S-8

As filed with the Securities and Exchange Commission on December 9, 2020

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PEARSON PLC

(Exact name of Registrant as Specified in its Charter)

N/A

(Registrant’s Name for Use in English)

England and Wales	None
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

80 Strand

London, England WC2R 0RL

(Address of Principal Executive Offices)

The Pearson plc Employee Stock Purchase Plan

The Pearson Long Term Incentive Plan (2011)

The Pearson Long Term Incentive Plan (2020)

The Pearson Management Incentive Plan

Pearson Education, Inc.

221 River Street, Hoboken, NJ 07030

(201) 236 7000

(Name, Address and Telephone Number of Agent for Service)

Copy to:

Howard Kenny

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

(212) 309-6000

Fax: (212) 309-6001

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

Title of securities to be registered	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price	Amount of registration fee
Pearson plc, Ordinary Shares, nominal value of 25 pence each (1)	29,235,333 shares (2)	$8.87 (3)	$259,317,404(3)	$28,292 (3)

(1) Under certain circumstances, shares may be issued in the form of American Depositary Shares. A registration statement on Form F-6 (File No. 333-129599) is effective with respect to the American Depositary Shares represented by American Depositary Receipts issuable on a one-for-one basis for the Pearson plc Ordinary Shares registered hereby upon deposit of such Ordinary Shares.

(2) Covers shares under the Pearson plc Employee Stock Purchase Plan (4,334,279 shares), The Pearson Long Term Incentive Plan (2011) (3,653,263 shares), The Pearson Long Term Incentive Plan (2020) (19,305,155 shares), and the Pearson Management Incentive Plan (1,942,636 shares) (the “Plans”) and, pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), an indeterminate number of additional shares which may be offered and issued pursuant to the Plans to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3) Pursuant to Rule 457(c) and Rule 457(h) under the Securities Act, the proposed maximum offering price per share and the registration fee for shares to be issued pursuant to the Plans are based on the reported average of the high and low prices for the American Depositary Shares representing the Pearson plc Ordinary Shares, on the New York Stock Exchange on December 7, 2020.

TABLE OF CONTENTS

	PAGE
PART I		1
PART II		1
Item 3. Incorporation of Documents by Reference		1
Item 4. Description of Securities		1
Item 5. Interests of Named Experts and Counsel		1
Item 6. Indemnification of Directors and Officers		1
Item 7. Exemption from Registration Claimed		2
Item 8. Exhibits		2
Item 9. Undertakings		2
SIGNATURES		3

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PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The information specified in Item 1 and Item 2 of Part I of the Registration Statement on Form S-8 (the “Registration Statement”) is omitted from this filing in accordance with the provisions of Rule 428 under the Securities Act and the introductory note to Part I of the Registration Statement. The documents containing the information specified in Part I will be delivered to the participants in the Plans covered by this Registration Statement as required by Rule 428(b)(1).

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The Annual Report on Form 20-F of Pearson plc (“Pearson”) for the fiscal year ended December 31, 2019 (File No. 001-16055) filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2020 is incorporated in this registration statement by reference and made a part hereof.

All documents filed by Pearson pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, and, to the extent, if any, we designate therein, reports on Form 6-K we furnish to the SEC after the date of this registration statement, but prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in the registration statement and to be part thereof from the date of filing of such documents.

Each document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such document shall not create any implication that there has been no change in the affairs of Pearson since its date thereof or that the information contained in it is current as of any time subsequent to its date. Any statement contained in such a document shall be deemed to be modified or superseded for the purpose of this registration statement to the extent that a subsequent statement contained herein or in a subsequently filed document incorporated by reference herein, modifies or supersedes that statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement. In addition, any statement contained in any such document shall be deemed to be superseded for the purpose of this registration statement to the extent that a discussion contained herein covering the same subject matter omits such statement. Any such statement omitted shall not be deemed to constitute a part of this registration statement.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

The Companies Act of 2006 (the “Act”) does not permit a company to indemnify a director or an officer of the company against any liability which by virtue of any rule of law would otherwise attach to him in respect of negligence, default, breach of duty or breach of trust in relation to the company. Subject to the provisions of the Act, but without prejudice to any indemnity to which the person concerned may otherwise be entitled, Pearson’s Articles of Association provide that every director or officer of the Company shall be indemnified out of the assets of the Company against any liability incurred by him for negligence, default, breach of duty or breach of trust in relation to the affairs of the Company, to the extent that such indemnification would not be treated as void under the Act.

Pearson has directors’ and officers’ liability insurance policies that insure directors and officers against the cost of defense, settlement or payment of claims and judgments under certain circumstances.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

The following exhibits are filed as part of this Registration Statement:

4.1	Articles of Association of Pearson plc (incorporated by reference from Exhibit 1.1 to the registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2019)
4.2	Specimen certificate for ordinary shares of Pearson plc, nominal value of 25 pence each (filed herewith)
4.3	Form of Second Amended and Restated Deposit Agreement among Pearson plc, The Bank of New York and all Owners and holders from time to time of American Depositary Receipts issued thereunder (incorporated by reference from Exhibit 1 to the Registration Statement on Form F-6 (No. 333-129599))
5.1	Opinion of Freshfields Bruckhaus Deringer LLP as to the validity of the Pearson plc Ordinary Shares (filed herewith)
23.1	Consent of PricewaterhouseCoopers LLP, London, England (filed herewith)
23.3	Consent of Freshfields Bruckhaus Deringer LLP (included in Exhibit 5.1)
24.1	Powers of Attorney (included on the signature page hereto)
99.1	The Pearson plc Employee Stock Purchase Plan, as amended (filed herewith)
99.2	The Pearson plc Long Term Incentive Plan (2011), as amended (filed herewith)
99.3	The Pearson plc Long Term Incentive Plan (2020), as amended (filed herewith)
99.4	The Pearson Management Incentive Plan, as amended (filed herewith)

Item 9. Undertakings.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the

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Commission by such registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of London, England on December 9, 2020.

PEARSON PLC Registrant
By:	/s/ Sally Johnson
	Sally Johnson
	Chief Financial Officer

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POWER OF ATTORNEY

Know all persons by these presents, that each person whose signature appears below constitutes and appoints each of Andy Bird and Sally Johnson his or her true and lawful attorney-in-fact and agent, with full power of substitution, and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute one or more amendments (including post-effective amendments) to this Registration Statements on Form S-8 and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, and does hereby grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney has been signed below by the following persons in the capacities indicated as of the 9th day of December, 2020.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated below on December 9, 2020:

SIGNATURE	TITLE
/s/ Andy Bird, CBE
Andy Bird, CBE	Chief Executive Officer (Principal Executive Officer)
/s/ Sally Johnson
Sally Johnson	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ Sidney Taurel
Sidney Taurel	Chairman
/s/ Dame Elizabeth Corley, DBE
Dame Elizabeth Corley, DBE	Director
/s/ Sherry Coutu, CBE
Sherry Coutu, CBE	Director
/s/ Vivienne Cox, CBE
Vivienne Cox, CBE	Director
/s/ Graeme Pitkethly
Graeme Pitkethly	Director
/s/ Linda Lorimer
Linda Lorimer	Director
/s/ Michael Lynton
Michael Lynton	Director
/s/ Tim Score
Tim Score	Director
/s/ Lincoln Wallen
Lincoln Wallen	Director

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U.S. AUTHORIZED REPRESENTATIVE PEARSON EDUCATION, INC.
By:	/s/ Andrew Siclari
	Andrew Siclari
	President

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EX-4.2

Exhibit 4.2

	Shareholder
Certificate No.	Reference	Transfer No.	Date	Number of Shares

CANX		CANX	of 25p each

(Incorporated under the Companies Acts 1862 to 1893)

(Registered in England and Wales No. 53723)

Ordinary shares of 25p each

This is to Certify

that the undermentioned is/are the Registered Holder(s) of Ordinary Shares of Twenty-Five Pence

each fully paid in PEARSON plc, subject to the Articles of Association of the Company.

Name(s) of Holder(s) Given under the Common Seal of the Company.

CANX

Number of Shares of 25p each

This certificate should be kept in a safe place. It will be needed when you sell or transfer the shares.

The registrar’s address is: Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom.

Telephone 0371 384 2043* (from the UK) or +44 (0) 121 415 7062 (from outside the UK)

and the relevant reference for correspondence is No. 0383.

There is a range of shareholder information online.

You can check your holding and find practical help on transferring shares or updating your details at www.shareview.co.uk

*Lines are open 8.30am to 5.30pm (UK time) Monday to Friday (except public holidays in England and Wales).

Calls from outside the UK will be charged at international rates.

Please note that calls may be monitored or recorded.

394182

BANK DETAILS FOR DIVIDEND PAYMENTS - PLEASE COMPLETE THE FORM BELOW IN CAPITAL LETTERS AND IN BLACK INK

This form is only to be used by private shareholders. If you are a Corporate body or another type of shareholder, please contact the Registrar.

Company Name		Shareholder Reference
Pearson pic	0383

Bank Account Name    

Sort code –  –              Account Number

Building Society

Reference or Roll

Number (If applicable)

Please forward until further notice, all dividends or interest that may from time to time become payable to me/us in respect of any shares held in Pearson pic to the above nominated bank or building society, or to such other branch of the organisation as the bank or building society may from time to time request. Compliance with this request will discharge Pearson pic of any further liability in respect of such dividends or other monies.

All the Registered Holders

(or, where applicable,

executors or administrators)

MUSTsign.

Please mark this box if

signing on behalf of the

shareholders under Power of

Attorney or other authority.

Please detach this form and return it to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom.

EX-5.1

Exhibit 5.1

  Private & Confidential   Pearson plc 80 Strand London WC2R 0RL London Freshfields Bruckhaus Deringer LLP 65 Fleet Street London EC4Y 1HS T    +44 20 7936 4000 (Switchboard)       +44 20 7832 7423 (Direct) F    +44 20 7108 7423 E    alice.greenwell@freshfields.com www.freshfields.com   Doc ID LON583291   Our Ref LON068050.0077 AMSG

9 December 2020

Dear Sir/Madam

Pearson plc – Registration Statement on Form S-8

Introduction

1. This opinion is given in connection with the registration under the United States Securities Act for 1933, as amended (the Act), of 752,973,570 ordinary shares of 25p each (the Shares) in the capital of Pearson plc, a company registered in England and Wales under registration number 53723, (the Company) to be issued pursuant to the following share plans:

(a) The Pearson plc Employee Stock Purchase Plan;

(b) The Pearson Management Incentive Plan;

(c) The Pearson Long Term Incentive Plan 2011, as amended from time to time; and

(d) The Pearson Long Term Incentive Plan 2020,

together, the Plans.

2. We understand that a registration statement on Form S-8 (the Registration Statement) is being filed under the Act with respect to the Shares. We have not been involved in the preparation of the Registration Statement and express no view thereon. We understand that some or all of the Shares are to be issued in the future from time to time pursuant to the Plans.

Documents Examined

3. We are acting as English legal advisers to the Company for the purposes of giving this

Freshfields Bruckhaus Deringer LLP is a limited liability partnership registered in England and Wales with registered number OC334789. It is authorised and regulated by the Solicitors Regulation Authority. For regulatory information please refer to www.freshfields.com/support/legalnotice.

A list of the members (and of the non-members who are designated as partners) of Freshfields Bruckhaus Deringer LLP is available for inspection at its registered office, 65 Fleet Street, London EC4Y 1HS. Any reference to a partner means a member, or a consultant or employee with equivalent standing and qualifications, of Freshfields Bruckhaus Deringer LLP or any of its affiliated firms or entities.

Abu Dhabi Amsterdam Bahrain Beijing Berlin Brussels Cologne Dubai Düsseldorf Frankfurt am Main Hamburg Hanoi Ho Chi Minh City Hong Kong London Madrid Milan Moscow Munich New York Paris Rome Shanghai Singapore Tokyo Vienna Washington

Private & Confidential

2 | 4

opinion. In so acting, we have examined:

(a) a final draft of the Registration Statement to be filed under the Act;

(b) a letter from the Company Secretary of the Company dated 7 December 2020 and the documents attached thereto (the Confirmation Letter);

(c) such other corporate records, certificates, instruments and other documents as in our judgment are necessary or appropriate to enable us to render the opinion expressed below,

and relied upon the statements as to factual matters contained in or made pursuant to each of the above-mentioned documents. Where relevant facts material to this opinion were not independently established, we have relied upon statements of officers for the Company

Assumptions

4. For the purposes of rendering this opinion, we have assumed, without further enquiry, that:

(a) each of the statements contained in the Confirmation Letter is currently true and accurate;

(b) all signatures on executed documents which, or copies of which, we have examined are genuine;

(c) all original documents submitted to us are authentic and complete and all copies of documents supplied to us as photocopies or facsimile copies conform to the originals and are authentic and complete;

(d) all documents on which we have relied (including, without limitation, the memorandum and articles of association of the Company and the Plans) remain accurate, are in full force and have not been amended;

(e) all statements of fact (including foreign law), opinion or intention in documents sent to us for the purpose of this opinion are accurate, complete and reasonable;

(f) each of the Plans constitutes an employees’ share scheme for the purposes of s1166 of the United Kingdom Companies Act 2006, as amended;

(g) the Shares will be allotted, issued and paid for in accordance with (i) the rules of the Plans, (ii) the memorandum and articles of association of the Company in force at the relevant time; and (iii) the relevant provisions of the United Kingdom Companies Act 2006 (as amended), and all necessary authorities and resolutions will be fully and unconditionally in force at the time the Shares are issued;

(h) the subscription price per Share is not less than the nominal value of an ordinary share of 25 pence in the capital of the Company;

Private & Confidential

3 | 4

(i) the directors of the Company will have the proper authority under section 551 of the United Kingdom Companies Act 2006, as amended, to allot and issue such of the Shares as are proposed to be issued and allotted at the date of allotment thereof, or that no such authority shall be required pursuant to section 549(2)(a) of that Act;

(j) the Company will have complied with its obligations under section 561 of the United Kingdom Companies Act 2006, as amended, to offer the Shares to existing shareholders, or that no such obligation shall arise pursuant to section 566 of that Act;

(k) the Shares shall be duly allotted and issued in accordance with the Plans by means of a resolution duly passed by the board of directors of the Company or a duly authorised committee thereof at a validly convened and constituted meeting or meetings and duly entered in the Company’s register of members; and

(l) each of the foregoing assumptions will be true and accurate at and immediately prior to the time of the issue and allotment of the relevant Shares and there will not have been any material change in English law prior to the issue of the Shares.

Legal Opinion

5. On the basis of, and subject to, the foregoing and the qualifications referred to below, and having regard to such considerations of English law in force at the date of this letter as we consider relevant, we are of the opinion that the Shares, or any thereof, when issued by the Company in accordance with the Plans after the Registration Statement has become effective under the Act and upon the passing of all necessary resolutions and the taking of all necessary corporate action in connection therewith will be validly issued, fully paid and non-assessable.

For the purposes of this opinion, we have assumed that the term “non-assessable” in relation to the Shares would be construed for the purposes of English law as meaning that the holders of such Shares, in respect of which all amounts due on such Shares as to the nominal amount and any premium thereon have been fully paid, will be under no obligation to contribute to the liabilities of the Company solely in their capacity as holders of such Shares.

Qualifications

6. This opinion is subject to the following qualifications:

(a) the opinion is limited to English law as currently applied by the English courts and is given on the basis that it will be governed by and construed in accordance with current English law. Accordingly, we express no opinion with regard to any system of law other than the law of England as currently applied by the English courts;

Private & Confidential

4 | 4

(b) this opinion is subject to all applicable laws relating to insolvency, bankruptcy, administration, reorganisation or analogous circumstances and other similar laws of general application relating to or affecting the enforcement of creditors rights and remedies from time to time; and

(c) the opinion is addressed to you solely for your benefit in connection with the Company’s Registration Statement. It is not to be transmitted or disclosed to any other person nor is it to be used or relied upon by any other person or for any other purposes or quoted or referred to in any public document without our prior written consent. We hereby give such consent in relation to the filing of this letter as an exhibit to the Registration Statement. In giving this consent we do not admit that we are in the category of persons where consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

Your reliance on the matters addressed in this opinion letter is on the basis that any associated recourse is against the firm’s assets only and not against the personal assets of any individual partner. The firm’s assets for this purpose consist of all assets of the firm’s business, including any right of indemnity of the firm or its partners under the firm’s professional indemnity insurance policies, but excluding any right to seek contribution or indemnity from or against any partner of the firm or person working for the firm or similar right. The restrictions in the previous sentences apply to any claim, whether in contract, tort (including negligence) for breach of statutory duty, or otherwise, but they do not apply in the case of our wilful misconduct or fraud or where and to the extent prohibited by applicable law and regulation (including without limitation, the rules of professional responsibility governing the practice of law).

Governing Law

7. The English courts shall have exclusive jurisdiction, to which you and we submit in relation to all disputes (including claims for set-off and counterclaims) arising out of or in connection with this opinion, including, without limitation, disputes arising out of or in connection with: (i) the creation, effect, or interpretation of, or the legal relationships established by, this opinion; and (ii) any non-contractual obligations arising out of or in connection with this opinion.

Yours faithfully

Freshfields Bruckhaus Deringer LLP

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of Pearson plc of our report dated April 1, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in Pearson plc’s Annual Report on Form 20-F for the year ended December 31, 2019.

/s/ PricewaterhouseCoopers LLP

London, England

9 December 2020

EX-99.1

Exhibit 99.1

PEARSON plc

EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Pearson plc Employee Stock Purchase Plan (the “Plan”), as adopted by the Board of Directors of the Company (the “Board”) and subsequently approved by the shareholders of Pearson plc (the “Company”) on May 12, 2000, is to encourage and facilitate the ownership of ordinary shares of the Company by eligible employees of the Company’s U.S. Subsidiaries. The Board believes that employee participation in ownership will be to the mutual benefit of the employees and the Company. This amendment and restatement of the Plan, effective July 1, 2010, amends the treatment of a Participant’s Stock Purchase Account in the event of the Participant’s voluntary withdrawal from the Plan and conforms the Plan’s terms to current administrative practice. The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423 of the Code.

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

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings issued and regulations promulgated thereunder.

“Committee” means the Administrative Committee for the Benefit Plans of Pearson Inc., or its successor.

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

“Eligible Employee” means an Employee who is employed on an Offering Date; provided that such Employee customarily works (i) more than 20 hours per week and (ii) at least five months during a calendar year.

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

“Market Value” means the last sales price of a Share or, if unavailable, the average of the closing bid and asked prices per Share at the end of regular trading on such date (or, if there was no trading or quotation in the Shares on such date, on the next preceding date on which there was

trading or quotation) as provided by the United States national securities exchange or interdealer quotation system on which the Shares are listed or quoted.

“Offering” means each separate offering of Shares under the Plan that occurs during each Offering Period.

“Offering Date” means the date on which each Offering Period is to commence, as determined by the Committee; provided, however, that no Offering Period shall commence prior to the time the Shares are listed for trading on a United States national securities exchange or interdealer quotation system.

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

“Participant” means each Eligible Employee who elects to participate in the Plan.

“Purchase Agreement” means the document prescribed by the Committee pursuant to which an Eligible Employee has enrolled to be a Participant for an Offering Period.

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

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

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

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

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

3. Administration.

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

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

4. Eligibility and Participation.

(a) During each Offering, each Eligible Employee shall be eligible to participate in the Plan.

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

(c) Unless otherwise determined by the Committee, the purchase of Shares under the Plan shall be funded solely through payroll deductions on an after-tax basis accumulated during the Offering Period. In a Purchase Agreement, an Eligible Employee shall designate the amount of Compensation to be deducted from each paycheck, subject to such maximum limit as may be set by the Committee on a uniform basis. Such payroll deductions shall be credited to the Participant’s Stock Purchase Account, and shall accumulate without interest thereon. Increases or decreases to a Participant’s rate of payroll deduction during an Offering Period may be permitted in the discretion of the Committee, based on uniform rules to be established by the Committee.

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(d) Any Participant may voluntarily withdraw from the Plan by filing a notice of withdrawal with the Committee at such time in advance as the Committee may specify. In the event of such a withdrawal, the amount, if any, standing to the credit of the Participant in his Stock Purchase Account shall be used to purchase Shares on the next Purchase Date in accordance with Section 5.

(e) If a Participant ceases to be employed by the Company or a U.S. Subsidiary during an Offering Period for any reason (including, without limitation, the Participant’s death or retirement), participation in the Plan shall cease and the entire amount, if any, standing to the Participant’s credit in his Stock Purchase Account shall be returned to him or his legal representative (without interest). To the extent provided by the Committee, if a Participant remains employed by the Company or a U.S. Subsidiary, but ceases to be an Eligible Employee, he may continue to participate in the Plan through the end of the Offering Period in which such cessation occurs, but may participate thereafter only if he again becomes an Eligible Employee.

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

6. Limitations.

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

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

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

In order to satisfy the foregoing limitations, the Committee shall have the right to (i) decrease or suspend a Participant’s payroll deductions, (ii) not apply all or any portion of a Participant’s Stock Purchase Account toward the purchase of Shares, and (iii) repurchase Shares previously purchased by a Participant at the Purchase Price paid by the Participant. To the extent that the

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Committee exercises its rights under the foregoing sentence, any such method shall be applied on a uniform basis.

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

8. Adjustments.

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

(b) If the Shares shall cease for any reason to be listed on any nationally recognized stock exchange or quotation system in the United States, any Offering hereunder shall thereupon terminate, and the balance then standing to the credit of each Participant in his Stock Purchase Account shall be returned to him (without interest).

9. General Provisions.

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

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

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

(d) No Right to Continued Employment or Service. Neither the Plan nor any action taken hereunder shall be construed as giving any Employee, director or other person the right to be retained in the employ or service of the Company or any U.S. Subsidiary, nor shall it interfere in any way with the right of the Company or any U.S. Subsidiary to terminate any Employee’s employment or other person’s service at any time or with the right of the Board or stockholders to remove any director.

(e) Changes to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan without the consent of stockholders or Participants, except that any such action shall be subject to the approval of the Company’s stockholders at or before the next annual meeting of stockholders for which the record date is after such Board action if (i) such stockholder approval is required by any law or regulation or the rules of any stock exchange or interdealer quotation system on which the Shares may then be listed or quoted, (ii) such action will alter the basic structure of the Plan and results in a material benefit to current or future Participants (other than alterations which benefit the administration of the Plan, are required to conform to changes in legislation, or are necessary to obtain or maintain favorable tax, accounting or regulatory treatment for Participants, the Company or any U.S. Subsidiary), or (iii) the Board, in its discretion, otherwise determines to submit other such changes to the Plan to stockholders for approval; provided, however, that, without the consent of an affected Participant, no such action may materially impair the rights of such Participant with respect to any Shares previously purchased by the Participant. Notwithstanding the foregoing, the Committee may adopt amendments to the Plan; provided, that any such amendment does not materially increase the

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cost of the Plan to the Company. Upon termination of the Plan, any amounts then credited to a Participant’s Stock Purchase Account shall be returned to the Participant (without interest).

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

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

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EX-99.2

Exhibit 99.2

THE PEARSON LONG-TERM INCENTIVE PLAN

Approved by shareholders on 28 April 2011 and amended by the Remuneration Committee on 23 April 2014

Amended by the Standing Committee on 16 March 2015 incorporating amendments made with effect on and from 17 July 2013 by virtue of section 14 and Schedule 2 to the Finance Act 2013 and with effect on and from 6 April 2014 by virtue of section 51 and Schedule 8 to the Finance Act 2014 and further amendments made by the Standing Committee in respect of Stock Options granted under the Tax Favoured Part of the Plan on and after 16 March 2015

CONTENTS

DESCRIPTION		PAGE
1.	DEFINITIONS		1
2.	GRANT OF AWARDS		3
3.	PLAN LIMITS		4
4.	INDIVIDUAL LIMITS		5
5.	SPECIFIC PROVISIONS RELATING TO RESTRICTED STOCK		5
6.	DIVIDEND SHARES		6
7.	SPECIFIC PROVISIONS RELATING TO STOCK OPTIONS		6
8.	CESSATION OF EMPLOYMENT – STOCK OPTIONS AND RESTRICTED STOCK		8
9.	DEATH OF PARTICIPANT OR OTHER EXCEPTIONAL CIRCUMSTANCES – STOCK OPTIONS AND RESTRICTED STOCK		9
10.	GENERAL OFFER FOR THE COMPANY, ETC – STOCK OPTIONS AND RESTRICTED STOCK		9
	General Offer		9
	Scheme of Arrangement		10
	Voluntary Winding-up		11
	Application of performance conditions and pro-rating		11
	Exchange of Awards		12
11.	ADJUSTMENT OF AWARDS		12
12.	ALLOTMENT OR TRANSFER OF SHARES ON EXERCISE OF AWARDS		13
13.	RIGHTS ATTACHING TO SHARES ALLOTTED OR TRANSFERRED PURSUANT TO AWARDS		14
14.	AVAILABILITY OF SHARES		14
15.	ADMINISTRATION AND AMENDMENT		15
16.	GENERAL		16

THE PEARSON LONG-TERM INCENTIVE PLAN

PREAMBLE

The Long-Term Incentive Plan has two elements:

• the Restricted Stock element. This involves the award of conditional rights to receive Shares. The vesting of such awards will be subject to a corporate performance target or targets unless the award is made to satisfy recruitment and retention objectives;

• the Stock Option element. This involves the grant of options to acquire Shares, normally provided that the Participant remains an employee of a member of the Group until the Option Vesting Date and, in the case of executive directors, subject to the satisfaction of a corporate performance target or targets.

1. DEFINITIONS

1.1 In this Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings, namely:

Adoption Date means the date of the adoption of the Plan by the Company in general meeting on 28 April 2011;

ADSs means American Depositary Shares representing Shares;

Award means a right to acquire Shares under the rules of this Plan, comprising either Stock Option and/or Restricted Stock elements;

the Committee means the personnel committee of the board of directors of the Company, or other duly authorised committee thereof;

the Company means Pearson plc;

Control has the meaning given to that word by section 995 of the Income Tax Act 2007;

Date of Grant means the date on which an Award is granted;

Dealing Day means any day on which the London Stock Exchange is open for business;

Discretionary Share Plan means an Employees’ Share Scheme in which participation is solely at the discretion of the Committee;

Dividend Shares means additional shares awarded to a Participant in respect of his Vesting Shares in accordance with rule 7.1 below;

Employees’ Share Scheme has the meaning given by section 1166 of the Companies Act 2006;

Executive means any employee or executive director of any member of the Group;

First Restricted Stock Vesting Date means:

(a) where the Restricted Stock is subject to a performance condition (unless the Committee specifies otherwise at its Date of Grant), the third anniversary of the Date

of Grant of the Restricted Stock (or, if later, the date of publication of the final set of accounts of the Company which are relevant to the determination of the applicable performance condition); and

(b) where the Restricted Stock is not subject to a performance condition, the date on which the Restricted Stock is expressed to vest (as specified by the Committee).

Grant Period means any day (other than a day on which dealings in Shares are prohibited under the Model Code for Dealing in Securities) on which the Committee considers it appropriate to grant Awards;

the Group means the Company and the Subsidiaries and member of the Group shall be construed accordingly;

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

Option Exercise Price means the price per Share (expressed in sterling or US dollars) payable on the exercise of a Stock Option as determined by the Committee (subject to adjustment under rule 11) being not less than the Share Price on the Date of Grant (PROVIDED THAT, in the case of any Stock Option under which Shares are to be issued, the Option Exercise Price shall also not be less than the nominal value of a Share);

Option Period means, in relation to an Option or Option Tranche, the period commencing on the Option Vesting Date and expiring on the tenth anniversary of the Date of Grant;

Option Tranche means each tranche of Shares comprised in a Stock Option, becoming exercisable in the manner described in rule 7.3 and 7.4;

Option Vesting Date means the date specified by the Committee at the Date of Grant as the date on which a Stock Option, or each tranche thereof where granted as Option Tranches, normally becomes exercisable;

Participant means any individual who holds a subsisting Award (including, where the context permits, the legal personal representatives of a deceased Participant);

Performance Period means the period over which any performance condition attaching to an Award must be satisfied;

Phantom Stock means a right to a cash payment determined by reference to the value of a Share granted under rule 5.7 of the Plan;

the Plan means this Long-Term Incentive Plan as amended from time to time;

Restricted Stock means a conditional right granted under the Plan to receive Shares without payment;

Restricted Stock Vesting Date means the First Restricted Stock Vesting Date or Second Restricted Stock Vesting Date as the context requires;

Second Restricted Stock Vesting Date means the expiry of such period as the Committee specifies for the purposes of rule 5.3;

Share Price means:

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(a) in relation to a Share on any Dealing Day, the middle market quotation for a Share as derived from the Daily Official List of The London Stock Exchange; and

(b) in relation to an ADS on any Dealing Day, the closing price for an ADS on the New York Stock Exchange.

Shares means fully paid and irredeemable ordinary shares of 25p each in the capital of the Company or shares representing those shares following any reorganisation of the share capital of the Company (and, where the context requires, shall include the equivalent thereof in ADSs);

Stock Appreciation Right means a stock appreciation right granted under rule 7.7 of the Plan;

Stock Option means a right granted under the Plan to subscribe for or purchase Shares at the Option Exercise Price;

Subsidiary means any subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006 over which the Company has Control;

Treasury Shares means Shares held in accordance with sections 724-732 of the Companies Act 2006;

Trustee means the trustee from time to time of the Pearson plc Employee Share Ownership Trust or such other employee benefit trust as the Company shall specify from time to time; and

Vesting Shares means that number of Shares under a Participant’s Restricted Stock Award which vest in accordance with the rules of the Plan.

1.2 Where the context permits the singular shall include the plural and vice versa. Headings shall be ignored in construing the Plan.

1.3 References to any act shall include any statutory modification, amendment or re-enactment thereof.

2. GRANT OF AWARDS

2.1 The Committee may, during a Grant Period, grant Awards to Executives selected by the Committee in its absolute discretion. For the avoidance of doubt, no Executive shall have the right or expectation to participate in the Plan in any year.

2.2 Each Award shall comprise such Restricted Stock or Stock Options or a combination of both Restricted Stock and Stock Options in such proportions as the Committee thinks fit in its absolute discretion. Awards may be subject to one or more performance conditions.

2.3 The grant of an Award and/or the delivery of Shares upon exercise or vesting thereof shall be conditional on the Executive agreeing to comply with any arrangements specified by the Company for the payment of taxation and social security contributions (including without limitation the right to sell on his or her behalf sufficient Shares to satisfy any taxation or social security contributions liability on his or her part for which any member of the Group may be liable) in respect of an Award.

2.4 On granting Awards, the Company shall enter into a deed poll or take such other steps as are necessary to evidence their legal enforceability. As soon as practicable after the

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Date of Grant, the Committee shall procure the issue to such Executive of a letter in respect of an Award together with access to website information, or such other information as the Company shall make available, summarising the key terms of the Award.

2.5 No Award shall be granted under the Plan later than the tenth anniversary of the Adoption Date.

2.6 Every Award granted hereunder shall be personal to the Participant and, except to the extent necessary to enable a personal representative to exercise the Award or receive Shares on the vesting of an Award following the death of a Participant, neither the Award nor the benefit thereof may be transferred, assigned, charged or otherwise alienated. Any transfer of an Award otherwise than as permitted under this rule 2.6 shall cause the Award to lapse.

3. PLAN LIMITS

3.1 Awards may be satisfied using existing issued Shares, Treasury Shares or new Shares issued to the Participant at the time of exercise or to the Trustee.

3.2 To the extent that Awards are to be satisfied using existing issued Shares, the Company shall provide (and shall procure, where appropriate, that any member of the Group which employs Participants shall provide) sufficient monies to enable the Trustee to acquire sufficient Shares to satisfy all such Awards. Such monies shall be provided to the Trustee no later than the date on which the relevant Award vests or becomes exercisable.

3.3 No Award to subscribe for Shares shall be granted under the Plan to the extent that the result of that grant would be that:

(a) the aggregate number of Shares that could be issued on vesting or exercise of that Award and any other Awards granted at the same time, when added to the number of shares that:

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

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

would exceed 10 per cent of the ordinary share capital of the Company for the time being in issue;

(b) the aggregate number of Shares that could be issued on vesting or exercise of that Award and any other Awards granted at the same time, when added to the number of Shares that:

(i) could be issued on the vesting or exercise of any subsisting Awards granted during the preceding ten years under the Plan or any other Discretionary Share Plan established by the Company; and

(ii) have been issued on the vesting or exercise of any Awards granted during the preceding ten years under the Plan or any other Discretionary Share Plan established by the Company,

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

3.4 Reference in this rule 3 to the issue of Shares shall, for the avoidance of doubt, mean the issue and allotment (but not transfer) of Shares and shall include Treasury Shares so issued.

3.5 For the purposes of this rule 3, to the extent that a Stock Appreciation Right (granted under rule 7.7) relates to Shares that could be issued, the number of Shares to be taken into account shall be the number of Shares over which the Stock Appreciation Right is granted and not the number actually delivered to the Participant on exercise of the Stock Appreciation Right.

4. INDIVIDUAL LIMITS

4.1 The number of Shares comprised in Awards granted to any Executive shall be based on the valuation mechanism described in this rule 4. The Committee shall, in respect of each Executive, have regard to the face value of Awards. The Committee shall also have regard to the Committee’s assessment of market practice of comparable companies for long term incentives and overall remuneration. The Committee shall also take into account the individual roles and responsibilities of the participant, and company and individual performance.

5. SPECIFIC PROVISIONS RELATING TO RESTRICTED STOCK

5.1 A Restricted Stock Award consists of a conditional right to receive a number of Shares on the terms referred to in these rules.

5.2 Where a Restricted Stock Award (or part thereof) is subject to a performance condition the number of Shares that are capable of vesting shall be determined by the extent to which an objective performance measure is satisfied over the Performance Period. The performance condition applicable to a Restricted Stock Award shall be determined by the Committee prior to the grant of the Restricted Stock Award and shall be specified by the Committee at the Date of Grant. Unless rule 5.3 applies, Shares which are capable of vesting at the end of the Performance Period shall vest on the First Restricted Stock Vesting Date.

5.3 The Committee may specify at the Date of Grant a percentage of the Shares under a Restricted Stock Award the performance conditions of which shall be tested at the end of the Performance Period but the vesting of which shall be delayed until the Second Restricted Stock Vesting Date (and such Shares shall only vest at the Second Restricted Stock Vesting Date, subject to these rules, if the Participant has retained, to the Second Restricted Stock Vesting Date, the after tax number of Shares that vested on the First Restricted Stock Vesting Date).¹

5.4 The Committee may grant Restricted Stock which is not subject to a performance condition, in order to achieve retention or recruitment objectives. The Restricted Stock Vesting Date (which shall not normally be earlier than the first anniversary of the Date of

¹ For awards granted before 23 April 2014 rule 5.3 reads as follows:

The Committee may specify at the Date of Grant that a percentage of the Shares that are capable of vesting at the end of the Performance Period shall only vest to the extent that the Participant retains for a specified period that after tax number of Shares that vested on the First Restricted Stock Vesting Date.

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Grant), and such other conditions as the Committee thinks fit, shall be specified by the Committee at the Date of Grant.

5.5 Following the vesting of a Restricted Stock Award, the Vesting Shares shall be delivered to a Participant as soon as practicable thereafter.

5.6 Where the delivery of Shares under the Plan would be prohibited by law or the Model Code for Securities Transactions by Directors of Listed Companies (or the Company’s dealing rules), the Shares shall be delivered to the Participant as soon as practicable after the prohibition has ceased to apply.

5.7 Where the Committee determines that it is appropriate, it may grant Awards of Phantom Stock in the place of Restricted Stock. Where Phantom Stock Awards are so granted, all references to “Restricted Stock” in the rules of this Plan shall be treated as references to “Phantom Stock”. Any Dividend Shares which accrue in respect of Phantom Stock shall also be satisfied in cash. The terms of the Phantom Stock shall be determined by the Committee prior to grant.

6. DIVIDEND SHARES

6.1 In addition to any Vesting Shares to which a Participant becomes entitled in relation to a Restricted Stock Award in accordance with the rules of this Plan, the Participant shall be awarded, with effect from the Restricted Stock Vesting Date, such number of Dividend Shares as is equal to the number of Shares which could have been purchased if each dividend (grossed up, where relevant, for any associated tax credit) paid on the Vesting Shares in the period between the Date of Grant and the Restricted Stock Vesting Date had been reinvested in additional Shares on the date of payment of each such dividend. The number of Dividend Shares shall be calculated on a cumulative basis, so that (for calculation purposes only, and without an interest in Shares arising prior to the Restricted Stock Vesting Date) Dividend Shares shall be notionally attributed to Vesting Shares as at each individual payment date.

6.2 On the transfer to the Participant of the Vesting Shares under an Award in accordance with these rules, the Committee shall also arrange the transfer to the Participant of the Dividend Shares to which the Participant is entitled in relation to such Award under rule 6.1.

7. SPECIFIC PROVISIONS RELATING TO STOCK OPTIONS

7.1 At the time of granting Stock Options, the Committee shall specify the Option Vesting Date applicable to the Stock Option, or otherwise specify that the Stock Option is granted in Option Tranches (in which case rules 7.3 and 7.4 will apply). The Committee shall also specify at the Date of Grant such other conditions as it determines shall be applicable to the Stock Option.

7.2 In the case of Stock Options granted to executive directors of any member of the Group, a demanding performance condition must be satisfied prior to the exercise of the Stock Options. Such conditions shall:

(a) be determined by the Committee prior to the grant of the Stock Options; and

(b) be subject to a minimum of a three year Performance Period commencing with the Date of Grant or such other date as shall be specified by the Committee at the time of grant.

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7.3 Where the Committee determines to grant Stock Options in Option Tranches, such Stock Options will, unless otherwise permitted in these rules, only become exercisable on the following dates:

(a) as to the First Option Tranche, on the first anniversary of the Date of Grant;

(b) as to the Second Option Tranche, on the second anniversary of the Date of Grant;

(c) as to the Third Option Tranche, on the third anniversary of the Date of Grant; and

(d) as to the Final Option Tranche, on the fourth anniversary of the Date of Grant PROVIDED THAT the Final Option Tranche shall lapse in the event that the First, Second or Third Option Tranches have been exercised under this rule prior to the fourth anniversary of the Date of Grant.

7.4 Notwithstanding rule 7.3, the Committee may, if it thinks fit, grant Stock Options in Option Tranches that become exercisable on different anniversaries to those stated in rule 7.3. In that event:

(a) the earliest date on which an Option Tranche shall become exercisable shall be the first anniversary of the Date of Grant;

(b) the Stock Option shall not become exercisable in full before the third anniversary of the Date of Grant; and

(c) such part of the Stock Option as the Committee shall specify shall lapse if any Option Tranche is exercised before the third anniversary of the Date of Grant (or such later anniversary as the Committee shall specify). Such part of the Stock Option which lapses shall be treated as the Final Option Tranche for the purposes of these rules.

7.5 A Participant may exercise a Stock Option in whole or in part by giving notice in writing to the Company in the form prescribed by the Company specifying the Stock Option being exercised on that occasion, the number of Shares in respect of which the Option (or Option Tranche thereof) is being exercised and enclosing or arranging to provide cash payment in full of the aggregate Option Exercise Price in respect of those Shares. If the Stock Option is exercised in respect of some only of the Shares comprised in a Stock Option, the Company shall procure the issue of a letter to the Participant in respect of the balance or call in the original letter for endorsement.

7.6 Notwithstanding any other provision in these rules, a Stock Option shall lapse automatically on the earliest of:

(a) the expiry of the Option Period;

(b) the Participant ceasing to be an employee of a member of the Group (save as provided in rule 8);

(c) any of the dates specified in rule 10; and

(d) the Participant being declared bankrupt or entering into any general composition with or for the benefit of his or her creditors.

7.7 Where the Committee determines that it is appropriate, it may grant Stock Appreciation Rights in the place of Stock Options. Where Stock Appreciation Rights are so

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granted, all references to “Stock Option” in the rules of this Plan shall be treated as references to “Stock Appreciation Rights”. The terms of the Stock Appreciation Right shall be determined by the Committee prior to grant.

8. CESSATION OF EMPLOYMENT – STOCK OPTIONS AND RESTRICTED STOCK

8.1 Save as otherwise provided in these rules, an Award shall lapse automatically on the Participant ceasing to be an employee of a member of the Group.

8.2 Where a Participant ceases to be an employee of a member of the Group by reason of:

(a) injury, disability, ill-health or redundancy (as determined by the Committee);

(b) his or her employing company or business ceasing to be part of the Group; or

(c) any other reason if the Committee so decides in its absolute discretion then the following provisions shall apply:

(i) subject to the provisions of rule 8.3 below, any Restricted Stock which is subject to a performance condition and which has not already vested or lapsed in accordance with these rules shall remain in force subject to the performance condition as if the Participant had not ceased employment. For this purpose:

(A) where the cessation occurs before the First Restricted Stock Vesting Date, the Restricted Stock shall vest on the First Restricted Stock Vesting Date (if and to the extent that the relevant performance conditions are met) irrespective of the possibility that under the terms of the relevant grant a percentage of Shares would not otherwise vest until the Second Restricted Stock Vesting Date; and

(B) in relation to awards granted after 23 April 2014, where the cessation occurs between the First and Second Restricted Stock Vesting Dates, the Restricted Stock that would not otherwise vest until the Second Restricted Stock Vesting Date shall vest on the date of cessation of employment;

(ii) subject to the provisions of rule 8.3 below, any Restricted Stock which is not subject to a performance condition, and which has not already vested or lapsed in accordance with these rules, shall vest on cessation of employment;

(iii) any Stock Option which is subject to a performance condition (at the date the Participant ceases employment) shall continue subject to the performance condition as if the Participant had not ceased employment. The Stock Option shall become exercisable (if and to the extent that the relevant performance conditions are met) for a period of six months from the original Option Vesting Date at the end of which period the Stock Option will lapse; and

(iv) any Stock Option which is not subject to a performance condition (whether or not it is already exercisable at the date the Participant ceases employment) may be exercised at any time within the period of six months following cessation of employment and will then lapse.

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8.3 In determining the number of Shares which vest under a Restricted Stock Award for the purposes of rules 8.2(c)(i) and 8.2(c)(ii), the following shall apply:

the number of Shares over which the Restricted Stock Award vests shall be multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to the Participant’s leaving date, and B is the number of complete months from the Date of Grant to the First Restricted Stock Vesting Date. However, the Committee may in its absolute discretion determine that the Participant’s entitlement should not be scaled down or should be scaled down in part only (the extent of scaling down being determined by the Committee in its absolute discretion). For the avoidance of doubt, where a Participant holding an award granted under rule 5.3 ceases to be an employee after the First Restricted Stock Vesting Date in any of the circumstances set out in rule 8.2, the number of Shares that would otherwise have vested at the Second Restricted Stock Vesting Date (that is, if and to the extent that the relevant performance conditions were met at the First Restricted Stock Vesting Date) shall be unaffected by the A/B fraction.

8.4 For the purposes of rules 8.1 and 8.2 a Participant on maternity or paternity leave shall not be treated as ceasing to be an employee of a member of the Group until such Participant notifies his or her employer of his or her intention not to return to work or ceases to be entitled to exercise a right to return to work.

9. DEATH OF PARTICIPANT OR OTHER EXCEPTIONAL CIRCUMSTANCES – STOCK OPTIONS AND RESTRICTED STOCK

If a Participant dies while in service (or at any time after leaving service when he or she holds an Award at the time of his or her death) or in the event that the Committee determines that there are exceptional circumstances that apply to the Participant’s cessation of employment, the Committee shall determine in its absolute discretion what proportion (if any) of an Award may be exercised or shall vest early and the time at which or within which it may be exercised by him or her or by his or her legal personal representatives. For the avoidance of doubt, an Award exercisable under this rule may lapse at an earlier date by virtue of rule 10.

10. GENERAL OFFER FOR THE COMPANY, ETC – STOCK OPTIONS AND RESTRICTED STOCK

General Offer

10.1 If any person (either alone or together with any person acting in concert with him or her) obtains Control of the Company as a result of a general offer to acquire the whole of the share capital of the Company (other than those Shares which are already owned by him and/or any person acting in concert with him), then the following provisions shall apply:

(a) any Stock Option which is subject to a performance condition (whether or not it is already exercisable at the date on which the offer becomes unconditional in all respects) may be exercised, to the extent that the performance condition has been met as at the date on which the offer becomes unconditional in all respects, at any time within the period in rule 10.2 (and will then lapse);

(b) any Stock Option which is not subject to a performance condition (whether or not it is already exercisable at the date on which the offer becomes unconditional in all respects) may be exercised at any time within the period in rule 10.2 (and will then lapse); and

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(c) subject to the provisions of rule 10.6, any Restricted Stock shall vest on the date on which the offer becomes unconditional in all respects regardless of whether the Restricted Stock would not otherwise vest until the Second Restricted Stock Vesting Date. The Shares shall be released to the Participant as soon as practicable after the date on which the offer becomes unconditional in all respects.

10.2 Following a change of Control pursuant to rule 10.1 any Stock Option which has not been exercised (including non- exercise by reason of performance conditions not being met) shall (unless validly exchanged under rule 10.7) lapse on the earlier of the following dates:

(a) two months from the date on which the offer becomes unconditional in all respects; and

(b) one month after the date on which any person becomes bound or entitled to acquire Shares under sections 974-989 of the Companies Act 2006.

Scheme of Arrangement

10.3 If a court shall direct that a meeting of the holders of Shares be convened pursuant to section 895 of the Companies Act 2006 for the purposes of considering a scheme of arrangement of the Company then (unless rule 10.4 applies) the following shall apply:

(a) any Stock Option (whether or not it is already exercisable at the Relevant Date) may be exercised conditionally on either the scheme of arrangement being approved by the shareholders’ meeting or sanctioned by the court (as determined by the Committee in its absolute discretion) (the Relevant Condition), between the date of the court’s direction and twelve noon on the day immediately preceding the date for which the shareholders’ meeting (the Relevant Date) is convened; and any Stock Option not exercised by twelve noon on the Relevant Date shall cease to be exercisable between that time and the first date on which it can be determined whether or not the relevant condition is satisfied. If the Relevant Condition is not satisfied, the Stock Options shall continue. If the Relevant Condition is satisfied Stock Options shall, unless validly exchanged under rule 10.7, lapse automatically on the date on which the scheme of arrangement is sanctioned by the court.

Any Stock Option which is subject to a performance condition may only be exercised under this rule 10.3(a) to the extent that the performance condition has been met as at the Relevant Event.

Where new Shares would be issued on exercise of a Stock Option, the Committee shall endeavour to procure that, provided a Participant has conditionally exercised his or her Stock Option as described above prior to twelve noon on the Relevant Date, the scheme of arrangement shall be extended to such Participant as if each Share in respect of which the Stock Option was conditionally exercised had been allotted and issued to him or her by that time.

(b) subject to the provisions of rule 10.6, any Restricted Stock Award shall vest on the date on which the scheme of arrangement is sanctioned by the Court regardless of whether the Restricted Stock would not otherwise vest until the Second Restricted Stock Vesting Date. The Shares shall be released to the Participant as soon as practicable after the date on which the scheme of arrangement is sanctioned by the Court. If the Scheme of Arrangement is not sanctioned by the Court, the Restricted Stock Awards shall not vest but shall continue in force.

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10.4 Awards shall not without the consent of the Committee be exercisable or vest early under rule 10.3 if the purpose and effect of the scheme of arrangement is to create a new holding company for the Company, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the scheme of arrangement. In that event, the Committee shall endeavour to procure that an exchange of Awards is effected under rule 10.7.

Voluntary Winding-up

10.5 If notice is duly given of a resolution for a voluntary winding-up of the Company then a Participant may takes the following action:

(a) any Stock Option which is subject to a performance condition may be exercised, to the extent that the performance condition has been met as at the date of the resolution, at any time during the period of two months from the date of the resolution, failing which exercise the Stock Option shall lapse automatically;

(b) any Stock Option which is not subject to a performance condition may be exercised at any time during the period of two months from the date of the resolution, failing which exercise the Stock Option shall lapse automatically; and

(c) subject to the provisions of rule 10.6, any Restricted Stock Award shall vest and the Shares shall be released to the Participant as soon as practicable thereafter.

Application of performance conditions and pro-rating

10.6 In determining the number of Shares which vest under a Restricted Stock Award for the purposes of rules 10.1 to 10.5, the following shall apply:

(a) where any Restricted Stock Award that is subject to a performance condition becomes realisable before the end of the performance period under rules 10.1 to 10.5 the number of Shares which shall vest under the Restricted Stock Award shall be determined by the Committee by reference to the extent that the performance conditions are met as at the date of the relevant event. This number of Shares shall then be multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to the date of the relevant event and B is the number of complete months from the Date of Grant to the First Restricted Stock Vesting Date SAVE THAT the Committee may, in its absolute discretion, modify the number of Shares which shall vest under the Restricted Stock Award if it considers that the performance condition would have been met to a greater or lesser extent at the end of the full performance period. The Committee may also at its absolute discretion in appropriate circumstances (but not so as to result in an unjustifiably large vesting level) disapply or alter the fraction stated above to release a greater number of Shares if it considers that the contribution of the Participant to the creation of shareholder value during the Performance Period would not otherwise be properly recognised.

For the avoidance of doubt, where a relevant event occurs after the First Restricted Stock Vesting Date, the number of Shares that would otherwise have vested at the Second Restricted Stock Vesting Date (that is, if and to the extent that the relevant performance conditions were met at the First Restricted Stock Vesting Date) shall be unaffected by the A/B fraction; and

(b) where any Restricted Stock Award that is not subject to a performance condition become realisable under rules 10.1 to 10.5, the number of Shares which shall vest

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shall be the number of Shares under the relevant Restricted Stock Award multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to date of the relevant event, and B is the number of complete months from the Date of Grant to the Restricted Stock Vesting Date SAVE THAT the Committee may in its absolute discretion determine that the Participant’s entitlement should not be scaled down or should be scaled down in part only (the extent of scaling down being determined by the Committee in its absolute discretion).

Exchange of Awards

10.7 If any company (the Acquiring Company) obtains Control of the Company as a result of an event referred to in rules 10.1 or 10.3, each Participant may, at any time within one month of the change of Control, with the agreement of the Acquiring Company, release any Stock Option or Restricted Stock which has not lapsed (the Old Right) in consideration of the grant to him or her of a new award, which in the opinion of the Committee and the Acquiring Company is equivalent to the Old Right but relates to shares in a different company (whether the Acquiring Company itself or another company its group). Any performance conditions to which the Stock Option or Restricted Stock are subject shall cease to apply unless the Committee determines, in its absolute discretion, that they should continue to apply to the new award (subject to such alterations as the Committee deems appropriate.

11. ADJUSTMENT OF AWARDS

In the event of:

(i) any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation or rights issue or any consolidation, sub-division or reduction); or

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

then

(a) in relation to Stock Options, the Option Exercise Price and the number of Shares comprised in a Stock Option and any performance conditions to which the Stock Option is subject shall be adjusted in such manner as the Committee shall determine in its absolute discretion;

(b) in relation to Restricted Stock, the number of Shares subject to the Restricted Stock and any performance conditions to which the Restricted Stock is subject shall be adjusted in such manner as the Committee shall determine in its absolute discretion.

PROVIDED THAT:

(aa) in relation to both Stock Options and Restricted Stock, no adjustment shall be made pursuant to this rule unless and until the auditors for the time being of the Company (acting as experts not arbitrators) shall confirm in writing to the Committee that such adjustment is in their opinion fair and reasonable; and

(bb) in the case of Stock Options, no adjustment shall be made pursuant to this rule which would increase the aggregate amount payable on exercise of the Stock Options.

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12. ALLOTMENT OR TRANSFER OF SHARES ON EXERCISE OF AWARDS

12.1 Subject to any necessary consents, to payment being made for the Shares and to compliance by the Participant with the terms of the Plan, not later than 30 days after receipt of any valid notice of exercise, the Company shall either allot and issue, or procure the transfer of, Shares (including Treasury Shares) to the Participant (or to his or her nominee). The Company shall (unless the Shares are to be issued in uncertificated form) as soon as practicable deliver to the Participant (or his or her nominee) a definitive share certificate or other evidence of title in respect of such Shares.

12.2 The Company shall not be obligated to issue or deliver Shares in connection with any Award or take any other action under the Plan in a transaction subject to the requirements of any applicable securities law, any requirement under any listing agreement between the Company and any securities exchange or automated quotation system or any other law, regulation or contractual obligation of the company until the Company is satisfied that such laws, regulations, and other obligations of the Company have been complied with in full. The Company may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Shares under the Plan. Certificates representing Shares will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations and other obligations of the Company, and a legend or legends may be placed thereon to reflect such restrictions.

12A. MALUS AND CLAWBACK

12A.1 In relation to Awards granted on or after 23 April 2014 and notwithstanding any other provision in these rules, if, in the reasonable opinion of the Committee:

(a) an Award that has not yet vested is discovered to have been granted on the basis of a material misstatement or restatement of any audited financial accounts or other data; or

(b) before an Award vests, the Committee determines that there has occurred at any time misconduct: or

(c) events have occurred, during a period that was wholly or partly before the date on which an Award vested, in respect of the Company, any member of the Group or a relevant business unit, which have resulted in, or are reasonably likely to result in,:

(i) significant reputational damage;

(ii) a material adverse effect on its financial position; or

(iii) a material adverse effect on its business opportunities and prospects for sustained performance or profitability,

then the Committee may in its discretion at any time before an Award vests determine (acting fairly and reasonably) that the number of Shares over which an Award is granted shall be reduced to such amount or number (including to nil) as the Committee considers appropriate in the circumstances.

12A.2 In relation to Awards granted on or after 23 April 2014 and notwithstanding any other provision in these rules, if, in the reasonable opinion of the Committee:

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(a) an Award that has vested is discovered to have vested on the basis of a material misstatement or restatement of any audited financial accounts or other data; or

(b) the Committee determines that there occurred misconduct during a period that was wholly or partly before the date on which an Award vested; or

(c) events have occurred, during a period that was wholly or partly before the date on which an Award vested, in respect of the Company, any member of the Group or a relevant business unit, which have resulted in, or are reasonably likely to result in,:

(i) significant reputational damage;

(ii) a material adverse effect on its financial position; or

(iii) a material adverse effect on its business opportunities and prospects for sustained performance or profitability,

then the Committee may in its discretion at any time during the two year period immediately following the vesting of such Award determine (acting fairly and reasonably) that the Participant should repay to the Company (whether by re-transfer of Shares or payment of cash proceeds or otherwise) an amount equal to the full benefit, calculated on an after-tax basis, received by the Participant from such vesting, provided that the Committee may, at its discretion, determine that a lesser amount should be repaid. Each Participant shall be deemed to undertake, as a condition of participation in the Plan, to re-transfer Shares or pay cash in order to comply with this rule.

12A.3 For the purposes of Rule 12A.1 and 12A.2:

(a) the Award shall be deemed to have been granted over the reduced number of Shares (as the case may be); and

(b) any subsequent vesting of an Award shall be determined by reference to this reduced number of Shares,

save that if the number of Shares is reduced to nil, the Award shall be treated as if it had never been granted and a Participant (including a Participant who has left employment before the date on which it vests other than by reason of death) shall have no rights to any Shares.

13. RIGHTS ATTACHING TO SHARES ALLOTTED OR TRANSFERRED PURSUANT TO AWARDS

13.1 All Shares allotted or transferred upon the exercise of an Option or vesting of an Award shall rank pari passu in all respects with the Shares in issue at the date of exercise save as regards any rights attaching to such Shares by reference to a record date prior to the date of exercise.

13.2 Any Shares acquired on exercise or vesting of Awards shall be subject to the articles of association of the Company from time to time.

14. AVAILABILITY OF SHARES

14.1 The Company shall at all times keep available for issue sufficient authorised but unissued Shares to satisfy Awards under which Shares may be allotted or shall otherwise

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procure that Shares are available for transfer in satisfaction of Awards. Treasury Shares may be used to satisfy Awards.

14.2 The Company will, at its expense, make application to The London Stock Exchange for admission to the Official List of Shares allotted on the exercise of any Stock Options, and will take equivalent steps with the New York Stock Exchange in relation to ADSs.

15. ADMINISTRATION AND AMENDMENT

15.1 The decision of the Committee shall be final and binding in all matters relating to the Plan and it 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 performance conditions attaching to any Award may be amended following the Date of Grant but before the expiry of the Performance Period if:

(i) events happen following the Date of Grant with the result that the circumstances which prevailed at the Date of Grant which were relevant to the conditions that were originally imposed regarding the exercise or vesting of the Award have subsequently changed; and

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

(A) equally demanding; and

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

(b) the Committee shall not make any amendment that would materially prejudice the interests of existing Participants except with the prior consent or sanction of Participants who, if they exercised their Awards in full, would thereby become entitled to not less than three-quarters of all the Shares which would fall to be allotted or transferred upon exercise in full of all outstanding Awards; and

(c) no amendment to the advantage of Executives or Participants may be made to:

(i) the definition of Executive in rule 1.1;

(ii) the limit on the number of Shares available for issue under the Plan;

(iii) the basis for determining the number of Shares comprised in either Stock Options or Restricted Stock;

(iv) the terms of Shares to be provided under the Plan; and

(v) the adjustment provisions of rule 11 of the Plan

without the prior approval of the Company in general meeting except in the case of minor amendments to benefit the administration of the Plan, to take account of a change in legislation or developments in the law affecting the Plan or to obtain or maintain favourable tax, exchange control or regulatory treatment for Executives and Participants or any member of the Group; and

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(d) 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 in writing to such cancellation.

15.2 Notwithstanding any other provision of the Plan, the Committee may establish appendices to the Plan for the purpose of granting Awards to Executives who are or may become primarily liable to tax outside the United Kingdom on their remuneration, subject to such modifications as may be necessary or desirable to take account of overseas tax, exchange control or securities laws provided that any Shares made available under such appendices shall count towards the limit set out in rule 3 hereof.

16. GENERAL

16.1 Any member of the Group may provide money to the trustees of any trust or any other person to enable them or him or her 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 not prohibited by sections 678-680 of the Companies Act 2006.

16.2 The rights and obligations of a Participant under the terms and conditions of his or her office or employment shall not be affected by his or her participation in the Plan or any expectation or right which (notwithstanding rule 2.1) he or she believes he or she may have to participate in the Plan. An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of his or her office or employment with any company for any reason whatsoever insofar as those rights arise, or may arise, from his or her ceasing to have rights under or be entitled to exercise any Award 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 shall be deemed to be varied accordingly.

16.3 The existence of any Award shall not affect in any way the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s capital structure, or any merger or consolidation of the Company, 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 any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

16.4 Any notice or other document required to be given under or in connection with the Plan may be delivered to a Participant or sent by post to him or her at his or her home address according to the records of his or her employing company or such other address as may appear to the Company to be appropriate. Notices sent by post shall be deemed to have been given on the day following the date of posting. 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).

16.5 Benefits under the Plan shall not be pensionable.

16.6 The Company, or where the Committee so directs any Subsidiary, shall pay the appropriate stamp duty on behalf of Participants in respect of any transfer of Shares on the exercise of Awards, and the stamp duty reserve tax costs of creating ADSs.

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16.7 These rules shall be governed by, and construed in accordance with, the laws of England.

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APPENDIX 1

Tax favoured part of the Plan

For any Executive to whom the Committee wishes to grant Stock Options under a Schedule 4 CSOP Scheme, the following provisions shall apply:

(A) All the provisions of the Plan shall apply to the grant of Stock Options under this Appendix subject to the modifications contained in the following paragraphs.

(AA) In the event of any conflict between the rules of the Plan and this Appendix, the rules of this Appendix shall prevail for Stock Options granted under Schedule 4 to ITEPA. This Appendix is intended to be Schedule 4 CSOP Scheme for the purposes of ITEPA and the Appendix and any Stock Option granted under it shall be interpreted, operated and administered in a manner that is consistent with that intention and in the case of any conflict between this Appendix and the provisions of sections 520 to 526 and Schedule 4 to ITEPA (the legislation), the legislation shall prevail.

(B) The definition of Executive shall be construed so that:

(i) no Stock Option may be granted under this Appendix to a director of any member of the Group unless such director is required to devote not less than 25 hours per week to the affairs of the Group; and

(ii) no Stock Option may be granted under this Appendix to an Executive who is ineligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.

(C) The definition of Shares shall be subject to the conditions that:

(i) they comprise ordinary shares in the capital of the Company (and not ADSs); and

(ii) they satisfy paragraphs 16 to 20 of Schedule 4 to ITEPA.

(CA) The below listed definitions shall be inserted in rule 1.1 as follows:

“Market Value means, in relation to Shares on any day, for so long as such Shares are listed on a recognised stock exchange, their middle-market quotation as derived from the relevant stock exchange on which the Shares are listed or, where such Shares are no longer listed on a recognised stock exchange, the meaning given to that term by paragraph 36 of Schedule 4 to ITEPA, in each case determining (if so required for the purposes of any relevant provision in Schedule 4 to ITEPA) the Market Value of a Share that is subject to any Restriction as if it were not subject to the Restriction;

Non-UK Company Reorganisation Arrangement has the meaning given to that term by paragraph 35ZA of Schedule 4 to ITEPA;

Restriction has the meaning given to that term by paragraph 36(3) of Schedule 4 to ITEPA;

Schedule 4 CSOP Scheme has the meaning given to that term by paragraph 1 of Schedule 4 to ITEPA;”

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(CB) The definition of Share Price shall be amended so as to insert in (a) the words “, determining (if so required for the purposes of any relevant provision in Schedule 4 to ITEPA) the Share Price of a Share that is subject to a Restriction as if it were not subject to the Restriction” following “in relation to a Share on any Dealing Day, the middle market quotation for a Share as derived from the Daily Official List of The London Stock Exchange”.

(D) Rule 2.3 shall not apply to a Stock Option granted under this Appendix.

(DA) A new rule 2.7 shall be inserted as follows:

“2.7 The Committee shall ensure that as soon as reasonably practicable after the Date of Grant a Participant is notified of the following matters:

(a) whether or not any Shares that are subject to the Stock Option may be subject to any Restrictions and, if so, the details of any such Restrictions;

(b) the times at which the Stock Option may be exercised (in whole or in part);

(c) the circumstances under which the Stock Option will lapse or be cancelled (in whole or in part) and the conditions to which the exercise of the Stock Option is subject (in whole or in part);

(d) any mechanism (applied fairly and reasonably) by which any of the terms applying to a Stock Option may be varied other than by way of any adjustment referred to in rule 11.

A Participant shall be deemed to have been notified of such matters if a copy of these Rules is made available to him.”

(E) A new rule 4.3 shall be inserted as follows:

“4.3 Notwithstanding any other provision of these rules, no Executive shall be granted a Stock Option which would, at the proposed Date of Grant, cause the aggregate of the Market Value of the Shares under Stock Option (determined at their date of grant) of subsisting Stock Options held by him pursuant to a grant under this Appendix and subsisting options held by him under any Associated Plan, to exceed £30,000 (or such other amount as shall be specified under paragraph 6 of Schedule 4 of ITEPA from time to time).”

For the purposes of this paragraph (E) Associated Plan means any Schedule 4 CSOP Scheme (other than the Plan but excluding any savings-related share option scheme) and established by the Company or an associated company of the Company within the meaning of section 416 of the Income and Corporation Taxes Act.

(F) Any performance condition imposed under rules 7.1 or 7.2, must be objective and comply with the terms of Schedule 4 to ITEPA.

(G) Where Stock Options are granted in Option Tranches under rules 7.3 or 7.4, the Committee may grant such Option Tranches as it thinks fit (if any) under this Appendix.

(H) Rule 7.7 shall not apply to this Appendix.

(I) A new Rule 5.8 shall be inserted as follows:

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“5.8 A Stock Option granted under this Appendix may be granted subject to such conditions of exercise for payment of income tax, employees’ national insurance contributions and employer’s national insurance contributions liability as the Committee may determine (including the right to sell on the Participant’s behalf sufficient Shares to satisfy any liability to taxation or employee national insurance contributions or employer national insurance contributions) and if any condition is imposed relating to the assumption, payment or reimbursement by the Participant of employer’s national insurance contributions liability, such conditions shall comply with any applicable legislation or regulations and the Committee shall be entitled to waive in whole or in part the Participant’s obligation in respect of such liability.”

(J) Any Stock Option granted under this Appendix may only be exercised by a Participant who is not ineligible to participate in the Plan by virtue of paragraph 9 of Schedule 4 to ITEPA.

(K) Rule 9 shall be construed so that all Stock Options granted under this Appendix shall be exercisable in full for a period of one year following the date of death (and shall then lapse).

(KA) With regards to Stock Options granted on or following 6 April 2014, the final sentence in rule 9, “For the avoidance of doubt, an Award exercisable under this rule may lapse at an earlier date by virtue of rule 10” shall not apply. Instead, the sentence shall be replaced with: “For the avoidance of doubt, an Award exercisable under this rule 9 may continue to be exercised notwithstanding the lapse provisions contained in rules 7.6 and 10.2A to 10.3C”

(KB) Rules 10.1 to 10.3 shall not apply to a Stock Option granted under this Appendix. Instead new rules 10.1A, 10.2A, 10.3A, 10.3B and 10.3C shall be inserted as follows:

“General Offer

10.1A If any person (either alone or together with any person acting in concert with him) (i) makes a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that, if it is met, the person making the offer will have Control of the Company; or all the Shares in the Company which are of the same class as those acquired by the exercise of a Stock Option; or

(ii) is bound or entitled to acquire Shares in the Company under sections 979 to 982 of the Companies Act 2006 (or would be so entitled but for the fact that there were no dissenting shareholders), then the following provisions shall apply:

(a) any Stock Option which is subject to a performance condition (whether or not it is already exercisable at the date on which the offer becomes unconditional in all respects) may be exercised at any time within the period in rule 10.2A (and will then lapse); and

(b) any Stock Option which has satisfied its performance condition (or is not subject to a performance condition) may be exercised at any time within the period in rule 10.2A (and will then lapse).

10.2A Following a change of Control pursuant to rule 10.1A any Stock Option which has not been exercised (including non-exercise by reason of performance

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conditions not being met) shall (unless validly exchanged under rule 10.7A) lapse on the earlier of the following dates:

(a) six months from the date on which the offer becomes unconditional in all respects; and

(b) one month after the date on which any person becomes bound or entitled to give a notice under sections 979 to 982 of the Companies Act 2006 to acquire any Shares.

Scheme of Arrangement

10.3A If under section 899 of the Companies Act 2006 a court sanctions a compromise or arrangement applicable to or affecting (i) all the ordinary share capital of the Company or all the shares of the same class as the shares to which the Stock Options relate; or (ii) all the Shares, or all the Shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP Scheme, then (unless rule 10.4 applies) the following shall apply:

(a) any Stock Option (whether or not it is already exercisable) may be exercised within six months of the date the scheme of arrangement is sanctioned by the court (the Relevant Date); and any Stock Option not exercised within 6 months of the Relevant Date shall, unless validly exchanged under rule 10.7A, lapse at the end of the 6 month period;

(b) where new Shares would be issued on exercise of a Stock Option, the Committee shall endeavour to procure that, provided a Participant has conditionally exercised his or her Stock Option as described above prior to twelve noon on the Relevant Date, the scheme of arrangement shall be extended to such Participant as if each Share in respect of which the Stock Option was conditionally exercised had been allotted and issued to him or her by that time.

Non-UK Company Reorganisation Arrangement

10.3B If any person obtains Control of the Company as a result of a Non-UK Company Reorganisation Arrangement applicable to or affecting (i) all the ordinary share capital of the Company or all the Shares of the same class as the Shares to which the Stock Options relate; or (ii) all the Shares, or all the Shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP Scheme, then (unless rule 10.4 applies), any Stock Option (whether or not it is already exercisable) may be exercised within six months following the date the change of Control of the Company becomes binding on the shareholders covered by it (the Relevant Event); and any Stock Option not exercised within 6 months of the Relevant Event shall, unless validly exchanged under rule 10.7A, lapse at the end of the 6 month period.

General

10.3C Notwithstanding any provision to the contrary, where this Rule 10 applies or is expected to apply, and in consequence of an event mentioned in rule 10.1A, 10.3A or 10.3B (each an Event), the Shares that may be acquired on the exercise of a Stock

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Option no longer meet, or are not expected to meet, the requirements of paragraphs 16 to 18 (inclusive) and 20 of Part 4 of Schedule 4, the Committee may determine that Stock Options may be exercised within a period of 20 days ending on the Event (conditional upon and with effect from that Event occurring) or a period of 20 days after the Event. Any outstanding Stock Options that are not so exercised within the 20 day period after the Event shall lapse automatically on the expiration of that period. The Committee shall act fairly and reasonably in exercising its discretion under this rule.” ²

(L) Rule 10.7 shall not apply to a new Stock Option granted under this Appendix following an event specified in rule 10.1A or 10.3A. Instead a new rule 10.7A shall be inserted as follows:

“10.7A If any company (the acquiring company):

(a) obtains Control of the Company as a result of making:

(i) a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the acquiring company will have Control of the Company; or

(ii) a general offer to acquire all the Shares; or

(b) obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the Court under section 899 of the Companies Act 2006; or

(c) becomes bound or entitled to acquire shares in the Company under sections 979 to 982 of that Act (or would be so entitled but for the fact that there were no dissenting shareholders); or

(d) obtains Control of the Company as a result of a Non-UK Company Reorganisation Arrangement which has become binding on the shareholders covered by it,

in each case, not including any Shares already held by the acquiring company, each Participant may at any time within the appropriate period (which expression shall be construed in accordance with paragraph 26(3) of Schedule 4 to ITEPA), by agreement with the acquiring company, release any Stock Option which has not lapsed (the old option) in consideration of the grant to him of an option (the new option) which (in accordance with rule 10.7B below) is equivalent to the old option but relates to shares in a different company (whether the acquiring company itself or another company falling within paragraph 16(b) or (c) of Schedule 4) (the new grantor).

10.7B The new option shall not be regarded for the purposes of rule 10.7A as equivalent to the old option unless the conditions set out in paragraphs 16 to 20 of Schedule 4 to ITEPA are satisfied and, in relation to the new option, the provisions of the Scheme shall be construed as if:

(a) the new option was an option granted under the Scheme at the same time as the old option;

² HMRC has confirmed in informal guidance that such provision may apply to all options whenever granted i.e. it has retrospective effect.

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(b) references to the Company in rules 8 to 14 and 16 and in the definition of Group were references to the new grantor;

(c) references to the Committee in rules 8 to 14 and 16 were references to the remuneration committee of the new grantor;

(d) references to Shares were references to shares in the new grantor; and

(e) any performance condition imposed under rule 5.2 has been satisfied.”

(M) Rule 11(ii) shall not apply to a Stock Option granted under this Appendix. In construing rule 11(i) for the purposes of this Appendix the words “or reserves” shall be deleted therefrom.

(MA) Rule 11(a) shall be amended so as to replace the words “in such manner as the Committee shall determine in its absolute discretion” with the following:

“as far as necessary to take account of the variation and no adjustment shall take effect unless the total Market Value of the Shares under the Stock Option is immediately after the adjustment or adjustments substantially the same as what it was immediately before the adjustment or adjustments and the aggregate Option Exercise Price of such Stock Option is immediately after the adjustment or adjustments substantially the same as what it was immediately before the adjustment or adjustments. No adjustment shall be made if it would result in the requirements of Schedule 4 to ITEPA not being met in relation to any Stock Option.”³

(N) In addition to its powers under rule 15.1(c), the Committee may make such amendments to this Appendix as are necessary or desirable to obtain or maintain the status of this Appendix as a Schedule 4 CSOP Scheme.

(O) For as long as this Appendix is intended to continue to be a Schedule 4 CSOP Scheme, no amendment to the rules of the Plan or this Appendix may take effect as regards this Appendix where the amendment would result in the requirements of Schedule 4 to ITEPA not being met. The Company shall provide such information and make such declarations in relation to any amendment of a key feature as is required for the purpose of Schedule 4 to ITEPA.

³ Although the rules do not require HMRC approval prior to an adjustment of a Stock Option, HMRC’s informal guidance continues to state that where an adjustment is proposed this will need to be agreed with the Shares and Valuation Division in advance.

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EX-99.3

Exhibit 99.3

PEARSON PLC

The Pearson Long Term Incentive Plan

Approved by shareholders on 24 April 2020

Adopted by the Board on 24 April 2020

CONTENTS

RULE		PAGE
1.	GRANT OF AWARDS		1
2.	PERFORMANCE CONDITIONS		1
3.	VESTING OF AWARDS		2
4.	HOLDING PERIOD		3
5.	ENTITLEMENT TO DIVIDEND EQUIVALENTS		4
6.	LEAVERS		5
7.	ISSUE, TRANSFER OR LISTING OF SHARES		6
8.	LAPSE OF AWARDS		7
9.	CHANGE OF CONTROL ETC.		7
10.	OTHER CORPORATE EVENTS		9
11.	MALUS AND CLAW-BACK ARRANGEMENTS		10
12.	TAXATION		11
13.	GRANT LIMITS		12
14.	AMENDMENT AND ADMINISTRATION		13
15.	GENERAL		13
16.	GOVERNING LAW		15
Appendix A	Definitions		16
Appendix B	Rules of the Pearson Long Term Incentive Plan – Eligible US Employees		21
Appendix C	Rules of the Pearson Long Term Incentive Plan – Eligible Canadian Employees		23

i

THE PEARSON LONG TERM INCENTIVE PLAN

RULES

1. GRANT OF AWARDS

1.1 The Committee may, in its absolute discretion, determine which Employees (if any) will be selected for the grant of an Award. Awards may then be granted to selected Employees during a Grant Period.

1.2 The Committee will determine whether an Award will take the form of an Option, a Conditional Award or a Phantom Award. An Employee may be granted any form of Award or any combination of Awards.

1.3 Each Award will be evidenced by an Award Certificate or such other documentation as the Committee may determine in its absolute discretion.

1.4 Every Award granted under this Plan will be personal to the Participant to whom it is granted and, except to the extent necessary to enable a personal representative to realise the Award following the death of a Participant, neither the Award nor the benefit of that Award may be transferred, assigned, charged or otherwise alienated. An Award will lapse immediately if the Participant to whom it was made purports to transfer, charge or otherwise alienate that Award otherwise than as permitted by this Rule 1.4.

1.5 The grant of any Award under the Plan will be subject to any applicable Dealing Restrictions.

2. PERFORMANCE CONDITIONS

2.1 Subject to Rule 2.2 the Committee may determine that the Vesting of an Award will be dependent upon the satisfaction of Performance Conditions.

2.2 The Vesting of Awards granted to executive directors of the Company will always be made subject to the terms of the directors’ remuneration policy as approved by shareholders from time to time.

2.3 The Committee can set different conditions for Awards granted in different years or to different Participants at the same time (in terms of the type of condition, the weighting given to that condition and any targets applicable to each condition).

2.4 The Committee may determine that an Award should be subject to multiple Performance Conditions or that an Award should be sub-divided and that each part be subject to a different condition.

2.5 Subject to these Rules, an Award subject to Performance Conditions will Vest as to the percentage of Shares determined by the Committee in accordance with the Performance Conditions.

2.6 As soon as reasonably practicable after the end of any applicable Performance Period the Committee will notify Participants of the extent to which the Performance Conditions have been satisfied.

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2.7 An Award will lapse to the extent that any applicable Performance Conditions are not met at the relevant Vesting Date.

2.8 The Committee may vary the Performance Conditions applying to existing Awards if an event occurs or there are circumstances (for example, an acquisition or disposal of a business or a significant part of a business) such that the conditions are no longer a fair measure of performance, provided that in the reasonable opinion of the Committee the new conditions are not materially less challenging than the original conditions would have been but for the event or circumstances in question. In exercising any power to vary the Performance Conditions, the Committee will have regard to ensuring fairness between Participants and shareholders.

2.9 The Committee will, as soon as reasonably practicable, notify a Participant of any determination made under Rule 2.8.

3. VESTING OF AWARDS

3.1 Except as otherwise permitted in these Rules and unless the Committee decides otherwise at the Date of Grant, an Award will Vest on the Vesting Date to the extent that any applicable Performance Conditions which apply to that Award have been met.

3.2 An Award will only Vest in accordance with Rule 3.1 if the Participant:

(a) has complied with all regulatory and legal requirements that may apply to the Participant in respect of or in connection with the Award;

(b) has provided any relevant information, and made any relevant elections, as reasonably requested by the Company; and

(c) is free from any Dealing Restrictions, including any Dealing Restrictions that would apply in respect of arrangements required by the Company to satisfy any tax liability in connection with the Award.

The Award will, unless the Committee determines otherwise, lapse on the Vesting Date to the extent these conditions have not been satisfied. Where condition (c) is not satisfied, the Award will Vest on the earliest date on which it is satisfied.

3.3 Save as otherwise permitted in these Rules, and subject to any applicable Holding Period, an Award may only be realised:

(a) if the Award has Vested; and

(b) by a Participant who has remained an Employee from the Date of Grant to the Vesting Date.

3.4 Subject to any arrangements to give effect to the Holding Period in accordance with Rule 4, Vested Shares under Conditional Awards will be released to Participants within 60 days of the Vesting Date. A Participant need take no action to realise a Conditional Award other than pay the Company any amount specified at the Date of Grant to realise the Award.

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3.5 Subject to Rule 9.2, Vested Options will be exercisable up until the tenth anniversary of the Date of Grant (or such shorter period as the Committee may determine on the Date of Grant) after which they will lapse. Where an Award is granted in the form of an Option, a Participant may, subject to any Dealing Restrictions, exercise a Vested Option by written notice to the Company in the form required by the Company at any time during the specified exercise period following the Vesting Date. A notice of exercise will take effect on the date it is accepted as valid 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 and any arrangements to give effect to the Holding Period in accordance with Rule 4, the Shares comprised in a Vested Share Option will be issued or transferred to the Participant within 60 days of receipt of the notice of exercise.

3.6 Vested Phantom Awards will be satisfied in the next available payroll following the Vesting Date by a payment equal to the Market Value of the Vested Shares under the Phantom Award on the Vesting Date.

3.7 The Committee may, in its absolute discretion, decide to amend the vesting outcome of an Award when it considers it appropriate to do so to reflect the wider performance of the Company or any member of the Group and/or outcomes for shareholders over the Vesting Period. Any such amended vesting outcome may operate, at the Committee’s absolute discretion, in respect of any Award or Awards held by:

(a) an individual Participant;

(b) such wider group of Participants, as the Committee may determine to be appropriate; or

(c) all Participants.

3.8 Notwithstanding the above, the Committee will have discretion to delay the vesting of a Participant’s Award if on the Vesting Date:

(a) the Participant is suspended from their employment by reason of suspected Misconduct; or

(b) the Committee is considering or intends to consider exercising its discretion under Rule 11.1 in relation to the Award.

4. HOLDING PERIOD

4.1 The Committee may in its absolute discretion determine prior to the Date of Grant whether or not to impose a mandatory Holding Period in respect of an Award (a Holding Period). Notwithstanding any other provisions of these Rules, the Shares or Options subject to the Holding Period may not be transferred, assigned, sold, pledged or otherwise disposed of during the Holding Period save (in the case of Shares) as to satisfy any Tax liability of the Participant incurred in connection with the Award. The Committee may impose such requirements as it considers necessary or desirable to ensure Participants observe the Holding Period including, but not limited to, requiring Participants to hold the Shares via a nominee or the Trustees.

Page 3 of 25

4.2 During the Holding Period, the Participant will (subject to the terms of any applicable nominee arrangement) be entitled to vote and, subject to Rule 4.3, to receive dividends and have all other rights of a shareholder in respect of any Vested Shares (excluding notional Shares) that are subject to such Holding Period.

4.3 Any cash dividends or other cash payments received in respect of Vested Shares that are subject to a Holding Period will, where applicable, be held by the nominee or the Trustees until the end of the Holding Period. Any interest or other income paid on such cash amounts will be subject to the same restrictions as the cash amounts.

4.4 A Participant will take such steps as the Committee may reasonably require and respond to such information requests as may reasonably be made to satisfy the Committee as to the Participant’s observance of the Holding Period.

4.5 The Committee may at any time during a Holding Period determine that the Holding Period shall cease to apply to all or some of the Shares or Options subject to that Holding Period.

5. ENTITLEMENT TO DIVIDEND EQUIVALENTS

5.1 The Committee may in its discretion grant an Award on the basis that it carries a right to Dividend Equivalents.

5.2 If an Award has been granted on the basis that it carries a right to Dividend Equivalents, the Participant will, subject to Rule 5.4, be entitled to be issued with or transferred Shares (or in the case of a Phantom Award, cash), equal in value to the ordinary dividends which would have been paid on the Shares which Vested during the Vesting Period, such Dividend Equivalent to accrue on the date on which the Company pays an interim or final dividend in respect of Shares and to be paid on or around the date an Award is satisfied by the Company.

5.3 The number of Shares (or in the case of a Phantom Award, cash) to which the Participant becomes entitled under Rule 5.2 will be calculated in such manner as the Committee in its absolute discretion determines, save that unless the Committee determines otherwise it will be calculated by reference only to ordinary dividends and without regard to special dividends or distributions, super dividends or dividends-in-specie.

5.4 The Committee may in its absolute discretion satisfy any entitlement to Dividend Equivalents arising in accordance with Rule 5.2 by making a cash payment with an equivalent Market Value to the Shares representing Dividend Equivalents at the time of Vesting.

5.5 For the avoidance of doubt, any payment referred to in this Rule 5 does not represent an entitlement to actual dividends on the underlying Shares that are the subject of an Award.

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6. LEAVERS

6.1 Save as otherwise provided in these Rules, an Award that has not Vested will lapse automatically on the Participant ceasing to be an Employee or, on the date the Employee gives or is given notice of termination of employment for any reason.

6.2 Where a Participant ceases to be an Employee at any time before the Vesting Date applicable to an Award by reason of:

(a) death;

(b) injury, disability, ill-health; or

(c) redundancy (as determined by the Committee in its absolute discretion);

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

(e) any other reason where the Committee so determines in its absolute discretion,

their Award will continue and will Vest on the original Vesting Date subject to the achievement of any Performance Conditions at that time provided that the number of Shares in respect of which an Award will Vest will (subject to any adjustment under Rule 3.7) be reduced by multiplying it by the fraction A/B (where A is that part of the Vesting Period measured in complete months from the start of the Vesting Period to the Termination Date (and which cannot be greater than B) and B is a number equal to the number of months in the Vesting Period) save that:

(i) Awards (whether subject to Performance Conditions or not) may be realised on such earlier date as may be determined by the Committee (being no earlier than the Termination Date);

(ii) the Committee may, in its absolute discretion, disapply or alter the relevant fraction to release fewer Shares, or a greater number of Shares if it considers the Participant’s contribution to the business of the Group would not otherwise be appropriately recognised; and

(iii) Vesting may be delayed in accordance with Rule 3.8.

Failing any such realisation the Awards will lapse automatically and, for the avoidance of doubt, an Award realisable under this Rule 6 may lapse at an earlier date by virtue of Rule 9.

6.3 Where a Participant holds Vested Shares or Options that are subject to a Holding Period and ceases to be an Employee during that Holding Period (or where the Participant gives or is given notice of termination of employment for any reason during that Holding Period) such Shares or Options will continue to be subject to the Holding Period imposed by the Committee save that the Committee may, at its discretion, allow early release of some or all of the Vested Shares or Options prior to the end of the Holding Period.

Page 5 of 25

6.4 A Participant will not cease to be an Employee for the purposes of this Rule 6 if they cease to be employed by a member of the Group but continue to be or are immediately afterwards employed by another member of the Group.

6.5 Without prejudice to Rule 10.1, where a Participant ceases to be employed by a member of the Group at any time before the Vesting Date applicable to an Award by reason of the demerger by the Company of the business or division in which they are employed, the Committee may determine for some or all Participants leaving the Group as a result of the demerger that part or all of the Award will Vest (in which case the provisions of Rule 6.2 will apply) and/or that Awards held by such Participants must be rolled over into equivalent awards over shares in the demerged company (on such terms as the Committee may agree with that company).

7. ISSUE, TRANSFER OR LISTING OF SHARES

7.1 Subject to Rule 7.2, the Committee will procure the issue or the transfer of Shares (which may include Treasury Shares) pursuant to: (i) the realisation of a Conditional Award within 60 days following the Vesting Date of the Award; and (ii) pursuant to the exercise of an Option, within 60 days of receipt of the notice of exercise by the Company.

7.2 Where for any reason the Committee considers that it is or will be impractical to deliver Shares following Vesting of an Award, it may instead elect to pay or procure the payment of the equivalent Cash Amount, subject to deductions for any Tax or other levy which the Committee reasonably determines should be or is required to be deducted from the Cash Amount.

7.3 The Committee will arrange for a Participant to be notified as soon as reasonably practicable of any determination pursuant to Rule 7.2 and, where relevant, to receive information on the revised terms of their Award. Any Award subject to a determination pursuant to Rule 7.2 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 Conditions, Performance Period and Vesting Date will be unaffected.

7.4 Shares to be issued pursuant to the Plan will rank pari passu in all respects 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 issue.

7.5 For so long as the Shares are admitted to Listing, application will be made for any newly issued ordinary shares to be admitted to such listing and admitted to trading on the London Stock Exchange.

7.6 Shares to be transferred pursuant to the Plan will be transferred free of all liens, charges and encumbrances and together with all rights attaching thereto.

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8. LAPSE OF AWARDS

8.1 Awards will lapse upon the occurrence of the earliest of the following events:

(a) to the extent that it is determined by the Committee that any Performance Conditions applicable to an Award have not been met, following the expiry of the relevant Performance Period;

(b) other than in the circumstances specified in Rule 6.2, the Participant ceasing to be an Employee or the date on which an Employee gives or is given notice of termination of employment for any reason;

(c) to the extent that all or part of the Award is not realised pursuant to the operation of Rule 6.2;

(d) in relation to an Award which is granted in the form of an Option, following the expiry of the exercise period specified by the Committee;

(e) the expiry of any relevant period specified in Rule 9;

(f) unless the Committee determines otherwise, the Participant being deprived of the legal or beneficial ownership of the Award by operation of law, or doing or omitting to do anything which causes them to be so deprived including becoming or being declared bankrupt; or

(g) any purported transfer, charge, assignment or alienation of an Award otherwise than as permitted by Rule 1.4.

9. CHANGE OF CONTROL ETC.

9.1 This Rule 9 applies if:

(a) any person (either alone or together with any person acting in concert with him) obtains Control of the Company as a result of making:

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

(ii) a general offer to acquire all of the Shares;

(b) any person proposes to obtain Control of the Company in pursuance of a compromise or arrangement sanctioned by the Court under section 899 of the Companies Act 2006; or

(c) notice is given of a resolution for the voluntary or compulsory winding-up of the Company,

(each a Relevant Event).

9.2 Where this Rule 9 applies and subject to Rules 9.3 to 10.3 below, all outstanding Awards will automatically Vest and, in the case of an Award granted in the form of an Option will be automatically exercised on the

Page 7 of 25

Relevant Date provided that any exercise price payable by the Participant on exercise is equal to or less than the relevant offer price or consideration (as determined by the Committee). Where this Rule 9 applies and subject to Rules 9.3 to 10.3 below, any outstanding Awards granted in the form of Options that are not exercised on the Relevant Date will lapse automatically.

Proportion of Award that Vests

9.3 The number of Shares in respect of which the Award Vests on the Relevant Date will be determined by the Committee as follows:

(a) by reference to the extent to which any applicable Performance Conditions are met at the Relevant Date, subject to such modification as the Committee may consider appropriate in light of the Relevant Event, including if it considers that the Performance Conditions would have been met to a greater or lesser extent at the end of the original Performance Period; and

(b) subject to any adjustments under Rule 3.7 by multiplying the resulting number of Shares by the fraction A/B (where A is the number of complete months from the Date of Grant until the Relevant Date and which will not be greater than the total number of months in the Vesting Period and B is equal to such number of months in the original Vesting Period), save that in any particular case, the Committee may, in its absolute discretion, disapply, in whole or in part, the application of the time pro-rating fraction.

Internal Reorganisation

9.4 Without prejudice to the operation of Rules 9.5 to 9.8 below, Awards will not Vest and Options will not be exercised without the consent of the Committee under this Rule 9 if the purpose and effect of the Relevant Event, together with any associated transactions, is to create a new holding company for the Company, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the Relevant Event. Unless the Committee determines otherwise in its absolute discretion, an Award will in such circumstances be exchanged automatically for an equivalent award in accordance with Rules 9.5 to 9.8 below and notice of a replacement award will be issued to each affected Participant accordingly.

Exchange of awards

9.5 If any other business entity (the Acquiring Company):

(a) obtains Control of the Company as a result of making:

(i) a general offer to acquire the whole of the issued and to be issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the Acquiring Company will have Control of the Company; or

(ii) a general offer to acquire all the Shares; or

Page 8 of 25

(b) proposes to obtain Control of the Company in pursuance of a compromise or arrangement sanctioned by the Court under section 899 of the Companies Act 2006 or its equivalent under applicable law,

and the Acquiring Company notifies Participants or the Company of an offer of a replacement Award, then, on the Relevant Date, for any Award which has not lapsed (the Old Award) (i) a Participant may elect to release and accept in consideration of that release an award (the New Award) which (in the opinion of the Committee) is equivalent to the Old Award but relates to shares in a different company (whether the Acquiring Company itself or another company) (the New Grantor); or (ii) Old Awards will, if the Committee so determines, be exchanged automatically for the New Awards.

9.6 The provisions of the Plan will be construed as if:

(a) the New Award was an award granted under the Plan at the same time as the Old Award;

(b) references to the Company in the Rules were references to the New Grantor;

(c) references to the Committee in the Rules were references to the board of directors of the New Grantor or any duly authorised committee thereof;

(d) references to Shares were references to shares or notional shares in the New Grantor; and

(e) the Vesting Date in relation to the New Award was the same as that in relation to the Old Award.

9.7 The Committee may make such adjustments to the Performance Conditions applicable to the New Award as it, in its absolute discretion, considers appropriate.

9.8 Subject to Rule 9.4, if notice is given by an Acquiring Company under Rule 9.5 and a Participant does not elect to release an Old Award and accept in consideration for that release a New Award and Old Awards are not otherwise exchanged automatically for New Awards, the Old Award will Vest in accordance with Rule 9.2.

10. OTHER CORPORATE EVENTS

10.1 If the Committee becomes aware that the Company is or is 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 Awards, the Committee, acting fairly, reasonably and objectively, may in its absolute discretion allow some or all Awards to be realised in accordance with Rule 9.3. The Committee will specify the period in which such Awards will be realisable and whether such Awards will lapse at the end of the specified period.

Adjustment of awards

Page 9 of 25

10.2 Without prejudice to Rule 10.1, in the event of any Capital Reorganisation (or the implementation by the Company of a demerger or payment of a super dividend which would otherwise materially affect the value of an Award) the Committee may adjust the number of Shares subject to Awards (including, for the avoidance of doubt, Vested Shares in respect of which any Award has been realised but Shares have not yet been transferred to the Participant) to such extent and in such manner as it thinks fit.

10.3 Any adjustments to Awards made pursuant to Rule 10.2 will be notified to the relevant Participants as soon as is reasonably practicable and the Committee may call in, cancel, endorse, issue or re-issue any Award certificate as a result of that adjustment.

11. MALUS AND CLAW-BACK ARRANGEMENTS

11.1 Notwithstanding any other Rule of the Plan, if circumstances occur which in the reasonable opinion of the Committee justify such determination, the Committee may, prior to the fifth anniversary of the Date of Grant, determine (acting fairly and reasonably having taken into account the scale of loss or damage to the Company or the extent of the risk taken by the Company) to take one or more of the following actions in relation to any one or more Participants:

(a) reduce (including to nil) the number of Shares in respect of which any future Award is granted to a Participant; or

(b) reduce (including to nil) the number of Shares and/or Dividend Equivalents under an unvested Award or under a Vested but unexercised Option held by a Participant, by such number as the Committee considers appropriate in the circumstances; or

(c) in relation to a Vested Award or exercised Option require a Participant to pay to the Company or such other person as the Company may direct within 30 days of a written demand from the Company such number of Shares or such monetary amount with a value to be determined in the Committee’s absolute discretion provided such value on the date of demand is no greater than the value of the Vested Shares and Dividend Equivalents under the Award at the Vesting Date, less any amount paid by or in respect of the Participant in respect of a Tax liability incurred as a result of the Vesting of the relevant Award (except to the extent the Participant is able to recover amounts paid in respect of such Tax liability).

11.2 The circumstances in which the Committee may consider that it is appropriate to exercise its discretion under Rule 11.1 may, without limitation, include the following:

(a) a material financial misstatement of the Company’s audited financial accounts (other than as a result of a change in accounting practice);

(b) conduct by a Participant which results in or is reasonably likely to result in significant reputational damage to the Company;

Page 10 of 25

(c) the negligence or gross Misconduct of a Participant;

(d) fraud effected by or with the knowledge of a Participant;

(e) conduct or behaviour by the Participant that, following an investigation, is reasonably considered by the Committee to constitute a breach of the Company’s values as stipulated by the Company’s code of conduct in force from time to time;

(f) the member of the Group that employs or employed the Participant, or for which the Participant is responsible, having suffered a material corporate failure or a failure of risk management; and

(g) evidence that an Award was granted or Vested based on erroneous or misleading data.

If the Committee exercises its discretion under this Rule 11, it will confirm this in writing to each affected Participant.

11.3 For the purposes of these Rules, if the Committee exercises its discretion under Rule 11.1(b) before an Award vests:

(a) the Award will be deemed to have been granted over the reduced number of Shares; and

(b) any subsequent Vesting of the Award will be determined by reference to this reduced number of Shares,

save that if the number of Shares is reduced to nil, the Award will be treated as if it had never been granted and such Participant (including a Participant who has left employment before the Vesting Date) will have no rights to any Cash Amount, Dividend Equivalents or Shares.

11.4 By accepting an Award, a Participant will be bound by this Rule 11 notwithstanding: (i) that it may only be applicable after the issue or transfer of Shares under these Rules; and (ii) whether or not all or any of the terms of this Rule 11 have been separately notified to each Participant.

12. TAXATION

12.1 Any liability of a Participant to Tax or social security contributions in respect of an Award (including, for the avoidance of doubt, any cash amount paid) will be for the account of the relevant Participant, and the release of any Shares which are the subject of a Conditional Award, or the exercise of any Option will be conditional on the Participant complying with any arrangements specified by the Company or the Trustees for the payment of taxation and any social security contributions (including, without limitation, the sale of sufficient Shares or withholding from any Cash Amount to enable the Company or the Trustees or any employing company in the Group to satisfy its obligations in respect of deduction of taxation and employee’s social security contributions at source).

12.2 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

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transfer of Shares on the Vesting of a Share Award or exercise of an Option under the Plan.

13. Grant Limits

13.1 No Award will be granted under the Plan more than 10 years after the Adoption Date.

Individual Limits

13.2 No limit will apply to the Market Value of Shares over which an Award may be granted, save that the maximum aggregate Market Value of Awards which an executive director of the Company may be granted in respect of any Financial Year will not exceed as at the Date of Grant the level specified in the Company’s directors’ remuneration policy, as approved by shareholders from time to time.

Plan Limits

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

(a) could be issued on the realisation of any subsisting awards or options granted during the preceding 10 years under the Plan or any other Employees’ Share Scheme established by the Company; and

(b) have been issued on the realisation of any awards or options granted during the preceding 10 years under the Plan or any other Employees’ Share Scheme established by the Company,

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

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

(a) could be issued on the realisation of any subsisting awards or options granted during the preceding 10 years under the Plan or any other discretionary share plans adopted by the Company; and

(b) have been issued on the realisation of any awards or options granted during the preceding 10 years under the Plan or any other discretionary share plans adopted by the Company,

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

13.5 Reference in this Rule 13 to the issue of Shares will, for the avoidance of doubt, mean the issue and allotment but not the transfer of Shares. Transfers of Treasury Shares will also count towards the percentage limits set out in Rules

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13.3 and 13.4 above for so long as UK institutional shareholder guidelines recommend this.

13.6 In determining the above limits no account will be taken of any Shares attributable to an Award which was released, lapsed, forfeited or otherwise became incapable of realisation.

14. AMENDMENT AND ADMINISTRATION

14.1 The decision of the Committee will be final and binding in all matters relating to the Plan and it may at any time discontinue the grant of further Awards.

14.2 The Committee may 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 or sanction of the affected Participants; and

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

(i) the definition of Employee in Appendix A;

(ii) the limitations on the number of Shares subject to the Plan;

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

(iv) the basis for determining a Participant’s entitlement to Shares under the Plan;

(v) the terms of Shares to be provided under the Plan; and

(vi) the adjustment provisions of the Plan,

without the prior approval of the Company in general meeting except: (aa) 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 Participants or for any member of the Group; or (bb) as otherwise permitted under these Rules.

14.3 Notwithstanding any other provision of the Plan, the Committee may establish appendices to the Plan for the purpose of granting Awards to: (i) Employees who are or may become primarily liable to tax outside the United Kingdom on their remuneration, subject to such modifications as may be necessary or desirable to take account of overseas tax, exchange control, securities laws or other applicable laws provided that any Shares made available under such appendices will count towards the limits set out in Rule 13.

15. GENERAL

15.1 Any member of the Group may provide money to the Trustees or any other person to enable them or such person to acquire Shares to be held for the

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purposes of the Plan, or enter into any guarantee or indemnity for the purposes, to the extent permitted by any applicable law.

15.2 The Plan will terminate on the tenth anniversary of the Adoption Date or at any earlier time by the passing of a resolution by the Committee or an ordinary resolution of the Company in general meeting. Termination of the Plan will be without prejudice to the subsisting rights of Participants.

15.3 An Award will not constitute a contract of employment. The rights and obligations of any individual under the terms of their office or employment with the Group will not be affected by their participation in the Plan or any right they may have to participate in the Plan. An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of their office or employment with any company for any reason whatsoever (whether lawfully or unlawfully), insofar as those rights arise or may arise from their ceasing to have rights under the Plan as a result of such termination, or from the loss or diminution in value of such rights or entitlements. In the event of any conflict between the terms of this Rule 15.3 and the Participant’s terms of employment, this Rule will take precedence.

15.4 The existence of any Award will not affect in any way the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s capital structure, or any merger or consolidation of the Company, or any issue of Company 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 any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

15.5 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 to any email address 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 or electronic portal hosted by the Company or an agent of the Company, provided that the Participant is notified by email or post that such notice or document has been or will be provided in this manner.

15.6 Notices sent by post to a Participant will be deemed to have been given on the day after the date of posting. Notices sent by email, in the absence of evidence to the contrary, will be deemed to have been received on the day of sending.

15.7 Notices provided electronically through a website or electronic portal 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 15.6 to have received the notification that the notice has been provided there.

15.8 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

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office (or such other place or places as the Committee may from time to time determine and notify to Participants) or sent by email to any email address or fax number notified to the sender for the purposes of the Plan.

15.9 All Share certificates, Award certificates and other communications relating to the Plan will be sent at the Participant’s risk.

15.10 Benefits under the Plan will not be pensionable.

15.11 Any Shares acquired under the Plan will be subject to the Articles of Association of the Company as amended from time to time.

15.12 The invalidity or non-enforceability of one or more provisions of the Plan will not affect the validity or enforceability of the other provisions of the Plan, which will remain in full force and effect.

15.13 Nothing in this Plan confers any benefit, right or expectation on a person who is not an Employee. No third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan. This does not affect any other right or remedy of a third party which may exist.

15.14 The decision of the Committee in any dispute or question concerning the interpretation, construction or effect of the Plan or any other questions arising in connection with the Plan will be final and conclusive.

15.15 By participating in the Plan, the Participant’s attention where applicable under local law is drawn to the Company’s privacy notice, which sets out how the Participant’s personal data will be used and shared by the Company and other Group Companies. The data privacy notice does not form part of these Rules and may be updated from time to time. Any such updates will be notified to the Participant.

16. GOVERNING LAW

16.1 These Rules and any non-contractual obligations arising out of or in connection with these Rules will be governed by, and interpreted in accordance with, English law.

16.2 The English courts will have exclusive jurisdiction in relation to all disputes (including claims for set-off and counterclaims) arising out of or in connection with these Rules including, without limitation, disputes arising out of or in connection with: (i) the creation, validity, effect, interpretation, performance or non-performance of, or the legal relationships established by, these Rules; and (ii) any non-contractual obligations arising out of or in connection with these Rules. For such purposes each party irrevocably submits to the jurisdiction of the English courts and waives any objection to the exercise of such jurisdiction.

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APPENDIX A

1. Definitions

In this Plan, unless the context otherwise requires, the following words and expressions will have the following meanings, namely:

Acquiring Company has the meaning given in Rule 9.5;

Adoption Date means the date of adoption of the Plan by the Company in general meeting on [DATE];

ADRs means American depositary receipts representing American depositary shares deposited by the Company with a depository pursuant to a deposit agreement and issued with respect to fully paid ordinary shares in the capital of the Company;

Award means an award granted under the Plan in the form of an Option, a Conditional Award or a Phantom Award and will where applicable mean the relevant part of any Award;

Award Certificate means the notification to a Participant setting out the specific conditions of an Award in such form and containing such information as the Committee may determine from time to time;

Board means the board of directors of the Company or a duly authorised committee of it which may include the Committee;

Capital Reorganisation means any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation issue, rights issue, open offer, sub-division, consolidation or reduction);

Cash Amount means, in relation to an Award which has Vested, an amount which, in the opinion of the Committee, is equal to the Market Value on the Vesting Date of the Vested Shares less any amount which the Participant is required to pay under these Rules in order to realise the Award;

Closed Period means the period of 30 days prior to the announcement of the Company’s results for any period and such other period during which the Participant is prohibited from dealing in Shares under the Market Abuse Regulation, the Share Dealing Code or under any statute, regulation or similar code to which the Company is subject;

Committee means the remuneration committee of the Board or such other appropriately constituted committee;

Company means Pearson plc registered in England and Wales under number 00053723;

Conditional Award means an Award which takes the form of a conditional right to acquire or receive Shares at no or nominal cost;

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Control has the meaning given by section 995 of the Income Tax Act 2007;

Date of Grant means the date on which the Committee grants an Award under Rule 1;

Dealing Restriction means a restriction imposed by any law, order, regulation or directive, the Listing Rules, the Market Abuse Regulation, the Share Dealing Code, the City Code on Takeovers and Mergers, the rules applying to any Listing of the Company and/or any other code adopted by the Company regulating dealings in Shares;

Dividend Equivalent means an entitlement to Shares which reflect the value of dividends paid on the Vested Shares under an Award between the Date of Grant and the Vesting Date of the Award;

Employee means a person who, at the Date of Grant, is an employee (including an executive director) of any member of the Group;

Employees’ Share Scheme has the meaning given by section 1166 of the Companies Act 2006;

Financial Year means a financial year of the Company within the meaning of section 390 of the Companies Act 2006;

Grant Period means the period of 42 days commencing on any of the following:

(a) the Adoption Date;

(b) the day on which the Company makes an announcement of its results for any period (including, for the avoidance of doubt, any trading update);

(c) any day on which the Committee resolves that exceptional circumstances exist which justify the grant of Awards; or

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

Group means the Company and its Subsidiaries and member of the Group will be construed accordingly;

Holding Period means a post-Vesting period of two years (or such other period as the Committee in its discretion will determine prior to the Date of Grant) applied to Vested Shares or Vested but unexercised Options in accordance with Rule 4, during which the Participant must retain either the Shares which Vest under an Award (including any Shares delivered in satisfaction of Dividend Equivalents) or, as applicable, the Option itself;

the London Stock Exchange means London Stock Exchange Group plc or any successor body thereto;

Listing Rules means the Listing Rules published by the Financial Conduct Authority, as amended from time to time;

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Market Value means, in relation to a Share on any day an amount equal to its middle market quotation as derived from the Official List.

Misconduct means:

(a) material misconduct in the course of a Participant’s employment;

(b) conduct in which the Employee has participated or was responsible for which has resulted or could result in material financial loss or reputational harm to any member of the Group; and

(c) any other misconduct as determined by the Committee in its discretion;

New Award has the meaning given in Rule 9.5;

New Grantor has the meaning given in Rule 9.5;

Official List means the Official List of the Financial Conduct Authority;

Old Award has the meaning given in Rule 9.5;

Option means an Award which takes the form of an option to acquire Shares at no or nominal cost following Vesting;

Participant means an individual who holds a subsisting Award (including, where the context permits, the legal personal representatives of a deceased Participant);

Performance Conditions means the performance conditions that may be applied to an Award under Rule 2;

Performance Period means, in relation to an Award with Performance Conditions attached to it, the period of three Financial Years commencing with the Financial Year in which the Date of Grant falls, unless the Committee determines otherwise at the Date of Grant;

Phantom Award means an Award which takes the form of a right to call for a cash payment calculated by reference to the Market Value of a notional Share and references in these Rules to Shares will, in the case of a Phantom Award, be read as a reference to notional Shares as appropriate;

the Plan means this Pearson Long Term Incentive Plan as amended from time to time in accordance with the Rules;

Relevant Date means:

(a) if the Relevant Event falls within Rule 9.1(a), the date on which Control is obtained and any conditions to which the offer is made subject are satisfied;

(b) if the Relevant Event falls within Rule 9.1(b), either the date on which the scheme of arrangement is approved at the shareholders’ meeting or is sanctioned by the Court (as determined by the Committee in its absolute discretion); or

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(c) if the Relevant Event falls within Rule 9.1(c), the date on which notice of the resolution for winding up is given;

Relevant Event has the meaning given in Rule 9.1;

Share Dealing Code means the Company’s code on share dealing as in force from time to time;

Shares means fully paid ordinary shares in the capital of the Company or shares representing those shares following any Capital Reorganisation (or other reorganisation of the share capital of the Company) or, for Eligible US Employees under Appendix A, the ADRs representing such shares of the Company;

Subsidiary means any company which is a subsidiary of the Company within the meaning of section 1159 of and Schedule 6 to the Companies Act 2006;

Tax means all liability to income tax (or overseas equivalent) which any member of the Group is liable to account for on behalf of the Participant directly to any taxation authority (including, but without limitation, through the PAYE system) and all liability to social security (or overseas equivalent) which any member of the Group is liable to account for on behalf of the Participant to any taxation authority (including, but without limitation, primary Class 1 (employee’s) National Insurance contributions) which arises in connection with an Award, a Cash Amount or Shares;

Termination Date means the date on which a Participant ceases to be employed by the Group;

Treasury Shares means treasury shares held by the Company in accordance with sections 724 to 732 of the Companies Act 2006;

Trustees means the trustees or trustee for the time being of any employee benefit trust established by the Company or any member of the Group from time to time for the benefit of employees of the Group;

Vesting Date means in respect of an Award such date or dates as determined by the Committee which, unless the Committee determines otherwise, will be the later of: (i) the third anniversary of the Date of Grant; (ii) to the extent relevant, the date on which the Committee has determined the Performance Conditions have been satisfied; and (iii) to the extent relevant, and subject to Rules 6 and 9, the date on which the Performance Period has ended, provided that if the Vesting Date would otherwise fall in a Closed Period or on a date when the Company and/or the Participant would otherwise be subject to any Dealing Restrictions, it will be at such later date as when those Dealing Restrictions lift;

Vesting Period means in relation to an Award, the period beginning on the Date of Grant of such Award and ending on the Vesting Date; and

Vested Shares means, subject to Rules 3, 6 and 9, Shares that are the subject of Awards in respect of which the Vesting Date has passed, and Vest, Vested and Vesting will be construed accordingly.

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2. References to “realise”, “realised” or “realisable” in the case of a Conditional Award and a Phantom Award will, in the case of an Option, be construed as “call for”, “called for” or “may be called for” respectively.

3. Interpretation. In these Rules, unless the context otherwise requires:

(a) references to a person include any individual, firm, body corporate (wherever incorporated), government, state or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality); and

(b) headings do not affect the interpretation of these Rules; the singular will include the plural and vice versa; and references to one gender include all genders.

4. Enactments. Except as otherwise expressly provided in these Rules, any express reference to an enactment includes references to: (i) that enactment as amended, consolidated or re-enacted by or under any other enactment before or after the Adoption Date; (ii) any enactment which that enactment re-enacts (with or without modification); and (iii) any subordinate legislation (including regulations) made (before or after the Adoption Date) under that enactment, as amended, consolidated or re-enacted as described at (i) or (ii) above.

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APPENDIX B

RULES OF THE PEARSON LONG TERM INCENTIVE PLAN – ELIGIBLE US EMPLOYEES

This Appendix B sets forth the modifications of the Plan as applicable to Eligible US Employees (as defined below). The terms of this Appendix B will apply automatically to an Eligible US Employee to the extent such Eligible US Employee is granted an Award under the Plan. If an Employee becomes an Eligible US Employee following the Date of Grant, such Eligible US Employee’s Award will be governed by this Appendix B. If there is a conflict between the terms of the Plan, the terms of the Award Certificate and the terms of this Appendix B as applied to an Eligible US Employee, the provisions of this Appendix B will govern.

In this Appendix, references to a Rule will be to the Rules of the Plan and the following expressions will have the following meanings respectively:

Code means the US Internal Revenue Code of 1986, as it may be amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder;

Eligible US Employee means any employee (or director) of a US Subsidiary or any employee (or executive director) of any other member of the Group who is subject to US federal income tax with respect to an Award;

Short-Term Deferral Period means the period commencing on the date that an Award first is no longer subject to a substantial risk of forfeiture and ending upon the fifteenth day of the third month following the end of the Taxable Year in which such Award first is no longer subject to a substantial risk of forfeiture;

Taxable Year means the calendar year, or, if later, the end of the taxable year of the Company, in which the Award is no longer subject to a substantial risk of forfeiture;

US means the United States of America;

US Subsidiary means a Subsidiary of the Company located in the US;

US Tax means income taxation by the US;

US Taxpayer means a Participant who is subject to US Tax at the Date of Grant, is expected to become subject to US Tax following the Date of Grant or does become subject to US Tax following the Date of Grant but prior to the date upon which any part of an Award vests.

1. PROVISIONS APPLICABLE TO US TAXPAYERS

1.1 On the Vesting of an Award which takes the form of an Option, the Option will be treated as automatically exercised in respect of all of the Vested Shares underlying the Option on the day that the Option Vests. If any Dealing Restriction applies, the Option will be treated as automatically exercised on

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the earlier of (i) the day immediately following the date on which any Dealing Restriction ceases to apply and (ii) the day immediately preceding the date on which the Short-Term Deferral Period expires, and if the Option is not automatically exercised on such earlier date it will lapse.

1.2 In the event of a stock split, reverse stock split, stock dividend, recapitalization, combination, or reclassification of the Company’s securities, the number of Shares subject to an Award (and/or the exercise price of an Option, if any) granted to a US Taxpayer who is a resident of the State of California will be proportionally adjusted by the Committee.

1.3 Awards granted to US Taxpayers are intended to be exempt from the requirements of Section 409A of the Code pursuant to the short-term deferral exception described in Section 1.409A-1(b)(4) of the US Treasury Regulations, and the Plan and any Award granted to a US Taxpayer will be interpreted, operated and administered in a manner consistent with such intention. Notwithstanding anything contrary contained in the Plan or any Award, the Shares acquired upon exercise of an Option or upon Vesting of any other Award (or cash sum in the case of a Phantom Award) will be transferred to a US Taxpayer within the Short-Term Deferral Period. Notwithstanding any other provision of the Plan to the contrary, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but will not be required, to unilaterally amend or modify the Plan, this Appendix B and any Award granted under Plan so that the Award qualifies for the short-term deferral exemption from Section 409A of the Code; provided, however, that the Committee makes no representations that Awards granted under the Plan will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to Awards granted under the Plan.

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APPENDIX C

RULES OF THE PEARSON LONG TERM INCENTIVE PLAN – ELIGIBLE CANADIAN EMPLOYEES

The terms of the Plan shall apply to Eligible Canadian Employees (as defined below) except to the extent modified by this Appendix C. The terms of this Appendix C will apply automatically to an Eligible Canadian Employee to the extent he or she is granted an Award under the Plan. If an Employee becomes an Eligible Canadian Employee following the Date of Grant, his or her Award will be governed by this Appendix C or amended as otherwise deemed appropriate by the Committee to comply with the Income Tax Act (Canada). If there is a conflict between the terms of the Plan, the terms of the Award Certificate and the terms of this Appendix C as applied to an Eligible Canadian Employee, the provisions of this Appendix C will govern.

In this Appendix, the following expressions will have the following meanings respectively:

Eligible Canadian Employee means any employee (or director) of a Canadian Subsidiary or any employee (or executive director) of any other member of the Group who is subject to Canadian income tax with respect to an Award;

Canadian Subsidiary means a Subsidiary of the Company located in Canada;

1. PROVISIONS APPLICABLE TO ELIGIBLE CANADIAN EMPLOYEES

1.1 Rule 5.1 of the Plan shall not apply to an Award in the form of an Option granted to an Eligible Canadian Employee.

1.2 Rule 6.1 of the Plan shall be read as follows for Eligible Canadian Employees:

6.1 Save as otherwise provided in these Rules, an Award will lapse automatically on the Participant ceasing to be an Employee or, if an Employee gives or is given notice of termination of employment for any reason at any time before the Vesting Date applicable to an Award, an Award will lapse on the date of such cessation or notice. Without limiting the generality of the foregoing, except as expressly required by applicable employment standards legislation, as amended or replaced, no period of notice or payment in lieu of notice that follows the date the Participant gives or is given notice of termination shall be deemed to extend the Participant’s period of employment for the purpose of determining his or her rights or entitlements under this Plan, and by participating in the Plan the Participant waives any entitlement to damages in lieu thereof whether pursuant to contract, common law or otherwise.

1.3 Rule 6.2(c) of the Plan shall not apply to Eligible Canadian Employees.

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1.4 Notwithstanding the definition of “Vesting Date” in Appendix A to the Plan, Conditional Awards not settled in newly issued Shares (as set out in the Award Certificate) and Phantom Awards granted to Eligible Canadian Employees shall vest no later than October 30^th of the third year following the year to which the Award relates.

1.5 If the Committee determines an Employee is to receive an Award in the form of a Conditional Right that is settled in newly issued Shares, the Award Certificate for such Award shall state that the Conditional Right is to be settled in newly issued Shares and that Sections 5.4 and 7.2 of the Plan do not apply to the Award.

1.6 The Award Certificate for Eligible Canadian Employees shall include the following language:

“The Participant hereby consents to the collection, use and disclosure of personal information for all purposes relating to the administration of the Plan, including without limitation, relating to:

(A) administering and maintaining employee records;

(B) providing information to the administrator of the Plan, including to third party administrators of the Plan;

(C) providing information to future purchasers or merger partners of the Company; and

(D) transferring information about the employee to a country or territory that may not provide the same statutory protection for the information as the employee’s home country.”

1.6 The Award Certificate for Eligible Canadian Employees shall contain the following statement:

“It is the express wish of the employee that this agreement and all related documents be drafted in English. L’employé(e) a expressément choisi que cette convention ainsi que tous les documents qui s’y rattachent soient rédigés en langue anglaise.”

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EX-99.4

Exhibit 99.4

THE PEARSON MANAGEMENT INCENTIVE PLAN

THE PEARSON MANAGEMENT INCENTIVE PLAN

1. INTRODUCTION

1.1 The purpose of this document is to set out the terms of the Pearson Global Management Incentive Plan (“MIP” or “Plan”) for Eligible Employees at grade G or above in the Pearson career framework. The Plan combines the cash bonus previously provided for under the Pearson Annual Incentive Plan and share entitlements previously awarded pursuant to the Pearson Long Term Incentive Plan.

1.2 The MIP is a self-funded plan that aims to drive business results and align rewards with performance. Pearson may, at its sole discretion, reduce or adjust MIP payments.

1.3 This Plan will apply subject to any laws that are applicable in the individual territories in which Employees are employed. This document and the terms of the Plan do not form part of the contract of employment of any Employee and Pearson may vary, amend or depart from the Plan as it may deem fit in its absolute discretion at any time.

2. DEFINITIONS

2.1 In this Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings, namely:

ADSs means American Depositary Shares representing Shares;

Authorised Absence means approved sickness, absence, or disability leave of absence; maternity, paternity, adoption or similar leave of absence; parental leave (including, in the United States, leaves under the Family and Medical Leave Act or similar statutes); military leave; jury duty leave; or similar pre-approved leave of absence. For the avoidance of doubt, a sabbatical (even where approved by Pearson) shall not constitute Authorised Absence;

Business Unit means a Line of Business, Geography or Enabling Function;

the Company means Pearson plc;

Control has the meaning given to that word by section 995 of the Income Tax Act 2007;

Date of Grant means the date on which a Stock Award is granted;

Dealing Day means any day on which the London Stock Exchange is open for business;

Dividend Shares means additional Shares awarded to a Participant in respect of their Vesting Shares in accordance with rule 10 below;

Effective Salary means the Eligible Employee’s basic annual salary as at 31 December in the Plan Year to which the notification made under rule 3.4 relates and for the avoidance of doubt does not include any allowances or other bonus payments. Pearson may at its absolute discretion adjust the Effective Salary at the time of calculating Opportunities (as defined below) if the Eligible Employee has been promoted resulting in a salary increase;

Eligible Employee means an employee of Pearson at grade G or above in the Pearson career framework who is notified in writing that they are eligible to participate in the Plan but excluding any executive directors of the Company;

Employee means any employee of any member of the Group;

Employing Company means the entity within Pearson that employs an Eligible Employee;

the Group means the Company and the Subsidiaries and member of the Group shall be construed accordingly;

MIP Award means an Opportunity (as defined below) under this Plan;

Opportunity means the opportunity to receive a Stock Award and Cash Bonus;

Participant means any individual who holds a subsisting Stock Award (including, where the context permits, the legal personal representatives of a deceased Participant);

Payment Date means the date upon which the Cash Bonus (as defined in rule 3.4) is paid to the Eligible Employee in accordance with rule 7.1;

Pearson means Pearson Plc, together with any subsidiary or associated company wherever located;

PEM means the Presidents of Lines of Business and Geographies and the Chiefs of the Enabling Functions but for the avoidance of doubt does not include any executive directors of Pearson;

PEM Stock Vesting Date means the third anniversary of the Date of Grant of the Stock Award (or, if later, the date of publication of the final set of accounts of the Company which are relevant to the Stock Award);

Performance Condition means any performance criteria attached to any Stock Award;

Performance Period means the period over which any Performance Condition attaching to a Stock Award must be satisfied as determined by the Remuneration Committee;

Plan Year means Pearson’s financial year (currently 1 January to 31 December);

Remuneration Committee means the Remuneration Committee of the board of

Pearson plc, comprised of independent, non-executive directors;

Share Price means:

(a) in relation to a Share on any Dealing Day, the middle market quotation for a Share as derived from the Daily Official List of The London Stock Exchange; and

(b) in relation to an ADS on any Dealing Day, the closing price for an ADS on the New York Stock Exchange;

Shares means fully paid and irredeemable ordinary shares of 25p each in the capital of the Company or shares representing those shares following any reorganisation of the share capital of the Company (and, where the context requires, shall include the equivalent thereof in ADSs);

PLG means, for the purposes of this Plan, Employees at grades G and H in the Pearson career framework;

PLG Stock Vesting Date means an anniversary of the Date of Grant of the Stock Award (or, if later, the date of publication of the final set of accounts of the Company which are relevant to the determination of the Stock Award);

Stock Award means a conditional right to receive Shares under the rules of this Plan;

Stock Vesting Date means the PLG Stock Vesting Date or the PEM Stock Vesting Date as the context requires;

Subsidiary means any subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006 over which the Company has Control;

Trustee means the trustee from time to time of the Pearson plc Employee Share Ownership Trust or such other employee benefit trust as the Company shall specify from time to time; and

Vesting Shares means that number of Shares under a Participant’s Stock Award which vest in accordance with the rules of the Plan.

2.2 Where the context permits the singular shall include the plural and vice versa. Headings shall be ignored in construing the Plan.

2.3 References to any act shall include any statutory modification, amendment or re-enactment thereof.

3. GENERAL APPLICATION OF THE PLAN

3.1 The Plan shall apply to all Eligible Employees and supersedes any and all prior incentive arrangements, whether annual or long term, in which any Eligible Employee may have been eligible to participate.

3.2 Subject to rule 3.3, Eligible Employees may not participate in any other Pearson incentive, bonus, or other variable pay plan (excluding the Pearson WWSFS and ESPP) unless specifically authorised by the PEM, or the Remuneration Committee as applicable, and the Chief Human Resources Officer.

3.3 Notwithstanding the above, any rights to receive shares previously awarded or any options previously granted to any Employee shall remain subject to the rules of the applicable Pearson incentive plan.

3.4 Eligible Employees shall be notified annually of their target opportunities under the Plan (“Opportunities”), including the percentage of Effective Salary which is targeted to be payable as a cash bonus (“Cash Bonus”) and the percentage of Effective Salary targeted to be granted by way of Stock Award, subject in each case to the terms of this Plan. Cash Bonuses and Stock Awards made to an Eligible Employee under the Plan may be higher or lower than the Opportunity notified to them under this rule 3.4.

3.5 The amounts comprised in any Opportunity shall be at the absolute discretion of Pearson.

4. PLAN DESIGN AND CALCULATION OF OPPORTUNITIES AND PAYMENTS

4.1 The Plan design and calculation of Opportunities and payments will be based on Pearson’s performance against applicable financial and strategic metrics, the Eligible Employee’s individual job performance, and consideration of Business Unit performance as described in rule 4.3 below.

4.2 The applicable performance threshold, target and stretch figures, which will determine funding levels, will be recommended by the Pearson CEO and CFO and set by the Remuneration Committee on an annual basis.

4.3 The Pearson CEO has discretion, with notification to the Remuneration Committee, to adjust a MIP Award for a Line of Business, Geography or Enabling Function at any time during the Plan Year and up to the Payment Date based on each Business Unit’s performance relative to one another. The Line of Business, Geography or Enabling Function performance will be assessed based on key performance indicators (KPIs) and other performance factors to be determined from time to time.

4.4 Individual employee performance will be assessed using the Pearson Performance Review process.

4.5 Opportunity levels will be set by the Pearson Reward team relevant to the grade of the Eligible Employee. Each member of the PEM (and the CFO, for their direct reports) will determine the appropriate level of payment for their direct reports on a discretionary basis, within the parameters of personal performance and affordability within the Business Unit or Group. PEM payments shall be determined by the Pearson CEO, with notification to the Remuneration Committee, in the same manner.

4.6 Pearson may apply discretion to determine the funding approach relative to an Employee’s individual performance. The Plan aims to ensure that exceptional performance is appropriately rewarded.

4.7 In all circumstances, the maximum funding Opportunity under the Plan is 150% of target Opportunity by way of Cash Bonus and Stock Award, in aggregate. This potential maximum would reflect a stretch financial performance (as defined annually by the Remuneration Committee) combined with an exceptional performance on behalf of the individual. The Pearson CEO has the discretion to increase awards to up to two times target Opportunity.

4.8 If an Employee becomes an Eligible Employee by way of:

(a) internal promotion (i) before 1 October in any Plan Year then the Employee shall be eligible for a MIP Award and shall cease to have any entitlement to any existing annual incentive or long term incentive plans in respect of that

Plan Year; or (ii) after 1 October then the Employee shall not be eligible for a MIP Award for that Plan Year but will retain their potential entitlements from any annual incentive or long term incentive plans in which they participated immediately prior to promotion.

(b) joining Pearson from another company (i) before 1 October in any Plan Year then the Employee shall be eligible for a pro-rated MIP Award; or (ii) after 1 October then the Employee shall not be eligible for a MIP Award and for the avoidance of doubt no Stock Award shall be granted for that Plan Year.

Additional details regarding eligibility for a Cash Bonus are contained in the next rule 5 and in relation to Stock Awards in rule 9.

4.9 For the avoidance of doubt, no Employee shall have the right or expectation to participate in the Plan in any year.

5. ELIGIBILITY TO RECEIVE CASH BONUS

5.1 An Eligible Employee must be employed at the Payment Date following the Plan Year to which an Opportunity relates in order to receive the relevant Cash Bonus. If an individual commences employment with a member of the Group during the Plan Year and becomes an Eligible Employee:

a) by way of internal promotion (i) before 1 October then they shall be eligible for a MIP award, or (ii) on or after 1 October then they will retain their potential entitlements from any existing annual incentive or long term incentive plans in which they participate; or

b) by way of joining Pearson from another company (i) before 1 October then they shall be eligible for a MIP award pro-rated to reflect the proportion of the Plan Year that they have completed from the date of hire, or (ii) on or after 1 October then they shall not be eligible for a MIP award.

5.2 Save as otherwise provided below, an Eligible Employee must be employed by an Employing Company and not under notice of termination of employment whether given by the Employee or the Employing Company (save as provided in

5.3 below), at the Payment Date in order to receive the Cash Bonus.

5.3 If an Eligible Employee’s employment terminates prior to the Payment Date by reason of:

• death, injury, disability or ill-health; or

• redundancy (as determined by Pearson in its absolute discretion) with a final date of employment on or after the 1 October that falls in the relevant Plan Year; or

• their Employing Company or Business Unit ceasing to be part of the Group; or

• change of Control of the Company;

• any other reason at the discretion of the Remuneration Committee, or a delegated authority thereof;

then the Eligible Employee shall continue to be eligible to receive the Cash Bonus at the normal Payment Date, save that the Remuneration Committee may determine that the Cash Bonus may be paid early, but (where the Eligible Employee’s employment terminates during the Plan Year) pro-rated to reflect the Eligible Employee’s partial service for that Plan Year. Furthermore, where an Eligible Employee is placed on garden leave prior to the termination of their employment with an Employing Company, any such period of garden leave shall not count towards the calculation of the Cash Bonus, which shall be pro-rated accordingly.

5.4 In jurisdictions, that require employee payments to be completed by, or within a specific period after the termination of employment, the pro-rata payment shall be made in accordance with local requirements and the calculation will be applied assuming an “on target” or lower financial performance, such decision to be at Pearson’s absolute discretion taking into account available financial performance information at the relevant time.

5.5 Where a pro-rating of the Cash Bonus is required, Pearson shall calculate the Cash Bonus based on a full year of eligibility and then reduce the amount to reflect the proportion of the Plan Year during which the Eligible Employee was employed by Pearson as an Eligible Employee. The calculation shall be based on the number of days the individual was an Eligible Employee using a Plan Year of 365 days (366 in any leap year).

5.6 Pearson may at its absolute discretion reduce (potentially to nil) the Cash Bonus payment of any Eligible Employee whose performance is deemed in the reasonable opinion of their line manager to be below acceptable standards.

5.7 If an Eligible Employee’s working arrangements permanently change during the Plan Year (for example moving from a 5 day to 4 day working week) and there is a related adjustment to Effective Salary, any applicable Cash Bonus will be pro-rated accordingly.

6. EFFECT OF LEAVES OF ABSENCE DURING THE PLAN YEAR ON THE CASH BONUS

6.1 If an Eligible Employee takes Authorised Absence during the Plan Year, the Cash Bonus will be reduced pro rata using the same method of calculation as 5.5 above (with the number of days on which the Eligible Employee was employed

being reduced by each day of Authorised Absence). Where a period of Authorised Absence exceeds six months in the Plan Year, the period of time beyond the six months will not count for the purposes of the Cash Bonus.

6.2 If an Eligible Employee takes unauthorised absence (being an absence that is not an Authorised Absence) during the Plan Year, the Cash Bonus will be reduced pro rata using the same method of calculation as 5.5 above (with the number of days on which the Eligible Employee was employed being reduced by each day of unauthorised absence).

7. METHOD AND TIMING OF CASH BONUS PAYMENT

7.1 Pearson will calculate and pay the Cash Bonus as soon as reasonably practicable after the confirmation of the Plan Year financial results and the determination and approval of payments. Payment of any Cash Bonus will usually be in the March following the relevant Plan Year but in any event payment will be made no later than 31 December following the Plan Year.

7.2 The Cash Bonus will not be considered as salary for pension, redundancy or other emoluments, subject to applicable local legislation, and will be subject to such withholdings as required in the relevant jurisdiction.

8. GRANT OF STOCK AWARDS

8.1 The Remuneration Committee may grant Stock Awards in the year following the Plan Year to which the relevant Opportunity relates.

8.2 The Remuneration Committee may grant Stock Awards within the period of 42 days starting on the day on which the Company announces its results or, if later, ceases to be in a closed period for the purposes of the Market Abuse Regulation or any other day on which the Remuneration Committee resolves that exceptional circumstances exist which justify the grant of Stock Awards, and if the grant during any such periods would be prohibited by law the Date of Grant must be within 42 days after the lifting of such prohibition.

8.3 The value of each Stock Award shall be calculated using the Share Price on the first dealing day in March of the year of the Date of Grant (or such other date as the Remuneration Committee may in its absolute discretion taking into account the circumstances at the time) , the Participant’s relevant Effective Salary and the average exchange rate for the Plan Year.

8.4 Any Stock Award granted to a member of the PEM shall, subject to the terms of this Plan including but not limited to rule 12, vest on the PEM Stock Vesting Date. Part of such Stock Award (usually two thirds but as determined by

the Remuneration Committee) shall be subject to Performance Conditions to be determined by the Remuneration Committee prior to the Date of Grant.

8.5 Any Stock Award granted to a member of the PLG shall, subject to the terms of this Plan including but not limited to rule 12, vest in three equal tranches on each of the first three PLG Stock Vesting Dates following the Date of Grant.

8.6 The grant of a Stock Award and/or the delivery of Shares upon vesting thereof shall be conditional on the Employee agreeing to comply with any arrangements specified by the Company for the payment of taxation and social security contributions (including without limitation the right to sell on their behalf sufficient Shares to satisfy any taxation or social security contributions liability on their part for which any member of the Group may be liable) in respect of a Stock Award.

8.7 On granting Stock Awards, the Company shall enter into a deed poll or take such other steps as are necessary to evidence their legal enforceability. As soon as practicable after the Date of Grant, the Remuneration Committee shall procure the issue to such Participant of a letter in respect of a Stock Award together with access to website information, or such other information as the Company shall make available, summarising the key terms of the Stock Award.

8.8 Every Stock Award granted hereunder shall be personal to the Participant and, except to the extent necessary to enable a personal representative to receive Shares on the vesting of a Stock Award following the death of a Participant, neither the Stock Award nor the benefit thereof may be transferred, assigned, charged or otherwise alienated. Any transfer of a Stock Award otherwise than as permitted under this rule shall cause the Stock Award to lapse.

9. SPECIFIC PROVISIONS RELATING TO STOCK AWARDS

9.1 A Stock Award consists of a conditional right to receive a number of Shares on the terms referred to in these rules.

9.2 Where a Stock Award (or part thereof) is subject to a Performance Condition the number of Shares that are capable of vesting shall be determined by the extent to which an objective performance measure is satisfied over the Performance Period. The Performance Condition applicable to a Stock Award shall be determined by the Remuneration Committee prior to the grant of the Stock Award and shall be specified by the Remuneration Committee at the Date of Grant.

10. DIVIDEND SHARES

10.1 Subject to rule 10.2, in addition to any Vesting Shares to which a Participant becomes entitled in relation to a Stock Award in accordance with the rules of this Plan, the Participant shall be awarded, with effect from the Stock Vesting Date,

such number of Dividend Shares as is equal to the number of Shares which could have been purchased if each dividend paid on the Vesting Shares in the period between the Date of Grant and the Stock Vesting Date had been reinvested in additional Shares on the date of payment of each such dividend. The number of Dividend Shares shall be calculated on a cumulative basis, so that (for calculation purposes only, and without an interest in Shares arising prior to the Stock Vesting Date) Dividend Shares shall be notionally attributed to Vesting Shares as at each individual payment date.

10.2 The Remuneration Committee has discretion to satisfy any entitlement to dividend equivalents under rule 10.1 in cash rather than Shares.

10.3 On the transfer to the Participant of the Vesting Shares under a Stock Award in accordance with these rules, the Remuneration Committee shall also arrange the transfer to the Participant of the Dividend Shares to which the Participant is entitled in relation to such Stock Award under rule 10.1.

11. CESSATION OF EMPLOYMENT IN RELATION TO STOCK AWARDS

11.1 Save as otherwise provided in these rules, a Stock Award shall lapse automatically on the Participant ceasing to be an Employee prior to the Stock Vesting Date. Furthermore, if, for the avoidance of doubt, an Eligible Employee ceases to be employed by an Employing Company, or is under notice of termination of employment whether given by the Employee or the Employing Company, prior to a Date of Grant, they shall not be granted that Stock Award.

11.2 Where a Participant ceases to be an employee of a member of the Group by reason of:

(a) injury, disability, ill-health or redundancy;

(b) his or her Employing Company or business ceasing to be part of the Group; or

(c) any other reason if the Remuneration Committee so decides in its absolute discretion;

then any Stock Award which has not already vested or lapsed in accordance with these rules shall vest on cessation of employment, save that any Stock Awards that are subject to any Performance Conditions shall only vest following completion of the relevant performance period and subject to the Performance Conditions being met, and subject to pro ration as described in rule 11.3 below.

11.3 In determining the number of Shares which vest under a Stock Award for the purposes of this section, the following shall apply: the number of Shares over which the Stock Award vests shall be multiplied by the fraction A/B where A is the

number of complete months from the Date of Grant to the Participant’s leaving date, and B is the number of complete months from the Date of Grant to the applicable Stock Vesting Date. However, the Remuneration Committee may in its absolute discretion determine that the Participant’s entitlement should not be scaled down or should be scaled down in part only (the extent of scaling down being determined by the Remuneration Committee in its absolute discretion).

12. DEATH OF PARTICIPANT OR OTHER EXCEPTIONAL CIRCUMSTANCES IN RELATION TO STOCK AWARDS

In the event that a Participant dies while in service (or at any time after leaving service when he or she holds a Stock Award at the time of their death), then, the Remuneration Committee shall determine in its absolute discretion what proportion (if any) of a Stock Award shall vest early.

13. GENERAL OFFER FOR THE COMPANY, ETC

General Offer

13.1 If any person (either alone or together with any person acting in concert with them) obtains Control of the Company as a result of a general offer to acquire the whole of the share capital of the Company (other than those Shares which are already owned by them and/or any person acting in concert with them), subject to the provisions of rule 13.5, any Stock Award shall vest on the date on which the offer becomes unconditional in all respects. The Shares shall be released to the Participant as soon as practicable after the date on which the offer becomes unconditional in all respects.

Scheme of Arrangement

13.2 If a court shall direct that a meeting of the holders of Shares be convened pursuant to section 895 of the Companies Act 2006 for the purposes of considering a scheme of arrangement of the Company then (unless rule 13.3 applies) subject to the provisions of rule 13.5, any Stock Award shall vest on the date on which the scheme of arrangement is sanctioned by the Court. The Shares shall be released to the Participant as soon as practicable after the date on which the scheme of arrangement is sanctioned by the Court. If the Scheme of Arrangement is not sanctioned by the Court, the Stock Awards shall not vest but shall continue in force.

13.3 Stock Awards shall not without the consent of the Remuneration Committee be exercisable or vest early under rule 13.2 if the purpose and effect of the scheme of arrangement is to create a new holding company for the Company, such company having substantially the same shareholders and proportionate shareholdings as those of the Company immediately prior to the scheme of arrangement. In that event, the Remuneration Committee shall

endeavour to procure that an exchange of Stock Awards is effected under rule 13.6.

Voluntary Winding-up

13.4 If notice is duly given of a resolution for a voluntary winding-up of the Company then, subject to the provisions of rule 13.5, any Stock Award shall vest and the Shares shall be released to the Participant as soon as practicable thereafter.

Application of Performance Conditions and pro-rating

13.5 In determining the number of Shares which vest under a Stock Award for the purposes of rules 13.1 to 13.6, the following shall apply:

(a) where any Stock Award (or part thereof) that is subject to a Performance Condition becomes realisable before the end of the Performance Period under rule 13 the number of Shares which shall vest under the Stock Award (or part thereof) shall be determined by the Remuneration Committee by reference to the extent that the Performance Conditions are met as at the date of the relevant event. This number of Shares shall then be multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to the date of the relevant event and B is the number of complete months from the Date of Grant to the Stock Vesting Date SAVE THAT the Remuneration Committee may, in its absolute discretion, modify the number of Shares which shall vest under the Stock Award if it considers that the Performance Condition would have been met to a greater or lesser extent at the end of the full performance period. The Remuneration Committee may also at its absolute discretion in appropriate circumstances (but not so as to result in an unjustifiably large vesting level) disapply or alter the fraction stated above to release a greater number of Shares if it considers that the contribution of the Participant to the creation of shareholder value during the Performance Period would not otherwise be properly recognised.

(b) where any Stock Award (or part thereof) that is not subject to a Performance Condition become realisable under rule 13, the number of Shares which shall vest shall be the number of Shares under the relevant Stock Award (or part thereof) multiplied by the fraction A/B where A is the number of complete months from the Date of Grant to date of the relevant event, and B is the number of complete months from the Date of Grant to the Stock Vesting Date SAVE THAT the Remuneration Committee may in its absolute discretion determine that the Participant’s entitlement should not be scaled down or should be scaled down in part only (the extent of scaling down being determined by the Remuneration Committee in its absolute discretion).

Exchange of Stock Awards

13.6 If any company (the Acquiring Company) obtains Control of the Company as a result of an event referred to in rule 13, each Participant may (or shall, should the Remuneration Committee determine this to be appropriate), at any time within one month of the change of Control, with the agreement of the Acquiring Company, release any Stock Award which has not lapsed (the Old Right) in consideration of the grant to them of a new Stock Award, which in the opinion of the Remuneration Committee and the Acquiring Company is equivalent to the Old Right but relates to shares in a different company (whether the Acquiring Company itself or another company its group). Any Performance Conditions to which the Stock Award (or part thereof) are subject shall cease to apply unless the Remuneration Committee determines, in its absolute discretion, that they should continue to apply to the new Stock Award (or part thereof) (subject to such alterations as the Remuneration Committee deems appropriate).

14. ADJUSTMENT OF STOCK AWARDS

In the event of:

(i) any variation in the share capital or reserves of the Company (including, without limitation, by way of capitalisation or rights issue or any consolidation, sub-division or reduction); or

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

then, in relation to Stock Awards, the number of Shares subject to the Stock Award and any Performance Conditions to which the Stock Award is subject shall be adjusted in such manner as the Remuneration Committee shall determine in its absolute discretion provided that no adjustment shall be made pursuant to this rule unless and until the auditors for the time being of the Company (acting as experts not arbitrators) shall confirm in writing to the Remuneration Committee that such adjustment is in their opinion fair and reasonable.

15. TRANSFER OF SHARES ON VESTING OF STOCK AWARDS

15.1 Following the vesting of a Stock Award, the Vesting Shares shall be delivered to a Participant as soon as practicable thereafter.

15.2 The Company shall provide (and shall procure, where appropriate, that any member of the Group which employs Participants shall provide) sufficient monies to enable the Trustee to acquire sufficient Shares to satisfy all such Stock Awards. Such monies shall be provided to the Trustee no later than the date on which the relevant Stock Award vests.

15.3 Where the vesting of Stock Awards, delivery of Shares under the Plan or the sale of any Shares would be prohibited by law (or the Company’s dealing rules), the Stock Awards shall vest and Shares shall be delivered to the Participant as soon as practicable after the prohibition has ceased to apply.

15.4 The Company shall not be obligated to issue or deliver Shares in connection with any Stock Award or take any other action under the Plan in a transaction subject to the requirements of any applicable securities law, any requirement under any listing agreement between the Company and any securities exchange or automated quotation system or any other law, regulation or contractual obligation of the company until the Company is satisfied that such laws, regulations, and other obligations of the Company have been complied with in full. The Company may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Shares under the Plan. Certificates representing Shares will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws, regulations and other obligations of the Company, and a legend or legends may be placed thereon to reflect such restrictions.

15.5 No Shares may be issued or transferred from treasury pursuant to Stock Awards granted under the Plan.

16. MALUS AND CLAWBACK

16.1 If, in the reasonable opinion of the Remuneration Committee:

(a) a Stock Award that has not yet vested is discovered to have been granted or Cash Bonus has been proposed on the basis of a material misstatement or restatement of any audited financial accounts or other data; or

(b) before a Stock Award vests or Cash Bonus is vested or paid, the Remuneration Committee determines that there has occurred at any time misconduct; or

(c) events have occurred, during a period that was wholly or partly before the date on which a Stock Award vested or Cash Bonus is paid, in respect of the Company, any member of the Group or a relevant business unit, which have resulted in, or are reasonably likely to result in:

(i) significant reputational damage;

(ii) a material adverse effect on its financial position; or

(iii) a material adverse effect on its business opportunities and prospects for sustained performance or profitability,

then the Remuneration Committee may in its discretion at any time before a Stock Award vests or Cash Bonus is paid determine (acting fairly and reasonably) that the number of Shares over which a Stock Award is granted shall be reduced to such amount or number (including to nil) and/or a Cash Bonus shall be reduced (including to nil), as the Remuneration Committee considers appropriate in the circumstances.

16.2 If, in the reasonable opinion of the Remuneration Committee:

(a) a Stock Award that has vested is discovered to have vested or Cash Bonus that has been paid is discovered to have been paid on the basis of a material misstatement or restatement of any audited financial accounts or other data; or

(b) the Remuneration Committee determines that there occurred misconduct during a period that was wholly or partly before the date on which a Stock Award vested or Cash Bonus was paid; or

(c) events have occurred, during a period that was wholly or partly before the date on which a Stock Award vested or Cash Bonus was paid, in respect of the Company, any member of the Group or a relevant business unit, which have resulted in, or are reasonably likely to result in:

(i) significant reputational damage;

(ii) a material adverse effect on its financial position; or

(iii) a material adverse effect on its business opportunities and prospects for sustained performance or profitability,

then the Remuneration Committee may in its discretion at any time during the two year period immediately following the vesting of such Stock Award or payment of the Cash Bonus determine (acting fairly and reasonably) that the Participant should repay to the Company (whether by re-transfer of Shares or payment of cash proceeds or otherwise) an amount equal to the full benefit, calculated on an after-tax basis, received by the Participant from such vesting or payment, provided that the Remuneration Committee may, at its discretion, determine that a lesser amount should be repaid. Each Participant shall be deemed to undertake, as a condition of participation in the Plan, to re-transfer Shares or pay cash in order to comply with this rule.

16.3 For the purposes of Rule 16.1 and 16.2:

(a) the Stock Award shall be deemed to have been granted over the reduced number of Shares (as the case may be); and

(b) any subsequent vesting of a Stock Award shall be determined by reference to this reduced number of Shares,

save that if the number of Shares is reduced to nil, the Stock Award shall be treated as if it had never been granted and a Participant (including a Participant who has left employment before the date on which it vests other than by reason of death) shall have no rights to any Shares.

17. RIGHTS ATTACHING TO SHARES TRANSFERRED PURSUANT TO STOCK AWARDS

17.1 All Shares transferred upon the vesting of a Stock Award shall rank pari passu in all respects with the Shares in issue at the date of transfer save as regards any rights attaching to such Shares by reference to a record date prior to the date of transfer.

17.2 Any Shares acquired on vesting of Stock Awards shall be subject to the articles of association of the Company from time to time.

18. ADMINISTRATION AND AMENDMENT

18.1 The decision of the Remuneration Committee shall be final and binding in all matters relating to the Plan and it may at any time discontinue the grant of further Stock Awards or Cash Bonuses or amend any of the provisions of the Plan in any way it thinks fit PROVIDED THAT:

(a) the Performance Conditions attaching to any Stock Award may be amended following the Date of Grant but before the expiry of the Performance Period if:

(i) events happen following the Date of Grant with the result that the circumstances which prevailed at the Date of Grant which were relevant to the conditions that were originally imposed regarding the vesting of the Stock Award have subsequently changed; and

(ii) the Remuneration Committee is satisfied that any such amended conditions would be a fairer measure of the performance of the Company and the Remuneration Committee reasonably considers that such amended conditions are:

(A) equally demanding; and

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

(b) the Remuneration Committee shall not make any amendment that would materially prejudice the interests of existing Participants except with the prior consent or sanction of Participants who, if their Stock Awards vested in full, would thereby become entitled to not less than three-quarters of all

the Shares which would fall to be transferred upon vesting of all outstanding Stock Awards

18.2 Notwithstanding any other provision of the Plan, the Remuneration Committee may establish appendices to the Plan for the purpose of granting Stock Awards or making Cash Bonuses to Employees who are or may become primarily liable to tax outside the United Kingdom on their remuneration, subject to such modifications as may be necessary or desirable to take account of overseas tax, exchange control or securities laws.

19. GENERAL

19.1 Any member of the Group may provide money to the trustees of any trust or any other person to enable them or them 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 not prohibited by sections 678-680 of the Companies Act 2006.

19.2 The rights and obligations of a Participant under the terms and conditions of their office or employment shall not be affected by their participation in the Plan or any expectation or right which (notwithstanding rule 3) he or she believes he or she may have to participate in the Plan. An individual who participates in the Plan waives all and any rights to compensation or damages in consequence of the termination of their office or employment with any company for any reason whatsoever insofar as those rights arise, or may arise, from their ceasing to have rights under any Stock Award or Cash Bonus under the Plan as a result of such termination or from the loss or diminution in value of such rights or entitlements. In the event of any conflict between the terms of this paragraph 19.2 and the Participant’s terms of employment, this rule will take precedence

19.3 The existence of any Stock Award shall not affect in any way the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisations, reorganisations or other changes in the Company’s capital structure, or any merger or consolidation of the Company, 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 any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

19.4 Any notice or other document required to be given under or in connection with the Plan may be delivered to a Participant or sent by post to them at their home address according to the records of their Employing Company or such other address as may appear to the Company to be appropriate. Notices sent by post shall be deemed to have been given on the day following the date of posting. 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 Remuneration Committee may from time to time determine and notify to Participants).

19.5 It is a term and condition of participation in the Plan that Participants acknowledge and agree that for the purposes of the administration of the Plan including the grant, holding or vesting of Stock Awards and the holding or sale of Shares acquired from the vesting of Stock Awards, information relating to the Participants will be passed between their Employing Company, the Company and other members of the Group and any third parties engaged by them to the extent required for the administration or operation of the Plan and to the extent permitted by applicable law. Participants shall be provided with all appropriate information regarding the processing of information and their rights in respect of such processing as is required under applicable law, and Participant information shall be processed in accordance with applicable law. By participating in the Plan, a Participant shall be deemed to have acknowledged and accepted this rule 19.5.

19.6 For Eligible Employees working in employment-at-will jurisdictions, this Plan is not a statement of policy regarding annual incentive compensation and does not constitute an employment agreement. Your employment with Pearson continues to be at-will employment, and nothing in this plan shall confer on you any right to continue as an employee of the company, or affect in any way the right of Pearson to terminate your employment at any time, with or without good cause.

19.7 Benefits under the Plan shall not be pensionable.

19.8 The Company, or where the Remuneration Committee so directs any Subsidiary, shall pay the appropriate stamp duty on behalf of Participants in respect of any transfer of Shares, and the stamp duty reserve tax costs of creating ADSs.

19.9 These rules shall be governed by, and construed in accordance with, the laws of England and unless specifically stated otherwise, each Participant, the Company and any other member of the Group submits to the exclusive jurisdiction of the English courts in relation to all disputes arising out of or in connection with the Plan.