Document:

Prepared and filed by St Ives Burrups

Exhibit 4.15

 

  
     

    IMPORTANT

      IF YOU HAVE RECEIVED AN AWARD UNDER THE mmO2 RESTRICTED SHARE
      PLAN

      WHICH IS SUBJECT TO A CO-INVESTMENT REQUIREMENT, THEN PLEASE READ THESE

      RULES TOGETHER WITH THE SPECIAL CONDITIONS ATTACHED TO YOUR AWARD

      LETTER (WHICH HAVE BEEN IMPOSED IN ACCORDANCE WITH RULE 2 OF THESE RULES)

     

     

    mmO2 plc

     

     

  

THE mmO2 RESTRICTED
  SHARE PLAN

 

As adopted by the Board of the Company on 31 August 2001 and approved by

British Telecommunications PLC in general meeting 23 October 2001

 

 

	THE RULES OF THE mmO2
      RESTRICTED SHARE PLAN

	 
	CONTENTS
	 

	 	 	Page
	 1.
	How the Plan
      will operate	2
	 	 	 
	 2.
	Performance
      targets and additional terms and conditions	3
	 	 	 
	 3.
	Limit on
      participation by Eligible Executive	4
	 	 	 
	 4.
	Rights in
      relation to Shares prior to the Vesting of an Award	4
	 	 	 
	 5.
	General
      offer, scheme of arrangement or voluntary winding-up of the Company	4
	 	 	 
	 6.
	Ceasing to
      be in Employment during the Restricted Period	8
	 	 	 
	 7.
	The end
      of the Restricted Period	10
	 	 	 
	 8.
	Transfer
      of Shares	11
	 	 	 
	 9.
	Amending
      the Plan	12
	 	 	 
	 10.
	General	13
	 	 
	 Appendix
        I – U.S. Section
	 16
	 	 
	 Definitions
        Appendix
	 18

 

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THE RULES OF THE mmO2
  RESTRICTED SHARE PLAN

	1.	HOW THE PLAN WILL OPERATE

	 	 
	1.1	Policies set by the Board

	 	 
	 	The Board will set the policies for the Company’s operation and administration of the Plan within the terms of the Rules, which shall include the determination of:

	 	 	 
	 	1.1.1	the circumstances in which Eligible Executives may be eligible for the grant of an Award;

	 	 	 
	 	1.1.2	the performance target (if any) on grant and/or Vesting of Awards, how any such performance target will be selected and whether or not the performance target has been met;

	 	 	 
	 	1.1.3	the additional terms and conditions (if any) to which an Award is subject, how any such additional terms and conditions will be selected and whether or not any such additional terms and conditions have been met;

	 	 	 
	 	1.1.4	the Restricted Period for each Award;

	 	 	 
	 	1.1.5	the maximum amount of an
        Eligible Executive’s Award; 

	 	 	 
	 	1.1.6	how Awards are granted; and
	 	 	 
	 	1.1.7	the extent to which Awards
        will Vest when Participants cease Employment.

	 	 
	 	The Board can change any of its policies at any time but it cannot change its policies to the detriment of a Participant’s subsisting Awards.

	 	 
	1.2	When Awards will be granted

	 	 
	 	An Award can be granted at any time provided that the Date of Grant of an Award is not during a Close Period.

	 	 
	1.3	Awards personal to Participants

	 	 
	 	Awards cannot be transferred, assigned, charged or otherwise disposed of. On the death of a Participant, his Awards can be transmitted to his personal representatives. A Participant can renounce his Award within 30 days following the Date of Grant and, to the extent renounced,
 the Award will be treated as if it had never been granted.

 

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	1.4	How Awards are granted

	 	 
	 	The Company will, from time to time and at its discretion, request the Trustee to grant Awards to one or more recommended Eligible Executives, in accordance with the Rules. An Award can be granted on the basis that it will not Vest in full at the end of one Restricted Period,
 but will Vest in tranches over more than one Restricted Period.

	 	 
	1.5	Award certificate(s)

	 	 
	 	When an Award is granted to a Participant, the Participant will, as soon as administratively practicable, receive either:

	 	 	 
	 	1.5.1	one Award certificate for each tranche of the Award, each specifying the number of Shares under that tranche of the Award, the Restricted Period in respect of that tranche of the Award and what proportion of the Award may Vest following the end of that Restricted
 Period; or

	 	 	 
	 	1.5.2	one Award certificate for the whole Award, specifying the Restricted Period applicable to each tranche of the Award and the number of Shares under each tranche of the Award.

	 	 
	 	Where an Award has been granted so as to Vest in tranches, references in the Rules to Restricted Period or Vesting (or any other applicable term) shall be read, where appropriate, as relating to the appropriate part of the Award and the Rules shall continue to apply to that tranche
 of the Award which has not yet Vested.

	 	 
	2.	PERFORMANCE TARGETS AND ADDITIONAL TERMS AND CONDITIONS

	 	 
	2.1	Awards and performance targets

	 	 
	 	An Award may be subject, in whole or in part, to a performance target selected by the Company which will normally have to be met before the Award (or that part of it subject to the performance target) can Vest. The Vesting of an Award can be subject to any additional terms
 and conditions the Company considers appropriate. If the Vesting of an Award is subject to any performance target or any additional terms and conditions, these will be specified at the Date of Grant. If Awards are exchanged under Rule 5.9, the performance target can be varied
 at the discretion of the Remuneration Committee to take account of this.

 

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	2.2	Different performance targets can apply to different Eligible Executives

	 	 
	 	Awards can be subject to different performance targets and additional terms and conditions for each Eligible Executive.

	 	 
	3.	LIMIT ON PARTICIPATION BY ELIGIBLE EXECUTIVE

	 	 
	 	The Remuneration Committee will, from time to time, set an individual limit on the Market Value (at the Date of Grant) of the Shares the subject of an Award granted to a Participant. This limit cannot be exceeded without the prior approval of the Remuneration Committee. Any
 subsisting Award will not be taken into account for the purposes of this limit.

	 	 
	4.	RIGHTS IN RELATION TO SHARES PRIOR TO THE VESTING OF AN AWARD

	 	 
	4.1	Voting rights, dividends and other rights

	 	 
	 	A Participant has no voting rights attaching to the Shares the subject of his Award, nor a right to any dividends nor other rights attaching to the Shares the subject of such Award prior to the Vesting of the Award in respect of those Shares. However, the Trustee may, on the
 recommendation of the Company, increase the number of Shares the subject of a Participant’s Award after any dividend has been paid by the Company. Any such increase will be equal to such number of Shares whose Market Value on the date any dividend has been paid by the
 Company is as close as possible equal to a sum equivalent to the aggregate dividend (net of any taxes) which has been paid in respect of the number of Shares which is equal to the number of Shares under a Participant’s Award.

	 	 
	4.2	Events which affect
        the share capital of the Company

	 	 
	 	If there is a Variation affecting the share
      capital of the Company prior to the Vesting of an Award, the Trustee will
      adjust the number of Shares the subject of that Award on the recommendation
      of the Company. Any Participant whose Award is adjusted will be notified
      in writing of any such adjustment.
	 	 

	5.	GENERAL OFFER, SCHEME OF ARRANGEMENT OR VOLUNTARY WINDING-UP OF THE COMPANY

	 	 
	5.1	General offer: Awards subject to a performance target

	 	 
	 	If, before an Award which is subject to a performance target has Vested, an offeror (either alone or together with any party acting in concert with him) obtains Control of the Company as a result of a general offer to acquire the whole of the issued ordinary share capital of the
 Company (or such part of it which is not at the time owned by the offeror and any party acting in concert

 

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	 	with the offeror) that Award will Vest as
      soon as the change of Control takes effect, but only to the extent specified
      by the Remuneration Committee in accordance with Rule 5.2.
	 	 
	5.2	The discretion of
        the Remuneration Committee

	 	 
	 	The Remuneration Committee will confirm as soon as practicable after the general offer has been made the minimum extent to which an Award which is subject to a performance target may Vest, to the extent that the performance target has been met up to the change of Control
 taking effect. Subject to this, the Remuneration Committee may decide to take other factors into account, which it believes to be relevant in permitting the Award to Vest beyond the extent to which the performance target has been met.

	 	 
	5.3	General offer: Awards not subject to a performance target

	 	 
	 	If, before an Award which is not subject to a performance target has Vested, an offeror (either alone or together with any party acting in concert with him) obtains Control of the Company as a result of a general offer to acquire the whole of the issued ordinary share capital of the
 Company (or such part of it which is not at the time owned by the offeror and any party acting in concert with the offeror) that Award will Vest as soon as the change of Control takes effect (unless the Remuneration Committee has specified otherwise as an additional term or
 condition on which the Award was granted). If Rule 5.9 applies, however, Awards will not Vest under this Rule 5.3.

	 	 
	5.4	Extension to Participants of general offer

	 	 
	 	The Company will use its best endeavours to procure that to the extent a Participant’s Award Vests in accordance with Rule 5.1 or Rule 5.3, the offeror will make an offer to acquire from the Participant his Shares on the same terms as Shares of the same class were acquired under
 the general offer.

	 	 
	5.5	Scheme of arrangement: Awards subject to a performance target

	 	 
	 	If, before an Award which is subject to a performance target has Vested, the court directs that a meeting of the holders of Shares should be convened under Section 425 of the Companies Act 1985 to consider a scheme of arrangement, a Participant’s Award will Vest on the date
 the scheme of arrangement is sanctioned by the court, but only to the extent specified by the Remuneration Committee in accordance with Rule 5.6. If, however, the purpose and effect of the scheme of arrangement is to create a new holding company for the Company, where
 such holding company would, following the scheme of arrangement, have substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the scheme of arrangement, Rule 5.9 may, with the consent of the Board, apply. If it does

 

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	 	apply, an Award subject to a performance target will not Vest under this Rule 5.5.

	 	 
	5.6	The discretion of the Remuneration Committee

	 	 
	 	The Remuneration Committee will confirm as soon as practicable after the date of the court’s direction the minimum extent to which an Award which is subject to a performance target may Vest, to the extent that the performance target has been met up to the date the scheme of
 arrangement is sanctioned by the court. Subject to this, the Remuneration Committee may decide to take other factors into account, which it believes to be relevant in permitting the Award to Vest beyond the extent to which the performance target has been met.

	 	 
	5.7	Scheme of arrangement: Awards not subject to a performance target

	 	 
	 	If, before an Award which is not subject to a performance target has Vested, the court directs that a meeting of the holders of Shares should be convened under Section 425 of the Companies Act 1985 to consider a scheme of arrangement, that Award will Vest on the date the
 scheme of arrangement is sanctioned by the court (unless the Remuneration Committee has specified otherwise as an additional term or condition on which the Award was granted). If Rule 5.9 applies, however, that Award will not Vest under this Rule 5.7.

	 	 
	5.8	Voluntary winding-up

	 	 
	 	If there is a resolution for a member’s voluntary winding-up of the Company, the awards will Vest in full conditionally on the resolution being passed.

	 	 
	5.9	The exchange of Awards

	 	 
	 	If, before an Award has Vested, any company (the “Acquiring Company”):

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

	 	 	 	 
	 	 	(i)	the whole of the issued ordinary share capital of the Company which is made on condition that if it is satisfied the Acquiring Company will have Control of the Company, or

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

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

 

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	 	5.9.2	obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under Section 425 of the Companies Act 1985; or

	 	 	 
	 	5.9.3	becomes bound or entitled to acquire Shares under Sections 428 to 430F of that Act

	 	 
	 	and the Acquiring Company has agreed that the outstanding Awards should continue, the Trustee will, within the Appropriate Period, take such action as is appropriate to acquire shares in the Acquiring Company. On this basis, Participants’ Awards (“Old Awards”) will become
 awards (“New Awards”) in respect of the shares acquired by the Trustee in respect of the Shares subject to the Old Awards. Each New Award will be equivalent to each Old Award before the change of Control. The New Awards will not be regarded as equivalent to the Old
 Awards unless:

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

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

	 	 
	 	References to Shares will, in relation to the New Awards, be taken as references to shares of the company whose shares are under New Awards. References to the Company shall be taken to be references to the company whose shares are under the New Awards, where
 appropriate. The New Awards will not Vest/lapse if Rule 5 applies following and in respect of the change of Control which led to the grant of the New Awards. The Trustee will agree to any amendment to the applicable employee share ownership trust to give effect to this Rule
 5.9. This Rule 5.9 shall only apply to Awards which are not subject to a performance target unless a scheme of arrangement occurs under Section 425 of the Companies Act 1985 and the purpose and effect of the scheme of arrangement is as set out in Rule 5.5, in which case, this
 Rule 5.9 shall apply to all Awards.

	 	 
	5.10	Cessation of Employment following a change of Control

	 	 
	 	If following the date of any change of Control of the Company, a Participant’s Employment:

	 	 	 
	 	5.10.1	is terminated by his employer for a reason other than gross misconduct; or

 

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	 	5.10.2	ceases following the Participant’s resignation because the nature of his duties are such that the Participant believes that he has lesser duties and responsibilities than before the change of Control

	 	 
	 	then, subject to the remainder of this Rule 5.10:

	 	 	 
	 	5.10.3	all his New Awards will Vest in full on the date he so ceases Employment; and/or

	 	 	 
	 	5.10.4	provided that if the Participant’s Employment so ceases within the period of 12 months following the date of the change of Control, if any of the Participant’s Awards Vested on the change of Control, the Participant will be entitled to receive an amount which is equal in
 value to the difference between the aggregate Market Value of the Shares he became entitled to when his Award Vested under Rule 5.1 or Rule 5.5 and the aggregate Market Value of the Shares he would have become entitled to had the Award Vested at that time as if the
 performance target had been met in full. For the purpose of this Rule 5.10.4, the Market Value used shall be the Market Value of a Share as at the date his Award Vested. Any amount payable under this Rule 5.10.4 shall be payable, subject to any deduction required by law
 to be made, within thirty days after the cessation of Employment concerned.

	 	 
	 	This Rule 5.10 shall not apply to a Participant’s Award if Rule 5.9 applied to that Award following a scheme of arrangement the purpose and effect of which is as set out in Rule 5.5.

	 	 
	6.	CEASING TO BE IN EMPLOYMENT DURING THE RESTRICTED PERIOD

	 	 
	6.1	Ceasing to be in Employment:
        generally

	 	 
	 	Unless otherwise provided in the Rules, if a Participant ceases to be in Employment before the end of the Restricted Period, all his Awards will lapse in full on the date he so ceases.

	 	 
	6.2	Ceasing to be in Employment because of death, ill health or disability

	 	 
	 	If a Participant ceases or is to cease to be in Employment before the end of the Restricted Period because of death, ill health or disability:

	 	 	 
	 	6.2.1	in respect of Awards the Restricted Period for which will end less than 12 months from the date the Participant so ceases Employment, those Awards will Vest on the date the Participant so ceases Employment; and

	 	 	 
	 	6.2.2	in respect of all other Awards, the Company may, at its discretion, recommend the Trustee to Vest, as soon as possible, all or part of any

 

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	 	 	Award and/or preserve all or part of any Award to the extent that it is recommended not to Vest immediately. The Award, to the extent that it is preserved, must be preserved until the end of the Restricted Period and subject to the Rules. To the extent that the Trustee has
 not exercised its discretion to Vest or preserve all or part of an Award, it will lapse on the date the Trustee confirms its decision.

	 	 
	6.3	Ceasing to be in Employment
        because of Redundancy or Retirement

	 	 
	 	If a Participant ceases or is to cease to be in Employment before the end of the Restricted Period because of his Redundancy or Retirement, all his Awards will lapse on the date he so ceases. The Company may, however, at its discretion, recommend the Trustee to Vest, as soon
 as possible, all or part of any Award and/or preserve all or part of any Award to the extent that it is recommended not to Vest immediately. The Award, to the extent that it is preserved, must be preserved until the end of the Restricted Period and subject to the Rules. To the extent
 that the Trustee has not exercised its discretion to Vest or preserve all or part of an Award, it will lapse on the date the Trustee confirms its decision.

	 	 
	6.4	Ceasing to be in Employment because of the sale of a company or business

	 	 
	 	If a Participant ceases to be in Employment before the end of the Restricted Period because the company in the Group which employs him ceases to be a Participating Company or an Associated Company or because of the transfer or sale of the undertaking (or part of the
 undertaking) in which he is employed to a person who is neither a Participating Company nor an Associated Company, all his Awards will lapse on the day he so ceases. The Company may, however, at its discretion, recommend the Trustee to Vest, as soon as possible, all or part
 of any Award and/or preserve all or part of any Award to the extent that it is recommended not to Vest immediately. The Award, to the extent that it is preserved, must be preserved until the end of the Restricted Period and subject to the Rules. To the extent that the Trustee has
 not exercised its discretion to Vest or preserve all or part of an Award, it will lapse on the date the Trustee confirms its decision.

	 	 
	6.5	Circumstances when a performance target will be treated as if it has been waived

	 	 
	 	If a Participant’s Awards Vest under Rule 6 early, any performance target which applies to Vesting will be treated as if it had been waived, unless the Company decides otherwise. If the Company does decide otherwise, Awards will, at the discretion of the Company, and when
 the relevant event in Rule 6 takes place, either lapse in part and/or to the extent that they do not lapse, will be preserved or Vest on whatever basis the Company decides.

 

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	6.6	Ceasing to be in Employment in other circumstances

	 	 
	 	If, before the end of the Restricted Period, a Participant gives or is given notice to leave Employment or ceases to be in Employment without any notice having been given in any circumstances other than the ones referred to in Rule 6.2, Rule 6.3 or Rule 6.4, his Award will lapse
 on that date, unless the Company decides otherwise or unless, (being female) she is entitled to exercise and subsequently does exercise the statutory right (or any corresponding contractual right) to resume Employment after an absence due to pregnancy.

	 	 
	6.7	Change of circumstances of Employment – deferral of Vesting and lapse provisions

	 	 
	 	If a Participant ceases to be in Employment before the end of the Restricted Period, but continues to provide services to the Group or becomes employed by an Associated Undertaking, the Company can decide that the Participant is deemed not to have ceased Employment and
 that his Awards will continue to be held subject to the Rules. Rules 5 to 6 will apply when he subsequently ceases to provide services to the Group, or when he ceases to be employed by an Associated Undertaking and is not re-employed by a member of the Group, or in such
 other circumstances as the Company may determine.

	 	 
	6.8	The effect of the lapsing of Awards

	 	 
	 	To the extent that a Participant’s Award lapses, he is not entitled to any Shares which are the subject of that Award.

	 	 
	7.	THE END OF THE RESTRICTED PERIOD

	 	 
	7.1	Where all or part
        of the Award is not subject to any performance target

	 	 
	 	As soon as reasonably practicable following the end of the Restricted Period and to the extent that an Award has not already Vested under Rule 5 or Rule 6, the Shares the subject of that part of the Award which is not subject to any performance target will be transferred to a
 Participant provided that he is still in Employment at the end of the Restricted Period and any additional terms and conditions to which the Award is subject are met.

	 	 
	7.2	Where all or part of the Award is subject to a performance target which has been met

	 	 
	 	The Company, in its absolute discretion, will decide to what extent the performance target relevant to all or part of each Award has been met as soon as practically possible. To the extent that it has been met at the end of the Restricted Period and to the extent that an Award has
 not already Vested under Rule 5 or Rule 6, the part of the Award subject to the performance target

 

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	 	will Vest as soon as practically possible following the Company’s decision. The relevant number of Shares the subject of that part of the Award will be transferred as soon as practicable to a Participant who up until the end of the Restricted Period:

	 	 	 
	 	7.2.1	was in Employment; or

	 	 	 
	 	7.2.2	was not in Employment but to whom the Shares can still be transferred because of Rule 6.

	 	 
	 	If the performance target is one which provides for Vesting in proportion to the extent that the performance target has been met, the part of the Award which is subject to the performance target will Vest in proportion to the extent that the performance target has, in the Company’s
 view, been met at the end of the Restricted Period.

	 	 
	7.3	If the performance target has not been met

	 	 
	 	If the Company decides that any performance target which applies to all or part of the Award has not been met at the end of the Restricted Period, the Company can decide to extend the Restricted Period. If it does make that decision, the Company will also decide whether:

	 	 	 
	 	7.3.1	all the Shares which are subject to that part of the Award to which the performance target applies continue to be held subject to the relevant Award until the end of the extended Restricted Period; or

	 	 	 
	 	7.3.2	some of those Shares continue to be so held, with the balance of the Shares being transferred as soon as possible to the relevant Participants.

	 	 
	 	If the performance target is not met at the end of the Restricted Period, extended under this Rule 7.3, that part of the Award to which the performance target applies will lapse and the Participants will not be entitled to any Shares the subject of that part of the Award. Participants
 will be notified in writing of any of these decisions.

	 	 
	8.	TRANSFER OF SHARES

	 	 
	8.1	When an Award has Vested

	 	 
	 	When an Award has Vested, the Participant will be entitled to Shares the subject of that Award. The number of Shares he is entitled to (which will be transferred to the Participant as soon as reasonably practicable) will depend on the extent to which any applicable performance
 target has been met and will be subject to any withholdings in accordance with Rule 8.2 that may be necessary on account of a Participant’s Tax Liability in respect of the Award.

 

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	8.2	Sale of Shares to
        satisfy a Participant’s Tax Liability

	 	 
	 	Unless the Participant makes arrangements (satisfactory to the Company) to provide payment in respect of his Tax Liability, the Company or any relevant company in the Group will make arrangements to sell on behalf of the Participant such number of Shares the subject of the
 Award which has Vested as is necessary to discharge the Tax Liability.

	 	 
	9.	AMENDING THE PLAN

	 	 
	9.1	The Company has discretion to amend the Rules

	 	 
	 	Subject to the rest of Rule 9, the Company can amend the Rules at any time. The Trustee will be notified of any amendment to the Rules.

	 	 
	9.2	Additional sections

	 	 
	 	The Company can adopt additional sections of the Rules applicable in any jurisdiction under which Awards may be subject to as additional and/or modified terms and conditions, having regard to any securities, exchange control or taxation laws, which may apply to the
 Participant, the Company, any Participating Company or Associated Company. Any additional sections must conform to the basic principles of the Plan.

	 	 
	9.3	No abrogation of existing rights

	 	 
	 	No amendment will be made under Rule 9.1 which would abrogate or materially affect adversely the existing rights of a Participant unless it is made with his written consent or by a resolution passed as if the Awards constituted a separate class of share capital, and the provisions
 of the Articles of Association of the Company and of the Companies Act 1985 relating to class meetings (with the necessary amendments) applied to that class.

	 	 
	9.4	Shareholder approval

	 	 
	 	No amendment to the advantage of Participants or Eligible Executives (except for an amendment which could be included in an additional section adopted under Rule 9.2) can be made to the provisions in the Rules (if any) relating to:

	 	 	 
	 	9.4.1	who can be a Participant or Eligible Executive; or

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

	 	 
	 	without the approval by ordinary resolution of the Company in general meeting, except minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable

 

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	 	tax, exchange control or regulatory treatment for Participants or Eligible Executives or for a member of the Group.

	 	 
	10.	GENERAL

	 	 
	10.1	Notices

	 	 
	 	Any notice or other communication in connection with the Plan (including, if permitted, Award certificates) can be given by electronic mail or by personal delivery or by post, (in the case of a company, to its registered office and in the case of an individual to his last known
 address) or by any other means which a Participating Company and its employees use to communicate with each other. Where a notice or other communication is given by first-class post, it shall be deemed to have been received 72 hours after it was put into the post properly
 addressed and stamped.

	 	 
	10.2	Documents sent to shareholders

	 	 
	 	Participants may, but are not entitled to, receive copies of any notice or document sent by the Company to the holders of Shares.

	 	 
	10.3	Replacement Award certificates

	 	 
	 	If any Award certificate is worn out, defaced or lost, it can be replaced on such evidence being provided as may be required.

	 	 
	10.4	Shares to cover Awards

	 	 
	 	Enough Shares will be available on maturity to satisfy all Awards granted.

	 	 
	10.5	Administration of the Plan

	 	 
	 	The Plan will be administered in a manner approved by the Company. No individual will have any authority in relation to the Plan unless that authority has been approved in accordance with the policy set by the Board. The Company’s decision on any matter concerning the Plan,
 including whether or not any performance targets in relation to an Award have been met, or the interpretation of the Rules, will be final and binding.

	 	 
	10.6	Costs of introducing and administering the Plan

	 	 
	 	The costs of introducing and administering the Plan will be borne by the Company. However, the Company can require any Participating Company to enter into such arrangement to reimburse the Company for any costs borne by the Company directly or indirectly in respect of
 such Participating Company’s officers or employees.

 

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	10.7	Termination of the Plan

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

	 	 
	10.8	Rights of Participants and Eligible Employees

	 	 
	 	Participation in the Plan is not pensionable. Nothing in the Plan nor in any instrument executed pursuant to it will confer upon any person any right to continue in the employment of the Group, or will affect the right of the Company or any company in the Group to terminate the
 employment of any person without liability at any time with or without cause, or will impose upon the Group or the Trustee or the Board or their respective agents and employees any liability whatsoever (whether in contract, tort, or otherwise howsoever) in connection with:

	 	 	 
	 	10.8.1	the lapse of any Awards pursuant to the Rules;

	 	 	 
	 	10.8.2	the failure or refusal to exercise any discretion under the Rules; and/or

	 	 	 
	 	10.8.3	a Participant ceasing to be a person who has the status or relationship of an employee or executive director with the Company or any other company in the Group for any reason whatever as a result of the termination of the employment relationship with the Company or
 any other company in the Group.

	 	 
	10.9	Waiver of any rights

	 	 
	 	Any person who ceases to have the status or relationship of an employee or executive director with the Company or any other company in the Group for any reason as a result of dismissal (lawful or otherwise) shall not be entitled and shall be deemed irrevocably to have waived
 any entitlement by way of damages for dismissal or by way of compensation for loss of office or otherwise to any sum, damages, Shares or other benefits to compensate that person for the loss of any rights, benefits or expectations under any Award, the Plan or any instrument
 executed pursuant to it.

	 	 
	10.10	The benefit of Rule 10.8 and Rule 10.9

	 	 
	 	The benefit of Rule 10.8 and Rule 10.9 is given for the Company and/or the Trustee (where the Award was not granted by the Company), as appropriate for itself and as trustee and agent of the Company (if the benefit is given for the Trustee), and of all the Company’s
 Subsidiaries or any of its Associated Companies or Associated Undertakings. To the extent that the Company, any Subsidiary or Associated Company or Associated Undertaking of the Company is not party to the grant of an Award, the Company and/or the

 

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	 	Trustee, as appropriate, will hold the benefit of Rule 10.8 and Rule 10.9 on trust and as agent for each of them and the Company and/or the Trustee may, at their respective discretion, assign the benefit of this Rule 10.10 to any of them.

	 	 
	10.11	Awards are subject to the Rules

	 	 
	 	Awards are granted incorporating and subject to the Rules.

	 	 
	10.12	Articles of Association

	 	 
	 	Any Shares acquired on the Vesting of Awards are subject to the Articles of Association of the Company as amended from time to time.

	 	 
	10.13	Governing Law

	 	 
	 	The Rules are governed by and interpreted in accordance with the law of England. Each Participant, the Company and any other Participating Company or Associated Company submits to the jurisdiction of the English courts in relation to anything arising under the Plan. The
 Company may, in its absolute discretion, determine that another law may apply to the application of the Plan outside the United Kingdom.

 

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	mmO2
      RESTRICTED SHARE PLAN

	 
	APPENDIX I

	 
	U.S. SECTION

	 	 
	1.	This Appendix I constitutes the part of the Plan that will govern the grant of Awards to United States Participants (the “U.S. Awards”). It incorporates all the Rules as set forth above as modified in accordance with the provisions of this Appendix I).

	 	 
	2.	How U.S. Awards will be granted

	 	 
	 	All U.S. Awards will be evidenced by an instrument(s) in such form or forms as may from time to time be approved by the Company.

	 	 
	3.	Administration of the U.S. Section

	 	 
	 	The Company shall (i) administer the U.S. Section, (ii) establish from time to time such rules and regulations as it may deem appropriate for the proper administration of the U.S. Section and (iii) make such determinations under, and such interpretations of, and take such steps in
 connection with, the U.S. Section or U.S. Awards as it may deem necessary or advisable.

	 	 
	4.	Addition of consistent
        provisions: certain rights

	 	 
	 	Any U.S. Award may be subject to any other provision imposed by the Company that is consistent with the purpose and intent of this Appendix I. During the Restricted Period, a Participant may, in the sole authority and discretion of the Company, and subject to such terms,
 conditions and limitations as the Board may determine from time to time in its sole authority and discretion, have voting and dividend rights with respect to such Participant’s U.S. Award if a certificate relating to the underlying Shares or ADSs has been issued in the Participant’s
 name.

	 	 
	5.	Section 16 compliance

	 	 
	 	If any officer, director or shareholder of the Company receives a U.S. Award and therefore becomes subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall take all appropriate action to ensure that such U.S.
 Awards under this Appendix I are exempt from Section 16(b) under the Exchange Act.

 

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	6.	Right to ADSs

	 	 
	 	The Company shall arrange for any U.S. Award to constitute a right to or with respect to ADSs rather than Shares, in which case references to “Shares” in the Plan shall be deemed to be reference to “ADSs”, as the context may require.

	 	 
	7.	U.S. Withholding Taxes

	 	 
	 	It shall be a condition to the obligation of the Company to deliver Shares or ADSs pursuant to any U.S. Award granted to a Participant under the Plan that the Participant pay to the Company (or the Subsidiary that employs the Participant) such amount as may be required by the
 Company or such Subsidiary for the purpose of satisfying any liability for any U.S. Federal, state or local taxes of any kind required to be withheld with respect to it. Any U.S. Award granted under the Plan may require the Company or permit the Participant of such Award to
 elect, in accordance with any applicable rules established by the Company, to withhold or to pay all or part of the amount of such withholding taxes in Shares or ADSs. Such election may be denied by the Company in its sole discretion, or may be made subject to certain
 conditions specified by the Company. Any payments made in cash under the Plan are the subject of all U.S. Federal, state or local taxes of any kind required to be withheld with respect to them.

	 	 
	8.	Securities Laws compliance

	 	 
	 	No Shares or ADSs may be issued or transferred in connection with a U.S. Award unless the Company shall have determined that such issuance, transfer or settlement is in compliance with or pursuant to an exemption from all applicable U.S. Federal and state securities laws.

	 	 
	9.	Certain Definitions

	 	 
	 	For the purposes of the U.S. Awards, the following terms shall have the following meanings, notwithstanding any contrary provisions in the Plan:

	 	 
	 	“Market Value” in relation to an ADS means an amount equal to half way between the high and low sales prices of ADSs recorded on the New York Stock Exchange on the applicable valuation date.

	 	 
	 	“Normal Retirement” means retiring from Employment on or reaching the age of 60.

	 	 
	10.	Amendments to certain provisions of the Rules

	 	 
	 	In Rule 6.6, the words “being female” shall be deleted and replaced by the words “he or she”.

	 	 
	 	In Rule 10.1, “72 hours” shall be deleted and replaced by “7 Dealing Days”.

 

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THE mmO2
  RESTRICTED SHARE PLAN

DEFINITIONS APPENDIX

	INTRODUCTION

The words and expressions used in the Rules which have capital letters have the meanings set out below. In the Rules:

	 	(i)	the headings are for the sake of convenience only and should be ignored when construing the Rules;

	 	 	 
	 	(ii)	reference to any statutory provisions are to those provisions as amended, extended or re-enacted from time to time, and include any subordinate legislation made under them; and

	 	 	 
	 	(iii)	unless the context requires otherwise, words in the singular include the plural and vice versa and words imputing either gender include both genders.

	 	 
	1.	DEFINITIONS

	 	 
	ADSs	American depositary shares each representing ten ordinary shares in the Company;

	 	 
	Appropriate Period	means:

	 	 	 
	 	(i)	in the case of Rule 5.9.1, any time before the general offer closes;

	 	 	 
	 	(ii)	in the case of Rule 5.9.2, any time before midday on the day immediately before the date for which the shareholders’ meeting is convened; and

	 	 	 
	 	(iii)	in the case of Rule 5.9.3, any time during which the acquiring company remains bound or entitled;

	 	 
	Associated Company	in relation to the Company:

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

 

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

	 	 
	Associated Undertaking	a company or partnership in which the Company has an interest through a shareholding or otherwise;

	 	 
	Award	a contingent right to purchase (but not subscribe for) Shares under the Plan which has been granted or is proposed to be granted under the Plan;

	 	 
	Board	the board of directors for the time being of the Company or a duly authorised committee of it;

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

	 	 
	the Company	mmO2 plc (registered no. 4190833) which, for the purposes of the Rules, may act through the Board or through any two employees of the Group authorised to act in accordance with the policies established under Rule 1;

	 	 
	Control	has the meaning given by Section 840 of the Taxes Act;

	 	 
	Date of Grant	in relation to an Award, the date on which that Award is granted;

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

	 	 
	Definitions Appendix	this appendix which forms part of the Rules;

	 	 
	Eligible Executive	any person (including one who is a director of the Company) who, at the Date of Grant, is an employee of the Company or a Subsidiary;

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

 

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	Group	Participating Companies and Associated Companies;

	 	 
	London Stock Exchange	the London Stock Exchange Limited (or any successor body carrying on the business of the London Stock Exchange) or, where the context so requires, the New York Stock Exchange or any other exchange on which the Shares are listed or
 traded;

	 	 
	Market Value	in relation to a Share on any day, an amount equal to its middle market quotation (as derived from the Daily Official List of the London Stock Exchange) on, at the discretion of the Company, that day or the Dealing Day immediately preceding
 that day or the average middle market quotation of the three Dealing Days immediately preceding that day;

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

	 	 
	Participating Company	the Company or any Subsidiary designated by the Board as a Participating Company;

	 	 
	Plan	the mmO2 Restricted Share Plan constituted by the Rules;

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

	 	 
	Redundancy	ceasing to be in Employment because the Company has decided that there is no longer any requirement or there is a reduced requirement for the Participant to perform the work which he previously performed;

	 	 
	Remuneration Committee	the duly authorised remuneration committee of the Board all of whose members are non-executive directors;

 

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	Restricted Period	in relation to an Award,
        the period or periods specified at the Date of Grant and at the end of
        which all or part of an Award may Vest, which will normally be a period
        of three years but may be more or less, at the discretion of the Company;

	 	 
	Retirement	normal retirement at or after any age at which the Participant is bound to retire under the terms of his contract of employment (or such other date as the Company may determine);

	 	 
	Rules	the rules of the Plan, including the Definitions Appendix, as amended from time to time;

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

	 	 
	Subsidiary	a company which in relation to the Company is a company as defined by Section 736 of the Companies Act 1985;

	 	 
	Taxes Act	the Income and Corporation Taxes Act 1988;

	 	 
	Tax Liability	in relation to a Participant, the amount of all taxes and/or national insurance contributions or any other contribution which any company in the Group is required to, or may account for and on behalf of or, if permitted, in respect of that
 Participant’s Award;

	 	 
	Trustee	the trustee from time to time of an employee share ownership trust established by the Company as an employees’ share scheme as defined under section 743 Companies Act 1985;

	 	 
	Variation	means:

	 	 	 
	 	(i)	in relation to the equity share capital of the Company:

	 	 	 	 
	 	 	(a)	a capitalisation issue, an offer or invitation made by way of rights, a subdivision, a consolidation or reduction; or

	 	 	 	 
	 	 	(b)	any other variation; or

 

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	 	(ii)	a demerger by the Company of a business or Subsidiary;

	 	 
	 	which, would, in the opinion of the Company, justify an adjustment to any Award;

	 	 
	Vest, Vested or Vesting	in relation to an Award, the point at which a Participant becomes absolutely entitled to all or some of the Shares the subject of that Award.

 

22b713405ex4-16

 Exhibit 4.16 

 

 Back to Contents

 

  Mr David Arculus

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 1st April 2003. Following on our recent discussions of the latest
    developments in best practice, I am writing to set out for your review and
    consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 1st April 2003, unless otherwise
    terminated earlier by and at the discretion of either party upon one month’s
    written notice. Continuation of your contract of appointment is contingent
    on satisfactory performance and re-election at forthcoming AGMs. Non-executive
    Directors are typically expected to serve two three-year terms, although the
    Board may invite you to serve for an additional period. In addition, you have
    agreed to serve on the Audit and Nomination committees with effect from 1st
    April 2003. A copy of the Terms of Reference of the Committees have already
    been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Audit and Remuneration Committees and around two meetings of the Nomination
    Committee (as applicable to you), the AGM, one annual Board strategy session
    lasting two days and at least one site visit per year. In addition, you will
    be expected to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will not
    be unreasonably withheld provided (a) the likely time commitment for the other
    role will not affect your ability to give priority to your duties under this
    appointment, and (b) the other role does not give rise to competitive, conflict
    or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered Office:
        Wellington Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

   1
  

  

  

   
  
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   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs.
    The Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

   2
  

  

  

   
  
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  4. FEES

  Following our recent
    review of the non-executive Director fee structure with effect from 1st April
    2003, you will be paid a basic fee of £40,000 gross per annum, which
    will be paid quarterly in arrears and will be subject to an annual review
    by the Board. You will also receive fees in respect of Committee membership.
    With effect from 1st April 2003, the fees for such membership are £5,000
    gross per annum for membership of each of the Audit and Remuneration Committees
    and £3,000 gross per annum for membership of the Nomination Committee.
    There is also a fee of £5,000 payable for Chairmanship of any of these
    Committees by a non-executive Director other than where the Deputy Chairman
    chairs such a committee. These fees will also be paid quarterly and will be
    subject to annual review by the Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s auditors.

  3

   
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  8. REVIEW PROCESS

  The performance of individual
    Directors and the whole Board and its committees is evaluated annually. If,
    in the interim, there are any matters which cause you concern about your role
    you should discuss them with the Chairman as soon as is appropriate.

  9. INSURANCE

  The Company has Directors’
    and Officers liability insurance and it is intended to maintain such cover
    for the full term of your appointment. The current indemnity limit is £125,000,000.
    A summary of the policy will be provided to you.

  10. INDEPENDENT
    PROFESSIONAL ADVICE

  Occasions may arise when
    you consider that you need professional advice in the furtherance of your
    duties as a Director. Circumstances may occur when it will be appropriate
    for you to seek advice from independent advisors at the Company’s expense.
    A copy of the Board’s agreed procedure under which Directors may obtain
    such independent advice was provided to you in your induction pack at the
    time of your appointment.

  If you are willing to accept
    these revised terms of appointment relating to your appointment as a non-executive
    Director of mmO2 plc, please confirm your acceptance of these terms by signing
    and returning to me the attached copy of this letter.

  Yours sincerely

  

  David Varney

    Chairman

  

  

   

  4

  

  

   
  
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  Mr David Chance

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 21st January 2003. Following on our recent discussions of the
    latest developments in best practice, I am writing to set out for your review
    and consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 21st January 2003, unless
    otherwise terminated earlier by and at the discretion of either party upon
    one month’s written notice. Continuation of your contract of appointment is
    contingent on satisfactory performance and re-election at forthcoming AGMs.
    Non-executive Directors are typically expected to serve two three-year terms,
    although the Board may invite you to serve for an additional period. In addition,
    you have agreed to serve on the Audit and Nomination committees with effect
    from 1st April 2003. A copy of the Terms of Reference of the Committees have
    already been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Audit and Remuneration Committees and around two meetings of the Nomination
    Committee (as applicable to you), the AGM, one annual Board strategy session
    lasting two days and at least one site visit per year. In addition, you will
    be expected to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will not
    be unreasonably withheld provided (a) the likely time commitment for the other
    role will not affect your ability to give priority to your duties under this
    appointment, and (b) the other role does not give rise to competitive, conflict
    or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered Office: Wellington
        Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

 1

  

  

   
  
  Back to Contents

  
   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs. The
    Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

   2
  

  

  

   
  
  Back to Contents

  
  4. FEES

  Following our recent
    review of the non-executive Director fee structure with effect from 1st April
    2003, you will be paid a basic fee of £40,000 gross per annum, which
    will be paid quarterly in arrears and will be subject to an annual review
    by the Board. You will also receive fees in respect of Committee membership.
    With effect from 1st April 2003, the fees for such membership are £5,000
    gross per annum for membership of each of the Audit and Remuneration Committees
    and £3,000 gross per annum for membership of the Nomination Committee.
    There is also a fee of £5,000 payable for Chairmanship of any of these
    Committees by a non-executive Director other than where the Deputy Chairman
    chairs such a committee. These fees will also be paid quarterly and will be
    subject to annual review by the Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s auditors.

  3

  

  

   
  
  Back to Contents

  
  8. REVIEW PROCESS

  The performance of individual
    Directors and the whole Board and its committees is evaluated annually. If,
    in the interim, there are any matters which cause you concern about your role
    you should discuss them with the Chairman as soon as is appropriate.

  9. INSURANCE

  The Company has Directors’
    and Officers liability insurance and it is intended to maintain such cover
    for the full term of your appointment. The current indemnity limit is £125,000,000.
    A summary of the policy will be provided to you.

  10. INDEPENDENT
    PROFESSIONAL ADVICE

  Occasions may arise when
    you consider that you need professional advice in the furtherance of your
    duties as a Director. Circumstances may occur when it will be appropriate
    for you to seek advice from independent advisors at the Company’s expense.
    A copy of the Board’s agreed procedure under which Directors may obtain
    such independent advice was provided to you in your induction pack at the
    time of your appointment.

  If you are willing to accept
    these revised terms of appointment relating to your appointment as a non-executive
    Director of mmO2 plc, please confirm your acceptance of these terms by signing
    and returning to me the attached copy of this letter.

  Yours sincerely

  

  

  I accept the revised terms
    of my appointment as a Non-Executive Director of mmO2 plc.

  

  4

  

  

   
  
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  Mr Stephen Hodge

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 1st October 2003. Following on our recent discussions of the
    latest developments in best practice, I am writing to set out for your review
    and consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 19th November 2001, unless
    otherwise terminated earlier by and at the discretion of either party upon
    one month’s written notice. Continuation of your contract of appointment is
    contingent on satisfactory performance and re-election at forthcoming AGMs.
    Non-executive Directors are typically expected to serve two three-year terms,
    although the Board may invite you to serve for an additional period. In addition,
    you have agreed to serve on the Audit and Remuneration committees with effect
    from 1st April 2003. A copy of the Terms of Reference of the Committees have
    already been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Audit and Remuneration Committees and around two meetings of the Nomination
    Committee (as applicable to you), the AGM, one annual Board strategy session
    lasting two days and at least one site visit per year. In addition, you will
    be expected to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will not
    be unreasonably withheld provided (a) the likely time commitment for the other
    role will not affect your ability to give priority to your duties under this
    appointment, and (b) the other role does not give rise to competitive, conflict
    or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered
        Office: Wellington Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

  1

  

  

   
  
  Back to Contents

  
   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs. The
    Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

   2
  

  

  

   
  
  Back to Contents

  
  4. FEES

  Following our recent
    review of the non-executive Director fee structure with effect from 1st April
    2003, you will be paid a basic fee of £40,000 gross per annum, which
    will be paid quarterly in arrears and will be subject to an annual review
    by the Board. You will also receive fees in respect of Committee membership.
    With effect from 1st April 2003, the fees for such membership are £5,000
    gross per annum for membership of each of the Audit and Remuneration Committees
    and £3,000 gross per annum for membership of the Nomination Committee.
    There is also a fee of £5,000 payable for Chairmanship of any of these
    Committees by a non-executive Director other than where the Deputy Chairman
    chairs such a committee. These fees will also be paid quarterly and will be
    subject to annual review by the Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s auditors.

  3

  

  

   
  
  Back to Contents

  
  8. REVIEW PROCESS

  The performance of individual
    Directors and the whole Board and its committees is evaluated annually. If,
    in the interim, there are any matters which cause you concern about your role
    you should discuss them with the Chairman as soon as is appropriate.

  9. INSURANCE

  The Company has Directors’
    and Officers liability insurance and it is intended to maintain such cover
    for the full term of your appointment. The current indemnity limit is £125,000,000.
    A summary of the policy will be provided to you.

  10. INDEPENDENT
    PROFESSIONAL ADVICE

  Occasions may arise when
    you consider that you need professional advice in the furtherance of your
    duties as a Director. Circumstances may occur when it will be appropriate
    for you to seek advice from independent advisors at the Company’s expense.
    A copy of the Board’s agreed procedure under which Directors may obtain
    such independent advice was provided to you in your induction pack at the
    time of your appointment.

  If you are willing to accept
    these revised terms of appointment relating to your appointment as a non-executive
    Director of mmO2 plc, please confirm your acceptance of these terms by signing
    and returning to me the attached copy of this letter.

  Yours sincerely

  

  

  4

  

  

   
  
  Back to Contents

  
  

  Dr Neelie Kroes

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 31st August 2001. Following on our recent discussions of the
    latest developments in best practice, I am writing to set out for your review
    and consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 19th November 2001, unless
    otherwise terminated earlier by and at the discretion of either party upon
    one month’s written notice. Continuation of your contract of appointment is
    contingent on satisfactory performance and re-election at forthcoming AGMs.
    Non-executive Directors are typically expected to serve two three-year terms,
    although the Board may invite you to serve for an additional period. In addition,
    you have agreed to serve on the Audit and Remuneration committees with effect
    from 1st April 2003. A copy of the Terms of Reference of the Committees have
    already been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Audit and Remuneration Committees and around two meetings of the Nomination
    Committee (as applicable to you), the AGM, one annual Board strategy session
    lasting two days and at least one site visit per year. In addition, you will
    be expected to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will not
    be unreasonably withheld provided (a) the likely time commitment for the other
    role will not affect your ability to give priority to your duties under this
    appointment, and (b) the other role does not give rise to competitive, conflict
    or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered
        Office: Wellington Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

  1

  

  

   
  
  Back to Contents

  
   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs. The
    Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

   2
  

  

  

   
  
  Back to Contents

  
  4. FEES

  Following our recent
    review of the non-executive Director fee structure with effect from 1st April
    2003, you will be paid a basic fee of £40,000 gross per annum, which
    will be paid quarterly in arrears and will be subject to an annual review
    by the Board. You will also receive fees in respect of Committee membership.
    With effect from 1st April 2003, the fees for such membership are £5,000
    gross per annum for membership of each of the Audit and Remuneration Committees
    and £3,000 gross per annum for membership of the Nomination Committee.
    There is also a fee of £5,000 payable for Chairmanship of any of these
    Committees by a non-executive Director other than where the Deputy Chairman
    chairs such a committee. These fees will also be paid quarterly and will be
    subject to annual review by the Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s auditors.

  3

  

 
Back
  to Contents

8. REVIEW PROCESS

The performance of individual
  Directors and the whole Board and its committees is evaluated annually. If,
  in the interim, there are any matters which cause you concern about your role
  you should discuss them with the Chairman as soon as is appropriate.

9. INSURANCE

The Company has Directors’
  and Officers liability insurance and it is intended to maintain such cover for
  the full term of your appointment. The current indemnity limit is £125,000,000.
  A summary of the policy will be provided to you.

10. INDEPENDENT PROFESSIONAL
  ADVICE

Occasions may arise when
  you consider that you need professional advice in the furtherance of your duties
  as a Director. Circumstances may occur when it will be appropriate for you to
  seek advice from independent advisors at the Company’s expense. A copy
  of the Board’s agreed procedure under which Directors may obtain such
  independent advice was provided to you in your induction pack at the time of
  your appointment.

If you are willing to accept
  these revised terms of appointment relating to your appointment as a non-executive
  Director of mmO2 plc, please confirm your acceptance of these terms
  by signing and returning to me the attached copy of this letter.

Yours sincerely

I
  accept the revised terms of my appointment as a Non-Executive Director of mmO2
  plc. 

Signed:       

 Dated  1.05.03

4

 
Back
  to Contents

 Philip
  Bramwell

  General Counsel and Secretary

  mmO2 plc

  5 Longwalk Road

  Stockley Park East

  Uxbridge

  Middlesex UB11 1TT 

 PERSONAL
   

 Mr P. Myners

  16 Walton Street

  London SW3 IRE

6
  November 2001 

Dear Mr Myners, 

 This letter
  sets out the terms of your appointment as a non-executive director of mmO2 plc
  (the Company).
  The terms
  of this letter shall replace
  the terms of any existing letters relating to such appointment.  

The term of your appointment is initially for a period which expires 3 years after the date the demerger becomes effective, expected to be on 19 November 2001. At the end of that period, your appointment may be continued if you and the mmO2 plc Board agree. From that date, either you or the Board can give the other at least twelve months’ written notice to terminate the appointment at any time. 

You will need periodically to seek re-election at the Annual General Meeting in accordance with the Company’s Articles of Association. 

Conditional upon and from the date of the demerger, you will receive fees for your services as a non-executive director of £30,000 a year, which includes membership of one Board Committee. A further £3,000 a year will be paid for membership of each additional Committee. 

The Company will either pay or reimburse you for all your travelling, hotel and other expenses incurred on the Company’s business. 

You will be expected to attend all meetings of the Board (including awaydays, which may last for more than one day), Committees of which you are a member and Annual and Extraordinary General Meetings. 

 Whilst it is
  difficult to be precise about the amount of time you should expect to spend
  on this work, you should plan on there being around ten Board meetings a year.
  You should allow for some additional meetings in the immediate period as and
  after

	5 Longwalk
      Road	 	t +44 (0)20 8587 5940
	Stockley Park East  Uxbridge  Middlesex
      UB11 1TT	 	f +44 (0)20 8587 7765
	United Kingdom	 	www.O2.com
	mmO2
      plc Registered Office  81 Newgate Street  London EC1A 7AJ  Registered
      in England no. 2604354
	 

Page 3

 

 

 Back to Contents

 mmO2 plc prepares for and completes its
  demerger and the listing of its shares and ADRs on the London Stock Exchange
  and New York Stock Exchange respectively.  

 You will be covered by Directors’ and Officers’
  liability indemnity and insurance.  

 You will be subject to the provisions of the Company’s
  Articles of Association regarding directors and to its Share Dealing Code. You
  also undertake to keep secure any information and material sent to you. 

 mmO2 plc will have, by the time of its
  demerger, a procedure for its directors, in furtherance of their duties, to
  take independent advice if necessary, at the Company’s expense. If you feel
  it necessary to seek such advice, please contact me first.  

 The terms of this letter shall continue to have
  full force and effect during the period between the time that the scheme of
  arrangement becomes effective and the time that the demerger becomes effective
  notwithstanding the fact that you will be required to resign as a director at
  the time that the scheme of arrangement becomes effective and be re-elected
  by the shareholders at the time that the demerger becomes effective. 

 Please confirm your acceptance of these terms by
  signing and returning to me the attached copy of this letter.  

 Yours sincerely  

  

Philip Bramwell

  General Counsel and Secretary

  mmO2 plc  

 To: The Secretary  

 I accept the terms of my appointment as a Non-Executive
  Director of mmO2 plc. 

 
  

 Dated  8/11/01

Page 4

 

 Back to Contents

  

  Mr Andrew Sukawaty

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 31st August 2001. Following on our recent discussions of the
    latest developments in best practice, I am writing to set out for your review
    and consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 19th November 2001, unless
    otherwise terminated earlier by and at the discretion of either party upon
    one month’s written notice. Continuation of your contract of appointment is
    contingent on satisfactory performance and re-election at forthcoming AGMs.
    Non-executive Directors are typically expected to serve two three-year terms,
    although the Board may invite you to serve for an additional period. In addition,
    you have agreed to serve on the Nomination and Remuneration committees with
    effect from 1st April 2003. A copy of the Terms of Reference of the Committees
    have already been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Remuneration Committees and around two meetings of the Nomination Committee
    (as applicable to you), the AGM, one annual Board strategy session lasting
    two days and at least one site visit per year. In addition, you will be expected
    to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will not
    be unreasonably withheld provided (a) the likely time commitment for the other
    role will not affect your ability to give priority to your duties under this
    appointment, and (b) the other role does not give rise to competitive, conflict
    or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered
        Office: Wellington Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

  1

  

  

   
  
  Back to Contents

  
   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs. The
    Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

   2
  

  

  

   
  
  Back to Contents

  
  4. FEES

  You will continue to
    be paid a basic fee for your services as Deputy Chairman (to include Chairmanship
    of the Remuneration Committee) of £100,000 gross per annum, which will
    be paid quaterly in arrears and will be subject to an annual review by the
    Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s auditors.

  3

  

  

   
  
  Back to Contents

  
  8. REVIEW PROCESS

  The performance of individual
    Directors and the whole Board and its committees is evaluated annually. If,
    in the interim, there are any matters which cause you concern about your role
    you should discuss them with the Chairman as soon as is appropriate.

  9. INSURANCE

  The Company has Directors’
    and Officers liability insurance and it is intended to maintain such cover
    for the full term of your appointment. The current indemnity limit is £125,000,000.
    A summary of the policy will be provided to you.

  10. INDEPENDENT
    PROFESSIONAL ADVICE

  Occasions may arise when
    you consider that you need professional advice in the furtherance of your
    duties as a Director. Circumstances may occur when it will be appropriate
    for you to seek advice from independent advisors at the Company’s expense.
    A copy of the Board’s agreed procedure under which Directors may obtain
    such independent advice was provided to you in your induction pack at the
    time of your appointment.

  If you are willing to accept
    these revised terms of appointment relating to your appointment as a non-executive
    Director of mmO2 plc, please confirm your acceptance of these terms by signing
    and returning to me the attached copy of this letter.

  Yours sincerely

  	 	 
		

  4

  

 
  

  Back to Contents

  

  Mr Ian Meakins

  BY HAND

  23rd May 2003

  

  Revised Terms of Appointment
    as a Non-Executive Director

  You were appointed to
    the Board on 20th December 2001. Following on our recent discussions of the
    latest developments in best practice, I am writing to set out for your review
    and consideration the proposed revised terms of your appointment. In the event
    that these are acceptable to you please sign the copy of this letter and return
    it to me. It is agreed that this is a contract for services and is not a contract
    of employment.

  1. APPOINTMENT

  Your appointment was
    for an initial term of three years, commencing on 20th December 2001, unless
    otherwise terminated earlier by and at the discretion of either party upon
    one month’s written notice. Continuation of your contract of appointment
    is contingent on satisfactory performance and re-election at forthcoming AGMs.
    Non-executive Directors are typically expected to serve two three-year terms,
    although the Board may invite you to serve for an additional period. In addition,
    you have agreed to serve on the Audit and Remuneration committees with effect
    from 1st April 2003. A copy of the Terms of Reference of the Committees have
    already been provided to you.

  2. TIME COMMITMENT

  We anticipate that your
    appointment will require a time commitment of around two days per month. This
    will include attendance at around ten board meetings, around four meetings
    of the Audit and Remuneration Committees and around two meetings of the Nomination
    Committee (as applicable to you), the AGM, one annual Board strategy session
    lasting two days and at least one site visit per year. In addition, you will
    be expected to devote appropriate preparation time ahead of each meeting.

  By accepting this appointment,
    you have confirmed that you are able to allocate sufficient time to meet the
    expectations of your role. If, during your appointment, you wish to accept
    any public appointment or further directorship, you will be required to obtain
    prior approval of the Company’s Nomination Committee. Such approval will
    not be unreasonably withheld provided (a) the likely time commitment for the
    other role will not affect your ability to give priority to your duties under
    this appointment, and (b) the other role does not give rise to competitive,
    conflict or reputational issues for the Company.

  	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
        Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc Registered
        Office: Wellington Street  Slough  Berkshire SL1 1YP  Registered
        in England and Wales no. 4190833

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   3. ROLE 
  

   Non-executive Directors
    have the same general legal responsibilities to the Company as any other Director.
    The Board as a whole is collectively responsible for promoting the success
    of the Company by directing and supervising the Company’s affairs. The
    Board: 

  	•	provides entrepreneurial
        leadership of the Company within a framework of prudent and effective
        controls which enable risk to be assessed and managed;
	 	 
	•	sets the Company’s
        strategic aims, ensures that the necessary financial and human resources
        are in place for the Company to meet its objectives, and reviews management
        performance; and
	 	 
	•	sets the Company’s
        values and standards and ensures that its obligations to its shareholders
        and others are understood and met.

   In addition to these requirements
    of all Directors, the role of the non-executive has the following key elements:
  

  	•	Strategy: Non-executive
        Directors should constructively challenge and contribute to the development
        of strategy;
	 	 
	•	Performance:
        Non-executive Directors should scrutinise the performance of management
        in meeting agreed goals and objectives and monitor the reporting of performance;
	 	 
	•	Risk: Non-executive
        Directors should satisfy themselves that financial information is accurate
        and that financial controls and systems of risk management are robust
        and defensible; and
	 	 
	•	People: Non-executive
        Directors are responsible for determining appropriate levels of remuneration
        of executive Directors and have a prime role in appointing and where necessary
        removing senior management and in succession planning.

  	 
	As
        an effective non-executive Director, we would expect you to:
	 	•	Uphold the highest
        ethical standards of integrity and probity;
	 	•	Support executives
        in the leadership of the business whilst monitoring their conduct;
	 	•	Question intelligently,
        debate constructively;
	 	•	Challenge rigorously
        and decide dispassionately;
	 	•	Listen sensitively
        to the views of others, inside and outside the board;
	 	•	Gain the trust and
        respect of other Board members and
	 	•	Promote the highest
        standards of corporate governance

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  4. FEES

  Following our recent
    review of the non-executive Director fee structure with effect from 1st April
    2003, you will be paid a basic fee of £40,000 gross per annum, which
    will be paid quarterly in arrears and will be subject to an annual review
    by the Board. You will also receive fees in respect of Committee membership.
    With effect from 1st April 2003, the fees for such membership are £5,000
    gross per annum for membership of each of the Audit and Remuneration Committees
    and £3,000 gross per annum for membership of the Nomination Committee.
    There is also a fee of £5,000 payable for Chairmanship of any of these
    Committees by a non-executive Director other than where the Deputy Chairman
    chairs such a committee. These fees will also be paid quarterly and will be
    subject to annual review by the Board.

  The Company will either
    pay or reimburse you for all reasonable and properly documented expenses you
    incur in performing the duties of your office. In addition, you will continue
    to have the opportunity to participate in an arrangement whereby a proportion
    of your fees may be invested in shares in the Company.

  5. OUTSIDE INTERESTS

  It is accepted and acknowledged
    that you have business interests other than those of the Company and have
    declared any conflicts that are apparent at present. In the event that you
    become aware of any potential conflicts of interest, these should be disclosed
    to both the Chairman and the Company Secretary immediately.

  The Board of the Company
    has determined you to be independent according to the provision of the Combined
    Code.

  6. CONFIDENTIALITY

  All information acquired
    during your appointment is confidential to the Company and should not be released,
    either during your appointment or following termination (by whatever means),
    to third parties without prior clearance from the Chairman unless required
    by law or by the rules of any stock exchange or regulatory body.

  Your attention is also
    drawn to the requirements under both legislation and regulation as to the
    disclosure of price sensitive information. Consequently you should avoid making
    any statements that might risk a breach of these requirements without prior
    clearance from the Chairman or the Company Secretary.

  7. INDUCTION

  By signing this letter,
    you are confirming that, immediately after your appointment, the Company provided
    you with a comprehensive formal and tailored induction and arranged for site
    visits and meetings with senior and middle management and the Company’s
    auditors.

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  8. REVIEW PROCESS

  The performance of individual
    Directors and the whole Board and its committees is evaluated annually. If,
    in the interim, there are any matters which cause you concern about your role
    you should discuss them with the Chairman as soon as is appropriate.

  9. INSURANCE

  The Company has Directors’
    and Officers liability insurance and it is intended to maintain such cover
    for the full term of your appointment. The current indemnity limit is £125,000,000.
    A summary of the policy will be provided to you.

  10. INDEPENDENT
    PROFESSIONAL ADVICE

  Occasions may arise when
    you consider that you need professional advice in the furtherance of your
    duties as a Director. Circumstances may occur when it will be appropriate
    for you to seek advice from independent advisors at the Company’s expense.
    A copy of the Board’s agreed procedure under which Directors may obtain
    such independent advice was provided to you in your induction pack at the
    time of your appointment.

  If you are willing to accept
    these revised terms of appointment relating to your appointment as a non-executive
    Director of mmO2 plc, please confirm your acceptance of these terms
    by signing and returning to me the attached copy of this letter.

  Yours sincerely

  

  

  I accept the revised terms of my appointment as
    a Non-Executive Director of mmO2 plc. 

  Signed:    

   Dated:  27.06.03

  

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 DATED 13 June 2001

  

	(1)    NEWGATE
        WIRELESS LIMITED

	 	 	 
	(2)    MR
        DAVID VARNEY

	 	 	 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 
	 
	 	 DIRECTOR’S
      SERVICE CONTRACT	 
	 	
	 
	 	 	 
	 	 	 
	 	 	 

Group Legal Services

  British Telecommunications plc

  81 Newgate Street

  London

  EC1A 7AJ  

 Tel : 020 7356 5238

  Fax: 020 7356 6135  

 Ref: 500202/JWF  

	 	 	 	CONTENTS
	 
	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	 

	1.	 	 	Interpretation	1
	 	 	 	 	 
	2.	 		Period	1
	 	 	 	 	 
	3.	 		Duties	2
	 	 	 	 	 
	4.	 		Conflicts	2
	 	 	 	 	 
	5.	 		Salary	2
	 	 	 	 	 
	6.	 		Life Cover	3
	 	 	 	 	 
	7.	 		Holiday	3
	 	 	 	 	 
	8.	 		Car	3
	 	 	 	 	 
	9.	 		Telecommunications Facilities	3
	 	 	 	 	 
	10.	 		Sick Pay and Health Cover	3
	 	 	 	 	 
	11.	 		Medical Examination	3
	 	 	 	 	 
	12.	 		Expenses	3
	 	 	 	 	 
	13.	 		Professional Subscriptions
      and Advice	4
	 	 	 	 	 
	14.	 		Grievance Procedure	4
	 	 	 	 	 
	15.	 		Obligation to Provide
      Work	4
	 	 	 	 	 
	16.	 		Termination	4
	 	 	 	 	 
	17.	 	 	Confidentiality	5
		 	 	 	 
	18.	 		Copyright	5
		 	 	 	 
	19.	 		Restrictions	6
		 	 	 	 
	20.	 		Continuation	6
		 	 	 	 
	21.	 		Variation	6
		 	 	 	 
	22.	 		Notices	6
		 	 	 	 
	23.	 		Successors	6
	 	 
	       Schedule	6

 

  
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 DATED
  13 June 2001

PARTIES

	1)	NEWGATE WIRELESS
      LIMITED (registered number 4190833) whose registered office is at 81
      Newgate Street, London ECIA 7AJ (“Wireless”)
	 	 	 
	2)	MR DAVID VARNEY
      whose address is River Thatch, The Abbotsbrook, Bourne End, Buckinghamshire,
      SL8 5QU (the “Director”)
	 	 	 
	1	Interpretation	 
	 	  	 
	1.1	In this Agreement
      the following expressions shall mean:
	 	 	 
	 	Associated
      Company	any company or venture in
      which Wireless or a subsidiary has a shareholding or equity participation;
	 	 	 
	 	Board	the board of directors of
      Wireless, or a committee of the board;
	 	 	 
	 	Commencement Date	18 June 2001 
	 	 	 
	 	Demerger Date	the date on which British
      Telecommunications plc is demerged from the Wireless Group or vice versa;
	 	 	 
	 	Deputy Chairman	the deputy chairman of Wireless
      or his designated nominee;
	 	 	 
	 	Salary	£500,000 per annum or
      such higher sum as may be determined by the Board. When paragraph 3.2, takes
      effect, the Salary will be reduced to such sum as the Board determines is
      commensurate with the revised time commitment.
	 	 	 
	 	Subsidiary 	any subsidiary which for the
      time being is a subsidiary company (as defined in Section 736 of the Companies
      Act 1985 as amended by the Companies Act 1989) of BT.
	 	 	 
	 	Wireless Group	Wireless and all its subsidiaries
      from time to time;
	 	 	 
	1.2	A reference to
      something being determined, specified or required by Wireless includes a
      determination, specification or requirement from time to time.
	 	 	 
	1.3	This Agreement
      supersedes any previous agreement between Wireless and the Director.
	 	 	 
	2.	Period	 
	 	 	 
	 	Subject to Paragraph
      16, this Agreement will start on the Demerger Date and last for an initial
      period of two years from and including the Commencement Date. It will continue
      until either Wireless or the Director has given to the other previous 

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	 	written notice of not less
      than twelve months, ending at any time at the end of or after the initial
      period. 
	 	 
	3.
      	Duties
        
	 	 
	3.1	The Director will be a member
      of the Board and will be Chairman of Wireless. 
	 	 
	3.2	Not later than either 24 months
      after the Commencement Date or if longer, 18 months after the Demerger Date,
      the Director’s time commitment will be reduced to an average, as determined
      by the Board with the agreement of the Director, of between 2 or 3 days
      a week. 
	 	 
	3.3	The Director will perform such
      duties for the Wireless Group and Associated Companies, at such locations
      in the United Kingdom or overseas, as the Board may specify. 
	 	 
	3.4	The Director will be bound
      by the Wireless share dealing rules, any other rules specified by the Board
      and Wireless’ Articles of Association as altered from time to time.
       
	 	 
	4.	Conflicts
        
	 	 
	4.1	The Director will promote,
      and not do any thing which is harmful or conflicts with, the interests and
      reputation of the Wireless Group. 
	 	 
	4.2	The Director will not without
      obtaining the written consent of the Board:  
	 	 	 
	 	4.2.1 	work for any other person,
      business, organisation or company; or 
	 	 	 
	 	4.2.2	hold any shares or interests
      in any business or company that is likely to compete with the business of
      the Wireless Group. 
	 	 
	4.3	The Director will pay to Wireless
      any fees received from any directorship of another company, unless Wireless
      otherwise agrees.  
	 	 
	5.	Salary 
	 	 
	5.1	The Director will be paid the
      Salary in twelve equal monthly instalments, payable on the last business
      day of each month. 
	 	 
	5.2	The Director will be entitled
      at the election of the Board either to an award of 1.5 times the Salary
      under the Wireless long term incentive plan or an award of 3 times the Salary
      under a Wireless option scheme in accordance with the rules of the plan
      or scheme, such award to be made at the time Wireless makes its first general
      awards under its plan or scheme.
	 	 
	5.3	Subject to Paragraph 5.2, the
      Director may in future years, at the discretion of the Board, participate
      in any scheme established for Wireless employees to acquire shares in Wireless
      subject to the applicable rules of the scheme, but participation under such
      schemes will not form part of this Agreement. 
	 	 

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	6.	Life Cover
	 	 
	 	The Director will be entitled
      to life cover of 4 times the Salary subject to a satisfactory medical.
	 	 
	7.	Holiday
	 	  
	 	The Director will be entitled
      to paid statutory holidays and to 25 days paid holiday (and a pro rata number
      of days when his time commitment is reduced under Paragraph 3.2) in each
      year which accrues rateably each month in arrears.
	 	 
	8.	Car
	 	 
	 	The Director will be provided
      with a car and for business use, a pool driver both as determined by Wireless
      and Wireless will meet the cost of maintenance, insurance, motor vehicle
      tax and petrol.
	 	 
	9.	Telecommunications
      Facilities
	 	 
	 	Wireless will provide mobile
      telecommunications facilities and a free call allowance all as determined
      by Wireless.  
	 	 
	10.	Sick
      Pay and Health Cover 
	 	 
	10.1	The Director will be entitled
      to receive sick pay (inclusive of any statutory sick pay and any benefits
      payable under any permanent health insurance effected by Wireless) of: 
	 	 
	 	one-twelfth of the Salary
      for each month in the first six months, and 
	 	 
	 	one twenty-fourth of the Salary
      for each month in the next six months, 
	 	 
	 	 in total in any period of
      two years, subject to production of medical certificates and to such other
      requirements as Wireless may reasonably request.  
	 	 
	10.2	Wireless will arrange private
      health cover for the Director, the Director’s spouse and children under
      the age of 18 (or 21 if in full-time education) and dental cover for the
      Director and the Director’s spouse, as determined by Wireless. 
	 	 
	11.	Medical
      Examination
	 	 
	 	Wireless may, at its expense,
      require the Director to be examined by a medical practitioner of Wireless’
      choice.
	 	 
	12.	Expenses 
	 	 
	 	Wireless will reimburse authorised
      expenses properly incurred in the course of the Director’s duties against
      receipts or other proof of expenditure,  
	 	 

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	13.	Professional
      Subscriptions and Advice 
	 	 
	13.1	The
      Director will be reimbursed subscriptions to professional bodies where the
      Deputy Chairman considers it to be in the interests of Wireless. 
    
	 	 	 
	13.2	Wireless will
      pay the cost of personal tax and financial planning advice up to a maximum
      of £5,000 (excluding VAT) a year. 
	 	 
	14.	Grievance
      Procedure 
	 	 
	 	If the Director
      has any grievance he may apply in writing to the Deputy Chairman who will
      either propose a solution or refer the matter to the Board. 
	 	 	 
	15.	Obligation
      to Provide Work  
	 	 	 
	15.1	Wireless is under
      no obligation to provide the Director with work and may:
	 	 	 
	 	15.1.1	suspend the Director, if the
      Board considers this appropriate, for up to three months; or 
	 	 	 
	 	15.1.2	if notice to terminate this
      Agreement has been given, vary the Director’s duties or require the
      Director to cease performing all duties during all or part of the notice
      period, in which case Wireless may exclude the Director from the premises
      of the Wireless Group but will continue to pay the Salary in accordance
      with Paragraph 5.1 and provide the benefits under this Agreement until this
      Agreement terminates. 
	 	 	 
	15.2	Where Paragraph
      15.1.2 applies, the Director will at Wireless’ request promptly resign
      in writing as a director of Wireless (and as a member of any committee of
      the Board) and of any company of which Wireless is a shareholder (if necessary,
      in accordance with Paragraph 16.6) but this Agreement will not terminate
      on the Director resigning under this sub-paragraph.
	 	 	 
	16.	Termination
	 	 	 
	16.1	This Agreement
      will terminate immediately, without compensation: 
	 	 	 
	 	16.1.1	on the last day of the month
      in which the Director reaches the age of 60; or 
	 	 	 
	 	16.1.2 	subject to Paragraphs 15.2
      and 16.3, if the Director ceases to be a Director under the provisions of
      Wireless’ Articles of Association as altered from time to time; or
       
	 	 	 
	 	16.1.3	if the Director fails in the
      reasonable opinion of the Board satisfactorily to perform his duties. 
	 	 	 
	16.2	Wireless may terminate
      this Agreement without notice, and without compensation, if the Board believes
      that the Director:
	 	 	 
	 	16.2.1	is incapacitated for any reason
      from performing the Director’s duties for a period of one year or periods
      totalling 365 days in any period of two years; or 
	 	 	 

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	 	16.2.2	is guilty of any dishonesty or disreputable
      conduct; or 
	 	 	 
	 	16.2.3	is guilty of any misconduct or neglect
      of duty after receiving a warning; or 
	 	 	 
	 	16.2.4	is repeatedly failing to follow Wireless’
      policies and procedures. 
	 	 	 
	16.3	If the Director ceases to be
      a director of Wireless because he is not re-elected or deemed to be re-elected
      at a general meeting, Wireless may either:
	 	 	 
	 	16.3.1	terminate this Agreement subject to paying
      compensation in lieu of notice; or 
	 	 	 
	 	16.3.2	require the Director to perform such duties
      for the Wireless Group (other than as a director of Wireless) as the Board
      or the Chairman may specify.
	 	 	 
	16.4	Instead of giving the Director
      the twelve months’ notice referred to in Paragraph 2, Wireless may
      (but shall not be obliged to) terminate this Agreement immediately by:
	 	 	 
	 	16.4.1	paying the Director the Salary In accordance
      with Paragraph 5.1, and 
	 	 	 
	 	16.4.2	continuing or paying the value of the benefits
      referred to in Paragraph 16.4.3 as provided under this Agreement,
	 	 	 
	 	until the earlier of twelve
      months from the notice of termination or the Director obtaining full-time
      employment; 
	 	 	 
	 	16.4.3	the benefits are the pension benefits (including
      life cover), health cover, dental cover, the car currently provided on termination
      together with the cost of maintenance, insurance and motor vehicle tax (but
      not a driver or petrol).
	 	 	 
	16.5	Upon termination
      of this Agreement the Director will at Wireless’ request promptly
      resign in writing as a Director of Wireless (and as a member of any committee
      of the Board) and of any company of which Wireless is a shareholder, and
      will promptly return to Wireless any property of the Wireless Group.
	 	 	 
	16.6	The Secretary
      of Wireless is irrevocably authorised to sign a letter of resignation on
      behalf of the Director if he fails to do so. 
	 	 	 
	17.	Confidentiality
	 	 	 
	17.1	The Director will
      not disclose any confidential information relating to the Wireless Group
      or any third party which may have been obtained in the course of this employment.
	 	 	 
	17.2	This prohibition
      does not apply to confidential information that comes into the public domain
      through no act or neglect of the Director. 
	 	 	 
	18.	Copyright
	 	 	 
	 	The copyright
      in any material arising from this employment is assigned to Wireless. 
      

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	19.	Restrictions
	 	 	 
	19.1	The Director will be bound
      by the provisions of the Schedule to this Agreement.
	 	 	 
	19.2	The 12 month periods referred
      to in the Schedule will be reduced by any time during which the Director
      has been suspended or excluded from the premises of the Wireless Group under
      Paragraph 15.1.
	 	 	 
	20.	Continuation
	 	 	 
	 	Paragraphs 16.5, 16.6 and 17
      to 19 inclusive will continue in force after the termination of this Agreement.
	 	 	 
	21.	 Variation
	 	 	 
	 	Wireless may vary Paragraphs
      7 to 10 inclusive, 13 and 14 but only after first consulting the Director.
      
	 	 	 
	 22.	Notices
	 	 	 
	 	Any notice or document may
      be served on the Director personally or by posting it to his last known
      address, or on Wireless addressed to the Secretary at its registered office,
      and if sent by first class post will be deemed to have been received within
      24 hours of posting.
	 	 	 
	23.	Successors
	 	 	 
	 	The Director irrevocably
      appoints the Secretary of Wireless and each director of Wireless at the
      relevant time to act as his agent for the sole purpose of signing any agreement(s)
      to novate to another company or any Subsidiary of such company (the “Transferee”)
      the outstanding obligations and liabilities of Wireless under this Agreement
      to the Director so that Wireless is released from, and the Transferee assumes
      and is bound to comply with all such obligations and liabilities, and that
      Wireless’ rights under this Agreement are transferred to the Transferee.
	 	 	 
	Signed by the
      parties on the date written on the first page of this Agreement

  

 SCHEDULE

 

	1.	In this Schedule:–
	 	 	 
	 	a)	“Expiry Date” means the date
      of termination or expiry of this Agreement for any reason.

  

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	 	b)	“in any
      capacity” means on the Director’s own behalf or jointly with
      or on behalf of any person, firm or company.
	 	 	 	 
	 	c)	“Confidential
      Information” means confidential information of the Wireless Group
      which would be of value to a competitor or could reasonably enable a competitor
      to obtain an unfair advantage in trading in competition with the Wireless
      Group.
	 	 	 	 
	 	d)	“Business”
      means the business of the Wireless Group in providing telecommunication
      services (as defined in Section 4(3) of the Telecommunications Act 1984)
      in the United Kingdom or any other country of the European Union in which
      the Wireless Group conducts business.
	 	 	 	 
	2.	Since the Director
      is likely to obtain in the course of his employment with the Wireless Group,
      trade secrets and Confidential Information and, personal knowledge of customers
      and employees of the Wireless Group, the Director agrees with Wireless that
      he will be bound by the following covenants for 12 months immediately following
      the Expiry Date:
	 	 	 	 
	 	(i)	The Director will
      not in any capacity solicit or endeavour to entice away or offer engagement
      or employment to, or engage or employ or procure any Designated Person,
      who was an employee of Wireless at the Expiry Date, to be engaged or employed
      in any business which competes or is about to compete with the Business.
	 	 	 	 
	 	 	A Designated Person is a director
      or senior employee of Wireless with whom the Director has had personal dealings
      in the 12. months immediately preceding the Expiry
      Date and who had at the Expiry Date knowledge of trade secrets or
      Confidential Information or knowledge of and connections or influence with
      customers of Wireless.
	 	 	 	 
	 	(ii)	The Director will
      not in any capacity for the purposes of any business which competes or is
      about to compete with the Business, canvass, solicit, deal with or accept
      business or custom from any person, firm or company:
	 	 	 	 
	 	 	(a)	that was a customer of Wireless during
      the 12 months immediately preceding the Expiry Date (“the 12 month
      period”); and
	 	 	 	 
	 	 	(b)	with whom or with which the Director personally
      had had dealings during the 12 month period in the course of his employment.
	 	 	 	 
	 	(iii)	The Director will not in any
      capacity carry on, be engaged or employed or be concerned or interested
      in any business, or take steps to set up, promote or facilitate the establishment
      of any business which competes or is about to compete with the Business.
	 	 	 	 
	 	For the purposes
      of this Clause 2, any reference to “engagement or employment”
      means engagement or employment whether under a contract or otherwise and
      if under a contract includes a contract of employment, or a contract for
      services or any other form of contract and the terms “engage”
      and “employ” and their derivatives shall be construed in accordance
      with this definition.
	 	 	 	 
	3.	Clause 2 shall
      apply mutatis mutandis in relation to Subsidiaries as if the provisions
      in sub-clauses (i) - (iii) inclusive and the definitions were repeated with

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	 	the substitution of the words
      “any of the Company’s Subsidiaries” for Wireless, and the Company contracts
      with the Director in this sub-clause on its own behalf and on behalf of
      each of its Subsidiaries.
	 	 
	4.	For the avoidance of doubt
      it is expressly agreed that each of the sub-clauses (i) - (iii) in Clause
      2 is intended to contain separate and severable restraints and if any one
      or more of such sub-clauses are for any reason unenforceable in whole or
      in part, then the other sub-clauses shall nonetheless be and remain effective.
	 	 
	5.	The Director acknowledges
      that the restraints contained in this Schedule and each of them are necessary
      to protect the legitimate interests of the Wireless Group, are no wider
      than reasonably necessary for that purpose, and are reasonable as between
      the parties to this Agreement.
	 	 
	6.	If any of the restrictions
      contained in this Schedule shall be adjudged to be void or ineffective or
      unenforceable for whatever reason but would be adjudged to be valid and
      effective if part of the wording were deleted or the periods reduced or
      the area reduced in scope, they shall apply with such modifications
      as may be necessary to make them valid and effective. 

  

	SIGNED BY	)	
	COLIN GREEN	)
	 	 
	 for and on behalf
        of 
	)	 
	NEWGATE WIRELESS
      LIMITED	)	 
	 	 	 
	SIGNED BY DAVID VARNEY	)	
	 	)

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 1
  April 2003 

 

 

MMO2
  plc

 

 

KENT
  THEXTON 

 

 SERVICE
  AGREEMENT 

  

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	THIS
      AGREEMENT is made on 1 April 2003
 BETWEEN
	 	 
	(1)	MMO2
      plc, a company which has its registered office at Wellington Street,
      Slough, Berkshire SL1 1YP (the Company);
      and
	 	 
	(2)	KENT
      THEXTON of 11 Oak Dene, Beaconsfield, Buckinghamshire HP9 2BZ (the
      Executive)
	 	 
	IT
      IS AGREED as
      follows:
	 	 
	 DEFINITIONS
	 	 
	1.	In
      this Agreement the following expressions shall have the following meanings:
	 	 
	Board
      means
      the board of directors of the Company or a duly constituted committee of
      the board of directors;
	 	 
	CEO
      means
      the Chief Executive Officer of the Company or his designated nominee;
	 	 
	Chairman
      means
      the Chairman of the Board;
	 	 
	Effective
      Date means
      subject to the approval of the Company’s Nomination Committee 1 April 2003;
	 	 
	Employment
      means
      the Executive’s employment in accordance with the terms and conditions of
      this Agreement;
	 	 
	Group
      Company means
      the Company, any holding company of the Company and any subsidiary of the
      Company or of any such holding company (with holding company and subsidiary
      having the meanings given to them by section 736 Companies Act 1985);
	 	 
	Recognised
      Investment Exchange has
      the meaning given to it by section 207 of the Financial Services Act 1986;
      and
	 	 
	Remuneration
      Committee means
      the Remuneration Committee of the Board.
	 	 
	JOB
      DESCRIPTION AND DUTIES

1.1     The
  Executive is employed by the Company as Chief Marketing and Data Officer and
  is appointed to the Board with effect from the Effective Date. The Executive’s
  period of continuous employment for statutory purposes began on 22 June 1988.

1.2     The
  Executive will be required to devote his full time and attention during normal
  working hours to the proper performance of his duties, together with such additional
  hours as may be reasonably required.

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 1.3     The Executive shall
  comply with all directions lawfully and properly given by the Board and shall
  diligently perform all such duties and exercise all such powers as are lawfully
  and properly assigned to him from time to time by the Board. The Executive shall
  be a director of the Company and his duties as a director of the Company or
  any other Group Company will be subject to the Articles of Association of the
  relevant company for the time being.  

 1.4     The Executive will
  perform such duties for the Company at such locations in the United Kingdom
  or overseas as the CEO may specify. The Executive’s initial place of work
  will be 1, The Broadway, Hammersmith, London but the Company reserves the right
  to ask the Executive to relocate to any location as may be reasonably necessary.
  In the event that the Executive’s normal place of work is relocated more
  than 30 miles from 1, The Broadway, Hammersmith, London (so that it may be necessary
  for him to move house), the cost of the Executive’s relocation will be
  paid by the Company.  

 1.4     The Executive may
  be required to travel on the business of the Company and other Group Companies
  anywhere within the United Kingdom or overseas.  

 BASIC ANNUAL SALARY  

 2.1     With effect from
  the Effective Date the Executive’s basic annual salary is £330,000
  (less such deductions as the Company is required to make), payable monthly in
  arrears. Basic salary will be inclusive of all fees and other remuneration to
  which the Executive may be or become entitled as an officer of the Company or
  of any other Group Company.  

 2.2     The Executive’s
  salary will be reviewed annually during the Employment, with the first review
  to take place on 1 June 2004. The Company is under no obligation to increase
  the Executive’s salary following a salary review but will not decrease
  it.  

 BONUS  

 3.     The Executive will
  be eligible to participate in the Company’s annual bonus scheme, the details
  of which will be determined by the Remuneration Committee. The bonus scheme
  will reward the Executive for his performance and the performance of the Company
  in the previous year as determined by the Remuneration Committee, by providing
  for an annual cash bonus of up to 120% of the Executive’s basic annual
  salary, with 80% of basic annual salary being paid for on target performance.
   

 SHARE SCHEMES  

 4.1     At the next appropriate
  date, the Executive will be eligible to be considered for an award
  under the MMO2 Executive Share Portfolio. The next award for eligible
  executives will be June/July 2003. Any award will
  be subject to the rules of the MMO2
  Executive Share Portfolio and to the approval of the Remuneration  Committee.
   

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 PENSION AND LIFE ASSURANCE  

 5.1     The Company will
  pay to the Executive each year an amount equal to 20% of the Executive’s
  annual salary from time to time (less any statutory deductions) to enable him
  to make contributions into a pension scheme.  

 5.2     The Company will
  during the Employment pay for the benefit of the Executive subscriptions to
  the Company’s life assurance arrangements to provide the Executive with
  cover of 4 x basic salary.  

 HEALTHCARE AND PERMANENT HEALTH INSURANCE 

 6.1     The Executive and
  his wife and any dependent children under the age of 18 (or 21 if still in full-time
  education) will be eligible for membership of the Company’s Healthcare
  Scheme subject to the terms of the Scheme as amended from time to time. 

 6.2     The Executive will
  be eligible to participate in the Company’s permanent health insurance
  scheme subject to the consent of the provider and the rules of the scheme. 

 6.3     The Company may
  at its expense require the Executive to be examined by a medical practitioner
  of the Company’s choice. The persons within the Company to whom a copy
  of any medical report may be made available shall be determined on a case by
  case basis. The Company shall procure that such persons will treat the medical
  report with the strictest confidence.  

 COMPANY CAR  

 7.     The Executive will
  be eligible for a company car or the cash in lieu alternative (Cash Alternative)
  of £15,000 (less appropriate deductions) in line with the Company’s
  policy. Neither the car nor the Cash Alternative will constitute pensionable
  earnings. Additionally, where the company car is taken, the Executive is eligible
  to receive a fuel card for all private and business fuel.  

 PROFESSIONAL SUBSCRIPTIONS  

 8.     The Executive will
  be reimbursed subscriptions to professional bodies where the  CEO
  considers it to be in the Company’s interests.  

 TAX/FINANCIAL PLANNING  

 9.     The Company will
  meet the cost of personal tax and financial planning advice for the Executive
  up to a value of £5,000 excluding VAT per annum for each financial year,
  save that for the financial year 2003/2004 the Company will meet the cost of
  such advice, up to a value of £6,000 excluding VAT.  

 EXPENSES/ACCOMMODATION ALLOWANCE 

 10.1     The Company will
  reimburse authorised expenses properly incurred in the course of the Executive’s
  duties against receipts or other proof of expenditure.  

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 10.2     The Company will
  continue to pay the Executive an accommodation allowance of £500 per week
  gross until 31 July 2003 when entitlement to accommodation allowance will cease.
   

 HOLIDAY  

 11.1     The Executive
  is entitled to paid English bank and public holidays and to 30 days paid holiday
  in each year (1 April to 31 March) or on a pro-rata basis as appropriate. 

 11.2     Any outstanding
  leave must be taken during the Executive’s notice period and no payment
  will be made for any unused annual leave as at the termination of the Employment
  (unless the CEO has not allowed outstanding holiday to be taken during the Executive’s
  notice period). If the Executive has taken more working days’ paid holiday
  than his accrued entitlement, the Company is permitted to deduct the appropriate
  amount from the Executive’s final salary instalment (which deduction shall
  be made on the basis that each day of paid holiday is equivalent to 1/260 of
  basic annual salary).  

 SICKNESS AND OTHER INCAPACITY  

 12.     Subject to the
  Executive’s compliance with the Company’s policy on notification
  and certification of periods of absence from work, the Executive will, if absent
  from work through sickness, injury or other incapacity, be entitled to receive
  sick pay of:  

	(a)	one-twelfth of basic annual salary
      for each month in the first six months; and 
	 	 
	(b)	one twenty-fourth of basic annual
      salary for each month in the next six months 

 in total in any period of two years. Such payment
  will be inclusive of any entitlement to statutory sick pay and any benefits
  payable under any Company permanent health insurance scheme. Thereafter any
  entitlement to sick pay will be subject to the terms of the Company’s
  permanent health insurance arrangements.  

 OTHER INTERESTS  

 13.1     The Executive
  will promote, and not do anything which is harmful or conflicts with, the interests
  and reputation of the Company or any Group Company.  

 13.2     During the Executive’s
  employment with the Company, the Executive will not without obtaining the written
  consent of the CEO of the Company:  

	(a)	work for any other person, business
      organisation or company; or 
	 	 
	(b)	 hold more than 3% of the issued
      share capital in any business or company that is or is likely to complete
      with the business of the Company.

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 SHARE DEALING AND OTHER CODES OF CONDUCT
   

 14.     The Executive will
  comply with all codes of conduct adopted from time to time by the Board and
  with all applicable rules and regulations of the UK Listing Authority and any
  other relevant regulatory bodies, including the Model Code on dealings in securities.
   

 DISCIPLINARY AND GRIEVANCE PROCEDURE 

 15.      There is no formal
  disciplinary or grievance procedure which applies to the Executive. If the Executive
  has any grievance he may apply in writing to the CEO who personally will propose
  a solution or refer the matter to the Chairman.  

 SUSPENSION  

	16.1	The Company may:
	 	 	 	 
	16.1.1	suspend the Executive if it considers
      this appropriate for up to 3 months;
	 	 
	16.1.2	if notice to terminate the Executive’s
      employment has been given by either the Executive or the Company, require
      the Executive to:
	 	 
	 	 	(i)	undertake different duties or cease performing
      all duties for up to six months of the notice period; and/or
	 	 	 	 
	 	 	(ii)	cease attending any premises of the Company
      or any Group Company for up to six months of the notice period; and/or
	 	 	 	 
	 	 	(iii)	resign with immediate effect from any offices
      the Executive holds in the Company or any Group Company (and any related
      trusteeships); and/or
	 	 	 	 
	 	 	(iv)	refrain from any business contact with any customers,
      clients or employees of the Company or any Group Company for up to six months
      of the notice period; and/or
	 	 	 	 
	 	 	(v)	take any holiday which has accrued under clause
      11.

16.2      The provisions
  of clause 13 will remain in full force and effect during any period of suspension
  under clause 16. Any period of suspension under clause 16 will be on full basic
  salary and benefits. The duration of any period of suspension under clause 16.1.2
  will count towards the period for which the restriction in clauses 2(i) –
  (iii) of the Schedule to this letter apply (as stated in clause 8 of the Schedule).
   

 16.3      The Company may
  also suspend the Executive during any period in which the Company is conducting
  a disciplinary
  investigation into alleged acts or defaults by the Executive. The provisions
  of clause 13 will remain in full force and effect during any period of suspension
  under this clause 16.3. Such suspension will be on full basic salary and benefits
  (save that the Executive will not be entitled to earn or be paid any bonus during
  any period of suspension unless the allegations are unfounded).  

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 TERMINATION  

 17.1     The Company may
  terminate the Executive’s Employment at any time by giving to the Executive
  12 months’ written notice. The Executive may terminate the Employment with the
  Company at any time by giving the Company 6 months’ written notice. This Agreement
  will terminate immediately without notice when the Executive reaches age 60.
   

 17.2     Notwithstanding
  clause 17.1 the Company may terminate this contract without notice and without
  compensation if it has reason to believe that the Executive:  

	(a)	is guilty of any dishonesty or
      disreputable conduct which is likely substantially to affect the Company’s
      reputation; or
	 	 
	(b)	is guilty of any gross or serious
      misconduct or serious neglect of duty after receiving a warning; or
	 	 
	(c)	has committed a serious breach
      of any of the Company’s policies or procedures which have been notified
      to and which apply to the Executive.

 Any delay by the Company in exercising its rights
  under this clause shall not constitute a waiver of those rights.  

 17.3     The Company may
  also terminate the Employment by giving 12 months’ notice to the Executive if
  the Executive is unable (whether due to illness or otherwise) properly and effectively
  to perform his duties under this Agreement for a period or periods totalling
  (in aggregate) 9 months in any consecutive period of 12 months, provided that
  the Company will not terminate the Employment if to do so would have the effect
  of causing the Executive to forfeit any entitlement to benefit under the Company’s
  permanent health insurance arrangements. In these circumstances, the Company
  may take such steps as it considers appropriate in relation to the Employment
  including, without limitation, discontinuing salary and all other rights and
  benefits provided under this Agreement (apart from permanent health benefits).
   

 17.4     The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to him that it is exercising its discretion under this clause
  17.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination
  Date). In such a case the Company shall be obliged
  to pay to the Executive a sum (the Payment in Lieu
  of Notice)
  equal to:  

	(a)	the basic annual salary which the
      Executive would have been entitled to receive under this Agreement during
      the notice period referred to in clause 17.1 if notice had been given on
      the Termination Date (or, if notice has already been given, during the remainder
      of the notice period);
	 	 
	(b)	the cost of contributions which
      would have been made by the Company towards the cost of retirement provision
      for the Executive during that period;
	 	 
	(c)	the value of any bonus payment
      which would have been made under clause 3. The payment made in respect of
      bonus under this clause 17.4 shall be not less

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	 	than the amount which is equal to the bonus
      payment (if any) received by the Executive in respect of the bonus year
      preceding the Termination Date. Where the Payment in Lieu of Notice is in
      respect of a period which is less than one year, any payment in respect
      of bonus shall be pro-rated as applicable; and
	 	 
	(d)	the cost of the other contractual benefits which
      the Executive would have been entitled to receive during that period. Alternatively
      the Company may, if it so chooses, continue to provide those contractual
      benefits during that period.

17.5     The Payment in
  Lieu of Notice shall be subject to such deductions as the Company may be required
  to make and shall be in full and final settlement of all claims the Executive
  may have against the Company or any Group Company (whether known or unknown)
  arising out of or in connection with the termination of the Employment and the
  Executive’s directorship of the Company or any Group Company. The Payment in
  Lieu of Notice may, at the Company’s discretion, be paid as a lump sum (within
  10 working days of the last day of the Employment) or in equal monthly instalments
  from the Termination Date until the date which is twelve months after the Termination
  Date (or if notice had already been served before the Termination Date, the
  remainder of the notice period) or if sooner, the date on which the Executive
  commences alternative employment. Any entitlement which the Executive has or
  may have under any share related incentive scheme shall be determined in accordance
  with the rules of such scheme. For the avoidance of doubt, (1) the Company is
  only to be taken as exercising the right given by this clause, and accordingly
  to be liable for the Payment in Lieu of Notice, if it gives the written notice
  referred to above explicitly invoking this clause; and (2) any delay or error
  in the Payment in Lieu of Notice shall not affect the lawfulness of a termination
  under this clause.  

 17.6     Upon termination
  of the Employment the Executive will at the Company’s request promptly resign
  in writing as a director of the Company and any Group Company and will promptly
  return to the Company any property of the Company and any Group Company. The
  Secretary of the Company is irrevocably authorised to sign letters of resignation
  on the Executive’s behalf if he fails to do so.  

 LIQUIDATED DAMAGES  

 18.1     If the Employment
  is terminated otherwise than in accordance with the terms of this Agreement
  (including, without limitation, if the Executive is constructively dismissed)
  the Company will pay to the Executive a liquidated sum calculated by reference
  to the Payment in Lieu of Notice set out in clause 17.4 (or clause 19.4 as appropriate)
  and paid subject to the terms of clause 17.5. The liquidated sum will be subject
  to such deductions as the Company may be required to make and will be in full
  and final settlement of any claims which the Executive has or may have against
  the company or any other Group Company arising out
  of or in connection with the Executive’s employment or its termination.
  In consideration for this payment the Executive agrees to remain bound by the
  post-termination restrictions in the Schedule to this Agreement.  

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18.2     For
  the purpose of clause 18.1 constructive dismissal shall include (but not be
  limited to):  

	(i) 	the
      Executive’s removal from the office of director of the Company (other than
      by retirement by rotation pursuant to the Articles of Association of the
      Company) or from the position of Chief Marketing and Data Officer of the
      Company during the Employment without his consent on grounds insufficient
      to justify such removal; or
	 	 
	(ii)
      	the
      alteration by the Company without the Executive’s consent of his duties
      and responsibilities so that the Executive’s overall status in the Company
      is materially reduced; or 
	 	 
	(iii)	the
      relocation by the Company without the Executive’s consent of his normal
      place of work to a location which is more than 30 miles from 1, The Broadway,
      Hammersmith, London.

 CHANGE OF CONTROL 

 19.1     For
  the purposes of this clause 19.1:  

 Control
  means
  the power of any person whether alone or together with any person acting in
  concert with him to control the composition of the board of directors of the
  Company or otherwise to secure whether by means of the holding of shares or
  the possession of voting power in relation to the Company or any other body
  corporate or by virtue of any powers conferred by the articles of association
  or any other document or agreement regulating the Company or any other body
  corporate that the affairs of the Company are conducted with the wishes of that
  person; and  

 Change
  of Control means:
  (i) the disposal of all or substantially all of the Company’s business; or (ii)
  the acquisition by any person whether alone or together with any person acting
  in concert with him of Control of the Company; but shall not mean an acquisition
  of Control of the Company by another company the shares of which, immediately
  following such an acquisition, are all held by the holders of the shares of
  the Company immediately prior to such an acquisition in materially the same
  proportion as they held shares in the Company immediately prior to such an acquisition.
   

19.2     If a Change of Control occurs the period of notice which the Company or the Executive is required to give to the other to terminate the employment in accordance with clause 17.1 will be unaffected and will remain as 12 months and 6 months respectively. 

 19.3     For the period
  of 12 months following a Change of Control clause 17.4 shall be replaced by
  clause 19.4 unless clause 17.4 has already been operated prior to the Change
  of Control.  

 19.4     The
  Company may, in its sole discretion, also terminate the Executive’s employment
  by giving written notice to the Executive that it is exercising its discretion
  under this clause 19.4 to terminate the Employment with effect from such 

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 date as is specified in the notice (the
  Termination Date). In such a case the Company
  shall be obliged within 10 working days after the Termination Date to pay to
  the Executive a sum (the Payment in Lieu of Notice)
  equal to:  

	(a) 	the basic annual salary which the
      Executive would have been entitled to receive under the terms of this Agreement
      during the notice period referred to in clause 17.1 if notice had been given
      on the Termination Date (or, if notice has already been given, during the
      remainder of the notice period);
	 	 
	(b) 	the
      cost of contributions which would have been made by the Company towards
      the cost of retirement provision for the Executive during that period. Alternatively,
      the Company may, if it so chooses, make the contributions directly to the
      Executive’s pension arrangements to provide the Executive with retirement
      benefits in respect of the unexpired portion of the Executive’s notice period
      (or part thereof);
	 	 
	(c) 	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively, the Company may, if it so chooses, continue
      to provide those contractual benefits during that period. Alternatively, the Company may, if it so chooses, continue to provide those contractual benefits during that period; and
	 	 
	(d) 	the
      value of the Executive’s bonus (which shall be deemed to be the maximum
      achievable in respect of the financial year in which the Change of Control
      occurs). Where the Payment in Lieu of Notice is in respect of a
      period
      which is less than one year, any payment in respect of bonus shall be pro-rated
      as applicable based on the achievement of maximum bonus; and
	 	 
	(e)	the value of share scheme rights,
      computed in accordance with clause 19.5.

 19.5     For the purposes
  of clause 19.4(e), the value of share scheme rights shall be determined as A
  minus B where:
   

	A	is the aggregate
      value, on the date of the Change of Control, of the Executive’s outstanding
      share awards and share options, without regard to any performance condition
      to which the awards and options are or may be subject; and  
	 	 
	B	is the aggregate
      value, on the date of the Change of Control, of those share awards and share
      options which were exercised or exercisable by the Executive between the
      date of the Change of Control and the Termination Date (as reduced by the
      operation of any applicable performance condition).

For
  the purposes of this clause 19.5, the Executive may be required to waive any
  share awards or share options which, in accordance with their terms, may vest
  or become exercisable after the Termination Date.  

 19.6     The Payment in
  Lieu of Notice shall be subject to such deductions as the Company may be required
  to make and shall be in full and final settlement of all claims the Executive
  may have against the Company or any Group Company (whether known or unknown)
  arising out of or in connection with the termination of 

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the Employment and the Executive’s directorship of
  the Company or any Group Company. 

19.7     For the avoidance
  of doubt, (1) the Company is only to be taken as exercising the right given
  by this clause, and accordingly to be liable for the Payment in Lieu of Notice,
  if it gives the written notice referred to above explicitly invoking this clause;
  and (2) any delay or error in the Payment in Lieu of Notice shall not affect
  the lawfulness of a termination under this clause.

 MITIGATION
   

 20.     For
  the purposes of paragraph 19 above, and not in any other circumstances, the
  payments set out (being payments made in accordance with this Agreement) will
  not be subject to mitigation, and will be paid irrespective of whether the Executive
  obtains alternative employment within the applicable notice period. 

 INTELLECTUAL
  PROPERTY  

 21.     It
  shall be part of the Executive’s normal duties (whether or not during normal
  working hours and whether or not at the Executive’s normal place of work) at
  all times to consider in what manner and by what new methods or devices the
  products, services, processes, equipment or systems of the Company with which
  he is concerned or for which he is responsible might be improved and to originate
  designs (whether registrable or not) or patentable work or other work in which
  copyright may subsist. Accordingly:  

	(a)	the
      Executive shall forthwith disclose full details of the same in confidence
      to the Company and shall regard himself in relation thereto as a trustee
      for the Company;
	 	 
	(b)	all
      intellectual property rights in such designs or work shall vest absolutely
      in the Company which shall be entitled, so far as the law permits, to the
      exclusive use thereof;
	 	 
	(c)	notwithstanding
      (b) above, the Executive shall at any time assign to the Company the copyright
      (by way of assignment of copyright) and other intellectual property rights,
      if any, in respect of all works written originated conceived or made by
      the Executive (except only those works written originated conceived or made
      by the Executive wholly outside his normal working hours hereunder and wholly
      unconnected with his service hereunder) during the continuance of the Employment;
      and
	 	 
	(d)	the
      Executive agrees and undertakes that at any time during or after the termination
      of the Employment he will at the Company’s expense execute such deeds
      or documents and do all such acts and
      things as the Company may deem necessary or desirable to substantiate its
      rights in respect of the matters referred to above including for the purpose
      of obtaining letters patent or other privileges in all such countries as
      the Company may require.

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 RESTRICTIONS AND CONFIDENTIALITY 
  

 22.     The Executive will
  be bound by the provisions of the covenants set out in the Schedule to this
  Agreement.  

 CONTINUATION  

 23.     Paragraphs 17.6,
  21 and 22 will continue in full force and effect after the termination of the
  Executive’s employment howsoever caused.  

 NOTICES  

 24.     Any notice or document
  may be served on the Executive personally or by posting it to his last known
  address or on the Company addressed to the Secretary at its registered office
  and if sent by first class post will be deemed to have been received with 24
  hours of posting. 

 THE CONTRACT (RIGHTS OF THIRD PARTIES)
  ACT  

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

 VARIATION  

 26.     The Company may
  vary paragraphs 5, 6, 7, 8, 11 and 13 but only after the Company has first consulted
  with the Executive and the Executive agrees to such variation.  

 MISCELLANEOUS  

 27.1     A reference to
  something being determined, specified or required by the Company includes a
  determination, specification or requirement from time to time.  

 27.2     With effect from
  the Effective Date, this Agreement supersedes any previous agreement between
  the Company or any Group Company and the Executive, whether oral or in writing.

 27.3     This Agreement
  is governed by and shall be construed in accordance with the laws of England.
  The parties to this Agreement submit to the non-exclusive jurisdiction of the
  English courts.  

	 SIGNED
        as a DEED and

        DELIVERED by

        KENT
        THEXTON

        in
        the presence of:  
	
      )

        )

        )

        )

        
	
	 	 
	 	 
	SIGNED
      for and on behalf of

       MM02 plc 	)

      )

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 THE SCHEDULE 

	1.

      	 In this Schedule:
	 	 	 	 
	 	 	(a)

      	effective date of termination
      has the meaning given to it by Section 97(1) of the Employment Rights
      Act 1996;
	 	 	 	 
	 	 	(b)

      	in any capacity means
      on the Executive’s own behalf or jointly with or on behalf of any person,
      firm or company;
	 	 	 	 
	 	 	(c)

      	Confidential Information
      means confidential information of any Group Company which would
      be of value to a competitor or could reasonably enable a competitor to obtain
      an unfair advantage in trading in competition with any Group Company. For
      the purposes of this Schedule it includes but is not limited to business
      and strategic plans, marketing, financial, sales and customer information;
	 	 	 	 
	 	 	(d)

      	Business means
      the business of the provision of mobile telephony and Internet services
      (including but not limited to the provision of mobile data services).
	 	 	 	 
	2.

        	Since the Executive
      will obtain in the course of the Employment trade secrets and Confidential
      Information and personal knowledge of customers and employees of the Company
      and other Group Companies, the Executive agrees to be bound by the following
      covenants:
	 	 	 	 
	(i)	For 12 months immediately
      following the effective date of termination of the Employment (howsoever
      arising and whether or not lawful) the Executive will not in any capacity
      carry on, be engaged or employed or be concerned or interested in any business,
      or take steps to set up, promote or facilitate the establishment of any
      business which competes or is about to compete with the parts of the Business
      with which the Executive has been actively involved at any time during the
      period of 24 months prior to the effective date of termination of the Employment,
      within: 
	 	 	 	 
	 	 	(a)	the United Kingdom;
	 	 	 	 
	 	 	(b)	Germany, Netherlands and Ireland;
      or
	 	 	 	 
	 	 	(c)

      	any other country to which the
      Company expands its Business and in respect of which the Executive had personal
      and material dealings.
	 	 	 	 
	 	 save that nothing
      in this paragraph 2(i) shall restrict or prevent the Executive from being
      engaged, employed, concerned or interested in any business (whether or not
      in competition with the, parts of
      the Business with which the Executive has been actively
      involved) at any time in the 24 months prior to the effective date of termination
      which has operations in the countries referred to in paragraphs (a) to (c)
      above provided that the Executive’s sole or main executive responsibilities
      relate to operations within North America or any part thereof. 
	 	 
	 	 

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	(ii) 	For 12 months immediately
      following the effective date of termination of the Employment the Executive
      will not in any capacity for the purposes of any business which competes
      or is about to compete with the Business canvass, solicit, deal with or
      accept business or custom from any person, firm or company:
	 	 	 	 
	 	  	(a)	that was a business customer of the Company
      or any Group Company at any time during the 12 months immediately preceding
      the effective date of termination of the Employment (the 12 month
      Period); and
	 	 	 	 
	 	 	 (b)
	with whom or with which the Executive in the
      course of the Employment personally had material dealings during the 12
      month Period.
	 	 
	(iii)	For 12 months immediately
      following the effective date of termination of the Employment the Executive
      will not seek to entice away or offer engagement or employment to any designated
      employee to work for any business which competes or is about to compete
      with the Business. A designated employee is (i) an employee who is employed
      wholly or mainly as a manager or in a position above management; or (ii)
      an employee of the Company or any Group Company who has knowledge of trade
      secrets or Confidential Information or knowledge of and connections with
      or influence over customers of the Company or any Group Company; and (in
      both cases) with whom the Executive had personal and material dealings during
      the 12 months immediately preceding the effective date of termination of
      the Employment. 
	 	 
	(iv)	Any reference to “engagement
      or employment” in this clause means engagement or employment whether
      under a contract or otherwise and if under a contract includes a contract
      of employment, or a contract for services or any other form of contract
      and the terms “engage” and “employ” and their derivatives
      shall be construed in accordance with this definition.
	 	 
	3.	The Executive will,
      at the request and expense of the Company, enter into a separate agreement
      with any Group Company that the Company may reasonably require under the
      terms of which the Executive will agree to be bound by restrictions
      corresponding to those contained in clause 2(i)-(iii) inclusive (or such
      as may be appropriate in the circumstances).
	 	 
	4.	The Executive acknowledges
      that the restraints contained in this Schedule and each of them are necessary
      to protect the legitimate interests of the Company and the Group Companies,
      and that the same are no wider than reasonably necessary for that purpose,
      and are reasonable as between the parties to this Agreement.
	 	 
	5.	If any of the restrictions
      contained in this Schedule shall be adjudged to be void or ineffective or
      unenforceable for whatever reason but would be adjudged to be valid and
      effective if part of the wording were deleted or the periods reduced or
      the area reduced in scope, they shall apply with such modifications as may
      be necessary to make them valid and effective.

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	6.	For the avoidance of doubt it is expressly agreed
      that each of the sub-clauses (i)-(iii) in Clause 2 is intended to contain
      separate and severable restraints and if any one or more of such sub-clauses
      are for any reason unenforceable in whole or in part, then the other sub-clauses
      shall nonetheless be and remain effective.
	 	 
	7.	The Executive agrees with the Company on its
      own behalf and on behalf of each Group Company that he will not (except
      as ordered by a court or regulatory body) communicate or divulge (or permit
      communication or divulgence) to any person or company or in any way use
      for his own purposes or for any purpose other than that of the Company or
      any Group Company, any trade secrets or Confidential Information of whatsoever
      nature acquired by the Executive during the Employment, whether relating
      to the business or affairs of any member of the Company or any Group Company
      or to persons with whom any member of the Company or any Group Company has
      dealings. This restriction shall apply both during the Employment with the
      Company and after its cessation but shall cease to apply to any information
      which is in or comes into the public domain otherwise than by reason of
      any default by the Executive.
	 	 
	8.	The period during which the restrictions referred
      to in clauses 2(i)-(iii) inclusive shall apply following the effective date
      of termination shall be reduced by the amount of time during which, if at
      all, the Company suspends the Executive under the provisions of clause 16.3.
	 	 
	9.	The Executive agrees that if, during either
      the Employment with the Company or the period of the restrictions set out
      in 2(i)-(iii) inclusive he receives an offer of employment or engagement,
      the Executive will provide a copy of this Schedule to the offeror as soon
      as is reasonably practicable after receiving the offer and if he accepts
      the offer he will inform the Company immediately.

 

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 1 April 2003 

 

 

 

 

 MMO2 plc

 

 

DAVID McGLADE

 

 

	

	 
	SERVICE AGREEMENT
      
	 
	

  
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 THIS AGREEMENT is made on 1 April 2003

 BETWEEN  

	(1)	MMO2 plc, a company
      which has its registered office at Wellington Street, Slough, Berkshire
      SLI 1YP (the Company);
      and 
	 	 
	(2)	DAVID McGLADE of The Penthouse,
      Athena Court, 2 Finchley Road, London, NW8 6DP (the Executive)
      

 IT IS
  AGREED as
  follows:  

 DEFINITIONS 
  

 1.     In
  this Agreement the following expressions shall have the following meanings:
   

 Board means
  the board of directors of the Company or a duly constituted committee of the
  board of directors;  

 CEO means
  the Chief Executive Officer of the Company or his designated nominee; 

 Chairman means
  the Chairman of the Board;  

 Effective Date means
  subject to the approval of the Company’s Nomination Committee 1 April 2003;
   

 Employment means
  the Executive’s employment in accordance with the terms and conditions of this
  Agreement;  

 Group Company means
  the Company, any holding company of the Company and any subsidiary of the Company
  or of any such holding company (with holding company and subsidiary having the
  meanings given to them by section 736 Companies Act 1985);  

 Recognised Investment Exchange has
  the meaning given to it by section 207 of the Financial Services Act 1986; and
   

 Remuneration Committee means
  the Remuneration Committee of the Board.  

 JOB DESCRIPTION
  AND DUTIES  

 1.1    The Executive is
  employed by the Company as Chief Executive Officer, O2 UK and is
  appointed to the Board with effect from the Effective Date. The Executive’s period of continuous employment for statutory purposes
  began on 1 October 2000.  

 1.2    The Executive will
  be required to devote his full time and attention during normal working hours
  to the proper performance of his duties, together with such additional hours
  as may be reasonably required.  

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 1.3    The Executive shall
  comply with all directions and shall diligently perform all such duties and
  exercise all such powers as are lawfully and properly assigned to him from time
  to time by the Board. The Executive shall be a director of the Company and his
  duties as a director of the Company or any other Group Company will be subject
  to the Articles of Association of the relevant company for the time being. 

 1.4    The Executive will
  perform such duties for the Company at such locations in the United Kingdom
  or overseas as the CEO may specify. The Executive’s initial place of work will
  be 260 Bath Road, Slough but the Company reserves the right to ask the Executive
  to relocate to any location as may be reasonably necessary. In the event that
  the Executive’s normal place of work is relocated more than 30 miles from 260
  Bath Road, Slough (so that it may be necessary for him to move house), the cost
  of the Executive’s relocation will be paid by the Company.  

 1.4    The Executive may
  be required to travel on the business of the Company and other Group Companies
  anywhere within the United Kingdom or overseas.  

 BASIC ANNUAL
  SALARY  

 2.1    The Executive’s
  basic annual salary is £360,000 (less such deductions as the Company is
  required to make), payable monthly in arrears. Basic salary will be inclusive
  of all fees and other remuneration to which the Executive may be or become entitled
  as an officer of the Company or of any other Group Company.  

 2.2    The Executive’s
  salary will be reviewed annually during the Employment, with the first such
  annual review to take place on 1 June 2004. The Company is under no obligation
  to increase the Executive’s salary following such a review but will not decrease
  it. Exceptionally, the Company shall review, and, if appropriate, increase,
  salary, bonus potential and all benefits on 1 October 2003, taking into account
  the cessation of expatriate benefits as detailed in clause 9 below and the remuneration
  of other UK based executives.  

 BONUS  

 3.    The
  Executive will be eligible to participate in the Company’s annual bonus scheme,
  the details of which will be determined by the Remuneration Committee. The bonus
  scheme will reward the Executive for his performance and the performance of
  the Company in the previous year as determined by the Remuneration Committee,
  by providing for an annual cash bonus of up to 120% of the Executive’s basic
  annual salary, with 80% of basic annual salary being paid for on target performance.
  Participation in the bonus scheme will continue where either party serves notice
  under clause 18.1 for any part of the notice period that elapses. Payment of
  any bonus amount earned and due to the Executive will be made after the conclusion
  of the bonus year on a date determined by the Remuneration Committee for all
  participants.  

 SHARE SCHEMES
   

 4.1    At
  the next appropriate date, the Executive will be eligible for an award under
  the mmO2 Executive Share Portfolio. The next award of Shares for eligible 

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 executives will be June/July 2003. Any award will
  be subject to the rules of the mmO2 Executive Share Portfolio and to the approval
  of the Remuneration Committee.  

 PENSION AND
  LIFE ASSURANCE  

 5.1    The
  Company will pay to the Executive each year an amount equal to 20% of the Executive’s
  annual salary from time to time (“contributions made by the Company towards
  the cost of retirement provision”) to enable him to make choices regarding
  the cost of retirement provision.  

 5.2    The
  Company will during the Employment pay for the benefit of the Executive subscriptions
  to the Company’s life assurance arrangements to provide the Executive with cover
  of 4 x basic salary.  

 HEALTHCARE AND PERMANENT
  HEALTH INSURANCE  

 6.1    The
  Executive and his wife and any dependent children under the age of 18 (or 21
  if still in full-time education) will be eligible for membership of the Company’s
  Healthcare Scheme or Schemes subject to the terms of the Scheme(s) as amended
  from time to time. If no relevant Company Scheme exists to cover treatment in
  the United States the Company will pay premiums for medical and dental insurance
  for treatment in the United States subject to the insurance premiums not being
  unusually high.  

 6.2    The
  Executive will be eligible to participate in the Company’s permanent health
  insurance scheme subject to the consent of the provider and the rules of the
  scheme.  

 6.3    The Company may
  at its expense require the Executive to be examined by a medical practitioner
  of the Company’s choice. The persons within the Company to whom a copy of any
  medical report may be made available shall be determined on a case by case basis.
  The Company shall procure that such persons will keep the contents of such report
  strictly confidential and will, at the Executive’s request, inform him of the
  identity of all persons within the Company to whom the report has been made
  available.  

 COMPANY CAR
   

 7.    The
  Executive will be eligible for a company car or the cash in lieu alternative
  (Cash Alternative) of £15,000 (less appropriate deductions)
  in line with the Company’s policy. Neither the car nor the Cash Alternative
  will constitute pensionable earnings. Additionally, the Executive is eligible
  to receive a fuel card for all private and business fuel.  

 PROFESSIONAL SUBSCRIPTIONS
   

 8.    The
  Executive will be reimbursed subscriptions to professional bodies where the
   CEO considers it to be in the Company’s interests.
   

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 EXPATRIATE AND OTHER
  BENEFITS  

 9.1    The
  Company currently provides the Executive with additional benefits due to the
  Executive’s expatriate status. The terms of these benefits are set out in a
  letter to the Executive from the Company dated 26 March 2003 (the Side
  Letter).  The Executive’s entitlement to the benefits set out in the
  Side Letter will cease on and with effect from 1 October 2003.  

 9.2    The
  Company will provide the Executive with ADSL/ISDN and a second fax line at the
  Executive’s home. In addition the Company will provide and meet the cost of
  home ADT security system and monitoring for the Executive. The Executive acknowledges
  that the latter is a taxable benefit.  

 TAX/FINANCIAL
  PLANNING  

 10.    The
  Company will meet the cost of personal tax and financial planning advice for
  the Executive up to a value of £5,000 excluding VAT per annum for each
  financial year, save that for the financial year 2003/2004 the Company will
  meet the cost of such advice up to a value of £6,000 excluding VAT. 

 EXPENSES  

 11.    The
  Company will reimburse authorised expenses properly incurred in the course of
  the Executive’s duties against receipts or other proof of expenditure. 

 HOLIDAY  

 12.1    The
  Executive is entitled to paid English bank and public holidays and to 30 days
  paid holiday in each year (1 April to 31 March) or on a pro-rata basis as appropriate.
  Holiday may not be carried over to a subsequent holiday year.  

 12.2    Any
  outstanding leave must be taken during the Executive’s notice period and no
  payment will be made for any unused annual leave as at the termination of the
  Employment (unless the CEO has not allowed outstanding holiday to be taken during
  the Executive’s notice period). If the Executive has taken more working days’
  paid holiday than his accrued entitlement, the Company is permitted to deduct
  the appropriate amount from the Executive’s final salary instalment (which deduction
  shall be made on the basis that each day of paid holiday is equivalent to 1/260
  of basic annual salary).  

 SICKNESS AND
  OTHER INCAPACITY  

 13.    Subject
  to the Executive’s compliance with the Company’s policy on notification and
  certification of periods of absence from work, the Executive will, if absent from work
  through sickness, injury or other incapacity, be entitled to receive sick pay
  of:  

	(a) 	one-twelfth of basic annual salary for each
      month in the first six months; and 
	 	 
	(b)	 one twenty-fourth of basic annual salary for
      each month in the next six months 

 

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 in total in any period of two years. Such payment
  will be inclusive of any entitlement to statutory sick pay and any benefits
  payable under any Company permanent health insurance scheme. Thereafter any
  entitlement to sick pay will be subject to the terms of the Company’s permanent
  health insurance arrangements.  

 OTHER INTERESTS
   

14.1    The Executive will
  promote, and not do anything which is harmful or conflicts with, the interests
  and reputation of the Company or any Group Company.  

 14.2    During the Executive’s
  employment with the Company, the Executive will not without obtaining the written
  consent of the CEO of the Company:  

	(a)	work for any other person, business
      organisation or company; or
	 	 
	(b)	hold more than 3% of the issued
      share capital in any business or company that is or is likely to complete
      with the business of the Company. 

 SHARE DEALING
  AND OTHER CODES OF CONDUCT
   

 15.    The Executive will
  comply with all codes of conduct adopted from time to time by the Board and
  with all applicable rules and regulations of the UK Listing Authority and any
  other relevant regulatory bodies, including the Model Code on dealings in securities.
   

 DISCIPLINARY AND
  GRIEVANCE PROCEDURE 
  

 16.    There is no formal
  disciplinary or grievance procedure which applies to the Executive. If the Executive
  has any grievance he may apply in writing to the CEO who personally will propose
  a solution or refer the matter to the Chairman.  

 SUSPENSION 
  

	17.1	The Company may: 
	 	 	 	 
	17.1.1	suspend the Executive
      if it considers this appropriate for up to 3 months;
	 	 	 	 
	17.1.2	if
      notice to terminate the Executive’s employment has been given by either
      the Executive or the Company, require the Executive to: 
	 	 	 	 
	 	 	(i)	undertake different duties or cease
      performing all duties for up to six months of the notice period; and/or
	 	 	 	 
	 	 	(ii)	cease attending any premises of
      the Company or any Group Company for up to six months; and/or
	 	 	 	 
	 	 	(iii)	resign with immediate effect from
      any offices the Executive holds in the Company or any Group Company (and
      any related trusteeships); and/or 

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	 	 	(iv)	refrain from any business contact with any customers,
      clients or employees of the Company or any Group Company for up to six months;
      and/or
	 	 	 	 
	 	 	(v)	take any holiday which has accrued under clause
      12.

17.2    The provisions
  of clause 14 will remain in full force and effect during any period of suspension
  under sub-clauses 17.1.1 or 17.1.2(ii). Any period of suspension under such
  sub-clauses will be on full basic salary and benefits. The duration of any period
  of suspension under clause 17.1.2(ii) will count towards the period for which
  the restriction in clauses 2(i) – (iii) of the Schedule to this letter apply
  (as stated in clause 8 of the Schedule).  

 17.3    The Company may
  also suspend the Executive during any period in which the Company is conducting
  a disciplinary investigation into alleged acts or defaults by the Executive.
  The provisions of clause 14 will remain in full force and effect during any
  period of suspension under this clause 17.3. Such suspension will be on full
  basic salary and benefits (save that the Executive will not be entitled to earn
  or be paid any bonus during any period of suspension if the Company concludes
  that discipline is warranted).  

 TERMINATION 
  

 18.1    The Company may
  terminate the Executive’s Employment at any time by giving to the Executive
  12 months’ written notice. The Executive may terminate the Employment with the
  Company at any time by giving the Company 6 months’ written notice. This Agreement
  will terminate immediately without notice when the Executive reaches age 60.
  For the avoidance of doubt, if the Executive serves notice at any time in the
  first six months following the Effective Date he will be required to work during
  his notice period.  

 18.2    Notwithsta

	(a)	 is guilty of any dishonesty
      or disreputable conduct which is likely substantially to affect the Company’s
      reputation; or
	 	 
	(b)	 is guilty of any gross or serious
      misconduct or serious neglect of duty after receiving a warning; or
	 	 
	(c)	 has committed a serious breach
      of any of the Company’s policies or procedures which have been notified
      to and which apply to the Executive.

nding clause 18.1 the Company may terminate this
  contract without notice and without compensation if it has reason to believe
  that the Executive:  

 Any delay by the Company in exercising its rights
  under this clause shall not  constitute a waiver
  of those rights.  

 18.3    The Company may
  also terminate the Employment by giving 12 months’ notice to the Executive if
  the Executive is unable (whether due to illness or otherwise) properly and effectively
  to perform his duties under this Agreement for a period or periods totalling
  (in aggregate) 9 months in any consecutive period of 12 months, 

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 provided that the Company will not terminate the
  Employment if to do so would have the effect of causing the Executive to forfeit
  any entitlement to benefit under the Company’s permanent health insurance arrangements.
  In these circumstances, the Company may take such steps as it considers appropriate
  in relation to the Employment including, without limitation, discontinuing salary
  and all other rights and benefits provided under this Agreement (apart from
  permanent health insurance for the Executive).  

 18.4    The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to him that it is exercising its discretion under this clause
  18.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination
  Date). In
  such a case the Company shall be obliged to pay to the Executive a sum (the
  Payment in Lieu of Notice)
  equal to:  

	(a)	the basic annual salary which the
      Executive would have been entitled to receive under this Agreement during
      the notice period referred to in clause 18.1 if notice had been given on
      the Termination Date (or, if notice has already been given, during the remainder
      of the notice period); and
	 	 
	(b)	the cost of contributions made
      by the Company towards the cost of retirement provision for the Executive
      during that period. Alternatively, the Company may, if it so chooses, make
      the contributions directly to the Executive’s pension arrangements to provide
      him with retirement benefits in respect of the unexpired portion of the
      notice period (or part thereof);
	 	 
	(c)	the value of any bonus payment
      which would have been made under clause 3. The payment made in respect of
      bonus under this clause 18.4 shall be not less than the amount which is
      equal to the bonus payment (if any) received by the Executive in respect
      of the bonus year preceding the Termination Date. Where the Payment in Lieu
      of Notice is in respect of a period which is less than one year, any payment
      in respect of bonus shall be pro-rated as applicable; and
	 	 
	(d)	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively the Company may, if it so chooses, continue to
      provide those contractual benefits during that period. At the Executive’s
      request, the Company will continue to pay insurance premiums for medical
      and dental treatment in the United States during that period regardless
      of its treatment of other contractual benefits under this subclause.

 18.5    The Payment in
  Lieu of Notice shall be subject to such deductions as the Company may be required
  to make and shall be in full and final settlement of all claims
  the Executive may have against the Company or any Group Company (whether known
  or unknown) arising out of or in connection with the termination of the Employment
  and the Executive’s directorship of the Company or any Group Company. The Payment
  in Lieu of Notice may, at the Company’s discretion, be paid as a lump sum (within
  10 working days of the last day of the Employment) or in equal monthly instalments
  from the Termination Date until the date which is twelve months after the Termination
  Date (or if notice had already been served before the  

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 Termination Date, the remainder of the notice period)
  or if sooner, the date on which the Executive commences alternative employment.
  Any entitlement which the Executive has or may have under any share related
  incentive scheme shall be determined in accordance with the rules of such scheme.
  For the avoidance of doubt, (1) the Company is only to be taken as exercising
  the right given by this clause, and accordingly to be liable for the Payment
  in Lieu of Notice, if it gives the written notice referred to above explicitly
  invoking this clause; (2) any delay or error in the Payment in Lieu of Notice
  shall not affect the lawfulness of a termination under this clause; and (3)
  any Payment in Lieu of Notice shall be without prejudice to the Executive’s
  rights in respect of any accrued but unpaid bonus for the bonus year prior to
  the bonus year in which the Termination Date falls.  

 18.6    Upon termination
  of the Employment the Executive will at the Company’s request promptly resign
  in writing as a director of the Company and any Group Company and will promptly
  return to the Company any property of the Company and any Group Company. The
  Secretary of the Company is irrevocably authorised to sign letters of resignation
  on the Executive’s behalf if he fails to do so.  

 LIQUIDATED DAMAGES
   

 19.1    If the Employment is
  terminated otherwise than in accordance with the terms of this Agreement (including,
  without limitation, if the Executive is constructively dismissed) the Company
  will pay to the Executive aa liquidated sum calculated by reference to the Payment
  in Lieu of Notice set out in clause 18.4 (or clause 20.4 as appropriate) and
  paid subject to the terms of clause 18.5. The liquidated sum will be subject
  to such deductions as the Company may be required to make and will be in full
  and final settlement of any claims which the Executive has or may have against
  the company or any other Group Company arising out of or in connection with
  the Executive’s employment or its termination. In consideration for this payment
  the Executive agrees to remain bound by the post-termination restrictions in
  the Schedule to this Agreement.  

 19.2    For the purpose
  of clause 19.1 constructive dismissal shall include (but not be limited to):

	(i)	the Executive’s removal from the office
      of director of the Company (other than by retirement by rotation pursuant
      to the Articles of Association of the Company) or from the position of Chief
      Executive Officer, O2 UK of the Company during the Employment without his
      consent on grounds insufficient to justify such removal; or 
	 	 
	(ii)	the alteration by the Company without the Executive’s
      consent of his duties and responsibilities so that the Executive’s
      overall status in the Company is materially reduced; or
	 	 
	(iii)	the relocation by the Company without the Executive’s
      consent of his normal place of work to a location which is more than 30
      miles from 260 Bath Road, Slough. 

 

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 CHANGE OF CONTROL
   

 20.1    For the purposes
  of this clause 20.1:  

 Control means the power of any person
  whether alone or together with any person acting in concert with him to control
  the composition of the board of directors of the Company or otherwise to secure
  whether by means of the holding of shares or the possession of voting power
  in relation to the Company or any other body corporate or by virtue of any powers
  conferred by the articles of association or any other document or agreement
  regulating the Company or any other body corporate that the affairs of the Company
  are conducted with the wishes of that person; and  

 Change of Control means:
  (i) the disposal of all or substantially all of the Company; or (ii) the acquisition
  by any person whether alone or together with any person acting in concert with
  him of Control of the Company; but shall not mean an acquisition of Control
  of the Company by another company the shares of which, immediately following
  such an acquisition, are all held by the holders of the shares of the Company
  immediately prior to such an acquisition in materially the same proportion as
  they held shares in the Company immediately prior to such an acquisition. 

 20.2    If a Change of
  Control occurs the period of notice which the Company or the Executive is required
  to give to the other to terminate the employment in accordance with clause 18.1
  will be unaffected and will remain as 12 months and 6 months respectively. 

 20.3    For the period
  of 12 months following a Change of Control clause 18.4 shall be replaced by
  clause 20.4 unless clause 18.4 has already been operated prior to the Change
  of Control.  

 20.4    The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to the Executive that it is exercising its discretion under this
  clause 20.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination Date). In such a case the Company
  shall be obliged within 10 working days after the Termination Date to pay to
  the Executive a sum (the Payment in Lieu of Notice) equal to:
   

	(a)

        	the basic annual salary which the
      Executive would have been entitled to receive under the terms of this Agreement
      during the notice period referred to in clause 18.1 if notice had been given
      on the Termination Date (or, if notice has already been given, during the
      remainder of the notice period);

      
	 	 
	(b)	the cost of contributions made
      by the Company towards the cost of retirement provision for the Executive
      during that period. Alternatively, the Company may, if it so chooses, make
      the contributions directly to the Executive’s pension arrangements to provide
      the Executive with retirement benefits in respect of the unexpired portion
      of the Executive’s notice period (or part thereof);
	 	 
	(c)	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively, the Company may, if it so

 

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	 	chooses, continue to provide those
      contractual benefits during that period. At the Executive’s request the
      Company will continue to pay insurance premiums for medical and dental treatment
      in the United States during that period, regardless of its treatment of
      other contractual benefits under this sub-clause; and 
	 	 
	(d)	the value of the Executive’s bonus
      (which shall be deemed to be the maximum achievable in respect of the financial
      year in which the Change of Control occurs). Where the Payment in Lieu of
      Notice is in respect of a period which is less than one year, any payment
      in respect of bonus shall be pro-rated as applicable based on the achievement
      of maximum bonus; and
	 	 
	(e)	the value of share scheme rights,
      computed in accordance with clause 20.5.

 20.5    For the purposes
  of clause 20.4(e), the value of share scheme rights shall be determined as
  A minus B where:

	A	 is the aggregate value, on the
      date of the Change of Control, of the Executive’s outstanding share awards
      and share options, without regard to any performance condition to which
      the awards and options are or may be subject; and
	 	 
	B  	is the aggregate value, on the
      date of the Change of Control, of those share awards and share options which
      were exercised or exercisable by the Executive between the date of the Change
      of Control and the Termination Date (as reduced by the operation of any
      applicable performance condition). 

 For the purposes of this clause 20.5, the Executive
  may be required to waive any share awards or share options which, in accordance
  with their terms, may vest or become exercisable after the Termination Date.
   

 20.6    The Payment in Lieu
  of Notice shall be subject to such deductions as the Company may be required
  to make and shall be in full and final settlement of all claims the Executive
  may have against the Company or any Group Company (whether known or unknown)
  arising out of or in connection with the termination of the Employment and the
  Executive’s directorship of the Company or any Group Company. 

 20.7    For the avoidance
  of doubt, (1) the Company is only to be taken as exercising the right given
  by this clause, and accordingly to be liable for the Payment in Lieu of Notice,
  if it gives the written notice referred to above explicitly invoking this clause;
  and (2) any delay or error in the Payment in Lieu of Notice shall not affect
  the lawfulness of a termination under this clause; and (3) any Payment in Lieu
  of Notice shall be without prejudice to the Executive’s rights in respect of
  any accrued but unpaid bonus for the bonus year prior to the bonus year in which
  the Termination Date falls.  

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 MITIGATION
  

 21.    For
  the purposes of paragraph 20 above, and not in any other circumstances, the
  payments set out (being payments made in accordance with this Agreement) will
  not be subject to mitigation, and will be paid irrespective of whether the Executive
  obtains alternative employment within the applicable notice period. 

 INTELLECTUAL
  PROPERTY

 22.    It
  shall be part of the Executive’s normal duties (whether or not during normal
  working hours and whether or not at the Executive’s normal place of work) at
  all times to consider in what manner and by what new methods or devices the
  products, services, processes, equipment or systems of the Company with which
  he is concerned or for which he is responsible might be improved and to originate
  designs (whether registrable or not) or patentable work or other work in which
  copyright may subsist. Accordingly:  

	(a)  	the
      Executive shall forthwith disclose full details of the same in confidence
      to the Company and shall regard himself in relation thereto as a trustee
      for the Company;
	 	 
	(b)

    	all
      intellectual property rights in such designs or work shall vest absolutely
      in the Company which shall be entitled, so far as the law permits, to the
      exclusive use thereof;
	 	 
	(c)	notwithstanding
      (b) above, the Executive shall at any time assign to the Company the copyright
      (by way of assignment of copyright) and other intellectual property rights,
      if any, in respect of all works written originated conceived or made by
      the Executive (except only those works written originated conceived or made
      by the Executive wholly outside his normal working hours hereunder and wholly
      unconnected with his service hereunder) during the continuance of the Employment;
      and
	 	 
	(d)	the
      Executive agrees and undertakes that at any time during or after the termination
      of the Employment he will execute such deeds or documents and do all such
      acts and things as the Company may deem necessary or desirable to substantiate
      its rights in respect of the matters referred to above including for the
      purpose of obtaining letters patent or other privileges in all such countries
      as the Company may require.

 RESTRICTIONS
  AND CONFIDENTIALITY  

 23.    The
  Executive will be bound by the provisions of the covenants set out in the Schedule
  to this Agreement.  

 CONTINUATION
   

 24.    Paragraphs
  18.6, 22 and 23 will continue in full force and effect after the termination
  of the Executive’s employment howsoever caused.  

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 NOTICES
   

 25.    Any
  notice or document may be served on the Executive personally or by posting it
  to his last known address or on the Company addressed to the Secretary at its
  registered office and if sent by first class post will be deemed to have been
  received with 24 hours of posting, save for any notice of termination to the
  Executive for which actual notice is required.  

 THE
  CONTRACT (RIGHTS OF THIRD
  PARTIES) ACT  

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

 VARIATION
   

 27.    The
  Company may vary paragraphs 5, 6, 7, 8, 12 and 14 but only after the Company
  has first consulted with the Executive and the Executive agrees to such variation.
   

 MISCELLANEOUS
  

 28.1    A
  reference to something being determined, specified or required by the Company
  includes a determination, specification or requirement from time to time. 

 28.2    With
  effect from the Effective Date, this Agreement supersedes any previous agreement
  between the Company or any Group Company and the Executive, whether oral or
  in writing with the exception of the letter referred to in clause 9.1 above,
  the terms of which shall cease to apply from 1 October 2003.  

 28.3     This
  Agreement is governed by and shall be construed in accordance with the laws
  of England. The parties to this Agreement submit to the non-exclusive jurisdiction
  of the English courts.  

	 SIGNED
        as a DEED and

        DELIVERED by

        DAVID
        McGLADE

        in
        the presence of:

         
	
)

        )

        )

        )

        

      	

      
	 	 	 
	 	 	 
	SIGNED
      for and on behalf of

       MMO2 plc 	)

      )	 

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 THE
  SCHEDULE

	1.	In
      this Schedule:
	 	 	 	 
	 	 	(a)	effective
      date of termination has
      the meaning given to it by Section 97(1) of the Employment Rights Act 1996;
	 	 	 	 
	 	 	(b)	in
      any capacity means
      on the Executive’s own behalf or jointly with or on behalf of any person,
      firm or company;
	 	 	 	 
	 	 	(c)	Confidential
      Information means
      confidential information of any Group Company which would be of value to
      a competitor or could reasonably enable a competitor to obtain an unfair
      advantage in trading in competition with any Group Company. For the purposes
      of this Schedule it includes but is not limited to business and strategic
      plans, marketing, financial, sales and customer information;
	 	 	 	 
	 	 	(d)	Business
      means
      the business of the provision of mobile telephony and Internet services
      (including but not limited to the provision of mobile data services).
	 	 	 	 
	2.	Since
      the Executive will obtain in the course of the Employment trade secrets
      and Confidential Information and personal knowledge of customers and employees
      of the Company and other Group Companies, the Executive agrees to be bound
      by the following covenants:
	 	 	 	 
	(i)	For
      12 months immediately following the effective date of termination of the
      Employment (howsoever arising and whether or not lawful) the Executive
      will not in any capacity carry on, be engaged or employed or be concerned
      or interested in any business, or take steps to set up, promote or facilitate
      the establishment of any business which competes or is about to compete
      with the parts of the Business with which the Executive has been actively
      involved at any time during the period of 24 months prior to the effective
      date of termination of the Employment, within: 
	 	 	 	 
	 	 	(a)

    	the
      United Kingdom;
	 	 	 	 
	 	 	(b)

    	Germany,
      Netherlands, Ireland; or
	 	 	 	 
	 	 	(C)	any
      other country to which the Company expands its Business and in respect of
      which the Executive had personal and material dealings.
	 	 	 	 
	(ii)	For
      12 months immediately following the effective date of termination of the
      Employment the Executive will not in any capacity for the purposes of any
      business which competes or is about to compete with the Business canvass,
      solicit, deal with or accept business or custom from any person, firm or
      company:

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	 	  	(a)	that was a business customer of the Company
      or any Group Company at any time during the 12 months immediately preceding
      the effective date of termination of the Employment (the 12 month
      Period); and
	 	 	 	 
	 	 	 (b)
	with whom or with which the Executive in the
      course of the Employment personally had material dealings during the 12
      month Period.
	 	 
	(iii)	For 12 months immediately
      following the effective date of termination of the Employment the Executive
      will not seek to entice away or offer engagement or employment to any designated
      employee to work for any business which competes or is about to compete
      with the Business. A designated employee is (i) an employee who is employed
      wholly or mainly as a manager or in a position above management; or (ii)
      an employee of the Company or any Group Company who has knowledge of trade
      secrets or Confidential Information or knowledge of and connections with
      or influence over customers of the Company or any Group Company; and (in
      both cases) with whom the Executive had personal and material dealings during
      the 12 months immediately preceding the effective date of termination of
      the Employment. 
	 	 
	(iv)	Any reference to “engagement
      or employment” in this clause means engagement or employment whether
      under a contract or otherwise and if under a contract includes a contract
      of employment, or a contract for services or any other form of contract
      and the terms “engage” and “employ” and their derivatives
      shall be construed in accordance with this definition.
	 	 
	3.	The Executive will,
      at the request and expense of the Company, enter into a separate agreement
      with any Group Company that the Company may reasonably require under the
      terms of which the Executive will agree to be bound by restrictions
      corresponding to those contained in clause 2(i)-(iii) inclusive (or such
      as may be appropriate in the circumstances).
	 	 
	4.	The Executive acknowledges
      that the restraints contained in this Schedule and each of them are necessary
      to protect the legitimate interests of the Company and the Group Companies,
      and that the same are no wider than reasonably necessary for that purpose,
      and are reasonable as between the parties to this Agreement.
	 	 
	5.	If any of the restrictions
      contained in this Schedule shall be adjudged to be void or ineffective or
      unenforceable for whatever reason but would be adjudged to be valid and
      effective if part of the wording were deleted or the periods reduced or
      the area reduced in scope, they shall apply with such modifications as may
      be necessary to make them valid and effective.
	 	 
	6.

      	For the avoidance of
      doubt it is expressly agreed that each of the sub-clauses (i)-(iii) in Clause
      2 is intended to contain separate and severable restraints and if any one
      or more of such sub-clauses are for any reason unenforceable in whole or
      in part, then the other sub-clauses shall nonetheless be and remain effective.

 

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	7.	The Executive agrees with the Company on its
      own behalf and on behalf of each Group Company that he will not (except
      as ordered by a court or regulatory body) communicate or divulge (or permit
      communication or divulgence) to any person or company or in any way use
      for his own purposes or for any purpose other than that of the Company or
      any Group Company, any trade secrets or Confidential Information of whatsoever
      nature acquired by the Executive during the Employment, whether relating
      to the business or affairs of any member of the Company or any Group Company
      or to persons with whom any member of the Company or any Group Company has
      dealings. This restriction shall apply both during the Employment with the
      Company and after its cessation but shall cease to apply to any information
      which is in or comes into the public domain otherwise than by reason of
      any default by the Executive.
	 	 
	8.	The period during which the restrictions referred
      to in clauses 2(i)-(iii) inclusive shall apply following the effective date
      of termination shall be reduced by the amount of time during which, if at
      all, the Company suspends the Executive under the provisions of clause 17.3.
	 	 
	9.	The Executive agrees that if, during either
      the Employment with the Company or the period of the restrictions set out
      in 2(i)-(iii) inclusive he receives an offer of employment or engagement,
      the Executive will provide a copy of this Schedule to the offeror as soon
      as is reasonably practicable after receiving the offer and if he accepts
      the offer he will inform the Company immediately.

 

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 1 April 2003

 

 

 

 

 O2 (Germany) Management
  GmbH 

 

 

RUDOLF GRÖGER 

 

 

	
	 	

	 	 	 
	SERVICE	 	GESCHÄFTSFÜHRER-
	 AGREEMENT 	 	DIENSTVERTRAG 
	 	 	 
	
	 	

  

  
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	THIS AGREEMENT
        is made on 31 March 2003 
	
	DIESER VERTRAG
        ist am 3l. März 2003 geschlossen  

	 	 	 
	BETWEEN 
	
	ZWISCHEN

	 	 	 	 	 	 	 
	 (1)
	 
	 O2 (Germany)
        Management GmbH, Georg-Brauchle-Ring 23 25, 80992 Munich (the Company); and
	 
	 (1)
	 
	 O2 (Germany)
        Management GmbH, Georg-Brauchle-Ring 23 25, 80992 München
        (die Gesellschaft); und

	 	 	 	 	 	 	 
	 (2)
	 
	 Rudolf Gröger,
        Fasanenstrasse 42a, 85591 Vaterstetten (the Executive)
        
	 
	 (2)
	 
	 Rudolf Gröger,
        Fasanenstraße 42a, 85591 Vaterstetten (der Geschäftsführer)
        

	 	 	 
	IT IS AGREED
        as follows:
	
	Es wird Folgendes
        VEREINBART:

	 	 	 
	Effective
        Date and Job Description  
	
	Zeitpunkt
        des Inkrafttretens and Tätigkeitsbeschreibung 

	 	 	 	 	 	 	 
	 1.1
	 
	 The Executive is employed
        by the Company as CEO (Vorsitzender der Geschäftsführung) of
        O2 (Germany) Management GmbH under the terms and conditions
        of the present Managing Director’s employment agreement. He has been appointed
        as Managing Director of the Company (Geschäftsführer) duly registered
        in the commercial register with the power of sole representation (Einzelvertretungs-befugnis).
        The Executive shall report to the CEO of mmO2 plc or any person
        the shareholders of the Company may designate.
	 
	 1.1
	 
	  Der Geschäftsführer
        wird von der Gesellschaft als CEO (Vorsitzender der Geschäftsführung)
        der O2 (Germany) Management GmbH gemäß den Regelungen
        des vorliegenden Geschäftsführerdienstvertrags beschäftigt.
        Er ist zum Geschäftsführer der Gesellschaft ernannt worden und
        mit Einzelvertretungsbefugnis ordnungsgemäß in das Handelsregister
        eingetragen worden. Der Geschäftsführer berichtet an den CEO
        der mmO2 plc oder jede andere Person, die die Gesellschafter
        der Gesellschaft bestimmen.  

	 	 	 	 	 	 	 
	 1.2
	 
	 This Agreement shall have
        effect from 1 November 2002 (the Effective Date).
	 
	 1.2
	 
	 Dieser Vertrag tritt mit
        Wirkung zum 1. November 2002 (dem Zeitpunkt des Inkrafttretens)
        in Kraft. 

	 	 	 	 	 	 	 
	 1.3
	 
	 Under an employment agreement
        dated 1/2 September 2001 between the Executive and VIAG Interkom Management
        GmbH (now: O2 (Germany) Management GmbH) the Executive worked
        for the Company since 1 October
	 
	 1.3
	 
	  Gemäß einem Dienstvertrag
        vom 1./2. September 2001 zwischen dem Geschäftsführer und der
        VIAG Interkom Management 

  

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	 2001. Therefore, for the
        purpose of the calculation of the Executive’s length of service, 1 October
        2001 shall be the relevant date of commencement of employment (e.g. determination
        of seniority under the pension agreement) and 1 October 2001 shall be
        taken into account when computing any term related to the seniority of
        the Executive.
	 
	 
	 
	 GmbH (jetzt: O2
        (Germany) Management GmbH) war der Geschäftsführer für
        die Gesellschaft seit dem 1. Oktober 2001 tätig. Deshalb ist für
        den Zweck der Berechnung der Betriebszugehörigkeit der 1. Oktober
        2001 der maßgebliche Zeitpunkt des Beginns der Anstellung (beispielsweise
        zur Bestimmung der Betriebszugehörigkeit gemäß der Ruhegeldzusage)
        und ist der 1. Oktober 2001 maßgeblich für die Berechnung jedes
        Zeitraums, der mit der Betriebszugehörigkeit des Geschäftsführers
        in Zusammenhang steht. 

	 	 	 	 	 
	Duties	 	Aufgaben
	 	 	 	 	 	 	 
	2.1	 	During the Employment, the Executive
      will diligently perform such duties for the Company at such locations in
      Germany or abroad as the Shareholders of the Company may specify. The Executive
      will comply with all directions lawfully and properly given to him by the
      Shareholders. The Executive will be required to devote his full time and
      attention during normal working hours to his duties. 	 	2.1	 	 Während der Anstellung wird
      der Geschäftsführer diejenigen Aufgaben für die Gesellschaft
      an denjenigen Orten in Deutschland oder außerhalb Deutschlands wahrnehmen,
      die die Gesellschafter der Gesellschaft spezifizieren. Der Geschäftsführer
      wird alle rechtmäßig und ordnungsgemäß erteilten Weisungen
      der Gesellschafter befolgen. Der Geschäftsführer wird während
      der üblichen Arbeitszeiten seine gesamte Zeit und Aufmerksamkeit seinen
      Aufgaben widmen. 
	 	 	 	 	 	 	 
	2.2	 	 The Executive’s working hours will be those
      that are reasonably required for the proper performance of his duties. 	 	2.2	 	Die Arbeitszeit des Geschäftsführers
      bemisst sich danach, was für die ordnungsgemäße Erfüllung
      seiner Aufgaben üblicherweise erforderlich ist. 
	 	 	 	 	 	 	 
	2.3	 	 The Executive may be required to travel on
      the business of the Company or any other Group Company anywhere within Germany
      or abroad.	 	2.3 	 	Es kann von dem Geschäftsführer verlangt
      werden, in geschäftlichen Angelegenheiten der Gesellschaft oder anderer
      

 

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	 	 	  	 	  	 	Gruppenunternehmen innerhalb oder
      außerhalb Deutschlands zu reisen. 

  

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	Basic Annual Salary	 	 	Jährliches Grundgehalt
       
	 	 	 	 	 	 	 
	3.1	The Executive’s gross basic annual
      salary for the period from the Effective Date to 31 March 2003 is €485,300.00.
      If the Appointment (as defined in Art. 3.2) takes effect on 1
      April 2003, the Executive’s gross basic annual salary with effect from that
      date shall be €412,500.00 (such reduction being made by reason of the salary
      payable under the mmO2 Appointment Letter referred to in Art.
      3.2). This basic annual salary (the Basic Salary) shall be
      paid less such deductions as the Company is required to make under law and
      shall be payable in twelve equal monthly instalments monthly in arrears.
      The Basic Salary will be reviewed annually during the employment, with the
      first review to take place in June 2004. However, no salary review will
      be undertaken after notice has been given by either party to terminate the
      Employment. The Company is under no obligation to increase the Executive’s
      salary following a salary review, but will not decrease it.	 	3.1	Das Jährliche Grundgehalt des
      Geschäftsführers beträgt vom Zeitpunkt des Inkrafttretens
      bis zum 31. März 2003 € 485.300,00. Wenn die Ernennung (im Sinne
      von Art. 3.2) zum 1. April 2003 wirksam wird, beträgt das jährliche
      Grundgehalt ab diesem Zeitpunkt € 412.500,00 (die Verringerung erfolgt
      aufgrund der nach der mmO2 Ernennungsvereinbarung gemäß
      Art. 3.2 zu zahlenden Vergütung). Dieses jährliche Grundgehalt
      (das Grundgehalt) ist, abzüglich solcher Abzüge,
      welche die Gesellschaft von Gesetzes wegen vornehmen muss, zahlbar in zwölf
      gleichen Raten am Ende eines jeden Monats. Das Grundgehalt wird während
      der Anstellung jährlich überprüft, die erste Überprüfüng
      erfolgt im Juni 2004. Es wird jedoch keine Gehaltsüberprüfung
      vorgenommen, nachdem eine Partei den Anstellungsvertrag gekündigt hat.
      Die Gesellschaft ist nicht verpflichtet, das Gehalt des Geschäftsführers
      infolge einer Gehaltsüberprüfung zu erhöhen, sie wird es
      jedoch nicht vermindern.
	 	 	 	 	 	 	 
	3.2	mmO2 plc, the ultimate
      parent company of the Company, is considering the appointment of the Executive
      as a member of the board of directors of mmO2 plc (the Appointment).
      The parties are in agreement that mmO2 plc is under no obligation
      to appoint the Executive as a member of the board. The terms and conditions
      of the possible Appointment would be stipulated in an appointment letter
      between mmO2 plc and the Executive (the mmO2	 	3.2	mmO2 plc, die Obergesellschaft
      der Gesellschaft, erwägt die Ernennung des Geschäftsführers
      zum Mitglied des Board of Directors der mmO2 plc (die Ernennung).
      Die Parteien sind sich darüber einig, dass mmO2 plc nicht
      verpflichtet ist, den Geschäftsführer zum Mitglied des Boards
      zu emennen. Die einzelnen Bedingungen der möglichen Ernennung würden
      in
	 	 	 	 	 	 	 

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	 	Appointment Letter).	 	 	 	einer Ernennungsvereinbarung zwischen mmO2
      plc und dem Geschäftsfiihrer (die mmO2 Ernennungsvereinbarung)
      geregelt. 
	 	 	 	 	 	 	 
	 	(1)	If the Executive’s possible Appointment takes
      effect and subsequently terminates, the Executive’s gross Basic Salary shall
      be increased by the amount which corresponds to the gross annual salary
      as defined in the mmO2 Appointment Letter; such increase shall
      take effect on the expiration of the Appointment and shall amount to the
      greater of €137,500.00 or the actual gross annual salary as defined in the
      mmO2 Appointment Letter.	 	 	(1)	Wenn die mögliche Ernennung des Geschäftsführers
      erfolgt and später endet, wird das Grundgehalt des Geschäftsführers
      um den Betrag erhöht, der dem Jahresbruttogehalt, wie es in der mmO2
      Ernennungsvereinbarung definiert ist, entspricht; eine solche Erhöhung
      wird mit dem Ablauf der Ernennung wirksam und beläuft sich entweder
      auf € 137.500,00 oder auf das tatsächliche in der mmO2
      Ernennungsvereinbarung definierte Jahresbruttogehalt, je nachdem, welcher
      Betrag höher ist.
	 	 	 	 	 	 	 
	 	(2)	If the Executive’s possible Appointment takes
      effect but his gross annual salary as defined in the mmO2 Appointment
      Letter is less than €137,500.00, the Executive’s gross Basic Salary shall
      be increased by the amount which corresponds to the difference between the
      gross annual salary as defined in the mmO2 Appointment Letter
      and €137,500.00, effective 1 April 2003.

      	 	 	(2)	 Wenn die mögliche Ernennung des Geschäftsführers
      in Kraft tritt, aber sein in der mmO2 Ernennungsvereinbarung
      definiertes Jahresbruttogehalt weniger als € 137.500,00 beträgt,
      wird das Grundgehalt (brutto) mit Wirkung zum 1. April 2003 um den Betrag
      erhöht, welcher der Differenz zwischen dem in der mmO2 Ernennungsvereinbarung
      definierten Bruttojahresgehalt und € 137.500,00 entspricht. 
	 	 	 	 	 	 	 
	 	The parties are in agreement that
      neither the failure of the Appointment to occur nor any revocation or termination
      of the Appointment shall be regarded as a breach of the present agreement.
      If the Appointment does not take effect on 1 April 2003, the Basic	 	 	 	 
	 	 	 	 	 	 	 

  

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	 	Salary with effect from that date
      shall be €550,000.00. If the Appointment takes effect later than I April
      2003, a reduction to this level of Basic Salary shall be made with effect
      from the date of commencement of the Appointment to reflect the salary payable
      under the mmO2 Appointment Letter with effect from that date.
      	 	 	Die Parteien sind sick darüber einig, dass
      weder das Unterbleiben der  Ernennung,
      nosh ein Widerruf oder eine sonstige Beendigung der Ernennung eine Verletzung
      des vorliegenden Vertrags darstellen. Erfolgt die Ernennung nicht mit Wirkung
      zum 1. April 2003, beträgt das Grundgehalt ab diesem Zeitpunkt € 550.000,00.
      Erfolgt die Ernennung mit Wirkung zu einem späteren Zeitpunkt als dem
      1. April 2003, erfolgt eine Verringerung dieser Höhe des Grundgehalts
      mit Wirkung von dem Tag des Beginns der Ernennung um denjenigen Betrag,
      welcher dem Gehalt entspricht, das nach der mmO2 Ernennungsvereinbarung
      ab diesem Tag gezahlt wird. 
	 	 	 	 	 
	 Bonus
      	 	 Bonus
      
	 	 	 	 	 
	4.1	Until 31 March 2003 the Executive shall receive
      a bonus in accordance with Art. 4 of the Managing Director’s employment
      agreement concluded on 1/2 September 2001 between the Executive and VIAG
      Interkom Management GmbH (now: O2 (Germany) Management GmbH).
      	 	4.1	 Bis zum 31. März 2003 erhält der
      Geschäftsführer einen Bonus gemäß Art. 4 des Geschäftsführerdienstvertrags
      vom 1./2. September 2001 zwischen dem Geschäftsführer und der
      VIAG Interkom Management GmbH (jetzt: O2 (Germany) Management
      GmbH). 
	 	 	 	 	 
	4.2	From 1 April 2003 (the beginning of mmO2
      plc fiscal year) the Executive will be eligible to participate in a discretionary
      annual bonus scheme the details of which will be determined from year to
      year by the Remuneration Committee of mmO2 plc. Under such scheme,
      the Executive shall be entitled, in addition to the Basic Salary, to receive
      80% of the Basic Salary at target performance, 40% at threshold performance
      and 	 	4.2 	Ab dem 1. April 2003 (dem Beginn des Geschäftsjahres
      der mmO2 plc) ist der Geschäftsführer berechtigt, an
      einem dem Ermessen überlassenen jährlichen Bonusprogramm teilzunehmen,
      dessen Details jährlich von dem Remuneration Committee der mmO2
      plc festgelegt werden. Nach diesem Programm ist der Geschäftsführer
      berechtigt, zusätzlich zu seinem Grundgehalt 80 % des Grundgehalts
      bei 
	 	 	 	 	 

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	 	120% at maximum performance.
      The annual bonus shall be based on the performance of O2 Germany
      at 70% and onmmO2 plc’s performance at 30%. In the context
      of this Art. 4, the “Basic Salary” shall include any increases
      of the Basic Salary according to 3.2.	 	 	Zielerreichung (target
      performance), 40 % bei Schwellenerreichung (threshold performance) und 120
      % bei maximaler Zielerreichung (maximum performance) zu erhalten. Der Jahresbonus
      bemisst sich zu 70 % nach den Ergebnissen von O2 Deutschland
      und zu 30 % nach den Ergebnissen der mmO2 plc. Im Rahmen des
      vorliegenden Art. 4 beinhaltet das “Grundgehalt” jede Erhöhung
      des Grundgehalts gemäß Art. 3.2.
	 	 	 	 	 
	Share Schemes	 	Beteiligungsprogramme
	 	 	 	 	 
	5.	It is the Company’s intention
      to make annual grants of share awards and it is currently expected that
      these awards will be granted under the Share Option element of the mmO2
      Executive Share Portfolio. The level of awards will be decided by mmO2’s
      Remuneration Committee but for the 2003 fiscal year mmO2’s
      Remuneration Committee has approved an award of options over mmO2
      shares with an aggregate exercise price equivalent to 1 x Basic Salary subject
      to satisfaction of performance targets determined by mmO2’s Remuneration
      Committee and in accordance with the rules of the scheme. “Basic Salary”
      shall be determined in the same manner as set out in Art. 4.2.	 	5.	Die Gesellschaft beabsichtigt
      jährlich Beteiligungsprämien zu gewähren und es wird gegenwärtig
      erwartet, dass diese gemäß dem Aktienoptions-Bestandteil des
      mmO2 Executive Share Portfolio gewährt werden. Die Höhe
      der Zuteilungen wird von dem Remuneration Committee von mmO2
      entschieden, jedoch ist für das Geschäftsjahr 2003 eine Zuteilung
      von Optionen über mmO2-Aktien genehmigt worden, welche einen
      Gesamtausübungspreis haben, welcher 1 x dem Grundgehalt entspricht,
      abhängig von der Erfüllung von Leistungszielen, welche von dem
      Remuneration Committee von mmO2 in Übereinstimmung mit den
      Regelungen des Beteiligungsprogramms festgelegt werden. “Grundgehalt”
      wird dabei in gleicher Weise berechnet, wie in Art. 4.2 beschrieben.
	 	 	 	 	 
	Pension and Life
      Assurance	 	Ruhegeld and Lebensversicherung
	 	 	 	 	 
	6.1	The Executive shall receive a
      	 	6.1	Der Geschäftsführer erhält
      ein 

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	 	pension as stipulated
      in the pension agreement between the Company (former: VIAG Interkom Management
      GmbH, now: O2 (Germany) Management GmbH) and the Executive dated
      2 September 2001 (the Pension Agreement). With regard to clause
      6 of the Pension Agreement, the interpretation according to Annex 1 to this
      Agreement shall apply. Effective 1 November 2002, the pensionable salary
      shall be €485,300.00, effective 1 April 2003, the pensionable salary
      shall  be €550,000.00 (the Relevant
      Remuneration). The Relevant Remuneration shall
      increase automatically in case of an increase of the Basic Salary. For the
      avoidance of doubt, bonus payments, company car and any other benefits under
      this Agreement will not constitute parts of the Relevant Remuneration.	 	 	Ruhegeld gemäß
      der Ruhegeldvereinbarung zwischen der Gesellschaft (vormals: VIAG Interkom
      Management GmbH, jetzt: O2
      (Germany) Management GmbH) und dem Geschäftsführer
       vom 2. September 2001 (die Ruhegeldvereinbarung).
      Im Hinblick auf Ziffer 6 der Ruhegeldvereinbarung findet die Auslegung
      gemäß Annex 1 zu diesem Vertrag Anwendung. Mit Wirkung vom 1.
      November 2002 beträgt das ruhegeldfähige Einkommen €485.300,00,
      mit Wirkung zum 1. April 2003 beträgt das ruhegeldfähige Einkommen
      €550.000,00 (das  Maßgebliche
      Einkommen). Das  Maßgebliche Einkommen erhöht
      sich automatisch im Falle einer Anhebung des Grundgehalts. Es wird klargestellt,
      dass Bonuszahlungen, Dienstwagennutzung and sonstige Vergünstigungen
      nach diesem Vertrag kein Bestandteil des Maßgeblichen Einkommens darstellen.
	 	 	 	 	 
	6.2	Life insurance, for the benefit
      of the Executive’s widow, will be provided for the duration of the
      Executive’s employment at €1,136,905.00 in the case of death.
      The parties are in agreement that the Executive shall be responsible for
      income tax payable on the insurance. The life insurance will be associated
      with an Accident Insurance which covers in the case of death €511,291.88
      and in the case of invalidity €1,022,583.76, such Accident Insurance
      being in place and active at all times during the Executive’s employment.
      The insurance expires with the day of termination of this employment contract.	 	6.2	 Für die Dauer der Anstellung
      des Geschäftsführers wird eine Lebensversicherung, deren Bezugsberechtigte
      die Witwe des Geschäftsführers ist, für den Fall des Todes
      des Geschäftsführers mit einer Todesfallleistung in Höhe
      von €1.136.905,00 aufrechterhalten.  Die
      Parteien sind sich einig, dass Einkommensteuer, die auf die Versicherung
      entfällt, von dem Geschäftsfuhrer getragen wird. Die Lebensversicherung
      wird ergänzt durch eine Unfallversicherung mit einer Todesfallleistung
      von €511.291,88 und einer Leistung im Invaliditätsfall in Höhe
      von

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	 	 	 	 	€1.022.583,76;
      diese Unfallversicherung ist während der Anstellung des Geschäftsführers
      zu jeder Zeit in Kraft. Die Versicherung endet am Tag der Beendigung dieses
      Anstellungsvertrags.
	 	 	 	 	 
	6.3	To the extent possible, the Company
      shall maintain appropriate D&O insurance for the Executive during the
      appointment as a managing director. Such insurance may not cover claims
      in which the Executive is directly or indirectly interested as a claimant
      against the Company or affiliated companies.	 	6.3	Die Gesellschaft wird im möglichen
      Umfang eine angemessene Geschäftsführerhaftpflichtversicherung
      (D&O Versicherung) für den Geschäftsführer während
      der Zeit seiner Berufung zum Geschäftsführer aufrechterhalten.
      Diese Versicherung soll solche Ansprüche nicht erfassen, die der Geschäftsführer
      direkt oder indirekt als Anspruchsteller gegen die Gesellschaft oder verbundene
      Unternehmen geltend macht.
	 	 	 	 	 
	Holiday	 	Urlaub
	 	 	 	 	 
	7.	The Executive shall be entitled
      to paid German bank and public holidays and to 30 working days paid holiday
      in each year (1 January to 31 December), or on a pro rata basis as appropriate.
      “Working day” shall mean any business days with the exception
      of Saturdays. Holiday is to be taken at a time or times convenient to the
      Company. Holidays may not be carried over to a subsequent holiday year.

      	 	7.	Der Geschäftsführer ist
      an den deutschen gesetzlichen Feiertagen bezahlt freigestellt und erhält
      30 Arbeitstage bezahlten Urlaub pro Jahr (1. Januar bis 31. Dezember), gegebenenfalls
      pro rata temporis. “Arbeitstag” umfasst jeden Werktag mit Ausnahme
      von Samstagen. Urlaub ist zu solcher Zeit oder solchen Zeiten zu nehmen,
      welche für die Gesellschaft geeignet ist bzw. sind. Urlaubsansprüche
      können nicht in ein nachfolgendes Urlaubsjahr übertragen werden.
	 	 	 	 	 
	Company Car	 	Dienstwagen
	 	 	 	 	 
	8. 	The Executive will be eligible
      for a company car and a driver commensurate with his position. The Company
      shall pay all costs incurred in connection with the maintenance and use
      of the vehi-	 	8.	Der Geschäftsführer hat
      Anspruch auf einen seiner Position angemessenen Dienstwagen nebst Fahrer.
      Die Gesellschaft trägt alle Kosten im Zusammenhang mit dem Unterhalt
      und der Nutzung

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	 	cle. The Executive
      shall be responsible for all wage tax payable on these non-cash benefits
      of the private use of the company car, if any. 	 	 des Fahrzeugs.
        Der Geschäftsführer ist verantwortlich
        für jegliche auf die geldwerten Vorteile der privaten Nutzung des
        Dienstwagens entstehende Einkommensteuer, sofern solche anf&aumlllt.

      

  

  

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	Expenses		Auslagen
	 	 	 	 	 
	9.	The Company
      will reimburse authorised expenses properly and reasonably incurred in the
      course of the Executive’s Employment against receipts or other proof of
      expenditure.	 	9.	Die Gesellschaft
      erstattet gerechtfertigte Auslagen, die ordnungsgemäß and in
      angemessener Weise im Zusammenhang mit der Anstellung des Geschäftsführers
      entstanden sind, gegen Quittung oder sonstigen Kostennachweis.
	 	 	 	 	 
	Conflicts	 	Konflikte
	 	 	 	 	 
	10.1	The
      Executive will promote, and not do anything which is harmful or conflicts
      with, the interests and reputation of the Company or any Group Company.	 	10.1	Der
      Geschäftsführer wird die Interessen and den Ruf der Gesellschaft
      oder von Gruppenunternehmen fördern und alles unterlassen, was den
      Interessen und dem Ruf der Gesellschaft oder von Gruppenunternehmen schadet
      oder dazu im Widerspruch steht.
	 	 	 	 	 
	10.2	During
      the Employment, the Executive will not (without obtaining the written consent
      of the Shareholders of the Company):	 	10.2	Während
      der Anstellung wird der Geschäftsführer es unterlassen (ohne zuvor die schriftliche
      Zustimmung der Gesellschafter der Gesellschaft erhalten zu haben):
	 	 	 	 	 
	(a)	subject
      to paragraph 10.2(c) and 10.3 below, be directly or indirectly engaged,
      concerned or interested in any other business activity, trade or occupation;
      or	 	(a)	unbeschadet
      nachfolgendem Art. 10.2 (c) and 10.3, direkt oder indirekt mit irgendeiner
      anderen Geschäftstätigkeit, einem Gewerbe oder einer Beschäftigung
      befasst, beteiligt oder an einer solchen interessiert für eine solche
      tätig zu sein; oder 
	 	 	 	 	 
	(b)	compete
      directly or indirectly with the Company or any Group Company; or	 	(b)	direkt
      oder indirekt mit der Gesellschaft oder irgendeinem Gruppenunternehmen in
      Wettbewerb zu treten; oder 
	 	 	 	 	 
	(c)	hold
      more than 3% of the issued share capital in any business or company that
      is or is likely to compete with the business of the Company.	 	(c)	mehr
      als 3 % des Grundkapitals an irgendeinem Gewerbe oder Unternehmen zu halten,
      das tatsächlich oder potentiell mit dem Geschäft der Gesellschaft
      in Wettbewerb tritt.

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	10.3	The
      Executive’s potential activities as a member of the board of directors of
      mmO2 plc are exempted from the restriction under paragraph 10.2
      (a), and the Company hereby releases the Executive from his duties hereunder
      to the extent necessary to perform his obligations under the possible Appointment.	 	10.3	Die
      mögliche Tätigkeit des Geschäftsführers als Mitglied
      des Board of Directors der mmO2 plc ist von den Beschränkungen
      gemäß Art. 10.2 (a) ausgenommen und die Gesellschaft stellt den
      Geschäftsführer von seinen Verpflichtungen gemäß dem
      vorliegenden Vertrag frei, und zwar in dem Umfang, der erforderlich ist,
      um die Verpflichtungen im Falle einer möglichen Ernennung zu erfüllen.
	 	 	 	 	 
	Share
      dealing and other Codes of Conduct	 	Verhaltensregeln
      (Codes of Conduct)

      insbesondere bezüglich Wertpapierhandels
	 	 	 
	11.	The
      Executive will comply with all codes of conduct adopted from time to time
      by the Shareholders and with all applicable rules and regulations on dealings
      in securities, including but not limited to the German Securities Trading
      Act (WpHG), the regulations of the UK Listing
      Authorities and the UK Model Code on dealings in securities.	 	11.	Der
      Geschäftsführer wird alle von den Gesellschaftern erlassenen Verhaltensregeln
      (Codes of Conduct) in ihrer jeweiligen Fassung befolgen und wird alle anwendbaren
      Regeln and Gesetze hinsichtlich des Handels mit Wertpapieren befolgen, einschließlich,
      aber nicht beschränkt auf, des deutschen Wertpapierhandelsgesetzes
      (WpHG), der Regeln der UK Listing Authorities und des UK Model Code über
      den Handel mit Wertpapieren.
	 	 	 	 	 
	Sick
      Pay	 	Zahlungen
      im Krankheitsfall
	 	 	 	 	 
	12.1	If
      absent from work through illness, the Executive will be entitled to receive
      sick pay (inclusive of any statutory sick pay and any benefits payable under
      any permanent health insurance effected by the Company) of one-twelfth of
      Basic Salary for each month in the first six months in total in any period
      of two years. Entitlement to receive any salary will be sub-	 	12.1	Im
      Falle der Arbeitsverhinderung infolge Krankheit ist der Geschäftsführer
      berechtigt, Lohnfortzahlung im Krankheitsfall zu erhalten (jegliche gesetzliche
      Ansprüche auf Lohnfortzahlung im Krankheitsfall und jegliche Leistungen
      gemäß etwaiger von der Gesellschaft abgeschlossener Krankenversicherungen

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	 	ject to the production of medical
      certificates and to such other requirements as the Company may reasonably
      impose.	 	 	einschließend) in Höhe
      von einem Zwölftel des Grundgehalts für jeden Monat, jedoch nur
      für insgesamt die ersten sechs Monate in jeglichem Zweijahreszeitraum.
      Der Anspruch auf Lohnfortzahlung hängt von einem Nachweis durch ärztliche
      Atteste ab oder von sonstigen Anforderungen, welche die Gesellschaft nach
      billigem Ermessen festlegt.
	 	 	 	 	 
	12.2	The Executive will not be paid during any absence
      from work (other than due to holiday, sickness, injury or other incapacity)
      without the prior permission of the Shareholders.	 	12.2	Der Geschäftsführer erhält während
      jeglicher Arbeitsabwesenheit (mit Ausnahme von Urlaub, Krankheit, Verletzung
      oder sonstiger Unpässlichkeit) kein Gehalt ohne vorherige Zustimmung
      der Gesellschafter.
	 	 	 	 	 
	Suspension	 	Freistellung 
	 	 	 	 	 
	13.1	If the Executive’s appointment as Managing Director
      ends without simultaneous termination of this employment agreement, the
      Executive shall be released from his duty to work for the remaining term
      of the Agreement. The Company shall continue to pay the compensation in
      accordance with Art. 14.3. The time of such release from the duty to work
      shall be taken into account in calculating the Executive’s remaining claim
      to vacation.	 	13.1	Endet die Bestellung zum Geschäftsführer
      ohne gleichzeitige Beendigung des Anstellungsverhältnisses, ist der
      Geschäftsführer für die verbleibende Vertragsdauer von der
      weiteren Dienstverpflichtung freigestellt. Die Gesellschaft wird die Vergütung
      gemäß Art. 14.3 fortzahlen. Die Freistellung von der Dienstverpflichtung
      erfolgt unter Anrechnung verbleibender Urlaubsansprüche des Geschäftsführers.
	 	 	 	 	 
	13.2	The provisions of paragraph 10 (Conflicts)
      will remain in full force and effect during any period of suspension
      under paragraph 13.1.	 	13.2	Die Vorschriften gemäß Art. 10 (Konflikte)
      bleiben während jeglicher Freistellung gemäß Art. 13.1
      vollumfänglich anwendbar.
	 	 	 	 	 
	13.3	The Company may also suspend the Executive during
      any period in which the Company is conducting a disciplinary investiga-	 	13.3	Die Gesellschaft kann den Geschäftsführer
      des Weiteren während solcher Zeiträume

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	 	tion into alleged acts or defaults
      by the Executive. The provisions of paragraph 10 (Conflicts) will
      remain in full force and effect during any period of suspension under
      this paragraph 13.3. Such suspension will be on full Basic Salary and benefits
      (e.g. company car, insurance etc.) (save that the Executive will not be
      entitled to earn or be paid any bonus during any period of suspension unless
      the allegations are unfounded).	 	 	freistellen, in denen die Gesellschaft
      disziplinarische Untersuchungen wegen mutmaßlicher Taten oder Verfehlungen
      des Geschäftsführers führt.
      Die Vorschrift des Art. 10 (Konflikte) bleibt während
      Zeiten der Freistellung gemäß diesem Art. 13.3 vollumfänglich
      anwendbar. Solche Freistellung erfolgt under vollständiger Fortzahlung
      des Grundgehalts und der Vergünstigungen (z.B. Dienstwagengewährung,
      Versicherungsschutz etc.) (jedoch ist der Geschäftsführer
      nicht berechtigt, für solche Zeiten der Freistellung einen Bonus zu erhalten
      oder ausgezahlt zu bekommen, es sei denn, dass die Anschuldigungen unbegründet
      sind).
	 	 	 	 	 
	Term and Termination	 	Laufzeit und Kündigung
	 	 	 	 	 
	 14.1
	The Employment shall be for a fixed initial
      term from the Effective Date until 31 October 2005, and shall
      continue thereafter for an unlimited period of time unless and until terminated
      by not less than one year’s written notice given by either party (End
      Date). The earliest date on which such notice may expire is 31 October 2005.	 	 14.1
	Der Anstellungsvertrag wird für eine anfängliche
      Laufzeit von dem Zeitpunkt des Inkrafttretens bis zum 31. Oktober 2005 fest
      abgeschlossen und wird danach unbefristet fortgesetzt, bis er von einer
      Partei unter Einhaltung einer Kündigungsfrist von nicht weniger
      als einem Jahr schriftlich gekündigt wird
      (Beendigungszeitpunkt). Der früheste Zeitpunkt,
      zu dem eine solche Kündigung wirksam werden kann, ist der 31. Oktober 2005.
	 	 	 	 	 
	14.2	The right to terminate this Agreement for good
      cause (sec. 626 of the German Civil Code) shall not be affected by Art.
      14.1.	 	14.2	Das Recht zur Kündigung dieses Vertrags
      aus wichtigem Grund (§ 626 des deutschen Bürgerlichen Gesetzbuches)
      bleibt von Art. 14.1 unberührt.
	 	 	 	 	 
	 	The term “good cause” shall include,
      but shall not be limited to, 	 	 	Der Begriff des “wichtigem

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	 	 	 	 	 	 	Grundes” schließt unter anderem
      ein:
	 	 	 	 	 	 	 
	 	(a)	dishonesty or disreputable conduct;
      or	 	 	(a)	Unredlichkeit oder rufschädigendes
      Verhalten; oder
	 	 	 	 	 	 	 
	 	(b)	any gross or serious misconduct or neglect of
      duty; or	 	 	(b)	jede grobe
      oder schwerwiegende Fehlverhalten bzw.
      Pflichtverletzung; oder
	 	 	 	 	 	 	 
	 	(c)	any substantially breach of the Company’s policies
      or procedures; or	 	 	(c)	 jede schwerwiegende
       Verletzung von Richtlinien oder Verfahrensregeln
      der Gesellschaft; oder
	 	 	 	 	 	 	 
	 	(d)	any serious or repeated breach of the Executive’s
      obligations under this Agreement.	 	 	(d)	jeder schwerwiegende oder wiederholte Verstoß
      des Geschäftsführers gegen Verpflichtungen nach diesem Vertrag.
	 	 	 	 	 	 	 
	 	This paragraph shall not restrict
      any other right the Company may have to terminate this Agreement. For the
      avoidance of doubt, the termination of the Appointment according to Art.
      3.2 for any reason shall not constitute an event entitling either the Company
      or the Executive to terminate this Agreement (subject to compliance with
      paragraph 3.2 and the remaining provisions of this Agreement).	 	 	Diese Regelung lässt sonstige
      Rechte der Gesellschaft, diesen Vertrag zu kündigen, unberührt.
      Es wir klargestellt, dass die Beendigung der Ernennung gemäß
      Art. 3.2, gleichgültig aus welchem Grund, keinen Umstand darstellt,
      der entweder die Gesellschaft oder den Geschäftsführer berechtigt,
      diesen Vertrag zu kündigen (vorbehaltlich der Befolgung von Art. 3.2
      and der übrigen Bestimmungen dieses Vertrags).
	 	 	 	 	 	 	 
	14.3	(a)	If notice of termination is given in accordance
      with Art. 14.1 the Company shall, subject to 14.3 (b) continue to pay the
      compensation stipulated in Art. 3 and Art. 4 and grant to the Executive
      the benefits as stipulated in this Agreement.	 	14.3	(a)	Im Falle der Kündigung gemäß
      Art. 14.1 zahlt die Gesellschaft, vorbehaltlich Art. 14.3 (b), die Vergütung
      gemäß Art. 3 und Art. 4 und gewährt dem Geschäftsführer
      die in diesem Vertrag 

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	 	(b)	If the
      Executive should receive earned occupational income from services rendered
      for a third party during the notice period, the income earned by the Executive
      in such work shall be deducted from any claim for remuneration vis-à-vis
      the Company during the time of such notice period in accordance with sec.
      615 sentence 2 of the German Civil Code; this shall also apply to any income
      the Executive maliciously fails to earn.	 	 	 	vereinbarten Vergünstigungen.
	 	 	 	 
	 	 	(b)	Sollte der Geschäftsführer
      während der Kündigungsfrist anderweitiges Einkommen aus anderweitiger
      Beschäftigung bei einer dritten Partei erzielen, so wird solches Einkommen
      des Geschäftsführers aus solcher Tätigkeit von Vergütungsansprüchen
      gegen die Gesellschaft während der Kündigungsfrist in Übereinstimmung
      mit der Regelung in § 615 Satz 2 des deutschen Bürgerlichen Gesetzbuches
      angerechnet; dies gilt ebenso für Einkommen, das der Geschäftsführer
      böswillig zu erzielen unterlässt.
	 	 	 	 	 	 	 
	14.4	  This Agreement will
      terminate immediately without notice when the Executive reaches age 60.
      	 	14.4	  Dieser Vertrag endet
      sofort und ohne dass es einer Kündigung bedarf, sobald der Geschäftsführer
      das 60. Lebensjahr vollendet hat. 
	 	 	 	 	 	 	 
	14.5	  Following termination
      of this Agreement or the Executive’s release from work, the Executive shall,
      of his own accord, return to the Company all objects due to the Company,
      or any Group Company, in the Executive’s possession, including all documents,
      notes and instruments as well as other data stored by technical means, including
      any copies thereof. The foregoing duty shall include the duty to return
      the company car provided to the Executive pursuant to Art. 8 of this Agreement.
      The right to retain any documents or objects defined in this section is
      hereby expressly excluded. The Executive shall not be entitled to any compensation
      or damages for returning com	 	14.5	  Nach Beendigung dieses
      Vertrags oder der Freistellung des Geschäftsführers von der Arbeit
      wird der Geschäftsführer unaufgefordert alle in seinem Besitz
      befindlichen Gegenstände, die der Gesellschaft oder einem Gruppenunternehmen
      gehören, einschließlich aller Unterlagen, Aufzeichnungen und
      Urkunden sowie technische gespeicherte Daten, einschließlich sämtlicher
      Kopien davon, an die Gesellschaft zurülckgeben. Die vorstehende 

 

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	 	 pany property prior
      to termination of this Agreement. Upon termination of the employment relationship
      the Executive shall affirm in writing the full discharge of his duty to
      return property. 	 	 	 Verpflichtung umfasst
      die Pflicht zur Rückgabe des Dienstwagens, welcher dem Geschäftsführer
      gemäß Art. 8 dieses Vertrags zur Verfügung gestellt wird.
      Das Recht, Dokumente oder Gegenstände, die in diesem Absatz beschrieben
      sind, zurückzuhalten, wird hiermit ausdrücklich ausgeschlossen.
      Der Geschäftsführer erhält keinen Ausgleich oder Schadensersatz
      für die Rückgabe des Firmeneigentums vor Beendigung dieses Vertrags.
      Mit Beendigung des Anstellungsverhältnisses wird der Geschäftsführer
      schriftlich bestätigen, dass er seine Verpflichtung zur Rückgabe
      von Eigentum vollständig erfüllt hat.  
	 	 	 	 	 	 	 
	 14.6  	Any termination requires
      a written notice.	 	 14.6  	 Kündigungen bedürfen
      der Schriftform. 
	 	 	 	 	 
	Change of
      Control for the German Business or mmO2 plc	 	Change of
      Control des deutschen Geschäfts oder der mmO2 plc 
	 	 	 
	15.	In the event that mmO2
      plc disposes of the whole (or substantially the whole) of its mobile telecommunications
      activities in Germany (the German
      Business) (whether in one transaction or a series
      of transactions; whether by means of a share deal (falling below
      50% plus one share of directly or indirectly owned or controlled
      shares of the Company) or by means of an asset deal (disposing of the whole
      or substantially the whole assets of the Company)) (a Qualifying
      Disposal), then the provisions of this Art. 15.1 shall apply. In
      the event of an outrageous infringement of rights of the Executive under
      the Agreement caused by unilateral action of the Company (the Constructive
      Dismissal) Art 15.2	 	15.	Sollte mmO2
      plc seine gesamten (oder im wesentlichen seine gesamten) Mobiltelefon Aktivitäten
      in Deutschland (das Deutsche
      Geschäft) (sei es in einer Transaktion
      oder in einer Serie von Transaktionen; sei es mittels eines Share Deals
      (bei dem sich der Anteil der direkt oder indirekt gehaltenen oder kontrollierten
      Anteile an der Gesellschaft auf unter 50 % plus ein Anteil verringert) oder
      im Wege eines Asset Deals (mit welchem alle oder im wesentlichen alle Vermögenswerte
      der Gesellschaft veräußert werden)) (die Berechtigende
      Veräußerung) veräußern, dann finden die Regelungen
      dieses Art. 15.1 Anwendung. Im Fall eines

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	 	 shall apply.
    	 	 	einseitigen, für
      den Geschäftsführer unzumutbaren Eingriffs der Gesellschaft in
      Rechte aus dem Vertragsverhältnis (der Eingriff)
      findet Art. 15.2 Anwendung: 
	 	 	 	 	 
	15.1	 In the event of a Qualifying Disposal
      the following provisions shall apply:

      	 	15.1	 Im Falle einer Berechtigenden
      Veräußerung gelten die nachfolgenden Vorschriften: 
	 	 	 	 	 
	(a)	Either party may terminate this
      Agreement by not less than one year’s written notice given within one year
      after the Qualifying Disposal takes place. Such notice may expire before
      the end of the initial term as stipulated in Art. 14.1. 
      	 	(a)	Jede Partei kann diesen Vertrag
      unter Einhaltung einer Frist von nicht weniger als einem Jahr schriftlich
      kündigen, und zwar innerhalb eines Jahres nachdem die Berechtigende
      Veräußerung stattgefunden hat. Eine solche Kündigung kann
      vor Ende der anfänglichen Laufzeit gemäß Art.
      14.1 wirksam werden. 
	 	 	 	 	 
	(b)	If the Executive gives notice of
      termination under Art. 15.1(a), he shall be entitled to receive, during
      the notice period, payments in accordance with Art. 14.3 above. 
      	 	(b)	Kündigt der Geschäftsführer
      gemäß Art. 15 (a), ist
      er berechtigt, während der Kündigungsfrist Zahlungen gemäß
      vorstehendem Art. 14.3 zu erhalten. 
	 	 	 	 	 
	(c)	If the Company gives notice
      of termination under Art. 15.1(a) or dismisses the Executive as CEO of the
      Company, the Executive shall be entitled to receive, during the notice period,
      payments in accordance with Art. 14.3 above. In addition, he shall be entitled
      to a cash sum equal to two times his Basic Salary in force at the date of
      the Qualifying Disposal plus two times his bonus which would be payable
      for target performance according to Art. 4.2. Such cash sum will be paid
      no later than the expiry of the notice period.	 	(c)	Kündigt die Gesellschaft gemäß
      Art. 15.1 (a) oder wird der Geschäftsführer
      als CEO (Vorsitzender der Geschäftsführung) der Gesellschaft abgelöst,
      ist der Geschäftsführer während der Kündigungsfrist berechtigt,
      Zahlungen gemäß vorstehendem Art. 14.3 zu erhalten. Zusätzlich
      ist er berechtigt, eine Einmalzahlung in Höhe des zweifachen Grundgehalts,
      welches ihm am Tag der Berechtigenden Veräußerung zusteht, plus die
      zweifachen Bonuszahlungen bei unterstellter vollständiger Zielerfüllung
      gemäß Art. 4.2 zu erhalten. Diese 
	 	 	 	 	 
	15.2	In case of a Constructive
      Dismissal of the Executive within one year of the Qualifying Dis-	 	 	 
	 	 	 	 	 

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	 	posal, the provisions of this Art.
      15.2 shall apply:	 	 	Einmalzahlung wird spätestens
      bei Ablauf der Kündigungsfrist gezahlt.
	 	 	 	 	 	 	 
	(a)	For the purpose of
      this Art. 15.2, Constructive Dismissal shall include (but not be limited
      to):	 	15.2	  Im Falle eines Eingriffs innerhalb
        eines Jahres nach einer Berechtigenden Veräußerung gelten die
        Vorschriften dieses Art. 15.2:

	 	 	 	 	 	 	 
	 	(aa)	the substantial change to the Executive’s
      duties and responsibilities by the Company without the Executive’s
      consent so that the Executive’s overall status is materially reduced;
      or	 	(a)	Im Rahmen dieses Art.
      15.2 umfasst ein Eingriff unter anderem:
	 	 	 	 	 	 	 
	 	(bb)	the relocation by the Company without
      the Executive’s consent of the Executive’s normal place of work to a location
      which is more than 100 kms from Munich.	 	 	(aa)	die wesentliche Veränderung der Rechte
      und Pflichten des Geschäftsführers durch die Gesellschaft ohne
      Zustimmung des Geschäftsführers, infolge derer die Gesamtstellung
      des Geschäftsführers wesentlich beeinträchtigt wird; oder
	 	 	 	 	 	 	 
	(b)	For the avoidance of
      doubt, a change to the Executive’s reporting lines shall not, in isolation,
      be regarded as Constructive Dismissal.	 	 	(bb)	die Versetzung
      des Geschäftsführers ohne seine Zustimmung durch die Gesellschaft
      von dem üblichen Arbeitsplatz des Geschäftsführers zu einem
      Ort, der mehr als 100 km von München entfernt ist.
	 	 	 	 	 	 	 
	(c)	In case of a constructive
      dismissal, the Executive shall have the right to terminate this Agreement
      by not less than twelve months’ written notice given within one year
      after the Qualifying Disposal takes place. Art 15.1 (a) sentence 1 shall
      apply accordingly. During the notice period the Executive shall receive
      payments and benefits in accordance with Art. 14.3 above. In addition, he
      shall be entitled to a cash sum according to Art. 15.1 (c) above. Such cash
      sum will be 	 	(b)	Es wird klargestellt,
      dass eine Veränderung der Berichtslinien des Geschäftsführers
      nicht, für sich betrachtet, als Eingriff angesehen wird.
	 	 	 	 
	 	(c)	Im Falle eines Eingriffs ist der
      Geschäftsführer berechtigt, diesen Vertrag unter Einhaltung einer
      Kündigungsfrist von zwölf Monaten schriftlich zu kündigen,
      und zwar innerhalb eines Jahres

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	 	due for payment when
      the Executive serves his termination.  	 	 	nach der Berechtigenden Veräußerung.
      Art. 15.1 (a) Satz 1 findet entsprechend Anwendung. Während der Kündigungsfrist
      erhält der Geschäftsführer Zahlungen and Vergünstigungen
      gemäß vorstehendem Art.
      14.3. Zusätzlich erhält
      er eine Einmalzahlung gemäß vorstehendem Art. 15.1 (c). Die Einmalzahlung
      wird mit Ausspruch der Kündigung gegenüber der Gesellschaft zur
      Zahlung fällig.
	 	 	 	 	 	 
	15.3	Payment of all amounts
      referred to in Arts 15.1 and 15.2 will be subject to deductions as the Company
      may be required to make. The Executive
      shall have no further claims for the loss of employment. For the avoidance
      of doubt, this does not affect the post-termination restrictive covenants
      according to Art. 17 which remain in force.	 	15.3	 Die Zahlung aller Beträge
      gemäß vorstehendem Art.
      15.1 und 15.2 erfolgt abzüglich solcher Abzüge, zu denen die Gesellschaft
      verpflichtet ist. Der Geschäftsführer
      hat keine weitergehenden Ansprüche für den Verlust seines Arbeitsplatzes.
      Es wird klargestellt, dass die nachvertraglichen Beschränkungen gemäß
      Art. 17 unberührt bleiben.
	 	 	 	 	 	 
	15.4	Art. 15.1 to 15.3 shall
      also apply in the event of a Change of Control of mmO2 plc, which
      shall be deemed to constitute a Qualifying Disposal. For these purposes:
       	 	15.4	Art. 15.1 bis 15.3 finden auch Anwendung im
      Falle eines Change of Control bei der mmO2 plc, welcher als Berechtigende
      Veräußerung angesehen wird. Zu diesem Zweck bedeuten: 
	 	 	 	 	 	 
	 	 “Control”
        means the power of any person (whether alone or
        together with any person acting in concert with him) to control the composition
        of the board of directors of mmO2 plc or otherwise to secure
        (whether by means of the holding of shares or the possession of voting
        power in relation to mmO2 plc or any other body corporate or
        by virtue of any powers conferred by the articles of association or any
        other document or agreement regulating mmO2
        plc or any other body corporate) that the affairs of mmO2 plc
        are conducted with the wishes of that person; and
	 	 	“Control”:
      die Fähigkeit
      einer Person (sei es alleine oder zusammen mit anderen Personen, die gemeinsam
      mit ihr handeln) die Zusammensetzung des Board of Directors der mmO2
      plc zu kontrollieren oder auf andere Weise sicherzustellen (sei es durch
      das Innehalten von Anteilen oder von Stimmrechten bezüglich der mmO2 
      plc oder einer anderen juristischen Person
      oder aufgrund von Befugnissen, die durch die Gesellschaftssatzung oder andere
	 	 	 	 	 	 
	 	“Change of Control”
      means: (i) the disposal

      of all or substantially all of mmO2 plc’s business; or (ii) 
    	 	 	 

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  	  	the acquisition by
      any person (whether alone or together with any person acting in concert
      with him) of Control of mmO2 plc; but shall not mean an acquisition
      of Control of mmO2 plc by another company the shares of which,
      immediately following such an acquisition, are all held by the holders of
      the shares of mmO2 
      plc immediately prior to such an acquisition in materially the same proportion
      as they held shares in mmO2 plc immediately prior to such an
      acquisition.    	   	   	
Dokumente oder Vereinbarungen, die die mmO2 
        plc oder eine andere juristische Person regulieren), dass die Geschäfte
        der mmO2 
        plc in Übereinstimmung mit dem Willen dieser Person geführt
        werden; und

      “Change of Control”:
      (i) die  Veräußerung
      des gesamten oder im Wesentlichen gesamten Geschäfts der mmO2
      plc; oder (ii) die Übernahme der Kontrolle der mmO2 plc
      durch irgendeine Person (sei es alleine oder zusammen mit einer anderen
      Person, die gemeinsam mit dieser handelt); dies umfasst nicht die Übernahme
      der Kontrolle der mmO2 plc durch eine andere Gesellschaft, deren
      Anteile, unmittelbar nach einer solchen Übernahme, alle von den Anteilseignern
      der mmO2 plc, die unmittelbar vor einer solchen Übernahme
      bestanden, im Wesentlichen in demselben Verhältnis gehalten werden,
      als sie die mmO2 plc-Anteile unmittelbar vor einer solchen Übernahme
      hielten.
	 	 	 	 	 	 
	Copyright	 	Urheberrecht
	 	 	 	 	 	 
	16.	All work results produced in the
      performance of the Executive’s duties and responsibilities shall be the
      exclusive property of the Company. To the extent that such work results
      are protected by copyright, the Executive hereby grants the Company the
      exclusive and unlimited license to use such work results in all forms conceivable
      now or at a later date. The Executive hereby agrees and undertakes that
      at any time during or after the termination of employment he will execute
      such deeds	 	16.	Alle Arbeitsergebnisse, die im
      Zuge der Erfüllung der Aufgaben des Geschäftsführers erstellt
      werden, werden ausschließliches Eigentum der Gesellschaft. Soweit
      solche Arbeitsergebnisse durch Urheberrecht geschützt sind, gewährt
      der Geschäftsführer der Gesellschaft hiermit die ausschließliche
      und unbeschränkte Lizenz zum gegenwärtigen oder künftigen
      Gebrauch solcher Arbeitsergebnisse in allen Formen. Der Geschäftsführer

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	 	or documents and do all such acts
      and things as the Company may deem necessary or desirable to substantiate
      its rights in respect of the matters referred to above including for the
      purpose of obtaining letters patent or other privileges in all such countries
      as the Company may require. This exclusive license shall survive termination
      of this Agreement. The Executive shall not be entitled to any additional
      compensation for the exclusive license granted to the Company hereunder.
      The compensation stipulated in this Agreement shall be deemed full and adequate
      consideration for the exclusive license granted by the Executive hereunder.
      This Section will continue in full force and effect after the termination
      of this Agreement howsoever caused.	 	 	verpflichtet sich hiermit, dass
      er zu jeder Zeit während des Bestands oder nach Beendigung des Anstellungsverhältnisses
      alle Urkunden oder Dokumente unterzeichnen wird und alle Handlungen vornehmen
      wird, die die Gesellschaft für erforderlich oder wünschenswert
      hält, um ihre Rechte im Hinblick auf die oben genannten Gegenstände
      zu begründen, einschließlich für den Zweck, Patente oder
      andere Rechte, in allen Ländern, für die die Gesellschaft dies
      geltend macht, zu erhalten. Diese ausschließliche Lizenz besteht nach
      Beendigung dieses Vertrags fort. Der Geschäftsführer erhält
      keine zusätzliche Vergütung für die der Gesellschaft hiernach
      gewährte ausschließliche Lizenz. Die Vergütung, die in diesem
      Vertrag festgelegt ist, stellt eine vollständige und angemessene Abgeltung
      für die exklusive Lizenz dar, die der Geschäftsführer hiernach
      gewährt hat. Dieser Absatz bleibt auch nach Beendigung des Vertrags
      anwendbar, gleichgültig wodurch eine Beendigung herbeigeführt
      worden ist.
	 	 	 	 	 
	Restrictions and Non-compete
      Obligation	 	Beschränkungen und Wettbewerbsverbot
	 	 	 	 	 
	17.	The Executive shall be bound by the restrictions
      as set out below:	 	17.	Der Geschäftsführer ist an die nachfolgenden
      Beschränkungen gebunden:
	 	 	 	 	 
	17.1	In the interest of both parties, the Executive
      shall promptly disclose to the Company (represented by the shareholders)
      any conflict of interests arising in connection with the performance of
      his duties and responsibilities. The foregoing provision shall apply, in
      par-	 	17.1	Im Interesse beider Parteien wird der Geschäftsführer
      unverzüglich jeglichen Interessenkonflikt der Gesellschaft (vertreten
      durch ihre Gesellschafter) anzeigen, der im Zusammenhang mit der Ausübung
      seiner Aufgaben entsteht. Die vorstehende

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	 	ticular, if suppliers or any other
      business partners of the Company or enterprises affiliated with the Company
      are relatives, personal friends or close business associates of the Executive
      or stand in a close relationship with such relatives, personal friends or
      close business associates. The duty of disclosure shall not be limited to
      cases in which a conflict of interests may have a specific effect on the
      performance of the Executive’s duties and responsibilities; rather,
      the mere appearance of a conflict of interests shall be sufficient to give
      rise to such a duty.	 	 	Verpflichtung ist insbesondere anwendbar,
      wenn Zulieferer oder andere Geschäftspartner der Gesellschaft oder
      mit der Gesellschaft verbundener Unternehmen, Verwandte, persönliche
      Bekannte oder enge Geschäftsfreunde des Geschäftsführers
      sind oder in einer engen Beziehung mit solchen Verwandten, persönlichen
      Bekannten oder engen Geschäftsfreunden bestehen. Die Verpflichtung
      zur Offenlegung ist nicht beschränkt auf solche Fälle, in denen
      ein Interessenkonflikt einen konkreten Einfluss auf die Ausübung der
      Aufgaben des Geschäftsführers hat; vielmehr soll der bloße
      Anschein eines Interessenkonflikts ausreichend sein, um die vorstehende
      Verpflichtung auszulösen.
	 	 	 	 	 
	17.2	For twelve months immediately following the
      effective date of termination of the employment the Executive will not seek
      to entice away or offer engagement or employment to any designated employee.
      A designated employee is (i) an employee who is employed wholly or mainly
      as a manager or in a position above management of the Company; or (ii) an
      employee of the Company or any affiliated company who has knowledge of trade
      secrets or Confidential Information or knowledge of and connections with
      or influence over customers of the Company or any affiliated company.	 	17.2	Während eines Zeitraums von zwölf
      Monaten, welcher dem Datum der rechtlichen Beendigung des Anstellungsverhältnisses
      folgt, wird der Geschäftsführer den Versuch unterlassen, nachfolgend
      bezeichnete Mitarbeiter abzuwerben oder ihnen eine Beschäftigung oder
      Anstellung anzubieten. Ein Mitarbeiter im vorstehenden Sinne ist (i) ein
      Mitarbeiter der vollständig oder hauptsächlich auf der Ebene des
      erweiterten Führungskreises der Gesellschaft oder darüber beschäftigt
      ist; oder (ii) ein Mitarbeiter der Gesellschaft oder eines verbundenen Unternehmens,
      der Kenntnis von Geschäftsgeheimnissen oder Betriebsgeheimnissen oder
      Kenntnis von oder Beziehungen mit oder Einfluss auf Kunden der 
	 	 	 	 	 
	17.3	The Executive will, at the request and expense
      of the Company, en-	 	 	 

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	 	 	 	 	Gesellschaft oder verbundener Unternehmen hat.
	 	 	 	 	 
	 	ter into a separate agreement with
      any affiliated company under the terms of which the Executive will agree
      to be bound by restrictions corresponding to those contained in paragraph
      2 inclusive (or such as may be appropriate in the circumstances).	 	17.3	Der Geschäftsführer wird
      auf Verlangen und Kosten der Gesellschaft
      Vereinbarungen mit verbundenen Unternehmen abschließen, nach denen
      er sich verpflichtet, Beschränkungen unterworfen zu sein, welche denjenigen
      gemäß vorstehendem Unterabsatz 2 entsprechen (oder solchen, die
      den jeweiligen Umständen angemessen sind).
	 	 	 	 	 
	17.4	The Executive agrees that for a period of six
      months following the end date of this Employment Agreement he shall neither
      directly nor indirectly provide professional services to Deutsche Telekom
      AG or affiliated companies or Vodafone D2 GmbH or affiliated companies within
      the geographic area of Germany. During the term of the non-compete obligation
      the Company shall pay the Executive a compensation which shall – for
      each month of the non-compete obligation – amount to 100% of the most
      recent contractual remuneration received by the Executive. Unless stipulated
      otherwise in the foregoing provisions, sections 74 et seq. of the
      (German) “Handelsgesetzbuch” (Commercial Code) shall
      govern the performance of this covenant not to compete, except that the
      one-year period specified in sec. 75 a of the Commercial Code shall be reduced
      to six months.	 	17.4	Der Geschäftsführer wird für
      einen Zeitraum von sechs Monaten nach dem  Beendigungszeitpunkt
      dieses Anstellungsvertrags weder direkt noch indirekt berufsmäßige
      Leistungen für die Deutsche Telekom AG oder mit dieser verbundene Unternehmen
      oder für Vodafone D2 GmbH oder mit dieser verbundene Unternehmen innerhalb
      Deutschlands als geografischem Anwendungsbereich erbringen. Während
      der Laufzeit des Wettbewerbsverbots wird die Gesellschaft dem Geschäftsführer
      eine Karenzentschädigung zahlen, die – für jeden Monat des
      Wettbewerbsverbots – 100 % seiner zuletzt bezogenen vertragsmäßigen
      Leistungen beträgt. Soweit vorstehend nicht anders geregelt, finden
      die Vorschriften der §§ 74 ff. des deutschen Handelsgesetzbuchs
      Anwendung, außer dass die Einjahresfrist gemäß § 75
      a HGB auf sechs Monate verringert wird.
	 	 	 	 	 
	17.5	If any of the restrictions contained in this
      Art. 17 shall be adjudged to be void or ineffective or unenforceable for
      whatever reason but would be adjudged to be valid and effective if part
      of the wording were deleted or the periods reduced or the area reduced in
      scope, they shall apply with such modifications as may be neces-	 	17.5	Falls eine der Beschränkungen gemäß
      diesem Artikel 17 als nichtig oder unwirksam oder

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	 	sary to make them valid
      and effective. 	 	 	unverbindlich angesehen werden sollte,
      gleich aus welchem Grund, diese jedoch als wirksam und durchsetzbar angesehen
      würde, wenn ein Teil des Wortlauts gestrichen oder Zeiträume verringert
      oder Anwendungsbereiche reduziert würden, dann soll sie mit denjenigen
      Änderungen gelten, die erforderlich sind, um sie wirksam und durchsetzbar
      zu machen.  
	 	 	 	 	 
	17.6	The parties are in agreement that
      the Executive will not (except as ordered by a court or regulatory body)
      communicate or divulge (or permit communication or divulgence) to any person
      or company or in any way use for his own purposes or for any purpose other
      than that of the Company or any affiliated company, any trade secrets or
      confidential information of whatsoever nature acquired by the Executive
      during the employment, whether relating to the business or affairs of any
      member of the Company or any affiliated company or to persons with whom
      any member of the Company or any affiliated company has dealings. This restriction
      shall apply both during the Executive’s employment with the Company and
      after its cessation but shall cease to apply to any information which is
      in or comes into the public domain otherwise than by reason of any default
      by the Executive.  	 	17.6	Die Parteien vereinbaren, dass
      der Geschäftsführer es unterlässt (soweit dies nicht von einem Gericht
      oder einer Behörde angeordnet wird), gegenüber irgendeiner Person
      oder Gesellschaft Betriebsgeheimnisse oder Geschäftsgeheimnisse (gleichgültig
      welcher Art), die von dem Geschäftsführer während seiner Anstellung
      erworben worden sind, gleichgültig ob sie sich auf das Geschäft
      oder Angelegenheiten beziehen von Angehörigen der Gesellschaft oder verbundener
      Unternehmen oder auf Personen mit denen Angehörige des Unternehmens oder
      verbundene Unternehmen geschäftliche Beziehungen aufrecht erhalten, mitzuteilen
      oder offenzulegen (oder eine Mitteilung oder Offenlegung zu erlauben); er
      wird solche Informationen auch nicht für eigene Zwecke oder für
      andere Zwecke mit Ausnahme der Zwecke der Gesellschaft oder mit ihr verbundener
      Unternehmen verwenden. Diese Beschränkung ist sowohl anwendbar während der
      Anstellung des Geschäftsführers mit der Gesellschaft als auch nach
      Ablauf der Anstellung, sie bezieht sich 

 

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	 	 	 	 	jedoch nicht mehr auf diejenige
      Information, die öffentlich bekannt ist oder geworden ist, ohne dass dies
      auf eine Nichteinhaltung der vorstehenden Verpflichtung durch den Geschäftsführer
      zurückzuführen ist.  
	 	 	 	 	 
	Interpretation 
    	 	Auslegung
	 	 	 	 	 
	18.1	In this contract the expressions
      set out below have the meanings indicated:  	 	18.1	 In diesem Vertrag haben folgende
      Bezeichnungen die nachfolgend angegebene Bedeutung:
	 	 	 	 	 
	 	Shareholders  	 	 	Gesellschafter 
	 	 	 	 	 
	 	The shareholder or shareholders
      from time to time of O2 (Germany) Management GmbH  	 	 	Der jeweilige Gesellschafter oder
      die jeweiligen Gesellschafter der O2 (Germany) Management GmbH
	 	 	 	 	 
	 	BT  	 	 	BT  
	 	 	 	 	 
	 	British Telecommunications plc  	 	 	British Telecommunications plc
	 	 	 	 	 
	 	Employment 	 	 	Anstellungsverhältnis
	 	 	 	 	 
	 	The Executive’s employment in accordance with
      the terms and conditions of this letter  	 	 	Das Anstellungsverhältnis des Geschäftsführers
      gemäß den Bestimmungen dieses Vertrags  
	 	 	 	 	 
	 	Group Company  	 	 	Gruppenunternehmen  
	 	 	 	 	 
	 	O2 (Germany) Management GmbH, O2 (Germany)
      GmbH & Co., any holding company or parent company and any subsidiary
      of O2 (Germany) Management GmbH/O2 (Germany) GmbH
      & Co. or of any such holding company or parent company 	 	 	O2 (Germany) Management GmbH, O2
      (Germany) GmbH & Co., jegliche Holdingsgesellschaft oder Muttergesellschaft
      und jede Tochtergesellschaft von O2 (Germany) Management GmbH/O2
      (Germany) GmbH & Co. oder von jeder solchen Holdinggesellschaft oder
      Muttergesellschaft 
	 	 	 	 	 
	 	mmO2	 	 	mmO2
	 	 	 	 	 
	 	mmO2 plc   	 	 	mmO2 plc  
	 	 	 	 	 
	18.2	A reference to something being  	 	 	 

 

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	 	determined, specified
      or required by the Company includes a determination, specification or requirement
      from time to time.	 	18.2	 Jeder Verweis auf
      etwas, was seitens der Gesellschaft bestimmt, spezifiziert oder verlangt
      werden soll, beinhaltet jede Bestimmung, Spezifizierung oder Forderung in
      ihrer jeweils anwendbaren Fassung.
	 	 	 	 	 
	Termination of employment agreement
      dated 1/2 September 2001 	 	 Beendigung des Dienstvertrags
      vom 1./2. September 2001 
	 	 	 	 	 
	19.	The parties are in agreement that
      the employment agreement concluded between the Executive and VIAG
      Interkom Management GmbH (now: O2
      (Germany) Management GmbH), dated 1/2 September
      2001, terminated upon the expiration of 31 October 2002. The pension agreement
      concluded between the Executive and VIAG Interkom Management GmbH (now:
      O2 (Germany) Management GmbH), dated 2 September 2001 shall continue
      to apply in accordance with Art. 6.1 of this agreement and in accordance
      with Annex 1 to this agreement.	 	19.	Die Parteien sind sich einig, dass
      der Dienstvertrag zwischen dem Geschäftsführer und der VIAG Interkom
      Management GmbH (jetzt: O2 (Germany) Management GmbH) vom 1./2.
      September 2001 mit Ablauf des 31. Oktober 2002 geendet hat. Die Ruhegeldvereinbarung
      zwischen dem Geschäftsführer und der VIAG Interkom Management GmbH (jetzt:
      O2 (Germany) Management GmbH)
      vom 2. September 2001 findet weiterhin Anwendung, and zwar gemäß Art. 6.1
      dieses Vertrags und gemäß Annex 1 zu diesem Vertrag
	 	 	 	 	 
	Previous Agreements	 	Frühere Verträge
	 	 	 	 	 
	20.	This agreement supersedes any previous
      agreement between BT or BTWireless or VIAG Interkom Management GmbH, or
      O2 (Germany) Management GmbH or any Group Company and the Executive.
      Modifications of and/or amendments to this Agreement shall only be valid
      if made in writing. This shall also apply
      to the cancellation or amendment of the requirement of the written form.	 	20.	Dieser Vertrag ersetzt alle früheren Verträge
      zwischen BT oder BTWireless oder VIAG Interkom Management GmbH oder O2
      (Germany) Management GmbH oder jedem Gruppenunternehmen und dem Geschäftsführer.
      Änderungen oder Ergänzungen zu diesem Vertrag sind nur gültig, wenn
      sie schriftlich erfolgen. Dies gilt auch im Hinblick auf eine Beendigung
      oder Änderung des Schriftformerfordernisses.
	 	 	 	 	 
	Governing Law
      / Language	 	 Rechtswahl/Sprache

 

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	 21.1	This letter is governed by the
      laws of Germany.	 	 21.1	 Auf diesen Vertrag findet
      deutsches Recht Anwendung.
	 	 	 	 	 
	21.2	 This agreement is made in German and
      in English. In case of any discrepancies, the German version shall prevail.
      	 	 21.2	 Dieser Vertrag ist in Deutsch und
      Englisch abgefasst. Im Falle etwaiger Abweichungen
      ist die deutsche Fassung maßgeblich. 

For and on behalf of the Company/Für
  die Gesellschaft 

	 	 	 
	I have read, understood and agree to the terms
      set out in this letter. 	 	Ich habe diesen Vertrag gelesen
      und verstanden und stimme den darin enthaltenen
      Regelungen zu. 

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	ANNEX 1	 	ANNEX 1
	(Service Agreement
      between O2 (Germany) Management GmbH and Rudolf Gröger) 	 	(zum Dienstvertrag
      zwischen O2(Germany) Management GmbH und Rudolf Gröger)
      
	 	 	 	 	 
	The parties refer to
      the pension agreement between Viag Interkom Management GmbH (now: O2
      (Germany) Management GmbH) and Rudolf Gröger dated 2 September 2001
      (“Pension Agreement”). 	 	 Die Parteien nehmen
      Bezug auf die Ruhegeldvereinbarung zwischen der VIAG Interkom Management
      GmbH (jetzt: O2 (Germany) Management GmbH) und Rudolf Gröger
      vom 2. September 2001 (“Ruhegeldvereinbarung”). 
	 	 	 	 	 
	The parties are in
      agreement that clause 6 of the Pension Agreement shall read as follows:
       	 	Die Parteien sind sich
      einig, dass Ziffer 6 der Ruhegeldvereinbarung wie folgt lauten soll: 
	 	 	 	 	 
	Non-Forfeitability
      	 	Unverfallbarkeit
	 	 	 	 	 
	6.1	Derogating from Section 1and 2
      of the Occupational Pensions Act the Executive’s pension entitlement
      shall be non-forfeitable in accordance with the following provision; 
    	 	6.1	Abweichend von §§ 1 und
      2 BetrAVG ist der Ruhegeldanspruch des Geschäftsführers gemäß
      den nachfolgenden Bestimmungen unverfallbar;  
	 	 	 	 	 
	6.2	If a termination of this Agreement
      takes legal effect after three complete years of service the Executive’s
      non-forfeitable pension entitlement shall be 20% of the Relevant Remuneration
      (under paragraph 6.1 of the Service Agreement dated 31 March 2003); 
    	 	6.2	Wenn eine Beendigung dieses Vertrags
      nach drei vollen Dienstjahren wirksam wird, beträgt die unverfallbare
      Rentenanwartschaft des Geschäftsführers 20 % des Maßgeblichen
      Einkommens (gemäß § 6.1 des Dienstvertrags vom 31. März
      2003); 
	 	 	 	 	 
	6.3	If a termination of this Agreement
      takes legal effect after three or more complete years of service, the Executives
      non-forfeitable pension entitlement shall be a pension of {20% + (1.5% times
      the number of complete years continuous service in excess of three) of the
      Relevant Remuneration}, subject to a maximum benefit of 50% of the Relevant
      Remuneration.	 	6.3	Wenn eine Beendigung dieses Vertrags
      nach drei oder mehr vollen Dienstjahren wirksam wird, hat der Geschäftsführer
      eine unverfallbare Rentenanwartschaft von {20 % + (1,5 % mal die Zahl der
      vollen Jahre ununterbrochener Dienstleistungen, welche drei Jahre überschreiten)
      des Maßgeblichen Gehalts}, his zu einer Höchstgrenze von 50 %
      des Maßgeblichen Gehalts. 
	 	 	 	 	 
	6.4	On leaving the company with a 	 	 	 

  

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	 	non-forfeitable
      pension entitlement, the entitlement determined in accordance with 6.2 or
      6.3 above shall increase by 4% p.a. for the period commencing on the date
      of leaving and ending on the date of retirement. On retirement, the pension
      will be increased annually thereafter, on each anniversary of the retirement
      date, by 4%, such increase to be taken into account as fulfilling any entitlement
      arising as a consequence of Section 16 of the Occupational Pensions Act.	 	6.4	 
      Nach Ausscheiden aus der Gesellschaft mit einer unverfallbaren Rentenanwartschaft
      erhöht sich die gemäß vorstehendem 6.2 oder 6.3 ermittelte
      Anwartschaft um 4 % pro Jahr für den Zeitraum beginnend mit dem Tag
      der rechtlichen Beendigung des Anstellungsvertrags and endend mit dem Tag
      des Eintritts in die Rente. Ab
      dem Renteneintritt wird die Rente jährlich erhöht, und zwar an
      jedem Jahrestag des Renteneintrittstags, und zwar um 4 %; eine solche Erhöhung
      wird berücksichtigt als Erfüllung jeglicher Verpflichtungen, die
      gemäß § 16 BetrAVG entstehen.  
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date/Datum:
      31 March/März 2003  
	 
	

	 For
      and on behalf of the Company/Für die Gesellschaft 
	

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	SIDELETTER

        (Service
        Agreement between O2 (Germany)
        Management GmbH
        and Rudolf Gröger)

        
	 	  SIDELETTER

        (Dienstvertrag
        zwischen O2(Germany)
        Management GmbH and Rudolf Gröger)

	 	 	 	 	 	 	 
	1.

    	If
      the Executive should not be appointed as a member of the board of directors
      of mmO2 plc, the Executive’s Basic Salary under Art. 3.1 of the
      Service Agreement between O2 (Germany) Management GmbH and Rudolf
      Gröger
      shall be increased by €137,500.00, effective 1 April 2003.
	 	1.	 Falls
      eine Ernennung des Geschäftsführers zum Mitglied des Board of
      Directors der mmO2 plc nicht erfolgen sollte, wird das Grundgehalt
      des Geschäftsfuhrers gemäß Artikel 3.1 des Dienstvertrags
      zwischen O2 (Germany) Management GmbH und Rudolf Gröger
      um € 137.500,00 erhöht and zwar mit Wirkung zum 1. April 2003.
      
	 	 	 	 	 	 	 
	2.

        	If
      the Executive is appointed as a member of the board of directors of mmO2
      plc, the letter of appointment shall stipulate a bonus clause which shall
      read as follows:
 	 	2.	 Wenn
      der Geschäftsführer zum Mitglied des Board of Directors der mmO2
      plc ernannt wird, wird der Letter of Appointment eine Bonusklausel enthalten,
      die wie folgt lautet:  
	 	 	 	 	 	 	 
	 	 	“From
      1 April 2003 (the beginning of mmO2 
      plc
      fiscal year) the Executive will be eligible to participate in a discretionary
      annual bonus scheme the details of which will be determined from year to
      year by the Remuneration Committee of mmO2 plc. Under such scheme,
      the Executive shall be entitled, in addition to the Basic Salary under this
      letter of appointment, to receive 80% of the Basic Salary at target performance,
      40% at threshold performance and 120% at maximum performance. The annual
      bonus shall be based on the performance of O2 Germany at 70%
      and on mmO2 plc’s performance at 30%.”	 	 	  
	“Ab
      dem 1. April 2003 (dem Beginn des Geschäftsjahres der  
      mmO2 plc) ist der Geschäftsführer berechtigt, an einem
      dem Ermessen überlassenen jährlichen Bonusprogramm teilzunehmen,
      dessen Details jährlich von dem Remuneration Committee der mmO2
      plc festgelegt werden. Nach diesem Programm ist der Geschäftsführer
      berechtigt, zusätzlich zu seinem Grundgehalt 80 % des Grundgehalts
      bei Zielerreichung (target performance), 40 % bei Schwellenerreichung (threshold
      performance) und 120 % bei maximaler Zielerreichung (maximum 

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	 	 	 	 	 	 	performance)
      zu erhalten. Der Jahresbonus bemisst sich zu 70 % nach den Ergebnissen von
      O2   Deutschland und zu 30 % nach den Ergebnissen der
      mmO2  plc.”
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	

	 For
      and on behalf of the Company/Für die Gesellschaft 
	

  

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 Rudolf Groger

  Fasanenstrasse 42a

  85591 Vaterstetten

  Germany  

 31 March 2003 

 Dear Rudi  

 Your service on the Board of Directors of mmO2
  plc (the Company)  

 On behalf of mmO2 plc, I write to confirm various
  matters following your appointment as a Director of the Company (the Appointment).
   

 Appointment  

 1.     The Appointment
  will be on the terms set out in this letter. Your appointment as CEO of O2 (Germany)
  Management GmbH will continue in place, and is now governed by a service agreement
  dated 31 March 2003 (the German Contract). The German Contract
  became effective on 1 November 2002 , and will run in tandem with the Appointment.
  For the avoidance of doubt, the Appointment may be terminated without such event
  constituting a breach of the German Contract, or an event entitling you to terminate
  the German Contract.  

 2.     You are aware that
  the Appointment is subject to re-election when appropriate by the Company in
  a General Meeting. If the Appointment is not renewed on such re-election, you
  undertake to resign as a Director of the Company forthwith. In addition, the
  Appointment may be terminated at any time in accordance with the provisions
  of the Articles of Association of the Company, or by giving you 12 months’
  written notice of termination.  

 Duties  

 3.     During the Appointment,
  you will be required to attend (wherever practicable) the annual general meeting
  of the Company, regular and emergency Board meetings, Board “awaydays”,
  and any extraordinary general meeting of the Company. The dates and details
  of these meetings (which are generally held in the UK) will be notified to you
  as far in advance as is practicable. These duties are likely to take up around
  30 days per year, and you are aware that the German Contract releases you to
  perform these duties. It is anticipated that the annual general meeting of the
  Company shall be held in or about July each year.  

	Wellington
      Street  Slough	 	t +44 (0)1753 628 000
	Berkshire  SL1 1YP	 	f+44(0)1753 628 003
	United Kingdom	 	 
	 	 	 
	mmO2 plc  Registered
      Office   Wellington Street  Slough  Berkshire SL1 1YP Registered
      in England and Wales no. 4190833

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 Salary  

 4.     You will be entitled
  to a salary for your service as a board member of Euro 137,500.00 per annum.
  This salary, which will be subject to deduction of UK tax at source, will be
  in addition to your salary under the German Contract. For the share scheme your
  salary under the German Contract will be deemed to include your salary hereunder.
   

 In addition you will be entitled to receive a bonus
  payment according to the following provision:  

 From 1 April 2003 (the beginning of mmO2
  plc fiscal year) the Executive will be eligible to participate in a discretionary
  annual bonus scheme the details of which will be determined from year to year
  by the Remuneration Committee of mmO2 plc. Under such scheme, the
  Executive shall be entitled, in addition to the Basic Salary under this letter
  of appointment, to receive 80% of the Basic Salary at target performance, 40%
  at threshold performance and 120% at maximum performance. The annual bonus shall
  be based on the performance of O2 Germany at 70% and on mmO2
  plc’s performance at 30%.  

 For the purpose of this clause “Basic Salary”
  means the amount of € 137,500.00.  

 Expenses  

 5.     The Company shall
  reimburse you for all reasonable out of pocket expenses necessarily incurred
  in carrying out your duties. You will be required to submit any details of all
  expenses incurred to the CEO.  

 Insurance  

 6.     To the extent possible,
  the Company shall maintain appropriate director’s and officer’s liability insurance
  for your benefit during the Appointment. Such insurance may not cover claims
  in which you are directly or indirectly interested as the claimant. 

 Code of conduct  

 7.     During the period
  of the Appointment you will comply with any relevant regulations as may be issued
  by the United Kingdom Listing Authority, including its Model Code for Securities
  Transactions by Directors of Listed Companies, and such other requirements as
  the Board of Directors may from time to time specify.  

 Confidentiality and protection of the Company’s
  interests  

 8.     You must apply the
  highest standards of confidentiality, and not disclose to any person or company
  (whether during the course of the Appointment or at any time after its termination),
  any confidential information concerning the Company and any Group Companies.
  In addition, you must comply with the confidentiality and restrictive covenant
  provisions set out in the Schedule (attached to this letter).  

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 General  

 9.     On termination of
  the Appointment you will deliver to the Company all books, documents, papers
  and other property of or relating to the business of the Company or any Group
  Company which are in your possession, custody or power by virtue of your position
  as a Director of the Company.  

 10.     The Appointment
  will be governed by UK law, and relates primarily to duties to be performed
  in the UK.  

 For the purposes of this letter Group
  Company shall mean the Company any holding company
  of the Company from time to time any subsidiary of the company or of any such
  holding company from time to time shall have the meaning ascribed them by section
  736 of the Companies Act 1985 (as amended).  

 Please confirm your agreement to the above by signing
  where indicated and returning to me the enclosed duplicate of this letter and
  the Schedule.  

 I very much look forward to seeing you at the next
  Board meeting.  

 Yours sincerely 

 

 

  

 For and on behalf of mmO2 plc  

 Encl.  

 I have read and agree to the above terms regarding
  my directorship of mmO2 plc. 

  

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 THE SCHEDULE
  

  

	1.	In this Schedule:
    
	 	 	 
	 	 	(a)	effective date of
      termination means
      the date on which your Appointment terminates (for any reason);
	 	 	 	 
	 	 	(b)	in any capacity
      means on your own behalf or jointly with or on behalf
      of any person, firm or company;
	 	 	 	 
	 	 	(c)	Confidential Information
      means confidential information of any Group Company
      which would be of value to a competitor or could reasonably enable a competitor
      to obtain an unfair advantage in trading in competition with any Group Company.
      For the purposes of this Schedule it includes but is not limited to business
      and strategic plans, marketing, financial, sales and customer information;
	 	 	 	 
	 	 	(d)	Business means
      the business of the provision of mobile telephony and internet services
      (including but not limited to the provision of mobile data services).
	 	 
	2.	Since you will obtain,
      in the course of your Appointment with mmO2, trade secrets and Confidential
      Information and personal knowledge of customers and employees of mmO2 and
      other Group Companies you agree with mmO2 that you will be bound by the
      following covenants:
	 	 
	(i)	For 6 months immediately
      following the effective date of termination of the Appointment (howsoever
      arising and whether or not lawful) you will not in any capacity carry on,
      be engaged or employed or be concerned or interested in services to Deutsche
      Telekom AG or affiliated companies of Deutsche Telekom AG or Vodafone D2
      GmbH or affiliated companies of Vodafone D2 GmbH within Germany.
	 	 
	(ii)	For 12 months immediately
      following the effective date of termination of the Appointment you will
      not seek to entice away or offer engagement or employment to any designated
      employee to work for any business which competes or is about to compete
      with the Business. A designated employee is (i) an employee who is employed
      wholly or mainly as a manager or in a position above management; or (ii)
      an employee of mmO2 or any Group Company who has knowledge of trade secrets
      or Confidential Information or knowledge of and connections with or influence
      over customers of mmO2 or any Group Company; and (in both cases) with whom
      you have had personal and material dealings during the 12 months immediately
      preceding the effective date of termination of your Appointment.
	 	 
	3.	You will, at the request
      and expense of mmO2, enter into a separate agreement with any Group Company
      that mmO2 may reasonably require under the terms of which you will agree
      to be bound by restrictions corresponding to those

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	 	contained in paragraph 2(i)-(ii)
      inclusive (or such as may be appropriate in the circumstances).
	 	 
	4.	You acknowledge that the restraints
      contained in this Schedule and each of them are necessary to protect the
      legitimate interests of mmO2 and the Group Companies, and that the same
      are no wider than reasonably necessary for that purpose, and are reasonable
      as between the parties. 
	 	 
	5.	 If any of the restrictions
        contained in this Schedule shall be adjudged to be void or ineffective
        or unenforceable for whatever reason but would be adjudged to be valid
        and effective if part of the wording were deleted or the periods reduced
        or the area reduced in scope, they shall apply with such modifications
        as may be necessary to make them valid and effective.  

	 	 
	6.	For the avoidance of doubt it is
      expressly agreed that each of the sub-paragraphs (i)-(ii) in Paragraph 2
      is intended to contain separate and severable restraints and if any one
      or more of such sub-paragraphs are for any reason unenforceable in whole
      or in part, then the other sub-paragraphs shall nonetheless be and remain
      effective.
	 	 
	7.	You agree with mmO2 on its own
      behalf and on behalf of each Group Company that you will not (except as
      ordered by a court or regulatory body) communicate or divulge (or permit
      communication or divulgence) to any person or company or in any way use
      for your own purposes or for any purpose other than that of mmO2 or any
      Group Company, any trade secrets or Confidential Information of whatsoever
      nature acquired by you during your Appointment, whether relating to the
      business or affairs of any member of mmO2 or any Group Company or to persons
      with whom any member of mmO2 or any Group Company has dealings. This restriction
      shall apply both during your Appointment with mmO2 and after its cessation
      but shall cease to apply to any information which is in or comes into the
      public domain otherwise than by reason of any default by you.
	 	 
	8.	You agree that if, during either
      your Appointment with mmO2 or the period of the restrictions set out in
      2(i)-(ii) inclusive you receive an offer of employment or engagement, you
      will provide a copy of this Schedule to the offeror as soon as is reasonably
      practicable after receiving the offer and if you accept the offer you will
      inform mmO2 immediately.

 I acknowledge that my Appointment with mmO2 under
  a letter dated 31 March 2003 includes the covenants set out above and I undertake
  to observe them.  

  

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   14 September 2001

 

 

 

 mmO2 plc

 

  

 PETER ERSKINE

 

 

 SERVICE AGREEMENT

 

  
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 THIS AGREEMENT is made on    
  September 2001  

 BETWEEN  

	(1)	mmO2 plc, company
      which has its registered office at 5 Long Walk Road, Stockley Park East,
      Uxbridge, Middlesex UB11 1TT (the Company); and
	 	 
	(2)	PETER ERSKINE of Woodbridge, Bolney
      Road, Shiplake, Henley-on-Thames, Oxfordshire RG9 3NT (the Executive)

IT IS AGREED as follows:  

 DEFINITIONS  

 1.     In this Agreement
  the following expressions shall have the following meanings:  

 Board means the board of directors
  of the Company or a duly constituted committee of the board of directors; 

 BT means British Telecommunications
  plc;  

 Chairman means the Chairman of the
  Board;  

 Effective Date means the day after
  the approval by BT shareholders in general meeting of the restructuring resulting
  in the demerger of the Company (the Demerger); 

Employment means the Executive’s
  employment in accordance with the terms and conditions of this Agreement; 

 Group Company means the Company,
  any holding company of the Company and any subsidiary of the Company or of any
  such holding company (with holding company and subsidiary having the meanings
  given to them by section 736 Companies Act 1985); 

Recognised Investment Exchange has
  the meaning given to it by section 207 of the Financial Services Act 1986; and
   

 Remuneration Committee means the
  Remuneration Committee of the Board.  

 JOB DESCRIPTION
  AND DUTIES  

 1.1     The Executive is
  employed by the Company as Chief Executive Officer with effect from the Effective
  Date. The Executive’s period of continuous employment for statutory purposes
  began on 1 March 1993.  

 1.2     The Executive will
  be required to devote his full time and attention during normal working hours
  to the proper performance of his duties, together with such additional hours
  as may be reasonably required.  

  
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 1.3     The Executive shall
  comply with all directions and shall diligently perform all such duties and
  exercise all such powers as are lawfully and properly assigned to him from time
  to time by the Board. The Executive’s duties as a director of the Company or
  any other Group Company will be subject to the Articles of Association of the
  relevant company for the time being.  

 1.4     The Executive’s
  initial place of work will be Stockley Park, Uxbridge but the Company reserves
  the right (subject to clause 18.2(iii)) to ask the Executive to relocate to
  any location as may be reasonably necessary. In the event that the Executive’s
  normal place of work is relocated more than 50 miles from Stockley Park, Uxbridge
  (so that it may be necessary for him to move house), the cost of the Executive’s
  relocation will be paid by the Company.  

 1.5     The Executive may
  be required to travel on the business of the Company and other Group Companies
  anywhere within the United Kingdom or overseas.  

 BASIC ANNUAL
  SALARY  

 2.1     The Executive’s
  basic annual salary is £500,000 to become effective on Demerger (less
  such deductions as the Company is required to make), payable monthly in arrears.
  Basic salary will be inclusive of all fees and other remuneration to which the
  Executive may be or become entitled as an officer of the Company or of any other
  Group Company.  

 2.2     The Executive’s
  salary will be reviewed annually during the Employment, with the first review
  to take place in June 2002. The Company is under no obligation to increase the
  Executive’s salary following a salary review, but will not decrease it. 

 BONUS  

 3.1     The Executive will
  be eligible to participate in an annual discretionary bonus scheme, the details
  of which will be determined by the Remuneration Committee. Initially, the Bonus
  Scheme will reward the Executive for his performance and the performance of
  the Company in the previous year as determined by the Remuneration Committee,
  by providing for an annual cash bonus of up to 100% of the Executive’s basic
  annual salary, with 65% of basic annual salary being paid for on target performance.
   

 3.2     The Executive’s
  bonus in respect of the 2001/2002 financial year shall have three elements,
  as follows:  

 (a)     for the period
  up to the Demerger, the Executive’s annual bonus shall be based on his performance
  for that period and the Remuneration Committee shall have regard to the recommendations
  of BT’s remuneration committee in respect of the Executive’s performance for
  that period. The bonus attributable to that period shall be based on the Executive’s
  basic annual salary in respect of the period prior to the Demerger, with a maximum
  bonus of 75% of such salary and 50% of such salary being paid for on target
  performance;  

  
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	(b)

        	for the period after the Demerger,
      the Executive’s annual bonus shall be based on the Executive’s performance
      for that period. The bonus attributable to that period shall be based on
      the Executive’s basic annual salary stated in clause 2.1 in respect of the
      period after the Demerger, with a maximum bonus of 100% of such salary and
      65% of such salary being paid for on target performance; and
	 	 
	(c)

        	in additional to the annual bonus
      payable under (a) and (b) above, the Remuneration Committee may at its absolute
      discretion pay a bonus in respect of the Executive’s contribution to the
      successful completion of the Demerger.

 SHARE SCHEMES
   

 4.1     The Executive will
  be recommended for the following initial share awards subject to the approval
  of the Remuneration Committee:  

	4.1.1	an award of options over Company shares under
        the Share Option element of the Company’s Executive Share Portfolio with
        an aggregate exercise price equivalent to 3 x basic annual salary, to
        cliff vest after three years subject to satisfaction of performance targets
        determined by the Remuneration Committee and in accordance with the rules
        of the scheme; and  

	 	 
	4.1.2	an award of restricted shares under the Company’s
        Executive Share Portfolio, equivalent to 1 x basic annual salary, to vest
        after three years, subject to the rules of the scheme. The vesting of
        these shares will be conditional on the Executive making (within 12 months
        of Demerger) and retaining until vesting a personal investment in ordinary
        shares in the Company equal to 1 x basic annual salary; any other terms
        relating to the vesting of these shares will be determined by the Remuneration
        Committee and notified to the Executive prior to Demerger. 

4.2     Subject to clause
  4.1, the Executive may during the Employment be granted rights upon the terms
  and subject to the conditions of the rules from time to time of any profit sharing,
  share incentive, share option, bonus share or phantom option scheme operated
  by the Company or any Group Company with respect to shares in the Company or
  any Group Company.  

 PENSION AND LIFE
  ASSURANCE  

 5.1     The Executive will
  be entitled to join the Company pension scheme which it is intended will be
  established (the Scheme) subject to the terms and conditions of
  the documents governing the Scheme from time to time in force and to any Inland
  Revenue or other applicable limits. The Executive has received a separate letter
  detailing his pension provisions.  

 5.2     The Company will
  during the Employment pay for the benefit of the Executive subscriptions to
  the Company’s life assurance arrangements to provide the Executive with cover
  of 4 x basic salary.  

  
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 HEALTHCARE AND PERMANENT
  HEALTH INSURANCE  

 6.1     The Executive and his wife and any dependent
  children under the age of 18 (or 21 if still in full-time education) will be
  eligible for membership of the Company’s Healthcare Scheme subject to the terms
  of the Scheme as amended from time to time. In addition, the Executive and his
  wife will be eligible for dental cover in the UK subject to the terms of the
  scheme as amended from time to time.  

 6.2     The Executive will be eligible to participate
  in the Company’s permanent health insurance scheme subject to the consent of
  the provider and the rules of the scheme.  

 6.3     The Company may at its expense require the Executive
  to be examined by a medical practitioner of the Company’s choice. The Company
  will be entitled to receive a copy of any report produced in connection with
  any such examination and to discuss the contents of the report with the medical
  practitioner who produced it and any authorised Company doctor. Only senior
  members of the Company’s Human Resources department will receive copies of the
  report unless it becomes appropriate to refer the matter to the Board, in which
  case members of the Board will be entitled to receive a copy, the details of
  which will be required to be kept confidential by those individuals. 

 COMPANY CAR
   

 7.     The Executive will be eligible for a company
  car or the cash in lieu alternative in line with the Company’s policy for as
  long as it is Company policy to provide company cars (with the services of a
  driver for business and personal travel). Neither the car nor the cash in lieu
  alternative will constitute pensionable earnings. This policy is currently under
  review and the Executive will be notified in advance about any replacement benefit.
  Additionally, the Executive is eligible for a free fuel card for fuel for private
  use.  

 PROFESSIONAL SUBSCRIPTIONS
   

 8.     The Executive will be reimbursed subscriptions
  to professional bodies and clubs where the Chairman of the Company considers
  it to be in the Company’s interests.  

 TAX/FINANCIAL
  PLANNING  

 9.     The Company will
  meet the cost of personal tax and financial planning advice for the Executive
  up to a value of £5,000 excluding VAT, per annum for the 2001/2002 financial
  year. Thereafter, the Company agrees to meet these costs up to a maximum amount
  to be determined by the Company from time to time but the maximum value of such
  costs to be met by the Company will not be reduced below £5,000. 

  
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 EXPENSES AND TELEPHONE
  BENEFITS  

 10.1     The Company will reimburse authorised expenses
  properly incurred in the course of the Executive’s duties against receipts or
  other proof of expenditure.  

 10.2     The Company will provide the Executive with
  a mobile telephone and will reimburse the cost of the Executive’s home telephone.
  The Executive will be responsible for any income tax on the benefit. 

 HOLIDAY  

 11.1     The Executive is entitled to paid English bank
  and public holidays and to 30 days paid holiday in each year (1 April to 31
  March) or on a pro-rata basis as appropriate. Holiday may not be carried over
  to a subsequent holiday year.  

 11.2     Any outstanding leave must be taken during
  the Executive’s notice period and no payment will be made for any unused annual
  leave as at the termination of the Employment (unless the Chairman of the Company
  has not allowed outstanding holiday to be taken during the Executive’s notice
  period). If the Executive has taken more working days’ paid holiday than his
  accrued entitlement, the Company is permitted to deduct the appropriate amount
  from the Executive’s final salary instalment (which deduction shall be made
  on the basis that each day of paid holiday is equivalent to 1/260 of basic annual
  salary).  

 SICKNESS AND OTHER
  INCAPACITY  

 12.     Subject to the Executive’s compliance with the
  Company’s policy on notification and certification of periods of absence from
  work, the Executive will, if absent from work through sickness, injury or other
  incapacity, be entitled to receive sick pay of:  

	(a)	one-twelfth of basic annual salary
      for each month in the first six months; and 
	 	 
	(b)	one twenty-fourth of basic annual
      salary for each month in the next six months 

 in total in any period of two years. Such payment
  will be inclusive of any entitlement to statutory sick pay and any benefits
  payable under any Company permanent health insurance scheme. Thereafter any
  entitlement to sick pay will be subject to the terms of the Company’s permanent
  health insurance arrangements.  

 OTHER INTERESTS
   

 13.1     The Executive will promote, and not do anything
  which is harmful or conflicts with, the interests and reputation of the Company
  or any Group Company.  

 13.2     Subject to clause
  13.3, during the Employment the Executive will not (without obtaining the prior
  written consent of the Chairman) be directly or indirectly engaged, concerned
  or interested in any other business activity, trade or occupation. Notwithstanding
  this restriction, the Executive will be entitled to hold not more than two non-executive
  directorships of companies which are not in competition with the  

  

  
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 Company or any Group Company provided the Chairman
  has given his prior written consent and provided such activities do not conflict
  those of the Company or any Group Company (under clause 13.1) and do not impact
  on the Executive’s duties in clause 1.  

 13.3     Notwithstanding clause 13.2, the Executive
  may hold for investment purposes an interest (as defined by Schedule 13 Companies
  Act 1985) of up to 3 per cent in nominal value or (in the case of securities
  not having a nominal value) in number or class of securities in any class of
  securities listed or dealt in a Recognised Investment Exchange, provided that
  the Company which issued the securities does not carry on a business which is
  similar to or competitive with any business for the time being carried on by
  any company in the Group.  

 SHARE DEALING
  AND OTHER CODES OF CONDUCT
   

 14.     The Executive will
  comply with all codes of conduct adopted from time to time by the Board and
  with all applicable rules and regulations of the UK Listing Authority and any
  other relevant regulatory bodies, including the Model Code on dealings in securities.
   

 DISCIPLINARY AND GRIEVANCE
  PROCEDURE  

 15.     There is no formal
  disciplinary or grievance procedure which applies to the Executive. If the Executive
  has any grievance he may apply in writing to the Chairman of the Company who
  personally will propose a solution.  

 SUSPENSION  

	16.1	The Company may:  
	 	 
	16.1.1	  suspend the Executive if it considers
      this appropriate for up to 3 months;  
	 	 
	16.1.2	  if notice to terminate the Executive’s
      employment has been given by either the Executive or the Company, require
      the Executive to:  
	 	 
	 	(i)	 	undertake different duties or cease performing
      all duties for up to six months of the notice period; and/or 
	 	 	 	 
	 	(ii)	 	cease attending any premises of the Company
      or any Group Company for up to six months; and/or
	 	 	 	 
	 	(iii)	 	 resign with immediate effect from any offices
      the Executive holds in the Company or any Group Company (and any related
      trusteeships); and/or 
	 	 	 	 
	 	(iv)	 	refrain from any business contact with any customers,
      clients or employees of the Company or any Group Company for up to six months;
      and/or 
	 	 	 	 
	 	(v)	 	take any holiday which has accrued under clause
      11.
      

  
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 16.2     The provisions of clause 13 will remain in
  full force and effect during any period of suspension under clause 16. Any period
  of suspension under clause 16.1 will be on full basic salary and benefits. The
  duration of any period of suspension under clause 16.1.2 will count towards
  the period for which the restriction in clauses 2(i) - (iii) of the Schedule
  to this letter apply (as stated in clause 8 of the Schedule).  

 16.3     The Company may also suspend the Executive
  during any period in which the Company is conducting a disciplinary investigation
  into alleged acts or defaults by the Executive. The provisions of clause 13
  will remain in full force and effect during any period of suspension under this
  clause 16.3. Such suspension will be on full basic salary and benefits (save
  that the Executive will not be entitled to earn or be paid any bonus during
  any period of suspension unless the allegations are unfounded).  

 TERMINATION  

 17.1     Either the Company
  or the Executive may terminate the Executive’s Employment at any time by giving
  to the other 12 months’ written notice. This Agreement will terminate immediately
  without notice when the Executive reaches age 60.  

 17.2     Notwithstanding
  clause 17.1 the Company may terminate this contract without notice and without
  compensation if, after investigation, it has reason to believe that the Executive:
   

	(a)	has committed any serious or repeated breach
      of any of his obligations under this Agreement;
	 	 
	(b)	is guilty of any dishonesty or disreputable
      conduct which is likely substantially to affect the Company’s reputation;
      or
	 	 
	(c)	is guilty of any gross or serious misconduct
      or serious neglect of duty after receiving a warning; or
	 	 
	(d)	has substantially breached the Company’s policies
      or procedures; or
	 	 
	(e)	is charged with a criminal offence (other than
      a road traffic offence not subject to a custodial sentence); or
	 	 
	(f)	is disqualified from acting as a director of
      a company by order of a competent court; or 
	 	 
	(g)	 is declared bankrupt or makes any arrangement
      with or for the benefit of his creditors or has an interim order made against
      him under Part VIII of the Insolvency Act 1986 or has a county court administration
      order made against him under the County Court Act 1984; or  
	 	 
	(h)	resigns his directorship of the Company (other
      than at the explicit request of the Board). 

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This clause shall not restrict any other right the Company may have (whether at common law or otherwise) to terminate the Employment summarily. Any delay by the Company in exercising its rights under this clause shall not constitute a waiver of those rights. 

 17.3     The
  Company may also terminate the Employment by giving 12 months notice to the
  Executive if the Executive is unable (whether due to illness or otherwise) properly
  and effectively to perform his duties under this Agreement for a period or periods
  totalling (in aggregate) 9 months in any consecutive period of 12 months, provided
  that the Company will not terminate the Employment if to do so would have the
  effect of causing the Executive to forfeit any entitlement to benefit under
  the Company’s permanent health insurance arrangements. In these circumstances,
  the Company may take such steps as it considers appropriate in relation to the
  Employment including, without limitation, discontinuing salary and all other
  rights and benefits provided under this Agreement (apart from permanent health
  benefits).  

 17.4     The
  Company may, in its sole discretion, also terminate the Executive’s employment
  by giving written notice to him that it is exercising its discretion under this
  clause 17.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination
  Date). In
  such a case the Company shall be obliged to pay to the Executive a sum (the
  Payment
  in Lieu of Notice)
  equal
  to:  

	(a)

    	the
      basic annual salary which the Executive would have been entitled to receive
      under this Agreement during the notice period referred to in clause 17.1
      if notice had been given on the Termination Date (or, if notice has already
      been given, during the remainder of the notice period); and
	 	 
	(b)

    	the
      cost of contributions which would have been made by the Company towards
      the cost of retirement provision for the Executive during that period. Alternatively,
      the Company may, if it so chooses, make the contributions directly to the
      Executive’s pension arrangements to provide him with retirement benefits
      in respect of the unexpired portion of the notice period (or
      part thereof);
	 	 
	(c)

    	the
      value of any bonus payment which would have been made under clause 5. The
      payment made in respect of bonus under this clause 17.4 shall be not less
      than the amount which is equal to the bonus payment (if any) received by
      the Executive in respect of the bonus year preceding the Termination Date.
      Where the Payment in Lieu of Notice is in respect of a period which is less
      than one year, any payment in respect of bonus shall be adjusted downwards
      as applicable; and
	 	 
	(d)

        	the
      cost of the other contractual benefits which the Executive would have been
      entitled to receive during that period. Alternatively the Company may, if
      it so chooses, continue to provide those contractual benefits during that
      period.

 17.5     The
  Payment in Lieu of Notice shall be subject to such deductions as the Company
  may be required to make and shall be in full and final settlement of all claims
  the Executive may have against the Company or any Group Company (whether known
  or unknown) arising out of or in connection with the termination of 

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the Employment and the Executive’s directorship of the Company or any Group Company. The Payment in Lieu of Notice may, at the Company’s discretion, be paid as a lump sum (within 10 working days of the last day of the Employment) or in equal monthly instalments from the Termination Date until the date which is twelve months after the Termination Date (or if notice had already been served before the Termination Date, the remainder of the notice period) or if sooner, the date on which the Executive commences an alternative employment at a basic annual salary in excess of 50% of the Executive’s basic annual salary under this Agreement at the Termination Date (unless the Company elects, at its discretion, to disregard such an employment for the purposes of this clause). Any entitlement which the Executive has or may have under any share related incentive scheme shall be determined in accordance with the rules of such scheme. For the avoidance of doubt, (1) the Company is only to be taken as exercising the right given by this clause, and accordingly to be liable for the Payment in Lieu of Notice, if it gives the written notice referred to above explicitly invoking this clause; and (2) any delay or error in the Payment in Lieu of Notice shall not affect the lawfulness of a termination under this clause. 

 17.6     Upon
  termination of the Employment (whether in breach of contract or not) the Executive
  will:  

	(a)

    	at
      the Company’s request promptly resign in writing as a director of the Company
      and any Group Company. The Secretary of the Company is irrevocably authorised
      to sign letters of resignation on the Executive’s behalf if he fails to
      do so;
	 	 
	(b) 	promptly
      return to the Company any property of the Company and any Group Company
      (including any company car, keys, Company documents and any copies);
	 	 
	(c)  	immediately
      pay to the Company or any Group Company all outstanding loans or other amounts
      due or owed to the Company or any Group Company. The Executive confirms
      that, should he fail to do so, the Company is to be treated as authorised
      to deduct from any amounts due or owed to the Executive by the Company (or
      any other Group Company) a sum equal to such amounts.

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

 LIQUIDATED
  DAMAGES 

 18.1     If
  the Employment is terminated otherwise than in accordance with the terns of
  this Agreement (including, without limitation, if the Executive is constructively
  dismissed) the Company will pay to the Executive a liquidated sum calculated
  by reference to the Payment in Lieu of Notice set out in clause 17.4 (or the
  Special Payment in Lieu of Notice under clause 19.4 as appropriate) and paid
  subject to the terms of clause 17.5. In consideration for this payment the Executive
  agrees to remain bound by the post-termination restrictions in the Schedule
  to this Agreement.  

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 18.2     For
  the purpose of clause 18.1 constructive dismissal shall include (but not be
  limited to):  

	(i)

    	the
      Executive’s removal from the office of director of the Company (other than
      by retirement by rotation pursuant to the Articles of Association of the
      Company) or from the position of Chief Executive Officer of the Company
      during the Employment without his consent on grounds insufficient to justify
      such removal; or
	 	 
	(ii)	the
      alteration by the Company without the Executive’s consent of his duties
      and responsibilities so that the Executive’s overall status in the Company
      is materially reduced; or
	 	 
	(iii)	 
      the relocation by the Company without the Executive’s consent of his normal
      place of work to a location which is more than 50 miles from Stockley Park,
      Uxbridge.  

 CHANGE
  OF CONTROL 

 19.1    For
  the purposes of this clause 19.1: 

 Control
  means
  the power of any person whether alone or together with any person acting in
  concert with him to control the composition of the board of directors of the
  Company or otherwise to secure whether by means of the holding of shares or
  the possession of voting power in relation to the Company or any other body
  corporate or by virtue of any powers conferred by the articles of association
  or any other document or agreement regulating the Company or any other body
  corporate that the affairs of the Company are conducted with the wishes of that
  person; and  

 Change
  of Control means:
  (i) the disposal of all or substantially all of the Company; or (ii) the acquisition
  by any person whether alone or together with any person acting in concert with
  him of Control of the Company; but shall not mean an acquisition of Control
  of the Company by another company the shares of which, immediately following
  such an acquisition, are all held by the holders of the shares of the Company
  immediately prior to such an acquisition in materially the same proportion as
  they held shares in the Company immediately prior to such an acquisition PROVIDED
  THAT the
  following shall not constitute a Change of Control:  

	(a)

    	the
      demerger to BT shareholders of shares in any company which constitutes or
      becomes the holding company of the BT Wireless Business; and
	 	 
	(b)  	in
      the event of a partial sale by BT of the BT Wireless Business (including,
      but not limited to, an initial public offering of shares in the holding
      company of the BT
 Wireless
      Business), the subsequent reduction below 50% of BT’s shareholding in the
      holding company of the BT Wireless Business.

 19.2     If
  a Change of Control occurs the period of notice which the Company or the Executive
  is required to give to the other to terminate the employment in accordance with
  clause 17.1 will be unaffected and will remain as 12 months.  

  
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 19.3     For the period
  of 12 months following a Change of Control clause 17.4 shall be replaced by
  clause 19.4 unless clause 17.4 has already been operated prior to the Change
  of Control.  

 19.4     The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to the Executive that it is exercising its discretion under this
  clause 19.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination Date). In such a case the Company
  shall be obliged within 10 working days after the Termination Date to pay to
  the Executive a sum (the Special Payment in Lieu of Notice) equal
  to:  

	(a)	the basic annual salary which the
      Executive would have been entitled to receive under the terms of this Agreement
      during the notice period referred to in clause 17.1 if notice had been given
      on the Termination Date (or, if notice has already been given, during the
      remainder of the notice period);
	 	 
	(b)	the cost of contributions which
      would have been made by the Company towards the cost of retirement provision
      for the Executive during that period. Alternatively, the Company may, if
      it so chooses, make the contributions directly to the Executive’s pension
      arrangements to provide the Executive with retirement benefits in respect
      of the unexpired portion of the Executive’s notice period (or part thereof);
	 	 
	(c)	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively, the Company may, if it so chooses, continue
      to provide those contractual benefits during that period; and
	 	 
	(d)	the value of the Executive’s bonus
      (which shall be deemed to be the maximum achievable in respect of the financial
      year in which the Change of Control occurs). Where the Special Payment in
      Lieu of Notice is in respect of a period which is less than one year, any
      payment in respect of bonus shall be adjusted downwards as applicable based
      on the achievement of maximum bonus; and
	 	 
	(e)	 the value of share scheme rights,
      computed in accordance with clause 19.5.
	 	 
	19.5     For
      the purposes of clause 19.4(e), the value of share scheme rights shall be
      determined as A minus B where: 
	 	 
	A	 is the aggregate value, on the
      date of the Change of Control, of the Executive’s outstanding share awards
      and share options, without regard to any performance condition to which
      the awards and options are or may be subject; and 
	 	 
	B	is the aggregate value, on the
      date of the Change of Control, of those share awards and share options which
      were exercised or exercisable by the Executive between the date of the Change
      of Control and the Termination Date (as reduced by the operation of any
      applicable performance condition). 

  
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 For the purposes of this clause 19.5, the Executive
  may be required to waive any share awards or share options which, in accordance
  with their terms, may vest or become exercisable after the Termination Date.
   

 19.6     The Special Payment
  in Lieu of Notice shall be subject to such deductions as the Company may be
  required to make and shall be in full and final settlement of all claims the
  Executive may have against the Company or any Group Company (whether known or
  unknown) arising out of or in connection with the termination of the Employment
  and the Executive’s directorship of the Company or any Group Company. For the
  avoidance of doubt, (1) the Company is only to be taken as exercising the right
  given by this clause, and accordingly to be liable for the Special Payment in
  Lieu of Notice, if it gives the written notice referred to above explicitly
  invoking this clause; and (2) any delay or error in the Special Payment in Lieu
  of Notice shall not affect the lawfulness of a termination under this clause.
   

 MITIGATION  

 20.     For the purposes
  of paragraph 19 above, and not in any other circumstances, the payments set
  out (being payments made in accordance with this Agreement) will not be subject
  to mitigation, and will be paid irrespective of whether the Executive obtains
  alternative employment within the applicable notice period.  

 INTELLECTUAL PROPERTY
   

 21.     It shall be part
  of the Executive’s normal duties (whether or not during normal working hours
  and whether or not at the Executive’s normal place of work) at all times to
  consider in what manner and by what new methods or devices the products, services,
  processes, equipment or systems of the Company with which he is concerned or
  for which he is responsible might be improved and to originate designs (whether
  registrable or not) or patentable work or other work in which copyright may
  subsist. Accordingly:  

	(a)

      	the Executive shall forthwith disclose
      full details of the same in confidence to the Company and shall regard himself
      in relation thereto as a trustee for the Company;
	 	 
	(b)	all intellectual property rights
      in such designs or work shall vest absolutely in the Company which shall
      be entitled, so far as the law permits, to the exclusive use thereof,
	 	 
	(c)	notwithstanding (b) above, the
      Executive shall at any time assign to the Company the copyright (by way
      of assignment of copyright) and other intellectual property rights, if any,
      in respect of all works written originated conceived or made by the Executive
      (except only those works written originated conceived or made by the Executive
      wholly outside his normal working hours hereunder and wholly unconnected
      with his service hereunder) during the continuance of the Employment; and
	 	 
	(d)	the Executive agrees and undertakes
      that at any time during or after the termination of the Employment he will
      execute such deeds or documents and

  
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	 	do all such acts and things as
      the Company may deem necessary or desirable to substantiate its rights in
      respect of the matters referred to above including for the purpose of obtaining
      letters patent or other privileges in all such countries as the Company
      may require.  

RESTRICTIONS AND CONFIDENTIALITY
   

 22.     The Executive will
  be bound by the provisions of the covenants set out in the Schedule to this
  Agreement.  

 NOTICES  

 23.     Any notice or document
  may be served on the Executive personally or by posting it to his last known
  address or on the Company addressed to the Secretary as its registered office
  and if sent by first class post will be deemed to have been received with 24
  hours of posting.  

 THE CONTRACT
  (RIGHTS OF THIRD
  PARTIES) ACT  

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

 MISCELLANEOUS
   

 25.1     A reference to
  something being determined, specified or required by the Company includes a
  determination, specification or requirement from time to time.  

 25.2     This Agreement
  supersedes any previous agreement between BT or any BT Group Company or the
  Company or any Group Company and the Executive, whether oral or in writing.
   

 25.3     This Agreement
  is governed by and shall be construed in accordance with the laws of England.
  The parties to this Agreement submit to the non-exclusive jurisdiction of the
  English courts.  

  

	SIGNED as a DEED and
    	)	
	DELIVERED by	)
	PETER ERSKINE	)
	in the presence of: 	)
	 	 
	 	 	 
	 	 	 
	SIGNED for and on behalf of	)

      	
	mmO2 plc 	)
	

        
	 

  
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 THE SCHEDULE 

	1.	 In this Schedule:
	 	 	 	 
	 	 	(a)	effective date of termination
      has the meaning given to it by Section 97(1) of the Employment Rights
      Act 1996;
	 	 	 	 
	 	 	(b)	in any capacity means
      on the Executive’s own behalf or jointly with or on behalf of any person,
      firm or company;
	 	 	 	 
	 	 	(c)	Confidential Information
      means confidential information of any Group Company which would
      be of value to a competitor or could reasonably enable a competitor to obtain
      an unfair advantage in trading in competition with any Group Company. For
      the purposes of this Schedule it includes but is not limited to business
      and strategic plans, marketing, financial, sales and customer information;
	 	 	 	 
	 	 	(d)	Business means
      the business of the provision of mobile telephony and Internet services
      (including but not limited to the provision of mobile data services).
	 	 	 	 
	2.	Since the Executive
      will obtain in the course of the Employment trade secrets and Confidential
      Information and personal knowledge of customers and employees of the Company
      and other Group Companies, the Executive agrees to be bound by the following
      covenants:
	 	 	 	 
	(i)	For 12 months immediately following
      the effective date of termination of the Employment (howsoever arising and
      whether or not lawful) the Executive will not in any capacity carry on,
      be engaged or employed or be concerned or interested in any business, or
      take steps to set up, promote or facilitate the establishment of any business
      which competes or is about to compete with the parts of the Business with
      which the Executive has been actively involved at any time during the period
      of 24 months prior to the effective date of termination of the Employment,
      within:
	 	 	 	 
	 	 	(a)	the United Kingdom;
	 	 	 	 
	 	 	(b)	Germany, Netherlands, Ireland and
      France; or
	 	 	 	 
	 	 	(c)	any other country to which the
      Company expands its Business and in respect of which the Executive had personal
      and material dealings.
	 	 	 	 
	(ii)	For 12 months immediately following
      the effective date of termination of the Employment the Executive will not
      in any capacity for the purposes of any business which competes or is about
      to compete with the Business canvass, solicit, deal with or accept business
      or custom from any person, firm or company:

  
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	 	 	(a)	that was a business customer of
      the Company or any Group Company at any time during the 12 months immediately
      preceding the effective date of termination of the Employment (the 12
      month Period); and
	 	 	 	 
	 	 	(b)	with whom or with which the Executive
      in the course of the Employment personally had material dealings during
      the 12 month Period.
	 	 	 	 
	(iii)	For 12 months immediately following
      the effective date of termination of the Employment the Executive will not
      seek to entice away or offer engagement or employment to any designated
      employee to work for any business which competes or is about to compete
      with the Business. A designated employee is (i) an employee who is employed
      wholly or mainly as a manager or in a position above management; or (ii)
      an employee of the Company or any Group Company who has knowledge of trade
      secrets or Confidential Information or knowledge of and connections with
      or influence over customers of the Company or any Group Company; and (in
      both cases) with whom the Executive had personal and material dealings during
      the 12 months immediately preceding the effective date of termination of
      the Employment. 
	 	 
	(iv)	Any reference to “engagement
      or employment” in this clause means engagement or employment whether
      under a contract or otherwise and if under a contract includes a contract
      of employment, or a contract for services or any other form of contract
      and the terms “engage” and “employ” and their derivatives
      shall be construed in accordance with this definition.
	 	 
	3.	The Executive will,
      at the request and expense of the Company, enter into a separate agreement
      with any Group Company that the Company may reasonably require under the
      terms of which the Executive will agree to be bound by restrictions corresponding
      to those contained in clause 2(i)-(iii) inclusive (or such as may be appropriate
      in the circumstances).
	 	 
	4.	The Executive acknowledges that
      the restraints contained in this Schedule and each of them are necessary
      to protect the legitimate interests of the Company and the Group Companies,
      and that the same are no wider than reasonably necessary for that purpose,
      and are reasonable as between the parties to this Agreement.
	 	 
	5.	If any of the restrictions contained
      in this Schedule shall be adjudged to be void or ineffective or unenforceable
      for whatever reason but would be adjudged to be valid and effective if part
      of the wording were deleted or the periods reduced or the area reduced in
      scope, they shall apply with such modifications as may be necessary to make
      them valid and effective.
	 	 
	6.	For the avoidance of doubt it is
      expressly agreed that each of the sub-clauses (i)-(iii) in Clause 2 is intended
      to contain separate and severable restraints and if any one or more of such
      sub-clauses are for any reason unenforceable in whole or in part, then the
      other sub-clauses shall nonetheless be and remain effective.

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	7.	The
      Executive agrees with the Company on its own behalf and on behalf of each
      Group Company that he will not (except as ordered by a court or regulatory
      body) communicate or divulge (or permit communication or divulgence) to
      any person or company or in any way use for his own purposes or for any
      purpose other than that of the Company or any Group Company, any trade secrets
      or Confidential Information of whatsoever nature acquired by the Executive
      during the Employment, whether relating to the business or affairs of any
      member of the Company or any Group Company or to persons with whom any member
      of the Company or any Group Company has dealings. This restriction shall
      apply both during the Employment with the Company and after its cessation
      but shall cease to apply to any information which is in or comes into the
      public domain otherwise than by reason of any default by the Executive.
	 	 
	8.	The
      period during which the restrictions referred to in clauses 2(i)-(iii) inclusive
      shall apply following the effective date of termination shall be reduced
      by the amount of time during which, if at all, the Company suspends the
      Executive under the provisions of clause 16.2.
	 	 
	9.

    	The
      Executive agrees that if, during either the Employment with the Company
      or the period of the restrictions set out in 2(i)-(iii) inclusive he receives
      an offer of employment or engagement, the Executive will provide a copy
      of this Schedule to the offeror as soon as is reasonably practicable after
      receiving the offer and if he accepts the offer he will inform the Company
      immediately.

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 14 September
  2001

 

 

 mmO2
  plc

 

 

 DAVID
  FINCH 

 

 

	 	 
	 
	 	 	 
	 	SERVICE
      AGREEMENT 	 
	 	 	 
	 	
	 

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 THIS AGREEMENT
  is made on 14 September 2001

BETWEEN 

	(1)	mmO2
      plc, a
      company which has its registered office at 5 Long Walk Road, Stockley Park East, Uxbridge, Middlesex, UB11 ITT (the Company
      ); and
	 	 
	(2)	DAVID
      FINCH of 59 
      Ridgway
      Place, Wimbledon, London SW19
      4SP  (the
      Executive)

IT IS AGREED as follows: 

 DEFINITIONS
   

 1.     In
  this Agreement the following expressions shall have the following meanings:
  

 Board
  means
  the board of directors of the Company or a duly constituted committee of the
  board of directors; 

 BT
  means
  British Telecommunications plc; 

 CEO
  means
  the Chief Executive Officer of the Company or his designated nominee; 

 Chairman
  means
  the Chairman of the Board; 

 Effective
  Date means
  the date of admission of the Company’s shares to trading on the London Stock
  Exchange (anticipated to be 19 November
  2001) (the Demerger
  );

 Employment
  means
  the Executive’s employment in accordance with the terms and conditions of this
  Agreement; 

 Group
  Company means
  the Company, any holding company of the Company and any subsidiary of the Company
  or of any such holding company (with holding company and subsidiary having the
  meanings given, to them by section
  736
  Companies
  Act  1985);

 Recognised
  Investment Exchange has
  the meaning given to it by section 207 of the Financial Services Act
  1986;
  and 

 Remuneration
  Committee means
  the Remuneration Committee of the Board. 

 JOB
  DESCRIPTION AND DUTIES  

 1.1     The
  Executive is employed by the Company as Chief Financial Officer with effect
  from the Effective Date. The Executive’s period of continuous employment for
  statutory purposes began on 1 August 2001. 

  
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 1.2     The Executive will
  be required to devote his full time and attention during normal working hours
  to the proper performance of his duties, together with such additional hours
  as may be reasonably required. 

 1.3     The Executive shall
  comply with all directions and shall diligently perform all such duties and
  exercise all such powers as are lawfully and properly assigned to him from time
  to time by the Board. The Executive shall be a director of the Company and his
  duties as a director of the Company or any other Group Company will be subject
  to the Articles of Association of the relevant company for the time being. 

 1.4     The Executive will
  perform such duties for the Company at such locations in the United Kingdom
  or overseas as the CEO may specify. The Executive’s initial place of work will
  be Stockley Park, Uxbridge but the Company reserves the right to ask the Executive
  to relocate to any location as may be reasonably necessary. In the event that
  the Executive’s normal place of work is relocated more than 30 miles from Stockley
  Park, Uxbridge (so that it may be necessary for him to move house), the cost
  of the Executive’s relocation will be paid by the Company or BT. 

 1.4     The Executive may
  be required to travel on the business of the Company and other Group Companies
  anywhere within the United Kingdom or overseas. 

 BASIC ANNUAL
  SALARY 

 2.1     The Executive’s
  basic annual salary is £350,000 (less such deductions as the Company is
  required to make), payable monthly in arrears. Basic salary will be inclusive
  of all fees and other remuneration to which the Executive may be or become entitled
  as an officer of the Company or of any other Group Company. 

 2.2     The Executive’s
  salary will be reviewed annually during the Employment, with the first review
  to take place in June 2002. 

 BONUS 

 3.     The Executive will
  be eligible to participate in an annual bonus scheme, the details of which will
  be determined by the Remuneration Committee. Initially, the Bonus Scheme will
  reward the Executive for his performance and the performance of the Company
  in the previous year as determined by the Remuneration Committee, by providing
  for an annual cash bonus of up to 75% of the Executive’s basic annual salary,
  with 50% of basic annual salary being paid for on target performance. 

 SHARE SCHEMES
  

	4.1 	As soon as possible
  after the Demerger, the Executive will be recommended for the following initial
  share awards subject to the approval of the Remuneration Committee:
	 	 
	4.1.1 	an award of options over Company shares under
      the Share Option element of the Company’s Executive Share Portfolio
      with an aggregate exercise price equivalent to 3 x basic annual salary,
      to cliff vest after three years subject to 
	 	 

  
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	 	satisfaction of performance targets determined
      by the Remuneration Committee and in accordance with the rules of the scheme;
      and 
	 	 
	4.1.2	an award of restricted shares under the Company’s
      Executive Share Portfolio, equivalent to 1.5 x basic annual salary, to vest
      in three equal tranches on the first and second and third anniversaries
      of the date of grant. The vesting of the third tranche on the third anniversary
      of the date of grant will be conditional on the Executive making (within
      12 months of Demerger) and retaining until vesting a personal investment
      in ordinary shares in the Company equal to 0.5 x basic annual salary; any
      other terms relating to the vesting of this tranche will be determined by
      the Remuneration Committee and notified to the Executive prior to Demerger.
      

4.2     It is the Company’s
  intention to make annual grants of share awards and it is currently expected
  that these awards will be granted under the Share Option element of the Company’s
  Share Portfolio referred to in paragraph 4.1.1 above. The level of awards will
  be decided by the Company’s Remuneration Committee, but it is anticipated that
  the Executive will be recommended for an award of options over Company shares
  with an aggregate exercise price equivalent to 3 x basic annual salary per annum
  subject to satisfaction of performance targets determined by the Company’s Remuneration
  Committee and in accordance with the rules of the scheme. 

 PENSION AND LIFE
  ASSURANCE 

 5.1     The Executive will
  be entitled to join the Company pension scheme which will be established (the
  Scheme),  subject to the terms and conditions of the documents
  governing the Scheme from time to time in force and to any Inland Revenue or
  other applicable limits. The Company will during the Employment replicate the
  Executive’s existing pension benefits (whether approved or unapproved) with
  Exel Plc. The Executive will receive a separate letter detailing the pension
  provisions, and terms of this letter will form part of this Agreement. 

 5.2     The Company will
  during the Employment pay for the benefit of the Executive subscriptions to
  the Company’s life assurance arrangements to provide the Executive with cover
  of 4 x basic salary. 

 HEALTHCARE AND PERMANENT
  HEALTH INSURANCE  

 6.1     The Executive and
  his wife and any dependent children under the age of 18 (or 21 if still in full-time
  education) will be eligible for membership of the Company’s Healthcare Scheme
  which covers some of the cost of medical treatment in the UK subject to the
  terms of the Scheme as amended from time to time. As an alternate, and subject
  to the consent of the current provider of this cover, the Company will pay an
  appropriate premium to continue the Executive’s current cover to the extent
  that the premium is not more than that payable under the Company’s scheme. 

 6.2     The Executive will
  be eligible to participate in the Company’s permanent health insurance scheme
  subject to the consent of the provider and the rules of the scheme. 

  
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 6.3     The Company may
  at its expense require the Executive to be examined by a medical practitioner
  of the Company’s choice. The persons within the Company to whom a copy of any
  medical report may be made available shall be determined on a case by case basis.
  

 COMPANY CAR
   

 7.     The Executive will
  be eligible for a company car or the cash in lieu alternative (Cash Alternative)
  in line with the Company’s policy. Neither the car nor the Cash Alternative
  will constitute pensionable earnings. Additionally, the Executive is eligible
  for a free fuel card for fuel for private use. The car policy is currently under
  review and the Executive will be notified in advance about any replacement benefit
  which shall be calculated so as to adequately compensate the Executive for loss
  of his company car or the Cash Alternative. 

 PROFESSIONAL SUBSCRIPTIONS
   

 8.     The Executive will
  be reimbursed subscriptions to professional bodies where the  CEO
  considers it to be in the Company’s interests. 

 TAX/FINANCIAL
  PLANNING  

 9.     The Company will
  meet the cost of personal tax and financial planning advice for the Executive
  up to a value of £5,000 excluding VAT per annum for the 2001/2002 financial
  year. 

 EXPENSES 

 10.     The Company will
  reimburse authorised expenses properly incurred in the course of the Executive’s
  duties against receipts or other proof of expenditure. 

 HOLIDAY  

 11.1    The Executive is entitled
  to paid English bank and public holidays and to 25 days paid holiday in each
  year (1 April to 31 March) or on a pro-rata basis as appropriate, rising to
  30 days on the date which is five years after the date of commencement of your
  employment with BT. Holiday may not be carried over to a subsequent holiday
  year. 

 11.2    Any outstanding
  leave must be taken during the Executive’s notice period and no payment will
  be made for any unused annual leave as at the termination of the Employment
  (unless the CEO has not allowed outstanding holiday to be taken during the Executive’s
  notice period). If the Executive has taken more working days’ paid holiday than
  his accrued entitlement, the Company is permitted to deduct the appropriate
  amount from the Executive’s final salary instalment (which deduction shall be
  made on the basis that each day of paid holiday is equivalent to 1/260 of basic
  annual salary). 

  
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 SICKNESS AND OTHER
  INCAPACITY 

 12.     Subject to the
  Executive’s compliance with the Company’s policy on notification and certification
  of periods of absence from work, the Executive will, if absent from work through
  sickness, injury or other incapacity, be entitled to receive sick pay of: 

	(a)	one-twelfth of basic annual salary
      for each month in the first six months; and
	 	 
	(b)	one twenty-fourth of basic annual
      salary for each month in the next six months 

 in total in any period of two years. Such payment
  will be inclusive of any entitlement to statutory sick pay and any benefits
  payable under any Company permanent health insurance scheme. Thereafter any
  entitlement to sick pay will be subject to the terms of the Company’s permanent
  health insurance arrangements. 

 OTHER INTERESTS
   

 13.1    The Executive
  will promote, and not do anything which is harmful or conflicts with, the interests
  and reputation of the Company or any Group Company. 

 13.2    During the Executive’s
  employment with the Company, the Executive will not without obtaining the written
  consent of the CEO of the Company: 

	(a)	work for any other person, business
      organisation or company; or
	 	 
	(b)	hold more than 3% of the issued
      share capital in any business or company that is or is likely to complete
      with the business of the Company. 

 SHARE DEALING
  AND OTHER CODES OF CONDUCT
   

 14.     The Executive will
  comply with all codes of conduct adopted from time to time by the Board and
  with all applicable rules and regulations of the UK Listing Authority and any
  other relevant regulatory bodies, including the Model Code on dealings in securities.
  

 DISCIPLINARY AND GRIEVANCE
  PROCEDURE  

 15.     There is no formal
  disciplinary or grievance procedure which applies to the Executive. If the Executive
  has any grievance he may apply in writing to the CEO who personally will propose
  a solution or refer the matter to the Chairman. 

 SUSPENSION  

	16.1	The Company may:
	 	 
	16.1.1	suspend the Executive if it considers this appropriate
      for up to 3 months;
	 	 
	16.1.2	if notice to terminate the Executive’s employment
      has been given by either the Executive or the Company, require the Executive
      to:

  
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	 	 	(i)	undertake different duties or cease performing
      all duties for up to six months of the notice period; and/or
	 	 	 	 
	 	 	(ii)	cease attending any premises of the Company
      or any Group Company for up to six months; and/or
	 	 	 	 
	 	 	(iii)	resign with immediate effect from any offices
      the Executive holds in the Company or any Group Company (and any related
      trusteeships); and/or
	 	 	 	 
	 	 	(iv)	refrain from any business contact with any customers,
      clients or employees of the Company or any Group Company for up to six months;
      and/or
	 	 	 	 
	 	 	(v)	take any holiday which has accrued under clause
      11.

16.2     The provisions
  of clause 13 will remain in full force and effect during any period of suspension
  under clause 16. Any period of suspension under clause 16 will be on full basic
  salary and benefits. The duration of any period of suspension under clause
  16.1.2 will count towards the period for which the restriction in clauses 2(i)
  – (iii) of the Schedule to this letter apply (as stated in clause 8 of
  the Schedule). 

16.3     The Company may
  also suspend you during any period in which the Company is conducting a disciplinary
  investigation into alleged acts or defaults by you. The provisions of clause
  13 will remain in full force and effect during any period of suspension under
  this clause 16.3. Such suspension will be on full basic salary and benefits
  (save that you will not be entitled to earn or be paid any bonus during any
  period of suspension unless the allegations are unfounded). 

TERMINATION  

17.1    Either the Company
  or the Executive may terminate the Executive’s Employment at any time by giving
  to the other 12 months’ written notice. This Agreement will terminate immediately
  without notice when the Executive reaches age 60. 

17.2    Notwithstanding
  clause 17.1 the Company may terminate this contract without notice and without
  compensation if it has reason to believe that the Executive:

	(a)	is guilty of any dishonesty or disreputable
      conduct which is likely substantially to affect the Company’s reputation;
      or
	 	 
	(b)	is guilty of any gross or serious misconduct
      or serious neglect of duty after receiving a warning; or
	 	 
	(c)	has committed a serious breach of any of the
      Company’s policies or procedures which have been notified to and which apply
      to the Executive.

 Any delay by the Company in exercising its rights
  under this clause shall not constitute a waiver
  of those rights.

  
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17.3    The Company may also
  terminate the Employment by giving 12 months’ notice to the Executive if the
  Executive is unable (whether due to illness or otherwise) properly and effectively
  to perform his duties under this Agreement for a period or periods totalling
  (in aggregate) 9 months in any consecutive period of 12 months, provided that
  the Company will not terminate the Employment if to do so would have the effect
  of causing the Executive to forfeit any entitlement to benefit under the Company’s
  permanent health insurance arrangements. In these circumstances, the Company
  may take such steps as it considers appropriate in relation to the Employment
  including, without limitation, discontinuing salary and all other rights and
  benefits provided under this Agreement (apart from permanent health benefits).
  

17.4     The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to him that it is exercising its discretion under this clause
  17.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination Date). In such a case the Company
  shall be obliged to pay to the Executive a sum (the Payment in Lieu of
  Notice) equal to: 

	(a)	the basic annual salary which
      the Executive would have been entitled to receive under this Agreement during
      the notice period referred to in clause 17.1 if notice had been given on
      the Termination Date (or, if notice has already been given, during the remainder
      of the notice period); and 
	 	 
	(b)	the cost of contributions which
      would have been made by the Company towards the cost of retirement provision
      for the Executive during that period. Alternatively, the Company may, if
      it so chooses, make the contributions directly to the Executive’s pension
      arrangements to provide him with retirement benefits in respect of the unexpired
      portion of the notice period (or part thereof);
	 	 
	(c)	the value of any bonus payment
      which would have been made under clause
      3. The payment made in respect of bonus under this clause 17.4 shall be
      not less than the amount which is equal to the bonus payment (if any) received
      by the Executive in respect of the bonus year preceding the Termination
      Date. Where the Payment in Lieu of Notice is in respect of a period which
      is less than one year, any payment in respect of bonus shall be adjusted
      downwards as applicable; and
	 	 
	(d)	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively the Company may, if it so chooses, continue to
      provide those contractual benefits during that period.

 17.5    The Payment in Lieu
  of Notice shall be subject to such deductions as the Company may be required
  to make and shall be in full and final settlement of all claims the Executive
  may have against the Company or any Group Company (whether known or unknown)
  arising out of or in connection with the termination of the Employment and the
  Executive’s directorship of the Company or any Group Company. The Payment
  in Lieu of Notice may, at the Company’s discretion, be paid as a lump
  sum (within 10 working days of the last day of the Employment) or in equal monthly
  instalments from the Termination Date until the date which is twelve months
  after the Termination Date (or if notice had already been served before the

  
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 Termination Date, the remainder of the notice period)
  or if sooner, the date on which the Executive commences alternative employment.
  Any entitlement which the Executive has or may have under any share related
  incentive scheme shall be determined in accordance with the rules of such scheme.
  For the avoidance of doubt, (1) the Company is only to be taken as exercising
  the right given by this clause, and accordingly to be liable for the Payment
  in Lieu of Notice, if it gives the written notice referred to above explicitly
  invoking this clause; and (2) any delay or error in the Payment in Lieu of Notice
  shall not affect the lawfulness of a termination under this clause. 

 17.6     Upon termination
  of the Employment the Executive will at the Company’s request promptly
  resign in writing as a director of the Company and any Group Company and will
  promptly return to the Company any property of the Company and any Group Company.
  The Secretary of the Company is irrevocably authorised to sign letters of resignation
  on the Executive’s behalf if he fails to do so. 

 LIQUIDATED DAMAGES
   

 18.1     If the Employment
  is terminated otherwise than in accordance with the terms of this Agreement
  (including, without limitation, if the Executive is constructively dismissed)
  the Company will pay to the Executive a liquidated sum calculated by reference
  to the Payment in Lieu of Notice set out in clause 17.4 (or clause 19.4 as appropriate)
  and paid subject to the terms of clause 17.5. The liquidated sum will be subject
  to such deductions as the Company may be required to make and will be in full
  and final settlement of any claims which the Executive has or may have against
  the company or any other Group Company arising out of or in connection with
  the Executive’s employment or its termination. In consideration for this payment
  the Executive agrees to remain bound by the post-termination restrictions in
  the Schedule to this Agreement. 

18.2    For the purpose
  of clause 18.1 constructive dismissal shall include (but not be limited to):
  

	(i)	the Executive’s removal from the
      office of director of the Company (other than by retirement by rotation
      pursuant to the Articles of Association of the Company) or from the position
      of Chief Financial Officer of the Company during the Employment without
      his consent on grounds insufficient to justify such removal; or 
	 	 
	(ii)	the alteration by the Company without
      the Executive’s consent of his duties and responsibilities so that
      the Executive’s overall status in the Company is materially reduced;
      or 
	 	 
	(iii)	  the relocation by the Company
      without the Executive’s consent of his normal place of work to a location
      which is more than 30 miles from Stockley Park, Uxbridge.  

 CHANGE OF CONTROL
   

 19.1    For the purposes
  of this clause 19.1: 

  
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 Control means the power of any person
  whether alone or together with any person acting in concert with him to control
  the composition of the board of directors of the Company or otherwise to secure
  whether by means of the holding of shares or the possession of voting power
  in relation to the Company or any other body corporate or by virtue of any powers
  conferred by the articles of association or any other document or agreement
  regulating the Company or any other body corporate that the affairs of the Company
  are conducted with the wishes of that person; and 

 Change of Control means: (i) the
  disposal of all or substantially all of the Company; or (ii) the acquisition
  by any person whether alone or together with any person acting in concert with
  him of Control of the Company; but shall not mean an acquisition of Control
  of the Company by another company the shares of which, immediately following
  such an acquisition, are all held by the holders of the shares of the Company
  immediately prior to such an acquisition in materially the same proportion as
  they held shares in the Company immediately prior to such an acquisition. 

 19.2    If a Change of
  Control occurs the period of notice which the Company or the Executive is required
  to give to the other to terminate the employment in accordance with clause 17.1
  will be unaffected and will remain as 12 months. 

 19.3    For the period
  of 12 months following a Change of Control clause 17.4 shall be replaced by
  clause 19.4 unless clause 17.4 has already been operated prior to the Change
  of Control. 

 19.4    The Company may,
  in its sole discretion, also terminate the Executive’s employment by giving
  written notice to the Executive that it is exercising its discretion under this
  clause 19.4 to terminate the Employment with effect from such date as is specified
  in the notice (the Termination Date). In such a case the Company
  shall be obliged within 10 working days after the Termination Date to pay to
  the Executive a sum (the Payment in Lieu of Notice) equal to:
  

	(a)	the basic annual salary which the
      Executive would have been entitled to receive under the terms of this Agreement
      during the notice period referred to in clause 17.1 if notice had been given
      on the Termination Date (or, if notice has already been given, during the
      remainder of the notice period); 
	 	 
	(b)	the cost of contributions which
      would have been made by the Company towards the cost of retirement provision
      for the Executive during that period. Alternatively, the Company may, if
      it so chooses, make the contributions directly to the Executive’s
      pension arrangements to provide the Executive with retirement benefits in
      respect of the unexpired portion of the Executive’s notice period
      (or part thereof);
	 	 
	(c)	the cost of the other contractual
      benefits which the Executive would have been entitled to receive during
      that period. Alternatively, the Company may, if it so chooses, continue
      to provide those contractual benefits during that period; and
	 	 
	(d)	the value of the Executive’s
      bonus (which shall be deemed to be the maximum achievable in respect of
      the financial year in which the Change of Control occurs). Where the Payment
      in Lieu of Notice is in respect of a period which

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	 	is less
      than one year, any payment in respect of bonus shall be adjusted downwards
      as applicable based on the achievement of maximum bonus; and  
	 	 
	(e)	 the value
      of share scheme rights, computed in accordance with clause 19.5. 
    

 19.5    For
  the purposes of clause 19.4(e), the value of share scheme rights shall be determined
  as A
  minus
  B
  where:
  

	A	 is the
      aggregate value, on the date of the Change of Control, of the Executive’s
      outstanding share awards and share options, without regard to any performance
      condition to which the awards and options are or may be subject; and
    
	 	 
	B	 is the
      aggregate value, on the date of the Change of Control, of those share awards
      and share options which were exercised or exercisable by the Executive between
      the date of the Change of Control and the Termination Date (as reduced by
      the operation of any applicable performance condition).  

For the purposes of this clause 19.5, the Executive may be required to waive any share awards or share options which, in accordance with their terms, may vest or become exercisable after the Termination Date. 

 19.6    The
  Payment in Lieu of Notice shall be subject to such deductions as the Company
  may be required to make and shall be in full and final settlement of all claims
  the Executive may have against the Company or any Group Company (whether known
  or unknown) arising out of or in connection with the termination of the Employment
  and the Executive’s directorship of the Company or any Group Company.
  

 19.7    For
  the avoidance of doubt, (1) the Company is only to be taken as exercising the
  right given by this clause, and accordingly to be liable for the Payment in
  Lieu of Notice, if it gives the written notice referred to above explicitly
  invoking this clause; and (2) any delay or error in the Payment in Lieu of Notice
  shall not affect the lawfulness of a termination under this clause. 

 MITIGATION
    

 20.     For
  the purposes of paragraph 19 above, and not in any other circumstances, the
  payments set out (being payments made in accordance with this Agreement) will
  not be subject to mitigation, and will be paid irrespective of whether the Executive
  obtains alternative employment within the applicable notice period. 

 INTELLECTUAL
  PROPERTY  

 21.     It
  shall be part of the Executive’s normal duties (whether or not during normal
  working hours and whether or not at the Executive’s normal place of work) at
  all times to consider in what manner and by what new methods or devices the
  products, services, processes, equipment or systems of the Company with which
  he is concerned or for which he is responsible might be improved and to originate
  designs 

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(whether registrable or not) or patentable work or other work in which copyright may subsist. Accordingly: 

	(a)

    	the
      Executive shall forthwith disclose full details of the same in confidence
      to the Company and shall regard himself in relation thereto as a trustee
      for the Company;
	 	 
	(b)

    	all
      intellectual property rights in such designs or work shall vest absolutely
      in the Company which shall be entitled, so far as the law permits, to the
      exclusive use thereof;
	 	 
	(c)	notwithstanding
      (b) above, the Executive shall at any time assign to the Company the copyright
      (by way of assignment of copyright) and other intellectual property rights,
      if any, in respect of all works written originated conceived or made by
      the Executive (except only those works written originated conceived or made
      by the Executive wholly outside his normal working hours hereunder and wholly
      unconnected with his service hereunder) during the continuance of the Employment;
      and
	 	 
	(d)	the
      Executive agrees and undertakes that at any time during or after the termination
      of the Employment he will execute such deeds or documents and do all such
      acts and things as the Company may deem necessary or desirable to substantiate
      its rights in respect of the matters referred to above including for the
      purpose of obtaining letters patent or other privileges in all such countries
      as the Company may require.

 RESTRICTIONS
  AND CONFIDENTIALITY 

 22.     The
  Executive will be bound by the provisions of the covenants set out in the Schedule
  to this Agreement. 

 CONTINUATION
  

 23.     Paragraphs
  17.6, 21 and 22 will continue in full force and effect after the termination
  of the Executive’s employment howsoever caused. 

 NOTICES

 24.     Any
  notice or document may be served on the Executive personally or by posting it
  to his last known address or on the Company addressed to the Secretary at its
  registered office and if sent by first class post will be deemed to have been
  received with 24 hours of posting. 

 THE
  CONTRACT (RIGHTS OF THIRD
  PARTIES) ACT 

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

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 VARIATION

 26.     The
  Company may vary paragraphs 5, 6, 7, 8, 11 and 13 but only after the Company
  has first consulted with the Executive and the Executive agrees to such variation.
  

 MISCELLANEOUS
   

 27.1     A
  reference to something being determined, specified or required by the Company
  includes a determination, specification or requirement from time to time. 

 27.2     With
  effect from the Effective Date, this Agreement supersedes any previous agreement
  between BT or any BT Group Company or the Company or any Group Company and the
  Executive, whether oral or in writing.

 27.3     This
  Agreement is governed by and shall be construed in accordance with the laws
  of England. The parties to this Agreement submit to the non-exclusive jurisdiction
  of the English courts.

	

       	)

        )

       ) 

     ) 
	
	 	 	 
	 SIGNED
        for and on behalf of  

        mmO2
        plc
	)

      ) 	
	 	 	 

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 THE SCHEDULE

	1.	In this Schedule:
	 	 	 	 
	 	 	(a)	effective date of termination has
      the meaning given to it by Section 97(1) of the Employment Rights Act 1996;
	 	 	 	 
	 	 	(b)	in any capacity means
      on the Executive’s own behalf or jointly with or on behalf of any
      person, firm or company;
	 	 	 	 
	 	 	(c)	Confidential Information means
      confidential information of any Group Company which would be of value to
      a competitor or could reasonably enable a competitor to obtain an unfair
      advantage in trading in competition with any Group Company. For the purposes
      of this Schedule it includes but is not limited to business and strategic
      plans, marketing, financial, sales and customer information;
	 	 	 	 
	 	 	(d)	Business means the business
      of the provision of mobile telephony and Internet services (including but
      not limited to the provision of mobile data services).
	 	 
	2.	Since the Executive will obtain
      in the course of the Employment trade secrets and Confidential Information
      and personal knowledge of customers and employees of the Company and other
      Group Companies, the Executive agrees to be bound by the following covenants:
	 	 
	(i)	For 12 months immediately following
      the effective date of termination of the Employment (howsoever arising and
      whether or not lawful) the Executive will not in any capacity carry on,
      be engaged or employed or be concerned or interested in any business, or
      take steps to set up, promote or facilitate the establishment of any business
      which competes or is about to compete with the parts of the Business with
      which the Executive has been actively involved at any time during the period
      of 24 months prior to the effective date of termination of the Employment,
      within:
	 	 	 	 
	 	 	(a)	the United Kingdom;
	 	 	 	 
	 	 	(b)	Germany, Netherlands, Ireland and France; or
    
	 	 	 	 
	 	 	(c)	any other country to which the Company expands
      its Business and in respect of which the Executive had personal and material
      dealings. 
	 	 	 	 
	(ii)	For 12 months immediately following
      the effective date of termination of the Employment the Executive will not
      in any capacity for the purposes of any business which competes or is about
      to compete with the Business canvass, solicit, deal with or accept business
      or custom from any person, firm or company:

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	 	 	(a)	that was a business customer of the Company
      or any Group Company at any time during the 12 months immediately preceding
      the effective date of termination of the Employment (the 12 month
      Period); and
	 	 	 	 
	 	 	(b)	with whom or with which the Executive in the
      course of the Employment personally had material dealings during the 12
      month Period.
	 	 	 	 
	(iii)	For 12 months immediately following
      the effective date of termination of the Employment the Executive will not
      seek to entice away or offer engagement or employment to any designated
      employee to work for any business which competes or is about to compete
      with the Business. A designated employee is (i) an employee who is employed
      wholly or mainly as a manager or in a position above management; or (ii)
      an employee of the Company or any Group Company who has knowledge of trade
      secrets or Confidential Information or knowledge of and connections with
      or influence over customers of the Company or any Group Company; and (in
      both cases) with whom the Executive had personal and material dealings during
      the 12 months immediately preceding the effective date of termination of
      the Employment.
	 	 	 	 
	(iv)	Any reference to “engagement
      or employment” in this clause means engagement or employment whether
      under a contract or otherwise and if under a contract includes a contract
      of employment, or a contract for services or any other form of contract
      and the terms “engage” and “employ” and their derivatives
      shall be construed in accordance with this definition.
	 	 	 	 
	3.	The Executive will, at the request
      and expense of the Company, enter into a separate agreement with any Group
      Company that the Company may reasonably require under the terms of which
      the Executive will agree to be bound by restrictions corresponding to those
      contained in clause 2(i)-(iii) inclusive (or such as may be appropriate
      in the circumstances).
	 	 	 	 
	4.	The Executive acknowledges that
      the restraints contained in this Schedule and each of them are necessary
      to protect the legitimate interests of the Company and the Group Companies,
      and that the same are no wider than reasonably necessary for that purpose,
      and are reasonable as between the parties to this Agreement.
	 	 	 	 
	5.	If any of the restrictions contained
      in this Schedule shall be adjudged to be void or ineffective or unenforceable
      for whatever reason but would be adjudged to be valid and effective if part
      of the wording were deleted or the periods reduced or the area reduced in
      scope, they shall apply with such modifications as may be necessary to make
      them valid and effective.
	 	 	 	 
	6.	For the avoidance of doubt it is
      expressly agreed that each of the sub-clauses (i)-(iii) in Clause 2 is intended
      to contain separate and severable restraints and if any one or more of such
      sub-clauses are for any reason unenforceable in whole or in part, then the
      other sub-clauses shall nonetheless be and remain effective. 

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	7.	The Executive agrees with the Company
      on its own behalf and on behalf of each Group Company that he will not (except
      as ordered by a court or regulatory body) communicate or divulge (or permit
      communication or divulgence) to any person or company or in any way use
      for his own purposes or for any purpose other than that of the Company or
      any Group Company, any trade secrets or Confidential Information of whatsoever
      nature acquired by the Executive during the Employment, whether relating
      to the business or affairs of any member of the Company or any Group Company
      or to persons with whom any member of the Company or any Group Company has
      dealings. This restriction shall apply both during the Employment with the
      Company and after its cessation but shall cease to apply to any information
      which is in or comes into the public domain otherwise than by reason of
      any default by the Executive.
	 	 	 	 
	8.	The period during which the restrictions
      referred to in clauses 2(i)-(iii) inclusive shall apply following the effective
      date of termination shall be reduced by the amount of time during which,
      if at all, the Company suspends the Executive under the provisions of clause
      16.3.
	 	 	 	 
	9.	The Executive agrees that if, during
      either the Employment with the Company or the period of the restrictions
      set out in 2(i)-(iii) inclusive he receives an offer of employment or engagement,
      the Executive will provide a copy of this Schedule to the offeror as soon
      as is reasonably practicable after receiving the offer and if he accepts
      the offer he will inform the Company immediately. 

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	 	Tel: +44 (0) 1753 628140

        Fax: +44 (0) 1753 628142

        e-mail: philip.bramwell@o2.com

        PA: +44 (0) 1753 628143
	 	 
	 	 
	David Varney Esq

      River Thatch

      The Abbotsbrook

      Bourne End

      Bucks

      SL8 5QU	31st March 2003
	 	 

PRIVATE AND CONFIDENTIAL

 

Dear David

Appointment as Chairman

On behalf of mmO2 plc, I am writing to
  confirm the terms of your appointment as Chairman of the board of directors
  of the Company. This letter will replace your existing service agreement with
  the Company dated 13 June 2001 (the Service Agreement) with effect
  from 1 April 2003.

Appointment

1.     Your appointment
  as Chairman remains subject to the provisions of the Articles of Association
  of the Company for the time being in force and to any necessary resolutions
  of shareholders. Subject to this, it is anticipated that your appointment will
  be for the period ending no later than the date of the Company’s Annual General
  Meeting for the financial year 2003/2004 (the Expiry Date).
  However the appointment may be terminated at any time prior to the Expiry
  Date by either party giving to the other three months prior written notice.
  The appointment will terminate automatically on the Expiry Date without the
  need for either party to give notice.

2.     Upon termination
  of your appointment you will at the Company’s request promptly resign in writing
  as a director of the Company (and as a member of any committee of the Board)
  and of any Group company. The Company Secretary is irrevocably authorised to
  sign a letter of resignation on your behalf if you fail to do so.

	 	 	 
	Wellington
      Street	 	Tel: +44 (0)
      1753 628000
	Slough  Berkshire  
      SL1 1YP	 	Fax: +44 (0) 1753 628003
	United Kingdom	 	 
	 	 	 
	mmO2 plc  Registered
      Office Wellington Street Slough  Berkshire  SL1 1YP             Registered
      in England and Wales no. 4190833

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3.     Your appointment
  as Chairman will terminate forthwith if:

	(a)	you are removed as a director by resolution
      passed at a General Meeting; or
	 	 
	(b)	you cease to be a director pursuant to any provision
      of the Articles of Association of the Company.

In any such event you will be retained as a senior employee
  of the Company and the Company will be entitled to terminate the appointment
  in accordance with clause 1.

Duties

4.     You will perform
  the duties of Chairman of the Board in accordance with the Company’s
  articles of association.

5.     You will devote such
  time to the affairs of the Company as is required by your duties as Chairman.
  It is envisaged that, on average, this would take the equivalent of between
  two and three days per week with 20 days holiday entitlement. The Company will
  agree with you the pattern of your attendance that may be required by the Company
  from time to time.

Fee

6.    You will be paid remuneration
  for your duties as Chairman an annual fee of £350,000. This
  fee will be paid to you (less any necessary statutory deductions) in equal instalments
  in accordance. Payment of the fee will be subject to the Company’s normal payment
  intervals. This fee will be inclusive of any membership of any Board committees.

7.     You will have no
  entitlement to any bonus during your appointment nor any entitlement to any
  further awards under any share scheme operated by the Company.

Expenses

8.     In addition to the
  fees described, the Company will reimburse you for all reasonable out of pocket
  expenses necessarily incurred in carrying out your duties. You will have no
  separate expense allowance.

Benefits

9.     For the duration
  of your appointment the Company will provide you with the following benefits:

	(a)	life cover of 4 times salary;
	 	 
	(b)	membership of the Company’s Healthcare
      Scheme subject to the terms of the Scheme as amended from time to time;
	 	 
	(c)	a pool driver/driving service for
      your business use;

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	(d)	office facilities in Slough and
      London to enable you to perform your duties as Chairman;
	 	 
	(e)	reimbursement for the cost of personal
      tax and financial planning advice for you up to a value of £5,000
      excluding VAT per annum for each financial year; and
	 	 
	(f)	reimbursement for subscriptions
      to professional bodies where such subscriptions are in the interests of
      the Company.

Insurance

10.     The Company will
  maintain appropriate director’s and officer’s liability insurance for your benefit
  during your appointment (and continuing thereafter for so long as it is the
  Company’s policy to continue such insurance for former directors).

Other directorships and business interests

11.     The Company recognises
  that you may have other duties and business interests. Accordingly, you need
  to notify the Board of any conflict of interest which may arise due to your
  duties as Chairman of the Company and any other duties or business interests
  which you have.

12.     You accept that
  your duties as Chairman of the Company shall take priority over any other directorships
  or business interests which you may hold.

13.     During your appointment
  you will be required to obtain prior permission from the Board before accepting
  the chairmanship of any FTSE 100 company. Such permission will not be unreasonably
  withheld, but you are aware that the Board will need to have full regard to
  current best practice in considering such a proposal.

14.     If, during the appointment,
  you wish to accept any public appointment or further directorship, you will
  be required to obtain prior approval of the Company’s senior independent non-executive
  director. Such approval will not be unreasonably withheld provided (a) the likely
  time commitment for the other role will not affect your ability to give priority
  to your duties under this appointment, and (b) the other role does not give
  rise to competitive, conflict or reputational issues for the Company.

Confidentiality

15.     You must apply the
  highest standards of confidentiality, and not disclose to any person or company
  (whether during the course of this appointment or at any time after its termination),
  any confidential information concerning the Company and any Group Companies
  with which you come into contact by virtue of your position as a Chairman of
  the Company. The Company is able to arrange the disposal of papers which you
  no longer require.

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 Termination 

 16.     On termination
  of your appointment as Chairman you will deliver to the Company all books, documents,
  papers and other property of or relating to the business of the Company or any
  Group Company which are in your possession, custody or power by virtue of your
  position as Chairman of the Company. 

 Dealings in the
  Company’s Securities  

 17.     It is a condition
  of your appointment that you adhere strictly to the Model Code for Securities
  Transactions by Directors of Listed Companies published by the UK Listing Authority,
  as in force from time to time, and any code of conduct relating to securities
  transactions by directors and specified employees issued by the Company from
  time to time. You will appreciate that confidentiality is particularly relevant
  in relation to dealings by Directors, including their immediate families. 

 Change of control 

 18.     For the purposes
  of this clause 18: 

 Control means
  the power of any person whether alone or together with any person acting in
  concert with him to control the composition of the board of directors of the
  Company or otherwise to secure whether by means of the holding of shares or
  the possession of voting power in relation to the Company or any other body
  corporate or by virtue of any powers conferred by the articles of association
  or any other document or agreement regulating the Company or any other body
  corporate that the affairs of the Company are conducted with the wishes of that
  person; and

  Change of Control means: (i) the disposal of all or substantially
  all of the Company’s business; or (ii) the acquisition by any person whether
  alone or together with any person acting in concert with him of Control of the
  Company; but shall not mean an acquisition of Control of the Company by another
  company the shares of which, immediately following such an acquisition, are
  all held by the holders of the shares of the Company immediately prior to such
  an acquisition in materially the same proportion as they held shares in the
  Company immediately prior to such an acquisition. 

 If following a Change of Control your appointment
  is terminated prior to the Expiry Date (including, without limitation, if you
  are constructively dismissed) then you will be entitled to receive, and the
  Company (or its successor) will be obliged to pay an amount equal to the fee
  referred to in clause 6 and the cost to the Company of the provision for you
  of the benefits set out in this letter in respect of the period from the date
  of termination of your appointment until the Expiry Date. 

 Such payment shall be subject to such deductions
  as the Company may be required to make and shall be in full and final settlement
  of all claims you may have against the Company or any Group Company (whether
  known or unknown) arising out of or in connection with the termination of your
  appointment. For the purposes of this clause, the payments set out herein will
  be paid irrespective of whether you obtain alternative employment in the applicable
  notice period. 

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 General 

 19.     With effect from
  1 April 2003, this letter will supersede the Service Agreement and any previous
  agreement between you and the Company or any Group Company, whether oral or
  in writing except for the letter concerning equity arrangements dated 31st March
  2003, which remains in full force and effect. 

 20.     In this letter
  Group Company
  shall mean any of (i) the Company (ii) any holding company
  of the Company from time to time and (iii) any subsidiary of the Company or
  of any such holding company from time to time. Holding company 
  and subsidiary shall have the meanings ascribed to them
  by Section 736 Companies Act 1985, as amended. 

 21.     This letter is
  governed by, and shall be construed in accordance with, the laws of England.
  

 22.     If this offer is
  acceptable to you, please sign and return to me the enclosed duplicate of this
  letter. 

 Yours sincerely 

Philip Bramwell 

 Company Secretary
   

  For and on behalf of mmO2 plc

 Encl.

 

I have read and agree to the above terms of my appointment
  as Chairman of mmO2 plc.

		 	 

      ......................................................

	David Varney	 	March 31st 2003

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Strictly Private
  and Confidential

Peter Erskine

  Chief Executive Officer

  mmO2 plc

  Wellington Street

  Slough

  SL1 1YP

12 May 2003

Dear Peter

The remuneration committee has approved the
  following changes in your remuneration.

Your base pay will be increased to £620,000
  with effect from 1st June 2003.

You have been awarded a bonus of £387,000
  in respect of 2002/03; this will be paid in your June salary. The level of award
  is on the basis of the performance of mmO2 plc against the targets
  set at the beginning of the financial year, but includes an upward adjustment
  to reflect your individual performance, and contribution to the Group's performance.

Yours sincerely

David Varney

  Chairman

 

	 	 	Chairman
	 	 	 
	mmO2 plc	 	e david.varney@o2.com
	Wellington
      Street Slough	 	t +44 (0)1753 628336
	Berkshire SL1 1YP	 	f +44 (0)1753 628340
	United Kingdom	 	 
	 	 	 
	mmO2 plc  Registered Office:
       Wellington Street  Slough  Berkshire  SL1 1YP        Registered in England and Wales
      no. 4190833

 

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Strictly Private
  and Confidential

Mr David Finch

  Chief Financial Officer

  mmO2 plc

  Wellington Street

  Slough

  Berks 

  SL1 1YP

8 May 2003

Dear David

The Remuneration Committee has approved the
  following changes in your remuneration.

Your base pay will be increased to £400,000
  with effect from 1 June 2003.

You have been awarded a bonus of £206,250
  in respect of 2002/03; this will be paid in your June salary. The level of award
  is on the basis of the performance of mmO2 against the targets set
  at the beginning of the financial year, but includes an upward adjustment to
  reflect your individual performance, and contribution to the Group's financial
  performance.

David, you have made a really significant
  contribution to O2’s progress. Well done and thank you. We
  will need all that, and more, in the coming year.

Yours sincerely

         

Peter Erskine

  CEO

 

	Wellington
      Street Slough	 	t +44 (0)1753 628 000
	Berkshire SL1 1YP	 	f +44 (0)1753 628 003
	United Kingdom	 	 
	 	 	 
	mmO2 plc  Registered
      Office:  Wellington Street  Slough Berkshire SL1 1YP        Registered
      in England and Wales no. 4190833

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