Melrose Industries : Performance Share Plan

Display copy for AGM

MELROSE INDUSTRIES PLC

MELROSE INDUSTRIES PLC

PERFORMANCE SHARE PLAN

Approved by the shareholders of the Company on [

] 2024

	CONTENTS
Rule	Page
1.	DEFINITIONS AND INTERPRETATION	1
2.	ELIGIBILITY	4
3.	GRANT OF AWARDS	5
4.	NON-TRANSFERABILITY	7
5.	PLAN LIMITS	7
6.	INDIVIDUAL LIMIT	9
7.	VESTING OF AWARDS	10
8.	CONSEQUENCES OF VESTING	12
9.	EXERCISE OF OPTIONS	13
10.	HOLDING PERIOD	14
11.	CASH ALTERNATIVE	16
12.	LAPSE OF AWARDS	17
13.	LEAVERS	17
14.	TAKEOVERS AND OTHER CORPORATE EVENTS	19
15.	ADJUSTMENT OF AWARDS	21
16.	MALUS AND CLAWBACK	22
17.	ALTERATIONS	24
18.	MISCELLANEOUS	26
SCHEDULE 1: CASH CONDITIONAL AWARDS	29

1. DEFINITIONS AND INTERPRETATION

1.1 In the Plan, unless the context otherwise requires:

"Applicable Laws" means the Listing Rules, the City Code on Takeovers and Mergers, UK MAR or any other relevant UK or overseas regulation or enactment;

"Award" means an Option or a Conditional Award;

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

"Buy-outAward" means an Award granted to an individual who becomes employed by a Participating Company which is made to compensate them for any incentive awards granted to them which lapse or are forfeited as a consequence of ceasing employment or relinquishing any office with a company by which they were previously employed or with which they previously held an office;

"Cessation" means a Participant ceasing to be an employee of a Group Company, except where they:

1. remain an employee of any other Group Company; or
2. retain a statutory right to return to work following such cessation; or
3. remain a contractor or consultant to any Group Company following such cessation (if the Committee determines that this provision shall apply),

and the reason for any such cessation shall be determined by reference to Rule 13 regardless of whether such cessation was lawful or unlawful;

"Committee" means the remuneration committee of the Board or, on and after the occurrence of an event described in Rule 14, the remuneration committee of the Board as constituted immediately before that event;

"Company" means Melrose Industries PLC (registered in England and Wales with registered number 09800044);

"Conditional Award" means a conditional right to acquire Shares granted under the Plan which is designated as a conditional award by the Committee under Rule 3.2(b);

"Control" means control within the meaning of section 995 of the Income Tax Act 2007;

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

"Directors' Remuneration Policy" means the prevailing directors' remuneration policy approved by the Company's shareholders;

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"Dividend Equivalent" means a benefit calculated by reference to dividends paid on Shares as described in Rule 3.5;

"Early Vesting Date" means, subject to Rule 7.5, either:

1. when Cessation occurs and it is determined that an Early Vesting Date shall apply, pursuant to Rule 13.1, the date of that Cessation or, if later, the date of the early evaluation of any Performance Condition by reason of that Cessation;
2. the date of the relevant event in Rule 14.1 or Rule 14.2 or the date of Vesting referred to in Rule 14.3;

"Executive Director" means an executive director of the Company;

"Exercise Period" means the period commencing on the date on which an Option Vests and ending on the date determined under Rule 3.2(e) during which it may normally be exercised, subject to earlier lapse under the Plan;

"FCA" means the United Kingdom Financial Conduct Authority, or any successor body;

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

1. 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;
2. a body corporate which is a subsidiary undertaking (within the meaning of section 1162 of the Companies Act 2006) of a body corporate within paragraph (a) above and has been designated by the Board for this purpose; and
3. any other body corporate in relation to which a body corporate within paragraph (a) or
   (b) above is able (whether directly or indirectly) to exercise 20% or more of its equity voting rights and has been designated by the Board for this purpose;

and "Group" will be construed accordingly;

"Holding Period" means the period during which a Participant may be required not to sell, transfer, assign or dispose of their Net Vested Shares in accordance with Rule 10 (Holding Period);

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

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

"Listing Rules" means the Listing Rules published by the FCA;

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

"Malus and Clawback" means the provisions set out in Rule 16 under which an Award may lapse or an individual may be required to repay an amount after it has Vested or been exercised;

"Net Vested Shares" means the Vested Shares acquired or received by a Participant on Vesting of a Conditional Award or on exercise of an Option, less: (a) a number of Shares with an aggregate market value on the date of Vesting (in the case of a Conditional Award) or exercise (in the case of an Option) equal to the Participant's Tax Liability arising on that event; or (b) any number of Vested Shares that are sold to satisfy that Tax Liability;

"Normal Vesting Date" means the date on which an Award (or part of an Award) would ordinarily Vest, being the date determined by the Committee under Rule 3.2(g) or, if later, the date on which the Committee determines the extent that any applicable Performance Condition is satisfied;

"Official List" means the list maintained by the FCA in accordance with section 74(1) of the Financial Services and Markets Act 2000 for the purposes of Part VI of that Act;

"Option" means a conditional right to acquire Shares which is designated as an option by the Committee under Rule 3.2(c);

"Option Price" means any amount per Share determined under Rule 3.2(d) as payable on the exercise of an Option, provided that the Committee may reduce or waive this Option Price on or prior to the exercise of the Option;

"Participant" means an individual who holds an Award, including their personal representatives (or, for the purposes of Rule 10, an individual who held an Award to which that Rule applies) and ex-Participant shall be construed accordingly;

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

"Performance Share Award" means an Award, the principal purpose of which is to provide an incentive for improved performance following its Grant Date and which is subject to one or more Performance Conditions;

"Performance Condition" means a condition related to performance which is specified by the Committee under Rule 3.2(f);

"Plan" means the Melrose Performance Share Plan, as amended from time to time;

"Plan Limits" the limits on the number of unissued Shares and, subject to Rule 5.5, treasury Shares, that may be "allocated" in respect of the Plan in accordance with Rule 5;

"Restricted Share Award" means an Award, the principal purpose of which is to recruit or retain the services of an individual;

"Rule" means a rule of the Plan;

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"Shareholding Requirement" means any requirement, guideline or policy determined by the Committee from time to time pursuant to which an individual must hold Shares either during their employment with a Group Member or following their ceasing to hold employment with a Group Member;

"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);

"Tax Liability" means any amount of tax, social security contributions levy, charge or other payroll deductions for which a Participant would or may be liable (or which may be recovered from the Participant) in relation to an Award and for which any Group Company or former Group Company would or may be obliged to account to any relevant authority (or would or may suffer a disadvantage if it were not to do so) or, where appropriate, the Company's best estimate of any such amount;

"UK MAR" means the retained EU law version of the Market Abuse Regulation 596/2014 which applies in the UK from 1 January 2023, and any related UK subsidiary regulations;

"Vest" means:

1. in relation to an Option, it becoming exercisable; and
2. in relation to a Conditional Award, a Participant becoming entitled to have Shares transferred to them,

in accordance with the Rules and Vesting, Vested and Unvested shall be construed accordingly; and

"Vested Shares" means Shares in respect of which an Award has Vested.

1. Any reference in the Plan to any enactment includes a reference to it as from time to time modified, extended or re-enacted.
2. Where the context admits, a reference to the singular includes the plural and vice versa.
3. Expressions in italics, headings and footnotes are for guidance only and do not form part of the Plan.
4. The terms specified to apply to any Award granted to an Executive Director shall comply with the Directors' Remuneration Policy (which shall prevail in the event of any conflict with these rules).

2. ELIGIBILITY

2.1 An individual is eligible to be granted an Award only if they are an employee of a Participating Company.

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3. GRANT OF AWARDS

3.1 Terms of grant

Subject to Rule 3.7, Rule 3.8, Rule 5 and Rule 6, the Committee may resolve to grant an Award on:

1. the terms set out in the Plan (including any country-specific terms set out in appendices to the Rules); and
2. any additional terms and conditions (including, but not limited to, one or more Performance Conditions) that the Committee determines,

to any individual who is eligible to be granted an Award under Rule 2.

3.2 Committee determinations The Committee shall determine:

1. the number of Shares over which the Award is granted;
2. whether the Award shall be a Performance Award, a Restricted Share Award or a Buy- out Award;
3. whether the Award shall be an Option or a Conditional Award provided that, if no determination is made, it shall be an Option;
4. if an Award is an Option, any Option Price provided that, if no determination is made, it shall have a nil Option Price;
5. if an Award is an Option, the last date of the Exercise Period, provided that, if no such determination is made, it shall be the day immediately preceding the 10th anniversary of the Grant Date;
6. any Performance Conditions (whether required by the Plan or otherwise) and any additional terms and conditions applicable to the Award;
7. for the purpose of determining the Normal Vesting Date applicable to any Award, either a single date applicable to all the Shares subject to the Award or more than one date, each applicable to a stated number of the Shares subject to the Award, provided:
8. 1. that if no determination is made, the date shall be the third anniversary of the Grant Date; and

1. in the case of an Award (other than a Buy-out Award) granted to an Executive Director, the date shall be not earlier than the third anniversary of the Grant Date; and

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1. whether the relevant Award shall be entitled to a Dividend Equivalent pursuant to Rule 3.5 (provided that, if no determination is made, the relevant Award shall be entitled to a Dividend Equivalent);
2. whether the Award will be subject to a Holding Period (where Rule 10 does not require a Holding Period to apply) and when any such Holding Period will normally end pursuant to Rule 10.4(a) (provided that, if no determination is made, it shall end on the second anniversary of the date on which the Award Vests).

Each of the determinations noted in paragraphs (a) to (i) in this Rule 3.2 shall be made by the Committee on or before the Award's Grant Date, save that the Committee may in exceptional circumstances determine that a Performance Condition shall apply to an Award (whether or not any other Performance Conditions apply) but that its terms will be finalised within six months after the Grant Date and that, until such terms are finalised, it shall not Vest in any circumstances (notwithstanding any other provision of the Plan).

1. Method of grant
   An Award shall be granted by deed executed by the Company, or in such other manner as the Committee determines.
2. Acceptance of Awards
   Unless the Committee determines otherwise, an Award shall be granted subject to a condition that, unless its terms are accepted within a period specified by the Committee,
3. 1. the Award may not Vest; and
   2. the Board may determine that the Award will lapse.
4. Treatment of dividends
   The Committee may decide on or before the grant of an Award or at any time before it Vests that a Participant shall be entitled to receive a benefit determined by reference to the value of the dividends that would have been paid on the Vested Shares (assuming dividend reinvestment) in respect of record dates occurring during the period commencing on the Grant Date and ending on the date of Vesting (or in the case of an Option where a Holding Period applies, the last day of the Holding Period or, if earlier, the date of exercise of the Option).
   The Committee may also decide whether such Dividend Equivalent shall be provided in the form of cash and/or Shares. Any Dividend Equivalent shall be provided in accordance with Rule 8.3.
5. Method of satisfying Awards
   Unless specified to the contrary by the Committee on the Grant Date, and subject to Rule 5.7 and Rule 11, an Award may be satisfied by one or more of:
6. 1. issuing new Shares;

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1. transferring treasury Shares; and
2. transferring Shares (other than treasury Shares).

The Committee may decide, after an Award has been granted, to change how it is intended that it may be satisfied, having regard to the provisions of Rule 5.

3.7 Timing of grant

Subject to Rule 3.8, an Award (other than a Buy-out Award) may only be granted:

1. within the 6 weeks commencing on the date on which the Plan was approved by the Company's shareholders);
2. within the 6 weeks commencing on the Dealing Day after the date on which the Company announces its results for any period;
3. within the 6 weeks commencing on the date on which the individual to whom the Award is to be granted first becomes eligible to be granted an Award;
4. at any other time when the Committee considers that circumstances are sufficiently exceptional to justify its grant; or
5. if an Award may not be granted within any of the periods in Rules 3.7(a), 3.7(b) or 3.7(c) due to a restriction under any Applicable Laws or the Company's share dealing code, within the period of 6 weeks beginning with the Dealing Day after such restriction lifts

but an Award may not be granted after [ ] 2034 (that is, the expiry of the 10-year period beginning with the date on which the Plan was approved by shareholders).

3.8 Approvals and consents

The grant of any Award shall be subject to obtaining any approval or consent required under any Applicable Laws and any share dealing code of the Company.

1. NON-TRANSFERABILITY
   An Award shall not be transferred, assigned, charged, pledged, sold, or otherwise disposed of or encumbered (except on their death to their personal representatives) and shall lapse immediately on any attempt to do so.
2. PLAN LIMITS

5.1 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 5.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other executive share plan (i.e. only discretionary share plans and not including all-employee plans) adopted by the

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Company to exceed such number as represents 5 per cent. of the ordinary share capital of the Company in issue at that time.

1. 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 5.3) in the period of 10 calendar years ending with that calendar year under the Plan and under any other employee share plan (i.e. all types of employee share plans: discretionary, all-employee or otherwise) 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.
2. Meaning of "allocated" for the purposes of Plan limits For the purpose of the Plan Limits:
3. 1. Shares are allocated:
   2. 1. when an option, award or other contractual right to acquire unissued Shares or treasury Shares is granted;
      2. 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;
   3. 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;
   4. 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; and
   5. there shall be disregarded any Shares which have been issued or may be issued pursuant to an option, award or other contractual right to acquire Shares (including Shares that have been issued or may be issued in exchange for other securities that that have been or may be issued pursuant an option, award or other contractual right) that was granted prior to the date on which the Plan was approved by the Company's shareholders.
4. Post-grantevents affecting numbers of "allocated" Shares For the purposes of Rule5.3:
5. 1. where:
   2. 1. 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

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