MJ Gleeson : Proposed Amendments to the Annual and Deferred Bonus Plan Rules

The MJ Gleeson plc Annual and Deferred Bonus Plan

Table of contents

Contents

The MJ Gleeson plc Annual and Deferred Bonus Plan

1. Grant of Bonus Awards

1.1 Determination of participation

Subject to the Rules, whether the Plan shall be operated for any particular Financial Year, the identity of any Participant and the terms of their participation shall be determined by the Board in its absolute discretion. The selection of an Eligible Employee to participate in the Plan and the receipt of a Bonus Award, Cash Bonus or Share Award (whether on one or more occasions) does not entitle that Eligible Employee to receive or be considered for participation in the Plan on any other occasion.

A Bonus Award may only be granted to an individual who is an Eligible Employee on the date on which the Bonus Award is granted.

Where the Company is required to have in place a Directors' Remuneration Policy, the terms of a Bonus Award to be granted to an Eligible Employee who is a director of the Company must fall within the scope of the Directors' Remuneration Policy most recently approved by the Company in a general meeting. Such terms may include by way of example but without limitation any relevant individual limit in Rule 1.2, any Performance Targets set out in Rule 1.7 and the proportion of any Bonus Award which is delivered as a Cash Bonus and/or a Share Award.

1.2. Annual limit

The maximum Bonus made to an Executive Director Participant in respect of any Financial Year must not exceed 150% of his basic salary paid by the Group in the Financial Year to which the Bonus Award relates, expressed as an annual rate. For the avoidance of doubt, for other Participants a higher limit may be applied at the discretion of the Board.

1.3. Method of satisfying Bonus Award

At or after the date on which the Bonus Award is granted, but in any event before the amount of the Participant's Bonus Award has been determined, the Board shall, in its absolute discretion, determine the percentage of a Participant's Bonus Award which will be delivered as a Cash Bonus and the percentage (which may be nil but no more than 50% of the total Bonus Award) which will be deferred and delivered in the form of a Share Award.

After the end of the Financial Year to which a Bonus Award relates, the Board will determine the number of Plan Shares over which the Share Award shall be granted.

The number of Plan Shares subject to a Participant's Share Award shall be calculated by dividing the amount of his Bonus to be deferred and granted as a Share Award by the average Market Value (measured over the last 30 days of the Financial Year to which the Bonus Award relates or such other measurement period as determined by the Board in its absolute discretion) of a Plan Share. The number of Plan Shares shall be rounded down to the nearest whole Plan Share.

1.4. Procedure for granting and notifying Participants of Bonus Awards

The Board shall grant Bonus Awards by such method as it shall determine (which may include by the Board passing a resolution to make or approve the grant of Bonus Awards).

A Bonus Award Certificate shall be issued to each Participant as soon as reasonably practicable following the grant of the Bonus Award setting out details of the Bonus Award determined in accordance with Rule 1.5.

1.5. Contents of Bonus Award certificate

A Bonus Award certificate shall state:

1. the date on which the Bonus Award was granted;
2. the maximum potential Bonus (or how such amount will be calculated) expressed as a percentage of the Participant's basic salary;
3. how the Bonus will be calculated;
4. any Performance Targets and conditions applicable to the Bonus Award;
5. any other conditions of the Bonus Award; and
6. the Financial Year to which it relates.

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The MJ Gleeson plc Annual and Deferred Bonus Plan

Subject thereto, a Bonus Award certificate shall be in such form as the Board may determine from time to time.

1.6. Bonus Awards non-transferable

A Bonus Award shall be personal to the Participant and, except in the case of the death of a Participant, a Bonus Award shall not be capable of being transferred, charged or otherwise alienated and shall lapse immediately if the Participant purports to transfer, charge or otherwise alienate the Bonus Award.

1.7. Performance Targets and conditions

The Bonus Award will be subject to the satisfaction of the Performance Targets for the relevant Financial Year and/or any other conditions set by the Board.

If an event occurs which causes the Board to consider that any Performance Target and/or any other condition to which a Bonus Award has been made is no longer appropriate, the Board may substitute, vary or waive that Performance Target and/or any other condition in such manner (and make such consequential amendments to the Rules) as:

1. is reasonable in the circumstances; and
2. except in the case of a waiver, produces a fairer measure of performance and is not materially less difficult to satisfy than if the event had not occurred.

The Bonus Award shall then take effect subject to the Performance Targets and/or any other conditions as substituted or varied or waived.

The Board shall, as soon as practicable, notify each Participant concerned of any determination made by it under this Rule 1.7.

2. Testing of Performance Targets and conditions and calculation of Bonus

2.1. Testing of Performance Targets and conditions

As soon as practicable following the end of the Financial Year in respect of which a Bonus Award was granted, the Board shall determine the extent to which the Performance Targets and/or any other conditions imposed on the Bonus Award under Rule 1.7, in their original form or as substituted or varied from time to time, have been satisfied and the Board shall determine the Bonus (if any) in respect of the relevant Bonus Award.

2.2. Payment of Cash Bonus

When the Board makes its determinations under Rule 2.1, it shall also determine the amount of any Cash Bonus payable in respect of the Bonus Award. Payment of any Cash Bonus shall be made as soon as practicable after the Board has made its determinations under Rule 2.1.

2.3. Effect of cessation of Relevant Employment

Subject to Rule 2.4, a Bonus shall be delivered only while the Participant is in Relevant Employment and if a Participant ceases to be in Relevant Employment, any Bonus Award granted to him shall lapse on the date the Participant ceases to be in Relevant Employment.

2.4. Cessation of Relevant Employment during Financial Year

Notwithstanding Rule 2.3, if a Participant ceases to be in Relevant Employment during the relevant Financial Year to which the Bonus Award applies by reason of:

1. death;
2. injury, ill-health or disability evidenced to the satisfaction of the Board;
3. redundancy within the meaning of the Employment Rights Act 1996 (or any applicable equivalent overseas legislation) evidenced to the satisfaction of the Board;
4. retirement by agreement with the company by which he is employed;

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The MJ Gleeson plc Annual and Deferred Bonus Plan

1. the Participant being employed by a company which ceases to be a Group Member;
2. the Participant being employed in an undertaking or part of an undertaking which is transferred to a person who is not a Group Member; or
3. any other circumstances if the Board decides in any particular case (apart from dishonesty, fraud, misconduct or any other circumstances justifying summary dismissal),

the Board may at its absolute discretion determine that the Bonus Award will continue with the Performance Targets for the relevant Financial Year and any other conditions imposed under Rule 1.7 considered at the time the Bonus is determined under Rule 2.1. Any Bonus payable in respect of the Bonus Award shall be delivered in the same way and at the same time as if the Participant had not ceased to be in Relevant Employment, unless the Board in its absolute discretion decides otherwise.

Unless the Board in its absolute discretion decides otherwise, the Bonus will be reduced pro rata to reflect the number of whole months from the beginning of the relevant Financial Year to which the Bonus Award relates until the date of cessation of Relevant Employment as a proportion of the relevant Financial Year.

2.5. Cessation of Relevant Employment after the Financial Year

Notwithstanding Rule 2.3, if a Participant ceases to be in Relevant Employment (apart from gross misconduct) after the relevant Financial Year to which the Bonus Award relates but before the time when the Cash Bonus relating to that Bonus Award is due to be paid, the Board may at its absolute discretion determine that the Participant shall remain eligible for the delivery of a Bonus of such amount as it determines at its absolute discretion based on its assessment of the extent to which the Performance Targets for the relevant Financial Year and any other conditions imposed under Rule 1.7 have been met. Any Bonus payable in respect of the Bonus Award shall be delivered in the same way and at the same time as if the Participant had not ceased to be in Relevant Employment, unless the Board in its absolute discretion decides otherwise.

2.6. Meaning of ceasing to be in Relevant Employment

For the purposes of the Plan, a Participant shall not be treated as ceasing to be in Relevant Employment until he no longer holds any office or employment with any Group Member. In addition, unless the Board otherwise decides, a Participant shall not be treated as so ceasing if within 7 days he recommences employment or becomes an office holder with any Group Member.

The Board may decide that a Participant will be treated as ceasing to be in Relevant Employment when he gives or receives notice of termination of his employment (whether or not lawful).

2.7. Takeover

Subject to Rule 2.12, where a person obtains Control of the Company as a result of making an offer to acquire Plan Shares, any outstanding Bonus Awards shall be determined by the Board on or as soon as practicable after the person obtains Control as set out below.

The amount of the Bonus shall be determined by the Board in its absolute discretion taking into account such factors as the Board may consider relevant including, but not limited to, the Performance Targets for the relevant Financial Year and any other condition imposed under Rule 1.7.

Unless the Board in its absolute discretion decides otherwise, the Bonus will be reduced pro rata to reflect the number of whole months from the beginning of the relevant Financial Year to which the Bonus Award relates until the person obtains Control as a proportion of the relevant Financial Year.

Any Bonus determined under this Rule 2.7 shall be paid in the form of a Cash Bonus as soon as practicable following the Board's determination.

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