Document:

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                                                                Exhibit 4.5

                        THE FAMILY EDUCATION NETWORK, INC.(1)

2000 STOCK OPTION AND INCENTIVE PLAN

1. PURPOSE AND ELIGIBILITY

     The purpose of this 2000 Stock Option and Incentive Plan (the "PLAN") of
The Family Education Network, Inc. (the "COMPANY") is to provide stock
options and other equity interests in the Company (each an "AWARD") to
employees, officers, directors, consultants and advisors of the Company and
its Subsidiaries, all of whom are eligible to receive Awards under the Plan.
Any person to whom an Award has been granted under the Plan is called a
"PARTICIPANT". Additional definitions are contained in Section 8.

2. ADMINISTRATION

    a. ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered by
the Board of Directors of the Company (the "BOARD"). The Board, in its sole
discretion, shall have the authority to grant and amend Awards, to adopt,
amend and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award. All decisions by the Board shall be
final and binding on all interested persons. Neither the Company nor any
member of the Board shall be liable for any action or determination relating
to the Plan.

     b. APPOINTMENT OF COMMITTEES. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "COMMITTEE"). All references in
the Plan to the "BOARD" shall mean such Committee or the Board.

     c. DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of
the Company the power to grant Awards and exercise such other powers under
the Plan as the Board may determine, PROVIDED THAT the Board shall fix the
maximum number of Awards to be granted and the maximum number of shares
issuable to any one Participant pursuant to Awards granted by such executive
officers.

3. STOCK AVAILABLE FOR AWARDS

     a. NUMBER OF SHARES. Subject to adjustment under Section 3(c), the
aggregate number of shares of Common Stock of the Company (the "COMMON
STOCK") that may be issued pursuant to the Plan is 2,800,000 shares. If any
Award expires, or is terminated, surrendered or forfeited, in whole or in
part, the unissued Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. If shares of Common Stock
issued pursuant to the Plan are repurchased by, or are surrendered or
forfeited to, the Company at no more than cost, such shares of Common Stock
shall again be available for the grant of Awards under the Plan; PROVIDED,
HOWEVER, that the cumulative number of such shares that may be so reissued
under the Plan will not exceed 2,800,000 shares. Shares issued under the Plan
may consist in whole or in part of authorized but unissued shares or treasury
shares.

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(1) This Plan was amended effective June 28, 2000, so that all references to
    Common Stock of The Family Education Network, Inc., shall be deemed to be
    references to Pearson plc Ordinary Shares.

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     b. PER-PARTICIPANT LIMIT. Subject to adjustment under Section 3(c), no
Participant may be granted Awards during any one fiscal year to purchase more
than 1,000,000 shares of Common Stock.

     c. ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock
dividend, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation,
spin-off, split-up, or other similar change in capitalization or event, (i)
the number and class of securities available for Awards under the Plan and
the per-Participant share limit, (ii) the number and class of securities,
vesting schedule and exercise price per share subject to each outstanding
Option, (iii) the repurchase price per security subject to repurchase, and
(iv) the terms of each other outstanding stock-based Award shall be adjusted
by the Company (or substituted Awards may be made) to the extent the Board
shall determine, in good faith, that such an adjustment (or substitution) is
appropriate. If Section 7(e)(i) applies for any event, this Section 3(c)
shall not be applicable.

4. STOCK OPTIONS

     a. GENERAL. The Board may grant options to purchase Common Stock (each,
an "OPTION") and determine the number of shares of Common Stock to be covered
by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or
state securities laws, as it considers advisable.

     b. INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "INCENTIVE
STOCK OPTION") shall be granted only to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of
Section 422 of the Code. The Board and the Company shall have no liability if
an Option or any part thereof that is intended to be an Incentive Stock
Option does not qualify as such. An Option or any part thereof that does not
qualify as an Incentive Stock Option is referred to herein as a "NONSTATUTORY
STOCK OPTION".

     c. EXERCISE PRICE. The Board shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.

     d. DURATION OF OPTIONS. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

     e. EXERCISE OF OPTION. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares
for which the Option is exercised.

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     f.    PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option shall be paid for by one or any combination of the following forms
of payment:

           (i)     by check payable to the order of the Company;

           (ii)    except as otherwise explicitly provided in the applicable
option agreement, and only if the Common Stock is then publicly traded,
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the
exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the
exercise price; or

           (iii)    to the extent explicitly provided in the applicable
option agreement, by (x) delivery of shares of Common Stock owned by the
Participant valued at fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement), (y) delivery of a
promissory note of the Participant to the Company (and delivery to the
Company by the Participant of a check in an amount equal to the par value of
the shares purchased), or (z) payment of such other lawful consideration as
the Board may determine.

5.    RESTRICTED STOCK.

      a.  GRANTS.   The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part
of such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each,
a "RESTRICTED STOCK AWARD").

      b.   TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued
in respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company
(or its designee). After the expiration of the applicable restriction
periods, the Company (or such designee) shall deliver the certificates no
longer subject to such restrictions to the Participant or, if the Participant
has died, to the beneficiary designated by a Participant, in a manner
determined by the Board, to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "DESIGNATED
BENEFICIARY"). In the absence of an effective designation by a Participant,
Designated Beneficiary shall mean the Participant's estate.

6.    OTHER STOCK-BASED AWARDS

      The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the

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grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights,
phantom stock awards or stock units.

7.    GENERAL PROVISIONS APPLICABLE TO AWARDS

      a.    TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the life of the Participant,
shall be exercisable only by the Participant. References to a Participant,
to the extent relevant in the context, shall include references to authorized
transferees.

      b.    DOCUMENTATION. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine or as executed
by an officer of the Company pursuant to authority delegated by the Board.
Each Award may contain terms and conditions in addition to those set forth in
the Plan PROVIDED THAT such terms and conditions do not contravene the
provisions of the Plan.

      c.    BOARD DISCRETION. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.

      d.    TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the
extent to which, and the period during which, the Participant, or the
Participant's legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

      e.    ACQUISITION OF THE COMPANY

           (i)     CONSEQUENCES OF AN ACQUISITION.

                   (A)    ACQUISITION AND TREATMENT OF OPTIONS AND AWARDS.
Unless otherwise expressly provided in the applicable Award, upon the
occurrence of an Acquisition, the Board or the board of directors of the
surviving or acquiring entity (as used in this Section 7(e)(i)(A), also the
"BOARD"), shall, as to outstanding Awards (on the same basis or on different
bases, as the Board shall specify), make appropriate provision for the
continuation of such Awards by the Company or the assumption of such Awards
by the surviving or acquiring entity and by substituting on an equitable
basis for the shares then subject to such Awards either (a) the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition, (b) shares of stock of the surviving or acquiring
corporation or (c) such other securities as the Board deems appropriate, the
fair market value of which (as determined by the Board in its sole
discretion) shall not materially differ from the fair market value of the
shares of Common Stock subject to such Awards immediately preceding the
Acquisition. In addition to or in lieu of the foregoing, with respect to
outstanding Options, the Board may, upon written notice to the affected
optionees, provide that one or more Options then

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outstanding shall become immediately exercisable in full and that such
Options must be exercised within a specified number of days of the date of
such notice, at the end of which period such Options shall terminate; or
provide that one or more Options then outstanding shall become immediately
exercisable in full and shall be terminated in exchange for a cash payment
equal to the excess of the fair market value (as determined by the Board in
its sole discretion) for the shares subject to such Options over the
exercise price thereof.

         (B)    ACCELERATION UPON ACQUISITION. Subject to the terms herein,
each employee or officer of the Company who holds an Option or Award granted
under this Plan and who is employed by the Company at the effective time of
the Acquisition (an "ELIGIBLE PARTICIPANT") and each other person or entity
who holds an Option or Award shall maintain the same vesting schedule with
respect to such Option or Award, as set forth in the applicable stock option
agreement or other agreement with respect to such Option or Award.
Notwithstanding anything to the contrary herein, each Outstanding Option and
Award held by an Eligible Participant immediately prior to the effective time
of the Acquisition shall vest in accordance with the vesting schedule set
forth in the applicable stock option agreement or other agreement with
respect to such Option or Award calculated as if (i) the Vesting Start Date
was one (1) year prior to the actual Vesting Start Date set forth in such
agreement if the Eligible Participant does not have and is not offered a
Comparable Position (as defined herein) with the ultimate surviving or
acquiring entity (the "Survivor") upon the closing of such Acquisition, or
if such Comparable Position is terminated by the Survivor without cause (as
defined in the applicable Option Agreement) within one (1) year thereafter,
and such Eligible Participant had been employed by the Company for greater
than six months but less than one year as of the effective time of the
Acquisition; or (ii) the Vesting Start Date was two (2) years prior to the
actual Vesting Start Date set forth in such agreement if the Eligible
Participant does not have and is not offered a Comparable Position (as
defined herein) with the Survivor upon the closing of such Acquisition, or if
such Comparable Position is terminated by the Survivor without cause (as
defined in the applicable Option Agreement) within one (1) year thereafter,
and if such Eligible Participant had been employed by the Company for one
year or more as of the effective time of the Acquisition. For purposes of
this Agreement, "COMPARABLE POSITION" shall mean a position with the
Survivor or any subsidiary of the Survivor of at least substantially similar
compensation, with duties and reporting responsibilities not materially
diminished in nature or status from the position held with the Company by
such Eligible Participant immediately prior to the Acquisition, and which
position shall be located within a reasonable proximity (not to exceed 45
miles) of the working location from which the Eligible Participant was based
immediately prior to the time of the Acquisition. Any determination by the
Board in good faith as to whether or not a position is a Comparable Position
was terminated without cause, shall be dispositive and final.

              (C) ACQUISITION DEFINED. An "ACQUISITION" shall mean: (x) any
merger or consolidation after which the voting securities of the Company
outstanding immediately prior thereto represent (either by remaining
outstanding or by being converted into voting securities of the Survivor) less
than 50% of the combined voting power of the voting securities of the
Survivor outstanding immediately after such event; or (y) any sale of all or
substantially all of the assets or capital stock of the Company (other than
in a spin-off, migratory merger or similar

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transaction) or (z) any other acquisition of the business of the Company, as
determined by the Board.

              (ii)    ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. In
connection with a merger or consolidation of an entity with the Company or
the acquisition by the Company of property or stock of an entity, the Board
may grant Awards under the Plan in substitution for stock and stock-based
awards issued by such entity or an affiliate thereof. The substitute Awards
shall be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

             (iii)    POOLING-OF-INTERESTS ACCOUNTING. If the Company
proposes to engage in an Acquisition intended to be accounted for as a
pooling-of-interests, and in the event that the provisions of this Plan or of
any Award hereunder, or any actions of the Board taken in connection with
such Acquisition, are determined by the Company's or the acquiring company's
independent public accountants to cause such Acquisition to fail to be
accounted for as a pooling-of-interests, then such provisions or actions
shall be amended or rescinded by the Board, without the consent of any
Participant, to be consistent with pooling-of-interests accounting treatment
for such Acquisition.

             (iv)    PARACHUTE AWARDS. Notwithstanding the provisions of
Section 7(e)(i)(A), if, in connection with an Acquisition described therein,
a tax under Section 4999 of the Code would be imposed on the Participant
(after taking into account the exceptions set forth in Sections 280G(b)(4)
and 280G(b)(5) of the Code), then the number of Awards which shall become
exercisable, realizable or vested as provided in such section shall be
reduced (or delayed), to the minimum extent necessary, so that no such tax
would be imposed on the Participant (the Awards not becoming so accelerated,
realizable or vested, the "PARACHUTE AWARDS"); PROVIDED, HOWEVER, that if
the,"AGGREGATE PRESENT VALUE" of the Parachute Awards would exceed the tax
that, but for this sentence, would be imposed on the Participant under
Section 4999 of the Code in connection with the Acquisition, then the Awards
shall become immediately exercisable, realizable and vested without regard to
the provisions of this sentence. For purposes of the preceding sentence, the
"AGGREGATE PRESENT VALUE" of an Award shall be calculated on an after-tax
basis (other than taxes imposed by Section 4999 of the Code) and shall be
based on economic principles rather than the principles set forth under
Section 280G of the Code and the regulations promulgated thereunder. All
determinations required to be made under this Section 7(e)(iv) shall be made
by the Board.

      f.    WITHHOLDING. Each Participant shall pay to the Company, or make
provisions satisfactory to the Company for payment of, any taxes required by
law to be withheld in connection with Awards to such Participant no later
than the date of the event creating the tax liability. The Board may allow
Participants to satisfy such tax obligations in whole or in part by
transferring shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their fair market value (as determined
by the Board or as determined pursuant to the applicable option agreement).
The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a Participant.

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     g.  AMENDMENT OF AWARDS.  The Board may amend, modify or terminate any
outstanding Award including, but not limited to, substituting therefor
another Award of the same or a different type, changing the date of exercise
or realization, and converting an Incentive Stock Option to a Nonstatutory
Stock Option, PROVIDED THAT, except as otherwise provided in Section 7(e)(iii),
the Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     h.  CONDITIONS ON DELIVERY OF STOCK.  The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal
matters in connection with the issuance and delivery of such shares have been
satisfied, including any applicable securities laws and any applicable stock
exchange or stock market rules and regulations, and (iii) the Participant has
executed and delivered to the Company such representations or agreements as
the Company may consider appropriate to satisfy the requirements of any
applicable laws, rules or regulations.

     i.  ACCELERATION.  The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of some or all restrictions, or that any other
stock-based Awards may become exercisable in full or in part or free of some
or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be, despite the fact that the foregoing actions may
(i) cause the application of Sections 280G and 4999 of the Code if a change
in control of the Company occurs, or (ii) disqualify all or part of the
Option as an Inventive Stock Option.

8.   MISCELLANEOUS

     a.  DEFINITIONS.

              (i)  "COMPANY," for purposes of eligibility under the Plan,
shall include any present or future subsidiary corporations of The Family
Education Network, Inc., as defined in Section 424(f) of the Code (a
"SUBSIDIARY"), and any present or future parent corporation of The Family
Education Network, Inc., as defined in Section 424(e) of the Code. For
purposes of Awards other than Incentive Stock Options, the term "COMPANY"
shall include any other business venture in which the Company has a direct or
indirect significant interest, as determined by the Board in its sole
discretion.

              (ii)  "CODE" means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.

              (iii)  "EMPLOYEE" for purposes of eligibility under the Plan
(but not for purposes of Section 4(b)) shall include a person to whom an
offer of employment has been extended by the Company.

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     b.     NO RIGHT TO EMPLOYMENT OR OTHER STATUS.  No person shall have
any claim or right to be granted an Award, and the grant of an Award shall
not be construed as giving a Participant the right to continued employment or
any other relationship with the Company. The Company expressly reserves the
right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan.

     c.     NO RIGHTS AS STOCKHOLDER.  Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed with respect to an Award until becoming the record holder thereof.

     d.     EFFECTIVE DATE AND TERM OF PLAN.  The Plan shall become effective
on the date on which it is adopted by the Board. No Awards shall be granted
under the Plan after the completion of ten years from the date on which the
Plan was adopted by the Board, but Awards previously granted may extend
beyond that date.

     e.     AMENDMENT OF PLAN.  The Board may amend, suspend or terminate the
Plan or any portion thereof at any time.

     f.     GOVERNING LAW.  The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
Massachusetts, without regard to any applicable conflicts of law.

                                           Adopted by the Board of Directors on

                                           1/19/00
                                           ----------------------------

                                           Approved by the stockholders on

                                           2/17/00
                                           ----------------------------

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                                                     Exhibit 4.6

                                   PEARSON PLC

                         WORLDWIDE SAVE FOR SHARES PLAN

1.       PURPOSE

The Pearson plc. Worldwide Save for Shares Plan ("the Plan") is intended to
provide an opportunity to participate in the ownership of shares of the common
stock of Pearson plc ("the Parent Company") for eligible employees of Pearson
Inc. ("the Company") and such other companies ("Participating Companies") as the
Committee (as defined below) shall from time to time designate; provided that
each such company shall qualify as a "parent corporation" or "subsidiary
corporation", as defined in Section 424(e) and (f) of the Internal Revenue Code
of 1986, as amended ("the Code"), on the first day of the relevant Award Period
as defined in Section 4. Because the Shares (as defined below) are not
registered in the USA there shall be no sale of Shares to employees under this
Plan and the savings accumulated by relevant employees pursuant to the Plan
shall not be used to acquire any such Shares.

2.       ADMINISTRATION

The Plan shall be administered by a committee ("the Committee") appointed by the
Board of Directors of the Company ("the Board"). The Committee shall have full
authority to administer the Plan, including authority to interpret and construe
any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary. The Committee may delegate part
or all of its obligations and authority hereunder to one or more employees or
directors of the Company or the Parent Company or a subsidiary corporation, in
which case the term "Committee" shall relate to such delegate. Decisions of the
Committee shall be final and binding on all parties who have an interest in the
Plan.

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3.       EFFECTIVE DATE AND TERM OF PLAN

The Plan shall come into effect on 1 January 1998 and, unless cancelled or
discontinued earlier pursuant to Sections 10 or 12 , as appropriate, shall have
a life of 10 years.

4.       AWARD PERIODS

The Plan shall have one or more Award Periods each of which shall commence with
the granting of an Award (as defined in Section 7 below). The first day and the
length of any such Award Period shall be determined by the Committee, provided
that no such period shall exceed 27 months.

The Committee shall designate the final day of each Award Period so as to
facilitate administration of the Plan. Award Periods need not be of the same
length and may run successively or concurrently, either in whole or in part.

5.       ELIGIBILITY AND PARTICIPATION

Each employee of the Company or any of the Participating Companies shall be
eligible to participate in the Plan in respect of an Award Period except (i)
employees who are included in a unit covered by a collective bargaining
agreement between the Company or any of the Participating Companies and the
employee representatives under which benefits were the subject of good faith
bargaining, unless the terms of such bargaining agreement otherwise provides,
(ii) employees who have not completed an introductory period of service of six
months (or such other minimum period of service as may be specified by the
Committee) as of the first day of that Award Period (such service meaning, for
these purposes, service with the Company, a Participating Company or an acquired
employer), (iii) any one or more category of employees excluded in the sole
discretion of the Committee who are members of that classification of employees
described in Code Section 423(b)(4), (iv) at the discretion of the Committee,
any employee who is not compensated on a salaried or full-commission basis and
(v) such other class

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of employees as the Committee may specify. All eligible employees may become
participants with respect to an Award Period by executing such instruments or
taking such other action, if any, as the Committee may from time to time
specify.

6.       STOCK

(a)      The stock subject to the Plan shall be shares of the common stock of
         the Parent Company ("Shares") which are authorised but unissued or
         which have been acquired by open market purchase. The aggregate amount
         of stock which may be issued or transferred pursuant to the Plan shall
         not exceed 5,000,000 Shares (subject to any adjustment as provided in
         Section 9 ).

(b)      Notwithstanding the provisions of Section 6(a) above, if Shares are to
         be issued pursuant to the Plan then the maximum number of Shares over
         which Awards may be granted on any date ("the Award Limit"), when added
         to the number of Shares issued or placed under an Award which may lead
         to an issue of Shares, within the ten years preceding that date under
         the Plan or any other share incentive or option plan approved by the
         Parent Company, shall not exceed ten per cent of the issued ordinary
         share capital of the Parent Company on such date.

7.       AWARDS

Awards shall be granted in such form and subject to such terms as the Committee
may from time to time approve, provided that such Awards shall conform to the
following terms and conditions:

(a)      AWARD CONCEPT. Each Award granted under the Plan shall be in the form
         of a stock appreciation right over Shares ("the Award"). The Award will
         be based upon a monthly savings agreement (as described in Section 8)
         under which an eligible employee (as described in Section 5) agrees to
         save a monthly sum on an after-tax basis. The formula for determining
         the number of Shares subject to an Award shall be as follows:

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         N = MS * 26 / NSP * (ESP-NSP) / ESP

         Where:      N is the number of Shares subject to the Award rounded down
                     to a whole number of Shares MS is the monthly level of
                     savings of the relevant employee

                     NSP is the Net Share Price, being the Fair Market Value of
                     a Share at the time of the invitation to participate less a
                     discount of 15% ESP is the Ending Share Price, being the
                     Fair Market Value of a Share at the end of an Award Period.

                     The number of Shares to be taken into account for the
                     purposes of the Award Limit shall be calculated as follows
                     in respect of each participant and aggregated
                     appropriately:

                     N = MS * 26 / NSP

(b)      FAIR MARKET VALUE. For the purposes of the Plan the fair market value
         of the Shares on any day shall be the middle market quotation for a
         Share on the London Stock Exchange Limited (as derived from the Daily
         Official List for the previous trading day).

(c)      PAYMENT. The maximum MS (excluding interest) which may be taken into
         account under the Plan may not exceed a percentage specified by the
         Committee (not to exceed 15 percent) of a participant's Compensation
         calculated as of a day (determined by the Committee) for each Award
         Period, or if less, the $US equivalent, at a rate of exchange to be
         specified by the Parent Company at its discretion, of the monthly limit
         set out for the time being in paragraph 24(2)(a) of Schedule 9 to the
         United Kingdom Income and Corporation Taxes Act 1988 (currently L250).
         For the purposes of this Plan, "Compensation" shall mean the base
         compensation (plus, for sales representatives, sales-related fees and
         sales commissions) paid to a participant by the Company or a

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         Participating Company (exclusive of any bonuses, pay at premium rates
         (holiday, overtime or other), gifts, cost of group life insurance,
         imputed cost of use of employer property, reimbursement of moving
         expenses, deferred compensation, other amounts which are not included
         in the participant's income for federal income tax purposes, and any
         compensation received prior to becoming a participant in the Plan.)
         Compensation shall include any amounts deferred under a salary
         reduction agreement or any plan maintained by a Participating Company
         pursuant to Section 401(k) or Section 125 of the Code.

(c)      NUMBER OF SHARES. On the first day of any Award Period, a participant
         shall be granted an Award to receive a number of Shares determined by
         the Committee pursuant to Section 7(a). If the Award Limit for which
         Awards are to be granted on any date in accordance with the terms of
         the Plan exceeds the number of Shares then remaining available under
         the Plan (after deduction of the number of Shares which have been
         issued pursuant to Awards or are then subject to Awards), the Committee
         shall make a pro rata allocation to participants of the Shares
         remaining available in as near as uniform a manner as shall be
         practicable and as it shall deem equitable. The Committee shall give
         written notice of such allocation to each participant affected thereby.

(d)      TERMINATION OF EMPLOYMENT. If, prior to the end of an Award Period, a
         participant ceases to be employed by the Company or a Participating
         Company for any reason, including death or retirement, the
         participant's Award shall terminate, and any amounts collected from the
         participant, together with interest thereon, shall be paid to the
         participant or the participant's personal representatives and no
         further amounts will be collected from the participant during the Award
         Period.

(e)      TERMINATION OF AWARD. A participant may, during an Award Period,
         terminate his or her Award, by giving written notice, in such manner
         and at such times as the Committee may specify. If an Award is
         terminated, any amounts collected from the participant, together with
         interest thereon, shall be paid to the participant as soon as
         practicable following

                                       5
<PAGE>

         receipt of such notice, no further amounts will be collected from the
         participant during the Award Period and the Award shall thereupon
         terminate.

(f)      CHANGES IN STATUS. The Committee may determine on a uniform basis with
         respect to any Award Period whether a participant who is on a leave of
         absence or on salary continuation or who experiences a significant
         reduction in pay beyond the participant's control or converts from a
         salaried to an hourly position will be deemed to have terminated
         service for purposes of Section 7(d) or under what circumstances such a
         participant may continue his or her Award in effect during such Award
         Period.

(g)      VESTING OF SHARES. Shares subject to an Award shall vest automatically
         on the last day of the Award Period, unless the Award has been
         previously terminated pursuant to Section 7(d), 7(e) or 8(d). . Subject
         to Section 7(l), such Shares shall be issued or transferred to the
         relevant participant as soon as practicable after they have vested.
         The balance in the participant's account (including interest) shall be
         promptly paid to the participant.

(h)      ASSIGNABILITY. Awards under the Plan shall not be assignable or
         transferable by the participant and shall be exercisable only by the
         participant.

(i)      RIGHTS AS A SHAREHOLDER. A participant shall have no rights as a
         shareholder with respect to Shares subject to any Award until the
         Shares vest pursuant to Section 7(g) above. No adjustments will be made
         for dividends or other rights for which the record date is prior to the
         date of delivery.

(j)      5% SHAREHOLDERS. No Award shall be granted to an employee if
         immediately after such grant the employee would own (within the meaning
         of Section 424(d) of the Code) or hold, outstanding Awards over stock
         possessing 5 percent or more of the total combined voting power or
         value of all classes of stock of the Parent Company or any of its
         subsidiary corporations.

                                       6
<PAGE>

(k)      WITHHOLDING. The Company and any Participating Companies will be
         entitled to withhold, and the participant will be obliged to pay, any
         amount of tax or social security contributions or other regulatory
         payments payable by or on behalf of such participant in connection with
         the vesting of Shares. The Committee may establish appropriate
         procedures to provide for any such payment.

(l)      Upon vesting in accordance with Section 7 (g), Shares issued to a
         participant pursuant to the Plan shall be held in escrow on behalf of
         such participant by a custodian in the United Kingdom (the
         "Custodian"), selected by the Committee, in accordance with applicable
         provisions of English law and such other terms and conditions which the
         Committee (and the Custodian) may from time to time specify. Each
         participant shall receive a statement from the Custodian with regard to
         shares held on such participant's behalf and each participant shall
         receive the benefit of any dividends on Shares held by the Custodian
         for their account. A participant may effect the sale of Shares held on
         behalf of such participant by the Custodian by instructing the
         Custodian to sell all or a portion of his or her holdings on the London
         Stock Exchange. The Custodian will sell such Shares only in accordance
         with resale provisions of Rule 904 of Regulation S under the Securities
         Act of 1933. Net proceeds from such a sale of Shares shall be delivered
         to the relevant participant in $US. Participants may not sell Shares
         issued pursuant to the Plan by any means other than through the
         Custodian, nor shall a participant (nor shall his estate or other legal
         successor) be entitled to withdraw Shares from the Custodian or
         otherwise receive a stock certificate for Shares so long as the
         participant is a U. S. Person for purposes of the Securities Act of
         1933.

         8.       MONTHLY SAVINGS AGREEMENTS

(a)      ELECTION. An eligible employee may elect the monthly amount which he
         wishes to save, provided that such amount must be not less than the US
         Dollar equivalent of L5 nor more than the US Dollar equivalent of L250.
         The Parent Company shall decide upon the appropriate rate of exchange
         to use in calculating the US Dollar equivalents and shall notify the
         Company and Participating Companies accordingly. The maximum limit of

                                       7
<PAGE>

         the US Dollar equivalent of L250 applies to a participant's aggregate
         monthly contributions in respect of all savings agreements under this
         Plan.

(b)      PERSONAL PROPERTY. The relevant monthly sum shall be deducted from an
         employee's pay by payroll deduction and will be deposited in an
         interest-bearing account with a US Bank. The savings agreement is
         personal to the relevant employee and the savings and any interest
         arising under it are the property of the employee concerned.

(c)      NO PAYMENT. No amount shall be payable by a participant in respect of
         the receipt of an Award of Shares. No amounts saved shall be used to
         purchase Shares and amounts saved shall not be affected by changes in
         the market value of Shares.

(d)      MISSED CONTRIBUTIONS. If a participant misses any monthly contributions
         under the Savings Contract, then unless the participant is on unpaid
         medical leave or on unpaid leave under the Family Medical Leave Act the
         Award will terminate with the same consequences as set out in Rule 7(e)
         (Termination of Award). If a participant is on unpaid medical leave or
         on unpaid leave under the Family Medical Leave Act and misses up to six
         monthly contributions under the Savings Contract, the number of Shares
         due to the participant will be reduced by multiplying the number of
         Shares calculated in Rule 7(a) by the fraction n/24, where n is equal
         to the number of monthly contributions made in the Award Period. If
         more than six contributions are missed, however, the Award will
         terminate with the same consequences as set out in Rule 7(e)
         (Termination of Award).

                                       8
<PAGE>

(e)      LEAVE OF ABSENCE. If a participant is on paid leave or other absence
         from work in which regular pay is continued then there will be
         continuing payroll deductions for the purposes of the Plan unless the
         participant elects to terminate the Award in accordance with the
         provisions of Rule 7 (e)(Termination of Award).

9.       CAPITAL ADJUSTMENTS

If any change is made in the Shares subject to the Plan, or subject to any Award
granted under the Plan (through merger, consolidation, reorganisation, stock
dividend, split-up, combination of Shares, exchange of Shares, change in
corporate structure or otherwise), appropriate adjustments shall be made as
determined by the Parent Company in its absolute discretion as to the maximum
number of Shares subject to the Plan, and the number of Shares and price per
Share subject to outstanding Awards.

10.      AMENDMENTS

The Board or Committee may from time to time alter, amend, suspend or
discontinue the Plan at any time provided, however, that no such action may,
without the approval of shareholders of the Company, (i) increase the number of
Shares subject to the Plan under the provisions of Section 6(a) (unless
necessary to effect the adjustments required under Section 9), or (ii) make any
other change with respect to which the Board or Committee determines that
shareholder approval is required by applicable law or regulatory standards.
Subject to Section 12 and 14, no such alterations or amendments may be made
which would adversely affect existing Awards granted under the Plan.

11.      NO EMPLOYMENT OBLIGATION

Nothing contained in the Plan (or in any Award granted pursuant to the Plan)
shall confer upon any employee any right to continue in the employ of the
Company or any Participating Company or constitute any contract or agreement of
employment or interfere in any way with the right of

                                       9
<PAGE>

the Company or any Participating Company to reduce such employee's compensation
from the rate in existence at the time of the granting of an Award or to
terminate such employee's employment at any time, with or without cause.

12.      CANCELLATION AND SUBSTITUTION OF AWARDS IF SHARES ARE REGISTERED

In the event that the Shares are registered with the Securities and Exchange
Commission such that the grant of an option and sale of Shares would be lawful
then the Committee shall have the right to shorten the length of the Award
Period in respect of any existing Awards. Shares subject to such Awards shall
subsequently vest on the last day of such Award Period in accordance with
Section 7(g).

13.      REGULATORY APPROVALS

The implementation of the Plan, the granting of any Award under the Plan and the
issuance of Shares pursuant to any such Award shall be subject to the Company's,
and where necessary, the Parent Company's, procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the Awards granted under it or the Shares issued pursuant to it.

14.      RESTRICTIONS ON AWARDS AND ACQUIRED SHARES

No Awards shall be granted under the Plan, and no Shares shall be issued and
delivered upon the vesting of Awards granted under the Plan, unless and until
any applicable Federal or state registration, listing and qualification
requirements and any other requirements of law or of any regulatory agencies
having jurisdiction shall have been fully complied with (or exceptions from the
foregoing are available) and each Award granted shall specifically be
conditioned upon compliance with this sentence. The Committee, in its
discretion, may, as a condition to the grant of an Award or the vesting of any
Award granted under the Plan, require the holder of such Award to make such
representations and warranties as are deemed appropriate by the Company. Stock
certificates representing Shares that have not been registered under the
Securities Act of

                                       10
<PAGE>

1933 and were acquired upon the vesting of Awards shall bear substantially the
following legend or such other legend which may be required by the Committee:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR SOLD OUTSIDE OF THE UNITED
STATES IN COMPLIANCE WITH REGULATION S OF SUCH ACT."

The Committee may impose such other terms, conditions and restrictions upon any
Award, including any Award previously granted, that the Committee concludes, in
its discretion, are necessary or desirable to ensure compliance with any
applicable law, regulation or rule.

15.      GOVERNING LAW

To the extent not otherwise governed by federal law, the Plan and its
implementation shall be governed by and construed in accordance with the laws of
the State of New York.

                                       11

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