QinetiQ Group PLC

Remuneration Information • Jun 12, 2023

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author: Lappin, Erin 14541
date: 2023-06-12 09:58:00+00:00

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CLAUSE PAGE

QINETIQ GROUP PLC

RULES OF THE QINETIQ GROUP PLC ANNUAL BONUS PLAN

Approved by shareholders of the Company in general meeting on [•] 2023

Adopted by the remuneration committee of the board of the Company on [•] 2023

CONTENTS

1. DEFINITIONS AND INTERPRETATION 1

2. GRANT OF AWARDS 3

3. performance conditions 5

4. LIMITS 5

5. VESTING 7

6. CONSEQUENCES OF VESTING 8

7. CASH ALTERNATIVE 8

8. LAPSE OF AWARDS 9

9. Leavers 9

10. Takeovers and other corporate events 11

11. ADJUSTMENT OF AWARDS 12

12. ALTERATIONS 13

13. MISCELLANEOUS 14

schedule 1 16

MALUS AND CLAWBACK 16

DEFINITIONS AND INTERPRETATION

In the Plan, unless the context otherwise requires:

"Admitted" means admitted to the premium segment of the official list (or any equivalent successor) maintained by the FCA and admitted to trading on the London Stock Exchange's main market for listed securities;

"Award" means the Bonus and Bonus Shares together;

"Board" means the board of directors of the Company or a duly authorised committee of the Board or a duly authorised person;

"Bonus" means a cash payment to a Participant equal to 70% (or such other percentage as may be determined by the Committee from time to time) of the value of a Vested Award;

" Bonus Shares" means ordinary shares equal in value to 30% (or such other percentage as may be determined by the Committee from time to time) of a Vested Award;

"Cash Payment" the amount of the Bonus to be paid to a Participant following the Vesting of an Award;

"Committee" means the remuneration committee of the Board or other duly authorised committee which fulfils the same function;

"Company" means QinetiQ Group plc (registered in England and Wales with registered number 04586941);

"Company's Code" means such code or codes for regulating dealings in Shares (or other securities of the Company) by directors or employees of any Group Member as may for the time being be in force;

"Control" means control within the meaning of section 719 of the Income Tax (Earnings and Pensions) Act 2003;

"Dividend Equivalent" means a benefit calculated by reference to dividends paid on Shares as described in Rules ‎2.5 (Treatment of Dividends) and ‎6.3 (Dividend equivalent);

"Early Vesting Date" means either:

the date of cessation of employment of a Participant in the circumstances referred to in Rule ‎9.1 (Good leavers); or

a date of notification referred to in Rule ‎10.1 (General offers), the date of the relevant event referred to in Rule ‎10.2 (Schemes of arrangement and winding up) or the date of Vesting referred to in Rule ‎10.3 (Demerger and similar events);

"Eligible Employee" means any employee (including an executive director) of any Group Member;

"FCA" means the Financial Conduct Authority acting in its capacity as the competent authority for the purpose of Part VI of the Financial Services and Markets Act 2000;

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

"Group Member" means:

a Participating Company or a body corporate which is the Company's holding company (within the meaning of section 1159 of the Companies Act 2006) or a Subsidiary of the Company's holding company; and

a body corporate which is a subsidiary undertaking (within the meaning of section 1162 of that Act) of a body corporate within paragraph ‎(a) above and has been designated by the Board for this purpose;

"Holding Period" means two years from the date on which an Award Vests;

"Listing Rules" means the Listing Rules published by the FCA from time to time;

"London Stock Exchange" means London Stock Exchange plc or any successor to that company;

"Market Abuse Regulation" means the UK version of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse as it is in force at the relevant time;

"Normal Vesting Date" means:

in relation to a Bonus, the date on which a Bonus Vests and becomes payable under Rule ‎5.1 (Timing of Vesting of Bonus: Normal Vesting Date); and

in relation to Bonus Shares, the date on which the Bonus Shares vest under Rule ‎5.2 (Timing of Vesting of Bonus Shares: Normal Vesting Date);

"Participant" means a person who holds an Award including their personal representatives;

"Participating Company" means the Company or any Subsidiary of the Company;

"Performance Condition" means any objective condition(s) related to performance which is specified by the Committee under Rule ‎2.1 (Terms of grant), Rule ‎3.1 (Imposition of Performance Conditions) or any amended or relaxed condition(s) substituted in accordance with Rule ‎3.2 (Variation of Performance Conditions);

"Performance Period" means the period from the Grant Date to the first anniversary of the Grant Date;

"Plan" means the QinetiQ Group plc Annual Bonus Plan as amended from time to time;

"Rule" means a rule of the Plan;

"Shares" means fully paid ordinary shares in the capital of the Company;

"Subsidiary" means a body corporate which is a subsidiary (within the meaning of section 1159 of the Companies Act 2006) or any other company which is directly or indirectly a subsidiary of a company which itself is a Subsidiary;

"Tax Liability" means any amount of income tax or other taxes (including social security contributions) for which a Participant would or may be liable and for which any Group Member or former Group Member would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority; and

"Vest" means:

in relation to an Award, the Committee having determined the amount of the Bonus payable to the Participant and the number of Bonus Shares the Participant will receive at the end of the Holding Period;

in relation to a Bonus, a Participant becoming entitled to receive a Cash Payment subject to the Rules;

in relation to Bonus Shares, a Participant becoming entitled to have those Bonus Shares transferred to them (or their nominee),

and "Vesting" and "Vested" shall be construed accordingly.

Any reference in the Plan to any enactment includes a reference to that enactment as from time to time modified, extended or re-enacted.

Expressions in italics and headings are for guidance only and do not form part of the Plan.

GRANT OF AWARDS

Terms of grant

Subject to Rule ‎2.7 (Timing of grant), Rule ‎2.8 (Dealing Restrictions) and Rule ‎4 (Limits), the Committee may resolve to grant an Award to any Eligible Employee on:

the terms set out in the Plan; and

such additional terms, whether a Performance Condition in accordance with Rule ‎3 and/or any other terms as the Committee may specify.

An Award may only be made in accordance with the Directors' Remuneration Policy as approved by shareholders and in effect at the Grant Date of the Award.

Method of grant

An Award shall be granted by deed executed by the Company.

Indemnity from Participants

By accepting an Award a Participant agrees to indemnify any Group Member and any other person against any Tax Liability.

Award certificates

As soon as is practicable after making an Award the Company shall issue, or procure the issue of, a certificate (the "Award Certificate") to be signed and returned by the Participant within 14 days of being sent such Award Certificate. The Award Certificate shall contain such terms and conditions as the Committee shall determine (provided that they are not inconsistent with the terms of this Plan) and shall specify:

the Grant Date;

the proportion of the Award to be paid in the form of a Bonus and the proportion to be deferred into Bonus Shares;

the Normal Vesting Date for the Bonus and the Bonus Shares;

any applicable Performance Condition(s) or other terms as the Committee may specify;

if to be determined at the Grant Date, whether and on what basis a Participant is entitled to dividend equivalents in respect of their Award pursuant to Rule ‎2.5 (Treatment of Dividends);

whether Malus and Clawback shall apply to an Award, as specified under ‎schedule 1.

Treatment of Dividends

The Committee may decide at any time that a Participant (or their nominee) shall be entitled to receive a benefit determined by reference to the value of all or any of the dividends (excluding the dividend tax credit unless the Committee decides otherwise) that would have been paid on the Bonus Shares in respect of dividend record dates occurring during the period between the Grant Date and the date of Vesting of the Bonus Shares and may further decide that such benefit shall be provided in cash and/or shares. The Committee may decide to exclude the value of all or part of any special dividend from the amount of the Dividend Equivalent.

Method of satisfying Deferred Award

Unless specified to the contrary by the Committee on the Grant Date, Bonus Shares may be satisfied:

by the issue of new Shares; and/or

by the transfer of treasury Shares; and/or

by the transfer of Shares (other than treasury Shares).

Timing of grant

Subject to Rule ‎2.8 (Dealing Restrictions), an Award may only be granted:

Within 42 days beginning with:

the date on which the Plan is approved by the shareholders of the Company; or

the dealing day after the date on which the Company announces its results for any period; or

at any other time when the Committee considers that circumstances are sufficiently exceptional to justify its grant

but an Award may not be granted after [•] 2033 (that is, the expiry of the period of 10 years beginning with the date on which the Plan is approved by the shareholders of the Company).

Dealing Restrictions

No Award shall be made at any time when dealings in Shares are prohibited by the Listing Rules, the Company's Code, the City Code on Takeovers and Mergers, the Market Abuse Regulation or any other UK or overseas regulation or enactment.

Non-transferability and bankruptcy

An Award granted to any person:

shall not be transferred, assigned, charged or otherwise disposed of except on their death to their personal representatives and shall lapse immediately on any attempt to do so; and

shall lapse immediately if they are declared bankrupt.

performance conditions

Imposition of Performance Conditions

The Vesting of an Award shall be subject to the satisfaction of such Performance Conditions as the Committee shall from time to time determine are appropriate. The extent to which the Performance Conditions have been satisfied will be measured at the end of the Performance Period.

Variation of Performance Conditions

If events happen which cause the Committee, acting fairly and reasonably, to consider that Performance Conditions have become unfair or impractical, it may, if it considers it appropriate to do so, amend, relax or waive such Performance Conditions (including the weightings attached to the Performance Conditions) provided such amendment, relaxation or waiver is in alignment with the Company's business strategy and priorities at that time. The altered Performance Condition will, in the reasonable opinion of the Committee, not be materially less difficult to satisfy than the unaltered Performance Condition would have been but for the events in question. All affected Participants shall be notified in writing of any relaxation, amendment or waiver.

Performance underpin

The Committee, in its absolute discretion, can adjust (both upwards and downwards) the extent of Vesting of any Award based on the level of the Company, its Subsidiaries and its subsidiary undertakings performance and/or the Participant's performance over the Performance Period. In considering and determining the Group or Participant's performance, the Committee may have regard to any information, factors and/or events that it considers relevant and/or appropriate.

LIMITS

5 per cent. in 10 years limit

An Award shall not be granted in any calendar year if, at the time of its proposed Grant Date, it would cause the number of Shares allocated (as defined in Rule ‎4.3 (Meaning of "allocated")) in the period of 10 calendar years ending with that calendar year under the Plan and under any other executive share plan adopted by the Company to exceed such number as represents 5 per cent. of the ordinary share capital of the Company in issue at that time.

10 per cent. in 10 years limit

An Award shall not be granted in any calendar year if, at the time of its proposed Grant Date, it would cause the number of Shares allocated (as defined in Rule ‎4.3 (Meaning of "allocated")) in the period of 10 calendar years ending with that calendar year under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents 10 per cent. of the ordinary share capital of the Company in issue at that time.

Meaning of "allocated"

For the purposes of Rules ‎4.1 (5 per cent. in 10 years limit) and ‎4.2 (10 per cent. in 10 years limit)

Shares are allocated:

when an option, award or other contractual right to acquire unissued Shares or treasury Shares is granted;

where Shares are issued or treasury Shares are transferred otherwise than pursuant to an option, award or other contractual right to acquire Shares, when those Shares are issued or treasury Shares transferred; and

any Shares which have been issued or which may be issued (or any Shares transferred out of treasury or which may be transferred out of treasury) to any trustees to satisfy the exercise of any option, award or other contractual right granted under any employee share plan shall count as allocated unless they are already treated as allocated under this Rule.

For the avoidance of doubt, existing Shares other than treasury Shares that are transferred or over which options, awards or other contractual rights are granted shall not count as allocated.

Post-grant events affecting numbers of "allocated" Shares

For the purposes of Rule ‎4.3 (Meaning of "allocated"):

where:

any option, award or other contractual right to acquire unissued Shares or treasury Shares is released or lapses (whether in whole or in part); or

after the grant of an option, award or other contractual right the Committee determines that:

it shall be satisfied by a cash payment; or

it shall be satisfied by the transfer of existing Shares (other than Shares transferred out of treasury)

the unissued Shares or treasury Shares which consequently cease to be subject to the option, award or other contractual right shall not count as allocated; and

the number of Shares allocated in respect of an option, award or other contractual right shall be such number as the Board shall reasonably determine from time to time.

Changes to investor guidelines

Treasury Shares shall cease to count as allocated Shares for the purposes of Rule ‎4.3 (Meaning of "allocated") if institutional investor guidelines cease to require such Shares to be so counted.

Individual limit

The maximum amount over which an Award may be granted to any Participant during any financial year of the Company may not exceed any limit specified in the Company's directors' remuneration policy, as approved by shareholders of the Company from time to time.

Effect of limits

Any Award shall be limited and take effect so that the limits in this Rule ‎4 (LIMITS) are complied with.

Restriction on use of unissued Shares and treasury Shares

No Shares may be issued or treasury Shares transferred to satisfy the Vesting of a Deferred Award to the extent that such issue or transfer would cause the number of Shares allocated (as defined in Rule ‎4.3 (Meaning of "allocated") and adjusted under Rule ‎4.4 (Post-grant events affecting numbers of "allocated" Shares)) to exceed the limits in Rules ‎4.1 (5 per cent. in 10 years limit) and ‎4.2 (10 per cent. in 10 years limit) except where there is a variation of share capital of the Company which results in the number of Shares so allocated exceeding such limits solely by virtue of that variation.

VESTING

Timing of Vesting of Bonus: Normal Vesting Date

Except where earlier Vesting occurs on an Early Vesting Date under Rule ‎9 (Leavers) or Rule ‎10 (Takeovers and other corporate events), subject to Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues), a Bonus shall Vest at the end of the Performance Period (or such other date as the Committee may determine on or before the Grant Date), subject to the satisfaction of the Performance Conditions.

Timing of Vesting of Bonus Shares: Normal Vesting Date

Except where earlier Vesting occurs on an Early Vesting Date under Rule ‎9 (Leavers) or Rule ‎10 (Takeovers and other corporate events), subject to Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues) and ‎schedule 1, Bonus Shares shall Vest on the second anniversary of the end of the Performance Period (or such other date as the Committee may determine on or before the Grant Date).

Restrictions on Vesting: regulatory and tax issues

An Award shall not Vest unless and until the following conditions are satisfied:

the Vesting of the Award, and any cash payment or issue or transfer of Shares after such Vesting would be lawful in all relevant jurisdictions and in compliance with the Listing Rules, any relevant share dealing code of the Company, the City Code on Takeovers and Mergers and any other relevant UK or overseas regulation or enactment;

if, on the Vesting of the Award, a Tax Liability would arise by virtue of such Vesting, then the Participant must have entered into arrangements acceptable to the Board such that the relevant Group Member will receive the amount of such Tax Liability;

the Participant has entered into such arrangements as the Committee requires (and where permitted in the relevant jurisdiction) to satisfy a Group Member's liability to social security contributions in respect of the Vesting of the Award; and

where the Committee requires, the Participant has entered into, or agreed to enter into, a valid election under Part 7 of ITEPA (Employment income: elections to disapply tax charge on restricted securities) or any similar arrangement in any overseas jurisdiction.

For the purposes of this Rule ‎5.3, references to Group Member include any former Group Member.

Tax liability before Vesting

If a Participant will, or is likely to, incur any Tax Liability before the Vesting of an Award then that Participant must enter into arrangements acceptable to any relevant Group Member to ensure that it receives the amount of such Tax Liability.

For the purposes of this Rule ‎5.4, references to Group Member include any former Group Member.

Payment of Tax Liability

The Participant authorises the Company to deduct from their Cash Payment or salary (in relation to the Bonus), or sell or procure the sale of sufficient Bonus Shares on or following the Vesting of their Award (in relation to the Bonus Shares) on their behalf to ensure that any relevant Group Member or former Group Member receives the amount required to discharge the Tax Liability which arises on Vesting except to the extent that the Board decides that all or part of the Tax Liability shall be funded in a different manner.

CONSEQUENCES OF VESTING

Bonus

On or as soon as reasonably practicable after the end of the Performance Period, the Board shall, subject to Rule ‎5.5 (Payment of Tax Liability) and any arrangement made under Rules ‎5.3(b) and ‎5.3(c) (Restrictions on Vesting: regulatory and tax issues), calculate the Cash Payment and pay it to the Participant via payroll (or a nominee for them).

A Bonus may pay out in full or in part based on assessment of the Performance Condition a, including resulting in a payment of nothing.

If following the assessment of the Performance Condition, the Participant is not entitled to receive any Cash Payment, the Award will immediately lapse in full.

Bonus Shares

On or as soon as reasonably practicable after the Vesting of Bonus Shares, the Board shall, subject to Rule ‎5.5 (Payment of Tax Liability) and any arrangement made under Rules ‎5.3(b) and ‎5.3(c) (Restrictions on Vesting: regulatory and tax issues), allot or transfer or procure the transfer of the Vested Shares to the Participant (or a nominee for them).

Dividend equivalent

If the Committee decides at any time under Rule ‎2.5 (Treatment of Dividends) that a Participant would be entitled to receive a Dividend Equivalent in relation to Bonus Shares , then the provision of the Dividend Equivalent to the Participant shall be made as soon as practicable after Vesting of the Bonus Shares and;

in the case of a Dividend Equivalent paid in cash, shall be subject to such deductions (on account of tax or similar liabilities) as may be required by law or as the Board may reasonably consider to be necessary or desirable;

in the case of a Dividend Equivalent satisfied in Shares, Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues), Rule ‎5.5 (Payment of Tax Liability) and ‎schedule 1 shall apply as if such allotment or transfer of Shares was the Vesting of Bonus Shares.

CASH ALTERNATIVE

Committee determination

Where Bonus Shares have not yet been allotted or transferred to the Participant (or their nominee), the Committee may determine that, in substitution for their right to receive such number of Bonus Shares as the Committee may decide (but in full and final satisfaction of their right to acquire those Shares), they shall be paid by way of additional employment income a sum equal to the cash equivalent (as defined in Rule ‎7.2 (Limitation on the application of Rule 7.1)) of that number of Shares in accordance with the following provisions of this Rule ‎7.

Limitation on the application of Rule 7.1

Rule ‎7.1 (Committee determination) shall not apply in relation to an Award made to a Participant in any jurisdiction where the presence of Rule ‎7.1 (Committee determination) would cause:

the grant of the Award to be unlawful or for it to fall outside any applicable securities law exclusion or exemption; or

adverse tax or social security contributions consequences for the Participant or any Group Member as determined by the Board,

provided that this Rule ‎7.2 shall apply only if its application would prevent the occurrence of a consequence referred to in ‎(a) or ‎(b) above.

Cash equivalent

For the purpose of this Rule ‎7, the cash equivalent of a Share is the market value of a Share on the day when the Bonus Shares Vest.

Market value on any day shall be determined as follows:

if on the day of Vesting or exercise, Shares are quoted in the London Stock Exchange Daily Official List, the middle-market quotation of a Share, as derived from that List, on that day; or

if Shares are not so quoted, such value of a Share as the Committee reasonably determines.

Payment of cash equivalent

As soon as reasonably practicable after the Committee has determined under Rule ‎7.1 (Committee determination) that a Participant shall be paid a sum in substitution for their right to receive any number of Bonus Shares, the Company shall pay to them or procure the payment to them of that sum in cash.

Deductions

There shall be deducted from any payment under this Rule ‎7 such amounts (on account of tax or similar liabilities) as may be required by law or as the Board may reasonably consider to be necessary or desirable.

LAPSE OF AWARDS

An Award shall lapse on the tenth anniversary of the Grant Date unless an earlier date is specified in the Rules or Award Certificate.

Leavers

Good leavers

If a Participant ceases to be a director or employee of a Group Member before the Normal Vesting Date by reason of:

retirement with the agreement of their employer;

ill health, injury or disability evidenced to the satisfaction of the Committee;

redundancy (within the meaning of the Employment Rights Act 1996) or any overseas equivalent;

death;

their office or employment being with either a company which ceases to be a Group Member or relating to a business or part of a business which is transferred to a person who is not a Group Member; or

any other reason, if the Committee so decides

then, subject to Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues), Rule ‎10 (Takeovers and other corporate events), and ‎schedule 1, their Award shall Vest on the Normal Vesting Date unless the Committee decides that their Award shall Vest on the date of cessation and, in the case of a Bonus, Rule ‎9.3 (Leavers: reduction in Bonus) shall apply.

Cessation of employment in other circumstances

If a Participant ceases to be a director or employee of a Group Member for any reason other than those specified in Rule ‎9.1 (Good leavers) then any Award held by them shall lapse immediately on such cessation and no Award shall be granted for the financial year in which the employment terminates.

Leavers: reduction in Bonus

Where a Bonus Vests on or after a Participant ceasing to be a director or employee of a Group Member, the Committee shall determine the Cash Payment due to them by the following steps:

applying any Performance Condition and any other condition imposed on the Vesting of the Bonus; and

applying a pro rata reduction to the Cash Payment determined under ‎9.3(a) based on the period of time elapsed from the Grant Date to the date of cessation relative to the period of one year,

unless the Committee, acting fairly and reasonably, decides that the reduction in the Cash Payment under Rule ‎9.3(b) is inappropriate in any particular case when it shall increase the Cash Payment to such higher amount as it decides, provided that amount does not exceed the Cash Payment determined under Rule ‎9.3(a).

If a Bonus Vests under any of Rules ‎10.1 (General offers) to ‎10.3 (Demerger and similar events) when the holder of that Bonus has ceased to be a director or employee of a Group Member then this Rule ‎9.3 shall take precedence over Rule ‎10.5 (Corporate events: reduction in Bonus).

Meaning of ceasing employment

A Participant shall not be treated for the purposes of this Rule ‎9 as ceasing to be a director or employee of a Group Member until such time as they are no longer a director or employee of any Group Member. If any Participant ceases to be such a director or employee before the Vesting of their Award in circumstances where they retain a statutory right to return to work then they shall be treated as not having ceased to be such a director or employee until such time (if at all) as they cease to have such a right to return to work while not acting as an employee or director.

Death following cessation of employment

If a Participant dies following cessation of employment in circumstances where their Award did not lapse but it has not Vested by the time of their death, it shall Vest on the Normal Vesting Date unless the Committee decides that their Award shall Vest immediately on their death to the extent determined by reference to the time of cessation of employment in accordance with Rule ‎9.1 (Good leavers).

Takeovers and other corporate events

General offers

If any person (or group of persons acting in concert) obtains Control of the Company as a result of making a general offer to acquire Shares; or having obtained Control of the Company makes such an offer and such offer becomes unconditional, the Board shall within 7 days of becoming aware of that event notify every Participant of it.

Subject to Rule ‎10.4 (Internal reorganisations), Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues) and ‎schedule 1, all Awards shall Vest on the date of such notification if they have not then Vested, and, in the case of a Bonus, Rule ‎10.5 (Corporate events: reduction in Bonus) shall apply.

Schemes of arrangement and winding up

In the event that:

a compromise or arrangement is sanctioned by the Court under section 899 of the Companies Act 2006 in connection with or for the purposes of a change in Control of the Company; or

the Company passes a resolution for a voluntary winding up of the Company; or

an order is made for the compulsory winding up of the Company

all Awards shall, subject to Rule ‎5.3 (Restrictions on Vesting: regulatory and tax issues), Rule ‎10.4 (Internal reorganisations) and ‎schedule 1, Vest on the date of such event if they have not then Vested and, in the case of a Bonus, Rule ‎10.5 (Corporate events: reduction in Bonus) shall apply.

Demerger and similar events

If a demerger, special dividend or other similar event (the "Relevant Event") is proposed which, in the opinion of the Committee, would affect the market price of Shares to a material extent, then the Committee may, at its discretion, decide that the following provisions shall apply:

the Committee shall, as soon as reasonably practicable after deciding to apply these provisions, notify a Participant that, subject to earlier lapse under Rule ‎9 (Leavers), their Award Vests on such terms as the Committee may determine and during such period preceding the Relevant Event or on the Relevant Event as the Committee may determine;

if an Award Vests conditional upon the Relevant Event and such event does not occur then the conditional Vesting shall not be effective and the Award shall continue to subsist; and

if the Committee decides that an Award Vests under this Rule ‎10.3 then the date of that Vesting shall be the Early Vesting Date and the provisions of Rule ‎10.5 (Corporate events: reduction in Bonus) shall apply.

Internal reorganisations

In the event that:

a company (the "Acquiring Company") is expected to obtain Control of the Company as a result of an offer referred to in Rule ‎10.1 (General offers) or a compromise or arrangement referred to in Rule ‎10.2(a) (Schemes of arrangement and winding up); and

at least 75% of the shares in the Acquiring Company are expected to be held by substantially the same persons who immediately before the obtaining of Control of the Company were shareholders in the Company,

then the Committee, with the consent of the Acquiring Company, may decide before the obtaining of such Control that an Award shall not Vest under Rule ‎10.1 (General offers) or Rule ‎10.2 (Schemes of arrangement and winding up) but shall be automatically surrendered in consideration for the grant of a new award which the Committee determines is equivalent to the Award it replaces except that it will be over shares in the Acquiring Company or some other company.

The Rules will apply to any new award granted under this Rule ‎10.4 as if references to Shares were references to shares over which the new award is granted and references to the Company were references to the company whose shares are subject to the new award.

Corporate events: reduction in Bonus

If a Bonus Vests under any of Rules ‎10.1 (General offers) to ‎10.3 (Demerger and similar events) (inclusive), the Committee shall determine the Cash Payment by the following steps:

subject to Rule ‎3.2, applying any Performance Condition and any other condition imposed on the Vesting of the Bonus; and

subject to Rule ‎9.3 (Leavers: reduction in Bonus), by applying a pro rata reduction to the Cash Payment determined under Rule ‎10.5(a) based on the period of time after the Grant Date and ending on the Early Vesting Date relative to the period of 1 year, unless the Committee, acting fairly and reasonably, decides that the reduction in the Cash Payment under Rule ‎10.5(b) is inappropriate in any particular case when it shall increase the Cash Payment to such higher amount as it decides provided that number does not exceed the Cash Payment determined under Rule ‎10.5(a).

If a Bonus Vests under any of Rules ‎10.1 (General offers) to ‎10.3 (Demerger and similar events) (inclusive) after the holder of that Award has ceased to be a director or employee of a Group Member then Rule ‎9.3 (Leavers: reduction in Bonus) shall take precedence over this Rule ‎10.5.

ADJUSTMENT OF AWARDS

General rule

In the event of any variation of the share capital of the Company or a demerger, special dividend or other similar event which affects the market price of Shares to a material extent, the Committee may make such adjustments to an Award as it considers appropriate under Rule ‎11.2 (Method of adjustment).

Method of adjustment

An adjustment made under this Rule shall be to one or more of the following:

a Cash Payment;

the number of Bonus Shares to which a Participant is entitled;

where Bonus Shares have Vested but no Shares have been transferred or allotted after such Vesting, the number of Shares which may be so transferred or allotted.

ALTERATIONS

General rule on alterations

Except as described in Rule ‎12.2 (Shareholder approval), and Rule ‎12.4 (Alterations to disadvantage of Participants) the Committee may at any time alter the Plan or the terms of any Award.

Shareholder approval

Except as described in Rule ‎12.3 (Exceptions to shareholder approval), no alteration to the advantage of an individual to whom an Award has been or may be granted shall be made under Rule ‎12.1 (General rule on alterations) to the provisions concerning:

eligibility;

the individual limits on participation;

the overall limits on the issue of Shares or the transfer of treasury Shares;

the basis for determining a Participant’s entitlement to, and the terms of, Shares or cash provided under the Plan;

the adjustments that may be made in the event of any variation of capital; and

the terms of this Rule ‎12.2,

without the prior approval by ordinary resolution of the members of the Company in general meeting.

Exceptions to shareholder approval

Rule ‎12.2 (Shareholder approval) shall not apply to:

any minor alteration 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 any Group Member; or

any alteration relating to the Performance Condition made under Rule ‎12.4 (Alterations to disadvantage of Participants).

No alteration to the material disadvantage of Participants (other than to any Performance Condition) shall be made under Rule ‎12.1 (General rule on alterations) unless:

the Board shall have invited every relevant Participant to indicate whether or not they approve the alteration; and

the alteration is approved by a majority of those Participants who have given such an indication.

Alterations to disadvantage of Participants

No alteration to the material disadvantage of Participants (other than to any Performance Condition) shall be made under Rule ‎12.1 (General rule on alterations) unless:

the Board shall have invited every relevant Participant to indicate whether or not they approve the alteration; and

the alteration is approved by a majority of those Participants who have given such an indication.

MISCELLANEOUS

Employment

The rights and obligations of any individual under the terms of their office or employment with any Group Member shall not be affected by their participation in the Plan or any right which they may have to participate in it. An individual who participates in the Plan waives any and all rights to compensation or damages in consequence of the termination of their office or employment for any reason whatsoever (and regardless of whether such termination is lawful or unlawful) insofar as those rights arise or may arise from them ceasing to have rights under an Award as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon any individual who participates in it. The grant of any Award does not imply that any further Award will be granted nor that a Participant has any right to receive any further Award.

Disputes

In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or relating to the Plan, the decision of the Committee shall be final and binding upon all persons.

The exercise of any power or discretion by the Committee shall not be open to question by any person and a Participant or former Participant shall have no rights in relation to the exercise of or omission to exercise any such power or discretion.

Share rights

All Shares allotted under the Plan shall rank equally in all respects with Shares then in issue except for any rights attaching to such Shares by reference to a record date before the date of the allotment.

Where Vested Shares are transferred to Participants (or their nominee), Participants will be entitled to all rights attaching to such Shares by reference to a record date on or after the date of such transfer.

Listing

The Company shall use its best endeavours to procure that as soon as practicable after the allotment of any Shares pursuant to the Plan application shall be made for the Shares to be Admitted.

Notices

Any notice or other communication under or in connection with the Plan may be given in such manner as the Board consider to be appropriate, which may include communication by email or intranet or by personal delivery or by sending the same by post, in the case of a company to its registered office, and in the case of an individual to their last known address, or, where they are a director or employee of a Group Member, either to their last known address or to the address of the place of business at which they perform the whole or substantially the whole of the duties of their office or employment.

Where any such notice or other communication is given by a Participant to the Company, it shall be effective only on receipt by the Company.

Third parties

Subject to Rule ‎2.9 (Non-transferability and bankruptcy), no third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan.

Benefits not pensionable

Neither the making of an Award nor any benefit which may accrue to the Participant on the Vesting of an Award shall form part of the Participant's pensionable remuneration for the purposes of any pension plan or similar arrangement which may be operated by any Group Member.

Termination of plan

The Plan shall terminate on the tenth anniversary of the date on which the Plan is approved by the shareholders of the Company or at any earlier time by a resolution of the Committee. Termination of the Plan shall be without prejudice to the subsisting rights of Participants or any other relevant persons.

Data protection

The Company or any Group Member, any of their associated companies, the trustees of any employee benefit trust, any administrator of the Plan (the "Administrator"), the Company's registrars, or the Company's or Administrator's brokers will hold, process and transfer personal data relating to the Participant, either amongst themselves or to any third parties engaged by them, for any and all purposes related to the operation and administration of the Plan and/or in order to meet any legal obligation, in each case in accordance with the Company’s data privacy policy and applicable law where the processing is necessary for:

the performance of the contract between the Company and the Participant under which the Participant participates in the Plan;

the Company or any Group Member to comply with its legal obligations; or

the purposes of furthering the legitimate business interests of the Company or any Group Member provided this does not conflict with the legal rights of the Participant.

The Company or any Group Member may, in accordance with the Company’s data privacy policy and applicable law, transfer or store personal information outside the European Economic Area ("EEA"), and personal data may also be processed outside the EEA by the Company or any Group Member or by one or more of its or their service providers.

Governing law

The Plan and all Awards shall be governed by and construed in accordance with the laws of England and Wales and the Courts of England and Wales have exclusive jurisdiction to hear any dispute or claim (including non-contractual disputes or claims).

MALUS AND CLAWBACK

Events that lead to Recovery and Withholding

The Committee may decide at any time within the three year period commencing on the date on which an Award Vests (the "Discovery Period") that the individual to whom the Award was made (the "Relevant Individual") shall be subject to an obligation to repay the amounts referred to in paragraph ‎2 below ("Recovery and Withholding") if:

there is a discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group Member;

the Committee forms the view that any performance condition or condition in respect of an Award was based on error, or inaccurate or misleading information;

there is a discovery that any information used to determine the amount of the Award was based on error, or inaccurate or misleading information,

there is any action or conduct of the Relevant Individual which amounts to fraud or gross misconduct; or

the behaviour of the Relevant Individual has led to the censure of a Group Member by a regulatory authority or had significant detrimental impact on the reputation of any Group Member provided the Committee is satisfied that the Relevant Individual was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to the Relevant Individual.

The Discovery Period may be extended by the Committee for an additional period of two years, being therefore a total period of five years from the date on which an Award Vests, if an event occurs which the Committee determines could result in the operation of Recovery or Withholding under ‎0(a) to (c) above and there is an ongoing investigation into the circumstances of such event. The Committee will notify any individuals to whom this may apply.

Amount to be subject to Recovery and Withholding

The Committee shall determine the amount to be subject to Recovery and Withholding which:

where paragraph 1(i) and/or 1(ii) above applies, shall be all or part of the additional value which the Committee considers was granted and/or has Vested to and/or was otherwise received by the Relevant Individual in the circumstances referred to in those paragraphs; and

where paragraph 1(iii) above applies, shall be all or part of such value which the Committee determines would have not Vested and/or would have not otherwise been received under the Award had the Award lapsed in full in connection with the misconduct.

Any determinations under this paragraph ‎2 above shall be on such basis as the Committee reasonably decides.

Satisfaction of the Recovery and Withholding

The Recovery and Withholding shall be satisfied as set out in paragraphs ‎(i) and/or ‎(ii) below.

The Committee may reduce (including, if appropriate, reducing to zero) any of the following elements of the remuneration of the Relevant Individual:

the amount of any future bonus which would, but for the operation of the Recovery and Withholding, be payable to the Relevant Individual in respect of the relevant financial year under any bonus plan operated by any Group Member; and/or

the number of Shares subject to any subsisting award (either unvested or vested but unexercised, as relevant) held by the Relevant Individual under any deferred bonus plan operated by any Group Member; and/or

the number of Shares subject to any subsisting Award and/or other award (either unvested or vested but unexercised, as relevant) held by the Relevant Individual under the Plan or any other employees’ share plan or share award arrangement (except for any award which is tax-advantaged pursuant to Schedules 1 to 5 inclusive of the Income Tax (Earnings and Pensions) Act 2003 or any deferred bonus plan which is not approved by shareholders in general meeting) notwithstanding the extent to which any performance condition and/or any other condition imposed on any such Award and/or other award (as relevant) has been satisfied; and/or

the Committee may require the relevant individual to pay to such Group Member as the Committee may direct, and on such terms as the Committee may direct (including, but without limitation to, on terms that the relevant amount is to be deducted or withheld from the Relevant Individual's salary or from any other payment to be made to the Relevant Individual by any Group Member), such amount as is required for the Recovery and Withholding to be satisfied in full.

Any reduction made pursuant to paragraphs ‎(i)‎(B) and/or ‎(i)‎(C) above shall be made at such time or times as the Committee determines appropriate and which, in the case of unvested awards, shall be at the time they would otherwise ordinarily vest unless the Committee decides otherwise.

Reduction in Awards to give effect to recovery and withholding provisions in other plans

The Committee may decide at any time to reduce the amount of a Cash Payment or the number of Bonus Shares subject to an Award (including, if appropriate, reducing to zero) to give effect to recovery and withholding provisions of any form and/or name contained in any incentive plan or any bonus plan operated by any Group Member. The value of the reduction shall be in accordance with the terms of the relevant provisions of the relevant plan or, in the absence of any such term, on such basis as the Committee, acting fairly and reasonably, decides is appropriate.