Document:

<PAGE>

                                                                    Exhibit 4.9

                               [LOGO] PEARSON PLC

                        ANNUAL BONUS SHARE MATCHING PLAN

                                      RULES

This Annual Bonus Share Matching Plan is intended to encourage Participants to
stay with the Group and to identify with the interests of shareholders by
investing some of their own funds in the Company. An individual who is invited
to participate in this Annual Bonus Share Matching Plan may elect for up to 50%
of the after-tax amount of his annual bonus to be used to acquire Shares which
will be held for a period of three or five years under the terms of this Plan as
set out below. At the end of the three or five year period, provided the
Participant has remained an employee of the Group and a performance target has
been satisfied, the Shares will be released to the Participant together with a
number of additional Shares.

The definitions of terms used in these rules are set out in rule 6 below.

GRANT OF AWARDS

BASIC AWARDS

1.1. Following the notification of the amount of any Bonus payable under a Plan,
each Participant may be invited by the Committee to elect to receive up to 50%
of the cash amount of Bonus (after deduction of income tax at the Participant's
marginal rate and employees' national insurance contributions, if payable or, in
relation to non-UK resident Participants, any applicable personal taxation) as a
Basic Award.

1.2. For the purposes of the acquisition of Shares which shall comprise a Basic
Award:

         (i)      the Committee shall, subject to rule 1.11, have absolute
                  discretion as to when the Shares are purchased PROVIDED THAT
                  all the Shares required to satisfy Basic Awards for all
                  Participants shall be purchased on the same dealing day;

         (ii)     the price at which the Shares are purchased shall be the best
                  price reasonably obtainable on the London Stock Exchange; and

         (iii)    the nearest whole number of Shares shall be acquired with the
                  amount in 1.1 above. Any sum remaining following the
                  acquisition of the Shares shall be retained by the Committee
                  for the purpose of making future Awards under this Annual
                  Bonus Share Matching Plan.

                                       1
<PAGE>

MATCHING AWARDS

1.3 Whenever the Committee grants a Basic Award, it shall also grant a Matching
Award comprising the nearest whole number of Shares which may be acquired (at
the price referred to in rule 1.2(ii) above) with the Gross Amount of Bonus used
to calculate that Basic Award.

RELEASE PERIODS

1.4 On the third anniversary of the Grant Date, or as soon as reasonably
practicable thereafter, a Participant will be notified whether or not the
performance target set out in rule 1.9 below has been satisfied over this three
year period. A Participant may elect, within 30 days of such notification for
the Basic Award to be released to him.

1.5 If the Participant so elects under rule 1.4 for the release of the Basic
Award and:

         (i)      the performance target set out in rule 1.9 below has been
                  satisfied, the Restricted Period in relation to the Basic
                  Award shall cease and the Basic Award together with one half
                  of the Matching Award shall be released as soon as reasonably
                  practicable thereafter. The balance of the Matching Award
                  shall lapse;

         (ii)     the performance target set out in rule 1.9 below has not been
                  satisfied, the Restricted Period in relation to the Basic
                  Award shall cease and the Basic Award shall be released as
                  soon as reasonably practicable thereafter. The Matching Award
                  shall lapse in its entirety.

1.6 If the Participant does not elect for the release of the Basic Award under
rule 1.5 and:

         (i)      the performance target set out in rule 1.9 below is satisfied
                  on the third anniversary of the Grant Date: or

         (ii)     the performance target set out in rule 1.9 below is not
                  satisfied on the third anniversary of the Grant Date.

the Restricted Period in relation to the Basic Award shall continue and the
Matching Award shall remain subject to the performance target set out in rule
1.9 below over a five year period from the Grant Date. On the fifth anniversary
of the Grant Date, or as soon as reasonably practicable thereafter, a
Participant will be notified whether the performance target set out in rule 1.9
below has been satisfied over this five year period. If the performance target
has been

                                       2
<PAGE>

satisfied, the Basic Award together with the Matching Award shall be released
automatically.

1.7 Where a Participant elects, under rule 1.6(i) for an Award to continue to
the fifth anniversary of the Grant Date and the performance target in rule 1.9
below is not satisfied over the five year period, the Basic Award together with
one half of the Matching Award shall be released to the Participant as soon as
reasonably practicable after the fifth anniversary of the Grant Date. The
balance of the Matching Award shall lapse:

1.8 In the event that the performance target set out in rule 1.9 below is not
satisfied on either the third or the fifth anniversary of the Grant Date, the
Restricted Period in relation to the Basic Award shall cease and the Basic Award
shall be released to the Participant as soon as reasonably practicable
thereafter but the Matching Award shall lapse.

PERFORMANCE TARGET

1.9 The performance target referred to in rules 1.4, 1.5, 1.6, 1.7 and 1.8 is
that the percentage growth in the adjusted earnings per share of the Company
over the relevant period (comparing the adjusted earnings per share) stated in
the Company's accounts for the financial year ended prior to the Grant Date with
that for the financial year ending three or five years, as the case may be,
later) shall exceed the percentage growth in the UK Retail Prices Index (All
Items) by an average of at least 3 per cent. per annum.

GRANT PROCEDURE

1.10 As a condition of receiving an Award, each Participant shall be required to
agree to be bound by these rules.

1.11 Subject to the Participant's agreement referred to in rule 1.10 above, the
Award shall be granted by the Committee within 28 days of the Participant's
election to receive the Award unless the making of the Award would be prohibited
by law or the Model Code for Securities Transactions by Directors of Listed
Companies (or the Company's dealing rules). If at the end of the 28 day period
such prohibition remains in force, the Committee shall invite the Participant to
reconsider whether he wishes to elect to receive an Award or whether he wishes
to receive all of his Bonus in cash.

1.12 Each Award shall be evidenced by a Grant Letter which shall be signed on
behalf of the Company.

1.13 The Company shall be under no obligation to purchase the Shares comprised
in a Matching Award at or around the Grant Date but shall procure that there are
sufficient Shares available for transfer to satisfy a Matching Award by the
relevant release date set out in rules 1.4, 1.5, 1.6 and 1.7 above.

                                       3
<PAGE>

1.14 Nothing in these rules or in a Participant's contract of employment shall
be construed as giving to any Participant a right to receive, or be considered
for, an Award. Neither an Award nor the Shares to which it relates shall be
pensionable for any purpose.

TERMS OF AWARDS

2.1 The main terms of each Award (which shall be set out or referred to in the
Grant Letter) shall be as follows:

(a)      NUMBER OF SHARES AND THE PERFORMANCE TARGET - The Grant Letter shall
         state the number of Shares comprised in the Basic Award and the
         Matching Award, and the performance target to which the Matching Award
         is subject.

(b)      RESTRICTED PERIOD FOR BASIC AWARD - The Restricted Period in relation
         to a Basic Award shall commence on the Grant Date and shall (unless
         foreshortened pursuant to these rules) expire on the third or fifth
         anniversary thereof as set out in rules 1.4, 1.5, 1.6, 1.7 and 1.8
         above. During the Restricted Period, the Participant shall not sell,
         transfer, pledge, assign or otherwise dispose of all or any Shares
         comprised in the Basic Award.

         Any attempt by the Participant to sell, transfer, pledge, assign or
         otherwise dispose of such Shares or any interest therein shall result
         in the immediate forfeiture of the Shares comprised in the Basic Award.

(c)      RIGHTS OF PARTICIPANT DURING RESTRICTED PERIOD - The beneficial
         interest in the Shares comprised in a Basic Award shall pass to the
         Participant on the Grant Date, even though the Shares comprised therein
         are capable of forfeiture in accordance with these rules. During the
         Restricted Period, the Participant shall be entitled to receive all
         dividends payable in respect of the Shares and shall have the rights
         commonly enjoyed by a beneficial owner of Shares. The Participant shall
         have no such rights in respect of Shares comprised in a Matching Award.

(d)      REGISTRATION AND CUSTODY OF SHARES - The Shares comprised in a Basic
         Award shall be registered in the name of the Participant, but the
         Participant shall be required to deposit the certificates relating to
         those Shares with the Secretary throughout the Restricted Period.

(e)      LAPSE OF RESTRICTIONS - Within 14 days following the expiry of the
         Restricted Period, the Secretary shall deliver to the Participant the
         certificate(s) in relation to the Shares comprised in the Basic Award.

                                       4
<PAGE>

(f)      TERMINATION OF EMPLOYMENT - In the event that the Participant ceases to
         be an employee of a member of the Group during the Restricted Period:

         (i)      by reason of death, injury, disability or normal retirement
                  (aa) the Basic Award shall continue in force until the date on
                  which the linked Matching Award is released or lapses if the
                  performance target set out in rule 1.9 is not satisfied, and
                  (bb) the Matching Award shall continue (as though the
                  Participant had remained in employment) until the next to
                  occur of the third or fifth anniversary of the Grant Date, at
                  which time (if the performance target is met) the Shares
                  comprised therein shall be released but reduced pro-rata to
                  reflect the Participant's actual period of service until his
                  termination date PROVIDED THAT if the performance target was
                  met at the third anniversary of the Grant Date, and the
                  Participant leaves after that date, he shall be entitled to
                  one half of the Matching Award in full and the pro-rata
                  reduction shall apply to the balancing one half in respect of
                  the period from the third anniversary of the Grant Date to the
                  termination date. For the avoidance of doubt, if the
                  performance target is not met at the relevant anniversary, the
                  Matching Award shall lapse in its entirety and the Restricted
                  Period in relation to the Basic Award shall cease and the
                  Basic Award shall be released as soon as reasonably
                  practicable thereafter; or

         (ii)     for Cause, the Basic Award shall be forfeited and the Matching
                  Award shall lapse in its entirety;

         (iii)    for any other reason than in (i) and (ii) above (aa) the Basic
                  Award shall continue in force until the date on which the
                  Matching Award is released or lapses if the performance target
                  set out in rule 1.9 is not satisfied, and (bb) the Matching
                  Award shall be treated in such manner as the Committee, in its
                  absolute discretion determines. For the avoidance of doubt,
                  the Committee may determine that the Matching Award shall
                  lapse in its entirety.

(g)      CONSEQUENCES OF FORFEITURE OF SHARES COMPRISED IN A BASIC AWARD - In
         the event of forfeiture of Shares under a Basic Award, those Shares
         shall, within 14 days of the relevant event, be transferred by the
         Participant for nil consideration, to the Nominated Transferee.

                                       5
<PAGE>

(h)      CHANGE OF CONTROL - If any person:

         (i)      obtains Control of the Company as a result of making an offer
                  to acquire Shares which is either unconditional or is made on
                  a condition such that if it is satisfied the person making the
                  offer will have Control of the Company;

         (ii)     becomes bound or entitled to acquire Shares under sections 428
                  to 430F of the Companies Act 1985; or

         (iii)    obtains Control of the Company in pursuance of a compromise or
                  arrangement sanctioned by the Court under section 425 of the
                  Companies Act 1985,

        then both the Basic Award and the Matching Award shall be released
        within 30 days of the relevant event, but the number of Shares in the
        Matching Award shall be reduced pro-rata to reflect the Participant's
        actual period of service until the relevant event. The performance
        target shall not apply.

ADJUSTMENTS

3.1 In the event of any capitalisation issue, rights issue or sub-division or
consolidation of or other variation in the ordinary share capital of the
Company:

(a)      the Participant shall, in respect of his Basic Award, be treated in the
         same manner as any other holder of Shares, save that (unless the
         Committee determines otherwise):

         (i)      in the event of a rights issue in respect of Shares, the
                  Participant shall be required to sell sufficient rights
                  nil-paid (at such time during the rights issue as the
                  Secretary thinks fit) as will enable the Participant to
                  acquire with the proceeds of sale the remainder of his rights
                  entitlement;

         (ii)     in the event of receipt of cash (other than dividends paid in
                  the normal course) or securities (other than Shares) in
                  respect of Shares (on a demerger or other reorganisation of
                  the share capital of the Company), the Participant shall be
                  required to apply that cash (or the proceeds of sale of such
                  securities), after allowing for tax thereon, in the purchase
                  of further Shares; and

         (iii)    the Participant shall deposit with the Secretary for the
                  remainder of the Restricted Period the certificates in respect
                  of Shares or other securities received in connection with the
                  relevant event; and

(b)      the number of Shares comprised in the Participant's Matching Award
         shall be adjusted in such manner as the Committee, in its absolute
         discretion, thinks fit.

SOURCE OF SHARES

4.1 Unless the Committee invokes this rule, Shares required to satisfy the
rights of Participants with respect to Awards shall be purchased on the London
Stock Exchange. However, notwithstanding rule 1.2, the Committee may permit
subscriptions of Shares to satisfy the rights of Participants with respect to
Awards. The aggregate number of Shares which may be issued for such purposes,
when added to the number of Shares issued or issuable pursuant to subsisting
rights to subscribe for Shares granted under any other Employees' Share Scheme
established by the Company, shall not exceed on the date of subscription:

(a)      5% of the issued ordinary share capital of the Company at that date in
         respect - of rights under this Plan and any other Employees' Share
         Schemes granted in the preceding 10 years; or

(b)      3% of the issued ordinary share capital of the Company at that date in
         respect of rights under this Plan and any other Employees' Share
         Schemes granted in the preceding 3 years.

References to issues of Shares shall, for the avoidance of doubt, only include
arrangements under which Shares are newly allotted and issued.

ADMINISTRATION

5.1 The rights and obligations of any Participant under the terms of his office
or employment shall not be affected by his participation in the Annual Bonus
Share Matching Plan, and each Participant shall be deemed to waive all and any
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 hereunder as a result of such
termination or from the loss or diminution in value of such rights or
entitlements.

5.2 All Share certificates and other communications relating to the Annual Bonus
Share Matching Plan shall be sent at the Participant's risk.

5.3 Any liability of a Participant to taxation in respect of an Award shall be
for the account of the relevant Participant, and the Participant shall comply
with any arrangements specified by the Company for the payment of taxation
(including, without limitation, the sale of sufficient Shares to enable the
Company to satisfy its obligations in respect of deduction of taxation at
source).

                                       6
<PAGE>

GENERAL

6.1. The Company reserves the right to terminate the Annual Bonus Share Matching
Plan or amend these rules at any time PROVIDED THAT the provisions governing
eligibility to participate in this Annual Bonus Share Matching Plan, individual
participation limits, the number of shares available under Awards and the
consequences of any capitalisation issue, rights issue or sub-division or any
other variation of capital cannot be altered to the advantage of Participants
without the prior approval of shareholders in general meeting (except for minor
amendments to benefit the administration of the Annual Bonus Share Matching
Plan, to take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for participants or for
any group company). In addition, no amendment shall operate to affect adversely
any right already acquired by a Participant.

6.2. This Annual Bonus Share Matching Plan shall constitute an Employees' Share
Scheme so that financial assistance provided by the Company or its subsidiaries
for those purposes shall be lawful by reason of section 153(4)(b) of the Act.

6.3 The Company shall bear all dealing costs and stamp duty relating to the
purchase of Shares under this Annual Bonus Share Matching Plan.

6.4. These rules shall be governed by and construed in accordance with English
law.

DEFINITIONS

7.1 In these rules, unless the context otherwise requires, the following
expressions shall have the following meanings respectively:

AWARD shall mean a Basic Award and the Matching Award linked to that Basic
Award;

BASIC AWARD shall mean an award of Shares made under rule 1.1 of this Bonus
Matching Plan;

CASH BONUS shall mean a cash bonus payable under an annual bonus plan;

CAUSE shall mean any material breach by a Participant of his employment terms
(including, without limitation, improper recording or reporting of financial or
other information which may have been relevant in determining any Award under
this Annual Bonus Share Matching Plan);

COMMITTEE shall mean the personnel committee of the Company or another
appropriate committee of the board of the Company;

                                       7
<PAGE>

COMPANY shall mean Pearson plc;

CONTROL shall have the meaning given to it by section 840 of the Income and
Corporation Taxes Act 1988;

EMPLOYEES' SHARE SCHEME shall have the meaning given to it by section 743 of the
Companies Act 1985 (being a scheme for encouraging or facilitating the holding
of Shares by employees of the Group);

GRANT DATE shall mean the date on which an Award is made by the Committee under
rule 1.11;

GRANT LETTER shall mean the notification to a Participant setting out the terms
of an Award;

GROSS AMOUNT OF BONUS shall mean the amount of Bonus elected by a Participant
under rule 1.1 to be received as a Basic Award (prior to the deduction of tax
thereon);

GROUP shall mean the Company and the Subsidiaries, and MEMBER OF THE GROUP shall
be construed accordingly;

MATCHING AWARD shall mean a conditional award of additional Shares linked to a
Basic Award, made under rule 1.3 and released in accordance with rules 1.4, 1.5,
1.6, 1.7 and 1.8 of this Bonus Matching Plan;

NOMINATED TRANSFEREE shall mean a person nominated by the Company to acquire
Shares from a Participant in accordance with rule 2.1(g) (including, without
limitation, an employee trust established by the Company for the purpose of
facilitating distributions of Shares to and acquiring Shares from employees
holding Shares);

PARTICIPANT shall mean an individual participating in a Plan;

RESTRICTED PERIOD in relation to a Basic Award, shall mean the period specified
in rule 2.1(b);

A PLAN shall mean an annual bonus plan operated by any member of the Group;

THE SECRETARY shall mean the Secretary of the Company, or some other person
nominated by the Committee;

SHARE shall mean an ordinary share in the capital of the Company or any other
shares representing those Shares following any reorganisation of the share
capital of the Company; and

SUBSIDIARY shall mean any company which at the time qualifies as a subsidiary of
the Company under Section 736 of Companies Act 1985.

                                       8
<PAGE>

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

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

MAY 1998
<PAGE>

                                 [LOGO] PEARSON

              PEARSON ANNUAL BONUS SHARE MATCHING PLAN (THE PLAN):

                            SUMMARY FOR US RESIDENTS

                                    OVERVIEW

The Plan operates as follows in any year in which the Personnel Committee of
Pearson plc decides to operate it:

o    you elect what proportion of your after-tax bonus you wish to bring within
     the Plan - up to a maximum of 5O per cent of the after-tax amount of bonus;

o    the cash amount you elect is used to buy shares in Pearson plc (SHARES) on
     the stock market, at a date shortly after your election to join the Plan.
     The share certificate will be retained in the Company Secretarial
     department;

o    the Company agrees to "match" each Share purchased on a 1-for-1 basis after
     five years (the RESTRICTED PERIOD) provided (a) the Company's adjusted
     earnings per share has grown by at least 3% per annum more than the UK
     Retail Prices Index (All Items) over the period and (b) save as described
     below, you remain an employee of the Pearson group throughout that period.
     You may withdraw your Shares after three years, in which case (assuming the
     other conditions are met) matching will only be on a 1-for-2 basis;

o    the matching Shares will only attract income tax if and when you receive
     them. The number of matching Shares is therefore calculated on a pre-tax
     basis in order to achieve the relevant matching level (1-for-1 or l-for-2).
     This is illustrated in the Example;

o    the matching has been calculated on the pre-tax value of your bonus. Should
     tax rates change over the three or five year period, this may affect the
     after-tax value of the matching Shares you receive;

o    if you die or leave by reason of injury, disability or normal retirement
     during the Restricted Period, you will not lose your entitlement to the
     matching Shares, which will be released on a scaled down basis to reflect
     your period of participation in the plan (together with the full number of
     Shares purchased with your bonus) on the third anniversary, subject to the
     performance condition being met;

o    if you are dismissed for cause during the Restricted Period, both
     categories of Shares will be forfeited immediately;

o    if you leave for other reasons during the Restricted Period, the Shares
     purchased with your bonus will not be released until the end of the period,
     and the Personnel Committee will determine the treatment of your matching
     Shares;

o    special rules apply if you leave between the third and fifth anniversaries;

o    if the Company is taken over during the Restricted Period, both categories
     of Shares will be released immediately (on a scaled down basis in the case
     of the matching shares to reflect your period of participation in the plan,
     but the performance condition shall not apply); and

o    during the Restricted Period, you will be entitled to dividends on the
     Shares purchased with your bonus. You will not be entitled to dividends on
     the matching Shares, as you only become entitled to those Shares at the end
     of the period (assuming the relevant conditions are met).
<PAGE>

                                   PLAN RULES

The above is only a summary of the main points of the Plan. The full rules are
available separately on request.

                                   TAX ASPECTS

US FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN FOR US TAXPAYERS

The following is a brief overview of federal income tax implications for a US
taxpayer. It does not purport to be complete (i.e. it does not discuss any
applicable state and local taxes). In view of the individual nature of tax
consequences, you are urged to consult your own tax advisor concerning your
personal situation and tax residence.

(a)      Shares purchased with your bonus - These Shares are purchased out of
         after-tax earnings, and you are the beneficial owner of the Shares on
         the date the Shares are purchased. The tax cost (or "basis") of the
         Shares will be their purchase price. When you sell or otherwise dispose
         of the Shares, any increase in the value of these Shares will be
         subject to capital gains tax. At present, capital gain on the sale of
         property held for over 18 months is taxable at a maximum rate of 20%,
         capital gain on the sale of property held for over one year but not for
         over 18 months is taxable at a maximum rate of 28%, and capital gain on
         the sale of property held for one year or less is taxable at ordinary
         income rates. Generally, income need not be reported until the year in
         which you make a sale or other disposition of the Shares (although you
         will be required to report any dividends you receive on the Shares in
         the year of such receipt). The mere release of the Shares to you at the
         end of the Restricted Period does not constitute a sale or disposition
         that would trigger capital gains tax.

(b)      Matching Shares - The matching Shares will only be subject to federal
         income tax if and when you receive the Shares, such Shares being taxed
         as ordinary income based on their market value at that time. Delivery
         of the matching Shares is treated as a payment of wages and therefore
         is subject to applicable federal, state and local withholding
         requirements at the time of delivery. In order to satisfy withholding
         tax requirements, the Company will, prior to distributing the Shares to
         you, sell a portion of the matching Shares. The tax basis of the Shares
         for purposes of capital gains tax upon the sale or other disposition of
         the Shares will be their market value when they are released to you.

                                     EXAMPLE

<TABLE>

ASSUMED FACTS:                  Bonus elected $10,000 pre-tax ($6,000 after tax, assuming 40% withholding tax
                                rate*)
                                1-for-1 full matching, if in employment in 2004
                                Share price - 1999 : $6.00; 2004 : $12.00
                                Tax rates remain constant between 1999 and 2004

--------------------------------------------------------------------------------------------------------------------
                         Shares purchased with bonus                    Matching shares
--------------------------------------------------------------------------------------------------------------------
<S>                      <C>                                            <C>
1999 POSITION            $6,000 invested in 1,000 shares.  The shares   Right to call in 2004 for 1,667
                         are purchased with after-tax money.            matching shares - that is, the pre-tax
                                                                        bonus of $10,000 divided by $6 (the use
                                                                        of $10,000 reflecting the fact that
                                                                        these shares are not taxed in 1999).

--------------------------------------------------------------------------------------------------------------------
2004 POSITION            1,000 shares now worth $12,000 (such           1,667 shares called for (worth $20,000).
                         increase in value subject to capital gains     After sale of 667 shares to satisfy tax
                         tax if and when shares are sold or otherwise   withholding, assuming 40% rate, 1,000 shares
                         disposed of).                                  worth $12,000 remain
--------------------------------------------------------------------------------------------------------------------
</TABLE>

* In determining the amount available for investment in the plan, an effective
tax rate of 40% has been assumed for US resident participants.<PAGE>

                                                                 Exhibit 4.10

                                   PEARSON plc

                          EMPLOYEE STOCK PURCHASE PLAN

      1. PURPOSE. The purpose of the Pearson plc Employee Stock Purchase Plan
(the "Plan") is to encourage and facilitate the ownership of ordinary shares of
Pearson plc (the "Company") by eligible employees of the Company's U.S.
Subsidiaries. The Board of Directors of the Company (the "Board") believes that
employee participation in ownership will be to the mutual benefit of the
employees and the Company. The Plan is intended to constitute an "employee stock
purchase plan" within the meaning of section 423 of the United States Internal
Revenue Code of 1986, as amended (the "Code").

      2. DEFINITIONS. Terms not otherwise defined herein shall have the meaning
set forth below:

      (a) "Committee" means the Board or a committee appointed by the Board to
administer the Plan.

      (b) "Compensation" means, with respect to any paycheck, either (i) the
portion thereof representing the gross remuneration paid for services rendered,
or (ii) the portion thereof representing base salary or regular wages, as
determined by the Committee.

      (c) "Eligible Employee" means an Employee who is eligible to participate
pursuant to Section 4(a).

      (d) "Employee" means each individual who is an employee of U.S. Subsidiary
for purposes of federal tax withholding; PROVIDED, HOWEVER, that the term
Employee shall not include any individual (i) who for purposes of section
423(b)(3) of the Code, is deemed to own stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company, or (ii)
who is on an approved leave of absence that has exceeded 90 days and whose right
to reemployment is not guaranteed either by statute or by contract.

       (e) "Market Value" means the last sales price of a Share or, if
unavailable, the average of the closing bid and asked prices per Share at the
end of regular trading on such date (or, if there was no trading or quotation in
the Shares on such date, on the next preceding date on which there was trading
or quotation) as provided by the United States national securities exchange or
interdealer quotation system on which the Shares are listed or quoted.

      (f) "Offering" means each separate offering of Shares under the Plan that
occurs during each Offering Period.

<PAGE>

      (g) "Offering Date" means the date on which each Offering Period is to
commence, as determined by the Committee; PROVIDED, HOWEVER, that no Offering
Period shall commence prior to the time the Shares are listed for trading on a
United States national securities exchange or interdealer quotation system.

      (h) "Offering Period" means a period of such duration as determined by the
Committee; PROVIDED, HOWEVER, that the duration of the Offering Period shall not
exceed (i) 27 months, where the Purchase Price is set by reference to the lower
of the Market Price on the Offering Date or the Purchase Date, or (ii) 5 years,
where the Purchase Price is set solely by reference to the Market Price on the
Purchase Date. Offering Periods may run consecutively or may overlap, as
determined by the Committee.

      (i) "Participant" means each Eligible Employee who elects to participate
in the Plan.

      (j) "Purchase Agreement" means the document prescribed by the Committee
pursuant to which an Eligible Employee has enrolled to be a Participant.

      (k) "Purchase Date" means the last day of each Offering Period, and such
interim dates, as determined by the Committee, on which Shares are purchased
pursuant to the Plan.

      (l) "Purchase Price" shall mean the price at which a Share shall be
purchased on each Purchase Date, the method for determining which shall be set
in advance of each Offering by the Committee; PROVIDED, HOWEVER, that the
Purchase Price shall not be less than 85% of the Market Value on the (i)
Offering Date, or (ii) Purchase Date, whichever is lower.

      (m) "Share" means an ordinary share of the Company, that, at the election
of the Committee, may be in the form of an American Depository Receipt ("ADR")
representing an ordinary share.

      (n) "Stock Purchase Account" means a noninterest bearing bookkeeping entry
established by the Company or a U.S. Subsidiary, which shall record all amounts
deducted from a Participant's Compensation or otherwise contributed by the
Participant for the purpose of purchasing Shares for such Participant under the
Plan, reduced by all amounts applied to the purchase of Shares for such
Participant under the Plan. Neither the Company nor any U.S. Subsidiary shall be
required to segregate or set aside any amounts so deducted or contributed, and
such bookkeeping entry shall not represent an interest in any assets of the
Company or a U.S. Subsidiary. All deducted or contributed amounts shall remain
part of the general assets of the Company or a U.S. Subsidiary until they are
applied to purchase Shares under the Plan, and until such time may be used for
any corporate purpose.

      (o) "U.S. Subsidiary" shall mean a corporation incorporated in any state
of the United States that is described in section 424(f) of the Code with
respect to the Company and that has, with the permission of the Board, adopted
the Plan.

                                       2
<PAGE>

      3.  ADMINISTRATION.

      (a) The Plan shall be administered by the Committee who shall have the
authority and power to adopt, construe, and enforce rules and regulations not
inconsistent with the provisions of the Plan. In administering the Plan, the
Committee shall ensure that all Eligible Employees have the same rights and
privileges, to the extent required under Section 423(b)(5) of the Code. Any
action of the Committee with respect to the Plan shall be final, conclusive and
binding on all persons, including the Company, its U.S. Subsidiaries,
Participants, and any person claiming any rights under the Plan from or through
any Participant, except to the extent the Committee may subsequently modify, or
take further action not consistent with, its prior action. The Committee may
delegate to officers or managers of the Company or its U.S. Subsidiaries the
authority, subject to such terms as the Committee shall determine, to perform
such functions as the Committee may determine, to the extent permitted under
applicable law.

      (b) Each member of the Committee shall be entitled to, in good faith, rely
or act upon any report or other information furnished to him by any officer or
other employee of the Company, its U.S. Subsidiaries, the Company's independent
certified public accountants or any compensation consultant, legal counsel or
other professional retained by the Company to assist in the administration of
the Plan. No member of the Committee, or any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on its behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination or interpretation.

      4.  ELIGIBILITY AND PARTICIPATION.

      (a) During each Offering, each Employee shall be eligible to participate
in the Plan; PROVIDED, HOWEVER, that with respect to any Offering, the Committee
may exclude such Employees who are described in Section 423(b)(4) of the Code.

      (b) Each Eligible Employee may elect to participate in an Offering by
completing a Purchase Agreement at such time as determined by the Committee.

      (c) Unless otherwise determined by the Committee, the purchase of Shares
under the Plan shall be funded solely through payroll deductions accumulated
during the Offering Period. In a Purchase Agreement, an Eligible Employee shall
designate the amount of Compensation to be deducted from each paycheck, subject
to such maximum limit as may be set by the Committee on a uniform basis. Such
payroll deductions shall be credited to the Participant's Stock Purchase
Account. Increases or decreases to a Participant's rate of payroll deduction
during an Offering Period may be permitted in the discretion of the Committee,
based on uniform rules to be established by the Committee.

                                       3
<PAGE>

      (d) Any Participant may voluntarily withdraw from the Plan by filing a
notice of withdrawal with the Committee at such time in advance as the Committee
may specify. Upon such withdrawal, there shall be paid to the Participant the
amount, if any, standing to his credit in his Stock Purchase Account.

      (e) Except as otherwise provided by the Committee, if a Participant ceases
to be employed by the Company or a U.S. Subsidiary, participation in the Plan
shall cease and the entire amount, if any, standing to the Participant's credit
in his Stock Purchase Account shall be refunded to him. To the extent provided
by the Committee, if a Participant remains employed by the Company or a U.S.
Subsidiary, but ceases to be an Eligible Employee, he may continue to
participate in the Plan through the end of the Offering Period in which such
cessation occurs, but may participate thereafter only pursuant to Section 4(a).

      5. PURCHASE OF SHARES. Subject to Section 6, on any Purchase Date, there
shall be purchased on behalf of each Participant that number of Shares which
equals the amount then credited to each Participant's Stock Purchase Account
divided by the Purchase Price (rounded down to the nearest whole Share). Any
amounts not so applied (i.e., that would result in a fractional Share) shall
remain in the Participant's Stock Purchase Account.

      6.  LIMITATIONS.

      (a) The aggregate number of Shares that may be purchased under the Plan
shall not exceed 30 million. Shares delivered to a Participant upon purchase
may, at the Company's discretion, either be newly issued directly from the
Company from its authorized but unissued Shares or acquired by open market
purchase on behalf of the Participant; PROVIDED, HOWEVER, that notwithstanding
the first sentence of this Section 6(a), the maximum number of Shares that may
be newly issued pursuant to the Plan on any given date shall not exceed (x)
minus (y), where (x) equals 10% of the total outstanding Shares on such date,
and (y) equals the number of Shares newly issued under the Plan and each other
share incentive or option plan approved by the Company within the ten years
preceding such date, plus the number of Shares placed under all awards
outstanding on such date under the Plan or any such other plan which may lead to
a new issue of Shares.

      (b) The aggregate number of Shares that may be purchased by any
Participant with respect to any one Offering Period shall not exceed 25,000.

      (c) No Eligible Employee shall be granted the right to purchase Shares
that would exceed the limitation set forth in Section 423(b)(8) of the Code.

In order to satisfy the foregoing limitations, the Committee shall have the
right to (i) decrease or suspend a Participant's payroll deductions, (ii) not
apply all or any portion of a Participant's Stock Purchase Account toward the
purchase of Shares, and (iii) repurchase Shares previously purchased by a
Participant at the Purchase Price paid by the Participant. In respect of Section
6(a) above, any such method shall be applied on a uniform basis.

                                       4
<PAGE>

      7. RESTRICTIONS ON SHARES. Shares purchased by a Participant shall, for
all purposes, be deemed to have been issued at the close of business on the
relevant Purchase Date. Prior to that time, none of the rights or privileges
of a stockholder of the Company shall inure to the Participant with respect
to such Shares. All Shares purchased under the Plan shall be delivered by the
Company in a manner as determined by the Committee and may consist, in whole
or in part, of authorized and unissued shares, treasury shares or shares
acquired in the market on a Participant's behalf. The Committee shall have
the authority to determine the restrictions, if any, to which Shares shall be
subject (including lock-ups and other transfer restrictions), and may
condition the delivery of the Shares upon the execution by the Participant of
any agreement providing for such restrictions and/or require that the Shares
be held in a brokerage or custodial account established with a broker or
other custodian selected by the Committee in order to enforce such
restrictions.

      8.  ADJUSTMENTS.

      (a) In the event that the Committee shall determine that any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or exchange of Shares or other
securities, stock dividend or other special, large and non-recurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the limitations on the number of Shares that may be purchased under Sections
6(a) and (b), (ii) the kind of Shares reserved for purchase under the Plan, and
(iii) the calculation of the Purchase Price.

      (b) If the Shares shall cease for any reason to be listed on any
nationally recognized stock exchange or quotation system in the United States,
the Plan and any Offering hereunder shall thereupon terminate, and the balance
then standing to the credit of each Participant in his Stock Purchase Account
shall be returned to him.

      9. GENERAL PROVISIONS.

      (a) COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company shall not be
obligated to issue or deliver Shares under the Plan in a transaction subject to
the requirements of any applicable securities law, any requirement under any
listing agreement between the Company and any national securities exchange or
automated quotation system or any other law, regulation or contractual
obligation of the Company until the Company is satisfied that such laws,
regulations, and other obligations of the Company have been complied with in
full. Certificates representing Shares issued under the Plan will be subject to
such stop-transfer orders and other restrictions as may be applicable under such
laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.

                                       5
<PAGE>

      (b) NONALIENATION. The right to purchase Shares under the Plan is personal
to the Participant, is exercisable only by the Participant during his lifetime
except as hereinafter set forth, and may not be assigned or otherwise
transferred by the Participant. Notwithstanding the foregoing, there shall be
delivered to the executor, administrator or other personal representative of a
deceased Participant such Shares and such residual balance as may remain in the
Participant's Stock Purchase Account as of the date the Participant's death
occurs. However, such representative shall be bound by the terms and conditions
of the Plan as if such representative were a Participant.

      (c) TAXES. The Company or any U.S. Subsidiary shall be entitled to require
any Participant to remit, through payroll withholding or otherwise, any tax that
it determines it is so obligated to collect with respect to the purchase or
subsequent sale of Shares, and the Committee shall institute such mechanisms as
shall insure the collection of such taxes. If Shares acquired with respect to an
Offering are sold or otherwise disposed of within two years after the Offering
Date or within one year after the Purchase Date, the holder of the Shares
immediately prior to the disposition shall promptly notify the Company in
writing of the date and terms of the disposition and shall provide such other
information regarding the disposition as the Company may reasonably require in
order to secure any deduction then available against the Company's or any other
corporation's taxable income. The Committee may impose such procedures as it
determines may be necessary to ensure that such notification is made (e.g., by
requiring that Shares be held in a brokerage or custodial account established
with a broker or other custodian selected by the Committee).

      (d) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee, director or
other person the right to be retained in the employ or service of the Company or
any U.S. Subsidiary, nor shall it interfere in any way with the right of the
Company or any U.S. Subsidiary to terminate any employee's employment or other
person's service at any time or with the right of the Board or stockholders to
remove any director.

      (e) CHANGES TO THE PLAN. The Board may amend, alter, suspend, discontinue
or terminate the Plan without the consent of stockholders or Participants,
except that any such action shall be subject to the approval of the Company's
stockholders at or before the next annual meeting of stockholders for which the
record date is after such Board action if (i) such stockholder approval is
required by any law or regulation or the rules of any stock exchange or
automated quotation system on which the Shares may then be listed or quoted,
(ii) such action will alter the basic structure of the Plan and results in a
material benefit to current or future Participants (other than alterations which
benefit the administration of the Plan, are required to conform to changes in
legislation, or are necessary to obtain or maintain favorable tax or regulatory
treatment for Participants), or (iii) the Board, in its discretion, otherwise
determines to submit other such changes to the Plan to stockholders for
approval; PROVIDED, HOWEVER, that, without the consent of an affected
Participant, no such action may materially impair the rights of such Participant
with respect to any Shares previously purchased by the Participant. Upon
termination of the Plan, any
                                       6
<PAGE>

amounts then credited to a Participant's Stock
Purchase Account shall be returned to the Participant.

      (f) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
Board nor any submission of the Plan or amendments thereto to the stockholders
of the Company for approval shall be construed as creating any limitations on
the power of the Board to adopt such other compensatory arrangements as it may
deem desirable, including, without limitation, the granting of stock options or
purchase rights otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.

      (g) GOVERNING LAW. The validity, construction and effect of the Plan, any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware, without giving effect to principles of
conflicts of laws, and applicable federal law.

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]