DEFINITIONS

In this Scheme the following words and expressions shall, where the context so permits, have the following meanings:

In this Scheme except in so far as the context otherwise requires:

words denoting the singular number shall include the plural number and words denoting the masculine gender shall include the feminine gender;

any reference herein to any enactment or statutory provision shall be construed as a reference to that Bermudian enactment or provision as from time to time amended extended or re-enacted; and

References to the exercise of an Option shall include the exercise of an Option in part.

GRANT OF OPTION

At any time after the Adoption Date, and not later than the tenth anniversary thereof, the Board may, in its absolute discretion, resolve to grant an Option or Options to an Eligible Person or to Eligible Persons on the terms and conditions set out in the Rules and in its resolution.

Immediately following the Date of Grant the Board shall notify the relevant Eligible Persons that they have been granted Options.

The notice given by the Board pursuant to Clause 2.2 shall be in such form, not inconsistent with these Rules, as the Board may determine and shall specify the number of Shares comprised in the Option, any terms applicable thereto other than as set out herein, the Date of Grant and the Subscription Price.

Not later than twelve weeks following the Date of Grant, the Option Holder may, by a notice given in writing, renounce his rights to any Option granted pursuant to Clause 2.1 in which event such Option shall be deemed for all purposes never to have been granted.

As soon as possible after the expiry of the twelve week notice period referred to in Clause 2.4, the Board shall issue an Option Certificate in respect of each Option in such form, not inconsistent with these Rules, as the Board may determine.

LIMITATIONS

No Option shall be granted after the tenth anniversary of the Adoption Date.

No Option shall be granted to any person unless he is, at the Date of Grant, an Eligible Person.

MAIN TERMS

No consideration shall be payable to the Company for the grant of an Option.

The Option shall entitle the Option Holder to subscribe for Shares at a price per Share equal to the Subscription Price at the date the Option is exercised.

Any Option which has not lapsed may be exercised in whole or in part at any time provided the earliest of the following events has occurred:

the Vesting Date;

the death of the Option Holder;

a Change of Control.

An Option which has vested, shall lapse on the earliest of the following events:

such date as the Board in its discretion may prescribe at the date the Option is granted, provided that such date cannot be later than the tenth anniversary of the Date of Grant;

the first anniversary of the Option Holder’s death;

the first anniversary of the Option Holder’s retirement;

three months following the Option Holder’s ceasing to be an Eligible Person, other than by reason of his death or retirement;

six months after the Option has become exercisable in accordance with Clause 7.1;

An Option which has not vested, shall lapse on the earliest of the following events:

the date of an Option Holder's retirement; and

the date an Option Holder ceasing to be an Eligible Person other than by reason of his death or retirement.

EXERCISE OF OPTIONS

Exercise of an Option shall be effected by the Option Holder giving notice in writing to the Company specifying the number of Option Shares (not being less than 500 Shares, and being a multiple of 100 Shares, except in the case of final exercise of all outstanding rights under the Option) in respect of which the Option is being exercised on that occasion and accompanied by the relevant Option Certificate and otherwise in such form and manner as the Board in its discretion may prescribe from time to time, provided that such notice shall be deemed to have been exercised and to take effect on the date on which payment of the Subscription Cost is received by the Company.

Subject to any necessary consents under regulations or enactments for the time being in force, compliance by the Option Holder with the Rules and receipt by the Company of the Subscription Cost, the Company shall, not later than thirty days after receipt of the notice referred to in Clause 5.1 above, allot and issue to the Option Holder the number of Shares specified in the notice. If the number of Shares over which the Option is exercised is less than that specified in the relevant Option Certificate then the Company will issue a balance Option Certificate in respect of the remainder of such Shares over which the Option is still capable of exercise.

Shares allotted under the Scheme in pursuance of the exercise of an Option shall rank pari passu in all respects with the Shares for the time being in issue save as regards any rights attaching by reference to a record date prior to the date on which the Option is exercised.

ADJUSTMENTS TO OPTION RIGHTS

In the event of any capitalisation or rights issue, any sub-division, consolidation or a reduction of the capital of the Company, the Board shall make appropriate adjustments with regard to:

the aggregate number of Shares subject to any Option;

the Subscription Price subject to any Option; or

the terms of any Option.

any such adjustment has been confirmed in writing by an Independent Expert to be in their opinion fair and reasonable; and

the aggregate Subscription Cost payable by an Option Holder on the exercise of all his Options is not increased; and

the amount payable to subscribe for any Share subject to any Option shall not be reduced below its nominal value.

The Board shall give notice in writing to each Option Holder affected by any adjustment made pursuant to Clause 6.1 and may, at its discretion, deliver to him a revised Option Certificate in respect of his Option.

WINDING-UP

If notice is given by the Board to the shareholders in the Company of a members’ resolution for the voluntary winding-up of the Company, notice of the same shall forthwith be given by the Board to the Option Holders. Each of the Option Holders shall be entitled, within three months following such notice, to give notice in writing to the Company (such notice being accompanied by payment of the Subscription Cost) that such Option Holder wishes to be treated as if all or any of his Options had been exercised immediately before the commencement of the winding-up. In such event the Option Holder will be entitled to participate in the assets available in the winding-up pari passu with the shareholders in the Company as if he were a shareholder in relation to such number of Shares as he would have been entitled to had his Options been so exercised. Subject thereto all Options shall lapse on the commencement of the winding-up.

Option rights shall lapse immediately in the event of the Company being wound-up otherwise than in the event of a voluntary winding-up.

VARIATION OF THE SCHEME

Subject to Clause 9.2 the Board may at any time alter or add to the Rules in any respect, provided that:

the Board may not cancel an Option except where (i) the Option Holder has breached the provisions of Clause 9.5 or (ii) the Option Holder has previously agreed; and

(subject as herein provided) the Board may not modify the terms of an Option already granted otherwise than with the consent of the Option Holder.

The Board shall give notice in writing to each Option Holder of any alteration or addition made pursuant to this Clause 8 and may, at its discretion, deliver to each Option Holder a revised Option Certificate in respect of his Option.

GENERAL PROVISIONS

The Company shall at all times keep available sufficient authorised but unissued Shares to satisfy the exercise in full of all Options for the time being capable of being exercised.

The Board may from time to time make and vary such regulations and establish such procedures for the administration and implementation of the Scheme as it thinks fit. In the event of any dispute or disagreement as to the interpretation of the Rules or as to the question of rights arising from or related to the Scheme, the decision of the Board shall (except as regards any matter required to be determined by the Auditors hereunder) be final and binding upon all persons.

The cost of the administration and implementation of the Scheme shall be borne by the Company.

The rights and obligations of an Eligible Person under the terms on which the Eligible Person holds his office or employment with a Participating Company shall not be affected by his participation in the Scheme or by any right he may have to participate therein, and the Scheme shall afford an Eligible Person no rights to compensation or damages in connection with the termination of such office or employment for any reason whatsoever.

The rights and obligations of an Option Holder shall be personal to the Option Holder and no Option nor the benefit thereof may be transferred, assigned, charged or otherwise alienated save that nothing in this sub-clause shall prohibit the transmission of an Option or the benefit thereof by operation of law.

For so long as the Shares are listed on the Oslo Stock Exchange or any other stock exchange, the Company shall apply to the appropriate authorities of such stock exchange(s) for all Shares subscribed for under the Scheme to be admitted for trading thereon on par with the other Shares.

Any notice or other document to be served by the Company under the Scheme on an Eligible Person or Option Holder may be served personally or by e-mail or by sending it through the post in a prepaid letter addressed to him at his address as last known to the Company. Any notice or other document to be served on the Company under the Scheme may be served by an Eligible Person or Option Holder by leaving it at the registered office for the time being of the Company or by e-mail or by sending it through the post in a prepaid letter addressed to such registered office. Where any notice or other document is served or sent by first class post it shall be deemed to have been received at the expiration of seven days (excluding Saturdays, Sundays or public holidays in Bermuda or Norway) after the time when cover containing the same was put in the post properly addressed and stamped. Any notice or document sent by e-mail shall be deemed to have been received at the time of transmission to the party to which it is addressed.

The Insider Trading Regulations of the Company are applicable to the Shares received as a consequence of the exercise of Options.

TERMINATION OF THE SCHEME

the date (if any) determined by the Board to be the date of termination of the Scheme; and

the tenth anniversary of the Adoption Date.

Following termination of the Scheme pursuant to Clause 10.1 above, no further Options shall be granted but the subsisting rights and obligations of existing Option Holders will continue in force as if the Scheme had not terminated.