Document:

EX-10.1

 Exhibit 10.1 

 
  

 
 RULES OF THE

 REED ELSEVIER GROUP PLC 

EXECUTIVE SHARE OPTION SCHEME 2013 
  

 

 
 Adopted by
the directors of Reed Elsevier Group plc on 25 April 2013 
 Approved by the shareholders of Reed Elsevier PLC in general meeting
on 25 April 2013 
 Approved by the shareholders of Reed Elsevier NV in general meeting on 24 April 2013 

HM Revenue & Customs Approval to Schedule 1 – 9 May 2013 

HM Revenue & Customs Reference – X110734 
  

 
 Freshfields Bruckhaus Deringer LLP 

 THE REED ELSEVIER GROUP PLC 

EXECUTIVE SHARE OPTION SCHEME 2013 
 1.
DEFINITIONS 
 1.1 In these Rules and the schedules and appendices to these Rules (each a Schedule or
Appendix, as the case may be), unless the context otherwise requires, the following words and expressions have the following meanings: 

Adoption Date means 25 April 2013 being the date approval of the Scheme by shareholders of both Qualifying Companies is obtained; 

Board means the board of directors for the time being of the Company; 

Capital Reorganisation means any variation in the share capital or reserves of a Qualifying Company (including, without limitation, by way of
capitalisation, rights issue, consolidation, sub-division, or reduction); 
 Committee means the remuneration committee of the Board, or other
duly authorised committee of the Board; 
 Company means Reed Elsevier Group plc registered in England No. 2746616 by whatever name known
from time to time; 
 Constituent Company means the Company or any other company to which, for the time being, the Scheme is expressed to
extend; 
 Control has the meaning given to it by section 995 of the Income Tax Act 2007; 

Date of Grant means the date on which an Option is granted in accordance with the terms of Rule 4; 

Dealing Day means any day on which the London Stock Exchange and the Amsterdam Stock Exchange are open for the transaction of business; 

Dealing Restrictions means any restrictions on, or requirement for approvals for, dealing in Shares whether under the Company’s, RE
PLC’s or RE NV’s share dealing rules (as applicable), the provisions of the Model Code for Securities Transactions by Directors of Listed Companies, the provisions of the Listing Rules of the UK Listing Authority or the City Code on
Takeovers and Mergers or any of their equivalents in any applicable jurisdiction; 
 Dutch Share means an ordinary share in the capital of RE
NV or shares representing those shares following any Capital Reorganisation of RE NV and includes an American Depositary Share representing a Dutch Share; 

Employee means any employee (including an executive director) or a corporate officer of any Constituent Company; 

Employees’ Share Scheme has the meaning given by section 1166 of the Companies Act 2006 but for these purposes the Qualifying Companies
will be treated as holding companies of the Company; 

  
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 Financial Year means an accounting reference period as determined in accordance with section 391 of
the Companies Act 2006; 
 Group means the Company and every company which is under the Control of the Company and member of the
Group will be construed accordingly; 
 ITEPA means the Income Tax (Earnings and Pensions) Act 2003; 

Market Value means: 
  

	(a)	in relation to a UK Share, the middle-market quotation for a UK Share (as derived from the Daily Official List of the London Stock Exchange) on the Dealing Day immediately preceding the Date of Grant or, if the
Committee so determines, the average of the middle-market quotations for a UK Share (as derived from the Daily Official List of the London Stock Exchange) for the three Dealing Days ending on the Dealing Day immediately preceding the Date of Grant;
or 

  

	(b)	in relation to a Dutch Share, the closing price for a Dutch Share on the Amsterdam Stock Exchange on the Dealing Day immediately preceding the Date of Grant, or if the Committee so determines, the average of the closing
prices for a Dutch Share on the Amsterdam Stock Exchange for the three Dealing Days ending on the Dealing Day immediately preceding the Date of Grant; 

provided always that Market Value for a Dutch Share will be determined by reference to the same Dealing Days as are used to determine Market
Value for a UK Share; 
 Normal Vesting Date means the date on which an Option Vests in the ordinary course which: 

 

	(i)	in the case of Options not subject to Performance Conditions, will be the third anniversary of the Date of Grant; and 

  

	(ii)	in the case of Options subject to Performance Conditions, will be the latest of: 

  

	 	(a)	the third anniversary of the Date of Grant; and 

  

	 	(b)	the date the Committee determines that the Performance Conditions have been satisfied; 

 Option
means the right granted to a Participant on any particular Date of Grant to acquire Shares in accordance with the Rules of the Scheme; 
 Option
Price means the price per Share payable on the exercise of an Option as determined by the Committee which, subject to adjustment under Rule 16, is not less than the Market Value of a Share on the Date of Grant; 

Participant means any person who has been granted an Option which has not lapsed in accordance with the provisions of these Rules and includes,
where the context permits, the legal personal representatives of a deceased Participant; 

  
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 Performance Condition means the objective condition or conditions determined by the Committee in
accordance with Rule 5, measured after the end of the Performance Period or such other period as may be permitted under the Rules, which must be satisfied in order for an Option to Vest; 

Performance Period means the period after which the Performance Condition is measured which will be, unless the Committee determines otherwise
at the Date of Grant or as otherwise provided in the Rules, the period of three consecutive Financial Years of the Company starting with the Financial Year in which the Date of Grant falls; 

Pro-rated Number means such whole number of Shares (rounded down, as necessary) as is determined by multiplying the number of Shares comprised
in an Option by A/B where (i) for the purposes of Rule 8 (Cessation of Employment), A is the number of complete months from the start of the Financial Year in which the Option was granted to the Termination Date, but not exceeding
the number of complete months in the Performance Period and B is the number of complete months in the Performance Period and (ii) for the purposes of Rule 11 (Change of Control of a Qualifying Company), A is the number of complete
months from the start of the Financial Year in which the Option was granted to the relevant event, but not exceeding the number of complete months in the Performance Period and B is the number of complete months in the Performance Period. For
the purposes of this definition, the Performance Period will be the period determined by the Committee at the Date of Grant; 
 Qualifying
Company means each of RE PLC and RE NV; 
 RE NV means Reed Elsevier NV; 

RE PLC means Reed Elsevier PLC; 

Rules means these Scheme rules and any reference to a Rule will be construed accordingly; 

Scheme means this Reed Elsevier Group plc Executive Share Option Scheme 2013 as amended from time to time; 

Share means a UK Share and/or a Dutch Share as the context may require and Shareholder will be construed accordingly; 

Termination Date means the date on which a Participant ceases to be an Employee; 

UK Share means an ordinary share in the capital of RE PLC or shares representing those shares following any Capital Reorganisation of RE PLC and
includes an American Depositary Share representing a UK Share; 
 US Participant means a Participant who is subject to United States taxation
under United States law including by reason of being a United States national, or resident in the United States for United States tax purposes; 

Vest means, in respect of any Option, becoming capable of exercise and Vested and Vesting will be construed
accordingly; and 

  
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 Vesting Date means the Normal Vesting Date or such other date upon which an Option Vests in
accordance with the Rules. 
 1.2 Where the context permits, the singular will include the plural and vice versa and the masculine will include the
feminine. Headings will be ignored in construing the Scheme. 
 1.3 Any references to a statutory provision will include that provision as it may from time
to time be amended, modified or re-enacted. 
 2. ELIGIBILITY 

2.1 No person will be entitled as of right to participate in the Scheme. The Committee may select any Employee to participate in the Scheme, except any
Employee who is under notice of termination of employment at the Date of Grant, unless the Committee determines otherwise. 
 3.
INDIVIDUAL LIMIT 
 3.1 The Committee may not grant an Option to an Employee if the Option Price of that Option when
aggregated with the Option Price of any other Options granted to that Employee under the Scheme in the same Financial Year exceeds: 
  

	(a)	in the case of an Employee who is the Chief Executive Officer of the Company, 250% of his basic salary from the Group as at the Date of Grant; and 

 

	(b)	in the case of any other Employee, 200% of his basic salary from the Group as at the Date of Grant. 

 4.
GRANT OF OPTIONS 
 4.1 Subject to any Dealing Restrictions, the Committee may, during any period specified
in Rule 4.3 below, grant Options at the Option Price to any Employees selected by the Committee. 
 4.2 Options will be granted by deed. Each
Participant will receive information (electronically or in hard copy) following the Date of Grant summarising the main terms of the Option. This summary may include the following information: 

 

	(a)	the number and type of Shares subject to the Option; 

  

	(b)	details of the Performance Condition (if any) applicable to the Option; 

  

	(c)	the Performance Period (if applicable); 

  

	(d)	the terms of any other conditions imposed pursuant to Rule 5; 

  

	(e)	which (if any) Schedules to the Scheme will apply to the Option; 

  

	(f)	any other information as the Committee may determine. 

  
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 4.3 Options may only be granted within the period of 42 days commencing on any of the following: 

 

	(a)	the Adoption Date; 

  

	(b)	the release of the Qualifying Companies’ interim (half-yearly) and/or final results in any year; 

  

	(c)	the release by the Qualifying Companies of any trading update or (if applicable to the Qualifying Companies at the time) their quarterly results for any year; 

 

	(d)	the day on which the Committee resolves that circumstances exist which justify the grant of Options outside the periods referred to in (a) to (c) above; or 

 

	(e)	the day following the lifting of any Dealing Restrictions which prevented the grant of the Option during the periods referred to in (a) to (d) above. 

5. PERFORMANCE AND OTHER CONDITIONS 

5.1 Any Option granted to an executive director of the Company or a Qualifying Company will be subject to Performance Conditions which, unless otherwise
permitted in the Rules, must be satisfied before the Vesting of the Option. Options granted in 2013 under the Scheme to executive directors will be subject to the Performance Condition as set out in the Appendix. Options granted in 2014 and
subsequent years to executive directors will be subject to a Performance Condition as determined by the Committee at the relevant Date of Grant. 
 5.2 The
Committee may grant Options which are subject to Performance Conditions to Participants who are not executive directors of the Company or a Qualifying Company. 

5.3 The Committee may make the grant or Vesting of Options subject to any other conditions it determines appropriate including, but not limited to, requiring
a Participant to agree to comply with certain post-employment restrictive covenants, to meet shareholding requirements or to agree to post-exercise sale restrictions. 

5.4 The Committee may make such adjustments to the Performance Condition applicable to outstanding Options as it considers appropriate to take account of any
factors which are relevant in the opinion of the Committee and in particular if there is an event which causes it to consider that the Performance Condition, or any part of it, is no longer a fair measure of performance. The amended Performance
Condition will not be materially less or more challenging than the one originally set. 
 5.5 Where an Option is granted subject to Performance Conditions,
in determining the level of Vesting of an Option under the Scheme, the Committee will take into account the overall business performance of the Qualifying Companies and the Group over the Performance Period and any other factors that it considers
appropriate and may modify the Vesting level if it considers that such a modification would result in a fairer outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying
business performance. 
 5.6 Without prejudice to Rule 5.4 and Rule 5.5, there will be no retesting of any Performance Condition. 

  
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 6. NORMAL VESTING OF OPTIONS 

6.1 Except as otherwise permitted in the Rules, the number of Shares, if any, in respect of which an Option will Vest on the Normal Vesting Date will be
determined by the Committee by reference to the extent to which (i) any Performance Condition has been satisfied and (ii) any other conditions to which the Option is subject have been satisfied or waived in accordance with these Rules.

 7. EXERCISE OF OPTIONS 

7.1 Except as otherwise permitted in these Rules, a Participant may only exercise an Option if: 

 

	(a)	the Vesting Date has passed; and 

  

	(b)	the Option has not lapsed pursuant to Rule 9. 

 7.2 Subject to any Dealing Restrictions, a Participant may
exercise his Option in whole or in part by giving notice in the manner prescribed by the Company following the Vesting Date. The Participant will specify in the notice of exercise the number of Shares in respect of which the Option is being
exercised and will provide any required documentation and payment of the Option Price (or appropriate undertaking to pay the Option Price) in respect of the Shares over which the Option is being exercised. A notice of exercise will take effect on
the date it is validly received by the Company or if there are Dealing Restrictions in place on that date, such later date when all Dealing Restrictions have lifted. 

7.3 The Company will, within 30 days of receipt of the notice of exercise and payment of (or undertaking to provide) the aggregate Option Price: 

 

	(a)	procure the transfer or issue of the required number of Shares to the Participant; and 

  

	(b)	procure that the Participant has evidence of title in respect of such Shares. 

 8. CESSATION
OF EMPLOYMENT 
 Participant gives or receives notice 

8.1 Except as otherwise provided in these Rules, in the event that a Participant gives or receives notice of termination of employment for any reason other
than those set out in Rule 8.2 (Approved Leaver), an Option (whether Vested or not) will automatically lapse on the date on which notice is given or received. 

Approved Leaver 
 8.2 Except as otherwise provided
in these Rules, if a Participant ceases to be an Employee before the Normal Vesting Date by reason of: 
  

	(a)	injury, disability or ill-health; 

  

	(b)	redundancy (as defined in section 139 of the Employment Rights Act 1996); 

  

	(c)	retirement with the consent of the Company; 

  
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	(d)	death; 

  

	(e)	the sale of the company or business in which the Participant is employed out of the Group; or 

  

	(f)	any other reason which the Committee, in its absolute discretion, determines: 

 Rule 8.3 will apply to his
Options which are not subject to a Performance Condition and Rule 8.4 will apply to the Participant’s Options which are subject to a Performance Condition. 

8.3 Where this Rule applies, a Participant’s Option will vest on the Termination Date over a Pro-rated Number of Shares and will lapse as to the balance
on the Termination Date. 
 8.4 Where this Rule applies, a Participant’s Option will continue in force over a Pro-rated Number of Shares and will lapse
as to the balance on the Termination Date. The Option over the pro-rated Number of Shares will Vest on the Normal Vesting Date to the extent any Performance Condition is satisfied and will lapse as to the balance on the Normal Vesting Date. 

8.5 The Committee has discretion to vary the application of Rule 8.4 and determine that an Option will instead Vest as at the Termination Date over a
Pro-rated Number of Shares to the extent any Performance Condition is satisfied. The Performance Condition will be assessed based on progress made against targets at the Termination Date as determined by the Committee in its absolute discretion.
Such determination will take place as soon as reasonably practicable after the Termination Date and to the extent that an Option does not Vest as at the Termination Date, it will immediately lapse. 

8.6 If Rule 8.2 applies, the Committee also has discretion, if it considers it appropriate in the particular circumstances, to determine that an Award will
Vest on some other basis. 
 Exercise Period – Approved Leaver 

8.7 A Participant (or in the case of a Participant’s death his personal representatives) may exercise any Option which Vests pursuant to this Rule 8
(and any other Vested Options held by him at the Termination Date to the extent not previously exercised) at any time in the period of two years following the later of the Vesting Date and the Termination Date or, if the Committee (acting fairly and
reasonably) in its absolute discretion determines any longer period of up to 42 months from the later of the Vesting Date and the Termination Date (but not beyond the tenth anniversary of the Date of Grant). Any Option will lapse automatically
at the expiry of the specified period to the extent it has not been exercised. 
 Intra-Group Transfer of Employment 

8.8 For the avoidance of doubt, a Participant will not cease to be an Employee for the purposes of this Rule 8 if he ceases to be employed by a
Constituent Company but continues to be or is immediately afterwards employed by another Constituent Company. 

  
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 9. LAPSE OF OPTIONS 

9.1 An Option will lapse automatically to the extent that it has not been exercised by the earliest of: 

 

	(a)	the date on which the Committee determines that any conditions applicable to an Option imposed under Rule 5 have not been met; 

  

	(b)	where Rule 8.1 (Participant gives or receives notice) applies, the date the Participant gives or receives notice of the termination of his employment; 

 

	(c)	where Rule 8.2 (Approved Leaver) applies, the expiry of the period determined in accordance with Rule 8.7; 

  

	(d)	the date on which the Committee makes a determination under Rule 10.1 (Breach of Restrictive Covenants) and, to the extent applicable, under Rule 10.3(b) (Claw Back Arrangements); 

 

	(e)	the expiry of the periods referred to in Rule 11 (Change of Control of a Qualifying Company), Rule 12 (Change of Control of the Company), or the period in Rule 15 (Voluntary Winding Up); 

 

	(f)	the date on which an Option is transferred, assigned, charged or otherwise disposed of otherwise than as permitted in Rule 20.13; and 

 

	(g)	the tenth anniversary of the Date of Grant or, if the Participant dies during the twelve month period before the tenth anniversary of the Date of Grant, the expiry of twelve months from the date of his death.

 9.2 In the case of Rule 9.1(c), Rule 9.1(e) and Rule 9.1(g) above, where any exercise of an Option would be prohibited by any Dealing
Restrictions, the period during which the Participant may exercise such Option and the date on which the Option lapses will be extended by the period of the prohibition provided always that an Option may not be exercised after the expiry of the
tenth anniversary of the Date of Grant save as expressly provided in Rule 9.1(g). 
 10. CLAW-BACK
ARRANGEMENTS 
 Breach of Restrictive Covenants 

10.1 If a Participant breaches any term of his post-termination restrictive covenants (such breach to be determined by the Committee acting fairly and
reasonably), any unexercised Options (whether Vested or not) held by him will lapse on the date of the Committee’s determination as to the breach and the Committee may require him to pay to the Company or any other member of the Group, within
seven days after a written demand from the Company, the Relevant Amount (as defined in Rule 10.2 below). 
 10.2 The Relevant Amount is
an amount equal to A minus both B and C where: 
 A is an amount equal to the pre-tax
gain realised by the Participant on the exercise of any Options in the period beginning six months before the Termination Date and ending on such date as the Participant’s post-termination restrictive covenants are stated to expire. For these
purposes, 

  
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the gain will be the market value of the Shares acquired by the Participant on the exercise of the Option (as determined by the Committee) net of the aggregate Option Price paid to acquire such
Shares, and such gain will be determined irrespective of whether the Participant has sold or retained the Shares so acquired; 

B is an amount equal to the tax and social security charges and liabilities incurred by the Participant in respect of A which the
Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax authority notwithstanding his obligation to make a payment pursuant to Rule 10.1; and 

C is the amount of any Claw-back Amount (as defined in Rule 10.4) paid by the Participant. 

Grant or Vesting Determined on the Basis of Materially Mis-stated Data 

10.3 If the Committee, at any time up to two years after the Date of Grant, considers in good faith that the number of Shares under an Option was determined on
the basis of materially mis-stated financial or other data or, in respect of Options subject to Performance Conditions, at any time up to two years after the Vesting Date considers in good faith that those Performance Conditions were assessed on the
basis of materially mis-stated financial or other data (in each case, the Incorrect Option), it will, unless determined otherwise at the sole discretion of the Committee, recover the Claw-back Amount (as defined in Rule 10.4 below) by
taking one or more of the following actions: 
  

	(a)	take the Claw-back Amount (or the balance thereof) into account when determining the quantum of any future grants of Options; and/or 

 

	(b)	scale back any outstanding unexercised Options (whether Vested or not) to take account of the Claw-back Amount (or the balance thereof); and/or 

 

	(c)	require the Participant to pay to the Company (or any member of the Group), within thirty days of a written demand from the Company, the Claw-back Amount (or the balance thereof). 

10.4 The Claw-back Amount is the difference in value between (i) the Incorrect Option and (ii) the Option that could or would have
Vested (if at all) had the correct data been used, as determined by the Committee acting fairly and reasonably. This may be expressed as a number of Shares or a monetary amount or a combination thereof as the Committee considers appropriate. In
determining the Claw-back Amount, the Committee may take into account such matters as it sees fit including, but not limited to: 
  

	(a)	the difference between the number of Shares under the Incorrect Option and the number of Shares over which the Committee considers the Option should have been granted or Vested had the correct data been used;

  

	(b)	any gain made by the Participant on the sale of Shares acquired with the Incorrect Option; 

  

	(c)	any tax and / or dealing costs incurred by the Participant in connection with the Incorrect Option which the Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax
authority notwithstanding his obligation to make a payment pursuant to Rule 10.3, and 

  
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	(d)	the extent and timing of any payment made by the Participant pursuant to Rule 10.1. 

 10.5 By accepting an
Option, a Participant will be bound by this Rule 10 notwithstanding (i) that it may only be applicable after the transfer of Shares pursuant to the exercise of an Option under these Rules and (ii) whether or not all or any of the
terms of this Rule 10 have been separately notified to each Participant. 
 11. CHANGE OF CONTROL
OF A QUALIFYING COMPANY 
 11.1 Except as otherwise provided in these Rules, if any person:

  

	(a)	obtains Control of a Qualifying 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 that Qualifying Company; 

  

	(b)	becomes bound or entitled to acquire Shares under sections 979 and 983 of the Companies Act 2006 (or in relation to RE NV becomes bound or entitled to acquire compulsorily Shares held by minority shareholders); or

  

	(c)	obtains Control of a Qualifying Company in pursuance of a compromise or arrangement sanctioned by the Court under section 899 of the Companies Act 2006 (or in relation to RE NV under any equivalent legislative provision
in the Netherlands), 

 then any Options over Shares in that Qualifying Company (but not those in the other Qualifying Company) will subject
to satisfaction of any Performance Condition Vest in respect of the Pro-rated Number and may be exercised for the period of 30 days following the relevant event (or such longer period as the Committee may in its absolute discretion determine
including, if the Committee determines it appropriate, a period starting shortly before the relevant event). The Performance Condition will be assessed based on progress made against targets as at the date of the relevant event as determined by the
Committee in its absolute discretion. 
 11.2 Any Option over Shares in the Qualifying Company to which Rule 11 applies which does not Vest as a result of
the relevant event will lapse on the relevant event. For the avoidance of doubt, any Option over Shares in the other Qualifying Company will continue in force subject to the Rules. 

12. CHANGE OF CONTROL OF THE COMPANY 

Except as otherwise provided in these Rules, the provisions of Rule 11 (Change of Control of a Qualifying Company) will apply with any necessary changes in the
event that any person (either alone or together with any person acting in concert with him) obtains Control of the Company and the Shares under Option which may Vest as a result of the relevant event will be Shares in both Qualifying Companies. 

  
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 13. INTERNAL REORGANISATION 

13.1 Rule 11 and Rule 12 will not apply if the purpose and effect of the change of Control or scheme of arrangement is: 

 

	(a)	to create a new holding company for the relevant Qualifying Company, such company having substantially the same Shareholders and proportionate shareholdings as those of the Qualifying Company immediately before the
scheme of arrangement; 

  

	(b)	to give one Qualifying Company Control (directly or indirectly) of the other Qualifying Company; 

  

	(c)	the person obtaining Control of the Company is one of the Qualifying Companies or a company under the Control of one or both of them; or 

 

	(d)	the Company remains under the ultimate Control of the Shareholders of the Qualifying Companies immediately before the relevant transaction affecting the Company. 

 

	13.2	If Rule 13.1 applies: 

  

	(a)	Options will not Vest as a result of the relevant event; 

  

	(b)	an Option will instead be exchanged for an equivalent option over such shares as the Committee determines appropriate; and 

  

	(c)	the Committee may make any modifications to the Performance Condition as it determines appropriate. 

 13.3 The
Committee may vary the application of this Rule 13 so that it applies to Options over Shares in both Qualifying Companies or over Shares in only one Qualifying Company. 

13.4 Where this Rule 13 applies, a Participant will not be treated as ceasing to be an Employee until he ceases to be employed by a company which is either
the relevant holding company or a subsidiary of the holding company (within the meaning of section 1159 of the Companies Act 2006). 
 14.
ROLLOVER ON A CHANGE OF CONTROL 
 14.1 The Committee may
determine that Rule 11 or Rule 12 will not apply on a change of Control of a Qualifying Company or the Company (as applicable) and may, with the consent of the person obtaining Control, (i) determine that the Options will be rolled over in
accordance with either the provisions of Rule 13.2 or Rule 14.2 or (ii) allow the Participants to choose between the Vesting of Options (if at all) under Rule 11 or Rule 12 as applicable and rollover in accordance with, as determined by the
Committee, Rule 13.2 or Rule 14.2. 

  
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 14.2 The Committee can determine that Options are rolled over in accordance with the following terms: 

 

	(a)	the Performance Condition will be assessed based on progress made against targets as at the date of the relevant event as determined by the Committee in its absolute discretion; 

 

	(b)	to the extent that the Performance Condition has been met, an Option will be exchanged for an equivalent option over such shares as agreed between the Committee and the person obtaining Control, and will Vest on the
original Vesting Date subject only to the Participant remaining in employment within the acquirer group of companies (unless Rule 8.2 applies) and will be subject to the Rules as they last had effect in relation to the Option that was rolled-over;

  

	(c)	to the extent that the Performance Condition has not been met, the Option will immediately lapse. 

 14.3 For
the avoidance of doubt, in Rule 11, Rule 12, Rule 13 and Rule 14, “Committee” means the Committee as constituted immediately before the event by virtue of which the applicable Rule applies. 

15. VOLUNTARY WINDING UP 

The provisions of Rule 11 will apply with such changes as may be necessary in the event that notice is duly given of a resolution for a voluntary winding up of
a Qualifying Company PROVIDED THAT, all references in that Rule to the date of the relevant event will be treated as references to the date on which notice is given for the voluntary winding-up of
a Qualifying Company. 
 16. ADJUSTMENT OF OPTIONS 

16.1 In the event of: 
  

	(a)	any Capital Reorganisation; or 

  

	(b)	the implementation by a Qualifying Company of a demerger or the payment by a Qualifying Company of a super-dividend which would otherwise materially affect the value of an Option, 

the Option Price, the definition of Shares and the number of Shares comprised in an Option may be adjusted in such manner as the Committee may determine,
provided that no adjustment will be made pursuant to this Rule which would increase the aggregate Option Price of any Option. 
 17.
SOURCE OF SHARES 
 17.1 An Option may be satisfied by the issue or transfer of Shares. 

17.2 No Option will be granted under the Scheme to the extent that the result of that grant would be that the aggregate number of UK Shares that could be
issued on the exercise of that Option and any other Option granted at the same time, when added to the number of UK Shares that: 
  

	(a)	could be issued on the exercise of any subsisting Options or vesting or exercise of any subsisting awards or options granted during the preceding ten years under the Scheme or any other Employees’ Share Scheme
established by RE PLC or the Company; and 

  
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	(b)	have been issued on the exercise of any Options or vesting or exercise of any subsisting awards or options granted during the preceding ten years under the Scheme or any other Employees’ Share Scheme established by
RE PLC or the Company, 

 would exceed 10 per cent. of the ordinary share capital of RE PLC for the time being in issue. 

17.3 No Option may be granted under the Scheme to the extent that the result of that grant would be that the aggregate number of UK Shares that could be
issued on the exercise of that Option and any other Option granted at the same time, when added to the number of UK Shares that: 
  

	(a)	could be issued on the exercise of any subsisting Options or vesting or exercise of any subsisting awards or options granted during the preceding ten years under the Scheme, or any other discretionary share scheme
established by RE PLC or the Company; and 

  

	(b)	have been issued on the exercise of any Options or vesting or exercise of any subsisting awards or options granted during the preceding ten years under the Scheme or any other discretionary share scheme established by
RE PLC or the Company, 

 would exceed 5 per cent. of the ordinary share capital of RE PLC for the time being in issue. 

17.4 Reference in this Rule 17 to the issue of Shares means, for the avoidance of doubt, the issue and allotment (but not transfer) of Shares. The delivery of
Shares from treasury also counts towards the percentage limits set out in Rules 17.2 and 17.3 above for so long as institutional shareholder guidelines recommend this. 

17.5 In determining the above limits no account will be taken of any Shares attributable to an Option which was released, lapsed or otherwise became incapable
of exercise. 
 17.6 The number of Dutch Shares which may be issued pursuant to Options granted under the Scheme from time to time will be agreed between
the Committee and RE NV before such Options are granted PROVIDED THAT the percentage referred to in Rules 17.2 and 17.3 above in relation to RE PLC will apply in relation to RE NV. 

18. RIGHTS ATTACHING TO SHARES 

18.1 All Shares transferred or issued upon the exercise of an Option will rank pari passu in all respects with the Shares in issue at the date of exercise
except in respect of any rights attaching to such Shares by reference to a record date before the date of exercise. 
 18.2 Any Shares acquired by a
Participant under this Scheme will be subject to the articles of association of the relevant Qualifying Company from time to time. 

  
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 19. ADMINISTRATION AND AMENDMENT 

19.1 The decision of the Committee will be final and binding in all matters relating to the Scheme including the exercise of any discretion under these Rules,
the interpretation of the Rules and any dispute relating to any matter in connection with the Rules. 
 19.2 The Committee may at any time discontinue the
grant of further Options or amend any of the provisions of the Scheme in any way it thinks fit provided that: 
  

	(a)	the Committee will not make any amendment that would materially prejudice the interests of existing Participants except with the prior consent of the Participants; 

 

	(b)	no amendment which in the reasonable opinion of the Committee is to the advantage of Employees or Participants may be made to: 

  

	 	(i)	the definition of Employee; 

  

	 	(ii)	the maximum entitlement of an Employee under the Scheme; 

  

	 	(iii)	the maximum limit on the number of Shares which can be awarded under the Scheme; 

  

	 	(iv)	the basis for determining an Employee’s entitlement to Shares under the Scheme and the terms on which Shares can be acquired; 

  

	 	(v)	the adjustment provisions of Rule 16; 

  

	 	(vi)	the amendment provisions of this Rule 19; 

 without the prior approval of RE PLC (and if
appropriate RE NV) in general meeting except (a) in the case of minor amendments to benefit the administration of the Scheme, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory
treatment for Employees and/or Participants or any Qualifying Company or member of the Group or (b) as otherwise permitted under these Rules; and 
  

	(c)	without prejudice to any provision of the Scheme which provides for the lapse of an Option, the Committee may not cancel an Option unless the Participant agrees to such cancellation. 

19.3 Notwithstanding any other provision of the Scheme, the Committee may make appropriate amendments to the Scheme and/or establish schedules to the Scheme
for the purpose of granting Options to Employees, based on the Scheme but modified to take account of such factors as the Committee determines appropriate including, but not limited to, local tax, exchange control or securities laws in any
territory. 

  
 Page 14 

 20. GENERAL 

Trustee Funding 
 20.1 Any member of the Group may
provide money to the trustee or trustees of any trust or any other person or persons to enable any such person or persons to acquire or subscribe for Shares to be held for the purposes of satisfying Options or enter into any guarantee or indemnity
for those purposes, to the extent permitted by the Companies Act 2006. 
 Discretionary Nature of the Scheme 

20.2 Subject to Rule 20.5, the rights and obligations of a Participant under the terms and conditions of his office or employment will not be affected by his
participation in the Scheme or any right he may have to participate in the Scheme. 
 20.3 Participation in the Scheme does not imply any right to receive
Options on the same or any other basis in any other year. 
 20.4 The terms of the Scheme do not entitle the Participant to the exercise of any discretion in
his favour. 
 20.5 Each Participant waives all and any rights to compensation or damages in consequence of the termination of his office or employment with
any member of the Group or Qualifying Company for any reason whatsoever (whether such cessation is lawful or unlawful) insofar as those rights arise, or may arise, from his ceasing to have rights or be entitled to Shares under the Scheme as a result
of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s terms of employment will be varied accordingly. 

Changes to a Qualifying Company’s capital structure 

20.6 The existence of any Option will not affect in any way the right or power of the Company, the Qualifying Companies or their Shareholders to make or
authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s or either of the Qualifying Company’s capital structure, or any merger or consolidation of the Company or Qualifying Companies, or any
issue of shares, bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company or Qualifying Companies or any sale or
transfer of all or any part of their assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

Notices 
 20.7 Any notice or other document which has to
be given to a Participant under or in connection with the Scheme may be (i) delivered or sent by post to him at his home address according to the records of his employing company, (ii) sent by email or fax to any email address or fax
number according to the records of his employing company or, in either case, such other address as may appear to the Company to be appropriate, or (iii) provided electronically through a website hosted by the Company or an agent of the Company,
provided that the Participant is notified by email, fax or post that such notice or document has been or will be provided in this manner. 

  
 Page 15 

 20.8 Notices sent by post to a Participant in the UK or US will be deemed to have been given two days after the
date of posting. However, notices sent to a Participant in other countries will be deemed to have been given on the seventh day after the date of posting. 

20.9 Notices sent by email or fax, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending. 

20.10 Notices provided through a website will be deemed to have been received on the day they are posted on the website or, if later, the day the Participant
is deemed in accordance with Rule 20.8 or Rule 20.9 to have received the notification that it has been provided there. 
 20.11 Any notice or other document
required to be given to the Company under or in connection with the Scheme may be delivered or sent by post to it at its registered office (or such other place or places as the Committee may from time to time determine and notify to Participants) or
sent by email or fax to any email address or fax number notified to the sender. 
 20.12 All Share certificates, Option certificates and other
communications relating to the Scheme will be sent at the Participant’s risk. 
 No transfer of Options 

20.13 A Participant may not transfer, assign, charge or otherwise dispose of Options, or any rights in respect of them, except (i) on the transmission of
Options on the death of a Participant to his personal representatives or (ii) with the consent of the Committee. Any such attempted non-approved transfer will result in the lapse of the Option. 

Options Non-Pensionable 
 20.14 Options under the
Scheme are not pensionable. 
 Taxation 
 20.15
Any liability of a Participant to taxation in respect of an Option will be for the account of the relevant Participant. By accepting an Option, a Participant agrees to comply with any arrangements specified by the Company for the reporting and
payment of tax, duty and social security contributions in any jurisdiction in respect of any Option and any Shares to which he is or may become entitled under the Scheme including, without limitation, (i) arranging the sale of sufficient Shares
on the Participant’s behalf to enable the Company or any member of the Group to satisfy its obligations in respect of deduction or withholding of tax, duty or social security contributions at source and (ii) entering into any election
specified by the Company under Chapter 2 of Part 7 of the Income Tax (Employment & Pensions) Act 2003. 
 Stamp Duty 

20.16 The Company or, where the Committee so directs, any member of the Group will pay the appropriate stamp duty on behalf of Participants in respect of any
transfer or issue of Shares on the exercise of an Option under the Scheme. 

  
 Page 16 

 Expiry of Scheme 

20.17 No Options will be granted under the Scheme after the tenth anniversary of the Adoption Date. 

Data Protection 
 20.18 By accepting the grant of
an Option, a Participant consents to the holding and processing of personal data provided by him to the Company, a Qualifying Company or any member of the Group, and any other persons for all purposes related to the operation of the Scheme and
acknowledges that the personal information may be transferred to, and stored at, a destination outside the European Economic Area (EEA), and may also be processed by staff operating outside the EEA who work for the Company, a
Qualifying Company or any member of the Group or for one of their service providers. The Company will take all steps reasonably practicable to ensure that a Participant’s personal data is treated securely under appropriate contractual
arrangements. 
 Governing Law 
 20.19 This
Scheme will be governed by, and construed in accordance with, the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction in relation to any dispute arising in connection with the Scheme. 

  
 Page 17 

 APPENDIX 

PERFORMANCE CONDITION 
 General 

1. The following provisions apply to Options granted to executive directors of the Company or a Qualifying Company under the Scheme in 2013. 

2. Except as otherwise provided for in the Rules, the Performance Condition applicable to an Option will be measured after the end of the Performance Period
for such Option. 
 3. The Performance Period is the period of three consecutive Financial Years of the Company starting with the Financial Year in which
the Date of Grant falls. 
 4. Options will Vest (if at all) over a whole number of Shares (rounded down, as necessary). To the extent that the Performance
Condition is not satisfied and as a result an Option does not Vest, the Option will lapse. 
 The EPS Measure 

5.1 The Vesting of Options relates to the average growth in Adjusted Earnings per Share per annum at constant currencies of the Qualifying Companies measured
over the Performance Period. 
  

	5.2	The following definitions apply in respect of Adjusted EPS: 

  

	 	(i)	Adjusted EPS Growth = the arithmetic mean of the growth in Adjusted EPS at constant currencies achieved by the Qualifying Companies over a relevant financial year; 

 

	 	(ii)	Average Adjusted EPS Growth = the average of the annual Adjusted EPS Growth over the relevant period of measurement; 

  

	 	(iii)	Adjusted Earnings = adjusted reported earnings measured at constant currencies. Adjustments include amortisation and impairment of acquired intangible assets and goodwill, exceptional restructuring and
acquisition integration charges, gains/losses on business disposals and other non-operating items, and tax rate anomalies (principally deferred tax); 

  

	 	(iv)	Adjusted Earnings Per Share = Adjusted Earnings divided by the Number of Shares; 

  

	 	(v)	Number of Shares = weighted average number of shares in issue excluding shares held in treasury or by the Reed Elsevier Group plc Employee Benefit Trust; and 

 

	 	(vi)	Constant currencies = refers to measurement at constant rates of exchange using the prior full year average and hedge rates. 

  
 Page 18 

	5.3	The number of Shares under Option which are capable of Vesting will be determined as follows: 

  

					
	 Average Adjusted EPS Growth over

the three-year Performance Period
	  	Vesting level as a percentage of
option granted	 
	 Below 4%
	  	 	0	% 
	 4%
	  	 	33	% 
	 6%
	  	 	80	% 
	 Equal or greater than 8%
	  	 	100	% 

  

	5.4	Vesting is on a straight-line basis for performance between the stated Average Adjusted EPS Growth percentages. 

Determining satisfaction of targets at end of Performance Period 

6.1 Following the end of the Performance Period (or as otherwise required under the Rules) the Committee will calculate and confirm with the auditors the
Average Adjusted EPS Growth over the relevant period of measurement. 
 Adjustments 

7. Subject to the Rules, the Committee may make such adjustments to the Performance Conditions applicable to outstanding Options as it considers appropriate to
take account of any factors which are relevant in the opinion of the Committee and in particular if there is an event which causes it to consider that the Performance Condition, or any part of it, is no longer a fair measure of performance. The
amended Performance Condition will not be materially less or more challenging than the one originally set. 
 8. The Committee has discretion to adjust the
definition or method of calculation of Adjusted EPS (or any other applicable term or measure) as set out in this Appendix to take account of any changes in recognised accounting standards or practice, fiscal regime or capital structure, to ensure
consistent measurement and accountability. 
 9. Without prejudice to the generality of paragraphs 7, 8 and 10, the Committee may, in consultation with the
auditors, make the following adjustments in relation to the calculations to be carried out in accordance with this Appendix: 
  

	(a)	any adjustments it considers appropriate if an event occurs giving rise to an adjustment of Awards under Rule 16 of the Scheme; and 

  

	(b)	any adjustments it considers appropriate if there is any modification in relation to the relevant international accounting standard used to calculate EPS. 

Overriding Power 
 10. In determining the level of Vesting
of an Option under the Scheme, the Committee will take into account the overall business performance of the Qualifying Companies and the Group over the relevant performance period and any other factors that it considers appropriate and may modify
the Vesting level if it considers that such a modification would result in a fairer outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying business performance. 

  
 Page 19 

 SCHEDULE 1 

HMRC APPROVED PART OF THE SCHEME - REFERENCE – X110734 

If the Committee wishes to grant Options to Employees under an HM Revenue & Customs (HMRC) approved scheme, it may grant Options
pursuant to this Schedule and the following provisions relating to Options will apply: 
  

	(A)	The Rules of the Scheme will apply to the grant of Options under this Schedule subject to the modifications contained in the following paragraphs. 

 

	(B)	The definition of Capital Reorganisation will be amended so that the words “or reserves” are deleted. 

  

	(C)	In the definition of Constituent Company, the words “under the Control of the Company” will be inserted after the words “or any other company”. 

 

	(D)	The definition of Employee will be amended as follows: 

  

	 	(i)	the words “or a corporate officer” will be deleted; 

  

	 	(ii)	the words “who is required to devote substantially the whole of his working time to the affairs of the Group” will be inserted after the words “Constituent Company”; and 

 

	 	(iii)	the definition will be construed so that no Option may be granted under this Schedule 1 to an Employee who is ineligible to participate in the Scheme by virtue of paragraph 8 or paragraph 9 of Schedule 4 to ITEPA.

  

	(E)	The definition of Market Value will be amended to insert a new sub-paragraph (c) as follows: 

  

	 	“(c)	subject to (a) and (b) above, the market value of a share on the Date of Grant as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 (UK) and as agreed in advance with HMRC
Shares and Assets Valuation;” 

  

	(F)	The definition of Shares (and of UK Shares and Dutch Shares) (including, for the avoidance of doubt, any shares representing those shares following any Capital Reorganisation)
will be subject to the condition that any such shares satisfy paragraphs 16 to 20 of Schedule 4 to ITEPA. 

  

	(G)	All references in the Rules to the “absolute discretion” of the Committee will be construed as references to the “discretion of the Committee (acting fairly and reasonably)”. 

 

	(H)	A new Rule 3.2 will be inserted as follows: 

 “Individual Limit 

3.2 No Employee may be granted an Option which would, at the proposed Date of Grant, cause the aggregate Market Value of the shares which he
may 

  
 Page 20 

 
acquire pursuant to subsisting Options granted to him under this Schedule and under any Associated Schemes (such values to be determined at the respective Date of Grant of the relevant options),
to exceed £30,000 (or such other amount as may be specified under paragraph 6(1) of Schedule 4 of ITEPA from time to time).” 

For the purposes of this paragraph (H): 

Associated Scheme means any Employees’ Share Scheme (other than the Scheme) approved under Schedule 4 to ITEPA and
established by the Company or an associated company of the Company within the meaning of paragraph 35 of Schedule 4 to ITEPA; and 
  

	(I)	In Rule 4.3 a new sub-rule (e) will be inserted as follows: 

 “(e) any day on which
Schedule 1 to the Scheme is approved by HMRC or any change to the legislation affecting share option schemes approved by HMRC under ITEPA is proposed or made” 

and existing sub-rule (e) shall become sub-rule (f) and the words “the period in (a) to (d) above.” will be
deleted and replaced with the words “the period in (a) to (e) above.” 
  

	(J)	Rule 5.3 will be amended so that the words “grant or” are deleted. 

  

	(K)	Rule 5.4 will be deleted and replaced with the following: 

 “Any Performance Conditions
attached to Options may be amended after the Date of Grant if: 
  

	 	(a)	events occur and as a result the Committee (acting fairly and reasonably) objectively concludes that those circumstances which prevailed at the Date of Grant and which were relevant to the conditions that were
originally imposed regarding the exercise of the Option have subsequently changed; and 

  

	 	(b)	any such amended conditions would be a fairer measure of performance and the Committee reasonably considers that such amended conditions are: 

 

	 	(i)	equally demanding; and 

  

	 	(ii)	no more difficult to satisfy than the original conditions.” 

  

	(L)	Rule 7.1 (Exercise of Options) will be amended to insert a new Rule 7.1(c) as follows “the Participant is not ineligible to participate in the Scheme by virtue of paragraph 9 of Schedule 4 to ITEPA.”

  

	(M)	In Rule 8.2(c), the words “with the consent of the Company” will be deleted and replaced by the words “at or after the Specified Age” for the purposes of an Option granted under this Schedule.
For the purposes of this paragraph (M), Specified Age means retirement in circumstances where the Participant is at least age 55 (being the “specified age” for the purposes of paragraph 35A of Schedule 4 of ITEPA).

  
 Page 21 

	(N)	Where Rule 8.2 (Approved Leaver) applies by reason of the Participant’s death, Rule 8.7 will be amended so that the words “at any time in the period of two years following the later of the Vesting Date
and the Termination Date or...up to 42 months from the later of the Vesting Date and the Termination Date (but not beyond the tenth anniversary of the Date of Grant)” will be deleted and replaced with: 

“at any time in the period of 12 months following the Vesting Date”. 

 

	(O)	Rule 8.6 will be deleted. 

  

	(P)	A new Rule 9.1(h) will be inserted after Rule 9.1(g) as follows: 

 “if
applicable, the expiry of the appropriate period referred to in Rule 13.2 if the Participant has not elected to exchange his Option in accordance with that Rule”. 
  

	(Q)	Rule 10 (Claw-back Arrangements) will not apply to any Option granted under this Schedule. 

  

	(R)	For the purposes of Rule 13 and 14, Rule 11 will be amended so that: 

  

	 	(a)	Rule 11.1(a) will be deleted and replaced with the following: 

 “obtains Control of a
Qualifying Company as a result of (i) making a general offer to acquire the whole of the issued ordinary share capital of the Qualifying Company 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 that Qualifying Company, or (ii) making a general offer to acquire all the shares in the Qualifying Company which are of the same class as those subject to the Options;” 

 

	 	(b)	in Rule 11.1(b) the words “sections 979 and 983” will be deleted and replaced with “sections 979 to 982” and the words “or in relation to RE NV becomes bound or entitled to acquire Compulsory
Shares held by minority shareholders” will be deleted and replaced with the following words “or in relation to RE NV under any equivalent legislative provision in the Netherlands which HMRC accepts is substantially similar in purpose and
effect to sections 979 to 982 of the Companies Act 2006”; and 

  

	 	(c)	in Rule 11.1(c) after the words “or in relation to RE NV under any equivalent legislative provision in the Netherlands”, the following words will be inserted “which HMRC accepts is substantially similar
in purpose and effect to section 899 of the Companies Act 2006”. 

  

	(S)	Rule 13.2 and Rule 13.3 will be deleted and replaced with a new Rule 13.2, 13.2A and 13.3 as follows: 

“13.2 If Rule 13.1 operates to disapply Rule 11: 
  

	 	(a)	Options will not Vest as a result of the relevant event; 

  
 Page 22 

	 	(b)	a Participant may, with the consent of the company obtaining Control, release his Option over Shares in consideration of the grant to him of rights which are equivalent to his Option but relate to shares in a different
company (whether the acquiring company itself or another company falling within paragraph 27(2)(b) of Schedule 4 to ITEPA); 

  

	 	(c)	to the extent a Participant does not release his Option in accordance with paragraph 13.2(b), it will lapse at the end of the appropriate period (which will be construed in accordance with paragraph 26(3) of Schedule 4
to ITEPA); and 

  

	 	(d)	any Performance Condition may be amended in accordance with Rule 5.4. 

 13.2A The new options
will not be regarded for the purpose of the Scheme as equivalent to the old options unless: 
  

	 	(a)	the new options will be exercisable in the same manner as the old options and subject to the provisions of the Scheme as it had effect immediately before the release of the old options; and 

 

	 	(b)	the total market value, immediately before the release, of the shares which were subject to the Participant’s old options is equal to the total market value, immediately after the grant of the shares in respect of
which the new options are granted to the Participant; and 

  

	 	(c)	the total amount payable by the Participant for the acquisition of shares in pursuance of the new options is equal to the total amount that would have been payable for the acquisition of shares in pursuance of the old
options. 

 The new options will for the purposes of the Scheme be treated as having been granted at the time when the old
options were granted. The new options will not lapse as a result of the operation of Rule 11 and/or 12 following the event permitting the grant of such new options. 

In relation to any new options, references in Rule 1 and Rules 11 to 16 of the Scheme to “Qualifying Company”, “RE PLC” and
“RE NV” will (as appropriate) be construed as if references to the company whose shares are subject to the new options and references to “Shares”, “UK Shares” and “Dutch Shares” will (as appropriate) be
construed as if references to the shares subject to the new options. 
 13.3 If Rule 13.1 operates to disapply Rule 12, Options will not Vest
as a result of the relevant event unless the Committee determines otherwise in which case Options will Vest in accordance with Rule 12. For the avoidance of doubt, Options granted under the provisions of this Schedule may not be exchanged as a
result of a relevant event in respect of the Company.” 
  

	(T)	Rule 14 (Rollover on a Change of Control) will be deleted. 

  

	(U)	In Rule 16.1, the words “the definition of Shares” will be deleted and replaced with the words “the description (but not the class) of Shares”. 

  
 Page 23 

	(V)	Rule 16.1(b) will not apply to an Option granted under this Schedule. In its place a new Rule 16.2 will be inserted as follows: 

  

	 	“16.2	If the Committee becomes aware that a Qualifying Company is or expected to be affected by any demerger, dividend in specie, super dividend or other transaction, which, in the opinion of the Committee, would affect the
current or future value of any Options, the Committee (acting fairly and objectively and taking account of the extent to which any Performance Conditions have been satisfied and the period of time which has elapsed since the Date of Grant) may, in
its discretion, allow some or all of the Options to be exercised (whether or not the period in which the Option may be exercised has commenced and whether or not any conditions imposed under Rule 5 have been satisfied). The Committee will specify
the period in which such Options will be exercised and whether such Options will lapse at the end of the specified period. The Committee will notify any Participant who is affected by the discretion exercised under this Rule.”

  

	(W)	No adjustment pursuant to Rule 16.1 in relation to an Option granted under this Schedule will take effect without the prior approval of HMRC. 

 

	(X)	In addition to its powers under Rule 19 and notwithstanding any restriction under Rule 19.2, the Committee may make such amendments to this Schedule as are necessary or desirable to obtain or maintain HMRC
approval of this Schedule. 

  

	(Y)	Rule 19.3 will not apply to any Option granted under this Schedule. For the avoidance of doubt, Schedule 4 will not apply to any Option granted under this Schedule. 

 

	(Z)	At a time when this Schedule is approved by HMRC, and if such approved status is to be maintained, no amendment to any key feature (as defined by paragraph 30 of Schedule 4 to ITEPA) of the Rules of the Scheme or
this Schedule may take effect as regards this Schedule without the prior approval of HMRC (and if such approved status is not to be maintained, the Company will notify HMRC of the relevant amendment as soon as practicable). 

 

	(AA)	Rule 20.13 (No Transfer Options) will be amended so that the words “or (ii) with the consent of the Committee” are deleted. 

 

	(BB)	Rule 20.15 (Taxation) will be amended so that the words “By accepting an Option,” are deleted and the words “and which the Participant has not otherwise satisfied” are inserted after the words
“to which he is or may become entitled under the Scheme”. 

  
 Page 24 

 SCHEDULE 2 

OPTIONS GRANTED TO US PARTICIPANTS 
 The
following provisions will apply to Options granted to Employees who are US Participants: 
  

	(A)	The Rules of the Scheme will apply to the grant of Options to US Participants under this Schedule subject to the modifications contained in the following paragraphs. 

 

	(B)	In this Schedule, terms will have the same meaning as in Rule 1 of the Rules. 

  

	(C)	Date of Grant. The “Date of Grant” defined in Rule 1.1 will have the meaning set forth in the Rules; but for the avoidance of doubt, the following actions will have occurred as of the Date of
Grant: (i) the recipient of the grant of the Option will have been identified, (iii) the maximum number of Shares that can be purchased under the Option will have been established, (iii) the Option Price will have been established,
and (iv) the recipient of the grant will have acquired a legally binding right to the Option. 

  

	(D)	Option Price. The “Option Price” for the acquisition of a Share defined in Rule 1.1 will have the meaning set forth in the Rules, except that in any case where the Option Price is not based upon
a method using actual transactions of the Shares as reported by a stock market, the Option Price will be determined by the reasonable application of a reasonable valuation method determined in accordance with the requirements set forth under
Section 409A of the United States Internal Revenue Code and the regulations and guidance promulgated thereunder (“Code Section 409A”). In no event will the Option Price for the acquisition of a Share be less than the fair market
value of such Share on the Date of Grant, determined in accordance with Code Section 409A. 

  

	(E)	Lapse of Option. Rule 9 will govern the lapse of an Option; but in no event will the exercise period of an Option be extended for any purpose or for any reason, including without limitation, for purposes
of Rules 7, and 8, and 9, to a date that is later than the earlier of (i) the date on which the Option would expire by its original terms, or (ii) the tenth (10th) anniversary of the original Date of Grant. 

 

	(F)	 Adjustments of Options. Notwithstanding anything contained in the Rules to the contrary, including without limitation, Rules 11, 12, 13
or 14, in any instance in which a new option is substituted for an outstanding Option pursuant to a corporate transaction or in any instance in which an outstanding Option is assumed pursuant to a corporate transaction, the number of Shares and the
Option Price per Share covered by the substituted option or assumed Option will be adjusted in accordance with the principles set forth in Sections 1.424-1(a)(5) and 1.409A-1(b)(5)(v)(D) of the United States Treasury Regulations. The instances in
which there may be a substitution of a new option for an outstanding Option pursuant to a corporate transaction or in which there may be an assumption of an outstanding Option pursuant to a corporate transaction will be limited to those corporate
transactions 

  
 Page 25 

	 	
authorized by the Scheme but will be further limited to only those corporate transactions described in Section 1.424-1(a)(3) of the Treasury Regulations. In the case of a stock split
(including a reverse stock split), or stock dividend involving the Shares where the only effect of the stock split or stock dividend is to increase or decrease on a pro rata basis the number of Shares owned by each shareholder, the Option Price and
the number of Shares subject to an Option will be proportionally adjusted to reflect such stock split or stock dividend. 

  

	(G)	Limitation on Exercise Period. Notwithstanding anything contained in the Rules to the contrary, including without limitation, Rules 7 to 14, the exercise period for any Option granted to a US Participant
may not be extended beyond the original exercise period established for such Option. 

  

	(H)	Service Recipient Stock. The Shares underlying any Option granted to a US Participant will in all instances constitute “service recipient stock,” and will be issued or transferred by a Qualifying
Company that is, with respect to such US Participant, an “eligible issuer of service recipient stock” for purposes of Code Section 409A and the regulations promulgated thereunder. 

 

	(I)	Application of Code Section 409A. Although neither the Committee nor any member of the Group guarantees any particular tax treatment to a US Participant, Options granted pursuant to this Schedule are
intended to be exempt from Code Section 409A and will be limited, construed and interpreted in accordance with such intent. 

  

	(J)	Nonqualified Stock Options. The Options granted under this Schedule are not intended to be “incentive stock options” within the meaning of Section 422 of the Code. 

 

	(K)	Withholding. Notwithstanding anything contained herein to the contrary, all Share releases and cash payments to US Participants contemplated hereunder shall be subject, to the extent applicable, to all
applicable tax and withholding rules. 

  

	(L)	Effective Date. This Schedule will be effective on the Adoption Date. 

  
 Page 26 

 SCHEDULE 3 

SCHEME APPLICABLE TO ELSEVIER REED FINANCE BV 

If the Board wishes to grant Options to employees of Elsevier Reed Finance BV (ERF) or of companies under the Control of ERF, it may grant
Options pursuant to this Schedule, and the following provisions will apply: 
  

	(A)	The Rules of the Scheme will apply to the grant of Options under this Schedule subject to the modifications contained in the following paragraphs. 

 

	(B)	In this Schedule, terms will have the same meaning as in Rule 1 of the Rules unless modified by this Schedule. 

  

	(C)	The definition of Group will be construed as including ERF and every company which is under the Control of ERF. 

  

	(D)	Rule 17 will be amended so that it applies in respect of an Employees’ Share Scheme established by RE PLC, the Company or ERF. 

  

	(E)	Options will not be granted under this Schedule without the agreement of the supervisory board of ERF. 

  
 Page 27 

 SCHEDULE 4 

CASH ALTERNATIVE 
 If deemed necessary in
order to ensure compliance with tax, regulatory or legal country specific requirements (e.g. exchange control and securities laws) in the countries in which the Scheme operates then, notwithstanding any provision to the contrary in these Rules: 

 

	(A)	The Committee may decide to satisfy an Option by paying to the Participant an amount equal to the market value (as determined in its discretion) of the number of Shares which would otherwise be issued or transferred
following exercise (as applicable) less the Option Price of the Option or an amount determined on such other reasonable basis as the Committee may decide (which could for example, allow for the deduction of any applicable expenses).

  

	(B)	The Committee may grant an Option on the basis that it will be satisfied in cash, as opposed to Shares, as set out in (A) above. 

Unless the Committee determines otherwise, the Rules will apply as if any Option granted or to be satisfied pursuant to this Schedule involves a right to, or
interest in, Shares for the purposes of determining whether Dealing Restrictions are in place at the Date of Grant, Vesting, exercise, release or surrender of any such Option. 

  
 Page 28EX-10.2

 Exhibit 10.2 

 
  

 
 RULES OF THE

 REED ELSEVIER GROUP PLC 

LONG-TERM INCENTIVE PLAN 2013 
  

 

 
 Adopted by
the directors of Reed Elsevier Group plc on 25 April 2013 
 Approved by the shareholders of Reed Elsevier PLC in general meeting
on 25 April 2013 
 Approved by the shareholders of Reed Elsevier NV in general meeting on 24 April 2013 

 
 

 
 Freshfields Bruckhaus Deringer LLP 

 THE REED ELSEVIER GROUP PLC 

LONG-TERM INCENTIVE PLAN 2013 
 1.
DEFINITIONS 
 1.1 In these Rules and the schedules and appendices to these Rules (each a Schedule or
Appendix, as the case may be), unless the context otherwise requires, the following words and expressions have the following meanings: 

Adoption Date means 25 April 2013 being the date approval of the Plan by shareholders of both Qualifying Companies is obtained; 

Award means a Performance Share Award or Performance Share Option; 

Board means the board of directors for the time being of the Company; 

Capital Reorganisation means any variation in the share capital or reserves of a Qualifying Company (including, without limitation, by way of
capitalisation, rights issue, consolidation, sub-division or reduction); 
 Committee means the remuneration committee of the Board, or other
duly authorised committee of the Board; 
 Company means Reed Elsevier Group plc registered in England No. 2746616 by whatever name known
from time to time; 
 Control has the meaning given to it by section 995 of the Income Tax Act 2007; 

Date of Grant means the date on which an Award is granted in accordance with the terms of Rule 4; 

Dealing Day means any day on which the London Stock Exchange and the Amsterdam Stock Exchange are open for the transaction of business; 

Dealing Restrictions means any restrictions on, or requirement for approvals for dealing in Shares whether under the Company’s, RE
PLC’s or RE NV’s share dealing rules (as applicable), the provisions of the Model Code for Securities Transactions by Directors of Listed Companies, the provisions of the Listing Rules of the UK Listing Authority or the City Code on
Takeovers and Mergers or any of their equivalents in any applicable jurisdiction; 
 Dividend Equivalent means a right to a cash payment or
Shares in accordance with Rule 7; 
 Dutch Share means an ordinary share in the capital of RE NV or shares representing those shares following
any Capital Reorganisation of RE NV and includes an American Depositary Share representing a Dutch Share; 
 Employee means any employee
(including an executive director) or a corporate officer of a member of the Group or a Qualifying Company; 
 Employees’ Share Scheme has
the meaning given by section 1166 of the Companies Act 2006 but for these purposes the Qualifying Companies will be treated as holding companies of the Company; 

  
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 Financial Year means an accounting reference period as determined in accordance with section 391 of
the Companies Act 2006; 
 Group means the Company and every company which is under the Control of the Company and member of the
Group will be construed accordingly; 
 Market Value means: 
  

	(a)	in relation to a UK Share, the middle-market quotation for a UK Share (as derived from the Daily Official List of the London Stock Exchange) on the Dealing Day immediately preceding the Date of Grant or if the Committee
so determines the average of the middle-market quotations for a UK Share (as derived from the Daily Official List of the London Stock Exchange) for the three Dealing Days ending on the Dealing Day immediately preceding the Date of Grant;

  

	(b)	in relation to a Dutch Share, the closing price for a Dutch Share on the Amsterdam Stock Exchange on the Dealing Day immediately preceding the Date of Grant or, if the Committee so determines, the average of the closing
prices for a Dutch Share on the Amsterdam Stock Exchange for the three Dealing Days ending on the Dealing Day immediately preceding the Date of Grant; 

provided always that Market Value for a Dutch Share will be determined by reference to the same Dealing Days as are used to determine Market
Value for a UK Share; 
 Normal Vesting Date means the date, following the end of the Performance Period, on which the Committee determines
the extent to which the Performance Condition has been satisfied or such later date as the Committee may at any time determine, or, if there are Dealing Restrictions in place on that date, such later date when all Dealing Restrictions have been
lifted; 
 Participant means any person who has been granted an Award which has not lapsed in accordance with the provisions of these Rules
and includes, where the context permits, the legal personal representatives of a deceased Participant; 
 Performance Condition means the
condition or conditions determined by the Committee in accordance with Rule 5, measured after the end of the Performance Period or such other period as may be permitted under the Rules, which must be satisfied in order for an Award to Vest; 

Performance Period means the period after which the Performance Condition is measured which will be, unless the Committee determines otherwise
at the Date of Grant or as otherwise provided in the Rules, the period of three consecutive Financial Years of the Company starting with the Financial Year in which the Date of Grant falls; 

Performance Share Option means, unless Schedule 3 applies, a right in the form of an option granted under Rule 4 to acquire Shares without
payment (other than under Rule 19.15) or for a nil or nominal exercise price; 
 Performance Share Award means, unless Schedule 3 applies, a
right granted under Rule 4 to receive Shares without payment (other than under Rule 19.15); 

  
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 Plan means this Reed Elsevier Group plc Long-Term Incentive Plan 2013 as amended from time to time;

 Pro-rated Number means such whole number of Shares (rounded down, as necessary) as is determined by multiplying the number of Shares
comprised in an Award by A/B where (i) for the purposes of Rule 8 (Cessation of Employment), A is the number of complete months from the start of the Financial Year in which the Award was granted to the Termination Date, but not
exceeding the number of complete months in the Performance Period and B is the number of complete months in the Performance Period and (ii) for the purposes of Rule 10 (Change of Control of a Qualifying Company), A is the number
of complete months from the start of the Financial Year in which the Award was granted to the relevant event, but not exceeding the number of complete months in the Performance Period and B is the number of complete months in the Performance
Period. For the purposes of this definition, the Performance Period will be the period determined by the Committee at the Date of Grant; 
 Qualifying
Company means each of RE PLC and RE NV; 
 RE NV means Reed Elsevier NV; 

RE PLC means Reed Elsevier PLC; 

Rules means these Plan rules and any reference to a Rule will be construed accordingly; 

Share means a UK Share and/or a Dutch Share as the context may require and Shareholder will be construed accordingly; 

Termination Date means the date on which a Participant ceases to be an Employee; 

UK Share means an ordinary share in the capital of RE PLC or shares representing those shares following any Capital Reorganisation of RE PLC and
includes an American Depositary Share representing a UK Share; 
 US Participant means a Participant who is subject to United States taxation
under United States law including by reason of being a United States national, or resident in the United States for United States tax purposes; 

Vesting means the Participant becoming absolutely entitled to receive the Shares comprised in his Performance Share Award or to exercise his
Performance Share Option in each case in accordance with these Rules and Vest and Vested will be construed accordingly. 
 1.2
Where the context permits the singular will include the plural and vice versa and the masculine will include the feminine. Headings will be ignored in construing the Plan. 

1.3 Any references to a statutory provision will include that provision as it may from time to time be amended, modified or re-enacted. 

  
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 2. ELIGIBILITY 

2.1 No person will be entitled as of right to participate in the Plan. The Committee may select any Employee to participate in the Plan, except any Employee
who is under notice of termination of employment at the Date of Grant, unless the Committee determines otherwise. 
 3. INDIVIDUAL
LIMIT 
 3.1 The Committee may not grant an Award to an Employee if the Market Value of the Shares under that Award when aggregated with
the Market Value of Shares under any other Award granted to that Employee under the Plan in the same Financial Year exceeds: 
  

	(a)	in the case of an Employee who is the Chief Executive Officer of the Company, 250% of his basic salary from the Group as at the Date of Grant; and 

 

	(b)	in the case of any other Employee, 200% of his basic salary from the Group as at the Date of Grant. 

 3.2 For
the avoidance of doubt, for the purposes of Rule 3.1, Market Value is to be determined as at the Date of Grant of the relevant Awards. 
 4.
GRANT OF AWARDS 
 4.1 Subject to any Dealing Restrictions, the Committee may, during any period specified
in Rule 4.3 below, grant Awards to any Employees selected by the Committee. The Committee will determine whether an Award will be granted as a Performance Share Award or a Performance Share Option or both. 

4.2 Awards will be granted by deed. Each Participant will receive information (electronically or in hard copy) following the Date of Grant summarising the
main terms of the Award. This summary may include the following information: 
  

	(a)	whether the Award is a Performance Share Award or a Performance Share Option or both; 

  

	(b)	the number and type of Shares subject to the Award; 

  

	(c)	details of the Performance Condition applicable to the Award; 

  

	(d)	the Performance Period; 

  

	(e)	the terms of any other conditions imposed pursuant to Rule 5; 

  

	(f)	whether or not the Award carries a right to Dividend Equivalents; 

  

	(g)	the exercise period or periods applicable to a Performance Share Option; 

  

	(h)	which (if any) Schedules to the Plan will apply to the Award; 

  

	(i)	any other information as the Committee may determine. 

  
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 4.3 Awards may only be granted within the period of 42 days commencing on any of the following: 

 

	(a)	the Adoption Date; 

  

	(b)	the release of the Qualifying Companies’ interim (half-yearly) and/or final results in any year; 

  

	(c)	the release by the Qualifying Companies of any trading update or (if applicable to the Qualifying Companies at the time) their quarterly results for any year; 

 

	(d)	the day on which the Committee resolves that circumstances exist which justify the grant of Awards outside the periods referred to in (a) to (c) above; or 

 

	(e)	the day following the lifting of any Dealing Restrictions which prevented the grant of the Award during the periods referred to in (a) to (d) above. 

4.4 The Committee may, at any time between the Date of Grant and the Vesting Date, determine that an Award granted as Performance Share Award should instead
be treated as if it had been granted as a Performance Share Option and vice versa. The Committee will arrange for a Participant to be notified as soon as reasonably practicable of any determination pursuant to this Rule 4.4 and to receive revised
information on the terms of his Award in accordance with Rule 4.2. Any Award subject to a determination pursuant to this Rule 4.4 will not be treated as a grant of a new Award for the purposes of these Rules so that the Date of Grant, number of
Shares under the Award, Performance Period, Performance Condition and Vesting Date will be unaffected. 
 5. PERFORMANCE
AND OTHER CONDITIONS 
 5.1 Awards will be granted subject to a Performance Condition which, unless
otherwise permitted in the Rules, must be satisfied before the Vesting of Awards. Awards granted in 2013 under the Plan will be subject to the Performance Condition as set out in the Appendix. Awards granted in 2014 or subsequent years will be
subject to a Performance Condition determined by the Committee at the relevant Date of Grant. 
 5.2 The Committee may make the grant or Vesting of Awards
subject to any other conditions it determines appropriate including, but not limited to, requiring a Participant to agree to comply with certain post-employment restrictive covenants, to meet shareholding requirements or to agree to post-Vesting or
post-exercise sale restrictions. 
 5.3 The Committee may make such adjustments to the Performance Condition applicable to outstanding Awards as it
considers appropriate to take account of any factors which are relevant in the opinion of the Committee and in particular if there is an event which causes it to consider that the Performance Condition, or any part of it, is no longer a fair measure
of performance. The amended Performance Condition will not be materially less or more challenging than the one originally set. 

  
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 5.4 In determining the level of Vesting of an Award under the Plan, the Committee will take into account the
overall business performance of the Qualifying Companies and the Group over the Performance Period and any other factors that it considers appropriate and may modify the Vesting level if it considers that such a modification would result in a fairer
outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying business performance. 

5.5 Without prejudice to Rule 5.3 and Rule 5.4, there will be no retesting of any Performance Condition. 

6. NORMAL VESTING OF AWARDS 

6.1 Except as otherwise permitted in the Rules, the number of Shares, if any, which Vest under an Award will be determined by the Committee by reference to the
extent to which (i) the Performance Condition has been satisfied and (ii) any other conditions to which the Award is subject have been satisfied or waived in accordance with these Rules. 

6.2 Except as otherwise provided in these Rules, Awards will Vest, in accordance with Rule 6.1, on the Normal Vesting Date and any part of an Award which does
not Vest will immediately lapse. 
 6.3 Where an Award takes the form of a Performance Share Award, any Vested Shares will be issued or transferred to the
Participant as soon as reasonably practicable after the Normal Vesting Date, subject to any Dealing Restrictions. 
 6.4 Where an Award takes the form of a
Performance Share Option, subject to any Dealing Restrictions, a Participant may exercise his Performance Share Option in whole or in part by giving notice in the manner prescribed by the Company following the Normal Vesting Date. The Participant
will specify in the notice of exercise the number of Shares in respect of which the Performance Share Option is being exercised and will provide any required documentation and payment of any exercise price (or appropriate undertaking to pay any
exercise price) in respect of the Shares over which the Performance Share Option is being exercised. A notice of exercise will take effect on the date it is validly received by the Company or, if there are any Dealing Restrictions in place on that
date, such later date when all Dealing Restrictions have lifted. Subject to any Dealing Restrictions, Vested Shares will be issued or transferred to the Participant as soon as reasonably practicable following the date the notice of exercise takes
effect. 
 7. ENTITLEMENT TO DIVIDEND EQUIVALENTS 

7.1 If an Award has been granted on the basis that it carries Dividend Equivalents, the Participant will, subject to Rule 7.3, be entitled to a cash payment
equal in value to the ordinary dividends (excluding any associated tax credit) which would have been paid on the Vested Shares during the period commencing at the start of the Performance Period and ending on the earlier of (i) the end of the
Performance Period and (ii) the Vesting of the Award. 
 7.2 The cash payment to which the Participant becomes entitled under Rule 7.1: 

 

	(a)	will be calculated (in such manner as the Committee sees fit) by reference to the currency of payment of the underlying dividend (and paid in such currency as the Committee sees fit); 

  
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	(b)	will be calculated without any entitlement to interest (or other type of investment return) in the period between the dividend payment date and Vesting; 

 

	(c)	will be paid (subject to such deductions as are required by law) within one month of Vesting; and 

  

	(d)	will be calculated by reference to ordinary dividends and without regard to special dividends or distributions or dividends-in-specie. 

7.3 Instead of making a cash payment, the Committee may in its discretion satisfy any entitlement to Dividend Equivalents arising in accordance with Rule 7.1
by issuing or transferring Shares with an equivalent value as determined at the time of Vesting. 
 7.4 For the avoidance of doubt, any payment referred to
in this Rule 7 does not represent an entitlement to actual dividends on the underlying Shares, by reason of the Participant not being the beneficial owner of the Shares at that time. 

8. CESSATION OF EMPLOYMENT 

Participant gives or receives notice 
 8.1 Except as
otherwise provided in these Rules, in the event that a Participant gives or receives notice of termination of employment for any reason other than those set out in Rule 8.2 (Approved Leaver), an Award (whether Vested or not) will automatically lapse
on the date on which notice is given or received. 
 Approved Leaver 

8.2 Except as otherwise provided in these Rules, if a Participant ceases to be an Employee before the Normal Vesting Date by reason of: 

 

	(a)	injury, disability or ill-health; 

  

	(b)	redundancy (as defined in section 139 of the Employment Rights Act 1996); 

  

	(c)	retirement with the consent of the Company; 

  

	(d)	death; 

  

	(e)	the sale of the company or business in which the Participant is employed out of the Group; or 

  

	(f)	any other reason the Committee (acting fairly and reasonably), in its absolute discretion, determines: 

 the
Award will continue in force over a Pro-rated Number of Shares until the end of the Performance Period and will lapse as to the balance on the Termination Date. The Award will Vest, if at all, on the Normal Vesting Date in accordance with Rule 6.

  
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 8.3 The Committee has discretion to vary the application of Rule 8.2 and determine that an Award will instead
Vest as at the Termination Date over a Pro-rated Number of Shares to the extent the Performance Condition is satisfied. The Performance Condition will be assessed based on progress made against targets at the Termination Date as determined by the
Committee in its absolute discretion. Such determination will take place as soon as reasonably practicable after the Termination Date and to the extent that an Award does not Vest as at the Termination Date, it will immediately lapse. Any Vested
Shares will be issued or transferred to the Participant as soon as reasonably practicable after the date of determination, subject to any Dealing Restrictions. 

8.4 The Committee also has discretion, if it considers it appropriate in the particular circumstances, to determine that an Award will Vest on some other
basis. 
 Exercise Period – Approved Leaver 

8.5 Where an Award takes the form of a Performance Share Option and Vests pursuant to this Rule 8, the Committee will determine the period during which the
Participant (or the personal representatives of a deceased Participant) may exercise that Performance Share Option (and any other Vested Performance Share Options held by him at the Termination Date to the extent not previously exercised) at the end
of which period it will immediately lapse to the extent it has not been exercised. 
 Intra-Group Transfer of Employment 

8.6 For the avoidance of doubt, a Participant will not cease to be an Employee for the purposes of this Rule 8 if he ceases to be employed by a member of the
Group or Qualifying Company but continues to be or is immediately afterwards employed by another member of the Group or Qualifying Company. 
 9.
CLAW-BACK ARRANGEMENTS 
 Breach of Restrictive Covenants 

9.1 If a Participant breaches any term of his post-termination restrictive covenants (such breach to be determined by the Committee acting fairly and
reasonably), any Awards (whether Vested or unvested) held by him will lapse on the date of the Committee’s determination as to the breach and the Committee may require him to pay to the Company or any other member of the Group, within seven
days after a written demand from the Company, the Relevant Amount (as defined in Rule 9.2 below). 
 9.2 The Relevant Amount is an amount
equal to A minus both B and C where: 
 A is an amount equal to the pre-tax gain realised by the
Participant in respect of any Awards and Dividend Equivalents in the period beginning six months before the Termination Date and ending on such date as the Participant’s post-termination restrictive covenants are stated to expire. For these
purposes, the gain will be the sum of the market value of the Vested Shares when received or acquired by the Participant and the related Dividend Equivalents (as determined by the Committee), and such gain will be determined irrespective of whether
the Participant has sold or retained the Shares so received or acquired; 
 B is an amount equal to the tax and social security charges and
liabilities incurred by the Participant in respect of A which the Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax authority notwithstanding his obligation to make a payment
pursuant to Rule 9.1; and 

  
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 C is the amount of any Claw-back Amount, (as defined in Rule 9.4) paid by the Participant. 

Vesting Determined on the Basis of Materially Mis-stated Data 

9.3 If the Committee, at any time up to two years after the Vesting of an Award, considers in good faith that the Vesting of the relevant Award and/or the
payment of Dividend Equivalents was determined on the basis of materially mis-stated financial or other data (the Incorrect Award), it will, unless determined otherwise at the sole discretion of the Committee, recover the
Claw-back Amount (as defined in Rule 9.4 below) by taking one or more of the following actions: 
  

	(a)	take the Claw-back Amount (or the balance thereof) into account when determining the quantum of any future Awards; and/or 

  

	(b)	scale back any outstanding unvested Awards to take account of the Claw-back Amount (or the balance thereof); and/or 

  

	(c)	require the Participant to pay to the Company (or any member of the Group), within thirty days of a written demand from the Company, the Claw-back Amount (or the balance thereof). 

9.4 The Claw-back Amount is the difference in value between (i) the Incorrect Award and (ii) the Award and Dividend Equivalents (as
the case may be) which could or would have Vested or been payable had the correct data been used, as determined by the Committee acting fairly and reasonably. This may be expressed as a number of Shares or a monetary amount or a combination thereof
as the Committee considers appropriate. In determining the Claw-back Amount, the Committee may take into account such matters as it sees fit including, but not limited to: 
  

	(a)	the difference between the number of Shares that actually Vested under the Incorrect Award and the number of Shares over which the Committee considers the Award should have Vested had the correct data been used;

  

	(b)	any gain made by the Participant on the sale of Shares received from the Incorrect Award; 

  

	(c)	any tax and/or dealing costs incurred by the Participant in connection with the Incorrect Award which the Participant is unable to recover or for which he is otherwise unable to claim relief from the applicable tax
authority notwithstanding his obligation to make a payment pursuant to Rule 9.3, and 

  

	(d)	the extent and timing of any payment made by the Participant pursuant to Rule 9.1. 

 9.5 By accepting an Award,
a Participant will be bound by this Rule 9 notwithstanding (i) that it may only be applicable after the transfer of Shares under these Rules and (ii) whether or not all or any of the terms of this Rule 9 have been separately notified to
each Participant. 

  
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 10. CHANGE OF CONTROL OF A
QUALIFYING COMPANY 
 10.1 Except as otherwise provided in these Rules, if any person: 

 

	(a)	obtains Control of a Qualifying 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 that Qualifying Company; 

  

	(b)	becomes bound or entitled to acquire Shares under sections 979 and 983 of the Companies Act 2006 (or in relation to RE NV becomes bound or entitled to acquire compulsorily Shares held by minority shareholders); or

  

	(c)	obtains Control of a Qualifying Company in pursuance of a compromise or arrangement sanctioned by the Court under section 899 of the Companies Act 2006 (or in relation to RE NV under any equivalent legislative provision
in the Netherlands), 

 then any unvested Awards over Shares in that Qualifying Company (but not those in the other Qualifying Company) will
subject to satisfaction of the Performance Condition Vest in respect of the Pro-rated Number of Shares on a date within 30 days of the relevant event determined by the Committee. The Performance Condition will be assessed based on progress made
against targets as at the date of the relevant event as determined by the Committee in its absolute discretion. Any Vested Shares will be issued or transferred to the Participant as soon as reasonably practicable after the date they Vest. 

10.2 Any Award over Shares in the Qualifying Company to which Rule 10.1 applies which does not Vest as a result of the relevant event will lapse on the
relevant event. For the avoidance of doubt, any Award over Shares in the other Qualifying Company will continue in force subject to the Rules. Where a Vested Award takes the form of a Performance Share Option, the Committee will determine the period
during which it may be exercised, at the end of which period it will immediately lapse. 
 11. CHANGE OF
CONTROL OF THE COMPANY 
 Except as otherwise provided in these Rules, the provisions of Rule
10 (Change of Control of a Qualifying Company) will apply with any necessary changes in the event that any person (either alone or together with any person acting in concert with him) obtains Control of the Company and the Shares under Awards which
may Vest as a result of the relevant event will be Shares in both Qualifying Companies. 
 12. INTERNAL REORGANISATION

 12.1 Rule 10 and Rule 11 will not apply if the purpose and effect of the change of Control or scheme of arrangement is: 

 

	(a)	to create a new holding company for the relevant Qualifying Company, such company having substantially the same Shareholders and proportionate shareholdings as those of the Qualifying Company immediately before the
scheme of arrangement; 

  

	(b)	to give one Qualifying Company Control (directly or indirectly) of the other Qualifying Company; 

  

	(c)	the person obtaining Control of the Company is one of the Qualifying Companies or a company under the Control of one or both of them; or 

  
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	(d)	the Company remains under the ultimate Control of the Shareholders of the Qualifying Companies immediately before the relevant transaction affecting the Company. 

12.2 If Rule 12.1 applies: 
  

	(a)	Awards will not Vest as a result of the relevant event; 

  

	(b)	an Award will instead be exchanged for an equivalent award over such shares as the Committee determines appropriate; and 

  

	(c)	the Committee may make any modifications to the Performance Condition as it determines appropriate. 

 12.3 The
Committee may vary the application of this Rule 12 so that it applies to Awards over Shares in both Qualifying Companies or over Shares in only one Qualifying Company. 

12.4 Where this Rule 12 applies, a Participant will not be treated as ceasing to be an Employee until he ceases to be employed by a company which is either
the relevant holding company or a subsidiary of the holding company (within the meaning of section 1159 of the Companies Act 2006). 
 13.
ROLLOVER ON A CHANGE OF CONTROL 
 13.1 The Committee may
determine that Rule 10 or Rule 11 will not apply on a change of Control of a Qualifying Company or the Company (as applicable) and may, with the consent of the person obtaining Control, (i) determine that the Awards will be rolled over in
accordance with either the provisions of Rule 12.2 or Rule 13.2 or (ii) allow the Participants to choose between the Vesting of Awards (if at all) under Rule 10 or Rule 11 as applicable and rollover in accordance with, as determined by the
Committee, Rule 12.2 or Rule 13.2. 
 13.2 The Committee can determine that Awards are rolled over in accordance with the following terms: 

 

	(a)	the Performance Condition will be assessed based on progress made against targets as at the date of the relevant event as determined by the Committee in its absolute discretion; 

 

	(b)	to the extent that the Performance Condition has been met, the Award will be exchanged for an equivalent award over such shares as agreed between the Committee and the person obtaining Control, and will Vest on the
Normal Vesting Date subject only to the Participant remaining in employment within the acquirer group of companies (unless Rule 8.2 applies) and will be subject to the Rules as they last had effect in relation to the Award that was rolled-over; and

  

	(c)	to the extent that the Performance Condition has not been met, the Award will immediately lapse. 

 13.3 For the
avoidance of doubt, in Rule 10, Rule 11, Rule 12 and Rule 13, “Committee” means the Committee as constituted immediately before the event by virtue of which the applicable Rule applies. 

  
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 14. VOLUNTARY WINDING UP 

The provisions of Rule 10 will apply with such changes as may be necessary in the event that notice is duly given of a resolution for a voluntary winding up of
a Qualifying Company PROVIDED THAT, all references in that Rule to the date of the relevant event will be treated as references to the date on which notice is given for the voluntary winding-up of
a Qualifying Company. 
 15. ADJUSTMENT OF AWARDS 

15.1 In the event of: 
  

	(a)	any Capital Reorganisation; or 

  

	(b)	the implementation by a Qualifying Company of a demerger or the payment by a Qualifying Company of a super-dividend which would otherwise materially affect the value of an Award, 

the number of Shares in that Qualifying Company comprised in an Award may be adjusted in such manner as the Committee may determine. 

16. SOURCE OF SHARES 

16.1 An Award may be satisfied by the issue or transfer of Shares. 

16.2 No Award will be granted under the Plan to the extent that the result of that grant would be that the aggregate number of UK Shares that could be issued
on the exercise or vesting of that Award and any other Award granted at the same time, when added to the number of UK Shares that: 
  

	(a)	could be issued on the exercise or vesting of any subsisting Awards or exercise or vesting of any subsisting awards granted during the preceding ten years under the Plan or any other Employees’ Share Scheme
established by RE PLC or the Company; and 

  

	(b)	have been issued on the exercise or vesting of any Awards or exercise or vesting of any subsisting awards granted during the preceding ten years under the Plan or any other Employees’ Share Scheme established by RE
PLC or the Company, 

 would exceed 10 per cent. of the ordinary share capital of RE PLC for the time being in issue. 

16.3 No Award may be granted under the Scheme to the extent that the result of that grant would be that the aggregate number of UK Shares that could be issued
on the exercise or vesting of that Award and any other Award granted at the same time, when added to the number of UK Shares that: 
  

	(a)	could be issued on the exercise or vesting of any subsisting Award or exercise or vesting of any subsisting awards granted during the preceding ten years under the Scheme, or any other discretionary share scheme
established by RE PLC or the Company; and 

  
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	(b)	have been issued on the exercise or vesting of any Awards or exercise or vesting of any subsisting awards granted during the preceding ten years under the Plan or any other discretionary share scheme established by RE
PLC or the Company, 

 would exceed 5 per cent. of the ordinary share capital of RE PLC for the time being in issue. 

16.4 Reference in this Rule 16 to the issue of Shares means, for the avoidance of doubt, the issue and allotment (but not transfer) of Shares. The delivery of
Shares from treasury also counts towards the percentage limits set out in Rule 16.2 and Rule 16.3 above for so long as institutional shareholder guidelines recommend this. 

16.5 In determining the above limits no account will be taken of any Shares attributable to an Award which was released, lapsed or otherwise became incapable
of exercise or vesting. 
 16.6 The number of Dutch Shares which may be issued pursuant to Awards granted under the Plan from time to time will be agreed
between the Committee and RE NV before such Awards are granted PROVIDED THAT the percentage referred to in Rules 16.2 and 16.3 above in relation to RE PLC will apply in relation to RE NV. 

17. RIGHTS ATTACHING TO SHARES 

17.1 All Shares issued or transferred on the Vesting of a Performance Share Award will rank pari passu in all respects with the Shares in issue at the date of
Vesting except in respect of any rights attaching to such Shares by reference to a record date prior to the date of Vesting and all Shares issued or transferred on the exercise of a Performance Share Option will rank pari passu in all respects with
the Shares in issue at the date of exercise except in respect of any rights attaching to such Shares by reference to a record date before the date of exercise. 

17.2 Any Shares acquired by a Participant under this Plan will be subject to the articles of association of the relevant Qualifying Company from time to time.

 18. ADMINISTRATION AND AMENDMENT 

18.1 The decision of the Committee will be final and binding in all matters relating to the Plan including the exercise of any discretion under these Rules,
the interpretation of the Rules and any dispute relating to any matter in connection with the Rules. 
 18.2 The Committee may at any time discontinue the
grant of further Awards or amend any of the provisions of the Plan in any way it thinks fit provided that: 
  

	(a)	the Committee will not make any amendment that would materially prejudice the interests of existing Participants except with the prior consent of the Participants; 

 

	(b)	no amendment which in the reasonable opinion of the Committee is to the advantage of Employees or Participants may be made to: 

  

	 	(i)	the definition of Employee; 

  
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	 	(ii)	the maximum entitlement of an Employee under the Plan; 

  

	 	(iii)	the maximum limit on the number of Shares which can be awarded under the Plan; 

  

	 	(iv)	the basis for determining an Employee’s entitlement to Shares under the Plan and the terms on which Shares can be acquired; 

  

	 	(v)	the adjustment provisions of Rule 15; 

  

	 	(vi)	the amendment provisions of this Rule 18; 

 without the prior approval of RE PLC (and if
appropriate RE NV) in general meeting except (a) in the case of minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory
treatment for Employees and/or Participants or any Qualifying Company or member of the Group or (b) as otherwise permitted under these Rules; and 
  

	(c)	without prejudice to any provision of the Plan which provides for the lapse of an Award, the Committee may not cancel an Award unless the Participant agrees to such cancellation. 

18.3 Notwithstanding any other provision of the Plan, the Committee may make appropriate amendments to the Plan and/or establish schedules to the Plan for the
purpose of granting Awards to Employees, based on the Plan but modified to take account of such factors as the Committee determines appropriate including, but not limited to, local tax, exchange control or securities laws in any territory. 

19. GENERAL 
 Trustee Funding

 19.1 Any member of the Group may provide money to the trustee or trustees of any trust or any other person or persons to enable any such person or persons
to acquire or subscribe for Shares to be held for the purposes of satisfying Awards, or enter into any guarantee or indemnity for those purposes, to the extent permitted by the Companies Act 2006. 

Discretionary Nature of the Plan 
 19.2 Subject to
Rule 19.5, the rights and obligations of a Participant under the terms and conditions of his office or employment will not be affected by his participation in the Plan or any right he may have to participate in the Plan. 

19.3 Participation in the Plan does not imply any right to receive Awards on the same or any other basis in any other year. 

19.4 The terms of the Plan do not entitle the Participant to the exercise of any discretion in his favour. 

  
 Page 14 

 19.5 Each Participant waives all and any rights to compensation or damages in consequence of the termination of
his office or employment with any member of the Group or Qualifying Company for any reason whatsoever (whether such cessation is lawful or unlawful) insofar as those rights arise, or may arise, from his ceasing to have rights or be entitled to
Shares under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. If necessary, the Participant’s terms of employment will be varied accordingly. 

Changes to a Qualifying Company’s capital structure 

19.6 The existence of any Award will not affect in any way the right or power of the Company, the Qualifying Companies or their Shareholders to make or
authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s or either of the Qualifying Company’s capital structure, or any merger or consolidation of the Company or Qualifying Companies, or any
issue of shares, bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company or Qualifying Companies or any sale or
transfer of all or any part of their assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

Notices 
 19.7 Any notice or other document which
has to be given to a Participant under or in connection with the Plan may be (i) delivered or sent by post to him at his home address according to the records of his employing company, (ii) sent by email or fax to any email address or fax
number according to the records of his employing company or, in either case, such other address as may appear to the Company to be appropriate, or (iii) provided electronically through a website hosted by the Company or an agent of the Company,
provided that the Participant is notified by email, fax or post that such notice or document has been or will be provided in this manner. 
 19.8 Notices
sent by post to a Participant in the UK or US will be deemed to have been given two days after the date of posting. However, notices sent to a Participant in other countries will be deemed to have been given on the seventh day after the date of
posting. 
 19.9 Notices sent by email or fax, in the absence of evidence to the contrary, will be deemed to have been received on the day after sending.

 19.10 Notices provided through a website will be deemed to have been received on the day they are posted on the website or, if later, the day the
Participant is deemed in accordance with Rule 19.8 or Rule 19.9 to have received the notification that it has been provided there. 
 19.11 Any notice or
other document required to be given to the Company under or in connection with the Plan may be delivered or sent by post to it at its registered office (or such other place or places as the Committee may from time to time determine and notify to
Participants) or sent by email or fax to any email address or fax number notified to the sender. 
 19.12 All Share certificates, Award certificates and
other communications relating to the Plan will be sent at the Participant’s risk. 

  
 Page 15 

 No transfer of Awards 

19.13 A Participant may not transfer, assign, charge or otherwise dispose of Awards, or any rights in respect of them, except (i) on the transmission of
Awards on the death of a Participant to his personal representatives or (ii) with the consent of the Committee. Any such attempted non-approved transfer will result in the lapse of the Award. 

Awards Non-Pensionable 
 19.14 Awards and Dividend
Equivalents under the Plan are not pensionable. 
 Taxation 

19.15 Any liability of a Participant to taxation in respect of an Award will be for the account of the relevant Participant. By accepting an Award, a
Participant agrees to comply with any arrangements specified by the Company for the reporting and payment of tax, duty and social security contributions in any jurisdiction in respect of any Award and any Shares to which he is or may become entitled
under the Plan including, without limitation, (i) arranging the sale of sufficient Shares on the Participant’s behalf to enable the Company or any member of the Group to satisfy its obligations in respect of deduction or withholding of
tax, duty or social security contributions at source and (ii) entering into any election specified by the Company under Chapter 2 of Part 7 of the Income Tax (Employment & Pensions) Act 2003. 

Stamp Duty 
 19.16 The Company or, where the
Committee so directs, any member of the Group, will pay the appropriate stamp duty on behalf of Participants in respect of any transfer or issue of Shares on the Vesting of a Performance Share Award or exercise of a Performance Share Option under
the Plan. 
 Expiry of Plan 
 19.17 No Awards
will be granted under the Plan after the tenth anniversary of the Adoption Date. 
 Data Protection 

19.18 By accepting the grant of an Award, a Participant consents to the holding and processing of personal data provided by him to the Company, a Qualifying
Company or any member of the Group, and any other persons for all purposes related to the operation of the Plan and acknowledges that the personal information may be transferred to, and stored at, a destination outside the European Economic Area
(“EEA”), and may also be processed by staff operating outside the EEA who work for the Company, a Qualifying Company or any member of the Group or for one of their service providers. The Company will take all steps reasonably practicable
to ensure that a Participant’s personal data is treated securely under appropriate contractual arrangements. 

  
 Page 16 

 Governing Law 

19.19 This Plan will be governed by, and construed in accordance with, the laws of England and Wales and the courts of England and Wales will have exclusive
jurisdiction in relation to any dispute arising in connection with the Plan. 

  
 Page 17 

 APPENDIX

Performance Condition 
 General 

1. The following provisions apply to Awards granted under the Plan in 2013. 

2. Except as otherwise provided for in the Rules, the Performance Condition applicable to Awards will be measured after the end of the Performance Period for
such Award. 
 3. There are three separate measures of equal weighting: a Relative Total Shareholder Return measure (TSR Measure), a Return on
Invested Capital measure (ROIC Measure) and an Adjusted Earnings per Share measure (EPS Measure). 
 4. The Performance Period
is the period of three consecutive Financial Years of the Company starting with the Financial Year in which the Date of Grant falls. 
 5. Awards will Vest
(if at all) over a whole number of Shares (rounded down, as necessary). To the extent that the Performance Condition is not satisfied and, as a result an Award does not Vest, the Award will lapse. 

The TSR Measure 
 6.1 The Vesting of one third of the
Award is subject to the TSR ranking of Reed Elsevier measured over the Performance Period. The portion of an Award subject to the TSR Measure is referred to as the “TSR Tranche”. 

6.2 Three distinct comparator groups will be used—a Sterling Comparator Group, a Euro Comparator Group and a US Dollar Comparator Group. The TSR
performance of RE PLC ordinary shares (based on RE PLC’s London listing) will be measured against the Sterling Comparator Group, the TSR performance of RE NV ordinary shares (based on RE NV’s Amsterdam listing) will be measured against the
Euro Comparator Group; and the TSR performance of RE PLC ADRs and RE NV ADRs (based on the New York listing) will be measured against the US Dollar Comparator Group. The TSR performance will be measured separately against each comparator group and
each ranking achieved will produce a payout, if any, in respect of one third of the TSR Tranche. The proportion of the TSR Tranche which Vests will be the sum of the payouts achieved against the three comparator groups. 

6.3 TSR will be measured in local currency. 
 6.4 TSR for any
company will be the percentage increase or decrease in the market value of a share over the relevant Performance Period and shall take account of dividends and other distributions paid in the course of that period (each such dividend being deemed to
be reinvested in the shares of each relevant company from the date of payment of the dividend to the last day of the Performance Period). 

  
 Page 18 

 6.5 Each comparator group comprises companies which were selected on the following basis: 

 

	 	•	 	They are included in a relevant market index or are the largest companies listed on relevant exchanges as at 31 December 2012: FTSE100 for the Sterling Comparator Group; AEX, NYSE Euronext and Frankfurt Stock
Exchange for the Euro Comparator Group; and the S&P500 for the US Dollar Comparator Group; 

 excluding: 

 

	 	•	 	companies with mainly domestic revenues (as they do not reflect the global nature of the Qualifying Companies’ customer base); 

 

	 	•	 	those engaged in extractive industries (as they are exposed to commodity cycles); and 

  

	 	•	 	financial services companies (as they have a different risk/reward profile). 

  

	 	•	 	The remaining companies are ranked by market capitalisation and for each comparator group the 20 companies above and below Reed Elsevier are taken; and 

 

	 	•	 	Relevant listed global peers operating in businesses similar to those of Reed Elsevier not otherwise included are added to the relevant comparator group. 

Set out below are the comparators included in each comparator group: 

 

					
	 STERLING COMPARATOR GROUP
	  	 EURO COMPARATOR GROUP
	  	 US DOLLAR COMPARATOR GROUP

	 VODAFONE GROUP
	  	LVMH	  	EBAY
	 GLAXOSMITHKLINE
	  	BASF	  	3M
	 BRITISH AMERICAN TOBACCO
	  	L’OREAL	  	CATERPILLAR
	 SABMILLER
	  	BAYER	  	COLGATE-PALM.
	 DIAGEO
	  	UNILEVERCERTS.	  	ACCENTURE
	 ASTRAZENECA
	  	DAIMLER	  	MONDELEZ INTERNATIONAL CL.A
	 UNILEVER (UK)
	  	BMW	  	EI DU PONT DE NEMOURS
	 RECKITT BENCKISER GROUP
	  	GDF SUEZ	  	DOW CHEMICAL
	 NATIONAL GRID
	  	DEUTSCHE TELEKOM	  	DANAHER
	 IMPERIAL TOBACCO GP.
	  	SCHNEIDER ELECTRIC	  	EMERSON ELECTRIC
	 ROLLS-ROYCE HOLDINGS
	  	AIR LIQUIDE	  	NIKE ‘B’
	 COMPASS GROUP
	  	VOLKSWAGEN PREF.	  	BAXTER INTL.
	 ASSOCIATED BRIT. FOODS
	  	HEINEKEN	  	TEXAS INSTS.
	 WPP
	  	LINDE	  	LYONDELLBASELL INDS. CL.A
	 BAE SYSTEMS
	  	EADS	  	PRAXAIR
	 SHIRE
	  	PERNOD-RICARD	  	PRICELINE.COM
	 EXPERIAN
	  	FRANCE TELECOM	  	YUM! BRANDS
	 PEARSON
	  	ASML HOLDING	  	ILLINOIS TOOL WORKS
	 CRH
	  	DEUTSCHE POST	  	HEWLETT-PACKARD
	 WOLSELEY
	  	PHILIPS ELTN. KONINKLIJKE	  	EATON
	 KINGFISHER
	  	CONTINENTAL	  	THOMSON REUTERS (NYS)
	 SMITH & NEPHEW
	  	SAINT GOBAIN	  	CARNIVAL
	 BURBERRY GROUP
	  	ESSILOR INTL.	  	JOHNSON CONTROLS
	 INTERTEK GROUP
	  	ADIDAS	  	PPG INDUSTRIES
	 JOHNSON MATTHEY
	  	LAFARGE	  	CUMMINS
	 SMITHS GROUP
	  	CARREFOUR	  	ADOBE SYSTEMS
	 AGGREKO
	  	SAFRAN	  	CORNING

  
 Page 19 

					
	 STERLING COMPARATOR GROUP
	  	 EURO COMPARATOR GROUP
	  	 US DOLLAR COMPARATOR GROUP

	 ICTL. HTLS. GP.
	  	MICHELIN	  	HJ HEINZ
	 CARNIVAL
	  	FRESENIUS	  	ALEXION PHARMS.
	 WEIR GROUP
	  	RENAULT	  	SPECTRA ENERGY
	 REXAM
	  	AKZO NOBEL	  	DELL
	 GKN
	  	HENKEL PREF.	  	AIR PRDS. & CHEMS.
	 G4S
	  	AHOLD KON.	  	BROADCOM ‘A’
	 TATE & LYLE
	  	DASSAULT SYSTEMES	  	MOSAIC
	 IMI
	  	SODEXO	  	PACCAR
	 INTL. CONS. AIR. GP. (CDI)
	  	PUBLICIS GROUPE	  	TE CONNECTIVITY
	 BUNZL
	  	BUREAU VERITAS INTL.	  	BECTON DICKINSON
	 CRODA INTERNATIONAL
	  	ALSTOM	  	MCGRAW-HILL
	 TUI TRAVEL
	  	SOLVAY	  	AGILENT TECHS.
	 MEGGITT
	  	WOLTERS KLUWER	  	ESTEE LAUDER COS. ‘A’
	 INFORMA
	  	LAGARDERE GROUP	  	APPLIED MATS.
	 DAILY MAIL ‘A’
	  		  	TYCO INTERNATIONAL
	 UBM
	  		  	DUN & BRADSTREET DEL.
		  		  	WILEY JOHN & SONS ‘A’
		  		  	FAIR ISAAC

 6.6 Any changes in the comparator groups as a result of mergers, demergers, delistings or other corporate events over the
Performance Period will be treated in accordance with the methodology agreed by the Committee at its sole discretion from time to time. In determining the methodology to be applied, the Committee will have due regard to market practice and will
apply its agreed methodology in an appropriate manner. 
 6.7 The TSR ranking against the US Dollar Comparator Group will be calculated by reference to the
TSRs of the RE PLC ADRs and the RE NV ADRs over the relevant period of measurement. 
 6.8 The number of Shares in each third of the TSR Tranche which Vest
will be calculated as follows and will be added together to determine the total number of Shares within the TSR Tranche which are capable of Vesting: 
  

					
	 Percentile TSR ranking within the

relevant TSR Percentile comparator group
	  	Vesting percentage of each third of
the TSR Tranche	 
	 Below Median (below 50th percentile)
	  	 	0	% 
	 Median (50th percentile)
	  	 	30	% 
	 60th percentile
	  	 	58	% 
	 Upper quartile (equal to or greater than 75th percentile)
	  	 	100	% 

 6.9 Vesting is on a straight-line basis for ranking between median and upper quartile. 

6.10 The averaging period applied for TSR measurement purposes is the six months before the start of the Performance Period and the last six months of the
Performance Period. 

  
 Page 20 

 The ROIC Measure 

7.1 The Vesting of one third of the Award relates to the percentage return on invested capital of the combined businesses of the Qualifying Companies. Vesting
relates to the percentage ROIC for the last financial year of the relevant Performance Period. The portion of an Award subject to the ROIC Measure is referred to as the ‘ROIC Tranche’. 

7.2 The following definitions are relevant for ROIC: 
  

	 	(i)	Invested capital = arithmetic average of the opening and closing capital employed for the financial year with all cumulative amortisation and impairment charges for acquired intangible assets and goodwill added
back and excluding all the gross up to goodwill in respect of deferred tax liabilities established on the acquisition of intangible assets. In addition, any exceptional restructuring and acquisition integration charges (net of tax) are capitalised
for these purposes and changes in exchange rates and movements in the net pension deficits are excluded. 

  

	 	(ii)	Return = adjusted operating profit for the combined businesses of the Qualifying Companies before amortisation and impairment of acquired intangible assets and goodwill, exceptional restructuring and acquisition
integration charges, after applying the effective rate of tax used for adjusted earnings calculations and using exchange rates to match those used in the calculation of invested capital. 

In order to ensure that the performance score achieved is a fair reflection of underlying business performance, the Committee retains discretion to determine
the treatment of major disposals and acquisitions which require board approval. Any significant adjustments made to the final performance score will be disclosed to Shareholders. 

7.4 The number of Shares in the ROIC Tranche which are capable of Vesting will be determined as follows: 

 

					
	 Percentage ROIC for the last financial

year of the Performance Period
	  	Vesting percentage of
ROIC Tranche	 
	 Below 11.2%
	  	 	0	% 
	 11.2%
	  	 	33	% 
	 11.45%
	  	 	52.5	% 
	 11.7%
	  	 	65	% 
	 11.95%
	  	 	75	% 
	 12.2%
	  	 	85	% 
	 12.45%
	  	 	92.5	% 
	 12.7% or above
	  	 	100	% 

 7.5 Vesting is on a straight-line basis for performance between the stated ROIC percentages. 

The EPS Measure 
 8.1 The Vesting of one third of the
Award relates to the average growth in Adjusted Earnings per Share per annum at constant currencies of the Qualifying Companies measured over the Performance Period. The portion of the Award subject to the EPS Measure is referred to as the ‘EPS
Tranche’. 

  
 Page 21 

 8.2 The following definitions apply in respect of Adjusted EPS: 

 

	 	(i)	Adjusted EPS Growth = the arithmetic mean of the growth in Adjusted EPS at constant currencies achieved by the Qualifying Companies over a relevant financial year; 

 

	 	(ii)	Average Adjusted EPS Growth = the average of the annual Adjusted EPS Growth over the relevant period of measurement; 

  

	 	(iii)	Adjusted Earnings = adjusted reported earnings measured at constant currencies. Adjustments include amortisation and impairment of acquired intangible assets and goodwill, exceptional restructuring and
acquisition integration charges, gains/losses on business disposals and other non-operating items and tax rate anomalies (principally deferred tax); 

  

	 	(iv)	Adjusted Earnings Per Share = Adjusted Earnings divided by the Number of Shares; 

  

	 	(v)	Number of Shares = weighted average number of shares in issue excluding shares held in treasury or by the Reed Elsevier Group plc Employee Benefit Trust; and 

 

	 	(vi)	Constant currencies = refers to measurement at constant rates of exchange using the prior full year average and hedge rates. 

8.3 The number of Shares in the EPS Tranche which are capable of Vesting will be determined as follows: 

 

					
	 Average Adjusted EPS Growth
	  	Vesting percentage of
EPS Tranche	 
	 Below 5%
	  	 	0	% 
	 5%
	  	 	33	% 
	 6%
	  	 	52.5	% 
	 7%
	  	 	65	% 
	 8%
	  	 	75	% 
	 9%
	  	 	80	% 
	 10%
	  	 	92.5	% 
	 11% or above
	  	 	100	% 

 8.4 Vesting is on a straight-line basis for performance between the stated Average Adjusted EPS Growth percentages. 

Determining satisfaction of targets at end of Performance Period 

9.1 Following the end of the Performance Period (or as otherwise required under the Rules) the Committee will: 

 

	(a)	calculate and confirm with the auditors the Average Adjusted EPS Growth and ROIC in respect of the relevant period of measurement; and 

  
 Page 22 

	(b)	arrange for a reputable provider of such information to calculate and report to the Committee on the TSR performance. If at the end of the Performance Period (or at such earlier date as may be required under the Rules),
any of the companies in the comparator groups have undergone a change in circumstances (such as delisting, the cessation of trading or merger with another company), the Committee may determine the appropriate treatment for such companies in
accordance with its stated methodology for the purpose of determining their TSR and TSR ranking. 

 Adjustments 

10. The Committee may make such adjustments to the Performance Condition applicable to outstanding Awards as it considers appropriate to take account of any
factors which are relevant in the opinion of the Committee and in particular if there is an event which causes it to consider that the Performance Condition, or any part of it, is no longer a fair measure of performance. The amended Performance
Condition will not be materially less or more challenging than the one originally set. 
 11. The Committee has discretion to adjust the definition or
method of calculation of Adjusted EPS and ROIC (or any other applicable term or measure) as set out in this Appendix to take account of any changes in recognised accounting standards or practice, fiscal regime or capital structure, to ensure
consistent measurement and accountability. 
 12. Without prejudice to the generality of paragraphs 10, 11 and 13, the Committee may, in consultation with
the auditors, make the following adjustments in relation to the calculations to be carried out in accordance with this Appendix: 
  

	(a)	any adjustments it considers appropriate if an event occurs giving rise to an adjustment of Awards under Rule 15 of the Plan; 

  

	(b)	any adjustments it considers appropriate to the calculation of TSR for each of the companies in the comparator group to take account of local market factors; and 

 

	(c)	any adjustments it considers appropriate if there is any modification in the calculation of TSR or in relation to the relevant international accounting standard used to calculate EPS or ROIC. 

Overriding Power 
 13. In determining the level of Vesting
of an Award under the Plan, the Committee will take into account the overall business performance of the Qualifying Companies and the Group over the relevant performance period and any other factors that it considers appropriate and may modify the
Vesting level if it considers that such a modification would result in a fairer outcome. In exercising any such discretion, the Committee will have due regard to the value created for Shareholders and the underlying business performance. 

  
 Page 23 

 SCHEDULE 1 

Awards to US Participants 
 This Schedule
was adopted by the directors of Reed Elsevier Group plc on 25 April 2013. 
 The Rules of the Plan apply to Awards granted to US participants subject to
the modifications contained in this Schedule. 
  

	(A)	In this Schedule, terms shall have the same meaning as in Rule 1 of the Rules unless modified by this Schedule. 

  

	(C)	Retirement means, for the purposes of the application of Rule 8.2(c) of the Plan in relation to a US Participant, circumstances which the Committee determines on a case by case basis and in its absolute
discretion to constitute retirement (irrespective of whether or not applicable retirement eligible criteria have been met); 

  

	(D)	Normal Vesting—Release of Shares. Rule 6.3 shall have the additional requirement that if Shares are to be released to a US Participant, they shall in all instances be released no later than
March 15 of the year following the year in which Vesting occurs. 

  

	(E)	Dividend Equivalent—Cash Payment. Rule 7.2(c) shall have the additional requirement that any cash payment to the US Participant under this Rule shall in all instances be released no later than
March 15 of the year following the year in which Vesting occurs. 

  

	(F)	Dividend Equivalent—Shares in Lieu of Cash. Rule 7.3 shall have the additional requirement that if Shares are to be released to a US Participant in lieu of cash, they shall in all instances be
released no later than March 15 of the year following the year in which Vesting occurs. 

  

	(G)	Approved Leaver. Rule 8.2 shall have the additional requirement that the Shares released to a US Participant shall in all instances be transferred to the US Participant on or before March 15 of the
year following the year in which Vesting occurs. 

  

	(H)	Committee Adjustments. Rules 8.3 and 8.4 shall have the additional requirement that the Shares released to a US Participant or to a US Participant’s personal representative following the US
Participant’s cessation of employment by reason of death, injury, disability or ill-health shall in all instances be transferred to the US Participant or the Participant’s personal representative on or before March 15 of the year
following the year in which the US Participant’s cessation of employment occurs. 

  

	(I)	Limitation on Exercise Period. Notwithstanding anything contained in the Rules to the contrary, including without limitation, Rules 8.5 and 10.2, the exercise period for any Performance Share Option
granted to a US Participant may not be extended beyond the original exercise period established for such Performance Share Option. 

  
 Page 24 

	(J)	Award Rollover. Except to the extent consistent with the requirements of Section 409A of the United States Internal Revenue Code (“Code”) for the deferral of compensation without penalty or
additional tax or unless an exception to the application of Code Section 409A applies, Rule 13 shall not apply to any Award held by a US Participant if, at the time the election provided by Rule 13 is available to the US Participant, it has
Vested. In such case, the Rules of the Plan shall apply to the Award without regard to Rule 13. 

  

	(K)	Service Recipient Stock. The Shares underlying any Option granted to a US Participant will in all instances constitute “service recipient stock,” and will be issued or transferred by a Qualifying
Company that is, with respect to such US Participant, an “eligible issuer of service recipient stock” for purposes of Code Section 409A and the regulations promulgated thereunder. 

 

	(L)	Application of Code Section 409A. Although neither the Committee nor any member of the Group guarantees any particular tax treatment to a US Participant, awards granted pursuant to this Schedule are
intended to be exempt from Section 409A of the Code under the exception for short-term deferrals set forth in Section 1.409A-1(b)(4) of the United States Income Tax Regulations (which requires, in the case of an employer with a fiscal year
ending 31 December, that Shares in satisfaction of an award be transferred to the US Participant no later than March 15 of the calendar year following the calendar year in which the award is no longer subject to a substantial risk of
lapsing) and shall be limited, construed and interpreted in accordance with such intent. 

  

	(M)	Withholding. Notwithstanding anything contained herein to the contrary, all Share releases and cash payments to US Participants contemplated hereunder shall be subject, to the extent applicable, to all
applicable tax and withholding rules. 

  

	(N)	Effective Date. This Schedule will be effective on the Adoption Date. 

  
 Page 25 

 SCHEDULE 2 

Plan applicable to Elsevier Reed Finance BV 

If the Committee wishes to grant Awards to employees of Elsevier Reed Finance BV (ERF), or to employees of companies under the Control of ERF,
it may grant Awards pursuant to this Schedule and the following provisions will apply. 
  

	(A)	The Rules of the Plan will apply to the grant of Awards under this Schedule, subject to the modifications contained in the following paragraphs. 

 

	(B)	In this Schedule, terms will have the same meaning as in Rule 1 of the Rules unless modified by this Schedule. 

  

	(C)	The definition of Group will be construed as including ERF and every company which is under the Control of ERF. 

  

	(D)	Rule 16 will be amended so that it applies in respect of an Employees’ Share Scheme established by RE PLC, the Company or ERF. 

  

	(E)	Awards will not be granted under this Schedule without the agreement of the supervisory board of ERF. 

  
 Page 26 

 SCHEDULE 3 

Cash Alternative 
 If deemed necessary in
order to ensure compliance with tax, regulatory or legal country specific requirements (e.g. exchange control and securities laws) in the countries in which the Plan operates then, notwithstanding any provision to the contrary in these Rules: 

 

	(A)	The Committee may decide to satisfy an Award by paying to the Participant an amount equal to the market value (as determined in its discretion) of the number of Shares which would otherwise be issued or transferred
following vesting or exercise (as applicable) or an amount determined on such other reasonable basis as the Committee may decide (which could for example, allow for the deduction of any applicable expenses). 

 

	(B)	The Committee may grant an Award on the basis that it will be satisfied in cash, as opposed to Shares, as set out in (A) above. 

Unless the Committee determines otherwise, the Rules will apply as if any Award granted or to be satisfied pursuant to this Schedule involves a right to, or
interest in, Shares for the purposes of determining whether Dealing Restrictions are in place at the Date of Grant, Vesting, exercise, release or surrender of any such Award. 

  
 Page 27

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