RHI Magnesita N : - Long Term Incentive Plan Rules

RHI MAGNESITA N.V.

RULES OF THE RHI MAGNESITA LONG-TERM INCENTIVE PLAN

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1. the Exercise Price, which may be nil; and
2. the Final Lapse Date.

In setting the Normal Vesting Date and Holding Period for Awards to directors of the Company, the Directors will have regard to:

1. 1. best practice principle 3.1.2 (vi) of the Dutch Corporate Governance Code, which requires that, the Normal Vesting Date or the end of the Holding Period should be at least five years from the date on which the Award is granted; and
   2. best practice principle 3.1.2 (vii), which requires that Options awarded to directors of the Company cannot be exercised during the first three years after they are awarded.
2. Performance Conditions
   The Directors may decide that Vesting of an Award will be conditional on the satisfaction of one or more conditions ("Performance Conditions") which may or may not be linked to the performance of the Company, the Participant, or the Member of the Group for whom or the business unit in which the Participant works.
   When setting Performance Conditions for Awards granted to directors of the Company, the Directors will have regard to best practice principle 3.1.2 (v) of the Dutch Corporate Governance Code which requires that Performance Conditions be measurable, determined in advance and predominantly long-term in character.
   Where an Award is subject to a Performance Condition, this must be specified at the Award Date.
   The Directors may change a Performance Condition if events occur which cause them to consider that an amended Performance Condition would be a more appropriate measure of performance but the Directors must be satisfied that the amendment will not make the Performance Condition materially easier to satisfy.
3. Dividend Equivalent
   If an Award carries a Dividend Equivalent, subject to Rule 6.2.3, the Participant will be entitled to an amount equal to the Dividends paid on the number of Shares in respect of which the Award Vests from the Award Date to the date of Vesting or, where rule 6.1.1 applies, to the end of the Holding Period (rounded down to the nearest whole Share).
   The Directors may decide, when the Award is granted that:
4. 1. the Dividend Equivalent will be calculated on the basis that each dividend was notionally invested in further Shares on or around the date of payment; and/or
   2. in the case of an Option, the Dividend Equivalent:
   3. 1. will relate to Dividends from the Award Date to the date of Vesting; and
      2. 1. will be added to the number of Shares in respect of which the Award Vests; and/or
         2. will be paid on exercise instead of Vesting; and/or

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1. 1. will relate to Dividends from the Award Date to the date of exercise or, where rule 6.1.1 applies, to the end of the Holding Period instead of the date of Vesting; and/or
   2. will be paid in respect of the number of Shares in respect of which the Option is exercised.
2. Documentation of Awards
   Awards will be granted by deed (except Awards of Forfeitable Shares - see rule 3).
   Each Participant will receive a certificate setting out the principal terms of the Award as soon as practicable after the Award Date. The certificate may be the deed referred to above or any other document. If any certificate is lost or damaged the Company may replace it on such terms as it decides.
3. No payment
   A Participant is not required to pay for the grant of any Award.

2 Limits

1. Individual limit for Awards
2. 1. An Award must not be granted to an Employee if it would, at the proposed Award Date, cause the market value of Shares subject to Awards that he has been granted in respect of that financial year to exceed 200% of his annual basic salary from Members of the Group or 250% if the Directors consider that exceptional circumstances justify it.
   2. For these purposes, market value may be determined by reference to share price averaged over any period specified by the Directors.
   3. The following will not be included in this limit:
   4. 1. Dividend Equivalents; and
      2. awards granted to an Employee to compensate him for awards forfeited on leaving his or her previous employment over Shares with a market value of up to 250% of his annual basic salary.
   5. "Basic salary" means gross salary before adjustment to take account of any flexible benefits.
3. Plan limits - 10 per cent
   An Award must not be granted if the number of Shares committed to be issued under that Award exceeds 10 per cent of the ordinary share capital of the Company in issue immediately before that day, when added to the number of Shares which have been issued, or committed to be issued, to satisfy Awards under the Plan, or options or awards under any other employee share plan operated by the Company, granted in the previous 10 years.

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