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Change of control

Under the rules of the respective schemes, in the event of a change of control of Old Mutual plc:

• Restricted shares and options granted under the SRP would vest in full;
• Performance shares and options granted under the PSP would vest: (i) to the extent that the performance criteria to which such options are subject have been met; and (ii) on a pro-rata basis to reflect the reduction in the length of the original performance period, although the Committee does have discretion to disapply the length of service pro-rating for compassionate reasons;
• Options granted under the SOP, the Mutual & Federal Share Option Plan and the Mutual & Federal Namibia Share Option Plan, and awards granted under the RSP would vest in full;
• Options granted under the MISP, the Mutual & Federal Management Incentive Share Plan and the Mutual & Federal Namibia Management Incentive Share Plan would vest: (i) to the extent that the performance criteria to which such options are subject have been met; and (ii) on a pro-rata basis to reflect the reduction in the length of the original performance period;
• Restricted share awards granted under the MISP, the Mutual & Federal Mangement Incentive Share Plan, the Mutual & Federal Namibia Management Incentive Share Plan, the OMSA Broad-Based Employee Share Plan, the Mutual & Federal Broad-Based Scheme and the Mutual & Federal Namibia Broad-Based Scheme would vest in full;
• Options and restricted share awards granted under the SBP, the Mutual & Federal Senior Black Managment Scheme and the Mutual & Federal Namibia Senior Black Management Scheme would vest in full; and
• Options granted under the SAYE and Sharesave would become exercisable to the extent of the savings accumulated.

The Committee has reviewed the operation of the share incentive schemes, including how discretion is exercised and the grant levels currently applicable, and considers these to be appropriate to the Company's circumstances and prospects.

Employee Share Ownership Trusts

The Group operates a number of Employee Share Ownership Trusts (ESOTs) through which it collateralises some of its obligations under employee share schemes.

At 31 December 2010, the following shares in the Company were held in ESOTs:

1 The Capital Growth Investment Trust is used to satisfy restricted share awards or Deferred Delivery Shares in Zimbabwe under a locally run scheme. Any surplus shares held in trust because of non-vesting are taken into account when purchasing shares in respect of future grants.

2 The Mutual & Federal Broad-Based Trust, the Mutual & Federal Management Incentive Trust and the Mutual & Federal Senior Black Management Trust were established during 2005 to subscribe for and hold shares in connection with its South African BEE ownership transactions. The strategy has historically been to ensure that sufficient shares were acquired to match future obligations.

3 The Mutual & Federal Namibia Broad-Based Trust, the Mutual & Federal Namibia Management Incentive Trust and the Mutual & Federal Namibia Senior Black Management Trust were established during 2006 to subscribe for and hold shares in connection with its Namibian BEE ownership transactions. The strategy has historically been to ensure that sufficient shares were acquired to match future obligations.

4 The Old Mutual plc Employee Share Trust is used to satisfy awards under the RSP, SRP and PSP (excluding South Africa, Namibia and Zimbabwe). Its strategy is to hold shares approximately equal to the number of shares awarded, but not yet vested, at any time. Any surplus shares held in trust because of non-vesting are taken into account when purchasing shares in respect of future awards.

5 The OMN Broad-Based Employee Share Trust and the OMN Management Incentive Trust were established during 2006 to subscribe for and hold shares in the Company in connection with its Namibian BEE ownership transactions. The OMN Broad-Based Employee Share Trust holds shares for the purposes of the Namibian awards under both the OMSA Broad-Based Employee Share Plan and the SBP, while the OMN Management Incentive Trust holds shares for Namibian awards under the MISP. Awards to white employees in Namibia under the MISP are settled by the OMSA Share Trust.

6 The OMSA Broad-Based Employee Share Trust and the OMSA Management Incentive Trust were established during 2005 to subscribe for and hold shares in the Company in connection with its South African BEE ownership transactions. The OMSA Broad-Based Employee Share Trust holds shares for the purposes of both the OMSA Broad-Based Employee Share Plan and the SBP, while the OMSA Management Incentive Trust holds shares for the MISP. Awards to white employees under the MISP and all awards that have been granted to South African and Namibian employees under the RSP and SOP are settled by the OMSA Share Trust. The strategy has historically been to ensure that sufficient shares were acquired to match at least 90 percent of the obligations of each share incentive grant. However, as a result of the requirements of the Company's BEE transactions in South Africa and Namibia, it was necessary to place shares allotted as part of the transactions in the relevant BEE employee share trusts immediately, in order to cover the total annual share grant allocations likely to be made to black participants in terms of the BEE transactions up to 2014 and 2016 respectively.

The general practice of the ESOTs shown in the table above (save for the BEE-related trusts) is not to vote the shares held at shareholder meetings, although beneficiaries of restricted shares may in principle give directions for those shares to be voted. However, with respect to the OMSA Broad-Based Employee Share Trust, the OMSA Management Incentive Trust, the OMN Broad-Based Employee Share Trust, the OMN Management Incentive Trust, the Mutual & Federal Management Incentive Trust, the Mutual & Federal Senior Black Management Trust, the Mutual & Federal Broad-Based Trust, the Mutual & Federal Namibia Management Incentive Trust, the Mutual & Federal Namibia Senior Black Management Trust and the Mutual & Federal Namibia Broad-Based Trust, the Trustees may, because of BEE considerations, vote any unallocated shares held in these trusts as well as those shares held in respect of any unexercised share options. The beneficiaries of any restricted shares allocated by these BEE employee share trusts are entitled to vote their relevant shares.

Options (excluding nil-cost options) granted under the SOP (for employees outside South Africa and Namibia), Sharesave, SRP, PSP and SAYE are currently intended to be settled by the issue of new shares rather than using shares held in an ESOT.

Dilution limits

For the purposes of calculating dilution limits, any awards that are satisfied by transfer of pre-existing issued shares (such as shares acquired by market purchase through ESOTs) and any shares comprised in any option that has lapsed are disregarded. The Company has complied with these limits at all times.

At 31 December 2010, the Company had 2.41% of share capital available under the 5%-in-five-years limit applicable to discretionary share incentive schemes and 6.56% of share capital available under the 10%-in-10-years limit applicable to all share incentive schemes. The issued share capital figures used for these calculations have not been reduced to reflect shares bought back into treasury by the Company.

Listed subsidiary's share incentive schemes

The Company's separately-listed subsidiary, Nedbank Group Limited, has its own share incentive schemes, which are under the control of the Remuneration Committee of its board and are not further addressed in this report. Neither of the executive directors of the Company has any interest under any such subsidiary share incentive schemes.