Document:

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                                                                    Exhibit 10.2

(PHELPS DODGE LETTERHEAD)
               One North Central Avenue, Phoenix, AZ 85004 - (602) 366-8100

                                                                  March 16, 2005

Sumitomo Metal Mining Co., Ltd.
11-3, 5-Chome, Shimbashi
Minato-ku, Tokyo 105
Japan

Sumitomo Corporation
1-8-11, Harumi
Chuo-ku, Tokyo 104-8610
Japan

Ladies and Gentlemen:

      Reference is made to the Participation Agreement, dated as of March 16,
2005 (as amended, modified or supplemented from time to time, the "Participation
Agreement"), among SUMITOMO METAL MINING CO., LTD., a Japanese corporation
("SMM"), SUMITOMO CORPORATION, a Japanese corporation ("SC"), SUMMIT GLOBAL
MANAGEMENT B.V., a Dutch corporation ("SGM," and together with SMM and SC, the
"Sumitomo Parties"), COMPANIA DE MINAS BUENAVENTURA S.A.A., a Peruvian sociedad
anonima abierta ("BVN"), PHELPS DODGE CORPORATION, a New York corporation
("PDC"), CYPRUS AMAX MINERALS COMPANY, a Delaware corporation ("CAMC"), CYPRUS
METALS COMPANY, a Delaware corporation ("CMC"), CYPRUS CLIMAX METALS COMPANY, a
Delaware corporation (the "PD Participant"), and the SOCIEDAD MINERA CERRO VERDE
S.A.A., a Peruvian sociedad anonima abierta (the "Company"). Capitalized terms
used and not defined herein shall have the meanings ascribed to them in the
Participation Agreement.

      Pursuant to the Participation Agreement, (i) the Sumitomo Participant has
agreed, among other things, to subscribe for at least 73,511,763 Capital
Increase Shares in the General Capital Increase and (ii) the Company has agreed,
among other things, to return promptly (x) in United States dollars and without
deduction for Taxes the aggregate amount of consideration paid by the Sumitomo
Participant to subscribe for Capital Increase Shares and to purchase
Unsubscribed Shares (the "Aggregate Sumitomo Subscription Price") plus (y)
interest, calculated at a rate per annum equal to the Six Month LIBOR Rate, on
the Aggregate Sumitomo Subscription Price for the period commencing on June 30,
2005 and ending on the day before such Aggregate Sumitomo
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Subscription Price is returned if: (i) the Sumitomo Participant delivers written
notice to the Board on the Final Closing Date in its good faith and reasonable
judgment stating that the Capital Increase Closing Conditions have not been
satisfied or waived as of such date, (ii) the Board determines on or prior to
the Final Closing Date that the conditions set forth in section 7.2 of the
Participation Agreement (the "PD Closing Conditions") have not been satisfied or
waived as of such date or (iii) unless otherwise agreed by the Sumitomo
Participant, the Final Closing shall not have occurred by September 30, 2005.

      1. GUARANTEE. In order to induce the Sumitomo Parties to enter into the
Participation Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PDC hereby irrevocably
and unconditionally guarantees to SC, SMM and their respective successors and
assigns that the Company will perform all of its obligations to return promptly
(x) the Aggregate Sumitomo Subscription Price to the Sumitomo Participant plus
(y) interest, calculated at a rate per annum equal to the Six Month LIBOR Rate,
on the Aggregate Sumitomo Subscription Price for the period commencing on June
30, 2005 and ending on the day before such Aggregate Sumitomo Subscription Price
is returned if: (i) the Sumitomo Participant delivers written notice to the
Board on the Final Closing Date in its good faith and reasonable judgment
stating that the Capital Increase Closing Conditions have not been satisfied or
waived as of such date, (ii) the Board determines on or prior to the Final
Closing Date that the PD Closing Conditions have not been satisfied or waived as
of such date or (iii) unless otherwise agreed by the Sumitomo Participant, the
Final Closing shall not have occurred by September 30, 2005 (the "Repayment
Obligation").

      2. NATURE OF GUARANTEE. PDC's obligations under this guarantee letter
(this "Guarantee") shall not be affected by the validity or enforceability of
the Participation Agreement, the insolvency or bankruptcy of the Company or any
other circumstance relating to the Repayment Obligation, in each case that might
otherwise constitute a legal or equitable discharge or defense of a guarantor or
surety other than a breach of Section 3.2 of the Participation Agreement by the
Sumitomo Participant. The obligations of PDC under this Guarantee are absolute
and unconditional, and shall remain in full force and effect notwithstanding any
amendment of the Participation Agreement or any extension of time or other
indulgence or concession granted to the Company or any delay or failure by the
parties hereto or the Sumitomo Participant in pursuing any other remedies
available against the Company. No party hereto nor the Sumitomo Participant need
take any action against the Company, any other guarantor or any other person,
firm or corporation or resort to any security held by it at any time before
proceeding against PDC hereunder. PDC hereby expressly waives diligence,
presentment, demand of payment, filing of any claims relating to the Repayment
Obligation in the event that the Company becomes subject to a bankruptcy,
reorganization or similar proceeding, protest, notice and all demands
whatsoever, and, to the extent permitted by law, the benefit of all principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof.

                                       2
<PAGE>
      3. PAYMENTS FREE AND CLEAR OF TAXES, ETC. Any and all payments made by PDC
under this Guarantee shall be made without deduction for any present or future
taxes, withholding taxes, levies, imposts, duties or similar charges imposed by
the Republic of Peru or any local taxing authority therein ("Taxes"). If PDC
shall be required by law to deduct any Taxes from or in respect of any payment
hereunder, (i) such payment shall be increased so that after all required
deductions for Taxes have been made, such payment shall be equal to the amount
that would have been paid by PDC had no such deductions for Taxes been required
and made, (ii) PDC shall make such deductions and (iii) PDC shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law.

      4. EXPENSES. PDC agrees to pay on demand all fees and out-of-pocket
expenses (including the reasonable fees and expenses of the legal counsel to SC
and SMM) relating to the enforcement of the rights of SC and SMM under this
Guarantee; provided, that PDC shall not be liable for any expenses of SC or SMM
if no payment under this Guarantee is due.

      5. SUBROGATION. PDC shall be subrogated to all of the rights of the
Sumitomo Participant, SC and SMM and their successors and assigns against the
Company and its assets and properties in respect of any amounts paid by PDC
under this Guarantee; provided, that PDC shall not be entitled to exercise any
such subrogation rights or other rights against the Company arising out of, or
based upon, its performance of this Guarantee until all of the obligations,
together with any other amounts due by PDC pursuant to Paragraph 4 hereof, have
been paid in full. Upon payment in full of the Repayment Obligation, SC and SMM
agree to take at PDC's expense such steps as PDC may reasonably request to
implement any rights of subrogation.

      6. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of SC or SMM to
exercise, and no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by SC or
SMM of any right, remedy or power hereunder preclude any other or future
exercise of any right, remedy or power. Each and every right and remedy hereby
granted to SC or SMM or allowed to either SC or SMM by law shall be cumulative
and not exclusive of any other, and may be exercised by SC or SMM at any time or
from time to time.

      7. ASSIGNMENT. Neither this Guarantee nor any rights, interests or
obligations hereunder may be assigned to any other person (except by operation
of law) without the prior written consent of PDC, SC and SMM; provided, that SC
and SMM may, without the consent of PDC, transfer or assign their rights and
interests under this Guarantee to any of their respective affiliates including
SMM Cerro Verde Netherlands B.V.

      8. CONTINUING GUARANTEE. This Guarantee shall become and remain in full
force and effect and shall be a continuing guarantee and binding on PDC, its
successors

                                       3
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and assigns until the Repayment Obligation has been satisfied in full or
consummation of the Final Closing.

      9. GOVERNING LAW. This letter agreement shall in all respects be governed
by, and construed and enforced in accordance with, the laws of the State of New
York, without giving effect to the conflict of laws rules thereof to the extent
they are not mandatorily applicable by statute and would require or permit the
application of the laws of another jurisdiction.

      10. CONSENT TO JURISDICTION. PDC consents to the non-exclusive
jurisdiction of any court of the State of New York or any United States federal
court sitting in the Borough of Manhattan, New York City, New York, United
States, and any appellate court from any thereof, and waives any immunity from
the jurisdiction of such courts over any suit, action, or proceeding that may be
brought in connection with this Guarantee. PDC irrevocably waives, to the
fullest extent permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with this Guarantee in such courts
whether on the grounds of venue, residence, or domicile or on the ground that
any such suit, action, or proceeding has been brought in an inconvenient forum.
PDC agrees that final non-appealable judgment in any such suit, action, or
proceeding brought in such court shall be conclusive and binding upon PDC and
may be enforced in any court of the jurisdiction of which PDC is subject by a
suit upon such judgment.

      11. AMENDMENTS. No term or provision of this Guarantee shall be amended or
modified except in a writing signed by PDC, SC and SMM.

      12. SEVERABILITY. If any provision of this Guarantee or the application of
any provision hereof to any party hereto or set of circumstances is held
invalid, the remainder of this Guarantee and the application of such provision
to any other party or set of circumstances shall not be affected unless the
provisions held to be invalid shall substantially impair the benefits of the
remaining portions of this Guarantee.

      13. ENTIRE AGREEMENT. This Guarantee constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior oral and written discussions, representations and
understandings.

      14. COUNTERPARTS. This letter agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.

                  [Remainder of page intentionally left blank.]

                                       4
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      If you are in agreement with the matters set forth above, please sign this
Guarantee in the space indicated below and return it to the undersigned.

                                    Very truly yours,

                                    PHELPS DODGE CORPORATION

                                    By: /s/ Timothy R. Snider
                                        --------------------------------
                                        Name:  Timothy R. Snider
                                        Title: President and Chief Operating
                                               Officer

                                    By: /s/ Kalidas V. Madhavpeddi
                                        --------------------------------
                                        Name:  Kalidas V. Madhavpeddi
                                        Title: Senior Vice President

                                       5
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Acknowledged and agreed as of the date first above written.

SUMITOMO METAL MINING CO., LTD.

By:   /s/ Ichiro Abe
      ------------------------------
      Name:  Ichiro Abe
      Title: Executive Officer, General Manager of Mineral Resources Division

SUMITOMO CORPORATION

By:   /s/ Mitsuhiko Yamada
      ------------------------------
      Name:  Mitsuhiko Yamada
      Title: Corporate Officer, General Manager, Mineral Resources Division

                                       6EXHIBIT 4.1

 

Exhibit 4.1

BP p.l.c.

RULES OF THE BP p.l.c. MEDIUM TERM PERFORMANCE PLAN 2005

	 	 	 
	Adoption:
	 	[•] 2005
	    Expiry Date:
	 	[•] 2015

Linklaters

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

 

 

Table of Contents

	 	 	 	 	 	 	 
	Contents	 	 	Page
	1

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	Granting Performance Units
	 	 	2	 
	 
	 	 	 	 	 	 
	3

	 	Performance Units
	 	 	3	 
	 
	 	 	 	 	 	 
	4

	 	Making of Awards
	 	 	4	 
	 
	 	 	 	 	 	 
	5

	 	Leaving the Group before the end of the Performance Period
	 	 	6	 
	 
	 	 	 	 	 	 
	6

	 	Variations in share capital, demergers and special distributions
	 	 	7	 
	 
	 	 	 	 	 	 
	7

	 	Exchange of Performance Units
	 	 	8	 
	 
	 	 	 	 	 	 
	8

	 	Restrictions on issue of Shares
	 	 	9	 
	 
	 	 	 	 	 	 
	9

	 	Terms of employment
	 	 	9	 
	 
	 	 	 	 	 	 
	10

	 	General
	 	 	10	 
	 
	 	 	 	 	 	 
	11

	 	Changing the Plan and termination
	 	 	12	 
	 
	 	 	 	 	 	 
	12

	 	Governing law and jurisdiction
	 	 	12	 

i

 

Rules of the BP p.l.c. Medium Term Performance Plan 2005

Introduction

This plan sets out the terms on which awards of shares will be made to certain employees of
the Company and its Subsidiaries. Executives selected for participation in the Plan will be granted
a conditional entitlement to an award of shares (“Performance Units”). The extent to which shares
are awarded in respect of Performance Units is subject to continued employment and the satisfaction
of performance conditions over the performance period.

	1  	Definitions
	 
	   	In these rules:
	 
	   	“Acquiring Company” means a person who obtains Control of the Company;
	 
	   	“ADS” means an American depository share representing ordinary shares of the Company;
	 
	   	“Award” means an award of Shares under Rule 4;
	 
	   	“Award Date” means the date on which an Award is made under any of rules 4, 5 or 6;
	 
	   	“Business Day” means a day on which the London Stock Exchange (or, if relevant and if the
Committee determines, any stock exchange nominated by the Committee on which the Shares are
traded) is open for the transaction of business;
	 
	   	“Cause” means termination in circumstances in which the employer can terminate employment
without notice;
	 
	   	“Committee” means a committee or committees duly authorised to operate the Plan;
	 
	   	“Company” means BP p.l.c.;
	 
	   	“Control” has the meaning given to it by Section 840 of the Income and Corporation Taxes Act
1988;
	 
	   	“Dealing Restrictions” means restrictions imposed by statute, order, regulation or
Government directive, or by the Model Code or any code adopted by the Company based on the
Model Code;
	 
	   	“Grant Date” means the date which the Committee sets for the grant of a Performance Unit;
	 
	   	“Grantor” means, in respect of a Performance Unit, the entity which grants that Performance
Unit under the Plan;
	 
	   	“London Stock Exchange” means London Stock Exchange plc;
	 
	   	“Member of the Group” means:

	 	(i)  	the Company; and
	 
	 	(ii)  	its Subsidiaries from time to time; and
	 
	 	(iii)  	any other company which is associated with the Company and is so designated by
the Committee;

	   	“Model Code” means the UK Listing Authority Model Code for transactions in securities by
directors, certain employees and persons connected with them;

1

 

	   	“Participant” means a person holding a Performance Unit or his personal representatives;
	 
	   	“Performance Conditions” means the conditions imposed under rule 2.4;
	 
	   	“Performance Period” means the period over which the Performance Conditions are to be
satisfied which will not normally be less than 3 financial years of the Company;
	 
	   	“Performance Unit” means a conditional entitlement to an Award granted to a Participant;
	 
	   	“Plan” means these rules known as “The BP p.l.c. Medium Term Performance Plan 2005” as
changed from time to time;
	 
	   	“Plan Administrator” means the person or persons appointed by the Committee as the plan
administrator for the purposes of rule 5.2;
	 
	   	“Regulatory Information Service” means a service listed in schedule 12 to the UK Listing
Authority Listing Rules;
	 
	   	“Shareholding Guidelines” means the guidelines established by the Company from time to time
and which provide for certain employees to hold Shares;
	 
	   	“Shares” means fully paid ordinary shares in the capital of the Company;
	 
	   	“Subsidiary” means a company which is a subsidiary of the Company within the meaning of
Section 736 of the Companies Act 1985;
	 
	2  	Granting Performance Units
	 
	2.1  	Grantor
	 
	   	Performance Units will be granted by the Grantor. The Grantor of Performance Units must
be either:

	 	2.1.1  	the Company;
	 
	 	2.1.2  	any other Member of the Group; or
	 
	 	2.1.3  	a trustee of any trust set up for the benefit of employees of any Member of
the Group.

	   	Performance Units granted under the Plan, and the terms of those Performance Units, must be
approved in advance by the Committee.
	 
	2.2  	Eligibility
	 
	   	The Grantor may grant Performance Units to any employee of the Company or any
Subsidiary. However, Performance Units may not be granted to an employee who on the Grant
Date is either (i) a director of the Company or (ii) an employee whose employment has been
or is to be terminated, whether or not notice of termination of employment has been given or
received and whether or not such termination is lawful, unless in the case of (ii) only the
Committee consider that special circumstances exist.
	 
	   	In determining whether or not an employee will be granted Performance Units and the number
of any Performance Units the Grantor may have regard to the extent to which the employee has
satisfied the Shareholding Guidelines.

2

 

	2.3  	Time of Operation
	 
	   	Performance Units may only be granted within 42 days starting on any of the following:

	 	2.3.1  	the date of adoption of the Plan;
	 
	 	2.3.2  	the day after the announcement of the Company’s results through a
Regulatory Information Service for any period;
	 
	 	2.3.3  	any day on which the Committee resolves that exceptional circumstances
exist which justify the grant of Performance Units;
	 
	 	2.3.4  	any day on which changes to the legislation or regulations affecting share
plans are announced, effected or made; or
	 
	 	2.3.5  	the lifting of Dealing Restrictions which prevented the granting of
Performance Units during any period specified above.

	2.4  	Conditions
	 
	   	Awards in respect of Performance Units shall be subject to the satisfaction of
Performance Conditions specified at the Grant Date. The Grantor, subject to the consent of
the Committee, may waive or change the Performance Conditions in accordance with their terms
or in any way they see fit. Notwithstanding anything else in the Plan, an Award will only be
made in respect of Performance Units to the extent that any Performance Conditions are
satisfied or waived.
	 
	2.5  	Certificates
	 
	   	Each Participant will receive a certificate setting out the terms of the Performance
Units as soon as practicable after the Grant Date. A certificate will include a statement
that English law governs the certificate and its construction. If any certificate is lost or
damaged the Company may replace it on such terms as it decides.
	 
	2.6  	No payment
	 
	   	A Participant is not required to pay for the grant of Performance Units.

	 
	2.7  	 Disclaimer of Performance Units
	 
	   	Any Participant may disclaim all or part of his Performance Units within 30 days after
the Grant Date by notice in writing to any person nominated by the Grantor. If this happens,
the Performance Units will be deemed never to have been granted under the Plan. A
Participant is not required to pay for the disclaimer.
	 
	3  	Performance Units
	 
	3.1  	Terms of Grant
	 
	   	Performance Units are subject to the rules of the Plan. The terms of the grant of
Performance Units, as determined by the Grantor and approved by the Committee, must be
notified to the Participant and must include:

	 	3.1.1  	the maximum number of Shares which may be awarded in respect of Performance
Units; and
	 
	 	3.1.2  	the Performance Conditions specified under rule 2.4.

3

 

	3.2  	Rights
	 
	   	A Participant will have no rights of a shareholder (e.g. voting or dividends) in
respect of Performance Units.
	 
	4  	Making of Awards
	 
	4.1  	Determination of Performance Conditions and making of Awards
	 
	   	As soon as practicable following the end of the Performance Period (or at any other
time where the rules state that the Performance Conditions should be applied) the Committee
will determine whether and to what extent the Performance Conditions have been satisfied and
how many Shares should be awarded in respect of Performance Units and whether or not any
Shares comprised in an Award in respect of any Participant shall be restricted under rule
4.7.
	 
	   	The number of Shares (if any) in respect of which an Award may be made for each Performance
Unit is two.
	 
	   	Once the determination is made under this rule 4.1 the Grantor will make an Award of Shares.
The determination is the Award Date.
	 
	4.2  	Consequences
	 
	   	To the extent that an Award has been made under any of rules 4, 5 or 6, the Grantor
will procure the transfer of Shares to the Participant (or as he may direct) as soon as
practicable after the Award Date. The Participant will be entitled to all rights to Shares
where the record dates fall after the date of transfer.
	 
	4.3  	Lapse
	 
	   	If a Performance Unit lapses under the Plan an Award cannot be made and a Participant
has no rights in respect of the Performance Unit.
	 
	4.4  	Cash alternative
	 
	   	The Grantor in its absolute discretion may decide to satisfy Awards by paying an
equivalent amount in cash (subject to the withholding provisions in rule 4.6 (Withholding)).
The cash amount must be equal to the Market Value of the Shares in respect of which the
Award was to be made.
	 
	   	For the purposes of this rule, “Market Value” means in relation to a Share on any day:

	 	4.4.1  	the middle market quotation (as derived from the Daily Official List of the
London Stock Exchange) on the immediately preceding Business Day; or
	 
	 	4.4.2  	if the Committee so decides, the average of the middle market quotations on
the three immediately preceding Business Days; and
	 
	 	4.4.3  	in relation to an ADS on any day the average of the highest and lowest
trading prices or an ADS as derived from the New York Stock Exchange Inc. on the
immediately preceding Business Day or the average of such prices for the three
immediately preceding Business Days.

4

 

	4.5  	ADSs
	 
	   	The Committee may determine, in its absolute discretion, that an Award will be made in
respect of ADSs and references in these rules to Shares and Awards etc. shall be construed
accordingly.
	 
	4.6  	Withholding
	 
	   	The Company, the Grantor, any employing company or trustee of any employee benefit
trust may withhold such amount and make such arrangements as it considers necessary to meet
any liability to taxation or social security contributions in respect of Awards. These
arrangements may include the sale of any Shares on behalf of the Participant.
	 
	4.7  	Restrictions on disposal of Shares

	 	4.7.1  	This rule 4.7 applies where the Committee determines that having regard to
the Shareholding Guidelines some or all Shares comprised in an Award of a Participant
are to be restricted shares (“Restricted Shares”).
	 
	 	4.7.2  	Where this rule 4.7 applies the Participant may not sell, transfer, assign,
pledge, encumber or otherwise dispose of the Restricted Shares or any right in respect
of them until a date determined by the Committee and subject to such conditions as the
Committee may impose.
	 
	 	4.7.3  	The restrictions in this rule 4.7 do not apply to a sale of Shares to
comply with rule 4.6 (Withholding) or disposals confirmed to the Participant at the
discretion of the Committee.
	 
	 	4.7.4  	In order to give effect to the restrictions in this rule 4.7, the Company
may make such arrangements as it considers appropriate including transferring the
Shares to a nominee to be held on behalf of the Participant.

	4.8  	Dividend equivalents [Formula to be adjusted to take account of reinvested dividends]
	 
	   	The number of Shares awarded under 4.1 shall be adjusted by adding a number of Shares
calculated as follows:

(A x B)

      C

	   	Where
	 
	   	A = the sum of the net dividend paid on Shares with record dates falling between
the Grant Date and the Award Date.
	 
	   	B = the number of Shares determined under rule 4.1.
	 
	   	C = the middle market quotation of a Share as derived from the Daily Official
List of the London Stock Exchange on the date of determination under rule 4.1.

5

 

	5  	Leaving the Group before the end of the Performance Period
	 
	5.1  	General rule on leaving employment
	 
	   	Unless rule 5.2 applies, if a Participant ceases to be an employee or director of a
Member of the Group before the end of the Performance Period, then all his Performance Units
lapse on the date of cessation unless the Committee decides otherwise.
	 
	5.2  	Leaving in exceptional circumstances

	 	5.2.1  	If a Participant ceases to be an employee or director of any Member of the
Group for any of the reasons set out below more than 12 months after the start of the
Performance Period, then his Performance Units do not lapse and an Award may be made to
him at the end of the Performance Period in accordance with rule 4.1. The reasons are:

	 	(i)  	ill-health, injury or disability;
	 
	 	(ii)  	retirement with the agreement of the Company;
	 
	 	(iii)  	the Participant’s employing company ceasing to be under the
Control of the Company;
	 
	 	(iv)  	a transfer of the undertaking, or the part of the undertaking,
in which the Participant works to a person which is neither under the Control
of the Company nor a Member of the Group;
	 
	 	(v)  	redundancy, but only in circumstances which give rise to a
redundancy payment;
	 
	 	(vi)  	termination by the Participant’s employer other than for Cause
or where the termination involves the conduct of the Participant, subject in
both cases to the agreement of the Plan Administrator; or
	 
	 	(vii)  	any other reason, if the Committee so decides in any
particular case.

	 	5.2.2  	The Committee must exercise any discretion provided for in rule 5.2.1
within 30 days after cessation of the relevant Participant’s employment or office and
the Performance Units will lapse or Awards may be made (as appropriate) on the earlier
of the date on which the discretion is exercised and the end of the 14 day period.

	5.3  	Leaving after the end of the Performance Period but before the making of an Award
	 
	   	If a Participant ceases to be an employee or director of any member Group for any
reason in circumstances where the Performance Period has ended but Awards have not been made
(because, for example, any Dealing Restrictions), his Performance Units will not lapse and
Awards may be made in accordance with rule 4.1. Rule 4.3 will equally apply to determine the
consequences of the making of an Award.
	 
	5.4  	Death
	 
	   	If a Participant dies, his Performance Units do not lapse and an Award may be made to
him as soon as possible after the date of death. The number of Shares awarded will be on

6

 

	   	the basis of one Share for each Performance Unit unless the Committee decides otherwise
having regard to the performance of the Company as against the Performance Conditions.
	 
	5.5  	Meaning of “ceasing to be an employee or director”
	 
	   	For the purposes of this rule 5, a Participant will not be treated as ceasing to be an
employee or director of a Member of the Group until he ceases to be an employee or director
of all Members of the Group or if he recommences employment with a Member of the Group
within 7 days.
	 
	6  	Variations in share capital, demergers and special distributions
	 
	6.1  	Application of Rule
	 
	   	If, before the transfer of Shares pursuant to an Award, there is:

	 	6.1.1  	a variation in the equity share capital of the Company, including a
capitalisation or rights issue, sub-division, consolidation or reduction of share
capital; or
	 
	 	6.1.2  	a demerger (in whatever form) or exempt distribution by virtue of Section
213 of the Income and Corporation Taxes Act 1988; or
	 
	 	6.1.3  	a special dividend or distribution,

	   	then the number of Shares comprised in an Award shall be adjusted in such manner as the
Committee may determine.
	 
	6.2  	Takeovers
	 
	   	Where, before the end of the Performance Period, a person (or a group of persons acting
in concert) obtains Control of the Company as a result of making an offer to acquire Shares,
an Award will be made to a Participant, subject to rule 6.4 (Exchange) and subject to the
extent to which the Performance Conditions have been satisfied, immediately prior to the
time the person obtains Control.
	 
	6.3  	Schemes of arrangement
	 
	   	When, before the end of the Performance Period, a court sanctions a compromise or
arrangement in connection with the acquisition of Shares, an Award will be made to a
Participant, subject to rule 6.4 and subject to the extent to which the Performance
Conditions have been satisfied immediately prior to the time of court sanction. This rule
applies to a court sanction under Section 425 of the Companies Act 1985 or equivalent
procedure under local legislation.
	 
	6.4  	Exchange
	 
	   	An Award will not be made under either rule 6.2 or 6.3 but Performance Units will be
exchanged under rule 7 (Exchange of Performance Units) to the extent that:

	 	6.4.1  	an offer to exchange the Performance Units is made and accepted by a
Participant; or
	 
	 	6.4.2  	the Committee, with the consent of the Acquiring Company, decides before
the person obtain Control (where rule 6.2 applies) or court sanction (where rule 6.3
applies) that the Performance Units will be automatically exchanged.

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	6.5  	Demergers or other corporate events

	 	6.5.1  	If the Committee becomes aware that the Company is or is expected to be
affected by any demerger, distribution (other than an ordinary dividend) or other
transaction not falling within rules 6.2 (Takeover), or 6.3 (Schemes of arrangement)
which, in the opinion of the Committee would affect the current or future value of any
Performance Units, the Committee may determine that an Award will be made to a
Participant and subject to the extent to which the Performance Conditions have been
satisfied.
	 
	 	6.5.2  	The Company will notify any Participant who is affected by the Committee
exercising their discretion under this rule.

	6.6  	Committee
	 
	   	In this rule, “Committee” means those people who were members of the Committee
immediately before the change of Control.
	 
	6.7  	Overseas transfer
	 
	   	If a Participant is transferred to work in another country and, as a result of that
transfer he would:

	 	6.7.1  	suffer a tax disadvantage in relation to his Performance Units and/or the
making of an Award (this being shown to the satisfaction of the Committee); or
	 
	 	6.7.2  	become subject to restrictions on his ability to receive or to hold or deal
in the Shares or the proceeds of the sale of the Shares acquired on the making of an
Award because of the security laws or exchange control laws of the country to which he
is transferred;

	   	then if the Participant continues to hold an office or employment with a Member of the
Group, the Committee may decide that the Awards will be made on a date they choose before or
after the transfer takes effect. The Award will be made in respect of the number of
Performance Units they permit and any Performance Units then outstanding will [not] lapse.
	 
	7  	Exchange of Performance Units
	 
	7.1  	Timing of exchange
	 
	   	Where Performance Units are to be exchanged under rules 6.2 and 6.3 (Takeovers and
Schemes of arrangements) the exchange will take place as soon as practicable after the
relevant event.
	 
	7.2  	Exchange terms
	 
	   	Where a Participant is granted new performance units in exchange for existing
Performance Units, the new performance units:

	 	7.2.1  	must be equivalent to the existing Performance Units;
	 
	 	7.2.2  	is treated as having been acquired at the same time as the existing
Performance Units and Awards will be made in the same manner and at the same time;

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	 	7.2.3  	is governed by the Plan as if references to Shares were references to the shares over
which the new award is granted and references to the Company were
references to the Acquiring Company;
	 
	 	7.2.4  	may provide (at the discretion of the Committee) that the making of Awards
is subject to performance conditions.

	8  	Restrictions on issue of Shares
	 
	   	No Shares will be issued or transferred from treasury to satisfy Awards unless the
Company in general meeting approves in advance such issue or transfer if such approved is
required.
	 
	9  	Terms of employment

	 	9.1.1  	For the purposes of this rule, “Employee” means any person who is or will
be eligible to be a Participant.
	 
	 	9.1.2  	This rule applies:

	 	(i)  	whether the Company has full discretion in the operation of the
Plan, or whether the Company could be regarded as being subject to any
obligations in the operation of the Plan;
	 
	 	(ii)  	during an Employee’s employment or employment relationship; and
	 
	 	(iii)  	after the termination of an Employee’s employment or
employment relationship, whether the termination is lawful or unlawful.

	 	9.1.3  	Nothing in the rules or the operation of the Plan forms part of the
contract of employment or employment relationship of an Employee. The rights and
obligations arising from the employment relationship between the Employee and the
Company are separate from, and are not affected by, the Plan. Participation in the Plan
does not create any right to, or expectation of, continued employment or a continued
employment relationship.

	 	9.1.4  	The grant of Performance Units on a particular basis in any year does not
create any right to or expectation of the grant of Performance Units on the same basis,
or at all, in any future year.

	 	9.1.5  	No Employee is entitled to participate in the Plan, or be considered for
participation in it, at a particular level or at all. Participation in one operation of
the Plan does not imply any right to participate, or to be considered for participation
in any later operation of the Plan.

	 	9.1.6  	Without prejudice to an Employee’s right in respect of Performance Units or
an Award subject to and in accordance with the express terms of the Plan, no Employee
has any rights in respect of the exercise or omission to exercise any discretion, or
the making or omission to make any decision, relating to the Performance Units or the
Award. Any and all discretions, decisions or omissions relating to the Performance
Units or the Award may operate to the disadvantage of the Employee, even if this could
be regarded as capricious or unreasonable, or could be regarded as in breach of any
implied term between the Employee and his employer, including any implied duty of trust
and confidence. Any such implied term is excluded and overridden by this rule.

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	 	9.1.7  	No Employee has any right to compensation for any loss in relation to the
Plan, including:

	 	(i)  	any loss or reduction of any rights or expectations under the
Plan in any circumstances or for any reason (including lawful or unlawful
termination of employment or the employment relationship);
	 
	 	(ii)  	any exercise of a discretion or a decision taken in relation to
Performance Units or an Award or to the Plan, or any failure to exercise a
discretion or take a decision;
	 
	 	(iii)  	the operation, suspension, termination or amendment of the
Plan.

	 	9.1.8  	Participation in the Plan is permitted only on the basis that the
Participant accepts all the provisions of its rules, including in particular this rule.
By participating in the Plan, an Employee waives all rights under the Plan, other than
the right to acquire shares subject to and in accordance with the express terms of the
Plan and the Performance Condition, in consideration for, and as a condition of, the
grant of Performance Units under the Plan.
	 
	 	9.1.9  	Nothing in this Plan confers any benefit, right or expectation on a person
who is not an Employee. No such third party has any rights under the Contracts (Rights
of Third Parties) Act 1999 to enforce any term of this Plan. This does not affect any
other right or remedy of a third party which may exist.
	 
	 	9.1.10  	Each of the provisions of this rule is entirely separate and independent
from each of the other provisions. If any provision is found to be invalid then it will
be deemed never to have been part of these rules and to the extent that it is possible
to do so, this will not affect the validity or enforceability of any of the remaining
provisions.

	10  	General
	 
	10.1  	Committee’s decisions final and binding
	 
	   	The decision of the Committee on the interpretation of the Plan or in any dispute
relating to Performance Units or an Award or matter relating to the Plan will be final and
conclusive.
	 
	10.2  	Documents sent to shareholders
	 
	   	The Company may send to Participants copies of any documents or notices normally sent
to the holders of its Shares at or around the same time as issuing them to the holders of
its Shares.
	 
	10.3  	Costs
	 
	   	The Company may ask a Participant’s employer to bear the costs in respect of
Performance Units or an Award to that Participant.
	 
	10.4  	Regulations
	 
	   	The Committee has the power from time to time to make or vary regulations for the
administration and operation of the Plan but these must be consistent with its rules.

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	10.5  	Employee trust
	 
	   	The Company and any Subsidiary may provide money to the trustee of any 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 of the Companies Act 1985.
	 
	10.6  	Data protection
	 
	   	By participating in the Plan the Participant consents to the holding and processing of
personal data provided by the Participant to the Company for all purposes relating to the
operation of the Plan. These include, but are not limited to:

	 	10.6.1  	administering and maintaining Participant records;
	 
	 	10.6.2  	providing information to trustees of any employee benefit trust,
registrars, brokers or third party administrators of the Plan;
	 
	 	10.6.3  	providing information to future purchasers of the Company or the business
in which the Participant works;
	 
	 	10.6.4  	transferring information about the Participant to a country or territory
outside the European Economic Area.

	   	To the extent a Participant has already entered into any other data protection agreement,
with any Member of the Group this rule 10.6 will be interpreted so as not to be inconsistent
with or to limit that existing or this agreement.
	 
	10.7  	Consents
	 
	   	All allotments and transfers of Shares will be subject to any necessary consents under
any relevant enactments or regulations for the time being in force in the United Kingdom or
elsewhere. The Participant will be responsible for complying with any requirements he needs
to fulfil in order to obtain or avoid the necessity for any such consent.
	 
	10.8  	Articles of association
	 
	   	Any Shares acquired under the Plan are subject to the articles of association of the
Company from time to time in force.
	 
	10.9  	Notices

	 	10.9.1  	Any notice or other document which has to be given to a person who is or
will be eligible to be a Participant under or in connection with the Plan may be:

	 	(i)  	delivered or sent by post to him at his home address according
to the records of his employing company; or
	 
	 	(ii)  	sent by e-mail or fax to any e-mail address or fax number which
according to the records of his employing company is used by him;

	 	    	or in either case such other address which the Company considers appropriate.
	 
	 	10.9.2  	Any notice or other document which has to be given to the Company or other
duly appointed agent under or in connection with the Plan may be delivered or sent by
post to it at its registered office (or such other place as the Committee or duly
appointed agent may from time to time decide and notify to Participants) or sent by
e-mail or fax to any e-mail address or fax number notified to the Participant.

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	 	   	Notices sent by post will be deemed to have been given on the second day after the date of
posting. However, notices sent by or to a Participant who is working overseas will be deemed
to have been given on the seventh day after the date of posting. Notices sent by e-mail or
fax, in the absence of evidence to the contrary, will be deemed to have been received on the
day after sending.

	11  	Changing the Plan and termination
	 
	11.1  	Committee’s powers
	 
	   	The Committee may at any time change the Plan in any way.
	 
	11.2  	Notice
	 
	   	The Committee may give written notice of any changes made to any Participant affected.
	 
	12  	Governing law and jurisdiction
	 
	   	English law governs the Plan and all Performance Units and Awards and their
construction. The English Courts have non-exclusive jurisdiction in respect of disputes
arising under or in connection with the Plan, Performance Units or any Award.

12

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