Coats : Proposed 2024 Long Term Incentive Plan (LTIP) Rules

CONTENTS

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CLAUSE

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1. Interpretation

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

Acceptance Notice: a document, in the form prescribed by the Remuneration Committee from time to time, in which the Award Holder accepts these Rules and the terms of their Award.

Acquiror: a person who obtains Control of the Company either alone or together with persons Acting in Concert (as defined in the City Code on Takeovers and Mergers published by the Panel on Takeovers and Mergers) with them or it.

Adoption Date: the date of the approval of the Plan by the Company's shareholders (or, where shareholder approval is not sought, the date of the adoption of the Plan by the Board).

Award: any of the following:

1. a Conditional Share Award;
2. a Forfeitable Share Award;
3. a Market Value Option;
4. a Nil Cost Option;
5. a Nominal Cost Option;
6. a Phantom Option, or
7. a Phantom Share Award.

Award Certificate: a certificate setting out the terms of an Award, in accordance with rule 2.3, in the form prescribed by the Remuneration Committee from time to time.

Award Holder: an individual who holds an Award or, where applicable, that individual's personal representatives, and for the purposes of rules 13, 14, 18, 26, 27, 31 and 32 shall include a former Award Holder.

Bad Leaver: an Award Holder who ceases to be an Employee and is not a Good Leaver.

Base Price: the amount (if any) which is deducted from the Market Value of a Share in order to determine the amount due to the Award Holder who exercises a Phantom Option. The Base Price in relation to a Phantom Option may be nil.

Board: the board of directors of the Company.

Business Day: a day other than a Saturday, Sunday or public holiday in England when banks in London are open for business.

Cash-onlyAward: a Phantom Option or a Phantom Share Award (which confer no right on the Award Holder to receive Shares or any interest in Shares).

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Clawback Amount: an amount of value determined in accordance with rule 14.

Closed Period: has the same meaning as in UK MAR.

Company: Coats Group Plc, incorporated and registered in England with number 00103548.

Conditional Share Award: a right to acquire for no cost a specified number of Shares on the Vesting Date.

Control: has the meaning given to it in section 995 of the Income Tax Act 2007.

Change of Control: an Acquiror acquires Control of the Company.

Daily Official List: the daily record setting out the prices of all trades in securities conducted on the London Stock Exchange.

Dealing Day: a day on which the London Stock Exchange is open for business.

Dealing Restrictions: restrictions imposed by the Company's share dealing code, UK MAR, the Listing Rules or any applicable laws, codes or regulations which impose restrictions on dealing in shares and other securities.

Dilutive Shares: on any date, all shares of the Company which:

1. have been issued, or transferred out of treasury, on the exercise of options granted, or in satisfaction of any other awards made, under any Employees' Share Scheme (including the Plan) during the shorter of:

1. the period of ten years ending on (and including) that date; and
2. the period since the Company's shares were first admitted to the Official List; and

1. remain capable of issue, or transfer out of treasury, under any Existing Award.

For the purposes of the above:

1. shares by reference to which a cash payment under a Cash-only Award (or any cash-based award under any other plan operated by a Group Company) is calculated, and Shares subject to Transfer Only Awards (or similar under any other Employee Share Scheme operated by a Group Company), are not Dilutive Shares;
2. shares which were subject to rights which (i) lapsed or (ii) were surrendered or cancelled, will be ignored;
3. if, in the opinion of the Remuneration Committee, institutional investor guidelines cease to require treasury shares to be counted toward the above limit, paragraphs a and b in the definition of Dilutive Shares above shall be read without the words "or transferred out of treasury" and "or transfer out of treasury" respectively, and

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1. where an event under rule 25 has taken place between the date of issue of the shares and the date on which the limit is to be calculated, the number of shares to be taken into account for the purposes of the above limit will be adjusted in the manner the Remuneration Committee considers appropriate to take account of such event.

Discretionary Dilutive Shares: Dilutive Shares which were acquired pursuant to, or remain subject to awards granted under, the Plan or any other discretionary Employees' Share Scheme.

Dividend Equivalent: has the meaning set out in rule 5.

Employee: any individual who is an employee (including an Executive Director) of a Group Company.

Employer Company: the Award Holder's employer or former employer.

Employer NICs: any secondary class 1 (employer) NICs (or the equivalent in any jurisdiction) that any Relevant Company is liable to pay (or reasonably believes it is liable to pay) as a result of any Taxable Event (or which it would be liable to pay in the absence of an election referred to in rule 26.1(g)) and which may be lawfully recovered from the Award Holder.

Employees' Share Scheme: has the meaning given to it by section 1166 of the Companies Act 2006.

Executive Director: (a) a director of the Company who is a member of the Board but is not a non-executive director, and (b) where applicable, a person who is not a director of the Company but who is (i) its chief executive officer (however described), or (ii) where such a function exists in the Company, its deputy chief executive officer (however described).

Exercise Date: in relation to an Option, the date on which it is validly exercised.

Exercise Notice: a document in the form prescribed by the Remuneration Committee from time to time that the Award Holder must complete and return (together with any other documents or payments required under the Plan) to the Company in order to exercise an Option.

Exercise Price: the price at which each Share subject to a Market Value Option or Nominal Cost Option may be acquired on the exercise of that Option.

Existing Award: an option or any other right or award under which shares in the Company may be acquired or received, granted under any Employees' Share Scheme (including the Plan) after the Shares were first admitted to the Official List.

Forfeitable Shares: Shares which are the subject of a Forfeitable Share Award.

Forfeitable Share Award: an award of Shares which are subject to forfeiture for a period, as set out in rule 10.

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Good Leaver: an Award Holder who ceases to be an Employee due to any of the following reasons:

1. death;
2. injury, ill health or disability (in each case evidenced to the satisfaction of the Remuneration Committee);
3. Redundancy;
4. retirement with the agreement of the Remuneration Committee (save that this Good Leaver reason d) does not apply in respect of US Award Holders);
5. their Employer Company ceasing to be a Group Company, or
6. the transfer of the business that employs the Award Holder to a person that is not a Group Company,

or in any other circumstances determined by the Remuneration Committee in its absolute discretion.

Grant Date: the date on which an Award is, was, or is to be granted.

Grant Period: the period of 42 days commencing on the Adoption Date and, thereafter, the period of 42 days commencing on the Dealing Day immediately after the Company's announcement of its results for any period (unless, in each case, the Company is restricted from granting Awards during such periods as a result of any Dealing Restrictions, in which case the relevant Grant Period will be 42 days commencing on the Dealing Day after such Dealing Restrictions are lifted).

Group: the Company, any Subsidiary of the Company, any holding company of the Company (within the meaning of section 1159 of the Companies Act 2006) or any Subsidiary of the Company's holding company, each from time to time.

Group Company: any member of the Group from time to time.

Holding Period: the period that starts on the Vesting Date and ends on such date as the Remuneration Committee may specify, not ordinarily being earlier than two years from the Vesting Date.

ITEPA 2003: the Income Tax (Earnings and Pensions) Act 2003.

Listed: means that any part of the Company's ordinary share capital is admitted to the Official List (with consequent admission to trading on the Main Market of the London Stock Exchange) or any other internationally recognised investment exchange (which shall for these purposes be construed as the stock exchanges that are determined "recognised stock exchanges" in accordance with section 1005 of the Income Tax Act 2007 plus the Alternative Investment Market of the London Stock Exchange).

Listing Rules: the Listing Rules issued by the Financial Conduct Authority, as amended from time to time.

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London Stock Exchange: London Stock Exchange plc or any successor body carrying on the business of the London Stock Exchange.

Market Value: whichever of the following applies:

1. For the purposes of determining on any Grant Date on which Shares are Listed either the Exercise Price of a Market Value Option or the Market Value of an Award for the purposes of rule 7, Market Value means an amount equal to the Middle Market Quotation for a Share on the Dealing Day immediately preceding the Grant Date or, where the Remuneration Committee decides in respect of any Award, the average of the Middle Market Quotations for a period not exceeding the five consecutive Dealing Days immediately preceding the Grant Date (but excluding any Dealing Days that fall in a Closed Period), or, for the purposes of determining the Exercise Price of a Market Value Option, such other amount as the Remuneration Committee may decide.
2. For the purposes of calculating on any Exercise Date or Vesting Date on which Shares are Listed (i) the payment due from a Phantom Option or Phantom Share Award or (ii) the Market Value of a Share for the purposes of rules 14 and 19, Market Value means the Middle Market Quotation of a Share on the day on which the Market Value is measured or if that day is not a Dealing Day, on the immediately preceding Dealing Day (or, if the Remuneration Committee so decides in respect of any Phantom Option or Phantom Share Award, the average of the Middle Market Quotations for the day on which the Market Value is measured and a period not exceeding the four consecutive Dealing Days immediately preceding the day on which the Market Value is measured (but excluding any Dealing Days that fall in a Closed Period)).
3. If Market Value has to be determined in relation to any day on which Shares are not Listed, the Remuneration Committee shall determine it to its satisfaction having regard to Part VIII of the Taxation of Chargeable Gains Act 1992, or, for the purposes of determining the Exercise Price of a Market Value Option, shall use such other amount as the Remuneration Committee may decide.

Market Value Option: an option to acquire Shares of which the Exercise Price is not less than the Market Value of a Share on the Grant Date of the option.

Middle Market Quotation: the mid-point between the closing 'buy' and 'sell' prices quoted on the relevant date (where the Shares are listed on the Official List and traded on the London Stock Exchange's market for listed securities, as derived from the Daily Official List).

NICs: National Insurance contributions or equivalent social security contributions in any other relevant jurisdiction.

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Nil Cost Option: an option to acquire Shares for no payment.

Nominal Cost Option: an option to acquire Shares for payment of an Exercise Price equal to their nominal value.

Nominee: the person (including a trustee of an employee benefit trust) nominated by the Remuneration Committee to hold Shares on bare trust for the Award Holder subject to the rules and the terms of the Nominee Agreement.

Nominee Agreement: a document in the form prescribed by the Remuneration Committee from time to time, executed by the Nominee and the Award Holder that sets out the terms on which the Nominee holds Shares for the Award Holder (or former Award Holder).

Non-OptionAward: any of the following:

1. a Conditional Share Award;
2. a Forfeitable Share Award, or
3. a Phantom Share Award;

Official List: means the Official List maintained by the Financial Conduct Authority.

Option: a Market Value Option, a Nil Cost Option, a Nominal Cost Option or a Phantom Option.

Ordinary Vesting Date: in respect of an Award, the later of the Performance Measurement Date (if any, or, where the Award has multiple Performance Measurement Dates, the final Performance Measurement Date) and the first Dealing Day following the end of the Vesting Period (provided that if that date falls in a Closed Period, the Ordinary Vesting Date will be the first Dealing Day following the end of that Closed Period).

Performance Condition: a condition set under rule 3which:

1. must be satisfied before an Award (or part thereof) can Vest, and
2. is specified in the Award Certificate.

Performance Measurement Date: the date on which the Remuneration Committee determines the extent to which any Performance Condition(s) to which the Vesting of the Award (or part thereof) is subject has/have been satisfied. An Award may have more than one Performance Measurement Date.

Performance Period: the period over which performance is measured to determine the extent to which any Performance Condition(s) has/have been achieved, which in respect of Awards granted to Executive Directors shall not ordinarily be less than three years.

Phantom Option: an option to receive a cash payment on exercise equal to the Market Value of a specified number of Shares minus the Base Price.

Phantom Share Award: a right to receive a cash payment on the Vesting Date equal to the Market Value of a specified number of Shares.

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Plan: the Employees' Share Scheme constituted and governed by these rules, as amended from time to time.

Redundancy: has the meaning given to it in section 139 of the Employment Rights Act 1996 ("ERA"), and shall be taken to have occurred at the conclusion of the legal process set out in ERA or, in circumstances where ERA does not apply, at the conclusion of any other process which complies with any applicable laws.

Relevant Company: the Award Holder's Employer Company or any other person who is or could be required to account to any Tax Authority for a Tax Liability in respect of an Award Holder.

Relevant Number: has the meaning given in rule 24.1(and, where applied to an event which is not a Change of Control, references in rule 24.1to a Change of Control shall be read as references to that event).

Relevant Restriction: a restriction stated in an Award Certificate that applies to Shares issued or transferred pursuant to the Award.

Remuneration Committee: the remuneration committee of the Board as designated by the Board from time to time.

Rollover Period: the period determined by the Acquiror during which an Award Holder can surrender an Award as set out in rule 24.

Salary: in relation to an Employee at any time means the basic annual salary payable to that Employee by a Group Company.

Scheme of Arrangement: a compromise or arrangement under either section 899 or section 901F of the Companies Act 2006.

Share: a fully paid ordinary share of £0.05 nominal value (subject to rule 25) in the capital of the Company.

Share-settledAward: any of the following:

1. a Conditional Share Award;
2. a Forfeitable Share Award;
3. a Market Value Option;
4. a Nil Cost Option;
5. a Nominal Cost Option.

Subsidiary: a subsidiary as defined in section 1159 of the Companies Act 2006.

Tax Authority: His Majesty's Revenue & Customs (or any successor authority from time to time) or, where relevant, its equivalent in another jurisdiction.

Taxable Event: any event or circumstance that gives or may give rise to a liability for the Award Holder to pay (or for any Relevant Company to account to any Tax Authority for or in respect of the Award Holder or former Award Holder) a Tax Liability, in respect of:

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