependent on the Member by reason of physical or mental
                  incapacity;

                  "DIRECTORS SECTION" means the Director Section of this Scheme
                  in relation to which the Rules relating to eligibility,
                  membership, contributions and benefits are set out in Schedule
                  5;

                  "DISCLOSURE REGULATIONS" means the Occupational Pension
                  Schemes (Disclosure of Information) Regulations 1996 (SI 1996
                  No. 1655);

                  "DISCRETIONARY BENEFICIARIES" is used only in Clause 22 in
                  Schedule 2 and is defined in sub-Clause 22.1;

                  "EMPLOYEE" means an employee of any of the Employers;

                  "EMPLOYER" means, in relation to a Member, whichever of the
                  Employers he is employed by;

                  "EMPLOYERS" means the Principal Employer and the Participating
                  Employers collectively;

                  "EXECUTIVE MANAGER AND SENIOR MANAGER SECTION" means the
                  Executive Manager and Senior Manager Section of this Scheme in
                  relation to which the Rules relating to eligibility,
                  membership, contributions and benefits are set out in Schedule
                  4;

                  "FINAL PENSIONABLE EARNINGS" means, in relation to a Member,
                  the greater of:-

                  (1)      the annual average of his basic earnings from his
                           Employer (and of any other earnings from his Employer
                           which are deemed by the Principal Employer to be
                           pensionable) in the thirty-six months ended on his
                           Scheme Exit Date, together with the annual average of
                           the commission and/or bonus payments received by the
                           Member from his Employer during the previous three
                           Scheme Years; and

                  (2)      the annual average of his Pensionable Earnings in any
                           three consecutive years in the ten years ended on his
                           Scheme Exit Date;

                  "FINANCIAL DEPENDANT" means, in relation to a Member, any
                  natural person (other than the Member's spouse) who, in the
                  Trustees' opinion, is wholly or partly financially dependent
                  upon that Member (or was so dependent) at the date

                                       9
<PAGE>

                  of the Member's death or retirement (as the case may be) and
                  whose relationship with the Member was in the Trustees'
                  opinion similar to that of a spouse;

                  "FORMER PROVISIONS" means the trusts, powers and provisions of
                  the Scheme from time to time in force prior to the Revision
                  Date;

                  "FUND" means the fund comprising all monies, investments and
                  other property from time to time held by the Trustees upon the
                  trusts of the Scheme;

                  "FUND MANAGER" means any person who is for the time being
                  appointed as provided for in sub-Clause 7.3 in Schedule 2 to
                  manage the investments held for the purposes of the Scheme;

                  "GMP RULES" means the rules relating to Guaranteed Minimum
                  Pensions set out in Schedule 7;

                  "GUARANTEED MINIMUM PENSION" has the same meaning as in
                  section 8(2) of the Pension Schemes Act;

                  "INLAND REVENUE" means the Commissioners of Inland Revenue;

                  "MEMBER" means:-

                  (a)      in Schedule 2, any individual who, having been
                           admitted to membership of the Scheme (on whatever
                           date and whether or not in Pensionable Service on the
                           Revision Date), remains entitled (whether
                           prospectively or actually) to any benefits from the
                           Scheme; and

                  (b)      in Schedules 3 to 5, any individual to whom those
                           Schedules apply by virtue of Rule 1 in each such
                           Schedule;

                  "MEMBER'S CONTRIBUTIONS" means contributions paid by the
                  Member to the Scheme (other than voluntary contributions) and
                  the amount of any transfer payment relating to the Member
                  which represents the Member's contributions (other than
                  voluntary contributions) to the previous scheme or
                  arrangement;

                  "MFR REGULATIONS" means the Occupational Pension Schemes
                  (Minimum Funding Requirement and Actuarial Valuations)
                  Regulations 1996 (SI 1996 No. 1536);

                  "MINIMUM TRUSTEE REQUIREMENTS" means the requirement under
                  sub-Clause 3.1 in Schedule 2 that unless a company (which need
                  not be a trust corporation) is sole Trustee, the minimum
                  number of Trustees shall be two;

                  "NORMAL PENSION AGE" is relevant only to early leavers and has
                  the meaning ascribed to it by Section 180 of the Pension
                  Schemes Act;

                  "NORMAL RETIREMENT AGE" is separately defined in Rule 1 in
                  Schedules 3, 4 and 5;

                                       10
<PAGE>

                  "PARTICIPATING EMPLOYER" means a company or firm which has
                  been admitted to participation as an employer in the Scheme in
                  accordance with sub-Clause 6.3 in Schedule 2 or the Former
                  Provisions, and whose participation has not terminated
                  pursuant to the Former Provisions or any of sub-Clauses 6.5 to
                  6.10 in Schedule 2;

                  "PENSIONABLE EARNINGS" means in relation to any Member the
                  aggregate of the following earnings:-

                  (1)      the Member's annual rate of basic pay from his
                           Employer as at the immediately preceding 1 April and
                           any other earnings which are deemed by the Principal
                           Employer to be pensionable; and

                  (2)      the annual average of any commission, bonus and other
                           fluctuating payments deemed by the Principal Employer
                           to be pensionable received by the Member from his
                           Employer during the previous three Scheme Years;

                  except that:-

                  (a)      in the case of a Member whose Service commences on a
                           date other than 1 April, it means, for the purpose of
                           the Scheme Year in which his Service commences, his
                           annual rate of basic pay from his Employer as at the
                           date on which his Service commences plus the annual
                           rate of any other earnings for that Scheme Year which
                           are deemed by the Principal Employer to be
                           pensionable; and

                  (b)      for the purpose of calculating any lump sum payable
                           on death in Pensionable Service the annual rate of
                           pay for the purpose of paragraph (1) of this
                           definition shall be taken as at the date of the
                           Member's death instead of the preceding 1 April;

                  "PENSIONABLE SERVICE" means Service which counts towards
                  benefits under the Scheme;

                  "PENSION SCHEMES ACT" means the Pension Schemes Act 1993;

                  "PENSIONS ACT" means the Pensions Act 1995;

                  "PRESERVATION REGULATIONS" means the Occupational Pension
                  Schemes (Preservation of Benefit) Regulations 1991 (SI 1991
                  No. 167);

                  "PRESERVATION REQUIREMENTS" means the requirements concerning
                  the protection of early leavers as specified in or under
                  sections 71 to 82 of the Pension Schemes Act;

                  "PRINCIPAL EMPLOYER" means Vodafone Group Plc (registered in
                  England no 1833679) or such other company or firm which for
                  the time being holds the position of principal employer for
                  the purposes of the Scheme pursuant to Clause 5 in Schedule 2;

                                       11
<PAGE>

                  "PROTECTED RIGHTS" has the same meaning as in Section 10 of
                  the Pension Schemes Act;

                  "PROTECTED RIGHTS TRANSFER REGULATIONS" means the Protected
                  Rights (Transfer Payment) Regulations 1996 (SI 1996 No 1461);

                  "QUALIFYING SERVICE" means, in relation to a Member whose
                  Pensionable Service has terminated otherwise than by death or
                  retirement with an immediate entitlement to pension from the
                  Scheme, the period which is relevant for the purpose of
                  determining whether he is entitled to a preserved pension from
                  the Scheme, and the length of which is calculated in
                  accordance with the Preservation Requirements;

                  "RACAL DIRECTORS SCHEME" means the Racal Group Executive
                  Pension Plan established by an Interim Trust Deed dated 26
                  March 1976;

                  "RACAL EM&SM SCHEME" means the Racal Group Executive Manager
                  and Senior Manager Pension Scheme established by a Declaration
                  of Trust dated 1 April 1993 and originally called The Decca
                  Limited 1968 Supplementary Scheme for Senior Executives;

                  "RACAL RBS SCHEME" means the Racal Group Retirement Scheme
                  (for weekly and hourly paid employees) established by an
                  Interim Deed dated 27 April 1978;

                  "RACAL STAFF SCHEME" means the Racal Group Staff Pension and
                  Life Assurance Scheme established by a Trust Deed dated 23
                  February 1962 and originally called the Radiotel Group Pension
                  Fund;

                  "REVENUE LIMITS" means the limits on benefits and
                  contributions from time to time imposed by the Inland Revenue
                  as a condition of Approval, of which brief details are set out
                  in the Revenue Limits Rules;

                  "REVENUE LIMITS RULES" means the rules set out in Schedule 6;

                  "REVISION DATE" means 1 April 1999;

                  "RPI" means the general index of retail prices (for all items)
                  published by the Office for National Statistics, and if that
                  index is not published for a month which is relevant for the
                  purposes of any provision of the Scheme, that provision shall
                  be construed as referring to any substituted index or index
                  figures published by that Office;

                  "RULES" means the rules of the Scheme relating to membership,
                  Members' contributions and benefits from time to time in
                  force, consisting of the rules set out in Schedules 3 to 7 to
                  this Deed as amended from time to time pursuant to Clause 24
                  in Schedule 2;

                  "SCHEDULE" means, except where the context requires otherwise,
                  a schedule to this Deed;

                                       12
<PAGE>

                  "SCHEDULE OF CONTRIBUTIONS" means the schedule to be prepared,
                  maintained and from time to time revised by the Trustees
                  pursuant to section 58 of the Pensions Act;

                  "SCHEME" means the Vodafone Group Pension Scheme established
                  by the Interim Trust Deed dated 10 October 1988 listed as
                  document no. 1 in Part 1 of Schedule 8 to which this Deed is
                  supplemental;

                  "SCHEME EXIT DATE" means, in relation to any Member in
                  Pensionable Service on or after the Revision Date, the
                  earliest of the following dates:-

                  (1)      when he retires from Service;

                  (2)      when he leaves Service otherwise than by reason of
                           deat or retirement;

                  (3)      when he withdraws from active membership of the
                           Scheme pursuant to sub-Rule 2.7 in Schedules 3, 4 or
                           5;

                  (4)      when he dies, if he dies in Service;

                  (5)      his Normal Retirement Age;

                  and the Trustees may rely on a statement from the Member's
                  Employer as to the date when the Member's Service terminates;

                  "SCHEME YEAR" MEANS:-

                  (a)      a period of 12 months commencing on 1 April in any
                           year or on such other date as the Trustees shall
                           select; or

                  (b)      such other period (if any) exceeding 6 months but not
                           exceeding 18 months as is selected by the Trustees;-

                           (i)      in respect of the year in which the Scheme
                                    terminates; or

                           (ii)     in connection with a variation of the date
                                    on which the Scheme Year is to commence;

                  "SECTION 9(2B) RIGHTS" has the same meaning as in regulation 1
                  of the Contracting-out Transfer Regulations;

                  "SERIOUS ILL-HEALTH" means, in relation to a Member, physical
                  or mental deterioration which in the opinion of the Trustees
                  is sufficiently serious to prevent the Member from following
                  his normal employment, or which seriously impairs his earning
                  capacity, and does not mean simply a decline in energy or
                  ability;

                  "SERVICE means employment by any of the Employers, or, in
                  relation to any period before the Commencement Date,
                  employment by Racal Electronics Plc or any of its
                  subsidiaries;

                                       13
<PAGE>

                  "SHORT SERVICE BENEFIT" means the benefit which the Scheme
                  must provide in respect of a Member in order to comply with
                  the Preservation Requirements where;-

                  (1)      the Member's Pensionable Service is terminated by him
                           leaving Service or opting out of the Scheme whilst
                           remaining in Service; and

                  (2)      he has by then completed the period of qualifying
                           servic required by the Preservation Requirements
                           applicable to him when his Pensionable Service
                           terminated or a transfer payment in respect of his
                           rights under a personal pension scheme (within the
                           meaning of the Pensions Schemes Act) has been made to
                           the Scheme;

                  "STAFF SECTION" means the Staff Section of this Scheme in
                  relation to which the Rules relating to eligibility,
                  membership, contributions and benefits are set out in Schedule
                  3;

                  "TAXES ACT" means the Income and Corporation Taxes Act 1988;

                  "TAX YEAR" means a year commencing on 6 April;

                  "TERMINATION DATE" means the date on which the Scheme
                  terminates in accordance with Clause 25 in Schedule 2;

                  "TRIVIALITY LIMIT" means, in relation to a Member's pension,
                  that the total value of all his benefits from occupational
                  pensions schemes providing benefits in respect of his
                  employment with his Employer is in the opinion of the Trustees
                  less than a pension of (pound)260 per annum or such higher
                  amount as may be prescribed by regulations made under section
                  77(5) of the Pension Schemes Act and "TRIVIAL" means within
                  the Triviality Limit;

                  "TRUST DEEDS" means the deeds which govern or relate to the
                  Scheme;

                  "TRUSTEE" means a trustee of the Scheme and where the context
                  allows the "TRUSTEES" means the trustees or trustee for the
                  time being of the Scheme;

                  "VODAFONE DIRECTORS SCHEME" means the Vodafone Group Directors
                  Pension Scheme Established by an Interim Trust Deed dated 10
                  October 1988 and originally called the Racal Telecom Directors
                  Pension Scheme;

                  "VODAFONE EM&SM SCHEME" means the Vodafone Group Executive
                  Manager and Senior Manager Pension Scheme established by an
                  Interim Trust Deed dated 10 October 1988 and originally called
                  the Racal Telecom Executive Manager and Senior Manager Pension
                  Scheme.

3        OTHER RULES OF INTERPRETATION

         3.1      STATUTORY REFERENCES

                  Any reference in this Deed to any Act of Parliament or any
                  Part, Chapter or Section of, or any Regulation made under any
                  such Act shall include any statutory

                                       14
<PAGE>

                  modification or re-enactment thereof for the time being in
                  force, and, in respect of any period prior to the date of this
                  Deed, any statutory predecessor than in force.

         3.2      MISCELLANEOUS

                  Except where the context requires otherwise, in this Deed:-

                  (1)      words which appear in the singular shall include the
                           plural; and

                  (2)      words which appear in the masculine shall include the
                           feminine.

         3.3      EMPLOYERS' DISCRETIONS, RIGHTS AND POWERS

                  The Principal Employer and every other Employer may exercise
                  any or all of the discretions, rights and powers which are
                  exercisable by it under the Scheme for its own sole and
                  absolute benefit, except that the Principal Employer shall
                  have regard to the interests of the Members and other
                  beneficiaries of the Scheme when exercising its powers to
                  appoint and remove Trustees.

                                       15
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                       16
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                       SCHEDULE 2: OPERATION OF THE SCHEME

PART 1:  INTRODUCTION......................................................   23

1        CONSITITUTION OF THE SCHEME.......................................   23
         1.1   Scheme name.................................................   23
         1.2   Declaration of trust........................................   23
         1.3   Irrevocability..............................................   23
         1.4   Purpose.....................................................   23
         1.5   Revenue limits..............................................   23
         1.6   Contracting-out.............................................   23

2        BENEFITS TO BE PROVIDED BY THE SCHEME.............................   24
         2.1   Benefits in relation to Members.............................   24
         2.2   Admission to membership.....................................   24
         2.3   Membership on special terms.................................   24
         2.4   Closure of Scheme to new Members............................   24

PART 2:  THE TRUSTEES......................................................   25

3        APPOINTMENT AND TERMINATION OF APPOINTMENT........................   25
         3.1   Number......................................................   25
         3.2   Member-nominated trustees or directors requirements.........   25
         3.3   Appointment.................................................   25
         3.4   Termination of appointment..................................   25
         3.5   Resignation.................................................   26
         3.6   Removal.....................................................   26
         3.7   Appointment of Principal Employer as Trustee................   26
         3.8   Discharge upon termination of appointment...................   26
         3.9   Vesting following termination of appointment................   26

4        OTHER PROVISIONS APPLICABLE TO TRUSTEES...........................   26
         4.1   Remuneration and personal expenses..........................   26
         4.2   Liability...................................................   27
         4.3   Interests of Trustees.......................................   28
         4.4   Retention of Scheme benefits................................   28
         4.5   Sole corporate Trustee......................................   28
         4.6   Proceedings of Trustees.....................................   28

PART 3:  THE EMPLOYERS.....................................................   31

5        THE PRINCIPAL EMPLOYER............................................   31
         5.1   Substitution of principal employer..........................   31
         5.2   How substitution is effected................................   31
         5.3   Effective date of substitution..............................   31

                                       17
<PAGE>

         5.4   Deed of substitution........................................   31
         5.5   Insolvency or winding up of Principal Employer..............   32
         5.6   Effect of Principal Employer's insolvency or winding up.....   32
         5.7   Effect of subsequent substitution of Principal Employer.....   32

6        PARTICIPATING EMPLOYERS...........................................   33
         6.1   Eligibility to participate: (1) on a permanent basis........   33
         6.2   Eligibility to participate: (2) on a temporary basis........   33
         6.3   Admission to participation..................................   33
         6.4   Participating Employer ceasing to be associated ............   34
         6.5   Termination of participation: (1) by Principal Employer.....   34
         6.6   Termination of participation: (2) by Participating
               Employer....................................................   34
         6.7   Termination of participation: (3) by the Trustees...........   35
         6.8   Other circumstances resulting in termination of
               participation...............................................   35
         6.9   Effect of termination of participation......................   36
         6.10  Partial winding-up..........................................   36

PART 4:  THE PROFESSIONAL ADVISERS.........................................   38

7        APPOINTMENT OF PROFESSIONAL ADVISERS..............................   38
         7.1   Meaning of "professional adviser"...........................   38
         7.2   Auditor and actuary.........................................   38
         7.3   Fund Manager................................................   38
         7.4   Eligibility for appointment as auditor or actuary...........   39
         7.5   Eligibility for appointment as other professional adviser...   39
         7.6   Trustees to rely on their own professional advisers.........   39

8        MANNER AND TERMS OF APPOINTMENT OF PROFESSIONAL ADVISERS..........   39
         8.1   Manner of appointment and removal...........................   39
         8.2   Terms of appointment: (a) generally.........................   39
         8.3   Terms of appointment: (b) fund manager......................   40
         8.4   Terms of appointment: (c) custodians and nominees...........   40

PART 5:  SCHEME ADMINISTRATION.............................................   42

9        TRUSTEES' ADMINISTRATIVE POWERS...................................   42
         9.1   Specific powers and general power...........................   42
         9.2   Appointment of additional account signatories...............   42
         9.3   Bank accounts...............................................   42
         9.4   Borrowing...................................................   43
         9.5   Costs and expenses..........................................   43
         9.6   Debts and claims............................................   43
         9.7   Delegation..................................................   43
         9.8   Donations and bequests......................................   44
         9.9   Employment of staff and agents..............................   44
         9.10  Guarantees and indemnities..................................   44
         9.11  Insurance...................................................   44
         9.12  Legal proceedings...........................................   45
         9.13  Paying agents...............................................   45
         9.14  Questions and matters of doubt..............................   45
         9.15  Questions of fact...........................................   45

                                       18
<PAGE>

         9.16  Revenue undertakings........................................   45
         9.17  Security over assets of the Fund............................   46
         9.18  Specialist advice...........................................   46
         9.19  Tax.........................................................   46
         9.20  Withholding or suspending payment of benefits...............   46

10       ACCOUNTS, RECORDS AND AUDIT.......................................   47
         10.1  Accounts and records........................................   47
         10.2  Audited records.............................................   47
         10.3  Disclosure of information to auditor........................   47

11       PROVISION OF INFORMATION..........................................   47
         11.1  Provision of information and documents by the Trustees......   47
         11.2  Provision of information by Employers.......................   48
         11.3  Provision of information by Members and others..............   48

12       OTHER MISCELLANEOUS PROVISIONS....................................   48
         12.1  Protection of third parties: (a) receipts...................   48
         12.2  Protection of third parties: (b) purchasers and lenders.....   48
         12.3  Notices.....................................................   49
         12.4  Termination of employment...................................   49
         12.5  Resolution of disputes......................................   49

PART 6:  THE FUND..........................................................   50

13       CONTRIBUTIONS TO THE FUNDS........................................   50
         13.1  Members' contributions......................................   50
         13.2  Employers' contributions: (a) amount and payment intervals..   50
         13.3  Employers' contributions: (b) termination...................   50

14       SCHEME EXPENSES...................................................   50
         14.1  Payment out of Fund.........................................   50
         14.2  Payment by Employers........................................   51

15       INVESTMENT OF THE FUND............................................   51
         15.1  Retention of monies in bank account etc.....................   51
         15.2  Power of investment.........................................   51
         15.3  Ancillary investment powers.................................   51
         15.4  Pooled investments..........................................   52
         15.5  Compliance with legal requirements..........................   52
         15.6  Appointment of Fund Manager.................................   52

16       SAFE CUSTODY OF THE FUND..........................................   53
         16.1  Trustees' duty to safeguard assets..........................   53
         16.2  Appointment of custodians and nominees......................   53
         16.3  Professional adviser requirements...........................   53

17       SURPLUSES AND DEFICITS............................................   53
         17.1  Trustees' duty to obtain actuarial valuations...............   53
         17.2  Trustees' power to obtain actuarial valuations..............   53

                                       19
<PAGE>

         17.3  Surplus revealed by actuarial valuation.....................   54
         17.4  Deficit revealed by actuarial valuation.....................   54

PART 7:  TRANSFERS TO AND FROM THE FUND....................................   55

18       ACCEPTANCE OF TRANSFER PAYMENTS...................................   55
         18.1  Power to accept transfer payments...........................   55
         18.2  Inland Revenue requirements.................................   55
         18.3  Contracting-out requirements................................   55
         18.4  Scheme benefits in return for transfer payments.............   56
         18.5  Information to be obtained in respect of transfer payments..   56
         18.6  Transferred-in Members' contributions.......................   56
         18.7  Transfers of assets.........................................   57

19       MAKING TRANSFER PAYMENTS..........................................   57
         19.1  Power to make payments......................................   57
         19.2  Inland Revenue requirements.................................   57
         19.3  Contracting-out requirements................................   57
         19.4  Preservation requirements...................................   58
         19.5  Effect of Member exercising right to cash equivalent........   58
         19.6  Member's consent to transfer out............................   59
         19.7  Amount to be applied in making transfer payment ............   59
         19.8  Bulk transfers..............................................   59
         19.9  Reliance on Actuary's advice................................   59
         19.10 Benefits under the other scheme: (a) transfer with consent..   60
         19.11 Benefits under the other scheme: (b) transfer without
               consent.....................................................   60
         19.12 Discharge of Trustees on transfer out.......................   60
         19.13 Power to transfer out following death of a Member...........   60
         19.14 Transfer of assets..........................................   61
         19.15 Merger with another scheme..................................   61

20       BUYING OUT BENEFITS...............................................   61
         20.1  Power to buy out............................................   61
         20.2  Benefits to be provided on buying out.......................   62
         20.3  Amount to be applied in buying out..........................   62
         20.4  Inland Revenue requirements.................................   62
         20.5  Contracting-out requirements................................   63
         20.6  Preservation requirements...................................   63
         20.7  Member's consent to buy-out.................................   63
         20.8  Discharge of Trustees on buying out.........................   63
         20.9  Effect of Member exercising right to cash equivalent........   64
         20.10 Power to buy out following death of a Member................   64

PART 8:  PROVISION OF BENEFITS.............................................   65

21       AUGMENTATION: ADDITIONAL OR NEW BENEFITS..........................   65
         21.1  Request from Employers for augmentation.....................   65
         21.2  Trustees' power of augmentation.............................   65

22       TRUSTEES' DISCRETION AS TO LUMP SUM DEATH BENEFITS................   65
         22.1  Interpretation..............................................   65

                                       20
<PAGE>

         22.2  Tustees' discretion.........................................   66

23       MISCELLANEOUS PROVISIONS CONCERNING BENEFITS......................   67
         23.1  Inalienability of benefits subject to exception.............   67
         23.2  Forfeiture prohibited subject to exceptions.................   68
         23.3  Monetary obligation due to Employer.........................   69
         23.4  Monetary obligation due or loss caused to Scheme............   70
         23.5  Payments to infants and persons under incapacity............   72
         23.6  Polygamous marriages........................................   73

PART 9:  AMENDMENT AND TERMINATION.........................................   74

24       AMENDMENT.........................................................   74
         24.1  Power of amendment..........................................   74
         24.2  Effective date of amendment.................................   74
         24.3  Trustees' statutory power of amendment......................   74
         24.4  Statutory restrictions on power of amendment................   74

25       TERMINATION OF THE SCHEME.........................................   74
         25.1  Termination by the Principal Employer.......................   74
         25.2  Termination by the Trustees.................................   74
         25.3  Perpetuity period...........................................   75
         25.4  Termination at or following end of perpetuity period........   75
         25.5  Certain consequences of termination.........................   76
         25.6  Continuation of Scheme as paid-up and closed scheme
               following termination.......................................   76
         25.7  Winding up following termination............................   76
         25.8  Notice of termination to Members and others.................   76

26       WINDING UP........................................................   77
         26.1  Commencement................................................   77
         26.2  Powers and discretions......................................   77
         26.3  Members' rights.............................................   77
         26.4  Realisation of assets.......................................   77
         26.5  Creation of a reserve for costs and expenses................   78
         26.6  Order of priority for securing Scheme's liabilities.........   78
         26.7  Valuing the Scheme's liabilities............................   78
         26.8  Deficit on winding up.......................................   78
         26.9  Surplus on winding up.......................................   78
         26.10 Power to secure liabilities on an interim basis.............   79
         26.11 Manner in which liabilities to be secured...................   79
         26.12 Information to Members and others concerning winding up.....   79
         26.13 Trustees' general power on winding up.......................   79

                                       21
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                       22
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                       SCHEDULE 2: OPERATION OF THE SCHEME

                              PART 1: INTRODUCTION

1        CONSTITUTION OF THE SCHEME

         1.1      SCHEME NAME

                  With effect from the Revision Date the name of the Scheme
                  shall be the "Vodafone Group Pension Scheme".

         1.2      DECLARATION OF TRUST

                  The Trustees shall hold the assets of the Scheme upon, with
                  and subject to the trusts, powers and provisions set out or
                  referred to in this Deed.

         1.3      IRREVOCABILITY

                  The trusts of the Scheme are irrevocable.

         1.4      PURPOSE

                  The purpose of the Scheme shall be the provision of such
                  relevant benefits (as defined in section 612 of the Taxes Act)
                  to such persons (being employees or former employees of the
                  Employers or other persons having some connection with them)
                  as may be set out in or determined in accordance with this
                  Deed.

         1.5      REVENUE LIMITS

                  All benefits provided by the Scheme and all contributions paid
                  by Members to the Scheme shall be restricted to such extent
                  (if any) as may be necessary to comply with Revenue Limits.

         1.6      CONTRACTING-OUT

                  The Scheme is designed to be contracted-out of the state
                  earnings related pension scheme on a salary-related basis in
                  relation to the employment of Members in Pensionable Service
                  by virtue of satisfying section 9(2) of the Pension Schemes
                  Act. Accordingly:-

                  1.6.1    in relation to any Member's Pensionabl Service before
                           6 April 1997, it is designed to satisfy the
                           conditions of section 9(2A) (Guaranteed Minimum
                           Pensions); and

                  1.6.2    in relation to any Member's Pensionabl Service on or
                           after 6 April 1997, it is designed to satisfy the
                           conditions of section 9(2B) (statutory standard and
                           reference scheme).

                                       23
<PAGE>

2        BENEFITS TO BE PROVIDED BY THE SCHEME

         2.1      BENEFITS IN RELATION TO MEMBERS

                  The benefits provided by the Scheme shall be payable to or in
                  respect of Members.

         2.2      ADMISSION TO MEMBERSHIP

                  On and after the Revision Date Employees shall be admitted to
                  membership in accordance with Rule 2 in whichever of Schedules
                  3, 4 or 5 is applicable to him.

                  In addition, the Trustees shall have power, with the Principal
                  Employer's consent, to admit (or re-admit) to membership of
                  the Scheme any person who is entitled or prospectively
                  entitled to benefits under any other scheme or arrangement if
                  the admission (or re-admission) of such person would not
                  prejudice the Scheme's Approval.

         2.3      MEMBERSHIP ON SPECIAL TERMS

                  If requested to do so by the Principal Employer, the Trustees
                  may grant any Employee or any other person (in either case
                  whether or not already a Member) membership of the Scheme on
                  special terms as to any contributions to be paid by him or the
                  benefits to be provided for and in respect of him which differ
                  in any respect from the terms of membership set out in
                  Schedules 3, 4 or 5 except that such special terms must comply
                  with the Revenue Limits Rules and, if the Member is a
                  Contracted-out Member, the Contracting-out Requirements. Any
                  special terms which may apply to a Member by virtue of this
                  sub-Clause shall only apply when set out in writing in
                  memorandum or other document signed by or on behalf of the
                  Trustees.

         2.4      CLOSURE OF SCHEME TO NEW MEMBERS

                  The Principal Employer may by notice in writing to the
                  Trustees at any time close the Scheme to new Members; and with
                  effect from the date of such notice, no further persons shall
                  be admitted to membership.

                                       24
<PAGE>

                              PART 2: THE TRUSTEES

3.       APPOINTMENT AND TEMRINATION OF APPOINTMENT

         3.1      NUMBER

                  A company (which need not be a trust corporation) may be the
                  sole Trustee. Unless a company is the sole Trustee or one of
                  the Trustees, the minimum number of Trustees shall be two.
                  There shall be no maximum number of Trustees.

         3.2      MEMBER-NOMINATED TRUSTEES OR DIRECTORS REQUIREMENTS

                  For so long as a company is a sole Trustee, it must comply
                  with sections 18 to 21 of the Pensions Act with regard to
                  member-nominated directors, insofar as those sections are
                  applicable to the Scheme.

                  If a company ceases to be sole Trustee, the Trustees must
                  comply with sections 16 to 21 of the Pensions Act with regard
                  to member-nominated trustees, insofar as those section are
                  applicable to the Scheme.

         3.3      APPOINTMENT

                  Subject to sub-Clause 3.2, the Principal Employer shall have
                  the power to appoint new and additional Trustees. The power
                  shall be exercised by deed of appointment to which the parties
                  shall be the Principal Employer, the continuing Trustees and
                  the new or additional Trustee(s).

         3.4      TERMINATION OF APPOINTMENT

                  A Trustee shall cease to be a Trustee in the following
                  circumstances:-

                  3.4.1    if, being an individual, he dies;

                  3.4.2    if he resigns from his office in accordance with
                           sub-Clause 3.5;

                  3.4.3    if he is removed from his office in accordance with
                           sub-Clause 3.6;

                  3.4.4    if he becomes prohibited by law from being a trustee
                           (including if he becomes disqualified for being a
                           trustee in accordance with sections 29 and 30 of the
                           Pensions Act);

                  3.4.5    if he becomes bankrupt or makes any arrangement or
                           composition with his creditors generally; or

                  3.4.6    if he is, or may be, suffering from mental disorder
                           and either:-

                           (a)      he is admitted to hospital in pursuance of
                                    an application for admission for treatment
                                    under the Mental Health Act 1983 or, in
                                    Scotland, an application for admission under
                                    the Mental Health (Scotland) Act 1960, or

                                       25
<PAGE>

                           (b)      an order is made by a court having
                                    jurisdiction (whether in the United Kingdom
                                    or elsewhere) in matters concerning mental
                                    disorder for his detention or for the
                                    appointment of a receiver, curator bonis or
                                    other person to exercise powers with respect
                                    to his property or affairs.

         3.5      RESIGNATION

                  Any Trustee may resign from office by serving notice of
                  resignation on both the Principal Employer and the other
                  Trustees (if any). The period of notice required shall be one
                  month or such lesser period (including summary notice) as the
                  Principal Employer and the other Trustees (if any) may agree
                  to accept.

         3.6      REMOVAL

                  Subject to sub-Clause3.2, the Principal Employer shall have
                  power to remove any Trustee or Trustees from office for any
                  reason whatsoever provided that immediately following such
                  removal the Minimum Trustee Requirement will be satisfied. The
                  power shall be exercised by deed of removal executed by the
                  Principal Employer.

         3.7      APPOINTMENT OF PRINCIPAL EMPLOYER AS TRUSTEE

                  If upon any Trustee ceasing to be a Trustee the Minimum
                  Trustee Requirement is not satisfied, the Principal Employer
                  shall thereupon become the Trustee (if there would otherwise
                  be no Trustee at all) or one of the Trustees (if otherwise
                  there would be a sole individual Trustee) but it shall be
                  under a duty to appoint another person in its place as soon as
                  reasonably practicable thereafter consistently with the
                  requirements referred to in sub-Clause 3.2 insofar as it is
                  applicable to the Scheme.

         3.8      DISCHARGE UPON TERMINATION OF APPOINTMENT

                  Each Trustee shall be discharged from the trusts of the Scheme
                  upon ceasing to be a Trustee in accordance with the Clause,
                  but such discharge shall be without prejudice to any liability
                  the discharged Trustee may have for any breach of trust
                  previously committed by him.

         3.9      VESTING FOLLOWING TERMINATION OF APPOINTMENT

                  Each Trustee shall on and after ceasing to be a Trustee do all
                  such acts, matters and things as the continuing and any new or
                  additional Trustees may require in order to vest in them the
                  assets of the Scheme.

4.       OTHER PROVISIONS APPLICABLE TO TRUSTEES

         4.1      REMUNERATION AND PERSONAL EXPENSES

                  Each of the Trustees shall be entitled:-

                                       26
<PAGE>

                  4.1.1    to charge and be paid such fees or remuneration (if
                           any) for his or its services in connection with the
                           Scheme as he or it may from time to time agree with
                           the Principal Employer;

                  4.1.2    to be paid such fees or remuneration out of the Fund
                           unless (a) he or it agrees with the Principal
                           Employer that such fees or remuneration shall be paid
                           by the Principal Employer or (b) notwithstanding such
                           an agreement, the Principal Employer commits any
                           breach of its obligation to pay;

                  4.1.3    to retain beneficially any brokerage, commission,
                           fee, remuneration or dividend (other than a dividend
                           payable in respect of an asset of the Fund) payable
                           to him or it whether directly or indirectly (and so
                           that his entitlement shall apply also to any firm of
                           which the Trustee is a partner and to any company
                           which is a subsidiary of or associated with the
                           Trustee or in which the Trustee is interested,
                           whether as officer or shareholder);

                  but no amount may be paid under this sub-Clause if and to the
                  extent that paying it would contravene section 31 of the
                  Pensions Act.

         4.2      LIABILITY

                  The following provisions shall apply to the liability of the
                  Trustees for any beach of any of their obligations:-

                  4.2.1    No Trustee shall be responsible, chargeable or liable
                           in any manner whatsoever for (or in respect of) any
                           loss of, nor for any depreciation in (or default
                           upon), any of the investments, securities, stocks or
                           policies in which the moneys and assets of the Fund
                           (or any part of it) may at any time be invested in
                           accordance with the provisions of this Deed, nor for
                           any delay which may occur (from whatever cause) in
                           the investment of any moneys belonging to it, nor for
                           the safety of any securities or documents of title
                           deposited by the Trustees for safe custody, nor for
                           the exercise of any discretionary power conferred on
                           the Trustees by the Trust Deeds (including any act or
                           omission by any agent, staff or delegate appointed by
                           the Trustees), nor for anything else except wilful
                           default on the part of the Trustee who is sought to
                           be made liable.

                  4.2.2    As required by section 33 of the Pensions Act,
                           sub-Clause 4.2.1 does not exclude or restrict the
                           liability of the Trustees for breach of an obligation
                           under any rule of law to take care or exercise skill
                           in the performance of any investment functions.

                  4.2.3    Notwithstanding sub-Clause 4.2.2, and as permitted by
                           section 34(6) of the Pensions Act, the exclusion or
                           restriction of the liability of the Trustees by sub-
                           Clause 4.2.1 shall apply to any liability of the
                           Trustees resulting from the acts or defaults of a
                           Fund Manager in the exercise of a discretion
                           delegated to him under section 34(5)(b) of the
                           Pensions Acts where the Trustees have taken all such
                           steps as are reasonable to satisfy themselves (or the
                           person who made the

                                       27
<PAGE>

                           delegation on their behalf has taken all such steps
                           as are reasonable to satisfy himself):-

                           (1)      that the Fund Manager has the appropriate
                                    knowledge and experience for managing the
                                    investments of the Scheme; and

                           (2)      that he is carrying out his work competently
                                    and complying with section 36 of the
                                    Pensions Act.

         4.3      INTERESTS OF TRUSTEES

                  No performance of the duties or exercise of the powers and
                  discretions of the Trustees shall be invalidated or questioned
                  on the ground that any or all of the Trustees or their
                  secretary (or, in the case of a corporate Trustee, any
                  director, officer or employee of the Trustee) had a direct or
                  indirect personal interest in the manner or consequence of
                  such performance or exercise.

         4.4      RETENTION OF SCHEME BENEFITS

                  No Trustee and no director, officer or employee of a corporate
                  Trustee shall be precluded from membership of the Scheme, and
                  any Trustee and any director, officer or employee of a
                  corporate Trustee who becomes a Member shall be entitled to
                  retain for his own absolute benefit any sums payable to him as
                  a result of his membership of the Scheme.

         4.5      SOLE CORPORATE TRUSTEE

                  For so long as a company (whether or not a trust corporation)
                  is a sole Trustee, the board of directors or other governing
                  body of the Trustee acting in accordance with its memorandum
                  and articles of association or other instrument constituting
                  or defining its constitution, or any person or persons duly
                  authorised by such board or body, shall be competent to
                  perform all the duties and exercise all the powers and
                  discretions vested in the Trustees by the Trust Deeds.

         4.6      PROCEEDING OF TRUSTEES

                  The following provisions shall apply if there is more than one
                  Trustee.

                  4.6.1    Meetings: A meeting of the Trustees which has been
                           duly convened and held and at which a quorum is
                           present throughout shall be competent to perform all
                           the duties and exercise all the powers and
                           discretions vested in them by the Trust Deeds and all
                           decisions taken at any such meeting shall bind all
                           the Trustees.

                  4.6.2    Convention meetings: Any Trustee may at any time
                           convene a meeting of the Trustees by giving notice of
                           such meeting to the other Trustees.

                  4.6.3    Notice of meetings: Notice of any occasion at which
                           decisions may be taken by agreement of a majority of
                           Trustees must comply with the

                                       28
<PAGE>

                           requirements of section 32 of the Pensions Act and
                           regulations made under it. As at the date of this
                           Deed, those requirements are set out in that section
                           and regulations 9 and 10 of the Administration
                           Regulations and are that:-

                           (a)      unless the occasion is one on which it is
                                    necessary as a matter of urgency to make a
                                    decision, notice must be given to each
                                    Trustee to whom it is reasonably practicable
                                    to give such notice; and

                           (b)      unless the Trustees agree otherwise, the
                                    notice must (i) specify the date, time and
                                    place of the occasion and (ii) be sent to
                                    the last known address of each Trustee no
                                    later than 10 business days before the
                                    occasion.

                  4.6.4    Quorum: The quorum for any meeting of which notice
                           has been given to all the Trustees shall be two of
                           the Trustees present in person or by proxy.

                  4.6.5    Voting: Each of the Trustees shall be entitled to
                           cast one vote on any issue which may arise at any
                           meeting. Where there are three or more Trustees
                           present at a meeting all questions shall be decided
                           by a simple majority of votes of the Trustees present
                           and voting. In the event of an equality of votes the
                           chairman (if any) shall have a casting vote.

                  4.6.6    Chairman: The Trustees may from time to time nominate
                           one of their number to take the chair at meetings of
                           the Trustees. In the event of an equality of votes on
                           the election of a chairman, he shall be chosen by
                           lot. If for any reason the chairman is unable to
                           attend any meeting, the Trustees present may nominate
                           one of their number to take the chair at that
                           meeting.

                  4.6.7    Written resolutions: A written resolution signed by
                           or on behalf of all the Trustees, or by a majority of
                           the Trustees if notice of such resolution has been
                           given to all of them, shall be effective as if it had
                           been passed at a meeting of the Trustees duly
                           convened and held pursuant to the preceding
                           sub-Clauses of this Clause. Such a resolution may
                           consist of two or more documents in the same form
                           each signed by or on behalf of one or more of the
                           Trustees.

                  4.6.8    Representation of a corporate Trustee: If there is
                           more than one Trustee and any of the Trustees is a
                           company, such company may by resolution of its
                           directors or other governing body authorise such
                           person as it thinks fits to act as its representative
                           at any meeting of the Trustees. Such person shall be
                           entitled to do all such acts, matters and thing on
                           behalf of the corporate Trustee he represents as that
                           corporate Trustee would be entitled to do if it were
                           an individual.

                  4.6.9    Secretary: The Trustees may appoint a secretary (who
                           may be one of their number) to assist them in the
                           performance of their duties and the exercise of their
                           powers and discretions and to keep minutes of all

                                       29
<PAGE>

                           meetings of the Trustees. Such a secretary may be
                           removed by the Trustees giving him notice in writing
                           to that effect.

                  4.6.10   Further regulations: Subject to the preceding
                           sub-Clauses of this Clause the Trustees shall be
                           entitled to make their own regulations for the
                           conduct of their business and meetings.

                                       30
<PAGE>

                              PART 3: THE EMPLOYERS

5        THE PRINCIPAL; EMPLOYER

         5.1      SUBSTITUTION OF PRINCIPAL EMPLOYER

                  With the consent of the Trustees and subject to the approval
                  of the Inland Revenue any other company or firm may be
                  substituted for the Principal Employer as the principal
                  employer in relation to the Scheme.

         5.2      HOW SUBSTITUTION IS EFFECTED

                  Any substitution of principal employer pursuant to sub-Clause
                  5.1 shall be effected by a deed of substitution between (1)
                  the company or firm currently holding the position of
                  Principal Employer (referred to in the remainder of the Clause
                  as the "old Principal Employer"), (2) the company or firm to
                  be substituted (referred to in the remainder of this Clause as
                  the "new Principal Employer") and (3) the Trustees.

         5.3      EFFECTIVE DATE OF SUBSTITUTION

                  Any such substitution may be with effect from the date of the
                  deed to be entered into pursuant to sub-Clause 5.2 or from a
                  later date or may be deemed to be with effect from any earlier
                  date, then (unless the deed of substitution provides
                  otherwise) the new Principal Employer shall be liable for the
                  acts and defaults of the old Principal Employer under the
                  Scheme from the date with effect from which the substitution
                  is deemed to be made as if such acts and defaults were its own
                  and shall indemnify the old Principal Employer accordingly.

         5.4      DEED OF SUBSTITUTION

                  The deed of substitution to be entered into pursuant to
                  sub-Clause 5.2:-

                  5.4.1    shall contain a covenant by the new Principal
                           Employer in favour of the old Principal Employer and
                           the Trustees to observe and perform the provisions of
                           the Scheme applicable to the principal employer and
                           generally to be bound by the provisions of the
                           Scheme;

                  5.4.2    shall contain a declaration as to the date with
                           effect from which the substitution is to take place,
                           or to be deemed to have taken place; and

                  5.4.3    may contain such other provisions as the parties to
                           it may agree including provisions dealing with
                           liability as between the old Principal Employer and
                           the new Principal Employer as principal employer
                           prior to the date of the deed.

                                       31
<PAGE>

         5.5      INSOLVENCY OR WINDING UP OF PRINCIPAL EMPLOYER

                  Sub-Clause 5.6 applies where:-

                  5.5.1    a receiver is appointed in respect of the whole or
                           any part of the Principal Employer's property (in
                           which context "receiver" means any receiver, manager,
                           administrative receiver or the official receiver);

                  5.5.2    an administration order is made in relation to the
                           Principal Employer pursuant to section 8 of the
                           Insolvency Act 1986;

                  5.5.3    the Principal Employer passes a resolution for
                           voluntary winding up and the winding up is a
                           creditors' voluntary winding up within the meaning of
                           section 90 of the Insolvency Act 1986;

                  5.5.4    the winding up of the Principal Employer having
                           commenced as a members' voluntary winding up becomes
                           a creditors' voluntary winding up in accordance with
                           section 96 of the Insolvency Act 1986; or

                  5.5.5    a liquidator of the Principal Employer is appointed
                           provisionally pursuant to section 135 of the
                           Insolvency Act 1986; or

                  5.5.6    an order for the winding up the Principal Employer is
                           made by the Court.

         5.6      EFFECT OF PRINCIPAL EMPLOYER'S INSOLVENCY OR WINDING UP

                  Where by virtue of sub-Clause 5.5, this sub-Clause applies:-

                  5.6.1    in case of any power or discretion vested in the
                           Trustees by the Trust Deeds which is exercisable only
                           with the Principal Employer's consent or approval,
                           that consent or approval shall cease to be required;

                  5.6.2    the Principal Employer shall cease to have the powers
                           of appointment and removal of Trustees vested in it
                           by Clause 3 of this Schedule and instead the
                           surviving or continuing Trustee or Trustees, or the
                           personal representatives of the last surviving or
                           continuing Trustee, may exercise the powers of
                           appointing new or additional trustees under section
                           36 of the Trustee Act 1925; and

                  5.6.3    any other power vested in the Principa Employer by
                           the Trust Deeds shall cease to be exercisable by the
                           Principal Employer and shall instead be exercisable
                           by the Trustees, but every such power which was
                           exercisable by the Principal Employer beneficially
                           shall be exercised by the Trustees in a fiduciary
                           capacity.

         5.7      EFFECT OF SUBSEQUENT SUBSTITUTION OF PRINCIPAL EMPLOYER

                  If after sub-Clause 45.6 commences to apply to any other
                  company is substituted for the Principal Employer as the
                  principal employer in the Scheme in accordance

                                       32
<PAGE>

                  with sub-Clause 5.2, and sub-Clause 5.5 does not apply in
                  relation to the new Principal Employer, the operation of
                  sub-Clause 5.6 shall cease when such substitution takes
                  effect, but without prejudice to the further operation of
                  sub-Clause 5.6 if any of the events listed in sub-Clause 5.5
                  subsequently occurs.

6        PARTICIPATING EMPLOYERS

         6.1      ELIGIBILITY TO PARTICIPATE: (1) ON A PERMANENT BASIS

                  Any company or firm is eligible is participate in the Scheme
                  if it satisfies either of the following conditions:-

                  6.1.1    it and the other Employers are associated employers
                           (as defined in section 590A(3) of the Taxes Act); or

                  6.1.2    it and the other Employers are associated through a
                           permanent community of interest and the Inland
                           Revenue approve its participation.

         6.2      ELIGIBILITY TO PARTICIPATE: (2) ON A TEMPORARY BASIS

                  Any company or firm which does not satisfy either of the
                  conditions set out in sub- Clause 6.1 is nonetheless eligible
                  to participate temporarily in the Scheme if it is the
                  successor to the whole or part of the business and/or the
                  workforce of a Participating Employer and the Inland Revenue
                  approves its participation.

         6.3      ADMISSION TO PARTICIPATION

                  A company or firm which is eligible in accordance with
                  sub-Clauses 6.1 or 6.2 shall be admitted to participation if:-

                  6.3.1    it accepts an invitation to that effect from the
                           Principal Employer;

                  6.3.2    the Trustees consent to its admissions; and

                  6.3.3    it enters into a deed of adherence wit the Principal
                           Employer and the Trustees under which:-

                           (i)      it covenants with the Principal Employer and
                                    the Trustees to observe and perform the
                                    provisions of the Scheme applicable to
                                    participating employers and generally to be
                                    bound by the provisions of the Scheme;

                           (ii)     it gives such other covenants and agrees to
                                    be bound by such other provisions as the
                                    Principal Employer with the consent of the
                                    Trustees may require;

                           (iii)    in the case of an employer which is eligible
                                    in accordance with sub- Clause 6.2, the
                                    period of its temporary participation is
                                    specified; and

                           (iv)     the Principal Employer and the Trustees
                                    admit it to participation.

                                       33
<PAGE>

         6.4      PARTICIPATING EMPLOYER CEASING TO BE ASSOCIATED

                  If any Participating Employer ceased to satisfy the
                  eligibility conditions set out in sub- Clause 6.1 having been
                  admitted to participation by virtue of its eligibility under
                  that sub-Clause its participation may only continue if:-

                  6.4.1    the Principal Employer and the Trustee agree to its
                           continued participation for a limited period
                           thereafter; and

                  6.4.2    the Participating Employer enters into such
                           supplemental deed of adherence (if any) with the
                           Principal Employer and the Trustees as the Principal
                           Employer may require:-

                           (i)      containing such provisions as the Principal
                                    Employer may require (including, but without
                                    limiting the provisions which may be
                                    required, a covenant to pay interest on any
                                    late paid contributions and provisions
                                    limiting the increase in its employees'
                                    earnings which are to be taken into account
                                    in determining their benefits under the
                                    Scheme); and

                           (ii)     specifying the period during which the
                                    Participating Employer may continue to
                                    participate in the Scheme (which, unless the
                                    Principal Employer, the Trustees and the
                                    Inland Revenue agree otherwise, shall not
                                    exceed one year from the date when the
                                    Participating Employer ceases to satisfy the
                                    conditions set out in sub-Clause 6.1).

         6.5      TERMINATION OF PARTICIPATION: (1) BY PRINCIPAL EMPLOYER

                  The Principal Employer may terminate the participation of any
                  Participating Employer in the Scheme by serving notice to that
                  effect on the Participating Employer and the Trustees. The
                  minimum period of notice shall be:-

                  6.5.1    if the Participating Employer is in breach of any of
                           its obligations under the Scheme: summary notice; and

                  6.5.2    in any other case: one month's notice or such shorter
                           period of notice as the Trustees are willing to
                           accept.

                  This sub-Clause is subject to any variation of its right to
                  terminate which the Principal Employer may agree with any
                  Participating Employer and notify to the Trustees.

         6.6      TERMINATION OF PARTICIPATION: (2) BY PARTICIPATING EMPLOYER

                  Any Participating Employer may terminate its participation in
                  the Scheme by serving notice to that effect on the Principal
                  Employer and the Trustees. The minimum period of notice
                  required shall be one month or such lesser period as the
                  Principal Employer and the Trustees may agree.

                                       34
<PAGE>

         6.7      TERMINATION OF PARTICIPATION: (3) BY THE TRUSTEES

                  The Trustees may in accordance with this sub-Clause terminate
                  the participation of any Participating Employer in the Scheme
                  in any of the following circumstances:-

                  6.7.1    if the Participating Employer fails to pay any sum
                           due from it to the Trustees under the Scheme within
                           one month (or such longer period as the Trustees may
                           allow) after the Trustees demand payment of such sum
                           from the Participating Employer;

                  6.7.2    if the Participating Employer is in breach of any of
                           its other obligations under the Scheme to an extent
                           which the Trustees consider to be material and, where
                           the breach is capable of remedy, the Participating
                           Employer fails to remedy such breach within one month
                           after the Trustees serve notice on it requiring the
                           breach to be remedied;

                  6.7.3    if the Trustees determine that the continued
                           participation of the Participating Employer in the
                           Scheme would prejudice the Scheme's Approval;

                  6.7.4    if any of the events listed in sub- Clause 5.5 occurs
                           in relation to it, where references in sub-Clause 5.5
                           to Principal Employer are replaced by references to
                           the Participating Employer.

                  The termination of a Participating Employer's participation in
                  the Scheme pursuant to this sub-Clause shall be effect by the
                  Trustees serving notice of termination on the Participating
                  Employer concerned. Such notice may be summary notice.

         6.8      OTHER CIRCUMSTANCES RESULTING IN TERMINATION OF PARTICIPATION

                  The participation of any Participating Employer in the Scheme
                  shall terminate automatically in the following circumstances:-

                  6.8.1    when it ceases to satisfy the eligibility conditions
                           set out in sub-Clause 6.1 having been admitted to
                           participation by virtue of its eligibility under that
                           sub- Clause, unless the Principal Employer and the
                           Trustees agree to its continued participation
                           pursuant to sub-Clause 6.4.1;

                  6.8.2    at the end of the period of temporary participation
                           specified in accordance with sub-Clause 6.3.3 in the
                           case of an Employer which is eligible to participate
                           in accordance with sub-Clause 6.2;

                  6.8.3    at the end of any period of extended participation
                           specified pursuant to sub- Clause 6.4.2; and

                  6.8.4    upon the expiration of any notice give by it under
                           sub-Clause 13.3 to terminate its obligation to pay
                           contributions to the Scheme.

                                       35
<PAGE>

         6.9      EFFECT OF TERMINATION OF PARTICIPATION

                  If the participation in the Scheme of any participating
                  Employer terminates pursuant to any of the preceding
                  sub-Clauses of this Clause:-

                  6.9.1    all Members in Pensionable Service by virtue of
                           Service with that Participating Employer shall be
                           deemed to have left Pensionable Service on the date
                           when its participation terminates;

                  6.9.2    no employee of that Participating Employer may be
                           admitted or re-admitted to membership of the Scheme
                           after that date by virtue of Service with that
                           Participating Employer;

                  6.9.3    the Participating Employer shall cease

                           to have any obligation to pay any contributions to
                           the Scheme after the date when its participation
                           terminates except contributions due but unpaid at the
                           date of termination and any sum payable by it
                           pursuant to the Pensions Act; and

                  6.9.4    the benefits payable to the Members who are or were
                           employees of the Participating Employer and of those
                           others persons whose entitlement to benefit from the
                           Scheme results from the membership of those Members
                           shall continue to be provided in accordance with the
                           trusts, powers and provisions of this Deed including
                           the powers to make transfer payments and buy out
                           benefits under Clauses 19 and 20.

         6.10     PARTIAL WINDING-UP

                  If the participation of any Participating Employer in the
                  Scheme terminates pursuant to any of the preceding sub-Clauses
                  of this Clause and the Inland Revenue require the part of the
                  Scheme relating to that Participating Employer to be wound-up,
                  sub-Clause 6.9.4 shall not apply and instead the Trustees
                  shall set aside such part of the Fund as they, subject to the
                  approval of the Principal Employer and having consulted the
                  Actuary, shall decide relates to the Participating Employer
                  concerned. The Trustees shall then deal with the part of the
                  Fund thereby set aside in accordance with Clause 26 as if:-

                  6.10.1   references to the Termination Date were to the date
                           when the participation of the Participating Employer
                           in the Scheme terminates;

                  6.10.2   references to the Scheme were to the part of the
                           Scheme which relates to that Participating Employer;

                  6.10.3   references to the Fund were t the part of the Fund
                           set aside in relation to that Participating Employer;

                  6.10.4   references to the liabilities of the Scheme were to
                           the liabilities secured by the part of the Fund
                           thereby set aside; and

                                       36
<PAGE>

                  6.10.5   references to Members and others entitles to benefit
                           from the Scheme were to t those members and others
                           whose benefits the Trustees determine to be secured b
                           by the part of the Fund thereby set aside.

                                       37
<PAGE>

                        PART 4: THE PROFESSIONAL ADVISERS

7        APPOINTMENT OF PROFESSIONAL ADVISERS

         7.1      MEANING OF "PROFESSIONAL ADVISER"

                  For the purpose of this Clause and Clause 8, the expression
                  "professional adviser" has the same meaning as in section
                  47(4) of the Pensions Act namely:-

                  7.1.1    the auditor, actuary and legal adviser appointed by
                           the Trustees in relation the Scheme;

                  7.1.2    any fund manager appointed by or on behalf of the
                           Trustees in relation to the Scheme; and

                  7.1.3    any person appointed by the Trustees t exercise any
                           of the functions provided by regulations made under
                           section 47(3)(a) of the Pensions Act (being at the
                           date of this Deed the function prescribed in
                           regulation 2 of the Administration Regulations).

         7.2      AUDITOR AND ACTUARY

                  At the date of this Deed, section 47 of the Pensions Act
                  applies to the Scheme and accordingly, the Trustees are
                  responsible for ensuring that:-

                  7.2.1    an individual, body corporate or partnership is
                           appointed by them as auditor in relation to the
                           Scheme; and

                  7.2.2    an individual is appointed by them as actuary in
                           relation to the Scheme;

                  in each case as required by section 47(1) of the Pensions Act.

         7.3      FUND MANAGER

                  If section 47(2) of the Pensions Act applies to the Scheme
                  because its assets consist of or include investments (within
                  the meaning of the Financial Services Act 1986) and no
                  exception to that section applies to the Scheme by virtue of
                  regulations made under section 47(5) of the Pensions Act, the
                  Trustees are responsible for ensuring that an individual, body
                  corporate or partnership is appointed by them as fund manager
                  in relation to the Scheme as required by section 47(2) if the
                  Pensions Act. The person appointed must be someone to whom the
                  Trustees are permitted by section 34(2) of the Pensions Act to
                  delegate any discretion of theirs to make any decision about
                  investments. Sub-Clause 15.6 contains further provisions
                  relating to the appointment of the Fund Manager.

                                       38
<PAGE>

         7.4      ELIGIBILITY FOR APPOINTMENT AS AUDITOR OR ACTUARY

                  An individual, body corporate or partnership (in the case of
                  an auditor) and an individual (in the case of an actuary) may
                  only hold an appointment as the auditor or actuary in relation
                  to the Scheme if he or it has the qualifications and
                  experience, or approval, required for such appointment
                  specified by regulations made under section 47(5)(b) of the
                  Pensions Act (being, at the date of this Deed, specified by
                  regulation 4 of the Administration Regulations).

                  Except as provided in section 27 of the Pensions Act and
                  regulations made under it, a Trustee and any person who
                  (within the meaning of the Pensions Act) is connected with, or
                  an associate of, a Trustee must not act as an auditor or
                  actuary of the Scheme.

         7.5      ELIGIBILITY FOR APPOINTMENT AS OTHER PROFESSIONAL ADVISER

                  Any other professional adviser must have the qualifications
                  and experience, or approval, (if any) required for appointment
                  as a professional adviser as specified by regulations made
                  under section 47(5)(b) of the Pensions Act. No such
                  regulations have been made in relation to other professional
                  advisers as at the date of this Deed.

         7.6      TRUSTEES TO RELY ON THEIR OWN PROFESSIONAL ADVISERS

                  Any Trustee who in exercising any of his functions places
                  reliance on the skill or judgment of any person:-

                  7.6.1    appointed otherwise than by the Trustees as legal
                           adviser or to exercise any functions prescribed by
                           regulations under section 47(3)(a) of the Pensions
                           Act, in relation to the Scheme; or

                  7.6.2    appointed otherwise than by or on behalf of the
                           Trustees as a fund manager;

                  is liable by virtue of section 47(3) of the Pensions act to
                  have a prohibition order made against him or to be required to
                  pay a civil penalty as provided in sections 3 and 10 of the
                  Pensions Act.

8.       MANNER AND TERMS OF APPOINTMENT OF PROFESSIONAL ADVISERS

         8.1      MANNER OF APPOINTMENT AND REMOVAL

                  The Trustees shall appoint and remove professional advisers in
                  relation to the Scheme in the manner provided for in
                  regulations made under section 47(6) of the Pensions Act
                  (being at the date of this Deed set out in regulation 5 of the
                  Administration Regulations).

         8.2      TERMS OF APPOINTMENT: (A) GENERALLY

                  The Trustees shall appoint professional advisers in relation
                  to the Scheme on the terms (including the manner in which such
                  professional advisers may resign):-

                                       39
<PAGE>

                  8.2.1    as provided for in regulations made under section
                           47(6) of the Pensions Act (being at the date of this
                           Deed set out in regulation 5 of the Administration
                           Regulations); and

                  8.2.2    subject to sub-Clause 8.2.1, in accordance with
                           section 47(7) of the Pensions Act, namely on such
                           terms as the Trustees may determine.

         8.3      TERMS OF APPOINTMENT: (B) FUND MANAGER

                  Without prejudice to the generality of their power under
                  sub-Clause 8.2.2 to determine the terms on which any
                  professional adviser is appointed, in the case of a Fund
                  Manager the terms may include:-

                  8.3.1    providing for the remuneration, protection and
                           indemnity of the person so appointed;

                  8.3.2    authorising that person to enter into any transaction
                           on behalf of the Trustees in which that person has a
                           personal interest or interest in another fiduciary
                           capacity including a sale of investments by that
                           person to the Trustees or purchase of investments by
                           that person from the Trustees;

                  8.3.3    authorising that person to enter into any transaction
                           in respect of investments comprised in the Fund
                           together with investments comprised in other funds
                           under the management or control of that person;

                  8.3.4    delegating to that person any of the powers of the
                           Trustees relating or incidental to the investment or
                           safe custody of the Fund or the part concerned.

         8.4      TERMS OF APPOINTMENT: (C) CUSTODIANS AND NOMINEES

                  Also without prejudice to the generality of their powers under
                  sub-Clause 8.2.2, in the case of a custodian or nominee (being
                  a person treated as a professional adviser by virtue of
                  section 47(3) of the Pensions Act and regulation 2(c) of the
                  Administration Regulations), the terms may include:-

                  8.4.1    providing for the remuneration, protection and
                           indemnity of that person;

                  8.4.2    authorising that person to enter into any transaction
                           on behalf of the Trustees in which that person has a
                           personal interest or interest in another fiduciary
                           capacity including a sale of investments by that
                           person to the Trustees or purchase of investments by
                           that person from the Trustees;

                  8.4.3    authorising that person to hold and deal with assets
                           comprised in the Fund together with assets comprised
                           in other funds under the control of that person;

                                       40
<PAGE>

                  8.4.4    delegating to that person any of the powers of the
                           Trustees relating or incidental to the safe custody
                           of the Fund or the part concerned.

                                       41
<PAGE>

                          PART 5: SCHEME ADMINISTRATION

9        TRUSTEES' ADMINISTRATIVE POWERS

         9.1      SPECIFIC POWERS AND GENERAL POWER

                  In addition to the powers of administration and management
                  conferred on them by law, the Trustees shall have the specific
                  powers set out in the following sub-Clauses of this Clause.
                  The Trustees shall also have general power to do or omit to do
                  all such other acts, matters and things as may be necessary or
                  desirable in order to administer and manage the Scheme and
                  achieve its purpose, but this general power may not be
                  exercised so as to avoid any requirement in any of the
                  following sub-Clauses of this Clause to obtain the Principal
                  Employer's approval or consent.

         9.2      APPOINTMENT OF ADDITIONAL ACCOUNT SIGNATORIES

                  The Trustees may:-

                  9.2.1    with the consent of the Principal Employer appoint
                           any person to be an additional authorised signatory
                           to any account which the Trustees may have with any
                           bank or other person (including an investment
                           manager) for the purpose of the Scheme;

                  9.2.2    provide that all or any payments or transfers out of
                           such account shall not be made without the signature
                           of such additional authorised signatory;

                  9.2.3    appoint any such additional authorised signatory on
                           such terms as they think fit including terms defining
                           the purpose of any such appointment and the duties
                           and obligations to be imposed on such additional
                           authorised signatory, and terms limiting the
                           liability of, indemnifying, reimbursing and
                           remunerating such additional authorised signatory;
                           and

                  9.2.4    appoint a person to be an additional authorised
                           signatory notwithstanding that he is a partner in any
                           firm, or a director or employee of any company which
                           advises or otherwise provides any other services to
                           the Trustees and/or Principal Employer for the
                           purpose of the Scheme.

         9.3      BANK ACCOUNTS

                  The Trustee shall have power:-

                  9.3.1    to open and operate such bank accounts;

                  9.3.2    to authorise such person or persons (whether or not
                           Trustee) to do such acts, matters and things in
                           respect of such bank accounts;

                  9.3.3    generally to give such mandates to their bankers in
                           respect of such bank accounts;

                                       42
<PAGE>

                  in each case as they shall think fit, but consistently with
                  their obligation under section 49 of the Pensions Act to keep
                  any money received by them in a separate account kept by them
                  at an institution authorised under the Banking Act 1987 except
                  in prescribed circumstances (being at the date of this Deed
                  the circumstances prescribed in regulation 11 of the
                  Administration Regulations).

         9.4      BORROWING

                  The Trustees shall have power to obtain any credit facility
                  and to borrow money in any currency from any person upon such
                  terms and conditions (including as to interest, repayment and
                  security as they shall think fit.

         9.5      COSTS AND EXPENSES

                  The Trustees shall have power in the execution of the trusts
                  and the exercise of the powers and discretions conferred on
                  them under the Scheme (and generally in the administration and
                  management of the Scheme) to incur all such reasonable costs
                  and expenses as they shall think fit. Payment of any such
                  costs and expenses shall be made in accordance with Clause 14
                  of this Schedule.

         9.6      DEBTS AND CLAIMS

                  Without prejudice to section 15 of the Trustee Act 1925, the
                  Trustees shall have power:-

                  9.6.1    to pay or allow any debt or claim on any evidence
                           that they think sufficient;

                  9.6.2    to accept any composition or any security in respect
                           of any debt or any claim;

                  9.6.3    to allow any time for payment of any debt; or

                  9.6.4    to compromise, compound, abandon, submit to
                           arbitration or otherwise settle any debt or claim;

                  in each case on such terms and conditions as they shall think
                  fit.

         9.7      DELEGATION

                  The Trustees shall have power to delegate the execution or
                  exercise of all or any of the trusts, powers and discretions
                  vested in them (whether by the trust Deeds or by law) as
                  trustees of the Scheme to such person or persons for such
                  period and generally on such terms and conditions (including
                  authority to sub-delegate) as they shall think fit. Any such
                  delegation may be revoked by the Trustees at any time.

                                       43
<PAGE>

         9.8      DONATIONS AND BEQUESTS

                  The Trustees shall have power to accept any donation or
                  bequest from any person which is to be applied for any of the
                  purposes of the Scheme and which may be accepted by them
                  without prejudicing the Scheme's Approval.

         9.9      EMPLOYMENT OF STAFF AND AGENTS

                  The Trustees shall have power, instead of acting personally,
                  to appoint or employ any person or persons as their agent or
                  employee upon such terms and conditions as the Trustees shall
                  think fit (except that nay remuneration to be paid to any such
                  person shall be subject to approval by the Principal Employer)
                  to do any act, matter or thing on their behalf in the
                  administration and management of the Scheme.

         9.10     GUARANTEES AND INDEMNITIES

                  The Trustees shall have power with the prior written consent
                  of the Principal Employer to give any guarantee or to become
                  surety for, or to give any indemnity in respect of the payment
                  of, any money owed by any person or the performance of any
                  obligation or the discharge of any liability by any person;
                  but this power must not be exercised in a manner which would
                  contravene section 40 of the Pensions Act or regulations made
                  under it.

         9.11     INSURANCE

                  The Trustees shall have power to take out the following
                  insurance for the benefit of the Scheme for such amounts and
                  upon such terms and conditions as they shall think fit (so
                  that the premiums for such insurance shall be Scheme expenses
                  and the proceeds of any such insurance shall be held by the
                  Trustees upon the trusts of the Scheme):-

                  9.11.1   insurance against any loss of or damage to any assets
                           of the Fund from any risk;

                  9.11.2   insurance against any loss or damage caused by any
                           act or omission of the trustees or any of them, or
                           any person appointed or employed by them or to whom
                           they may have delegated the execution or exercise of
                           any of the trusts, powers and discretions vested in
                           them (in which case, for the avoidance of doubt, the
                           insurance may be taken out on terms and conditions
                           which include the waiver by the insurer of its rights
                           of subrogation against the person or persons,
                           including the Trustees, responsible for the act or
                           omission);

                  9.11.3   insurance against the risk of the death of any Member
                           or any other person upon whose death any benefits
                           become payable from the Scheme; and

                  9.11.4   such other insurance as the Trustees may consider it
                           desirable to take out for the benefit of the Scheme;

                                       44
<PAGE>

                  but this power is not exercisable in a manner which would
                  contravene section 31 of the Pensions Act (having regard to
                  sub-section (2) of that section) by enabling the Trustees to
                  pay out of the assets of the Scheme any premium in respect of
                  a policy of insurance where the risk is or includes the
                  imposition of such a fine or the requirement to pay such a
                  penalty as is mentioned in section 31(1) of this Pensions Act.

         9.12     LEGAL PROCEEDINGS

                  The Trustees shall have the following powers in respect of
                  legal proceedings relating to the Scheme exercisable in each
                  case as they shall think fit:-

                  9.12.1   to institute or defend any such proceedings;

                  9.12.2   to take and act upon the advice of any barrister or
                           solicitor, or any other suitably qualified lawyer in
                           any jurisdiction outside England and Wales; and

                  9.12.3   to do or omit to do in such proceedings all such
                           acts, matters and things as may seem to them to be
                           necessary or desirable (including compromising or
                           settling any claim).

         9.13     PAYING AGENTS

                  The Trustees shall have power to appoint any of the Employers
                  or any Authorised Insurance Company as their agent for the
                  purpose of paying any pension or pensions which arise under
                  the Scheme. The payment of any such pension by any such
                  Employer or Authorised Insurance Company to the person or
                  persons entitled to receive it shall be a complete discharge
                  to the Trustees for the Trustees for the payment of the amount
                  concerned.

         9.14     QUESTIONS AND MATTERS OF DOUBT

                  The Trustees shall have power (so far as the law permits):-

                  9.14.1   to determine whether or not any person is entitled to
                           any payment or other benefit from the Scheme; and

                  9.14.2   generally to determine all questions and matters of
                           doubt arising in connection with the Scheme.

         9.15     QUESTIONS OF FACT

                  In determining any question of fact the Trustees shall power
                  to act upon such evidence or presumption as they shall think
                  sufficient.

         9.16     REVENUE UNDERTAKINGS

                  The Trustees shall have power to give such undertakings to the
                  Inland Revenue as may be required as a condition of the
                  Scheme's Approval and such other undertakings in favour of the
                  Inland Revenue as the Trustees shall think fit.

                                       45
<PAGE>

         9.17     SECURITY OVER ASSETS OF THE FUND

                  The Trustees shall have power to charge, mortgage, pledge or
                  grant any other security over any of the assets of the Fund in
                  order to secure:-

                  9.17.1   the repayment of any money borrowed by the Trustees;

                  9.17.2   the payment of any interest on, and any other sums
                           payable by them in respect of, any money they may
                           have borrowed; or

                  9.17.3   the discharge or performance of any liability or
                           obligation incurred by the Trustees as a result of
                           exercising their power under sub-Clause 9.10.

                  However, this power must not be exercised in a manner which
                  would contravene section 40 of the Pensions Act or regulations
                  made under it.

         9.18     SPECIALIST ADVICE

                  The Trustees shall have power to take and act upon advice from
                  any person whom they consider to be suitably qualified to
                  advise them in connection with the Scheme, including any
                  accountant, actuary, banker, barrister, broker, investment
                  adviser, medical practitioner, pensions consultant or
                  solicitor. Such power must be exercised consistently with the
                  requirements of Clauses 7 and 8 and the legislation referred
                  to in them insofar as such person is a professional adviser
                  for the purpose of those Clauses. Except where the person is a
                  professional adviser for those purposes, the remuneration of
                  the adviser must be approved by the Principal Employer.

         9.19     TAX

                  The Trustees shall have power:-

                  9.19.1   to pay any taxes or other fiscal impositions in any
                           part of the world in respect of the Fund, any of the
                           assets of the Fund, any income thereof or dealing
                           therewith; and

                  9.19.2   before making any payment to any Member or other
                           beneficiary of the Scheme or any Employer, to deduct
                           any tax which is deductible therefrom and account for
                           the same to the Inland Revenue.

         9.20     WITHHOLDING OR SUSPENDING PAYMENT OF BENEFITS

                  The Trustees shall have power to withhold or suspend the
                  payment of any benefits under the Scheme until they are
                  satisfied as to the entitlement to the benefit concerned of
                  the Member or other person claiming to be entitled.

                                    46
<PAGE>

10.      ACCOUNTS, RECORDS AND AUDIT

         10.1     ACCOUNTS AND RECORDS

                  The Trustees shall keep such books and records as may be
                  required by regulations made under section 49 of the Pensions
                  Act (which at the date of this Deed are set out in Chapter III
                  of Part III of the Administration Regulations). The Trustees
                  may keep any other books or records as they may consider
                  necessary or desirable for the proper administration of the
                  Scheme.

         10.2     AUDITED ACCOUNTS

                  The Trustees' duty to obtain audited account for any Scheme
                  year is limited to the duty imposed on them by regulations
                  made under section 41 of the Pensions Act (being at the date
                  of this Deed the Occupational Pension Schemes (Requirement to
                  obtain Audited Accounts and a Statement from the Auditor)
                  Regulations 1996 (SI 1996 No. 1975)), but the Trustees shall
                  have power to obtain audited accounts for any other period as
                  they shall think fit.

         10.3     DISCLOSURE OF INFORMATION TO AUDITOR

                  There shall be disclosed to the Auditor such information as is
                  required to be disclosed by regulations made under section
                  47(9) of the Pensions Act (which as at the date of this Deed
                  is set out in regulation 6 of the Administration Regulations).

11       PROVISION OF INFORMATION

         11.1     PROVISION OF INFORMATION AND DOCUMENTS BY THE TRUSTEES

                  The following provisions of this sub-Clause shall apply to the
                  provision of information and documents by the Trustees:-

                  11.1.1   The Trustees' obligations to provide information and
                           documents to Members is limited to their obligations
                           under applicable legislation, in particular:-

                           (i)      such information as may be prescribed by
                                    regulation made under section 113 of the
                                    Pension Schemes Act;

                           (ii)     such documents as may be prescribed by
                                    regulations made under section 41 of the
                                    Pensions Act;

                           being at the date of this Deed the information and
                           documents prescribed in the Disclosure Regulations.

                  11.1.2   The Trustees' obligations to provide information and
                           documents to the Scheme's professional advisers is
                           limited to their obligations imposed by regulations
                           made under section 47(9)(b) of the Pensions Act
                           (being at the date of this Deed regulation 6(3) of
                           the Administration Regulations).

                                       47
<PAGE>

                  11.1.3   The Trustees may provide such other information and
                           documents as they may think fit.

         11.2     PROVISION OF INFORMATION BY EMPLOYERS

                  The Employers' obligations to provide information to the
                  Trustees is limited to their obligations imposed by
                  regulations made under section 47(9)(a) of the Pensions Act
                  (being at the date of this Deed regulation 6(1) and (2) of the
                  Administration Regulations).

         11.3     PROVISION OF INFORMATION BY MEMBERS AND OTHERS

                  Every Member and every other person entitled or claiming to be
                  entitled to any benefit under the Scheme shall provide the
                  Trustees with all such information and documents as they may
                  require:-

                  11.3.1   in order to enable them to determine the entitlement
                           of any person to any benefit under the Scheme
                           (including any birth, marriage or death certificate);
                           or

                  11.3.2   for the administration of the Scheme (including his
                           residential address and details of any bank account
                           into which he wishes his benefits from the Scheme to
                           be paid).

12       OTHER MISCELLANEOUS PROVISIONS

         12.1     PROTECTION OF THIRD PARTIES: (A) RECEIPTS

                  By way of modification of section 14(1) of the Trustee act
                  1925, the written receipt of the Trustees or any of them (or
                  any person or persons authorised by the Trustees to give
                  receipts) for any money, securities or other personal property
                  or effects paid, transferred or delivered to them or him or to
                  their or his order shall be a sufficient discharge to the
                  person paying, transferring or delivering the same and shall
                  effectually exonerate him from seeing to the application or
                  being answerable for any loss or misapplication thereof.

                  As provided in section 14(2)(a) of the Trustee Act 1925, this
                  sub-Clause does not enable a sole Trustee to give a valid
                  receipt for the proceeds of sale or other capital money
                  arising under a trust for sale of land unless the Trustee is a
                  trust corporation.

         12.2     PROTECTION OF THIRD PARTIES: (B) PURCHASERS AND LENDERS

                  By way of modification of section 17 of the Trustee Act 1925,
                  no purchaser or lender (whether or not a mortgagee) who pays
                  or advances money pursuant to a transaction purportedly
                  entered into under any trust or power vested in the Trustees
                  shall be concerned to see that such money is required for the
                  purposes of the Scheme, or that no more than is required for
                  such purposes is raised, or otherwise as to the application
                  thereof.

                                       48
<PAGE>

         12.3     NOTICES

                  Any notice to be served pursuant to any of the provisions of
                  the Trust Deeds shall be duly served:-

                  12.3.1   in the case of service on any of the Employers: if it
                           is delivered or sent by post to the Employer's
                           registered office (if it is a company) or to its
                           principal place of business (if it is not a company);

                  12.3.2   in the case of a Trustee who is an individual: if it
                           is delivered or sent by post to him at his usual
                           place of work if he is employed by one of the
                           Employers or, if he is not, to his usual residential
                           address or such address as he may have notified the
                           Principal Employer to be his address for the service
                           of notices;

                  12.3.3   in the case of service on a Trustee which is a
                           company: if it is delivered or sent by post to its
                           registered office.

         12.4     TERMINATION OF EMPLOYMENT

                  Nothing in the Trust Deeds:-

                  12.4.1   shall in any way restrict the right of any Employer
                           to terminate the Service of any Member who is its
                           employee; or

                  12.4.2   shall be used in aggravation of damages in any
                           action, counterclaim or suit brought by any such
                           Member against the Employer in respect of the
                           termination of his Service.

         12.5     RESOLUTION OF DISPUTES

                  Section 50 of the Pensions Act and regulations made under it,
                  being at the date of this Deed the Occupational Pension
                  Schemes (Internal Dispute Resolution Procedures) Regulations
                  1996 (SI 1996 No 1270), require Trustees to secure that
                  arrangements for the resolution of disagreements between, on
                  the one hand, the Trustees and, on the other hand, the Members
                  and other person prescribed in regulation 2(1) of those
                  Regulations about matters in relation to the Scheme are made
                  and implemented.

                                       49
<PAGE>

                                PART 6: THE FUND

13       CONTRIBUTIONS TO THE FUND

         13.1     MEMBERS' CONTRIBUTIONS

                  The contributions payable by Members to the Fund shall be
                  determined pursuant to Rule 3 in Schedule 3.

         13.2     EMPLOYERS' CONTRIBUTIONS: (A) AMOUNT AND PAYMENT INTERVALS

                  The Employers shall pay contributions to the Scheme on such
                  basis and at such intervals as shall be determined by the
                  Trustees and the principal Employer, having taken advice from
                  the Actuary, to be required (after taking account of
                  compulsory contributions payable by the members) in order to
                  enable the Trustees to provide the benefits payable under the
                  Scheme.

                  Once a minimum funding valuation has been made under section
                  57 of the Pensions Act and the MFR Regulations, such
                  contributions shall be payable in accordance with the Schedule
                  of Contributions.

                  Without prejudice to the generality of the foregoing, any
                  Employer may be required to pay contributions to the Scheme of
                  any amount or at any rate determined by the Trustees and the
                  Principal Employer, having taken advice from the Actuary, to
                  take account of any increase in the benefits payable to any
                  member employed or formerly employed by the Employer in
                  question resulting from any action of that Employer.

         13.3     EMPLOYERS' CONTRIBUTIONS: (B) TERMINATION

                  Any Employer may at any time elect to terminate its obligation
                  to pay contributions to the Scheme by giving not less than one
                  month's notice to that effect to the Trustees (or shorter
                  period as the trustees may agree to accept). Upon the expiry
                  of such notice:-

                  13.3.1   if the Employer is a Participating Employer its
                           participation in the Scheme shall terminate in
                           accordance with sub-Clause 6.10.4; and

                  13.3.2   if the Employer is the Principal Employer the Scheme
                           shall terminate in accordance with Clause 25.

14       SCHEME EXPENSES

         14.1     PAYMENT OUT OF FUND

                  Unless the Principal Employer and the Trustees agree to
                  otherwise pursuant to sub-Clause 14.2, all costs and expenses
                  incurred by the trustees in accordance with sub-Clauses 4.1
                  and 9.4 (including all costs and expenses incurred by any
                  person on behalf of the Trustees with the Trustees' approval)
                  shall be paid by them out of the Fund.

                                       50
<PAGE>

         14.2     PAYMENT BY EMPLOYERS

                  The Principal Employer and the Trustees may from time to time
                  agree that all or any of the costs and expenses referred to in
                  sub-Clause 14.1 shall, instead of being paid out of the Fund,
                  be paid by the Employers. In that case they shall be paid by
                  the Employers in such proportions as the Principal Employer
                  may from time to time determine. Once a minimum funding
                  valuation has been made under section 57 of the Pensions Act
                  and the MFR Regulations, any such payments in respect of
                  expenses shall be made in accordance with the Schedule of
                  Contributions.

15       INVESTMENT OF THE FUND

         15.1     RETENTION OF MONIES IN BANK ACCOUNT ETC

                  The Trustees may retain such of the Fund as they decide in any
                  currency in any current or deposit account with any bank or
                  other financial institution, but consistently with their
                  obligation under section 49 of the Pensions Act to keep any
                  money received by them in a separate account kept by them at
                  an institution authorised under the Banking Act 1987 except in
                  prescribed circumstances (being at the date of this Deed the
                  circumstances prescribed in regulation 11 of the
                  Administration Regulations).

         15.2     POWER OF INVESTMENT

                  Subject to the exercise of their power under sub-Clause 15.1,
                  the Trustees shall invest the Fund and in doing so they shall
                  have the same full and unrestricted powers of investment as if
                  they were absolutely and beneficially entitled to the Fund
                  except that they must comply with the restrictions on
                  investment in employer-related assets prescribed pursuant to
                  section 40 of the Pensions Act (being at the date of this Deed
                  the restrictions prescribed in The Occupations Pension Schemes
                  (Investment) Regulations 1996 (SI 1996 No. 3127)).

         15.3     ANCILLARY INVESTMENT POWERS

                  The Trustees' power of investment includes the power:-

                  15.3.1   to convert, sell, transpose o vary or grant rights in
                           respect of any of the assets of the Fund;

                  15.3.2   to exercise or refrain from exercising any rights
                           attached to or arising from any of the assets of the
                           Fund;

                  15.3.3   to lend any person on such terms as they shall think
                           fit, any of the assets of the Fund and any document
                           constituting, evidencing or representing any such
                           asset;

                  15.3.4   to enter into any futures or options contract, any
                           underwriting or sub- underwriting contract or any
                           other contract (whether similar to or different from
                           the foregoing) which the Trustees consider it
                           appropriate to enter into for or in connection with
                           the investment of the Fund; and

                                       51
<PAGE>

                  15.3.5   to do or refrain from doing anything else (whether
                           similar to or different from the above) in relation
                           to the assets of the Scheme which they consider to be
                           for the benefit of the Scheme.

         15.4     POOLED INVESTMENTS

                  The Trustees shall have power to pool the assets of the Fund,
                  or any of them, with the assets of any other retirement
                  benefits scheme which is approved under Chapter 1 of Part XIV
                  of the Taxes Act and in which any of the Employers
                  participates, in any common investment fund which satisfies
                  the requirements of the Inland Revenue, upon such terms and
                  conditions as the trustees shall think fit.

         15.5     COMPLIANCE WITH LEGAL REQUIREMENTS

                  In relation to the invest of the Fund, the Trustees are
                  required to comply with:-

                  15.5.1   section 191 of the Financial Service Act 1986; and

                  15.5.2   the following sections of the Pensions Act, namely
                           section 33, 34 and section 35, unless that section
                           does not apply to the Scheme by virtue of regulations
                           made under it, and section 36;

                  as well as with the general law concerning the investment of
                  trust assets.

         15.6     APPOINTMENT OF FUND MANAGER

         The following provisions apply where the Trustees appoint a Fund
         manager as one of the Scheme's professional advisers in accordance with
         the requirements of section 47 of the Pensions Act and Clauses 7 and 8
         in this Schedule.

                  15.6.1   The Trustees shall have power to delegate to the Fund
                           Manager the management of the whole or any part of
                           the Fund including any discretion of the Trustees to
                           make any decision about investments. If giving effect
                           to the decision would constitute carrying on
                           investment business in the United Kingdom (within the
                           meaning of the Financial Services Act 1986) then (as
                           required by section 34(3) of the Pension Act, having
                           regard to section 34(5)(b)) the Fund Manager must
                           fall, or be treated as falling, within any of
                           paragraphs (a) to (c) of section 191(2) of the
                           Financial Services Act 1986.

                  15.6.2   The Trustees' responsibility for the act or default
                           of any Fund Manager shall be determined in accordance
                           with section 34(4) if the Pensions Act, whether or
                           not the discretion delegated to him is such that
                           giving effect to the investment decision would
                           constitute carrying on investment business in the
                           United Kingdom (within the meaning of the Financial
                           Service Act 1986).

                                       52
<PAGE>

                  15.6.3   The Fund Manager is required to exercise in
                           accordance with section 36(2) of the Pensions Act any
                           discretion which the Trustees have delegated to him
                           to make any decision about investments.

                  15.6.4   The Fund Manager is required by section 36(5) of the
                           Pension Act, to exercise his powers of investment
                           with a view to giving effect to the principles
                           contained in the statement of investment principles
                           under section 35 of the Pensions Act, so far as
                           reasonably practicable.

16       SAFE CUSTODY OF THE FUND

         16.1     TRUSTEES' DUTY TO SAFEGUARD ASSETS

                  The Trustees shall take such steps as they may consider to be
                  necessary or desirable in order to safeguard the assets of the
                  Fund.

         16.2     APPOINTMENT OF CUSTODIANS AND NOMINEES

                  Subject to sub-Clause 16.3, the Trustees may appoint any
                  person whom they consider to be suitably qualified for the
                  purpose to act as custodian or nominee in respect of the whole
                  or any part of the Fund upon such terms as the Trustees shall
                  think fit.

         16.3     PROFESSIONAL ADVISER REQUIREMENTS

                  By virtue of sections 47(3)(a) and 47(4)(c) of the Pensions
                  Act and regulation 2(c) of the Administration Regulations any
                  person appointed to exercise the function of custody of cash,
                  securities and any documents of title to the assets of the
                  Scheme is a professional adviser whose appointment must comply
                  with section 47 of the Pensions Act as provided for in Clauses
                  7 and 8 if this Schedule.

17       SURPLUSES AND DEFICITS

         17.1     TRUSTEES' DUTY TO OBTAIN ACTUARIAL VALUATIONS

                  The Trustee's duty to obtain actuarial valuations of the
                  Scheme's assets in relation to its liabilities is limited to
                  their duty under the following legislation, to the extent that
                  it applied to the Scheme, namely:-

                  17.1.1   Schedule 22 of the Taxes Act and regulations made
                           under it (being at the date of this Deed the Pension
                           Scheme Surpluses (Valuation) Regulation 1987 (SI 1987
                           No 412); and

                  17.1.2   sections 41 and 57 of the Pensions Act and
                           regulations made under them (being at the date of
                           this Deed the MFR Regulations).

         17.2     TRUSTEES' POWER TO OBTAIN ACTUARIAL VALUATIONS

                  In addition, the Trustees shall have power to obtain an
                  actuarial valuation prepared by the Actuary as at such date,
                  on such basis, and for such purpose as the Trustees shall
                  think fit.

                                       53
<PAGE>

         17.3     SURPLUS REVEALED BY ACTUARIAL VALUATION

                  If any actuarial valuation obtained by the Trustees reveals
                  that as at the effective date of such valuation the value of
                  the Scheme's assets exceeds the value of its liabilities:-

                  17.3.1   to the extent (if any) that the excess is such that
                           the Trustees are required to submit to the Inland
                           Revenue in accordance with Schedule 22 to the Taxes
                           Act proposal for reducing or eliminating it, then the
                           Trustees, having considered any recommendations made
                           by the Actuary, shall submit such proposals as are
                           consistent with the provisions of Schedule 22 as the
                           Principal Employer shall approve, and shall carry
                           them out once approved by the Inland Revenue; and

                  17.3.2   to the extent that the excess is not such that the
                           Trustees are required to submit to the Inland Revenue
                           in accordance with Schedule 22 to the Taxes Act
                           proposals for reducing or eliminating it, then except
                           insofar as the Trustees and the Principal Employer
                           agree otherwise, the excess shall be applied in
                           reducing the contributions to be paid by the
                           Employers under sub-Clause 13.2 over such period as
                           the Trustees and the Principal Employer shall decide,
                           having taken advice from the Actuary including as to
                           the certification by the Actuary of the adequacy of
                           the contributions in accordance with the MFR
                           Regulations.

         17.4     DEFICIT REVEALED BY ACTUARIAL VALUATION

                  If any actuarial valuation obtained by the trustees reveals
                  that as at the effective date of such valuation the value of
                  the Scheme's assets falls short of the value of its
                  liabilities, then:-

                  17.4.1   to the extent that the shortfall constitutes serious
                           underprovision for the purpose of section 60 of the
                           Pensions Act, the Employers are required to secure an
                           increase in the value of the Scheme's assets in
                           accordance with that section; and

                  17.4.2   to the extent that the shortfall does not constitute
                           serious underprovision for the purpose of that
                           section, it shall be taken into account in
                           determining the contributions to be paid by the
                           Employers pursuant to sub-Clause 13.2 except insofar
                           as the Trustees and the Principal Employer agree
                           otherwise.

                                       54
<PAGE>

                     PART 7: TRANSFERS TO AND FROM THE FUND

18.      ACCEPTANCE OF TRANSFER PAYMENTS

         18.1     POWER TO ACCEPT TRANSFER PAYMENTS

                  The Trustee shall have power,. subject to and in accordance
                  with the provisions of this Clause, with the consent of the
                  Principal Employer (which may be given generally or in any
                  specific case), to accept a transfer payment in respect of the
                  accrued benefits of any Member or any group of Members under
                  any other scheme or arrangement from which transfers may be
                  made to the Scheme.

         18.2     INLAND REVENUE REQUIREMENTS

                  The Trustees must not accept a transfer payment if to do so
                  would prejudice the Scheme's Approval. The Trustees may
                  without prejudicing the Scheme's Approval accept transfer
                  payments from any of the following:-

                  18.2.1   a retirement benefits scheme (including a
                           free-standing additional voluntary contribution
                           scheme) approved or for which approval is being
                           sought under Chapter I of Part XIV of the Taxes Act;

                  18.2.2   a personal pension scheme approved or for which
                           approval is being sought under Chapter IV of Part XIV
                           of the Taxes Act;

                  18.2.3   a relevant statutory scheme within the meaning of
                           section 611A of the Taxes Act;

                  18.2.4   a retirement annuity contract approved under Chapter
                           III of Part XIV of the Taxes Act;

                  18.2.5   an annuity contract approved for the purposes of
                           section 431(4)(d) or (e) or 591(2)(g) of the Taxes
                           Act;

                  18.2.6   a superannuation fund approved before 6 April 1980 to
                           which section 608 if the Taxes Act applies.

                  For the purposes of sub-Clauses 18.2.1 and 18.2.2, the
                  Trustees may only accept a transfer payment from a retirement
                  benefits scheme or a personal pension scheme for which
                  approval is being sought under Chapters I or IV of Part XIV of
                  the Taxes Act if the Inland Revenue have given specific
                  authority for the transfer payment to be made.

         18.3     CONTRACTING-OUT REQUIREMENTS

                  The Trustees may accept a transfer payment in relation to
                  Contracted-out Benefits in the circumstances and subject to
                  the conditions set out in the following section of the Pension
                  Schemes Act, and regulations made under them:-

                  18.3.1   in the case of Guaranteed Minimum Pensions, section
                           20 and the Contracting-out Transfer Regulations;

                                       55
<PAGE>

                  18.3.2   in the case of Protected Rights, section 28 and the
                           Protected Rights Transfer Regulations; and

                  18.3.3   in the case of Section 9(2B) Rights, section 12C and
                           the Contracting-out Transfer Regulations.

         18.4     SCHEME BENEFITS IN RETURN FOR TRANSFER PAYMENTS

                  In return for the making to them of a transfer payment which
                  they are permitted to accept in accordance with sub-Clause
                  18.1, the Trustees shall have power to grant the Member or
                  Members concerned such additional or new benefits under the
                  Scheme as they (after consultation with the Acutuary and with
                  the Principal Employer's agreement) shall determine, except
                  that they must comply with the Contracting-out Requirements
                  referred to in sub-Clause 18.3 when granting benefits in
                  respect of any transfer payment which represents of consists
                  of Contracted-out Benefits.

         18.5     INFORMATION TO BE OBTAINED IN RESPECT OF TRANSFER PAYMENTS

                  Before accepting any transfer payment pursuant to this clause,
                  the trustees shall ascertain from the trustees or
                  administrators of the other scheme or arrangement:-

                  18.5.1   the amount (if any) of the transfer payment which
                           represents the Member's contributions to the other or
                           any previous scheme or arrangement;

                  18.5.2   the maximum amount of the transfer payment which the
                           member may take as benefit in the form of a cash lump
                           sum;

                  18.5.3   the period (if any) in which the Member will be
                           treated as having been employed in linked qualifying
                           service (within the meaning of section 179 of the
                           Pensions Schemes Act) under another scheme as a
                           result of the making of the transfer payment to the
                           Scheme; and

                  18.5.4   if the transfer payment represents or consists of
                           Contracted-out Benefits, such information as they may
                           require in order to comply with the Contracting-out
                           Requirements referred to in sub-Clause 18.3 in
                           relation to those rights.

         18.6     TRANSFERRED-IN MEMBERS' CONTRIBUTIONS

                  For the purpose of determining the benefits payable to or in
                  respect of the Member upon leaving Pensionable Service
                  otherwise than on retirement, the amount (if any) of any
                  transfer payment accepted by the Trustees pursuant to this
                  Clause which represents the Member's contributions to the
                  other or any previous scheme or arrangement shall be treated
                  as the Member's contributions to the Scheme.

                                       56
<PAGE>

         18.7     TRANSFER OF ASSETS

                  The Trustees shall have power to accept a transfer payment
                  under this Clause in the form of money or a transfer of other
                  assets, or a combination of each. Accordingly references in
                  this Clause to a transfer payment include references to a
                  transfer of other assets and references to the amount f any
                  transfer payment include references to the value of any such
                  other assets.

19       MAKING TRANSFER PAYMENTS

         19.1     POWER TO MAKE TRANSFER PAYMENTS

                  The Trustees shall have power, subject to and in accordance
                  with the provisions of this Clause, to make a transfer payment
                  to the trustees or administrators of another occupational
                  pension scheme or a personal pension scheme in relation to the
                  benefits accrued under the Scheme to or in respect of any
                  Member.

         19.2     INLAND REVENUE REQUIREMENTS

                  A transfer payment pursuant to sub-Clause 19.1 may only be
                  made to:-

                  19.2.1   a retirement benefits scheme (excluding a
                           free-standing additional voluntary contribution
                           scheme) approved or for which approval is being
                           sought under Chapter I of Part XIV of the Taxes Act;

                  19.2.2   a personal pension scheme approved or for which
                           approval is being sought under Chapter IV of Part XIV
                           of the Taxes Act;

                  19.2.3   a relevant statutory scheme within the meaning of
                           section 611A of the Taxes Act;

                  19.2.4   such other scheme or arrangement (including an
                           overseas scheme) to which Inland Revenue may permit a
                           transfer payment to be made form the Scheme.

                  For the purpose of sub-Clauses 19.2.1 and 19.2.2, the trustees
                  may only make a transfer payment to a retirement benefits
                  scheme or a personal pension scheme for which approval is
                  being sought under Chapter I or IV of Part XIV of the Taxes
                  Act if (a) the Inland Revenue have given specific authority
                  for the transfer payment to be made, or (b) the documents of
                  the receiving scheme expressly name the Scheme as one from
                  which transfers may be accepted.

         19.3     CONTRACTING-OUT REQUIREMENTS

                  The Trustees may make a transfer payment pursuant to this
                  clause in relation to contracted-out Benefits in the
                  circumstances and subject to the conditions set out in the
                  following sections of the Pension Schemes Act and regulations
                  made under them:-

                  19.3.1   in the case of Guaranteed Minimum Pensions, section
                           20 and the Contracting-out Transfer Regulations; and

                                       57
<PAGE>

                  19.3.2   in the case of Section 9(2B) Rights, section 12C and
                           the Contracting-out Transfer Regulations.

         19.4     PRESERVATION REQUIREMENTS

                  Where a Member's Pensionable Service terminates prior to
                  Normal Pension Age and he is entitled to Short Service Benefit
                  then the Benefits accrued under the Scheme to or in respect of
                  him may only be transferred:-

                  19.4.1   to:-

                           (a)      another occupational pension scheme with a
                                    view to the acquisition for the Member of
                                    transfer credits (as defined in section 181
                                    of the Pension Schemes Act) under the other
                                    scheme; or

                           (b)      a personal pension scheme or a self-employed
                                    pension arrangement (both as defined in
                                    section 181 of the Pension Schemes Act) with
                                    a view to acquiring rights for the Member
                                    under the rules of the scheme or
                                    arrangement; and

                  19.4.2   with the Member's consent (except that the member's
                           consent shall not be required in the circumstances
                           mentioned in regulation 12(1) of the Preservation
                           Regulations or in such other cases (if any) as may be
                           prescribed pursuant to section 73(4)(b) of the
                           Pension Schemes Act).

         19.5     EFFECT OF MEMBER EXERCISING RIGHT TO CASH EQUIVALENT

                  Where a Member (being a Member whose Pensionable Service
                  terminated at least one year before Normal Pension Age):-

                  19.5.1   has acquired a right under section 94 of the Pension
                           Schemes Act to the cash equivalent of the benefits
                           which have accrued to or in respect of him under the
                           Scheme;

                  19.5.2   has not lost that right in accordance with section 98
                           of the Pension Schemes Act;

                  19.5.3   has made an application in writing to the Trustees
                           under section 95 of the Pension Schemes Act requiring
                           them to use the cash equivalent in accordance with
                           section 95(2)(a) or (b); and

                  19.5.4   has not withdrawn that application in accordance with
                           section 100 of the Pension Schemes Act; the transfer
                           payment must comply with the requirements of Chapter
                           IV of Part IV of the Pension Schemes Act.

                                       58
<PAGE>

         19.6     MEMBER'S CONSENT TO TRANSFER-OUT

                  The Member's consent to the transfer in accordance with this
                  Clause of the benefits accrued to and in respect of him under
                  the Scheme shall only be required:-

                  19.6.1   if his Pensionable Service terminates prior to Normal
                           Pension Age;

                  19.6.2   if he is entitled to Short Service Benefit;

                  19.6.3   if the exception mentioned in sub-Clause 19.4.2 does
                           not apply;

                  19.6.4   if the circumstances mentioned in sub-Clause 19.5
                           have not arisen or no longer prevail; and

                  19.6.5   in the case if the transfer of Contracted-out
                           Benefits, to the extent required by the
                           Contracting-out referred to in sub-Clause 19.3.

         19.7     AMOUNT TO BE APPLIED IN MAKING TRANSFER PAYMENT

                  The amount of any transfer payment to be made pursuant to this
                  clause shall be equal to the cash equivalent, calculated in
                  accordance with section 97 of the Pension Schemes Act, of the
                  benefits accrued to and in respect of the Member under the
                  Scheme or, subject to sub-Clause 19.5 if applicable, such
                  other amount as the trustees, with the consent of the
                  Principal Employer, shall decide

         19.8     BULK TRANSFERS

                  Where the Trustees propose to make transfer payments
                  simultaneously in respect of more than one Member or other
                  person entitled to benefits under the Scheme, sub-Clause 19.7
                  shall apply so that those transfer payments may be calculated
                  in the aggregate.

                  Where the pursuant to the sub-Clause any transfer payments are
                  to be calculated in the aggregate, the Trustees shall have
                  power to make the aggregate transfer payment in such
                  installments and at such times as they may agree with the
                  Principal Employer.

         19.9     RELIANCE ON ACTUARY'S ADVICE

                  The Principal Employer and the Trustees may rely on the advice
                  of the Actuary as to any amount to be calculated for the
                  purposes of sub-Clauses 19.7 and 19.8.

                                       59
<PAGE>

         19.10    BENEFITS UNDER THE OTHER SCHEME: (A) TRANSFER WITH CONSENT

                  Where a transfer payment is made by the Trustees:-

                  19.10.1  pursuant to this Clause and with the consent of the
                           Member whose benefits are transferred, or

                  19.10.2  upon an application made by the Member pursuant to
                           section 95 of the Pensions Schemes Act,

                  the Member alone shall be responsible for agreeing with the
                  trustees or managers of the receiving scheme the benefits to
                  be granted under the receiving scheme in respect of the
                  transfer payment, and the Trustees shall have no obligation to
                  see to the application of the transfer payment by those
                  trustees or managers.

         19.11    BENEFITS UNDER THE OTHER SCHEME: (B) TRANSFER WITHOUT CONSENT

                  Where the Trustees propose to make a transfer payment:-

                  19.11.1  pursuant to this Clause but without the consent of
                           the Member whose benefits are to be transferred, and

                  19.11.2  otherwise than upon an application made by the Member
                           pursuant to section 95 of the Pension Schemes Act,

                  then before making the transfer payment the Trustees shall
                  satisfy themselves that the transfer credits to be acquired
                  for the Member under the receiving scheme are not less than
                  equal in value to the rights to be transferred, for which
                  purpose they shall be entitled to rely on the advice of the
                  Actuary (but without prejudice to the requirements of
                  regulation 12 of the Preservation Regulations in the case of
                  any member who has left Pensionable Service before his Normal
                  Pension Age and is entitled to Short Service Benefit).

         19.12    DISCHARGE OF TRUSTEES ON TRANSFER OUT

                  The making of a transfer payment in accordance with this
                  Clause discharges the Trustees from their liability to provide
                  the benefits to which the transfer payment relates. The
                  Trustees' discharge under this sub-Clause is without
                  prejudice, but in addition, to the statutory discharge
                  contained in section 99(1) of the Pension Schemes Act where a
                  transfer payment is made in accordance with Chapter IV of Part
                  IV of the Pension Schemes Act.

         19.13    POWER TO TRANSFER OUT FOLLOWING DEATH OF A MEMBER

                  Where as a result of the death of any Member any other person
                  is entitled to benefits under the Scheme, the Trustees' powers
                  under this Clause shall apply to the benefits accrued to any
                  such person in the same manner and subject to the same
                  restrictions as they do to benefits accrued to and in respect
                  of any Member except as regards any statutory provisions which
                  apply to the Member but not to any such other person..

                                       60
<PAGE>

         19.14    TRANSFERS OF ASSETS

                  The Trustees shall have power to make a transfer under this
                  Clause by making a payment of money or a transfer of other
                  assets, or a combination of each. Accordingly references in
                  this Clause to a transfer payment include references to a
                  transfer of other assets and references to the amount of any
                  transfer payment include references to the value of any such
                  other assets.

         19.15    MERGER WITH ANOTHER SCHEME

                  The Trustees may exercise their powers under this Clause so as
                  to merge the Scheme with another retirement benefits scheme by
                  paying and/or transferring to the trustees or managers of the
                  other scheme the whole of the assets of the Scheme subject to
                  and in accordance with the following:-

                  19.15.1  Before making any payment or transfer pursuant to
                           this sub-Clause the Trustees shall have power to set
                           aside and retain such sums as they may reasonably
                           require:-

                           (1)      in order to give effect to any outstanding
                                    application made by a Member under section
                                    95 of the Pension Schemes Act concerning the
                                    use of a cash equivalent;

                           (2)      in order to pay any costs and expenses
                                    payable by them out of the Fund;

                           (3)      in order to pay any tax for which they are
                                    accountable to the Inland Revenue; and

                           (4)      as a reserve against any other liability
                                    they may have incurred.

                  19.15.2  Instead of exercising the powers conferred on them by
                           sub-Clause 19.15.1 either at all or to their fullest
                           extent, the Trustees may (but shall not be bound to)
                           rely on an indemnity in their favour from the
                           trustees of the other scheme, any or all of the
                           Employers or any other person in respect of any or
                           all of the costs, expenses, tax or liabilities to
                           which sub-Clause 19.15.1 applies.

                  19.15.3  Upon completing the payment and/or transfer to the
                           trustees or managers of the other scheme of the whole
                           of the assets of the Scheme (after setting aside such
                           sums as they may decide to retain pursuant to
                           sub-Clause 19.15.1), the Trustees shall be discharged
                           from their liability to provide any pension or other
                           benefit for or in respect of any person.

20       BUYING OUT BENEFITS

         20.1     POWER TO BUY OUT

                  The Trustees shall have power, subject to and in accordance
                  with the provisions of this Clause, to buy out the benefits
                  accrued under the Scheme to and in respect of any Member:-

                                       61
<PAGE>

                  20.1.1   by entering into or taking out in the name of the
                           Member with an Authorised Insurance Company an
                           annuity contract or insurance policy by which such
                           benefits are secured; or

                  20.1.2   by transferring to the Member the benefit of any
                           annuity contract or insurance policy with an
                           Authorised Insurance Company which is already held by
                           the Trustees as an asset of the Scheme for the
                           provision of such benefits.

         20.2     BENEFITS TO BE PROVIDED ON BUYING OUT

                  In exercising their power under sub-Clause 20.1, the Trustees
                  shall have discretion to secure benefits which are:-

                  20.2.1   the same as those accrued to or in respect of the
                           Member under the Scheme; or

                  20.2.2   different from the accrued benefits in such ways and
                           to such extent as they shall think fit (in which case
                           sub-Clauses 20.3 and 20.7.2 apply for the protection
                           of the Member).

         20.3     AMOUNT TO BE APPLIED IN BUYING OUT

                  When buying out any benefits pursuant to sub-Clause 20.1.1 the
                  Trustees shall have power to pay to the Authorised Insurance
                  Company concerned such sum as may be needed for the purpose.

                  If the benefits to be secured by the annuity contract or
                  insurance policy to be entered into or taken out pursuant to
                  sub-Clause 20.1.1 are different from the accrued benefits
                  under the Scheme, the Trustees must be reasonably satisfied
                  that the payment made to the Authorised Insurance Company
                  concerned in order to buy out the accrued benefits is at least
                  equal to the value of the accrued benefits (in determining
                  which they may rely on advice from the Actuary).

         20.4     INLAND REVENUE REQUIREMENTS

                  Every annuity contract or insurance policy to which sub-Clause
                  20.1.1 applies:-

                  20.4.1   shall be in a form approved for the purposes of
                           sections 431(4)(d) or (e) or 592 (2)(g) of the Taxes
                           Act:-

                  20.4.2   shall contain such provisions as may be necessary in
                           order to satisfy the requirements of the Inland
                           Revenue in relation to such contracts or policies;
                           and

                  20.4.3   may contain such provisions as the Inland Revenue may
                           permit.

                  Every annuity contract or insurance policy to which sub-Clause
                  20.1.2 applies shall, when its benefit is transferred to the
                  Member, be endorsed so that it

                                       62
<PAGE>

                  satisfies the requirements of the Inland Revenue in relation
                  to such contracts or policies.

         20.5     CONTRACTING-OUT REQUIREMENTS

                  The buy-out pursuant to this Clause of Contracted-out Benefits
                  in respect of any Member must comply with the following
                  sections of the Pension Schemes Act and regulations made under
                  them:-

                  20.5.1   in the case of Guaranteed Minimum Pensions, section
                           19; and

                  20.5.2   in the case of Section 9(2B) Rights, section 12C.

         20.6     PRESERVATION REQUIREMENTS

                  Where a Member's Pensionable Service terminates prior to
                  Normal Pension Age and he is entitled to Short Service
                  Benefit, the benefits accrued to and in respect of him under
                  the Scheme may only be bought out by means of a transaction
                  which complies with section 81 of the Pension Schemes Act and
                  which:-

                  20.6.1   if benefits the same as those required to constitute
                           Short Service Benefit are being secured, satisfies
                           the requirements of regulation 6(2) of the
                           Preservation Regulations; or

                  20.6.2   if benefits different from those required to
                           constitute Short Service Benefit are being secured,
                           satisfies the requirements of regulation 9 of the
                           Preservation Regulations.

         20.7     MEMBER'S CONSENT TO BUY-OUT

                  The consent of a Member to the buy-out pursuant to this Clause
                  of the benefits accrued to and in respect of him under the
                  Scheme shall only be required:-

                  20.7.1   if he is a Member who left Pensionable Service with
                           an entitlement to Short Service Benefit;

                  20.7.2   if by virtue of section 73(2) of the Pension Schemes
                           Act and regulation 9 of the Preservation Regulations,
                           benefits different from those required to constitute
                           Short Service Benefit are being secured, but
                           regulation 9(4) of the Preservation Regulations does
                           not apply so as to allow the buy-out to be effected
                           without the Member's consent; and

                  20.7.3   in the case of the buy-out of the Member's
                           Contracted-out Benefits, to the extent required by
                           the Contracting-out Requirements referred to in
                           sub-Clause 20.5.

         20.8     DISCHARGE OF TRUSTEES ON BUYING OUT

                  The buy-out in accordance with this Clause of the benefits
                  accrued to and in respect of a Member under the Scheme
                  discharges the Trustees from their liability to provide those
                  benefits for and in respect of any person.

                                       63
<PAGE>

                  in the case of the buy-out in accordance with this Clause of
                  the benefits accrued to and in respect of a Member who leaves
                  Pensionable Service with an entitlement to Short Service
                  Benefit, the provisions of this sub-Clause are additional and
                  without prejudice to the provisions of section 81 of the
                  Pension Schemes Act.

         20.9     EFFECT OF MEMBER EXERCISING RIGHT TO CASH EQUIVALENT

                  Where a Member (being a Member whose Pensionable Service
                  terminates at least one year before his Normal Pension Age):-

                  20.9.1   has acquired a right under section 94 of the Pension
                           Schemes Act to the cash equivalent of the benefits
                           which have accrued to or in respect of him under the
                           Scheme;

                  20.9.2   has not lost that right in accordance with section 98
                           of the Pension Schemes Act;

                  20.9.3.  has made an application in writing to the Trustees
                           under section 95 of the Pension Schemes Act requiring
                           them to use the cash equivalent in accordance with
                           section 95(2)(c); and

                  20.9.4   has not withdrawn that application in accordance with
                           section 100 of the Pension Schemes Act;

                  the buy-out must comply with Chapter IV of Part IV of the
                  Pension Schemes Act.

         20.10    POWER TO BUY OUT FOLLOWING DEATH OF A MEMBER

                  Where as a result of the death of any Member any other person
                  is entitled to benefits under the Scheme, the Trustees' powers
                  under this Clause shall apply to the benefits accrued to any
                  such other person in the same manner and subject to the same
                  restrictions as they do to benefits accrued to and in respect
                  of any Member except as regards any statutory provisions which
                  apply to the Member but not to any such other person.

                                       64
<PAGE>

                          PART 8: PROVISION OF BENEFITS

21       AUGMENTATION: ADDITIONAL OR NEW BENEFITS

         21.1     REQUEST FROM EMPLOYERS FOR AUGMENTATION

                  Any Employer may request the Trustees to grant additional or
                  new benefits under the Scheme for or in respect of any of its
                  employees or former employees whether or not the employee or
                  former employee concerned is already a Member. The Principal
                  Employer may make such a request in relation to any of the
                  Members.

         21.2     TRUSTEE'S POWER OF AUGMENTATION

                  The Trustees shall have power to grant any benefits to which a
                  request made pursuant to sub-Clause 21.1 relates, subject to
                  the following conditions:-

                  21.2.1   the benefits do not exceed Revenue Limits;

                  21.2.2   the Employer which makes the request enters into such
                           arrangements (if any) with the Trustees as the
                           Trustees may require and the Principal Employer may
                           approve in order to fund the increase in the value of
                           the liabilities of the Scheme resulting from the
                           grant of the benefits.

22       TRUSTEES' DISCRETION AS TO LUMP SUM DEATH BENEFITS

         22.1     INTERPRETATION

                  For the purpose of this Clause the expression "Discretionary
                  Beneficiaries" means in relation to a Member:-

                  (1)      the Member's spouse or any ancestor or descendant
                           (however remote the relationship) of the Member or of
                           his spouse and the spouse of any such ancestor or
                           descendant;

                  (2)      any brother or sister of the Member or of his spouse
                           (whether of the whole or half-blood) and any
                           descendant or any such brother or sister and the
                           spouse of any such brother or sister or of any such
                           descendant of any such brother or sister;

                  (3)      any step-brother or step-sister of the Member or of
                           his spouse and any descendant of any such
                           step-brother or step-sister and the spouse of any
                           such step-brother or step-sister or of any such
                           descendant of any such step-brother or step-sister;

                  (4)      any uncle or aunt of the Member or of his spouse and
                           any descendant of any such uncle or aunt and the
                           spouse of any such uncle or aunt or of any such
                           descendant of any such uncle or aunt;

                  (whether or not, in any of cases (1) to (4) above the Member
                  was or was not liable for (or to contribute to) their
                  maintenance or support and including any such person related
                  by adoption);

                                       65
<PAGE>

                  (5)      any other natural person who in the Trustees' opinion
                           has been dependent or partly dependent on the Member
                           for maintenance or support;

                  (6)      any person (whether or not a natural person) entitled
                           to any interest in the Member's estate under any
                           testamentary disposition made by him and in respect
                           of which a grant of representation has been obtained;
                           and

                  (7)      any nominee (who or which may be an individual, a
                           charity or an association or a body corporate) of the
                           Member whom he wishes to be treated as a Beneficiary
                           for the purposes of the Scheme and whose name and
                           address the Member has notified to the Trustees in
                           writing.

                  For the purpose of this sub-Clause 22.1:-

                  (1)      "spouse" includes wife, husband, widow, widower and
                           any former wife or husband and a person with whom the
                           Member (or other relevant person) has gone through
                           any lawful ceremony of marriage;

                  (2)      "descendant" includes step-children; and

                  (3)      the class of Beneficiaries shall be closed at the
                           Member's death except that it shall include persons
                           then conceived who, if born, would have been
                           Beneficiaries.

         22.2     TRUSTEES' DISCRETION

                  Any lump sum payable as a result of the death of any Member
                  and expressed to be payable in accordance with this Clause
                  shall be held by the Trustees as follows:-

                  22.2.1   The Trustees shall have power to pay or apply the
                           whole or any part or parts of such lump sum to or for
                           the benefit of all or any one or more of the deceased
                           Member's Discretionary Beneficiaries in such manner
                           as the Trustees shall in their absolute discretion
                           think fit.

                  22.2.2   Without prejudice to the generality of the power
                           conferred on them by sub-Clause 22.2.1, the Trustees
                           shall have power to apply the whole or any part or
                           parts of the lump sum by settling it upon such trusts
                           and with and subject to such powers and provisions
                           and generally in such manner for the benefit of all
                           or such one or more of the deceased Members'
                           Discretionary Beneficiaries as the Trustees shall
                           think fit (including trusts and powers of a
                           discretionary character, powers and provisions
                           concerning the appointment, remuneration and
                           protection of trustees, and powers and provisions of
                           an administrative character, but having regard to the
                           rules of law relating to perpetuities).

                  22.2.3   in exercising their powers under sub-Clauses 22.2.1
                           or 22.2.2 the Trustees:-

                                       66
<PAGE>

                           (a)      shall not be required to ascertain the
                                    identity of all the persons who are objects
                                    of such powers or the financial or other
                                    circumstances of any of them, but may
                                    instead limit themselves to ascertaining the
                                    identity of such one or more of the persons
                                    who are objects of such powers as they shall
                                    think fit;

                           (b)      shall be entitled to consult with the
                                    Employer by which the Member was last
                                    employed prior to his death or with the
                                    Principal Employer and to rely upon the
                                    certificate of any such Employer that any
                                    person to or for whose benefit any amount is
                                    to be so paid or so applied is a
                                    Beneficiary; and

                           (c)      shall be entitled to rely upon the
                                    certificate of any solicitor or firm of
                                    solicitors to the effect that the trusts
                                    upon which any amount so transferred will be
                                    held are such that the amount must
                                    necessarily be paid to or applied for the
                                    benefit of one or more of the Beneficiaries;

                  22.2.4   All or any expenses, fees, stamp duty, or other
                           outgoings incurred by the Trustees for the purpose of
                           or in connection with any payment or application of
                           any such lump sum (regardless of how the lump sum is
                           paid or applied) shall if the Principal Employer so
                           decides be deducted from or paid out of such lump
                           sum.

                  22.2.5   The Trustees' powers under sub-Clauses 22.2.1 and
                           22.2.2 may only be exercised by them within the
                           period of two years after the Member's death.

                  22.2.6   To the extent that the Trustees do not pay or apply
                           the whole of any lump sum to which this Clause
                           relates within the period of two years after the
                           Member's death they shall at the end of such period
                           pay it (or the balance which has not been so paid or
                           applied) to the Member's estate, except that if as a
                           result of doing so, the sum would vest in the Crown,
                           the Duchy of Lancaster or the Duke of Cornwall as
                           bona vacantia or in any creditor of the Member, the
                           Trustees shall instead continue to hold it as part of
                           the Fund to apply it for such purposes of the Scheme
                           as they shall decide.

23       MISCELLANEOUS PROVISIONS CONCERNING BENEFITS

         23.1     INALIENABILITY OF BENEFITS SUBJECT TO EXCEPTIONS

                  Where any person has any entitlement or accrued right to any
                  benefit under the Scheme then, as required by section 91 of
                  the Pensions Act:-

                  (a)      it cannot be assigned, commuted or surrendered;

                  (b)      it cannot be charged or a lien exercised in respect
                           of it; and

                  (c)      no set-off can be exercised in respect of it;

                                       67
<PAGE>

                  and an agreement or purported agreement to effect any of those
                  things is unenforceable.

                  This sub-Clause is subject to such exceptions as are permitted
                  by section 91 of the Pensions Act.

         23.2     FORFEITURE PROHIBITED SUBJECT TO EXCEPTIONS

                  Where any person has any entitlement or accrued right to any
                  benefit under the Scheme, it cannot be forfeited except as
                  provided for by the following sub-Clauses of this Clause,
                  consistently with sections 92 and 93 of the Pensions Act.

                  23.2.1   EXCEPTION (1): UNCLAIMED BENEFITS. If any benefit
                           becomes payable from the Scheme and the Trustees
                           neither know the whereabouts of the person entitled
                           to it nor have received any claim for the benefit
                           from that person within 6 years of the date on which
                           it first became payable, the right of such person to
                           such benefit shall be forfeited on the expiration of
                           that period of 6 years, subject to the following
                           provisions of this sub-Clause:-

                           (a)      The application of this sub-Clause to any
                                    Guaranteed Minimum Pension is subject to the
                                    circumstances mentioned in this sub-Clause
                                    continuing to be prescribed by regulations
                                    made under section 21(2) of the Pension
                                    Schemes Act (being at the date of this Deed,
                                    regulation 61(2)(d) of the Contracting-out
                                    Regulations).

                           (b)      If after any benefit is forfeited in
                                    accordance with this sub-Clause the Trustees
                                    receive a claim for the benefit from the
                                    person who would have been entitled to it if
                                    it had not been forfeited, the Trustees with
                                    the consent of the Principal Employer may
                                    reinstate the forfeited benefit.

                           (c)      With the Principal Employer's consent the
                                    Trustees shall have power to add interest at
                                    such rate as they shall think fit to any
                                    payment made by them of any benefit which
                                    was not claimed when it first became payable
                                    (including any benefit forfeited and
                                    subsequently reinstated pursuant to
                                    paragraph (b) of this sub-Clause).

                  23.2.2   EXCEPTION (2): PURPORTED ALIENATION OR BANKRUPTCY.
                           The benefits of any Member or any other person
                           entitled to benefits under the Scheme shall be
                           forfeited upon the occurrence of either of the
                           following events:-

                           (a)      the Member or other person entering or
                                    attempting to enter into any transaction in
                                    respect of them or any of them if such
                                    transaction is or would be contrary to
                                    sub-Clause 23.1 and is not within the
                                    permitted exceptions to that sub-Clause as
                                    are provided for in the Trust Deeds; or

                           (b)      the Member or other person becoming
                                    bankrupt;

                                       68
<PAGE>

                           whether or not that event occurred before or after
                           the benefits became payable.

                           However, the right of any Member or the spouse of any
                           Member to a Guaranteed Minimum Pension (whether
                           current or prospective) may only be forfeited to the
                           extent permitted by the GMP Rules.

                  23.2.3   EXCEPTION (3): UNLAWFUL KILLING OF MEMBER. The
                           benefits of any person entitled to benefits on the
                           death of any Member shall be forfeited in the
                           circumstances prescribed by regulations made under
                           section 92(6) of the Pensions Act (being at the date
                           of this Deed regulations 6(1)(a) and 6(2) of the
                           Assignment etc. Regulations).

                  23.2.4   EXCEPTIONS (4) AND (5): The benefits of any person
                           may also be forfeited in order to discharge a
                           monetary obligation due to any Employer or a monetary
                           loss caused to the Scheme subject to and in
                           accordance with sub-Clauses 23.3 or 23.4.

                  23.2.5   REPAYMENT OF FORFEITED BENEFITS. If any benefits are
                           paid to any Member or other person after they have
                           been forfeited but before the Trustees become aware
                           of the circumstances resulting in forfeiture, they
                           shall be received and held by the Member or other
                           person concerned subject to the trusts of the Scheme
                           and to a duty to repay them to the Trustees
                           forthwith.

                  23.2.6   TRUSTEES' DISCRETION IN RELATION TO FORFEITED
                           BENEFITS. Where benefits are forfeited under
                           sub-Clause 23.2.2 the Trustees shall have power to
                           pay the benefits, or any of them to all or any of the
                           persons referred to in section 92(3) of the Pensions
                           Act.

         23.3     MONETARY OBLIGATION DUE TO EMPLOYER

                  This sub-Clause contains exceptions to sections 91 and 92 of
                  the Pensions Act as permitted by sections 91(5)(d) and 93 of
                  that Act. Where any amount becomes due to any Employer from
                  any person with any entitlement or accrued right to any
                  benefit under the Scheme arising out of a criminal, negligent
                  or fraudulent act or omission by the person in question, the
                  following provisions of this sub-Clause shall apply.

                  23.3.1   CHARGE ON BENEFITS. The person in question's
                           entitlement or accrued right shall stand charged with
                           the amount due to the Employer and the Employer shall
                           be entitled to exercise the charge by notice in
                           writing to the Trustees.

                  23.3.2   EXCEPTIONS FROM CHARGE: (1) TRANSFER CREDITS. In
                           accordance with section 91(5)(d) of the Pensions Act
                           and regulation 3 of the Assignment etc. Regulations,
                           the charge in favour of the Employer shall not apply
                           to transfer credits (as defined in section 124(1) of
                           the Pensions Act) other than those mentioned in
                           regulation 3 of the Assignment etc. Regulations.

                                       69
<PAGE>

                  23.3.3   EXCEPTIONS FROM CHARGE: (2) GMPS AND PROTECTED
                           RIGHTS. In accordance with section 91(7) of the
                           Pensions Act and section 159 of the Pension Schemes
                           Act, the charge in favour of the Employer shall not
                           apply to any Guaranteed Minimum Pensions or Protected
                           Rights.

                  23.3.4   AMOUNT OF CHARGE. As required by section 91(6)(a) of
                           the Pensions Act, the amount of the charge must not
                           exceed the amount of the monetary obligation due to
                           the Employer, or (if less) the value of the person in
                           questions' entitlement or accrued right. For this
                           purpose, the value of the person in question's
                           entitlement or accrued right shall be determined in
                           such manner as may for the time being be permitted by
                           regulations made under section 91(6)(a) of the
                           Pensions Act or if no such manner is for the time
                           being so prescribed, in such manner as the Trustees
                           shall determine.

                  23.3.5   CERTIFICATE. As required by section 91(6)(b) of the
                           Pensions Act, the pension in question must be given a
                           certificate showing the amount of the charge and its
                           effect on his benefits under the Scheme. Such
                           certificate shall be given by the Trustees.

                  23.3.6   DISPUTED LIABILITY. As required by section 91(6) of
                           the Pensions Act, where there is a dispute as to its
                           amount, the charge must not be exercised unless the
                           monetary obligation in question has become
                           enforceable under an order of a competent court or in
                           consequence of an award of an arbitrator or, in
                           Scotland, an arbiter to be appointed (failing
                           agreement between the parties) by the sheriff.

                  23.3.7   MANNER OF EXERCISING THE CHARGE. Subject to
                           sub-Clause 23.3.8 any charge which becomes
                           exercisable under this sub-Clause shall be
                           exercisable by setting off the amount of the person
                           in question's entitlement or accrued right which is
                           subject to the charge against any amount payable to
                           the Scheme by the Employer.

                  23.3.8   FORFEITURE. As permitted by section 93 of the
                           Pensions Act, the Employer may request the Trustees
                           to forfeit the person in question's entitlement or
                           accrued right in order to discharge the amount due to
                           the Employer, and pay a corresponding amount to the
                           Employer. However, this sub-Clause 23.3.8 shall not
                           apply to an entitlement or accrued right to the
                           extent that it is attributable to Pensionable Service
                           before the Revision Date. Any such forfeiture must
                           comply with the requirements of sections 93(2) to
                           93(5) of the Pensions Act concerning the extent to
                           which the entitlement or accrued right may be
                           forfeited, the consequences of a dispute as to the
                           amount of the monetary obligation in question, the
                           giving of a certificate (which shall be given by the
                           Trustees) and the payment of a corresponding amount
                           to the Employer.

         23.4     MONETARY OBLIGATION DUE OR LOSS CAUSED TO SCHEME

                  This sub-Clause contains exceptions to section 91 and 92 of
                  the Pensions Act as permitted by sections 91(5)(e) and 92(6)
                  of that Act.

                                       70
<PAGE>

                  Where any amount becomes due to the Scheme from any person
                  with any entitlement or accrued right to any benefit under the
                  Scheme:-

                  (a)      arising out of a criminal, negligent or fraudulent
                           act or omission by the person in question; or

                  (b)      if the person in question is or was a Trustee,
                           arising out of a breach of trust by him;

                  the following provisions of this sub-Clause shall apply.

                  23.4.1   CHARGE ON BENEFITS. The person in question's
                           entitlement or accrued right shall stand charged with
                           the amount due to the Scheme.

                  23.4.2   EXCEPTIONS FROM CHARGE: (1) RELIEF FROM BREACH OF
                           TRUST. In accordance with section 91(5)(e) of the
                           Pensions Act and regulation 4 of the Assignment etc.
                           Regulations, the charge in favour of the Scheme shall
                           not apply where the monetary obligation arises out of
                           a breach of trust by the person in question and the
                           court has relived him wholly or partly from personal
                           liability under section 61 of the Trustee Act 1925 or
                           section 32 of the Trusts (Scotland) Act 1921.

                  23.4.3   EXCEPTIONS FROM CHARGE: (2) GMPS AND PROTECTED
                           RIGHTS. In accordance with section 91(7) of the
                           Pensions Act and section 159 of the Pension Schemes
                           Act, the charge in favour of the Scheme shall not
                           apply to any Guaranteed Minimum Pensions or Protected
                           Rights.

                  23.4.4   AMOUNT OF CHARGE. As required by section 91(6)(a) of
                           the Pensions Act, the amount of the charge must not
                           exceed the amount of the monetary obligation due to
                           the Scheme, or (if less) the value of the person in
                           question's entitlement or accrued right. For this
                           purpose, the value of the person in question's
                           entitlement or accrued right shall be determined in
                           such manner as may for the time being be permitted by
                           regulations made under section 91(6)(a) of the
                           Pensions Act or if no such manner is for the time
                           being so prescribed, in such manner as the Trustees
                           shall determine.

                  23.4.5   CERTIFICATE. As required by section 91(6)(b) of the
                           Pensions Act, the pension in question must be given a
                           certificate showing the amount of the charge and its
                           effect on his benefits under the Scheme. Such
                           certificate shall be given by the Trustees.

                  23.4.6   DISPUTED LIABILITY. As required by section 91(6) of
                           the Pensions Act, where there is a dispute as to its
                           amount, the charge must not be exercised unless the
                           monetary obligation in question has become
                           enforceable under an order of a competent court or in
                           consequence of an award of an arbitrator or, in
                           Scotland, an arbiter to be appointed (failing
                           agreement between the parties) by the sheriff.

                                       71
<PAGE>

                  23.4.7   MANNER OF EXERCISING THE CHARGE. Any charge which
                           becomes exercisable under this sub-Clause shall be
                           exercisable by setting off the amount of the person
                           in question's entitlement or accrued right which is
                           subject to the charge against the amount due to the
                           Scheme from the person in question.

                  23.4.8   FORFEITURE. As permitted by section 92(6) of the
                           Pensions Act and regulations made under it (being at
                           the date of this Deed regulation 6(1)(b) and 6(3) of
                           the Assignment etc. Regulations), where the criminal,
                           negligent or fraudulent act or omission, or breach of
                           trust, has caused a monetary loss to the Scheme, the
                           person in question's entitlement or accrued right may
                           be forfeited by the Trustees to the extent that it
                           does not exceed the amount of the monetary loss to
                           the Scheme, or (if less) the value of the person's
                           entitlement or accrued right under the Scheme.

                  23.4.9   PRE-REVISION DATE BENEFITS. None of the preceding
                           provisions of this sub-Clause 23.4 shall apply to an
                           entitlement or accrued right to the extent that it is
                           attributable to Pensionable Service before the
                           Revision Date except insofar as the person in
                           question's entitlement or accrued right was capable
                           of being charged or forfeited before the coming into
                           force of the Pensions Act 1995 in respect of an
                           amount due or loss caused to the Scheme.

         23.5     PAYMENTS TO INFANTS AND PERSONS UNDER INCAPACITY

                  Subject to the GMP Rules in the case of Guaranteed Minimum
                  Pensions, if any benefit under the Scheme is payable to any
                  beneficiary of the Scheme who is an infant or under incapacity
                  the following provisions of this sub-Clause shall apply:-

                  23.5.1   if the beneficiary is an infant, the Trustees shall
                           have power to pay the benefit to him personally;

                  23.5.2   the Trustees shall have power to pay the benefit or
                           any part of it to such individual, body corporate or
                           institution for the benefit of the beneficiary as the
                           Trustees shall think fit; and

                  23.5.3   the receipt of (a) the beneficiary if he is an infant
                           and the payment is made pursuant to sub-Clause
                           23.5.1, or (b) the individual, body corporate or
                           institution to whom or to which the payment is made
                           in the case of a payment made pursuant to sub-Clause
                           23.5.2, shall be a complete discharge to the Trustees
                           for the payment and shall exonerate them from all
                           further concern or responsibility in relation to it.

                  For the purpose of this sub-Clause:-

                  (a)      an individual shall be treated as being under
                           incapacity if for any reason (including illness or
                           age) he is unable to give reasoned consideration to
                           financial matters;

                                       72
<PAGE>

                  (b)      the Trustees shall be entitled to accept as
                           conclusive evidence of a beneficiary of the Scheme
                           being under incapacity a certificate signed by any
                           person whom the Trustees consider to be competent to
                           give such certificate.

         23.6     POLYGAMOUS MARRIAGES

                  Where any male Member marries under a law which allows
                  polygamy and the Member dies leaving more than one wife to
                  whom he was lawfully married at the date of his death, any
                  benefit payable under the Scheme which is expressed to be
                  payable to the Member's spouse shall be payable to such one or
                  more of the Member's wives, and, if to more than one, in such
                  proportions, as the Trustees may in their discretion think
                  fit.

                                       73
<PAGE>

                        PART 9: AMENDMENT AND TERMINATION

24       AMENDMENT

         24.1     POWER OF AMENDMENT

                  The Trustees may at any time, with the Principal Employer's
                  consent, by deed amend or add to all or any of the trusts,
                  powers and provisions of the Trust Deeds.

         24.2     EFFECTIVE DATE OF AMENDMENTS

                  Any amendment or addition made pursuant to sub-Clause 24.1
                  shall have effect from such time as may be specified in the
                  deed by which it is made, and such time may be the date of
                  such deed or any reasonable time previous or subsequent to it,
                  so as to give the amendment or addition retrospective or
                  future effect (as the case may be).

         24.3     TRUSTEES' STATUTORY POWERS OF AMENDMENT

                  The preceding sub-Clauses of this Clause are without prejudice
                  to the Trustees' powers under the following sections of the
                  Pensions Act, namely:-

                  24.3.1   section 65 (equal treatment rule; consequential
                           alteration of schemes); and

                  24.3.2   section 68 (power of trustees to modify schemes by
                           resolution).

         24.4     STATUTORY RESTRICTIONS ON POWER OF AMENDMENT

                  No amendment may be made pursuant to this Clause:-

                  24.4.1   which would contravene section 67 if the Pensions Act
                           (restriction on power to alter schemes); or

                  24.4.2   which would contravene section 37 of the Pension
                           Schemes Act (alteration of rules of contracted-out
                           schemes).

25       TERMINATION OF THE SCHEME

         25.1     TERMINATION BY THE PRINCIPAL EMPLOYER

                  The Principal Employer may terminate the Scheme at any time by
                  serving notice to that effect on the Trustees. The notice
                  shall be of such length (including summary notice) as the
                  Principal Employer may decide. The Scheme shall terminate on
                  the date when the notice expires (or the date when it is
                  served, if it is summary notice).

                                       74
<PAGE>

         25.2     TERMINATION BY THE TRUSTEES

                  The Trustees may terminate the Scheme in any of the following
                  circumstances:-

                  25.2.1   if the Principal Employer exercises its right to
                           discontinue contributions under sub-Clause 13.3; or

                  25.2.2   if the Principal Employer fails to pay any sum due
                           from it to the Trustees under the Scheme within
                           fourteen days (or such longer period as the Trustees
                           may allow) after the Trustees demand payment of such
                           sum from the Principal Employer;

                  25.2.3   if the Principal Employer is materially in breach of
                           any of its other obligations under the Scheme and,
                           where the breach is capable of remedy, the Principal
                           Employer fails to remedy such breach within one month
                           after the Trustees serve notice on it requiring the
                           breach to be remedied;

                  25.2.4   if sub-Clause 5.6 applies because of the occurrence
                           of any of the events listed in sub-Clause 5.5;

                  25.2.5   if the Principal Employer is wound up; or

                  25.2.6   if all the Employers exercise (whether at the same
                           time or different times) their right to discontinue
                           contributions under sub-Clause 13.3;

                  by making a written declaration to that effect. The Trustees
                  shall then notify the Employers and the Members that they have
                  done so. The Scheme shall terminate on the date of such
                  declaration.

         25.3     PERPETUITY PERIOD

                  In accordance with section 1 of the Perpetuities and
                  Accumulations Act 1964, the perpetuity period applicable to
                  the Scheme shall be 80 years from 10 October 1988. The
                  specification of a perpetuity period in this sub-Clause shall
                  be without prejudice to the exemption of the Scheme from the
                  operation of any rules of law relating to perpetuities by
                  virtue of it qualifying under section 163 of the Pension
                  Schemes Act.

         25.4     TERMINATION AT OR FOLLOWING END OF PERPETUITY PERIOD

                  If the Scheme has not previously terminated under the
                  sub-Clauses 25.1 or 25.2, it shall terminate automatically on
                  the later of:-

                  25.4.1   the date when the perpetuity period mentioned in
                           sub-Clause 25.3 expires; and

                  25.4.2   the date when the Scheme ceases to qualify under
                           section 163 of the Pension Schemes Act or any other
                           statutory provision exempting it from the operation
                           of any rules of law relating to perpetuity.

                                       75
<PAGE>

         25.5     CERTAIN CONSEQUENCES OF TERMINATION

                  Without prejudice to the following sub-Clauses of this Clause,
                  and Clause 26, the termination of the Scheme shall have the
                  following consequences:-

                  25.5.1   all Members in Pensionable Service on the date when
                           the Scheme terminates shall be deemed to have left
                           Pensionable Service on that date;

                  25.5.2   no person may be admitted or re-admitted to
                           membership of the Scheme after that date;

                  25.5.3   the Employers shall cease to have any obligation to
                           pay any contributions to the Scheme except
                           contributions due but unpaid at the date of
                           termination and any sum payable by them pursuant to
                           section 75 of the Pensions Act.

         25.6     CONTINUATION OF SCHEME AS PAID-UP AND CLOSED SCHEME FOLLOWING
                  TERMINATION

                  Following the termination of the Scheme pursuant to this
                  Clause the Trustees shall continue to administer and manage
                  the Scheme as a paid-up and closed scheme unless or until they
                  are required by sub-Clause 25.7 to wind up. For so long as the
                  Scheme continues as a paid-up and closed scheme all the powers
                  vested in the Trustees and the Employers by the Trust Deeds
                  and the Rules shall remain in force, subject as provided in
                  sub-Clause 25.5.

         25.7     WINDING UP FOLLOWING TERMINATION

                  The Trustees shall proceed to wind up the Scheme in accordance
                  with Clause 26 as soon as practicable after the earliest of
                  the following dates:-

                  25.7.1   if the Scheme terminates pursuant to sub-Clause 25.4
                           (operation of perpetuity rules), the date when the
                           Scheme terminates;

                  25.7.2   such date as the Trustees resolve to wind up the
                           Scheme;

                  25.7.3   such date with effect from which the Principal
                           Employer directs the Trustees to proceed to wind up
                           the Scheme (being a date not earlier than the date of
                           such direction).

         25.8     NOTICE OF TERMINATION TO MEMBERS AND OTHERS

                  As soon as practicable and, in any event, within three months
                  after the termination of the Scheme, the Trustees shall inform
                  all Members of the Scheme of the termination of the Scheme and
                  the steps which the Trustees propose to take following
                  termination.

                                       76
<PAGE>

26       WINDING UP

         26.1     COMMENCEMENT

                  The winding up of the Scheme shall commence on the earliest of
                  the dates mentioned in sub-Clause 25.7.

         26.2     POWERS AND DISCRETIONS

                  All the powers and discretions vested in the Trustees and the
                  Principal Employer by the Trust Deeds (other than by Clause
                  25), or by law (including the power to amend this Clause)
                  shall, except as provided in sub-Clause 25.5.2, remain
                  exercisable by them respectively until the completion of
                  winding up.

         26.3     MEMBERS' RIGHTS

                  The Member's rights under the Rules:-

                  26.3.1   to commute the whole or any part of their benefits in
                           return for the payment of a lump sum, and

                  26.3.2   to surrender part of their entitlement to a pension
                           in return for the payment of a pension to a spouse or
                           Dependent,

                  shall remain exercisable in accordance with the Rules until
                  such time as the Trustees (having regard to the need to
                  determine the liabilities of the Scheme before securing them)
                  declare in writing that such rights have ceased to be
                  exercisable.

                  Where a Member has a right under Chapter IV of Part IV of the
                  Pension Schemes Act to take the cash equivalent of his accrued
                  benefits under the Scheme, such right remains exercisable
                  until the Scheme is wound up, unless the Member previously
                  loses the right pursuant to section 98(7) of the Pension
                  Schemes Act.

         26.4     REALISATION OF ASSETS

                  When the Scheme fails to be wound up pursuant to sub-Clause
                  25.7, the Trustees shall realize the assets of the Fund in
                  such manner and upon such terms and conditions as they shall
                  think fit, subject to and with the following powers:-

                  26.4.1.  power to delay the realisation of any or all of the
                           assets of the Fund for as long as they shall think
                           fit (so that they may continue to exercise all or any
                           of the powers of investment conferred on them by the
                           Trust Deeds pending realisation); and

                  26.4.2   power to place any realisation proceeds on current or
                           deposit account with any bank or other financial
                           institution.

                                       77
<PAGE>

         26.5     CREATION OF A RESERVE FOR COSTS AND EXPENSES

                  Before applying the assets of the Scheme to secure its
                  liabilities in accordance with the following sub-Clauses of
                  this Clause, the Trustees shall set aside in a reserve such
                  sum as they consider to be a prudent estimate of the costs and
                  expenses (1) incurred by them prior to or in the course of
                  winding up the Scheme and not previously paid and (2) likely
                  to be incurred by them thereafter in the course of winding up.

         26.6     ORDER OF PRIORITY FOR SECURING SCHEME'S LIABILITIES

                  Upon the winding up of the Scheme the assets of the Scheme
                  shall be applied by the Trustees in securing its liabilities
                  in the order required by section 73 of the Pensions Act and
                  regulations made under it (being at the date of this Deed The
                  Occupational Pension Schemes (Winding Up) Regulations 1996 (SI
                  1996 No. 3126)).

         26.7     VALUING THE SCHEME'S LIABILITIES

                  For the purposes of this Clause, the value of the Scheme's
                  liabilities in respect of pensions and other benefits shall,
                  subject to the requirements of section 73 of the Pensions Act,
                  be calculated on such basis as the Trustees shall decide after
                  consultation with the Actuary.

         26.8     DEFICIT ON WINDING UP

                  If, notwithstanding any sums received by the Trustees in
                  discharge of any debt due from any of the Employers to them
                  pursuant to section 75 of the Pensions Act, the assets of the
                  Scheme (after the payment of costs and expenses and the
                  setting aside of a reserve pursuant to sub-Clause 26.5) are
                  insufficient to secure in full all of its liabilities in
                  respect of pensions and other benefits, the Trustees shall
                  apply the available assets in accordance with section 73(2) of
                  the Pensions Act.

         26.9     SURPLUS ON WINDING UP

                  If the assets of the Scheme (after the payment of costs and
                  expenses and the setting aside of a reserve pursuant to
                  sub-Clause 26.5) are more than sufficient to secure in full
                  all of its liabilities in respect of pensions and other
                  benefits, the Trustees shall apply in securing those
                  liabilities such part of the assets as is required to secure
                  them and shall deal with the surplus as follows:-

                  26.9.1   first, by applying such part (if any) of the surplus
                           in providing, subject to Revenue Limits, such
                           additional or new benefits as the Principal Employer
                           shall direct; and

                  26.9.2.  secondly, subject to compliance with section 76 of
                           the Pensions Act ("Excess assets on winding up") by
                           paying any remaining balance to the Employers (and,
                           if more than one, in such proportions as shall be
                           determined by the Actuary) as it may specify, having
                           first deducted

                                       78
<PAGE>

                           any tax for which the Trustees may be accountable to
                           the Inland Revenue.

         26.10    POWER TO SECURE LIABILITIES ON AN INTERIM BASIS

                  If for any reason the Trustees experience delay in realising
                  the assets of the Scheme (including the discharge of any debt
                  due to them from any of the Employers under section 75 of the
                  Pensions Act) or in determining the Scheme's liabilities in
                  respect of pensions and other benefits, they shall have power
                  to apply such part of the assets of the Scheme as they shall
                  think fit in securing any or all of such liabilities as they
                  are able to determine but not so as to prejudice the securing
                  of the Scheme's liabilities in the order of priority referred
                  to in sub-Clause 26.6.

         26.11    MANNER IN WHICH LIABILITIES TO BE SECURED

                  Subject as provided in section 74 of the Pensions Act, the
                  Trustees shall have power to secure in any one or more of the
                  following ways the liabilities of the Scheme in respect of
                  pensions and other benefits which pursuant to the preceding
                  sub-Clauses of this Clause are required to be secured on the
                  winding-up of the Scheme:-

                  26.11.1  by making a transfer payment to another retirement
                           benefits scheme or a personal pension scheme in
                           accordance with Clause 19;

                  26.11.2  by buying them out in accordance with Clause 20; and

                  26.11.3  by paying (a) such lump sums in commutation of
                           entitlements to pension as may be permitted by the
                           Rules or (b) such lump sums as may be payable under
                           the Rules on the death of any person.

         26.12    INFORMATION TO MEMBERS AND OTHERS CONCERNING WINDING UP

                  The Trustees' duty to provide information to Members and other
                  persons entitled to benefits from the Scheme concerning the
                  winding up of the Scheme is limited to the duties imposed on
                  them by paragraphs (10) to (12) of regulation 5 of the
                  Disclosure Regulations.

                  The Trustees shall provide such information to the Principal
                  Employer concerning the winding up of the Scheme as the
                  Principal Employer may reasonably require and shall do so as
                  soon as practicable and, in any event, within one month after
                  receiving any request for such information from the Principal
                  Employer.

         26.13    TRUSTEES' GENERAL POWER ON WINDING UP

                  Notwithstanding the specific powers conferred on them by this
                  Clause, the Trustees shall have power to do all such acts
                  matters or things as they shall think fit in order to
                  achieve:-

                  26.13.1  the orderly winding up of the Scheme; and

                                       79
<PAGE>

                  26.13.2  (subject to the order of priority referred to in
                           sub-Clause 26.6) such application of the assets of
                           the Scheme in securing its liabilities as they shall
                           think fair and equitable.

                                       80
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                         SCHEDULE 3: STAFF SECTION RULES

SECTION 1:  INTRODUCTION; ELIGIBILITY AND MEMBERSHIP......................   87

1        INTRODUCTION.....................................................   87
         1.1      Interpretation..........................................   87
         1.2      Defined terms...........................................   87
         1.3      Application.............................................   87
         1.4      Transfer to another Section.............................   88
         1.5      Member categories.......................................   88

2        ELIGIBILITY AND MEMBERSHIP.......................................   88
         2.1      Eligibility conditions..................................   88
         2.2      Evidence as to fulfilment of conditions.................   88
         2.3      Admission of new Employees to membership when first
                  eligible................................................   88
         2.4      Medical and other evidence..............................   89
         2.5      Discretionary admission to membership...................   89
         2.6      Effect of admission to membership.......................   89
         2.7      Opting out..............................................   89
         2.8      Re-joining the Scheme after opting out..................   89
         2.9      Effect of providing incomplete or inaccurate
                  information.............................................   90

SECTION 2:  MEMBERS' CONTRIBUTIONS........................................   91

3        MEMBERS' CONTRIBUTIONS...........................................   91
         3.1      Compulsory contributions................................   91
         3.2      Voluntary contributions.................................   91
         3.3      Notice to be given by Members concerning voluntary
                  contributions...........................................   91
         3.4      Benefits in respect of voluntary contributions..........   91
         3.5      Repayment of surplus voluntary contributions............   91
         3.6      Deduction of contributions from salary or pay...........   92
         3.7      Termination of Member's contributions...................   92
         3.8      Member's contributions during temporary absence.........   92

SECTION 3:  PENSIONABLE SERVICE AND TEMPORARY ABSENCE.....................   93

4        CALCULATION OF STAFF PENSIONABLE SERVICE.........................   93
         4.1      Purpose of this Rule....................................   93
         4.2      Staff Pensionable Service...............................   93
         4.3      More than one period of Staff Pensionable Service.......   93
         4.4      Change of Scheme Employer...............................   94

5        MEMBERS IN PART-TIME EMPLOYMENT..................................   94
         5.1      Purpose of this Rule....................................   94
         5.2      Interpretation..........................................   94

                                       81
<PAGE>

         5.3      Members to whom this Rule applies.......................   94
         5.4      Conversion into full-time equivalent....................   95
         5.5      Treatment of notional Pensionable Service...............   95

6        CONSEQUENCES OF TEMPORARY ABSENCE................................   95
         6.1      Purpose of this Rule....................................   95
         6.2      Maternity absence:  (a) paid............................   96
         6.3      Maternity absence:  (b) unpaid..........................   96
         6.4      Other causes of temporary absence.......................   97

SECTION 4:  MEMBER'S RETIREMENT BENEFITS..................................   99

7        MEMBERS' RETIREMENT BENEFITS:  GENERAL...........................   99
         7.1      Member's retirement benefits............................   99
         7.2      Other provisions applicable to retirement pensions......   99
         7.3      Supplements to retirement pensions......................   99
         7.4      Contracting-out and Inland Revenue requirements.........  100

8        NORMAL RETIREMENT................................................  100
         8.1      Member's entitlement to pension from Normal Retirement
                  Age.....................................................  100
         8.2      Initial annual amount of Member's pension...............  100
         8.3      Transferred Racal RBS Members...........................  100

9        EARLY RETIREMENT:  (A) GENERALLY.................................  100
         9.1      Circumstances in which Member's pension may commence
                  early...................................................  100
         9.2      Preservation requirements...............................  101
         9.3      GMP requirements........................................  101

10       EARLY RETIREMENT:  (B) VOLUNTARY.................................  101
         10.1     When payable............................................  101
         10.2     Initial annual amount...................................  101
         10.3     Adjustment for male Pre-88 Members......................  102
         10.4     Adjustment for female Pre-88 Members....................  102
         10.5     Transferred Racal RBS Members...........................  102

11       EARLY RETIREMENT:  (C) REDUNDANCY................................  103
         11.1     When payable............................................  103
         11.2     Initial annual amount...................................  103
         11.3     Adjustment for male Pre-88 Members......................  103
         11.4     Adjustment for female Pre-88 Members....................  103
         11.5     Reliance by Trustees on statements from Employers.......  104
         11.5     Transferred Racal RBS Members...........................  104

12       EARLY RETIREMENT:  (D) SERIOUS ILL-HEALTH........................  104
         12.1     When payable............................................  104
         12.2     Procedure...............................................  104
         12.3     Medical evidence before commencement of pension.........  105
         12.4     Commencement............................................  105
         12.5     Initial annual amount...................................  105
         12.6     Subsequent adjustments..................................  105

                                       82
<PAGE>

         12.7     Medical evidence after commencement of pension..........  105
         12.8     Transferred Racal RBS Members...........................  106

13       LATE RETIREMENT..................................................  106
         13.1     Commencement of late retirement pension.................  106
         13.2     Initial annual amount of late retirement pension........  106
         13.3     Transferred Racal RBS Members...........................  106

SECTION 5:  ALTERNATIVES TO MEMBER'S PENSION..............................  107

14       COMMUTATION......................................................  107
         14.1     Member's right to commute...............................  107
         14.2     Member's election to commute............................  107
         14.3     Maximum lump sum........................................  107
         14.4     Member continuing in Service after Normal Retirement
                  Age.....................................................  107
         14.5     Benefits from Member's voluntary contributions..........  107
         14.6     Exceptional circumstances of serious ill-health.........  108
         14.7     Trivial pensions........................................  108
         14.8     Commutation factors.....................................  108
         14.9     GMP requirements........................................  108

15       SURRENDER OPTION.................................................  108
         15.1     Trustees' discretion to permit surrender................  108
         15.2     Member's election to surrender..........................  109
         15.3     Revenue and contracting-out limits on surrender.........  109
         15.4     Surrender factors.......................................  109
         15.5     Effect of death of spouse or nominated Dependant........  109
         15.6     Revocation of Member's election.........................  110
         15.7     Further election following cancellation or revocation...  110

SECTION 6:  BENEFITS ON MEMBER'S DEATH....................................  111

16       BENEFITS OF MEMBER'S DEATH:  GENERAL.............................  111
         16.1     Categories of benefit payable...........................  111
         16.2     Provisions applicable to pensions on Member's death.....  111

17       DEATH IN PENSIONABLE SERVICE.....................................  112
         17.1     Lump sum benefit........................................  112
         17.2     Spouse's pension........................................  113
         17.3     Financial Dependant's pension...........................  113
         17.4     Children's pensions:....................................  113

18       DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE...............  115
         18.1     Lump sum benefit........................................  115
         18.2     Spouse's pension........................................  115
         18.3     Financial Dependant's pension...........................  115
         18.4     Children's pensions.....................................  116

19       DEATH AFTER RETIREMENT...........................................  117
         19.1     Lump sum benefit:  (a) 5 year guarantee.................  117

                                       83
<PAGE>

         19.2     Lump sum benefit:  (b) continued life cover in special
                  cases...................................................  117
         19.3     Spouse's pension........................................  117
         19.4     Financial Dependant's pension...........................  118
         19.5     Children's pensions.....................................  118

SECTION 7:  EARLY LEAVERS.................................................  120

20       EARLY LEAVERS:  GENERAL..........................................  120
         20.1     Application of this Section to early leavers............  120
         20.2     Early leavers not qualifying for preserved benefits.....  120
         20.3     Early leavers who qualify for preserved benefits........  120

21       EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS..................  120
         21.1     Refund of contributions.................................  120
         21.2     Transfer option.........................................  121

22       EARLY LEAVER ENTITLED TO PRESERVED BENEFITS......................  121
         22.1     Entitlement to preserved benefits.......................  121
         22.2     Commutation and/or surrender of preserved pension.......  121
         22.3     Other provisions applicable to preserved pensions.......  121
         22.4     Supplements to preserved pensions.......................  121
         22.5     Contracting-out and Inland Revenue requirements.........  122
         22.6     Alternatives to preserved benefits......................  122

23       COMMENCEMENT OF PRESERVED BENEFITS AT NRA........................  123
         23.1     Payment.................................................  123
         23.2     Initial annual amount...................................  123
         23.3     Transferred Racal RBS Members...........................  123

24       COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA....................  123
         24.1     Conditions for early commencement.......................  123
         24.2     Initial annual amount...................................  124
         24.3     Adjustment for male Pre-88 Members......................  124
         24.4     Adjustment for female Pre-88 Members....................  124
         24.5     Transferred Racal RBS Members...........................  125
         24.6     Preservation requirements...............................  125

25       COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA.....................  125
         25.1     Conditions for late commencement: (a) 89 Limits
                  Members.................................................  125
         25.2     Conditions for late commencement: (b) other Members.....  125
         25.3     Initial annual amount...................................  126
         25.4     Transferred Racal RBS Members...........................  126
         25.5     Preservation requirements...............................  126

26       BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS........  126
         26.1     Lump sum on death of Deferred Member whilst benefits
                  preserved...............................................  126
         26.2     Spouse's pension on death of Deferred Member whilst
                  benefits preserved......................................  127
         26.3     Financial Dependant's pension...........................  127
         26.4     Benefits on death of Deferred Member after pension
                  commences...............................................  127
         26.5     Other provisions applicable to survivors' pensions......  127

                                       84
<PAGE>

SECTION 8:  PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES.................  128

27       PAYMENT OF PENSIONS..............................................  128
         27.1     Payment arrangements....................................  128
         27.2     Power to change payment arrangements....................  128
         27.3     Overpayment of pensions.................................  128

28       PENSION INCREASES................................................  128
         28.1     Guaranteed Minimum Pensions.............................  128
         28.2     Other pensions..........................................  128
         28.3     Members in Pensionable Service on 1 September 1993......  129
         28.4     First annual increase...................................  129

                                       85
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                       86
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                     SECOND DEFINITIVE TRUST DEED AND RULES

                         SCHEDULE 3: STAFF SECTION RULES

               SECTION 1: INTRODUCTION; ELIGIBILITY AND MEMBERSHIP

1.       INTRODUCTION

         1.1      INTERPRETATION

                  These Rules is this Schedule shall be interpreted in
                  accordance with Schedule 1 to this Deed.

                  Any reference in this Schedule to a numbered Rule is to one of
                  these Rules unless the reference is to a rule in one of the
                  other Schedules.

                  Any reference in this Schedule to a Member is to a Member to
                  whom this Schedule applies, as stated in sub-Rule 1.3.

         1.2      DEFINED TERMS

                  In these Rules the following words and expressions have the
                  following meanings respectively:-

                  "NORMAL RETIREMENT AGE" means the date of the Member's 65th
                  birthday;

                  "PRE-88 MEMBERS" means Members whose Service commenced before
                  January 1988;

                  "RACAL RBS SERVICE" means, in relation to a Transferred Racal
                  RBS Member, service which qualified for benefit under the
                  Racal RBS Scheme expressed in complete months;

                  "STAFF PENSIONABLE SERVICE" means the total of the periods
                  referred to in sub-Rule 4.2;

                  "TRANSFERRED RACAL RBS MEMBER" means a Member who:-

                  (1)      was a member of the Racal RBS Scheme on 31 October
                           1988; and

                  (2)      joined this Scheme on 1 November 1988 as a full
                           contributory Member.

         1.3      APPLICATION

                  These Rules apply:-

                  (1)      to all Members who are in Pensionable Service on the
                           Revision Date and immediately before the Revision
                           Date were in pensionable service under this Scheme;
                           and

                                       87
<PAGE>

                  (2)      to all Members who become Members of the Staff
                           Section on or after that date in accordance with Rule
                           2.

         1.4      TRANSFER TO ANOTHER SECTION

                  When any Member of this Section becomes a Member of another
                  Section of the Scheme, he shall cease to be entitled to
                  benefits under this Section.

         1.5      MEMBER CATEGORIES

                  Pre-88 Members had Normal Retirement Ages of 65 in the case of
                  men and 60 in the case of women until 31 August 1993.
                  Irrespective of their sex, Normal Retirement Age under the
                  Scheme for these Members became their 65th birthday with
                  effect from 1 September 1993.

                  Members whose Service (as opposed to their Pensionable
                  Service) commenced on or after 1 January 1988 have always had
                  a Normal Retirement Age of 65 which applies to both sexes.
                  Members whose service commences on or after the Revision Date
                  also have a Normal Retirement Age of 65.

2        ELIGIBILITY AND MEMBERSHIP

         2.1      ELIGIBILITY CONDITIONS

                  An Employee is eligible to become a Member of the Staff
                  Section if he fulfils the following eligibility conditions
                  unless he is informed by the Principal Employer that he is not
                  eligible to become a Member:-

                  (1)      he is employed by one or more of the Employers as a
                           permanent employee; and

                  (2)      he is aged 18 years or over but under 64 years 11
                           months.

                  An Employee is not eligible to become a Member on the Staff
                  Section if and for so long as he pays contributions to a
                  personal pension scheme approved or for which approval is
                  being sought under Chapter IV of Part XIV of the Taxes Act or
                  if he is eligible to become a Member of the Executive Manager
                  and Senior Manager Section or the Directors Section.

         2.2      EVIDENCE AS TO FULFILMENT OF CONDITIONS

                  The Trustees may rely on a statement from an Employer as to
                  the fulfilment of the conditions in sub-Rule 2.1 in respect of
                  any Employee.

         2.3      ADMISSION OF NEW EMPLOYEES TO MEMBERSHIP WHEN FIRST ELIGIBLE

                  An Employee shall be admitted to membership of the Staff
                  Section with effect from the first date on which he satisfies
                  all the eligibility conditions set out in sub-Rule 2.1 subject
                  to the Trustees' powers under sub-Rule 2.4 and (having

                                       88
<PAGE>

                  regard to section 160 of the Pension Schemes Act) with the
                  right under sub-Rule 2.7 to opt out if he does not wish to be
                  or remain a Member.

         2.4      MEDICAL AND OTHER EVIDENCE

                  Before being admitted to membership of the Staff Section an
                  Employee shall produce such evidence of health, age and such
                  other matters (if any) as the Trustees may require.

                  If when required to do so pursuant to this sub-Rule an
                  Employee fails to produce evidence of good health to the
                  satisfaction of the Trustees, the Trustees may decline to
                  admit him to membership or they may offer him membership on
                  such special terms (including as to modified or partial
                  benefits) as the Trustees with the consent of the Principal
                  Employer shall decide.

         2.5      DISCRETIONARY ADMISSION TO MEMBERSHIP

                  An Employee who would not otherwise be eligible for membership
                  of the Staff Section may be admitted to membership of the
                  Staff Section with the consent of the Principal Employer and
                  the Trustees and on such terms and at such time as may be
                  agreed between the Trustees and the Principal Employer.

         2.6      EFFECT OF ADMISSION TO MEMBERSHIP

                  Upon being admitted to membership of the Staff Section an
                  Employee becomes a Member and is bound by the Trust Deeds.

         2.7      OPTING OUT

                  A Member may at any time withdraw from active membership of
                  the Staff Section by giving to his Employer for recording and
                  transmission to the Trustees not less than one month's notice
                  to that effect ending on the last day of any month on such
                  form as the Trustees may prescribe for that purpose, or such
                  lesser period of notice (if any) as the Trustees and the
                  Employer may agree to accept. Upon the expiration of such
                  notice the Member concerned shall be treated for the purposes
                  of the Scheme as having terminated his Pensionable Service. If
                  the Member gives such notice before paying any contributions
                  to the Scheme, he shall be treated as if he had never become a
                  Member.

         2.8      RE-JOINING THE SCHEME AFTER OPTING OUT

                  A Member who withdraws from active membership of the Staff
                  Section pursuant to sub-Rule 2.7 may, at the discretion of the
                  Trustees and with the consent of the Principal Employer, be
                  re-admitted to membership of the Staff Section provided he
                  then fulfils the eligibility conditions mentioned in sub-Rule
                  2.1 and satisfies the requirements of sub-Rule 2.4. Such
                  re-admission shall be for such benefits and subject to such
                  conditions as the Trustees and the Principal Employer shall
                  decide.

                                       89
<PAGE>

         2.9      EFFECT OF PROVIDING INCOMPLETE OR INACCURATE INFORMATION

                  Without prejudice to sub-Rule 2.4, if when required to do so
                  any Employee or Member fails to provide the Trustees with
                  information or provides them with information which is
                  incomplete or inaccurate, the Trustees may with the consent of
                  the Principal Employer modify the benefits payable to or in
                  respect of the Member under the Scheme to such extent as they
                  may consider appropriate in the circumstances.

                                       90
<PAGE>

                        SECTION 2: MEMBERS' CONTRIBUTIONS

3        MEMBERS' CONTRIBUTIONS

         3.1      COMPULSORY CONTRIBUTIONS

                  In each Scheme Year each Member shall pay contributions to the
                  Scheme in equal instalments at the same time as he receives
                  pay from his Employer at the rate of 3.5% of his Pensionable
                  Earnings (or, in the case of a Member who is an 89 Limits
                  Member for the purposes of the Revenue Limits Rules, the
                  Permitted Maximum (as defined in the Revenue Limits Rules), if
                  less).

         3.2      VOLUNTARY CONTRIBUTIONS

                  A Member may pay voluntary contributions to the Scheme of such
                  amounts or at such rates (subject to the limits on Member's
                  contributions mentioned in the Revenue Limits Rules) and at
                  such intervals as he may agree with the Trustees. The assets
                  representing such voluntary contributions and the income from
                  them and any additions to them shall be held by the Trustees
                  separate from all the other assets of the Fund.

         3.3      NOTICE TO BE GIVEN BY MEMBERS CONCERNING VOLUNTARY
                  CONTRIBUTIONS

                  A Member must give the Trustees such notice as the Trustees
                  may require (not exceeding the maximum period of notice
                  allowed by Regulation 2(4) of the Pension Schemes (Voluntary
                  Contributions Requirements and Voluntary and Compulsory
                  Membership) Regulations 1987 (SI 1987 No. 1108)) of his
                  intention to pay voluntary contributions at a specified rate
                  or of a specified amount, or to vary that rate or amount.

         3.4      BENEFITS IN RESPECT OF VOLUNTARY CONTRIBUTIONS

                  The Trustees shall secure:-

                  (1)      that any voluntary contributions paid by a Member are
                           used to provide such benefits for or in respect of
                           him under the Scheme as the Trustees and the Member
                           may agree or, in the absence of agreement, as the
                           Trustees may decide and that such benefits:-

                           (a)      shall be additional to the benefits provided
                                    for or in respect of him under the following
                                    Rules; and

                           (b)      shall be money purchase benefits within the
                                    meaning of section 181 of the Pension
                                    Schemes Act; and

                  (2)      that the value of the additional benefits is
                           reasonable having regard to the amount of the
                           voluntary contributions.

         3.5      REPAYMENT OF SURPLUS VOLUNTARY CONTRIBUTIONS

                  This sub-Rule applies if a Member pays voluntary contributions
                  under this rule and on his Scheme Exit Date the benefits which
                  have accrued to him are found to

                                       91
<PAGE>

                  exceed the maximum total benefits which may be provided by the
                  Scheme to or in respect of him under Revenue Limits.

                  (1)      To the extent that the excessive benefits have been
                           secured by the Member's voluntary contributions the
                           amount of the Scheme assets which secure the
                           excessive benefits and consist of or relate to those
                           contributions shall be determined by the Trustees
                           (for which purpose they may rely on the advice of the
                           Actuary).

                  (2)      The Trustees shall then pay that amount to the Member
                           (or, if the Member has died, to the Member's estate)
                           after deducting such tax as they may be required to
                           deduct and account for to the Inland Revenue.

                  (3)      The Trustees shall also comply with the requirements
                           of Regulation 5 of the Retirement Benefits Schemes
                           (Restriction on Discretion to Approve) (Additional
                           Voluntary Contributions) Regulations 1993 (SI 1993
                           No. 3016), and, where the Scheme is the "leading
                           scheme" in relation to the Member, with the
                           requirements of Regulation 6 of those Regulations so
                           far as they concern main schemes.

         3.6      DEDUCTION OF CONTRIBUTIONS FROM SALARY OR PAY

                  Each Member's Employer shall deduct from the Member's salary
                  or pay the amounts payable by the Member to the Scheme as
                  compulsory and voluntary contributions and pay them to the
                  Trustees promptly and in any event so as to comply with
                  section 49(8) of the Pensions Act and regulations made under
                  it (being at the date of this Deed regulation 16 of the
                  Administration Regulations which requires the payment to the
                  Trustees to be made within 19 days commencing from the end of
                  the month in which the amount is deducted from the Member's
                  earnings).

         3.7      TERMINATION OF MEMBER'S CONTRIBUTIONS

                  Unless a Member's Employer determines otherwise and notifies
                  the Member accordingly, but subject always to such Inland
                  Revenue consent as may from time to time be required, no
                  contributions shall be payable or may be paid by a Member
                  after his Normal Retirement Age or the date when his
                  Pensionable Service terminates, if earlier.

         3.8      MEMBER'S CONTRIBUTIONS DURING TEMPORARY ABSENCE

                  Where a Member is temporarily absent from work with his
                  Employer, the payment of his contributions under this Rule is
                  governed by Rule 6.

                                       92
<PAGE>

              SECTION 3: PENSIONABLE SERVICE AND TEMPORARY ABSENCE

4        CALCULATION OF STAFF PENSIONABLE SERVICE

         4.1      PURPOSE OF THIS RULE

                  Most of the benefits payable to or in respect of a Member
                  under the Staff Section are determined by reference to the
                  Member's Staff Pensionable Service. This Rule explains how a
                  Member's Staff Pensionable Service is calculated.

         4.2      STAFF PENSIONABLE SERVICE

                  Subject to sub-Rule 4.3, a Member's Staff Pensionable Service
                  for the purpose of calculating the benefits payable to and in
                  respect of him under the Staff Section is the total of such of
                  the following periods as apply to him and are continuous:-

                  (1)      the period during which he was in Pensionable Service
                           under the Staff Section;

                  (2)      if he was a Member immediately before the Revision
                           Date, the period during which he was in Pensionable
                           Service under the Scheme ending on the day before the
                           Revision Date;

                  (3)      if he was a member in Pensionable Service under the
                           Racal Staff Scheme immediately before the
                           Commencement Date, and became a Member of this Scheme
                           on the Commencement Date, any period of pensionable
                           service under the Racal Staff Scheme which he has
                           been notified by the Trustees counts towards his
                           benefits under this Scheme.

                  Staff Pensionable Service shall be expressed in complete years
                  with complete months which are not part of a complete year
                  being expressed as a fraction of a year.

                  There shall be deducted any part of the period or periods in
                  paragraphs (1) and (2) above which does not count as Staff
                  Pensionable Service due to temporary absence from work as
                  provided in Rule 6 or the applicable temporary absence rule
                  prevailing when the absence occurred.

                  Staff Pensionable Service shall be subject to a maximum of 40
                  years or such longer period as may be permitted under the
                  Revenue Limits Rules.

         4.3      MORE THAN ONE PERIOD OF STAFF PENSIONABLE SERVICE

                  If a Member who has been in Pensionable Service leaves Service
                  or withdraws from active membership of the Staff Section and
                  subsequently rejoins the Staff Section, each of the periods of
                  Staff Pensionable Service shall count as a separate period of
                  Staff Pensionable Service unless:-

                  (a)      the Trustees with the consent of the Principal
                           Employer agree to aggregate them; or

                                       93
<PAGE>

                  (b)      the Member is a female Member who is absent from work
                           wholly or partly because of pregnancy or confinement
                           and the periods of Pensionable Service separated by
                           the period of maternity absence are required to be
                           treated as continuous by Part VIII of the Employment
                           Rights Act 1996.

                  Where a Member has any period of Staff Pensionable Service
                  which is not aggregated in accordance with this sub-Rule with
                  his most recent period of Staff Pensionable Service, the
                  benefits payable to and in respect of him in respect of the
                  earlier period or periods are determined in accordance with
                  the Rules relating to early leaves.

         4.4      CHANGE OF SCHEME EMPLOYER

                  Where a Member is employed by one Employer and immediately
                  after the termination of his employment with that Employer he
                  becomes an employee of another Employer, his Staff Pensionable
                  Service shall not be treated as having been broken by reason
                  only of such change of employment.

5        MEMBERS IN PART-TIME EMPLOYMENT

         5.1      PURPOSE OF THIS RULE

                  This Rule explains the adjustments required where any Member's
                  Staff Pensionable Service includes both full-time and
                  part-time employment or variable part-time employment.

         5.2      INTERPRETATION

                  In this Rule:-

                  (1)      "FULL-TIME EMPLOYMENT" means in respect of any
                           Employer and any period, employment with the Employer
                           which, by reason of the number of hours per week (or
                           month) for which the Member is contracted to work, is
                           treated by the Employer as full-time employment; and

                  (2)      "PART-TIME EMPLOYMENT" means employment with the
                           Employer which is less than Full-time Employment.

         5.3      MEMBERS TO WHOM THIS RULE APPLIES

                  This Rule applies to any Member where during the Member's
                  Staff Pensionable Service:-

                  (a)      the Member has periods both of Full-time Employment
                           and Part-time Employment; or

                  (b)      the Member has periods of Part-time Employment in
                           respect of which there is a difference in the number
                           of hours per week (or month) for which he is
                           contracted to work as a proportion of the number of
                           hours required for Full-time Employment.

                                       94
<PAGE>

                  The Trustees may rely on a statement from the Employer as to
                  the hours per week (or month) for which any Member is or was
                  contracted to work and the number of hours which are or were
                  required for Full-time Employment with the Employer.

         5.4      CONVERSION INTO FULL-TIME EQUIVALENT

                  Where by virtue of sub-Rule 5.3 this Rule applies to any
                  Member, in respect of each period during which the number of
                  hours per week (or month) for which the Member is required to
                  work bears the same proportion to the number of hours required
                  for Full-time Employment, his Final Pensionable Earnings and
                  Staff Pensionable Service shall be converted into their
                  full-time equivalent and the benefit attributable to each such
                  period shall then be aggregated. For this purpose:-

                  (1)      the Member's Final Pensionable Earnings shall be
                           converted into its full-time equivalent by
                           multiplying it by the fraction FTH/CH; and

                  (2)      the Member's Staff Pensionable Service shall be
                           converted into its full time equivalent by
                           multiplying it by the fraction CH/FTH:-

                  where:-

                           (a)      "FTH" is the number of hours per week (or
                                    month) required for Full-time Employment at
                                    the end of such period; and

                           (b)      "CH" is the number of hours per week (or
                                    month) for which the Member is contracted to
                                    work at the end of the period in question.

         5.5      TREATMENT OF NOTIONAL PENSIONABLE SERVICE

                  Where any benefit under the Rules is required to be calculated
                  taking into account notional Pensionable Service after a
                  Member's actual Pensionable Service has terminated, it shall
                  be assumed that the number of hours for which the Member was
                  contracted to work and the number of hours required for
                  Full-time Employment in each case as at the date when his
                  Pensionable Service terminated would have continued to apply
                  if he had remained in Pensionable Service.

6        CONSEQUENCES OF TEMPORARY ABSENCE

         6.1      PURPOSE OF THIS RULE

                  This Rule determines:-

                  (1)      whether and the extent to which any period during
                           which a Member is temporarily absent from work with
                           his Employer, but remains in Service, is to be
                           included in the Member's Staff Pensionable Service;

                  (2)      whether and the extent to which the Member is obliged
                           to pay contributions during or in respect of any such
                           period of temporary absence; and

                                       95
<PAGE>

                  (3)      whether the Member's death during any such period of
                           temporary absence is to count as death in Pensionable
                           Service for the purpose of determining benefits on
                           death in Pensionable Service under Section 6 of these
                           Rules.

         6.2      MATERNITY ABSENCE: (a) PAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the period of absence is a
                  period of paid maternity absence within the meaning of
                  paragraph 5(3) of Schedule 5 to the Social Security Act 1989
                  or a maternity leave period within the meaning of section
                  235(1) of the Employment Rights Act 1996, the effect of the
                  Member's absence shall be as provided in the following
                  sub-Rules of this Rule.

                  6.2.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to continue in Pensionable Service throughout
                           the period of paid maternity absence or maternity
                           leave period.

                  6.2.2    CONTRIBUTIONS DURING ABSENCE. The Member shall
                           continue to pay contributions in accordance with Rule
                           3 during the period of paid maternity absence
                           calculated by reference to her actual earnings from
                           her Employer instead of by reference to her
                           Pensionable Earnings.

                  6.2.3    PERIOD OF PENSIONABLE SERVICE. The period of paid
                           maternity absence or maternity leave period shall be
                           included in the Member's Staff Pensionable Service.

                  6.2.4    DEATH DURING ABSENCE. If a Member dies in Service
                           during the period of paid maternity absence or
                           maternity leave period she shall be treated as dying
                           in Pensionable Service for the purpose of Section 6
                           of these Rules. To the extent that the benefits under
                           Section 6 fail to be determined by reference to her
                           earnings during a period which included a period of
                           paid maternity absence, they shall be determined in
                           accordance with the normal employment requirement
                           within the meaning of paragraph 5(3) of Schedule 5 to
                           the Social Security Act 1989.

         6.3      MATERNITY ABSENCE: (b) UNPAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the period of absence is not
                  a period of paid maternity absence within the meaning of
                  paragraph 5(3) of Schedule 5 to the Social Security Act 1989
                  or a maternity leave period within the meaning of section
                  235(1) of the Employment Rights Act 1996, the effect of the
                  Member's absence shall be as provided in the following
                  sub-Rules of this Rule.

                  6.3.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to continue in Pensionable Service throughout
                           the period in question.

                                       96
<PAGE>

                  6.3.2    CONTRIBUTIONS DURING ABSENCE. The Member shall cease
                           to pay contributions in accordance with Rule 3 during
                           the period of absence but may following her return to
                           work pay the contributions calculated by reference to
                           her full Pensionable Salary which she would have paid
                           if this sub-Rule had not applied in such instalments
                           and over such period as she may agree with the
                           Trustees.

                  6.3.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           maternity absence to which this sub-Rule 6.3 applies
                           shall be included in the Member's Staff Pensionable
                           Service only to the extent that the Member pays
                           contributions in respect of it, by way of arrears of
                           contributions paid following her return to work in
                           accordance with sub-Rule 6.3.2.

                  6.3.4    DEATH DURING ABSENCE. If the Member dies in Service
                           during a period of maternity absence to which this
                           sub-Rule 6.3 applies, she shall be treated as dying
                           in Pensionable Service for the purpose of Section 6
                           of these Rules.

         6.4      OTHER CAUSES OF TEMPORARY ABSENCE

                  If a Member is temporarily absent from work and the Member is
                  not a female Member whose absence comes within sub-Rules 6.2
                  or 6.3, the effect of the Member's absence shall be as
                  provided in the following sub-Rules of this Rule.

                  6.4.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to have left Pensionable Service upon the
                           expiry of the following periods:-

                           (a)      if the absence is due to illness or injury,
                                    30 months from the date when the absence
                                    commences; or

                           (b)      if the absence is for any other reason, 12
                                    months from the date when the absence
                                    commences;

                           or such longer period (if any) as the Trustees and
                           the Principal Employer may agree.

                  6.4.2    CONTRIBUTIONS DURING ABSENCE. For so long as the
                           Member receives salary or pay from his Employer at
                           not less than half the rate of his salary or pay
                           immediately before the absence commenced, he shall
                           continue to pay contributions in accordance with Rule
                           3 during the period of absence calculated by
                           reference to his full Pensionable Earnings. For so
                           long as any Member receives salary or pay from his
                           Employer at less than half the rate of his salary or
                           pay immediately before the absence commenced, he
                           shall cease to pay contributions in accordance with
                           Rule 3 during the period of absence but may following
                           his return to work pay the contributions (calculated
                           by reference to his full Pensionable Earnings) which
                           he would have paid if this sub-Rule had not applied
                           in such instalments and over such period as he may
                           agree with the Trustees.

                                       97
<PAGE>

                  6.4.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           temporary absence shall be included in the Member's
                           Staff Pensionable Service only to the extent that the
                           Member pays contributions in respect of it, either
                           during the period of absence or by way of arrears of
                           contributions paid following his return to work in
                           accordance with sub-Rule 6.4.2.

                  6.4.4.   DEATH DURING ABSENCE. If a Member dies in Service
                           whilst absent from work and he has not been deemed to
                           have left Pensionable Service in accordance with
                           sub-Rule 6.4.1, he shall be treated as dying in
                           Pensionable Service for the purpose of Section 6 of
                           these Rules.

                                       98
<PAGE>

                     SECTION 4: MEMBER'S RETIREMENT BENEFITS

7        MEMBER'S RETIREMENT BENEFITS: GENERAL

         7.1      MEMBER'S RETIREMENT BENEFITS

                  On retirement from Pensionable Service:-

                  (1)      a Member is entitled to a pension; and

                  (2)      a Transferred Racal RBS Member is also entitled to a
                           cash sum;

                  calculated and paid in accordance with Rules 8 to 13.

                  If before a Member's Normal Retirement Age his Pensionable
                  Service is terminated by him leaving Service or withdrawing
                  from membership of the Staff Section whilst remaining in
                  Service, and he does not become entitled to any early
                  retirement pension under Rules 9 to 12, the benefits payable
                  to and in respect of him are determined in accordance with
                  Section 7 of these Rules.

         7.2      OTHER PROVISIONS APPLICABLE TO RETIREMENT PENSIONS

                  A Member's pension payable under Rules 8 to 13:-

                  (1)      shall be reduced in accordance with Rules 14 or 15 if
                           the Member exercises his commutation or surrender
                           options under them;

                  (2)      shall be payable in accordance with Rule 27; and

                  (3)      shall be subject to increases in accordance with Rule
                           28.

         7.3      SUPPLEMENTS TO RETIREMENT PENSIONS

                  Members' retirement pensions under Rule 8 to 13 may be
                  supplemented:-

                  (1)      as a result of the Member having paid additional
                           voluntary contributions in accordance with sub-Rule
                           3.4 or the Former Provisions;

                  (2)      as a result of a transfer payment or transfer
                           payments having been received in respect of the
                           Member under Clause 18 in Schedule 2 to this Deed or
                           under the Former Provisions; or

                  (3)      as a result of the exercise of the augmentation
                           powers contained in Clause 21 in Schedule 2 to this
                           Deed.

                  The extent to which Rules 14 (commutation option), 15
                  (surrender option), 27 (payment of pensions) and 28 (pension
                  increases) apply to any supplement to the Member's retirement
                  pension referred to in sub-Rule 7.3 depends on the terms
                  agreed between the Member and the Trustees in the case of
                  additional voluntary contributions and transfer payments and
                  on the terms specified by the Trustees in the case of
                  augmentations.

                                       99
<PAGE>

         7.4      CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                  The Trustees must ensure:-

                  (1)      that if the Member was in Contracted-out Employment
                           in relation to the Scheme before 6 April 1997, the
                           Member's retirement pension attributable to
                           Pensionable Service prior to 6 April 1997 complies
                           with the GMP Rules; and

                  (2)      that the Member's retirement benefits do not exceed
                           the limits applicable to them under the Revenue
                           Limits Rules.

8        NORMAL RETIREMENT

         8.1      MEMBER'S ENTITLEMENT TO PENSION FROM NORMAL RETIREMENT AGE

                  A Member whose Pensionable Service terminates as a result of
                  his retirement from Service at Normal Retirement Age shall be
                  entitled to a normal retirement pension from the Scheme which
                  shall commence to be payable with effect from the day
                  following his Normal Retirement Age for the remainder of his
                  lifetime and which shall be calculated in accordance with this
                  Rule.

         8.2      INITIAL ANNUAL AMOUNT OF MEMBER'S PENSION

                  The initial annual amount of a Member's pension under sub-Rule
                  8.1 shall be calculated by using the following formula:-

                    Final Pensionable Earnings x Staff Pensionable Service
                                                 -------------------------
                                                             60

         8.3      TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to a normal retirement pension
                  in accordance with sub-Rule 8.1 and who is a Transferred Racal
                  RBS Member shall also be entitled to a cash sum calculated by
                  using the following formula:-

                        Final Pensionable Earnings x Racal RBS Service
                                                     -----------------
                                                            480

9        EARLY RETIREMENT: (A) GENERALLY

         9.1      CIRCUMSTANCES IN WHICH MEMBER'S PENSION MAY COMMENCES EARLY

                  A Member's retirement pension may commence before his Normal
                  Retirement Age in any of the following circumstances:-

                  (1)      voluntary early retirement under Rule 10;

                  (2)      redundancy early retirement under Rule 11; or

                  (3)      early retirement due to Serious Ill-health under Rule
                           12.

                                       100
<PAGE>

         9.2      PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations, the Trustees must be reasonably satisfied that
                  when any Member's pension becomes payable under Rules 10, 11
                  or 12 before his Normal Pension Age, the total value of the
                  Member's benefits is at least equal in value to the benefits
                  that have accrued to or in respect of him under the Rules (on
                  the basis that the Rules are the "applicable rules" for the
                  purpose of section 94(2) of the Pension Schemes Act).

         9.3      GMP REQUIREMENTS

                  If any Member whose pension commences before Normal Retirement
                  Age under this rule was in Contracted-out Employment in
                  relation to the Scheme before 6 April 1997, the Trustees shall
                  have power to adjust any pension payable under this rule to
                  such extent as may be necessary to ensure that when the Member
                  attains State Pensionable Age (as defined in the GMP Rules),
                  the Member's pension attributable to Pensionable Service prior
                  to 6 April 1997 is not less than the amount required under the
                  GMP Rules.

10       EARLY RETIREMENT: (B) VOLUNTARY

         10.1     WHEN PAYABLE

                  If:-

                  (1)      a Member's Pensionable Service terminates on or after
                           the date when he attains age 50 and

                  (2)      the Principal Employer consents to the immediate
                           commencement of his retirement pension (except that
                           in the case of a Pre-88 Member, such consent shall
                           not be required to the commencement of the pension on
                           or after the Member's 60th birthday);

                  he shall be entitled to an early retirement pension from the
                  Scheme which shall commence to be payable with effect from the
                  day after his Pensionable Service terminates (or such later
                  date as the Trustees shall agree with him) and which shall
                  continue to be payable for the remainder of his lifetime.

         10.2     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rules 10.3 and 10.4, the initial annual amount
                  of a Member's voluntary early retirement pension under
                  sub-Rule 10.1 shall be calculated in two stages:-

                  (1)      first, by using the following formula:-

                     Final Pensionable Earnings x Staff Pensionable Service;
                                                  -------------------------
                                                              60

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect of the period from the
                           date when the pension becomes payable until the
                           Member's Normal

                                       101
<PAGE>

                           Retirement Age in order to take account of the fact
                           that the pension is likely to be payable for longer
                           than if it were to commence at the Member's Normal
                           Retirement Age. The amount of the reduction factor
                           shall be determined by the Trustees and the Principal
                           Employer after consulting the Actuary.

         10.3     ADJUSTMENT FOR MALE PRE-88 MEMBERS

                  If the Member is a male Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 10.2 shall be determined as
                  follows:-

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 17 May 1990 shall be
                           reduced in respect of the period from the date it
                           becomes payable until the Member's Normal Retirement
                           Age;

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 17 May 1990 but
                           before 1 September 1993 shall be reduced in respect
                           of the period (if any) from the date it becomes
                           payable until the Member's 60th birthday; and

                  (c)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date it becomes payable until the Member's Normal
                           Retirement Age.

         10.4     ADJUSTMENT FOR FEMALE PRE-88 MEMBERS

                  If the Member is a female Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 10.2 shall be determined as
                  follows:-

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 1 September 1993 shall be
                           reduced in respect of the period (if any) from the
                           date it becomes payable until the Member's 60th
                           birthday; and

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date it becomes payable until the Member's Normal
                           Retirement Age.

         10.5     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an early retirement pension
                  in accordance with sub-Rule 10.1 and who is a Transferred
                  Racal RBS Member shall also be entitled to a cash sum
                  calculated in two stages:-

                  (1)      first by using the following formula:-

                           Final Pensionable Earnings x Racal RBS Service
                                                        -----------------
                                                               480

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect from the date when the
                           cash sum became payable until in the case of a male
                           Member

                                       102
<PAGE>

                           his Normal Retirement Age and in the case of a female
                           member her 60th birthday. The amount of the reduction
                           factor shall be determined by the Trustees and the
                           Principal Employer after consulting the Actuary.

11       EARLY RETIREMENT: (C) REDUNDANCY

         11.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates on or after the
                  date when he attains age 50 and his Employer certifies to the
                  Trustees that this occurred because his Service terminated by
                  reason of redundancy then, provided that both the Trustees and
                  his Employer consent to the immediate commencement of his
                  retirement pension, he shall be entitled to an early
                  retirement pension from the Scheme which shall commence to be
                  payable with effect from the date after his Pensionable
                  Service terminates (or such later date as his Employer and the
                  Trustees shall agree with him) and which shall continue to be
                  payable for the remainder of his lifetime.

         11.2     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rules 11.3 and 11.4, the initial annual amount
                  of a Member's redundancy early retirement pension under
                  sub-Rule 11.1 shall be calculated in the same way as a
                  voluntary early retirement pension under sub-Rule 10.2 except
                  that the early retirement reduction factor under sub-Rule
                  10.2(2) shall be applied only in respect of the period (if
                  any) from the date when the pension becomes payable until the
                  Member's 60th birthday.

         11.3     ADJUSTMENT FOR MALE PRE-88 MEMBERS

                  If the Member is a male Pre-88 Member, and the redundancy
                  early retirement pension commences before the Member's 60th
                  birthday, the early retirement reduction factor shall be
                  applied only as follows:-

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 17 May 1990 shall be
                           reduced in respect of the period from the date when
                           the pension commences until the Member's 60th
                           birthday;

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 17 May 1990 but
                           before 1 September 1993 shall be reduced in respect
                           of the period (if any) from the date when the pension
                           commences until the Member's 55th birthday; and

                  (c)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date when the pension commences until the Member's
                           60th birthday.

         11.4     ADJUSTMENT FOR FEMALE PRE-88 MEMBERS

                  If the Member is a female Pre-88 Member and the redundancy
                  early retirement pension commences before the Member's 60th
                  birthday, the early retirement reduction factor shall be
                  applied only as follows:-

                                       103
<PAGE>

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 1 September 1993 shall be
                           reduced in respect of the period (if any) from the
                           date when the pension commences until the Member's
                           55th birthday; and

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced only in respect of the period from
                           the date when the pension commences until the
                           Member's 60th birthday.

         11.5     RELIANCE BY TRUSTEES ON STATEMENTS FROM EMPLOYERS

                  The Trustees may rely on a statement from the Member's
                  Employer that the Member's Pensionable Service has terminated
                  in the circumstances mentioned in sub-Rule 11.1.

         11.6     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an early retirement pension
                  in accordance with sub-Rule 11.1 and who is a Transferred
                  Racal RBS Member shall also be entitled to a cash sum
                  calculated in two stages:-

                  (1)      first by using the following formula:-

                           Final Pensionable Earnings x Racal RBS Service
                                                        -----------------
                                                               480

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect from the date when the
                           cash sum became payable until in the case of a male
                           Member his Normal Retirement Age and in the case of a
                           female member her 60th birthday. The amount of the
                           reduction factor shall be determined by the Trustees
                           and the Principal Employer after consulting the
                           Actuary.

12       EARLY RETIREMENT: (D) SERIOUS ILL-HEALTH

         12.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates because of
                  Serious Ill-health, he may be granted an ill-health early
                  retirement pension from the Scheme subject to and in
                  accordance with the following sub-Rules of this Rule.

         12.2     PROCEDURE

                  Before his Pensionable Service terminates the Member must
                  request his Employer to support his application to the
                  Trustees for a Serious Ill-health pension to be granted. The
                  Employer may only make such an application if it is satisfied
                  that the Member's state of health is such as to warrant his
                  retirement from employment with the Employer.

                  If any Employer supports an application to the Trustees
                  following a request from a Member in accordance with this
                  sub-Rule, the Trustees shall decide whether the Member is
                  suffering from Serious Ill-health, and notify the Employer and
                  the Member of their decision.

                                       104
<PAGE>

         12.3     MEDICAL EVIDENCE BEFORE COMMENCEMENT OF PENSION

                  For the purpose of sub-Rule 12.2, the Employer and the
                  Trustees shall be entitled to such medical evidence (if any)
                  as they may respectively require. The Member must co-operate
                  in providing all such evidence, including undergoing any
                  medical examination(s) which the Employer or the Trustees may
                  require.

         12.4     COMMENCEMENT

                  A Serious Ill-health early retirement pension shall commence
                  to be payable with effect from the day after the Member's
                  Pensionable Service terminates (or such later date as the
                  Trustees shall agree with him) and which shall, subject to
                  sub-Rules 12.6 and 12.7, continue to be payable for the
                  remainder of his lifetime.

         12.5     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rule 12.6, the initial annual amount of a
                  Member's Serious Ill-health early retirement pension shall be
                  the amount of a voluntary early retirement pension calculated
                  in accordance with sub-Rule 10.2 or if the Trustees and the
                  Principal Employer consider a higher amount to be appropriate
                  in the circumstances, such higher amount as the Trustees with
                  the consent of the Principal Employer shall decide, but not
                  greater than the amount which would have been payable under
                  Rule 8 if he had remained in Pensionable Service until his
                  Normal Retirement Age (based on the Member's Final Pensionable
                  Earnings at his Scheme Exit Date).

         12.6     SUBSEQUENT ADJUSTMENT

                  If:-

                  (1)      a Member's pension is a Serious Ill-health early
                           retirement pension; and

                  (2)      at any time or times between the date when his
                           pension commences and his Normal Retirement Age, in
                           the Trustees' opinion (having taken such medical
                           evidence as they may require) his state of health
                           improves, or deteriorates;

                  the Member's entitlement thereafter shall be of such pension
                  (if any) as the Trustees, with the consent of the Principal
                  Employer, decide to be appropriate in the circumstances, but
                  so that with effect from the Member's Normal Retirement Age
                  his pension shall be not less than it would have been under
                  Rule 23 if on the date of his retirement he had become an
                  early leaver with a preserved pension payable under that Rule
                  but reduced to such extent as the Trustees decide to be
                  appropriate to take account of any part of the Serious
                  Ill-health early retirement pension which the Member commuted
                  for a lump sum.

         12.7     MEDICAL EVIDENCE AFTER COMMENCEMENT OF PENSION

                  A Member shall not be entitled to the continued payment of a
                  Serious Ill-health pension unless after it comes into payment
                  he co-operates in providing all such

                                       105
<PAGE>

                  evidence, including undergoing any medical examination(s)
                  which the Trustees may from time to time require.

         12.8     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an ill-health early
                  retirement pension in accordance with sub-Rule 12.1 and who is
                  a Transferred Racal RBS Member shall also be entitled to a
                  cash sum calculated by using the following formula:-

                         Final Pensionable Earnings x Racal RBS Service
                                                      -----------------
                                                             480

13       LATE RETIREMENT

         13.1     COMMENCEMENT OF LATE RETIREMENT PENSION

                  If with the consent of his Employer a Member continues in
                  Service after his Normal Retirement Age, the commencement of
                  his pension shall be postponed until he retires from Service
                  except in the following circumstances.

                  (1)      If he is a Pre-87 Limits Member of an 87 Limits
                           Member for the purposes of the Revenue Limits Rules,
                           he may with the prior written consent of the
                           Principal Employer commence to draw his pension with
                           effect from any day after he attains Normal
                           Retirement Age.

                  (2)      If he is an 89 Limits Member for the purposes of the
                           Revenue Limits Rules, he may not commence to draw his
                           pension from the Scheme until his Service terminates
                           except that his pension from the Scheme must come
                           into payment at the latest when he attains age 75.

         13.2     INITIAL ANNUAL AMOUNT OF LATE RETIREMENT PENSION

                  Where the commencement of a Member's pension has been
                  postponed in accordance with sub-Rule 13.1 until after he
                  attains Normal Retirement Age, the initial annual amount of
                  his pension shall be equal to the normal retirement pension
                  which would have been payable to the Member under Rule 8 if
                  the Member had retired on attaining his Normal Retirement Age
                  increased by such late retirement factor as the Trustees
                  having consulted the Actuary consider appropriate having
                  regard to the period of postponement.

         13.3     TRANSFERRED RACAL RBS MEMBERS

                  A Member whose pension is paid in accordance with this Rule 13
                  and who is a Transferred Racal RBS Member shall also be
                  entitled to a cash sum calculated by using the following
                  formula:-

                         Final Pensionable Earnings x Racal RBS Service
                                                      -----------------
                                                             480

                  and adjusting the amount thereby obtained in the same manner
                  as his pension is adjusted in accordance with sub-Rule 13.2.

                                       106
<PAGE>

                   SECTION 5: ALTERNATIVES TO MEMBER'S PENSION

14       COMMUTATION

         14.1     MEMBER'S RIGHT TO COMMUTE

                  A Member who becomes entitled to a pension from the Scheme may
                  elect to commute part of it for a lump sum subject to and in
                  accordance with this Rule.

         14.2     MEMBER'S ELECTION TO COMMUTE

                  A Member's election under sub-Rule 14.1 shall be made by
                  giving to the Trustees such notice within such period as the
                  Trustees may require.

         14.3     MAXIMUM LUMP SUM

                  The maximum lump sum for which a Member may commute part of
                  his pension pursuant to sub-Rule 14.1 shall be:-

                  (1)      the amount determined by taking 3/80ths of the
                           Member's Final Pensionable Earnings and multiplying
                           it by the Member's Staff Pensionable Service (or, if
                           the Member is entitled to an ill-health early
                           retirement pension, the period of Staff Pensionable
                           Service he would have completed if he had remained in
                           Pensionable Service until Normal Retirement Age); or

                  (2)      such greater amount as the Trustees may agree and
                           which will not exceed Revenue Limits.

         14.4     MEMBER CONTINUING IN SERVICE AFTER NORMAL RETIREMENT AGE

                  A Member who continues in Service after his Normal Retirement
                  Age may not receive a lump sum by way of commutation pursuant
                  to this Rule until he commences to receive his pension from
                  the Scheme unless he is a Pre-87 Limits Member or an 87 Limits
                  Member for the purpose of the Revenue Limits Rules. If the
                  Member is a Pre-87 Limits Member or on 87 Limits Member he may
                  with the prior written consent of the Principal Employer make
                  an election pursuant to sub-Rule 14.1 at any time from his
                  Normal Retirement Age to the date when his late retirement
                  pension commences to be paid.

         14.5     BENEFITS FROM MEMBER'S VOLUNTARY CONTRIBUTIONS

                  If before April 1987 a Member had entered into arrangements
                  for the payment of voluntary contributions under the Scheme or
                  under another retirement benefits scheme established by, or to
                  which contributions were paid:-

                  (1)      by, his Employer; or

                  (2)      by an employer in respect of which his Employer is a
                           relevant employer (within the meaning of Regulation 2
                           of the Occupational Pension Schemes (Transitional
                           Provisions) Regulations 1988 (SI 1988 No. 1436));

                                       107
<PAGE>

                  any pension secured by his voluntary contributions to the
                  Scheme may be commuted pursuant to sub-Rule 14.1. Otherwise,
                  such pension may not be so commuted although it may be taken
                  into account in the calculation of the lump sum.

         14.6     EXCEPTIONAL CIRCUMSTANCES OF SERIOUS ILL-HEALTH

                  If a Member is in exceptional circumstances of serious
                  ill-health such that the Trustees are advised by a medical
                  practitioner that the Member's expectation of life is very
                  short (in the sense of being measured in months rather than
                  years) and the Trustees determine that in the circumstances a
                  pension is not a reasonable provision for the Member, the
                  Trustees shall have power to commute the whole of the Member's
                  pension for a lump sum.

         14.7     TRIVIAL PENSIONS

                  Notwithstanding sub-Rule 14.3, if a Member's benefit has
                  become payable or the Scheme is being wound up and that
                  benefit does not exceed the Triviality Limit:-

                  (1)      the Member may make an election pursuant to sub-Rule
                           14.1 in respect of the whole of it; or

                  (2)      the Trustees shall have the power to commute the
                           whole of it for a lump sum if they determine that it
                           would be conducive to the efficient administration of
                           the Scheme to do so.

         14.8     COMMUTATION FACTORS

                  In determining the amount by which the Member's pension is to
                  be reduced in any case of partial commutation the Trustees
                  shall use such commutation factors as, having taken advice
                  from the Actuary, they may from time to time agree with the
                  Principal Employer and adopt for the purposes of this Rule.

                  The amount of the lump sum to be paid in full commutation of
                  (a) the benefits of a Member who is in exceptional
                  circumstances of serious ill-health, or (b) trivial benefits,
                  shall be calculated on a basis agreed by the Trustees and the
                  Principal Employer having been certified as reasonable by the
                  Actuary.

         14.9     GMP REQUIREMENTS

                  If a Member was in Contracted-out Employment in relation to
                  the Scheme before 6 April 1997, then insofar as his Scheme
                  pension represents his Guaranteed Minimum Pension it may only
                  be commuted in accordance with the GMP Rules.

15       SURRENDER OPTION

         15.1     TRUSTEES' DISCRETION TO PERMIT SURRENDER

                  With the agreement of the Trustees a Member may elect to
                  surrender part of his pension in return for the provision by
                  the Scheme of a pension or pensions for the Member's spouse
                  and/or such one or more of his Dependants approved by the
                  Trustees as he may nominate payable from the date of the
                  Member's death if, but

                                       108
<PAGE>

                  only if, the Member dies after he commences to receive a
                  pension from the Scheme. Any pension payable as a result of
                  such an election is additional to any pension payable to the
                  spouse or any Dependent Child of the Member pursuant to the
                  Rules concerning benefits payable on the Member's death, and
                  shall be payable for such period as the Member may agree with
                  the Trustees.

         15.2     MEMBER'S ELECTION TO SURRENDER

                  A Member's election under sub-Rule 15.1 shall be made by
                  giving to the Trustees such notice within such period (and
                  with such evidence of good health) as the Trustees may require
                  and must in any event be made before the Member's own pension
                  commences. The person or persons nominated by the Member must
                  be the Member's spouse or a Dependant or Dependants at the
                  date on which the notice is given. The Trustees may in the
                  absence of such evidence of good health, refuse to accept a
                  Member's election.

         15.3     REVENUE AND CONTRACTING-OUT LIMITS ON SURRENDER

                  The surrender of a Member's pension under this Rule is subject
                  to the following restrictions:-

                  (1)      the amount or aggregate amount of any pensions
                           provided for a Member's spouse or Dependant or
                           Dependants by virtue of an election made pursuant to
                           sub-Rule 15.1 shall not exceed the reduced pension
                           payable to the Member following the surrender; and

                  (2)      if the Member is a Contracted-out Member the
                           reduction in the Member's pension attributable to
                           Pensionable Service before 6 April 1997 resulting
                           from an election made pursuant to sub-Rule 15.1 must
                           not be such as to reduce the Member's pension below
                           his Guaranteed Minimum Pension.

         15.4     SURRENDER FACTORS

                  In determining the rate at which a Member's pension may be
                  surrendered pursuant to this Rule in return for the provision
                  by the Scheme of a pension or pensions for the Member's spouse
                  and/or one or more of the Member's Dependants, the Trustees
                  shall use such surrender factors as, having taken advice from
                  the Actuary, they shall think fit and the Principal Employer
                  shall approve.

         15.5     EFFECT OF DEATH OF SPOUSE OR NOMINATED DEPENDANT

                  If the spouse or any Dependant of a Member who is entitled to
                  a pension from the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15.1 dies before the Member
                  but on or after the date when the Member's own pension has
                  commenced to be paid, the Member's election made pursuant to
                  this Rule shall remain in force and he shall remain entitled
                  only to the part of his pension which he has not surrendered.

                  If the spouse or any Dependant of a Member who is entitled to
                  a pension form the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15.1 dies before the Member
                  dies and before the date when the Member's pension

                                       109
<PAGE>

                  commences to be paid, the Member's election in respect of such
                  spouse or such Dependant shall be cancelled automatically with
                  effect from the spouse's or Dependant's death and the Member's
                  entitlement to pension from the Scheme shall be the same as it
                  would have been if in respect of such spouse or Dependant that
                  election had not been made.

         15.6     REVOCATION OF MEMBER'S ELECTION

                  An election made by a Member pursuant to sub-Rule 15.1 may be
                  revoked:-

                  (1)      by the Member only with the Trustees' consent and
                           only prior to the earlier of his Normal Retirement
                           Age and the commencement of his pension from the
                           Scheme; and

                  (2)      by the Trustees if the Member retires from Service
                           prior to his Normal Retirement Age.

                  In either such case the Member's entitlement to pension from
                  the Scheme shall be the same as it would have been if that
                  election had not been made.

         15.7     FURTHER ELECTION FOLLOWING CANCELLATION OR REVOCATION

                  Following the cancellation or revocation of a Member's
                  election under (as the case may be) sub-Rule 15.5 or 15.6
                  above the Member may, if he so wishes but subject always to
                  sub-Rule 15.2 and the agreement of the Trustees, make a
                  further election in accordance with sub-Rule 15.1

                                       110
<PAGE>

                      SECTION 6: BENEFITS ON MEMBER'S DEATH

16       BENEFITS ON MEMBER'S DEATH: GENERAL

         16.1     CATEGORIES OF BENEFIT PAYABLE

                  If a Member dies, benefits will be provided from the Staff
                  Section in one or more of the following categories:-

                  (1)      a lump sum;

                  (2)      a spouse's pension;

                  (3)      a Financial Dependant's pension; and

                  (4)      children's pensions.

                  The particular benefits payable on the Member's death depend
                  on whether the Member dies in Pensionable Service (Rule 17),
                  in Service on or after Normal Retirement Age (Rule 18) or
                  after the commencement of his own pension (Rule 19).

                  If a Member dies after his Pensionable Service has terminated
                  but before the commencement of his own pension, the benefits
                  payable on his death are determined in accordance with Section
                  7 of these Rules.

         16.2     PROVISIONS APPLICABLE TO PENSIONS ON MEMBER'S DEATH

                  16.2.1   COMMENCEMENT

                           A spouse's or Dependent Child's pension shall
                           commence on the day which next follows the date of
                           the Member's death.

                  16.2.2   TERMINATION

                           (a)      SPOUSE'S PENSION. A spouse's pension shall
                                    terminate with the last instalment paid
                                    before the spouse dies

                           (b)      FINANCIAL DEPENDANT'S PENSION. A Financial
                                    Dependant's pension shall terminate in
                                    accordance with sub-Rule 17.3, 18.3 or 19.4
                                    (as the case may be).

                           (c)      DEPENDENT CHILD'S PENSION. A Dependent
                                    Child's pension shall terminate with the
                                    last instalment paid before the earliest of
                                    the following dates:-

                                    (1)      if the Dependent Child does not
                                             continue in full-time educational
                                             or vocational training after
                                             attaining age 18, when the
                                             Dependent Child attains age 18;

                                    (2)      if the Dependent Child does
                                             continue in full-time educational
                                             or vocational training after
                                             attaining age 18,

                                       111
<PAGE>

                                             when the Dependent Child ceases to
                                             be in full-time educational or
                                             vocational training or attains age
                                             21 if earlier; or

                                    (3)      the date of the Dependent Child's
                                             death;

                                    except that in the case of a child who is a
                                    Dependent Child as a result of being wholly
                                    or partly financially dependent on the
                                    Member by reason of physical or mental
                                    incapacity, the Dependent Child's pension
                                    shall terminate at such time as the Trustees
                                    shall decide.

                  16.2.3   PENSION INCREASES

                           Pensions payable to Member's spouses, Financial
                           Dependants and Dependent Children under these Rules
                           shall be increased in accordance with Rule 28.

                  16.2.4   COMMUTATION

                           A pension payable to a Member's spouse, Financial
                           Dependant or Dependent Child may only be commuted if
                           the pension is Trivial. Such a pension may be
                           commuted when it becomes payable or when the Member's
                           own pension is commuted on grounds of triviality.

                  16.2.5   GMP REQUIREMENTS

                           To the extent that any part of a pension payable to
                           the Member's spouse is a Guaranteed Minimum Pension:-

                           (1)      it is subject to the overriding guarantee
                                    set out in the GMP Rules; and

                           (2)      it may only be commuted in accordance with
                                    the GMP Rules.

17       DEATH IN PENSIONABLE SERVICE

         17.1     LUMP SUM BENEFIT

                  If a Member dies in Pensionable Service before his Normal
                  Retirement Age, there shall be payable in accordance with
                  Clause 22 in Schedule 2 to this Deed a lump sum equal to three
                  times the Member's Pensionable Earnings.

                  The amount payable under this sub-Rule upon the death of any
                  Member shall not exceed the amount which the Trustees receive,
                  as a result of the Member's death, under any policy by which
                  the Member's life is for the time being assured; but this
                  paragraph of this sub-Rule shall not limit the amount which
                  the Trustees are entitled to claim from the underwriter or
                  underwriters of the policy in question.

                                       112
<PAGE>

         17.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount equal to one half of the
                  pension to which Member would have been entitled under Rule 8
                  if he had remained in Pensionable Service until his Normal
                  Retirement Age (based on the Member's Final Pensionable
                  Earnings at the date of his death).

         17.3     FINANCIAL DEPENDENT'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependent;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependent of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 17.2 if the Member had been survived by a
                  spouse) for such period and in all other respects on such
                  terms and subject to such conditions as they may in their
                  discretion think fit.

         17.4     CHILDREN'S PENSIONS:-

                  17.4.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDENT

                           If a Member:-

                           (1)      dies in Pensionable Service before Normal
                                    Retirement Age;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependent to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 17.3; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:

                                      113
<PAGE>

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a spouse's pension under sub-Rule 17.2 if
                                    the Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 17.2 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  17.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDENT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 17.2 or a Member's Financial
                                    Dependent under sub-Rule 17.3; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependent there is any child
                                    living who:

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Member's death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependent's death;

                           the spouse's or Financial Dependent's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child, the
                           spouse's or Financial Dependent's pension shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may think fit.

                  17.4.3   ADDITIONAL PENSION

                           If a Member:-

                           (1)      dies in Pensionable Service before Normal
                                    Retirement Age; and

                           (2)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) in
                           addition to any pension or pensions payable under
                           sub-Rules 17.4.1 or 17.4.2, a pension (or pensions)
                           calculated as follows:-

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    5 per cent of the Member's Pensionable
                                    Earnings; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to 5 per cent of the

                                      114
<PAGE>

                           Member's Pensionable Earnings in respect of each
                           child (but limited to a maximum of 15 per cent) and
                           which shall be divided amongst the Dependent Children
                           in such shares as the Trustees may think fit.

18       DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE

         18.1     LUMP SUM BENEFIT

                  If a Member dies in Service on or after his Normal Retirement
                  Age, there shall be payable in accordance with Clause 22 in
                  Schedule 2 to this Deed a lump sum equal to five times what
                  would have been the initial annual rate of the Member's
                  pension from the Scheme under Rule 13 if he had retired on the
                  day before his death.

         18.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies in Service on or after Normal Retirement Age;
                           and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount calculated using the
                  formula:-

                             1/2 x Member's Pension

                  where "Member's Pension" is what would have been the initial
                  amount of the Member's pension from the Scheme under Rule 13
                  if he had retired on the day before his death and any exercise
                  by the Member of his options under Rules 14 (commutation) or
                  15 (surrender) were disregarded.

         18.3     FINANCIAL DEPENDENT'S PENSION

                  If a Member:-

                  (1)      dies in Service on or after Normal Retirement Age;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependent;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependent of such initial amount (not
                  exceeding the amount which would have been payable under
                  sub-Rule 18.2 if the Member had been survived by a spouse) for
                  such period and in all other respects on such terms and
                  subject to such conditions as they may in their discretion
                  think fit.

                                      115
<PAGE>

         18.4     CHILDREN'S PENSIONS

                  18.4.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDENT

                           If a Member:-

                           (1)      dies in Service on or after Normal
                                    Retirement Age;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependent to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 18.3; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a spouse's pension under sub-Rule 18.2 if
                                    the Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 18.2 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  18.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDENT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 18.2 or a Member's Financial
                                    Dependent under sub-Rule 18.3; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependent there is any child
                                    living who:-

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Member's death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependent's death;

                           the spouse's or Financial Dependent's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child, the
                           spouse's or Financial Dependent's pension shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may think fit.

                                      116
<PAGE>

19       DEATH AFTER RETIREMENT

         19.1     LUMP SUM BENEFIT: (A) 5 YEAR GUARANTEE

                  If a Member dies within the period of five years from and
                  including the date when his pension from the Scheme commences
                  to be payable, there shall be payable in accordance with
                  Clause 22 in Schedule 2 to this Deed a lump sum equal to the
                  difference between:-

                  (a)      the aggregate amount of pension which the Member
                           would have received during that five year period if
                           he had survived to the end of the period (calculated
                           on the basis that the annual rate of pension payable
                           at the date of his death would have continued to
                           apply for the remainder of the period); and

                  (b)      the amount of pension actually paid to him before his
                           death.

         19.2     LUMP SUM BENEFIT: (B) CONTINUED LIFE COVER IN SPECIAL CASES

                  Where a Member retires with an immediate early retirement
                  pension:-

                  (1)      under Rule 11 (redundancy early retirement) where the
                           Member's Pensionable Service commenced before 1
                           October 1991; or

                  (2)      under Rule 12 (early retirement due to Serious
                           Ill-health);

                  and the Member dies on or after the commencement of his early
                  retirement pension but before his Normal Retirement Age,
                  then:-

                  (a)      if his pension is a redundancy early retirement
                           pension, a lump sum equal to three times the Member's
                           Pensionable Earnings shall be payable to his personal
                           representatives; or

                  (b)      if his pension is a Serious Ill-health early
                           retirement pension, a lump sum equal to three times
                           the Member's Pensionable Earnings (or, if he is in
                           receipt of a Serious Ill-Health pension which is less
                           than the maximum permitted under sub-Rule 12, a lump
                           sum of such amount as the Trustees may decide) shall
                           be payable in accordance with Clause 22 in Schedule 2
                           to this Deed.

         19.3     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies on or after the date when his pension from the
                           Scheme commences to be payable; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                                      117
<PAGE>

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount calculated using the
                  formula:-

                                    1/2 x Member's Pension

                  where "Member's Pension" means the amount of the Member's
                  pension from the Scheme at the date of his death or, if the
                  Member had exercised either of his options under Rules 14
                  (commutation) or 15 (surrender), what would have been the
                  amount of the Member's pension from the Scheme at the date of
                  his death if he had not exercised those options.

         19.4     FINANCIAL DEPENDENT'S PENSION

                  If a Member:-

                  (1)      dies on or after the date when his pension from the
                           Scheme commences to be payable; and

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependent;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependent of such initial amount (not
                  exceeding the amount which would have been payable under
                  sub-Rule 19.3 if the Member had been survived by a spouse) for
                  such period and in all other respects on such terms and
                  subject to such conditions as they may in their discretion
                  think fit.

         19.5     CHILDREN'S PENSIONS

                  19.5.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDENT

                           If a Member:-

                           (1)      dies on or after the date when his pension
                                    from the Scheme commences to be payable;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependent to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 19.4; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a

                                      118
<PAGE>

                                    spouse's pension under sub-Rule 19.3 if the
                                    Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 19.3 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  19.5.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDENT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 19.3 or a Member's Financial
                                    Dependent under sub-Rule 19.4; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependent there is any child
                                    living who:-

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Members death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependent's death;

                           the spouse's or Financial Dependent's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child, the
                           spouse's or Financial Dependent's pension shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may think fit.

                                      119
<PAGE>

                            SECTION 7: EARLY LEAVERS

20       EARLY LEAVERS: GENERAL

         20.1     APPLICATION OF THIS SECTION TO EARLY LEAVERS

                  This Section applies where, before a Member attains Normal
                  Retirement Age, his Pensionable Service is terminated by him
                  leaving Service or withdrawing from membership of the Staff
                  Section whilst remaining in Service, and he does not become
                  entitled to an early retirement pension under Rules 9 to 12.

         20.2     EARLY LEAVERS NOT QUALIFYING FOR PRESERVED BENEFITS

                  If:-

                  (a)      the Member has completed less than two years'
                           Qualifying Service when his Pensionable Service
                           terminates; and

                  (b)      no transfer payment has been made to the Scheme in
                           respect of his rights under a personal pension
                           scheme;

                  he is entitled to a refund of contributions in accordance with
                  Rule 21.

         20.3     EARLY LEAVERS WHO QUALIFY FOR PRESERVED BENEFITS

                  If:-

                  (a)      the Member has completed at least two years'
                           Qualifying Service when his Pensionable Service
                           terminates; or

                  (b)      a transfer payment has been made to the Scheme in
                           respect of his rights under a personal pension
                           scheme;

                  he is entitled to preserved benefits in accordance with Rule
                  22.

21       EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS

         21.1     REFUND OF CONTRIBUTIONS

                  Where, as provided in sub-Rule 20.2, a Member is not entitled
                  to preserved benefits under the Scheme, there shall be payable
                  to him, in substitution for all other benefits payable to or
                  in respect of him under the Scheme, an amount equal to his
                  Member's Contributions less:-

                  (1)      such amount as the Trustees are entitled to retain
                           out of the refund by virtue of section 61 of the
                           Pension Schemes Act as a result of electing to pay a
                           contributions equivalent premium in respect of such
                           Member (being so much of the premium as is
                           attributable to primary Class 1 contributions); and

                                      120
<PAGE>

                  (2)      such tax as the Trustees may be required to deduct.

         21.2     TRANSFER OPTION

                  A Member to whom sub-Rule 21.1 applies may instead of taking a
                  refund of his Member's Contributions elect by giving prior
                  written notice to the Trustees to have an amount equal to his
                  Member's Contributions paid to another occupational pension
                  scheme or a personal pension scheme pursuant to Clause 19 in
                  Schedule 2.

2.22     EARLY LEAVER ENTITLED TO PRESERVED BENEFITS

         22.1     ENTITLEMENT TO PRESERVED BENEFITS

                  Where, as provided in sub-Rule 20.3, a Member is entitled to
                  preserved benefits under the Scheme, the Member is a Deferred
                  Member and the benefits payable to and in respect of him from
                  the Scheme upon the termination of his Pensionable Service
                  shall be determined in accordance with this Rule and Rules 23
                  to 26.

         22.2     COMMUTATION AND/OR SURRENDER OF PRESERVED PENSION

                  The preserved pension payable to any Deferred Member may be:-

                  (1)      commuted for a lump sum, subject to and in accordance
                           with the provisions of Rule 14; and/or

                  (2)      surrendered in return for the provision by the Scheme
                           of a pension or pensions for one or more of his
                           Dependents, subject to and in accordance with the
                           provisions of Rule 15.

         22.3     OTHER PROVISIONS APPLICABLE TO PRESERVED PENSIONS

                  Any pension payable under this rule:-

                  (1)      shall be reduced in accordance with Rule 14 or 15 to
                           the extent that it is commuted or surrendered under
                           either of those Rules.

                  (2)      shall be payable in accordance with Rule 27; and

                  (3)      shall, after it commences, be subject to increases in
                           accordance with Rule 28.

         22.4     SUPPLEMENTS TO PRESERVED PENSIONS

                  Deferred Members' preserved pensions under Rules 23 to 25 may
                  be supplemented:-

                  (1)      as a result of the Member having paid additional
                           voluntary contributions in accordance with sub-Rule
                           3.4 or the Former Provisions;

                                      121
<PAGE>

                  (2)      as a result of a transfer payment or transfer
                           payments having been received in respect of the
                           Member under Clause 18 in Schedule 2 to this Deed or
                           under the Former Provisions; or

                  (3)      as a result of the exercise of the augmentation
                           powers contained in Clause 21 in Schedule 2 to this
                           Deed.

                  The extent to which Rules 14 (commutation option), 15
                  (surrender option), 27 (payment of pensions) and 28 (pension
                  increases) apply to any supplement to the Member's retirement
                  pension referred to in this sub-Rule 22.4 depends on the terms
                  agreed between the Member and the Trustees in the case of
                  additional voluntary contributions and transfer payments and
                  on the terms specified by the Trustees in the case of
                  augmentations.

         22.5     CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                  The Trustees must ensure:-

                  (1)      that if the Member was in Contracted-out Employment
                           in relation to the Scheme before 6 April 1997, the
                           Member's retirement pension attributable to
                           Pensionable Service prior to 6 April 1997 complies
                           with the GMP Rules; and

                  (2)      that the Member's retirement benefits do not exceed
                           the limits applicable to them under the Revenue
                           Limits Rules.

         22.6     ALTERNATIVES TO PRESERVED BENEFITS

                  If a Deferred Member:-

                  (1)      has acquired a right under section 94 of the Pension
                           Schemes Act to the cash equivalent of the benefits
                           which have accrued to or in respect of him under the
                           Scheme; and

                  (2)      he has not lost that right in accordance with section
                           100 of the Pension Schemes Act;

                  he may require the Trustees to use the cash equivalent in one
                  or more of the ways specified in section 95 of the Pension
                  Schemes Act. In that case the provisions of Part IV of Chapter
                  IV of time Pension Schemes Act shall apply generally,
                  including the discharge of the Trustees pursuant to section 99
                  of the Pension Schemes Act.

                  Except to the extent that a Deferred Member is entitled to
                  exercise, and exercises, the option conferred by section 95 of
                  the Pension Schemes Act, if he wishes the benefits accrued to
                  and in respect of him under the Scheme to be bought out or
                  transferred to another retirement benefits scheme or personal
                  pension scheme, he may request the Trustees to exercise their
                  powers under Clauses 19 or 20 in Schedule 2 to this Deed.

                                      122
<PAGE>

23       COMMENCEMENT OF PRESERVED BENEFITS AT NRA

         23.1     PAYMENT

                  At his Normal Retirement Age a Deferred Member shall be
                  entitled to a pension from the Scheme payable for the
                  remainder of his lifetime.

         23.2     INITIAL ANNUAL AMOUNT

                  The initial annual amount of a Deferred Member's pension at
                  Normal Retirement Age under sub-Rule 23.1 shall be determined
                  as follows:-

                  (1)      by first calculating his preserved pension prior to
                           revaluation by using the following formula:-

                         Final Pensionable Earnings x Staff Pensionable Service;
                                                      -------------------------
                                                                 60

                  (2)      by revaluing the part (if any) of the amount
                           determined pursuant to paragraph (1) of this sub-Rule
                           which is equal to the Member's Guaranteed Minimum
                           Pension in accordance with the GMP Rules; and

                  (3)      by revaluing the part of the amount determined
                           pursuant to paragraph (1) of this sub-Rule which
                           exceeds the Member's Guaranteed Minimum Pension in
                           accordance with the provisions of Chapter II of Part
                           IV of the Pension Schemes Act if the benefits payable
                           to and in respect of the Member under the Scheme are
                           required to be revalued under that Chapter.

         23.3     TRANSFERRED RACAL RBS MEMBERS

                  A Deferred Member who becomes entitled to a pension at Normal
                  Retirement Age in accordance with sub-Rule 23.1 and who is a
                  Transferred Racal RBS Member shall also be entitled to a cash
                  sum calculated by using the following formula:-

                          Final Pensionable Earnings x Racal RBS Service
                                                       -----------------
                                                             480

24       COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA

         24.1     CONDITIONS FOR EARLY COMMENCEMENT

                  A Deferred Member may elect that his pension shall commence
                  from a date before his Normal Retirement Age if the following
                  conditions are satisfied:-

                  (1)      (a) the Deferred Member has attained the age of 50 or
                           (b) in the Trustees' opinion after taking medical
                           advice he has become incapable of following his
                           normal employment by reason of Serious Ill-health;
                           and

                  (2)      the Trustees agree to the commencement of his pension
                           from that date (except that in the case of a Pre-88
                           Member, such consent shall not be

                                      123
<PAGE>

                           required to the commencement of the pension on or
                           after the Member's 60th birthday).

         24.2     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rules 24.3 and 24.4 the initial amount of a
                  Deferred Member's pension under sub-Rule 24.1 shall be
                  determined as follows:-

                  (1)      by calculating the amount referred to in paragraph
                           (1) of sub-Rule 23.2 and revaluing such amount in the
                           manner provided for in paragraphs (2) and (3) of
                           sub-Rule 23.2 to the date when the pension is to
                           commence; and

                  (2)      by applying an early retirement reduction factor to
                           the amount determined pursuant to paragraph (1) of
                           this sub-Rule in respect of the period from the date
                           when the pension becomes payable until the Member's
                           Normal Retirement Age in order to take account of the
                           fact that the pension is likely to be payable for
                           longer than if it were to commence at the Member's
                           Normal Retirement Age. The amount of the reduction
                           factor shall be determined by the Trustees and the
                           Principal Employer after consulting the Actuary.

         24.3     ADJUSTMENT FOR MALE PRE-88 MEMBERS

                  If the Member is a male Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 24.2 shall be determined as
                  follows:-

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 17 May 1990 shall be
                           reduced in respect of the period from the date it
                           becomes payable until the Member's Normal Retirement
                           Age;

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 17 May 1990 but
                           before 1 September 1993 shall be reduced in respect
                           of the period (if any) from the date it becomes
                           payable until the Member's 60th birthday; and

                  (c)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date it becomes payable until the Member' s Normal
                           Retirement Age.

         24.4     ADJUSTMENT FOR FEMALE PRE-88 MEMBERS

                  If the Member is a female Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 24.2 shall be as follows:-

                  (a)      the part of the pension attributable to Staff
                           Pensionable Service before 1 September 1993 shall be
                           reduced in respect of the period (if any) from the
                           date it becomes payable until the Member's 60th
                           birthday; and

                                      124
<PAGE>

                  (b)      the part of the pension attributable to Staff
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date it becomes payable until the Member's Normal
                           Retirement Age.

         24.5     TRANSFERRED RACAL RBS MEMBERS

                  A Deferred Member whose pension commences before Normal
                  Retirement Age in accordance with sub-Rule 24.1 and who is a
                  Transferred Racal RBS Member shall also be entitled to a cash
                  sum calculated in two stages:-

                  (1)      first by using the following formula:-

                           Final Pensionable Earnings x Racal RBS Service
                                                        -----------------
                                                               480

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect from the date when the
                           cash sum became payable until in the case of a male
                           Member his Normal Retirement Age and in the case of a
                           female member her 60th birthday. The amount of the
                           reduction factor shall be determined by the Trustees
                           and the Principal Employer after consulting the
                           Actuary.

         24.6     PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations the Trustees must be reasonably satisfied that,
                  when any Member's benefits become payable under this Rule
                  before his Normal Pension Age, the total value of the Member's
                  benefits is at least equal in value to the benefits that have
                  accrued to or in respect of him under the Rules (on the basis
                  that the Rules are the "applicable rules" for the purpose of
                  Section 94(2) of the Pension Schemes Act).

25       COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA

         25.1     CONDITIONS FOR LATE COMMENCEMENT: (a) 89 LIMITS MEMBERS

                  If a Deferred Member:-

                  (1)      is an 89 Limits Member for the purposes of the
                           Revenue Limits Rules;

                  (2)      leaves Service before his Normal Retirement Age; and

                  (3)      continues in employment (other than Service) after
                           his Normal Retirement Age;

                  he may, with the consent of the Trustees, elect that the
                  commencement of his pension shall be postponed until a date
                  which is after his Normal Retirement Age but not later than
                  his 75th birthday.

         25.2     CONDITIONS FOR LATE COMMENCEMENT: (b) OTHER MEMBERS

                  (1)      is a Pre-87 Limits Member or an 87 Limits Member for
                           the purposes of the Revenue Limits Rules:

                                      125
<PAGE>

                  (2)      leaves Service before his Normal Retirement Age; and

                  (3)      continues in employment (other than Service) after
                           his Normal Retirement Age;

                  he may with the consent of the Trustees, elect that the
                  commencement of his pension shall be postponed until his
                  employment terminates or his 7Oth birthday if earlier.

         25.3     INITIAL ANNUAL AMOUNT

                  Where the commencement of a Deferred Member's pension has been
                  postponed in accordance with sub-Rules 25.1 or 25.2, the
                  initial annual amount of his pension shall be determined as
                  follows:

                  (1)      by calculating his preserved pension at Normal
                           Retirement Age in accordance with sub-Rule 23.2; and

                  (2)      by increasing the amount determined pursuant to
                           paragraph (1) of this sub-Rule by such late
                           retirement factor as the Trustees having consulted
                           the Actuary consider appropriate having regard to the
                           period of postponement.

         25.4     TRANSFERRED RACAL RBS MEMBERS

                  A Member whose pension is paid in accordance with this Rule 25
                  and who is a Transferred RBS Racal Member shall also be
                  entitled to a cash sum calculated by using the following
                  formula:-

                  Final Pensionable Earnings x Racal RBS Service
                                               -----------------
                                                      480

                  and adjusting the amount thereby obtained in the same manner
                  as his pension is adjusted in accordance with sub-Rule
                  25.3(2).

         25.5     PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations the Trustees must be reasonably satisfied that,
                  when any Member's pension becomes payable under this Rule
                  after his Normal Pension Age, the total value of the Member's
                  benefits is at least equal in value to the benefits that have
                  accrued to or in respect of him under the Rules (on the basis
                  that the Rules are the "applicable rules" for the purpose of
                  section 94(2) of the Pension Schemes Act).

26       BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS

         26.1     LUMP SUM ON DEATH OF DEFERRED MEMBER WHILST BENEFITS PRESERVED

                  If a Deferred Member dies before his preserved pension
                  commences to be paid, there shall be payable from the Scheme
                  to the Member's estate a lump sum equal to the Member's
                  Contributions.

                                      126
<PAGE>

         26.2     SPOUSE'S PENSION ON DEATH OF DEFERRED MEMBER WHILST
                  BENEFITS PRESERVED

                  If a Deferred Member:-

                  (1)      dies before his preserved pension commences to be
                           paid; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount, determined as follows:-

                  (1)      by first calculating the amount found by using the
                           formula:-

                     Final Pensionable Earnings x Staff Pensionable Service; and
                                                  -------------------------
                                                             160

                  (2)      by then revaluing the part of the amount found under
                           paragraph (1) of this sub-Rule which is attributable
                           to the Member's Pensionable Service on or after 6
                           April 1997 in accordance with section 84 of the
                           Pension Schemes Act as though it were a benefit of
                           the kind mentioned in section 83(1)(a) of the Pension
                           Schemes Act.

         26.3     FINANCIAL DEPENDENT'S PENSION

                  If a Member:-

                  (1)      dies before his preserved pension commences to be
                           paid;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependent;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependent of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 26.2 if the Member had been survived by a
                  spouse) for such period and in all other respects on such
                  terms and subject to such conditions as they may in their
                  discretion think fit.

         26.4     BENEFITS ON DEATH OF DEFERRED MEMBER AFTER PENSION COMMENCES

                  If a Deferred Member dies on or after the date when his
                  pension from the Scheme commences to be payable, benefits
                  shall be payable in respect of him in accordance with Rule 19.

         26.5     OTHER PROVISIONS APPLICABLE TO SURVIVORS' PENSIONS

                  The provisions of Rule 16 shall apply to the pensions payable
                  to the spouses and Financial Dependents of deceased Deferred
                  Members under this Rule.

                                      127
<PAGE>

           SECTION 8: PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES

27       PAYMENT OF PENSIONS

         27.1     PAYMENT ARRANGEMENTS

                  Subject to sub-Rule 27.2, all pensions payable from the Scheme
                  shall be paid in advance by monthly installments on such
                  working day in the month as the Trustee may from time to time
                  decide except that the first installment of any pension may be
                  paid in arrears as soon as is reasonably practicable after the
                  pension commences.

         27.2     POWER TO CHANGE PAYMENT ARRANGEMENTS

                  The Trustees shall have power with the Principal Employer's
                  consent to alter the date on which and/or intervals at which
                  pensions are paid from the Scheme (including power to make
                  alterations which result in pensions being payable otherwise
                  than in advance) and when doing so to make such arrangements
                  for apportionment in respect of the commencement and
                  termination of pensions and such transitional arrangements in
                  respect of any such alteration in each case as they may
                  consider necessary or desirable.

         27.3     OVERPAYMENT OF PENSIONS

                  If any installment of any pension is paid after the person
                  entitled to it has died, such installment (or all of them if
                  more than one) shall be repayable to the Trustees by the
                  recipient or his personal representatives (as the case may
                  be).

28       PENSION INCREASES

         28.1     GUARANTEED MINIMUM PENSIONS

                  Insofar as any pension payable from the Scheme and
                  attributable to Pensionable Service before 6 April 1997 is a
                  Guaranteed Minimum Pension, it shall be increased to the
                  extent required by the GMP Rules.

         28.2     OTHER PENSIONS

                  Insofar as any pension payable from the Scheme is attributable
                  to Pensionable Service before 6 April 1997 and is not a
                  Guaranteed Minimum Pension, or is attributable to Pensionable
                  Service on or after 6 April 1997, its annual rate shall be
                  increased with effect from 1 April each year by the lesser
                  of:-

                  (1)      the percentage increase in the RPI during the year
                           ended on the preceding 30 September; and

                  (2)      five per cent.

                                      128
<PAGE>

         28.3     MEMBERS IN PENSIONABLE SERVICE ON 1 SEPTEMBER 1993

                  In the case of any pension which is payable from the Scheme to
                  or in respect of a Member who was in Pensionable Service on 1
                  September 1993, the annual rate of the increases under
                  sub-Rules 28.1 and 28.2 shall be not less than 4 per cent.

         28.4     FIRST ANNUAL INCREASE

                  On the 1 April which first follows the date on which any
                  pension commences to be paid, the increase under sub-Rule 28.2
                  shall be 1/12th of the percentage increase provided for in
                  that sub-Rule multiplied by the number of complete months in
                  the period from the date on which the pension commences to the
                  following 31 March.

                                      129
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      130
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

         SCHEDULE 4: EXECUTIVE MANAGER AND SENIOR MANAGER SECTION RULES

SECTION 1: INTRODUCTION, ELIGIBILITY AND MEMBERSHIP ....................137

      INTRODUCTION .....................................................137
      1.1  Interpretation ..............................................137
      1.2  Defined terms ...............................................137
      1.3  Application .................................................138
      1.4  Transfer to another Section .................................138
      1.5  Member categories ...........................................138

2     ELIGIBILITY AND MEMBERSHIP .......................................138
      2.1  Eligibility conditions ......................................138
      2.2  Evidence as to fulfillment of conditions ....................139
      2.3  Admission of new Employees to membership when first
           eligible ....................................................139
      2.4  Medical and other evidence ..................................139
      2.5  Discretionary admission to membership .......................139
      2 6  Effect of admission to membership ...........................139
      2.7  Opting out ..................................................140
      2.8  Re-joining the Scheme after opting out ......................140
      2.9  Effect of providing incomplete or inaccurate information ....140

SECTION 2: MEMBERS' CONTRIBUTIONS ......................................141

3     MEMBERS' CONTRIBUTIONS ...........................................141
      3.1  Compulsory contributions ....................................141
      3.2  Voluntary contributions .....................................141
      3.3  Notice to be given by Members concerning voluntary
           contributions ...............................................141
      3.4  Benefits in respect of voluntary contributions ..............141
      3.5  Repayment of surplus voluntary contributions ................142
      3.6  Deduction of contributions from salary or pay ...............142
      3.7  Termination of Member's contributions .......................142
      3.8  Member's contributions during temporary absence .............142

SECTION 3: PENSIONABLE SERVICE AND TEMPORARY ABSENCE ...................143

4     CALCULATION OF VODAFONE MANAGERS PENSIONABLE SERVICE .............143
      4.1  Purpose of this Rule ........................................143
      4.2  Vodafone Managers Pensionable Service .......................143
      4.3  More than one period of Vodafone Managers Pensionable
           Service .....................................................143
      4 4  Change of Scheme Employer ...................................144

5     MEMBERS IN PART-TIME EMPLOYMENT ..................................144
      5.1  Purpose of this Rule ........................................144
      5.2  Interpretation ..............................................144

                                      131
<PAGE>

      5.3  Members to whom this Rule applies ...........................144
      5.4  Conversion into full-time equivalent.. ......................145
      5.5  Treatment of notional Pensionable Service ...................145

6     CONSEQUENCES OF TEMPORARY ABSENCE ................................145
      6.1  Purpose of this Rule ........................................145
      6.2  Maternity absence: (a) paid .................................146
      6.3  Maternity absence: (b) unpaid ...............................146
      6.4  Other causes of temporary absence ...........................147

SECTION 4: MEMBER'S RETIREMENT BENEFITS ................................149

7     MEMBER'S RETIREMENT BENEFITS: GENERAL ............................149
      7.1  Member's retirement benefits ................................149
      7.2  Other provisions applicable to retirement pensions ..........149
      7.3  Supplements to retirement pensions ..........................149
      7.4  Contracting-out and Inland Revenue requirements .............150

8     NORMAL RETIREMENT ................................................150
      8.1  Member's entitlement to pension from Normal Retirement
           Age .........................................................150
      8.2  Initial annual amount of Member's pension ...................150
      8.3  Transferred Pensionable Service .............................150
      8.4  Transferred Racal RBS Members ...............................151

9     EARLY RETIREMENT: (A) GENERALLY ..................................151
      9.1   Circumstances in which Member's pension may commence
            early ......................................................151
      9.2   Preservation requirements ..................................151
      9.3   GMP requirements ...........................................151

10    EARLY RETIREMENT: (B) VOLUNTARY ..................................152
      10.1  When payable ...............................................152
      10.2  Initial annual amount ......................................152
      10.3  Adjustment for male Pre-88 Members .........................152
      10.4  Adjustment for female Pre-88 Members .......................153
      10.5  Transferred Pensionable Service ............................153
      10.6  Transferred Racal RBS Members ..............................153

11    EARLY RETIREMENT: (C) REDUNDANCY .................................154
      11.1  When payable ...............................................154
      11.2  Initial annual amount ......................................154
      11.3  Adjustment for male Pre-88 Members .........................154
      11.4  Adjustment for female Pre-88 Members .......................155
      11.5  Reliance by Trustees on statements from Employers ..........155
      11.6  Transferred Racal RBS Members ..............................155

12    EARLY RETIREMENT: (D) SERIOUS ILL-HEALTH .........................155
      12.1  When payable ...............................................155
      12.2  Procedure ..................................................156
      12.3  Medical evidence before commencement of pension ............156
      12.4  Commencement ...............................................156

                                      132
<PAGE>

      12.5  Initial annual amount ......................................156
      12.6  Subsequent adjustment ......................................156
      12.7  Medical evidence after commencement of pension .............157
      12.8  Transferred Racal RBS Members ..............................157

13    LATE RETIREMENT ..................................................157
      13.1  Commencement of late retirement pension ....................157
      13.2  Initial annual amount of late retirement pension ...........158
      13.3  Transferred Racal RBS Members ..............................158

SECTION 5: ALTERNATIVES TO MEMBER'S PENSION ............................159

14    COMMUTATION ......................................................159
      14.1  Member's right to commute ..................................159
      14.2  Member's election to commute ...............................159
      14.3  Maximum lump sum ...........................................159
      14.4  Member continuing in Service after Normal Retirement Age ...159
      14.5  Benefits from Member's voluntary contributions .............159
      14.6  Exceptional circumstances of serious ill-health ............160
      14.7  Trivial pensions ...........................................160
      14.8  Commutation factors ........................................160
      14.9  GMP requirements ...........................................160

15    SURRENDER OPTION .................................................161
      15.1  Trustees' discretion to permit surrender ...................161
      15 2  Member's election to surrender .............................161
      15.3  Revenue and contracting-out limits on surrender ............161
      15.4  Surrender factors ..........................................161
      15.5  Effect of death of spouse or nominated Dependent ...........162
      15.6  Revocation of Member's election ............................162
      15.7  Further election following cancellation or revocation ......162

SECTION 6: BENEFITS ON MEMBER'S DEATH ..................................163

16    BENEFITS ON MEMBER'S DEATH: GENERAL ..............................163
      16.1  Categories of benefit payable ..............................163
      16.2  Provisions applicable to pensions on Member's death ........163

17    DEATH IN PENSIONABLE SERVICE .....................................164
      17.1  Lump sum benefit ...........................................164
      17.2  Spouse's pension ...........................................165
      17.3  Financial Dependent's pension ..............................165
      17.4  Children's pensions: .......................................165

18    DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE ...............167
      18.1  Lump sum benefit ...........................................167
      18.2  Spouse's pension ...........................................167
      18.3  Financial Dependent's pension ..............................167
      18.4  Children's pensions ........................................168

                                      133
<PAGE>

19    DEATH AFTER RETIREMENT ...........................................168
      19.1  Lump sum benefit: (a) 5 year guarantee .....................169
      19.2  Lump sum benefit: (b) continued life cover in special
            cases ......................................................169
      19.3  Spouse's pension ...........................................170
      19.4  Financial Dependents pension ...............................170
      19.5  Children's pensions ........................................170

SECTION 7: EARLY LEAVERS ...............................................171

20    EARLY LEAVERS: GENERAL ...........................................172
      20.1  Application of this Section to early leavers ...............172
      20.2  Early leavers not qualifying for preserved benefits ........172
      20.3  Early leavers who qualify for preserved benefits ...........172

21    EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS ..................172
      21.1  Refund of contributions ....................................172
      21.2  Transfer option ............................................173

22    EARLY LEAVER ENTITLED TO PRESERVED BENEFITS ......................173
      22.1  Entitlement to preserved benefits ..........................173
      22.2  Commutation and/or surrender of preserved pension ..........173
      22.3  Other provisions applicable to preserved pensions ..........173
      22.4  Supplements to preserved pensions ..........................173
      22.5  Contracting-out and Inland Revenue requirements ............174
      22.6  Alternatives to preserved benefits .........................174

23    COMMENCEMENT OF PRESERVED BENEFITS AT NRA ........................175
      23.1  Payment ....................................................175
      23.2  Initial annual amount ......................................175
      23.3  Transferred Pensionable Service ............................175
      23.4  Transferred Racal RBS Members ..............................175

24    COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA ....................176
      24.1  Conditions for early commencement ..........................176
      24.2  Initial annual amount ......................................176
      24.3  Adjustment for male Pre-88 Members .........................176
      24.4  Adjustment for female Pre-88 Members .......................177
      24.5  Transferred Racal RBS Members ..............................177
      24.6  Preservation requirements ..................................177

25    COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA .....................178
      25.1  Conditions for late commencement: (a) 89 Limits Members ....178
      25.2  Conditions for late commencement: (b) other Members ........178
      25.3  Initial annual amount ......................................178
      25.4  Transferred Racal RBS Members ..............................179
      25.5  Preservation requirements ..................................179

26    BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS ........179
      26.1  Lump sum on death of Deferred Member whilst benefits
            preserved ..................................................179
      26.2  Spouse's pension on death of Deferred Member whilst
            benefits preserved .........................................179

                                      134
<PAGE>

      26.3  Members with Transferred Pensionable Service ...............180
      26.4  Financial Dependent's pension ..............................180
      26 5  Benefits on death of Deferred Member after pension
            commences ..................................................180
      26.6  Other provisions applicable to survivors' pensions .........180

SECTION 8: PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES ...............181

27    PAYMENT OF PENSIONS ..............................................181
      27.1  Payment arrangements .......................................181
      27.2  Power to change payment arrangements .......................181
      27.3  Over-payment of pensions ...................................181

28    PENSION INCREASES ................................................181
      28.1  Guaranteed Minimum Pensions ................................181
      28.2  Other pensions .............................................181
      28.3  First annual increase ......................................182

                                      135
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      136
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                     SECOND DEFINITIVE TRUST DEED AND RULES

         SCHEDULE 4: EXECUTIVE MANAGER AND SENIOR MANAGER SECTION RULES

               SECTION 1: INTRODUCTION; ELIGIBILITY AND MEMBERSHIP

1        INTRODUCTION

         1.1      INTERPRETATION

                  These Rules shall be interpreted in accordance with Schedule I
                  to this Deed.

                  Any reference in this Schedule to a numbered Rule is to one of
                  these Rules unless the reference is to a rule in one of the
                  other Schedules.

                  Any reference in this Schedule to a Member is to a Member to
                  whom this Schedule applies as stated in sub-Rule 1.3.

         1.2      DEFINED TERMS

                  In these Rules the following words and expressions have the
                  following meanings respectively:-

                  "Normal Retirement Age" means the date of the Member's 65th
                  birthday;

                  "Racal RBS Service" means, in relation to a Transferred Racal
                  RBS Member, service which qualified for benefit under the
                  Racal RBS Scheme expressed in complete months;

                  "Racal EM&SM Pensionable Service" means, in relation to any
                  Member, any period of pensionable service under the Racal
                  EM&SM Scheme which he has been notified by the Trustees counts
                  towards his benefits under the Executive Manager and Senior
                  Manager Section of this Scheme;

                  "Transferred Pensionable Service" means Racal EM&SM
                  Pensionable Service or Vodafone Staff Pensionable Service; and

                  "Transferred Racal RBS Member" means a Member who:-

                  (1)      was a member of the Racal RBS Scheme on 31 October
                           1988;

                  (2)      joined this Scheme on 1 November 1988 as a full
                           contributory Member; and

                  (3)      became a Member of this Section of this Scheme on or
                           after the Revision Date (whether or not following any
                           period of pensionable service under the Vodafone
                           EM&SM Scheme);

                                      137
<PAGE>

                  "Vodafone Managers pensionable Service" means the total of the
                  periods referred to in sub-Rule 4.2:

                  "Vodafone Staff Pensionable Service" means, in relation to any
                  Member, any period of Pensionable Service under this Scheme
                  before the Revision Date and/or pensionable service under the
                  Staff Section of this Scheme on or after the Revision Date
                  which he has been notified by the Trustees counts towards his
                  benefits under the Executive Manager and Senior Manager
                  Section of this Scheme.

         1.3      APPLICATION

                  These Rules apply:-

                  (1)      to all Members who are in Pensionable Service on the
                           Revision Date and immediately before the Revision
                           Date were in pensionable service under the Vodafone
                           EM&SM Scheme; and

                  (2)      to all Members who become Members of the Executive
                           Manager and Senior Manager Section on or after the
                           Revision Date in accordance with Rule 2.

         1.4      TRANSFER TO ANOTHER SECTION

                  When any Member of this Section becomes a Member of another
                  Section of the Scheme, he shall cease to be entitled to
                  benefits under this Section.

         1.5      MEMBER CATEGORIES

                  Pre-88 Members had Normal Retirement Ages of 65 in the case of
                  men and 60 in the case of women until 31 August 1993.
                  Irrespective of their sex, Normal Retirement Age under this
                  Scheme or the Vodafone EM&SM Scheme (whichever was applicable)
                  for these Members became their 65th birthday with effect from
                  1 September 1993.

                  Members whose Service (as opposed to their Pensionable
                  Service) commenced on or after 1 January 1988 have always had
                  a Normal Retirement Age of 65 which applies to both sexes.
                  Members whose Service commences on or after the Revision Date
                  also have a Normal Retirement Age of 65.

2        ELIGIBILITY AND MEMBERSHIP

         2.1      ELIGIBILITY CONDITIONS

                  An Employee is eligible to become a Member if he fulfills the
                  following eligibility conditions unless he is informed by the
                  Principal Employer that he is not eligible to become a
                  Member:-

                  (1)      he is employed by one or more of the Employers as an
                           executive manager or senior manager; and

                                      138
<PAGE>

                  (2)      he is aged 18 years or over but under 64 years 11
                           months.

                  An Employee is not eligible to become a Member if and for so
                  long as he pays contributions to a personal pension scheme
                  approved or for which approval is being sought under Chapter
                  IV of Part XIV of the Taxes Act.

         2.2      EVIDENCE AS TO FULFILLMENT OF CONDITIONS

                  The Trustees may rely on a statement from an Employer as to
                  the fulfillment of the conditions in sub-Rule 2.1 in respect
                  of any Employee.

         2.3      ADMISSION OF NEW EMPLOYEES TO MEMBERSHIP WHEN FIRST ELIGIBLE

                  An Employee shall be admitted to membership of the Executive
                  Manager and Senior Manager Section with effect from the first
                  date on which he satisfies all the eligibility conditions set
                  out in sub-Rule 2.1 subject to the Trustees' powers under
                  sub-Rule 2.4 and (having regard to section 160 of the Pension
                  Schemes Act) with the right under sub-Rule 2.7 to opt out if
                  he does not wish to be or remain a Member.

         2.4      MEDICAL AND OTHER EVIDENCE

                  Before being admitted to membership of the Executive Manager
                  and Senior Manager Section an Employee shall produce such
                  evidence of health, age and such other matters (if any) as the
                  Trustees may require.

                  If when required to do so pursuant to this sub-Rule an
                  Employee fails to produce evidence of good health to the
                  satisfaction of the Trustees, the Trustees may decline to
                  admit him to membership or they may offer him membership on
                  such special terms (including as to modified or partial
                  benefits) as the Trustees with the consent of the Principal
                  Employer shall decide.

         2.5      DISCRETIONARY ADMISSION TO MEMBERSHIP

                  An Employee who would not otherwise be eligible for membership
                  of the Executive Manager and Senior Manager Section may be
                  admitted to membership of the Executive Manager and Senior
                  Manager Section with the consent of the Principal Employer and
                  the Trustees and on such terms and at such time as may be
                  agreed between the Trustees and the Principal Employer.

         2.6      EFFECT OF ADMISSION TO MEMBERSHIP

                  Upon being admitted to membership of the Executive Manager and
                  Senior Manager Section an Employee becomes a Member and is
                  bound by the Trust Deeds.

                                      139
<PAGE>

         2.7      OPTING OUT

                  A Member may at any time withdraw from active membership of
                  the Executive Manager and Senior Manager Section by giving to
                  his Employer for recording and transmission to the Trustees
                  not less than one month's notice to that effect ending on the
                  last day of any month on such form as the Trustees may
                  prescribe for that purpose, or such lesser period of notice
                  (if any) as the Trustees and the Employee may agree to accept.
                  Upon the expiration of such notice the Member concerned shall
                  be treated for the purposes of the Scheme as having terminated
                  his Pensionable Service. If the Member gives such notice
                  before paying any contributions to the Scheme, he shall be
                  treated as if he had never become Member.

         2.8      RE-JOINING THE SCHEME AFTER OPTING OUT

                  A Member who withdraws from active membership of the Executive
                  Manager and Senior Manager Section pursuant to sub-Rule 2.7
                  may, at the discretion of the Trustees and with the consent of
                  the Principal Employer, be re-admitted to membership of the
                  Executive Manager and Senior Manager Section provided he then
                  fulfills the eligibility conditions mentioned in sub-Rule 2.1
                  and satisfies the requirements of sub-Rule 2.4. Such
                  re-admission shall be for such benefits and subject to such
                  conditions as the Trustees and the Principal Employer shall
                  decide.

         2.9      EFFECT OF PROVIDING INCOMPLETE OR INACCURATE INFORMATION

                  Without prejudice to sub-Rule 2.4, if when required to do so
                  any Employee or Member fails to provide the Trustees with
                  information or provides them with information which is
                  incomplete or inaccurate, the Trustees may with the consent of
                  the Principal Employer modify the benefits payable to or in
                  respect of the Member under the Scheme to such extent as they
                  may consider appropriate in the circumstances.

                                      140
<PAGE>

                        SECTION 2: MEMBERS' CONTRIBUTIONS

3        MEMBERS' CONTRIBUTIONS

         3.1      COMPULSORY CONTRIBUTIONS

                  In each Scheme Year each Member shall pay contributions to the
                  Scheme in equal installments at the same time as he receives
                  pay from his Employer at the rate of 3.5% of his Pensionable
                  Earnings (or, in the case of a Member who is an 89 Limits
                  Member for the purposes of the Revenue Limits Rules, the
                  Permitted Maximum (as defined in the Revenue Limits Rules), if
                  less).

         3.2      VOLUNTARY CONTRIBUTIONS

                  A Member may pay voluntary contributions to the Scheme of such
                  amounts or at such rates (subject to the limits on Member's
                  contributions mentioned in the Revenue Limits Rules) and at
                  such intervals as he may agree with the Trustees. The assets
                  representing such voluntary contributions and the income from
                  them and any additions to them shall be held by the Trustees
                  separate from all the other assets of the Fund.

         3.3      NOTICE TO BE GIVEN BY MEMBERS CONCERNING VOLUNTARY
                  CONTRIBUTIONS

                  A Member must give the Trustees such notice as the Trustees
                  may require (not exceeding the maximum period of notice
                  allowed by Regulation 2(4) of the Pension Schemes (Voluntary
                  Contributions Requirements and Voluntary and Compulsory
                  Membership) Regulations 1987 (SI 1987 No. 1108)) of his
                  intention to pay voluntary contributions at a specified rate
                  or of a specified amount, or to vary that rate or amount.

         3.4      BENEFITS IN RESPECT OF VOLUNTARY CONTRIBUTIONS

                  The Trustees shall secure:-

                  (1)      that any voluntary contributions paid by a Member are
                           used to provide such benefits for or in respect of
                           him under the Scheme as the Trustees and the Member
                           may agree or, in the absence of agreement, as the
                           Trustees may decide and that such benefits:-

                           (a)      shall be additional to the benefits provided
                                    for or in respect of him under the following
                                    Rules: and

                           (b)      shall be money purchase benefits within the
                                    meaning of section 181 of the Pension
                                    Schemes Act; and

                  (2)      that the value of the additional benefits is
                           reasonable having regard to the amount of the
                           voluntary contributions.

                                      141
<PAGE>

         3.5      REPAYMENT OF SURPLUS VOLUNTARY CONTRIBUTIONS

                  This sub-Rule applies if a Member pays voluntary contributions
                  under this Rule and on his Scheme Exit Date the benefits which
                  have accrued to him are found to exceed the maximum total
                  benefits which may be provided by the Scheme to or in respect
                  of him under Revenue Limits.

                  (1)      To the extent that the excessive benefits have been
                           secured by the Member's voluntary contributions the
                           amount of the Scheme assets which secure the
                           excessive benefits and consist of or relate to those
                           contributions shall be determined by the Trustees
                           (for which purpose they may rely on the advice of the
                           Actuary).

                  (2)      The Trustees shall then pay that amount to the Member
                           (or, if the Member has died, to the Member's estate)
                           after deducting such tax as they may be required to
                           deduct and account for to the Inland Revenue.

                  (3)      The Trustees shall also comply with the requirements
                           of Regulation 5 of the Retirement Benefits Schemes
                           (Restriction on Discretion to Approve) (Additional
                           Voluntary Contributions) Regulations 1993 (SI 1993
                           No. 3016), and, where the Scheme is the "leading
                           scheme" in relation to the Member, with the
                           requirements of Regulation 6 of those Regulations so
                           far as they concern main schemes.

        3.6       DEDUCTION OF CONTRIBUTIONS FROM SALARY OR PAY

                  Each Member's Employer shall deduct from the Member's salary
                  or pay the amounts payable by the Member to the Scheme as
                  compulsory and voluntary contributions and pay them to the
                  Trustees promptly and in any event so as to comply with
                  section 49(8) of the Pensions Act and regulations made under
                  it (being at the date of this Deed regulation 16 of the
                  Administration Regulations which requires the payment to the
                  Trustees to be made within 19 days commencing from the end of
                  the month in which the amount is deducted from the Member's
                  earnings).

         3.7      TERMINATION OF MEMBER'S CONTRIBUTIONS

                  Unless a Member's Employer determines otherwise and notifies
                  the Member accordingly, but subject always to such Inland
                  Revenue consent as may from time to time be required, no
                  contributions shall be payable or may be paid by a Member
                  after his Normal Retirement Age or the date when his
                  Pensionable Service terminates, if earlier.

         3.8      MEMBER'S CONTRIBUTIONS DURING TEMPORARY ABSENCE

                  Where a Member is temporarily absent from work with his
                  Employer, the payment of his contributions under this Rule is
                  governed by Rule 6.

                                      142
<PAGE>

              SECTION 3: PENSIONABLE SERVICE AND TEMPORARY ABSENCE

4        CALCULATION OF VODAFONE MANAGERS PENSIONABLE SERVICE

         4.1      PURPOSE OF THIS RULE

                  Most of the benefits payable to or in respect of a Member
                  under the Executive Manager and Senior Manager Section are
                  determined by reference to the Member's Vodafone Managers
                  Pensionable Service. This Rule explains how a Member's
                  Vodafone Managers Pensionable Service is calculated.

         4.2      VODAFONE MANAGERS PENSIONABLE SERVICE

                  Subject to sub-Rule 43, a Member's Vodafone Managers
                  Pensionable Service for the purpose of calculating the
                  benefits payable to and in respect of him under the Executive
                  Manager and Service Manager Section is the total of the
                  following periods (which shall be expressed in complete years
                  with complete months which are not part of a complete year
                  being expressed as a fraction of a year):-

                  (1)      the period during which he was in Pensionable Service
                           under the Executive Manager and Senior Manager
                           Section; and

                  (2)      if he was in pensionable service under the Vodafone
                           EM&SM Scheme immediately before the Revision Date,
                           the period during which he was in pensionable service
                           under the Vodafone EM&SM Scheme ending on the day
                           before the Revision Date.

                  There shall be deducted any part of such period or periods
                  which does not count as Vodafone Managers Pensionable Service
                  due to temporary absence from work as provided in Rule 6 or
                  the applicable temporary absence rule prevailing at the time
                  when the absence occurred.

         4.3      MORE THAN ONE PERIOD OF VODAFONE MANAGERS PENSIONABLE SERVICE

                  If a member who has been in Pensionable Service leaves Service
                  or withdraws from active membership of the Executive Manager
                  and Senior Manager Section and subsequently rejoins the
                  Executive Manager and Senior Manager Section, each of the
                  periods of Vodafone Managers Pensionable Service shall count
                  as a separate period of Vodafone Managers Pensionable Service
                  unless:-

                  (a)      the Trustees with the consent of the Principal
                           Employer agree to aggregate them; or

                  (b)      the Member is a female Member who is absent from work
                           wholly or partly because of pregnancy or confinement
                           and the periods of Pensionable Service separated by
                           the period of maternity absence are required to be
                           treated as continuous by Part VIII of the Employment
                           Rights Act 1996.

                                      143
<PAGE>

                  Where a Member has any period of Vodafone Managers Pensionable
                  Service which is not aggregated in accordance with this
                  sub-Rule with his most recent period of Vodafone Managers
                  Pensionable Service, the benefits payable to and in respect of
                  him in respect of the earlier period or periods are determined
                  in accordance with the Rules relating to early leavers.

         4.4      CHANGE OF SCHEME EMPLOYER

                  Where a Member is employed by one Employer and immediately
                  after the termination of his employment with that Employer he
                  becomes an employee of another Employer, his Vodafone Managers
                  Pensionable Service shall not be treated as having been broken
                  by reason only of such change of employment.

5        MEMBERS IN PART-TIME EMPLOYMENT

         5.1      PURPOSE OF THIS RULE

                  This Rule explains the adjustments required where any Member's
                  Vodafone Managers Pensionable Service includes both full-time
                  and part-time employment or variable part-time employment.

         5.2      INTERPRETATION

                  In this Rule:-

                  (1)      "Full-time Employment" means in respect of any
                           Employer and any period, employment with the Employer
                           which, by reason of the number of hours per week (or
                           month) for which the Member is contracted to work, is
                           treated by the Employer as full-time employment; and

                  (2)      "Part-time Employment" means employment with the
                           Employer which is less than Full-time Employment.

         5.3      MEMBERS TO WHOM THIS RULE APPLIES

                  This Rule applies to any Member where during the Member's
                  Vodafone Managers Pensionable Service:-

                  (a)      the Member has periods both of Full-time Employment
                           and Part-time Employment; or

                  (b)      the Member has periods of Part-time Employment in
                           respect of which there is a difference in the number
                           of hours per week (or month) for which he is
                           contracted to work as a proportion of the number of
                           hours required for Full-time Employment.

                  The Trustees may rely on a statement from the Employer as to
                  the hours per week (or month) for which any Member is or was
                  contracted to work and the number of hours which are or were
                  required for Full-time Employment with the Employer.

                                      144
<PAGE>

         5.4      CONVERSION INTO FULL-TIME EQUIVALENT

                  Where by virtue of sub-Rule 5.3 this Rule applies to any
                  Member, in respect of each period during which the number of
                  hours per week (or month) for which the November is required
                  to work bears the same proportion to the number of hours
                  required for Full-time Employment, his Final Pensionable
                  Earnings and Vodafone Managers Pensionable Service shall be
                  converted into their full-time equivalent and the benefit
                  attributable to each such period shall then be aggregated. For
                  this purpose:-

                  (1)      the Member's Final Pensionable Earnings shall be
                           converted into its full-time equivalent by
                           multiplying it by the fraction FTH/CH; and

                  (2)      the Member's Vodafone Managers Pensionable Service
                           shall be converted into its full time equivalent by
                           multiplying it by the fraction CH/FTH;

                  where:-

                           (a)      "FTH" is the number of hours per week (or
                                    month) required for Full-time Employment at
                                    the end of such period; and

                           (b)      "CH" is the number of hours per week (or
                                    month) for which the Member is contracted to
                                    work at the end of the period in question.

         5.5      TREATMENT OF NOTIONAL PENSIONABLE SERVICE

                  Where any benefit under the Rules is required to be calculated
                  taking into account notional Pensionable Service after a
                  Member's actual Pensionable Service has terminated, it shall
                  be assumed that the number of hours for which the Member was
                  contracted to work and the number of hours required for
                  Full-time Employment in each case as at the date when his
                  Pensionable Service terminated would have continued to apply
                  if he had remained in Pensionable Service.

6        CONSEQUENCES OF TEMPORARY ABSENCE

         6.1      PURPOSE OF THIS RULE

                  This rule determines:-

                  (1)      whether and the extent to which any period during
                           which a Member is temporarily absent from work with
                           his Employer, but remains in Service, is to be
                           included in the Member's Vodafone Managers
                           Pensionable Service;

                  (2)      whether and the extent to which the Member is obliged
                           to pay contributions during or in respect of any such
                           period of temporary absence; and

                                      145
<PAGE>

                  (3)      whether the Members death during any such period of
                           temperary absence is to count as death in Pensionable
                           Service for the purpose determining benefits on death
                           in Pensionable Service under Section 6 of these
                           Rules.

         6.2      MATERNITY ABSENCE: (A) PAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the period of absence is a
                  period of paid maternity absence within the meaning of
                  paragraph 5(3) of Schedule 5 to the Social Security Act 1989
                  or a maternity leave per within the meaning of section 235(1)
                  of the Employment Rights Act 1996 effect of the Member's
                  absence shall be as provided in the following sub-Rule of this
                  Rule.

                  6.2.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to continue in Pensionable Service throughout
                           the period of paid maternity absence or maternity
                           leave period.

                  6.2.2    CONTRIBUTIONS DURING ABSENCE. The Member shall
                           continue to pay contributions in accordance with Rule
                           3 during the period of paid maternity absence
                           calculated by reference to her actual earnings from
                           her Employer instead of by reference to her
                           Pensionable Earnings.

                  6.2.3    PERIOD OF PENSIONABLE SERVICE. The period of paid
                           maternity absence maternity leave period shall be
                           included in the Member's Vodafone Managers
                           Pensionable Service.

                  6.2.4    DEATH DURING ABSENCE. If a Member dies in Service
                           during the period of paid maternity absence or
                           maternity leave period she shall be treated as dying
                           in Pensionable Service for the purpose of Section 6
                           of these Rules. To the extent that the benefits under
                           Section 6 fall to be determined by reference to her
                           earnings during a period which includes a period of
                           paid maternity absence, they shall be determined in
                           accordance with the normal employment requirement
                           within the meaning of paragraph 5(3) of Schedule 5 to
                           the Social Security Act 1989.

         6.3      MATERNITY ABSENCE: (B) UNPAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the periods absence is not a
                  period of paid maternity absence within the meanings paragraph
                  5(3) of Schedule 5 to the Social Security Act 1989 or a
                  maternity leave period within the meaning of section 235(1) of
                  the Employment Rights Act 1996 the effect of the Member's
                  absence shall be as provided in the following sub-Rules of
                  this Rule.

                  6.3.1    CONTINUATION OF MEMBERSHIP. The Member shall be to
                           deemed continue in Pensionable Service throughout the
                           period in question.

                                      146
<PAGE>

                  6.3.2    CONTRIBUTIONS DURING ABSENCE. The Member shall cease
                           to pay contributions in accordance with Rule 3 during
                           the period of absence but may following her return to
                           work pay the contributions calculated by reference to
                           her full Pensionable Salary which she would have paid
                           if this sub-Rule had not applied in such installments
                           and over such period as she may agree with the
                           Trustees.

                  6.3.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           maternity absence to which this sub-Rule 6.3 applies
                           shall be included in the Member's Vodafone Managers
                           Pensionable Service only to the extent that the
                           Member pays contributions in respect of it, by way of
                           arrears of contributions paid following her return to
                           work in accordance with sub-Rule 6.3.2.

                  6.3.4    DEATH DURING ABSENCE. If the Member dies in Service
                           during a period of maternity absence to which this
                           sub-Rule 6.3 applies she shall be treated as dying in
                           Pensionable Service for the purpose of Section 6 of
                           these Rules.

         6.4      OTHER CAUSES OF TEMPORARY ABSENCE

                  If a Member is temporarily absent from work and the Member is
                  not a female Member whose absence comes within sub-Rules 6.2
                  or 6.3, the effect of the Member's absence shall be as
                  provided in the following sub-Rules of this Rule.

                  6.4.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to have left Pensionable Service upon the
                           expiry of the following periods:-

                           (a)      if the absence is due to illness or injury,
                                    30 months from the date when the absence
                                    commences; or

                           (b)      if the absence is for any other reason, 12
                                    months from the date when the absence
                                    commences;

                           or such longer period (if any) as the Trustees and
                           the Principal Employer may agree.

                  6.4.2    CONTRIBUTIONS DURING ABSENCE. For so long as the
                           Member receives salary or pay from his Employer at
                           not less than half the rate of his salary or pay
                           immediately before the absence commenced, he shall
                           continue to pay contributions in accordance with Rule
                           3 during the period of absence calculated by
                           reference to his full Pensionable Earnings. For so
                           long as any Member receives salary or pay from his
                           Employer at less than half the rate of his salary or
                           pay immediately before the absence commenced, he
                           shall cease to pay contributions in accordance with
                           Rule 3 during the period of absence but may following
                           his return to work pay the contributions (calculated
                           by reference to his full Pensionable Earnings) which
                           he would have paid if this sub-Rule had not applied
                           in such instalments and over such period as he may
                           agree with the Trustees.

                                      147
<PAGE>

                  6.4.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           temporary absence shall be included in the Member's
                           Vodafone Managers Pensionable Service only to the
                           extent that the Member pays contributions in respect
                           of it, either during the period of absence or by way
                           of arrears of contributions paid following his return
                           to work in accordance with sub-Rule 6.4.2.

                  6.4.4    DEATH DURING ABSENCE. If a Member dies in Service
                           whilst absent from work and he has not been deemed to
                           have left Pensionable Service in accordance with
                           sub-Rule 6.4.1, he shall be treated as dying in
                           Pensionable Service for the purpose of Section 6 of
                           these Rules.

                                      148
<PAGE>

                     SECTION 4: MEMBERS RETIREMENT BENEFITS

7        MEMBER'S RETIREMENT BENEFITS: GENERAL

         7.1      MEMBERS RETIREMENT BENEFITS

                  On retirement from Pensionable Service:-

                  (1)      a Member is entitled to a pension; and

                  (2)      a Transferred Racal RBS Member is also entitled to a
                           cash sum;

                  calculated and paid in accordance with Rules 8 to 13.

                  If before a Member's Normal Retirement Age his Pensionable
                  Service is terminated by him leaving Service or withdrawing
                  from membership of the Executive Manager and Senior Manager
                  Section whilst remaining in Service, and he does not become
                  entitled to any early retirement pension under Rules 9 to 12;
                  the benefits payable to and in respect of him are determined
                  in accordance with Section 7 of these Rules.

         7.2      OTHER PROVISIONS APPLICABLE TO RETIREMENT PENSIONS

                  A Member's pension payable under Rules 8 to 13:-

                  (1)      shall be reduced in accordance with Rules 14 or 15 if
                           the Member exercises his commutation or surrender
                           options under them;

                  (2)      shall be payable in accordance with Rule 27; and

                  (3)      shall be subject to increases in accordance with Rule
                           28.

         7.3      SUPPLEMENTS TO RETIREMENT PENSIONS

                  Members' retirement pensions under Rules 8 to 13 may be
                  supplemented:-

                  (1)      as a result of the Member having paid additional
                           voluntary contributions in accordance with sub-Rule
                           3.4 or the Former Provisions;

                  (2)      as a result of a transfer payment or transfer
                           payments having been received in respect of the
                           Member under Clause 18 in Schedule 2 to this Deed or
                           under the Former Provisions; or

                  (3)      as a result of the exercise of the augmentation
                           powers contained in Clause 21 in Schedule 2 to this
                           Deed.

                  The extent to which Rules 14 (commutation option), 15
                  (surrender option). 27 (payment of pensions) and 28 (pension
                  increases) apply to any supplement to the Member's retirement
                  pension referred to in sub-Rule 7.3 depends on the terms

                                      149
<PAGE>

                  agreed between the Member and the Trustees in the case of
                  additional voluntary contributions and transfer payments and
                  on the terms specified by the Trustees in the case of
                  augmentations.

         7.4      CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                  The Trustees must ensure:-

                  (1)      that if the Member was in Contracted-out Employment
                           in relation to the Scheme before 6 April 1997, the
                           Member's retirement pension attributable to
                           Pensionable Service prior to 6 April 1997 complies
                           with the GMP Rules; and

                  (2)      that the Member's retirement benefits do not exceed
                           the limits applicable to them under the Revenue
                           Limits Rules.

8        NORMAL RETIREMENT

         8.1      MEMBER'S ENTITLEMENT TO PENSION FROM NORMAL RETIREMENT AGE

                  A Member whose Pensionable Service terminates as a result of
                  his retirement from Service at Normal Retirement Age shall be
                  entitled to a normal retirement pension from the Scheme which
                  shall commence to be payable with effect from the day
                  following his Normal Retirement Age for the remainder of his
                  lifetime and which shall be calculated in accordance with this
                  Rule.

         8.2      INITIAL ANNUAL AMOUNT OF MEMBER'S PENSION

                  The initial annual amount of a Member's pension under sub-Rule
                  8.1 by virtue of his Vodafone Managers Pensionable Service
                  shall be calculated by using the following formula:-

              Final Pensionable Earnings x Vodafone Managers Pensionable Service
                                           -------------------------------------
                                                             50

         8.3      TRANSFERRED PENSIONABLE SERVICE

                  A Member who becomes entitled to a normal retirement pension
                  in accordance with sub-Rule 8.1 and who has Transferred
                  Pensionable Service shall be entitled to additional pension of
                  an initial annual amount calculated by multiplying his Final
                  Pensionable Earnings by the following:-

                  (1)      any period of Vodafone Staff Pensionable Service
                           divided by 60;

                  (2)      any period of Racal EM&SM Pensionable Service before
                           1 April 1986 divided by 60; and

                  (3)      any period of Racal EM&SM Pensionable Service on or
                           after 1 April 1986 divided by 50.

                                      150
<PAGE>

         8.4      TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to a normal retirement pension
                  in accordance with sub-Rule 8.1 and who is a Transferred
                  Racal RBS Member shall also be entitled to a cash sum
                  calculated by using the following formula:-

                         Final Pensionable Earnings x Racal RBS Service
                                                      -----------------
                                                            480

9        EARLY RETIREMENT: (A) GENERALLY

         9.1      CIRCUMSTANCES IN WHICH MEMBER'S PENSION MAY COMMENCE EARLY

                  A Member's retirement pension may commence before his Normal
                  Retirement Age in any of the following circumstances:-

                  (1)      voluntary early retirement under Rule 10;

                  (2)      redundancy early retirement under Rule 11; or

                  (3)      early retirement due to Serious Ill-health under Rule
                           12.

         9.2      PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations, the Trustees must be reasonably satisfied that
                  when any Member's pension becomes payable under Rules 10, 11
                  or 12 before his Normal Pension Age, the total value of the
                  Member's benefits is at least equal in value to the benefits
                  that have accrued to or in respect of him under the Rules (on
                  the basis that the Rules are the "applicable rules" for the
                  purpose of section 94(2) of the Pension Schemes Act).

         9.3      GMP REQUIREMENTS

                  If any Member whose pension commences before Normal Retirement
                  Age under this Rule is entitled to any Guaranteed Minimum
                  Pension, the Trustees shall have power to adjust any pension
                  payable under this rule to such extent as may be necessary to
                  ensure that when the Member attains State Pensionable Age (as
                  defined in the GMP Rules), the Member's pension attributable
                  to Contracted-out Employment prior to 6 April 1997 is not less
                  than the amount required under the GMP Rules.

                                      151
<PAGE>

10       EARLY RETIREMENT. (B) VOLUNTARY

         10.1     WHEN PAYABLE

                  If:-

                  (1)      a Member's Pensionable Service terminates on or after
                           the date when he attains age 50 and

                  (2)      the Principal Employer consents to the immediate
                           commencement of his retirement pension (except that
                           in the case of a Pre-88 Member, such consent shall
                           not be required to the commencement of the pension on
                           or after the Member's 60th birthday);

                  he shall be entitled to an early retirement pension from the
                  Scheme which shall commence to be payable with effect from the
                  day after his Pensionable Service terminates (or such later
                  date as the Trustees shall agree with him) and which shall
                  continue to be payable for the remainder of his lifetime.

         10.2     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rules 10.3 and 10.4, the initial annual amount
                  of a Member' voluntary early retirement pension under sub-Rule
                  10.1 shall be calculated in two stages:-

                  (1)      first, by using the following formula:-

             Final Pensionable Earnings x Vodafone Managers Pensionable Service;
                                          -------------------------------------
                                                          50

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect of the period from the
                           date when the pension becomes payable until the
                           Member's Normal Retirement Age in order to take
                           account of the fact that the pension is likely to be
                           payable for longer than if it were to commence at the
                           Member's Normal Retirement Age. The amount of the
                           reduction factor shall be determined by the Trustees
                           and the Principal Employer after consulting the
                           Actuary.

         10.3     ADJUSTMENT FOR MALE PRE-88 MEMBERS

                  If the Member is a male Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 10.2 shall be determined as
                  follows:-

                  (a)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service before 17 May 1990 shall
                           be reduced in respect of the period from the date it
                           becomes payable until the Member's Normal Retirement
                           Age;

                  (b)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service on or after 17 May 1990
                           but before 1 September 1993 shall be

                                      152
<PAGE>

                           reduced in respect of the period (if any) from the
                           date it becomes payable until the Member's 60th
                           birthday; and

                  (C)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service on or after 1 September
                           1993 shall be reduced in respect of the period from
                           the date it becomes payable until the Member's Normal
                           Retirement Age.

         10.4     ADJUSTMENT FOR FEMALE PRE-88 MEMBERS

                  If the Member is a female Pre-88 Member the reduction under
                  paragraph (2) of sub-Rule 10.2 shall be determined as
                  follows:-

                  (a)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service before 1 September 1993
                           shall be reduced in respect of the period (if any)
                           from the date it becomes payable until the Member's
                           60th birthday; and

                  (b)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service on or after 1 September
                           1993 shall be reduced in respect of the period from
                           the date it becomes payable until the Member's Normal
                           Retirement Age.

         10.5     TRANSFERRED PENSIONABLE SERVICE

                  A Member who becomes entitled to an early retirement pension
                  in accordance with sub-Rule 10.1 and who has Transferred
                  Pensionable Service shall also be entitled to have added at
                  the first stage of the calculation in sub-Rule 10.2(1) the
                  amount calculated in accordance with sub-Rule 8.3 (using the
                  Member's Final-Pensionable Earnings at and Pensionable
                  Service to his Scheme Exit Date). Such amount shall also be
                  subject to deduction in accordance with sub-Rules 10.2(2) to
                  10.4 by treating Transferred Pensionable Service before, at or
                  after the dates in question in the same way as Vodafone
                  Managers Pensionable Service.

         10.6     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an early retirement pension
                  in accordance with sub-Rule 10.1 and who is a Transferred
                  Racal RBS Member shall also be entitled to a cash sum
                  calculated in two stages:-

                  (1)      first by using the following formula:-

                           Final Pensionable Earnings x Racal RBS Service
                                                        -----------------
                                                               480

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect from the date when the
                           cash sum became payable until in the case of a male
                           Member his Normal Retirement Age and in the case of a
                           female member her 60th

                                      153
<PAGE>

                           birthday. The amount of the reduction factor shall be
                           determined by the Trustees arid the Principal
                           Employer after consulting the Actuary.

11       EARLY RETIREMENT: (C) REDUNDANCY

         11.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates on or after the
                  date when he attains age 50 and his Employer certifies to the
                  Trustees that this occurred because his Service terminated by
                  reason of redundancy then, provided that both the Trustee and
                  his Employer consent to the immediate commencement of his
                  retirement pension, he shall be entitled to an early
                  retirement pension from the Scheme which shall commence to be
                  payable with effect from the date after his Pensionable
                  Service terminates (or such later date as his Employer and the
                  Trustees shall agree with him) and which shall continue to be
                  payable for the remainder of his lifetime.

         11.2     INITIAL ANNUAL AMOUNT

                  Subject to sub-Rules 11.3 and 11.4, the initial annual amount
                  of a Member redundancy early retirement pension under sub-Rule
                  11.1 shall be calculated in the same way as a voluntary early
                  retirement pension under sub-Rule 10.2 (plus, in the case of a
                  Member who has Transferred Pensionable Service, any additional
                  pension under sub-Rule 10.5) except that the early retirement
                  reduction factor under sub-Rule 10.2(2) shall be applied only
                  in respect of the period (if any) from the date when the
                  pension becomes payable until the Member's 60th birthday.

         11.3     ADJUSTMENT FOR MALE PRE-88 MEMBERS

                  If the Member is a male Pre-88 Member, and the redundancy
                  early retirement pension commences before the Member's 60th
                  birthday, the early retirement reduction factor shall be
                  applied only as follows:-

                  (a)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service or Transferred
                           Pensionable Service before 17 May 1990 shall be
                           reduced in respect of the period from the date when
                           the pension commences until the Member's 60th
                           birthday;

                  (b)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service or Transferred
                           Pensionable Service on or after 17 May 1990 and
                           before 1 September 1993 shall be reduced in respect
                           of the period (if any from the date when the pension
                           commences until the Member's 5 birthday; and

                  (c)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service or Transferred
                           Pensionable Service on or after 1 September 1993
                           shall be reduced in respect of the period from the
                           date when the pension commences until the Member's
                           60th birthday.

                                      154
<PAGE>

         11.4     ADJUSTMENT FOR FEMALE PRE-88 MEMBERS

                  If the Member is a female Pre-88 Member and the redundancy
                  early retirement pension commences before the Member's 60th
                  birthday, the early retirement reduction factor shall be
                  applied only as follows:-

                  (a)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service or Transferred
                           Pensionable Service before 1 September 1993 shall be
                           reduced in respect of the period (if any) from the
                           date when the pension commences until the Member's
                           55th birthday; and

                  (b)      the part of the pension attributable to Vodafone
                           Managers Pensionable Service or Transferred
                           Pensionable Service on or after 1 September 1993
                           shall be reduced only in respect of the period from
                           the date when the pension commences until the
                           Member's 60th birthday.

         11.5     RELIANCE BY TRUSTEES ON STATEMENTS FROM EMPLOYERS

                  The Trustees may rely on a statement from the Member's
                  Employer that the Member's Pensionable Service has terminated
                  in the circumstances mentioned in sub-Rule 11.1.

         11.6     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an early retirement pension
                  in accordance with sub-Rule 11.1 and who is a Transferred
                  Racal RBS Member shall also be entitled to a cash sum
                  calculated in two stages:-

                  (1)      first by using the following formula:-

                           Final Pensionable Earnings x Racal RBS Service
                                                        -----------------
                                                                480

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect from the date when the
                           cash sum became payable until in the case of a male
                           Member his Normal Retirement Age and in the case of a
                           female member her 60th birthday. The amount of the
                           reduction factor shall be determined by the Trustees
                           and the Principal Employer after consulting the
                           Actuary.

12       EARLY RETIREMENT: (D) SERIOUS ILL-HEALTH

         12.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates because of
                  Serious Ill-health, he may be granted an ill-health early
                  retirement pension from the Scheme subject to and in
                  accordance with the following sub-Rules of this Rule.

                                      155
<PAGE>

     12.2 Procedure

          Before his Pensionable Service terminates the Member must request his
          Employer to support his application to the Trustees for a Serious
          Ill-health Pension to be granted. The Employer may only make such in
          application if it is satisfied that the Member's state of health is
          such as to warrant his retirement from employment with the Employer.

          If any Employer supports an application to the Trustees following a
          request from a Member in accordance with this sub-Rule, the Trustees
          shall decide whether the Member is suffering from Serious Ill-health,
          and notify the Employer and the Member of their decision.

     12.3 Medical evidence before commencement of pension

          For the purpose of sub-Rule 12.2, the Employer and the Trustees shall
          be entitled to such medical evidence (if any) as they may respectively
          require. The Member must operate in providing all such evidence,
          including undergoing any medical examination(s) which the Employer or
          the Trustees may require.

     12.4 Commencement

          A Serious Ill-health early retirement pension shall commence to be
          payable with effect from the day after the Member's Pensionable
          Service terminates (or such later date as the Trustees shall agree
          with him) and which shall, subject to sub-Rules 12.6 and 12.7,
          continue to be payable for the remainder of his lifetime.

     12.5 Initial annual amount

          The initial annual amount of a Member's Serious Ill-health early
          retirement pension shall be the amount of a voluntary early retirement
          pension calculated in accordance with sub-Rule 10.2 (plus, in the case
          of a Member with Transferred Pensionable Service, any additional
          pension under sub-Rule 10.5) or if the Trustees and the Principal
          Employer consider a higher amount to be appropriate in the
          circumstances, such higher amount as the Trustees with the consent of
          the Principal Employer shall decide, but not greater than the amount
          which would have been payable under Rule 8 if he had remained in
          Pensionable Service until his Normal Retirement Age (based on the
          Member's Final Pensionable Earnings at his Scheme Exit Date).

     12.6 Subsequent adjustment

          If.-

          (1)  a Member's pension is a Serious Ill-health early retirement
               pension; and

          (2)  at any time or times between the date when his pension commences
               and his Normal Retirement Age, in the Trustees' opinion (having
               taken such

                                      156
<PAGE>

                           medical evidence as they may require) his state of
                           health improves, or deteriorates

                  the Mernber's entitlement thereafter shall be of such pension
                  (if any) as the Trustees, with the consent of the Principal
                  Employer, decide to be appropriate in the circumstances but so
                  that with effect from the Member's Normal Retirement Age his
                  pension shall be not less than it would have been under Rule
                  23 if on the date of his retirement he had become an early
                  leaver with a preserved pension payable under that Rule but
                  reduced to such extent as the Trustees decide to be
                  appropriate to take account of any part of the Serious
                  Ill-health early retirement pension which the Member commutes
                  for a lump sum.

         12.7     MEDICAL EVIDENCE AFTER COMMENCEMENT OF PENSION

                  A Member shall not be entitled to the continued payment of a
                  Serious Ill-health pension unless after it comes into payment
                  he co-operates in providing all such evidence, including
                  undergoing any medical examination(s) which the Trustees may
                  from time to time require.

         12.8     TRANSFERRED RACAL RBS MEMBERS

                  A Member who becomes entitled to an ill-health early
                  retirement pension in accordance with sub-Rule 12.1 and who is
                  a Transferred Racal RBS Member shall also be entitled to a
                  cash sum calculated by using the following formula:-

                    Final Pensionable Earnings x Racal RBS Service
                                                 -----------------
                                                        480

13       LATE RETIREMENT

         13.1    COMMENCEMENT OF LATE RETIREMENT PENSION

                  If with the consent of his Employer a Member continues in
                  Service after his Normal Retirement Age, the commencement of
                  his pension shall be postponed until he retires from Service
                  except in the following circumstances.

                  (1)      If he is a Pre-87 Limits Member or an 87 Limits
                           Member for the purposes of the Revenue Limits Rules,
                           he may with the prior written consent of the
                           Principal Employer commence to draw his pension with
                           effect from any day after he attains Normal
                           Retirement Age.

                  (2)      If he is an 89 Limits Member for the purposes of the
                           Revenue Limits Rules, he may not commence to draw his
                           pension from the Scheme until his Service terminates
                           except that his pension from the Scheme must come
                           into payment at the latest when he attains age 75.

                                      157
<PAGE>

         13.2     INITIAL ANNUAL AMOUNT OF LATE RETIREMENT PENSION

                  Where the commencement of a Member's pension has been
                  postponed in accordance with sub-Rule 13.1 until after he
                  attains Normal Retirement Age, the initial annual amount of
                  his pension shall be equal to the normal retirement pension
                  which would have been payable to the Member under Rule 8 if
                  the Member had retired on attaining his Normal Retirement Age
                  increased by such late retirement factor as the Trustees
                  having consulted the Actuary consider appropriate having
                  regard to the period of postponement.

         13.3     TRANSFERRED RACAL RBS MEMBERS

                  A Member whose pension is paid in accordance with this Rule 13
                  and who is a Transferred Racal RBS Member shall also be
                  entitled to a cash sum calculated by using the following
                  formula:-

                     Final Pensionable Earnings x Racal RBS Service
                                                  -----------------
                                                         480

                  and adjusting the amount thereby obtained in the same manner
                  as his pension is adjusted in accordance with sub-Rule 13.2.

                                      158
<PAGE>

                   SECTION 5: ALTERNATIVES TO MEMBER'S PENSION

14       COMMUTATION

         14.1     MEMBER'S RIGHT TO COMMUTE

                  A Member who becomes entitled to a pension from the Scheme may
                  elect to commute part of it for a lump sum subject to and in
                  accordance with this Rule.

         14.2     MEMBER'S ELECTION TO COMMUTE

                  A Member's election under sub-Rule 14.1 shall be made by
                  giving to the Trustees such notice within such period as the
                  Trustees may require.

         14.3     MAXIMUM LUMP SUM

                  The maximum lump sum for which a Member may commute part of
                  his pension pursuant to sub-Rule 14.1 shall be:-

                  (1)      the amount determined by multiplying by 2.25 the
                           initial annual amount of the Member's pension from
                           the Scheme: or

                  (2)      such greater amount as the Trustees may agree and
                           which will not exceed Revenue Limits.

         14.4     MEMBER CONTINUING IN SERVICE AFTER NORMAL RETIREMENT AGE

                  A Member who continues in Service after his Normal Retirement
                  Age may not receive a lump sum by way of commutation pursuant
                  to this Rule until he commences to receive his pension from
                  the Scheme unless he is a Pre-87 Limits Member, or an 87
                  Limits Member for the purpose of the Revenue Limits Rules. If
                  the Member is a Pre-87 Limits Member or on 87 Limits Member he
                  may with the prior written consent of the Principal Employer
                  make an election pursuant to sub-Rule 14.1 at any time from
                  his Normal Retirement Age to the date when his late retirement
                  pension commences to be paid.

         14.5     BENEFITS FROM MEMBER'S VOLUNTARY CONTRIBUTIONS

                  If before April 1987 a Member had entered into arrangements
                  for the payment of voluntary contributions under another
                  retirement benefits scheme established by, or to which
                  contributions were paid:-

                  (1)      by, his Employer; or

                  (2)      by an employer in respect of which his Employer is a
                           relevant employer (within the meaning of Regulation 2
                           of the Occupational Pension Schemes (Transitional
                           Provisions) Regulations 1988 (SI 1988 No. 1436));

                                      159
<PAGE>

                  any pension secured by his voluntary contributions to the
                  Scheme may be commuted pursuant to sub-Rule 14.1. Otherwise,
                  such pension may not be so commuted although it may be taken
                  into account in the calculation of the lump sum.

         14.6     EXCEPTIONAL CIRCUMSTANCES OF SERIOUS ILL-HEALTH

                  If a Member is in exceptional circumstances of serious
                  ill-health such that the Trustees are advised by a medical
                  practitioner that the Member's expectation of life is very
                  short (in the sense of being measured in months rather than
                  years) and the Trustees determine that in the circumstances a
                  pension is not a reasonable provision for the Member, the
                  Trustees shall have power to commute the whole of the Member's
                  pension for a lump sum.

         14.7     TRIVIAL PENSIONS

                  Notwithstanding sub-Rule 14.3, if a Member's benefit has
                  become payable or the Scheme is being wound up and that
                  benefit does not exceed the Triviality Limit:-

                  (1)      the Member may make an election pursuant to sub-Rule
                           14.1 in respect of the whole of it; or

                  (2)      the Trustees shall have the power to commute the
                           whole of it for a lump sum if they determine that it
                           would be conducive to the efficient administration of
                           the Scheme to do so.

         14.8     COMMUTATION FACTORS

                  In determining the amount by which the Member's pension is to
                  be reduced in any case of partial commutation the Trustees
                  shall use such commutation factors as, having taken advice
                  from the Actuary, they may from time to time agree with the
                  Principal Employer and adopt for the purposes of this Rule.

                  The amount of the lump sum to be paid in full commutation of
                  (a) the benefits of a Member who is in exceptional
                  circumstances of serious ill-health, or (b) trivial benefits,
                  shall be calculated on a basis agreed by the Trustees and the
                  Principal Employer having been certified as reasonable by the
                  Actuary.

         14.9     GMP REQUIREMENTS

                  If a Member was in Contracted-out Employment before 6 April
                  1997, then insofar as his Scheme pension represents any
                  Guaranteed Minimum Pension it may only be commuted in
                  accordance with the GMP Rules.

                                      160
<PAGE>

15       SURRENDER OPTION

         15.1     TRUSTEES' DISCRETION TO PERMIT SURRENDER

                  With the agreement of the Trustees a Member may elect to
                  surrender part of his pension in return for the provision by
                  the Scheme of a pension or pensions for the Member's spouse
                  and/or such one or more of his Dependents approved by the
                  Trustees as he may nominate payable from the date of the
                  Member's death if, but only if, the Member dies after he
                  commences to receive a pension from the Scheme. Any pension
                  payable as a result of such an election is additional to any
                  pension payable to the spouse or any Dependent Child of the
                  Member pursuant to the Rules concerning benefits payable on
                  the Member's death, and shall be payable for such period as
                  the Member may agree with the Trustees.

         15.2     MEMBER'S ELECTION TO SURRENDER

                  A Member's election under sub-Rule 15.1 shall be made by
                  giving to the Trustees such notice within such period (and
                  with such evidence of good health) as the Trustees may require
                  and must in any event be made before the Member's own pension
                  commences. The person or persons nominated by the Member must
                  be the Member's spouse or a Dependent or Dependents at the
                  date on which the notice is given. The Trustees may in the
                  absence of such evidence of good health, refuse to accept a
                  Member's election.

         15.3     REVENUE AND CONTRACTING-OUT LIMITS ON SURRENDER

                  The surrender of a Member's pension under this Rule is subject
                  to the following restrictions:-

                  (1)      the amount or aggregate amount of any pensions
                           provided for a Member's spouse or Dependent or
                           Dependents by virtue of an election made pursuant to
                           sub-Rule 15.1 shall not exceed the reduced pension
                           payable to the Member following the surrender; and

                  (2)      if the Member is a Contracted-out Member the
                           reduction in the Member's pension attributable to
                           Contracted-out Employment before 6 April 1997
                           resulting from an election made pursuant to sub-Rule
                           15.1 must not be such as to reduce the Member's
                           pension below his Guaranteed Minimum Pension.

         15.4     SURRENDER FACTORS

                  In determining the rate at which a Member's pension may be
                  surrendered pursuant to this Rule in return for the provision
                  by the Scheme of a pension or pensions for the Member's spouse
                  and/or one or more of the Member's Dependents, the Trustees
                  shall use such surrender factors as having taken advice from
                  the Actuary, they shall think fit and the Principal Employer
                  shall approve.

                                      161
<PAGE>

         15.5     EFFECT OF DEATH OF SPOUSE OR NOMINATED DEPENDENT

                  If the Spouse or any Dependent of a Member who is entitled to
                  a pension from the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15 dies before the Member but
                  on or after the date when the Member's own pension has
                  commenced to be paid, the Member's election made pursuant to
                  this Rule shall remain in force and he shall remain entitled
                  only to the part of his pension which he has not surrendered.

                  If the spouse or any Dependent of a Member who is entitled to
                  a pension from the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15 dies before the Member dies
                  and before the date when the Member's pension commences to be
                  paid, the Member's election in respect of such spouse or such
                  Dependent shall be canceled automatically with effect from the
                  spouse's Dependent's death and the Member's entitlement to
                  pension from the Scheme shall be the same as it would have
                  been if in respect of such spouse or Dependant if that
                  election had not been made.

         15.6     REVOCATION OF MEMBER'S ELECTION

                  An election made by a Member pursuant to sub-Rule 15.1 may be
                  revoked:-

                  (1)      by the Member only with the Trustees' consent and
                           only prior to the earlier of his Normal Retirement
                           Age and the commencement of his pension from the
                           Scheme; and

                  (2)      by the Trustees if the Member retires from Service
                           prior to his Normal Retirement Age.

                  In either such case the Member's entitlement to pension from
                  the Scheme shall be the same as it would have been if that
                  election had not been made.

         15.7     FURTHER ELECTION FOLLOWING CANCELLATION OR REVOCATION

                  Following the cancellation or revocation of a Member's
                  election under (as the case may be) sub-Rule 15.5 or 15.6
                  above the Member may, if he so wishes but subject always to
                  sub-Rule 15.2 and the agreement of the Trustees, make a
                  further election in accordance with sub-Rule 15.1

                                      162
<PAGE>

                      SECTION 6: BENEFITS ON MEMBER'S DEATH

16       BENEFITS ON MEMBER'S DEATH: GENERAL

         16.1     CATEGORIES OF BENEFIT PAYABLE

                  If a Member dies, benefits will be provided from the Executive
                  Manager and Senior Manager Section in one or more of the
                  following categories:-

                  (1)      a lump sum;

                  (2)      a spouse's pension;

                  (3)      a Financial Dependent's pension; and

                  (4)      children's pensions.

                  The particular benefits payable on the Member's death depend
                  on whether the Member dies in Pensionable Service (Rule 17),
                  in Service on or after Normal Retirement Age (Rule 18) or
                  after the commencement of his own pension (Rule 19).

                  If a Member dies after his Pensionable Service has terminated
                  but before the commencement of his own pension, the benefits
                  payable on his death are determined in accordance with Section
                  7 of these Rules.

         16.2     PROVISIONS APPLICABLE TO PENSIONS ON MEMBER'S DEATH

                  16.2.1   COMMENCEMENT

                           A spouse's or Dependent Child's pension shall
                           commence on the day which next follows the date of
                           the Member's death.

                  16.2.2   TERMINATION

                           (a)      Spouse's pension. A spouse's pension shall
                                    terminate with the last installment paid
                                    before the spouse dies

                           (b)      Financial Dependent's pension. A Financial
                                    Dependent's pension shall terminate in
                                    accordance with sub-Rule 17.3, 18.3 or 19.4
                                    (as the case may be).

                           (c)      Dependent Child's pension. A Dependent
                                    Child's pension shall terminate with the
                                    last installment paid before the earliest of
                                    the following dates:-

                                    (1)      if the Dependent Child does not
                                             continue in full-time educational
                                             or vocational training after
                                             attaining age 18, when the
                                             Dependent Child attains age 18;

                                      163
<PAGE>

                                    (2)      if the Dependent Child does
                                             continue in full-time educational
                                             or vocational training after
                                             attaining age 18, when the
                                             Dependent Child ceases to be in
                                             full-time educational or vocational
                                             training or attains age 21 if
                                             earlier; or

                                    (3)      the date of the Dependent Child's
                                             death;

                                    except that in the case of a child who is a
                                    Dependent Child as a result of being wholly
                                    or partly financially dependent on the
                                    Member by reason of physical or mental
                                    incapacity, the Dependent Child's pension
                                    shall terminate at such time as the Trustees
                                    shall decide.

                  16.2.3   PENSION INCREASES

                           Pension payable to Member's spouses, Financial
                           Dependants and Dependent Children under these Rules
                           shall be increased in accordance with Rule 28.

                  16.2.4   COMMUTATION

                           A pension payable to a Member's spouse, Financial
                           Dependant or Dependent Child may only be commuted if
                           the pension is Trivial. Such a pension may be
                           commuted when it becomes payable or when the Member's
                           own pension is commuted on grounds of triviality.

                  16.2.5   GMP REQUIREMENTS

                           To the extent that any part of a pension payable to
                           the Member's spouse is a Guaranteed Minimum Pension:-

                           (1)  It is subject to the overriding guarantee set
                                out in the GMP Rules: and

                           (2)  it may only be commuted in accordance with the
                                GMP Rules.

17       DEATH IN A PENSIONABLE SERVICE

         17.1     LUMP SUM BENEFIT

                  If a Member dies in a Pensionable Service before his Normal
                  Retirement Age, there shall be payable in accordance with
                  Clause 22 in Schedule 2 to this Deed a lump sum equal to three
                  times the Member's Pensionable Earnings.

                  The amount payable under the previous paragraph of this
                  sub-Rule upon the death of any Member shall not exceed the
                  amount which the Trustees receive, as a result of the Member's
                  death, under any policy by which the Member's life is for the
                  time being assured; but this paragraph of this sub-Rule shall
                  not limit the amount which the Trustees are entitled to claim
                  from the underwriter or underwriters of the Policy in
                  question.

                                      164
<PAGE>

                  In the case of a Member with Racal EM&SM Pensionable Service,
                  there shall also be payable in accordance with Clause 22 in
                  Schedule 2 to this Deed a lump sum equal to the Member's
                  contributions to the Racal EM&SM Scheme before 1 April 1986,
                  without interest.

         17.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount equal to one half of the
                  pension to which Member would have been entitled under Rule 8
                  if he had remained in the Pensionable Service until his Normal
                  Retirement Age (based on the Member's Final Pensionable
                  Earnings at the date of his death).

         17.3     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age:-

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 17.2 if the Member had been survived by a
                  spouse) for such period and in all other respects on such
                  terms and subject to such conditions as they may in their
                  discretion think fit.

         17.4     CHILDREN'S PENSIONS:-

                  17.4.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDANT

                           If a Member:-

                           (1)     dies in Pensionable Service before Normal
                                   Retirement Age;

                           (2)     is not survived by a spouse;

                           (3)     is not survived by a Financial Dependant to
                                   whom the Trustees decide to award a pension
                                   under sub-Rule 17.3; but

                                      165
<PAGE>

                           (4)     is survived by a Dependent Child or Dependent
                                   Children;

                           there shall be payable to that Dependent Child (or,
                           more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                           (a)     if there is only one Dependent Child, a
                                   pension of an initial annual amount equal to
                                   the amount which would have been payable as a
                                   spouse's pension under sub-Rule 17.2 if the
                                   Member had been survived by a spouse; or

                           (b)     if there is more than one Dependent Child,
                                   pensions of an aggregate initial annual
                                   amount equal to the amount which would have
                                   been payable as a spouse's pension under
                                   sub-Rule 17.2 if the Member had been survived
                                   by a spouse, and such pensions shall be
                                   divided amongst the Dependent Children in
                                   such shares as the Trustees may think fit.

                  17.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDANT

                           if:-

                           (1)     a pension is payable to a Member's spouse
                                   under sub-Rule 17.2 or a Member's Financial
                                   Dependant under sub-Rule 17.3; and

                           (2)     on the death of a Member's spouse or that
                                   Financial Dependant there is any child living
                                   who:-

                                   (i)     was a Dependent Child of the Member
                                           at the date of the Member's death;
                                           and

                                   (ii)    continues to be a Dependent Child at
                                           the date of the spouse's of Financial
                                           Dependant's death;

                           the spouse's of Financial Dependant's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child, the
                           spouse's or Financial Dependant's pension shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may think fit.

                  17.4.3   ADDITIONAL PENSION

                           If a Member:-

                           (1)     dies in Pensionable Service before Normal
                                   Retirement Age; and

                           (2)     is survived by a Dependent Child or Dependent
                                   Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) in
                           addition to any pension or pensions payable under
                           sub-Rules 17.4.1 or 17.4.2, a pension (or pensions)
                           calculated as follows:-

                                      166
<PAGE>

                           (a)     if there is only one Dependent Child, a
                                   pension of an initial annual amount equal to
                                   5 percent of the Member's Pensionable
                                   Earnings; or

                           (b)     if there is more than one Dependent Child,
                                   pensions of an aggregate initial annual
                                   amount equal to 5 percent of the Member's
                                   Pensionable Earnings in respect of each child
                                   (but limited to a maximum of 15 percent) and
                                   which shall be divided amongst the Dependent
                                   Children in such shares as the Trustees may
                                   think fit.

18       DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE

         18.1     LUMP SUM BENEFIT

                  If a Member dies in Service o or after his Normal Retirement
                  Age, there shall be payable in accordance with Clause 22 in
                  Schedule 2 to this Deed a lump sum equal to five times what
                  would have been the initial annual rate of the Member's
                  pension from the Scheme under Rule 13 if he had retired on the
                  day before his death.

         18.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)    dies in Service on or after Normal Retirement Age; and

                  (2)    is survived by a spouse to whom the Member was married
                         at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount calculated using the
                  formula:-

                                   1/2 x Member's Pension

                  where "Member's Pension" is what would have been the initial
                  amount of the Member's pension from the Scheme under Rule 13
                  if he had retired on the day before his death and any exercise
                  by the Member of his options under Rules 14 (commutation) or
                  15 (surrender) were disregarded.

         18.3     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)    dies in Service on or after Normal Retirement Age:-

                  (2)    is not survived by a spouse to whom the Member was
                         married at the date of his death; but

                  (3)    is survived by a Financial Dependant;

                                      167
<PAGE>

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial amount (not
                  exceeding the amount which would have been payable under
                  sub-Rule 18.2 if the Member had been survived by a spouse) for
                  such period and in all other respects on such terms and
                  subject to such conditions as they may in their discretion
                  think fit.

         18.4     CHILDREN'S PENSIONS

                  18.4.1    NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                            DEPENDANT

                   If a Member:-

                   (1)     dies in Service on or after Normal Retirement Age;

                   (2)     is nor survived by a spouse

                   (3)     is not survived by a Financial Dependant to whom the
                           Trustees decide to award a pension under sub-Rule
                           18.3; but

                   (4)     is survived by a Dependent Child or Dependent
                           Children;

                   there shall be payable to that Dependent Child (or, if more
                   than one, those Dependent Children) a pension (or pensions)
                   calculated as follows:-

                   (a)     if there is only one Dependent Child, a pension of an
                           initial annual amount equal to the amount which would
                           have been payable as a spouse's pension under
                           sub-Rule 18.2 if the Member had been survived by a
                           spouse; or

                   (b)     if there is more than one Dependent Child, pensions
                           of an aggregate initial annual amount equal to the
                           amount which would have been payable as a spouse's
                           pension under sub-Rule 18.2 if the Member had been
                           survived by a spouse, and such pensions shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may see fit.

                  18.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDANT

                           If:-

                  (1)      a pension is payable to a Member's spouse under
                           sub-Rule 18.2 or a Member's Financial Dependant under
                           sub-Rule 18.3 and

                  (2)      on the death of the Member's spouse or that Financial
                           Dependant there is any child living who:-

                           (i)     was a Dependent Child of the Member at the
                                   date of the Member's death; and

                                      168
<PAGE>

                           (ii)    continues to be a Dependent Child at the date
                                   of the spouse's or Financial Dependant's
                                   death;

                the spouse's or Financial Dependant's pension shall from then on
                be paid to that Dependent Child. If there is more than one such
                Dependent Child, the spouse's or Financial Dependant's pension
                shall be divided amongst the Dependent Children in such shares
                as the Trustees may think fit.

19       DEATH AFTER RETIREMENT

         19.1    LUMP SUM BENEFIT: (a) 5 YEAR GUARANTEE

                 If a Member dies within the period of five years from and
                 including the date when his pension fro m the Scheme commences
                 to be payable, there shall be payable in accordance with Clause
                 22 in Schedule 2 to this Deed, a lump sum equal to the
                 difference between:-

                 (a)     the aggregate amount of pension which the Member would
                         have received during that five year period if he had
                         survived to the end of the period (calculated on the
                         basis that the annual rate of pension payable at the
                         date of his death would have continued to apply for the
                         remainder of the period); and

                 (b)     the amount of pension actually paid to him before his
                         death.

         19.2    LUMP SUM BENEFIT: (b) CONTINUED LIFE COVER IN SPECIAL CASES

                 Where a Member retires with an immediate early retirement
                 pension:-

                 (1)     Under Rule 11 (redundancy early retirement) where the
                         Member's Pensionable Service commenced before 1 October
                         1991; or

                 (2)     under Rule 12 (early retirement due to Serious
                         Ill-health);

                 and the Member dies on or after the commencement of his early
                 retirement pension but before his Normal Retirement Age, then:-

                 (a)     if his pension is a redundancy early retirement
                         pension, a lump sum equal to three times the Member's
                         Pensionable Earnings shall be payable to his personal
                         representatives; or

                 (b)     if his pension is a Serious Ill-health early retirement
                         pension, a lump sum equal to three times the Member's
                         Pensionable Earnings (or, if he is in receipt of a
                         Serious Ill-Health pension which is less than the
                         maximum permitted under sub-Rule 12, a lump sum of such
                         amount as the Trustees may decide) shall be payable in
                         accordance with Clause 22 in Schedule 2 to this Deed.

                                      169
<PAGE>

         19.3    SPOUSE'S PENSION

                 If a Member:-

                 (1)     dies on or after the date when his pension from the
                         Scheme commences to be payable; and

                 (2)     is survived by a spouse to whom the Member was married
                         at the date of his death;

                 the Member's spouse shall be entitled to a pension from the
                 Scheme of an initial annual amount calculated using the
                 formula:-

                                   1/2 x Member's Pension

                 where Member's Pension" means the amount of the Member's
                 pension from the Scheme at the date of his death or, if the
                 Member had exercised either of his options under Rules 14
                 (commutation) or 15 (surrender), what would have been the
                 amount of the Member's pension from the Scheme at the date of
                 his death if he had not exercised those options.

          19.4   FINANCIAL DEPENDANT'S PENSION

                 If a Member:-

                 (1)     dies on or after the date when his pension from the
                         Scheme commences to be payable; and

                 (2)     is not survived by a spouse to whom the Member was
                         married at the date of his death; but

                 (3)     is survived by a Financial Dependant;

                 the Trustees may if they think fit grant a pension under the
                 Scheme to the Financial Dependant of such initial amount (not
                 exceeding the amount which would have been payable under
                 sub-Rule 19.3 if the Member had been survived by a spouse) for
                 such period and in all other respects on such terms and subject
                 to such conditions as they may in their discretion think fit.

          19.5   CHILDREN'S PENSIONS

                 19.5.1  No prior pension paid to spouse or Financial Dependant

                 If a Member:-

                 (1)     dies on or after the date when his pension from the
                         Scheme commences to be payable;

                 (2)     is not survived by a spouse;

                                      170
<PAGE>

                (3)      is not survived by a Financial Dependant to whom the
                         Trustees decide to award a pension under sub-Rule 19.4;
                         but

                (4)      is survived by a Dependent Child or Dependent Children;

                there shall be payable to that Dependent Child (or, if more than
                one, those Dependent Children) a pension (or pensions)
                calculated as follows:-

                (a)      if there is only one Dependent Child, a pension of an
                         initial annual amount equal to the amount which would
                         have been payable as a spouse's pension under sub-Rule
                         19.3 if the Member had been survived by a spouse; or

                (b)      if there is more than one Dependent Child, pensions of
                         an aggregate initial annual amount equal to the amount
                         which would have been payable as a spouse's pension
                         under sub-Rule 19.3 if the Member had been survived by
                         a spouse, and such pensions shall be divided amongst
                         the Dependent Children in such shares as the Trustees
                         may think fit.

        19.5.2  PRIOR PENSION PAID TO SPOUSE OF FINANCIAL DEPENDANT

                If:-

                (1)      a pension is payable to a Member's spouse under
                         sub-Rule 19.3 or a Member's Financial Dependent under
                         sub-Rule 19.4; and

                (2)      on the death of the Member's spouse or that Financial
                         Dependant there is any child living who:-

                         (i)      was a Dependent Child of the Member at the
                                  date of the Member's death; and

                         (ii)     continues to be a Dependent Child at the date
                                  of the spouse's or Financial dependant's
                                  death;

                the spouse's or Financial Dependant's pension shall from then on
                be paid to that Dependent Child. If there is more than one such
                Dependent Child, the spouse's or Financial Dependant's pension
                shall be divided amongst the Dependent Children in such shares
                as the Trustees may think fit.

                                      171
<PAGE>

          (3)  is not survived by a Financial Dependant to whom the Trustees
               decide to award a pension under sub-Rule 19.4; but

          (4)  is survived by a Dependent Child or Dependent Children;

          there shall be payable to that Dependent Child (or, if more than one,
          those Dependent Children) a pension (or pensions) calculated as
          follows: -

          (a)  if there is only one Dependent Child, a pension of an initial
               annual amount equal to the amount which would have been payable
               as a spouse's pension under sub-Rule 19.3 if the Member had been
               survived by a spouse; or

          (b)  if there is more than one Dependent Child, pensions of an
               aggregate initial annual amount equal to the amount which would
               have been payable as a spouse's pension under sub-Rule 19.3 if
               the Member had been survived by a spouse, and such pensions shall
               be divided amongst the Dependent Children in such shares as the
               Trustees may think fit.

     19.5.2 Prior pension paid to spouse or Financial Dependant

          If.-

          (1)  a pension is payable to a Member's spouse under sub-Rule 19-3 or
               a Member's Financial Dependant under sub-Rule 19.4; and

          (2)  on the death of the Member's spouse or that Financial Dependant
               there is any child living who:-

               (i)  was a Dependent Child of the Member at the date of the
                    Member's death; and

               (ii) continues to be a Dependent Child at the. date of the
                    spouse's or Financial Dependant's death;

          the spouse's or Financial Dependant's pension shall from then on be
          paid to that Dependent Child. If there is more than one such Dependent
          Child, the spouse's or Financial Dependant's pension shall be divided
          amongst the Dependent Children in such shares as the Trustees may
          think fit.

                            SECTION 7: EARLY LEAVERS

20   EARLY LEAVERS: GENERAL

     20.1 Application of this Section to early leavers

          This Section applies where, before a Member attains Normal Retirement
          Age, his Pensionable Service is terminated by him leaving Service or
          withdrawing from membership of the Executive Manager and Senior
          Manager Section whilst remaining in Service, and he does not become
          entitled to an early retirement pension under Rules 9 to 12.

     20.2 Early leavers not qualifying for preserved benefits

          if:-

          (a)  the Member has completed less than two years' Qualifying Service
               when his Pensionable Service terminates; and

          (b)  no transfer payment has been made to the Scheme in respect of his
               rights under a personal pension scheme;

          he is entitled to a refund of contributions in accordance with
          Rule 21.

     20.3 Early leavers who qualify for preserved benefits

          if.-

          (a)  the Member has completed at least two years' Qualifying Service
               when his Pensionable Service terminates; or

          (b)  a transfer payment has been made to the Scheme in respect of his
               rights under a personal pension scheme;

          he is entitled to preserved benefits in accordance with Rule 22.

                                      172
<PAGE>

21   EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS

     21.1 Refund of contributions

          Where, as provided in sub-Rule 20.2, a Member is not entitled to
          preserve benefits under the Scheme, there shall be payable to him, in
          substitution for all other benefits payable to or in respect of him
          under the Scheme, an amount equal to his Member's Contributions less:-

          (1)  such amount as the Trustees are entitled to retain out of the
               refund by virtue of section 61 of the Pension Schemes Act as a
               result of electing to pay a contributions equivalent premium in
               respect of such Member (being so much of the premium as is
               attributable to primary Class I contributions); and

          (2)  such tax as the Trustees may be required to deduct.

     21.2 Transfer option

          A Member to whom sub-Rule 21.1 applies may instead of taking a refund
          of his Member's Contributions elect by giving prior written notice to
          the Trustees to have an amount equal to his Member's Contributions
          paid to another occupational pension scheme or a personal pension
          scheme pursuant to Clause 19 in Schedule 2.

22   EARLY LEAVER ENTITLED TO PRESERVED BENEFITS

     22.1 Entitlement to preserved benefits

          Where, as provided in sub-Rule 20.3, a Member is entitled to preserved
          benefits under the Scheme, the Member is a Deferred Member and the
          benefits payable to and in respect of him from the Scheme upon the
          termination of his Pensionable Service shall be determined in
          accordance with this Rule and Rules 23 to 26.

     22.2 Commutation and/or surrender of preserved pension

          The preserved pension payable to any Deferred Member may be:-

          (1)  commuted for a lump sum, subject to and in accordance with the
               provisions of Rule 14; and/or

          (2)  surrendered in return for the provision by the Scheme of a
               pension or pensions for one or more of his Dependants, subject to
               and in accordance with the provisions of Rule 15.

     22.3 Other provisions applicable to preserved pensions

          Any pension payable under this Rule:-

          (1)  shall be reduced in accordance with Rule 14 or 15 to the extent
               that it is commuted or surrendered under either of those Rules,

          (2)  shall be payable in accordance with Rule 27; and

          (3)  shall, after it commences, be subject to increases in
               accordance with Rule 28.

     22.4 Supplements to preserved pensions

          Deferred Members' preserved pensions under Rules 23 to 25 may be
          supplemented:-

                                      173
<PAGE>

                (1)      as a result of the Member having paid additional
                         voluntary contributions in accordance with sub-Rule 3.4
                         or the Former Provisions;

                (2)      as a result of a transfer payment or transfer payments
                         having been received in respect of the Member under
                         Clause 18 in Schedule 2 to this Deed or under the
                         Former Provisions; or

                (3)      as a result of the exercise of the augmentation powers
                         contained in Clause 21 in Schedule 2 to this Deed.

                The extent to which Rules 14 (commutation option), 15 (surrender
                option), 27 (payment of pensions) and 28 (pension increases)
                apply to any supplement to the Member's retirement pension
                referred to in this sub-Rule 22.4 depends on the terms agreed
                between the Member and the Trustees in the case of additional
                voluntary contributions and transfer payments and on the terms
                specified by the Trustees in the case of augmentations.

        22.5    CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                The Trustees must ensure:-

                (1)      that if the Member was in Contracted-out Employment in
                         relation to the Scheme before 6 April 1997, the
                         Member's retirement pension attributable to Pensionable
                         Service prior to 6 April 1997 complies with the GMP
                         Rules; and

                (2)      that the Member's retirement benefits do not exceed the
                         limits applicable to them under the Revenue Limits
                         Rules.

        22.6    ALTERNATIVE TO PRESERVED BENEFITS

                If a Deferred Member:-

                (1)      has acquired a right under section 94 of the Pension
                         Schemes Act to the cash equivalent of the benefits
                         which have accrued to or in respect of him under the
                         Scheme; and

                (2)      he has not lost that right in accordance with section
                         100 of the Pension Schemes Act;

                he may require the Trustees to use the cash equivalent in one or
                more of the ways specified in section 95 of the Pension Schemes
                Act. In that case the provisions of Part IV of Chapter IV of the
                Pension Schemes Act shall apply generally, including the
                discharge of the Trustees pursuant to section 99 of the Pension
                Schemes Act.

                Except to the extent that a Deferred Member is entitled to
                exercise, and exercises, the option conferred by section 95 of
                the Pension Schemes Act, if he wishes the benefits accrued to
                and in respect of him under the Scheme to be bought out or
                transferred to another retirement benefits scheme or personal
                pension scheme, he
                                      174
<PAGE>

                may request the Trustees to exercise their powers under Clauses
                19 or 20 in Schedule 2 to this Deed.

23       COMMENCEMENT OF PRESERVED BENEFITS AT NRA

         23.1   PAYMENT

                At his Normal Retirement Age a Deferred Member shall be entitled
                to a pension from the Scheme payable for the remainder of his
                lifetime.

         23.2   INITIAL ANNUAL AMOUNT

                The initial annual amount of a Deferred Member's pension at
                Normal Retirement Age under sub-Rule 23.1 shall be determined as
                follows:-

                (1)     by first calculating his preserved pension prior to
                        revaluation by using the following formula:-

                        Final Pensionable Earnings
                                        x VODAFONE MANAGERS PENSIONABLE SERVICE:
                                         --------------------------------------
                                                           50

                (2)      by revaluing the part (if any) of the amount determined
                         pursuant to paragraph (1) of this sub-Rule which
                         exceeds the Member's Guaranteed Minimum Pension in
                         accordance with the GMP Rules; and

                (3)      by revaluing the part of the amount determined pursuant
                         to paragraph (1) of this sub-Rule which exceeds the
                         Member's Guaranteed Minimum Pension in accordance with
                         the provisions of Chapter II of Part IV of the Pension
                         Schemes Act if the benefits payable to and in respect
                         of the Member under the Scheme are required to be
                         revalued under that Chapter.

         23.3   TRANSFERRED PENSIONABLE SERVICE

                A Deferred Member who becomes entitled to a pension at Normal
                Retirement Age in accordance with sub-Rule 23.1 and who has
                Transferred Pensionable Service shall also be entitled to have
                taken into account under paragraph (1) of sub-Rule 23.2 the
                amount calculated in accordance with sub-Rule 8.3 (using the
                Member's Final Pensionable Earnings at and Pensionable Service
                to his Scheme Exit Date). Such amount shall also be subject to
                revaluation in accordance with paragraphs (2) and (3) of
                sub-Rule 23.2.

         23.4   TRANSFERRED RACAL RBS MEMBERS

                A Deferred Member who becomes entitled to a pension at Normal
                Retirement Age in accordance with sub-Rule 23.1 and who is a
                Transferred Racal RBS Member shall also be entitled to a cash
                sum calculated by using the following formula:-

                                      175
<PAGE>

                     Final Pensionable Earnings x Racal RBS Service
                                                  -----------------
                                                        480

24       COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA

         24.1   CONDITIONS FOR EARLY COMMENCEMENT

                A Deferred Member may elect that his pension shall commence from
                a date before his Normal Retirement Age if the following
                conditions are satisfied:-

                (1)      (a) the Deferred Member has attained the age of 50 or
                         (b) in the Trustees' opinion after taking medical
                         advice he has become incapable of following his normal
                         employment by reason of Serious Ill-health; and

                (2)      the Trustees agree to the commencement of his pension
                         from that date (except that in the case of a Pre-88
                         Member, such consent shall not be required to the
                         commencement of the pension on or after the Member's
                         60th birthday).

        24.2    INITIAL ANNUAL AMOUNT

                Subject to sub-Rules 24.3 and 24.4 the initial amount of a
                Deferred Member's pension under sub-Rule 24.1 shall be
                determined as follows:-

                (1)      by calculating the amount referred to in paragraph (1)
                         of sub-Rule 23.2 (plus, in the case of a Member with
                         Transferred Pensionable Service, any additional pension
                         under sub-Rule 23.3) and revaluing such amount in the
                         manner provided for in paragraphs (2) and (3) of
                         sub-Rule 23.2 to the date when the pension is to
                         commence; and

                (2)      by applying an early retirement reduction factor to the
                         amount determined pursuant to paragraph (1) of this
                         sub-Rule in respect of the period from the date when
                         the pension becomes payable until the Member's Normal
                         Retirement Age in order to take account of the fact
                         that the pension is likely to be payable for longer
                         than if it were to commence at the Member's Normal
                         Retirement Age. The amount of the reduction factor
                         shall be determined by the Trustees and the Principal
                         Employer after consulting the Actuary.

         24.3   ADJUSTMENT FOR MALE PRE-88 MEMBERS

                If a Member is a male Pre-88 Member the reduction under
                paragraph (2) of sub-Rule 24.2 shall be determined as follows:-

                (a)      the part of the pension attributable to Vodafone
                         Managers Pensionable Service or Transferred Pensionable
                         Service before 17 May 1990 shall be reduced in respect
                         of the period from the date it becomes payable until
                         the Member's Normal Retirement Age;

                                      176
<PAGE>

                (b)      the part of the pension attributable to Vodafone
                         Managers Pensionable Service or Transferred Pensionable
                         Service on or after 17 May 1990 but before 1 September
                         1993 shall be reduced in respect of the period (if any)
                         from the date it becomes payable until the Member's
                         60th birthday; and

                (c)      the part of the pension attributable to Vodafone
                         Managers Pensionable Service or Transferred Pensionable
                         Service on or after 1 September 1993 shall be reduced
                         in respect of the period from the date it becomes
                         payable until the Member's Normal Retirement Age.

         24.4   ADJUSTMENT FOR FEMALE PRE-88 MEMBER

                If the Member is a female Pre-88 Member the reduction under
                paragraph (2) of sub-Rule 24.2 shall be as follows:-

                (a)      the part of the pension attributable to Vodafone
                         Managers Pensionable Service or Transferred Pensionable
                         Service before1 September 1993 shall be reduced in
                         respect of the period (if any) from the date it becomes
                         payable until the Member's 60th birthday; and

                (b)      the part of the pension attributable to Vodafone
                         Managers Pensionable Service or Transferred Pensionable
                         Service on or after 1 September 1993 shall be reduced
                         in respect of the period from the date it becomes
                         payable until the Member's Normal Retirement Age.

         24.5   TRANSFERRED RACAL RBS MEMBERS

                A Deferred Member whose pension commences before Normal
                Retirement Age in accordance with sub-Rule 24.1 and who is a
                Transferred Racal RBS Member shall also be entitled to a cash
                sum calculated in two stages:-

                (1)      first by using the following formula:-

                               Final Pensionable Earnings x Racal RBS Service
                                                            -----------------
                                                                  480

                (2)      secondly, by applying an early retirement reduction
                         factor to the amount determined at the first stage of
                         the calculation in respect from the date when the cash
                         sum became payable until in the case of a male Member
                         his Normal Retirement Age and in the case of a female
                         Member her 60th birthday. The amount of the reduction
                         factor shall be determined by the Trustees and the
                         Principal Employer after consulting the Actuary.

         24.6   PRESERVATION REQUIREMENTS

                In accordance with Regulation 8(4) of the Preservation
                Regulations the Trustees must be reasonably satisfied that, when
                any Member's benefits become payable under this Rule before his
                Normal Pension Age, the total value of the Member's benefits is
                at least equal in value to the benefits that have accrued to or
                in respect

                                      177
<PAGE>

                of him under the Rules (on the basis that the Rules are the
                "applicable rules" for the purpose of section 94(2) of the
                Pension Schemes Act).

25       COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA

         25.1     CONDITIONS FOR LATE COMMENCEMENT: (a) 89 LIMITS MEMBERS

                  If a Deferred Member:-

                  (1)    is an 89 Limits Member for the purposes of the Revenue
                         Limits Rules;

                  (2)    leaves Service before his Normal Retirement Age; and

                  (3)    continues in employment (other than Service) after his
                         Normal Retirement Age;

           he may, with the consent of the Trustees, elect that the commencement
           of his pension shall be postponed until a date which is after his
           Normal Retirement Age but not later than his 75th birthday.

           25.2   CONDITIONS FOR LATE COMMENCEMENT: (b) OTHER MEMBERS

                  (1)    is a pre-87 Limits Member or an 87 Limits Member for
                         the purposes of the Revenue Limits Rules;

                  (2)    leaves Service before his Normal Retirement Age; and

                  (3)    continues in employment (other than Service) after his
                         Normal Retirement Age;

                  he may with the consent of the Trustees, elect that the
                  commencement of his pension shall be postponed until his
                  employment terminates or his 70th birthday if earlier.

           25.3   INITIAL ANNUAL AMOUNT

                  Where the commencement of a Deferred Member's pension has been
                  postponed in accordance with sub-Rules 25.1 and 25.2, the
                  initial annual amount of his pension shall be determined as
                  follows:-

                  (1)    by calculating his preserved pension at Normal
                         Retirement Age in accordance with sub-Rule 23.2 (plus,
                         in the case of a Member with Transferred Pensionable
                         Service, any additional pension under sub-Rule 23.3);
                         and

                  (2)    by increasing the amount determined pursuant to
                         paragraph (1) of this sub-Rule by such late retirement
                         factor as the Trustees having consulted the Actuary
                         consider appropriate having regard to the period of
                         postponement.

                                      178
<PAGE>

           25.4   TRANSFERRED RACAL RBS MEMBERS

                  A Member whose pension is paid in accordance with this Rule 25
                  and who is a Transferred RBS Racal Member shall also be
                  entitled to a cash sum calculated by using the following
                  formula:-

                            Final Pensionable Earnings x   Racal RBS Service
                                                           -----------------
                                                                  480

                  and adjusting the amount thereby obtained in the same manner
                  as his pension is adjusted in accordance with sub-Rule
                  25.3(2).

           25.5   PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations the Trustees must be reasonably satisfied that,
                  when any Member's pension becomes payable under this Rule
                  after his Normal Pension Age, the total value of the Member's
                  benefits is at least equal in value to the benefits that have
                  accrued to or in respect of him under the Rules (on the basis
                  that the Rules are the "applicable rules" for the purpose of
                  section 94(2) of the Pension Schemes Act).

26       BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS

         26.1     LUMP SUM ON DEATH OF DEFERRED MEMBER WHILST BENEFITS PRESERVED

                  If a Deferred Member dies before his preserved pension
                  commences to be paid, there shall be payable from the Scheme
                  to the Member's estate a lump sum equal to the Member's
                  Contributions.

         26.2     SPOUSE'S PENSION ON DEATH OF DEFERRED MEMBER WHILST BENEFITS
                  PRESERVED

                  If a Deferred Member:-

                  (1)    dies before his preserved pension commences to be paid;
                         and

                  (2)    is survived by a spouse to whom the Member was married
                         at the date of his death;

           the Member's spouse shall be entitled to a pension from the
           Scheme of an initial annual amount, determined as follows:-

                  (1)    by first calculating the amount found by using the
                         formula:-

                         Final Pensionable Earnings

                                    x VODAFONE MANAGERS PENSIONABLE SERVICE:
                                    ---------------------------------------
                                                    160

                  (2)    by then revaluing the part of the amount found under
                         paragraph (1) of this sub-Rule which is attributable to
                         the Member's Pensionable Service on or after 6 April
                         1997 in accordance with section 84 of the Pension
                         Schemes

                                      179
<PAGE>

                         Act as though it were a benefit of the kind mentioned
                         in section 83(1)(a) of the Pension Schemes Act.

         26.3     MEMBERS WITH TRANSFERRED PENSIONABLE SERVICE

                  In the case of the spouse of a Member with Transferred
                  Pensionable Service, the Member's spouse to whom a pension is
                  payable under sub-Rule 26.2 shall be entitled to additional
                  pension of an initial annual amount determined as follows:-

                  (1)    by first calculating the amount found by using the
                         formula:-

                          Final Pensionable Earnings

                                            x Transferred Pensionable Service:
                                              -------------------------------
                                                           160

                  (2)    by then revaluing the part of the amount found under
                         paragraph (1) of this sub-Rule which is attributable to
                         the Member's Pensionable Service on or after 6 April
                         1997 in accordance with section 84 of the Pension
                         Schemes Act as though it were a benefit of the kind
                         mentioned in section 83(1)(a) of the Pension Schemes
                         Act.

         26.4     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies before his preserved pension commences to be
                           paid;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 26.2 (and sub-Rule 26.3 if applicable) if the
                  Member had been survived by a spouse) for such period and in
                  all other respects on such terms and subject to such
                  conditions as they may in their discretion think fit.

         26.5     BENEFITS ON DEATH OF DEFERRED MEMBER AFTER PENSION COMMENCES

                  If a Deferred Member dies on or after the date when his
                  pension from the Scheme commences to be payable, benefits
                  shall be payable in respect of him in accordance with Rule 19.

         26.6     OTHER PROVISIONS APPLICABLE TO SURVIVORS' PENSIONS

                  The provisions of Rule 16 shall apply to the pensions payable
                  to the spouses and Financial Dependants of deceased Deferred
                  Members under this Rule.

                                      180
<PAGE>

           SECTION 8: PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES

27       PAYMENT OF PENSIONS

         27.1     PAYMENT ARRANGEMENTS

                  Subject to sub-Rule 27.2, all pensions payable from the Scheme
                  shall be pad in advance by monthly instalments on such working
                  day in the month as the Trustees may from time to time decide
                  except that the first instalment of any pension may be paid in
                  arrears as soon as is reasonably practicable after the pension
                  commences.

         27.2     POWER TO CHANGE PAYMENT ARRANGEMENT

                  The Trustees shall have power with the Principal Employer's
                  consent to alter the date on which and/or intervals at which
                  pensions are paid from the Scheme (including power to make
                  alterations which result in pensions being payable otherwise
                  than in advance) and when doing so to make such arrangements
                  for apportionment in respect of the commencement and
                  termination of pensions and such transitional arrangements in
                  respect of any such alternation in each case as they may
                  consider necessary of desirable.

         27.3     OVERPAYMENT OF PENSIONS

                  If any instalment of any pension is paid after the person
                  entitled to it has died, such instalment (or all of them if
                  more than one) shall be repayable to the Trustees by the
                  recipient or his personal representatives (as the case may
                  be).

28    PENSION INCREASES

         28.1     GUARANTEED MINIMUM PENSIONS

                  Insofar as any pension payable from the Scheme and
                  attributable to Pensionable Service before 6 April 1997 is a
                  Guaranteed Minimum Pension, it shall be increased to the
                  extent required by the GMP Rules.

         28.2     OTHER PENSIONS

                  Insofar as any pension payable from the Scheme is attributable
                  to Pensionable Service before 6 April 1997 and is not a
                  Guaranteed Minimum Pension, or is attributable to Pensionable
                  Service on or after 6 April 1997, its annual rate shall be
                  increased with effect from 1 April each year by the lesser
                  of:-

                  (1)      the percentage increase in the RPI during the year
                           ended on the preceding 30 September: and

                  (2)      five per cent;

                                      181
<PAGE>

                  but so that its annual increase, in respect of Members who
                  were in Pesnionable Service on 1 September 1993, shall be not
                  less than 4 per cent.

         28.3     FIRST ANNUAL INCREASE

                  On the 1 April which first follows the date on which any
                  pension commences to be paid, the increase under sub-Rule 28.2
                  shall be 1/12th of the percentage increase provided for in
                  that sub-Rule multiplied by the number of complete months in
                  the period from the date on which the pension commences to the
                  following 31 March.

                                      182
<PAGE>

                        VODAFONE GROUP PENSION SCHEME

                       SECOND DEFINITIVE DEED AND RULES

                     SCHEDULE 5: DIRECTORS SECTION RULES

SECTION 1: INTRODUCTION: ELIGIBILITY AND MEMBERSHIP.........................189

1        INTRODUCTION.......................................................189
         1.1        Interpretation..........................................189
         1.2        Defined Terms...........................................189
         1.3        Application.............................................190
         1.4        Transfer to another Section.............................190

2        ELIGIBILITY AND MEMBERSHIP.........................................190
         2.1        Eligibility conditions..................................190
         2.2        Evidence as to fulfillment of conditions................190
         2.3        Admission of new Employees to membership when first
                    eligible................................................191
         2.4        Medical and other evidence..............................191
         2.5        Discretionary admission to membership...................191
         2.6        Effect of admission to membership.......................191
         2.7        Opting out..............................................191
         2.8        Re-joining the Scheme after opting out..................191
         2.9        Effect of providing incomplete or inaccurate
                    information.............................................192

SECTION 2: MEMBERS' CONTRIBUTIONS...........................................193

3        MEMBERS CONTRIBUTIONS..............................................193
         3.1        Compulsory contributions................................193
         3.2        Voluntary contributions.................................193
         3.3        Notice to be given by Members concerning voluntary
                    contributions...........................................193
         3.4        Benefits in respect of voluntary contributions..........193
         3.5        Repayment of surplus voluntary contributions............194
         3.6        Deduction of contributions from salary or pay...........194
         3.7        Termination of Member's contributions...................194
         3.8        Member's contributions during temporary absence.........194

SECTION 3:  PENSIONABLE SERVICE AND TEMPORARY ABSENCE.......................195

4        CALCULATION OF VODAFONE DIRECTORS PENSIONABLE SERVICE..............195
         4.1        Purpose of this Rule....................................195
         4.2        Vodafone Directors Pensionable Service..................195
         4.3        More than one period of Vodafone Directors
                    Pensionable Service.....................................195
         4.4        Chance of Scheme Employer...............................196

5        MEMBER IN PART-TIME EMPLOYMENT.....................................196
         5.1        Purpose of this Rule....................................196
         5.2        Interpretation..........................................196
         5.3        Members to whom this Rule applies.......................196

                                      183
<PAGE>

         5.4        Conversion into full-time equivalent....................197
         5.5        Treatment of notional Pensionable Service...............197

6        CONSEQUENCES OF TEMPORARY ABSENCE..................................197
         6.1        Purpose of this Rule....................................197
         6.2        Maternity Absence: (a) paid.............................198
         6.3        Maternity Absence (b) unpaid............................198
         6.4        Other causes of temporary absence.......................199

SECTION 4:  MEMBER'S RETIREMENT BENEFITS....................................201

7        MEMBER'S RETIREMENT BENEFITS: GENERAL..............................201
         7.1        Member's retirement benefits............................201
         7.2        Other provisions applicable to retirement pensions......201
         7.3        Supplements to retirement pensions......................201
         7.4        Contracting-out and Inland Revenue requirements.........202
         7.5        Revenue Limits:  alternative calculations
                    disregarding retained benefits..........................202

8        NORMAL RETIREMENT..................................................202
         8.1        Member's entitlement to pension from Normal
                    Retirement Age..........................................202
         8.2        Initial annual amount of pension: (a) Pre
                    September 93 Directors..................................202
         8.3        Initial annual amount of pension: (b) Post
                    September 93 Directors..................................203

9        EARLY RETIREMENT:  (A) GENERALLY...................................204
         9.1        Circumstances in which Member's pension may commence
                    early...................................................204
         9.2        Preservation requirements...............................204
         9.3        GMP requirements........................................204

10       EARLY RETIREMENT:  (B) VOLUNTARY...................................204
         10.1       When payable............................................204
         10.2       Initial annual amount: (a) Pre September 93
                    Directors...............................................205
         10.3       Initial annual amount: (b) Post September 93
                    Directors...............................................206

11       EARLY RETIREMENT: (C) REDUNDANCY...................................207
         11.1       When payable............................................207
         11.2       Initial annual amount...................................207
         11.3       Reliance by Trustees on statements from Employers.......207

12       EARLY RETIREMENT:  (D) SERIOUS ILL-HEALTH..........................207
         12.1       When payable............................................207
         12.2       Procedure...............................................207
         12.3       Medical evidence before commencement of pension.........208
         12.4       Commencement............................................208
         12.5       Initial annual amount...................................208
         12.6       Subsequent adjustment...................................208
         12.7       Medical evidence after commencement of pension..........209

13       LATE RETIREMENT....................................................209
         13.1       Commencement of late retirement pension.................209
         13.2       Initial annual amount of late retirement pension........209

                                      184
<PAGE>

SECTION 5:  ALTERNATIVES TO MEMBER'S PENSION................................210

14       COMMUTATION........................................................210
         14.1       Member's right to commute...............................210
         14.2       Member's election to commute............................210
         14.3       Maximum lump sum........................................210
         14.4       Member continuing in Service after Normal
                    Retirement Age..........................................210
         14.5       Benefits from Member's voluntary contributions..........210
         14.6       Exceptional circumstances of serious ill-health.........211
         14.7       Trivial pensions........................................211
         14.8       Commutation factors.....................................211
         14.9       GMP requirements........................................211

15       SURRENDER OPTION...................................................212
         15.1       Trustees' discretion to permit surrender................212
         15.2       Member's elections to surrender.........................212
         15.3       Revenue and contracting-out limits on surrender.........212
         15.4       Surrender factors.......................................212
         15.5       Effect of death of spouse or nominated Dependant........213
         15.6       Revocation of Member's election.........................213
         15.7       Further election following cancellation or
                    revocation..............................................213

SECTION 6:  BENEFITS ON MEMBER'S DEATH......................................214

16       BENEFITS ON MEMBER'S DEATH:  GENERAL...............................214
         16.1       Categories of benefit payable...........................214
         16.2       Provisions applicable to pensions on Member's death.....214

17       DEATH IN PENSIONABLE SERVICE.......................................215
         17.1       Lump sum benefit........................................215
         17.2       Spouse's pension........................................215
         17.3       Financial Dependant's pension...........................216
         17.4       Children's pension......................................216

18       DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE.................218
         18.1       Lump sum benefit........................................218
         18.2       Spouse's pension........................................218
         18.3       Financial Dependant's pension...........................218
         18.4       Children's pension......................................219

19       DEATH AFTER RETIREMENT.............................................220
         19.1       Lump sum benefit:  (a) 5 year guarantee.................220
         19.2       Lump sum benefit:  (b) continued life cover in
                    special cases...........................................220
         19.3       Spouse's pension........................................220
         19.4       Financial Dependant's pension...........................221
         19.5       Children's pensions.....................................221

                                      185
<PAGE>

SECTIONS 7:  EARLY LEAVERS..................................................223

20       EARLY LEAVERS:  GENERAL............................................223
         20.1       Requirements for entitlement to preserved benefits......223
         20.2       Early leavers not qualifying for preserved benefits.....223
         20.3       Early leavers who qualify for preserved benefits........223

21       EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS....................223
         21.1       Refund of Contributions.................................223
         21.2       Transfer Option.........................................224

22       EARLY LEAVER ENTITLED TO PRESERVED BENEFITS........................224
         22.1       Entitlement to preserved benefits.......................224
         22.2       Commutation and/or surrender of preserved pension.......224
         22.3       Other provisions applicable to preserved pensions.......224
         22.4       Supplements to preserved pensions.......................224
         22.5       Contracting-out and Inland Revenue requirements.........224
         22.6       Revenue Limits:  alternative calculations disregarding
                    retained benefits.......................................225
         22.7       Alternatives to preserved benefits......................226

23       COMMENCEMENT OF PRESERVED BENEFITS AT NRA..........................226
         23.1       Payment.................................................226
         23.2       Initial annual amount:  (a) Pre September 93
                    Directors...............................................226
         23.3       Initial annual amount:  (b) Post September 93
                    Directors...............................................227

24       COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA......................228
         24.1       Conditions for early commencement.......................228
         24.2       Initial annual amount...................................228
         24.3       Preservations requirements..............................228

25       COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA.......................229
         25.1       Conditions for late commencement:  (a) 89 Limits
                    Members.................................................229
         25.2       Conditions for late commencement:  (b) other Members....229
         25.3       Initial annual amount...................................229
         25.4       Preservation requirements...............................230

26       BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS..........230
         26.1       Lump sum on death of Deferred Member whilst benefits
                    preserved...............................................230
         26.2       Spouse's pension on death of Deferred Member whilst
                    benefits preserved......................................230
         26.3       Members with Transferred Pensionable Service............230
         26.4       Financial Dependant's pension...........................231
         26.5       Benefits on death of Deferred Member after pension
                    commences...............................................231
         26.6       Other provisions applicable to survivors' pensions......231

SECTION 8:  PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES...................232

27       PAYMENT OF PENSIONS................................................232
         27.1       Payment of arrangements.................................232
         27.2       Power to change payment arrangements....................232
         27.3       Overpayment of pensions.................................232

                                      186
<PAGE>

28       PENSION INCREASES..................................................232
         28.1       Guaranteed Minimum Pensions.............................232
         28.2       Other Pensions..........................................232
         28.3       First annual increase...................................232

                                      187
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      188
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                     SECOND DEFINITIVE TRUST DEED AND RULES

                       SCHEDULE 5: DIRECTORS SECTION RULES

               SECTION 1: INTRODUCTION; ELIGIBILITY AND MEMBERSHIP

1        INTRODUCTION

         1.1      INTERPRETATION

                  These Rules shall be interpreted in accordance with Schedule 1
                  to this Deed.

                  Any reference in this Schedule to a numbered Rule is to one of
                  these Rules unless the reference is to a rule in one of the
                  other Schedules.

                  Any reference in this Schedule to a Member is to a Member to
                  whom this Schedule applies, as stated in sub-Rule 1.3.

         1.2      DEFINED TERMS

                  In these Rules the following words and expressions have the
                  following meanings respectively:-

                  "NORMAL RETIREMENT AGE" means the date of the Member's 60th
                  birthday;

                  "POST SEPTEMBER 93 DIRECTOR" means any Member of this Section
                  who is not a Pre September 93 Director;

                  "PRE SEPTEMBER 93 DIRECTOR" means any Member of this Section
                  who was a member of Vodafone Directors Scheme immediately
                  before the Revision Date and joined the Vodafone Directors
                  Scheme before 1 September 1993;

                  "RACAL DIRECTORS PENSIONABLE SERVICE" means, in relation to
                  any Member, any period of pensionable service under the Racal
                  Directors Scheme which he has been notified by the Trustees
                  counts towards his benefits under the Directors Section of
                  this Scheme;

                  "TRANSFERRED PENSIONABLE SERVICE" means Racal Directors
                  Pensionable Service, Vodafone Managers Pensionable Service or
                  Vodafone Staff Pensionable Service;

                  "VODAFONE DIRECTORS PENSIONABLE SERVICE" means the total of
                  the periods referred to in sub-Rule 4.2;

                  "VODAFONE MANAGERS PENSIONABLE SERVICE" means, in relation to
                  any Member, any period of pensionable service under the
                  Vodafone EM&SM Scheme or the Executive Manager and Senior
                  Manager Section of this Scheme which he has been

                                      189
<PAGE>

                  notified by the Trustees counts toward his benefits under the
                  Directors Section of this Scheme;

                  "VODAFONE STAFF PENSIONABLE SERVICE" means, in relation to any
                  Member, any period of Pensionable Service under this Scheme
                  before the Revision Date and/or pensionable service under the
                  Staff Section of this Scheme on or after the Revision Date
                  which he has been notified by the Trustees counts toward his
                  benefits under the Executive Manager and Senior Manager
                  Section of this Scheme.

         1.3      APPLICATION

                  These Rules apply:-

                  (1)      to all Members who are in Pensionable Service on the
                           Revision Date and immediately before the Revision
                           Date were in pensionable service under the Vodafone
                           Directors Scheme; and

                  (2)      to all Members who become Members of the Directors
                           Section on or after that date in accordance with Rule
                           2.

         1.4      TRANSFER TO ANOTHER SECTION

                  When any Member of this Section becomes a Member of another
                  Section of the Scheme, he shall cease to be entitled to
                  benefits under this Section.

2        ELIGIBILITY AND MEMBERSHIP

         2.1      ELIGIBILITY CONDITIONS

                  An Employee is eligible to become a Member is he fulfils the
                  following eligibility conditions unless he is informed by the
                  Principal Employer that he is not eligible to become a
                  Member-:

                  (1)      he is employed by one or more of the Employers as an
                           executive director; and

                  (2)      he is aged 21 years or over but under 60 years.

                  An Employee is not eligible to become a Member if and for so
                  long as he pays contributions to a personal pension scheme
                  approved or for which approval is being sought under Chapter
                  IV of Part XIV of the Taxes Act.

         2.2      EVIDENCE AS TO FULFILMENT OF CONDITIONS

                  The Trustees may rely on a statement from an Employer as to
                  the fulfilment of conditions in sub-Rule 2.1 in respect of any
                  Employee.

                                      190
<PAGE>

         2.3      ADMISSION OF NEW EMPLOYEES TO MEMBERSHIP WHEN FIRST ELIGIBLE

                  An Employee shall be admitted to membership of the Directors
                  Section with effect from the first date on which he satisfies
                  all the eligibility conditions set out in sub-Rule 2.1 subject
                  to the Trustees' powers under sub-Rule 2.4 and (having regard
                  to section 160 of the Pension Schemes Act) with the right
                  under sub-Rule 2.7 to opt out if he does not wish to be or
                  remain a Member.

         2.4      MEDICAL AND OTHER EVIDENCE

                  Before being admitted to membership of the Directors Section
                  an Employee shall produce such evidence of health, age and
                  such other matters (if any) as the Trustees may require.

                  If when required to do so pursuant to this sub-Rule an
                  Employee fails to produce evidence of good health to the
                  satisfaction of the Trustees, the Trustees may decline to
                  admit him to membership or they may offer him membership on
                  such special terms (including as to modified or partial
                  benefits) as the Trustees with the consent of the Principal
                  Employer shall decide.

         2.5      DISCRETIONARY ADMISSION TO MEMBERSHIP

                  An Employee who would not otherwise be eligible for membership
                  of the Directors Section may be admitted to membership of the
                  Directors Section with the consent of the Principal Employer
                  and the Trustees and on such terms and at such time as may be
                  agreed between the Trustees and the Principal Employer.

         2.6      EFFECT OF ADMISSION TO MEMBERSHIP

                  Upon being admitted to membership of the Directors Section an
                  Employee becomes a Member and is bound by the Trust Deeds.

         2.7      OPTING OUT

                  A Member may at any time withdraw from active membership of
                  the Directors Section by giving to his Employer for recording
                  and transmission to the Trustees not less than one month's
                  notice to that effect ending on the last day of any month on
                  such form as the Trustees may prescribe for that purpose, or
                  such lesser period of notice (if any) as the Trustees and the
                  Employer may agree to accept. Upon the expiration of such
                  notice the Member concerned shall be treated for the purposes
                  of the Scheme as having terminated his Pensionable Service. If
                  the Member gives such notice before paying any contributions
                  to the Scheme, he shall be treated as if he had never become a
                  Member.

         2.8      RE-JOINING THE SCHEME AFTER OPTING OUT

                  A Member who withdraws from active membership of the Directors
                  Section pursuant to sub-Rule 2.7 may, at the discretion of the
                  Trustees and with the consent of the Principal Employer, be
                  re-admitted to membership of the Directors

                                      191
<PAGE>

                  Section provided he then fulfils the eligibility conditions
                  mentioned in sub-Rule 2.1 and satisfies the requirements of
                  sub-Rule 2.4. Such re-admission shall be for such benefits and
                  subject to such conditions as the Trustees and the Principal
                  Employer shall decide.

         2.9      EFFECT OF PROVIDING INCOMPLETE OR INACCURATE INFORMATION

                  Without prejudice to sub-Rule 2.4, if when required to do so
                  any Employee or Member fails to provide the Trustees with
                  information or provides them with information which is
                  incomplete or inaccurate, the Trustees may with the consent of
                  the Principal Employer modify the benefits payable to or in
                  respect of the Member under the Scheme to such extent as they
                  may consider appropriate in the circumstances.

                                      192
<PAGE>

                        SECTION 2: MEMBERS' CONTRIBUTIONS

3        MEMBERS' CONTRIBUTION

         3.1      COMPULSORY CONTRIBUTIONS

                  In each Scheme Year each Member shall pay contributions to the
                  Scheme in equal instalments at the same time as he receives
                  pay from his Employer at the rate of 3.5% of his Pensionable
                  Earnings (or, in the case of a Member who in an 89 Limits
                  Member for the purposes of the Revenue Limits Rules, the
                  Permitted Maximum (as defined in the Revenue Limits Rules), if
                  less).

         3.2      VOLUNTARY CONTRIBUTIONS

                  A Member may pay voluntary contributions to the Scheme of such
                  amounts or at such rates (subject to the limits on Member's
                  contributions mentioned in the Revenue Limits Rules) and at
                  such intervals as he may agree with the Trustees. The assets
                  representing such voluntary contributions and the income from
                  them and any additions to them shall be held by the Trustee
                  separate from all the other assets of the Fund.

         3.3      NOTICE TO BE GIVEN BY MEMBERS CONCERNING VOLUNTARY
                  CONTRIBUTIONS

                  A Member must give the Trustees such notice as the Trustees
                  may require (not exceeding the maximum period of notice
                  allowed by Regulation 2(4) of the Pension Schemes (Voluntary
                  Contributions Requirements and Voluntary and Compulsory
                  Membership) Regulations 1987 (SI 1987 No. 1108)) of his
                  intention to pay voluntary contributions at a specified rate
                  or of a specified amount, or to vary the rate or amount.

         3.4      BENEFITS IN RESPECT OF VOLUNTARY CONTRIBUTIONS

                  The Trustees shall secure:-

                  (1)      that any voluntary contributions paid by a Member are
                           used to provide such benefits for or in respect of
                           him under the Scheme as the Trustees and the Member
                           may agree or, in the absence of agreement, as the
                           Trustees may decide and that such benefits:-

                           (a)      shall be additional to the benefits provided
                                    for or in respect of him under the following
                                    Rules: and

                           (b)      shall be money purchase benefits within the
                                    meaning of section 181 of the Pension
                                    Schemes Act; and

                  (2)      that the value of the additional benefits is
                           reasonable having regard to the amount of the
                           voluntary contributions.

                                      193
<PAGE>

         3.5      REPAYMENT OF SURPLUS VOLUNTARY CONTRIBUTIONS

                  This sub-Rule applies if a Member pays voluntary contributions
                  under this Rule and on his Scheme Exit Date the benefits which
                  have accrued to him are found to exceed the maximum total
                  benefits which may be provided by the Scheme to or in respect
                  of him under Revenue Limits.

                  (1)      To the extent that the excessive benefits have been
                           secured by the Member's voluntary contributions the
                           amount of the Scheme assets which secure the
                           excessive benefits and consist of or relate to those
                           contributions shall be determined by the Trustees
                           (for which purpose they may rely on the advice of the
                           Actuary).

                  (2)      The Trustees shall then pay that amount to the Member
                           (or, if the Member has died, to the Member's estate)
                           after deducting such tax as they may be required to
                           deduct and account for to the Inland Revenue.

                  (3)      The Trustees shall also comply with the requirements
                           of Regulation 5 of the Retirement Benefit Schemes
                           (Restriction on Discretion to Approve) (Additional
                           Voluntary Contributions) Regulations 1993 (SI 1993
                           No. 3016), and, where the Scheme is the "leading
                           scheme" in relation to the Member, with the
                           requirements or Regulation 6 of those Regulations so
                           far as they concern main schemes.

         3.6      DEDUCTION OF CONTRIBUTIONS FROM SALARY OR PAY

                  Each Member's Employer shall deduct from the Member's salary
                  or pay the amounts payable by the Member to the Scheme as
                  compulsory and voluntary contributions and pay them to the
                  Trustees promptly and in any event so as to comply with
                  section 49(8) of the Pensions Act and regulations made under
                  it (being at the date of this Deed regulation 16 of the
                  Administration Regulations which requires the payment to the
                  Trustees to be made within 19 days commencing from the end of
                  the month in which the amount is deducted from the Member's
                  earnings).

         3.7      TERMINATION OF MEMBER'S CONTRIBUTIONS

                  Unless a Member's Employer determines otherwise and notifies
                  the Member accordingly, but subject always to such Inland
                  Revenue consent as may from time to time be required, no
                  contributions shall be payable or may be paid by a Member
                  after his Normal Retirement Age or the date when his
                  Pensionable Service terminates, if earlier.

         3.8      MEMBER'S CONTRIBUTIONS DURING TEMPORARY ABSENCE

                  Where a Member is temporarily absent from work with his
                  Employer, the payment of his contributions under this Rule is
                  governed by Rule 6.

                                      194
<PAGE>

              SECTION 3: PENSIONABLE SERVICE AND TEMPORARY SERVICE

4        CALCULATION OF VODAFONE DIRECTORS PENSIONABLE SERVICE

         4.1      PURPOSE OF THIS RULE

                  Most of the benefits payable to or in respect of a Member
                  under the Directors Section are determined by reference to the
                  Member's Vodafone Directors Pensionable Service. This Rule
                  explains how a Member's Vodafone Directors Pensionable Service
                  is calculated.

         4.2      VODAFONE DIRECTORS PENSIONABLE SERVICE

                  Subject to sub-Rule 4.3, a Member's Vodafone Directors
                  Pensionable Service for the purpose of calculating the
                  benefits payable to and in respect of him under the Directors
                  Section is the total of the following periods (which shall be
                  expressed in complete years with complete months which are not
                  part of a complete year being expressed as a fraction of a
                  year):-

                  (1)      the period during which he was in Pensionable Service
                           under the Directors Section; and

                  (2)      if he was in pensionable service under the Vodafone
                           Directors Scheme immediately before the Revision
                           Date, the period during which he was in pensionable
                           service under the Vodafone Directors Scheme ending on
                           the day before the Revision Date.

                  There shall be deducted any part of such period or periods
                  which does not count as Pensionable Service due to temporary
                  absence from work as provided in Rule 6 or the applicable
                  temporary absence rule prevailing at the time when the absence
                  occurred.

         4.3      MORE THAN ONE PERIOD OF VODAFONE DIRECTORS PENSIONABLE SERVICE

                  If a Member who has been in Pensionable Service leaves Service
                  or withdraws from active membership of the Directors Section
                  and subsequently rejoins the Directors Section, each of the
                  periods of Vodafone Directors Pensionable Service shall count
                  as a separate period of Vodafone Directors Pensionable Service
                  unless:-

                  (a)      the Trustees with the consent of the Principal
                           Employer agree to aggregate them; or

                  (b)      the Member is a female Member who is absent from work
                           wholly or partly because of pregnancy or confinement
                           and the periods of Pensionable Service separated by
                           the period of maternity absence are required to be
                           treated as continuous by Part VIII of the Employment
                           Rights Act 1996.

                                       195
<PAGE>

                  Where a Member has any period of Vodafone Directors
                  Pensionable Service which is not aggregated in accordance with
                  this sub-Rule with his most recent period of Vodafone
                  Directors Pensionable Service, the benefits payable to and in
                  respect of him in respect of the earlier period or periods are
                  determined in accordance with the Rules relating to early
                  leavers.

         4.4      CHANGE OF SCHEME EMPLOYER

                  Where a Member is employed by one Employer and immediately
                  after the termination of his employment with that Employer he
                  becomes an employee of another Employee, his Vodafone
                  Directors Pensionable Service shall not be treated as having
                  been broken by reason only of such change of employment.

5.       MEMBERS IN PART-TIME EMPLOYMENT

         5.1      PURPOSE OF THIS RULE

                  This Rule explains the adjustments required where any Member's
                  Vodafone Directors Pensionable Service includes both full-time
                  and part-time employment or variable part-time employment.

         5.2      INTERPRETATION

                  In this Rule:-

                  (1)      "FULL-TIME EMPLOYMENT" means in respect of any
                           Employer and any period, employment with the Employer
                           which, by reason of the number of hours per week (or
                           month) for which the Member is contracted to work, is
                           treated by the Employer as full-time employment; and

                  (2)      "PART-TIME EMPLOYEMENT" means employment with the
                           Employer which is less than Full-time Employment.

         5.3      MEMBERS TO WHOM THIS RULE APPLIES

                  This Rule applies to any Member where during the Member's
                  Vodafone Directors Pensionable Service:-

                  (a)      the Member has periods both of Full-time Employment
                           and Part-time Employment; or

                  (b)      the Member has periods of Part-time Employment in
                           respect of which there is a difference in the number
                           of hours per week (or month) for which he is
                           contracted to work as a proportion of the number of
                           hours required for Full-time Employment.

                  The Trustees may rely on a statement from the Employer as to
                  the hours per week (or month) for which any Member is or was
                  contracted to work and the number of hours which are or were
                  required for Full-time Employment with the Employer.

                                      196
<PAGE>

         5.4      CONVERSION INTO FULL-TIME EQUIVALENT

                  Where by virtue of sub-Rule 5.3 this Rule applies to any
                  Member, in respect of each period during which the number of
                  hours per week (or month) for which the Member is required to
                  work bears the same proportion to the number of hours required
                  for Full-time Employment, his Final Pensionable Earnings and
                  Vodafone Directors Pensionable Service shall be converted into
                  their full-time equivalent and the benefit attributable to
                  each such period shall then be aggregated. For this purpose:-

                  (1)      the Member's Final Pensionable Earnings shall be
                           converted into its full-time equivalent by
                           multiplying it by the fraction FTH/CH; and

                  (2)      the Member's Vodafone Directors Pensionable Service
                           shall be converted into its full time equivalent by
                           multiplying it by the fraction CH/FTH;

                  where:-

                           (a)      "FTH" is the number of hours per week (or
                                    month) required for Full-time Employment at
                                    the end of such period; and

                           (b)      "CH" is the number of hours per week (or
                                    month) for which the Member is contracted to
                                    work at the end of the period in question.

         5.5      TREATMENT OF NOTIONAL PENSIONABLE SERVICE

                  Where any benefit under the Rules is required to be calculated
                  taking into account notional Pensionable Service after a
                  Member's actual Pensionable Service has terminated, it shall
                  be assumed that the number of hours for which the Member was
                  contracted to work and the number of hours required for
                  Full-time Employment in each case as at the date when his
                  Pensionable Service terminated would have continued to apply
                  if he had remained in Pensionable Service.

6        CONSEQUENCES OF TEMPORARY ABSENCE

         6.1      PURPOSE OF THIS RULE

                  This Rule determines:-

                  (1)      whether and the extent to which any period during
                           which a Member is temporarily absent from work with
                           his Employer, but remains in Service, is to be
                           included in the Member's Vodafone Directors
                           Pensionable Service;

                  (2)      whether and the extent to which the Member is obliged
                           to pay contributions during or in respect of any such
                           period of temporary absence; and

                                      197
<PAGE>

                  (3)      whether the Member's death during any such period of
                           temporary absence is to count as death in Pensionable
                           Service for the purpose of determining benefits on
                           death in Pensionable Service under Section 6 of these
                           Rules.

         6.2      MATERNITY ABSENCE: (a) PAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the period of absence is a
                  period of paid maternity absence within the meaning of
                  paragraph 5(3) of Schedule 5 to the Social Security Act 1989
                  or a maternity leave period within the meaning of section
                  235(1) of the Employment Rights Act 1996 the effect of the
                  Member's absence shall be as provided in the following
                  sub-Rules of this Rule.

                  6.2.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to continue in Pensionable Service throughout
                           the period of paid maternity absence or maternity
                           leave period.

                  6.2.2    CONTRIBUTIONS DURING ABSENCE. The Member shall
                           continue to pay contributions in accordance with Rule
                           3 during the period of paid maternity absence
                           calculated by reference to her actual earnings from
                           her Employer instead of by reference to her
                           Pensionable Earnings.

                  6.2.3    PERIOD OF PENSIONABLE SERVICE. The period of paid
                           maternity absence or maternity leave period shall be
                           included in the Member's Vodafone Directors
                           Pensionable Service.

                  6.2.4    DEATH DURING ABSENCE. If a member dies in Service
                           during the period of paid maternity absence or
                           maternity leave period she shall be treated as dying
                           in Pensionable Service for the purpose of Section 6
                           of these Rules. To the extent that the benefits under
                           Section 6 fail to be determined by reference to her
                           earnings during a period which included a period of
                           paid maternity absence, they shall be determined in
                           accordance with the normal employment requirement
                           within the meaning of paragraph 5(3) of Schedule 5 to
                           the Social Security Act 1989.

         6.3      MATERNITY ABSENCE: (b) UNPAID

                  If a female Member is absent from work wholly or partly
                  because of pregnancy or confinement whilst remaining in
                  Service, then to the extent that the period of absence is not
                  a period of paid maternity absence within the meaning of
                  paragraph 5(3) of Schedule 5 to the Social Security Act 1989
                  or a maternity leave period within the meaning of section
                  234(1) of the Employment Rights Act 1996 the effect of the
                  Member's absence shall be as provided in the following
                  sub-Rules of this Rule.

                  6.3.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to continue in Pensionable Service throughout
                           the period in question.

                                      198
<PAGE>

                  6.3.2    CONTRIBUTIONS DURING ABSENCE. The Member shall cease
                           to pay contributions in accordance with Rule 3 during
                           the period of absence but may following her return to
                           work pay the contributions calculated by reference to
                           her full Pensionable Salary which she would have paid
                           if this sub-Rule had not applied in such instalments
                           and over such period as she may agree with the
                           Trustees.

                  6.3.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           maternity absence to which this sub-Rule 6.3 applies
                           shall be included in the Member's Vodafone Directors
                           Pensionable Service only to the extent that the
                           Member pays contributions in respect of it, by way of
                           arrears of contributions paid following her return to
                           work in accordance with sub-Rule 6.3.2.

                  6.3.4    DEATH DURING ABSENCE. If the Member dies in Service
                           during a period of maternity absence to which this
                           sub-Rule 6.3 applies she shall be treated as dying in
                           Pensionable Service for the purpose of Section 6 of
                           these Rules.

         6.4      OTHER CAUSES OF TEMPORARY ABSENCE

                  If a Member is temporarily absent from work and the Member is
                  not a female Member whose absence comes within sub-Rules 6.2
                  or 6.3, the effect of the Member's absence shall be as
                  provided in the following sub-Rules of this Rule.

                  6.4.1    CONTINUATION OF MEMBERSHIP. The Member shall be
                           deemed to have left Pensionable Service upon the
                           expiry of the following periods:-

                           (a)      if the absence is due to illness or injury,
                                    30 months from the date when the absence
                                    commences; or

                           (b)      if the absence is for any other reason, 12
                                    months from the date when the absence
                                    commences;

                           or such longer period (if any) as the Trustees and
                           the Principal Employer may agree.

                  6.4.2    CONTRIBUTIONS DURING ABSENCE. For so long as the
                           Member receives salary or pay from his Employer at
                           not less than half the rate of his salary or pay
                           immediately before the absence commenced, he shall
                           continue to pay contributions in accordance with Rule
                           3 during the period or absence calculated by
                           reference to his full Pensionable Earnings. For so
                           long as any Member receives salary or pay from his
                           Employer at less than hlf the rate of his salary or
                           pay immediately before the absence commenced, he
                           shall cease to pay contributions in accordance with
                           Rule 3 during the period of absence but may following
                           his return to work pay the contributions (calculated
                           by reference to his full Pensionable Earnings) which
                           he would have paid if this sub-Rule had not applied
                           in such instalments and over such period as he may
                           agree with the Trustees.

                                      199
<PAGE>

                  6.4.3    PERIOD OF PENSIONABLE SERVICE. Any period of
                           temporary absence shall be included in the Member's
                           Vodafone Directors Pensionable Service only to the
                           extent that the Member pays contributions in respect
                           of it, either during the period of absence or by way
                           of arrears of contributions paid following his return
                           to work in accordance with sub-Rule 6.4.2.

                  6.4.4    DEATH DURING ABSENCE. If a Member dies in Service
                           whilst absent from work and he has not been deemed to
                           have left Pensionable Service in accordance with
                           sub-Rule 6.4.1, he shall be treated as dying in
                           Pensionable Service for the purpose of Section 6 of
                           these Rules.

                                      200
<PAGE>

                     SECTION 4: MEMBER'S RETIREMENT BENEFITS

7        MEMBER'S RETIREMENT BENEFITS: GENERAL

         7.1      MEMBER'S RETIREMENT BENEFITS

                  On retirement from Pensionable Service a Member is entitled to
                  a pension calculated and paid in accordance with Rules 8 to
                  13.

                  If before a Member's Normal Retirement Age his Pensionable
                  Service is terminated by him leaving Service or withdrawing
                  from membership of the Directors Section whilst remaining in
                  Service, and he does not become entitled to any early
                  retirement pension under Rules 9 to 12, the benefits payable
                  to and in respect of him are determined in accordance with
                  Section 7 of these Rules.

         7.2      OTHER PROVISIONS APPLICABLE TO RETIREMENT PENSIONS

                  A Member's pension payable under Rules 8 to 13:-

                  (1)      shall be reduced in accordance with Rules 14 or 15 if
                           the Member exercises his commutation or surrender
                           options under them;

                  (2)      shall be payable in accordance with Rule 27; and

                  (3)      shall be subject to increases in accordance with Rule
                           28.

         7.3      SUPPLEMENTS TO RETIREMENT PENSIONS

                  Members' retirement pensions under Rules 8 to 13 may be
                  supplemented:-

                  (1)      as a result of the Member having paid additional
                           voluntary contributions in accordance with sub-Rule
                           3.4 or the Former Provisions;

                  (2)      as a result of a transfer payment or transfer
                           payments having been received in respect of the
                           Member under Clause 18 in Schedule 2 to this Deed or
                           under the Former Provisions; or

                  (3)      as a result of the exercise of the augmentation
                           powers contained in Clause 21 in Schedule 2 to this
                           Deed.

                  The extent to which Rules 14 (commutation option), 15
                  (surrender option), 27 (payment of pensions) and 28 (pension
                  increases) apply to any supplement to the Member's retirement
                  pension referred to in sub-Rule 7.3 depends on the terms
                  agreed between the Member and the Trustees in the case of
                  additional voluntary contributions and transfer payments and
                  on the terms specified by the Trustees in the case of
                  augmentations.

                                      201
<PAGE>

         7.4      CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                  The Trustees must ensure:-

                  (1)      that if the Member was in Contracted-out Employment
                           in relation to the Scheme before 6 April 1997, the
                           Member's retirement pension attributable to
                           Pensionable Service prior to 6 April 1997 complies
                           with the GMP Rules; and

                  (2)      that the Member's retirement benefits do not exceed
                           the limits applicable to them under the Revenue
                           Limits Rules.

         7.5      REVENUE LIMITS: ALTERNATIVE CALCULATION DISREGARDING RETAINED
                  BENEFITS

                  If having regard to the treatment of retained benefits for the
                  purpose of applying Revenue Limits to any Member's pension,
                  the amount calculated using the formula:-

                           Final Pension Earnings x (VDPS + TPS)
                                                    ------------
                                                         60

                  where:-

                           "VDPS" is the Member's Vodafone Directors Pensionable
                           Service; and

                           "TPS" is his Transferred Pensionable Service (if
                           any);

                  would exceed the amounts calculated in accordance with the
                  formulae set out in the Rules in this Section 4, then the
                  amount calculated using the formula above shall be substituted
                  for the amount calculated in accordance with the formulae set
                  out in the Rules in this Section 4 and, in cases of early
                  retirement, then reduced in accordance with whichever of
                  sub-Rules 10.2(2) or 10.3(2) is applicable to him.

8        NORMAL RETIREMENT

         8.1      MEMBER'S ENTITLEMENT TO PENSION FROM NORMAL RETIREMENT AGE

                  A member whose Pensionable Service terminates as a result of
                  his retirement from Service at Normal Retirement Age shall be
                  entitled to a normal retirement pension from the Scheme which
                  shall commence to be payable with effect from the day
                  following his Normal Retirement Age for the remainder of his
                  lifetime and which shall be calculated in accordance with this
                  Rule.

         8.2      INITIAL ANNUAL AMOUNT OF PENSION: (a) PRE SEPTEMBER 93
                  DIRECTORS

                  In the case of a Pre September 93 Director, the initial annual
                  amount of the Member's pension under sub-Rule 8.1 shall be
                  calculated as follows:-

                                      202
<PAGE>

                  (1)      if the aggregate of his Vodafone Directors
                           Pensionable Service and Transferred Pensionable
                           Service (if any) does not exceed 20 years, by using
                           the following formula:-

                                    Final Pensionable Earnings x (VDPS + TPS)
                                                                 ------------
                                                                      30
                           where:-

                                    "VDPS" is his Vodafone Directors Pensionable
                                    Service; and

                                    "TPS" is his Transferred Pensionable
                                    Service; or

                  (2)      if the aggregate of his Vodafone Directors
                           Pensionable Service and his Transferred Pensionable
                           Service (if any) exceeds 20 years, by using the
                           following formula

                                    Final Pensionable Earnings x 2
                                                                 -
                                                                 3

         8.3      INITIAL ANNUAL AMOUNT OF PENSION: (b) POST SEPTEMBER 93
                  DIRECTORS

                  In the case of a Post September 93 Director, the initial
                  annual amount of a Member's pension under sub-Rule 8.1 by
                  virtue of his Vodafone Directors Pensionable Service and his
                  benefits in respect of Vodafone EM&SM Pensionable Service or
                  Vodafone Staff Pensionable Service shall be calculated as
                  follows:-

                  (1)      if he has no Transferred Pensionable Service, it
                           shall be calculated by taking his Final Pensionable
                           Earnings and multiplying them by the following:-

                                     VODAFONE DIRECTORS PENSIONABLE SERVICE
                                     --------------------------------------
                                                VDPS Denominator

                  (2)      if he has Transferred Pensionable Service, it shall
                           be calculated by taking his Final Pensionable
                           Earnings and multiplying them by the aggregate of the
                           following:-

                           (a)      Vodafone Staff Pensionable Service
                                    ----------------------------------
                                                     60

                           (b)      Vodafone Managers Pensionable Service
                                    -------------------------------------
                                                     50

                           (c)      Vodafone Directors Pensionable Service
                                    --------------------------------------
                                               VDPS Denominator

                  For the purpose of this sub-Rule the "VDPS DENOMINATOR" is 30
                  except that if the amount calculated pursuant to paragraph
                  (1), or the aggregate amount calculated pursuant to paragraph
                  (2), would then exceed two-thirds of the

                                      203
<PAGE>

                  Member's Final Pensionable Earnings, it shall be such higher
                  figure as shall be required to ensure that the amount so
                  calculated is equal to two-thirds of the Member's Final
                  Pensionable Earnings.

9        EARLY RETIREMENT: (A) GENERALLY

         9.1      CIRCUMSTANCES IN WHICH MEMBER'S PENSION MAY COMMENCE EARLY

                  A Member's retirement pension may commence before his Normal
                  Retirement Age in any of the following circumstances:-

                  (1)      voluntary early retirement under Rule 10;

                  (2)      redundancy early retirement under Rule 11; or

                  (3)      early retirement due to Serious Ill-health under Rule
                           12.

         9.2      PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations, the Trustees must be reasonably satisfied that
                  when any Member's pension becomes payable under Rules 10, 11
                  or 12 before his Normal Pension Age, the total value of the
                  Member's benefits is at least equal in value to the benefits
                  that have accrued to or in respect of him under the Rules (on
                  the basis that the Rules are the "applicable rules" for the
                  purpose of section 94(2) of the Pension Schemes Act).

         9.3      GMP REQUIREMENTS

                  If any Member whose pension commences before Normal Retirement
                  Age under this Rule is entitled to any Guaranteed Minimum
                  Pension, the Trustees shall have power to adjust any pension
                  payable under this rule to such extent as may be necessary to
                  ensure that when the Member attains State Pensionable Age (as
                  defined in the GMP Rules), the Member's pension attributable
                  Contracted-out Employment prior to 6 April 1997 is not less
                  than the amount required under the GMP Rules.

10       EARLY RETIREMENT: (B) VOLUNTARY

         10.1     WHEN PAYABLE

                  If:-

                  (1)      a Member's Pensionable Service terminates on or after
                           the date when he attains age 50 and

                  (2)      the Principal Employer consents to the immediate
                           commencement of his retirement pension (but such
                           consent shall not be required if the Member has
                           attained the age of 55);

                                      204
<PAGE>

                  he shall be entitled to an early retirement pension from the
                  Scheme which shall commence to be payable with effect from the
                  day after his Pensionable Service terminates (or such later
                  date as the Trustees shall agree with him) and which shall
                  continue to be payable for the remainder of his lifetime.

         10.2     INITIAL ANNUAL AMOUNT: (a) PRE SEPTEMBER 93 DIRECTORS

                  In the case of a Pre September 93 Director, the initial annual
                  amount of the Member's voluntary early retirement pension
                  under sub-Rule 10.1 shall be calculated in two stages:-

                  (1)      (a)      if by remaining in Pensionable Service until
                                    Normal Retirement Age the Member's normal
                                    retirement pension would have been
                                    calculated under sub-Rule 8.2(1), by first
                                    [illegible] amount payable in accordance
                                    with the formula [illegible} Rule but using
                                    his Final Pensionable Earnings at and
                                    Pensionable Service to his Scheme Exit date;
                                    or

                           (b)      if by remaining in Pensionable Service until
                                    Normal Retirement Age the Member's normal
                                    retirement position would have been
                                    calculated under sub-Rule 8.2(2), by first
                                    calculating the amount found by the
                                    following formula:-

                                             Final Pensionable Earnings
                                             [illegible]

                                    where:-

                                    "N"   =  the Member's Vodafone Directors
                                             Pensionable Service (or, in the
                                             case of a Member with Transferred
                                             Pensionable Service, the aggregate
                                             of his Vodafone Directors
                                             Pensionable Service and his
                                             Transferred Pensionable Service);
                                             and

                                    "NS"  =  what would have been the Member's
                                             Vodafone Directors Pensionable
                                             Service (or, in the case of a
                                             Member with Transferred Pensionable
                                             Service, the aggregate of his
                                             Vodafone Directors Pensionable
                                             Service and his Transferred
                                             Pensionable Service) if he had
                                             remained in Pensionable Service
                                             until his Normal Retirement Age (or
                                             40 year if less);

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect of the period (if any)
                           from the date when the pension becomes payable until
                           the date when the Member attains the age of 55 in
                           order to take account of the fact that the pension is
                           likely to be payable for longer than if it were to
                           commence at the Member's Normal Retirement Age. The
                           amount of the reduction factor shall be determined by
                           the Trustees and the Principal Employer after
                           consulting the Actuary.

                                      205
<PAGE>

         10.3     INITIAL ANNUAL AMOUNT: (b) POST SEPTEMBER 93 DIRECTORS

                  In the case of a Post September 93 Director the initial annual
                  amount of the Member's voluntary early retirement pension
                  under sub-Rule 10.1 shall be calculated in two stages:-

                  (1)      (a)      if by remaining in Pensionable Service until
                                    Normal Retirement Age (and taking into
                                    account any Transferred Pensionable Service)
                                    the Member's normal retirement pension
                                    calculated under sub-Rule 8.3 would have
                                    been less than two-thirds of his Final
                                    Pensionable Earnings, by first calculating
                                    the amount payable in accordance with the
                                    formula in sub-Rule 8.3(1), or, if he has
                                    Transferred Pensionable Service, sub-Rule
                                    8.3(2) but:-

                                    (i)      using his Final Pensionable
                                             Earnings at and Pensionable Service
                                             to his Scheme Exit Date; and

                                    (ii)     in respect of his Vodafone
                                             Directors Pensionable Service,
                                             using a VDPS Denominator of 30
                                             (being the same VDPS Denominator
                                             as would have been used if he had
                                             remained in Pensionable Service
                                             until Normal Retirement Age); or

                           (b)      if by remaining in Pensionable Service until
                                    Normal Retirement Age (and taking into
                                    account any Transferred Pensionable Service)
                                    the Member's normal retirement position
                                    calculated under sub-Rule 8.3 would have
                                    been equal to two-thirds of his Final
                                    Pensionable Earnings, by first calculating
                                    the amount found by the following formula:-

                                             Final Pensionable Earnings x 2 x N
                                                                          -   --
                                                                          3   NS

                                    where:-

                                    "N"   =  the Member's Vodafone Directors
                                             Pensionable Service (or, in the
                                             case of a Member with Transferred
                                             Pensionable Service, the aggregate
                                             of his Vodafone Directors
                                             Pensionable Service and his
                                             Transferred Pensionable Service);
                                             and

                                    "NS"  =  what would have been the Member's
                                             Vodafone Directors Pensionable
                                             Service (or, in the case of a
                                             Member with Transferred Pensionable
                                             Service, the aggregate of his
                                             Vodafone Directors Pensionable
                                             Service and his Transferred
                                             Pensionable Service) if he had
                                             remained in Pensionable Service
                                             until his Normal Retirement Age (or
                                             40 years if less);

                  (2)      secondly, by applying an early retirement reduction
                           factor to the amount determined at the first stage of
                           the calculation in respect of the period (if any)
                           from the date when the pension becomes payable until
                           the date when

                                      206
<PAGE>

                           the Member attains the age of 55 in order to take
                           account of the fact that the pension is likely to be
                           payable for longer than if it were to commence at the
                           Member's Normal Retirement Age. The amount of the
                           reduction factor shall be determined by the Trustees
                           and the Principal Employer after consulting the
                           Actuary.

11       EARLY RETIREMENT: (C) REDUNDANCY

         11.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates on or after the
                  date when he attains age 50 and his Employer certifies to the
                  Trustees that this occurred because his Service terminated by
                  reason of redundancy then, provided that both the Trustees and
                  his Employer consent to the immediate commencement of his
                  retirement pension, he shall be entitled to an early
                  retirement pension from the Scheme which shall commence to be
                  payable with effect from the date after his Pensionable
                  Service terminates (or such later date as his Employer and the
                  Trustees shall agree with him) and which shall continue to be
                  payable for the remainder of his lifetime.

         11.2     INITIAL ANNUAL AMOUNT

                  The initial annual amount of a Member's redundancy early
                  retirement pension under sub-Rule 11.1 shall be calculated in
                  the same way as a voluntary early retirement pension under
                  whichever of sub-Rule 10.2 or 10.3 applies to him except that
                  no early retirement reduction factor shall be applied under
                  sub-Rule 10.2(2) or 10.3(2)(whichever applies to him).

         11.3     RELIANCE BY TRUSTEES ON STATEMENTS FROM EMPLOYERS

                  The Trustees may rely on a statement from the Member's
                  Employer that the Member's Pensionable Service has terminated
                  in the circumstances mentioned in sub-Rule 11.1.

12       EARLY RETIREMENT: (D) SERIOUS ILL-HEALTH

         12.1     WHEN PAYABLE

                  If a Member's Pensionable Service terminates because of
                  Serious Ill-health, he may be granted an ill-health early
                  retirement pension from the Scheme subject to and in
                  accordance with the following sub-Rules of this Rule.

         12.2     PROCEDURE

                  Before his Pensionable Service terminates the Member must
                  request his Employer to support his application to the
                  Trustees for a Serious Ill-health pension to be granted. The
                  Employer may only make such an application if it is satisfied
                  that the Member's state of health is such as to warrant his
                  retirement from employment with the Employer.

                                      207
<PAGE>

                  If any Employer supports an application to the Trustees
                  following a request from a Member in accordance with this
                  sub-Rule, the Trustees shall decide whether the Member is
                  suffering from Serious Ill-health, and notify the Employer and
                  the Member of their decision.

         12.3     MEDICAL EVIDENCE BEFORE COMMENCEMENT OF PENSION

                  For the purpose of sub-Rule 12.2, the Employer and the
                  Trustees shall be entitled to such medical evidence (if any)
                  as they may respectively require. The Member must co-operate
                  in providing all such evidence, including undergoing any
                  medical examination(s) which the Employer or the Trustees may
                  require.

         12.4     COMMENCEMENT

                  A Serious Ill-health early retirement pension shall commence
                  to be payable with effect from the day after the Member's
                  Pensionable Service terminates (or such later date as the
                  Trustees shall agree with him) and which shall, subject to
                  sub-Rules 12.6 and 12.7, continue to be payable for the
                  remainder of his lifetime.

         12.5     INITIAL ANNUAL AMOUNT

                  The initial annual amount of a Member's Serious Ill-health
                  early retirement pension shall be the amount of a voluntary
                  early retirement pension calculated in accordance with
                  whichever of sub-Rules 10.2 or 10.3 applies to him or if the
                  Trustees and the Principal Employer consider a higher amount
                  to be appropriate in the circumstances, such higher amount as
                  the Trustees with the consent of the Principal Employer shall
                  decide, but not greater than the amount which would have been
                  payable under Rule 8 if he had remained in Pensionable Service
                  until his Normal Retirement Age (based on the Member's Final
                  Pensionable Earnings at his Scheme Exit Date).

         12.6     SUBSEQUENT ADJUSTMENT

                  If:-

                  (1)      a Member's pension is a Serious Ill-health early
                           retirement pension; and

                  (2)      at any time or times between the date when his
                           pension commences and his Normal Retirement Age, in
                           the Trustees' opinion (having taken such medical
                           evidence as they may require) his state of health
                           improves, or deteriorates;

                  the Member's entitlement thereafter shall be of such pension
                  (if any) as the Trustees, with the consent of the Principal
                  Employer, decide to be appropriate in the circumstances, but
                  so that with effect from the Member's Normal Retirement Age
                  his pension shall be not less than it would have been under
                  Rule 23 if on the date of his retirement he had become an
                  early leaver with a preserved pension payable under that Rule
                  but reduced to such extent as the Trustees decide to be
                  appropriate to take account of any part of the Serious
                  Ill-health early retirement pension which the Member commuted
                  for a lump sum.

                                      208
<PAGE>

         12.7     MEDICAL EVIDENCE AFTER COMMENCEMENT OF PENSION

                  A Member shall not be entitled to the continued payment of a
                  Serious Ill-health pension unless after it comes into payment
                  he co-operates in providing all such evidence, including
                  undergoing any medical examination(s) which the Trustees may
                  from time to time require.

13       LATE RETIREMENT

         13.1     COMMENCEMENT OF LATE RETIREMENT PENSION

                  If with the consent of his Employer a Member continues in
                  Service after his Normal Retirement Age, the commencement of
                  his pension shall be postponed until he retires from Service
                  except in the following circumstances.

                  (1)      If he is a Pre-87 Limits Member or an 87 Limits
                           Member for the purposes of the Revenue Limits Rules,
                           he may with prior written consent of the Principal
                           Employer commence to draw his pension with effect
                           from any day he attains Normal Retirement Age.

                  (2)      If he is an 89 Limits Member for the purposes of the
                           Revenue Limits Rules, he may not commence to draw his
                           pension from the Scheme until his Service terminates
                           except that his pension from the Scheme must come
                           into payment at the latest when he attains age 75.

         13.2     INITIAL ANNUAL AMOUNT OF LATE RETIREMENT PENSION

                  Where the commencement of a Member's pension has been
                  postponed in accordance with sub-Rule 13.1 until after he
                  attains Normal Retirement Age, the initial annual amount of
                  his pension shall be equal to the normal retirement pension
                  which would have been payable to the Member under Rule 8 if
                  the Member had retired on attaining his Normal Retirement Age
                  increased by such late retirement factor as the Trustees
                  having consulted the Actuary consider appropriate having
                  regard to the period of postponement.

                                      209
<PAGE>

                   SECTION 5: ALTERNATIVES TO MEMBER'S PENSION

14       COMMUTATION

         14.1     MEMBER'S RIGHT TO COMMUTE

                  A Member who becomes entitled to a pension from the Scheme may
                  elect to commute part of it for a lump sum subject to and in
                  accordance with this Rule.

         14.2     MEMBER'S ELECTION TO COMMUTE

                  A Member's election under sub-Rule 14.1 shall be made by
                  giving to the Trustees such notice within such period as the
                  Trustees may require.

         14.3     MAXIMUM LUMP SUM

                  The maximum lump sum for which a Member may commute part of
                  his pension pursuant to sub-Rule 14.1 shall be:-

                  (1)      the amount determined by multiplying by 2.25 the
                           initial annual amount of the Member's pension from
                           the Scheme; or

                  (2)      such greater amount as the Trustees may agree and
                           which will not exceed Revenue Limits.

         14.4     MEMBER CONTINUING IN SERVICE AFTER NORMAL RETIREMENT AGE

                  A Member who continues in Service after his Normal Retirement
                  Age may not receive a lump sum by way of commutation pursuant
                  to this Rule until he commences to receive his pension from
                  the Scheme unless he is a Pre-87 Limits Member or an 87 Limits
                  Member for the purpose of the Revenue Limits Rules. If the
                  Member is a Pre-87 Limits Member or on 87 Limits Member he may
                  with the prior written consent of the Principal Employer make
                  an election pursuant to sub-Rule 14.1 at any time from his
                  Normal Retirement Age to the date when his late retirement
                  pension commences to be paid.

         14.5     BENEFITS FROM MEMBER'S VOLUNTARY CONTRIBUTIONS

                  If before April 1987 a Member had entered into arrangements
                  for the payment of voluntary contributions under another
                  retirement benefits scheme established by, or to which
                  contributions were paid:-

                  (1)      by, his Employer; or

                  (2)      by an employer in respect of which his Employer is a
                           relevant employer (within the meaning of Regulation 2
                           of the Occupational Pension Schemes (Transitional
                           Provisions) Regulations 1988 (SI 1988 No. 1436));

                                      210
<PAGE>

                  any pension secured by his voluntary contributions to the
                  Scheme may be commuted pursuant to sub-Rule 14.1. Otherwise,
                  such pension may not be so commuted although it may be taken
                  into account in the calculation of the lump sum.

         14.6     EXCEPTIONAL CIRCUMSTANCES OF SERIOUS ILL-HEALTH

                  If a Member is in exceptional circumstances of serious
                  ill-health such that the Trustees are advised by a medical
                  practitioner that the Member's expectation of life is very
                  short (in the sense of being measured in months rather than
                  years) and the Trustees determine that in the circumstances a
                  pension is not a reasonable provision for the Member, the
                  Trustees shall have power to commute the whole of the Member's
                  pension for a lump sum.

         14.7     TRIVIAL PENSIONS

                  Notwithstanding sub-Rule 14.3, if a Member's benefit has
                  become payable or the Scheme is being wound up and that
                  benefit does not exceed the Triviality Limit:-

                  (1)      the Member may make an election pursuant to sub-Rule
                           14.1 in respect of the whole of it; or

                  (2)      the Trustees shall have the power to commute the
                           whole of it for a lump sum if they determine that it
                           would be conducive to the efficient administration of
                           the Scheme to do so.

         14.8     COMMUTATION FACTORS

                  In determining the amount by which the Member's pension is to
                  be reduced in any case of partial commutation the Trustees
                  shall use such commutation factors as, having taken advice
                  from the Actuary, they may from time to time agree with the
                  Principal Employer and adopt for the purposes of this Rule.

                  The amount of the lump sum to be paid in full commutation of
                  (a) the benefits of a Member who is in exceptional
                  circumstances of serious ill-health, or (b) trivial benefits,
                  shall be calculated on a basis agreed by the Trustees and the
                  Principal Employer having been certified as reasonable by the
                  Actuary.

         14.9     GMP REQUIREMENTS

                  If a Member was in Contracted-Out Employment before 6 April
                  1997, then insofar as his Scheme pension represents any
                  Guaranteed Minimum Pension it may only be commuted in
                  accordance with the GMP Rules.

                                      211
<PAGE>

15       SURRENDER OPTION

         15.1     TRUSTEES' DISCRETION TO PERMIT SURRENDER

                  With the agreement of the Trustees a Member may elect to
                  surrender part of his pension in return for the provision by
                  the Scheme of a pension or pensions for the Member's spouse
                  and/or such one or more of his Dependents approved by the
                  Trustees as he may nominate payable from the date of the
                  Member's death if, but only if, the Member dies after he
                  commences to receive a pension from the Scheme. Any pension
                  payable as a result of such an election is additional to any
                  pension payable to the spouse or any Dependent Child of the
                  Member pursuant to the Rules concerning benefits payable on
                  the Member's death, and shall be payable for such period as
                  the Member may agree with the Trustees.

         15.2     MEMBER'S ELECTION TO SURRENDER

                  A Member's election under sub-rule 15.1 shall be made by
                  giving to the Trustees such notice within such period (and
                  with such evidence of good health) as the Trustees may require
                  and must in any event be made before the Member's own pension
                  commences. The person or persons nominated by the Member must
                  be the Member's spouse or a Dependent or Dependants at the
                  date on which the notice is given. The Trustees may in the
                  absence of such evidence of good health, refuse to accept a
                  Member's election.

         15.3     REVENUE AND CONTRACTING-OUT LIMITS ON SURRENDER

                  The surrender of a Member's pension under this Rule is subject
                  to the following restrictions:-

                  (1)      the amount or aggregate amount of any pensions
                           provided for a Member's spouse or Dependant or
                           Dependants by virtue of an election made pursuant to
                           sub-Rule 15.1 shall not exceed the reduced pension
                           payable to the Member following the surrender; and

                  (2)      if the Member is a Contracted-out Member the
                           reduction in the Member's pension attributable to
                           Contracted-out Employment before 6 April 1997
                           resulting from an election made pursuant to sub-Rule
                           15.1 must not be such as to reduce the Member's
                           pension below his Guaranteed Minimum Pension.

         15.4     SURRENDER FACTORS

                  In determining the rate at which a Member's pension may be
                  surrendered pursuant to this Rule in return for the provision
                  by the Scheme of a pension or pensions for the Member's spouse
                  and/or one or more of the Member's Dependants, the Trustees
                  shall use such surrender factors as, having taken advice from
                  the Actuary, they shall think fit and the Principal Employer
                  shall approve.

                                      212
<PAGE>

         15.5     EFFECT OF DEATH OF SPOUSE OR NOMINATED DEPENDANT

                  If the spouse or any Dependant of a Member who is entitled to
                  a pension from the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15.1 dies before the Member
                  but on or after the date when the Member's own pension has
                  commenced to be paid, the Member's election made pursuant to
                  this Rule shall remain in force and he shall remain entitled
                  only to the part of his pension which he has not surrendered.

                  If the spouse or any Dependant of a Member who is entitled to
                  a pension from the Scheme as a result of an election made by
                  the Member pursuant to sub-Rule 15.1 dies before the Member
                  dies and before the date when the Member's Pension commences
                  to be paid, the Member's election in respect of such spouse or
                  such Dependant shall be cancelled automatically with effect
                  from the spouse's or Dependant's death and the Member's
                  entitlement to pension from the Scheme shall be the same as it
                  would have been if in respect of such spouse or Dependant that
                  election had not been made.

         15.6     REVOCATION OF MEMBER'S ELECTION

                  An election made by a Member pursuant to sub-Rule 15.1 may be
                  revoked:-

                  (1)      by the Member only with the Trustees' consent and
                           only prior to the earlier of his Normal Retirement
                           Age and the commencement of his pension from the
                           Scheme; and

                  (2)      by the Trustee if the Member retires from Service
                           prior to his Normal Retirement Age.

                  In either such case the Member's entitlement to pension from
                  the Scheme shall be the same as it would have been if that
                  election had not been made.

         15.7     FURTHER ELECTION FOLLOWING CANCELLATION OR REVOCATION

                  Following the cancellation or revocation of a Member's
                  election under (as the case may be) sub-Rule 15.5 or 15.6
                  above the Member may, if he so wishes but subject always to
                  sub-Rule 15.2 and the agreement of the Trustees, make a
                  further election in accordance with sub-Rule 15.1

                                      213
<PAGE>

                      SECTION 6: BENEFITS ON MEMBER'S DEATH

16       BENEFITS ON MEMBER'S DEATH: GENERAL

         16.1     CATEGORIES OF BENEFIT PAYABLE

                  If a Member dies, benefits will be provided from the Directors
                  Section in one or more of the following categories:-

                  (1)      a lump sum;

                  (2)      a spouse's pension;

                  (3)      a Financial Dependant's pension; and

                  (4)      children's pensions.

                  The particular benefits payable on the Member's death depend
                  on whether the Member dies in Pensionable Service (Rule 17),
                  in Service on or after Normal Retirement age (Rule 18) or
                  after the commencement of his own pension (Rule 19).

                  If a Member dies after his Pensionable Service has terminated
                  but before the commencement of his own pension, the benefits
                  payable on his death are determined in accordance with Section
                  7 of these Rules.

         16.2     PROVISIONS APPLICABLE TO PENSIONS ON MEMBER'S DEATH

                  16.2.1   COMMENCEMENT

                           A spouse's or Dependant Child's pension shall
                           commence on the day which next follows the date of
                           the Member's death

                  16.2.2   TERMINATION

                           (a)      SPOUSE'S PENSION. A spouse's pension shall
                                    terminate with the last instalment paid
                                    before the spouse dies

                           (b)      FINANCIAL DEPENDANT'S PENSION. A Financial
                                    Dependant's pension shall terminate in
                                    accordance with sub-Rule 17.3, 18.3 or 19.4
                                    (as the case may be).

                           (c)      DEPENDENT CHILD'S PENSION. A Dependent
                                    Child's pension shall terminate with the
                                    last instalment paid before the earliest of
                                    the following dates:-

                                    (1)      if the Dependent Child does not
                                             continue in full-time educational
                                             or vocational training after
                                             attaining age 18, when the
                                             Dependent Child attains age 18;

                                      214
<PAGE>

                                    (2)      if the Dependent Child does
                                             continue in full-time education or
                                             vocational training after attaining
                                             age 18, when the Dependent Child
                                             ceases to be in full-time
                                             educational or vocational training
                                             or attains age 21 if earlier; or

                                    (3)      the date of the Dependent Child's
                                             death;

                                    except that in the case of a child who is a
                                    Dependent Child as a result of being wholly
                                    or partly financially dependent on the
                                    Member by reason of physical or mental
                                    incapacity, the Dependent Child's pension
                                    shall terminate at such time as the Trustees
                                    shall decide.

                  16.2.3   PENSION INCREASES

                           Pensions payable to Member's spouses, Financial
                           Dependants and Dependent Children under these Rules
                           shall be increased in accordance with Rule 28.

                  16.2.4   COMMUTATION

                           A pension payable to a Member's spouse, Financial
                           Dependant or Dependent Child may only be commuted if
                           the pension is Trivial. Such a pension may be
                           commuted when it becomes payable or when the Member's
                           own pension is commuted on grounds of triviality.

                  16.2.5   GMP REQUIREMENTS

                           To the extent that any part of a pension payable to
                           the Member's spouse is a Guaranteed Minimum Pension:-

                           (1)      it is subject to the overriding guarantee
                                    set out in the GMP Rules; and

                           (2)      it may only be commuted in accordance with
                                    the GMP Rules.

17       DEATH IN PENSIONABLE SERVICE

         17.1     LUMP SUM BENEFIT

                  If a Member dies in Pensionable Service before his Normal
                  Retirement Age, there shall be payable in accordance with
                  Clause 22 in Schedule 2 to this Deed a lump sum equal to four
                  times the Member's Pensionable Earnings.

                  The amount payable under this sub-Rule upon the death of any
                  Member shall not exceed the amount which the Trustees receive,
                  as a result of the Member's death, under any policy by which
                  the Member's life is for the time being assured; but this
                  paragraph of this sub-Rule shall not limit the amount which
                  the Trustees are entitled to claim from the underwriter or
                  underwriters of the policy in question.

                                      215
<PAGE>

         17.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount equal to one half of the
                  pension to which Member would have been entitled under Rule 8
                  if he had remained in Pensionable Service until his Normal
                  Retirement Age (based on the Member's Final Pensionable
                  Earnings at the date of his death).

         17.3     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies in Pensionable Service before Normal Retirement
                           Age;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 17.2 if the Member had been survived by a
                  spouse) for such period and in all other respects on such
                  terms and subject to such conditions as they may in their
                  discretion think fit.

         17.4     CHILDREN'S PENSIONS:

                  17.4.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDANT

                           If a Member:-

                           (1)      dies in Pensionable Service before Normal
                                    Retirement Age;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependant to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 17.3; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                                      216
<PAGE>

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a spouse's pension under sub-Rule 17.2 if
                                    the Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 17.2 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  17.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDANT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 17.2 or a Member's Financial
                                    Dependant under sub-Rule 17.3; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependant there is a any child
                                    living who:-

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Member's death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependant's death;

                           the spouse's or Financial Dependant's pension shall
                           from then on be paid to the Dependent Child. If there
                           is more than one such Dependent Child, the spouse's
                           or Financial Dependant's pension shall be divided
                           amongst the Dependent Children in such shares as the
                           Trustees may think fit.

                  17.4.3   ADDITIONAL PENSION

                           If a Member:-

                           (1)      dies in Pensionable Service before Normal
                                    Retirement Age; and

                           (2)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) in
                           addition to any pension or pensions payable under
                           sub-Rule 17.4.1 or 17.4.2, a pension (or pensions)
                           calculated as follows:-

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    5 per cent of the Member's Pensionable
                                    Earnings; or

                                      217
<PAGE>

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to 5 per cent of the Member's
                                    Pensionable Earnings in respect of each
                                    child (but limited to a maximum of 15 per
                                    cent) and which shall be divided amongst the
                                    Dependent Children in such shares as the
                                    Trustees may think fit.

18       DEATH IN SERVICE ON OR AFTER NORMAL RETIREMENT AGE

         18.1     LUMP SUM BENEFITS

                  If a Member dies in Service on or after his Normal Retirement
                  Age, there shall be payable in accordance with Clause 22 in
                  Schedule 2 to this Deed a lump sum equal to five times what
                  would have been the initial annual rate of the Member's
                  pension from the Scheme under Rule 13 if he had retired on the
                  day before his death.

         18.2     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies in Service on or after Normal Retirement Age;
                           and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death; from the Scheme of
                           an initial annual amount calculated using the
                           formula:-

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount calculated using the
                  formula:-

                                    1/2 x Member's Pension

                           where "Member's Pension" is what would have been the
                           initial amount of the Member's pension from the
                           Scheme under Rule 13 if he had retired on the day
                           before his death and any exercise by the Member of
                           his options under Rules 14 (commutation) or 15
                           (surrender) were disregarded.

         18.3     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies in Service on or after Normal Retirement Age;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial amount (not
                  exceeding the amount which would have been payable under
                  sub-Rule 18.2 if the Member had been survived

                                      218
<PAGE>

                  by a spouse) for such period and in all other respects on such
                  terms and subject to such conditions as they may in their
                  discretion think fit.

         18.4     CHILDREN'S PENSIONS

                  18.4.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDANT

                           If a Member:-

                           (1)      dies in Service on or after Normal
                                    Retirement Age;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependant to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 18.3; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a spouse's pension under sub-Rule 18.2 if
                                    the Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 18.2 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  18.4.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDANT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 18.2 or a Member's Financial
                                    Dependant under sub-Rule 18.3; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependant there is any child
                                    living who:-

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Member's death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependant's death;

                           the spouse's or Financial Dependant's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child,

                                      219
<PAGE>

                           the spouse's or Financial Dependant's pension shall
                           be divided amongst the Dependent Children in such
                           shares as the Trustees may think fit.

19       DEATH AFTER RETIREMENT

         19.1     LUMP SUM BENEFIT:  (a) 5 YEAR GUARANTEE

                  If a Member dies within the period of five years from and
                  including the date when his pension from the Scheme commences
                  to be payable, there shall be payable in accordance with
                  Clause 22 in Schedule 2 to this Deed a lump sum equal to the
                  difference between:-

                  (a)      the aggregate amount of pension which the Member
                           would have received during that five year period if
                           he had survived to the end of the period (calculated
                           on the basis that the annual rate of pension payable
                           at the date of his death would have continued to
                           apply for the remainder of the period); and

                  (b)      the amount of pension actually paid to him before his
                           death.

         19.2     LUMP SUM BENEFIT:  (b) CONTINUED LIFE COVER IN SPECIAL CASES

                  Where a Member retires with an immediate early retirement
                  pension:-

                  (1)      under Rule 11 (redundancy early retirement) where the
                           Member's Pensionable Service commenced before 1
                           October 1991; or

                  (2)      under Rule 12 (early retirement due to Serious
                           Ill-health);

                  and the Member dies on or after the commencement of his early
                  retirement pension but before his Normal Retirement Age,
                  then:-

                  (a)      if his pension is a redundancy early retirement
                           pension, a lump sum equal to four times the Member's
                           Pensionable Earnings shall be payable to his personal
                           representatives; or

                  (b)      if his pension is a Serious Ill-health early
                           retirement pension, a lump sum equal to four times
                           the Member's Pensionable Earnings (or, if he is in
                           receipt of a Serious Ill-Health pension which is less
                           than the maximum permitted under sub-Rule 12, a lump
                           sum of such amount as the Trustees may decide) shall
                           be payable in accordance with Clause 22 in Schedule 2
                           to this Deed.

         19.3     SPOUSE'S PENSION

                  If a Member:-

                  (1)      dies on or after the date when his pension from the
                           Scheme commences to be payable; and

                                      220
<PAGE>

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount calculated using the
                  formula:-

                                  1/2 x Member's Pension

                  where "Member's Pension" means the amount of the Member's
                  pension from the Scheme at the date of his death or, if the
                  Member had exercised either of his options under Rules 14
                  (commutation) or 15 (surrender), what would have been the
                  amount of the Member's pension from the Scheme at the date of
                  his death if he had not exercised those options.

         19.4     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies on or after the date when his pension from the
                           Scheme commences to be payable; and

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial amount (not
                  exceeding the amount which would have been payable under
                  sub-Rule 19.3 if the Member had been survived by a spouse) for
                  such period and in all other respects on such terms and
                  subject to such conditions as they may in their discretion
                  think fit.

         19.5     CHILDREN'S PENSIONS

                  19.5.1   NO PRIOR PENSION PAID TO SPOUSE OR FINANCIAL
                           DEPENDANT

                           If a Member:-

                           (1)      dies on or after the date when his pension
                                    from the Scheme commences to be payable;

                           (2)      is not survived by a spouse;

                           (3)      is not survived by a Financial Dependant to
                                    whom the Trustees decide to award a pension
                                    under sub-Rule 19.4; but

                           (4)      is survived by a Dependent Child or
                                    Dependent Children;

                           there shall be payable to that Dependent Child (or,
                           if more than one, those Dependent Children) a pension
                           (or pensions) calculated as follows:-

                                      221
<PAGE>

                           (a)      if there is only one Dependent Child, a
                                    pension of an initial annual amount equal to
                                    the amount which would have been payable as
                                    a spouse's pension under sub-Rule 19.3 if
                                    the Member had been survived by a spouse; or

                           (b)      if there is more than one Dependent Child,
                                    pensions of an aggregate initial annual
                                    amount equal to the amount which would have
                                    been payable as a spouse's pension under
                                    sub-Rule 19.3 if the Member had been
                                    survived by a spouse, and such pensions
                                    shall be divided amongst the Dependent
                                    Children in such shares as the Trustees may
                                    think fit.

                  19.5.2   PRIOR PENSION PAID TO SPOUSE OR FINANCIAL DEPENDANT

                           If:-

                           (1)      a pension is payable to a Member's spouse
                                    under sub-Rule 19.3 or a Member's Financial
                                    Dependant under sub-Rule 19.4; and

                           (2)      on the death of the Member's spouse or that
                                    Financial Dependant there is any child
                                    living who:-

                                    (i)      was a Dependent Child of the Member
                                             at the date of the Member's death;
                                             and

                                    (ii)     continues to be a Dependent Child
                                             at the date of the spouse's or
                                             Financial Dependant's death;

                           the spouse's or Financial Dependant's pension shall
                           from then on be paid to that Dependent Child. If
                           there is more than one such Dependent Child, the
                           spouse's or Financial Dependant's pension shall be
                           divided amongst the Dependent Children in such shares
                           as the Trustees may think fit.

                                      222
<PAGE>

                            SECTION 7: EARLY LEAVERS

20       EARLY LEAVERS:  GENERAL

         20.1     REQUIREMENTS FOR ENTITLEMENT TO PRESERVED BENEFITS

                  This Section applies where, before a Member attains Normal
                  Retirement Age, his Pensionable Service is terminated by him
                  leaving Service or withdrawing from membership of the
                  Directors Section whilst remaining in Service, and he does not
                  become entitled to an early retirement pension under Rules 9
                  to 12.

         20.2     EARLY LEAVERS NOT QUALIFYING FOR PRESERVED BENEFITS

                  If:-

                  (a)      the Member has completed less than two years'
                           Qualifying Service when his Pensionable Service
                           terminates; and

                  (b)      no transfer payment has been made to the Scheme in
                           respect of his rights under a personal pension
                           scheme;

                  he is entitled to a refund of contributions in accordance with
                  Rule 21.

         20.3     EARLY LEAVERS WHO QUALIFY FOR PRESERVED BENEFITS

                  If:-

                  (a)      the Member has completed at least two years'
                           Qualifying Service when his Pensionable Service
                           terminates; or

                  (b)      a transfer payment has been made to the Scheme in
                           respect of his rights under a personal pension
                           scheme;

                  he is entitled to preserved benefits in accordance with Rule
                  22.

21.      EARLY LEAVER NOT ENTITLED TO PRESERVED BENEFITS

         21.1     REFUND OF CONTRIBUTIONS

                  Where, as provided in sub-Rule 20.2, a Member is not entitled
                  to preserved benefits under the Scheme, there shall be payable
                  to him, in substitution for all other benefits payable to or
                  in respect of him under the Scheme, an amount equal to his
                  Member's Contributions less:-

                  (1)      such amount as the Trustees are entitled to retain
                           out of the refund by virtue of section 61 of the
                           Pension Schemes Act as a result of electing to pay a
                           contributions equivalent premium in respect of such
                           Member (being so much of the Premium as is
                           attributable to primary Class 1 contributions); and

                                      223
<PAGE>

                  (2)      such tax as the Trustees may be required to deduct.

         21.2     TRANSFER OPTION

                  A Member to whom sub-Rule 21.1 applies may instead of taking a
                  refund of his Member's Contributions elect by giving prior
                  written notice to the Trustees to have an amount equal to his
                  Member's Contributions paid to another occupational pension
                  scheme or a personal pension scheme pursuant to Clause 19 in
                  Schedule 2.

22       EARLY LEAVER ENTITLED TO PRESERVED BENEFITS

         22.1     ENTITLEMENT TO PRESERVED BENEFITS

                  Where, as provided in sub-Rule 20.3, a Member is entitled to
                  preserved benefits under the Scheme, the Member is a Deferred
                  Member and the benefits payable to and in respect of him from
                  the Scheme upon the termination of his Pensionable Service
                  shall be determined in accordance with this Rule and Rules 23
                  to 26.

         22.2     COMMUTATION AND/OR SURRENDER OF PRESERVED PENSION

                  The preserved pension payable to any Deferred Member may be:-

                  (1)      commuted for a lump sum, subject to and in accordance
                           with the provisions of Rule 14: and/or

                  (2)      surrendered in return for the provision by the Scheme
                           of a pension or pensions for one or more of his
                           Dependants, subject to and in accordance with the
                           provisions of Rule 15.

         22.3     OTHER PROVISIONS APPLICABLE TO PRESERVED PENSIONS

                  Any pension payable under this Rule:-

                  (1)      shall be reduced in accordance with Rule 14 or 15 to
                           the extent that it is commuted or surrendered under
                           either of those Rules.

                  (2)      shall be payable in accordance with Rule 27; and

                  (3)      shall, after it commences, be subject to increases in
                           accordance with Rule 28.

         22.4     SUPPLEMENTS TO PRESERVED PENSIONS

                  Deferred Members' preserved pensions under Rules 23 to 25 may
                  be supplemented:-

                  (1)      as a result of the Member having paid additional
                           voluntary contributions in accordance with sub-Rule
                           3.4 or the Former Provisions;

                                      224
<PAGE>

                  (2)      as a result of a transfer payment or transfer
                           payments having been received in respect of the
                           Member under Clause 18 in Schedule 2 to this Deed or
                           under the Former Provisions; or

                  (3)      as a result of the exercise of the augmentation
                           powers contained in Clause 21 in Schedule 2 to this
                           Deed.

                  The extent to which Rules 14 (commutation option), 15
                  (surrender option), 27 (payment of pensions) and 28 (pension
                  increases) apply to any supplement to the Member's retirement
                  pension referred to in this sub-Rule 22.4 depends on the terms
                  agreed between the Member and the Trustees in the case of
                  additional voluntary contributions and transfer payments and
                  on the terms specified by the Trustees in the case of
                  augmentations.

         22.5     CONTRACTING-OUT AND INLAND REVENUE REQUIREMENTS

                  The Trustees must ensure:-

                  (1)      that if the Member was in Contracted-out Employment
                           in relation to the Scheme before 6 April 1997, the
                           Member's retirement pension attributable to
                           Pensionable Service prior to 6 April 1997 complies
                           with the GMP Rules; and

                  (2)      that the Member's retirement benefits do not exceed
                           the limits applicable to them under the Revenue
                           Limits Rules.

         22.6     REVENUE LIMITS: ALTERNATIVE CALCULATION DISREGARDING RETAINED
                  BENEFITS

                  If having regard to the treatment of retained benefits for the
                  purpose of applying Revenue Limits to any Deferred Member's
                  pension, the amount calculated using the formula:-

                           Final Pensionable Earnings x (VDPS + TPS)
                                                        ------------
                                                             60

                  where:-

                           "VDPS" is the Member's Vodafone Directors Pensionable
                           Service; and

                           "TPS" is his Transferred Pensionable Service (if
                           any);

                  would exceed the amounts calculated in accordance with the
                  formulae set out or referred to in the Rules in this Section
                  7, then the amount calculated using the formula above shall be
                  substituted for the amount calculated in accordance with the
                  formulae set out in the Rules in this Section 7 and then
                  revalued, reduced or increased as required by whichever of
                  Rules 23, 24 or 25 is applicable to him.

                                      225
<PAGE>

         22.7     ALTERNATIVES TO PRESERVED BENEFITS

                  If a Deferred Member:-

                  (1)      has acquired a right under section 94 of the Pension
                           Schemes Act to the cash equivalent of the benefits
                           which have accrued to or in respect of him under the
                           Scheme; and

                  (2)      he has not lost that right in accordance with section
                           100 of the Pension Schemes Act;

                  he may require the Trustees to use the cash equivalent in one
                  or more of the ways specified in section 95 of the Pension
                  Schemes Act. In that case the provisions of Part IV of Chapter
                  IV of the Pension Schemes Act shall apply generally, including
                  the discharge of the Trustees pursuant to section 99 of the
                  Pension Schemes Act.

                  Except to the extent that a Deferred Member is entitled to
                  exercise, and exercises, the option conferred by section 95 of
                  the Pension Schemes Act, if he wishes the benefits accrued to
                  and in respect of him under the Scheme to be bought out or
                  transferred to another retirement benefits scheme or personal
                  pension scheme, he may request the Trustees to exercise their
                  powers under Clauses 19 or 20 in Schedule 2 to this Deed.

23       COMMENCEMENT OF PRESERVED BENEFITS AT NRA

         23.1     PAYMENT

                  At his Normal Retirement Age a Deferred Member shall be
                  entitled to a pension from the Scheme payable for the
                  remainder of his lifetime.

         23.2     INITIAL ANNUAL AMOUNT:  (a) PRE SEPTEMBER 93 DIRECTORS

                  In the case of a Pre September 93 Director, the initial annual
                  amount of the Deferred Member's pension at Normal Retirement
                  Age shall be calculated as follows:-

                  (1)      (a)      if by remaining in Pensionable Service until
                                    Normal Retirement Age the Member's normal
                                    retirement pension would have been
                                    calculated under sub-Rule 8.2(1), by first
                                    calculating the amount payable in accordance
                                    with the formula in that sub-Rule but using
                                    his Final Pensionable Earnings at and
                                    Pensionable Service to his Scheme Exit Date;

                           (b)      if by remaining in Pensionable Service until
                                    Normal Retirement Age the Member's normal
                                    retirement position would have been
                                    calculated under sub-Rule 8.2(2), by first
                                    calculating the amount found by the
                                    following formula:-

                                         Final Pensionable Earnings x 2 x N
                                                                      -   -
                                                                      3   NS

                                      226
<PAGE>

                           where:-

                           "N"  =   the Member's Vodafone Directors Pensionable
                                    Service (or, in the case of a Member with
                                    Transferred Pensionable Service, the
                                    aggregate of his Vodafone Directors
                                    Pensionable Service and his Transferred
                                    Pensionable Service); and

                           "NS" =   what would have been the Member's Vodafone
                                    Directors Pensionable Service (or, in the
                                    case of a Member with Transferred
                                    Pensionable Service, the aggregate of his
                                    Vodafone Directors Pensionable Service and
                                    his Transferred Pensionable Service) if he
                                    had remained in Pensionable Service until
                                    his Normal Retirement Age (or 40 years if
                                    less);

                  (2)      by revaluing the part (if any) of the amount
                           determined pursuant to paragraph (1) of this sub-Rule
                           which is equal to the Member's Guaranteed Minimum
                           Pension in accordance with the GMP Rules; and

                  (3)      by revaluing the part of the amount determined
                           pursuant to paragraph (1) of this sub-Rule which
                           exceeds the Member's Guaranteed Minimum Pension in
                           accordance with the provisions of Chapter II of Part
                           IV of the Pension Schemes Act if the benefits payable
                           to and in respect of the Member under the Scheme are
                           required to be revalued under that Chapter.

         23.3     INITIAL ANNUAL AMOUNT:  (b) POST SEPTEMBER 93 DIRECTORS

                  In the case of a Post September 93 Director, the initial
                  annual amount of the Deferred Member's pension at Normal
                  Retirement Age shall be calculated as follows:-

                  (1)      by first calculating the amount payable in accordance
                           with the formula in sub-Rule 8.3(1), or, if he has
                           Transferred Pensionable Service, sub-Rule 8.3(2),
                           but:-

                           (i)      using his Final Pensionable Earnings at and
                                    Pensionable Service to his Scheme Exit Date;
                                    and

                           (ii)     in respect of his Vodafone Directors
                                    Pensionable Service, using the same VDPS
                                    Denominator as would have been used if he
                                    had remained in Pensionable Service until
                                    Normal Retirement Age;

                  (2)      by revaluing the part (if any) of the amount
                           determined pursuant to paragraph (1) of this sub-Rule
                           which is equal to the Member's Guaranteed Minimum
                           Pension in accordance with the GMP Rules; and

                  (3)      by revaluing the part of the amount determined
                           pursuant to paragraph (1) of this sub-Rule which
                           exceeds the Member's Guaranteed Minimum Pension in
                           accordance with the provisions of Chapter II of Part
                           IV of the
                                      227
<PAGE>

                           Pension Schemes Act if the benefits payable to and in
                           respect of the Member under the Scheme are required
                           to be revalued under that Chapter.

24       COMMENCEMENT OF PRESERVED BENEFITS BEFORE NRA

         24.1     CONDITIONS FOR EARLY COMMENCEMENT

                  A Deferred Member may elect that his pension shall commence
                  from a date before his Normal Retirement Age if the following
                  conditions are satisfied:-

                  (1)      (a) the Deferred Member has attained the age of 50 or
                           (b) in the Trustees' opinion after taking medical
                           advice he has become incapable of following his
                           normal employment by reason of Serious Ill-health;
                           and

                  (2)      the Trustees agree to the commencement of his pension
                           from that date.

         24.2     INITIAL ANNUAL AMOUNT

                  The initial amount of a Deferred Member's pension under
                  sub-Rule 24.1 shall be determined as follows:-

                  (1)      by calculating the amount referred to in paragraph
                           (1) of whichever of sub-Rules 23.2 or 23.3 applies to
                           him and revaluing such amount in the manner provided
                           for in paragraphs (2) and (3) of sub-Rule 23.2 or
                           23.3 (whichever is applicable) to the date when the
                           pension is to commence; and

                  (2)      by applying an early retirement reduction factor to
                           the amount determined pursuant to paragraph (1) of
                           this sub-Rule in respect of the period from the date
                           when the pension becomes payable until the Member's
                           Normal Retirement Age in order to take account of the
                           fact that the pension is likely to be payable for
                           longer than if it were to commence at the Member's
                           Normal Retirement Age. The amount of the reduction
                           factor shall be determined by the Trustees and the
                           Principal Employer after consulting the Actuary.

         24.3     PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations the Trustees must be reasonably satisfied that,
                  when any Member's benefits become payable under this Rule
                  before his Normal Pension Age, the total value of the Member's
                  benefits is at least equal in value to the benefits that have
                  accrued to or in respect of him under the Rules (on the basis
                  that the Rules are the "applicable rules" for the purpose of
                  section 94(2) of the Pension Schemes Act).

                                      228
<PAGE>

25       COMMENCEMENT OF PRESERVED BENEFITS AFTER NRA

         25.1     CONDITIONS FOR LATE COMMENCEMENT:  (a) 89 LIMITS MEMBERS

                  If a Deferred Member:-

                  (1)      is an 89 Limits Member for the purposes of the
                           Revenue Limits Rules;

                  (2)      leaves Service before his Normal Retirement Age; and

                  (3)      continues in employment (other than Service) after
                           his Normal Retirement Age;

                  he may, with the consent of the Trustees, elect that the
                  commencement of his pension shall be postponed until a date
                  which is after his Normal Retirement Age but not later than
                  his 75th birthday.

         25.2     CONDITIONS FOR LATE COMMENCEMENT:  (b) OTHER MEMBERS

                  (1)      is a Pre-87 Limits Member or an 87 Limits Member for
                           the purposes of the Revenue Limits Rules;

                  (2)      leaves Service before his Normal Retirement Age; and

                  (3)      continues in employment (other than Service) after
                           his Normal Retirement Age;

                  he may with the consent of the Trustees, elect that the
                  commencement of his pension shall be postponed until his
                  employment terminates or his 70th birthday if earlier.

         25.3     INITIAL ANNUAL AMOUNT

                  Where the commencement of a Deferred Member's pension has been
                  postponed in accordance with sub-Rules 25.1 or 25.2, the
                  initial annual amount of his pension shall be determined as
                  follows:-

                  (1)      by calculating his preserved pension at Normal
                           Retirement Age in accordance with whichever of
                           sub-Rules 23.2 or 23.3 applies to him; and

                  (2)      by increasing the amount determined pursuant to
                           paragraph (1) of this sub-Rule by such late
                           retirement factor as the Trustees having consulted
                           the Actuary consider appropriate having regard to the
                           period of postponement.

                                      229
<PAGE>

         25.4     PRESERVATION REQUIREMENTS

                  In accordance with Regulation 8(4) of the Preservation
                  Regulations the Trustees must be reasonably satisfied that,
                  when any Member's pension becomes payable under this Rule
                  after his Normal Pension Age, the total value of the Member's
                  benefits is at least equal in value to the benefits that have
                  accrued to or in respect of him under the Rules (on the basis
                  that the Rules are the "applicable rules" for the purpose of
                  section 94(2) of the Pension Schemes Act).

26       BENEFITS ON DEATH OF EARLY LEAVER WITH PRESERVED BENEFITS

         26.1     LUMP SUM ON DEATH OF DEFERRED MEMBER WHILST BENEFITS PRESERVED

                  If a Deferred Member dies before his preserved pension
                  commences to be paid, there shall be payable from the Scheme
                  to the Member's estate a lump sum equal to the Member's
                  Contributions.

         26.2     SPOUSE'S PENSION ON DEATH OF DEFERRED MEMBER WHILST BENEFITS
                  PRESERVED

                  If a Deferred Member:-

                  (1)      dies before his preserved pension commences to be
                           paid; and

                  (2)      is survived by a spouse to whom the Member was
                           married at the date of his death;

                  the Member's spouse shall be entitled to a pension from the
                  Scheme of an initial annual amount, determined as follows:-

                  (1)      by first calculating the amount found by using the
                           formula:-

        Final Pensionable Earnings x Vodafone Directors Pensionable Service; and
                                     --------------------------------------
                                                      160

                  (2)      by then revaluing the part of the amount found under
                           paragraph (1) of this sub-Rule which is attributable
                           to the Member's Pensionable Service on or after 6
                           April 1997 in accordance with section 84 of the
                           Pension Schemes Act as though it were a benefit of
                           the kind mentioned in section 83(1)(a) of the Pension
                           Schemes Act.

         26.3     MEMBERS WITH TRANSFERRED PENSIONABLE SERVICE

                  In the case of the spouse of a Member with Transferred
                  Pensionable Service, the Member's spouse to whom a pension is
                  payable under sub-Rule 26.2 shall be entitled to additional
                  pension of an initial annual amount determined as follows:-

                  (1)      by first calculating the amount found by using the
                           formula:-

               Final Pensionable Earnings x Transferred Pensionable Service; and
                                            -------------------------------
                                                          160

                                      230
<PAGE>

                  (2)      by then revaluing the part of the amount found under
                           paragraph (1) of this sub-Rule which is attributable
                           to the Member's Pensionable Service on or after 6
                           April 1997 in accordance with section 84 of the
                           Pension Schemes Act as though it were a benefit of
                           the kind mentioned in section 83(1)(a) of the Pension
                           Schemes Act.

         26.4     FINANCIAL DEPENDANT'S PENSION

                  If a Member:-

                  (1)      dies before his preserved pension commences to be
                           paid;

                  (2)      is not survived by a spouse to whom the Member was
                           married at the date of his death; but

                  (3)      is survived by a Financial Dependant;

                  the Trustees may if they think fit grant a pension under the
                  Scheme to the Financial Dependant of such initial annual
                  amount (not exceeding the amount which would have been payable
                  under sub-Rule 26.2 (and sub-Rule 26.3 if applicable) if the
                  Member had been survived by a spouse) for such period and in
                  all other respects on such terms and subject to such
                  conditions as they may in their discretion think fit.

         26.5     BENEFITS ON DEATH OF DEFERRED MEMBER AFTER PENSION COMMENCES

                  If a Deferred Member dies on or after the date when his
                  pension from the Scheme commence to be payable, benefits shall
                  be payable in respect of him in accordance with Rule 19.

         26.6     OTHER PROVISIONS APPLICABLE TO SURVIVORS' PENSIONS

                  The provisions of Rule 16 shall apply to the pensions payable
                  to the spouses and Financial Dependants of deceased Deferred
                  Members under this Rule.

                                      231
<PAGE>

            SECTION 8: PENSIONS - PAYMENT ARRANGEMENTS AND INCREASES

27       PAYMENT OF PENSIONS

         27.1     PAYMENT ARRANGEMENTS

                  Subject to sub-Rule 27.2, all pensions payable from the Scheme
                  shall be paid in advance by monthly installments on such
                  working day in the month as the Trustees may from time to time
                  decide except that the first instalment of any pension may be
                  paid in arrears as soon as is reasonably practicable after the
                  pension commences.

         27.2     POWER TO CHANGE PAYMENT ARRANGEMENTS

                  The Trustees shall have power with the Principal Employer's
                  consent to alter the date on which and/or intervals at which
                  pensions are paid from the Scheme (including power to make
                  alterations which result in pensions being payable otherwise
                  than in advance) and when doing so to make such arrangements
                  for apportionment in respect of the commencement and
                  termination of pensions and such transitional arrangements in
                  respect of any such alteration in each case as they may
                  consider necessary or desirable.

         27.3     OVERPAYMENT OF PENSIONS

                  If any instalment of any pension is paid after the person
                  entitled to it has died, such instalment (or all of them if
                  more than one) shall be repayable to the Trustees by the
                  recipient or his personal representatives (as the case may
                  be).

28       PENSION INCREASES

         28.1     GUARANTEED MINIMUM PENSIONS

                  Insofar as any pension payable from the Scheme and
                  attributable to Pensionable Service before 6 April 1997 is a
                  Guaranteed Minimum Pension, it shall be increased to the
                  extent required by the GMP Rules.

         28.2     OTHER PENSIONS

                  Insofar as any pension payable from the Scheme is attributable
                  to Pensionable Service before 6 April 1997 and is not a
                  Guaranteed Minimum Pension, or is attributable to Pensionable
                  Service on or after 6 April 1997, its annual rate shall be
                  increased with effect from 1 April each year by five per cent.

         28.3     FIRST ANNUAL INCREASE

                  On the 1 April which first follows the date on which any
                  pension commences to be paid, the increase under sub-Rule 28.2
                  shall be 1/12th of the percentage

                                      232
<PAGE>

                  increase provided for in that sub-Rule multiplied by the
                  number of complete months in the period from the date on which
                  the pension commences to the following 31 March.

                                      233
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      234
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                        SCHEDULE 6: REVENUE LIMITS RULES

1      INTERPRETATION...................................................... 237
       1.1   Interpretation generally...................................... 237
       1.2   Categories of Member.......................................... 237
       1.3   Other defined terms........................................... 238
       1.4   Amount of Member's Final Remuneration......................... 240
       1.5   Rules for calculating Final Remuneration...................... 241

2      LIMITS APPLICABLE TO 89 LIMITS MEMBERS.............................. 242
       2.1   Maximum benefits.............................................. 242
       2.2   Member's Aggregate Retirement Benefit......................... 243
       2.3   Member's Lump Sum Retirement Benefit.......................... 243
       2.4   Lump sum death benefit before commencement of pension......... 244
       2.5   Dependant's pension........................................... 244
       2.6   Aggregate Dependant's pensions................................ 244
       2.7   Member's contributions........................................ 244
       2.8   Continued life cover.......................................... 245
       2.9   Payment of retirement benefits................................ 245

3      LIMITS APPLICABLE TO PRE-87 AND 87 LIMITS MEMBERS................... 245
       3.1   Maximum benefits.............................................. 245
       3.2   Member's Aggregate Retirement Benefit......................... 245
       3.3   Member's Lump Sum Retirement Benefit.......................... 246
       3.4   Lump sum death benefit before commencement of pension......... 247
       3.5   Dependant's pension........................................... 247
       3.6   Aggregate Dependants' pensions................................ 247
       3.7   Member continuing in Service after Normal Retirement Age...... 248
       3.8   Controlling Directors......................................... 248
       3.9   Member's contributions........................................ 248
       3.10  Transfers..................................................... 249

4      LIMITS APPLICABLE TO ALL MEMBERS.................................... 249
       4.1   Increases to pensions in payment.............................. 249
       4.2   Surplus AVCs.................................................. 249
       4.3   Transfers..................................................... 249

5      ELECTION BY PRE-87 AND 87 LIMITS MEMBERS FOR POST-89 REGIME......... 250
        5.1   When election may be made.................................... 250
        5.2   Effect of making an election................................. 250

                                      235
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      236
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                        SCHEDULE 6: REVENUE LIMITS RULES

1        INTERPRETATION

         1.1      INTERPRETATION GENERALLY

                  These Rules shall be interpreted in accordance with this Rule
                  and Schedule 1 to this Deed. Any reference in this Schedule to
                  a numbered Rule is to one of the Rules set out in this
                  Schedule unless the reference is to a rule in one of the other
                  Schedules.

         1.2      CATEGORIES OF MEMBER

                  For the purpose of this Schedule, Members fall within one or
                  other of three categories depending on which Revenue Limits
                  apply to them:-

                  "PRE-87 LIMITS MEMBER" means any Member:-

                  (1)      (a)      who joined the Scheme before 17 March 1987;
                                    or

                           (b)      who joined the Scheme on or after 17 March
                                    1987 but, to whom regulation 3 of The
                                    Occupational Pension Schemes (Transitional
                                    Provisions) Regulations 1988 (SI 1988 No
                                    1436) applies; and

                  (2)      who has not elected pursuant to Rule 5 to become an
                           89 Limits Member;

                  "87 LIMITS MEMBER" means any Member:-

                  (1)      (a)      who joined the Scheme on or after 17 March
                                    1987 and before 1 June 1989; or

                           (b)      who joined the Scheme on or after 1 June
                                    1989 but who falls with the circumstances
                                    set out in regulation 3 of The Retirement
                                    Benefits Schemes (Continuation of Rights of
                                    Members of Approved Schemes) Regulations
                                    1990 (SI 1990 No 2101); and

                  (2)      who does not fall within the circumstances set out in
                           regulation 3 of the Occupational Pension Schemes
                           (Transitional Provisions) Regulations 1988 (SI 1988
                           No 1436); and

                  (3)      who has not elected pursuant to Rule 5 to become an
                           89 Limits Member;

                  "89 LIMITS MEMBER" means any Member who is not a Pre-87 Limits
                  Member or an 87 Limits Member.

                                       237
<PAGE>

         1.3      OTHER DEFINED TERMS

                  In this Schedule the following words and expressions shall
                  have the following meanings respectively:-

                  "AGGREGATE RETIREMENT BENEFIT" means, in relation to any
                  Member, the aggregate of:-

                  (1)      his pension under this Scheme and any Associated
                           Scheme; and

                  (2)      the pension equivalent of his Lump Sum Retirement
                           Benefit.

                  "ASSOCIATED EMPLOYER" means, in relation to any Employer, any
                  other employer where one is controlled by the other, or both
                  are controlled by a third party (for which purpose control has
                  the meaning in section 840 of the Taxes Act, or in the case of
                  a close company, section 417 of the Taxes Act);

                  "ASSOCIATED SCHEME" means any Relevant Scheme providing
                  benefits in respect of Service;

                  "CONNECTED SCHEME" means any Relevant Scheme which is
                  connected with the Scheme in relation to the Member by reason
                  of the fact that:-

                  (1)      there is a period during which the Member has been
                           the employee of two Associated Employers;

                  (2)      that period counts under both schemes as a period in
                           respect of which benefits are payable; and

                  (3)      the period counts under one scheme for service with
                           one employer and under the other for service with the
                           other employer;

                  "CONTROLLING DIRECTOR" means a Member who, at any time on or
                  after 17 March 1987 and in the last 10 years before his Scheme
                  Exit Date has, in relation to his Employer, been both within
                  the definition of a director in section 612(1) of the Taxes
                  Act and within paragraph (b) of section 417(5) of the Taxes
                  Act;

                  "FLUCTUATING EMOLUMENTS" means any part of Member's earnings
                  which are not paid on a fixed basis and are additional to the
                  basic wage or salary for which purpose:-

                  (1)      fluctuating emoluments include overtime, commission,
                           bonuses or benefits in kind as long as they are
                           assessable to tax under Case I or II Schedule E;

                  (2)      profit related pay (whether relieved from income tax
                           or not) may be treated as a fluctuating emolument;
                           and

                  (3)      directors' fees may rank as fluctuating emoluments
                           according to the basis on which they are voted.

                                      238
<PAGE>

                  "LUMP SUM RETIREMENT BENEFIT" means, in relation to a Member,
                  the total value of all retirement benefits payable in any form
                  other than non-commutable pension under this Scheme and any
                  Associated Scheme;

                  "PERMITTED MAXIMUM" is to be construed in accordance with
                  section 590C(2) of the Taxes Act;

                  "RELEVANT SCHEME" means:-

                  (1)      any other scheme approved or in respect of which
                           approval is being sought under Chapter I Part XIV of
                           the Taxes Act; and

                  (2)      in respect of an 89 Limits Member who is a
                           Controlling Director also the following insofar as
                           they provide benefits secured by contributions in
                           respect of Service:-

                           (a)      any retirement annuity contract or trust
                                    scheme approved under Chapter III Part XIV
                                    of the Taxes Act; or

                           (b)      any personal pension scheme approved under
                                    Chapter IV Part XIV of the Taxes Act;

                  "REMUNERATION" means, in relation to any year and any Member,
                  the aggregate of his emoluments for the year in question from
                  the Employer which are assessable to Income Tax under Schedule
                  E, but:-

                  (1)      excluding:-

                           (a)      any amounts which arise from the acquisition
                                    or disposal of shares or any interest in
                                    shares or a right to acquire shares; or

                           (b)      anything in respect of which tax is
                                    chargeable by virtue of section 148 of the
                                    Taxes Act; and

                  (2)      in the case of an 89 Limits Member, disregarding any
                           emoluments in excess of the Permitted Maximum;

                  "RETAINED DEATH BENEFITS" means any lump sum benefits payable
                  on the Member's death from the following schemes and
                  arrangements to which the following provisions of his Taxes
                  Act are applicable:-

                  (a)      retirement benefits schemes approved or in respect of
                           which approval is being sought under Chapter I Part
                           XIV, or relevant statutory schemes as defined in
                           section 611A;

                  (b)      funds to which section 608 applies;

                  (c)      retirement benefits schemes which have been accepted
                           by the Inland Revenue as "corresponding" in respect
                           of a claim made on behalf of the Member for the
                           purpose of section 596(2)(b);

                                      239
<PAGE>

                  (d)      retirement annuity contracts approved under Chapter
                           III Part XIV; or

                  (e)      personal pension schemes approved under Chapter IV
                           Part XIV;

                  (f)      transfer payments from overseas schemes held in a
                           type of arrangement defined in paragraphs (a), (d) or
                           (e) of this definition;

                  in respect of previous employments or periods of
                  self-employment (whether alone or in partnership) but if such
                  benefits do not exceed (pound)2,500 in total they may be
                  ignored;

                  "SERVICE" means service with:-

                  (a)      the Employer; or

                  (b)      an Associated Employer; or

                  (c)      an employer who is associated with the Employer only
                           by virtue of a permanent community of interest
                           (except in relation to an 89 Limits Member who is a
                           Controlling Director of either employer).

         1.4      AMOUNT OF MEMBER'S FINAL REMUNERATION

                  For the purposes of this Schedule, a Member's "FINAL
                  REMUNERATION" means whichever of the following is the greater
                  amount:-

                  (a)      his highest Remuneration upon which tax liability has
                           been determined for any one of the five years
                           preceding his Scheme Exit Date being the aggregate
                           of:-

                           (1)      his basic pay for the year in question, and

                           (2)      the yearly average over three or more
                                    consecutive years ending with the expiry of
                                    the corresponding basic pay year, of any
                                    Fluctuating Emoluments, for which purpose:-

                                    (i)      Fluctuating Emoluments of a year
                                             other than the basic pay year may
                                             be increased in proportion to the
                                             increase in the RPI from the last
                                             day of that year up to the last day
                                             of the basic pay year; and

                                    (ii)     Remuneration which the Member
                                             receives after his Scheme Exit Date
                                             and upon which tax liability has
                                             been determined will be treated as
                                             a Fluctuating Emolument (providing
                                             it was earned or qualified for
                                             prior to the Scheme Exit Date) and
                                             may be included provided the yearly
                                             average of three or more
                                             consecutive years begins no later
                                             than the commencement of the basic
                                             pay year; or

                  (b)      the yearly average of the Member's total emoluments
                           from his Employer which are assessable to income tax
                           under Case I or II of Schedule E and upon which tax
                           liability has been determined for any three or more

                                      240
<PAGE>

                           consecutive years ending not earlier than ten years
                           before the Member's Scheme Exit Date, for which
                           purpose, where such emoluments are received after his
                           Scheme Exit Date but are earned or qualified for
                           prior to that date, they may be included provided
                           that in these circumstances the yearly average of
                           three or more consecutive years begins no later than
                           the commencement of the year ending with the Scheme
                           Exit Date.

         1.5      RULES FOR CALCULATING FINAL REMUNERATION

                  For the purpose of sub-Rule 1.4:-

                  (1)      Remuneration and total emoluments do not include any
                           amounts which arise from the acquisition or disposal
                           of shares or any interest in shares or from a right
                           to acquire shares (except where the shares or rights
                           etc which give rise to such an amount liable to tax
                           under Schedule E had been acquired before 17 March
                           1987) or anything in respect of which tax is
                           chargeable by virtue of section 148 of the Taxes Act.

                  (2)      In relation to a Controlling Director, Final
                           Remuneration shall be the amount ascertained in
                           accordance with paragraph (b) of sub-Rule 1.4 and
                           paragraph (a) of sub-Rule 1.4 shall not apply.

                  (3)      In relation to any other employee whose Remuneration
                           in any year subsequent to 5 April 1987 used for the
                           purpose of calculating benefits has exceeded
                           (pound)100,000, (or such other figure as may be
                           prescribed by the Treasury), Final Remuneration shall
                           not exceed the amount ascertained in accordance with
                           paragraph (b) of sub-Rule 1.4 and paragraph (a) of
                           sub-Rule 1.4 shall not apply, unless the individual
                           chooses to adopt (pound)100,000 (or such other figure
                           as may be prescribed by the Treasury).

                  (4)      Where the Final Remuneration is computed by reference
                           to any year other than the last complete year ending
                           on the Member's Scheme Exit Date, the Member's
                           Remuneration or total emoluments of any year may be
                           increased in proportion to any increase in the RPI
                           from the last day of that year up to the Scheme Exit
                           Date. For a Pre-87 Limits Member this paragraph shall
                           not apply to the calculation of the maximum lump sum
                           retirement benefit unless the member's aggregate
                           total benefits are similarly increased beyond the
                           maximum amount which could be paid but for this
                           paragraph and/or the first sentence of paragraph
                           (a)(2) of sub-Rule 1.4 and then only to the same
                           proportionate extent.

                  (5)      For 89 Limits Members, Final Remuneration shall not
                           exceed the Permitted Maximum.

                  (6)      For the purpose of calculating the maximum lump sum
                           retirement benefit of an 87 Limits Member, Final
                           Remuneration shall not in any event exceed
                           (pound)100,000 (or such other figure as may be
                           prescribed by the Treasury).

                  (7)      An employee who remains, or is treated as remaining,
                           in service but by reason of Incapacity is in receipt
                           of a much reduced Remuneration eg under a sick pay or

                                      241
<PAGE>

                           permanent health insurance scheme, for more than ten
                           years up to his Scheme Exit Date, may calculate Final
                           Remuneration under paragraphs (a) or (b) of sub-Rule
                           1.4 with the Final Remuneration calculated at the
                           cessation of normal pay and increased in accordance
                           with the RPI.

                  (8)      The total amount of any profit related pay (whether
                           relieved from income tax or not) may be classed as
                           pensionable remuneration and treated as a Fluctuating
                           Emolument.

                  (9)      An early retirement pension in payment from the
                           Employer may not be included in Final Remuneration.

                  Except as provided in paragraph (1) of this sub-Rule, benefits
                  in kind may be taken into account when they are assessed to
                  income tax as emoluments under Schedule E, and will normally
                  be regarded as Fluctuating Emoluments. If benefits are not so
                  assessable, they may not be included as part of final
                  remuneration except with the agreement of the Inland Revenue.

                  For the purposes of providing immediate benefits at the
                  Member's Scheme Exit Date it will be permitted to calculate
                  Final Remuneration on the appropriate basis above using
                  remuneration assessable to tax under Case I or II of Schedule
                  E and upon which tax liability has not been determined. On
                  determination of this liability Final Remuneration must be
                  recalculated. Should this result in a lower Final Remuneration
                  then benefits in payment should be reduced if this is
                  necessary to ensure that they do not exceed the maximum
                  approvable based on the lower Final Remuneration. Where Final
                  Remuneration is greater it will be possible to augment
                  benefits in payment but such augmentation must take the form
                  of a non-commutable pension.

                  Where immediate benefits are not being provided or where a
                  transfer payment is to be made in respect of accrued pension
                  benefits then Final Remuneration may only be calculated using
                  Remuneration assessable to income tax under Case I or II of
                  Schedule E and upon which tax liability has been determined.

2        LIMITS APPLICABLE TO 89 LIMITS MEMBERS

         2.1      MAXIMUM BENEFITS

                  Notwithstanding anything to the contrary in the Scheme
                  provisions:-

                  (1)      Any term used in the Scheme as a measure of the
                           annual earnings of an 89 Limits Member for the
                           purpose of calculating benefits is to be interpreted
                           as though those earnings are no greater than the
                           Permitted Maximum. The benefits so calculated may be
                           augmented up to the maximum limits referred to in
                           paragraph (2) of this sub-Rule.

                  (2)      The benefits payable to an 89 Limits Member or his
                           Dependants or other beneficiaries in respect of him
                           shall not, when aggregated with all benefits of a
                           like nature provided under all Associated Schemes
                           exceed the limits set out in this Rule.

                                      242
<PAGE>

         2.2      MEMBER'S AGGREGATE RETIREMENT BENEFIT

                  The Member's Aggregate Retirement Benefit shall not exceed:-

                  (a)      on retirement at any time between attaining age 50
                           and attaining age 75, except before Normal Retirement
                           Age on grounds of Incapacity, a pension of 1/60th of
                           Final Remuneration for each year of Service (not
                           exceeding 40 years) or such greater amount as will
                           not prejudice Approval;

                  (b)      on retirement at any time before Normal Retirement
                           Age on grounds of Incapacity a pension of the amount
                           which could have been provided at Normal Retirement
                           Age in accordance with paragraph (a) of this
                           sub-Rule, with Final Remuneration being computed as
                           at the actual date of retirement;

                  (c)      on leaving Pensionable Service before attaining age
                           75, a pension of 1/60th of Final Remuneration for
                           each year of Service prior to leaving Pensionable
                           Service (not exceeding 40 years) or such greater
                           amount as will not prejudice Approval. The amount
                           computed may be increased by 5% for each complete
                           year or if greater, in proportion to any increase in
                           the RPI which has occurred between the date of
                           termination of Pensionable Service and the date on
                           which the pension begins to be payable. Any further
                           increase necessary to comply with Social Security
                           legislation is also allowable.

                  Benefits for an 89 Limits Member are further restricted to
                  ensure that his total retirement benefit from this Scheme and
                  from any Associated Scheme or Connected Scheme does not exceed
                  a pension of 1/30th of the Permitted Maximum for each year of
                  service, subject to a maximum of 20/30ths. For the purpose of
                  this limit, service is the aggregate of Service and any period
                  of service which gives rise to benefits under a Connected
                  Scheme provided that no period is to be counted more than
                  once.

                  For the purpose of calculating the Aggregate Retirement
                  Benefit or the total retirement benefit in this sub-Rule, the
                  pension equivalent of any Lump Sum Retirement Benefit is one
                  twelfth of its total cash value.

         2.3      MEMBER'S LUMP SUM RETIREMENT BENEFIT

                  The Member's Lump Sum Retirement Benefit (if any) shall not
                  exceed:-

                  (a)      on retirement at any time between attaining age 50
                           and attaining age 75, except before Normal Retirement
                           Age on grounds of Incapacity, 3/80ths of Final
                           Remuneration for each year of Service (not exceeding
                           40 years) or such greater amount as will not
                           prejudice Approval;

                  (b)      on retirement at any time before Normal Retirement
                           Age on grounds of Incapacity the amount which could
                           have been provided at Normal Retirement Age in
                           accordance with paragraph (a) of this sub-Rule, with
                           Final Remuneration being computed as at the actual
                           date of retirement;

                                      243
<PAGE>

                  (c)      on leaving Pensionable Service before attaining age
                           75, a lump sum of 3/80ths of Final Remuneration for
                           each year of Service prior to leaving Pensionable
                           Service (not exceeding 40 years), or such greater
                           amount as will not prejudice Approval. The amount
                           computed may be increased in proportion to any
                           increase in the RPI which has occurred between the
                           date of termination of Pensionable Service and the
                           Date on which the benefit is first paid.

         2.4      LUMP SUM DEATH BENEFIT BEFORE COMMENCEMENT OF PENSION

                  The lump sum benefit (exclusive of any refund of the Member's
                  own contributions and any interest thereon) payable on the
                  death of a Member while in Service or (having left Service
                  with a deferred pension) before the commencement of his
                  pension shall not, when aggregated with all like benefits
                  under Associated Schemes, exceed the greater of:-

                  (a)      (pound)5,000, and

                  (b)      four times the Member's Final Remuneration
                           (disregarding paragraph (1) of sub-Rule 1.5) less
                           Retained Death Benefits;

                  or such greater amount as will not prejudice Approval.

         2.5      DEPENDANT'S PENSION

                  Any pension for a Dependant, when aggregated with the
                  pensions, other than those provided by surrender of the
                  Member's own pension, payable to that Dependant under all
                  Associated Schemes, shall not exceed an amount equal to 2/3rds
                  of the maximum Aggregate Retirement Benefit payable in
                  accordance with sub-Rule 2.1 had the Member retired on grounds
                  of Incapacity on the date of death entitled to no retained
                  benefits from previous employments.

         2.6      AGGREGATE DEPENDANT'S PENSIONS

                  If pensions are payable to more than one Dependant of a
                  Member, the aggregate of all Dependants' pensions payable in
                  respect of him under this Scheme and all Associated Schemes
                  shall not exceed the full amount of the maximum Aggregate
                  Retirement Benefit payable in accordance with sub-Rule 2.2 had
                  the Member retired on grounds of Incapacity on the date of
                  death entitled to no retained benefits from previous
                  employments.

         2.7      MEMBER'S CONTRIBUTIONS

                  Any retirement benefits secured by 89 Limits Members'
                  voluntary contributions must be in form of non-commutable
                  pension except to the extent to which the provisions of the
                  Scheme allow commutation of trivial pensions or on the grounds
                  of serious ill health.

                  The contributions paid to the Scheme by an 89 Limits Member in
                  a year of assessment shall not exceed either:

                                      244
<PAGE>

                  (i)      when aggregated with the Member's contributions to
                           any other exempt approved schemes, 15 per cent of the
                           Member's Remuneration; or

                  (ii)     when aggregated with the Member's contributions to
                           any schemes which are Associated or Connected
                           Schemes, 15 per cent of the Permitted Maximum.

         2.8      CONTINUED LIFE COVER

                  Any provision in the rules to provide a lump sum benefit on
                  the death of a Member occurring after retirement on pension
                  (other than a payment under a guarantee of pension provision)
                  shall be restricted in respect of a Member who joined the
                  Scheme on or after 1 October 1991 to exclude any provision
                  other than on death occurring before the Normal Retirement Age
                  and after retirement on grounds of Incapacity. The amount of
                  the benefit shall not exceed the amount payable had the Member
                  died immediately before retirement increased in proportion to
                  any increase in the RPI between the date of the Member's
                  retirement and the date of death.

         2.9      PAYMENT OF RETIREMENT BENEFITS

                  The payment of an 89 Limits Member's retirement benefits shall
                  not commence earlier than the Member attaining age 50, except
                  on retirement on grounds of Incapacity, nor later than
                  attaining age 75.

                  No part of an 89 Limits Member's retirement benefits is to be
                  paid in advance of actual retirement except as necessary to
                  comply with this sub-Rule or to the extent necessary to comply
                  with the requirements of the Pension Schemes Act.

3        LIMITS APPLICABLE TO PRE-87 AND 87 LIMITS MEMBERS

         3.1      MAXIMUM BENEFITS

                  Notwithstanding anything to the contrary in the Scheme
                  provisions, the benefits payable to an 87 Limits or a Pre-87
                  Limits Member or to his Dependants or other beneficiaries in
                  respect of him shall not when aggregated with all benefits of
                  a like nature provided under all Associated Schemes exceed the
                  limits set out in this Rule.

         3.2      MEMBER'S AGGREGATE RETIREMENT BENEFIT

                  The Member's Aggregate Retirement Benefit shall not exceed:-

                  (a)      on retirement at or before Normal Retirement Age, a
                           pension of 1/60th of Final Remuneration for each year
                           of Service (not exceeding 40 years) or such greater
                           amount as will not prejudice Approval;

                  (b)      on retirement on grounds of Incapacity the amount
                           calculated in accordance with paragraph (a) of this
                           sub-Rule as if the Member had remained in Service
                           until his Normal Retirement Age, Final Remuneration
                           being computed as at the actual date of retirement;

                                      245
<PAGE>

                  (c)      on retirement after Normal Retirement Age, a pension
                           of the greatest of:-

                           (i)      the amount calculated in accordance with
                                    paragraph (a) of this sub-Rule on the basis
                                    that the actual date of retirement was the
                                    Member's Normal Retirement Age;

                           (ii)     the amount which could have been provided at
                                    Normal Retirement Age in accordance with
                                    paragraph (a) of this sub-Rule increased
                                    either actuarially in respect of the period
                                    of deferment or in proportion to any
                                    increase in the RPI during that period: and

                           (iii)    where the Member's total Service has
                                    exceeded 40 years, the aggregate of 1/60th
                                    of Final Remuneration for each year of
                                    Service before Normal Retirement Age (not
                                    exceeding 40 such years) and of a further
                                    1/60th of Final Remuneration for each year
                                    of Service after Normal Retirement Age, with
                                    an overall maximum of 45 reckonable years;

                           (Final Remuneration being computed in respect of
                           sub-paragraphs (i) and (iii) above as at the actual
                           date of retirement, but subject always to sub-Rule
                           3.7);

                  (d)      on leaving Pensionable Service before Normal
                           Retirement Date, a pension of 1/60th of Final
                           Remuneration for each year of Service prior to
                           leaving Pensionable Service (not exceeding 40 years)
                           or such greater amount as will not prejudice
                           Approval. The amount computed may be increased by 5%
                           for each complete year or if greater, in proportion
                           to any increase in the RPI which has occurred
                           between the date of termination of Pensionable
                           Service and the date on which the pension begins to
                           be payable. Any further increase necessary to comply
                           with Social Security legislation is also allowable.

         3.3      MEMBER'S LUMP SUM RETIREMENT BENEFIT.

                  The Member's Lump Sum Retirement Benefit (if any) shall not
                  exceed:

                  (a)      on retirement at or before Normal Retirement Age,
                           3/80ths of Final Remuneration for each year of
                           Service (not exceeding 40 years) or such greater
                           amount as will not prejudice Approval;

                  (b)      on retirement on grounds of Incapacity the amount
                           calculated in accordance with paragraph (a) of this
                           sub-Rule as if the Member had remained in Service
                           until his Normal Retirement Age. Final Remuneration
                           being computed as at the actual date of retirement;

                  (c)      on retirement after Normal Retirement Age, the
                           greatest of:

                           (i)      the amount calculated in accordance with
                                    paragraph (a) of this sub-Rule on the basis
                                    that the actual date of retirement was the
                                    Member's Normal Retirement Age;

                                      246
<PAGE>

                           (ii)     the amount which could have been provided at
                                    Normal Retirement Age in accordance with
                                    paragraph (a) of this sub-Rule together with
                                    an amount representing interest on it. and

                           (iii)    where the Member's total Service has
                                    exceeded 40 years. the aggregate of 3/80ths
                                    of Final Remuneration for each year of
                                    Service before Normal Retirement Age (not
                                    exceeding 40 such years) and of a further
                                    3/80ths of Final Remuneration for each year
                                    of Service after Normal Retirement Age, with
                                    an overall maximum of 45 reckonable years;

                           (Final Remuneration being computed in respect of
                           paragraphs (i) and (iii) above as at the actual date
                           of retirement, but subject always to sub-Rule 3.7);

                  (d)      on leaving Pensionable Service before Normal
                           Retirement Age, a lump sum of 3/80th of Final
                           Remuneration for each year of Service prior to
                           leaving Pensionable Service (not exceeding 40 years)
                           or such greater amount as will not prejudice
                           Approval. The amount computed as aforesaid may be
                           increased in proportion to any increase in the RPI
                           which has occurred between the date of termination of
                           Pensionable Service and the date on which the benefit
                           is first paid.

         3.4      LUMP SUM DEATH BENEFIT BEFORE COMMENCEMENT OF PENSION

                  The lump sum benefit (exclusive of any refund of the Member's
                  own contributions and any interest thereon) payable on the
                  death of a Member while in Service or (having left Service
                  with a deferred pension) before the commencement of his
                  pension shall not, when aggregated with all like benefits
                  under Associated Schemes, exceed the greater of:-

                  (a)      (pounds) 5,000, and

                  (b)      four times the Member's Final Remuneration
                           (disregarding paragraph (1) of sub-Rule 1.5) less
                           Retained Death Benefits;

                  or such greater amount as will not prejudice Approval.

         3.5      DEPENDANT'S PENSION

                  Any pension for a Dependant, when aggregated with the
                  pensions, other than those provided by surrender of the
                  Member's own pension, payable to that Dependant under all
                  Associated Schemes, shall not exceed an amount equal to 2/3rds
                  of the maximum Aggregate Retirement Benefit payable in
                  accordance with sub-Rule 3.2 had the Member retired on grounds
                  of Incapacity on the date of death entitled to no retained
                  benefits from previous employments.

         3.6      AGGREGATE DEPENDANTS' PENSIONS

                  If pensions are payable to more than one Dependant of a
                  Member, the aggregate of all Dependants' pensions payable in
                  respect of him under this Scheme and all

                                      247
<PAGE>

                  Associated Schemes shall not exceed the full amount of the
                  maximum Aggregate Retirement Benefit payable in accordance
                  with sub-Rule 3.2 had the Member retired on grounds of
                  Incapacity on the date of death entitled to no retained
                  benefits from previous employments.

         3.7      MEMBER CONTINUING IN SERVICE AFTER NORMAL RETIREMENT AGE

                  If a Member elects under Rule 13 in whichever of Schedules 3.4
                  or 5 applies to him to take any part of his benefits under
                  this Scheme in advance of actual retirement, the limits set
                  out in sub-Rules 3.2 and 3.3 shall apply as if he had retired
                  at the date of the election, no account being taken of
                  subsequent Service, except that the maximum amount of any
                  uncommuted pension not commencing immediately may be increased
                  either actuarially in respect of the period of deferment or in
                  proportion to any increase in the RPI during that period.

         3.8      CONTROLLING DIRECTORS

                  The preceding provisions of this Rule shall be modified in
                  their application to a Member who is a Controlling Director as
                  follows:-

                  (a)      the amount of the maximum Aggregate Retirement
                           Benefit in sub-Rule 3.2 and of the maximum Lump Sum
                           Retirement Benefit in sub-Rule 3.3 shall be reduced,
                           where necessary for Approval, to take account of any
                           corresponding benefits under retirement annuity
                           contracts or trust schemes approved under Chapter III
                           Part XIV of the Taxes Act or under personal pension
                           schemes approved under Chapter IV Part XIV of the
                           Taxes Act:

                  (b)      where retirement takes place after Normal Retirement
                           Date but not later than the Member's 70th birthday,
                           paragraph (c)(ii) and (iii) of sub-Rule 3.2 and
                           paragraph (c)(ii) and (iii) of sub-Rule 3.3 shall
                           not apply, and if retirement is later than the
                           attainment of that age, those paragraphs shall apply
                           as if the Member's 70th birthday had been specified
                           in the Rules as his Normal Retirement Age, so as not
                           to treat as Service after Normal Retirement Age any
                           Service before the Member reaches the age of 70:

                  (c)      where sub-Rule 3.7 applies to him, the rate of the
                           actuarial increase referred to in it in relation to
                           any period of deferment prior to his attaining the
                           age of 70, shall not exceed the percentage increase
                           in the RPI during that period.

         3.9      MEMBER'S CONTRIBUTIONS

                  Where a Pre-87 or 87 Limits Member's voluntary contributions
                  commence on or after 8 April 1987 any retirement benefits
                  secured by them must be in the form of non-commutable pension
                  except to the extent to which the provisions of the Scheme
                  allow commutation of trivial pensions or on the grounds of
                  serious ill health.

                  The total contributions paid by a Pre-87 or 87 Limits Member
                  in a year of assessment to this and any Associated Scheme
                  shall not exceed 15% of his Remuneration for that year.

                                      248
<PAGE>

         3.10     TRANSFERS

                  Any retirement benefits arising by virtue of the receipt by
                  the Scheme of a transfer value (other than from another scheme
                  providing benefits in respect of Service) shall not be capable
                  of commutation unless and then only to the extent that a
                  certificate has been obtained from the administrator of the
                  transferring scheme showing the maximum lump sum payable from
                  the transfer value. The amount so certified may be increased
                  in proportion to any increase in the RPI since the date the
                  transfer payment was received.

                  When, on or after a transfer having been made to another
                  occupational pension scheme, the administrator of that scheme
                  requests such a certificate as is referred to in the previous
                  paragraph of this sub-Rule, the Trustees shall calculate as at
                  the date of the transfer the maximum lump sum payable on
                  retirement from the transfer value and certify that amount to
                  the receiving scheme.

4        LIMITS APPLICABLE TO ALL MEMBERS

         4.1      INCREASES TO PENSIONS IN PAYMENT

                  The maximum amount of a pension ascertained in accordance with
                  Rules 2 or 3 less any pension which has been commuted for a
                  lump sum or the pension equivalent of any benefits in lump sum
                  form and any pension surrendered to provide a Dependant's
                  pension may be increased by 3% for each complete year or if
                  greater, in proportion to any increase in the RPI since the
                  pension commenced.

         4.2      SURPLUS AVCs

                  Where the application of the limits in this Schedule requires
                  the amount of the Aggregate Retirement Benefit to be
                  restricted and the Member has paid additional voluntary
                  contributions to supplement scheme benefits, that restriction
                  shall first be effected on those supplementary benefits so as
                  to permit the repayment of the surplus additional voluntary
                  contributions subject to section 599A of the Taxes Act.

         4.3      TRANSFERS

                  The benefits arising on retirement from a transfer value shall
                  not be capable of commutation nor shall they be paid in lump
                  sum form if the transfer is accompanied by a certificate from
                  the administrator of the transferring scheme to the effect
                  that the transfer value is not to be used to provide benefits
                  in lump sum form.

                  When making a transfer to an approved personal pension scheme
                  the Trustees shall provide a certificate of the maximum lump
                  sum payable on retirement from the transfer value if the
                  transferring Member:-

                  (a)      was aged 45 or more at the tune that the transfer
                           payment was made: or

                                      249
<PAGE>

                  (b)      has at any time within the ten years preceding the
                           date on which the right to the cash equivalent being
                           transferred arose, been, in respect of any employment
                           to which the transfer payment or any part of it
                           relates either:

                           (i)      a Controlling Director; or

                           (ii)     in receipt of annual remuneration in excess
                                    of(pounds) 60,000 or, if greater, the
                                    allowable maximum (ie the equivalent for
                                    pension schemes of the Permitted Maximum)
                                    for the year of assessment in which the date
                                    of transfer falls: or

                  (c)      is entitled to benefits included in the transfer
                           payment which arise from an occupational pension
                           scheme under which the normal retirement age is 45 or
                           less.

5        ELECTION BY PRE-87 AND 87 LIMITS MEMBERS FOR POST-89 REGIME

         5.1      WHEN ELECTION MAY BE MADE

                  Any 87 Limits Member and any Pre-87 Limits Member may by
                  notice to the Trustees given before whichever of the following
                  first occurs:

                  (1)      his benefits commence to be payable:

                  (2)      his benefits are bought out or otherwise transferred
                           outside the Scheme; or

                  (3)      he attains age 75;

                  elect that the benefits payable to and in respect of him under
                  the Scheme shall be determined on the basis that he is and
                  always has been an 89 Limits Member.

         5.2      EFFECT OF MAKING AN ELECTION

                  Any Member who exercises his option under sub-Rule 5.1 shall
                  thereupon cease to be an 87 Limits Member or a Pre-87 Limits
                  Member (as the case may be) and shall thereupon become an 89
                  Limits Member.

                                      250
<PAGE>

                          VODAJONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                              SCHEDULE 7: GMP RULES

1        INTRODUCTION ................................................... 253
         1.1     Application ............................................ 253
         1.2     Interpretation ......................................... 253
         1.3     Overriding effect ...................................... 254

2        MEMBER'S GMP ................................................... 254
         2.1     Entitlement to a GMP at State Pensionable Age .......... 254
         2.2     Amount of GMP .......................................... 254
         2.3     Commencement and duration of Members GMP ............... 255
         2.4     Postponement of GMP after State Pensionable Age ........ 255
         2.5     Increase in GMP following postponement ................. 255
         2.6     Increases after State Pensionable Age .................. 255

3        WIDOW'S AND WIDOWER'S GMP ...................................... 255
         3.1     Entitlement to GMP ..................................... 255
         3.2     Amount of widow's GMP .................................. 255
         3.3     Amount of widower's GMP ................................ 256
         3.4     Commencement and duration of widow's GMP ............... 256
         3.5     Commencement and duration of widower's GMP ............. 256
         3.6     Increases after commencement ........................... 256

4       ANTI-FRANKING ................................................... 256

5       TRANSFERS OF GMPs INTO THE SCHEME ............................... 256
         5.1     Acceptance of transfers ................................ 256
         5.2     Revaluation of transferred-in GMPS ..................... 256

6       COMMUTATION, SURRENDER AND FORFEITURE OF GMPs ................... 257
         6.1     Commutation ............................................ 257
         6.2     Suspension and forfeiture .............................. 257

7       CONTRIBUTIONS EQUIVALENT PREMIUM ................................ 257
         7.1     Members GMP ............................................ 257
         7.2     Widow's or widower's GMP ............................... 257
         7.3     Dispensation if amount of premium is inconsiderable .... 258

                                      251
<PAGE>

                          PAGE INTENTIONALLY LEFT BLANK

                                      252
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                              SCHEDULE 7: GMP RULES

1        INTRODUCTION

         1.1      APPLICATION

                  These Rules apply:-

                  (1)      to all Members in Pensionable Service on the Revision
                           Date who were in a Contracted-out Employment under
                           the Scheme before the Revision Date; and

                  (2)      to all Members who become Members on or after the
                           Revision Date and in relation to whom a transfer
                           payment in respect of accrued rights to, or the
                           liability for the payment of, GMPs is accepted by the
                           Trustees.

         1.2      INTERPRETATION

                  These Rules shall be interpreted in accordance with Schedule 1
                  to this Deed, and in addition the following words and
                  expressions are used only in these Rules and have the
                  following meanings respectively:-

                  "CONTRACTING-OUT REGULATIONS" means The Occupational Pension
                  Schemes (Contracting-out) Regulations 1996 (SI 1996 No. 1172);

                  "EARNINGS FACTORS" shall be construed in accordance with
                  sections 22 and 23 of the Social Security Contributions and
                  Benefits Act 1992;

                  "FINAL RELEVANT YEAR" means the Tax Year which precedes the
                  Tax Year in which the Member attains State Pensionable Age;

                  "FIXED RATE REVALUATION" means the revaluation of Earnings
                  Factors in accordance with section 17(3) of the Pension
                  Schemes Act and regulation 62 of the Contracting-out
                  Regulations (revaluation at 6.25 per cent. compound);

                  "GUARANTEED MINIMUM" shall be calculated in accordance with
                  sections 14 to 17 of the Pension Schemes Act;

                  "GMP" means, in relation to any Member or the widow or widower
                  of any Member, the guaranteed minimum pension to be provided
                  by the Scheme in accordance with the requirements of section
                  13 and 17 of the Pension Schemes Act;

                  "RELEVANT YEAR" means, in relation to any Member, any Tax Year
                  in his working life (within the meaning of paragraph 5(8) of
                  Schedule 3 to the Social Security Contributions and Benefits
                  Act 1992) (not being earlier than the Tax Year 1978-79 or
                  later than the Tax Year 1996-97);

                                      253
<PAGE>

                  "SECTION 148 ORDER" means an order made under section 148 of
                  the Social Security Administration Act i992 (revaluation of
                  Earnings Factors in order to maintain their value in relation
                  to the general level of earnings):

                  "SECTION 148 REVALUATION" means the revaluation of Earnings
                  Factors in accordance with Section 148 Orders for the purpose
                  of section 17(1) of the Pension Schemes Act;

                  "STATE PENSIONABLE AGE" means, for the purpose only of these
                  Rules (and in accordance with section 181(1) of the Pension
                  Schemes Act), the age of 65 in the case of a male Member and
                  the age of 60 in the case of a female Member.

         1.3      OVERRIDING EFFECT

                  As required by regulation 55(1) of the Contracting-out
                  Regulations, Rules 2 and 3 override all other provisions of
                  the Scheme, except any that are in accordance with the
                  provisions of the Pension Schemes Act.

2        MEMBER'S GMP

         2.1      ENTITLEMENT TO A GMP AT STATE PENSIONABLE AGE

                  As required by section 13 of the Pension Schemes Act and
                  regulation 55(i)(a) of the Contracting-out Regulations, where
                  a Member has a Guaranteed Minimum, he shall be entitled at
                  State Pensionable Age in respect of his Service before 6 April
                  1997 to a GMP.

         2.2      AMOUNT OF GMP

                  Each GMP shall be payable at a rate which is equivalent to a
                  weekly rate of not less than the Member's Guaranteed Minimum.
                  As permitted by section 17(2) of the Pension Schemes Act, if a
                  Member's Service in Contracted-out Employment by reference to
                  the Scheme is terminated on or after 6 April 1997 but before
                  the Member's Final Relevant Year:-

                  (1)      his Earnings Factors for the purpose of calculating
                           his Guaranteed Minimum shall be determined by
                           reference to the last Section 148 Order to come into
                           force before the end of the Tax Year in which that
                           Service ends; and

                  (2)      as required by section 17(3) of the Pension Schemes
                           Act and regulation 62 of the Contracting-out
                           Regulations, his Guaranteed Minimum shall be
                           increased by at least 6.25 per cent compound (or
                           such other percentage as applies when his Service
                           terminates by virtue of regulations made under that
                           section) for each Tax Year up to and including his
                           Final Relevant Year.

                                      254
<PAGE>

         2.3      COMMENCEMENT AND DURATION OF MEMBER'S GMP

                  As required by section 13(3) of the Pension Schemes Act, a
                  Member's GMP shall, subject to sub-Rule 2.4, commence on the
                  date when the Member attains State Pensionable Age and shall
                  continue for his life.

         2.4      POSTPONEMENT OF GMP AFTER STATE PENSIONABLE AGE

                  As permitted by section 13(4) of the Pension Schemes Act, the
                  commencement of a Member's GMP may be postponed for any period
                  for which he continues in employment after attaining Start
                  Pensionable Age except that, as required by section 13(5) of
                  the Pension Schemes Act, the Member's consent shall be
                  required:-

                  (1)      for any such postponement by virtue of employment to
                           which the Scheme does not relate: and

                  (2)      for any such postponement after the duration of five
                           years from the date on which the Member attains State
                           Pensionable Age.

         2.5      INCREASE IN GMP FOLLOWING POSTPONEMENT

                  Where in accordance with sub-Rule 2.4, the commencement of any
                  Member's GMP is postponed for any period and there are at
                  least seven complete weeks in that period, his Guaranteed
                  Minimum shall be increased in accordance with section 15 of
                  the Pension Schemes Act.

         2.6      INCREASES AFTER STATE PENSIONABLE AGE

                  To the extent that any Member's GMP is attributable to
                  Earnings Factors for the Tax Years 1988-89 to 1996-97, it
                  shall be increased in accordance with section 109 of the
                  Pension Schemes Act, having regard to section 15(4) of the
                  Pension Schemes Act where the commencement of the GMP has
                  been postponed.

3        WIDOW'S AND WIDOWER'S GMP

         3.1      Entitlement to GMP

                  As required by section 17(1) of the Pension Schemes Act, if
                  any Member to whom these Rules apply dies leaving a widow or
                  widower (whether before or after attaining State Pensionable
                  Age), the widow or widower shall be entitled to a GMP under
                  the Scheme.

         3.2      AMOUNT OF WIDOW'S GMP

                  As required by section 17(2) of the Pension Schemes Act and
                  regulation 55(1)(b) of the Contracting-out Regulations, where
                  a male Member has a Guaranteed Minimum, his widow shall be
                  entitled in respect of the Member's Service before 6 April
                  1997 to a GMP, being a pension under the Scheme payable at a
                  rate which is equivalent to a weekly rate of not less than
                  half the Member's Guaranteed Minimum.

                                      255
<PAGE>

         3.3      AMOUNT OF WIDOWER'S GMP

                  As required by section 17(2) of the Pension Schemes Act and
                  regulation 55(1)(c) of the Contracting-out Regulations, where
                  a female Member has a Guaranteed Minimum, her widower shall be
                  entitled in respect of the Member's Service before 6 April
                  1997 to a GMP, being a pension under the Scheme payable at a
                  rate which is equivalent to a weekly rate of not less than
                  half of that part of the Member's Guaranteed Minimum which is
                  attributable to Earnings Factors for the Tax Year 1988-89 and
                  subsequent Tax Years up to and including the Tax Year 1996-97.

         3.4      COMMENCEMENT AND DURATION OF WIDOW'S GMP

                  In accordance with section 17(5) of the Pension Schemes Act,
                  the widow's pension shall be payable to her for any period for
                  which any such pension or allowance as is mentioned in that
                  section is payable to her.

         3.5      COMMENCEMENT AND DURATION OF WIDOWER'S GMP

                  In accordance with section 17(6) of the Pension Schemes Act,
                  the widower's pension shall be payable to him in the
                  circumstances and for the period prescribed by regulations 57
                  and 58 of the Contracting-out Regulations.

         3.6      INCREASES AFTER COMMENCEMENT

                  To the extent that a widow's or widower's GMP is attributable
                  to Earnings Factors for the Tax Years 1988-89 to 1996-97, it
                  shall be increased in accordance with section 109 of the
                  Pension Schemes Act.

4        ANTI-FRANKING

         Chapter III of the Pension Schemes Act applies to the Scheme so as to
         protect increases in GMPs.

5        TRANSFERS OF GMP INTO THE SCHEME

         5.1      ACCEPTANCE OF TRANSFERS

                  The Trustees may accept a transfer payment in respect of
                  accrued rights to, or the liability for the payment of GMPs
                  in the circumstances and subject to the conditions prescribed
                  by the Contracting-out Transfer Regulations (or such other
                  regulations as may be made under section 20 of the Pension
                  Schemes Act).

         5.2      REVALUATION OF TRANSFERRED-IN GMPs

                  Where on or after 6 April 1997 the Trustees accept a transfer
                  payment in respect of the accrued rights to GMPs of any
                  Member then in accordance with section 17(1) of the Pension
                  Schemes Act (as modified by regulation 65 of the
                  Contracting-out Regulations), the Member's Earnings Factors
                  arising out of Contracted-out Employment in any Relevant Year
                  in a period of linked qualifying service (within the meaning
                  of section 179 of the Pension Schemes Act) shall be increased
                  in accordance with whichever of the following

                                      256
<PAGE>

                  paragraphs of this sub-Rule the Trustees shall decide (in each
                  case as contemplated by regulation 66 of the Contracting-out
                  Regulations):-

                  (a)      at the race by which they fell to be increased under
                           the provisions of the transferring scheme (or would
                           have fallen to be increased under the provisions of
                           that scheme relating to an earner whose service in
                           Contracted-out Employment by reference to that scheme
                           is terminated before he attains State Pensionable
                           Age); or

                  (b)      in accordance with the provisions of sections 17(2)
                           and (3) of the Pension Schemes Act, or regulations
                           made under section 17(3) of that Act (i.e. Fixed Rate
                           Revaluation); or

                  (c)      by reference to Section 148 Orders from the date of
                           termination of the Member's service in the period of
                           Contracted-out Employment from which those Earnings
                           Factors arose.

6        COMMUTATION, SURRENDER AND FORFEITURE OF GMPs

         6.1      COMMUTATION

                  As permitted by section 21(1) of the Pension Schemes Act, any
                  Member's, widow's or widower's GMP payable by the Scheme may
                  be commuted for a lump sum in the circumstances set out in
                  regulation 60 of the Contracting-out Regulations.

         6.2      SUSPENSION AND FORFEITURE

                  As permitted by section 21(2) of the Pension Schemes Act, a
                  Member's widow's or widower's GMP:-

                  (a)      may be suspended in the circumstances set out in
                           regulation 61(1) of the Contracting-out Regulations;
                           and

                  (b)      may be forfeited in the circumstances set out in
                           regulation 61(2) of the Contracting-out Regulations.

7        CONTRIBUTIONS EQUIVALENT PREMIUM

         7.1      MEMBER'S GMP

                  As provided in section 60(4) of the Pension Schemes Act, the
                  payment of a contributions equivalent premium in the
                  circumstances mentioned in section 55(2A)(a) and (b), (d) and
                  (e) of that Act extinguishes a Member's accrued rights to GMPs
                  under the Scheme.

         7.2      WIDOW'S OR WIDOWER'S GMP

                  As provided in section 60(5) of the Pension Schemes Act, the
                  payment of a contributions equivalent premium in the
                  circumstances mentioned in section 55(2A)(c) of that Act
                  extinguishes any accrued rights to GMPs under the Scheme of
                  any Member's widow or widower.

                                      257
<PAGE>

         7.3      DISPENSATION IF AMOUNT OF PREMIUM IS INCONSIDERABLE

                  As provided by paragraph 5(3) in Schedule 2 to the Pension
                  Schemes Act and regulation 32(2) of the Contracting-out
                  Regulations, where the amount of any contributions equivalent
                  premium which is payable does not exceed (pounds)17, the
                  Trustees shall not be liable to pay it.

                                      258
<PAGE>

                          VODAFONE GROUP PENSION SCHEME

                        SECOND DEFINITIVE DEED AND RULES

                   SCHEDULE 8: LIST OF GOVERNING DOCUMENTS

                               PART 1: THIS SCHEME

            DATE                DEED                    PARTIES

1      10 Oct 1988    Interim Trust Deed       (1)    Racal Telecom Plc
                                               (2)    Racal Telecom (Staff)
                                                      Trustee Ltd

2      06 Feb 1990    Deed of Amendment        (1)    Racal Telecom Plc
                                               (2)    Racal Telecom (Staff)
                                                      Trustee Ltd

3      03 Aug 1990    Definitive Deed          (1)    Racal Telecom Plc
                                               (2)    Racal Voda-Retail
                                               (3)    Racal Telecom (Staff)
                                                      Trustee Ltd

4      23 Oct 1991    Deed of Amendment        (1)    Vodafone Group Plc
                                               (2)    Vodafone Group
                                                      (Staff) Trustee Ltd

5      30 Jan 1995    Deed of Amendment        (1)    Vodafone Group Plc
                                               (2)    Vodafone Group
                                                      (Staff) Trustee Ltd

6      30 Jan 1996    Deed of Amendment        (1)    Vodafone Group Plc
                                               (2)    Vodafone Group
                                                      (Staff) Trustee Ltd

                          PART 2: VODAFONE EM&SM SCHEME

            DATE              DOCUMENT                   PARTIES

1      03 Aug 1990    Definitive Deed          (1)   Racal Telecom Plc
                                               (2)   Racal Telecom (Senior
                                                     Managers) Trustee
                                                     Limited

2      23 Oct 1991    Deed of Amendment        (1)   Vodafone Group Plc
                                               (2)   Vodafone Group (Senior
                                                     Managers) Trustee
                                                     Limited

                                      259
<PAGE>

3      30 Jan 1995    Deed of Amendment        (1)   Vodafone Group Plc
                                               (2)   Vodafone Group (Senior
                                                     Managers) Trustee
                                                     Limited

4      30 Jan 1996    Deed of Amendment        (1)   Vodafone Group Plc
                                               (2)   Vodafone Group (Senior
                                                     Managers) Trustee
                                                     Limited

5      30 Mar 1999    Deed of Amendment        (1)   Vodafone Group Plc
                                               (2)   Vodafone Group (Senior
                                                     Managers) Trustee
                                                     Limited

                        PART 3: VODAFONE DIRECTORS SCHEME

            DATE              DOCUMENT                   PARTIES

1      03 Aug 1990    Definitive Deed          (1)  Racal Telecom Plc
                                               (2)  Racal Telecom (Directors)
                                                    Trustee Limited

2      23 Oct 1991    Deed of Amendment        (1)  Vodafone Group Plc
                                               (2)  Vodafone Group
                                                    (Directors) Trustee
                                                    Limited

3      30 Jan 1995    Deed of Amendment        (1)  Vodafone Group Plc
                                               (2)  Vodafone Group
                                                    (Directors) Trustee
                                                    Limited

4      30 Jan 1996    Deed of Amendment        (1)  Vodafone Group Plc
                                               (2)  Vodafone Group
                                                    (Directors) Trustee
                                                    Limited

5      30 Mar 1999    Deed of Amendment        (1)  Vodafone Group Plc
                                               (2)  Vodafone Group
                                                    (Directors) Trustee
                                                    Limited

SIGNED and DELIVERED as a deed      )        /s/ KJ Hydun
by VODAFONE GROUP PLC acting        )        ...................................
by, KJ Hydun , Director and         )                                   Director
by  SR Scott , Secretary            )        /s/ S.R. Scott
                                             ...................................
                                                                       Secretary

                                      260
<PAGE>

SIGNED and DELIVERED as a deed      )        /s/ S.R. Scott
by VODAFONE GROUP PENSION           )        ...................................
TRUSTEE LIMITED acting by SR Scott  )                                   Director
Director and                        )        /s/ Mark Prudden
by         , Director/Secretary     )        ...................................
                                                             Directory/Secretary

                                      261<PAGE>

                                                                 EXHIBIT 10.32

                        ---------------------------------

                                  RULES OF THE

                                 VODAFONE GROUP

                               1998 COMPANY SHARE
                                 OPTION SCHEME

                        ---------------------------------

                           July 1998 - Final Version
<PAGE>

                                  RULES OF THE
                                 VODAFONE GROUP
                        1998 COMPANY SHARE OPTION SCHEME

1    DEFINITIONS

     In these Rules:

     1.1  the following words and expressions have the following meanings:-

          "Act"                         the Income and Corporation Taxes Act
                                        1988;

          "Announcement Date"           a date on which the Company makes the
                                        preliminary announcement to the London
                                        Stock Exchange of its final results, or
                                        the announcement to the London Stock
                                        Exchange of its interim results, for any
                                        financial accounting period;

          "Approved Scheme"             a share option scheme (other than a
                                        savings related scheme) approved by the
                                        Commissioners of Inland Revenue for the
                                        purposes of Schedule 9 to the Act;

          "Associated Company"          any company which is an associated
                                        company of the Company within the
                                        meaning that the expression bears in
                                        Section 416 of the Act;

          "Company"                     Vodafone Group Plc;

          "Control"                     the meaning given to the expression in
                                        Section 840 of the Act;

          "Date of Grant"               the date on which the Directors grant an
                                        Option in accordance with the terms of
                                        Rule 2.1;

          "Directors"                   the board of directors for the time
                                        being of the Company or a duly
                                        authorised committee thereof consisting
                                        wholly or mainly of non-executive
                                        directors;

          "Eligible Employee"           any person (including a full-time
                                        director) who at any Date of Grant is in
                                        employment with any Participating
                                        Company provided that such person has
                                        not less than two years employment to

                                       1
<PAGE>

                                        complete before Retirement. For the
                                        purposes of this definition "full-time"
                                        shall mean devoting substantially the
                                        whole of his working time to the
                                        employment and having a normal
                                        contractual working week of 25 hours or
                                        more excluding meal breaks;

          "Employment"                  employment by the Company and/or any
                                        company under the Control of the Company
                                        or Associated Company and "ceasing to be
                                        in Employment" shall be construed as
                                        ceasing to be employed by all such
                                        companies;

          "Equity Share Capital"        the meaning ascribed to that expression
                                        by Section 744 of the Companies Act
                                        1985;

          "Group"                       the Company and all its Subsidiaries;

          "London Stock Exchange"       the London Stock Exchange Limited;

          "Option"                      the right granted or to be granted on
                                        any particular Date of Grant to
                                        subscribe for or acquire Shares in
                                        accordance with the Rules;

          "Option Certificate"          a certificate evidencing an Option as
                                        referred to in Rule 2.3;

          "Option Price"                the price for the acquisition of a Share
                                        comprised in any Option which shall be
                                        determined by the Directors and shall
                                        (subject to the provisions of Rule 6 and
                                        Rule 7.4) be not less than the higher
                                        of:

                                        (a)  the average of the middle market
                                             quotations of a Share on the 5
                                             dealing days preceding the Date of
                                             Grant as derived from the London
                                             Stock Exchange Daily Official List;
                                             and

                                        (b)  the nominal value of a Share, if
                                             higher, in the case of an Option
                                             which may be satisfied on exercise
                                             by the issue of new Shares;

                                       2
<PAGE>

          "Participant"                 any person (including, where the context
                                        permits, the legal personal
                                        representatives of such person) who
                                        holds an Option;

          "Participating Company"       any company within the Group which the
                                        Directors have determined shall be a
                                        Participating Company for the purposes
                                        of the Scheme;

          "Record Date"                 in relation to any particular payment of
                                        dividend or other right attaching to
                                        Shares the date on which any shareholder
                                        must duly appear on the register of
                                        members of the Company as such in order
                                        to be entitled to such dividend or other
                                        right;

          "Redundancy"                  redundancy within the meaning of the
                                        Employment Rights Act 1996;

          "Retirement"                  retirement on or after reaching age 60
                                        or any other age at which a Participant
                                        is bound to retire in accordance with
                                        the terms of his contract of employment;

          "Rules"                       these rules together with any amendment
                                        thereto effected in accordance with Rule
                                        10;

          "Scheme"                      this scheme, being the Vodafone Group
                                        1998 Company Share Option Scheme as
                                        adopted by the Company in general
                                        meeting on 21 July 1998 and as amended
                                        from time to time;

          "Share"                       a share in the capital of the Company
                                        which complies with the provisions of
                                        paragraphs 10 to 14 of Schedule 9 to the
                                        Act;

          "Subsidiary"                  a company which is both under the
                                        Control of the Company and a subsidiary
                                        of the Company within the meaning of
                                        Section 736 of the Companies Act 1985;

                                       3
<PAGE>

     1.2  Where the context so admits

          1.2.1  words importing the singular shall include the plural and vice
                 versa and words importing the masculine shall include the
                 feminine; and

          1.2.2  any reference to a statue (or a particular Chapter, Part or
                 Section thereof) shall mean and include any statutory
                 modification or re-enactment thereof for the time being in
                 force and any regulations made thereunder.

2    GRANT OF OPTIONS

     2.1  Subject to the provisions of Rule 3, the Directors may, by resolution,
          grant Options to such Eligible Employees as they at their absolute
          discretion think fit but only during the periods of six weeks
          following

          2.1.1  the approval of the Scheme by the Commissioners of Inland
                 Revenue under the provisions of Schedule 9 to the Act; and

          2.1.2  an Announcement Date

          and at other times under exceptional circumstances provided that no
          Option may be granted at any time when there is an embargo on dealing
          in Shares by virtue of the London Stock Exchange Model Code for
          Securities Transactions by Directors of Listed Companies or any code
          adopted by the Company based on the Model Code or of the provisions of
          any legislation for the time being in force. If the Directors cannot
          grant Options due to any such embargo the Directors may grant Options
          within six weeks after the embargo has been lifted. The Directors may
          not grant Options on a day where any dealing day used to calculate the
          Option Price falls in a period when there is such an embargo.

     2.2  Such Options may be granted so that their exercise shall be subject to
          such objective conditions (additional to the conditions expressed in
          the Rules and not inconsistent with the provisions of the Scheme) as
          the Directors may think fit provided that any such conditions shall be
          on such basis or bases as may from time to time be acceptable to the
          Commissioners of Inland Revenue. Any such additional conditions may be
          waived or amended if an event happens which causes the Directors to
          consider that such additional conditions could not fairly or
          reasonably be met, provided that the approval of the Commissioners of
          Inland Revenue shall first have been obtained in respect of such
          waiver or amendment (where the Scheme is to retain its approved
          status) and provided that any amended condition should be no more
          difficult and no less difficult to satisfy than the original
          conditions. Any conditions imposed shall, unless the Directors
          determine otherwise at the Date of Grant, automatically be waived in
          the event of an exchange of Options pursuant to Rule 7.4 or where
          rules 4.1.2, 4.1.3, 4.1.4 apply or in accordance with the terms of any
          conditions.

                                       4
<PAGE>

     2.3  An Option shall be granted by way of a deed and Participants will be
          sent an Option Certificate or statement in such form as the Directors
          shall decide. The Option Certificate or statement shall specify the
          number of Shares comprised in the Option, the Date of Grant, the
          Option Price and any conditions relating to the exercise of Options
          determined by the Directors under Rule 2.2 and shall be otherwise in
          such form (not inconsistent with the provisions of the Scheme) as the
          Directors may from time to time determine. If any such certificate
          shall be worn out, defaced, destroyed or lost, it may be renewed on
          such evidence being provided and on such terms as the Directors may
          reasonably require.

     2.4  Any Eligible Employee to whom an Option is granted may by notice given
          in writing within 30 days after its Date of Grant renounce his rights
          thereunder and in such case the Option shall be deemed never to have
          been granted hereunder.

     2.5  No consideration shall be payable by an Eligible Employee for the
          grant of an Option.

     2.6  Notwithstanding any provision of any other of these Rules whatsoever;

          2.6.1  the Scheme shall not form part of any contract of employment
                 between the Company, a Subsidiary or any Associated Company and
                 any Participant and it shall not confer on any Participant any
                 legal or equitable rights (other than those constituted by the
                 Options themselves) whatsoever against the Company, a
                 Subsidiary or Associated Company directly or indirectly or give
                 rise to any cause of action at law or in equity against the
                 Company, a Subsidiary or any Associated Company;

          2.6.2  the benefits to the Participants under the Scheme shall not
                 form part of their wages or remuneration or count as pay or
                 remuneration for pension or other purposes;

          2.6.3  the grant of Options to a Participant is a matter entirely
                 separate from any pension right or entitlement he may have and
                 from his terms or conditions of employment and participation in
                 the Scheme shall in no respect whatever affect his pension
                 rights or entitlements or terms or conditions of employment and
                 in particular (but without limiting the generality of the
                 foregoing) any Participant who ceases to be an employee of the
                 company in the Group shall not be entitled to any compensation
                 for any loss of any right or benefit or prospective right or
                 benefit under the Scheme which he might otherwise have enjoyed
                 whether such compensation is claimed by way of damages for
                 wrongful dismissal or other breach of contract or by way of
                 compensation for loss of office or otherwise howsoever and
                 notwithstanding that he may have been dismissed wrongfully or
                 unfairly (within the meaning of the Employment Rights Act
                 1996).

                                       5
<PAGE>

     2.7  An Option shall be personal to the Participant and shall not be
          assignable and any purported assignment, transfer, charge disposal or
          dealing with the rights or interests of the Participant under the
          Scheme shall render the Option void. However on the death of a
          Participant, an Option shall be capable of being exercised by his
          legal personal representatives in accordance with the provisions of
          Rule 4.

     2.8  No Option shall be granted to any person who is precluded from
          participating in the Scheme by virtue of paragraph 8 of Schedule 9 to
          the Act.

3    LIMITATIONS

     3.1  The number of Shares which may be allocated under the Scheme on any
          day will not exceed 10% of the ordinary share capital of the Company
          in issue immediately before that day, when added to the total number
          of Shares which have been allocated in the previous ten years under
          the Scheme and any other employee share scheme adopted by the Company.

     3.2  The number of Shares which may be allocated under the Scheme on any
          day will not exceed 5% of the ordinary share capital of the Company in
          issue immediately prior to that day, when added to the total number of
          shares which have been allocated in the previous five years under the
          Scheme and any other employee share scheme adopted by the Company.

     3.3  The number of Shares which may be allocated under the Scheme on any
          day will not exceed 5% of the ordinary share capital of the Company in
          issue immediately prior to that day, when added to the total number of
          shares which have been allocated in the previous five years under the
          Scheme and any other executive share scheme adopted by the Company.

     3.4  The number of Shares which may be allocated under the Scheme on any
          day in the four years commencing on 21 July 1998 will not exceed 2.5%
          of the ordinary share capital of the Company in issue immediately
          prior to that day, when added to the total number of Shares which have
          been allocated under the Scheme and any other executive share scheme
          adopted by the Company.

     3.5  Where the right to acquire Shares was release or lapsed without being
          exercised the shares concerned will be ignored when calculating the
          limits in this Rule.

     3.6  Allocate means in relation to any share option scheme the placing of
          unissued Shares under option and in relation to other types of
          employee share scheme the issue and allotment of Shares.

     3.7  For the avoidance of doubt Shares issued to a trustee or trustees of a
          trust for the benefit of those persons named in Section 743 Companies
          Act 1985 established by the Company or any Subsidiary for the purposes
          of this Scheme shall be included in the limits set out in Rule 3.1 to
          3.6 inclusive.

                                        6
<PAGE>

     3.8  The number of Shares over which an Option may be granted to any
          eligible Employee on any Date of Grant shall be limited and take
          effect so that

          3.8.1  the aggregate market values at the relevant dates of grant of
                 Shares over which options have been granted and are outstanding
                 at any time under the Scheme and under any other Approved
                 Scheme adopted by the Company or by any Associated Company
                 shall not exceed (pounds) 30,000 or such other limit as shall
                 be stated from time to time in paragraph 28(1) of Schedule 9 to
                 the Act; and

          3.8.2  the aggregate market values at the relevant dates of grant of
                 Shares over which options have been granted and not exercised
                 or lapsed during the period of ten years ending on the relevant
                 Date of Grant under the Scheme and any other employee share
                 option scheme operated by the Company (other than a savings
                 related share option scheme) shall not exceed four times the
                 aggregate of the Eligible Employee's annual basic rate of pay
                 as at the relevant Date of Grant and any fluctuating emoluments
                 paid to him during the proceeding twelve months provided that
                 Options may not be granted to replace Options which have
                 previously been exercised unless, over the two to three years
                 preceding the re-grant, the Directors are satisfied that the
                 Company has achieved a sustained improvement in performance.

     3.9  No Option may be granted later than ten years after this Scheme is
          adopted by the Company in general meeting.

4    EXERCISE AND LAPSE OF OPTIONS

     4.1  Subject to Rule 4.2 and to any conditions attached to the Option
          pursuant to Rule 2.2, and Option shall be capable of being exercised
          in accordance with the provisions of Rule 5 following the earliest of:

          4.1.1  the expiry of three years from its Date of Grant;

          4.1.2  the Participant ceasing to be in Employment by reason of his
                 death, injury, disability, Retirement or Redundancy;

          4.1.3  the Participant ceasing to be in Employment by reason that his
                 Employment is in a company of which the Company ceases to have
                 Control, or it relates to a business or part of a business
                 which is transferred to a person who is neither an Associated
                 Company nor a company of which the Company has Control;

          4.1.4  the date on which an Option becomes exercisable pursuant to
                 Rule 7 or Rule 8; or

          4.1.5  the Participant ceasing to be in Employment for any reason
                 other than those reasons comprised in rule 4.1.2 or Rule 4.1.3
                 if an to the extent that the Directors in their absolute
                 discretion so determine within 30 days of such cessation;

                                       7
<PAGE>

               provided that a Participant shall not be permitted to exercise an
               Option at any time when he is precluded from participating in the
               Scheme by virtue of paragraph 8 of Schedule 9 to the Act.

     4.2  An Option shall lapse (to the extent that it has not previously been
          exercised) upon the earliest of the following:

          4.2.1  the expiry of ten years from its Date of Grant;

          4.2.2  one year from the date of the Participant's death;

          4.2.3  in the case of a Participant who ceases to be in Employment by
                 reason of Retirement, the expiry of the latest of one year from
                 the date of cessation of Employment, three and a half years
                 from the Date of Grant and three and a half years from the date
                 of a previous exercise prior to cessation which qualified for
                 relief from income tax;

          4.2.4  in the case of a Participant who ceases to be in Employment by
                 reason of any instance specifued in Rule 4.1.2 or Rule 4.1.3
                 (other than death), the Expiry of the latest of one year from
                 the date of cessation of Employment, three and a half years
                 from the Date of Grant and three and a half years from the date
                 of a previous exercise prior to cessation which qualified for
                 relief from income tax;

          4.2.5  in the case of a Participant who ceases to be in Employment
                 otherwise than by reason of Retirement or any instance
                 specified in Rule 4.1.2 or Rule 4.1.3, either the date of
                 cessation of Employment or such other date as the Directors
                 shall decide being a date not after the latest of one year from
                 the date of cessation of Employment, three and a half years
                 from the Date of Grant and three and a half years from the date
                 of a previous exercise prior to cessation which qualified for
                 relief from income tax;

          4.2.6  the date on which an Option lapses pursuant to Rule 7 or Rule
                 8; or

          4.2.7  the date on which a Participant is adjudicated bankrupt or
                 enters into any arrangement or compromise with his creditors.

5    MANNER OF EXERCISE OF OPTIONS

     5.1  In order to exercise an Option the Participant shall give notice in
          writing to the Company in a form prescribed by the Directors stating
          that he wishes to exercise the Option and the number of Shares in
          respect of which he wishes it to be exercised. Such notice shall be
          accompanied by the relevant Option Certificate and the aggregate
          Option Prices of those Shares and shall only be valid if the Option is
          then capable of being exercised.

     5.2  Within thirty days after receipt by the Company of the valid notice
          referred to in Rule 5.1, the Option Certificate and the aggregate
          Option Prices of the relevant Shares, the Company shall allot or
          procure the transfer of the appropriate number of Shares and the
          allottee or transferee shall be entered on

                                       8
<PAGE>

          the register of members of the Company in respect of those Shares. The
          said Shares shall rank in full for all dividends and other rights to
          which a right arises by reference to a Record Date falling on or after
          the date on which the allottee or transferee is entered on the
          register of members of the Company and shall in all other respects
          rank pari passu with the other issued Shares of the same class and
          shall be acquired subject to the Company's articles of association.

     5.3  An Option may be exercised in whole or in part and, subject to Rule 4,
          exercise in part shall not preclude further exercise. If an Option
          remains capable of further exercise the Company shall at the
          Directors' discretion either return the Option Certificate to the
          Participant endorsed to show the number of Shares in respect of which
          it remains capable of exercise or issue to him a new certificate which
          shall contain all the information which would have been contained in
          such endorsed certificate.

     5.4  The Company shall ensure that sufficient Shares are always available
          to satisfy in full all outstanding Options.

     5.5  On the allotment of Shares following the exercise of any Option the
          Company shall as soon as is practicable apply to the London Stock
          Exchange for the relevant Shares to be admitted to the Official List.
          Alternatively, the Company may arrange for a block listing of the
          Shares.

6    VARIATION OF SHARE CAPITAL

     In the event of any variation of share capital by way of a capitalisation
     or rights issue or rights offer or any consolidation, sub-division or
     reduction of capital by the Company or any other issue or reorganisation,
     the number of Shares subject to any Option and the Option Price for each of
     those Shares shall be adjusted in such manner as the Directors shall
     consider to be, in their opinion fair and reasonable (including
     retrospective adjustments) (except in the case of a capitalisation issue)
     provided that:

     6.1  in the case of an Option which may be satisfied on exercise by the
          issue of new Shares, the Option Price for a Share is not reduced below
          its nominal value unless the Directors shall be authorised to
          capitalise from the reserves of the Company a sum equal to the amount
          by which the nominal value of each Share in respect of which the
          Option is exercised exceeds the relevant Option Price and to apply
          such sum in paying up such amount on such Share, and so that on the
          exercise of any Option in respect of which such a reduction shall have
          been made the Directors shall capitalise such sum (if any) and apply
          the same in paying up such amount as aforesaid;

     6.2  no adjustment shall be made without the prior approval of the
          Commissioners of Inland Revenue; and

     6.3  following the adjustment the Shares continue to satisfy the conditions
          specified in paragraphs 10 to 14 inclusive of Schedule 9 to the Act.

                                       9
<PAGE>

7    TAKEOVER OR RECONSTRUCTION

     7.1  If any person obtains Control of the Company as a result of making;

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

          7.1.2  a general offer to acquire all the Shares in the Company which
                 are of the same class as the Shares over which Options have
                 been granted

          then subject to Rule 4.2, a Participant will be entitled to exercise
          his Option within six months following the later of the date on which
          Control of the Company passes and the date on which the offer becomes
          unconditional

     7.2  If any person becomes bound or entitled to acquire shares in the
          company under Sections 428 to 430F of the Companies Act 1985 then,
          subject to Rule 4.2, a Participant will be entitled to exercise his
          Option at any time when that person remains so bound or entitled, on
          the expiry of which period all outstanding Options shall lapse.

     7.3  If under Section 425 of the Companies Act 1985 the Court sanctions a
          compromise or arrangement proposed for the purposes of or in
          connection with a scheme for the reconstruction of the Company or its
          amalgamation with any other company or companies then, subject to Rule
          4.2, a Participant will be entitled to exercise his Options within six
          months of the Court sanctioning the compromise or arrangement, on the
          expiry of which period all outstanding Options shall lapse.

     7.4  If as a result of the events specified in Rule 7.1 or Rule 7.3 any
          company ("the Acquiring Company") has obtained control of the company
          or has become bound or entitled as mentioned in Rule 7.2, a
          Participant may, with the agreement of the Acquiring Company and
          during the appropriate period as defined in paragraph 15(2) of
          Schedule 9 to the Act, release all or part of his rights under the
          Scheme (the "Old Right") in consideration of the grant to him of
          rights (the "New Rights") which satisfy the conditions of paragraph
          15(3) of the said Schedule, and the New Rights shall be deemed to have
          been granted at the time when the old Rights were granted.

     7.5  In the application of the Rules to the New Rights, the term "Company"
          in Rules 4, 5, 6, 7, 8, 9 and 10.5 shall be taken as referring to the
          company over whose share capital the new rights are granted, and the
          other expressions which are defined in Rule 1 hereof and occur in
          those Rules shall be interpreted as though the word "Company" were so
          defined.

     7.6  For the purposes of this Rule 7 (other than Rule 7.4) a person shall
          be deemed to have obtained Control of a company if he and others
          acting in concert with him have together obtained Control of it.

                                       10
<PAGE>

     7.7  The Exercise of an Option pursuant to the preceding provisions of this
          Rule shall be subject to the provisions of Rule 5.

8    VOLUNTARY WINDING-UP

     If a notice of a meeting to consider a resolution for the voluntary
     winding-up of the Company shall be given the Directors shall give notice
     thereof to all Participants and thereupon each Participant shall (subject
     to Rule 4.2) forthwith and until the date of the resolution for
     commencement of the winding up be entitled to exercise any Option held by
     him in the manner provided in Rule 5 but he exercise of any such Option as
     aforesaid shall be conditional upon the said resolution being duly passed
     before the lapse of such Option pursuant to Rule 4.2. Subject as aforesaid
     all Options shall lapse immediately after the commencement of a winding-up
     of the Company.

9    DEMERGERS AND OTHER SIGNIFICANT DISTRIBUTIONS

     Where the Directors become aware that the Company is or is expected to be
     affected by any demerger, divided in specie, super dividend or other
     transaction which, in the opinion of the Directors, would affect the
     current or future value of any Option then the Directors may, acting
     fairly, reasonably, and objectively, in their discretion allow some or all
     Options to be exercisable. The Directors will specify the period of
     exercise of such options and whether the Options will lapse at the end of
     the period.

10   ADMINISTRATION AND AMENDMENT

     10.1 The Scheme may be amended by resolution of the Directors (subject to
          Rules 10.2 and 10.4) provided that no amendment which would be to the
          advantage of Participants may be made without prior approval of the
          Company in general meeting to the provisions relating to:

          10.1.1 eligibility;

          10.1.2 overall limits;

          10.1.3 maximum individual entitlement;

          10.1.4 the grant and exercise of Options and the adjustment thereof
                 following a variation of share capital

          except for minor amendments to benefit the administration of the
          Scheme, to take account of a change in legislation or to obtain or
          maintain favourable tax, exchange control or regulatory treatment for
          present or future Participants or the Group.

     10.2 Notwithstanding Rules 10.1 but subject to Rule 10.3, the Directors may
          by resolution amend the Scheme in any way but only to the extent
          necessary or desirable to secure or maintain the approval of the
          Scheme by the Commissioners of Inland Revenue.

     10.3 No amendment shall have effect until it has been approved by the
          Commissioners of Inland Revenue while it is to retain its approved
          status.

                                       11
<PAGE>

     10.4 Subject as herein otherwise expressly provided the Directors' decision
          on any matter concerning the scheme shall be final and binding.

     10.5 All notices under the Scheme shall be in writing and, if to the
          Company, shall be either delivered in person to the Company Secretary
          or sent to the Company's registered office for the time being (or to
          such other address as the Directors may from time to time specify)
          and, if to a Participant, shall be delivered personally to him at his
          place of work or sent by first-class post to the Participant at the
          address which he shall give in writing to the Company for this
          purpose, or, failing any such address, to his last-known place of
          abode. All notices to the Company, however sent, shall be deemed to be
          served only upon actual receipt thereof by the Company Secretary or
          (as the case may be) at the appropriate address as determined above.
          Notices to the Participant shall, if delivered personally to him at
          his place of work, be deemed to be served upon such delivery and, if
          sent by first-class post to the appropriate address as determined
          above, shall be deemed to be served forty-eight hours after the
          posting to such address of a properly addressed and prepaid envelope
          containing such notice.

     10.6 The Scheme and Options granted under it shall be governed by and
          construed in accordance with English Law and all disputes shall be
          referred for resolution to the courts of England.

11   TERMINATION

     The Directors may at any time resolve to cease making further grants of
     Options under the Scheme but in such event the subsisting rights of
     Participants will not thereby be affected.

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]