Document:

exv4w1

Exhibit 4.1

			
	 
	THE COMPANIES ACT 2006
	 	COMPANY NO. 77536

 

PUBLIC COMPANY LIMITED BY SHARES

 

ARTICLES OF ASSOCIATION

of

REED ELSEVIER PLC1*

(Adopted by special resolution passed on 21 April 2010)

 

PRELIMINARY

Table A

	1.	 	The regulations in Table A in the schedule to the Companies (Tables A to F) Regulations
1985 as in force at the date of the incorporation of the Company shall not apply to the
Company.

Definitions

	2.	 	In these Articles, except where the subject or context otherwise requires:
	 
	 	 	Act means the Companies Act 2006 including any modification or re-enactment of it for the time
being in force;
	 
	 	 	Articles means these articles of association as altered from time to time by special
resolution;
	 
	 	 	auditors means the auditors of the Company;

 

			
	1	 	NOTE: The Company was incorporated under the name of “ALBERT E. REED & COMPANY,
LIMITED”. On 1st August, 1963, the name of the Company was changed to “REED PAPER
GROUP LIMITED” pursuant to a SPECIAL RESOLUTION dated 24th July, 1963. On 11th
August, 1969, the name of the Company was changed from “REED PAPER GROUP LIMITED”
to “REED GROUP LIMITED” pursuant to a SPECIAL RESOLUTION dated 30th July, 1969. On
3rd August, 1970, the name of the Company was changed from “REED INTERNATIONAL
LIMITED pursuant to a SPECIAL RESOLUTION dated 29th July, 1970. On 1st April, 1982 the
name of the Company was changed from “REED INTERNATIONAL LIMITED” to “REED
INTERNATIONAL P.L.C.” pursuant to a Directors’ resolution dated 2nd March, 1982. On 19th
April, 2002 the name of the company was changed from “REED INTERNATIONAL P.L.C. to
“REED ELSEVIER PLC” pursuant to a special resolution dated 9 April 2002.

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	 	 	the board means the directors or any of them, acting as the board of directors of the
Company;
	 
	 	 	certificated share means a share in the capital of the Company that is not an uncertificated
share and references in these Articles to a share being held in certificated form shall be
construed accordingly;
	 
	 	 	clear days in relation to the sending of a notice means the period excluding the day on which a
notice is given or deemed to be given and the day for which it is given or on which it is to
take effect;
	 
	 	 	director means a director of the Company;
	 
	 	 	dividend means dividend or bonus;
	 
	 	 	entitled by transmission means, in relation to a share in the capital of the Company, entitled
as a consequence of the death or bankruptcy of the holder or otherwise by operation of law;
	 
	 	 	holder in relation to a share in the capital of the Company means the member whose name is
entered in the register as the holder of that share;
	 
	 	 	member means a member of the Company;
	 
		 	office means the registered office of the Company;
	 
	 	 	Ordinary Share means an ordinary share of 14 51/116p in the capital of the Company;
	 
	 	 	Operator shall have the meaning given to it in the Regulations;
	 
	 	 	paid means paid or credited as paid;
	 
	 	 	recognised person means a recognised clearing house or a nominee of a recognised clearing house
or of a recognised investment exchange, each of which terms has the meaning given to it by
section 778 of the Act;
	 
	 	 	register means either or both of the issuer register of members and the Operator register of
members of the Company;
	 
	 	 	Regulations means the Uncertificated Securities Regulations 2001 including any modification or
re-enactment of them for the time being in force;
	 
	 	 	seal means the common seal of the Company and includes any official seal kept by the Company by
virtue of section 49 or 50 of the Act;
	 
	 	 	secretary means the secretary of the Company and includes a joint, assistant, deputy or
temporary secretary and any other person appointed to perform the duties of the secretary;

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	 	 	uncertificated share means (subject to Regulation 42(11)(a) of the Regulations) a share in the
capital of the Company title to which is recorded on the Operator register
of members of the Company and which may, by virtue of the Regulations, be transferred by means
of a relevant system and references in these Articles to a share being held in uncertificated
form shall be construed accordingly; and
	 
	 	 	United Kingdom means Great Britain and Northern Ireland.

Construction

	3.	 	References to writing mean the representation or reproduction of words, symbols or
other information in a visible form by any method or combination of methods, whether in
electronic form or otherwise, and written shall be construed accordingly.
	 
	 	 	References to a document or information being sent, supplied or given to or by a person mean
such document or information, or a copy of such document or information, being sent, supplied,
given, delivered, issued or made available to or by, or served on or by, or deposited with or
by that person by any method authorised by these Articles, and sending, supplying and giving
shall be construed accordingly.
	 
	 	 	Where, in relation to a share, these Articles refer to a relevant system, the reference is to
the relevant system in which that share is a participating security at the relevant time.
	 
	 	 	Words denoting the singular number include the plural number and vice versa; words denoting the
masculine gender include the feminine gender; and words denoting persons include corporations.
	 
	 	 	Words or expressions contained in these Articles which are not defined in Article 2 but are
defined in the Act have the same meaning as in the Act (but excluding any modification of the
Act not in force at the date of adoption of these Articles) unless inconsistent with the
subject or context.
	 
	 	 	Words or expressions contained in these Articles which are not defined in Article 2 but are
defined in the Regulations have the same meaning as in the Regulations (but excluding any
modification of the Regulations not in force at the date of adoption of these Articles) unless
inconsistent with the subject or context.
	 
	 	 	Subject to the preceding two paragraphs, references to any provision of any enactment or of any
subordinate legislation (as defined by section 21(1) of the Interpretation Act 1978) include
any modification or re-enactment of that provision for the time being in force.
	 
	 	 	Headings and marginal notes are inserted for convenience only and do not affect the
construction of these Articles.
	 
	 	 	In these Articles: (a) powers of delegation shall not be restrictively construed but the widest
interpretation shall be given to them; (b) the word board in the context of the exercise of any
power contained in these Articles includes any committee consisting of one or more directors,
any director, any other officer of the Company and any local or divisional board, manager or
agent of the Company to which or, as the case may

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	 	 	be, to whom the power in question has been delegated; (c) no power of delegation shall be
limited by the existence or, except where expressly provided by the terms of delegation, the
exercise of that or any other power of delegation; and (d) except where expressly provided by
the terms of delegation, the delegation of a power shall not exclude the concurrent exercise of
that power by any other body or person who is for the time being authorised to exercise it
under these Articles or under another delegation of the power.

SHARE CAPITAL AND LIMITED LIABILITY

Limited liability

	4.	 	The liability of the members is limited to the amount, if any, unpaid on the shares
held by them.

Shares with special rights

	5.	 	Subject to the provisions of the Companies Acts and without prejudice to any rights
attached to any existing shares or class of shares, any share may be issued with such rights or
restrictions as the Company may by ordinary resolution determine or, subject to and in default
of such determination, as the board shall determine.

Uncertificated shares

	6.	 	Subject to the provisions of the Regulations, the board may permit the holding of
shares in any class of shares in uncertificated form and the transfer of title to shares in
that class by means of a relevant system and may determine that any class of shares shall cease
to be a participating security.

Not separate class of shares

	7.	 	Shares in the capital of the Company that fall within a certain class shall not form a
separate class of shares from other shares in that class because any share in that class:

	(a)	 	is held in uncertificated form; or
	 
	(b)	 	is permitted in accordance with the Regulations to become a participating security.

Exercise of Company’s entitlements in respect of uncertificated share

	8.	 	Where any class of shares is a participating security and the Company is entitled under
any provision of the Companies Acts, the Regulations or these Articles to sell, transfer or
otherwise dispose of, forfeit, redeem, re-allot, accept the surrender of or otherwise enforce a
lien over a share held in uncertificated form, the Company shall be entitled, subject to the
provisions of the Companies Acts, the Regulations, these
Articles and the facilities and requirements of the relevant system:

	(a)	 	to require the holder of that uncertificated share by notice to change that share into
certificated form within the period specified in the notice and to hold that share in
certificated form for so long as required by the Company;
	 
	(b)	 	to require the holder of that uncertificated share by notice to give any instructions
necessary to transfer title to that share by means of the relevant system within the period
specified in the notice;
	 
	(c)	 	to require the holder of that uncertificated share by notice to appoint any person to take
any step including, without limitation, the giving of any

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	 	 	instructions by means of the relevant system, necessary to transfer that share within
the period specified in the notice;

	(d)	 	to require the Operator to convert that uncertificated share into certificated form in
accordance with Regulation 32(2)(c) of the Regulations; and
	 
	(e)	 	to take any action that the board considers appropriate to achieve the sale, transfer,
disposal, forfeiture, re-allotment or surrender of that share or otherwise to enforce a lien in
respect of that share.

Allotment

	9.	 	Subject to the provisions of the Companies Acts relating to authority, pre-emption
rights or otherwise and of any resolution of the Company in general meeting passed pursuant
thereto, and, in the case of redeemable shares, the provisions of Article 10, all shares for
the time being in the capital of the Company shall be at the disposal of the board, and the
board may reclassify, allot (with or without conferring a right of renunciation), grant options
over, or otherwise dispose of them to such persons, on such terms and conditions, and at such
times as it thinks fit.

Redeemable shares

	10.	 	Subject to the provisions of the Companies Acts, and without prejudice to any rights
attached to any existing shares or class of shares, shares may be issued which are to be
redeemed or are to be liable to be redeemed at the option of the Company or the holder. The
board may determine the terms, conditions and manner of redemption of shares provided that it
does so before the shares are allotted.

Section 551 authority

	11.	 	The board has general and unconditional authority to exercise all the powers of the
Company to allot shares in the Company or to grant rights to subscribe for or to convert any
security into shares in the Company up to an aggregate nominal amount equal to the section 551
amount, for each prescribed period.

Section 561 disapplication

	12.	 	The board is empowered for each prescribed period to allot equity securities for cash
pursuant to the authority conferred by Article 11 as if section 561 of the Act did not apply to
any such allotment, provided that its power shall be limited to:
	 
	(a)	 	the allotment of equity securities in connection with a pre-emptive issue; and
	 
	(b)	 	the allotment (otherwise than pursuant to Article 12(a)) of equity securities up to an
aggregate nominal amount equal to the section 561 amount.
	 
	 	 	This Article applies in relation to a sale of shares which is an allotment of equity securities
by virtue of section 560(3) of the Act as if in this Article the words
    “pursuant to the authority conferred by Article 11” were omitted.

Allotment after expiry

	13.	 	The Company may make an offer or agreement which would or might require shares to be
allotted or rights to subscribe for or convert any security into shares to be granted, after an
authority given pursuant to Article 11 or a power given pursuant to Article 12 has expired. The
board may allot shares, or grant rights to subscribe for or convert any security into shares,
in pursuance of that offer or agreement as if the authority or power pursuant to which that
offer or agreement was made had not expired.

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Definitions

	14.	 	In this Article and Articles 11, 12, and 13:
	 
	 	 	prescribed period means any period for which the authority conferred by Article 11 is given by
ordinary or special resolution stating the section 551 amount and/or the power conferred by
Article 12 is given by special resolution stating the section 561 amount;
	 
	 	 	pre-emptive issue means an offer of equity securities to ordinary shareholders or an invitation
to ordinary shareholders to apply to subscribe for equity securities and, if in accordance with
their rights the board so determines, holders of other equity securities of any class (whether
by way of rights issue, open offer or otherwise) where the equity securities respectively
attributable to the interests of ordinary shareholders or holders of other equity securities,
if applicable are proportionate (as nearly as practicable) to the respective numbers of
ordinary shares or other equity securities, as the case may be held by them, but subject to
such exclusions or other arrangements as the board may deem necessary or expedient in relation
to fractional entitlements or any legal, regulatory or practical problems under the laws or
regulations of any territory or the requirements of any regulatory body or stock exchange;
	 
	 	 	section 551 amount means, for any prescribed period, the amount stated as such in the relevant
ordinary or special resolution; and
	 
	 	 	section 561 amount means, for any prescribed period, the amount stated as such in the
relevant special resolution.

Commissions

	15.	 	The Company may exercise all powers of paying commissions or brokerage conferred or
permitted by the Companies Acts. Subject to the provisions of the Companies Acts, any such
commission or brokerage may be satisfied by the payment of cash or by the allotment of fully or
partly paid shares or partly in one way and partly in the other.

Trusts not recognised

	16.	 	Except as required by law, no person shall be recognised by the Company as holding any
share on any trust and (except as otherwise provided by these Articles or by law) the Company
shall not be bound by or recognise any interest in any share (or in any fractional part of a
share) except the holder’s absolute right to the entirety of the share (or fractional part of
the share).

VARIATION OF RIGHTS

Method of varying rights

	17.	 	Subject to the provisions of the Companies Acts, if at any time the capital of the
Company is divided into different classes of shares, the rights attached to any class may
(unless otherwise provided by the terms of allotment of the shares of that class) be varied or
abrogated, whether or not the Company is being wound up, either:
	 
	(a)	 	with the written consent of the holders of three-quarters in nominal value of the issued
shares of the class (excluding any shares of that class held as treasury shares), which consent
shall be in hard copy form or in electronic form sent to such address (if any) for the time
being specified by or on behalf of the Company for that purpose, or in default of such
specification to the office, and may consist of several documents, each executed or
authenticated

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	 	 	in such manner as the board may approve by or on behalf of one or more holders, or a
combination of both; or

	(b)	 	with the sanction of a special resolution passed at a separate general meeting of the
holders of the shares of the class,
	 
	but not otherwise.

When rights deemed to be varied

	18.	 	For the purposes of Article 17, if at any time the capital of the Company is divided
into different classes of shares, unless otherwise expressly provided by the rights attached to
any share or class of shares, those rights shall be deemed to be varied by:
	 
	(a)	 	the reduction of the capital paid up on that share or class of shares otherwise than by a
purchase or redemption by the Company of its own shares; and
	 
	(b)	 	the allotment of another share ranking in priority for payment of a dividend or in respect
of capital or which confers on its holder voting rights more favourable than those conferred by
that share or class of shares,
	 
	but shall not be deemed to be varied by:
	 
	(c)	 	the creation or issue of another share ranking equally with, or subsequent to, that share
or class of shares or by the purchase or redemption by the Company of its own shares; or
	 
	(d)	 	the Company permitting, in accordance with the Regulations, the holding of and transfer of
title to shares of that or any other class in uncertificated form by means of a relevant
system.

SHARE CERTIFICATES

Members’ rights to certificates

	19.	 	Every member, on becoming the holder of any certificated share
(except a recognised person in respect of whom the Company is not required by law to complete and
have ready for delivery a certificate) shall be entitled, without payment, to one certificate for
all the certificated shares of each class held by him (and, on transferring a part of his holding
of certificated shares of any class, to a certificate for the balance of his holding of
certificated shares) or several certificates each for one or more of his certificated shares upon
payment for every certificate after the first of such reasonable sum as the board may from time
to time determine. Every certificate shall be executed under the seal or otherwise in accordance
with Article 174 or in such other manner as the board may approve and shall specify the number,
class and distinguishing numbers (if any) of the shares to which it relates and the amount or
respective amounts paid up on those shares. The Company shall not be bound to issue more than one
certificate for certificated shares held jointly by more than one person and delivery of a
certificate to one joint holder shall be a sufficient delivery to all of them. Shares of
different classes may not be included in the same certificate.

Renewed certificates

	20.	 	If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on
such terms (if any) as to evidence and indemnity and payment of any exceptional

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		 	out-of-pocket expenses reasonably incurred by the Company in investigating evidence and
preparing the requisite form of indemnity as the board may determine but otherwise free of
charge, and (in the case of defacement or wearing out) on delivery up of the old certificate.

LIEN

Company to have lien on shares

	21.	 	The Company shall have a first and paramount lien on every share (not being a fully paid
share) for all moneys payable to the Company (whether presently or not) in respect of that share.
The board may at any time (generally or in a particular case) waive any lien or declare any share
to be wholly or in part exempt from the provisions of this Article.
The Company’s lien
on a share shall extend to any amount including, without limitation,
any dividend payable in respect of it.

Enforcement of lien by sale

	22.	 	The Company may sell, in such manner as the board determines, any share on which the
Company has a lien if a sum in respect of which the lien exists is presently payable and is not
paid within fourteen clear days after notice has been sent to the holder of the share or to the
person entitled to it by transmission, demanding payment and stating that if the notice is not
complied with the share may be sold.

Giving effect to sale

	23.	 	To give effect to any sale mentioned in Article 22 the board may, if the share is a
certificated share, authorise any person to execute an instrument of transfer of the share sold to,
or in accordance with the directions of, the purchaser. If the share is an uncertificated share,
the board may exercise any of the Company’s powers under Article 8 to effect the sale of the share to, or in accordance with the directions of, the
purchaser. The purchaser shall not be bound to see to the application of the purchase money nor
shall his title to the share be affected by any irregularity in or invalidity of the
proceedings in relation to the sale.

Application of proceeds

	24.	 	The net proceeds of the sale mentioned in the preceding Articles, after payment of the
costs, shall be applied in or towards payment or satisfaction of so much of the sum in respect
of which the lien exists as is presently payable. Any residue shall (if the share sold is a
certificated share, on surrender to the Company for cancellation of the certificate in respect
of the share sold, and whether the share sold is a certificated or uncertificated share,
subject to a like lien for any moneys not presently payable as existed on the share before the
sale), be paid to the person entitled to the share at the date of the sale.

CALLS ON SHARES

Power to make calls

	25.	 	Subject to the terms of allotment, the board may from time to time make calls on the
members in respect of any moneys unpaid on their shares (whether in respect of nominal value or
premium). Each member shall (subject to receiving at least 14 clear days’ notice specifying when
and where payment is to be made) pay to the Company the amount called on his shares as required by the notice. A call may be required to be
paid by instalments. A call may be revoked in whole or part and the time fixed for payment of a
call may be postponed in whole or part as the board may determine. A person on whom a call is
made shall remain liable for calls made on him notwithstanding any subsequent transfer of the
shares in respect of which the call was made.

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Time when call made

	26.	 	A call shall be deemed to have been made at the time when the resolution of the board
authorising the call was passed.

Liability of joint holders

	27.	 	The joint holders of a share shall be jointly and severally liable to pay all calls in
respect of it.

Interest payable

	28.	 	If a call or any instalment of a call remains unpaid in whole or in part after it has
become due and payable the person from whom it is due and payable shall pay interest on the
amount unpaid from the day it became due and payable until it is paid. The interest shall be
paid at the rate fixed by the terms of allotment of the relevant share or in the notice of the
call or, if no rate is fixed, at such rate, not exceeding 15 per cent. per annum or, if higher,
the appropriate rate (as defined in the Act), as may be determined by the board. The board
shall be at liberty to waive payment of such interest wholly or in part in respect of any
individual member.

Deemed calls on allotment

	29.	 	An amount payable in respect of a share on allotment or at any fixed date, whether in
respect of nominal value or premium or as an instalment of a call, shall be deemed to be a call
duly made and notified and payable on the date so fixed or in accordance with the terms of the
allotment. If it is not paid the provisions of these Articles shall apply as if that amount had
become due and payable by virtue of a call duly made and notified.

Differentiation on calls

	30.	 	Subject to the terms of allotment, the board may make arrangements on the issue of
shares for a difference between the allottees or holders in the amounts and times of payment of
calls on their shares.

Payment of calls in advance

	31.	 	The board may, if it thinks fit, receive from any member all or any part of the
moneys uncalled and unpaid on any share held by him. Such payment in advance of calls shall
extinguish the liability on the share in respect of which it is made to the extent of the
payment. The Company may pay on all or any of the moneys so advanced (until they would but for
such advance become presently payable) interest at such rate as may be agreed between the board
and the member not exceeding (unless the Company by ordinary resolution otherwise directs) 15
per cent. per annum or, if higher, the appropriate rate (as defined in the Act).

FORFEITURE AND SURRENDER

Notice requiring payment of call

	32.	 	If a call or any instalment of a call remains unpaid in whole or in part after it has
become due and payable, the board may give the person from whom it is due not less than fourteen
clear days’ notice requiring payment of the amount unpaid together with any interest which may have accrued and any costs, charges and expenses
incurred by the Company by reason of such non-payment. The notice shall name the place where
payment is to be made and shall state that if the notice is not complied with the shares in respect
of which the call was made will be liable to be forfeited.

Forfeiture for non-compliance

	33.	 	If any notice issued in accordance with Article 32 is not complied with, any share in
respect of which it was sent may, at any time before the payment required by the notice has
been made, be forfeited by a resolution of the board. The forfeiture shall include all
dividends or other moneys payable in respect of the forfeited share which have not been paid
before the forfeiture. When any share has been forfeited,

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	 	 	notice of the forfeiture shall be sent to the person who was the holder of the share before the
forfeiture. Where the forfeited share is held in certificated form, an entry shall be made
promptly in the register opposite the entry of the share showing that notice has been sent,
that the share has been forfeited and the date of forfeiture. No forfeiture shall be
invalidated by any omission or neglect to send such notice or to make such entries.

Sale of forfeited shares

	34.	 	Subject to the provisions of the Companies Acts, a forfeited share shall be deemed to
belong to the Company and may be sold, re-allotted or otherwise disposed of on such terms and in
such manner as the board determines, either to the person who was the holder before the forfeiture
or to any other person. At any time before sale, re-allotment or other disposal, the forfeiture may
be cancelled on such terms as the board thinks fit. Where for the purposes of its disposal a
forfeited share held in certificated form is to be transferred to any person, the board may
authorise any person to execute an instrument of transfer of the share to that person. Where for
the purposes of its disposal a forfeited share held in uncertificated form is to be transferred to
any person, the board may exercise any of the Company’s powers
under Article 8. The Company may receive
the consideration given for the share on its disposal and may register the transferee as holder of the
share.

Liability following forfeiture

	35.	 	A person shall cease to be a member in respect of any share which has been forfeited
and shall, if the share is a certificated share, surrender the certificate for any forfeited
share to the Company for cancellation. The person shall remain liable to the Company for all
moneys which at the date of forfeiture were presently payable by him to the Company in respect
of that share with interest on that amount at the rate at which interest was payable on those
moneys before the forfeiture or, if no interest was so payable, at the rate determined by the
board, not exceeding 15 per cent. per annum or, if higher, the appropriate rate (as defined in
the Act), from the date of forfeiture until payment. The board may waive payment wholly or in
part or enforce payment without any allowance for the value of the share at the time of
forfeiture or for any consideration received on its disposal.

Surrender

	36.	 	The board may accept the surrender of any share which it is in a position to forfeit
on such terms and conditions as may be agreed. Subject to those terms and conditions, a
surrendered share shall be treated as if it had been forfeited.

Extinction of rights

	37.	 	The forfeiture of a share shall involve the extinction at the time of forfeiture of
all interest in and all claims and demands against the Company in respect of the share and all
other rights and liabilities incidental to the share as between the person whose share is
forfeited and the Company, except only those rights and liabilities expressly saved by these
Articles, or as are given or imposed in the case of past members by the Companies Acts.

Evidence of forfeiture or surrender

	38.	 	A statutory declaration by a director or the secretary that a share has been duly
forfeited or surrendered on a specified date shall be conclusive evidence of the facts stated
in it as against all persons claiming to be entitled to the share. The declaration shall
(subject if necessary to the execution of an instrument of transfer or transfer by means of the
relevant system, as the case may be) constitute a good title to the share. The person to whom
the share is disposed of shall not be bound to see to the

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	 	 	application of the purchase money, if any, nor shall his title to the share be affected by any
irregularity in, or invalidity of, the proceedings in reference to the forfeiture, surrender,
sale, re-allotment or disposal of the share.

TRANSFER OF SHARES

Form and execution of transfer of certificated shares

	39.	 	Without prejudice to any power of the Company to register as shareholder a person to
whom the right to any share has been transmitted by operation of law, the instrument of
transfer of a certificated share may be in any usual form or in any other form which the board
may approve. An instrument of transfer shall be signed by or on behalf of the transferor and,
unless the share is fully paid, by or on behalf of the transferee. An instrument of transfer
need not be under seal.

Transfers of partly paid certificated shares

	40.	 	The board may, in its absolute discretion, refuse to register the transfer of a
certificated share which is not fully paid, provided that the refusal does not prevent dealings
in shares in the Company from taking place on an open and proper basis.

Invalid transfers of certificated shares

	41.	 	The board may also refuse to register the transfer of a certificated share unless the
instrument of transfer:
	 
	(a)	 	is lodged, duly stamped (if stampable), at the office or at such other place appointed by
the board accompanied by the certificate for the share to which it relates and such other
evidence as the board may reasonably require to show the right of the transferor to make the
transfer;
	 
	(b)	 	is in respect of only one class of shares; and
	 
	(c)	 	is in favour of not more than four transferees.

Transfers by recognised persons

	42.	 	In the case of a transfer of a certificated share by a recognised person, the lodging
of a share certificate will only be necessary if and to the extent that a certificate has been
issued in respect of the share in question.

Notice of refusal to register

	43.	 	If the board refuses to register a transfer of a share in certificated form, it shall
send the transferee notice of its refusal within two months after the date on which the
instrument of transfer was lodged with the Company.

No fee payable on registration

	44.	 	No fee shall be charged for the registration of any instrument of transfer or other
document relating to or affecting the title to a share.

Retention of transfers

	45.	 	The Company shall be entitled to retain an instrument of transfer which is registered,
but an instrument of transfer which the board refuses to register shall be returned to the
person lodging it when notice of the refusal is sent.

TRANSMISSION OF SHARES

Transmission

	46.	 	If a member dies, the survivor or survivors where he was a joint holder, and his
personal representatives where he was a sole holder or the only survivor of joint holders,
shall be the only persons recognised by the Company as having any title to

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	 	 	his interest. Nothing in these Articles shall release the estate of a deceased member (whether
a sole or joint holder) from any liability in respect of any share held by him.

Elections permitted

	47.	 	A person becoming entitled to a share by transmission may, on production of such
evidence as to his entitlement as the board may properly require, elect either to become the
holder of the share or to have another person nominated by him registered as the transferee. If
he elects to become the holder he shall send notice to the Company to that effect. If he elects
to have another person registered and the share is a certificated share, he shall execute an
instrument of transfer of the share to that person. If he elects to have himself or another
person registered and the share is an uncertificated share, he shall take any action the board
may require (including, without limitation, the execution of any document and the giving of any
instruction by means of a relevant system) to enable himself or that person to be registered as
the holder of the share. All the provisions of these Articles relating to the transfer of
shares shall apply to any such notice or instrument of transfer as if it were an instrument of
transfer executed by the member and the death or bankruptcy of the member or other event giving
rise to the transmission had not occurred.

Elections required

	48.	 	The board may at any time send a notice requiring any such person to elect either to
be registered himself or to transfer the share. If the notice is not complied with within sixty
days, the board may thereafter withhold payment of all dividends or other moneys payable in
respect of the share until the requirements of the notice have been complied with.

Rights of persons entitled by transmission

	49.	 	A person becoming entitled by transmission to a share shall, on production of any
evidence as to his entitlement properly required by the board and subject to the requirements
of Article 47, have the same rights in relation to the share as he would have had if he were
the holder of the share, subject to Article 186. That person may give a discharge for all
dividends and other moneys payable in respect of the share, but he shall not, before being
registered as the holder of the share, be entitled in respect of it to receive notice of, or to
attend or vote at, any meeting of the Company or to receive notice of, or to attend or vote at,
any separate meeting of the holders of any class of shares in the capital of the Company.

ALTERATION OF SHARE CAPITAL

New shares subject to these Articles

	50.	 	All shares created by increase of the Company’s share capital, by consolidation,
division or sub-division of its share capital or the conversion of stock into paid-up shares
shall be:
	 
	(a)	 	subject to all the provisions of these Articles including, without limitation, provisions
relating to payment of calls, lien, forfeiture, transfer and transmission; and
	 
	(b)	 	unclassified, unless otherwise provided by these Articles, by the resolution creating the
shares or by the terms of allotment of the shares.

Fractions arising

	51.	 	Whenever any fractions arise as a result of a consolidation or sub-division of shares,
the board may on behalf of the members deal with the fractions as it thinks fit. In particular,
without limitation, the board may sell shares representing fractions to

Page 12

 

	 	 	which any members would otherwise become entitled to any person (including, subject to the
provisions of the Companies Acts, the Company) and distribute the net proceeds of sale in due
proportion among those members or determine that the net proceeds of sale be retained for the
benefit of the Company. Where the shares to be sold are held in certificated form, the board
may authorise any person to execute an instrument of transfer of the shares to, or in
accordance with the directions of, the purchaser. Where the shares to be sold are held in
uncertificated form, the board may do all acts and things it considers necessary or expedient
to effect the transfer of the shares to, or in accordance with the directions of, the
purchaser. The purchaser shall not be bound to see to the application of the purchase moneys
and his title to the shares shall not be affected by any irregularity in, or invalidity of, the
proceedings in relation to the sale.

GENERAL MEETINGS

Annual general meetings

	52.	 	The board shall convene and the Company shall hold a general meeting as its annual
general meeting in accordance with the requirements of the Companies Acts.

Class meetings

	53.	 	All provisions of these Articles relating to general meetings of the Company shall,
mutatis mutandis, apply to every separate general meeting of the holders of any class of shares
in the capital of the Company, except that:
	 
	(a)	 	the necessary quorum shall be two persons holding or representing by proxy at least
one-third in nominal value of the issued shares of the class (excluding any shares of that
class held as treasury shares) or, at any adjourned meeting of such holders, one holder present
in person or by proxy, whatever the amount of his holding, who shall be deemed to constitute a
meeting;
	 
	(b)	 	any holder of shares of the class present in person or by proxy may demand a poll; and
	 
	(c)	 	each holder of shares of the class shall, on a poll, have one vote in respect of every
share of the class held by him.
	 
	 	 	For the purposes of this Article, where a person is present by proxy or proxies, he is treated
only as holding the shares in respect of which those proxies are authorised to exercise voting
rights.

Convening general meetings

	54.	 	The board may call general meetings whenever and at such times and places as it shall
determine. On the requisition of members pursuant to the provisions of the Companies Acts, the
board shall promptly convene a general meeting in accordance with the requirements of the
Companies Acts. If there are insufficient directors in the United Kingdom to call a general
meeting any director of the Company may call a general meeting, but where no director is
willing or able to do so, any two members of the Company may summon a meeting for the purpose
of appointing one or more directors.

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NOTICE OF GENERAL MEETINGS

Period of notice

	55.	 	An annual general meeting shall be called by at least 21
clear days’ notice.
Subject to the provisions of the Companies Acts, all other general meetings may be called by at
least 14 clear days’ notice.

Recipients of notice

	56.	 	Subject to the provisions of the Companies Acts, to the provisions of these Articles
and to any restrictions imposed on any shares, the notice shall be sent to every member
and every director. The auditors are entitled to receive all notices of , and other
communications relating to, any general meeting which any member is entitled to receive.

Uncontactable shareholders

	57.	 	Subject to the provisions of the Act, if on two consecutive occasions notices or any
other documents have been sent by post to a member at his registered address but have been
returned undelivered, then the member shall not be entitled to receive any subsequent notice or
other documents until he has given to the Company a new registered address or has notified the
Company in writing that such notices or other documents should continue to be sent to his
registered address. For the purposes of this Article references to registered address mean, in
the case of a member whose registered address is not within an EEA State, any address within an
EEA State given by him to the Company for the service of notices or other documents. References
to other documents do not include references to dividend warrants or cheques, which the Company
shall be entitled to cease sending in accordance with the provisions of Article 192.

Contents of notice: general

	58.	 	Subject to the provisions of the Companies Acts, the notice shall specify the time,
date and place of the meeting (including, without limitation, any satellite meeting place
arranged for the purposes of Article 61, which shall be identified as such in the notice) and
the general nature of the business to be dealt with.

Contents of notice: additional requirements

	59.	 	In the case of an annual general meeting, the notice shall specify the meeting as
such. In the case of a meeting to pass a special resolution, the notice shall specify the
intention to propose the resolution as a special resolution.

Article 63 arrangements

	60.	 	The notice shall include details of any arrangements made for the purpose of Article
63 (making clear that participation in those arrangements will not amount to attendance at the
meeting to which the notice relates).

General meetings at more than one place

	61.	 	The board may resolve to enable persons entitled to attend a general meeting to do so
by simultaneous attendance and participation at a satellite meeting place anywhere in the
world. The members present in person or by proxy at satellite meeting places shall be counted
in the quorum for, and entitled to vote at, the general meeting in question, and that meeting shall be duly constituted and its proceedings valid if the chairman
of the general meeting is satisfied that adequate facilities are available throughout the
general meeting to ensure that members attending at all the meeting places are able to:
	 
	(a)	 	participate in the business for which the meeting has been convened;

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	(b)	 	hear and see all persons who speak (whether by the use of microphones, loudspeakers,
audio-visual communications equipment or otherwise) in the principal meeting place and any
satellite meeting place; and
	 
	(c)	 	be heard and seen by all other persons so present in the same way.
	 
	 	 	The chairman of the general meeting shall be present at, and the meeting shall be deemed to
take place at, the principal meeting place.

Interruption or adjournment where facilities inadequate

	62.	 	If it appears to the chairman of the general meeting that the facilities at the
principal meeting place or any satellite meeting place have become inadequate for the purposes
referred to in Article 61, then the chairman may, without the consent of the meeting, interrupt
or adjourn the general meeting. All business conducted at that general meeting up to the time
of that adjournment shall be valid. The provisions of Article 74 shall apply to that
adjournment.

Other arrangements for viewing and hearing proceedings

	63.	 	The board may make arrangements for persons entitled to attend a general meeting or an
adjourned general meeting to be able to view and hear the proceedings of the general meeting or
adjourned general meeting; and to speak at the meeting (whether by the use of microphones,
loudspeakers, audio-visual communications equipment or otherwise) by attending at a venue
anywhere in the world not being a satellite meeting place. Those attending at any such venue
shall not be regarded as present at the general meeting or adjourned general meeting and shall
not be entitled to vote at the meeting at or from that venue. The inability for any reason of
any member present in person or by proxy at such a venue to view or hear all or any of the
proceedings of the meeting or to speak at the meeting shall not in any way affect the validity
of the proceedings of the meeting.

Controlling level of attendance

	64.	 	The board may from time to time make any arrangements for controlling the level of
attendance at any venue for which arrangements have been made pursuant to Article 63
(including, without limitation, the issue of tickets or the imposition of some other
means of selection) it in its absolute discretion considers appropriate, and may from time to
time change those arrangements. If a member, pursuant to those arrangements, is not entitled to
attend in person or by proxy at a particular venue, he shall be entitled to attend in person or
by proxy at any other venue for which arrangements have been made pursuant to Article 63. The
entitlement of any member to be present at such venue in person or by proxy shall be subject to
any such arrangement then in force and stated by the notice of meeting or adjourned meeting to
apply to the meeting.

Change in place and/or time of meeting

	65.	 	If, after the sending of notice of a general meeting but before the meeting is held,
or after the adjournment of a general meeting but before the adjourned meeting is held (whether
or not notice of the adjourned meeting is required), the board decides that it is impracticable
or unreasonable, for a reason beyond its control, to hold the meeting at the declared place (or
any of the declared places, in the case of a meeting to which Article 61 applies) and/or time,
it may change the place (or any of the places, in the case of a meeting to which Article 61
applies) and/or postpone the time at which the meeting is to be held. If such a decision is
made, the board may then change the place (or any of the places, in the case of a meeting to
which Article 61 applies)

Page 15

 

	 	 	and/or postpone the time again if it decides that it is reasonable to do so. In either
case:

	 	(a)	 	no new notice of the meeting need be sent, but the board shall, if practicable, advertise
the date, time and place of the meeting in at least two newspapers having a national
circulation and shall make arrangements for notices of the change of place and/or postponement
to appear at the original place and/or at the original time; and
	 
	 	(b)	 	a proxy appointment in relation to the meeting may, if by means of a document in hard copy
form, be delivered to the office or to such other place within the United Kingdom as may be
specified by or on behalf of the Company in accordance with Article 101(a) or, if in electronic
form, be received at the address (if any) specified by or on behalf of the Company in
accordance with Article 101(b), at any time not less than 48 hours before the postponed time
appointed for holding the meeting provided that the board may specify, in any case, that in
calculating the period of 48 hours, no account shall be taken of any part of a day that is not
a working day.

Meaning of participate

	66.	 	For the purposes of Articles 61 to 65, the right of a member to participate in the
business of any general meeting shall include without limitation the right to speak, vote on a
show of hands, vote on a poll, be represented by a proxy and have access to all documents which
are required by the Companies Acts or these Articles to be made available at the meeting.

Accidental omission to send notice etc.

	67.	 	The accidental omission to send a notice of a meeting or resolution, or to send any
notification where required by the Companies Acts or these Articles in relation to the
publication of a notice of meeting on a website, or to send a form of proxy where required by
the Companies Acts or these Articles, to any person entitled to receive it, or the non-receipt
for any reason of any such notice, resolution or notification or form of proxy by that person,
whether or not the Company is aware of such omission or non-receipt, shall not invalidate the
proceedings at that meeting.

Security

	68.	 	The board and, at any general meeting, the chairman may make any arrangement and
impose any requirement or restriction it or he considers appropriate to ensure the security of
a general meeting including, without limitation, requirements for evidence of identity to be
produced by those attending the meeting, the searching of their personal property and the
restriction of items that may be taken into the meeting place. The board and, at any general
meeting, the chairman are entitled to refuse entry to a person who refuses to comply with these
arrangements, requirements or restrictions.

PROCEEDINGS AT GENERAL MEETINGS

Quorum

	69.	 	No business shall be dealt with at any general meeting unless a quorum is present, but
the absence of a quorum shall not preclude the choice or appointment of a chairman, which shall
not be treated as part of the business of the meeting. Save as otherwise provided by these
Articles, two qualifying persons present at a meeting and entitled to vote on the business to
be dealt with are a quorum, unless:

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	 	(a)	 	each is a qualifying person only because he is authorised under the Companies Acts to act
as a representative of a corporation in relation to the meeting, and they are representatives
of the same corporation; or
	 
	 	(b)	 	each is a qualifying person only because he is appointed as proxy of a member in relation
to the meeting, and they are proxies of the same member.

	 	 	For the purposes of this Article a “qualifying
person” means: (i) an individual who is a member of the Company; (ii) a
person authorised under the Companies Acts to act as a representative of the corporation in
relation to the meeting; or (iii) a person appointed as proxy of a member in relation to the
meeting.

If quorum not present

	70.	 	If such a quorum is not present within five minutes (or such longer time not exceeding
thirty minutes as the chairman of the meeting may decide to wait) from the time appointed for
the meeting, or if during a meeting such a quorum ceases to be present, the meeting, if
convened on the requisition of members, shall be dissolved, and in any other case shall stand
adjourned to such time and place as the chairman of the meeting may, subject to the provisions
of the Companies Acts, determine. If at the adjourned meeting a quorum is not present within
fifteen minutes after the time appointed for holding the meeting, the meeting shall be
dissolved.

Chairman

	71.	 	The chairman, if any, of the board or, in his absence, any deputy chairman of the
Company or, in his absence, some other director nominated by the board, shall preside as
chairman of the meeting. If neither the chairman, deputy chairman nor such other director (if
any) is present within five minutes after the time appointed for holding the meeting or is not
willing to act as chairman, the directors present shall elect one of their number to be
chairman. If there is only one director present and willing to act, he shall be chairman. If no
director is willing to act as chairman, or if no director is present within five minutes after
the time appointed for holding the meeting, the members present in person or by proxy and
entitled to vote shall choose a member or a proxy of a member or a person authorised to act as
a representative of a corporation in relation to the meeting to be chairman.

Directors entitled to speak

	72.	 	A director shall, notwithstanding that he is not a member, be entitled to attend and
speak at any general meeting and at any separate meeting of the holders of any class of shares
in the capital of the Company.

Adjournment: chairman’s powers

	73.	 	The chairman may, with the consent of a meeting at which a quorum is present (and shall if
so directed by the meeting), adjourn the meeting from time to time and from place to place. No
business shall be dealt with at an adjourned meeting other than business which might properly have
been dealt with at the meeting had the adjournment not taken place.
In addition (and without prejudice to chairman’s power to adjourn a
meeting conferred by Article 62), the chairman may adjourn the meeting to another time and place
without such consent if it appears to him that:

	 	(a)	 	it is likely to be impracticable to hold or continue that meeting because of the number of
members wishing to attend who are not present; or
	 
	 	(b)	 	the conduct of persons attending the meeting prevents or is likely to prevent the orderly
continuation of the business of the meeting; or

Page 17

 

	 	(c)	 	an adjournment is otherwise necessary so that the business of the meeting may be properly
conducted.

Adjournment: procedures

	74.	 	Any such adjournment may, subject to the provisions of the Companies Acts, be for such
time and to such other place (or, in the case of a meeting held at a principal meeting place
and a satellite meeting place, such other places) as the chairman may, in his absolute
discretion determine, notwithstanding that by reason of such adjournment some members may be
unable to be present at the adjourned meeting. Any such member may nevertheless appoint a proxy
for the adjourned meeting either in accordance with Article 101 or by means of a document in
hard copy form which, if delivered at the meeting which is adjourned to the chairman or the
secretary or any director, shall be valid even though it is given at less notice than would
otherwise be required by Article 101(a). When a meeting is adjourned for 30 days or more or for
an indefinite period, notice shall be sent at least seven clear days before the date of the
adjourned meeting specifying the time and place (or places, in the case of a meeting to which
Article 61 applies) of the adjourned meeting and the general nature of the business to be
transacted. Otherwise it shall not be necessary to send any notice of an adjournment or of the
business to be dealt with at an adjourned meeting.

Amendments to resolutions

	75.	 	If an amendment is proposed to any resolution under consideration but is in good faith
ruled out of order by the chairman, the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling. With the consent of the chairman,
an amendment may be withdrawn by its proposer before it is voted on. No amendment to a
resolution duly proposed as a special resolution may be considered or voted on (other than a
mere clerical amendment to correct a patent error). No amendment to a resolution duly proposed
as an ordinary resolution may be considered or voted on (other than a mere clerical amendment
to correct a patent error) unless either:

	 	(a)	 	at least 48 hours before the time appointed for holding the meeting or adjourned meeting at
which the ordinary resolution is to be considered (which, if the board so specifies, shall be
calculated taking no account of any part of a day that is not a working day), notice of the
terms of the amendment and the intention to move it has been delivered in hard copy form to the
office or to such other place as may be specified by or on behalf of the Company for that
purpose, or received in electronic form at such address (if any) for the time being specified
by or on behalf of the Company for that purpose, or
	 
	 	(b)	 	the chairman in his absolute discretion decides that the amendment may be considered and
voted on.

Methods of voting

	76.	 	A resolution put to the vote of a general meeting shall be decided on a show of hands
unless before, or on the declaration of the result of, a vote on the show of hands, or on the
withdrawal of any other demand for a poll, a poll is duly demanded. Subject to the provisions
of the Companies Acts, a poll may be demanded by:

	 	(a)	 	the chairman of the meeting; or

Page 18

 

	 	(b)	 	(except on the election of the chairman of the meeting or on a question of adjournment) at
least five members present in person or by proxy having the right to vote on the resolution; or
	 
	 	(c)	 	any member or members present in person or by proxy representing not less than 10% of the
total voting rights of all the members having the right to vote on the resolution (excluding
any voting rights attached to any shares held as treasury shares); or
	 
	 	(d)	 	any member or members present in person or by proxy holding shares conferring a right to
vote on the resolution, being shares on which an aggregate sum has been paid up equal to not
less than 10% of the total sum paid up on all the shares conferring that right (excluding any
shares conferring a right to vote on the resolution which are held as treasury shares).

	 	 	The appointment of a proxy to vote on a matter at a meeting authorises the proxy to demand, or
join in demanding, a poll on that matter. In applying the provisions of this Article, a demand
by a proxy counts: (i) for the purposes of paragraph (b) of this Article, as a demand by the
member; (ii) for the purposes of paragraph (c) of this Article, as a demand by a member
representing the voting rights that the proxy is authorised to exercise; and (iii) for the
purposes of paragraph (d) of this Article, as a
demand by a member holding the shares to which those rights are attached.

Declaration of result

	77.	 	Unless a poll is duly demanded (and the demand is not withdrawn before the poll is
taken) a declaration by the chairman that a resolution has been carried or carried unanimously,
or by a particular majority, or lost, or not carried by a particular majority shall be
conclusive evidence of the fact without proof of the number or proportion of the votes recorded
in favour of or against the resolution.

Withdrawal of demand for poll

	78.	 	The demand for a poll may be withdrawn before the poll is taken, but only with the
consent of the chairman. A demand so withdrawn shall not be taken to have invalidated the
result of a show of hands declared before the demand was made. If the demand for a poll is
withdrawn, the chairman or any other member entitled may demand a poll.

Conduct of poll

	79.	 	Subject to Article 80 a poll shall be taken as the chairman directs and he may, and
shall if required by the meeting, appoint scrutineers (who need not be members) and fix a time
and place for declaring the result of the poll. The result of the poll shall be deemed to be
the resolution of the meeting at which the poll was demanded.

When poll to be taken

	80.	 	A poll demanded on the election of a chairman or on a question of adjournment shall be
taken immediately. A poll demanded on any other question shall be taken either at the meeting
or at such time and place as the chairman directs not being more than thirty days after the
poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which the poll was demanded. If a poll
is demanded before the declaration of the result of a show of hands and the demand is duly
withdrawn, the meeting shall continue as if the demand had not been made.

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Notice of poll

	81.	 	No notice need be sent of a poll not taken at the meeting at which it is demanded if the
time and place at which it is to be taken are announced at the meeting. In any other case at
least seven clear days’ notice shall be sent before the taking of the poll specifying the time and place at which the poll is to be
taken.

Effectiveness of special resolutions

	82.	 	Where for any purpose an ordinary resolution of the Company is required, a special
resolution shall also be effective.

VOTES OF MEMBERS

Right to vote on a show of hands

	83.	 	Subject to any rights or restrictions attached to any shares, on a vote on a
resolution on a show of hands:

	 	(a)	 	every member who is present in person shall have one vote;
	 
	 	(b)	 	subject to paragraph (c) of this Article, every proxy present who has been duly appointed
by one or more members entitled to vote on the resolution has one vote;
	 
	 	(c)	 	a proxy has one vote for and one vote against the resolution if:

	 	(i)	 	the proxy has been duly appointed by more than one member entitled to vote on
the resolution, and
	 
	 	(ii)	 	the proxy has been instructed by one or more of those members to vote for the
resolution and by one or more other of those members to vote against it.

Right to vote on a poll

	84.	 	Subject to any rights or restrictions attached to any shares, on a vote on a
resolution on a poll every member present in person or by proxy shall have one vote for every
share of which he is the holder.

Votes of joint holders

	85.	 	In the case of joint holders of a share, the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes of the other
joint holders. For this purpose seniority shall be determined by the order in which the names
of the holders stand in the register.

Member under incapacity

	86.	 	A member in respect of whom an order has been made by a court or official having
jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder
may vote, whether on a show of hands or on a poll, by his receiver, curator bonis or other
person authorised for that purpose appointed by that court or official. That receiver, curator
bonis or other person may, on a show of hands or on a poll, vote by proxy. The right to vote
shall be exercisable only if evidence satisfactory to the board of the authority of the person
claiming to exercise the right to vote has been delivered to the office, or another place
specified in accordance with these
Articles for the delivery of proxy appointments, not less than 48 hours before the time
appointed for holding the meeting or adjourned meeting at which the right to vote is to be
exercised provided that the Company may specify, in any case, that in calculating the period of
48 hours, no account shall be taken of any part of a day that is not a working day.

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Calls in arrears

	87.	 	No member shall be entitled to vote at any general meeting or at any separate meeting
of the holders of any class of shares in the capital of the Company, either in person or by
proxy, in respect of any share held by him unless all moneys presently payable by him in
respect of that share have been paid

Section 793 of the Act: restrictions if in default

	88.	 	If at any time the board is satisfied that any member, or any other person appearing
to be interested in shares held by such member, has been duly served with a notice under
section 793 of the Act (a section 793 notice) and is in default for the prescribed period in
supplying to the Company the information thereby required, or, in purported compliance with
such a notice, has made a statement which is false or inadequate in a material particular, then
the board may, in its absolute discretion at any time thereafter by notice (a direction notice)
to such member direct that:

	 	(a)	 	in respect of the shares in relation to which the default occurred (the default shares,
which expression includes any shares issued after the date of the section 793 notice in respect
of those shares) the member shall not be entitled to attend or vote either personally or by
proxy at a general meeting or at a separate meeting of the holders of that class of shares or
on a poll; and
	 
	 	(b)	 	where the default shares represent at least 1/4 of one per cent. in nominal value of the
issued shares of their class (excluding any shares of that class held as treasury shares), the
direction notice may additionally direct that in respect of the default shares:

	 	(i)	 	no payment shall be made by way of dividend and no share shall be allotted
pursuant to Article 184;
	 
	 	(ii)	 	no transfer of any default share shall be registered unless:

	 	(A)	 	the member is not himself in default as regards supplying the information
requested and the transfer when presented for registration is accompanied by a
certificate by the member in such form as the board may in its absolute
discretion require to the effect that after due and careful enquiry the member
is satisfied that no person in default as regards supplying such information is
interested in any of the shares the subject of the transfer; or
	 
	 	(B)	 	the transfer is an approved transfer; or
	 
	 	(C)	 	registration of the transfer is required by the Regulations.

Copy of notice to interested persons

	89.	 	The Company shall send the direction notice to each other person appearing to be
interested in the default shares, but the failure or omission by the Company to do so shall not
invalidate such notice.

When restrictions cease to have effect

	90.	 	Any direction notice shall cease to have effect. not more than seven days after the
earlier of receipt by the Company of:

Page 21

 

	 	(a)	 	a notice of an approved transfer, but only in relation to the shares transferred; or
	 
	 	(b)	 	all the information required by the relevant section 793 notice, in a form satisfactory to
the board.

Board may cancel restrictions

	91.	 	The board may at any time send a notice cancelling a direction notice.

Conversion of uncertificated shares

	92.	 	The Company may exercise any of its powers under Article 8 in respect of any default
share that is held in uncertificated form.

Supplementary provisions

	93.	 	For the purposes of this Article and Articles 88, 89, 90, 91 and 92:

	 	(a)	 	a person shall be treated as appearing to be interested in any shares if the member holding
such shares has sent to the Company a notification under section 793 of the Act which either
(i) names such person as being so interested or (ii) fails to establish the identities of all
those interested in the shares, and (after taking into account the said notification and any
other relevant section 793 notification) the Company knows or has reasonable cause to believe
that the person in question is or may be interested in the shares;
	 
	 	(b)	 	the prescribed period is 14 days from the date of service of the section 793 notice; and
	 
	 	(c)	 	a transfer of shares is an approved transfer if:

	 	(i)	 	it is a transfer of shares pursuant to an acceptance of a takeover offer (within
the meaning of section 974 of the Act); or
	 
	 	(ii)	 	the board is satisfied that the transfer is made pursuant to a sale of the whole
of the beneficial ownership of the shares the subject of the transfer to a party
unconnected with the member and with any other person appearing to be interested in
the shares; or
	 
	 	(iii)	 	the transfer results from a sale made through a recognised investment exchange
as defined in the Financial Services and Markets Act 2000 or any other stock exchange
outside the United Kingdom on which the
Company’s shares are normally traded.

Section 794 of the Act

	94.	 	Nothing contained in Article 88, 89, 90, 91, 92 or 93 limits the power of the Company
under section 794 of the Act.

Errors in voting

	95.	 	If any votes are counted in any meeting which ought not to have been counted, or might
have been rejected, the error shall not vitiate the result of the voting unless it is pointed
out at the same meeting, or at any adjournment thereof, and it is in the opinion of the
chairman of sufficient magnitude to vitiate the result of the voting.

Objection to voting

	96.	 	No objection shall be raised to the qualification of any voter except at the meeting
or adjourned meeting or poll at which the vote objected to is tendered. Every vote not
disallowed at such meeting shall be valid and every vote not counted which

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	 	 	ought to have been counted shall be disregarded. Any objection made in due time shall be
referred to the chairman whose decision shall be final and conclusive.

Voting: additional provisions

	97.	 	On a poll a member entitled to more than one vote need not, if he votes, use all his
votes or cast all the votes he uses in the same way.

PROXIES AND CORPORATE REPRESENTATIVES

Appointment of proxy: form

	98.	 	The appointment of a proxy shall be made in writing and shall be in any usual
form or in any other form which the board may approve. Subject thereto, the appointment of a
proxy may be:

	 	(a)	 	in hard copy form; or
	 
	 	(b)	 	in electronic form, to the electronic address provided by the Company for this purpose.

Execution of proxy

	99.	 	The appointment of a proxy, whether made in hard copy form or in electronic form,
shall be executed in such manner as may be approved by or on behalf of the Company from time to
time. Subject thereto, the appointment of a proxy shall be executed by the appointer or any
person duly authorised by the appointer or, if the appointer is a corporation, executed by a
duly authorised person or under its common seal or in any other manner authorised by its
constitution.

Proxies: other provisions

	100.	 	The board may, if it thinks fit, but subject to the provisions of the Companies Acts,
at the Company’s expense send hard copy forms of proxy for use at the meeting and issue invitations in
electronic form to appoint a proxy in relation to the meeting in such form as may be approved by
the board. The appointment of a proxy shall not preclude a member from attending and voting in
person at the meeting or poll concerned. A member may appoint more than one proxy to attend on
the same occasion, provided that each such proxy is appointed to exercise the rights attached to
a different share or shares held by that member.

Delivery/receipt of proxy appointment

	101.	 	Without prejudice to Article 65(b) or to the second sentence of Article 74, the
appointment of a proxy shall:

	 	(a)	 	if in hard copy form, be delivered by hand or by post to the office or such other place
within the United Kingdom as may be specified by or on behalf of the Company for that purpose:

	 	(i)	 	in the notice convening the meeting; or
	 
	 	(ii)	 	in any form of proxy sent by or on behalf of the Company in relation to the
meeting;

	 	 	 	not less than 48 hours before the time appointed for holding the meeting or adjourned
meeting (or any postponed time appointed for holding the meeting pursuant to Article
65) at which the person named in the appointment proposes to vote; or

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	 	(b)	 	if in electronic form, be received at any address to which the appointment of a proxy may
be sent by electronic means pursuant to a provision of the Companies Acts or to any other
address specified by or on behalf of the Company for the purpose of receiving the appointment
of a proxy in electronic form:

	 	(i)	 	in the notice convening the meeting; or
	 
	 	(ii)	 	in any form of proxy sent by or on behalf of the Company in relation to the
meeting; or
	 
	 	(iii)	 	in any invitation to appoint a proxy issued by the Company in relation to the
meeting; or
	 
	 	(iv)	 	on a website that is maintained by or on behalf of the Company and identifies
the Company,

	 	 	 	not less than 48 hours before the time appointed for holding the meeting or adjourned
meeting (or any postponed time appointed for holding the meeting pursuant to Article
65) at which the person named in the appointment proposes to vote; or
	 
	 	(c)	 	in either case, where a poll is taken more than 48 hours after it is demanded, be delivered
or received as aforesaid after the poll has been demanded and not less than 24 hours before the
time appointed for the taking of the poll; or
	 
	 	(d)	 	if in hard copy form, where a poll is not taken forthwith but is taken not more than 48
hours after it was demanded, be delivered at the meeting at which the poll was demanded to the
chairman or to the secretary or to any director.

	 	 	In calculating the periods mentioned in this Article, the board may specify, in any case, that
no account shall be taken of any part of a day that is not a working day.

Authentication of proxy appointment not made by holder

	102.	 	Subject to the provisions of the Companies Acts, where the appointment of a proxy is
expressed to have been or purports to have been made, sent or supplied by a person on behalf of
the holder of a share:

	 	(a)	 	the Company may treat the appointment as sufficient evidence of the authority of that
person to make, send or supply the appointment on behalf of that holder; and
	 
	 	(b)	 	that holder shall, if requested by or on behalf of the Company at any time, send or procure
the sending of any reasonable evidence of the authority under which the appointment has been
made, sent or supplied (which may include a copy of such authority certified notarially or in
some other way approved by the board), to such address and by such time as may be specified in
the request and, if the request is not
complied with in any respect, the appointment may be treated as invalid.

Page 24

 

Validity of proxy appointment

	103.	 	A proxy appointment which is not delivered or received in accordance with Article 101
shall be invalid. When two or more valid proxy appointments are delivered or received in
respect of the same share for use at the same meeting, the one that was last delivered or
received shall be treated as replacing or revoking the others as regards that share, provided
that if the Company determines that it has insufficient evidence to decide whether or not a
proxy appointment is in respect of the same share, it shall be entitled to determine which
proxy appointment (if any) is to be treated as valid. Subject to the Companies Acts, the
Company may determine at its discretion when a proxy appointment shall be treated as delivered
or received for the purposes of these Articles.

Rights of proxy

	104.	 	A proxy appointment shall be deemed to entitle the proxy to exercise all or any of the
appointing member’s rights to attend and to speak and vote at a meeting of the Company in respect of the shares to which the proxy appointment
relates. The proxy appointment shall, unless it provides to the contrary, be valid for any
adjournment of the meeting as well as for the meeting to which it relates.

Vote by proxy

	105.	 	The Company shall not be required to check that a proxy or corporate representative
votes in accordance with any instructions given by the member by whom he is appointed. Any
failure to vote as instructed shall not invalidate the proceedings on the resolution.

Corporate representatives

	106.	 	Any corporation which is a member of the Company (in this Article the grantor) may,
by resolution of its directors or other governing body, authorise such person or persons as it
thinks fit to act as its representative or representatives at any meeting of the Company or at
any separate meeting of the holders of any class of shares. A director, the secretary or other
person authorised for the purpose by the secretary may require all or any of such persons to
produce a certified copy of the resolution of authorisation before permitting him to exercise
his powers. Such person is entitled to exercise the same powers on behalf of the grantor as
the grantor could exercise if it were an individual member of the Company. Where the grantor
authorises more than one person:

	 	(a)	 	on a vote on a resolution on a show of hands at a meeting of the Company, each authorised
person has the same voting rights as the grantor would be entitled to; and
	 
	 	(b)	 	where paragraph (a) of this Article does not apply and more than one authorised
person purport to exercise a power in respect of the same shares:

	 	(i)	 	if they purport to exercise the power in the same way as each other, the power
is treated as exercised in that way; and
	 
	 	(ii)	 	if they do not purport to exercise the power in the same way as each other, the
power is treated as not exercised.

Revocation of authority

	107.	 	The termination of the authority of a person to act as a proxy or duly authorised
representative of a corporation does not affect:

	 	(a)	 	whether he counts in deciding whether there is a quorum at a meeting;

Page 25

 

	 	(b)	 	the validity of anything he does as chairman of a meeting;
	 
	 	(c)	 	the validity of a poll demanded by him at a meeting; or
	 
	 	(d)	 	the validity of a vote given by that person,

	 	 	unless notice of the termination was either delivered or received as mentioned in the following
sentence at least three hours before the start of the relevant meeting or adjourned meeting or
(in the case of a poll taken otherwise than on the same day as the meeting or adjourned
meeting) the time appointed for taking the poll. Such notice of termination shall be either by
means of a document in hard copy form delivered to the office or to such other place within the
United Kingdom as may be specified by or on behalf of the Company in accordance with Article
101(a) or in electronic form received at the address specified by or on behalf of the Company
in accordance with Article 101(b), regardless of whether any relevant proxy appointment was
effected in hard copy form or in electronic form.

NUMBER OF DIRECTORS

Limits on number of directors

	108.	 	Unless otherwise determined by ordinary resolution, the number of directors (other
than alternate directors) shall be not less than five nor more than twenty in number.

APPOINTMENT AND RETIREMENT OF DIRECTORS

Number of directors to retire

	109.	 	At every annual general meeting one-third of the directors or, if their number is not
three or a multiple of three, the number nearest to one-third shall retire from office, but:

	 	(a)	 	if any director has at the start of the annual general meeting been in office for three
years or more since his last appointment or re-appointment, he shall retire at that annual
general meeting; and
	 
	 	(b)	 	if there is only one director who is subject to retirement by rotation, he shall retire at
that annual general meeting.

Which directors to retire

	110.	 	Subject to the provisions of the Companies Acts and these Articles, the directors to
retire by rotation shall be, first, those who wish to retire and not be re-appointed to office
and, second, those who have been longest in office since their last appointment or
re-appointment. As between persons who became or were last re-appointed directors on the same
day those to retire shall (unless they otherwise agree among themselves) be determined by lot.
The directors to retire on each occasion (both as to number and identity) shall be determined
by the composition of the board at the date of the notice convening the annual general meeting.
No director shall be required to retire or be relieved from retiring or be retired by reason
of any change in the number or identity of the directors after the date of the notice but
before the close of the meeting.

Page 26

 

When director deemed to be re-appointed

	111.	 	If the Company does not fill the vacancy, at the meeting at which a director retires
by rotation or otherwise, the retiring director shall, if willing to act, be deemed to have
been re-appointed unless at the meeting it is resolved not to fill the vacancy or unless a
resolution for the re-appointment of the director is put to the meeting and lost.

Eligibility for election

	112.	 	No person other than a director retiring by rotation shall be appointed a director at
any general meeting unless:

	 	(a)	 	he is recommended by the board; or
	 
	 	(b)	 	not less than ten nor more than 42 clear days before the date appointed for the meeting,
notice executed by a member qualified to vote at the meeting (not being the person to be
proposed) has been received by the Company of the intention to propose that person for
appointment stating the particulars which would, if he were so appointed, be required to be included in the Company’s register of directors,
together with notice by that person of his willingness to be appointed.

Separate resolutions on appointment

	113.	 	Except as otherwise authorised by the Companies Acts, the appointment of any
person proposed as a director shall be effected by a separate resolution.

Additional powers of the Company

	114.	 	Subject as aforesaid, the Company may by ordinary resolution appoint a person who is
willing to act to be a director either to fill a vacancy or as an additional director and may
also determine the rotation in which any additional directors are to retire. The appointment of
a person to fill a vacancy or as an additional director shall take effect from the end of the
meeting.

Appointment by board

	115.	 	The board may appoint a person who is willing to act to be a director, either to fill
a vacancy or as an additional director and in either case whether or not for a fixed term,
provided that the appointment does not cause the number of directors to exceed the number, if
any, fixed by or in accordance with these Articles as the maximum number of directors.
Irrespective of the terms of his appointment, a director so appointed shall hold office only
until the next following annual general meeting and shall not be taken into account in
determining the directors who are to retire by rotation at the meeting. If not re-appointed at
such annual general meeting, he shall vacate office at its conclusion.

Position of retiring directors

	116.	 	A director who retires at an annual general meeting may, if willing to act, be
re-appointed. If he is not re-appointed, he shall retain office until the meeting appoints
someone in his place, or if it does not do so, until the end of the meeting.

No share qualification

	117.	 	A director shall not be required to hold any shares in the capital of the Company by
way of qualification.

ALTERNATE DIRECTORS

Power to appoint alternates

	118.	 	Any director (other than an alternate director) may appoint any other director, or
any other person approved by resolution of the board and willing to act, to be an

Page 27

 

	 	 	alternate director and may remove from office an alternate director so appointed by him.

Alternates entitled to receive notice

	119.	 	An alternate director shall be entitled to receive notice of all meetings of the
board and of all meetings of committees of the board of which his appointer is a member, to
attend and vote at any such meeting at which his appointer is not personally present, and
generally to perform all the functions of his appointer (except as regards power to appoint an
alternate) as a director in his absence. It shall not be necessary to send notice of such a
meeting to an alternate director who is absent from the United Kingdom.

Alternates representing more than one director

	120.	 	A director or any other person may act as alternate director to represent more than
one director, and an alternate director shall be entitled at meetings of the board or any
committee of the board to one vote for every director whom he represents (and who is not
present) in addition to his own vote (if any) as a director, but he shall count as only one for
the purpose of determining whether a quorum is present.

Expenses and remuneration of alternates

	121.	 	An alternate director may be repaid by the Company such expenses as might properly
have been repaid to him if he had been a director but shall not in respect of his services as
an alternate director be entitled to receive any remuneration from the Company except such part
(if any) of the remuneration otherwise payable to his appointer as such appointer may by notice
to the Company from time to time direct. An alternate director shall be entitled to be
indemnified by the Company to the same extent as if he were a director.

Termination of appointment

	122.	 	An alternate director shall cease to be an alternate director:

	 	(a)	 	if his appointer ceases to be a director; but, if a director retires by rotation or
otherwise but is re-appointed or deemed to have been re-appointed at the meeting at which he
retires, any appointment of an alternate director made by him which was in force immediately
prior to his retirement shall continue after his re-appointment; or
	 
	 	(b)	 	on the happening of any event which, if he were a director, would cause him to vacate his
office as director; or
	 
	 	(c)	 	if he resigns his office by notice to the Company.

Method of appointment and revocation

	123.	 	Any appointment or removal of an alternate director shall be by notice to the Company
by the director making or revoking the appointment and shall take effect in accordance with the
terms of the notice (subject to any approval required by Article 118) on receipt of such notice
by the Company which shall be in hard copy form or in electronic form sent to such address (if
any) for the time being specified by or on behalf of the Company for that purpose.

Alternate not an agent of appointer

	124.	 	Save as otherwise expressly provided in these Articles, an alternate director shall
be deemed for all purposes to be a director and accordingly, except where the context otherwise
requires, a reference to a director shall be deemed to include a reference to an alternate
director. An alternate director shall alone be responsible for

Page 28

 

	 	 	his own acts and defaults and he shall not be deemed to be the agent of the director appointing
him.

POWERS OF THE BOARD

Business to be managed by board

	125.	 	Subject to the provisions of the Companies Acts and these Articles and to any
directions given by special resolution, the business of the Company shall be managed by the
board which may exercise all the powers of the Company including, without limitation, the power
to dispose of all or any part of the undertaking of the Company. No alteration of the Articles
and no such direction shall invalidate any prior act of the board which would have been valid
if that alteration had not been made or that direction had not been given. The powers given by
this Article shall not be limited by any special power given to the board by these Articles. A
meeting of the board at which a quorum is present may exercise all powers exercisable by the
board.

Exercise by Company of voting rights

	126.	 	The board may exercise the voting power conferred by the shares in any body corporate
held or owned by the Company in such manner in all respects as it thinks fit (including,
without limitation, the exercise thereof in favour of any resolution appointing its members or
any of them directors of such body corporate, or voting or providing for the payment of
remuneration to the directors of such body corporate).

DELEGATION OF POWERS OF THE BOARD

Committees of the board

	127.	 	The board may delegate any of its powers to any committee consisting of one or more
directors. The board may also delegate to any director holding any executive office such of its
powers as the board considers desirable to be exercised by him. Any such delegation shall, in
the absence of express provision to the contrary in the terms of delegation, be deemed to
include authority to sub-delegate to one or more directors (whether or not acting as a
committee) or to any employee or agent of the Company all or any of the powers delegated and
may be made subject to such conditions as the board may specify, and may be revoked or altered.
The board may co-opt on to any such committee persons other than directors, who may enjoy
voting rights in the committee. The number of co-opted members shall be not more than one-half
of the total membership of the committee.
	 
	 	 	Subject to any conditions imposed by the board, the proceedings of a committee with two or more
members shall be governed by these Articles regulating the proceedings of directors so far as
they are capable of applying.

Local boards, etc.

	128.	 	The board may establish local or divisional boards or agencies for managing any of
the affairs of the Company, either in the United Kingdom or elsewhere, and may appoint any
persons to be members of the local or divisional boards, or any managers or agents, and may fix
their remuneration. The board may delegate to any local or divisional board, manager or agent
any of the powers, authorities and discretions vested in or exercisable by the board, with
power to sub-delegate, and may authorise the members of any local or divisional board, or any
of them, to fill any vacancies and to act notwithstanding vacancies. Any appointment or
delegation made pursuant to this Article may be made on such terms and subject to such
conditions as the board may decide. The board may remove any person so appointed and may

Page 29

 

	 	 	revoke or vary the delegation but no person dealing in good faith and without notice of the
revocation or variation shall be affected by it.

Agents

	129.	 	The board may, by power of attorney or otherwise, appoint any person to be the agent
of the Company for such purposes, with such powers, authorities and discretions (not exceeding
those vested in the board) and on such conditions as the board determines, including, without
limitation, authority for the agent to delegate all or any of his powers, authorities and
discretions, and may revoke or vary such delegation.

Offices including title

	130.	 	The board may appoint any person to any office or employment having a designation or
title including the word “director” or attach to any existing office or employment with
the Company such a designation or
title and may terminate any such appointment or the use of any such
designation or title. The inclusion of the word
“director” in the designation or title of any such office or employment shall not imply that the holder is a director of the
Company, and the holder shall not thereby be empowered in any respect to act as, or be deemed to
be, a director of the Company for any of the purposes of these Articles.

BORROWING POWERS

Power to borrow

	131.	 	The board may exercise all the powers of the Company to borrow money, to guarantee,
to indemnify, to mortgage or charge its undertaking, property, assets (present and future) and
uncalled capital, and to issue debentures and other securities whether outright or as
collateral security for any debt, liability or obligation of the Company or of any third party.

Borrowing limit

	132.	 	The board shall, in relation to the borrowings of the Company and its subsidiaries
for the time being (in these Articles 131 to 138 called the Group), restrict the borrowings of
the Company and exercise all voting and other rights or powers of control exercisable by the
Company in relation to its subsidiaries (if any) so as to secure (as regards subsidiaries so
far as by such exercise they can secure) that the aggregate nominal or principal amount
(together with any fixed or minimum premium payable on final repayment) for the time being
owing by the Group in respect of moneys borrowed (exclusive of moneys borrowed by the Company
from and for the time being owing to any of its subsidiaries or by any such subsidiary from and
for the time being owing to the Company or another such subsidiary of the Company) less cash
deposits shall not without the previous sanction of an ordinary resolution exceed an amount
equal to the higher of: (i) eight thousand million pounds; and (ii) two and a half times the
adjusted total of capital and reserves.

Definitions

	133.	 	For the purpose of Articles 132 to 137:

	 	(a)	 	the expression the adjusted total of capital and reserves means the aggregate of:

	 	(i)	 	the amount for the time being paid up on the issued share capital of the
Company; and

Page 30

 

	 	(ii)	 	the amounts standing to the credit of the consolidated reserves of the Group
(including the balances standing to the credit of profit and loss account and share
premium account, including the Company’s appropriate share of the reserves of its associated undertakings) as shown in the
last audited consolidated balance sheet of the Group and of the Company’s equity interest
in associated undertakings after making such adjustments as in the opinion of the auditors may be appropriate, including
adjustments to take account of any alterations to such reserves resulting from any
distributions or any issues of share capital whether for cash or other consideration
(including any transfers to
share premium account in connection therewith) or any payments up by capitalisation from
reserves of share capital theretofore not paid up or any reductions of paid up share
capital or share premium account which may have taken place since the date of such
balance sheet, less any amounts included in the reserves and appearing on such
consolidation as being reserved or set aside for future taxation assessable by reference
to profits earned down to the date to which such balance sheets are made up and after
adding back an appropriate proportion of the amount of goodwill arising on acquisitions,
made since 31 March 1989, of companies and businesses remaining within the Group or
associated undertakings of the Company which, as at the date of the last such audited
consolidated balance sheet, has been written off against reserves in accordance with
United Kingdom accounting practices, the appropriate proportion of an amount of goodwill
arising on any such acquisition being such amount thereof as would not have been
amortised by such date if such goodwill were to be amortised over forty years;

	 	(b)	 	the expression cash deposits means all cash deposits (otherwise than on current account)
with banks (not being the Company or any subsidiary of the Company), certificates of deposit
and securities of governments and companies and similar instruments owned by the Company and/or
any subsidiary of the Company which are or represent amounts available (or which will become
available) for repayment of any moneys borrowed;
	 
	 	(c)	 	the nominal or principal amount of any share capital, debentures or moneys borrowed from
any person or body, the beneficial interest in which or the right to payment or repayment of
which is not for the time being owned by and the repayment of which is guaranteed or secured by
or is the subject of an indemnity given or assumed by the Company or any of its subsidiaries
(but in the case of a subsidiary only that proportion hereof as the equity share capital of
such subsidiary which is beneficially owned directly or indirectly by the Company bears to the
total equity share capital of such subsidiary) shall be deemed to be moneys borrowed by the
Company.

Treatment of capital

	134.	 	For the purpose of Articles 132 to 137 capital allotted shall be treated as issued
and any capital already called up or payable at any fixed future date shall be treated as
already paid up.

Page 31

 

Moneys borrowed

	135.	 	Moneys borrowed for the purpose and within four months applied in repaying other
borrowed moneys falling to be taken into account shall not themselves be taken into account
until such application.

Subsidiaries

	136.	 	For the purpose of Articles 132 to 137 there shall be included in the meanings of
moneys borrowed and cash deposits such proportion of the money borrowed by, or cash deposits
of, a subsidiary company as the equity share capital of such subsidiary which is beneficially
owned directly or indirectly by the Company bears to the total equity share capital of such
subsidiary and the remainder of the money borrowed by, and the cash deposits of, such
subsidiary shall be excluded.

Determining whether limit breached

	137.	 	A certificate or report by the auditors for the time being of the Company as to the
amount of the adjusted total of capital and reserves or the amount of any moneys borrowed or to
the effect that the limit imposed by Articles 132 to 136 has not been or will not be exceeded
at any particular time or times shall be conclusive evidence of such amount or fact for the
purposes of Articles 132 to 136.

Persons dealing with the Company

	138.	 	No person dealing with the Company or any of its subsidiaries shall by reason of the
foregoing provisions be concerned to see or enquire whether this limit is observed and no debt
incurred or security given in excess of such limit shall be invalid or ineffectual unless the
lender or the recipient of the security had at the time when the debt was incurred or security
given express notice that the limit hereby imposed had been or would thereby be exceeded.

DISQUALIFICATION AND REMOVAL OF DIRECTORS

Disqualification of a director

	139.	 	A person ceases to be a director as soon as:

	 	(a)	 	that person ceases to be a director by virtue of any provision of the Act or is prohibited
from being a director by law;
	 
	 	(b)	 	a bankruptcy order is made against that person;
	 
	 	(c)	 	a composition is made with that person’s creditors generally in satisfaction of that person’s debts;
	 
	 	(d)	 	a registered medical practitioner who is treating that person gives a written opinion to
the Company stating that that person has become physically or mentally incapable of acting as a
director and may remain so for more than three months;
	 
	 	(e)	 	by reason of that person’s mental health, a court makes an order which wholly or partly prevents that person from personally exercising any
powers or rights which that person would otherwise have;
	 
	 	(f)	 	notification is received by the Company from the director that the director is resigning or
retiring from office, and such resignation or retirement has taken effect in
accordance with its terms, or his office as a director is vacated pursuant to Article 115; or

Page 32

 

	 	(g)	 	that person receives notice signed by not less than three quarters of the other directors
stating that that person should cease to be a director. In calculating the number of directors
who are required to give such notice to the director: (i) an alternate director appointed by him
acting in his capacity as such shall be excluded; and (ii) a director and any alternate director
appointed by him and acting in his capacity as such shall constitute a single director for this
purpose, so that notice by either shall be sufficient.

Power of Company to remove director

	140.	 	The Company may, without prejudice to the provisions of the Companies Acts, by ordinary
resolution remove any director from office (notwithstanding any provision of these Articles or
of any agreement between the Company and such director, but without prejudice to any claim he
may have for damages for breach of any such agreement). No special notice need be given of any
resolution to remove a director in accordance with this Article and no director proposed to be
removed in accordance with this Article has any special right to protest against his removal.
The Company may, by ordinary resolution, appoint another person in place of a director removed
from office in accordance with this Article. Any person so appointed shall, for the purpose of
determining the time at which he or any other director is to retire by rotation, be treated as
if he had become a director on the day on which the director in whose place he is appointed was
last elected a director. In default of such appointment the vacancy arising on the removal of a
director from office may be filled as a casual vacancy.

NON-EXECUTIVE DIRECTORS

Arrangements with non-executive directors

	141.	 	Subject to the provisions of the Companies Acts, the board may enter into, vary and
terminate an agreement or arrangement with any director who does not hold executive office for
the provision of his services to the Company. Subject to Articles 142 and 143, any such
agreement or arrangement may be made on such terms as the board determines.

Ordinary remuneration

	142.	 	The ordinary remuneration of the directors who do not hold executive office for their
services (excluding amounts payable under any other provision of these Articles) shall not
exceed in aggregate £500,000 per annum or such higher amount as the
Company may from time to time by ordinary resolution determine. Subject thereto, each such
director shall be paid a fee for their services (which shall be deemed to accrue from day to
day) at such rate as may from time to time be determined by the board.

Additional remuneration

	143.	 	The directors may grant extra remuneration to any director who does not hold
executive office and who serves on any committee of the board or, being called upon, performs
any other special or extra services to or at the request of the Company. Such extra
remuneration may be made payable to such director in addition to or in substitution for his
ordinary remuneration (if any) as a director, and may, without prejudice to the provisions of
Article 142, be made payable by a lump sum or by way of salary or commission on the dividends
or profits of the Company or of any other company in which the Company is interested or other
participation in any such profits or otherwise, or by any or all or partly by one and partly by
another or other of those modes.

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DIRECTORS’ EXPENSES

Directors may be paid expenses

	144.	 	The directors may be paid all travelling, hotel, and other expenses properly incurred
by them in connection with their attendance at meetings of the board or committees of the board
or general meetings or separate meetings of the holders of any class of shares or of debentures
of the Company or otherwise in connection with the discharge of their duties.

EXECUTIVE DIRECTORS

Appointment to executive office

	145.	 	Subject to the provisions of the Companies Acts, the board may appoint one or more of
its body to be the holder of any executive office (except that of auditor) in the Company and
may enter into an agreement or arrangement with any such director for his employment by the
Company or for the provision by him of any services outside the scope of the ordinary duties of
a director. Any such appointment, agreement or arrangement may be made on such terms,
including, without limitation, terms as to remuneration, as the board determines. The board may
revoke or vary any such appointment but without prejudice to any rights or claims which the
person whose appointment is revoked or varied may have against the Company because of the
revocation or variation.

Termination of appointment to executive office

	146.	 	Any appointment of a director to an executive office shall terminate if he ceases to
be a director but without prejudice to any rights or claims which he may have against the
Company by reason of such cessation. A director appointed to an executive office shall not
cease to be a director merely because his appointment to such executive office terminates.

Emoluments to be determined by the board

	147.	 	The emoluments of any director holding executive office for his services as such
shall be determined by the board, and may be of any description, including (without limitation)
admission to, or continuance of, membership of any scheme (including any share acquisition
scheme) or fund instituted or established or financed or contributed to by the Company for the
provision of pensions, life assurance or other benefits for employees or their dependants, or
the payment of a pension or other benefits to him or his dependants on or after retirement or
death, apart from membership of any such scheme or fund.

DIRECTORS’ INTERESTS

Authorisation under s175 of the Act

	148.	 	For the purposes of section 175 of the Act, the board may authorise any matter
proposed to it in accordance with these Articles which would, if not so authorised, involve a
breach of duty by a director under that section, including, without limitation, any matter
which relates to a situation in which a director has, or can have, an interest which conflicts,
or possibly may conflict, with the interests of the Company. Any such authorisation will be
effective only if:

	 	(a)	 	any requirement as to quorum at the meeting at which the matter is considered is met
without counting the director in question or any other interested director; and

Page 34

 

	 	(b)	 	the matter was agreed to without their voting or would have been agreed to if their votes
had not been counted.

	 	 	The board may (whether at the time of the giving of the authorisation or subsequently) make any
such authorisation subject to any limits or conditions it expressly imposes but such
authorisation is otherwise given to the fullest extent permitted. The board may vary or
terminate any such authorisation at any time.
	 
	 	 	For the purposes of the Articles, a conflict of interest includes a conflict of interest and
duty and a conflict of duties, and interest includes both direct and indirect interests.

Director may
contract with the
Company and hold
other offices etc.

	149.	 	Provided that he has disclosed to the board the nature and extent of his interest
(unless the circumstances referred to in section 177(5) or section 177(6) of the Act apply, in
which case no such disclosure is required) a director notwithstanding his office:

	 	(a)	 	may be a party to, or otherwise interested in, any transaction or arrangement with the
Company or in which the Company is otherwise (directly or indirectly) interested;
	 
	 	(b)	 	may act by himself or his firm in a professional capacity for the Company (otherwise than
as auditor) and he or his firm shall be entitled to remuneration for professional services as
if he were not a director; and
	 
	 	(c)	 	may be a director or other officer of, or employed by, or a party to a transaction or
arrangement with, or otherwise interested in, any body corporate:

	 	(i)	 	in which the Company is (directly or indirectly) interested as shareholder or
otherwise; or
	 
	 	(ii)	 	with which he has such a relationship at the request or direction of the
Company.

Remuneration, benefits etc.

	150.	 	A director shall not, by reason of his office, be accountable to the Company for any
remuneration or other benefit which he derives from any office or employment or from any
transaction or arrangement or from any interest in any body corporate:

	 	(a)	 	the acceptance, entry into or existence of which has been approved by the board pursuant to
Article 148 (subject, in any such case, to any limits or conditions to which such approval was
subject); or
	 
	 	(b)	 	which he is permitted to hold or enter into by virtue of paragraph (a), (b) or (c) of
Article 149;

	 	 	nor shall the receipt of any such remuneration or other benefit constitute a breach of his duty
under section 176 of the Act.

Page 35

 

Notification of interests

	151.	 	Any disclosure required by Article 149 may be made at a meeting of the board, by
notice in writing or by general notice or otherwise in accordance with section 177 of the Act.

Duty of confidentiality to another person

	152.	 	A director shall be under no duty to the Company with respect to any information
which he obtains or has obtained otherwise than as a director of the Company and in respect of
which he owes a duty of confidentiality to another person. However, to the extent that his
relationship with that other person gives rise to a conflict of interest or possible conflict
of interest, this Article applies only if the existence of that relationship has been approved
by the board pursuant to Article 148. In particular, the director shall not be in breach of the
general duties he owes to the Company by virtue of sections 171 to 177 of the Act because he
fails:

	 	(a)	 	to disclose any such information to the board or to any director or other officer or
employee of the Company; and/or
	 
	 	(b)	 	to use or apply any such information in performing his duties as a director of the Company.

Consequences of authorisation

	153.	 	Where the existence of a director’s relationship with another person has been approved by the board pursuant to Article 148 and
his relationship with that person gives rise to a conflict of interest or possible
conflict of interest, the director shall not be in breach of the general duties he owes to the
Company by virtue of sections 171 to 177 of the Act because he:

	 	(a)	 	absents himself from meetings of the board at which any matter relating to the conflict of
interest or possible conflict of interest will or may be discussed or from the discussion of
any such matter at a meeting or otherwise; and/or
	 
	 	(b)	 	makes arrangements not to receive documents and information relating to any matter which
gives rise to the conflict of interest or possible conflict of interest sent or supplied by the
Company and/or for such documents and information to be received and read by a professional
adviser,

	 	 	for so long as he reasonably believes such conflict of interest or possible conflict of
interest subsists.

Without
prejudice to
equitable
principles or rule
of law

	154.	 	The provisions of Articles 152 and 153 are without prejudice to any equitable
principle or rule of law which may excuse the director from:

	 	(a)	 	disclosing information, in circumstances where disclosure would otherwise be required under
these Articles; or
	 
	 	(b)	 	attending meetings or discussions or receiving documents and information as referred to in
Article 153, in circumstances where such attendance or receiving such documents and information
would otherwise be required under these Articles.

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GRATUITIES, PENSIONS AND INSURANCE

Gratuities and pensions

	155.	 	The board may (by establishment of, or maintenance of, schemes or otherwise) provide
benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for
any past or present director or employee of the Company or any of its subsidiary undertakings
or any body corporate associated with, or any business acquired by, any of them, and for any
member of his family (including a spouse, a civil partner, a former spouse and a former civil
partner) or any person who is or was dependent on him, and may (as well before as after he
ceases to hold such office or employment) contribute to any fund and pay premiums for the
purchase or provision of any such benefit.

Insurance

	156.	 	Without prejudice to the provisions of Article 225, the board may exercise all the
powers of the Company to purchase and maintain insurance for or for the benefit of any person
who is or was:

	 	(a)	 	a director, officer or employee of the Company, or of any other body which is or was the
holding company or subsidiary undertaking of the Company or in which the Company or such
holding company or subsidiary undertaking has or had any interest (whether direct or indirect)
or with which the Company or such holding company or subsidiary undertaking is or was in any
way allied or associated; or
	 
	 	(b)	 	a trustee of any pension fund in which employees of the Company or of any other body
referred to in paragraph (a) of this Article are or have been interested,

	 	 	including, without limitation, insurance against any liability incurred by such person in
respect of any act or omission in the actual or purported execution or discharge of his duties
or in the exercise or purported exercise of his powers or otherwise in relation to his duties,
powers or offices in relation to the relevant body or fund.

Directors not
liable to account

	157.	 	No director or former director shall be accountable to the Company or the members for
any benefit provided pursuant to these Articles. The receipt of any such benefit shall not
disqualify any person from being or becoming a director of the Company.

Section 247 of
the Act

	158.	 	The board may make provision for the benefit of any persons employed or formerly
employed by the Company or any of its subsidiaries other than a director or former director or
shadow director in connection with the cessation or the transfer of the whole or part of the
undertaking of the Company or any subsidiary. Any such provision shall be made by a resolution
of the board in accordance with section 247 of the Act.

PROCEEDINGS OF THE BOARD

Convening
meetings and
proceedings

	159.	 	Subject to the provisions of these Articles, the board may regulate its proceedings
as it thinks fit. A director may, and the secretary at the request of a director shall, call a
meeting of the board by giving notice of the meeting to each director. Notice of a board
meeting shall be deemed to be given to a director if it is

Page 37

 

	 	 	given to him personally or by word of mouth or sent in hard copy form to him at his last known
address or such other address (if any) as may for the time being be specified by him or on his
behalf to the Company for that purpose, or sent in electronic form to such address (if any) for
the time being specified by him or on his behalf to the Company for that purpose. A director
absent or intending to be absent from the United Kingdom may request the board that notices of
board meetings shall during his absence be sent in hard copy form or in electronic form to such
address (if any) for the time being specified by him or on his behalf to the Company for that purpose, but such notices need
not be sent any earlier than notices sent to directors not so absent and, if no such request is
made to the board, it shall not be necessary to send notice of a board meeting to any director
who is for the time being absent from the United Kingdom. No account is to be taken of directors
absent from the United Kingdom when considering the adequacy of the period of notice of the
meeting. Questions arising at a meeting shall be decided by a majority of votes. In the case of
an equality of votes, the chairman shall have a second or casting vote. Any director may waive
notice of a meeting and any such waiver may be retrospective. Any notice pursuant to this
Article need not be in writing if the board so determines and any such determination may be
retrospective.

Quorum

	160.	 	The quorum for the transaction of the business of the board may be fixed by the board
and unless so fixed at any other number shall be two. A person who holds office only as an
alternate director may, if his appointer is not present, be counted in the quorum. Any director
who ceases to be a director at a board meeting may continue to be present and to act as a
director and be counted in the quorum until the termination of the board meeting if no director
objects.

Powers of
directors if number
falls below minimum

	161.	 	The continuing directors or a sole continuing director may act notwithstanding any
vacancies in their number, but if the number of directors is less than the number fixed as the
quorum, the continuing directors or director may act only for the purpose of filling vacancies
or of calling a general meeting.

Chairman and
deputy chairman

	162.	 	The board may appoint one of their number to be the chairman, and one of their number
to be the deputy chairman, of the board and may at any time remove either of them from such
office. Unless he is unwilling to do so, the director appointed as chairman, or in his stead
the director appointed as deputy chairman, shall preside at every meeting of the board at which
he is present. If there is no director holding either of those offices, or if neither the
chairman nor the deputy chairman is willing to preside or neither of them is present within
five minutes after the time appointed for the meeting, the directors present may appoint one of
their number to be chairman of the meeting.

Validity of
acts of the board

	163.	 	All acts done by a meeting of the board, or of a committee of the board, or by a
person acting as a director or alternate director, shall, notwithstanding that it be
afterwards discovered that there was a defect in the appointment of any director or any member
of the committee or alternate director or that any of them were disqualified from holding
office, or had vacated office, or were not entitled to vote, be as valid as if every such
person had been duly appointed and was qualified and had continued to be a director or, as the
case may be, an alternate director and had been entitled to vote.

Page 38

 

Resolutions in
writing

	164.	 	A resolution in writing agreed to by all the directors entitled to receive notice of
a meeting of the board or of a committee of the board (not being less than the number of
directors required to form a quorum of the board) shall be as valid and effectual as if it had
been passed at a meeting of the board or (as the case may be) a committee of the board duly
convened and held. For this purpose:

	 	(a)	 	a director signifies his agreement to a proposed written resolution when the Company
receives from him a document indicating his agreement to the resolution authenticated in the
manner permitted by the Companies Acts for a document in the relevant form;
	 
	 	(b)	 	the director may send the document in hard copy form or in electronic form to such address
(if any) for the time being specified by the Company for that purpose;
	 
	 	(c)	 	if an alternate director signifies his agreement to the proposed written resolution, his
appointer need not also signify his agreement; and
	 
	 	(d)	 	if a director signifies his agreement to the proposed written resolution, an alternate
director appointed by him need not also signify his agreement in that capacity.

Meetings by telephone, etc

	165.	 	Without prejudice to the first sentence of Article 159, a person entitled to be
present at a meeting of the board or of a committee of the board shall be deemed to be present
for all purposes if he is able (directly or by electronic communication) to speak to and be
heard by all those present or deemed to be present simultaneously. A director so deemed to be
present shall be entitled to vote and be counted in a quorum accordingly. Such a meeting shall
be deemed to take place where it is convened to be held or (if no director is present in that
place) where the largest group of those participating is assembled, or, if there is no such
group, where the chairman of the meeting is. The word meeting in these Articles shall be
construed accordingly.

Directors power to vote
on contracts in
which they are
interested

	166.	 	Except as otherwise provided by these Articles, a director shall not vote at a
meeting of the board or a committee of the board on any resolution of the board concerning a
matter in which he has an interest (other than by virtue of his interests in
shares or debentures or other securities of, or otherwise in or through, the Company) which can
reasonably be regarded as likely to give rise to a conflict with the interests of the Company,
unless his interest arises only because the resolution concerns one or more of the following
matters:

	 	(a)	 	the giving of a guarantee, security or indemnity in respect of money lent or obligations
incurred by him or any other person at the request of or for the benefit of, the Company or any
of its subsidiary undertakings;
	 
	 	(b)	 	the giving of a guarantee, security or indemnity in respect of a debt or obligation of the
Company or any of its subsidiary undertakings for which the director has assumed responsibility
(in whole or part and whether alone or jointly with others) under a guarantee or indemnity or
by the giving of security;

Page 39

 

	 	(c)	 	a contract, arrangement, transaction or proposal concerning an offer of shares, debentures
or other securities of the Company or any of its subsidiary undertakings for subscription or
purchase, in which offer he is or may be entitled to participate as a holder of securities or
in the underwriting or sub-underwriting of which he is to participate;
	 
	 	(d)	 	a contract, arrangement, transaction or proposal concerning any other body corporate in
which he or any person connected with him is interested, directly or indirectly, and whether as
an officer, shareholder, creditor or otherwise, if he and any persons connected with him do not
to his knowledge hold an interest (as that term is used in sections 820 to 825 of the Act)
representing one per cent. or more of either any class of the equity share capital (excluding
any shares of that class held as treasury shares) of such body corporate (or any other body
corporate through which his interest is derived) or of the voting rights available to members
of the relevant body corporate (any such interest being deemed for the purpose of this Article
to be likely to give rise to a conflict with the interests of the Company in all
circumstances);
	 
	 	(e)	 	a contract, arrangement, transaction or proposal for the benefit of employees of the
Company or of any of its subsidiary undertakings which does not award him any privilege or
benefit not generally accorded to the employees to whom the arrangement relates; and
	 
	 	(f)	 	a contract, arrangement, transaction or proposal concerning any insurance which the Company
is empowered to purchase or maintain for, or for the benefit of, any directors of the Company
or for persons who include directors of the Company.

	 	 	For the purposes of this Article, in relation to an alternate director, an interest of his
appointer shall be treated as an interest of the alternate director without prejudice to any
interest which the alternate director has otherwise.

Shareholder
approval

	167.	 	The Company may by ordinary resolution suspend or relax to any extent, either
generally or in respect of any particular matter, any provision of these Articles
prohibiting a director from voting at a meeting of the board or of a committee of the board.

Division of proposals

	168.	 	Where proposals are under consideration concerning the appointment (including,
without limitation, fixing or varying the terms of appointment) of two or more directors to
offices or employments with the Company or any body corporate in which the Company is
interested, the proposals may be divided and considered in relation to each director
separately. In such cases each of the directors concerned shall be entitled to vote in respect
of each resolution except that concerning his own appointment.

Decision of
chairman final and
conclusive

	169.	 	If a question arises at a meeting of the board or of a committee of the board as to
the entitlement of a director to vote, the question may, before the conclusion of the meeting,
be referred to the chairman of the meeting and his ruling in relation to any director other
than himself shall be final and conclusive except in a case where the nature or extent of the
interests of the director concerned have not been fairly

Page 40

 

		 	disclosed. If any such question arises in respect of the chairman of the meeting, it shall be
decided by resolution of the board (on which the chairman shall not vote) and such resolution
will be final and conclusive except in a case where the nature and extent of the interests of
the chairman have not been fairly disclosed.

SECRETARY

Appointment and
removal of
secretary

	170.	 	Subject to the provisions of the Companies Acts, the secretary shall be appointed by
the board for such term, at such remuneration and on such conditions as it may think fit. The
board may, in addition, and at any time and from time to time appoint any person to be
assistant or deputy secretary and anything required or authorised to be done by or to the
secretary may be done by or to any assistant or deputy secretary so appointed. Any secretary or
assistant or deputy secretary so appointed may be removed by the board, but without prejudice
to any claim for damages for breach of any contract of service between him and the Company.

MINUTES

Minutes
required to be kept

	171.	 	The board shall cause minutes to be recorded for the purpose of:

	 	(a)	 	all appointments of officers made by the board; and
	 
	 	(b)	 	all proceedings at meetings of the Company, the holders of any class of shares in the
capital of the Company, the board and committees of the board, including the names of the
directors present at each such meeting.

Conclusiveness
of minutes

	172.	 	Any such minutes, if purporting to be authenticated by the chairman of the meeting to
which they relate or of the next meeting, shall be sufficient evidence of the proceedings at
the meeting without any further proof of the facts stated in them.

THE SEAL

Authority
required for use of
seal

	173.	 	The seal shall only be used by the authority of a resolution of the board or of a
committee of the board. The board may determine who shall sign any document executed under the
seal and unless otherwise so determined it shall be signed by at least one director and the
secretary or by at least two directors. Any document may be executed under the seal by
impressing the seal by mechanical means or by printing the seal or a facsimile of it on the
document or by applying the seal or a facsimile of it by any other means to the document.

Certificates
for shares and
debentures

	174.	 	The board may by resolution determine either generally or in any particular case that
any certificate for shares or debentures or representing any other form of security may have
any signature affixed to it by some mechanical or electronic means, or printed thereon and that
in the case of a certificate executed under the seal need not bear any signature.

Execution of
instrument as a
deed under hand

	175.	 	Any document executed, with the authority of a resolution of the board or of a
committee of the board, in any manner permitted by section 44(2) of the Act and expressed (in
whatever form of words) to be executed by the Company shall have the same effect as if executed
under the seal.

Page 41

 

Delivery of
deeds

	176.	 	A document which is executed by the Company as a deed shall not be deemed to be
delivered by the Company solely as a result of its having been executed by the
Company.

REGISTERS

Overseas and
local registers

	177.	 	Subject to the provisions of the Companies Acts and the Regulations, the Company may
keep an overseas or local or other register in any place, and the board may make, amend and
revoke any regulations it thinks fit about the keeping of that register.

Authentication
and certification
of copies and
extracts

	178.	 	Any director or the secretary or any other person appointed by the board for the
purpose shall have power to authenticate and certify as true copies of and extracts from:

	 	(a)	 	any document comprising or affecting the constitution of the Company, whether in hard copy
form or electronic form;
	 
	 	(b)	 	any resolution passed by the Company, the holders of any class of shares in the capital of
the Company, the board or any committee of the board, whether in hard copy form or electronic
form; and
	 
	 	(c)	 	any book, record and document relating to the business of the Company, whether in hard copy
form or electronic form (including, without limitation, the accounts).

	 	 	If certified in this way, a document purporting to be a copy of a resolution, or the minutes or
an extract from the minutes of a meeting of the Company, the holders of any class of shares in
the capital of the Company, the board or a committee of the board, whether in hard copy form
or electronic form, shall be conclusive evidence in favour of all persons dealing with the
Company in reliance on it or them that the resolution was duly passed or that the minutes are,
or the extract from the minutes is, a true and accurate record of proceedings at a duly
constituted meeting.

DIVIDENDS

Declaration of
dividends

	179.	 	Subject to the provisions of the Companies Acts, the Company may by ordinary
resolution declare dividends in accordance with the respective rights of the members, but no
dividend shall exceed the amount recommended by the board.

Interim
dividends

	180.	 	Subject to the provisions of the Companies Acts, the board may pay interim
dividends if it appears to the board that they are justified by the profits of the Company
available for distribution. If the share capital is divided into different classes, the board
may pay interim dividends on shares which confer deferred or non-preferred rights with regard
to dividends as well as on shares which confer preferential rights with regard to dividends,
but no interim dividend shall be paid on shares carrying deferred or non-preferred rights if,
at the time of payment, any preferential dividend is in arrear. The board may also pay at
intervals settled by it any dividend payable at a fixed rate if it appears to the board that
the profits available for distribution justify the payment. Provided the board acts in good
faith it shall not incur

Page 42

 

	    	 	any liability to the holders of shares conferring preferred rights for any loss they may suffer
by the lawful payment of an interim dividend on any shares having deferred or non-preferred
rights.

Declaration and
payment in
different
currencies

	181.	 	Dividends may be declared and paid in any currency or currencies that the board shall
determine. The board may also determine the exchange rate and the relevant date for determining
the value of the dividend in any currency.

Apportionment
of dividends

	182.	 	Except as otherwise provided by the rights attached to shares, all dividends shall be
declared and paid according to the amounts paid up on the shares on which the dividend is paid;
but no amount paid on a share in advance of the date on which a call is payable shall be
treated for the purpose of this Article as paid on the share. All dividends shall be
apportioned and paid proportionately to the amounts paid up on the shares during any portion or
portions of the period in respect of which the dividend is paid; but, if any share is allotted
or issued on terms providing that it shall rank for dividend as from a particular date, that
share shall rank for dividend accordingly.

Dividends in
specie

	183.	 	A general meeting declaring a dividend may, on the recommendation of the board, by
ordinary resolution direct that it shall be satisfied wholly or partly by the distribution of
assets including, without limitation, paid up shares or debentures of any other body corporate.
Where any difficulty arises regarding the distribution, the board may make any arrangements as
it thinks fit to settle the same, including without limitation: (a) the fixing of the value for
distribution of any assets; (b) the payment of cash to any member on the basis of the value so
fixed in order to adjust the rights of members; and (c) the vesting of any assets in trustees.

Scrip
dividends:
authorising
resolution

	184.	 	The board may, if authorised by an ordinary resolution of the Company (the
Resolution), offer any holder of shares the right to elect to receive shares, credited as fully
paid, instead of cash in respect of the whole (or some part, to be determined by the board) of
all or any dividend specified by the Resolution. The offer shall be on the terms and conditions
and be made in the manner specified in Article 185 or, subject to those provisions, specified in
the Resolution.

Scrip
dividends:
procedures

	185.	 	The following provisions shall apply to the Resolution and any offer made pursuant to
it and Article 184.

	 	(a)	 	The Resolution may specify a particular dividend, or may specify all or any dividends
declared within a specified period.
	 
	 	(b)	 	Each holder of shares shall be entitled to that number of new shares as are together as
nearly as possible equal in value to (but not greater than) the cash amount (disregarding any
tax credit) of the dividend that such holder elects to forgo (each a new share). For this
purpose, the value of each new share shall be:

	 	(i)	 	equal to the average quotation for the Company’s ordinary shares, that is, the average of the middle
market quotations for those shares on the London Stock Exchange plc, as derived from the
Daily Official List, on the day on which such shares are first quoted ex the relevant
dividend and the four subsequent dealing days; or

Page 43

 

	 	(ii)	 	calculated in any other manner specified by the Resolution,

	 	 	 	but shall never be less than the par value of the new share.
	 
	 	 	 	A certificate or report by the auditors as to the value of a new share in respect of
any dividend shall be conclusive evidence of that value.
	 
	 	(c)	 	On or as soon as practicable after announcing that any dividend is to be declared or
recommended, the board, if it intends to offer an election in respect of that dividend, shall
also announce that intention. If, after determining the basis of allotment, the board decides
to proceed with the offer, it shall notify the holders of shares of the terms and conditions of
the right of election offered to them, specifying the procedure to be followed and place at
which, and the latest time by which, elections or notices amending or terminating existing
elections must be delivered in order to be effective.
	 
	 	(d)	 	The board shall not proceed with any election unless the board has sufficient authority to
allot shares and sufficient reserves or funds that may be appropriated to give effect to it
after the basis of allotment is determined.
	 
	 	(e)	 	The board may exclude from any offer any holders of shares where the board believes the
making of the offer to them would or might involve the contravention of the laws of any
territory or that for any other reason the offer should not be made to
them.
	 
	 	(f)	 	The dividend (or that part of the dividend in respect of which a right of election has been
offered) shall not be payable in cash on shares in respect of which an election has been made
(the elected shares) and instead such number of new shares shall be allotted to each holder of
elected shares as is arrived at on the basis stated in paragraph (b) of this Article. For that
purpose the board shall appropriate out of any amount for the time being standing to the credit
of any reserve or fund (including, without limitation, the profit and loss account), whether or
not it is available for distribution, a sum equal to the aggregate nominal amount of the new
shares to be allotted and apply it in paying up in full the appropriate number of new shares
for allotment and distribution to each holder of elected shares as is arrived at on the basis
stated in paragraph (b) of this Article.
	 
	 	(g)	 	The new shares when allotted shall rank equally in all respects with the fully paid shares
of the same class then in issue except that they shall not be entitled to participate in the
relevant dividend.
	 
	 	(h)	 	No fraction of a share shall be allotted. The board may make such provision as it thinks
fit for any fractional entitlements including, without limitation, payment in cash to holders
in respect of their fractional entitlements, provision for the accrual, retention or
accumulation of all or part of the benefit of fractional entitlements to or by the Company or
to or by or on behalf of any holder or the application of any accrual, retention or
accumulation to the allotment of fully paid shares to any holder.

Page 44

 

	 	(i)	 	The board may do all acts and things it considers necessary or expedient to give effect to
the allotment and issue of any share pursuant to this Article or otherwise in connection with
any offer made pursuant to this Article and may authorise any person, acting on behalf of the
holders concerned, to enter into an agreement with the Company providing for such allotment or
issue and incidental matters. Any agreement made under such authority shall be effective and
binding on all concerned.
	 
	 	(j)	 	The board may, at its discretion, amend, suspend or terminate any offer pursuant to this
Article.

Permitted
deductions and
retentions

	186.	 	The board may deduct from any dividend, or other moneys payable to any member in respect
of a share, any moneys presently payable by him to the Company in respect of that share. Where a
person is entitled by transmission to a share, the board may retain any dividend payable in respect
of that share until that person (or that person’s transferee) becomes the holder of that share.

Procedure for
payment to holders
and others entitled

	187.	 	Any dividend or other moneys payable in respect of a share may be paid:

	 	(a)	 	in cash; or
	 
	 	(b)	 	by cheque or warrant made payable to or to the order of the holder or person entitled to
payment; or
	 
	 	(c)	 	by any direct debit, bank or other funds transfer system to the holder or person entitled
to payment or, if practicable, to a person designated by notice to the Company by the holder or
person entitled to payment; or
	 
	 	(d)	 	by any other method approved by the board and agreed (in such form as the Company thinks
appropriate) by the holder or person entitled to payment, including (without limitation) in
respect of an uncertificated share, by means of the relevant system (subject to the facilities
and requirements of the relevant system).

Joint
entitlement

	188.	 	If two or more persons are registered as joint holders of any share, or are entitled
by transmission jointly to a share, the Company may:

	 	(a)	 	pay any dividend or other moneys payable in respect of the share to any one of them and any
one of them may give effectual receipt for that payment; and
	 
	 	(b)	 	for the purpose of Article 187, rely in relation to the share on the written direction,
designation or agreement of, or notice to the Company by, any one of them.

Payment by post

	189.	 	A cheque or warrant may be sent by post:

	 	(a)	 	where a share is held by a sole holder, to the registered address of the holder of the
share; or

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	 	(b)	 	if two or more persons are the holders, to the registered address of the person who is
first named in the register; or
	 
	 	(c)	 	if a person is entitled by transmission to the share, as if it were a notice to be sent
under Article 205; or
	 
	 	(d)	 	in any case, to such person and to such address as the person entitled to payment may
direct by notice to the Company.

Discharge to
Company and risk

	190.	 	Payment of a cheque or warrant by the bank on which it was drawn or the transfer of
funds by the bank instructed to make the transfer or, in respect of an uncertificated share, the
making of payment in accordance with the facilities and requirements of the
relevant system (which, if the relevant system is CREST, may include the sending by the Company
or by any person on its behalf of an instruction to the Operator of the relevant system to
credit the cash memorandum account of the holder or joint holders or, if permitted by the
Company, of such person as the holder or joint holders may in writing direct) shall be a good
discharge to the Company. Every cheque or warrant sent or transfer of funds made by the
relevant bank or system in accordance with these Articles shall be at the risk of the holder or
person entitled. The Company shall have no responsibility for any sums lost or delayed in the
course of payment by any method used by the Company in accordance with Article 187.

Interest not
payable

	191.	 	No dividend or other moneys payable in respect of a share shall bear interest against
the Company unless otherwise provided by the rights attached to the share.

Forfeiture of
unclaimed dividends

	192.	 	Any dividend which has remained unclaimed for 12 years from the date when it became due
for payment shall, if the board so resolves, be forfeited and cease to remain owing by the Company.
The payment of any unclaimed dividend or other moneys payable in respect of a share may (but need
not) be paid by the Company into an account separate from the Company’s own account. Such payment shall not
constitute the Company a trustee in respect of it. The Company shall be entitled to cease sending dividend warrants and
cheques by post or otherwise to a member if those instruments have been returned undelivered to, or
left uncashed by, that member on at least two consecutive occasions, or, following one such
occasion, reasonable enquiries have failed to establish the member’s new address. The entitlement conferred on the Company by this
Article in respect of any member shall cease if the member claims a dividend or cashes a dividend
warrant or cheque.

CAPITALISATION OF PROFITS AND RESERVES

Power to
capitalise

	193.	 	The board may with the authority of an ordinary resolution of the Company:

	 	(a)	 	subject to the provisions of this Article, resolve to capitalise any undistributed profits
of the Company not required for paying any preferential dividend (whether or not they are
available for distribution) or any sum standing to the credit of any reserve or other fund
including, without limitation, the
Company’s share premium account and capital redemption reserve, if any;
	 
	 	(b)	 	appropriate the sum resolved to be capitalised to the members or any class of members on
the record date specified in the relevant resolution who would

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	 	 	 	have been entitled to it if it were distributed by way of dividend and in the
same proportions and apply such sum on their behalf either in or towards paying up the
amounts, if any, for the time being unpaid on any shares held by them respectively, or
in paying up in full shares, debentures or other obligations of the Company of a
nominal amount equal to that sum, and allot the shares, debentures or other obligations
credited as fully paid to those members, or as they may direct, in those proportions,
or partly in one way and partly in the other; but the share premium account, the
capital redemption reserve, and any profits which are not available for distribution
may, for the purposes of this Article, only be applied in paying up shares to be
allotted to members credited as fully paid;
	 
	 	(c)	 	where shares or debentures become, or would otherwise become, distributable under this
Article in fractions, make such provision as they think fit for dealing with any fractional
entitlements including, without limitation, authorising their sale and transfer to any person,
or resolving that the distribution be made as nearly as practicable in the correct proportion
but not exactly so, or ignoring fractions altogether or resolving that cash payments be made to
any members in order to adjust the rights of all parties;
	 
	 	(d)	 	authorise any person to enter into an agreement with the Company on behalf of all the
members concerned providing for either:

	 	(i)	 	the allotment to the members respectively, credited as fully paid, of any
shares, debentures or other obligations to which they are entitled upon such
capitalisation; or
	 
	 	(ii)	 	the payment up by the Company on behalf of the members of the amounts, or any
part of the amounts, remaining unpaid on their existing shares by the application of
their respective proportions of the sum resolved to be capitalised,

	 	 	 	and any agreement made under such authority shall be binding on all such members;
	 
	 	(e)	 	for the purposes of this Article, unless the relevant resolution provides otherwise, if the
Company holds treasury shares of the relevant class at the record date specified in the
relevant resolution, it shall be treated as if it were entitled to receive the dividends in
respect of those treasury shares which would have been payable if those treasury shares had
been held by a person other than the Company; and
	 
	 	(f)	 	generally do all acts and things required to give effect to the ordinary resolution.

RECORD DATES

Record dates
for dividends, etc

	194.	 	Notwithstanding any other provision of these Articles, the Company or the board may:

Page 47

 

	 	(a)	 	fix any date as the record date for any dividend, distribution, allotment or issue, which
may be on or at any time before or after any date on which the dividend, distribution,
allotment or issue is declared, paid or made;
	 
	 	(b)	 	for the purpose of determining which persons are entitled to attend and vote at a general
meeting of the Company, or a separate general meeting of the holders of any class of shares in
the capital of the Company, and how many votes such persons may cast, specify in the notice of
meeting a time, not more than 48 hours before the time fixed for the meeting (which shall, if
the board so specifies, be calculated taking no account of any part of a day that is not a
working day), by which a person must be entered on the register in order to have the right to
attend or vote at the meeting; changes to the register after the time specified by virtue of
this Article shall be disregarded in determining the rights of any person to attend or vote at
the meeting; and
	 
	 	(c)	 	for the purpose of sending notices of general meetings of the Company, or separate general
meetings of the holders of any class of shares in the capital of the Company, under these
Articles, determine that persons entitled to receive such notices are those persons entered on
the register at the close of business on a day determined by the Company or the board, which
day may not be more than 21 days before the day that notices of the meeting are sent.

ACCOUNTS

Rights to
inspect records

	195.	 	No member shall (as such) have any right to inspect any accounting records or other
book or document of the Company except as conferred by statute or authorised by the board or by
ordinary resolution of the Company or order of a court of competent jurisdiction.

Sending of
annual accounts

	196.	 	Subject to the Companies Acts, a copy of the Company’s annual accounts, together with a copy of the directors’
report for that financial year and the auditors’ report on those accounts shall, at least 21 clear days before the date of the meeting at
which copies of those documents are to be laid in accordance with the provisions of the Companies Acts, be sent to every member and to every holder
of the Company’s debentures of whose address the Company is aware, and to every other person who is entitled to receive notice of meetings
from the Company under the provisions of the Companies Acts or of these Articles or, in the case of joint holders of any share or debenture, to one
of the joint holders,

Summary
financial
statements

	197.	 	Subject to the Companies Acts, the requirements of Article 196 shall be deemed satisfied
in relation to any person by sending to the person, instead of such copies, a
summary financial statement derived from the Company’s annual accounts and the directors’ report, which
shall be in the form and containing the information prescribed by the Companies Acts and
any regulations made under the Companies Acts.

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COMMUNICATIONS

When notice
required to be in
writing

	198.	 	Any notice to be sent to or by any person pursuant to these Articles (other than a
notice calling a meeting of the board) shall be in writing.

Methods of
Company sending
notice

	199.	 	Subject to Article 198 and unless otherwise provided by these Articles, the Company
shall send or supply a document or information that is required or authorised to be sent or
supplied to a member or any other person by the Company by a provision of the Companies Acts or
pursuant to these Articles or to any other rules or regulations to which the Company may be
subject in such form and by such means as it may in its absolute discretion determine provided
that the provisions of the Act which apply to sending or supplying a document or information
required or authorised to be sent or supplied by the Companies Acts shall, the necessary
changes having been made, also apply to sending or supplying any document or information
required or authorised to be sent by these Articles or any other rules or regulations to which
the Company may be subject.

Methods of
member etc. sending
document or
information

	200.	 	Subject to Article 198 and unless otherwise provided by these Articles, a member or a
person entitled by transmission to a share shall send a document or information pursuant to
these Articles to the Company in such form and by such means as it may in its absolute
discretion determine provided that:

	 	(a)	 	the determined form and means are permitted by the Companies Acts for the purpose of
sending or supplying a document or information of that type to a company pursuant to a
provision of the Companies Acts; and
	 
	 	(b)	 	unless the board otherwise permits, any applicable condition or limitation specified in the
Companies Acts including, without limitation, as to the address to which the document or
information may be sent, is satisfied.

	 	 	Unless otherwise provided by these Articles or required by the board, such document or
information shall be authenticated in the manner specified by the Companies Acts for
authentication of a document or information sent in the relevant form.

Notice to joint
holders

	201.	 	In the case of joint holders of a share any document or information shall be sent to
the joint holder whose name stands first in the register in respect of the joint holding and
any document or information so sent shall be deemed for all purposes sent to all the joint
holders.

Registered
address outside EEA

	202.	 	A member whose registered address is not within an EEA State and who sends to the
Company an address within an EEA State at which a document or information may be sent to him
shall be entitled to have the document or information sent to him at that address (provided
that, in the case of a document or information sent by electronic means including, without
limitation, any notification required by the Companies Acts that the document or information is
available on a website, the Company so agrees, which agreement the Company shall be entitled to
withhold in its absolute discretion including, without limitation, in circumstances in which
the Company considers that the sending of the document or information to such address using
electronic means would or might infringe the laws of any other jurisdiction) but otherwise:

Page 49

 

	 	(a)	 	no such member shall be entitled to receive any document or information from the Company;
and
	 
	 	(b)	 	without prejudice to the generality of the foregoing, any notice of a general meeting of
the Company which is in fact sent or purports to be sent to such member shall be ignored for
the purpose of determining the validity of the proceedings at such general meeting.

Deemed receipt
of notice

	203.	 	A member present, either in person or by proxy, at any meeting of the Company or of
the holders of any class of shares in the capital of the Company shall be deemed to have been
sent notice of the meeting and, where requisite, of the purposes for which it was called.

Terms and
conditions for
electronic
communications

	204.	 	The board may from time to time issue, endorse or adopt terms and conditions relating
to the use of electronic means for the sending of notices, other documents and proxy
appointments by the Company to members or persons entitled by transmission and by members or
persons entitled by transmission to the Company.

Notice to
persons entitled
by transmission

	205.	 	A document or information may be sent or supplied by the Company to the person or
persons entitled by transmission to a share by sending it in any manner the Company may choose
authorised by these Articles for the sending of a document or information to a member,
addressed to them by name, or by the title of representative of the deceased, or trustee of the
bankrupt or by any similar description at the address (if any) in the United Kingdom as may be
supplied for that purpose by or on behalf of the person or persons claiming to be so entitled.
Until such an address has been supplied, a document or information may be sent in any manner in
which it might have been sent if the death or bankruptcy or other event giving rise to the
transmission had not occurred.

Transferees
etc. bound by prior
notice

	206.	 	Every person who becomes entitled to a share shall be bound by any notice in respect
of that share which, before his name is entered in the register, has been sent to a person from
whom he derives his title, provided that no person who becomes entitled by transmission to a
share shall be bound by any direction notice sent under Article 88 to a person from whom he
derives his title.

Proof of
sending/when
notices etc. deemed
sent by post

	207.	 	Proof that a document or information was properly addressed, prepaid and posted shall
be conclusive evidence that the document or information was sent or supplied. A document or
information sent by the Company to a member by post shall be deemed to have been received:

	 	(a)	 	if sent by first class post or special delivery post from an address in the United Kingdom
to another address in the United Kingdom, or by a postal service similar to first class post or
special delivery post from an address in another country to another address in that other
country, on the day following that on which the document or information was posted;
	 
	 	(b)	 	if sent by airmail from an address in the United Kingdom to an address outside the United
Kingdom, or from an address in another country to an address outside that country (including,
without limitation, an address in the United

Page 50

 

	 	 	 	Kingdom), on the third day following that on which the document or information was
posted;
	 
	 	(c)	 	in any other case, on the second day following that on which the document or information
was posted.

When notices
etc. deemed sent by
hand

	208.	 	A document or information sent by the Company to a member by hand shall be deemed to
have been received by the member when it is handed to the member or left at his registered
address or an address notified to the Company in accordance with Article 202.

Proof of
sending/when
notices etc. deemed
sent by electronic
means

	209.	 	Proof that a document or information sent or supplied by electronic means was properly
addressed shall be conclusive evidence that the document or information was sent or supplied. A
document or information sent or supplied by the Company to a member in electronic form shall be
deemed to have been received by the member on the day following that on which the document or
information was sent to the member. Such a document or information shall be deemed received by
the member on that day notwithstanding that the Company becomes aware that the member has failed
to receive the relevant document or information for any reason and notwithstanding that the
Company subsequently sends a hard copy of such document or information by post to the member.

When notices
etc. deemed sent by
website

	210.	 	A document or information sent or supplied by the Company to a member by means of a
website shall be deemed to have been received by the member:

	 	(a)	 	when the document or information was first made available on the website; or
	 
	 	(b)	 	if later, when the member is deemed by Article 207, 208 or 209 to have received notice of
the fact that the document or information was available on the website. Such a document or
information shall be deemed received by the member on that day notwithstanding that the Company
becomes aware that the member has failed to receive the relevant document or information for
any reason and notwithstanding that the Company subsequently sends a hard copy of such document
or information by post to the member.

Notice during
disruption of
services

	211.	 	Subject to the Companies Acts, if at any time the Company is unable effectively to
convene a general meeting by notices sent through the post in the United Kingdom as a result of
the suspension or curtailment of postal services, notice of general meeting may be sufficiently
given by advertisement in the United Kingdom. Any notice given by advertisement for the purpose
of this Article shall be advertised in at
least one newspaper having a national circulation. If advertised in more than one newspaper,
the advertisements shall appear on the same date. Such notice shall be deemed to have been sent
to all persons who are entitled to have notice of meetings sent to them on the day when the
advertisement appears. In any such case, the Company shall send confirmatory copies of the
notice by post, if at least seven days before the meeting the posting of notices to addresses
throughout the United Kingdom again becomes practicable.

Page 51

 

DESTRUCTION OF DOCUMENTS

Power of
Company to destroy
documents

	212.	 	The Company shall be entitled to destroy:

	 	(a)	 	all instruments of transfer of shares which have been registered, and all other documents
on the basis of which any entry is made in the register, at any time after the expiration of
six years from the date of registration;
	 
	 	(b)	 	all dividend mandates or variations or cancellations thereof and notifications of change of
address at any time after the expiration of two years from the date of recording;
	 
	 	(c)	 	all share certificates which have been cancelled at any time after the expiration of one
year from the date of the cancellation;
	 
	 	(d)	 	all paid dividend warrants and cheques at any time after the expiration of one year from
the date of actual payment;
	 
	 	(e)	 	all proxy appointments which have been used for the purpose of a poll at any time after the
expiration of one year from the date of use; and
	 
	 	(f)	 	all proxy appointments which have not been used for the purpose of a poll at any time after
one month from the end of the meeting to which the proxy appointment relates and at which no
poll was demanded.

Presumption
regarding destroyed
documents

	213.	 	It shall conclusively be presumed in favour of the Company that:

	 	(a)	 	every entry in the register purporting to have been made on the basis of an instrument of
transfer or other document destroyed in accordance with Article 212 was duly and properly made;
	 
	 	(b)	 	every instrument of transfer destroyed in accordance with Article 212 was a valid and
effective instrument duly and properly registered;
	 
	 	(c)	 	every share certificate destroyed in accordance with Article 212 was a valid and effective
certificate duly and properly cancelled; and
	 
	 	(d)	 	every other document destroyed in accordance with Article 212 was a valid and effective
document in accordance with its recorded particulars in the books or records of the Company,

PROVIDED ALWAYS THAT:

	 	(e)	 	the provisions of this Article and Article 212 shall apply only to the destruction of a
document in good faith and without notice of any claim (regardless of the parties thereto) to
which the document might be relevant;
	 
	 	(f)	 	nothing contained in this Article or Article 212 shall be construed as imposing on the
Company any liability in respect of the destruction of any such document earlier than the time
specified in Article 212 or in any other

Page 52

 

	 	 	 	circumstances which would not attach to the Company in the absence of this Article or
Article 212; and
	 
	 	(g)	 	any reference in this Article or Article 212 to the destruction of any document includes a
reference to its disposal in any manner.

Early
destruction

	214.	 	Any document referred to in Articles 212 and 213 may be destroyed earlier than the
relevant date authorised by those Articles, provided that a permanent record of the document is
made which record is not destroyed before that date.

UNTRACED SHAREHOLDERS

Power to
dispose of shares
of untraced
shareholders

	215.	 	The Company shall be entitled to sell, at the best price reasonably obtainable, the
shares of a member or the shares to which a person is entitled by transmission if:

	 	(a)	 	during the period of twelve years prior to the date of the publication of the
advertisements referred to in paragraph (b) of this Article (or, if published on different
dates, the first date) (the relevant period) at least three dividends in respect of the shares
in question have been declared and all dividend warrants and cheques which have been sent in
the manner authorised by these Articles in respect of the shares in question have remained
uncashed;
	 
	 	(b)	 	the Company shall as soon as practicable after expiry of the relevant period have inserted
advertisements both in a national daily newspaper and in a newspaper circulating in the area of
the last known address of such member or other person giving notice of its intention to sell
the shares; and
	 
	 	(c)	 	during the relevant period and the period of three months following the publication of the
advertisements referred to in paragraph (b) of this Article (or, if published on different
dates, the first date) the Company has received no indication either of the whereabouts or of
the existence of such member or person.

Further shares

	216.	 	If during any relevant period referred to in Article 215, further shares have been
issued in right of those held at the beginning of such period or of any previously issued
during such period and all the other requirements of this Article and Articles 215 and 217 to
219 (other than the requirement that they be in issue for twelve years) have been satisfied in
regard to the further shares, the Company may also sell the further shares.

Transfer on sale

	217.	 	To give effect to any sale pursuant to Article 215 or 216, the board may:

	 	(a)	 	where the shares are held in certificated form, authorise any person to execute an
instrument of transfer of the shares to, or in accordance with the directions of, the buyer; or
	 
	 	(b)	 	where the shares are held in uncertificated form, do all acts and things it considers
necessary or expedient to effect the transfer of the shares to, or in accordance with the
directions of, the buyer.

Page 53

 

Effectiveness
of transfer

	218.	 	An instrument of transfer executed by that person in accordance with Article 217(a)
shall be as effective as if it had been executed by the holder of, or person entitled by
transmission to, the shares. An exercise by the Company of its powers in accordance with
Article 217(b) shall be as effective as if exercised by the registered holder of or person
entitled by transmission to the shares. The transferee shall not be bound to see to the
application of the purchase money, and his title to the shares shall not be affected by any
irregularity in, or invalidity of, the proceedings in reference to the sale.

Proceeds of sale

	219.	 	The net proceeds of sale shall belong to the Company which shall be obliged to
account to the former member or other person previously entitled as aforesaid for an amount
equal to such proceeds. The Company shall enter the name of such former member or other person
in the books of the Company as a creditor for such amount. No trust shall be created in respect
of the debt, no interest shall be payable in respect of the same and the Company shall not be
required to account for any money earned on the net proceeds of sale, which may be used in the
Company’s business or invested in such a way as the board from time to time thinks fit.

WINDING UP

Liquidator may
distribute in
specie

	220.	 	If the Company is wound up, the liquidator may, with the sanction of a special
resolution of the Company and any other sanction required by the Insolvency Act 1986, divide
among the members in specie the whole or any part of the assets of the Company and may, for
that purpose, value any assets and determine how the division shall be carried out as between
the members or different classes of members. The liquidator may, with the same sanction, vest
the whole or any part of the assets in trustees for the benefit of the members and determine
the scope and terms of these trusts, but no member shall be compelled to accept any asset upon
which there is a liability.

Disposal of
assets by
liquidator

	221.	 	The power of sale of a liquidator shall include a power to sell wholly or partially
for shares or debentures or other obligations of another body corporate, either then already
constituted or about to be constituted for the purpose of carrying out the sale.

SHARE WARRANTS

	Share warrants
to bearer

	222.	 	The board may issue share warrants to bearer in respect of any fully paid shares under
a seal of the Company or in any other manner authorised by the board. Any share while
represented by such a warrant shall be transferable by delivery of the warrant relating to it.
In any case in which a warrant is so issued, the board may provide for the payment of dividends
or other moneys on the shares represented by the warrant by coupons or otherwise. The board may
decide, either generally or in any particular case or cases, that any signature on a warrant may
be applied by electronic or mechanical means or printed on it or that the warrant need not be
signed by any person.

Conditions of
issue of share
warrants

	223.	 	The board may determine, and from time to time vary, the conditions on which share
warrants to bearer shall be issued and, in particular, the conditions on which:

Page 54

 

	 	(a)	 	a new warrant or coupon shall be issued in place of one worn-out, defaced, lost or
destroyed (but no new warrant shall be issued unless the Company is satisfied beyond reasonable
doubt that the original has been destroyed); or
	 
	 	(b)	 	the bearer shall be entitled to attend and vote at general meetings; or
	 
	 	(c)	 	a warrant may be surrendered and the name of the bearer entered in the register in respect
of the shares specified in the warrant.

	 	 	The bearer of such a warrant shall be subject to the conditions for the time being in force in
relation to the warrant, whether made before or after the issue of the warrant. Subject to
those conditions and to the provisions of the Companies Acts, the bearer shall be deemed to be a
member of the Company and shall have the same rights and privileges as he would have if his name
had been included in the register as the holder of the shares comprised in the warrant.

No right in
relation to share

	224.	 	The Company shall not be bound by or be compelled in any way to recognise any right
in respect of the share represented by a share warrant other than the bearer’s absolute right to the warrant.

INDEMNITY

Indemnity to
directors,
officers, etc

	225.	 	Subject to the provisions of the Companies Acts, but without prejudice to any
indemnity to which the person concerned may otherwise be entitled, every director or other
officer of the Company (other than any person (whether an officer or not) engaged by the Company
as auditor) shall be indemnified out of the assets of the Company against any liability incurred
by him for negligence, default, breach of duty or breach of trust in relation to the affairs of
the Company, provided that this Article shall be deemed not to provide for, or entitle any such
person to, indemnification to the extent that it would cause this Article, or any element of it,
to be treated as void under the Act or otherwise under the Companies Acts.

Page 55

 

CONTENTS

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	 	 	 	 
	Preliminary
	 	 	 	 
	Table A
	 	 	1	 
	Definitions
	 	 	2	 
	Construction
	 	 	3	 
	 
	 	 	 	 
	Accounts
	 	 	 	 
	Right to inspect records
	 	 	195	 
	Sending of annual accounts
	 	 	196	 
	Summary financial statements
	 	 	197	 
	 
	 	 	 	 
	Alteration Of Share Capital
	 	 	 	 
	New shares subject to these Articles
	 	 	50	 
	Fractions arising
	 	 	51	 
	 
	 	 	 	 
	Alternate Directors
	 	 	 	 
	Power to appoint alternates
	 	 	118	 
	Alternates entitled to receive notice
	 	 	119	 
	Alternates representing more than one director
	 	 	120	 
	Expenses and remuneration of alternates
	 	 	121	 
	Termination of appointment
	 	 	122	 
	Method of appointment and revocation
	 	 	123	 
	Alternate not an agent of appointer
	 	 	124	 
	 
	 	 	 	 
	Appointment And Retirement Of Directors 
	 	 	 	 
	Number of directors to retire
	 	 	109	 
	Which directors to retire
	 	 	110	 
	When director deemed to be re-appointed
	 	 	111	 
	Eligibility for election
	 	 	112	 
	Separate resolutions on appointment
	 	 	113	 
	Additional powers of the Company
	 	 	114	 
	Appointment by board
	 	 	115	 
	Position of retiring directors
	 	 	116	 
	No share qualification
	 	 	117	 
	 
	 	 	 	 
	Borrowing Powers 
	 	 	 	 
	Power to borrow
	 	 	131	 
	Borrowing limit
	 	 	132	 
	Definitions
	 	 	133	 
	Treatment of capital
	 	 	134	 
	Moneys borrowed
	 	 	135	 
	Subsidiaries
	 	 	136	 

Page 56

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Determining whether limit breached
	 	 	137	 
	Persons dealing with the Company
	 	 	138	 
	 
	 	 	 	 
	Calls On Shares 
	 	 	 	 
	Power to make calls
	 	 	25	 
	Time when call made
	 	 	26	 
	Liability of joint holders
	 	 	27	 
	Interest payable
	 	 	28	 
	Deemed calls on allotment
	 	 	29	 
	Differentiation on calls
	 	 	30	 
	Payment of calls in advance
	 	 	31	 
	 
	 	 	 	 
	Capitalisation Of Profits And Reserves
	 	 	 	 
	Power to capitalise
	 	 	193	 
	 
	 	 	 	 
	Communications 
	 	 	 	 
	When notice required to be in writing
	 	 	198	 
	Methods of Company sending notice
	 	 	199	 
	Methods of member etc. sending document or information
	 	 	200	 
	Notice to joint holders
	 	 	201	 
	Registered address outside EEA
	 	 	202	 
	Deemed receipt of notice
	 	 	203	 
	Terms and conditions for electronic communications
	 	 	204	 
	Notice to persons entitled by transmission
	 	 	205	 
	Transferees etc. bound by prior notice
	 	 	206	 
	Proof of sending/when notices etc. deemed sent by post
	 	 	207	 
	When notices etc. deemed sent by hand
	 	 	208	 
	Proof of sending/when notices etc. deemed sent by electronic means
	 	 	209	 
	When notices etc. deemed sent by website
	 	 	210	 
	Notice during disruption of services
	 	 	211	 
	 
	 	 	 	 
	Delegation Of Powers Of The Board
	 	 	 	 
	Committees of the board
	 	 	127	 
	Local boards, etc
	 	 	128	 
	Agents
	 	 	129	 
	Offices including title “director”
	 	 	130	 
	 
	 	 	 	 
	Destruction Of Documents
	 	 	 	 
	Power of Company to destroy documents
	 	 	212	 
	Presumption regarding destroyed documents
	 	 	213	 
	Early destruction
	 	 	214	 
	 
	 	 	 	 
	Directors’Expenses 
	 	 	 	 
	Directors may be paid expenses
	 	 	144	 
	 
	 	 	 	 
	Directors’interests 
	 	 	 	 
	Authorisation under s175 of the Act
	 	 	148	 
	Director may contract with the Company and hold other offices etc.
	 	 	149	 
	Remuneration, benefits etc.
	 	 	150	 

Page 57

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Notification of interests
	 	 	151	 
	Duty of confidentiality to another person
	 	 	152	 
	Consequences of authorisation
	 	 	153	 
	Without prejudice to equitable principles or rule of law
	 	 	154	 
	 
	 	 	 	 
	Disqualification And Removal Of Directors 
	 	 	 	 
	Disqualification of a director
	 	 	139	 
	Power of Company to remove director
	 	 	140	 
	 
	 	 	 	 
	Dividends
	 	 	 	 
	Declaration of dividends
	 	 	179	 
	Interim dividends
	 	 	180	 
	Declaration and payment in different currencies
	 	 	181	 
	Apportionment of dividends
	 	 	182	 
	Dividends in specie
	 	 	183	 
	Scrip dividends: authorising resolution
	 	 	184	 
	Scrip dividends: procedures
	 	 	185	 
	Permitted deductions and retentions
	 	 	186	 
	Procedure for payment to holders and others entitled
	 	 	187	 
	Joint entitlement
	 	 	188	 
	Payment by post
	 	 	189	 
	Discharge to Company and risk
	 	 	190	 
	Interest not payable
	 	 	191	 
	Forfeiture of unclaimed dividends
	 	 	192	 
	 
	 	 	 	 
	Executive Directors 
	 	 	 	 
	Appointment to executive office
	 	 	145	 
	Termination of appointment to executive office
	 	 	146	 
	Emoluments to be determined by the board
	 	 	147	 
	 
	 	 	 	 
	Forfeiture And Surrender 
	 	 	 	 
	Notice requiring payment of call
	 	 	32	 
	Forfeiture for non-compliance
	 	 	33	 
	Sale of forfeited shares
	 	 	34	 
	Liability following forfeiture
	 	 	35	 
	Surrender
	 	 	36	 
	Extinction of rights
	 	 	37	 
	Evidence of forfeiture or surrender
	 	 	38	 
	 
	 	 	 	 
	General Meetings 
	 	 	 	 
	Annual general meetings
	 	 	52	 
	Class meetings
	 	 	53	 
	Convening general meetings
	 	 	54	 
	 
	 	 	 	 
	Gratuities, Pensions And Insurance 
	 	 	 	 
	Gratuities and pensions
	 	 	155	 
	Insurance
	 	 	156	 
	Directors not liable to account
	 	 	157	 
	Section 247 of the Act
	 	 	158	 

Page 58

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Indemnity 
	 	 	 	 
	Indemnity to directors, officers, etc
	 	 	225	 
	 
	 	 	 	 
	Lien 
	 	 	 	 
	Company to have lien on shares
	 	 	21	 
	Enforcement of lien by sale
	 	 	22	 
	Giving effect to sale
	 	 	23	 
	Application of proceeds
	 	 	24	 
	 
	 	 	 	 
	Minutes 
	 	 	 	 
	Minutes required to be kept
	 	 	171	 
	Conclusiveness of minutes
	 	 	172	 
	 
	 	 	 	 
	Non-executive Directors 
	 	 	 	 
	Arrangements with non-executive directors
	 	 	141	 
	Ordinary remuneration
	 	 	142	 
	Additional remuneration
	 	 	143	 
	 
	 	 	 	 
	Notice Of General Meetings 
	 	 	 	 
	Period of notice
	 	 	55	 
	Recipients of notice
	 	 	56	 
	Uncontactable shareholders
	 	 	57	 
	Contents of notice — general
	 	 	58	 
	Contents of notice —additional requirements
	 	 	59	 
	Article 63 arrangements
	 	 	60	 
	General meetings at more than one place
	 	 	61	 
	Interruption or adjournment where facilities inadequate
	 	 	62	 
	Other arrangements for viewing and hearing proceedings
	 	 	63	 
	Controlling level of attendance
	 	 	64	 
	Change in place and/or time of meeting
	 	 	65	 
	Meaning of participate
	 	 	66	 
	Accidental omission to send notice etc
	 	 	67	 
	Security
	 	 	68	 
	 
	 	 	 	 
	Number Of Directors 
	 	 	 	 
	Limits on number of directors
	 	 	108	 
	 
	 	 	 	 
	Powers Of The Board 
	 	 	 	 
	Business to be managed by board
	 	 	125	 
	Exercise by Company of voting rights
	 	 	126	 
	 
	 	 	 	 
	Proceedings At General Meetings 
	 	 	 	 
	Quorum
	 	 	69	 
	If quorum not present
	 	 	70	 
	Chairman
	 	 	71	 
	Directors entitled to speak
	 	 	72	 
	Adjournment: chairman’s powers
	 	 	73	 
	Adjournment: procedures
	 	 	74	 

Page 59

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Amendments to resolutions
	 	 	75	 
	Methods of voting
	 	 	76	 
	Declaration of result
	 	 	77	 
	Withdrawal of demand for poll
	 	 	78	 
	Conduct of poll
	 	 	79	 
	When poll to be taken
	 	 	80	 
	Notice of poll
	 	 	81	 
	Effectiveness of special resolutions
	 	 	82	 
	 
	 	 	 	 
	Proceedings of the board
	 	 	 	 
	Convening meetings and proceedings
	 	 	159	 
	Quorum
	 	 	160	 
	Powers of directors if number falls below minimum
	 	 	161	 
	Chairman and deputy chairman
	 	 	162	 
	Validity of acts of the board
	 	 	163	 
	Resolutions in writing
	 	 	164	 
	Meetings by telephone, etc
	 	 	165	 
	Directors’ power to vote on contracts in which they are interested
	 	 	166	 
	Shareholder approval
	 	 	167	 
	Division of proposals
	 	 	168	 
	Decision of chairman final and conclusive
	 	 	169	 
	 
	 	 	 	 
	Proxies And Corporate Representatives
	 	 	 	 
	Appointment of proxy: form
	 	 	98	 
	Execution of proxy
	 	 	99	 
	Proxies: other provision
	 	 	100	 
	Delivery/ receipt of proxy appointment
	 	 	101	 
	Authentication of proxy appointment not made by holder
	 	 	102	 
	Validity of proxy appointment
	 	 	103	 
	Rights of proxy
	 	 	104	 
	Vote by proxy
	 	 	105	 
	Corporate representatives
	 	 	106	 
	Revocation of authority
	 	 	107	 
	 
	 	 	 	 
	Record Dates 
	 	 	 	 
	Record dates for dividends, etc
	 	 	194	 
	 
	 	 	 	 
	Registers 
	 	 	 	 
	Overseas and local registers
	 	 	177	 
	Authentication and certification of copies and extracts
	 	 	178	 
	 
	 	 	 	 
	Secretary 
	 	 	 	 
	Appointment and removal of secretary
	 	 	170	 
	 
	 	 	 	 
	Share Capital 
	 	 	 	 
	Limited liability
	 	 	4	 
	Shares with special rights
	 	 	5	 
	Uncertificated shares
	 	 	6	 
	Not separate class of shares
	 	 	7	 

Page 60

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Exercise of Company’s
entitlements in respect of
uncertificated share
	 	 	8	 
	Allotment
	 	 	9	 
	Redeemable shares
	 	 	10	 
	Section 551 authority
	 	 	11	 
	Section 561 disapplication
	 	 	12	 
	Allotment after expiry
	 	 	13	 
	Definitions
	 	 	14	 
	Commissions
	 	 	15	 
	Trusts not recognised
	 	 	16	 
	 
	 	 	 	 
	Share Certificates 
	 	 	 	 
	Members’ rights to certificates
	 	 	19	 
	Renewed certificates
	 	 	20	 
	 
	 	 	 	 
	Share Warrants 
	 	 	 	 
	Share warrants to bearer
	 	 	222	 
	Conditions of issue of share warrants
	 	 	223	 
	No right in relation to share
	 	 	224	 
	 
	 	 	 	 
	The Seal 
	 	 	 	 
	Authority required for use of seal
	 	 	173	 
	Certificates for shares and debentures
	 	 	174	 
	Official seal for use abroad
	 	 	175	 
	Execution of instrument as a deed under hand
	 	 	175	 
	Delivery of deeds
	 	 	176	 
	 
	 	 	 	 
	Transfer Of Shares 
	 	 	 	 
	Form and execution of transfer of certified shares
	 	 	39	 
	Transfers of partly paid certificated shares
	 	 	40	 
	Invalid transfers of certificated shares
	 	 	41	 
	Transfers by recognised persons
	 	 	42	 
	Notice of refusal to register
	 	 	43	 
	No fee payable on registration
	 	 	44	 
	Retention of transfers
	 	 	45	 
	 
	 	 	 	 
	Transmission Of Shares 
	 	 	 	 
	Transmission
	 	 	46	 
	Elections permitted
	 	 	47	 
	Elections required
	 	 	48	 
	Rights of persons entitled by transmission
	 	 	49	 
	 
	 	 	 	 
	Untraced Shareholders
	 	 	 	 
	Power to dispose of shares of untraced shareholders
	 	 	215	 
	Further shares
	 	 	216	 
	Transfer on sale
	 	 	217	 
	Effectiveness of transfer
	 	 	218	 
	Proceeds of sale
	 	 	219	 
	 
	 	 	 	 
	Variation of rights
	 	 	 	 

Page 61

 

	 	 	 	 	 
	 	 	ARTICLE	 
	 
	Method of varying rights
	 	 	17	 
	When rights deemed to be varied
	 	 	18	 
	 
	 	 	 	 
	Votes of Members 
	 	 	 	 
	Right to vote on a show of hands
	 	 	83	 
	Right to vote on a poll
	 	 	84	 
	Votes of joint holders
	 	 	85	 
	Member under incapacity
	 	 	86	 
	Calls in arrears
	 	 	87	 
	Section 793 of the Act: restrictions if in default
	 	 	88	 
	Copy of notice to interested persons
	 	 	89	 
	When restrictions cease to have effect
	 	 	90	 
	Board may cancel restrictions
	 	 	91	 
	Conversion of uncertificated shares
	 	 	92	 
	Supplementary provisions
	 	 	93	 
	Section 794 of the Act
	 	 	94	 
	Errors in voting
	 	 	95	 
	Objection to voting
	 	 	96	 
	Voting: additional provisions
	 	 	97	 
	 
	 	 	 	 
	Winding up
	 	 	 	 
	Liquidator may distribute in specie
	 	 	220	 
	Disposal of assets by liquidator
	 	 	221	 

Page 62exv4w3

Exhibit 4.3

 

RULES OF THE REED ELSEVIER GROUP PLC

BONUS INVESTMENT PLAN 2010

 

(Approved by the shareholders of Reed Elsevier PLC

in general meeting on 21 April 2010)

(Approved by the shareholders of Reed Elsevier NV

in general meeting on 20 April 2010)

Adopted by the directors of Reed Elsevier Group plc on 21 April 2010

 

 

THE REED ELSEVIER GROUP PLC BONUS INVESTMENT PLAN 2010

1. Definitions

1.1 In this Plan, unless the context otherwise requires, the following expressions have the
following meanings:

Adoption Date means 21 April 2010;

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

Cash Investment means the proportion or amount of an Employee’s Investment Amount which he has
chosen to source in cash;

Committee means the remuneration committee of the board of directors of the Company or other duly
authorised committee;

Company means Reed Elsevier Group plc;

Control has the meaning given to it by section 995 Income Taxes Act 2007;

Date of Grant means the date on which a Matching Share Award is granted by the Committee under Rule
4.2;

Dealing Restrictions means any restrictions on, or requirement for, approvals for dealing in Shares
whether under the Company’s, RE PLC’s or RE NV’s share dealing rules, the provisions of the Model
Code for Securities Transactions by Directors of Listed Companies, the provisions of the Listing
Rules of the UK Listing Authority or the City Code on Takeovers and Mergers or any of their
equivalents in any applicable jurisdiction;

Dividend Equivalent means a right to a cash payment or Shares in accordance with Rule 7;

Dutch ADS means an American Depositary Share representing a Dutch Share;

Dutch Share means an ordinary share in the capital of RE NV or any other shares representing those
shares following any Capital Reorganisation;

Employee means any employee or executive director of any member of the Group or a Qualifying
Company;

Existing Shares means, unless the Committee specifies otherwise in an Invitation, any Shares which
are beneficially owned by a Participant, excluding any Shares which the Participant holds as
Personal Shares under the Reed Elsevier Group plc Growth Plan;

Gross Investment Amount means the Investment Amount prior to the deduction of income tax and
employee’s social security contributions;

Group means the Company and every company which is under the Control of the Company, and member of
the Group will be construed accordingly;

Page 1

 

Investment Amount means the percentage or amount of his Investment Opportunity which a Participant
invests in the Plan in accordance with Rule 3.3(a);

Investment Date means such date as is specified by the Committee in an Invitation for the purchase
of Investment Shares or, if Dealing Restrictions are in place on that date, such later date when
the Dealing Restrictions lift;

Investment Opportunity means an amount equal to an Employee’s net target bonus opportunity as at
the 31 December preceding the Date of Grant under an annual bonus scheme operated by any member of
the Group, or such lesser amount determined on any other basis as the Committee may specify from
time to time;

Investment Period means the period specified in Rule 5.4(b);

Investment Shares means Shares held by a Participant in this Plan in accordance with Rules 3.4 to
3.6 of this Plan;

Invitation means an invitation to participate in the Plan issued to an Employee by the Committee in
accordance with Rule 3.2;

Matching Share Award means, unless Schedule 5 applies, a right granted under Rule 4 to receive
Shares without payment and references to Matching Shares will be construed accordingly;

Participant means any individual who holds a subsisting Matching Share Award (including where the
context permits, the legal personal representatives of a deceased Participant);

Performance Period means the period, as specified in Rule 5.4(c) after which the Performance Target
is measured;

Performance Target means, unless the Committee determines otherwise at the Date of Grant, the
conditions set out in Schedule 1 and measured after the end of the Performance Period applicable to
Matching Share Awards;

Plan means this Reed Elsevier Group plc Bonus Investment Plan 2010 as amended from time to time;

Price means the price or the mean average of the prices, as applicable, at which Investment Shares
are purchased pursuant to Rule 3.4;

Qualifying Company means each of RE PLC and RE NV;

RE NV means Reed Elsevier NV;

RE PLC means Reed Elsevier PLC;

Rules means the rules of the Plan;

Share means a UK Share, a Dutch Share, a UK ADS and a Dutch ADS and Shareholder will be construed
accordingly;

Termination Date means the date on which a Participant ceases to be an Employee;

Page 2

 

UK ADS means an American Depositary Share representing a UK Share;

UK Share means an ordinary share in the capital of RE PLC or any other shares representing those
shares following any Capital Reorganisation;

Normal Vesting Date means the date, following the end of the Performance Period, on which the
Committee determines the extent to which the Performance Target has been satisfied or, if there are
Dealing Restrictions in place on that date, such later date when those Dealing Restrictions lift;

Vesting means the Participant becoming absolutely entitled to receive the Shares comprised in his
Matching Share Award in accordance with these Rules and Vest and Vested will be construed
accordingly.

1.2 References to any statute or statutory instrument or to any part or parts thereof include any
modification, amendment or re-enactment thereof for the time being in force.

1.3 Words of the masculine gender will include the feminine and vice versa and words in the
singular will include the plural and vice versa unless in either case the context otherwise
requires or is otherwise stated.

1.4 The Committee may establish additional schedules to the Plan for the benefit of employees
outside the UK, based on the Plan but modified to take account of local tax, exchange control or
securities laws in overseas territories.

2. Eligibility

Employees are eligible to participate in the Plan as selected by the Committee. Employees under
notice of termination of employment at the Date of Grant are not eligible to participate, unless
the Committee determines otherwise.

3. Investment Shares

Investment Opportunity

3.1 The Committee may invite selected Employees to invest a specified percentage, up to a maximum
of 100%, of their Investment Opportunity (or such lesser amount as specified by the Committee from
time to time) in Investment Shares in accordance with the terms of this Plan.

Invitation to Participate

3.2 Following the notification of the amount of any annual bonus payable to the Employee for any
financial year, Invitations to participate in the Plan will be sent to selected Employees. The
Invitation will specify:

	(a)	 	the Investment Opportunity;

	(b)	 	the maximum percentage of the Investment Opportunity which the Employee may invest in the
Plan;

Page 3

 

	(c)	 	the minimum percentage of the Investment Opportunity which the Employee may invest in the
Plan and any applicable multiples of that minimum percentage;

	(d)	 	the sources which an Employee may use to invest in the Plan, which will be any or all of the
following as determined by the Committee: net annual bonus received in respect of the
financial year preceding the Invitation, any other cash funds available to the Employee and
Existing Shares;

	(e)	 	the date by which the Employee must accept his Invitation in order to participate in the
Plan;

	(f)	 	the date or dates by which and the person to whom the Employee must transfer his Investment
Amount in order to be able to participate in the Plan;

	(g)	 	the Investment Date;

	(h)	 	the method by which the number of Shares subject to a Matching Share Award is calculated and
the Performance Target; and

	(i)	 	such other information as the Committee may determine.

Requirements for acceptance of an Invitation

3.3 When accepting an Invitation, an Employee will:

	(a)	 	specify his chosen Investment Amount;
	 
	(b)	 	to the extent that the Invitation allowed more than one source for the Investment Amount,
specify the percentage of his Investment Amount which he wishes to contribute by reference to
each source;
	 
	(c)	 	to the extent that the Investment Amount comprises a Cash Investment, agree to pay directly
or, if appropriate, direct his employing company to pay, that amount to the Company (or such
other person as the Committee may specify) by the specified date;
	 
	(d)	 	to the extent that the Investment Amount comprises Existing Shares, agree to transfer the
required number of Existing Shares (to such person as the Committee may specify) by the
specified date, or to take any alternative action with regard to such Existing Shares as
determined by the Committee;
	 
	(e)	 	specify the proportion of UK Shares, Dutch Shares, UK ADSs, and Dutch ADSs (i) which should
comprise the Investment Shares to be acquired with the Cash Investment on the Investment Date
and/or (ii) which will comprise the Existing Shares being transferred;
	 
	(f)	 	agree to comply with such arrangements for the holding of the Investment Shares as the
Committee may determine appropriate;
	 
	(g)	 	agree that he will execute such tax elections as the Committee may consider necessary or
desirable including without limitation an election under section 431 Income Tax (Earnings and
Pensions) Act 2003;

Page 4

 

	(h)	 	agree that he will comply with such other conditions as the Committee may specify as a
condition of grant of a Matching Share Award; and
	 
	(i)	 	complete any other aspects of the Invitation as required.

Purchase of Investment Shares

3.4 Subject to the Company (or such other person as the Committee specified) having received the
Participant’s Cash Investment by the specified date, the Committee will arrange to purchase, on the
Investment Date, the number of Shares (of the type specified by the Employee in his completed
Invitation) which can be purchased with the Participant’s Cash Investment. However, if it is not
reasonably practicable to make the required purchases of Shares on behalf of all Employees
participating in the Plan on the Investment Date, then the Shares will be purchased over a number
of dealing days and each Participant will be treated as having acquired his Investment Shares at
the mean average of the prices at which all such Shares were purchased. A Participant will have no
entitlement to be repaid any part of the Cash Investment which is insufficient to purchase a whole
Share.

3.5 A Participant’s total number of Investment Shares will be the aggregate of (i) the nearest
whole number of Shares that are acquired pursuant to Rule 3.4 with the Cash Investment provided by
the Employee and (ii) the Existing Shares which the Employee elected to commit to the Plan pursuant
to Rule 3.3(d) above, which are transferred into the Plan by the specified date and which are
deemed to be invested in the Plan at the Price. A Participant will be notified of his total number
of Investment Shares.

3.6 If an Employee makes an election under Rule 3.3 but (i) that election is made after the date
specified in the Invitation or (ii) he fails to provide funds to enable the Investment Shares to be
purchased by the specified date, the Committee will not be required to proceed with granting a
Matching Share Award but may in its absolute discretion decide to do so, subject to the Rules of
this Plan, provided that the Investment Shares will then be purchased at the price prevailing on
the dealing day on which the Investment Shares are actually purchased and the Shares to be
comprised in the Matching Share Award will be calculated accordingly.

Retention of Investment Shares

3.7 A Participant’s Investment Shares must, except to the extent expressly provided otherwise by
these Rules, continue to be held under the Plan until the date of Vesting of the related Matching
Share Award.

3.8 During the Investment Period, the Participant will not sell, transfer, pledge, assign or
otherwise dispose of all or any Investment Shares, nor request the transfer of such Investment
Shares to himself (provided that the Committee may in its absolute discretion allow such actions or
release the Investment Shares to the Participant if it considers that exceptional circumstances
exist, in which case the Committee will determine the extent to which the related Matching Share
Award will be scaled back, if at all, and in what manner). Any such action or attempt at such
action by the Participant (without consent) will result in the automatic lapse of the Matching
Share Award.

3.9 At the end of the Investment Period, the Participant’s Investment Shares will be released to
him as soon as reasonably practicable.

Page 5

 

Beneficial ownership of Investment Shares

3.10 The beneficial interest in the Investment Shares, to the extent not already held by the
Participant will pass to the Participant on the Investment Date or the date upon which they are
otherwise purchased pursuant to Rules 3.4 or 3.6. During the Investment Period, the Participant
will be entitled to receive all dividends payable in respect of the Investment Shares and will have
the rights commonly enjoyed by a beneficial owner of Shares provided that any voting rights will be
exercisable by a direction in writing given to the trustee or other nominee in whose name the
Investment Shares are registered. The Participant will have no corresponding rights in respect of
the Shares in the Matching Share Award prior to Vesting.

4. Grant of Matching Share Awards

Number of Shares comprised in a Matching Share Award

4.1 On the Investment Date, the Committee will grant a Matching Share Award to an Employee who has
committed Investment Shares to the Plan. Except as otherwise provided in these Rules, the number
of Shares comprised in the Matching Share Award will be the nearest whole number of Shares which
can be acquired at the Price with the Participant’s Gross Investment Amount. The Matching Share
Award will include UK Shares, Dutch Shares, UK ADSs and Dutch ADSs in the same proportions as those
comprised in the Investment Shares. If an Employee has committed to transfer Existing Shares into
the Plan to make up part or all of his Investment Amount, and then fails to transfer the required
value of Existing Shares by the specified date, any Matching Share Award already granted to him
will immediately lapse in whole or in part as determined by the Committee.

Timing of grant of Matching Share Award

4.2 A Matching Share Award will normally be granted by the Committee within the period of 42 days
commencing on:

	(a)	 	in respect of the grant of Matching Share Awards in 2010, the day immediately following the
day on which the Plan was approved by RE PLC in general meeting and by RE NV in general
meeting;
	 
	(b)	 	the date on which a Qualifying Company makes an announcement of its results for the full
year, the half year or any other interim results or trading update; and
	 
	(c)	 	any other date when the Committee resolves that exceptional circumstances exist which justify
the grant of a Matching Share Award,

If Dealing Restrictions remain in force during such period (or for such longer period as the
Committee thinks fit) the Committee will either:

	 	(i)	 	invite the Employee to reconsider whether he wishes to elect to
participate in the Plan; or
	 
	 	(ii)	 	withdraw the Invitation.

Page 6

 

5. Terms of Matching Share Awards

5.1 The grant of a Matching Share Award is conditional upon a Participant agreeing to comply with
any arrangements specified by the Company for the payment of tax and social security contributions
in respect of Shares to which he is or may become entitled under the Plan including, without
limitation (i) the right to sell on the Participant’s behalf sufficient Shares to satisfy any tax
or social security contributions liability on his part for which any member of the Group may be
liable and (ii) entering into any election under Chapter 2 of Part 7 of the Income Tax (Earnings &
Pensions) Act 2003 specified by the Company.

5.2 Matching Share Awards will be granted on the basis that they only Vest to the extent that the
Performance Target has been satisfied.

5.3 The Committee may make the grant of Matching Share Awards subject to any other conditions it
determines appropriate including requiring a Participant to agree to comply with certain
post-employment restrictive covenants.

5.4 Matching Share Awards will be granted by deed. Each Participant will receive information
(electronically or in hard copy) following the Date of Grant summarising the main terms of the
Matching Share Award. This summary may include the following information:

	(a)	 	The Number of Shares — number of Investment Shares and number of Shares comprised in the
Matching Share Award and in what proportion they comprise UK Shares, Dutch Shares, UK ADSs
and/or Dutch ADSs.
	 
	(b)	 	The Investment Period — The Investment Period will commence on the Investment Date and will
expire on the earlier of the Normal Vesting Date or other date of Vesting under these Rules .
	 
	(c)	 	The Performance Period — The Performance Period will be the period of three consecutive
financial years commencing with the financial year in which the Date of Grant falls.
	 
	(d)	 	Details of the Performance Target applicable to Matching Share Awards.
	 
	(e)	 	The terms of any other conditions imposed pursuant to rules 5.1 and 5.3.
	 
	(f)	 	Which (if any) Schedules to the Plan apply to the Matching Share Award.

6. Normal Vesting of Matching Share Awards

6.1 Except as otherwise provided in these Rules, the number of Matching Shares which Vest on the
Normal Vesting Date will be determined by the Committee following the expiry of the Performance
Period by reference to the extent to which the Performance Target has been satisfied and any other
conditions to which the Matching Share Award is subject are fulfilled or waived. A Matching Share
Award will lapse on the Normal Vesting Date to the extent that it does not Vest.

6.2 The Investment Shares together with the Vested Matching Shares will be released to the
Participant as soon as reasonably practicable following the Normal Vesting Date along with the
Dividend Equivalent.

Page 7

 

7. Entitlement to Dividend Equivalents

7.1 In addition to any Shares which a Participant becomes entitled to on the Vesting of a Matching
Share Award, the Participant will, subject to Rule 7.3, also be entitled to a cash payment equal in
value to the ordinary dividends (excluding any associated tax credit) which would have been paid on
the Vested Matching Shares during the period commencing at the start of the Performance Period and
ending on the earlier of (i) the end of the Performance Period and (ii) the Vesting of the Matching
Share Award.

7.2 The cash payment to which the Participant becomes entitled under Rule 7.1:

	(a)	 	will be calculated (in such manner as the Committee sees fit) by reference to the currency
payment of the underlying dividend (and paid in such currency as the Committee sees fit);
	 
	(b)	 	will be calculated without any entitlement to interest (or other type of investment return)
in the period between the dividend payment date and Vesting;
	 
	(c)	 	will be paid (subject to such deductions as are required by law) within one month of Vesting;
and
	 
	(d)	 	will be calculated by reference to ordinary dividends and without regard to special dividends
or distributions or dividends-in-specie;

7.3 Instead of making a cash payment, the Committee may in its discretion satisfy any entitlement
to Dividend Equivalents arising in accordance with Rule 7.1 by transferring existing Shares with an
equivalent value (as determined at the time of Vesting).

7.4 For the avoidance of doubt, any payment referred to in this Rule 7 does not represent an
entitlement to actual dividends on the underlying Shares, by reason of the Participant not being
beneficial owner of the Shares at that time.

8. Termination of Employment

Participant gives or receives notice

8.1 Except as otherwise provided in these Rules, in the event that a Participant gives or receives
notice of termination of employment for any reason other than those set out in Rules 8.2 and 8.4, a
Matching Share Award will automatically lapse on the date on which notice is given or received. The
Participant’s Investment Shares will be released to him as soon as reasonably practicable after the
date of notice.

Approved Leaver

8.2 Except as otherwise provided in these Rules, in the event that the Participant ceases to be an
Employee during the Investment Period by reason of:

	(a)	 	redundancy (as defined in section 139 of the Employment Rights Act 1996);
	 
	(b)	 	retirement with the consent of the Company;

Page 8

 

	(c)	 	the sale of the company or business in which the Participant is employed out of the Group; or
	 
	(d)	 	any other reason the Committee, in its absolute discretion, determines:

	 	(i)	 	the Matching Share Award will continue in force over a Pro-rated
Number of Shares until the end of the Investment Period and will lapse as to the
balance on the Termination Date. The Matching Share Award will Vest on the
Normal Vesting Date in accordance with Rule 6; and
	 
	 	(ii)	 	the Participant will be required to retain a Pro-rated Number of
Investment Shares in the Plan until the end of the Investment Period, at which
time those Shares will be released to the Participant. The balance of the
Investment Shares will be released to the Participant as soon as reasonably
practicable following the Termination Date.

8.3 The Committee has discretion to vary the application of Rule 8.2 and determine that a
Participant’s Matching Share Award and Investment Shares should be treated as set out in Rule 8.4
instead.

Death, Injury, Disability and Ill-health.

8.4 Save as otherwise provided in these Rules, in the event that the Participant ceases to be an
Employee during the Investment Period:

	(a)	 	by reason of death, injury, disability or ill-health:

	 	(i)	 	the Shares comprised in a Matching Share Award will Vest over a
Pro-rated Number of Shares subject to performance. The Performance Target will
be assessed based on progress made against targets at the Termination Date as
determined at the Committee’s absolute discretion. Such determination will take
place as soon as practicable after the Termination Date and to the extent that
the Matching Share Award does not Vest on the date of determination, it will
immediately lapse; and
	 
	 	(ii)	 	the Investment Shares will be released in full to the Participant
or his personal representatives (as applicable) as soon as reasonably
practicable following the Termination Date.

8.5 The Committee has discretion to vary the application of Rule 8.4 and determine that:

	(a)	 	a Participant’s Matching Share Award and Investment Shares should be treated as set out in
Rule 8.2 instead; or

	(b)	 	the Performance Target will be waived and/or Shares comprised in a Matching Share Award will
Vest in full on the Termination Date and the Investment Shares will be released in full to the
Participant or his personal representatives (as applicable) as soon as reasonably practicable
following the Termination Date.

Page 9

 

8.6 For the purposes of this Rule 8, the Pro-rated Number will be such number of Shares as is
determined by multiplying the number of Investment Shares or Shares comprised in a Matching Share
Award (as applicable) by A/B where A is the number of complete calendar months which the
Participant was employed during the Performance Period and B is 36.

9. Claw-Back Arrangements

Breach of Restrictive Covenants

9.1 If a Participant breaches any term of his post-termination restrictive covenants (such breach
to be determined by the Committee acting fairly and reasonably), any unvested Matching Share Awards
will lapse on the date of the Committee’s determination and the Committee may require him to pay to
the Company or any other member of the Group, within seven days of written demand from the Company,
the Relevant Amount (as defined in Rule 9.2 below).

9.2 The Relevant Amount is an amount equal to A minus both B and C where:

A is an amount equal to the pre-tax gain realised by the Participant in respect of any Matching
Share Awards and Dividends Equivalents in the period beginning six months before the Termination
Date and ending when the Participant’s restrictive covenants cease to apply. For these purposes,
the gain will be the sum of the market value of the Vested Shares when received by the Participant
and the related Dividend Equivalents, and such gain will be determined irrespective of whether the
Participant has sold or retained the Shares so acquired;

B is an amount equal to the tax and social security charges and liabilities incurred by the
Participant in respect of A; and

C is any payment of the Claw-back Amount, determined in accordance with Rule 9.4, in respect of A.

Materially misstated financial or other data

9.3 If the Committee, within two years after the Vesting of a Matching Share Award, considers that
the Vesting of the Matching Share Award and/or the payment of Dividend Equivalents was determined
on the basis of materially misstated financial or other data (the Incorrect Award), it will, unless
it determines otherwise, recover the Claw-back Amount (as defined in Rule 9.4 below) by taking one
or more of the following actions:

	(a)	 	reduce any outstanding unvested Matching Share Awards by the Claw-back Amount; and/or
	 
	(b)	 	reduce any future Matching Share Awards by the Claw-back Amount; and/or
	 
	(c)	 	require the Participant to pay to the Company, within thirty days of a written demand from
the Company, the Claw-back Amount.

9.4 The Claw-back Amount will be the difference between (i) the Incorrect Award and (ii) the
Matching Share Award and Dividend Equivalents that would have Vested or been payable had the
correct data, as determined by the Committee acting fairly and reasonably, been used. This may be
expressed as a number of Shares or

Page 10

 

a monetary amount or a combination thereof as the Committee considers appropriate. In determining
the Claw-back Amount, the Committee may take into account such matters as it sees fit including,
but not limited to:

	(a)	 	the difference between the Incorrect Award and the correct Matching Share Award;
	 
	(b)	 	any gain made by the Participant on the sale of Shares comprised in the Matching Share Award;
	 
	(c)	 	any tax and/or dealing costs incurred by the Participant in connection with the Incorrect
Award, and
	 
	(d)	 	whether the Participant has made a payment pursuant to Rules 9.1 to 9.2 which would take
account of Shares subject to an Incorrect Award.

9.5 By accepting a Matching Share Award, a Participant will be bound by this Rule 9 notwithstanding
(i) that it may only be applicable after the release of Shares under these Rules and (ii) whether
or not the essential terms of this Rule 9 have been separately notified to each Participant.

10. Change of Control of a Qualifying Company

10.1 Except as otherwise provided in these Rules, if any person:

	(a)	 	obtains Control of a Qualifying Company as a result of making an offer to acquire Shares
which is either unconditional or is made on a condition such that if it is satisfied the
person making the offer will have Control of that Qualifying Company;
	 
	(b)	 	becomes bound or entitled to acquire Shares under sections 979 and 983 of the Companies Act
2006 (or in relation to RE NV becomes entitled to acquire compulsorily Shares held by minority
shareholders); or
	 
	(c)	 	obtains Control of a Qualifying Company in pursuance of a compromise or arrangement
sanctioned by the Court under section 899 of the Companies Act 2006 (or in relation to RE NV
under any equivalent legislative provision in the Netherlands),

then any unvested Matching Share Awards over Shares in that Qualifying Company (but not those in
the other Qualifying Company) will Vest in respect of the Pro-rated Number within 30 days of the
relevant event, subject to the Performance Target. The Performance Target will be assessed based
on progress made against targets as at the date of the relevant event as determined by the
Committee in its absolute discretion.

10.2 Any Matching Share Award over Shares in that Qualifying Company which do not Vest as a result
of the relevant event will lapse on the relevant event.

10.3 The Investment Shares in that Qualifying Company (but not those in the other Qualifying
Company) will be released as soon as reasonably practicable after the date of the relevant event.

Page 11

 

10.4 For the purposes of this Rule 10, the Pro-rated Number will be such number of Shares as is
determined by multiplying the number of Shares comprised in a Matching Share Award by A/B where A
is the number of complete calendar months between the start of the Performance Period and the
relevant event (but cannot exceed 36) and B is 36.

11. Change of Control of the Company

Except as otherwise provided in these Rules, the provisions of Rule 10 will apply with any
necessary changes in the event that any person (either alone or together with any person acting in
concert with him) obtains Control of the Company and the Shares comprised in Matching Share Awards
which may Vest, and the Investment Shares which may be released, as a result of the relevant event
will be Shares in both Qualifying Companies.

12. Internal Reorganisation 

12.1 Rules 10 and 11 will not apply if the purpose and effect of the change of Control or scheme of
arrangement is:

	(a)	 	to create a new holding company for the relevant Qualifying Company, such company having
substantially the same Shareholders and proportionate shareholdings as those of the Qualifying
Company immediately prior to the scheme of arrangement;
	 
	(b)	 	to give one Qualifying Company Control (directly or indirectly) of the other Qualifying
Company;
	 
	(c)	 	the person obtaining Control of the Company is one of the Qualifying Companies or a company
under the Control of one or both of them; or
	 
	(d)	 	the Company remains under the ultimate Control of the Shareholders of the Qualifying
Companies immediately prior to the relevant transaction affecting the Company.

12.2 If Rule 12.1 applies:

	(a)	 	Matching Share Awards will not Vest and Investment Shares will not be released as a result
of the relevant event;
	 
	(b)	 	a Matching Share Award will instead be exchanged for an equivalent award over such shares as
the Committee determines appropriate;
	 
	(c)	 	Investment Shares will instead be exchanged for shares or cash and continue to be subject to
the Plan on such terms as the Committee determines appropriate; and
	 
	(d)	 	the Committee may make any modifications to the Performance Target as it determines
appropriate.

12.3 The Committee may vary the application of this Rule 12 so that it applies to Matching Share
Awards and Investment Shares over Shares in both Qualifying Companies or to Shares in only one
Qualifying Company.

Page 12

 

12.4 Where Rule 12 applies, a Participant will not be treated as ceasing to be an Employee until he
ceases to be employed by a company which is either the relevant holding company or a subsidiary of
the holding company (within the meaning of section 1159 of the Companies Act 2006).

13. Rollover on a Change of Control

13.1 The Committee may determine that Rules 10 or 11 will not apply on a change of Control of a
Qualifying Company or the Company (as applicable) and may, with the consent of the person obtaining
Control, (i) determine that the Matching Share Awards will be rolled over in accordance with either
the provisions of Rule 12.2 or Rule 13.2 or (ii) allow the Participants to choose between Vesting
under Rules 10 or 11 as applicable and rollover in accordance with, as determined by the Committee,
Rule 12.2 or Rule 13.2.

13.2 The Committee can determine that Matching Share Awards are rolled over in accordance with the
following terms:-

	(a)	 	the Performance Target will be assessed based on progress made against targets as at the date
of the relevant event as determined by the Committee in its absolute discretion;
	 
	(b)	 	to the extent that the Performance Target has been met, a Matching Share Award will be
exchanged for an equivalent award over such shares as agreed between the Committee and the
person obtaining Control, and will Vest on the Normal Vesting Date subject to the Participant
remaining in employment within the acquirer group of companies (unless Rules 8.2 to 8.6 apply)
and will be subject to the Rules as they last had effect in relation to the Matching Share
Award that was rolled-over;
	 
	(c)	 	to the extent that the Performance Target has not been met, the Matching Share Award will
immediately lapse; and
	 
	(d)	 	the Committee may specify such requirements in relation to the Investment Shares as it
determines appropriate.

13.3 For the avoidance of doubt, in Rules 10, 11, 12 and 13, “Committee” means those people who
were members of the Committee immediately before the event by virtue of which the applicable Rule
applies.

14. Voluntary winding up

The provisions of Rule 10 will apply with any necessary changes in the event that notice is duly
given of a resolution for a voluntary winding up of a Qualifying Company provided
that, all references in that Rule to the date of the relevant event will be treated as
references to the date on which notice is given for the voluntary winding-up of a Qualifying
Company.

15. Adjustments

15.1 In the event of:

	 	(i)	 	any Capital Reorganisation; or

Page 13

 

	 	(ii)	 	the implementation by a Qualifying Company of a demerger or the
payment by a Qualifying Company of a super-dividend which would otherwise
materially affect the value of a Matching Share Award;

	(a)	 	the number of Shares comprised in the Participant’s Matching Share Award will be adjusted in
such manner as the Committee, in its absolute discretion, thinks fit; and
	 
	(b)	 	a Participant will in respect of his Investment Shares be treated in the same manner as any
other holder of Shares, except that (unless the Committee determines otherwise):

	 	(i)	 	in the event of a rights issue in respect of Investment Shares,
the Participant (or other nominee holding Investment Shares on his behalf) will
be required to sell sufficient rights nil-paid (at such time during the rights
issue as the Committee thinks fit) as will enable the Participant to acquire
with the proceeds of sale the remainder of the Participant’s rights entitlement
PROVIDED THAT the Participant may elect to take up in a personal
capacity the rights that would have been sold (and such Shares will not be
subject to this Plan) subject to the Participant providing sufficient funds to
give effect to his obligation under the first part of this sub-paragraph (i);
	 
	 	(ii)	 	in the event of receipt of cash (other than dividends paid in the
normal course) or securities (other than Shares) in respect of Shares (on a
demerger or other reorganisation of the share capital of a Qualifying Company),
the Committee will in its absolute discretion determine whether such cash or
securities will be released to the Participant or whether the nominee holding
Shares on behalf of the Participant will be required to apply that cash (or the
proceeds of sale of such securities), after allowing for tax thereon, in the
purchase of further Investment Shares to be held on behalf of the Participant.

16. Source of Shares

Shares required to satisfy the rights of Participants with respect to Investment Shares and
Matching Share Awards will be from purchases on a recognised stock exchange. No new Shares will be
issued or Shares transferred out of treasury in connection with the Plan.

17. Rights attaching to shares transferred pursuant to Matching Share Awards

17.1 All Shares transferred upon the Vesting of a Matching Share Award will rank pari passu in all
respects with the Shares in issue at the date of Vesting save as regards any rights attaching to
such Shares by reference to a record date prior to the date of Vesting.

17.2 Any Shares acquired on the Vesting of Matching Share Awards will be subject to the articles of
association of the relevant Qualifying Company from time to time.

Page 14

 

18. Administration and Amendment

18.1 The decision of the Committee will be final and binding in all matters relating to the Plan
including the exercise of any discretion under the Plan, the interpretation of the Plan and any
dispute relating to any matter in connection with the Plan.

18.2 The Committee may at any time discontinue the grant of further Matching Share Awards or amend
any of the provisions of the Plan in any way it thinks fit and such changes may affect Matching
Share Awards already granted, provided that:

	(a)	 	the Committee will not make any amendment that would materially prejudice the interests of
existing Participants except with their prior consent; and
	 
	(b)	 	no amendment which in the reasonable opinion of the Committee is to the advantage of
Employees or Participants may be made to:

	 	(i)	 	the definition of Employee ;
	 
	 	(ii)	 	the maximum entitlement of a Participant under the Plan;
	 
	 	(iii)	 	the maximum limit on the number of Shares which can be awarded
under the Plan;
	 
	 	(iv)	 	the basis for determining a Participant’s entitlement to Shares
under the Plan and the terms on which Shares can be acquired;
	 
	 	(v)	 	the terms of Shares to be provided under the Plan;
	 
	 	(vi)	 	the adjustment provisions in Rule 15 of the Plan;

without the prior approval of the RE PLC (and if appropriate RE NV) in general meeting (aa)
except in the case of minor amendments to benefit the administration of the Plan, to take
account of a change in legislation, to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants or any member of the Group, or (bb) as otherwise
permitted under these Rules; and

	(c)	 	without prejudice to any provision of the Plan which provides for the lapse of a Matching
Share Award, the Committee may not cancel a Matching Share Award unless the Participant agrees
in writing to such cancellation.

19. General

Trustee Funding

19.1 Any member of the Group may provide money for the purpose of acquiring Shares to satisfy
Matching Share Awards (and will if requested to do so by the Committee) before the date specified
by the Committee for purchase of Shares comprised in Matching Share Awards. The Company will be
under no obligation to purchase the Shares comprised in a Matching Share Award at or around the
Date of Grant but will procure that there are sufficient Shares available for transfer to satisfy a
Matching Share Award by the date of Vesting.

Discretionary Nature of the Plan

Page 15

 

19.2 The rights and obligations of a Participant under the terms and conditions of his office or
employment will not be affected by his participation in the Plan or any right he may have to
participate in the Plan.

19.3 Participation in the Plan does not imply any rights to receive Matching Share Awards on the
same or any other basis in any other year.

19.4 The terms of the Plan do not entitle the Participant to the exercise of any discretion in his
favour.

19.5 Each Participant waives all and any rights to compensation or damages in consequence of the
termination of his office or employment with any member of the Group for any reason whatsoever
(whether such cessation is lawful or unlawful) insofar as those rights arise or may arise from his
ceasing to have rights or be entitled to Shares hereunder as a result of such termination or from
the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s
terms of employment will be varied accordingly.

Changes to a Qualifying Company’s capital structure

19.6 The existence of any Matching Share Award will not affect in any way the right or power of the
Company, or the Qualifying Companies or their shareholders to make or authorise any or all
adjustments, recapitalisations, reorganisations or other changes in the Company’s or either of the
Qualifying Company’s capital structure, or any merger or consolidation of the Company or Qualifying
Companies, or any issue of shares, bonds, debentures, preferred or prior preference stocks ahead of
or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or
liquidation of the Company or Qualifying Companies or any sale or transfer of all or any part of
their assets or business, or any other corporate act or proceeding, whether of a similar character
or otherwise.

Notices

19.7 Any notice or other document required to be given to a Participant under or in connection with
the Plan may be delivered or sent by post to him at his home address according to the records of
his employing company or sent by email or fax to any email address or fax number according to the
records of his employing company or, in either case, such other address as may appear to the
Company to be appropriate.

19.8 Notices sent by post to a Participant in the UK or US will be deemed to have been given two
days after the date of posting. However, notices sent to a Participant in other countries will be
deemed to have been given on the seventh day after the date of posting.

19.9 Notices sent by email or fax, in the absence of evidence to the contrary, will be deemed to
have been received on the day following sending.

19.10 Any notice or other document required to be given to the Company under or in connection with
the Plan may be delivered or sent by post to it at its registered office (or such other place or
places as the Committee may from time to time determine and notify to Participants) or sent by
email or fax to any email address or fax number notified to the sender.

Page 16

 

19.11 All Share certificates and other communications relating to the Plan will be sent at the
Participant’s risk.

No transfer of Matching Share Awards

19.12 A Participant may not transfer, assign, charge or otherwise dispose of Matching Share Awards,
or any rights in respect of them, except on the transmission of Matching Share Awards on the death
of a Participant to his personal representatives or the assignment of a Matching Share Award, with
the prior consent of the Committee, subject to any terms and conditions the Committee imposes. Any
such attempted transfer will result in the lapse of the Matching Share Award.

Awards Non-Pensionable

19.13 Matching Share Awards and Dividend Equivalents under the Plan are not pensionable.

Taxation

19.14 Any liability of a Participant to taxation in respect of Investment Shares or a Matching
Share Award will be for the account of the relevant Participant. By accepting a Matching Share
Award, a Participant agrees to comply with any arrangements specified by the Company for the
payment of taxation (including, without limitation, arranging the sale of sufficient Shares to
enable the Company or any member of the Group to satisfy its obligations in respect of deduction of
taxation at source) and to enter into any election specified by the Company under Chapter 2 of Part
7 of the Income Tax (Employment & Pensions) Act 2003 in respect of shares to which he is or may
become entitled under the Plan.

Stamp Duty

19.15 The Participant will bear all dealing costs and stamp duty relating to the purchase of
Investment Shares under the Plan. The Company will bear all dealing costs and stamp duty relating
to the purchase and release of Shares in respect of a Matching Share Award under the Plan.

Expiry of Plan

19.16 No Matching Share Award will be granted under the Plan later than the tenth anniversary of
the Adoption Date.

Data Protection

19.17 By accepting the grant of a Matching Share Award, a Participant consents to the holding and
processing of personal data provided by him to the Company, a Qualifying Company or any member of
the Group, and any other persons for all purposes related to the operation of the Plan and
acknowledges that the personal information may be transferred to, and stored at, a destination
outside the European Economic Area (“EEA”), and may also be processed by staff operating outside
the EEA who work for the Company, a Qualifying Company, a member of the Group or for one of their
service providers. The Company will take all steps reasonably necessary to ensure that a
Participant’s personal data is treated securely under appropriate contractual arrangements.

Page 17

 

Governing Law

19.18 These Rules will be governed by and construed in accordance with English law.

Page 18

 

SCHEDULE 1

Performance Target

General

1. The following provisions shall apply to Matching Share Awards granted under the Plan, unless the
Committee determines otherwise at the Date of Grant in respect of any Matching Share Award.

2. Except as otherwise provided for in the Rules, the Performance Targets applicable to Matching
Share Awards will be measured after the end of the Performance Period for such Matching Share
Award.

3. There are two separate measures of equal weighting: a Return on Invested Capital measure (ROIC
Measure) and an Adjusted Earnings per Share measure (EPS Measure).

4. To the extent that the Performance Target is not satisfied, Matching Share Awards will lapse.

The ROIC Measure

5.1 The Vesting of one half of the Matching Share Award relates to the percentage return on
invested capital of the combined businesses of the Qualifying Companies. Vesting relates to the
percentage ROIC for the last financial year of the relevant Performance Period. The portion of a
Matching Share Award subject to the ROIC Measure is referred to as the ‘ROIC Tranche’.

5.2 With respect to Matching Share Awards granted in 2010, for any part of the ROIC Tranche to
Vest, the percentage ROIC for financial year 2012 must exceed the percentage ROIC for financial
year 2009, calculated on the same basis.

5.3 The following definitions are relevant for ROIC:

	 	(i)	 	Invested capital = arithmetic average of the opening and closing capital
employed stated before financing and tax balances for the combined businesses of the
Qualifying Companies adjusted for major acquisition timing for the financial year
with all cumulative amortisation and impairment charges for acquired intangible
assets and goodwill added back and excluding the gross up to goodwill in respect of
deferred tax liabilities established on the acquisition of intangible assets
retranslated at the average and hedge exchange rates applicable to the financial
year before the start of the Performance Period. In addition, any exceptional
restructuring and acquisition related charges (net of tax) over the Performance
Period are capitalised for these purposes and the effect of changes in exchange
rates and movements in the net pension deficits are excluded.
	 
	 	(ii)	 	Return = adjusted operating profit for the combined businesses of the
Qualifying Companies before amortisation and impairment of acquired intangible
assets and goodwill, exceptional restructuring and acquisition related charges and
grossed up to exclude the equity share of taxes in

Page 19

 

	 	 	 	joint ventures and further
adjusted to exclude movements in the net pension financing credit, after applying
the effective rate of tax used for adjusted earnings calculations and using exchange
rates to match those used in the calculation of invested capital.

In order to ensure that the performance score achieved is a fair reflection of underlying business
performance, the Committee retains discretion to determine the treatment of major disposals and
acquisitions that require board approval. Any significant adjustments made to the final performance
score will be disclosed to shareholders.

5.4 The number of Matching Shares comprised in the ROIC Tranche which is capable of Vesting will be
determined as follows:

	 	 	 	 	 
	ROIC percentage	 	 
	measured in respect of	 	Vesting
	last financial year of the	 	percentage of
	Performance Period	 	ROIC Tranche
	Below 10.2%
	 	 	0	%
	10.2%
	 	 	50	%
	11.2% or above
	 	 	100	%

5.5 Vesting is on a straight-line basis for performance between the minimum and maximum levels.

The EPS Measure

6.1 The Vesting of one half of the Matching Share Award relates to the average growth in Adjusted
Earnings per Share at constant currencies (Adjusted EPS) of the Qualifying Companies measured over,
save as provided for in 6.2 below, the Performance Period. The portion of a Matching Share Award
subject to the EPS Measure is referred to as the ‘EPS Tranche’.

6.2 For Matching Share Awards granted in 2010, Average Adjusted EPS Growth is measured over
financial years 2011 and 2012 of the Qualifying Companies. In addition, for any part of the EPS
Tranche of the 2010 Matching Share Award to Vest, Average Adjusted EPS Growth must be positive over
the three financial years of the Qualifying Companies ending 31 December 2012.

6.3 The following definitions apply in respect of Adjusted EPS:

	 	(i)	 	Adjusted EPS Growth = the arithmetic mean of the growth in Adjusted EPS at
constant currencies achieved by the Qualifying Companies over a relevant financial
year;
	 
	 	(ii)	 	Average Adjusted EPS Growth = the average of the Adjusted EPS Growth over
the relevant period of measurement;
	 
	 	(iii)	 	Adjusted Earnings = adjusted reported earnings. Adjustments include
amortisation and impairment of acquired intangible assets and goodwill, exceptional
restructuring and acquisition related charges, gains/losses 

Page 20

 

	 	 	 	on business disposals and
other non-operating items, related tax effects and movements in deferred tax balances
not expected to crystallise in the near term. The Committee retains discretion to
adjust for changes in the net pension financing credit;

	 	(iv)	 	Adjusted Earnings Per Share = Adjusted Earnings divided by the Number of
Shares;
	 
	 	(v)	 	Number of Shares = weighted average number of shares in issue excluding
shares held in treasury or by the Reed Elsevier Group plc Employee Benefit Trust; and
	 
	 	(vi)	 	Constant currencies = refers to measurement at constant rates of exchange
using the prior full year average and hedge rates.

The Committee has discretion to adjust this definition of Adjusted EPS to take account of any
changes in recognised accounting standards or practice, fiscal regime or capital structure, to
ensure consistent measurement and accountability.

6.4 The number of Matching Shares in the EPS Tranche which is capable of Vesting will be determined
as follows:

	 	 	 	 	 
	 	 	Vesting
	 	 	percentage of
	Average Adjusted EPS Growth	 	EPS Tranche
	Below 4% per annum
	 	 	0	%
	4% per annum
	 	 	50	%
	9% or above per annum
	 	 	100	%

6.5 Vesting is on a straight-line basis for performance between the minimum and maximum levels.

Determining satisfaction of targets at end of performance period

7. Following the end of the relevant Performance Period the Committee shall calculate and confirm
with the auditors the Average Adjusted EPS Growth and ROIC over the relevant period of measurement.

Adjustments

8.1 The Committee may make such adjustments to the Performance Target applicable to outstanding
Matching Share Awards as it considers appropriate to take account of any factors which are relevant
in the opinion of the Committee and in particular if there is an event which causes it to consider
that the Performance Target, or any part of it, is no longer a fair measure of performance. The
amended Performance Target shall be at least as challenging as the one originally set.

8.2 The Committee has discretion to adjust the definition or method of calculation of Adjusted EPS
and ROIC (or any other applicable term or measure) as set out in this Schedule to take account of
any changes in recognised accounting standards or

Page 21

 

practice, fiscal regime or capital structure, to
ensure consistent measurement and accountability.

8.3 Without prejudice to the generality of paragraphs 8.1, 8.2 and 9, the Committee may, in
consultation with the auditors, make the following adjustments in relation to the calculations to
be carried out in accordance with this Schedule:

	 	(a)	 	any adjustments it considers appropriate if an event occurs giving rise to an
adjustment of Awards under Rule 15 of the Plan; and
	 
	 	(b)	 	any adjustments it considers appropriate if there is any modification in
relation to the relevant international accounting standard used to calculate EPS or
ROIC.

Overriding Power

9. In determining the level of Vesting of a Matching Share Award under the Plan, the Committee will
take into account the overall business performance of the Qualifying Companies and the Group over
the relevant performance period and any other factors that it considers appropriate and may modify
the Vesting level if it considers that such a modification would result in a fairer outcome.

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SCHEDULE 2

US Participants

This Schedule was adopted by the directors of Reed Elsevier Group plc on 21 April 2010.

The Rules of the Plan apply to Matching Share Awards granted to US Participants subject to the
modifications contained in this Schedule.

	 	(A)	 	In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules
unless modified by this Schedule.
	 
	 	(B)	 	US Participant. Rule 1 is revised by the addition of the following
definition of “US Participant”:
	 
	 	 	 	US Participant means a Participant who is subject to United States taxation by
reason of being a United States national, or resident in the United States for
United States tax purposes;
	 
	 	(C)	 	“Retirement” means, for the purposes of the application of Rule 8.2(b) of the
Plan, in relation to a US Participant, circumstances which the Committee determines on
a case by case basis and in its absolute discretion to constitute retirement
(irrespective of whether or not applicable retirement eligible criteria have been
met);
	 
	 	(D)	 	Release of Shares. Rule 6.2 shall have the additional requirement that if
Shares are to be released to a US Participant, they shall in all instances be released
no later than March 15 of the year following the year in which the Investment Period
ceases.
	 
	 	(E)	 	Dividend Equivalent — Cash Payment. Rule 7.2(c) shall have the additional
requirement that any cash payment to the US Participant under this Rule shall in all
instances be released no later than March 15 of the year following the year in which
the Investment Period ceases.
	 
	 	(F)	 	Dividend Equivalent — Shares in Lieu of Cash. Rule 7.3 shall have the
additional requirement that if Shares are to be released to a US Participant in lieu
of cash, they shall in all instances be released no later than March 15 of the year
following the year in which the Investment Period ceases.
	 
	 	(G)	 	Approved Leaver. Rule 8.2 shall have the additional requirement that the
Shares released to a US Participant shall in all instances be transferred to the US
Participant on or before March 15 of the year following the year in which the
Investment Period ceases.
	 
	 	(H)	 	Death, Injury, Disability and Ill-health. Rule 8.4 shall have the additional
requirement that the Shares released to a US Participant or to a US Participant’s
personal representative following the US

Page 23

 

	 	 	 	Participant’s cessation of employment by reason of death, injury, disability or
ill-health shall in all instances be transferred to the US Participant or the US
Participant’s personal representative on or before March 15 of the year following
the year in which the US Participant’s cessation of employment occurs.

	 	(I)	 	Award Rollover. Except to the extent consistent with the requirements of
Section 409A of the United States Internal Revenue Code (“Code”) for the deferral of
compensation without penalty or additional tax or unless an exception to the
application of Code Section 409A applies, Rule 13 shall not apply to any Matching
Share Award held by a US Participant if, at the time the election provided by Rule 13
is available to the US Participant, it has Vested. In such case, the Rules of the
Plan shall apply to the Matching Share Award without regard to Rule 13.
	 
	 	(J)	 	Application of Code Section 409A. Although neither the Committee nor any
member of the Group guarantees any particular tax treatment to a US Participant,
Matching Share Awards, granted pursuant to this Schedule are intended to be exempt
from Section 409A of the United States Internal Revenue Code under the exception for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the United States Income
Tax Regulations (which requires, in the case of an employer with a fiscal year ending
31 December, that Shares in satisfaction of a Matching Share Award be transferred to
the US Participant no later than March 15 of the calendar year following the calendar
year in which the award is no longer subject to a substantial risk of lapsing) and
shall be limited, construed and interpreted in accordance with such intent.

Page 24

 

SCHEDULE 3

ELSEVIER REED FINANCE BV

The Rules of the Plan apply to Matching Share Awards granted to employees of Elsevier Reed Finance
BV (“ERF”), or of companies under the Control of ERF, subject to the modifications contained in
this Schedule.

	 	(A)	 	In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules unless
modified by this Schedule.
	 
	 	(B)	 	The definition of Group shall be construed as including ERF and every company which
is under the Control or ERF.
	 
	 	(C)	 	Matching Share Awards shall not be granted under this Schedule without the agreement
of the supervisory board of ERF.

Page 25

 

SCHEDULE 4

French Participants

This Schedule was adopted by the directors of Reed Elsevier Group plc on 21 April 2010.

The purpose of this Schedule is to make certain variations to the terms of the Plan in order to
satisfy French securities laws, exchange control, corporate law and tax requirements (especially
the provisions of Articles L.225-197-1 et seq. of the French Commercial Code (FCC)) to qualify for
favourable income tax and social security treatment in France.

The Rules of the Plan apply to Matching Share Awards granted to French participants subject to the
modifications contained in this Schedule.

	1.	 	Definitions
	 
	1.1	 	The definitions of Matching Share Award and Group in Rule 1.1 are deleted and replaced
with the following definitions:
	 
	 	 	Matching Share Award means a non-transferable, unfunded and conditional right granted under
Rule 4 to receive Shares without payment and references to Matching Shares will be
construed accordingly;
	 
	 	 	Group means the Company and (i) any company in which the Company holds, directly or
indirectly, at least 10 per cent of the share capital or voting rights; and (ii) any
company holding, directly or indirectly, at least 10 per cent of the share capital or
voting rights of the Company and (iii) any company for which at least 50 per cent of the
share capital or voting rights are held by a company which holds at least 50 per cent of
the share capital of the Company and member of the Group will be construed accordingly;
	 
	1.2	 	The following new definitions will be added for the purpose of Matching Share Awards granted
under this Schedule:
	 
	 	 	Defined Disability means a disability of the second or third category under the meaning of
Article L.341-4 of the French Social Security Code;
	 
	 	 	Eligible Individual means:

	 	•	 	any salaried employee of a member of the Group, or a corporate officer holding
the duties of Chairman of the Board, General Manager, Deputy General Managers, or
member of the Directory Board or Manager (respectively President du Conseil
d’administration, Directeur Général, Directeurs Généraux Délégués, membres du
Directoire and Gérant) of any member of the Group,
	 
	 	•	 	who is a salaried employee of the Company or any member of the Group who does
not hold 10% or more (taking into account any unvested Matching Share Awards under
this Plan or any other share plan subject to provisions of articles L.225-197-1 et
seq. of the FCC) of the share capital of RE NV or RE PLC, or would, as a result of
a

Page 26

 

	 	 	 	grant being made under this Plan, hold 10% or more of the share capital of RE NV
or RE PLC.

	 	 	Holding Period means a two-year period following the transfer of Shares under the Plan to a
Participant, during which the Shares cannot be sold, transferred or otherwise disposed of;
	 
	2.	 	Rule 2 (Eligibility)
	 
	 	 	In Rule 2, the word “Employee” will be replaced by “Eligible Individual”.
	 
	3.	 	Rule 6 (Normal Vesting of Matching Share Awards) 
	 
	3.1	 	Rule 6.1 shall be supplemented with the following provision:
	 
	 	 	“The Normal Vesting Date for Matching Share Awards will not be before the second
anniversary of the Date of Grant. Furthermore, if a Matching Share Award would otherwise
Vest in accordance with any provision of the Plan or of this Schedule 4 (except as provided
under Rule 8.5, as amended by paragraph 6.1 of this Schedule 4, (death and Defined
Disability)) before the second anniversary of the Date of Grant, the Matching Share Award
will not so Vest but will continue until the second anniversary of the Date of Grant, or a
later date as determined by the Committee, when it will Vest”.
	 
	3.2	 	Rule 6.2 will be deleted and replaced with the following:
	 
	 	 	“The Investment Shares will be released to the Participant as soon as reasonably
practicable following the Normal Vesting Date along with the Dividend Equivalent which a
Participant is entitled to under Rule 7 and subject to paragraph 4 of this Schedule.
	 
	 	 	Any Vested Matching Shares will be transferred, as soon as reasonably practicable after
that date, subject to any Dealing Restrictions, to a share account administered in the name
of and for the benefit of the Participant by an account keeper (teneur de compte)
designated by the Committee. Participants will have full shareholder voting and dividend
rights on the transferred Matching Shares.
	 
	 	 	Any Matching Shares transferred will be held by the account keeper on behalf of the
Participant for the duration of the Holding Period, except as provided under Rule 8.5, as
amended by paragraph 6.1 of this Schedule 4, (death and Defined Disability), or as
otherwise provided for in the FCC or in the French tax Code as an exception to the Holding
Period.
	 
	 	 	On expiry of the Holding Period, the participant will be free to dispose of the Matching
Shares.”

	4.	 	Rule 7 (Entitlement to Dividend Equivalents)

	 	 	A Matching Share Award granted under this Schedule shall only be granted on the basis that
it carries a right to Dividend Equivalents to the extent permitted under the FCC and the
French Tax Code and without jeopardising the favourable tax and social security regime
applicable to the related Matching Share Awards.

Page 27

 

	5.	 	Rules 8.2 and 8.3 (Approved Leaver)
	 
	5.1	 	Matching Shares which Vest in accordance with Rule 8.2 will be subject to the Holding Period.
	 
	5.2	 	Rule 8.3 will not apply to Matching Share Awards granted under this Schedule.
	 
	6.	 	Rules 8.4 and 8.5 (Death, Injury, Disability and ill-health)
	 
	6.1	 	Rules 8.4 and 8.5 will be deleted and replaced with the following new Rules:
	 
	 	 	8.4 Except as otherwise provided in these Rules, in the event that the Participant ceases
to be an Employee before the Normal Vesting Date by reason of injury, disability or
ill-health (excluding Defined Disability), the Participant’s Matching Share Award and
Investment Shares will be treated in accordance with Rule 8.2 and any Matching Shares which
Vest will be subject to the Holding Period.
	 
	 	 	8.5 Notwithstanding any other Rule of the Plan, where a Participant ceases employment
before the Normal Vesting Date by reason of death or Defined Disability:

	 	a)	 	the Matching Share Award will Vest over a Pro-rated Number of Shares subject
to an assessment of performance based on progress made against the Performance Target
at the Termination Date as determined by the Committee in its absolute discretion.
Such determination will take place as soon as practicable after the Termination Date
and to the extent that the Matching Share Award does not Vest on the date of
determination, it will immediately lapse; or
	 
	 	b)	 	the Performance Target will be waived and/or the Matching Share Award will
Vest in full on or shortly after the Termination Date as determined by the Committee.
To the extent that the Matching Share Award does not Vest, it will immediately lapse.

	 	 	Any Matching Shares which Vest in accordance with this Rule 8.5 will be transferred to the
Participant (or, in the case of death, to the personal representatives of the Participant)
as soon as practicable following Vesting, and will not be subject to any Holding Period.
	 
	 	 	The Investment Shares will be released in full to the Participant (or, in the case of
death, to the personal representatives of the Participant) as soon as reasonably
practicable following the termination Date.

	7.	 	Rules 10, 11, 12, 13, 14 and 15 (Change of Control, Internal Reorganisation,
Rollover, Winding up, Adjustment of Awards) 
	 
	 	 	Rules 10, 11, 12, 13, 14 and 15 of the Plan will apply in accordance with Article
L.225-197-1-III of the FCC to the extent that the Committee intends the Matching Share
Awards to maintain favourable tax treatment under this

Page 28

 

	 	 	Schedule 4. However, in the event the Committee does not intend to maintain such favourable
tax treatment, Rules 10, 11, 12, 13, 14 and 15 of the Plan will prevail notwithstanding any
possible detrimental tax or social security consequences for the Participant.

	8.	 	Rule 18 (Administration and Amendment)
	 
	 	 	A new Rule 18.2(d) will be added as follows:
	 
	 	 	(d) changes do not affect the French qualifying status of the Matching Share Awards granted
under Schedule 4 and provided that no such changes will adversely affect the rights of any
Participant without such Participant’s consent”
	 
	9.	 	Rule 19.12 (No transfer of Matching Share Awards)
	 
	 	 	In Rule 19.12, the following words will be deleted:
	 
	 	 	“or the assignment of a Matching Share Award, with the prior consent of the Committee,
subject to any terms and conditions the Committee imposes”
	 
	10.	 	Rule 19.14 (Taxation) 
	 
	 	 	In Rule 19.14, the following words will be deleted:
	 
	 	 	“and to enter into any election specified by the Company under Chapter 2 of Part 7 of the
Income Tax (employment & Pensions) Act 2003 in respect of shares to which he is or may
become entitled under the Plan”
	 
	 	 	In Rule 5.1, the wording after (ii) will be deleted.
	 
	11.	 	Severability

The terms of the Plan, as amended by this Schedule 4, are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable under French law, in whole or in
part, the remaining provisions will nevertheless be binding and enforceable.

Page 29

 

SCHEDULE 5

Cash Alternative

If deemed necessary in order to ensure compliance with tax and legal country specific requirements
(e.g. exchange control and securities laws) in the countries in which the Plan operates then,
notwithstanding any provision to the contrary in these Rules:

	 	(A)	 	The Committee may decide to satisfy a Matching Share Award by paying to the
Participant an amount equal to the market value (as determined in its discretion) of the
number of Shares which would otherwise be transferred following Vesting or an amount
determined on such other reasonable basis as the Committee may decide (which could for
example, allow for the deduction of any applicable expenses).
	 
	 	(B)	 	The Committee may grant a Matching Share Award on the basis that it will be satisfied
in cash, as opposed to Shares, as set out in (A) above.

Page 30

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