RECOMMENDED COMBINATION OF PACE PLC ( Pace ) AND ARRIS GROUP, INC. ( ARRIS )

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1 THIS LETTER IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. This letter relates to a proposed transaction which, if implemented, will result in the cancellation of the listing of Pace Shares on the Official List and of trading of Pace Shares on the London Stock Exchange s main market for listed securities. If you are in any doubt as to the action you should take, or the content of this document, you are recommended to seek your own personal legal and tax advice from a solicitor and/or financial advice immediately from your stockbroker, bank manager, accountant, or other independent financial adviser authorised under the Financial Services and Markets Act 2000, if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are taking advice in a territory outside the United Kingdom. 25 September 2015 To: Holders of Awards under the Pace Performance Share Plan ("PSP") Holders of Awards under the Pace International Performance Share Plan ("IPSP") Holders of Awards under the Pace plc Deferred Share Plan ("DSP") Holders of Awards under the Pace Unapproved Discretionary Share Option Plan 2005 ("Unapproved Plan") Holders of Awards under the Pace Approved Discretionary Share Option Plan 2005 ("Approved Plan" and together with the Unapproved Plan, the "Discretionary Option Plans") (collectively referred to as the "Plans") Dear Awardholder RECOMMENDED COMBINATION OF PACE PLC ( Pace ) AND ARRIS GROUP, INC. ( ARRIS ) The purpose of this letter is to explain the effect of the proposed combination with ARRIS described below on Awards granted under the Plans and to set out the proposal being made to you in relation to your Awards under any of the Plans. If you participate in the Pace UK Sharesave Plan or the Pace Americas US Sharesave Plan, you will receive a separate letter. 1. BACKGROUND On 22 April 2015, the Boards of Pace and ARRIS announced that they had agreed the terms of a recommended combination of Pace with ARRIS (the "Merger"), proposed to be implemented through the acquisition of Pace and ARRIS by New ARRIS, a company incorporated in England and Wales by ARRIS for the purpose of implementing the Merger. It is intended that the acquisition of Pace by New ARRIS will be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme"). The acquisition of ARRIS by New ARRIS will become effective on the same date under a US merger arrangement which is entirely separate to the Scheme. A circular dated 25 September 2015 has been sent to Pace Shareholders (the "Scheme Circular"). The Scheme Circular can be viewed at This letter should be read in conjunction with the Scheme Circular. The definitions set out in the Scheme Circular (see Appendix V) apply in this letter unless stated otherwise. The Scheme is a Court process to effect the acquisition of Pace by New ARRIS. The Court first approves the Scheme and the acquisition, which then becomes effective a few days later. The Court approval is referred to here as the "Court Sanction". Court Sanction is expected to occur in late 2015 once US regulatory approval for the Merger has been received. For the purposes of this letter, Awards means awards granted to you under the Plans in either the form of options or contingent share awards which:- (a) if the Awards are in the form of options, have not yet vested and become exercisable (or have already vested but have not yet been exercised); and \sc24 1

2 (b) if the Awards are in the form of contingent share awards, have not yet vested. If you were resident in the USA at the date of grant of an Award you would have received contingent share award(s). 2. WHAT IS THE EFFECT ON MY AWARDS? Overview In summary, the proposal being made to you in respect of your Awards is to receive the Scheme Consideration in respect of the Pace Shares subject to your Award, conditional on approval of the Scheme by Pace Shareholders, ARRIS Shareholders and the Court. All unvested Awards (whether granted as contingent share awards or options) will vest on the date of the Court Sanction. In the case of options, once vested, they will need to be exercised by you. In the case of both options and contingent share awards, any Pace shares transferred to you will, under the proposal being made to you, be subject to the Scheme. Please note that in most jurisdictions, the vesting/exercise (as applicable) of Awards is likely to attract a tax liability. See further information below. Leavers Except as mentioned below, the effect of the Merger on your Awards, as described in this letter, will only apply to you if you remain in employment within the Pace Group until, and do not give or receive notice to leave employment before, the Court sanctions the Scheme. Should you leave, or give or receive notice to leave, you will be contacted separately with details of the impact on your Awards. If you have previously left employment, or are under notice, but have been notified that you will retain your Award(s), the proposal in this letter will apply to you, to the extent only that your Award(s) remain outstanding. In this case, you will be asked to provide bank account details for the purposes of receiving cash payments in connection with the exercise/vesting of your Award(s) and references in this letter to the bank account into which salary is paid should be read as references to the bank account which you have notified to Pace/Computershare. Vested Awards (Options only) If you hold options that have already vested (or that will vest in the normal course) but have not been exercised, you remain free to exercise them (once vested) until the latest date for exercise in connection with the Scheme (see further below), or if sooner, their normal lapse date, subject to the terms of the Pace Share Dealing Guidelines. Your options will normally be subject to tax and social security (or similar) contributions ("Tax Liability") at the time of exercise and as part of the normal exercise process. You may exercise your options using the same process outlined in relation to unvested Awards below. In particular, using the process outlined below means that your Tax Liability will be dealt with without you having to provide your own funds. Otherwise, you may exercise your options in accordance with the instructions provided to you by Computershare when your options became (or become) exercisable in the normal course, in which case, you will be asked to confirm how you wish to satisfy the Tax Liability if there is an obligation on Pace to withhold such amount. You are advised to give any such instructions prior to 16 October 2015 to ensure your exercise can be processed in advance of the earliest possible date for the Court Sanction. If you exercise your options before the Court Sanction, you may then sell the Pace Shares acquired on exercise of your options (subject to the Pace Share Dealing Rules, and assuming there remains a market for the Pace Shares in the run up to the Merger) or you may retain them and participate in the Scheme \sc24 2

3 See section 6 (What happens if I do not accept the proposal?) below for details of when options will lapse if not exercised. Unvested Awards (Options and Contingent Share Awards) Unvested awards will vest in full when the Court sanctions the Scheme. Pace has determined that all unvested Awards will vest on the basis that the performance conditions have been 100% achieved and such Awards will not be pro-rated to reflect the fact that the vesting periods have not yet ended. In the case of contingent share awards, your Awards will vest and you will receive the relevant number of Pace Shares. Further details are set out in section 3 below (Vesting, Exercise and Settlement) in relation to how it is proposed that your Tax Liability is dealt with. In essence, it is proposed that a proportion of your Awards will be cancelled for a cash payment which, together with the cash element of the Scheme Consideration, is at least sufficient to fund your Tax Liability without you having to use your own funds. A similar arrangement is being put in place for options. Options can be exercised up until 16 October 2015, conditional on the Court sanctioning the Scheme, with exercise to be effective on the date of the Court Sanction. Again, it is proposed that a proportion of your options will be cancelled for a cash payment which, together with the cash element of the Scheme Consideration, can be used to fund your exercise price (if any) and Tax Liability without you having to use your own funds. Further details are set out in section 3 below (Vesting, Exercise and Settlement). See section 6 (What happens if I do not accept the proposal?) below for details of when options will lapse if not exercised. 3. VESTING, EXERCISE AND SETTLEMENT This section applies to Awards which vest or are exercised in connection with the Scheme and, in the case of options, for which exercise takes effect on the date of the Court Sanction. This will be the case if you accept the proposals by logging in to the Computershare portal to confirm your acceptance. Further details of how to do this are set out in section 5 (What should I do next?) below. What will I become entitled to on vesting/exercise of my Awards? In accordance with the rules of the Plans, Awards which vest on, and options for which exercise takes effect on, the Court Sanction will be settled by the transfer to you of the relevant number of Pace Shares (taking into account the cash cancellation mechanism described below) which will then be subject to the Scheme. For administrative ease, although you will be considered the owner of the Pace Shares to which you are entitled on the vesting/exercise of your Awards, these will be held on your behalf in the Vested Share Account operated by Computershare for Pace share plans and you will not be issued with a share certificate in respect of these Pace Shares. Will I have to pay any tax? Any amounts you receive pursuant to your Award will be subject to the usual deductions for your Tax Liability. For further details about tax liabilities in some jurisdictions, please see Appendix 3 to this letter. How will my Tax Liability be settled? Although you will receive cash consideration under the Scheme (see below "What will happen to any Pace Shares to which I become entitled?"), this cash consideration may not be sufficient to cover the Tax Liability arising. Therefore, where Pace has an obligation to withhold and pay your Tax Liability over to the authorities, in order to fund the balance of the Tax Liability on your behalf, Pace is proposing to cancel a proportion of each of your Awards in return for a cash sum (the "Cash Cancellation Amount"). This is because your Tax Liability arises on vesting/exercise and, whereas normally you would be able to sell sufficient of your Pace Shares to fund the liability, this will not be possible due to the Scheme. The cash cancellation proposal is therefore being put in place to replicate an immediate sale \sc24 3

4 The portion of your Awards that will be cancelled will be calculated using a formula which will take into account the tax rate in your jurisdiction. Pace will use the top rate of tax in your jurisdiction for the calculation. Your Tax Liability will then be deducted by Pace from a combination of the Cash Cancellation Amount and the cash consideration you receive under the Scheme for the Pace Shares acquired by you. This means that you will not have to use your own funds to reimburse Pace for your Tax Liability. To the extent that the actual amount required to be deducted is less than the amount calculated based on the top rate of tax, the unused funds will be repaid to you via payroll (into the bank account into which your salary is normally paid) as soon as reasonably practical. If your Award is in the form of an option for which you must pay an exercise price, this amount will be added into the formula used to calculate the Cash Cancellation Amount so that your obligation to pay the exercise price will also be funded out of this amount, rather than you having to use your own funds. If you are a Canadian resident, you are required to pay the nominal value of each Pace Share you receive on vesting or exercise of your Award and this aggregate sum will be added into the formula used to calculate the Cash Cancellation Amount references to "exercise price" in this letter should be read as including such aggregate nominal value. If you are an Australian resident or a Singapore resident, Pace is not required to collect your Tax Liability by withholding, and you will be required to account for this to the tax authorities under selfassessment. The cash cancellation proposal will still apply to your Awards - should you prefer not to accept this proposal, please see below ("Can the Tax Liability and payment of any exercise price (if relevant) be dealt with in another way?") If you hold options under the Approved Plan, as there is no Tax Liability on exercise, the cash cancellation proposal will not apply to these options. Your exercise price will be deducted from the cash element of the Scheme Consideration. Please note, however, that you may have a capital gains tax liability arising as a result of the transfer of your Pace shares. An example of how the cash cancellation proposal works is set out in Appendix 2 to this letter. As the number of shares subject to your Awards to be cash cancelled will be rounded up to the nearest whole number, there may be a small balance of the Cash Cancellation Amount payable to you after your Tax Liability (and any exercise price) have been deducted. This will also be paid to you into the bank account into which your salary is normally paid. Can the Tax Liability and payment of any exercise price (if relevant) be dealt with in another way? If you do not wish to settle your Tax Liability and the payment of any exercise price as set out above, please contact Anthony Dixon, Pace General Counsel and Company Secretary, at anthony.dixon@pace.com. Please note you will need to organise for the provision of cleared funds to cover any exercise price, and to agree arrangements satisfactory to Pace for the funding of any Tax Liability for which your employer is liable to account. You may not be able to sell New ARRIS Shares within the required timeframe for providing these funds. What will happen to any Pace Shares to which I become entitled? The balance of your Award (after applying the cash cancellation calculation) will vest and options may be exercised effective on the Court Sanction, as outlined above. The Pace Shares that you receive on vesting or exercise following Court Sanction will be transferred under the Scheme and you will be entitled to: \sc24 4

5 for each Pace Share pence in cash and New ARRIS Shares When will I be paid the Scheme Consideration? (together, the Scheme Consideration ). The cash element of the Scheme Consideration will be paid within 14 days following the date on which the Scheme becomes effective (the "Effective Date"). It will initially be paid into the bank account for the Computershare Vested Share Account, to be held on your behalf, and, as described above, will then be paid to you via payroll, subject to the necessary deductions for your Tax Liability (and any exercise price). This may mean that you do not in fact receive any cash sum, as it will be applied to meeting the necessary deductions for tax liabilities and any exercise price. Any cash received will be paid on the next practicable payroll date following receipt of the Scheme Consideration into the Vested Share Account. The Effective Date will occur no later than five days following the Court Sanction. Your New ARRIS Shares will be issued to you on the Effective Date. These will be held on your behalf by Computershare in the Vested Share Account. The terms of the Vested Share Account can be found on Computershare's portal, and in accepting these proposals via the portal you will be agreeing to those terms. Through Computershare's Vested Share Account you will be able to vote your New ARRIS Shares and any dividends which are declared will be reinvested in further New ARRIS Shares and such shares will be held by Computershare s appointed nominee in accordance with the Vested Share Account terms and conditions. You will also be able to sell your New ARRIS Shares by giving instructions to Computershare by logging in to your Vested Share Account online. Computershare will contact you separately with details of how to do this. Please note that for administrative reasons your online account may not become active until up to 14 days following the Effective Date. You will be a sent a new PIN number following the Court Sanction to access your account. If you become due, as part of your Scheme Consideration, to a fraction of a New ARRIS Share, your New ARRIS Shares will be rounded down to a number of whole shares. You will receive an additional cash amount equal to the market value of the fraction of a New ARRIS Share that you would otherwise have been entitled to on the date on which you receive the Scheme Consideration. 4. WILL I BE ABLE TO SELL MY NEW ARRIS SHARES? Once your New ARRIS Shares are credited to your Vested Share Account and your account has become active, you will be able to instruct Computershare in relation to a sale of your shares (subject to any applicable dealing restrictions). As the New ARRIS Shares are to be listed on the NASDAQ stock market in New York, you will need to bear in mind that your instructions may not be actioned immediately due to time differences in business hours between the UK, the US and, if appropriate, your country of residence. Details of dealing costs, including any foreign currency conversion costs, are set out in Computershare's terms and conditions of dealing. You should be aware that if you do not accept the proposal being made to you, which includes the terms of the Computershare Vested Share Account, you will need to make special arrangements in relation to the receipt and dealing in your New ARRIS Shares. Further detail is set out at section 6 below. 5. WHAT SHOULD I DO NEXT? With this letter, you will have received log-in details for the Computershare portal where you will be able to give your instructions in relation to your Awards. The relevant terms and conditions governing your instructions are set out in Appendix 1 to this letter \sc24 5

6 To confirm that you accept the proposal in relation to your Awards you must log-in to the portal and enter your acceptance where indicated on or before 16 October This date has been set to occur before the earliest possible date for the Court Sanction. You will be notified in due course of the Court Sanction date. If you want to take any action in respect of your Awards, other than as set out in this letter, please contact Anthony Dixon, Pace General Counsel and Company Secretary, at 6. WHAT HAPPENS IF I DO NOT ACCEPT THE PROPOSAL? In the case of options: if they were granted under the PSP or IPSP, they will lapse upon the Court sanctioning the Scheme; if they were granted under the DSP, they will lapse one month after you receive notification that the Scheme has been sanctioned; and if they were granted under the Discretionary Option Plans, they will lapse three months after the Scheme has been sanctioned. If you do not give instructions for the exercise of your options under the DSP and/or Discretionary Option Plans effective on the Court Sanction, you will need to contact Anthony Dixon, Pace General Counsel and Company Secretary, at anthony.dixon@pace.com in relation to exercise within the specified period following the Court Sanction. Please note that if you delay exercise until after the Court Sanction: the cash cancellation proposal will not be available to you as a means of funding any Tax Liability arising or your exercise price, and you will be required to provide Pace with sufficient funds to cover these liabilities; and your option will be satisfied by the transfer to you of New ARRIS shares and cash, equivalent to the Scheme Consideration which you would have received had the exercise of your options taken effect on the Court Sanction i.e., you will not at that stage be able to receive or retain Pace Shares. In the case of conditional awards, your Pace Shares will still be subject to the Scheme and you will receive the Scheme Consideration. However, you will be required to provide Pace with sufficient funds to cover your Tax Liability. If you do not accept the terms of the Computershare Vested Share Account by accepting the proposals in this letter via the Computershare portal, you will need to make separate arrangements for receiving your Scheme Consideration. In particular, as New ARRIS Shares will be listed on NASDAQ, there is a special process being established for the holding and trading of the shares which makes use of The Depositary Trust Company ("DTC"). All New ARRIS Shares will be deposited with DTC and all trades will be settled by book entry. In order for you to trade through DTC, the book entry interests in your New ARRIS Shares need to be credited to a DTC participant (broker, bank or other financial institution), and you would need to appoint a DTC participant in relation to your shares. Whilst it is possible to request a share certificate in relation to New ARRIS Shares, it would be extremely difficult and costly to then trade those shares. The issue of having to appoint a DTC participant is avoided by accepting the terms of the Vested Share Account as Computershare is a DTC participant. 7. WHERE CAN I GET FURTHER INFORMATION? If you have any queries (not requiring the provision of legal, financial or investment advice) regarding your Awards then you should contact the Computershare Helpline on or pace@computershare.co.uk, or contact Anthony Dixon, Pace General Counsel and Company Secretary (anthony.dixon@pace.com) or Dawn Edward, Pace Assistant Company Secretary (dawn.edward@pace.com), without delay \sc24 6

7 8. RECOMMENDATION FROM THE PACE DIRECTORS The Pace Directors, who have been so advised by J.P. Morgan Cazenove, consider the terms of the proposal described in this letter to be fair and reasonable. In providing advice to the Pace Directors, J.P. Morgan Cazenove has taken into account the commercial assessments of the Pace Directors. Yours faithfully For and on behalf of Pace plc Anthony Dixon General Counsel & Company Secretary For and on behalf of ARRIS Group, Inc. Patrick Macken Senior Vice President and General Counsel The Pace Directors, whose names are set out in paragraph 2.1 of Appendix III to the Scheme Circular, accept responsibility for all the information contained in this document other than the information for which responsibility is taken by the ARRIS Directors and by the New ARRIS Directors below. To the best of the knowledge and belief of the Pace Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The ARRIS Directors, whose names are set out in paragraph 2.2 of Appendix III to the Scheme Circular, accept responsibility for all the information contained in this document relating to ARRIS, the ARRIS Group and the proposals to participants in the Pace Share Schemes. To the best of the knowledge and belief of the ARRIS Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The New ARRIS Directors, whose names are set out in paragraph 2.3 of Appendix III to the Scheme Circular, accept responsibility for all the information contained in this document relating to New ARRIS and the New ARRIS Group and the proposals to participants in the Pace Share Schemes. To the best of the knowledge and belief of the New ARRIS Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. J.P. Morgan Limited (which conducts its UK investment banking business as "J.P. Morgan Cazenove"), which is authorised and regulated by the Financial Conduct Authority, is acting as financial adviser and corporate broker to Pace and no one else in connection with the Merger and will not be responsible to anyone other than Pace for providing the protections afforded to its clients or for providing advice in connection with the Merger or in relation to the contents of this document or any transaction or any other matters referred to herein. J.P. Morgan Cazenove has given and not withdrawn its written consent to the issue of this document with the inclusion of references to its name in the form and context in which they are included \sc24 7

8 APPENDIX 1 General TERMS AND CONDITIONS 1. To accept the proposal for your Award(s) in connection with the Scheme (Proposal), you must log in to the Computershare portal referred to in paragraph 5 of this letter as soon as possible but in any event by no later than 16 October 2015 and indicate your instructions. If you wish to take any other action you must contact Anthony Dixon, Pace General Counsel and Company Secretary, at anthony.dixon@pace.com. 2. Your acceptance of the Proposal via the Computershare portal constitutes: (a) (b) confirmation that you have had an opportunity to review the Scheme Document (which is available at this letter and the Terms and Conditions set out in this Appendix 1 and that you agree to the Terms and Conditions set out in this Appendix 1; and a warranty that you are entitled to your Award(s) and that they are valid and subsisting and free from all liens, charges and encumbrance of any nature and you acknowledge that if any Award(s) have lapsed or lapse before the Proposal takes effect, your instructions will be of no effect in respect of such lapsed Award(s). 3. You acknowledge that none of Pace, ARRIS or New ARRIS will be responsible for any consequential loss in the event of your instructions not being correctly given or where either of them has been unable to obtain clarification of your instructions. 4. This letter and the Terms and Conditions set out in this Appendix 1 are governed by and shall be construed in accordance with the laws of England. Cash cancellation, vesting and exercise 5. By accepting the Proposal via the Computershare portal, you confirm that, subject to the Scheme being sanctioned by the Court, you: (a) (b) (c) (d) (e) (f) agree to a proportion of each of your Award(s) being cancelled in return for a cash sum which, when added to the cash element of the Scheme Consideration, will be at least sufficient to cover your Tax Liability (based on the top rate of tax in the appropriate jurisdiction) and any exercise price payable in relation to the vesting and/or exercise of your Award(s); exercise your option(s) in respect of the maximum number of shares in respect of which it has vested and become exercisable (after taking into account the cancellation under 5(a) above), and undertake to pay the exercise price (if any); authorise Pace and/ or Pace's receiving agent Capita Asset Services to procure the registration of the Pace Shares issued to Computershare on your behalf following the vesting and/or exercise of your Award(s); confirm that Pace Shares issued pursuant to the vesting or exercise of your Award(s) in connection with the Scheme shall be bound by the terms of the Scheme; agree that your Pace Shares and the New ARRIS shares to be issued as part of the Scheme Consideration may be issued to Computershare on your behalf and held within the Computershare Vested Share Account, and you accept the terms and conditions of such account; authorise New ARRIS to pay the cash element of the Scheme Consideration to Computershare on your behalf; \sc24 8

9 (g) (h) authorise Pace and/or Computershare to arrange for the deduction of your Tax Liability (where there is an obligation on Pace to account for this amount) and any exercise price from the aggregate of the Cash Cancellation Amount and cash element of your Scheme Consideration, and to pay any excess to you into the bank account into which your normal salary is paid as soon as reasonably practicable thereafter; acknowledge that, where your Tax Liability is not dealt with as set out in 5(g) above, you may still have an income tax and/or social/security liability in relation to the value received on vesting and/or exercise of your Award(s) for which you are liable to account to the revenue authorities in your jurisdiction \sc24 9

10 APPENDIX 2 EXAMPLE OF CASH CANCELLATION Example in relation to PSP, IPSP and DSP If you hold an Award over 100 Pace shares and have a Tax Liability of 45%, your Award would be treated as follows: If the value of a Pace share on the day of the Court Sanction is 435p, your award would be worth 435 and your Tax Liability would be , leaving you with of post-tax value. Your Scheme Consideration in relation to 100 Pace shares would be and New ARRIS Shares. This cash amount would not be sufficient to discharge your Tax Liability, and it would not be possible to immediately sell New ARRIS Shares to cover the shortfall. If, however, your Award is cancelled in respect of 21 Pace shares (i.e / 435p p = 21 shares), you would receive under the cash cancellation proposal (i.e. 21 x 435p). The remaining 79 Pace shares would be subject to the Scheme and you would receive and New ARRIS Shares (i.e. 79 x p and New ARRIS Shares). Fractions of New ARRIS Shares will be sold on your behalf and you will receive the proceeds. The amount of the cash cancellation and the cash consideration under the Scheme would be ( plus ) which is sufficient to cover your Tax Liability of , with a surplus to be returned to you of 27p. Example in relation to Unapproved Plan options If you hold an Option over 100 Pace shares with an exercise price of 1 per share, and have a Tax Liability of 45%, your option would be treated as follows: If the value of a Pace share on the day of the Court Sanction is 435p, the gain on your option would be 335 (i.e less the 1 exercise price, multiplied by 100 shares) and your Tax Liability would be , leaving you with of post-tax value. Your Scheme Consideration in relation to 100 Pace shares would be and New ARRIS Shares. This cash amount would not be sufficient to discharge your exercise price and Tax Liability ( in aggregate), and it would not be possible to immediately sell New ARRIS Shares to cover the shortfall. If, however, your Award is cancelled in respect of 40 Pace shares (i.e / 435p p = 40 shares), you would receive 134 under the cash cancellation proposal (i.e. 40 x 335p). The remainder of your option would be exercised and the 60 resulting Pace shares would be subject to the Scheme and you would receive and 8.73 New ARRIS Shares (i.e. 60 x p and New ARRIS Shares). Fractions of New ARRIS Shares will be sold on your behalf and you will receive the proceeds. The amount of the cash cancellation and the cash consideration under the Scheme would be ( 134 plus 79.50) which is sufficient to cover your Tax Liability of and your exercise price of 60 (your exercise price relates only to the lower number of shares being acquired), with a surplus to be returned to you of \sc24 10

11 APPENDIX 3 TAX SUMMARY The information provided below is a brief summary of the likely tax implications of the vesting/exercise of Awards for participants who are (and have at all material times) been resident in the relevant jurisdiction. It is given by way of guidance and for information purposes based on current law and practice only and is not intended to be exhaustive. The tax position may differ depending on your personal circumstances. UK and US tax residents can find further information in relation to the tax implications of participating in the Scheme in Appendix I (UK Taxation) and Appendix II (US Taxation) of the Scheme Circular. Pace will calculate the tax due for the purposes of the cash cancellation calculations described in this letter, and any withholding obligations, on the basis of the highest rate of tax which may be payable in your jurisdiction. The tax in fact due may be less, depending upon your personal circumstances. To the extent that the actual amount required to be deducted is less than the amount calculated based on the top rate of tax, you will receive the unused funds into the bank account into which your salary is normally paid. If you have any concerns or would like further information about your individual tax position you should seek professional independent advice specific to your personal circumstances. Australia At the time of vesting, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This may occur even if you do not then exercise your Award. This amount will be subject to tax at your progressive income tax rates. You will be responsible for reporting and paying the income tax to the relevant authorities. Canada At the time of exercise, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates as well as employee social security (to the extent that the applicable earnings ceiling is not exceeded). Your employer will be responsible for withholding the income tax and employee social security amounts from you and paying this to the relevant authorities. France At the time of exercise, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates as well as employee social security. Your employer will be responsible for withholding the employee social security amount from you and paying this to the relevant authorities. You will be responsible for reporting and paying the income tax to the relevant authorities. India At the time of exercise, tax will arise in relation to the fair market value (as confirmed by a merchant banker in India) of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates. Your employer will be responsible for withholding the income tax amount from you and paying this to the relevant authorities. Singapore At the time of exercise, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates. You will be responsible for reporting and paying the income tax to the relevant authorities \sc24 11

12 South Africa At the time of exercise, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates as well as employee social security (to the extent that the applicable earnings ceiling is not exceeded). Your employer will be responsible for withholding the income tax and employee social security amounts from you and paying this to the relevant authorities. Spain At the time of exercise, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates as well as employee social security (to the extent that the applicable earnings ceiling is not exceeded). Your employer will be responsible for withholding the income tax and employee social security amounts from you and paying this to the relevant authorities. Taiwan At the time of exercise/delivery of the Pace Shares, tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest. This amount will be subject to tax at your progressive income tax rates. Your employer will be responsible for withholding the income tax amount from you and paying this to the relevant authorities. United Kingdom At the time of vesting (for contingent awards) or exercise (for options), tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest (for nil-cost options and awards) or the excess of the market value of the Pace Shares subject to your Award over the exercise price (for options under the Discretionary Option Plans). This amount will be subject to tax at your progressive income tax rates as well as national insurance contributions. Your employer will be responsible for withholding the income tax and national insurance contributions from you and paying this to HM Revenue & Customs. United States At the time of vesting (for contingent awards) or exercise (for options), tax will arise in relation to the market value of the Pace Shares subject to your Awards that vest (for nil-cost options and awards) or the excess of the market value of the Pace Shares subject to your Award over the exercise price (for options under the Discretionary Option Plans). This amount will be subject to tax at your progressive income tax rates as well as employee social security and Medicare taxes. Your employer will be responsible for withholding the income tax and employee social security and Medicare amounts from you and paying this to the relevant authorities \sc24 12