Document:

EXHIBIT 10.23

 

TYCO ELECTRONICS LIMITED

 

 

RULES

 

OF

 

TYCO ELECTRONICS LIMITED
SAVINGS RELATED SHARE PLAN

 

 

Approved by a
board/shareholder resolution on: 30 June 2007

 

Approved by HM
Revenue & Customs on: 23 November 2007

 

HM Revenue
& Customs reference no: TLS/LE51/CD/ND

 

 

PricewaterhouseCoopers
LLP

Plumtree Court

London EC4A
4HT

 

	
   

  	
  Tel:

  	
   

  	
  020 7583
  5000

  	
   

  
	
   

  	
  Fax:

  	
   

  	
  020 7822
  4652

  	
   

  
	
   

  	
  Ref:

  	
   

  	
  CD/SQ/HA

  	
   

  

 

 

CONTENTS

 

	
  Rule

  	
   

  	
  Page

  Number

  
	
   

  	
   

  	
   

  
	
  1.

  	
  INTERPRETATION

  	
  3

  
	
   

  	
  1.1.

  	
  Definitions

  	
  3

  
	
   

  	
  1.2.

  	
  Interpretation

  	
  6

  
	
  2.

  	
  INVITATIONS TO APPLY FOR, AND APPLICATIONS FOR, GRANT OF OPTIONS

  	
  7

  
	
   

  	
  2.2.

  	
  Persons
  to whom Invitations must be issued

  	
  7

  
	
   

  	
  2.3.

  	
  Documents which must
  accompany Invitation

  	
  7

  
	
   

  	
  2.4.

  	
  Contents
  of Invitation

  	
  7

  
	
   

  	
  2.5.

  	
  Contents
  of Application Form

  	
  8

  
	
   

  	
  2.6.

  	
  Number
  of Plan Shares applied for in Application

  	
  8

  
	
   

  	
  2.7.

  	
  Making
  of Applications

  	
  9

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  	
  9

  
	
   

  	
  3.1.

  	
  Options granted by
  Company or Trustees

  	
  9

  
	
   

  	
  3.2.

  	
  Persons
  to whom Options must be granted

  	
  9

  
	
   

  	
  3.3.

  	
  Procedure for grant of
  Options and Grant Date

  	
  9

  
	
   

  	
  3.4.

  	
  Contents of Option
  Certificate

  	
  9

  
	
   

  	
  3.5.

  	
  Number
  of Plan Shares over which Options granted

  	
  9

  
	
   

  	
  3.6.

  	
  Scaling
  down of Applications

  	
  9

  
	
   

  	
  3.7.

  	
  Period
  allowed for grant of Options

  	
  10

  
	
   

  	
  3.8.

  	
  Duration of Plan

  	
  10

  
	
   

  	
  3.9.

  	
  Persons to whom Options
  may be granted

  	
  10

  
	
   

  	
  3.10.

  	
  Options non-transferable

  	
  10

  
	
  4.

  	
   

  	
  LIMIT ON AGGREGATE NUMBER OF PLAN SHARES PLACED UNDER OPTION

  	
  11

  
	
   

  	
  4.1.

  	
  Power
  to set limit

  	
  11

  
	
  5.

  	
   

  	
  EXERCISE PRICE

  	
  11

  
	
  6.

  	
   

  	
  EXERCISE OF OPTIONS

  	
  11

  
	
   

  	
  6.1.

  	
  Earliest date for
  exercise of Options

  	
  11

  
	
   

  	
  6.2.

  	
  Latest date for exercise
  of Options

  	
  11

  
	
   

  	
  6.3.

  	
  Persons who may exercise
  Options

  	
  11

  
	
   

  	
  6.4.

  	
  Material
  Interest

  	
  11

  
	
   

  	
  6.5.

  	
  Number
  of Plan Shares acquired on exercise of Options

  	
  11

  
	
   

  	
  6.6.

  	
  Options may be exercised
  in whole or in part

  	
  12

  
	
   

  	
  6.7.

  	
  Procedure for exercise
  of Options

  	
  12

  
	
   

  	
  6.8.

  	
  Issue or transfer of
  Plan Shares on exercise of Options

  	
  12

  
	
   

  	
  6.9.

  	
  Amount
  of repayment under Savings Contract

  	
  12

  
	
  7.

  	
   

  	
  EXERCISE OF OPTIONS IN SPECIAL CIRCUMSTANCES

  	
  12

  
	
   

  	
  7.1.

  	
  Death

  	
  12

  
	
   

  	
  7.2.

  	
  Injury, disability,
  redundancy, retirement etc

  	
  12

  
	
   

  	
  7.3.

  	
  Specified
  Age

  	
  13

  
	
   

  	
  7.4.

  	
  Other
  special circumstances

  	
  13

  
	
   

  	
  7.5.

  	
  Office
  or employment in Group Company

  	
  13

  
	
   

  	
  7.6.

  	
  Termination
  of Savings Contract

  	
  13

  
	
   

  	
  7.7.

  	
  Meaning
  of ceasing to be in Relevant Employment

  	
  13

  
	
   

  	
  7.8.

  	
  Interaction of Rules

  	
  14

  
	
  8.

  	
   

  	
  TAKEOVER, RECONSTRUCTION, AMALGAMATION OR WINDING-UP OF COMPANY

  	
  14

  
	
   

  	
  8.1.

  	
  General offer for, or
  acquisition of, Company

  	
  14

  
	
   

  	
  8.2.

  	
  Compulsory acquisition
  of Company

  	
  14

  
	
   

  	
  8.3.

  	
  Reconstruction or
  amalgamation of Company

  	
  14

  
	
   

  	
  8.4.

  	
  Winding-up of Company

  	
  15

  
	
   

  	
  8.5.

  	
  Shares
  subject to Options ceasing to be Plan Shares

  	
  15

  
	
   

  	
  8.6.

  	
  Meaning of “obtains
  Control of the Company”

  	
  15

  
	
   

  	
  8.7.

  	
  Notification of Option
  Holders

  	
  15

  
	
  9.

  	
  EXCHANGE OF OPTIONS

  	
  15

  

 

 

	
   

  	
  9.1.

  	
  Circumstances in which
  Exchange can occur

  	
  15

  
	
   

  	
  9.2.

  	
  Period allowed for
  exchange of Options

  	
  16

  
	
   

  	
  9.3.

  	
  Meaning of “equivalent”

  	
  16

  
	
   

  	
  9.4.

  	
  Grant Date of New Option

  	
  16

  
	
   

  	
  9.5.

  	
  Application of Plan to
  New Option

  	
  16

  
	
  10.

  	
   

  	
  LAPSE OF OPTIONS

  	
  17

  
	
  11.

  	
   

  	
  ADJUSTMENT OF OPTIONS ON REORGANISATION

  	
  17

  
	
   

  	
  11.1.

  	
  Power to adjust Options

  	
  17

  
	
   

  	
  11.2.

  	
  Exercise Price

  	
  17

  
	
   

  	
  11.3.

  	
  Capitalisation of
  reserves

  	
  17

  
	
   

  	
  11.4.

  	
  HM
  Revenue & Customs approval

  	
  18

  
	
   

  	
  11.5.

  	
  Notification of Option
  Holders

  	
  18

  
	
  12.

  	
   

  	
  ISSUE AND AVAILABILITY OF PLAN SHARES

  	
  18

  
	
   

  	
  12.1.

  	
  Rights attaching to Plan
  Shares

  	
  18

  
	
   

  	
  12.2.

  	
  Availability of Plan
  Shares

  	
  18

  
	
  13.

  	
   

  	
  RELATIONSHIP OF PLAN TO CONTRACT OF EMPLOYMENT

  	
  18

  
	
   

  	
  13.1.

  	
  Contractual Provisions

  	
  18

  
	
  14.

  	
   

  	
  ADMINISTRATION OF PLAN

  	
  19

  
	
   

  	
  14.1.

  	
  Responsibility for
  administration

  	
  19

  
	
   

  	
  14.2.

  	
  Grantor’s decision final
  and binding

  	
  19

  
	
   

  	
  14.3.

  	
  Trustees to consult with
  Board

  	
  19

  
	
   

  	
  14.4.

  	
  Provision of information

  	
  19

  
	
   

  	
  14.5.

  	
  Cost of Plan

  	
  19

  
	
   

  	
  14.6.

  	
  Establishment of
  separate plans for overseas territories

  	
  19

  
	
   

  	
  14.7.

  	
  Data protection

  	
  20

  
	
  15.

  	
   

  	
  AMENDMENT OF PLAN

  	
  20

  
	
   

  	
  15.1.

  	
  Power to amend Plan

  	
  20

  
	
   

  	
  15.2.

  	
  HM
  Revenue & Customs approval of amendments

  	
  20

  
	
   

  	
  15.3.

  	
  Rights of existing
  Option Holders

  	
  20

  
	
   

  	
  15.4.

  	
  Notification of Option
  Holders

  	
  20

  
	
  16.

  	
   

  	
  NOTICES

  	
  20

  
	
   

  	
  16.1.

  	
  Notice by Grantor

  	
  20

  
	
   

  	
  16.2.

  	
  Deceased Option Holders

  	
  20

  
	
   

  	
  16.3.

  	
  Notice to Grantor

  	
  21

  
	
   

  	
  16.4.

  	
  Option Certificate and
  Notice of Option

  	
  21

  
	
  17.

  	
   

  	
  GOVERNING LAW AND JURISDICTION

  	
  21

  
	
   

  	
  17.1.

  	
  Plan governed by English
  law

  	
  21

  
	
   

  	
  17.2.

  	
  English courts to have
  jurisdiction

  	
  21

  
	
   

  	
  17.3.

  	
  Jurisdiction agreement
  for benefit of Company

  	
  21

  
	
   

  	
  17.4.

  	
  Option Holder deemed to
  submit to such jurisdiction

  	
  21

  

 

 

1.                              INTERPRETATION

 

1.1.                    Definitions

 

In this Plan, unless the context otherwise
requires, the following words and expressions have the following meanings:

 

1.1.1.                     Acquiring Company
means a company (including a New Holding Company) which obtains Control of the
Company in the circumstances referred to in Rule 8.1, 8.2 or 8.3 (reading the
reference in Rule 8.3 to “proposes to obtain” as “obtains”);

 

1.1.2.                     Acting In Concert has
the meaning given to that expression in The City Code on Takeovers and Mergers
in its present form or as amended from time to time;

 

1.1.3.                     Adoption Date means
the date on which the Plan is adopted by the Board;

 

1.1.4.                     Applicant means an Eligible Employee who
applies for the grant of an Option;

 

1.1.5.                     Application means an application for the grant of an Option;

 

1.1.6.                     Application
Form means the
form referred to in Rule 2.3 on which an application for the grant of an Option
is made;

 

1.1.7.                     Approval Date means the date on which the Plan is
approved by HM Revenue & Customs under Schedule 3;

 

1.1.8.                     Associated
Company  has the meaning given to that expression by paragraph 47 of Schedule
3 or, where the context requires, paragraph 35(4) of Schedule 3;

 

1.1.9.                     Board means the board
of directors of the Company or a duly authorised committee thereof;

 

1.1.10.               Bonus Date  means

 

(a)                                  in
the case of a three year Savings Contract, the earliest date on which a
Standard Bonus would be payable under the Savings Contract; and

 

(b)                                 in
the case of a five year Savings Contract, the earliest date on which a Standard
Bonus or a Maximum Bonus would be payable under the Savings Contract, according
to whether, for the purpose of determining the number of Plan Shares over which
the Option linked to the Savings Contract was granted, the repayment under the
Savings Contract is to be taken as including the Standard Bonus (or no bonus)
or the Maximum Bonus, respectively;

 

1.1.11.               Close Company
has the meaning given to that expression by section 414(1) of ICTA 1988, and
paragraph 11(4) of Schedule 3;

 

1.1.12.               Company means Tyco
Electronics Limited incorporated in Bermuda under company number {CoRefNo},
being the scheme organiser for the purposes of paragraph 2(2) of Schedule 3;

 

1.1.13.               Consortium has the meaning given to that word by paragraph
48(2) of Schedule 3;

 

1.1.14.               Constituent Company means the Company or a
company which is a Subsidiary and which has been nominated by the Board to
participate in the Plan from time to time;

 

3

 

1.1.15.               Continuous Employment has
the meaning given by the Employment Rights Act 1996:

 

1.1.16.               Control has the
meaning given to that word by section 840 of ICTA 1988;

 

1.1.17.               Eligible Employee
means an individual who is:

 

(a)                                  an
employee (other than a director) of a Constituent Company; or

 

(b)                                 a
director of a Constituent Company who is contracted to work at least 25 hours
per week for the Group (exclusive of meal breaks);

 

and who, in
either case:

 

(i)                                     is not eligible solely by reason that he is a non-executive director
of a Constituent Company;

 

(ii)                                  has earnings in respect of his office or employment which are (or
would be if there were any) general earnings to which section 15 or 21 of ITEPA
2003 applies ;

 

(iii)                               has at the Grant Date such period of Continuous Employment as a
director or employee, not exceeding five years, as the Grantor determines for
the purpose of an issue of Invitations;

 

(iv)                              has not given or been given notice to terminate his employment
within the Group; and

 

(v)                                 does not have at the Grant Date, and has not had during the
preceding twelve months, a Material Interest in a Close Company which is the
Company or a company which has Control of the Company or a member of a
Consortium which owns the Company; or

 

(c)                                  a
director (other than a non executive director) or employee of a Constituent
Company nominated by the Grantor to be an Eligible Employee who is not
prohibited from participating in the Plan by sub paragraph (v) above;

 

1.1.18.               Employees’ Share Scheme has the meaning set out in section 743 of the Companies Act 1985 or
the corresponding section in the Companies Act 2006;

 

1.1.19.               Exercise Price means
the amount per Plan Share payable on the exercise of an Option determined in
accordance with Rule 5;

 

1.1.20.               Grant Date means the
date on which an Option is granted to an Eligible Employee determined in
accordance with Rule 3.3;

 

1.1.21.               Grantor means

 

(a)                                  in
relation to an Option granted by the Company, the Board; and

 

(b)                                 in
relation to an Option granted by the Trustees, the Trustees;

 

1.1.22.               Group means the Company and all Subsidiaries and Associated Companies of the Company and “Group Member” shall be construed accordingly;

 

1.1.23.               ICTA 1988 means the
Income and Corporation Taxes Act 1988;

 

4

 

1.1.24.               Invitation means an invitation to apply for the
grant of an Option issued under Rule 2.2;

 

1.1.25.               Invitation Date means the date on which an Invitation
is issued;

 

1.1.26.               ITEPA 2003 means the
Income Tax (Earnings and Pensions) Act 2003;

 

1.1.27.               ITTOIA 2005 means the
Income Tax (Trading and Other Income) Act 2005;

 

1.1.28.               Key Feature means a
provision of the Plan which is necessary in order to meet the requirements of
Schedule 3;

 

1.1.29.               Market Value means

 

(a)                                  if
at the relevant time Plan Shares are listed on the New York Stock Exchange (or
any other recognised investment exchange within the meaning of section 841 of
ICTA 1988), the closing quotation of a Plan Share (as derived from the New York
Stock Exchange or the list appropriate to such other exchange or market) for
the trading day immediately preceding the Invitation Date; or

 

(b)                                 if at
the relevant time Plan Shares are not so listed, the market value of a Plan
Share as determined in accordance with Part VIII of the Taxation of Chargeable
Gains Act 1992 and agreed in advance by the Grantor with HM Revenue &
Customs Shares & Assets Valuation on the Invitation Date or such earlier
date or dates as may be agreed with HM Revenue & Customs;

 

1.1.30.               Material Interest has the meaning given to
that expression by paragraphs 11 and 12 to 16 of Schedule 3;

 

1.1.31.               Maximum Bonus means
the bonus which is payable under a five year Savings Contract, at the earliest,
seven years after the starting date of the Savings Contract;

 

1.1.32.               Minimum Monthly Savings Amount means in relation to each Invitation, the minimum monthly saving
which may be made by an Option Holder as determined by the Board in accordance
with paragraph 25(3)(b) of Schedule 3 being not less than £5 (or such other
minimum savings amount specified from time to time by HM Treasury in their
Save-As-You-Earn prospectus) nor more than £10 (or such other amount as may be
permitted from time to time under paragraph 25(3)(b) of Schedule 3);

 

1.1.33.               New Holding Company
means a company which obtains Control of the Company where 90% or more of the
New Holding Company’s ordinary shares are held in substantially the same
proportions by substantially the same persons who previously held the Company’s
ordinary shares;

 

1.1.34.               New Option means an
option granted by way of exchange under Rule 9.1;

 

1.1.35.               New Plan Shares means
the shares subject to a New Option;

 

1.1.36.               New York Stock Exchange means the New York Stock Exchange or any successor body;

 

1.1.37.               Notice of Exercise
means the notice given in respect of the exercise of an Option under Rule 6.7;

 

1.1.38.               Option means a right
to acquire Plan Shares granted under the Plan;

 

5

 

1.1.39.               Option Certificate
means the deed or statement under which an Option is granted in accordance with
Rule 3.3;

 

1.1.40.               Option Holder means an
individual who holds an Option or, where the context permits, his legal
personal representatives;

 

1.1.41.               Plan means Tyco
Electronics Limited Savings Related Share Plan{PLANNAME} in its present form or
as amended from time to time;

 

1.1.42.               Plan Shares means
ordinary shares in the capital of the Company (or any shares representing them)
which satisfy the conditions in paragraphs 18 to 22 of Schedule 3;

 

1.1.43.               Relevant Employment means  employment with any Group
Member;

 

1.1.44.               Reorganisation means
any variation in the share capital of the Company, including but without
limitation a capitalisation issue, rights issue, rights offer or bonus issue
and a sub-division, consolidation or reduction in the capital of the Company but
excluding a capitalisation issue in substitution for or as an alternative to a
cash dividend;

 

1.1.45.               Rules mean the rules
of the Plan;

 

1.1.46.               Savings Contract means a contract under a
certified contractual savings scheme within the meaning of section 703 of ITTOIA  2005 which has been approved by HM Revenue
& Customs for the purpose of Schedule 3;

 

1.1.47.               Schedule 3 means
Schedule 3 to ITEPA 2003;

 

1.1.48.               Specified Age  means 65 years;

 

1.1.49.               Standard Bonus means the
earliest bonus which is payable under a Savings Contract;

 

1.1.50.               Subsidiary means a
company which is a subsidiary of the Company within the meaning of section 736
of the Companies Act 1985, or the corresponding section in the Companies Act
2006, over which the Company has Control;

 

1.1.51.               Trustees means the
trustees of any trust created by a Group Member which, when taken together with
the Plan, constitutes an Employees’ Share Scheme;

 

1.2.                            Interpretation

 

In the Plan, unless otherwise specified:

 

1.2.1.                     the contents and rule headings are inserted for ease of reference
only and do not affect the interpretation of the Plan;

 

1.2.2.                     a reference to a Rule is a reference to a rule of the Plan;

 

1.2.3.                     save as provided for by law and subject to Rule 16.4 a reference to
writing includes any mode of reproducing words in a legible form and reduced to
paper or electronic format or communication including, for the avoidance of
doubt, correspondence via e-mail;

 

1.2.4.                     the singular includes the plural and vice versa
and the masculine includes the feminine;

 

6

 

1.2.5.                     a reference to a statutory provision includes any statutory
modification, amendment or re-enactment thereof; and

 

1.2.6.                     the Interpretation Act 1978 applies to the Plan in the same way as
it applies to an enactment.

 

2.                                     INVITATIONS TO APPLY FOR, AND APPLICATIONS FOR, GRANT OF
OPTIONS

 

2.1.                           Announcement
of intention to issue Invitations by Board or Trustees

 

The Board or the
Trustees may, in their absolute discretion, from time to time, announce their
intention to issue Invitations in accordance with this Rule 2 to Eligible
Employees to apply for the grant of Options.

 

2.2.                            Persons
to whom Invitations must be issued

 

If the Grantor
announces its intention to issue Invitations, it shall issue an Invitation to
every person who is, or will on the Grant Date be, an Eligible Employee.

 

2.3.                            Documents which must accompany
Invitation

 

An Invitation shall
be accompanied by:

 

2.3.1.                     an Application Form to be used by the
recipient of the Invitation to apply for the grant of the Option referred to in
the Invitation and to apply to enter into a Savings Contract approved by the
Grantor for the purpose of that issue of Invitations and linked to the Option;
and

 

2.3.2.                     a copy of the Rules.

 

2.4.                            Contents
of Invitation

 

An Invitation shall
state:

 

2.4.1.                     the date, being not less than 14 nor
more than 21 days after the date of issue of the Invitation, by which the
recipient of the Invitation must submit an Application;

 

2.4.2.                     the Minimum Monthly Savings Amount
under the Savings Contract linked to the Option referred to in the Invitation;

 

2.4.3.                     the Exercise Price under the Option
referred to in the Invitation or the method by which the Exercise Price will be
determined and notified to Eligible Employees;

 

2.4.4.                     the maximum permitted aggregate
monthly savings contribution under the Savings Contract linked to the Option
referred to in the Invitation taken together with savings contributions by the
Applicant under any other savings contract linked to any other Option or option
granted under any other SAYE option scheme approved by HM Revenue & Customs
under Schedule 3, being the lesser of £250 (or such other amount as may be
permitted from time to time under paragraph 25(3)(a) of Schedule 3) and such
other amount (being a multiple of £1 and not less than £5 (or such other
minimum savings amount specified from time to time by HM Treasury in their
Save-As-You-Earn prospectus)) as the Board may determine for the purpose of
that issue of Invitations;

 

7

 

2.4.5.                     whether an Applicant must enter into a
three year or a five year Savings Contract or may choose either;

 

2.4.6.                     whether, for the purpose of
determining the number of Plan Shares over which the Option referred to in the
Invitation is to be granted, the repayment under the Savings Contract linked to
the Option must be taken as including the Maximum Bonus, the Standard Bonus or
no bonus or whether the recipient of the Invitation may choose any of these;
and

 

2.4.7.                     the maximum total number of Plan
Shares, if any, set by the Board under Rule 4.1 over which Options will be
granted in response to that issue of Invitations.

 

Subject to this Rule 2,
an Invitation shall be in such form as the Grantor may determine from time to
time.

 

2.5.                            Contents
of Application Form

 

An Application Form
shall require an Applicant to state:

 

2.5.1.                     the monthly savings contribution
(being a multiple of £1 and not less than £5 (or such other minimum savings
amount specified from time to time by HM Treasury in their Save-As-You-Earn
prospectus)) which he wishes to make under the Savings Contract linked to the
Option referred to in the Invitation;

 

2.5.2.                     that his proposed monthly savings
contribution, when added to any monthly savings contributions then being made
by him under any other Savings Contract linked to an Option or to an option
granted under any other SAYE option scheme approved by HM Revenue & Customs
under Schedule 3, will not exceed the maximum permitted aggregate monthly
savings contribution specified in the Invitation;

 

2.5.3.                     where appropriate, whether he wishes
to enter into a three or five year Savings Contract, and, in the case of a five
year Savings Contract, whether he wishes it to be linked to the Maximum Bonus
or the Standard Bonus; and

 

2.5.4.                     where appropriate, whether, for the
purpose of determining the number of Plan Shares over which the Option referred
to in the Invitation is to be granted, he wishes the repayment under the
Savings Contract linked to the Option to be taken as including a bonus or no
bonus;

 

and shall authorise
the Grantor to enter on the Application Form, on behalf of the Applicant, such
monthly savings contribution, not exceeding the maximum stated on the
Application Form, as the Grantor determines under Rule 3.6.

 

Subject to this Rule 2,
an Application Form shall be in such form as the Grantor may determine from
time to time.

 

2.6.                            Number
of Plan Shares applied for in Application

 

An Application shall
be deemed to be for the grant of an Option over the maximum whole number of
Plan Shares which may be acquired at the Exercise Price out of the expected
repayment (including any bonus where permitted under Rule 2.4.6 and requested
by the Applicant pursuant to Rule 2.5.4) under the Savings Contract linked to
the Option at the applicable Bonus Date.

 

8

 

2.7.                            Making
of Applications

 

The recipient of an
Invitation who wishes to apply for the grant of the Option referred to in the
Invitation shall submit to the Grantor, within the period specified in the
Invitation, a duly completed Application Form.

 

3.                                      GRANT OF OPTIONS

 

3.1.                            Options granted by Company or
Trustees

 

The Company or the Trustees may from time
to time grant Options to Eligible Employees.

 

3.2.                            Persons
to whom Options must be granted

 

The Grantor shall
grant the Option referred to in each Invitation in respect of which the Grantor
has received a valid Application and, where Rule 3.6.4 applies, which has been
selected by lot.

 

3.3.                            Procedure for grant of Options
and Grant Date

 

The Grantor shall grant an Option by
passing a resolution. The Grant Date shall be the date on which the Grantor
passes the resolution or such later date as is specified in the resolution and allowed by Rules 3.7 and 3.8. The
grant of an Option or Options shall be evidenced by a deed executed by or on
behalf of the Grantor. The deed or a statement providing details of the grant
shall be issued to each Applicant who has been granted an Option as soon as
reasonably practicable following the grant of the Option.

 

3.4.                            Contents of Option Certificate

 

An Option Certificate shall state:

 

•                                          the Grant Date;

 

•                                          the number of Plan Shares subject to
the Option;

 

•                                          the Exercise Price; and

 

•                                          the Bonus Date, being the date on
which the Option will ordinarily become exercisable.

 

Subject thereto, an
Option Certificate shall be in such form as the Board may determine from time
to time.

 

3.5.                            Number
of Plan Shares over which Options granted

 

An Option shall be
granted over the number of Plan Shares for which the Applicant is deemed under
Rule 2.6 or 3.6, as appropriate, to have applied.

 

3.6.                            Scaling
down of Applications

 

If the Grantor receives Applications for
the grant of Options over a number of Plan Shares in excess of any of the
limits in Rule 4, it shall, to the extent necessary to eliminate the excess,
take the following steps in the following order or such other steps as it may
agree in advance with HM Revenue & Customs:

 

9

 

3.6.1.                     first, for the purpose of determining
the number of Plan Shares over which the Option referred to in an Invitation is
to be granted, it shall take the repayment under the Savings Contract linked to
the Option as including the Standard Bonus instead of the Maximum Bonus;

 

3.6.2.                     secondly, it shall take the repayment
under the Savings Contract linked to the Option as including no bonus instead
of the Standard Bonus;

 

3.6.3.                     thirdly, it shall reduce pro rata the
excess over £5 (or such other minimum savings amount specified from time to
time by HM Treasury in their Save-As-You-Earn prospectus), or such greater
amount as the Grantor may determine, of the monthly savings contribution
selected by each Applicant;

 

3.6.4.                     fourthly, it shall select Applications
by lot and each Application shall be deemed to be for a monthly savings
contribution of £5 (or such other minimum savings amount specified from time to
time by HM Treasury in their Save-As-You-Earn prospectus) only with the
repayment under the Savings Contract linked to the Option taken as including no
bonus.

 

Each Application
shall be deemed to have been withdrawn or amended accordingly and the Grantor
shall amend each Application Form to reflect any reduction in the bonus or the
monthly savings contribution resulting therefrom.

 

For the purpose of
applying this Rule 3.6, if an Applicant has made multiple Applications, the
Applications shall be treated as a single Application and the monthly savings
contributions applied for in the Applications shall be aggregated.

 

3.7.                            Period
allowed for grant of Options

 

An Option may be
granted only during the period of thirty days beginning on the earliest of the
dates referred to in the definition of “Market Value” and used for the purpose
of determining the Exercise Price or, if Rule 3.6 applies, during the period of
forty two days beginning on the earliest of such dates.

 

3.8.                            Duration of Plan

 

An Option may not be granted

 

3.8.1.                     earlier than the Approval Date; nor

 

3.8.2.                     more than ten years after the Adoption Date.

 

3.9.                            Persons to whom Options may be
granted

 

The Grantor may not grant an Option to an
individual who is not an Eligible Employee on the Grant Date.

 

3.10.                     Options non-transferable

 

An Option shall be personal to the Eligible
Employee to whom it is granted and, subject to Rule 7.1, shall not be capable
of being transferred, charged or otherwise alienated and shall lapse
immediately if the Option Holder purports to transfer, charge or otherwise
alienate the Option.

 

10

 

4.                                     LIMIT ON AGGREGATE NUMBER OF PLAN SHARES PLACED UNDER
OPTION

 

4.1.                            Power to
set limit

 

The Board may, in its
absolute discretion, from time to time set a maximum limit on the total number
of Plan Shares which may be placed under Option under the Plan in response to
an issue of Invitations (but no such limit shall invalidate any Option granted
prior to such limit being set).

 

5.                                      EXERCISE PRICE

 

The Exercise Price
shall be determined by the Board and may be any price but shall not be less
than the higher of:

 

(a)                                  eighty percent of the Market Value of
a Plan Share; and

 

(b)                                 in the case of any Option which will
be satisfied by the issue of new shares the nominal value of a Plan Share.

 

6.                                      EXERCISE OF OPTIONS

 

6.1.                            Earliest date for exercise of
Options

 

Subject to Rules 7 and 8, an Option may not be
exercised before the Bonus Date.

 

6.2.                            Latest date for exercise of
Options

 

Subject to Rule 7.1,
an Option may not be exercised more than six months after the Bonus Date and if
not exercised by that date shall lapse immediately.

 

6.3.                            Persons who may exercise
Options

 

Subject to Rule 7, an Option may be
exercised only while the Option Holder is in Relevant Employment and if an
Option Holder ceases to be in Relevant Employment, any Option granted to him
shall lapse immediately. This Rule 6.3 shall apply where the Option Holder
ceases to be in Relevant Employment in any circumstances (including, in
particular, but not by way of limitation, where the Option Holder is dismissed
unfairly, wrongfully, in breach of contract or otherwise).

 

6.4.                            Material
Interest

 

An Option may not be
exercised if the Option Holder then has, or has had within the preceding twelve
months, a Material Interest in a Close Company which is the Company or which is
a company which has Control of the Company or which is a member of a Consortium
which owns the Company.

 

6.5.                            Number
of Plan Shares acquired on exercise of Options

 

The number of Plan
Shares which may be acquired on the exercise of an Option shall be limited to
the maximum whole number which may be acquired at the Exercise Price out of the
repayment (including any interest or bonus that has been taken into account in
determining the number of Plan Shares over which the Option was granted)
received by the Option Holder under the Savings Contract linked to the Option.

 

11

 

6.6.                            Options may be exercised in
whole or in part

 

An Option may, to the extent it has become
exercisable, be exercised in whole or in part. If exercised in part, the
unexercised part of the Option shall lapse.

 

6.7.                            Procedure for exercise of
Options

 

6.7.1.                     An Option shall be exercised by the
Option Holder delivering to the Grantor a duly completed Notice of Exercise in
the form from time to time prescribed by the Grantor, specifying the number of
Plan Shares in respect of which the Option is being exercised, and accompanied
by evidence of the termination of the Savings Contract linked to the Option,
payment in full for the Plan Shares (which shall not exceed the repayment,
including any interest or bonus, received by the Option Holder under the linked
Savings Contract) and, if available, the Option Certificate. Such payment may
be made by the Option Holder or by the bank or building society with which the
Savings Contract was made.

 

6.7.2.                     For the avoidance of doubt, the date of exercise of an Option shall
be determined in accordance with Rule 16.3. If payment is made by cheque and
the cheque fails to clear the Option shall be deemed never to have been
exercised.

 

6.8.                            Issue or transfer of Plan
Shares on exercise of Options

 

Subject to any necessary consents and to
compliance by the Option Holder with the Rules, the Grantor shall, as soon as
reasonably practicable and in any event not later than thirty days after the
date of exercise of the Option, issue or transfer to the Option Holder, or
procure the issue or transfer to the Option Holder of, the number of Plan
Shares specified in the Notice of Exercise and shall deliver or procure the
delivery to the Option Holder of a definitive share certificate in respect of
such Plan Shares.

 

6.9.                            Amount
of repayment under Savings Contract

 

For the purpose of
Rules 6.5 and 6.7, the repayment received under a Savings Contract shall
exclude the repayment of any contribution the due date for payment of which
falls after any date on which the Option Holder ceases to be in Relevant
Employment.

 

7.                                      EXERCISE OF OPTIONS IN SPECIAL CIRCUMSTANCES

 

7.1.                            Death

 

Notwithstanding Rules
6.1, 6.2 and 6.3, if an Option Holder dies before the Bonus Date, his personal
representatives shall be entitled to exercise his Options at any time during
the twelve month period after his death. If not so exercised, the Options shall
lapse immediately.

 

Notwithstanding Rules
6.2 and 6.3, if an Option Holder dies during the period of six months after the
Bonus Date, his personal representatives shall be entitled to exercise his
Options at any time during the twelve month period after the Bonus Date. If not
so exercised, the Options shall lapse immediately.

 

7.2.                            Injury, disability, redundancy,
retirement etc

 

Subject to Rule 7.5,
notwithstanding Rules 6.1 and 6.3, if an Option Holder ceases to be in Relevant
Employment by reason of:

 

7.2.1.                     injury or disability;

 

12

 

7.2.2.                     redundancy within the meaning of the
Employment Rights Act 1996;

 

7.2.3.                     retirement on or after reaching the
Specified Age or any other age at which he is bound to retire under the terms
of his contract of employment;

 

7.2.4.                     his office or employment ceasing to be
a Relevant Employment because

 

7.2.4.1.                                                            it is in a company which ceases to be
a member of the Group; or

 

7.2.4.2.                                                            it relates to a business or part of a
business which is transferred to a person who is not a member of the Group

 

he shall be entitled
to exercise his Options at any time during the period of six months after the
date he ceased to be in Relevant Employment except that in the case of
cessation of employment by reason of a circumstance within Rules 7.2.1, 7.2.2
or 7.2.3 occurring within the six month period after an event to which Rule 7.2.4
applied he shall be entitled to exercise his Options within the six month
period after such cessation of employment.

 

7.3.                            Specified
Age

 

If an Option Holder
continues to be employed after the date on which he reaches the Specified Age,
he shall be entitled to exercise his Options at any time during the six month
period thereafter. If not so exercised, the Options shall not lapse but shall
be exercisable or not, as the case may be, in accordance with the rules of the
Plan.

 

7.4.                            Other
special circumstances

 

If an Option Holder
ceases to be in Relevant Employment for a reason other than those referred to
in Rules 7.1 and 7.2 and within three years after the Grant Date, the Option
shall lapse immediately.

 

If an Option Holder
ceases to be in Relevant Employment for a reason other than those referred to
in Rules 7.1 and 7.2 and more than three years after the Grant Date, he shall
be entitled to exercise the Option at any time during the six month period
thereafter. If not so exercised, the Option shall lapse immediately.

 

7.5.                            Office
or employment in Group Company

 

If, at the relevant Bonus Date, an Option
Holder holds an office or employment in a company which is not a Constituent
Company but which is a member of the Group he shall be entitled to exercise his
Options at any time during the six month period thereafter.

 

7.6.                            Termination
of Savings Contract

 

If an Option Holder
gives, or is deemed under the terms of his Savings Contract to have given,
notice that he intends to cease paying contributions under his Savings
Contract, the Option linked to the Savings Contract shall lapse immediately
unless the Option has already become exercisable in accordance with the rules
of the Plan.

 

7.7.                            Meaning
of ceasing to be in Relevant Employment

 

For the purpose of
Rules 6.3, 7.2, 7.4, and 10.1.2, an Option Holder shall not be treated as
ceasing to be in Relevant Employment until he no longer holds any office or
employment with a member of the Group.

 

13

 

7.8.                            Interaction of Rules

 

7.8.1.                     If an Option has become exercisable under Rule 7.2 or 7.3 and,
during the period allowed for the exercise of the Option under Rule 7.2 or 7.3,
the Option Holder dies, the period allowed for the exercise of the Option shall
be the period allowed by Rule 7.1.

 

7.8.2.                     If an Option has become exercisable under Rule 7 and, during the
period allowed for the exercise of the Option under Rule 7, the Option becomes
exercisable under Rule 8 also (or vice versa), the period allowed for the
exercise of the Option shall be the first to determine of the period allowed by
Rule 7 and the period allowed by Rule 8.

 

8.                                     TAKEOVER, RECONSTRUCTION, AMALGAMATION OR WINDING-UP OF
COMPANY

 

8.1.                            General offer for, or
acquisition of, Company

 

Notwithstanding Rule 6.1, if a person other
than a New Holding Company obtains Control of the Company as a result of:

 

8.1.1.                     making 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

 

8.1.2.                     making a general offer to acquire all the shares in the Company of
the same class as the Plan Shares

 

(in either case, other than any shares
already held by him or a person Acting In Concert with him)

 

all Options may be exercised, subject to
Rule 8.2, at any time during the period of six months beginning with the time
when the person making the offer or proposed acquisition (as the case may be)
has obtained Control of the Company and any condition subject to which the
offer or proposed acquisition is made has been satisfied. If not so exercised,
the Options shall lapse at the expiry of the six month period.

 

8.2.                            Compulsory acquisition of
Company

 

Notwithstanding Rule 6.1, if a person,
other than a New Holding Company, becomes entitled to serve a Section 102
Notice to acquire shares in the Company, all Options may be exercised at any
time during the period beginning with the date the person serves a Section 102
Notice and ending seven clear days before the date on which the person ceases
to be entitled to serve such a notice. If not so exercised, the Options shall
cease to be exercisable and shall lapse when the person ceases to be entitled
to serve such a notice.

 

8.3.                            Reconstruction or amalgamation
of Company

 

Notwithstanding Rule 6.1, if a person,
other than a New Holding Company, proposes to obtain Control of the Company in
pursuance of a compromise or arrangement sanctioned by the court under section 101
of the Companies Act 1981 of Bermuda:

 

8.3.1.                     Option Holders may exercise all Options , on the compromise or
arrangement being sanctioned by the court, or within the six month period
following this date;

 

8.3.2.                     if the compromise or arrangement becomes effective, any Options not
so exercised shall cease to be exercisable and shall lapse at the end of such
six month period;

 

14

 

8.3.3.                     an Option which has already become exercisable may be exercised
unconditionally before the court sanction of the compromise arrangement. Any
Option not so exercised shall cease to be exercisable and shall lapse at the
end of such six month period.

 

8.4.                            Winding-up of Company

 

If notice is given of a resolution for the
voluntary winding-up of the Company:

 

8.4.1.                     Option Holders may exercise all Options , on the passing of the
resolution or within the two month period following this date;

 

8.4.2.                     if the resolution is passed, any Options not so exercised shall
lapse immediately;

 

8.4.3.                     an Option which has already become exercisable may be exercised
unconditionally during such period. Any Option not so exercised shall cease to
be exercisable and shall lapse immediately following the passing of the
resolution.

 

8.5.                            Shares
subject to Options ceasing to be Plan Shares

 

If the shares subject
to an Option cease to satisfy the conditions in paragraphs 18 to 22 of Schedule
3:

 

8.5.1.                     the definition of “Plan Shares” shall
be amended by the deletion of the words “which satisfy the conditions in
paragraphs 18 to 22 of Schedule 3”;

 

8.5.2.                     the Grantor shall, as soon as
reasonably practicable, notify HM Revenue & Customs;

 

8.5.3.                     the Option shall continue to exist and
shall continue to be entitled to exemptions from income tax applying to an SAYE
option scheme approved under Schedule 3 subject to any determination by HM
Revenue & Customs to withdraw approval under paragraph 42 of Schedule 3;
and

 

8.5.4.                     the Plan shall continue to exist but,
if HM Revenue & Customs withdraw approval of the Plan under Schedule 3, as
a non HM Revenue & Customs approved plan.

 

8.6.                            Meaning of “obtains Control of
the Company”

 

For the purpose of Rule 8, a person shall
be deemed to have obtained Control of the Company if he and others Acting In
Concert with him have together obtained Control of it.

 

8.7.                            Notification of Option Holders

 

The Grantor shall, as soon as reasonably
practicable, notify each Option Holder of the occurrence of any of the events
referred to in this Rule and explain how this affects his position under the
Plan.

 

9.                                      EXCHANGE OF OPTIONS

 

9.1.                            Circumstances in which
Exchange can occur

 

If the person referred to in Rules 8.1, 8.2
or 8.3, (reading the reference in Rule 8.3 to “proposes to obtain” as “obtains”)
including a New Holding Company, an Option Holder may, at any time during the
period set out in Rule 9.2, by agreement with the Acquiring Company, release
his Option in consideration of the grant to him of a new option which is
equivalent to the Option but which relates to shares in:

 

15

 

9.1.1.                     the Acquiring
Company; or

 

9.1.2.                     a company which has Control of the Acquiring Company; or

 

9.1.3.                     a company which either is, or has Control of, a company which is a
member of a Consortium which owns either the Acquiring Company or a company
having Control of the Acquiring Company.

 

9.2.                            Period allowed for exchange of
Options

 

The period referred to in Rule 9.1 is:

 

9.2.1.                     where Rule 8.1 applies or would apply if the reference in that Rule
to “person” was read as “person including a New Holding Company”, the period
referred to in that Rule;

 

9.2.2.                     where Rule 8.2 applies, the period during which the Acquiring
Company remains so entitled or bound; and

 

9.2.3.                     where Rule 8.3 applies, the period of six months beginning with the
time when the court sanctions the compromise or arrangement.

 

9.3.                            Meaning of “equivalent”

 

The New Option shall not be regarded for
the purpose of this Rule 9 as equivalent to the Option unless:

 

9.3.1.                     the New Plan Shares satisfy the conditions in paragraphs 18 to 22 of
Schedule 3; and

 

9.3.2.                     the New Option will be exercisable in the same manner as the Option
and subject to the provisions of the Plan as it had effect immediately before
the release of the Option;

 

9.3.3.                     the total market value, immediately before the release of the
Option, of the Plan Shares which were subject to the Option is as nearly as may
be equal to the total market value, immediately after the grant of the New
Option, of the New Plan Shares subject to the New Option (market value being
determined for this purpose in accordance with Part VIII of the Taxation of
Chargeable Gains Act 1992); and

 

9.3.4.                     the total amount payable by the Option Holder for the acquisition of
the New Plan Shares under the New Option is as nearly as may be equal to the
total amount that would have been payable by the Option Holder for the
acquisition of the Plan Shares under the Option.

 

9.4.                            Grant Date of New Option

 

The Grant Date of the New Option shall be
deemed to be the same as the Grant Date of the Option.

 

9.5.                            Application of Plan to New
Option

 

In the application of the Plan to the New
Option, where appropriate, references to “Company” and “Plan Shares” shall be
read as if they were references to the company to whose shares the New Option
relates and the New Plan Shares, respectively, save that in the definition of “Board”
the reference to “Company” shall be read as if it were a reference to Tyco
Electronics Limited.

 

16

 

10.                               LAPSE OF OPTIONS

 

An Option shall lapse on the earliest of:

 

10.1.1.               subject
to Rule 7.1, six months after the Bonus Date;

 

10.1.2.               subject
to Rules 7.1, 7.2 and 7.4, the Option Holder ceasing to be in Relevant
Employment;

 

10.1.3.               the
date on which it is provided that the Option shall lapse under Rules 7.1, 7.2
and 7.4 and 8.1 to 8.4;

 

10.1.4.               the
date on which a resolution is passed or an order is made by the court for the
compulsory winding-up of the Company;

 

10.1.5.               the
date on which the Option Holder becomes bankrupt or enters into a compromise
with his creditors generally;

 

10.1.6.               before an Option has become capable of
being exercised, the Option Holder giving notice that he intends to stop paying
monthly contributions, or being deemed under the terms of the Savings Contract
to have given such notice or making an application for the repayment of his
aggregate monthly contributions; and

 

10.1.7.               the
date on which the Option Holder purports to transfer, charge or otherwise
alienate the Option.

 

11.                               ADJUSTMENT OF OPTIONS ON REORGANISATION

 

11.1.                     Power to adjust Options

 

In the event of a Reorganisation, the
number of Plan Shares subject to an Option, the description of the Plan Shares,
the Exercise Price, or any one or more of these, may be adjusted in such manner
as the Board or, where the Trustees are the Grantor, the Trustees and the Board
together determine.

 

11.2.                     Exercise Price

 

Subject to Rule 11.3, no adjustment shall
be made to the Exercise Price which would result in the Plan Shares subject to
an Option being issued directly to the Option Holder at a price per Plan Share
lower than the nominal value of a Plan Share and, if an adjustment would so
result, the Exercise Price shall be the nominal value of a Plan Share.

 

11.3.                     Capitalisation of reserves

 

Notwithstanding Rule 11.2, an adjustment
may be made which would result in the Plan Shares subject to an Option being
issued at a price per Plan Share lower than the nominal value of a Plan Share
if and to the extent that the Board is authorised to capitalise from the Company’s
reserves a sum equal to the amount by which the aggregate nominal value of the
Plan Shares subject to the Options which are adjusted exceeds the aggregate
adjusted Exercise Price under such Options. If such an adjustment is made, on
the subsequent exercise of the Option, the Board shall capitalise such sum and
apply the sum in paying up such excess.

 

17

 

11.4.                     HM
Revenue & Customs approval

 

An adjustment shall
not have effect until the adjustment has been approved by HM Revenue &
Customs.

 

11.5.                     Notification of Option Holders

 

The Grantor shall, as soon as reasonably
practicable, notify each Option Holder of any adjustment made under this Rule 11
and explain how this affects his position under the Plan. The Grantor may call
in for endorsement or cancellation and re-issue any Option Certificate in order
to take account of such adjustment.

 

12.                               ISSUE AND AVAILABILITY OF PLAN SHARES

 

12.1.                     Rights attaching to Plan Shares

 

All Plan Shares issued in respect of exercise
of an Option shall, as to voting, dividend, transfer and other rights,
including those arising on a liquidation of the Company, rank equally in all
respects and as one class with the Plan Shares in issue at the date of such
issue save as regards any rights attaching to such Plan Shares by reference to
a record date prior to the date of such issue.

 

12.2.                     Availability of Plan Shares

 

The Company shall at all times use its
reasonable endeavours to keep available sufficient authorised but unissued Plan
Shares to satisfy the exercise of all Options which the Board has determined
will be satisfied by the issue of Plan Shares (whether directly to the Option
Holder or indirectly via the Trustees).

 

13.                               RELATIONSHIP OF PLAN TO CONTRACT OF EMPLOYMENT

 

13.1.                     Contractual Provisions

 

Notwithstanding any other provision of the
Plan:

 

13.1.1.               the
Plan shall not form part of any contract of employment between any Group Member
and an Eligible Employee;

 

13.1.2.               unless
expressly so provided in his contract of employment, an Eligible Employee has
no right to be granted an Option;

 

13.1.3.               the
benefit to an Eligible Employee of participation in the Plan (including, in
particular but not by way of limitation, any Options held by him) shall not
form any part of his remuneration or count as his remuneration for any purpose
and, for the purposes of his contract of employment, shall not be pensionable;
and

 

13.1.4.               if
an Eligible Employee ceases to be in Relevant Employment, he shall not be
entitled to compensation for the loss of any right or benefit or prospective
right or benefit under the Plan (including, in particular but not by way of
limitation, any Options held by him which lapse by reason of his ceasing to be
in Relevant Employment) whether by way of damages for unfair dismissal,
wrongful dismissal, breach of contract or otherwise.

 

By applying for an Option an Option Holder
is deemed to have agreed to the provisions of this Rule 13.

 

18

 

14.                               ADMINISTRATION OF PLAN

 

14.1.                     Responsibility for administration

 

The Company, and the Grantor where
appropriate, shall be responsible for, and shall have the conduct of, the
administration of the Plan. The Grantor may from time to time make, amend or
rescind regulations for the administration of the Plan provided that such
regulations shall be consistent with the Rules and not cause any of the
provisions of Schedule 3 which are relevant to the Plan to cease to be
satisfied.

 

14.2.                     Grantor’s decision final and binding

 

The decision of the Grantor shall be final
and binding in all matters relating to the administration of the Plan,
including but not limited to the resolution of any dispute concerning, or any
inconsistency or ambiguity in the Rules or any document used in connection with
the Plan.

 

14.3.                     Trustees to consult with Board

 

Where the Trustees have granted, or propose
to grant, an Option, the Trustees shall consult with, and take account of the
wishes of, the Board before making any determination or exercising any power or
discretion under the Plan.

 

14.4.                     Provision of information

 

The Trustees and an Option Holder shall
provide to the Company as soon as reasonably practicable such information as
the Company reasonably requests for the purpose of complying with its
obligations under paragraph 45 of Schedule 3.

 

14.5.                     Cost of Plan

 

The cost of introducing and administering
the Plan shall be met by the Company. The Company shall be entitled, if it
wishes, to charge an appropriate part of such cost to a Subsidiary. The Company
shall also be entitled, if it wishes, to charge to a Subsidiary the opportunity
cost of issuing Plan Shares to an Option Holder employed by the Subsidiary in
relation to his exercise of an Option.

 

14.6.                     Establishment of separate plans for
overseas territories

 

The Company may establish separate plans to
operate in overseas territories or in respect of overseas employees which are
on substantially the same terms as the Plan but which make such modifications
to the terms as are necessary or expedient to take account of local tax,
exchange control or securities laws in any one or more overseas territories (a “Modified
Plan”). Rule 4 shall apply so as to limit the number of Plan Shares which may
be placed under Option under a Modified Plan and Plan Shares placed under an
Option granted under a Modified Plan shall be included for the purpose of the
limit set out in Rule 4.

 

For the avoidance of doubt, such plans
shall not be intended to be subject to HM Revenue & Customs approval under
Schedule 3 and no modifications made in accordance with this clause shall
affect the Plan.

 

19

 

14.7.                    Data protection

 

By applying for an Option, an Option Holder
is deemed to consent to the holding and processing of personal data provided by
the Option Holder to the Company for all purposes relating to the operation of
the Plan.

 

15.                               AMENDMENT OF PLAN

 

15.1.                     Power to amend Plan

 

Subject to Rules 15.2
to 15.3, the Board may from time to time amend the rules of the Plan.

 

15.2.                     HM
Revenue & Customs approval of amendments

 

Save for an amendment
pursuant to Rule 8.5, an amendment to a Key Feature of the Plan shall not have
effect at a time when the Plan is approved by HM Revenue & Customs, until
the amendment has been approved by HM Revenue & Customs under Schedule 3.

 

15.3.                     Rights of existing Option Holders

 

An amendment may not adversely affect the
rights of an existing Option Holder except where the amendment has been
approved by those existing Option Holders who would be adversely affected by
the amendment in such manner as would be required by the Company’s articles of
association (with appropriate changes) if the Plan Shares subject to those
Options which would be so adversely affected had been issued or transferred to
them (so that they had become shareholders in the Company) and constituted a
separate class of shares.

 

15.4.                     Notification of Option Holders

 

The Board shall, as soon as reasonably
practicable, notify each Option Holder of any amendment to the Rules under this
Rule 15 and explain how it affects his position under the Plan.

 

16.                               NOTICES

 

16.1.                     Notice by Grantor

 

Save as provided for by law and subject to
Rule 16.4, any notice, document or other communication given by, or on behalf
of, the Grantor or to any person in connection with the Plan shall be deemed to
have been duly given if delivered to him at his place of work, if he is in
Relevant Employment if sent by e-mail to such e-mail address as may be
specified by him from time to time, or sent through the post in a pre-paid
envelope to the postal address last known to the Company to be his address and,
if so sent, shall be deemed to have been duly given on the date of posting.

 

16.2.                     Deceased Option Holders

 

Save as provided for by law and subject to
Rule 16.4, any notice, document or other communication so sent to an Option
Holder shall be deemed to have been duly given notwithstanding that such Option
Holder is then deceased (and whether or not the Grantor has notice of his
death) except where his personal representatives have established their title
to the satisfaction of the Grantor and supplied to the Grantor an e-mail or
postal address to which notices, documents and other communications are to be
sent.

 

20

 

16.3.                     Notice to Grantor

 

Save as provided for by law and subject to
Rule 16.4, any notice, document or other communication given to the Grantor in
connection with the Plan shall be delivered or sent by post to the Company
Secretary at the Company’s registered office or such other e-mail or postal
address as may from time to time be notified to Option Holders but shall not in
any event be duly given unless and until it is actually received at the
registered office or such e-mail or postal address and shall be deemed to have
been duly given on the date of such receipt.

 

16.4.                     Option Certificate and Notice of Option

 

For the avoidance of doubt, the Option
Certificate and Notice of Option may not be executed or delivered by e-mail or
other such similar electronic communication.

 

17.                               GOVERNING LAW AND JURISDICTION

 

17.1.                     Plan governed by English law

 

The formation, existence, construction,
performance, validity and all aspects whatsoever of the Plan, any term of the
Plan and any Option granted under it shall be governed by English law.

 

17.2.                     English courts to have jurisdiction

 

The English courts shall have jurisdiction
to settle any dispute which may arise out of, or in connection with, the Plan.

 

17.3.                     Jurisdiction agreement for benefit of
Company

 

The jurisdiction agreement contained in
this Rule 17 is made for the benefit of the Company only, which accordingly
retains the right to bring proceedings in any other court of competent
jurisdiction.

 

17.4.                     Option Holder deemed to submit to such
jurisdiction

 

By executing and returning the Option
Certificate to the Grantor, an Option Holder is deemed to have agreed to submit
to such jurisdiction.

 

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Exhibit 10.19    
    

BASE SALARIES OF EXECUTIVE OFFICERS OF THE COMPANY  

        As of October 1, 2007, the following are the base salaries (on an annual basis) of the executive officers of Network Engines, Inc.: 

	Name and Title
 
	 	Base Salary

	Gregory A. Shortell
 President, Chief Executive Officer and Director	 	$	350,000
	

Douglas G. Bryant
 Chief Financial Officer, Treasurer and Secretary	
 	
$	

219,450
	

Richard P. Graber
 Vice President of Engineering and Operations	
 	
$	

205,000
	

Hugh W. Kelly
 Vice President of Worldwide Marketing	
 	
$	

204,875
	

Kevin J. Murphy Jr.
 Chief Technology Officer	
 	
$	

175,950

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Exhibit 10.19

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