Grant of Awards under Long-Term Incentive Plans

14 September 2020

Headlam Group plc

(the 'Company')

Grant of awards under Long-Term Incentive Plans

Deferred Bonus Plan ('DBP')

On 11 September 2020, the Company granted awards in the form of nil-cost options over a total of 56,751 ordinary shares of 5 pence each in the Company ('Ordinary Shares') under the Company's DBP (the '2020 DBP') to the following Executive Directors:

As detailed in the 2019 Annual Report and Accounts, under the DBP, one-third of any annual bonus amount awarded to Executive Directors is deferred into a right to acquire Ordinary Shares at nil-cost. The 2020 DBP options will not vest until the second anniversary of the grant date, and are subject to a dividend equivalent in the form of shares, calculated on a re-investment basis. The number of Ordinary Shares over which the awards were granted was calculated based on a share price of 281 pence per Ordinary Share, being the average mid-market closing share price for the five business days prior to the grant date, as derived from the London Stock Exchange daily official list.

Performance Share Plan ('PSP')

On 11 September 2020, the Company granted awards in the form of nil-cost options over a total of 495,567 Ordinary Shares under the Company's PSP (the '2020 PSP'), to the following Executive Directors and Persons Discharging Managerial Responsibility ('PDMR'):

As detailed in the 2019 Annual Report and Accounts, the PSP awards vest dependent on the achievement of performance conditions measured over a three-year performance period. PSP awards to Executive Directors are additionally subject to a two-year holding period following the vesting date. During the holding period, the awards will accrue a dividend equivalent in the form of shares, calculated on a re-investment basis.

The number of Ordinary Shares over which the awards were granted was calculated based on a share price of 281 pence per Ordinary Share, being the average mid-market closing share price for the five business days prior to the grant date, as derived from the London Stock Exchange daily official list.

As a result of the impact of the COVID-19 pandemic, the Remuneration Committee has set altered performance conditions for the 2020 PSP awards to those outlined in the 2019 Annual Report and Accounts, which was approved and printed prior to the full emergence of the pandemic, the national UK lock-down, and associated impact on financial performance.

The underlying basic EPS growth performance condition has been removed, and the 2020 PSP awards have been granted subject to a performance condition based 100% on the Company's Total Shareholder Return ('TSR') over the three-year performance period relative to the TSRs of the constituents of the FTSE SmallCap Index (excluding investment trusts).  Threshold vesting (25%) will be achieved for median performance, and vesting will increase on a straight-line basis to full vesting for upper quartile performance (or better).

In addition, the awards are further subject to an underpin performance condition (the 'Underpin Performance Condition') that the extent of vesting reflects the overall financial performance of the Company over the three-year performance period. When making this determination the Remuneration Committee will have full discretion to ensure that the final outcome is warranted based on the performance of the Company in the light of all relevant factors to ensure there have been no windfall gains.

The revised performance conditions for the 2020 PSP awards are consistent with the Company's approved Directors' Remuneration Policy. Full details will be provided in the 2020 Annual Report and Accounts.

The awards, which are subject to the Malus and Clawback conditions of the PSP, will ordinarily vest on the date on which the Company's Remuneration Committee determines the extent to which the TSR performance condition and the Underpin Performance Condition have been satisfied.

Enquiries:

Notification and public disclosure of transactions by PDMRs and persons closely associated with them