NatWest : 2024 Employee Share Plan Rules

NatWest Group plc

NatWest Group plc 2024 Employee Share Plan

Contents

1.	Introduction	5
2.	Operation of the Plan	5
	2.1	Timing of operation	5
	2.2	Selection of Participants	5
3.	Grant of Awards	5
	3.1	Terms of Awards	5
	3.2	Performance Conditions and additional conditions	6
	3.3	Award statement	6
	3.4	Rights attaching to Award Assets	6
	3.5	Individual limit	6
	3.6	Dilution limits	7
	3.7	Listing Rules	8
	3.8	Currency exchange	8
4.	Malus and Clawback	8
	4.1	General	8
	4.2	Reduction in Awards to give effect to provisions in other plans	9
	4.3	Compliance with legal or regulatory provisions	9
5.	Vesting of Awards	9
	5.1	General	9
	5.2	Timing of Vesting	9
	5.3	Delayed Vesting	9
	5.4	Consequences of Vesting	10
	5.5	Dividend equivalents and notional interest	11
	5.6	Alternative settlement	11
	5.7	Retention Period	11
6.	Leaver provisions	12
Document classification - Internal	1

	6.1	General rule on cessation of employment	12
	6.2	Leaving in exceptional circumstances	12
	6.3	Vesting	13
	6.4	Death	13
	6.5	Amendment of rule 6	13
7.	Corporate events	14
	7.1	Change of Control	14
	7.2	Rights issues, demergers and other corporate events	14
	7.3	Committee	14
	7.4	Exchange of Awards	14
8.	General terms	15
	8.1	Transfer of Awards	15
	8.2	Company documents	15
	8.3	Withholding	15
	8.4	Discretionary nature of the Plan	16
	8.5	Committee's decisions final and binding	16
	8.6	Administrative regulations	16
	8.7	Awards non-pensionable	16
	8.8	Employee trust	17
	8.9	Consents	17
	8.10	Notices	17
	8.11	Share rights	17
	8.12	Data protection	17
	8.13	Amendment	17
	8.14	Severability	18
	8.15	Termination of the Plan	18
	8.16	Governing law and jurisdiction	18

9. Definitions	18
Schedule 1 - Allowances	23
Document classification - Internal	2

1	Introduction	23
2	Operation of the Schedule	23
	2.1	Timing of operation	23
	2.2	Selection of Participants	23
3	Award of Allowances	23
	3.1	Terms of Allowances	23
	3.2	Currency exchange	24
	3.3	Statement of entitlement	24
4	Allowance Instalment Payments	24
	4.1	Calculation and payment	24
	4.2	Alternative settlement	24
	4.3	Change of Control	24
5	Ceasing to perform a Role	24
	5.1	General rule	24
	5.2	Amendment	25
6	Rights of Participants during and following the Retention Period	25
7	Dilution limits	25
8	Listing Rule	26
9	General terms	26
	9.1	Company documents	26
	9.2	Miscellaneous	26
	9.3	Amendment	26
	9.4	Termination of the Schedule	27
10	Definitions	27
Schedule 2	- Cash Awards and Allowances	29
Schedule 3	- Phantom Awards and Allowances	31
Schedule 4	- Awards and Allowances over other assets	35
Schedule 5	- USA	36
Schedule 6	- Poland	40
Document classification - Internal	3

Document classification - Internal

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1. Introduction
   The definitions used in this Plan are set out at rule 9. Expressions in italics and headings are for guidance only and do not form part of the Plan.
2. Operation of the Plan

2.1 Timing of operation

1. The Committee may operate the Plan at any time after its adoption and before its termination under rule 8.15. Other than as set out in rule 2.1.2, Awards may only be granted within 42 days starting on any of the following:
2. 1. the date on which the Plan, or any amendment to the Plan, is approved by the Company's shareholders;
   2. the day after the announcement of the Company's results for any period;
   3. any day on which the Committee resolves that exceptional circumstances exist which justify the grant of Awards;
   4. any day on which changes to the legislation or regulations affecting share plans are announced, effected or made; or
   5. the lifting of Dealing Restrictions which prevented the granting of Awards during any period specified above.
3. Awards may be granted after an Eligible Employee joins any Member of the Group where they are granted as a replacement for an incentive that was, or would otherwise have been, provided by that Eligible Employee's previous employer or otherwise in connection with such Eligible Employee's previous employment. As far as reasonably practicable, the grant of any such Award will take place within 42 days of the date of joining.

2.2 Selection of Participants

1. Whenever the Committee decides to operate the Plan it may, in its discretion, select any Eligible Employee to be granted an Award as it considers appropriate.
2. However, a selected Eligible Employee will not receive an Award if they cease to be employed by a Member of the Group (in accordance with rule 6.1.2) before the Award Date and the Committee determines that they will not receive an Award.

3. Grant of Awards

3.1 Terms of Awards

3.1.1 Whenever the Committee decides to operate the Plan, it must determine in respect of a selected Eligible Employee who is to be granted an Award in accordance with rule 2.2.1:

1. whether their Award will take the form of a Conditional Award, Forfeitable Award or Option;
2. the type of Award Assets in respect of which the Award will be granted;
3. the number or value of such Award Assets;
4. the scheduled Vesting date(s) for the Award;
5. the Performance Condition(s) that will apply to the Award (if any); and
6. the Retention Period that will apply to the Award (if any).

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1. Awards will be granted in accordance with the rules of the Plan and such terms as the Committee may determine. The Committee may specify additional terms and conditions which will apply to Awards in accordance with rule 3.2.2.
2. Awards may be granted by deed or any other method determined by the Company. In addition, the Committee may require Participants to accept the grant of an Award (in such manner as may be determined by the Committee) and to enter into other agreements or elections, or to sign other documentation in connection with the grant of an Award as the Committee considers appropriate in its discretion.
3. If a Participant fails to:
4. 1. accept the grant of an Award (in such manner as may be determined by the Committee); and/or
   2. enter into or sign such other relevant documentation in connection with the grant of the Award required by the Committee,

within 30 days of the Award Date, their Award shall lapse unless the Committee determines otherwise.

3.1.5 Participants who are granted a Forfeitable Award will be required to enter into a Forfeiture Agreement which will specify that if and to the extent that the Forfeitable Award lapses, the Award Assets will be forfeited and transferred, for no or nominal consideration, to any person specified by the Company.

3.2 Performance Conditions and additional conditions

1. When granting an Award, the Committee may make its Vesting conditional on the satisfaction of one or more Performance Conditions. The Committee may change any such condition in accordance with its terms or if anything happens which causes the Committee reasonably to consider it appropriate.
2. The Committee may also impose additional conditions on the Vesting of an Award (whether at grant or otherwise) which do not relate to performance. The Committee may change any such condition in accordance with its terms or if anything happens which causes the Committee reasonably to consider it appropriate.
3. Any condition imposed under this rule 3.2 may provide that an Award will lapse, in full or in part, if it is not satisfied.

1. Award statement
   Each Participant may be sent a statement setting out the terms of the Award. This may be sent by e- mail, made available on a website, or sent by some other electronic means of communication.
2. Rights attaching to Award Assets

1. Unless the Forfeiture Agreement provides otherwise, a Participant who has been granted a Forfeitable Award will be entitled to vote, to receive dividends and benefit from any other rights available to them as the holder of the Award Assets in respect of their Forfeitable Award.
2. Subject to rule 5.5, a Participant who has been granted a Conditional Award or Option will not be entitled to receive dividends, coupons, interest or to have any other rights of a holder of the relevant Award Assets until these are issued or transferred to the Participant following Vesting or exercise.
3. If an Award lapses under the Plan, a Participant has no rights in respect of it, including in relation to any of the relevant Award Assets.

3.5 Individual limits

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1. An Award may only be granted to an Eligible Employee who is an Executive Director if the grant of such Award is permitted by, and within any limits contained in, the Company's directors' remuneration policy in force from time to time.
2. Where an Award is being granted in mandatory substitution for any Bonus the Market Value of such Award, together with any other awards granted in mandatory substitution of such Bonus (whether under the Plan or any other employee share plan or bonus plan operated by any Member of the Group) must not exceed the value of the corresponding Bonus.
3. Where an Award is being granted as a replacement for an incentive that was or would have been provided by the Eligible Employee's previous employer (or otherwise in connection with the Eligible Employee's previous employment), the value of such Award must not exceed the value of that corresponding incentive (as determined by the Committee).
4. The grant of Awards will also be subject to any overriding limit imposed under the Remuneration Code or any other applicable legislation or regulation that applies from time to time to Awards.

3.6 Dilution limits

3.6.1 10% limit: An Award must not be granted if the number of Shares committed to be issued under that Award exceeds 10 per cent of the ordinary share capital of the Company in issue immediately before the proposed grant when added to the number of Shares which have been issued, or committed to be issued, to satisfy:

1. Awards granted under the Plan;
2. Allowance Instalment Payments; and
3. options and awards granted under any other employee share plan operated by the Company,

in the previous 10 years.

3.6.2 5% limit: An Award which is granted otherwise than as an All-Employee Award or in mandatory substitution for any Bonus must not be granted if the number of Shares committed to be issued under that Award exceeds 5 per cent of the ordinary share capital of the Company in issue immediately before the proposed grant when added to the number of Shares which have been issued, or committed to be issued, to satisfy:

1. Awards granted otherwise than as an All-Employee Award or in mandatory substitution of Bonus under the Plan;
2. Allowance Instalment Payments; and
3. options and awards granted (otherwise than in mandatory substitution of Bonus) under any discretionary employee share plan operated by the Company,

in the previous 10 years.

1. Ignore releases/lapses: Where an award or option granted over Shares under the Plan, any of the Schedules, or any other employee share plan operated by a Member of the Group, is released or lapses or is settled otherwise than in Shares, or is subject to reduction under a malus provision, any Shares which are the subject of such release, lapse, alternative settlement or malus reduction are ignored when calculating the limits in this rule 3.6.
2. Net settlement: For the purposes of rule 3.6, if the Committee determines that the number of Shares over which an Award is held will be reduced in order to discharge any liability under rule 8.3.1, the number of Shares committed to be issued under that Award will be based on the net number to be issued on Vesting.

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1. Treasury Shares - As long as required by the Investment Association, Shares transferred from treasury are counted as part of the ordinary share capital of the Company, and as Shares issued by the Company.
2. Existing Shares ignored: For the avoidance of doubt, existing Shares transferred, or committed to be transferred, to satisfy Awards, Allowance Instalment Payments, or any other option or award will be ignored when calculating the limits in rule 3.6 (other than Shares transferred from treasury, where rule 3.6.5 applies).

1. Listing Rules
   No Shares will be issued under the Plan if it would cause Listing Rule 6.1.19 (Shares in public hands) to be breached.
2. Currency exchange
   Where an amount or value for the purposes of these rules is expressed in a currency other than pounds sterling, the amount or value will be treated as being an amount expressed in pounds sterling by applying such rate or method of exchange as the Committee considers appropriate.

4. Malus and Clawback

4.1 General

4.1.1 The Committee may decide at any time before an Award Vests, or for such period after an Award Vests that the Committee determines is appropriate, that any Participant will be subject to Malus and/or Clawback in the light of:

1. the performance of the Company, any Member of the Group and any business area or team, and the conduct, capability or performance of the Participant; and/or
2. any legal or regulatory requirement on the Company or any Member of the Group to apply Malus and/or Clawback in relation to the Company, any Member of the Group, any business area or team, or the Participant; and/or
3. non-compliancewith any legal or regulatory requirement relating to the Company, any Member of the Group, any business area or team, or the Participant; and/or
4. any other matter which the Committee considers relevant.

In taking any decision to apply Malus and/or Clawback in accordance with this rule 4.1, the Committee will have regard to the Malus and Clawback Policy.

4.1.2 To give effect to Malus and/or Clawback in respect of a Participant the Committee may take any action, including but not limited to:

1. reducing (if appropriate, to zero) the amount of any Bonus which would otherwise be payable; and/or
2. reducing (if appropriate, to zero):
3. 1. the number or amount of Award Assets in respect of an Award (including any Vested but unexercised Option); and/or
   2. the number or amount of any assets relating to any awards (including vested but unexercised options) which have been granted to the Participant under any other employee share plan or incentive plan (other than a Tax-favoured Plan) operated by any Member of the Group; and/or
   3. the extent to which any Award held by the Participant Vests or becomes exercisable; and/or

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1. the extent to which any award granted to the Participant under any other employee share plan or incentive plan (other than any Tax-favoured Plan) operated by any Member of the Group vests or becomes exercisable,

in each case notwithstanding the extent to which any conditions (including performance conditions) imposed on such Awards or awards may be or have been satisfied; and/or

1. reducing (if appropriate, to zero) any amount otherwise payable under rule 5.5; and/or
2. requiring the Participant to pay or repay any Award Assets or amounts (which, without limitation, may be deducted from the Participant's salary or any other payment to be made to the Participant by any Member of the Group).

4.1.3 Where Clawback is proposed to be operated, whether account will be taken of any tax or social security actually paid (or due to be paid) by the Participant in respect of the amount proposed to be subject to Clawback will be determined in accordance with the Malus and Clawback Policy.

1. Reduction in Awards to give effect to provisions in other plans
   The Committee may decide to take any of the actions described in rule 4.1.2 to give effect to a malus and/or clawback provision contained in any other employee share plan, incentive plan or bonus plan operated by any Member of the Group. Such action will be taken in accordance with the terms of the relevant plan or, in the absence of any such terms, on such basis as the Committee decides
   is appropriate.
2. Compliance with legal or regulatory provisions
   The Company can alter or extend the range of circumstances in which Malus and/or Clawback may be operated if required by any legal or regulatory provision.

5. Vesting of Awards

5.1 General

1. Prior to Vesting of an Award, and subject to rule 4, the Committee will determine the extent to which an Award may Vest having regard to the extent any Performance Condition or other Vesting condition has been satisfied4. An Award will lapse to the extent that the Committee determines that it does not Vest, and is incapable of Vesting, whether due to the failure to satisfy any Performance Condition or other Vesting condition or otherwise in accordance with these Rules.
2. An Award will not Vest if any legal or regulatory requirement on the Company or any Member of the Group would make Vesting unlawful, impossible or, in the opinion of the Committee, inappropriate or impractical.

5.2 Timing of Vesting

Subject to rules 5.1, 5.3, 6 and 7, an Award will Vest:

1. on the scheduled Vesting date or dates specified in the terms of the Award, or such earlier date or dates as the Committee may consider appropriate;
2. if the Committee has not made its determination under rule 5.1 on the scheduled Vesting date or dates, such later date as the Committee will specify; or
3. if on the scheduled Vesting date or dates specified in the terms of the Award, or any such revised date as determined under rule 5.2.2, a Dealing Restriction applies to a Participant and the Committee so determines, on the first date on which the Dealing Restriction no longer applies.

5.3 Delayed Vesting

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