Document:

Exhibit 4.10

	
  

  	
  LIMITED LIABILITY PARTNERSHIP

  

 

THE DIAGEO PLC EXECUTIVE

SHARE OPTION PLAN

Amended by
shareholders:  17 October 2006

Amended by the
Routine Business Committee:  7 February
2007

H.M. Revenue &
Customs reference:  X20399

CONTENTS

Part A : Inland Revenue Approved

Rule

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  ELIGIBILITY

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  LIMITS

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  EXERCISE OF OPTIONS

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  TAKEOVER, RECONSTRUCTION AND WINDING-UP

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  VARIATION OF CAPITAL

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  ALTERATIONS

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  MISCELLANEOUS

  	
  9

  
	
   

  	
   

  
	
  Part B:
  Unapproved Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  ELIGIBILITY

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  LIMITS

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  EXERCISE OF OPTIONS

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  CASH EQUIVALENT

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  TAKEOVER, RECONSTRUCTION AND WINDING-UP

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  VARIATION OF CAPITAL

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  ALTERATIONS

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  MISCELLANEOUS

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  INCENTIVE STOCK OPTIONS

  	
  19

  

 

PART A -
Inland Revenue approved

1.                                 DEFINITIONS AND INTERPRETATION

1.1                           In this Plan, unless the
context otherwise requires:-

“the Board”
means the board of directors of the Company or a committee appointed by them;

“the Company”
means Diageo plc (registered in England and Wales No. 23307);

“the Grant
Date” in relation to an option means the date on which the option
was granted;

“Group Member”
means:-

1.1.1                            a Participating Company or
a body corporate which is (within the meaning of section 736 of the Companies
Act 1985) the Company’s holding company or a subsidiary of the Company’s
holding company; or

1.1.2                            a body corporate which is
(within the meaning of section 258 of that Act) a subsidiary undertaking of a
body corporate within paragraph 1.1.1 above and has been designated by the
Board for this purpose;

“the London
Stock Exchange” means London Stock Exchange plc;

“Part A”
of this Plan means the part designed for approval by the Inland Revenue;

“Part B”
of this Plan means the unapproved part of this Plan;

“Participant”
means a person who holds an option granted under this Plan;

“Participating
Company” means the Company or any Subsidiary;

“the Plan”
means the Diageo plc Executive Share Option Plan as herein set out but subject
to any alterations or additions from time to time made pursuant to the Plan;

“Schedule 4”
means Schedule 4 to the Income Tax Act 2003;

“Subsidiary”
means a body corporate which is a subsidiary of the Company (within the meaning
of section 736 of the Companies Act 1985) and of which the Company has control
(within the meaning of section 719 of the Income Tax Act 2003);

“the No. 1 Trust” means the Diageo
Employee Benefit Trust established by deed dated 14 September 1998 between
the Company and Mourant & Co. Trustees Limited;

“the No. 2
Trust” means the Diageo No. 2 Employees’ Benefit Trust established
by deed dated 27th May 1999 between the Company and Hill Street
Trustees Limited;

“the No.3
Trust” means the Diageo No.3 Employees’ Benefit Trust established by
deed dated 10 November 1999 between Diageo Inc and Hill Street Trustees
Limited;

“the Income
Tax Act 2003” means the Income Tax (Earnings and Pensions) Act 2003;

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and expressions not
otherwise defined herein have the same meanings as they have in Schedule 4.

1.2                           Any reference in this Plan
to any enactment includes a reference to that enactment as from time to time
modified, extended or re-enacted.

1.3                           Expressions in italics are
for guidance only and do not form part of this Plan.

2.                                 ELIGIBILITY

2.1                           Subject to sub-rule 2.3
below, a person is eligible to be granted an option under Part A of the Plan if
(and only if) he is a full-time director or qualifying employee of a
Participating Company (excluding any person who is a director of the Company)
who is required to devote the whole or substantially the whole of his working
time to the service of any Participating Company.

2.2                           For the purposes of sub-rule
2.1 above:-

2.2.1                            a person shall be treated
as a full-time director of a
Participating Company if he is obliged to devote to the performance of the
duties of his office or employment with that and any other Participating
Company not less than 25 hours a week;

2.2.2                            a qualifying employee, in relation to a
Participating Company, is an employee of the Participating Company (other than
one who is a director of a Participating Company).

2.3                           A person is not eligible to
be granted an option under Part A of this Plan at any time when he is not
eligible to participate in this Plan by virtue of paragraph 9 of Schedule 4 (material interest in a close company).

3.                                 GRANT OF OPTIONS

3.1                           Subject to Rule 4 below, the
Board may grant an option to acquire, by purchase or subscription, shares in
the Company which satisfy the requirements of paragraphs 16 to 20 of Schedule 4
(fully paid up, unrestricted, ordinary share
capital), upon the terms set out in Part A of this Plan and upon
such other objective terms as the Board may specify, to any person who is
eligible to be granted an option in accordance with Rule 2 above.

3.2                           The price at which shares
may be acquired by the exercise of an option shall be determined by the Board
before the grant thereof, but shall not be less than:-

3.2.1                            if shares of the same class
as those shares are listed in the London Stock Exchange Daily Official List,
the average of the middle-market quotation of shares of that class (as derived
from that List) for the three dealing days immediately preceding the Grant
Date;

3.2.2                            if paragraph 3.2.1 above
does not apply, the market value (within the meaning of Part VIII of the
Taxation of Chargeable Gains Act 1992) of shares of that class, as agreed in
advance for the purposes of this Plan with the Shares Valuation Division of the
Inland Revenue, on the Grant Date (or such other day 

 2
 

as may be agreed in advance with the Inland Revenue and which day shall
not be more than 30 days in advance of the Grant Date).

3.3                           An option may only be
granted:-

3.3.1                            within the period of 6
weeks beginning with -

(a)                     or

(b)                    the date on which Part A of this
Plan is approved by the Inland Revenue under Schedule 4; or

(c)                     the dealing day next following the
date on which the Company announces its results for any period; or

3.3.2                            at any other time when the
circumstances are considered by the Board to be sufficiently exceptional to
justify its grant; and

3.3.3                            within the period of 10
years beginning with the date on which this Plan is adopted by the Company

PROVIDED that no option
may be granted under this Plan during the “close period” as defined in the
Model Code in the London Stock Exchange’s “The Listing Rules” and PROVIDED ALSO
that no options may be granted under Part A of this Plan prior to the date on
which Part A of the Plan is approved by the Inland Revenue under Schedule 4.

3.4                           In the case of options
granted prior to 22 October 2003, before granting an option under the Plan, the
Board shall have entered into an agreement with the trustees of the No. 1
Trust, the trustees of the No. 2 Trust or the trustees of the No.3 Trust
whereby the trustees agree to satisfy any options granted under the Plan.  The Board is not required to enter into such
an agreement (but may, in its absolute discretion, choose to do so) in relation
to options granted on or after 22 October 2003.

3.5                           An option granted under this
Plan to any person:-

3.5.1                            shall not, except as
provided in sub-rule 5.3 below, be capable of being transferred by him; and

3.5.2                            shall lapse forthwith if he
is adjudged bankrupt.

3.6                           The grant of any option
under this Plan shall be subject to obtaining any approval or consent required
under the provisions of the document “The Listing Rules” published by the
London Stock Exchange, of The City Code on Take-overs and Mergers, or of any
regulation or enactment.

4.                                 LIMITS

4.1                           No options shall be granted,
or shares issued otherwise that pursuant to the exercise of an option, in any
year which would, at the time of grant, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options granted
in the ten calendar years ending with that year, or have been issued in that
period otherwise than in pursuance of options, under the Plan or under any
other executive share scheme 

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adopted by the Company to exceed such number as represents 5 per cent
of the ordinary share capital of the Company in issue at that time.

4.2                           No options shall be granted,
or shares issued otherwise that pursuant to the exercise of an option, in any
year which would, at the time of grant, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options granted
in the ten calendar years ending with that year, or have been issued in that
period otherwise than in pursuance of options, under the Plan or under any
other employees’ share scheme adopted by the Company to exceed such number as
represents 10 per cent of the ordinary share capital of the Company in issue at
that time.

4.3                           For the avoidance of doubt,
shares transferred from treasury will be treated as issued for the purposes of
the above limits, unless institutional shareholder guidelines are amended so
that this is no longer required.

4.4                           Prior to granting an option
to any person, the Board may from time to time determine a maximum aggregate
amount payable on exercise of options granted under this Plan to any person
during any period of twelve months, such amount to be determined taking account
of market practice (provided that any grant of options under Part A of this
Plan shall be subject to the provisions of sub-rule 4.5 below).

4.5                           No person shall be granted
options which would, at the time they are granted, cause the aggregate market
value of the shares which he may acquire in pursuance of options granted to him
under Part A of this Plan or under any other share option scheme, not being a
savings-related share option scheme, approved under Schedule 9 to the Income
and Corporation Taxes Act 1988 or under Schedule 4 and established by the
Company or by any associated company of the Company (and not exercised) to
exceed or further exceed £30,000.

4.6                           For the purposes of this
Rule, the market value of the shares in relation to which an option was granted
shall be calculated:-

4.6.1                            in the case of an option
granted under this Plan, as on the days by reference to which the price at
which shares may be acquired by the exercise thereof was determined in
accordance with sub-rule 3.2 above;

4.6.2                            in the case of an option
granted under any other approved scheme, as at the time when it was granted or,
in a case where an agreement relating to the shares has been made under
paragraph 22 of Schedule 4, such earlier time or times as may be provided in
the agreement; and

4.6.3                            in the case of any other
option, as on the day or days by reference to which the price at which shares
may be acquired by the exercise thereof was determined.

4.7                           Any option granted under
this Plan shall be limited and take effect so that the above limits are
complied with.

4.8                           Where any option relating to
unissued shares is released or lapses without being exercised (or the Board
makes arrangements for it to be satisfied by the transfer of 

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existing shares), the shares concerned will
be ignored when calculating the limits in sub-rules 4.1 and 4.2 above.

5.                                 EXERCISE OF OPTIONS

5.1                           The exercise of any option
granted under this Plan shall be effected in the form and manner prescribed by
the Board.

5.2                           Subject to sub-rules 5.3 and
5.4 below and to sub-rules 6.1 and 6.3 below, an option may not be exercised
before the third anniversary of the Grant Date.

5.3                           If any Participant dies, any
option may (and must, if at all) be exercised by his personal representatives
within 12 months after the date of his death provided that his death occurs at
a time when either he is a director or employee of a Group Member or he is
entitled to exercise the option by virtue of sub-rule 5.4 below.

5.4                           If any Participant ceases to
be a director or employee of a Group Member (otherwise than by reason of his
death), the following provisions apply in relation to any option granted to him
under Part A of this Plan:-

5.4.1                            if he so ceases by reason
of injury disability or redundancy (within the meaning of the Employment Rights
Act 1996), or by reason only that his office or employment is in a company
which ceases to be a Group Member, or relates to a business or part of a
business which is transferred to a person who is not a Group Member, the option
may (and subject to sub-rule 5.3 above must, if at all) be exercised within 6
months after his so ceasing;

5.4.2                            if he so ceases by reason
of retirement, the option may (and subject to sub-rule 5.3 above must, if at
all) be exercised within 6 months after his so ceasing;

5.4.3                            if he so ceases for any
other reason, the option may not be exercised at all unless the Board shall so
permit, in which event it may (and subject to sub-rule 5.3 above must, if at
all) be exercised to the extent permitted by the Board within 6 months after
his so ceasing, provided that, in the case of options granted on or after 21
August 2003, the Board may not permit such options to be exercised before the
third anniversary of the Date of Grant.

5.5                           A Participant shall not be
treated for the purposes of sub-rule 5.4 above as ceasing to be a director or
employee of a Group Member until such time as he is no longer a director or
employee of any Group Member, and a female Participant who ceases to be such a
director or employee by reason of pregnancy or confinement and who exercises
her right to return to work under the Employment Rights Act 1996 before
exercising her option shall be treated for those purposes as not having ceased
to be a director or employee.

5.6                           Subject to sub-rule 5.3
above, but notwithstanding any other provision of this Plan, an option may not
be exercised after the expiration of the period of 10 years (or such shorter
period as the Board may have determined before the grant thereof) beginning
with the Grant Date.

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5.7                           A Participant shall not be
eligible to exercise an option granted under Part A of this Plan at any time
when he is not eligible to participate in this Plan by virtue of paragraph 9 of
Schedule 4 (material interest in close
company).

5.8                           Within 30 days after an
option has been exercised by any person, the Board shall allot to him (or a
nominee for him) or, transfer or procure the transfer to him (or a nominee for
him) of the number of shares in respect of which the option has been exercised,
provided that:-

5.8.1                            the Board considers that
the allotment or transfer thereof would be lawful in all relevant
jurisdictions; and

5.8.2                            in a case where a Group
Member is obliged to (or would suffer a disadvantage if it were not to) account
for any tax (in any jurisdiction) for which the person in question is liable by
virtue of the exercise of the option and/or for any social security
contributions recoverable from the person in question (together, the “Tax
Liability”), that person has either:

(a)                     made a payment to the Group Member
of an amount equal to the Tax Liability; or

(b)                    entered into arrangements
acceptable to that or another Group Member to secure that such a payment is
made (whether by authorising the sale of some or all of the shares on his
behalf and the payment to the Group Member of the relevant amount out of the
proceeds of sale or otherwise).

5.9                           For the purposes of
paragraph 35A of Schedule 4, the specified age shall be 55.

6.                                 TAKEOVER, RECONSTRUCTION AND WINDING-UP

6.1                           If any person obtains
control of the Company (within the meaning of section 719 of the Income Tax Act
2003) as a result of making a general offer to acquire shares in the Company,
or having obtained such control makes such an offer, the Board shall within 14
days of becoming aware thereof notify every Participant thereof and, subject to
sub-rules 5.3, 5.4, and 5.6 above, any option may be exercised within one month
(or such longer period as the Board may permit) of such notification.

6.2                           For the purposes of sub-rule
6.1 above, 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.

6.3                           If any person becomes bound
or entitled to acquire shares in the Company under sections 428 to 430F of the
Companies Act 1985, or if under section 425 of that Act 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, or if the Company passes a resolution for voluntary
winding up, or if an order is made for the compulsory winding up of the
Company, the Board shall forthwith notify every Participant thereof and,
subject to sub-rules 5.3, 5.4 and 5.6 above, any option may be exercised within
one month of such notification, but to the extent that 

 6
 

it is not exercised within that period shall (notwithstanding any other
provision of this Plan) lapse on the expiration of that period.

6.4                           If any company (“the
acquiring company”):-

6.4.1                            obtains control of the
Company as a result of making -

(a)                     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

(b)                    a general offer to acquire all the
shares in the Company which are of the same class as the shares which may be
acquired by the exercise of options granted under this Plan, or

6.4.2                            obtains control of the
Company in pursuance of a compromise or arrangement sanctioned by the court
under section 425 of the Companies Act 1985 or Article 418 of the Companies
(Northern Ireland) Order 1986, or

6.4.3                            becomes bound or entitled
to acquire shares in the Company under sections 428 to 430F of that Act or Articles
421 to 423 of that Order,

any Participant may at
any time within the appropriate period (which expression shall be construed in
accordance with paragraph 26(3) of Schedule 4), by agreement with the
acquiring company, release any option granted under this Plan which has not
lapsed (“the old option”) in consideration of the grant to him of an option (“the
new option”) which (for the purposes of that paragraph) is equivalent to the
old option but relates to shares in a different company (whether the acquiring
company itself or some other company falling within paragraph 16(b) or (c) of
Schedule 4).

6.5                           The new option shall not be
regarded for the purposes of sub-rule 6.4 above as equivalent to the old option
unless the conditions set out in paragraph 27(4) of Schedule 4 are
satisfied, but so that the provisions of this Plan shall for this purpose be
construed as if:-

6.5.1                            the new option were an
option granted under this Plan at the same time as the old option;

6.5.2                            except for the purposes of
the definitions of “Group Member”, “Participating Company” and “Subsidiary” in
sub-rule 1.1 above and the reference to “the Board” in sub-rule 5.6 above, the
expression  “the Company” were defined as
“a company whose shares may be acquired by the exercise of options granted
under this Plan”; and

6.5.3                            sub-rule 8.2 below were
omitted.

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7.                                 VARIATION OF CAPITAL

7.1                           Subject to sub-rule 7.3
below, in the event of any variation of the share capital of the  Company, the Board may make such adjustments
as it considers appropriate under sub-rule 7.2 below.

7.2                           An adjustment made under
this sub-rule shall be to one or more of the following:-

7.2.1                            the number of shares in
respect of which any option may be exercised;

7.2.2                            the price at which shares
may be acquired by the exercise of any option;

7.2.3                            where any such option has
been exercised but no shares have been allotted or transferred pursuant to such
exercise, the number of shares which may be so allotted or transferred and the
price at which they may be acquired.

7.3                           At a time when Part A of
this Plan is approved by the Inland Revenue under Schedule 4, no
adjustment under sub-rule 7.2 above shall be made without the prior approval of
the Inland Revenue.

7.4                           An adjustment under sub-rule
7.2 above may have the effect of reducing the price at which shares may be
acquired by the exercise of an option to less than their nominal value.

8.                                 ALTERATIONS

8.1                           Subject to sub-rules 8.2,
8.3 and 8.4 below, the Board may at any time alter this Plan, or the terms of
any option granted under it (having regard to the fact that, if an alteration
which does not solely relate to a special term is made in a key feature (as
defined in paragraph 30(2) of Schedule 4) of this Scheme at a time when Part A
of this Plan is approved by the Inland Revenue under Schedule 4, the approval
will not thereafter have effect unless the Inland Revenue have approved the
alteration).

8.2                           No alteration to the
advantage of Participants shall be made under rule 8.1 to any of rules 2, 3.2,
4.1 to 4.7 inclusive, 5.2 to 5.4 inclusive, 5.6, 6.1 to 6.4 inclusive, 7.1 and
7.2 without the prior approval by ordinary resolution of the members of the
Company in general meeting.

8.3                           Rule 8.2 shall not apply to:

8.3.1                            any minor alteration to
benefit the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Participants or any Group Member; or

8.3.2                            any alteration solely
relating to a special term.

8.4                           No alteration to the
disadvantage of any Participant shall be made under sub-rule 8.1 above unless:-

8.4.1                            the Board shall have
invited every relevant Participant to give an indication as to whether or not
he approves the alteration, and

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8.4.2                            the alteration is approved
by a majority of those Participants who have given such an indication.

8.5                           No alteration which solely
relates to a special term subject to which an option has been granted shall be
made under sub-rule 8.1 above unless:-

8.5.1                            there shall have occurred
an event which shall have caused the Board reasonably to consider that the
special term would not, without the alteration, achieve its original purpose,
and

8.5.2                            the Board shall act fairly
and reasonably in making the alteration.

8.6                           For the purposes of this
Rule a special term means a term specified by the Board as mentioned in
sub-rule 3.1 above.

9.                                 MISCELLANEOUS

9.1                           The rights and obligations
of any individual under the terms of his office or employment with any Group
Member shall not be affected by his participation in this Plan or any right
which he may have to participate in it and an individual who participates
therein shall waive any and all rights to compensation or damages in
consequence of the termination of his office or employment for any reason
whatsoever insofar as those rights arise or may arise from his ceasing to have
rights under or be entitled to exercise any option under this Plan as a result
of such termination.

9.2                           In the event of any dispute
or disagreement as to the interpretation of this Plan, or as to any question or
right arising from or related to this Plan, the decision of the Board shall be
final and binding upon all persons.

9.3                           The Company and any
Subsidiary may provide money to the No. 1 Trust, the No. 2 Trust, the No.3
Trust or any other person to enable them or him to acquire shares to be held
for the purposes of the Plan, or enter into any guarantee or indemnity for
those purposes, to the extent permitted by section 153(4) of the Companies Act
1985 and, where applicable, section 154 of that Act.

9.4                           Any notice or other
communication under or in connection with this Plan may be given by personal
delivery or by sending the same by post, in the case of a company to its
registered office marked for the attention of the Company Secretary, and in the
case of an individual to his last known address, or, where he is a director or
employee of a Group Member, either to his last known address or to the address
of the place of business at which he performs the whole or substantially the
whole of the duties of his office or employment.

 9
 

PART B -
Not approved by UK Inland Revenue

1.                                 DEFINITIONS AND INTERPRETATION

1.1                           In this Plan, unless the
context otherwise requires:-

“American
Depositary Share” means an authorised depositary security
representing for the time being four ordinary shares in the Company and being
evidenced by an authorised depositary receipt issued by the Bank and quoted on
the New York Stock Exchange;

“Associated
Company” means any company (wheresoever incorporated) in which the
Company is directly or indirectly interested in at least 15% of the issued
ordinary share capital;

“the Bank”
means The Bank of New York or such other bank as the Company may from time to
time appoint to issue authorised depositary receipts;

“the Board”
means the board of directors of the Company or a committee appointed by them;

“the Company”
means Diageo plc (registered in England and Wales No. 23307);

“the Grant
Date” in relation to an option means the date on which the option
was granted;

“Group Member”
means:-

1.1.1                            a Participating Company or
a body corporate which is (within the meaning of section 736 of the Companies
Act 1985) the Company’s holding company or a subsidiary of the Company’s
holding company; or

1.1.2                            a body corporate which is
(within the meaning of section 258 of that Act) a subsidiary undertaking of a
body corporate within paragraph 1.1.1 above and has been designated by the
Board for this purpose;

“the London
Stock Exchange” means London Stock Exchange plc;

“the New York
Stock Exchange” means The New York Stock Exchange, Inc.;

“Part A”
of this Plan means the part designed for approval by the Inland Revenue;

“Part B”
of this Plan means the unapproved  part
of this Plan;

“Participant”
means a person who holds an option granted under this Plan;

“Participating
Company” means the Company or any Subsidiary;

“the Plan”
means the Diageo plc Executive Share Option Plan as herein set out but subject
to any alterations or additions made from time to time pursuant to the Plan;

 10
 

“Subsidiary”
means a body corporate which is a subsidiary of the Company (within the meaning
of section 736 of the Companies Act 1985) and of which the Company has control
(within the meaning of section 719 of the Income Tax Act 2003);

“the Income
Tax Act 2003” means the Income Tax (Earnings and Pensions) Act 2003;

“the No. 1 Trust” means the Diageo
Employee Benefit Trust established by deed dated 14 September 1998
between the Company and Mourant & Co Trustees Limited;

“the No. 2
Trust” means the Diageo No. 2 Employees’ Benefit Trust established by
deed dated 27th May 1999 between the Company and Hill Street
Trustees Limited;

“the No.3
Trust” means the Diageo No.3 Employees’ Benefit Trust established by
deed dated 10 November 1999 between Diageo Inc and Hill Street Trustees
Limited;

“US
Participant” means a Participant who is resident in the United
States of America on the Grant Date.

1.2                           Any reference in this Plan
to any enactment includes a reference to that enactment as from time to time
modified, extended or re-enacted.

2.                                 ELIGIBILITY

2.1                           A person is eligible to be
granted an option under Part B of the Plan if (and only if) he is a director or
employee of a Participating Company (excluding any person who is a director of
the Company) who is required to devote the whole or substantially the whole of
his working time to the service of any Participating Company.

3.                                 GRANT OF OPTIONS

3.1                           Subject to Rule 4 below, the
Board may grant an option to acquire, by purchase or subscription, shares in
the Company, which may be American Depositary Shares or ordinary shares in the
Company as the Board may determine, upon the terms set out in Part B of this
Plan and upon such other objective terms as the Board may specify, to any
person who is eligible to be granted an option in accordance with Rule 2 above.

3.2                           Where an option is granted
pursuant to Clause 3.1 above to a US Participant, such option shall be to
purchase American Depositary Shares, and not ordinary shares.

3.3                           The price at which shares or
American Depositary Shares may be acquired by the exercise of an option shall
be determined by the Board before the grant thereof, but shall not be less
than:-

3.3.1                            unless paragraph 3.3.2
applies, if shares of the same class as those shares are listed in the London
Stock Exchange Daily Official List, the average of the middle-market quotation
of shares of that class (as derived from that List) for the three dealing days
immediately preceding the Grant Date;

3.3.2                            if the option is granted
over American Depositary Shares, the average of the closing prices of the
American Depositary Shares on the New York Stock Exchange for the three New
York Stock Exchange trading days immediately preceding the Grant Date.

 11
 

3.4                           An option may only be
granted:-

3.4.1                            within the period of 6
weeks beginning with -

(a)                     the date on which this Plan is
approved and adopted by the Company; or

(b)                    the dealing day next following the
date on which the Company announces its results for any period; or

3.4.2                            at any other time when the
circumstances are considered by the Board to be sufficiently exceptional to
justify its grant; and

3.4.3                            within the period of 10
years beginning with the date on which this Plan is adopted by the Company

PROVIDED that no option
may be granted under this Plan during the “close period” as defined in the
Model Code in the London Stock Exchange’s “The Listing Rules”.

3.5                           In the case of options
granted prior to 22 October 2003, before granting an option under the Plan, the
Board shall have entered into an agreement with the trustees of the No. 1
Trust, the trustees of the No. 2 Trust or the trustees of the No.3 Trust
whereby the trustees agree to satisfy any options granted under the Plan.  The Board is not required to enter into such
an agreement (but may, in its absolute discretion, choose to do so) in relation
to options granted on or after 22 October 2003.

3.6                           An option granted under this
Plan to any person:-

3.6.1                            shall not, except as
provided in sub-rule 5.3 below, be capable of being transferred by him; and

3.6.2                            shall lapse forthwith if he
is adjudged bankrupt.

3.7                           The grant of any option
under this Plan shall be subject to obtaining any approval or consent required
under the provisions of the document “The Listing Rules” published by the
London Stock Exchange, of the City Code on Take-overs and Mergers, or of the
listing rules of the New York Stock Exchange, or of any regulation or
enactment.

4.                                 LIMITS

4.1                           No options shall be granted,
or shares issued otherwise that pursuant to the exercise of an option, in any
year which would, at the time of grant, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options granted
in the ten calendar years ending with that year, or have been issued in that
period otherwise than in pursuance of options, under the Plan or under any
other executive share scheme adopted by the Company to exceed such number as
represents 5 per cent of the ordinary share capital of the Company in issue at
that time.

4.2                           No options shall be granted,
or shares issued otherwise that pursuant to the exercise of an option, in any
year which would, at the time of grant, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options granted
in the ten calendar years ending with that year, or have been issued in that
period otherwise than in pursuance of options, under the Plan or under any
other employees’ share scheme 

 12
 

adopted by the Company to exceed such number as represents 10 per cent
of the ordinary share capital of the Company in issue at that time.

4.3                           For the avoidance of doubt,
shares transferred from treasury will be treated as issued for the purposes of
the above limits, unless institutional shareholder guidelines are amended so
that this is no longer required.

4.4                           The Board may from time to
time determine a maximum aggregate amount payable on exercise of options
granted under this Plan to any person during any period of twelve months, such
amount to be determined taking account of market practice.

4.5                           Any option granted under
this Plan shall be limited and take effect so that the above limits are
complied with.

4.6                           Where any option relating to
unissued shares is released or lapses without being exercised (or the Board
makes arrangements for it to be satisfied by the transfer of existing shares),
the shares concerned will be ignored when calculating the limits in sub-rules
4.1 and 4.2 above.

5.                                 EXERCISE OF OPTIONS

5.1                           The exercise of any option
granted under this Plan shall be effected in the form and manner prescribed by
the Board.

5.2                           Subject to sub-rules 5.3 and
5.4 below and to sub-rules 7.1 and 7.3 below, an option may not be exercised
before the third anniversary of the Grant Date.

5.3                           If any Participant dies, any
option may (and must, if at all) be exercised by his personal representatives
within 12 months after the date of his death provided that his death occurs at
a time when either he is a director or employee of a Group Member or an
Associated Company or he is entitled to exercise the option by virtue of
sub-rule 5.4 below.

5.4                           If any Participant ceases to
be a director or employee of a Group Member or an Associated Company (otherwise
than by reason of his death), the following provisions apply in relation to any
option granted to him under Part B of this Plan:-

5.4.1                            if he so ceases by reason
of injury disability or redundancy (within the meaning of the Employment Rights
Act 1996), or by reason only that his office or employment is in a company
which ceases to be a Group Member or an Associated Company, or relates to a
business or part of a business which is transferred to a person who is not a
Group Member or an Associated Company nor an Associated Company, the option may
(and subject to sub-rule 5.3 above must, if at all) be exercised within 6
months of his so ceasing;

5.4.2                            if he so ceases by reason
of retirement, the option may (and subject to sub-rule 5.3 above must, if at
all) be exercised within 6 months of his so ceasing;

5.4.3                            if he so ceases for any
other reason, the option may not be exercised at all unless the Board shall so
permit, in which event it may (and subject to sub-rule 

 13
 

5.3 above must, if at all) be exercised to the extent permitted by the
Board within 6 months of his so ceasing.

5.5                           A Participant shall not be
treated for the purposes of sub-rule 5.5 above as ceasing to be a director or
employee of a Group Member or an Associated Company until such time as he is no
longer a director or employee of any Group Member, and a female Participant who
ceases to be such a director or employee by reason of pregnancy or confinement
and who exercises her right to return to work under the Employment Rights Act
1996 before exercising her option shall be treated for those purposes as not
having ceased to be a director or employee.

5.6                           Subject to sub-rule 5.3
above, but notwithstanding any other provision of this Plan, an option may not
be exercised after the expiration of the period of 10 years (or such shorter
period as the Board may have determined before the grant thereof) beginning
with the Grant Date.

5.7                           Within 30 days after an
option has been exercised by any person, the Board shall allot to him (or a
nominee for him) or, transfer or procure the transfer to him (or a nominee for
him) of the number of shares in respect of which the option has been exercised,
provided that:-

5.7.1                            the Board considers that
the allotment or transfer thereof would be lawful in all relevant
jurisdictions; and

5.7.2                            in a case where a Group
Member or an Associated Company is obliged to (or would suffer a disadvantage
if it were not to) account for any tax (in any jurisdiction) for which the
person in question is liable by virtue of the exercise of the option and/or for
any social security contributions recoverable from the person in question
(together, the “Tax Liability”), that person has either:

(a)                     made a payment to the relevant
Group Member or Associated Company of an amount equal to the Tax Liability; or

(b)                    entered into arrangements
acceptable to that or another Group Member to secure that such a payment is
made (whether by authorising the sale of some or all of the shares on his behalf
and the payment to the Group Member or Associated Company of the relevant
amount out of the proceeds of sale or otherwise).

6.                                       CASH EQUIVALENT

6.1                           Where an option granted
under Part B of this Plan has been exercised by any person in respect of any
number of shares, and those shares have not yet been allotted or transferred to
him in accordance with sub-rule 5.7 above, the Board may determine that, in
substitution for his right to acquire such number of those shares as the Board
may decide (but in full and final satisfaction of his said right), he shall be
paid by way of additional emoluments a sum equal to the cash equivalent of that
number of shares or, in the case of a US Participant, if he elects to defer
receipt of the sum pursuant to his employer’s deferred compensation plan or in
accordance with rules established by the 

 14
 

Board, an amount equal to such sum shall be credited to his account
under his employer’s deferred compensation plan.

6.2                           For the purposes of this
Rule, the cash equivalent of any shares
is the amount by which the Board’s opinion of the market value of those shares
on the day last preceding the date on which the option was exercised (or, if at
the relevant time shares of the same class as those shares were listed in The
Stock Exchange Daily Official List, the middle-market quotation of shares of
that class, as derived from that List, on the dealing day last preceding that
date or, in the case of American Depositary Shares, the closing price of such
shares on the New York Stock Exchange on the dealing day last preceding that
date) exceeds the price at which those shares may be acquired by the exercise
of the option.

6.3                           Subject to sub-rule 6.4
below, as soon as reasonably practicable after a determination has been made
under sub-rule 6.1 above that a person shall be paid a sum in substitution for
his right to acquire any number of shares:-

6.3.1                            the Company shall pay to
him or procure the payment to him of that sum in cash; and

6.3.2                            if he has already paid the
Company for those shares, the Company shall return to him the amount so paid by
him.

6.4                           If the Board in its
discretion so decides:-

6.4.1                            the whole or part of the
sum payable under sub-rule 6.3.1 above shall, instead of being paid to the
person in question in cash, be applied on his behalf in purchasing shares in
the Company at a price equal to the market value (or, as the case may be, the
middle-market quotation) by reference to which the cash equivalent is
calculated, and

6.4.2                            the Company shall procure
the transfer to him (or his nominee) of the shares so purchased.

6.5                           There shall be made from any
payment under this Rule such deductions (on account of tax or similar
liabilities) as may be required by law or as the Board may reasonably consider
to be necessary or desirable

7.                                 TAKEOVER, RECONSTRUCTION AND WINDING-UP

7.1                           If any person obtains
control of the Company (within the meaning of section 719 of the Income Tax Act
2003) as a result of making a general offer to acquire shares in the Company,
or having obtained such control makes such an offer, the Board shall within 14
days of becoming aware thereof notify every Participant thereof and, subject to
sub-rules 5.2, 5.3 and 5.6 above, any option may be exercised within one month
(or such longer period as the Board may permit) of such notification.

7.2                           For the purposes of sub-rule
7.1 above, 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.

 15
 

7.3                           If any person becomes bound
or entitled to acquire shares in the Company under sections 428 to 430F of the
Companies Act 1985, or if under section 425 of that Act 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, or if the Company passes a resolution for voluntary
winding up, or if an order is made for the compulsory winding up of the
Company, the Board shall forthwith notify every Participant thereof and,
subject to sub-rules 5.2, 5.3 and 5.6 above, any option may be exercised within
one month of such notification, but to the extent that it is not exercised
within that period shall (notwithstanding any other provision of this Plan)
lapse on the expiration of that period.

7.4                           If any company (“the
acquiring company”):-

7.4.1                            obtains control of the
Company as a result of making -

(a)                     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

(b)                    a general offer to acquire all the
shares in the Company which are of the same class as the shares which may be
acquired by the exercise of options granted under this Plan, or

7.4.2                            obtains control of the
Company in pursuance of a compromise or arrangement sanctioned by the court
under section 425 of the Companies Act 1985 or Article 418 of the Companies
(Northern Ireland) Order 1986, or

7.4.3                            becomes bound or entitled
to acquire shares in the Company under sections 428 to 430F of that Act or
Articles 421 to 423 of that Order,

any Participant may at
any time within the appropriate period (which expression shall be construed in
accordance with paragraph 26(3) of Schedule 4 to the Income Tax Act
2003), by agreement with the acquiring company, release any option granted
under this Plan which has not lapsed (“the old option”) in consideration of the
grant to him of an option (“the new option”) which (for the purposes of that
paragraph) is equivalent to the old option but relates to shares in a different
company.

7.5                           The new option shall not be
regarded for the purposes of sub-rule 7.4 above as equivalent to the old option
unless the conditions set out in paragraph 27(4) of Schedule 4 to the Income
Tax Act 2003 are satisfied, but so that the provisions of this Plan shall for
this purpose be construed as if:-

7.5.1                            the new option were an
option granted under this Plan at the same time as the old option;

7.5.2                            except for the purposes of
the definitions of “Associated Company”, “Group Member”, “Participating Company”
and “Subsidiary” in sub-rule 1.1 above and the reference to “the Board” in
sub-rule 5.6 above, the expression  “the 

 16
 

Company” were defined as “a company whose shares may be acquired by the
exercise of options granted under this Plan”; and

7.5.3                            sub-rule 9.2 below were
omitted.

8.                                 VARIATION OF CAPITAL

8.1                           Subject to sub-rule 8.3
below, in the event of any variation of the share capital of the  Company (including a change in the number of
ordinary shares underlying an American Depositary Share) or in the event the
Company makes a demerger by way of exempt distribution under section 213 of the
Income and Corporation Taxes Act 1988 or pays a special dividend or repurchases
its share capital, the Board may make such adjustments as it considers
appropriate under sub-rule 8.2 below.

8.2                           An adjustment made under
this sub-rule shall be to one or more of the following:-

8.2.1                            the number of shares in
respect of which any option may be exercised;

8.2.2                            the number of American
Depositary Shares in respect of which any option may be exercised;

8.2.3                            the price at which shares
may be acquired by the exercise of any option;

8.2.4                            where any such option has
been exercised but no shares have been allotted or  transferred pursuant to such exercise, the
number of shares which may be so allotted or transferred and the price at which
they may be purchased.

8.3                           An adjustment under sub-rule
8.2 above may have the effect of reducing the price at which shares may be
acquired by the exercise of an option to less than their nominal value.

9.                                 ALTERATIONS

9.1                           Subject to sub-rules 9.2,
9.3 and 9.4 below, the Board may at any time alter this Plan, or the terms of
any option granted under it.

9.2                           No alteration to the
advantage of Participants shall be made under rule 9.1 to any of rules 2, 3.3,
4.1 to 4.4 inclusive, 5.2 to 5.4 inclusive, 5.6, 7.1 to 7.4 inclusive, 8.1 and
8.2 without the prior approval by ordinary resolution of the members of the
Company in general meeting.

9.3                           Rule 9.2 shall not apply to:

9.3.1                            any minor alteration to
benefit the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for Participants or any Group Member; or

9.3.2                            any alteration solely
relating to a special term.

9.4                           No alteration to the
disadvantage of any Participant shall be made under sub-rule 9.1 above unless:-

 17
 

9.4.1                            the Board shall have
invited every relevant Participant to give an indication as to whether or not
he approves the alteration, and

9.4.2                            the alteration is approved
by a majority of those Participants who have given such an indication.

9.5                           No alteration which solely
relates to a special term subject to which an option has been granted shall be
made under sub-rule 9.1 above unless:-

9.5.1                            there shall have occurred
an event which shall have caused the Board reasonably to consider that the
special term would not, without the alteration, achieve its original purpose,
and

9.5.2                            the Board shall act fairly
and reasonably in making the alteration.

9.6                           For the purposes of this
Rule a special term means a term specified by the Board as mentioned in
sub-rule 3.1 above.

10.                           MISCELLANEOUS

10.1                     The rights and obligations of any
individual under the terms of his office or employment with any Group Member or
Associated Company shall not be affected by his participation in this Plan or
any right which he may have to participate in it and an individual who
participates therein shall waive any and all rights to compensation or damages
in consequence of the termination of his office or employment for any reason
whatsoever insofar as those rights arise or may arise from his ceasing to have
rights under or be entitled to exercise any option under this Plan as a result
of such termination.

10.2                     In the event of any dispute or
disagreement as to the interpretation of this Plan, or as to any question or
right arising from or related to this Plan, the decision of the Board shall be
final and binding upon all persons.

10.3                     The Company and any Subsidiary may
provide money to the No. 1 Trust, the No. 2 Trust, the No.3 Trust or any
other person to enable them or him to acquire shares to be held for the
purposes of the Plan, or enter into any guarantee or indemnity for those
purposes, to the extent permitted by section 153(4) of the Companies Act 1985
and, where applicable, section 154 of that Act.

10.4                     Where an Award is granted under
the Plan to a person who is not chargeable to tax under Case I of Schedule E in
respect of the office or employment by virtue of which it is granted to him,
the provisions of the Plan shall apply thereto subject to such alterations as
the Board shall before the grant thereof have determined having regard to any
securities, exchange control or taxation laws or regulations or similar factors
which may have application to him or to any Participating Company in relation
to the option.

10.5                     Any notice or other communication
under or in connection with this Plan may be given by personal delivery or by
sending the same by post, in the case of a company to its registered office
marked for the attention of the Company Secretary, and in the case of an
individual to his last known address, or, where he is a director or employee of
a Group Member or an Associated Company, either to his last known address or to
the address of 

 18
 

the place of business at which he performs the whole or substantially
the whole of the duties of his office or employment.

11.                           INCENTIVE STOCK OPTIONS

11.1                     In this Rule:

“Incentive Stock Option”
means an option satisfying the requirements of section 422 of the Code;

“the Code” means the
United States Internal Revenue Code of 1986 (as amended);

“Market Value” at any
date means the fair market value of ordinary shares in the Company on that
date, as determined by the Board, provided that if on such date shares of that
class are listed in The London Stock Exchange Daily Official List, the fair
market value shall be not less than the middle-market quotation of such shares
(as derived from that List) on the Grant Date.

11.2                     The Board may grant an Incentive
Stock Option over American Depositary Shares to any person who is eligible to
be granted an option under the Plan upon the terms set out in the Plan and
subject to the additional terms and conditions in this Rule.

11.3                     Subject to sub-rule 11.4 below,
the option price for an American Depositary Share subject to an Incentive Stock
Option granted hereunder may not be less than the Market Value of the number of
ordinary shares underlying the American Depositary Share on the Grant Date.

11.4                     A person who, within the meaning
of section 422(b)(6) of the Code, is deemed to own shares in the Company
possessing more than ten per cent of the total combined voting power of all
classes of shares of the Company (or of its parent or subsidiary corporations
within the meaning in section 424 of the Code) shall be eligible to receive an
Incentive Stock Option only if the option price of an American Depositary Share
thereunder is at least 110% of the Market Value of the number of ordinary
shares underlying the American Depositary Share on the Grant Date and only if
the term of the option does not exceed five years.

11.5                     The aggregate Market Value
determined at the Grant Date of the number of ordinary shares underlying the
American Depositary Shares with respect to which Incentive Stock Options first
become exercisable by any Participant in any calendar year shall not exceed
US$100,000.

11.6                     Section 421(a) of the Code will
not apply to an Incentive Stock Option unless it is exercised no more than (i)
twelve months after the date of termination of employment because of total and
permanent disability or (ii) three months after the date of termination of
employment for any reason other than that described in clause (i) and death.

11.7                     Notwithstanding any other
provisions of the Plan, the Company will not be required to issue or cause to
be issued any American Depositary Shares if at such time such issuance would
violate the United States Federal Securities laws or any other laws of the
United States or any state thereof.  In
addition, the holder of any American Depositary Shares issued hereunder agrees
not to sell or transfer such American Depositary Shares in 

 19
 

violation of the United States Federal Securities laws or any other
laws of the United States or any state thereof. 
The Company shall have the right in its sole discretion to modify the
terms of the Plan at any time and from time to time as it deems necessary or
appropriate to ensure or facilitate such compliance with the foregoing and to
include appropriate legends on any options or American Depositary Shares issued
or caused to be issued hereunder.

CLIFFORD CHANCE LLP

10 Upper Bank Street 

London  E14 5JJ

 20Exhibit 4.12

	
  

  	
  LIMITED
  LIABILITY PARTNERSHIP

  

DIAGEO PLC LONG
TERM INCENTIVE PLAN

As amended by the
Remuneration Committee on 5 December 2006

CONTENTS

Clause

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Grant Of Awards

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Individual Limits

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Plan Limits

  	
  5

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Performance Requirement

  	
  5

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Forfeiture Of Awards

  	
  6

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Rights During The Restricted Period

  	
  6

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Release Of Awards

  	
  8

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Adjustments

  	
  8

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Change Of Control

  	
  9

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Merger And Demerger

  	
  10

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Allotment, Transfer, Listing And The Cost Of The
  Plan

  	
  10

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Employee Rights

  	
  11

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Taxation And Other Regulatory Requirements

  	
  12

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Administration And Amendment Of The Plan

  	
  13

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Notice

  	
  13

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Termination

  	
  13

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Governing Law

  	
  13

  

 

1.                                 DEFINITIONS

1.1                           In
these Rules and Schedules the following words and expressions shall have the
following meanings:

“Act” means the Income and Corporation Taxes
Act 1988;

“Adoption Date” means the date that the
Board adopts the Plan;

“Award” means a Restricted Share Award or a
Deferred Right granted in accordance with these Rules;

“Award  Certificate”
means a certificate confirming an Award made to a Participant;

“Award  Value”
means for the purposes of Rule 3, the number of Shares the subject of the
Award multiplied by:

(a)                                      the
average of the middle market quotation of a Share as derived from the Daily
Official list of the London Stock Exchange or such other exchange as may be
specified by the Committee on which the Shares are listed on the last dealing
day immediately prior to the Date of Grant; or

(b)                                     the
average of the middle market quotation of a Share as derived from the Daily
Official List of the London Stock Exchange or such other exchange on which
Shares are listed over a period not exceeding the base period for the
Performance Requirement as determined by the Committee from time to time;

and, for the
avoidance of doubt, the Committee shall in its discretion determine whether to
use (a) or (b) above to calculate the price of a Share for the purpose of
determining the Award Value;

“Basic  Salary”
means an Eligible Employee’s base salary (which, for the avoidance of doubt,
does not include the value of any bonuses, benefits in kind or employer’s
pension contributions) at the Date of grant or such other sum that the
Committee may in its discretion determine;

“Board” means the board of directors of the
Company or the directors present at a duly convened meeting of the directors of
the Company at which a quorum is present or a duly authorised committee thereof;

“Close  Period”
means any period during which certain persons are prohibited from dealing in
Shares, for whatever reason, in accordance with the Model Code contained in the
appendix to chapter 16 of the Listing Rules of the London Stock Exchange
(as replaced, amended or re-enacted from time to time) and/or such code
as the Company may have established from time to time or such other statutory,
regulatory or other prohibition from dealing in Shares or rights over Shares;

“Committee” means the Remuneration Committee
of the Company and any duly appointed individual or committee appointed by the
Remuneration Committee from time to time;

“Company” means Diageo plc registered in
England number 23307;

 1
 

“Continuous  Employment” in relation to an Eligible Employee and/or a
Participant continuous employment of the Participant or, in the case of an
Eligible Employee and/or a Participant who is a trustee, of the employee or
executive for whom he is acting, with a Group Company.  An Eligible Employee and/or a Participant
shall not be treated as ceasing to be in continuous employment until he ceases
to hold any office or employment in any Group Company;

“Control” has the same meaning given in
section 840 of the Act;

“Date  of
Grant” means the date on which an
Award is granted;

“Deferred  Right”
means a right to acquire Shares pursuant to the Rules upon the payment of such
consideration, if any, as may be determined by the Committee at the Date of
Grant in accordance with Rule 2.2.2;

“Eligible  Employee”
means any bona fide employee or executive director of the Group, or where
appropriate a trustee acting on behalf of such employee or executive
director.  The Committee may in its
discretion determine that such employee or executive director of the Group
shall have a period of Continuous Employment to be an eligible employee, such
period to be determined by the Committee in its discretion;

“Executive  Share
Plan” means any share plan
operated mainly for the benefit of executives of the group selected at the
discretion of the Board or Committee;

“External  Auditors”
means external auditors appointed by the Company from time to time;

“Group” means the Company and any Holding
Company and Subsidiaries and the expression “Group Company” shall be construed
accordingly;

“Holding  Company”
has the meaning given in section 736 of the Companies Act 1985;

“London  Stock
Exchange” means the London Stock
Exchange plc or any successor body carrying on the business of the London Stock
Exchange plc;

“Participant” means any Eligible Employee to
whom a subsisting Award has been granted. 
Reference to a Participant shall include, where the context so admits or
requires, trustees of a trust of which he is a potential beneficiary or other
personal representatives;

“Performance  Requirement” means the requirement as may be determined by the
Committee from time to time in accordance with Rule 2.2.4 subject to
amendments, if any, made in accordance with Rule 5.2;

“Plan” means the Diageo Long Term Incentive
Plan constituted by these Rules;

“Plan  Year”
means the calendar year from 1 January to 31 December or, for Awards
granted on or after 1 July 2005, the Company’s financial year from 1 July to 30
June;

“Release” means the dealing date immediately
following the last day of the Restricted Period when, in relation to a
Restricted Share Award, a Participant becomes absolutely 

 2
 

entitled to
receive beneficial ownership of the Shares the subject of such Award in
accordance with Rule 8 and, in relation to a Deferred Right the date upon
which such Award becomes exercisable, unless Awards are Released on an earlier
date pursuant to Rules 8.5, 10, 11.1.3 or any other Rule, and “Released”
shall be construed accordingly;

“Restricted  Period” means a period of not less than three years from the
Date of grant or such other period as may be determined by the Committee in its
discretion in relation to each Award in accordance with Rule 2.2.5 or, in
relation to Awards made within 3 months of the Adoption Date, a period of
not less than 2 years from the Date of Grant;

“Restricted  Share  Award”
means a contingent right to acquire Shares the subject of an Award;

“Rules” means the rules of this Plan as
amended from time to time;

“Shares” means fully paid ordinary shares of
the Company;

“Subsidiary” has the meaning given in
section 736 of the Companies Act 1985;

“Tax” includes any present or future tax,
levy, social charge, impost, duty, charge, fee, deduction or withholding of any
nature, made by any competent authority in any jurisdiction and interest or
penalties in respect thereof; and

“Trustees” means the trustees of the Diageo
Employee Benefit Trust or such other person as may be appointed by the
Committee to hold Shares for the purposes of the Plan.

1.2                           Words
and expressions defined in the Act and in the Companies Act 1985 and the
Companies Act 1989 shall bear the same meanings in these Rules except as
otherwise provided for in these Rules.

1.3                           Where
the context so admits or requires, words importing the singular shall include
the plural and vice versa, and words importing the masculine shall include the
feminine.

1.4                           Any
reference to a statute or statutory provision shall be construed as if it
referred also to that statute or provision as the same may from time to time be
consolidated, replaced, amended or re-enacted and to any related statutory
instrument or other subordinate legislation in force from time to time.

1.5                           Wherever
the Rules refer to the Committee or the Trustees having the ability to
determine, decide or change matters howsoever, this will mean that the
Committee shall be entitled to do so in its absolute and unfettered discretion
and no person shall have any right to challenge, dispute or appeal whatsoever
against the Committee’s determined, decision or change howsoever made.

1.6                           Headings,
notes and footnotes to these Rules are included for convenience only and shall
not affect the interpretation or construction of these Rules.

1.7                           Reference
to a “company” shall be construed so as to include any company, corporation or
other body corporate, wherever and however incorporated or established.

 3
 

1.8                           References
to a “person” shall be construed so as to include any individual, firm,
company, government, state or agency of a state, local or municipal authority
or government body or any joint venture, association or partnership (whether or
not having a separate legal personality).

1.9                           References
to Shares shall, where appropriate, be construed as references to American
Depository Shares (“ADSs”).

2.                                 GRANT
OF AWARDS

2.1                           Subject
to Rule 3 and Rule 17, the Committee or the Trustees may grant Awards
at any time other than during a Close Period. 
The Committee may make recommendations to the Trustees in respect of the
Awards to be granted by the Trustees pursuant to this Rule 2.1 which the
Trustees may or may not, in their absolute discretion, determine to
follow.  References in these Rules to the
Committee making determinations or decisions in respect of Awards shall be
deemed to be references to the Trustees making such determinations or decisions
in respect of Awards granted by the Trustees pursuant to this Rule 2.1,
taking account of the recommendations of the Committee.

2.2                           The
Committee shall determine in respect of each Award:

2.2.1                            whether
the Award is a Restricted Share Award or a Deferred Right;

2.2.2                            in
respect of any Deferred Right the payment, if any, due upon the exercise of the
Award and the period after Release when the Award will lapse;

2.2.3                            the
maximum number of Shares the subject of an Award;

2.2.4                            the
Performance Requirement that must be satisfied prior to Release;

2.2.5                            the
Restricted Period applicable to such Award; and

2.2.6                            any
other conditions, restrictions, prohibitions or requirements that the Committee
shall determine as appropriate that must be satisfied prior to Release.

2.3                           The
Committee may in its discretion determine that it shall be a condition of the
grant of an Award in any Plan Year that an Eligible Employee (including his
spouse and infant children) and/or Participant shall have held beneficially for
such period or periods of time as the Committee shall decide a certain number
of Shares provided that such determination is made and notified to the Eligible
Employee and/or Participant no later than 3 calendar months before the
commencement of any Plan Year.

2.4                           An
Award Certificate shall be issued to an Eligible Employee in respect of whom
the Committee has determined that an Award shall be granted as soon as
reasonably practicable following the Date of Grant containing the information
required in accordance with Rule 2.2. 
Such Award Certificate shall be issued as a deed executed by the Company
(or, in respect of Awards made by the Trustees, a deed executed by the
Trustees) or as otherwise determined by the Committee.

 4
 

2.5                           A
Participant may at any time prior to the Release of an Award renounce the Award
(in whole, but not in part), by serving notice in writing on the Company or
Trustees of his intention to renounce such Award.  The renunciation shall be effective from the
date of receipt of such notice by the Company or Trustees.

3.                                 INDIVIDUAL LIMITS

3.1                           An Award
shall not normally be granted to an Eligible Employee and/or Participant if the
Award Value when aggregated with the Award Values of other Awards granted to
him in the same Plan Year would exceed 250% of his Basic Salary at the Date of
Grant.

4.           PLAN LIMITS

4.1         Subject to sub-rules 4.2 to 4.3, the Company may transfer
shares held as treasury shares to Participants on the Release of any
Award.  No shares may be issued under the
Plan.

4.2         No options shall be granted, or shares issued otherwise than
pursuant to the exercise of an option, in any year which would, at the time of
the grant or issue, cause the number of shares in the Company which shall have
been or may be issued in pursuance of options granted in the period of 10
calendar years ending with that year, or shall have been issued in that period
otherwise than in pursuance of options, under this Plan or under any other
executive share scheme adopted by the Company to exceed such number as
represents 5 per cent of the ordinary share capital of the Company in issue at
that time.

4.3         No options shall be granted, or shares issued otherwise than
pursuant to the exercise of an option, in any year which would, at the time of
the grant or issue, cause the number of shares in the Company which shall have
been or may be issued in pursuance of options granted in the period of 10
calendar years ending with that year, or been issued in that period otherwise
than in pursuance of options, under this Plan or under any other employees’
share scheme adopted by the Company to exceed such number as represents 10 per
cent of the ordinary share capital of the Company in issue at that time.

5.                                 PERFORMANCE REQUIREMENT

5.1                           The
Committee shall determine for each Award the applicable Performance Requirement
in accordance with the provisions of Rule 2.2.4.

5.2                           If
events occur which cause the Committee to consider that the existing
Performance Requirement has become inappropriate (for whatever reason), it may,
in its discretion (provided such discretion is exercised fairly and reasonably
and after consultation with the principal shareholders of the Company)
determine to amend or replace the relevant Performance Requirement so that in
the reasonable opinion of the Committee it will not be materially more or less
difficult to satisfy than was originally intended.

6.                                 FORFEITURE OF AWARDS

6.1                           An
Award shall be personal to a Participant and neither Awards, nor any rights
granted in relation thereto, may be transferred, assigned, pledged, charged or
otherwise disposed of by a Participant (save for disposals of such rights
granted in relation to an Award between the Participant and any trustee as
provided in the definition of Eligible Employee) and if a Participant shall do,
suffer or permit any such act or thing whereby 

 5
 

he would or might be deprived of any rights
received or granted in relation to an Award (save in respect of disposals
between the Participant and any such trustee), the Award shall forthwith lapse.

7.                                 RIGHTS DURING THE RESTRICTED PERIOD

7.1                           A
Participant shall not be entitled to any beneficial interest in or any dividend
or other distribution paid in respect of Shares subject to Awards prior to
their Release or by reference to a record date falling prior to their Release
but, at the discretion of the Committee, may receive a discretionary bonus
calculated by reference to such dividend or distribution, such value being of
such amount and provided in such form at such time as the Committee shall, in
its discretion, determine and subject to any deductions required by law.  Subject to the provisions of Rule 9.1 if
the Company declares a special dividend prior to their Release the Committee
may determine to adjust the number of Shares subject to Awards to take such
special dividend into account.

7.2                           A
Participant shall not be entitled to direct the Trustees to vote in respect of
any Shares the subject of Awards prior to their Release or to exercise any
other right in relation to such Shares.

8.                                 RELEASE OF AWARDS

8.1                           Subject
to Rule 8.2, Rule 8.5, Rule 10 and Rule 11 Awards shall be Released
subject to the achievement of the Performance Requirement and provided that the
Participant has been in Continuous Employment from the Date of Grant until the
end of such applicable Restricted Period on the dealing day immediately
following the last day of the Restricted period.

8.2                           Release
of Awards shall also be subject to:

8.2.1                            the
satisfaction of any additional conditions, restrictions or requirements set out
in the Award Certificate in accordance with the provisions of Rule 2.2.6;
and

8.2.2                            the
consent of the Trustees;

8.2.3                            the
requirements of Rule 14; and

8.2.4                            any
applicable provisions of the Memorandum and Articles of Association of the
Company.

8.3                           If a
prospective date of Release in a Close Period, such Release may be deferred
until the end of the Close Period, subject to Rule 8.7.4;

8.4                           Except
as prescribed in Rule 8.5, if the Participant ceases to be employed by the
Group during the Restricted Period his subsisting Awards shall lapse forthwith
upon such cessation.

8.5                           If a
Participant ceases to be employed by the Group before the end of the applicable
Restricted Period, the Committee may in its discretion determine that a
proportion or all of the Award shall be Released at the end of the such
applicable Restricted Period or at such other time as the Committee shall
determine.  Release in such circumstances
may 

 6
 

be subject to such Performance Requirement or
other conditions, if any, as the Committee may in its discretion determine.

8.6                           The
Committee may in its discretion determine that a Participant shall retain after
the Release of such Award some or all of the Shares comprising his Award for
such period or periods and subject to such terms and conditions as the
Committee shall determine provided that such determination is made at the Date of
Grant in respect of each Award in accordance with the provisions of
Rule 2.2.6.

8.7                           Each
subsisting Award shall lapse on the earliest of the following events:

8.7.1                            the
date on which it is determined that any Performance Requirement imposed
pursuant to Rule 2.2.4 cannot be satisfied; or

8.7.2                            the
date on which the Award lapses pursuant to Rule 2.2.2, Rule 6,
Rule 8.4, Rule 10 or Rule 11; or

8.7.3                            the
date upon which an Award is deemed to lapse pursuant to any other Rule; or

8.7.4                            the
tenth anniversary of the Date of Grant; or

8.7.5                            the
date on which the Participant is adjudicated bankrupt.

8.8                           After
Release of an Award in the form of a Deferred Right, such Deferred Right may be
exercised in whole (or in part if the Company permits) by the Participant giving
notice to the Company in such form as the Committee shall prescribe accompanied
by the payment, if any, for the Shares. 
The date of receipt of such notice shall be the date of exercise of the
Deferred Right.  As soon as reasonably
practicable after a Deferred Right has been exercised, the Committee shall
transfer or procure the transfer to the Participant (or his nominee) of the
number of Shares in respect of which the Deferred Right has been
exercised.  Deferred Rights exercised on
the same day shall be deemed to be exercised simultaneously.  When a Deferred Right is exercised only in
part, the balance shall remain exercisable on the same terms as originally
applied to the whole Deferred Right and a new Award Certificate shall be issued
as soon as reasonably practicable for the balance of the Deferred Right
remaining.  Deferred Rights that have not
been exercised within 30 days of Release will lapse.

8.9                           After
Release of an Award in the form of a Restricted Share Award the Committee shall
in its discretion either:

8.9.1                            transfer
or procure the transfer to the Participant (or his nominee) of the Shares
subject to such Award; or

8.9.2                            procure
the transfer to the Participant, within 30 days of the Release of such
Award, an amount in cash equal to the aggregate market value of the Shares
subject to such Award on the last dealing day immediately prior to the Release
of such Award.

 7
 

9.                                 ADJUSTMENTS

9.1                           If a
variation of the issued share capital of the Company by way of a capitalisation
or rights issue, sub-division, consolidation, reduction or otherwise
shall take place then the number of Shares subject to an Award may be adjusted
in such manner and with effect from such date, as the Committee may determine
to be appropriate and as the External Auditors shall have confirmed in writing
to be, in their opinion, fair and reasonable.

9.2                           Notice
of any such adjustment made under Rule 9.1 be given to Participants by the
Committee who may call in Award Certificates for endorsement or replacement.

10.                           CHANGE OF CONTROL

Change of Control

10.1                     If any
company or person acting alone or in concert with another or others obtains
Control of the Company the Committee shall forthwith upon the date of such
change of Control notify every Participant and Participants shall be entitled on
such date to the Release of all Awards provided that or to the extent that the
Performance Requirement is satisfied on the occurrence of such event.  If Awards are made in the form of Deferred
Rights Participants may exercise such Deferred Rights within one month of the
date of Release, after which period such Deferred Rights will lapse.

Scheme of Arrangement

10.2                     If under
section 425 of the Companies Act 1985 the court sanctions a
compromise or arrangements between the Company and its creditors or members
proposed for the purpose of, or in connection with, a scheme for the
reconstruction of the Company or its amalgamation with any other company or
companies, all Awards shall be Released to Participants forthwith on the date
upon which the compromise or arrangement is sanctioned by the court provided
that or to the extent that the Performance Requirement is satisfied on the
occurrence of such event.  If Awards are
made in the form of Deferred Rights Participants may exercise such Deferred
Rights within one month of the date of Release, after which period such
Deferred Rights will lapse.

10.3                     If any
company or person becomes bound or entitled to acquire Shares under
sections 428 to 430F of the Companies Act 1985, the Committee shall
forthwith notify every Participant and Participants shall be entitled on the
date such company or person becomes bound or entitled to the Release of all
Shares the subject of subsisting Awards provided that or to the extent that the
Performance Requirement is satisfied on the occurrence of such event.  If Awards are made in the form of Deferred
Rights Participants may exercise such Deferred Rights within one month of the
date of Release, after which period such Deferred Rights will lapse.

Liquidation

10.4                     If a
voluntary winding up of the Company is proposed to shareholders or if an order
is made for the compulsory winding up of the Company, the Committee shall
notify each Participant.  On receipt of
such notification all a Participant’s Awards will be Released provided that or
to the extent that the Performance Requirement is satisfied on the occurrence
of such event.  After such Release if
Awards have been made in the form of 

 8
 

Deferred Rights the Participant may then in
the case of a voluntary winding up of the Company exercise any Released
Deferred Right during the period between the proposal and a resolution being
passed (provided that any exercise is conditional upon the resolution being
passed) or, in the case of an order for the compulsory winding up of the
Company, exercise any Released Deferred Right within one month from the date of
such notification.  For the avoidance of
doubt, a Participant who has exercised a Released Deferred Right under this
provision shall be entitled to an equal distribution of the assets of the Company
with existing shareholders in the same manner as he would have been entitled
had he been the registered owner of the relevant Shares when the resolution was
passed or order made.

Replacement of Awards

10.5                     If, as a
result of the events specified in Rule 10.1 or Rule 10.2, a company
has obtained Control of the Company or if a company has become bound or
entitled as stated in Rule 10.3 (such company referred to as the
“Acquiring Company”), the Participant may, by agreement with the Acquiring
Company, release each subsisting Award (the “Old Award”) in exchange for an
Award (the “New Award”) provided that the New Award:

10.5.1                      is over
shares of the Acquiring Company or some company which has Control of the
Acquiring Company or is a member of a consortium owning either the Acquiring
Company or having Control of the Acquiring Company;

10.5.2                      is a right
over such number of shares as have an aggregate market value of those Shares
subject to the Old Award on the last dealing day immediately prior to the date
of exchange on which the Shares were quoted;

10.5.3                      if the Old
Award was a Deferred right (the “Old Deferred Right”) that the New Award is a
Deferred right (the “New Deferred Right”) and has a subscription price per
share such that the aggregate price payable on the complete exercise of the New
Deferred Right equals the aggregate price which would have been paid on the
complete exercise of the Old Deferred Right; and

10.5.4                      is
otherwise, so far as the Committee determines it to be appropriate, upon
identical terms to the Old Award.

10.6                     The New Award
shall for all purposes be treated as having been acquired on the same Date of
Grant as the Old Award and thereafter references in these Rules to the Company,
Deferred Rights, Shares and Awards shall, where appropriate, be construed as
references to the Acquiring Company and its shares, deferred rights and the New
Award.

11.                           MERGER AND DEMERGER

11.1                     In the event
that the Company merges with another company, or any one or more of the
businesses of the Group are demerged (whether such merger or demerger is
effected by way of sale, distribution or in any other manner) the Committee
shall notify each Participant and shall have the discretion to determine
whether:

11.1.1                      all
subsisting Awards are voided and replaced with awards of an equivalent value as
determined by the Committee in its discretion and as the External 

 9
 

Auditors shall have confirmed in writing to
be, in their option, fair and reasonable; or

11.1.2                      the number
of Shares subject to subsisting Awards be adjusted to reflect any change in
value due to the merger or demerger or in the case of Awards in the form of
Deferred Rights the exercise price of the Shares subject to Awards be adjusted,
any such adjustment to be determined by the Committee in its discretion and as
the External Auditors  shall have
confirmed in writing to be, in their opinion, fair and reasonable; or

11.1.3                      all Awards
are Released provided that or to the extent that the Performance Requirement on
the occurrence of such event is satisfied and in the case of Awards in the form
of Deferred Rights Participants may exercise their Deferred Rights within a
period of one month (or such other period as the Committee may determine)
beginning with the date of notification of the demerger to Participants, and after
the end of such period such Deferred Rights will lapse.

11.2                     The Committee
shall notify Participants as soon as reasonably practicable of any replacement,
adjustment or Release in accordance with the provisions of Rule 11.1 and may
call in Award Certificates for endorsement or replacement.

12.                           ALLOTMENT, TRANSFER, LISTING AND THE COST OF THE PLAN

12.1                     Any Shares to
be transferred pursuant to the Release of an Award shall be transferred to the
relevant Participant or a nominee nominated by a Participant not later than 30
days after the date of Release of the Award and/or exercise of the Deferred
Right.  Such Shares shall rank pari passu
in all respects with other Shares, as the case may be, of the same class as issued
at that time, provided that the Participant shall have no entitlement in
relation to rights attaching to the Shares prior to the date of Release.

12.2                     Awards may
only be satisfied by the transfer of Shares.

12.3                     The
obligation to provide a benefit under an Award may be undertaken by the Company
or the Trustees as the Committee shall determine from time to time and subject,
where required, to the appropriate agreement and exercise by the Trustees of
their discretion.

12.4                     The Company
shall ensure when necessary that it is in a position to satisfy or procure the
satisfaction of all rights to acquire Shares from time to time subsisting under
the Plan, taking account of other obligations of the Company in relation to the
provision of Shares.

12.5                     The Company
shall bear the costs of establishing and administering the Plan.

12.6                     The Company
shall maintain or cause to be maintained all necessary accounts and records
relating to the Plan.

13.                           EMPLOYEE RIGHTS

13.1                     No account
shall be taken of actual or prospective grants of Awards or rights in prospect
under them for the purpose of any redundancy payments or severance scheme
operating within the Group or for the purpose of a Participant’s right under
any pension scheme or arrangement.

 10
 

13.2                     Nothing in
this Plan or in any document issued pursuant to the Plan shall confer upon any
person any right to continue in the employ of any Group Company or shall affect
the right of any Group Company to terminate the employment of any person, or
shall impose upon any Group Company, the Committee, Trustee or their respective
agents and employees any liability for the loss of any rights under the Plan
which may result if that person’s employment is so terminated.  In no circumstances shall any Participant, by
reason of ceasing to be employed by any Group Company, or any part of the Plan
ceasing or failing to have a particular tax treatment or to be approved by the
Inland Revenue or any other revenue authority, be entitled to any compensation
for any loss of any actual or prospective right or benefit under the Plan which
he might otherwise have enjoyed, whether such compensation is claimed by way of
damages for wrongful or unfair dismissal or other breach of contract or by way
of compensation for loss of office or otherwise.

14.                           TAXATION AND OTHER REGULATORY REQUIREMENTS

14.1                     The grant of
an Award to an Eligible Employee and/or Participant under the Plan shall be
conditional upon the agreement of that Eligible Employee and/or Participant to
indemnify the Company or Group Company for any:-

14.1.1                      tax payable
in respect of the grant of such Award, Release or exercise pursuant to the
Income Tax (Employments) (Notional Payments) Regulations 1996 or otherwise; and

14.1.2                      employee’s
National Insurance contributions or other social charges in respect of the
grant of such Award, Release or exercise or otherwise (the payments together
referred to as the “Tax Payment”);

such agreement to be
deemed by such Eligible Employee and/or Participant not renouncing an Award
within 15 days of the Date of Grant pursuant to Rule 2.5.  Without prejudice to the foregoing in a case
where the Company or Group Company by virtue of the Release of an Award or in
the case of a Deferred Right, its exercise, will be obliged to make a Tax
Payment, the Release, unless the Company or Group Company has received payment
prior to the Release from the Participant of an amount not less than the Tax
Payment and/or an authority to deduct the same from such Participant’s Basic
Salary and/or that Participant gives irrevocable instructions to the Company’s
brokers (or any person acceptable to the Company or the Trustees in the case of
Awards granted by the Trustees) for the sale of sufficient Shares to realise an
amount equal to the Tax Payment and authority to pay the proceeds of such sale
to the Company or Group Company, shall not take place.

14.2                     The
Participant shall pay all expenses and taxes which arise or result from the
Release of an Award and/or the exercise of a Deferred Right or the transfer of
Shares, provided that the Company in its absolute discretion may meet any stamp
duty or liability for any other taxes or expenses arising from the Release of
an Award or the exercise of a Deferred Right which it deems appropriate.

14.3                     The Committee
may determine that any Award granted under the Plan shall be subject to additional
and/or modified terms and conditions relating to the grant, Release or exercise

 11
 

as may be necessary to comply with or take
account of any securities, exchange control or taxation laws, regulations,
practice or other laws of any territory which may apply to the relevant
Eligible Employee, Participant or Group Company.

14.4                     In exercising
its discretion under Rule 14.3 the Committee may:-

14.4.1                      require a
Participant to make such declarations or take such other action as may be
required for the purpose of any securities, exchange control or taxation laws,
regulations, practice or other laws of any territory which may be applicable to
him at the Date of Grant, Release or on exercise; and

14.4.2                      adopt any
supplemental rules or procedures governing the grant, Release or exercise of an
Award as may be required for the purpose of any securities, exchange control or
taxation laws, regulations, practice or other laws of any territory which may
be applicable to an Eligible Employee or Participant, provided that such rules
or procedures may not be adopted to the extent that they require the approval
of the Company in general meeting in accordance with Rule 15.1.1 of the Plan,
unless such approval has been obtained previously.

15.                           ADMINISTRATION AND AMENDMENT OF THE PLAN

15.1                     The Committee
shall have the power from time to time to make and amend such regulations for
the implementation and administration of the Plan in a manner consistent with
the Plan as it thinks fit and to make any amendments to these Rules provided
that:-

15.1.1                      the
provisions governing eligibility requirements, equity dilution, share
utilisation and individual participation limits and the adjustments that may be
made following a rights issue or any other variation of capital cannot be
altered to the advantage of Participants without the prior approval of
shareholders in general meeting (except for minor amendments to benefit the
administration of the Plan, or amendments to take account of a change of
legislation or to obtain or maintain favourable Tax, exchange control or
regulatory treatment for Participants in the Plan or for any Group Company);
and

15.1.2                      no
alteration may be made which would materially adversely affect any subsisting
rights of Participants granted prior to the date of the alteration without the
prior consent or sanction of the majority of that number of Participants who
responded to the notification by the Company of such proposed alteration.

15.2                     Any matters
pertaining or pursuant to the Plan which are not dealt with by these Rules and
any uncertainty or dispute as to the meaning of these Rules shall be determined
or resolved by decision of the Committee which shall be binding on the Company
and all Participants and/or Eligible Employees or, in relation to Awards
granted by the Trustees, determined or resolved by the Trustees.

15.3                     Any
amendments to these Rules relating to the operation of the Plan in a particular
jurisdiction shall be set out in a separate schedule to these Rules.

 12
 

16.                           NOTICE

16.1                     The
provisions of the Company’s Articles of Association from time to time with
regard to the service of notices on members shall apply mutatis mutandis to any
notice to be given under the Plan to a Participant or Eligible Employee.

16.2                     Notices or
documents under the Plan required to be given by the Company to an Eligible
Employee or Participant shall be properly given if delivered to him at his
normal place of work or sent to him by first class post at his last known
address and any notice or document required to be given to the Company shall be
properly given if delivered or sent by first class to the registered office of
the Company from time to time addressed to the Company Secretary.

16.3                     Participation
in the Plan shall not entitle a Participant to receive copies of any notice or
other document sent by the Company to its shareholders prior to the Release of
Awards.

17.                           TERMINATION

17.1                     Subject to
Rule 17.2, the Plan shall terminate on the earlier of the following dates:-

17.1.1                      any date
determined by the Committee to be the date of termination of the Plan; and

17.1.2                      the tenth
anniversary of the Adoption Date.

17.2                     The Company
in general meeting may at any time resolve to extend the Plan up to a further
10 years.

17.3                     Following
termination of the Plan pursuant to this Rule no further Awards shall be
granted, but the subsisting rights and obligations of Participants at that time
shall continue in force as if the Plan had not been terminated.

18.                           GOVERNING LAW

18.1                     The Rules and
the operation of the Plan shall be governed and construed in accordance with
English Law.

 13

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