AO World : Proposed Sharesave Scheme Rules to be put to shareholders at AGM

AO World Sharesave Scheme

AO World plc

RULES

of the

AO WORLD

SHARESAVE SCHEME

Adopted by the Board on 14 February 2014

and updated for amendments under the Finance Act 2014

[Amended by the Board on [ ]

pursuant to shareholder approval on 18 September 2024]

Herbert Smith Freehills LLP

HSF Ref: 9150/30952735

11/18041891_5

	AO World Sharesave Scheme
	TABLE OF CONTENTS
Clause	Headings	Page
1.	DEFINITIONS	1
2.	APPLICATION FOR OPTIONS	4
3.	SCALING DOWN	5
4.	GRANT OF OPTIONS	5
5.	SCHEME LIMITS	6
6.	RIGHTS OF EXERCISE AND LAPSE OF OPTIONS	6
7.	TAKE-OVER, SCHEME OF ARRANGEMENT, AND LIQUIDATION	8
8.	MANNER OF EXERCISE	9
9.	ISSUE OR TRANSFER OF SHARES	9
10.	ADJUSTMENTS	9
11.	VESTED SHARE ACCOUNTS	10
12.	ADMINISTRATION	10
13.	ALTERATIONS	11
14.	DATA PROTECTION	12
15.	GENERAL	13

11/18041891_5

AO World Sharesave Scheme

RULES OF THE AO SHARESAVE SCHEME

1. DEFINITIONS

1.1 In this Scheme, the following words and expressions shall bear, unless the context otherwise requires, the meanings set forth below:

"Appropriate Period" has the meaning given by Paragraph 38(3) of Schedule 3 to ITEPA;

"Associated Company" means an associated company of the Company within the meaning that expression bears in Paragraph 47 of Schedule 3 to ITEPA, save in respect of Rules

6.5.4 and 6.6 where the meaning given in Paragraph 35(4) of Schedule 3 to ITEPA shall apply;

"the Board" means the board of directors of the Company, or a duly authorised committee thereof or, following an event specified in Rule 7, shall be the board of directors or duly authorised committee as constituted immediately prior to such event;

"Bonus Date" means the earliest date on which the bonus due under the Savings Arrangements entered into in connection with an Option becomes payable;

"Company" AO World plc (registered in England and Wales under No 05525751);

"Continuous Service" has the meaning given to "continuous employment" in the Employment Rights Act 1996;

"Control" has the meaning given by Section 995 of the Income Tax Act 2007;

"Date of Grant" means the date on which the Board grants an Option following acceptance of a duly completed form of application;

"Date of Invitation" means the date, being a date within the Invitation Period, on which the Board invites applications for Options;

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

"Dealing Restriction" means any restriction on the dealing in shares, whether direct or indirect, pursuant to any law, regulation, code or enactment, or any share dealing code of the Company;

"Eligible Employee" means:

1. any individual:
2. 1. who is a full-time director (who is required to work at least 25 hours per week exclusive of meal breaks) or an employee of a Participating Company;
   2. whose earnings from the office or employment referred to in (1) meet (or would meet if there were any) the requirements set out in paragraph 6(2)(c) of Schedule 3 to ITEPA; and
   3. who, on the immediately preceding Qualifying Date, had such minimum period of Continuous Service with any one or more Participating Companies (taken consecutively) as the Board may specify, provided that any period so specified shall not exceed five years prior to the Date of Grant; and
3. any other employee or category of employees whom the Board may approve;

"Employees' Share Scheme" has the meaning given by Section 1166 of the Companies Act 2006;

"Exercise Price" means the total amount payable in relation to the exercise of an Option, whether in whole or in part, being an amount equal to the relevant Option Price multiplied by the number of Shares in respect of which the Option is exercised;

11/18041891_5

1

AO World Sharesave Scheme

"Invitation Period" means the period of 42 days commencing on any of the following:

1. the Dealing Day immediately following the day on which the Company announces its results for the preceding financial year, half-year or other period (or, if the making of an invitation to apply for Options during such period would be contrary to any Dealing Restriction, as soon as reasonably practicable after such restriction ceases to apply);
2. the date on which the Board determines that exceptional circumstances exist which justify the grant of Options;
3. the date on which revised bonus rates come into effect in relation to Savings Arrangements under the HMRC SAYE bonus rate mechanism;
4. the date on which a change to the legislation affecting Schedule 3 SAYEs is proposed or takes effect; and
5. the date on which a new prospectus in relation to Savings Arrangements is announced or takes effect;

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

"Key Feature" has the meaning given by Paragraph 40B(8) of Schedule 3 to ITEPA; "London Stock Exchange" means London Stock Exchange plc;

"Market Value" means, in relation to a Share on any day:

1. if and so long as the Shares are admitted to listing by the UK Listing Authority and traded on the London Stock Exchange, the mid-closing price of a Share on such day; or
2. subject to (a) above, its market value, determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 (but, when Shares are subject to a Restriction, determined on the basis that no such Restriction applies) and agreed in advance with Shares and Assets Valuation at HM Revenue and Customs;

"Maximum Contribution" means, in relation to the relevant Savings Arrangements, the lesser of:

1. such maximum monthly contribution as may be permitted pursuant to Paragraph 25(3)(a) of Schedule 3 to ITEPA; and
2. such maximum monthly contribution as may be determined from time to time by the Board;

"Minimum Contribution" means, in relation to the relevant Savings Arrangements, the minimum Monthly Contribution allowed under the Savings Arrangements as may be determined from time to time by the Board but not to exceed the amount specified in Paragraph 25(3)(b) of Schedule 3 to ITEPA;

"Monthly Contributions" means monthly contributions agreed to be paid by a Participant under the Savings Arrangements entered into in connection with his Option;

"Option" means a right to acquire Shares under the Scheme which is either subsisting or (where the context so admits or requires) is proposed to be granted;

"Option Price" means the price per Share, as determined by the Board, at which an Eligible Employee may acquire Shares upon the exercise of an Option being not less than:

1. 80 per cent. of:
2. 1. the Market Value of a Share on the Dealing Day (which shall be a date within an Invitation Period) immediately preceding the Date of Invitation;
   2. if the Board so determines, the average of the Market Values of a Share on the three Dealing Days (all of which shall be dates within an Invitation Period) immediately preceding the Date of Invitation; or

11/18041891_5

2

AO World Sharesave Scheme

1. 1. if the Board so determines, the Market Value of a Share at such other time as may be agreed in advance in writing with HM Revenue and Customs; and
2. if the Shares are to be subscribed, their nominal value,

but subject to any adjustment pursuant to Rule 10;

"Participant" means a director or employee, or former director or employee, to whom an Option has been granted, or (where the context so admits or requires) the personal representatives of any such person;

"Participating Company" means:

1. the Company; and
2. any other company which is under the Control of the Company, is a Subsidiary of the Company, and is for the time being designated by the Board as a Participating Company;

"Qualifying Date" means such date as the Board may determine in the 12 month period immediately preceding the commencement of the Invitation Period;

"Repayment" means in relation to Savings Arrangements, the aggregate of the Monthly Contributions which the Participant has agreed to make and any bonus due at the Bonus Date;

"Restriction" has the meaning given by Paragraph 48(3) of Schedule 3 to ITEPA;

"Savings Arrangement" means a certified SAYE savings arrangement (within the meaning of Section 703 of the Income Tax (Trading and Other Income) Act 2005) approved by HM Revenue and Customs for the purpose of Schedule 3 to ITEPA;

"Schedule 3 SAYE" means any share option scheme that meets the requirements in force from time to time of Schedule 3 to ITEPA;

"the Scheme" means this AO World Sharesave Scheme in its present form or as from time to time amended in accordance with the provisions hereof;

"Share" means a fully paid ordinary share in the capital of the Company which satisfies the conditions specified in Paragraphs 18 to 20 and 22 of Schedule 3 to ITEPA (provided that such conditions need not be satisfied at the date of exercise of the Option where such Option is exercised within 20 days after the date on which Options become exercisable pursuant to any of Rules 7.1, 7.3 or 7.4);

"Subsidiary" has the meaning given by Section 1159 and Schedule 6 of the Companies Act 2006;

"Treasury Shares" means Shares to which Sections 724 to 732 of the Companies Act 2006 apply;

"UK Listing Authority" means the Financial Conduct Authority as the competent authority for listing in the United Kingdom under Part VI of the Financial Services and Markets Act 2000; and

"US Taxpayer" means a Participant who is or becomes subject to taxation under the US Internal Revenue Code of 1986, as amended; and

"US Tax Year" means a calendar year or, if it would result in the period under Rule 6.9 being longer, the twelve month period in respect of which the Participant's employing company is obliged to pay tax.

1.2 In the Scheme, unless the context requires otherwise:

1. the headings are inserted for convenience only and do not affect the interpretation of any Rule;
2. a reference to a Rule is a reference to a Rule of this Scheme;
3. a reference to a statute or statutory provision includes a reference:

11/18041891_5

3

AO World Sharesave Scheme

1. 1. to that statute or statutory provision as from time to time consolidated, modified, re-enacted or replaced by any statute or statutory provision;
   2. to any repealed statute or statutory provision which it re-enacts (with or without modification); and
   3. to any subordinate legislation made under it;
2. words in the singular include the plural, and vice versa;
3. a reference to one gender shall be treated as a reference to any other gender;
4. a reference to a person shall include a reference to a body corporate;
5. any reference to writing or written form shall include any legible format capable of being reproduced on paper, irrespective of the medium used; and
6. a provision obliging, or permitting, any company to do any thing shall be read as obliging, or permitting, such company to do that thing, or procure that thing to be done.

2. APPLICATION FOR OPTIONS

1. The Board may, during any Invitation Period, invite applications for Options from Eligible Employees. Invitations may be made by letter, poster, circular, advertisement, electronically, or by any other means or combination of means determined by the Board, and shall include details of:
2. 1. eligibility;
   2. the Option Price;
   3. whether the Shares over which an Option is to be granted are subject to any Restriction and, if so, the details of such Restriction (or information as to where such details are set out in an accessible format);
   4. the Maximum Contribution payable;
   5. the Minimum Contribution payable;
   6. whether, for the purpose of determining the number of Shares over which an Option is to be granted, the Repayment under the Savings Arrangements is to be taken:
   7. 1. as including any specified bonus;
      2. as including any bonus selected by the Eligible Employee; or
      3. as not including a bonus;
   8. the date by which applications made pursuant to Rule 2.3 must be received (being neither earlier than 14 days, nor later than 25 days after the Date of Invitation); and
   9. if determined by the Board, details of the maximum number of Shares over which applications for Options are to be invited in that Invitation Period.
3. An application for an Option must incorporate or be accompanied by a proposal for Savings Arrangements.
4. An application for an Option shall be in such form as the Board may from time to time prescribe, save that it shall provide for the application to state:
5. 1. the Monthly Contributions (being a multiple of £1 and not less than the Minimum Contribution) which the Eligible Employee wishes to make under the Savings Arrangements to be entered into in connection with the Option for which application is made;
   2. that the Eligible Employee's proposed Monthly Contributions (when taken together with any Monthly Contributions he makes under any other Savings Arrangements) will not exceed the Maximum Contribution; and

11/18041891_5

4

AO World Sharesave Scheme

1. 2.3.3 if Eligible Employees may elect for the Repayment under the Savings Arrangements to be taken as including a bonus, the Eligible Employee's election in that respect.

2. Each application for an Option shall provide that, in the event of excess applications, each application shall be deemed to have been modified or withdrawn in accordance with the steps taken by the Board to scale down applications pursuant to Rule 3.
3. Proposals for Savings Arrangements shall be limited to such bank, building society or other person specified in Section 704 of the Income Tax (Trading and Other Income) Act 2005, as the Board may designate.
4. Each application shall be deemed to be for an Option over the largest whole number of Shares which can be acquired at the Option Price with the Repayment under the Savings Arrangements entered into in connection with the Option.

3. SCALING DOWN

1. If valid applications are received for a total number of Shares in excess of any maximum number of Shares determined by the Board pursuant to Rule 2.1.8, or any limitation under Rule 5, the Board shall scale down applications in accordance with 3.1.1 to 3.1.4 below in such order and combinations as the Board may determine, save that the provisions set out in 3.1.3 and 3.1.4 shall not be applied before the provisions set out in 3.1.1 and 3.1.2, until the number of Shares available equals or exceeds such total number of Shares applied for:
2. 1. by reducing, so far as necessary, the proposed Monthly Contributions pro rata to the excess over such amount as the Board shall determine for this purpose being not less than the amount of the Minimum Contribution;
   2. by treating each election for a bonus as an election for no bonus;
   3. by treating elections for five-year Savings Arrangements as elections for three-year Savings Arrangements; and
   4. by selecting by lot.
3. If the number of Shares available is insufficient to enable an Option based on Monthly Contributions of the amount of the Minimum Contribution to be granted to each Eligible Employee making a valid application, the Board may, as an alternative to selecting by lot, determine in its absolute discretion that no Options shall be granted.
4. If the Board so determines, the provisions in Rule 3.1 may be modified or applied in any manner provided that any such modification or application does not breach any of the provisions of Schedule 3 to ITEPA.
5. If, in applying the scaling down provisions contained in this Rule 3, Options cannot be granted within the 30 day period referred to in Rule 4.2 below, the Board may extend that period by 12 days regardless of the expiration of the relevant Invitation Period.

4. GRANT OF OPTIONS

1. No Option shall be granted to any person if, at the Date of Grant, that person has ceased to be an Eligible Employee.
2. Within 30 days of the Dealing Day by reference to which the Option Price was fixed (or where by reference to more than one Dealing Day, the first of such days) the Board may, subject to Rule 3 above, grant to each Eligible Employee who has submitted a valid application an Option in respect of the number of Shares for which application has been deemed to be made under Rule 2.6.
3. The Board shall issue to each Participant an option certificate in such form (not inconsistent with the provisions of the Scheme) as the Board may from time to time prescribe. Each such certificate shall specify:
4. 1. the Date of Grant of the Option;
   2. the number and class of Shares over which the Option is granted;

11/18041891_5

5

AO World Sharesave Scheme

1. 1. the Option Price;
   2. whether the Shares over which the Option is granted are subject to any Restriction and, if so, the details of such Restriction (or information as to where such details are set out in an accessible format); and
   3. the Bonus Date.
2. Except as otherwise provided in these Rules, every Option shall be personal to the Participant to whom it is granted and shall not be transferable.
3. No amount shall be paid in respect of the grant of an Option.

5. SCHEME LIMITS

1. Pursuant to the Scheme and subject to Rule 5.2, the Board may not grant an Option if the number of Shares subject to such proposed Option (the "Relevant Shares") would cause the limit in Rule 5.3 to be breached.
2. Rule 5.1 shall not apply in respect of an Option granted on terms that it shall not be capable of being satisfied by the issue of Shares (save from such date as the Board may determine that such Option may be capable of being satisfied by the issue of Shares).
3. The number of Relevant Shares, when added to the aggregate of:
4. 1. the number of Shares subject to outstanding options or awards granted within the previous 10 years under the Scheme or any other Employees' Share Scheme adopted by the Company which may be satisfied by the issue of Shares; and
   2. the number of Shares actually issued within the previous 10 years under the Scheme, under any other Employees' Share Scheme or to any employee benefit trust (but excluding any of those Shares that were used to satisfy an option or award granted more than 10 years previously; and without double-counting any Shares which the Board has determined are to be used to satisfy options or awards counted under Rule 5.3.1 above),

may not exceed such number as represents ten per cent of the Company's issued share capital immediately prior to such proposed grant or issue.

5.4 References to the issue and allotment of Shares shall include the transfer of Treasury Shares, but only until such time as the guidelines issued by institutional investor bodies cease to provide that they need to be so included.

6. RIGHTS OF EXERCISE AND LAPSE OF OPTIONS

1. Save as provided in Rules 6.4, 6.5 and Rule 7, an Option shall not be exercised earlier than the Bonus Date under the Savings Arrangements entered into in connection therewith.
2. Save as provided in Rule 6.4, an Option shall not be exercised later than six months after the Bonus Date under the Savings Arrangements entered into in connection therewith.
3. Save as provided in Rules 6.4, 6.5 and 6.7 an Option may only be exercised by a Participant whilst he is a director or employee of a Participating Company.
4. An Option may be exercised by the personal representatives of a deceased Participant at any time:
5. 1. within 12 months following the date of his death if such death occurs before the Bonus Date; and
   2. within 12 months following the Bonus Date in the event of his death on, or within 6 months after, the Bonus Date.
6. An Option may be exercised by a Participant within six months following his ceasing to hold office or employment with a Participating Company by reason of:
7. 1. injury or disability;
   2. redundancy within the meaning of the Employment Rights Act 1996;

11/18041891_5

6

AO World Sharesave Scheme

1. 1. retirement;
   2. his office or employment being in a company which ceases to be an Associated Company by reason of a change of control within the meaning of sections 450 and 451 of the Corporation Tax Act 2010;
   3. a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006; and
   4. the transfer of a business or part of a business to a person who is not an Associated Company where the transfer is not a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
2. A Participant shall not be treated, for the purposes of Rule 6.5 or Rule 6.8.5, as ceasing to hold an office or employment with a Participating Company until he ceases to hold any office or employment with a Participating Company or an Associated Company.
3. An Option may be exercised within six months of the Bonus Date by a Participant who is a director or employee of a company which is not a Participating Company but which is an Associated Company.
4. An Option granted to a Participant shall lapse upon the occurrence of the earliest of the following:
5. 1. subject to 6.8.2 below, six months after the Bonus Date under the Savings Arrangements entered into in connection with the Option;
   2. where the Participant dies before the Bonus Date, 12 months after the date of death; and where the Participant dies on, or in the period of six months after, the Bonus Date, 12 months after the Bonus Date;
   3. the expiry of any of the six month periods specified in Rule 6.5, save where the Participant has died prior to the expiry of such period;
   4. the expiry of any of the periods specified in Rules 7.3 or 7.4, save: (i) where an Option is released in consideration of the grant of a New Option (during one of the periods specified in Rules 7.3 and 7.4) pursuant to Rule 7.6; or (ii) where the Participant has died;
   5. the Participant ceasing to hold any office or employment with a Participating Company for any reason other than those specified in Rule 6.5 or as a result of his death;
   6. the expiry of the period specified in Rule 7.5;
   7. subject to Rule 7.5, the passing of an effective resolution, or the making of an order by the Court, for the winding-up of the Company;
   8. the Participant being deprived (otherwise than on death) of the legal or beneficial ownership of the Option by operation of law, or doing anything or omitting to do anything which causes him to be so deprived, or becoming bankrupt;
   9. before an Option has become capable of being exercised, the Participant giving notice that he intends to stop paying Monthly Contributions, or being deemed under the terms of the Savings Arrangements to have given such notice, or making an application for repayment of the Monthly Contributions made; and
   10. where an Option is subject to the provisions of Rule 6.9, the expiry of the period for exercise provided for Rule 6.9.
6. If an Option with an Option Price that is less than the Market Value of a Share subject to the Option on the Date of Grant is held by a US Taxpayer, such Option must be exercised, if at all, under any Rule of the Scheme not later than two business days before the 15th day of the third month following the end of the US Tax Year in which the Option first becomes exercisable (or, if earlier, the last date of the relevant exercise period for such Option, or such earlier date as is provided under the Scheme and Option). The Board may determine

11/18041891_5

7

AO World Sharesave Scheme

an earlier date by which the Option must be exercised, if at all, in order to provide for the issuance or transfer of the Shares within the time set forth in Rule 9.2.

7. TAKE-OVER, SCHEME OF ARRANGEMENT, AND LIQUIDATION

1. If any person obtains Control of the Company as a result of making a general offer to acquire Shares, which is either unconditional or is made on a condition such that if it is satisfied the person making the offer will have Control of the Company, an Option may be exercised within six months of the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied or waived.
2. For the purpose of Rule 7.1 a person shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it.
3. If any person becomes bound or entitled to acquire Shares under Sections 979 to 982 or 983 to 985 of the Companies Act 2006, an Option may be exercised within one month of the date on which that person first became so bound or entitled.
4. If, under Section 899 or Section 901F of the Companies Act 2006, the Court sanctions a compromise or arrangement applicable to or affecting:
5. 1. all of the ordinary share capital of the Company or all of the shares of the same class as the Shares to which the Option relates; or
   2. all of the shares, or all of the shares of that same class, which are held by a class of shareholders otherwise than by reference to their employment or directorships or their participation in the Scheme or any other Schedule 3 SAYE,

an Option may be exercised within six months of the Court sanctioning the compromise or arrangement.

1. If notice is duly given of a resolution for the voluntary winding-up of the Company, an Option may be exercised within two months from the date of the resolution.
2. If any company (the "Acquiring Company"):
3. 1. obtains Control of the Company as a result of making a general offer to acquire Shares, which is either unconditional or is made on a condition such that if it is satisfied the Acquiring Company making the offer will have Control of the Company;
   2. obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the Court under Section 899 or Section 901F of the Companies Act 2006; or
   3. becomes bound or entitled to acquire Shares under Sections 979 to 982 or Sections 983 to 985 of the Companies Act 2006,

any Participant may at any time within the Appropriate Period, by agreement with the Acquiring Company, release any Option granted under the Scheme which has not lapsed (the "Old Option") in consideration of the grant to him of an option (the "New Option") which (for the purposes of Paragraph 39 of Schedule 3 to ITEPA) is equivalent to the Old Option but relates to shares in a different company (whether the Acquiring Company itself or some other company falling within Paragraph 18(b) or (c) of Schedule 3 to ITEPA).

7.7 The New Option shall not be regarded for the purposes of Rule 7.6 as equivalent to the Old Option unless the conditions set out in Paragraph 39(4) of Schedule 3 to ITEPA are satisfied, but so that the provisions of the Scheme shall for this purpose be construed as if:

1. the New Option were an option granted under the Scheme at the same time as the Old Option;
2. except for the purposes of the definition of "Participating Company" in Rule 1, the reference to "AO World plc" in the definition of "Company" in Rule 1 were a reference to the different company mentioned in Rule 7.6 (provided that the scheme organiser (as defined in Schedule 3 of ITEPA) shall continue to be the Company); and

11/18041891_5

8