Document:

Exhibit 4.1

Prudential
plc

 

RESTRICTED
SHARE PLAN

 

RULES
FOR 2005 AWARDS

 

 

Contents

 

	
  2

  	
   

  	
  1

  	
   

  	
  Purpose

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  2

  	
   

  	
  Definitions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  3

  	
   

  	
  Eligibility

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  4

  	
   

  	
  Grant
  of Awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  5

  	
   

  	
  Calculation
  of Awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  6

  	
   

  	
  Restriction
  on transfer of awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  7

  	
   

  	
  Options
  over shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  8

  	
   

  	
  Release
  of awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  9

  	
   

  	
  Transfer
  of shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  10

  	
   

  	
  Change
  of control

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  11

  	
   

  	
  Adjustments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  12

  	
   

  	
  Administration
  of scheme

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  13

  	
   

  	
  Amendment
  – termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  14

  	
   

  	
  Effective
  date of plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  15

  	
   

  	
  Term of
  plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  16

  	
   

  	
  Governing
  law

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Schedule
  1 – award letter

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Schedule
  2 – Total shareholder return

  
							

 

1

 

1                                                                     Purpose

 

1.1                                        The Prudential Restricted Share Plan (‘the Plan’) is an employees’
share scheme (within the meaning of section 743 of the Companies Act 1985) for
encouraging or facilitating the holding of shares in Prudential plc (‘the
Company’) by or for the benefit of employees of the Company and its
Subsidiaries.

 

1.2                                        The Company and any of its Subsidiaries may nominate Eligible
Employees to participate in the Plan and will each bear the associated costs of
that participation by providing funds to the Trustees of the Prudential plc
Employee Share Trust in accordance with the terms of the Trust Deed (as amended
or supplemented from time to time).

 

2                                                  Definitions

 

2.1                                        In these
Rules, unless the context otherwise requires, the following expressions have
the following meanings:

 

2.1.1                             ‘Award
Date’ means the effective date of an Award Letter and unless otherwise stated
therein shall be the date thereof.

 

2.1.2                             ‘Award
Letter’ means a letter from the Company to a Participant setting out the
specific terms of a conditional undertaking in respect of the grant of an
Option over Shares in the form, or substantially in the form, of Schedule 1 to
these Rules, with such modifications or variations generally or in the case of
individual Participants as the Committee may determine.

 

2.1.3                             ‘Close
Period’ means any period during which the Participant would not be given
clearance to deal in Shares under the Company’s rules on share dealing.

 

2.1.4                             ‘Committee’
means a committee of at least two executives appointed by the Remuneration
Committee to administer the Plan but no executive shall take part in any
determination by the Committee relating to his or her own participation in the
Plan.

 

2.1.5                             ‘Company’
means Prudential plc.

 

2.1.6                             ‘Comparator
Companies’ means those companies the prices of whose ordinary shares comprise
the FT-SE 100 Share Index (including the Company) on the first day of the
relevant Measurement Period on which the London Stock Exchange is open for
trading.

 

2.1.7                             ‘Disability’
means permanent disability within the meaning of any permanent health insurance
or equivalent plan or any occupational pension plan established by a Group
Company of which the Participant is a member.

 

2

 

2.1.8                             ‘Eligible
Employee’ means any employee of a Group Company.

 

2.1.9                             ‘Group’ means the Company and its Subsidiaries.

 

2.1.10                       ‘Group Company’ means a company which is a member of the Group.

 

2.1.11                       ‘Market Value’ in relation to a share means its market value as
calculated in accordance with Section 272(3) of the Taxation of Chargeable
Gains Act 1992.

 

2.1.12                       ‘Measurement Period’ means the period beginning on 1 January in
the year of an Award Date and ending on the 31 December preceding the
third anniversary of the Award Date as determined in accordance with Rule 7.

 

2.1.13                       ‘Option’ means the right granted to a Participant to purchase from
the Trustees for no consideration Shares which are the subject of an Award
Letter and exercisable at any time during the period of seven years following
the grant.

 

2.1.14                       ‘Participant’
means an Eligible Employee to whom an Award letter has been issued under the
Plan which has not lapsed.

 

2.1.15                       ‘Plan’ means
the Prudential Restricted Share Plan constituted by these Rules as amended
from time to time.

 

2.1.16                       ‘Remuneration
Committee’ means the remuneration committee of the board of directors of the
Company.

 

2.1.17                       ‘Retirement’
means termination of employment with a Group Company on or after attaining
normal retirement age pursuant to the rules of any occupational pension
plan of which the Participant is a member and which is established by a Group
Company, or on any earlier date at which the Participant is bound by his
contract of employment to retire or on which the Participant retires with the
consent of the relevant Group Company.

 

2.1.18                       ‘Salary’ means
annual basic salary and does not include any bonus payment or payment in lieu
of pension contributions.  In the case of
a Participant whose normal place of business is outside the United Kingdom the
amount of salary shall be a notional figure determined for the purposes of the
Plan by the Committee.

 

2.1.19                       ‘Share’ means a
share in the capital of the Company.

 

2.1.20                       ‘Subsidiary’
means any company which is at the relevant time a subsidiary of the Company
within the definition in section 736, Companies Act 1985.

 

2.1.21                       ‘TSR’ means
Total Shareholder Return, calculated in accordance with Schedule 2.

 

2.1.22                       ‘Trustees’
means the trustee or trustees from time to time of the Prudential plc Employee
Share Trust constituted by the Trust Deed.

 

2.1.23                       ‘Trust Deed’
means the Trust Deed dated 16 October 1992 entered into between the
Company and BWCI Trust Company Limited.

 

3

 

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

 

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

 

3                                                  Eligibility

 

                                                         The
following Eligible Employees may become Participants:

 

3.1                                        Executive
Directors of the Company; and

 

3.2                                        any other
employee of a Group Company who is nominated by that Group Company and approved
by the Committee.

 

4                                                  Grant of
awards

 

4.1                                        Award
Letters shall be issued to Eligible Employees in accordance with the procedures
set out in this Rule 4.

 

4.2                                        The
Committee shall have the authority to issue Award Letters under the Plan to
such Eligible Employees as have been selected by a Group Company for the
purpose as the Committee in its absolute discretion thinks fit.

 

4.3                                        The
Committee shall only issue an Award Letter to an Eligible Employee who is a
director of the Company or exercise any powers under the Plan in relation to a
director of the Company with the prior approval of the Remuneration Committee.

 

4.4                                        No Award
letter shall be granted to an Eligible Employee if the grant would not be
permissible because it would occur:

 

4.4.1                             during a
Close Period; or

 

4.4.2                             at a time
when such a grant is prohibited in a jurisdiction applicable to the Eligible
Employee.

 

4

 

4.5                                        Shares may
be purchased or otherwise acquired or appropriated by the Trustees in accordance
with the directions of the Committee to meet the potential obligations of the
Trustees under an Award Letter at any time prior to the grant of an Option over
the Shares which are the subject of such Award Letter.

 

4.6                                        The Company
shall provide (and shall procure that any Group Company which employs
Participants provides) sufficient monies to enable the Trustees to, and will
use its best endeavours to procure that the Trustees will, acquire sufficient
Shares to satisfy the Options granted to Participants.

 

5                                                  Calculation
of awards

 

5.1                                        The value
of the maximum number of Shares which are the subject of an Award Letter shall
be as determined by the Committee, but shall not exceed the following
percentage of the Participant’s Salary at the Award Date namely:

 

5.1.1                             Group
Chief Executive of the Company – not exceeding 200%.

 

5.1.2                             Other
Executive Directors of the Company and Senior Executives approved by the
Committee – not exceeding 160%.

 

5.1.3                             Senior
Eligible Employees – not exceeding 60%.

 

5.1.4                             Other
Eligible Employees – not exceeding 40%.

 

5.2                                        If a
Participant becomes an Eligible Employee during the calendar year of the Award
Date the value of the maximum number of Shares which are the subject of such
Participant’s Award Letter shall be all or such proportion of the full
percentage applicable to that Participant as may be determined by the
Committee.

 

5.3                                        The maximum
number of Shares to which a Participant may become entitled under an Award
Letter shall be calculated by dividing the value determined in accordance with Rules 5.1
and 5.2 by the average value of a Share during the calendar year preceding the
relevant Award Date (on a basis determined by the Committee but calculated by
reference to its Market Value during such year) and rounding up to the nearest
whole number of Shares.

 

5

 

6                                                  Restriction
on transfer of awards

 

6.1                                        An Award
Letter shall be personal to a Participant and neither an Award Letter nor any
interest in an Award Letter may be transferred, assigned, pledged, charged or
otherwise dealt with by a Participant for the benefit of any person other than
by way of transfer to the Participant’s personal representatives in the event
of the Participant’s death (in which case the provisions of Rule 8.5 shall
apply).

 

6.2                                        If a
Participant deals or attempts to deal with an Award Letter or any interest in
an Award Letter in breach of Rule 6.1 the provisions of such Award Letter
shall lapse forthwith.

 

7                                                  Options
over shares

 

7.1                                        The Trustees shall grant to each Participant an Option over shares
which are the subject of an Award Letter to the extent that the performance
requirements set out in this Rule 7 are achieved and if the Remuneration
Committee confirms to the Trustees that the underlying financial performance of
the Company justifies the grant.

 

7.2                                        As soon as practicable following the Measurement Period ending on
the 31 December preceding the third anniversary of the Award Date the TSR
of each of the Comparator Companies which are still quoted on the London Stock
Exchange at the end of the Measurement Period shall be listed in order so that
the one having the highest TSR is ranked first.

 

7.3                                        If the list referred to in Rule 7.2 indicates that the Company
is in the top 20% of the Comparator Companies in the list the Option will be
granted over all the Shares which are the subject of the relevant Award Letter
as from the third anniversary of the relevant Award Date.

 

7.4                                        If the list referred to in Rule 7.2 indicates that the Company
is in the bottom 50% of the Comparator Companies in the list no Option will be
granted over the Shares which are the subject of the relevant Award Letter.

 

7.5                                        If neither Rule 7.3 nor Rule 7.4 applies the Option will
be granted over a proportion of the maximum number of the Shares which are the
subject of the Award Letter.  Such
proportion shall be determined on a straight progression from 25% if the
Company is at the 50th percentile of the Comparator Companies in the
list, to the maximum number of Shares which are the subject of the Award Letter
if the Company is in the top 20th percentile of such Comparator
Companies.  Such Option shall be rounded
up the nearest whole number of shares and any interest of the Participant in
the balance of the Shares which are the subject of such Award Letter shall
lapse.

 

6

 

7.6                                        As soon as reasonably practicable after the list referred to in Rule 7.2
has been prepared and the Remuneration Committee has confirmed to the Trustees
that the underlying financial performance of the Company justifies the grant of
the Options referred to in Rule 7.1 the Company shall forward a copy of
the list to each Participant together with a certificate executed as a deed by
the Trustees evidencing the Option granted to such Participant.  If the Remuneration Committee does not so
confirm within six months following the end of the Measurement Period the
relevant Award Letter will lapse.

 

8                                                  Release
of awards

 

8.1                                        An Option
may be exercised in whole or in part in accordance with its terms.  The Participant shall deliver to the Company
a notice in writing in such form as may be prescribed from time to time by the
Directors (which may be endorsed on the Option certificate) stating therein the
number of Shares in respect of which the Participant desires to exercise the
Option, together with the relevant Option certificate.

 

8.2                                        The notice
shall be expressed to take effect immediately upon its receipt by the Company
and such date shall constitute the date of exercise of such Option.  A notice shall be of no effect unless
received by the Company before the expiry of the period in which an Option may
be exercised. Upon exercise of the Option the Trustees shall transfer the
relevant Shares to the order of the Participant.

 

8.3                                        A Participant
shall not be entitled to exercise an Option pursuant to this Rule during a
Close Period or at any time when the exercise is prohibited in a jurisdiction
applicable to the Participant.

 

8.4                                        If the
aggregate number of Shares in respect of which an Option certificate has been
delivered to the Company in accordance with sub-Rule 8.1 above exceeds the
number of Shares in respect of which the Participant has stated in the
accompanying notice that the Option is to be exercised, the Company shall in
due course issue to the Participant an Option certificate in respect of the
balance, which shall state the date on which the Option was exercised in part.

 

8.5                                        If a
Participant dies his or her personal representative may exercise any subsisting
Option within 12 months after the date of death.  In addition the Committee may in its absolute
discretion instruct the Trustees to transfer to the Participant any Shares
which are the subject of a subsisting Award Letter taking into account the
length of the period since the Award Date and the underlying financial
performance of the Company during such period. 
To the extent that the discretion is not exercised within the 6 months
following the date of death the Award Letter will lapse.

 

8.6                                        If a
Participant ceases to be employed by a Group Company for any reason other than
death the Participant may exercise any outstanding Option only within the
period of six months following the date of such cessation of employment.

 

7

 

8.7                                        If a
Participant ceases to be employed by a Group Company as a result of Retirement,
redundancy (within the meaning of the Employment Protection (Consolidation) Act
1978), illness, injury or disability, in relation to any Award Letters which
have not lapsed the Trustees shall, unless the Committee in its absolute
discretion otherwise determines within six months of such cessation of
employment, grant an Option over Shares. Such Option shall be granted with the
Committee taking into account the underlying financial performance of the
Company in the period since the Award Date and otherwise in accordance with Rule 7,
but (unless in its determination the Committee specifies a different basis)

 

8.7.1          scaled down pro-rata to the proportion of the relevant Measurement
Period which has actually elapsed at such cessation; and

 

8.7.2                             so that
the TSR of each Comparator Company shall be calculated and ranked at the end of
the month immediately preceding such cessation.

 

                                                         Any such Option may be exercised only within the period of six
months following the date of such cessation of employment and the Award Letter
shall automatically lapse in respect of any Shares which are not the subject of
an Option.

 

8.8                                        If a
Participant ceases to be employed by a Group Company between an Award Date and
the third anniversary thereof as a result of dismissal or resignation the
Participant shall not be granted an Option over any shares comprised in an
Award Letter outstanding at the date of such cessation of employment unless and
to the extent that, within six months of the date of such cessation, the
Committee in its absolute discretion otherwise determines and provided that the
Participant has not been dismissed for dishonesty or misconduct.  Any such Option may be exercised only within
the six month period and the Award Letter shall automatically lapse in respect
of any Shares not made the subject of an Option.

 

                                                         For the
purposes of this Rule 8.8 a decision by the Committee that a Participant
has been dismissed for dishonesty or misconduct shall be conclusive.

 

8.9                                        A
Participant shall not be entitled by way of compensation for loss of office,
wrongful or unfair dismissal or otherwise to any sum or any benefit to
compensate the Participant for the loss of Shares which were the subject of an
Award Letter or any other right or benefit accrued or in prospect under the
Plan.

 

8

 

9                                                  Transfer
of shares

 

9.1                                        Any
transfer of Shares to a Participant shall be subject to such consent, if any,
of HM Treasury or other authorities, whether of the United Kingdom or
elsewhere, as may from time to time be required and it shall be the
responsibility of the Participant to obtain and comply with the requirements of
such consents.

 

9.2                                        Shares
shall not carry the right to dividends or other distributions paid by reference
to a qualifying date falling before the date of exercise of an Option but shall
in all other respects rank pari passu with the other Shares in issue.

 

10                                           Change of
control

 

10.1                                 For the purposes of
this Rule, a ‘change of control’ shall be deemed to take place if:

 

10.1.1                       any individual,
company, corporation or other entity acquires more than 50% of the then
outstanding equity of the Company entitling the holder to vote generally in the
election of directors of the Company; or

 

10.1.2                       any scheme of
arrangement sanctioned by the Court under section 425 of the Companies Act 1985
becomes effective (except where Rule 11 applies); or

 

10.1.3                       the Company
goes into liquidation (except where Rule 11 applies).

 

10.2                                 In the event of a ‘change
of control’ as defined in subsection 10.1 above, unless the Committee makes
other arrangements within one month thereafter which the auditors of the
Company first confirm in writing to the Committee are in their opinion fair and
reasonable to the Participants the Trustees shall grant to each Participant an
Option over the appropriate number of Shares which are the subject of an Award
Letter (as if the date of such change of control were both the end of a
Measurement Period and the third anniversary of the relevant Award Date for the
purposes of Rule 7).  The Award
letter shall automatically lapse in respect of any shares not the subject of
the Option.

 

9

 

11                                           Adjustments

 

                                                         In the
event of any reconstruction, amalgamation, reorganisation, liquidation for the
purposes of reconstruction, consolidation, sub-division or other change in the
capital structure of the Company affecting the Shares, the number and class of
Shares subject to outstanding Award Letters and outstanding Options under the
Plan shall be substituted or adjusted in such manner as may be determined to be
reasonable, appropriate and equitable by the Remuneration Committee, and
confirmed as being fair and reasonable by the auditors of the Company for the
time being, to prevent dilution or enlargement of the rights of Participants
and provided that the number of Shares subject to any Award Letter or Option
shall always be a whole number.

 

10

 

12                                           Administration
of the scheme

 

12.1                                 The Trustees shall waive all rights to dividends on Shares held by them
in accordance with these Rules.

 

12.2

 

12.2.1                       Except
as otherwise provided, notices or documents required to be given to an Eligible
Employee or a Participant shall be properly given if delivered to the relevant
person by hand at his or her normal place of work or sent to the relevant
person by post at his or her last known address and where a notice is sent by
post it shall be deemed to have been given 48 hours after it was put into the
post properly addressed and stamped.

 

12.2.2                       Except
as otherwise provided, notices or documents required to be given to the Company
by a Participant shall be properly given if delivered by hand to the Secretary
of the Company at the Company’s registered office or sent to the Secretary by
post at that office and where a notice is sent by post it shall be deemed to
have been given 48 hours after it was put into the post properly addressed and
stamped.

 

12.3                                 A Participant shall not be treated as having ceased to be an Eligible
Employee merely by reason of the occurrence of any of the following:

 

12.3.1                       a
transfer of his employment from one Group Company to another; or

 

12.3.2                       absence
of no more than 29 weeks due to pregnancy or confinement (unless the
Participant shall previously have notified her intention not to return in which
case her employment shall be deemed to be terminated on the date she so
notifies her employer); or

 

12.3.3                       any leave of absence in excess of 90 days approved by
the Group Company which employs the Participant, provided that the employee’s
right to re-employment is guaranteed either by statute or by contract; or

 

12.3.4                       the
transfer of the undertaking or part undertaking in which the Participant is
employed to another Group Company.

 

11

 

	
  12.4

  	
   

  	
  Unless the Committee otherwise determines a
  Participant shall be treated as having ceased to be an Eligible Employee by
  reason of the occurrence of either of the following:

  
	
   

  	
   

  	
   

  
	
  12.4.1

  	
   

  	
  the Subsidiary by which the Participant is
  employed ceasing to be a Subsidiary;

  
	
   

  	
   

  	
   

  
	
  12.4.2

  	
   

  	
  the transfer of the undertaking or part
  undertaking in which the Participant is employed to any person other than
  another Group Company.

  
	
   

  	
   

  	
   

  
	
  12.5

  	
   

  	
  Nothing contained in the Plan shall prevent the
  Company from adopting other employee benefit arrangements, including further
  employees’ share schemes.

  
	
   

  	
   

  	
   

  
	
  12.6

  	
   

  	
  Neither the
  action of the Company in establishing the Plan, nor any action taken by it or
  by the Committee under the Plan or any Award Letter, nor any provision of the
  Plan, shall be construed as giving to any person the right to be retained in
  the employment of a Group Company.

  
	
   

  	
   

  	
   

  
	
  12.7

  	
   

  	
  Subject to the provisions of the Trust Deed and
  the Plan the Committee shall have full power:

  
	
   

  	
   

  	
   

  
	
  12.7.1

  	
   

  	
  to construe and interpret the Rules of the
  Plan; to establish, amend or waive regulations for administration of the Plan
  not being inconsistent with the Rules;

  
	
   

  	
   

  	
   

  
	
  12.7.3

  	
   

  	
  to accelerate the grant of Options over Shares;

  
	
   

  	
   

  	
   

  
	
  12.7.4

  	
   

  	
  to correct errors, omissions or inconsistencies
  in the Plan or in any Award Letter or other document; and to agree with a
  Participant to amend the terms and conditions of any outstanding Award Letter
  to the extent such terms and conditions are within the discretion of the
  Committee as provided in the Plan.

  
	
   

  	
   

  	
   

  
	
  12.8

  	
   

  	
  The Committee may, in its sole discretion,
  delegate to appropriate executives of the Company the administration of the
  Plan. No such delegation by the Committee shall be made with respect to the
  grant of Award Letters or Options and the Committee may not delegate its
  authority to correct errors, omissions or inconsistencies in the Plan or in
  any Award Letter or other document. All authority delegated by the Committee
  under this Rule 12.9 shall be exercised in accordance with the
  provisions of the Plan and any guidelines for the exercise of such authority
  that may from time to time be established by the Committee.

  
	
   

  	
   

  	
   

  

12

 

13                                           Amendment
– termination

 

The Committee may amend, terminate or suspend the
Plan but no such action may impair or adversely affect the existing rights of a
Participant under any Award Letter or Option without the Participant’s consent.

 

14                                           Effective
date of plan

 

The Plan shall have effect from 1 January 1996
except in relation to the Group Chief Executive for whom the Plan shall have
effect from 1 January 1995.

 

16                                           Term of
plan

 

No Award shall be made under the Plan after 31 March 2006
(or such earlier date as the Plan shall be terminated by the Committee) but so
that the foregoing shall not prevent any amendment, modification or suspension
at any time of any Award Letter or the waiver at any time of any terms or
conditions thereof by the Committee under and in accordance with the provisions
of the Plan or the amendment of the Plan by the Committee under Rule 13.

 

17                                           Governing
law

 

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

 

13

 

Schedules

 

1.                                               Award letter

 

2.                                               Total Shareholder Return

 

Schedule 1

 

Dear
[                              ]

 

I am pleased to confirm that you have been granted
a conditional award of [ ] shares in Prudential pIc in accordance with the Rules of
the Prudential Restricted Share Plan. 
For the purposes of the Rules the Award Date is [                               ].

 

The number of shares has been calculated by taking
[ ] per cent of your current basic salary and dividing it by the average value
of the month end closing price of Prudential’s shares during [ ].  The share price for the [                            ]
award is [                        ].

 

For the purposes of determining whether you will
be granted an option over such shares the commencement date of the three-year ‘Measurement
Period’ (as defined in the Rules) is 1 January [ ].  The number of shares over which your option
will be granted will be determined by reference to the extent that the Company’s
‘Total Shareholder Return’ (as defined in the Rules) has reached a specified
target after the Measurement Period, when compared with the Total Shareholder
Return of those of the companies which comprise the FT-SE 100 Share Index on
the first trading day of the London Stock Exchange in the Measurement Period
which are still quoted on that Exchange on the last day of the Measurement
Period.  In addition the Remuneration
Committee will need to be satisfied that the underlying performance of the
Company justifies the grant of an option.

 

Yours sincerely

 

14

 

Schedule 2

 

For the
purposes of Rule 7 TSR in respect of each of the Comparator Companies
shall be calculated as follows using the Finstat price feed or such other
comparable method as the Committee may approve to ascertain the value of a
share:

 

1.               for the first day of the Measurement Period the average of the values of
a share in the relevant company during the period of three months immediately
before the beginning of the Measurement Period shall be taken and such amount
shall be a cash outflow;

 

2.               for
the last day of the Measurement Period the average of the values of a share in
the relevant company during the period of three months immediately before the
end of the Measurement Period shall be taken and such amount shall be a cash
inflow;

 

3.               gross
dividends per share paid by the relevant company during the Measurement Period
shall be a cash inflow on the day when the relevant company’s shares went
ex-dividend and applied in purchasing the relevant company’s shares at the
close of business on that day at its value;

 

4.               a
retroactive adjustment shall be made for any stock or share split, scrip issue
or rights issue or other like event occurring during the Measurement Period and
any payment by the shareholder for the exercise of rights shall be a cash
outflow;

 

5.               an
appropriate adjustment shall be made for any merger, takeover or other change
in capital so as to preserve the original notional investment;

 

6.               the
TSR shall be the rate of return calculated from the amounts determined in
accordance with Paragraphs 1 to 5 above.

 

15

 

Prudential
plc

 

RESTRICTED
SHARE PLAN

 

RULES
FOR 2006 AWARDS

 

 

Contents

 

	
  2

  	
   

  	
  1

  	
   

  	
  Purpose

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  2

  	
   

  	
  Definitions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  3

  	
   

  	
  Eligibility

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  4

  	
   

  	
  Grant
  of Awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  5

  	
   

  	
  Calculation
  of Awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  6

  	
   

  	
  Restriction
  on transfer of awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  7

  	
   

  	
  Options
  over shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  8

  	
   

  	
  Release
  of awards

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  9

  	
   

  	
  Transfer
  of shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  10

  	
   

  	
  Change
  of control

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  11

  	
   

  	
  Adjustments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  12

  	
   

  	
  Administration
  of scheme

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  13

  	
   

  	
  Amendment
  – termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  14

  	
   

  	
  Effective
  date of plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  15

  	
   

  	
  Term of
  plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  16

  	
   

  	
  Governing
  law

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Schedule
  1 – award letter

  
	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Schedule
  2 – Total shareholder return

  

 

1

 

1                                                                     Purpose

 

1.1                                        The Prudential Restricted
Share Plan (‘the Plan’) is an employees’ share scheme (within the meaning of
section 743 of the Companies Act 1985) for encouraging or facilitating the
holding of shares in Prudential plc (‘the Company’) by or for the benefit of
employees of the Company and its Subsidiaries.

 

1.2                                        The Company and any of its
Subsidiaries may nominate Eligible Employees to participate in the Plan and
will each bear the associated costs of that participation by providing funds to
the Trustees of the Prudential plc Employee Share Trust in accordance with the
terms of the Trust Deed (as amended or supplemented from time to time).

 

2                                                  Definitions

 

2.1                                        In these Rules, unless the context otherwise requires, the following
expressions have the following meanings:

 

2.1.1                             ‘Award Date’ means the effective date of an
Award Letter and unless otherwise stated therein shall be the date thereof.

 

2.1.2                             ‘Award Letter’ means a letter from the
Company to a Participant setting out the specific terms of a conditional
undertaking in respect of the grant of an Option over Shares in the form, or
substantially in the form, of Schedule 1 to these Rules, with such
modifications or variations generally or in the case of individual Participants
as the Committee may determine.

 

2.1.3                             ‘Close Period’ means any period during
which the Participant would not be given clearance to deal in Shares under the
Company’s rules on share dealing.

 

2.1.4                             ‘Committee’ means a committee of at least
two executives appointed by the Remuneration Committee to administer the Plan
but no executive shall take part in any determination by the Committee relating
to his or her own participation in the Plan.

 

2.1.5                             ‘Company’ means Prudential plc.

 

2.1.6                             ‘Comparator Companies’ means those
companies the prices of whose ordinary shares comprise the FT-SE 100 Share
Index (including the Company) on the first day of the relevant Measurement
Period on which the London Stock Exchange is open for trading.

 

2.1.7                             ‘Disability’ means permanent disability
within the meaning of any permanent health insurance or equivalent plan or any
occupational pension plan established by a Group Company of which the
Participant is a member.

 

2

 

2.1.8                             ‘Eligible Employee’ means any employee of a
Group Company.

 

2.1.9                             ‘Group’ means the Company and its
Subsidiaries.

 

2.1.10                       ‘Group Company’ means a company which is a member of
the Group.

 

2.1.11                       ‘Market Value’ in relation to a share means its market
value as calculated in accordance with Section 272(3) of the Taxation
of Chargeable Gains Act 1992.

 

2.1.12                       ‘Measurement Period’ means the period beginning on 1 January in
the year of an Award Date and ending on the 31 December preceding the
third anniversary of the Award Date as determined in accordance with Rule 7.

 

2.1.13                       ‘Option’ means the right granted to a Participant to
purchase from the Trustees for no consideration Shares which are the subject of
an Award Letter and exercisable at any time during the period of seven years
following the grant.

 

2.1.14                       ‘Participant’ means an Eligible Employee to whom an
Award letter has been issued under the Plan which has not lapsed.

 

2.1.15                       ‘Plan’ means the Prudential Restricted Share Plan
constituted by these Rules as amended from time to time.

 

2.1.16                       ‘Remuneration Committee’ means the remuneration committee
of the board of directors of the Company.

 

2.1.17                       ‘Retirement’ means termination of employment with a
Group Company on or after attaining normal retirement age pursuant to the rules of
any occupational pension plan of which the Participant is a member and which is
established by a Group Company, or on any earlier date at which the Participant
is bound by his contract of employment to retire or on which the Participant
retires with the consent of the relevant Group Company.

 

2.1.18                       ‘Salary’ means annual basic salary and does not
include any bonus payment or payment in lieu of pension contributions.  In the case of a Participant whose normal
place of business is outside the United Kingdom the amount of salary shall be a
notional figure determined for the purposes of the Plan by the Committee.

 

2.1.19                       ‘Share’ means a share in the capital of the Company.

 

2.1.20                       ‘Subsidiary’ means any company which is at the
relevant time a subsidiary of the Company within the definition in section 736,
Companies Act 1985.

 

2.1.21                       ‘TSR’ means Total Shareholder Return, calculated in
accordance with Schedule 2.

 

2.1.22                       ‘Trustees’ means the trustee or trustees from time to
time of the Prudential plc Employee Share Trust constituted by the Trust Deed.

 

2.1.23                       ‘Trust Deed’ means the Trust Deed dated 16 October 1992
entered into between the Company and BWCI Trust Company Limited.

 

3

 

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

 

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

 

3                                                  Eligibility

 

                                                         The following Eligible Employees may become
Participants:

 

3.1                                        Executive Directors of the Company; and

 

3.2                                        any other employee of a Group Company who is nominated by that Group
Company and approved by the Committee.

 

4                                                  Grant of
awards

 

4.1                                        Award Letters shall be issued to Eligible Employees in accordance with
the procedures set out in this Rule 4.

 

4.2                                        The Committee shall have the authority to issue Award Letters under the
Plan to such Eligible Employees as have been selected by a Group Company for
the purpose as the Committee in its absolute discretion thinks fit.

 

4.3                                        The Committee shall only issue an Award Letter to an Eligible Employee
who is a director of the Company or exercise any powers under the Plan in
relation to a director of the Company with the prior approval of the
Remuneration Committee.

 

4.4                                        No Award letter shall be granted to an Eligible Employee if the grant
would not be permissible because it would occur:

 

4.4.1                             during a Close Period; or

 

4.4.2                             at a time when such a grant is prohibited
in a jurisdiction applicable to the Eligible Employee.

 

4

 

4.5                                        Shares may be purchased or otherwise acquired or appropriated by the
Trustees in accordance with the directions of the Committee to meet the
potential obligations of the Trustees under an Award Letter at any time prior
to the grant of an Option over the Shares which are the subject of such Award
Letter.

 

4.6                                        The Company shall provide (and shall procure that any Group Company which
employs Participants provides) sufficient monies to enable the Trustees to, and
will use its best endeavours to procure that the Trustees will, acquire
sufficient Shares to satisfy the Options granted to Participants.

 

5                                                  Calculation
of awards

 

5.1                                        The value of the maximum number of Shares which are the subject of an
Award Letter shall be as determined by the Committee, but shall not exceed the
following percentage of the Participant’s Salary at the Award Date namely:

 

5.1.1                             Group Chief Executive of the Company – not
exceeding 200%.

 

5.1.2                             Other Executive Directors of the Company
and Senior Executives approved by the Committee – not exceeding 160%.

 

5.1.3                             Senior Eligible Employees – not exceeding
60%.

 

5.1.4                             Other Eligible Employees – not exceeding
40%.

 

5.2                                        If a Participant becomes an Eligible Employee during the calendar year of
the Award Date the value of the maximum number of Shares which are the subject
of such Participant’s Award Letter shall be all or such proportion of the full
percentage applicable to that Participant as may be determined by the
Committee.

 

5.3                                        The maximum number of Shares to which a Participant may become entitled
under an Award Letter shall be calculated by dividing the value determined in
accordance with Rules 5.1 and 5.2 by the average value of a Share during
the calendar year preceding the relevant Award Date (on a basis determined by
the Committee but calculated by reference to its Market Value during such year)
and rounding up to the nearest whole number of Shares.

 

5

 

6                                                  Restriction
on transfer of awards

 

6.1                                        An Award Letter shall be personal to a Participant and neither an Award
Letter nor any interest in an Award Letter may be transferred, assigned, pledged,
charged or otherwise dealt with by a Participant for the benefit of any person
other than by way of transfer to the Participant’s personal representatives in
the event of the Participant’s death (in which case the provisions of Rule 8.5
shall apply).

 

6.2                                        If a Participant deals or attempts to deal with an Award Letter or any
interest in an Award Letter in breach of Rule 6.1 the provisions of such
Award Letter shall lapse forthwith.

 

7                                                  Options over shares

 

7.1                                        The Trustees shall grant to
each Participant an Option over shares which are the subject of an Award Letter
to the extent that the performance requirements set out in this Rule 7 are
achieved and if the Remuneration Committee confirms to the Trustees that the
underlying financial performance of the Company justifies the grant.

 

7.2                                        As soon as practicable
following the Measurement Period ending on the 31 December preceding the
third anniversary of the Award Date the TSR of each of the Comparator Companies
which are still quoted on the London Stock Exchange at the end of the
Measurement Period shall be listed in order so that the one having the highest
TSR is ranked first.

 

7.3                                        If the list referred to in Rule 7.2
indicates that the Company is in the top 20% of the Comparator Companies in the
list the Option will be granted over all the Shares which are the subject of
the relevant Award Letter as from the third anniversary of the relevant Award
Date.

 

7.4                                        If the list referred to in Rule 7.2
indicates that the Company is in the bottom 50% of the Comparator Companies in
the list no Option will be granted over the Shares which are the subject of the
relevant Award Letter.

 

7.5                                        If neither Rule 7.3 nor Rule 7.4
applies the Option will be granted over a proportion of the maximum number of
the Shares which are the subject of the Award Letter.  Such proportion shall be determined on a
straight progression from 25% if the Company is at the 50th
percentile of the Comparator Companies in the list, to the maximum number of
Shares which are the subject of the Award Letter if the Company is in the top
20th percentile of such Comparator Companies.  Such Option shall be rounded up the nearest
whole number of shares and any interest of the Participant in the balance of
the Shares which are the subject of such Award Letter shall lapse.

 

6

 

7.6                                        As soon as reasonably
practicable after the list referred to in Rule 7.2 has been prepared and
the Remuneration Committee has confirmed to the Trustees that the underlying
financial performance of the Company justifies the grant of the Options
referred to in Rule 7.1 the Company shall forward a copy of the list to
each Participant together with a certificate executed as a deed by the Trustees
evidencing the Option granted to such Participant.  If the Remuneration Committee does not so
confirm within six months following the end of the Measurement Period the
relevant Award Letter will lapse.

 

8                                                  Release
of awards

 

8.1                                        An Option may be exercised in whole or in part in accordance with its
terms.  The Participant shall deliver to
the Company a notice in writing in such form as may be prescribed from time to
time by the Directors (which may be endorsed on the Option certificate) stating
therein the number of Shares in respect of which the Participant desires to
exercise the Option, together with the relevant Option certificate.

 

8.2                                        The notice shall be expressed to take effect immediately upon its receipt
by the Company and such date shall constitute the date of exercise of such
Option.  A notice shall be of no effect
unless received by the Company before the expiry of the period in which an
Option may be exercised. Upon exercise of the Option the Trustees shall
transfer the relevant Shares to the order of the Participant.

 

8.3                                        A Participant shall not be entitled to exercise an Option pursuant to
this Rule during a Close Period or at any time when the exercise is
prohibited in a jurisdiction applicable to the Participant.

 

8.4                                        If the aggregate number of Shares in respect of which an Option
certificate has been delivered to the Company in accordance with sub-Rule 8.1
above exceeds the number of Shares in respect of which the Participant has
stated in the accompanying notice that the Option is to be exercised, the
Company shall in due course issue to the Participant an Option certificate in
respect of the balance, which shall state the date on which the Option was
exercised in part.

 

8.5                                        If a Participant dies his or her personal representative may exercise any
subsisting Option within 12 months after the date of death.  In addition the Committee may in its absolute
discretion instruct the Trustees to transfer to the Participant any Shares
which are the subject of a subsisting Award Letter taking into account the length
of the period since the Award Date and the underlying financial performance of
the Company during such period.  To the
extent that the discretion is not exercised within the 6 months following the
date of death the Award Letter will lapse.

 

8.6                                        If a Participant ceases to be employed by a Group Company for any reason
other than death the Participant may exercise any outstanding Option only
within the period of six months following the date of such cessation of
employment.

 

7

 

8.7                                        If a Participant ceases to be employed by a Group Company as a result of
Retirement, redundancy (within the meaning of the Employment Protection
(Consolidation) Act 1978), illness, injury or disability, in relation to any
Award Letters which have not lapsed the Trustees shall, unless the Committee in
its absolute discretion otherwise determines within six months of such
cessation of employment, grant an Option over Shares. Such Option shall be
granted with the Committee taking into account the underlying financial
performance of the Company in the period since the Award Date and otherwise in
accordance with Rule 7, but (unless in its determination the Committee
specifies a different basis)

 

8.7.1                             scaled down pro-rata to the proportion of the relevant Measurement Period
which has actually elapsed at such cessation; and

 

8.7.2                             so that the TSR of each Comparator Company shall be calculated and ranked
at the end of the month immediately preceding such cessation.

 

                                                         Any such Option may be
exercised only within the period of six months following the date of such
cessation of employment and the Award Letter shall automatically lapse in
respect of any Shares which are not the subject of an Option.

 

8.8                                        If a Participant ceases to be employed by a Group Company between an
Award Date and the third anniversary thereof as a result of dismissal or
resignation the Participant shall not be granted an Option over any shares
comprised in an Award Letter outstanding at the date of such cessation of
employment unless and to the extent that, within six months of the date of such
cessation, the Committee in its absolute discretion otherwise determines and
provided that the Participant has not been dismissed for dishonesty or
misconduct.  Any such Option may be
exercised only within the six month period and the Award Letter shall
automatically lapse in respect of any Shares not made the subject of an Option.

 

                                                         For the purposes of this Rule 8.8 a decision by the
Committee that a Participant has been dismissed for dishonesty or misconduct
shall be conclusive.

 

8.9                                        A Participant shall not be entitled by way of compensation for loss of
office, wrongful or unfair dismissal or otherwise to any sum or any benefit to
compensate the Participant for the loss of Shares which were the subject of an
Award Letter or any other right or benefit accrued or in prospect under the
Plan.

 

8

 

9                                                  Transfer
of shares

 

9.1                                        Any transfer of Shares to a Participant shall be subject to such consent,
if any, of HM Treasury or other authorities, whether of the United Kingdom or
elsewhere, as may from time to time be required and it shall be the
responsibility of the Participant to obtain and comply with the requirements of
such consents.

 

9.2                                        Shares shall not carry the right to dividends or other distributions paid
by reference to a qualifying date falling before the date of exercise of an
Option but shall in all other respects rank pari passu with the other Shares in
issue.

 

10                                           Change of
control

 

10.1                                 For the purposes of this Rule, a ‘change of control’ shall be deemed to
take place if:

 

10.1.1                       any
individual, company, corporation or other entity acquires more than 50% of the
then outstanding equity of the Company entitling the holder to vote generally
in the election of directors of the Company; or

 

10.1.2                       any
scheme of arrangement sanctioned by the Court under section 425 of the
Companies Act 1985 becomes effective (except where Rule 11 applies); or

 

10.1.3                       the
Company goes into liquidation (except where Rule 11 applies).

 

10.2                                 In the event of a ‘change of control’ as defined in subsection 10.1
above, unless the Committee makes other arrangements within one month
thereafter which the auditors of the Company first confirm in writing to the
Committee are in their opinion fair and reasonable to the Participants the
Trustees shall grant to each Participant an Option over the appropriate number
of Shares which are the subject of an Award Letter (as if the date of such
change of control were both the end of a Measurement Period and the third
anniversary of the relevant Award Date for the purposes of Rule 7).  The Award letter shall automatically lapse in
respect of any shares not the subject of the Option.

 

9

 

11                                           Adjustments

 

In the event of any
reconstruction, amalgamation, reorganisation, liquidation for the purposes of
reconstruction, consolidation, sub-division or other change in the capital
structure of the Company affecting the Shares, the number and class of Shares
subject to outstanding Award Letters and outstanding Options under the Plan
shall be substituted or adjusted in such manner as may be determined to be
reasonable, appropriate and equitable by the Remuneration Committee, and
confirmed as being fair and reasonable by the auditors of the Company for the
time being, to prevent dilution or enlargement of the rights of Participants
and provided that the number of Shares subject to any Award Letter or Option
shall always be a whole number.

 

10

 

12                                           Administration
of the scheme

 

12.1                                 The Trustees shall waive all rights to dividends on Shares held by them
in accordance with these Rules.

 

12.2

 

12.2.1                       Except
as otherwise provided, notices or documents required to be given to an Eligible
Employee or a Participant shall be properly given if delivered to the relevant
person by hand at his or her normal place of work or sent to the relevant
person by post at his or her last known address and where a notice is sent by
post it shall be deemed to have been given 48 hours after it was put into the
post properly addressed and stamped.

 

12.2.2                       Except
as otherwise provided, notices or documents required to be given to the Company
by a Participant shall be properly given if delivered by hand to the Secretary
of the Company at the Company’s registered office or sent to the Secretary by
post at that office and where a notice is sent by post it shall be deemed to
have been given 48 hours after it was put into the post properly addressed and
stamped.

 

12.3                                 A Participant shall not be treated as having ceased to be an Eligible
Employee merely by reason of the occurrence of any of the following:

 

12.3.1                       a
transfer of his employment from one Group Company to another; or

 

12.3.2                       absence
of no more than 29 weeks due to pregnancy or confinement (unless the
Participant shall previously have notified her intention not to return in which
case her employment shall be deemed to be terminated on the date she so
notifies her employer); or

 

12.3.3                       any
leave of absence in excess of 90 days approved by the Group Company which
employs the Participant, provided that the employee’s right to re-employment is
guaranteed either by statute or by contract; or

 

12.3.4                       the
transfer of the undertaking or part undertaking in which the Participant is
employed to another Group Company.

 

11

 

	
  12.4

  	
   

  	
  Unless the Committee otherwise determines a
  Participant shall be treated as having ceased to be an Eligible Employee by
  reason of the occurrence of either of the following:

  
	
   

  	
   

  	
   

  
	
  12.4.1

  	
   

  	
  the Subsidiary by which the Participant is
  employed ceasing to be a Subsidiary;

  
	
   

  	
   

  	
   

  
	
  12.4.2

  	
   

  	
  the transfer of the undertaking or part
  undertaking in which the Participant is employed to any person other than another
  Group Company.

  
	
   

  	
   

  	
   

  
	
  12.5

  	
   

  	
  Nothing contained in the Plan shall prevent the
  Company from adopting other employee benefit arrangements, including further
  employees’ share schemes.

  
	
   

  	
   

  	
   

  
	
  12.6

  	
   

  	
  Neither the
  action of the Company in establishing the Plan, nor any action taken by it or
  by the Committee under the Plan or any Award Letter, nor any provision of the
  Plan, shall be construed as giving to any person the right to be retained in
  the employment of a Group Company.

  
	
   

  	
   

  	
   

  
	
  12.7

  	
   

  	
  Subject to the provisions of the Trust Deed and
  the Plan the Committee shall have full power:

  
	
   

  	
   

  	
   

  
	
  12.7.1

  	
   

  	
  to construe and interpret the Rules of the
  Plan; to establish, amend or waive regulations for administration of the Plan
  not being inconsistent with the Rules;

  
	
   

  	
   

  	
   

  
	
  12.7.3

  	
   

  	
  to accelerate the grant of Options over Shares;

  
	
   

  	
   

  	
   

  
	
  12.7.4

  	
   

  	
  to correct errors, omissions or inconsistencies
  in the Plan or in any Award Letter or other document; and to agree with a
  Participant to amend the terms and conditions of any outstanding Award Letter
  to the extent such terms and conditions are within the discretion of the
  Committee as provided in the Plan.

  
	
   

  	
   

  	
   

  
	
  12.8

  	
   

  	
  The Committee may, in its sole discretion,
  delegate to appropriate executives of the Company the administration of the
  Plan. No such delegation by the Committee shall be made with respect to the
  grant of Award Letters or Options and the Committee may not delegate its
  authority to correct errors, omissions or inconsistencies in the Plan or in
  any Award Letter or other document. All authority delegated by the Committee
  under this Rule 12.9 shall be exercised in accordance with the
  provisions of the Plan and any guidelines for the exercise of such authority
  that may from time to time be established by the Committee.

  

 

12

 

13                                           Amendment
– termination

 

The Committee may amend, terminate or suspend the
Plan but no such action may impair or adversely affect the existing rights of a
Participant under any Award Letter or Option without the Participant’s consent.

 

14                                           Effective
date of plan

 

The Plan shall have effect from 1 January 1996
except in relation to the Group Chief Executive for whom the Plan shall have
effect from 1 January 1995.

 

16                                           Term of
plan

 

No Award shall be made under the Plan after 31 March 2006
(or such earlier date as the Plan shall be terminated by the Committee) but so
that the foregoing shall not prevent any amendment, modification or suspension
at any time of any Award Letter or the waiver at any time of any terms or
conditions thereof by the Committee under and in accordance with the provisions
of the Plan or the amendment of the Plan by the Committee under Rule 13.

 

17                                           Governing
law

 

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

 

13

 

Schedules

 

1.                                               Award letter

 

2.                                               Total Shareholder Return

 

Schedule 1

 

Dear
[                          ]

 

I am pleased to confirm that you have been granted
a conditional award of [ ] shares in Prudential pIc in accordance with the Rules of
the Prudential Restricted Share Plan. 
For the purposes of the Rules the Award Date is
[                             ].

 

The number of shares has been calculated by taking
[ ] per cent of your current basic salary and dividing it by the average value
of the month end closing price of Prudential’s shares during [ ].  The share price for the
[                          ]
award is [                        ].

 

For the purposes of determining whether you will
be granted an option over such shares the commencement date of the three-year ‘Measurement
Period’ (as defined in the Rules) is 1 January [ ].  The number of shares over which your option
will be granted will be determined by reference to the extent that the Company’s
‘Total Shareholder Return’ (as defined in the Rules) has reached a specified
target after the Measurement Period, when compared with the Total Shareholder
Return of those of the companies which comprise the FT-SE 100 Share Index on
the first trading day of the London Stock Exchange in the Measurement Period
which are still quoted on that Exchange on the last day of the Measurement
Period.  In addition the Remuneration
Committee will need to be satisfied that the underlying performance of the
Company justifies the grant of an option.

 

Yours sincerely

 

14

 

Schedule 2

 

For the
purposes of Rule 7 TSR in respect of each of the Comparator Companies
shall be calculated as follows using the Finstat price feed or such other
comparable method as the Committee may approve to ascertain the value of a
share:

 

1.              for
the first day of the Measurement Period the average of the values of a share in
the relevant company during the period of three months immediately before the
beginning of the Measurement Period shall be taken and such amount shall be a
cash outflow;

 

2.               for
the last day of the Measurement Period the average of the values of a share in
the relevant company during the period of three months immediately before the
end of the Measurement Period shall be taken and such amount shall be a cash
inflow;

 

3.              gross
dividends per share paid by the relevant company during the Measurement Period
shall be a cash inflow on the day when the relevant company’s shares went
ex-dividend and applied in purchasing the relevant company’s shares at the
close of business on that day at its value;

 

4.              a
retroactive adjustment shall be made for any stock or share split, scrip issue
or rights issue or other like event occurring during the Measurement Period and
any payment by the shareholder for the exercise of rights shall be a cash
outflow;

 

5.              an
appropriate adjustment shall be made for any merger, takeover or other change
in capital so as to preserve the original notional investment;

 

6.              the
TSR shall be the rate of return calculated from the amounts determined in
accordance with Paragraphs 1 to 5 above.

 

15

 

M&G Limited

 

RULES OF THE

 

M&G EXECUTIVE LONG TERM
INCENTIVE PLAN

 

Adopted by a
resolution of the board of directors of Prudential on:

 

13 April 2008

 

Approved by a
resolution of Prudential shareholders on:

 

[15 May] 2008

 

 

Table of Contents

 

Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  Interpretation

  	
  1

  
	
   

  	
   

  	
   

  
	
  2

  	
  Making of Awards

  	
  3

  
	
   

  	
   

  	
   

  
	
  3

  	
  Adjustment of Awards

  	
  4

  
	
   

  	
   

  	
   

  
	
  4

  	
  Determining the Award Value on
  payment

  	
  4

  
	
   

  	
   

  	
   

  
	
  5

  	
  Payment of Award Value

  	
  5

  
	
   

  	
   

  	
   

  
	
  6

  	
  Termination of Employment

  	
  6

  
	
   

  	
   

  	
   

  
	
  7

  	
  Change of Control

  	
  7

  
	
   

  	
   

  	
   

  
	
  8

  	
  Withholding Taxes and Social
  Security

  	
  8

  
	
   

  	
   

  	
   

  
	
  9

  	
  No Contractual Rights to an award

  	
  8

  
	
   

  	
   

  	
   

  
	
  10

  	
  Administration of Plan

  	
  8

  
	
   

  	
   

  	
   

  
	
  11

  	
  Notices

  	
  9

  
	
   

  	
   

  	
   

  
	
  12

  	
  Amendment of Rules

  	
  10

  
	
   

  	
   

  	
   

  
	
  13

  	
  Governing Law and Jurisdiction

  	
  10

  

 

1

 

Rules of the M&G Executive Long Term
Incentive Plan

 

1                                      Interpretation

 

In these Rules, unless the context otherwise requires, the following
words and expressions have the following meanings:

 

“Adoption Date” means the
date on which the Plan is adopted by the board of Prudential;

 

“Award” means a
conditional right to a payment under the Plan calculated by reference to a
number of Phantom Shares;

 

“Award Date” means the
first day of the Financial Year in which an Award is granted;

 

“Award Notice”  means a notice issued to the Participant
setting out the terms and conditions of an Award;

 

“Award Value” means the
amount payable to a Participant calculated according to Rule 4 (and Rules 6.5
or 7 where applicable);

 

“Committee”  means the Remuneration Committee of the
board of Prudential or any other duly authorised committee or any person or
persons to whom the board of Prudential have delegated some or all of their
functions under the Plan;

 

“Change of Control”  means

 

(i)           a person acquiring more than 50% of the ordinary share
capital of Prudential;

 

(ii)          the merger of Prudential and another company

 

(iii)         the company in which the Participant is employed
ceasing to be a member of the Prudential Group;

 

(iv)         a transfer of the business or undertaking in which the
Eligible Employee is employed to a person/company who/which is not a member of
the Prudential Group; or

 

(v)          any other circumstances which, following a corporate
event, the Committee determines should be treated as a Change of Control for
the purposes of this Plan;

 

 “Control” means in relation to a company, the power of a person
to secure by means of holding shares or the possession of voting power in, or
in relation to, that or any other company or by virtue of any powers conferred
by the bylaws, articles of association or other document regulating that or any
other company, that the affairs of the first-mentioned company are conducted in
accordance with the wishes of that person;

 

“Determination Date” means
the date on which the Award Value is determined as described in Rule 5.

 

“Disability” means in
respect of a Participant, long-term illness or physical or mental deterioration
of a permanent nature which to the reasonable satisfaction of the Committee,
which may at its absolute discretion seek independent medical

opinion(s), is sufficiently serious to prevent the Participant from following
his normal employment and which seriously impairs his earning capacity.  It does not mean a decline in energy or
ability;

 

 

“Effective Date” means the
date on which all conditions to which a Change of Control is subject are
satisfied;

 

“Eligible Employee” means
any director or employee of M&G or any member of the Prudential Group who
has not given or been given notice terminating his employment or directorship;

 

“Financial Year” means a
financial year of M&G;

 

“Initial Value” means the
initial value of a Phantom Share being, unless the Committee otherwise decides,
£1;

 

“M&G” means M&G
Limited, a company registered in England and Wales whose registered office is
at Laurence Pountney Hill, London EC4R 0HH;

 

“M&G Group”  means  M&G and its
Subsidiaries and the relevant proportion of any other entities whose results
are disclosed as part of M&G in the Prudential accounts excluding, in such
manner as the Committee considers reasonable, the operating profits of PruCap
and such other businesses as the Committee may from time to time reasonably
consider to be outside the management of Participants;

 

“M&G Investment Performance Measure”
means the midpoint of the aggregated weighted and ranked fund performance of
the relevant M&G managed funds as selected by the Committee from time to
time derived from the then current funds of M&G with weightings to reflect
their relative importance to the M&G business model and fund performance
determined by measurement against similar funds using the appropriate benchmark
or sector for each relevant fund or some other method agreed by the Committee
to be appropriate.  The Committee will
maintain the list of the relevant M&G funds;

 

“Operating Profit” means,
subject to Rules 3, 6.5 and 7, the disclosed operating profit of M&G
Group as shown in the Prudential plc results as adjusted for relevant items by
the Committee from time to time;

 

“Participant” means an
individual who holds a Subsisting Award or, where the context permits, his
legal personal representatives;

 

“Performance Period” means
the three consecutive Financial Years starting with the Financial Year in which
the Award is made.

 

“Phantom Share” means a
notional unit by reference to which the amount of any payment to a Participant
under the Plan is determined;

 

“Plan” means the M&G
Executive Long Term Incentive Plan as constituted by these Rules in their
present form or as amended from time to time;

 

“Prudential” means
Prudential plc;

 

“Prudential Group” means
Prudential and its Subsidiaries;

 

“Subsidiary” has the
meaning given in section 1159 Companies Act 2006;

 

“Subsisting Award” means
an Award that has not Vested or been forfeited.

 

 

1.1                            In
these Rules, unless otherwise specified:

 

1.1.1                   the
contents and Rule headings are inserted for ease of reference only and do
not affect their interpretation;

 

1.1.2                   a
reference to a Rule is a reference to a rule of the Plan;

 

1.1.3                   the
singular includes the plural and vice-versa and the masculine includes the
feminine;

 

1.1.4                   a
reference to a statutory provision includes any statutory modification,
amendment or re-enactment thereof; and

 

1.1.5                   the
Interpretation Act 1978 applies to the Plan in the same way as it applies to an
enactment.

 

2                                      Making
of Awards

 

2.1                            Persons
to whom Awards may be made

 

An Award may only be made to an individual who is an Eligible Employee
at the time of the Award.

 

2.2                            Timing
of Awards

 

An Award may be made at any time, but not:

 

2.2.1                   earlier
than the Adoption Date; nor

 

2.2.2                   later
than the tenth anniversary of the Adoption Date.

 

2.3                            Procedure
for making Awards

 

Awards shall be made by the Committee, which shall have absolute
discretion (subject to these Rules) over whether to make Awards and the number
of Phantom Shares subject to such Awards. 
Each Award shall be evidenced by an Award Notice issued to the
Participant by M&G as soon as reasonably practicable after it has been
made.

 

2.4                            Award
Notices

 

Each Award Notice shall state:

 

2.4.1                   the
Award Date;

 

2.4.2                   the
number of Phantom Shares the subject of the Award;

 

2.4.3                   the
Initial Value of each Phantom Share; and

 

2.4.4                   the
Performance Period;

 

and shall state, or have attached to it in the form of a schedule, any
further terms and conditions applicable to the Award.  Subject thereto, an Award Notice shall be in
such form as the Committee may determine from time to time.

 

 

2.5                            Non-transferability
of Awards

 

An Award shall be personal to the Eligible Employee to whom it is made
and, subject to Rule 6, shall not be capable of being transferred, charged
or otherwise alienated and shall be forfeited immediately if the Participant
purports to transfer, charge or otherwise alienate the Award.

 

3                                      Adjustment
of Awards

 

3.1                            Circumstances
in which Committee shall consider adjustment of Awards

 

The Committee shall have discretion, where fair and equitable, to make
adjustments to the terms and conditions applicable to Subsisting Awards,
including the definition of Operating Profit and must consider exercising such
discretion in the following circumstances:

 

3.1.1                   a
change in the accounting policy of M&G which affects the method of
calculating Operating Profit;

 

3.1.2                   any
Financial Year which is more or less than 12 months;

 

3.1.3                   the
merger of the M&G business with another business;

 

3.1.4                   the
demerger or disposal of part of the M&G business assets;

 

3.1.5                   any
person (including a person acting in concert with others), other than any
company in the Prudential Group, obtaining Control of M&G;

 

3.1.6                   any
person (including a person acting in concert with others) obtaining Control of
Prudential; or

 

3.1.7                   any
other change in M&G’s structure that has a material impact on the value of
Subsisting Awards.

 

3.2                            Process
for adjusting Awards

 

The Committee shall consider what, if any, fair and equitable
adjustments should be made to Awards to take into account circumstances such as
those referred to in Rule 3.1, having regard to any recommendations after
consulting professional advisers as appropriate.

 

3.3                            Notification
of Participants

 

If the Committee decides to make an adjustment to an Award, M&G
shall notify the Participant as soon as practicable thereafter and issue a new
Award Notice to the Participant.

 

4                                      Determining
the Award Value on payment

 

Subject to Rule 4.2.3, the Award Value on payment will be the
Final Value, as defined in 4.1, multiplied by the Adjustment Factor (as
determined under Rule 4.2), multiplied by the Investment Performance
Percentage (as defined in Rule 4.3) and then multiplied by the number of
Phantom Shares set out in the Award Notice.

 

 

4.1                            Final
Value

 

The Final Value will be the Initial Value increased or decreased by the
same percentage as the percentage increase or decrease in Operating Profit
between the Financial Year immediately before the start of the Performance
Period and the last Financial Year in the Performance Period.

 

4.2                            Adjustment
Factor

 

The Adjustment factor will be as follows:

 

4.2.1                   1 if
the Operating Profits in the last Financial Year of the Performance Period are
at least equal to the average of the Operating Profits in the Financial Year
immediately before the start of the Performance Period and all the Financial
Years in the Performance Period;

 

4.2.2                   0-1
on a straight line basis if the Operating Profits in the last Financial Year of
the Performance Period are between zero and equal to the average of the
Operating Profits in the Financial Year immediately before the start of the
Performance Period and all the Financial Years in the Performance Period;

 

4.2.3                   The
Final Value will be zero in the event of a loss or Operating Profits equal to
zero in the last Financial Year of the Performance Period.

 

4.3                            Investment
Performance Percentage

 

4.3.1                   The
Investment Performance Percentage will be the percentage in the table below
determined by reference to the quartile ranking of the M&G Investment
Performance Measure measured over the Performance Period.

 

	
  Quartile ranking of the M&G

  Investment Performance Measure

  	
   

  	
  Investment Performance

  Percentage

  
	
   

  	
   

  	
   

  
	
  Top quartile

  	
   

  	
  200%

  
	
   

  	
   

  	
   

  
	
  Second quartile

  	
   

  	
  the percentage determined in accordance with
  Rule 4.3.2 below

  
	
   

  	
   

  	
   

  
	
  Third
  quartile

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  
	
  Fourth
  quartile

  	
   

  	
  0%

  

 

4.3.2                   If
the M&G Investment Performance Measure is in the second quartile, the
Investment Performance Percentage will be 100% if it is at the 50th
percentile and 200% if it is at the 25th percentile (top quartile),
with percentages between those points determined on a straight-line basis by
the Committee.

 

5                                      Payment
of Award Value

 

Before or as soon as reasonably practicable (and in any event not later
than 30 days) after the announcement of Prudential’s results through a
regulatory information service for the last Financial Year in the Performance
Period, the Committee shall determine the Award Value for each Participant in
accordance with Rule 4. The date of that determination shall be the “Determination Date”.

 

 

Save as otherwise provided in these Rules, M&G shall pay to the
Participant an amount equal to the Award Value within 30 days of the
Determination Date.

 

6                                      Termination
of Employment

 

6.1                            Death

 

If a Participant dies before the Determination Date, M&G shall pay
to the Participant’s personal representatives an amount determined in
accordance with Rule 6.5 as soon as reasonably practicable after death and
in any event not later than 60 days after the grant of probate or representation
in respect of the Participant’s estate (or, if later, 60 days after audited
accounts for all the relevant Financial Years are available).

 

6.2                            Disability

 

If a Participant ceases to be employed by M&G before the
Determination Date by reason of Disability, M&G shall pay to him an amount
determined in accordance with Rule 6.5 as soon as reasonably practicable
and in any event not later than 60 days after the cessation of employment (or,
if later, 60 days after audited accounts for all the relevant Financial Years
are available).

 

6.3                            Cessation
of Employment following a Change of Control

 

If a Participant ceases to be employed by M&G before the
Determination Date by reason of:

 

6.3.1                  dismissal
within 12 months following the Effective Date of a Change of Control if the
dismissal is, in the absolute discretion of the Committee in consultation with
an independent external advisor as appointed by the Committee, attributable to
the Change of Control; or

 

6.3.2                  resignation
within 12 months following the Effective Date of a Change of Control if the
resignation is, in the absolute discretion of the Committee in consultation
with an independent external advisor as appointed by the Committee,
attributable to the Change of Control.

 

M&G shall pay to him an amount determined in accordance with Rule 6.5
as soon as reasonably practicable and in any event not later than 60 days after
the cessation of employment (or, if later, 60 days after audited accounts for
all the relevant Financial Years are available).

 

6.4                            Other
leavers

 

If a Participant ceases to be employed by M&G before the date the
Award Value is paid in any circumstances not mentioned in Rules 6.1 to
6.3, his Award shall, unless the Committee determines otherwise, be forfeited
immediately in which case the Participant shall not be entitled to any further
cash payment under the Plan.

 

If the Committee exercises its discretion such that an Award is not
forfeited, the Committee shall determine the basis upon which the Award Value
shall be calculated and the new Determination Date but the Award Value shall
not be more than the Award Value calculated in accordance with Rule 6.5.

 

 

For the purpose of this Rule 6.4, a Participant shall cease to be
employed by M&G on the earlier of the date of resignation or date of termination
of employment. .

 

6.5                            Determining
Award Value following termination of employment

 

Where a Participant ceases to be employed by M&G in the
circumstances mentioned in Rules 6.1 to 6.3 the Award Value will be
determined in accordance with Rule 4 varied as follows:

 

6.5.1                   If
the Participant ceases to be employed when there is no completed Financial Year
the Award Value will be the same as the Initial Value.

 

6.5.2                   In
any subsequent period the Final Value, the Adjustment Factor and the Investment
Performance Percentage will be calculated as at the end of the last completed
Financial Year.

 

6.5.3                   The
Award Value determined as described above will be reduced (but not increased)
as follows:

 

 

where:

 

	
  a

  	
   

  	
  =

  	
   

  	
  the Award Value to be paid following Rule 6.5;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b

  	
   

  	
  =

  	
   

  	
  the number of days between the Award Date and the
  date of death or cessation of employment;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c

  	
   

  	
  =

  	
   

  	
  the number of days in the original Performance
  Period;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d

  	
   

  	
  =

  	
   

  	
  the Award Value determined as described above.

  

 

6.6                            Meaning
of ‘ceasing to be employed by M&G’

 

For the purposes of this Rule 6, with the exception of rule 6.4,
a person shall not cease to be employed by M&G until he is no longer an
employee  or director of any member of the
Prudential Group.

 

6.7                            Lapse
of Award after payment

 

If a Participant or his personal representatives becomes entitled to
any payment in accordance with this Rule 6, the Participant will not be
entitled to any other payment in respect of it by reference to an event arising
after that which gave rise to the payment.

 

7                                      Change
of Control

 

In the event of a Change of Control the Award will either vest to the
extent determined by the Committee in its absolute discretion in accordance
with Rule 6.5 or continue and vest on the normal Determination Date.  In each case the Award Value in respect of
any Awards will be the higher of:

 

(a)                                the Award Value calculated in
accordance with Rule 4 (and Rule 6.5 if applicable); and

 

 

(b)                              the Award Value calculated in accordance
with Rule 4 (and Rule 6.5 if applicable) but by reference to the
Operating Profit for the last Financial Year in the Performance Period
projected in the business plan most recently adopted by the Board of Prudential
prior to the Change of Control.

 

8             Withholding Taxes
and Social Security

 

Where, in relation to an Award, M&G or any company in the
Prudential Group (as the case may be) is liable, or is in accordance with
current practice believed by M&G to be liable, to account to any revenue or
other authority for any sum in respect of any employee’s tax or employee’s
social security liability in respect of the Award or any payment made under the
Plan, that amount may be deducted from any payment made under the Plan.

 

9             No Contractual
Rights to an award

 

9.1         Notwithstanding
any other provision of the Plan:

 

9.1.1      the Plan shall
not form part of any contract of employment between M&G or any company in
the Prudential Group and an Eligible Employee;

 

9.1.2      unless expressly
so provided in his contract of employment, an Eligible Employee has no right to
be made an Award;

 

9.1.3      the benefit to an
Eligible Employee of participation in the Plan (including, in particular but
not by way of limitation, any Awards held by him) shall not form any part of
his remuneration or count as his remuneration for the purpose of entitlement to
any benefit plan including any employer contribution to any pension plan; and

 

9.1.4      if an Eligible
Employee ceases to be employed by M&G or a company in the Prudential Group,
he shall not be entitled to compensation for the loss of any right or benefit
or prospective right or benefit under the Plan (including, in particular but
not by way of limitation, any Awards held by him which are forfeited by reason
of his ceasing to be so employed) whether by way of damages for unfair
dismissal, wrongful dismissal, breach of contract or otherwise save as provided
in clauses 6.1 to 6.3.

 

By accepting the Award and not renouncing it, an Eligible Employee is
deemed to have agreed to the provisions of this Rule 9.

 

10                               Administration
of Plan

 

10.1                     Committee
responsible for administration

 

The Committee shall be responsible for, and shall have the conduct of,
the administration of the Plan. It shall carry out such administration in
accordance with any terms of reference and operating guidelines which are not
inconsistent with these Rules.  Subject
to the provisions of any such terms of reference and operating guidelines, the
Committee may from time to time make, amend or rescind regulations for the
administration of the Plan provided that such regulations shall not be
inconsistent with these Rules.

 

 

10.2                     Committee’s
decision final and binding

 

The decision of the Committee shall be final and binding in all matters
relating to the administration of the Plan, including but not limited to the
resolution of any dispute concerning, ambiguity in, or any inconsistency of,
these Rules or any document used in connection with the Plan.

 

In the event of any dispute as to the calculation of Operating Profit
or other relevant performance calculation for the purposes of the Plan the
Committee shall consult with an independent external advisor as appointed by
the Committee but following such consultation the decision of the Committee as
to the calculation of Operating Profit or other relevant performance
calculation shall be final and binding.

 

Nothing in these Rules shall be construed as establishing any duty
of care or other duty between any member of the Committee (in the performance
of the functions of the Committee under these Rules) and any Eligible Employee
or Participant, and no member of the Committee shall have any personal
liability to any Eligible Employee or Participant as a result of any decision
of the Committee under these Rules.

 

10.3                     Discretionary
nature of Plan

 

All Awards shall be made entirely at the discretion of the Committee.

 

10.4                     Cost
of Plan

 

The cost of introducing and administering the Plan shall be met by
M&G.

 

11                                Notices

 

11.1                      Notice
by Committee

 

Save as provided for by law, any notice, document or other
communication given by, or on behalf of, the Committee to any person in
connection with the Plan shall be deemed to have been duly given if delivered
by hand or sent by email or fax to that person at their place of work, if the
person is employed by M&G or a company in the Prudential Group, and if the
person is not employed by M&G, if sent by e-mail to such e-mail address as
may be specified by the person from time to time, and sent through the post in
a pre-paid envelope to the postal address last known to M&G to be his
address and, if so sent, shall be deemed to have been duly given on the date of
posting.

 

11.2                      Deceased
Participants

 

Save as provided for by law, any notice, document or other
communication so sent to a Participant shall be deemed to have been duly given
notwithstanding that such Participant is then deceased (and whether or not
M&G has notice of his death) except where his personal representatives have
established their title to the satisfaction of M&G and supplied to M&G
an e-mail or postal address to which notices, documents and other
communications are to be sent.

 

 

12                               Amendment
of Rules

 

12.1                     Power
to amend Rules

 

Subject to Rule 12.2, the Committee may from time to time make
amendments to these Rules.

 

However, the Committee cannot make amendments without the prior
approval of the shareholders of Prudential in general meeting to the advantage
of Participants to the provisions (if any) relating to:

 

12.1.1    the definition of
Eligible Employees; or

 

12.1.2    the proviso
contained within this Rule 12.1; or

 

12.1.3    the basis on
which payments are made under the plan and adjustments to any awards under the
plan

 

except for minor amendments
to benefit the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control or regulatory
treatment for Participants or any member of the Prudential Group.

 

12.2                     Rights
of existing Participants

 

An amendment may not materially and adversely affect the rights of a
Participant under a Subsisting Award except where the amendment has been agreed
in advance by the Participant.

 

12.3                     Notification
of Participants

 

The Committee shall, as soon as reasonably practicable, notify each
Participant of any amendment to these Rules under this Rule 12 (other
than a minor administrative change) and explain how it affects his position
under the Plan.

 

13                               Governing
Law and Jurisdiction

 

13.1                     Governing
law

 

The formation, existence, construction, performance, validity and all
aspects whatsoever of the Plan, any term of the Plan and any Award made under
it shall be governed by English law.

 

13.2                     Jurisdiction

 

The English courts shall have jurisdiction to settle any dispute which
may arise out of, or in connection with, the Plan.

 

13.3                     Participant
deemed to have agreed to submit to jurisdiction

 

By accepting an Award and not renouncing it, a Participant is deemed to
have agreed to submit to such jurisdiction.Exhibit
4.2

 

PRIVATE AND
CONFIDENTIAL

 

DATED

 

20 September 2007

 

PRUDENTIAL
SERVICES LIMITED] (1)

 

and

 

TIDJANE THIAM

 

and

 

PRUDENTIAL PLC
(3)

 

	
   

  	
   

  EXECUTIVE DIRECTOR CONTRACT OF EMPLOYMENT

   

  	
   

  

 

 

 

PARTIES

 

(1)              PRUDENTIAL [SERVICES LIMITED of Laurence Pountney Hill, EC4R 0HH (“the company”)
and

 

(2)              TIDJANE THIAM of
83 Elizabeth Street London SW1W 9PG (“the Executive”)

 

(3)              PRUDENTIAL PLC
of Laurence Pountney Hill, London, EC4R 0HH (“Prudential”)

 

1.                  DEFINITIONS

 

In this Agreement unless the context otherwise
requires:-

 

“Board” means the Board of Directors of Prudential;

 

“Commencement Date” means
[date TBA];

 

“Earnings Cap” means the
maximum allowance from to time under Section 640A of the Income and
Corporation Taxes Act 1988;

 

“Prudential Group” means
Prudential and each of its subsidiaries 
where “subsidiaries” is defined by section 736 of the Companies Act
1985.

 

2.                  APPOINTMENT

 

(1)             The Company shall
employ the Executive and the Executive shall serve the Company as Group Finance
Director of Prudential plc and in other
such capacity as may be agreed (“the Appointment”).  The Executive shall report to the Group Chief
Executive.

 

(2)             The Appointment
is deemed to be effective from the Commencement Date and shall, without
prejudice to the provisions of clause 9(2), continue unless and until
terminated by the Company giving to the Executive not less than 12 months’
prior written notice to expire at any time or the Executive giving to the
Company not less than 12 months’ prior written notice to expire at any time.

 

(3)             Notwithstanding Clause 2(2) above, the
Appointment shall automatically terminate without notice on the Executive
attaining the age of 65.

 

3.                  DUTIES OF THE EXECUTIVE

 

(1)             During the Appointment the Executive
shall use his best endeavours to promote the interests of the Company and each
company in the Prudential Group and shall carry out his duties with all due
expertise, diligence and technical skill, giving at all times the full benefit
of his knowledge and experience.

 

(2)             The Executive
shall perform such duties and exercise such powers in relation to the conduct
and management of the affairs of the Prudential Group as may from time to time
reasonably be assigned or communicated to or vested in him by the Board
consistent with the nature of the Appointment.

 

 

(3)    Where notice of termination has been served
by either the Company or the Executive whether in accordance with clause 2(2) or
otherwise, the Company shall be under no obligation to provide work for or
assign any duties to the Executive for the whole or any part of the relevant
notice period and may require him:

 

                           (i)                   not to attend any
premises of the Company or any other company in the Prudential Group; and/or

 

                           (ii)                to resign with
immediate effect from any offices he holds with the Company or any other
company in the Prudential Group (and any related trusteeships); and/or

 

                           (iii)             to refrain from
business contact with any customers, clients or employees of the Company or any
other company in the Prudential Group; and/or

 

The provision of clause 4(2) shall remain in
full force and effect during any period of suspension under this clause
3(3).  For the avoidance of doubt the
Executive will continue to be bound by duties of good faith and fidelity to the
Company in any period during which he is not required to attend work.

 

(4)    The Board may also suspend all or any of the
Executive’s duties and powers during any period in which the Company and/or the
Board is carrying out an investigation into any alleged act or default of the
Executive.  Such a suspension shall be on
such terms as the Board considers expedient (including a term that the
Executive shall not attend at the Company’s premises during such suspension) providing that:

 

                           (i)                   the Board on or before such suspension notifies
the Executive in writing of such grounds; and

 

                           (ii)                during such suspension the Executive shall be
entitled to the remuneration and benefits due under this Agreement.

 

(5)    The Executive shall at all times promptly give to
the Company and the Board (in writing if so required) all such information and
explanations concerning the affairs of any company within the Prudential Group
as the Company or the Board shall require and of which the Executive is aware.

 

(6)    The Executive shall comply with all instructions and
directions from time to time laid down by the Company and/or the Board for
senior executives including those rules relating to holding and dealing in
the shares of Prudential Group.  The
Executive shall also comply with the requirements laid down by all external
regulatory bodies.

 

 

(7)            The Executive shall allow
the Company supervised access on reasonable notice to all or any of the
properties in which he resides from time to time in order for the Company to
assess, and, if the Company considers it desirable, to carry out at its own
expense those security measures which the Company may consider advisable for
the protection of the Executive.

 

4.                PERFORMANCE OF DUTIES

 

(1)            During the continuance of
the Appointment, the Executive shall (unless prevented by ill-health or accident
or otherwise directed by the Board) devote such of his  time,
attention and abilities to the business and interests of the Company or any
other company in the Prudential Group as the proper performance of his duties
hereunder demands.

 

(2)            The Executive shall not
(unless otherwise agreed by the Company and/or the Board) undertake any other
business or profession, or be, or become directly or indirectly concerned, or
interested in any other business or profession except as holder or beneficial
owner, for the purpose only of a passive minority investment, of securities
dealt in or on any recognised stock exchange (not exceeding 5 per cent of the
total number or value of such securities from time to time in issue).

 

(3)            The Executive shall perform
his duties at such offices of the Company in London or at such other locations
as may be agreed from time to time as the Company or the Board may from time to
time reasonably require.

 

5.                REMUNERATION

 

(1)    During the
Appointment the Company will pay the Executive an annual salary as separately
notified, to accrue from day to day and to be payable by equal monthly
instalments in arrears to a bank nominated by the Executive.  The rate of salary shall be subject to
periodic review but shall not be reduced without the prior written agreement of
the Executive.  The Company reserves the
right to withhold or deduct from the Executive’s salary any amount owed by the
Executive to the Company or any company in the Prudential Group.

 

(2)    The Executive shall be eligible to be
admitted to membership of the DC Section of the Prudential Staff Pension
Scheme details of which have been supplied to the Executive, subject to the
trust deed and rules from time to time governing the scheme. The Scheme is
contracted-in to the state second pension scheme and so no contracting-out
certificate applies to the Appointment.

 

(3)    The Executive’s retirement benefit allowance
will be paid as a salary supplement unless he elects, in writing, for the
amount to be allocated between one of more of the following options:

 

                          (a)      so far as Revenue limits allow, an amount to be
credited to the Executive’s Personal Account in the DC Section.  Matching employer credits will not be made in
respect of this amount and employee contributions must be a whole percentage of
Pensionable Pay;

 

                          (b)  any remaining amount to be paid to the Executive
as a taxable salary supplement.

 

(4)    The Executive
must notify the Company as early as practicable on the first day of any absence
due to sickness or other incapacity. 
Subject to production, if requested, of medical certificates
satisfactory to the Company, full remuneration will continue to be payable
notwithstanding the Executive’s incapacity for work due to sickness or accident
(unless and until the Appointment shall be determined under any terms hereof)
for the first six months 

 

 

of such incapacity. 
During this period of incapacity, the Company shall only give notice
terminating the Appointment on grounds of redundancy, falling within section
139 of The Employment Rights Act 1996 or those circumstances as set out in
clause 9(2). Thereafter the Company may
at its discretion discontinue the payment of remuneration under this Agreement
in which event the rules of the Prudential Staff Long Term Incapacity
Scheme as from time to time in force, will apply to the Executive.

 

(5)     If the Executive needs to undergo a medical
examination at the request of the Company, the cost of this will be met by the
Company and the Company’s medical adviser will be entitled to receive a copy of
any report produced, to discuss it with the doctor who produced it and to
discuss its conclusions with the Company.

 

(6)     If the
Executive is incapable of performing his duties by reason of injury sustained
wholly or partly as a result of negligence, nuisance or breach of any statutory
duty on the part of any third party all payments made to the Executive by the
Company shall (insofar as lawful) be by way of interest free loan repayable to
the Company only when and to the extent that compensation is recovered for loss
of earnings from that third party by legal action or otherwise in so far as it
is not repayable to the Department of Social Security.

 

(7)    The
Executive, his wife and his  unmarried
children below the age of 18 (or 24 if in full time education) will be eligible
free of charge to participate with effect from the Commencement Date until
termination of employment in the Prudential Group medical insurance scheme
currently established with PruHealth.

 

(8)    The
Executive may be eligible to participate in the remuneration plans available
from time to time to senior executives of the Prudential Group (subject to the rules governing
the availability of those benefits generally) which currently include:

 

                            (a)               the Annual Incentive Plan (“AIP”);

 

                            (b)              the Group Performance Share Plan (“GPSP”)

 

                            (c)               the Prudential Services Ltd Share Incentive Plan (“SIP”);
and

 

                            (d)              the Prudential Savings Related Share Option Scheme
(SAYE Scheme”),

 

                            details of which have been supplied to the Executive.

 

                            Any benefits under these plans are non-pensionable.

 

(9)    Participation
in the Prudential AIP, GSPS, SIP, SAYE 
and any other incentive arrangement and Savings Related Share Option
Scheme is a matter entirely separate from the Executive’s terms and conditions
of employment; the Company has no contractual obligation to invite the
Executive’s  participation in any plan
cycle; and in particular if the Executive’s employment shall terminate for
whatever reason (whether lawfully or in breach of contract) he shall not be
entitled to any compensation for any loss of any right or benefit or
prospective right or benefit under any scheme which he might otherwise have
enjoyed whether such compensation is claimed by way of damages for wrongful
dismissal or other breach of contract or by way of compensation for loss of
office or otherwise.

 

(10)   The Executive shall be entitled to an interest free
season ticket loan.

 

 

6.                 EXPENSES AND CAR ALLOWANCE

 

(1)    The
Company, on production of the relevant receipts and/or invoices, shall
reimburse the Executive for all traveling, hotel, entertainment and other
out-of-pocket expenses properly incurred by him from time to time in the
execution of his duties hereunder in accordance with the relevant rules of
the Company for the time being in force.

 

(2)    The Executive
will also be eligible to receive an annual cash car allowance as separately
notified.  Such cash allowance will be
paid in monthly installments (less such deductions as the Company is required
by law to make) at the same time as the Executive’s salary, but will not form
part of his  salary for pensions or other
salary related benefits.

 

(3)    Renewal
of the annual cash allowance hereunder is governed by the rules and
regulations from time to time established for senior executives of the
Prudential Group.

 

7.      HOLIDAY

 

The Executive shall be
entitled to paid time off for breaks away from work in each calendar year (in
addition to statutory holidays) as the proper performance of his  duties hereunder permits and in accordance with the
guidelines laid down by the Company from time to time. Under normal
circumstances this is not expected to exceed five weeks in any year.

 

8.      NON-SOLICITATION

 

(1)    The
Executive undertakes that during the Appointment and (subject to clause 8(2))
for a period of 12 months following the termination of the Appointment (the “Exclusion
Period”) he shall not whether on his own account or otherwise and whether
directly or indirectly:

 

                           (a)     solicit, interfere with, endeavour to entice away or
induce to leave their employment any director or senior manager who is then or
was at the date of termination of the Appointment an employee of or engaged by
the Company or any other company within the Prudential Group and with whom the
Executive had business dealings during the course of his employment in the 12
month period immediately prior to the termination of the Appointment.  Nothing in this clause shall
prohibit the seeking or doing of business not in direct or indirect competition
with the business of the Company or any company within the Prudential Group; or

 

                           (b)     solicit, interfere with or endeavour to or actually
entice away from the Company or any company within the Prudential Group
business orders, or custom for products or services similar to those being
provided by the Company or any company within the Prudential Group from any
person, firm or corporation who was at the date of termination of the
Appointment, or had been at any time within the year ending on that date, a
customer or in the habit of doing business with the Company or any company in
the Prudential Group and with whom the Executive was directly concerned in the
twelve months before the termination of the Appointment.  Nothing in this clause shall
prohibit the seeking or doing of business not in direct or indirect competition
with the business of the Company or any company within the Prudential Group; or

 

                           (c)     carry on, set up,
be employed, engaged or interested in a business anywhere in the UK, Europe, US
or Asia which is or is about to be in competition with the business of the
Company or any company within the Prudential Group as at the date of  termination with
which the Executive was actively involved during the 12 month period 

 

 

immediately prior to termination of the Appointment,
including (but not limited to) the businesses of the companies listed in
Schedule 1 (or such other companies as may, from time to time, carry on
such businesses).  It is agreed that in
the event that any such company ceases to be in competition with the Company
and/or any company within the Prudential Group, this clause 8(1)(c) shall,
with effect from that date, cease to apply in respect of such company.  The provisions of this clause 8(1)(c) shall
not, at any time following the termination of the Appointment, prevent the
Executive from holding shares or other capital not amounting to more than 3% of
the total issued share capital of any company whether listed on a recognised
stock exchange or not and, in addition, shall not prohibit the seeking or doing
of business not in direct or indirect competition with the business of the
Company or any company within the Prudential Group.

 

(2)    The
period during which the restrictions referred to in clause 8 shall apply
following the termination of the Appointment shall be reduced by the period of
notice actually served.  The amount of
time during which, if at all, the Company suspends the Employee under the
provision of clause 3(3), shall also reduce the period during which the
restrictions referred to in clause 8 shall apply.

 

(3)    The
Executive acknowledges and agrees that:

 

                           (a)                each of sub-clauses 8(1)(a) (b) and (c) hereof
constitute an entirely separate and independent restriction on him;

 

                           (b)               the duration extent and application of each of
the restrictions are no greater than is necessary for the reasonable protection
of the proper interests of the Prudential Group; and

 

                           (c)                if any such restriction is found by any court
of competent jurisdiction to be void or unenforceable as going beyond what is
reasonable in the circumstances for the protection of the interests of the
Prudential Group but would be valid if part of the wording was deleted and/or
the period thereof was reduced and/or the territory concerned was reduced the
restriction shall apply within the jurisdiction of that court with such modifications
as may be necessary to make it valid and effective.

 

9.                 TERMINATION OF EMPLOYMENT

 

(1)             The Appointment may be terminated by either party by
notice given in accordance with Clause 2. 
The Company may in its absolute discretion decide, if any payment by the
Company is appropriate, to make the payment either in one lump sum on
termination or for payment to be made in equal monthly instalments on the usual
salary payment dates over the notice period. 
During the period of payment of these monthly instalments the Executive
will be expected to mitigate the position by seeking alternative
employment.  Should the Executive secure
alternative employment which commences while the monthly instalments are being
paid the Executive will be required to notify the Company.  Should the Executive’s new gross monthly be
the same or more than the monthly instalments the Company will cease to be
liable to the Executive in respect of the remainder of the instalments.  Should the Executive’s new gross monthly pay
be less that the monthly instalments the monthly instalments will continue but
may be reduced to take account of the Executive’s new gross monthly pay.

 

 

(2)             Notwithstanding the other provisions of this Agreement
and without prejudice to the rights and remedies of the Company for any breach
of this Agreement, and to the Executive’s continuing obligations under Clauses
8 and 11, the Company shall at any time be entitled by notice in writing to the
Executive to terminate the Appointment immediately in any of the following
circumstances, namely:

 

                          (a)                 if he is or becomes bankrupt or has a receiving
order made against him or compounds with his creditors or otherwise takes
advantage of any statute for the time being in force offering relief for
insolvent debtors; or

 

                          (b)                if  he is guilty
of serious misconduct or behavior such as to bring any company
in the Prudential Group into disrepute (including but without limitation the
commission of a criminal offence (excluding Land Traffic offences) or commits
any serious breach of any of his obligations to the Company or any other
company in the Prudential Group (whether under this Agreement or otherwise) and
such misconduct behaviour or breach justifies summary dismissal; or

 

                          (c)                 if he  refuses to
comply with any lawful orders or directions reasonably given to him by the
Company or the Board or neglects so to comply with material adverse
consequences for the Prudential Group; or

 

                          (d)                if he fails or refuses to perform
substantially the duties of the position which he holds under this Agreement or
engages in willful or reckless conduct injurious to or damaging to the
reputation of the Company or any other company within the Prudential Group; or

 

                          (e)                 if he is prevented from carrying out his
duties by reason of a personal disqualification by an industry regulator,
caused by reasons attributable to the Executive; or

 

                          (f)                   commits any serious or repeated breach of
any of his obligations under this Agreement or the Appointment.

 

(3)             The Executive shall have no claim against
the Company for damages or otherwise by reason of such termination.  Any delay or forbearance by the Company in
exercising any such right of termination shall not constitute a waiver of its
rights in respect of any subsequent occurrence giving rise to such a right.

 

(4)             Without prejudice to the Transfer of
Undertakings (Protection of Employment) Regulations 1981, if at any time during
this Agreement the Executive’s employment is terminated by reason of
reconstruction or amalgamation of the Company and the Executive is offered
employment with any concern or undertaking resulting from such reconstruction
or amalgamation upon terms and conditions no less favourable than the terms of
this Agreement and of similar status then the Executive shall have no claim
against the Company in respect of the termination of the Appointment.

 

 

(5)             The Executive shall promptly deliver to
the Company upon the date of termination:

 

                           (a)                any property provided by the Company or any
other company within the Prudential Group; and

 

                           (b)               all lists of clients or customers,
correspondence, books, and all other documents, papers and records which may
have been prepared by him or have come into his possession in the course of his
employment and the Executive shall not be entitled to and shall not retain any
copies thereof: title and copyright therein shall at all times remain in the
Company.  The Company will on request
make available copies of board minutes and supporting documents which the
Executive reasonably requires in connection with any legal or regulatory
proceedings in which he is or may become involved.

 

(6)             In the event that the Appointment is terminated under
this clause or otherwise and the Executive becomes entitled to any compensation
in connection with the Appointment or its Termination, the Company shall be
entitled to pay any such compensation to the Executive over 12 monthly
installments payable on the last day of every month, where the amount of each
monthly installment shall be equal to A minus B, where A is equal to the total
compensation payable to the Executive divided by 12, and, B is equal to the
total earnings of the Executive (less required deductions for
income tax and employees’ national insurance contributions) referable to any engagement or employment that
the Executive has carried out during that month.

 

10.          EXECUTIVE’S POSITION AS DIRECTOR

 

(1)             The duties of the Executive as a director of any
company within the Prudential Group shall be subject to the Articles of
Association of the relevant company for the time being and (subject to
sub-clause (2) below) shall be separate from and additional to his duties
pursuant to the Appointment.  The
Executive’s salary under this Agreement is inclusive of any remuneration to
which the Executive may be entitled as a director of Prudential or any other
company within the Prudential Group.

 

(2)             If the Executive is removed from office as a director
of Prudential during the Appointment by any resolution of a general meeting or
of the Board or by not being re-elected after retiring by rotation pursuant to
the Articles of Association of Prudential the Executive acknowledges and agrees
that such removal or cessation shall not amount to a breach of the Appointment
and shall not entitle the executive to bring a claim of constructive dismissal,
but such removal or cessation shall automatically
constitute the Company giving notice to terminate the Appointment within the
provisions of clause 2(2).

 

(3)             Upon termination of the Appointment for
whatever reason the Executive shall forthwith in writing resign his position as
a director of Prudential and of any other company within the Prudential Group,
without compensation for loss of office but without prejudice to any other
claims the Executive may have for damages for breach of this Agreement.

 

 

(4)            If the Executive fails to comply with his obligations
in sub-clause 10(3) hereof, he  hereby
irrevocably authorises Prudential to appoint some person in his name and on his
behalf to sign any documents and/or do all things necessary to give effect to
the resignations referred to in sub-clause 10(3) above.

 

11.         CONFIDENTIAL INFORMATION

 

(1)            The Executive shall not, either during the continuance of the Appointment
or thereafter, use to the detriment or prejudice of the Company or any other
company within the Prudential Group or, except in the proper course of his
duties, divulge to any person any Confidential Information concerning the
business or affairs of the Company or any other company within the Prudential
Group which may have come to his knowledge during his employment.  For the purposes of this Agreement “Confidential
Information” shall mean details of suppliers and their terms of business,
details of customers, prices charged to and terms of business with customers,
marketing plans and sales forecasts, any proposals relating to the acquisition
or disposal of a company or business or any part thereof, details of employees
and officers and of the remuneration and other benefits paid to them and any
other information which may reasonably be classified as confidential, but so
that these instructions shall cease to apply to any information which shall
become available generally otherwise than through the fault of the
Executive.  The restrictions
in this clause shall not apply:

 

	
  (i)

  	
   

  	
  to any
  disclosure or use authorised by the Board or required by law or by the
  Appointment; or

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  so as to
  prevent the Executive from using his own personal skill in any business in
  which he may be lawfully engaged after the Appointment is ended, or

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  to prevent the
  Executive making a protected disclosure within the meaning of s43A of the
  Employment Rights Act 1996.

  

 

	
  (3)

  	
  The
  Executive shall maintain all necessary and proper security precautions when
  in the possession of Confidential Information and shall remove Confidential
  Information (in non-electronic form) from Prudential’s premises only to the
  extent it is strictly necessary for the proper performance of his duties
  hereunder. The Executive will comply with the Company’s standards relating to
  confidentiality of information in electronic form.

  

 

12.         GRATUITIES AND CODES OF CONDUCT

 

(1)            Without the Company’s permission the Executive shall
not directly or indirectly accept any commission, rebate, discount or gratuity,
in cash or in kind, from any person who has or is likely to have a business
relationship with any company in the Prudential Group. Express permission is
not required for reasonable business entertainment such as lunches, sporting,
cultural or social events undertaken in the normal course of the Executive’s
duties and in accordance with any directions given by the Company.

 

(2)            The Executive shall comply with all codes of conduct
from time to time adopted by the Board and with all applicable rules and
regulations of The Stock Exchange and any other relevant regulatory body.

 

 

13.          DATA PROTECTION

 

(1)             The Executive
consents to the Company and any company within the Prudential Group processing
data relating to him at any time (whether before, during or after the
Employment) for the following purposes:

 

	
  (i)

  	
   

  	
  performing its
  obligations under the Agreement (including remuneration, payroll, pension,
  insurance and other benefits, tax and national insurance obligations);

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  the legitimate
  interests of the Company and any company within the Prudential Group
  including for the purposes of any sickness policy, working time policy,
  investigating acts or defaults (or alleged or suspected acts or defaults) of
  the Executive, security, management forecasting or planning and negotiations
  with the Executive;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  processing in
  connection with any corporate transaction in which the Company or any company
  within the Prudential Group is involved or any transfer of any business in
  which the Executive performs his duties; and

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  transferring
  data to countries outside the European Economic Area for any of the purposes
  referred to in (i), (ii) or (iii) above.

  

 

(2)             The Executive
explicitly consents to the Company and any company within the Prudential Group
processing sensitive personal data (within the meaning of the Data Protection
Act 1998) at any time (whether before, during or after the Appointment) for the
following purposes:

 

                        (i)       where the sensitive personal data relates to
the Executive’s health, any processing in connection with the operation of the
sickness policy of the Company (or any company within the Prudential Group) or
any relevant pension scheme or monitoring absence;

 

                        (ii)      where the sensitive personal data relates to
an offence committed, or allegedly committed, by the Executive or any related
proceedings, processing for the purpose of the disciplinary purposes of the
Company or of any company within the Prudential Group;

 

                           (iii)    for all sensitive personal data, any
processing in connection with any merger, sale or acquisition of a company or
business in which the Company or any company within the Prudential Group is
involved or any transfer of any business in which the Executive performs his
duties; and

 

                          (iv)    for all sensitive personal data, any
processing in the legitimate interests of the Company or any company within the
Prudential Group.

 

14.          ASSIGNMENT

 

The Company may assign
its interest in this Agreement to any other company within the Prudential Group
with the agreement of the Executive such agreement not to be unreasonably
withheld.

 

 

15.           STATUTORY REQUIREMENTS

 

The Executive shall also
be subject to the terms set out in the Schedule attached to this Agreement in
connection with the Employment Rights Act 1996.

 

16.           NOTICES

 

Any notice or other
document to be given hereunder shall either be delivered personally or be sent
by first class recorded delivery or fax. 
The address for service on the Company shall be its registered office
for the time being and the address for service on the Executive shall be his
last known place of residence.  A notice
shall be deemed to have been served as follows:-

 

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

 

                            (b)              if posted, at the expiration of 48 hours after
the envelope containing the same was delivered into the custody of the postal
authorities;

 

                            (c)               if sent by fax, at the time of dispatch.

 

In proving such service
it shall be sufficient to prove that personal delivery was made, or that the
envelope containing such notice was properly addressed and delivered into the
custody of the postal authorities as a pre-paid, first class, recorded delivery
letter, or that the fax was properly addressed and dispatched as the case may
be.

 

17.           MISCELLANEOUS

 

(1)            This Agreement forms the entire understanding of the
parties as to its subject matter and both parties acknowledge that neither of
them has entered into this Agreement in reliance upon any representation
warranty or undertaking which is not set out in this Agreement as forming part
of the contract of employment of the Executive.

 

(2)            Any reference in this Agreement to an Act of
Parliament shall be deemed to include any statutory modification or
re-enactment thereof whenever made.

 

(3)            The headings shall be disregarded in construing
this Agreement.

 

IN WITNESS the hands of
the Executive and of the duly authorised representative of the Company on the
date first above written.

 

 

THE SCHEDULE

 

In accordance with the
Employment Rights Act 1996, the following terms of the Executive’s appointment
apply on the date of the Agreement as provided therein:-

 

                            (a)               Remuneration -  Clause 5(1)

 

                            (b)              Hours of Work - There are no fixed hours of work -  Clause 4

 

                            (c)               Holidays -  Clause 7

 

                            (d)              Sickness and Injury - the Executive is entitled to be paid during
any period of absence from work due to sickness or injury, subject however to
the provisions of sub-clause 5(3)

 

                            (e)               Pension Arrangements - 
Clause 5(2)

 

                            (f)                 Notice -  Clause 2(2)

 

                            (g)              Job Title -  Clause 2(1)

 

                            (h)              Grievance Procedure - If the Executive seeks to redress any
grievance relating to his employment he should apply in writing to the Chief
Executive of the Prudential Group.

 

                            (i)                  Disciplinary Procedure - There are no disciplinary rules applicable
to senior executives so that any disciplinary action relevant to the Executive
will be considered and handled according to the particular circumstances and
the Executive’s position.  Should the
Executive be dissatisfied with any disciplinary decision he/she should appeal
in writing to the Chief Executive of the Prudential Group.

 

                            (j)                  Date of Commencement of Employment - The date of commencement of employment (i.e.
date of joining Prudential) is the Commencement Date - Clause 1.

 

                            (k)               Place of work - Clause 4(3).

 

                            (l)                  Collective Agreements which directly affect the Executive’s terms
and conditions - none.

 

 

SIGNED by Mark Tucker

on behalf of PRUDENTIAL
CORPORATION PLC

 

	
  /s/ Mark Tucker

  	
   

  
	
   

  	
   

  
	
  In the presence of:-

  	
   

  
	
   

  	
   

  
	
  /s/

  	
   

  

 

 

Date:

 

 

SIGNED by Tidjane Thiam

 

	
  /s/ Tidjane Thiam

  	
   

  
	
   

  	
   

  
	
  In the presence of:-

  	
   

  
	
   

  	
   

  
	
  /s/

  	
   

  

 

 

Date:

 

 

	
  SIGNED by Mark Tucker

  	
   

  
	
  on behalf of PRUDENTIAL
  SERVICES LIMITED

  	
   

  
	
   

  	
   

  
	
  /s/ Mark Tucker

  	
   

  
	
   

  	
   

  
	
  In the presence of:-

  	
   

  
	
   

  	
   

  
	
  /s/

  	
   

  

 

 

Date:

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