Essentra : Long Term Incentive Plan Rules

Rules of the Essentra plc 2024 Long Term Incentive Plan

Adopted by the board of directors on [●] 2024

Approved by shareholders on [●] 2024

Expiry date [●] 2034

Table of Contents
1.	Definitions and Interpretation	2
2.	Grant of Awards	5
3.	Performance Condition	6
4.	Restrictions on Transfer and Bankruptcy	6
5.	Dividend Equivalents	6
6.	Individual Limit	6
7.	Plan Limits	6
8.	Reduction and Recovery	7
9.	Vesting, Release, Exercise and Settlement	9
10.	Relevant Liabilities and Regulatory Issues	10
11.	Cash Equivalent	11
12.	Cessation of Employment	11
13.	Corporate events	14
14.	Adjustments	17
15.	Amendments	17
16.	Legal Entitlement	18
17.	General	18
Schedule 1 Cash Awards	19

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The Essentra plc 2024 Long Term Incentive Plan

1. Definitions and Interpretation

1.1 In this Plan, unless otherwise stated, the words and expressions below have the following meanings:

"Award" means a Conditional Award or a Nil-Cost Option;

"Board" means, subject to rule 13.8, the board of the Company or any committee or person duly authorised by the board, or any duly appointed successor body;

"Company" means Essentra plc registered in England and Wales under number 05444653;

"Conditional Award" means a right to receive Shares automatically at no cost subject to the rules of the Plan;

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

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

"Dealing Restrictions" means restrictions imposed by the Company's share dealing code, the

Listing Rules, the MAR or any other laws or regulations that impose restrictions on share dealing;

"Eligible Employee" means an employee (including an executive director) of the Company or any of its Subsidiaries;

"FCA" means the United Kingdom Financial Conduct Authority, or any successor body; "Grant Date" means the date on which an Award is granted;

"Grant Period" means the period of 42 days beginning on:

1. the day on which the Plan is approved by shareholders in general meeting;
2. the first Dealing Day after the day on which the Company makes an announcement of its results for any period;
3. the day on which the Policy is approved by shareholders; or
4. any day on which the Board resolves that exceptional circumstances exist which justify the grant of Awards,
   unless the Company is restricted from granting Awards during the periods specified above as a result of any Dealing Restrictions, in which case the relevant Grant Period will be 42 days beginning on the day after such Dealing Restrictions are lifted;

"Group Member" means the Company, any Subsidiary of the Company, any company that is (within the meaning given by section 1159 of the Companies Act 2006) the Company's holding company or a Subsidiary of the Company's holding company or, if the Board so determines,

any body corporate in relation to which the Company is able to exercise at least 20% of the equity voting rights and "Group" will be construed accordingly;

"Holding Period" means a period of at least two years (or such other period as the Board may determine on or before the Grant Date), beginning on the Vesting Date;

"Internal Reorganisation" means where immediately after a change of Control of the Company, all or substantially all of the share capital of the acquiring company is owned directly or indirectly by the persons who were shareholders in the Company immediately before the change of Control;

"Listing Rules" means the FCA's listing rules, as amended from time to time;

"MAR" means the EU Market Abuse Regulation 596/2014 and any associated EU Regulation to the extent each is incorporated into the law of the United Kingdom by virtue of section 3 of the European Union (Withdrawal) Act 2018 and as amended by any instrument related to their incorporation into the law of the United Kingdom;

"Nil-CostOption" means a right to acquire Shares subject to the rules of the Plan for nil cost or for a Nominal Exercise Price;

"Nominal Exercise Price" means an exercise price per Share equal to the nominal value of a Share from time to time;

"Normal Release Date" means the date on which an Award will normally be Released, which:

1. in relation to an Award to which no Holding Period applies, will be the Vesting Date; and
2. in relation to an Award to which a Holding Period applies, will be the first Dealing Day immediately after the end of the Holding Period;

"Participant" means any person who holds an Award or following their death, their personal representatives;

"Performance Condition" means any one or more condition, measure, target (whether on an individual basis or otherwise) imposed under rule 3.1 that relates to performance;

"Performance Period" means the period over which a Performance Condition will be measured which, unless the Board determines otherwise, will be at least three years;

"Plan" means the Essentra plc 2024 Long Term Incentive Plan as amended from time to time;

"Policy" means the Company's directors' remuneration policy that has most recently been approved by the Company's shareholders;

"Recovery Period" means subject to rule 8.6, the period beginning on the first day of the Vesting Period ending on the third anniversary of the Vesting Date, or such other period determined by the Board on or before the Grant Date;

"Recruitment Award" means an Award granted in connection with the recruitment of an Eligible Employee;

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"Release" means:

1. in relation to a Conditional Award, the point at which the Participant becomes entitled to receive the Shares under their Award; and
2. in relation to a Nil-Cost Option, the point at which it becomes capable of exercise,

and "Released" and "Unreleased" will be construed accordingly;

"Release Date" means the date on which an Award is Released;

"Relevant Liability" means any tax, social security contributions, levy, charge or other payroll deductions required by law arising out of or in connection with an Award for which the Participant is liable (or which may be recovered from the Participant) and for which any Group Member or former Group Member is obliged to pay or account to any relevant authority, or any reasonable estimate thereof;

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

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

"Subsidiary" has the meaning given by section 1159 of the Companies Act 2006;

"Trustee" the trustee or trustees for the time being of any employee benefit trust, the beneficiaries of which include Eligible Employees;

"Vest" means the Board's determination of the number of Shares in respect of which an Award may become capable of Release by reference to the satisfaction of any Performance Condition, any adjustment in accordance with rule 9.2 and any other term of the Award;

"Vesting Date" means the date on which an Award will normally Vest, which will be the later of:

1. the date on which the Board determines the extent to which any Performance Condition has been satisfied in accordance with rule 9.1; and
2. the date on which the Board determines whether an adjustment should be made in accordance with rule 9.2;

or any date set by the Board on or before the Grant Date;

"Vesting Period" means:

1. in relation to an Award that is subject to a Performance Condition, the Performance Period (or such other period as the Board may determine on or before the Grant Date); and

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1. 1. in relation to an Award that is not subject to a Performance Condition, the period commencing on the Grant Date and ending on the third anniversary of the Grant Date (or such other date as the Board may determine on or before the Grant Date).
2. References in the Plan to:
3. 1. any statutory provisions or to regulations are to those provisions or regulations as amended or re-enacted from time to time;
   2. the singular include the plural and vice versa; and
   3. the masculine include the feminine and vice versa.
4. Headings do not form part of the Plan.

2. Grant of Awards

1. The Board may, during a Grant Period, grant an Award to an Eligible Employee.
2. An Award may be subject to such additional terms as the Board may determine, which may include without limitation restrictions on the disposal of some or all of the Shares acquired pursuant to an Award for such period as the Board may determine and that any Shares so restricted may be forfeited if the Participant ceases to hold office or employment with a Group Member during such period on account of gross misconduct. The Board may make the Release of an Award or exercise of a Nil-Cost Option conditional on the Participant taking any action (including entering into any agreement) reasonably required by the Board in relation to such additional terms.
3. An Award may be divided into distinct tranches with different Vesting Periods, Performance Conditions and/or Holding Periods, and, if so, the rules of the Plan will be construed as if each tranche were itself a separate Award.
4. The grant of an Award will be subject to obtaining any approval required by the FCA (or other relevant authority), any Dealing Restrictions and any other laws or regulations (whether in the UK or overseas).
5. Awards must be granted by deed (or in such other written form as the Board determines) and, as soon as reasonably practicable after the Grant Date, Participants must be notified of the terms of their Award including the Vesting Period, the Vesting Date, any Performance Condition, any Holding Period, any additional terms imposed by the Board in accordance with rule 2.2 and, in the case of a Nil-Cost Option, whether it has a Nominal Exercise Price.
6. A Participant may be required to accept an Award in such form as the Board reasonably requires and, if the Board has not received (or waived the right to require) such acceptance on or before the date that is three months after the Grant Date:
7. 1. the Award may not be Released; and/or
   2. the Board may determine that the Award will lapse.

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2.7 No Award may be granted under the Plan after the tenth anniversary of the date on which the Plan was approved by shareholders.

3. Performance Condition

1. Awards may be subject to the satisfaction of a Performance Condition, provided that any Award (other than a Recruitment Award) granted to an executive director of the Company must be subject to the satisfaction of a Performance Condition.
2. Subject to rules 12 and 13, the Performance Condition will be measured over the Performance Period.
3. The Board may amend or substitute a Performance Condition in accordance with its terms or if, in respect of a relevant event, the Board considers that an amended or substituted Performance Condition is reasonable, appropriate and would not be materially less difficult to satisfy.

4. Restrictions on Transfer and Bankruptcy

1. An Award must not be transferred, assigned, charged or otherwise disposed of in any way
   (except in the event of the Participant's death, to their personal representatives) and will lapse immediately on any attempt to do so.
2. An Award will lapse immediately if the Participant is declared bankrupt or, if the Participant is outside the UK and any analogous event occurs.

5. Dividend Equivalents

5.1 The Board may decide before the delivery of Shares in satisfaction of an Award, that the Participant will receive an amount (in cash and/or additional Shares) equal in value to any dividends that would have been paid on those Shares on such terms and over such period (ending no later than the Release Date) as the Board may determine. This amount may assume the reinvestment of dividends (on such basis as the Board may determine) and may normally include special dividends.

6. Individual Limit

1. No Eligible Employee may be granted an Award (other than a Recruitment Award) that would, at the time it is granted, cause the market value (as determined by the Board) of the Shares subject to all Awards (other than Recruitment Awards) granted to that Eligible Employee in respect of a particular financial year of the Company to exceed the maximum award value for executive directors of the Company permitted under the Policy.
2. To the extent any Award exceeds the applicable limit in rule 6.1 it will be scaled back accordingly.

7. Plan Limits

7.1 The Board must not grant an Award that would cause the number of Shares allocated under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents ten per cent of the ordinary share capital of the Company in issue.

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1. The Board must not grant an Award that would cause the number of Shares allocated on a discretionary basis under the Plan and under any other employee share plan adopted by the Company to exceed such number as represents five per cent of the ordinary share capital of the Company in issue.
2. Subject to rules 7.4 and 7.5, in determining the limits set out in rules 7.1 and 7.2, Shares are treated as allocated if, on any day, they have been newly issued by the Company or transferred from treasury to satisfy an option, award or other right granted during the period of ten years before that day (an "award"), or in the case of such an award in respect of which Shares are yet to be delivered, if the Board intends that new Shares will be issued or that Shares from treasury will be transferred and for these purposes the number of Shares allocated includes:
3. 1. Shares that have been issued or may be issued to any Trustee; and
   2. Shares that have been or may be transferred from treasury to any Trustee,

and in either case for the Trustee to then transfer to satisfy an award (unless these Shares have already been counted under this rule).

1. The Board may determine that Shares transferred from treasury will cease to count as allocated for the purposes of rule 7.3 if guidelines published by institutional investor representative bodies no longer require such Shares to be counted.
2. The number of Shares allocated does not include:
3. 1. Shares that were allocated to satisfy awards to the extent that such awards have lapsed, been relinquished or been satisfied in cash; and
   2. existing Shares (other than treasury Shares) that have been transferred to satisfy awards or that have been allocated to satisfy awards.
4. If the Board purports to grant one or more Awards that are inconsistent with the limits in this rule 7, each such Award will be reduced as determined by the Board and will take effect from the Grant Date over the reduced number of Shares.
5. The Board may make such adjustments to the method of assessing the limits set out in rules 7.1 and 7.2 as it considers appropriate in the event of any variation of the Company's share capital.

8. Reduction and Recovery

8.1 Notwithstanding any other rule of the Plan, this rule 8 applies to each Award and will continue to apply after the cessation of a Participant's office or employment with a Group Member for any reason, whether or not any termination is lawful.

Action that may be taken to give effect to reduction and recovery provisions

8.2 The Board may, where rule 8.4, or 8.5 applies:

1. impose further conditions on an 8.5 Award; and/or
2. reduce (including to nil) the number of Shares to which an Award relates,

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at any time before the end of the Recovery Period in respect of such Award.

8.3 If Shares and/or cash have been delivered in satisfaction of an Award, the Board may, where rule 8.4 applies:

1. require a Participant to make a cash payment to the Company in respect of some or all of the Shares or cash delivered to them under the Award; and/or
2. require a Participant to transfer for nil consideration some or all of the Shares delivered to them under the Award,

at any time before the end of the Recovery Period in respect of an Award, and the Board will determine the basis on which the amount of cash or Shares is calculated including whether and if so to what extent to take account of any tax or social security liability applicable to the Award.

Triggers

8.4 The Board may take any of the actions set out in rule 8.2 or 8.3 if the Board determines that any of the following circumstances have occurred or exist before the end of the Recovery Period:

1. a material misstatement of any Group Member's financial results;
2. an error in assessing a Performance Condition applicable to the Award or in the information or assumptions on which the Award was granted, Vests or is Released;
3. a material failure of risk management in any Group Member or a relevant business unit;
4. serious reputational damage to any Group Member or a relevant business unit;
5. serious misconduct or material error on the part of the Participant;
6. a material corporate failure in any Group Member or a relevant business unit; or
7. any other circumstances that the Board considers to be similar in their nature or effect to those in this rule 8.4.

Cross-clawback

8.5 The Board may take any of the actions set out in rule 8.2 in order to effect the recovery of sums paid or Shares delivered under any malus or clawback provisions that are included in any incentive plan (including the Plan) operated by any Group Member.

Other provisions relating to reduction and recovery provisions

8.6 If the action or conduct of any Participant, Group Member or relevant business unit is under investigation by the Company, or the Company has been notified by a third party that an investigation into such action or conduct has begun, before the end of the Recovery Period and such investigation has not been or is not expected to be concluded by that date, the Board may extend the Recovery Period to end on such later date as the Board considers appropriate to allow such investigation to be concluded.

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8.7 For the purposes of this rule 8, references to:

1. a Participant include former Participants; and
2. a Group Member or a relevant business unit include any former Group Member or former business unit.

9. Vesting, Release, Exercise and Settlement

1. As soon as reasonably practicable after the end the Performance Period (or if this rule applies to an Award under rule 12 or 13 before the end of the Performance Period, then at the relevant time), the Board will determine if and to what extent any Performance Condition has been satisfied, and, accordingly, the extent to which the Award will, subject to rule 9.2, Vest. If the extent to which the Performance Condition is satisfied is determined before the end of the Performance Period, the Board will take into account such factors as it considers are relevant.
2. As soon as reasonably practicable after the determination under rule 9.1 (or in the case of an Award that is not subject to a Performance Condition, after the end of the Vesting Period), the Board may adjust (including by reducing to nil) the extent to which an Award would (but for this rule 9.2) Vest, if it considers that:
3. 1. such Vesting level does not reflect the underlying financial or non-financial performance of the Participant or the Group over the Vesting Period;
   2. such Vesting level is not appropriate in the context of circumstances that were unexpected or unforeseen at the Grant Date; or
   3. there exists any other reason why an adjustment is appropriate,

taking into account such factors as the Board considers relevant.

1. An Award will Vest to the extent determined in accordance with rules 9.1 and 9.2 and any part of the Award that does not Vest on such date will lapse immediately.
2. Subject to rules 10, 12 and 13, an Award will be Released on the Normal Release Date unless on the Normal Release Date (or on any other date on which an Award is due to be Released under rule 12 or 13):
3. 1. a Dealing Restriction applies to the Participant, in which case an Award will be Released on the date on which such Dealing Restriction lifts; or
   2. the action or conduct of any Participant, Group Member or relevant business unit is under investigation pursuant to rule 8 and such investigation has not yet been concluded by that date, in which case an Award will be Released on such later date as the Board considers appropriate to allow such investigation to be concluded.
4. Subject to rules 10, 12 and 13, a Released Nil-Cost Option may be exercised until the tenth anniversary of the Grant Date (or such earlier date as the Board may determine on or before the Grant Date) in such manner as the Board determines, after which time it will lapse. To exercise a Nil-Cost Option with a Nominal Exercise Price, the Participant must, unless the Board decides to waive the requirement to pay the Nominal Exercise Price, pay the Nominal Exercise

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