Document:

Exhibit 10.13

 

 

 

RULES OF THE

CYCLACEL GROUP PLC

DISCRETIONARY

SHARE OPTION PLAN (APPROVED AND UNAPPROVED PARTS)

 

 

Authorised by shareholders on 1 July, 2004

Adopted by the Board on 30 June, 2004

Part A approved by the Inland Revenue on [      ]
under reference:
X22776/IDA

 

 

ALLEN & OVERY LLP

LONDON

ICM: 874712.1

 

1

 

CONTENTS

 

	
  Rule

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PART A: APPROVED PART

  	
   

  
	
  1.

  	
  Grant
  of Options

  	
   

  
	
  2.

  	
  Option
  Price

  	
   

  
	
  3.

  	
  Plan
  limits

  	
   

  
	
  4.

  	
  Rights of exercise

  	
   

  
	
  5.

  	
  Lapse
  of Options

  	
   

  
	
  6.

  	
  Exchange of Options

  	
   

  
	
  7.

  	
  Exercise
  Process

  	
   

  
	
  8.

  	
  Adjustment of Options

  	
   

  
	
  9.

  	
  Administration

  	
   

  
	
  10.

  	
  Amending
  the Plan

  	
   

  
	
  11.

  	
  General

  	
   

  
	
  12.

  	
  Governing
  law

  	
   

  
	
  PART B: UNAPPROVED PART

  	
   

  
	
  1.

  	
  Application of Part A

  	
   

  
	
  2.

  	
  Grant of Options

  	
   

  
	
  3.

  	
  Individual
  Limit

  	
   

  
	
  4.

  	
  Inland Revenue Approval

  	
   

  
	
  5.

  	
  Variation

  	
   

  
	
  6.

  	
  Withholding
  for Tax & National Insurance Contributions

  	
   

  
	
  7.

  	
  Extension of Plan
  Overseas

  	
   

  
	
  Definitions Appendix

  	
   

  
	
  1.

  	
  Interpretation

  	
   

  
	
  2.

  	
  Definitions

  	
   

  
					

 

2

 

RULES OF THE CYCLACEL GROUP PLC

 

DISCRETIONARY SHARE OPTION PLAN

 

PART A: APPROVED
PART

 

1.                                     GRANT
OF OPTIONS

 

1.1                              How
Options are granted

 

The Grantor
may, at its discretion, grant to any Eligible Employee nominated by the
Remuneration Committee an Option at the Option Price over such whole number of
Shares as it decides, in accordance with the Rules.

 

1.2                              Manner
of grant and payment for Options

 

On the Date
of Grant, an Option will be granted as a deed, (or if the Company is not
incorporated under the laws of England and Wales in such form as to make it a
binding agreement between the Company and the Participant).  A single deed of grant may be executed in
favour of any number of Participants. 
There will be no payment for the grant of an Option.

 

1.3                              When
Options can be granted

 

(a)                                 Options
can only be granted during the period of 42 days starting on any of the
following:

 

(i)                                     the
day after the date on which the Company releases its results for any period;

 

(ii)                                  the
date of formal approval of the Plan by the Inland Revenue under
Schedule 4;

 

(iii)                               any
day on which the Remuneration Committee resolves that exceptional circumstances
exist which justify the grant of Options;

 

(iv)                              any
day on which any change to the legislation affecting discretionary share option
plans is announced or made;

 

(v)                                 the
day immediately following any general meeting of the Company;

 

(vi)                              the
day following the lifting of any restrictions imposed by statute, order,
regulation or the Model Code;

 

(b)                                No
Option can be granted after the Plan Period.

 

1.4                              Conditions
(including performance targets)

 

The exercise
of an Option may be subject to the satisfaction of a performance target or
other condition selected by the Remuneration Committee, which, in either case,
will normally have to be met before the Option can be exercised.  Such performance target or conditions:

 

(a)                                  must
be objective and stated in writing at the Date of Grant;

 

(b)                                 may
not be amended unless an event occurs which causes the Remuneration Committee
to consider that an amendment to the performance target or condition

 

3

 

would be fairer and more
reasonable and the performance target or condition as amended would be no more
difficult to satisfy;

 

(c)                                  may
be waived if an event occurs which causes the Remuneration Committee reasonably
to consider that it should be waived.

 

In setting a
performance target or condition, the Remuneration Committee will take into
consideration the principles of good corporate governance applicable to a
company such as the Company (including, if the Remuneration Committee considers
it appropriate, the “Principles and Guidelines on Executive Remuneration”
published by the Association of British Insurers from time to time).

 

1.5                              Approvals
and consents

 

The grant of
an Option will be subject to obtaining any approval or consent required under
any applicable regulations or enactments.

 

1.6                              Notification
of grant

 

A
Participant will be issued with an option certificate specifying the Date of
Grant, the number of Shares under the Option, the Option Price, and any
performance targets and conditions.

 

1.7                              Options
personal to Participants

 

An Option
may not, nor may any rights in respect of it, be transferred, assigned, charged
or otherwise disposed of to any person other than on the death of a
Participant, when an Option may be transmitted to the Participant’s personal
representatives.

 

1.8                              Disclaimer
of Options

 

A
Participant may disclaim all or part of his Option by notice in writing to the
Secretary of the Company within 30 days after the Date of Grant.  No consideration will be paid for the
disclaimer of the Option.  To the extent
that an Option is disclaimed, it will treated for all purposes as never having
been granted.

 

1.9                              National
Insurance elections and agreements

 

The Company may require, as a condition of exercise, an agreement under
paragraph 3A of Schedule 1 to the Social Security Contributions and Benefits
Act 1992 or to make an election under paragraph 3B of Schedule 1 to that Act in
relation to any secondary Class I National Insurance contributions arising on
the exercise of the Option.

 

2.                                     OPTION
PRICE

 

2.1                              Option
Price

 

The Board
will decide the Option Price of an Option which will be stated at the Date of
Grant.  The Option Price cannot be less
than the higher of:

 

(a)                                  the
Market Value of a Share on the Dealing Day immediately preceding the Date of
Grant or, if the Board decides, the average of the Market Values on the three
Dealing

 

4

 

Days immediately preceding the
Date of Grant or the Market Value at any earlier time or times agreed by the
Board and the Inland Revenue; and

 

(b)                                 the
nominal value of a Share, if the Shares are to be subscribed,

 

but subject
to any adjustment under Rule 8.

 

2.2                              Excluded
Market Value

 

The Option
Price may not be determined on the basis of the Market Value of a Share on a
day which is earlier than the first Dealing Day following:

 

(a)                                  the
date of Revenue approval; or

 

(b)                                 the
day after the Company releases its results for any period.

 

3.                                     PLAN LIMITS

 

3.1                              Limit
imposed by the Inland Revenue

 

No Option
will be granted to an Eligible Employee if it would, at the Date of Grant,
result in:

 

(a)                                  the
total Market Value of the Shares (calculated under Rule 2.1(a)) which the
Eligible Employee could acquire on exercise of the Option; and

 

(b)                                 the
aggregate market values of the shares which the Eligible Employee could acquire
on the exercise of any option(s) granted under the Plan and any other
discretionary share option plan approved by the Inland Revenue and established
by the Company or by an Associated Company,

 

exceeding
£30,000 or any other limit applicable under paragraph 6 of Schedule 4 from
time to time.  In determining the limit
in this Rule 3.1, no account will be taken of any Shares where the right to
acquire them was disclaimed under Rule 1.8 or was exercised or has lapsed.

 

3.2                              Limit
on individual participation

 

No Option
will be granted to an Eligible Employee which would, at the Date of Grant,
result in the total Market Value of Shares over which he has been granted
options in the preceding 12 months under the Plan and any other discretionary
share option plan to exceed 100% of the Eligible Employee’s total remuneration
(including bonuses and commissions but excluding benefits in kind) from any
Participating Company employing him or with which he holds an office in the 12
months preceding the Date of Grant. 
However, in exceptional circumstances and at the discretion of the
Remuneration Committee, the individual limit on participation may be increased
to a maximum of 200% of the Eligible Employee’s total remuneration (including
bonuses and commissions but excluding benefits in kind) from any Participating
Company employing him or with which he holds an office in the 12 months
preceding the Date of Grant.

 

3.3                              The
10 per cent. limit over 10 years

 

The number
of Shares which may be allocated under the Plan on any day cannot, when added
to the aggregate of the number of Shares which have been allocated in the
previous 10 years under the Plan and any other Employees’ Share Plan adopted by
the Company, exceed that

 

5

 

number of
Shares that represents 10 per cent. of the ordinary share capital of the
Company in issue immediately prior to that day.

 

3.4                              The
five per cent. limit over 10 years

 

The number
of Shares which may be allocated under the Plan on any day cannot, when added
to the aggregate of the number of Shares which have been allocated in the
previous 10 years under the Plan and any other share option plan in which
participation is at the discretion of the grantor of options under that plan
adopted by the Company, exceed that number of Shares that represents five per
cent. of the ordinary share capital of the Company in issue immediately prior
to that day.

 

3.5                              Exclusions
from the limits in Rules 3.3 and 3.4

 

In
calculating the limits in Rules 3.3 and 3.4:

 

(a)                                  any
Shares where the right to acquire them was released or lapsed;

 

(b)                                 any
Shares which are or have been allocated under the Cyclacel Group plc Senior
Executive Incentive Plan;

 

(c)                                  any
Option intended to be satisfied by transferring or processing the transfer of
existing Shares to the Participant.

 

will be
disregarded.

 

In
calculating the limit under Rule 3.4, there will also be disregarded any Shares
which were allocated under any other Employees’ Share Plan before admission of
the Shares to the Official List of the London Stock Exchange or any other
Recognised Stock Exchange.

 

3.6                              Meaning
of allocation

 

References
to Shares being allocated means, in the case of any share option plan, the
placing of unissued Shares or treasury Shares under option and, in relation to
other types of Employees’ Share Plan, means the issue and allotment of Shares
or, the transfer of Shares out of treasury.

 

3.7                              Grant
of Options in excess of limits

 

If an Option
is granted on terms which do not comply with this Rule 3, the number of Shares
over which that Option has been granted will:

 

(a)                                  in
the case of Rule 3.1 be reduced automatically to the largest lower number that
will ensure compliance with the relevant rule; or

 

(b)                                 in
any other case, together with the number of Shares over which all other Options
have been granted on the same Date of Grant, be reduced pro rata to the largest
lower number that complies with the relevant Rule.

 

An adjusted
Option will take effect from the Date of Grant as if it had been granted on the
adjusted terms.

 

6

 

3.8                              Adjustment
to Shares to be taken into account

 

Where Shares
which have been issued under the Plan or any other Employees’ Share Plan
adopted by the Company are to be taken into account for the purposes of the
limits in this Rule 3 and a Variation has taken place between the date of issue
of those Shares and the date on which the limit is to be calculated, then the
number of Shares taken into account for the purposes of the limit will be
adjusted in the manner the Board considers appropriate to take account of the
Variation.

 

4.                                     RIGHTS
OF EXERCISE

 

4.1                              General
rules for exercise

 

An Option
may not be exercised by the Participant (or, if appropriate the Participant’s
personal representative) at any time when the Participant cannot (or would not
have been able to) participate in the Plan due to the provisions of paragraph 9
of Schedule 4 (material interest in close company).  Except as provided in the other provisions
of this Rule 4, an Option:

 

(a)                                  may
be  exercised on or after the third
anniversary of the Date of Grant or any later date determined by the Board at
the Date of Grant;

 

(b)                                 may
only be exercised by a Participant while he is a director or employee of a
Participating Company or of an Associated Company;

 

(c)                                  may
only be exercised if any conditions imposed under Rule 1.4 and not waived have
been fulfilled to the satisfaction of the Board, other than following an
exchange of Options under Rule 4.10.

 

4.2                              Exercise
on ceasing to be a director or employee

 

Subject to
the provisions of Rule 5, an Option can be exercised at any time during the
period of 12 months following the earliest of the date on which the Participant
ceases to be an officer or employee of a Participating Company or an Associated
Company if cessation is because of:

 

(a)                                  injury,
disability, Redundancy, Retirement;

 

(b)                                 the
company which employs him ceasing to be under the Control of the Company or an
Associated Company;

 

(c)                                  the
transfer or sale of the undertaking or part-undertaking in which the
Participant is employed to a person who is neither under the Control of the
Company nor an Associated Company; or

 

(d)                                 a
reason other than those in Rule 4.2(a) to (c) above or Rule 4.5, at the discretion
of the Remuneration Committee, such discretion to be exercised within 14 days
of the cessation of office or employment.

 

4.3                              Extension
of period for exercise

 

If a
Participant ceases to be an officer or employee of a Participating Company or
an Associated Company in any of the circumstances referred to in Rule 4.2 the
Board may extend the period of exercise of the Participant’s Option so that
subject to Rule 5 it will remain exercisable until six months after the third
anniversary of its Date of Grant.

 

7

 

4.4                              Pregnancy

 

For the
purposes of Rule 4.2(a) a Participant who leaves employment because of
pregnancy will be regarded as having left employment on the day on which she
indicates either that she does not intend to return to work or that she will
not be returning to work.  If she gives
no indication she will be treated as having left employment on the date after
the day on which maternity pay under the Employment Rights Act 1996 ceases to
be payable, or if later, any other date specified in the terms of her
employment, without her returning to work.

 

4.5                              Death

 

Any Option
held by a Participant who dies can be exercised by his personal representatives
within 12 months after the date of death, but in any event before the tenth
anniversary of the Date of Grant.

 

4.6                              Transfer
overseas

 

Any Option
held by a Participant transferring to a country outside the United Kingdom who
continues or will continue to hold an office or employment with a Participating
Company or an Associated Company as a result of that transfer and will either:

 

(a)                                  become
subject to income tax on his remuneration in the country to which he is
transferred so that he will suffer a tax disadvantage on the exercise of his
Option following the transfer; or

 

(b)                                 become
subject to restrictions on his ability to exercise his Option or to deal in the
Shares that may be acquired upon the exercise of that Option because of the
securities laws or exchange control laws of the country to which he is transferred,

 

may be
exercised in the period beginning three months before and ending three months
after the transfer of the Participant subject to performance conditions being
satisfied.

 

4.7                              General
offer

 

Subject to
satisfying the relevant performance conditions and Rule 5 and provided an
Option is not to be exchanged under Rule 4.10, an Option can be exercised
within the period of 6 months following the date on which an offeror (together
with others, if any, acting in concert with the offeror) obtains Control of the
Company as a result of making a general offer to acquire all the issued
Ordinary Shares of the Company or all of the Shares of the Company which are of
the same class as the Shares and any conditions  to which the offer was subject have been satisfied.

 

4.8                              Section 429
notice

 

Subject to
satisfying the relevant performance conditions and Rule 5 and provided an
Option is not to be exchanged under Rule 4.10, an Option can be exercised in
the period during which a person is entitled under sections 428 to 430F of the
Companies Act 1985 to acquire any Shares (or who would be so entitled but for
the fact that there were no dissenting shareholders on whom to serve notice).

 

4.9                              Company
reconstruction

 

Subject to
satisfying the relevant performance conditions and Rule 5 and provided an
Option is not to be exchanged under Rule 4.10, an Option can be exercised
within the period of six

 

8

 

months
following the date when the court sanctions a compromise or arrangement under
section 425 of the Companies Act 1985 (or comparable overseas legislation)
proposed for the purposes of or in connection with a scheme for the
reconstruction or amalgamation of the Company.

 

4.10                       Reorganisation
or merger

 

If a Company
(the “Successor Company”) has obtained Control of the Company, and the
shareholders of the Successor Company immediately after it has obtained Control
are substantially the same as the shareholders of the Company immediately
before that event, and the Successor Company consents to the exchange of
Options under this Rule, Options will not be exercisable but will be exchanged
during the Appropriate Period under the terms of Rule 6, save that references
to the Acquiring Company in that Rule will be deemed to be references to the
Successor Company.

 

4.11                       Winding-Up

 

Subject to
satisfying the relevant performance conditions, an Option may be exercised at
any time following the giving of notice of a meeting to consider the voluntary
winding-up of the Company, but before the relevant resolution has been passed
or defeated or the meeting adjourned indefinitely, conditionally on the
resolution being passed.  This Rule does
not apply where the winding-up is for the purpose of a reconstruction or
amalgamation.

 

5.                                     LAPSE
OF OPTIONS

 

To the
extent not exercised, an Option will lapse on the earliest of:

 

(a)                                  the
tenth anniversary of the Date of Grant;

 

(b)                                 the
expiry of twelve months from the date on which the Participant ceases to be an
officer or employee of a Participating Company or an Associated Company in any
of the circumstances referred to in Rule 4.2 or, if Rule 4.3 applies, the
expiry of six months following the third anniversary of the Date of Grant;

 

(c)                                  the
date on which a Participant ceases to be an officer or employee of a
Participating Company or an Associated Company in any circumstances other than
those referred to in Rule 4.2 or Rule 4.5;

 

(d)                                 the
expiry of the period of twelve months following the death of a Participant;

 

(e)                                  the
expiry of the period of six months following the occurrence of the
circumstances permitting the exercise of Options in Rules 4.7 and 4.9;

 

(f)                                    the
expiry of the period in Rule 4.8 during which a person is entitled or bound to
acquire Shares under sections 428 to 430F of the Companies Act 1985 unless the
Option has been exchanged under Rule 4.10;

 

(g)                                 the
passing of an effective resolution or the making of an order by the court for
the winding-up of the Company;

 

(h)                                 the
Participant being deprived of the legal or beneficial ownership of the Option
by operation of law, or doing or omitting to do anything which causes him to be
so deprived or being declared bankrupt;

 

9

 

(i)                                     the
Participant attempting to breach Rule 1.7; and

 

(j)                                     as
soon as any condition imposed under Rule 1.4 can, in the opinion of the Board,
no longer be met.

 

6.                                     EXCHANGE
OF OPTIONS

 

6.1                              The
Acquiring Company

 

If any
company (the “Acquiring Company”):

 

(a)                                  obtains
Control of the Company as a result of making a general offer to acquire:

 

(i)                                     the
whole of the issued ordinary share capital of the Company; or

 

(ii)                                  all
the shares in the Company which are of the same class as the Shares,

 

in either
case ignoring any Shares which are already owned by it or a member of the same
group of companies; or

 

(b)                                 obtains
Control of the Company as a result of a compromise or arrangement sanctioned by
the court under section 425 of the Companies Act 1985; or

 

(c)                                  becomes
entitled to acquire Shares under sections 428 to 430F of that Act,

 

any Participant
may, at any time within the Appropriate Period, by agreement with the Acquiring
Company, release any Option which has not lapsed (the “Old Option”) in
consideration of the grant to the Participant of a new Option (the “New
Option”) which (for the purposes of paragraph 27 of Schedule 4) is
equivalent to the Old Option but relates to shares in a different company
(whether the Acquiring Company itself or some other company falling within
paragraph 16(b) or (c) of Schedule 4).

 

6.2                              The
New Option

 

The New
Option will not be regarded as equivalent to the Old Option unless the
conditions set out in paragraph 27(4) of Schedule 4 are satisfied, but so
that the provisions of the Plan will for this purpose be construed as if the
New Option were an option granted under the Plan at the same time and on the
same terms as the Old Option except for the purpose of the definition of
“Participating Company” in the Appendix, and as if:

 

(a)                                  the
reference to Cyclacel Group plc in the definition of the “Company” in the Appendix
were a reference to the different company mentioned in Rule 6.1; and

 

(b)                                 Rule
10.2 was omitted.

 

For the
avoidance of doubt, the Plan remains that of the company which first
established this Plan prior to the Option exchange.

 

7.                                     EXERCISE
PROCESS

 

7.1                              Exercise
in whole or in part

 

An Option
may be exercised in whole or in part, provided that an Option may not be
exercised in respect of less than 100 Shares nor otherwise than in multiples of
100 Shares on any one occasion unless either the Option is over less than 100 

Shares or it
is the last occasion

 

10

 

on which the
Option is exercised, when it may be exercised in respect of any number of
Shares up to the number in respect of which it remains capable of exercise.

 

7.2                              Manner
of exercise

 

Subject to
Rule 7.1, to exercise an Option, the Participant must deliver at the address
specified in the notice of exercise:

 

(a)                                  an
option certificate for all the Shares over which the Option is then to be
exercised;

 

(b)                                 the
notice of exercise in the prescribed form properly completed and signed by the
Participant (or by his duly authorised agent); and

 

(c)                                  evidence
to the satisfaction of the Company that it has received or will receive as soon
as practicable payment in full of the Option Price for the aggregate number of
Shares over which the Option is to be exercised.

 

7.3                              Option
Exercise Date

 

If any
conditions must be fulfilled before an Option may be exercised, the Option will
not be validly exercised unless and until the Board is satisfied that those
conditions have been fulfilled. 
Otherwise, the Option Exercise Date will be the date of receipt of the
items referred to in Rule 7.2.

 

7.4                              Delivery
of Shares

 

Subject to
the other provisions of this Rule 7, the Grantor or the Board will procure the
delivery of any Shares to a Participant (or his nominee) pursuant to the
exercise of an Option within 30 days following the Option Exercise Date.

 

7.5                              Consents

 

The delivery
of any Shares under the Plan will be subject to obtaining any necessary
approval or consent.

 

7.6                              Ranking
of Shares

 

Shares
acquired by a Participant under the Plan will rank equally in all respects with
the Shares then in issue, except that they will not be entitled to any rights
attaching to the Shares by reference to a record date preceding the day on
which the Participant is entered on the Company’s register of shareholders in
respect of those Shares.

 

7.7                              Listing

 

If the
Shares are Listed, the Company will apply for Listing of any Shares issued under
the Plan as soon as practicable after their allotment.

 

8.                                     ADJUSTMENT
OF OPTIONS

 

8.1                              Variation
in equity share capital

 

If there is
a Variation in the equity share capital of the Company:

 

(a)                                  the
number and/or the nominal value of Shares over which an Option is granted; and

 

11

 

(b)                                 the
Option Price,

 

will be
adjusted in the manner the Board, with the prior approval of the Inland
Revenue, determines so that (as nearly as may be without involving fractions of
a Share or an Option Price calculated to more than two decimal places) the
Exercise Price will remain unchanged.

 

8.2                              Nominal
value of Shares

 

(a)                                 Apart
from under this Rule 8.2, no adjustment under Rule 8.1 can reduce the Option
Price to less than the nominal value of a Share. Where an Option subsists over
both issued and unissued Shares, an adjustment may only be made if the
reduction of the Option Price in respect of both the issued and the unissued
Shares can be made to the same extent.

 

(b)                                Any
adjustment made to the Option Price of Options over unissued Shares will only
be made if and to the extent that the Board is authorised to:

 

(i)                                     capitalise
from the reserves of the Company a sum equal to the amount by which the nominal
value of the Shares in respect of which the Option is exercisable exceeds the
adjusted Exercise Price; and

 

(ii)                                  apply
that sum in paying up the Shares;

 

so that on exercise of the Option the Board will capitalise that sum
and apply it in paying up the Shares.

 

(c)                                 Where
an Option subsists over issued Shares only, any adjustment to the Option Price
may be made under and in accordance with Rule 8.1.

 

8.3                              Notifying
Participants of adjustments

 

The Grantor
will take the steps it considers necessary to notify Participants of any adjustment
made under Rule 8 and may call in, cancel, endorse, issue or re-issue any
certificate as a result of that adjustment.

 

9.                                     ADMINISTRATION

 

9.1                              Notices

 

Any notice
or other communication in connection with the Plan will be in writing and may
be given:

 

(a)                                  by
personal delivery; or

 

(b)                                 by
sending it by post:

 

(i)                                     in
the case of a company, to its registered office or other address that it
notifies in writing; and

 

(ii)                                  in
the case of an individual, to the individual’s last known address, or where the
individual is a director or employee of a Participating Company or an
Associated Company either to the individual’s last known address or to the
address of the place of business at which the individual performs the whole or
substantially the whole of the duties of the individual’s office or employment;
or

 

12

 

(c)                                  by
sending it by facsimile, email or any form of electronic transfer acceptable to
the  Board:

 

(i)                                     in
the case of a company, to the facsimile number, email address or other number
or address that the company notifies; and

 

(ii)                                  in
the case of an individual, to the individual’s last known facsimile number or
email address, or where the individual is a director or employee of a
Participating Company or an Associated Company, to the individual’s workplace
facsimile number or email address.

 

9.2                              When
notice is given

 

Any notice
under Rule 9.1 will be given:

 

(a)                                  if
delivered, at the time of delivery;

 

(b)                                 if
posted, at 10.00am on the second business day after it was put into the post;
or

 

(c)                                  if
sent by facsimile, email or any other form of electronic transfer, at the time
of despatch.

 

In proving
service of notice it will be sufficient to prove that delivery was made or that
the envelope containing it was properly addressed, prepaid and posted or that
the facsimile message, email or other form of electronic transfer was properly
addressed and despatched as appropriate.

 

9.3                              Documents
sent to shareholders

 

Participants
may receive copies of any notice or document sent by the Company to the holders
of Shares.

 

9.4                              Partial
exercise of Options

 

If an Option
is exercised in part, the Grantor may call in, endorse or cancel and re-issue,
as it considers appropriate, any certificate for the balance of the Shares over
which the Option was granted.

 

9.5                              Replacement
option certificates

 

If any
option certificate is worn out, defaced or lost, it may be replaced on the
evidence that the Company requires being provided.

 

9.6                              Shares
to cover Options

 

The Grantor
will ensure that sufficient Shares are available to satisfy all outstanding
Options.

 

9.7                              Administration
of the Scheme

 

The Plan
will be administered by the Board.  The
Board has full authority, consistent with the Rules, to administer the Plan,
including authority to interpret and construe any provision of the Plan and to
adopt any regulations for administering the Plan and any documents it thinks
necessary or appropriate.  The Board’s
decision on any matter concerning the Plan will be final and binding.

 

13

 

9.8                              Costs
of introducing and administering the Plan

 

The costs of
introducing and administering the Plan will be borne by the Company.  However, the Company may require any
Participating Company or Associated Company to enter into an agreement which
obliges that company to reimburse the Company for any costs borne by the
Company, directly or indirectly, in respect of the Participating Company’s or
Associated Company’s officers or employees.

 

10.                              AMENDING
THE PLAN

 

10.1                       The
Board’s power to amend the Plan

 

Subject to
the provisions of this Rule 10, the Board can at any time amend any of the
provisions of the Plan in any respect.

 

10.2                       Shareholder
approval

 

Subject to
Rule 10.3 below, no amendment can be made to the advantage of Participants or
Eligible Employees to:

 

(a)                                  the
persons to whom Options may be granted;

 

(b)                                 the
limit on the number of Shares which may be issued under the Plan;

 

(c)                                  the
maximum entitlement for individual Participants;

 

(d)                                 the
rights attaching to Options and Shares;

 

(e)                                  the
determination of the Option Price;

 

(f)                                    the
rights of Participants in the event of a Variation; or

 

(g)                                 the
terms of this Rule 10.2,

 

without the
prior approval by ordinary resolution of the members of the Company in general
meeting.

 

10.3                       Permitted
amendments

 

Rule 10.2
will not apply to any amendment which is:

 

(a)                                  necessary
or desirable in order to obtain or maintain Inland Revenue approval of the Plan
under Schedule 4;

 

(b)                                 minor
and to benefit the administration of the Plan;

 

(c)                                  to
take account of any changes in legislation; or

 

(d)                                 to
obtain or maintain favourable taxation, exchange control or regulatory
treatment for the Company, any Participating Company or Associated Company or
any present or future Participant.

 

14

 

10.4                       Participants’
approval

 

No amendment
will be made under Rule 10.1 which would abrogate or materially affect
adversely the subsisting rights of a Participant unless it is made with the
Participant’s written consent or by a resolution passed as if the Options
constituted a separate class of share capital and the provisions of the
articles of association of the Company and of the Companies Act 1985 relating
to class meetings applied to that class mutatis mutandis.

 

10.5                       Notice
of amendments

 

Participants
will be given written notice of any amendments which affect the Options they
hold to the Plan made under Rule 10.1 as soon as reasonably practicable after
they have been made.

 

10.6                       Prohibited
amendment

 

No amendment
will be made to the Plan if, as a result of the amendment, it would cease to be
an Employees’ Share Plan.

 

10.7                       Inland
Revenue approval

 

While the
Plan is to remain approved by the Inland Revenue, no amendment to a key feature
(within the meaning of paragraph 30 of Schedule 4) following Inland
Revenue approval will have effect until after the amendment has been approved
by the Inland Revenue.

 

If the
Company wishes to terminate the approved status of the Plan, it will inform the
Inland Revenue as soon as is reasonably practicable after it has taken action
to do so.

 

11.                              GENERAL

 

11.1                       Termination
of the Plan

 

The Plan
will terminate at the end of the Plan Period or at any earlier time determined
by the Board.  Termination of the Plan
will not affect the subsisting rights of Participants.

 

11.2                       Funding
the Plan

 

The Company
and any Subsidiary of the Company may provide money to the Trustees or any
other person to enable them or him to acquire Shares to be held for the
purposes of the Plan, or enter into any guarantee or indemnity for those
purposes, to the extent permitted by any applicable law.

 

11.3                       Rights
of Participants and Eligible Employees

 

(a)                                 Nothing
in the Plan will give any officer or employee of any Participating Company or
Associated Company any right to participate in the Plan. Participation in one
grant does not imply a right to participate or be considered for participation
in a later grant.

 

(b)                                The
rights and obligations of any individual under the terms of the Participant’s
office or employment with a Participating Company or Associated Company will
not be affected by participation in the Plan nor any right which the
Participant may have to participate under it.

 

(c)                                 A
Participant holding an Option will not have any rights of a shareholder of the
Company with respect to that Option or the Shares subject to it.

 

15

 

11.4                       No
rights to compensation or damages

 

A
Participant waives all and any rights to compensation or damages for the termination
of the Participant’s office or employment with a Participating Company or
Associated Company for any reason whatsoever (including unlawful termination of
employment) insofar as those rights arise or may arise from the Participant
ceasing to have rights under or to be entitled to exercise any Option under the
Plan as a result of that termination or from the loss or diminution in value of
such rights or entitlements.  Nothing in
the Plan or in any document executed under it will give any Participant or
Eligible Employee or other person any right to continue in Employment or will
affect the right of the Company or any Associated Company to terminate the
employment of any Participant or Eligible Employee or any other person without
liability at any time, with or without cause, or will impose on the Grantor,
Company, any Participating Company, the Board or their respective agents and
employees any liability in connection with the loss of a Participant’s benefits
or rights as a result of the exercise of a discretion under the Plan for any
reason on the termination of the Participant’s employment.

 

11.5                       The
benefits of Rule 11.3 and 11.4

 

The benefit
of Rules 11.3 and 11.4 is given for the Company, for itself and as trustee and
agent of all its Subsidiaries and Associated Companies.  The Company will hold the benefit of these
Rules on trust and as agent for each of them and may assign the benefit of this
Rule 11.5 to any of them.

 

11.6                       Articles
of association

 

Any Shares
acquired on the exercise of Options shall be subject to the articles of
association of the Company.

 

11.7                       Witholding
for tax and National Insurance Contributions

 

If the Grantor or any Participating Company is obliged to account for
tax and Class 1 National Insurance contributions for which the Participant is
liable by virtue of the exercise of the Option, the Grantor or Participating
Company may withhold such amounts and/or make such arrangements as it considers
necessary to meet any liability to taxation or Class I National Insurance contributions,
including arrangements such that the Participant discharges the liability
personally.   If such liability has not
been discharged within a specified period notified to the Participant then the
Grantor or Participating Company may sell Shares on behalf of a Participant to
discharge the liability.

 

11.8                       Severability

 

The
invalidity or non-enforceability of one or more provisions of the Plan will not
affect the validity or enforceability of the other provisions of the Plan.

 

11.9                       Third
Parties

 

This Plan
confers no benefit, right or expectation on a person who is not a
Participant.  No third party has any
rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any
term of this Plan.  Any other right or
remedy which a third party may have is unaffected by this Rule.

 

16

 

11.10                Data
Protection

 

All
Eligible Employees agree as a condition of their participation in the Plan that
any personal data in relation to them may be held by a Participating Company
and/or a trustee and passed on to a third party broker, registrar,
administrator and/or future purchaser of the Company for all purposes relating
to the operation or administration of the Plan, including to countries or
territories outside the European Economic Area.

 

12.                              GOVERNING
LAW

 

These Rules
will be governed by and construed in accordance with the law of England.  All Participants, the Company and any other
Participating Company or Associated Company will submit to the jurisdiction of
the English courts in relation to any disputes arising under the Plan.

 

17

 

PART B: UNAPPROVED
PART

 

1.                                     APPLICATION
OF PART A

 

Save as
modified by the Rules set out below, all provisions in the Rules of Part A are
incorporated into this Part B as if fully set out herein and so as to be part
of Part B and (for the avoidance of doubt) shares allocated under this Part B
shall be taken into account for the purposes of Rule 3 of Part A.

 

2.                                     GRANT OF
OPTIONS

 

Rule 1.1
shall be amended by the insertion of the following words at the end:

 

“provided
that an Eligible Employee shall not be granted an Option if that Eligible
Employee is within a year of the age at which the Eligible Employee is bound or
entitled to retire under his contract of employment.”

 

3.                                     INDIVIDUAL
LIMIT

 

Rule 3.1 of
Part A will not apply in this Part B.

 

4.                                     INLAND
REVENUE APPROVAL

 

4.1                                Rules
1.3(a)(ii), 2.2(a), 10.3(a) and 10.7 will not apply to Options granted under
Part B of this Plan.  In Rule 2.1(a) the
words “and the Inland Revenue” will be deleted.  In Rule 8.1 the words “with the prior approval of the Inland
Revenue” will be deleted.

 

4.2                                Apart
from any election made under Rule 1.9, there will be no need to seek Inland
Revenue approval or agreement for anything done under Part B of this Plan and
references to events occurring by reference to Inland Revenue approval will be
ignored.

 

5.                                     VARIATION

 

Demerger or distribution in
specie

 

In the event
of a demerger, exempt distribution under section 213 of the Taxes Act or
other distribution in specie, Options may be adjusted in the manner described
in Rule 8.

 

6.            WITHHOLDING
FOR TAX & NATIONAL INSURANCE CONTRIBUTIONS 

 

The Grantor or any Participating Company may withhold such amounts
and/or make such arrangements as it considers necessary to meet any liability
to taxation or Class I National Insurance contributions, including the sale of
Shares on behalf of a Participant, unless the Participant discharges the
liability personally.

 

7.                                     EXTENSION
OF PLAN OVERSEAS

 

Notwithstanding
any other provision of this Plan, the Board may in respect of Participants who
are or who may be subject to taxation outside the United Kingdom on their
remuneration amend or add to the provisions of the Plan as it considers necessary
or desirable to take account of or to mitigate or to comply with the relevant
overseas taxation, securities or exchange control laws provided that the terms
of Options granted to such Participants are not overall more favourable than
the terms of Options granted to other Participants.

 

18

 

Definitions Appendix

 

1.                                     INTERPRETATION

 

The words
and expressions used in this Plan which have capital letters have the meanings
set out in the Appendix.  The headings
in the Rules are for convenience and should be ignored when construing
them.  Unless the context otherwise
requires, words in the singular include the plural and vice versa and words
importing either gender include both genders.

 

Reference in
the Rules to any statutory provisions are to those provisions as amended or
re-enacted from time to time, and include any regulations or other subordinate
legislation made under them.

 

2.                                     DEFINITIONS

 

	
  Appendix

  	
  this appendix which
  forms part of the Rules;

  
	
   

  	
   

  
	
  Appropriate Period

  	
  the relevant period
  referred to in paragraph 26(3) of Schedule 4;

  
	
   

  	
   

  
	
  Associated Company

  	
  the meaning given by
  paragraph 35 of Schedule 4;

  
	
   

  	
   

  
	
  Board

  	
  the board of
  directors for the time being of the Company or a duly authorised committee of
  the board which for the avoidance of doubt may include the Remuneration
  Committee;

  
	
   

  	
   

  
	
  Company

  	
  Cyclacel Group plc,
  registered in England and Wales under no. 5090795;

  
	
   

  	
   

  
	
  Control

  	
  in relation to a body
  corporate, the power of a person to secure:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  by means of the
  holding of shares or the possession of voting power in or in relation to that
  or any other body corporate; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  by virtue of any
  power conferred by the articles of association or other document regulating
  that or any other body corporate,

  
	
   

  	
   

  
	
   

  	
  that the affairs of
  the first-mentioned body corporate are conducted in accordance with the
  wishes of that person;

  
	
   

  	
   

  
	
  Date of Grant

  	
  with respect to an
  Option, the date on which it is granted under Rule 1.2;

  
	
   

  	
   

  
	
  Dealing Day

  	
  any day on which the
  London Stock Exchange is open for the transaction of business;

  

 

19

 

	
  Eligible Employee

  	
  any person who at the
  Date of Grant:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  is either an employee
  (other than an employee who is a director) of a Participating Company or is a
  Full-Time Director of a Participating Company;

  
	
   

  	
   

  
	
   

  	
  (b)

  	
  is not precluded from
  participating by paragraph 9 of Schedule 4 (material interest in a close
  company);

  
	
   

  	
   

  
	
   

  	
  (c)

  	
  is not within six
  months of his normal retirement date under his contract of employment;
  and  

  
	
   

  	
   

  
	
   

  	
  (d)

  	
  subject to the
  Board’s decision in individual cases, has not given or received notice of
  termination of employment with a Participating Company, whether or not such
  termination is lawful;

  
	
   

  	
   

  
	
  Employees’ Share Plan

  	
  a scheme for
  encouraging or facilitating the holding of shares or debentures in a company
  by or for the benefit of:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  the employees or
  former employees of the Company, the Company’s subsidiary or holding company
  or a subsidiary of the Company’s holding company; or

  
	
   

  	
   

  
	
   

  	
  (b)

  	
  the wives, husbands,
  widows, widowers or children or step-children under the age of 18 of such
  employees or former employees;

  
	
   

  	
   

  
	
  Exercise Price

  	
  the total amount
  payable on the exercise of an Option, whether in whole or in part, being an amount
  equal to the relevant Option Price multiplied by the number of Shares in
  respect of which the Option is exercised;

  
	
   

  	
   

  
	
  Full-Time Director

  	
  a director whose
  terms of appointment require him to devote not less than 25 hours per week
  (excluding meal breaks) to his duties under the appointment;

  
	
   

  	
   

  
	
  Grantor

  	
  in relation to an
  Option, the Person who granted it, which may be the Company or any other
  Person;

  
	
   

  	
   

  
	
  Group

  	
  the Company and all
  companies which are under the Control of the Company;

  
	
   

  	
   

  
	
  Listed

  	
  admitted to trading
  on a Recognised Stock Exchange and Listing will be construed accordingly;

  
	
   

  	
   

  
	
  London Stock Exchange

  	
  the London Stock
  Exchange plc or any successor body carrying on the business of the London
  Stock Exchange 

  

 

20

 

	
   

  	
  plc;

  
	
   

  	
   

  
	
  Market Value

  	
  in relation to a
  Share on any day:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  if the Shares are
  Listed, its middle market quotation as derived from the Daily Official List
  of the London Stock Exchange on that day; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  if the Shares are not
  Listed, its market value, determined in accordance with Part VIII of the
  Taxation of Chargeable Gains Act 1992 and agreed in advance with the Shares
  Valuation Division of the Inland Revenue;

  
	
   

  	
   

  	
   

  
	
  Model Code

  	
  the Model Code on
  directors’ dealings in securities as set out in the appendix to Chapter
  16  of the Listing Rules as amended
  from time to time;

  
	
   

  	
   

  
	
  Option

  	
  a right to acquire
  Shares under the Plan;

  
	
   

  	
   

  
	
  Option Exercise Date

  	
  the date when the
  exercise of an Option is effective because it complies with Rules 7.2 and
  7.3;

  
	
   

  	
   

  
	
  Option Price

  	
  the price determined
  by the Board under Rule 2 at which a Share subject to an Option may be
  acquired on the exercise of that Option;

  
	
   

  	
   

  
	
  Participant

  	
  any Eligible Employee
  to whom an Option has been granted, or (where the context requires) his
  personal representatives;

  
	
   

  	
   

  
	
  Participating Company

  	
  the Company and any other company in the
  Group to which the Board has resolved the Plan will extend;

  
	
   

  	
   

  
	
  Person

  	
  any individual,
  corporation, partnership, limited liability company, trust or other entity of
  whatever nature;

  
	
   

  	
   

  
	
  Plan

  	
  the Cyclacel Group
  plc Discretionary Share Option Plan (Approved and Unapproved Parts) as
  amended from time to time in accordance with the Rules;

  
	
   

  	
   

  
	
  Plan Period

  	
  the period starting
  on the date the Plan is approved by the Board and ending on the 10th
  anniversary of that date or such shorter period as the Board may specify when
  the Plan is approved;

  
	
   

  	
   

  
	
  Recognised Stock Exchange

  	
  the London Stock
  Exchange and any other stock exchange outside the United Kingdom that is for
  the time being designated as a recognised stock exchange for the purpose of
  section 841 of the Taxes Act.;

  
	
   

  	
   

  
	
  Redundancy

  	
  termination of the
  Participant’s employment by reason of redundancy within the terms of the
  Employment Rights Act 1996;

  

 

21

 

	
  Retirement

  	
  retirement at or
  after age 55 in accordance with the Participant’s contract of employment or
  otherwise with the consent of the company which employs him;

  
	
   

  	
   

  
	
  Rules

  	
  the rules of the Plan
  as amended from time to time;

  
	
   

  	
   

  
	
  Schedule 4

  	
  Schedule 4 to
  the Income Tax (Earnings and Pensions) Act 2003;

  
	
   

  	
   

  
	
  Share

  	
  a fully paid ordinary
  share in the capital of the Company which satisfies paragraphs 16 to 20 of
  Schedule 4;

  
	
   

  	
   

  
	
  SIP

  	
  an Inland Revenue
  approved Share Incentive Plan;

  
	
   

  	
   

  
	
  Taxes Act

  	
  the Income and
  Corporation Taxes Act 1988; and

  
	
   

  	
   

  
	
  Variation

  	
  in relation to the
  equity share capital of the Company a capitalisation issue, an offer or
  invitation made by way of rights, a subdivision, a consolidation, reduction
  or any other variation in respect of which the Inland Revenue will allow an
  adjustment of Options.

  

 

22Exhibit
10.14

 

 

RULES OF THE

CYCLACEL GROUP PLC

RESTRICTED SHARE
& CO-INVESTMENT PLAN

 

 

Approved by
shareholders on 1 July, 2004 and

adopted by the Board
on 30 June, 2004

 

 

 

ALLEN & OVERY

 

ALLEN & OVERY LLP

 

LONDON

 

Ref:

EP:271831.2

 

 

CONTENTS

 

	
  1.

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
  1.1

  	
  Definitions
  and interpretation

  	
   

  
	
   

  	
  1.2

  	
  How the Plan will operate

  	
   

  
	
   

  	
  1.3

  	
  Limit
  on the number of Shares which can be issued

  	
   

  
	
   

  	
  1.4

  	
  terms of awards

  	
   

  
	
   

  	
  1.5

  	
  Consents

  	
   

  
	
   

  	
  1.6

  	
  Ranking and Sale of Shares

  	
   

  
	
   

  	
  1.7

  	
  Withholding for tax

  	
   

  
	
   

  	
  1.8

  	
  Administration

  	
   

  
	
   

  	
  1.9

  	
  Amending the Plan

  	
   

  
	
   

  	
  1.10

  	
  General

  	
   

  
	
   

  	
  1.11

  	
  Data protection

  	
   

  
	
   

  	
  1.12

  	
  Governing law

  	
   

  
	
  2.

  	
  RESTRICTED
  SHARE PLAN

  	
   

  
	
   

  	
  2.1

  	
  Grant of Restricted Awards

  	
   

  
	
   

  	
  2.2

  	
  Rights in relation to Shares under Restricted Awards

  	
   

  
	
   

  	
  2.3

  	
  Vesting of Restricted Awards

  	
   

  
	
   

  	
  2.4

  	
  Lapse of Restricted Awards

  	
   

  
	
   

  	
  2.5

  	
  general
  offer, scheme of arrangement or voluntary winding up of the company

  	
   

  
	
   

  	
  2.6

  	
  Consequences
  of vesting of a Restricted Award

  	
   

  
	
   

  	
  2.7

  	
  Adjustment
  of Restricted Awards

  	
   

  
	
   

  	
  2.8

  	
  Exchange of Restricted Awards

  	
   

  
	
  3.

  	
  CO-INVESTMENT
  PLAN

  	
   

  
	
   

  	
  3.1

  	
  Invested Shares

  	
   

  
	
   

  	
  3.2

  	
  Grant of Matched Awards

  	
   

  
	
   

  	
  3.3

  	
  Vesting of Matched Awards

  	
   

  
	
   

  	
  3.4

  	
  Lapse of Matched Awards

  	
   

  
	
   

  	
  3.5

  	
  general offer, scheme of arrangement or
  voluntary winding up of the company

  	
   

  
	
   

  	
  3.6

  	
  Consequences
  of vesting of a Matched Award

  	
   

  
	
   

  	
  3.7

  	
  Adjustment of Matched Awards

  	
   

  
	
   

  	
  3.8

  	
  Exchange of Matched Awards

  	
   

  

 

 

 

RULES OF THE CYCLACEL GROUP PLC

RESTRICTED SHARE
& CO-INVESTMENT PLAN

 

PART ONE

 

1.             GENERAL
PROVISIONS

 

1.1          DEFINITIONS AND INTERPRETATION

 

1.1.1        Definitions

 

The words and
expressions used in this Plan which have capital letters have the meanings set
out in the Definitions Appendix.

 

1.1.2        Interpretation

 

The headings
in the Rules are for convenience and should be ignored when construing
them.  Unless the context otherwise
requires, words in the singular include the plural and vice versa and words
importing either gender include both genders. 
Reference in the Rules to any statutory provisions are to those
provisions as amended, extended or re-enacted from time to time, and include
any regulations or other subordinate legislation made under them.

 

1.2          HOW THE PLAN WILL OPERATE

 

1.2.1        Policies set by the
Remuneration Committee

 

The
Remuneration Committee will, from time to time, set the policies for the
Company’s operation and administration of the Plan within the terms of the
Rules, which may include the determination of:

 

1.2.1.1          the
Eligible Employees who may be granted Awards (provided that an Eligible
Employee shall not be entitled to be granted Awards if that Eligible Employee
is within a year of the age at which the Eligible Employee is bound or entitled
to retire under his contract of Employment);

 

1.2.1.2          the
maximum Market Value of Shares which may be put under an Eligible Employee’s
Award;

 

1.2.1.3          what
performance target(s) will apply to the grant, vesting or exercise of an Award
and how these will be measured; and

 

1.2.1.4          how
Awards are granted.

 

In determining the policies, the Remuneration Committee will take into
consideration the principles of good corporate governance applicable to a
company such as the Company (including, if the Remuneration Committee considers
it appropriate, the “Principles and Guidelines on Executive Remuneration”
published by the Association of British Insurers from time to time).

 

1.3              LIMIT ON THE NUMBER OF SHARES WHICH CAN BE ISSUED

 

1.3.1           The limit for all Shares
issued under the Plan

 

 

The number of
Shares which can be allocated under the Plan on any day, when aggregated with
the number of Shares allocated in the previous 10 years under the Plan and any
other Employees’ Share Scheme of the Company cannot exceed 10 per cent. of the
ordinary issued share capital of the Company from time to time.

 

1.3.2        Meaning of allocation and
exclusion from these limits

 

The reference in this Rule 1.3 to the “allocation” of Shares means, in
the case of any share option plan, the placing of unissued Shares under option
and, in the case of any other Employees’ Share Scheme, the issue and allotment
of Shares.  For the purposes of the
limit in this Rule 1.3:

 

1.3.2.1     Shares where
the right to acquire these was released, cancelled or lapsed without being
exercised will be ignored; and

 

1.3.2.2     to the
extent that the exercise or vesting of Awards is to be satisfied by the
transfer of Shares already in issue, those Awards will not be treated as
granted over unissued Shares.

 

1.3.2.3     any Shares
which are or have been allocated under the Cyclacel Group plc Senior Executive
Incentive Plan are ignored.

 

1.3.3        Adjustment to Shares to be
taken into account

 

Where Shares
issued under the Plan or any other Employees’ Share Scheme of the Company are
to be taken into account for the purposes of any of the limits in this Rule 1.3
and a Variation in the equity share capital of the Company has taken place
between the date of issue of the Shares and the date on which the limit is to
be calculated, the number of Shares to be taken into account for the purposes
of any limit will be adjusted in the manner the Remuneration Committee
considers appropriate to take account of the Variation (subject to confirmation
from an appropriate independent professional that such adjustment is fair and
reasonable).

 

1.3.4        The individual limit

 

The
Remuneration Committee will, from time to time, specify a limit which will
apply to the maximum Market Value (at the Date of Grant) of Shares which may be
put under each type of Award on an annual basis in respect of any Eligible
Employee.  No Award will be granted to
an Eligible Employee in excess of this limit without the prior approval of the
Remuneration Committee.

 

1.3.5        Purported grant of an Award
in excess of limits

 

If an Award is
purported to be granted in breach of the limit in:

 

1.3.5.1     Rule 1.3.1,
the number of Shares over which the Award has been granted will, with the
number of Shares over which all other Awards have been granted on the same Date
of Grant, be reduced pro rata to the largest lower number that complies with
Rule 1.3.1.  Where this Rule 1.3.5 operates,
when the number of Shares under the Award has been adjusted accordingly, an
Award will take effect from the Date of Grant as if it had been granted on the
adjusted terms; and

 

 

1.3.5.2               Rule
1.3.4, the number of Shares over which the Award has been granted will be
reduced to the largest lower number that would comply with Rule 1.3.4 and the
Award will take effect from the Date of Grant as if it had been granted over
the lower number of Shares at the outset.

 

1.4                               TERMS OF AWARDS

 

1.4.1        Grant of Awards

 

The Grantor
will grant each Award so that it constitutes a binding contract between the
Grantor and the Participant.  Each
Participant will be given an award certificate as evidence of grant of an
Award.

 

1.4.2        Performance targets

 

The grant,
exercise or vesting of an Award will be subject to a performance target
selected by the Remuneration Committee. 
The exercise or vesting of an Award may also be subject to any
additional terms and conditions the Remuneration Committee considers
appropriate.  The performance target and
any additional terms and conditions to which an Award is subject, will be
specified at the Date of Grant and stated in the award certificate.  The Remuneration Committee will have
discretion to decide whether and to what extent the performance target to which
an Award is subject has been met.  A
performance target may only be adjusted if an event occurs which causes the
Remuneration Committee, acting fairly and reasonably, to believe that the performance
target is no longer a fair target, in which case the Remuneration Committee can
waive or adjust the performance target accordingly.  A performance target cannot be adjusted so that it is more
difficult to satisfy.

 

1.4.3        Different performance targets
can apply to different Eligible Employees

 

Awards can be
subject to different performance targets for each Eligible Employee.

 

1.4.4        Awards personal to
Participants

 

An Award may
not, nor may any rights in respect of it, be sold, transferred, assigned,
charged or otherwise encumbered or disposed of to any Person.  A Participant’s Award(s) may be transmitted
to the Participant’s personal representatives on the Participant’s death.

 

1.4.5        Disclaimer of Award

 

A Participant
may disclaim an Award, in whole or in part, in writing to the Secretary of the
Company within thirty (30) days after the Date of Grant.  No consideration will be paid for the
disclaimer of an Award.  To the extent
that an Award is disclaimed it will be taken never to have been granted.

 

1.5          CONSENTS

 

The allotment
or transfer of Shares under the Plan will be subject to obtaining any necessary
approval or consent.  The Company will,
if appropriate, apply to the UK Listing Authority and any other Recognised
Stock Exchange for Shares issued under the Plan to be admitted to 

 

 

the official
list of those exchanges and for Shares to be admitted to trading on those
exchanges (in either case unless listing or admission to trading has already
been granted).

 

1.6                               RANKING AND SALE OF SHARES

 

Shares
allotted or transferred to a Participant under the Plan will rank equally in
all respects with Shares of the same class, except that they will not rank for
any right attaching to them by reference to a record date preceding the date of
their acquisition by the Participant. 
In the case of an Option, the Option Exercise Date will be the date of
the acquisition of the Shares.

 

1.7                               WITHHOLDING FOR TAX

 

The Grantor or
any member of the Group which is a Participant’s employer may withhold any
amount and make any arrangements it considers necessary to meet any liability
of the Participant to taxation or social security contributions in connection
with the benefits delivered under the Plan. 
These arrangements may include the sale of any Shares acquired by a
Participant under the Plan on behalf of the Participant.

 

1.8                               ADMINISTRATION

 

1.8.1                        Notices

 

Any notice or
other communication in connection with the Plan (including award certificates)
can be given by electronic mail or by personal delivery, by facsimile, by
first-class post or airmail, (in the case of a company, to its registered
office and in the case of an individual to the individual’s last known address)
or by any other means which a Participating Company and its employees use to
communicate with each other.

 

1.8.2        When notice is given

 

Any notice
under Rule 1.8.1 will be given:

 

1.8.2.1     if
delivered, at the time of delivery;

 

1.8.2.2     if posted,
at 10:00am on the seventh business day after it was put into the post; or

 

1.8.2.3     if sent by
facsimile, email or any other form of electronic transfer, at the time of
despatch.

 

In proving
service of notice it will be sufficient to prove that delivery was made or that
the envelope containing it was properly addressed, prepaid and posted or that
the facsimile message, email or other form of electronic transfer was properly
addressed and despatched, as appropriate.

 

1.8.3        Documents sent to
shareholders

 

Participants
may receive copies of any notice or document sent by the Company to the holders
of Shares.

 

1.8.4        Replacement Award
certificates

 

If any Award
certificate is worn out, defaced, destroyed or lost, it may be replaced upon
production of such evidence that the Grantor requires being provided.  Nevertheless, in the 

 

 

event of any
doubt regarding the extent or status of a Participant’s outstanding Awards
under the Plan, the Company’s records will be the correct and current statement
of this.

 

1.8.5        Shares to cover Awards

 

The Company
will ensure that sufficient Shares are available to satisfy all outstanding
Awards.

 

1.8.6        Administration of the Plan

 

The Plan will
be administered by the Remuneration Committee. The Remuneration Committee has
full authority, consistent with the Rules, to administer it, including
authority to interpret and construe any provision of the Plan and to adopt any
regulations for administering the Plan and any documents it thinks
necessary.  The Remuneration Committee’s
decision on any matter concerning the Plan will be final and binding.

 

1.8.7        Costs of introducing and
administering the Plan

 

The costs of
introducing and administering the Plan will be borne by the Company.  However, the Company may require any
Subsidiary of the Company to enter into an agreement which obliges that
Subsidiary to reimburse the Company for any costs borne by the Company,
directly or indirectly, in respect of the Subsidiary’s officers or
employees.  The Company may also enter
into a similar agreement with any Participating Company or Associated Company
which is not a Subsidiary of the Company.

 

1.9                               AMENDING THE PLAN

 

1.9.1        The Company has discretion to
amend the Rules

 

Subject to the remainder this Rule 1.9, the Company can amend the Rules
at any time.

 

1.9.2        Additional sections

 

The Company can adopt additional sections of the Rules applicable in
any jurisdiction under which Awards may be subject to additional and/or
modified terms and conditions, having regard to any securities, exchange
control or taxation laws, which may apply to the Participant, the Company, any
Participating Company or Associated Company. Any additional sections must
conform to the basic principles of the Plan and must not exceed the limits set
out in the Rules.

 

1.9.3        No abrogation of existing
rights

 

No amendment will be made under Rule 1.9.1 which would adversely and
materially affect the existing rights of a Participant unless it is made with
his written consent or by a resolution passed as if the Awards affected
constituted a separate class of share capital and the provisions of the
Articles of Association of the Company and of the Companies Act 1985 relating
to class meetings (with the necessary amendments) applied to that class.

 

 

1.9.4        Shareholder approval

 

No amendment
to the advantage of Participants (except for an amendment which could be
included in an additional section adopted under Rule 1.9.2) can be made to the
provisions in the Rules (if any) relating to:

 

1.9.4.1               who
can be a Participant;

 

1.9.4.2               the
number of Shares which can be allocated under the Plan; and

 

1.9.4.3               the
basis for determining a Participant’s entitlement to and the terms of the
Shares and any adjustment in the event of a Variation,

 

without the
approval by ordinary resolution of the Company in general meeting, except for
minor amendments to benefit the administration of the Plan, to take account of
a change in legislation or to obtain or maintain favourable tax, exchange
control or regulatory treatment for Participants or Eligible Employees or for a
member of the Group in any jurisdiction.

 

1.10        GENERAL

 

1.10.1      Termination of the Plan

 

The Plan will
terminate at the end of the Plan Period or at any earlier time the Company
decides.  Termination of the Plan will
not affect the subsisting rights of Participants.

 

1.10.2      The Plan and funding the
purchase of Shares

 

The Company
and any Subsidiary of the Company may provide money to the trustees of any trust
or any other person to enable them or him to acquire Shares to be held for the
purposes of the Plan, or may enter into any guarantee or indemnity for those
purposes, to the extent permitted by any applicable law.

 

1.10.3      Rights of Participants and
Eligible Employees

 

Participation
in the Plan is not pensionable.  Nothing
in the Plan or in any document executed under it will give any officer or
employee of any Participating Company or Associated Company any right to
participate in the Plan.  The rights and
obligations of any individual under the terms of the individual’s office or
Employment with any member of the Group will not be affected by the
individual’s participation in the Plan nor any right which the individual may
have to participate under it.  A
Participant holding an Award will not have any rights of a shareholder of the
Company with respect to that Award or the Shares subject to it.

 

1.10.4      No rights to compensation or
damages

 

A Participant
waives all and any rights to compensation or damages under the Plan in
consequence of the termination of the Participant’s office or Employment with a
member of the Group for any reason. 
Nothing in the Plan or in any document executed under it will give any
Person any right to continue in Employment or will affect the right of any
member of the Group to terminate the Employment of any Person without liability
at any time with or without cause, or will impose on any member of the Group,
the Grantor or the Remuneration Committee or their respective agents and
employees any liability in connection with the loss of a Participant’s benefits
or rights under the Plan, the failure or refusal of any person to exercise a
discretion under the Plan, and/or a Participant ceasing to be a person who has
the status or relationship of an employee or director of any member of the
Group for any reason as a result of the termination of the Participant’s
Employment.

 

 

1.10.5      The benefit of Rules 1.10.3
and 1.10.4

 

The benefit of
Rules 1.10.3 and 1.10.4 is given for the Company, for itself and as trustee and
agent of all its Subsidiaries and Associated Companies.  The Company will hold the benefit of those
Rules on trust and as agent for each of them and may assign the benefit of this
Rule 1.10.5 to any of them.

 

1.10.6      Articles of Association

 

Any Shares
acquired under the Plan will be subject to the Articles of Association of the
Company as amended from time to time.

 

1.10.7      Claims for relief under the
Taxation of Chargeable Gains Act 1992

 

If Shares are
transferred to a Participant under an Award, the Participant will, if required
by the person making the transfer, join that person in making a claim for
relief under section 165 of the Taxation of Chargeable Gains Act 1992 in
respect of the disposal made by the person making that transfer.

 

1.10.8      Severability

 

The invalidity
or non-enforceability of one or more provisions of the Plan will not affect the
validity or enforceability of the other provisions of the Plan, which will
remain in full force and effect.

 

1.10.9      Third party rights

 

Nothing in
this Plan confers any benefit, right or expectation on a person who is not an
Eligible Employee. No third party has any rights under the Contracts (Rights of
Third Parties) Act 1999 to enforce any term of this Plan.  This does not affect any other right or
remedy of a third party which may exist.

 

1.11                        DATA PROTECTION

 

By participating in the Plan, the
Participant consents to the collection, processing, transmission and storage in
any form whatsoever by the Company of any data of a professional or personal
nature which is necessary for the purpose of introducing and sustaining the
Plan.  This may include providing
information to trustees of an employee benefit trust, or to registrars, or
brokers, or third party administrators of the Plan, or to future purchasers of
the company or the business in which the Participant works.  By participating in the Plan, the
Participant also consents to the transfer of personal data to countries or
territories outside the European Economic Area.

 

1.12                        GOVERNING LAW

 

These Rules
will be governed by and construed in accordance with the law of England.  All Participants, the Company and any other
Participating Company or Associated Company will submit to the jurisdiction of
the English courts in relation to anything arising under the Plan.  The Remuneration Committee may, in its
absolute discretion, determine that another law may apply to the application of
the Plan outside the United Kingdom.

 

 

PART TWO

 

2.             RESTRICTED SHARE PLAN

 

2.1          GRANT OF RESTRICTED AWARDS

 

2.1.1        Grant of Restricted Awards

 

The
Remuneration Committee may, at its discretion, grant or it may procure the
Grantor to grant to any Eligible Employee a Restricted Award over such whole
number of Shares as it decides.  There
will be no payment for the grant of a Restricted Award.

 

2.1.2        Period for granting
Restricted Awards

 

Restricted
Awards may be granted at any time that the Remuneration Committee thinks
appropriate other than during a Close Period of the Company.

 

2.1.3        Conditions to be satisfied
before the vesting of Restricted Awards

 

The
performance target which must be met before a Restricted Award vests will be
notified to the Participant on his award certificate and will apply until
amended by, or a different performance target is specified, by the Remuneration
Committee.

 

2.2          RIGHTS IN
RELATION TO SHARES
UNDER RESTRICTED AWARDS

 

A Participant has no voting, dividend or
other rights attaching to the Shares under a Restricted Award made to the
Participant, before the Restricted Award vests.  However, the Trustee may in its discretion reinvest any dividends
declared on the Shares subject to a Restricted Award (net of any taxes and, if
applicable, associated costs) as soon as reasonably possible after that
dividend has been paid and the Shares acquired with the dividend will be held
by the Trustee as part of the Restricted Award. The Trustee will, at its
discretion, be entitled to vote or abstain from voting in respect of and accept
or reject any offer in relation to the Shares subject to a Restricted Award.

 

2.3          VESTING OF RESTRICTED AWARDS

 

2.3.1        Normal vesting

 

Unless the Remuneration Committee decides
otherwise at the Date of Grant, and subject to Rules 2.3.2, 2.3.3 and 2.4, a
Restricted Award will vest on the third anniversary of its Date of Grant to the
extent that the performance target which applies to that Restricted Award has
been met.   However, if this would be on
a day which is on a Close Period, the day on which the Restricted Award vests
will be the first Dealing Day following the end of the Close Period.

 

2.3.2        Early vesting on cessation of
Employment (good leaver)

 

If a
Participant ceases to be in Employment due to death, ill-health, injury or
disability (evidenced to the satisfaction of the Remuneration Committee),
Redundancy, Retirement, the company by which the Participant is employed
ceasing to be a member of the Group or the transfer of the undertaking or
part-undertaking in which the Participant is employed to a person or body
corporate outside the Group, then the Participant’s Restricted Award will vest
in full immediately.

 

 

2.3.3        Early vesting on cessation of
Employment (other circumstances)

 

If a Participant ceases to be in Employment
for any reason other than those specified in Rule 2.3.2 the Remuneration
Committee may preserve and vest all or part of a Participant’s Restricted Award
on any terms it thinks fit subject to the satisfaction of the performance
target measured to the date of cessation of employment.

 

2.4          LAPSE OF RESTRICTED AWARDS

 

2.4.1        Lapsing of Restricted Awards

 

A Restricted
Award will lapse and cease to be capable of (further) vesting on the earliest
of:

 

2.4.1.1     the
Participant ceasing to be in Employment in any circumstances other than those
referred to at Rule 2.3.2 and where the Remuneration Committee has not
preserved all or part of the Restricted Award under Rule 2.3.3.  If the Remuneration Committee preserves part
only of a Restricted Award under Rule 2.3.3 the part that is not preserved will
lapse immediately;

 

2.4.1.2     the
Participant being deprived of the legal or beneficial ownership of the
Restricted Award by operation of law, or doing or omitting to do anything which
causes him to be so deprived or being declared bankrupt; and

 

2.4.1.3     the
Participant attempting to breach Rule 1.4.4.

 

2.4.2        Lapse where no or only
partial vesting

 

Where, after
all applicable testing of the performance target to which it is subject, a
Restricted Award has not vested or only vested in part under the performance
target, the unvested part of the Restricted Award will lapse with immediate
effect.

 

2.4.3        Female Participants on
maternity leave

 

For the
purposes of this Rule 2.4, a female Participant on maternity leave will not
cease to be in Employment until the earlier of the date on which she notifies
her employer of her intention not to return to work or the date on which she
ceases to have statutory or contractual rights to return to work.

 

2.5          GENERAL OFFER, SCHEME OF ARRANGEMENT OR VOLUNTARY
WINDING UP OF THE COMPANY

 

2.5.1        Circumstances in which this
Rule applies

 

Subject to
Rule 2.8 this Rule applies where:

 

2.5.1.1     an
offeror (either alone or with any party acting in concert with the offeror)
obtains Control of the Company as a result of making a general offer to acquire
the whole of the issued ordinary share capital of the Company (or such part of
it which is not at the time owned by the offeror and any party acting in
concert with the offeror) which is made on a condition such that if it is
satisfied the company or person making the offer will have Control of the
Company; or

 

 

2.5.1.2     the Court
sanctions a scheme of arrangement affecting the Shares under section 425 of the
Companies Act 1985; or

 

2.5.1.3     a resolution
is passed for the voluntary winding up of the Company.

 

2.5.2        Date of vesting

 

On the
occurrence of an event described in Rule 2.5.1, a Restricted Award will subject
to Rule 2.4, vest to the extent specified by the Remuneration Committee in
accordance with Rule 2.5.3 as follows:

 

2.5.2.1          in
relation to Rule 2.5.1.1, on the date that the change of Control takes effect;

 

2.5.2.2          in
relation to Rule 2.5.1.2, on the date on which the scheme of arrangement is
sanctioned by the Court ,; and

 

2.5.2.3          in
relation to Rule 2.5.1.3, conditionally on the resolution being passed.

 

2.5.3        The discretion of the Remuneration
Committee

 

The
Remuneration Committee will confirm as soon as practicable after the relevant
event referred to in Rule 2.5.2 above the extent (if any) to which a Restricted
Award will vest, taking into account the extent to which the performance target
applicable to that Restricted Award has been met up to the date of vesting and
such other factors as the Remuneration Committee believes to be relevant in
determining the extent to which the Restricted Award should vest.

 

2.6          CONSEQUENCES OF VESTING OF A RESTRICTED AWARD

 

As soon as
practicable following the vesting of a Restricted Award, the Shares subject to
it in respect of which it has vested will, subject to Rules 1.5 and 1.7, be
transferred to the Participant.

 

2.7          ADJUSTMENT OF RESTRICTED AWARDS

 

2.7.1        Variation in equity share
capital

 

If there is a
Variation in the equity share capital of the Company the number and/or the
nominal value of the Shares over which a Restricted Award is granted will be
adjusted in the manner the Remuneration Committee determines (subject to
confirmation from an appropriate independent professional that such adjustment
is fair and reasonable).

 

2.7.2        Notifying Participant of
adjustments

 

The Grantor
will take the steps it considers necessary to notify Participants of any
adjustment under Rule 2.7 and may call in, cancel, endorse, issue or re-issue
any award certificate as a result of that adjustment.

 

 

2.8          Exchange of Restricted Awards

 

2.8.1        Circumstances in which
Restricted Awards are exchanged

 

If this Rule
applies, Restricted Awards will not vest but will be exchanged under the terms
of this Rule.  This Rule applies when:

 

2.8.1.1          a
company (the “Acquiring Company”) has obtained Control of the Company;

 

2.8.1.2          the
shareholders of the Acquiring Company immediately after it has obtained Control
of the Company are substantially the same as the shareholders of the Company
immediately before that event; and

 

2.8.1.3          the
Acquiring Company consents to the exchange of Restricted Awards under this
Rule.

 

2.8.2        The Exchange

 

When this Rule applies Participants’
Restricted Awards (“Old Awards”) will become awards (“New Awards”) in respect
of shares in the Acquiring Company. 
Each New Award will be equivalent to each Old Award before the change of
Control.  The New Awards will not be
regarded as equivalent to the Old Awards unless:

 

2.8.2.1          they
are governed by the Rules in effect immediately before the release of the Old
Awards; and

 

2.8.2.2          the
total Market Value of the Shares the subject of the Old Awards immediately before
the exchange is equal to the total Market Value immediately after the exchange
of the shares the subject of the New Awards. 
The provisions of the Plan will, for this purpose be construed as if the
New Awards were granted under the Plan at the same time as the Old Awards.

 

2.8.3        The New Awards

 

References to
Shares will, in relation to the New Awards, be taken as references to shares of
the Acquiring Company References to the Company will be taken to be references
to the Acquiring Company where appropriate. 
The New Awards will not vest or lapse if Rule 2.5 applies in respect of
the change of Control which lead to the grant of the New Awards.

 

 

PART THREE

 

3.             CO-INVESTMENT PLAN

 

3.1          INVESTED SHARES

 

3.1.1        Invitation to acquire
Invested Shares

 

The Remuneration
Committee may, at its discretion, invite any Eligible Employee to acquire
Invested Shares in order to qualify for a Matched Award.  The invitation will be in the form approved
by the Remuneration Committee and will state:

 

3.1.1.1     the maximum
number of Invested Shares that may be acquired by all Eligible Employees
invited to participate at that invitation;

 

3.1.1.2     the
performance target to apply to any Matched Award;

 

3.1.1.3     how the
Eligible Employee should pay for the Invested Shares and how the Invested
Shares will be acquired.

 

3.1.2        Period for making invitations

 

Invitations to
acquire Invested Shares may be made at any time that the Remuneration Committee
thinks appropriate but not so that the making of the invitation, or the
acquisition of Invested Shares or the grant of a Matched Award consequent on
that invitation would fall during a Close Period of the Company.

 

3.1.3        Accepting an invitation

 

To accept an
invitation to acquire Invested Shares an Eligible Employee must return the
invitation form duly completed by the date specified in it, indicating the cash
amount that he wishes to apply in the purchase of Invested Shares.

 

3.1.4        Scaling down

 

If the
Remuneration Committee receives applications for Invested Shares in excess of
the maximum number of Invested Shares available at that invitation each
application will be scaled back on the basis the Remuneration Committee
determines.

 

3.1.5        Acquisition and holding of
Invested Shares

 

As soon as
practicable after the receipt of an invitation form from an Eligible Employee
the Remuneration Committee will, subject to the provision of cleared funds from
the Participant (other than where the Participant has directed all or part of
his annual cash bonus received from the Company to be used for such purpose),
procure the acquisition on behalf of that Eligible Employee of the number of
Invested Shares that match the number of Invested Shares on a 1:1 basis.  The Trustee will hold the Invested Shares
acquired for the Participant on trust as bare trustee on behalf of the
Participant until the earlier of the vesting of the Matched Award or the expiry
of the Relevant Period of the Matched Award granted in respect of those
Invested Shares.

 

 

3.2          GRANT OF MATCHED AWARDS

 

3.2.1        Grant of Matched Awards

 

As soon as
possible after Invested Shares are acquired on behalf of an Eligible Employee
following an invitation under Rule 3.1 the Remuneration Committee will grant or
it may procure the Grantor to grant to that Eligible Employee a Matched Award
over the number of Shares that have an aggregate Market Value on the Date of
Grant of the Matched Award which is equal to the Invested Share Amount.  Subject to the remainder of the Rules of
this Part Three, the Shares under a Matched Award will not vest until the end
of the Relevant Period.

 

3.2.2        Conditions to be satisfied
before the vesting of Matched Awards

 

The
performance target which must be met before the Matched Award can vest will
notified to the Participant on his award certificate and will apply until
amended by or a different performance target is specified by, the Remuneration
Committee.

 

3.2.3        Terms of Invested Shares

 

By accepting the grant of the Matched Award the Participant agrees
that:

 

3.2.3.1          any
dividends declared on his Invested Shares during the Relevant Period belong to
the Participant but will be paid on behalf of the Participant to the Trustee,
who may reinvest them in Shares (net of any taxes and, if appropriate,
associated costs) as soon as reasonably practicable after those dividends are
paid to the Trustee and those Shares will be held by the Trustee as part of the
holding of Invested Shares; and

 

3.2.3.2          he is
entitled to instruct the Trustee on how to vote or abstain from voting in
relation to the Invested Shares and whether to accept or reject any offer in
relation to them.

 

3.2.4        Rights in relation to Matched
Awards

 

A Participant has no voting, dividend or
other rights attaching to Shares under a Matched Award made to the Participant,
before the Matched Award vests. 
However, the Trustee may in its discretion reinvest any dividends
declared on the Shares subject to a Matched Award (net of any taxes and, if
applicable, associated costs) as soon as reasonably possible after that
dividend has been paid and the Shares acquired with the dividend will be held
by the Trustee as part of the Matched Award. 
The Trustee will, at its discretion, be entitled to vote or abstain from
voting in respect of and accept or reject any offer in relation to the Shares
under a Matched Award.

 

3.3          VESTING OF MATCHED AWARDS

 

3.3.1        Normal vesting

 

Unless the
Remuneration Committee decides otherwise at the Date of Grant, and subject to
Rules 3.3.2, 3.3.3 and 3.4 and any additional terms and conditions which apply
to the Matched Award, a Matched Award will vest on the third anniversary of its
Date of Grant to the extent that the performance target which applies to that
Matched Award has been met.  However, if
this would be on a day which is on a Close Period, the day on which the Matched
Award will be the first Dealing Day following the end of the Close Period.

 

 

3.3.2        Early vesting on cessation of
Employment (good leaver)

 

If a
Participant ceases to be in Employment due to

 

•      death,

 

•      ill-health, injury or
disability (evidenced to the satisfaction of the Remuneration Committee),

 

•      Redundancy or retirement,

 

•      the company by which the
Participant is employed ceasing to be a member of the Group or,

 

•      the transfer of the
undertaking or part-undertaking in which the Participant is employed to a
person or body corporate outside the Group,

 

then the
Participant’s Matched Award will vest in full immediately.

 

3.3.3        Early vesting on cessation of
Employment (other circumstances)

 

If a Participant ceases to be in Employment
for any reason other than those specified in Rule 3.3.2, the Remuneration
Committee may preserve and vest all or part of a Participant’s Matched Award on
any terms it thinks fit subject to the satisfaction of the performance target
measured to the date of cessation of employment.

 

3.4          LAPSE OF MATCHED AWARDS

 

3.4.1        Lapsing of Matched Awards

 

A Matched
Award will lapse and cease to be capable of (further) vesting on the earliest
of:

 

3.4.1.1          the
Participant ceasing to be in Employment in any circumstances other than those
referred to in Rule 3.3.2 and where the Remuneration Committee has not
preserved all or part of the Matched Award under Rule 3.3.3.  If the Remuneration Committee preserves part
only of a Matched Award under Rule 3.3.3 the part that is not preserved will
lapse immediately;

 

3.4.1.2          the
Participant being deprived of the legal or beneficial ownership of the Matched
Award by operation of law, or doing or omitting to do anything which causes him
to be so deprived or being declared bankrupt; and

 

3.4.1.3          the
Participant attempting to breach Rule 1.4.4.

 

3.4.2        Lapse where no or only
partial vesting

 

Where, after
all applicable testing of the performance target to which it is subject, a
Matched Award has not vested or only vested in part under the performance
target, the unvested part of the Matched Award will lapse with immediate
effect.

 

3.4.3        Female Participants on
maternity leave

 

For the
purposes of this Rule 3.4, a female Participant on maternity leave will not
cease to be in Employment until the earlier of the date on which she notifies
her employer of her intention 

 

 

not to return
to work or the date on which she ceases to have statutory or contractual rights
to return to work.

 

3.5          GENERAL OFFER, SCHEME OF ARRANGEMENT OR
VOLUNTARY WINDING UP OF THE COMPANY

 

3.5.1        Circumstances in which this Rule
applies

 

Subject to
Rule 3.8, this Rule applies where:

 

3.5.1.1          an
offeror (either alone or with any party acting in concert with the offeror)
obtains Control of the Company as a result of making a general offer to acquire
the whole of the issued ordinary share capital of the Company (or such part of
it which is not at the time owned by the offeror and any party acting in
concert with the offeror) which is made on a condition such that if it is
satisfied the company or person making the offer will have Control of the
Company; or

 

3.5.1.2          the
Court sanctions a scheme of arrangement affecting the Shares under section 425
of the Companies Act 1985; or

 

3.5.1.3          a
resolution is passed for the voluntary winding up of the Company.

 

3.5.2        Date of vesting

 

On the
occurrence of an event described in Rule 3.5.1, a Matched Award will, subject
to Rule 3.4, vest to the extent specified by the Remuneration Committee in
accordance with Rule 3.5.3 as follows:

 

3.5.2.1          in
relation to Rule 3.5.1.1, on the date that the change of Control takes effect;

 

3.5.2.2          in
relation to Rule 3.5.1.2, on the date on which the scheme of arrangement is
sanctioned by the Court; and

 

3.5.2.3          in
relation to Rule 3.5.1.3, conditionally on the resolution being passed.

 

3.5.3        The discretion of the
Remuneration Committee

 

The
Remuneration Committee will confirm as soon as practicable after the extent (if
any) to which a Matched Award will vest, taking into account the extent to
which the performance target applicable to that Matched Award has been met up
to the date of vesting and such other factors as the Remuneration Committee
believes to be relevant in determining the extent to which the Matched Award
should vest.

 

3.6          CONSEQUENCES OF VESTING OF A MATCHED AWARD

 

As soon as
practicable following the vesting of a Matched Award, the Shares subject to it
in respect of which it has vested and the Invested Shares related to that
Matched Award will, subject to Rules 1.5 and 1.7, be transferred to the
Participant.

 

3.7          ADJUSTMENT OF MATCHED AWARDS

 

3.7.1        Variation in equity share
capital

 

If there is
Variation in the equity share capital of the Company the number and/or the
nominal value of the Shares over which a Matched Award is granted may be
adjusted in such manner 

 

 

as the
Remuneration Committee determines (subject to confirmation from an appropriate
independent professional that such adjustment is fair and reasonable).

 

3.7.2        Notifying Participants of
adjustments

 

The Grantor
will take the steps it considers necessary to notify Participants of any
adjustment under Rule 3.7 and may call in, cancel, enclose, issue or re-issue
any award certificate as a result of that adjustment.

 

3.8          Exchange of Matched Awards

 

3.8.1        Circumstances in which
Matched Awards are exchanged

 

If this Rule
applies, Matched Awards will not vest but will be exchanged under the terms of
this Rule.  This Rule applies when:

 

3.8.1.1          a
company (the “Acquiring Company”) has obtained Control of the Company;

 

3.8.1.2          the
shareholders of the Acquiring Company immediately after it has obtained Control
of the Company are substantially the same as the shareholders of the Company
immediately before that event, and

 

3.8.1.3          the
Acquiring Company consents to the exchange of Matched Awards under this Rule.

 

3.8.2        The Exchange

 

When this Rule
applies Matched Awards (“Old Awards”) will become awards (“New Awards”) in
respect of shares in the Acquiring Company. 
Each New Award will be equivalent to each Old Award before the change of
Control.  The New Awards will not be
regarded as equivalent to the Old Awards unless:

 

3.8.2.1          they
are governed by the Rules in effect immediately before the release of the Old
Awards; and

 

3.8.2.2          the
total Market Value of the Shares the subject of the Old Awards immediately
before the exchange is equal to the total Market Value immediately after the
exchange of the shares the subject of the New Awards.  The provisions of the Plan will, for this purpose be construed as
if the New Awards were granted under the Plan at the same time as the Old
Awards.

 

3.8.3        The New Awards

 

References to
Shares will, in relation to the New Awards, be taken as references to shares of
the Acquiring Company.  References to
the Company shall be taken to be references to the Acquiring Company, where
appropriate.  The New Awards will not
vest or lapse if Rule 3.5 applies in respect of the change of Control which
lead to the grant of the New Awards.

 

 

APPENDIX 1

 

DEFINITIONS

 

	
  Associated Company

  	
   

  	
  in relation
  to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            any
  company which has Control of the Company; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           any
  company (other than a Participating Company) which is under the Control of
  any company referred to in (i) above;

  
	
   

  	
   

  	
   

  
	
  Award

  	
   

  	
  a Restricted
  Award or a Matched Award granted under the Plan;

  
	
   

  	
   

  	
   

  
	
  Board

  	
   

  	
  the board of
  directors of the Company or a duly authorised committee of it, which may
  include the Remuneration Committee;

  
	
   

  	
   

  	
   

  
	
  Close Period

  	
   

  	
  a period
  when the members of the Board are prohibited from dealing in Shares under the
  Criminal Justice Act 1993, or the Financial Services Authority model code on
  transactions in securities, or under any other statute, regulation or similar
  code to which the Company is subject;

  
	
   

  	
   

  	
   

  
	
  The Company

  	
   

  	
  Cyclacel
  Group Plc which, for the purposes of the Rules, may act through the Board;

  
	
   

  	
   

  	
   

  
	
  Control

  	
   

  	
  means the
  power of a person to secure:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            by
  means of the holding of shares or the possession of voting power in or in
  relation to that or any other body corporate; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           by
  virtue of any powers conferred by the articles of association or other
  document regulating that or any other body corporate,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  that the
  affairs of the first mentioned body corporate are conducted in accordance
  with the wishes of that person;

  
	
   

  	
   

  	
   

  
	
  Date of Grant

  	
   

  	
  with respect
  to an Award, the date on which the Grantor grants it;

  
	
   

  	
   

  	
   

  
	
  Dealing Day

  	
   

  	
  a day on
  which the London Stock Exchange is open for the transaction of business;

  
	
   

  	
   

  	
   

  
	
  Disability

  	
   

  	
  long-term
  disability evidenced to the satisfaction of the Remuneration Committee;

  

 

 

	
  Eligible Employee

  	
   

  	
  any person
  who at a Date of Grant (or the date of invitation, in the case of Invested
  Shares) is an employee of a Participating Company;

  
	
   

  	
   

  	
   

  
	
  Employees’ Share Scheme

  	
   

  	
  a scheme for
  encouraging or facilitating the holding of shares or debentures in a company
  by or for the benefit of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            the
  employees or former employees of the Company, the Company’s Subsidiaries or
  holding company or a subsidiary of the Company’s holding company; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           the
  wives, husbands, widows, widowers or children or step-children under the age
  of 18 of such employees or former employees;

  
	
   

  	
   

  	
   

  
	
  Employment

  	
   

  	
  employment
  as an employee of a Participating Company or an Associated Company;

  
	
   

  	
   

  	
   

  
	
  Grant Period

  	
   

  	
  the period
  of 42 days starting on the day after any of the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            the
  date on which the Company releases its financial results for any period;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           the
  date of any general meeting of the Company;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)          the
  date on which any change to the legislation affecting the Plan is proposed or
  made;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)          the
  date of lifting of any restrictions on the grant of an Award; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)           the
  date on which the Board believes that exceptional circumstances exist which
  justify the grant of Awards;

  
	
   

  	
   

  	
   

  
	
  Grantor

  	
   

  	
  in relation
  to an Award, the Person who has granted that Award which may be the Company,
  an employee benefit trust or any other Person;

  
	
   

  	
   

  	
   

  
	
  Group

  	
   

  	
  the Company
  and its Subsidiaries;

  
	
   

  	
   

  	
   

  
	
  Invested Share Amount

  	
   

  	
  the gross
  amount applied in the acquisition of Invested Shares, as determined in
  accordance with Rule 3.1;

  
	
   

  	
   

  	
   

  
	
  Invested Shares

  	
   

  	
  Shares acquired
  by a Participant under Rule 3.1 in order to qualify for a Matched Award;

  
	
   

  	
   

  	
   

  
	
  Market Value

  	
   

  	
  in relation
  to a Share, its middle market quotation (as derived from the Daily Official
  List of the London Stock Exchange plc) on the Dealing Day immediately preceding
  the relevant date;

  
	
   

  	
   

  	
   

  
	
  Matched Award

  	
   

  	
  a contingent
  right to acquire Shares which has been granted or is proposed to be granted
  under Rule 3.2;

  

 

 

	
  Participant

  	
   

  	
  any Eligible
  Employee to whom an Award has been granted, or (where the context requires)
  his personal representatives;

  
	
   

  	
   

  	
   

  
	
  Person

  	
   

  	
  any
  individual, corporation, partnership, limited liability company, trust or
  other entity of whatever nature;

  
	
   

  	
   

  	
   

  
	
  Participating Company

  	
   

  	
  (i)            the
  Company; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           any
  other company which is under the Control of the Company, is a Subsidiary of
  the Company and is for the time being designated by the Board as a
  Participating Company;

  
	
   

  	
   

  	
   

  
	
  Plan

  	
   

  	
  the Cyclacel
  Group Plc Restricted Share & Co-Investment Plan constituted by the Rules;

  
	
   

  	
   

  	
   

  
	
  Plan Period

  	
   

  	
  the period
  starting on the date the Plan is approved by the Company in general meeting
  and ending on the tenth anniversary of that date;

  
	
   

  	
   

  	
   

  
	
  Recognised Stock Exchange

  	
   

  	
  a stock
  exchange that is for the time being designated as a recognised stock exchange
  for the purpose of section 841 of the Income & Corporation Taxes Act
  1988;

  
	
   

  	
   

  	
   

  
	
  Redundancy

  	
   

  	
  termination
  of Employment attributable wholly or mainly to the fact that:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            the
  employer has ceased or intends to cease:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           to
  carry on the business for the purpose of which the employee was employed; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           to
  carry on that business in the place the employee was employed; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           the
  requirements of that business:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           for
  employees to carry out work of a particular kind; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           to
  carry out that work in the place where the employee was employed,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  have ceased or diminished or are expected to cease or diminish;

  

 

 

	
  Relevant Period

  	
   

  	
  in relation
  to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            a
  Restricted Award, the period commencing on the date on which the Award is
  granted and ending on the third anniversary of that date; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           a
  Matched Award, the period commencing on the date on which the Award is
  granted and ending on the third anniversary of that date, or where the
  Participant ceases employment without the Matching Award having vested, the
  period commencing on the date on which the Award is granted and ending on the
  date of cessation of the Participant’s employment;

  
	
   

  	
   

  	
   

  
	
  Remuneration Committee

  	
   

  	
  the duly
  authorised remuneration committee of the Board;

  
	
   

  	
   

  	
   

  
	
  Restricted Award

  	
   

  	
  a contingent
  right to acquire Shares which has been granted or is proposed to be granted
  under Rule 2.1;

  
	
   

  	
   

  	
   

  
	
  Retirement

  	
   

  	
  retirement
  at or after any age at which the Participant is bound or entitled to retire
  under his contract of Employment or early retirement with the agreement of
  the company which employs him;

  
	
   

  	
   

  	
   

  
	
  Rules

  	
   

  	
  these rules
  as amended from time to time;

  
	
   

  	
   

  	
   

  
	
  Share

  	
   

  	
  a fully paid
  ordinary share in the capital of the Company;

  
	
   

  	
   

  	
   

  
	
  Subsidiary

  	
   

  	
  a company is
  a subsidiary of another company if:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)            that
  other company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)           holds
  a majority of the voting rights in it; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)           is
  a member of it and controls the composition of its board of directors; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)           is
  a member of it and controls alone, pursuant to an agreement with other
  shareholders or member; a majority of the voting rights in it; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)           the
  first mentioned company is a subsidiary of any company which is that other’s
  subsidiary;

  
	
   

  	
   

  	
   

  
	
  Trustee

  	
   

  	
  the trustee
  for the time being of an employee benefit trust established by the Company as
  an Employees’ Share Scheme;

  
	
   

  	
   

  	
   

  
	
  Variation

  	
   

  	
  in relation
  to the equity share capital of the Company a capitalisation issue, an offer
  or invitation made by way of rights, a subdivision, a consolidation or reduction.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]