Document:

Form of Note

 Exhibit 4.01 
  
 THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO A NOMINEE OF DTC
OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO CITIGROUP FUNDING INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  

					
	No. R-1	 	 	  	INITIAL PRINCIPAL AMOUNT
	CUSIP 17308C 20 5	 	 	  	REPRESENTED $51,750,000
	ISIN US17308C2052	 	 	  	representing 5,175,000 Notes
	 	 	 	  	($10 per Note)

  
 CITIGROUP FUNDING INC.

 5,175,000 Principal-Protected Equity Linked Notes Based Upon the S&P 500 Index 
 with Potential Supplemental Interest at Maturity Due December 30, 2008 
  
 Citigroup Funding Inc., a Delaware corporation (hereinafter referred to as the “Company”, which term includes any successor corporation under
the Indenture herein referred to), for value received and on condition that this Note is not redeemed by the Company prior to December 30, 2008 (the “Stated Maturity Date”), hereby promises to pay to CEDE & CO., or its registered
assigns, the Maturity Payment (as defined below), on the Stated Maturity Date. This Note will not bear any interest, is not subject to any sinking fund, is not subject to redemption at the option of the Holder thereof prior to the Stated Maturity
Date and is not subject to the defeasance provisions of the Indenture. The payments on this Note are fully and unconditionally guaranteed by Citigroup Inc., a Delaware corporation (the “Guarantor”). 
  
 Payment of the Maturity Payment with respect to this Note shall be made upon
presentation and surrender of this Note at the corporate trust office of the Trustee in the Borough of Manhattan, The City and State of New York, in such coin or currency of the United States as at the time of payment is legal tender for payment of
public and private debts. 
  
 This Note is one of the series of
5,175,000 Principal-Protected Equity Linked Notes Based Upon the S&P 500 Index (the “Index”) with Potential Supplemental Interest at Maturity Due 2008 (the “Notes”). 

 INTEREST 
  
 The Notes do not bear interest. No payments on the Notes will be made until the Stated Maturity Date. 
  
 PAYMENT AT MATURITY 
  
 The Notes will mature on December 30, 2008. On the Stated Maturity Date, Holders of the Notes will receive for each Note the
Maturity Payment described below. 
  
 DETERMINATION OF THE MATURITY PAYMENT

  
 The Maturity Payment for each Note equals the sum of the
initial principal amount of $10 per Note plus the Interest Distribution Amount. 
  
 The “Interest Distribution Amount” is calculated as follows: 
  

	 	•	 	If the Index Return is less than or equal to zero, the Interest Distribution Amount will equal zero. 

  

	 	•	 	If the Index Return is greater than zero, the Interest Distribution Amount will equal the product of: 

  
 $10 * (Index Return) 
  
 The “Index Return” will equal the following fraction: 
  
 Average Ending Value – Starting Value 
 Starting Value 
  
 The “Average Ending Value” will equal the arithmetic average of all monthly Ending Values. 
  
 The “Ending Value” for each Valuation Date will be the closing value of the S&P 500 Index on such Valuation Date or, if that day is not an
Index Business Day, the closing value on the immediately following Index Business Day. 
  
 The “Starting Value” is 1191.57, the closing value of the S&P 500 Index on June 24, 2005. 
  
 “Valuation Dates” occur on the 24th day of each month, commencing July 25, 2005 and ending on December 24, 2008. 
  
 An “Index Business Day” means a day, as determined by the
calculation agent, on which the Index or any successor index is calculated and published and on which securities comprising more than 80% of the value of the Index on such day are capable of being traded on their relevant exchanges during the
one-half hour before the determination of the closing value of the Index. All determinations made by the calculation agent will be at the sole discretion of the calculation agent and will be conclusive for all purposes and binding on the Company and
the beneficial owners of the Notes, absent manifest error. 

 A “Market Disruption Event” means, as determined by the calculation agent in its sole
discretion, the occurrence or existence of any suspension of or limitation imposed on trading (by reason of movements in price exceeding limits permitted by any relevant exchange or market or otherwise) of, or the unavailability, through a
recognized system of public dissemination of transaction information, for a period longer than two hours, or during the one-half hour period preceding the close of trading, on the applicable exchange or market, of accurate price, volume or related
information in respect of (a) stocks which then comprise 20% or more of the value of the Index or any successor index, (b) any options or futures contracts, or any options on such futures contracts relating to the Index or any successor index, or
(c) any options or futures contracts relating to stocks which then comprise 20% or more of the value of the Index or any successor index on any exchange or market if, in each case, in the determination of the calculation agent, any such suspension,
limitation or unavailability is material. For the purpose of determining whether a Market Disruption Event exists at any time, if trading in a security included in the Index is materially suspended or materially limited at that time, then the
relevant percentage contribution of that security to the value of the Index will be based on a comparison of the portion of the value of the Index attributable to that security relative to the overall value of the Index, in each case immediately
before that suspension or limitation. 
  
 If no closing value of
the Index is available on any Index Business Day because of a Market Disruption Event or otherwise, the value of the Index for that Index Business Day, unless deferred by the calculation agent as described below, will be the arithmetic mean, as
determined by the calculation agent, of the value of the Index obtained from as many dealers in equity securities (which may include Citigroup Global Markets Inc. or any of the Company’s other affiliates), but not exceeding three such dealers,
as will make such value available to the calculation agent. The determination of the value of the Index by the calculation agent in the event of a Market Disruption Event may be deferred by the calculation agent for up to five consecutive Index
Business Days on which a Market Disruption Event is occurring, but not past the Index Business Day prior to the Stated Maturity Date. 
  
 DISCONTINUANCE OF THE S&P 500 INDEX 
  
 If S&P discontinues publication of the Index or if it or another entity publishes a successor or substitute index that the calculation agent
determines, in its sole discretion, to be comparable to the Index, then the Ending Value of any succeeding Valuation Date will be determined by reference to the value of that index, which is referred to as a “successor index.” 

 
 Upon any selection by the calculation agent of a successor index, the
calculation agent will cause notice to be furnished to the Company and the Trustee, who will provide notice of the selection of the successor index to the registered Holders of the Notes. 
  
 If S&P discontinues publication of the Index and a successor index is not selected by the calculation agent or is no
longer published on any Valuation Date, the index value to be substituted for the Index for that Valuation Date will be a value computed by the calculation agent for that Valuation Date in accordance with the procedures last used to calculate the
Index prior to any such discontinuance. 

 If S&P discontinues publication of the Index prior to the determination of the Interest Distribution
Amount and the calculation agent determines that no successor index is available at that time, then on each Index Business Day until the earlier to occur of (a) the determination of the Interest Distribution Amount and (b) a determination by the
calculation agent that a successor index is available, the calculation agent will determine the value that is to be used in computing the Interest Distribution Amount as described in the preceding paragraph as if such day were a Valuation Date. The
calculation agent will cause notice of each such value to be published not less often than once each month in The Wall Street Journal (or another newspaper of general circulation). 
  
 If a successor index is selected or the calculation agent calculates a value as a substitute for the Index as described
above, the successor index or value will be substituted for the Index for all purposes, including for purposes of determining whether an Index Business Day or Market Disruption Event occurs. 
  
 All determinations made by the calculation agent will be at the sole
discretion of the calculation agent and will be conclusive for all purposes and binding on the Company, the Guarantor and the beneficial owners of the Notes, absent manifest error. 
  
 ALTERATION OF METHOD OF CALCULATION 
  
 If at any time the method of calculating the Index or a successor index is changed in any material respect, or if the Index or a successor index is in any
other way modified so that the value of the Index or the successor index does not, in the opinion of the calculation agent, fairly represent the value of that index had the changes or modifications not been made, then, from and after that time, the
calculation agent will, at the close of business in New York, New York, make those adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a calculation of a value of a stock index comparable to
the Index or the successor index as if the changes or modifications had not been made, and calculate the closing value with reference to the Index or the successor index. Accordingly, if the method of calculating the Index or the successor index is
modified so that the value of the Index or the successor index is a fraction or a multiple of what it would have been if it had not been modified (e.g., due to a split in the Index), then the calculation agent will adjust that index in order
to arrive at a value of the index as if it had not been modified (e.g., as if the split had not occurred). 
  
 GENERAL 
  
 This Note is one of a duly authorized issue of debt securities (the “Debt Securities”) of the Company, issued and to be issued in one or more series under a Senior Debt Indenture, dated as of June 1, 2005
(the “Indenture”), among the Company, Citigroup Inc., as guarantor (the “Guarantor”), and The Bank of New York, as trustee (the “Trustee”, which term includes any successor trustee under the Indenture), to which
Indenture reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Notes, and the terms upon which the Notes are, and
are to be, authenticated and delivered. 

 In case an Event of Default with respect to the Notes shall have occurred and be continuing, the
principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. In such case, the amount declared due and payable upon any acceleration permitted by the Indenture will be determined by the
calculation agent and will be equal to, with respect to this Note, the Maturity Payment, calculated as though the Stated Maturity Date of this Note were the date of early repayment. 
  
 In case of default in payment at Maturity of the Notes, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the Notes, from and after Maturity through the date when payment of the unpaid amount has been made or duly provided for, at the rate of 4.5% per annum on the unpaid amount due. 
  
 The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the Company, the Guarantor and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company, the Guarantor and a
majority in aggregate principal amount of the Debt Securities at the time Outstanding of each series affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of all Debt Securities of such series, to waive compliance by the Company and the Guarantor with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 
  
 The Holder of this Note may not enforce such Holder’s rights pursuant to the Indenture or the Notes except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company and the Guarantor to pay the Maturity Payment with respect to this Note, and to pay any interest on any overdue amount
thereof at the time, place and rate, and in the coin or currency, herein prescribed. 
  
 All terms used in this Note which are defined in the Indenture but not in this Note shall have the meanings assigned to them in the Indenture. 
  
 Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any purposes. 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

  

			
	CITIGROUP FUNDING INC.
		
	By:	 	 /s/ Geoffrey S. Richards

	Name:	 	Geoffrey S. Richards
	Title:	 	Vice President and Assistant Treasurer

  

			
	Corporate Seal
	Attest:
		
	By:	 	 /s/ Douglas C. Turnbull

	Name:	 	Douglas C. Turnbull
	Title:	 	Assistant Secretary
	
	Dated: June 29, 2005
	
	CERTIFICATE OF AUTHENTICATION
	        This is one of the Notes referred to in
	        the within-mentioned Indenture.
	
	The Bank of New York,
	as Trustee
		
	By:	 	 /s/ Geovanni Barris

	 	 	Authorized SignatoryContract of Employment between Scottish Power plc and Simon Lowth

 Exhibit 4.5 
  

THIS AGREEMENT is made on 1 August 2003 
  
 BETWEEN 
  

	(1)	SCOTTISH POWER PLC, a company with the number SC193794 and which has its registered office at 1 Atlantic Quay, Glasgow G2 8SP (the Company); and

  

	(2)	SIMON J LOWTH of 19 Lyndhurst Road, Hampstead, London, NW3 5NX (the Employee) 

  
 IT IS AGREED as follows:- 
  

	 	1.	DEFINITIONS 

  
 1.1 In this Agreement the following expressions shall have the following meanings: 
  
 Board means the board of directors of the Company or a duly constituted committee of the Board; 
  
 Confidential Information shall have the meaning ascribed in Clause 18.1;

  
 Effective Date means the date set out in the Table; 

 
 Employment means the Employee’s employment in accordance with the terms
and conditions of this Agreement; 
  
 Executive Share Schemes shall
have the meaning ascribed in Clause 5.2; 
  
 Good Reason means any
of the following: 
  
 (i) the Company unreasonably requires the Employee (without
the Employee’s consent, such consent not to be unreasonably withheld or delayed) as a condition of the continuation of the Employment to relocate his residence or place of work from the Employee’s then residence or place of work;

  
 (ii) the Company unilaterally changes the Employee’s duties (including
the manner of performance thereof or the circumstances in which such duties are to be performed), responsibilities or reporting (including in relation to the operational and/or the performance relationship) without the Employee’s consent with
the effect that the Employee’s responsibility, authority, status or ability to undertake his duties effectively is materially reduced or the manner or the circumstances in which such duties are to be undertaken are such as to be intolerable for
the Employee (acting reasonably); or 
  
 (iii) the Company fails in any material
respect to comply with and satisfy any of the material terms of this Agreement, including (but not limited to) Clauses 4 and 5. 
  

 - 1 - 

 Group Company means the Company, any holding company of the Company and any subsidiary of the Company or of any
such holding company (with holding company and subsidiary having the meanings given to them by section 736 Companies Act 1985); 
  
 Group means the Company and any Group Company from time to time; 
  
 Holiday Year means a period commencing on 1 April in a calendar year and expiring on 31 March in the following calendar year; 
  
 Agreed Payment shall have the meaning ascribed in Clause 16.4; 
  
 Maximum Annual Bonus means the percentage of the Employee’s basic annual
salary (calculated by reference to the Employee’s basic annual salary at the Termination Date) which percentage is set out in the Table; 
  
 Payment in Lieu of Notice shall have the meaning ascribed in Clause 16.2; 
  
 Pension Schemes shall have the meaning ascribed in Clause 8.1; 
  
 Performance Related Pay Schemes shall have the meaning ascribed in Clause 5.1; 
  
 Recognised Investment Exchange has the meaning given to it by section 207 of the
Financial Services and Markets Act 2000; 
  
 Relevant Period shall
have the meaning ascribed in Clause 16.2 (a); 
  
 Retirement Age
shall have the meaning ascribed in Clause 2.4; 
  
 Table
means the table at Annex 1 to this Agreement; 
  
 Termination Date
shall have the meaning ascribed in Clause 19.1; 
  
 UURB
means the unfunded unapproved retirement benefit plan. 
  
 1.2 For the
purpose of this Agreement any references to gender shall in the case of the masculine include the feminine and vice versa. 
  
 1.3 In construing this Agreement neither the contra proferentem nor the eiusdem generis rule shall apply. 
  
 1.4 Unless stated to the contrary, all payments and benefits referred to in this Agreement
are subject to such deductions for income tax and national insurance contributions as are required by law and are non-pensionable. 
  

	 	2.	TERM AND JOB DESCRIPTION 

  
 2.1 The Employee shall be employed by the Company in the capacity as set out in the Table or in such other capacity, consistent with his
experience, status and seniority, to which he may be reasonably assigned by the Board from time to time. 
  

 - 2 - 

 2.2 The Employment began on the Effective Date. The Employee’s period of continuous employment began on the date set
out in the Table. 
  
 2.3 Subject to clauses 2.4 and 16, the Employment will
continue until terminated on the expiry of the relevant period of notice given by either party to the other as set out in the Table. 
  
 2.4 The Employment will terminate automatically on the Employee’s Retirement Age as set out in the Table. 
  

	 	3.	DUTIES 

  
 3.1 During the Employment, the Employee will:- 
  

	(a)	diligently perform all such duties and exercise all such powers as are lawfully and properly assigned to him from time to time by the Board or the Company, whether such duties or
powers relate to the Company or any other Group Company; 

  

	(b)	comply with all directions lawfully and properly given to him by the Board; 

  

	(c)	unless prevented by sickness, injury or other incapacity, devote the whole of his time, attention and abilities during his Working Hours to the business of the Company or any other
Group Company for which he is required to perform duties; 

  

	(d)	promptly provide the Board with all such information and explanations as it may require in connection with the Employment or the business or affairs of the Company and of any other
Group Company; 

  

	(e)	carry out his duties in a proper manner and comply with the policies of the Company and the policies of the Group that are referred to (or which may from time to time be issued by
the Company or the Group) a list of which, as at the date hereof, is referred to in the Table; 

  

	(f)	faithfully and diligently serve the Company and use his best endeavours to promote the interests and maintain and promote the reputation of the Company and each other Group Company.

  
 3.2 The Employee’s working hours are not measured or
predetermined but shall be the Company’s normal business hours together with such additional hours as are required in the proper performance of his duties. The Employee acknowledges that he has no entitlement to additional remuneration for such
further hours in excess of the Company’s normal business hours as the Employee may be required to work in accordance with this clause 3.2. 
  
 3.3 The Employee’s normal place of work is as set out in the Table, or such other location of a Group Company at which the Company may from time to time reasonably
require the Employee to base himself. 
  

 - 3 - 

 3.4 The Employee agrees to travel and to relocate (both within and outside, in this latter case subject to the agreement
of the Employee not to be unreasonably withheld or delayed, the United Kingdom) as may be reasonably required for the proper performance of his duties under the Employment and subject to the application of, and compliance with, the relevant policy
(as may be amended from time to time) of the Company or Group, such policy to include the provision of reasonable financial and other support and assistance with respect to disturbance and accommodation as may be appropriate in the circumstances.

  
 3.5 In the course of the Employment, under the terms of the Health and Safety
at Work etc Act 1974 (the Act), or such other rules or regulations having the effect as law in the relevant Group location, the Employee shall take reasonable care for the health and safety of himself and others who might be affected
by his acts or omissions. The Employee must also co-operate with the Company, or any other person who has a duty under the Act, to enable any statutory duty or requirement concerning health and safety at work to be performed or complied with.

  
 3.6 The Employee acknowledges the policies of the Company and the rest of the
Group as listed in Annex 1 to this Agreement and agrees to comply with them as if those policies were specifically incorporated into and formed part of this Agreement. 
  
 3.7 The Employee will provide such certification, statements and other documentation in relation to the compliance with regulatory and
accountancy practice, including (but not limited to) compliance with the rules and requirements of any relevant Recognised Investment Exchange, GAAP, Sarbanes Oxley related legislation, regulations and codes, as the Company may reasonably require
from time to time. The Company will provide such information, advice and assistance in relation to these requirements as an Employee may reasonably require. 
  

	 	4.	SALARY 

  
 4.1 The Employee’s basic annual salary as at the date hereof is as set out in the Table. The salary will be reviewed annually during the Employment. The Company is
under no obligation to increase the Employee’s salary following a salary review, but will not decrease it. 
  
 4.2 The Employee’s basic annual salary will accrue on a daily basis, and will be payable in arrears in equal monthly instalments, subject to the deduction, as
appropriate, of inter alia, income tax, national insurance contributions, pension contributions and any other deductions of a statutory nature or as required by law. 
  
 4.3 The Employee’s basic annual salary will be deemed to be inclusive of all fees and other remuneration to which he may be or become
entitled as an officer of the Company or of any other Group Company. 
  
 4.4
Except as expressly set out in this Agreement, or as may be confirmed in writing by the Company as constituting an express revision to this Agreement, the Employee will not be entitled to any additional salary, fees, bonus, payments of expenses or
otherwise. 
  

 - 4 - 

 4.5 The Employee’s basic annual salary is pensionable subject to and in accordance with the rules of the Pension
Schemes (as defined in Clause 8.1). 
  

	 	5.	BONUS AND SHARE SCHEMES 

  
 5.1 The Company has established incentive and bonus schemes (the Performance Related Pay Schemes) and, subject to the rules
thereof, the Employee shall be eligible to participate in such schemes as may be set out in the Table. The Company reserves the rights to amend or procure the amendment of the terms of or to terminate or procure the termination of such Performance
Related Pay Schemes (in such cases in order to substitute an equivalent scheme or schemes) but may not at any time reduce the level of the Employee’s participation in or the terms of such Performance Related Pay Schemes without agreement from
him. 
  
 5.2 The Company has established executive performance share, and share
option, schemes (the Executive Share Schemes) and, subject to the rules of such Executive Share Schemes, the Employee shall be eligible to participate in such of them as are referred to in the Table. The Employee hereby agrees and
accepts that any invitation to participate in or the grant of any option or other right pursuant to any of the Executive Share Schemes (whether now or in the future) or the termination or variation of any of the Executive Share Schemes shall not
constitute or give rise to any claim or right of action against the Company under this Agreement in respect of such grant, termination and variation. 
  
 5.3 In the introduction of and/or participation in any schemes referred to in Clauses 5.1 or 5.2 the Company will procure that the Employee is invited to participate to
the same, or an equivalent, extent to those employees of the same and broadly similar status and seniority. 
  

	 	6.	EXPENSES 

  
 The Company will reimburse (or procure the reimbursement of) all out-of-pocket expenses properly and reasonably incurred by the Employee in the course of his Employment
(including, without prejudice to the generality of the foregoing, the cost of subscriptions during the Employment to professional bodies membership of which it is obligatory or, in the reasonable opinion of the Board, desirable for the Employee to
hold for the purpose of the Employment and to maintain the Employee’s professional qualifications and telephone costs) subject to production of receipts or other appropriate evidence of payment. 
  

	 	7.	COMPANY CAR 

  
 7.1 During the Employment, the Company will (in accordance with the terms of the car policy from time to time) provide the Employee with a car of a type and age
considered by the Board to be appropriate to his status and responsibilities at the grade referred to in the Table. The Company will bear the cost of providing road tax, insuring, repairing and maintaining the car. The Company will also bear the
cost of fuel for business and private mileage to the extent set out in the Table. The Employee will take good care of the vehicle and will ensure that the provisions and conditions of the Company’s car policy from time to time and any policy of
insurance relating to 

  

 - 5 - 

 
the car are complied with in all respects. The Employee shall not take, or allow to be taken, the car outside the UK without the prior written consent of the
Company. 
  
 7.2 The Company may, if it terminates the Company’s car policy
with respect to other employees in the Group, in its absolute discretion, determine that the Employee will receive (in lieu of the provision of the benefits in Clause 7.1), or alternatively the Employee may elect to receive in lieu of the benefits
described in clause 7.1, a car and/or fuel allowance as set out in the Table. This will be paid in arrears (less any required deductions) in equal monthly instalments with the Employee’s salary. . 
  

	 	8.	PENSION 

  
 8.1 The Employee is entitled to participate in designated pension schemes established on behalf of relevant Group Companies by the Group (the Pension
Schemes) subject to and in accordance with the rules of such Pension Schemes for the time being and from time to time in force (and subject to any Inland Revenue or other applicable limits) all as set out in the Table. 
  
 8.2 If either:- 
  

	(i)	the Employee does not join the Pension Schemes as soon as reasonably practicable and, in any event, within three months of the Effective Date, or such longer period as the Pension
Schemes may permit; 

  
 or 
  

	(ii)	within three months of the Effective Date the Employee takes out a personal pension scheme approved under Section 631 of the Income and Corporation Taxes Act 1988;

  
 or 
  

	(iii)	once having joined the Pension Schemes the Employee ceases to be a member thereof during the Employment; 

  
 then the Company shall not be obliged to maintain the Pension Schemes or any other pension scheme for the benefit of the Employee and if the
Company does maintain the Pension Schemes or brings into effect another pension scheme it shall be within the discretion of the Company and the trustees of the Pension Schemes or other scheme as to whether or not, and if so upon what terms, the
Employee shall be permitted to become a member. 
  
 8.3 For so long as the
Employee shall remain a member of the Pension Schemes he shall be liable to make such contributions thereto and be entitled to such benefits therefrom and be subject to such terms and conditions as are set out in the rules from time to time
governing the Pension Schemes. 
  
 8.4 A contracting-out certificate is in force
in respect of the Employment. 
  
 8.5 To the extent set out in the Table, the
Employee is eligible to participate in 
  

 - 6 - 

	(a)	the Company’s unfunded unapproved retirement benefit arrangements (UURB) from time to time, subject to the rules of the UURB and the deed between the Company and
the Employee attached at Annex 3 of this Agreement; and 

  

	(b)	the Company’s executive top up pension plan. 

  
 8.6 If and to the extent that the Employment terminates other than (i) by reason of the Employee’s resignation (except for a Good Reason); or (ii) in the
circumstances set out in Clause 16.5, then the Company shall, at the Employee’s election, recommend to the trustees of the relevant Pension Scheme or Schemes, or in relation to the UURB procure, that such termination shall be deemed (solely in
relation to UURB and or such Pension Scheme or Schemes) to be a termination for re-organisation or redundancy (with the intent and effect that the benefits pursuant to the relevant UURB and/or Pension Scheme or Schemes shall apply on the basis of
such re-organisation or redundancy). This arrangement will only apply where the Employee has five or more years’ continuous service with the Company at the Termination Date (or would have had five or more years’ continuous service with the
Company at the end of the Relevant Period). The Company will procure that benefits under this arrangement are receivable by the Employee following the later of the Termination Date or the Employee reaching 50 years of age. 
  

	 	9.	INSURANCE 

  
 9.1 During the Employment, subject to the Employee’s age or health not being such as to prevent cover being obtained without exceptional conditions or unusually high
premiums, the Company will pay for the benefit of the Employee his spouse and any dependent children in full time education under the age of 25 (or such other age as the terms of the insurance arrangements may specify), subscriptions to the
Company’s private medical expenses insurance arrangements for the time being in force. 
  
 9.2 The Company will provide and maintain Directors and Officers liability insurance coverage in respect of the period for which the Employee is a Director of the Company (or any Group Company) at such levels, for
such risks, subject to such terms and for such period after the Employee ceases to be a Director of a Group Company as the Company or any Group Company, provides and maintains such cover for its Directors generally each year thereafter, including
such self insurance coverage as the Company or any Group Company makes available or obtains on behalf of itself or its Directors. The receipt by the Employee of a Payment in Lieu of Notice or an Agreed Payment shall not prejudice his ability to
continue to benefit under this Clause 9.2. 
  
 9.3 The Company shall procure that
during the Employment the Employee has the benefit of death in service insurance cover and long term ill health cover, obtained either directly by the Company or through any Pension Scheme operated by the Company, so as to provide coverage and
benefits as specified in the rules of the relevant Pension Scheme or Schemes or any benefits handbook from time to time issued by the Company to the Employee but in each case by reference to the Employee’s then basic annual salary. 

 

 - 7 - 

	 	10.	HOLIDAY 

  
 10.1 The Employee is entitled to paid holiday per Holiday Year during his Employment for both the periods of holiday entitlement and any bank and public holiday
entitlement as set out in the Table, to be taken at a time or times convenient to the Company. The right to paid holiday will accrue pro-rata during each Holiday Year of the Employment. 
  
 10.2 Untaken holiday entitlement may not be carried forward to a future Holiday Year unless the prior written consent of the Board has been
obtained. Subject to clause 10.3 the Employee has no entitlement to be paid in lieu of accrued but untaken holiday. 
  
 10.3 On termination of the Employment, the Employee’s entitlement to accrued holiday pay shall be calculated on a pro-rata basis (which calculation shall be made on
the basis that each day of paid holiday is equivalent to 1/260 of the Employee’s basic annual salary). If the Employee has taken more working days’ paid holiday than his accrued entitlement, the Company is authorised to deduct the
appropriate amount from his final salary instalment (which deduction shall be made on the basis that each day of paid holiday is equivalent to 1/260 of the Employee’s basic annual salary). 
  

	 	11.	SICKNESS AND OTHER INCAPACITY 

  
 11.1 With respect to any period (or periods) of absence due to incapacity or sickness in any period of 24 consecutive calendar months which
is (or are) either by reason of a single or common cause, or a number of associated causes or symptoms, and subject to the Employee’s compliance with the Company’s policy on notification and certification of periods of absence from work,
the Employee will be eligible to receive (i) the basic annual salary referred to in Clause 4 of this Agreement (and, with respect to any period of sickness absence (but only when the Company would otherwise effect payment of such bonuses) such
element of bonus referred to in Clause 5 of this Agreement as the Company may in its discretion determine is appropriate having regard to all the circumstances); and (ii) other employee benefits; as contractual sick pay for up to six months’
absence in full and, for the further six months’ absence following immediately thereafter, at 50% of the contractual rate with respect to basic annual salary (and 50% of such bonus as the Company may in its discretion determine) but 100% with
respect to other non cash benefits (car etc). The Employee will not be paid any additional sums for any absence in excess of twelve months in the aforesaid period of 24 months except, in the event of exceptional circumstances, where the Company (in
its absolute discretion) determines in writing. Such contractual sick pay is deemed to include any statutory sick pay and/or State benefits and the Company will be entitled to deduct from the sums payable, under this paragraph, (a) the amount of
income or other benefits to which the Employee is entitled under the national insurance scheme for the time being in force; and (b) the amount of income or other benefits to which the Employee is entitled under any long term (or permanent) sickness
or disability scheme or arrangement provided for under this Agreement (in each case for the duration of such periods of entitlement). Where notice to terminate this Agreement is given during any period (where such absence 

  

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from work is due to reasons unconnected with the relevant sickness or injury) any contractual sick pay payable by the Employer will cease upon the
Termination Date and the Employee will no longer be entitled to such pay. 
  
 11.2
If the sickness or injury shall be (or appear to be) occasioned by actionable negligence or breach of duty of a third party in respect of which damages are (or may be) recoverable any salary paid to or enjoyed by the Employee (together with the cost
of any benefits enjoyed by the Employee) during his period of absence shall be repayable or deemed to be reimbursable in the event of, and out of, the receipt of the proceeds of any claim against the third party. The Employee shall immediately
notify the Company of the reason for the sickness or injury and of any claim, compromise, settlement or judgment made or awarded in connection with it and shall give to the Company all particulars the Company may reasonably require and shall be
required: if (and to the extent only that) the Employee elects in his discretion, to make a claim against the third party in question, and subject always to the Company contributing to the reasonable cost incurred in relation to the recovery of its
payments or benefits to the Employee, to recover such sums as part of the Employees claim and to repay to the Company that part of any damages or compensation recovered which relates to loss of earnings or benefits for the period of absence as shall
equal the amount of salary or emoluments paid to or benefits enjoyed by the Employee during the period of absence provided that the amount to be refunded shall not exceed the amount of damages or compensation for such heads of claims or loss
accurately recovered (less any costs incurred by the Employee in connection with the recovery of such damages or compensation) and shall not exceed the total salary and benefits paid to the Employee in respect of the period of absence. 

 
 11.3 The Employee agrees that he will undergo a medical examination by a doctor appointed
by the Company at any reasonable time (provided that the costs of all such examinations are paid by the Company). The Company and Employee will be entitled to receive a report produced in connection with all such examinations in so far as such
report contains medical (or other) information that is relevant to the performance of the Employees duties. 
  
 11.4 The Company shall not terminate the Employment for the sole or predominant purpose of depriving the Employee of the ability to benefit under any long term (or permanent) sickness or disability scheme or
arrangement provided for under this Agreement to which the Employee would otherwise have been entitled but for such termination. 
  

	 	12.	OTHER INTERESTS 

  
 12.1 Subject to clause 12.2 and 12.3, during the Employment the Employee will not (without the Board’s prior written consent or as set out in the Table) either
solely or jointly or in partnership with or as a Director, Manager, Agent, Employee or Representative of or in any other capacity carry on or be directly or indirectly engaged, concerned or interested in any other business activity, trade or
occupation other than the business concerned or by the Company. The Employee shall disclose to the Board any interest of his, or to his knowledge, his spouse or of any child of him (or his spouse) under eighteen years of age (1) in any trade,
business or occupation 

  

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whatsoever which is in any way similar to any of those in which any Group Company is involved and (2) in any trade or business carried on by any supplier of
any Group Company whether or not such trade, business or occupation may be conducted for profit or gain where in each such case the situation is, or may be reasonably expected to be perceived as constituting, a conflict of interest between the
Employee and any Group Company. 
  
 12.2 Notwithstanding clause 12.1, the Employee
may hold for investment purposes an interest (as defined by Schedule 13 Companies Act 1985) of up to 3 per cent in nominal value or (in the case of securities not having a nominal value) in number, or class, of securities in any class of securities
listed or dealt in a Recognised Investment Exchange, provided that the company which issued the securities does not carry on a business which is similar to or competitive with any business for the time being carried on by any company in the Group
save to extent approved in advance by the Board. 
  
 12.3 The Employee shall be
entitled to be appointed as a non-executive director of another business or company not associated, in competition or conducting business with the Group, where such appointment does not adversely affect the performance of the duties expressly or
implicitly imposed on or to be performed by the Employee pursuant to this Agreement. The acceptance by the Employee of any such appointment is subject to the prior written agreement of the Board. Remuneration or fees received with respect to
appointments subject to this paragraph shall be the property of the Employee. Any such appointments as exist as at the Effective Date are set out in the Table. 
  

	 	13.	SHARE DEALING AND OTHER CODES OF CONDUCT 

  
 The Employee will comply with all codes of conduct adopted from time to time by the Board
and with all applicable rules and regulations of the UK Listing Authority, all Recognised Investment Exchanges and any other relevant regulatory bodies, including the Model Code on dealings in securities and will use his best endeavours to procure
that any connected person (as defined in the Companies Act 1985) complies with all such codes, rules and regulations on dealings in securities. 
  

	 	14.	INTELLECTUAL PROPERTY 

  
 14.1 In this clause Intellectual Property means inventions (whether patentable or not, and whether or not patent protection has been applied for or
granted), improvements, developments, discoveries, proprietary information, trade marks, trade names, logos, art work, slogans, know-how, processes, designs (whether or not registrable and whether or not design rights subsist in them), utility
models, work in which copyright may subsist (including computer software and preparatory and design materials therefore), and all works protected by rights or forms of protection of a similar nature or having equivalent effect anywhere in the world.

  
 14.2 Subject to the provisions of the Patents Act 1977 (PA
1977), the Registered Designs Act 1949 and the Copyright Designs and Patents Act 1988 (CDPA 1988), if at any time in the course of or in connection with the Employment the Employee makes or discovers or participates in the
making or discovery of any Intellectual 

  

 - 10 - 

 
Property directly or indirectly relating to or capable of being used in the business of the Company or any Group Company, full details of the Intellectual
Property shall immediately be disclosed in writing by him to the Company and the Intellectual Property shall be the absolute property of the Company. At the request and expense of the Company, the Employee shall give and supply all such information,
data, drawings and assistance as may be necessary or in the opinion of the Company desirable to enable the Company to exploit the Intellectual Property to the best advantage, and shall execute all documents and do all things which may be necessary
or in the opinion of the Company desirable for obtaining patent or other protection for the Intellectual Property in such parts of the world as may be specified by the Company and for vesting the same in the Company or as it may direct. 

 
 14.3 In relation to the discovery or creation of Intellectual Property in the course of
his duties under this Agreement, the Employee irrevocably appoints the Company to be his attorney in his name and on his behalf to sign, execute or do any such instrument or thing and generally to use his name for the purpose of giving to the
Company (or its nominee) the full benefit of the provisions of this clause, and in favour of any third party a certificate in writing signed by any director of the Company or the company secretary of the Company that any instrument or act falls
within the authority conferred by this clause shall be conclusive evidence that such is the case. 
  
 14.4 If the Employee shall at any time make or discover or participate in the making or discovery of the Intellectual Property which belongs to the Company, the Employee shall not without the written consent of the
Company apply for patent or other protection for the Intellectual Property either in the United Kingdom or elsewhere, and shall not do anything which might adversely affect the Company’s right to obtain patent or other protection therefore.

  
 14.5 The Employee hereby assigns to the Company by the way of prospective
assignment the copyright and rights in designs (whether registered or unregistered) and any other proprietary rights for the full terms thereof throughout the world in respect of all copyright works and designs originated, conceived or made by the
Employee (except only those copyright works and designs wholly unrelated, both directly and indirectly, to the activities of the Company or any Group Company and those written, originated, conceived or made wholly outside the period of the
Employee’s Employment). The Employee hereby expressly waives any and all of his moral rights and rights of a similar nature (including the rights conferred by Section 77, 80 and 84 of the CDPA 1988) in respect of all copyright works created by
the Employee and owned by the Company. 
  
 14.6 For the purposes of Section
39(1)(a) of the PA 1977, the course of the normal duties of the Employee shall include the use of the equipment, supplies, facilities, research, know-how, technology, trade secrets and confidential information of the Company and any Group Company
and the Employee has the duty to use the same for the sole benefit of the Company or Group Company (as appropriate) so that any invention made by the Employee which in any way depends upon or was made or facilitated by the use of the equipment,
supplied, facilities, research, know-how, technology, trade secrets or confidential information of the Company or any Group 

  

 - 11 - 

 
Company shall belong to the Company. The Company and the Employee agree that the nature of the duties and responsibilities of the Employee are and are
expected to continue to be such that the Employee has a special obligation to further the interests of the Company’s undertaking within the meaning of Section 39(1)(b) of the PA 1977, and that all inventions made by the Employee in the course
of his duties do and shall belong to the Company. 
  
 14.7 Rights and obligations
under this clause shall continue in force after termination of this Agreement in respect of Intellectual Property made or discovered during the Employment and shall be binding upon his heirs, successors, assigns and representatives. 
  

	 	15.	DISCIPLINARY AND GRIEVANCE PROCEDURES 

  
 15.1 There is no formal disciplinary procedure in relation to the Employment. If the Employee is dissatisfied with any disciplinary decision
taken in relation to him he may appeal in writing to the Chairman of the Board within 7 days of that decision. Subject to any such decision being ratified by the Board, the Chairman’s decision shall be final. 
  
 15.2 If the Employee has any grievance in relation to the Employment he may raise it in
writing with the Chairman of the Board whose decision, subject to any such decision being ratified by the Board, shall be final. 
  

	 	16.	TERMINATION 

  
 16.1 Either party may terminate the Employment in accordance with clause 2.3. 
  
 16.2 The Company may, in its sole discretion, also terminate the Employment at any time by paying a sum in lieu of notice (the Payment in Lieu of Notice)
equal to the aggregate of: 
  

	(a)	the basic salary (calculated by reference to the Employee’s basic salary at the date of termination) which the Employee would have been entitled to receive under this Agreement
during the notice period referred to at clause 2.3 if notice had been given (or, if notice has already been given, during the remainder of the notice period) (the Relevant Period); 

  

	(b)	the Employee’s pension loss in respect of the arrangements in clause 8, which will be determined as the aggregate of: 

  

	 	(i)	in relation to loss of pension benefits under any Inland Revenue approved pension scheme in which the Employee participates, an amount equal to 166% of the amount certified by the
actuary to the relevant scheme as being equal to the cash equivalent transfer value (calculated using actuarial methods and assumptions consistent with those specified in Actuarial Guidance Note GN11) of the additional pension benefits which the
Employee would have accrued if the Employment had continued throughout the Relevant Period; and 

  

 - 12 - 

	 	(ii)	in relation to loss of pension benefits under any unfunded pension scheme not approved by the Inland Revenue in which the Employee participates, an amount certified by an actuary
appointed by the Company as the cash equivalent value (calculated using actuarial methods and assumptions consistent with those specified in Actuarial Guidance note GN11) of the additional pension benefits which the Employee would have accrued if
the Employment had continued throughout the Relevant Period. 

  
 For the purposes of this sub-paragraph pension benefits shall also include life assurance and spouse pension benefits; 
  

	(c)	the cost to the Company of providing all the other benefits (excluding pension, bonus and share related incentives) that the Employee would have been entitled to receive or earn
during the Relevant Period or, if either the Company or the Employee requests in writing, a sum based on an estimated cost to the Company of providing those benefits for that period which is agreed to be 15% of the Employee’s basic annual
salary (calculated by reference to the Employee’s basic annual salary at the Termination Date) for the Relevant Period. 

  
 16.3 The Payment in Lieu of Notice shall be subject to such deductions as may be required by law. The Payment in Lieu of Notice shall not prejudice any entitlement the
Employee may have to benefit under clause 8.6 of this Agreement. The Employee shall be entitled to the balance of shares held in the Employee’s name under the Company’s deferred share plan in accordance with the rules of that plan. Any
entitlement that the Employee has or may have or may have had under any plan referred to under clause 5.1 with respect to the period prior to the Termination Date or clause 5.2 with respect to the periods prior to and following the Termination Date
shall be determined in accordance with the rules of the relevant plan and shall not be affected by the Employee’s receipt of the Payment in Lieu of Notice save that for the application of each such plan under clause 5.2 the Company shall
recommend to the trustee, administrator or Remuneration Committee (as appropriate) that “good leaver status” or the relevant equivalent provisions in any such plan shall apply to the Employee. As an alternative to the Payment in Lieu of
Notice being paid in a single lump sum, the Company may pay: 
  

	(a)	an initial lump sum equal to 50% of the Payment in Lieu of Notice (the First Payment) to be paid on the Termination Date; 

  

	(b)	a second lump sum equal to 25% of the Payment in Lieu of Notice (the Second Payment) to be paid 6 months after the Termination Date; and 

  

	(c)	a third lump sum equal to 25% of the Payment in Lieu of Notice (the Third Payment) to be paid 9 months after the Termination Date. 

  
 If the Employee commences alternative employment prior to the date on which the Second
Payment becomes payable, the Second Payment shall be reduced by the basic salary that the Employee will receive from the alternative employment in respect of the period starting 6 months after the Termination Date and ending 9 months after the

  

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Termination Date. If the Employee commences alternative employment prior to the date on which the Third Payment becomes payable, the Third Payment shall be
reduced by the basic salary that the Employee will receive from the alternative employment in respect of the period starting 9 months after the Termination Date and ending 12 months after the Termination Date. The Employee agrees to provide the
Company with such information as it may reasonably require to calculate the amount by which the Second and Third Payments should be reduced. 
  
 16.4 In relation to the Employee’s entitlement under any plan referred to under clause 5.1 with respect to the Relevant Period, where a Payment in Lieu of Notice or
an Agreed Payment are paid, the Company shall pay a sum (or sums where the Relevant Period spans more than one bonus year) to the Employee, based on the formula: A percentage times Maximum Annual Bonus. For the purposes of this
formula, A shall be such percentage (subject to a maximum of 100%) as the Remuneration Committee shall determine by reference to the performance of the Company against its financial objectives for the relevant bonus year or years
spanned by the Relevant Period, such determination to be consistent with any determination made by the Remuneration Committee regarding the performance of the Company against its financial objectives for the same period or periods in respect of
other employees of the Company whose status and seniority is broadly similar to the status and seniority of the Employee at the Termination Date. The payment of such sum (or sums) shall be made on the date (or dates) on which the Company makes
annual bonus payments in respect of the relevant bonus year (or years) to its other employees whose status and seniority is broadly similar to the status and seniority of the Employee at the Termination Date. The payment of the sums referred to in
this clause 16.4 shall be conditional on the Employee having complied with his obligations under clauses 18 and 19 in respect of the period prior to the payment date (or dates). If the Employee commences alternative employment prior to the end of
the Relevant Period, the Remuneration Committee may reduce the sum or sums payable to the Employee in respect of that period of alternative employment to take account of any performance related bonus that the Employee will receive from the
alternative employment in respect of the same part or parts of the Relevant Period. The Employee agrees to provide the Company with such information as it may reasonably require to calculate the amount by which any sum (or sums) payable pursuant to
this Clause 16.4 should be reduced. 
  
 16.5 The Company may also terminate the
Employment immediately and with no liability to make any further payment to the Employee (other than in respect of amounts accrued due at the date of termination) if the Employee: 
  

	(a)	commits any serious or repeated breach of any of his material obligations under this Agreement or his Employment (including, but not limited to, those referred to in Clause 3.1);

  

	(b)	is guilty of serious misconduct which, in the Board’s opinion, has damaged or may damage the business or affairs of the Company or any other Group Company;

  

 - 14 - 

	(c)	is guilty of conduct which, in the Board’s opinion, brings or is likely to bring himself, the Company or any other Group Company into disrepute; 

  

	(d)	is convicted of a criminal offence which would be likely (in the reasonable opinion of the Company) to bring the Employee or the Company into disrepute or subject to adverse public
criticism (other than a road traffic offence not subject to a custodial sentence) and, by way of example but not limitation, involving dishonesty or serious moral turpitude; 

  

	(e)	is disqualified from acting as a director of a company by order of a competent court; 

  

	(f)	is declared bankrupt or makes any arrangement with or for the benefit of his creditors or has an interim order made against him under Part VIII of the Insolvency Act 1986 or has a
county court administration order made against him under the County Court Act 1984; 

  

	(g)	resigns his directorship of the Company or any Group Company (other than at the explicit request of the Board). 

  
 This clause shall not restrict any other right the Company may have (whether at common law or
otherwise) to terminate the Employment summarily. Any delay by the Company in exercising its rights under this clause shall not constitute a waiver of those rights. 
  
 16.6 If at any time either (i) the Company or any Group Company gives notice to terminate the Employment otherwise than properly in
accordance with the terms of this Agreement or terminates the Employment otherwise than properly in accordance with the terms of this Agreement; (ii) the Employee ceases to be a director (where applicable) of the Company other than (a) in accordance
with either of clauses 16.7(b) and 17.1(b) of this Agreement; (b) by reason of rotational retirement (when followed by re-election) in accordance with the Articles of Association of the Company; (c) by reason of his voluntary resignation; or (d) by
reason of the termination of the Employment in accordance with any of clauses 2.3, 2.4, 16.2, 16.5 and 21 of this Agreement; or (iii) the Employee terminates the Employment for a Good Reason, the Company shall be obliged within 10 working days after
the Employment terminates to pay the Employee a sum (the Agreed Payment) which shall be calculated in the same manner as a Payment in Lieu of Notice pursuant to the provisions of clause 16.2 and shall trigger the application of clause
16.4. If the Employee terminates the Employment for a Good Reason, the Employee shall not be required to give notice of such termination in accordance with clause 2.3, and clause 2.3 is expressly varied in that respect. The following provisions
shall apply in relation to the Agreed Payment. 
  

	(a)	 The Agreed Payment shall be subject to such deductions as may be required by law and shall be made in full and final settlement of any wrongful dismissal claim the
Employee has or may have against the Company or any Group Company arising from the termination of the Employment. The Agreed Payment shall not prejudice any entitlement the Employee may have to benefit under clause 8.6 of this Agreement. The
Employee shall be entitled to the balance of shares held in the Employee’s name under the Company’s 

  

 - 15 - 

	 	 
deferred share plan in accordance with the rules of that plan. Any entitlement that the Employee has or may have or may have had under any plan referred to
under clause 5.1 with respect to the period prior to the Termination Date or clause 5.2 in respect of the periods prior to and following the Termination Date shall be determined in accordance with the rules of the relevant plan and shall not be
affected by the Employee’s receipt of the Agreed Payment save that for the application of each such plan under clause 5.2 the Company shall recommend to the trustee, administrator or Remuneration Committee (as appropriate) that “good
leaver status” or the relevant equivalent provisions in any such plan shall apply to the Employee. As an alternative to the Agreed Payment being paid in a single lump sum, the Company may pay: 

  

	 	(i)	an initial lump sum equal to 50% of the Agreed Payment (the First Payment) to be paid within 10 working days after the Termination Date; 

  

	 	(ii)	a second lump sum equal to 25% of the Agreed Payment (the Second Payment) to be paid 6 months after the Termination Date; and 

  

	 	(iii)	a third lump sum equal to 25% of the Agreed Payment (the Third Payment) to be paid 9 months after the Termination Date. 

  
 If the Employee commences alternative employment prior to the date on which
the Second Payment becomes payable, the Second Payment shall be reduced by the basic salary that the Employee will receive from the alternative employment in respect of the period starting 6 months after the Termination Date and ending 9 months
after the Termination Date. If the Employee commences alternative employment prior to the date on which the Third Payment becomes payable, the Third Payment shall be reduced by the basic salary that the Employee will receive from the alternative
employment in respect of the period starting 9 months after the Termination Date and ending 12 months after the Termination Date. The Employee agrees to provide the Company with such information as it may reasonably require to calculate the amount
by which the Second and Third Payments should be reduced. 
  

	(b)	In consideration for the payment of the Agreed Payment the Employee agrees to remain bound by the restrictions contained in clauses 18 and 19 of this Agreement.

  

	(c)	To the extent that any payment required to be made under this clause 16.6 is not made within the period specified the Company shall be liable for interest on such late payment at
the rate of 150% of the prime rate compounded monthly as posted by the Bank of England from time to time. 

  

	(d)	If the Termination Date falls during a period (equivalent to the period of notice required to be given by the Employer as set out in the Table) immediately prior to the
Employee’s date of retirement under clause 2.4, the Agreed Payment shall be reduced pro-rata to the remaining period of the Employment. 

  

 - 16 - 

	(e)	The Company shall reimburse the Employee for all reasonable legal costs (including disbursements) up to a maximum reimbursement of £3,000 (plus VAT) incurred by the Employee
in connection with the termination of the Employment where the Executive becomes entitled to receive an Agreed Payment under Clause 16.6. 

  
 16.7 On termination of the Employment for whatever reason (and whether in breach of contract or otherwise) the Employee will: 
  

	(a)	immediately deliver to the Company all books, documents, papers, computer records, computer data, credit cards, his company car together with its keys, and any other property
relating to the business of or belonging to the Company or any other Group Company which is in his possession or under his control. The Employee is not entitled to retain copies or reproductions of any documents, papers or computer records relating
to the business of or belonging to the Company or any other Group Company; 

  

	(b)	immediately resign from any office he holds with the Company or any other Group Company (and from any related trusteeships) without any compensation for loss of office. Should the
Employee fail to do so he hereby irrevocably authorises the Company to appoint some person in his name and on his behalf to sign any documents and do any thing to give effect to his resignation from office; and 

  

	(c)	immediately pay to the Company or, as the case may be, any other Group Company all outstanding loans or other amounts due or owed to the Company or any Group Company. The Employee
confirms that, should he fail to do so, the Company is to be treated as authorised to deduct from any amounts due or owed to the Employee by the Company (or any other Group Company) a sum equal to such amounts. 

  
 16.8 It is acknowledged that the Employee may, during the Employment, be granted rights, upon
the terms and subject to the conditions of the rules from time to time, of the plans and schemes referred to in clauses 5.1 and 5.2 or any other profit sharing, share incentive, share option, bonus or phantom option scheme operated by the Company or
any Group Company with respect to shares in the Company or any Group Company. Without prejudice to the Employee’s rights under clauses 16.3, 16.4 and 16.6, if, on termination of the Employment (whether lawfully or in breach of contract) the
Employee loses any of the rights or benefits under such plan or scheme (including rights or benefits which the Employee would not have lost had the Employment not been terminated) the Employee shall not be entitled, by way of compensation for loss
of office or otherwise howsoever, to any compensation for the loss of any rights or benefits under any such plan or scheme save that (provided the Employment terminates other than (a) by reason of the Employee’s resignation (except for a Good
Reason); or (b) in the circumstances set out in Clause 16.5) for the application of each such plan or scheme the Company shall recommend to the trustee, administrator or Remuneration Committee (as appropriate) that “good leaver status” or
the relevant equivalent provisions in any such plan or scheme shall apply. 
  

 - 17 - 

 16.9 The Employee will not at any time after termination of the Employment represent himself as being in any way
concerned with or interested in the business of, or employed by, the Company or any other Group Company. 
  

	 	17.	SUSPENSION AND GARDENING LEAVE 

  
 17.1 Where notice of termination has been served by either party whether in accordance with clause 2.3 or otherwise, the Company shall be
under no obligation to provide work for or assign any duties to the Employee for the whole or any part of the relevant notice period and may require him: 
  

	(a)	not to attend any premises of the Company or any other Group Company; and/or 

  

	(b)	to resign with immediate effect from any offices he holds with the Company or any other Group Company (and any related trusteeships); and/or 

  

	(c)	to refrain from business contact with any customers, clients or employees of the Company or any Group Company; and/or 

  

	(d)	to take any holiday which has accrued under clause 10 during any period of suspension under this clause 17.1. 

  
 The provisions of clause 12.1 shall remain in full force and effect during any period of
suspension under this clause 17.1. The Employee will also continue to be bound by duties of good faith and fidelity to the Company during any period of suspension under this clause 17.1. 
  
 Any suspension under this clause 17.1 shall be on full salary and benefits (save that the Employee shall not be entitled to earn or be paid
any bonus for any period of suspension with respect to a termination pursuant to Clause 16.5). 
  
 17.2 The Company may suspend the Employee from the Employment during any period in which the Company is carrying out a disciplinary investigation into any alleged acts or defaults of the Employee. Such suspension
shall be on full salary and benefits (save that the Employee shall not be entitled to earn or be paid any bonus for any period of suspension except to the extent that such allegations are found to be unproven). 
  

	 	18.	RESTRAINT ON ACTIVITIES OF EMPLOYEE AND CONFIDENTIALITY

  
 18.1 Save insofar as such information is already in the
public domain (other than by reason of a breach of this Agreement by the Employee) the Employee will keep secret and will not at any time whether during the Employment or thereafter use for his own or another’s advantage, or reveal to any
person, firm, company or organisation and shall (during the Employment only) use his endeavours (but at the cost of the Company) to prevent the publication or disclosure of any Confidential Information or information which the Employee knows or
ought reasonably to have known to be confidential, concerning the business or affairs of the Company or any other Group Company or any of its or their customers. 
  

 - 18 - 

 The restrictions in this clause shall not apply: 
  

	(a)	to any disclosure or use authorised by the Board or required by law or by the Employment; or 

  

	(b)	so as to prevent the Employee from using his own personal skill in any business in which he may be lawfully engaged after the Employment is ended; or 

  

	(c)	to prevent the Employee making a protected disclosure within the meaning of s43A of the Employment Rights Act 1996. 

  
 18.2 Without prejudice to clause 18.1: 
  
 The Employee shall not without the consent of the Company, during the Employment, communicate
any Confidential Information as further defined below to a third party and shall not use the same on his own behalf or on behalf of any third party other than for the legitimate purpose of any member of the Group. For the purposes of this Clause,
Confidential Information shall mean any information concerning the business, customers, transactions, processes, products, know how, secrets or affairs of the Company or the Group or any information which is specified as confidential
by the Company or the Group. Without prejudice to the foregoing generality, Confidential Information also applies to information concerning:- 
  

	(a)	the markets, customers and potential markets and customers of the Company or the Group; 

  

	(b)	the pricing policy, costs of products and services to the Company or the Group; 

  

	(c)	the profits turnover, profit margins, business expectations, budgets, business plans or any other similar financial information of the Company or the Group;

  

	(d)	technical data or know how relating to the business carried on by the Company or the Group; 

  

	(e)	research projects of the Company or the Group; and 

  

	(f)	administrative, managerial, employment or other internal policies of the Company or the Group or the relations of the Company or the Group with customers, suppliers, competitors,
the business community or the general public. 

  
 The Employee shall during the Employment use his best endeavours to prevent disclosure of any Confidential Information by any other party. All memoranda, notes, records, reports, drawings and other documents and all specimens, models and
samples made, executed or acquired by the Employee during the course of his employment shall be the property of the Company and shall be surrendered to the Company by him together with all documents, 

  

 - 19 - 

 
papers and other goods and articles belonging to any member of the Group, from time to time, on demand. 
  

	(g)	The Employee hereby undertakes that he will not, at any time after the termination of the Employment (howsoever arising), either personally or in conjunction with any other person,
directly or indirectly, unless ordered to do so by the Company or Group or by a court of competent jurisdiction or a properly empowered regulatory authority, use/disclose or otherwise communicate any Confidential Information.

  

	 	19.	POST-TERMINATION COVENANTS 

  
 19.1 For the purposes of this Agreement Termination Date shall mean the date of the termination of the Employment howsoever
caused (including, without limitation, termination by the Company which is in repudiatory breach of this agreement). 
  
 19.2 The Employee covenants with the Company (for itself and as trustee and agent for each other Group Company) that he shall not, whether directly or indirectly, on his
own behalf or on behalf of or in conjunction with any other person, firm, company or other entity:- 
  

	(a)	for the period of (subject to clause 19.3 below) 12 months following the Termination Date, solicit or entice away or endeavour to solicit or entice away from the Company or any
Group Company any person, firm, company or other entity who is, or was, in the period of 24 months immediately prior to the Termination Date, a client (of the Company or any Group Company) with whom the Employee had business dealings at any time
during the course of his employment in that period; 

  

	(b)	for the period of (subject to clause 19.3 below) 12 months following the Termination Date, have any business dealings with any person, firm, company or other entity who is, or was,
in the period of 24 months immediately prior to the Termination Date, a client (of the Company or any Group Company) with whom the Employee had business dealings during the course of his employment in that period. Nothing in this clause 19.2(b)
shall prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any Group Company; 

  

	(c)	for the period of (subject to clause 19.3 below) 12 months following the Termination Date, solicit or entice away or endeavour to solicit or entice away any individual who is
employed or engaged by the Company or any Group Company as a director or in a managerial capacity; and with whom the Employee had business dealings at any time during the course of his employment in the period of 24 months immediately prior to the
Termination Date; 

  

	(d)	 for the period of (subject to clause 19.3 below) 12 months following the Termination Date, carry on, set up, be employed, engaged or interested in a business
anywhere in Scotland, England, Wales, Northern Ireland and the Isle of Man which is or is about to be in competition with the business of the 

  

 - 20 - 

	 	 
Company or any Group Company as at the Termination Date with which the Employee was actively involved at any time during the period of 24 months immediately
prior to the Termination Date, including (but not limited to) the businesses of the companies listed in Annex 2 (as may be amended from time to time) (or such other companies as may, from time to time, carry on such businesses). The Company believes
the Employee would inevitably disclose Confidential Information about the Company and/or other Group Companies and by doing so would damage the business interests of the Company and/or other Group Companies if he was employed, engaged or interested
in the business of any of the companies in Annex 2. It is agreed that in the event that any such company ceases to be in competition with the Company and/or any Group Company this clause 19.2(d) shall, with effect from that date, cease to apply in
respect of such company. The provisions of this clause 19.2(d) shall not, at any time following the Termination Date, prevent the Employee from holding shares or other capital not amounting to more than 3% of the total issued share capital of any
company whether listed on a recognised stock exchange or not and, in addition, shall not prohibit the seeking or doing of business not in direct or indirect competition with the business of the Company or any Group Company.

  
 19.3 The period during which the restrictions referred to in
clauses 19.2(a) to (d) inclusive shall apply following the Termination Date shall be reduced by the amount of time during which, if at all, the Company suspends the Employee under the provisions of clause 17.1. 
  
 19.4 The Employee agrees that if, during either his employment with the Company or the period
of the restrictions set out in clauses 19.2(a) to (d) inclusive (subject to the provisions of clause 19.3), he receives an offer of employment or engagement, he will provide a copy of clause 19.2 to the offer or as soon as is reasonably practicable
after receiving the offer and if he accepts the offer will inform the Company of the identity of the offer or as soon as reasonably practicable after accepting the offer. 
  
 19.5 The Employee will, at the request and expense of the Company, enter into a separate agreement with any Group Company that the Company
may require under the terms of which he will agree to be bound by restrictions corresponding to those contained in clauses 19.2(a) to (d) inclusive (or such as may be appropriate in the circumstances). 
  

	 	20.	EMPLOYEE’S POSITION AND DUTIES AS DIRECTOR

  
 20.1 The Employee’s position and duties as a director
of the Company or any other Group Company (in both cases where applicable) are subject to the Articles of Association of the relevant Group Company for the time being. 
  
 20.2 If the Employee ceases to be a director of the Company in accordance with clause 17.1(b); this Agreement and the Employment will
continue for the time being as if the Employee was a senior employee. and the Employee shall have such duties as were lawfully and properly assigned to him prior to the date thereof but the Employee will cease to have any duties as a director of the
Company. 
  

 - 21 - 

	 	21.	WAIVER OF RIGHTS 

  
 If for the purpose of a corporate reconstruction or amalgamation, the Employment is terminated by either party and the Employee is offered re-employment or re-engagement
by the Company (or re-employment or re-engagement with another Group Company and a directorship of the new ultimate parent company of the Company) on terms no less favourable in all material respects than the terms of the Employment under this
Agreement, the Employee shall have no claim against the Company in respect of such termination. 
  

	 	22.	DATA PROTECTION 

  
 22.1 The Employee consents to the Company and any Group Company processing data relating to him at any time (whether before, during or after the Employment) for the
following purposes: 
  

	(a)	performing its obligations under the Agreement; 

  

	(b)	the legitimate interests of the Company and any Group Company including any sickness policy, working time policy, investigating acts or defaults (or alleged or suspected acts or
defaults) of the Employee, security, management forecasting or planning and negotiations with the Employee; 

  

	(c)	processing in connection with any merger, sale or acquisition of a company or business in which the Company or any Group Company is involved or any transfer of any business in which
the Employee performs his duties; and 

  

	(d)	transferring data to countries outside the European Economic Area for the purposes of maintaining comprehensive records and conducting analyses of the Group-wide employee
population, in particular, in the United States of America. 

  
 22.2
The Employee explicitly consents to the Company and any Group Company processing sensitive personal data (within the meaning of the Data Protection Act 1998) at any time (whether before, during or after the Employment) for the following purposes:

  

	(a)	where the sensitive personal data relates to the Employee’s health, any processing in connection with the operation of the Company’s (or any Group Company’s) sickness
policy or any relevant pension scheme or monitoring absence; 

  

	(b)	where the sensitive personal data relates to an offence committed, or allegedly committed, by the Employee or any related proceedings, processing for the purpose of the
Company’s or any Group Company’s disciplinary purposes; 

  

	(c)	for all sensitive personal data, any processing in connection with any merger, sale or acquisition of a company or business in which the Company or any Group Company is involved or
any transfer of any business in which the Employee performs his duties; and 

  

 - 22 - 

	(d)	for all sensitive personal data, any processing in the legitimate interests of the Company or any Group Company. 

  

	 	23.	EMAIL AND INTERNET USE 

  
 The Employee agrees to be bound by and to comply with the terms of the Company’s email and internet policy as amended from time to
time. 
  

	 	24.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 

  
 A person who is not a party to this Agreement shall have no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce any of its terms. 
  

	 	25.	MISCELLANEOUS 

  
 25.1 This Agreement, together with any other documents referred to in this Agreement, constitutes the entire agreement and understanding between the parties, and
supersedes all other agreements both oral and in writing between the Company and the Employee (other than those expressly referred to herein). The Employee acknowledges that he has not entered into this Agreement in reliance upon any representation,
warranty or undertaking which is not set out in this Agreement or expressly referred to in it as forming part of the Employee’s contract of employment. 
  
 25.2 The Employee represents and warrants to the Company that he will not by reason of entering into the Employment, or by performing any duties under this Agreement, be
in breach of any terms of employment with a third party whether express or implied or of any other obligation binding on him. 
  
 25.3 Any notice to be given under this Agreement to the Employee may be served by being handed to him personally or by being sent by recorded delivery first class post to
him at his usual or last known address; and any notice to be given to the Company may be served by being left at or by being sent by recorded delivery first class post to its registered office for the time being. Any notice served by post shall be
deemed to have been served on the day (excluding Sundays and statutory holidays) next following the date of posting and in proving such service it shall be sufficient proof that the envelope containing the notice was properly addressed and posted as
a prepaid letter by recorded delivery first class post. 
  
 25.4 Any reference in
this Agreement to an Act of Parliament shall be deemed to include any statutory modification or re-enactment thereof. 
  
 25.5 This Agreement is governed by, and shall be construed in accordance with, the laws of Scotland. 
  

 - 23 - 

							
	 SIGNED as a DEED by the EMPLOYEE
	 	 	 	 	 	 
				
	  	 	 	 	/s/    Simon J Lowth	 	August 7, 2003
	 	 	 	 	Simon J Lowth	 	Date
	 	 	 	 	 	 	 
				
	 in the presence of:
	 	 	 	/s/    Nigel A Johnson	 	August 7, 2003
	 	 	 	 	 	 	Date

  

			
		
	Witness	 	Nigel A Johnson
		
	Address	 	16 Colston Drive
		
	 	 	Glasgow
		
	 	 	 

  
 SIGNED for and on behalf of
SCOTTISH POWER plc: 
  

			
		
	/s/    Charles Miller Smith	 	August 14, 2003
		
	Director	 	Date
		
	/s/    Ian Russell	 	August 21, 2003
		
	Director /Secretary	 	Date

  

 - 24 - 

 ANNEX 1 
  

					
	TABLE	 	 
			
	 1.      Name
	 	 	  	Simon J Lowth
	 2.      Employing Company
	 	 	  	ScottishPower plc
	 3.      Job Title:
	 	 (Clause 2.1)
	  	Director, Corporate Strategy and Development
	 4.      Effective Date:
	 	 (Clause 2.2)
	  	1 September 2003
	 5.      Continuous Service Date:
	 	 (Clause 2.2)
	  	1 September 2003
	 6.      Period of Notice:
 - Employee:
 -
Employer:
	 	 (Clause 2.3)
	  	 12 months
 12 months

	 7.      Retirement Age:
	 	 (Clause 2.4)
	  	63rd birthday
	 8.      Normal Place of Employment:
	 	 (Clause 3.3)
	  	Cannon Street Offices, London
	 9.      Policies:
	 	 (Clause 3.6)
	  	See list of applicable policies attached
	 10.    Basic Annual Salary (at the date of this Agreement):
	 	 (Clause 4.1)
	  	£415,000 per annum
	 11.    Performance Related Pay Scheme:
 - Scheme
 - Maximum Bonus
Percentage
	 	 (Clause 5.1)
	  	 Annual Incentive Plan
 75% of basic annual
salary

	 12.    Executive Share Schemes:
	 	 (Clause 5.2)
	  	 
	 - Long Term Incentive Plan:
	 	 	  	An annual award with an initial value of 75% of basic salary
	 - Executive Share Option Plan:
	 	 	  	An annual award with an initial value of 200% of basic salary
	 13.    Company Car Grade:
	 	 (Clause 7.1)
	  	One
	 14.    Private Fuel Entitlement :
	 	 (Clause 7.1)
	  	Yes
	 15.    Allowance in lieu of Company Car:
	 	 (Clause 7.2)
	  	£1,067 per month
	 16.    Pension Schemes:
 - Membership of Executive Top Up Pension Plan
 - Membership of UURBS
	 	 (Clause 8.1)
	  	 Yes
 Yes

	 17.    Death in Service Insurance Cover:
	 	 (Clause 9.3)
	  	As Pension Scheme Rules
	 18.    Long Term Disability Benefits:
	 	 (Clause 9.3)
	  	As Pension Scheme Rules
	 19.    Holiday Entitlement in a Holiday Year:
	 	 (Clause 10.1)
	  	30 days
	 20.    Bank and Public Holiday Entitlement:
	 	 (Clause 10.1)
	  	11 days
	 21.    Non-Executive Appointments / Other Jobs:
	 	 (Clause 12.3)
	  	 

  

 - 25 - 

 TABLE NOTE 9 - APPLICABLE POLICIES (CLAUSE 3.6) 
  
 The Company policies with which the employee agrees to comply as part of this Agreement are listed below. 
  

	 	•	 	Smoking Policy 

  

	 	•	 	Company Car Policy 

  

	 	•	 	Policy on Alcohol and Drugs 

  

	 	•	 	Code of Conduct and Disciplinary Rules 

  

	 	•	 	Policy on Electronic Communications and Computer Use 

  

	 	•	 	Probity Policy 

  

	 	•	 	Security Policy and Procedures Manual 

  

	 	•	 	Data Protection Policy 

  

	 	•	 	Competition Law Compliance Manual 

  

	 	•	 	Compliance Code of Conduct 

  

	 	•	 	Equal Opportunities Policy 

  

	 	•	 	Personal Shareholding Policy 

  
 Copies of the above policies are available from Human Resources and on the ScottishPower Intranet site—http://cww.scottishpower.plc.uk/employee 
  

 - 26 - 

 ANNEX 2 
  

					
	 Company

	British Energy plc	  	Electricite De France	  	Aquilla
	Centrica plc	  	Endesa	  	Duke Energy
	Innogy plc	  	Ente Nazionale per l’Energia Elettrica SpA (ENEL)	  	Portland General Electric
	Powergen plc	  	E.ON Energie AG	  	Southern Company
	National Grid Transco	  	Iberdola	  	Texas Utilities
	Scottish & Southern Energy plc	  	RWE	  	Xcel

  
 The above table constitutes the
companies referenced in section 19.2 (d) of this Agreement dated 1st August 2003. 
  

 - 27 - 

 1st AUGUST 2003 
  
 SCOTTISH
POWER plc 
  
 SIMON J LOWTH 
  

  
 SERVICE AGREEMENT 
  

  

 - 28 - 

 CONTENTS 
  

					
	CLAUSE

	  	 	  	PAGE

	1.	  	 DEFINITIONS
	  	1
			
	2.	  	 TERM AND JOB DESCRIPTION
	  	2
			
	3.	  	 DUTIES
	  	3
			
	4.	  	 SALARY
	  	4
			
	5.	  	 BONUS AND SHARE SCHEMES
	  	5
			
	6.	  	 EXPENSES
	  	5
			
	7.	  	 COMPANY CAR
	  	5
			
	8.	  	 PENSION
	  	6
			
	9.	  	 INSURANCE
	  	7
			
	10.	  	 HOLIDAY
	  	8
			
	11.	  	 SICKNESS AND OTHER INCAPACITY
	  	8
			
	12.	  	 OTHER INTERESTS
	  	9
			
	13.	  	 SHARE DEALING AND OTHER CODES OF CONDUCT
	  	10
			
	14.	  	 INTELLECTUAL PROPERTY
	  	10
			
	15.	  	 DISCIPLINARY AND GRIEVANCE PROCEDURES
	  	12
			
	16.	  	 TERMINATION
	  	12
			
	17.	  	 SUSPENSION AND GARDENING LEAVE
	  	18
			
	18.	  	 RESTRAINT ON ACTIVITIES OF EMPLOYEE AND CONFIDENTIALITY
	  	18
			
	19.	  	 POST-TERMINATION COVENANTS
	  	20
			
	20.	  	 EMPLOYEE’S POSITION AND DUTIES AS DIRECTOR
	  	21
			
	21.	  	 WAIVER OF RIGHTS
	  	22
			
	22.	  	 DATA PROTECTION
	  	22
			
	23.	  	 EMAIL AND INTERNET USE
	  	23
			
	24.	  	 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
	  	23
			
	25.	  	 MISCELLANEOUS
	  	23

  

 ANNEXES 
  

	1	TABLE 

  

	2	LIST OF RESTRICTED COMPANIES 

  

	3	EXECUTIVE RETIREMENT BENEFITS SCHEME (INCLUDING UURBS DEED AND SCHEME RULES) 

  

	4	PENSION & UURB SUMMARY 

  

 ANNEX 3 
  
 THE SCOTTISHPOWER EXECUTIVE 
 RETIREMENT BENEFITS SCHEME 
  

 This Annex contains the following:- 
  

	1.	Draft Benefit Arrangement Resolution by Scottish Power plc. 

  

	2.	Deed by Scottish Power plc. 

  

	3.	Rules setting out details of the benefit promise. 

  

 RESOLUTION BY SCOTTISH POWER PLC IN RELATION TO ESTABLISHMENT OF UNFUNDED UNAPPROVED RETIREMENT BENEFITS SCHEME.

  

	 	•	 	Scottish Power plc hereby resolves to establish an unfunded unapproved retirement benefits scheme for the provision of the company’s contractual obligations to provide
retirement benefits for the benefit of Simon J Lowth with effect from 1 September 2003. 

  

	 	•	 	Details of the benefits payable will be set out in specific governing documentation. 

  

 THIS DEED is made BETWEEN 
  
 SCOTTISH POWER PLC, registered number SC193794, whose registered office is at 1 Atlantic Quay, Robertson Street, Glasgow, G2 8SP
(“the Company”); and 
  
 SIMON J LOWTH of 19 Lyndhurst Road,
Hampstead, London NW3 5NX (“the Executive”) 
  
 The Company and the
Executive hereby agree and declare:- 
  

	1.	The Executive is a member of one or more of the Company’s retirement benefit schemes, which are approved by the Inland Revenue in terms of the Income and Corporation Taxes Act
1988 (“ICTA”) for the provision of relevant benefits within the meaning of Section 612 of ICTA (“the Approved Schemes”). 

  

	2.	The Company will pay the benefits to and in respect of the Executive which are set out in the arrangement established by this deed to be known as the ScottishPower Executive
Retirement Benefits Scheme (“the Arrangement”). These benefits shall be relevant benefits in terms of Section 612 of ICTA and are set out in rules as altered from time to time (“the Rules”). The benefits in the Arrangement are
intended to be the relevant benefits which the Company is obliged to provide under the Executive’s contract of employment but only to the extent that these cannot be provided from the Approved Schemes and are not in addition to those benefits.

  

	3.	The benefits payable by the Company under this Deed and the relative Rules will have deducted from them all benefits which are payable to and in respect of the Executive from his
membership of the Approved Schemes and any Retained Benefits (defined under the Relative Rules). The Executive must remain a member of the Approved Schemes for benefits to accrue under the Relative Rules. 

  

 1 

	4.	The Company, with the written consent of the Executive, may by deed alter the terms of this Deed and the relative Rules and any alteration may be made on a retrospective basis,
subject always to the terms of Section 67 of the Pensions Act 1995. No alteration will alter the main purpose of the Deed and Rules nor will it allow the Company to benefit. 

  

	5.	The Company shall hold any insurance policy effected by it for the purposes of the Arrangement and any proceeds of a policy paid to it and any other assets of the Arrangement on
trust in accordance with the Rules. 

  

	6.	This Deed and the relative Rules are subject at all times to Scots law. 

  

	7.	The Company will hold any insurance policy effected by it for the purposes of the Arrangement and any proceeds of a policy paid to it and any other assets of the Arrangement on
trust in accordance with the Rules. 

  
 This Deed together with the
Rules attached and signed as relative hereto are executed as follows:- 
  

					
	Signed for and on behalf of	 	 	 	 
	ScottishPower plc	 	 	 	 
			
	on ______________________ 2003 by	 	 	 	  
	 	 	 	 	Director
			
	  	 	 	 	  
	 	 	 	 	Director
	Signed by Simon J Lowth	 	 	 	 
			
	on _________________________ 2003	 	 	 	  
	 	 	 	 	Executive’s Signature
	before this witness:-	 	 	 	 
			
	 	 	 	 	 
	Full name	 	 	 	  
	 	 	 	 	Witness
	Address	 	 	 	 
	 	 	 	 	 

  

 2 

  
 RULES SETTING OUT DETAILS
OF THE BENEFIT PROMISE 
  

					
	 RULES INDEX

	  	PAGE No:

	 1.
	  	DEFINITIONS AND INTERPRETATION	  	2
	 2.
	  	BENEFITS PAYABLE	  	6
	 3.
	  	EXECUTIVE’S PENSION - NORMAL RETIREMENT DATE	  	7
	 4.
	  	EXECUTIVE’S PENSION - EARLY RETIREMENT	  	7
	 5.
	  	EXECUTIVE’S PENSION – DEFERRED	  	9
	 6.
	  	CASH IN LIEU OF PENSION	  	10
	 7.
	  	DEATH BENEFITS	  	11
	 8.
	  	PAYMENT OF LUMP SUM DEATH BENEFITS	  	14
	 9.
	  	NON-ASSIGNMENT, FORFEITURE, LIEN AND BANKRUPTCY/INCAPACITY	  	15
	 10.
	  	PAYMENT OF BENEFITS AND DISPUTES	  	16
	 11.
	  	SUBSTITUTION OF COMPANY	  	18
	 12.
	  	TERMINATION AND WIND UP	  	18

  

 1 

 These are the rules of the ScottishPower Executive Retirement Benefits Scheme relative to Deed by the Company and Simon J
Lowth. 
  

	1.	DEFINITIONS AND INTERPRETATION 

  
 In the Deed and the Rules, words implying the singular shall include the plural and vice versa and words referring to the masculine gender shall
include the feminine gender where the context so allows. Any reference to any legislation includes: 
  

	 	(i)	any regulations made under that legislation; 

  

	 	(ii)	any modification, re-enactment or consolidation for the time being in force; 

  

	 	(iii)	in relation to a period before the legislation came into force, any corresponding provision of any previous legislation; and 

  

	 	(iv)	where the legislation applies to only part of the United Kingdom, any corresponding provision of any other legislation applying to any other part of the United Kingdom.

  
 These words and meanings shall apply as
follows:- 
  
 “Actuary” means the person for the
time being who is appointed actuary to the ScottishPower Pension Scheme, not acting in that capacity but in an independent capacity for the purpose of the Arrangement. 
  
 “Approved Scheme Benefit” means the particular benefit payable to, or in respect of, the Executive under
the Approved Schemes in the relevant circumstances. 
  
 “Approved Scheme Pension” means: 
  

	 	(1)	for the Executive, the total initial amount of any pension for him under the Approved Schemes, including the pension equivalent of any benefits payable other than in pension form,
and 

  

	 	(2)	for any other person, the total initial amount of any pension for him under the Approved Schemes, excluding any pension provided by the surrender of pension by the Executive.

  

 2 

 Any pension provided by voluntary contributions paid by the Executive to the Approved Schemes will be
ignored for the purposes of the Arrangement. The Company and the Executive can agree in writing that any other part of the Approved Scheme Pension is to be ignored for the purposes of the Agreement. 
  
 “Approved Scheme Provisions” mean the rules of the Approved
Schemes for the time being in force, as altered by any special terms in relation to the Executive, including any alteration in those special terms. 
  
 “Approved Schemes” means the schemes operated by the Company for the provisions of Relevant Benefits which are approved under ICTA.

  
 “Arrangement” means the ScottishPower
Executive Retirement Benefits Scheme set out in the Deed and Rules. 
  
 “Beneficiaries” means the following persons who are living at the date of the Executive’s death: 
  

	 	(1)	the Executive’s spouse or former spouse; 

  

	 	(2)	a child of the Executive; 

  

	 	(3)	any person whom the Company considers was dependent on the Executive at the date of the Executive’s death for all or any of the ordinary necessaries of life or who was living
with the Executive and was financially interdependent with the Executive in order to maintain a joint standard of living; 

  

	 	(4)	any individual designated in writing by the Executive to the Company as being a person whom he wishes to be considered as a possible recipient of any benefit payable on his death.

  

 3 

 “Change of Control” means a change in the control of the Company or of a holding company
of the Company within the meaning of section 736 of the Companies Act 1985, where a person or entity acquires a holding, or persons or entities acting in concert acquire holdings, of shares carrying 50% or more of the voting rights of the Company or
of the relevant holding company of the Company within the meaning of section 736 of the Companies Act 1985 (other than as a result of a bona fide reconstruction or reorganisation) where a new holding company of the Company is created with such
company having substantially the same shareholders and proportionate shareholdings as those of the Company, irrespective of whether the holding gives, or the holdings give, de facto control. For the purposes of this definition “voting
rights” means all the voting rights attributable to the share capital of the Company or the relevant holding company of the Company within the meaning of section 736 of the Companies Act 1985 exercisable at a general meeting and “acting in
concert” means persons or entities who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate control of that
company. The valuation envisaged by this definition will be made and certified by the Actuary. 
  
 “Company” means Scottish Power plc. 
  
 “Deed” means the deed made between the Company and the Executive establishing the Arrangement. 
  
 “Earnings Cap” means the amount specified in Section 590C
of ICTA and any subsequent Treasury Orders to be used as a maximum amount in the calculation of contributions to and benefits under exempt approved retirement benefits schemes. 
  
 “Executive” means Simon J Lowth 
  
 “Final Pensionable Salary” means: 
  
 Whichever is the greatest of: 
  

	 	(a)	the Executive’s Salary from the Company in the last 12 months of his Service; 

  

 4 

	 	(b)	the Executive’s Salary from the Company in any 12 months in the last 5 years of his Service, and 

  

	 	(c)	the highest annual average of the Executive’s Salary from the Company in any consecutive 3 years in the last 10 years of his Service. 

  
 For the purposes of (b) and (c), the basic pay in any year apart from the
final year of the Executive’s Service will be increased by reference to the increase in RPI from the end of that year to the date his Final Pensionable Salary is calculated. 
  
 “ICTA” means the Income and Corporation Taxes Act 1988. 
  
 “Normal Retirement Date” means the Executive’s 63rd
birthday. 
  
 “Relevant Benefits” means the same
as in Section 612 of ICTA. 
  
 “Retained Benefits”
means any pension and cash retirement sum already paid or in payment, or payable in the future, to the Executive from any approved occupational pension scheme or approved personal pension scheme in respect of employment or self-employment before
joining Service. At any time at which a value has to be put on any part of the Executive’s Retained Benefits that has not been transferred to the Approved Schemes, the Company will arrange for that value to be calculated by the Actuary. Any
part of the Executive’s Retained Benefits given up by him to provide a benefit for another person remains to be considered as Retained Benefits. 
  
 “Revaluation Increase”, in relation to any amount of pension under the Arrangement, means the amount by which it would be increased,
under the revaluation provisions of the Approved Schemes which apply following the early termination of the Executive’s pensionable service, if it was payable from the Approved Schemes. 
  
 “RPI” the Retail Prices Index set by the Government from
time to time. 
  
 “Rules” means the rules (as
amended from time to time) set out in this document. 
  

 5 

 “Salary” means the amount determined by the Company as being the aggregate of his gross
basic salary, wages and fees and any other payment approved by the Company provided that 
  

	 	(1)	in determining the earnings to be used, the Company shall ignore all earnings which are not treated for tax purposes as earnings from an office or employment with the Company and
all earnings to which the Executive is not beneficially entitled and, unless the Company otherwise directs, all earnings which are treated for tax purposes as earnings from an office or employment but which are not monetary;

  

	 	(2)	when calculating benefits under the Arrangement, any reduction in the Executive’s emoluments owing to his absence from work due to, illness or injury shall be ignored;

  

	 	(3)	the Company shall finally determine the amount of Salary which shall be notified to the Executive on an annual basis by the Company . 

  
 “Service” means service with the Company. 
  
 “Statutory Transfer Options” means any statutory
entitlement the Executive has to transfer the retirement benefits from the Arrangement. 
  

	2.	BENEFITS PAYABLE 

  

	 	2.1	The Company shall pay to or in respect of the Executive the balance of the benefits set out at Rules 3-7 after first deducting from those benefits, all benefits which are payable to
and in respect of the Executive from the Approved Schemes and any Retained Benefits, on the assumption that they are receivable at the same time, whether or not that is the case. The deduction will apply both to pensions and cash lump sums including
any benefits or lump sums payable on death. 

  

	 	2.2	On the date of commencement of payment of the benefits from the Approved Schemes the Company shall pay the benefits payable under these Rules to or in respect of the Executive.

  

 6 

	3.	EXECUTIVE’S PENSION - NORMAL RETIREMENT DATE 

  

	3.1	If the Executive’s pension from the Approved Schemes starts on his retirement from Service at the Normal Retirement Date, the Company will pay the Normal Retirement Pension to
the Executive. 

  
 Even though the Executive
retires from Service at the Normal Retirement Date, the Company will not pay a Normal Retirement Pension if:- 
  

	 	(1)	the Executive stopped accruing pension before the Normal Retirement Date under Rule 5.1 and a Deferred Pension has become payable under Rule 5.2; or 

  

	 	(2)	it pays a cash sum in exchange for all of it under sub-rule 6.2. 

  
 The amount of the executives pension on retirement at normal retirement age will be a target pension of upto 2/3rds of his or her final pensionable
salary, as if there was no earnings cap, during the period of the employment within the pension scheme and upto normal retirement age of 63. This commitment is subject to deduction or account being taken of any retained or transferred in benefits
that the executive already has as a result of previous employment. 
  
 The pension will be increased on each 15 April after it starts by 5% or, if less, by the rate of increase in RPI in the twelve months to the previous December. The first increase will be pro rated on the basis the Actuary considers to be
equitable. If on any occasion after the Executive’s pension from the Approved Schemes starts, the trustees of the Approved Schemes increase that pension by a percentage greater than that described above, the Company will increase the amount of
the Executive’s pension by the same percentage and in respect of the same time period. 
  

	3.2	The amounts set out at sub-Rule 3.1 shall be reduced by any cash sum paid in lieu of pension under Rule 6 on a basis certified as reasonable by the Actuary.

  

	4.	EXECUTIVE’S PENSION - EARLY RETIREMENT 

  

	4.1	The Company will pay to the Executive an early retirement pension before Normal Retirement Date in the event that and at the time an early retirement pension is paid from the
Approved Schemes with the agreement of the Executive. If the Executive leaves Service before the Normal Retirement Date in any other circumstances, the Company will pay a deferred pension under Rule 5. 

  

 7 

	4.2	The amount of the early retirement pension under the Arrangement will be the amount, if any, by which the amount P below exceeds the Executive’s Approved Scheme Pension (or any
pension that represents Retained Benefits transferred to the Approved Schemes). 

  
 For this purpose, P is calculated from the formula: 
  

			
	 P =
	 	 N  x  (A-B)  x  F
	 	 	NS

  
 where 
  
 N = the Executive’s completed Service 
  
 NS = the period from the date the Executive joined Service to Normal
Retirement Date 
  
 A = two-thirds of the Executive’s Final
Pensionable Salary 
  
 B = the Executive’s Retained Benefits
valued as if they were payable at his Normal Retirement Date 
  
 F = the early retirement factor applicable to the Approved Scheme Pension in the circumstances of the Executive’s retirement 
  
 The Company will make sure that the total of the early retirement provision from the Arrangement and the Approved Scheme Pension is at least of the same
value as the value of the total of the deferred pensions from the Agreement and the Approved Schemes to which the Executive would have been entitled at Normal Retirement Date if the Executive had not agreed to receive the early retirement pension.

  
 The Company will reduce the early retirement pension if it
pays the Executive a cash sum in exchange for part of it under sub-rule 6.1. The reduction is described in sub-rule 6.1. 
  

 8 

	5.	EXECUTIVE’S PENSION - DEFERRED 

  

	5.1	An Executive will cease to accrue benefits under the Arrangement before Normal Retirement Date when:- 

  

	 	5.1.1 	he gives the Company 1 month’s written notice that he no longer wishes to be covered by the Arrangement; 

  

	 	5.1.2 	he terminates Service other than as a result of death; 

  

	 	5.1.3 	he ceases his active membership of the Approved Schemes; 

  

	5.2	In the circumstances at sub-rule 5.1 the Company will pay to the Executive a deferred pension from Normal Retirement Date. The Executive can ask the Company to pay the deferred
pension from the date on which his Approved Scheme Pension becomes payable instead of from the Normal Retirement Date. The Company will not pay a deferred pension if: 

  

	 	(1)	it pays an early retirement pension under Rule 4, or 

  

	 	(2)	it pays a cash sum in exchange for all of it under sub-rule 6.2 

  

	5.3	If the deferred pension under the Arrangement starts at Normal Retirement Date, it will be the amount, if any, by which the amount P below exceeds the total of the Executive’s
Approved Scheme Pension together with the Revaluation Increase. 

  
 For this purpose, P is calculated from the formula: 
  

			
	 P =
	 	 N  x  (A-B)
	 	 	NS

  
 where 
  
 N = the Executive’s completed Service 
  
 NS = the period from the date the Executive joined Service to his Normal
Retirement Date 
  
 A = two-thirds of the Executive’s Final
Pensionable Salary 
  
 B = the Executive’s Retained Benefits
valued as if they were payable at his Normal Retirement Date 
  

 9 

 If the Company starts to pay the deferred pension either before or after the Normal Retirement Date, it
will adjust the amount of the deferred pension. The Company will apply, as far as possible, the Approved Scheme Provisions dealing with the circumstances in adjusting the amount. The same will apply to any pension payable on the Executive’s
death under Rule 7. 
  
 The Company will reduce the deferred
pension if it pays the Executive a cash sum in exchange for part of it under sub-rule 6.1. 
  
 The Executive will not be able to transfer benefits in respect of his deferred pension to another arrangement except as required under the statutory transfer provisions of the Pension Schemes Act 1993. 
  

	6.	CASH IN LIEU OF PENSION 

  

	6.1	Executive Request 

  

	 	6.1.1 	The Executive may in writing request the Company to pay cash in lieu of part of the Executive’s Pension, such sum to be paid within seven days of the later of his pension
benefits becoming payable from the Approved Schemes and the Company receiving such instruction. 

  

	 	6.1.2 	The maximum amount of the cash sum will be the same proportion of the capital value of the Executive’s Pension as applicable in the Approved Schemes and will be determined by
the Actuary on such basis as he considers appropriate. 

  

	 	6.1.3 	In the event of a Change of Control the Company is required to pay to the Executive or to his personal representatives within one month of the Change of Control, or such longer
period as the parties agree in writing, a cash sum in lieu of benefits due under the Arrangement, unless the Executive advises the Company otherwise in writing. The amount of the cash sum will be determined by the Actuary as being equivalent to the
value of the benefits payable to or in respect of the Executive under the Arrangement. 

  

	 	6.1.4 	 In the event of a Change of Control during payment of a pension to any person other than the Executive under the Arrangement the Company is required to pay that
person or his personal representatives within one month of the Change of Control, or such longer period as that person and the Company agree in writing, a 

  

 10 

	 	 
cash sum in lieu of future pension instalments due under the Arrangement to that person. The amount of the cash sum will be determined by the Actuary as
being equivalent to all the future amounts of pension which would otherwise be payable under the Arrangement to that person. 

  

	6.2	Company Request 

  
 The Company may, at its discretion, offer the Executive or any other person entitled to a pension under the Arrangement a cash sum in lieu of all pension
and cash benefits payable under the Arrangement. In the event that the Executive or that person agrees to payment of the cash sum, no further benefits whatsoever will be payable from the Arrangement to the Executive or to any other person. Such
agreement may be reached before or during payment of the Executive’s pension, but will not be payable until the Executive’s pension would otherwise start to be paid. When the cash sum has been paid the Arrangement will terminate.

  
 The amount of the cash sum will be determined by the Actuary
as being equivalent to the value of the benefits payable to or in respect of the Executive under this arrangement. 
  

	7.	DEATH BENEFITS 

  

	7.1	Lump Sum 

  

	 	7.1.1 	If the Executive dies in Service and a lump sum is payable under the Approved Schemes the Company will provide a benefit under an insurance policy and pay it out in accordance with
Rule 8. 

  
 The Company will insure and pay out a
lump sum equal to the difference between an amount equal to (i) 4 x the greater of Final Pensionable Salary and Salary less (ii) the lump sum death benefits payable from the Approved Schemes and any Retained Benefits. 
  

	 	7.1.2 	 In the event that the Executive dies during payment of the Executive’s pension and a lump sum benefit of a guaranteed payment of instalments is paid under the
Approved Schemes the Company will pay a cash sum in lieu of the amount the Company decides is equal to the remaining instalments of the Executive’s Pension from the Arrangement, without discounting or allowing for future increases. The 

  

 11 

	 	 
payment will be made to those who would be entitled under the Approved Schemes and on the same pro-rata share. 

  

	7.2	Pension 

  

	 	7.2.1 	In the event that a pension is payable to an individual from the Approved Schemes on the death of the Executive a pension will be paid to the same individuals and for the same
period as would apply under the Approved Schemes. 

  

	 	7.2.2 	The pension payable at 7.2.1 shall be subject to reduction or withdrawal in the event that a cash sum has been paid in lieu of pension under the Rules. 

  
 Pension on death in service 
  

	 	7.2.3 	In the event of the Executive’s death in Service: - 

  

	 	(i)	the Company shall pay to the Executive’s spouse or surviving adult dependant entitled to a pension under the Approved Schemes a pension of one half of the prospective pension
to which the Executive would have been entitled on reaching Normal Retirement Date. For this purpose the Executive’s prospective pension is the total pension the Executive would have been entitled to from both the Arrangement and the Approved
Schemes at Normal Retirement Date (except any pension provided by the Retained Benefits transferred into the Approved Schemes), based on his Final Pensionable Salary at the date of his death. 

  
 The pension will be increased on each 15 April after it starts by 5% or, if
less, by the rate of increase in RPI in the twelve months to the previous December. If the pension starts after 15 April the first increase will be pro rated on the basis the Actuary considers to be equitable. If on any occasion after the
spouse’s or surviving adult dependant’s pension from the Approved Schemes starts, the trustees of the Approved Schemes increase that pension by a percentage greater than that described above, the Company will increase the amount of the
spouse’s or surviving adult dependant’s pension by the same percentage and in respect of the same time period. 
  

	 	(ii)	 the Company shall pay a pension to each of the Executive’s children who are entitled to a payment of pension under the Approved Schemes. The total pension
payable will be one half of the prospective pension to which 

  

 12 

	 	 
the Executive would have been entitled on reaching Normal Retirement Date and this will be divided by the number of children entitled to a payment of pension
under the Approved Schemes and an equal amount paid to each child whilst a children’s pension is payable from the Approved Schemes. 

  
 Each pension payable in accordance with this sub-Rule 7.2.3(ii) will be increased on each 15 April after it starts by 5% or, if less, by the rate of
increase in RPI in the twelve months to the previous December. If the pension starts after 15 April, the first increase will be pro rated on the basis the Actuary considers to be equitable. If on any occasion after the child’s pension from the
Approved Schemes starts, the trustees of the Approved Schemes increase that pension by a percentage greater than that described above, the Company will increase the amount of the child’s pension by the same percentage and in respect of the same
time period. 
  
 Pension on death after commencement of
Executive’s Pension 
  

	 	7.2.4 	In the event of the Executive’s death during payment of the Executive’s Pension the Company shall pay to the Executive’s surviving spouse or surviving adult dependant
entitled to a pension under the Approved Schemes a pension of one-half of the Executive’s total pension from the Arrangement and the Approved Schemes, assuming the Executive had not taken any cash in exchange for pension from either the
Arrangement or the Approved Schemes, less that person’s Approved Scheme Pension. 

  
 The pension will be increased on each 15 April after it starts by 5% or, if less, by the rate of increase in RPI in the twelve months to the previous
December. If the pension starts after 15 April the first increase will be pro rated on the basis the Actuary considers to be equitable, unless the Executive’s Pension had started on or before the previous 15 April. If on any occasion after the
spouse’s pension from the Approved Schemes starts, the trustees of the Approved Schemes increase that pension other than a guaranteed minimum pension by a percentage greater than that described above, the Company will increase the amount of the
spouse’s pension by the same percentage and in respect of the same time period. 
  

 13 

 Commutation of Dependants’ Pensions 
  

	 	7.2.5 	The Executive may request in writing that the Company pay a cash sum in lieu of part or all of the pension benefits payable under this Rule 7 in the event of the death in Service of
the Executive. 

  

	8.	PAYMENT OF LUMP SUM DEATH BENEFITS 

  

	8.1	Discretionary trust 

  
 During the period of two years from the Executive’s death the Company shall hold any lump sum death benefits upon trust with power to pay or apply
the benefits to one or more of the Executive’s Beneficiaries and in such shares decided by the Company at its absolute discretion. 
  
 If, in the Company’s opinion, there is no living individual within the definition of Beneficiaries to or in respect of whom the Company could pay or
apply the benefits, the Company shall hold such benefits upon trust to pay or apply the benefits to the Executive’s legal personal representatives. 
  
 Under no circumstances shall any benefits (or part of them) be paid or applied to or for the benefit of the Company. 
  

	8.2	Payment to other trusts on the Executive’s death 

  
 In exercise of the power under Rule 8.1 the Company shall, during the two year period, have power to transfer the whole or any part of the said benefits
to the trustees of a separate trust for the benefit of all or any one or more of the Beneficiaries, and with and subject to such powers of appointment and such other discretionary trusts and powers (exercisable by the trustees of the separate trust
or by any other person), and such provisions for maintenance, education, advancement and accumulation of income during a minority, as the Company may in their absolute discretion think fit. The Company shall have power themselves to declare any such
separate trust and to appoint as trustees or trustee of that trust any two or more persons or a corporate body as the Company may decide and to provide for the remuneration of such trustees or trustee. 
  

 14 

	8.3	Payment to a Beneficiary unable to give a receipt 

  
 If the Company decide that a person is unable to give a proper receipt because he is: 
  

	 	(i)	under 18 years of age; or 

  

	 	(ii)	in the Company’s opinion, unable to manage his own affairs as a result of any incapacity; 

  
 they may apply any amount due for his benefit, or may pay such amount to some other person or persons to do so. Any payment
made in good faith shall operate as a complete discharge to the Company. The Company shall not be required to supervise or enquire into the amount so paid. 
  

	8.4	Unclaimed or unapplied benefits 

  
 Any death benefit (or that part of it) remaining unpaid or unapplied at the end of two years after the death of the Executive, shall be forfeited and
applied in accordance with Rule 9. 
  

	9.	NON-ASSIGNMENT, FORFEITURE, LIEN AND BANKRUPTCY/INCAPACITY 

  

	9.1	Non-assignability of benefits 

  
 The assignment by an Executive (or any other person entitled to Relevant Benefits under the Scheme) of any benefit under the Arrangement is prohibited.

  

	 	9.1.1 	If, at any time: 

  

	 	(i)	a person entitled to benefit from the Arrangement attempts to assign or charge all or part of his beneficial interest under the Arrangement; or 

  

	 	(ii)	any other act or event occurs whereby the benefits in respect of a Member from the Arrangement would be vested in, payable to or charged in favour of any other individual, firm,
undertaking or company, 

  
 that benefit shall be
forfeited and applied in accordance with Rule 9.2. 
  

	9.2	Forfeiture 

  
 Any amount or benefit forfeited under the Rules ceases to be payable. 
  
 The Company may, in its absolute discretion, pay or apply an equivalent benefit for the maintenance, personal support or
benefit of the Executive or to one or more of his dependants in such shares as it decides. 
  
 In no circumstances shall any payment be made to a purported assignee or charge. 
  

 15 

	9.3	Company’s Lien 

  
 In the event that the Executive has a monetary obligation to the Company arising out of a criminal or fraudulent act or an omission and the Company
provides certification of that amount to the Executive:- 
  

	 	9.3.1	The Company shall reduce or withdraw the pension and cash sum benefits payable under the Rules to the extent of the value of the monetary obligation. 

  

	 	9.3.2	If a dispute arises between the Company and the Executive on the amount of the monetary obligation then the reduction or withdrawal of benefits may only apply if the monetary
obligation is enforceable by a court order or arbiter’s award. 

  

	9.4	Bankruptcy/Incapacity to Act 

  
 If any person to whom a benefit is payable under the Arrangement is a bankrupt, or, is in the opinion of the Company, unable to manage his affairs or is
incapacitated:- 
  

	 	9.4.1 	the Company may, at its discretion, pay the benefit in whole or in part to any guardian, dependant or any other person who is responsible for the maintenance of that person,
including trustees of any other trust for the benefit of that person and their receipt will discharge the Company for that benefit; 

  

	 	9.4.2 	if the person is a bankrupt, no payment shall be made to any trustee or to any other person acting on behalf of his creditors. 

  

	10.	PAYMENT OF BENEFITS AND DISPUTES 

  

	10.1	Tax which becomes payable 

  
 If any income tax or other fiscal imposition becomes payable in respect of any benefit payable under the Rules the Company may deduct all or any part of
such taxes, duties and fees from any payment of benefits made. The time and manner in which the said income tax or other fiscal imposition shall be paid shall be decided by the Company in its discretion. 
  

 16 

	10.2	Information Required 

  
 The Company is entitled to request such reasonable information and evidence prior to making payment of any benefit and can withhold payment until such
information and evidence is received. 
  

	10.3	Pensions Payment 

  
 The Company will make payment of pensions on the same basis as is used for payment of pensions under the Approved Schemes. 
  

	10.4	Pension Increases 

  
 In the event of increases being applied to the Executive’s benefits from Approved Schemes and from Retained Benefits during the payment of the
Executive’s Pension the Company shall be entitled to deduct the amount of the increases from the Executive’s Pension. 
  

	10.5	Expenses 

  
 The Company can deduct all reasonable expenses incurred in the application of the death benefits. 
  

	10.6	Disputes 

  
 In the event that the Executive gives a written notice indicating that he does not agree the calculation of any amount payable under the Arrangement or
disputes any other matter under the Arrangement (“Dissent Notice”), the Company and the Executive will negotiate in good faith with a view to agreeing the calculation of the amount payable or agreeing the dispute and if agreement is not
within reached within 28 days after receipt by the Company of the Dissent Notice, either party may request the other to agree the appointment of an independent actuary (the “Expert”) to provide a statement of the calculation or a statement
on the disputed matter. 
  
 If the Company and the Executive fail
to agree the identity of the Expert within seven days of the request for the appointment being made, either of them may apply to the President for the time being of the Faculty of Actuaries to nominate the Expert and such nomination will be final
and binding on the parties. 
  

 17 

 The Expert shall act as an expert and not as an arbiter, his professional fees and expenses shall be
borne by the Company and the Executive in such proportions as he shall direct and, in making any direction, he shall have regard to the merits of the arguments placed before him by each party in relation to the calculation of the amount payable or
in relation to the disputed matter. 
  

	11.	SUBSTITUTION OF COMPANY 

  
 The Company may be substituted by a replacement company subject to that replacement taking on the Company’s rights and obligations and agreement of
the Executive or, where appropriate, any other person who is in receipt of payment of benefits under the Arrangement. A deed must be entered into among the Company, the substitute company and the Executive. 
  

	12.	TERMINATION AND WIND-UP 

  

	12.1	The Arrangement will wind up on final payment of all benefits to or in respect of the Executive. In the event of the Company being liquidated, put into receivership or being subject
to administration with no substitute company taking on its obligations under Rule 11 then the Arrangement will wind up under sub-Rule 12.2. The Company must give notice to the Executive that wind up will take place. 

  

	12.2	

  

	 	12.2.1  	The Executive may exercise his transfer options under statute within 3 months of the notice from the Company that the Arrangement is winding up. 

  

	 	12.2.2  	If the Arrangement winds-up during payment of the Executive’s Pension then the Company will pay a cash sum to the Executive in lieu of the remainder of pension instalments.
This sum will be calculated by the Actuary to the Approved Schemes to be equivalent to the pension. 

  

	 	12.2.3  	If a beneficiary is in receipt of pension the Company will pay a cash sum to the beneficiary in lieu of the remainder of pension instalments. This sum will be calculated by the
Actuary to the Approved Schemes to be equivalent to the pension. 

  

 18 

	 	12.2.4  	If the Executive has not yet received any benefits from the Arrangement the Company will pay to or in respect of the Executive a cash sum in lieu of all benefits payable. This sum
will be calculated by the Actuary to the Approved Schemes to be equivalent to the pension. 

  

 19 

 ANNEX 4 
  
 PENSION & UURB SUMMARY 
  
 IMPORTANT NOTICE REGARDING THIS ANNEX 
  

	1	The following constitutes an indicative summary, for illustrative purposes only, of some of the benefits and the terms and conditions to which the Executive
may be subject. The summary is not, and is not intended to be, of a contractual nature and neither does it constitute any representation, warranty, condition, term or binding description as to the benefits (if any) that the Pensions Schemes
(including Executive Top Up Schemes) or UURBS might bestow. 

  

	2	Both Pension Schemes and the UURBS arrangements (including Executive Top Up Schemes) are subject to detailed relevant rules and procedures all of which are set out in the various
scheme documents, which are available on request. 

  

	3	Membership of neither UURB nor the Executive Top Up Scheme is conveyed under the terms and conditions of employment of an Executive except where expressly indicated
in the Table. (For certain long-service Executives neither of the UURB’s or Executive Top Up Schemes might convey rights or entitlements in addition to those to which an Executive may already be entitled under pre existing Pension Schemes
applicable to them with the effect that for these individuals alone the Table expressly excludes entitlement to such Schemes – See Note D below) . 

  

	A	GENERAL 

  
 The main benefits of the ScottishPower pension scheme arrangements as described in this Annex are: 
  

	 	•	 	Pension for life - from normal retirement age (63) or the option, at retirement and so far permissible by relevant law and regulation at retirement, to take a tax-free lump sum and
a reduced pension. 

  

	 	•	 	Insurance Cover in Service (Death in Service Benefit) - while the Executive remains a contributing employee of the Company only, comprised of a Lump sum of 4 x pensionable salary
(uncapped) & dependants or spouses pension of 1⁄2 prospective pension to age 63. 

  

	 	•	 	Insurance Cover whilst retired - with full pension guaranteed for 5 years and dependants or spouses pension of 1⁄2 members pension thereafter. 

  

	 	•	 	Permanent Disability Cover - if early retirement arises due to permanent ill health or permanent disability a permanent disability pension payable for life.

  

	 	•	 	Imposed Early Retirement I - if age 50+ and 2 years Pensionable Service and where termination of employment is as a result of redundancy or reorganisation, immediate payment of
accrued pension without actuarial reduction. 

  

	 	•	 	Imposed Early Retirement II - if age is under 50, with 2 or more years Pensionable Service and termination is as a result of redundancy or reorganisation then subject
to (i) the request or recommendation of the Company which can (subject to other terms of an Executives contract of Employment) be withheld in its absolute discretion; and (ii) the agreement of the trustees of the relevant scheme: a
deferred pension, payable from 50, without actuarial reduction. 

  

	 	•	 	If less than 2 years Pensionable Service and termination occurs in any circumstances, pension payable from age 63. 

  
 Note: Subject to the relevant Pension Scheme Rules, “Pensionable Service” for the
purposes of the relevant pension schemes means actual service with the Company, or a member of the ScottishPower Group, including transferred in benefits, and may (for the purpose of the terms and conditions of employment of an Employee) include the
period of service that would have elapsed had the Company given the period of notice of termination required to be given pursuant to an individual’s terms and conditions of employment. 
  

	B	The ScottishPower Executive Top Up Plan (“Top Up Plan”) 

  
 The Top Up Plan, where applicable to an Executive, aims to give eligible ScottishPower senior executives (“the Executive”) the right to earn a target maximum
pension of up to two-thirds of his Final Salary, as if there was no Inland Revenue earnings cap, during the period of an Executive’s pensionable employment (i.e. as a contributing member of the Pension Scheme) and up to the normal retirement
age of 63. This commitment is subject to deduction, or account being taken, of any retained or transferred in benefits that the Executive already has a result of previous employment. 
  
 The Top Up Plan combines the following elements: 
  

	 	•	 	ScottishPower Scheme “approved” pension benefit – based on service to normal retirement age and subject to the Inland Revenue earnings cap. 

 

	 	•	 	Executive Plan “approved” benefit – based on the Executive’s deemed (i.e.enhanced) pensionable service and his/her current salary (subject to the
earnings cap). Total benefits, include “transferred in” and retained benefits but cannot, and do not, exceed the Inland Revenue limit. 

  

	 	•	 	Executive Plan “unapproved” benefits – the balance between the Executive’s target pension under the plan and the Inland Revenue limits. 

 

	C	Unfunded Unapproved Retirement Benefits (UURBS) 

  
 The UURBS effectively means that the company, itself, makes provision for its Executive’s pension commitments above the Inland Revenue limits as
determined by that earnings cap which applies to Employees who joined the Company on or after 1st June 1989 all in
accordance with the UURBS Deed and Rules. 
  

	D	Notes Common to B and C 

  
 The extent to which the Employee benefits, or would benefit, from the Top Up Plan or UURBS depends upon a number of factors including: 
  

	 	•	 	the potential length of his/her period of service with ScottishPower at the normal retirement age of 63 

  

	 	•	 	the existing value of his/her retained benefits at the time of entering the relevant UURB or Top Up Plan 

  

	 	•	 	the issue of whether the Executive joined the group on or after 1 June 1989 (being therefore subject to the Inland Revenue pensionable salary cap (currently £99,000 pa)).

  
 The precise value and composition of the pension benefits
bestowed by the Top Up and UURBS plans, and accordingly the need for an Executive to be a participatory member in either such scheme, will vary for each Executive Top-Up Plan member based on their own individual situation.

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