RULES OFTHETALKTALK TELECOM GROUP PLCSAVINGSRELATED SHARE OPTION SCHEM - PDF document

RULES OFTHETALKTALK TELECOM GROUP PLCSAV
RULES OFTHETALKTALK TELECOM GROUP PLCSAVINGSRELATED SHARE OPTION SCHEMEApproved by shareholders of the Company on [ 2 RULES OF HE TALKTALK TELECOM GROUP PLCSAVINGSRELATED SHARE OPTION SCHEMEINTERPRETATION AND CONSTRUCTION1.1DefinitionsIn this Plan, the following words and expressions shall bear, unless the context otherwise requires, the meanings set out below:“Appropriate Period”the meaning given by paragraph 38(3) of Schedule 3;“Associated Company”an associated company of the Companywithin the meaning of the expression in paragraph 47 of Schedule 3;“Board”the board of directors for the time being of the Company or a duly authorised committee thereof provided that if any person obtains Control of the Company, the Board shall consist of the members of the Board immediately prior to such Control being obtained;“Bonus”any sum payable to an Option Holder by way of a terminalbonus on completion of a Sharesave Contract; “Bonus Date”in respect of any Option, the earliest date on which a Bonus becomes payable under therelated Sharesave Contract beingthe Maximum Bonus or the Standard Bonus as the case may be;CompanyTalkTalk Telecom Group PLC(registered in England and Wales under No. 5890“Constituent Company”(a)the Company; (b)any other company which is under the Control of the Company and is a Subsidiary of the Company, except one which the Board has determined shall not be a Constituent Company; and(c)any Jointly Owned Company which is for the time being designated by the Board to be a Constituent Company provided that if any such Jointly Owned Company ceases to be a Jointly Owned Company, it shall immediately cease to be a Constituent Company unless as a consequence of such cessation it becomes under the Control of the Company;“Control”the meaning given by section of the Income Tax Act2007“Date of Invitation”the date on which the Grantorinvites applications for Options;“Dealing Day”any day on which the London Stock Exchange is open for the transaction of business;“Eligible Employee”any individual whoat the Date of Invitation(a)isa director or employee of a Constituent Companyon terms which, if he is a director, require him to devote at least 25 hours a week, to his duties (excluding meal breaks) and 3 (i)has such qualifying period(if any) of continuous service (being a period commencing not earlier than five years prior

to the Grant Date) as the Grantormay det
to the Grant Date) as the Grantormay determine; and(ii)is subject to income tax under ITEPA; or(b)any other individual who is nominated by the Grantoras a director or employee of a Constituent Company(or who is nominated as a member of a category of such directors or employees)“Employees’ Share Scheme”the meaning given by section of the Companies Act 2006“Grant Date”the date on which the Grantor grants an Option to an Eligible Employee;“Grant Period”the period of 42 days commencing on the day after any of the following:(a)the day on which the Plan is adopted by the Company; (b)the day on which the Plan is registeredwith HMRC;(c)the Dealing Day after the day on which the Company makes an announcement of its results for any period (or, where applicable, the Dealing Day after the end of a Market Value averaging period commencing on the date of such results);(d)any day on which the Grantor resolves that exceptional circumstances exist which justify the grant of Options;(e)the day on which changes are announced, effected or made to thelegislation or regulations affecting share option schemes registeredwithHMRC;(f)the date of commencement of an Eligible Employee’s employment with a Constituent Company provided that the Eligible Employee is not already employed by a Constituent Company, but only in respect of that Eligible Employee;(g)any day on which a new Sharesave Contract prospectus is announced or takes effect; or(h)the Dealing Day after the day on which the Company announced its preliminary statement of the annual results for the financial year 2020subject to Rule 4.9, provided that any Options so granted were made: (i) conditional on the approval of these Rules at the Company’s Annual General Meeting 2020; and (ii) otherwise in accordance with these Rules in all other materiarespectsprovided that if the Grantor cannot grant Options due to primary or secondary legislation, regulations or government directive or due to any code adopted by the Company (including by reason of its capital being listed on a stock exchange) the relevant Grant Period shall be 42 days commencing on the day after the restriction is lifted (or, where 4 applicable, the Dealing Day after the end of a Market Value averaging period commencing on the date such restriction is lifted)“Grantor(a)the Board (acting on behalf of he Company) or (b)the Trustees acting on the recommendationor

with the consent of the Boardas the case
with the consent of the Boardas the case may be;“Group Member”he Company, any Constituent Company and a body corporate which is a Subsidiary of the Company’s holding company or any other body corporate nominated by the Board for this purpose which is not under the control of any single person, but is under the control of two or more persons, one of whom being the Company or the Company’s holding company and in relation to which the Company, or, as the case may be, the Company’s holding company is able (whether directly or indirectly) to exercise 20% or more of its equity voting rights;“HMRC”UK HM Revenue & Customs“ITEPA”the Income Tax (Earningsand Pensions) Act 2003;“Jointly Owned Company”a company owned by the Company jointly with another person (within the meaning of paragraph 46(5) of Schedule 3) and any company controlled by such jointly owned company, in each case to which HMhas confirmed the Plan may extend“Listing”the first date on which:(a)the listing of the Shares on the Official List becomes effective; or(b)the granting of an application by the Company for the dealing in the Shares on any other Recognised Exchange whereby such Shares can be freely traded and the approval for such dealings becomes effectivewhether such listing or admission to trading is effected by way of an offer for sale, a new issue of Shares, an introduction, a placing or otherwise;“Market Value”in relation to a Share on any day(a)if and so long as the Shares are listed on theOfficial Listat the discretion of the Board, either(i)their closing middle market quotation (as derived from the Daily Official List) on: (A) that Dealing Day; or (B) the immediately preceding Dealing Day; or(ii)the average of theSharesclosing middle market quotations over threeconsecutive Dealing Days immediately preceding either of the dates referred to in () above, provided that no such day or days may fall during any closed period (as determined by Article 19(11) of the Market Abuse Regulation) of the Company, any period in which there exists any matter which constitutes inside information in relation to the Company or prior to the date that any restriction on the 5 grant of Options under the Plan (as referred to in "Grant Period" above) is lifted;or(b)if paragraph (a) does not apply, the market value as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act

1992 and agreed in advance with the Sha
1992 and agreed in advance with the Shares of Assets Valuation division of the HMRC“Maximum Bonus”the Bonus payable two years after the completion of 60 Monthly Contributions under a fiveyear Savings Contract;“Maximum Contribution”e lesser of:(a)such maximum onthly ontribution as may be permitted pursuant to paragraph 25 of Schedule 3; or(b)such maximum onthly ontribution as may be determined from time to time by theGrantor“Member of a Consortium”the meaning given by paragraph 48(2) of Schedule 3;“Minimum Contribution”£5 or such other amount as the Grantor may determine from time to time but not exceeding the minimum monthly contribution specified in paragraph 25(3)(b) of Schedule 3;“Monthly Contributions”monthlycontributions agreed to be paid by an Option Holder under the Sharesave Contract;“Official List”the list maintained by the Financial Services Authority in accordance with section 74(1) of and for the purposes of Part VI of the Financial Services and Markets Act 2000;“Option Holder”a director or employee, or former director or employee, to whom an tion has been granted or (where the context so admits or requires) the personal representatives of any such person;“Option”a right to acquire Shares under the Plan which is either subsisting or (where the context so admits or requires) is proposed to begranted;“Option Price”the price per Share, as determined by the Grantor, at which an Eligible Employee may acquire Shares upon the exercise of an Option being not less than the higher of:(a)80 per cent of the Market Value of a Share on the Date of Invitation (or 80 per cent of the average Market Value of a Share on the Date of Invitation and the two immediately preceding Dealing Days or 80 per cent of the Market Value at such other time or times as may be determined by the Grantor and agreed in advance in writing with HM) provided that such Dealing Days shall be within the Grant Periodand(b)if the Shares are to be subscribed, their nominal valuesubject to any adjustment pursuant to Rule 6 “Plan”he TalkTalk Telecom Group PLCSavingsRelated Share Option Scheme in its present form or as from time to time amended in accordance with the provisions hereof;“Recognised Exchange”a recognised stock exchange within the meaning of section 1005 of the Income Tax Act 2007or a recognised investment exchange within the m

eaning of the Financial Services and Mar
eaning of the Financial Services and Markets Act 2000and, for the avoidance of doubt, this will include the AIM market operated by the London Stock Exchange PLC“Repayment”in relation to a Sharesave Contract, the aggregate of the Monthly Contributions which the Option Holder has made and subject to Rule 2.2(d)any onus due at the Bonus Date;“Rules”these rules together with any schedules or appendices to these rules;“Schedule 3”Schedule 3 to ITEPA“SchemeRelated Employment”the office or employment by reference to which an Option Holder is eligible to participate in the Plan within the meaning of paragraph 10 of Schedule 3;“Share”a share in the ordinaryshare capital of he Company which satisfies the conditions specified in paragraphs 1820 and 22 of Schedule 3;“Sharesave Contract”a contract under a certified SAYE savings arrangement(within the meaning of section 703(2)the Income Tax (Trading and Other Income) Act 2005certified withHMfor the purpose of Schedule 3and entered into in connection with the grant of an Option under the Plan“Standard Bonus”(a)for a threeyear SharesaveContract, the Bonus payable after completion of 36 Monthly Contributions; and(b)for a fiveyear SharesaveContract, the Bonus payable after completion of 60 Monthly Contributions“Subsidiary”the meaning given by section of the Companies Act 2006“Trustees”the trustees for the time being of any employee benefit trust established for the benefit of all or substantially all of the Eligible Employees1.2References in the Plan to any statutory provisions are to those provisions as amended, extended or reentered from time to time and shall include any regulations made thereunder.1.3Unless the context otherwise requires, references in the Plan to the singular shall include the plural (and vice versa), words importing a gender shall include every gender and references to a person shall include bodies corporate and unincorporated and vice versa.1.4Headings and captions are provided for reference only and shall not be considered as part of the PlanAPPLICATION FOR OPTIONS2.1Issue of InvitationsDuring a Grant Period, the Grantor may invite applications for Options from Eligible Employees. 7 2.2Contents of InvitationAny invitation to apply for Options shall be sent in writing to all Eligible Employees and shall include details of:(a)eligibility;(b)the OptionPriceor how it is to be

calculated(c)the Minimum Contribution p
calculated(c)the Minimum Contribution payable;(d)the Maximum Contribution payable;(e)whether the Eligible Employees may elect for a threefiveyear Sharesave Contract;(f)whether, for the purpose of determining the number of Shares over which an Option is to be granted, the Repayment under the Sharesave Contract is to be takenas including the aximum onus, the tandard onus, or no onus;and(g)the form of application and the date by which applications made pursuant to Rule 2.3must be received (being neither earlier than 14 days nolater than 2days after the Date of Invitation),and the Grantormay determine and include in the invitations details of the maximum number of Shares over which applications for Options are to be invited.2.3Application for Sharesave ContractApplications for Options must incorporate or be accompanied by an application for a Sharesave Contract.2.4Contents of ApplicationAn application for an Option shall be in writing or in electronic format and in such form as the Grantor may from time to time prescribe save that it shall provide for the applicant to state:(a)the Monthly Contributions (being a multiple of £1 and not less than the Minimum Contributionhe wishes to make;(b)that his proposed Monthly Contributions (when taken together with any monthly contributions he makes under any other Sharesave Contract) will not exceed the ximum Monthly Contributionpermitted pursuant to paragraph 25 of Schedule 3and(c)whether the Eligible Employee electfor a threefiveyearSharesave Contract2.5Provision for Scaling DownEach application for an Option shall provide that, in the event of excess applications, each application shall be deemed to have been modified or withdrawn in accordance with the steps taken by the Grantor to scale down applications pursuant to Rule 2.6Number of Shares Applied forEach application shall be deemed to be for an Option over the largest whole number of Shares which can be acquired at the OptionPrice with the expected Repayment at the Bonus Date under the Sharesave Contract entered into in connection with the Option. 8 2.7ltiple ApplicationsEligible Employees may apply for more than one Option in response to any invitation. However, where an Eligible Employee applies for more than one Option, he shall be deemed for the purposes of Rule to have applied for a single Option.SCALING DOWN3.1Process for Scaling DownIf valid applications are received for a total number of Shares in excess of any maximum num

ber of Shares determined by the Grantorp
ber of Shares determined by the Grantorpursuant to Rule 2.2, or any limitation under Rule , the Grantorshall scale down applications by taking, at its absolute discretion, any of the following steps until the number of Shares available equals or exceeds such total number of Shares applied forprovided always that in reducing the number of Shares applied for, any adjustments shall ensure that an Eligible Employee's Monthly Contribution remains a multipleof £1:(a)by treating any elections for the aximum onus as elections for the tandard onus and then, so far as necessary, by reducing the proposed Monthly Contributions pro rata to the excess over such amount as the Grantorshall determine for this purpose being not less than £5 and then, so far as necessaryselecting by lot; or(b)by treating each election for a onus as an election for no onus and then, so far as necessary, by reducing the proposed Monthly Contributions pro rata to the excess over such amount as the Grantor shall determine for this purpose being not less than £5 and then, so far as necessary, selecting by lot; or(c)by reducing the proposed Monthly Contributions pro rata to the excess over such amount as the Grantor shall determine for this purpose being not less than £5 and then, so far as necessary, selecting by lot.3.2Cancellation of OfferIf the number of Shares available is insufficient to enable an Option based on Monthly Contributions of £5 a month to be granted to each Eligible Employee making a valid application, the Grantor may, as an alternative to selecting by lot, determine in its absolute discretion that no Options shall be granted.3.3Modification of ProcessIf the Grantor so determines, the provisions in Rule3.1(a), 3.1(b)and 3.1(c)may be modified or applied in any manner as may be agreed in advance with the HMGRANT OF OPTIONS4.1Grant PeriodThe Grantor may grant Options only during a Grant Period, and no later than the tenth anniversary of the date of approval of the Planin general meeting.4.2Grant DateWithin 30 days, or if Rule applies42 days, of the earliest date by reference to which the Option Price is determined, the Grantor shall grant to each Eligible Employee who has submitted a valid application (within any applicable time limit), an Option over the largest whole number of Shares which can be 9 acquired at the Option Price with the expected Repayment (and any applicable Bonus) under that Eligible Employee’s Sharesave Contract at the

applicable Bonus Date4.3Persons to whom
applicable Bonus Date4.3Persons to whom Options may not be grantedNo Option shall be granted to any person if at the Grant Date that person shall have ceased to be an Eligible Employeeat the Grant DateAny Option granted to such a person is void.4.4Issue of Option Certificate(a)As evidence of the grant of an Option, he Companyshall execute a document, which may be in respect of an individual Option or any number of Options granted at the same time. This document shall be sealed or executed in such a manner as to take effect in law as a legally binding obligation of he Company(b)As soon as practicable after the Grant Date, he Companyshall issue to each Option Holder an option certificate in such form (consistent with the provisions of the Plan) as the Grantor may from time to time prescribe. Each such certificate shall specify the Grant Date of the Option, the number and class of Shares over which the Option is granted, the Bonus Datethe OptionPrice, whether the Shares are subject to a restriction (as defined under paragraph 48(3) of Schedule 3) and, if so, the details of the restriction4.5Limit on ContributionsNo Eligible Employee shall be granted an Option to the extent it wouldat the proposed Grant Datecause the aggregate amount of his contributions under all Sharesave Contracts to exceed the Maximum Contribution.4.6NonTransferabilitySubject to the rights of exercise by an Option Holder’s personal representatives pursuant to Rule 6.5, every Option shall be personal to the Option Holder to whom it is granted and shall not be transferableor in any way alienable4.7Options granted Free of ChargeNo amount shall be paid in respect of the grant of an Option.4.8ApprovalsThe grant of an Option or the delivery of any Shares following its exercise shall be subject to obtaining any approval or consent required under any applicable laws, regulations or relevant authority (including theUnited Kingdom Listing Authority) any code adopted by the Company and based on the “Market Abuse Regulation” on directors’ dealings in securitiesor any applicable laws or regulations (whether in the UK or overseas).4.9Approval of grant of certain 2020 OptionsNotwithstanding any other provision of these Rules to the contrary, there will be deemed approved on the same day as these Rules are approved at the Company’s Annual General Meeting 2020 all and any Options granted pursuant to paragraph () in the definition of Grant Period. 10

NUMBER OF SHARES IN RESPECT OF WHICH O
NUMBER OF SHARES IN RESPECT OF WHICH OPTIONS MAY BE GRANTED5.1The Grantorshall not grant an Optionwhich would, at the Grant Date, cause the number of Shares allocated under the Plan or under any other Employees’ Share Scheme adopted by the Company during the preceding ten years, to exceed such number as represents ten per centof the ordinary share capital of the Company in issue at that time. 5.2In determining the above limit(a)in the case of an option or any other type of award to acquire Shares (where such option or award may be satisfied with newly issued shares), Shares are allocated at the time of grant of such option or award and where Shares are issued otherwise than pursuant to an option or other type of award to acquire Shares, Shares are allocated at the time of such issue;(b)Shares which have been issued to the Trusteeor which may be issued to the Trusteeto satisfy options or any other type of award shall be treated as allocated for the purposes of Rule 5.1(c)account shall be taken of any Shares where the right to acquire such Shares is released or lapses including, without limitation, pursuant to thesurrenderof an option within 30 days of its grant;(d)no account shall be taken of any Shares where the right to acquire such Shares has been or is to be satisfied other than by the issue or allotment of any part of the share capital of the Company (including, without limitation, by the transfer of existing shares or by cash);(e)reasury Shares shall count as newly issued Sharesuntil such time unless the contrary has been stated in the remuneration report of the Board; and(f)the Company may adjust the aggregate number of Shares already issued in each case to reflect any subsequent variation of share capital of theCompany in such manner as it determines is fair and reasonable.RIGHTS TO EXERCISE OPTIONS6.1No Exercise efore Bonus DateSave as provided in Rules 6.51.1, 6.6, and , an Option shall not be exercised earlier than the Bonus Date under the relevant Sharesave Contract.6.2No Exercise More Than Six Months After Bonus DateSave as provided in Rule 6.5, an Option shall not be exercised later than six months after the Bonus Date under the relevant Sharesave Contract.6.3Partial ExerciseAn Option may be exercised in part only, however, ifsuch partial exercise occurs the unexercised part shall lapse at the date of exercise.6.4Requirement of Continued EmploymentSave as provided in Rules 6.5, 6.6, and Rule , an Option Holder

may exercise an Option only while he co
may exercise an Option only while he continues to hold a SchemeRelated Employment 11 6.5Death of the Option HolderThe personal representatives of a deceased Option Holder may exercise his Option to the extent of the Repayment due under the Sharesave Contract at the date of death within(a)one year following the date of his death, if such death occurs before the Bonus Date(b)one yearfollowing the Bonus Date if such death occurs on orwithin six months the Bonus Date.6.6Termination of EmploymentAn Option may, to the extent of the Repayment due under the Sharesave Contract at the date of cessation, be exercised by an Option Holder within six months following his cessation of a SchemeRelated Employment by reason of:(a)injury or disabilityproved to the satisfaction of the Grantor(b)redundancy within the meaning of the Employment Rights Act 1996;(c)retirement or aftertheage at which he has agreed with the ompany that employs him he may retire(d)his office or employment being in a Constituent Companyof which the Company ceases to have Control, provided that the OptionHolder is employed by the Constituent Companyimmediately prior to such change of Control;(e)the transfer or sale of the undertaking or partundertaking in which he is employed to a person who is neither an Associated Company nor a company under the Controlof the Company, provided the Option Holder is employed by a Constituent Companyimmediately prior to such transfer or sale; or(f)except in the case of dismissal for misconduct, cessation of office or employment for any reason provided that such cessation ofoffice or employment is more than three years after the Grant Date6.7Option Holder Ceasing To Be Employed Constituent CompanyIf an Option Holder ceases to be a director or employee of a Constituent Company, but on the Bonus Date is an employee or director of an Associated Company or a company of which he Companyhas Control, he may exercise his Option within six months of that dateif the reason for him ceasing to be a director or employer of a Constituent Company (not the Associated Company) was one of the reasons set out in Rule 6.5or 6.6above.6.8Transfer of Employment within GroupNo person shall be treated for the purposes of this Rule as ceasing to hold an office or employment by virtue of which that person is eligible to participate in the Plan until that person ceases to hold any office or employment in he Companyor any Associated Company or any company of which e

ompanyhas Control.LAPSE OF OPTIONS7.1Ge
ompanyhas Control.LAPSE OF OPTIONS7.1General 12 Options shall lapse upon the occurrence of the earliest of the following events:(a)subject to Rule 7.1(c), six months after the Bonus Date;(b)before an Option has become capable of being exercised, the Option Holder giving notice that he intends to stop paying Monthly Contributions, or being deemedunder the terms of the Sharesave Contract to have given such notice by making an application for repayment of the Monthly Contributions;(c)where the Option Holder dies before the Bonus Date, twelve months following the date of death, and where the Option Holder dies in the period of six months after the Bonus Date, twelve months after the Bonus Date;(d)the expiry of any of the periods specified in Rule6.6(save that if at the time any of the applicable periods under Rule 6.6expire, time is running under the period in Rule 6.5, the Option shall not lapse by reason of this Rule 7.1(d)until the expiry of the period under Rule 6.5(e)the expiry of any of the periods specified in Rules 8.1, 8.3, 8.4and 8.5save where an Option is released in consideration of the grant of a ew Option (during one of the periods specified in Rules 8.3and 8.4) pursuant to Rule8.7(f)the Option Holder ceasing to hold an office or employment with a Constituent Company or an Associated Company, howsoever that cessation occurs whether lawful or unlawful, in any circumstances other than:(i)where the cessation of office or employment arises on any of the grounds specified in Rules 6.56.6; or(ii)where the cessation of office or employment arises on any ground whatsoever during any of the periods specified in Rule (g)subject to Rule 8.5, the passing of an effective resolution, or the making of an order by the Court, for the windingup ofhe Company(h)the Option Holder being deprived (otherwise than on death) of the legal or beneficial ownership of the Option by operation of law, or doing or omitting to do anything which causes him to be so deprived or he becomes bankrupt;(i)the expiry ofany of the periods referred to under Rule , except where an Option is released in consideration of a New Option pursuant to Rule 8.7TAKEOVER, RECONSTRUCTION AND LIQUIDATION8.1General OfferSubject to Rule 8.6, if any person makes either:(a)generaloffer to acquire the whole of the issued ordinary share capital of the 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 the Company); or(b)a ge
have Control of the Company); or(b)a general offer to acquire all the shares in the Company which are of the same class as the Shares 13 (in either case disregarding any Shares already owned by it or by any company associated with it), an Option may be exercised within six months (or such earlier date as the Grantor may determine) of the earliest of: (i)the date, being prior to the date on which the person making the offer under Rule 8.1obtains Control of the Company, on which the Board resolves that, in its reasonable opinion, to do otherwise would result in a loss of a corporation tax deduction pursuant to Part 12 of the Corporation Tax Act 2009; or (ii)the date the person making the general offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied.In each case, the Grantor shall notify Option Holders in writing as soon as possible and in any event with sufficient time to exercise their Options. Such exercise of Options shall be done in accordance with any procedure set down by the Grantor.8.2ControlFor the purposes of Rule 8.1a person shall be deemed to have obtained Control of he Companyif heand any others acting in concert with himhave together obtained Control of it.8.3Compulsory Purchase of Minority ShareholdingsSubject to Rule 8.6, if any person becomes bound or entitled to acquire Shares under ections to of the Companies Act 2006 (orlegislationaccepted by HMas beingits overseas equivalent), an Option may be exercised within the period during which that person isso bound or entitledand if not so exercised, shall lapse.8.4Court Sanction of a Compromise or ArrangementSubject to Rule 8.6under section 899 of the Companies Act 2006, the Court sanctions a compromise or arrangement between the Company and its members which, if it became effective, would result in a person obtaining ontrol of the Company, Options shall vest on the date of such Court sanction and may be exercised during the period of four weeks thereafter, and if not so exercised, shall lapse. After exercising an Option under this Rule, an Option Holder shall transfer or otherwise deal with the Shares issued to him so as to place him in the same position (so far as possible) as would have been subject to the Court sanction. 8.5LiquidationIf notice is duly given of a resolution for the voluntary windingup of he Company, he Companyshall notify all Option Holdersandubject to Rule 8.6, Options may then b

e exercisedfrom the datethe resolution i
e exercisedfrom the datethe resolution is duly passed until four weeks thereafter, after which time Options shall, to the extent that they have not been exercised, lapse immediately.8.6Mandatory ExchangeRules 8.1, 8.3and 8.4shall not apply where:(a)the events are part of a scheme or arrangement whereby Control of he Companyis obtained by another company (“Acquring Company”)(b)immediately after the Acquiring Companyobtains Control, the issued ordinary share capital of the Acquiring Companyis owned materially(at least 75 per cent)by the same persons who were equity shareholders of he Companyimmediately prior to the Acquiring Companyobtaining Control;and 14 (c)the Acquiring Companyagrees to grant New Options in accordance with Rule 8.7in consideration for the release of any Options which have not lapsed8.7Exchange of OptionsOptions become exercisable pursuant to any of Rules 8.1, 8.3or 8.4above (where this occurs as a result of a company obtaining Controlof the Companyin the cases of Rules 8.1and 8.4or as a result of a company becoming bound or entitled in accordance with Rule 8.3, any Option Holder may at any time within the Appropriate Period, by agreement with the relevant company, release any Option which has not lapsed (“Old Option”) in consideration of the grant to him of an Option (“New Option”) which is equivalent to the Old Option but relates to shares in a different companyfalling within paragraph 18(b) or (c) of Schedule 3 (whether the company which has obtained Control of the Company itself or some other companyor companies8.8Meaning of “equivalent”The New Option shall not be regarded for the purposes of Rule 8.7as equivalent to the Old Option unless the conditions set out in paragraph 39(4) of Schedule 3 are satisfied, but so that the provisions of the Plan shall for this purpose be construed as if:(a)the New Option is an Option granted at the same time as the Old Option;and(b)except for the purposes of the definitions of “Constituent Company” and “Subsidiary” in Rule 1.1, the reference to TalkTalk Telecom Group PLCn thedefinition of “he Company” in Rule 1.1were a reference to the different company mentioned in Rule 8.7MANNER OF EXERCISE9.1Limitation to Repayment under Savings ContractAn Option may only be exercised during the periods specified in Rules and , and only with monies not exceeding the amount of the Repayment under the Sharesave Cont

ract as at the date of such exercise. Fo
ract as at the date of such exercise. For this purpose, no account shall be taken of such part (if any) of the Repayment, of any Monthly Contribution, the due date for the payment of which under the Sharesave Contract arises after the date ofthe Repayment.9.2Procedure on ExerciseSubject to applicable law, an Option may be exercised, in whole or in part, by the deliveryin writing or in electronic format and in such form as the Grantormayfrom time to time prescribe, to the Secretary of he Companyor its duly appointed agent of the following:(a)an option certificate covering at least all of the Shares over which the Option is then to be exercised;(b)the notice of exercise in the prescribed form duly completed and signed by the Option Holder (or by his duly authorised agent); and(c)a remittance for the aggregate Option Price, or authority to he Companyto withdraw and apply monies from the Sharesave Contract equal to the aggregate OptionPrice, payable in respect of the Shares over which the Option is to be exercised 15 ISSUE OR TRANSFER OF SHARES10.1Allotment of SharesSubject to Rule 10.3, Shares to be issued pursuant to the exercise of an Option shall be allottedwithin days following the effective date of exercise of the Option.10.2Transfer of SharesSubject to Rule 10.3, he Grantor shallprocure the transfer of any Sharesto be transferred pursuant to the exercise of an Option within days following the effective date of exercise of the Option.10.3Regulatory ConsentsThe allotment or transfer of any Shares under the Plan shall be subject to obtaining any such approval or consentas is mentioned in Rule 4.810.4Rights of Newly Issued SharesShares to be issued pursuant to the Plan will rank equallyin allrespects with the Shares then in issue, except that they will not rank for any rights attaching to Shares by reference to a record date preceding the date of exercise.10.5Rights of Transferred SharesSharesto be transferred pursuant to the Plan will be transferred free of all liens, charges and encumbrances and together with all rights attaching thereto, except they will not rank for any rights attaching to Shares by reference to a record date preceding the date of exercise.10.6Admission of Shares to Listingand so long as the Shares are admitted to isting by the UK Listing Authority and admitted to trading on the Official List, the Companyshall apply to the UK Listing Authority for admission to isting and to the London Stock Exchange for

admission to trading of any Shares issue
admission to trading of any Shares issued pursuant to the Plan as soon as practicable after the allotment thereof.ADJUSTMENTS11.1Variation of Share CapitalThe number of Shares over which an Option is granted and the OptionPrice thereof (and where an Option has been exercised but no Shares have been allotted or transferred pursuant to such exercise, the number of Shares which may be so allotted or transferred and the price at which they may be acquired) shall be adjusted in such manner as the Grantor shall determine following any variation of share capital to the intent that without involving an OptionPrice calculated to more than two places of decimals) the aggregate Option Price payable in respect of an Option shall remain unchanged, provided that no adjustment shall be made pursuant to this Rule 11.1unless it is in accordancewithparagraph 28 of Schedule 311.2Nominal valueApart from pursuant to this ule 11.2, no adjustment under Rule 11.1above may have the effect of reducing the Option Price to less than the nominal value of a Share. Where an Option subsists over both issued and unissued Shares, any such adjustment may only be made if the reduction of the Option 16 Price of Options over both issued and unissued Shares can be made to the same extent. Any adjustment made to the Option Price of Options over unissued Shares shall only be made if and to the extent that the Board shall be authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Shares in respect of which the Option is exercisable exceeds the adjusted Option Price and to apply such sum in paying up such amount on such Shares so that on exercise of any Option in respect of which such a reduction shall have been made, the Board shall capitalise such sum (if any) and apply the same in paying up such amount.11.3Notification to Option HoldersThe Board may take such steps as it may consider necessary to notify Option Holders of any adjustment made under this Rule and to call in, cancel, endorse, issue or reissue any option certificate subsequent upon such adjustment.ADMINISTRATION12.1Notices and CommunicationsAny notice or other communication under, or in connection with, the Plan may be given by personal delivery or by sending the same by electronic means or by post, in the case of a company to its registered office, and in the case of an individual to his last known address, or, where he is a director or

employee of a Group Member, either to h
employee of a Group Member, either to his last known address or to the address of the place of business at which he performs the whole or substantially the whole of the duties of his office or employment. Where a notice or other communication is given by post, it shall be deemed to have been received 72 hours after it was put in the post properly addressed and stamped andif by electronic means, when the sender receiveselectronic confirmation of delivery or if not available 24 hours after sending the notice.12.2Replacement of Option CertificateIf any option certificate shall be worn out, defaced or lost, it may be replaced on such evidence being provided as the Grantor may require.12.3Availability of SharesThe Companyshall at all times keep available for allotment unissued Shares at least sufficient to satisfy all Options under which Shares may be subscribed or procure that sufficient Shares are available for transfer to satisfy all Options under which Shares may be acquired.12.4Decision of BoardThe Plan shall be administered by the Board. The Board shall have full authority, in accordance with the Plan, including authority to interpret and construe any provision of the Plan,to amend the Plan to correct any errors or mistakes of procedure, and to adopt such regulations for administering the Plan as it may deem necessary or appropriate. Decisions of the Board shall be final and binding on all parties.12.5Costs of Establishment and AdministrationThe costs of introducing and administering the Plan shall be borne by he Constituent CompaniesALTERATIONS13.1Power of Alteration 17 Subject to Rule 13.2, the Grantor may at any time alter or add to all or any of the provisions of the Plan in any respect, provided that alteration or addition may bemade to any key feature of the Plana time when the Plan is registeredwithunder Schedule 3as a result of the alteration or addition, the Plan would no longer meet all the requirements of Schedule 3For the purposes of this Rulekey feature” is any provision of the Plan which is necessary to meet the requirements of chedule 313.2Alterations to the Advantage of Option HoldersSubject to Rule 13.3, no alteration or addition to the advantage of present or future Option Holders or employees shall be made under Rule 13.1to such of the provisions of the Plan as relate to any of the following:(a)the persons to whom Options may be granted;(b)limitations on the grant of Options;(c)the determination

of the Option Price(d)the rights to be a
of the Option Price(d)the rights to be attached to the Options and the Shares(e)the rights of Option Holders in the event of a variation of the share capital under Rule ; and(f)the terms of Rule without the prior approval by ordinary resolution of the members of he Companyin general meeting.13.3Alterations Without Consent of ShareholdersRule 13.2shall not apply to anyminor alteration or addition which is to benefit the administration of the Plan, is necessary or desirable in order to chieve compliance with the requirements ofSchedule 3, or any other enactment, or to take account of any change in legislation or to obtain or maintain favourable taxation, exchange control or regulatory treatment for the Company, or any Group Member or anOption Holder13.4Consent of Option HoldersNo alteration or addition shall be made under Rule 13.1which would abrogate or adversely affect the subsisting rights of an Option Holder unless it is made:(a)with the consent in writing of such number of Option Holders who hold Options under the Plan to acquire 75 per cent of the Shares which would be issued or transferred if all Options granted and subsisting under the Plan were exercised; or(b)by a resolution at a meeting of Option Holders passed by not less that 75 per cent of the Option Holders who attend and vote either in person or by proxyand for the purpose of this Rule 13.4the Option Holders shall be treated as the holders of a separate class of share capital and the provisions of the Articles of Association of the Companyrelating to class meetings shall apply as amended13.5Overseas OptionsNotwithstanding any other provision of this Plan other than Rule 13.1, the Grantor may, in respect of Options granted to Eligible Employees who are or who may become subject to taxation outside the United Kingdom on their remuneration amend or add to the provisions of the Plan and the terms of 18 Options (whether by way of the establishment of further Plans to apply in overseas territories or otherwise) as it considers necessary or desirable to take account of or to mitigate or to comply with relevant overseas taxation, securities or exchange control laws, provided that(a)the terms of Options granted to such Eligible Employees are not overall more favourable than the terms of Options granted to other Eligible Employees; and(b)any Shares made available in respect of such Options count against any limits on overall or individual participation in the Plan.13.6

Notice to Option HoldersAs soon as reaso
Notice to Option HoldersAs soon as reasonably practicable after making any alteration or addition under Rule 13.1, the Grantor shall give written notice thereof to any Option Holder materially affected thereby.13.7Employees’ Share SchemeNo alteration shall be made to the Plan iffollowing the alterationthe Plan would cease to be an Employees’ Share Scheme.LEGAL ENTITLEMENT14.1For the purposes of this Rule , “Employee” means any Option Holder, Eligible Employeeor any other person14.2This Rule 14 applies:(a)during an Employee’s employment or employment relationship; and(b)after the termination of an Employee’s employment or employment relationship, whether the termination is lawful or unlawful.14.3Nothing in the Rules (or the operation thereof) forms part of the contract of employment or employment relationship of an Employeeor will it confer on any person any right to continue in employment, nor will it affect the right of any Group Member to terminate the employment of any person without liability at any time with or without cause, nor will it impose upon the Grantor or any other person any duty or liability whatsoever (whether in contract, tort or otherwise) in connection with:(a)the lapsing of any Option pursuant to the Plan;(b)the failure or refusal to exercise any discretion under the Plan; and/or(c)an Employee ceasing to hold office or employment for any reason whatever.14.4The rights and obligations arising from the employment relationship between the Employee and any Group Member are separate from, and are not affected by, the Plan. Participation in the Plan does not create any right to, or expectation of, continued employment or a continued employment relationship.14.5No Employee is entitled to participate in the Plan, or be considered for participation in the Plan, on any basis. The grant of any Option on any basis in any year does not infer any right to or expectation of the grant of any Option on the same basis, or at all, in any future year.14.6No Employee has any right to compensation for any loss in relation to the Plan, including: 19 (a)any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of employment or the employment relationship);(b)any exercise of a discretion or a decision taken in relation to an Option or to the Plan, or any failure to exercise a discretion or take a decision;an

d(c)the operation, suspension, terminati
d(c)the operation, suspension, termination or amendment of the Plan.14.7Participation in the Plan is permitted only on the basis that the Employee accepts all the provisions of the Rules, including in particular this Rule. By participating in the Plan, an Employee waives all rights under the Plan, other than the right to exercise an Option (subject to and in accordance with the express terms of the Option and theRules), in consideration for, and as a condition of, the grant of an Option under the Plan. 14.8Each of the provisions of each Rule under this Plan is entirely separate and independent from each of the other provisions of each Rule. If any provision is found to be invalid then it will be deemed never to have been part of the Rules of the Plan and to the extent that it is possible to do so, this will not affect the validity or enforceability of any of the remaining provisions of each Rule of the Plan.GENERA15.1Termination of PlanThe Plan shall terminate upon the tenth anniversary of its adoption by the Company in a general meeting or at any earlier time by the passing of a resolution by the Board or an ordinary resolution of the Company in general meeting. Termination of the Plan shall be without prejudice to the subsisting rights of Option Holders.15.2Financial AssistanceThe Company and any Subsidiary of the Company may provide money to the trustees of any trust or any other person to enable them or him to acquire Shares to be held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes to the extent permitted by section 678 of the Companies Act 2006. In addition, the Company may require any Subsidiary to enter into such other agreement or agreements as it shall deem necessary to oblige such Subsidiary to reimburse the Company for any other amounts paid by the Company hereunder, directly or indirectly in respect of such Subsidiary’s employees. 15.3Data ProtectionFor the purpose of operating the Plan, the Company will collect and process information relating to Option Holders in accordance with the privacy notice which is on the Company’s intranet.15.4Third Party RightsNo third party will have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan (without prejudice to any right of a third party which exists other than under that Act).15.5Governing LawThese Rules shall be governed by and construed in accordance with the laws of Eng