Document:

Exhibit
4.8

	
  

  	
  Dated                 2007

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  DIAGEO North America, Inc.   (1)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  «Forename» «Surname»   (2)

  	
   

  

 

 

EMPLOYMENT AGREEMENT

 

Contents

	
  Paragraph

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
  2

  	
   

  	
  APPOINTMENT

  	
   

  	
  1

  
	
  3

  	
   

  	
  CONSIDERATION

  	
   

  	
  2

  
	
  4

  	
   

  	
  DURATION OF THE EMPLOYMENT

  	
   

  	
  2

  
	
  5

  	
   

  	
  SCOPE OF THE EMPLOYMENT

  	
   

  	
  5

  
	
  6

  	
   

  	
  HOURS OF WORK

  	
   

  	
  7

  
	
  7

  	
   

  	
  PLACE OF WORK

  	
   

  	
  7

  
	
  8

  	
   

  	
  COMPENSATION AND BENEFITS

  	
   

  	
  7

  
	
  9

  	
   

  	
  EXPENSES

  	
   

  	
  8

  
	
  10

  	
   

  	
  VACATION

  	
   

  	
  8

  
	
  11

  	
   

  	
  OTHER BENEFITS

  	
   

  	
  8

  
	
  12

  	
   

  	
  RESTRICTIONS DURING THE EMPLOYMENT

  	
   

  	
  9

  
	
  13

  	
   

  	
  DISCLOSURES TO THE COMPANY AND ASSIGNMENT OF TRADE
  SECRETS AND CONFIDENTIAL INFORMATION

  	
   

  	
  9

  
	
  14

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  10

  
	
  15

  	
   

  	
  NON-SOLICITATION AND NON-COMPETE

  	
   

  	
  10

  
	
  16

  	
   

  	
  NOTICES

  	
   

  	
  11

  
	
  17

  	
   

  	
  FORMER CONTRACTS OF EMPLOYMENT

  	
   

  	
  12

  
	
  18

  	
   

  	
  CHOICE OF LAW AND ARBITRATION

  	
   

  	
  12

  
	
  19

  	
   

  	
  GENERAL

  	
   

  	
  12

  

 

 i

This Agreement is made on                                       2006

Between

(1)                                  Diageo North
America, Inc.
(the “Company”) and

(2)                                  «Forename»
«Surname» of «HomeAddress1», «HomeAddress2», «HomeAddress3», «HomeAddress4»,
«HomeAddress5»
(Executive).

It is agreed

1                                          Definitions and Interpretation

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

CEO means the Chief Executive Officer of Diageo
North America, Inc. from time to time

Employment means the Executive’s employment
under this Agreement

Group means the Company and the Group Companies

Group Company means any company which is for the
time being a subsidiary or holding company of the Company and any subsidiary of
any such holding company and for the purposes of this Agreement the terms
subsidiary and holding company shall have the meanings ascribed to them by
sections 736 and 736A Companies Act 1985 (and Group Companies shall be
interpreted accordingly)

Last Date Worked means
the last calendar day on which the Executive is engaged in activities as
defined by Paragraphs 4.3 or  5 of this
Agreement.  Such date is subject to the
sole discretion of the Company.

Manager means «Line_Manager_Title» (or such other
person as the Company may from time to time nominate and notify the Executive).

Remuneration Committee
means the Remuneration Committee of the Diageo plc from time to time.

Salary
means the salary referred to in clause 8.1

Termination Date means the date of the
termination of the Employment.

1.2                                 References to Paragraphs and
schedules are, unless otherwise stated, to Paragraphs of and schedules to this
Agreement.

1.3                                 The headings in this Agreement
are for convenience only and shall not affect the construction or
interpretation of this Agreement.

2                                          Appointment

2.1                                 The Company appoints the
Executive and the Executive agrees to act as «Job_Title»
of the Company or in such other capacity of a like status as the Company from
time to time reasonably directs, on the terms of this Agreement.

3                                          Consideration

The Company agrees that for my execution of this
Agreement, I will receive the consideration outlined in the cover note attached
hereto.

4                                          Duration of the Employment

4.1                                 Executive’s employment shall be
subject to this Agreement from the date of execution (the “Start Date”) and
shall end on such date on which Executive’s employment is terminated under
Paragraph 4.2 of this Agreement. 
Nevertheless, Executive shall be an at-will employee who may resign or
be terminated at any time, with or without Cause (as defined below).  Nothing in this Agreement shall give
Executive the right to continued Company employment.  Executive’s at-will status can only be
altered by a written document signed by a duly authorized Company executive and
Executive.

4.2                                 Termination of Employment

This Agreement and Executive’s employment
relationship with the Company may be terminated under the following
circumstances:

(a)                                  Death

In the event of the death of Executive, this
Agreement and the employment relationship shall automatically terminate. In
such event, the Company’s sole obligation shall be to pay the legal
representative of Executive’s estate any unpaid portion of Executive’s annual
Salary, expense reimbursements, and unused vacation days accrued through the
date of death at the rate in effect at the time of death, and all other amounts
owed, if any, under any compensation, retirement or benefits plans of the
Company to which Executive is entitled as of the date of Executive’s death.
Said payments shall be made within fifteen (15) days after the Company receives
notice of the Executive’s death.  In
addition, the legal representative of Executive’s estate shall be paid a
prorated Incentive to the extent Executive is eligible at the time of death.

(b)                                 Disability

If Executive is absent from or unable to perform
the Executive’s job duties for six (6) months during any twelve (12) month
period because Executive is physically or mentally incapacitated so as to
render Executive incapable of performing Executive’s usual and customary duties
under this Agreement with reasonable accommodation, the Company may terminate
this Agreement and the employment relationship. 
In such event, the Company’s sole obligation shall be to pay Executive
when due any unpaid portion of Executive’s annual Salary, expense
reimbursements, and unused vacation days accrued through the date of
termination at the rate in effect at the time the disability commenced (and as
set forth in the applicable Disability Plan), and all other unpaid amounts, if
any, under any compensation, retirement or benefit plans of the Company to
which Executive is entitled as of the date the disability commenced.  Said payments shall be made at the time such
payments would normally have been made. 
In addition, Executive shall be paid a prorated Incentive to the extent
Executive is eligible at the time the disability commenced.

(c)                                  Termination for Cause by the
Company

The Company may terminate this Agreement and the
employment relationship without notice at any time for Cause.  “Cause” shall include (i) gross
insubordination; (ii) falsification of any work, personnel or other company
records; (iii) unauthorized taking of company funds, property or unauthorized
charges against the Company’s accounts (other than nominal charges
inadvertently made and promptly repaid to the Company); (iv) refusal to perform
Executive’s duties; (v) gross negligence in the performance of Executive’s
duties; (vi) serious misconduct of any kind; (vii) breach of the Diageo Code of
Conduct; (viii) conviction of the Executive of, or the entering of a plea of
guilty or no contest by the Executive to, a felony involving moral turpitude;
(ix) any other misconduct by Executive which impacts the 

 2
 

Executive’s ability to effectively perform
Executive’s duties, unless such misconduct is, in the Company’s discretion,
reasonably capable of cure and remains uncured by the Executive more than ten
(10) days after having been given written notice thereof by the Company; or (x)
material breach by Executive of this Agreement.

(d)                                 Termination Without Cause

The Company may terminate this Agreement and
Executive’s employment without Cause at any ninety (90) days’ advance written
notice to the Executive.  Executive may
resign at any time in the absence of Good Reason and will provide ninety (90)
days advance written notice to the Company.

(e)                                  Termination for Good Reason by
Executive

Executive may terminate this Agreement and the
employment relationship at any time for Good Reason on ninety (90) days’
advance written notice to the Company.  “Good
Reason” shall mean: (i) elimination of the Executive’s position without being
offered a comparable alternative position (a comparable position is an
alternative executive level position within 90% of target cash compensation);
or (ii) a reduction in Executive’s Salary. 
Executive must give such notice within thirty (30) days of Company’s
notification to Executive that his/her position is being eliminated or his/her
Salary is being reduced, or else Executive waives his/her right to terminate
for Good Reason.

(f)                                    Notice of Termination

Any termination of this Agreement and the
employment relationship by either party hereto shall be communicated by the
other in writing in accordance with the provisions of Paragraph 16, below.

(g)                                 Date of Termination

“Date of Termination” shall mean:  (i) if Executive’s employment is terminated
because of death, the date of Executive’s death; (ii) if Executive’s employment
is terminated for disability, the date Notice of Termination is given; (iii) if
Executive’s employment is terminated for Cause pursuant to Paragraph 4.2(c),
above, the date Notice of Termination is given; and (iv) if Executive’s
employment is terminated pursuant to either Paragraph 4.2(d) or 4.2(e), above,
the date specified in the Notice of Termination.

(h)                                 Compensation Upon Termination
for Cause or Resignation Other than for Good Reason

If this Agreement and the employment
relationship are terminated by the Company for Cause or by Executive for other
than Good Reason, the Company’s sole obligation shall be to pay Executive when
due any unpaid Salary, expense reimbursements, and unused vacation days accrued
through the Date of Termination at the rate in effect at the date of
termination, and all other amounts owed, if any, under any compensation,
retirement or benefit plans of the Company to which Executive is entitled as of
the date of Executive’s termination.

If this Agreement and the employment
relationship are terminated by death or disability of Executive, the Company
shall make the payments specified in Paragraphs 4.2(a) and 4.2(b), above.

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(i)            Compensation
Upon Termination without Cause

If this Agreement and the employment relationship are
terminated by the Company without Cause or by Executive for Good Reason, then;

(i)                            the
Company shall pay Executive when due any unpaid Salary, expense reimbursements,
and unused vacation days accrued through the Date of Termination at the rate in
effect at the Date of Termination, and all other amounts owed, if any, under
any compensation, retirement or benefit plans of the Company to which Executive
is entitled as of the Date of Termination; and

(ii)                         subject
to and in exchange for a full and complete release approved by the Company, the
Company shall pay a sum equal to «Termination_Payment»
of Salary (including the Notice of Termination period) at the rate in effect at
the time Notice of Termination is given, such amount to be paid in a lump sum
payment.

(iii)                      If
Executive elects to continue COBRA medical
and/or dental coverage, the Company shall pay the cost of that coverage for a
period of «COBRA» from the Date of
Termination or until such time as Executive becomes eligible for coverage under
comparable plans with a new employer, whichever occurs first.  Executive’s participation will cease in all
of the Company’s other employee benefit plans.

Executive
shall not be required to mitigate the amount of any payment or benefit provided
for in this Paragraph 3 by seeking other employment or otherwise.  The amount of any such payments or benefits
shall not be reduced by any compensation earned by Executive as the result of
his or her employment with a subsequent employer or by retirement benefits,
unless such employment is in violation of Paragraph 15 of this Agreement or
Executive violates Paragraphs 13,14, or 15 of this Agreement.

4.3                                 At any time during any period of
notice of termination served by the Executive or the Company, the Company shall
have the right at its absolute discretion to assign no, reduced or alternative
duties to the Executive (provided that any such duties shall be consistent with
the Executive’s status) and shall be entitled to require the Executive to act
at the direction of the Company including the right to exclude him/her from its
premises, and/or remove him/her from office as a director of the Company and
from any or all offices held by him/her in the Company or in any other Group
Company and/or prevent the Executive from discussing its affairs with the
Company’s or any other Group Company’s employees, agents, clients or
customers.  The Executive agrees that
during any period of notice given by either party, Executive will give the
Company or such person nominated by it all assistance and co-operation in
effecting a smooth and orderly handover of his/her duties as the Company may
require.   If the Company shall exercise
its right under this Paragraph, the Executive’s entitlement to Salary and other
contractual benefits shall continue, subject to the rules of any relevant
benefit plans.  For the avoidance of doubt,
at all times during any period of notice of termination served in accordance
hereunder, the Executive shall continue to be bound by the same obligations as
were owed to the Company prior to the commencement of the notice period.

4.4                                 The Executive represents and
warrants that he/she is not bound by or subject to any court order, agreement,
arrangement or undertaking, which in any way restricts or prohibits him/her
from entering into this Agreement or from performing his/her duties under it.

5                                          Scope of the Employment

5.1                                 During the Employment the
Executive shall:

(a)                                  devote the whole of his/her
time, attention and skill to the business and affairs of the Company during the
hours of work described in Paragraph 6.1 except during holidays and periods of
absence due to ill health;

 4
 

(b)                                 faithfully, competently and
diligently perform such duties and exercise such powers consistent with his/her
position as may from time to time be assigned to or vested in him/her or her by
the Company.  Such powers and duties may
exceptionally fall outside the normal ambit of the Executive’s position but
will not be duties inappropriate to the Executive’s status;

(c)                                  use his/her best endeavours to
promote and maintain the interests and reputation of the Company;

(d)                                 report to his/her Manager;

(e)                                  obey the reasonable and lawful
directions of the Company and, in particular, his/her Manager;

(f)                                    comply with all the Company’s
rules, regulations, policies and procedures from time to time in force
including but not limited to the Diageo Code of Business Conduct;

(g)                                 travel to such places (within or
outside the United Kingdom and the United States) in such manner and on such
occasions as the Company may from time to time reasonably determine;

(h)                                 refrain from doing or permitting
any matter which causes any regulatory authority in the United Kingdom, United
States or elsewhere to withdraw permission or in any way prevent the Company
from employing or otherwise using the services of the Executive;

(i)                                     not at any time without the
prior consent of his/her Manager incur on behalf of the Company or any Group
Company any capital expenditure in excess of such sum as may be authorized from
time to time by his/her Manager or enter into on behalf of the Company or any
Group Company any commitment, contract or arrangement, that is otherwise than
in the normal course of business or is outside the scope of his/her normal
duties or is of an unusual or onerous or long term nature;

(j)                                     not without the prior consent of
his/her Manager seek or accept from any actual or prospective customer,
controller or supplier of the Group any gift, gratuity or benefit which
breaches the Company’s Code of Conduct and, in particular, the provisions of
that Code relating to Acceptance of Entertainment and Gifts.  In case of doubt, the Executive shall consult
his/her Manager in relation to these matters; and

(k)                                  keep his/her Manager at all
times promptly and fully informed (in writing if so requested) of his/her
conduct of the business of the Company and any Group Company and provide such
explanations in connection with it as the Company and, in particular, his/her
Manager may require.

5.2                                 The Company shall be entitled at
any time to require the Executive to perform duties consistent with his/her
role and status not only for the Company but also for any Group Company
including, if so required, acting as a director of any Group Company.  The Company may at its sole discretion
transfer this Agreement to any Group Company at any time.

5.3                                 The Company has implemented a
Global Computer Usage, Email and Internet Policy, Alcohol Policy, Drugs/Solvent
Abuse and Dependency Policy, Expenses Policy and Mobile Phones Policy, and
others posted on Diageo One,  which the
Executive is obliged to comply with at all times during the Executive’s employment.  In particular, the Executive’s attention is
drawn to the sections of the Global Computer Usage, Email and Internet Policy,
which indicate that the Company may from time to time monitor the Executive’s
use of its communication systems, namely its computer systems and
telephones.  The Executive acknowledges
that the Company has a legitimate interest in carrying out this monitoring and
that, by signing this Agreement, the Executive consents to it.

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6                                          Hours of work

6.1                                 The normal business hours of the
Company are as set out in the relevant Company policy.  However, the Executive shall be required to
work such hours as are necessary to fulfill his/her duties under this
Agreement.  No payment will be made for
any additional hours worked by the Executive.

7                                          Place of work

7.1                                 The Executive’s place of work
will initially be the Company’s offices at, «WorkAddress1»,
«WorkAddress2», «WorkAddress3», «WorkAddress4» but the Company may
require the Executive to work at any other location for such periods as the
Company may from time to time require.

8                                          Compensation and Benefits

8.1                                 Executive’s annual base salary
shall be «Currency»«Salary» per
annum, subject to periodic increases in accordance with the Company’s Rewards
policy (such annual base salary as adjusted shall be referred to as “Salary”).

8.2                                 Executive shall be eligible for
an annual incentive (“Incentive”) in accordance with terms and conditions of
the Company’s Annual Incentive Plan (“AIP”). 
Executive’s AIP eligibility is subject to change in accordance with Plan
Amendments.    Executive will also be
eligible to participate in the following plans in accordance to the terms of
such plans:

(a)                                  Diageo Deferred Compensation
Plan;

(b)                                 «OPTION_SCHEME»; and/or

(c)                                  Diageo Long Term Incentive Plan
(The TSR Plan);

The Executive’s participation in such plans is
at the discretion of the Company.  If the
Company shall make a payment or grant an award under such plans and/or schemes
in any one year, this shall not give rise to a contractual entitlement to a
payment or award in future years.  Any
awards granted under these plans will be subject to the terms and conditions of
such plans.  Further, the Company may at
its discretion reduce the Executive’s participation in the incentive schemes at
(b) and (c) above in the event that he/she fails to satisfy the minimum
shareholding requirement (based on his/her salary and length of service)
applicable to him/her which will be notified to him/her from time to time.

8.3                                 The Executive shall hold such
offices of the Company and any Associated Company for such periods as the
Company may require from time to time. 
The Salary shall be inclusive of any fees to which the Executive may be
entitled as a director of the Company or any Group Company.  The Executive agrees to pay to the Company or
direct that the Company is paid all such fees received by him/her.

8.4                                 Payment of the Salary to the
Executive shall be made either by the Company or by a Group Company and, if by
more than one company, in such proportions as his/her Manager may from time to
time think fit.

8.5                                 The Company shall be entitled to
deduct from any sum due to the Executive under the terms of this Agreement any
monies that are owed by the Executive to the Company.

9                                          Expenses

9.1                                 The Company shall reimburse the
Executive in respect of all reasonable expenses wholly, exclusively and
necessarily incurred by him/her in the proper performance of his/her duties,
subject to his/her providing such receipts or other appropriate evidence as the
Company may require.

 6
 

9.2                                 The Executive may be issued with
a company credit card on condition that he/she:

(a)                                  takes good care of such card and
immediately reports any loss of it to the Company;

(b)                                 uses the card only for the
purposes of the Company’s business or the business of a Group Company in accordance
with any applicable Company policy; and

(c)                                  returns the card immediately to
the Company on request.

10                                    Vacation

10.1                           In the respective vacation years
in which the Employment commences or terminates, the Executive’s entitlement to
vacation shall accrue on a pro rata basis for each completed calendar month of
service during the relevant year. 
Executive’s entitlement shall be governed by the Company’s vacation
policy.

10.2                            If, on the termination of the
Employment, the Executive has exceeded his/her accrued vacation entitlement,
the value of such excess, calculated by reference to Paragraph 10.1 and the
Salary, may be deducted by the Company from any sums due to him/her.  If the Executive has any unused vacation
entitlement, the Company shall at its discretion either require the Executive
to take such unused vacation during any notice period or make a payment to
him/her in lieu of it (calculated in accordance with the Executive’s then rate
of pay) provided always that if the Employment is terminated pursuant to
Paragraph 4.2(c) then, subject to the Regulations, the Executive shall not be
entitled to any such payment.  For these
purposes, salary in respect of one day’s vacation entitlement shall be
calculated as 1/261 of Salary.  This
clause will be applied in a manner that is consistent with state and local
laws.

10.3                           Vacation days must be used
during the year for which they are accrued and may not carry over past January
31 of the following year, except to the extent that applicable state law
provides otherwise.  Executive may only
accrue vacation up to the total maximum number of vacation days for which
he/she is eligible in that year.  Once
Executive accrues the maximum number of vacation days, he/she stops accruing
until he or she takes vacation.

11                                    Other Benefits

11.1                           Executive shall participate in
the benefit plans of the Company as described in Exhibit 1 hereto.  Such benefits shall be subject to and
governed by the terms of the applicable plans. 
In accordance with Company policy on medical examination, the Executive
will be entitled to an annual medical examination and test by a medical
practitioner nominated by the Company. 
The Company may also require you at any time to submit to a medical
examination with such frequency as is reasonable.  You will permit the results of such medical
examinations to be disclosed to the Company.

11.2                           The Company shall pay on the
Executive’s behalf the annual subscription fees for one professional body
relevant to the Employment.

12                                    Restrictions during the
Employment

12.1                           During the Employment the
Executive shall not directly or indirectly be employed, engaged, concerned or
interested in any activity that his/her Manager reasonably considers may be, or
become, harmful to the interests of the Company or of any Group Company or that
might reasonably be considered to interfere with the performance of the
Executive’s duties under this Agreement.

12.2                           Paragraph 12.1 shall not
apply:

(a)                                  to the Executive holding
(directly or through nominees) investments listed on the Official List of
London Stock Exchange plc or in respect of which dealing takes place in the
Alternative Investment Market or any recognized stock exchange as long as 

 7
 

he/she does not
hold more than 3 per cent of the issued shares or other securities of any
class of any one company; or

(b)                                 to any act undertaken by the
Executive with the prior written consent of his/her Manager.

12.3                           The Executive shall comply with
every rule of law (including but not limited to the insider dealing provisions
contained in Part V of the Criminal Justice Act 1993), the UK Listing Authority’s
listing rules’ Model Code for transactions in securities by directors of listed
companies, certain employees and persons connected with them and every
regulation of the Company for the time being in force in relation to dealings
in shares or other securities of the Company or any Group Company.  Under Rule 6 of the Model Code, the person to
whom notice should be given and from whom acknowledgement must be received
before the Executive may deal in securities shall be the Company Secretary of
the Company from time to time or such other person as shall be notified to the
Executive.  The Executive also
acknowledges that under the provisions of the Model Code the Executive must
seek to ensure compliance with the Model Code by persons connected with the
Executive (within the meaning of section 346 of the Companies Act 1985)
including, without limitation, the Executive’s spouse and dependent children,
and by investment managers acting on the Executive’s behalf or on behalf of
connected persons.  The Executive
undertakes to procure that dealings by or on behalf of such persons are in
compliance with the Model Code.

13                                    Disclosures to the Company and
Assignment of Trade Secrets and Confidential Information

Executive agrees that with respect to any and
all confidential knowledge or information with respect to the operations,
finances, organization or employees of the Company or any Group Company  (“Company” as defined in this paragraph
only), including, without limitation, information about Company’s contract
strategy, allocation of financial resources, financial plans and strategies,
policies and negotiation strategies or plans with distributors or brokers,
existing contracts and contracts under negotiation, products under development,
product launch strategies, identities and capabilities of key personnel, margin
and non-public financial information and Company strategies to which Executive
became privy by reason of Executive’s participation in the North American
and/or Global Executive teams (“Confidential Information”) or with respect to
confidential or secret processes, services, techniques, customers or plans with
respect to the Company (“Trade Secrets”) and other works made or conceived by
the Executive while employed by the Company (or within nine months of the
termination of the Executive’s employment if based on or related to Trade
Secrets or Confidential Information), whether solely or jointly with any other
person or organization, during or after regular hours of employment (“Works”):

(i)                                     Executive will disclose promptly
to the Company all such Trade Secrets, Confidential Information and other
Works.

(ii)                                  Executive will execute and
promptly deliver to the Company (at the Company’s expense) such written instruments
and do such other acts as may be required to patent, copyright or otherwise
protect such Trade Secrets, Confidential Information and other Works, and any
documentation or other materials pertaining thereto, and to vest the entire
right and title thereof in the Company. 
All such Trade Secrets, Confidential Information and other Works,
together with any documentation or other materials pertaining thereto, shall be
considered work made for hire and prepared by Executive within the scope of
Executive’s employment by the Company.

(iii)                               The Company shall have the
perpetual and unlimited right, without cost, to use in its business and to
sublicense and assign, in whole or in part, any of such Trade Secrets,
Confidential Information or other Works, and to make, use and sell any and all
products, processes, research and services derived from any of such Trade
Secrets, Confidential Information or other Works.  This includes, but is not limited to, using,
making and selling products, 

 8
 

processes
and/or services derived from such Trade Secrets, Confidential Information or
other Works.

14                                    Confidentiality

In consideration of employment by the Company,
Executive agrees that during the term of Executive’s employment with the
Company, and at any time after that employment terminates, Executive will not,
without the Company’s prior written consent, directly or indirectly, at any
time, (i) disclose to any third party or entity any Trade Secrets or other
proprietary or Confidential Information pertaining to the Company or any Group
Company or use any such secrets or information without the prior written
consent of the CEO of the Company; or (ii) otherwise violate Paragraph 14 of
this Agreement.

14.1                           The Executive acknowledges that
all books, notes, memoranda, records, lists of customers and suppliers and
employees, correspondence, documents, computer and other disks and tapes, data
listings, codes, designs and drawings and other documents and material
whatsoever (whether made or created by the Executive or otherwise) relating to
the business of the Company or any Group Company (and any copies of the same),
whether or not such material is Trade Secrets or Confidential Information:

(a)                                  shall be and remain the property
of the Company or the relevant Group Company; and

(b)                                 shall be handed over by the
Executive to the Company or to the relevant Group Company on demand and in any
event on the termination of the Employment and the Executive shall certify that
all such property has been handed over on request by the Company.

Provided that following the termination of the
Employment, the Executive shall be provided with reasonable access to Board
Minutes and agendas of the Company or any Group Company relating to a period
during which he/she was a director of the Company or such Group Company, which
shall nevertheless remain confidential.

15                                    Non-Solicitation and Non-Compete.

Executive agrees that while employed with the
Company, and for a period of nine (9) months following the Date of Termination
with the Company, Executive shall not, except on behalf of the Company:

·                  solicit the
business services of any employee of the Company, any Group Company or any
joint venture company (collectively “the Company” for this paragraph) or induce
in any manner any employee of the Company or its affiliates at the Date of
Termination, or who shall subsequently become an employee, to terminate his/her
employment or association with the Company.

·                  perform
executive or managerial, services in sales or operations, or be engaged,
concerned or interested in the business Anheuser Busch Cos Inc., Bacardi
Limited, Fortune Brands, «Extra_Non_Compete_Company» Pernod Ricard, or any
entity resulting from a merger with or combination of the foregoing
entities.  The Company may notify the
Executive from time to time of additions to the foregoing list of companies,
which are similar to and compete with any business being carried on by the
Company or by any Group Company.

Executive recognizes and agrees that the
foregoing restrictions are reasonable and necessary to protect the Company’s
trade secrets and that they do not foreclose Executive from working in the
adult beverages industry but only from working in those portions of the
industry that will necessarily place the Company’s Confidential Information and
Trade Secrets at the greatest risk of use or disclosure.

 9
 

The Company and Executive further acknowledge
that the time, scope, geographic area and other provisions of Paragraphs 13, 14
or 15 have been specifically negotiated by sophisticated, commercial parties
and agree that all such provisions are reasonable under the circumstances of
the activities contemplated by this Agreement. 
In the event that the agreements in Paragraphs 13, 14 or 15 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of their extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any other
respect, they shall be interpreted to extend only over the maximum period of
time for which they may be enforceable and/or over the maximum geographical
area as to which they may be enforceable and/or to the maximum extent in all
other respects as to which they may be enforceable, all as determined by such
court in such action.  Violations of
Paragraphs 13, 14 or 15 of this Agreement will cause the Company irreparable
harm for which there is no adequate remedy at law, and as a result, the Company
shall be entitled to the issuance of an injunction, restraining order or other
equitable relief without bond by a Court of competent jurisdiction restraining
Executive from committing or continuing any such violation.  Any right to obtain an injunction,
restraining order or other equitable relief hereunder shall not be deemed a
waiver of any right to assert any other remedy the Company may have at law or
in equity.

16                                    Notices

Any notice to be given hereunder shall be in
writing and shall be addressed to the party concerned at the address indicated
below or to such other address as such party may subsequently give notice of
hereunder or to the Company in writing:

Executive:                                                                                          «Forename» «Surname»

«HomeAddress1»,

«HomeAddress2»,

«HomeAddress3»,

«HomeAddress4»,

«HomeAddress5»

Company:                                                                                        Senior Vice President, HR

Diageo North America, Inc. 

801 Main Avenue

Norwalk, CT  06851

Any notice delivered personally or by courier
under this Paragraph 16 shall be deemed given on the date delivered, and any
notice sent by facsimile or registered or certified mail, postage prepaid,
return receipt requested, shall be deemed given on the date the facsimile
transmission is completed or the return receipt is signed.

17                                    Former contracts of employment

17.1                           This Agreement shall be in
substitution for any previous contracts, whether by way of letters of
appointment, agreements or arrangements, whether written, oral or implied,
relating to the employment of the Executive, which shall be deemed to have been
terminated by mutual consent as from the date of this Agreement and the
Executive acknowledges that he/she has no outstanding claims of any kind
against the Company or any Group Company in respect of any such contract.

17.2                           For the avoidance of doubt, this
clause shall not affect benefits that have already accrued to the Executive
prior to the date hereof under any pre-existing scheme or arrangement by virtue
of which he/she was entitled to benefits.

18                                    Choice of Law and Arbitration

18.1                           This Agreement, and the
interpretation thereof, shall be governed by the laws of the State of
Connecticut without regard to its conflict of law rules and shall be deemed to
have been made in the State of Connecticut.

 10
 

18.2                           The Company and Executive
mutually consent to the resolution by arbitration of all claims or
controversies, whether or not arising out of Executive’s employment or its
termination, that Executive may have against the Company, or against its
directors, officers, employees or agents, or that the Company may have against
Executive.

Executive and the Company agree that any
arbitration shall be in accordance with the then-current employment arbitration
procedures of the American Arbitration Association before an arbitrator who is
licensed to practice law.  The
arbitration shall take place in City, State of Executive’s work location unless
Executive and the Company both consent to an alternate location.  Executive and the Company further agree that
arbitration is the exclusive and binding remedy for any such dispute and will
be used instead of any court action, which is hereby expressly waived, except
for any request by either party for temporary or preliminary injunctive or
other equitable relief pending arbitration in accordance with applicable law or
an administrative claim with an administrative agency.

19                                    General

19.1         Resignation of Offices

Upon termination of this Agreement and the
employment relationship for any reason, Executive shall immediately resign from
all directorships and officerships held in the Company and any Group Company.

19.2         Return of Company
Property

Upon termination of this Agreement and the
employment relationship for any reason, Executive shall promptly return all
Company property in his/her possession, including but not limited to, Company
Confidential Information and Trade Secrets, computer hardware/software, credit
and telephone cards, access cards and keys, Company cars, PDAs and cellular
phones.

19.3         Indemnification

The Company shall indemnify Executive in his/her
capacity as an officer or director of the Company and any Group Company to the
fullest extent permitted under the corporate laws of the State of Connecticut.

19.4         Withholdings

All payments to Executive under this Agreement
shall be reduced by all applicable withholdings required by federal, state or
local law.

19.5         Cooperation In
Investigations

Executive promises to cooperate fully in any
investigation that the Company undertakes into matters occurring during
Executive’s employment with the Company or any Group Company. The Company will
reimburse Executive for reasonable expenses incurred in accordance with its
Travel and Expense Policy.

19.6         Amendment or Modification
Waiver

No provision of this Agreement may be amended,
changed, modified or waived unless such amendment, change, modification or
waiver is agreed to in writing, signed by Executive and by a duly authorized
officer of the Company.  No waiver by any
party hereto of any breach by another party hereto of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same time,
any prior time or any subsequent time.

 11
 

19.7         Severability

 

If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court to be invalid and unenforceable to any extent, the
remainder of this Agreement or the application of such provision to such person
or circumstances other than those to which it is so determined to be invalid
and unenforceable, shall not be affected thereby, and each provision hereof
shall be validated and shall be enforced to the fullest extent permitted by
law.

19.8         Survivorship

The provisions set forth in Paragraphs 13, 14,
15, 18, and 19.5 hereof shall remain in full force and effect after the
termination of this Agreement notwithstanding the termination of this
Agreement.

19.9         Successors: Non-Assignability
of Agreement

Neither this Agreement nor any rights or
obligations hereunder may be assigned by either party hereto without the
express written consent of the other, except that this Agreement shall be
binding upon and inure to the benefit of any successor to the Company, whether
by merger, consolidation, sale or transfer of assets or otherwise, and any
reference herein to the Company shall be deemed to include any such successor.

 

	
  Executed by the Company

  	
  )

  	
   

  	
   

  
	
  acting by two
  directors or by a

  	
  )

  	
   

  	
  Director

  
	
  director and its
  secretary

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed by the
  Executive

  	
  )

  	
   

  	
   

  
	
  in the presence
  of

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature of witness

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 12
 

Exhibit 1

You are entitled to
participate in the following plans and programs subject to the plan documents
of each as amended from time to time.

SUMMARY OF BENEFIT PLANS AND PROGRAMS

RETIREMENT PROGRAMS

·                  Diageo, NA, Inc. Savings 401(K) Plan

·                  Diageo, NA, Inc. Cash Balance Plan (Pension)

·                  Diageo, NA, Inc. Benefit Supplement Plan
(Pension)

·                  Diageo, NA, Inc. Deferred
Compensation Plan

FINANCIAL
PLANNING & SUPPORT PROGRAMS

·                  Financial
Counseling

·                  Estate Planning

·                  Tax Preparation

WELFARE BENEFIT PROGRAMS

·                  Medical

·                  Dental

·                  Vision

·                  Life Insurance and AD&D

·                  Disability
Insurance

OTHER PROGRAMS

·                  Perquisite
Allowance

·                  Flexible Spending Accounts (FSA)

·                  Vacation and Vacation Buy

·                  Brand Ambassador Program

 13Exhibit
4.9

	
  

  	
   

  	
  LIMITED
  LIABILITY PARTNERSHIP

  

 

	
  THE DIAGEO PLC SENIOR
  EXECUTIVE

  
	
  SHARE OPTION
  PLAN

  

 

Adopted by the
Company: 9 November 1999

Amended by the
Routine Business Committee:  7 February
2007

Inland Revenue
ref: X20398

 

CONTENTS

Part A : Inland Revenue Approved

	
  Rule

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  ELIGIBILITY

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  LIMITS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  EXERCISE OF OPTIONS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  TAKEOVER, RECONSTRUCTION AND WINDING-UP

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  VARIATION OF CAPITAL

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  ALTERATIONS

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  10

  

 

Part B : Unapproved Options

	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  ELIGIBILITY

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  LIMITS

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  EXERCISE OF OPTIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  CASH EQUIVALENT

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  TAKEOVER, RECONSTRUCTION AND WINDING-UP

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  VARIATION OF CAPITAL

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  ALTERATIONS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  INCENTIVE STOCK OPTIONS

  	
   

  	
  20

  

 

PART A -
Inland Revenue approved

1.                                 DEFINITIONS AND INTERPRETATION

1.1                           In this Plan, unless the
context otherwise requires:-

“the Board”
means the board of directors of the Company or a committee appointed by them;

“the Company”
means Diageo plc (registered in England and Wales No. 23307);

“the Grant
Date” in relation to an option means the date on which the option
was granted;

“Group Member”
means:-

1.1.1                            a Participating Company or
a body corporate which is (within the meaning of section 736 of the Companies
Act 1985) the Company’s holding company or a subsidiary of the Company’s
holding company; or

1.1.2                            a body corporate which is
(within the meaning of section 258 of that Act) a subsidiary undertaking of a
body corporate within paragraph 1.1.1 above and has been designated by the
Remuneration Committee for this purpose;

“the London
Stock Exchange” means London Stock Exchange Limited;

“Part A”
of this Plan means the part designed for approval by the Inland Revenue;

“Part B”
of this Plan means the unapproved part of this Plan.

“Participant”
means a person who holds an option granted under this Plan;

“Participating
Company” means the Company or any Subsidiary;

“Performance
Condition” means a condition related to performance which is
specified by the Remuneration Committee pursuant to sub-rule 3.1 below;

“the Plan”
means the Diageo plc Senior Executive Share Option Plan as herein set out but
subject to any alterations or additions from time to time made pursuant to the
Plan;

“the
Remuneration Committee” means the committee established by the
Company as the remuneration committee of the board of directors of the Company;

“Schedule 4”
means Schedule 4 to the Income Tax Act 2003;

“Subsidiary”
means a body corporate which is a subsidiary of the Company (within the meaning
of section 736 of the Companies Act 1985) and of which the Company has control
(within the meaning of section 719 of the Income Tax Act 2003);

“the Income
Tax Act 2003” means the Income Tax (Earnings and Pensions) Act 2003;

and expressions not
otherwise defined herein have the same meanings as they have in Schedule 4.

 1
 

1.2                           Any reference in this Plan
to any enactment includes a reference to that enactment as from time to time
modified, extended or re-enacted.

1.3                           Expressions in italics are
for guidance only and do not form part of this Plan.

2.                                 ELIGIBILITY

2.1                           Subject to sub-rule 2.3
below, a person is eligible to be granted an option under Part A of the Plan if
(and only if) he is a full-time director or qualifying employee of a
Participating Company who is required to devote the whole or substantially the
whole of his working time to the service of any Participating Company.

2.2                           For the purposes of sub-rule
2.1 above:-

2.2.1                            a person shall be treated
as a full-time director of a
Participating Company if he is obliged to devote to the performance of the
duties of his office or employment with that and any other Participating
Company not less than 25 hours a week;

2.2.2                            a qualifying employee, in relation to a
Participating Company, is an employee of the Participating Company (other than
one who is a director of a Participating Company).

2.3                           A person is not eligible to
be granted an option under Part A of this Plan at any time when he is not
eligible to participate in this Plan by virtue of paragraph 9 of Schedule 4 (material interest in a close company).

3.                                 GRANT OF OPTIONS

3.1                           Subject to Rule 4 below, the
Remuneration Committee may grant an option to acquire shares in the Company
which satisfy the requirements of paragraphs 16 to 20 of Schedule 4 (fully paid up, unrestricted, ordinary share capital),
upon the terms set out in Part A of this Plan and upon such other objective
terms as the Remuneration Committee may specify, to any person who is eligible
to be granted an option in accordance with Rule 2 above; and for this purpose
an option to acquire includes an option to purchase and an option to subscribe.

3.2                           The price at which shares
may be acquired by the exercise of an option shall be determined by the
Remuneration Committee before the grant thereof, but shall not be less than:-

3.2.1                            if shares of the same class
as those shares are listed in the London Stock Exchange Daily Official List,
the average of the middle-market quotation of shares of that class (as derived
from that List) for the three dealing days immediately preceding the Grant
Date;

3.2.2                            if paragraph 3.2.1 above
does not apply, the market value (within the meaning of Part VIII of the
Taxation of Chargeable Gains Act 1992) of shares of that class, as agreed in
advance for the purposes of this Plan with the Shares Valuation Division of the
Inland Revenue, on the Grant Date (or such other day 

 2
 

as may be agreed in advance with the Inland Revenue and which day shall
not be more than 30 days in advance of the Grant Date); or

3.2.3                            in the case of an option to
acquire shares only by subscription, the nominal value of those shares.

3.3                           An option may only be
granted:-

3.3.1                            within the period of 6
weeks beginning with -

(a)                     the date on which Part A of this
Plan is approved by the Inland Revenue under Schedule 4; or

(b)                    the dealing day next following the
date on which the Company announces its results for any period; or

3.3.2                            at any other time when the
circumstances are considered by the Remuneration Committee to be sufficiently
exceptional to justify its grant; and

3.3.3                            within the period of 10
years beginning with the date on which this Plan is adopted by the Company

PROVIDED that no option
may be granted under this Plan during the “close period” as defined in the
Model Code in the London Stock Exchange’s “The Listing Rules” and PROVIDED ALSO
that no options may be granted under Part A of this Plan prior to the date on
which Part A of the Plan is approved by the Inland Revenue under Schedule 4.

3.4                           An option granted under this
Plan to any person:-

3.4.1                            shall not, except as
provided in sub-rule 5.4 below, be capable of being transferred by him; and

3.4.2                            shall lapse forthwith if he
is adjudged bankrupt.

3.5                           The grant of any option
under this Plan shall be subject to obtaining any approval or consent required
under the provisions of the document “The Listing Rules” published by the
London Stock Exchange, of The City Code on Take-overs and Mergers, or of any
regulation or enactment.

4.                                 LIMITS

4.1                           Subject to any adjustment
made by the Remuneration Committee pursuant to sub-rule 7.2 below, no options
shall be granted under the Plan which would at the time they are granted, cause
the number of shares which shall have been or may be acquired in pursuance of
options so granted to exceed 342,785,560 (which represents approximately 10 per
cent of the ordinary share capital of the Company in issue on the date the Plan
is adopted by the Company).

4.2                           No
options shall be granted in any year which would, at the time they are granted,
cause the number of shares in the Company which shall have been or may be
issued in pursuance of options granted in the period of 10 calendar years
ending with that year under this Plan or under any other executive share option
scheme adopted by the 

 3
 

Company to exceed such number as represents 5 per cent. of the ordinary
share capital of the Company in issue at that time.

4.3                           No options shall be granted
in the period of 3 calendar years beginning with the year 1999 or any
successive period of 3 years which would, at the time they are granted, cause
the number of shares in the Company which shall have been or may be issued in
pursuance of options granted in the 3-year period in question under this Plan
or under any other executive share option scheme adopted by the Company to
exceed such number as represents 3 per cent. of the ordinary share capital of
the Company in issue at that time.

4.4                           No options shall be granted
in the period of 5 calendar years beginning with the year 1999 which would, at
the time they are granted, cause the number of shares in the Company which
shall have been or may be issued in pursuance of options granted in that
period, or shall have been issued in that period otherwise than in pursuance of
options, under this Plan or under any other employees’ share scheme adopted by
the Company to exceed such number as represents 5 per cent. of the ordinary
share capital of the Company in issue at that time.

4.5                           No options shall be granted
in any year which would, at the time they are granted, cause the number of
shares in the Company which shall have been or may be issued in pursuance of
options granted in the period of 10 calendar years ending with that year, or
been issued in that period otherwise than in pursuance of options, under this
Plan or under any other employees’ share scheme adopted by the Company to
exceed such number as represents 10 per cent. of the ordinary share capital of
the Company in issue at that time.

4.6                           Prior to granting an option
to any person, the Remuneration Committee may from time to time determine a
maximum aggregate amount payable on exercise of options granted under this Plan
to any person during any period of twelve months, such amount to be based upon
the expected value of the options on the date of grant, except in circumstances
considered by the Remuneration Committee to be exceptional (provided that any
grant of options under Part A of this Plan shall be subject to the provisions
of sub-rule 4.7 below).

4.7                           No person shall be granted
options which would, at the time they are granted, cause the aggregate market
value of the shares which he may acquire in pursuance of options granted to him
under Part A of this Plan or under any other share option scheme, not being a
savings-related share option scheme, approved under Schedule 9 to the Income
and Corporation Taxes Act 1998 or under Schedule 4 and established by the
Company or by any associated company of the Company (and not exercised) to
exceed or further exceed £30,000.

4.8                           For the purposes of this
Rule, the market value of the shares in relation to which an option was granted
shall be calculated:-

4.8.1                            in the case of an option
granted under this Plan, as on the days by reference to which the price at
which shares may be acquired by the exercise thereof was determined in
accordance with sub-rule 3.2 above;

 4
 

4.8.2                            in the case of an option
granted under any other approved scheme, as at the time when it was granted or,
in a case where an agreement relating to the shares has been made under
paragraph 22 of Schedule 4, such earlier time or times as may be provided in
the agreement; and

4.8.3                            in the case of any other
option, as on the day or days by reference to which the price at which shares
may be acquired by the exercise thereof was determined.

4.9                           Any option granted under
this Plan shall be limited and take effect so that the above limits are
complied with.

5.                                 EXERCISE OF OPTIONS

5.1                           The exercise of any option
granted under this Plan shall be effected in the form and manner prescribed by
the Remuneration Committee.

5.2                           Subject to sub-rules 5.4 and
5.5 below and to sub-rules 6.1 and 6.3 below, an option may not be exercised
before the third anniversary of the Grant Date.

5.3                           Subject to sub-rule 5.4 and
paragraph 5.5.2 below and to sub-rule 6.4 below, an option granted under this
Plan may not be exercised to the extent that the Performance Condition is not
satisfied. If the Performance Condition is not satisfied by the last date on
which the Performance Condition may be satisfied, the option shall thereupon,
notwithstanding any other provision of the Plan, cease to be capable of
exercise, unless it has already been exercisable prior to that date pursuant to
sub-rules 5.4 or paragraphs 5.5.1, 5.5.2 or sub-rule 6.4 below(1).

5.4                           If any Participant dies
prior to the last date on which the Performance Condition for an option may be
satisfied, or if any Participant dies after the Performance Condition for the
option has been satisfied, such option may (and must, if at all) be exercised
by his personal representatives within 12 months after the date of his death
provided that his death occurs at a time when either he is a director or
employee of a Group Member or he is or would but for sub-rule 5.3 above be
entitled to exercise the option by virtue of sub-rule 5.5 below(2).

5.5                           If any Participant ceases to
be a director or employee of a Group Member (otherwise than by reason of his
death) prior to the last date on which the Performance Condition for an option
may be satisfied, or if any Participant so ceases after the Performance
Condition for the option has been satisfied, the following provisions apply in
relation to any option granted to him under Part A of this Plan(3).

5.5.1                            if he
so ceases by reason of injury, disability, redundancy (within the meaning of
the Employment Rights Act 1996), by reason of retirement or by reason only that
his office or employment is in a company which ceases to be a Group Member, or
relates to a business or part of a business which is transferred to a person
who is not a Group Member, the option may (and subject to sub-rule 5.4 

(1) Amended by
the Board of Directors on 27 April 2000

(2) Amended by
the Board of Directors on 27 April 2000

(3) Amended by
the Board of Directors on 27 April 2000

 5
 

above must, if at all) be exercised within the period which shall
expire on the later of 6 months after his so ceasing and 42 months after the
Grant Date, provided that, in the case of options granted on or after
21 August 2003, options cannot be exercised in any event before the
third anniversary of the Date of Grant but subject in all cases to sub-rule 5.3
above;

5.5.2                            if he so ceases for any
other reason, the option may not be exercised at all unless the Remuneration
Committee shall so permit, in which event it may (and subject to sub-rule 5.4
above must, if at all) be exercised to the extent permitted by the Remuneration
Committee within 6 months after his so ceasing, provided that, in the case of
options granted on or after 21 August 2003, the Remuneration
Committee may not permit such options to be exercised before the third
anniversary of the Date of Grant.

5.6                           A Participant shall not be
treated for the purposes of sub-rule 5.5 above as ceasing to be a director or
employee of a Group Member until such time as he is no longer a director or
employee of any Group Member, and a female Participant who ceases to be such a
director or employee by reason of pregnancy or confinement and who exercises
her right to return to work under the Employment Rights Act 1996 before
exercising her option shall be treated for those purposes as not having ceased
to be a director or employee.

5.7                           Subject to sub-rule 5.4
above, but notwithstanding any other provision of this Plan, an option may not
be exercised after the expiration of the period of 10 years (or such shorter
period as the Remuneration Committee may have determined before the grant
thereof) beginning with the Grant Date.

5.8                           A Participant shall not be
eligible to exercise an option granted under Part A of this Plan at any time
when he is not eligible to participate in this Plan by virtue of paragraph 9 of
Schedule 4 (material interest in close
company).

5.9                           Within 30 days after an
option has been exercised by any person, the Remuneration Committee shall allot
to him (or a nominee for him) or, as appropriate, procure the transfer to him
(or a nominee for him) of the number of shares in respect of which the option
has been exercised, provided that:-

5.9.1                            the Remuneration Committee
considers that the issue or transfer thereof would be lawful in all relevant
jurisdictions; and

5.9.2                            in a case where a Group
Member is obliged to (or would suffer a disadvantage if it were not to) account
for any tax (in any jurisdiction) for which the person in question is liable by
virtue of the exercise of the option and/or for any social security
contributions recoverable from the person in question (together, the “Tax
Liability”), that person has either:

(a)                     made a payment to the Group Member
of an amount equal to the Tax Liability; or

(b)                    entered into arrangements
acceptable to that or another Group Member to secure that such a payment is
made (whether by authorising the sale of 

 6
 

some or all of the shares on his behalf and the payment to the Group
Member of the relevant amount out of the proceeds of sale or otherwise).

5.10                     All shares allotted under this
Plan shall rank equally in all respects with the shares of the same class then
in issue except for any rights attaching to such shares by reference to a
record date prior to the date of the allotment.

5.11                     For the purposes of paragraph 35A
of Schedule 4, the specified age shall be 55.

6.                                 TAKEOVER, RECONSTRUCTION AND WINDING-UP

6.1                           If any person obtains
control of the Company (within the meaning of section 719 of the Income Tax Act
2003) as a result of making a general offer to acquire shares in the Company,
or having obtained such control makes such an offer, the Remuneration Committee
shall within 14 days of becoming aware thereof notify every Participant thereof
and, subject to sub-rules 5.3, 5.4, 5.5 and 5.7 above, any option may be
exercised within one month (or such longer period as the Remuneration Committee
may permit) of such notification.

6.2                           For the purposes of sub-rule
6.1 above, a person shall be deemed to have obtained control of the Company if
he and others acting in concert with him have together obtained control of it.

6.3                           If any person becomes bound
or entitled to acquire shares in the Company under sections 428 to 430F of the
Companies Act 1985, or if under section 425 of that Act the Court sanctions a
compromise or arrangement proposed for the purposes of or in connection with a
scheme for the reconstruction of the Company or its amalgamation with any other
company or companies, or if the Company passes a resolution for voluntary
winding up, or if an order is made for the compulsory winding up of the
Company, the Remuneration Committee shall forthwith notify every Participant
thereof and, subject to sub-rules 5.3, 5.4, 5.5 and 5.7 above, any option may
be exercised within one month of such notification, but to the extent that it
is not exercised within that period shall (notwithstanding any other provision
of this Plan) lapse on the expiration of that period.

6.4                           In relation to an option
which would but for sub-rule 5.3 above be exercisable by virtue of an event
mentioned in sub-rule 6.1 or 6.3 above, the Remuneration Committee may at its
discretion, and acting fairly and reasonably, treat the relevant condition as
satisfied if, at the time of the event, the Remuneration Committee cannot
determine whether it is in fact satisfied.

6.5                           If any company (“the
acquiring company”):-

6.5.1                            obtains control of the
Company as a result of making -

(a)                     a general offer to acquire the
whole of the issued ordinary share capital of the Company which is made on a
condition such that if it is satisfied the person making the offer will have control
of the Company, or

(b)                    a general offer to acquire all the
shares in the Company which are of the same class as the shares which may be
acquired by the exercise of options granted under this Plan, or

 7
 

6.5.2                            obtains control of the
Company in pursuance of a compromise or arrangement sanctioned by the court
under section 425 of the Companies Act 1985 or Article 418 of the Companies
(Northern Ireland) Order 1986, or

6.5.3                            becomes bound or entitled
to acquire shares in the Company under sections 428 to 430F of that Act or
Articles 421 to 423 of that Order,

any Participant may at
any time within the appropriate period (which expression shall be construed in
accordance with paragraph 26(3) of Schedule 4), by agreement with the
acquiring company, release any option granted under this Plan which has not
lapsed (“the old option”) in consideration of the grant to him of an option (“the
new option”) which (for the purposes of that paragraph) is equivalent to the
old option but relates to shares in a different company (whether the acquiring
company itself or some other company falling within paragraph 16(b) or (c) of
Schedule 4).

6.6                           The new option shall not be
regarded for the purposes of sub-rule 6.5 above as equivalent to the old option
unless the conditions set out in paragraph 27(4) of Schedule 4 are satisfied,
but so that the provisions of this Plan shall for this purpose be construed as
if:-

6.6.1                            the new option were an
option granted under this Plan at the same time as the old option;

6.6.2                            except for the purposes of
the definitions of “Group Member”, “Participating Company” and “Subsidiary” in
sub-rule 1.1 above and the reference to “the Remuneration Committee” in
sub-rule 5.7 above, the expression  “the
Company” were defined as “a company whose shares may be acquired by the
exercise of options granted under this Plan”;

6.6.3                            the relevant condition
referred to in sub-rule 5.3 above had been satisfied; and

6.6.4                            sub-rule 8.2 below were
omitted.

7.                                 VARIATION OF CAPITAL

7.1                           Subject to sub-rule 7.3
below, in the event of any variation of the share capital of the Company, the
Remuneration Committee may make such adjustments as it considers appropriate
under sub-rule 7.2 below.

7.2                           An adjustment made under
this sub-rule shall be to one or more of the following:-

7.2.1                            the number of shares
specified in sub-rule 4.1 above;

7.2.2                            the number of shares in
respect of which any option may be exercised;

7.2.3                            the price at which shares
may be acquired by the exercise of any option;

7.2.4                            where any such option has
been exercised but no shares have been allotted or transferred pursuant to such
exercise, the number of shares which may be so allotted or transferred and the
price at which they may be acquired.

 8
 

7.3                           At a time when Part A of
this Plan is approved by the Inland Revenue under Schedule 4, no adjustment
under sub-rule 7.2 above shall be made without the prior approval of the Inland
Revenue.

7.4                           An adjustment under sub-rule
7.2 above may have the effect of reducing the price at which shares may be
acquired by the exercise of an option to less than their nominal value, but
only in the case of an option to subscribe for shares if and to the extent that
the Remuneration Committee shall be authorised to capitalise from the reserves
of the Company a sum equal to the amount by which the nominal value of the
shares in respect of which the option is exercised and which are to be allotted
pursuant to such exercise exceeds the price at which the shares may be
subscribed for and to apply that sum in paying up such amount on such shares; and
so that on exercise of any option in respect of which such a reduction shall
have been made the Remuneration Committee shall capitalise that sum (if any)
and apply the same in paying up that amount.

8.                                 ALTERATIONS

8.1                           Subject to sub-rules 8.2,
8.4 and 8.5 below, the Board may at any time alter this Plan, or the terms of
any option granted under it (having regard to the fact that, if an alteration
which does not solely relate to a special term is made in a key feature (as
defined in paragraph 30(2) of Schedule 4) of this Scheme at a time when Part A
of this Plan is approved by the Inland Revenue under Schedule 4, the approval
will not thereafter have effect unless the Inland Revenue have approved the
alteration).

8.2                           Subject to sub-rule 8.3
below, no alteration to the advantage of the person to whom options may be
granted shall be made under sub-rule 8.1 above to any of Rules 2, 3.2, 4.1 to
4.8 inclusive, 5.2 to 5.5 inclusive, 5.7, 5.10, 6.1 to 6.4 inclusive, and 7.1
and 7.2 without the prior approval by ordinary resolution of the members of the
Company in general meeting.

8.3                           Sub-rule 8.2 above shall not
apply to:-

8.3.1                            any minor alteration to
benefit the administration of this 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 Group Member; or

8.3.2                            any alteration solely
relating to a Performance Condition.

8.4                           No alteration to the
disadvantage of any Participant shall be made under sub-rule 8.1 above unless:-

8.4.1                            the Board shall have
invited every relevant Participant to give an indication as to whether or not
he approves the alteration, and

8.4.2                            the alteration is approved
by a majority of those Participants who have given such an indication.

8.5                           No alteration which solely
relates to a Performance Condition subject to which an option has been granted
shall be made under sub-rule 8.1 above unless:-

 9
 

8.5.1                            there shall have occurred
an event which shall have caused the Board reasonably to consider that the
Performance Condition would not, without the alteration, achieve its original
purpose, and

8.5.2                            the Board shall act fairly
and reasonably in making the alteration.

9.                                 MISCELLANEOUS

9.1                           The rights and obligations
of any individual under the terms of his office or employment with any Group
Member shall not be affected by his participation in this Plan or any right
which he may have to participate in it and an individual who participates
therein shall waive any and all rights to compensation or damages in consequence
of the termination of his office or employment for any reason whatsoever
insofar as those rights arise or may arise from his ceasing to have rights
under or be entitled to exercise any option under this Plan as a result of such
termination.

9.2                           In the event of any dispute
or disagreement as to the interpretation of this Plan, or as to any question or
right arising from or related to this Plan, the decision of the Board shall be
final and binding upon all persons.

9.3                           Any notice or other
communication under or in connection with this Plan may be given by personal
delivery or by sending the same by post, in the case of a company to its
registered office marked for the attention of the Company Secretary, and in the
case of an individual to his last known address, or, where he is a director or
employee of a Group Member, either to his last known address or to the address
of the place of business at which he performs the whole or substantially the
whole of the duties of his office or employment.

 10
 

PART B -
Not approved by UK Inland Revenue

1.                                 DEFINITIONS AND INTERPRETATION

1.1                           In this Plan, unless the
context otherwise requires:-

“American
Depositary Share” means an authorised depositary security
representing for the time being four ordinary shares in the Company and being
evidenced by an authorised depositary receipt issued by the Bank and quoted on
the New York Stock Exchange;

“the Bank”
means The Bank of New York or such other bank as the Company may from time to
time appoint to issue authorised depositary receipts;

“the Board”
means the board of directors of the Company or a committee appointed by them;

“the Company”
means Diageo plc (registered in England and Wales No. 23307);

“the Grant
Date” in relation to an option means the date on which the option
was granted;

“Group Member”
means:-

1.1.1                            a Participating Company or
a body corporate which is (within the meaning of section 736 of the Companies
Act 1985) the Company’s holding company or a subsidiary of the Company’s
holding company; or

1.1.2                            a body corporate which is
(within the meaning of section 258 of that Act) a subsidiary undertaking of a
body corporate within paragraph 1.1.1 above and has been designated by the
Remuneration Committee for this purpose;

“the London
Stock Exchange” means London Stock Exchange Limited;

“the New York
Stock Exchange” means The New York Stock Exchange, Inc.;

“Part A”
of this Plan means the part designed for approval by the Inland Revenue;

“Part B”
of this Plan means the unapproved part of this Plan;

“Participant”
means a person who holds an option granted under this Plan;

“Participating
Company” means the Company or any Subsidiary;

“Performance
Condition” means a condition related to performance which is
specified by the Remuneration Committee pursuant to sub-rule 3.1 below;

“the Plan”
means the Diageo plc Senior Executive Share Option Plan as herein set out but
subject to any alterations or additions made from time to time pursuant to the
Plan;

“the
Remuneration Committee” means the committee established by the
Company as the remuneration committee of the board of directors of the Company;

 11
 

“Subsidiary”
means a body corporate which is a subsidiary of the Company (within the meaning
of section 736 of the Companies Act 1985) and of which the Company has control
(within the meaning of section 719 of the Income Tax Act 2003);

“the Income
Tax Act 2003” means the Income Tax (Earnings and Pensions) Act 2003;

“US
Participant” means a Participant who is resident in the United
States of America on the Grant Date.

1.2                           Any reference in this Plan
to any enactment includes a reference to that enactment as from time to time
modified, extended or re-enacted.

2.                                 ELIGIBILITY

2.1                           A person is eligible to be
granted an option under Part B of the Plan if (and only if) he is a director or
employee of a Participating Company who is required to devote the whole or
substantially the whole of his working time to the service of any Participating
Company.

3.                                 GRANT OF OPTIONS

3.1                           Subject to Rule 4 below, the
Remuneration Committee may grant an option to acquire shares in the Company,
which may be American Depositary Shares or ordinary shares in the Company as
the Remuneration Committee may determine, upon the terms set out in Part B of
this Plan and upon such other objective terms as the Remuneration Committee may
specify, to any person who is eligible to be granted an option in accordance
with Rule 2 above; and for this purpose an option to acquire includes an option
to purchase and an option to subscribe.

3.2                           Where an option is granted
pursuant to Clause 3.1 above to a US Participant, such option shall be to
acquire American Depositary Shares, and not ordinary shares.

3.3                           The price at which shares or
American Depositary Shares may be acquired by the exercise of an option shall
be determined by the Remuneration Committee before the grant thereof, but shall
not be less than:-

3.3.1                            unless paragraph 3.3.2
applies, if shares of the same class as those shares are listed in the London
Stock Exchange Daily Official List, the average of the middle-market quotation of
shares of that class (as derived from that List) for the three dealing days
immediately preceding the Grant Date;

3.3.2                            if the option is granted
over American Depositary Shares, the average of the closing prices of the
American Depositary Shares on the New York Stock Exchange for the three New
York Stock Exchange trading days immediately preceding the Grant Date; or

3.3.3                            in the case of an option to
acquire shares only by subscription, the nominal value of those shares.

3.4                           An option may only be
granted:-

3.4.1                            within the period of 6
weeks beginning with -

 12
 

(a)                     the date on which this Plan is
approved and adopted by the Company; or

(b)                    the dealing day next following the
date on which the Company announces its results for any period; or

3.4.2                            at any other time when the
circumstances are considered by the Remuneration Committee to be sufficiently
exceptional to justify its grant; and

3.4.3                            within the period of 10
years beginning with the date on which this Plan is adopted by the Company

PROVIDED that no option
may be granted under this Plan during the “close period” as defined in the
Model Code in the London Stock Exchange’s “The Listing Rules”.

3.5                           An option granted under this
Plan to any person:-

3.5.1                            shall not, except as
provided in sub-rule 5.4 below, be capable of being transferred by him; and

3.5.2                            shall lapse forthwith if he
is adjudged bankrupt.

3.6                           The grant of any option
under this Plan shall be subject to obtaining any approval or consent required
under the provisions of the document “The Listing Rules” published by the
London Stock Exchange, of the City Code on Take-overs and Mergers, or of the
listing rules of the New York Stock Exchange, or of any regulation or
enactment.

4.                                 LIMITS

4.1                           Subject to any adjustment
made by the Remuneration Committee pursuant to sub-rule 8.2 below, no options
shall be granted under the Plan which would at the time they are granted, cause
the number of shares which shall have been or may be acquired in pursuance of
options so granted to exceed 342,785,560 (which represents approximately 10 per
cent of the ordinary share capital of the Company in issue on the date the Plan
is adopted by the Company); and for this purpose American Depositary Shares
shall be deemed to be the number of ordinary shares represented thereby.

4.2                           No options shall be granted
in any year which would, at the time they are granted, cause the number of
shares in the Company which shall have been or may be issued in pursuance of
options granted in the period of 10 calendar years ending with that year under
this Plan or under any other executive share option scheme adopted by the
Company to exceed such number as represents 5 per cent. of the ordinary share
capital of the Company in issue at that time.

4.3                           No options shall be granted
in the period of 3 calendar years beginning with the year 1999 or any
successive period of 3 years which would, at the time they are granted, cause
the number of shares in the Company which shall have been or may be issued in
pursuance of options granted in the 3-year period in question under this Plan
or under any other executive share option scheme adopted by the Company to
exceed such number as represents 3 per cent. of the ordinary share capital of
the Company in issue at that time.

 13
 

4.4                           No options shall be granted
in the period of 5 calendar years beginning with the year 1999 which would, at
the time they are granted, cause the number of shares in the Company which
shall have been or may be issued in pursuance of options granted in that
period, or shall have been issued in that period otherwise than in pursuance of
options, under this Plan or under any other employees’ share scheme adopted by
the Company to exceed such number as represents 5 per cent. of the ordinary
share capital of the Company in issue at that time.

4.5                           No options shall be granted
in any year which would, at the time they are granted, cause the number of
shares in the Company which shall have been or may be issued in pursuance of
options granted in the period of 10 calendar years ending with that year, or been
issued in that period otherwise than in pursuance of options, under this Plan
or under any other employees’ share scheme adopted by the Company to exceed
such number as represents 10 per cent. of the ordinary share capital of the
Company in issue at that time.

4.6                           The Remuneration Committee
may from time to time determine a maximum aggregate amount payable on exercise
of options granted under this Plan to any person during any period of twelve
months, such amount to be based upon the expected value of the options on the
date of grant, except in circumstances considered by the Remuneration Committee
to be exceptional.

4.7                           Any option granted under
this Plan shall be limited and take effect so that the above limits are
complied with.

5.                                 EXERCISE OF OPTIONS

5.1                           The exercise of any option
granted under this Plan shall be effected in the form and manner prescribed by
the Remuneration Committee.

5.2                           Subject to sub-rules 5.4 and
5.5 below and to sub-rules 7.1 and 7.3 below, an option may not be exercised
before the third anniversary of the Grant Date.

5.3                           Subject to sub-rule 5.4 and
paragraph 5.5.2 below and to sub-rule 7.4 below, an option granted under this
Plan may not be exercised to the extent that the Performance Condition is not
satisfied.  If the Performance Condition
is not satisfied by the last date on which the Performance Condition may be
satisfied, the option shall thereupon, notwithstanding any other provision of
this Plan, cease to be capable of exercise, unless it has already become
exercisable prior to that date pursuant to sub-rules 5.4 or paragraphs 5.5.1,
5.5.2 or sub-rule 7.4 below(4).

5.4                           If any Participant dies
prior to the last date on which the Performance Condition for an option may be
satisfied, or if any Participant dies after the Performance Condition for the
option has been satisfied, such option may (and must, if at all) be exercised
by his 

(4) Amedended by the Board of Directors on 27 April 2000. Currently
this amendment does not apply to options granted prior to this date. Rule 5.3 will
apply to such options only if Diageo plc seeks and receives approval from the
majority of option holders whose permission to the amendment to the terms of
their options is sought and who respond to the Company's request to amend the
terms of their options. If approval is not received, the wording of clause 5.3
will be "Subject to sub-rules 5.4 and paragraphs 5.5.1 and 5.5.3 below and
to sub-rule 7.4 below, an option granted under this Plan may not be exercised
to the extent that the Performance Condition is not satisfied."

 14
 

personal representatives within 12 months after the date of his death
provided that his death occurs at a time when either he is a director or
employee of a Group Member or he is or would but for sub-rule 5.3 above be
entitled to exercise the option by virtue of sub-rule 5.5 below(5).

5.5                           If any Participant ceases to
be a director or employee of a Group Member (otherwise than by reason of his
death) prior to the last date on which the Performance Condition for an option
may be satisfied, or if any Participant so ceases after the Performance
Condition for the option has been satisfied, the following provisions apply in
relation to such option granted to him under Part B of this Plan(6):-

5.5.1                            if he so ceases by reason
of injury disability or redundancy (within the meaning of the Employment Rights
Act 1996), by reason of retirement or by reason only that his office or
employment is in a company which ceases to be a Group Member, or relates to a
business or part of a business which is transferred to a person who is not a
Group Member, the option may (and subject to sub-rule 5.4 above must, if at
all) be exercised within the period which shall expire on the later of 6 months
after his so ceasing and 42 months after the Grant Date but subject to sub-rule
5.3 above;

5.5.2                            if he so ceases for any
other reason, the option may not be exercised at all unless the Remuneration
Committee shall so permit, in which event it may (and subject to sub-rule 5.4
above must, if at all) be exercised to the extent permitted by the Remuneration
Committee within 6 months of his so ceasing.

5.6                           A Participant shall not be
treated for the purposes of sub-rule 5.5 above as ceasing to be a director or
employee of a Group Member until such time as he is no longer a director or
employee of any Group Member, and a female Participant who ceases to be such a
director or employee by reason of pregnancy or confinement and who exercises
her right to return to work under the Employment Rights Act 1996 before
exercising her option shall be treated for those purposes as not having ceased
to be a director or employee.

5.7                           Subject to sub-rule 5.4
above, but notwithstanding any other provision of this Plan, an option may not
be exercised after the expiration of the period of 10 years (or such shorter 

(5)      Amended by the Board of Directors on 27
April 2000. Currently this amendment does not apply to options granted prior to
this date. Rule 5.4 will apply to such options only if Diageo plc seeks and
receives approval from the majority of option holders whose permission to the
amendment to the terms of their options is sought and who respond to the
Company's request to amend the terms of their options. If approval is not
received, the wording of clause 5.4 will be “If any Participant dies, any
option may (and must, if at all) be exercised by his personal representatives
within 12 months after the date of his death provided that his death occurs at
a time when either he is a director or employee of a Group Member or he is or
would but for sub-rule 5.3 above be entitled to exercise the option by virtue
of sub-rule 5.5 below.”

 

(6)      Amended by the Board of Directors on 27
April 2000. Currently this amendment does not apply to options granted prior to
this date. Rule 5.5 will apply to such options only if Diageo plc seeks and
receives approval from the majority of option holders whose permission to the
amendment to the terms of their options is sought and who respond to the
Company’s request to amend the terms of their options. If approval is not
received, the wording of clause 5.4 will be “If any Participant ceases to be a
director or employee of a Group Member (otherwise than by reason of his death),
the following provisions apply in relation to any options granted to him under
Part B of this Plan:-”

 

 15
 

period as the Remuneration Committee may have determined before the
grant thereof) beginning with the Grant Date.

5.8                           Within 30 days after an
option has been exercised by any person, the Remuneration Committee shall allot
to him (or a nominee for him) or, as appropriate, procure the transfer to him
(or a nominee for him) of the number of shares in respect of which the option
has been exercised, provided that:-

5.8.1                            the Remuneration Committee
considers that the issue or transfer thereof would be lawful in all relevant
jurisdictions; and

5.8.2                            in a case where a Group
Member is obliged to (or would suffer a disadvantage if it were not to) account
for any tax (in any jurisdiction) for which the person in question is liable by
virtue of the exercise of the option and/or for any social security
contributions recoverable from the person in question (together, the “Tax
Liability”), that person has either:

(a)                     made a payment to the Group Member
of an amount equal to the Tax Liability; or

(b)                    entered into arrangements
acceptable to that or another Group Member to secure that such a payment is
made (whether by authorising the sale of some or all of the shares on his
behalf and the payment to the Group Member of the relevant amount out of the
proceeds of sale or otherwise).

5.9                           All shares allotted under
this Plan shall rank equally in all respects with the shares of the same class
then in issue except for any rights attaching to such shares by reference to a
record date prior to the date of the allotment.

6.                                 CASH
EQUIVALENT

6.1                           Where an option granted
under Part B of this Plan has been exercised by any person in respect of any
number of shares, and those shares have not yet been allotted or transferred to
him in accordance with sub-rule 5.8 above, the Remuneration Committee may
determine that, in substitution for his right to acquire such number of those
shares as the Remuneration Committee may decide (but in full and final
satisfaction of his said right), he shall be paid by way of additional
emoluments a sum equal to the cash equivalent of that number of shares or, in
the case of a US Participant, if he elects to defer receipt of the sum pursuant
to his employer’s deferred compensation plan or in accordance with rules
established by the Remuneration Committee, an amount equal to such sum shall be
credited to his account under his employer’s deferred compensation plan.

6.2                           For the purposes of this
Rule, the cash equivalent of any
shares is the amount by which the Remuneration Committee’s opinion of the
market value of those shares on the day last preceding the date on which the
option was exercised (or, if at the relevant time shares of the same class as
those shares were listed in The Stock Exchange Daily Official List, the
middle-market quotation of shares of that class, as derived from that List, on
the dealing day last preceding that date or, in the case of American Depositary
Shares, the closing price of such shares on the New York Stock Exchange on the
dealing day last 

 16
 

preceding that date) exceeds the price at which those shares may be
acquired by the exercise of the option.

6.3                           Subject to sub-rule 6.4
below, as soon as reasonably practicable after a determination has been made
under sub-rule 6.1 above that a person shall be paid a sum in substitution for
his right to acquire any number of shares:-

6.3.1                            the Company shall pay to
him or procure the payment to him of that sum in cash; and

6.3.2                            if he has already paid the
Company for those shares, the Company shall return to him the amount so paid by
him.

6.4                           If the Remuneration
Committee in its discretion so decides:-

6.4.1                            the whole or part of the
sum payable under sub-rule 6.3.1 above shall, instead of being paid to the
person in question in cash, be applied on his behalf in subscribing for shares
in the Company at a price equal to the market value (or, as the case may be,
the middle-market quotation) by reference to which the cash equivalent is
calculated, or in purchasing such shares, or partly in one way and partly in
the other, and

6.4.2                            the Company shall allot to
him or procure the transfer to him (or his nominee) of the shares so subscribed
for or purchased.

6.5                           There shall be made from any
payment under this Rule such deductions (on account of tax or similar
liabilities) as may be required by law or as the Remuneration Committee may
reasonably consider to be necessary or desirable

7.                                 TAKEOVER, RECONSTRUCTION AND WINDING-UP

7.1                           If any person obtains
control of the Company (within the meaning of section 719 of the Income Tax Act
2003) as a result of making a general offer to acquire shares in the Company,
or having obtained such control makes such an offer, the Remuneration Committee
shall within 14 days of becoming aware thereof notify every Participant thereof
and, subject to sub-rules 5.3, 5.4, 5.5 and 5.7 above, any option may be
exercised within one month (or such longer period as the Remuneration Committee
may permit) of such notification.

7.2                           For the purposes of sub-rule
7.1 above, a person shall be deemed to have obtained control of the Company if
he and others acting in concert with him have together obtained control of it.

7.3                           If any person becomes bound
or entitled to acquire shares in the Company under sections 428 to 430F of the
Companies Act 1985, or if under section 425 of that Act the Court sanctions a
compromise or arrangement proposed for the purposes of or in connection with a
scheme for the reconstruction of the Company or its amalgamation with any other
company or companies, or if the Company passes a resolution for voluntary
winding up, or if an order is made for the compulsory winding up of the
Company, the Remuneration Committee shall forthwith notify every Participant
thereof and, subject to sub-rules 5.3, 5.4, 5.5 and 5.7 above, any option may
be exercised within one month of such 

 17
 

notification, but to the extent that it is not exercised within that
period shall (notwithstanding any other provision of this Plan) lapse on the
expiration of that period.

7.4                           In relation to an option
which would but for sub-rule 5.3 above be exercisable by virtue of an event
mentioned in sub-rule 7.1 or 7.3 above, the Remuneration Committee may at its
discretion, and acting fairly and reasonably, treat the relevant condition as
satisfied if, at the time of the event, the Remuneration Committee cannot
determine whether it is in fact satisfied.

7.5                           If any company (“the
acquiring company”):-

7.5.1                            obtains control of the
Company as a result of making -

(a)                     a general offer to acquire the
whole of the issued ordinary share capital of the Company which is made on a
condition such that if it is satisfied the person making the offer will have
control of the Company, or

(b)                    a general offer to acquire all the
shares in the Company which are of the same class as the shares which may be
acquired by the exercise of options granted under this Plan, or

7.5.2                            obtains control of the
Company in pursuance of a compromise or arrangement sanctioned by the court
under section 425 of the Companies Act 1985 or Article 418 of the Companies
(Northern Ireland) Order 1986, or

7.5.3                            becomes bound or entitled
to acquire shares in the Company under sections 428 to 430F of that Act or
Articles 421 to 423 of that Order,

any Participant may at
any time within the appropriate period (which expression shall be construed in
accordance with paragraph 26(3) of Schedule 4 to the Income Tax Act
2003), by agreement with the acquiring company, release any option granted
under this Plan which has not lapsed (“the old option”) in consideration of the
grant to him of an option (“the new option”) which (for the purposes of that
paragraph) is equivalent to the old option but relates to shares in a different
company.

7.6                           The new option shall not be
regarded for the purposes of sub-rule 7.5 above as equivalent to the old option
unless the conditions set out in paragraph 27(4) of Schedule 4 to the Income
Tax Act 2003 are satisfied, but so that the provisions of this Plan shall for
this purpose be construed as if:-

7.6.1                            the new option were an
option granted under this Plan at the same time as the old option;

7.6.2                            except for the purposes of
the definitions of “Group Member”, “Participating Company” and “Subsidiary” in
sub-rule 1.1 above and the reference to “the Remuneration Committee” in
sub-rule 5.7 above, the expression  “the
Company” were defined as “a company whose shares may be acquired by the
exercise of options granted under this Plan”;

7.6.3                            the relevant condition
referred to in sub-rule 5.3 above had been satisfied; and

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7.6.4                            sub-rule 9.2 below were
omitted.

8.                                 VARIATION OF CAPITAL

8.1                           Subject to sub-rule 8.3 below,
in the event of any variation of the share capital of the Company (including a
change in the number of ordinary shares underlying an American Depositary
Share) or in the event the Company makes a demerger by way of exempt
distribution under section 213 of the Income and Corporation Taxes Act 1988 or
pays a special dividend or repurchases its share capital, the Remuneration
Committee may make such adjustments as it considers appropriate under sub-rule
8.2 below.

8.2                           An adjustment made under
this sub-rule shall be to one or more of the following:-

8.2.1                            the number of shares
specified in sub-rule 4.1 above;

8.2.2                            the number of shares in
respect of which any option may be exercised;

8.2.3                            the number of American
Depositary Shares in respect of which any option may be exercised;

8.2.4                            the price at which shares
may be acquired by the exercise of any option;

8.2.5                            where any such option has
been exercised but no shares have been allotted or transferred pursuant to such
exercise, the number of shares which may be so allotted or transferred and the
price at which they may be acquired.

8.3                           An adjustment under sub-rule
8.2 above may have the effect of reducing the price at which shares may be
acquired by the exercise of an option to less than their nominal value, but
only in the case of an option to subscribe for shares if and to the extent that
the Remuneration Committee shall be authorised to capitalise from the reserves
of the Company a sum equal to the amount by which the nominal value of the
shares in respect of which the option is exercised and which are to be allotted
pursuant to such exercise exceeds the price at which the shares may be
subscribed for and to apply that sum in paying up such amount on such shares;
and so that on exercise of any option in respect of which such a reduction
shall have been made the Remuneration Committee shall capitalise that sum (if
any) and apply the same in paying up that amount.

9.                                 ALTERATIONS

9.1                           Subject to sub-rules 9.2,
9.4 and 9.5 below, the Board may at any time alter this Plan, or the terms of
any option granted under it.

9.2                           Subject to sub-rule 9.3
below, no alteration to the advantage of the person to whom options may be
granted shall be made under sub-rule 8.1 above to any of Rules 2, 3.3, 4.1 to
4.6 inclusive, 5.2 to 5.5 inclusive, 5.7, 5.9, 7.1 to 7.4 inclusive, and 8.1
and 8.2 without the prior approval by ordinary resolution of the members of the
Company in general meeting.

9.3                           Sub-rule 9.2 above shall not
apply to:-

 19
 

9.3.1                            any minor alteration to
benefit the administration of this 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 Group Member; or

9.3.2                            any alteration solely
relating to a Performance Condition.

9.4                           No alteration to the
disadvantage of any Participant shall be made under sub-rule 9.1 above unless:-

9.4.1                            the Board shall have
invited every relevant Participant to give an indication as to whether or not
he approves the alteration, and

9.4.2                            the alteration is approved
by a majority of those Participants who have given such an indication.

9.5                           No alteration which solely
relates to a Performance Condition subject to which an option has been granted
shall be made under sub-rule 9.1 above unless:-

9.5.1                            there shall have occurred
an event which shall have caused the Board reasonably to consider that the
special term would not, without the alteration, achieve its original purpose,
and

9.5.2                            the Board shall act fairly
and reasonably in making the alteration.

10.                           MISCELLANEOUS

10.1                     The rights and obligations of any
individual under the terms of his office or employment with any Group Member
shall not be affected by his participation in this Plan or any right which he
may have to participate in it and an individual who participates therein shall
waive any and all rights to compensation or damages in consequence of the
termination of his office or employment for any reason whatsoever insofar as
those rights arise or may arise from his ceasing to have rights under or be
entitled to exercise any option under this Plan as a result of such
termination.

10.2                     In the event of any dispute or
disagreement as to the interpretation of this Plan, or as to any question or
right arising from or related to this Plan, the decision of the Board shall be
final and binding upon all persons.

10.3                     Any notice or other communication
under or in connection with this Plan may be given by personal delivery or by
sending the same by post, in the case of a company to its registered office
marked for the attention of the Company Secretary, and in the case of an
individual to his last known address, or, where he is a director or employee of
a Group Member, either to his last known address or to the address of the place
of business at which he performs the whole or substantially the whole of the
duties of his office or employment.

11.                           INCENTIVE
STOCK OPTIONS

11.1                     In this Rule:

“Incentive Stock Option”
means an option satisfying the requirements of section 422 of the Code;

 20
 

“the Code” means the
United States Internal Revenue Code of 1986 (as amended);

“Market Value” at any
date means the fair market value of ordinary shares in the Company on that
date, as determined by the Remuneration Committee, provided that if on such
date shares of that class are listed in The London Stock Exchange Daily
Official List, the fair market value shall be not less than the middle-market
quotation of such shares (as derived from that List) on the Grant Date.

11.2                     The Remuneration Committee may
grant an Incentive Stock Option over American Depositary Shares to any person
who is eligible to be granted an option under the Plan upon the terms set out
in the Plan and subject to the additional terms and conditions in this Rule.

11.3                     Subject to sub-rule 11.4 below,
the option price for an American Depositary Share subject to an Incentive Stock
Option granted hereunder may not be less than the Market Value of the number of
ordinary shares underlying the American Depositary Share on the Grant Date.

11.4                     A person who, within the meaning of
section 422(b)(6) of the Code, is deemed to own shares in the Company
possessing more than ten per cent of the total combined voting power of all
classes of shares of the Company (or of its parent or subsidiary corporations
within the meaning in section 424 of the Code) shall be eligible to receive an
Incentive Stock Option only if the option price of an American Depositary Share
thereunder is at least 110% of the Market Value of the number of ordinary
shares underlying the American Depositary Share on the Grant Date and only if
the term of the option does not exceed five years.

11.5                     The aggregate Market Value
determined at the Grant Date of the number of ordinary shares underlying the
American Depositary Shares with respect to which Incentive Stock Options first
become exercisable by any Participant in any calendar year shall not exceed
US$100,000.

11.6                     Section 421(a) of the Code will
not apply to an Incentive Stock Option unless it is exercised no more than (i)
twelve months after the date of termination of employment because of total and
permanent disability or (ii) three months after the date of termination of
employment for any reason other than that described in clause (i) and death.

11.7                     Notwithstanding any other
provisions of the Plan, the Company will not be required to issue or cause to
be issued any American Depositary Shares if at such time such issuance would
violate the United States Federal Securities laws or any other laws of the
United States or any state thereof.  In
addition, the holder of any American Depositary Shares issued hereunder agrees
not to sell or transfer such American Depositary Shares in violation of the
United States Federal Securities laws or any other laws of the United States or
any state thereof.  The Company shall
have the right in its sole discretion to modify the terms of the Plan at any
time and from time to time as it deems necessary or appropriate to ensure or
facilitate such compliance with the foregoing and to include appropriate
legends on any options or American Depositary Shares issued or caused to be
issued hereunder.

 21
 

 

CLIFFORD
CHANCE LLP

200 Aldersgate Street

London EC1A 4JJ

 22

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