Dunelm Group PLC — Remuneration Information 2023

Oct 19, 2023

Rules of the Dunelm Group 2014 Long Term Incentive Plan

Approved by the shareholders of Dunelm Group plc on 11 November 2014

Adopted by the board of directors of Dunelm Group plc on 11 November 2014

As amended by the board of Directors of Dunelm Group plc on 24 November 2015 following approval by the shareholders of Dunelm Group plc on 24 November 2015

As amended by the board of Directors of Dunelm Group plc on 21 November 2017 following approval by the shareholders of Dunelm Group plc on 21 November 2017

As amended by the board of Directors of Dunelm Group plc on 17 November 2020, and applying to awards granted on or after that date.

As amended by the board of directors of Dunelm Group plc on 6 September 2023 subject to the approval of the shareholders of the Dunelm Group plc

Expiry date: 11 November 16 November 2033

Contents

1	DEFINITIONS AND INTERPRETATION	1
2	GRANT OF AWARDS	5
3	PERFORMANCE CONDITION	5
4	RESTRICTIONS ON TRANSFER AND BANKRUPTCY	6
5	DIVIDEND EQUIVALENTS	6
6	INDIVIDUAL LIMIT	6
7	PLAN LIMITS	7
8	REDUCTION FOR MALUS AND CLAWBACK	8
9	VESTING AND EXERCISE	998
10	TAXATION AND REGULATORY ISSUES AND SHAREHOLDING REQUIREMENTS9
11	CASH EQUIVALENT	10
12	CESSATION OF EMPLOYMENT	10
13	CORPORATE EVENTS	12
14	ADJUSTMENTS	15
15	AMENDMENTS	15
16	LEGAL ENTITLEMENT	16
17	GENERAL	16
	SCHEDULE	1
1	CASH AWARDS	1

THE DUNELM GROUP 2014 LONG TERM INCENTIVE PLAN

1 DEFINITIONS AND INTERPRETATION

1.1 In this Plan, unless otherwise stated, the words and expressions below have the following meanings:

"Assessment Date"	in relation to an Award, the later of:
	(a) the date on which the Board determines the extent to which any Performance Condition has been met; and
	(b) the date on which the Board determines whether an adjustment should be made in accordance with rule 9.2;
"Award"	a Conditional Award or an Option;
"Board"	subject to rule 13.9, the board of the Company or any committee or person duly authorised committee ofby the board, or any duly authorised successor body;
"Company"	Dunelm Group plc registered in England and Wales under number 04708277;
"Conditional Award"	a right to acquirereceive Shares automatically at no cost in accordance with the rules of the Plan with no Exercise Period;
"Control"	the meaning given by section 995 of the Income Tax Act 2007;
"Dealing Day"	any day on which the London Stock Exchange is open for business;
"Dealing Restrictions"	restrictions imposed by the MAR, the Company's share dealing codepolicy, the Listing Rules or any applicable laws or regulations which impose restrictions on share dealing;
"Eligible Employee"	an employee (including an executive director) of the Company or any of its Subsidiaries;
"Exercise PeriodFCA"	the period during which an Option may be exercised;the United Kingdom Financial Conduct Authority, or any successor body;
"Grant Date"	the date on which an Award is granted;
"Grant Period"	the period of 42 days commencing on:
	(a) the day on which the extension of the life of the Plan is approved by shareholders of the Company in general meeting;
	(b) the Dealing Day after the day on which the Company makes an announcement of its results for any period; (including any quarterly trading update);
	(c)
	(c) the day on which the Policy is approved by shareholders;

	(d)	in respect of an Eligible Employee, the date on which that Eligible Employee first becomes employed by the Company or any of its Subsidiaries; or
	(e)	any day on which the Board resolves that exceptional circumstances exist which justify the grant of Awards;
	lifted;	unless the Company is restricted from granting Awards under the Plan during the periods specified above as a result of any Dealing Restrictions, in which case the relevant Grant Period will be 42 days commencing on the Dealing Day after such Dealing Restrictions are
"Group Member"	the Company, any Subsidiary of the Company, any company which is (within the meaning of section 1159 of the Companies Act 2006) the Company's holding company or a Subsidiary of the Company's holding company or, if the Board so determines, any body corporate in relation to which the Company is able to exercise at least 20% of the equity voting rights and "Group" will be construed accordingly;
"Holding Period"		in respect of an Award which is subject to a Holding Period, the period starting on the later of the Assessment Date and the third anniversary of the Grant Date(or such later date as the Board determines) and ending two years later; (or at such other time as the Board may 1 determine on or before the Grant Date);
"Internal Reorganisation"		where immediately after a change of Control of the Company, all or substantially all of the issued share capital of the acquiring company is owned directly or indirectly by the persons who were shareholders in the Company immediately before the change of Control;
"Listing Rules"		the UKLA'sFCA's listing rules, as amended from time to time;
"MAR"		the EU Market Abuse Regulation 596/2014 and any associated EU Regulation, to the extent each is incorporated into the law of the United Kingdom by virtue of section 3 of the European Union (Withdrawal) Act 2018 and as amended by any instrument related to their incorporation into the law of the United Kingdom;
"Nil-Cost Option"		a right to acquire Shares in accordance with the terms of the Plan during an Exercise Period at no cost to the Participant;
"Nominal Value Option"		a right to acquire Shares in accordance with the terms of the Plan during an Exercise Period on payment of an exercise price equal to the nominal value of the Shares;

"Normal Vesting Date"²

the date on which an Award will normally Vest, which will be determined as set out below:

in respectAwards which are subject to a Performance Condition and to a Holding Period

The Normal Vesting Date of an Award which is subject to a Performance Condition and to a Holding Period, will be the first Dealing Day after the end of the Holding Period.

Awards which are subject to a Performance Condition but not subject to a Holding Period

The Normal Vesting Date of an Award which is subject to a Performance Condition but not subject to a Holding Period will be the later of:

(a) the Assessment Date; and

(b) the third anniversary of the Grant Date,

or such other date determined by the Board at the Grant Date.

Recruitment Awards which are not subject to a Performance Condition

The Normal Vesting Date of a Recruitment Award which is not subject to a Performance Condition will be the later of:

(a) the date specified for these purposes by the Board at the Grant Date; and

the date on which the Board determines whether an adjustment should be made in accordance with rule 9.2; and

the end of the Holding Period,

(or such later date determined by the Board at the Grant Date); and

• i) in respect of an Award which is subject to a Performance Condition but not subject to a Holding Period, will be the later of:
• (a) the Assessment Date;
• (b) the date on which the Board determines whether an adjustment should be made in accordance with rule 9.2;

(c) the third anniversary of the Grant Date,

(a) (or such later date determined by the Board at the Grant Date);

(b)

"Option" a Nil-Cost Option or a Nominal Value Option;

"Participant"	any person who holds an Award or following histheir death, histheir personal representatives;
"Performance Condition"	a condition or conditions imposed under rule 3.1 which relates to performance;
"Performance Period"	the period over which a Performance Condition will be measured which, unless the Board determines otherwise, will be at least three years;
"Plan"	the Dunelm Group 2014 Long Term Incentive Plan in its present form or as from time to time amended;
"Policy"	the Company's directors' remuneration policy that has most recently been approved by the Company's shareholders;
"Recovery Period"	(a) in the case of an Award subject to a Performance Condition, the period ending on the third anniversary of the Assessment Date (or such later date as the Board may choose if that determination is made before the originally anticipated end of the Performance Period); and
	(b) in the case of a Recruitment Award which is not subject to a Performance Condition, the period ending on the third anniversary of the Normal Vesting Date (or such other date as the Board may choose on or before the Grant Date);
3 "Recruitment Award"	an Award granted in connection with the recruitment of an Eligible Employee and which is granted in respect of remuneration they forfeit in connection with their joining the Group;
"Share"	a fully paid ordinary share in the capital of the Company;
"Shareholding Requirement"	means any requirement, guideline or policy determined by the Board from time to time pursuant to which a person must hold Shares either while they hold office or employment with a Group Member of following their ceasing to hold office or employment with a Group Member;
"Subsidiary"	the meaning given by section 1159 of the Companies Act 2006;
"Tax Liability"	any tax or social security contributions liability or other deductions required by law arising out of or in connection with an Award for which the Participant is liable (or which may be recovered from the Participant) and for which any Group Member or former Group Member is obliged to pay or account to any relevant authority;
"Trustee"	the trustee or trustees for the time being of any employee benefit trust, the beneficiaries of which include Eligible Employees;
"UKLA"	the United Kingdom Listing Authority (or other relevant authority);

• "Vest" (a) in relation to a Conditional Award, the point at which a Participant becomes entitled to receive the Shares; and
• (b) in relation to an Option, the point at which it becomes capable of exercise,

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

• 1.2 References in the Plan to:
• 1.2.1 any statutory provisions are to those provisions as amended or re-enacted from time to time;
• 1.2.2 the singular include the plural and vice versa; and
• 1.2.3 the masculine include the feminine and vice versa.
• 1.3 Headings do not form part of the Plan.

2 GRANT OF AWARDS

• 2.1 Subject to rule 2.2, during a Grant Period, the Board may grant an Award to an Eligible Employee in its discretion subject to the rules of the Plan and upon such additional terms as the Board may determine.
• 2.2 The grant of an Award will be subject to obtaining any approval or consent required by the UKLAFCA (or other relevant authority), any Dealing Restrictions and any other applicable laws or regulations (whether in the UK or overseas).
• 2.3 Awards must be granted by deed and as soon as practicable after the Grant Date, Participants must be notified of the terms of their Award including theany Performance Condition, and if the Award is subject to a Holding Period that this is the case.
• 2.4 A Participant may be required to accept an Award in such form as the Board reasonably requires and, if the Board has not received (or waived the right to receive) such acceptance on or before the date that is three months after the Grant Date:

2.4.1 the Award may not Vest; and

• 2.4.2 the Board may determine that the Award will lapse.
• 2.42.5No Award may be granted under the Plan after 16 November 2033 being the tenth anniversary of the date on which the extension of the life of the Plan was approved by the shareholders of the Company.
• 2.52.6The Board may make the Vesting (or, where relevant, the exercise) of an Award conditional upon the Participant having entered into:
• 2.5.12.6.1 an agreement or election pursuant to paragraphs 3A or 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992 (as the Board determines); and/or

2.5.22.6.2 an election under section 431 of the Income Tax (Earnings and Pensions) Act 2003.

3 PERFORMANCE CONDITION

3.1 TheSubject to rule 3.4, the Vesting of Awards will be subject to the satisfaction of a Performance Condition. Subject to rules 12 and 13, the Performance Condition will be measured over the Performance Period.

3.2 The Board may amend or substitute a Performance Condition if onein accordance with its terms or more events occur which cause if the Board to considerconsiders that a substituted or amended Performance Condition would be moreis reasonable, appropriate and would not be materially less difficult to satisfy than the original Performance Condition would have been but for the occurrence of the eventwhen it was originally set.

3.3

3.4

• 3.3 If the extent to which the Performance Condition is satisfied is determined before the end of the Performance Period, the Board will take into account such factors as it considers are relevant.
• 3.4 The Vesting of a Recruitment Award may be subject to the satisfaction of a Performance Condition, but does not have to be.

4 RESTRICTIONS ON TRANSFER AND BANKRUPTCY

• 4.1 An Award must not be transferred, assigned, charged or otherwise disposed of in any way (except in the event of the Participant's death, to histheir personal representatives) and will lapse immediately on any attempt to do so.
• 4.2 An Award will lapse immediately if the Participant is declared bankrupt.
• 4.3 The Board may grant an Award subject to such provisions as the Board may determine as to the retention of Shares by the Participant following the Vesting of the Award. In the case of an Award which is not subject to a Holding Period, any such provision may include, but is not limited to, a requirement that Shares acquired pursuant to an Award, other than any sold to realise an amount equal to any Tax Liability, must be retained until such date as the Board determines would have been the end of any Holding Period that would otherwise have applied and that any such Shares may be forfeited in the event of the Participant's summary dismissal before that date.

5 DIVIDEND EQUIVALENTS

5.1 The Board may decide at any time prior to the issue or transfer of Shares to which an Award relates that a Participant will receive an amount (in cash and/or Shares, and which may be calculated assuming the reinvestment of dividends) equal in value to some or all of the dividends (including special dividends, unless the Board determines otherwise) that would have been paid on Shares in respect of which the Award Vests from:over such period (ending no later than the date on which the Award Vests) as the Board may determine.

5.1.1 the end of the Performance Period until the date of Vesting; or

5.1.2 the start of the Performance Period (if the Board so determines) until the date of Vesting.

6 INDIVIDUAL LIMIT

• 6.1 Subject to rule 6.2, no Eligible Employee may be granted Awards in respect of the Company's 2017- 2018 financial year over more than 110,000 Shares.
• 6.2 The limit in rule 6.1 on the number of Shares over which an Eligible Employee may be granted Awards in respect of any financial year of the Company may be adjusted in such manner as the Board determines in the event of any variation of the Company's share capital.

6.36.1No Eligible Employee may be granted Awardsan Award (other than a Recruitment Award) which would, at the time they areit is granted, cause the market value (as determined by the Board)⁴ of all the Shares subject to Awards (other than Recruitment Awards) granted to that Eligible Employee in respect of a particular financial year of the Company other than its 2017-2018 financial year to exceed 200250% of histheir annual salary and to the extent any award exceeds this limit it will be scaled back accordingly and treated as never having been granted to the extent it is so scaled back.

7 PLAN LIMITS

• 7.1 The Board must not grant an Award which would, on the day before the Grant Date, cause the number of Shares allocated under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents ten per cent of the ordinary share capital of the Company in issue at that time.
• 7.2 The Board must not grant an Award which would, on the day before the Grant Date, cause the number of Shares allocated under the Plan and under any other discretionary employee share plan adopted by the Company to exceed such number as represents five per cent of the ordinary share capital of the Company in issue at that time.
• 7.3 Subject to rules 7.4 and 7.5, in determining the limits set out in rules 7.1 and 7.2 Shares are treated as allocated if they have been newly issued by the Company or transferred from treasury to satisfy an option, award or other right granted during the previous ten years (an "award"), or in the case of such an award in respect of which Shares are yet to be delivered, if the Board intends that new Shares will be issued or that Shares from treasury will be transferred and for these purposes the number of Shares allocated includes:
• 7.3.1 Shares which have been issued or may be issued to any Trustee; and
• 7.3.2 Shares which have been or may be transferred from treasury to any Trustee

in either case for the Trustee to then transfer to satisfy an award (unless these Shares have already been counted under this rule).

• 7.4 The Board may determine that Shares transferred from treasury will cease to count as allocated for the purposes of rule 7.3 if guidelines published by institutional investor representative bodies no longer require such Shares to be counted.
• 7.5 The number of Shares allocated does not include:
• 7.5.1 Shares issued or committed to be issued to satisfy awards granted prior to the admission of the Shares to the Official List of the London Stock Exchange;
• 7.5.2 Shares in respect of which the rightthat were allocated to acquiresatisfy awards to the extent that such Shares lapsesawards have lapsed, been relinquished or is releasedbeen satisfied in cash; and
• 7.5.3 existing Shares other than treasury Shares which arethat have been transferred to satisfy awards or to which an award relatesthat have been allocated to satisfy awards.
• 7.6 If the Board purports to grant one or more Awards which are inconsistent with the limits in this rule 7:

• 7.6.1 if only one Award is purported to be so granted, that Award will be limited and will take effect from the Grant Date over the maximum number of Shares permitted by those limits; and

• 7.6.2 if more than one Award is purported to be so granted, each such Award will be reduced as determined by the Board and will take effect from the Grant Date over the maximum number of Shares permitted by those limits.

• 7.7 The Board may make such adjustments to the method of assessing the limits set out in rules 7.1 and 7.2 as it considers appropriate in the event of any variation of the Company's share capital.

8 REDUCTION FOR MALUS AND CLAWBACK

• 8.1 Notwithstanding any other rule of the Plan, the Board may, in its discretion in the circumstances referred to in rule 8.2, determine at any time prior to the third anniversaryend of the Date on which an Award VestsRecovery Period to:
• 8.1.1 if the Award has not Vested or the Award is an Option and has not been exercised, reduce the number of Shares to which the Award relates;
• 8.1.2 if the Award has not Vested or the Award is an Option and has not been exercised, cancel the Award;
• 8.1.3 if the Award has not Vested or the Award is an Option and has not been exercised, impose further conditions on the Award; or
• 8.1.4 if the Award has Vested and, if it is an Option, been exercised, require that the Participant:
  • (a) transfer for nil consideration (or procure such transfer) to the Company (or the Trustee or any other person nominated by the Company) some or all of Shares delivered to them under the Award; and/or
  • (b) make a cash payment to the Company in respect of some or all of the Shares or cash delivered to them under the Award.
• 8.2 The relevant circumstances for the purposes of rule 8.1 are:
• 8.2.1 a material misstatement of any Group Member's financial results;
• 8.2.2 a material error in assessing an Award's Performance Condition or in the information or assumptions on which the Award was granted or Vests;
• 8.2.3 a material failure of risk management in any Group Member or a relevant business unit;
• 8.2.4 serious reputational damage to any Group Member or a relevant business unit;
• 8.2.5 serious misconduct or material error on the part of the Participant;
• 8.2.6 material corporate failure in any Group Member or relevant business unit; or
• 8.2.7 any other circumstances that the Board in its discretion considers to be similar in their nature or effect to those in rules 8.2.1 to 8.2.7.
• 8.3 Notwithstanding any other rule of the Plan, the Board may, in its discretion, determine at any time to take the action referred to in rules 8.1.1 to 8.1.4 (inclusive) in the event of the Participant committing fraud.
• 8.4 If the Board exercises its discretion in accordance with this rule 8, it will confirm this in writing to each affected Participant and, if necessary, the Trustee.

9 VESTING AND EXERCISE

• 9.1 As soon as reasonably practicable after the end of the Performance Period relating to an Award which is subject to a Performance Condition, the Board will determine if and to what extent the Performance Condition has been satisfied, and, accordingly, the extent to which the Award will, subject to rule 9.29.2 Vest.
• 9.2 As soon as reasonably practicable after the determination under rule 9.1,9.1 or, in the case of a Recruitment Award which is not subject to a Performance Condition, the date specified by the Board at the Grant Date for the purposes of the definition of "Normal Vesting Date", the Board may, in its discretion, adjust (including by reducing to nil) the extent to which an Award would (but for this rule 9.2) Vest, if it considers that:
• 9.2.1 such Vesting level does not reflect the underlying financial or non-financial performance of the Participant or the Group over the Performance Period; where the Award has a Performance Condition;
• 9.2.2 such Vesting level is not appropriate in the context of circumstances that were unexpected or unforeseen at the Grant Date; or
• 9.2.3 there exists any other reason why an adjustment is appropriate,

taking into account such factors as the Board considers relevant.

• 9.3 To the extent an Award will not Vest as a result of the determination in accordance with rule 9.1 and any adjustment under rule 9.2, it will lapse immediately.
• 9.4 Subject to rules 12 and 13, an Award will Vest:
• 9.4.1 on the Normal Vesting Date; or
• 9.4.2 if on the Normal Vesting Date (or on any other date on which an Award is due to Vest under rule 12 or 13) a Dealing Restriction applies to the Award, on the date on which such Dealing Restriction lifts; and

an Option may then be exercised until the tenth anniversary of the Grant Date (or such earlier date as the Board may determine on or prior to the Grant Date) in such manner as the Board determines (including in the case of a Nominal Value Option as to the payment of the exercise price for the Shares in respect of which the Nominal Value Option is exercised), after which time it will lapse.

9.5 Subject to rules 10 and 11, where a Conditional Award has Vested or an Option has been exercised, the number of Shares in respect of which the Award has Vested or been exercised together with any additional Shares or cash to which a Participant becomes entitled under rule 5 will be issued, transferred or paid (as applicable) to the Participant within 30 daysas soon as practicable thereafter.

10 TAXATION AND REGULATORY ISSUES AND SHAREHOLDING REQUIREMENTS

10.1 A Participant will be responsible for and indemnifies each relevant Group Member and the Trustee against any Tax Liability relating to histheir Award. Any Group Member and/or the Trustee may withhold an amount equal to such Tax Liability (or the relevant Group Member's reasonable estimate of such Tax Liability) from any amounts due to the Participant (to the extent such withholding is lawful) and/or make any other arrangements as it considers appropriate to ensure recovery of such Tax Liability (or reasonable estimate thereof) including, without limitation, the sale of sufficient Shares acquired subject to the Award to realise an amount equal to the Tax Liability. (or reasonable estimate thereof).

• 10.2 The Vesting of a Conditional Award, the exercise of an Option and the issue or transfer of Shares under the Plan will be subject to obtaining any approval or consent required by the UKLAFCA (or other relevant authority), any Dealing Restrictions, or any other applicable laws or regulations (whether in the UK or overseas).
• 10.3 The Board may make the delivery of any Shares to satisfy the Vesting of a Conditional Award or the exercise of an Option conditional on the Participant taking any action (including entering into any agreement) in relation to those Shares reasonably required by the Board in connection with any Shareholding Requirement.

11 CASH EQUIVALENT

• 11.1 Subject to rule 11.2, at any time prior to the date on which an Award has Vested or, in the case of an Option, has been exercised, the Board may determine that, in substitution for histheir right to acquire some or all of the Shares to which histheir Award relates, the Participant will instead receive a cash sum. The cash sum will be equal to the market value (as determined by the Board) of that number of the Shares which would otherwise have been issued or transferred, less, in the case of a Nominal Value Option, the aggregate exercise price payable for the Shares in respect of which the Nominal Value Option has been exercised if this has not been paid by the Participant, and for these purposes:
• 11.1.1in the case of a Conditional Award, market value will be determined on the date of Vesting;
• 11.1.2in the case of an Option, market value will be determined on the date of exercise; and
• 11.1.3the cash sum will be paid to the Participant within 30 daysas soon as practicable after the Vesting of the Conditional Award or the exercise of the Option, net of any deductions (including but not limited to any Tax Liability or similar liabilities) as may be required by law.
• 11.2 The Board may determine that this rule 11 will not apply to an Award, or any part of it.

12 CESSATION OF EMPLOYMENT

12.1 If a Participant ceases to hold office or employment with a Group Member other than as a result of histheir death or for a reason referred to in rule 12.3, subject to rules 12.6 and 12.7 histheir Award (whether or not Vested) will lapse at that time.

Death

• 12.2 If a Participant dies:
• 12.2.1unless the Board determines otherwise, an Award which has not Vested at the date of histheir death will Vest as soon as practicable thereafter in accordance with rule 12.2.2;
• 12.2.2the number of Shares in respect of which an Award Vests pursuant to rule 12.2.1 will be determined by the Board in its discretion, taking into account:
  • (a) the extent to which any Performance Condition imposed under rule 3 has been satisfied;
  • (b) whether it is appropriate to adjust (including by reducing to nil) the extent to which the Award would (but for this rule 12.2.2(b)) Vest, if it considers that rule 9.2.1 ,9.2.2 or 9.2.3 applies, taking into account such factors as the Board considers relevant; and
  • (c) if the Board so determines, the period of time that had elapsed from the Grant Date to the date of death.

To the extent that an Award does not Vest in full, the remainder will lapse immediately; and

12.2.3an Option may then be exercised, subject to rule 13, during the period of 12 months from the date of death (or such other period as the Board may determine), after which time it will lapse.

"Good Leaver" before the Assessment Date

• 12.3 If a Participant ceases to hold office or employment with a Group Member before the Assessment Date applying to an Award as a result of:
• 12.3.1ill-health, injury or disability evidenced to the satisfaction of the Board;
• 12.3.2the Participant's employing company ceasing to be a Group Member or the transfer of an undertaking or part of an undertaking (in which the Participant is employed) to a person who is not a Group Member; or
• 12.3.3any other reason at the Board's discretion, except where a Participant is summarily dismissed,

unless the Board determines that the Award will Vest in accordance with rule 12.4, the Award will continue and Vest, subject to rule 13, in accordance with rule 12.5 on the Normal Vesting Date.

• 12.4 If a Participant ceases to hold office or employment with a Group Member before the Assessment Date applying to an Award as a result of a reason referred to in rule 12.3 and the Board determines that the Award will Vest in accordance with this rule 12.4, it will Vest in accordance with rule 12.5 as soon as practicable following the date of cessation in accordance with rule 12.5., or, subject to rule 13, at such later date as the Board determines not being later than the Normal Vesting Date.
• 12.5 The number of Shares in respect of which the Award Vests pursuant to rule 12.3 or 12.4 will be determined by the Board in its discretion, taking into account:
• 12.5.1the extent to which any Performance Condition has been satisfied on the Assessment Date (if rule 12.3 applies) or at the date of cessation of office or employment or such other date as the Board determines (if rule 12.4 applies);
• 12.5.2whether it is appropriate to adjust (including by reducing to nil) the extent to which the Award would (but for this rule 12.5.2) Vest, if it considers that rule 9.2.1, 9.2.2 or 9.2.3 applies, taking into account such factors as the Board considers relevant; and
• 12.5.3unless the Board determines otherwise, the period of time that has elapsed from the Grant Date to the date of cessation of office or employment,

and to the extent that an Award does not Vest in full, the remainder will lapse immediately. An Option may be exercised for a period of six months (or such other period as the Board may determine) from the date of Vesting after which time it will lapse.

"Good Leaver" on or after the Assessment Date

12.6 If a Participant ceases to hold office or employment with a Group Member for a reason other than histheir summary dismissal on or after the Assessment Date relating to an Award, unless the Board determines the Award will Vest at the date of cessation, it will continue and Vest, subject to rule 13, on the Normal Vesting Date. In either case, the number of Shares in respect of which the Award will Vest will be the number of Shares in respect of which it may Vest by reference to: the assessment of any Performance Condition and any other relevant factors in accordance with rules 9.1 and 9.2.

12.6.1the satisfaction of any Performance Condition; and

12.6.2the Board's determination as to whether it is appropriate to adjust (including by reducing to nil) the extent to which the Award would (but for this rule 12.6.2) Vest, if it considers that rule 9.2.1, 9.2.2 or 9.2.3 applies, taking into account such factors as the Board considers relevant.

If the Award takes the form of an Option, it may be exercised, subject to rule 13, for a period of six months (or such other period as the Board may determine) from the date of Vesting after which time it will lapse.

"Good Leavers": Vested Awards

• 12.7 If a Participant ceases to hold office or employment with a Group Member as a result of a reason referred to in rules 12.2 or 12.3 an Option which has Vested prior to the date of cessation may be exercised subject to rule 13 during the period of:
• 12.7.1if the cessation is as a result of the Participant's death, 12 months from the Participant's death; and
• 12.7.2if the cessation is as a result of a reason referred to in rule 12.3, six months from the date of the Participant's cessation of office or employment
• (or such other period as the Board may determine), after which time it will lapse.

General

12.8 For the purposes of the Plan, no person will be treated as ceasing to hold office or employment with a Group Member until that person no longer holds:

12.8.1an office or employment; or

12.8.2a right to return to work

with any Group Member.

Leavers –Shareholding Requirement

12.9 The Board may determine that any Award held by a Participant after he hasthey have ceased to hold office or employment with a Group Member will lapse if the Participant fails to abide by any Shareholding Requirement.

13 CORPORATE EVENTS

• 13.1 Where any of the events described in rule 13.3 occur, then subject to rules 13.7 and 13.8, Awards which have not yet Vested will Vest in accordance with rule 13.2 at the time of such event unless they Vest earlier in accordance with rule 13.4. Vested Options will be exercisable for one month from the date of the relevant event, after which time all Options will lapse.
• 13.2 An Award will Vest pursuant to rule 13.1 to the extent determined by the Board in its discretion, taking into account:as follows.

inAwards that are subject to a Performance Condition where the event occurs before the Assessment Date

In the case of an Award in respect of which the Performance Period has not finished,subject to a Performance Condition where the event occurs before the Assessment Date, to the extent determined by the Board in its discretion taking into account:

• 13.2.1the extent to which any Performance Condition has been satisfied and, unless the Board determines otherwise, the period of time from the Grant Date to the date of the relevant event; ;
• 13.2.2whether it is appropriate to adjust (including by reducing to nil) the extent to which the Award would (but for this rule 13.2.4) Vest, if it considers that rule 9.2.1, 9.2.2 or 9.2.3 applies, taking into account such factors as the Board considers relevant; and
• 13.2.3inunless the case of an Award in respect of whichBoard determines otherwise, the Performance Period has finished,period of time from the extentGrant Date to the date of the relevant event.;

Recruitment Awards which are not subject to a Performance Condition where the event occurs before the Assessment Date

In the case of a Recruitment Award which anyis not subject to a Performance Condition has been satisfied.where the event occurs before the Assessment Date, to the extent determined by the Board in its discretion taking into account:

• 13.2.4whether it is appropriate to adjust (including by reducing to nil) the extent to which the Award would (but for this rule 13.2.4) Vest, if it considers that rule 9.2.2 or 9.2.3 applies, taking into account such factors as the Board considers relevant; and
• 13.2.5unless the Board determines otherwise, the period of time from the Grant Date to the date of the relevant event.

Awards whether or not subject to a Performance Condition where the event occurs on or after the Assessment Date

In the case of an Award whether or not subject to a Performance Condition where the event occurs on or after the Assessment Date, to the extent already determined in accordance with rule 9.

13.3 The events referred to in rule 13.1 are:

13.3.1General offer

If any person (either alone or together with any person acting in concert with himthem):

• 13.3.1.1 obtains Control of the Company as a result of making a general offer to acquire Shares; or
• 13.3.1.2 already having Control of the Company, makes an offer to acquire all of the Shares other than those which are already owned by himthem and such offer becomes wholly unconditional.

13.3.2Scheme of arrangement

A compromise or arrangement in accordance with section 899 of the Companies Act 2006 for the purposes of a change of Control of the Company being sanctioned by the Court.

13.4 Loss of corporation tax deduction

If the Board determines that there would be a loss of corporation tax deduction under Part 12 of the Corporation Tax Act 2009 (or any similar legislation or rules in a jurisdiction outside the United Kingdom) if Awards were to Vest on or after an event described in rule 13.3, then the Board may resolve that Awards will Vest on an earlier date.

13.5 Winding-up

On the passing of a resolution for the voluntary winding-up or the making of an order for the compulsory winding up of the Company, the Board will determine:

• 13.5.1whether and to what extent Awards which have not yet Vested will Vest, taking into account: the relevant factors referred to in rule 13.2.
• (a) in the case of an Award in respect of which the Performance Period has not finished, the extent to which any Performance Condition has been satisfied and, unless the Board determines otherwise, the period of time from the Grant Date to the date of the relevant event; and
• (b) in the case of an Award in respect of which the Performance Period has finished, the extent to which any Performance Condition has been satisfied; and

13.5.2the period of time during which any Vested Option may be exercised, after which time it will lapse.

To the extent that an Award does not Vest it will lapse immediately.

13.6 Other events

If the Company is or may be affected by a demerger, delisting or other event which in the opinion of the Board, may affect the current or future value of Shares, the Board may determine that the following provisions will apply:

• 13.6.1an Award will Vest on such terms as the Board may determine;
• 13.6.2if an Award Vests under this rule 13.6, it will Vest taking into account: the relevant factors referred to in rule 13.2.
• (a) in the case of an Award in respect of which the Performance Period has not finished, the extent to which any Performance Condition has been satisfied and, unless the Board determines otherwise, the period of time from the Grant Date to the date of the relevant event; and
• (b) in the case of an Award in respect of which the Performance Period has finished, the extent to which any Performance Condition has been satisfied; and
• 13.6.3to the extent that the Award does not Vest, it will lapse immediately, unless the Board determines otherwise.

The Board will then also determine the period during which any Vested Option may be exercised, after which time it will lapse.

13.7 Exchange

An Award will not Vest under rule 13.1 but will be exchanged on the terms set out in rule 13.8 to the extent that:

13.7.1an offer to exchange the Award (the "Existing Award") is made and accepted by a Participant;

13.7.2there is an Internal Reorganisation; or

• 13.7.3the Board decides (before the relevant event) that an Existing Award will be exchanged automatically.
• 13.8 Exchange terms

If this rule 13.8 applies, the Existing Award will not Vest but will be exchanged in consideration of the grant of a new award which, in the opinion of the Board, is equivalent to the Existing Award, but relates to shares in a different company (whether the acquiring company or a different company).

13.9 Meaning of Board

Any reference to the Board in this rule 13 means the members of the Board immediately prior to the relevant event.

14 ADJUSTMENTS

• 14.1 The number of Shares subject to an Award and, in the case of a Nominal Value Option, the exercise price, may be adjusted in such manner as the Board determines, in the event of:
• 14.1.1any variation of the share capital of the Company; or
• 14.1.2a demerger, delisting, special dividend, rights issue or other event which may, in the opinion of the Board, affect the current or future value of Shares.
• 14.2 The Board may also adjust any Performance Condition in the circumstances referred to in rule 14.1.

15 AMENDMENTS

• 15.1 Except as described in this rule 15, the Board may at any time amend the rules of the Plan or the terms of any Award.
• 15.2 Subject to rule 15.3, no amendment to the advantage of Eligible Employees and/or Participants will be made under this rule 15 to the provisions relating to:
• 15.2.1the persons to whom, or for whom, Shares or cash are provided under the Plan;
• 15.2.2limitations on the number or amount of Shares or cash subject to the Plan;
• 15.2.3the maximum entitlement for any one Participant;
• 15.2.4the basis for determining a Participant's entitlement to, and the terms of, Shares or cash to be provided under the Plan;
• 15.2.5the adjustments that may be made in the event of a variation of capital; and

15.2.6the terms of this rule 15.2

without prior approval of the members of the Company in general meeting.

• 15.3 Rule 15.2 will not apply to any minor amendment which is to benefit the administration of the Plan or is necessary or desirable to take account of any change in legislation or to obtain or maintain favourable taxation, exchange control or regulatory treatment for any Group Member or Participant.

• 15.4 No amendment to the material disadvantage of existing rights of Participants (except in respect of the Performance Condition) will be made under rule 15.1 unless:

• 15.4.1every Participant who may be affected by such amendment has been invited to indicate whether or not he approvesthey approve the amendment; and

• 15.4.2the amendment is approved by a majority of those Participants who have so indicated.
• 15.5 No amendment will be made under this rule 15 if it would prevent the Plan from being an employees' share scheme in accordance with section 1166 of the Companies Act 2006.

16 LEGAL ENTITLEMENT

• 16.1 This rule 16 applies during a Participant's employment with any Group Member and after the termination of such employment, whether or not the termination is lawful.
• 16.2 Nothing in the Plan or its operation forms part of the terms of employment of a Participant and the rights and obligations arising from a Participant's employment with any Group Member are separate from, and are not affected by, histheir participation in the Plan. Participation in the Plan does not create any right to continued employment for any Participant.
• 16.3 The grant of any Award to a Participant does not create any right for that Participant to be granted any further Awards or to be granted Awards on any particular terms, including the number of Shares to which Awards relate.
• 16.4 By participating in the Plan, a Participant waives all rights to compensation for any loss in relation to the Plan, including:
• 16.4.1any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of the Participant's employment);
• 16.4.2any exercise of a discretion or a decision taken in relation to an Award or to the Plan, or any failure to exercise a discretion or take a decision; or
• 16.4.3the operation, suspension, termination or amendment of the Plan.

17 GENERAL

• 17.1 The Plan will terminate upon the date stated in rule 2.42.5, or at any earlier time by the passing of a resolution by the Board or an ordinary resolution of the Company in general meeting. Termination of the Plan will be without prejudice to the existing rights of Participants.
• 17.2 Shares issued or transferred from treasury under the Plan will rank equally in all respects with the Shares then in issue, except that they will not rank for any voting, dividend or other rights attaching to Shares by reference to a record date preceding the date of issue or transfer from treasury.

• 17.3 By participating in the Plan, a Participant consents to the collection, holding, processing and transfer of hisThe personal data byof any Group Member Eligible Employee, Participant or any third party for all purposes relating to the operation of the Plan, including but not limited to, the administration and maintenance of former Participant records, providing information to future purchasers of the Companymay be processed in connection with the operation of the Plan in accordance with the Group's prevailing data protection policy and as notified to Eligible Employees pursuant to a privacy notice or any business in which theotherwise. If an Eligible Employee, Participant works and to the transfer of information about theor former Participant to a country or territoryis employed outside the European Economic Area or elsewhereand outside the United Kingdom and consent is needed for processing of their personal data in connection with the operation of the Plan, by participating in the Plan, they consent to such processing of their personal data.

• 17.4 The Plan will be administered by the Board. The Board will have full authority, consistent with the Plan, to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt regulations for administering the Plan. Decisions of the Board will be final and binding on all parties.

• 17.5 Any notice or other communication in connection with the Plan may be delivered personally or sent by electronic means or post, in the case of a company to its registered office (for the attention of the company secretary), and in the case of an individual to histheir last known address, or, where he isthey are a director or employee of a Group Member, either to histheir last known address or to the address of the place of business at which he performsthey perform the whole or substantially the whole of the duties of histheir office or employment. Where a notice or other communication is given by post, it will be deemed to have been received 72 hours after it was put into the post properly addressed and stamped, and if by electronic means, when the sender receives electronic confirmation of delivery or if not available, 24 hours after sending the notice.
• 17.6 No third party will have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan (without prejudice to any right of a third party which exists other than under that Act).
• 17.7 Benefits under the Plan will not be pensionable.
• 17.8 The rules of the Plan will be governed by and construed in accordance with the laws of England and Wales. Any person referred to in the Plan submits to the exclusive jurisdiction of the Courts of England and Wales.

SCHEDULE

1 CASH AWARDS

The rules of the Dunelm Group 2014 Long Term Incentive Plan will apply to a right to receive a cash sum granted under this Schedule as if it was either a Conditional Award (a "Cash Conditional Award") or a Nil-Cost Option (a "Cash Option"), except as set out in this Schedule. Where there is any conflict between the rules of the Plan and this Schedule, the terms of this Schedule will prevail.

• 1.1 Each Cash Conditional Award or Cash Option will relate to a certain number of notional Shares.
• 1.2 On the Vesting of a Cash Conditional Award or the exercise of a Cash Option the Participant will be entitled to receive a cash sum, calculated by reference to the value of the number of notional Shares to which the Cash Conditional Award or the Cash Option relates, on the following basis:
• 1.2.1 in the case of a Cash Conditional Award the cash sum will be equal to the market value (as determined by the Board) of the notional Shares to which the Cash Conditional Award relates on the date of Vesting; and
• 1.2.2 in the case of a Cash Option the cash sum will be equal to the market value (as determined by the Board) of the notional Shares to which the Cash Option relates on the date of exercise.
• 1.3 The cash sum payable under paragraph 1.2 above will be paid to the Participant as soon as practicable after the Vesting of the Cash Conditional Award or the exercise of the Cash Option, net of any deductions (including, but not limited to, any Tax Liability or similar liabilities) as may be required by law.
• 1.4 A Cash Conditional Award or Cash Option will not confer any right on the holder to receive Shares or any interest in Shares.