Document:

Exhibit 10.1

                           CARNIVAL CORPORATION & plc
                         NON-EXECUTIVE BOARD OF DIRECTOR
                              CRUISE BENEFIT POLICY
                              As of March 14, 2005

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                                                       Issue Date: July 17, 2005
                    Carnival Corporation & plc
                 Non-Executive Board of Director   Approved by BOD July 17, 2005
                       Cruise Benefit Policy
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1.0   PURPOSE

      1.1.  The  purpose  of  this   policy  is  to  provide   guidance  to  the
            Non-executive  Board of Directors  ("NED")  concerning  their Cruise
            Benefits  from Carnival  Corporation  & plc  Operating  Companies as
            approved by the Boards of Directors.

2.0   SCOPE

      2.1.  This policy applies to all active and/or retired NED(s).

3.0   GENERAL POLICY STATEMENTS

      3.1.  This policy allows each NED up to two confirmed cruises per calendar
            year for a combined  total of 14-days (or less) in the best  outside
            cabin  available for a fare of $35 per day. The cruise is determined
            based on space available and certain blackout dates apply.

      3.2   Guests  traveling  with the NED in the same  stateroom  will each be
            charged a fare of $35 per day.

      3.3   Other family members traveling with the NED can book confirmed space
            at the special rate of 15% off lowest available rate.

      3.4   All other charges  associated with the cruise are the responsibility
            of the NED (e.g., air, government fees & taxes,  gratuities,  ground
            transfers, tours, etc.).

      3.5   A "Cruise  Experience  Report"  is  required  for each NED who takes
            advantage of the cruise  benefit (see point 4.4 below for details on
            the requirements of the "Cruise Experience Report").

4.0   ADMINISTRATIVE REQUIREMENTS

      4.1.  Cruise  Travel  Request  Forms
            The NED should contact the Carnival  Corporate  Legal  Department to
            obtain and complete the "Cruise Travel Request Form" specific to the

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            brand the NED is  requesting to sail.  Any  questions  regarding the
            travel  form  should be directed  to the  Carnival  Corporate  Legal
            Department.

      4.2.  Review & Approval

            The  Corporate  Legal  Department  will  process  the Cruise  Travel
            Request Form and advise the NED regarding cabin availability for the
            dates requested.

      4.3.  Cruise Documentation Requirements

            The NED and their guest will be required to adhere to each operating
            company's cruise documentation requirements.  Failure to comply with
            the operating company's documentation  requirements at check-in time
            could prevent the NED and/or their guest from sailing.

      4.4.  "Cruise Experience Report"

            Prior to the  departure  of a cruise,  the NED is required to obtain
            from the Carnival  Corporate Legal Department the "Cruise Experience
            Report" requirements (e.g.,  objectives/scope of report) specific to
            the brand on which the cruise  will be taken.  The report  should be
            completed  and  submitted  to Carnival  Corporate  Legal  department
            within 45 days after the cruise.Exhibit 10.2
                              AMENDED AND RESTATED
                      CARNIVAL PLC 2005 EMPLOYEE SHARE PLAN

  (As adopted by the board of directors of Carnival plc on 18 January 2005 and
 approved by shareholders of Carnival plc in general meeting on 13 April 2005;
amended by the Compensation Committee of the board of directors on 5 July 2005)

1. PURPOSE

The purpose of the Plan is to provide a means  through  which each member of the
plc Group may attract  able persons to enter and remain in the employ of members
of the  plc  Group  and to  provide  a means  whereby  employees  and  executive
directors  of each  member of the plc  Group  can  acquire  and  maintain  Share
ownership,  or be paid incentive compensation measured by reference to the value
of Shares,  thereby strengthening their commitment to the welfare of the members
of the plc Group and promoting an identity of interest between  shareholders and
these persons.  It is intended that the Plan will be an employees'  share scheme
within the meaning of section 743 of the Companies Act 1985.

The  Plan  provides  for the  granting  of  Options  (Incentive  Share  Options,
Nonqualified Share Options, Unapproved Options and Approved Options), Restricted
Shares and Restricted Share Units to eligible employees. Inland Revenue Approved
Options  may be granted  under an  Appendix  to the Plan  approved by the Inland
Revenue.

2. DEFINITIONS

The following definitions shall be applicable throughout the Plan;

ADRs means American  Depositary  Receipts  evidencing American Depositary Shares
deposited by the Company with a depositary pursuant to a depositary agreement;

Affiliate means:

(a) any entity that  directly or indirectly  is  Controlled  by,  Controls or is
under common Control with the Company or Carnival Corporation; and

(b) to the extent provided by the Committee,  any entity in which the Company or
Carnival Corporation has a significant equity interest.

Approved  Option means an Option granted under an Inland Revenue  approved share
plan contained in the Appendix to this Plan;

Award  means,   individually  or  collectively,   any  Incentive  Share  Option,
Nonqualified Share Option,  Unapproved Option, Approved Option, Restricted Share
Award or Restricted Share Unit Award;

Award Agreement means a Share Option  Agreement,  Restricted  Share Agreement or
Restricted Share Unit Agreement;

Board means the board of directors of the Company;

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Capital  Reorganisation  means any variation in the share capital or reserves of
the Company  (including,  without  limitation,  by way of capitalisation  issue,
rights issue, sub-division, consolidation, or reduction);

Carnival Corporation means Carnival  Corporation,  a corporation organised under
the laws of the Republic of Panama;

Cause  means  a  member  of  the  plc  Group  having  a  right  to  terminate  a
Participant's  employment  summarily  either in accordance with the terms of the
Participant's contract of employment with that member or otherwise at common law
including without limitation:

(a)   the  determination  by the Committee  that the  Participant  has ceased to
      perform his duties to a member of the plc Group (other than as a result of
      his incapacity due to physical or mental illness or injury), which failure
      amounts  to an  intentional  and  extended  neglect  of his  duties to his
      employer;

(b)   the Committee's determination that the Participant has engaged or is about
      to engage in wilful  misconduct or conduct which causes or may  reasonably
      be expected to cause substantial damage to a member of the plc Group;

(c)   the Participant having been convicted of, or pleaded guilty to, an offence
      involving as a material element fraud or dishonesty; or

(d)   the failure of the  Participant to follow the lawful  instructions  of the
      Board or any of his superiors;

      Change of Control means the occurrence of any of the following:

(a)   a person  (either alone or together with any person acting in concert with
      him)  obtaining  Control of the Company as a result of a general  offer or
      otherwise  for the whole of the share  capital of the Company  (other than
      those  shares which are already  owned by him and/or any person  acting in
      concert with him);

(b)   a person  (either alone or together with any person acting in concert with
      him) acquiring 50% or more (on a fully diluted basis) of either:

       (i)  the then  outstanding  Shares taking into account as outstanding for
            this  purpose  such  Shares as are  issuable  upon the  exercise  of
            options or warrants,  the conversion of  convertible  shares or debt
            and the  exercise of any similar  right to acquire  such Shares (the
            "Outstanding Shares"); or

       (ii) the combined voting power of the then  outstanding  voting shares or
            securities of the Company entitled to vote generally in the election
            of directors (the "Outstanding Company Voting Securities");

            provided,  however,  that for purposes of this Plan,  the  following
            acquisitions shall not constitute a Change of Control:

            (A)   any acquisition by the Company or any Affiliate,

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            (B)   any  acquisition  by any employee  benefit  plan  sponsored or
                  maintained by the Company or any Affiliate,

            (C)   any  acquisition  by Marilyn B. Arison,  Micky  Arison,  Shari
                  Arison, Michael Arison or their spouses or lineal descendents,
                  any  trust   established   for  the  benefit  of  any  of  the
                  aforementioned  Arison family members,  or any person directly
                  or  indirectly  controlling,  controlled  by or  under  common
                  control with any of the  aforementioned  Arison family members
                  or  any  trust  established  for  the  benefit  of  any of the
                  aforementioned  Arison family members or any charitable  trust
                  or  non-profit  entity  established  by any  person  or entity
                  described in this sub-paragraph (C); or

            (D)   any  acquisition  by any person which falls within the proviso
                  to paragraph (e) below or  sub-paragraphs  (i), (ii) and (iii)
                  of paragraph (h) below;

      and for the purposes of this Plan an event falling  within  sub-paragraphs
      (a) or (b) of this definition shall be referred to as an Acquisition;

(c)   individuals  who,  on the date this Plan is approved  by  shareholders  in
      general  meeting,  constitute  the board of  directors of the Company (the
      "Incumbent  Directors")  ceasing for any reason to  constitute  at least a
      majority  of the board,  provided  that any person who  becomes a director
      subsequently and whose election or nomination for election was approved by
      a vote of at least two-thirds of the Incumbent Directors then on the board
      (either by a specific  vote of the  directors  or by approval of the proxy
      statement  or annual  report  and  accounts  of the  Company in which such
      person  is  nominated  for  election  by  shareholders,   without  written
      objection to such nomination) shall be an Incumbent Director;  and for the
      purposes of this Plan an event falling within this sub-paragraph (c) shall
      be referred to as a Board Change;

(d)   a person  becoming  bound or entitled to give notice under sections 428 to
      430F  of  the  Companies  Act  1985  to  acquire   Shares  (a  "Compulsory
      Acquisition Procedure");

(e)   a Court  directing  that a meeting of the  holders  of Shares be  convened
      pursuant  to section  425 of the  Companies  Act 1985 for the  purposes of
      considering  a scheme of  arrangement  of the Company or its  amalgamation
      with any other  company or companies and the scheme of  arrangement  being
      approved by the  shareholders'  meeting or sanctioned by the Court (as the
      Committee may determine)  (the "Relevant  Condition")  provided,  however,
      that the Committee may determine that the scheme of arrangement  shall not
      constitute  a Change of Control if the purpose and effect of the scheme of
      arrangement  is to create a new  holding  company  for the  Company,  such
      company  having   substantially   the  same  shareholders  with  the  same
      proportionate  shareholdings  as the Company had immediately  prior to the
      scheme of arrangement,  and for the purposes of this Plan an event falling
      within  this  sub-  paragraph  (e)  shall be  referred  to as a Scheme  of
      Arrangement;

(f)   notice being duly given of a resolution  for the  voluntary  winding-up of
      the Company (a "Voluntary Winding Up");

(g)   the sale, transfer or other disposition of all or substantially all of the
      business or assets of the Company (a "Sale"); or

<PAGE>

(h)   the   completion   of   a   reorganization,    recapitalization,   merger,
      consolidation,  share  exchange or similar form of  corporate  transaction
      involving  the  Company  that  requires  the  approval  of  the  Company's
      shareholders,  whether for such  transaction or the issuance of securities
      in  the  transaction  (a  "Business   Combination"),   unless  immediately
      following such Business Combination:

      (i)   more than 50% of the total voting power of:

            (A)   the company or body  corporate  resulting  from such  Business
                  Combination (the "Surviving Company"); or

            (B)   if applicable,  the ultimate  parent company or body corporate
                  that  directly  or  indirectly  has  beneficial  ownership  of
                  sufficient voting  securities  eligible to elect a majority of
                  the directors of the Surviving Company (the "Parent Company"),
                  is represented by the  Outstanding  Company Voting  Securities
                  that  were  outstanding  immediately  prior  to such  Business
                  Combination (or, if applicable,  is represented by shares into
                  which the Outstanding Company Voting Securities were converted
                  pursuant to such Business Combination),  and such voting power
                  among  the  holders  thereof  is  in  substantially  the  same
                  proportion  as  the  voting  power  of  the  Company's  Voting
                  Securities among the holders thereof  immediately prior to the
                  Business Combination,

      (ii)  no  person,  is  or  becomes  the  beneficial  owner,   directly  or
            indirectly,  of 50%  or  more  of  the  total  voting  power  of the
            outstanding  voting  securities  eligible to elect  directors of the
            Parent  Company (or, if there is no Parent  Company,  the  Surviving
            Company); and

      (iii) at least a majority of the members of the board of  directors of the
            Parent  Company (or, if there is no Parent  Company,  the  Surviving
            Company)  following the completion of the Business  Combination were
            members of the board of  directors of the Company at the time of the
            board's approval of the execution of the initial agreement providing
            for such Business Combination

      and for the  purposes  of this  Plan a  transaction  falling  within  this
      sub-paragraph (h) shall be referred to as a Corporate Transaction;

Code  means  the  United  States  Internal  Revenue  Code of 1986,  as  amended.
Reference  in the Plan to any section of the Code shall be deemed to include any
amendments  or successor  provisions to such section and any  regulations  under
such section;

Combined Group means the plc Group and Carnival  Corporation  and any subsidiary
of Carnival  Corporation as that term is defined in section 736 of the Companies
Act 1985;

Committee means the Compensation Committee of the board of directors. Unless the
Board determines  otherwise,  each member of the Committee shall, at the time he
takes any  action  with  respect  to an Award  under the  Plan,  be an  Eligible
Director.  However,  the mere fact that a Committee member shall fail to qualify
as an  Eligible  Director  shall not  invalidate  any Award  which is  otherwise
validly granted under the Plan;

Company means Carnival plc, a company incorporated under the laws of England and
Wales;

<PAGE>

Control has the meaning given to it by section 840 of ICTA;

Date of Grant means the date on which the granting of an Award is authorized, or
such other date as may be  specified  in such  authorization  or, if there is no
such date, the date indicated on the applicable Award Agreement;

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

Discretionary  Share Plan means an Employee Share Plan in which participation is
solely  at the  discretion  of the  Board  including  the P&O  Princess  Cruises
Deferred Bonus & Co-Investment Matching Plan;

Effective  Date means the date on which the Plan is  approved  by the  Company's
shareholders in general meeting;

Eligible  Director means a person who is a  "non-employee  director"  within the
meaning of Rule 16b-3 under the  Exchange  Act, or a person  meeting any similar
requirement under any successor rule or regulation;

Employee means any employee (including an executive director) of a member of the
plc Group whose terms of service require him to devote  substantially  the whole
of his working time to the affairs of a member of the Combined Group;

Employee  Share  Plan  means any share  option  plan or other  employees'  share
incentive  plan  established by the Company  including the P&O Princess  Cruises
Deferred Bonus & Co-Investment Matching Plan;

Exchange Act means the U.S. Securities Exchange Act of 1934, as amended;

Fair Market Value means, on a given date:

(a)   for so long as the Shares are traded on the  London  Stock  Exchange,  the
      closing  middle  market  quotation  for a Share as derived  from the Daily
      Official List of the London Stock Exchange for that day; or

(b)   subject to (a) above,  its market value determined in accordance with Part
      VIII of the Taxation of  Chargeable  Gains Act 1992 and in the case of any
      Award under which Shares are to be issued, the nominal value of a Share;

ICTA means the United Kingdom Income and Corporation Taxes Act 1988;

ITEPA means the United Kingdom Income Tax (Earnings and Pensions) Act 2003;

Incentive  Share  Option  means  an  Option  granted  by the  Committee  to a US
Participant  under the Plan which is designated by the Committee as an incentive
stock option as described in Section 422 of the Code and which  otherwise  meets
the requirements set forth herein;

the London Stock  Exchange means London Stock Exchange plc or any successor body
thereto;

<PAGE>

Nonqualified  Share  Option  means an Option  granted by the  Committee  to a US
Participant  under the Plan,  which is not  designated  by the  Committee  as an
Incentive Share Option;

Option means an Award granted  under  Section 7 being either an Incentive  Share
Option, a Nonqualified Share Option, an Unapproved Option or an Approved Option;

Option Holder means any  individual  who holds a subsisting  Option  (including,
where the context  permits,  the legal  personal  representatives  of a deceased
Option Holder);

Option  Period  means  such  period  commencing  on the  Date of  Grant  and not
exceeding  ten years,  as the  Committee  may be determine  under Section 7.6 in
respect of an Option or portions of an Option;

Option Price means the exercise price of an Option as described in Section 7.3;

Participant  means  an  Employee  who has  been  selected  by the  Committee  to
participate in the Plan and to receive an Award;

Performance  Goals means the performance  objectives which may be established by
the Committee for the purpose of determining whether, and to what extent, Awards
will vest or be subject to a Restricted Period.

Plan means this Carnival plc 2005  Employee  Share Plan, as amended from time to
time;

the plc Group  means the Company  and the  Subsidiaries  and member of the Group
shall be construed accordingly;

Registered Holder means any person or persons nominated by the Committee to hold
Restricted Shares on behalf of a Participant;

<PAGE>

Relevant Period means in the case of:

(a)   an Acquisition,  the period of three months from the date of completion of
      the  acquisitions  and if the  acquisitions  occur as a result of an offer
      which is made subject to  conditions,  the period of three months from the
      date when the offer becomes or is declared unconditional in all respects;

(b)   a Board Change, the period of three months from the date that the relevant
      majority no longer subsists;

(c)   a Compulsory Acquisition Procedure, the period of 30 days from the date on
      which a notice of compulsory acquisition is first issued;

(d)   a Scheme  of  Arrangement,  the  period  between  the date of the  Court's
      direction  and twelve noon on the day  immediately  preceding the date for
      which the  shareholders'  meeting is convened or such longer  period up to
      the date on which the Court  sanctions  the Scheme of  Arrangement  as the
      Committee may determine;

(e)   a  Voluntary  Winding  Up,  the  period  of two  months  from the date the
      resolution;

(f)   a Sale,  the period of three  months  from the date of  completion  of the
      relevant transaction; and

(g)   a  Corporate  Transaction,  the  period of three  months  from the date of
      completion of the relevant transaction;

Restricted Period means, with respect to any Restricted Shares or any Restricted
Share Unit,  the period of time  determined by the  Committee  during which such
Award  is  subject  to  the   restrictions   set  forth  in  Section  9  (unless
foreshortened pursuant to the rules of this Plan);

Restricted Shares means Shares issued or transferred to a Participant subject to
forfeiture and the other restrictions set forth in Section 9;

Restricted Share Award means an Award of Restricted Shares granted under Section
9;

Restricted  Share Unit means a hypothetical  investment  equivalent to one Share
granted in connection with an Award made under Section 9;

Restricted  Share Unit Award means an Award of  Restricted  Share Units  granted
under Section 9;

Retirement  means the cessation of a  Participant's  employment with a member of
the plc Group on or after the earlier of:

(a)   age 65 with at least five years of service with a member of the plc Group;
      or

(b)   age 55 with at least 15 years of service with a member of the plc Group;

Retirement  Age means age 55 for the purposes of paragraph  35A of Schedule 4 to
ITEPA;

Securities Act means the Securities Act of 1933, as amended;

<PAGE>

Shares means fully paid and  irredeemable  ordinary shares in the capital of the
Company   or  shares   representing   those   shares   following   any   Capital
Reorganisation;

Share Option Agreement means any agreement between the Company and a Participant
who has been granted an Option  pursuant to Section 7 which  evidences the grant
of an  Option  and in the case of an  Option  granted  by way of a share  option
certificate, shall mean the share option certificate;

Subsidiary means any subsidiary of the Company, as defined in Section 736 of the
Companies Act 1985, of which the Company has Control;

UKLA means the United Kingdom Listing Authority;

Unapproved  Option  means an Option  granted  to a  Participant  other than a US
Participant  under  the Plan  which is not  designated  by the  Committee  as an
Approved Option; and

Vested Unit shall have the meaning assigned to it in Section 9.12.

3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL

3.1 The Plan is effective as of the Effective Date, and the Plan was approved by
shareholders  at a general meeting held on 13 April 2005 in a manner intended to
comply with the shareholder  approval  requirements of Sections 422(b)(1) of the
Code and the New York Stock Exchange.

3.2 The expiration date of the Plan, on and after which no Awards may be granted
hereunder,  shall be the tenth  anniversary  of the  Effective  Date;  provided,
however,  that the administration of the Plan shall continue in effect until all
matters relating to Awards previously granted have been settled.

4. ADMINISTRATION

4.1 The Committee shall administer the Plan.

4.2 Subject to the  provisions  of the Plan and  applicable  law, the  Committee
shall have the power,  in addition to other  express  powers and  authorizations
conferred on the Committee by the Plan, to:

(a)   designate Participants;

(b)   determine the type or types of Awards to be granted to a Participant;

(c)   determine  the number of Shares to be covered by, or with respect to which
      payments,  rights,  or other  matters are to be  calculated  in connection
      with, Awards;

(d)   determine the terms and conditions of any Awards;

(e)   determine whether, to what extent, and under what circumstances Awards may
      be settled or exercised in cash, Shares, other securities, other Awards or
      other  property,  or  cancelled,  forfeited or suspended and the method or
      methods by which Awards may be settled, exercised, cancelled, forfeited or
      suspended;

(f)   determine  whether,  to what  extent,  and under  what  circumstances  the
      delivery of cash, Shares,  other securities,  other Awards, other property
      and other  amounts  payable  with  respect to an

<PAGE>

      Award shall be deferred  either  automatically  or at the  election of the
      holder thereof or of the Committee;

(g)   interpret,  administer,  reconcile any  inconsistency,  correct any defect
      and/or  supply any  omission in the Plan and any  instrument  or agreement
      relating to, or Award granted under, the Plan;

(h)   establish, amend, suspend, or waive such rules and regulations and appoint
      such agents as it shall deem appropriate for the proper  administration of
      the Plan; and

(i)   make any other determination and take any other action specified under the
      Plan  or  that  the  Committee   deems  necessary  or  desirable  for  the
      administration of the Plan.

4.3  Unless  otherwise   expressly  provided  in  the  Plan,  all  designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award or any  documents  evidencing  Awards shall be within the sole
discretion  of the  Committee,  may be made at any  time  and  shall  be  final,
conclusive and binding upon all parties,  including,  without  limitation,  each
member of the Combined Group, any Participant,  any holder or beneficiary of any
Award, and any shareholder.

5. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN

5.1 The Committee  may, from time to time,  grant Awards of Options,  Restricted
Shares or Restricted Share Units to one or more Employees provided that no Award
to subscribe for Shares shall be granted to the extent that the aggregate number
of Shares  that  could be issued  pursuant  to that  Award and any other  Awards
granted at the same time when added to the number of Shares that:

(a)   could be issued on the exercise of any other  subsisting  share options or
      awards  granted during the preceding ten years under the Plan or any other
      Employee Share Plan; and

(b)   have been issued on the  exercise of any share  options or awards  granted
      during the preceding ten years under the Plan or any other  Employee Share
      Plan; and

(c)   have been issued during the  preceding ten years under any Employee  Share
      Plan  or any  profit  sharing  or  other  employee  share  incentive  plan
      established by the Company;

would exceed 10% of the ordinary share capital of the Company for the time being
in issue.

5.2 Shares  delivered by or on behalf of the Company in settlement of Awards may
be authorized and unissued  Shares or Shares held in the treasury of the Company
or purchased on the open market or by private purchase.

5.3 Any member of the plc Group 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 enter  into any  guarantee  or  indemnity  for those
purposes, to the extent not prohibited by section 151 of the Companies Act 1985.

<PAGE>

6. ELIGIBILITY

Participation   shall  be  limited  to  Employees  who  have  received   written
notification  from the Committee,  or from a person designated by the Committee,
that they have been selected to participate in the Plan.

7. TERMS OF OPTIONS

7.1  The  Committee  is  authorized  to  grant  one or  more  Approved  Options,
Unapproved Options, Incentive Share Options or Nonqualified Share Options to any
Employee. Each Option so granted shall be subject to the conditions set forth in
this Section 7, or to such other conditions  consistent with this Plan as may be
reflected in the applicable Share Option Agreement.

Option Price

7.2 The Option Price per Share for each Option shall be set by the  Committee at
the Date of Grant but shall not be less than the Fair Market Value of a Share on
the Date of Grant and, if the Shares are to be issued,  the  nominal  value of a
Share.

Manner of Exercise and Form of Payment

7.3 No Shares  shall be  delivered  pursuant to any  exercise of an Option until
payment in full of the Option  Price  therefor is received by the Company or the
Participant has made  arrangements  acceptable to the Company for the payment of
the Option  Price.  Options  which have become  exercisable  may be exercised by
delivery of written notice of exercise to the Company accompanied by payment of,
or an undertaking to pay, the aggregate  Option Price. The Option Price shall be
payable in cash.

Conditions of Grant

7.4 An Option may be granted subject to such conditions for payment of taxation,
employees'  National Insurance  contributions and employer's  National Insurance
contributions  liability  as the  Committee  may  determine  (including  without
limitation the right to sell on an Option Holder's behalf  sufficient  Shares to
satisfy any taxation or National  Insurance  contributions) and if any condition
is imposed  relating to the assumption,  payment or  reimbursement by the Option
Holder of employer's National Insurance contributions liability, such conditions
shall comply with any  applicable  legislation  or  regulations  and the Company
shall be entitled to waive in whole or in part the Option Holder's obligation in
respect of such liability.

Vesting, Option Period and Expiration

7.5 Subject to Sections 8 and 13,  Options shall vest and become  exercisable in
such manner and on such date or dates as the Committee may determine at the Date
of  Grant  and set out in a  vesting  schedule  (a  "Vesting  Schedule")  in the
applicable Share Option Agreement or share option certificate. The Committee may
determine that an Option may vest in full on one date only or may vest partially
as to  different  portions  on  different  dates so that an Option  may have one
Option  Period or a number of Option  Periods  applying to  determine  when each
portion  shall  vest.  Subject to  Sections 8 and 13 Options  shall lapse on the
earlier of:

(a)   the expiry of the Option Period; and

<PAGE>

(b)   the Option  Holder being  declared  bankrupt or entering  into any general
      composition with or for the benefit of his creditors including a voluntary
      arrangement under the Insolvency Act 1986;

provided,  however, that notwithstanding any vesting dates set by the Committee,
the Committee may, in its sole discretion,  accelerate the exercisability of any
Option,  which  acceleration  shall not affect the terms and  conditions of such
Option provided for in this Plan other than with respect to  exercisability.  If
an Option is exercisable in instalments,  such  instalments or portions  thereof
which vest and become  exercisable  shall  remain  exercisable  until the Option
lapses but subject to any earlier lapse provisions under Sections 8 and 13.

Performance Goals

7.6 The  Committee  shall  determine  prior  to the Date of  Grant  whether  any
Performance  Goals shall apply to the vesting of an Option and if so these shall
be set out in the applicable Share Option Agreement or share option certificate.

Other Terms and Conditions

7.7 Each Option  granted  under the Plan shall be  evidenced  by a Share  Option
Agreement or a share option  certificate.  Immediately  prior to the granting of
any Options,  the Committee may, in its absolute  discretion,  enter into a deed
poll recording its intention to be bound by the share option  certificates to be
issued to the Option  Holder in respect of such Option.  Except as  specifically
provided  otherwise in a Share Option  Agreement or a share option  certificate,
each Option  granted under the Plan shall be subject to the following  terms and
conditions:

(a)   each Option or portion  thereof that is  exercisable  shall be exercisable
      for the full amount or for any part thereof;

(b)   each Share acquired  through the exercise of an Option shall be treated as
      fully paid up at the time of issue or transfer. Each Option shall cease to
      be exercisable,  as to any Share, when the Participant  acquires the Share
      or when the Option lapses;

(c)   subject to Sections 11.9 and 11.10,  Options shall not be  transferable by
      the  Participant  except by will or the laws of  inheritance  and shall be
      exercisable during the Participant's lifetime only by him;

(d)   each  Option  shall  vest and become  exercisable  by the  Participant  in
      accordance with the Vesting Schedule  established by the Committee and set
      forth in the Share Option Agreement;

(e)   at the time of any exercise of an Option, a Participant must take whatever
      action is reasonably  required by the Committee to ensure  compliance with
      applicable securities laws; and

(f)   each  Participant  awarded an Incentive  Share Option under the Plan shall
      notify  the  Company  in  writing  immediately  after  the date he makes a
      disqualifying  disposition of any Shares acquired pursuant to the exercise
      of  such  Incentive  Share  Option.  A  disqualifying  disposition  is any
      disposition  (including  any sale) of such Shares  before the later of (i)
      two years after the Date of Grant of the  Incentive  Share  Option or (ii)
      one year after the date the Participant  acquired the Shares by exercising
      the Incentive Share Option.

<PAGE>

Incentive Share Option Grants to 10% Shareholders

7.8 Notwithstanding  anything to the contrary in this Section 7, if an Incentive
Share Option is granted to a Participant who owns shares  representing more than
ten percent of the voting  power of all classes of shares of the Company or of a
Subsidiary  or a parent of the Company,  the Option Period shall not exceed five
years from the Date of Grant of such  Option and the  Option  Price  shall be at
least 110 percent of the Fair Market  Value (on the Date of Grant) of the Shares
subject to the Option.

Time of Grant

7.9 The  Committee  shall  not  grant  Options  at any  time  when it  would  be
prohibited  from  doing so by the  Model  Code for  Securities  Transactions  by
Directors of Listed Companies (or the Company's dealing code).

$100,000 Per Year Limitation for Incentive Share Options

7.10 To the extent the aggregate Fair Market Value (determined as of the Date of
Grant) of Shares for which Incentive Share Options are exercisable for the first
time by any  Participant  during  any  calendar  year  (under  all  plans of the
Company) exceeds $100,000,  such excess Incentive Share Options shall be treated
as Nonqualified Share Options.

8. EXERCISE AND LAPSE OF OPTIONS - CESSATION OF EMPLOYMENT

8.1  Save  as  otherwise   provided  in  these  rules,  an  Option  shall  lapse
automatically  on the Option  Holder  ceasing to be an employee of the plc Group
(whether lawfully or unlawfully).

8.2 Where an Option  Holder ceases to be an employee of the plc Group before the
end of the Option  Period by reason of his  employment  with a member of the plc
Group  being  terminated  by a member of the plc Group  without  Cause or by the
Participant for any reason other than Retirement,  the Option shall lapse on the
earlier of:

(a)   the last day of the Option Period; and

(b)   the date that is three months after the date of such termination;

provided,  however,  that any Participant  whose employment with a member of the
plc Group is  terminated  and who is  subsequently  re-hired or  re-engaged by a
member of the plc Group prior to the lapse of the Option shall not be treated as
if his employment had terminated.

In the event of a  termination  described  in this Section 8.2, the Option shall
remain  exercisable  by the  Participant  until its lapse only to the extent the
Option was exercisable at the time of such termination.

8.3 Where an Option  Holder ceases to be an employee of the plc Group before the
end of the Option Period by reason of his death or his disability (as determined
by the Committee) while still in the employment of a member of the plc Group, or
he dies  following a cessation of employment  described in this Section 8.2, the
Option shall lapse on the earlier of:

(a)   the last day of the Option Period; and

(b)   the date that is one year  after the date of such  death or  cessation  on
      account of disability of the Participant, as applicable.

<PAGE>

In such event, the Option shall remain  exercisable by the Participant or his or
her personal  representatives  or  beneficiaries  determined in accordance  with
Section  11, as  applicable,  until its lapse  only to the extent the Option was
exercisable by the Participant at the time of such event.

8.4 Where the Participant  ceases to be an employee of a member of the plc Group
by reason of Retirement prior to the end of the Option Period, the Option shall:

(a)   lapse at the end of the Option Period; and

(b)   continue  vesting in accordance with the Vesting Schedule set forth in the
      share  option  certificate  or Share  Option  Agreement  (as  applicable),
      without regard to any  requirement  that the  Participant  remain employed
      with a member of the plc Group as a condition to vesting.

8.5 For the avoidance of doubt, an Option  exercisable under Sections 8.2 to 8.4
may lapse at an earlier  date by virtue of  Section 13 and may not be  exercised
after the expiry of the Option Period.

8.6 For the purposes of Sections 8.1 to 8.5 a female  Option Holder shall not be
treated as ceasing to be an employee of a member of the plc Group if absent from
work wholly or partly because of pregnancy or confinement until she ceases to be
entitled to exercise any statutory or contractual right to return to work.

8.7  Where  any  exercise  of an  Option  under  Sections  8.2 to 8.5  would  be
prohibited by law or the Model Code for Securities  Transactions by Directors of
Listed  Companies (or the Company's  dealing  rules) the period during which the
Option Holder may exercise his Options shall be extended by an additional period
equal to the  length of the period of  prohibition  but not beyond the expiry of
the Option Period.

9. RESTRICTED SHARE AWARDS AND RESTRICTED SHARE UNIT AWARDS

Awards of Restricted Shares and Restricted Share Unit Awards

9.1 The Committee shall have the authority:

(a)   to grant  Restricted  Share  Awards and  Restricted  Share Unit  Awards to
      Employees;

(b)   to issue or transfer  Restricted Shares to Registered Holders on behalf of
      Participants; and

(c)   to  establish  terms,  conditions  and  restrictions  applicable  to  such
      Restricted  Shares and  Restricted  Share Units,  including the Restricted
      Period,  which may differ with  respect to each  Participant,  the time or
      times at which  Restricted  Shares or Restricted  Share Units shall become
      vested  and the  number of Shares or units to be covered by each grant and
      whether the Award shall be subject to Performance Goals.

No Restricted  Share Awards or Restricted  Share Unit Awards shall be granted at
any time when the  Committee is  prohibited  from doing so by the Model Code for
Securities  Transactions  by Directors  of Listed  Companies  (or the  Company's
dealing rules).

9.2 The Committee may require a Participant  granted a Restricted Share Award to
execute and deliver to the Company a Restricted  Share Agreement with respect to
the  Restricted  Shares  setting  forth  the  restrictions  applicable  to  such
Restricted Shares. The Committee shall determine whether:

<PAGE>

(a)   the Restricted Shares shall be held in escrow rather than delivered to the
      Participant pending the release of the applicable  restrictions,  in which
      case the Committee may require the Participant to additionally execute and
      deliver to the Company an escrow agreement satisfactory to the Company; or

(b)   the  Restricted  Shares shall be  registered  in the name of the nominated
      Registered Holder during the Restricted Period; or

(c)   other  arrangements shall apply to the holding of Restricted Shares during
      the Restricted  Period,  the terms of such  arrangements  being consistent
      with the terms of this Plan.

9.3 If an  escrow  arrangement  is  used,  the  Committee  shall  cause  a share
certificate registered in the name of the Participant to be issued and, if it so
determines,  deposited  together  with the share  powers  with any escrow  agent
designated by the  Committee.  The Committee may cause the escrow agent to issue
to a  Participant  a  receipt  evidencing  any  share  certificate  held  by  it
registered in the name of the Participant.

9.4 If a nominated  Registered Holder is used, the Committee shall cause a share
certificate registered in the name of the Participant to be issued and, if it so
determines,  deposited together with the share powers with any Registered Holder
nominated by the Committee. The Participant shall not be entitled to delivery of
the share certificate until the Restricted Period has expired and the Registered
Holder shall retain custody of such shares during the Restricted Period.

9.5 Subject to the restrictions set forth in Section 9.7 to 9.9, the Participant
generally shall have the rights and privileges of a beneficial  owner as to such
Restricted  Shares,  including the right to direct the Registered  Holder how to
vote such Restricted Shares. At the discretion of the Committee,  cash dividends
and  share  dividends  with  respect  to the  Restricted  Shares  may be  either
currently  paid to the  Participant or withheld by the Company or the Registered
Holder for the Participant's account, and interest may be credited on the amount
of cash dividends  withheld at a rate and subject to such terms as determined by
the  Committee.  The  cash  dividends  or share  dividends  so  withheld  by the
Committee and  attributable  to any particular  Restricted  Shares (and earnings
thereon, if applicable) shall be distributed to the Participant upon the release
of  restrictions  on such  Restricted  Shares and, if such  Restricted  Share is
forfeited, the Participant shall have no right to such cash or share dividends.

9.6 The terms and conditions of a grant of a Restricted Share Unit Award will be
reflected in a written Restricted Share Unit Award Agreement.  The Committee may
determine  that a  Restricted  Share  Unit Award be granted in the form of a nil
cost option or a conditional  or  contingent  right to acquire  shares.  Where a
Restricted  Share Unit Award is  granted in the form of a nil cost  option,  any
reference to the Restricted Period expiring in respect of Restricted Share Units
shall be  construed as meaning that a  Participant  may call for the  Restricted
Share Units within the period  determined by the Committee.  A Participant shall
not have any beneficial interest in any Shares during the Restricted Period as a
result of being granted a Restricted  Stock Unit Award.  The Company will not be
required  to set  aside  a fund  for  the  payment  of any  such  Award.  At the
discretion of the Committee, each Restricted Share Unit (representing one Share)
awarded to a Participant  may be credited with cash and share  dividends paid in
respect  of  one  Share  ("Dividend  Equivalents").  At  the  discretion  of the
Committee,  Dividend Equivalents may be either currently paid to the Participant
or withheld by the Company for the  Participant's  account,  and interest may be
credited  on the  amount of cash  Dividend  Equivalents  withheld  at a rate and
subject to such  terms as  determined  by the  Committee.  Dividend  Equivalents
credited  to  a  Participant's   account  and  attributable  to  any  particular
Restricted Share Unit

<PAGE>

(and earnings  thereon,  if applicable)  shall be distributed to the Participant
upon settlement of such Restricted Share Unit and, if such Restricted Share Unit
is forfeited, the Participant shall have no right to such Dividend Equivalents.

Restrictions

9.7  Restricted  Shares  comprised  in a  Restricted  Share  Award  granted to a
Participant shall be subject to the following  restrictions until the expiration
of the  Restricted  Period  and the  attainment  of any other  vesting  criteria
established by the  Committee,  and to such other terms and conditions as may be
set forth in the applicable Restricted Share Award Agreement:

(a)   the   Participant   shall  not  be  entitled  to  delivery  of  the  share
      certificate;

(b)   the   Restricted   Shares  shall  be  subject  to  the   restrictions   on
      transferability set forth in the Restricted Share Award Agreement; and

(c)   the  Restricted  Shares  shall be  subject  to  forfeiture  to the  extent
      provided in the Rules and the applicable  Restricted  Share Agreement and,
      to the extent such Restricted Shares are forfeited, the share certificates
      shall be returned to the  Company,  and all rights of the  Participant  to
      such  Restricted  Shares  and as a  shareholder  shall  terminate  without
      further obligation on the part of the Company.

9.8   Restricted Share Units awarded to any Participant shall be subject to:

(a)   forfeiture  until  the  expiration  of  the  Restricted   Period  and  the
      attainment of any other vesting criteria established by the Committee,  to
      the extent  provided in these Rules and the  applicable  Restricted  Share
      Unit  Agreement,  and  to the  extent  such  Restricted  Share  Units  are
      forfeited,  all rights of the Participant to such  Restricted  Share Units
      shall terminate without further obligation on the part of the Company; and

(b)   such  other  terms and  conditions  as may be set forth in the  applicable
      Restricted Share Unit Agreement.

9.9  The  Committee  shall  have  the  authority  to  remove  any  or all of the
restrictions on the Restricted Shares and Restricted Share Units whenever it may
determine  that such action is  appropriate  by reason of changes in  applicable
laws or other exceptional  circumstances determined by the Committee (including,
without limitation,  the circumstances  permitted in Section 10 in relation to a
Participant's  Retirement  or death,  or in  relation  to the  termination  of a
Participant's  employment  lawfully or unlawfully,  or disability) arising after
the date of the Restricted Share Award or Restricted Share Unit Award.

Restricted Period

9.10 The Restricted  Period applicable to Restricted Shares and Restricted Share
Units comprised in an Award shall commence on the Date of Grant and shall expire
from time to time as to that part of the Restricted  Shares and Restricted Share
Units  indicated  in a schedule  (the  "Vesting  Schedule")  established  by the
Committee and set out in the applicable Restricted Share Agreement or Restricted
Share Unit Agreement.

<PAGE>

(a)   The minimum  Restricted  Period  applicable to Restricted  Share Awards or
      Restricted Share Unit Awards which are subject to Performance  Goals shall
      be one year from the Date of Grant.

(b)   The minimum  Restricted  Period  applicable to Restricted  Share Awards or
      Restricted  Share Unit Awards which are not subject to Performance  Goals,
      and which are to vest in full on a single  date shall be three  years from
      the Date of Grant.

(c)   The  minimum   Restricted  Period  applicable  to  Restricted  Shares  and
      Restricted  Share Units  comprised in the Award which are to vest in parts
      over a period of more than one year  shall be five  years from the Date of
      Grant, in which case the Restricted Period shall be treated as expiring in
      respect of equal parts of the Restricted  Shares on Restricted Share Units
      on each  anniversary  of the Date of Grant  until  the end of the  overall
      Restricted Period.

Delivery of Restricted Shares and Settlement of Restricted Share Units

9.11 Upon the expiration of the Restricted Period with respect to any Restricted
Shares  covered by a  Restricted  Share  Award and the  attainment  of any other
vesting  criteria  established by the Committee,  the  restrictions set forth in
Section 9.7 to 9.9 and the  Restricted  Share  Agreement  shall be of no further
force or effect with respect to the  Restricted  Shares which have not then been
forfeited. The Company shall deliver or procure the delivery to the Participant,
or his  beneficiary,  without  charge,  the  share  certificate  evidencing  the
Restricted  Shares which have not then been  forfeited and with respect to which
the Restricted Period has expired and any other vesting criteria  established by
the  Committee  has been  attained  (to the  nearest  full  share)  and any cash
dividends or share dividends credited to the Participant's  account with respect
to such Restricted Shares and the interest thereon, if any.

9.12 Upon the  expiration  of the  Restricted  Period and the  attainment of any
other  vesting  criteria  established  by the  Committee,  with  respect  to any
Restricted  Share Units  covered by a Restricted  Share Unit Award,  the Company
shall  determine  whether the Award  shall be settled in Shares or cash.  If the
Committee  determines  that the Award  shall be settled in Shares,  the  Company
shall  procure the  delivery to the  Participant,  or his  beneficiary,  without
charge,  one  Share  for each  Restricted  Share  Unit  which  has not then been
forfeited  and with respect to which the  Restricted  Period has expired and any
other such vesting criteria are attained  ("Vested Unit").  If the Committee has
elected to pay cash (or part cash and part Shares) for Vested Units,  the amount
of such payment  shall be equal to the Fair Market Value of the Shares as of the
date on which the Restricted Period lapsed with respect to such Vested Unit.

Conditions of Grant

9.13  Restricted  Share Awards and  Restricted  Share Unit Awards may be granted
subject to such conditions for payment of tax and employees'  National Insurance
contributions and employer's  National Insurance  contributions as the Committee
may determine, including that, with respect to Awards of Restricted Shares which
qualify as employment related restricted  securities under Chapter 2 of Part VII
of ITEPA, any member of the plc Group may require a Participant to enter into an
election under section 430 or section 431 of ITEPA.

<PAGE>

10. FORFEITURE

Restricted Shares

10.1 Save as otherwise  provided in these rules and unless  otherwise  stated in
the applicable  Restricted  Share Award  Agreement,  Restricted  Shares shall be
forfeited  automatically on the Participant ceasing to be an employee of the plc
Group (whether lawfully or unlawfully) before the end of the Restricted Period.

10.2 Where a  Participant  ceases to be an employee of the plc Group  before the
end of the  Restricted  Period by reason of Retirement,  the  Restricted  Shares
shall not be forfeited and the restrictions  attaching to the Restricted  Shares
shall  continue and shall lapse in accordance  with the terms of the  Restricted
Share  Award  provided,  however,  that  the  Committee  may in  its  discretion
determine that some or all of the Restricted Shares may be released early.

10.3 Where a  Participant  ceases to be an employee of the plc Group  before the
end  of the  Restricted  Period  by  reason  of his  death  while  still  in the
employment  of a member of the plc Group,  or he dies  following a cessation  of
employment  described  in  Section  10.2  the  Restricted  Shares  shall  not be
forfeited and the Restricted  Period shall expire forthwith and the restrictions
shall lapse.

Restricted Share Units

10.4 Save as otherwise  provided in these rules and unless  otherwise  stated in
the applicable  Restricted  Share Unit Award  Agreement,  Restricted Share Units
shall be forfeited automatically on the Participant ceasing to be an employee of
the plc Group (whether lawfully or unlawfully)  before the end of the Restricted
Period.

10.5 Where a  Participant  ceases to be an employee of the plc Group  before the
end of the Restricted Period by reason of Retirement, the Restricted Share Units
shall not be forfeited and the  restrictions  attaching to the Restricted  Share
Units  shall  continue  and  shall  lapse in  accordance  with the  terms of the
Restricted  Share Unit Award  provided,  however,  that the Committee may in its
discretion  determine  that  some or all of the  Restricted  Share  Units may be
released early.

10.6 Where a  Participant  ceases to be an employee of the plc Group  before the
end  of the  Restricted  Period  by  reason  of his  death  while  still  in the
employment  of a member of the plc Group,  or he dies  following a cessation  of
employment  described  in Section 10.2 the  Restricted  Share Units shall not be
forfeited and the Restricted  Period shall expire forthwith and the restrictions
shall lapse.

10.7 For the avoidance of doubt, an Award that is retained under this Section 10
may lapse at an earlier date by virtue of Section 13.

10.8 For the purposes of Sections 10.1 to 10.6 a female Participant shall not be
treated as ceasing to be an employee of a member of the plc Group if absent from
work wholly or partly because of pregnancy or confinement until she ceases to be
entitled to exercise any statutory or contractual right to return to work.

10.9 Where any release or  exercise  of an Award under this  Section 10 would be
prohibited by law or the Model Code for Securities  Transactions by Directors of
Listed  Companies (or the Company's  dealing  rules) the period during which the
Restricted  Shares or  Restricted  Share Units may be released

<PAGE>

to a Participant  shall be extended by an additional  period equal to the length
of the period of prohibition.

11. GENERAL

Additional Provisions of an Award

11.1 Awards granted to a Participant  under the Plan also may be subject to such
other  provisions  (whether  or not  applicable  to Awards  granted to any other
Participant)  as  the  Committee  determines  appropriate   including,   without
limitation, provisions to assist the Participant in financing the acquisition of
Shares upon the exercise of Options (provided that the Committee determines that
providing  such financing  does not violate the  Sarbanes-Oxley  Act of 2002 and
applicable UK law),  provisions for the forfeiture of or  restrictions on resale
or other  disposition of Shares acquired under any Award,  provisions giving the
Company the right to repurchase Shares acquired under any Award in the event the
Participant  elects  to  dispose  of  such  Shares,   provisions   allowing  the
Participant  to elect to defer the receipt of Shares upon the exercise of Awards
for a specified period or until a specified event, and provisions to comply with
US Federal and state  securities  laws and US Federal and state tax  withholding
requirements.  Any such  provisions  shall be reflected in the applicable  Award
Agreement.

Privileges of Share Ownership

11.2 Except as otherwise  specifically  provided in the Plan, no person shall be
entitled to the  privileges  of ownership in respect of Shares which are subject
to Awards  hereunder  until such Shares have been issued or  transferred to that
person.

Government and Other Regulations

11.3 The  obligation of the Company to issue Shares upon the exercise of Options
or otherwise  settle Awards in Shares shall be subject to all  applicable  laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required.

Tax Withholding

11.4 A Participant may be required to pay to a member of the Combined Group, and
each member of the Combined Group shall have the right and is hereby  authorized
to withhold  from any Shares or other  property  deliverable  under any Award or
from any  compensation  or other amounts  owing to a Participant  the amount (in
cash,  Shares or other  property) of any required  tax  withholding  and payroll
taxes in respect of an Award, its exercise,  or any payment or transfer under an
Award or under the Plan and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.

11.5 Without  limiting the generality of Section 11.4 above,  the Committee may,
in its sole  discretion,  permit a Participant to satisfy,  in whole or in part,
the  foregoing  withholding  liability  (but no more than the  minimum  required
withholding liability if using method (b) or (c) of this subsection) by:

(a)   payment in cash;

(b)   delivery of Shares owned by the Participant with a Fair Market Value equal
      to such withholding liability;

<PAGE>

(c)   having the Company withhold from the number of Shares  otherwise  issuable
      pursuant  to the  exercise  of the Award a number  of  Shares  with a Fair
      Market Value equal to such withholding liability; or

(d)   authorising  the  Company  to  arrange  the sale of  sufficient  Shares to
      generate proceeds sufficient to discharge any withholding liability.

Claim to Awards and Employment Rights

11.6 The rights and obligations of an Employee under the terms and conditions of
his office or employment shall not be affected by his  participation in the Plan
or any  right  he may  have  to  participate  in the  Plan.  An  individual  who
participates in the Plan waives all and any rights to  compensation  and damages
in consequence of the  termination of his office or employment  with any company
for any reason  whatsoever  (whether  lawfully or  unlawfully)  insofar as those
rights  arise,  or may  arise,  from his  ceasing  to have  rights  under or his
entitlement  to an Award under the Plan as a result of such  termination or from
the loss or diminution in value of such rights or entitlements.  In the event of
conflict  between the terms of this  Section  11.6 and the  Employee's  terms of
employment, this Section will take precedence.

Governing Law

11.7 The Plan shall be governed by, and construed in accordance  with,  the laws
of England. All disputes arising out of or in connection with the rules shall be
subject to the exclusive jurisdiction of the courts of England and Wales.

Funding

11.8 No  provision  of the Plan shall  require the  Company,  for the purpose of
satisfying  any  obligations  under the Plan,  to  purchase  assets or place any
assets in a trust or other entity to which  contributions  are made or otherwise
to segregate any assets,  nor shall the Company maintain separate bank accounts,
books,  records or other evidence of the existence of a segregated or separately
maintained or administered  fund for such purposes.  Participants  shall have no
rights under the Plan other than as unsecured  general creditors of the Company,
except that  insofar as they may have become  entitled to payment of  additional
compensation  by  performance  of  services,  they shall have the same rights as
other employees under general law.

Nontransferability

11.9  Each  Award  shall  be  exercisable  only  by  a  Participant  during  the
Participant's  lifetime,  or,  if  permissible  under  applicable  law,  by  the
Participant's  legal  guardian  or  personal  representative.  No  Award  may be
assigned,  alienated,  pledged,  attached,  sold  or  otherwise  transferred  or
encumbered by a Participant otherwise than by will or by the laws of inheritance
and  any  such  purported  assignment,  alienation,  pledge,  attachment,  sale,
transfer or encumbrance shall be void and  unenforceable  against each member of
the plc Group.

11.10 Notwithstanding the foregoing,  the Committee may, in its sole discretion,
permit  Awards  other  than  Incentive  Share  Options  to be  transferred  by a
Participant,  without consideration,  subject to such rules as the Committee may
adopt consistent with any applicable Award Agreement to preserve the purposes of
the Plan, to:

<PAGE>

(a)   any person  who is a spouse or child or step child  under the age of 18 of
      the Participant (an "Immediate Family Member");

(b)   a trust solely for the benefit of the Participant and his or her Immediate
      Family Members;

(c)   a  partnership  or  limited  liability  company  whose  only  partners  or
      shareholders are the Participant and his Immediate Family Members;

(each transferee described in sub-sections (a), (b) and (c) above is hereinafter
referred to as a "Permitted  Transferee");  provided that the Participant  gives
the Committee  advance written notice describing the terms and conditions of the
proposed  transfer and the Committee  notifies the  Participant  in writing that
such a transfer would comply with the requirements of the Plan.

11.11 The terms of any Award  transferred in accordance with Section 11.10 shall
apply to the  Permitted  Transferee  and any  reference  in the Plan,  or in any
applicable Award Agreement or share option  certificate,  to a Participant shall
be deemed to refer to the Permitted Transferee, except that:

(a)   Permitted  Transferees shall not be entitled to transfer any Award,  other
      than by will or the laws of inheritance;

(b)   Permitted  Transferees  shall not be entitled  to  exercise a  transferred
      Nonqualified  Share Option unless there shall be in effect a  registration
      statement  on an  appropriate  form  covering  the  Shares to be  acquired
      pursuant  to  the  exercise  of  such  Nonqualified  Share  Option  if the
      Committee   determines,   consistent  with  any  applicable  Share  Option
      Agreement, that such a registration statement is necessary or appropriate,

(c)   the  Committee  or any member of the plc Group  shall not be  required  to
      provide any notice to a Permitted  Transferee,  whether or not such notice
      is or would  otherwise  have been required to be given to the  Participant
      under the Plan or otherwise; and

(d)   the  consequences  of a Participant no longer being employed by, or in the
      services of, a member of the plc Group under the terms of the Plan and the
      applicable Award Agreement or share option  certificate  shall continue to
      be applied with respect to the Participant, including, without limitation,
      that a  Nonqualified  Share Option shall be  exercisable  by the Permitted
      Transferee only to the extent, and for the periods,  specified in the Plan
      and the applicable Share Option Agreement.

Relationship to Other Benefits

11.12 No payment under the Plan shall be taken into account in  determining  any
benefits under any pension, retirement, profit sharing, group insurance or other
benefit plan of a member of the Combined Group except as otherwise  specifically
provided in such other plan.

Expenses

11.13 The expenses of administering the Plan shall be borne by the plc Group.

<PAGE>

Gender and Number

11.14 Where the context admits,  masculine pronouns and other words of masculine
gender shall refer to both men and women,  words in the singular  shall  include
the plural and words in the plural shall include the singular.

Termination of Employment

11.15 For all purposes  herein,  a person who transfers from  employment  with a
member of the plc Group to  employment  or service with a member of the Combined
Group shall not be deemed to have terminated employment or service with a member
of the plc Group.

Titles and Headings

11.16 The titles and headings of the sections in the Plan are for convenience of
reference only, and in the event of any conflict,  the text of the Plan,  rather
than such titles or headings shall control.

Severability

11.17 If any  provision  of the Plan or any Award  Agreement is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or Award, or would  disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to  conform  to the  applicable  laws,  or if it cannot be  construed  or deemed
amended without, in the determination of the Committee,  materially altering the
intent  of the  Plan or  Award,  such  provision  shall be  stricken  as to such
jurisdiction,  person or Award and the  remainder of the Plan and any such Award
shall remain in full force and effect.

12. CHANGES IN CAPITAL STRUCTURE

12.1 In the event of any:

(a)   Capital Reorganisation;

(b)   Corporate Transaction; or

(c)   the  implementation  by the Company of a  demerger,  or the payment by the
      Company of a dividend in specie or a super  dividend or other  transaction
      or any change in applicable laws or any change in  circumstances  which in
      the opinion of the Committee (acting fairly and reasonably and taking into
      account any  criteria it may  consider to be  relevant)  would  materially
      affect  (whether by increasing or reducing) the current or future value of
      an Award

the number or type of shares subject to an Award and the Option Price per Share
may be adjusted or the Awards may be subject to substitution in such manner as
the Committee may determine is fair and reasonable, PROVIDED THAT:

      (i)   in respect of an Award  under  which  Shares are to be  transferred,
            prior  notification  shall be given to the person holding the Shares
            to which the Award relates;

      (ii)  no  adjustment  shall be made  pursuant to this Section  which would
            decrease the aggregate Option Price of any Option; and

<PAGE>

      (iii) except as provided in this  sub-paragraph  (iii),  no adjustment may
            have the effect of reducing  the Option  Price of any Option to less
            than the nominal  value of a Share.  Where an Option  subsists  over
            both issued and unissued  Shares,  any such  adjustment  may only be
            made if the  reduction  of the  Option  Price of  Options  over both
            issued  and  unissued  Shares  can be made to the same  extent.  Any
            adjustment to the Option Price of Options over unissued Shares shall
            only  be made if and to the  extent  that  the  Committee  shall  be
            authorised  to  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
            Option  Price.  The  Company  may  apply  such sum in paying up such
            amount on such  Shares  and so that,  on  exercise  of any Option in
            respect of which such  reduction  shall have been made,  the Company
            shall  capitalise  such sum (if any) and apply the same in paying up
            such amount as aforesaid; and

      (iv)  any  adjustment  in Incentive  Share  Options  under this Section 12
            shall be made only to the extent not  constituting a  "modification"
            within  the  meaning  of  Section  424(h)(3)  of the  Code,  and any
            adjustments  under this  Section 12 shall be made in a manner  which
            does not adversely  affect the exemption  provided  pursuant to Rule
            16b-3 under the Exchange Act.

12.2 Notwithstanding the above, in the event of any of the following:

(a)   the  Company  is merged  or  consolidated  with  another  company  or body
      corporate  and,  in  connection  therewith,  consideration  is received by
      shareholders  of the Company in a form other than  shares or other  equity
      interests of the surviving entity;

(b)   a Sale;

(c)   the reorganization or liquidation of the Company; or

(d)   the Company enters into a written  agreement to undergo an event described
      in sub-paragraphs (a), (b) or (c) above,

then the  Committee  may, in its  discretion  and upon at least 10 days  advance
notice to the  affected  persons,  cancel any  outstanding  Awards and cause the
holders thereof to be paid, in cash or shares, or any combination  thereof,  the
value of such  Awards  based  upon the price  per  share of the  shares or other
consideration  received or to be received by  shareholders of the Company in the
event.

12.3 The Company shall give each Participant  notice of an adjustment  hereunder
and,  upon  notice,  such  adjustment  shall be  conclusive  and binding for all
purposes.

13. EFFECT OF CHANGE OF CONTROL

13.1 In the event of a Change of Control  which is not a Scheme of  Arrangement,
notwithstanding  any  provision of the Plan to the contrary and  notwithstanding
that the Option  Period may not have  commenced nor the  Performance  Goals been
satisfied, an Option shall forthwith vest and become exercisable with respect to
100 per cent of the Shares subject to such Option. An Option Holder may exercise
his Options  during the  Relevant  Period.  Failing any  permitted  exercise the
Options  shall without  prejudice to the operation of Section 13.7,  cease to be
exercisable  and shall  automatically  lapse  upon the  expiry  of the  Relevant
Period, and if more than one Relevant Period is running concurrently,

<PAGE>

the Option shall cease to be exercisable  and lapse upon the expiry of whichever
of those periods is the first to expire.

13.2 In the  event of a Change  of  Control  which is a Scheme  of  Arrangement,
notwithstanding  any  provision of the Plan to the contrary and  notwithstanding
that the Option  Period may not have  commenced nor the  Performance  Goals been
satisfied, an Option shall forthwith vest and become exercisable with respect to
100  per  cent  of  the  Shares  subject  to  such  Option   conditionally  upon
satisfaction  of the  Relevant  Condition.  An Option  Holder may  exercise  his
Options during the Relevant Period.  Failing any permitted  exercise the Options
shall  cease to be  exercisable  between  the last  date  upon  which  permitted
exercises may occur and the first date when it can be determined  whether or not
the Relevant Condition is satisfied.  If the Relevant Condition is not satisfied
the Options  shall  continue  subject to the terms of this Plan. If the Relevant
Condition is satisfied the Options shall,  without prejudice to the operation of
Section  13.7,  lapse  automatically  on the  date  upon  which  the  scheme  of
arrangement is sanctioned by the Court.

13.3 In the event of a Change of Control  which is not a Scheme of  Arrangement,
notwithstanding  any  provision of the Plan to the contrary and  notwithstanding
that the Restricted  Period may not have expired nor any Performance  Goals been
satisfied,  the Restricted Period shall forthwith expire with respect to 100 per
cent of the Shares  comprised in a Restricted  Stock Award or a Restricted Stock
Unit Award. The Restricted Period shall expire immediately upon the commencement
of the  Relevant  Period and the Company  shall  satisfy its  obligations  under
Section 9.11 and 9.12 of this Plan in respect of the Restricted Share Awards and
Restricted  Share Unit Awards within 30 days thereof at the end of which period,
without prejudice to the operation of Section 13.7, the Awards shall lapse.

13.4 In the  event of a Change  of  Control  which is a Scheme  of  Arrangement,
notwithstanding  any  provision of the Plan to the contrary and  notwithstanding
that the Restricted  Period may not have expired nor any Performance  Goals been
satisfied,  the  Restricted  Period shall expire with respect to 100 per cent of
the Shares  comprised  in a Restricted  Stock Award or a  Restricted  Stock Unit
Award conditionally upon satisfaction of the Relevant Condition. If the Relevant
Condition  is not  satisfied  the  Restricted  Period  shall not  expire and the
Restricted  Share Awards and Restricted Share Unit Awards shall continue subject
to the terms of this Plan. If the Relevant Condition is satisfied the Restricted
Period  shall  expire  on the date  upon  which the  scheme  of  arrangement  is
sanctioned  by the Court and the Company  shall  satisfy its  obligations  under
Section 9.11 and 9.12 of this Plan in respect of the Restricted Share Awards and
Restricted  Share Unit Awards within 30 days thereof at the end of which period,
without prejudice to the operation of Section 13.7, the Awards shall lapse.

Cancellation of Awards

13.5 In the event of a Change of Control,  the Committee  may in its  discretion
and upon at least 10 days' advance  notice to the affected  persons,  cancel any
outstanding  Award and pay to the  holders  thereof,  in cash or shares,  or any
combination  thereof,  the value of such  Awards  based upon the price per Share
received or to be received by other shareholders of the Company in the event.

Demerger

13.6 If the  Committee  becomes  aware that the  Company is or is expected to be
affected  by  any  demerger,   dividend  in  specie,   super-dividend  or  other
transaction  which,  in the opinion of the Committee,  would  materially  affect
(whether by  increasing  or reducing) the current or future value of any Awards,
the Committee  (acting fairly and reasonably and taking into account criteria it
may

<PAGE>

consider to be relevant)  may, in its absolute  discretion,  allow Options to be
exercised  (whether or not the Option Period has  commenced)  and the Restricted
Period to expire in respect of Restricted  Shares and Restricted Share Units, in
each case in respect of such number of Shares as the  Committee may determine in
its  discretion.  The  Committee  shall specify the period in which such Options
shall be  exercisable  and whether  such  Options  shall lapse at the end of the
specified period.  The Committee shall notify any Participant who is affected by
the discretion exercised under this Section.

Roll-over of Awards

13.7 In the event of a Change of Control  the  Committee  may,  in its  absolute
discretion, with the consent of any acquiring company determine that:

(a)   Options shall not be exercisable and that the Restricted  Period shall not
      expire in respect of Restricted Shares and Restricted Share Units but that
      Participants  shall be required  within the Relevant Period to release any
      outstanding  Awards (whether vested or unvested) in consideration  for the
      grant of equivalent  Awards over shares or restricted shares or restricted
      share units in the capital of the  acquiring  company or any company which
      Controls  such  acquiring  company,  on such  terms as the  Committee  may
      determine; or

(b)   Participants  may at any time within the Relevant Period by agreement with
      the acquiring  company,  release any outstanding Awards (whether vested or
      unvested) in consideration  for the grant of equivalent Awards over shares
      or  restricted  shares or  restricted  share  units in the  capital of the
      acquiring company or any company which Controls such acquiring company, on
      such terms as the Committee may determine.

14. NON EXCLUSIVITY OF THE PLAN

Neither the adoption of this Plan by the  Committee  nor the  submission of this
Plan to the  shareholders  of the Company for  approval  shall be  construed  as
creating  any  limitations  on the power of the  Committee  to adopt  such other
incentive arrangements as it may deem desirable,  including, without limitation,
the  granting  of  share  options  otherwise  than  under  this  Plan,  and such
arrangements may be either applicable generally or only in specific cases.

15. AMENDMENTS AND TERMINATION

15.1 The Committee may at any time discontinue the grant of further Awards.

15.2 The  Committee  may amend any of the  provisions  of the Plan in any way it
thinks fit, provided that:

(a)   the Committee shall not make any amendment that would materially prejudice
      the  interests of existing  Participants  except with the prior consent or
      sanction of  Participants  who, if they exercised their Options in full or
      the  Restricted  Period in respect of their Award  expired,  would thereby
      become  entitled to not less than  three-quarters  of all the Shares which
      would fall to be allotted,  transferred  or released upon exercise in full
      of all outstanding Options and expiry of the Restricted Period; and

(b)   no amendment to the advantage of Employees or may be made to:

      (i)   the definition of Employee in Section 2;

<PAGE>

      (ii)  the limitations on the number of Shares subject to the Plan;

      (iii) the basis for determining an Executive's entitlement to Shares under
            the Plan;

      (iv)  the terms of Shares to be provided under the Plan;

      (v)   the adjustment provisions of Section 12 of the Plan; or

      (vi)  the  Option  Price  applicable  to an  Option  (other  than  in  the
            circumstances permitted in Rule 12),

      without the prior approval of the Company in general meeting except in the
      case of 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 Employees or
      any member of the Combined Group; and

(c)   without  prejudice  to any  provision  of the Plan which  provides for the
      lapse of an Option,  the  Committee  may not  cancel an Option  unless the
      Option Holder agrees in writing to such cancellation.

15.3 At any time during an Option Period where the Option Price applicable to an
Option is higher than the Fair Market Value of a Share (an "Underwater Option"),
the Committee shall not permit a Participant to exchange an Underwater Option in
consideration  of the grant of an Option with a lower Option Price,  without the
prior approval of the Company in general meeting other than in the circumstances
permitted in Section 13.7.

15.4  Notwithstanding  any  other  provision  of the  Plan,  the  Committee  may
establish appendices to the Plan for the purpose of granting Approved Options to
Employees  who are primarily  liable to tax in the United  Kingdom and Awards to
Employees  who are or may  become  primarily  liable to tax  outside  the United
Kingdom on their remuneration, subject to such modifications as may be necessary
or desirable to take account of overseas  tax,  exchange  control or  securities
laws provided that any shares made available under such  appendices  shall count
towards the limit set out in Section 5.1.

15.5 Benefits under the Plan shall not be pensionable.

<PAGE>

                                   APPENDIX 1

                         United States Part of the Plan

For any Employee whose  remuneration is (or, at the time of Option exercise,  is
expected  wholly to be) subject to taxation in the United  States of America and
to whom the  Committee  wishes to grant  Options  under  this Plan which will be
treated as Incentive Share Options, the following provisions shall apply:

(A)   All the provisions of the Plan shall apply to the grant of Options subject
      to the modifications contained in the following paragraphs.

(B)   The number of Shares  issued or  transferred  pursuant to the  exercise of
      Incentive Share Options shall not, in aggregate, exceed 40 million Shares.
      The number of Shares  available  for  issuance  pursuant to the  preceding
      sentence shall not exceed the limit in Section 5.1 and shall be subject to
      appropriate adjustment on the occurrence of any event described in Section
      12.

(C)   The term  "disability"  in  Section  8.3 shall have the  meaning  given by
      Section 22(e)(3) of the Code.

<PAGE>

                                   APPENDIX 2

                   Inland Revenue approved part of the Scheme

In relation to any Employee whose  remuneration is subject to taxation in the UK
and to whom the  Committee  wishes  to grant  Approved  Options,  the  following
provisions relating to Options shall apply:

(D)   Sections 1 to 15 of the Plan shall apply to the grant of Approved  Options
      under  this  Appendix  2 subject  to the  modifications  contained  in the
      following paragraphs.

(E)   This  Appendix  2 shall  not  apply to Awards  of  Restricted  Shares  and
      Restricted Share Units and, accordingly,  Sections 9 to 10 shall not apply
      to this Appendix 2.

(F)   The definition of Employee in Section 2 shall be construed so that:

       (i)  no Option may be granted  under this Appendix 2 to a director of any
            member of the plc Group  unless such  director is required to devote
            not less than 25 hours per week to the affairs of the plc Group; and

       (ii) no Option  may be  granted  under  this  Appendix  2 to an  employee
            (including  one who is a director) who is ineligible to  participate
            in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.

(G)   Part (b) of the  definition  of Fair  Market  Value shall not apply to the
      grant of Options under this Appendix 2. In its place,  a new paragraph (b)
      shall be inserted as follows:

      "(b)  subject to (a) above, the value as agreed between the Inland Revenue
            and the Company in writing in advance of the Date of Grant;"

(H)   The  definition  of Shares  shall be  subject to the  condition  that they
      satisfy  paragraphs 16 to 20 of Schedule 4 to ITEPA.  For the avoidance of
      doubt, Options may not be granted over ADRs under this Appendix 2.

(I)   In addition to its powers  under  Section 4, the  Committee  may make such
      amendments  to this  Appendix 2 without the  approval of  shareholders  in
      general meeting as are necessary or desirable to obtain or maintain Inland
      Revenue approval of this Appendix 2.

(J)   Any Option  granted  under this  Appendix  2 may only be  exercised  by an
      Option Holder who is not  ineligible to  participate in the Plan by virtue
      of paragraph 9 of Schedule 4 to ITEPA.

(K)   Section 4.2(e) shall not apply to the grant of Options under this Appendix
      2.

(L)   Section 4.2(f) shall not apply to the grant of Options under this Appendix
      2.

(M)   Any correction  pursuant to Section 4.2(g) to an Option granted under this
      Appendix 2 shall be subject to the exercise of the  amendment  power under
      Section 15, as modified by this Appendix 2.

(N)   Section 6 shall not apply to the grant of Options  under this  Appendix 2.
      In its place a new Section 6 shall be inserted as follows:

<PAGE>

      "6.   ELIGIBILITY

      6.1   No Employee shall be granted an Option unless:

      (a)   he has received written  notification from the Committee,  or from a
            person  designated  by the  Committee,  that he has been selected to
            participate in the Plan; and

      (b)   immediately  following such grant the aggregate Fair Market Value of
            the Shares  which he may  acquire by  exercise of the Option and any
            Shares which he may acquire by exercise of any other options granted
            under the Plan or any other approved CSOP scheme (within the meaning
            of section  521(4) of ITEPA)  established  by the plc Group will not
            exceed  (pound)30,000  or  such  other  amount  as may be  specified
            pursuant to  paragraph 6 of Schedule 4 to ITEPA and for this purpose
            Fair  Market  Value  shall be  determined  on the date on which  the
            relevant Option is granted."

(O)   Section 7.4 shall not apply to the grant of Options under this Appendix 2.
      In its place a new Section 7.4 shall be inserted as follows:

      "Conditions of Exercise

      7.4   The  exercise  of an Option may be subject  to such  conditions  for
            payment of taxation, employees' National Insurance contributions and
            employer's  National  Insurance   contributions   liability  as  the
            Committee may determine  (including  without limitation the right to
            sell on an Option Holder's behalf  sufficient  Shares to satisfy any
            taxation or National  Insurance  contributions) and if any condition
            is imposed  relating to the assumption,  payment or reimbursement by
            the Option Holder of  employer's  National  Insurance  contributions
            liability,   such  conditions   shall  comply  with  any  applicable
            legislation  or  regulations  and the  Company  shall be entitled to
            waive in whole or in part the Option Holder's  obligation in respect
            of such liability."

(P)   Section 7.6 shall not apply to the grant of Options under this Appendix 2.
      In its place a new Section 7.6 shall be inserted as follows:

<PAGE>

      "Performance Goals

      7.6   The Committee shall determine prior to the Date of Grant whether any
            Performance  Goals shall apply to the vesting of an Option and if so
            these shall be set out in the applicable  Share Option  Agreement or
            share  option  certificate.  Any  Performance  Goals  applied by the
            Committee  must be  objective.  If events  subsequently  occur which
            cause the  Committee to consider that a different  Performance  Goal
            would be a fairer measure of the performance of the  job-holder,  an
            amendment  may be made to the extent that the  Committee  reasonably
            consider would result in the Performance Goal being no more nor less
            difficult   to  satisfy   than  it  would  have  been  without  such
            amendment."

(Q)   Section 7.8(c) shall not apply to the grant of Options under this Appendix
      2. In its place a new Section 7.8(c) shall be inserted as follows:

      "Options shall not be transferable  by the  Participant  other than to the
      Option  Holder's  personal  representative  on  his  death  and  shall  be
      exercisable during the Participant's lifetime by him alone;"

(R)   Section 11.1 shall not apply to Options  granted under this Appendix 2. In
      its place, a new Section 11.1 shall be inserted as follows:

      "Additional Provisions of an Award

      11.1  Awards  granted to a Participant  under the Plan may also be subject
            to such other provisions  (whether or not applicable to other Awards
            granted  to  any  such  Participant)  as  the  Committee  determines
            appropriate to be offered to a Participant to assist the Participant
            in financing the  acquisition of Shares upon the exercise of Options
            (provided that such  financing  does not violate the  Sarbanes-Oxley
            Act of 2002 and  applicable  UK  law).  Any  such  arrangements  are
            subject to the prior approval of the Inland Revenue"

(S)   Sections  11.4 and 11.5 shall not apply to the grant of Options under this
      Appendix 2. In their place new Sections 11.4 and 11.5 shall be inserted as
      follows:

      "Tax Withholding

      11.4  Subject to Section 11.5 below, a Participant  may be required to pay
            to a member of the Combined  Group,  and each member of the Combined
            Group shall have the right and is hereby authorized to withhold from
            any Shares or other property deliverable under any Award or from any
            compensation or other amounts owing to a Participant, the amount (in
            cash) of any required tax  withholding  and payroll taxes in respect
            of an Award, its exercise, or any payment or transfer under an Award
            or under the Plan and to take such other  action as may be necessary
            in the  opinion of the Company to satisfy  all  obligations  for the
            payment of such taxes.

      11.5  Prior to the  exercise  of an Option,  the  Committee  shall offer a
            Participant  the  opportunity  to elect to  satisfy,  in whole or in
            part,  any  withholding  liability  by the  methods  set out in this
            subsection  (but no  more  than  the  minimum  required  withholding
            liability if using method (b) or (c) of this subsection):

            (a)   payment in cash;

<PAGE>

            (b)   delivery of Shares owned by the Participant with a Fair Market
                  Value equal to such withholding liability;

            (c)   authorising  the  Company  to arrange  the sale of  sufficient
                  Shares  to  generate  proceeds  sufficient  to  discharge  any
                  withholding liability.

      In the event that the Participant  fails to satisfy the liability within 7
      days, the Committee  shall be authorised to arrange the sale of sufficient
      Shares to generate proceeds sufficient to discharge."

(T)   Sections  11.9,  11.10 and 11.11 shall not apply to Options  granted under
      this Appendix 2.

(U)   Section 12.1 shall be amended so that the  Committee  shall not have power
      to adjust  Options  granted  under this  Appendix  2 in the  circumstances
      envisaged by  sub-sections  (b) or (c) of Section 12.1,  nor to adjust the
      type of Shares subject to an Option.  Any  adjustment  pursuant to Section
      12.1 to an Option  granted  under this  Appendix  2 shall not take  effect
      without the prior approval of the Inland Revenue.

(V)   Section 13.5 shall not apply to Options granted under this Appendix 2.

(W)   Section 13.7 shall not apply to Options  granted under this Appendix 2. In
      its place,  a new Section 13.7 and a new Section 13.8 shall be inserted as
      follows:

      "Roll-over of Options

      13.7  If any event occurs which falls within  sub-section  (a), (d) or (e)
            of the definition of Change of Control,  each  Participant who holds
            an Option  granted  under this Appendix 2 may at any time within the
            appropriate   period  (which   expression   shall  be  construed  in
            accordance  with  paragraph  26(3)  of  Schedule  4  of  ITEPA),  by
            agreement with the acquiring  company,  release any Option which has
            not lapsed (the "Old Option") in  consideration  of the grant to him
            of an option (the "New Option")  which (in  accordance  with Section
            13.8 below) is equivalent to the Old Option but relates to shares in
            a different company (whether the acquiring company itself or another
            company  falling within  paragraph  27(2)(b) of Schedule 4 of ITEPA)
            (the "New Grantor").

      13.8  The New Option  shall not be  regarded  for the  purposes of Section
            13.7 as equivalent to the Old Option unless the  conditions  set out
            in  paragraph  27(4) of  Schedule 4 of ITEPA are  satisfied  and, in
            relation  to the New  Option,  the  provisions  of the Plan shall be
            construed as if:

            (i)   the New Option  were an option  granted  under the Plan at the
                  same time as the Old Option;

            (ii)  references to any  Performance  Goals were  references to such
                  new Performance Goals (if any) relating to the business of the
                  New  Grantor or any member of the New  Grantor's  group as the
                  Committee may consider are appropriate in the circumstances;

            (iii) references  to  the  Company  in  Sections  2 to 15 and in the
                  definition of plc Group were references to the New Grantor;

<PAGE>

            (iv)  references to the  Committee in Sections  7.7(e),  8.3,  11.1,
                  11.5,  11.17, 12, 13, and 15.2 were references to the board of
                  directors of the New Grantor or any duly authorised  committee
                  thereof; and

            (v)   references  to  Shares  were  references  to shares in the New
                  Grantor."

(X)   Section 15.3 shall not apply to Options granted under this Appendix 2.

(Y)   At a time when this Appendix 2 is approved by the Inland  Revenue,  and if
      such approved status is to be maintained,  no amendment to any key feature
      (as defined by paragraph 30(4) of Schedule 4 to ITEPA) of the rules of the
      Plan or this Appendix 2 may take effect as regards this Appendix 2 without
      the prior approval of the Inland  Revenue (and if such approved  status is
      not to be  maintained,  the Company shall notify the Inland Revenue of the
      relevant amendment).

(Z)   All Shares allotted or transferred  upon the exercise of an Option granted
      under  this  Appendix 2 shall  rank pari  passu in all  respects  with the
      Shares  in  issue at the  date of  exercise  save as  regards  any  rights
      attaching  to such Shares by  reference to a record date prior to the date
      of exercise.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]