Governance Report Remuneration Report continued 4 Terms of the S Limited Scheme The Incentive Shares entitle the holders, subject to certain performance criteria and leaver provisions, to up to 15% 4 of the growth in value of S Limited from the plan’s inception provided that the growth condition (as described below) has been met. Provided that the growth condition has been satisfied, the Incentive Shares entitle the holders to their return upon 4 a sale or combination of S Limited, its liquidation, the takeover or combination of the Company or, if none of those 4 events has occurred prior to 9 July 2023 (being the fifth anniversary of the combination with Media.Monks by S Limited), if Sir Martin Sorrell serves notice on the Company requiring it to acquire all of the Incentive Shares eligible for sale on or before 9 July 2025 (being the seventh anniversary of the combination with Media.Monks). If Sir Martin 4 serves such a notice, the growth in value of S Limited is measured against the market capitalisation of the Company based on an average of the mid-market closing price of the Ordinary Shares over the preceding 30 trading days, plus any dividends or distributions over time. Once triggered, all of the Incentive Shares eligible for sale receive value at the same time on a pro rata basis and then automatically reset such that they may receive the same return over a second period of up to seven years. The consideration payable if the Incentive Shares are triggered, save on a takeover, liquidation or combination of 4 4 S Limited, will be satisfied by the issue of Ordinary Shares in S Capital plc at the average of the mid-market closing price of the Ordinary Shares over the 30 trading days preceding the triggering of the Incentive Shares. Growth condition 4 The growth condition is the compound annual growth rate of the invested capital in S Limited being equal to or 4 greater than 6% per annum since the foundational investment into S Limited on 29 May 2018. The growth condition 4 takes into account the date and price at which shares in S Limited have been issued, the date and price of any 4 subsequent share issues and the date and amount of any dividends paid, or capital returned by S Limited to the 4 Company. Any cash raised by the Company from time to time has been and will continue to be invested in S Limited so that the growth condition will apply to that capital also. Conditions The Incentive Instruments are subject to certain conditions, at least one of which must be (and continue to be) satisfied in order for Sir Martin Sorrell (as the holder of the majority of the A2 Incentive Shares) to elect for the A1 share options and A2 Incentive Shares to be sold to the Company. The A1 and A2 Incentive Shares and Options will vest into 4 Ordinary Shares of S Capital plc in the following circumstances: 4 • a sale of all or a material part of the business of S Limited; 4 • a winding up of S Limited occurring; 4 • a sale or change of control of S Limited or the Company; or • if later, on 9 July 2023 (being the fifth anniversary of the MediaMonks combination). Compulsory redemption If the growth condition is not satisfied on or before 9 July 2025 (being the seventh anniversary of the combination with MediaMonks), or such later date as the Company and each of the Incentive Share classes agree, the Incentive Shares must be sold to the Company at a price per Incentive Share equal to the subscription price of £25.00 per Incentive Share. Leaver provisions The Incentive Shares are subject to leaver provisions. If a holder of Incentive Shares ceases to be employed by or hold office with the Group, that holder will become a ‘Leaver’ and, depending on the circumstances of his or her departure, certain of his or her Incentive Shares may be subject to forfeiture. 86 S4Capital Annual Report and Accounts 2021