Hill & Smith : 2023 Notice of Annual General Meeting - Appendix (ESPP Rules)

RULES

OF THE

HILL & SMITH 2023 US EMPLOYEE STOCK PURCHASE

PLAN

Board adoption (subject

[date]

to shareholder approval):

Shareholders' approval:

Expiry date:

[date]

Amended by the Board on:

Table of Contents
1.	Purpose	2
2.	Meaning of words used	2
3.	Eligibility	4
4.	Invitations	5
5.	Applying to join the Plan	7
6.	Scaling down	8
7.	Option grant	8
8.	Share limits	9
9.	Payroll deductions	9
10.	Option exercise	11
11.	Satisfaction of Options	12
12.	Holding Period	13
13.	Taxation	14
14.	Notification on disposal of Shares	14
15.	Leavers	14
16.	Takeovers and restructurings	15
17.	Exchange of Options	16
18.	Variations in share capital	17
19.	General	17
20.	Administration	19
21.	Changing the Plan and termination	20
22.	Governing law	21

Hill & Smith 2023 US Employee Stock Purchase Plan Rules

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Hill & Smith 2023 US Employee Stock Purchase Plan Rules

1. Purpose
   The purpose of the Plan is to provide Eligible Employees of Participating Companies with the opportunity to purchase Shares through payroll deductions. The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Code and, where relevant, will be interpreted accordingly.
2. Meaning of words used

2.1 In these rules:

"Acquiring Company" means a company which is expected to obtain Control of the Company as a result of an offer referred to in rule 16.1 (General offers) or a compromise or arrangement referred to in rule 16.2 (Schemes of arrangement);

"Award Date" means a date selected by the Board for an Offering to commence;

"Board" means the board of directors of the Company or, as relevant, a committee of it, in either case subject to rule 16.8 (Board);

"Business Day" means a day on which the London Stock Exchange (or, if relevant and if the Board determines, any other stock exchange on which the Shares are traded) is open for the transaction of business;

"Code" means the US Internal Revenue Code of 1986, as amended, and references to any section of the Code shall include any US treasury regulations (including proposed regulations) issued under such section;

"Company" means Hill & Smith PLC;

"Contribution" means the amount or percentage (as determined by the Board) of after-tax payroll deduction from an Eligible Employee's Eligible Compensation;

"Control" means the power of a person to secure by means of the holding of shares or the possession of voting power in, or by virtue of any powers conferred by any articles of association (or other document), that the affairs of a body corporate are conducted in accordance with the wishes of that person;

"Dealing Restrictions" means any applicable restriction or restrictions on dealings or transactions in securities imposed by:

1. any rules, statutory requirements, orders, legal or regulatory code, provision or rule or other requirement or guidance; and/or
2. any code adopted or established by the Company in addition to or replacement of (i) above;

"Eligible Compensation" means base salary and wages, but excluding overtime and shift premium;

"Eligible Employee" means an employee who is eligible to participate in an Offering under rule 3 (Eligibility);

"Exercise Date" means the end of the Offering Period, determined under the rules of the Plan, at which time the Option granted under the Plan may normally be exercised and Shares purchased on behalf of the Participant;

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"Exchange Rate" means the exchange rate designated by the Board from time to time for the purpose of converting US dollars into British pounds or British pounds into US dollars, as appropriate;

"Fair Market Value" on any date means an amount equal to the mid-market closing price of a Share on the London Stock Exchange (or, if the Board determines, any other stock exchange on which the Shares are traded) on the latest previous day on which the exchange was open, as long as the amount is not less than the fair market value of a Share for the purposes of Section 423 of the Code;

"Group" means the Company and any Subsidiary, and "Member of the Group" will be construed accordingly;

"Holding Period" will be construed in accordance with rule 12 (Holding Period);

"Internal Reorganisation" means where:

1. a change of Control of the Company is expected to occur as a result of an offer referred to in rule 16.1 (General offers) or a compromise or arrangement referred to in rule 16.2 (Schemes of arrangement); and

1. at least 75 per cent of the shares in the Acquiring Company are expected to be held by the same persons who immediately before such change of Control of the Company were shareholders in the Company;

"London Stock Exchange" means London Stock Exchange plc;

"Nominee" means any registered holder of the Shares appointed by the Company for the purpose of the Plan;

"Offering" means the grant of Options to acquire Shares under the Plan to Eligible Employees for an Offering Period;

"Offering Period" means a period of time over which Eligible Employees agree to payroll deductions in connection with the Plan, beginning on the Award Date, and ending on the Exercise Date or such earlier date as may be determined under the rules of the Plan;

"Option" means a right to acquire Shares in an Offering granted under the Plan;

"Parent" means a corporation which is a "parent corporation" of the Company within the meaning of Section 424(e) of the Code;

"Participant" means a person holding or who has held an Option;

"Participating Company" means any Subsidiary designated by the Board to participate in the Plan for a given Offering;

"Plan" means the plan constituted by these rules including any schedules and known as the "Hill & Smith 2023 US Employee Stock Purchase Plan";

"Purchase Price" means the amount payable per Share on the exercise of an Option, as determined under rule 4.5 (Purchase Price);

"Securities Act" means the US Securities Act of 1933, as amended;

"Share" means a fully paid ordinary share in the capital of the Company;

"Subsidiary" means a "subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code, and will include any wholly owned entity of such subsidiary corporation which is treated as an entity disregarded as separate from its owner for US federal income tax purposes;

Hill & Smith 2023 US Employee Stock Purchase Plan Rules

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"Taxation" means any tax (including, but not limited to, any federal, state, local or foreign income or employment taxes) and/or social security charges (and/or any similar charges), wherever arising, in respect of a Participant's Option or otherwise arising in connection with that Participant's participation in the Plan;

"UK" means the United Kingdom; and

"US" means the United States of America.

2.2 Interpretation

In this Plan, the singular includes the plural, references to any enactment or statutory requirement will be construed as references to that enactment or requirement as amended, modified or re-enacted, and includes any subordinate legislation made under it.

3. Eligibility

1. Eligible Employees
   A person will be eligible to participate if that person is employed (including employed as an executive director), for the purposes of Section 423(b)(4) of the Code, by a Participating Company on the Award Date, unless rule 3.2 (Exclusions from eligibility) or rule 3.3 (Restrictions on eligibility) apply.
2. Exclusions from eligibility
   The Board may determine prior to an Offering that an employee who would otherwise be eligible under rule 3.1 (Eligible Employees) will only be eligible to participate in the Offering if:
3. 1. that employee has been employed by a Participating Company for a specified minimum period prior to the Award Date as determined by the Board (with such minimum period of employment being set as a period which does not exceed 2 years' duration); and/or
   2. that employee is customarily employed by a Participating Company for a specified minimum number of hours per week as determined by the Board (with such minimum number of hours being set at a number which does not exceed 20); and/or
   3. that employee is customarily employed by a Participating Company for a specified minimum number of calendar months per year as determined by the Board (with such minimum number of calendar months being set at a number which does not exceed 5); and/or
   4. that employee is not a "highly compensated employee" within the meaning of Section 414(q) of the Code; and/or
   5. where that employee is a citizen or resident of a non-US jurisdiction:
   6. 1. granting such person an Option would not violate the laws of such jurisdiction; and/or
      2. compliance with the laws of such jurisdiction would not cause the Plan to violate Section 423 of the Code.

Any exclusions from eligibility set by the Board under this rule 3.2 (Exclusions from eligibility) must be applied equally and on the same terms to all persons who would otherwise be eligible under rule 3.1 (Eligible Employees).

Hill & Smith 2023 US Employee Stock Purchase Plan Rules

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