Chesnara : Proposed 2023 Long-Term Incentive Plan Rules

DRAFT 2: 11 April 2023

Rules of the Chesnara 2023 Long-Term Incentive Plan for approval at the Annual General Meeting of Chesnara plc to be held on 16 May 2023.

Chesnara plc

The Chesnara 2023

Long-Term Incentive

Plan

Approved by shareholders: [●] 2023

Adopted by the Remuneration Committee: [●] 2023

Rules of the Chesnara 2023 Long-Term Incentive Plan for approval at the Annual General Meeting of Chesnara plc to be held on 16 May 2023.

THE CHESNARA 2023 LONG-TERM INCENTIVE PLAN

Table of Contents

1	Interpretation	1
2	Making of Awards	5
3	Scheme Limits	7
4	Individual Limits	8
5	Award Price	9
6	Performance Target	9
7	Malus and Clawback	9
8	Vesting of Awards (and Exercise of Options)	12
9	Holding Period	14
10	Retention of Awards on cessation of Relevant Employment	15
11	Takeover, Reconstruction, Amalgamation or Winding-up of Company	16
12	Exchange of Awards	18
13	Lapse of Awards	19
14	Adjustment of Awards on Reorganisation	19
15	Accounting for Award Tax Liability	20
16	Issue and Listing of Scheme Shares	20
17	Relationship of Scheme to Contract of Employment	21
18	Administration of Scheme	21
19	Amendment of Scheme	22
20	Notices	23
21	Governing Law and Jurisdiction	24

DRAFT 2: 11 April 2023

Rules of the Chesnara 2023 Long-Term Incentive

Plan for approval at the Annual General Meeting of Chesnara plc to be held on 16 May 2023.

THE CHESNARA 2023 LONG-TERM INCENTIVE PLAN

1Interpretation

1.1 Definitions

In this Plan, unless the context otherwise requires, the following words and expressions have the following meanings:

Acting In Concert has the meaning given to that expression in The City Code on Takeovers and Mergers as amended from time to time;

Assessment Error means the discovery of an error in the assessment of the extent to which a Performance Target applicable to an Award has been satisfied;

Award means an Option or a Conditional Share Award made under the Plan;

Award Certificate means a statement in a form determined by the Company setting out details of an Award as set out in Rule 2.4;

Award Date means the date on which an Award is made in accordance with Rule 2.3;

Award Dividend Period means:

1. in relation to an Option, the period from the Award Date until the date on which the Option is exercised by the Award Holder; and
2. in relation to a Conditional Share Award, the Vesting Period;

Award Dividends means, in respect of an Award:

1. the dividends (not including any associated tax credit) that would have been paid during the Award Dividend Period on the number of Plan Shares in respect of which the Award Vests which shall, if the Grantor so determines, exclude the value of all or any part of any special dividend or dividend in specie; and
2. if the Grantor so determines and is set out in the Award Certificate, a cash sum equal to an amount of interest, calculated at such rate and on such basis as determined by the Grantor, on the amount of any such dividend from the relevant dividend payment date until the end of the Award Dividend Period;

Award Holder means an individual to whom an Award has been made or, if that person has died and where the context requires, their legal personal representatives;

Award Holder's Employer means such Group Member as is an Award Holder's employer or, if they have ceased to be employed within the Group, was their employer or such other Group Member, or such other person as, under the PAYE Regulations or, as the case may be, the NI Regulations, or any other statutory or regulatory enactment (whether in the United Kingdom or otherwise) is obliged to account for any Award Tax Liability;

Award Price means the amount (if any) per Plan Share payable in pounds sterling on the exercise of an Option or the Vesting of a Conditional Share Award, determined in accordance with Rule 5;

1

DRAFT 2: 11 April 2023

Rules of the Chesnara 2023 Long-Term Incentive

Plan for approval at the Annual General Meeting of Chesnara plc to be held on 16 May 2023.

THE CHESNARA 2023 LONG-TERM INCENTIVE PLAN

Award Tax Liability means, in relation to an Award Holder, any liability of the Award Holder's Employer or of any other person (apart from the Award Holder) to account to HMRC or other tax authority for any amount of, or representing, income tax or employee NICs or any equivalent charge in the nature of tax or social security contributions (whether under the laws of the United Kingdom or otherwise) which may arise on or in connection with the making, vesting, exercise or release of, or the acquisition of Plan Shares or of any interest in Plan Shares pursuant to, an Award or any cash payment made under this Plan or otherwise in relation to an Award including any liability arising under Part 7A ITEPA 2003;

Committee means the remuneration committee of the board of directors of the Company or such other committee, comprising a majority of non-executive directors of the Company, to which the board of directors delegates responsibility for overseeing the operation of this Plan or, following a change of Control of the Company, those persons who comprised the remuneration committee or such other committee of the board of directors immediately before such change of Control;

Company means Chesnara plc incorporated in England and Wales under company number 04947166;

Conditional Share Award means a conditional right under the Plan to acquire Plan Shares;

Control has the meaning given to it by section 995 of ITA 2007;

Dealing Day means any day on which the London Stock Exchange is open for business;

Dealing Restrictions means restrictions on dealings imposed by statute, order or regulation or Government directive, or any other code or guidance on share dealing adopted by the Company with which the Company seeks to comply;

Directors' Remuneration Policy has the meaning given to it by section 422A(6) of the Companies Act 2006;

Eligible Employee means an individual who at the Award Date is a director or employee of a Group Member;

Employees' Share Scheme has the meaning set out in section 1166 of the Companies Act 2006;

Employer's NIC means employer's secondary class 1 National Insurance contributions liability or any local equivalent;

Exercise Period means, in respect of an Option, the period set by the Committee on the Award Date during which an Option may be exercised, which may not extend past the tenth anniversary of the Award Date;

Failure of Risk Management means any material failure of risk management of the Company, a Group Member or a business unit of the Group;

Financial Conduct Authority means the "competent authority" as that expression is defined in Part VI of the Financial Services and Markets Act 2000;

Gain means the difference between (i) the Market Value of a Plan Share on the date of exercise of an Option and (ii) the Award Price, multiplied by the number of Plan Shares in respect of which the Option is being exercised;

2

DRAFT 2: 11 April 2023

Rules of the Chesnara 2023 Long-Term Incentive

Plan for approval at the Annual General Meeting of Chesnara plc to be held on 16 May 2023.

THE CHESNARA 2023 LONG-TERM INCENTIVE PLAN

Grantor means:

1. in relation to an Award made by the Company, the Committee; and
2. in relation to an Award made by the Trustees, the Trustees;

Group means the Company and its Subsidiaries from time to time and Group Member shall be interpreted accordingly;

HMRC means HM Revenue and Customs;

Holding Period means the period (if any) specified under paragraph 9 of Rule 2.4 (commencing from the date of Vesting of the relevant Award) during which the restrictions contained in Rule 9 apply;

Insolvency or Corporate Failure means the Company, or any Group Member or business of the Group becomes insolvent or otherwise suffers a corporate failure so that the value of Plan Shares is materially reduced provided that the Committee determines following an appropriate review of accountability that the Award Holder should be held responsible (in whole or part) for that insolvency or corporate failure.

ITA 2007 means the Income Tax Act 2007;

ITEPA 2003 means the Income Tax (Earnings and Pensions) Act 2003;

London Stock Exchange means the London Stock Exchange plc or any successor body;

Market Value on any day means:

1. if at the relevant time Plan Shares are listed on the Official List (or any other recognised stock exchange within the meaning of section 1005 of ITA 2007 or the Alternative Investment Market of the London Stock Exchange), the middle market quotation (as derived from the Daily Official List of the London Stock Exchange or the equivalent list or record for the recognised stock exchange on which the Plan Shares are listed) on the preceding Dealing Day; or
2. where Plan Shares are not so listed, the market value of a Plan Share calculated as described in the Taxation of Chargeable Gains Act 1992;

Material Misstatement means the discovery of a material misstatement in the audited consolidated accounts of the Company or the audited accounts of any Group Member;

Misconduct means action or conduct of the Award Holder which, in the reasonable opinion of the Committee, amounts to fraud or gross misconduct;

NI Regulations means the laws, regulations and practices currently in force relating to liability for, and the collection of, NICs;

NICs means National Insurance contributions;

Official List means the Financial Conduct Authority's list of securities that have been admitted to listing and which is maintained by the Financial Conduct Authority;

Option means a right to acquire Plan Shares granted under the Plan;

3