Auto Trader : Rules of the Auto Trader 2024 Long Term Incentive Plan - Approval Draft

Approval Draft: 25.06.24

Rules of the Auto Trader 2024 Long Term Incentive Plan

Approved by shareholders on [19 September]2024

Adopted by the board of the Company on [ ]2024

Expiry date [19 September]2034

Table of Contents
1.	DEFINITIONS AND INTERPRETATION	2
2.	GRANT OF AWARDS	5
3.	PERFORMANCE CONDITION	5
4.	RESTRICTIONS ON TRANSFER AND BANKRUPTCY	5
5.	DIVIDEND EQUIVALENTS	6
6.	INDIVIDUAL LIMIT	6
7.	PLAN LIMITS	6
8.	REDUCTION AND RECOVERY	7
9.	VESTING, EXERCISE AND SETTLEMENT	9
10.	RELEVANT LIABILITIES AND REGULATORY ISSUES	10
11.	HOLDING PERIOD	11
12.	CASH EQUIVALENT	12
13.	CESSATION OF EMPLOYMENT	12
14.	CORPORATE EVENTS	15
15.	ADJUSTMENTS	18
16.	AMENDMENTS	18
17.	LEGAL ENTITLEMENT	19
18.	GENERAL	19
Schedule 1 Cash Awards	21

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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 14.7, the board of the Company or any committee or person duly authorised by the board, or any duly appointed successor body;

"Company" means Auto Trader Group plc registered in England and Wales under number 9439967;

"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 day on which the Policy is approved by shareholders;
3. the first Dealing Day after the day on which the Company makes an announcement of its results for any period; 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;

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"Holding Period" means a period of two years (or such other period as the Board may determine on or before the Grant Date), beginning on the Normal Vesting Date and during which the restrictions in rule 11 will apply;

"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;

"Net Vested Shares" means the Shares acquired by a Participant, after the application of rule 10, following the Vesting of a Conditional Award or the exercise of a Nil-Cost Option, that are subject to a Holding Period;

"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 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;
2. the date on which the Board determines whether an adjustment should be made in accordance with rule 9.2; and
3. any date set by the Board on or before the Grant Date;

"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 or underpin (whether on an individual basis or otherwise) imposed under rule 3.1 that relates to performance;

"Performance Period" means the period determined by the Board over which a Performance Condition will be measured;

"Plan" means the Auto Trader 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;

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"Recovery Period" means subject to rule 8.6, the period beginning on the first day of an Award's Vesting Period and ending on the sixth anniversary of the Grant 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 and which is granted in respect of remuneration they forfeit in connection with their joining the Group;

"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 an 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:

1. in relation to a Conditional Award, the point at which the Participant becomes entitled, subject to rule 11, 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 "Vested", "Vesting" and "Unvested" will be construed accordingly;

"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
2. 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).

1.2 References in the Plan to:

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

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1.2.3 the masculine include the feminine and vice versa.

1.3 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, subject to the rules of the Plan and such additional terms as the Board may determine.
2. An Award may be divided into distinct tranches with different Vesting Periods, Normal Vesting Dates, 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.
3. 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 United Kingdom or overseas).
4. 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 Normal Vesting Date, any Performance Condition, any Holding Period, any additional terms imposed by the Board in accordance with rule 2.1 and, in the case of a Nil-Cost Option, whether it has a Nominal Exercise Price.
5. 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:
6. 1. the Award may not Vest; and/or
   2. the Board may determine that the Award will lapse.
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. The application of Performance Conditions to any Award granted to an executive director of the Company will be consistent with the Policy.
2. Subject to rules 13 and 14, a 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 the Board considers that an amended or substituted Performance Condition is reasonable, appropriate and would not be materially less difficult to satisfy than when it was originally set.

4. RESTRICTIONS ON TRANSFER AND BANKRUPTCY

4.1 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.

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4.2 An Award will lapse immediately if the Participant is declared bankrupt or, if the Participant is outside the United Kingdom, 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 date on which the Award Vests) as the Board may determine. This amount may assume the reinvestment of dividends (on such basis as the Board may determine) and may exclude or include special dividends.

6. INDIVIDUAL LIMIT

1. No Eligible Employee may be granted an Award (other than a Recruitment Award) that would cause the market value 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 market value of Shares over which an Executive Director may be granted Awards under the Policy.
2. For the purposes of rule 6.1, the "market value" of a Share:
3. 1. shall be determined by the Board;
   2. will normally be determined by reference to the value of a Share at the date the Award is granted; and
   3. may be based on an average of Share prices over a period of up to three months.
4. To the extent any Award exceeds the limit in rule 6.1 it will be scaled back accordingly.

7. PLAN LIMITS

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.
2. 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. The Board may determine that any operation of an employee share plan is or is not discretionary taking into account such factors as it considers relevant.
3. 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:
   7.3.1 Shares that have been issued or may be issued to any Trustee; and

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7.3.2 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 one or more 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 save to the extent that the Board determines that any such Award shall be satisfied in a way which is not inconsistent with any limit in this rule 7.
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

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
2. The Board may, where rule 8.4 or 8.5 applies:
3. 1. impose further conditions on an Award; and/or
   2. reduce (including to nil) the number of Shares to which an Award relates,

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 or 8.5 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; and/or

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8.3.3 determine that some or all of the Net Vested Shares subject to a Holding Period under rule 11 shall be forfeited and transferred for nil consideration to such person as is specified by the Board,

at any time before the end of the Recovery Period in respect of the 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 to the application of reduction and recovery provisions

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 statements;
2. an error in assessing a Performance Condition applicable to the Award or in the information or assumptions on which the Award was granted or Vests;
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. the relevant Participant is dismissed for misconduct or the Board determines that they could have been summarily dismissed by reason of gross misconduct;
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

1. The Board may take any of the actions set out in rule 8.2 or 8.3.3 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
2. 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.
3. For the purposes of this rule 8, references to:
   8.7.1 a Participant include former Participants; and

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8.7.2 a Group Member or a relevant business unit include any former Group Member or former business unit.

9. VESTING, 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 13 or 14 before the end of the Performance Period, then at the relevant time), the Board will determine whether and, if relevant, 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 Performance Condition is assessed before the end of the Performance Period, the Board will take into account in its determination such factors as it considers are relevant and if the Award is subject to more than one Performance Condition and/or a Performance Condition consisting of more than one measure, may vary the weightings of those Performance Conditions and/or measures on such basis as it considers appropriate.
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 the 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; or
   2. such Vesting level is not appropriate in the context of the experience of shareholders or other stakeholders,

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, 13 and 14, an Award will Vest on its Normal Vesting Date unless on the Normal Vesting Date (or on any other date on which the Award is due to Vest under rule 13 or 14):
3. 1. a Dealing Restriction applies to the Participant, in which case the Award will Vest 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 the Award will Vest on such later date as the Board considers appropriate to allow such investigation to be concluded.
4. Subject to rules 10, 13 and 14, a Vested 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 Price to the Company or enter into arrangements acceptable to the Board to pay the Nominal Exercise Price.

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