Caledonia Investments : Draft rules of the Caledonia Investments Share Incentive Plan

DRAFT 6 JUNE 2024

_____ ____

CALEDONIA INVESTMENTS PLC

[TRUSTEE]

Trust Deed of The Caledonia Investments Share

Incentive Plan

Established by resolution of the Remuneration Committee on 5 June 2024

and approved by shareholders in general meeting on [17 July 2024]

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	CONTENTS
CLAUSE	PAGE
1.	DEFINITIONS	1
2.	Trusts of the Free Shares and Matching Shares	8
3.	Trusts of the Partnership Shares	8
4.	Trusts of the Dividend Shares	9
5.	General Trusts of the Plan	10
6.	Investment and borrowing powers	10
7.	Receipts by the Trustees	11
8.	Disposal and retention of Plan Shares	11
9.	Application of Plan to Subsidiaries, etc	12
10.	Voting rights and directions	12
11.	Trustees' powers of delegation	13
12.	Administration	14
13.	Trustees' indemnities and charges	14
14.	Appointment and retirement of Trustees	15
15.	Residence of the Trustees	16
16.	Alterations	16
17.	Termination of Plan	18
18.	Governing law	18
19.	Construction of this Deed	18
20.	Counterparts	18
Schedule 1 The Rules of The Caledonia Investments Share Incentive Plan	20
Appendix 1 Free Shares	30
Appendix 2 Partnership Shares	35
Appendix 3 Matching Shares	41
Schedule 2 Letter of Invitation	44
Schedule 3 Agreement for Free Shares	45
Schedule 4 Partnership Share Agreement	48
Schedule 5 Deed of Adherence	53

-i-

THIS DEED is made on

2024

BETWEEN:

1. CALEDONIA INVESTMENTS PLC whose registered office is at Cayzer House, 30 Buckingham Gate, London SW1E 6NN (the Company); and
2. [name of TRUSTEE] whose registered office is at [address] (the Trustees).]

INTRODUCTION:

Para 2(1)(a) Para 2(1)(b)

1. The Company wishes to establish a share incentive plan as a Schedule 2 SIP in accordance with the provisions of Chapter 6 of Part 7 of and Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 providing for:
2. 1. shares to be appropriated to employees without payment (Free Shares);
   2. shares to be acquired on behalf of employees out of sums deducted from their salary (Partnership Shares);

Para 3(1)

1. shares to be appropriated to employees without payment in proportion to the Partnership Shares acquired by them (Matching Shares); and

Para 7

1. 1. shares to be acquired with some or all of any cash dividend paid in respect of Plan Shares (Dividend Shares).
2. The purpose of the share incentive plan, to be called the Caledonia Investments Share Incentive Plan (the Plan), is to facilitate and encourage the holding of Shares by or for the benefit of employees of the Company and its Subsidiaries so that such plan shall constitute an "employees' share scheme" as that expression is defined in Section 1166 of the Companies Act 2006 and so that employees may, in accordance with Schedule 2 to the Act, enjoy a continuing stake in the Company.
3. The Plan must not provide benefits to employees otherwise than in accordance with Schedule 2 to the Act;
4. The Company by a resolution in general meeting passed on [17 July 2024] approved the establishment of the Plan.
5. The Trustees have agreed to be the original trustees of the Plan.

1. DEFINITIONS

Para 51

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

Accounting Period means any period for which audited accounts or half-yearly accounts of the Company are made up;

Accumulation Period means in relation to any acquisition of Partnership Shares such period not exceeding twelve months as the Board may determine and specify in the relevant Partnership Share Agreement (and which must be the

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Para 94

Para 35(1) to (2)

Para 94

same for each Participant) during which deductions from Salary may be accumulated before being applied in the acquisition of Partnership Shares;

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

Adoption Date means the date of adoption of the Plan by the Company in general meeting on [17 July 2024];

Announcement Date means a date on which the Company makes an announcement of its results for the preceding Accounting Period;

Appropriation Day means a day on which Free Shares or Matching Shares are appropriated to a Participant;

Appropriation Value means in relation to an appropriation of Shares, their Market Value on the relevant Appropriation Day;

Appropriation Year means the Tax Year during which an appropriation of Free Shares and/or Matching Shares is or is intended to be made under the Plan;

Associated Company has the meaning given by paragraph 94 of Schedule 2 to the Act;

Associated Plan means any Schedule 2 SIP established by the Company or an Associated Company;

Benefits Code has the meaning given by Section 63(1) of the Act;

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

Business Day means a day other than a Saturday or Sunday or public holiday in England and Wales on which banks are open in London for general commercial business;

the Company means Caledonia Investments plc of Cayzer House, 30 Buckingham Gate, London SW1E 6NN, with company number 00235481;

Connected Company has the meaning given by paragraph 18(3) of Schedule 2 to the Act;

Control has the meaning given by Section 995 of the ITA;

CTA 2010 means the Corporation Tax Act 2010;

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

the Deed means this Trust Deed constituting, inter alia, the Plan as amended from time to time;

Deed of Adherence means a deed substantially in the form set out in Schedule 5 to this Deed;

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Para 65

Para 15(2)

Para 8(1)(b)

Para 15(2)(b)

Paras 8(5) and 14 (8)

Paras 36, 61 and 67

Para 36(2)

Dividend Shares means Shares which satisfy the requirements of paragraph 65 of Schedule 2 to the Act and which are, or are to be, acquired with some or all of any cash dividend paid in respect of Plan Shares in accordance with Rule 11 of Schedule 1 to this Plan or, if the context so requires, any New Shares issued or otherwise representing such Shares;

Eligible Employee means an individual who:

1. is an employee of a Participating Company (and is not under notice of termination of employment); and
2. is a UK resident taxpayer within the meaning of paragraph 8(2) of Schedule 2 to the Act; and
3. has such Qualifying Period (if any) of employment with a Qualifying Company as the Board may determine; or

in the case of an individual who does not satisfy the requirement of paragraph (b) above but satisfies the eligibility requirements of paragraphs (a) and (c) above, is nominated by the Board as an employee of a Participating Company (or is nominated as a member of a category of such employees);

PROVIDED always that in each case the individual is not ineligible to participate in the Plan by virtue of Rules 2.1 and 2.2 of the Plan or because they have served a subsisting notice under paragraph 1.1.6 of Appendix 1 of Schedule 1 to the Plan directing the Trustees not to appropriate Shares to them;

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

Employer Company has the meaning given by Section 510(7) of the Act;

Forfeiture Period means in relation to any appropriation of Free Shares or Matching Shares such period as the Board may determine in respect of that appropriation, being normally a three-year period beginning with the relevant Appropriation Date;

Free Shares means Shares which are, or are to be, appropriated to a Participant without payment under Appendix 1 to Schedule 1 of this Plan or, if the context so requires, any New Shares issued or otherwise representing such Shares;

Group means the Company and the Subsidiaries and member of the Group shall be construed accordingly;

HMRC means HM Revenue & Customs;

Holding Period means:

1. such period as the Board may determine in respect of each appropriation of Free Shares or Matching Shares which may not be less than three years or more than five years beginning with the date on which the Shares are appropriated to the Participant (or such other period as may be permitted under paragraph 36(2) of Schedule 2 to the Act from time

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Para 92

Para 92(2)

Para 59

Para 4

to time) and which must be the same for all Participants receiving that appropriation of Free Shares or Matching Shares; and

1. in respect of Dividend Shares, three years beginning with the date referred to in Rule Schedule 111.5 of Schedule 1 (or such other period as may be permitted under paragraph 67 of Schedule 2 to the Act from time to time);

ITA means the Income Tax Act 2007;

ITTOIA means the Income Tax (Trading and Other Income) Act 2005;

Key Feature has the meaning given to that term by paragraph 81B(8) of Schedule 2 to the Act;

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

1. so long as the Shares are admitted to listing on the Official List of the Financial Conduct Authority and admitted to trading on the London Stock Exchange, (i) if the Trustees acquire Shares from a purchase made on the market on that date and appropriate Shares on the date purchased, the average price per Share at which the Trustees acquire Shares on that date and (ii) if the Trustees acquire and/or appropriate Shares other than as specified in (i), the lower of the two prices shown in the Daily Official List of the London Stock Exchange as the closing price of the Shares on that day plus one half of the difference between the two figures; or
2. if at any time the Shares are not admitted to listing on the Official List of the Financial Conduct Authority and admitted to trading on the London Stock Exchange, the market value of a Share as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance with the HMRC Shares and Assets Valuation,

and, in either case, if the Shares are subject to any Restriction, as if they were not subject to any Restriction;

Matching Shares means Shares which are or are to be appropriated to a Participant under Appendix 3 of Schedule 1 to this Plan in proportion to any Partnership Shares acquired on the Participant's behalf and complying with the provisions of paragraph 59 of Schedule 2 to the Act or, if the context so requires, any New Shares issued or otherwise representing such Shares;

New Shares has the meaning given by paragraph 87(7) of Schedule 2 to the Act;

Participant means any person to whom Free Shares or Matching Shares have been appropriated or on whose behalf Partnership Shares or Dividend Shares have been acquired or who has entered into a Partnership Share Agreement or, where the context so permits, their personal representatives;

Participating Company means:

1. the Company;

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Para 44

Para 99(1)

Para 17

1. any other body corporate which is under the Control of the Company, is a Subsidiary of the Company, and with the approval of the Company participates in the Plan and has executed a Deed of Adherence,

and, for the avoidance of doubt, shall not mean a jointly-owned company of the Company which is a constituent company in a different group plan as those terms are defined in Schedule 2 to the Act;

Partnership Share Agreement means the contract required to be entered into pursuant to paragraph 44 of Schedule 2 to the Act in the form of Schedule 4 or in such other form as may comply with the requirements of Schedule 2 to the Act from time to time;

Partnership Share Money has the meaning given by paragraph 45(2) of Schedule 2 to the Act;

Partnership Shares means the Shares which are, or are to be, acquired by the Trustees on behalf of Eligible Employees under Appendix 2 to Schedule 1 of this Plan or if the context so requires any New Shares issued or otherwise representing such Shares;

PAYE Regulations has the meaning given by section 684(8) of the Act;

Performance Period means the period as determined by the Board during which any performance target or performance measure applied to a Unit shall be assessed;

Plan means the Caledonia Investments Share Incentive Plan, the rules of which are set out in Schedule 1 to this Deed;

Plan Period means such period as the Board may determine from time to time which may be an indefinite period subject to termination by the issue of a plan termination notice in respect of the Plan as mentioned in clause 17 of this Deed;

Plan Shares means any or all of any Free Shares, Matching Shares, Partnership Shares or Dividend Shares which are held by the Trustees upon the terms of the Plan on behalf of the Participants to whom they have been appropriated or on whose behalf they have been acquired or, if the context so requires, any New Shares issued or otherwise representing such Plan Shares;

Qualifying Company means:

1. a company that is a Participating Company at the end of any relevant Qualifying Period; or
2. a company that was, when the individual was employed by it, a Participating Company; or
3. a company that was, when the individual was employed by it, an Associated Company of:
4. 1. a company qualifying under (a) or (b) above, or

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Para 16

Para 86

Para 95(2)

Para 43(4)

1. another company qualifying under this definition;

Qualifying Period means such period as the Board may from time to time determine but which:

1. in relation to eligibility for the appropriation of Free Shares, shall not be more than 18 months ending on the relevant Appropriation Day;
2. in relation to eligibility for the acquisition of Partnership Shares, shall not be more than 18 months ending with the deduction of monies from Salary to acquire Partnership Shares (where there is no Accumulation Period) or 6 months ending with the start of the Accumulation Period relating to the Partnership Shares (where there is an Accumulation Period); and
3. in relation to eligibility for the appropriation of Matching Shares, shall not be more than 18 months ending with the deduction of monies from Salary to acquire the Partnership Shares to which the Matching Shares relate (where there is no Accumulation Period) or 6 months ending with the start of the Accumulation Period relating to the Partnership Shares to which the Matching Shares relate (where there is an Accumulation Period),

PROVIDED THAT the Qualifying Period in relation to any appropriation of Free Shares or Matching Shares or any acquisition of Partnership Shares shall be the same for all employees of the Company and any Participating Companies but may be different in respect of different appropriations and acquisitions of such shares;

Reconstruction means a transaction affecting any Plan Shares as mentioned in paragraph 86 of Schedule 2 to the Act;

Relevant Employment means employment with the Company or any Associated Company;

Restriction means a restriction within the meaning given to that term by paragraph 99 of Schedule 2 to the Act;

Salary means:

1. in relation to an Eligible Employee who is within the scope of the charge to tax under Part 2 of the Act, such of the earnings of their employment by reference to which they are eligible to participate in the Plan:
2. 1. as are liable to be paid under deduction of tax under the PAYE Regulations, after deducting any amounts included by virtue of the Benefits Code; or
   2. as would be liable to be so paid apart from the SIP Code, and
3. in the case of an Eligible Employee who is not within the scope of the charge to tax under Part 2 of the Act, such of the earnings of the eligible

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Paras 25 to 29

Para 37

employment as would have fallen within paragraph (i) or (ii) above if the individual had been within the scope of that charge to tax;

Schedule 2 SIP has the meaning given to that term by paragraph 1 of Schedule 2 to the Act;

Share means a share in the capital of the Company which satisfies the conditions specified in Part 4 of Schedule 2 to the Act;

SIP Code has the meaning given by Section 488(3) of the Act;

Subsidiary means, in relation to the Company, a subsidiary within the meaning given by Section 1159 of the Companies Act 2006;

Takeover means a transaction affecting any Plan Shares, as mentioned in paragraph 37 of Schedule 2 to the Act;

Trustees means the original trustees referred to in the Deed or such other person or persons who is or are the trustee or trustees from time to time of the Plan;

Unit means any individual or group of individuals, business unit, division, body corporate, or other person within the Company or any Participating Company to which the Board shall apply a performance target or performance measure; and

Year of Assessment has the meaning given by Section 989 of the ITA.

1. Interpretation.In these rules:
2. 1. words and expressions not otherwise defined herein have the same meaning they have in the Act and the CTA 2010.
   2. unless the context otherwise requires, references to a person include any individual, firm, body corporate (wherever incorporated), government, state or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality); and
   3. unless the context otherwise requires, headings do not affect the interpretation of these rules; the singular shall include the plural and vice versa; and references to one gender include all genders.
3. Enactments.Except as otherwise expressly provided in these rules, any express reference to an enactment includes references to: (i) that enactment as amended, consolidated or re-enacted by or under any other enactment before or after the Adoption Date; (ii) any enactment which that enactment re-enacts (with or without modification); and (iii) any subordinate legislation (including regulations) made (before or after the Adoption Date) under that enactment, as amended, consolidated or re-enacted as described at (i) or (ii) above.

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Paras 71(1) and

(2)

Para 71(2)(a)

Para 75

Para 75(2)

Para 71(2)(b)

2. Trusts of the Free Shares and Matching Shares

1. Each Participating Company hereby covenants with the Trustees to pay to the Trustees, in accordance with and subject to the provisions of the Plan, the amounts due from it for the purpose of the acquisition of Free Shares or Matching Shares by the Trustees to be appropriated under the Plan to the Eligible Employees employed by it, together with any other amounts required to cover any costs, charges and expenses incurred in such acquisition and any other expenses and charges incurred by the Trustees in the establishment, operation and termination of the Plan.
2. Subject to the terms of this Deed, the Trustees hereby agree with each Participating Company to apply all monies received by them from Participating Companies under the Plan in the acquisition of Free Shares or Matching Shares and in paying their expenses, taxation and other liabilities, as the case may be, in accordance with the Rules of the Plan and to hold any Shares once appropriated and all other trust property so derived UPON TRUST for the Participants respectively entitled to such Shares and trust property subject to the Rules of the Plan.
3. The Trustees shall, as soon as practicable after the acquisition of Free Shares or Matching Shares for the purposes of the Plan, appropriate the Shares so acquired to Eligible Employees in accordance with the Rules of the Plan.
4. If, in the case of any acquisition of Shares for the purpose of an appropriation under the Plan of Free Shares or Matching Shares, it is not possible to appropriate all the Shares so acquired the Trustees may either retain so many of the Shares as the Company shall direct, or as soon as practicable shall sell any Shares and may apply the proceeds of such sale to meet any expenses in which case they shall as soon as practicable pay to the Participating Companies such monies in so far as practicable in the same proportion as they were provided or as may otherwise be appropriate.
5. The Trustees shall, as soon as practicable after the appropriation of Free Shares or Matching Shares by them pursuant to the Plan, notify each Participant, in such form as may comply with the requirements of Schedule 2 to the Act, of the description and number of Shares so appropriated to such Participant, the date of the appropriation, the Appropriation Value of the Shares, the Holding Period applying to such Shares and the details of any Restrictions applying to such Shares.

3. Trusts of the Partnership Shares

3.1 Subject as provided below, the Trustees agree with each Participating Company to hold all monies deducted from Participants' Salaries on behalf of such Participants in accordance with paragraph 2.1.6 of Appendix 2 to Schedule 1 to this Deed and to apply all such monies in the acquisition of Partnership Shares in accordance with the Rules of Plan and to hold any Partnership Shares once acquired and all other trust property so derived UPON TRUST for the

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