Macquarie Group Limited — Governance Information 2007

Nov 1, 2007

MACQUARIE GROUP LIMITED

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A.C.N. 122 169 279

RULES OF THE

HMRC APPROVED SUBPLAN OF THE

MACQUARIE GROUP

EMPLOYEE SHARE OPTION PLAN

MACOUARIE GROUP LIMITED

A.C.N. 122 169 279

RULES OF THE HMRC APPROVED SUBPLAN OF THE MACQUARIE GROUP EMPLOYEE SHARE OPTION PLAN

INTERPRETATION AND OBJECT $\mathbf{1}$ .

$1.1$ Definitions

In the UK Subplan, unless the context otherwise requires:

"Appendix Rules" means the rules of the UK Subplan;

"Associated Company" the definition of "Associated Company" in the Plan Rules shall be replaced by the following definition:-

A company is an "Associated Company" of another company at a given time if, at that time or at any other time within one year previously:-

• one has control of the other; or $(a)$
• both are under the control of the same person or persons; $(b)$

(and the question whether a person controls a company shall be determined in $\frac{1}{2}$ accordance with section 416(2) to (6) of the Taxes Act);

or such other definition as shall be ascribed to such term under Paragraph 35 of Schedule $4:$

The definition of "ASX" in the Plan Rules shall apply to the UK Subplan;

The definition of "Bid Period" in the Plan Rules shall apply to the UK Subplan;

The definition of "Board" in the Plan Rules shall apply to the UK Subplan;

The definition of "Business Day" in the Plan Rules shall apply to the UK Subplan;

The definition of "Change in Control" in the Plan Rules shall apply to the UK Subplan;

The definition of "Change in Control Period" in the Plan Rules shall apply to the UK Subplan;

The definition of "Committee" in the Plan Rules shall apply to the UK Subplan;

The definition of "Company" in the Plan Rules shall apply to the UK Subplan;

"Constituent Company" means the Company, any company under the Control of the Company or a jointly owned company (within the meaning of Paragraph 34 of Schedule 4) which is for the time being nominated by the Committee to be a Constituent Company;

"Control" shall have the meaning given by section 719 of ITEPA;

The definition of a "Controlled Company" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Corporations Act" in the Plan Rules shall apply to the UK Subplan;

"Deed of Grant" means a deed certifying the terms and conditions of the grant of Options to an Employee under the UK Subplan.

The definition of "Director" in the Plan Rules shall apply to the UK Subplan;

The definition of "Employee" in the Plan Rules shall be replaced by the following definition:-

"Employee" means:-

$\overline{1}$

• any full-time director employed by a Constituent Company required to devote $(a)$ not less than 25 hours per week (excluding meal breaks) to his duties, or
• any employee (other than one who is a director) of a Constituent Company, $(b)$

who is not precluded by Paragraph 9 of Schedule 4 from participating in the UK Subplan;

The definition of "Employment Event" in the Plan Rules shall be replaced by the following definition:-

"Employment Event" means, in respect of any Option, an event that occurs affecting the basis of employment of the Grantee before the Option may be exercised, as determined by the Committee in its absolute discretion at the date of grant,

The definition of "End Date" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Exercise Condition" in the Plan Rules shall be replaced by the following definition:-

"Exercise Condition" means, in respect of any Option, one or more conditions, which may include an objective performance criteria with respect to the Company and/or the Grantee, that must be met before the Option may be exercised, as determined by the Committee in its absolute discretion at the date of grant;

The definition of "Exercise Period" in the Plan Rules shall apply to the UK Subplan;

The definition of "Exercise Price" in the Plan Rules shall be replaced by the following definition:-

"Exercise Price" means the price payable on the exercise of the Option determined in accordance with Appendix Rule 2.4 (as adjusted under Appendix Rule 6);

The definition of "Forfeited Share" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Grantee" in the Plan Rules shall be replaced by the following definition:-

"Grantee" means, in respect of the Option, the Participant (or, where the context so requires, the Grantee's legal personal representatives in accordance with Appendix Rule $10.2$ ):

The definition of "Group" in the Plan Rules shall be replaced by the following definition:-

"Group" means the Company and:-

• any company that is a related body corporate of the Company ("related $(a)$ company"); or
• any other entity where the Company or a related company has a significant $(b)$ degree of influence on management or business decisions or a significant equity interest and which the Committee decides is a related company for the purposes of the Plan:

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"ITEPA" shall mean the United Kingdom Income Tax (Earnings and Pensions) Act 2003;

The definition of "Listed" in the Plan Rules shall apply to the UK Subplan;

The definition of "Listing Rules" in the Plan Rules shall apply to the UK Subplan;

"Market Value" means on any day:-

• in the event that Shares are listed on the ASX, the market value of a Share $(a)$ calculated using a method agreed with the HMRC Shares Valuations division prior to the date of grant, such method may include, but shall not be limited to, the weighted average price of Shares traded on ASX during the one week up to and including the date of grant of the Options (adjusted for cum-dividend trading and excluding certain special trades); or
• if the Shares are not quoted on the ASX, market value as determined in accordance $(b)$ with Part VIII of the United Kingdom Taxation of Chargeable Gains Act 1992 and agreed in advance with the HMRC Shares Valuation;

The definition of "Non-Disposal Period" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Notice of Withdrawal of Shares" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Option" in the Plan Rules shall be replaced by the following definition:-

"Option" means an option to subscribe, under the UK Subplan, for one fully paid Share (as adjusted under Appendix Rule 6);

The definition of "Option Period" in the Plan Rules shall be replaced by the following definition:-

"Option Period" means, in respect of an Option, subject to Appendix Rules 5.6 and 5.7, the period starting on the date on which the Company grants the Option and ending on such date as the Committee shall determine at the date of grant provided always that the Option Period shall not exceed ten (10) years from the date of grant;

The definition of "Participant" in the Plan Rules shall apply to the UK Subplan;

"PAYE Employer" means the Grantee's employer for the purposes of Part 11 of ITEPA;

"PAYE Liability" means the amount (if any) of:-

• $(a)$ income tax payable by deduction under Part 11 of ITEPA;
• primary Class 1 National Insurance Contributions; $(b)$
• all or such part (as may from time to time be agreed in writing between the Grantee and $(c)$ the Company (or the Grantee's employing company for NIC purposes)) of any secondary Class 1 National Insurance Contribution ("NIC") payable in respect of any gain which is treated as remuneration derived from the Grantee's employment for NIC purposes by virtue of Section 4(4)(a) of the United Kingdom's Social Security Contributions and Benefits Act 1992; or
• $(d)$ any other similar taxes or duties,

which a Constituent Company or an Associated Company would be required to account for to the HMRC or other taxation authority if a Grantee realised an Option gain.

The definition of "Permitted Trustee" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Plan" in the Plan Rules shall be replaced by the following definition

"Plan" means the Macquarie Group Employee Share Option Plan (including the HMRC Approved Subplan of the Plan) established in accordance with the Plan Rules;

The definition of "Plan Company" in the Plan Rules shall not apply to the UK Subplan;

"Plan Rules" means the rules of the Plan adopted by the Board on [30 August 2007], as amended from time to time;

The definition of "Relevant Participant" shall be replaced by the following definition:-

"Relevant Participant" means the Grantee;

The definition of "Restrictions" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Retirement" in the Plan Rules shall be replaced by the following definition:-

"Retirement" means retirement on or after the age of 65;

"Schedule 4" means Schedule 4 to ITEPA;

The definition of "Security Interest" in the Plan Rules shall not apply to the UK Subplan;

The definition of "Share" in the Plan Rules shall be replaced by the following definition:-

"Share" means an ordinary share in the Company (as adjusted under Appendix Rule 6) that satisfies the requirements of paragraph 16-20 of Schedule 4;

The definition of "Special Circumstances" in the Plan Rules shall not apply to the UK Subplan;

"Taxes Act" means the United Kingdom Income and Corporation Taxes Act 1988;

"UK Subplan" shall have the meaning in Appendix Rule 1.4;

The definition of "Vesting Period" in the Plan Rules shall be replaced by the following definition:-

"Vesting Period" means, in respect of an Option, the period specified as the Vesting Period for that Option at the date of grant;

$1.2$ General

• Plan Rules 1.2(a) to (i) shall apply to the UK Subplan; $(a)$
• Plan Rules 1.2 (i) shall not apply to the UK Subplan; $(b)$
• Plan Rules 1.2(k) shall apply to the UK Subplan; $(c)$
• Plan Rules 1.2(1) and (m) shall apply to the UK Subplan. $(d)$
• Headings Plan Rule 1.3 shall apply to the UK Subplan. $1.3$

$1.4$ Object of the UK SubPlan

In addition to the object of the Plan as described in Plan Rules 1.4, the purpose of this appendix to the Plan ("the UK Subplan") is to obtain HMRC approved status under Schedule 4 for Options granted under the UK Subplan. The purpose of the UK Subplan is to enable the Company to grant HMRC approved Options to Employees to enable such employees to enjoy the beneficial tax treatment of such Options.

The Committee has established the UK Subplan in accordance with Plan Rule 8.1(b) in respect of Employees. The UK Subplan shall be read as a continuation of the Plan and, except as specifically provided in the Appendix Rules, all of the Plan Rules are incorporated in the UK Subplan.

In respect of Options granted under the UK Subplan, the UK Subplan shall prevail in the event of any conflict between the Plan and the UK Subplan.

For the purposes of the UK Subplan, where any Plan Rule refers to a clause in the Plan (unless otherwise indicated) such Plan Rule (or clause) shall be read and construed as if it also refers to the Appendix Rules of UK Subplan.

$2.$ ADMINISTRATION

• Committee's authority Plan Rule 2.1 shall apply to the UK Subplan. $2.1$
• Total number of Shares Plan Rule 2.2 shall apply to the UK Subplan, and Options granted $2.2$ under the UK Subplan shall count towards the limits set out in that Plan Rule.
• Determination of eligibility Plan Rule 2.3 shall be replaced by this Appendix Rule 2.3:- $2.3$

The Committee may at any time in its absolute discretion select an Employee to participate in the UK Subplan and grant an Option to that Employee in accordance with the UK Subplan.

Determination of price - Plan Rule 2.4 shall be replaced by this Appendix Rule 2.4:- $2.4$

The Committee shall at the date of grant of an Option determine the Exercise Price for that Option, which shall not be less than the Market Value of a Share at that date.

• Disputes Plan Rule 2.5 shall apply to the UK Subplan. 2.5
• Directions from Board Plan Rule 2.6 shall apply to the UK Subplan. $2.6$
• Set-off Plan Rule 2.7 shall not apply to the UK Subplan. $2.7$

In the event that any PAYE Liability becomes due on the exercise of an Option, the Option may not be exercised unless:

• the Company, the Grantee's employing company at the date of exercise or the PAYE $(a)$ Employer (as appropriate) is able to deduct an amount equal to the whole of the PAYE Liability from the Grantee's net pay for the next pay period; or
• the Grantee has paid to the Company, the Grantee's employing company at the date of $(b)$ exercise or the PAYE Employer (as appropriate) an amount equal to the PAYE Liability; $\overline{or}$
• the sum of the amount that the Grantee has paid to the Company, the Grantee's $(c)$ employing company at the date of exercise or the PAYE Employer (as appropriate) in respect of that company's obligation to satisfy the PAYE Liability and the total amount that the Company, the Grantee's employing company at the date of exercise or the PAYE Employer (as appropriate) is able to deduct from the Grantee's net pay for the next pay period is equal to or more than the PAYE Liability; or
• the Grantee has given irrevocable instructions (in a form approved by the HMRC) to the $(d)$ Company's brokers (or any other person acceptable to the Company) for the sale of sufficient shares acquired on the exercise of the Option to realise an amount not less than the PAYE Liability and the payment of the PAYE Liability to the Company, the Grantee's employing company at the date of exercise or the PAYE Employer (as appropriate).

Modification of Vesting Period, Exercise Period and Exercise Condition - Plan Rule 2.8 $2.8$ shall be replaced by this Appendix Rule 2.8:-

• Where the Grantee ceases, or gives notice that he intends to cease, to be an employee of $(a)$ a Group company before the end of the Vesting Period, the Option shall lapse to the extent it has not vested on the date of cessation of employment in accordance with Appendix Rule 5.6(c)(ii). For the avoidance of doubt, the provisions of Appendix Rule 10.2 and Appendix Rule 10.3 shall apply to the Grantee's Option to the extent it has vested on or prior to the date of cessation of employment.
• If, after the Committee has determined any Exercise Conditions, events occur which $(b)$ cause the Committee to consider that any of the existing Exercise Conditions have become unreasonable, unfair or impractical, it may, in its discretion (provided such discretion is exercised fairly and reasonably) amend, relax or waive such Exercise.

Conditions provided that any Exercise Conditions which are amended or relaxed will be no more difficult to satisfy than when they were originally imposed or last amended or relaxed.

Limit on the value of Option granted 2.9

Notwithstanding any other provisions of the UK Subplan, any Option granted to an Employee shall be limited and take effect so that, immediately following such grant, the aggregate Market Value of all the Shares which he or she may acquire on the exercise in full of all unexercised options then held by him or her under the UK Subplan and any other share option plan (other than a savings-related share option plan) approved by the HMRC under Schedule 4 (or, where the context so requires, any other share option plan (other than a savings-related share option plan) approved before 6^th April 2003 under Schedule 9 to the Taxes Act) and adopted by the Company or any Associated Company shall not exceed or further exceed £30,000 (thirty thousand pounds) or such other amount as shall from time to time be specified in Paragraph $6(1)$ of Schedule 4.

For the purposes of this Appendix Rule, the Market Value of Shares shall be their Market Value at the date or dates on which the relevant Options were granted or such earlier time or times as may be agreed with the HMRC. For the purposes of determining the Market Value of the Shares in Pound $(f)$ Sterling, the Australian Dollar $(f)$ value of the Shares shall be converted using the exchange rate for the day prior to the date or dates on which the relevant Options were granted, or such earlier time or times as may have been agreed with the HMRC for the Market Value.

$\overline{3}$ . METHOD OF INVITATION

• $3.1$ Invitations – Plan Rule 3.1 shall not apply to the UK Subplan.
• $3.2$ Directors – Plan Rule 3.2 shall not apply to the UK Subplan.
• $3.3$ Grantee may apply - Plan Rule 3.3 shall not apply to the UK Subplan.

$\overline{4}$ . APPLICATION FOR OPTIONS

• $4.1$ Invitation – Plan Rule 4.1 shall not apply to the UK Subplan.
• $4.2$ Grant – Plan Rule 4.2 shall be replaced by this Appendix Rule 4.2.

The grant of the Option shall be certified by a Deed of Grant, in a form approved by the HMRC, which shall include:-

• the Exercise Price (as determined in accordance with Appendix Rule 2.4) and any $(a)$ Exercise Condition for each Option;
• the Vesting Period for each Option (which must not end before the first anniversary of $(b)$ the date that the Company grants the Option);
• the Option Period for each Option. $(c)$
• $4.3$ Register - Plan Rule 4.3 shall [not] apply to the UK Subplan.
• Confirmation of grant Plan Rule 4.4 shall [not] apply to the UK Subplan. 4.4

5. OPTION TO SUBSCRIBE

$5.1$ Exercise – Plan Rule 5.1 shall be replaced by this Appendix Rule $5.1$ :

The Grantee may exercise any Option granted to him under Appendix Rule 4.2 or transferred to the Grantee under Appendix Rule 10.2 only:-

• during an Exercise Period for the Option; $(a)$

• $(b)$ if all Exercise Conditions applying to that Option at the time of Exercise have been met;

• by giving a notice and doing all the other things required by Appendix Rule 5.2 during $(c)$ that time; and

• if the Grantee at the same time either:- $(d)$
• exercises a number of Options so that the Company will issue a minimum of a $(i)$ number of Shares or multiple of a number of Shares that the Committee determines; or
• exercises all the Options granted or transferred to the Grantee which the Grantee is $(ii)$ then entitled to exercise:

The exercise of an Option does not prevent the exercise of any other Option.

Notwithstanding any of the provisions of the Plan or the UK Subplan, no Option may be exercised by a Grantee at any time when he is, or by the personal representatives of a Grantee who at the date of his death was, prohibited from such exercise by virtue of the provisions of Paragraph 9 of Schedule 4.

Notice – Plan Rule 5.2 shall be replaced by this Appendix Rule 5.2: 5.2

To exercise an Option the Grantee must give a written notice to the Company specifying that the Grantee exercises the Option. The notice must be accompanied by payment of the full amount of the Exercise Price (in accordance with Appendix Rule 5.3) and the PAYE Liability (in accordance with Appendix Rule 2.7).

Exercise of an Option is only effective when the Company receives full value for the full amount of the Exercise Price and PAYE Liability.

• Payment Plan Rule 5.3 shall apply to the UK Subplan. 5.3
• 5.4 Allotment - Plan Rule 5.4 shall apply to the UK Subplan.
• Share allotted upon exercise of Option Plan Rule 5.5 shall apply to the UK Subplan. $5.5$
• Lapse Plan Rule 5.6 shall be replaced by this Appendix Rule 5.6:-5.6

Each Option lapses on the earlier of the following times:-

• on exercise of the Option under Appendix Rule 5.1; $(a)$
• if the Option is not exercised under Appendix Rule 5.1 during the Option Period, at the $(b)$ end of the Option Period;
• if the Grantee:- $(c)$

$\ddot{\phantom{a}}$

• dies, at the end of the period specified in Appendix Rule 10.2; $(i)$
• ceases to be an employee of a Group company during the Vesting Period at the $(ii)$ date of cessation of employment; or

• subject to Appendix Rule 10.3, ceases to be an employee of a Group company $(iii)$ after the Vesting Period and the Option is not exercised within six months after that happens, at the end of that six month period;

• if the Committee becomes aware of circumstances which, in the reasonable opinion of $(d)$ the Committee, indicate that the Grantee has acted fraudulently, dishonestly or in a manner which is in breach of his or her obligations to a Group company, on the date the Committee reaches such an opinion, provided always that the Committee may at its discretion (provided that such discretion is exercised fairly and reasonably) determine that the Option shall not lapse; or

• if the Company commences to be wound up, on the date on which such proceedings are $(e)$ commenced.
• Proportionate lapse Plan Rule 5.7 shall be replaced by this Appendix Rule 5.7:-5.7

Where a Grantee's Options are issued subject to an Employment Event specified at the date of grant, a proportion of those Options, as specified at the date of grant, will lapse upon the occurrence of that Employment Event in respect of the Grantee except with the written approval of the Committee in its absolute discretion (provided that such discretion is exercised fairly and reasonably).

• Listing on ASX Plan Rule 5.8 shall apply to the UK Subplan. 5.8
• No additional rights Plan Rule 5.9 shall apply to the UK Subplan. 5.9

ADJUSTMENTS 6.

• The provisions of Plan Rule 6.1 and Plan Rules 6.4 to 6.12 shall apply to the UK Subplan $6.1$ provided that any variation to:
• the number of Shares comprised in an Option; $(a)$
• their Exercise Price; or $(b)$
• where an Option has been exercised but no Shares have been allotted or transferred in $(c)$ satisfaction of such exercise, the number of Shares to be so allotted or transferred and their Exercise Price,

under those Plan Rules, shall first be approved by the HMRC before the variation is made. For the avoidance of doubt, the provisions of Plan Rules 6.2 to 6.3 shall not apply to the UK Subplan.

DURATION OF THE UK SUBPLAN 7.

Discretionary -- Plan Rule 7.1 shall be replaced by this Appendix Rule 7.1:- $7.1$

The UK Subplan shall continue in operation until the Committee decides to terminate or discontinue it.

• Suspension Plan Rule 7.2 shall apply to the UK Subplan. $7.2$
• No prejudice -- Plan Rule 7.3 shall apply to the UK Subplan. $7.3$

AMENDMENT OF THE PLAN 8.

By the Committee - Plan Rule 8.1 shall be replaced by this Appendix Rule 8.1:-8.1

Subject to Appendix Rule 8.2, the Committee may at any time and from time to time by resolution amend all or any of the Plan Rules or Appendix Rules, provided that, for as long as the UK Subplan shall remain approved by the HMRC, any such amendment to a key feature of the Plan or to a key feature of the UK Subplan shall first be approved by the HMRC. For these purposes, a "key feature" is any provision of the Plan or the UK Subplan necessary to satisfy the requirements of Schedule 4.

Listing Rules - Plan Rule 8.2 shall apply to the UK Subplan. 8.2

NOTICES AND CORRESPONDENCE $\mathbf{Q}$

Instructions by Participants - Plan Rule 9.1 shall be replaced by this Appendix Rule 9.1: $9.1$

For the purposes of these rules, the Company, the Board and the Committee is entitled to regard any notice, direction or other communication given or purported to be given by or on behalf of a Grantee or a Relevant Participant of a Grantee as valid. Any notice, direction or other communication given or purported to be given by or on behalf of a Grantee or a Relevant Participant of a Grantee or any other person under these rules to the Company, the Board or the Committee is duly given only if actually received by the Company, the Board or the Committee (as the case may be).

Notices - Plan Rule 9.2 shall be replaced by this Appendix Rule 9.2: 9.2

Any notice, certificate, consent, approval, waiver or other communications given by the Company, the Board or the Committee is deemed to have been duly given if:

• sent by electronic mail or delivered by hand; or $(a)$
• sent by ordinary prepaid mail, $(b)$

and is deemed to have been served:

• if sent by electronic mail or delivered by hand, at the time of sending or delivery; or $(c)$
• if posted, three Business Days (or, if posted to a Participant's address outside Australia, $(d)$ seven Business Days) after the date of posting.

Delivery, transmission and postage is to the address of any Grantee or to a Relevant Participant of any Grantee as indicated on the Application Form, any other address as the Company, the Board, the Committee or any Grantee may notify to the other, or the address of the place of business at which the Grantee or a Relevant Participant of a Grantee performs the whole or substantially the whole of the duties of his or her office or employment.

TRANSFER OF THE OPTION $10.$

No transfer - Plan Rule 10.1 shall be replaced by this Appendix Rule 10.1:- $10.1$

Each Option is personal to the Grantee and is not transferable, transmissible, assignable or chargeable, except in accordance with Appendix Rule 10.2.

Death - Plan Rule 10.2 shall be replaced by this Appendix Rule 10.2:-10.2

If the Grantee dies after the Vesting Period and before the end of the Option Period, the Option may be exercised by the Grantee's legal personal representatives in accordance with Appendix Rule 5.1 within 12 months of the date of the Grantee's death, and to the extent necessary for this to occur, the Option may be transferred to the legal personal representatives and does not lapse.

Termination of Employment 10.3

If the Grantee ceases to be an employee of a Group company after the Vesting Period and before the end of the Option Period by reason of injury, disability, redundancy, Retirement, the transfer of the undertaking or part-undertaking in which the Grantee is employed to a person other than a Group company, or the company by which the Grantee is employed ceasing to be a Group company, the Option (to the extent it has not been exercised) will lapse at the earlier of:-

• six months from the date of cessation of employment, and $(a)$
• the end of the Option Period. $(b)$

The Committee may in its absolute discretion, provided that such discretion is exercised fairly and reasonably, decide that the Option does not lapse under Appendix Rule 5.6(c)(iii) but lapses at a later time specified by notice to the Grantee. In making a decision under this Appendix Rule, the Committee may consider any relevant matter (including, without limitation, whether the Grantee ceased to be an Employee by reason of Retirement (or early retirement), ill-health, accident, redundancy, the transfer of the undertaking or part-undertaking in which the Option Holder is employed to a person other than a Group company, or the company by which the Option Holder is employed ceasing to be a Group company).

RESTRICTIONS ON SHARES ISSUED ON EXERCISE OF THE OPTION 11.

• Plan Rules 11.1 to 11.20 shall not apply to the UK Subplan. $11.1$
• Plan Rule 11.21 shall apply to the UK Subplan. 11.2

HMRC Approved Exchange of Options $12$

Notwithstanding the provisions of the Plan or the UK Subplan, if any company ("the Acquiring Company"),

• obtains Control of the Company as a result of making: $(a)$
• a general offer to acquire the whole of the issued ordinary share capital of the $(i)$ Company which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or
• a general offer to acquire all the shares in the Company which are of the same $(ii)$ class as the Shares;
• obtains Control of the Company in pursuance of a compromise or arrangement $(b)$ sanctioned by the court under section 425 of the Companies Act 1985 (or closely comparable overseas legislation as agreed with HMRC); or
• becomes bound or entitled to acquire shares in the Company under sections 428 to 430 $(c)$ of the Companies Act 1985 (or closely comparable overseas legislation as agreed with HMRC);

any Participant holding an Option may at any time within such periods as are set out in Paragraph 26(3) of Schedule 4, by agreement with the Acquiring Company, release his Option ("the Old Option") in consideration of the grant to him of a new option ("the New Option")

which is equivalent to the Old Stock Option (by virtue of satisfying the requirements of Part 6 of Schedule 4) but relates to shares in a different company (whether the Acquiring Company itself or some other company falling within Paragraph 16(b) or (c) of Schedule 4).

Where any New Options are granted pursuant to this Appendix Rule 12, they shall be regarded for the purposes of the subsequent application of the provisions of this UK Subplan as having been granted at the time when the corresponding Old Options were granted and, with effect from the date on which the New Options are granted:

• save for the definitions of "Constituent Company" in Appendix Rule 1.1, references to $(a)$ "the Company" shall be construed as being references to the Acquiring Company or such other company to whose shares the New Option relate; and
• references to "Shares" (including the definition in Appendix Rule 1.1) shall be $(b)$ construed as being references to shares in the Acquiring Company or shares in such other company to which the New Options relate.

SCHEDULE 1 - SUBJECT TO APPENDIX RULE 6, SCHEDULE 1 SHALL APPLY TO THE UK SUBPLAN

SCHEDULE 2 SHALL NOT APPLY TO THE UK SUBPLAN